Document:

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT ("Agreement") is made and
entered into as of August 19, 2000, by and between INTERNATIONAL
BUSINESS COMPANY, a California Corporation and its shareholders
DENNIS B. GINTHER, CLIFFORD J. ROEBUCK, JADWIGA L. GINTHER, and
BOGUMILA E. BASU, all individuals ( collectively "Sellers"), and
INTERNET BUSINESS'S INTERNATIONAL, INC., a Nevada Corporation
("Buyer")

                                  RECITALS

A.  The shareholder sellers own 100 percent of the outstanding
shares of INTERNATIONAL BUSINESS COMPANY.

B.  Sellers desire to sell and transfer to Buyer and Buyer
desires to purchase and acquire from Seller, all the shares of
Sellers, both the outstanding and treasury shares (the "shares")
upon the terms and subject to the conditions set forth in this
Agreement.

                             TERMS AND CONDITIONS

NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

1.  Purchase and Sale.  Sellers hereby sell, assign, transfer
and deliver to Buyer, and Buyer hereby purchases and acquires from
Sellers, the Shares upon the terms and subject to the conditions
set forth in this agreement.

2.  (a)  Purchase Price; Payment Terms.  The purchase price
for  all the shares is that Buyer shall issue 2,000,000 shares of
IBUI restricted Rule 144 stock, at close of escrow.  These shares
shall be restricted as follows:  one-half of the shares of IBUI
(1,000,000) shall be released at the end of twelve (12) months and,
the other half (1,000,000) shall be released at the end of twenty-
four (24) months.

(b)  It is expressly agreed that the number of shares
set forth in this Agreement is based on the fact that IBUI is
currently trading on the OTCBB. If the number of outstanding IBUI
shares is subject to reverse stock split or reverse merger or
otherwise reduced in proportion to the company's value then the
number of shares being actually transferred herein shall be
proportionately reduced as well.

The shares of IBUI stock shall be issued by Buyers to Sellers in
the following amounts:

Dennis B. Ginther........... 1,259,060 shares
Clifford J. Roebuck........... 540,940 shares
Jadwiga L. Ginther............ 100,000 shares
Bogumila E. Basu.............. 100,000 shares

(d)  Warranty on Revenue.  Seller warrants that a
minimum of $800,000 in revenue each fiscal year, will be produced
by Seller during the first and second years following the date of
acquisition and the following shall apply:

(i)  If the revenue goal is met (plus or minus
$100,000), then the shares shall be released per paragraph 2(a)
above;

(ii)  If the revenue goal is not met for the first
and second years, then the shares to be released will be reduced
proportionally, but not below 70% of the original number of shares
issued; and,

(iii)  If the revenue goal is exceeded for the
first and second years, then the shares to be released will be
increased proportionally, but not to exceed 30% of the original
number of shares issued.

(e)  Buyer will provide marketing capital for IBC, in an
amount not to exceed $160,000.  Buyer will also provide marketing
for IBC through its telemarketing company, through its keyword
contract with Microsoft and its IBM marketing partners in Europe.
It is recognized that Buyer will also provide operational capital
for IBC until such time as revenues generated by IBC are sufficient
to cover on-going expenses, which are projected to be $25,300 per
month commencing July 1, 2000, separate and apart from marketing
expenditures.

3.  Representations and Warranties of Sellers.  Sellers hereby
represent and warrant to Buyer as follows:

3.1  Authority.  Sellers have the right, power and authority
to enter into this Agreement and to perform all obligations
required to be performed by it hereunder.  Sellers have the full
power to transfer the shares to Buyer without obtaining the consent
or approval of any other person or governmental authority.

3.2  Title to Shares.  Sellers are the owners, beneficially
and of record, of all the shares free and clear of all liens,
encumbrances, security agreements, equities, options, claims,
charges, and restrictions.

3.3  Organization.  Seller corporation is a corporation duly
organized, validly existing, and in good standing under the laws of
the State of California and has all necessary corporate powers to
own its properties and operate its business as now owned and
operated by it.  Exhibit "A" contains the Articles of
Incorporation, Bylaws, Minutes and Stock Book of the corporation.

3.4  Authorization.  This Agreement and all other agreements
and documents executed and delivered by Sellers constitute valid
and legally binding obligations of Sellers enforceable in
accordance with their respective terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of
debtors and subject to availability of equitable remedies.

3.5  Capitalization.  The authorized capital stock of Seller
corporation consists of shares of Common Stock, of which 100% of
said shares are either issued to the individuals listed in 2(c)
above, and outstanding or held in the corporation's treasury.  All
of the outstanding shares are validly issued, and paid, and
nonassessable, and such shares have been so issued in full
compliance with all federal and state securities laws.  There are
no outstanding subscriptions, options, rights, warrants,
convertible securities, or other agreement or commitments
obligating Seller corporation to issue or to transfer from treasury
any additional shares of its capital stock of any class.

3.6  Financials.  Exhibit "B," to this Agreement contains the
federal tax returns for Seller corporation for the years 1998 and
1999.  There are no outstanding taxes owed.  Exhibit "C," to this
Agreement sets forth the balance sheets of Seller corporation as of
December 31, 1998 and December 31, 1999, and the statements of
income and retained earnings for the two (2) years ending on those
dates. The financial statements attached hereto as Exhibit "C,"
have been prepared in accordance with generally accepted accounting
principles consistently followed by Seller corporation throughout
all periods indicated, and fairly present the financial position of
Seller corporation on the respective dates of the balance sheets
included in the financial statements, and the result of its
operations for the respective periods indicated.  Exhibit "D"
contains the financial projections for Seller corporation for the
years 2000 and 2001. Since December 31, 1999, there has not been
any change in the financial condition or operations of Seller
corporation or its business, assets, properties or prospects,
except as set forth on Exhibit "E," which is attached hereto and
incorporated herein by this reference and lists all of the debts
and liabilities of Seller corporation.

3.7  Absence of Undisclosed Liabilities.  Seller corporation
does not have any debt, liability or obligation of any nature,
whether accrued, absolute, contingent or otherwise, and whether due
or to become due, that is not reflected or reserved against in the
balance sheet, except as set forth on Exhibit "E,".

3.8  Tax Returns.  Within the times and in the manner
prescribed by law, Seller corporation has filed all federal, state
and local tax returns required by law and has paid all taxes,
assessments and penalties due and payable.  The provisions for
taxes reflected in the balance sheet are adequate for federal,
state, county and local taxes for the period ended December 31,
1999, and for all prior periods, whether disputed or undisputed.
There are no present disputes about taxes of any nature payable by
Seller corporation.

3.9  Personal Property.  The books and records of Seller
corporation contain a complete and accurate description and specify
the location of all equipment, furniture, supplies and all other
tangible personal property owned by, in the possession of, or used
by Seller corporation in connection with its business.  No personal
property is held under any lease, security agreement, conditional
sales contract or other title retention or security arrangement, or
is located other than in the possession and under the control of
Seller corporation.  The tangible personal property reflected in
those books and records constitutes all such tangible personal
property necessary for the conduct by Seller corporation of its
business as now conducted.  All of the tangible personal property
of Seller corporation is in good operating condition and repair,
reasonable wear and tear excepted.

3.10  Title.  Seller corporation has good and marketable title
to all of its assets and interest in assets, whether real,
personal, mixed, tangible or intangible, which constitute all of
the assets and interests in assets that are used in the business of
Seller corporation. All of these assets are free and clear of
restrictions on or conditions to transfer or assignment and are
free and clear of mortgages, liens, pledges, charges, encumbrances,
equities and claims of third parties, except for (a) those
disclosed on Exhibit "E," and (b) the lien for current taxes not
yet due and payable.  Exhibit "f," to this Agreement is a schedule
of all personal assets owned by Seller which are in the possession
of the Company.

3.11  Accounts Receivable.  All accounts receivable of Seller
corporation shown on the balance sheets, and all accounts
receivable of Seller corporation created after December 31, 1999,
arose from valid sales in the ordinary course of business.  These
amounts have been collected in full since that date as reflected in
the books and records of Seller corporation, or are collectible at
their full amounts and are not subject to valid defenses, setoffs
or counterclaims.  Seller corporation agrees that as of July 1,
2000, all receivables shall be the property of Buyer.  Exhibit "G,"
contains accounts receivable.

3.12  Accounts Payable.  Exhibit "H," to this Agreement is a
complete and accurate list, with an accurate aging, of all trade
and other accounts, notes and contract payables of Seller
corporation as of the date hereof, all of which arose in the
ordinary course of business and are usual and normal in amount.

3.13  Contracts.  Except as otherwise disclosed in and of the
exhibits to this Agreement, Seller corporation is not a party to,
nor is its properties or assets bound by, any contract, agreement,
understanding (whether written or verbal) of any nature whatsoever.
There is no default or event that, with notice, lapse of time, or
both, would constitute a default by any party to any agreement to
which Seller corporation is a party or by which it or its
properties or assets are bound.

3.14  Employees and Employee Benefit Plans.  Exhibit "I" to
this Agreement is a correct and complete list of all full-time and
part-time employees of Seller corporation, together with their
addresses, social security numbers and all current and promised
salary, wage and bonus information.  All of the employees of Seller
corporation are at-will employees and may be terminated by Seller
corporation at any time without liability and without any
obligation to pay any severance of similar benefit.  There are no
employment contracts, collective bargaining agreement, pension,
bonus, profit-sharing, stock option or other agreement or
arrangement providing for employee remuneration or benefits to
which Seller corporation is a party or by which it is bound.
Seller corporation has delivered to Buyer a copy of its most
current employee manual and description of all company policies and
practices, including no discrimination, overtime, vacation, holiday
and sick leave, if any.  Seller corporation's relationship with all
of its employees is good.  All unused vacation, holiday and sick
leave, and any other paid time off, for all of the employees has
been properly and accurately recorded in the books and records of
Seller corporation and are reflected on Exhibit "E," attached
hereto.  All records of Seller corporation for each of its
employees are complete and accurate.

3.15  Litigation.  There is no pending, or to Seller
corporation's knowledge, threatened suit, action, arbitration or
legal, administrative or other proceeding, or governmental
investigation against or affecting Seller corporation or its
business, assets or financial condition.  Seller corporation is not
presently engaged in any legal action to recover money due to it or
damages sustained by it.

3.16  Compliance with Laws. Seller corporation has not
received notice of any violation of any applicable federal, state
or local statute, law or regulation of any kind or nature
whatsoever, including, without limitation, any applicable building,
zoning, environmental protection, health and safety, handicap
access, or other law, ordinance or regulation, affecting its
properties or the operation of its business and there are no such
violations. Seller corporation has all proper and valid licenses,
permits and other governmental authorities necessary to conduct its
business as now being conducted.

3.17  Agreement will not Cause a Breach or Violation.  The
consummation of the transactions contemplated by this Agreement
will not result in nor constitute any of the following:  (a)  a
breach of any term or provision of the Agreement (b)  a default or
an event that, with notice, lapse of time, or both, would be a
default, breach, or violation of the Articles of Incorporation or
Bylaws of Seller corporation or any lease, license, promissory
note, conditional sales contract, commitment, indenture, mortgage,
deed of trust, or other agreement, instrument, or arrangement to
which it is bound, (c) an event that would permit any party to
terminate any agreement or to accelerate the maturity of any
indebtedness or other obligation of Seller corporation; or (d) the
creation or imposition of any lien, charge, or encumbrance on any
of the properties of Seller corporation.

3.18  Corporate Records.  All corporate records are in the
possession of Seller corporation and are complete and accurate in
all material respects.  The minute book of Seller corporation
contains complete, accurate and current copies of the Articles of
Incorporation, Bylaws and all amendments thereto, and all records
required to be set forth of all proceedings, consents actions and
meetings of the shareholders and board of directors of Seller
corporation.

3.19  Persons with Authority.  Exhibit "J," to this Agreement
contains a complete and accurate list of (a) all bank accounts of
Seller corporation and all other accounts at any financial
institutions, including the names and addresses thereof and the
account numbers,  and the signatory or signatories thereon; (b) the
names and addresses of all persons holding a power of attorney on
behalf of Seller corporation; all safe deposit boxes and the names
of all persons authorized to have access thereto; and (d) the names
and addresses of all persons and entities which have guaranteed any
debts or obligation of Seller corporation or with respect to whom
Seller corporation has guaranteed any debts or obligation.

3.20  Full Disclosure.  None of the warranties made by Seller
corporation will contain any untrue statement of a material fact,
or omit to state any material fact necessary to make the statements
made true and accurate in all material respects.

4.  Buyer hereby represents and warrants to Seller as follows:

4.1  Authority.  Buyer has the right, power and authority to
enter into this Agreement and to perform all obligations required
to be performed by it hereunder.

4.2  Authorization.  This Agreement and all other agreements
and documents executed and delivered by Buyer constitute valid and
legally binding obligations of Buyer enforceable in accordance with
their respective terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and
subject to availability of equitable remedies.

5.  Resignation of Officers and Directors.  Concurrently with
the execution of this Agreement, Seller corporation shall obtain
and deliver to Buyer resignations from all its directors and
officers, together with general releases by such persons of all
claims that they may have, or claim to have against IBC.

6.  Employment.  Concurrently with the execution of this
Agreement, Buyer will offer mutually acceptable employment
agreements to Mr. Dennis B. Ginther and Mr. Clifford J. Roebuck for
a period not less than two years.

7.  Survival of All Warranties and Representations.  All
representations, warranties, covenants and agreements of the
parties contained in this Agreement will survive the closing.

8.  Indemnification by Dennis B. Ginther.  Dennis B. Ginther,
individually, hereby agrees to indemnify, defend, protect and hold
Buyer, and/or its assigns, and IBC, harmless against and in respect
of all claims, demands, losses, costs, expenses, obligations,
liabilities, damages, recoveries and deficiencies, including
interest, penalties and reasonable attorneys' fees that IBC or
Buyer may incur or suffer, which arise, result from or relate to
any breach or failure by Dennis B. Ginther or Seller corporation to
perform any of the representations, warranties, covenants or
agreement in this Agreement.  Dennis B. Ginther further agrees to
indemnify and hold Buyer and/or its assigns harmless from all
liabilities not disclosed to Buyer and accepted by Buyer, and
specifically, Buyer will not be responsible for any back taxes owed
by Dennis B. Ginther or Seller corporation to any taxing authority,
federal or state.

9.  Attorneys' Fees and Costs.  Each party shall be solely
responsible for the costs and fees of its own attorneys in
connection with the negotiation of this Agreement.  If any suit,
legal proceeding, arbitration or other action is brought for the
enforcement of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party
shall be entitled to recover its reasonable attorneys' fees and
other costs incurred in such proceeding or action, in addition to
any other relief to which it may be entitled.

10.  Governing Law.  This Agreement will be construed in
accordance with, and governed by, the laws of the state of
California as applied to contracts that are executed and performed
entirely in California.

11.  Disputes; Arbitration over Price.  Any dispute arising
between the parties, their agents or employees, shall be submitted
to arbitration before JAMS/ENDISPUTE of Orange County, California.

12.  Successors and Assigns.  This Agreement shall be binding
upon and insure to the benefit of the parties hereto and there
respective successors and assigns.

13.  Counterpart and Facsimile Transmission.  This Agreement
may be executed in two or more counterparts, each of which shall be
deemed an original, and all of which when taken together shall
constitute one and the same document.  The signature of any party
to any counterpart shall be deemed a signature to, and may be
appended to, any other counterpart.  Any party may deliver its
signed counterpart of this Agreement to the other party by
facsimile transmission, and such delivery shall be deemed made and
completed upon receipt of such facsimile transmission by the other
party.  Any party delivering a signed counterpart by facsimile
transmission agrees to promptly send the counterpart bearing its
original signature to the other party; provided that a delay or
failure to do so shall not negate the effectiveness of the delivery
made by the facsimile transmission.

14.  Entire Agreement.  This Agreement contains the entire
understanding between the parties hereto with respect to the
subject matter hereof and supersedes any and all prior or
contemporaneous written or oral negotiations or agreements between
them regarding the subject matter hereof.  No addition,
modification or amendment of or to any term or provision of this
Agreement, or to this Agreement as a whole, shall be effective
unless set forth in writing and signed by all the parties hereto.

15.  No Interpretation Against Draftsman.  Both parties have
had an equal role in the preparation of this Agreement, such that
there shall be no interpretation or construction of terms against
the draftsman.

16.  Attorneys.  Sellers acknowledge that Buyer is represented
by counsel, David R. Flyer, of the Law Offices of  DAVID R. FLYER,
A PROFESSIONAL LAW CORPORATION.  Seller has not relied on any
statements or representations of Buyer's counsel.  Sellers have had
an opportunity to retain their own attorneys.

17.  Broker's Fees.  Each side shall pay its own broker's and
accountant's fees, if any.

WHEREFORE,  THE PARTIES AGREE:

                                        SELLER:

                                        INTERNATIONAL BUSINESS COMPANY

                                        By: /s/  Dennis B. Ginther
                                        Dennis B. Ginther, CEO

                                       /s/  Dennis B. Ginther
                                       Dennis B. Ginther
                                       Shareholder

                                       /s/  Clifford J. Roebuck
                                       Clifford J. Roebuck
                                       Shareholder

                                      /s/  Jadwiga L. Ginther
                                      Jadwiga L. Ginther
                                      Shareholder

                                     /s/  Bogumila E. Basu
                                     Bogumila E. Basu
                                     Shareholder

                                     BUYER:

                                     INTERNET BUSINESS'S INTERNATIONAL,INC.

                                    /s/  Al Reda
                                    Al Reda, CEOEXHIBIT 10.1
                      PHAGE THERAPEUTICS INTERNATIONAL INC.

                                 2000 STOCK PLAN

1.  Purposes  of the Plan.  The  purposes  of this Stock Plan are to attract and
retain the best available personnel for positions of substantial responsibility,
to provide additional  incentive to Employees,  Directors and Consultants and to
promote the success of the Company's  business.  Options  granted under the Plan
may be Incentive Stock Options or Non-statutory  Stock Options, as determined by
the  Administrator  at the time of  grant.  Stock  Purchase  Rights  may also be
granted under the Plan.

     2. Definitions.  As used in this Stock Plan, the following definitions will
     apply:

          (a)  "Administrator"  means the Board or any of its Committees as will
               be administering the Plan under Section 4 of the Plan.

         (b)      "Applicable  Laws"  means  the  requirements  relating  to the
                  administration   of  stock  option  plans  under  U.S.   state
                  corporate laws, U.S.  federal and state  securities  laws, the
                  Code,  any stock  exchange  or  quotation  system on which the
                  Common  Stock is listed or quoted and the  applicable  laws of
                  any other  country  or  jurisdiction  where  Options  or Stock
                  Purchase Rights are granted under the Plan.
         (c)      "Board" means the Board of Directors of the Company.
         (d)      "Code" means the Internal Revenue Code of 1986, as amended.
          (e)  "Committee" means a committee of Directors appointed by the Board
               under Section 4 of the Plan.
         (f)      "Common Stock" means the Common Stock of the Company.
          (g)  "Company" means Phage Therapeutics  International Inc., a Florida
               corporation.
          (h)  "Consultant"  means any person  who is engaged by the  Company or
               any  Parent  or  Subsidiary  to  render  consulting  or  advisory
               services to such entity.
          (i)  "Director"  means a  member  of the  Board  of  Directors  of the
               Company.
          (j)  "Disability"  means total and permanent  disability as defined in
               Section 22(e)(3) of the Code.
          (k)  "Employee"  means any person,  including  Officers and Directors,
               employed  by the  Company  or any  Parent  or  Subsidiary  of the
               Company.  A Service  Provider will not cease to be an Employee in
               the case of (i) any leave of absence  approved  by the Company or
               (ii)  transfers  between  locations of the Company or between the
               Company,  its  Parent,  any  Subsidiary,  or any  successor.  For
               purposes of  Incentive  Stock  Options,  no such leave may exceed
               ninety days, unless  re-employment on expiration of such leave is
               guaranteed by statute or contract. If re-employment on expiration
               of a  leave  of  absence  approved  by  the  Company  is  not  so
               guaranteed,  on the 181st day of such leave any  Incentive  Stock
               Option  held by the  Optionee  will  cease  to be  treated  as an
               Incentive  Stock Option and will be treated for tax purposes as a
               Non-statutory  Stock  Option.  Neither  service as a Director nor
               payment of a director's  fee by the Company will be sufficient to
               constitute "employment" by the Company.
          (l)  "Exchange  Act" means the  Securities  Exchange  Act of 1934,  as
               amended.
          (m)  "Fair Market  Value" means,  as of any date,  the value of Common
               Stock determined as follows:

               (i)  If the  Common  Stock is  listed  on any  established  stock
                    exchange  or a national  market  system,  including  without
                    limitation the Nasdaq National Market or The Nasdaq SmallCap
                    Market of The Nasdaq  Stock  Market,  its Fair Market  Value
                    will  be the  closing  sales  price  for the  stock  (or the
                    closing  bid,  if no sales were  reported)  as quoted on the
                    exchange or system for the last market  trading day prior to
                    the time of  determination,  as  reported in The Wall Street
                    Journal or any other source as the  Administrator  considers
                    reliable;
                  (ii)     If  the  Common  Stock  is  regularly   quoted  by  a
                           recognized  securities  dealer but selling prices are
                           not reported,  its Fair Market Value will be the mean
                           between  the high bid and low  asked  prices  for the
                           Common Stock on the last market  trading day prior to
                           the day of determination; or
                  (iii)    In the  absence  of an  established  market  for  the
                           Common   Stock,   the  Fair  Market   Value  will  be
                           determined in good faith by the Administrator.
         (n)      "Incentive  Stock Option" means an Option  intended to qualify
                  as an incentive stock option within the meaning of Section 422
                  of the Code.
          (o)  "Non-statutory  Stock  Option"  means an Option not  intended  to
               qualify as an Incentive Stock Option.
          (p)  "Officer"  means a person who is an officer of the Company within
               the meaning of Section 16 of the  Exchange  Act and the rules and
               regulations promulgated thereunder.
         (q)      "Option" means a stock option granted pursuant to the Plan.
         (r)      "Option  Agreement"  means a written or  electronic  agreement
                  between the Company and an Optionee  evidencing  the terms and
                  conditions of an individual Option grant. The Option Agreement
                  is subject to the terms and conditions of the Plan.
         (s)      "Option Exchange Program" means a program whereby  outstanding
                  Options are exchanged for Options with a lower exercise price.
          (t)  "Optioned Stock" means the Common Stock subject to an Option or a
               Stock Purchase Right.
          (u)  "Optionee"  means the  holder of an  outstanding  Option or Stock
               Purchase Right granted under the Plan.

<PAGE>

          (v)  "Parent" means a "parent  corporation,"  whether now or hereafter
               existing, as defined in Section 424(e) of the Code.
         (w)      "Plan" means this 2000 Stock Plan.
         (x)      "Restricted  Stock"  means  shares  of Common  Stock  acquired
                  pursuant to a grant of a Stock Purchase Right under Section 11
                  below.
         (y)      "Rule  16b-3"  means  Rule  16b-3 of the  Exchange  Act or any
                  successor to Rule 16b-3, as in effect when discretion is being
                  exercised with respect to the Plan.
         (z)      "Section 16(b)" means Section 16(b) of the Exchange Act.
         (aa)     "Service Provider" means an Employee, Director or Consultant.
          (bb) "Share"  means a share of the Common  Stock,  as  adjusted  under
               Section 12 below.
          (cc) "Stock  Purchase  Right"  means a right to purchase  Common Stock
               pursuant to Section 11 below.
          (dd) "Subsidiary"  means a  "subsidiary  corporation,"  whether now or
               hereafter existing, as defined in Section 424(f) of the Code.

3. Stock  Subject to the Plan.  Subject to the  provisions  of Section 12 of the
Plan, the maximum  aggregate  number of Shares that may be subject to option and
sold  under the Plan is  3,000,000  Shares.  The Shares  may be  authorized  but
unissued, or reacquired Common Stock.

If an Option or Stock  Purchase Right expires or becomes  unexercisable  without
having been exercised in full, or is surrendered  pursuant to an Option Exchange
Program,  the  unpurchased  underlying  Shares will become  available for future
grant or sale under the Plan (unless the Plan has terminated).  However,  Shares
that have  actually  been issued under the Plan, on exercise of either an Option
or Stock  Purchase  Right,  will not be returned to the Plan and will not become
available  for  future  distribution  under the Plan,  except  that if Shares of
Restricted  Stock are  repurchased  by the  Company at their  original  purchase
price, the Shares will become available for future grant under the Plan.

4.  Administration of the Plan.

         (a)      Procedure.

          (i)  Multiple  Administrative  Bodies. The Plan may be administered by
               different  Committees with respect to different groups of Service
               Providers.

                  (ii)     Section 162(m).  To the extent that the Administrator
                           determines  it to be  desirable  to  qualify  Options
                           granted      hereunder     as      "performance-based
                           compensation,"  within the meaning of Section  162(m)
                           of the  Code,  the  Plan  will be  administered  by a
                           Committee of two or more "outside  directors," within
                           the meaning of Section 162(m) of the Code.
                  (iii)    Rule  16b-3.  To  the  extent  desirable  to  qualify
                           transactions  hereunder  as exempt  under Rule 16b-3,
                           the  transactions   contemplated  hereunder  will  be
                           structured to satisfy the  requirements for exemption
                           under Rule 16b-3.

          (iv) Other Administration. Other than as provided above, the Plan will
               be  administered  by (A)  the  Board  or (B) a  Committee,  which
               committee will be constituted to satisfy Applicable Laws.

         (b)      Powers of the Administrator.  Subject to the provisions of the
                  Plan and,  in the case of a  Committee,  the  specific  duties
                  delegated  by the Board to the  Committee,  and subject to the
                  approval of any relevant  authorities,  the Administrator will
                  have the  authority in its  discretion:  (i) to determine  the
                  Fair Market  Value;  (ii) to select the Service  Providers  to
                  whom Options and Stock Purchase Rights may from time to time
                           be granted hereunder;
                  (iii) to determine  the number of Shares to be covered by each
                  award  granted  under  the  Plan;  (iv) to  approve  forms  of
                  agreement  for use under the Plan;  (v) to determine the terms
                  and conditions,  of any Option or Stock Purchase Right granted
                  under the
                           Plan. The terms and conditions  include,  but are not
                           limited  to, the  exercise  price,  the time or times
                           when  Options  or  Stock   Purchase   Rights  may  be
                           exercised   (which   may  be  based  on   performance
                           criteria),  any  vesting  acceleration  or  waiver of
                           forfeiture  restrictions,   and  any  restriction  or
                           limitation  regarding  any  Option or Stock  Purchase
                           Right or underlying Common Stock,  based in each case
                           on the  factors  as the  Administrator,  in its  sole
                           discretion, will determine;
          (vi) to determine  whether and under what  circumstances an Option may
               be settled in cash under subsection 9(e) instead of Common Stock;
                  (vii)    to reduce  the  exercise  price of any  Option to the
                           then  current  Fair  Market  Value if the Fair Market
                           Value of the Common  Stock  covered by the Option has
                           declined since the date the Option was granted;
                  (viii)   to initiate an Option Exchange Program;
                  (ix)     to prescribe, amend and rescind rules and regulations
                           relating to the Plan, including rules and regulations
                           relating to sub-plans  established for the purpose of
                           qualifying for preferred tax treatment  under foreign
                           tax laws;

<PAGE>

                  (x)      to  allow   Optionees  to  satisfy   withholding  tax
                           obligations by electing to have the Company  withhold
                           from the Shares to be issued on exercise of an Option
                           or Stock  Purchase Right that number of Shares having
                           a Fair Market  Value equal to the amount  required to
                           be  withheld.  The Fair Market Value of the Shares to
                           be withheld  will be  determined on the date that the
                           amount of tax to be withheld is to be determined. All
                           elections by  Optionees  to have Shares  withheld for
                           this  purpose  will be made in the form and under the
                           conditions   as  the   Administrator   may   consider
                           necessary or advisable; and

          (xi) to  construe  and  interpret  the  terms of the  Plan and  awards
               granted pursuant to the Plan.

          (c)  Effect of Administrator's Decision. All decisions, determinations
               and  interpretations  of the  Administrator  will  be  final  and
               binding on all Optionees.

5.  Eligibility.

          (a)  Non-statutory  Stock  Options  and Stock  Purchase  Rights may be
               granted to Service  Providers.  Incentive  Stock  Options  may be
               granted only to Employees.

          (b)  Each Option will be designated in the Option  Agreement as either
               an  Incentive  Stock  Option  or a  Non-statutory  Stock  Option.
               However,  notwithstanding the designation, to the extent that the
               aggregate  Fair Market  Value of the Shares with respect to which
               Incentive Stock Options are exercisable for the first time by the
               Optionee during any calendar year (under all plans of the Company
               and any Parent or Subsidiary) exceeds $100,000,  the Options will
               be treated as Non-statutory  Stock Options.  For purposes of this
               Section 5(b),  Incentive Stock Options will be taken into account
               in the order in which they were granted. The Fair Market Value of
               the Shares  will be  determined  as of the time the  Option  with
               respect to the Shares is granted.

          (c)  Neither  the Plan nor any  Option or Stock  Purchase  Right  will
               confer on any Optionee any right with respect to  continuing  the
               Optionee's  relationship as a Service  Provider with the Company,
               nor will it  interfere  in any way  with his or her  right or the
               Company's  right to terminate the  relationship at any time, with
               or without cause.

         (d)      The following limitations will apply to grants of Options:
                  (i)      No Service  Provider  will be granted,  in any fiscal
                           year of the  Company,  Options to purchase  more than
                           10% of the total issued and outstanding Shares.
                  (ii)     The   foregoing    limitations   will   be   adjusted
                           proportionately  in connection with any change in the
                           Company's capitalization as described in Section 12.
                  (iii)    If an Option is  cancelled in the same fiscal year of
                           the  Company in which it was  granted  (other than in
                           connection  with a  transaction  described in Section
                           12), the cancelled Option will be counted against the
                           limits set forth in  subsections  (i) and (ii) above.
                           For this purpose,  if the exercise price of an Option
                           is  reduced,  the  transaction  will be  treated as a
                           cancellation  of the  Option  and the  grant of a new
                           Option.

6. Term of Plan. The Plan will become effective on its adoption by the Board. It
will  continue in effect for a term of ten (10) years  unless  terminated  at an
earlier date under Section 14 of the Plan.

7.  Term of  Option.  The  term of each  Option  will be  stated  in the  Option
Agreement;  provided, however, that the term will be no more than ten (10) years
from the date of grant.  In the case of an Incentive  Stock Option granted to an
Optionee who, at the time the Option is granted,  owns stock  representing  more
than ten  percent  (10%) of the  voting  power  of all  classes  of stock of the
Company or any  Parent or  Subsidiary,  the term of the Option  will be five (5)
years from the date of grant or a shorter  term as may be provided in the Option
Agreement.

8.  Option Exercise Price and Consideration.

          (a)  Option  Exercise  Price.  The per  share  exercise  price for the
               Shares to be issued on exercise of an Option will be the price as
               is  determined by the  Administrator,  but will be subject to the
               following:

                  (i)      In the case of an Incentive Stock Option
                           (A)      granted to an  Employee  who, at the time of
                                    grant of the Option, owns stock representing
                                    more than ten  percent  (10%) of the  voting
                                    power of all classes of stock of the Company
                                    or any Parent or  Subsidiary,  the  exercise
                                    price  will be no less than 110% of the Fair
                                    Market Value per Share on the date of grant.
                           (B)      granted to any other Employee, the per Share
                                    exercise  price will be no less than 100% of
                                    the Fair Market  Value per Share on the date
                                    of grant.
                  (ii)     In the case of a Non-statutory  Stock Option, the per
                           Share  exercise  price  will  be  determined  by  the
                           Administrator.  In the case of a Non-statutory  Stock
                           Option  intended  to  qualify  as  "performance-based
                           compensation" within the meaning of Section 162(m) of
                           the Code,  the per Share  exercise  price  will be no
                           less than 100% of the Fair Market  Value per Share on
                           the date of grant.

<PAGE>

                  (iii)    Notwithstanding the foregoing, Options may be granted
                           with  a  per  Share  exercise  price  other  than  as
                           required   above   pursuant  to  a  merger  or  other
                           corporate transaction.

          (b)  Consideration.  The consideration to be paid for the Shares to be
               issued on exercise of an Option, including the method of payment,
               will be determined by the  Administrator  (and, in the case of an
               Incentive Stock Option, will be determined at the time of grant).
               The consideration may consist of:

                  (i)      cash,
                  (ii)     check,
                  (iii)    promissory note,
                  (iv)     other Shares which:
                           (A)      in the case of Shares  acquired  on exercise
                                    of  an  Option,   have  been  owned  by  the
                                    Optionee  for more  than six  months  on the
                                    date of surrender, and
                           (B)      have a Fair  Market  Value  on the  date  of
                                    surrender  equal to the  aggregate  exercise
                                    price of the  Shares as to which the  Option
                                    will be exercised,

               (v)  consideration  received  by the  Company  under  a  cashless
                    exercise  program  implemented  by the Company in connection
                    with the Plan, or

                  (vi)     any combination of the foregoing methods of payment.
                  In making its determination as to the type of consideration to
                  accept,  the Administrator  will consider if acceptance of the
                  consideration  may  be  reasonably  expected  to  benefit  the
                  Company.

9.  Exercise of Option.

         (a)      Procedure for Exercise;  Rights as a  Shareholder.  Any Option
                  granted  under the Plan will be  exercisable  according to the
                  terms of the Plan at the times, and under any other conditions
                  as determined by the Administrator and set forth in the Option
                  Agreement.   Unless  the  Administrator   provides  otherwise,
                  vesting of Options  granted to Officers and Directors  will be
                  tolled  during any unpaid leave of absence.  An Option may not
                  be exercised for a fraction of a Share.

                  An  Option  will be  considered  exercised  when  the  Company
receives:

               (i)  written or electronic  notice of exercise  (under the Option
                    Agreement)  from the person entitled to exercise the Option,
                    and

                  (ii) full  payment  for the Shares  with  respect to which the
                  Option  is   exercised.   Full  payment  may  consist  of  any
                  consideration   and  method  of  payment   authorized  by  the
                  Administrator  and  permitted by the Option  Agreement and the
                  Plan. Shares issued on exercise of an Option will be issued in
                  the name of the Optionee or, if requested by the Optionee,  in
                  the name of the  Optionee  and his or her  spouse.  Until  the
                  Shares are issued (as  evidenced by the  appropriate  entry on
                  the  books of the  Company  or of a duly  authorized  transfer
                  agent of the Company),  no right to vote or receive  dividends
                  or any other rights as a  shareholder  will exist with respect
                  to the Shares, notwithstanding the exercise of the Option. The
                  Company will issue (or cause to be issued) the Shares promptly
                  after the Option is exercised.  No adjustment will be made for
                  a dividend  or other  right for which the record date is prior
                  to the date the  Shares  are  issued,  except as  provided  in
                  Section 12 of the Plan.

                  Exercise  of an Option in any manner will result in a decrease
                  in  the  number  of  Shares  thereafter  available,  both  for
                  purposes  of the Plan and for sale  under the  Option,  by the
                  number of Shares as to which the Option is exercised.

               (b)  Termination of  Relationship  as a Service  Provider.  If an
                    Optionee ceases to be a Service  Provider,  the Optionee may
                    exercise  his or her Option  within the period of time as is
                    specified  in the Option  Agreement  to the extent  that the
                    Option is vested on the date of termination (but in no event
                    later than the  expiration  of the term of the Option as set
                    forth  in  the  Option  Agreement).  In  the  absence  of  a
                    specified  time in the Option  Agreement,  the  Option  will
                    remain  exercisable  for  three  (3)  months  following  the
                    Optionee's termination.  If, on the date of termination, the
                    Optionee is not vested as to his or her entire  Option,  the
                    Shares  covered by the  unvested  portion of the Option will
                    revert to the Plan. If, after termination, the Optionee does
                    not exercise his or her Option within the time  specified by
                    the Administrator, the Option will terminate, and the Shares
                    covered by the Option will revert to the Plan.

               (c)  Disability  of  Optionee.  If  an  Optionee  ceases  to be a
                    Service  Provider as a result of the Optionee's  Disability,
                    the  Optionee  may  exercise  his or her  Option  within the
                    period of time as is  specified  in the Option  Agreement to
                    the extent  the Option is vested on the date of  termination
                    (but in no event  later than the  expiration  of the term of
                    the  Option as set forth in the  Option  Agreement).  In the
                    absence of a  specified  time in the Option  Agreement,  the
                    Option  will  remain  exercisable  for  twelve  (12)  months
                    following  the  Optionee's  termination.  If, on the date of
                    termination,  the  Optionee  is not  vested as to his or her
                    entire Option, the Shares covered by the unvested portion of
                    the Option will revert to the Plan.  If, after  termination,
                    the Optionee  does not exercise his or her Option within the
                    time specified,  the Option will  terminate,  and the Shares
                    covered by the Option will revert to the Plan.

<PAGE>

               (d)  Death of  Optionee.  If an  Optionee  dies  while a  Service
                    Provider,  the Option may be exercised  within the period of
                    time as is specified  in the Option  Agreement to the extent
                    that the  Option is  vested on the date of death  (but in no
                    event later than the expiration of the term of the Option as
                    set forth in the Option  Agreement) by the Optionee's estate
                    or by a person who acquires the right to exercise the Option
                    by bequest or  inheritance.  In the  absence of a  specified
                    time  in  the  Option  Agreement,  the  Option  will  remain
                    exercisable for twelve (12) months  following the Optionee's
                    termination.  If, at the time of death,  the Optionee is not
                    vested as to the entire  Option,  the Shares  covered by the
                    unvested  portion of the Option will  immediately  revert to
                    the Plan. If the Option is not so exercised  within the time
                    specified, the Option will terminate, and the Shares covered
                    by the Option will revert to the Plan.

               (e)  Buyout  Provisions.  The Administrator may at any time offer
                    to buy  out for a  payment  in cash  or  Shares,  an  Option
                    previously granted, based on the terms and conditions as the
                    Administrator will establish and communicate to the Optionee
                    at the time that the offer is made.

10.  Non-Transferability  of Options and Stock Purchase Rights.  The Options and
Stock  Purchase  Rights  may  not  be  sold,  pledged,  assigned,  hypothecated,
transferred,  or disposed of in any manner  other than by will or by the laws of
descent  or  distribution  and may be  exercised,  during  the  lifetime  of the
Optionee, only by the Optionee.

11.  Stock Purchase Rights.

         (a)      Rights to Purchase. Stock Purchase Rights may be issued either
                  alone,  in addition to, or in tandem with other awards granted
                  under the Plan and/or  cash  awards made  outside of the Plan.
                  After the  Administrator  determines  that it will offer Stock
                  Purchase  Rights under the Plan, it will advise the offeree in
                  writing  or  electronically  of  the  terms,   conditions  and
                  restrictions  related  to the offer,  including  the number of
                  Shares that the person will be entitled to purchase, the price
                  to be paid,  and the time within  which the person must accept
                  the  offer.  The offer  will be  accepted  by  execution  of a
                  Restricted Stock purchase  agreement in the form determined by
                  the Administrator.

         (b)      Repurchase   Option.   Unless  the  Administrator   determines
                  otherwise,  the Restricted Stock purchase agreement will grant
                  the Company a repurchase  option  exercisable on the voluntary
                  or involuntary termination of the purchaser's service with the
                  Company for any reason  (including  death or disability).  The
                  purchase  price  for  Shares   repurchased   pursuant  to  the
                  Restricted Stock purchase agreement will be the original price
                  paid by the purchaser and may be paid by  cancellation  of any
                  indebtedness  of the purchaser to the Company.  The repurchase
                  option  will  lapse  at  the  rate  as the  Administrator  may
                  determine.

               (c)  Other  Provisions.  The Restricted Stock purchase  agreement
                    will contain any other terms,  provisions and conditions not
                    inconsistent  with  the  Plan  as may be  determined  by the
                    Administrator in its sole discretion.

         (d)      Rights  as a  Shareholder.  Once the Stock  Purchase  Right is
                  exercised,  the purchaser will have rights equivalent to those
                  of a  shareholder  and will be a  shareholder  when his or her
                  purchase  is  entered on the  records  of the duly  authorized
                  transfer agent of the Company.  No adjustment will be made for
                  a dividend  or other  right for which the record date is prior
                  to the date the Stock Purchase  Right is exercised,  except as
                  provided in Section 12 of the Plan.

12. Adjustments On Changes in Capitalization, Merger or Asset Sale.

               (a)  Changes in Capitalization. Subject to any required action by
                    the  stockholders  of the  Company,  the number of shares of
                    Common  Stock  covered by each  outstanding  Option or Stock
                    Purchase  Right,  and the  number of shares of Common  Stock
                    which have been  authorized  for issuance under the Plan but
                    as to which no Options  or Stock  Purchase  Rights  have yet
                    been  granted  or which  have been  returned  to the Plan on
                    cancellation  or expiration  of an Option or Stock  Purchase
                    Right,  as well as the  price  per  share  of  Common  Stock
                    covered by each outstanding  Option or Stock Purchase Right,
                    will  be  proportionately   adjusted  for  any  increase  or
                    decrease  in the  number  of issued  shares of Common  Stock
                    resulting  from a stock split,  reverse  stock split,  stock
                    dividend,  combination  or  reclassification  of the  Common
                    Stock,  or any other  increase  or decrease in the number of
                    issued shares of Common Stock  effected  without  receipt of
                    consideration   by  the  Company.   The  conversion  of  any
                    convertible securities of the Company will not be considered
                    to have been "effected  without  receipt of  consideration."
                    The   adjustment   will  be  made   by  the   Board,   whose
                    determination  in that  respect  will be final,  binding and
                    conclusive.  Except as expressly  provided in this Plan,  no
                    issuance by the Company of shares of stock of any class,  or
                    securities  convertible  into  shares of stock of any class,
                    will affect,  and no adjustment  will be made to, the number
                    or price of shares of Common  Stock  subject to an Option or
                    Stock Purchase Right.

<PAGE>

         (b)      Dissolution  or  Liquidation.  In the  event  of the  proposed
                  dissolution or liquidation of the Company,  the  Administrator
                  will notify the Optionee not less than fifteen (15) days prior
                  to  the  proposed  action.  To the  extent  it  has  not  been
                  previously exercised,  the Option or Stock Purchase Right will
                  terminate   immediately  prior  to  the  consummation  of  the
                  proposed action.

               (c)  Merger. In the event of a merger,  sale or reorganization of
                    the  Company   with  or  into  any  other   corporation   or
                    corporations  or a sale of all or  substantially  all of the
                    assets  or  outstanding  stock  of  the  Company,  in  which
                    transaction the Company's stockholders  immediately prior to
                    the transaction own immediately  after the transaction  less
                    than  50%  of  the  equity   securities   of  the  surviving
                    corporation  or its parent,  all Options  that have not been
                    terminated under the Stock Option Agreement that will become
                    vested  within 18 months of the closing  date of the merger,
                    sale or reorganization will be accelerated.  In the event of
                    a merger of the Company  with or into  another  corporation,
                    each  outstanding  Option  or Stock  Purchase  Right  may be
                    assumed or an equivalent  option or right may be substituted
                    by the  successor  corporation  or a parent or subsidiary of
                    the successor  corporation.  If, in the event,  an Option or
                    Stock  Purchase  Right is not  assumed or  substituted,  the
                    Option or Stock Purchase Right will terminate as of the date
                    of the  closing  of the  merger.  For the  purposes  of this
                    paragraph,  the  Option  or  Stock  Purchase  Right  will be
                    considered  assumed if, following the merger,  the Option or
                    Stock  Purchase  Right  confers  the  right to  purchase  or
                    receive,  for each Share of  Optioned  Stock  subject to the
                    Option  or Stock  Purchase  Right  immediately  prior to the
                    merger,  the  consideration  (whether stock,  cash, or other
                    securities or property) received in the merger by holders of
                    Common  Stock for each Share held on the  effective  date of
                    the transaction  (and if the holders are offered a choice of
                    consideration,  the  type  of  consideration  chosen  by the
                    holders of a majority  of the  outstanding  Shares).  If the
                    consideration  received  in the merger is not solely  common
                    stock  of  the  successor  corporation  or its  Parent,  the
                    Administrator   may,  with  the  consent  of  the  successor
                    corporation, provide for the consideration to be received on
                    the exercise of the Option or Stock Purchase Right, for each
                    Share of  Optioned  Stock  subject  to the  Option  or Stock
                    Purchase  Right,  to be solely common stock of the successor
                    corporation  or its Parent equal in fair market value to the
                    per share consideration  received by holders of Common Stock
                    in the merger.

13.  Non-Transferability of Options and Stock Purchase Rights. Unless determined
otherwise by the  Administrator,  an Option or Stock  Purchase  Right may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other  than  by  will  or by the  laws of  descent  or  distribution  and may be
exercised,  during the lifetime of the Optionee,  only by the  Optionee.  If the
Administrator makes an Option or Stock Purchase Right  transferable,  the Option
or Stock Purchase Right will contain all additional  terms and conditions as the
Administrator considers appropriate.

14. Time of Granting Options and Stock Purchase Rights.  The date of grant of an
Option or Stock Purchase Right will, for all purposes,  be the date on which the
Administrator  makes the  determination  granting  the Option or Stock  Purchase
Right,  or any other date as is determined by the  Administrator.  Notice of the
determination  will be given to each Service Provider to whom an Option or Stock
Purchase  Right is so  granted  within a  reasonable  time after the date of the
grant.

15. Amendment and Termination of the Plan.

               (a)  Amendment and Termination.  The Board may at any time amend,
                    alter, suspend or terminate the Plan.

               (b)  Shareholder  Approval.  The Board  will  obtain  shareholder
                    approval of any Plan  amendment to the extent  necessary and
                    desirable to comply with Applicable Laws.

         (c)      Effect of Amendment or Termination. No amendment,  alteration,
                  suspension or  termination  of the Plan will impair the rights
                  of any Optionee,  unless mutually agreed otherwise between the
                  Optionee and the  Administrator,  which  agreement  must be in
                  writing  and  signed  by  the   Optionee   and  the   Company.
                  Termination  of the Plan will not affect  the  Administrator's
                  ability to exercise  the powers  granted to it with respect to
                  Options   granted   under  the  Plan  prior  to  the  date  of
                  termination.

16.  Conditions On Issuance of Shares.

         (a)      Legal  Compliance.  Shares will not be issued  pursuant to the
                  exercise  of an Option  unless the  exercise of the Option and
                  the  issuance  and  delivery  of the Shares  will  comply with
                  Applicable Laws and will be further subject to the approval of
                  counsel for the Company with respect to such compliance.

         (b)      Investment Representations.  As a condition to the exercise of
                  an Option, the Administrator may require the person exercising
                  the Option to  represent  and  warrant at the time of exercise
                  that the Shares are being  purchased  only for  investment and
                  without any present intention to sell or distribute the Shares
                  if,  in  the  opinion  of  counsel  for  the  Company,  such a
                  representation is required.

17.  Inability  to Obtain  Authority.  The  inability  of the  Company to obtain
authority  from any  regulatory  body having  jurisdiction,  which  authority is
considered by the Company's  counsel to be necessary to the lawful  issuance and
sale of any Shares the Plan,  will  relieve  the  Company  of any  liability  in
respect of the  failure  to issue or sell the  Shares as to which the  requisite
authority may not have been obtained.

<PAGE>

18.  Reservation of Shares.  The Company,  during the term of this Plan, will at
all times  reserve and keep  available a sufficient  number of Shares to satisfy
the requirements of the Plan.

19.  Shareholder  Approval.  The  Plan  will  be  subject  to  approval  by  the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Shareholder approval must be obtained in the degree and manner required
under Applicable Laws.

<PAGE>

                      PHAGE THERAPEUTICS INTERNATIONAL INC.
                                 2000 STOCK PLAN

                             STOCK OPTION AGREEMENT

Unless otherwise  defined in this Stock Option  Agreement,  the terms defined in
the 2000 Stock Plan will have the same  defined  meanings  in this Stock  Option
Agreement.

1.  Notice of Stock Option Grant.

         Name:                               "Optionee"
                  --------------------------

The Optionee has been granted an Option to purchase Common Stock of the Company,
subject to the terms and  conditions of the Plan and this Option  Agreement,  as
follows:

         Date of Grant:
                        --------------------------------

         Vesting Commencement Date:                                     "VCD"
                                     -----------------------------------

         Exercise Price per Share:
                                    ----------------------

         Total Number of Shares Granted:                   Number of shares
                                         ----------------
         Total Exercise Price:                                    Total Price
                                -----------------------
         Type of Option:                        X         Incentive Stock Option
                        ---    -----------------------------------------------

                           _________________________ Non-statutory Stock Option

         Term/Expiration Date:
                                ------------------------------------

         Vesting Schedule:

         The vesting  schedule will be determined  by the  Administrator  in its
sole discretion.

         Termination Period:

         This Option will be exercisable  for one month after Optionee ceases to
         be a Service Provider.  On Optionee's death or Disability,  this Option
         may be  exercised  for one year after  Optionee  ceases to be a Service
         Provider.  In no event may  Optionee  exercise  this  Option  after the
         Term/Expiration Date as provided above.

2.  Agreement.

12)               Grant of Option.  The Plan Administrator of the Company grants
                  to the Optionee named in the Notice of Grant (the "Optionee"),
                  an option (the  "Option") to purchase the number of Shares set
                  forth in the Notice of Grant,  at the exercise price per Share
                  set forth in the Notice of Grant (the "Exercise  Price"),  and
                  subject  to the terms  and  conditions  of the Plan,  which is
                  incorporated  by  reference.  Subject to Section  14(c) of the
                  Plan,  in the  event  of a  conflict  between  the  terms  and
                  conditions  of the Plan and this Option  Agreement,  the terms
                  and conditions of the Plan will prevail.

                  If  designated  in the Notice of Grant as an  Incentive  Stock
                  Option  ("ISO"),  this  Option is  intended  to  qualify as an
                  Incentive  Stock Option as defined in Section 422 of the Code.
                  Nevertheless,  to the extent that it exceeds the $100,000 rule
                  of Code  Section  422(d),  this  Option  will be  treated as a
                  Non-statutory Stock Option ("NSO").

13)      Exercise of Option.
                  (i)      Right to  Exercise.  This Option will be  exercisable
                           during its term under the Vesting Schedule set out in
                           the   Notice  of  Grant   and  with  the   applicable
                           provisions of the Plan and this Option Agreement.
                  (ii)     Method of Exercise.  This Option will be  exercisable
                           by  delivery  of  an  exercise  notice  in  the  form
                           attached as Exhibit A (the  "Exercise  Notice") which
                           will state the election to exercise  the Option,  the
                           number of Shares with  respect to which the Option is
                           being exercised,  and any other  representations  and
                           agreements  as may be  required by the  Company.  The
                           Exercise Notice will be accompanied by payment of the
                           aggregate  Exercise Price as to all Exercised Shares.
                           This Option will be  considered  to be  exercised  on
                           receipt by the Company of a fully  executed  Exercise
                           Notice accompanied by the aggregate Exercise Price.

<PAGE>

                           No Shares will be issued  pursuant to the exercise of
                  an Option  unless the  issuance  and  exercise  complies  with
                  Applicable Laws. Assuming compliance,  for income tax purposes
                  the Shares will be considered  transferred  to the Optionee on
                  the date on which the Option is exercised  with respect to the
                  Shares.

3. Optionee's Representations.  In the event the Shares have not been registered
under  the  Securities  Act of 1933,  as  amended,  at the time  this  Option is
exercised, the Optionee will, if required by the Company,  concurrently with the
exercise of all or any portion of this Option, deliver to the Company his or her
Investment Representation Statement in the form attached hereto as Exhibit B.

4. Lock-Up  Period.  Optionee hereby agrees that, if so requested by the Company
or any  representative  of the  underwriters  (the  "Managing  Underwriter")  in
connection  with any  registration  of the  offering  of any  securities  of the
Company under the Securities Act,  Optionee will not sell or otherwise  transfer
any Shares or other securities of the Company during the 180-day period (or such
other  period as may be requested  in writing by the  Managing  Underwriter  and
agreed to in writing by the Company) (the "Market  Standoff  Period")  following
the effective  date of a  registration  statement of the Company filed under the
Securities  Act.  Such  restriction  will apply  only to the first  registration
statement  of the  Company to become  effective  under the  Securities  Act that
includes  securities  to be sold on behalf of the  Company  to the  public in an
underwritten  public  offering under the Securities  Act. The Company may impose
stop-transfer  instructions with respect to securities  subject to the foregoing
restrictions until the end of such Market Standoff Period.

5. Method of Payment.  Payment of the aggregate Exercise Price will be by any of
the  following,  or a  combination  of the  following,  at the  election  of the
Optionee:

         (a)      cash or check;

               (b)  consideration   received  by  the  Company  under  a  formal
                    cashless   exercise   program  adopted  by  the  Company  in
                    connection with the Plan; or

         (c)      surrender of other Shares which:

               (i)  in the case of Shares  acquired  on  exercise  of an option,
                    have been owned by the Optionee for more than six (6) months
                    on the date of surrender, and

                  (ii)     have a Fair  Market  Value on the  date of  surrender
                           equal  to  the  aggregate   Exercise   Price  of  the
                           Exercised Shares.

6. Restrictions on Exercise. This Option may not be exercised until such time as
the  Plan  has been  approved  by the  shareholders  of the  Company,  or if the
issuance of the Shares on the exercise or the method of payment of consideration
for the shares would constitute a violation of any Applicable Law.

7.  Non-Transferability  of Option.  This Option may not be  transferred  in any
manner  otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by Optionee.  The terms of the
Plan and this Option Agreement will be binding on the executors, administrators,
heirs, successors and assigns of the Optionee.

8. Term of Option.  This Option may be exercised only within the term set out in
the Notice of Grant,  and may be  exercised  during the term only under the Plan
and the terms of this Option.

9. Tax  Consequences.  Set forth below is a brief summary as of the date of this
Option of some of the  federal tax  consequences  of exercise of this Option and
disposition of the Shares. THIS SUMMARY IS NECESSARILY  INCOMPLETE,  AND THE TAX
LAWS AND  REGULATIONS  ARE SUBJECT TO CHANGE.  THE OPTIONEE SHOULD CONSULT A TAX
ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

               (a)  Exercise of NSO.  There may be a regular  federal income tax
                    liability on the  exercise of an NSO.  The Optionee  will be
                    treated as having received  compensation  income (taxable at
                    ordinary  income tax rates) equal to the excess,  if any, of
                    the Fair Market  Value of the Shares on the date of exercise
                    over the  Exercise  Price.  If  Optionee is an Employee or a
                    former  Employee,  the Company  will be required to withhold
                    from  Optionee's  compensation  or collect from Optionee and
                    pay to the applicable  taxing  authorities an amount in cash
                    equal to a  percentage  of this  compensation  income at the
                    time of  exercise,  and may refuse to honor the exercise and
                    refuse to deliver Shares if the withholding  amounts are not
                    delivered at the time of exercise.

         (b)      Exercise  of ISO. If this Option  qualifies  as an ISO,  there
                  will  be no  regular  federal  income  tax  liability  on  the
                  exercise of the Option,  although  the excess,  if any, of the
                  Fair Market  Value of the Shares on the date of exercise  over
                  the  Exercise  Price will be treated as an  adjustment  to the
                  alternative  minimum  tax for  federal  tax  purposes  and may
                  subject  the  Optionee to the  alternative  minimum tax in the
                  year of exercise.

<PAGE>

               (c)  Disposition of Shares.  In the case of an NSO, if Shares are
                    held  for not less  than one  year,  any  gain  realized  on
                    disposition  of the  Shares  will be  treated  as  long-term
                    capital gain for federal income tax purposes. In the case of
                    an ISO,  if Shares  transferred  pursuant  to the Option are
                    held for not less than one year  after  exercise  and of not
                    less  than  two  years  after  the Date of  Grant,  any gain
                    realized on  disposition  of the Shares will also be treated
                    as long-term  capital gain for federal  income tax purposes.
                    If Shares  purchased under an ISO are disposed of within one
                    year after  exercise  or two years  after the Date of Grant,
                    any gain  realized  on such  disposition  will be treated as
                    compensation  income  (taxable at ordinary  income rates) to
                    the extent of the difference  between the Exercise Price and
                    the lesser of:

               (i)  the Fair Market Value of the Shares on the date of exercise,
                    or

                  (ii)     the sale price of the  Shares.  Any  additional  gain
                           will  be  taxed  as  capital   gain,   short-term  or
                           long-term depending on the period that the ISO Shares
                           were held.

         (d)      Notice of  Disqualifying  Disposition  of ISO  Shares.  If the
                  Option granted to Optionee is an ISO, and if Optionee sells or
                  otherwise  disposes of any of the Shares acquired  pursuant to
                  the ISO on or before the later of:
                  (i)      the date two years after the Date of Grant, or
                  (ii)     the date one year  after  the date of  exercise,  the
                           Optionee  will  immediately  notify  the  Company  in
                           writing of such disposition.
                  Optionee  agrees  that  Optionee  may be subject to income tax
                  withholding  by  the  Company  on  the   compensation   income
                  recognized by the Optionee.

10. Entire Agreement;  Governing Law. The Plan is incorporated by reference. The
Plan and this Option  Agreement  constitute the entire  agreement of the parties
and supersede in their  entirety all prior  undertakings  and  agreements of the
Company and Optionee with respect to Options and Stock Purchase Rights,  and may
not be  modified  adversely  to the  Optionee's  interest  except  by means of a
writing  signed by the Company and Optionee.  This  agreement is governed by the
internal substantive laws but not the choice of law rules of Florida.

11. No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE APPLICABLE  VESTING SCHEDULE IS EARNED ONLY BY
CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT
OF BEING  HIRED,  BEING  GRANTED  THIS OPTION OR  ACQUIRING  SHARES  HEREUNDER).
OPTIONEE FURTHER  ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT,  THE TRANSACTIONS
CONTEMPLATED  HEREUNDER AND THE ATTACHED  VESTING  SCHEDULE DO NOT CONSTITUTE AN
EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE
VESTING  PERIOD,  FOR ANY PERIOD,  OR AT ALL, AND WILL NOT  INTERFERE IN ANY WAY
WITH  OPTIONEE'S   RIGHT  OR  THE  COMPANY'S   RIGHT  TO  TERMINATE   OPTIONEE'S
RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

<PAGE>

Optionee  acknowledges  receipt of a copy of the Plan and represents  that he or
she is familiar  with the terms and  provisions  of the Plan,  and accepts  this
Option  subject to all of the terms and  provisions  of the Plan.  Optionee  has
reviewed the Plan and this Option in their  entirety,  has had an opportunity to
obtain  the  advice  of  counsel  prior  to  executing  this  Option  and  fully
understands all provisions of the Option.  Optionee agrees to accept as binding,
conclusive and final all decisions or  interpretations  of the  Administrator on
any questions arising under the Plan or this Option.  Optionee further agrees to
notify the Company on any change in the residence address indicated below.

OPTIONEE:                                  PHAGE THERAPEUTICS INTERNATIONAL INC.

---------------------------------               --------------------------------
Signature                                  By: _____________________

------------------------------------------
Print Name                                               Title
---------------------------------
Social Security Number

Residential Address:

                                CONSENT OF SPOUSE

The  undersigned  spouse  of  Optionee  has  read and  approves  the  terms  and
conditions  of the Plan and  this  Option  Agreement.  In  consideration  of the
Company's  granting his or her spouse the right to purchase  Shares as set forth
in the Plan and this Option Agreement,  the undersigned agrees to be irrevocably
bound by the terms and  conditions  of the Plan and this  Option  Agreement  and
further agrees that any community property interest will be similarly bound. The
undersigned  appoints  the  undersigned's  spouse  as  attorney-in-fact  for the
undersigned  with respect to any  amendment or exercise of rights under the Plan
or this Option Agreement.

---------------------------------
Spouse of Optionee

<PAGE>

                                    EXHIBIT A

                                 2000 STOCK PLAN

                                 EXERCISE NOTICE

Phage Therapeutics International, Inc.
22116 23rd Drive S.E.
Bothwll, Washington 98201

         1. Exercise of Option.  Effective as of today,  ___________,  20__, the
undersigned  ("Optionee")  elects to  exercise  Optionee's  option  to  purchase
_________  shares of the  Common  Stock  (the  "Shares")  of Phage  Therapeutics
Interntational  Inc. (the  "Company")  under and pursuant to the 2000 stock plan
(the "Plan") and the stock option  agreement dated  ________,  20__ (the "Option
Agreement"). The purchase price for the Shares will be $________, as required by
the Option Agreement.

     2.  Delivery of Payment.  Purchaser  has  delivered to the Company the full
purchase price of the Shares.

     3.  Representations  of Optionee.  Optionee  acknowledges that Optionee has
received,  read and understood  the Plan and the Option  Agreement and agrees to
abide by and be bound by their terms and conditions.

         4.  Rights  as  Shareholder.  Until  the  issuance  of the  Shares  (as
evidenced  by the  appropriate  entry on the books of the  Company  or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends
or any other  rights as a  shareholder  will exist with  respect to the Optioned
Stock,  notwithstanding the exercise of the Option. The Shares will be issued to
the Optionee as soon as practicable after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date of issuance except as provided in Section 12 of the Plan.

         5. Tax  Consultation.  Optionee  understands  that  Optionee may suffer
adverse tax  consequences  as a result of Optionee's  purchase or disposition of
the  Shares.  Optionee  represents  that  Optionee  has  consulted  with any tax
consultants  Optionee  considers  advisable in  connection  with the purchase or
disposition  of the Shares and that  Optionee  is not relying on the Company for
any tax advice.

         6.  Restrictive Legends and Stop-Transfer Orders.

         (a)      Legends. Optionee understands and agrees that the Company will
                  cause the  legends  set forth  below or legends  substantially
                  equivalent   thereto,  to  be  placed  on  any  certificate(s)
                  evidencing  ownership  of the Shares  together  with any other
                  legends  that may be  required  by the  Company or by state or
                  federal securities laws:

                           THE  SECURITIES  REPRESENTED  HEREBY  HAVE  NOT  BEEN
                           REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933  (THE
                           "ACT")  AND MAY  NOT BE  OFFERED,  SOLD OR  OTHERWISE
                           TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
                           REGISTERED  UNDER  THE  ACT  OR,  IN THE  OPINION  OF
                           COMPANY  COUNSEL  SATISFACTORY TO THE ISSUER OF THESE
                           SECURITIES,  SUCH OFFER, SALE OR TRANSFER,  PLEDGE OR
                           HYPOTHECATION IS IN COMPLIANCE THEREWITH.

                  (b) Stop-Transfer  Notices.  Optionee agrees that, in order to
                  ensure  compliance with the  restrictions  referred to herein,
                  the Company may issue appropriate "stop transfer" instructions
                  to its  transfer  agent,  if any,  and  that,  if the  Company
                  transfers  its  own  securities,   it  may  make   appropriate
                  notations to the same effect in its own records.

         (c)      Refusal to Transfer.  The Company will not be required:

               (i)  to  transfer  on its books any Shares that have been sold or
                    otherwise  transferred in violation of any of the provisions
                    of this Exercise Notice or

                  (ii)     to treat as owner of such  Shares  or to  accord  the
                           right to vote or pay  dividends  to any  purchaser or
                           other  transferee  to whom such Shares will have been
                           so transferred.

         8.  Successors  and  Assigns.  The Company may assign any of its rights
under this Exercise  Notice to single or multiple  assignees,  and this Exercise
Notice shall inure to the benefit of the  successors and assigns of the Company.
Subject to the  restrictions on transfer herein set forth,  this Exercise Notice
shall be binding on Optionee  and his or her heirs,  executors,  administrators,
successors and assigns.

<PAGE>

     9.  Interpretation.  Any  dispute  regarding  the  interpretation  of  this
Exercise Notice will be submitt ed by Optionee or by the Company  immediately to
the Administrator which will review the dispute at its next regular meeting. The
resolution  of a dispute by the  Administrator  will be final and binding on all
parties.

         10. Entire  Agreement/Governing  Law. The Plan and Option Agreement are
incorporated by reference.  This Exercise Notice, the Plan, the Option Agreement
and the Investment  Representation  Statement constitute the entire agreement of
the parties  concerning Options and Stock Purchase Rights and supersede in their
entirety  all prior  undertakings  and  agreements  of the Company and  Optionee
concerning  Options and Stock Purchase Rights, and may not be modified adversely
to the  Optionee's  interest  except by means of a writing signed by the Company
and Optionee.  This Exercise Notice is governed by the internal substantive laws
but not the choice of law rules, of Florida.

Submitted By:                               Accepted By:

OPTIONEE:                                 PHAGE THERAPEUTICS INTERNATIONAL INC.

---------------------------------           ---------------------------------
Signature                                   By:_______________________

                                            _________________________________
-------------------------------------
Print Name                                  Title
---------------------------------
Social Security Number

                                            Date Received: _____________________

<PAGE>

                                    EXHIBIT B

                       INVESTMENT REPRESENTATION STATEMENT

OPTIONEE:
                  -------------------------------------------

COMPANY:     Phage Therapeutics International Inc.

SECURITY:            Common Stock
                  --------------------------------------------------

AMOUNT:
         ---------------------------------------

DATE:             _______________________________

In connection with the purchase of the above-listed Securities,  the undersigned
Optionee represents to the Company the following:

1.   Possesses  Knowledge  About  Company.  Optionee  is aware of the  Company's
     business  affairs  and  financial  condition  and has  acquired  sufficient
     information  about  the  Company  to reach an  informed  and  knowledgeable
     decision to acquire the Securities.

2.   Investment  Purpose.  Optionee is acquiring these Securities for investment
     for  Optionee's  own account  only and not with a view to, or for resale in
     connection  with,  any  "distribution"  thereof  within the  meaning of the
     Securities Act of 1933, as amended (the "Securities Act").

3.   Restricted  Securities.  Optionee  acknowledges  and  understands  that the
     Securities constitute "restricted  securities" under the Securities Act and
     have not been registered under the Securities Act in reliance on a specific
     exemption  therefrom,  which exemption depends on, among other things,  the
     bona fide nature of Optionee's  investment  intent as expressed  herein. In
     this connection,  Optionee  understands that, in the view of the Securities
     and Exchange  Commission,  the  statutory  basis for such  exemption may be
     unavailable if Optionee's representation was predicated solely on a present
     intention to hold these  Securities  for the minimum  capital  gains period
     specified under tax statutes, for a deferred sale, for or until an increase
     or decrease in the market price of the  Securities,  or for a period of one
     year or any other fixed period in the future.

4.       Securities May be Subject to Indefinite Hold Period.  Optionee  further
         understands that the Securities must be held  indefinitely  unless they
         are  subsequently  registered  under the Securities Act or an exemption
         from such registration is available.  Optionee further acknowledges and
         understands  that the Company is under no  obligation  to register  the
         Securities.  Optionee  understands that the certificate  evidencing the
         Securities will be imprinted with a legend which prohibits the transfer
         of the Securities  unless they are registered or such  registration  is
         not required in the opinion of counsel  satisfactory to the Company,  a
         legend  prohibiting  their transfer as required under  applicable state
         securities laws.

5.   Rule 701 and Rule 144. Optionee is familiar with the provisions of Rule 701
     and Rule  144,  each  promulgated  under  the  Securities  Act,  which,  in
     substance,   permit  limited  public  resale  of  "restricted   securities"
     acquired,  directly or indirectly from the issuer thereof,  in a non-public
     offering  subject  to the  satisfaction  of  certain  conditions.  Rule 701
     provides  that if the  issuer  qualifies  under Rule 701 at the time of the
     grant of the  Option to the  Optionee,  the  exercise  will be exempt  from
     registration  under the  Securities  Act. In the event the Company  becomes
     subject  to the  reporting  requirements  of  Section  13 or  15(d)  of the
     Securities  Exchange  Act of 1934,  ninety  (90) days  thereafter  (or such
     longer period as any market stand-off agreement may require) the Securities
     exempt under Rule 701 may be resold, subject to the satisfaction of certain
     of the conditions  specified by Rule 144,  including:  (a) the resale being
     made  through  a broker  in an  unsolicited  "broker's  transaction"  or in
     transactions  directly  with a market maker (as said term is defined  under
     the Securities Exchange Act of 1934); and, in the case of an affiliate, (b)
     the availability of certain public  information about the Company,  (c) the
     amount of Securities being sold during any three month period not exceeding
     the  limitations  specified in Rule 144(e),  and (d) the timely filing of a
     Form 144, if applicable.

<PAGE>

         In the event that the Company  does not  qualify  under Rule 701 at the
         time of grant of the  Option,  then the  Securities  may be  resold  in
         certain  limited  circumstances  subject to the provisions of Rule 144,
         which  requires  the  resale to occur not less than one year  after the
         later of the date the  Securities  were sold by the Company or the date
         the  Securities  were sold by an affiliate  of the Company,  within the
         meaning of Rule 144; and, in the case of  acquisition of the Securities
         by an  affiliate,  or by a  non-affiliate  who  subsequently  holds the
         Securities less than two years,  the satisfaction of the conditions set
         forth in sections (a),  (b), (c) and (d) of the  paragraph  immediately
         above.

6.   Other Registration Exemption Not Assured. Optionee further understands that
     in the event all of the applicable  requirements of Rule 701 or 144 are not
     satisfied,   registration   under  the  Securities  Act,   compliance  with
     Regulation A, or some other  registration  exemption will be required;  and
     that,  notwithstanding  the fact that Rules 144 and 701 are not  exclusive,
     the Staff of the  Securities  and Exchange  Commission  has  expressed  its
     opinion that persons proposing to sell private  placement  securities other
     than in a registered  offering and otherwise  than pursuant to Rules 144 or
     701  will  have a  substantial  burden  of proof  in  establishing  that an
     exemption from registration is available for such offers or sales, and that
     such  persons  and  their  respective   brokers  who  participate  in  such
     transactions  do so  at  their  own  risk.  Optionee  understands  that  no
     assurances can be given that any such other registration  exemption will be
     available in such event.

OPTIONEE:

---------------------------------
Signature

Print Name
---------------------------------
Social Security Number

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