SHOPNOW COM INC, S-8, 1999-11-01

SHOPNOW COM INC
S-8, 1999-11-01
COMPUTER PROCESSING & DATA PREPARATION

Previous: NUVEEN TAX FREE UNIT TRUST SERIES 1128, S-6, 1999-11-01

Next: BAMBOO COM INC, 8-K, 1999-11-01

<PAGE>

As filed with the Securities and Exchange Commission on November 1, 1999
Registration No. 333-______

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-8
REGISTRATION STATEMENT

UNDER
THE SECURITIES ACT OF 1933

SHOPNOW.COM INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

WASHINGTON 7374 91-1628103
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD (I.R.S. EMPLOYER
OF INCORPORATION OR INDUSTRIAL CLASSIFICATION IDENTIFICATION NUMBER)
ORGANIZATION) CODE NUMBER)

411 FIRST AVENUE SOUTH
SUITE 200 NORTH
SEATTLE, WA 98104
(206) 223-1996
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
AMENDED AND RESTATED 1996 COMBINED INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN,
AMENDED AND RESTATED 1999 EMPLOYEE STOCK PURCHASE PLAN, AND
OPTIONS TO PURCHASE AN AGGREGATE OF 1,755,138 SHARES
OF COMMON STOCK GRANTED PURSUANT TO
INDIVIDUAL LETTER AGREEMENTS
(FULL TITLE OF THE PLANS)

DWAYNE M. WALKER
CHIEF EXECUTIVE OFFICER
SHOPNOW.COM INC.
411 FIRST AVENUE SOUTH
SUITE 200 NORTH
SEATTLE, WA 98104
(206) 223-1996
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

COPIES TO:
JOHN A. FORE, ESQ.
PATRICK J. SCHULTHEIS, ESQ.
PAUL W. HARTZEL, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
5300 CARILLON POINT
KIRKLAND, WA 98033-7356
(425) 576-5800

CALCULATION OF REGISTRATION FEE

<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------- ----------------------- ---------------------- ---------------------- -----------------
PROPOSED
MAXIMUM PROPOSED
AMOUNT OFFERING MAXIMUM
TITLE OF EACH CLASS OF SECURITIES TO TO BE PRICE AGGREGATE AMOUNT OF
BE REGISTERED REGISTERED (1) PER SHARE OFFERING PRICE REGISTRATION FEE
- ------------------------------------------- ----------------------- ---------------------- ---------------------- -----------------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value, issuable 6,946,715 shares $ 5.63 $ 39,110,005.45 $ 10,872.59
upon exercise of outstanding options
granted under the Amended and Restated
1996 Combined Incentive and Nonqualified
Stock Option Plan (2)
- ------------------------------------------- ----------------------- ---------------------- ---------------------- -----------------
Common Stock, $0.001 par value, issuable 648,472 shares $ 13.25 $ 8,592,254.00 $ 2,388.65
upon exercise of options available for
future grant under the Amended and
Restated 1996 Combined Incentive and
Nonqualified Stock Option Plan (3)
- ------------------------------------------- ----------------------- ---------------------- ---------------------- -----------------
Common Stock, $0.001 par value, issuable 2,000,000 shares $ 11.27 $ 22,540,000.00 $ 6,266.12
upon exercise of options available for
grant under the Amended and Restated
1999 Employee Stock Purchase Plan (4)
- ------------------------------------------- ----------------------- ---------------------- ---------------------- -----------------
Common Stock, $0.001 par value, issuable 308,490 shares $ 0.50 $ 154,245.00 $ 42.88
upon exercise of outstanding options
granted under individual option grants
in the form of Exhibit 99.3(5)
- ------------------------------------------- ----------------------- ---------------------- ---------------------- -----------------
Common Stock, $0.001 par value, issuable 350,000 shares $ 2.43 $ 850,500.00 $ 236.44
upon exercise of outstanding options
granted under individual option grants
in the form of Exhibit 99.4(6)
- ------------------------------------------- ----------------------- ---------------------- ---------------------- -----------------
Common Stock, $0.001 par value, issuable 51,366 shares $ 2.00 $ 102,732.00 $ 28.56
upon exercise of outstanding options
granted under individual option grants
in the form of Exhibit 99.5(7)
- ------------------------------------------- ----------------------- ---------------------- ---------------------- -----------------
Common Stock, $0.001 par value, issuable 40,000 shares $ 0.50 $ 20,000.00 $ 5.56
upon exercise of outstanding options
granted under individual option grants
in the form of Exhibit 99.6(8)
- ------------------------------------------- ----------------------- ---------------------- ---------------------- -----------------
Common Stock, $0.001 par value, issuable 295,282 shares $ 0.77 $ 227,367.14 $ 63.21
upon exercise of outstanding options
granted under individual option grants
in the form of Exhibit 99.7(9)
- ------------------------------------------- ----------------------- ---------------------- ---------------------- -----------------
Common Stock, $0.001 par value, issuable 710,000 shares $ 1.89 $ 1,341,900.00 $ 373.05
upon exercise of outstanding options
granted under individual option grants
in the form of Exhibit 99.8(10)
- ------------------------------------------- ----------------------- ---------------------- ---------------------- -----------------

TOTAL REGISTRATION FEES $ 20,277.06
- ------------------------------------------- ----------------------- ---------------------- ---------------------- -----------------
</TABLE>

(1) Together with an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant to
such employee benefit plans as the result of any future stock split, stock
dividend or similar adjustment of the Registrant's outstanding Common
Stock.

(2) The computation is based upon the weighted average exercise price per share
of $5.63 as to outstanding but unexercised options to purchase an aggregate
of 6,946,715 shares of Common Stock granted under the Amended and Restated
1996 Combined Incentive and Nonqualified Stock Option Plan.

(3) The Proposed Maximum Offering Price Per Share has been estimated in
accordance with Rule 457(h) under the Securities Act of 1933 as to the
remaining 648,472 shares of Common Stock authorized for issuance upon
exercise of options available for future grant under the Amended and
Restated 1996 Combined Incentive and Nonqualified Stock Option Plan, solely
for the purpose of calculating the registration fee. No options have been
granted with respect to such shares. The computation is based upon the
average of the high and low price of the Common Stock as reported on the
Nasdaq National Market on October 28, 1999 because the price at which the
options to be granted in the future may be exercised is not currently
determinable.

(4) The Proposed Maximum Offering Price Per Share has been estimated in
accordance with Rule 457(h) under the Securities Act of 1933 solely for the
purpose of calculating the registration fee. The computation is based upon
85% (see explanation in following sentence) of the average of the

<PAGE>

high and low price of the Common Stock as reported on the Nasdaq
National Market on October 28, 1999 because the price at which the
options to be granted in the future may be exercised is not currently
determinable. Pursuant to the Employee Stock Purchase Plan, which plan
is incorporated by reference herein, the Purchase Price of a share of
Common Stock shall mean an amount equal to 85% of the Fair Market Value
of a share of Common Stock on the Enrollment Date or the Exercise Date,
whichever is lower.

(5) The computation is based upon the weighted average exercise price per share
of $0.50 as to outstanding but unexercised options to purchase an aggregate
of 308,490 shares of Common Stock granted under individual option grants in
the form of Exhibit 99.3.

(6) The computation is based upon the weighted average exercise price per share
of $2.43 as to outstanding but unexercised options to purchase an aggregate
of 350,000 shares of Common Stock granted under individual option grants in
the form of Exhibit 99.4

(7) The computation is based upon the weighted average exercise price per share
of $2.00 as to outstanding but unexercised options to purchase an aggregate
of 51,366 shares of Common Stock granted under individual option grants in
the form of Exhibit 99.5.

(8) The computation is based upon the weighted average exercise price per share
of $0.50 as to outstanding but unexercised options to purchase an aggregate
of 40,000 shares of Common Stock granted under individual option grants in
the form of Exhibit 99.6.

(9) The computation is based upon the weighted average exercise price per share
of $0.77 as to outstanding but unexercised options to purchase an aggregate
of 295,282 shares of Common Stock granted under individual option grants in
the form of Exhibit 99.7.

(10) The computation is based upon the weighted average exercise price per share
of $1.89 as to outstanding but unexercised options to purchase an aggregate
of 710,000 shares of Common Stock granted under individual option grants in
the form of Exhibit 99.8.

<PAGE>

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3. INFORMATION INCORPORATED BY REFERENCE.

The following documents and information previously filed with the
Securities and Exchange Commission (the "Commission") are hereby incorporated by
reference:

(a) The Registrant's prospectus (the "Prospectus") filed with the
Commission on September 29, 1999, pursuant to Rule 424(b) under
the Securities Act of 1933.

(b) The Registrant's prospectus supplement filed with the Commission
on October 15, 1999, pursuant to Rule 424(b) and Rule 424(c)
under the Securities Act of 1933.

(c) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 since the
end of the fiscal year covered by the Prospectus.

(d) The description of the Common Stock contained in the Registrant's
Registration Statement on Form 8-A (file number No. 000-26707)
filed with the Commission on July 14, 1999, under the Securities
Exchange Act of 1934, including any amendment or report
subsequently filed by the Registrant for the purpose of updating
that description.

All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act subsequent to the filing of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference in the Registration Statement and to be part hereof from the date of
filing of such documents.

ITEM 4. DESCRIPTION OF SECURITIES.

Not applicable.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.

Not applicable.

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act of 1933. Section 5 of the
registrant's Amended and Restated Bylaws provides for indemnification of the
registrant's directors, officers, employees and agents to the maximum extent
permitted by Washington law. The directors and officers of the registrant also
may be indemnified against liability they may incur for serving in that capacity
pursuant to a liability insurance policy maintained by the registrant for such
purpose.

Section 23B.08.320 of the Washington Business Corporation Act authorizes a
corporation to limit a director's liability to the corporation or its
shareholders for monetary damages for acts or omissions as a director, except in
certain circumstances involving intentional misconduct, knowing violations of
law or illegal corporate loans or distributions, or any transaction from which
the director personally receives a benefit in money, property or services to
which the director is not legally entitled. Section 10 of the registrant's
Amended and Restated Articles of Incorporation, contains provisions
implementing, to the fullest extent permitted by

<PAGE>

Washington law, such limitations on a director's liability to the registrant
and its shareholders.

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.

Not applicable.

ITEM 8. EXHIBITS.

The Exhibits listed on the accompanying Index to Exhibits are filed as
part hereof, or incorporated by reference into, this Registration Statement.
(See Exhibit Index below).

ITEM 9. UNDERTAKINGS.

(a) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

II-

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Seattle, State of Washington on October 29, 1999.

SHOPNOW.COM INC.

By: /s/ DWAYNE M. WALKER
----------------------------------
Dwayne M. Walker
Chairman, President and
Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Dwayne M. Walker and Alan D. Koslow,
jointly and severally, his attorneys-in-fact, each with the power of
substitution, for him or her in any and all capacities, to sign any and all
amendments to this Registration Statement on Form S-8, and to file the same,
with all exhibits thereto and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto each of said
attorneys-in-fact, or his substitute or substitutes, and each of them, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done to effectuate the foregoing, as fully for all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on October 29, 1999.

SIGNATURE TITLE
--------- -----

/s/ DWAYNE M. WALKER Chairman, Director, President and
------------------------------- Chief Executive Officer
Dwayne M. Walker (Principal Executive Officer)

/s/ ALAN D. KOSLOW
------------------------------- Executive Vice President, Chief
Alan D. Koslow Financial Officer, General Counsel
and Secretary (Principal Financial
and Accounting Officer)

/s/ JACOB I. FRIESEL Director
------------------------------
Jacob I. Friesel

/s/ DAVID M. LONSDALE Director
------------------------------
David M. Lonsdale

/s/ BRET R. MAXWELL Director
------------------------------
Bret R. Maxwell

/s/ MARK C. MCCLURE Director
------------------------------
Mark C. McClure

/s/ JOHN R. SNEDEGAR Director
------------------------------
John R. Snedegar

II-

<PAGE>

/S/ MARK H. TERBEEK Director
------------------------------
Mark H. Terbeek

/S/ EYTAN J. LOMBROSO Director
------------------------------
Eytan J. Lombroso

II-

<PAGE>

SHOPNOW.COM INC
REGISTRATION STATEMENT ON FORM S-8

INDEX TO EXHIBITS

EXHIBIT NUMBER EXHIBIT DOCUMENT

5.1 Opinion of Wilson Sonsini Goodrich & Rosati,
Professional Corporation (Counsel to the Registrant)

5.2 Opinion of Alan D. Koslow, General Counsel of the
Registrant

23.1 Consent of Ernst & Young LLP (Independent Accountants)

23.2 Consent of Arthur Andersen LLP (Independent
Accountants)

23.3 Consent of Wilson Sonsini Goodrich & Rosati,
Professional Corporation (contained in Exhibit 5.1
hereto)

23.4 Consent of Alan D. Koslow, General Counsel of the
Registrant (contained in Exhibit 5.2 hereto)

24.1 Power of Attorney (see page II-3)

99.1 Amended and Restated 1999 Employee Stock Purchase Plan
and forms of agreements thereunder (incorporated by
reference to Exhibit 10.1 to the Company's Registration
Statement on Form S-1 (File No. 333-80981) effective
September 29, 1999 (the "S-1 Registration Statement"))

99.2 Amended and Restated 1996 Combined Incentive and
Nonqualified Stock Option Plan and forms of agreements
thereunder (incorporated by reference to
Exhibit 10.2 to the S-1 Registration Statement)

99.3 Form of Stock Option Agreement

99.4 Form of Stock Option Agreement

99.5 Form of Stock Option Agreement

99.6 Form of Stock Option Agreement

99.7 Form of Stock Option Agreement

99.8 Form of Stock Option Agreement

<PAGE>

[LETTERHEAD OF WILSON SONSINI GOODRICH & ROSATI]

EXHIBIT 5.1

October 29, 1999

ShopNow.com Inc.
411 First Avenue South
Suite 200 North
Seattle, Washington 98101

RE: REGISTRATION STATEMENT ON FORM S-8

Ladies and Gentlemen:

We have examined the Registration Statement on Form S-8 to be filed by
you with the Securities and Exchange Commission on or about November 1, 1999
(the "Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of 648,472 shares of your Common Stock to be
issued pursuant to the Amended and Restated 1996 Combined Incentive and
Nonqualified Stock Option Plan and 2,000,000 shares of Common Stock to be issued
pursuant to the Amended and Restated 1999 Employee Stock Purchase Plan
(collectively, the "Plans" and the "Shares" as appropriate). As legal counsel
for ShopNow.com Inc., we have examined the proceedings taken and are familiar
with the proceedings proposed to be taken by you in connection with the issuance
and sale of the Shares pursuant to the Plans.

It is our opinion that the Shares, when issued and sold in the manner
described in the Plans and pursuant to the agreement that accompanies each grant
under the Plans, will be legally and validly issued, fully-paid and
non-assessable.

We consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of our name wherever appearing in the
Registration Statement and any amendments thereto.

Very truly yours,

WILSON SONSINI GOODRICH & ROSATI
Professional Corporation

/s/ Wilson Sonsini Goodrich & Rosati, P.C.
------------------------------------------

<PAGE>

EXHIBIT 5.2

November 1, 1999

ShopNow.com Inc.
411 First Avenue South
Suite 200 North
Seattle, Washington 98101

RE: REGISTRATION STATEMENT ON FORM S-8

Ladies and Gentlemen:

I have examined the Registration Statement on Form S-8 to be filed by you
with the Securities and Exchange Commission on or about November 1, 1999 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of 6,946,715 shares (the "Plan Shares")
of your Common Stock to be issued pursuant to the Amended and Restated 1996
Combined Incentive and Nonqualified Stock Option Plan (the "Plan") and
1,755,138 shares (the "Letter Shares" and, together with the Plan Shares, the
"Shares") of Common Stock to be issued pursuant to options granted pursuant
to individual letter agreements (the "Letter Agreements"). As legal counsel
for ShopNow.com Inc., I have examined the proceedings taken and am familiar
with the proceedings proposed to be taken by you in connection with the
issuance and sale of the Shares pursuant to the Plan and the Letter
Agreements.

It is my opinion that the Shares, when issued and sold in the manner
described in the Plan and Letter Agreements and pursuant to the agreement
that accompanies each grant of the Plan Shares under the Plan, will be
legally and validly issued, fully-paid and non-assessable.

I consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of my name wherever appearing in
the Registration Statement and any amendments thereto.

Very truly yours,

/s/ Alan D. Koslow
--------------------------------------
Alan D. Koslow
General Counsel of ShopNow.com Inc.

<PAGE>
Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement
(Form S-8) of ShopNow.com, pertaining to the registration of 648,472 shares
of Common Stock to be issued pursuant to the Amended and Restated 1996
Combined Incentive and Nonqualified Stock Option Plan and 2,000,000 shares of
Common Stock to be issued pursuant to the 1999, with respect to the 1998 and
1997 financial statements of GO Software, Inc. incorporated by reference in
the Registration Statement (Form S-1 No. 333-80981) and related prospectus of
ShopNow.com Inc. filed with the Securities and Exchange Commission.

Ernst & Young LLP

Jacksonville, Florida
October 29, 1999

<PAGE>

Exhibit 23.2

ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated August 24, 1999
included in ShopNow.com's Form S-1 [File No. 333-80981] and to all references
to our Firm included in this registration statement.

/s/ Arthur Andersen LLP

Seattle, Washington
October 29, 1999

<PAGE>

EXHIBIT 99.3

Name of Optionee: ______________

OPTION GRANT
OF
TECHWAVE INC.

This is an option grant dated the date set forth on Schedule A hereto
(hereinafter, together with this Agreement, called the "Agreement") by
TechWave Inc., a Washington corporation (the "Company"), to _______________
(the "Optionee").

1. GRANT OF OPTION. The Company hereby grants to the Optionee, as a
matter of separate agreement and not in lieu of salary or of any other
compensation for services, the right and option (the "Option") to purchase
all or any part of an aggregate number of full shares of Common Stock set
forth in Schedule A on the terms and conditions set forth (i) herein and (ii)
on Schedule A. The date of grant of the Option is the date set forth in
Schedule A. Optionee may use the Notice of Exercise of Stock Option in the
form attached when you exercise the option.

2. NON-TRANSFER. The Option shall not be transferable by the Optionee
otherwise than by will or by the laws of descent and distribution, and the
Option is exercisable, during his lifetime, only by him. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of this Option or
any right or privilege conferred hereby, contrary to the provisions hereof,
or upon the sale or levy or any attachment or similar process, the Option
thereupon shall terminate and become null and void. During an Optionee's
lifetime, the Option granted is personal to him and is exercisable solely by
Optionee.

3. EXERCISE OF OPTIONS. This Option shall be exercised in accordance
with the following terms and conditions:

3.1 PROCEDURE. This Option shall be exercised by delivery to the
Company of written notice of the number of shares with respect to which the
option is exercised.

3.2 PAYMENT. Payment of the option price shall be made in full
within 5 business days of the notice of exercise of the option and shall be
in cash or bank-certified or cashier's checks, or personal check if permitted
by the Board of Directors. To the extent permitted by applicable laws and
regulations (including, but not limited to, federal tax and securities laws
and regulations), an option may be exercised by delivery of shares of Common
Stock of the Company held by the Optionee having a fair market value equal to
the exercise price, such fair market value to be determined in good faith by
the Board of Directors. Such payment in stock may occur in the context of a
single exercise of the option or successive and simultaneous exercises,
sometimes referred to as "pyramiding," which provides that, rather than
physically exchanging certificates for a series of exercises, bookkeeping
entries will be made pursuant to which the Optionee is permitted to retain
his

<PAGE>

existing stock certificate and a new stock certificate is issued for the
net shares.

If the Company's Common Stock is registered under the 1934 Act, and if
permitted by the Board of Directors, and to the extent permitted by
applicable laws and regulations, (including, but not limited to, federal tax
and securities laws and regulations) an option also may be exercised by
delivery of a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of
sale or loan proceeds to pay the exercise price.

3.3 FEDERAL WITHHOLDING TAX REQUIREMENTS. Upon exercise of this
option, the Optionee shall, upon notification of the amount due and prior to
or concurrently with the delivery of the certificates representing the
shares, pay to the Company amounts necessary to satisfy applicable federal,
state and local withholding tax requirements or shall otherwise make
arrangements satisfactory to the Company for such requirements. Such
arrangements may include payment of the appropriate withholding tax in shares
of stock of the Company having a fair market value equal to such withholding
tax, either through delivery of shares held by the Optionee or by reduction
in the number of shares to be delivered to the Optionee upon exercise of such
option.

4. RIGHTS AS SHAREHOLDER. Optionee shall not have any rights as a
shareholder with respect to any shares subject to this Option until the date
that a stock certificate for such shares as to which Optionee has exercised
this Option has been issued to Optionee. Company shall issue such
certificate as expeditiously as possible.

5. TERMINATION OF EMPLOYMENT, DISABILITY AND DEATH.

5.1 GENERAL. If the employment of the Optionee by the Company shall
terminate by retirement or for any reason other than death or disability as
hereinafter provided, the option may be exercised by the Optionee at any time
prior to the expiration of three (3) months after the date of such
termination of employment (unless by its terms the Option sooner expires),
but only if, and to the extent the optionee was entitled to exercise the
option as provided herein.

5.2 DISABILITY. If the employment of the Optionee by the Company is
terminated because of the Optionee's disability (as herein defined), the
option may be exercised by the Optionee at any time prior to the expiration
of one (1) year after the date of such termination (unless by its terms the
Option sooner expires), but only if, and to the extent the Optionee was
entitled to exercise the option at the date of such termination. For
purposes of this Section 5, the Optionee will be considered to be disabled if
the Optionee is unable to engage in any substantial gainful activity by
reason of any medically determinable mental or physical impairment which can
be expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than 12 months.

5.3 DEATH. In the event of the death of the Optionee while in the
employ of the Company the option shall be exercisable on or prior to the
expiration of the option, but only if and to the extent the Optionee was
entitled to exercise the option at date of such death and only by the
Optionee's personal representative if then subject to administration as part
of the Optionee's estate, or by the person or persons to whom such Optionee's
rights under the option shall have passed by the Optionee's will or by the
applicable laws of descent and distribution.

<PAGE>

6. REPURCHASE OF STOCK.

6.1 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The number and
class of shares covered by this Option and the exercise price per share
thereof (but not the total price), shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock of the
Company resulting from a split-up or consolidation of shares or any like
capital adjustment, or the payment of any stock dividend, or any other
increase or decrease in the number of shares of Common Stock of the Company
without the receipt of consideration by the Company.

6.2 TERMINATION OF EMPLOYMENT. In the event of termination of
employment of the Optionee on or before ____________ for any reason, the
options hereunder will not vest and be canceled resulting in the Optionee
receiving no options hereunder. In the event of a termination of employment
after _______________, Optionee will be allowed to keep all vested options.
The Company reserves the right to purchase Optionee's options at $1.50 per
option (minus 50-cent option price) if Optionee terminates employment with
the Company for any reason on or prior to March 11, 1999.

6.3 TERMINATION OF REPURCHASE OPTION. This repurchase option shall
terminate upon the earlier of the following to occur: (i) the Company
completes a public offering of its stock pursuant to an effective
registration statement under the Securities Act of 1933 or (ii) the Company
becomes subject to the periodic reporting requirements under Section 12(g),
13 or 15(d) of the Securities & Exchange Act of 1934.

7. SECURITIES REGULATION.

7.1 COMPLIANCE; CONDITION TO EXERCISE. Shares of Common Stock shall
not be issued with respect to this Option unless the exercise of this Option
and the issuance and delivery of such shares pursuant thereto shall comply
with all relevant provisions of law, including, without limitation, any
applicable state securities laws, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall further be subject to the approval
of counsel for the Company with respect to such compliance.

7.2 REPRESENTATIONS BY OPTIONEE. As a condition to the exercise of
this option, the Company may require the Optionee to represent and warrant at
the time of any such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such
shares, if, in the option of counsel for the Company, such representation is
required by any relevant provision of the laws referred to in Section 6(a).
At the option of the Company, a stop transfer order against any shares may be
placed on the official stock books and records of the Company, and two
legends may be stamped on the stock certificate, one of which indicating that
the shares may not be pledged, sold or otherwise transferred unless an
opinion of counsel is provided (concurred in by counsel for the Company)
stating that such transfer is not in violation of any applicable law or
regulation, and the second of which indicating that the shares may not be
pledged, sold, or otherwise transferred except in compliance with, if
applicable, the Company's Shareholders' Agreement.

<PAGE>

The Board of Directors may also require such other action or agreement by the
optionees as may from time to time be necessary to comply with the federal
and state securities laws.

8. OPTION ADJUSTMENTS.

8.1 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The number and
class of shares covered by this Option and the exercise price per share
thereof (but not the total price), shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock of the
Company resulting from a split-up or consolidation of shares or any like
capital adjustment, or the payment of any stock dividend, or any other
increase or decrease in the number of shares of Common Stock of the Company
without the receipt of consideration by the Company.

8.2 EFFECT OF CERTAIN TRANSACTIONS. If during Optionee's employment
with Company a merger, consolidation, acquisition of property or stock,
separation, reorganizations or liquidation of the Company occurs, as a result
of which the shareholders of the Company receive cash, stock or other
property in exchange for their shares of Common Stock, any option granted
hereunder shall terminate, shall vest immediately and Optionee shall have the
right to immediately prior to any such merger, consolidation, acquisition or
property or stock, separation, reorganizations or liquidation to exercise
these options in whole, or in part, whether or not the vesting requirements
set forth in the option agreement have been satisfied. In such event,
Company will offer the Optionee a loan in the full amount of the aggregate
exercise price on such terms and conditions as mutually acceptable to
Optionee and Company. In addition, in the event of an initial public
offering the Company's stock all of the options granted hereunder (to the
extent not already vested) shall vest immediately upon the closing of such
initial pubic offering.

8.3 FRACTIONAL SHARES. In the event of any adjustment in the number
of shares covered by any option, any fractional shares resulting from such
adjustment shall be disregarded and each such option shall cover only the
number of full shares resulting from such adjustment.

9. RESERVATION OF STOCK. The Company covenants that during the term this
Option is exercisable, the Company will reserve from its authorized and
unissued Common Stock the number of shares of Common Stock subject to this
Option (as may be adjusted under the terms of the Option). The Company
further covenants that all shares of Common Stock that may be issued upon the
exercise of this Option and payment of the purchase price as set forth herein
will be validly authorized, fully paid and nonassessable.

10. EMPLOYMENT RIGHTS. Nothing in this Option or right granted pursuant
hereto shall confer upon the Optionee any right to be continued in the
employment of the Company, a parent or any subsidiary of the Company or to
remain a director, or to interfere in any way with the right of the Company,
a parent or any subsidiary, in its sole discretion, to terminate the
Optionee's employment at any time or to remove the Optionee as a director at
any time.

11. REPLACEMENT OF OPTION. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft or destruction of this Option,
and, if requested, upon delivery of an indemnity agreement reasonably
satisfactory to the Company, the Company at its expense shall execute and

<PAGE>

deliver, in lieu of this Option, a new replacement Option.

12. AMENDMENT. Any amendment of this Option may only occur in writing
with the consent of the Company and the Optionee.

13. NOTICES. Any notice or demand which either party may give to the
other hereunder shall be in writing and shall be effective when delivered
personally or sent by registered mail, postage prepaid, addressed, if to
Optionee, as set forth on Schedule A and if to Company, as follows:

TechWave Inc.
720 Olive Way
Suite 920
Seattle, Washington 98101

Either party may, by notice in writing, direct that future notices or
demands be sent to a different address.

14. GOVERNING LAW. This Option shall be governed by the laws of the
state of Washington.

DATED this ___ day of _______, ____

TECHWAVE INC.

By:

Its:

<PAGE>

OPTION GRANT
OF
TECHWAVE INC.
SCHEDULE A
----------

1. Name and Address of Optionee:

2. Date of grant of this Option: _____________

3. This Option is: ( ) an Incentive Stock Option, or

( ) a Nonqualified Stock Option.

4. Number of shares of Common Stock covered by this Option: _______ shares.

5. Purchase price per share: $_________.

6. This Option expires on: __________.

7. This option shall become exercisable in increments with respect to the
following numbers of shares as set forth below:

Date on and after Portion of total
Which Option Option which
is exercisable is exercisable
-------------- --------------

<PAGE>

ACCEPTANCE AND ACKNOWLEDGMENT
-----------------------------

I accept the stock option dated ________ __, ____, granted by TechWave
Inc., and understand its terms and conditions.

Dated:

<PAGE>

EXHIBIT 99.4

Name of Optionee: _______________

OPTION GRANT
OF
TECHWAVE INC.

This is an option grant dated the date set FORTH on Schedule A hereto
(hereinafter, together with this Agreement, called the "Agreement") by
TechWave Inc., a Washington corporation (the "Company"), to _____________
(the "Optionee").

1. GRANT OF OPTION. The Company hereby grants to the Optionee, as a
matter of separate agreement and not in lieu of salary or of any other
compensation for services, the right and option (the "Option") to purchase
all or any part of an aggregate number of full shares of Common Stock set
forth in Schedule A on the terms and conditions set forth (i) herein, (ii) in
the Company's 1996 Combined Incentive and Nonqualified Stock Option Plan (the
"Plan") and (iii) on Schedule A. The date of grant of the Option is the date
set forth in Schedule A. Optionee may use the Notice of Exercise of Stock
Option in the form attached when exercising the option.

2. NON-TRANSFERABLE. The Option shall not be transferable by the
Optionee otherwise than by will or by the laws of descent and distribution,
and the Option is exercisable, during Optionee's lifetime, only by Optionee.
Upon any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of this Option or any right or privilege conferred hereby, contrary
to the provisions hereof, or upon the sale or levy or any attachment or
similar process, the Option thereupon shall terminate and become null and
void. During Optionee's lifetime, the Option granted is personal to Optionee
and is exercisable solely by Optionee.

3. WITHHOLDING. Prior to delivery of any shares purchased upon exercise
of this Option, Company shall determine the amount of any federal or state
income tax, if any, which is required to be withheld under applicable law and
shall collect from Optionee in accordance with the Plan the amount of any
such tax to the extent not previously withheld.

5. SECURITIES REGULATION.

<PAGE>

limitation any applicable state securities laws, the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements of any stock
exchange upon which the shares may then be listed, and shall further be
subject to the approval of counsel for the Company with respect to such,
compliance. Inability of the Company to obtain from any regulatory body
having jurisdiction, the authority deemed by the Company's counsel to be
necessary for the lawful issuance and sale of any shares hereunder, shall
relieve the Company of any liability in respect of the nonissuance or sale of
shares as to which such requisite authority shall not have been obtained.

(b) REPRESENTATIONS BY OPTIONEE. As a condition to the exercise of
the Option, the Company may require the Optionee to represent and warrant at
the time of any such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such
shares, if, in the opinion of counsel for the Company, such representation is
required by any relevant provisions of the laws referred to in Section 5(a).
At the option of the Company, a stop transfer order against any shares may be
placed on the official stock books and records of the Company, and two
legends may be stamped on the stock certificate, one of which indicating that
the shares may not be pledged, sold or otherwise transferred unless an
opinion of counsel is provided (concurred in by counsel for the Company)
stating that such transfer is not in violation of any applicable law or
regulation. The Board of Directors may also require such other action or
agreement by the Optionee as may from time to time be necessary to comply
with the federal and state securities laws. NOTWITHSTANDING ANYTHING
CONTAINED HEREIN TO THE CONTRARY, NEITHER THIS PROVISION NOR ANY OTHER
PROVISION SHALL OBLIGATE THE COMPANY TO UNDERTAKE REGISTRATION OF OPTIONS OR
STOCK HEREUNDER.

6. TERMINATION OF EMPLOYMENT, DISABILITY AND DEATH. The Plan provides
certain restrictions with respect to the exercise of this Option upon
termination of employment, disability and death. Refer to Section 9 of the
Plan for the specific restrictions.

7. NOTICES. Any notice or demand which either party may give to the
other hereunder shall be in writing and shall be effective when delivered
personally or sent by registered mail, postage prepaid, addressed, if to
Optionee, as set forth on Schedule A and if to Company, as follows:

TechWave Inc.
720 Olive Way
Suite 920
Seattle, Washington 98101
Attention: Director of Corporate Operations

Either party may, by notice in writing, direct that future notices or
demands be sent to a different address.

8. THE PLAN. This Agreement hereby incorporates by reference all of the
provisions of the Plan, except Section 10 of the Plan relating to the
Company's right to repurchase shares acquired pursuant to options granted
under the Plan in certain circumstances, which provision is expressly

<PAGE>

excluded from this Agreement, and otherwise shall in all respects be
interpreted and construed in such manner as to effectuate the intent of the
Plan. In the event of a conflict between the terms of this Agreement and the
Plan, the terms of the Plan shall prevail. All matters of interpretation of
the Plan and this Agreement, including the terms and conditions thereof and
hereof and the definitions of the words used therein and herein, shall be in
the sole and final discretion of the Board of Directors of the Company or
authorized committee of the Board of Directors.

9. GOVERNING LAW. This Option shall be governed by the laws of the
state of Washington.

DATED this ____ day of __________, _____.

TECHWAVE INC.

<PAGE>

ACCEPTANCE AND ACKNOWLEDGEMENT

I accept the stock option dated __________ _, ____, granted by TechWave
Inc., and understand its terms and conditions.

Dated:

Signature of Optionee

<PAGE>

OPTION GRANT
OF
TECHWAVE INC.
SCHEDULE A

1. Name and Address of Optionee:

2. Date of grant of this Option: _________ ___, _____

3. This Option is: ( ) an Incentive Stock Option, or

( ) a Nonqualified Stock Option.

4. Number of shares of Common Stock covered by this Option: ______ shares.

5. Purchase price per share: $_____.

6. This Option expires on: _________ ___, ____

7. This Option shall become exercisable in increments with respect to the
following numbers of shares as set forth below:

Date on and after Portion of total
which Option Option which
Is exercisable is exercisable
-------------- --------------

<PAGE>

NOTICE OF EXERCISE OF STOCK OPTION
- ----------------------------------

TO: TECHWAVE INC.

I hereby exercise my stock option granted by TechWave Inc. (the
"Company"), subject to all the terms and provisions thereof and notify the
Company of my desire to purchase _________ shares of Common Stock of the
Company at the exercise price of $ _______ per share which were offered to
me pursuant to said option.

I hereby represent that the __________ shares of Common Stock to be
delivered to me pursuant to this exercise are being acquired by me for my own
account, for investment and not with a view to resale or distribution.

Dated:

<PAGE>

EXHIBIT 99.5

KEY EMPLOYEE Name of Optionee: ____________________

OPTION GRANT

This is an option grant dated the date set forth on Schedule A hereto
hereinafter, together with this Agreement. called the "Agreement") to
____________________________ (the "Optionee").

1. GRANT OF OPTION. The Optionee is hereby granted, as a matter of
separate agreement and not in lieu of salary or of any other compensation for
services, the right and option (the "Option") to purchase all or any part of an
aggregate number of full shares of TechWave Common Stock set forth in Schedule A
on the terms and conditions set forth (i) herein. and (ii) in Schedule A. The
date of grant of the Option is the date set forth in Schedule A. Optionee may
use the Notice of Exercise of Stock Option in the form attached when exercising
the Option.

2. NONTRANSFERABLE. The Option shall not be transferable by Optionee
otherwise than by will or by the laws of descent and distribution, and the
Option is exercisable, during Optionee's lifetime, only by Optionee. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this
Option or any right or privilege conferred hereby, contrary to the provisions
hereof, or upon the sale or levy or any attachment or similar process, the
Option thereupon shall terminate and become null and void. During an Optionee's
lifetime, the Option granted is personal to Optionee and is exercisable solely
by Optionee.

3. EXERCISE OF OPTIONS. The Option shall be exercised in accordance with
the following terms and conditions:

(a) PROCEDURE. The Option shall be exercised by delivery to TechWave,
Inc., a Washington corporation (the "Company") of written notice of the number
of shares with respect to which the Option is exercised.

(b) PAYMENT . Payment of the option price shall be made in full within 5
business days of the notice of exercise of the Option and shall be in cash or
bank-certified or cashier's checks, or personal check if permitted by the Board
of Directors. To the extent permitted by applicable laws and regulations
(including, but not limited to, federal tax and securities laws and
regulations), the Option may be exercised by delivery of shares of Common Stock
of the Company held by Optionee having a fair market value equal to the exercise
price, such fair market value to be determined in good faith by the Board of
Directors. Such payment in stock may occur in the context of a single exercise
of the Option or successive and simultaneous exercises, sometimes referred to as
"pyramiding", which provides that, rather than physically exchanging
certificates for a series of exercises, bookkeeping entries will be made
pursuant to which Optionee is permitted to retain his or

<PAGE>

her existing stock certificate and a new stock certificate is issued for the
net shares.

If the Company's Common Stock is registered under the 1934 Act, and if
permitted by the Board of Directors, and to the extent permitted by
applicable laws and regulations, (including, but not limited to, federal tax
and securities laws and regulations) the Option also may be exercised by
delivery of a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of
sale or loan proceeds to pay the exercise price.

(c) FEDERAL WITHHOLDING TAX REQUIREMENTS. Upon exercise of the Option,
Optionee shall, upon notification of the amount due and prior to or concurrently
with the delivery of the certificates representing the shares, pay to the
Company amounts necessary to satisfy applicable federal, state and local
withholding tax requirements or shall otherwise make arrangements satisfactory
to the Company for such requirements. Such arrangements may include payment of
the appropriate withholding tax in shares of stock of the Company having a fair
market value equal to such withholding tax, either through delivery of shares
held by Optionee or by reduction in the number of shares to be delivered to
Optionee upon exercise of such option.

4. RIGHTS AS SHAREHOLDER. Optionee shall not have any rights as a
shareholder with respect to any shares subject to this Option until the date
that a stock certificate for such shares as to which Optionee has exercised this
Option has been issued to Optionee. Company shall issue such certificate as
expeditiously as reasonably possible.

5. REPRESENTATIONS BY OPTIONEE. As a condition to the exercise of this
Option, the Company may require Optionee to make certain representations and
warranties necessary to comply with federal and state securities laws.

6. TERMINATION OF EMPLOYMENT, DISABILITY AND DEATH.

(a) TERMINATION BY EMPLOYEE. Should Optionee voluntarily resign or
terminate his or her employment with E-Warehouse Inc., a Canadian federal
corporation ("E-Warehouse") at any time on or before June 5, 1999, the Option
and any and all underlying shares subject to purchase under the Option, whether
vested or unvested at the time of resignation or termination, will be
immediately null, void and forfeited. Should Optionee voluntarily resign or
terminate his or her employment with EWarehouse at any time after June 5, 1999
and on or before December 5, 1999, 50 percent of the Option shares and 50
percent of any and all underlying shares subject to purchase under the Option,
whether vested or unvested at the time of resignation or termination, will be
immediately null, void and forfeited. Should Optionee voluntarily resign or
terminate his or her employment with E-Warehouse at any time after December 5,
1999 and on or before June 5, 2000, 25 percent of the Option shares and 25
percent of any and all underlying shares subject to purchase under the Option,
whether vested or unvested at the time of resignation or termination, will be
immediately null, void and forfeited.

(b) TERMINATION BY COMPANY. Should Optionee's employment with
E-Warehouse, a Parent or a Subsidiary be terminated or cease due to reduction in
force by E-Warehouse, a Parent or a Subsidiary for any reason except for cause,
any and all shares under the Option will vest

<PAGE>

immediately upon the date of such termination and the Option may be exercised
by Optionee at any time prior to the expiration of one hundred twenty (120)
days after the date of such termination (unless by its terms the Option
sooner terminates or expires). For the purposes of this section, "cause"
shall mean dismissal for dishonesty, conviction of confession of a crime
punishable by law (except minor violations), intoxication while at work,
fraud or disclosure of confidential information.

(c) DISABILITY. If the employment of Optionee by E-Warehouse, a Parent or
a Subsidiary is terminated because of Optionee's disability (as herein defined),
any and all shares under the Option will vest immediately upon the date of such
termination and the Option may be exercised by Optionee at any time prior to the
expiration of ninety (90) days after the date of such termination (unless by its
terms the Option sooner terminates or expires). For purposes of this Section 7,
an Optionee will be considered to be disabled if Optionee is unable to engage in
any substantial gainful activity by reason of any medically determinable mental
or physical impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less than
12 months.

(d) DEATH. In the event of the death of an Optionee while in the employ
of E-Warehouse, a Parent or a Subsidiary, any and all shares under the Option
will vest immediately upon the date of such event and the Option may be
exercised by Optionee at any time prior to the expiration of ninety (90) days
after the date of such event (unless by its terms the Option sooner terminates
or expires), only by Optionee's personal representative if then subject to
administration as part of Optionee's estate, or by the person or persons to whom
such Optionee's rights under the Option shall have passed by Optionee's will or
by the applicable laws of descent and distribution.

7. NOTICES. Any notice or demand which either party may give to the
other hereunder shall be in writing and shall be effective when delivered
personally or sent by registered mail, postage prepaid, addressed, if to Option,
as set forth on Schedule A and if to Company, as follows:

TechWave Inc.
720 Olive Way
Suite 920
Seattle, Washington 98101
Attention: Dwayne Walker

Either party may, by notice In writing, direct that future notices or
demands be sent to a different address.

8. RIGHT TO REPURCHASE STOCK. In the event Optionee's employment by
E-Warehouse ceases or terminates, for any reason whatsoever, prior to three (3)
years after the grant date of the Option, the Company at such time shall have
the option for a period of sixty (60) days following the date of exercise of the
Option to purchase all or any part of the Common Stock acquired pursuant to the
Option then owned by such terminated Optionee at a cash price equal to $5.00 US
per share. Notwithstanding the foregoing, this right to repurchase terminates
upon the earlier of the Company's common stock being sold publicly or the filing
of a registration statement for the

<PAGE>

Company's common stock with the Securities and Exchange Commission.

9. GOVERNING LAW. This Option shall be governed by the laws of the State of
Washington.

DATED this ___ day of _____________, 19 ___.

TECHWAVE INC.

By:

Its:

<PAGE>

OPTION GRANT
OF
TECHWAVE INC.

SCHEDULE A

1. Name and Address of Optionee:

2. Date of grant of this Option: 6/5/98

3. This Option is: ( ) an Incentive Stock Option, or

(x) a Nonqualified Stock Option.

4. Number of shares of Common Stock covered by this Option: _____ shares.

5. Purchase price per share: $2.00.

6. This Option expires on: 6/5/08.

7. This Option shall become exercisable in increments with respect to the
following numbers of shares as set forth below:

Date on and after Portion of total
which Option Option which
is exercisable is exercisable
-------------- --------------

<PAGE>

ACCEPTANCE AND ACKNOWLEDGEMENT

I accept the stock option dated _______ __, ____, and understand its terms and
conditions. I acknowledge that this stock option supersedes any other verbal or
written agreement regarding stock options.

Dated:

<PAGE>

NOTICE OF EXERCISE OF STOCK OPTION

TO: TECHWAVE INC. (the "Company")

I hereby exercise my stock option subject to all the terms and provisions
thereof and notify the Company of my desire to purchase shares of Common Stock
of the Company at the exercise price of $_____ per share which were offered to
me pursuant to said option.

I hereby represent that the _______ shares of Common Stock to be
delivered to me pursuant to this exercise are being acquired by me for my own
account, for investment and not with a view to resale or distribution.

Dated:

<PAGE>

EXHIBIT 99.6

Name of Optionee: _____________

OPTION GRANT
OF
TECHWAVE INC.

(a/k/a Integra Technology Solution Centers)

This is an option grant dated the date set forth on Schedule A hereto
(hereinafter, together with this Agreement, called the "Agreement") by TechWave
Inc., a Washington corporation (the "Company"), to ____________________________
(the "Optionee").

1. GRANT OF OPTION. The Company hereby grants to the Optionee, as a
matter of separate agreement and not in lieu of salary or of any other
compensation for services, the right and option (the "Option") to purchase all
or any part of an aggregate number of full shares of Common Stock set forth in
Schedule A on the terms and conditions set forth (i) herein, (ii) in the
Company's 1996 Combined Incentive and Nonqualified Stock Option Plan (the
"Plan") and (iii) on Schedule A. The date of grant of the Option is the date
set forth in Schedule A. Optionee may use the Notice of Exercise of Stock
Option in the form attached when you exercise the option.

2. NON-TRANSFERABLE. The Option shall not be transferable by the
Optionee otherwise than by will or by the laws of descent and distribution, and
the Option is exercisable, during his lifetime, only by him. Upon any attempt
to transfer, assign, pledge, hypothecate or otherwise dispose of this Option or
any right or privilege conferred hereby, contrary to the provisions hereof, or
upon the sale or levy or any attachment or similar process, the Option thereupon
shall terminate and become null and void. During an Optionee's lifetime, the
Option granted is personal to him and is exercisable solely by Optionee.

3. WITHHOLDING. Prior to delivery of any shares purchased upon exercise
of this Option, Company shall determine the amount of any federal or state
income tax, if any, which is required to be withheld under applicable law and
shall collect from optionee in accordance with the Plan the amount of any such
tax to the extent not previously withheld.

4. RIGHTS AS SHAREHOLDER. Optionee shall not have any rights as a
shareholder with respect to any shares subject to this Option until the date
that a stock certificate for such shares as to which Optionee has exercised this
option has been issued to Optionee. Company shall issue- such certificate as
expeditiously as possible.

5. LIMITATIONS AS TO DIRECTORSHIP. The grant of this Option, execution
of this Agreement or exercise of any portion of this option shall not
confer upon Optionee any right to, or guaranty of, continued position
as a director of the Company, or in any way limit the

<PAGE>

right of the Company to remove Optionee as a director of the
Company at any time.

6. SECURITIES REGULATION.

(a) COMPLIANCE; CONDITION TO EXERCISE. Shares of Common Stock shall not
be issued with respect to this option unless the exercise of this option and the
issuance and delivery of such shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, any applicable state
securities laws, the Securities Act of 1933, as amended, the Securities Exchange
Act of 1934, as amended, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the shares may then be listed,
and shall further be subject to the approval of counsel for the Company with
respect to such compliance. Inability of the Company to obtain from any
regulatory body having jurisdiction, the authority deemed by the Company's
counsel to be necessary for the lawful issuance and sale of any shares
hereunder, shall relieve the Company of any liability in respect of the
non-issuance or sale of shares as to which such requisite authority shall not
have been obtained.

IMPORTANT: THE OPERATION OF THE FEDERAL OR STATE SECURITIES LAWS MAY
PROHIBIT THE ISSUANCE OF STOCK TO CERTAIN OPTIONEES UPON EXERCISE OF OPTIONS
UNLESS A REGISTRATION STATEMENT IS EFFECTIVE. ACCORDINGLY, THE OPTIONEE
HEREUNDER MAY NOT, UNDER CERTAIN CIRCUMSTANCES, BE ABLE TO EXERCISE THIS OPTION
AND PURCHASE STOCK WHEN HE OR SHE DESIRES TO DO SO OR PRIOR TO ITS EXPIRATION OR
TERMINATION. THE COMPANY INTENDS TO FILE A REGISTRATION STATEMENT RELATING TO
THE SHARES COVERED BY THIS OPTION.

(b) REPRESENTATIONS BY OPTIONEE. As a condition to the exercise of this
option, the Company may require the Optionee to represent and warrant at the
time of any such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such shares,
if, in the option of counsel for the Company, such representation is required by
any relevant provision of the laws referred to in Section 6(a). At the option
of the Company, a stop transfer order against any shares may be placed on the
official stock books and records of the Company, and two legends may be stamped
on the stock certificate, one of which indicating that the shares may not be
pledged, sold or otherwise transferred unless an opinion of counsel is provided
(concurred in by counsel for the Company) stating that such transfer is not in
violation of any applicable law or regulation, and the second of which
indicating that the shares may not be pledged, sold, or otherwise transferred
except in compliance with the Company's Shareholders' Agreement dated September
29, 1993. The Board of Directors may also require such other action or
agreement by the optionees as may from time to time be necessary to comply with
the federal and state securities laws. NOTWITHSTANDING ANYTHING CONTAINED
HEREIN TO THE CONTRARY, NEITHER THIS PROVISION NOR ANY OTHER PROVISION SHALL
OBLIGATE THE COMPANY TO UNDERTAKE REGISTRATION OF OPTIONS OR STOCK HEREUNDER.

7. TERMINATION OF EMPLOYMENT, DISABILITY AND DEATH. The Plan provides
certain restrictions with respect to the exercise of this option upon
termination of employment, disability and

<PAGE>

death. Refer to Section 9 of the Plan for the specific restrictions.

8. NOTICES. Any notice or demand which either party may give to the
other hereunder shall be in writing and shall be effective when delivered
personally or sent by registered mail, postage prepaid, addressed, if to
Optionee, as set forth on Schedule A and if to Company, as follows:

TechWave Inc.
720 Olive Way
Suite 920
Seattle, Washington 98101
Attention: Dwayne Walker

Either party may, by notice in writing, direct that future notices or
demands be sent to a different address.

9. THE PLAN. This Agreement hereby incorporates by reference all of the
provisions of the Plan, and shall in all respects be interpreted and construed
in such manner as to effectuate the intent of the Plan. In the event of a
conflict between the terms of this Agreement and the Plan, the terms of the Plan
shall prevail. All matters of interpretation of the Plan and this Agreement,
including the terms and conditions thereof and hereof and the definitions of the
words used therein and herein, shall be in the sole and final discretion of the
Board of Directors of the Company or authorized committee of the Board of
Directors.

10. RIGHT TO REPURCHASE STOCK. The Plan provides the Company the right to
repurchase the stock acquired upon exercise of this option under certain
conditions. Refer to the Plan by the specific provisions.

11. GOVERNING LAW. This Option shall be governed by the laws. of the
state of Washington.

DATED this ___ day of _____________, 19 ___.

TECHWAVE INC.

By:

Its:

<PAGE>

ACCEPTANCE AND ACKNOWLEDGMENT

I accept the stock option dated ______________, 19 ___ granted by TechWave
Inc., and understand its terms and conditions.

Dated ______________, 19 ____.

<PAGE>

OPTION GRANT
OF
TECHWAVE INC.

SCHEDULE A

1. Name and Address of Optionee:

2. Date of grant of this Option: ______

3. This Option is: ( ) an Incentive Stock Option, or

( ) a Nonqualified Stock Option.

8. Number of shares of Common Stock covered by this Option: ______ shares.

9. Purchase price per share: $____.

10. This Option expires on: ____.

11. Upon approval of the shareholders of TechWave Inc. of the Stock Option
Plan, this Option shall become exercisable in increments with respect to
the following numbers of shares as set forth below:

Date on and after Portion of total
which Option Option which
is exercisable is exercisable
-------------- --------------

<PAGE>

NOTICE OF EXERCISE OF STOCK OPTION

TO: TECHWAVE INC.

I hereby exercise my stock option granted by TechWave Inc. (the
"Company"), subject to all the terms and provisions thereof and notify the
Company of my desire to purchase _________shares of Common Stock of the
Company at the exercise price of $ _______ per share which were offered to me
pursuant to said option.

I hereby represent that the _____________ shares of Common Stock to be
delivered to me pursuant to this exercise are being acquired by me for my own
account, for investment and not with a view to resale or distribution.

Dated ______________, 19 ____.

<PAGE>

EXHIBIT 99.7

Name of Optionee: __________

MANAGEMENT OPTION GRANT
OF
TECHWAVE INC.

This is an option grant dated the date set forth on Schedule A hereto
(hereinafter, together with this Agreement, called the "Agreement") by TechWave
Inc., a Washington corporation (the "Company"), to _____________ (the
"Optionee").

1. GRANT OF OPTION. The Company hereby grants to the Optionee in lieu of
salary or of any other compensation for services, the right and option (the
"Option") to purchase all or any part of an aggregate number of full shares of
Common Stock set forth in Schedule A on the terms and conditions set forth (i)
herein and (ii) on Schedule A. The date of grant of the Option is the date set
forth in Schedule A. Optionee may use the Notice of Exercise of Stock Option in
the form attached when you exercise the option.

2. NON-TRANSFERABLE. The Option shall not be transferable by the
Optionee otherwise than by will or by the laws of descent and distribution, and
the Option 'is exercisable, during his lifetime, only by him. Upon any attempt
to transfer, assign, pledge, hypothecate or otherwise dispose of this Option or
any right or privilege conferred hereby, contrary to the provisions hereof, or
upon the sale or levy or any attachment or similar process, the Option thereupon
shall terminate and become null and void. During an Optionee's lifetime, the
Option granted is personal to him and is exercisable solely by Optionee.

3. EXERCISE OF OPTIONS. This Option shall be exercised in accordance
with the following terms and conditions:

3.1 PROCEDURE. This Option shall be exercised by delivery to the
Company of written notice of the number of shares with respect to which the
option is exercised.

3.3 FEDERAL WITHHOLDING TAX REQUIREMENTS. Upon exercise of this
option, the Optionee

<PAGE>

shall, upon notification of the amount due and prior to or concurrently with
the delivery of the certificates representing the shares, pay to the Company
amounts necessary to satisfy applicable federal, state and local withholding
tax requirements or shall otherwise make arrangements satisfactory to the
Company for such requirements. Such arrangements may include payment of the
appropriate withholding tax in shares of stock of the Company having a fair
market value equal to such withholding tax, either through delivery of shares
held by the Optionee or by reduction in the number of shares to be delivered
to the Optionee upon exercise of such option.

4. RIGHTS AS SHAREHOLDER. Optionee shall not have any rights as a
shareholder with respect to any shares subject to this Option until the date
that a stock certificate for such shares as to which Optionee has exercised this
Option has been issued to Optionee. Company shall issue such certificate as
expeditiously as possible.

5. SECURITIES REGULATION.

(a) COMPLIANCE; CONDITION TO EXERCISE. Shares of Common Stock
shall not be issued with respect to this Option unless the exercise of this
Option and the issuance and delivery of such shares pursuant thereto shall
comply with all relevant provisions of law, including, without limitation, any
applicable state securities laws, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall further be subject to the approval of
counsel for the Company with respect to such compliance.

(b) REPRESENTATIONS BY OPTIONEE. As a condition to the exercise
of this option, the Company may require the Optionee to represent and warrant at
the time of any such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such shares,
if, in the option of counsel for the Company, such representation is required by
any relevant provision of the laws referred to in Section 5(a). At the option
of the Company, a stop transfer order against any shares may be placed on the
official stock books and records of the Company, and two legends may be stamped
on the stock certificate, one of which indicating that the shares may not be
pledged, sold or otherwise transferred unless an opinion of counsel is provided
.(concurred in by counsel for the Company) stating that such transfer is not in
violation of any applicable law or regulation, and the second of which
indicating that the shares may not be pledged, sold, or otherwise transferred
except in compliance with, if applicable, the Company's Shareholders' Agreement.
The Board of Directors may also require such other action or agreement by the
optionees as may from time to time be necessary to comply with the federal and
state securities laws.

6. OPTION ADJUSTMENTS.

6.1 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The number and class
of shares covered by this Option and the exercise price per share thereof (but
not the total price), shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock of the Company resulting
from a split-up or consolidation of shares or any like capital adjustment, or
the payment of any stock dividend, or any other increase or decrease in the
number of shares of Common Stock of the Company without the receipt of
consideration by the Company.

<PAGE>

6.2 EFFECT OF CERTAIN TRANSACTIONS. Upon a merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation of
the Company, as a result of which the shareholders of the Company receive cash,
stock or other property in exchange for their shares of Common Stock, any option
granted hereunder shall terminate, but, provided that the Optionee shall have
the right immediately prior to any such merger, consolidation, acquisition of
property or stock, separation, reorganization or liquidation to exercise this
option in whole or in part.

6.3 FRACTIONAL SHARES. In the event of any adjustment in the number
of shares covered by any option, any fractional shares resulting from such
adjustment shall be disregarded and each such option shall cover only the number
of full shares resulting from such adjustment.

7. REPURCHASE OF STOCK.

7.1 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The number and class
of shares covered by this Option and the exercise price per share thereof (but
not the total price), shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common stock of the Company resulting
from a split-up or consolidation of shares or any like capital adjustment, or
the payment of any stock dividend, or any other increase or decrease in the
number of shares of Common Stock of the Company without the receipt of
consideration by the Company.

7.2 TERMINATION OF EMPLOYMENT. In the event of a termination of
employment of the Optionee, for any reason whatsoever, the Company shall have
the option for a period beginning on the date of such termination and ending
ninety (90) days following the date of such termination to purchase all or any
portion of this TechWave stock option at a per share purchase price equal to the
greater of W the difference between (a) the per share fair market value of such
TechWave stock at the date of such termination as determined by the Board of
Directors of TechWave in its sole discretion and (B) $.77; and (ii) the
applicable cash purchase price set forth below:

<TABLE>
<CAPTION>
YEAR OF PURCHASE PRICE
TERMINATION PER OPTION SHARE
----------- ----------------
<S> <C>
1997 $0.73
1998 $1.23
1999 $2.23
2000 or thereafter $3.23
</TABLE>

7.3 TERMINATION OF REPURCHASE OPTION. This repurchase option shall
terminate upon the earlier of the following to occur: (i) TechWave completes a
public offering of its stock pursuant to an effective registration statement
under the Securities Act of 1933 or (ii) TechWave becomes subject to the
periodic reporting requirements under Section 1 2(g), 13 or 15(d) of the
Securities & Exchange Act of 1934.

8. RESERVATION OF STOCK. The Company covenants that during the term this
Option is exercisable, the Company will reserve from its authorized and unissued
Common Stock the number

<PAGE>

of shares of Common Stock subject to this option (as may be adjusted under
the terms of the Option). The Company further covenants that all shares of
Common Stock that may be issued upon the exercise of this Option and payment
of the purchase price as set forth herein will be validly authorized, fully
paid and nonassessable.

9. REPLACEMENT OF OPTION. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft or destruction of this Option, and, if
requested, upon delivery of an indemnity agreement reasonably satisfactory to
the Company, the Company at its expense shall execute and deliver, in lieu of
this Option, a new replacement Option.

10. AMENDMENT. Any amendment of this Option may only occur in writing
with the consent of the Company and the Optionee.

11. NOTICES. Any notice or demand which either party may give to the
other hereunder shall be in writing and shall be effective when delivered
personally or sent by registered mail, postage prepaid, addressed, if to
Optionee, as set forth on Schedule A and if to Company, as allows:

TechWave Inc.
720 Olive Way
Suite 920
Seattle, Washington 98101

Either party may, by notice in writing, direct that future notices or demands be
sent to a different address.

12. GOVERNING LAW. This Option shall be governed by the laws of the state
of Washington.

DATED this __ day of ________, 19__.

TECHWAVE, INC.

By:

Its

<PAGE>

ACCEPTANCE AND ACKNOWLEDGMENT

I accept the stock option dated __________ __, 19__, granted by TechWave
Inc., and understand its terms and conditions.

Dated:

<PAGE>

OPTION GRANT

TECHWAVE INC.

SCHEDULE A

1. Name and Address of Optionee:

2. Date of grant of this option: ____________ __, 19__

3. This option is: ( ) an Incentive Stock Option, or
( ) a Nonqualified Option.

4. Number of shares of Common Stock
covered by this Option: ______ shares

5. Purchase price per share: $0.77

6. This Option expires five (5) years
after the date of grant on: ________ __, ____

7. Fully vested upon date hereof.

<PAGE>

NOTICE OF EXERCISE OF STOCK OPTION

TO: TECHWAVE INC.

I hereby exercise my stock option granted by TechWave Inc. (the "Company"),
subject to all the terms and provisions thereof and notify the Company of my
desire to purchase _______________ shares of Common Stock of the Company at the
exercise price of $.77 per share which were offered to me pursuant to said
option.

I hereby represent that the _______________ shares of Common Stock to be
delivered to me pursuant to this exercise are being acquired by me for my own
account, for investment and not with a view to resale or distribution.

Dated:

<PAGE>

EXHIBIT 99.8

NAME OF OPTIONEE: ___________________

OPTION GRANT OF
TECHWAVE INC.

2. NON-TRANSFERABLE. The Option shall not be transferable by the
Optionee otherwise than by will or by the laws of descent and distribution,
and the Option is exercisable, during his lifetime, only by him. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this
Option or any right or privilege conferred hereby, contrary to the provisions
hereof, or upon the sale or levy or any attachment or similar process, the
Option thereupon shall terminate and become null and void. During an
Optionee's lifetime, the Option granted is personal to him and is exercisable
solely by Optionee.

3. EXERCISE OF OPTIONS. This Option shall be exercised in accordance
with the following terms and conditions:

3.1 PROCEDURE. This Option shall be exercised by delivery to the
Company of written notice of the number of shares with respect to which the
option is exercised.

3.2 PAYMENT. Payment of the option price shall be made in full
within 5 business days of the notice of exercise of the option and shall be
in cash or bank certified or cashier's checks, or personal check if permitted
by the Board of Directors. To the extent permitted by applicable laws and
regulations (including, but not limited to, federal tax and securities laws
and regulations), an option may be exercised by delivery of shares of Common
Stock of the Company held by the Optionee having a fair market value equal to
the exercise price, such fair market value to be determined in good faith by
the Board of Directors. Such payment in stock may occur in the context of a
single exercise of the option or successive and simultaneous exercises,
sometimes referred to as "pyramiding," which provides that, rather than
physically exchanging certificates for a series of exercises, bookkeeping
entries will be made pursuant to which the Optionee Ls permitted to retain
his existing stock certificate and a new stock certificate is issued for the
net shares.

<PAGE>

In addition, if the fair market value of one share of Common Stock is
greater than the purchase price per share (as set forth on Schedule A and
subject to adjustment I any, prior to the date of calculation as set forth
below), in lieu of exercising this Option for cash or for delivery of shares
of Common Stock, the Optionee may elect to receive shares equal to the value
(as determined below) of this Option (or the portion thereof being cancelled)
and the Company shall then issue the Optionee a number of shares of Common
Stock computed using the following formula:

X = Y (A-B)
-----
A

Where X = the number of shares of Common Stock to be issued to the
Optionee

Y = the number of shares of Common Stock purchasable under the
Option or, if only a portion of the Option is being
exercised, the portion of this Option being cancelled (at
the date of such calculation)

A = the fair market value of one share of the Common Stock (at
the date of such calculation)

B = Exercise (Purchase) Price (as adjusted to the date of such
calculation)

For the purposes of the above calculation, fair market value of one
share of Common Stock shall be determined by the Board of Directors in good
faith; provided, however, that where there exists a public market for the
Common Stock at the time of such exercise, the fair market value per share
shall equal the average of the closing bid and asked prices of the Common
Stock quoted in the over-the-counter Market Summary or the last reported sale
price of Common Stock or the closing price quoted on the Nasdaq National
Market or any exchange on which the Common Stock is listed, whichever is
applicable, for the five days prior to the date of determination of fair
market value.

<PAGE>

5. TERMINATION OF EMPLOYMENT. DISABILITY AND DEATH.

5.1 GENERAL. If the employment of the Optionee by the Company
shall terminate by retirement or for any reason other than death, disability
or cause as hereinafter provided, the option may be exercised by the Optionee
at any time prior to the expiration of the option, but only if, and to the
extent the Optionee was entitled to exercise the option as provided herein.

5.2 DISABILITY. If the employment of the Optionee by the Company
is terminated because of the Optionee's disability (as herein defined), the
option may be exercised by the Optionee at any time prior to the expiration
of the option, but only if, and to the extent the Optionee was entitled to
exercise the option at six months following the date of such termination.
For purposes of this Section 5, the Optionee will be considered to be
disabled if the Optionee is unable to engage in any substantial gainful
activity by reason of any medically determinable mental or physical
impairment which can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less than 12 months.

5.4 TERMINATION BY COMPANY FOR ANY REASON OR BY OPTIONEE FOR GOOD
REASON. If the Optionee's employment with the Company is terminated by the
Company for any reason or by Optionee for "good reason," (as defined in the
Employment Agreement between the Company and the Optionee), this Option shall
be exercisable on or prior to the expiration of the Option, but only if and
to the extent the Optionee is entitled to exercise the Option twelve months
from the date of such termination without cause.

5.5 TERMINATION BY OPTIONEE WITHOUT GOOD REASON. If the Optionee
terminates his employment with the Company without "good reason" (as defined
in the Employment Agreement), this Option shall be exercisable on or prior to
the expiration of the Option but only to the extent the Optionee was entitled
to exercise this Option at the date of such termination.

6. SECURITIES REGULATION.

(a) COMPLIANCE: CONDITION TO EXERCISE. Shares of Common Stock
shall not be issued with respect to this Option unless the exercise of this
Option and the issuance and delivery of such

<PAGE>

shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, any applicable state securities laws, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the shares may then be listed,
and shall further be subject to the approval of counsel for the Company with
respect to such compliance.

(b) REPRESENTATIONS BY OPTIONEE. As a condition to the exercise
of this option, the Company may require the Optionee to represent and warrant
at the time of any such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such
shares, if, in the option of counsel for the Company, such representation is
required by any relevant provision of the laws referred to in Section 6(a).
At the option of the Company, a stop transfer order against any shares may be
placed on the official stock books and records of the Company, and two
legends may be stamped on the stock certificate, one of which indicating that
the shares may not be pledged, sold or otherwise transferred unless an
opinion of counsel is provided (concurred in by counsel for the Company)
stating that such transfer is not in violation of any applicable law or
regulation, and the second of which indicating that the shares may not be
pledged, sold, or otherwise transferred except in compliance with, if
applicable, the Company's Shareholders' Agreement. The Board of Directors may
also require such other action or agreement by the optionees as may from time
to time be necessary to comply with the federal and state securities laws.

7. OPTION ADJUSTMENTS.

7.1 ADJUSTMENTS UPON CHANCES IN CAPITALIZATION. The number and
class of shares covered by this Option and the exercise price per share
thereof (but not the total price), shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock of the
Company resulting from a split-up or consolidation of shares or any like
capital adjustment, or the payment of any stock dividend, or any other
increase or decrease in the number of shares of Common Stock of the Company
without the receipt of consideration by the Company.

7.2 EFFECT OF CERTAIN TRANSACTIONS. Upon a merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation
of the Company, as a result of which the shareholders of the Company receive
cash, stock or other property in exchange for their shares of Common Stock,
any option granted hereunder shall terminate, but, in the event that the
common shareholders of the Company are to receive cash, stock or other
property in exchange for their shares of Common Stock with a value equal to
or in excess of $6.25 per share, then in such event the Optionee shall have
the right immediately prior to any such merger, consolidation, acquisition of
property or stock, separation, reorganization or liquidation to exercise this
option in whole or in part whether or not the vesting requirements set forth
in the option agreement have been satisfied. Immediately preceding such an
event, the Company shall make a loan (the "Loan" to the Optionee in an amount
equal to the aggregate purchase price of the then unexercised portion of this
Option. The Loan shag be repayable by the Optionee with equal monthly
payments over a period of 18 months with interest at the then current prime
interest rate.

7.3 FRACTIONAL SHARES. In the event of any adjustment in the
number of shares covered by

<PAGE>

any option, any fractional shares resulting from such adjustment shall be
disregarded and each such option shall cover only the number of full shares
resulting from such adjustment.

8. RESERVATION OF STOCK. The Company covenants that during the term
this Option is exercisable, the Company will reserve from its authorized and
unissued Common Stock 310,000 shares of Common Stock (as may be adjusted
under the terms of the Option). The Company further covenants that all
shares of Common Stock that may be issued upon the exercise of this Option
and payment of the purchase price as set forth herein will be validly
authorized, fully paid and nonassessable.

9. REPLACEMENT OF OPTION. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft or destruction of this Option,
and, if requested, upon delivery of an indemnity agreement reasonably
satisfactory to the Company, the Company at its expense shall execute and
deliver, in lieu of this Option, a new replacement Option.

10. AMENDMENT. Any amendment of this Option may only occur in writing
with the consent of the Company and the Optionee.

TechWave Inc.
720 Olive Way
Suite 920
Seattle, Washington 98101

Either party may, by notice in writing, direct that future notices or demands be
sent to a different address.

12. GOVERNING LAW. This Option shall be governed by the laws of the state
Of Washington.

DATED this __ day of _______, 19__.

TECHWAVE INC.

By
Its

<PAGE>

OPTION GRANT

TECHWAVE INC.

SCHEDULE A

1. Name and Address of Optionee:

2. Date of grant of this Option: __________ __, 19__

3. This Option is: ( ) an Incentive Stock Option, or

( ) a Nonqualified Stock Option.

4. Number of shares of Common Stock covered by this Option: ________ shares.

5. Purchase price per share: $_____

6. This Option expires on: ______.

7. This Option shall become exercisable in increments with respect to the
following numbers of shares as set forth below and subject to the following
conditions:
Date on and after Portion of total
which Option Option which
is exercisable is exercisable

These shares will only become exercisable upon satisfaction of one of the
following two conditions:

1. If the Company is acquired or merges with another company and the common
shareholders receive consideration (cash, stock or other property) with a
value equal to or in excess of $_____ per share; or

2. If the Company completes an initial public offering of its stock ("IPO")
and there are 30 consecutive trading days at any time after the IPO is
completed that the closing price of TechWave Common Stock is equal to or
greater than $______ per share.

<PAGE>

ACCEPTANCE AND ACKNOWLEDGMENT

I accept the stock option dated _________ __, 19__, granted by TechWave
Inc., and understand its terms and conditions.

Dated: