Document:

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                                                                   EXHIBIT 10.14

                         NORTHWEST BIOTHERAPEUTICS, INC.

                            CLINICAL TRIAL AGREEMENT

        This Clinical Trial Agreement (the "Agreement"), is made as of the 16th
day of December, 1999, (the "Effective Date") by and between Northwest
Biotherapeutics, Inc., a Delaware corporation (the "Sponsor"), and The
University of Texas, M.D. Anderson Cancer Center, a nonprofit educational and
healthcare facility having corporate powers under the laws of the State of Texas
(hereinafter the "Institution"), a component of The University of Texas System
(hereinafter the "System.")

                                    RECITALS

        The Sponsor desires to test its therapy of autologous recombinant
prostate specific membrane antigen loaded dendritic cells (the "Product") for
metastatic, hormone refractory prostate cancer in a clinical setting. The
Institution seeks the advancement of health care through research and clinical
investigation, and as such is willing to permit testing of the Product in
accordance with the terms of this Agreement.

                                    AGREEMENT

        In consideration of the foregoing and of the mutual promises contained
in this Agreement, the parties agree as follows:

        1. STATEMENT OF WORK. The Institution agrees to conduct a clinical study
of the Product in accordance with study protocol No. DC1-HRPC attached hereto as
Exhibit A (the "Study"). In the event of any conflict between Exhibit A and the
provisions of this Agreement, the provisions of this Agreement shall govern.

        2. PRINCIPAL INVESTIGATOR. The Study will be conducted under the direct
supervision of Christos Papandreou, M.D., Ph.D., Study Chairman (hereinafter the
"Principal Investigator") with the participation of other Institution clinical
and research personnel to be identified or approved by Sponsor. The Institution
agrees to conduct the Study in strict accordance with the protocol and all
applicable federal, state, and local laws and regulations. If Principal
Investigator becomes permanently unavailable, for any reason, the Sponsor may,
at its sole discretion, appoint another Principal Investigator or terminate this
Agreement.

        3. IRB APPROVAL. The Institution's obligations to conduct the Study are
expressly conditional upon the approval of its Investigational Review Board,
which the parties and the Principal Investigator will cooperate to obtain. The
implementation of DC1-HRPC at the Institution is embodied in the IRB approved
Institutional Protocol ID99-333 attached hereto as Exhibit B. The Sponsor and
the Study Chair will closely coordinate to insure the FDA approved IND protocol
governing this trial (DC1-HRPC as approved by the FDA as described in the
"Investigator's Brochure," section V of the IND) and the ID99-333 protocol are
executed, maintained and amended in accordance with applicable Federal, State
and Institutional Regulations.

                                                                    CONFIDENTIAL
                                       -1-       NORTHWEST BIOTHERAPEUTICS, INC.
<PAGE>   2

        4.     REPORTS AND CONFERENCES.

               A. The Principal Investigator will make informal verbal reports
to the Sponsor (or the Sponsor's representatives) at least monthly, and will
meet with the Sponsor's representatives upon reasonable request at the
Institution's facilities to discuss the progress of the Study. A final written
report shall be submitted to the Sponsor within thirty (30) days after
completion of, or any premature termination of, the Study and, if requested, the
Principal investigator shall assist the Sponsor in interpreting such report.
Copies of all clinical data, including copies of case report forms,
questionnaires, other records identified in the Protocol and other relevant
information generated during the Study will be promptly and fully provided to
the Sponsor (or the Sponsor's representative), and shall be freely usable by the
Sponsor consistent with good business judgment.

               B. The Institution agrees to notify the Sponsor within
twenty-four (24) hours after learning of any serious and/or unexpected adverse
Product reaction affecting any patient in the Study. The Institution further
agrees to follow up such notification of adverse Product reaction with
appropriate reports in compliance with the Protocol and all applicable legal and
regulatory requirements.

               C. The Institution agrees to notify the Sponsor within
twenty-four hours in the event that the FDA or any other regulatory authority
notifies the Institution of a pending inspection/audit. In addition, the
Principal Investigator will forward to the Sponsor any written communication
related to the use of the Sponsor's Product received as a result of the
inspection/audit within twenty-four (24) hours of receipt of such communication
and will allow the Sponsor to assist in responding to any citations. Such
responses shall be made within two (2) weeks of issuance of any citations or
within any earlier deadline set by the issuing regulatory authority. The
Principal Investigator shall also provide to the Sponsor copies of any documents
provided to any inspector or auditor. In the event of the FDA or other
regulatory authority requests or requires any action to be taken to address any
citations, the Institution agrees, following consultation with the Sponsor, to
take such action as necessary to address such citations, and agree to cooperate
with the Sponsor with respect to any such citation and/or action taken.

        5. PAYMENTS. The Sponsor will pay, to the Institution, as the
Institution's total compensation under this Agreement, the amounts and in
accordance with the schedule set forth in Exhibit C attached hereto.

        6. PUBLICITY. Neither party shall use the name of the other party,
including any trademark, trade name, or any contraction, abbreviation,
simulation, or adaptation thereof of the other party, or the name of the party's
employees, in any publicity, advertising or news release without the prior
written approval of an authorized officer of the other party.

        7. CONFIDENTIAL INFORMATION. During the performance of the Study and
during the term of this Agreement, the Institution or the Principal Investigator
may receive confidential or trade secret information, including information
concerning the Sponsor's present and future business, marketing plans,
regulatory submissions, product fines, product plans, date testing and research
techniques, inventions, processes, practices, trade secrets, and like
information

                                      -2-
<PAGE>   3

(collectively, "Confidential Information") from the Sponsor. The Institution
agrees to hold in confidence all such Confidential Information and not to
disclose or make such Confidential information available to any third parties
without the Sponsor's written permission, for a period of five (5) years from
the termination of this Agreement. This obligation will apply only to
information which the Sponsor has designated in writing as "confidential" and
will not apply to any such information which:

               (i) was known to the Institution prior to its receipt from the
Sponsor, as evidenced by written documentation;

               (ii) was or becomes a matter of public information or publicly
available through no fault on the part of the Institution.

               (iii) is acquired from a third party entitled to disclose the
information to the Institution; or

               (iv) was developed independently by the Institution, as evidenced
by written documentation.

               (v) is required by law or regulation to be disclosed. In the
event that information is required to be disclosed pursuant to subsection v, the
party required to make disclosure shall notify the other to allow that party to
assert whatever exclusions or exemptions may be available to it under such law
or regulation.

        8. PUBLICATION RIGHTS. The Sponsor acknowledges that the Institution is
dedicated to free scholarly exchange and to public dissemination of the results
of their scholarly activities. The Principal Investigator and the Institution
shall retain the right to publish research results in pursuit of educational and
scientific purposes. However, the Institution expressly agrees that all drafts
of any publications or oral presentations, including without limitation
manuscripts, abstracts, posters, and visual works based on the Study or any
results of the Study shall be submitted to the Sponsor at least thirty (30) days
prior to the proposed submission of such drafts for publication or presentation.
Such publications and presentations shall not divulge any of the Sponsor's
Confidential Information without prior written approval of the Sponsor, and the
Institution shall promptly remove any Confidential Information identified and
requested by the Sponsor. If requested by the Sponsor, the Principal
Investigator and the Institution shall delay the submission of any publication
or presentation up to sixty (60) days from the date of the Sponsor's request for
such a delay to permit the preparation and filing of related patent
applications. in addition, the Sponsor shall have the right to require that any
publication or presentation concerning the work performed hereunder acknowledge
the Sponsor's support.

        9. INVENTIONS. "Invention" shall mean any discovery, concept, or idea,
whether or not patentable, made during the conduct of the study, and arising
directly from the performance of the study, including but not limited to
processes, methods, software, tangible research products, formulas and
techniques, improvements thereto, and know-how related thereto.

        Institution agrees that the Principal Investigator will promptly
disclose to its Intellectual Property Committee and to Sponsor any Inventions
made by the Institution and/or the Principal

                                      -3-
<PAGE>   4

Investigator. It is agreed that all Inventions and any information with respect
thereto shall be subject to confidentiality obligations commensurate with those
set forth in Section 7 herein.

        Any Inventions that originate solely with the Principal Investigator, or
any other Institution agent or employee associated with this study (jointly or
severally referred to as "Inventor") shall be the property of Institution. If
Inventor is a co-inventor with Sponsor, its agents or employees, Institution and
Sponsor shall jointly own the Invention. Any Inventions that originate solely
with any agent or employee of Sponsor shall be the property of Sponsor. To the
extent that Sponsor pays all patent expenses for an Invention, Institution does
hereby grant to Sponsor an exclusive option to negotiate an exclusive, worldwide
royalty-bearing license to any Invention in which Institution has an ownership
interest. Sponsor shall indicate its intention to exercise its option to license
by notifying Institution in writing within forty-five (45) days of each
Invention's disclosure to Sponsor. If Sponsor decides to exercise its option,
the terms shall be negotiated in good faith within one-hundred twenty (120) days
of the date the option is exercised, or within such time as the parties may
mutually agree in writing.

        If negotiations between Sponsor and the Institution terminate and the
Institution thereafter negotiates a license agreement with a third party on
substantially better terms than those last offered to Sponsor, Sponsor shall be
given the first right to refuse such terms for a period of sixty (60) days from
the date of Sponsors receipt of a draft of such license agreement from
Institution.

        10. INDEMNIFICATION BY SPONSOR. The Sponsor will indemnify, hold
harmless and defend the System, Institution, their Regents, officers, agents,
and employees (collectively the "Indemnitees") against all actions, suits,
claims, demands and prosecutions (hereinafter a "Claim") that may be brought or
instituted, and all judgments, damages, liabilities, costs and expenses
resulting therefrom, arising out of the activities to be carried out pursuant to
the obligations under this Agreement, including but not limited to the use by
Sponsor of the results obtained from the activities performed by Institution
under this Agreement, but only to the extent that any such Claim is not caused
by or the result of: (a) any negligence or willful act or omission of any
Indemnitees; or (b) failure to adhere to the terms of the protocol provided by
the Sponsor hereunder. The Sponsor's indemnification obligations under this
Section 10 only arise if: (i) the Institution notifies the Sponsor within (30)
thirty days after it becomes aware of a Claim; (ii) the Institution, subject to
the Statutory duties of the Texas Attorney General permits the Sponsor control
the defense and settlement, at the Sponsor's expense, of any such Claim; (iii)
the Institution and Principal Investigator fully cooperate with the Sponsor in
the defense of any such claim, and (iv) the Institution does not settle any such
Claim without the prior written approval and consent of the Sponsor.

        11. INDEMNIFICATION BY INSTITUTION. Institution shall to the extent
authorized under the Constitution and laws of the State of Texas, indemnify and
hold Sponsor harmless from liability resulting from the negligent acts or
omissions of Institution, its agents or employees pertaining to the activities
to be carried out pursuant to the obligations of this Agreement; provided,
however, that Institution shall not hold Sponsor harmless from claims arising
out of the negligence or willful malfeasance of Sponsor, its officers, agents,
or employees, or any person or entity not subject to Institutions supervision or
control.

                                      -4-
<PAGE>   5

        12. LIABILITY INSURANCE. The Sponsor will maintain during the term of
this Agreement liability insurance with minimum limits of not less than
$1,000,000. As soon as practicable upon execution of this Agreement, the Sponsor
will deposit with the Institution certificates of insurance evidencing this
coverage. Such coverage may not be changed or terminated except upon at least
thirty (30) days prior written notice to the Institution. In addition, the
Sponsor will at all times comply with all statutory workers' compensation and
employers' liability requirements covering its employees with respect to
activities performed under this Agreement.

        13. RELATIONSHIP OF THE PARTIES. The Institution and the Principal
Investigator shall both be deemed to be independent contractors for all purposes
and for all services to be provided under this Agreement, and neither the agent
nor the employee of the Sponsor. The Institution shall have no authority to make
any statements, representations or commitments of any kind, or to take any
action, which shall be binding upon the Sponsor, except as expressly provided
for in this Agreement or authorized in Writing by the Sponsor.

        14. REPRESENTATIONS AND WARRANTIES OF INSTITUTION. Institution
represents that the Principal Investigator and all other investigators that may
perform services hereunder are its employees and shall abide by the terms of
this Agreement as if each were a party hereto.

        15. WARRANTIES; LIMITATION OF LIABILITY. THE SPONSOR MAKES NO
WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY PRODUCT OR OTHER MATERIALS OR
PROCESSES PROVIDED HEREUNDER. EXCEPT AS EXPRESSLY STATED HEREIN, THE SPONSOR
SHALL NOT BE LIABLE FOR ANY DIRECT, CONSEQUENTIAL, PUNITIVE, INDIRECT, OR OTHER
DAMAGES SUFFERED BY THE INSTITUTION OR THE PRINCIPAL INVESTIGATOR AS A RESULT OF
THE STUDY.

        16. TERM. This Agreement shall be effective from the Effective Date of
this Agreement and shall expire thirty (30) days after receipt by Sponsor of the
final summary of work accomplished during the Study. This Agreement may be
terminated by either party upon fourteen (14) weeks written notice.

        17. RETURN OF PRODUCT. Upon termination of this Agreement, the
Institution will return to the Sponsor all non-disposable Product, test kits,
and packaging materials as well as all copies of drawings, specifications,
manuals and other printed or reproduced material (including information stored
on machine-readable media) provided by the Sponsor to the Institution or the
Principal Investigator. The Sponsor may, at the Sponsor's option, request that
such materials be destroyed. All equipment purchased with funds under this
Agreement will become the property of Institution.

        18.    MISCELLANEOUS.

               A. AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended or waived only with the written consent of the parties or their
respective successors and assigns. Any amendment or waiver effected in
accordance with this Section 18(a) shall be binding upon the parties and their
respective successors and assigns.

                                      -5-
<PAGE>   6

               B. NOTICE. Any notice required or Permitted by this Agreement
shall be in writing and shall be deemed sufficient upon receipt, when delivered
personally or by courier, overnight delivery service or confirmed facsimile, or
forty-eight (48) hours after being deposited in the regular mail as certified or
registered mail (airmail if sent internationally) with postage prepaid, if such
notice is addressed to the party to be notified at such party's address or
facsimile number as set forth below, or as subsequently modified by written
notice.

                                      -6-
<PAGE>   7

INSTITUTION:                                    SPONSOR:

University of Texas                             Northwest Bio therapeutics, Inc.
M.D. Anderson Cancer Center                     120 Northgate Plaza, Suite 200
1515 Holcombe Blvd., Box 202                    Seattle, WA 98125
Houston, Texas 77030

ATTENTION:  Donna Gilberg, C.P.A.               ATTENTION:  Daniel O. Wilds
            Manager, Grants &                               President and CEO
            Contracts Accounting

If by FAX:  (713) 796-0381                      If by FAX:  (206) 368-3026

If by express mail: same as address above       If by express mail: same address
                                                                    as above

               C. ASSIGNMENT. The Institution agrees not to assign any of its
rights or obligations under this Agreement to any other party without first
obtaining the Sponsor's written approval. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

               D. GOVERNING LAW; JURISDICTION. This Agreement shall be construed
in accordance with the laws of the State of Texas.

               E. SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith, in order to maintain the economic position enjoyed
by each party as close as possible to that under the provision rendered
unenforceable. In the event that the parties cannot reach a mutually agreeable
and enforceable replacement for such provision, then (i) such provision shall be
excluded from this Agreement, (ii) the balance of the Agreement shall be
interpreted as if such provision were so excluded and (iii) the balance of the
Agreement shall be enforceable in accordance with its terms.

               F. FORCE MAJEURE. Performance of this Agreement by each party
shall be pursued with due diligence in all requirements hereof, however, neither
party shall be liable to the other for any loss or damages for delay or for
nonperformance due to causes not reasonably within its control. The party
affected shall promptly notify the other in writing of the nature, cause, date
of commencement thereof, the anticipated extent of such delay.

               G. ENTIRE AGREEMENT. This Agreement is the product of both of the
parties hereto, and constitutes the entire agreement between such parties
pertaining to the subject matter hereof, and merges all prior negotiations and
drafts of the parties with regard to the transactions contemplated herein. Any
and all other written or oral agreements existing between the parties hereto
regarding such transactions are expressly canceled.

                                      -7-
<PAGE>   8

        The parties hereto have caused this Agreement to be executed on their
behalf by their duly authorized representatives to he effective on the year and
date first above written.

                                         NORTHWEST BIOTHERAPEUTICS, INC.

                                         By:      /s/ Daniel O. Wilds
                                            ------------------------------------

                                         Name: Daniel O. Wilds

                                         Title: President and Chief Executive
                                                Officer

                                         Date:             12-16-99
                                              ----------------------------------

                                         THE UNIVERSITY OF TEXAS, M.D.
                                         ANDERSON CANCER CENTER

                                         By:      /s/ Leonard A. Zwelling
                                            ------------------------------------

                                         Name: Leonard A. Zwelling, M.D., M.B.A.

                                         Title: Associate Vice President,
                                                Research Administration

                                         Date:             12-28-99
                                              ----------------------------------

I have read this agreement and understood my obligations hereunder:

       /s/ Christos Papandreou               Date:           12-20-99
--------------------------------------            ------------------------------
Christos Papandreou, M.D., Ph.D.
PRINCIPAL INVESTIGATOR,
STUDY CHAIRMAN

      /s/ Christopher Logothetis             Reviewed and Approved
--------------------------------------
Christopher Logothetis, M.D.
Chairman, Department of Genitourinary
Medical Oncology

                                             Date:           12-28-99
                                                  ------------------------------
         /s/ Robert C. Bast
--------------------------------------
Robert C. Bast, Jr., M.D.
Head, Division of Medicine

                                      -8-
<PAGE>   9

                                    EXHIBIT A

           Northwest Biotherapeutics, Inc. Study Protocol No. DC1-HRPC

                                      -9-
<PAGE>   10

                                    EXHIBIT B

                   M.D. Anderson Cancer Center Study Protocol No. ID99-333

                                      -10-
<PAGE>   11

                                    EXHIBIT C

                                     Budget

<TABLE>
<S>                                                                   <C>
Personnel Salary & Fringe                                             $149,117
Equipment                                                                2,453
Supplies                                                                 2,560
Patient Costs (Research Costs Only for 30 Patients)                     71,669
Subtotal:  Direct Costs                                                225,799
Indirect Costs                                                          39,294
TOTAL DIRECT + INDIRECT COSTS                                          265,093
</TABLE>

Payment

        The Institution will require the Principal Investigator to agree to use
best efforts to complete the Study within the budgeted amount of eight thousand
eight hundred thirty-six Dollars and 43/00 ($8,836.43) per patient up to a
maximum of 30 patients, for a total estimated budget of two hundred sixty-five
thousand ninety-three Dollars ($265,093) (hereinafter referred to as the "Total
Estimated Budget") as itemized and set forth above.

        Any expenditure for time and/or materials which is expected to increase
the total amount for the completed Study to be invoiced by the Institution to
Sponsor in excess of the Total Estimated Budget shall be approved in advance in
writing by Sponsor. The Budget is based on a single Leukapheresis per patient.
The Sponsor will pay for any additional Leukapheresis procedures and associated
tests required for Leukapheresis when the Sponsor and Principal Investigator
agree that additional Leukapheresis is required.

        The Institution will invoice Sponsor on a calendar quarterly basis for
expenses for work under this Agreement. The initial payment of twenty-five
percent (25%) will be due within thirty (30) days of the signing of this
agreement by the Sponsor and the Institution. Checks payable to the Institution
shall be sent to:

The University of Texas
M.D. Anderson Cancer Center
Attn: Manager, Grants and Contracts Accounting
P.O. Box 297402
Houston, Texas 77297

                                      -11-
<PAGE>   12

                                    EXHIBIT D

                                PAYMENT SCHEDULE

The Company will pay to the Institution a total of eight thousand eight hundred
thirty-six dollars and 43/00 ($8,836,43) for each patient who completes the
Protocol and for whom the Company receives all reports required by the Protocol
(the "Cost per Patient") up to a maximum of thirty (30) patients. The Company
will make an initial payment of sixty-six thousand two hundred seventy-three
dollars and 23/00 ($66,273.23) representing twenty-five percent (25%) of the
Cost per Patient (the "Initial Payment") derived from Exhibit B and payable
thirty (30) days after the execution of this Agreement. The Initial Payment will
be credited toward the first 25% of the Cost per Patient that becomes due and
payable by the Company. The Initial Payment will be refunded to the Company to
the extent, it any, by which the initial Payment exceeds the total Cost per
Patient that becomes due.

The Cost per Patient will become due as follows:

-   25% payable within 30 days of the Sponsor's and the Institution's execution
    of this agreement;

-   Up to an aggregate of 60% will be payable in quarterly payments due within
    30 days of receipt of Institution's detailed invoices;

-   And, the final balance within 30 days of Sponsor's receipt of Institution's
    final report.

The amount payable by the Company will be pro-rated for any patient who fails to
complete the Protocol. IN ALL CASES, PATIENT EXPENSES ELIGIBLE FOR THIRD-PARTY
REIMBURSEMENT ARE THE RESPONSIBILITY OF THE INSTITUTION AND WILL NOT BE CHARGED
TO THE SPONSOR.

The Company will withhold the final fifteen per cent (15%) of the total Cost per
Patient until all Case Reports and the Clinical Trial summary report have been
delivered to the Company, and both the Company and the Institution's IRB have
been notified that the Clinical Trial has been completed.

Requests for payment must be in the form of a detailed invoice and submitted to
Northwest Biotherapeutics, Inc. Except for the Initial Payment, the Company will
not be obligated to make any payments until a detailed invoice has been
received. All amounts due will be payable within thirty (30) days of receipt of
the Institution's invoice.

Detailed Invoices shall be addressed to:

Dr. A.A. Elgamal
Sr. Manager of Clinical and Medical Affairs
Northwest Biotherapeutics, Inc,
120 Northgate Plaza, Suite 200
Seattle, Washington 98020

                                      -12-<PAGE>   1
                                                                   EXHIBIT 10.15

                         NORTHWEST BIOTHERAPEUTICS, INC.

                             1998 STOCK OPTION PLAN

        1. PURPOSES OF THE PLAN. The purposes of this 1998 Stock Option Plan are
to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be Incentive Stock Options (as
defined under Section 422 of the Code) or Nonstatutory Stock Options, as
determined by the Administrator at the time of grant of an option and subject to
the applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder.

        2. DEFINITIONS. As used herein, the following definitions shall apply:

               (a) "ADMINISTRATOR" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.

               (b) "BOARD" means the Board of Directors of the Company.

               (c) "CODE" means the Internal Revenue Code of 1986, as amended.

               (d) "COMMITTEE" means the Committee appointed by the Board of
Directors in accordance with Section 4(a) and (b) of the Plan.

               (e) "COMMON STOCK" means the Common Stock of the Company.

               (f) "COMPANY" means Northwest Biotherapeutics, Inc., a Delaware
corporation.

               (g) "CONSULTANT" means any person, including an advisor, who is
engaged by the Company or any Parent or Subsidiary to render services and is
compensated for such services, and any director of the Company whether
compensated for such services or not.

               (h) "CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT" means the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of: (i) sick leave; (ii) military leave;
(iii) any other leave of absence approved by the Administrator, provided that
such leave is for a period of not more than 90 days, unless reemployment upon
the expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted from time to time; or (iv)
in the case of transfers between locations of the Company or between the
Company, its Subsidiaries or their respective successors. For purposes of this
Plan, a change in status from an Employee to a Consultant or from a Consultant
to an Employee will not constitute an interruption of Continuous Status as an
Employee or Consultant.

<PAGE>   2
               (i) "EMPLOYEE" means any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company,
with the status of employment determined based upon such minimum number of hours
or periods worked as shall be determined by the Administrator in its discretion,
subject to any requirements of the Code. The payment of a director's fee to a
director shall not be sufficient to constitute "employment" of such director by
the Company.

               (j) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

               (k) "FAIR MARKET VALUE" means, as of any date, the fair market
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 National
Market of the National Association of Securities Dealers, Inc. Automated
Quotation ("Nasdaq") System, its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales were reported), as quoted
on such system or exchange, or the exchange with the greatest volume of trading
in Common Stock for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;

                      (ii) If the Common Stock is quoted on the Nasdaq System
(but not on the National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
for the last market trading day prior to the time of determination, as reported
in The Wall Street Journal or such other source as the Administrator deems
reliable; or

                      (iii) In the absence of an established market for the
Common Stock, the fair Market Value thereof shall be determined in good faith by
the Administrator.

               (l) "INCENTIVE STOCK OPTION" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable written Option Agreement.

               (m) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option, as designated in the applicable written
Option Agreement.

               (n) "OPTION" means a stock option granted pursuant to the Plan.

               (o) "OPTION AGREEMENT" means a written agreement between an
Optionee and the Company reflecting the terms of an Option granted under the
Plan and includes any documents attached to such Option Agreement, including,
but not limited to, a notice of stock option grant and a form of exercise
notice.

               (p) "OPTIONED STOCK" means the Common Stock subject to an Option.

                                       2

<PAGE>   3
               (q) "OPTIONEE" means an Employee or Consultant who receives an
Option.

               (r) "PARENT" means a "parent corporation" whether now or
hereafter existing, as defined in Section 424(e) of the Code, or any successor
provision.

               (s) "PLAN" means this 1998 Stock Option Plan.

               (t) "REPORTING PERSON" means an officer, director, or greater
than 10% stockholder of the Company within the meaning of Rule 16a-2 under the
Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the
Exchange Act.

               (u) "RULE 16b-3" means Rule 16b-3 promulgated under the Exchange
Act, as the same may be amended from time to time, or any successor provision.

               (v) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.

               (w) "STOCK EXCHANGE" means any stock exchange or consolidated
stock price reporting system on which prices for the Common Stock are quoted at
any given time.

               (x) "SUBSIDIARY" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code, or any successor
provision.

        3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of shares that may be optioned and sold
under the Plan is 50,000 shares of Common Stock. The shares may be authorized,
but unissued, or reacquired Common Stock. If an Option should expire or become
unexercisable for any reason without having been exercised in full, the
unpurchased Shares that were subject thereto shall, unless the Plan shall have
been terminated, become available for future grant under the Plan. In addition,
any shares of Common Stock which are retained by the Company upon exercise of an
Option in order to satisfy the exercise or purchase price for such option or any
withholding taxes due with respect to such exercise shall be treated as not
issued and shall continue to be available under the Plan. Shares repurchased by
the Company pursuant to any repurchase right which the Company may have shall
not be available for future grant under the Plan.

        4. ADMINISTRATION OF THE PLAN.

               (a) INITIAL PLAN PROCEDURE. Prior to the date, if any, upon which
the Company becomes subject to the Exchange Act, the Plan shall be administered
by the Board or a Committee appointed by the Board.

                                       3

<PAGE>   4
               (b) PLAN PROCEDURE AFTER THE DATE, IF ANY, UPON WHICH THE COMPANY
BECOMES SUBJECT TO THE EXCHANGE ACT.

                      (i) MULTIPLE ADMINISTRATIVE BODIES. If permitted by Rule
16b-3, grants under the Plan may be made by different bodies with respect to
directors, non-director officers and Employees or Consultants who are not
Reporting Persons.

                      (ii) ADMINISTRATION WITH RESPECT TO REPORTING PERSONS.
With respect to grants of Options to Employees who are Reporting Persons, such
grants shall be made by (A) the Board if the Board may make grants to Reporting
Persons under the Plan in compliance with Rule 16b-3, or (B) a Committee
designated by the Board to make grants to Reporting Persons under the Plan,
which Committee shall be constituted in such a manner as to permit grants under
the Plan to comply with Rule 16b-3. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of the Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however caused,
and remove all members of the Committee and thereafter directly make grants to
Reporting Persons under the Plan, all to the extent permitted by Rule 16b-3.

                      (iii) ADMINISTRATION WITH RESPECT TO CONSULTANTS AND OTHER
Employees. With respect to grants of Options to Employees or Consultants who are
not Reporting Persons, the Plan shall be administered by (A) the Board or (B) a
Committee designated by the Board, which Committee shall be constituted in such
a manner as to satisfy the legal requirements relating to the administration of
Incentive Stock Option plans, if any, of applicable corporate and securities
laws, of the Code and of any applicable Stock Exchange (the "Applicable Laws").
Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the Board may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws.

               (c) 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 such Committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any Stock Exchange, the Administrator
shall have the authority, in its discretion:

                      (i) to determine the fair Market Value of the Common
Stock, in accordance with Section 2(k) of the Plan;

                      (ii) to select the Consultants and Employees to whom
Options may from time to time be granted hereunder;

                      (iii) to determine whether and to what extent Options are
granted hereunder;

                                       4

<PAGE>   5
                      (iv) to determine the number of shares of Common Stock to
be covered by each such Option granted hereunder;

                      (v) to approve forms of agreement for use under the Plan;

                      (vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option granted hereunder;

                      (vii) to determine whether and under what circumstances an
Option may be settled in cash under Section 9(f) instead of Common Stock;

                      (viii) 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 such Option shall have declined since the date the Option was
granted;

                      (ix) To construe and interpret the terms of the Plan and
Options granted under the Plan; and

                      (x) in order to fulfill the purposes of the Plan and
without amending the Plan, to modify grants of Options to participants who are
foreign nationals or employed outside of the United States in order to recognize
differences in local law, tax policies or customs.

               (d) EFFECT OF ADMINISTRATOR'S DECISION. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all holders of Options.

        5. ELIGIBILITY.

               (a) RECIPIENTS OF GRANTS. Nonstatutory Stock Options may be
granted to Employees and Consultants. Incentive Stock Options may be granted
only to Employees. An Employee or Consultant who has been granted an Option may,
if he or she is otherwise eligible, be granted additional Options.

               (b) TYPE OF OPTION. Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designations, to the extent that the aggregate
Fair Market Value of Shares with respect to which Options designated as
Incentive Stock Options are exercisable for the first time by any Optionee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 5(b), Incentive Stock
Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of the Shares subject to an Incentive Stock Option shall
be determined as of the date of the grant of such option.

               (c) EMPLOYMENT RELATIONSHIP. The Plan shall not confer upon any
Optionee any right with respect to continuation of employment or consulting
relationship with the

                                       5

<PAGE>   6
Company, nor shall it interfere in any way with such Optionee's right or the
Company's right to terminate his or her employment or consulting relationship at
any time, with or without cause.

        6. TERM OF PLAN. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company as described in Section 18 of the Plan. It shall
continue in effect for a term of ten years unless sooner terminated under
Section 14 of the Plan.

        7. TERM OF OPTION. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement. However, 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 10% of the total combined voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Option shall be five years
from the date of grant thereof or such shorter term as may be provided in the
Option Agreement.

        8. OPTION EXERCISE PRICE AND CONSIDERATION.

               (a) The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Board and set forth in the applicable Option Agreement, but shall be subject to
the following:

                      (i) In the case of an Incentive Stock Option that is:

                           (A) granted to an Employee who, at the time of the
grant of such Incentive Stock Option, owns stock representing more than 10% of
the total combined voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant.

                           (B) granted to any Employee, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.

                      (ii) In the case of a Nonstatutory Stock Option that is:

                           (A) granted to a person who, at the time of the grant
of such Option, owns stock representing more than 10% of the total combined
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the per Share exercise price shall be no less than 1110% of the Fair Market
Value per Share on the date of the grant.

                           (B) granted to any person, the per Share exercise
price shall be no less than 85% of the Fair Market Value per Share on the date
of grant.

               (b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, if permitted by Company policy (subject to

                                       6

<PAGE>   7
the provisions of Section 153 of the Delaware General Corporation Law), (4)
other Shares that (x) in the case of Shares acquired upon exercise of an Option,
have been owned by the Optionee for more than six months on the date of
surrender or such other period as may be required to avoid a charge to the
Company's earnings, and (y) have a fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which such Option
shall be exercised, (5) authorization for the Company to retain from the total
number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised, (6) delivery
of a properly executed exercise notice together with such other documentation as
the Administrator and the broker, if applicable, shall require to effect an
exercise of the Option and delivery to the Company of the sale or loan proceeds
required to pay the exercise price and any applicable income or employment
taxes, (7) delivery of an irrevocable subscription agreement for the Shares that
irrevocably obligates the option holder to take and pay for the Shares not more
than twelve months after the date of delivery of the subscription agreement, (8)
any combination of the foregoing methods of payment, or (9) such other
consideration and method of payment for the issuance of Shares to the extent
permitted under the Applicable Laws. In making its determination as to the type
of consideration to accept, the Administrator shall consider if acceptance of
such consideration may be reasonably expected to benefit the Company.

        9. EXERCISE OF OPTION.

               (a) PROCEDURE FOR EXERCISE, RIGHTS AS A STOCKHOLDER. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator and reflected in the Option Agreement, which
may include vesting requirements and/or including performance criteria with
respect to the Company and/or the Optionee; provided, however, that such Option
shall become exercisable at the rate of at least 20% per year over five years
from the date the Option is granted. In the event that any of the Shares issued
upon exercise of an Option should be subject to a right of repurchase in the
Company's favor, such repurchase right shall lapse at the rate of at least 20%
per year over five years from the date the Option is granted. Notwithstanding
the above, in the case of an Option granted to an officer, director or
Consultant of the Company or any Parent or Subsidiary of the Company, the Option
may become fully exercisable, or a repurchase right, if any, in favor of the
Company shall lapse, at any time or during any period established by the
Administrator.

        An Option may not be exercised for a fraction of a Share.

        An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and the Company has
received full payment for the Shares with respect to which the Option is
exercised. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
not withstanding the exercise of the Option. The Company shall issue (or

                                       7

<PAGE>   8
cause to be issued) such stock certificate promptly upon exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.

        Exercise of an Option in any manner shall result in a decrease in the
number of Shares that thereafter may be 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 EMPLOYMENT OR CONSULTING RELATIONSHIP. Subject
to Section 9(c) below, in the event of Termination of an Optionee's Continuous
Status as an Employee or Consultant with the Company, such Optionee may, but
only within three months (or such other period of time not less than 30 days as
is determined by the Administrator, with such determination in the case of an
Incentive Stock Option being made at the time of grant of the Option and not
exceeding three months) after the date of such termination (but in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise his or her Option to the extent that the Optionee
was entitled to exercise it at the date of such termination. To the extent that
the Optionee was not entitled to exercise the Option at the date of such
termination, or if the Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate. No
termination shall be deemed to occur and this Section 9(b) shall not apply if
(i) the Optionee is a Consultant who becomes an Employee, or (ii) the Optionee
is an Employee who becomes a Consultant.

               (e) DISABILITY OF OPTIONEE.

                      (i) Notwithstanding Section 9(b) above, in the event of
termination of an Optionee's Continuous Status as an Employee or Consultant as a
result of his or her total and permanent disability (within the meaning of
Section 22(e)(3) of the Code), such Optionee may, but only within twelve months
from the date of such termination (but in no event later than the expiration
date of the term of such Option as set forth in the Option Agreement), exercise
the Option to the extent otherwise entitled to exercise it at the date of such
termination. To the extent that the Optionee was not entitled to exercise the
Option at the date of termination, or if the Optionee does not exercise such
Option to the extent so entitled within the time specified herein, the Option
shall terminate.

                      (ii) In the event of termination of an Optionee's
Continuous Status as an Employee or Consultant as a result of a disability which
does not fall within the meaning of total and permanent disability (as set forth
in Section 22(e)(3) of the Code), such Optionee may, but only within six months
from the date of such termination (but in no event later than the expiration
dale of the term of such Option as set forth in the Option Agreement), exercise
the Option to the extent otherwise entitled to exercise it at the date of such
termination. However, to the extent that such Optionee fails to exercise an
Option which is an Incentive Stock Option (within the meaning of Section 422 of
the Code) within three months of the date of such termination, the Option will
not qualify for Incentive Stock Option treatment under the Code. To the extent
that the Optionee was not entitled to exercise the Option at the date of
termination, or if the Optionee does not exercise such Option to the extent so
entitled within six months from the date of termination, the Option shall
terminate.

                                       8

<PAGE>   9
               (d) DEATH OF OPTIONEE. In the event of the death of an Optionee
during the period of Continuous Status as an Employee or Consultant since the
date of grant of the Option, or within 30 days following termination of the
Optionee's Continuous Status as an Employee or Consultant, the Option may be
exercised, at any time within six months following the date of death (but in no
event later than the expiration date of the term of such Option as set forth in
the Option Agreement), by such Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the extent
of the right to exercise that had accrued at the date of death or, if earlier,
the date of termination of the Optionee's Continuous Status as an Employee or
Consultant. To the extent that the Optionee was not entitled to exercise the
Option at the date of death or termination, as the case may be, or if the
Optionee does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.

               (e) RULE 16b-3. Options granted to Reporting Persons shall comply
with Rule 16b-3 and shall contain such additional conditions or restrictions as
may be required thereunder to qualify for the maximum exemption for Plan
transactions.

        10. STOCK WITHHOLDING TO SATISFY WITHHOLDING TAX OBLIGATIONS. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with art Option, which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligation by one or some combination of the
following methods: (a) by cash or check payment, (b) out of the Optionee's
current compensation, (c) if permitted by the Administrator, in its discretion,
by surrendering to the Company Shares that (i) in the case of Shares previously
acquired from the Company, have been owned by the Optionee for more than six
months on the date of surrender, and (ii) have a Fair Market Value on the date
of surrender equal to or less than the Optionee's marginal tax rate times the
ordinary income recognized, or (d) by electing to have the Company withhold from
the Shares to be issued upon exercise of the Option, if any, that number of
Shares having a Fair Market Value equal to the amount required to be withheld.
For this purpose, the fair market value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined
(the "Tax Date").

        Any surrender by a Reporting Person of previously owned Shares to
satisfy tax withholding obligations arising upon exercise of this Option must
comply with the applicable provisions of Rule 16b-3.

        All elections by an Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:

               (a) the election must be made on or prior to the applicable Tax
Date;

                                       9

<PAGE>   10
               (b) once made, the election shall be irrevocable as to the
particular Shares of the Option as to which the election is made; and

               (c) all elections shall be subject to the consent or disapproval
of the Administrator.

        In the event the election to have Shares withheld is made by an Optionee
and the Tax Date is deferred under Section 83 of the Code because no election is
filed under Section 83(b) of the Code, the Optionee shall receive the full
number of Shares with respect to which the Option is exercised but such Optionee
shall be unconditionally obligated to tender back, to the Company the proper
number of Shares on the Tax Date.

        11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR CERTAIN OTHER
TRANSACTIONS.

               (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, and the number of shares of Common Stock that have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or that have been returned to the Plan upon cancellation or expiration
of an Option, as well as the price per share of Common Stock covered by each
such outstanding Option, shall 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, recapitalization 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; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.

               (b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify the Optionee
at least 15 days prior to such proposed action. To the extent it has not been
previously exercised, the Option will terminate immediately prior to the
consummation of such proposed action.

               (c) MERGER OR SALE OF ASSETS. In the event of a proposed sale of
a or substantially all of the Company's assets or a merger of the Company with
or into another corporation where the successor corporation issues its
securities to the Company's stockholders, each outstanding Option shall be
assumed or an equivalent option or right shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation, unless the
successor corporation does not agree to assume the Option or to substitute an
equivalent option, in which case such Option shall terminate upon the
consummation of the merger or sale of assets. For purposes of this Section
11(c), an Option shall be considered assumed, without limitation, if, at

                                       10

<PAGE>   11
the time of issuance of the stock or other consideration upon such merger or
sale of assets, each Optionee would be entitled to receive upon exercise of an
Option the same number and kind of shares of stock or the same amount of
property, cash or securities as the Optionee would have been entitled to receive
upon the occurrence of such transaction if the Optionee had been, immediately
prior to such transaction, the holder of the number of Shares of Common Stock
covered by the Option at such time (after giving effect to any adjustments in
the number of Shares covered by the Option as provided for in this Section 11).

               (d) CERTAIN DISTRIBUTIONS. In the event of any distribution to
the Company's stockholders of securities of any other entity or other assets
(other than dividends payable in cash or stock of the Company) without receipt
of consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per share of Common Stock covered by each
outstanding Option to reflect the effect of such distribution.

        12. NON-TRANSFERABILITY OF OPTIONS. Options 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 or purchased
during the lifetime of the Optionee only by the Optionee.

        13. TIME OF GRANTING, OPTIONS. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board;
provided, however, that in the case of any Incentive Stock Option, the grant
date shall be the later of the date on which the Administrator makes the
determination granting such Incentive Stock Option or the date of commencement
of the Optionee's employment relationship with the Company. Notice of the
determination shall be given to each Employee or Consultant to whom an Option is
so granted within a reasonable time after the date of such grant.

        14. AMENDMENT AND TERMINATION OF THE PLAN.

               (a) AUTHORITY TO-AMEND OR TERMINATE. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made that would impair the rights of any
Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 or
with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of any Stock Exchange), the Company shall obtain
stockholder approval of any Plan amendment in such a manner and to such a degree
as required.

               (b) EFFECT OF AMENDMENT OR TERMINATION. No amendment or
termination of the Plan shall adversely affect Options already granted, unless
mutually agreed otherwise between the Optionee and the Board, which agreement
must be in writing and signed by the Optionee and the Company.

        15. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without

                                       11

<PAGE>   12
limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of any Stock
Exchange.

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

        16. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

        17. OPTION AGREEMENTS. Options shall be evidenced by Option Agreements
in such form(s) as the Administrator shall approve from time to time.

        18. STOCKHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve months before or after
the date the Plan is adopted. Such stockholder approval shall be obtained in the
degree and manner required under applicable state and federal law and the rules
of any Stock Exchange upon which the Common Stock is listed. All Options issued
under the Plan shall become void in the event such approval is not obtained.

        19. INFORMATION AND DOCUMENTS TO OPTIONEES. The Company shall provide
financial statements at least annually to each Optionee during the period such
Optionee has one or more Options outstanding, and in the case of an individual
who acquired Shares pursuant to the Plan, during the period such individual owns
such Shares. The Company shall not be required to provide such information if
the issuance of Options under the Plan is limited to key employees whose duties
in connection with the Company assure their access to equivalent information. In
addition, at the time of issuance of any securities under the Plan, the Company
shall provide to the Optionee a copy of the Plan and any agreement(s) pursuant
to which securities granted under the Plan are issued.

                                       12

<PAGE>   13
                         NORTHWEST BIOTHERAPEUTICS, INC.

                             1998 STOCK OPTION PLAN

             EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

        This Agreement ("Agreement") is made as of ____________, by and between
Northwest Biotherapeutics, Inc., a Delaware corporation (the "Company"), and
_______________ ("Purchaser"). To the extent any capitalized terms used in this
Agreement are not defined, they shall have the meaning ascribed to them in the
1998 Stock Option Plan.

        1. EXERCISE OF OPTION. Subject to the terms and conditions hereof,
Purchaser hereby elects to exercise his or her option to purchase __________
shares of the Common Stock (the "Shares") of the Company under and pursuant to
the Company's 1998 Stock Option Plan (the "Plan") and the Stock Option Agreement
dated _____________, (the "Option Agreement"). The purchase price for the Shares
shall be $____________ per Share for a total purchase price of
$_________________. The term "Shares" refers to the purchased Shares and all
securities received in replacement of the Shares or as stock dividends or
splits, all securities received in replacement of the Shares in a
recapitalization, merger, reorganization, exchange or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
entitled by reason of Purchaser's ownership of the Shares.

        2. TIME AND PLACE OF EXERCISE. The purchase and sale of the Shares under
this Agreement shall occur at the principal office of the Company simultaneously
with the execution and delivery of this Agreement in accordance with the
provisions of Section 2(b) of the Option Agreement. On such date, the Company
will deliver to Purchaser a certificate representing the Shares to be purchased
by Purchaser (which shall be issued in Purchaser's name) against payment of the
exercise price therefor by Purchaser by (a) check made payable to the Company,
(b) cancellation of indebtedness of the Company to Purchaser, (c) delivery of
shares of the Common Stock of the Company in accordance with Section 3 of the
Option Agreement, (d) if permitted by Company policy and subject to the
provisions of Section 153 of the Delaware General Corporation Law, delivery of a
promissory note, in the form prescribed by the Company, or (e) a combination of
the foregoing. If Purchaser delivers a promissory note as partial or full
payment of the purchase price, Purchaser will also deliver a Pledge and Security
Agreement in the form prescribed by the Company.

        3. LIMITATIONS ON TRANSFER. In addition to any other limitation on
transfer created by applicable securities laws, Purchaser shall not assign,
encumber or dispose of any interest in the Shares except in compliance with the
provisions below and applicable securities laws.

               (a) RIGHT OF FIRST REFUSAL. Before any Shares held by Purchaser
or any transferee of Purchaser (either being sometimes referred to herein as the
"Holder") may be sold or otherwise transferred (including transfer by gift or
operation of law), the Company or its assignee(s) shall have a right of first
refusal to purchase the Shares on the terms and conditions set forth in this
Section 3(a) (the "Right of First Refusal").

<PAGE>   14
                      (i) NOTICE OF PROPOSED TRANSFER. The Holder of the Shares
shall deliver to the Company a written notice (the "Notice") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer such Shares; (ii) the
name of each proposed purchaser or other transferee ("Proposed Transferee");
(iii) the number of Shares to be transferred to each Proposed Transferee; and
(iv) the terms and conditions of each proposed sale or transfer. The Holder
shall offer the Shares at the same price (the "Offered Price") and upon the same
terms (or terms as similar as reasonably possible) to the Company or its
assignee(s).

                      (ii) EXERCISE OF RIGHT OF FIRST REFUSAL. At any time
within 30 days after receipt of the Notice, the Company and/or its assignee(s)
may, by giving written notice to the Holder, elect to purchase all, but not less
than all, of the Shares proposed to be transferred to any one or more of the
Proposed Transferees, at the purchase price determined in accordance with
subsection (iii) below.

                      (iii) PURCHASE PRICE. The purchase price ("Purchase
Price") for the Shares purchased by the Company or its assignee(s) under this
Section 3(a) shall be the Offered Price. If the Offered Price includes
consideration other than cash, the cash equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company in
good faith.

                      (iv) PAYMENT. Payment of the Purchase Price shall be made,
at the option of the Company or its assignee(s), in cash (by check), by
cancellation of all or a portion of any outstanding indebtedness of the Holder
to the Company (or, in the case of repurchase by an assignee, to the assignee),
or by any combination thereof within 30 days after receipt of the Notice or in
the manner and at the times set forth in the Notice.

                      (v) HOLDER'S RIGHT TO TRANSFER. If all of the Shares
proposed in the Notice to be transferred to a given Proposed Transferee are not
purchased by the Company and/or its assignee(s) as provided in this Section
3(a), then the Holder may sell or otherwise transfer such Shares to that
Proposed Transferee at the Offered Price or at a higher price, provided that
such sale or other transfer is consummated within 60 days after the date of the
Notice and provided further that any such sale or other transfer is effected in
accordance with any applicable securities laws and the Proposed Transferee
agrees in writing that the provisions of this Section 3 shall continue to apply
to the Shares in the hands of such Proposed Transferee. If the Shares described
in the Notice are not transferred to the Proposed Transferee within such period,
or if the Holder proposes to change the price or other terms to make them more
favorable to the Proposed Transferee, a new Notice shall be given to the
Company, and the Company and/or its assignees shall again be offered the Right
of First Refusal before any Shares held by the Holder may be sold or otherwise
transferred.

                      (vi) EXCEPTION FOR CERTAIN FAMILY TRANSFERS. Anything to
the contrary contained in this Section 3(a) notwithstanding, the transfer of any
or all of the Shares during Purchaser's lifetime or on Purchaser's death by will
or intestacy to Purchaser's Immediate Family (as defined below) a trust for the
benefit of Purchaser's Immediate Family shall be exempt from the provisions of
this Section 3(a). "Immediate Family" as used herein shall mean

                                        2

<PAGE>   15
spouse, lineal descendant or antecedent, father, mother, brother or sister. In
such case, the transferee or other recipient shall receive and hold the Shares
so transferred subject to the provisions of this Section, and there shall be no
further transfer of such Shares except in accordance with the terms of this
Section 3.

               (b) ASSIGNMENT. The right of the Company to purchase any part of
the Shares may be assigned in whole or in part to any stockholder or
stockholders of the Company or other persons or organizations; provided,
however, that an assignee, other than a corporation that is the Parent or a 100%
owned Subsidiary of the Company, must pay the Company, upon assignment of such
right, cash equal to the difference between the original purchase price and Fair
Market Value, if the original purchase price is less than the Fair Market Value
of the Shares subject to the assignment.

               (c) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of
Shares or any interest therein will receive and hold such Shares or interest
subject to the provisions of this Agreement. Any sale or transfer of the Shares
shall be void unless the provisions of this Agreement are satisfied.

               (d) TERMINATION OF RIGHTS. The Right of First Refusal above shall
terminate upon the first sale of Common Stock of the Company to the general
public pursuant to a registration statement filed with and declared effective by
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act").

               (e) MARKET STANDOFF AGREEMENT. In connection with the initial
public offering of the Company's securities and upon request of the Company or
the underwriters managing such underwritten offering of the Company's
securities, Purchaser agrees not to sell, make any short sale of, loan, grant
any option for the purchase of, or otherwise dispose of any securities of the
Company (other than those included in the registration) without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed 180 days) from the effective date of such
registration as may be requested by the Company or such managing underwriters
and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the Company's initial public offering.

        4. INVESTMENT AND TAXATION REPRESENTATIONS. In connection with the
purchase of the Shares, Purchaser represents to the Company the following:

               (a) Purchaser 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 Shares. Purchaser is
purchasing the Shares for investment for his or her 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.

               (b) Purchaser understands that the Shares have not been
registered under the Securities Act by reason of a specific exemption therefrom,
which exemption depends upon, among other things, the bona fide nature of
Purchaser's investment intent as expressed herein.

                                       3

<PAGE>   16
               (c) Purchaser understands that the Shares are "restricted
securities" under applicable U.S. federal and state securities laws and that,
pursuant to these laws, Purchaser must hold the Shares indefinitely unless they
are registered with the Securities and Exchange Commission and qualified by
state authorities, or an exemption from such registration and qualification
requirements is available. Purchaser acknowledges that the Company has no
obligation to register or qualify the Shares for resale. Purchaser further
acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares, and
requirements relating to the Company which are outside of the Purchaser's
control, and which the Company is under no obligation and may not be able to
satisfy.

               (d) Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser's purchase or disposition of the Shares.
Purchaser represents that Purchaser has consulted any tax consultants Purchaser
deems advisable in connection with the purchase or disposition of the Shares and
that Purchaser is not relying on the Company for any tax advice.

        5. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.

               (a) LEGENDS. The certificate or certificates representing the
Shares shall bear the following legends (as well as any legends required by
applicable state and federal corporate and securities laws):

                        (i)     THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
                                NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
                                1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND
                                NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
                                SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR
                                DISTRIBUTION MAY BE EFFECTED WITHOUT AN
                                EFFECTIVE REGISTRATION STATEMENT RELATED THERETO
                                OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY
                                TO THE COMPANY THAT SUCH REGISTRATION IS NOT
                                REQUIRED UNDER THE SECURITIES ACT OF 1933.

                        (ii)    THE SHARES REPRESENTED BY THIS CERTIFICATE MAY
                                BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS
                                OF AN AGREEMENT BETWEEN THE COMPANY AND THE
                                STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE
                                SECRETARY OF THE COMPANY.

               (b) STOP-TRANSFER NOTICES. Purchaser agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop

                                       4

<PAGE>   17
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 shall 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 Agreement 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 shall have been so transferred.

               (d) REMOVAL OF LEGEND. When all of the following events have
occurred, the Shares then held by Purchaser will no longer be subject to the
legend referred to in Section 5(a)(ii): (i) the termination of the Right of
First Refusal; and (ii) the expiration or termination of the market standoff
provisions of Section 3(f) (and of any agreement entered pursuant to Section
3(f)). After such time, and upon Purchaser's request, a new certificate or
certificates representing the Shares not repurchased shall be issued without the
legend referred to in Section 5(a)(ii), and delivered to Purchaser.

        6. NO EMPLOYMENT RIGHTS. Nothing in this Agreement shall affect in any
manner whatsoever the right or power of the Company, or a Parent or Subsidiary
of the Company, to terminate Purchaser's employment or consulting relationship,
for any reason, with or without cause.

        7. MISCELLANEOUS.

               (a) GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Washington, without giving effect to principles of conflicts of law.

               (b) ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS. This Agreement sets
forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless in writing signed by the parties
to this Agreement. The failure by either party to enforce any rights under this
Agreement shall not be construed as a waiver of any rights of such party.

               (c) SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.

               (d) CONSTRUCTION. This Agreement is the result of negotiations
between and has been reviewed by each of the parties hereto and their respective
counsel, if any; accordingly,

                                       5

<PAGE>   18
this Agreement shall be deemed to be the product of all of the parties hereto,
and no ambiguity shall be construed in favor of or against any one of the
parties hereto.

               (e) NOTICES. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient when delivered personally or
sent by telegram or fax or 48 hours after being deposited in the U.S. mail, as
certified or registered mail, with postage prepaid, and addressed to the party
to be notified at such party's address as set forth below or as subsequently
modified by written notice.

               (f) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

               (g) SUCCESSORS AND ASSIGNS. The rights and benefits of this
Agreement shall inure to the benefit of, and be enforceable by the Company's
successors and assigns. The rights and obligations of Purchaser under this
Agreement may only be assigned with the prior written consent of the Company.

        The parties have executed this Exercise Notice and Restricted Stock
Purchase Agreement as of the date first set forth above.

                               COMPANY:

                               NORTHWEST BIOTHERAPEUTICS, INC.

                               By:
                                  ---------------------------------------
                                   Daniel O. Wilds
                                   President and Chief Executive Officer

                               Address:  120 Northgate Plaza, Suite 200
                               Seattle, Washington 98125

                               PURCHASER:

                               ------------------------------------------
                               (Signature)

                               ------------------------------------------
                               (Print Name)

                               Address:

                                       6

<PAGE>   19
I, _______________________, spouse of _______________, have read and hereby
approve the foregoing Agreement. In consideration of the Company's granting my
spouse the right to purchase the Shares as set forth in the Agreement, I hereby
agree to be bound irrevocably by the Agreement and further agree that any
community property or similar interest that I may have in the Shares shall
hereby be similarly bound by the Agreement. I hereby appoint my spouse as my
attorney-in-fact with respect to any amendment or exercise of any rights under
the Agreement.

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

                                       7

<PAGE>   20
                                     RECEIPT

        The undersigned hereby acknowledges receipt of Certificate No. ______
for _______ shares of Common Stock of Northwest Biotherapeutics, Inc.

-------------------------------         -------------------------------
Dated:                                  Optionee

                                       8

<PAGE>   21
                                     RECEIPT

        Northwest Biotherapeutics, Inc. (the "Company" hereby acknowledges
receipt of (check as applicable):

        _____ A check in the amount of $__________

        _____ The cancellation of indebtedness in the amount of $___________

        _____ Certificate No. _____ representing ______ shares of the Company's
              Common Stock with a Fair Market Value of $__________

        _____ A promissory note in the amount of $___________

given by Optionee as consideration for Certificate No. ______ for ___________
shares of Common Stock of the Company.

Dated:                              NORTHWEST BIOTHERAPEUTICS, INC.
      ---------------
                                    By:
                                        ---------------------------------
                                        Daniel O. Wilds
                                        President and Chief Executive Officer

                                       9

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