<PAGE>

                             STOCK OPTION AGREEMENT


                  THIS STOCK OPTION AGREEMENT (this "Agreement") is entered
into, effective as of October 15, 1996, by and between American Film
Technologies, Inc., a Delaware corporation (the "Company"), and Sheldon Jacobs
(the "Holder").


                                 R E C I T A L S

                  WHEREAS, Holder has rendered valuable consulting
services to the Company;

                  WHEREAS, the Company wishes to retain Holder's services
as a consultant;

                  WHEREAS, as consideration for Holder's ongoing consulting
services on behalf of the Company, the Company has agreed to grant the stock
option provided for herein to the Holder; and

                  NOW, THEREFORE, the Company and the Holder covenant and agree
as follows:


                  1. Grant of the Option. For good and valuable consideration,
the receipt of which is hereby acknowledged, the Company hereby grants to the
Holder a stock option (the "Option") to acquire from the Company, from time to
time on the terms and conditions set forth herein, all or any portion of an
aggregate of One-Hundred Thousand (100,000) shares of the Company's $.002 par
value common stock (the "Common Stock"), at the price of $.62 per share (the
"Exercise Price"). Each of the number of shares of Common Stock into which the
Common Stock is exercisable and the Exercise Price is subject to adjustment as
provided in Section 4 hereof.

                  2. Term of the Option. The Option will commence on the date
hereof and will terminate on October 15, 2001 (the "Effective Date").

                  3. Vesting; Exercise. Subject to the provisions of Section 8
below, the Holder's right to exercise all or any portion of the Option and
receive the shares of Common Stock represented thereby shall become immediately
exercisable upon the Effective Date.

                  4. Adjustments Upon Changes in Capitalization or Other
Significant Events. In the event of any increase or decrease in the number of
the issued shares of Common Stock by reason of a stock dividend, stock split,
reverse stock split or consolidation or combination of shares and the like at
any time or from time to time throughout the term of the Option such that

                                       -1-

<PAGE>



the holders of outstanding Common Stock shall have had an adjustment made,
without payment therefor, in the number of shares of Common Stock owned by them
or shall have become entitled or required to have had an adjustment made in the
number of shares of Common Stock owned by them, without payment therefor, there
shall be a corresponding adjustment as to the number of shares of Common Stock
into which the Option is exercisable and to the Exercise Price, with the result
that the Holder's proportionate share of Common Stock shall be maintained as
before the occurrence of such event without change in the aggregate exercise
price applicable in the event the Holder elected to exercise the Option in full
(except for any change in the aggregate exercise price resulting from
rounding-off of share quantities or prices).

                  5. Exercise of the Option. To exercise all or any portion of
the Option, the Holder must do the following:

                           (a) deliver to the Company a written notice, in the
form of Exhibit "A" attached hereto and made a part hereof, specifying the
number of shares of Common Stock for which the Option is being exercised;

                           (b) surrender the Agreement to the Company upon
complete exercise of the Option;

                           (c) tender payment, either in cash or by cashiers or
certified check of the aggregate exercise price for the shares of Common Stock
for which the Option is being exercised;

                           (d) pay, or make arrangements satisfactory to the
Board for payment to the Company of, all federal, state and local taxes, if any,
required to be withheld by the Company in connec tion with the exercise of the
Option or the relevant portion thereof; and

                           (e) execute and deliver to the Company any other
documents required from time to time by the Company in order to promote
compliance with the Securities Act of 1933, as amended (the "1933 Act"),
applicable state securities laws, or any other applicable law, rule or
regulation.

                  6. Delivery of Share Certificate. As soon as practicable after
the Option or any portion thereof has been duly exercised, the Company will
deliver to the Holder a certificate for the shares of Common Stock for which the
Option was exer cised. Unless the Option has expired or been exercised in full,
the Company and the Holder agree that the Company may affix to this Agreement an
appropriate notation indicating the number of shares for which the Option was
exercised and return this Agreement to the Holder. If any law or regulation of
the Securities and Exchange Commission (the "SEC") or of any other federal or
state governmental body having jurisdiction shall require the Company or the
Holder to take any action prior to

                                       -2-

<PAGE>



issuance to the Holder of the shares of Common Stock specified in the written
notice of exercise, or if any listing agreement between the Company and any
national securities exchange requires such shares to be listed prior to
issuance, the date for the delivery of such shares shall be adjourned until the
completion of such action and/or such listing.

                  7. Fractional Shares. In no event shall the Company be
required to issue fractional shares upon the exercise of any portion of the
Option.

                  8. Nontransferability. The Option is not transferable other
than (a) by operation of law, (b) to one or more trusts of which the Holder is a
trustor, or (c) by will or the laws of descent and distribution. The Option may
be exercised during the lifetime of the Holder only by the Holder or his or her
court-appointed legal representative.

                  9. Warranties and Representations of the Holder. By executing
this Agreement, the Holder accepts the Option and represents and warrants to the
Company and covenants and agrees with the Company as follows:

                           (a) THE SECURITIES OFFERED BY THIS INSTRUMENT HAVE
NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAWS OF ANY STATE, AND ANY SALE OF SUCH SECURITIES IS SUBJECT
TO COMPLIANCE WITH, OR THE AVAILABILITY OF EXEMPTIONS FROM COMPLIANCE WITH, THE
REGISTRATION AND QUALIFICATION REQUIREMENTS OF SUCH ACT AND ANY APPLICABLE STATE
SECURITIES LAWS. THIS AGREEMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION TO
ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION MAY NOT LAWFULLY
BE MADE. TRANSFER OF THIS AGREEMENT AND THE SECURITIES OFFERED HEREBY IS
RESTRICTED AS PROVIDED IN SECTIONS 9 AND 11 HEREOF.

                           (b) The Holder acknowledges that no registration
statement under the 1933 Act or under any state securities law has been filed
and that the Company has no obligation to file such a registration statement in
the future with respect to the Option or any shares of Common Stock that may be
acquired upon exercise of the Option or any portion thereof.

                           (c) The Holder warrants and represents that the
Option and any shares of Common Stock acquired upon exercise of the Option or
any portion thereof will be acquired and held by the Holder for the Holder's own
account, for investment purposes only, and not with a view towards the
distribution or public offering thereof or with any present intention of
reselling or distributing the same at any particular future time.

                           (d) The Holder agrees not to sell, transfer or
otherwise voluntarily dispose of any shares of Common Stock that may be acquired
upon exercise of the Option or any portion thereof unless (i) there is an
effective registration statement

                                       -3-

<PAGE>



under the 1933 Act covering the proposed disposition and compliance with
governing state securities laws, (ii) the Holder delivers to the Company, at the
Holder's expense, a "no-action" letter or similar interpretative opinion,
satisfactory in form and substance to the Company, from the staff of each
appropriate securities agency, to the effect that such shares may be disposed of
by the Holder in the manner proposed, or (iii) the Holder delivers to the
Company, an opinion of counsel reasonably satisfactory to the Company, to the
effect that the proposed disposition is exempt from registration under the 1933
Act and governing state securities laws.

                           (e) The Holder acknowledges and consents to the
appearance of a restrictive legend, in substantially the follow ing form:

                        NOTICE: RESTRICTIONS ON TRANSFER

                           THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
                  REGISTERED UNDER UNITED STATES FEDERAL OR STATE SECURITIES
                  LAWS, INCLUDING BUT NOT LIMITED TO THE SECURITIES ACT OF 1933,
                  AS AMENDED (THE "ACT") NOR APPROVED BY ANY FEDERAL OR STATE
                  REGULATORY AGENCY, INCLUDING BUT NOT LIMITED TO THE SECURITIES
                  AND EXCHANGE COMMISSION, AND MAY NOT BE OFFERED FOR SALE, SOLD
                  OR OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE, DIRECTLY OR
                  INDIRECTLY, NOR MAY THE SECURITIES BE TRANSFERRED ON THE BOOKS
                  OF THE CORPORATION, WITHOUT REGISTRATION OF SUCH SECURITIES
                  UNDER ALL APPLICABLE UNITED STATES FEDERAL OR STATE SECURITIES
                  LAWS, INCLUDING BUT NOT LIMITED TO THE ACT, OR COMPLIANCE WITH
                  AN APPLICABLE EXEMPTION THEREFROM, SUCH COMPLIANCE, AT THE
                  DISCRETION OF THE CORPORATION, TO BE EVIDENCED BY AN OPINION
                  OF SHAREHOLDER'S COUNSEL, IN FORM ACCEPTABLE TO THE
                  CORPORATION THAT NO VIOLATION OF SUCH REGISTRATION OR
                  QUALIFICATION PROVISIONS WOULD RESULT FROM ANY PROPOSED
                  TRANSFER OR ASSIGNMENT. ANY OFFER OR DISPOSITION OF THESE
                  SECURITIES WITHOUT SATISFACTION OF SAID CONDITIONS WILL BE
                  WRONGFUL AND WILL NOT ENTITLE THE TRANSFEREE TO REGISTER THE
                  OWNERSHIP OF THE SECURITIES WITH THE CORPORATION.

                           (f) The Holder agrees not to sell, transfer or
otherwise dispose of the Option, except as specifically permitted by this
Agreement and any applicable securities laws.

                  10. Warranties and Representations of the Company.

                           (a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.

                           (b) The grant of the Option to the Holder has been
duly authorized by all requisite corporate action on the

                                       -4-

<PAGE>



part of the Company and the shares of Common Stock represented by the Option
have been properly reserved for issuance.

                           (c) The number of shares of Common Stock represented
by the Option (when coupled with all shares currently outstanding and all shares
to be issued upon the exercise of all other currently outstanding options
granted by the Company) does not exceed the number of shares of Common Stock
currently authorized for issuance by the Company's Certificate of Incorporation
(the "Certificate").

                           (d) No consents, approvals or permits are required to
be obtained from any third person, including, without limitation, any securities
commission, before the grant of the Option, nor do any conditions precedent
exist (other than those specifically identified herein) that would impair the
Company's ability to grant the Option hereunder.

                           (e) No consents, approvals, nor permits are required
to be obtained from any third person, other those which may be required under
applicable securities laws, before the issuance of Common Stock upon the
exercise of all or any portion of the Option.

                  11. Procedures Upon Permitted Transfer. Before any sale,
transfer or other disposition of any of the shares of Common Stock acquired upon
exercise of the Option, the Holder agrees to give written notice to the Company
of his or her intention to effect such disposition. The notice must describe the
circumstances of the proposed transfer in reasonable detail and must specify the
manner in which the requirements of Section 9(d) above will be satisfied in
connection with the proposed disposition. After (a) legal counsel to the Company
has determined in good faith that the requirements of Section 9(d) above will be
satisfied and (b) the Holder has executed such documentation as may be necessary
to effect the proposed disposition, the Company will, as soon as practicable,
transfer such shares in accordance with the terms of the notice. Any stock
certificate issued upon such transfer will bear a restrictive legend, in the
form set forth in Section 9(e) of this Agreement, unless in the opinion of the
Company's legal counsel such legend is not required. Compliance with the
foregoing procedures is in addition to compliance with any separate requirements
applicable to the Holder under the Certificate or otherwise.

                  12. Rights as Stockholder. The Option, in and of itself, does
not create rights in the Holder as a stockholder of the Company; provided that
upon any such exercise of the Option or any portion thereof that complies with
the requirements of this Agreement, the Holder shall immediately be vested with
all the rights afforded to other stockholders of the Company, regardless of when
the Company actually delivers certificates representing Common Stock to the
Holder.

                                       -5-

<PAGE>



                  13. Further Assurances. The Holder and the Company agree, from
time to time, to execute such additional documents as the other party hereto may
reasonably require to effectuate the purposes of this Agreement.

                  14. Binding Effect. This Agreement shall be binding upon the
Holder, the Company, the Holder's heirs, successors and assigns, and any
corporation or other entity that succeeds to the rights and liabilities of the
Company.

                  15. Cost of Litigation. In any action at law or in equity or
any arbitration to enforce any of the provisions or rights under this Agreement,
the unsuccessful party to such litigation, as determined by the court or
arbitrator in a final judgment or decree, shall pay the successful party or
parties all costs, expenses and reasonable attorneys' fees incurred by the
successful party or parties (including without limitation costs, expenses and
fees on any appeals), and if the successful party recovers judgment in any such
action or proceeding, such costs, expenses and attorneys' fees shall be included
as part of the judgment.

                  16. Entire Agreement; Modifications. This Agreement
constitutes the entire agreement and understanding between the Company and the
Holder regarding the subject matter hereof. No modification of the Option or
this Agreement, or waiver of any provision of this Agreement, shall be valid
unless in writing and duly executed by the Company and the Holder. The failure
of any party to enforce any of that party's rights against the other party for
breach of any of the terms of this Agreement shall not be construed as a waiver
of such rights as to any continued or subsequent breach.

                  17. Governing Law. This Agreement shall be governed by and
interpreted under the law of the State of California applicable to agreements
wholly negotiated, executed and to be performed in that state.

                  18. Notices. Any notices that either party to this Agreement
is required or may desire to give to the other shall be given by sending the
same to the other at the address below, or at such other address as may be
designated in writing by any party in a notice to the other given in the manner
prescribed in this Section 18. All such notices shall be in writing and
delivered by telex, facsimile, personal delivery or if sent by mail, certified
or registered mail, return receipt requested deposited so addressed, postage
prepaid. If sent by mail notices shall be deemed delivered five (5) business
days after deposit in the mail. The addresses to which any such notices shall be
given are the following:

                                       -6-

<PAGE>



                  To Holder:

                           Sheldon Jacobs
                           Managing Director
                           Media Creations
                           207 E 74th St., Suite 3A
                           New York, New York  10021
                           Facsimile No. (212) 472-5844

                  With copy to:

                           ------------------------------

                           ------------------------------

                           ------------------------------

                           ------------------------------

                  To the Company:

                           Gerald M. Wetzler
                           c/o American Film Technologies, Inc.
                           300 Park Avenue, 17th Floor
                           New York, New York  10022
                           Facsimile No. (212) 572-6460

                  With copy to:

                           Barry L. Burten, Esq.
                           Jeffer, Mangels, Butler & Marmaro LLP
                           2121 Avenue of the Stars, 10th Floor
                           Los Angeles, California 90067

                  19. Severability. Whenever possible, each provision of this
Agreement shall be interpreted so as to be effective and valid under applicable
law. If any provision of this Agreement is prohibited or deemed invalid under
any applicable law, however, such provision shall be ineffective only to the
extent of such prohibition or invalidity, and neither the remainder of such
provision nor this Agreement shall be invalidated as a result.

                  20. Counterparts. This Agreement may be executed by the
parties in one or more counterparts, all of which taken together shall
constitute one instrument.

                  21. Jurisdiction. The parties hereto agree to submit to the
exclusive jurisdiction of the Superior Court of the State of California, County
of Los Angeles, any controversy, claim or dispute arising out of or relating to
this Agreement or the method and manner of performance thereof or the breach
thereof.

                                       -7-

<PAGE>



                  IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.


"Company"                            American Film Technologies, Inc.



                                     By:__________________________
                                           Gerald M. Wetzler
                                     Its:  Chief Executive Officer



"Holder"                             _____________________________
                                     Sheldon Jacobs



                                       -8-

<PAGE>


                                    EXHIBIT A

                           Form of Exercise of Option





To:      American Film Technologies, Inc.
         300 Park Avenue, 17th Floor
         New York, New York  10022
         Facsimile No. (212) 572-6460


                  The undersigned holds an option (the "Option") represented by
a Stock Option Agreement (the "Agreement") effective as of June 30, 1995. The
undersigned hereby exercises [the Option] [a portion of the Option] and elects
to purchase ____________ shares of Common Stock (as defined in the Agreement) of
American Film Technologies, Inc. pursuant to the Option. This notice is
accompanied by full payment of the Exercise Price for the shares pursuant to
Section 5(c) of the Agreement.

                  The undersigned acknowledges that no registration statement
under the Securities Act of 1933, as amended, or under any state securities law
has been filed and that the Company has no obligation to file such a
registration statement in the future with respect to the Shares. The undersigned
warrants and represents that the undersigned is acquiring and will hold the
shares for the undersigned's own account, for investment purposes only, and not
with a view towards the distribution or public offering of the shares or with
any present intention of reselling or distributing the shares at any particular
future time. The undersigned consents to the appearance of a restrictive legend,
in the form required by Section 10(e) of the Agreement, on the certificate for
the shares. The undersigned agrees not to sell, transfer or otherwise dispose of
the shares except as specifically permitted by the Agreement or any applicable
securities law expressly permitting such a disposition.


                  Date:  ______________ __, ____.



                                         ____________________________________