Document:

EXHIBIT 4.3
                        INCENTIVE STOCK OPTION AGREEMENT

         THIS INCENTIVE  STOCK OPTION  AGREEMENT (the  "Agreement")  is made and
entered into,  effective on the "Effective Date" set forth on the signature page
hereof (the "Effective  Date"), by and between  MACHINETALKER,  INC., a Delaware
corporation ("Company"), and the person executing this Agreement as the "Holder"
hereunder  ("Holder"),  pursuant to the STOCK OPTION PLAN (the "Plan") sponsored
by the Company.

         FOR  VALUABLE  CONSIDERATION,  receipt  which is  hereby  acknowledged,
Company hereby grants to Holder the following option (the "Option"):

     SECTION 1. GRANT OF OPTION. Subject to the terms and conditions hereinafter
set forth, Company hereby grants to Holder the right and option to purchase from
the Company the number of shares of the Company's  common stock ("Common Stock")
designated  on the  signature  page  hereof  as  "Option  Shares"  (the  "Option
Shares"),  at the  exercise  price per share  set  forth on the  signature  page
hereof,  and  subject to such  vesting  schedule  as are set forth in Section 2,
below.  Except as otherwise  specified herein, this Option is exercisable at any
time and from time to time during its term, in whole or in part.  Unless earlier
terminated  pursuant to Section 7 or 9 hereof, this Option will terminate in all
respects,  and  all  rights  and  options  to  purchase  shares  hereunder  will
terminate, ten (10) years from the Effective Date of this Option.

     SECTION 2. VESTING AND EXERCISE OF OPTION. This Option shall be exercisable
from time to time only to the extent that Holder then has become  vested in this
Option. As of any date during the term of this Option,  Holder shall be entitled
to  purchase  such  number of the Option  Shares  (to the extent not  previously
purchased  hereunder) as is determined by multiplying the total number of Option
Shares times  Holder's  then-current  vesting  percentage  as  determined  under
Sections 2(a), below.

          (a) Subject to acceleration pursuant to Section 7, below, Holder shall
     become  vested in this Option over the four-year  period  commencing on the
     "Vesting  Commencement  Date" set forth on the  signature  page hereof (the
     "Vesting  Commencement Date") as follows: (i) Holder shall become vested in
     twenty-five  percent (25%) of this Option following Holder's completing one
     year of continuous service as an employee of the Company from and after the
     Vesting Commencement Date, and (ii) thereafter,  Holder shall become vested
     in  one-thirty-sixth  (1/36th)  of the  remainder  of this  Option for each
     complete period of thirty (30)  consecutive  days that Holder  subsequently
     remains  continuously  employed  with the Company  from and after the first
     annual anniversary of the Vesting Commencement Date.

          (b) Holder may exercise this Option at any time during the term hereof
     with  respect  to  Option  Shares  in which  Holder  has  become  vested by
     delivering to the Company (i) a written notice of exercise,  specifying the
     number of Option  Shares that Holder has elected to purchase  hereunder and
     the  address to which the  certificate  representing  such  shares is to be
     mailed, (ii) cash, certified or bank check or postal money order payable to
     the order of the Company for an amount equal to the sum of (x) the Exercise
     Price  of such  shares,  plus  (y) the  amount,  if any,  required  to fund
     withholding  taxes due with respect to such exercise,  as  contemplated  by
     Section 11, below, and (iii) such  documentation as is necessary to satisfy
     the conditions precedent to exercise set forth in Section 3, below.

          (c) If  Holder's  employment  with the Company is  terminated  for any
     reason prior to Holder's becoming one hundred percent (100%) vested in this
     Option,  then Holder's rights with respect to the unvested  portion of this
     Option shall expire  forthwith on the effective  date as of which  Holder's
     employment is terminated.

                                      -1-
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     SECTION 3. CONDITIONS  PRECEDENT.  As a condition precedent to any exercise
of this Option, upon request of the Company,  Holder (or if any other individual
or individuals are exercising this Option, such individual or individuals) shall
deliver  to the  Company  pursuant  to  Section  2(a)(iii),  above,  each of the
following:

          (a) An  investment  letter in form and substance  satisfactory  to the
     Company and its  counsel,  containing  among  other  things  (including  an
     acknowledgment  of the rights of first  refusal  set forth in  Section  11,
     hereof) a statement  by Holder that (i) the Option is then being  exercised
     for the  account of Holder and only with a view to  investment  in, and not
     for, in connection  with or with a view to the  disposition  of, the shares
     with respect to which the Option is then being  exercised;  (ii) Holder has
     been advised that Rule 144 of the Securities and Exchange  Commission  (the
     "Commission"),  which  permits  the  resale,  subject to various  terms and
     conditions,  of  small  amounts  of  "restricted  securities"  (as  therein
     defined) after they have been held for one (1) year,  does not now apply to
     the Company  because the Company is not now required to file,  and does not
     file,  current  reports  under  the  Securities  Exchange  Act of 1934 (the
     "Exchange Act"), nor is there publicly available information concerning the
     Company  substantially  equivalent  to that which would be available if the
     Company were required to file such reports;  (iii) Holder  understands that
     there is no assurance that the Company will ever become a reporting company
     under the Exchange Act and that the Company has no  obligation to Holder to
     do so; (iv) Holder and Holder's representatives have fully investigated the
     Company and the business and  financial  conditions  concerning it and have
     knowledge of the Company's then current corporate  activities and financial
     condition; and (v) Holder believes that the nature and amount of the shares
     being  purchased  are  consistent  with  Holder's  investment   objectives,
     abilities  and  resources.   The  restrictions  imposed  by  the  foregoing
     investment  representations  will be inoperative upon the registration with
     the Commission of the stock subject to this Option or acquired  through the
     exercise of this Option.

          (b)  An  executed  Stock  Transfer   Agreement  (the  "Stock  Transfer
     Agreement") in form reasonably  satisfactory to the Company in which, inter
     alia,  Holder shall grant to the Company a right of first  refusal prior to
     any sale or attempted  sale of any Option Shares to any other person.  Such
     first-refusal  rights  shall not apply to any  Transaction  (as  defined in
     Section 7, below),  and in all events shall  terminate and be of no further
     force or effect  from and after the first date as of which the  Company has
     filed  with the United  States  Securities  and  Exchange  Commission  (the
     "Commission") a registration statement for the sale of any shares of Common
     Stock under the Securities Act of 1933, as amended (the "Securities  Act"),
     and such registration statement becomes effective. If there is any conflict
     or  inconsistency  between the provisions of this Option and the provisions
     of any Stock Transfer Agreement,  then the provisions of the Stock Transfer
     Agreement shall control.

     SECTION 4. MARKET STAND-OFF.  In addition to any restrictions stated in the
Stock  Transfer  Agreement,  the  Holder  also  agrees for a period of up to one
hundred  eighty  (180)  days  from the  effective  date of any  registration  of
securities  of the Company  under the  Securities  Act of 1933,  as amended (the
"Securities Act"), upon request of the Company or the underwriters  managing any
underwritten offering of the Company's  securities,  not to sell, make any short
sale of, loan, grant any option for the purchase of, or otherwise dispose of any
shares issued pursuant to the exercise of this Option, without the prior written
consent of the Company and such underwriters.

     SECTION 5.  DELIVERY OF SHARES.  Within a  reasonable  time  following  the
receipt by the Company of the written notice and payment of the option price for
the  shares to be  purchased  thereunder  and the  fulfillment  by Holder of the
conditions  precedent  to exercise of this  Option,  the Company will deliver or
cause to be delivered to the Holder (or if any other  individual or  individuals
are exercising  this Option,  to such  individual or individuals) at the address
specified  pursuant to Section 2 hereof a certificate  or  certificates  for the
number of shares  with  respect  to which the  Option is then  being  exercised,
registered in the name of the Holder (or the name or names of the  individual or
individuals  exercising the Option,  either alone or jointly with another person

                                      -2-
<PAGE>

or  persons  with  rights of  survivorship,  as the  individual  or  individuals
exercising  the Option  will  prescribe  in writing to the  Company);  provided,
however, that:

          (a) Such  delivery  will be deemed  effected for all  purposes  when a
     stock transfer agent will have deposited such  certificate or  certificates
     in the United States mail,  addressed to the Holder (or such  individual or
     individuals) at the address so specified;  and provided further that if any
     law,   regulation  or  order  of  the   Commission  or  other  body  having
     jurisdiction in the premises will require the Company or the Holder (or the
     individual  or  individuals  exercising  this Option) to take any action in
     connection with the sale of the shares then being purchased,  then, subject
     to the other provisions of this paragraph, the date on which such sale will
     be  deemed  to  have  occurred  and  the  date  for  the  delivery  of  the
     certificates  for such shares will be extended for the period  necessary to
     take and complete such action,  it being  understood  that the Company will
     have no obligation to take and complete any such action.

          (b)  Notwithstanding  the  foregoing,  if this Option is exercised for
     shares subject to the first-refusal  rights described in the Stock Transfer
     Agreement,  then the certificate or certificates  representing  such shares
     will be delivered in accordance  with the terms of, and as described in the
     Stock Transfer Agreement.

     SECTION 6.  ADJUSTMENTS  UPON CHANGES IN  CAPITALIZATION.  The existence of
this  Option will not affect in any way the right or power of the Company or its
stockholders  to make or authorize  any or all  adjustments,  recapitalizations,
reorganizations  or other  changes in the  Company's  capital  structure  or its
business,  or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Common
Stock or the rights  thereof,  or the dissolution or liquidation of the Company,
or any sale or  transfer  of all or any part of its assets or  business,  or any
other corporate act or proceeding,  whether of a similar character or otherwise.
If the Company will effect a  subdivision  or  consolidation  of shares or other
capital  readjustment,  the payment of a stock  dividend,  or other  increase or
reduction  of the  number of shares of the  Common  Stock  outstanding,  without
receiving compensation therefor in money, services or property, then the number,
class,  and per share  price of shares of stock  subject to this  Option will be
appropriately adjusted in such a manner as to entitle the Holder to receive upon
exercise of this Option,  for the same  aggregate cash  consideration,  the same
total  number  and  class of  shares  that  the  owner  of an  equal  number  of
outstanding  shares of Common Stock would own as a result of the event requiring
the adjustment.  Except as  hereinbefore  expressly  provided,  the issue by the
Company of shares of stock of any class, or securities  convertible  into shares
of stock of any class,  for cash or property,  or for labor or services,  either
upon  direct  sale or upon the  exercise  of rights  or  warrants  to  subscribe
therefor, or upon conversion of shares of obligations of the Company convertible
into such shares or other  securities,  will not affect,  and no  adjustment  by
reason  thereof  will be made with  respect to, the number or price of shares of
Common Stock then subject to this Option.

     SECTION 7. EFFECT OF CERTAIN  TRANSACTIONS.  If the Company is a party to a
merger or reorganization with one or more other corporations, whether or not the
Company  is  the  surviving  or  resulting   corporation,   or  if  the  Company
consolidates with or into one or more other  corporations,  or if the Company is
liquidated,  or if there is a sale or other  disposition of substantially all of
the  Company's  capital  stock  or  assets  to a third  party or  parties  (each
hereinafter  referred  to as a  "Transaction"),  in any case while  this  Option
remains  outstanding:  (a) subject to the provisions of clause (b) below,  after
the effective date of such Transaction  this Option will remain  outstanding and
will be exercisable in shares of Common Stock or, if applicable,  shares of such
stock or other  securities,  cash or property as the holders of shares of Common
Stock received  pursuant to the terms of such  Transaction;  or (b) the time for
exercise of this Option may be accelerated  by the Company's  Board of Directors
so that this Option will be fully  exercisable on or prior to the effective date
of such Transaction; provided that (x) notice of such acceleration will be given
to the Holder, and (y) the Holder will have the right to exercise this Option in
part or in full prior to the effective date of such Transaction.

                                      -3-
<PAGE>

     SECTION 8. RIGHTS OF HOLDER.  No person will,  by virtue of the granting of
this  Option to the Holder,  be deemed to be a holder of any shares  purchasable
under this Option or to be entitled to the rights or  privileges  of a holder of
such shares unless and until this Option has been exercised with respect to such
shares and they have been issued  pursuant to that exercise of this Option.  The
granting of this Option  will not impose  upon the  Company any  obligations  to
employ or to continue to employ the Holder or, if  applicable,  to continue  the
Holder as a director of the  Company;  and the right of the Company to terminate
the employment of the Holder will not be diminished or affected by reason of the
fact that this Option has been granted to the Holder.  Nothing herein  contained
will impose any  obligation  upon the Holder to exercise  this Option.  Although
this  Option is  intended  to qualify as an  incentive  stock  option  under the
Internal Revenue Code of 1986, the Company makes no representation as to the tax
treatment to the Holder upon receipt or exercise of this Option or sale or other
disposition of the shares covered by this Option.

     SECTION 9.  RESERVATION  OF SHARES.  At all times while any portion of this
Option is  outstanding,  the Company will:  reserve and keep  available,  out of
shares of its authorized and unissued stock or reacquired  shares,  a sufficient
number of shares of its Common Stock to satisfy the requirements of this Option;
comply  with the terms of this  Option  promptly  upon  exercise  of the  Option
rights;  and pay all fees or  expenses  necessarily  incurred  by the Company in
connection  with the issuance and delivery of shares pursuant to the exercise of
this Option.

     SECTION 10. TRANSFER AND  TERMINATION.  This Option is not  transferable by
the Holder otherwise than by will or the laws of descent and distribution.  This
Option is  exercisable,  during the Holder's  lifetime,  only by him, and by him
only while he is an employee of the Company,  except that in the event that such
employment  terminates for any reason other than for Cause as defined below, and
other than by reason of death,  the Holder will have the right to exercise  this
Option within ninety (90) days after the date he ceases to be an employee of the
Company (but not later than the expiration date of this Option). As used in this
paragraph,  "Cause" means (a) any material breach by the Holder of any agreement
to which the Holder and the Company are both parties,  and such material  breach
is not cured within seven (7) days of written notice thereof, (b) any act (other
than  retirement) or omission to act by the Holder which may have a material and
adverse effect on the Company's  business or on the Holder's  ability to perform
duties  or  services  for  the  Company,  including,   without  limitation,  the
commission of any crime (other than ordinary traffic violations), fraud and acts
of moral turpitude, or (c) any material misconduct or material neglect of duties
by the Holder in  connection  with the business or affairs of the Company or any
affiliate of the Company, other than an error in good faith exercise of business
judgment. An employment  relationship between the Company and the Holder will be
deemed to exist,  for  purposes of this  Option,  during any period in which the
Holder  is  employed  in any  capacity  by the  Company  or by a  parent  or any
subsidiary of the Company.  In the event of the death of the Holder while he has
the right to exercise this Option, his or her executors,  administrators,  heirs
or legatees,  as the case may be, will have the right to exercise this Option at
any time within one hundred eighty (180) days after his death (but not after the
termination date of this Option).

     SECTION 11. TAX WITHHOLDING.  To the extent that the exercise of the Option
gives rise to an  obligation  on the part of the Company to withhold  income tax
from  amounts  otherwise to be paid to Holder,  the Company  shall do so on such
terms and in accordance with such procedures as may be required under applicable
law. If Holder's  wages from the Company  are  insufficient  to fund  payment of
Employee's  share of such  withholding  taxes,  Holder shall deposit such monies
with the Company as a condition to exercising this Option.

     SECTION 12. MISCELLANEOUS.

          (A) NOTICES. All notices permitted or required by this Agreement shall
     be in writing and shall be deemed to be  delivered  and  received  (i) when

                                      -4-
<PAGE>

     personally  delivered,  or  (ii)  on the day on  which  sent by  facsimile,
     electronic mail, or other similar device generating a receipt  evidencing a
     successful transmission, or (iii) on the third (3rd) business day after the
     day on which  deposited in the United  States  mail,  first-class-certified
     mail, return receipt requested,  postage prepaid,  transmitted or addressed
     to the person for whom intended, at the facsimile number, email address, or
     mailing  address  appearing  at the end of  this  Agreement  or such  other
     facsimile  number,  email address,  or mailing address,  notice of which is
     given in the manner contemplated by this Section 12(a).

          (B) LEGENDS.  All share  certificates  evidencing  Option Shares shall
     bear such  legends as the  Company,  in its  discretion,  determines  to be
     appropriate to reflect  restrictions  imposed upon such Shares by the Plan,
     this Agreement, and applicable federal and state securities laws.

          (C) NO  EMPLOYMENT  RIGHTS.  Neither  the  adoption  of the Plan,  the
     granting of the Option  evidenced  by this  Agreement,  or any other action
     taken by the  Company in  connection  therewith  are  intended  or shall be
     construed as giving to Holder any right to be retained in the employ of the
     Company  for any period of time or to  restrict in any manner the right and
     power of the Company to terminate Holder's employment with the Company.

          (D)  GOVERNING  LAW.  This Option  shall be  governed by the  Internal
     Revenue Code of 1986, as amended,  and by the internal laws of the State of
     California, without regard to conflict of law principles.

          (E)  GOVERNMENT  REGULATIONS.  The  Option  is  subject  to all  laws,
     regulations  and  orders  of  any  governmental   authority  which  may  be
     applicable thereto and,  notwithstanding  any of the provisions hereof, the
     Holder agrees that he will not exercise the Option  granted hereby nor will
     the  Company be  obligated  to issue any shares of stock  hereunder  if the
     exercise thereof or the issuance of such shares,  as the case may be, would
     constitute  a  violation  by the  Holder  or the  Company  of any such law,
     regulation  or order or any  provision  thereof.  The  Company  will not be
     obligated to take any affirmative  action in order to cause the exercise of
     this Option or the  issuance of shares  pursuant  hereto to comply with any
     such law, regulation, order or provision.

          (F)  OPTION  SUBJECT  TO PLAN.  This  Option is and will be subject in
     every respect to the provisions of the Company's 2001 Stock Option Plan, as
     amended from time to time,  which is  incorporated  herein by reference and
     made a part hereof.  The Holder hereby  accepts this Option  subject to all
     the terms and  provisions  of the Plan and agrees  that (i) in the event of
     any  conflict  between the terms  hereof and those of the Plan,  the latter
     will prevail,  and (ii) all decisions under and interpretations of the Plan
     by the Committee or the Board will be final,  binding and  conclusive  upon
     the Holder and his or her heirs and legal representatives.

                   [Signatures appear on the following page.]

                                      -5-
<PAGE>

         IN WITNESS  WHEREOF,  the parties have executed this Option,  or caused
this Agreement to be executed, as of the Effective Date.

       "COMPANY":                                     "HOLDER:"

MACHINETALKER, INC.,
 a Delaware corporation

By_____________________________                 ______________________________
    Roland F. Bryan, President                  Holder's Signature

Address and Facsimile No. for Notices:          ______________________________
                                                Holder's Printed Name

MachineTalker, Inc.
513 De La Vina Street
Santa Barbara, California 93101                 Address and Facsimile No.
                                                 for Notices:

                                                -------------------------------
                                                -------------------------------
                                                -------------------------------
Facsimile No.:  (805) 657-1740
                                                Facsimile No.:(  )_____________

                                                No. of Option Shares:__________

                                                Vesting Commencement Date:_____

                                                Effective Date:_________________

                                                Exercise Price Per Share:_______

                                      -6-EXHIBIT 4.4
                       NONQUALIFIED STOCK OPTION AGREEMENT

         THIS NONQUALIFIED  STOCK OPTION AGREEMENT (the "Agreement") is made and
entered into, dated for reference  purposes as of the "Effective Date" set forth
on  the  signature  page  hereof  (the   "Effective   Date"),   by  and  between
MACHINETALKER,  INC., a Delaware  corporation  (the  "Company"),  and the person
executing this Agreement as the "Holder" hereunder  ("Holder"),  pursuant to the
STOCK OPTION PLAN (the "Plan")  sponsored by the Company,  with reference to the
following facts:

         RECITALS:

         In  recognition  of past  services  by Holder and as an  inducement  to
Holder to provide  services for the Company,  the Company has agreed to grant to
Holder a  nonqualified  option to purchase  certain shares of the common capital
stock of the Company,  and the parties have agreed to execute this  Agreement in
order to evidence the grant of such option.

         AGREEMENTS:

         NOW,  THEREFORE,  FOR VALUABLE  CONSIDERATION,  receipt which is hereby
acknowledged,  Company  hereby  grants  to  Holder  the  following  option  (the
"Option"):

Section 1. GRANT OF OPTION. Subject to the terms and conditions set forth below,
the  Company  hereby  grants to Holder the right and option  (the  "Option")  to
purchase from the Company the number of shares of the Company's  common  capital
stock  ("Common  Stock")  designated  on the  signature  page  hereof as "Option
Shares"  (the "Option  Shares") at an exercise  price per share set forth on the
signature  page  hereof (the  "Exercise  Price"),  subject to Holder's  becoming
vested in the Option as set forth in this Section 1.

     (a)  Subject  to  Sections  1(b)  and  1(c),  below,  the  Option  shall be
exercisable only to the extent Holder has become vested therein.  As of any date
during the term of this Option, Holder shall be entitled to purchase such number
of the Option Shares (to the extent not  previously  purchased  hereunder) as is
determined  by  multiplying  the total number of Option  Shares  times  Holder's
then-current  vesting  percentage  as  determined  under this  Section  1(a) and
Section 7, below. In consideration  for Holder's service to the Company from and
after the "Vesting  Commencement  Date" set forth on the  signature  page hereof
(the "Vesting  Commencement Date"), Holder shall become vested in this Option as
follows:

               (i) After one year of  continuous  service as a consultant of the
          Company following Holder's Vesting  Commencement Date, Holder shall be
          twenty-five percent (25.0%) vested in this Option.

               (ii) For each  subsequent  period of thirty (30) days that Holder
          thereafter remains continuously as a consultant of the Company, Holder
          shall become vested in  one-thirty-sixth  (1/36th) of the remainder of
          this Option.

     (b)  Notwithstanding  any provision  hereof to the  contrary,  Holder shall
forfeit any  portion of the Option in which  Holder is not then vested as of the
effective  date as of which Holder's  service  engagement as a consultant to the
Company is terminated.

     (c) Subject to the  foregoing  provisions  of this Section 1, the Option is
exercisable  at any time and from time to time  during its term,  in whole or in
part,  to the extent  that Holder has become  vested in such Option  pursuant to
this Section 1. This Option will  terminate in all respects,  and all rights and
options to purchase  shares  hereunder  will  terminate  ten (10) years from the
Effective Date of this Option.

                                       1
<PAGE>

Section 2. MANNER OF EXERCISE OF OPTION.  Holder may exercise the Option only by
delivering to the Company (a) a written notice of exercise specifying the number
of shares with respect to which the Option is to be exercised and the address to
which  the  certificate  representing  such  shares is to be  mailed,  (b) cash,
certified  or bank  check or  postal  money  order  payable  to the order of the
Company for an amount equal to the sum of (x) the Exercise Price of such shares,
and (y) such amount,  if any, as may be due to fund  withholding  taxes due with
respect  to such  exercise,  as  required  by Section  11,  below,  and(c)  such
documentation establishing that the conditions precedent specified in Section 3,
below, have been satisfied by the Holder.

Section 3.  CONDITIONS  PRECEDENT.  As a condition  precedent to any exercise of
this Option, upon request of the Company, the Holder (or if any other individual
or individuals are exercising this Option, such individual or individuals) shall
deliver to the Company each of the following:

     (a) Upon request of the Company, an investment letter in form and substance
satisfactory  to the  Company  and its counsel  which will  contain  among other
things a statement  in writing that (i) the Option is then being  exercised  for
the account of the Holder and only with a view to investment in, and not for, in
connection with or with a view to the disposition of, the shares with respect to
which the Option is then being exercised; (ii) Holder has been advised that Rule
144 of the Securities and Exchange Commission (the "Commission"),  which permits
the  resale,  subject  to  various  terms and  conditions,  of small  amounts of
"restricted  securities" (as therein  defined) after they have been held for one
(1) year,  does not now apply to the  Company  because  the  Company  is not now
required  to file,  and does not file,  current  reports  under  the  Securities
Exchange  Act of 1934 (the  "Exchange  Act"),  nor is there  publicly  available
information concerning the Company substantially  equivalent to that which would
be  available if the Company were  required to file such  reports;  (iii) Holder
understands  that there is no  assurance  that the  Company  will ever  become a
reporting  company under the Exchange Act and that the Company has no obligation
to the Holder to do so;  (iv)  Holder and  Holder's  representatives  have fully
investigated the Company and the business and financial conditions concerning it
and have  knowledge of the  Company's  then  current  corporate  activities  and
financial  condition;  and (v) Holder believes that the nature and amount of the
shares being  purchased  are  consistent  with Holder's  investment  objectives,
abilities and  resources.  The foregoing  investment  representations  no longer
shall be required after registration with the Commission of the stock subject to
this Option or acquired through the exercise of this Option.

     (b) An executed Stock Transfer  Agreement (the "Stock Transfer  Agreement")
in a form  reasonably  satisfactory to the Company and permitted by the terms of
the Plan,  in which,  inter alia,  Holder  shall grant to the Company a right of
first  refusal  prior to any sale or attempted  sale of any Option Shares to any
other person.  Such first-refusal  rights shall not apply to any Transaction (as
defined in Section 7,  below),  and in all events shall  terminate  and be of no
further  force or effect  from and after the first date as of which the  Company
has filed  with the  United  States  Securities  and  Exchange  Commission  (the
"Commission")  a  registration  statement  for the sale of any  shares of Common
Stock under the Securities Act of 1933, as amended (the  "Securities  Act"), and
such  registration  statement  becomes  effective.  If there is any  conflict or
inconsistency  between the  provisions of this Option and the  provisions of any
Stock Transfer  Agreement,  then the provisions of the Stock Transfer  Agreement
shall control.

Section 4. MARKET STAND-OFF.  Holder agrees that in addition to the restrictions
on transfer of the Option Shares set forth in the Stock Transfer Agreement,  for
a period of up to one hundred  eighty (180) days from the effective  date of any
registration  of securities of the Company under the  Securities Act of 1933, as
amended (the "Securities  Act"), upon request of the Company or the underwriters
managing any underwritten offering of the Company's securities, Holder shall not
sell,  make any short sale of,  loan,  grant any option for the  purchase of, or

                                       2
<PAGE>

otherwise  dispose of this Option or any shares issued  pursuant to the exercise
of this  Option,  without  the prior  written  consent of the  Company  and such
underwriters.

Section 5. DELIVERY OF SHARES. Within a reasonable time following the receipt by
the Company of the written  notice and payment of the option  exercise price for
the  shares  to be  purchased  hereunder  and the  fulfillment  by Holder of the
conditions  precedent  to exercise of this  Option,  the Company will deliver or
cause to be delivered to Holder (or if any other  individual or individuals  are
exercising  this  Option,  to such  individual  or  individuals)  at the address
specified  pursuant to Section 2, above, a certificate or  certificates  for the
number of shares  with  respect  to which the  Option is then  being  exercised,
registered in the name of the Holder (or the name or names of the  individual or
individuals  exercising the Option,  either alone or jointly with another person
or  persons  with  rights of  survivorship,  as the  individual  or  individuals
exercising  the Option  will  prescribe  in writing to the  Company);  provided,
however, that:

     (a) Such  delivery  will be deemed  effected for all purposes  when a stock
transfer  agent will have  deposited such  certificate  or  certificates  in the
United States mail,  addressed to the Holder (or such individual or individuals)
at the address so specified; and provided further that if any law, regulation or
order of the Commission or other body having  jurisdiction  in the premises will
require the Company or the Holder (or the individual or  individuals  exercising
this Option) to take any action in  connection  with the sale of the shares then
being purchased,  then,  subject to the other provisions of this paragraph,  the
date on which  such sale will be  deemed to have  occurred  and the date for the
delivery of the  certificates  for such  shares will be extended  for the period
necessary to take and complete such action, it being understood that the Company
will have no obligation to take and complete any such action.

     (b) Notwithstanding  the foregoing,  if this Option is exercised for shares
subject to the first-refusal  rights set forth in the Stock Transfer  Agreement,
then the certificate or certificates  representing such shares will be delivered
in  accordance  with the  terms  of,  and as  described  in the  Stock  Transfer
Agreement.

Section 6.  ADJUSTMENTS  UPON CHANGES IN  CAPITALIZATION.  The existence of this
Option  will not  affect  in any way the  right or power of the  Company  or its
Shareholders  to make or authorize  any or all  adjustments,  recapitalizations,
reorganizations  or other  changes in the  Company's  capital  structure  or its
business,  or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Common
Stock or the rights  thereof,  or the dissolution or liquidation of the Company,
or any sale or  transfer  of all or any part of its assets or  business,  or any
other corporate act or proceeding,  whether of a similar character or otherwise.
If the Company will effect a  subdivision  or  consolidation  of shares or other
capital  readjustment,  the payment of a stock  dividend,  or other  increase or
reduction  of the  number of shares of the  Common  Stock  outstanding,  without
receiving compensation therefor in money, services or property, then the number,
class,  and per share  price of shares of stock  subject to this  Option will be
appropriately adjusted in such a manner as to entitle the Holder to receive upon
exercise of this Option,  for the same  aggregate cash  consideration,  the same
total  number  and  class of  shares  that  the  owner  of an  equal  number  of
outstanding  shares of Common Stock would own as a result of the event requiring
the adjustment.  Except as  hereinbefore  expressly  provided,  the issue by the
Company of shares of stock of any class, or securities  convertible  into shares
of stock of any class,  for cash or property,  or for labor or services,  either
upon  direct  sale or upon the  exercise  of rights  or  warrants  to  subscribe
therefor, or upon conversion of shares of obligations of the Company convertible
into such shares or other  securities,  will not affect,  and no  adjustment  by
reason  thereof  will be made with  respect to, the number or price of shares of
Common Stock then subject to this Option.

Section 7. EFFECT OF CERTAIN TRANSACTIONS. If the Company is a party to a merger
or  reorganization  with  one or more  other  corporations,  whether  or not the
Company  is  the  surviving  or  resulting   corporation,   or  if  the  Company

                                       3
<PAGE>

consolidates with or into one or more other  corporations,  or if the Company is
liquidated,  or if there is a sale or other  disposition of substantially all of
the  Company's  capital  stock  or  assets  to a third  party or  parties  (each
hereinafter  referred  to as a  "Transaction"),  in any case while  this  Option
remains  outstanding:  (a) subject to the provisions of clause (b) below,  after
the effective date of such Transaction  this Option will remain  outstanding and
will be exercisable in shares of Common Stock or, if applicable,  shares of such
stock or other  securities,  cash or property as the holders of shares of Common
Stock received  pursuant to the terms of such  Transaction;  or (b) the time for
exercise of this Option may be accelerated by the Board so that this Option will
be fully  exercisable  on or prior to the  effective  date of such  Transaction;
provided that (x) notice of such acceleration  will be given to the Holder,  (y)
the Holder will have the right to exercise  this Option in part or in full prior
to the  effective  date  of  such  Transaction,  and  (z) to the  extent  not so
exercised,  this Option will be canceled prior to or as of such effective  date;
and  provided,  further,  that the  Board  may not  accelerate  unexercised  and
unexpired options pursuant to this clause (b) if to do so would adversely affect
pooling of  interests  treatment  intended to be effected in  connection  with a
Transaction.

Section 8. RIGHTS OF HOLDER.  No person will,  by virtue of the granting of this
Option to the Holder,  be deemed to be a holder of any shares  purchasable under
this Option or to be entitled  to the rights or  privileges  of a holder of such
shares  unless and until this  Option has been  exercised  with  respect to such
shares and they have been issued  pursuant to that exercise of this Option.  The
granting of this Option will not impose upon the Company or its shareholders any
obligations to continue  Holder's service  engagement with the Company,  and the
right of the Company to terminate  Holder's service  engagement with the Company
will not be  diminished  or  affected by reason of the fact that this Option has
been granted to the Holder.  Nothing herein contained will impose any obligation
upon the Holder to exercise this Option.

Section 9. RESERVATION OF SHARES.  At all times while any portion of this Option
is outstanding,  the Company will reserve and keep  available,  out of shares of
its authorized and unissued stock or reacquired  shares, a sufficient  number of
shares of its Common Stock to satisfy the  requirements  of this Option;  comply
with the terms of this Option  promptly upon exercise of the Option rights;  and
pay all fees or expenses  necessarily incurred by the Company in connection with
the issuance and delivery of shares pursuant to the exercise of this Option.

Section 10.  TRANSFER  AND  TERMINATION.  Holder may not sell,  pledge,  assign,
hypothecate,  transfer, or otherwise dispose of all or any portion of the Option
other than by will or the laws of descent and distribution.

Section 11. TAX WITHHOLDING. To the extent that the exercise of the Option gives
rise to an  obligation  on the part of the Company to  withhold  income tax from
amounts  otherwise to be paid to Holder,  the Company  shall do so on such terms
and in accordance with such procedures as may be required under applicable law.

Section 12. MISCELLANEOUS.

     (a) NOTICES.  All notices  permitted or required by this Agreement shall be
in writing and shall be deemed to be delivered and received (i) when  personally
delivered,  or (ii) on the day on which sent by facsimile,  electronic  mail, or
other similar device generating a receipt evidencing a successful  transmission,
or (iii) on the third (3rd) business day after the day on which deposited in the
United States mail,  first-class-certified mail, postage prepaid, transmitted or
addressed  to the person  for whom  intended,  at the  facsimile  number,  email
address,  or mailing  address  appearing at the end of this  Agreement,  or such
other facsimile number,  email address,  or mailing address,  notice of which is
given in the manner contemplated by this Section 12(a).

                                       4
<PAGE>

     (b) NO EMPLOYMENT  RIGHTS.  Neither the granting of the Option evidenced by
this  Agreement,  nor any  other  action  taken  by the  Company  in  connection
therewith,  are  intended or shall be construed as giving to Holder any right to
be engaged  to provide  services  for the  Company  for any period of time or to
restrict in any manner the right and power of the Company to  terminate  Holders
relationship with Company.

     (c)  GOVERNING  LAW.  This Option  shall be governed  by and  construed  in
accordance with the internal laws of the State of California,  without regard to
conflict of law principles.

     (d) GOVERNMENT REGULATIONS.  The Option is subject to all laws, regulations
and orders of any  governmental  authority which may be applicable  thereto and,
notwithstanding any of the provisions hereof, the Holder agrees that he will not
exercise  the Option  granted  hereby nor will the Company be obligated to issue
any shares of stock  hereunder if the  exercise  thereof or the issuance of such
shares,  as the case may be,  would  constitute a violation by the Holder or the
Company  of any such law,  regulation  or order or any  provision  thereof.  The
Company will not be obligated to take any  affirmative  action in order to cause
the exercise of this Option or the issuance of shares  pursuant hereto to comply
with any such law, regulation, order or provision.

     (e)  OPTION  SUBJECT TO PLAN.  This  Option is and will be subject in every
respect to the  provisions of the Company's  Plan, as amended from time to time,
which is incorporated herein by reference and made a part hereof.  Holder hereby
accepts  this  Option  subject to all the terms and  provisions  of the Plan and
agrees that (i) in the event of any conflict  between the terms hereof and those
of the  Plan,  the  latter  will  prevail,  and (ii)  all  decisions  under  and
interpretations  of the  Plan  by the  Company's  Board  of  Directors  (or  its
designee) will be final,  binding and conclusive  upon the Holder and his or her
heirs and legal representatives.

                   [Signatures appear on the following page.]

                                       5
<PAGE>

         IN WITNESS  WHEREOF,  the parties have executed this Option,  or caused
this Agreement to be executed as of the Effective Date.

       "COMPANY":                                     "HOLDER:"

MACHINETALKER, INC.,
 a Delaware corporation

By_____________________________                 ______________________________
    Roland F. Bryan, President                  Holder's Signature

Address and Facsimile No. for Notices:          ______________________________
                                                Holder's Printed Name

MachineTalker, Inc.
513 De La Vina Street
Santa Barbara, California 93101                 Address and Facsimile No.
                                                 for Notices:

                                                -------------------------------
                                                -------------------------------
                                                -------------------------------
Facsimile No.:  (805) 657-1740
                                                Facsimile No.:(  )_____________

                                                No. of Option Shares:__________

                                                Vesting Commencement Date:_____

                                                Effective Date:_________________

                                                Exercise Price Per Share:_______

                                       6

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