Document:

INCENTIVE STOCK OPTION AGREEMENT

                            TIDEL TECHNOLOGIES, INC.
                          1997 LONG-TERM INCENTIVE PLAN

         1. GRANT OF  OPTION.  Pursuant  to the Tidel  Technologies,  Inc.  1997
Long-Term  Incentive  Plan (the  "Plan") for key  management  employees of Tidel
Technologies,  Inc., a Texas  corporation (the "Company"),  or its Subsidiaries,
the Company grants to

                         ------------------------------
                                 (the "Grantee")

an option to purchase from the Company a total of  _____________  (_______) full
shares ("Stock Options") of Class A Common Stock ("Common Stock") of the Company
at  _______________  dollars  ($________) per share (being the Fair Market Value
per share of the Common Stock on this Date of Grant), in the amounts, during the
periods, and upon the terms and conditions set forth in this Agreement. The Date
of Grant of this Stock Option is ________________. This is an option intended to
be an incentive  stock option  within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended ("Code") and regulations  issued  thereunder to
purchase from the Company the number of shares of Common Stock,  at the purchase
price per share, and on the schedule,  all as set forth herein. In the event the
Stock  Options  exceed any  limitations  under the Code  applicable to incentive
stock  options  then the Stock  options  that  exceed the  limitations  shall be
treated as  nonqualified  stock  options  as set forth in Section  2.3(b) of the
Plan.  If the Stock Options  exercised in any given year exceed the  limitations
under the Code for incentive stock options,  the Committee in its discretion may
designate  which Stock Options are incentive  stock options by issuing  separate
certificates  and identifying  such stock as incentive stock option stock in the
Company's stock transfer records.

         2.  SUBJECT TO PLAN.  This Stock Option and its exercise are subject to
the terms and  conditions  of the Plan,  but the terms of the Plan  shall not be
considered an enlargement of any benefits under this Agreement.  The capitalized
terms used in this  Agreement  shall have the meaning as set forth herein and to
the extent not defined  herein shall have the same meanings  assigned to them in
the Plan. This Stock Option is subject to any rules promulgated  pursuant to the
Plan by the Board or the Committee and communicated to the Grantee in writing.

         3. VESTING:  TIME OF EXERCISE.  Except as specifically provided in this
Agreement and subject to certain terms, restrictions and conditions set forth in
the  Plan,  this  Stock  Option  is  exercisable  in  the  following  cumulative
installments:

First installment.       Up to  50% of  the  total  Stock  Options  at any  time
                         following the third anniversary of the Date of Grant.

<PAGE>

Second installment.      Up to 100%  of the  total  Stock  Options  at any  time
                         following the fourth anniversary of the Date of Grant.

Notwithstanding  the vesting schedule set forth above, all Stock Options granted
under  this  Agreement  shall  become  exercisable  immediately  upon the death,
Disability or Termination for Good Reason of Grantee.

         4. TERM;  FORFEITURE.  This Stock  Option,  and all  unexercised  Stock
Options granted to the Grantee hereunder, will terminate and be forfeited at the
first of the following to occur:

         (a) 5:00 p.m. on __________________ (Ten Years from Date of Grant)

         (b) 5:00 p.m.  on the date  which is three  (3)  months  following  the
Grantee's  termination  of  employment  due to  Termination  for Good  Reason or
Retirement for Stock Options vested at termination;

         (c) 5:00 p.m.  on the date which is twelve (12)  months  following  the
Grantee's termination of employment due to Death or Disability for Stock Options
vested at termination;

         (d) 5:00 p.m.  on the day after  the date of any other  termination  of
employment not described in Section 4(a) - (c) above,  including Termination for
Cause or employee voluntary termination (excluding Termination for Good Reason).

         5. WHO MAY EXERCISE.  Subject to the terms and  conditions set forth in
Section 3 and 4 above, during the lifetime of the Grantee, this Stock Option may
be exercised only by the Grantee, or by the Grantee's guardian. If a termination
of employment of the Grantee occurs as a result of death or Disability  prior to
the  termination  date  specified  in Section 4 hereof and the  Grantee  has not
exercised  this Stock Option as to the maximum  percentage  of Stock Options set
forth in Section 3 hereof as of the date of death or  Disability,  the following
persons may exercise the  exercisable  portion of this Stock Option on behalf of
the Grantee at any time prior to the earlier of the dates specified in Section 4
hereof: (i) if the Grantee is disabled,  the guardian of the Grantee; or (ii) if
the Grantee dies, the personal  representative  of his estate, or the person who
acquired the right to exercise this Stock Option by bequest or inheritance or by
reason of the death of the Grantee; provided that this Stock Option shall remain
subject to the other terms of this  Agreement,  the Plan, and  applicable  laws,
rules and regulations.

         6.  RESTRICTIONS.  This Stock Option may be exercised only with respect
to full shares, and no fractional share of stock shall be issued.

         7. MANNER OF EXERCISE.  Subject to such  administrative  regulations as
the Board or the Committee may from time to time adopt, this Stock Option may be
exercised  by the  delivery of written  notice to the  Secretary  of the Company
setting  forth the number of shares of common  Stock  with  respect to which the
Stock Option is to be exercised and the date of exercise thereof (the

                                       -2-
<PAGE>
"Exercise Date") which shall be at least three (3) days after giving such notice
unless an earlier time shall have been  mutually  agreed  upon.  On the Exercise
Date, the Grantee shall deliver to the Company  consideration with a value equal
to the total  Stock  Option  price of the  shares to be  purchased,  payable  as
follows:  (a) cash,  certified check,  bank draft, or money order payable to the
order of the Company, (b) Common Stock (including  Restricted Stock),  valued at
its Fair Market Value on the Exercise Date, and/or (c) any other form of payment
which is  acceptable  to the  Committee.  In the event that shares of Restricted
Stock are tendered as consideration for the exercise of a Stock Option, a number
of shares of Common Stock issued upon the exercise of the Stock Option, equal to
the number of shares of Restricted Stock used as consideration  therefor,  shall
be subject to the same restrictions as the Restricted Stock so submitted. Common
Stock which is acquired  by the Grantee  pursuant to the  exercise of this Stock
Option may not be used to  exercise a  subsequent  option  until and unless such
shares  have  been held for a period  ending on the later of two (2) years  from
_______________  (Date of Grant) or one (1) year after the date of  exercise  of
such Stock Option.

         Upon  payment of all amounts due from the  Grantee,  the Company  shall
cause certificates for the Stock Options then being purchased to be delivered to
the Grantee (or the person exercising the Grantee's Stock Option in the event of
Grantee's  death) at its principal  business of lice promptly after the Exercise
Date.  The  obligation  of the Company to deliver  shares of Common Stock shall,
however,  be subject to the condition  that if at any time the  Committee  shall
determine in its discretion that the listing,  registration, or qualification of
the Stock Option or the Stock Options upon any securities  exchange or under any
state or federal law, or the consent or approval of any governmental  regulatory
body, is necessary or desirable as a condition of, or in  connection  with,  the
Stock Option or the  issuance or purchase of shares of Common Stock  thereunder,
then the Stock  Option  may not be  exercised  in whole or in part  unless  such
listing,  registration,  qualification,  consent,  or  approval  shall have been
effected or obtained free of any conditions not acceptable to the Committee.

         If the Grantee fails to pay for any of the Stock  Options  specified in
such notice or fails to accept  delivery  thereof,  then the Grantee's  right to
purchase such Stock Options may be terminated by the Company.

         The Company  shall have the right to deduct from all amounts  hereunder
paid in cash or other form, any Federal, state or local taxes required by law to
be  deducted.  The Grantee  receiving  shares of Common  Stock issued under this
Stock  Option shall be required to pay the Company the amount of any taxes which
the Company is required to withhold with respect to such shares of Common Stock.
Such  payments  shall  be  required  to be made  prior  to the  delivery  of any
certificate  representing  such shares of Common Stock. Such payment may be made
in cash,  by check,  or through the  delivery of shares of Common Stock owned by
the Grantee  (which may be  effected by the actual  delivery of shares of Common
Stock by the  Grantee or if the  Grantee is not an  insider  (as  defined by the
Securities and Exchange  Commission),  by the Company's  withholding a number of
shares to be issued upon exercise of this Stock Option,  if  applicable),  which
shares  have an  aggregate  Fair  Market  Value  equal to the  required  minimum
withholding payment, or any combination thereof.

                                       -3-
<PAGE>
         9.  RIGHTS  AS  STOCKHOLDER.  The  Grantee  will  have no  rights  as a
stockholder  with  respect to any shares  covered by this Stock Option until the
issuance of a certificate or certificates to the Grantee for the shares.  Except
as other vise  provided  in Section  lo hereof no  adjustment  shall be made for
dividends  or other rights for which the record date is prior to the issuance of
such certificate or certificates.

         10.  ADJUSTMENT OF NUMBER OF SHARES AND RELATED MATTERS.  The number of
shares of Common Stock  covered by this Stock  Option,  and the  exercise  price
thereof,  shall be subject to adjustment  in accordance  with Section 5.5 of the
Plan. In the event the Stock Option shall be exercised in whole,  this Agreement
shall be  surrendered  to the Company for  cancellation.  In the event the Stock
Option shall be exercised in part, or a change in the number or  designation  of
the Common Stock shall be made,  this Agreement shall be delivered by Grantee to
the  Company  for the  purpose of making  appropriate  notation  thereon,  or of
otherwise reflecting, in such manner as the Company shall determine, the partial
exercise or the change in the number or designation of the Common Stock.

         11. GRANTEE'S  REPRESENTATIONS.  Notwithstanding  any of the provisions
hereof,  the Grantee  hereby  agrees that  Grantee  will not  exercise the Stock
Option granted  hereby,  and that the Company will not be obligated to issue any
shares to the Grantee hereunder, if the exercise thereof or the issuance of such
shares  shall  constitute  a  violation  by the  Grantee  or the  Company of any
provision  of  this  Agreement,  the  Plan  or  any  law  or  regulation  of any
governmental  authority.  Any  determination in this connection by the Committee
shall be final, binding, and conclusive.  The obligations of the Company and the
rights of the Grantee are subject to this Agreement,  the Plan or all applicable
laws, rules, and regulations.

         12.  INVESTMENT  REPRESENTATION.  Unless the Common  Stock is issued to
Grantee  in  a  transaction   registered  under  applicable  federal  and  state
securities  laws, by Grantee's  execution  hereof,  the Grantee  represents  and
warrants to the Company that all Common  Stock which may be purchased  hereunder
will be acquired  by the  Grantee for  investment  purposes  for  Grantee's  own
account  and not with any intent  for resale or  distribution  in  violation  of
federal or state securities  laws.  Unless the Common Stock is issued to Grantee
in a transaction  registered  under the applicable  federal and state securities
laws,  all  certificates  issued with  respect to the Common Stock shall bear an
appropriate restrictive investment legend.

         13. PARTICIPANT'S ACKNOWLEDGMENTS.  The Grantee acknowledges receipt of
a copy of the Plan and  represents  that Grantee is familiar  with the terms and
provision thereof, and hereby accepts this Stock Option subject to all the terms
and  provisions  thereof.  The  Grantee  hereby  agrees to  accept  as  binding,
conclusive,  and final all  decisions  or  interpretations  of the Board and the
Committee,  upon any  questions  arising under the Plan or this  Agreement.  Any
disagreement  by the Grantee to any decision or  interpretation  of the Board or
the  Committee  shall be  settled  exclusively  by  arbitration  as set forth in
Section 6.11 of the Plan and Section 27 herein.

                                       -4-
<PAGE>
         14.  GOVERNING  LAW AND VENUE.  This  Agreement  shall be  construed in
accordance  with the laws of the  State of Texas  without  giving  effect to any
principle of conflict of laws that would  require the  application  of any other
jurisdiction,  except as  superseded  by federal  law,  and in  accordance  with
applicable  provisions of the Code and  regulations  or other  authority  issued
thereunder by the appropriate governmental authority,  consistent with the Stock
Options being treated as Incentive  Stock Options under the Code.  Venue for any
dispute shall lie exclusively in Dallas, Dallas County, Texas.

         15. NO RIGHT TO CONTINUE EMPLOYMENT.  Nothing herein shall be construed
to confer  upon the  Grantee  the right to  continue  in the  employment  of the
Company or any  Subsidiary or interfere with or restrict in any way the right of
the Company or any  Subsidiary  to discharge the Grantee at any time (subject to
any contract rights of the Grantee).

         16.  SEVERABILITY;  HEADINGS.  If any portion of this Agreement is held
invalid or  inoperative,  the other portions of this  Agreement  shall be deemed
valid and operative and, so far as is reasonable  and possible,  effect shall be
given to the intent  manifested by the portion held invalid or inoperative.  The
section headings herein are for reference  purposes only and are not intended in
any way to  describe,  interpret,  define or limit  the  extent or intent of the
Agreement or of any part hereof.

         17.  COVENANTS AND  AGREEMENTS AS INDEPENDENT  AGREEMENTS.  Each of the
covenants and agreements  that is set forth in this Agreement shall be construed
as a  covenant  and  agreement  independent  of  any  other  provision  of  this
Agreement.  The existence of any claim or cause of action of the Grantee against
the  Company,  whether  predicated  on this  Agreement or  otherwise,  shall not
constitute  a defense to the  enforcement  by the Company of the  covenants  and
agreements that are set forth in this Agreement.

         18. ENTIRE AGREEMENT.  This Agreement  together with the Plan supersede
any and  all  other  prior  understandings  and  agreements,  either  oral or in
writing,  between the parties  with  respect to the  subject  matter  hereof and
constitute the sole and only agreements  between the parties with respect to the
said subject matter.  All prior  negotiations and agreements between the parties
with respect to the subject matter hereof are merged into this  Agreement.  Each
party  to this  Agreement  acknowledges  that no  representations,  inducements,
promises, or agreements,  orally or otherwise, have been made by any party or by
anyone acting on behalf of any party,  which are not embodied in this  Agreement
or the Plan and that any  agreement,  statement or promise that is not contained
in this  Agreement  or the Plan shall not be valid or binding or of any force or
effect.

         l9. PARTIES BOUND. The terms, provisions, representations,  warranties,
covenants,  and agreements  that are contained in this Agreement shall apply to,
be binding  upon,  and inure to the benefit of the parties and their  respective
heirs,   executors,   administrators,   legal  representatives,   and  permitted
successors and assigns.

                                       -5-
<PAGE>
         20. MODIFICATION.  No change or modification of this Agreement shall be
valid or  binding  upon the  parties  unless the  change or  modification  is in
writing and signed by the parties.  Notwithstanding the preceding sentence,  the
Company may amend the Plan or revoke this Stock  Option to the extent  permitted
in the Plan.

         21. GENDER AND NUMBER. Words of any gender used in this Agreement shall
be held and  construed  to include any other  gender,  and words in the singular
number shall be held to include the plural,  and vice versa,  unless the context
requires otherwise.

         22. NOTICE. Any notice required or permitted to be delivered  hereunder
shall be deemed to be delivered only when actually received by the Company or by
the Grantee,  as the case may be, at the addresses  set forth below,  or at such
other addresses as they have  theretofore  specified by written notice delivered
in accordance herewith.

                  (A) Notice to the Company  shall be addressed and delivered as
follows:

                                  Tidel Technologies, Inc.
                                  2310 McDaniel Drive
                                  Carrollton, Texas 75006
                                  Attn: Corporate Secretary

                           with a copy to:

                                  Tidel Technologies, Inc.
                                  5847 San Felipe, Ste. 900
                                  Houston, Texas 77057
                                  Attn: Corporate Secretary

                  (B) Notice to the Grantee  shall be addressed and delivered as
follows:

                                  ---------------------
                                  ---------------------
                                  ---------------------

         23.  COMMISSION.  To the extent  required by law, stock ownership under
the Plan and this Agreement will be subject to the applicable  provisions of the
Exchange Act, if, after  exercise of any Stock  Options  granted under the Plan,
the  Grantee  is found to be  disqualified  pursuant  to the  provisions  of the
Exchange Act, the Grantee shall dispose of Grantee's  shares of Common Stock and
the Company shall have the absolute right to repurchase  such shares at the then
Fair Market Value or the exercise price, whichever is the lesser.

                                       -6-
<PAGE>
         25.  NONDISCLOSURE AGREEMENT.

                  (a) During  the terms of this  Agreement,  Grantee  shall have
access to and become familiar with various trade secrets, patents, copyrightable
material,  technology and knowhow  consisting of, but not limited to, processes,
computer  software,  compilations of  information,  records,  sales  procedures,
customer  requirements,  pricing  techniques,  customer lists,  methods of doing
business and other  confidential  information  (collectively  referred to as the
"Proprietary Information"),  which the Company and its Subsidiaries own, license
or are  authorized  to use, and  regularly use in the operation of its business.
Grantee shall not use in any way or disclose any of the Proprietary Information,
directly or indirectly, either during the terms of this Agreement or at any time
thereafter,  except as required in the course of employment with Company and its
Subsidiaries. All files, records, documents, information, data and similar items
relating to the business of the Company and its  Subsidiaries,  whether prepared
by Grantee or  otherwise  coming into  Grantee's  possession,  shall  remain the
exclusive  property of the Company and its Subsidiaries and shall not be removed
from the premises of the Company and its  Subsidiaries  under any  circumstances
without the prior written consent of the Company and its Subsidiaries (except in
the ordinary course of business  during  Grantee's  period of active  employment
with the  Company  and its  Subsidiaries),  and in any event  shall be  promptly
delivered to the Company upon the  termination of Grantee's  employment with the
Company and its Subsidiaries.

                  (b)  Grantee  hereby  agrees  not  to  disclose,  directly  or
indirectly, either during the terms of this Agreement or at any time thereafter,
except  as  required  in the  course  of  employment  with  the  Company  or its
Subsidiaries the precise nature of the Company's or its Subsidiaries'  business,
including without limitation,  the fact that the Company or its Subsidiaries may
from time to time, keep currency on its premises.

                  (c) Grantee hereby  acknowledges and recognizes that from time
to time the  Company's or it  Subsidiaries'  customers  may require that Grantee
execute  nondisclosure  agreements  with such  customers  and Grantee  agrees to
execute such  nondisclosure  agreements as the Company or its  Subsidiaries  may
request.

                  (d)  Grantee   agrees  that  all   products,   including   any
improvements or modifications of any products, that Grantee designs, develops or
invents  in  the  course  of  Grantee's  employment  with  the  Company  or  its
Subsidiaries will be the exclusive  property of the Company and its Subsidiaries
and may not be used by Grantee  outside of the scope of Grantee's  engagement by
the Company and its Subsidiaries for any purpose whatsoever. Grantee also agrees
that  the  Company  and its  Subsidiaries  will  acquire  the  ownership  of all
originals and copies of documents,  drawings, prototypes, disks, tapes and other
media or works  related to such  products  from the time of their  creation.  In
addition,  the  Company  and its  Subsidiaries  agree to execute  all  documents
necessary for the Company to secure or protect  their  interest in the foregoing
products and related materials,  including the execution of written  assignments
to the  Company  and  its  Subsidiaries,  and to  assist  the  Company  and  its
Subsidiaries,  at their expense, in the making and prosecution of all patent and
copyright  applications  and  the  prosecution  of all  actions  for  patent  or
copyright infringement.

                                       -7-
<PAGE>
         26. NONCOMPETITION  AGREEMENT. To the extent Grantee has entered into a
written  employment  agreement or any other agreement with the Company or any of
its  Subsidiaries  and such employment  agreement or other agreement  includes a
covenant  not to  compete,  then the terms of such  covenant  not to compete are
hereby  incorporated  by  reference.  If the Grantee  violates the terms of such
employment  agreement or other agreement,  then the Stock Options granted herein
shall not be exercisable  until such violation is cured or corrected in a manner
acceptable to the Committee or Board. The Stock Options granted pursuant to this
Agreement  are  intended as  additional  consideration  for any  covenant not to
compete set forth in Grantee's written employment agreement or other agreement.

         27. ARBITRATION. Any unresolved dispute or controversy arising under or
in connection with this Agreement  shall be settled  exclusively by arbitration,
conducted  before  a panel  of  three  (3)  arbitrators  in  Dallas,  Texas,  in
accordance  with  the  rules of the  American  Arbitration  Association  then in
effect. The arbitrators shall not have the authority to add to, detract from, or
modify any provision  hereof nor to award punitive damages to any injured party.
A decision by a majority of the arbitration panel shall be final, non-appealable
and  binding.  Judgment  may be entered on the  arbitrators'  award in any court
having jurisdiction.  The direct expense of any arbitration  proceeding shall be
borne by the Company.

         Each  party  shall  bear his or its own  costs of  arbitration,  but if
Grantee is the prevailing party in such  arbitration,  Grantee shall be entitled
to  recover  from  Company  as part of any award  entered  Grantee's  reasonable
expenses for attorneys' fees and disbursements.

         IN WITNESS  WHEREOF,  the  Company  has  caused  this  Agreement  to be
executed by its duly  authorized  officer,  the Grantee,  to evidence his or her
consent and approval of all the terms hereof,  has duly executed this Agreement,
as of the date specified in Section 1 hereof.

                                   TIDEL TECHNOLOGIES, INC.

                                   By:_______________________________________
                                                James T. Rash
                                                Chief Executive Officer

                                   GRANTEE:

                                   ------------------------------------------

                                       -8-AMERICAN MEDICAL TECHNOLOGIES, INC.
                      1989 INCENTIVE STOCK OPTION AGREEMENT

         This  Incentive  Stock Option  Agreement  is  effective  the 1st day of
October,   1995,  between  AMERICAN  MEDICAL  TECHNOLOGIES,   INC.,  a  Delaware
corporation   (the   "Corporation"),   and   ____________________   (hereinafter
"Optionee").

                                    Recitals

         A. The  Corporation's  Board of  Directors  adopted its 1989  Incentive
Stock  Option Plan  ("Plan") to be  effective as of June 14, 1988. A copy of the
Plan is attached hereto as Annex A and is incorporated for all purposes.

         B. The Corporation has determined to grant to the Optionee the right to
acquire certain shares of the Corporation's  common stock, par value of $.01 per
share,  all as  provided  more  fully  hereinafter,  subject  to the  terms  and
provisions of this Agreement and the Plan.

         Now therefore, in consideration of the mutual undertakings,  covenants,
conditions and agreements contained herein, the parties hereto agree as follows:

         1.  GRANT  OF  STOCK  OPTION.  The  Corporation  hereby  grants  to the
Optionee,  a  regular  salaried  employee  of the  Corporation  or a  subsidiary
thereof, under the terms and conditions of the Plan and the terms and conditions
hereinafter  specified,  the  right to  acquire  up to  ________  shares  of the
Corporation's  common stock, $.01 par value  (hereinafter  "Option Stock").  The
option granted  hereunder is effective on the effective date of this  Agreement,
and unless sooner terminated under the provisions hereof,  shall expire at 12:00
Midnight on ___________ (ten years from date of grant) (hereinafter  "Expiration
Date").

         2. OPTION PRICE. The purchase price per share of the Option Stock shall
be $ , which is an amount  equal to 100  percent  of the fair  market  value per
share of the  Corporation's  Common  Stock as of the  original  date of issue as
determined  by the Board of Directors of the  Corporation  (the  "Board") or the
Compensation Committee appointed by the Board to administer the Plan.

         3. EXERCISE.  Subject to the limitations contained herein, the Optionee
may exercise  the Option  granted  hereunder to purchase  shares of Option Stock
according to the vesting  schedule set forth in Annex A hereto and in accordance
with the following terms and conditions:

                  (i) Once a portion of the Option becomes exercisable, it shall
continue to be exercisable  until the Expiration Date or the termination of such
Option rights under this Agreement;

                  (ii)  Optionee  may elect to purchase  Option  Stock only once
during any calendar quarter;

                                       -1-
<PAGE>
                  (iii) The Option may be exercised with respect to whole shares
only and not fractional shares;

                  (iv) The Option shall be exercised by giving written notice to
the Corporation in compliance  with Paragraph 13 of this Agreement.  Such notice
shall  be in  the  form  of a  Subscription  Agreement  to be  supplied  by  the
Corporation  and shall  state the  number of shares  with  respect  to which the
Option is being  exercised and shall specify a date which shall not be less than
fifteen (15) nor more than thirty (30) days after the date of such notice as the
date on which the  shares  of Option  Stock  will be taken up and  payment  made
therefor.  Payment  in full for the  number of shares to be  transferred  to the
Optionee  pursuant to the  exercise or partial  exercise of the Option  shall be
made in the form of cash,  bank check or in whole  shares of Common Stock of the
Corporation  based on the fair  market  value  on the date of  exercise  (or any
combination  thereof) at the principal office of the Corporation.  If any law or
regulation  requires the Corporation to take any action with respect to the sale
of shares  specified in such notice,  the date of exercise of the Option and the
delivery  of shares  and  payment  therefor  shall be  extended  for the  period
necessary to take such action.

         4. TERMINATION.  Upon termination of an Optionee's  employment with the
Corporation (other than by death) or the death of the Optionee, the rights under
this Agreement to exercise the Option shall be limited to the Option Stock which
was immediately  purchasable by the Optionee at the date the  terminating  event
occurs and such option  privileges  shall  expire  unless  exercised by Optionee
within three (3) months after termination of employment (other than by death) or
within one (1) year after the death of Optionee.

         5.  DEATH.  Upon  the  death of an  Optionee  while  employed  with the
Corporation or any of its  subsidiaries,  the Optionee shall become fully vested
and the  Optionee's  estate  shall have up to one year a If ter the death of the
Optionee to exercise said shares.

         6.  ADJUSTMENTS.  The Option  Stock shall be subject to the  adjustment
provisions contained in Paragraph 8 of the Plan.

         7.  EFFECT  UPON  EMPLOYMENT.  This  Agreement  is  not  an  employment
agreement and does not change any rights of the  Corporation  or Optionee  under
their  employer-employee  relationship  including  the  Corporation's  right  to
terminate the employment of the Optionee at any time.

         8. SHARES RESERVED. The Corporation shall, at all times during the term
of this  Agreement,  reserve and keep available such number of its common shares
as will be sufficient to satisfy the  requirements  of this  Agreement and shall
pay all fees and expenses  necessarily incurred by the Corporation in connection
with the issuance of such shares.

         9.  RESTRICTION  ON  ISSUANCE  OF SHARES.  In the event that the shares
issued  or to be  issued  pursuant  to  exercise  of the  Option  have  not been
registered under the Securities Act of 1933, as amended,  the Corporation  shall
not be obligated to sell any such shares hereunder unless same are

                                       -2-
<PAGE>
exempt from  registration  under the  Securities  Act of 1933,  as amended,  and
applicable  state  securities  laws. The Optionee shall, at the time such Option
Stock is  received,  make and  comply  with the  investment  representations  as
contained in the Subscription  Agreement and otherwise as may be required by the
Corporation's  counsel,  to secure to the  Corporation an appropriate  exemption
from applicable securities laws.

         10.  Options  Subject to Applicable  Laws.  The exercise of each Option
shall be subject to the condition that if at any time the Corporation  shall (i)
determine in its discretion  that (I) the  satisfaction  of  withholding  tax or
other  withholding  liabilities,  (II) the  registration of any shares otherwise
delivered  upon  such  exercise  under any state or  federal  law;  or (III) the
consent or  approval of any  regulatory  body is  necessary  or  desirable  as a
condition of, or in connection  with,  such exercise or the delivery or purchase
of shares pursuant  thereto;  or (ii) determine that certain  limitations on the
number of shares sold or number of  Optionee's  acquiring  such shares should be
limited in any manner or that the Option otherwise  requires certain  additional
steps to be taken to comply with  applicable  exemptions  under state or federal
securities  laws;  then in any such event,  such exercise shall not be effective
unless  such  withholding,   registration,  consent,  approval,  limitations  or
amendments  shall have been  effected or  obtained  free of any  conditions  not
acceptable to the Corporation.

         11.  RIGHTS AS A  SHAREHOLDER.  The Optionee  shall have no rights as a
Shareholder  as  a  result  of  this  Agreement  prior  to  the  acquisition  of
Corporation stock pursuant to this Agreement.

         12. RESTRICTIONS ON TRANSFER.

                  (a)  Of  the   Options.   The  Option  may  not  be  assigned,
transferred,  pledged  or  hypothecated  in any way,  may not be  assignable  by
operation of law,  and may not be subject to  execution,  attachment  or similar
process,  other  than by the laws of descent  and  distribution.  Any  attempted
assignment,  transfer, pledge,  hypothecation or other disposition of the Option
contrary to the provisions hereof, and the levy of any execution,  attachment or
similar process upon the Option shall be null and void and without effect.

                  (b) Of the Option Stock.  The shares of Common Stock  acquired
by exercise of the Options shall not be sold, pledged, hypothecated or otherwise
transferred  (i)  unless  such  shares are exempt  from  registration  under the
Securities Act of 1933, as amended,  and any applicable  state  securities laws;
and (ii) until the Optionee has first complied with any applicable  restrictions
or preemptive  rights which have been properly  created by the Corporation  with
respect to the sale of its shares,  including any buy-sell  agreements or rights
of first refusal. Any purported transfer in violation of this provision shall be
null and void and ineffectual to transfer any interest or title in the purported
transferee.

         13. NOTICES.  All notices,  request,  demands and other  communications
hereunder  shall  be in  writing  and  shall be  deemed  to have  been  given if
delivered or mailed, first class, with postage prepaid, to:

                                       -3-
<PAGE>
                  If to the Corporation, addressed to:

                           James T. Rash, President
                           American Medical Technologies, Inc.
                           5847 San Felipe, Suite 900
                           Houston, Texas 77057

                  If to the  Optionee,  addressed  to the address for notice set
forth beneath Optionee's signature below.

                  Delivery  shall be made to such  other  address  for notice as
either  party shall  hereafter  notify the other party in writing,  from time to
time.

         14.  GOVERNING  LAW.  This  Agreement has been executed in and shall be
governed by the laws of the State of Texas.

         15.  DISPUTES.  As a condition  of the  granting of the Option  granted
herein, the Optionee agrees, for himself and his personal representatives,  that
any dispute or disagreement  which may arise under or as a result of or pursuant
to this Agreement shall be determined by the committee appointed by the Board to
administer the Plan in its sole discretion,  and that any interpretation by such
committee of the terms of this Agreement shall be final, binding and conclusive.

         16. ENTIRE AGREEMENT.  This Agreement contains the entire understanding
between the parties hereto concerning the subject matter contained herein. There
are no representations,  agreements,  arrangements,  or understandings,  oral or
written,  between or among the parties hereto, relating to the subject matter of
this Agreement, which are not fully expressed herein.

         17. APPROVAL OF SHAREHOLDERS.  The  effectiveness  and validity of this
Agreement,  the exercise of the Option granted herein and the issuance of shares
of  Common  Stock  pursuant  to this  Agreement  are  expressly  subject  to the
ratification  and approval of the Plan by the  shareholders  of the  Corporation
within  twelve  (12)  months  after the date of the  adoption of the Plan by the
Board.

         18.  NO AFFECT ON  CORPORATION.  The  existence  of the  option  herein
granted shall not affect in any way the right or power of the Corporation or its
shareholders  to make or authorize  any or all  adjustments,  recapitalizations,
reorganizations  or other changes in the Corporation's  capital structure or its
business,  or any merger or consolidation  of the  Corporation,  or any issue of
bonds, debentures, preferred or prior preference stock ahead of or affecting the
common  stock of the  Corporation  or the  rights  thereof,  or  dissolution  or
liquidation  of the  Corporation,  or any sale or transfer of all or any part of
its assets or business, or any other corporate act or proceedings,  whether of a
similar character or otherwise.

         19.  THE  PLAN.  This  Agreement  is made  pursuant  to the Plan and is
subject to all the terms,  provisions and  conditions set forth therein.  In the
case of any inconsistency between the terms of this

                                       -4-
<PAGE>
Agreement  and the terms of the Plan,  the terms of the Plan  shall in each case
take  precedence  over the terms of this  Agreement.  By the  execution  of this
Agreement, Optionee acknowledges receipt of a copy of the Plan.

                                       -5-
<PAGE>
         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement to
be effective the date first set forth above.

                                        CORPORATION:

                                        AMERICAN MEDICAL TECHNOLOGIES, INC.

                                        By:_____________________________________
                                                 JAMES T. RASH,
                                                 President

ATTEST:

------------------------------------
Susan Riley,
Assistant Secretary

                                        OPTIONEE:

                                        ----------------------------------------

                                        Address:

                                        ----------------------------------------

                                        ----------------------------------------

                                       -6-
<PAGE>
                                     ANNEX A
                                VESTING SCHEDULE

         The shares subject to the Option shall become vested and exercisable at
the rate of an additional 1/3rd of the total of such shares each 12 months, such
vesting  to occur as of the last day of the 12th  month  following  the month in
which the Option is granted and as of the last day of each  succeeding 12 months
until the Option becomes fully vested and  exercisable as of the last day of the
third year,  provided  that in the event that a  fractional  share  results when
applying this  calculation,  the vested  portion shall be determined by rounding
off to the next lowest whole share.

                                       -7-

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