EXHIBIT 10.22

                                            2006 Stock Option and Incentive Plan

                            COATES INTERNATIONAL LTD.

                      2006 Stock Option and Incentive Plan

1. Purpose and Eligibility

      The purpose of this 2006 Stock Option and Incentive Plan (the "Plan") of
Coates International Ltd. (the "Company") is to provide stock options and other
equity interests in the Company (each an "Award") to employees, officers,
directors, consultants and advisors of the Company and its Subsidiaries, all of
whom are eligible to receive Awards under the Plan. Any person to whom an Award
has been granted under the Plan is called a "Participant". Additional
definitions are contained in Section 8.

2. Administration

      a. Administration by Board of Directors. The Plan will be administered by
the Board of Directors of the Company (the "Board"). The Board, in its sole
discretion, shall have the authority to grant and amend Awards, to adopt, amend
and repeal rules relating to the Plan and to interpret and correct the
provisions of the Plan and any Award. All decisions by the Board shall be final
and binding on all interested persons. Neither the Company nor any member of the
Board shall be liable for any action or determination relating to the Plan.
Specifically, without limiting the foregoing, the Board shall have authority to
adopt special rules and sub-plans for Participants in foreign jurisdictions to
take advantage of favorable tax programs or for other legal objectives. The
Board of Directors may further, with the consent of the affected optionee,
affect the cancellation of any or all outstanding options and the grant of new
options in substitution therefor covering the same or different numbers of
shares of Common Stock having an option exercise price per share that may be
higher or lower than the exercise price per share of the canceled options.

      b. Appointment of Committees. To the extent permitted by applicable law,
the Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a "Committee"). All references in the
Plan to the "Board" shall mean such Committee or the Board.

      c. Delegation to Officers. To the extent permitted by applicable law, the
Board may delegate to one or more officers of the Company the power to grant
Awards to employees or officers of the Company or any of its present or future
subsidiary corporations and to exercise such other powers under the Plan as the
Board may determine, provided that the Board shall fix the terms of the Awards
to be granted by such officers (including the exercise or purchase price of such
Awards, which may include a formula by which the price will be determined) and
the maximum number of securities subject to Awards that the officers may grant;
provided further that no officer shall be authorized to grant Awards to any
"executive officer" of the Company (as defined by Rule 3b-7 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or to any "officer" of the
Company (as defined by Rule 16a-1 under the Exchange Act).

3. Stock Available for Awards

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      a. Number of Shares. Subject to adjustment under Section 3(c), the
aggregate number of shares of Common Stock of the Company (the "Common Stock")
that may be issued pursuant to the Plan is 12,500,000 shares. If any Award
expires, or is terminated, surrendered or forfeited, in whole or in part, the
unissued Common Stock covered by such Award shall again be available for the
grant of Awards under the Plan. If shares of Common Stock issued pursuant to the
Plan are repurchased by, or are surrendered or forfeited to, the Company at no
more than cost, such shares of Common Stock shall again be available for the
grant of Awards under the Plan; provided, however, that the cumulative number of
such shares that may be so reissued under the Plan will not exceed 12,500,000
shares. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.

      b. Per-Participant Limit. Subject to adjustment under Section 3(c), no
Participant may be granted Awards during any one fiscal year to purchase more
than 25% of the number of shares specified in Section 3(a).

      c. Adjustment to Common Stock. In the event of any stock split, stock
dividend, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation, spin-off, split-up,
or other similar change in capitalization or event, (i) the number and class of
securities available for Awards under the Plan and the per-Participant share
limit, (ii) the number and class of securities, vesting schedule and exercise
price per share subject to each outstanding Option, (iii) the repurchase price
per security subject to repurchase, and (iv) the terms of each other outstanding
stock-based Award shall be adjusted by the Company (or substituted Awards may be
made) to the extent the Board shall determine, in good faith, that such an
adjustment (or substitution) is appropriate. If Section 7(e)(i) applies for any
event, this Section 3(c) shall not be applicable.

4. Stock Options

      a. General. The Board may grant options to purchase Common Stock (each, an
"Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option and the Common Stock
issued upon the exercise of each Option, including vesting provisions,
repurchase provisions and restrictions relating to applicable federal or state
securities laws, as it considers advisable.

      b. Incentive Stock Options. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall be granted only to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Board and the Company shall have no liability if an Option
or any part thereof that is intended to be an Incentive Stock Option does not
qualify as such. An Option or any part thereof that does not qualify as an
Incentive Stock Option is referred to herein as a "Nonstatutory Stock Option."

      c. Exercise Price. The Board shall establish the exercise price (or
determine the method by which the exercise price shall be determined) at the
time each Option is granted and specify it in the applicable option agreement.

      d. Duration of Options. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Board may specify in the applicable
option agreement.

      e. Exercise of Option. Options may be exercised only by delivery to the
Company of a written notice of exercise signed by the proper person together
with payment in full as specified in Section 4(f) for the number of shares for
which the Option is exercised.

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      f. Payment Upon Exercise. Common Stock purchased upon the exercise of an
Option shall be paid for by one or any combination of the following forms of
payment:

            (i) by check payable to the order of the Company;

            (ii) except as otherwise explicitly provided in the applicable
option agreement, and only if the Common Stock is then publicly traded, delivery
of an irrevocable and unconditional undertaking by a creditworthy broker to
deliver promptly to the Company sufficient funds to pay the exercise price, or
delivery by the Participant to the Company of a copy of irrevocable and
unconditional instructions to a creditworthy broker to deliver promptly to the
Company cash or a check sufficient to pay the exercise price, plus in each case
any required tax withholding; or

            (iii) to the extent explicitly provided in the applicable option
agreement, by (x) delivery of shares of Common Stock owned by the Participant
valued at fair market value (as determined by the Board or as determined
pursuant to the applicable option agreement), (y) delivery of a promissory note
of the Participant to the Company (and delivery to the Company by the
Participant of a check in an amount equal to the par value of the shares
purchased), or (z) payment of such other lawful consideration as the Board may
determine.

      g. Repricing. The Board may, without stockholder approval, amend any
outstanding Option granted under the Plan to provide an exercise price per share
that is lower than the then-current exercise price per share of such outstanding
Option. The Board may also, without stockholder approval, cancel any outstanding
Option and grant in substitution therefor new Options covering the same or a
different number of shares of Common Stock and having an exercise price per
share lower than the then-current exercise price per share of the cancelled
Option.

5. Restricted Stock

      a. Grants. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to (i) delivery to the Company by the
Participant of cash or other lawful consideration in an amount at least equal to
the par value of the shares purchased, and (ii) the right of the Company to
repurchase all or part of such shares at their issue price or other stated or
formula price from the Participant in the event that conditions specified by the
Board in the applicable Award are not satisfied prior to the end of the
applicable restriction period or periods established by the Board for such Award
(each, a "Restricted Stock Award").

      b. Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award. Any stock certificates issued in
respect of a Restricted Stock Award shall be registered in the name of the
Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). After the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or, if the Participant has died, to the
beneficiary designated by a Participant, in a manner determined by the Board, to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death (the "Designated Beneficiary"). In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.

6. Other Stock-Based Awards

      The Board shall have the right to grant other Awards based upon the Common
Stock or the trading price thereof and having such terms and conditions as the
Board may determine, including, without limitation, the grant of shares based
upon certain conditions, the grant of securities convertible into Common Stock
and the grant of stock appreciation rights, phantom stock awards or stock units.

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7. General Provisions Applicable to Awards

      a. Transferability of Awards. Except as the Board may otherwise determine
or provide in an Award, Awards shall not be sold, assigned, transferred, pledged
or otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the life of the Participant, shall be exercisable only
by the Participant. References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.

      b. Documentation. Each Award under the Plan shall be evidenced by a
written instrument in such form as the Board shall determine or as executed by
an officer of the Company pursuant to authority delegated by the Board. Each
Award may contain terms and conditions in addition to those set forth in the
Plan provided that such terms and conditions do not contravene the provisions of
the Plan.

      c. Board Discretion. The terms of each type of Award need not be
identical, and the Board need not treat Participants uniformly.

      d. Termination of Status. The Board shall determine the effect on an Award
of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, or the Participant's legal
representative, conservator, guardian or Designated Beneficiary, may exercise
rights under the Award.

      e. Acquisition of the Company

            (i) Consequences of an Acquisition. Upon the consummation of an
Acquisition, the Board or the board of directors of the surviving or acquiring
entity (as used in this Section 7(e)(i), also the "Board"), shall, as to
outstanding Awards (on the same basis or on different bases as the Board shall
specify), make appropriate provision for the continuation of such Awards by the
Company or the assumption of such Awards by the surviving or acquiring entity
and by substituting on an equitable basis for the shares then subject to such
Awards either (a) the consideration payable with respect to the outstanding
shares of Common Stock in connection with the Acquisition, (b) shares of stock
of the surviving or acquiring corporation or (c) such other securities or other
consideration as the Board deems appropriate, the fair market value of which (as
determined by the Board in its sole discretion) shall not materially differ from
the fair market value of the shares of Common Stock subject to such Awards
immediately preceding the Acquisition. In addition to or in lieu of the
foregoing, with respect to outstanding Options, the Board may, on the same basis
or on different bases as the Board shall specify, upon written notice to the
affected optionees, provide that one or more Options then outstanding must be
exercised, in whole or in part, within a specified number of days of the date of
such notice, at the end of which period such Options shall terminate, or provide
that one or more Options then outstanding, in whole or in part, shall be
terminated in exchange for a cash payment equal to the excess of the fair market
value (as determined by the Board in its sole discretion) for the shares subject
to such Options over the exercise price thereof. Unless otherwise determined by
the Board (on the same basis or on different bases as the Board shall specify),
any repurchase rights or other rights of the Company that relate to an Option or
other Award shall continue to apply to consideration, including cash, that has
been substituted, assumed or amended for an Option or other Award pursuant to
this paragraph. The Company may hold in escrow all or any portion of any such
consideration in order to effectuate any continuing restrictions.

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            (ii) Acquisition Defined. An "Acquisition" shall mean: (x) the sale
of the Company by merger in which the shareholders of the Company in their
capacity as such no longer own a majority of the outstanding equity securities
of the Company (or its successor); or (y) any sale of all or substantially all
of the assets or capital stock of the Company (other than in a spin-off or
similar transaction) or (z) any other acquisition of the business of the
Company, as determined by the Board.

            (iii) Assumption of Options Upon Certain Events. In connection with
a merger or consolidation of an entity with the Company or the acquisition by
the Company of property or stock of an entity, the Board may grant Awards under
the Plan in substitution for stock and stock-based awards issued by such entity
or an affiliate thereof. The substitute Awards shall be granted on such terms
and conditions as the Board considers appropriate in the circumstances.

      f. Withholding. Each Participant shall pay to the Company, or make
provisions satisfactory to the Company for payment of, any taxes required by law
to be withheld in connection with Awards to such Participant no later than the
date of the event creating the tax liability. The Board may allow Participants
to satisfy such tax obligations in whole or in part by transferring shares of
Common Stock, including shares retained from the Award creating the tax
obligation, valued at their fair market value (as determined by the Board or as
determined pursuant to the applicable option agreement). The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to a Participant.

      g. Amendment of Awards. The Board may amend, modify or terminate any
outstanding Award including, but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.

      h. Conditions on Delivery of Stock. The Company will not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.

      i. Acceleration. The Board may at any time provide that any Options shall
become immediately exercisable in full or in part, that any Restricted Stock
Awards shall be free of some or all restrictions, or that any other stock-based
Awards may become exercisable in full or in part or free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be, despite the fact that the foregoing actions may (i) cause the
application of Sections 280G and 4999 of the Code if a change in control of the
Company occurs, or (ii) disqualify all or part of the Option as an Incentive
Stock Option. In the event of the acceleration of the exercisability of one or
more outstanding Options, including pursuant to paragraph (e)(i), the Board may
provide, as a condition of full exercisability of any or all such Options, that
the Common Stock or other substituted consideration, including cash, as to which
exercisability has been accelerated shall be restricted and subject to
forfeiture back to the Company at the option of the Company at the cost thereof
upon termination of employment or other relationship, with the timing and other
terms of the vesting of such restricted stock or other consideration being
equivalent to the timing and other terms of the superseded exercise schedule of
the related Option.

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8. Miscellaneous

      a. Definitions.

            (i) "Company" for purposes of eligibility under the Plan, shall
include any present or future subsidiary corporations of Coates International
Ltd., as defined in Section 424(f) of the Code (a "Subsidiary"), and any present
or future parent corporation of Coates International Ltd., as defined in Section
424(e) of the Code. For purposes of Awards other than Incentive Stock Options,
the term "Company" shall include any other business venture in which the Company
has a direct or indirect significant interest, as determined by the Board in its
sole discretion.

            (ii) "Code" means the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder.

            (iii) "employee" for purposes of eligibility under the Plan (but not
for purposes of Section 4(b)) shall include a person to whom an offer of
employment has been extended by the Company.

      b. No Right To Employment or Other Status. No person shall have any claim
or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan.

      c. No Rights As Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder thereof.

      d. Effect on Other Benefit Plans. The amount of any compensation deemed to
be received by a Participant as a result of the receipt or exercise of an Award
will not constitute "earnings" with respect to which any other benefits of such
Participant are determined, including without limitation benefits under any
pension, profit sharing, life insurance or salary continuation plan.

      e. Authorization of Sub-Plans. The Board may from time to time establish
one or more sub-plans under the Plan for purposes of satisfying applicable blue
sky, securities or tax laws of various jurisdictions. The Board shall establish
such sub-plans by adopting supplements to this Plan containing (i) such
limitations on the Board's discretion under the Plan as the Board deems
necessary or desirable or (ii) such additional terms and conditions not
otherwise inconsistent with the Plan as the Board shall deem necessary or
desirable. All supplements adopted by the Board shall be deemed to be part of
the Plan, but each supplement shall apply only to Participants within the
affected jurisdiction and the Company shall not be required to provide copies of
any supplement to Participants in any jurisdiction which is not the subject of
such supplement.

      f. Provisions for Foreign Participants. The Board may modify Awards
granted to Participants who are foreign nationals or employed outside the United
States or establish sub-plans or procedures under the Plan to recognize
differences in laws, rules, regulations or customs of such foreign jurisdictions
with respect to tax, securities, currency, employee benefit or other matters.

      g. Effective Date and Term of Plan. The Plan shall become effective on the
date on which it is adopted by the Board. No Awards shall be granted under the
Plan after the completion of ten years from the date on which the Plan was
adopted by the Board, but Awards previously granted may extend beyond that date.

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      h. Amendment of Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time.

      i. Governing Law. The provisions of the Plan and all Awards made hereunder
shall be governed by and interpreted in accordance with the laws of Delaware,
without regard to any applicable conflicts of law.

                                        Adopted by the Board of Directors on
                                        ---------------

                                        Approved by the stockholders on
                                        ---------------


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                            COATES INTERNATIONAL LTD.

                         FORM OF STOCK OPTION AGREEMENT
                                      UNDER
                      2006 STOCK OPTION AND INCENTIVE PLAN

                       [INCENTIVE] STOCK OPTION AGREEMENT

      Coates International Ltd. (the "Company") hereby grants the following
stock option pursuant to its 2006 Stock Option and Incentive Plan. The terms and
conditions attached hereto are also a part hereof.

-------------------------------------------------- -----------------------------
Name of optionee (the "Optionee"):
-------------------------------------------------- -----------------------------
Date of this option grant:
-------------------------------------------------- -----------------------------
Number of shares of the Company's Common Stock
subject to this option ("Shares"):
-------------------------------------------------- -----------------------------
Option exercise price per share:
-------------------------------------------------- -----------------------------
Number, if any, of Shares that may be purchased on
or after the grant date:
-------------------------------------------------- -----------------------------
Shares that are subject to vesting schedule:
-------------------------------------------------- -----------------------------
Vesting Start Date:
-------------------------------------------------- -----------------------------

Vesting Schedule:

-------------------------------------------------- -----------------------------
                                                   ___________ shares
-------------------------------------------------- -----------------------------
                                                   an additional _______ shares
-------------------------------------------------- -----------------------------
                                                   an additional _______ shares
-------------------------------------------------- -----------------------------
                                                   all remaining Shares
-------------------------------------------------- -----------------------------
All vesting is dependent on the continuation of a Business Relationship
with the Company, as provided herein.
--------------------------------------------------------------------------------
Payment alternatives (specify any or all of Section 7(a)(i) though (iv):
--------------------------------------------------------------------------------

      This option satisfies in full all commitments that the Company has to the
Optionee with respect to the issuance of stock, stock options or other equity
securities.

================================================================================


                                        Coates International Ltd.
------------------------------------
Signature of Optionee                   By:____________________________
____________________________________          Name of Officer:
Street Address                                Title:
------------------------------------
City/State/Zip Code


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                       [INCENTIVE] STOCK OPTION AGREEMENT

      1. Grant Under Plan. This option is granted pursuant to and is governed by
the Company's 2006 Stock Option and Incentive Plan (the "Plan") and, unless the
context otherwise requires, terms used herein shall have the same meaning as in
the Plan.

      2. Grant as Incentive Stock Option [Non-Qualified Stock Option]. This
option is intended to qualify as an [This option is a non-statutory stock option
and is not intended to qualify as an] incentive stock option under Section 422
of the Internal Revenue Code of 1986, as amended, and the regulations thereunder
(the "Code").

      3. Vesting of Option.

            (a) Vesting if Business Relationship Continues. The Optionee may
      exercise this option on or after the date of this option grant for the
      number of shares of Common Stock, if any, set forth on the cover page
      hereof. If the Optionee has continuously maintained a Business
      Relationship (as defined below) with the Company through the dates listed
      on the vesting schedule set forth on the cover page hereof, the Optionee
      may exercise this option for the additional number of shares of Common
      Stock set opposite the applicable vesting date. Notwithstanding the
      foregoing, the Board may, in its discretion, accelerate the date that any
      installment of this option becomes exercisable. The foregoing rights are
      cumulative and may be exercised only before the date which is [ten] years
      from the date of this option grant.

            (b) Accelerated Vesting Due to Acquisition. In the event an
      Acquisition that is not a Private Transaction occurs while the Optionee
      maintains a Business Relationship with the Company and this option has not
      fully vested, this option shall become exercisable for [?] of the then
      number of Shares as to which it has not vested, such vesting to occur
      immediately prior to the closing of the Acquisition, with vesting to
      continue after the closing at [?] the rate/number set forth on the cover
      page as to the remainder of the Shares subject to vesting and on the same
      vesting dates, provided that the Optionee continuously maintains a
      Business Relationship with the Company or its successor through the
      applicable vesting dates. [If the Optionee after the Acquisition
      terminates his or her Business Relationship for good reason (as defined
      below) or the Company or the acquiror terminates the Business Relationship
      without Cause (as defined below), then immediately upon such termination
      date this option shall become exercisable as to all remaining Shares, and
      this option shall expire (may no longer be exercised) after the passage of
      [[?] months] from the date of termination, but in no event later than the
      scheduled expiration date.] [alternative: but this option may be exercised
      (to the extent otherwise exercisable on the date of termination) until its
      scheduled expiration date.]

            (c) Definitions. The following definitions shall apply: [As needed,
      depending on vesting scheme employed and whether the Plan contains any of
      these definitions]

                  "Acquisition" means (i) the sale of the Company by merger in
            which the shareholders of the Company in their capacity as such no
            longer own a majority of the outstanding equity securities of the
            Company (or its successor); or (ii) any sale of all or substantially
            all of the assets or capital stock of the Company (other than in a
            spin-off or similar transaction) or (iii) any other acquisition of
            the business of the Company, as determined by the Board.

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                  "Business Relationship" means service to the Company or its
            successor in the capacity of an employee, officer, director or
            consultant.

                  "Cause" means: (i) gross negligence or willful malfeasance in
            the performance of the Optionee's work or a breach of fiduciary duty
            or confidentiality obligations to the Company by the Optionee; (ii)
            failure to follow the proper directions of the Optionee's direct or
            indirect supervisor after written notice of such failure; (iii) the
            commission by the Optionee of illegal conduct relating to the
            Company; (iv) disregard by the Optionee of the material rules or
            material policies of the Company which has not been cured within 15
            days after notice thereof from the Company; or (v) intentional acts
            on the part of the Optionee that have generated material adverse
            publicity toward or about the Company.

                  "Good Reason" means, with respect to an Optionee who is an
            employee: (i) the failure of the Company to pay any wages due to the
            Optionee within five days after written notice thereof from the
            Optionee or (ii) a reduction in the Optionee's salary from that on
            the date of this agreement, other than as part of a salary reduction
            program among multiple employees [or (iii) a demotion of the
            Optionee to a non-executive position with the Company]. "Good
            Reason" means, with respect to an Optionee who is not an employee, a
            breach by the Company of the terms of its relationship with the
            Optionee that continues for five days after notice.

                  "Private Transaction" means any Acquisition where the
            consideration received or retained by the holders of the then
            outstanding capital stock of the Company does not consist of (i)
            cash or cash equivalent consideration, (ii) securities which are
            registered under the Securities Act and/or (iii) securities for
            which the Company or any other issuer thereof has agreed, including
            pursuant to a demand, to file a registration statement within ninety
            (90) days of completion of the transaction for resale to the public
            pursuant to the Securities Act.

4. Termination of Business Relationship.

            (a) Termination. If the Optionee's Business Relationship with the
      Company ceases, voluntarily or involuntarily, with or without cause, no
      further installments of this option shall become exercisable, [and this
      option shall expire (may no longer be exercised) after the passage of [[?]
      months] from the date of termination, but in no event later than the
      scheduled expiration date.] [alternative: but this option may be exercised
      (to the extent otherwise exercisable on the date of termination) until its
      scheduled expiration date.] Any determination under this agreement as to
      the status of a Business Relationship or other matters referred to above
      shall be made in good faith by the Board of Directors of the Company.

            (b) Employment Status. For purposes hereof, with respect to
      employees of the Company, employment shall not be considered as having
      terminated during any leave of absence if such leave of absence has been
      approved in writing by the Company and if such written approval
      contractually obligates the Company to continue the employment of the
      Optionee after the approved period of absence; in the event of such an
      approved leave of absence, vesting of this option shall be suspended (and
      the period of the leave of absence shall be added to all vesting dates)
      unless otherwise provided in the Company's written approval of the leave
      of absence.. For purposes hereof, a termination of employment followed by
      another Business Relationship shall be deemed a termination of the
      Business Relationship with all vesting to cease unless the Company enters
      into a written agreement related to such other Business Relationship in
      which it is specifically stated that there is no termination of the
      Business Relationship under this agreement. This option shall not be
      affected by any change of employment within or among the Company and its
      Subsidiaries so long as the Optionee continuously remains an employee of
      the Company or any Subsidiary.

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<PAGE>

            [(c) Termination for Cause. If the Business Relationship of the
      Optionee is terminated for Cause (as defined above), this option may no
      longer be exercised from and after the Optionee's receipt of written
      notice of such termination. In such event, the Repurchase Option described
      in Section 6 shall also be applicable.]

5. Death; Disability.

            (a) Death. Upon the death of the Optionee while the Optionee is
      maintaining a Business Relationship with the Company, this option may be
      exercised, to the extent otherwise exercisable on the date of the
      Optionee's death, by the Optionee's estate, personal representative or
      beneficiary to whom this option has been transferred pursuant to Section
      10, only at any time within [[?] days] after the date of death, but not
      later than the scheduled expiration date.

            (b) Disability. If the Optionee ceases to maintain a Business
      Relationship with the Company by reason of his or her disability, this
      option may be exercised, to the extent otherwise exercisable on the date
      of cessation of the Business Relationship, only at any time within [[?]
      days] after such cessation of the Business Relationship, but not later
      than the scheduled expiration date. For purposes hereof, "disability"
      means "permanent and total disability" as defined in Section 22(e)(3) of
      the Code.

6. Partial Exercise. This option may be exercised in part at any time and from
time to time within the above limits, except that this option may not be
exercised for a fraction of a share.

[Note: The following are the payment options that must be specified on the cover
page. Payment alternatives may be eliminated in Section 7(a).]

7. Payment of Exercise Price.

            (a) Payment Options. The exercise price shall be paid by one or any
      combination of the following forms of payment that are applicable to this
      option, as indicated on the cover page hereof:

            (i)   by check payable to the order of the Company; or

            (ii)  delivery of an irrevocable and unconditional undertaking,
                  satisfactory in form and substance to the Company, by a
                  creditworthy broker to deliver promptly to the Company
                  sufficient funds to pay the exercise price, or delivery by the
                  Optionee to the Company of a copy of irrevocable and
                  unconditional instructions, satisfactory in form and substance
                  to the Company, to a creditworthy broker to deliver promptly
                  to the Company cash or a check sufficient to pay the exercise
                  price; or

            (iii) subject to Section 7(b) below, if the Common Stock is then
                  traded on a national securities exchange or on the Nasdaq
                  National Market (or successor trading system), by delivery of
                  shares of Common Stock having a fair market value equal as of
                  the date of exercise to the option price; or

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<PAGE>

            (iv)  by check payable to the order of the Company for the par value
                  of the shares being purchased plus delivery of the Optionee's
                  [[?]]-year personal full recourse promissory note for the
                  balance of the exercise price, with such note bearing interest
                  payable not less than annually at the applicable Federal rate,
                  as defined in Section 1274(d) of the Code.

            In the case of (iii) above, fair market value as of the date of
      exercise shall be determined as of the last business day for which such
      prices or quotes are available prior to the date of exercise and shall
      mean (i) the last reported sale price (on that date) of the Common Stock
      on the principal national securities exchange on which the Common Stock is
      traded, if the Common Stock is then traded on a national securities
      exchange; or (ii) the last reported sale price (on that date) of the
      Common Stock on the Nasdaq National Market (or successor trading system),
      if the Common Stock is not then traded on a national securities exchange.

            (b) Limitations on Payment by Delivery of Common Stock. If Section
      7(a)(iii) is applicable, and if the Optionee delivers Common Stock held by
      the Optionee ("Old Stock") to the Company in full or partial payment of
      the exercise price and the Old Stock so delivered is subject to
      restrictions or limitations imposed by agreement between the Optionee and
      the Company, an equivalent number of Shares shall be subject to all
      restrictions and limitations applicable to the Old Stock to the extent
      that the Optionee paid for the Shares by delivery of Old Stock, in
      addition to any restrictions or limitations imposed by this agreement.
      Notwithstanding the foregoing, the Optionee may not pay any part of the
      exercise price hereof by transferring Common Stock to the Company unless
      such Common Stock has been owned by the Optionee free of any substantial
      risk of forfeiture for at least six months.

      8. Securities Laws Restrictions on Resale. Until registered under the
Securities Act of 1933, as amended, or any successor statute (the "Securities
Act"), the Shares will be illiquid and will be deemed to be "restricted
securities" for purposes of the Securities Act. Accordingly, such shares must be
sold in compliance with the registration requirements of the Securities Act or
an exemption therefrom and may need to be held indefinitely. Unless the Shares
have been registered under the Securities Act, each certificate evidencing any
of the Shares shall bear a restrictive legend specified by the Company.

      9. Method of Exercising Option. Subject to the terms and conditions of
this agreement, this option may be exercised by written notice to the Company at
its principal executive office, or to such transfer agent as the Company shall
designate. Such notice shall state the election to exercise this option and the
number of Shares for which it is being exercised and shall be signed by the
person or persons so exercising this option. Such notice shall be accompanied by
payment of the full purchase price of such shares, and the Company shall deliver
a certificate or certificates representing such shares as soon as practicable
after the notice shall be received. Such certificate or certificates shall be
registered in the name of the person or persons so exercising this option (or,
if this option shall be exercised by the Optionee and if the Optionee shall so
request in the notice exercising this option, shall be registered in the name of
the Optionee and another person jointly, with right of survivorship). In the
event this option shall be exercised, pursuant to Section 5 hereof, by any
person or persons other than the Optionee, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise this
option.

      10. Option Not Transferable. This option is not transferable or assignable
except by will or by the laws of descent and distribution. During the Optionee's
lifetime only the Optionee can exercise this option.

      11. No Obligation to Exercise Option. The grant and acceptance of this
option imposes no obligation on the Optionee to exercise it.

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<PAGE>

      12. No Obligation to Continue Business Relationship. Neither the Plan,
this agreement, nor the grant of this option imposes any obligation on the
Company to continue the Optionee in employment or other Business Relationship.

      13. Adjustments. Except as is expressly provided in the Plan with respect
to certain changes in the capitalization of the Company, no adjustment shall be
made for dividends or similar rights for which the record date is prior to such
date of exercise.

      14. Withholding Taxes. If the Company in its discretion determines that it
is obligated to withhold any tax in connection with the exercise of this option,
or in connection with the transfer of, or the lapse of restrictions on, any
Common Stock or other property acquired pursuant to this option, the Optionee
hereby agrees that the Company may withhold from the Optionee's wages or other
remuneration the appropriate amount of tax. At the discretion of the Company,
the amount required to be withheld may be withheld in cash from such wages or
other remuneration or in kind from the Common Stock or other property otherwise
deliverable to the Optionee on exercise of this option. The Optionee further
agrees that, if the Company does not withhold an amount from the Optionee's
wages or other remuneration sufficient to satisfy the withholding obligation of
the Company, the Optionee will make reimbursement on demand, in cash, for the
amount underwithheld.

      15. Early Disposition. The Optionee agrees to notify the Company in
writing immediately after the Optionee transfers any Shares, if such transfer
occurs on or before the later of (a) the date that is two years after the date
of this agreement or (b) the date that is one year after the date on which the
Optionee acquired such Shares. The Optionee also agrees to provide the Company
with any information concerning any such transfer required by the Company for
tax purposes. [Note: The foregoing is for ISOs only.]

      16. Lock-up Agreement. The Optionee agrees that in the event that the
Company effects an initial underwritten public offering of Common Stock
registered under the Securities Act, the Shares may not be sold, offered for
sale or otherwise disposed of, directly or indirectly, without the prior written
consent of the managing underwriter(s) of the offering, for such period of time
after the execution of an underwriting agreement in connection with such
offering that all of the Company's then directors and executive officers agree
to be similarly bound.

      17. Arbitration. Any dispute, controversy, or claim arising out of, in
connection with, or relating to the performance of this agreement or its
termination shall be settled by arbitration in Boston, Massachusetts, pursuant
to the rules then obtaining of the American Arbitration Association. Any award
shall be final, binding and conclusive upon the parties and a judgment rendered
thereon may be entered in any court having jurisdiction thereof.

      18. Provision of Documentation to Optionee. By signing this agreement the
Optionee acknowledges receipt of a copy of this agreement and a copy of the
Plan.

      19. Miscellaneous.

            (a) Notices. All notices hereunder shall be in writing and shall be
      deemed given when sent by mail, if to the Optionee, to the address set
      forth below or at the address shown on the records of the Company, and if
      to the Company, to the Company's principal executive offices, attention of
      the Corporate Secretary.

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<PAGE>

            (b) Entire Agreement; Modification. This agreement constitutes the
      entire agreement between the parties relative to the subject matter
      hereof, and supersedes all proposals, written or oral, and all other
      communications between the parties relating to the subject matter of this
      agreement. This agreement may be modified, amended or rescinded only by a
      written agreement executed by both parties.

            (c) Fractional Shares. If this option becomes exercisable for a
      fraction of a share because of the adjustment provisions contained in the
      Plan, such fraction shall be rounded down.

            (d) Issuances of Securities; Changes in Capital Structure. Except as
      expressly provided herein or in the Plan, no issuance by the Company of
      shares of stock of any class, or securities convertible into shares of
      stock of any class, shall affect, and no adjustment by reason thereof
      shall be made with respect to, the number or price of shares subject to
      this option. No adjustments need be made for dividends paid in cash or in
      property other than securities of the Company. If there shall be any
      change in the Common Stock of the Company through merger, consolidation,
      reorganization, recapitalization, stock dividend, stock split, combination
      or exchange of shares, spin-off, split-up or other similar change in
      capitalization or event, the restrictions contained in this agreement
      shall apply with equal force to additional and/or substitute securities,
      if any, received by the Optionee in exchange for, or by virtue of his or
      her ownership of, Shares, except as otherwise determined by the Board.

            (e) Severability. The invalidity, illegality or unenforceability of
      any provision of this agreement shall in no way affect the validity,
      legality or enforceability of any other provision.

            (f) Successors and Assigns. This agreement shall be binding upon and
      inure to the benefit of the parties hereto and their respective successors
      and assigns, subject to the limitations set forth in Section 10 hereof.

            (g) Governing Law. This agreement shall be governed by and
      interpreted in accordance with the laws of the State of Delaware, without
      giving effect to the principles of the conflicts of laws thereof.


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