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                      U.S. Resident (Non-employee Director)

                               i-STAT CORPORATION

                             STOCK OPTION AGREEMENT
                                  NON-STATUTORY


     1. Grant of Option. i-STAT Corporation, a Delaware corporation (the
"Company"), hereby grants to ______________ (the "Director"), an option (the
"Option"), pursuant to the Company's 1998 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 be exercisable over a three
year period with respect to the following percentages of the number of Shares
originally underlying such option (i) 50% after the first anniversary of the
date of grant ("Date of Grant") set forth on the signature page hereof; and (ii)
an additional 25% after each of the second and third anniversaries of the Date
of Grant. The periods of time following the Director'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.

     (c) Exercise Procedure. Subject to the conditions set forth in this
Agreement, the Option shall be exercised by the Director'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 Director
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.



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     (d) Continuous Service Required. Except as otherwise provided in this
Section 2, the Option may not be exercised unless the Director, at the time he
or she exercises the Option, is, and has been at all times since the Date of
Grant of the Option, a director of one or more of the Company, a Parent
Corporation or a Subsidiary (as such terms are defined in the Plan).

     (e) Termination of Service. If the Director ceases to serve as a director
of the Company, a Parent Corporation or Subsidiary for any reason other than
death or disability or removal, 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).

     (f) Exercise Period Upon Death or Disability. If the Director dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended) prior the Expiration Date, while he or she is a
director of the Company, a Parent Corporation or a Subsidiary, or if the
Director dies within three months after the Director ceases to be a director of
any of the foregoing entities (other than as the result of removal as specified
in subsections (g) below), the Option shall be exercisable, within the period of
one year following the date of death or disability of the Director (but in no
event after the Expiration Date), by the Director, the Director'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 "Director", as used in this
Agreement, shall be deemed to include the estate of the Director, or any person
who acquires the right to exercise the Option by bequest or inheritance or
otherwise by reason of the death of the Director.

     (g) Removal. If the Director, prior to the Expiration Date, ceases to serve
as a director with the Company, a Parent Corporation or a Subsidiary because he
or she is removed from office, the right to exercise the Option shall terminate
immediately upon such cessation of service as a director.

     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 (i) cash or a check to the order of the Company, (ii) Common Stock or
(iii) options to purchase Common Stock, in each case in an amount equal to the
aggregate Exercise Price of such Shares. For purposes of the preceding sentence,
(x) Common Stock shall be valued at its fair market value as determined by (a)
the Company's Board of Directors, if each member is a "disinterested member," as
defined in the Plan or (b) the recommendation's of a committee of two or more
directors each of whom is disinterested, and (y) options to purchase Common
Stock shall be valued at the excess of the fair


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market value of the shares subject to the options, as determined by (a) the
Company's Board of Directors, if each member is a "disinterested member," as
defined in the Plan, or (b) the recommendations of a committee of two or more
directors, each of whom is disinterested, over the exercise price of such
options.

     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 Director, 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 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 or as otherwise agreed to by the Board of Directors or a committee
thereof, 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. Rights as a Shareholder. The Director 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 Director. 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 Section 7 or 8 of this
Agreement.

     7. 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 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



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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 if, in the opinion of counsel to the Company, stockholder approval
thereof is required to be obtained in order to preserve for optionees under the
Plan the benefits available pursuant to Rule 16b-3 under the Securities Exchange
Act of 1934, as amended, or any similar or successor rule thereto.

     8. 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 Director 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 Director, provide that
the Option must be exercised within a specified number of days of the date of
such notice or it will be terminated. In any such case, the Board of Directors
may, in its discretion, accelerate the exercise dates of the Option; provided,
however, that paragraph (b) below shall govern acceleration of the Option with
respect to the events described in clauses (i), (ii) and (iii) of such
paragraph.

     (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 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



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(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 , regardless of the date of grant,
shall immediately become exercisable with respect to 100% of the Common Stock
subject to the Option.

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

     10. Acknowledgement and Legend.

     (a) The Director acknowledges and agrees that (i) because of his position
with the Company, the Director 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 Director 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 Director remains an
affiliate of the Company, all stock certificates representing Shares issued to
the Director upon exercise of the Option shall have affixed thereto a 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 Director shall be deemed
to have reaffirmed, as of the date of such payment, the representations made in
this Section 10.



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     11. 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 Director, 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
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

                                            By:
-----------------------                         ---------------------------
                                                 Name:
                                                 Title:

                                                 104 Windsor Center Drive
                                                 East Windsor, New Jersey 08520



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                              DIRECTOR'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 1998 Stock Option Plan.


                                    DIRECTOR

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







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                              DIRECTOR'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 1998 Stock Option Plan.


                                    DIRECTOR


                                    -----------------------
                                    Stephen D. Chubb




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