Document:

<PAGE>
                                                                     Exhibit 4.5
                            BAM! ENTERTAINMENT, INC.

                    NOTICE OF NONQUALIFIED STOCK OPTION AWARD

         Grantee's Name and Address:                David Tobin
                                                    ____________________________
                                                    ____________________________

         You 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") and the Stock Option Award Agreement (the "Option Agreement") attached
hereto, as follows. This Option is intended to be a Non-Qualified Stock Option.
This Option is not pursuant to the BAM! Entertainment, Inc.'s 2000 Stock
Incentive Plan (the "Plan"). Unless otherwise defined herein, the terms defined
in the Plan shall have the same defined meanings in this Notice.

Date of Award                               August 16, 2001

Vesting Commencement Date                   December 28, 2000

Exercise Price per Share                    $4.7936

Total Number of Shares Subject
to the Option (the "Shares")                18,800

Total Exercise Price                        $90,119.68

Type of Option:                             Non-Qualified Stock Option

Expiration Date:                            August 16, 2011

Post-Termination Exercise Period:           Three (3) Months

Vesting Schedule:

         Subject to Grantee's Continuous Service and other limitations set forth
in this Notice 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 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 cease after the leave of absence exceeds a
period of ninety (90) days. 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.

         In the event of the Grantee's change in status from Employee to
Consultant or from an Employee whose customary employment is 20 hours or more
per week to an Employee whose customary employment is fewer than 20 hours per
week, vesting of the Option shall continue only to the extent determined by the
Administrator as of such change in status.

                                       1

<PAGE>

         In the event the Company terminates Grantee's Continuous Service as a
Director and Grantee has not engaged in conduct during Grantee's Continuous
Service that would constitute Cause (as determined in accordance with the
then-effective Director's Agreement between Grantee and the Company), the Option
shall automatically become fully vested on the effective date of such
termination. For the purpose of this Option, a termination by the Company of
Grantee's Continuous Service shall include (but not be limited to) the failure
of the shareholders to reelect Grantee as a Director.

         In addition, the Option automatically shall become fully vested
immediately prior to the closing of any Corporate Transaction.

         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 and the Option Agreement.

                           BAM! Entertainment, Inc., a Delaware corporation

                           By: /s/ Raymond C. Musci
                              -----------------------------------------------
                              Raymond C. Musci, President

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 OR THE OPTION AGREEMENT SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH
RESPECT TO FUTURE AWARDS OR CONTINUATION OF GRANTEE'S CONTINUOUS SERVICE, NOR
SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT OF THE
GRANTEE'S EMPLOYER TO TERMINATE GRANTEE'S CONTINUOUS SERVICE, WITH OR WITHOUT
CAUSE, AND WITH OR WITHOUT NOTICE.

         The Grantee acknowledges receipt of 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. The
Grantee has reviewed this Notice 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 and the Option
Agreement. The Grantee hereby agrees that all disputes arising out of or
relating to this Notice and the Option Agreement shall be resolved in accordance
with Section 18 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: _____________________
                                                           David Tobin

                                        2

<PAGE>

                            BAM! ENTERTAINMENT, INC.

                          STOCK OPTION AWARD AGREEMENT

         1.       Grant of Option. BAM! Entertainment, 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 and this Stock Option Award Agreement (the "Option Agreement"), 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, to the extent that the
aggregate Fair Market Value of 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)
exceeds $100,000, such excess Options, to the extent of the Shares covered
thereby in excess of the foregoing limitation, shall be treated as Non-Qualified
Stock Options. For this purpose, Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the date the Option with respect to such
Shares is awarded.

         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 this Option Agreement. In the event of a
Corporate Transaction, each Award will terminate upon the consummation of the
Corporate Transaction, unless the Award is assumed by the successor corporation
or Parent thereof in connection with the Corporate Transaction. Except as
provided otherwise in an individual Award Agreement, in the event of any
Corporate Transaction there will not be any acceleration of vesting or
exercisability of any Award. No partial exercise of the Option may be for less
than the lesser of five percent (5%) of the total number of Shares subject to
the Option or the remaining number of Shares subject to the Option. In no event
shall the Company issue fractional Shares.

                  (b)      Method of Exercise. The Option shall be exercisable
only by delivery of an Exercise Notice (attached as Exhibit A) 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 signed by the
Grantee and shall be delivered in person, by certified mail, or by such other
method 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 such written notice accompanied by the
Exercise Price, which, to the extent selected, shall be

                                       1

<PAGE>

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, employment tax, and social security tax
withholding obligations, including, without limitation, obligations incident to
the receipt of Shares or the disqualifying disposition of Shares received on
exercise of an Incentive Stock Option. 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) or collect from the Grantee or
other person an amount sufficient to satisfy such tax obligations and/or the
employer's withholding obligations.

         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 United States
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 :

                  (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 (including withholding
of Shares otherwise deliverable upon exercise of the Option) 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 (but only
to the extent that such exercise of the Option would not result in an accounting
compensation charge with respect to the Shares used to pay the exercise price);
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, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate exercise price payable
for the purchased Shares 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.

                                       2

<PAGE>

         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.

         6.       Termination or Change of Continuous Service. In the event the
Grantee's Continuous Service terminates, the Grantee may, to the extent
otherwise so entitled at the date of such termination (the "Termination Date"),
exercise the Option during the Post-Termination Exercise Period. In no event
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, except to the extent otherwise determined by
the Administrator, continue to vest; 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
Grantee is not entitled to exercise the Option on the Termination Date, or if
the Grantee does not exercise 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 from the Termination Date (and in no event later
than the Expiration Date), exercise the Option to the extent he or she was
otherwise entitled to exercise it 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 Grantee is not
entitled to exercise the Option on the Termination Date, or if the Grantee does
not exercise the Option to the extent so entitled within the time specified
herein, the Option shall terminate.

         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 Grantee's estate, or a person
who acquired the right to exercise the Option by bequest or inheritance, may
exercise the Option, but only to the extent the Grantee could exercise the
Option at the date of termination, within twelve (12) months from the date of
death (but in no event later than the Expiration Date). To the extent that the
Grantee is not entitled to exercise the Option on the date of death, or if the
Option is not exercised to the extent so entitled 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 be
transferred by will, by the laws of descent and distribution, and to the extent
and in the manner authorized by the Administrator, to members of the Grantee's
immediate family

                                       3

<PAGE>

(as determined by the Administrator) or pursuant to a domestic relations order.
The terms of the Option shall be binding upon the executors, administrators,
heirs and successors of the Grantee.

         10.      Term of Option. The Option may be exercised no later than the
Expiration Date set forth in the Notice or such earlier date as otherwise
provided herein.

         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;

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

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

                  (b)      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 during the period commencing upon receipt of the Transfer Notice and
ending forty-five (45) days after the first date on which the Company determines
that the Right of First Refusal may be exercised without incurring an accounting
expense with respect to such exercise (the "Option Period") at the per share
price or value and in accordance with 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. During the Option Period and the
120-day period following the expiration of the Option Period, the Company also
may exercise its Repurchase Right in lieu or in addition to its Right of First
Refusal if the Repurchase Right is or becomes exercisable during the Option
Period or such 120-day period.

                  (c)      Payment Terms. The Company shall consummate the
purchase of the Offered Shares on the terms set forth in the Transfer Notice
within 15 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.

                                       4

<PAGE>

                  (d)      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 shareholders of the
Company or other persons or organizations, to exercise all or a part of the
Company's Right of First Refusal.

                  (e)      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 120 days of 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.

                  (f)      Expiration of Transfer Period. Following such 120-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.

                  (g)      Exception for Certain Family Transfers. Anything to
the contrary contained in this section notwithstanding, the transfer of any or
all of the Shares during the Grantee's lifetime or on the Grantee's death by
will or intestacy to the Grantee's Immediate Family or a trust for the benefit
of the Grantee or the Grantee's Immediate Family shall be exempt from the
provisions of this Right of First Refusal (a "Permitted Transfer"); provided,
however, that (i) the transferee or other recipient shall receive and hold the
Shares so transferred subject to the provisions of this Option Agreement, and
there shall be no further transfer of such Shares except in accordance with the
terms of this Option Agreement and (ii) prior to any such transfer, each
transferee shall execute an agreement pursuant to which such transferee shall
agree to receive and hold such Shares subject to the provisions of this Option
Agreement. "Immediate Family" as used herein shall mean spouse, domestic partner
(as determined by the Administrator), child, lineal descendant or antecedent,
father, mother, brother or sister and the lineal descendants of such
individuals.

                  (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 (i) any increase or decrease in the number of issued Shares resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Shares, or similar transaction affecting the Shares,
(ii) any other increase or decrease in the number of issued Shares effected
without receipt of consideration by the Company, or (iii) as the Administrator
may determine in its discretion, any other transaction with respect to Common
Stock to which Section 424(a) of the Code applies or a similar transaction;
provided, however that conversion of any convertible

                                        5
<PAGE>

securities of the Company shall not be deemed to have been "effected without
receipt of consideration, 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.

                  (j)      Corporate Transaction. Immediately prior to the
consummation of a Corporate Transaction, the Right of First Refusal shall
automatically lapse in its entirety, except to the extent this Option Agreement
is assumed by the successor corporation (or its Parent) in connection with such
Corporate Transaction, in which case the Right of First Refusal shall apply to
the new capital stock or other property received in exchange for the Shares in
consummation of the Corporate Transaction, 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 or the Notice, 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. Set forth below is a brief summary as of the
date of this Option Agreement of some of the federal tax consequences of
exercise of the Option and disposition of the Shares. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR
DISPOSING OF THE SHARES.

                  (a)      Exercise of Incentive Stock Option. If the Option
qualifies as an Incentive Stock Option, there will be no regular federal income
tax liability upon the exercise of the Option, although the excess, if any, of
the Fair Market Value of the Shares on the date of exercise over the Exercise
Price will be treated as income for purposes of the alternative minimum tax for
federal tax purposes and may subject the Grantee to the alternative minimum tax
in the year of exercise.

                  (b)      Exercise of Incentive Stock Option Following
Disability. If the Grantee's Continuous Service terminates as a result of
Disability that is not total and permanent disability as defined in Section
22(e)(3) of the Code, to the extent permitted on the date of termination, the
Grantee must exercise an Incentive Stock Option within three (3) months of such
termination for the Incentive Stock Option to be qualified as an Incentive Stock
Option.

                  (c)      Exercise of Non-Qualified Stock Option. On exercise
of a Non-Qualified Stock Option, the Grantee will be treated as having received
compensation income (taxable at

                                       6

<PAGE>

ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Shares on the date of exercise over the Exercise Price. If the Grantee is
an Employee or a former Employee, the Company will be required to withhold from
the Grantee's compensation or collect from the Grantee and pay to the applicable
taxing authorities an amount in cash equal to a percentage of this compensation
income at the time of exercise, and may refuse to honor the exercise and refuse
to deliver Shares if such withholding amounts are not delivered at the time of
exercise.

                  (d)      Disposition of Shares. In the case of a Non-Qualified
Stock Option, if Shares are held for more than one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes and subject to tax at a maximum rate of 20%. In the case of
an Incentive Stock Option, if Shares transferred pursuant to the Option are held
for more than one year after receipt of the Shares and are disposed more than
two years after the Date of Award, any gain realized on disposition of the
Shares also will be treated as capital gain for federal income tax purposes and
subject to the same tax rates and holding periods that apply to Shares acquired
upon exercise of a Non-Qualified Stock Option. If Shares purchased under an
Incentive Stock Option are disposed of prior to the expiration of such one-year
or two-year periods, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
difference between the Exercise Price and the lesser of (i) the Fair Market
Value of the Shares on the date of exercise, or (ii) the sale price of the
Shares.

         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 or other
securities of the Company (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
180-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
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 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 180-day
period thereafter, is an intended beneficiary of this Section 15.

                  (b)      No Amendment Without Consent of Underwriter. During
the period from identification as 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 16(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.

                                       7

<PAGE>

         16.      Entire Agreement: Governing Law. The Notice 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
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
and this Option Agreement are to be construed in accordance with and governed by
the internal laws of the State of California (as permitted by Section 1646.5 of
the California Civil Code, or any similar successor provision) 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 or this
Option Agreement 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.

         17.      Headings. 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.

         18.      Dispute Resolution. The provisions of this Section 18 shall be
the exclusive means of resolving disputes arising out of or relating to the
Notice and this Option Agreement. The Company, the Grantee, and the Grantee's
assignees (the "parties") shall attempt in good faith to resolve any disputes
arising out of or relating to the Notice and this Option Agreement by
negotiation between individuals who have authority to settle the controversy.
Negotiations shall be commenced by either party by notice of a written statement
of the party's position and the name and title of the individual who will
represent the party. Within thirty (30) days of the written notification, the
parties shall meet at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, to resolve the dispute. If the dispute
has not been resolved by negotiation, the parties agree that any suit, action,
or proceeding arising out of or relating to the Notice 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. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR
MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or
more provisions of this Section 18 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.

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

                                       8

<PAGE>

in the Notice, or to such other address as such party may designate in writing
from time to time to the other party.

                                       9

<PAGE>

                                   EXHIBIT A

                            BAM! ENTERTAINMENT, INC.

                                 EXERCISE NOTICE

BAM! Entertainment, Inc.
333 W. Santa Clara Street, Suite 930
San Jose, CA 95113

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 BAM!
Entertainment, Inc. (the "Company") pursuant to the Non-Qualified Stock Option
Award Agreement (the "Option Agreement") and Notice of Stock Option Award (the
"Notice") dated August 16, 2001. 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 and the Option
Agreement and agrees to abide by and be bound by their terms and conditions.

         3.       Rights as Shareholder. 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 shareholder 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,
unless there is (i) any increase or decrease in the number of issued Shares
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Shares, or similar transaction affecting the Shares,
(ii) any other increase or decrease in the number of issued Shares effected
without receipt of consideration by the Company, or (iii) as the Administrator
may determine in its discretion, any other transaction with respect to Common
Stock to which Section 424(a) of the Code applies or a similar transaction;
provided, however that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration.
Such adjustment shall be made by the Administrator and its determination shall
be final, binding and conclusive. Except as the Administrator determines, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason hereof shall be made with respect to, the number or price of Shares
subject to an Award.

         The Grantee shall enjoy rights as a shareholder 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

                                        1

<PAGE>

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.

         6.       Taxes. The Grantee agrees to satisfy all applicable 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 Award Date or within one (1) year from the date the Shares were
transferred to the Grantee. If the Company is required to satisfy any federal,
state or local income or employment tax withholding obligations as a result of
such an early disposition, the Grantee agrees to satisfy the amount of such
withholding in a manner that the Administrator prescribes.

         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 state or federal securities laws:

                  (a)      Securities Law Restrictions:

                  THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
                  UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE
                  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.

                                        2

<PAGE>

                  (b)      Option Agreement Restrictions:

                  THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
                  CERTAIN RESTRICTIONS ON TRANSFER, 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, RIGHT OF
                  FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.

                  (c)      Removal of Legend. When all of the following events
have occurred, the Shares then held by Grantee will no longer be subject to the
legend referred to in Section 7(b): (i) the expiration or termination of the
Lock-up Agreement of Section 15 of the Option Agreement (and of any agreement
entered pursuant to Section 15); and (ii) the expiration or exercise in full of
the Right of First Refusal. After such time, and upon Grantee's request, a new
certificate or certificates representing the Shares not repurchased shall be
issued without the legend referred to in Section 7(b), and delivered to Grantee.

         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.       Headings. 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.

         10.      Dispute Resolution. The provisions of Section 18 of the Option
Agreement shall be the exclusive means of resolving disputes arising out of or
relating to this Exercise Notice.

         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 (as permitted by Section 1646.5 of the California Civil Code, or any
similar successor provision) 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 or
upon deposit in the United States mail by certified mail (if the parties are
within the United States) or upon deposit for delivery by an internationally
recognized express mail courier service (for international delivery of notice),
with postage and fees prepaid, addressed to the other party at its address as
shown below beneath

                                        3
<PAGE>

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 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 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.

                            [Signature Page Follows]

                                       4

<PAGE>

Submitted by:                               Accepted by:

GRANTEE:                                    BAM! ENTERTAINMENT, INC.

                                            By: _______________________________

_________________________                   Title:_____________________________
David Tobin

Address:                                    Address:

_________________________                   BAM! Entertainment, Inc.
_________________________                   333 W. Santa Clara Street, Suite 930
                                            San Jose, CA 95113

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

                                           ____________________________________
                                           Spouse of Grantee

                                       5
<PAGE>

                                    EXHIBIT B

                            BAM! ENTERTAINMENT, INC.

                       INVESTMENT REPRESENTATION STATEMENT

GRANTEE:                 DAVID TOBIN

COMPANY:                 BAM! ENTERTAINMENT, INC.

SECURITY:                COMMON STOCK

AMOUNT:                  18,800

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

                                       1

<PAGE>

availability of certain public information about the Company, (3) the amount of
Securities being 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 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 he is a resident of Massachusetts.

                                           Signature of Grantee:

                                           ____________________________________

                                           Date: _______________,_______

                                       2<PAGE>

                                                                     EXHIBIT 4.6

                            BAM! ENTERTAINMENT, INC.

                    NOTICE OF NONQUALIFIED STOCK OPTION AWARD

         Grantee's Name and Address:                 Bernard Stolar
                                                     ___________________________
                                                     ___________________________

         You 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") and the Stock Option Award Agreement (the "Option Agreement") attached
hereto, as follows. This Option is intended to be a Non-Qualified Stock Option.
This Option is not pursuant to the BAM! Entertainment, Inc.'s 2000 Stock
Incentive Plan (the "Plan"). Unless otherwise defined herein, the defined terms
in this Notice and the Option Agreement shall have the defined meanings set
forth in Exhibit B.

         Date of Award                               January 22, 2002

         Vesting Commencement Date                   January 21, 2002

         Exercise Price per Share                    $3.25

         Total Number of Shares Subject
         to the Option (the "Shares")                250,000

         Total Exercise Price                        $812,500

         Type of Option:                             Non-Qualified Stock Option

         Expiration Date:                            January 22, 2012

         Post-Termination Exercise Period:           Three (3) Months

Vesting Schedule:

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

         1/3 of the Shares subject to the Option shall vest on each anniversary
of the Vesting Commencement Date.

         During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall cease after the leave of absence exceeds a
period of ninety (90) days. 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.

         Except as set forth below, in the event of the Grantee's change in
status from Employee to Consultant or from an Employee whose customary
employment is 20 hours or more per week to an Employee whose customary
employment is fewer than 20 hours per week, vesting of the

                                       1
<PAGE>

Option shall continue only to the extent determined by the Administrator as of
such change in status.

         In the event the Company terminates Grantee's Continuous Service as an
Employee and Grantee has not engaged in conduct during Grantee's Continuous
Service that would constitute Cause (as determined in accordance with the
then-effective Employment Agreement between Grantee and the Company), the Option
shall automatically become fully vested on the effective date of such
termination. For the purpose of this Option, a termination by the Company of
Grantee's Continuous Service shall include (but not be limited to) a termination
by Grantee for Good Reason (as determined in accordance with the then-effective
Employment Agreement between Grantee and the Company).

         In addition, the Option automatically shall become fully vested
immediately prior to the closing of any Corporate Transaction.

         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 and the Option Agreement.

                                BAM! Entertainment, Inc., a Delaware corporation

                                By: /s/ Raymond C. Musci
                                    --------------------------------------------
                                    Raymond C. Musci, Chief Executive Officer

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 OR THE OPTION AGREEMENT SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH
RESPECT TO FUTURE AWARDS OR CONTINUATION OF GRANTEE'S CONTINUOUS SERVICE, NOR
SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT OF THE
GRANTEE'S EMPLOYER TO TERMINATE GRANTEE'S CONTINUOUS SERVICE, WITH OR WITHOUT
CAUSE, AND WITH OR WITHOUT NOTICE.

         The Grantee acknowledges receipt of 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. The
Grantee has reviewed this Notice 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 and the Option
Agreement. The Grantee hereby agrees that all disputes arising out of or
relating to this Notice and the Option Agreement shall be resolved in accordance
with Section 17 of the Option Agreement. The Grantee further agrees to notify
the Company upon any change in the residence address indicated in this Notice.

                                       2
<PAGE>

Dated: ________________                        Signed: _________________________
                                                       Bernard Stolar

                                       3
<PAGE>

                            BAM! ENTERTAINMENT, INC.

                          STOCK OPTION AWARD AGREEMENT

    1.   Grant of Option. BAM! Entertainment, 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 and
this Stock Option Award Agreement (the "Option Agreement"), which are
incorporated herein by reference.

    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, to the extent that the
aggregate Fair Market Value of 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)
exceeds $100,000, such excess Options, to the extent of the Shares covered
thereby in excess of the foregoing limitation, shall be treated as Non-Qualified
Stock Options. For this purpose, Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the date the Option with respect to such
Shares is awarded.

    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 this Option Agreement. In the event of a Corporate
Transaction, each Award will terminate upon the consummation of the Corporate
Transaction, unless the Award is assumed by the successor corporation or Parent
thereof in connection with the Corporate Transaction. Except as provided
otherwise in an individual Award Agreement, in the event of any Corporate
Transaction there will not be any acceleration of vesting or exercisability of
any Award. No partial exercise of the Option may be for less than the lesser of
five percent (5%) of the total number of Shares subject to the Option or the
remaining number of Shares subject to the Option. In no event shall the Company
issue fractional Shares.

         (b)      Method of Exercise. The Option shall be exercisable only by
delivery of an Exercise Notice (attached as Exhibit A) 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 signed by the Grantee and shall
be delivered in person, by certified mail, or by such other method 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 such written 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.

                                       1
<PAGE>

         (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, employment tax, and social security tax withholding
obligations, including, without limitation, obligations incident to the receipt
of Shares or the disqualifying disposition of Shares received on exercise of an
Incentive Stock Option. 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) or collect from the Grantee or other
person an amount sufficient to satisfy such tax obligations and/or the
employer's withholding obligations.

    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 United States securities
laws.

    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 :

         (a)      cash;

         (b)      check;

         (c)      surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Administrator may require (including
withholding of Shares otherwise deliverable upon exercise of the Option) 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
(but only to the extent that such exercise of the Option would not result in an
accounting compensation charge with respect to the Shares used to pay the
exercise price); or

         (d)      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, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased Shares 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.

    6.   Termination or Change of Continuous Service. In the event the Grantee's
Continuous Service terminates, the Grantee may, to the extent otherwise so
entitled at the date of such termination (the "Termination Date"), exercise the
Option during the Post-Termination Exercise Period. In no event shall the Option
be exercised later than the Expiration Date set forth

                                       2
<PAGE>

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, except to the extent otherwise determined
by the Administrator, continue to vest; 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
Grantee is not entitled to exercise the Option on the Termination Date, or if
the Grantee does not exercise 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 from the Termination Date (and in no event later than
the Expiration Date), exercise the Option to the extent he or she was otherwise
entitled to exercise it 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 Grantee is not
entitled to exercise the Option on the Termination Date, or if the Grantee does
not exercise the Option to the extent so entitled within the time specified
herein, the Option shall terminate.

    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 Grantee's estate, or a person who acquired
the right to exercise the Option by bequest or inheritance, may exercise the
Option, but only to the extent the Grantee could exercise the Option at the date
of termination, within twelve (12) months from the date of death (but in no
event later than the Expiration Date). To the extent that the Grantee is not
entitled to exercise the Option on the date of death, or if the Option is not
exercised to the extent so entitled 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 be
transferred by will, by the laws of descent and distribution, and to the extent
and in the manner authorized by the Administrator, to members of the Grantee's
immediate family (as determined by the Administrator), to an estate planning
trust of the Grantee or pursuant to a domestic relations order. The terms of the
Option shall be binding upon the executors, administrators, heirs and successors
of the Grantee.

    10.  Term of Option. The Option may be exercised no later than the
Expiration Date set forth in the Notice or such earlier date as otherwise
provided herein.

                                        3

<PAGE>

    11.  Stop-Transfer Notices. In order to ensure compliance with the
restrictions on transfer set forth in this Option Agreement or the Notice, 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.

    12.  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.

    13.  Tax Consequences. Set forth below is a brief summary as of the date of
this Option Agreement of some of the federal tax consequences of exercise of the
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE GRANTEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.

         (a)      Exercise of Incentive Stock Option. If the Option qualifies as
an Incentive Stock Option, there will be no regular federal income tax liability
upon the exercise of the Option, although the excess, if any, of the Fair Market
Value of the Shares on the date of exercise over the Exercise Price will be
treated as income for purposes of the alternative minimum tax for federal tax
purposes and may subject the Grantee to the alternative minimum tax in the year
of exercise.

         (b)      Exercise of Incentive Stock Option Following Disability. If
the Grantee's Continuous Service terminates as a result of Disability that is
not total and permanent disability as defined in Section 22(e)(3) of the Code,
to the extent permitted on the date of termination, the Grantee must exercise an
Incentive Stock Option within three (3) months of such termination for the
Incentive Stock Option to be qualified as an Incentive Stock Option.

         (c)      Exercise of Non-Qualified Stock Option. On exercise of a
Non-Qualified Stock Option, the Grantee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess,
if any, of the Fair Market Value of the Shares on the date of exercise over the
Exercise Price. If the Grantee is an Employee or a former Employee, the Company
will be required to withhold from the Grantee's compensation or collect from the
Grantee and pay to the applicable taxing authorities an amount in cash equal to
a percentage of this compensation income at the time of exercise, and may refuse
to honor the exercise and refuse to deliver Shares if such withholding amounts
are not delivered at the time of exercise.

         (d)      Disposition of Shares. In the case of a Non-Qualified Stock
Option, if Shares are held for more than one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes and subject to tax at a maximum rate of 20%. In the case of
an Incentive Stock Option, if Shares transferred pursuant to the Option are held
for more than one year after receipt of the Shares and are disposed more than
two

                                       4
<PAGE>
years after the Date of Award, any gain realized on disposition of the Shares
also will be treated as capital gain for federal income tax purposes and subject
to the same tax rates and holding periods that apply to Shares acquired upon
exercise of a Non-Qualified Stock Option. If Shares purchased under an Incentive
Stock Option are disposed of prior to the expiration of such one-year or
two-year periods, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
difference between the Exercise Price and the lesser of (i) the Fair Market
Value of the Shares on the date of exercise, or (ii) the sale price of the
Shares.

         14.      Lock-Up Agreement.

                  (a)      Agreement. The Grantee, if requested by the Company
and the lead underwriter of any public offering of the Common Stock or other
securities of the Company (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
180-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
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 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 180-day
period thereafter, is an intended beneficiary of this Section 14.

                  (b)      No Amendment Without Consent of Underwriter. During
the period from identification as 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 14(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 14 may not be amended or waived
except with the consent of the Lead Underwriter.

         15.      Entire Agreement: Governing Law. The Notice 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
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
and this Option Agreement are to be construed in accordance with and governed by
the internal laws of the State of California (as permitted by Section 1646.5 of
the California Civil Code, or any similar successor provision) 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 or this
Option Agreement be determined by a court of

                                       5

<PAGE>

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.

         16.      Headings. 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.

         17.      Dispute Resolution. The provisions of this Section 17 shall be
the exclusive means of resolving disputes arising out of or relating to the
Notice and this Option Agreement. The Company, the Grantee, and the Grantee's
assignees (the "parties") shall attempt in good faith to resolve any disputes
arising out of or relating to the Notice and this Option Agreement by
negotiation between individuals who have authority to settle the controversy.
Negotiations shall be commenced by either party by notice of a written statement
of the party's position and the name and title of the individual who will
represent the party. Within thirty (30) days of the written notification, the
parties shall meet at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, to resolve the dispute. If the dispute
has not been resolved by negotiation, the parties agree that any suit, action,
or proceeding arising out of or relating to the Notice 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. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR
MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or
more provisions of this Section 17 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.

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

                                       6
<PAGE>

                                    EXHIBIT A

                            BAM! ENTERTAINMENT, INC.

                                 EXERCISE NOTICE

BAM! Entertainment, Inc.
333 W. Santa Clara Street, Suite 716
San Jose, CA 95113

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 BAM!
Entertainment, Inc. (the "Company") pursuant to the 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 Option Agreement 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 and the Option
Agreement and agrees to abide by and be bound by their terms and conditions.

         3.       Rights as Shareholder. 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 shareholder 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,
unless there is (i) any increase or decrease in the number of issued Shares
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Shares, or similar transaction affecting the Shares,
(ii) any other increase or decrease in the number of issued Shares effected
without receipt of consideration by the Company, or (iii) as the Administrator
may determine in its discretion, any other transaction with respect to Common
Stock to which Section 424(a) of the Code applies or a similar transaction;
provided, however that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration.
Such adjustment shall be made by the Administrator and its determination shall
be final, binding and conclusive. Except as the Administrator determines, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason hereof shall be made with respect to, the number or price of Shares
subject to an Award.

                                       1
<PAGE>

         The Grantee shall enjoy rights as a shareholder until such time as the
Grantee disposes of the Shares.

         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.

         6.       Taxes. The Grantee agrees to satisfy all applicable 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. If the Company is required to satisfy any
federal, state or local income or employment tax withholding obligations as a
result of such an early disposition, the Grantee agrees to satisfy the amount of
such withholding in a manner that the Administrator prescribes.

         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 state or federal securities laws:

                  (a)      Securities Law Restrictions:

                  THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
                  UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE
                  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.

                  (b)      Option Agreement Restrictions:

                                       2
<PAGE>

                  THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
                  CERTAIN RESTRICTIONS ON TRANSFER 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 ARE BINDING ON TRANSFEREES OF THESE
                  SHARES.

                  (c)      Removal of Legend. When all of the following events
have occurred, the Shares then held by Grantee will no longer be subject to the
legend referred to in Section 7(b): (i) the expiration or termination of the
Lock-up Agreement of Section 14 of the Option Agreement (and of any agreement
entered pursuant to Section 14). After such time, and upon Grantee's request, a
new certificate or certificates representing the Shares not repurchased shall be
issued without the legend referred to in Section 7(b), and delivered to Grantee.

         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.       Headings. 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.

         10.      Dispute Resolution. The provisions of Section 17 of the Option
Agreement shall be the exclusive means of resolving disputes arising out of or
relating to this Exercise Notice.

         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 (as permitted by Section 1646.5 of the California Civil Code, or any
similar successor provision) 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 or
upon deposit in the United States mail by certified mail (if the parties are
within the United States) or upon deposit for delivery by an internationally
recognized express mail courier service (for international delivery of notice),
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.

                                       3
<PAGE>

         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 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 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.

                            [Signature Page Follows]

                                       4
<PAGE>

Submitted by:                          Accepted by:

GRANTEE:                               BAM! ENTERTAINMENT, INC.

                                       By:______________________________________

__________________________________     Title:___________________________________
Bernard Stolar

Address:                               Address:

__________________________________     BAM! Entertainment, Inc.
__________________________________     333 W. Santa Clara Street, Suite 716
                                       San Jose, CA 95113

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

                                           ______________________________
                                           Spouse of Grantee

                                       5
<PAGE>

                                    EXHIBIT B

                              DEFINITIONS OF TERMS

                          FROM THE AMENDED AND RESTATED

               BAM! ENTERTAINMENT, INC. 2000 STOCK INCENTIVE PLAN

Definitions.  As used herein, the following definitions shall apply:

                  (a)      "Administrator" means the Board or any of the
Committees appointed to administer the Plan.

                  (b)      "Applicable Laws" means the legal requirements
relating to the administration of stock incentive plans, if any, under
applicable provisions of federal and state securities laws, the corporate laws
of California and, to the extent other than California, the corporate law of the
state of the Company's incorporation, the Code, the rules of any applicable
stock exchange or national market system, and the rules of any foreign
jurisdiction applicable to Awards granted to residents therein.

                  (c)      "Award" means the grant of an Option, Restricted
Stock or other right or benefit under the Plan.

                  (d)      "Award Agreement" means the written agreement
evidencing the grant of an Award executed by the Company and the Grantee,
including any amendments thereto.

                  (e)      "Board" means the Board of Directors of the Company.

                  (f)      "Cause" means the definition of such term specified
in the Award Agreement. If no such definition is included in the Award
Agreement, then "Cause" shall mean, with respect to the termination by the
Company or a Related Entity of the Grantee's Continuous Service, that such
termination is for "Cause" as such term is expressly defined in the
then-effective written agreement between the Grantee and the Company or such
Related Entity, or in the absence of such then-effective written agreement or
definition, that such termination is based on, in the determination of the
Administrator, the Grantee's: (i) refusal or failure to act in accordance with
any specific, lawful direction or order of the Company or a Related Entity; (ii)
performance of any act or failure to perform any act in bad faith and to the
material detriment of the Company or a Related Entity; (iii) dishonesty,
intentional misconduct or material breach of any agreement with the Company or a
Related Entity; or (iv) commission of embezzlement, misappropriation of trade
secrets or any felony involving dishonesty, breach of trust, or physical or
emotional harm to any person. At least 14 calendar days prior to the termination
of the Grantee's Continuous Service pursuant to (i) above, the Company shall
provide the Grantee with notice of the Company's or such Related Entity's intent
to terminate, the reason therefor, and an opportunity for the Grantee to cure
such defects in his or her service to the Company's or such Related Entity's
satisfaction. During this 14 day (or longer) period, no Award issued to the
Grantee under the Plan may be exercised or purchased.

                                       1
<PAGE>

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

                  (h)      "Committee" means any committee appointed by the
 Board to administer the Plan.

                  (i)      "Common Stock" means the common stock of the Company.

                  (j)      "Company" means BAM! Entertainment, Inc., a Delaware
corporation.

                  (k)      "Consultant" means any person (other than an Employee
or a Director, solely with respect to rendering services in such person's
capacity as a Director) who is engaged by the Company or any Related Entity to
render consulting or advisory services to the Company or such Related Entity.

                  (l)      "Continuous Service" means that the provision of
services to the Company or a Related Entity in any capacity of Employee,
Director or Consultant, is not interrupted or terminated. Continuous Service
shall not be considered interrupted in the case of (i) any approved leave of
absence, (ii) transfers among the Company, any Related Entity, or any successor,
in any capacity of Employee, Director or Consultant, or (iii) any change in
status as long as the individual remains in the service of the Company or a
Related Entity in any capacity of Employee, Director or Consultant (except as
otherwise provided in the Award Agreement). An approved leave of absence shall
include sick leave, military leave, or any other authorized personal leave. For
purposes of Incentive Stock Options, no such leave may exceed ninety (90) days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract.

                  (m)      "Corporate Transaction" means any of the following
transactions to which the Company is a party:

                           (i)      a merger or consolidation in which the
Company is not the surviving entity, except for a transaction the principal
purpose of which is to change the state in which the Company is incorporated;

                           (ii)     the sale, transfer or other disposition of
all or substantially all of the assets of the Company (including the capital
stock of the Company's subsidiary corporations) in connection with the complete
liquidation or dissolution of the Company;

                           (iii)    any reverse merger in which the Company is
the surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Company's outstanding securities
are transferred to a person or persons different from those who held such
securities immediately prior to such merger; or

                           (iv)     acquisition by any person or related group
of persons (other than the Company or by a Company-sponsored employee benefit
plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange
Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities.

                                       2
<PAGE>

                  (n)      "Director" means a member of the Board or the board
of directors of any Related Entity.

                  (o)      "Disability" means that a Grantee would qualify for
benefit payments under the long-term disability policy of the Company or the
Related Entity to which the Grantee provides services regardless of whether the
Grantee is covered by such policy; provided that if no such long-term disability
policy exists, Disability shall mean that a Grantee is permanently unable to
carry out the responsibilities and functions of the position held by the Grantee
by reason of any medically determinable physical or mental impairment. A Grantee
will not be considered to have incurred a Disability unless he or she furnishes
proof of such impairment sufficient to satisfy the Administrator in its
discretion.

                  (p)      "Employee" means any person, including an Officer or
Director, who is an employee of the Company or any Related Entity. The payment
of a director's fee by the Company or a Related Entity shall not be sufficient
to constitute "employment" by the Company.

                  (q)      "Exchange Act" means the Securities Exchange Act of
1934, as amended.

                  (r)      "Fair Market Value" means, as of any date, the value
of Common Stock determined as follows:

                           (i)      Where there exists a public market for the
Common Stock, the Fair Market Value shall be (A) the closing price for a Share
for the last market trading day prior to the time of the determination (or, if
no closing price was reported on that date, on the last trading date on which a
closing price was reported) on the stock exchange determined by the
Administrator to be the primary market for the Common Stock or the Nasdaq
National Market, whichever is applicable or (B) if the Common Stock is not
traded on any such exchange or national market system, the average of the
closing bid and asked prices of a Share on the Nasdaq Small Cap Market for the
day prior to the time of the determination (or, if no such prices were reported
on that date, on the last date on which such prices were reported), in each
case, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or

                           (ii)     In the absence of an established market for
the Common Stock of the type described in (i), above, the Fair Market Value
thereof shall be determined by the Administrator in good faith and in a manner
consistent with Section 260.140.50 of Title 10 of the California Code of
Regulations.

                  (s)      "Grantee" means an Employee, Director or Consultant
who receives an Award under the Plan.

                  (t)      "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.

                  (u)      "Non-Qualified Stock Option" means an Option not
intended to qualify as an Incentive Stock Option.

                                       3

<PAGE>

                  (v)      "Officer" means a person who is an officer of the
     Company or a Related Entity within the meaning of Section 16 of the
     Exchange Act and the rules and regulations promulgated thereunder.

                  (w)      "Option" means an option to purchase Shares pursuant
     to an Award Agreement granted under the Plan.

                  (x)      "Parent" means a "parent corporation," whether now or
     hereafter existing, as defined in Section 424(e) of the Code.

"Plan" means this 2000 Stock Incentive Plan.

"Post-Termination Exercise Period" means the period specified in the Award
     Agreement of not less than thirty (30) days commencing on the date of
     termination of the Grantee's Continuous Service, or such longer period as
     may be applicable upon death or Disability.

                  (y)      "Registration Date" means the first to occur of (i)
     the closing of the first sale to the general public of (A) the Common Stock
     or (B) the same class of securities of a successor corporation (or its
     Parent) issued pursuant to a Corporate Transaction in exchange for or in
     substitution of the Common Stock, pursuant to a registration statement
     filed with and declared effective by the Securities and Exchange Commission
     under the Securities Act of 1933, as amended; and (ii) in the event of a
     Corporate Transaction, the date of the consummation of the Corporate
     Transaction if the same class of securities of the successor corporation
     (or its Parent) issuable in such Corporate Transaction shall have been sold
     to the general public pursuant to a registration statement filed with and
     declared effective by the Securities and Exchange Commission under the
     Securities Act of 1933, as amended, on or prior to the date of consummation
     of such Corporate Transaction.

                  (z)      "Related Entity" means any Parent, Subsidiary and any
     business, corporation, partnership, limited liability company or other
     entity in which the Company, a Parent or a Subsidiary holds a substantial
     ownership interest, directly or indirectly.

                  (aa)     "Restricted Stock" means Shares issued under the Plan
     to the Grantee for such consideration, if any, and subject to such
     restrictions on transfer, rights of first refusal, repurchase provisions,
     forfeiture provisions, and other terms and conditions as established by the
     Administrator.

                  (bb)     "Share" means a share of the Common Stock.

                  (cc)     "Subsidiary" means a "subsidiary corporation,"
     whether now or hereafter existing, as defined in Section 424(f) of the
     Code.

                                        4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00056-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00056-of-00352.parquet"}]]