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                                                       U.S. RESIDENT (AFFILIATE)

                               i-STAT CORPORATION

                      NON-STATUTORY STOCK OPTION AGREEMENT


                      1.       Grant of Option.  i-STAT Corporation, a
Delaware corporation (the "Company"), hereby grants to ___________ (the
"Associate"), an option (the "Option"), pursuant to the Company's 1985 Stock
Option Plan (the "Plan"), to purchase up to an aggregate of _______ shares (the
"Shares") of Common Stock, U.S. $.15 par value ("Common Stock"), of the Company
at a price of U.S. $_____ per Share (the "Exercise Price"), purchasable as set
forth in and subject to the terms and conditions of this Agreement and the Plan.

                      2.       Exercise of Option and Provisions for
Termination.

                      (a)      Exercisability of Option.  The Option shall
become exercisable based on the number of years that have expired since the date
of grant (the "Date of Grant") set forth on the signature page hereof, in
accordance with the following schedule:

<TABLE>
<CAPTION>
                                                          Percentage of
        Number of Years                            Option Shares Available for
       That Have Expired                              Purchase (Cumulative)
       -----------------                           -----------------------------

<S>                                                         <C>
       Less than One                                          0%
       One but fewer than Two                                20%
       Two but fewer than Three                              40%
       Three but fewer than Four                             60%
       Four but fewer than Five                              80%
       Five or more                                         100%
</TABLE>

                      The periods of time following the Associate's
cessation of service, death or disability, during which the Option remains
exercisable as provided in subsections (e) and (f) below, shall not be included
for purposes of determining the exercisability of the Option under this
subsection (a).

                      (b)      Expiration Date.  Except as otherwise
provided in this Agreement, the Option may not be exercised after the date
(hereinafter the "Expiration Date") that is the tenth anniversary of the Date of
Grant or, if the
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Associate is a "10% Shareholder" as described in Section 11 of the Plan, the
fifth anniversary of the Date of Grant.

                      (c)      Exercise Procedure.  Subject to the
conditions set forth in this Agreement, the Option shall be exercised by the
Associate's delivery of written notice of exercise to the chief financial
officer of the Company, specifying the number of Shares to be purchased and the
aggregate Exercise Price to be paid therefor and accompanied by payment in full
in accordance with Section 3. Such exercise shall be effective upon receipt by
the chief financial officer of the Company of such written notice together with
the required payment. The Associate may purchase less than the total number of
Shares covered hereby, provided that no partial exercise of the Option may be
for any fractional Share or for less than ten whole Shares.

                      (d)      Continuous Employment Required.  Except as
otherwise provided in this Section 2, the Option may not be exercised unless the
Associate, at the time he or she exercises the Option, is, and has been at all
times since the Date of Grant of the Option, an employee of one or more of the
Company, a Parent Corporation or a Subsidiary (as such terms are defined in the
Plan). For all purposes of this Agreement, (i) "employment" shall be defined in
accordance with the provisions of Section 1.421-7(h) of the Income Tax
Regulations or any successor regulations, and (ii) if the Option shall be
assumed or a new option substituted therefor in a transaction to which Section 
425(a) of the Code applies, employment by such assuming or substituting
corporation (hereinafter called the "Successor Corporation") or by a Parent
Corporation or a Subsidiary thereof (as defined in the Plan, respectively, but
with the Successor Corporation substituted for the Company in such definitions)
shall be considered for all purposes of this Agreement to be employment by the
Company, a Parent Corporation or a Subsidiary, as the case may be.

                      (e)      Termination of Employment.  If the Associate
ceases to be employed by the Company, a Parent Corporation or Subsidiary for any
reason other than death or disability or a discharge for "cause", as provided in
subsection (g) below, the right to exercise the Option shall terminate three
months after such cessation (but in no event after the Expiration Date).


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                      (f)      Exercise Period Upon Death or Disability.  If
the Associate dies or becomes disabled (within the meaning of Section 22(e)(3)
of the Code) prior to the Expiration Date, while he or she is an employee of the
Company, a Parent Corporation or a Subsidiary, or if the Associate dies within
three months after the Associate ceases to be an employee of any of the
foregoing entities (other than as the result of a discharge for "cause" as
specified in subsection (g) below), the Option shall be exercisable, within the
period of one year following the date of death or disability of the Associate
(but in no event after the Expiration Date), by the Associate, the Associate's
legal representative (in the event of legal incapacity) or by the person to whom
the Option is transferred by will or the laws of descent and distribution.
Except as otherwise indicated by the context, the term "Associate", as used in
this Agreement, shall be deemed to include the estate of the Associate, or any
person who acquires the right to exercise the Option by bequest or inheritance
or otherwise by reason of the death of the Associate.

                      (g)      Discharge for Cause.  If the Associate, prior
to the Expiration Date, ceases his or her employment with the Company, a Parent
Corporation or a Subsidiary because he or she is discharged for "cause" (as
defined below), the right to exercise the Option shall terminate immediately
upon such cessation of employment. "Cause" shall mean willful misconduct in
connection with the Associate's employment or willful failure to perform his or
her employment responsibilities in the best interests of his or her employer, as
determined by the Company, which determination shall be conclusive.

                      3.       Payment of Exercise Price.  Payment of the
aggregate Exercise Price for Shares purchased upon exercise of the Option shall
be made by delivery to the Company of cash or a check to the order of the
Company.

                      4.       Delivery of Shares.  The Company shall, upon
payment of the aggregate Exercise Price for the number of Shares purchased and
paid for, make prompt delivery of such Shares to the Associate, provided that if
any law or regulation requires the Company to take any action with respect to
such Shares before the issuance thereof, then the date of delivery of such
Shares shall be extended for the period necessary to complete such action. No
Shares shall be issued and delivered upon exercise of the Option unless and
until, in the opinion of counsel for the Company, any applicable registration
requirements of the Securities Act

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of 1933, as amended (the "Securities Act"), any applicable listing requirements
of any national securities exchange on which stock of the same class is then
listed, and any other requirements of law or of any regulatory bodies having
jurisdiction over such issuance and delivery, shall have been fully complied
with.

                      5.       Non-transferability of Option.  Except as
provided in subsection (f) of Section 2, the Option is personal and no rights
granted hereunder may be transferred, assigned, pledged or hypothecated in any
way (whether by operation of law or otherwise) nor shall any such rights be
subject to execution, attachment or similar process. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of the Option or of
such rights contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon the Option or such rights, the Option and
such rights shall, at the election of the Company, become null and void.

                      6.       No Special Employment Rights.  Nothing
contained in the Plan or this Agreement shall be construed or deemed by any
person under any circumstances to bind the Company or any Parent Corporation or
Subsidiary to continue the employment of the Associate for the period within
which the Option may be exercised. Moreover, during the period of the
Associate's employment, the Associate shall render diligently and faithfully the
services which are assigned to the Associate from time to time by the Board of
Directors or by the executive officers of the Company or any Parent Corporation
or Subsidiary and shall at no time take any action which directly or indirectly
would be inconsistent with the best interests of the foregoing entities.

                      7.       Rights as a Shareholder.  The Associate shall
have no rights as a Shareholder with respect to any Shares which may be
purchased by exercise of the Option unless and until a certificate representing
such Shares is duly issued and delivered to the Associate. No adjustment shall
be made for dividends or other rights for which the record date is prior to the
date such stock certificate is issued except as provided for in Sections 8 or 9
of this Agreement.

                      8.       Recapitalization.  In the event that the
outstanding shares of Common Stock of the Company are changed into or exchanged
for a different number or kind of shares or other securities of the Company by
reason of any recapitalization, reclassification, stock split, stock dividend,
combination or subdivision, appropriate adjustment

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shall be made in the number and kind of Shares to which the Option shall be
exercisable. Such adjustment to the Option shall be made without change in the
total price applicable to the unexercised portion of the Option, and a
corresponding adjustment in the Exercise Price per Share shall be made. No such
adjustment shall be made which would, within the meaning of any applicable
provisions of the Code, constitute a modification, extension or renewal of the
Option or a grant of additional benefits to the Associate.

                      9.       Reorganization or Change in Control of the
Company.

                      (a)      Reorganization.  In case (i) the Company is
merged or consolidated with another corporation and the Company is not the
surviving corporation, (ii) all or substantially all of the assets or more than
50% of the outstanding voting stock of the Company is acquired by any other
corporation or (iii) of a reorganization or liquidation of the Company prior to
the Expiration Date, the Board of Directors of the Company, or the board of
directors of any corporation assuming the obligations of the Company, shall, as
to the Option, either (x) make appropriate provision for the protection of the
Option by the substitution on an equitable basis of appropriate stock of the
Company, or of the merged, consolidated or otherwise reorganized corporation
which will be issuable in respect of the shares of Common Stock of the Company,
provided that no additional benefits shall be conferred upon the Associate as a
result of such substitution, and the excess of the aggregate fair market value
of the Shares subject to the Option immediately after such substitution over the
purchase price thereof is not more than the excess of the aggregate fair market
value of the Shares subject to the Option immediately before such substitution
over the purchase price thereof, or (y) upon written notice to the Associate,
provide that the Option must be exercised within a specified number of days of
the date of such notice or they will be terminated. In any such case, the Board
of Directors may, in its discretion, accelerate the exercise dates of the
Option.

                      (b)      Change in Control.  In case, prior to the
Expiration Date, of (i) any consolidation or merger involving the Company, if
the shareholders of the Company immediately before such merger or consolidation
do not own, directly or indirectly, immediately following such merger or
consolidation, more than fifty percent (50%) of the combined

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voting power of the outstanding voting securities of the corporation resulting
from such merger or consolidation in substantially the same proportion as their
ownership of the shares of Common Stock immediately before such merger or
consolidation; (ii) any sale, lease, license, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the business and/or assets of the Company or assets representing over 50% of
the operating revenue of the Company; or (iii) any person (as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) who is not, on April 21, 1995, a controlling person (as
defined in Rule 405 under the Securities Act of 1933, as amended) (a
"Controlling Person") of the Company shall become (x) the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of over 50% of the
Company's outstanding Common Stock or the combined voting power of the Company's
then outstanding voting securities entitled to vote generally or (y) a
Controlling Person of the Company, the Option shall immediately become
exercisable with respect to 100% of the Common Stock subject to the Option.

                      10.      Withholding Taxes.  The Company's obligation
to deliver Shares upon the exercise of the Option shall be subject to the
Associate's satisfaction of all applicable federal, state and local income and
employment tax withholding requirements.

                      11.      Acknowledgement and Legend.

                               (a)      The Associate acknowledges and agrees
that (i) because of her/his position with the Company, the Associate may be
deemed to be an "affiliate" thereof (as such term is defined in Rule 144
promulgated under the Securities Act); (ii) the resale by an affiliate of the
Company of the Shares acquired upon any exercise of the Option is restricted by
law, notwithstanding any registration of the Shares on Form S-8 (or similar
successor form) promulgated under the Securities Act; (iii) any resale of the
Shares by an affiliate of the Company pursuant to said Rule 144 would be subject
to the volume limitations contained in paragraph (e) thereof; and (iv) the
Associate will not sell such Shares in violation of Rule 144(e) or any other
rule or regulation under the Securities Act.

                      (b)      Legend on Stock Certificates.  So long as the
Associate remains an affiliate of the Company, all stock certificates
representing Shares issued to the Associate upon exercise of the Option shall
have affixed thereto a

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legend substantially in the following form, in addition to any other legends
required by applicable state law:

                    "The Shares of stock represented by this
                    certificate are subject to the volume
                    limitations of Rule 144(e) promulgated
                    under the Securities Act of 1933, as
                    amended."

                      By making payment upon exercise of the Option, the
Associate shall be deemed to have reaffirmed, as of the date of such payment,
the representations made in this Section 11.

                      12.      Miscellaneous.

                      (a)  This Agreement and any instruments delivered
pursuant to this Agreement shall be construed, interpreted and governed in
accordance with the laws of the State of New Jersey, without regard to the
conflicts of law rules thereof.

                      (b)  This Agreement shall extend to, be binding
upon and inure to the benefit of the Associate, his legal representatives, his
heirs, successors and assigns (subject, however, to the limitations set forth
herein with respect to the assignment of the Option or rights herein) and upon
the Company, its successors and assigns regardless of any change in the business
structure of the Company, be it through spinoff, merger, sale of stock, sale of
assets or any other transaction and shall be construed in a manner that is
consistent with the provisions of the Plan.

                      (c)  This Agreement contains the entire agreement
of the parties with respect to the subject matter hereof. No waiver,
modification or change of any provision of this Agreement shall be valid unless
in writing and signed by both parties.

                      (d)  The waiver of any breach of any duty, term or
condition of this Agreement shall not be deemed to constitute a waiver of any
preceding or succeeding breach of the same or any other duty, term or condition
of this Agreement.

                      (e)      All notices pursuant to this Agreement shall
be in writing and shall be sent by prepaid certified mail, return receipt
requested, addressed to the parties hereto at the addresses set forth beneath
their names below or to such

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other addresses as may hereafter be specified by like notice in writing by
either of the parties and shall be deemed given three days after mailing in
accordance with the foregoing.

                      (f)      This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which shall
together constitute one and the same Agreement.

Date of Grant:                              i-STAT CORPORATION


____________________, 19__                  By:_________________________________

                                            Title:______________________________

                                            Address: 303 College Road East
                                                     Princeton, New Jersey 08540


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                             ASSOCIATE'S ACCEPTANCE

                      The undersigned hereby accepts the foregoing
Agreement and agrees to the terms and conditions thereof. The undersigned hereby
acknowledges receipt of a copy of the Company's 1985 Stock Option Plan.

                                                ASSOCIATE

                                                ________________________________

                                                Address:  ______________________

                                                          ______________________

                                                          ______________________



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