Document:

PASSAVE INC.

                                OPTION AGREEMENT

                      MADE AS OF THE 23 DAY OF AUGUST, 2005

BETWEEN:              PASSAVE INC.

                      A company incorporated in Delaware

                      (hereinafter the "COMPANY")

                                                                 ON THE ONE PART

AND:                  Name ____________________

                      I.D. No. ________________

                      Address: ________________

                      (hereinafter the "OPTIONEE")

                                                               ON THE OTHER PART

WHEREAS           On JUNE 2003,  the Company duly adopted and the Board approved
                  Passave Inc.  2003 Israeli  Share Option Plan, a copy of which
                  is attached as EXHIBIT  A.1 hereto,  forming an integral  part
                  hereof (the "ISOP"); and -

WHEREAS           Pursuant to the ISOP, the Company has decided to grant Options
                  to  purchase  Shares of the Company to the  Optionee,  and the
                  Optionee  has agreed to such  grant,  subject to all the terms
                  and  conditions  as set  forth  in the  ISOP  and as  provided
                  herein;

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NOW, THEREFORE, it is agreed as follows:

1.     PREAMBLE AND DEFINITIONS

       1.1    The  preamble  to this  agreement  constitutes  an  integral  part
              hereof.

       1.2    Unless  otherwise  defined herein,  capitalized  terms used herein
              shall have the meaning ascribed to them in the ISOP.

2.     GRANT OF OPTIONS

       2.1    The Company hereby grants to the Optionee the number of Options as
              set forth in EXHIBIT A.2 hereto,  each Option shall be exercisable
              for one Share,  upon payment of the Purchase Price as set forth in
              EXHIBIT A.2,  subject to the terms and the conditions as set forth
              in the ISOP and as provided herein.

       2.2    The  Optionee is aware that the  Company  intends in the future to
              issue additional shares and to grant additional options to various
              entities and  individuals,  as the Company in its sole  discretion
              shall determine.

3.    PERIOD OF OPTION AND CONDITIONS OF EXERCISE

       3.1    The terms of this Option  Agreement  shall commence on the Date of
              Grant and  terminate  at the  Expiration  Date,  or at the time at
              which  the  Option  expires  pursuant  to the terms of the ISOP or
              pursuant to this Option Agreement.

       3.2    Options may be exercised only to purchase whole Shares,  and in no
              case may a fraction  of a Share be  purchased.  If any  fractional
              Share would be deliverable  upon exercise,  such fraction shall be
              rounded up one-half or less,  or otherwise  rounded  down,  to the
              nearest whole number.

4.     VESTING; PERIOD OF EXERCISE

       Subject  to the  provisions  of the ISOP,  Options  shall vest and become
       exercisable  according  to the  Vesting  Dates set forth in  EXHIBIT  A.2
       hereto,  provided  that  the  Optionee  is an  Employee  of or  providing
       services to the Company and/or its  Affiliates on the applicable  Vesting
       Date.

       All unexercised Options granted to the Optionee shall terminate and shall
       no longer be exercisable on the Expiration  Date, as described in Section
       2.12 of the ISOP.

5.     EXERCISE OF OPTIONS

       5.1    Options may be  exercised in  accordance  with the  provisions  of
              Section 10.1 of the ISOP.

       5.2    In order for the Company to issue  Shares upon the exercise of any
              of the  Options,  the Optionee  hereby  agrees to sign any and all
              documents  required by any  applicable law and/or by the Company's
              Articles of Association.

       5.3    Pursuant to Section 7.3 of the ISOP and, when applicable,  subject
              to the  provisions of Section 102,  until the  consummation  of an
              IPO, any Shares

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              acquired  upon  the  exercise  of  Options  shall  be  voted by an
              irrevocable proxy, attached as EXHIBIT A.3 hereto.

       5.4    The Company  shall not be  obligated  to issue any Shares upon the
              exercise  of an Option if such  issuance,  in the  opinion  of the
              Company,  might  constitute  a  violation  by the  Company  of any
              provision of law.

6.     RESTRICTIONS ON TRANSFER OF OPTIONS AND SHARES

       6.1    The  transfer of Options  and the  transfer of Shares to be issued
              upon exercise of the Options  shall be subject to the  limitations
              set forth in the ISOP and in the Company's Articles of Association
              and any  shareholders'  agreement to which the holders of ordinary
              shares of the Company are bound.

       6.2    With respect to any Approved 102 Option, subject to the provisions
              of Section 102 and any rules or regulation or orders or procedures
              promulgated thereunder, an Optionee shall not sell or release from
              trust any Share  received  upon the  exercise of an  Approved  102
              Option  and/or  any  share  received  subsequently  following  any
              realization of rights, including without limitation, bonus shares,
              until the lapse of the Holding  Period  required under Section 102
              of the Ordinance.  Notwithstanding  the above, if any such sale or
              release  occurs during the Holding  Period,  the  sanctions  under
              Section 102 of the  Ordinance and under any rules or regulation or
              orders or  procedures  promulgated  thereunder  shall apply to and
              shall be borne by such Optionee.

       6.3    With respect to Unapproved 102 Option,  if the Optionee  ceases to
              be employed by the Company or any  Affiliate,  the Optionee  shall
              extend to the Company and/or its Affiliate a security or guarantee
              for the  payment of tax due at the time of sale of Shares,  all in
              accordance  with the  provisions  of  Section  102 and the  rules,
              regulation or orders promulgated thereunder.

       6.4    The Optionee acknowledges that in the event Company's shares shall
              be registered  for trading in any public  market,  the  Optionee's
              right to sell Shares may be subject to  limitations  (including  a
              lock-up  period),  as  will be  requested  by the  Company  or its
              underwriters,  and the Optionee unconditionally agrees and accepts
              any such limitations.

              The  Optionee  acknowledges  that in order to  enforce  the  above
              restriction,  the  Company may impose  stop-transfer  instructions
              with respect to the exercised Shares.

       6.5    The Optionee shall not dispose of any Shares in transactions which
              violate, in the opinion of the Company, any applicable laws, rules
              and regulations.

       6.6    The Optionee  agrees that the Company  shall have the authority to
              endorse upon the  certificate  or  certificates  representing  the
              Shares such legends referring to the foregoing  restrictions,  and
              any  other  applicable  restrictions  as it may  deem

<PAGE>

              appropriate  (which do not violate the Optionee's rights according
              to this Option Agreement).

7.     TAXES; INDEMNIFICATION

       7.1    Any tax  consequences  arising  from the grant or  exercise of any
              Option,  from the payment for Shares  covered  thereby or from any
              other  event or act (of the  Company  and/or its  Affiliates,  the
              Trustee or the Optionee),  hereunder, shall be borne solely by the
              Optionee.  The Company  and/or its  Affiliates  and/or the Trustee
              shall  withhold  taxes  according  to the  requirements  under the
              applicable laws,  rules, and  regulations,  including  withholding
              taxes at  source.  Furthermore,  the  Optionee  hereby  agrees  to
              indemnify the Company and/or its Affiliates and/or the Trustee and
              hold them harmless  against and from any and all liability for any
              such  tax  or  interest  or  penalty  thereon,  including  without
              limitation,  liabilities relating to the necessity to withhold, or
              to have  withheld,  any  such tax  from  any  payment  made to the
              Optionee.

       7.2    The  Optionee  will not be  entitled  to receive  from the Company
              and/or  the  Trustee  any  Shares  allocated  or  issued  upon the
              exercise of Options prior to the full  payments of the  Optionee's
              tax  liabilities  arising from  Options  which were granted to him
              and/or  Shares  issued  upon  the  exercise  of  Options.  For the
              avoidance of doubt,  neither the Company nor the Trustee  shall be
              required to release any share  certificate  to the Optionee  until
              all payments  required to be made by the Optionee  have been fully
              satisfied.

       7.3    The receipt of the Options and the acquisition of the Shares to be
              issued  upon  the  exercise  of  the  Options  may  result  in tax
              consequences.  THE  OPTIONEE  IS ADVISED TO CONSULT A TAX  ADVISER
              WITH RESPECT TO THE TAX  CONSEQUENCES  OF RECEIVING OR  EXERCISING
              THIS OPTION OR DISPOSING OF THE SHARES.

       7.4    With  respect  to  Approved  102  Options,   the  Optionee  hereby
              acknowledges  that he is familiar  with the  provisions of Section
              102  and  the  regulations  and  rules   promulgated   thereunder,
              including without limitations the type of Option granted hereunder
              and the tax  implications  applicable to such grant.  The Optionee
              accepts the provisions of the trust  agreement  signed between the
              Company and the  Trustee,  attached  as EXHIBIT  A.4  hereto,  and
              agrees to be bound by its terms.

8.       MISCELLANEOUS

       8.1    NO OBLIGATION  TO EXERCISE  OPTIONS.  The grant and  acceptance of
              these  Options  imposes no  obligation on the Optionee to exercise
              it.

       8.2    CONFIDENTIALITY. The Optionee shall regard the information in this
              Option Agreement and its exhibits  attached hereto as confidential
              information  and the  Optionee  shall not reveal its  contents  to
              anyone  except when  required by law or for the purpose of gaining
              legal or tax advice.

<PAGE>

       8.3    CONTINUATION  OF EMPLOYMENT OR SERVICE.  Neither the ISOP nor this
              Option  Agreement shall impose any obligation on the Company or an
              Affiliate to continue  the  Optionee's  employment  or service and
              nothing in the ISOP or in this Option  Agreement shall confer upon
              the Optionee any right to continue in the employ or service of the
              Company  and/or an  Affiliate or restrict the right of the Company
              or an  Affiliate to terminate  such  employment  or service at any
              time.

       8.4    ENTIRE AGREEMENT.  Subject to the provisions of the ISOP, to which
              this Option Agreement is subject, this Option Agreement,  together
              with the exhibits hereto,  constitute the entire agreement between
              the  Optionee  and the  Company  with  respect to Options  granted
              hereunder, and supersedes all prior agreements, understandings and
              arrangements,  oral  or  written,  between  the  Optionee  and the
              Company with respect to the subject matter hereof.

       8.5    FAILURE  TO  ENFORCE - NOT A WAIVER.  The  failure of any party to
              enforce at any time any provisions of this Option Agreement or the
              ISOP shall in no way be construed to be a waiver of such provision
              or of any other provision hereof.

       8.6    PROVISIONS  OF THE ISOP.  The  Options  provided  for  herein  are
              granted  pursuant  to the ISOP and said  Options  and this  Option
              Agreement are in all respects  governed by the ISOP and subject to
              all of the terms and provisions of the ISOP.

              Any  interpretation  of  this  Option  Agreement  will  be made in
              accordance   with  the  ISOP  but  in  the  event   there  is  any
              contradiction  between the provisions of this Option Agreement and
              the ISOP, the provisions of the Option Agreement will prevail.

       8.7    BINDING  EFFECT.  The  ISOP  and this  Option  Agreement  shall be
              binding upon the heirs,  executors,  administrators and successors
              of the parties hereof.

       8.8    NOTICES.  All  notices  or  other  communications  given  or  made
              hereunder  shall be in writing and shall be delivered or mailed by
              registered  mail or delivered  by email or facsimile  with written
              confirmation  of receipt to the Optionee  and/or to the Company at
              the  addresses  shown on the  letterhead  above,  or at such other
              place as the  Company  may  designate  by  written  notice  to the
              Optionee. The Optionee is responsible for notifying the Company in
              writing of any change in the Optionee's  address,  and the Company
              shall be deemed to have  complied  with any  obligation to provide
              the  Optionee  with  notice by sending  such notice to the address
              indicated below.

Company's Signature:

Name: VICTOR VAISLEIB

Position: CEO

Signature: ________________

I, the undersigned,  hereby acknowledge receipt of a copy of the ISOP and accept
the Options subject to

<PAGE>

all of the terms  and  provisions  thereof.  I have  reviewed  the ISOP and this
Option  Agreement in its entirety,  have had an opportunity to obtain the advice
of counsel prior to executing this Option  Agreement,  and fully  understand all
provisions  of this Option  Agreement.  I agree to notify the  Company  upon any
change in the residence address indicated above.

       AUGUST 23, 2005
       ------------------        ---------------------
       Date                      Optionee's Signature

EXHIBIT A.1:      PASSAVE INC. 2003 ISRAELI SHARE OPTION PLAN

EXHIBIT A.2:      TERMS OF THE OPTION

EXHIBIT A.3:      PROXY

EXHIBIT A.4:      TRUST AGREEMENTExhibit 10.12

                  PASSAVE, INC. 2005 U.S. STOCK INCENTIVE PLAN

                          NOTICE OF STOCK OPTION AWARD

         Grantee's Name and Address:        ____________________________________

                                            ____________________________________

                                            ____________________________________

         You (the "Grantee") have been granted an option to purchase shares of
Common Stock, subject to the terms and conditions of this Notice of Stock Option
Award (the "Notice"), the Passave, Inc. 2005 U.S. Stock Incentive Plan, as
amended from time to time (the "Plan") and the Stock Option Award Agreement (the
"Option Agreement") attached hereto, as follows. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in
this Notice.

         Award Number                       ____________________________________

         Date of Award                      ____________________________________

         Vesting Commencement Date          ____________________________________

         Exercise Price per Share           $___________________________________

         Total Number of Shares Subject
         to the Option (the "Shares")       ____________________________________

         Total Exercise Price               $___________________________________

         Type of Option:                    _________     Incentive Stock Option

                                            _________ Non-Qualified Stock Option

         Expiration Date:                   ____________________________________

         Post-Termination Exercise Period:  Three (3) Months

VESTING SCHEDULE:

         Subject to the Grantee's Continuous Service and other limitations set
forth in this Notice, the Plan and the Option Agreement, the Option may be
exercised, in whole or in part, in accordance with the following schedule:

         [25% OF THE SHARES SUBJECT TO THE OPTION SHALL VEST TWELVE (12) MONTHS
AFTER THE VESTING COMMENCEMENT DATE, AND 1/48 OF THE SHARES SUBJECT TO THE
OPTION SHALL VEST ON EACH MONTHLY ANNIVERSARY OF THE VESTING COMMENCEMENT DATE
THEREAFTER.]

         During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall be suspended after the leave of absence exceeds
a period of three (3) months. Vesting of the Option shall resume upon the
Grantee's termination of the leave of absence and return to service to the
Company or a Related Entity. The Vesting Schedule of the Option shall be
extended by the length of the suspension.

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<PAGE>

         In the event of termination of the Grantee's Continuous Service for
Cause, the Grantee's right to exercise the Option shall terminate concurrently
with the termination of the Grantee's Continuous Service, except as otherwise
determined by the Administrator.

         IN WITNESS WHEREOF, the Company and the Grantee have executed this
Notice and agree that the Option is to be governed by the terms and conditions
of this Notice, the Plan, and the Option Agreement.

                                     Passave, Inc.
                                     a Delaware corporation

                                     By: _______________________________________
                                     Title: ____________________________________

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL
VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S CONTINUOUS SERVICE (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES
HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY
RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE GRANTEE'S CONTINUOUS
SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT
OF THE COMPANY OR RELATED ENTITY TO WHICH THE GRANTEE PROVIDES SERVICES TO
TERMINATE THE GRANTEE'S CONTINUOUS SERVICE, WITH OR WITHOUT CAUSE, AND WITH OR
WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN
EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE'S STATUS IS
AT WILL.

         The Grantee acknowledges receipt of a copy of the Plan and the Option
Agreement, and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts the Option subject to all of the terms
and provisions hereof and thereof. The Grantee has reviewed this Notice, the
Plan, and the Option Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Notice, and fully
understands all provisions of this Notice, the Plan and the Option Agreement.
The Grantee hereby agrees that all questions of interpretation and
administration relating to this Notice, the Plan and the Option Agreement shall
be resolved by the Administrator in accordance with Section 18 of the Option
Agreement. The Grantee further agrees to the venue selection in accordance with
Section 19 of the Option Agreement. The Grantee further agrees to notify the
Company upon any change in the residence address indicated in this Notice.

Dated: ______________________      Signed:______________________________________
                                                       Grantee

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<PAGE>

                                                      AWARD NUMBER:  ___________

                  PASSAVE, INC. 2005 U.S. STOCK INCENTIVE PLAN

                          STOCK OPTION AWARD AGREEMENT

         1.       GRANT OF OPTION. Passave, Inc., a Delaware corporation (the
"Company"), hereby grants to the Grantee (the "Grantee") named in the Notice of
Stock Option Award (the "Notice"), an option (the "Option") to purchase the
Total Number of Shares of Common Stock subject to the Option (the "Shares") set
forth in the Notice, at the Exercise Price per Share set forth in the Notice
(the "Exercise Price") subject to the terms and provisions of the Notice, this
Stock Option Award Agreement (the "Option Agreement") and the Company's 2005
U.S. Stock Incentive Plan, as amended from time to time (the "Plan"), which are
incorporated herein by reference. Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Option
Agreement.

         If designated in the Notice as an Incentive Stock Option, the Option is
intended to qualify as an Incentive Stock Option as defined in Section 422 of
the Code. However, notwithstanding such designation, the Option will qualify as
an Incentive Stock Option under the Code only to the extent the $100,000 dollar
limitation of Section 422(d) of the Code is not exceeded. The $100,000
limitation of Section 422(d) of the Code is calculated based on the aggregate
Fair Market Value of the Shares subject to options designated as Incentive Stock
Options which become exercisable for the first time by the Grantee during any
calendar year (under all plans of the Company or any Parent or Subsidiary of the
Company). For purposes of this calculation, 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 such options shall be determined as of the grant
date of the relevant option.

         2.       EXERCISE OF OPTION.

                  (a) RIGHT TO EXERCISE. The Option shall be exercisable during
its term in accordance with the Vesting Schedule set out in the Notice and with
the applicable provisions of the Plan and this Option Agreement. The Option
shall be subject to the provisions of Section 11 of the Plan relating to the
exercisability or termination of the Option in the event of a Corporate
Transaction or Change in Control. The Grantee shall be subject to reasonable
limitations on the number of requested exercises during any monthly or weekly
period as determined by the Administrator. In no event shall the Company issue
fractional Shares.

                  (b) METHOD OF EXERCISE. The Option shall be exercisable by
delivery of an exercise notice (a form of which is attached as Exhibit A) or by
such other procedure as specified from time to time by the Administrator which
shall state the election to exercise the Option, the whole number of Shares in
respect of which the Option is being exercised, and such other provisions as may
be required by the Administrator. The exercise notice shall be delivered in
person, by certified mail, or by such other method (including electronic
transmission) as determined from time to time by the Administrator to the
Company accompanied by payment of the Exercise Price. The Option shall be deemed
to be exercised upon receipt by the Company of

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<PAGE>

such notice accompanied by the Exercise Price, which, to the extent selected,
shall be deemed to be satisfied by use of the broker-dealer sale and remittance
procedure to pay the Exercise Price provided in Section 4(d), below.

                  (c)      TAXES. No Shares will be delivered to the Grantee or
other person pursuant to the exercise of the Option until the Grantee or other
person has made arrangements acceptable to the Administrator for the
satisfaction of applicable income tax and employment tax withholding
obligations, including, without limitation, such other tax obligations, if any,
of the Grantee or other person incident to the grant, vesting, or exercise of
the Option, or sale of any Shares. Upon exercise of the Option, the Company or
the Grantee's employer may offset or withhold (from any amount owed by the
Company or the Grantee's employer to the Grantee) and/or collect from the
Grantee or other person an amount sufficient to satisfy such tax withholding
obligations. Notwithstanding the foregoing, the Grantee acknowledges and agrees
on his or her own behalf and on the behalf of any other person that the Grantee
or such other person is ultimately responsible and liable for any and all tax
obligations arising hereunder.

         3.       GRANTEE'S REPRESENTATIONS. The Grantee understands that
neither the Option nor the Shares exercisable pursuant to the Option have been
registered under the Securities Act of 1933, as amended or any securities laws.
In the event the Shares purchasable pursuant to the exercise of the Option have
not been registered under the Securities Act of 1933, as amended, at the time
the Option is exercised, the Grantee shall, if requested by the Company,
concurrently with the exercise of all or any portion of the Option, deliver to
the Company his or her Investment Representation Statement in the form attached
hereto as Exhibit B.

         4.       METHOD OF PAYMENT. Payment of the Exercise Price shall be made
by any of the following, or a combination thereof, at the election of the
Grantee; provided, however, that such exercise method does not then violate any
Applicable Law and, provided further, that the portion of the Exercise Price
equal to the par value of the Shares must be paid in cash or other legal
consideration permitted by the Delaware General Corporation Law:

                  (a)      cash;

                  (b)      check;

                  (c)      if the exercise occurs on or after the Registration
Date, surrender of Shares or delivery of a properly executed form of attestation
of ownership of Shares as the Administrator may require which have a Fair Market
Value on the date of surrender or attestation equal to the aggregate Exercise
Price of the Shares as to which the Option is being exercised, provided,
however, that Shares acquired under the Plan or any other equity compensation
plan or agreement of the Company must have been held by the Grantee for a period
of more than six (6) months (and not used for another Award exercise by
attestation during such period); or

                  (d)      if the exercise occurs on or after the Registration
Date, payment through a broker-dealer sale and remittance procedure pursuant to
which the Grantee (i) shall provide written instructions to a Company-designated
brokerage firm to effect the immediate sale of some or all of the purchased
Shares and remit to the Company sufficient funds to cover the

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<PAGE>

aggregate exercise price payable for the purchased Shares and any applicable
taxes, fees, and costs associated with the exercise of the Option; and (ii)
shall provide written directives to the Company to deliver the certificates for
the purchased Shares directly to such brokerage firm in order to complete the
sale transaction.

         5.       RESTRICTIONS ON EXERCISE. The Option may not be exercised if
the issuance of the Shares subject to the Option upon such exercise would
constitute a violation of any Applicable Laws. In addition, the Option may not
be exercised until such time as the Plan has been approved by the stockholders
of the Company. If the exercise of the Option within the applicable time periods
set forth in Section 6, 7 and 8 of this Option Agreement is prevented by the
provisions of this Section 5, the Option shall remain exercisable until one (1)
month after the date the Grantee is notified by the Company that the Option is
exercisable, but in any event no later than the Expiration Date set forth in the
Notice.

         6.       TERMINATION OR CHANGE OF CONTINUOUS SERVICE. In the event the
Grantee's Continuous Service terminates, other than for Cause, the Grantee may,
but only during the Post-Termination Exercise Period, exercise the portion of
the Option that was vested at the date of such termination (the "Termination
Date"). The Post-Termination Exercise Period shall commence on the Termination
Date. In the event of termination of the Grantee's Continuous Service for Cause,
the Grantee's right to exercise the Option shall, except as otherwise determined
by the Administrator, terminate concurrently with the termination of the
Grantee's Continuous Service (also the "Termination Date"). In no event,
however, shall the Option be exercised later than the Expiration Date set forth
in the Notice. In the event of the Grantee's change in status from Employee,
Director or Consultant to any other status of Employee, Director or Consultant,
the Option shall remain in effect and the Option shall continue to vest in
accordance with the Vesting Schedule set forth in the Notice; provided, however,
with respect to any Incentive Stock Option that shall remain in effect after a
change in status from Employee to Director or Consultant, such Incentive Stock
Option shall cease to be treated as an Incentive Stock Option and shall be
treated as a Non-Qualified Stock Option on the day three (3) months and one (1)
day following such change in status. Except as provided in Sections 7 and 8
below, to the extent that the Option was unvested on the Termination Date, or if
the Grantee does not exercise the vested portion of the Option within the
Post-Termination Exercise Period, the Option shall terminate.

         7.       DISABILITY OF GRANTEE. In the event the Grantee's Continuous
Service terminates as a result of his or her Disability, the Grantee may, but
only within twelve (12) months commencing on the Termination Date (but in no
event later than the Expiration Date), exercise the portion of the Option that
was vested on the Termination Date; provided, however, that if such Disability
is not a "disability" as such term is defined in Section 22(e)(3) of the Code
and the Option is an Incentive Stock Option, such Incentive Stock Option shall
cease to be treated as an Incentive Stock Option and shall be treated as a
Non-Qualified Stock Option on the day three (3) months and one (1) day following
the Termination Date. To the extent that the Option was unvested on the
Termination Date, or if the Grantee does not exercise the vested portion of the
Option within the time specified herein, the Option shall terminate. Section
22(e)(3) of the Code provides that an individual is permanently and totally
disabled if he or she is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or

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<PAGE>

mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than twelve (12)
months.

         8.       DEATH OF GRANTEE. In the event of the termination of the
Grantee's Continuous Service as a result of his or her death, or in the event of
the Grantee's death during the Post-Termination Exercise Period or during the
twelve (12) month period following the Grantee's termination of Continuous
Service as a result of his or her Disability, the person who acquired the right
to exercise the Option pursuant to Section 9 may exercise the portion of the
Option that was vested at the date of termination within twelve (12) months
commencing on the date of death (but in no event later than the Expiration
Date). To the extent that the Option was unvested on the date of death, or if
the vested portion of the Option is not exercised within the time specified
herein, the Option shall terminate.

         9.       TRANSFERABILITY OF OPTION. The Option, if an Incentive Stock
Option, may not be transferred in any manner other than by will or by the laws
of descent and distribution and may be exercised during the lifetime of the
Grantee only by the Grantee. The Option, if a Non-Qualified Stock Option, may
not be transferred in any manner other than by will or by the laws of descent
and distribution, provided, however, that a Non-Qualified Stock Option may be
transferred during the lifetime of the Grantee by gift or pursuant to a domestic
relations order to members of the Grantee's Immediate Family to the extent and
in the manner authorized by the Administrator. Notwithstanding the foregoing,
the Grantee may designate one or more beneficiaries of the Grantee's Incentive
Stock Option or Non-Qualified Stock Option in the event of the Grantee's death
on a beneficiary designation form provided by the Administrator. Following the
death of the Grantee, the Option, to the extent provided in Section 8, may be
exercised (a) by the person or persons designated under the deceased Grantee's
beneficiary designation or (b) in the absence of an effectively designated
beneficiary, by the Grantee's legal representative or by any person empowered to
do so under the deceased Grantee's will or under the then applicable laws of
descent and distribution. The terms of the Option shall be binding upon the
executors, administrators, heirs, successors and transferees of the Grantee.

         10.      TERM OF OPTION. The Option must be exercised no later than the
Expiration Date set forth in the Notice or such earlier date as otherwise
provided herein. After the Expiration Date or such earlier date, the Option
shall be of no further force or effect and may not be exercised.

         11.      COMPANY'S RIGHT OF FIRST REFUSAL.

                  (a)      TRANSFER NOTICE. Neither the Grantee nor a transferee
(either being sometimes referred to herein as the "Holder") shall sell,
hypothecate, encumber or otherwise transfer any Shares or any right or interest
therein without first complying with the provisions of this Section 11 or
obtaining the prior written consent of the Company. In the event the Holder
desires to accept a bona fide third-party offer for any or all of the Shares,
the Holder shall provide the Company with written notice (the "Transfer Notice")
of:

                           (i)      The Holder's intention to transfer;

                           (ii)     The name of the proposed transferee;

                                       4
<PAGE>

                           (iii)    The number of Shares to be transferred; and

                           (iv)     The proposed transfer price or value and
                                    terms thereof.

If the Holder proposes to transfer any Shares to more than one transferee, the
Holder shall provide a separate Transfer Notice for the proposed transfer to
each transferee. The Transfer Notice shall be signed by both the Holder and the
proposed transferee and must constitute a binding commitment of the Holder and
the proposed transferee for the transfer of the Shares to the proposed
transferee subject to the terms and conditions of this Option Agreement.

                  (b)      BONA FIDE TRANSFER. If the Company determines that
the information provided by the Holder in the Transfer Notice is insufficient to
establish the bona fide nature of a proposed voluntary transfer, the Company
shall give the Holder written notice of the Holder's failure to comply with the
procedure described in this Section 11, and the Holder shall have no right to
transfer the Shares without first complying with the procedure described in this
Section 11. The Holder shall not be permitted to transfer the Shares if the
proposed transfer is not bona fide.

                  (c)      FIRST REFUSAL EXERCISE NOTICE. The Company shall have
the right to purchase (the "Right of First Refusal") all but not less than all,
of the Shares which are described in the Transfer Notice (the "Offered Shares")
at any time within ninety (90) days after receipt of the Transfer Notice (the
"Option Period"), provided, however, that if the Offered Shares are not Mature
Shares (as defined below) then the Option Period shall be extended by the number
of days necessary for the Offered Shares to become Mature Shares. The Offered
Shares shall be repurchased at (i) the per share price or value and in
accordance with the terms stated in the Transfer Notice (subject to Section
11(d) below) or (ii) the Fair Market Value of the Shares on the date on which
the purchase is to be effected if no consideration is paid pursuant to the terms
stated in the Transfer Notice, which Right of First Refusal shall be exercised
by written notice (the "First Refusal Exercise Notice") to the Holder. "Mature
Shares" shall mean the Shares that have been held by the Holder (and any
successor Holder) for a period of more than six (6) months.

                  (d)      PAYMENT TERMS. The Company shall consummate the
purchase of the Offered Shares on the terms set forth in the Transfer Notice
within 30 days after delivery of the First Refusal Exercise Notice; provided,
however, that in the event the Transfer Notice provides for the payment for the
Offered Shares other than in cash, the Company and/or its assigns shall have the
right to pay for the Offered Shares by the discounted cash equivalent of the
consideration described in the Transfer Notice as reasonably determined by the
Administrator. Upon payment for the Offered Shares to the Holder or into escrow
for the benefit of the Holder, the Company or its assigns shall become the legal
and beneficial owner of the Offered Shares and all rights and interest therein
or related thereto, and the Company shall have the right to transfer the Offered
Shares to its own name or its assigns without further action by the Holder.

                  (e)      ASSIGNMENT. Whenever the Company shall have the right
to purchase Shares under this Right of First Refusal, the Company may designate
and assign one or more employees, officers, directors or stockholders of the
Company or other persons or organizations, to exercise all or a part of the
Company's Right of First Refusal.

                                       5
<PAGE>

                  (f)      NON-EXERCISE. If the Company and/or its assigns do
not collectively elect to exercise the Right of First Refusal within the Option
Period or such earlier time if the Company and/or its assigns notifies the
Holder that it will not exercise the Right of First Refusal, then the Holder may
transfer the Shares upon the terms and conditions stated in the Transfer Notice,
provided that:

                           (i)      The transfer is made within forty-five (45)
days of the earlier of (A) the date the Company and/or its assigns notify the
Holder that the Right of First Refusal will not be exercised or (B) the
expiration of the Option Period; and

                           (ii)     The transferee agrees in writing that such
Shares shall be held subject to the provisions of this Option Agreement.

The Company shall have the right to demand further assurances from the Holder
and the transferee (in a form satisfactory to the Company) that the transfer of
the Offered Shares was actually carried out on the terms and conditions
described in the Transfer Notice. No Offered Shares shall be transferred on the
books of the Company until the Company has received such assurances, if so
demanded, and has approved the proposed transfer as bona fide.

                  (g)      EXPIRATION OF TRANSFER PERIOD. Following such 45-day
period, no transfer of the Offered Shares and no change in the terms of the
transfer as stated in the Transfer Notice (including the name of the proposed
transferee) shall be permitted without a new written Transfer Notice prepared
and submitted in accordance with the requirements of this Right of First
Refusal.

                  (h)      TERMINATION OF RIGHT OF FIRST REFUSAL. The provisions
of this Right of First Refusal shall terminate as to all Shares upon the
Registration Date.

                  (i)      ADDITIONAL SHARES OR SUBSTITUTED SECURITIES. In the
event of any transaction described in Sections 10 or 11 of the Plan, any new,
substituted or additional securities or other property which is by reason of any
such transaction distributed with respect to the Shares shall be immediately
subject to the Right of First Refusal, but only to the extent the Shares are at
the time covered by such right.

         12.      STOP-TRANSFER NOTICES. In order to ensure compliance with the
restrictions on transfer set forth in this Option Agreement, the Notice or the
Plan, the Company may issue appropriate "stop transfer" instructions to its
transfer agent, if any, and, if the Company transfers its own securities, it may
make appropriate notations to the same effect in its own records.

         13.      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 Option 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.

         14.      TAX CONSEQUENCES. The Grantee may incur tax liability as a
result of the Grantee's purchase or disposition of the Shares. THE GRANTEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE
SHARES.

                                       6
<PAGE>

         15.      LOCK-UP AGREEMENT.

                  (a)      AGREEMENT. The Grantee, if requested by the Company
and the lead underwriter of any public offering of the Common Stock (the "Lead
Underwriter"), hereby irrevocably agrees not to sell, contract to sell, grant
any option to purchase, transfer the economic risk of ownership in, make any
short sale of, pledge or otherwise transfer or dispose of any interest in any
Common Stock or any securities convertible into or exchangeable or exercisable
for or any other rights to purchase or acquire Common Stock (except Common Stock
included in such public offering or acquired on the public market after such
offering) during the 200-day period following the effective date of a
registration statement of the Company filed under the Securities Act of 1933, as
amended, or such shorter or longer period of time as the Lead Underwriter shall
specify. The Grantee further agrees to sign such documents as may be requested
by the Lead Underwriter to effect the foregoing and agrees that the Company may
impose stop-transfer instructions with respect to such Common Stock subject to
the lock-up period until the end of such period. The Company and the Grantee
acknowledge that each Lead Underwriter of a public offering of the Company's
stock, during the period of such offering and for the lock-up period thereafter,
is an intended beneficiary of this Section 15.

                  (b)      NO AMENDMENT WITHOUT CONSENT OF UNDERWRITER. During
the period from identification of a Lead Underwriter in connection with any
public offering of the Company's Common Stock until the earlier of (i) the
expiration of the lock-up period specified in Section 15(a) in connection with
such offering or (ii) the abandonment of such offering by the Company and the
Lead Underwriter, the provisions of this Section 15 may not be amended or waived
except with the consent of the Lead Underwriter.

         16.      ENTIRE AGREEMENT: GOVERNING LAW. The Notice, the Plan and this
Option Agreement constitute the entire agreement of the parties with respect to
the subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except by
means of a writing signed by the Company and the Grantee. Nothing in the Notice,
the Plan and this Option Agreement (except as expressly provided therein) is
intended to confer any rights or remedies on any persons other than the parties.
The Notice, the Plan and this Option Agreement are to be construed in accordance
with and governed by the internal laws of the State of California without giving
effect to any choice of law rule that would cause the application of the laws of
any jurisdiction other than the internal laws of the State of California to the
rights and duties of the parties. Should any provision of the Notice, the Plan
or this Option Agreement be determined to be illegal or unenforceable, such
provision shall be enforced to the fullest extent allowed by law and the other
provisions shall nevertheless remain effective and shall remain enforceable.

         17.      CONSTRUCTION. The captions used in the Notice and this Option
Agreement are inserted for convenience and shall not be deemed a part of the
Option for construction or interpretation. Except when otherwise indicated by
the context, the singular shall include the plural and the plural shall include
the singular. Use of the term "or" is not intended to be exclusive, unless the
context clearly requires otherwise.

                                       7
<PAGE>

         18.      ADMINISTRATION AND INTERPRETATION. Any question or dispute
regarding the administration or interpretation of the Notice, the Plan or this
Option Agreement shall be submitted by the Grantee or by the Company to the
Administrator. The resolution of such question or dispute by the Administrator
shall be final and binding on all persons.

         19.      VENUE. The Company, the Grantee, and the Grantee's assignees
pursuant to Section 9 (the "parties") agree that any suit, action, or proceeding
arising out of or relating to the Notice, the Plan or this Option Agreement
shall be brought in the United States District Court for the Northern District
of California (or should such court lack jurisdiction to hear such action, suit
or proceeding, in a California state court in the County of Santa Clara) and
that the parties shall submit to the jurisdiction of such court. The parties
irrevocably waive, to the fullest extent permitted by law, any objection the
party may have to the laying of venue for any such suit, action or proceeding
brought in such court. If any one or more provisions of this Section 19 shall
for any reason be held invalid or unenforceable, it is the specific intent of
the parties that such provisions shall be modified to the minimum extent
necessary to make it or its application valid and enforceable.

         20.      NOTICES. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery,
upon deposit for delivery by an internationally recognized express mail courier
service or upon deposit in the United States mail by certified mail (if the
parties are within the United States), with postage and fees prepaid, addressed
to the other party at its address as shown in these instruments, or to such
other address as such party may designate in writing from time to time to the
other party.

         21.      EMPLOYEE ENTITLEMENT CLAIMS. The Grantee agrees and
acknowledges that:

                  (a)      The Plan is discretionary in nature and that the
Administrator may amend, suspend, or terminate it at any time;

                  (b)      The grant of the Option is voluntary and occasional
and does not create any contractual or other right to receive future grants of
any options, or benefits in lieu of any options even if options have been
granted repeatedly in the past;

                  (c)      All determinations with respect to such future
options, if any, including but not limited to, the times when options shall be
granted, the exercise price, and the time or times when each right shall be
exercisable, will be at the sole discretion of the Administrator;

                  (d)      The Grantee's participation in the Plan is voluntary;

                  (e)      The value of the Option is an extraordinary item of
compensation, which is outside the scope of the Grantee's employment contract
(if any) except as may otherwise be explicitly provided in the Grantee's
employment contract;

                  (f)      The Option is not part of normal or expected
compensation or salary for any purpose, including, but not limited to,
calculating termination, severance, resignation, redundancy, end of service, or
similar payments, or bonuses, long-service awards, pension or retirement
benefits;

                                       8
<PAGE>

                  (g)      The Option shall expire upon termination of the
Grantee's Continuous Service for any reason except as may otherwise be
explicitly provided in the Plan and the Option Agreement;

                  (h)      In the event of involuntary termination of the
Grantee's Continuous Service, the Grantee's right to receive options under the
Plan, if any, will terminate effective as of the date of actual cessation of
providing services to the Company or any Related Entity, notwithstanding any
reasonable notice period required by law; furthermore, in the event of
involuntary termination of the Grantee's Continuous Service, the Grantee's right
to exercise the Option after termination of the Grantee's Continuous Service, if
any, will be measured by the date of actual cessation of providing services to
the Company or any Related Entity, notwithstanding any reasonable notice period
required by law;

                  (i)      The future value of the Shares is unknown and cannot
be predicted with certainty;

                  (j)      Where the Grantee is not an Employee, the Option has
been granted to the Grantee in his or her status as an employee of the Grantee's
employer and can in no event be understood or interpreted to mean that the
Company or any Related Entity is the Grantee's employer or that the Grantee has
an employment relationship with the Company or any Related Entity; and

                  (k)      No claim or entitlement to compensation or damages
arises from the termination of the Option or diminution in value of the Option
or Shares and the Grantee irrevocably releases the Company and any Related
Entity and his or her employer from any such claim that may arise.

         22.      DATA PRIVACY. As a condition of receipt of the Option, the
Grantee hereby explicitly and unambiguously consents to the collection, use,
processing and transfer, in electronic or other form, of personal data as
described in this paragraph by and among, as applicable, the Company or any
Related Entity for the exclusive purpose of implementing, administering and
managing the Grantee's participation in the Plan. The Grantee understands that
the Company or any Related Entity may possess and store certain personal
information about the Grantee, including the Grantee's name, home address and
telephone number, date of birth, social security number or other identification
number, salary, nationality, job title, any Shares or directorships held in the
Company or any Related Entity, details of the Option granted or Shares awarded,
canceled, vested or outstanding in favor of the Grantee, for the purpose of
managing and administering the Option Agreement and the Plan ("Data"). The
Grantee further acknowledges and agrees that Data may be transferred to any
third parties assisting the Company or any Related Entity in the implementation,
administration and management of the Option Agreement and the Plan. The Grantee
understands that these third parties may be located within or outside the
Grantee's country of residence, and that the third parties' respective countries
may have different data privacy laws and protections with respect to the
Grantee's country of residence. The Grantee authorizes the third parties to
receive, possess, use, retain and transfer the Data, in electronic or other
form, for the purposes of implementing, administering and managing the Grantee's
participation in the Plan, including any requisite transfer of such Data as may
be required for the administration of the Option Agreement and/or the subsequent
holding

                                       9
<PAGE>

of Shares on the Grantee's behalf by a broker. The Grantee understands that Data
will be possessed and stored only as long as necessary to implement, administer
and manage the Grantee's participation in the Plan, and that the Grantee may, at
any time, review Data, require any necessary amendments to Data or withdraw the
consents herein in writing by contacting the Company or any Related Entity. The
Grantee understands that the withdrawing of consent may affect the Grantee's
ability to participate in the Plan.

                                END OF AGREEMENT

                                       10
<PAGE>

                                    EXHIBIT A

                  PASSAVE, INC. 2005 U.S. STOCK INCENTIVE PLAN

                                 EXERCISE NOTICE

2900 Lakeside Drive, Suite 229
Santa Clara, California 95054
Attention: Secretary

         1.       EXERCISE OF OPTION. Effective as of today, ______________, the
undersigned (the "Grantee") hereby elects to exercise the Grantee's option to
purchase ___________ shares of the Common Stock (the "Shares") of Passave, Inc.,
(the "Company") under and pursuant to the Company's 2005 U.S. Stock Incentive
Plan, as amended from time to time (the "Plan") and the [ ] Incentive [ ]
Non-Qualified Stock Option Award Agreement (the "Option Agreement") and Notice
of Stock Option Award (the "Notice") dated ______________, ________. Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Exercise Notice.

         2.       REPRESENTATIONS OF THE GRANTEE. The Grantee acknowledges that
the Grantee has received, read and understood the Notice, the Plan and the
Option Agreement and agrees to abide by and be bound by their terms and
conditions.

         3.       RIGHTS AS STOCKHOLDER. Until the stock certificate evidencing
such Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 10 of the Plan.

         The Grantee shall enjoy rights as a stockholder until such time as the
Grantee disposes of the Shares or the Company and/or its assignee(s) exercises
the Right of First Refusal. Upon such exercise, the Grantee shall have no
further rights as a holder of the Shares so purchased except the right to
receive payment for the Shares so purchased in accordance with the provisions of
the Option Agreement, and the Grantee shall forthwith cause the certificate(s)
evidencing the Shares so purchased to be surrendered to the Company for transfer
or cancellation.

         4.       DELIVERY OF PAYMENT. The Grantee herewith delivers to the
Company the full Exercise Price for the Shares, which, to the extent selected,
shall be deemed to be satisfied by use of the broker-dealer sale and remittance
procedure to pay the Exercise Price provided in Section 4(d) of the Option
Agreement.

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

                                       1
<PAGE>

         6.       TAXES. The Grantee agrees to satisfy all applicable non-U.S.,
federal, state and local income and employment tax withholding obligations and
herewith delivers to the Company the full amount of such obligations or has made
arrangements acceptable to the Company to satisfy such obligations. In the case
of an Incentive Stock Option, the Grantee also agrees, as partial consideration
for the designation of the Option as an Incentive Stock Option, to notify the
Company in writing within thirty (30) days of any disposition of any shares
acquired by exercise of the Option if such disposition occurs within two (2)
years from the Date of Award or within one (1) year from the date the Shares
were transferred to the Grantee.

         7.       RESTRICTIVE LEGENDS. The Grantee understands and agrees that
the Company shall cause the legends set forth below or legends substantially
equivalent thereto, to be placed upon any certificate(s) evidencing ownership of
the Shares together with any other legends that may be required by the Company
or by any securities laws:

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

                  THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
                  CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL
                  HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE
                  OPTION AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF
                  THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL
                  OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF
                  FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.

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

         9.       CONSTRUCTION. The captions used in this Exercise Notice are
inserted for convenience and shall not be deemed a part of this agreement for
construction or interpretation. Except when otherwise indicated by the context,
the singular shall include the plural and the plural shall include the singular.
Use of the term "or" is not intended to be exclusive, unless the context clearly
requires otherwise.

                                       2
<PAGE>

         10.      ADMINISTRATION AND INTERPRETATION. The Grantee hereby agrees
that any question or dispute regarding the administration or interpretation of
this Exercise Notice shall be submitted by the Grantee or by the Company to the
Administrator. The resolution of such question or dispute by the Administrator
shall be final and binding on all persons.

         11.      GOVERNING LAW; SEVERABILITY. This Exercise Notice is to be
construed in accordance with and governed by the internal laws of the State of
California without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the
State of California to the rights and duties of the parties. Should any
provision of this Exercise Notice be determined by a court of law to be illegal
or unenforceable, such provision shall be enforced to the fullest extent allowed
by law and the other provisions shall nevertheless remain effective and shall
remain enforceable.

         12.      NOTICES. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery,
upon deposit for delivery by an internationally recognized express mail courier
service or upon deposit in the United States mail by certified mail (if the
parties are within the United States), with postage and fees prepaid, addressed
to the other party at its address as shown below beneath its signature, or to
such other address as such party may designate in writing from time to time to
the other party.

         13.      FURTHER INSTRUMENTS. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this agreement.

         14.      ENTIRE AGREEMENT. The Notice, the Plan and the Option
Agreement are incorporated herein by reference and together with this Exercise
Notice constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except by
means of a writing signed by the Company and the Grantee. Nothing in the Notice,
the Plan, the Option Agreement and this Exercise Notice (except as expressly
provided therein) is intended to confer any rights or remedies on any persons
other than the parties.

Submitted by:                           Accepted by:

GRANTEE:                                PASSAVE, INC.

                                        By: ____________________________________

____________________________________    Title: _________________________________
         (Signature)

ADDRESS:                                ADDRESS:

____________________________________    2900 Lakeside Drive, Suite 229
____________________________________    Santa Clara, California 95054

                                       3
<PAGE>

                                    EXHIBIT B

                  PASSAVE, INC. 2005 U.S. STOCK INCENTIVE PLAN

                       INVESTMENT REPRESENTATION STATEMENT

GRANTEE:                                  ______________________________________

COMPANY:                                  PASSAVE, INC.

SECURITY:                                 COMMON STOCK

AMOUNT:                                   ______________________________________

DATE:                                     ______________________________________

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

                  (a)      Grantee is aware of the Company's business affairs
and financial condition and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision to acquire the
Securities. Grantee is acquiring these Securities for investment for Grantee's
own account only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act of 1933, as
amended (the "Securities Act").

                  (b)      Grantee acknowledges and understands that the
Securities constitute "restricted securities" under the Securities Act and have
not been registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon among other things, the bona
fide nature of Grantee's investment intent as expressed herein. Grantee further
understands that the Securities must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Grantee further acknowledges and understands that the
Company is under no obligation to register the Securities. Grantee understands
that the certificate evidencing the Securities will be imprinted with a legend
which prohibits the transfer of the Securities unless they are registered or
such registration is not required in the opinion of counsel satisfactory to the
Company.

                  (c)      Grantee is familiar with the provisions of Rule 701
and Rule 144, each promulgated under the Securities Act, which, in substance,
permit limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. Rule 701 provides that if the issuer
qualifies under Rule 701 at the time of the grant of the Option to the Grantee,
the exercise will be exempt from registration under the Securities Act. In the
event the Company becomes subject to the reporting requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or
such longer period as any market stand-off agreement may require) the Securities
exempt under Rule 701 may be resold, subject to the satisfaction of certain of
the conditions specified by Rule 144, including: (1) the resale being made
through a broker in an unsolicited "broker's transaction" or in transactions
directly with a market maker (as said term is defined under the Securities
Exchange Act of 1934); and, in the case of an affiliate, (2) the availability of
certain public information about the Company, (3) the amount of Securities being

                                       1
<PAGE>

sold during any three month period not exceeding the limitations specified in
Rule 144(e), and (4) the timely filing of a Form 144, if applicable.

         In the event that the Company does not qualify under Rule 701 at the
time of grant of the Option, then the Securities may be resold in certain
limited circumstances subject to the provisions of Rule 144, which requires the
resale to occur not less than one year after the later of the date the
Securities were sold by the Company or the date the Securities were sold by an
affiliate of the Company, within the meaning of Rule 144; and, in the case of
acquisition of the Securities by an affiliate, or by a non-affiliate who
subsequently holds the Securities less than two (2) years, the satisfaction of
the conditions set forth in sections (1), (2), (3) and (4) of the paragraph
immediately above.

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

                  (e)      Grantee represents that Grantee is a resident of the
state of ____________________.

                                           Signature of Grantee:
                                           _____________________________________
                                           Date: _______________________________

                                       2

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