Document:

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                                                                   Exhibit 10.36

                                   AMDL, INC.
                             2004 STOCK OPTION PLAN

         1.       PURPOSE. The purpose of the AMDL, Inc. 2004 Stock Option Plan
(the "Plan") is to strengthen AMDL, Inc., a Delaware corporation
("Corporation"), by providing to employees, officers, directors, consultants and
independent contractors of the Corporation or any of its subsidiaries (including
dealers, distributors, and other business entities or persons providing services
on behalf of the Corporation or any of its subsidiaries) added incentive for
high levels of performance and unusual efforts to increase the earnings of the
Corporation. The Plan seeks to accomplish this purpose by enabling specified
persons to purchase shares of the Corporation's common stock, $.001 par value,
thereby increasing their proprietary interest in the Corporation's success and
encouraging them to remain in the employ or service of the Corporation.

         2.       CERTAIN DEFINITIONS. As used in this Plan, the following words
and phrases shall have the respective meanings set forth below, unless the
context clearly indicates a contrary meaning:

                  2.1      "Board of Directors" The Board of Directors of the
Corporation.

                  2.2      "Code" The Internal Revenue Code of 1986, as amended.

                  2.3      "Committee" The Compensation Committee of the Board
of Directors which shall administer the Plan and consist of a majority of
independent directors.

                  2.4      "Fair Market Value Per Share" The fair market value
per share of the Shares as determined by the Committee in good faith. The
Committee is authorized to make its determination as to the fair market value
per share of the Shares on the following basis: (i) if the Shares are traded
only otherwise than on a securities exchange and are not quoted on the National
Association of Securities Dealers' Automated Quotation System ("NASDAQ"), but
are quoted on the bulletin board or in the "pink sheets" published by the
National Daily Quotation Bureau, the greater of (a) the average of the mean
between the average daily bid and average daily asked prices of the Shares
during the thirty (30) day period preceding the date of grant of an Option, as
quoted on the bulletin board or in the "pink sheets" published by the National
Daily Quotation Bureau, or (b) the mean between the average daily bid and
average daily asked prices of the Shares on the date of grant, as published on
the bulletin board or in such "pink sheets;" (ii) if the Shares are traded on a
securities exchange or on the NASDAQ, the greater of (a) the average of the
daily closing prices of the Shares during the ten (10) trading days preceding
the date of grant of an Option, or (b) the closing price of the Shares on the
last trading day preceding the date of grant of an Option; or (iii) if the
Shares are traded only otherwise than as described in (i) or (ii) above, or if
the Shares are not publicly traded, the value determined by the Committee in
good faith based upon the fair market value as determined by completely
independent and well qualified experts.

                  2.5      "Incentive Stock Option" An Option intended to
qualify for treatment as an incentive stock option under Code Sections 421 and
422, and designated as an Incentive Stock Option.

                  2.6      "Nonqualified Option" An Option not qualifying as an
Incentive Stock Option.

                  2.7      "Option" A stock option granted under the Plan.

                  2.8      "Optionee"  The holder of an Option.

                  2.9      "Option Agreement" The document setting forth the
terms and conditions of each Option.

                  2.10     "Shares" The shares of common stock, $.001 par value,
of the Corporation.

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                  2.11     "Subsidiary" Any corporation of which fifty percent
(50%) or more of the total combined voting power of all classes of stock of such
corporation is owned by the Corporation or another Subsidiary (as so defined).

         3.       ADMINISTRATION OF PLAN.

                  3.1      In General. This Plan shall be administered by the
Committee. Any action of the Committee with respect to administration of the
Plan shall be taken pursuant to (i) a majority vote at a meeting of the
Committee (to be documented by minutes), or (ii) the unanimous written consent
of its members.

                  3.2      Authority. Subject to the express provisions of this
Plan, the Committee shall have the authority to: (i) construe and interpret the
Plan, decide all questions and settle all controversies and disputes which may
arise in connection with the Plan and to define the terms used therein; (ii)
prescribe, amend and rescind rules and regulations relating to administration of
the Plan; (iii) determine the purchase price of the Shares covered by each
Option and the method of payment of such price, individuals to whom, and the
time or times at which, Options shall be granted and exercisable and the number
of Shares covered by each Option; (iv) determine the terms and provisions of the
respective Option Agreements (which need not be identical); (v) determine the
duration and purposes of leaves of absence which may be granted to participants
without constituting a termination of their employment for purposes of the Plan;
and (vi) make all other determinations necessary or advisable to the
administration of the Plan. Determinations of the Committee on matters referred
to in this Section 3 shall be conclusive and binding on all parties howsoever
concerned. With respect to Incentive Stock Options, the Committee shall
administer the Plan in compliance with the provisions of Code Section 422 as the
same may hereafter be amended from time to time. No member of the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any Option.

         4.       ELIGIBILITY AND PARTICIPATION.

                  4.1      In General. Only officers, employees and directors
who are also employees of the Corporation or any Subsidiary shall be eligible to
receive grants of Incentive Stock Options. Officers, employees and directors
(whether or not they are also employees) of the Corporation or any Subsidiary,
as well as consultants, independent contractors or other service providers of
the Corporation or any Subsidiary shall be eligible to receive grants of
Nonqualified Options. Within the foregoing limits, the Committee, from time to
time, shall determine and designate persons to whom Options may be granted. All
such designations shall be made in the absolute discretion of the Committee and
shall not require the approval of the stockholders. In determining (i) the
number of Shares to be covered by each Option, (ii) the purchase price for such
Shares and the method of payment of such price (subject to the other sections
hereof), (iii) the individuals of the eligible class to whom Options shall be
granted, (iv) the terms and provisions of the respective Option Agreements, and
(v) the times at which such Options shall be granted, the Committee shall take
into account such factors as it shall deem relevant in connection with
accomplishing the purpose of the Plan as set forth in Section 1. An individual
who has been granted an Option may be granted an additional Option or Options if
the Committee shall so determine. No Option shall be granted under the Plan
after February 23, 2014 but Options granted before such date may be exercisable
after such date.

                  4.2      Certain Limitations. In no event shall Incentive
Stock Options be granted to an Optionee such that the sum of (i) aggregate fair
market value (determined at the time the Incentive Stock Options are granted) of
the Shares subject to all Options granted under the Plan which are exercisable
for the first time during the same calendar year, plus (ii) the aggregate fair
market value (determined at the time the options are granted) of all stock
subject to all other incentive stock options granted to such Optionee by the
Corporation, its parent and Subsidiaries which are exercisable for the first
time during such calendar year, exceeds One Hundred Thousand Dollars ($100,000).
For purposes of the immediately preceding sentence, fair market value shall be
determined as of the date of grant based on the Fair Market Value Per Share as
determined pursuant to Section 2.3.

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                  5.       AVAILABLE SHARES AND ADJUSTMENTS UPON CHANGES IN
                  CAPITALIZATION.

                  5.1      Shares. Subject to adjustment as provided in Section
5.2 below, the total number of Shares to be subject to Options granted pursuant
to this Plan shall not exceed Two Million Four Hundred Thousand (2,400,000)
Shares. Shares subject to the Plan may be either authorized but unissued shares
or shares that were once issued and subsequently reacquired by the Corporation;
the Committee shall be empowered to take any appropriate action required to make
Shares available for Options granted under this Plan. If any Option is
surrendered before exercise or lapses without exercise in full or for any other
reason ceases to be exercisable, the Shares reserved therefore shall continue to
be available under the Plan.

                  5.2      Adjustments. As used herein, the term "Adjustment
Event" means an event pursuant to which the outstanding Shares of the
Corporation are increased, decreased or changed into, or exchanged for a
different number or kind of shares or securities, without receipt of
consideration by the Corporation, through reorganization, merger,
recapitalization, reclassification, stock split, reverse stock split, stock
dividend, stock consolidation or otherwise. Upon the occurrence of an Adjustment
Event, (i) appropriate and proportionate adjustments shall be made to the number
and kind of Shares and exercise price for the Shares subject to the Options
which may thereafter be granted under this Plan, (ii) appropriate and
proportionate adjustments shall be made to the number and kind of and exercise
price for the Shares subject to the then outstanding Options granted under this
Plan, and (iii) appropriate amendments to the Option Agreements shall be
executed by the Corporation and the Optionees if the Committee determines that
such an amendment is necessary or desirable to reflect such adjustments. If
determined by the Committee to be appropriate, in the event of an Adjustment
Event which involves the substitution of securities of a corporation other than
the Corporation, the Committee shall make arrangements for the assumptions by
such other corporation of any Options then or thereafter outstanding under the
Plan. Notwithstanding the foregoing, such adjustment in an outstanding Option
shall be made without change in the total exercise price applicable to the
unexercised portion of the Option, but with an appropriate adjustment to the
number of Shares, kind of shares and exercise price for each Share subject to
the Option. The determination by the Committee as to what adjustments,
amendments or arrangements shall be made pursuant to this Section 5.2, and the
extent thereof, shall be final and conclusive. No fractional Shares shall be
issued under the Plan on account of any such adjustment or arrangement.

         6.       TERMS AND CONDITIONS OF OPTIONS.

                  6.1      Intended Treatment as Incentive Stock Options.
Incentive Stock Options granted pursuant to this Plan are intended to be
"incentive stock options" to which Code Sections 421 and 422 apply, and the Plan
shall be construed and administered to implement that intent. If all or any part
of an Incentive Stock Option shall not be an "incentive stock option" subject to
Sections 421 or 422 of the Code, such Option shall nevertheless be valid and
carried into effect. All Options granted under this Plan shall be subject to the
terms and conditions set forth in this Section 6 (except as provided in Section
5.2) and to such other terms and conditions as the Committee shall determine to
be appropriate to accomplish the purpose of the Plan as set forth in Section 1.

                  6.2      Amount and Payment of Exercise Price.

                           6.2.1    Exercise Price. The exercise price per Share
for each Share which the Optionee is entitled to purchase under a Nonqualified
Option shall be determined by the Committee but shall not be less than
eighty-five percent (85%) of the Fair Market Value Per Share on the date of the
grant of the Nonqualified Option. The exercise price per Share for each Share
which the Optionee is entitled to purchase under an Incentive Stock Option shall
be determined by the Committee but shall not be less than the Fair Market Value
Per Share on the date of the grant of the Incentive Stock Option; provided,
however, that the exercise price shall not be less than one hundred and ten
percent (110%) of the Fair Market Value Per Share on the date of the grant of
the Incentive Stock Option in the case of an individual then owning (within the
meaning of Code Section 425(d)) more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation or of its
parent or Subsidiaries.

                           6.2.2    Payment of Exercise Price. The consideration
to be paid for the Shares to be

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issued upon exercise of an Option, including the method of payment, shall be
determined by the Committee and may consist of promissory notes, shares of the
common stock of the Corporation or such other consideration and method of
payment for the Shares as may be permitted under applicable state and federal
laws.

                  6.3      Exercise of Options.

                           6.3.1    Each Option granted under this Plan shall be
exercisable at such times and under such conditions as may be determined by the
Committee at the time of the grant of the Option and as shall be permissible
under the terms of the Plan; provided, however, in no event shall an Option be
exercisable after the expiration of ten (10) years from the date it is granted,
and in the case of an Optionee owning (within the meaning of Code Section
425(d)), at the time an Incentive Stock Option is granted, more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Corporation or of its parent or Subsidiaries, such Incentive Stock Option shall
not be exercisable later than five (5) years after the date of grant.

                           6.3.2    An Optionee may purchase less than the total
number of Shares for which the Option is exercisable, provided that a partial
exercise of an Option may not be for less than One Hundred (100) Shares and
shall not include any fractional Shares.

                  6.4      Nontransferability of Options. All Options granted
under this Plan shall be nontransferable, either voluntarily or by operation of
law, otherwise than by will or the laws of descent and distribution, and shall
be exercisable during the Optionee's lifetime only by such Optionee.

                  6.5      Effect of Termination of Employment or Other
Relationship. Except as otherwise determined by the Committee in connection with
the grant of Nonqualified Options, the effect of termination of an Optionee's
employment or other relationship with the Corporation on such Optionee's rights
to acquire Shares pursuant to the Plan shall be as follows:

                           6.5.1    Termination for Other than Disability or
Cause. If an Optionee ceases to be employed by, or ceases to have a relationship
with, the Corporation for any reason other than for disability or cause, such
Optionee's Options shall expire not later than three (3) months thereafter.
During such three (3) month period and prior to the expiration of the Option by
its terms, the Optionee may exercise any Option granted to him, but only to the
extent such Options were exercisable on the date of termination of his
employment or relationship and except as so exercised, such Options shall expire
at the end of such three (3) month period unless such Options by their terms
expire before such date. The decision as to whether a termination for a reason
other than disability, cause or death has occurred shall be made by the
Committee, whose decision shall be final and conclusive, except that employment
shall not be considered terminated in the case of sick leave or other bona fide
leave of absence approved by the Corporation.

                           6.5.2    Disability. If an Optionee ceases to be
employed by, or ceases to have a relationship with, the Corporation by reason of
disability (within the meaning of Code Section 22(e)(3)), such Optionee's
Options shall expire not later than one (1) year thereafter. During such one (1)
year period and prior to the expiration of the Option by its terms, the Optionee
may exercise any Option granted to him, but only to the extent such Options were
exercisable on the date the Optionee ceased to be employed by, or ceased to have
a relationship with, the Corporation by reason of disability and except as so
exercised, such Options shall expire at the end of such one (1) year period
unless such Options by their terms expire before such date. The decision as to
whether a termination by reason of disability has occurred shall be made by the
Committee, whose decision shall be final and conclusive.

                           6.5.3    Termination for Cause. If an Optionee's
employment by, or relationship with, the Corporation is terminated for cause,
such Optionee's Option shall expire immediately; provided, however, the
Committee may, in its sole discretion, within thirty (30) days of such
termination, waive the expiration of the Option by giving written notice of such
waiver to the Optionee at such Optionee's last known address. In the event of
such waiver, the Optionee may exercise the Option only to such extent, for such
time, and upon such terms and conditions as if such Optionee had ceased to be
employed by, or ceased to have a relationship with, the Corporation upon the
date of such termination for a reason other than disability, cause, or death.
Termination for cause shall include

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termination for malfeasance or gross misfeasance in the performance of duties or
conviction of illegal activity in connection therewith or any conduct
detrimental to the interests of the Corporation. The determination of the
Committee with respect to whether a termination for cause has occurred shall be
final and conclusive.

                  6.6      Withholding of Taxes. As a condition to the exercise,
in whole or in part, of any Options the Board of Directors may in its sole
discretion require the Optionee to pay, in addition to the purchase price of the
Shares covered by the Option an amount equal to any Federal, state or local
taxes that may be required to be withheld in connection with the exercise of
such Option.

                  6.7      No Rights to Continued Employment or Relationship.
Nothing contained in this Plan or in any Option Agreement shall obligate the
Corporation to employ or have another relationship with any Optionee for any
period or interfere in any way with the right of the Corporation to reduce such
Optionee's compensation or to terminate the employment of or relationship with
any Optionee at any time.

                  6.8      Time of Granting Options. The time an Option is
granted, sometimes referred to herein as the date of grant, shall be the day the
Corporation executes the Option Agreement; provided, however, that if
appropriate resolutions of the Committee indicate that an Option is to be
granted as of and on some prior or future date, the time such Option is granted
shall be such prior or future date.

                  6.9      Privileges of Stock Ownership. No Optionee shall be
entitled to the privileges of stock ownership as to any Shares not actually
issued and delivered to such Optionee. No Shares shall be purchased upon the
exercise of any Option unless and until, in the opinion of the Corporation's
counsel, any then applicable requirements of any laws or governmental or
regulatory agencies having jurisdiction and of any exchanges upon which the
stock of the Corporation may be listed shall have been fully complied with.

                  6.10     Securities Laws Compliance. The Corporation will
diligently endeavor to comply with all applicable securities laws before any
Options are granted under the Plan and before any Shares are issued pursuant to
Options. Without limiting the generality of the foregoing, the Corporation may
require from the Optionee such investment representation or such agreement, if
any, as counsel for the Corporation may consider necessary or advisable in order
to comply with the Securities Act of 1933 as then in effect, and may require
that the Optionee agree that any sale of the Shares will be made only in such
manner as is permitted by the Committee. The Committee in its discretion may
cause the Shares underlying the Options to be registered under the Securities
Act of 1933, as amended, by the filing of a Form S-8 Registration Statement
covering the Options and Shares underlying such Options. Optionee shall take any
action reasonably requested by the Corporation in connection with registration
or qualification of the Shares under federal or state securities laws.

                  6.11     Option Agreement. Each Incentive Stock Option and
Nonqualified Option granted under this Plan shall be evidenced by the
appropriate written Stock Option Agreement ("Option Agreement") executed by the
Corporation and the Optionee in a form substantially the same as the appropriate
form of Option Agreement attached as Exhibit I or II hereto (and made a part
hereof by this reference) and shall contain each of the provisions and
agreements specifically required to be contained therein pursuant to this
Section 6, and such other terms and conditions as are deemed desirable by the
Committee and are not inconsistent with the purpose of the Plan as set forth in
Section 1.

         7.       PLAN AMENDMENT AND TERMINATION.

                  7.1      Authority of Committee. The Committee may at any time
discontinue granting Options under the Plan or otherwise suspend, amend or
terminate the Plan and may, with the consent of an Optionee, make such
modification of the terms and conditions of such Optionee's Option as it shall
deem advisable; provided that, except as permitted under the provisions of
Section 5.2, the Committee shall have no authority to make any amendment or
modification to this Plan or any outstanding Option thereunder which would: (i)
increase the maximum number of Shares which may be purchased pursuant to Options
granted under the Plan, either in the aggregate or by an Optionee (except
pursuant to Section 5.2); (ii) change the designation of the class of the
employees eligible to receive Incentive Stock Options; (iii) extend the term of
the Plan or the maximum Option

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period thereunder; (iv) decrease the minimum Incentive Stock Option price or
permit reductions of the price at which Shares may be purchased for Incentive
Stock Options granted under the Plan; or (v) cause Incentive Stock Options
issued under the Plan to fail to meet the requirements of incentive stock
options under Code Section 422. An amendment or modification made pursuant to
the provisions of this Section 7 shall be deemed adopted as of the date of the
action of the Committee effecting such amendment or modification and shall be
effective immediately, unless otherwise provided therein, subject to approval
thereof (1) within twelve (12) months before or after the effective date by
stockholders of the Corporation holding not less than a majority vote of the
voting power of the Corporation voting in person or by proxy at a duly held
stockholders meeting when required to maintain or satisfy the requirements of
Code Section 422 with respect to Incentive Stock Options, and (2) by any
appropriate governmental agency. No Option may be granted during any suspension
or after termination of the Plan.

                  7.2      Ten (10) Year Maximum Term. Unless previously
terminated by the Committee, this Plan shall terminate on February 23, 2014 and
no Options shall be granted under the Plan thereafter.

                  7.3      Effect on Outstanding Options. Amendment, suspension
or termination of this Plan shall not, without the consent of the Optionee,
alter or impair any rights or obligations under any Option theretofore granted.

         8.       EFFECTIVE DATE OF PLAN. This Plan shall be effective as of
February 23, 2004, the date the Plan was adopted by the Board of Directors,
subject to the approval of the Plan by the affirmative vote of a majority of the
issued and outstanding Shares of common stock of the Corporation represented and
voting at a duly held meeting at which a quorum is present within twelve (12)
months thereafter. The Committee shall be authorized and empowered to make
grants of Options pursuant to this Plan prior to such approval of this Plan by
the stockholders; provided, however, in such event the Option grants shall be
made subject to the approval of both this Plan and such Option grants by the
stockholders in accordance with the provisions of this Section 8.

         9.       MISCELLANEOUS PROVISIONS.

                  9.1      Exculpation and Indemnification. The Corporation
shall indemnify and hold harmless the Committee from and against any and all
liabilities, costs and expenses incurred by such persons as a result of any act,
or omission to act, in connection with the performance of such persons' duties,
responsibilities and obligations under the Plan, other than such liabilities,
costs and expenses as may result from the gross negligence, bad faith, willful
conduct and/or criminal acts of such persons.

                  9.2      Governing Law. The Plan shall be governed and
construed in accordance with the laws of the State of Delaware and the Code.

                  9.3      Compliance with Applicable Laws. The inability of the
Corporation to obtain from any regulatory body having jurisdiction authority
deemed by the Corporation's counsel to be necessary to the lawful issuance and
sale of any Shares upon the exercise of an Option shall relieve the Corporation
of any liability in respect of the non-issuance or sale of such Shares as to
which such requisite authority shall not have been obtained.

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                                                                       EXHIBIT I

                                     FORM OF
                        INCENTIVE STOCK OPTION AGREEMENT

         THIS INCENTIVE STOCK OPTION AGREEMENT ("Agreement") is entered into as
of ______________, _____, by and between AMDL, INC., a Delaware corporation
("Corporation"), and ________________ ("Optionee").

                                 R E C I T A L S

         A.       On February 23, 2004, the Board of Directors of the
Corporation adopted, subject to the approval of the Corporation's shareholders,
the AMDL, Inc. 2004 Stock Option Plan (the "Plan").

         B.       Pursuant to the Plan, on ______________, _______, the members
of the Board of Directors of the Corporation serving on the Committee authorized
granting to Optionee options to purchase shares of the Corporation's common
stock, $.001 par value ("Shares") for the term and subject to the terms and
conditions hereinafter set forth.

                                A G R E E M E N T

It is hereby agreed as follows:

         1.       CERTAIN DEFINITIONS. Unless otherwise defined herein, or the
context otherwise clearly requires, terms with initial capital letters used
herein shall have the meanings assigned to such terms in the Plan.

         2.       GRANT OF OPTIONS. The Corporation hereby grants to Optionee,
Options to purchase all or any part of _______________ (__________) Shares, upon
and subject to the terms and conditions of the Plan, which is incorporated in
full herein by this reference, and upon the other terms and conditions set forth
herein.

         3.       OPTION PERIOD. The Options shall be exercisable at any time
during the period commencing on the date hereof (subject to the provisions of
Section 17) and expiring on ____________, ______, unless earlier terminated
pursuant to Section 7.

         4.       METHOD OF EXERCISE. The Options shall be exercisable by
Optionee by giving written notice to the Corporation of the election to purchase
and of the number of Shares Optionee elects to purchase, such notice to be
accompanied by such other executed instruments or documents as may be required
by the Committee pursuant to this Agreement, and unless otherwise directed by
the Committee, Optionee shall at the time of such exercise tender the purchase
price of the Shares he has elected to purchase. An Optionee may purchase less
than the total number of Shares for which the Option is exercisable, provided
that a partial exercise of an Option may not be for less than one hundred (100)
Shares. If Optionee shall not purchase all of the Shares which he is entitled to
purchase under the Options, his right to purchase the remaining unpurchased
Shares shall continue until expiration of the Options. The Options shall be
exercisable with respect of whole Shares only, and fractional Share interests
shall be disregarded.

         5.       AMOUNT OF PURCHASE PRICE. The purchase price per Share for
each Share which Optionee is entitled to purchase under the Options shall be
$_____ per Share.

         6.       PAYMENT OF PURCHASE PRICE. At the time of Optionee's notice of
exercise of the Options, Optionee shall tender in cash or by certified or bank
cashier's check payable to the Corporation, the purchase price for all Shares
then being purchased. Provided, however, the Board of Directors may, in its sole
discretion, permit payment by the Corporation of the purchase price in whole or
in part with Shares. If the Optionee is so permitted, and the Optionee elects to
make payment with Shares, the Optionee shall deliver to the Corporation
certificates representing the number of Shares in payment for new Shares, duly
endorsed for transfer to the Corporation, together with any written
representations relating to title, liens and encumbrances, securities laws,
rules and regulatory compliance, or other matters, reasonably requested by the
Board of Directors. The value of Shares so tendered shall be their Fair Market

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Value Per Share on the date of the Optionee's notice of exercise.

         7.       EFFECT OF TERMINATION OF EMPLOYMENT. If an Optionee's
employment or other relationship with the Corporation (or a Subsidiary)
terminates, the effect of the termination on the Optionee's rights to acquire
Shares shall be as follows:

                  7.1      Termination For Other Than Disability Or Cause. If an
Optionee ceases to be employed by, or ceases to have a relationship with, the
Corporation or a Subsidiary for any reason other than for disability or cause,
such Optionee's Options shall expire not later than three (3) months thereafter.
During such three (3) month period and prior to the expiration of the Option by
its terms, the Optionee may exercise any Option granted to him, but only to the
extent such Options were exercisable on the date of termination of his
employment or relationship and except as so exercised, such Options shall expire
at the end of such three (3) month period unless such Options by their terms
expire before such date. The decision as to whether a termination for a reason
other than disability, cause or death has occurred shall be made by the
Committee, whose decision shall be final and conclusive, except that employment
shall not be considered terminated in the case of sick leave or other bona fide
leave of absence approved by the Corporation.

                  7.2      Disability. If an Optionee ceases to be employed by,
or ceases to have a relationship with, the Corporation or a Subsidiary by reason
of disability (within the meaning of Code Section 22(e)(3)), such Optionee's
Options shall expire not later than one (1) year thereafter. During such one (1)
year period and prior to the expiration of the Option by its terms, the Optionee
may exercise any Option granted to him, but only to the extent such Options were
exercisable on the date the Optionee ceased to be employed by, or ceased to have
a relationship with, the Corporation or Subsidiary by reason of disability. The
decision as to whether a termination by reason of disability has occurred shall
be made by the Committee, whose decision shall be final and conclusive.

                  7.3      Termination For Cause. If an Optionee's employment
by, or relationship with, the Corporation or a Subsidiary is terminated for
cause, such Optionee's Option shall expire immediately; provided, however, the
Committee may, in its sole discretion, within thirty (30) days of such
termination, waive the expiration of the Option by giving written notice of such
waiver to the Optionee at such Optionee's last known address. In the event of
such waiver, the Optionee may exercise the Option only to such extent, for such
time, and upon such terms and conditions as if such Optionee had ceased to be
employed by, or ceased to have a relationship with, the Corporation or a
Subsidiary upon the date of such termination for a reason other than disability,
cause or death. Termination for cause shall include termination for malfeasance
or gross misfeasance in the performance of duties or conviction of illegal
activity in connection therewith or any conduct detrimental to the interests of
the Corporation or a Subsidiary. The determination of the Committee with respect
to whether a termination for cause has occurred shall be final and conclusive.

         8.       NONTRANSFERABILITY OF OPTIONS. The Options shall not be
transferable, either voluntarily or by operation of law, otherwise than by will
or the laws of descent and distribution and shall be exercisable during the
Optionee's lifetime only by Optionee.

         9.       ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. As used herein,
the term "Adjustment Event" means an event pursuant to which the outstanding
Shares of the Corporation are increased, decreased or changed into, or exchanged
for a different number or kind of shares or securities, without receipt of
consideration by the Corporation, through reorganization, merger,
recapitalization, reclassification, stock split, reverse stock split, stock
dividend, stock consolidation or otherwise. Upon the occurrence of an Adjustment
Event, (i) appropriate and proportionate adjustments shall be made to the number
and kind and exercise price for the Shares subject to the Options, and (ii)
appropriate amendments to this Agreement shall be executed by the Corporation
and Optionee if the Committee determines that such an amendment is necessary or
desirable to reflect such adjustments. If determined by the Committee to be
appropriate, in the event of an Adjustment Event which involves the substitution
of securities of a corporation other than the Corporation, the Committee shall
make arrangements for the assumptions by such other corporation of the Options.
Notwithstanding the foregoing, any such adjustment to the Options shall be made
without change in the total exercise price applicable to the unexercised portion
of the Options, but with an appropriate adjustment to the number of Shares, kind
of Shares and exercise price for each Share subject to the Options. The
determination by the Committee as to what adjustments, amendments or
arrangements shall be made pursuant to this Section 9, and the extent thereof,
shall be final and conclusive. No fractional Shares shall be issued on account
of any such adjustment or arrangement.

                                      I-2
<PAGE>

         10.      NO RIGHTS TO CONTINUED EMPLOYMENT OR RELATIONSHIP. Nothing
contained in this Agreement shall obligate the Corporation to employ or have
another relationship with Optionee for any period or interfere in any way with
the right of the Corporation to reduce Optionee's compensation or to terminate
the employment of or relationship with Optionee at any time.

         11.      TIME OF GRANTING OPTIONS. The time the Options shall be deemed
granted, sometimes referred to herein as the "date of grant," shall be
_______________, ______.

         12.      PRIVILEGES OF STOCK OWNERSHIP. Optionee shall not be entitled
to the privileges of stock ownership as to any Shares not actually issued and
delivered to Optionee. No Shares shall be purchased upon the exercise of any
Options unless and until, in the opinion of the Corporation's counsel, any then
applicable requirements of any laws, or governmental or regulatory agencies
having jurisdiction, and of any exchanges upon which the stock of the
Corporation may be listed shall have been fully complied with.

         13.      SECURITIES LAWS COMPLIANCE. The Corporation will diligently
endeavor to comply with all applicable securities laws before any Shares are
issued pursuant to the Options. Without limiting the generality of the
foregoing, the Corporation may require from the Optionee such investment
representation or such agreement, if any, as counsel for the Corporation may
consider necessary in order to comply with the Securities Act of 1933 as then in
effect, and may require that the Optionee agree that any sale of the Shares will
be made only in such manner as is permitted by the Committee. The Committee may
in its discretion cause the Shares underlying the Options to be registered under
the Securities Act of 1933, as amended, by filing a Form S-8 Registration
Statement covering the Options and the Shares underlying the Options. Optionee
shall take any action reasonably requested by the Corporation in connection with
registration or qualification of the Shares under federal or state securities
laws.

         14.      INTENDED TREATMENT AS INCENTIVE STOCK OPTIONS. The Options
granted herein are intended to be "incentive stock options" to which Sections
421 and 422 of the Internal Revenue Code of 1986, as amended from time to time
("Code") apply, and shall be construed to implement that intent. If all or any
part of the Options shall not be subject to Sections 421 and 422 of the Code,
the Options shall nevertheless be valid and carried into effect.

         15.      PLAN CONTROLS. The Options shall be subject to and governed by
the provisions of the Plan. All determinations and interpretations of the Plan
made by the Committee shall be final and conclusive.

         16.      SHARES SUBJECT TO LEGEND. If deemed necessary by the
Corporation's counsel, all certificates issued to represent Shares purchased
upon exercise of the Options shall bear such appropriate legend conditions as
counsel for the Corporation shall require.

         17.      CONDITIONS TO OPTIONS.

                  17.1     Compliance with Applicable Laws. The Corporation's
obligation to issue Shares of its common stock upon exercise of the Options is
expressly conditioned upon the completion by the Corporation of any registration
or other qualification of such Shares under any state and/or Federal law or
rulings or regulations of any governmental regulatory body, or the making of
such investment representations or other representations and undertakings by the
Optionee or any person entitled to exercise the Option in order to comply with
the requirements of any exemption from any such registration or other
qualification of such Shares which the Committee shall, in its sole discretion,
deem necessary or advisable. Such required representations and undertakings may
include representations and agreements that the Optionee or any person entitled
to exercise the Option (i) is not purchasing such Shares for distribution and
(ii) agrees to have placed upon the face and reverse of any certificates a
legend setting forth any representations and undertakings which have been given
to the Committee or a reference thereto.

                  17.2     Shareholder Approval of Plan. If the Options granted
hereby are granted prior to approval of the Plan by the shareholders of the
Corporation pursuant to Section 8 of the Plan, the grant of the Options made
hereby is expressly conditioned upon and such Options shall not be exercisable
until the approval of the Plan by the shareholders of the Corporation in
accordance with the provisions of Section 8 of the Plan.

                                      I-3
<PAGE>

                  17.3     Maximum Exercise Period. Notwithstanding any
provision of this Agreement to the contrary, the Options shall expire no later
than ten (10) years from the date hereof or five (5) years if, as of the date
hereof, the Optionee owns or is considered to own by reason of Code Section
425(d) more than ten percent (10%) of the total combined voting power of all
classes of stock of the Corporation or any Subsidiary or parent corporation of
the Corporation.

         18.      MISCELLANEOUS.

                  18.1     Binding Effect. This Agreement shall bind and inure
to the benefit of the successors, assigns, transferees, agents, personal
representatives, heirs and legatees of the respective parties.

                  18.2     Further Acts. Each party agrees to perform any
further acts and execute and deliver any documents which may be necessary to
carry out the provisions of this Agreement.

                  18.3     Amendment. This Agreement may be amended at any time
by the written agreement of the Corporation and the Optionee.

                  18.4     Syntax. Throughout this Agreement, whenever the
context so requires, the singular shall include the plural, and the masculine
gender shall include the feminine and neuter genders. The headings and captions
of the various Sections hereof are for convenience only and they shall not
limit, expand or otherwise affect the construction or interpretation of this
Agreement.

                  18.5     Choice of Law. The parties hereby agree that this
Agreement has been executed and delivered in the State of California and shall
be construed, enforced and governed by the laws thereof. This Agreement is in
all respects intended by each party hereto to be deemed and construed to have
been jointly prepared by the parties and the parties hereby expressly agree that
any uncertainty or ambiguity existing herein shall not be interpreted against
either of them.

                  18.6     Severability. In the event that any provision of this
Agreement shall be held invalid or unenforceable, such provision shall be
severable from, and such invalidity or unenforceability shall not be construed
to have any effect on, the remaining provisions of this Agreement.

                  18.7     Notices. All notices and demands between the parties
hereto shall be in writing and shall be served either by registered or certified
mail, and such notices or demands shall be deemed given and made forty-eight
(48) hours after the deposit thereof in the United States mail, postage prepaid,
addressed to the party to whom such notice or demand is to be given or made, and
the issuance of the registered receipt therefor. If served by telegraph, such
notice or demand shall be deemed given and made at the time the telegraph agency
shall confirm to the sender, delivery thereof to the addressee. All notices and
demands to Optionee or the Corporation may be given to them at the following
addresses:

If to Optionee:

If to Corporation:           AMDL, Inc.
                                    2492 Walnut Avenue, Suite 100
                                    Tustin, California  92780

Such parties may designate in writing from time to time such other place or
places that such notices and demands may be given.

                  18.8     Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto pertaining to the subject matter
hereof, this Agreement supersedes all prior and contemporaneous agreements and
understandings of the parties, and there are no warranties, representations or
other agreements between the parties in connection with the subject matter
hereof except as set forth or referred to herein. No supplement, modification or
waiver or termination of this Agreement shall be binding unless executed in
writing by the party to be bound thereby.

                                      I-4
<PAGE>

No waiver of any of the provisions of this Agreement shall constitute a waiver
of any other provision hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

                  18.9     Attorneys' Fees. In the event that any party to this
Agreement institutes any action or proceeding, including, but not limited to,
litigation or arbitration, to preserve, to protect or to enforce any right or
benefit created by or granted under this Agreement, the prevailing party in each
respective such action or proceeding shall be entitled, in addition to any and
all other relief granted by a court or other tribunal or body, as may be
appropriate, to an award in such action or proceeding of that sum of money which
represents the attorneys' fees reasonably incurred by the prevailing party
therein in filing or otherwise instituting and in prosecuting or otherwise
pursuing or defending such action or proceeding, and, additionally, the
attorneys' fees reasonably incurred by such prevailing party in negotiating any
and all matters underlying such action or proceeding and in preparation for
instituting or defending such action or proceeding.

         IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date first set forth above.

                                  "CORPORATION"

                                   AMDL, INC.,
                                   a Delaware corporation

                                   By:__________________________________________

                                           Gary L. Dreher, President

                                   "OPTIONEE"

                                   _____________________________________________
                                   [INSERT NAME]

                                      I-5
<PAGE>

                                                                      EXHIBIT II

                                     FORM OF
                      NON-QUALIFIED STOCK OPTION AGREEMENT

         THIS NON-QUALIFIED STOCK OPTION AGREEMENT ("Agreement") is entered into
as of _______________, ______, by and between AMDL, INC., a Delaware corporation
("Corporation"), and ___________________ ("Optionee").

                                 R E C I T A L S

         A.       On February 23, 2004, the Board of Directors of the
Corporation adopted, subject to the approval of the Corporation's shareholders,
the AMDL, Inc. 2004 Stock Option Plan (the "Plan").

         B.       Pursuant to the Plan, on ____________, ________, the members
of the Board of Directors of the Corporation serving on the Committee authorized
granting to Optionee options to purchase shares of the common stock, $.001 par
value, of the Corporation ("Shares") for the term and subject to the terms and
conditions hereinafter set forth.

                                A G R E E M E N T

         It is hereby agreed as follows:

         1.       CERTAIN DEFINITIONS. Unless otherwise defined herein, or the
context otherwise clearly requires, terms with initial capital letters used
herein shall have the meanings assigned to such terms in the Plan.

         2.       GRANT OF OPTIONS. The Corporation hereby grants to Optionee,
Options to purchase all or any part of _______________ (_________) Shares, upon
and subject to the terms and conditions of the Plan, which is incorporated in
full herein by this reference, and upon the other terms and conditions set forth
herein.

         3.       OPTION PERIOD. The Options shall be exercisable at any time
during the period commencing on the date hereof (subject to the provisions of
Section 17) and expiring on _____________, _______, unless earlier terminated
pursuant to Section 7.

         4.       METHOD OF EXERCISE. The Options shall be exercisable by
Optionee by giving written notice to the Corporation of the election to purchase
and of the number of Shares Optionee elects to purchase, such notice to be
accompanied by such other executed instruments or documents as may be required
by the Committee pursuant to this Agreement, and unless otherwise directed by
the Committee, Optionee shall at the time of such exercise tender the purchase
price of the Shares he has elected to purchase. An Optionee may purchase less
than the total number of Shares for which the Option is exercisable, provided
that a partial exercise of an Option may not be for less than one hundred (100)
Shares. If Optionee shall not purchase all of the Shares which he is entitled to
purchase under the Options, his right to purchase the remaining unpurchased
Shares shall continue until expiration of the Options. The Options shall be
exercisable with respect of whole Shares only, and fractional Share interests
shall be disregarded.

         5.       AMOUNT OF PURCHASE PRICE. The purchase price per Share for
each Share which Optionee is entitled to purchase under the Options shall be
$_____ per Share.

         6.       PAYMENT OF PURCHASE PRICE. At the time of Optionee's notice of
exercise of the Options, Optionee shall tender in cash or by certified or bank
cashier's check payable to the Corporation, the purchase price for all Shares
then being purchased. Provided, however, the Board of Directors may, in its sole
discretion, permit payment by the Corporation of the purchase price in whole or
in part with Shares. If the Optionee is so permitted, and the Optionee elects to
make payment with Shares, the Optionee shall deliver to the Corporation
certificates representing the number of Shares in payment for new Shares, duly
endorsed for transfer to the Corporation, together with any written
representations relating to title, liens and encumbrances, securities laws,
rules and regulatory compliance, or other matters, reasonably requested by the
Board of Directors. The value of Shares so tendered shall be their Fair Market
Value Per Share on the date of the Optionee's notice of exercise.

                                      II-1
<PAGE>

         7.       EFFECT OF TERMINATION OF RELATIONSHIP OR DEATH. If Optionee's
relationship with the Corporation as [AN EMPLOYEE] [A CONSULTANT] [A DIRECTOR]
terminates (whether voluntarily or involuntarily because he is not re-elected by
the shareholders), or if Optionee dies, all Options which have previously vested
shall expire six (6) months thereafter. All unvested Options shall lapse and
automatically expire. During such six (6) month period (or such shorter period
prior to the expiration of the Option by its own terms), such Options may be
exercised by the Optionee, his executor or administrator or the person or
persons to whom the Option is transferred by will or the applicable laws of
descent and distribution, as the case may be, but only to the extent such
Options were exercisable on the date Optionee ceased to have a relationship with
the Corporation as a director or died.

         8.       NONTRANSFERABILITY OF OPTIONS. The Options shall not be
transferable, either voluntarily or by operation of law, otherwise than by will
or the laws of descent and distribution and shall be exercisable during the
Optionee's lifetime only by Optionee.

         9.       ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. As used herein,
the term "Adjustment Event" means an event pursuant to which the outstanding
Shares of the Corporation are increased, decreased or changed into, or exchanged
for a different number or kind of shares or securities, without receipt of
consideration by the Corporation, through reorganization, merger,
recapitalization, reclassification, stock split, reverse stock split, stock
dividend, stock consolidation or otherwise. Upon the occurrence of an Adjustment
Event, (i) appropriate and proportionate adjustments shall be made to the number
and kind and exercise price for the Shares subject to the Options, and (ii)
appropriate amendments to this Agreement shall be executed by the Corporation
and Optionee if the Committee determines that such an amendment is necessary or
desirable to reflect such adjustments. If determined by the Committee to be
appropriate, in the event of an Adjustment Event which involves the substitution
of securities of a corporation other than the Corporation, the Committee shall
make arrangements for the assumptions by such other corporation of the Options.
Notwithstanding the foregoing, any such adjustment to the Options shall be made
without change in the total exercise price applicable to the unexercised portion
of the Options, but with an appropriate adjustment to the number of Shares, kind
of Shares and exercise price for each Share subject to the Options. The
determination by the Committee as to what adjustments, amendments or
arrangements shall be made pursuant to this Section 9, and the extent thereof,
shall be final and conclusive. No fractional Shares shall be issued on account
of any such adjustment or arrangement.

         10.      NO RIGHTS TO CONTINUED EMPLOYMENT OR RELATIONSHIP. Nothing
contained in this Agreement shall obligate the Corporation to employ or have
another relationship with Optionee for any period or interfere in any way with
the right of the Corporation to reduce Optionee's compensation or to terminate
the employment of or relationship with Optionee at any time.

         11.      TIME OF GRANTING OPTIONS. The time the Options shall be deemed
granted, sometimes referred to herein as the "date of grant," shall be
_______________, ______.

         12.      PRIVILEGES OF STOCK OWNERSHIP. Optionee shall not be entitled
to the privileges of stock ownership as to any Shares not actually issued and
delivered to Optionee. No Shares shall be purchased upon the exercise of any
Options unless and until, in the opinion of the Corporation's counsel, any then
applicable requirements of any laws, or governmental or regulatory agencies
having jurisdiction, and of any exchanges upon which the stock of the
Corporation may be listed shall have been fully complied with.

         13.      SECURITIES LAWS COMPLIANCE. The Corporation will diligently
endeavor to comply with all applicable securities laws before any stock is
issued pursuant to the Options. Without limiting the generality of the
foregoing, the Corporation may require from the Optionee such investment
representation or such agreement, if any, as counsel for the Corporation may
consider necessary in order to comply with the Securities Act of 1933 as then in
effect, and may require that the Optionee agree that any sale of the Shares will
be made only in such manner as is permitted by the Committee. The Committee may
in its discretion cause the Shares underlying the Options to be registered under
the Securities Act of 1933, as amended, by filing a Form S-8 Registration
Statement covering the Options and the Shares underlying the Options. Optionee
shall take any action reasonably requested by the Corporation in connection with
registration or qualification of the Shares under federal or state securities
laws.

         14.      INTENDED TREATMENT AS NON-QUALIFIED STOCK OPTIONS. The Options
granted herein are intended to be non-qualified stock options described in U.S.
Treasury Regulation ("Treas. Reg.") Section 1.83-7 to which Sections 421 and 422
of the Internal Revenue Code of 1986, as amended from time to time ("Code") do
not apply, and shall be construed to implement that intent. If all or any part
of the Options shall not be described in Treas. Reg. Section 1.83-7 or be
subject to Sections 421 and 422 of the Code, the Options shall nevertheless be
valid and carried into effect.

                                      II-2
<PAGE>

         15.      PLAN CONTROLS. The Options shall be subject to and governed by
the provisions of the Plan. All determinations and interpretations of the Plan
made by the Committee shall be final and conclusive.

         16.      SHARES SUBJECT TO LEGEND. If deemed necessary by the
Corporation's counsel, all certificates issued to represent Shares purchased
upon exercise of the Options shall bear such appropriate legend conditions as
counsel for the Corporation shall require.

         17.      CONDITIONS TO OPTIONS.

                  17.1     Compliance with Applicable Laws. The Corporation's
obligation to issue Shares upon exercise of the Options is expressly conditioned
upon the completion by the Corporation of any registration or other
qualification of such Shares under any state and/or Federal law or rulings or
regulations of any governmental regulatory body, or the making of such
investment representations or other representations and undertakings by the
Optionee or any person entitled to exercise the Option in order to comply with
the requirements of any exemption from any such registration or other
qualification of such Shares which the Committee shall, in its sole discretion,
deem necessary or advisable. Such required representations and undertakings may
include representations and agreements that the Optionee or any person entitled
to exercise the Option (i) is not purchasing such Shares for distribution and
(ii) agrees to have placed upon the face and reverse of any certificates a
legend setting forth any representations and undertakings which have been given
to the Committee or a reference thereto.

                  17.2     Shareholder Approval of Plan. If the Options granted
hereby are granted prior to approval of the Plan by the shareholders of the
Corporation pursuant to Section 8 of the Plan, the grant of the Options made
hereby is expressly conditioned upon and such Options shall not be exercisable
until the approval of the Plan by the shareholders of the Corporation in
accordance with the provisions of Section 8 of the Plan.

         18.      MISCELLANEOUS.

                  18.1     Binding Effect. This Agreement shall bind and inure
to the benefit of the successors, assigns, transferees, agents, personal
representatives, heirs and legatees of the respective parties.

                  18.2     Further Acts. Each party agrees to perform any
further acts and execute and deliver any documents which may be necessary to
carry out the provisions of this Agreement.

                  18.3     Amendment. This Agreement may be amended at any time
by the written agreement of the Corporation and the Optionee.

                  18.4     Syntax. Throughout this Agreement, whenever the
context so requires, the singular shall include the plural, and the masculine
gender shall include the feminine and neuter genders. The headings and captions
of the various Sections hereof are for convenience only and they shall not
limit, expand or otherwise affect the construction or interpretation of this
Agreement.

                  18.5     Choice of Law. The parties hereby agree that this
Agreement has been executed and delivered in the State of California and shall
be construed, enforced and governed by the laws thereof. This Agreement is in
all respects intended by each party hereto to be deemed and construed to have
been jointly prepared by the parties and the parties hereby expressly agree that
any uncertainty or ambiguity existing herein shall not be interpreted against
either of them.

                  18.6     Severability. In the event that any provision of this
Agreement shall be held invalid or unenforceable, such provision shall be
severable from, and such invalidity or unenforceability shall not be construed
to have any effect on, the remaining provisions of this Agreement.

                  18.7     Notices. All notices and demands between the parties
hereto shall be in writing and shall be served either by registered or certified
mail, and such notices or demands shall be deemed given and made forty-eight
(48) hours after the deposit thereof in the United States mail, postage prepaid,
addressed to the party to whom such notice or demand is to be given or made, and
the issuance of the registered receipt therefor. If served by telegraph, such
notice or demand shall be deemed given and made at the time the telegraph agency
shall confirm to the sender, delivery thereof to the addressee. All notices and
demands to Optionee or the Corporation may be given to them at the following
addresses:

         If to Optionee:

                                      II-3
<PAGE>

         If to Corporation: AMDL, Inc.
                                    2492 Walnut Avenue, Suite 100
                                    Tustin, California 92780

Such parties may designate in writing from time to time such other place or
places that such notices and demands may be given.

                  18.8     Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto pertaining to the subject matter
hereof, this Agreement supersedes all prior and contemporaneous agreements and
understandings of the parties, and there are no warranties, representations or
other agreements between the parties in connection with the subject matter
hereof except as set forth or referred to herein. No supplement, modification or
waiver or termination of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any of the provisions of
this Agreement shall constitute a waiver of any other provision hereof (whether
or not similar) nor shall such waiver constitute a continuing waiver.

                  18.9     Attorneys' Fees. In the event that any party to this
Agreement institutes any action or proceeding, including, but not limited to,
litigation or arbitration, to preserve, to protect or to enforce any right or
benefit created by or granted under this Agreement, the prevailing party in each
respective such action or proceeding shall be entitled, in addition to any and
all other relief granted by a court or other tribunal or body, as may be
appropriate, to an award in such action or proceeding of that sum of money which
represents the attorneys' fees reasonably incurred by the prevailing party
therein in filing or otherwise instituting and in prosecuting or otherwise
pursuing or defending such action or proceeding, and, additionally, the
attorneys' fees reasonably incurred by such prevailing party in negotiating any
and all matters underlying such action or proceeding and in preparation for
instituting or defending such action or proceeding.

         IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date first set forth above.

                             "CORPORATION"

                             AMDL, INC.,
                             a Delaware corporation

                             By: ______________________________________________

                                     Gary L. Dreher, President

                             "OPTIONEE"

                             __________________________________________________
                             [INSERT NAME]

                                      II-4<PAGE>
                                                                 EXHIBIT 10.41

               AMENDMENT NO. 2 TO SENIOR SECURED PROMISSORY NOTE

      Reference is made to the Senior Secured Promissory Note in the principal
amount of $9,750,000, dated November 15, 2001 as amended to a new principal
amount of $9,500,000 by Amendment No. 1, dated November 25, 2002 (as amended,
the "Note"), made by Women First HealthCare, Inc. ("WFHC") in favor of Wyeth
(as successor to American Home Products Corporation) ("Wyeth").

      WHEREAS, the parties desire to amend further certain terms of the Note in
accordance with the terms hereof (this "Amendment").

      NOW THEREFORE, for good and valuable consideration which is hereby
acknowledged.

      1.    Wyeth represents that it is the current holder of the Note and that
            is has not transferred or otherwise assigned its interest therein to
            any third party.

      2.    Paragraph 1(a) of the Note shall be deleted in its entirety and
            replaced by the following language:

            (a) Interest. Commencing on November 28, 2003, interest shall accrue
            at the rate of twelve percent (12%) per annum, compounded quarterly
            (computed on the basis of a year of 360 days of actual days elapsed)
            on the sum of one million six hundred twenty five thousand dollars
            ($1,625,000) and shall be paid in full and interest accrual shall
            terminate concurrently with the payment due on May 28, 2004.

      3.    Paragraph 1(b) of the Note shall be deleted in its entirety and
            replaced by the following language:

            (b) Manner of Payment. On November 29, 2002, November 28, 2003, May
            28, 2004 and November 30, 2004 (each a "Principal Payment Date"),
            Maker shall pay Payee in cash in immediately available funds, the
            sum of three million dollars ($3,000,000) on November 29, 2002, the
            sum of one million six hundred twenty five thousand dollars
            ($1,625,000) on each of November 28, 2003 and May 28, 2004 and the
            sum of three million two hundred fifty thousand dollars ($3,250,000)
            on November 30, 2004, which shall in each case reduce the principal
            amount of this Note by such amount, plus interest in accordance with
            Paragraph 1(a). The Maker shall make any payment hereunder by wire
            transfer in immediately available funds to a bank account of the
            Payee set forth on Annex A or otherwise designated by the Payee in
            writing to the Maker.

      4.    Wyeth covenants and agrees that it shall append this Amendment to
            the Note and it will be deemed to be a part thereof.
<PAGE>
                                       2

     5.   Except for the matters set forth in this Amendment, all other terms of
          the Note shall remain unchanged and in full force and effect.

          IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of November 25, 2003.

                    WOMEN FIRST HEALTHCARE, INC.

                    By:    /s/ Edward F. Calesa
                           -------------------------------------
                    Name:  Edward F. Calesa
                    Title: Chairman, Chief Executive Officer and
                           President

                    WYETH (as successor to American Home Products Corporation)
                    Acting through its Wyeth Pharmaceuticals Division

                    By:    /s/ Jeffrey S. Sherman
                           -------------------------------------
                    Name:  Jeffrey S. Sherman
                    Title: Vice President and
                           Associate General Counsel

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