Document:

EXHIBIT 10.4
                        ADDENDUM TO EMPLOYMENT AGREEMENT

This  addendum is in reference to the Agreement  between  UMDN,  Inc. and Starla
Keith, dated August 29,2000.

Beginning  November  1,2001,  the  terms of  Compensation  shall be  amended  as
following:

The monthly salary outlined in above referenced agreement shall be deferred for
an undetermined period of time. At such time as Mrs. Keith requests, the total
amount due her will be paid by UMDN, Inc. upon demand or upon his termination
for any reason whatsoever. Mrs. Keith, at her sole discretion may take the
amount due in lawful money and immediately available funds, or opt to receive
all or part of the amount due in company stock or options at the current
established value. Mrs. Keith may cancel this deferral at any time with 30 days
written notice.

It is to be  noted  that  the  above  referenced  agreement  sets  Mrs.  Keith's
compensation at $10,000 monthly.  To date she has been compensated in the amount
of $7,300 monthly. Mrs. Keith has waived any and all rights to the unpaid amount
and for the period of this deferral hereby agrees to a monthly salary of $7,000.
At such time as this deferral  arrangement  ceases Mrs. Keith will revert to the
salary as stated in the original employment agreement.

EMPLOYER:

UMDN, Inc.

By:        /s/
           ---------------------------

EMPLOYEE:  /s/
           ---------------------------EXHIBIT 10.5
                                 LEASE AGREEMENT

Kent & Starla Keith, being the majority  stockholders and officers of UMDN, Inc.
do hereby agree to allow UMDN, Inc.,  during their Initial growth phase to lease
a designated office area in our private home for an undetermined period of time.

The lease is on a  month-to-month  basis  with the  monthly  rate to be  $1,000,
inclusive  of all  utilities,  maintenance  and  services.  This  rate  has been
determined  in  accordance   with  the  value   currently   established  in  the
marketplace.

Mr. & Mrs.  Keith have agreed that the monthly rate will  initially not be taken
in cash or other form of  compensation,  but will be as contribution the paid in
capital.

Mr. & Mrs.  Keith has the sole right to cancel this agreement upon 30 days prior
written notice to UMDN, Inc. UMDN, Inc. may cancel this agreement, but not alter
the terms without prior consent, at any time.

This agreement becomes effective on September 1 ,2000.

LESSEE: /s/                             LESSOR: /s/
        ------------------------------          ------------------------------EXHIBIT 10.6
                                 PROMISSORY NOTE

         The undersigned,  UMDN, Inc., a Delaware corporation ("Payor"),  hereby
promises  to pay to Kent and Starla  Keith,  or their  order  ("Payee"),  at 217
Ashland Avenue, Santa Monica, California 90405 or at such other address as Payee
may  hereafter  specify in a written  notice to Payor,  on the Due Date (as such
term is defined  below),  in lawful money of the United States of America and in
immediately  available  funds, a sum equal to the aggregate  principal amount of
the advances  (the  "Advances")  that are made by Payee to Payor at any time and
from time to time  following  the date hereof  through the date of such payment.
Payor  further  promises to pay to Payee on the Due Date  interest on the unpaid
principal amount of the Advances  outstanding from time to time calculated at an
annual rate of 8 % from the date of each such Advance  until all of the Advances
are paid in full. The Due Date shall be the date on which Payee demands payment,
which  demand may not be made until the second  anniversary  of the date hereof,
November 30, 2001, which is the date of the first Advance.  Payee agrees to make
available under the terms of this note, funds in the amount of $350,000.

         Payor may prepay  all or any  portion of this Note at any time and from
time to time; any such prepayment shall be applied first to all interest accrued
and  unpaid on the  principal  amount  hereof  and then to the  oldest  Advances
outstanding in the order in which such Advances were originally made.

         If any of the  following  events  (each,  an "Event of Default")  shall
occur:  (i) a decree or order by a court  having  jurisdiction  in the  premises
shall have been  entered  for relief in respect of Payor  under  Title 11 of the
United States Code, as now constituted or as hereafter  amended (the "Bankruptcy
Code"),  or under any other  applicable  Federal  or State law,  or a  receiver,
custodian, liquidator, assignee, trustee, sequestrator or other similar official
of Payor or of any  substantial  part of its assets or property  shall have been
appointed and any such decree or order shall continue unstayed and in effect for
a period of sixty (60)  consecutive  calendar  days;  or (ii) Payor shall file a
petition or answer or consent seeking relief under the Bankruptcy Code, or under
any other  applicable  Federal  or State  law,  or consent to the filing of such
petition or the  appointment  of a receiver,  custodian,  liquidator,  assignee,
trustee, sequestrator or similar official of Payor or of any substantial part of
its assets or property;  or (iii) Payor shall make an assignment for the benefit
of  creditors or admit in writing its  inability  to pay its debts  generally as
they become due or take action in furtherance of any such action;  or (iv) Payor
shall  discontinue  the  active  conduct  of its  business  for a period  of ten
consecutive  days or more; or (v) the dissolution or liquidation of Payor;  then
the entire outstanding  principal balance hereof,  together with all accrued and
unpaid  interest   thereon,   shall  be  immediately  due  and  payable  without
presentment,  demand,  protest or other  notice and Payee may proceed to protect
and  enforce  Payee's  rights  either by suit in equity or by action at law,  or
both,  or in aid of the exercise of any power granted in this Note or proceed to
enforce any other legal or equitable right of Payee hereunder.

         Payor,  for  itself  and  its  legal  representatives,  successors  and
assigns,  expressly waives, to the extent not specifically  provided for herein,

<PAGE>

presentment,  protest, demand, notice of dishonor, notice of nonpayment,  notice
of  maturity,  notice of protest,  presentment  for the purpose of  accelerating
maturity and diligence in collection.

         If it should become necessary or advisable to employ counsel to collect
this Note or to enforce the rights of Payee  hereunder,  Payor agrees to pay the
reasonable  attorneys' fees and costs of the holder hereof,  whether or not suit
is brought.  Further,  all attorneys' fees incurred by Payee in enforcement of a
judgment are recoverable  separately from any attorneys' fees as aforementioned.
In addition,  this  post-judgment  attorneys'  fees  provision is intended to be
severable  from the other  provisions  of this Note and is further  intended  to
survive any judgment and is not to be deemed merged into such judgment.

         This Note may only be changed,  modified,  amended or  terminated  by a
writing signed by both parties.

         This  Note  shall  be  governed  by,  and  construed  and  enforced  in
accordance  with,  the internal  laws of the State of  California  applicable to
instruments  made and to be  performed  entirely  in such  jurisdiction  without
giving effect to the conflicts of laws principles thereof.

                                                     UMDN, Inc.

                                                     By:  /s/
                                                         -----------------------
                                                         Kent Keith, PresidentEXHIBIT 10.7

                            2002 STOCK OPTION PLAN OF
                                   UMDN, INC.

UMDN, Inc., a corporation organized under the laws of the State of Delaware (the
"Company"), hereby adopts this 2002 Stock Option Plan (the "Plan"). The purposes
of this Plan are as follows:

     (1) To further the growth, development and financial success of the Company
by providing additional incentives to its Non-Employee Directors,  Employees (as
such terms are defined below) and consultants by assisting them to become owners
of capital  stock of the Company and thus  permitting  them to benefit  directly
from its growth, development and financial success.

     (2) To enable the Company to obtain and retain the  services of the type of
directors,  employees and  consultants  considered  essential to the  long-range
success of the Company by providing and offering them an  opportunity  to become
owners of capital stock of the Company under options, including options that are
intended  to qualify as  "incentive  stock  options"  under  Section  422 of the
Internal Revenue Code of 1986, as amended.

                                    ARTICLE I

                                   DEFINITIONS

     1.1  GENERAL. Whenever the following terms are used in this Plan, they have
the  meanings  specified  below  unless the  context  clearly  indicates  to the
contrary.  The  masculine  pronoun  includes the  feminine  and neuter,  and the
singular includes the plural, where the context so indicates.

     1.2  BOARD. "Board" means the Board of Directors of the Company.

     1.3  CODE. "Code" means the Internal Revenue Code of 1986, as amended.

     1.4  COMMITTEE. "Committee" means a Committee of the Board appointed as
provided in Section 6.1 or, if a Committee is not appointed, the Board.

     1.5  COMPANY. "Company" means UMDN, Inc. In addition, "Company" means any
corporation  assuming or issuing new employee stock options in substitution  for
Options  outstanding under the Plan, in a transaction to which Section 424(a) of
the Code applies.

     1.6  EMPLOYEE. "Employee" means any employee (as defined in accordance with
the regulations and revenue rulings then applicable under Section 3401(c) of the
Code) of the Company or any of its  Subsidiaries,  whether  such  employee is so
employed at the time this Plan is adopted or becomes so employed  subsequent  to
the adoption of this Plan, and includes  employees who are directors or officers
of the Company or any such Subsidiary.

     1.7  EXCHANGE ACT. "Exchange Act" means the Securities Exchange Act of
1934, as amended.

<PAGE>

     1.8  INCENTIVE  STOCK  OPTION.  "Incentive  Stock  Option"  means an Option
which,  when  granted,  qualifies  under  Section  422 of the Code and  which is
designated as an Incentive Stock Option by the Committee.

     1.9  NON-EMPLOYEE  DIRECTOR.  "Non-Employee  Director"  has the meaning set
forth in Rule 16b-3 promulgated under the Exchange Act.

     1.10 NON-QUALIFIED OPTION. "Non-Qualified Option" means an Option, which is
not an Incentive  Stock Option,  or which ceases to be an Incentive Stock Option
through some disqualifying event and that does not cause the cancellation of the
Incentive Stock Option.

     1.11 OPTION.  "Option"  means an option to  purchase  capital  stock of the
Company granted under the Plan.  "Options"  include both Incentive Stock Options
and Non-Qualified Options.

     1.12 OPTIONEE.  "Optionee"  means  a  Non-Employee  Director,  Employee  or
consultant to whom an Option is granted under the Plan.

     1.13 PLAN. "Plan" means this 2002 Stock Option Plan of the Company.

     1.14 SECRETARY. "Secretary" means the Secretary of the Company.

     1.15 SECURITIES ACT.  "Securities Act" means the Securities Act of 1933, as
amended.

     1.16 SUBSIDIARY.  "Subsidiary"  means any  corporation  or other  entity in
which the Company owns, directly or through another  Subsidiary,  stock or other
equity  interests  possessing  fifty percent (50%) or more of the total combined
voting power of all classes of stock or other equity securities.

     1.17 TERMINATION OF CONSULTANCY.  "Termination  of  Consultancy"  means the
time when the  engagement  of  Optionee  as a  consultant  to the  Company  or a
Subsidiary or its successor  resulting from a Change Transaction  referred to in
Section  4.5  hereof  is  terminated  for any  reason,  with or  without  cause,
including,  without limitation,  resignation,  non-renewal,  discharge, death or
retirement;   but  excluding   terminations   where  there  is  a   simultaneous
commencement of employment with the Company or election of the former consultant
to the Board of Directors of the Company as a Non-Employee  Director.  Except as
provided in Section 4.5 hereof, the Committee, in its absolute discretion, shall
determine the effect of all matters and  questions  relating to  Termination  of
Consultancy,  including, but not by way of limitation, the question of whether a
Termination  of  Consultancy  resulted  from a discharge  for good cause and all
questions of whether  particular  leaves of absence  constitute  Terminations of
Consultancy.  Notwithstanding  any other provision of this Plan, the Company has
an absolute and unrestricted  right to terminate a consultant's  services at any
time for any  reason  whatsoever,  with or without  cause,  except to the extent
expressly provided otherwise in writing.

                                       2
<PAGE>

     1.18 TERMINATION OF EMPLOYMENT. "Termination of Employment" means the time
when the employee-employer relationship or directorship between the Optionee and
the  Company  or its  Subsidiaries  or its  successor  resulting  from a  Change
Transaction referred to in Section 4.5 hereof is terminated for any reason, with
or without  cause,  including,  but not by way of  limitation,  a termination by
resignation,  discharge,  non-renewal,  death or  retirement,  but excluding (i)
terminations where there is a simultaneous reemployment or continuing employment
of an  Optionee  by the  Company,  (ii)  at  the  discretion  of the  Committee,
terminations  which  result in a temporary  severance  of the  employee-employer
relationship,  and (iii) at the discretion of the Committee,  terminations which
are followed by the simultaneous  establishment of a consulting  relationship by
the Company or a subsidiary  with the former  employee or by the election of the
former  employee  to the Board of  Directors  of the  Company as a  Non-Employee
Director.  Except as  provided  in Section 4.5  hereof,  the  Committee,  in its
absolute  discretion,  shall  determine  the effect of all matters and questions
relating to Termination of Employment,  including, but not by way of limitation,
the question of whether a Termination  of  Employment  resulted from a discharge
for good  cause,  and all  questions  of  whether  particular  leaves of absence
constitute Terminations of Employment;  provided, however, that, with respect to
Incentive Stock Options,  a leave of absence,  change in status from an Employee
to  an  independent   contractor  or  other  change  in  the   employee-employer
relationship  shall  constitute a Termination of Employment if and to the extent
that  such  leave of  absence,  change  in  status  or other  change  interrupts
employment  for the  purposes  of  Section  422(a)(2)  of the  Code and the then
applicable  regulations and revenue rulings under said Section.  Notwithstanding
any other  provision of this Plan, the Company has an absolute and  unrestricted
right  to  terminate  an  Employee's  employment  at any  time  for  any  reason
whatsoever,  with or  without  cause,  except to the extent  expressly  provided
otherwise in writing.

                                   ARTICLE II

                             SHARES SUBJECT TO PLAN

     2.1  SHARES  SUBJECT TO PLAN.  The shares of stock subject to Options shall
be authorized but unissued shares and reacquired  shares of the Company's Common
Stock, par value $.0001 per share (the "Common Stock").  The aggregate number of
shares  that may be issued  upon  exercise  of Options  shall not exceed  twenty
percent of the total number of shares of the Company's Common Stock  outstanding
at the time of the  calculation  thereof,  excluding  all shares of Common Stock
then held in the  Treasury of the  Company;  provided,  however,  that the total
number of shares of Common  Stock that may be issued  upon  exercise  of Options
that are incentive  stock options under Section 422 of the Code shall not exceed
2,000,000, subject to the last sentence of Section 2.3 hereof.

     2.2  UNEXERCISED  OPTIONS.  If any Option  expires or is  canceled  without
having been fully exercised,  a new Option may be granted hereunder,  subject to
the  limitations  of Sections 2.1 and 2.2,  with respect to the number of shares
subject  to such  expired  or  cancelled  Option  as to which  such  expired  or
cancelled Option was not exercised prior to its expiration or cancellation.

                                       3
<PAGE>

     2.3  CHANGES  IN  COMPANY'S  SHARES.  In case the  Company  shall (i) pay a
dividend in shares of Common  Stock or make a  distribution  in shares of Common
Stock, (ii) subdivide its outstanding  shares of Common Stock, (iii) combine its
outstanding  shares of Common  Stock  into a smaller  number of shares of Common
Stock, or (iv) issue, by reclassification of its shares of Common Stock or other
securities of the Company  (including  any such  reclassification  in connection
with  a  consolidation   or  merger  in  which  the  Company  is  the  surviving
corporation),  the number of shares of Common Stock purchasable upon exercise of
an Option  outstanding  immediately  prior thereto shall be adjusted so that the
Optionee  shall be  entitled  to receive the kind and number of shares of Common
Stock or other securities of the Company which Optionee would have owned or have
been  entitled to receive  after the  happening  of any of the events  described
above, had such Option been exercised immediately prior to the happening of such
event or any record date with respect  thereto.  Such  adjustment  in the Option
shall be made  without  change in the total  exercise  price  applicable  to the
Option or the  unexercised  portion of the Option  (except for any change in the
aggregate price resulting from  rounding-off of share  quantities or prices) but
with any necessary corresponding  adjustment in Option exercise price per share;
provided,  however, in the case of Incentive Stock Options, each such adjustment
shall be made in such manner as not to  constitute a  "modification"  within the
meaning of Section  424(h)(3) of the Code. An  adjustment  made pursuant to this
Section 2.3 shall become effective  immediately after the effective date of such
event  retroactive  to the  record  date,  if any,  for  such  event.  Any  such
adjustment made by the Committee shall be final and binding on the Optionee, the
Company  and all  interested  parties.  In any of the events  referred to in the
first  sentence of this Section 2.3, the  Committee  shall also adjust,  in such
manner as it shall  deem  equitable,  the  number  and type of shares  (or other
securities or property) that may thereafter be made the subject of Options to be
granted thereafter under the Plan.

                                   ARTICLE III

                               GRANTING OF OPTIONS

     3.1  ELIGIBILITY.  Any Non-Employee Director, Employee or consultant of the
Company shall be eligible to be granted Options,  except as provided in Sections
3.3 and 6.1. Each  Non-Employee  Director of the Company shall be eligible to be
granted Options at the times and in the manner set forth in Section 3.4(d).

     3.2  DISQUALIFICATION.  No person may be granted an Incentive  Stock Option
under  this  Plan if such  person,  at the time the  Incentive  Stock  Option is
granted, owns stock possessing more than ten percent (10%) of the total combined
voting  power  of all  classes  of  stock of the  Company  or any then  existing
subsidiary  unless such  Incentive  Stock Option (i) conforms to the  applicable
provisions  of  Section  422 of the Code and (ii) is priced in  accordance  with
Section 4.2(a) hereof.  No consultant may be granted  Options under this Plan if
the primary  services of such  consultant  are provided in  connection  with the
offer and sale of securities in a capital raising transaction.

     3.3  QUALIFICATION  OF INCENTIVE  STOCK OPTIONS.  No Incentive Stock Option
shall be granted to any person who is not an Employee.

                                       4
<PAGE>

     3.4  GRANTING OF OPTIONS.

          (a) The Committee shall from time to time, in its absolute discretion:

            (i)   Determine   which   Employees,   Non-Employee   Directors  and
          consultants  (including  those to whom  Options  have been  previously
          granted under the Plan) are to be granted Options;

            (ii)  Determine  the number of shares to be subject to such  Options
          granted to such selected persons; and

            (iii) Determine the terms and conditions of such Options, consistent
          with the Plan.

          (b)  Upon  the  selection  of a  Non-Employee  Director,  Employee  or
     consultant  to be granted an  Option,  the  Committee  shall  instruct  the
     Secretary to issue such Option and may impose such  conditions on the grant
     of such Option as it deems appropriate.  Without limiting the generality of
     the preceding  sentence,  the Committee  may, in its discretion and on such
     terms as it deems  appropriate,  require as a condition  to the grant of an
     Option  to an  Employee  or  consultant  that the  Employee  or  consultant
     surrender for  cancellation  some or all of the  unexercised  Options which
     have been  previously  granted to him under this Plan or  otherwise or that
     the Optionee  refrain from competing with the Company so long as any of his
     Options remain  outstanding and unexercised.  An Option, the grant of which
     is  conditioned  upon such  surrender,  may have an option  price lower (or
     higher) than the exercise price of such surrendered  Option or other award,
     may  cover  the same (or a lesser  or  greater)  number  of  shares as such
     surrendered  Option or other  award,  may  contain  such other terms as the
     Committee  deems  appropriate,  and shall be exercisable in accordance with
     its terms, without regard to the number of shares,  price,  exercise period
     or any other term or condition of such surrendered Option or other award.

          (c) Any Incentive Stock Option granted under this Plan may be modified
     by the Committee to disqualify  such option from treatment as an "incentive
     stock option"  under Section 422 of the Code in which event such  Incentive
     Stock Option shall thereafter be a Non-Qualified Option.

          (d) When a  Non-Employee  Director is initially  elected to the Board,
     each such new  Non-Employee  Director  automatically  shall be  granted  an
     Option to purchase one hundred  thousand  (100,000)  shares of Common Stock
     (subject to  adjustment  as provided in Section  2.4) on the date of his or
     her  election to the Board at an exercise  price of 100% of the Fair Market
     Value (as defined in Section 4.2(b) hereof) on such date. Such Option shall
     vest and have such other  terms as are  described  in Section  4.3  hereof.
     Members of the Board who are  Employees  who  subsequently  retire from the
     Company and remain on the Board will not receive an Option  grant  pursuant
     to this Section 3.4(d).

                                       5
<PAGE>

                                   ARTICLE IV

                                TERMS OF OPTIONS

     4.1  OPTION  AGREEMENT.  Each Option shall be evidenced by a written  Stock
Option,  which  shall be executed  by an  authorized  Officer of the Company and
which shall contain such terms and conditions as the Committee shall  determine,
consistent with the Plan. Stock Options evidencing Incentive Stock Options shall
contain such terms and conditions as may be necessary to qualify such Options as
"Incentive  Stock  Options"  under Section 422 of the Code.  Each  Optionee,  by
accepting a Stock Option shall be deemed to acknowledge  and agree to all of the
terms and conditions thereof.

     4.2  OPTION PRICE.

          (a) The price of the shares subject to each Option shall be set by the
     Committee;  provided,  however,  that the price per share for an  Incentive
     Stock  Option  shall not be less than 100% of the fair market value of such
     shares on the date such Option is granted, or 110% of the fair market value
     of such  shares  on the  date  such  Option  is  granted  in the case of an
     individual  then owning  (within the meaning of Section 424(d) of the Code)
     more than 10% of the total combined voting power of all classes of stock of
     the Company or any subsidiary.

          (b) For purposes of the Plan,  the fair market value of a share of the
     Company's  stock as of a given date ("Fair Market Value") shall be: (i) the
     closing price of a share of the Company's  stock on the principal  exchange
     on which shares of the Company's  stock are then  trading,  if any, on such
     date,  or,  if  shares  were  not  traded  on such  date,  then on the next
     preceding  trading day during which a sale occurred;  or (ii) if such stock
     is not  traded on an  exchange  but is  quoted  on  NASDAQ  or a  successor
     quotation  system,  the last  sale  price as  reported  by  NASDAQ  or such
     successor  quotation system;  (iii) if such stock is not publicly traded on
     an exchange and not quoted on NASDAQ or a successor  quotation system,  the
     mean between the closing bid and asked prices for the stock on such date as
     determined in good faith by the Committee;  or (iv) if the Company's  stock
     is not publicly traded,  the fair market value established by the Committee
     acting in good faith.

     4.3  OPTION VESTING.

          (a) Subject to the  provisions  of Section 3.4 (d) hereof,  the period
     during  which the right to  exercise an Option in whole or in part vests in
     the Optionee  shall be set by the Committee and the Committee may determine
     that an Option  may not be  exercised  in whole or in part for a  specified
     period  after it is  granted.  At any time after  grant of an  Option,  the
     Committee  may, in its sole  discretion  and subject to whatever  terms and
     conditions it selects,  accelerate the period during which an Option vests.
     Notwithstanding   the  foregoing,   all  Options  granted  to  Non-Employee
     Directors shall become exercisable in cumulative annual installments of 25%
     on the  date  of  grant  and 25% on each of the  first,  second  and  third

                                       6
<PAGE>

     anniversaries  thereof,  and the term of each such Option shall be ten (10)
     years without variation or acceleration,  except (i) as provided in Section
     4.5, (ii) that the Board may authorize the  acceleration of Options granted
     to a Non-Employee  Director upon the retirement of a Non-Employee  Director
     and (iii) that such Option shall terminate immediately upon removal of such
     Non-Employee  Director  with  cause  by the  shareholders  of  the  Company
     pursuant to Section 141(k) of the Delaware  General  Corporation Law or any
     successor thereto.

          (b) No portion of an Option that is  unexercisable  at  Termination of
     Employment or Termination of Consultancy,  as applicable,  shall thereafter
     become  exercisable,  except as may be otherwise  provided by the Committee
     with respect to Options  granted to Employees or  consultants  in the Stock
     Option or in a resolution adopted following the grant of the Option.

          (c) To the extent that the  aggregate  Fair Market Value of stock with
     respect to which Incentive Stock Options (within the meaning of Section 422
     of the  Code,  but  without  regard  to  Section  422(d)  of the  Code) are
     exercisable  for the first time by an  Optionee  during any  calendar  year
     (under the Plan and all other  incentive stock option plans of the Company)
     exceeds $100,000, such Options shall be treated as Non-Qualified Options to
     the extent  required by Section 422 of the Code.  The rule set forth in the
     preceding  sentence  shall be applied by taking Options into account in the
     order in which they were granted.  For purposes of this Section 4.3(c), the
     Fair  Market  Value of stock shall be  determine  as of the time the Option
     with respect to such stock is granted.

     4.4  EXPIRATION OF OPTIONS

          (a) No Incentive Stock Option may be exercised to any extent by anyone
     after the first to occur of the following events:

            (i) the later of the  expiration of ten (10) years from the date the
          Option was granted (five (5) years in case of an individual  owning at
          the time of grant  (within the meaning of Section  424(d) of the Code)
          more than 10% of the total  combined  voting  power of all  classes of
          stock of the Company or any Subsidiary); or

            (ii) except in the case of any Optionee who is disabled  (within the
          meaning of Section  22(e)(3)  of the Code),  the  expiration  of three
          months from the date of the  Optionee's  Termination of Employment for
          any reason other than such  Optionee's  death unless the Optionee dies
          within said  three-month  period,  in which event the Incentive  Stock
          Option  shall  continue  to be  exercisable  until it may no longer be
          exercised pursuant to (i) above; or

            (iii) in the case of an Optionee who is disabled (within the meaning
          of Section  22(e)(3) of the Code), the expiration of one year from the
          date of the Optionee's  Termination of Employment for any reason other

                                       7
<PAGE>

          than such  Optionee's  death unless the Optionee  dies within said one
          year period,  in which event the Incentive Stock Option shall continue
          to be exercisable until it may no longer be exercised  pursuant to (i)
          above.

          (b) Subject to the provisions of Section  4.4(a),  the Committee shall
     provide,  in terms of each individual Option,  when such Option expires and
     becomes unexercisable.

     4.5  MERGER, CONSOLIDATION,  ACQUISITION OR CHANGE IN CONTROL. In the event
of the merger or consolidation  of the Company with or into another  corporation
in which the Company is not the surviving  corporation,  or the  acquisition  by
another  corporation  or person  of all or  substantially  all of the  Company's
assets  or at  least  eighty  percent  of  its  then  outstanding  Common  Stock
(collectively,   a  "Change  Transaction"),   all  Options  theretofore  granted
hereunder shall immediately  fully vest and become  exercisable as to all shares
of Common Stock covered thereby,  notwithstanding  Sections 4.3(a) or 4.3(b), or
any installment provisions of such Options, and such Options shall be and remain
exercisable  for a period of thirty (30) days following such Change  Transaction
and shall terminate at the close of business on the thirtieth day following such
Change  Transaction.  Upon  the  exercise  of the  Options  following  a  Change
Transaction,  Optionees  shall be  entitled  to  receive  the kind and amount of
shares,  other  securities,   cash  or  property  receivable  upon  such  Change
Transaction by a holder of the number of shares of Common Stock which might have
been  purchased  upon  exercise of the Option  immediately  prior to such Change
Transaction  and  shall  have no other  conversion  rights.  In any such  event,
effective   provision   shall  be  made  in  the   certificate  or  articles  of
incorporation  of  the  surviving  corporation,  in  any  contract  of  sale  or
conveyance,  or  otherwise,  so  that so far as  appropriate  and as  nearly  as
reasonably  may be, the  provisions  set forth herein for the  protection of the
rights of Optionees shall thereafter be made applicable.

                                    ARTICLE V

                               EXERCISE OF OPTIONS

     5.1. PERSON ELIGIBLE TO EXERCISE. During the lifetime of the Optionee, only
he, she, or his or her legal  representative  may exercise an Option  granted to
him or her,  or any  portion  thereof.  After  the  death of the  Optionee,  any
exercisable  portion  of an Option  may,  prior to the time  when  such  portion
becomes  unexercisable  under  Section  4.4, be exercised by his or her personal
representative or by any person empowered to do so under the deceased Optionee's
will or under the then applicable laws of descent and distribution.

     5.2  PARTIAL EXERCISE.  At any time and from time to time prior to the time
when any exercisable  portion thereof becomes  unexercisable  under Section 4.4,
such Option or portion  thereof may be exercised in whole or in part;  provided,
however that the Company  shall not be required to issue  fractional  shares and
the Committee may, by the terms of the Option,  require any partial  exercise to
be with respect to a specified minimum number of shares.

     5.3  MANNER OF EXERCISE.  An exercisable Option, or any exercisable portion
thereof,  may be  exercised  solely by delivery to the  Secretary  or his or her
office  of all of the  following  prior to the time  when  such  Option  or such
portion becomes unexercisable under Section 4.4:

                                       8
<PAGE>

          (a) The original Stock Option.  If the Optionee is not exercising such
     Option for all the shares that are purchasable  thereunder  (whether or not
     vested),  the Company shall  annotate the original  Stock Option to specify
     the number of shares with  respect to which it has been  exercised  and the
     date of such  exercise and shall  return the  original  Stock Option to the
     Optionee.

          (b) Notice in writing  signed by the  Optionee  or other  person  then
     entitled to exercise  such Option or portion,  stating  that such Option or
     portion is  exercised,  such notice  complying  with all  applicable  rules
     established by the Committee.

          (c) Full  payment (in cash or by check) for the shares with respect to
     which such Option or portion is hereby exercised.  At the discretion of the
     Committee (or the Board,  in the case of Options  granted to members of the
     Committee),  the terms of the Option may (i) allow payment,  in whole or in
     part, through the delivery of shares of Common Stock owned by the Optionee,
     duly  endorsed  for transfer to the Company with a Fair Market Value on the
     date of delivery  equal to the  aggregate  exercise  price of the Option or
     exercised  portion  thereof;  (ii)  subject to the timing  requirements  of
     Section 5.4, allow payment,  in whole or in part,  through the surrender of
     shares of Common Stock then  issuable  upon exercise of the Option having a
     Fair Market  Value on the date of Option  exercise  equal to the  aggregate
     exercise  price of the Option or  exercised  portion  thereof;  (iii) allow
     payment,  in whole or in part, through the delivery of property of any kind
     which constitutes good and valuable  consideration;  (iv) allow payment, in
     whole or in part,  through the delivery of a full recourse  promissory note
     bearing  interest  (at no less than such rate as shall  then  preclude  the
     imputation  of interest  under the Code) and payable upon such terms as may
     be  prescribed  by  the  Committee;   or  (v)  allow  payment  through  any
     combination of the  consideration  provided in the foregoing  subparagraphs
     (i), (ii),  (iii) and (iv). In the case of a promissory note, the Committee
     or the Board may also  prescribe  the form of such note and the security to
     be given for such  note.  The  Option  may not be  exercised,  however,  by
     delivery of a  promissory  note or by a loan from the Company when or where
     such loan or other extension of credit is prohibited by law;

          (d)  Such  representations  and  documents  as the  Committee,  in its
     absolute discretion, deems necessary or advisable to effect compliance with
     all  applicable  provisions of the  Securities Act and any other federal or
     state  securities laws or  regulations.  The Committee may, in its absolute
     discretion,  also take whatever  additional actions it deems appropriate to
     effect such compliance,  including, without limitation,  placing legends on
     share certificates and issuing  stop-transfer orders to transfer agents and
     registrars; and

          (e) In the event that the Option or portion thereof shall be exercised
     pursuant to Section 5.1 by any person or persons  other than the  Optionee,
     appropriate  proof of the right of such person or persons to  exercise  the
     Option or portion thereof.

                                       9
<PAGE>

     5.4  CONDITIONS  TO  ISSUANCE  OF STOCK  CERTIFICATES.  The shares of stock
issuable and deliverable upon the exercise of an Option, or any portion thereof,
may be either  previously  authorized but unissued  shares or issued shares that
the Company has then  reacquired.  The Company shall not be required to issue or
deliver any certificate or  certificates  for shares of stock purchased upon the
exercise of any Option or portion  thereof  prior to  fulfillment  of all of the
following conditions:

          (a)  There  is  available  an  exemption  from  registration  or other
     qualification of such shares under any state or federal securities laws, or
     there has been completed a  registration  or  qualification  of such shares
     under  any  state  or  federal  securities  laws or  under  the  rules  and
     regulations  of  the  Securities  and  Exchange  Commission  or  any  other
     government  regulatory  body,  which the Committee  shall,  in its absolute
     discretion, deem necessary or advisable;

          (b) The obtaining of any approval or other clearance from any state or
     federal  government  agency  which the  Committee  shall,  in its  absolute
     discretion, determine to be necessary or advisable;

          (c) The payment to the Company of all amounts  which it is required to
     withhold under federal, state, or local law in connection with the exercise
     of the Option in accordance with Section 7.4 hereof.

     5.5  TRANSFER RESTRICTIONS.  The Committee, in its absolute discretion, may
impose such restrictions on the  transferability  of the shares purchasable upon
the exercise of an Option as it deems appropriate. Any such restriction shall be
set  forth  in  the  respective  Stock  Option  and  may be  referred  to on the
certificates  evidencing such shares.  The Committee may require the Employee to
give the Company prompt notice of any disposition of shares of stock acquired by
exercise of an Incentive Stock Option within two years from the date of granting
such Option, or one year after the transfer of such shares to such Employee. The
Committee  may  direct  that the  certificates  evidencing  shares  acquired  by
exercise  of an  Option  refer to such  requirements  to give  prompt  notice of
disposition.

     5.6  RIGHTS AS STOCKHOLDERS.  The holders of Options shall not be, nor have
any of the rights or privileges  of,  stockholders  of the Company in respect to
any shares  purchasable  upon the  exercise of any part of an Option  unless and
until  certificates  representing such shares have been issued by the Company to
such holders.

                                       10
<PAGE>

                                   ARTICLE VI

                                 ADMINISTRATION

     6.1  COMMITTEE.  The Committee  shall consist of at least two  Non-Employee
Directors,  appointed  by and  holding  office  at the  pleasure  of the  Board.
Appointment  of  Committee   members  shall  be  effective  upon  acceptance  of
appointment.  Committee  members  may resign at any time by  delivering  written
notice to the  Board and may be  replaced  at any time by the  Board.  The Board
shall fill vacancies in the Committee.

         No person shall be eligible to serve on the Compensation Committee
unless he is then a Non-Employee Director and an "outside director" for purposes
of Section 162(m) of the Code.

     6.2  DUTIES  AND POWERS OF  COMMITTEE.  The  Committee  shall  conduct  the
general  administration  of the  Plan in  accordance  with its  provisions.  The
Committee  shall have the power to  interpret  the Plan and the  Options  and to
adopt or amend such rules for the administration, interpretation and application
of the Plan as are  consistent  therewith and to interpret,  amend or revoke any
such rules.  The  Committee may  accelerate  the exercise date of any Option and
determine  the  right of any  person  to  exercise  the  rights on behalf of any
Optionee. Notwithstanding the foregoing, the full Board, acting by a majority of
its members in office,  other than the members of the  Committee,  shall conduct
the  general  administration  of the Plan with  respect  to  Options  granted to
members  of the  Committee.  Any such  interpretations  and  rules in  regard to
Incentive  Stock Options shall be consistent  with the basic purpose of the Plan
to grant  "Incentive  Stock  Options"  within the  meaning of Section 422 of the
Code.  In its  absolute  discretion,  the Board may at any time and from time to
time  exercise  any and all rights and duties of the  Committee  under this Plan
except  with  respect to matters  which under Rule 16b-3  promulgated  under the
Exchange Act or Section  162(m) of the Code, or any  regulations or rules issued
thereunder,  are  required  to be  determined  in  the  sole  discretion  of the
Committee.

     6.3  MAJORITY RULE. The Committee shall act by a majority of its members in
office.  The Committee may act either by vote at a meeting or by a memorandum or
other written instrument signed by a majority of the members of the Committee.

     6.4  COMPENSATION;  PROFESSIONAL ASSISTANCE; GOOD FAITH ACTIONS. Members of
the Committee shall receive such  compensation  for their services as members as
may be determined by the Board. All expenses and liabilities incurred by members
of the  Committee in  connection  with the  administration  of the Plan shall be
borne by the Company.  The Committee may, with the approval of the Board, employ
attorneys, consultants,  accountants,  appraisers, brokers or other persons. The
Committee,  the Company and its officers and directors shall be entitled to rely
upon the advice,  opinions or valuations of any such persons.  All actions taken
and all  interpretations  and determinations made by the Committee in good faith
shall be final  and  binding  upon all  Optionees,  the  Company  and all  other
interested  persons.  No member of the Committee shall be personally  liable for
any action,  determination or interpretation  made in good faith with respect to
the Plan or the Options.  The Company shall indemnify,  defend and hold harmless

                                       11
<PAGE>

each  member of the  Committee  against any cost or expense  (including  counsel
fees)  or  liability  (including  any sum  paid in  settlement  of a claim  with
approval of the Committee) arising out of any action,  omission or determination
relating  to the  Plan,  unless,  in  either  case,  such  action,  omission  or
determination  was  taken  or made by  such  member  in bad  faith  and  without
reasonable belief that it was in the best interests of the Company.

                                   ARTICLE VII

                                OTHER PROVISIONS

     7.1  OPTIONS NOT TRANSFERABLE.  Options shall not be transferable except by
testamentary  will  or the  laws of  descent  and  distribution,  and  shall  be
exercisable  during any Optionee's  lifetime only by the Optionee  regardless of
any community  property interest therein of the spouse of the Optionee,  or such
spouse's  successors  in  interest.  If the  spouse of the  Optionee  shall have
acquired a  community  property  interest  in an Option  pursuant  to a domestic
relations  order as  defined in the Code in Title 1 of the  Employee  Retirement
Income  Security  Act of 1974,  as  amended,  the  Optionee,  or the  Optionee's
permitted  successors  in  interest,  may  exercise  the Option on behalf of the
spouse of the  Optionee  or such  spouse's  successors  in  interest.  Except as
permitted by the preceding sentence,  no Option granted under the Plan or any of
the rights and privileges  thereby  conferred  shall be  transferred,  assigned,
pledged or  hypothecated  in any way (whether by operation of law or otherwise),
and  no  such  Option,  right  or  privilege  shall  be  subject  to  execution,
attachment, or similar process. Upon any attempt so to transfer, assign, pledge,
hypothecate  or  otherwise  dispose of the Option,  or of any right or privilege
conferred  thereby,  contrary to the provisions  hereof, or upon the levy of any
attachment or similar process upon such Option,  right or privilege,  the Option
and such rights and privileges shall immediately become null and void.

     7.2  AMENDMENT,  SUSPENSION  OR  TERMINATION  OF THE PLAN.  The Plan may be
wholly or partially  amended or otherwise  modified,  suspended or terminated at
any time or from time to time by the Board or the Committee. Without approval of
the Company's  stockholders,  however, no action of the Committee may, except as
provided in Sections 2.3 and 4.5,  increase the limits imposed in Section 2.1 on
the maximum  number of shares which may be issued under this Plan, and no action
of the Committee may be taken that would otherwise require stockholder  approval
as a  matter  of  applicable  laws,  regulation  or  rule.  Notwithstanding  the
foregoing,  the  provisions of this Plan relating to Option grants to members of
the  Committee,  including the amount,  price and timing  thereof,  shall not be
amended  more than once in any  six-month  period  other  than to  comport  with
changes in the Code, the Employee  Retirement  Income Security Act, the Exchange
Act or the respective rules  thereunder.  Neither the amendment,  suspension nor
termination of the Plan shall,  without the consent of the holder of the Option,
alter or impair any rights or obligations under any Option theretofore  granted.
No Option may be granted during any period of suspension or after termination of
the Plan,  and in no event may any Incentive  Stock Option be granted under this
Plan after the first to occur of the following events:

          (a) The expiration of ten (10) years from the date the Plan is adopted
     by the Board; or

                                       12
<PAGE>

          (b) The  expiration  of ten  (10)  years  from  the  date  the Plan is
     approved by the Company's stockholders under Section 7.3.

     7.3  APPROVAL OF PLAN BY STOCKHOLDERS.  This Plan will be submitted for the
approval of the Company's  stockholders within twelve (12) months after the date
of the Board's  initial  adoption of the Plan.  Options may be granted  prior to
such  stockholder  approval;  provided,  however that such Options  shall not be
exercisable  prior to the time when the Plan is  approved  by the  stockholders;
provided,  further,  that if such  approval has not been  obtained at the end of
said twelve (12)-month  period,  all Options  previously  granted under the Plan
that are Incentive Stock Options shall thereupon be converted into Non-Qualified
Options.

     7.4  TAX  WITHHOLDING.  The Company shall be entitled to require payment in
cash or deduction from other  compensation  payable to each Optionee of any sums
required by federal,  state or local tax law to be withheld  with respect to the
issuance, vesting or exercise of any Option. The Committee (or the Board, in the
case of Options  granted to members of the  Committee) may in its discretion and
in  satisfaction  of the foregoing  requirement  allow such Optionee to elect to
have the Company  withhold shares of common stock (or allow the return of shares
of common  stock)  having a Fair Market  Value equal to the sums  required to be
withheld.

     7.5  LIMITATIONS  APPLICABLE  TO SECTION 16 PERSONS  AND  PERFORMANCE-BASED
COMPENSATION.  Notwithstanding  any other  provision  of this  Plan,  any Option
awarded to an Employee or  Non-Employee  Director who is then subject to Section
16 of the Exchange Act, shall be subject to any additional limitations set forth
in any  applicable  exemptive rule under Section 16 of the Exchange Act that are
requirements  for the application of such exemptive rule, and this Plan shall be
deemed  amended  to  the  extent  necessary  to  conform  to  such  limitations.
Furthermore,  notwithstanding  any other  provision  of this  Plan,  any  Option
intended to qualify as  performance-based  compensation  as described in Section
162(m)(4)(C)  of the Code  shall be subject to any  additional  limitations  set
forth in Section  162(m) of the Code  (including any amendment to Section 162(m)
of  the  Code)  or  any  regulations  or  rulings  issued  thereunder  that  are
requirements for qualification as performance-based compensation as described in
Section  162(m)(4)(C)  of the Code, and this Plan shall be deemed amended to the
extent necessary to conform to such requirements.

     7.6  EFFECT OF PLAN UPON OTHER OPTION AND  COMPENSATION  PLANS.  Nothing in
this Plan shall be  construed to limit the right of the Company (a) to establish
any other forms of  incentives or  compensation  for employees of the Company or
(b) to grant or assume options otherwise than under this Plan in connection with
any proper corporate purpose, including, but not by way of limitation, the grant
or assumption of options in connection with the acquisition by purchase,  lease,
merger,  consolidation  or  otherwise  of the  business,  stock or assets of any
corporation, firm or association.

     7.7  COMPLIANCE  WITH LAWS.  This Plan, the granting and vesting of Options
under  this Plan and the  issuance  and  delivery  of shares of common  stock or
Options granted hereunder are subject to compliance with all applicable  federal
and state laws,  rules and  regulations  (including but not limited to state and
federal securities law and federal margin requirements) and to such approvals by
any  listing,  regulatory  or  governmental  authority as may, in the opinion of

                                       13
<PAGE>

counsel for the Company, be necessary or advisable in connection therewith.  Any
securities delivered under this Plan shall be subject to such restrictions,  and
the person acquiring such securities shall, if requested by the Company, provide
such  assurances  and  representations  to the  Company as the  Company may deem
necessary  or  desirable  to  assure   compliance  with  all  applicable   legal
requirements.  To the extent  permitted by  applicable  law, the Plan or Options
granted  hereunder shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.

     7.8  TITLES. Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Plan.

     7.9  GOVERNING  LAW.  This  Plan  and any  agreements  hereunder  shall  be
administered,  interpreted  and enforced under the internal laws of the State of
California  applicable to instruments made and to be performed  entirely therein
without regard to conflicts of laws thereof.

                                       14

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