FAR WEST GOLD, INC.
#10 Exchange Place, Room 304
Salt Lake City, Utah 84111

MINUTES
ORGANIZATIONAL MEETING AND AUTHORIZATION FOR PUBLIC STOCK OFFERING
August 26, 1983

The undersigned founders, incorporators and directors of Far West Gold, Inc. met this date pursuant to unanimous agreement and consent, and with proper notice of meeting acknowledged, to organize the corporation in conformity with pre-incorporation understanding. Mr. Arthur Blake Thomas presented Articles of Incorporation filed with the Utah Secretary of State date stamped as received July 13, 1983, and opened the meeting as Temporary Chairman asking Rudolph M. Miller to act as Secretary. Each director as named in the Articles expressed acceptance of the position, agreeing to lawfully and properly act in such capacity during his tenure, with his signature hereto attesting to same. Each director agreed to give affidavit for the corporate files and purposes as to his history background and any data relating to criminal or securities law violations having any materiality. Each director stated he was under no charge, injunction, or investigation as to securities laws and had never been convicted of a felony.

Chairman Thomas opened the meeting to nomination and election of corporate officers, nominating himself as President and Treasurer; Clinton D. Schurtleff, Vice President; and Rudolph M. Miller as Secretary. No other nominations were made and said slate received unanimous vote. Each accepted office and duties thereof. Mr. Thomas was unanimously chosen as regular Chairman of the Board of Directors without dissent. Pursuant to pre-incorporation intent, Arthur Blake Thomas reaffirmed his subscription to original investment stock as stated below, offering payment therefor. The respective subscription and payment was accepted as follows:

Arthur Blake Thomas      2,800,000 sh. @ $0.002631     $7,500.00
Alma Sachs               1,425,000 sh. @ $0.002631     $3,750.00
J.L. Sachs               1,425,000 sh. @ $0.002631     $3,750.00

The President and Treasurer were authorized and instructed to deposit said $15,000 in corporate account with First Security Bank of Utah, 405 South Main, Salt Lake City, Utah 84111, with any withdrawals valid under signature of the President-Treasurer (Arthur Blake Thomas), and was further instructed to enter said stockholdings upon the books of the corporation and further to select in his judgment appropriate stock certificates and cause' the proper execution of same for each stockholder. The undersigned (Mr. Thomas) acknowledged he will pay for his stock the amount of $0.002631 per share and will deposit his check for $7,500.00 an dthe check of J.L. Sachs for $3,750.00 in the above designated bank.

The President and Secretary were unanimously instructed to purchase necessary seal, minute books and stock records and minor supplies, and to enter these minutes, Certificate of Incorporation, articles, etc. in the official records. The Treasurer shall give receipts for appropriate monies to the purchaser and maintain records thereof. The Company's register and transfer agent shall be the American Registrar & Transfer Co., $10 Exchange Place, Salt Lake City, Utah 84111.

In line with pre-incorporation understanding, it was further

RESOLVED: That Arthur Blake Thomas, President, be and is hereby authorized and directed to have prepared and to file the necessary application documents, exhibits, prospectuses and offering circulars with the Utah Securities Commission, at the earliest possible date, in order to secure registration of 15,000,000 shares of the common stock of Far West Gold, Inc. to be offered to bona fide residents of the State of Utah only at a public offering price of $0.001 per share. Directors agree to sign any necessary and standard documents, and do herewith accept the Terms and Conditions of Registration as outlined by form document of the Securities Commission. President and Secretary are authorized to sign any other necessary and standard application forms without additional Board authorization. The President shall proceed with counsel and necessary assistance in working out, at his discretion, details and content of offering circular and other matters relating to registration and public offering.

Further, RESOLVED: That Attorney Ronald L. Poulton, #9 Exchange Place, Salt Lake City, Utah be employed and retained by the President to assist with an prepare registration application and exhibits, represent the company before the Securities Commission, and to render legal opinion as required as to the validity of proposed stock issue when registered, etc. The President is authorized to sign for the Company, attorney/client retainer agreement at a fee considered by him as reasonable.

Further, RESOLVED: That a Certified Public Accountant be retained by the Company to prepar necessary financial statements as part of registration application, and to be printed in Offering Circular. The President may negotiate a total reasonable fee for his services and should proceed immediately. Consent to use of his Statements shall be obtained.

Further, RESOLVED: That Jeffrey L. Sachs of 264 South 9800 East, Salt Lake City, Utah 80470 be and is appointed Sales Agent for any issue registered and approved and subject to all terms and conditions therein contained. It is understood that he is properly registered except specific card and license may be required for this particular issue and company. No special bond shall be required. Sales agent shall sign Fund Escrow Agreements along with any depository bank and the Company, relating to his handling and turnover of funds. He shall pay his own normal day-to-day expenses in effecting contracts and sales.

Further, RESOLVED: That the principal office of the Company shall be #10 Exchange Place, Room 304, Salt Lake City, Utah 84111.

Directors and officers agree to supply all necessary data, documents, and financial statement, etc. to Attorney Poulton for preparation of registration -- working with President Thomas who shall officially be listed as Correspondent in said registration.

It is understood company operations, which were discussed and may be varied, will not be assured or definitely ascertained until registration is approved and minimum sales of stock is effected. The officers are instructed, as near as possible, to hold other offering costs, besides sales commission, to $4,500.00, and believe the minimum objectives of the Company can be pursued with a bank fund escrow being cleared to the company of a total of $50,000.00. During the escrow period of initial sales funds, no salaries or other remuneration shall be paid to officers. Total salaries that may be paid later, must in no case exceed 10% of the offering for the first year. It is understood that the company presently owns no properties, leases or options.

BOARD OF DIRECTORS

                                                  /s/ Arthur Blake Thomas
                                                  -----------------------
                                                  Arthur Blake Thomas

                                                  /s/ Rudolph M. Miller
                                                  ---------------------
ATTEST:                                           Rudolph M. Miller

/s/ Rudolph M. Miller                             /s/ Clinton D. Shurtleff
---------------------                             ------------------------
Secretary - FAR WEST GOLD, INC.                   Clinton D. Shurtleff

Joint Board of Directors Meeting Far West Gold, Inc. Golden Age Minerals, Inc. At 10 Exchange Place, Room 304 Salt Lake City, Utah 84111 December 31, 1983

Joint Board meeting with all directors and officers of each corporation present. Meeting presided over by Arthur Blake Thomas, President and Director of each corporation. Others in attendance were Director and Secretary, Rudolph Miller, and Clinton Shurtleff, Director and Vice President, holding these said positions in both corporations.

Mr. Thomas called attention to the fact that the Far West Gold, Inc., as of October 21, 1983, issued an effective prospectus and commenced with the sale of 15,000,000 shares of its corporate stock at 1 cent per share. He stated that there was apparently a demand for the securities and it appeared that the issue could probably be sold over a time period. President Thomas called attention to the fact that the books of the Company, as of December 31, 1983, showed Far West Gold, Inc. loans to Golden Age Minerals, Inc. totaling $10,500. He stated that such matters were first cleared informally with the company directors pending the calling of a directors meeting at the end of periodic accounting periods.

Thomas further mentioned that at the effective date of the Far West Prospectus, October 21, 1983, the purposes for Company activity included the search for and the acquisition of mineral property and subsequent development thereof. He stated that time had been consumed on a search for Far West Gold, Inc. property with negative results and speculative hazards seemed high. Thomas stated that he had discussed this matter with Directors, outside engineers, geologists, brokers and mine operators. People from whom opinions were requested were asked to read a mining report by Geologist W. B. Winter. General opinion was to the effect of why search for added property while a situation of merit was held by a companion concern? Golden Age Minerals, Inc. needing support to maintain its valuable leasehold possession at Willow Creek, Nevada. The copy of the winter report attached hereto indicates the presence of 400,000 yards of gold bearing placer gravel with a gross value of $20 per yard or $8,000,000, contained where

JOINT BOARD OF DIRECTORS MEETING
December 31, 1983

work has been performed, with much larger areas still open for investi gation. Such situations are called "open ended" and total value might exceed the worth of exposed ground by large margins. Thomas called attention to page 7 paragraph 17 of the Far West Prospectus and asked consideration thereof by Directors prior to voting on the following reso ltuion, stating that in his own opinion conflict of interest could not be involved between companies where best business judgment indicated equal value as probable to both entities plus the solution of mutual problems.

BE IT RESOLVED: That the Far West Gold, Inc. is authorized by these presents to loan funds to Golden Age Minerals for the purpose of expenditure upon its Pershing County mining lease known as the Willow Creek Placer in such manner as considered judicious by both Far West Gold, Inc. and Golden Age Minerals, Inc., copy of said lease is attached hereto. Any loans made and accepted as hereby authorized are to be returned to Far West Gold through payment of one-half of the gross revenue received by Golden Age Minerals, Inc. from its sale of mineral products from its project, Willow Creek. It is the intent that payment as above set forth continue beyond any liquidation period and continue in pertetuity.

Upon being sent to a vote, all Directors voted in the affirmative.

President Thomas stated that a sum of money estimated in several or more hundred thousand dollars had been expended by Golden Age and Far West in relation to "Willow Creek." On the credit side, a minimum 400,000 yards of $20 per yard of gold value ($8,000,000) is indicated

JOINT BOARD OF DIRECTORS MEETING
December 31, 1983

as present for exploitation, an added expenditure is needed to guarantee early production and is currently being solicited from well-established mining concerns who currently exhibit great interest.

GOLDEN AGE MINERALS, INC.                    FAR WEST GOLD, INC.

/s/ Arthur Blake Thomas                      /s/ Arthur Blake Thomas
-----------------------                      -----------------------

/s/ Clinton Shurtleff                        /s/ Clinton Shurtleff
---------------------                        ---------------------

/s Rudolph M. Miller                         /s/ Rudolph M. Miller
--------------------                         ---------------------

ACTION BY BOARD OF FAR WEST GOLD, INC.

WITHOUT A MEETING

The following are resolutions duly adopted by the Board of Directors of Far West Gold, Inc. (the "Corporation"), a Utah corporation, pursuant to Utah Revised Business Corporation Act which allows the adoption of resolutions by the unanimous consent of directors without a meeting.

The following resolutions are adopted effective this 29th day of August, 1995.

Whereas, Ronald L. Poulton, has represented the Corporation in numerous transactions, tax matters and business and has been paid no compensation for any of the above services during the past several years, be it,

RESOLVED, the Corporation shall issue 20,000,000 shares of Far West Gold, Inc. to Ronald L. Poulton, which stock shall be issued to him fully paid and non-assessable in consideration for his release of the Corporation from all liability to him in connection with the above mentioned services.

RESOLVED FURTHER, that Matthew D. Taylor, Secretary of the Corporation, instruct the transfer agent for the Corporation to issue the certificate for shares as set forth above.

Adopted effective this 29th day of August, 1995.

/s/ Rudolph M. Miller
---------------------
Rudolph M. Miller, Director

/s/ Clinton Shurtleff
---------------------
Clinton Shurtleff, Director

/s/ Matthew D. Taylor
---------------------
Matthew D. Taylor, Director

MINUTES OF DIRECTORS MEETING
OF
FAR WEST GOLD, INC.

A meeting of the Board of Directors of Far West Gold, Inc. was held on the 15th day of April, 1996 at 10:00 a.m. at the offices located at 400 Burrard Street, Suite 1400, Vancouver, B.C. V6C-3G2.

There were present and participating at the meeting, either in person or telephonically, Mr. Harmel S. Rayat, Mr. Kundan S. Rayat and Ms. Jasbinder Chohan being all of the Directors of the Company. Harmel S. Rayat, the President, chaired the meeting. Jasbinder Chohan, the Secretary, read the minutes of the last regular meeting and they were approved.

The first item of discussion brought before the Board of Directors was a discussion concerning a reverse split of the company's common stock by a ratio of one (1) new share for every five hundred (500) old shares with the par value to remain at $.001. The reverse split is to take effect on this 15th day of April, 1996. After motion duly made, seconded and unanimously carried with all in favor; it was,

Resolved, that the Company reverse split its common stock by a ratio of one (1) new share for five hundred (500 old shares with the par value remaining $.001.

Further Resolved, that the effective date of the reverse split to be April 15, 1996.

The second item to be discussed was concerning the possibility of acquiring exploration and development stage resource properties in North America and abroad. After a thorough discussion it was agreed to put the vote on hold until the next Board of Directors meeting which was scheduled to be on Tuesday, April 16th, 1996.

There being no further business and upon motion duly made and seconded, the meeting was adjourned.

/s/ Harmel S. Rayat                                /s/ Kundan S. Rayat
-------------------                                -------------------
Mr. Harmel S. Rayat, President, Director           Mr. Kundan S. Rayat, Director



/s/ Jasbinder Chohan
--------------------
Ms. Jasbinder Chohan, Secretary, Director

MINUTES OF DIRECTORS MEETING
OF
FAR WEST GOLD, INC.

A meeting of the Board of Directors of Far West Gold, Inc. was held on the 16th day of April, 1996 at 10:00 a.m. at the offices located at Suite 1400, 400 Burrard Street, Vancouver, B.C., V6C 3G2.

There were present and participating at the meeting, either in person or telephonically, Mr. Harmel S. Rayat, Mr. Kundan S. Rayat and Ms. jasbinder Chohan, being all of the Directors of the Company. Mr. Harmel S. Rayat, the President, chaired the meeting and Ms. Chohan, the Secretary, read the minutes of the last regular meeting and they were approved.

The first item of discussion brought before the board was a discussion concerning the acquisition of The Tom Property Mining Claims in the Kamloops Mining Division of British Columbia, Canada. After a long and thorough discussion, it was agreed that the Company acquire the claims and issue 4,000,000 of its unissued common shares of stock in exchange for services rendered in the negotiation and subsequent acquisition of these claims. Upon motion duly made, seconded and unanimously carried with all in favor, it was;

Resolved, that the Company the Company acquire The Tom Property Mining Claims and issue 4,000,000 of its unissued common shares of stock in exchange for services rendered in the negotiation and subsequent acquisition of these claims.

Further Resolved, that the 4,000,000 shares be issued in the name of Mr. Harmel S. Rayat.

There being no further business and upon motion duly made and seconded, the meeting was adjourned.

/s/ Harmel S. Rayat                                /s/ Kundan S. Rayat
-------------------                                -------------------
Mr. Harmel S. Rayat, President, Director           Mr. Kundan S. Rayat, Director



/s/ Jasbinder Chohan
--------------------
Ms. Jasbinder Chohan, Secretary/Treasurer, Director

MINUTES OF DIRECTORS MEETING
OF
FAR WEST GOLD, INC.

A meeting of the Board of Directors of Far West Gold, Inc. was held on the 23rd day of April, 1996 at 10:00 A.M. at the offices of the Company located at 400 Burrard Street, 14th Floor, Vancouver, B.C. V6C-3G2.

There were present and participating at the meeting Harmel Rayat, Kundan S. Rayat both being directors of the Company. Ms. Jasbinder Chohan was present telephonically as Secretary at the request of the Directors. Harmel Rayat acted as Chairman. The minutes of the last meeting were read and approved.

The first item of business brought before the Board was concerning the necessity to raise additional capital for acquiring exploration and development stage resource properties in North America and abroad. Upon motion duly made, seconded and unanimously carried, it was;

Resolved, The Company execute a 504 Registration authorizing 4,000,000 shares at $0.05 per share.

The second item of business brought before the Board was a discussion concerning the necessity of retaining legal S.E.C. counsel for the Company. It was suggested and agreed that Gary Blume be retained as the Companys S.E.C. counsel. Upon motion duly made, seconded, and unanimously carried, it was:

Resolved, that Gary R. Blume, is appointed as Company's SEC Counsel.

The third item of business brought before the Board was a discussion that the Company is in need of an independent CPA. After a thorough discussion it was agreed that William Clancy CPA be appointed as the Company's independent public accountant. Upon motion duly made, seconded and unanimously carried, it was:

Resolved, that William Clancy, CPA, is appointed Company's Independent Public Account.

The fourth item of business to be discussed was in regards to change to change the Company's transfer agent from American Registrar and Transfer Co. located in Salt Lake City, Utah to Holladay Stock Transfer Company located in Phoenix , AZ. After further discussions it was agreed to appoint Holladay Stock Transfer Company as the Company's transfer agent. Upon motion duly made, seconded and unanimously carried, it was;

Resolved, that the Company change its transfer agent from American Registrar and Transfer Co. to Holladay Stock Transfer.

The last item of business discussed was concerning the date for a special shareholders meeting with the following agenda; election of Harmel Rayat, Kundan S. Rayat and Ms Jasbinder

Chohan as directors, approval of the Company's name to be changed to Far West Resources,Inc. Amend the Articles of Inc. to reflect the name change, authorize 5,000,000 preferred shares, amend the Articles of Inc. to reflect the increasing of the authorized to create the preferred shares, authorize to create the preferred shares, authorize a stock option plan, ratify all past actions by the directors and any other business that may come before the meeting. It was also agreed that the meeting should take place on the May 9th, 1996 at 400 Burrard Street, Suite 1400, Vancouver, B.C. V6C-3G2. at 2:00 P.M. Upon motion duly made, seconded and unanimously carried, it was:

Resolved, a special shareholders meeting be set for May 9th,1996 at 2:00 P.M. at 400 Burrard Street, Suite 1400, Vancouver, B.C. V6C-3G2.

Further Resolved, the following items are to be on the agenda for shareholders approval:

a. Election of the following directors: Harmel Rayat, Kundan S.Rayat, Ms Jasbinder Chohan.

b. Approve the Company's name to be changed to Far West Resources, Inc.

c. Amend Article I of the Articles of Incorporation to reflect the name change to Far West Resources, Inc.

d. Authorize 5,000,000 preferred shares.

e. Amend Article 4 of the Articles of Incorporation to be amended to increase the authorized create a class of preferred shares.

f. Authorize stock option plan.

g. Ratify all actions by the directors.

h. Ratify the appointment of Gary R.Blume as S.E.C. counsel for the Company.

i Ratify the appointment of William Clancy, CPA as the Company's independent public accountant.

j. Any other business that may come before the meeting.

There being no further business, and upon motion duly made and seconded the meeting was adjourned.

/s/ Jasbinder Chohan
--------------------
Jasbinder Chohan, Secretary

MINUTES OF ACTION BY THE
SHAREHOLDERS OF
FAR WEST GOLD, INC.
AT A SPECIAL SHAREHOLDERS MEETING
(May 9th, 1996)

WHEREAS, the By-Laws of the Corporation provide that a Special Meeting of the shareholders may be called at any time by the Board of Directors or by the President, and shall be called by the President or the Secretary at the written request of the holders of (10%) of the shares then outstanding and entitled to vote thereat, or as otherwise required under the provisions of the Business Corporation Act.

WHEREAS, there were represented by proxy or in person 4,040,320 shares of the Corporation which constituted a quorum, there being currently 4,076,300 shares issued and outstanding, and;

WHEREAS, being all the Directors of the Corporation, desire that the Board of Directors shall take the action expressed in the Resolution hereinafter set forth;

NOW THEREFORE, we the undersigned, do hereby declare that the action expressed in the following Resolutions shall be and are hereby taken by majority vote of the shareholders of the Corporation as of the date hereof:

RESOLVED, that the following individuals be and hereby are appointed to the Board of Directors of this Corporation, to serve in their respective capacities until the next Annual General Meeting of shareholders: Harmel S. Rayat, Jasbinder Chohan and Kundan S. Rayat.

FURTHER RESOLVED, that Harmel S. Rayat be President and Jasbinder Chohan be Secretary.

RESOLVED, that the Corporation change its name from Far West Gold, Inc. to Far West Resources, Inc. and to amend Article 1 of the Articles of Incorporation to read: "The name of the corporation is Far West Resources, Inc."

RESOLVED, to increase the number of shares of the Company is authorized to issue and to include a class of Preferred shares. and to amend Article 6 of the Articles of Incorporation to read as follows:

"The aggregate number of shares which this corporation shall have authority to issue is 105,000,000 shares, of which 100,000,000 shares shall be $0.001 par value Common Stock and 5,000,000 shares shall be $.10 par value Preferred Stock. The Common Stock shall have voting rights of one vote per share. The Board of Directors may issue the Preferred Stock from time to time in one or more series, each series to have such voting rights, preference in dividends and *in liquidation and such other rights, preferences and conditions as the Board of Directors may designate by an amendment to these Articles of Incorporation by action duly adopted without shareholder action and shareholder action

shall not be required therefor. Fully-paid stock of this Corporation shall not be liable to any further call or assessment."

RESOLVED, that the Directors are authorized to establish a Stock Option Plan.

RESOLVED, ratify the appointment of William Clancy, CPA as the Company's independent auditor.

RESOLVED, ratify the appointment of Gary Blume as the Company's SEC counsel

RESOLVED, that all past actions taken by the Board of Directors of this Company be ratified.

We, Harmel S. Rayat and Jasbinder Chohan, do hereby certify that we are respectively the duly elected President and the duly elected and qualified Secretary and keeper of the records of Far West Resources, Inc., a corporation presently organized and existing under the laws of the State of Utah, and that the above is a true and correct copy of resolutions duly adopted at a special meeting of Shareholders thereof, convened and held in accordance with law and By-laws of said Corporation on the 9th day of May, 1996 and that such resolutions are now in full force and effect.

/s/ Harmel S. Rayat                              /s/ Jasbinder Chohan
-------------------                              --------------------
Mr. Harmel S. Rayat, President                   Ms. Jasbinder Chohan, Secretary

MINUTES OF DIRECTORS MEETING
OF
FAR WEST RESOURCES, INC.

A meeting of the Board of Directors of Far West Resources, Inc. was held on the 30th day of May, 1997 at 10:30 a.m. at the offices located at Suite 1400, 400 Burrard Street, Vancouver, B.C., V6C 3G2.

There were present and participating at the meeting, either in person or telephonically, Mr. Harmel S. Rayat, Mr. Kundan S. Rayat and Ms. Jasbinder Chohan, being all of the Directors of the Company. Mr. Harmel S. Rayat, the President, chaired the meeting and Ms. Chohan, the Secretary, read the minutes of the last regular meeting and they were approved.

The first item of discussion brought before the board was a discussion concerning the necessity of raising additional capital in order to fund the Company's future endeavors and for potential acquisitions. After a thorough discussion it was agreed that a 504 Registration be executed authorizing 2,000,000 shares at $0.15 per share. Upon motion duly made, seconded and unanimously carried with all in favor, it was;

Resolved, that the Company execute a 504 Registration be executed authorizing 2,000,000 shares at $0.15 per share.

Further Resolved, that the Company issue 500,000 each in the names of Greystone Management Ltd., Matrix Capital Corp., Shetland Holdings Corp. and Blackrock Capital Corp.

There being no further business and upon motion duly made and seconded, the meeting was adjourned.

/s/ Harmel S. Rayat                                 /s/ Kundan S. Rayat
-------------------                                 -------------------
Mr. Harmel S. Rayat, President, Director            Mr. Kundan S. Rayat,Director



/s/ Jasbinder Chohan
--------------------
Ms. Jasbinder Chohan, Secretary/Treasurer, Director

MINUTES OF DIRECTORS MEETING
OF
FAR WEST RESOURCES, INC.

A meeting of the Board of Directors of Far West Resources, Inc. was held on the 3rd day of June, 1997 at 10:30 a.m. at the offices located at Suite 1400, 400 Burrard Street, Vancouver, B.C., V6C 3G2.

There were present and participating at the meeting, either in person or telephonically, Mr. Harmel S. Rayat, Mr. Kundan S. Rayat and Ms. Jasbinder Chohan, being all of the Directors of the Company. Mr. Harmel S. Rayat, the President, chaired the meeting and Ms. Chohan, the Secretary, read the minutes of the last regular meeting and they were approved.

The first item of discussion brought before the board was a discussion concerning the disposition of all resource based assets, and instead to concentrate on other non-resource business endeavors and potential acquisitions. Upon motion duly made, seconded and unanimously carried with all in favor, it was;

Resolved, that the Company dispose of all resource based assets and concentrate on other non-resource business endeavors and potential acquisitions.

Further Resolved, that the Company dispose of its interest and tide to The Tom Mining Claims.

There being no further business and upon motion duly made and seconded, the meeting was adjourned.

/s/ Mr. Harmel S. Rayat                            /s/ Kundan S. Rayat
-----------------------                            -------------------
Mr. Harmel S. Rayat, President, Director           Mr. Kundan S. Rayat, Director



/s/ Jasbinder Chohan
--------------------
Ms. Jasbinder Chohan, Secretary/Treasurer, Director

MINUTES OF ACTION BY THE
SHAREHOLDERS OF
FAR WEST RESOURCES, INC.
AT AN ANNUAL GENERAL SHAREHOLDERS MEETING
(June 30, 1997)

WHEREAS, the By-Laws of the Corporation provide that an Annual General Meeting of the shareholders be held each year when they shall elect a Board of Directors and transact such other business as may be properly brought before the meeting.

WHEREAS, there were represented by proxy or in person 5,100,000 shares of the Corporation which constituted a quorum, there currently being 8,076,202 shares issued and outstanding, and;

WHEREAS, being all the Directors of the Corporation, desire that the Board of Directors shall take the action expressed in the Resolution hereinafter set forth;

NOW THEREFORE, we the undersigned, do hereby declare that the action expressed in the following Resolutions shall be and are hereby taken by majority vote of the shareholders of the Corporation as of the date hereof:

RESOLVED, that the following individuals be and hereby are appointed to the Board of Directors of this Corporation, to serve in their respective capacities until the next Annual General Meeting of shareholders: Harmel S. Rayat, Jasbinder Chohan and Kundan S. Rayat.

FURTHER RESOLVED, that Harmel S. Rayat be President and Jasbinder Chohan be Secretary.

RESOLVED, that Clancy and Co., PLLC be appointed as the Company's independent auditors for the fiscal year ending December 31, 1997.

RESOLVED, that the state of registration of the Corporation be changed from Utah to Nevada and to amend the Company's Articles of Incorporation to reflect such a change.

RESOLVED, to approve the Corporation's name change to American Alliance Corp. or American Alliance Corporation and to amend the Company's Articles of Incorporation to reflect such a change.

RESOLVED, to increase common share par value from $0.001 to $0.00001 and preferred share par value from $0.10 to $.0001.

RESOLVED, that the Directors establish a new 1997 Stock Option Plan.

FURTHER RESOLVED, that the Directors are authorized to adopt the 1997 Stock Option Plan and reserve 1,250,000 shares of Common Stock for issuance thereunder.

RESOLVED, that all past actions taken by the Board of Directors of this Company be ratified.

We, Harmel S. Rayat and Jasbinder Chohan, do hereby certify that we are respectively the duly elected President and the duly elected and qualified Secretary and keeper of the records of Far West Resources, Inc., a corporation presently organized and existing under the laws of the State of Utah, and that the above is a true and correct copy of resolutions duly adopted at an Annual General Meeting of Shareholders thereof, convened and held in accordance with law and By-laws of said Corporation on the 30th day of June, 1997 and that such resolutions are now in full force and effect.

/s/ Harmel S. Rayat                              /s/ Jasbinder Chohan
-------------------                              --------------------
Mr. Harmel S. Rayat, President                   Ms. Jasbinder Chohan, Secretary

MINUTES OF DIRECTORS MEETING
OF
AMERICAN ALLIANCE CORPORATION

A meeting of the Board of Directors of American Alliance Corporation was held on the 14th day of October, 1997 at 2:30 p.m. at the offices located at Suite 216, 1628 West 1st Avenue, Vancouver, B.C., V6J lGl.

There were present and participating at the meeting, either in person or telephonically, Mr. Harmel S. Rayat, Mr. Kundan S. Rayat and Ms. Jasbinder Chohan, being all of the Directors of the Company. Mr. Harmel S. Rayat, the President, chaired the meeting and Ms. Chohan, the Secretary, read the minutes of the last regular meeting and they were approved.

The first item of discussion brought before the board was a discussion concerning the necessity of raising additional capital in order to fund the Company's future endeavors and for potential acquisitions. After a thorough discussion it was agreed that a 504 Registration be executed authorizing 1,000,000 shares at $.50 per share. Upon motion duly made, seconded and unanimously carried with all in favor, it was;

Resolved, that the Company execute a 504 Registration be executed authorizing 1,000,000 shares at $0.50 per share.

Further Resolved, that the Company issue 400,000 shares in the name of Shetland Holdings Corp. and 600,000 shares in the name of Matrix Capital Corp.

There being no further business and upon motion duly made and seconded, the meeting was adjourned.

/s/ Harmel S. Rayat                                /s/ Kundan S. Rayat
-------------------                                -------------------
Mr. Harmel S. Rayat, President, Director           Mr. Kundan S. Rayat, Director



/s/   Jasbinder Chohan
---   ----------------
Ms. Jasbinder Chohan, Secretary/Treasurer, Director

MINUTES OF DIRECTORS MEETING
OF
AMERICAN ALLIANCE CORPORATION

A meeting of the Board of Directors of American Alliance Corporation was held on the 5th day of November, 1997, at 9:30 a.m. local time, at the offices located at Suite 216, 1628 West 1st Avenue, Vancouver, B.C., V6J 1G1.

Present and participating at the meeting, either in person or telephonically and constituting a quorum, were Mr. Harmel S. Rayat, Mr. Kundan S. Rayat, and Ms. Jasbinder Chohan, being all of the Directors of the Company. Mr. Harmel S. Rayat, the President, chaired the meeting. The minutes of the last regular meeting were read and they were approved.

The first item brought before the Board of Directors was regarding entering into stock option agreements with certain directors, officers, and employees for 1,250,000 common shares reserved for issuance under the Company's 1997 Stock Option Plan, which was approved by Shareholders at an Annual General Meeting of Shareholders held on June 30th, 1997. Upon motion duly made, seconded and unanimously carried with all in favor, it was;

Resolved, that the Company establish 1,050,000 stock options at a price of $1.00 until November 5th, 2004, and 200,000 stock options at a price of $3.00 until November 5th, 2004.

Further Resolved, that 300,000 stock options be established in the name of Ranjit Bhogal, 300,000 stock options be established in the name of Terry Johnston, 300,000 stock options be established in the name of Bhupinder Mann, 65,000 stock options be established in the name of Herdev S. Rayat, 65,000 stock options be established in the name of Herdev S. Rayat, 20,000 stock options be established in the name of Jasbinder Chohan, and 200,000 stock options be established in the name of Harmel S. Rayat, which are exercisable at $3.00, and vest in 5 equal installments each November 5th, beginning in 1998.

There being no further business and upon motion duly made and seconded, the meeting was adjourned.

/s/ Harmel S. Rayat                                   /s/ Kundan S. Rayat
-------------------                                   -------------------
Mr. Harmel S. Rayat, President, Director              Mr. Kundan Rayat, Director


/s/ Jasbinder Chohan
--------------------
Ms. Jasbinder Chohan, Secretary, Treasurer & Director

MINUTES OF DIRECTORS MEETING
OF
AMERICAN ALLIANCE CORPORATION

A meeting of the Board of Directors of American Alliance Corporation was held on the 9th day of December, 1997 at 10:30 a.m. at the offices located at Suite 216, 1628 West 11, Avenue, Vancouver, B.C., V6J 1G1.

There were present and participating at the meeting, either in person or telephonically, Mr. Harmel S. Rayat, Mr. Kundan S. Rayat and Ms. Jasbinder Chohan, being all of the Directors of the Company. Mr. Harmel S. Rayat, the President, chaired the meeting and Ms. Chohan, the Secretary, read the minutes of the last regular meeting and they were approved.

The first item of discussion brought before the board was a discussion concerning the necessity of raising additional capital in order to fund the Company's future endeavors and for potential acquisitions. After a thorough discussion it was agreed that a 505 Registration be executed authorizing 450,000 shares at $2.00 per share for $900,000, and grant 450,000 share purchase warrants exercisable at $2.00 until December 9th, 2001. Upon motion duly made, seconded and unanimously carried with all in favor, it was;

Resolved, that the Company execute a 505 Registration be executed authorizing 450,000 shares at $2.00 per share for $900,000, and grant 450,000 share purchase warrants exercisable at $2.00 until December 9, 2001.

Further Resolved, that the Company issue 450,000 shares and 450,000 share purchase warrants in the name of Kirkland Capital SA.

There being no further business in and upon motion duly made and seconded, the meeting was adjourned.

/s/ Harmel S. Rayat                                 /s/ Mr. Kundan S. Rayat
-------------------                                 -----------------------
Mr. Harmel S. Rayat, President, Director            Mr.Kundan S. Rayat, Director



/s/ Jasbinder Chohan
--------------------
Ms. Jasbinder Chohan, Secretary, Treasurer, Director

MINUTES OF DIRECTORS MEETING
OF
AMERICAN ALLIANCE CORPORATION

A meeting of the Board of Directors of American Alliance Corporation was held on the 24th day of April, 1998, at 10:00 a.m. local time, at the offices located at Suite 216, 1628 West 1st Avenue, Vancouver, B.C., V6J 1G1.

Present and participating at the meeting, either in person or telephonically and constituting a quorum, were Mr. Harmel S. Rayat, Mr. Kundan S. Rayat, and Ms. Jasbinder Chohan, being all of the Directors of the Company. Mr. Harmel S. Rayat, the President, chaired the meeting. The minutes of the last regular meeting were read and they were approved.

The first item of discussion brought before the Board of Directors was a discussion regarding the Company's 1998 Annual General Meeting with the following agenda: election of Mr. Harmel S. Rayat, Mr. Kundan S. Rayat and Ms. Jasbinder Chohan as Directors, authorize the Company's 1998 Stock Option Plan and reserve 1,750,000 common shares for issuance thereunder, ratify the appointment of Clancy and Co., PLLC as the Company's independent auditor and transact any other business that may come before the meeting. It was agreed to fix the close of business on May 15th, 1998 as the record date for the determination of shareholders entitled to an annual meeting notice and to vote at the meeting or any adjournment thereof, and that the meeting should take place on June 22nd, 1998 at the Company's office in Vancouver, located at Suite 216, 1628 West 1st Avenue, Vancouver, B.C., V6J 1G1, at 10:00 a.m. local time. Upon motion duly made, seconded and unanimously carried with all in favor, it was:

RESOLVED, that the 1998 Annual General Meeting be set for June 22nd, 1998 at Suite 216, 1628 West 1st Avenue, Vancouver, B.C., V6J 1G1, at 10:00 a.m. local time, and that the close of business on May 15th, 1998 be the record date for the determination of shareholders entitled to an annual meeting notice and to vote at the meeting or any adjournment thereof.

FURTHER RESOLVED, that the following items are to be on the agenda for the 1998 Annual General Meeting:

a. Election of Mr. Harmel S. Rayat, Mr. Kundan S. Rayat, and Ms.

Jasbinder Chohan as Directors.

b. Authorize the Company's 1998 Stock Option Plan and reserve 1,750,000 common shares for issuance thereunder.

c. Ratify the appointment of Clancy and Co., PLLC as the Company's independent auditor.

d. To transact any other business that may come before the meeting.

There being no further business and upon motion duly made and seconded, the meeting was adjourned.

/s/ Harmel S. Rayat                                   /s/ Kundan S. Rayat
-------------------                                   -------------------
Mr. Harmel S. Rayat, President, Director              Mr. Kundan Rayat, Director

/s/ Jasbinder Chohan
--------------------
Ms. Jasbinder Chohan, Secretary, Treasurer & Director

MINUTES OF DIRECTORS MEETING
OF
AMERICAN ALLIANCE CORPORATION

A meeting of the Board of Directors of American Alliance Corporation was held on the 4th day of May, 1999, at 9:00 a.m. local time, at the offices located at 1628 West 1st Avenue, Suite 216, Vancouver, B.C. V6J 1G1.

Present and participating at the meeting, either in person or telephonically and constituting a quorum, were Mr. Harmel S. Rayat, Mr. Kesar S. Dhaliwal, and Ms. Jasbinder Chohan, being all of the Directors of the Company. Mr. Harmel S. Rayat, the Chairman, chaired the meeting, and Ms. Chohan, the secretary, read the minutes of the last regular meeting and they were approved.

The first item of discussion brought before the Board of Directors was a discussion regarding enhancing the trading volumes of the Company's common shares. The second item of discussion was to become a reporting issuer in order to improve the availability of financial reports to shareholders. After a thorough discussion, it was agreed that the Company execute a two for one forward split and file a Form 10-SB with the SEC. Upon motion duly made, seconded and unanimously carried with all in favor, it was:

RESOLVED, that the Company forward split its common shares two for one, with the par value remaining the same, and that the Company file a Form 10-SB with the SEC.

FURTHER RESOLVED, that the effective date for the two for one forward split be fore shareholders of record on the close of business May 14, 1999.

There being no further business and upon motion duly made and seconded, the meeting was adjourned.

/s/ Harmel S. Rayat
-------------------
Mr. Harmel S. Rayat, President, Director

MINUTES OF DIRECTORS MEETING
OF
AMERICAN ALLIANCE CORPORATION

A meeting of the Board of Directors of American Alliance Corporation was held on the 5th day of May, 1999, at 10:00 a.m. local time, at the offices located at Suite 216, 1628 West 1st Avenue, Vancouver, B.C., V6J 1G1.

Present and participating at the meeting, either in person or telephonically and constituting a quorum, were Mr. Harmel S. Rayat, Mr. Kesar S. Dhaliwal, and Ms. Jasbinder Chohan, being all of the Directors of the Company. Mr. Harmel S. Rayat, the Chairman, chaired the meeting, and Ms. Chohan, the secretary, read the minutes of the last regular meeting and they were approved.

The first item of discussion brought before the Board of Directors was a discussion regarding obtaining a new CUSIP number for the Company's Common Stock in anticipation for a name change to "WhatsOnline.Com, Inc." on May 14, 1999. After a thorough discussion, it was agred that the Company obtain a new CUSIP as soon as possible. Upon motion duly made, seconded and unanimously carried with all in favor, it was:

RESOLVED, that the Company obtain a new CUSIP number for its Common Shares as soon as possible.

There being no further business and upon motion duly made and seconded, the meeting was adjourned.

/s/ Harmel S. Rayat
-------------------
Mr. Harmel S. Rayat, President, Director

1997 INCENTIVE STOCK OPTION PLAN AND 1997
NONSTATUTORY STOCK OPTION PLAN

1. Names and Purposes of the Plans. This Plan document is intended to implement and govern two separate Stock Option Plans of American Alliance Corporation, a Nevada corporation (the "Company"): the 1997 Incentive Stock Option Plan ("Plan A") and the 1997 Nonstatutory Stock Option Plan ("Plan B") (collectively the "Plans"). Plan A provides for the granting of options that are intended to qualify as incentive stock options ("Incentive Stock Options") within the meaning of Section 422(b) of the Internal Revenue Code, as amended. Plan B provides for the granting of options that are not intended to so qualify. Unless specified otherwise, all the provisions of this Plan document relate equally to both Plan A and Plan B, which Plans are condensed into one Plan document solely for purposes of administrative convenience and are not intended to constitute tandem plans. The purposes of the Plans are (a) to attract and retain the best available people for positions of substantial responsibility, and (b) to provide additional incentive to the Employees of the Company (and its future parents and subsidiaries, if any) and to promote the success of the Company's business.

2. Definitions. For purposes of the Plans, the following terms will have the respective meanings indicated:

(a) "Board" shall mean the Board of Directors of the Company;

(b) "Code" shall mean the Internal Revenue Code of 1986, as amended;

(c) "Common Stock" shall mean the Class A common stock of the Company;

(d) "Company" shall mean American Alliance Corporation, a Nevada corporation;

(e) "Committee" shall mean the committee appointed by the Board in accordance with Paragraph 3(a) of this Plan document, if one is appointed;

(f) "Employee" shall mean any person, including an officer or director, who is an employee (within the meaning of Section 422 of the Code) of the Company, any parent, any subsidiary or any successors to any of the foregoing;

(g) "Incentive Option" shall mean an incentive stock option as defined in Section 422(b) of the Code;

(h) "Non-Statutory Option" shall mean an option which does not qualify as an Incentive Option;

(i) "Option" shall mean a stock option granted pursuant to the Plan, whether an Incentive Option or a Non-Statutory Option;

(j) "Option Agreement" shall mean an agreement substantially in the form attached hereto as Exhibit A or the form attached hereto as Exhibit B, or such other form or forms as the Board (subject to the terms and conditions of the Plans) may from time to time approve, evidencing an Option;

(k) "Option Grant Date" shall mean the date on which an Option is granted by the Board;

(1) "Optioned Stock" shall mean the Common Stock subject to an Option granted pursuant to a Plan;

(m) "Optionee" shall mean an Employee or other Eligible Person who receives an Option;

(n) "Outstanding Incentive Option" shall mean any Incentive Stock Option which has not yet been exercised in full or has not yet expired by lapse of time;

(o) "Parent" shall mean a "parent corporation" as defined in Section 424(e) of the Code;

(p) "Plan A" shall mean the 1997 Incentive Stock Option Plan;

(q) "Plan B" shall mean the 1997 Non-Statutory Stock Option Plan;

(r) "Predecessor Corporation" shall mean a corporation which is a party to a transaction described in Code Section 424(a) (or which would be so described if a substitution or assumption under such section had been effected) with the Company, a Parent, a Subsidiary or a predecessor corporation of any such corporations.

(s)"Share" shall mean a share of the Common Stock, as adjusted in accordance with Section 13 of this Plan document;

(t) "Stock Purchase Agreement" shall mean an agreement substantially in the form attached hereto as Exhibit D or such other form or forms as the Board (subject to the terms and conditions of this Plan) may from time to time approve, which is to be executed as a condition of purchasing Optioned Stock upon exercise of an Option as provided in a Plan; and,

(u) "Subsidiary" shall mean a subsidiary corporation as defined in
Section 424(f) of the Code.

3. Administration of Plan.

(a) Procedure. The Plans shall be administered by the Board.

The Board may appoint a Committee consisting of not less than two (2) members of the Board to administer one or both of the Plans on behalf of the Board, subject to such terms and conditions as the Board may prescribe. Once appointed, the Committee shall continue to serve until otherwise directed by the Board. From time to time, the Board may increase the size of the Committee and appoint additional members thereof, remove members of the Committee, and thereafter, directly administer the Plans. Any references herein to the Board shall refer to the Committee, if one is appointed, to the extent of the Committee's authority.

(b) Limitations on Members of Board. Members of the Board who are either eligible for options or have been granted Options may vote on any matters affecting the administration of the Plans or the grant of any Options pursuant to the Plans; except that no such member shall act in connection with an Option to himself or herself, but any such member may be counted in determining the existence of a quorum at any meeting of the Board during which action is taken with respect to Options of such member.

(c) Powers of the Board. Subject to the provisions of the Plan the Board shall have the authority, in its discretion, to make all determinations necessary or advisable for the administration of the Plans, including without limitation:

(i) to determine, upon review of relevant information, the then fair market value per share of the Common Stock;

(ii) to determine the exercise price of the Options to be granted, subject to the provisions of Paragraph 8 of this Plan document;

(iii)to determine the Employees to whom, and the time or times at which, Options shall be granted, and the number of shares of Optioned Stock to be represented by each Option;

(iv) to determine whether Options granted hereunder shall be granted under Plan A as Incentive Options or Plan B as Non-statutory Options;

(v) to prescribe, amend and rescind rules and regulations relating to the Plans;

(vi) to determine the terms and provisions of each Option granted under the Plans (which need not be identical) and to modify or amend each Option (with or without consent of the Optionee, if necessary);

(vii) to accelerate the exercise date of any Option;

(viii) to construe and interpret the Plans, the Option Agreements, Stock Purchase Agreements and any other agreements provided for hereunder; and

(ix) to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Option previously granted by the Board or to take such other actions as may be necessary or advisable with respect to the Company's rights pursuant to the Option, Stock Purchase Agreement or other agreement approved hereunder.

(d) Effect of the Board's or Committee's Decision. All decisions, determinations and interpretations of the Board or the Committee shall be final and binding on all Optionees and any other proper holders of any Options granted under the Plan.

4. Stock Subject to the Plan. Subject to the provisions of Section 13 of this Plan document, the maximum aggregate number of shares which may be optioned under these Plans is 1,250,000 shares of authorized Common Stock. This constitutes an absolute cumulative limitation on the total number of shares that may be optioned under Plan A and Plan B and, therefore, at any particular date the maximum aggregate number of shares which may be optioned under Plan A is equal to 1,250,000 minus the number of shares previously optioned under Plan A and Plan B; and the maximum aggregate number of shares which may be optioned under Plan B is equal to 1,250,000 minus the number of shares which have been previously optioned under Plan A or Plan B. All shares to be optioned under either Plan A or Plan B may be either authorized but unissued shares or shares held in the treasury. Shares of Common Stock that (a) are repurchased by the Company after issuance hereunder pursuant to the exercise of an Option or (b) are not purchased by the Optionee prior to the expiration of the applicable Option Period (as described hereinbelow) shall again become available to be covered by Options to be issued hereunder and shall not, as of the effective date of such repurchase or expiration, be counted as having been previously optioned for purposes of the above-described maximum number of shares which may be optioned hereunder.

5. Eligibility. Options under Plan A may be granted to any Employee who is designated by the Board in its discretion. NonEmployees, including directors of the Company or any Parent or Subsidiary, who are not regular employees of the Company, are not eligible to receive Options under Plan A. Options under Plan B may be granted to any Employee, any Non-Employee director of Company or any Parent or Subsidiary, and any consultant or independent contractors who provide valuable services to the Company (or its Parent or Subsidiary), all as designated by the Board in its discretion. An Optionee who has been granted an Option may, if otherwise eligible, be granted an additional Option or Options. Options may be granted to one or more persons without being granted to other eligible persons, as the Board may deem fit.

6. Term of the Plan. Plan A shall become effective immediately upon the earlier to occur of its adoption by the Board or its approval by vote of a majority of the outstanding shares of the Company entitled to vote on the adoption of such Plan. Plan B shall become effective immediately upon its adoption by the Board. Each Plan shall continue in effect until December 31, 2007 unless sooner terminated under Sections 15 or 18 of this Plan document. No Option may be granted under a Plan after its expiration.

7. Option Period. Each Option granted pursuant to either Plan shall be evidenced by an Option Agreement. Each Option shall expire and all rights thereunder shall end at the expiration of such period (which shall in no event be more than ten
(10) years) after the Option Grant Date as shall be fixed by the Board, subject in all cases to earlier expiration as provided in Section 11 of this Plan document. Notwithstanding the foregoing, the term of each Incentive Option granted to an Employee who, at the time the Incentive Option is granted, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary (determined as required by the Code as applied to Incentive Options) shall not be more than five (5) years from the Option Grant Date.

8. Option Price and Consideration.

(a) Price. The per share Option price for the Shares to be issued pursuant to an Option granted under either Plan shall be such price as is determined by the Board in its sole discretion. Notwithstanding the foregoing, with respect to Incentive Options granted under Plan A: (i) such price shall in no event be less than one hundred percent (100%) of the fair market value per Share of the Company's Common Stock on the Option Grant Date, as determined by the Board; and (ii) in the case of an Incentive Option granted to an Employee who, at the time the Option is granted, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent, Subsidiary or Predecessor Corporation (determined as required by the Code as applied to Incentive Options), the per share Option price shall be at least one hundred ten percent (110%) of the fair market value as of the Option Grant Date, as determined by the Board. The fair market value shall be determined by the Board in its sole discretion, exercised in good faith; provided, however, that where there is a public market for the Common Stock, the fair market value per share shall be the mean of the reported bid and asked price for the Common Stock on the date of the grant, or, in the event the Common Stock is listed on a stock exchange, the fair market value per share shall be the closing price on the exchange as of the date of grant of the Option.

(b) Form of Consideration. The form of consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Board and may consist of cash, promissory notes, or the surrender of shares of Common Stock having a fair market value on the date of surrender equal to the purchase price of the Shares as to which said Option shall be exercised, a combination thereof, or such other consideration and method of payment for the issuance of Shares as is permitted under applicable law.

(c) Promissory Notes. If the consideration for the exercise of an Option is a promissory note, such note shall be a full recourse promissory note executed by the Optionee. If the option is an Incentive Option under Plan A, such note shall bear interest at a per annum rate which is not less than the greater of (i) the applicable "test rate" described in Treasury Regs. Section 1.4831(d) in effect on the date of exercise or (ii) a fair market interest rate, as determined by the Board in its good faith discretion. If a promissory note is given as consideration, the Company may retain the Shares purchased upon exercise of the Option in escrow as security for payment of the promissory note.

(d) Surrendered Common Stock. If the consideration for the exercise of an Option is the surrender of previously acquired and owned shares of common stock of the Company, the Optionee will be required to make representations and warranties satisfactory to the Company regarding the Optionee's title to the shares used to effect the purchase, including without limitation, representations and warranties that the Optionee has good and marketable title to such shares free and clear of any and all liens, encumbrances, charges, equities, claims, security interests, options or restrictions and has full power to deliver such shares without obtaining the consent or approval of any person or governmental authority other than those which have already given consent or approval in a form satisfactory to the Company. The value of the shares used to effect the purchase shall be the fair market value of those shares as determined by the Board in its sole discretion, exercised in good faith.

9. Limit on Value of Optioned Stock Issued Under Plan A. The aggregate fair market value (determined as of the Option Grant Date of each Option) of the Shares with respect to which Incentive Options are exercisable for the first time by the Optionee during any calendar year under Plan A and all other incentive stock option plans of the Company, any Parent or Subsidiary, or any Predecessor Corporation of any such corporation shall not exceed One Hundred Thousand Dollars ($100,000.00), as determined pursuant to Section 422(d) of the Code.

10. Exercise of Option.

(a) General Terms. Any Option granted hereunder shall be exercisable at such times and under such conditions as may be determined by the Board which conditions may include performance criteria with respect to the Company and/or the Optionee or provisions for vesting over a period of time conditioned upon continued employment and shall include the contemporaneous execution of a Stock Purchase Agreement in a form approved by the Board and as shall be permissible under the terms of the Plan. In all events, in order to exercise an Option hereunder the Optionee shall execute a Stock Purchase Agreement in a form approved by the Board and shall deliver the required (or permitted) exercise consideration to the Company. As a condition to the exercise of an Option, the Board may require the Optionee pursuant to the Option Agreement to agree to restrictions on the sale or other transfer of ownership of the Common Stock acquired by an Optionee or to sell such Shares to the Company upon termination of employment.

(b) Partial Exercise. An Option may be exercised in accordance with the provisions of either Plan as to all or any portion of the Shares then exercisable under an Option, from time to time during the term of the Option. An Option may not be exercised for a fraction of a Share.

(c) Time of Exercise. An Option shall be deemed to be exercised when the Company has received at its principal business office: (i) written notice of such exercise in accordance with the terms of the Option Agreement and given by the person entitled to exercise the Option; (ii) full payment for the Shares with respect to which the Option is exercised; (iii) the executed Stock Purchase Agreement if required; and (iv) any other representations or agreements required by the terms of this Plan or the Option Agreement. Full payment may consist of such consideration as is authorized by the Board as provided hereunder.

(d) No Rights as Shareholder Until Exercise. Until this Option is properly exercised hereunder and the Company receives full payment for the Shares with respect to which the Option is exercised, no right to receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Option is properly exercised and payment in full is received, except as provided in Section 13 of this Plan document.

(e) Issuance of Share Certificates. As soon as practicable after any proper exercise of an Option in accordance with the provisions of this Plan document and payment in full for the exercised Shares, the Company shall, without transfer or issue tax to the Optionee, deliver to the Optionee at the principal business office of the Company, or such other place as shall be mutually acceptable, a certificate or certificates representing the Shares of Common Stock as to which the Option has been exercised. The time of issuance and delivery of the certificates) representing the Shares of Common Stock may be postponed by the Company for such period as may be required for it, with reasonable diligence, to comply with any applicable listing requirements of any national or regional securities exchange and any law or regulation applicable to the issuance and delivery of such Shares.

(f) Reduction of Shares Upon Exercise. Exercise of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

11. Termination of Employment.

(a) General. If an Optionee ceases to be an Employee for any reason then, except as provided in Paragraph 11(a) or 11(b) hereof, any Option of the Optionee, whether vested or non-vested, and if issued under Plan A or Plan B, shall terminate as of the date of termination of employment.

(b)Death or Disability. If Optionee dies or becomes disabled (within the meaning of Code Section 422 and the rules and regulations thereunder) then, within the earlier of thirty (30) days (or such other period of time not exceeding six (6) months as set forth in the Option Agreement) following the date of such death or disability and the time the Option expires by its terms, the Optionee or such person or persons to whm the Optionee's rights under the Option shall pass by the Optionee's will or by the laws of descent and distribution, may exercise the Option to the extent it was vested and exercisable on the date of death or disability.

12. Non-transferability of Options. The Options and any rights and privileges granted under any Option Agreement are not transferable by the Optionee, either voluntarily or by operation of law, otherwise than by will and the laws of descent and distribution and shall be exercisable during Optionee's lifetime only by Optionee.

13. Adjustments Upon Changes in Capitalization.

(a) Reorganizations, Recapitalization, Etc. If the outstanding shares of Common Stock of the Company are increased, decreased, changed into or exchanged for a different number or kind of shares or securities of the Company through reorganization, recapitalization, reclassification, stock dividend (but only on Common Stock), stock split, reverse stock split or other similar transaction, or, if any other increase or decrease occurs in the number of Shares of Common Stock of the Company without the receipt of consideration by the Company, then an appropriate and proportional adjustment shall be made in (i) the number and kind of shares of stock covered by each outstanding Option, (ii) the number and kind of shares of stock which have been authorized for issuance under the Plan but as to which no Options have yet been granted (or which have been returned to the Plan upon cancellation of an Option), and (iii) the exercise price per share of stock covered by each such outstanding Option. The granting of stock options or bonuses to Employees of the Company and the conversion of any convertible securities of the Company shall not be deemed to have been "effected without the receipt of consideration." Notwithstanding the foregoing, no adjustment need be made under this paragraph if, upon the advice of counsel, the Board determines that such adjustment may result in federal taxable income to the holders of Options or Common Stock or other classes of the Company's securities.

(b) Dissolution, Liquidation, Etc. Upon the dissolution or liquidation of the Company, or upon a reorganization, merger or consolidation of the Company with one or more corporations as a result of which the Company is not the surviving corporation, or upon a sale (or exchange through merger) of substantially all the property or more than fifty percent (50%) of the then outstanding stock of the Company to another corporation, the Plan shall terminate, and any Option theretofore granted hereunder shall terminate. Notwithstanding the foregoing, the Board may provide in writing in connection with, or in contemplation of, such transaction for any, all or none of the following alternatives (separately or in combination): (i) for all or a portion of the Options theretofore granted to become immediately exercisable; (ii) for the assumption by the successor corporation of the Options theretofore granted or the substitution by such corporation for such Options of new options covering the stock of the successor corporation, or a Parent or Subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; or (iii) for the continuance of the Plan by such successor corporation in which event the Plan and the Options theretofore granted shall continue in the manner and under the terms so provided.

(c) No Fractional Shares. No fractional shares of the Common Stock shall be issuable on account of any action under this Paragraph 13, and the aggregate number of shares into which Shares then covered by an Option, when changed as the result of such action, shall be reduced to the largest number of whole Shares resulting from such action. Notwithstanding the foregoing, the Board, in its sole discretion, may determine to issue scrip certificates, in respect to any fractional shares, which scrip certificates, in such event, shall be in a form and have such terms and conditions as the Board in its discretion shall prescribe.

(d) Binding Effect of Board Determinations. All adjustments under this Paragraph 13 shall be made by the Board, whose determination in that respect shall be final, binding and conclusive.

(e) No Other Adjustments. Except as expressly provided herein, no issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares of Common Stock subject to the Plan or any Options.

14. Amendment and Termination of the Plan.

(a) Amendment and Termination. The Board may at any time and from time to time suspend or terminate either Plan. The Board may also amend or revise either Plan from time to time in such respects as the Board may deem advisable, except that, without approval of the holders of the majority of the outstanding shares of the Company's Common Stock, no such revision or amendment shall amend Plan A or Plan B so as to:

(i) Increase the number of Shares subject to Plan A or Plan B other than in connection with an adjustment under Section 13 of this Plan document;

(ii) Permit the granting of Incentive Options to anyone other than as provided in Paragraph 5;

(iii) Remove the administration of Plan A or Plan B from the Board;

(iv) Extend the term of Plan A or Plan B beyond that provided in Paragraph 6 hereof;

(v) Extend the term of any Incentive Option beyond the maximum term set forth in Paragraph 7;

(vi) Permit the granting of Incentive Options which would not qualify as Incentive Stock Options; or

(vii) Decrease the per share option price required with respect to Incentive Options under Paragraph 8(a) hereof.

(b) Effect of Termination. Except as otherwise provided in Section 13, without the written consent of the Optionee, any such termination of the Plan shall not affect Options already granted and such Options shall remain in full force and effect as if the Plan had not been terminated.

15. Conditions Upon Issuance of Shares. Options granted under either Plan are conditioned upon the Company obtaining any required permit, or exemption from the qualification or registration provisions of any applicable state securities law and other appropriate governmental agencies, authorizing the Company to issue such Options and Optioned Stock upon terms and conditions acceptable to the Company. Shares shall not be issued with respect to an Option granted under either Plan unless the exercise of such Option and the issuance and delivery of such shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, 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 be further subject to the approval of counsel for the Company with respect to such compliance. As a condition to the exercise of an Option, the Board may require the person exercising such Option to execute an agreement approved by the Board, and may require the person exercising such Option to make any representation and warranty to the Company as may, in the judgment of counsel to the Company, be required under applicable laws or regulations.

16. Reservation of Shares. During the term of the Plans, the Company will at all times reserve and keep available the number of Shares as shall be sufficient to satisfy the requirements of the Plans. During the term of the Plans, the Company will use its best efforts to seek to obtain from appropriate regulatory agencies any requisite authorization in order to issue and sell such number of Shares of its Common Stock as shall be sufficient to satisfy the requirements of the Plan. The inability of the Company to obtain from any such regulatory agency the requisite authorization(s) deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, or the inability of the Company to confirm to its satisfaction that any issuance and sale of any Shares hereunder will meet applicable legal requirements, shall relieve the Company of any liability in respect to the non-issuance or sale of such Shares as to which such requisite authority shall not have been obtained.

17. Taxes, Fees, Expenses and Withholding of Taxes.

(a) Issue and Transfer Taxes. The Company shall pay all original issue and transfer taxes (but not income taxes, if any) with respect to the grant of Options and the issue and transfer of Shares pursuant to the exercise of such Options, and all other fees and expenses necessarily incurred by the Company in connection therewith, and will use its best efforts to comply with all laws and regulations which, in the opinion of counsel for the Company, shall be applicable thereto.

(b) Withholding. The grant of Options hereunder and the issuance of Shares of Common Stock pursuant to the exercise of such Options are conditioned upon the Company's reservation of the right to withhold, in accordance with any applicable law, from any compensation payable to the Optionee any taxes required to be withheld by federal, state or local law as a result of the grant or exercise of such Option or the sale of the Shares issued upon exercise of the Option.

18. Shareholder Approval of Plan A and Plan B. Continuance of Plan A and Plan B and the effectiveness of any Option granted under such Plan shall be subject to approval by the holders of the outstanding voting stock of the Company in accordance with applicable law within twelve (12) months before or after the date Plan A and Plan B is adopted by the Board. Any Options granted under Plan A and Plan B prior to obtaining such shareholder approval shall be granted upon the conditions that the Options so granted: (i) shall not be exercisable prior to such approval and (ii) shall become null and void ab initio if such shareholder approval is not obtained.

19. Liability of Company. The Company, its Parent or any Subsidiary which is in existence or hereafter comes into existence, will not be liable to an Optionee granted an Incentive Option or other person if it is determined for any reason by the Internal Revenue Service or any court having jurisdiction that any Incentive Options granted hereunder are not Incentive Stock Options.

20. Notices. Any notice to be given to the Company pursuant to the provisions of the Plans shall be addressed to the Company in care of its Secretary at its principal office, and any notice to be given to an Optionee shall be delivered personally or addressed to such Optionee at the address given beneath such Optionee's signature on such Optionee's Stock Option Agreement, or at such other address as such Employee (or any transferee) upon the transfer of the Optioned Stock may hereafter designate in writing to the Company. Any such notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, registered or certified, and deposited, postage and registry or certification fee prepaid, in a post office or branch post office regularly maintained by the United States Postal Service. It shall be the obligation of each Optionee and each transferee holding Shares purchased upon exercise of an Option to provide the Secretary of the Company, by letter mailed as provided hereinabove, with written notice of such person's direct mailing address.

21. No Enlargement of Employee Rights. This Plan is purely voluntary on the part of the Company, and the continuance of the Plan shall not be deemed to constitute a contract between the Company and any Employee, or to be consideration for or a condition of the employment of any Employee. Nothing contained in this Plan shall be deemed to give any Employee the right to be retained in the employ of the Company, its Parent, Subsidiary or a successor corporation, or to interfere with the right of the Company or any such corporations to discharge or retire any Employee thereof at any time. No Employee shall have any right to or interest in Options authorized hereunder prior to the grant of such Option to such employee, and upon such grant he or she shall have only such rights and interests as are expressly provided herein, subject, however, to all applicable provisions of the Company's Certificate of Incorporation, as the same may be amended from time to time.

22. Legends on Certificates.

(a) Federal Law. Unless an appropriate registration statement is filed pursuant to the Federal Securities Act of 1933, as amended, with respect to the Options and Shares issuable under the Plans, each certificate representing such Options and Shares shall be endorsed on its face with a legend substantially as follows:

"THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."

(b) State Legend. If required by applicable state authorities each certificate representing the Options and Shares issuable under the Plans shall be endorsed on its face with any legends required by such authorization.

(c) Additional Legends. Each certificate representing the Options and Shares issuable under the Plans shall also contain legends as are set forth in any Stock Purchase Agreement or other agreement the execution of which is a condition to the exercise of an Option under this Plan. In addition, each Option Agreement shall be endorsed with a legend substantially as follows:

"THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAYBE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED INTO BETWEEN THE HOLDER OF THIS OPTION AND THE COMPANY AS A CONDITION TO EXERCISE OF THIS OPTION."

23. Availability of Plan. A copy of the Plans shall be delivered to the Secretary of the Company and shall be shown by him to any eligible person making reasonable inquiry concerning it.

24. Invalid Provisions. In the event that any provision of the Plans is found to be invalid or otherwise unenforceable under any applicable law, such invalidity or unenforceability shall not be construed as rendering any other provisions contained herein as invalid or unenforceable, and all such other provisions shall be given full force and effect to the same extent as though the invalid or unenforceable provision was not contained herein.

25. Applicable Law. These Plans shall be governed and construed in accordance with the laws of the State of Nevada applicable to contracts executed, and to be fully performed, in Nevada.

IN WITNESS WHEREOF, pursuant to the due authorization and adoption of these Plans by the Board on _________, 199__, the Company has caused these Plans to be duly executed by its duly authorized officers, effective as of __________, 199__.

American Alliance Corporation

a Nevada corporation

By: _________________________
Title: ___________

EXHIBIT "A"

PLAN A

THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED INTO BETWEEN OPTIONEE AND THE COMPANY AS A CONDITION TO EXERCISE OF THIS OPTION.

INCENTIVE STOCK OPTION AGREEMENT

AGREEMENT made as of the ___ day of _______, 199__, by and between American Alliance Corporation a Nevada corporation (hereinafter called "Company") and ____________ (hereinafter called "Optionee").

RECITALS

A. The Board of Directors of the Company has adopted the Company's 1997 Incentive Stock Option Plan (the "Plan") for the purpose of attracting and retaining the services of selected key employees (including officers and employee directors), who contribute to the financial success of the Company or its parent or subsidiary corporations.

B. Optionee is a key member of the Company or its parent or subsidiary corporations, and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Company's grant of a stock option to the Optionee.

C. The granted option is intended to be an incentive stock option ("Incentive Option") within the meaning of Section 422 of the Internal Revenue Code.

NOW, THEREFORE, it is hereby agreed as follows:

1. Grant of Option. Subject to and upon the terms and conditions set forth in this Agreement, there is hereby granted to Optionee, as of the date of this Agreement (the "Grant Date"), a stock option to purchase up to __________ shares of the Company's Common Stock (the "Optioned Shares") from time to time during the option term at the option price of $_____ per share.

2. Plan. The options granted hereunder are in all instances subject to the terms and conditions of the Plan. In the event of any conflict between this Agreement and the Plan, the provisions of the Plan shall control. Optionee acknowledges receipt of a copy of the Plan and hereby accepts this option subject to all of the terms and conditions of the Plan. Optionee agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under the Plan.

3. Option Term. This option shall have a maximum term of ___ (__) years measured from the Grant Date and shall accordingly expire at the close of business on ______, _____ (the "Expiration Date"), unless sooner terminated in accordance with Paragraph 7, 9(a) or 20.

4. Option Nontransferable; Exception. This option shall be neither transferable nor assignable by Optionee, either voluntarily or involuntarily, other than by will or by the laws of descent and distribution and may be exercised, during Optionee's lifetime, only by Optionee.

5. Condition Precedent to Exercise. This option may not be exercised in whole or in part at any time prior to the time the Company has satisfied the following condition precedent: ______________. In the event the foregoing condition precedent has not been satisfied prior to the Expiration Date or prior to this option's earlier termination in accordance with Paragraph 7, 9(a) or 20, then this option shall terminate and cease to be outstanding.

6. Dates of Exercise. This option may not be exercised in whole or in part at any time prior to the time it is approved by the Company's shareholders in accordance with Paragraph 20. Provided such shareholder approval is obtained and the condition precedent to exercise set forth in Paragraph 5 has been satisfied, this option shall become exercisable for 100% of the Optioned Shares one (1) year from the Grant Date, provided that in no event may options for more than One Hundred Thousand Dollars ($100,000) of Optioned Shares, calculated at the exercise price, become exercisable for the first time in any calendar year. Once exercisable, options shall remain so exercisable until the expiration or sooner termination of the option term under Paragraph 7 or Paragraph 9(a) of this Agreement. In no event, however, shall this option be exercisable for any fractional shares.

7. Accelerated Termination of Option Term. The option term specified in Paragraph 3 shall terminate (and this option shall cease to be exercisable) prior to the Expiration Date should one of the following provisions become applicable:

(i) Except as otherwise provided in subparagraphs (ii) and (iii) below, should Optionee cease to be an Employee of the Company for any reason at any time during the option term, any option of the Optionee, whether vested or non-vested, and if issued under Plan A, shall terminate as of the date of termination of employment.

(ii) Should Optionee die while this option is outstanding, then the executors or administrators of Optionee's estate or Optionee's heirs or legatees (as the case may be) shall have the right to exercise this option for the number of shares (if any) for which the option is exercisable on the date of the optionee's death. Such right shall lapse and this option shall cease to be exercisable upon the earlier of (i) six (6) months from the date of the optionee's death or (ii) the Expiration Date.

(iii) Should Optionee become permanently disabled and cease by reason thereof to be an Employee of the Company at any time during the option term, then Optionee shall have a period of six (6) months (commencing with the date of such cessation of Employee status) during which to exercise this option; provided, however, that in no event shall this option be exercisable at any time after the Expiration Date. Optionee shall be deemed to be permanently disabled if Optionee is, by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of not less than twelve (12) months, unable to perform his/her usual duties for the Company or its Parent or Subsidiary corporations. Upon the expiration of the limited period of exercisability or (if earlier) upon the Expiration Date, this option shall terminate and cease to be outstanding.

(iv) For purposes of this Paragraph 7 and for all other purposes under this Agreement, Optionee shall be deemed to be an Employee of the Company and to continue in the Company's employ for so long as Optionee remains an Employee of the Company or one or more of its parent or subsidiary corporations as such terms are defined in the Plan.

8. Adjustment in Option Shares .
(a) In the event any change is made to the Common Stock issuable under the Plan by reason of any stock split, stock dividend, combination of shares, or other change affecting the outstanding Common Stock as a class without receipt of consideration (as set forth in the Plan), then appropriate adjustments will be made to (i) the total number of Optioned Shares subject to this option and (h) the option price payable per share in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder.

(b) If the Company is the surviving entity in any merger or other business combination, then this option, if outstanding under the Plan immediately after such merger or other business combination shall be appropriately adjusted to apply and pertain to the number and class of securities to which Optionee immediately prior to such merger of other business combination would have been entitled to receive in the consummation of such merger or other business combination.

9. Special Termination of Option.

(a) In the event of one or more of the following transactions (a "Corporate Transaction"):

(i) a merger or acquisition in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the State of the Company's incorporation;

(ii) the sale, transfer or other disposition of all or substantially all of the assets of the Company; or
(iii) any other corporate reorganization or business combination in which fifty percent (50%) or more of the Company's outstanding voting stock is transferred, or exchanged through merger, to different holders in a single transaction or a series of related transactions;

then this option shall terminate upon the consummation of such Corporate Transaction and cease to be exercisable, unless it is expressly assumed by the successor corporation or parent thereof. The Company shall provide Optionee with at least thirty (30) days prior written notice of the specified date for the Corporate Transaction. The Company can give no assurance that the options shall be assumed by the successor corporation or its parent company and it may occur that some options outstanding under the Plan will be assumed while these options are terminated.

(b) In the event of a Corporate Transaction, the Company may, at its option, accelerate the vesting schedule contained in Section 6 hereof, but shall have no obligation to do so. The Company shall have the right to accelerate other options outstanding under the Plan or any other plan, even if it does not accelerate the options of Optionee hereunder.

(c) This Agreement shall not in any way affect the right of the Company to make changes in its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

10. Privilege of Stock Ownership. The holder of this option shall not have any of the rights of a shareholder with respect to the Optioned Shares until such individual shall have exercised the option and paid the option price in accordance with this Agreement.

11. Manner of Exercising Option.

(a) In order to exercise this option with respect to all or any part of the Optioned Shares for which this option is at the time exercisable, Optionee (or in the case of exercise after Optionee's death, Optionee's executor, administrator, heir or legatee, as the case may be) must take the following actions:

(i) Execute and deliver to the Secretary of the Company a stock purchase agreement in substantially the form of Exhibit D to this Agreement (the "Purchase Agreement");

(ii) Pay the aggregate option price for the purchased shares in cash, unless another form of consideration is permitted as described in Exhibit C, if any, attached hereto or by the Board at the time of exercise.

(b) This option shall be deemed to have been exercised with respect to the number of Optioned Shares specified in the Purchase Agreement at such time as the executed Purchase Agreement for such shares shall have been delivered to the Company and all other conditions of this Section have been fulfilled. Payment of the option price shall immediately become due and shall accompany the Purchase Agreement. As soon thereafter as practical, the Company shall mail or deliver to Optionee or to the other person or persons exercising this option a certificate or certificates representing the shares so purchased and paid for.

12. Compliance with Laws and Regulations.

(a) The exercise of this option and the issuance of Optioned Shares upon such exercise shall be subject to compliance by the Company and Optionee with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange on which shares of the Company's Common Stock may be listed at the time of such exercise and issuance.

(b) In connection with the exercise of this option, Optionee shall execute and deliver to the Company such representations in writing as may be requested by the Company in order for it to comply with the applicable requirements of federal and state securities laws.

13. Successors and Assigns. Except to the extent otherwise provided in Paragraph 4 or 9(a), the provisions of this Agreement shall insure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of Optionee and the successors and assigns of the Company.

14. Liability of Company.

(a) If the Optioned Shares covered by this Agreement exceed, as of the Grant Date, the number of shares of Common Stock which may without shareholder approval be issued under the Plan, then this option shall be void with respect to such excess shares unless shareholder approval of an amendment sufficiently increasing the number of shares of Common Stock issuable under the Plan is obtained in accordance with the provisions of
Section 18 of the Plan.

(b) The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance and sale of any Common Stock pursuant to this option without the imposition of requirements unacceptable to the Company in its reasonable discretion shall relieve the Company of any liability with respect to the non-issuance or sale of the Common Stock as to which such approval shall not have been obtained. The Company, however, shall use its best efforts to obtain all such approvals.

(c) Neither the Company nor any Parent, Subsidiary or successor corporation will have any liability to Optionee or any other person if it is determined for any reason that any options granted hereunder are not Incentive Stock Options.

15. No Employment Contract. Except to the extent the terms of any written employment contract between the Company and Optionee may expressly provide otherwise, the Company (or any parent or subsidiary corporation of the Company employing Optionee) shall be under no obligation to continue the employment of Optionee for any period of specific duration and may terminate Optionee's status as an Employee at any time, with or without cause.

16. Notices. Any notice required to be given or delivered to the Company under the terms of this Agreement shall be in writing and addressed to the Company in care of its Secretary at its corporate offices. Any notice required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the address indicated below Optionee's signature line on this Agreement. All notices shall be deemed to have been given or delivered upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.

17. Loans or Guarantees. The Company may, in its absolute discretion and without any obligation to do so, assist Optionee in the exercise of this option by (i) authorizing the extension of a loan to Optionee from the Company, (ii) permitting Optionee to pay the option price for the purchased Common Stock in installments over a period of years, or (iii) authorizing a guarantee by the Company of a third party loan to Optionee. The terms of any loan, installment method of payment or guarantee (including the interest rate, the Collateral requirements and terms of repayment) shall be established by the Company in its sole discretion.

18. Construction. This Agreement and the option evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the Plan. All decisions of the Company with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in this option.

19. Governing Law. The interpretation, performance, and enforcement of this Agreement shall be governed by the laws of the State of Nevada.

20. Shareholder Approval. The grant of this option is subject to approval of the Plan by the Company's shareholders within twelve (12) months after the adoption of the Plan by the Board of Directors, and this option may not be exercised in whole or in part until such shareholder approval is obtained. In the event that such shareholder approval is not obtained, then this option shall thereupon terminate and Optionee shall have no further rights to acquire any Optioned Shares hereunder.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in duplicate on its behalf by its duly authorized officer and Optionee has also executed this Agreement in duplicate, all as of the day and year indicated above.

American Alliance Corporation a Nevada corporation

Address:

EXHIBIT "B"

PLAN A

Other Forms of Acceptable Consideration

[If no forms are listed hereon, cash shall be the only acceptable form of consideration for the exercise of the options.]

EXHIBIT "C"

PLAN B

THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION TATEMENT RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED INTO BETWEEN OPTIONEE AND THE COMPANY AS A CONDITION TO EXERCISE OF THIS OPTION.

NON-STATUTORY STOCK OPTION AGREEMENT

AGREEMENT made as of the ____ day of ______, 199__, by and between American Alliance Corporation, a Nevada corporation (hereinafter called "Company"), and _______________ (hereinafter called "Optionee").

RECITALS

A. The Board of Directors of the Company has adopted the Company's 1997 Non-Statutory Stock Option Plan (the "Plan") for the purpose of attracting and retaining the services of selected key employees (including officers and employee directors) and others (collectively, "Eligible Persons"), who contribute to the financial success of the Company or its parent or subsidiary corporations.

B. Optionee is an Eligible Person and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Company's grant of a stock option to Optionee.

C. The granted option is not intended to be an incentive stock option ("Incentive Option") within the meaning of Section 422 of the Internal Revenue Code, but is rather a non-statutory option.

NOW, THEREFORE, it is hereby agreed as follows:

1. Grant of Option. Subject to and upon the terms and conditions set forth in this Agreement, there is hereby granted to Optionee, as of the date of this Agreement (the "Grant Date"), a stock option to purchase up to _________ shares of the Company's Common Stock (the "Optioned Shares") from time to time during the option term at the option price of $____ per share.

2. Plan. The options granted hereunder are in all instances subject to the terms and conditions of the Plan. In the event of any conflict between this Agreement and the Plan, the provisions of the Plan shall control. Optionee acknowledges receipt of a copy of the Plan and hereby accepts this option subject to all of the terms and conditions of the Plan. Optionee agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under the Plan.

3. Option Term. This option shall have a maximum term of years measured from the Grant Date and shall accordingly expire at the close of business on _____ ____ , 199__ (the "Expiration Date"), unless sooner terminated in accordance with Paragraph 6 or 8(a).

4. Option Nontransferable; Exception. This option shall be neither transferable nor assignable by Optionee, either voluntarily or involuntarily, other than by will or by the laws of descent and distribution and may be exercised, during Optionee's lifetime, only by Optionee.

5. Dates of Exercise. This option shall be exercisable as follows: _________. Once exercisable, options shall remain so exercisable until the expiration or sooner termination of the option term under Paragraph 6 or Paragraph 8(a) of this Agreement. In no event, however, shall this option be exercisable for any fractional shares.

6. Accelerated Termination of Option Term. The option term specified in Paragraph 3 shall terminate (and this option shall cease to be exercisable) prior to the Expiration Date should one of the following provisions become applicable:

(i) (i) Except as otherwise provided in subparagraphs (ii) and (iii) below, should Optionee cease to be an Employee of the Company for any reason at any time during the option term, any option of the Optionee, whether vested or non-vested, and if issued under Plan B, shall terminate as of the date of termination of employment.

(ii) Should Optionee die while this option is outstanding, then the executors or administrators of Optionee's estate or Optionee's heirs or legatees (as the case may be) shall have the right to exercise this option for the number of shares (if any) for which the option is exercisable on the date of the optionee's death. Such right shall lapse and this option shall cease to be exercisable upon the earlier of (i) six (6) months from the date of the optionee's death or (ii) the Expiration Date.

(iii) Should Optionee become permanently disabled and cease by reason thereof to be an Employee of the Company at any time during the option term, then Optionee shall have a period of six (6) months (commencing with the date of such cessation of Employee status) during which to exercise this option; provided, however, that in no event shall this option be exercisable at any time after the Expiration Date. Optionee shall be deemed to be permanently disabled if Optionee is, by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of not less than twelve (12) months, unable to perform his/her usual duties for the Company or its Parent or Subsidiary corporations. Upon the expiration of the limited period of exercisability or (if earlier) upon the Expiration Date, this option shall terminate and cease to be outstanding.

(iv) For purposes of this Paragraph 6 and for all other purposes under this Agreement, if Optionee is an Employee, Optionee shall be deemed to be an Employee of the Company and to continue in the Company's employ for so long as Optionee remains an Employee of the Company or one or more of its parent or subsidiary corporations as such terms are defined in the Plan. For purposes of this Paragraph 6 and for all other purposes under this Agreement, if Optionee is not an Employee, but is eligible because Optionee is a director, consultant or contractor of Company or a parent or subsidiary corporation, Optionee shall be deemed to be an Eligible Person for so long as Optionee remains a director, consultant or contractor of the Company or one or more of its parent or subsidiary corporations as such terms are defined in the Plan.

7. Adjustment in Option Shares.

(a) In the event any change is made to the Common Stock issuable under the Plan by reason of any stock split, stock dividend, combination of shares, or other change affecting the outstanding Common Stock as a class without receipt of consideration (as set forth in the Plan), then appropriate adjustments will be made to (i) the total number of Optioned Shares subject to this option and
(ii) the option price payable per share in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder.

(b) If the Company is the surviving entity in any merger or other business combination, then this option, if outstanding under the Plan immediately after such merger or other business combination shall be appropriately adjusted to apply and pertain to the number and class of securities to which Optionee immediately prior to such merger or other business combination would have been entitled to receive in the consummation of such merger or other business combination.

8. Special Termination of Option.

(a) In the event of one or more of the following transactions (a "Corporate Transaction"):

(i) a merger or acquisition in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the State of the Company's incorporation;

(ii)the sale, transfer or other disposition of all or substantially all of the assets of the Company; or

(iii) any other corporate reorganization or business combination in which fifty percent (50%) or more of the Company's outstanding voting stock is transferred, or exchanged through merger, to different holders in a single transaction or a series of related transactions;

then this option shall terminate upon the consummation of such Corporate Transaction and cease to be exercisable, unless it is expressly assumed by the successor corporation or parent thereof. The Company shall provide Optionee with at least thirty (30) days prior written notice of the specified date for the Corporate Transaction. The Company can give no assurance that the options shall be assumed by the successor corporation or its parent company and it may occur that some options outstanding under the Plan will be assumed while these options are terminated.

(b) In the event of a Corporate Transaction, the Company may, at its option, accelerate the vesting schedule contained in Section 5 hereof, but shall have no obligation to do so. The Company shall have the right to accelerate other options outstanding under the Plan or any other plan, even if it does not accelerate the options of Optionee hereunder.

(c) This Agreement shall not in any way affect the right of the Company to make changes in its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

9. Privilege of Stock Ownership. The holder of this option shall not have any of the rights of a shareholder with respect to the Optioned Shares until such individual shall have exercised the option and paid the option price in accordance with this Agreement.

10. Manner of Exercising Option.

(a) In order to exercise this option with respect to all or any part of the Optioned Shares for which this option is at the time exercisable, Optionee (or in the case of exercise after Optionee's death, Optionee's executor, administrator, heir or legatee, as the case may be) must take the following actions:

(i) Execute and deliver to the Secretary of the Company a stock purchase agreement in substantially the form of Exhibit "E" to this Agreement (the "Stock Purchase Agreement");

(ii) Pay the aggregate option price for the purchased shares in cash, unless another form of consideration is permitted as described in Exhibit D, if any, attached hereto or by the Board at the time of exercise.

(b) This option shall be deemed to have been exercised with respect to the number of Optioned Shares specified in the Purchase Agreement at such time as the executed Purchase Agreement for such shares shall have been delivered to the Company and all other conditions of this Section have been fulfilled. Payment of the option price shall immediately become due and shall accompany the Purchase Agreement. As soon thereafter as practical, the Company shall mail or deliver to Optionee or to the other person or persons exercising this option a certificate or certificates representing the shares so purchased and paid for.

11. Compliance With Laws and Regulations.

(a) The exercise of this option and the issuance of Optioned Shares upon such exercise shall be subject to compliance by the Company and Optionee with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange on which shares of the Company's Common Stock may be listed at the time of such exercise and issuance.

(b) In connection with the exercise of this option, Optionee shall execute and deliver to the Company such representations in writing as may be requested by the Company in order for it to comply with the applicable requirements of federal and state securities laws.

12. Successors and Assigns. Except to the extent otherwise provided in Paragraph 4 or 8(a), the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of Optionee and the successors and assigns of the Company.

13. Liability of Company.

(a) If the Optioned Shares covered by this Agreement exceed, as of the Grant Date, the number of shares of Common Stock which may without shareholder approval be issued under the Plan, then this option shall be void with respect to such excess shares unless shareholder approval of an amendment sufficiently increasing the number of shares of Common Stock issuable under the Plan is obtained in accordance with the provisions of Section 18 of the Plan.

(b) The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance and sale of any Common Stock pursuant to this option without the imposition of requirements unacceptable to the Company in its reasonable discretion shall relieve the Company of any liability with respect to the nonissuance or sale of the Common Stock as to which such approval shall not have been obtained. The Company, however, shall use its best efforts to obtain all such approvals.

14. No Employment Contract. Except to the extent the terms of any written employment contract between the Company and Optionee may expressly provide otherwise, the Company (or any parent or subsidiary corporation of the Company employing Optionee) shall be under no obligation to continue the employment of Optionee for any period of specific duration and may terminate Optionee's status as an Employee at any time, with or without cause.

15. Notices. Any notice required to be given or delivered to the Company under the terms of this Agreement shall be in writing and addressed to the Company in care of its Secretary at its corporate offices. Any notice required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the address indicated below Optionee's signature line on this Agreement. All notices shall be deemed to have been given or delivered upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.

16. Withholding. Optionee acknowledges that, upon any exercise of this option, the Company shall have the right to require Optionee topay to the Company an amount equal to the amount the Company is required to withhold as a result of such exercise for federal and state income tax purposes.

17. Loans or Guarantees. The Company may, in its absolute discretion and without any obligation to do so, assist Optionee in the exercise of this option by (i) authorizing the extension of a loan to Optionee from the Company, (ii) permitting Optionee to pay the option price for the purchased Common Stock in installments over a period of years, or (iii) authorizing a guarantee by the Company of a third party loan to Optionee. The terms of any loan, installment method of payment or guarantee (including the interest rate, the Collateral requirements and terms of repayment) shall be established by the Company in its sole discretion.

18. Construction. This Agreement and the option evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the express terms and provisions of the Plan. All decisions of the Company with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in this option.

19. Governing Law. The interpretation, performance, and enforcement of this Agreement shall be governed by the laws of the State of Nevada.

20. REPURCHASE R1GHTS. OPTIONEE HEREBY AGREES THAT ALL OPTIONED SHARES ACQUIRED UPON THE EXERCISE OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF THE COMPANY AND ITS ASSIGNS TO REPURCHASE SUCH SHARES IN ACCORDANCE WITH THE TERMS AND CONDITIONS SPECIFIED IN THE PURCHASE AGREEMENT,

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in duplicate on its behalf by its duly authorized officer and Optionee has also executed this Agreement in duplicate, all as of the day and year indicated above.

American Alliance Corporation a Nevada corporation

By: ____________________________ Title:

EXHIBIT "D"

PLAN B

Other Forms of Acceptable Consideration

[If no forms are listed hereon, cash shall be the only acceptable form of consideration for the exercise of the options.]

EXHIBIT "E"
STOCK PURCHASE AGREEMENT

This Agreement is made as of this ____ day of ______, 199__, by and among American Alliance Corporation, a Nevada corporation ("Corporation"), and ________, the holder of a stock option under the Corporation's 1997 Stock Option Plan ("Optionee").

1. EXERCISE OF OPTION

1.1 Exercise. Optionee hereby purchases shares of Class A Common Stock of the Corporation ("Purchased Shares") pursuant to that certain option ("Option") granted Optionee on April 24th, 199__, under the Corporation's 1997 Stock Option Plan ("Plan") to purchase up to ______ shares of the Corporation's Common Stock at an option price of $___ per share ("Option Price").

1.2 Payment. Concurrently with the delivery of this Agreement to the Secretary of the Corporation, Optionee shall pay the Option Price for the Purchased Shares in accordance with the provisions of the agreement between the Corporation and Optionee evidencing the Option ("Option Agreement") and shall deliver whatever additional documents may be required by the Option Agreement as a condition for exercise.

2. INVESTMENT REPRESENTATIONS

2.1 Investment Intent. Optionee hereby warrants and represents that Optionee is acquiring the Purchased Shares for Optionee's own account and not with a view to their resale or distribution and that Optionee is prepared to hold the Purchased Shares for an indefinite period and has no present intention to sell, distribute or grant any participating interests in the Purchase Shares. Optionee hereby acknowledges the fact that the Purchased Shares have not been registered under the Securities Act of 1933, as amended (the "1933 Act"), and that the Corporation is issuing the Purchased Shares to Optionee in reliance on the representations made by Optionee herein.

2.2 Restricted Securities. Optionee hereby confirms that Optionee has been informed that the Purchased Shares may not be resold or transferred unless the Purchased Shares are first registered under the Federal securities laws or unless an exemption from such registration is available. Accordingly, Optionee hereby acknowledges that Optionee is prepared to hold the Purchased Shares for an indefinite period and that Optionee is aware that Rule 144 of the Securities and Exchange Commission issued under the 1933 Act is not presently available to exempt the sale of the Purchased Shares from the registration requirements of the 1933 Act. Should Rule 144 subsequently become available, Optionee is aware that any sale of the Purchased Shares effected pursuant to the Rule may, depending upon the status of Optionee as an affiliate" or "non-affiliate" under the Rule, be made only in limited amounts in accordance with the provisions of the Rule, and that in no event may any Purchased Shares be sold pursuant to the Rule until Optionee has held the Purchased Shares for the requisite holding period following payment in cash of the Option Price for the Purchased Shares.

2.3 Optionee Knowledge. Optionee represents and warrants that he or she has a preexisting business or personal relationship with the officers and directors of the Corporation, that he or she is aware of the business affairs and financial condition of the Corporation and that he or she has such knowledge and experience in business and financial matters with respect to companies in business similar to the Corporation to enable him or her to evaluate the risks of the prospective investment and to make an informed investment decision with respect thereto. Optionee further represents and warrants that the Corporation has made available to Optionee the opportunity to ask questions and receive answers from the Corporation concerning the terms and conditions of the issuance of the Purchased Shares and that he or she could be reasonably assumed to have the capacity to protect his or her own interests in connection with such investment.

2.4 Speculative Investment. Optionee represents and warrants that he or she realizes that his or her purchase of the Purchased Shares will be a speculative investment and that he or she is able, without impairing his or her financial condition, to hold the Purchased Shares for an indefinite period of time and to suffer a complete loss of his or her investment. Optionee represents and warrants that he or she is aware and fully understands the implications of the restrictions upon transfer imposed by the Plan and therefore on the Purchased Shares.

2.5 Restrictive Legends. In order to reflect the restrictions on disposition of the Purchased Shares, the stock certificates for the Purchased Shares will be endorsed with the following legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, ASSIGNED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION THEREUNDER OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.

3. MISCELLANEOUS PROVISIONS

3.1 Optionee Undertaking. Optionee hereby agrees to take whatever additional action and execute whatever additional documents the Corporation may in its judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on either the Optionee or the Purchased Shares pursuant to the express provisions of this Agreement.

3.2 Agreement Is Entire Contract. This Agreement constitutes the entire contract between the parties hereto with regard to the subject matter hereof. This Agreement is made pursuant to the provisions of the Plan and shall in all respects be construed in conformity with the express terms and provisions of the Plan.

3.3 Governing Law. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

3.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

3.5 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and the Optionee and the Optionee's legal representatives, heirs, legatees, distributees, assigns and transfer by operation of law, whether or not any such person shall have become a party to this Agreement and have agreed in writing to join herein and be bound by the terms and conditions hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first indicated above.

American Alliance Corporation a Nevada corporation

Title:

Optionee

Address:

1998 INCENTIVE STOCK OPTION PLAN AND 1998
NONSTATUTORY STOCK OPTION PLAN

1. Names and Purposes of the Plans. This Plan document is intended to implement and govern two separate Stock Option Plans of American Alliance Corporation, a Nevada corporation (the "Company"): the 1998 Incentive Stock Option Plan ("Plan A") and the 1998 Nonstatutory Stock Option Plan ("Plan B") (collectively the "Plans"). Plan A provides for the granting of options that are intended to qualify as incentive stock options ("Incentive Stock Options") within the meaning of Section 422(b) of the Internal Revenue Code, as amended. Plan B provides for the granting of options that are not intended to so qualify. Unless specified otherwise, all the provisions of this Plan document relate equally to both Plan A and Plan B, which Plans are condensed into one Plan document solely for purposes of administrative convenience and are not intended to constitute tandem plans. The purposes of the Plans are (a) to attract and retain the best available people for positions of substantial responsibility, and (b) to provide additional incentive to the Employees of the Company (and its future parents and subsidiaries, if any) and to promote the success of the Company's business.

2. Definitions. For purposes of the Plans, the following terms will have the respective meanings indicated:

(a) "Board" shall mean the Board of Directors of the Company;

(b) "Code" shall mean the Internal Revenue Code of 1986, as amended;

(c) "Common Stock" shall mean the Class A common stock of the Company;

(d) "Company" shall mean American Alliance Corporation, a Nevada corporation;

(e) "Committee" shall mean the committee appointed by the Board in accordance with Paragraph 3(a) of this Plan document, if one is appointed;

(f) "Employee" shall mean any person, including an officer or director, who is an employee (within the meaning of Section 422 of the Code) of the Company, any parent, any subsidiary or any successors to any of the foregoing;

(g) "Incentive Option" shall mean an incentive stock option as defined in Section 422(b) of the Code;

(h) "Non-Statutory Option" shall mean an option which does not qualify as an Incentive Option;

(i) "Option" shall mean a stock option granted pursuant to the Plan, whether an Incentive Option or a Non-Statutory Option;

(j) "Option Agreement" shall mean an agreement substantially in the form attached hereto as Exhibit A or the form attached hereto as Exhibit B, or such other form or forms as the Board (subject to the terms and conditions of the Plans) may from time to time approve, evidencing an Option;

(k) "Option Grant Date" shall mean the date on which an Option is granted by the Board;

(1) "Optioned Stock" shall mean the Common Stock subject to an Option granted pursuant to a Plan;

(m) "Optionee" shall mean an Employee or other Eligible Person who receives an Option;

(n) "Outstanding Incentive Option" shall mean any Incentive Stock Option which has not yet been exercised in full or has not yet expired by lapse of time;

(o) "Parent" shall mean a "parent corporation" as defined in Section 424(e) of the Code;

(p) "Plan A" shall mean the 1998 Incentive Stock Option Plan;

(q) "Plan B" shall mean the 1998 Non-Statutory Stock Option Plan;

(r) "Predecessor Corporation" shall mean a corporation which is a party to a transaction described in Code Section 424(a) (or which would be so described if a substitution or assumption under such section had been effected) with the Company, a Parent, a Subsidiary or a predecessor corporation of any such corporations.

(s)"Share" shall mean a share of the Common Stock, as adjusted in accordance with Section 13 of this Plan document;

(t) "Stock Purchase Agreement" shall mean an agreement substantially in the form attached hereto as Exhibit D or such other form or forms as the Board (subject to the terms and conditions of this Plan) may from time to time approve, which is to be executed as a condition of purchasing Optioned Stock upon exercise of an Option as provided in a Plan; and,

(u) "Subsidiary" shall mean a subsidiary corporation as defined in
Section 424(f) of the Code.

3. Administration of Plan.

(a) Procedure. The Plans shall be administered by the Board.

The Board may appoint a Committee consisting of not less than two (2) members of the Board to administer one or both of the Plans on behalf of the Board, subject to such terms and conditions as the Board may prescribe. Once appointed, the Committee shall continue to serve until otherwise directed by the Board. From time to time, the Board may increase the size of the Committee and appoint additional members thereof, remove members of the Committee, and thereafter, directly administer the Plans. Any references herein to the Board shall refer to the Committee, if one is appointed, to the extent of the Committee's authority.

(b) Limitations on Members of Board. Members of the Board who are either eligible for options or have been granted Options may vote on any matters affecting the administration of the Plans or the grant of any Options pursuant to the Plans; except that no such member shall act in connection with an Option to himself or herself, but any such member may be counted in determining the existence of a quorum at any meeting of the Board during which action is taken with respect to Options of such member.

(c) Powers of the Board. Subject to the provisions of the Plan the Board shall have the authority, in its discretion, to make all determinations necessary or advisable for the administration of the Plans, including without limitation:

(i) to determine, upon review of relevant information, the then fair market value per share of the Common Stock;

(ii) to determine the exercise price of the Options to be granted, subject to the provisions of Paragraph 8 of this Plan document;

(iii)to determine the Employees to whom, and the time or times at which, Options shall be granted, and the number of shares of Optioned Stock to be represented by each Option;

(iv) to determine whether Options granted hereunder shall be granted under Plan A as Incentive Options or Plan B as Non-statutory Options;

(v) to prescribe, amend and rescind rules and regulations relating to the Plans;

(vi) to determine the terms and provisions of each Option granted under the Plans (which need not be identical) and to modify or amend each Option (with or without consent of the Optionee, if necessary);

(vii) to accelerate the exercise date of any Option;

(viii) to construe and interpret the Plans, the Option Agreements, Stock Purchase Agreements and any other agreements provided for hereunder; and

(ix) to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Option previously granted by the Board or to take such other actions as may be necessary or advisable with respect to the Company's rights pursuant to the Option, Stock Purchase Agreement or other agreement approved hereunder.

(d) Effect of the Board's or Committee's Decision. All decisions, determinations and interpretations of the Board or the Committee shall be final and binding on all Optionees and any other proper holders of any Options granted under the Plan.

4. Stock Subject to the Plan. Subject to the provisions of Section 13 of this Plan document, the maximum aggregate number of shares which may be optioned under these Plans is 1,750,000 shares of authorized Common Stock. This constitutes an absolute cumulative limitation on the total number of shares that may be optioned under Plan A and Plan B and, therefore, at any particular date the maximum aggregate number of shares which may be optioned under Plan A is equal to 1,750,000 minus the number of shares previously optioned under Plan A and Plan B; and the maximum aggregate number of shares which may be optioned under Plan B is equal to 1,750,000 minus the number of shares which have been previously optioned under Plan A or Plan B. All shares to be optioned under either Plan A or Plan B may be either authorized but unissued shares or shares held in the treasury. Shares of Common Stock that (a) are repurchased by the Company after issuance hereunder pursuant to the exercise of an Option or (b) are not purchased by the Optionee prior to the expiration of the applicable Option Period (as described hereinbelow) shall again become available to be covered by Options to be issued hereunder and shall not, as of the effective date of such repurchase or expiration, be counted as having been previously optioned for purposes of the above-described maximum number of shares which may be optioned hereunder.

5. Eligibility. Options under Plan A may be granted to any Employee who is designated by the Board in its discretion. NonEmployees, including directors of the Company or any Parent or Subsidiary, who are not regular employees of the Company, are not eligible to receive Options under Plan A. Options under Plan B may be granted to any Employee, any Non-Employee director of Company or any Parent or Subsidiary, and any consultant or independent contractors who provide valuable services to the Company (or its Parent or Subsidiary), all as designated by the Board in its discretion. An Optionee who has been granted an Option may, if otherwise eligible, be granted an additional Option or Options. Options may be granted to one or more persons without being granted to other eligible persons, as the Board may deem fit.

6. Term of the Plan. Plan A shall become effective immediately upon the earlier to occur of its adoption by the Board or its approval by vote of a majority of the outstanding shares of the Company entitled to vote on the adoption of such Plan. Plan B shall become effective immediately upon its adoption by the Board. Each Plan shall continue in effect until December 31, 2008 unless sooner terminated under Sections 15 or 18 of this Plan document. No Option may be granted under a Plan after its expiration.

7. Option Period. Each Option granted pursuant to either Plan shall be evidenced by an Option Agreement. Each Option shall expire and all rights thereunder shall end at the expiration of such period (which shall in no event be more than ten
(10) years) after the Option Grant Date as shall be fixed by the Board, subject in all cases to earlier expiration as provided in Section 11 of this Plan document. Notwithstanding the foregoing, the term of each Incentive Option granted to an Employee who, at the time the Incentive Option is granted, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary (determined as required by the Code as applied to Incentive Options) shall not be more than five (5) years from the Option Grant Date.

8. Option Price and Consideration.

(a) Price. The per share Option price for the Shares to be issued pursuant to an Option granted under either Plan shall be such price as is determined by the Board in its sole discretion. Notwithstanding the foregoing, with respect to Incentive Options granted under Plan A: (i) such price shall in no event be less than one hundred percent (100%) of the fair market value per Share of the Company's Common Stock on the Option Grant Date, as determined by the Board; and (ii) in the case of an Incentive Option granted to an Employee who, at the time the Option is granted, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent, Subsidiary or Predecessor Corporation (determined as required by the Code as applied to Incentive Options), the per share Option price shall be at least one hundred ten percent (110%) of the fair market value as of the Option Grant Date, as determined by the Board. The fair market value shall be determined by the Board in its sole discretion, exercised in good faith; provided, however, that where there is a public market for the Common Stock, the fair market value per share shall be the mean of the reported bid and asked price for the Common Stock on the date of the grant, or, in the event the Common Stock is listed on a stock exchange, the fair market value per share shall be the closing price on the exchange as of the date of grant of the Option.

(b) Form of Consideration. The form of consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Board and may consist of cash, promissory notes, or the surrender of shares of Common Stock having a fair market value on the date of surrender equal to the purchase price of the Shares as to which said Option shall be exercised, a combination thereof, or such other consideration and method of payment for the issuance of Shares as is permitted under applicable law.

(c) Promissory Notes. If the consideration for the exercise of an Option is a promissory note, such note shall be a full recourse promissory note executed by the Optionee. If the option is an Incentive Option under Plan A, such note shall bear interest at a per annum rate which is not less than the greater of (i) the applicable "test rate" described in Treasury Regs. Section 1.4831(d) in effect on the date of exercise or (ii) a fair market interest rate, as determined by the Board in its good faith discretion. If a promissory note is given as consideration, the Company may retain the Shares purchased upon exercise of the Option in escrow as security for payment of the promissory note.

(d) Surrendered Common Stock. If the consideration for the exercise of an Option is the surrender of previously acquired and owned shares of common stock of the Company, the Optionee will be required to make representations and warranties satisfactory to the Company regarding the Optionee's title to the shares used to effect the purchase, including without limitation, representations and warranties that the Optionee has good and marketable title to such shares free and clear of any and all liens, encumbrances, charges, equities, claims, security interests, options or restrictions and has full power to deliver such shares without obtaining the consent or approval of any person or governmental authority other than those which have already given consent or approval in a form satisfactory to the Company. The value of the shares used to effect the purchase shall be the fair market value of those shares as determined by the Board in its sole discretion, exercised in good faith.

9. Limit on Value of Optioned Stock Issued Under Plan A. The aggregate fair market value (determined as of the Option Grant Date of each Option) of the Shares with respect to which Incentive Options are exercisable for the first time by the Optionee during any calendar year under Plan A and all other incentive stock option plans of the Company, any Parent or Subsidiary, or any Predecessor Corporation of any such corporation shall not exceed One Hundred Thousand Dollars ($100,000.00), as determined pursuant to Section 422(d) of the Code.

10. Exercise of Option.

(a) General Terms. Any Option granted hereunder shall be exercisable at such times and under such conditions as may be determined by the Board which conditions may include performance criteria with respect to the Company and/or the Optionee or provisions for vesting over a period of time conditioned upon continued employment and shall include the contemporaneous execution of a Stock Purchase Agreement in a form approved by the Board and as shall be permissible under the terms of the Plan. In all events, in order to exercise an Option hereunder the Optionee shall execute a Stock Purchase Agreement in a form approved by the Board and shall deliver the required (or permitted) exercise consideration to the Company. As a condition to the exercise of an Option, the Board may require the Optionee pursuant to the Option Agreement to agree to restrictions on the sale or other transfer of ownership of the Common Stock acquired by an Optionee or to sell such Shares to the Company upon termination of employment.

(b) Partial Exercise. An Option may be exercised in accordance with the provisions of either Plan as to all or any portion of the Shares then exercisable under an Option, from time to time during the term of the Option. An Option may not be exercised for a fraction of a Share.

(c) Time of Exercise. An Option shall be deemed to be exercised when the Company has received at its principal business office: (i) written notice of such exercise in accordance with the terms of the Option Agreement and given by the person entitled to exercise the Option; (ii) full payment for the Shares with respect to which the Option is exercised; (iii) the executed Stock Purchase Agreement if required; and (iv) any other representations or agreements required by the terms of this Plan or the Option Agreement. Full payment may consist of such consideration as is authorized by the Board as provided hereunder.

(d) No Rights as Shareholder Until Exercise. Until this Option is properly exercised hereunder and the Company receives full payment for the Shares with respect to which the Option is exercised, no right to receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Option is properly exercised and payment in full is received, except as provided in Section 13 of this Plan document.

(e) Issuance of Share Certificates. As soon as practicable after any proper exercise of an Option in accordance with the provisions of this Plan document and payment in full for the exercised Shares, the Company shall, without transfer or issue tax to the Optionee, deliver to the Optionee at the principal business office of the Company, or such other place as shall be mutually acceptable, a certificate or certificates representing the Shares of Common Stock as to which the Option has been exercised. The time of issuance and delivery of the certificates) representing the Shares of Common Stock may be postponed by the Company for such period as may be required for it, with reasonable diligence, to comply with any applicable listing requirements of any national or regional securities exchange and any law or regulation applicable to the issuance and delivery of such Shares.

(f) Reduction of Shares Upon Exercise. Exercise of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

11. Termination of Employment.

(a) General. If an Optionee ceases to be an Employee for any reason then, except as provided in Paragraph 11(a) or 11(b) hereof, any Option of the Optionee, whether vested or non-vested, and if issued under Plan A or Plan B, shall terminate as of the date of termination of employment.

(b)Death or Disability. If Optionee dies or becomes disabled (within the meaning of Code Section 422 and the rules and regulations thereunder) then, within the earlier of thirty (30) days (or such other period of time not exceeding six (6) months as set forth in the Option Agreement) following the date of such death or disability and the time the Option expires by its terms, the Optionee or such person or persons to whm the Optionee's rights under the Option shall pass by the Optionee's will or by the laws of descent and distribution, may exercise the Option to the extent it was vested and exercisable on the date of death or disability.

12. Non-transferability of Options. The Options and any rights and privileges granted under any Option Agreement are not transferable by the Optionee, either voluntarily or by operation of law, otherwise than by will and the laws of descent and distribution and shall be exercisable during Optionee's lifetime only by Optionee.

13. Adjustments Upon Changes in Capitalization.

(a) Reorganizations, Recapitalization, Etc. If the outstanding shares of Common Stock of the Company are increased, decreased, changed into or exchanged for a different number or kind of shares or securities of the Company through reorganization, recapitalization, reclassification, stock dividend (but only on Common Stock), stock split, reverse stock split or other similar transaction, or, if any other increase or decrease occurs in the number of Shares of Common Stock of the Company without the receipt of consideration by the Company, then an appropriate and proportional adjustment shall be made in (i) the number and kind of shares of stock covered by each outstanding Option, (ii) the number and kind of shares of stock which have been authorized for issuance under the Plan but as to which no Options have yet been granted (or which have been returned to the Plan upon cancellation of an Option), and (iii) the exercise price per share of stock covered by each such outstanding Option. The granting of stock options or bonuses to Employees of the Company and the conversion of any convertible securities of the Company shall not be deemed to have been "effected without the receipt of consideration." Notwithstanding the foregoing, no adjustment need be made under this paragraph if, upon the advice of counsel, the Board determines that such adjustment may result in federal taxable income to the holders of Options or Common Stock or other classes of the Company's securities.

(b) Dissolution, Liquidation, Etc. Upon the dissolution or liquidation of the Company, or upon a reorganization, merger or consolidation of the Company with one or more corporations as a result of which the Company is not the surviving corporation, or upon a sale (or exchange through merger) of substantially all the property or more than fifty percent (50%) of the then outstanding stock of the Company to another corporation, the Plan shall terminate, and any Option theretofore granted hereunder shall terminate. Notwithstanding the foregoing, the Board may provide in writing in connection with, or in contemplation of, such transaction for any, all or none of the following alternatives (separately or in combination): (i) for all or a portion of the Options theretofore granted to become immediately exercisable; (ii) for the assumption by the successor corporation of the Options theretofore granted or the substitution by such corporation for such Options of new options covering the stock of the successor corporation, or a Parent or Subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; or (iii) for the continuance of the Plan by such successor corporation in which event the Plan and the Options theretofore granted shall continue in the manner and under the terms so provided.

(c) No Fractional Shares. No fractional shares of the Common Stock shall be issuable on account of any action under this Paragraph 13, and the aggregate number of shares into which Shares then covered by an Option, when changed as the result of such action, shall be reduced to the largest number of whole Shares resulting from such action. Notwithstanding the foregoing, the Board, in its sole discretion, may determine to issue scrip certificates, in respect to any fractional shares, which scrip certificates, in such event, shall be in a form and have such terms and conditions as the Board in its discretion shall prescribe.

(d) Binding Effect of Board Determinations. All adjustments under this Paragraph 13 shall be made by the Board, whose determination in that respect shall be final, binding and conclusive.

(e) No Other Adjustments. Except as expressly provided herein, no issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares of Common Stock subject to the Plan or any Options.

14. Amendment and Termination of the Plan.

(a) Amendment and Termination. The Board may at any time and from time to time suspend or terminate either Plan. The Board may also amend or revise either Plan from time to time in such respects as the Board may deem advisable, except that, without approval of the holders of the majority of the outstanding shares of the Company's Common Stock, no such revision or amendment shall amend Plan A or Plan B so as to:

(i) Increase the number of Shares subject to Plan A or Plan B other than in connection with an adjustment under Section 13 of this Plan document;

(ii) Permit the granting of Incentive Options to anyone other than as provided in Paragraph 5;

(iii) Remove the administration of Plan A or Plan B from the Board;

(iv) Extend the term of Plan A or Plan B beyond that provided in Paragraph 6 hereof;

(v) Extend the term of any Incentive Option beyond the maximum term set forth in Paragraph 7;

(vi) Permit the granting of Incentive Options which would not qualify as Incentive Stock Options; or (vii) Decrease the per share option price required with respect to Incentive Options under Paragraph 8(a) hereof.

(b) Effect of Termination. Except as otherwise provided in Section 13, without the written consent of the Optionee, any such termination of the Plan shall not affect Options already granted and such Options shall remain in full force and effect as if the Plan had not been terminated.

15. Conditions Upon Issuance of Shares. Options granted under either Plan are conditioned upon the Company obtaining any required permit, or exemption from the qualification or registration provisions of any applicable state securities law and other appropriate governmental agencies, authorizing the Company to issue such Options and Optioned Stock upon terms and conditions acceptable to the Company. Shares shall not be issued with respect to an Option granted under either Plan unless the exercise of such Option and the issuance and delivery of such shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, 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 be further subject to the approval of counsel for the Company with respect to such compliance. As a condition to the exercise of an Option, the Board may require the person exercising such Option to execute an agreement approved by the Board, and may require the person exercising such Option to make any representation and warranty to the Company as may, in the judgment of counsel to the Company, be required under applicable laws or regulations.

16. Reservation of Shares. During the term of the Plans, the Company will at all times reserve and keep available the number of Shares as shall be sufficient to satisfy the requirements of the Plans. During the term of the Plans, the Company will use its best efforts to seek to obtain from appropriate regulatory agencies any requisite authorization in order to issue and sell such number of Shares of its Common Stock as shall be sufficient to satisfy the requirements of the Plan. The inability of the Company to obtain from any such regulatory agency the requisite authorization(s) deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, or the inability of the Company to confirm to its satisfaction that any issuance and sale of any Shares hereunder will meet applicable legal requirements, shall relieve the Company of any liability in respect to the non-issuance or sale of such Shares as to which such requisite authority shall not have been obtained.

17. Taxes, Fees, Expenses and Withholding of Taxes.

(a) Issue and Transfer Taxes. The Company shall pay all original issue and transfer taxes (but not income taxes, if any) with respect to the grant of Options and the issue and transfer of Shares pursuant to the exercise of such Options, and all other fees and expenses necessarily incurred by the Company in connection therewith, and will use its best efforts to comply with all laws and regulations which, in the opinion of counsel for the Company, shall be applicable thereto.

(b) Withholding. The grant of Options hereunder and the issuance of Shares of Common Stock pursuant to the exercise of such Options are conditioned upon the Company's reservation of the right to withhold, in accordance with any applicable law, from any compensation payable to the Optionee any taxes required to be withheld by federal, state or local law as a result of the grant or exercise of such Option or the sale of the Shares issued upon exercise of the Option.

18. Shareholder Approval of Plan A and Plan B. Continuance of Plan A and Plan B and the effectiveness of any Option granted under such Plan shall be subject to approval by the holders of the outstanding voting stock of the Company in accordance with applicable law within twelve (12) months before or after the date Plan A and Plan B is adopted by the Board. Any Options granted under Plan A and Plan B prior to obtaining such shareholder approval shall be granted upon the conditions that the Options so granted: (i) shall not be exercisable prior to such approval and (ii) shall become null and void ab initio if such shareholder approval is not obtained.

19. Liability of Company. The Company, its Parent or any Subsidiary which is in existence or hereafter comes into existence, will not be liable to an Optionee granted an Incentive Option or other person if it is determined for any reason by the Internal Revenue Service or any court having jurisdiction that any Incentive Options granted hereunder are not Incentive Stock Options.

20. Notices. Any notice to be given to the Company pursuant to the provisions of the Plans shall be addressed to the Company in care of its Secretary at its principal office, and any notice to be given to an Optionee shall be delivered personally or addressed to such Optionee at the address given beneath such Optionee's signature on such Optionee's Stock Option Agreement, or at such other address as such Employee (or any transferee) upon the transfer of the Optioned Stock may hereafter designate in writing to the Company. Any such notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, registered or certified, and deposited, postage and registry or certification fee prepaid, in a post office or branch post office regularly maintained by the United States Postal Service. It shall be the obligation of each Optionee and each transferee holding Shares purchased upon exercise of an Option to provide the Secretary of the Company, by letter mailed as provided hereinabove, with written notice of such person's direct mailing address.

21. No Enlargement of Employee Rights. This Plan is purely voluntary on the part of the Company, and the continuance of the Plan shall not be deemed to constitute a contract between the Company and any Employee, or to be consideration for or a condition of the employment of any Employee. Nothing contained in this Plan shall be deemed to give any Employee the right to be retained in the employ of the Company, its Parent, Subsidiary or a successor corporation, or to interfere with the right of the Company or any such corporations to discharge or retire any Employee thereof at any time. No Employee shall have any right to or interest in Options authorized hereunder prior to the grant of such Option to such employee, and upon such grant he or she shall have only such rights and interests as are expressly provided herein, subject, however, to all applicable provisions of the Company's Certificate of Incorporation, as the same may be amended from time to time.

22. Legends on Certificates.

(a) Federal Law. Unless an appropriate registration statement is filed pursuant to the Federal Securities Act of 1933, as amended, with respect to the Options and Shares issuable under the Plans, each certificate representing such Options and Shares shall be endorsed on its face with a legend substantially as follows:

"THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."

(b) State Legend. If required by applicable state authorities each certificate representing the Options and Shares issuable under the Plans shall be endorsed on its face with any legends required by such authorization.

(c) Additional Legends. Each certificate representing the Options and Shares issuable under the Plans shall also contain legends as are set forth in any Stock Purchase Agreement or other agreement the execution of which is a condition to the exercise of an Option under this Plan. In addition, each Option Agreement shall be endorsed with a legend substantially as follows:

"THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAYBE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED INTO BETWEEN THE HOLDER OF THIS OPTION AND THE COMPANY AS A CONDITION TO EXERCISE OF THIS OPTION."

23. Availability of Plan. A copy of the Plans shall be delivered to the Secretary of the Company and shall be shown by him to any eligible person making reasonable inquiry concerning it.

24. Invalid Provisions. In the event that any provision of the Plans is found to be invalid or otherwise unenforceable under any applicable law, such invalidity or unenforceability shall not be construed as rendering any other provisions contained herein as invalid or unenforceable, and all such other provisions shall be given full force and effect to the same extent as though the invalid or unenforceable provision was not contained herein.

25. Applicable Law. These Plans shall be governed and construed in accordance with the laws of the State of Nevada applicable to contracts executed, and to be fully performed, in Nevada.

IN WITNESS WHEREOF, pursuant to the due authorization and adoption of these Plans by the Board on , 199__, the Company has caused these Plans to be duly executed by its duly authorized officers, effective as of , 199__.

American Alliance Corporation

a Nevada corporation

EXHIBIT "A"

PLAN A

THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED INTO BETWEEN OPTIONEE AND THE COMPANY AS A CONDITION TO EXERCISE OF THIS OPTION.

INCENTIVE STOCK OPTION AGREEMENT

AGREEMENT made as of the ___ day of _______, 1998, by and between American Alliance Corporation a Nevada corporation (hereinafter called "Company") and ____________ (hereinafter called "Optionee").

RECITALS

A. The Board of Directors of the Company has adopted the Company's 1998 Incentive Stock Option Plan (the "Plan") for the purpose of attracting and retaining the services of selected key employees (including officers and employee directors), who contribute to the financial success of the Company or its parent or subsidiary corporations.

B. Optionee is a key member of the Company or its parent or subsidiary corporations, and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Company's grant of a stock option to the Optionee.

C. The granted option is intended to be an incentive stock option ("Incentive Option") within the meaning of Section 422 of the Internal Revenue Code.

NOW, THEREFORE, it is hereby agreed as follows:

1. Grant of Option. Subject to and upon the terms and conditions set forth in this Agreement, there is hereby granted to Optionee, as of the date of this Agreement (the "Grant Date"), a stock option to purchase up to __________ shares of the Company's Common Stock (the "Optioned Shares") from time to time during the option term at the option price of $_____ per share.

2. Plan. The options granted hereunder are in all instances subject to the terms and conditions of the Plan. In the event of any conflict between this Agreement and the Plan, the provisions of the Plan shall control. Optionee acknowledges receipt of a copy of the Plan and hereby accepts this option subject to all of the terms and conditions of the Plan. Optionee agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under the Plan.

3. Option Term. This option shall have a maximum term of ___ (__) years measured from the Grant Date and shall accordingly expire at the close of business on ______, _____ (the "Expiration Date"), unless sooner terminated in accordance with Paragraph 7, 9(a) or 20.

4. Option Nontransferable; Exception. This option shall be neither transferable nor assignable by Optionee, either voluntarily or involuntarily, other than by will or by the laws of descent and distribution and may be exercised, during Optionee's lifetime, only by Optionee.

5. Condition Precedent to Exercise. This option may not be exercised in whole or in part at any time prior to the time the Company has satisfied the following condition precedent: ______________. In the event the foregoing condition precedent has not been satisfied prior to the Expiration Date or prior to this option's earlier termination in accordance with Paragraph 7, 9(a) or 20, then this option shall terminate and cease to be outstanding.

6. Dates of Exercise. This option may not be exercised in whole or in part at any time prior to the time it is approved by the Company's shareholders in accordance with Paragraph 20. Provided such shareholder approval is obtained and the condition precedent to exercise set forth in Paragraph 5 has been satisfied, this option shall become exercisable for 100% of the Optioned Shares one (1) year from the Grant Date, provided that in no event may options for more than One Hundred Thousand Dollars ($100,000) of Optioned Shares, calculated at the exercise price, become exercisable for the first time in any calendar year. Once exercisable, options shall remain so exercisable until the expiration or sooner termination of the option term under Paragraph 7 or Paragraph 9(a) of this Agreement. In no event, however, shall this option be exercisable for any fractional shares.

7. Accelerated Termination of Option Term. The option term specified in Paragraph 3 shall terminate (and this option shall cease to be exercisable) prior to the Expiration Date should one of the following provisions become applicable:

(i) Except as otherwise provided in subparagraphs (ii) and (iii) below, should Optionee cease to be an Employee of the Company for any reason at any time during the option term, any option of the Optionee, whether vested or non-vested, and if issued under Plan A, shall terminate as of the date of termination of employment.

(ii) Should Optionee die while this option is outstanding, then the executors or administrators of Optionee's estate or Optionee's heirs or legatees (as the case may be) shall have the right to exercise this option for the number of shares (if any) for which the option is exercisable on the date of the optionee's death. Such right shall lapse and this option shall cease to be exercisable upon the earlier of (i) six (6) months from the date of the optionee's death or (ii) the Expiration Date.

(iii) Should Optionee become permanently disabled and cease by reason thereof to be an Employee of the Company at any time during the option term, then Optionee shall have a period of six (6) months (commencing with the date of such cessation of Employee status) during which to exercise this option; provided, however, that in no event shall this option be exercisable at any time after the Expiration Date. Optionee shall be deemed to be permanently disabled if Optionee is, by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of not less than twelve (12) months, unable to perform his/her usual duties for the Company or its Parent or Subsidiary corporations. Upon the expiration of the limited period of exercisability or (if earlier) upon the Expiration Date, this option shall terminate and cease to be outstanding.

(iv) For purposes of this Paragraph 7 and for all other purposes under this Agreement, Optionee shall be deemed to be an Employee of the Company and to continue in the Company's employ for so long as Optionee remains an Employee of the Company or one or more of its parent or subsidiary corporations as such terms are defined in the Plan.

8. Adjustment in Option Shares.

(a) In the event any change is made to the Common Stock issuable under the Plan by reason of any stock split, stock dividend, combination of shares, or other change affecting the outstanding Common Stock as a class without receipt of consideration (as set forth in the Plan), then appropriate adjustments will be made to (i) the total number of Optioned Shares subject to this option and
(h) the option price payable per share in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder.

(b) If the Company is the surviving entity in any merger or other business combination, then this option, if outstanding under the Plan immediately after such merger or other business combination shall be appropriately adjusted to apply and pertain to the number and class of securities to which Optionee immediately prior to such merger of other business combination would have been entitled to receive in the consummation of such merger or other business combination.

9. Special Termination of Option.

(a) In the event of one or more of the following transactions (a "Corporate Transaction"):

(i) a merger or acquisition in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the State of the Company's incorporation;

(ii) the sale, transfer or other disposition of all or substantially all of the assets of the Company; or

(iii) any other corporate reorganization or business combination in which fifty percent (50%) or more of the Company's outstanding voting stock is transferred, or exchanged through merger, to different holders in a single transaction or a series of related transactions;

then this option shall terminate upon the consummation of such Corporate Transaction and cease to be exercisable, unless it is expressly assumed by the successor corporation or parent thereof. The Company shall provide Optionee with at least thirty (30) days prior written notice of the specified date for the Corporate Transaction. The Company can give no assurance that the options shall be assumed by the successor corporation or its parent company and it may occur that some options outstanding under the Plan will be assumed while these options are terminated.

(b) In the event of a Corporate Transaction, the Company may, at its option, accelerate the vesting schedule contained in Section 6 hereof, but shall have no obligation to do so. The Company shall have the right to accelerate other options outstanding under the Plan or any other plan, even if it does not accelerate the options of Optionee hereunder.

(c) This Agreement shall not in any way affect the right of the Company to make changes in its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

10. Privilege of Stock Ownership. The holder of this option shall not have any of the rights of a shareholder with respect to the Optioned Shares until such individual shall have exercised the option and paid the option price in accordance with this Agreement.

11. Manner of Exercising Option.

(a) In order to exercise this option with respect to all or any part of the Optioned Shares for which this option is at the time exercisable, Optionee (or in the case of exercise after Optionee's death, Optionee's executor, administrator, heir or legatee, as the case may be) must take the following actions:

(i) Execute and deliver to the Secretary of the Company a stock purchase agreement in substantially the form of Exhibit D to this Agreement (the "Purchase Agreement");

(ii) Pay the aggregate option price for the purchased shares in cash, unless another form of consideration is permitted as described in Exhibit C, if any, attached hereto or by the Board at the time of exercise.

(b) This option shall be deemed to have been exercised with respect to the number of Optioned Shares specified in the Purchase Agreement at such time as the executed Purchase Agreement for such shares shall have been delivered to the Company and all other conditions of this Section have been fulfilled. Payment of the option price shall immediately become due and shall accompany the Purchase Agreement. As soon thereafter as practical, the Company shall mail or deliver to Optionee or to the other person or persons exercising this option a certificate or certificates representing the shares so purchased and paid for.

12. Compliance with Laws and Regulations.

(a) The exercise of this option and the issuance of Optioned Shares upon such exercise shall be subject to compliance by the Company and Optionee with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange on which shares of the Company's Common Stock may be listed at the time of such exercise and issuance.

(b) In connection with the exercise of this option, Optionee shall execute and deliver to the Company such representations in writing as may be requested by the Company in order for it to comply with the applicable requirements of federal and state securities laws.

13. Successors and Assigns. Except to the extent otherwise provided in Paragraph 4 or 9(a), the provisions of this Agreement shall insure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of Optionee and the successors and assigns of the Company.

14. Liability of Company.

(a) If the Optioned Shares covered by this Agreement exceed, as of the Grant Date, the number of shares of Common Stock which may without shareholder approval be issued under the Plan, then this option shall be void with respect to such excess shares unless shareholder approval of an amendment sufficiently increasing the number of shares of Common Stock issuable under the Plan is obtained in accordance with the provisions of Section 18 of the Plan.

(b) The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance and sale of any Common Stock pursuant to this option without the imposition of requirements unacceptable to the Company in its reasonable discretion shall relieve the Company of any liability with respect to the non-issuance or sale of the Common Stock as to which such approval shall not have been obtained. The Company, however, shall use its best efforts to obtain all such approvals.

(c) Neither the Company nor any Parent, Subsidiary or successor corporation will have any liability to Optionee or any other person if it is determined for any reason that any options granted hereunder are not Incentive Stock Options.

15. No Employment Contract. Except to the extent the terms of any written employment contract between the Company and Optionee may expressly provide otherwise, the Company (or any parent or subsidiary corporation of the Company employing Optionee) shall be under no obligation to continue the employment of Optionee for any period of specific duration and may terminate Optionee's status as an Employee at any time, with or without cause.

16. Notices. Any notice required to be given or delivered to the Company under the terms of this Agreement shall be in writing and addressed to the Company in care of its Secretary at its corporate offices. Any notice required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the address indicated below Optionee's signature line on this Agreement. All notices shall be deemed to have been given or delivered upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.

17. Loans or Guarantees. The Company may, in its absolute discretion and without any obligation to do so, assist Optionee in the exercise of this option by (i) authorizing the extension of a loan to Optionee from the Company, (ii) permitting Optionee to pay the option price for the purchased Common Stock in installments over a period of years, or (iii) authorizing a guarantee by the Company of a third party loan to Optionee. The terms of any loan, installment method of payment or guarantee (including the interest rate, the Collateral requirements and terms of repayment) shall be established by the Company in its sole discretion.

18. Construction. This Agreement and the option evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the Plan. All decisions of the Company with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in this option.

19. Governing Law. The interpretation, performance, and enforcement of this Agreement shall be governed by the laws of the State of Nevada.

20. Shareholder Approval. The grant of this option is subject to approval of the Plan by the Company's shareholders within twelve (12) months after the adoption of the Plan by the Board of Directors, and this option may not be exercised in whole or in part until such shareholder approval is obtained. In the event that such shareholder approval is not obtained, then this option shall thereupon terminate and Optionee shall have no further rights to acquire any Optioned Shares hereunder.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in duplicate on its behalf by its duly authorized officer and Optionee has also executed this Agreement in duplicate, all as of the day and year indicated above.

American Alliance Corporation a Nevada corporation

Address:

EXHIBIT "B"

PLAN A

Other Forms of Acceptable Consideration

[If no forms are listed hereon, cash shall be the only acceptable form of consideration for the exercise of the options.]

EXHIBIT "C"

PLAN B

THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION TATEMENT RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED INTO BETWEEN OPTIONEE AND THE COMPANY AS A CONDITION TO EXERCISE OF THIS OPTION.

NON-STATUTORY STOCK OPTION AGREEMENT

AGREEMENT made as of the ____ day of ______, 199__, by and between American Alliance Corporation, a Nevada corporation (hereinafter called "Company"), and _______________ (hereinafter called "Optionee").

RECITALS

A. The Board of Directors of the Company has adopted the Company's 1998 Non-Statutory Stock Option Plan (the "Plan") for the purpose of attracting and retaining the services of selected key employees (including officers and employee directors) and others (collectively, "Eligible Persons"), who contribute to the financial success of the Company or its parent or subsidiary corporations.

B. Optionee is an Eligible Person and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Company's grant of a stock option to Optionee.

C. The granted option is not intended to be an incentive stock option ("Incentive Option") within the meaning of Section 422 of the Internal Revenue Code, but is rather a non-statutory option.

NOW, THEREFORE, it is hereby agreed as follows:

1. Grant of Option. Subject to and upon the terms and conditions set forth in this Agreement, there is hereby granted to Optionee, as of the date of this Agreement (the "Grant Date"), a stock option to purchase up to _________ shares of the Company's Common Stock (the "Optioned Shares") from time to time during the option term at the option price of $____ per share.

2. Plan. The options granted hereunder are in all instances subject to the terms and conditions of the Plan. In the event of any conflict between this Agreement and the Plan, the provisions of the Plan shall control. Optionee acknowledges receipt of a copy of the Plan and hereby accepts this option subject to all of the terms and conditions of the Plan. Optionee agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under the Plan.

3. Option Term. This option shall have a maximum term of years measured from the Grant Date and shall accordingly expire at the close of business on _____ ____ , 199__ (the "Expiration Date"), unless sooner terminated in accordance with Paragraph 6 or 8(a).

4. Option Nontransferable; Exception. This option shall be neither transferable nor assignable by Optionee, either voluntarily or involuntarily, other than by will or by the laws of descent and distribution and may be exercised, during Optionee's lifetime, only by Optionee.

5. Dates of Exercise. This option shall be exercisable as follows: _________. Once exercisable, options shall remain so exercisable until the expiration or sooner termination of the option term under Paragraph 6 or Paragraph 8(a) of this Agreement. In no event, however, shall this option be exercisable for any fractional shares.

6. Accelerated Termination of Option Term. The option term specified in Paragraph 3 shall terminate (and this option shall cease to be exercisable) prior to the Expiration Date should one of the following provisions become applicable:

(i) (i) Except as otherwise provided in subparagraphs (ii) and (iii) below, should Optionee cease to be an Employee of the Company for any reason at any time during the option term, any option of the Optionee, whether vested or non-vested, and if issued under Plan B, shall terminate as of the date of termination of employment.

(ii) Should Optionee die while this option is outstanding, then the executors or administrators of Optionee's estate or Optionee's heirs or legatees (as the case may be) shall have the right to exercise this option for the number of shares (if any) for which the option is exercisable on the date of the optionee's death. Such right shall lapse and this option shall cease to be exercisable upon the earlier of (i) six (6) months from the date of the optionee's death or (ii) the Expiration Date.

(iii) Should Optionee become permanently disabled and cease by reason thereof to be an Employee of the Company at any time during the option term, then Optionee shall have a period of six (6) months (commencing with the date of such cessation of Employee status) during which to exercise this option; provided, however, that in no event shall this option be exercisable at any time after the Expiration Date. Optionee shall be deemed to be permanently disabled if Optionee is, by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of not less than twelve (12) months, unable to perform his/her usual duties for the Company or its Parent or Subsidiary corporations. Upon the expiration of the limited period of exercisability or (if earlier) upon the Expiration Date, this option shall terminate and cease to be outstanding.

(iv) For purposes of this Paragraph 6 and for all other purposes under this Agreement, if Optionee is an Employee, Optionee shall be deemed to be an Employee of the Company and to continue in the Company's employ for so long as Optionee remains an Employee of the Company or one or more of its parent or subsidiary corporations as such terms are defined in the Plan. For purposes of this Paragraph 6 and for all other purposes under this Agreement, if Optionee is not an Employee, but is eligible because Optionee is a director, consultant or contractor of Company or a parent or subsidiary corporation, Optionee shall be deemed to be an Eligible Person for so long as Optionee remains a director, consultant or contractor of the Company or one or more of its parent or subsidiary corporations as such terms are defined in the Plan.

7. Adjustment in Option Shares.

(a) In the event any change is made to the Common Stock issuable under the Plan by reason of any stock split, stock dividend, combination of shares, or other change affecting the outstanding Common Stock as a class without receipt of consideration (as set forth in the Plan), then appropriate adjustments will be made to (i) the total number of Optioned Shares subject to this option and
(ii) the option price payable per share in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder.

(b) If the Company is the surviving entity in any merger or other business combination, then this option, if outstanding under the Plan immediately after such merger or other business combination shall be appropriately adjusted to apply and pertain to the number and class of securities to which Optionee immediately prior to such merger or other business combination would have been entitled to receive in the consummation of such merger or other business combination.

8. Special Termination of Option.

(a) In the event of one or more of the following transactions (a "Corporate Transaction"):

(i) a merger or acquisition in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the State of the Company's incorporation;

(ii)the sale, transfer or other disposition of all or substantially all of the assets of the Company; or

(iii) any other corporate reorganization or business combination in which fifty percent (50%) or more of the Company's outstanding voting stock is transferred, or exchanged through merger, to different holders in a single transaction or a series of related transactions;

then this option shall terminate upon the consummation of such Corporate Transaction and cease to be exercisable, unless it is expressly assumed by the successor corporation or parent thereof. The Company shall provide Optionee with at least thirty (30) days prior written notice of the specified date for the Corporate Transaction. The Company can give no assurance that the options shall be assumed by the successor corporation or its parent company and it may occur that some options outstanding under the Plan will be assumed while these options are terminated.

(b) In the event of a Corporate Transaction, the Company may, at its option, accelerate the vesting schedule contained in Section 5 hereof, but shall have no obligation to do so. The Company shall have the right to accelerate other options outstanding under the Plan or any other plan, even if it does not accelerate the options of Optionee hereunder.

(c) This Agreement shall not in any way affect the right of the Company to make changes in its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

9. Privilege of Stock Ownership. The holder of this option shall not have any of the rights of a shareholder with respect to the Optioned Shares until such individual shall have exercised the option and paid the option price in accordance with this Agreement.

10. Manner of Exercising Option.

(a) In order to exercise this option with respect to all or any part of the Optioned Shares for which this option is at the time exercisable, Optionee (or in the case of exercise after Optionee's death, Optionee's executor, administrator, heir or legatee, as the case may be) must take the following actions:

(i) Execute and deliver to the Secretary of the Company a stock purchase agreement in substantially the form of Exhibit "E" to this Agreement (the "Stock Purchase Agreement");

(ii) Pay the aggregate option price for the purchased shares in cash, unless another form of consideration is permitted as described in Exhibit D, if any, attached hereto or by the Board at the time of exercise.

(b) This option shall be deemed to have been exercised with respect to the number of Optioned Shares specified in the Purchase Agreement at such time as the executed Purchase Agreement for such shares shall have been delivered to the Company and all other conditions of this Section have been fulfilled. Payment of the option price shall immediately become due and shall accompany the Purchase Agreement. As soon thereafter as practical, the Company shall mail or deliver to Optionee or to the other person or persons exercising this option a certificate or certificates representing the shares so purchased and paid for.

11. Compliance With Laws and Regulations.

(a) The exercise of this option and the issuance of Optioned Shares upon such exercise shall be subject to compliance by the Company and Optionee with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange on which shares of the Company's Common Stock may be listed at the time of such exercise and issuance.

(b) In connection with the exercise of this option, Optionee shall execute and deliver to the Company such representations in writing as may be requested by the Company in order for it to comply with the applicable requirements of federal and state securities laws.

12. Successors and Assigns. Except to the extent otherwise provided in Paragraph 4 or 8(a), the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of Optionee and the successors and assigns of the Company.

13. Liability of Company.

(a) If the Optioned Shares covered by this Agreement exceed, as of the Grant Date, the number of shares of Common Stock which may without shareholder approval be issued under the Plan, then this option shall be void with respect to such excess shares unless shareholder approval of an amendment sufficiently increasing the number of shares of Common Stock issuable under the Plan is obtained in accordance with the provisions of Section 18 of the Plan.

(b) The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance and sale of any Common Stock pursuant to this option without the imposition of requirements unacceptable to the Company in its reasonable discretion shall relieve the Company of any liability with respect to the nonissuance or sale of the Common Stock as to which such approval shall not have been obtained. The Company, however, shall use its best efforts to obtain all such approvals.

14. No Employment Contract. Except to the extent the terms of any written employment contract between the Company and Optionee may expressly provide otherwise, the Company (or any parent or subsidiary corporation of the Company employing Optionee) shall be under no obligation to continue the employment of Optionee for any period of specific duration and may terminate Optionee's status as an Employee at any time, with or without cause.

15. Notices. Any notice required to be given or delivered to the Company under the terms of this Agreement shall be in writing and addressed to the Company in care of its Secretary at its corporate offices. Any notice required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the address indicated below Optionee's signature line on this Agreement. All notices shall be deemed to have been given or delivered upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.

16. Withholding. Optionee acknowledges that, upon any exercise of this option, the Company shall have the right to require Optionee topay to the Company an amount equal to the amount the Company is required to withhold as a result of such exercise for federal and state income tax purposes.

17. Loans or Guarantees. The Company may, in its absolute discretion and without any obligation to do so, assist Optionee in the exercise of this option by (i) authorizing the extension of a loan to Optionee from the Company, (ii) permitting Optionee to pay the option price for the purchased Common Stock in installments over a period of years, or (iii) authorizing a guarantee by the Company of a third party loan to Optionee. The terms of any loan, installment method of payment or guarantee (including the interest rate, the Collateral requirements and terms of repayment) shall be established by the Company in its sole discretion.

18. Construction. This Agreement and the option evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the express terms and provisions of the Plan. All decisions of the Company with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in this option.

19. Governing Law. The interpretation, performance, and enforcement of this Agreement shall be governed by the laws of the State of Nevada.

20. REPURCHASE R1GHTS. OPTIONEE HEREBY AGREES THAT ALL OPTIONED SHARES ACQUIRED UPON THE EXERCISE OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF THE COMPANY AND ITS ASSIGNS TO REPURCHASE SUCH SHARES IN ACCORDANCE WITH THE TERMS AND CONDITIONS SPECIFIED IN THE PURCHASE AGREEMENT,

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in duplicate on its behalf by its duly authorized officer and Optionee has also executed this Agreement in duplicate, all as of the day and year indicated above.

American Alliance Corporation
a Nevada corporation

EXHIBIT "D"

PLAN B

Other Forms of Acceptable Consideration

[If no forms are listed hereon, cash shall be the only acceptable form of consideration for the exercise of the options.]

EXHIBIT "E"
STOCK PURCHASE AGREEMENT

This Agreement is made as of this ____ day of ______, 199__, by and among American Alliance Corporation, a Nevada corporation ("Corporation"), and ________, the holder of a stock option under the Corporation's 1998 Stock Option Plan ("Optionee").

1. EXERCISE OF OPTION

1.1 Exercise. Optionee hereby purchases shares of Class A Common Stock of the Corporation ("Purchased Shares") pursuant to that certain option ("Option") granted Optionee on ______, 199__, under the Corporation's 1998 Stock Option Plan ("Plan") to purchase up to ________ shares of the Corporation's Common Stock at an option price of $_____ per share ("Option Price").

1.2 Payment. Concurrently with the delivery of this Agreement to the Secretary of the Corporation, Optionee shall pay the Option Price for the Purchased Shares in accordance with the provisions of the agreement between the Corporation and Optionee evidencing the Option ("Option Agreement") and shall deliver whatever additional documents may be required by the Option Agreement as a condition for exercise.

2. INVESTMENT REPRESENTATIONS

2.1 Investment Intent. Optionee hereby warrants and represents that Optionee is acquiring the Purchased Shares for Optionee's own account and not with a view to their resale or distribution and that Optionee is prepared to hold the Purchased Shares for an indefinite period and has no present intention to sell, distribute or grant any participating interests in the Purchase Shares. Optionee hereby acknowledges the fact that the Purchased Shares have not been registered under the Securities Act of 1933, as amended (the "1933 Act"), and that the Corporation is issuing the Purchased Shares to Optionee in reliance on the representations made by Optionee herein.

2.2 Restricted Securities. Optionee hereby confirms that Optionee has been informed that the Purchased Shares may not be resold or transferred unless the Purchased Shares are first registered under the Federal securities laws or unless an exemption from such registration is available. Accordingly, Optionee hereby acknowledges that Optionee is prepared to hold the Purchased Shares for an indefinite period and that Optionee is aware that Rule 144 of the Securities and Exchange Commission issued under the 1933 Act is not presently available to exempt the sale of the Purchased Shares from the registration requirements of the 1933 Act. Should Rule 144 subsequently become available, Optionee is aware that any sale of the Purchased Shares effected pursuant to the Rule may, depending upon the status of Optionee as an affiliate" or "non-affiliate" under the Rule, be made only in limited amounts in accordance with the provisions of the Rule, and that in no event may any Purchased Shares be sold pursuant to the Rule until Optionee has held the Purchased Shares for the requisite holding period following payment in cash of the Option Price for the Purchased Shares.

2.3 Optionee Knowledge. Optionee represents and warrants that he or she has a preexisting business or personal relationship with the officers and directors of the Corporation, that he or she is aware of the business affairs and financial condition of the Corporation and that he or she has such knowledge and experience in business and financial matters with respect to companies in business similar to the Corporation to enable him or her to evaluate the risks of the prospective investment and to make an informed investment decision with respect thereto. Optionee further represents and warrants that the Corporation has made available to Optionee the opportunity to ask questions and receive answers from the Corporation concerning the terms and conditions of the issuance of the Purchased Shares and that he or she could be reasonably assumed to have the capacity to protect his or her own interests in connection with such investment.

2.4 Speculative Investment. Optionee represents and warrants that he or she realizes that his or her purchase of the Purchased Shares will be a speculative investment and that he or she is able, without impairing his or her financial condition, to hold the Purchased Shares for an indefinite period of time and to suffer a complete loss of his or her investment. Optionee represents and warrants that he or she is aware and fully understands the implications of the restrictions upon transfer imposed by the Plan and therefore on the Purchased Shares.

2.5 Restrictive Legends. In order to reflect the restrictions on disposition of the Purchased Shares, the stock certificates for the Purchased Shares will be endorsed with the following legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, ASSIGNED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION THEREUNDER OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.

3. MISCELLANEOUS PROVISIONS

3.1 Optionee Undertaking. Optionee hereby agrees to take whatever additional action and execute whatever additional documents the Corporation may in its judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on either the Optionee or the Purchased Shares pursuant to the express provisions of this Agreement.

3.2 Agreement Is Entire Contract. This Agreement constitutes the entire contract between the parties hereto with regard to the subject matter hereof. This Agreement is made pursuant to the provisions of the Plan and shall in all respects be construed in conformity with the express terms and provisions of the Plan.

3.3 Governing Law. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

3.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

3.5 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and the Optionee and the Optionee's legal representatives, heirs, legatees, distributees, assigns and transfer by operation of law, whether or not any such person shall have become a party to this Agreement and have agreed in writing to join herein and be bound by the terms and conditions hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first indicated above.

American Alliance Corporation a Nevada corporation

Title:

Optionee

Address:

CONFIDENTIAL

NOT TO BE REPRODUCED OR DISTRIBUTED

Memorandum No._______

Name of Offeree : ___________________________

PRIVATE PLACEMENT MEMORANDUM

Far West Resources, Inc.
(a Utah Corporation) (" Company ")

4,000,000 Shares of Common Stock

$0.05 Per Share

Prinicipal Executive Offices

400 Burrard Street, Suite 1400
Vancouver, B.C. V6C-3G2

(604) 643-1777

The date of this Memorandum is April 23, 1996

Type of securities offered :        Shares of the Company's common stock,
                                    $0.001 par value

Number of Securities offered :      4,000,000 shares

Price per security :                $0.05 per share

Total proceeds : If all shares sold : $200,000.00

Is a commissioned selling agent selling the securities in this offering ?
[ ] Yes [ X ] No

If yes , what percent is commission of price to public ?

Is there other compensation to selling agent(s) ?
[ ] Yes [ X ] No

Is there a finder's fee or similar payment to any person ?
[ ] Yes [ X ] No

Is there an escrow of proceeds until minimum is obtained ?
[ ] Yes [ X ] No

Is this offering limited to members of a special group, such as employees of the

Company or individuals ?
                  [    ]  Yes                        [ X ]  No

Is transfer of the securities restricted ?

                  [    ]  Yes                        [ X ]  No

THIS OFFERING OF SECURITIES HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE. THE OFFERING WILL TERMINATE UPON THE EARLIER OF ALL OF THE SHARES OR JUNE 30th, 1996. THE COMPANY IS NOT REQUIRED TO SELL ANY MINIMUM NUMBER OF SHARES IN ORDER TO SELL SHARES IN THE OFFERING. THE COMPANY MAY, IN ITS DISCRETION, CONDUCT MULTIPLE CLOSINGS. ( SEE " DESCRIPTION OF THE OFFERING." )

THIS MEMORANDOM HAS BEEN PREPARED SOLELY FOR USE IN CONNECTION WITH THE PRIVATE PLCEMENT OF THE SHARES OFFERED HEREBY AND MAY NOT BE REPRODUCED OR USED FOR ANY OTHER PURPOSE . THE OFFEREE AGREES TO RETURN TO THE COMPANY THIS MEMORANDUM AND ALL ATTACHMENTS AND RELATED DOCUMENTATION IF THE OFFEREE DOES NOT SUBSCRIBE TO PURCHASE SHARES IN THE OFFERING.

THESE SECURITIES ARE BEING OFFERED ONLY TO INVESTORS WHO THE OFFEROR BELIEVES HAVE THE QUALIFICATIONS NECESSARY TO PERMIT THE SECURITIES TO BE OFFERED AND SOLD UNDER APPLICABLE EXEMPTIONS FROM REGISTRATION UNDER THE ACT AND QUALIFICATION UNDER APPLICABLE STATE STATUTES. THE OFFEROR WILL BE THE SOLE JUGDE OF WHETHER AN INVESTOR POSSESSES SUCH QUALIFICATIONS. NOTWITHSTANDING DELIVERY OF THIS MEMORANDUM AND ASSOCIATED DOCUMENTATION , THE OFFEROR DOES NOT INTEND TO EXTEND AN OFFER TO SELL OR TO SOLICIT AN OFFER TO BUY THESE SECURITIES UNTIL THE OFFEROR DETERMINES THAT THE OFFEREE IS QUALIFIED AND COMMUNICATES SUCH DETERMINATION TO INVESTORS IN WRITING. THE SHARES ARE BEING OFFERED IN A PRIVATE PLACEMENT TO A LIMITED NUMBER OF INVESTORS.THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT PERMITTED UNDER APPLICABLE LAW OR ANY FIRM OR INDIVIDUAL WHO DOES NOT POSSESS THE QUALIFICATIONS DESCRIBED IN THIS MEMORANDUM.

THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURTIES ACT OF 1933 ( THE "ACT" ), OR THE SECURITIES LAWS OF UTAH OR OTHER STATES, AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH LAWS. THERE IS NO PUBLIC MARKET FOR SECURITIES OF THE COMPANY . EVEN IF SUCH MARKET EXISTED, PURCHASERS OF SHARES WILL BE REQUIRED TO REPRESENT THAT THE SHARES ARE BEING ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO SALE OR DISTRIBUTION, AND PURCHASERS WILL NOT BE ABLE TO RESELL THE SHARES UNLESS THE SHARES ARE REGISTERED UNDER THE ACT AND QUALIFIED UNDER THE APPLICABLE STATE STATUTES ( UNLESS AN EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION IS AVAILABLE ). PURCHASERS OF THE SHARES SHOULD BE PREPARED TO BEAR THE ECONOMIC RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

THE PURCHASE OF THESE SECURITIES WILL ENTAIL A HIGH DEGREE OF RISK. THESE SECURITIES ARE SUITABLE ONLY FOR PERSONS WHO HAVE SUBSTANTIAL FINANCIAL RESOURCES AND HAVE NO LIQUIDITY IN THIS INVESTMENT. NO ONE SHOULD INVEST IN THE SHARES WHO IS NOT PREPARED TO LOSE THEIR ENTIRE INVESTMENT. PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE RISK FACTORS INDICATED UNDER " RISK FACTORS."

INVESTORS SHOULD NOT CONSTRUE THE CONTENTS OF THIS MEMORANDUM OR ANY COMMUNICATION, WHETHER WRITTEN OR ORAL, FROM THE COMPANY, ITS FOUNDERS, MANAGEMENT, EMPLOYEES OR AGENTS, AS LEGAL, TAX, ACCOUNTING OR OTHER EXPERT ADVICE. EACH INVESTOR SHOULD CONSULT THEIR OWN COUNSEL, ACCOUNTANT AND OTHER PROFESSIONAL ADVISORS AS TO LEGAL,TAX, ACCOUNTING, AND RELATED MATTERS CONCERNING HIS INVESTMENT AND ITS SUITABILITY FOR THEM.

NO PERSON (OTHER THAN OFFICERS OF THE COMPANY TO WHOM REQUESTS ARE DIRECTED FOR ADDITIONAL INFORMATION CONCERNING THIS OFFERING) IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS (WHETHER ORAL OR WRITTEN) IN CONNECTION WITH THIS OFFERING EXCEPT SUCH INFORMATION AS IS CONTAINED IN THIS PRIVATE PLACEMENT MEMORANDUM AND THE ATTACHMENTS THERETO AND DOCUMENTS REFERRED TO HEREIN . ONLY INFORMATION OR REPRESENTATIONS CONTAINED HEREIN AND THEREIN MAY BE RELIED UPON AS HAVING BEEN AUTHORIZED.

THE SECURITIES OFFERED HEREBY WILL BE SOLD TO SUBJECT TO THE STOCK SUBSCRIPTION AGREEMENT ATTACHED AS ATTACHMENT A OF THIS MEMORANDUM, WHICH CONTAINS CERTAIN REPRESENTATIONS, WARRANTIES, TERMS AND CONDITIONS. EACH INVESTOR SHOULD CAREFULLY REVIEW THE PROVISIONS OF THE SUBSCRIPTION AGREEMENT BEFORE INVESTING.

This Company :
[ ] Has never conducted operations.
[X ] Is in the development stage.
[ ] Is currently conducting operations.
[ ] Has shown a profit in the last fiscal year.
[ ] Other ( Specify ) ______________________

( Check at one , as appropriate )

This offering has been registered for offer and sale in the following states :

State State File No Effective Date

No registration has been filed.

This Offering Circular, together with Financial Statements and other Attachments, consists of a total of 19 pages (not including cover page).

Disclosure Statements                                                          2
Table of Contents                                                              4
Summary of the Offering                                                        5
The Company                                                                    6
Risk Factors                                                                   6
Use of Proceeds                                                                8
Description of Securities                                                      9
Terms of the Offering                                                          9
Directors, Officers and key Personnel of the Company                          10
Remuneration of Directors and Officers                                        10
Reports                                                                       11
Legal Matters                                                                 11
Litigation                                                                    11
Additional Information                                                        11
State Restrictions                                                            12

EXHIBITS

Exhibit A Subscription Agreement

This is an original unpublished work protected under copyright laws of the United States and other countries. All Rights Reserved. Should publication occur, then the following notice shall apply: Copyright 1996 Far West Resources, Inc., All Rights Reserved. No part of this document may be reproduced, stored in a retrieval system or transmitted, in any form or any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of Far West Resources, Inc.

SUMMARY OF THE OFFERING

The following material is intended to summarize information contained elsewhere in this Memorandom. This summary is qualified in its entirety by express reference to the Memorandom and the exhibits referred to therein. Each prospective investor is urged to read this Memorandom in its entirety.

Issuer: Far West Resources, Inc., a Utah corporation (the "Company"), is the issuer of the Shares. The address of the Company is 1400 - 400 Burrard Street, Vancouver, B.C. V6C-3G2.

Terms of the Offering: The Company is offering up to 4,000,000 of its common stock, par value $.001 per share ( the " Shares " ). The Company, in its sole discretion, may accept subscriptions for up to an aggregate of 4,000,000 or $200,000.00 until June 30, 1996, or until such earlier date as the Company determines that this Offering shall be terminated. In its sole discretion, the Company may elect to terminate this Offering even if subscriptions for Shares have been received and accepted by the Company. See " Terms of the Offering" and "Subscription for Shares ".

Company's Business: The Company is engaged the development of natural resource properties.

Risk Factors: The offering involves speculative investment with substantial risks, including those associated with an unproven startup venture, and risks associated with the development of natural resource properties in remote locations. Although the Company will use its best efforts to protect the investments of the Investors, there is no assurance that the Company's efforts will be successful. Accordingly, a prospective Investor should not view the Company or its officers, directors, employees or agents as guarantors of the financial success of an investment in the Shares. See "Risk Factors".

Limited Transferability of the Shares: The Shares have not been registered under the 1933 Act or the securities laws of any state. The Shares of common stock purchased pursuant to this Offering will not be "restricted" shares because the shares are offered under Rule 504 and this offering is excluded from the provisions of Regulation D pertaining to retricted shares. This does not mean, however, that a public market exists for the Shares. A limited public market exists now, but may not exist in the future. See "Risk Factors", "Terms of the Offering".

Limitation of Liability: Except for the amounts paid by Investors for their purchase of any Shares, and as required by Utah State law, no investor will be liable for any debts of the Company or be obligated to contribute any additional capital or funds to the Company. See "Risk Factors".

Suitability Standards: Each Investor must meet certain eligibility standards established by the Company for the purchase of the Shares. See "Terms of the Offering" and "Subscription for Shares".

Use of Proceeds: The Company plans to use the money received from this offering for the due diligence and exploration of resource properties and for working capital. The funds will not be deposited in an escrow account and will be available to the Company immediately. No minimum amount of Shares is required to be sold.

Exact corporate name:                   Far West Resources, Inc.

State and date of incorporation:        Utah State
                                        July 14th, 1983

Street address of principal office:     400 Burrard Street, Suite 1400
                                        Vancouver, B.C. V6C-3G2

                                        (604) 643-1777

Fiscal Year:                            December 31.

Person(s) to contact with respect to
offering:                               Mr Harmel S. Rayat

MATERIAL CONTRACTS

The Company has no contracts at the present time.

RISK FACTORS

An investment in the Shares involves a high degree of risk. No prospective Investor should acquire the Shares unless he can afford a complete loss of his investment. The risks described below are those which the Company deems most significant as of the date hereof. Other factors which may have a material impact on the operations of the Company may not be forseen. In addition to the other factors set forth elsewhere in this Memorandum, prospective Investors should carefully consider the following specific risk factors:

A. OPERATING RISKS

General. The economic success of an investment in the Shares depends, to a large degree, upon many factors over which the Company has no control. These factors include general economic, industrial and international conditions; inflation or deflation; fluctuation in interest rates; the availability of, and fluctuations in the money supply. The extent, type and sophistication of the Company's competition; and government regulations.

Lack of Operations. The Company engages in limited business operations at the present time. However, upon completion of the Offering, the Company plans to use the proceeds to conduct due diligence on exploration stage natural resource properties.

Development Stage Company. The Company is a development stage company as defined by Statement of Financial Accounting Standards No.7.

Dependence on Key Personnel. The Company's success will depend, in large part, upon the talents and skills of key management personnel. To the extent that any of its management personnel is unable or refuses to continue association with the Company, a suitable replacement would have to be found. There is no assurance that the Company would be able to find suitable replacements for such personnel, or that suitable personn.

Inherent Business Risks. The business that the Company plans to engage in involves substantial and inherent risks associated with a development company with limited financial resources.

B. INVESTMENT RISKS

Speculative Investment. The Shares are a very speculative investment. There can be no assurance that the Company will attain its objective and it is very likely that the Company will not be able to advance any business activities and Investors could lose their entire investments.

Arbitrary Purchase Price. The purchase price for the Shares has been arbitrarily determined by the Company, and is not necessarily indicative of their value. No assurance is or can be given that the Shares, although transferable, could be sold for the purchase price, or for any amount. There currently exists a limited market for resale of the Shares.

Restriction of Transferability. While the Company believes that no restriction exists for the transfer of the Shares being offered by the Company, an investment in the Shares may be a long term investment. Investors who do not wish or who are not financially able to hold the Shares for a substantial period of time are advised against purchasing Shares. The Shares are not registered under the 1933 Act or under the securities laws of any state, but are being offered by the Company under the exemption from registration provided by Rule 504 under Regulation D and related state and foreign exceptions.

Immediate Dilution for Investors. An investor in this offering will experience an immediate and substantial dilution.

"Best Efforts" Offering. The Shares are being offered on a "best efforts" basis by the Company. No person or entity is committed to purchase or take down any of the Shares offered pursuant to this Offering. No escrow account is maintained and no minimum amount is required to be sold. Funds will be available to the Company upon receipt.

Management and Operation Experience. The Company's officers, directors and other personnel have engaged in a variety of businesses and have been involved in business financing, operations and marketing, but their experience in these fields is limited.
There is no assurance that such experience will result in the success of the Company.

Other Risks. No assurance can be given that the Company will be successful in achieving its stated objectives, that the Company's business is undertaken by the Company, will generate cash sufficient to operate the business of the Company or that other parties entering into agreements relating to the Company's business will meet their respective obligations.

Dividends. The Company's Board of Directors presently intends to cause the Company to follow a policy of retaining earnings, if any, for the purpose of increasing the net worth and reserves of the Company. Therefore, there can be no assurance that any holder of Common Stock will receive any cash, stock or other dividends on his shares of Common Stock. Future dividends on Common Stock, if any, will depend on the future earnings, financing requirements and other factors.

                                             Maximum
Item                                         Shares  Sold

Gross Proceeds of Offering                   $200,000.00

Offering Expenses
Costs of Offering                            5,000.00

TOTAL PROCEEDS TO BE RECEIVED:               $195,000.00

The Company estimates that the costs of the Offering will be as follows: (i) legal fees of approximately $750.00, (ii) accounting fees of approximately $2500.00 and (iii) printing and other miscellaneous costs of approxmately $1750.00.

The net proceeds of this offering, assuming all the Shares are sold, will be sufficient to sustain the planned development and exploration activities of the Company for a period of approximately 9 months, depending upon the number of Shares sold in the offering and other factors. Even if all the Shares offered hereunder are sold, the Company will require additional capital in order to fund continued development activities and capital expenditures that must be made. The Company's business plan is based on the premise that additional funding will be obtained through funds generated from operations, the exercising of the options by shareholders, additional offerings of its securities, or other arrangements. There can be no assurance that any securities offerings will take place in the future, or that funds sufficient to meet any of the foregoing needs or plans will be raised from operations or any other source.

DESCRIPTION OF SECURITIES

The following discussion describes the stock and other securities of the Company.

General. The Company currently has 100,000,000 authorized common shares, par value $.001 per share, of which 4,076,300 common shares were issued and outstanding as of the date of this Placement. All of the outstanding common shares of the Company are fully paid for and nonassessable.

Voting Rights. Each share of the 4,076,300 shares of the Company's common stock held by its current shareholders is entitled to one vote at shareholders meetings.

Dividends. The Company has never paid a dividend and does not anticipate doing so in the never future.

Options. The Company currently has no options outstanding in relation to its common stock.

Miscellaneous Rights and Provisions. Shares of the Company's common stock have no pre-emptive rights. The Shares do not have any conversion rights, no redemption or sinking fund provisions, and are not liable to further call or assessment. The Shares, when paid for by Investors, will be fully paid and nonassessable. Each share of the Company's common shares is entitled to a pro rata share in any asset available for distribution to holders of equity securities upon the liquidation of the Company.

TERMS OF THE OFFERING

The Company is offering to qualified investors a maximum of 4,000,000 Shares at a purchase price of $0.05 per share of the Company's common stock. The Company may, in its sole discretion, terminate the offering at any time. The Offering will close on the earliest of June 30, 1996 or the election of the Company when all of the Shares are sold, in no event later than June 30, 1996.

The Shares are being offered and sold by the Company under the exemption from registration contained in Rule 504 under Regulation D and related exemptions from state registration requirements. Rule 504 permits the Company to offer and sell its stock in an amount not exceeding $1,000,000 to an unlimited number of persons. Until 1992, Rule 504(b)(2)(ii) imposed a limited disclosure obligation of all issuers such as the Company which was intended to ensure that investors in a Rule 504 transaction were clearly advised of the retricted character of the securities being offered for sale. This requirement was eliminated in July, 1992 at which time the Securities and Exchange Commission adopted an amendment to Rule 504 that eliminated all limitations on the manner of offering of stock under that rule and/or the resale of stock purchased in reliance on that rule. Therefore, following adoption of the 1992 amendment, the securities being offered and sold by the Company pursuant to the present Offering are available for immediate resale by nonaffiliates of the issuer.

The Shares are being offered on a "best efforts" basis by the Company and certain expenses of the Offering will be paid from the proceeds of the Offering. The Company anticipates that such expenses will not exceed $5,000 as detailed in the Use of Proceeds.

NAME                                POSITION                  HELD SINCE

Harmel S. Rayat*                    President                 March 1996
Kundan S. Rayat                     Director                  March 1996
Jasbinder Chohan                    Secretary/Treasurer
                                    Director                  March 1996

* Beneficial owner of 4,000,000 common shares.

REMUNERATION OF DIRECTORS AND OFFICERS

Directors of the Company who are also employees of the Company receive no additional compensation for their services as Directors. The Company intends, in the future, to pay Directors who are not employees of the Company, compensation of $500 per Director's Meeting, as well as reimbursements of any out of pocket expenses incurred in the Company's behalf.

REPORTS

The books and records of the Company will be maintained by the Company. The books of account and records shall be kept at the principal place of business of Far West Resources, Inc. and each shareholder, or his duly authorized representatives, shall have upon giving ten (10) days prior notice, access during reasonable business hours to such books and records, and the right to inspect and copy them. Within 120 days after the close of each fiscal year, reports will be distributed to the shareholders which will include financial statements (including a balance sheet and statements of income, shareholder's equity, and cash flows) prepared in accordance with generally accepted accounting principals, with a reconciliation to the tax information supplementary supplied, accompanied by a copy of the accountant's report.

LEGAL MATTERS

Gary R. Blume, Esquire, 11801 North Tatum Boulevard, Suite 108, Phoenix, Arizona 85028-1611 will pass upon certain matters for the Company.

LITIGATION

The Company is not presently involved in any material litigation or other legal proceedings.

ADDITIONAL INFORMATION

In the opinion of the Board of Directors of the Company, this memorandum contains a fair presentation of the subjects discussed herein and does not contain a misstatement of material fact or fail to state a material fact necessary to make any statements made herein not misleading. Persons to whom offers are made will be furnished with such additional information concerning the Company and other matters discussed herein as they, or their purchaser representative or other advisors, may reasonably request. The Company shall, to the extent such information is available or can be acquired without unreasonable effort or expense, endeavor to provide the information to such persons. All offerees are urged to make such personal investigations, inspections or inquiries as they deem appropriate.

Questions or requests for additional information may be directed to Harmel S. Rayat at (604) 643-1777. Requests for additional copies of this Memorandum or assistance in executing subscription documents may be directed to the Company.

STATE RESTRICTIONS AND DISCLOSURES
FOR UNREGISTERED SECURITIES OFFERINGS

NOTICE TO ARIZONA RESIDENTS:

These securities are being sold in reliance upon Arizona's Limited Offering exemption from registration pursuant to A.R.S. 44-1844.

THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE ARIZONA SECURITIES ACT, AS AMENDED, AND THEREFORE, CANNOT BE TRANSFERRED OR RESOLD UNLESS THEY ARE REGISTERED UNDER SUCH ACT OR AN EXEMPTION THEREFROM IS AVAILABLE.

As a purchaser of such securities hereby represent that I understand these securities cannot be resold without registration under the Arizona Securities Act or an exemption therefrom. I am not an underwriter within the meaning of A.R.S 44-1801(17), and I am acquiring these securities for myself, not for other persons. If qualifying as a non-accredited investor, I further represent that this investment does not exceed 20% of my net worth (excluding principal residence, furnishings therein and personal automobiles).

NOTICE TO CALIFORNIA RESIDENTS:

These securities are being sold in reliance upon California's Limited Offering Exemption. 25102(f) of the California Code, as amended.

THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS MEMORANDUM HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY

PART OF THE CONSIDERATION THEREFROM PRIOR TO SUCH QUALIFICATIONS IS UNLAWFUL,

UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATIONS BY SECTION 25100, 25102 OR 26105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA DOES NOT

RECOMMEND OR ENDORSE THE PURCHASE OF THESE SECURITIES.

NOTICE TO COLORADO RESIDENTS:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE COLORADO SECURTIES ACT OF 1981 BY REASON OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE COLORADO SECURITIES ACT OF 1981, IF SUCH REGISTRATION IS REQUIRED.

NOTICE TO NEW YORK RESIDENTS:

THIS PRIVATE PLACEMENT MEMORANDUM HAS NOT BEEN FILED WITH OR REVIEWED BY THE ATTORNEY GENERAL PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION OF THE CONTRARY IS UNLAWFUL.

THIS PRIVATE PLACEMENT MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF MATERIAL FACT AND DOES NOT OMIT ANY MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS MADE, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING. IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS PURPOSED TO BE SUMMARIZED HEREIN.

Purchaser Statement:

I understand that this Offering of Shares has not been reviewed by the Attorney General of the State of New York because of the Offeror's representations that this intended to be a non-public Offering pursuant to the Regulation D Rule 505 or 506, and that if all of the conditions and limitations of Regulation D are not complied with, the Offering will be resubmitted to the Attorney General for amended exemption. I understand that any literature used in connection with this Offering has not been previously filed with the Attorney General and has not been reviewed by the Attorney General. This Investment Unit is being purchased for my own account for investment, and not for distribution or resale to others. I agree that I will not sell or otherwise transfer these securities unless they are registered under the Federal Securities Act of 1933 or unless an exemption from such registration is available. I represent that I have adequate means of providing for my current needs and possible personal contingencies of financial problems, and that I have no need for liquidity of this investment.

It is understood that alldocuments, records and books pertaining to this investment have been made available to my attorney, my accountant, or my offeree representative and myself, and that, upon reasonable notice, the books and records of the issuer will be available for inspection by investors, at reasonable hours at the principal place of business.

EXHIBITS

Far West Resources, Inc.

SUBSCRIPTION DOCUMENT

1. The undersigned hereby subscribes for ____________ shares of common stock (hereinafter "Shares"), as described in the Private Offering Memorandum dated April 26, 1996 ("Memorandum"), of Far West Resources, Inc., a Utah corporation (the "Company"), being offered by the Company for a purchase price of $0.05 per share and tenders herewith the sum of $__________ in payment therefor, together with tender of this Subcription Document.

2. The undersigned represents and warrants that he is a bona fide resident of the State of ___________________ .

3. The undersigned acknowledges:

a. Receipt of a copy of the Private Offering Memorandum;

b. That this subscription, if accepted by the Company, is legally binding and irrevocable;

c. That the Company has a very limited financial and operating history;

d. That the Shares have not been registered under the Securities Act of 1933, as amended, in reliance upon exemptions contained in that Act, and that the Shares have not been registered under the securities acts of any state in reliance upon exemptions contained in certain state's securities laws; and

e. That the representations and warranties provided in this Subscription Document are being relied upon by the Company as the basis for the exemption from the registration requirements of the Securities Act of 1933 and of the applicable state's securities laws.

4. The undersigned represents and warrants as follows:

a. That the undersigned subscriber is purchasing said Shares as an investment and said Shares are purchased soley for the undersigned's own account.

b. That the undersigned subscriber has sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of an investment in the Shares;

c. That the undersigned subscriber is able to bear the economic risk of an investment in the Shares;

d. That the undersigned subscriber has read and is thoroughly familiar with the Private Offering Memorandum and represents and warrants that he is aware of the high degree of risk involved in making investment in the Shares;

e. That the undersigned subscriber's decision to purchase the Shares is based solely on the information contained in the Private Offering Memorandum and on written answers to such questions as he has raised concerning the transaction;

f. That the undersigned subscriber is purchasing the Shares directly from the Company and understands that neither the Company nor the Offering is associated with; endorsed by nor related in any way with any investment company, national or local brokerage firm or broker dealer. The undersigned subscriber's decision to purchase the Shares is not based in whole or in part on any assumption or understanding that an investment company, national or local brokerage firm or other broker dealer is involved in any way in this Offering or has endorsed or otherwise recommended an investment in these Shares.

g. That the undersigned subscriber has an investment portfolio of sufficient value that he could suitably absorb a high risk illiquid addition such as an investment in the Shares.

h. The undersigned further represents that (INITIAL APPROPRIATE CATEGORY):

[ ] I am a natural person whose individual net worth, or joint worth with my spouse at the time of purchase, exceeds $200,000;

[ ] I am a natural person who had an individual income inexcess of $50,000 or joint income with my supose in excess of $50,000 in each of the two most recent years and who reasonably expects an income in excess of those amounts in the current year;

i. That Regulation D requires the Company to conclude that each investor has sufficient knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the shares, or to verify that the investor has retained the services of one or more purchaser representatives for the purpose of evaluating the risks of investment in the shares, and hereby represents and warrants that he has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of an investment in the shares and of making an informed investment decision and will not require a purchaser representative.

5. The undersigned understands and agrees that this subscription is made subject to each of the following terms and conditions:

a. The Company shall have the right to accept or reject this subscription, in whole or part, for any reason. Upon receipt of each Subscription Document, the Company shall have until June 30th, 1996 in which to accept or reject it. If no action is taken by the Company within said period, the subscription shall be deemed to have been accepted. In each case where the subscription is rejected, the Company shall return the entire amount tendered by the subscriber, without interest;

b. That the undersigned subscriber will, from time to time, execute and deliver such documents or other instruments as may be requested by the Company in order to aid the Company in the consummation of the transactions contemplated by the Memorandum.

6. The undersigned hereby constitutes and appoints the Company, with full power of substitution, as attorney-in-fact for the purpose of executing and delivering, swearing to and filing, any documents or instruments related to or required to make any necessary clarifying or conforming changes in the Subscription Document so that such document is correct in all respects.

7. As used herein, the singular shall include the plural and the masculine shall include the feminine where necessary to clarify the meaning of this Subscription Document. All terms not defined herein shall have the same meanings as in the Memorandum.

IN WITNESS WHEREOF, the undersigned has executed this Subscription Documentthis _____ day of ___________, 1996.

Number of Shares           ___________________

Total amount tendered      $__________________

INDIVIDUAL OWNERSHIP:      __________________________________________
                           Name ( Please Type or Print )

                           __________________________________________
                           Signature

                           __________________________________________
                           Social Security Number

JOINT OWNERSHIP:           __________________________________________
                           Name   ( Please Type or Print )

                           __________________________________________
                           Signature

                           __________________________________________
                           Social Security Number

OTHER OWNERSHIP            __________________________________________
                           Name   ( Please Type or Print )

                           By:_______________________________________
                                  ( Signature )

                           __________________________________________
                                            Title

                           __________________________________________
                           Employer Indentification Number

ADDRESS:____________________________________________________________________
Street City State Zip

Phone ( Residence )_____________________ ; Phone ( Business ) _________________

I,________________________________, do hereby certify that the representations made herein concerning my financial status are true, and that all other statements contained herein are true, accurate and complete to the best of my knowledge.

Date: ___________________ , 1996. __________________________________________ Signature

CERTIFICATE OF DELIVERY

I hereby acknowledg that I delivered the foregoing Subscription Document to _________ _________________ on the _______ day of __________________ , 1996.

ACCEPTANCE

This Subscription is accepted by Far West Resources, Inc., as of the ______ day of _____________ , 1996.

Far West Resources, Inc.

By :______________________________________
Harmel Rayat, President

PRIVATE PLACEMENT MEMORANDUM

Far West Resources, Inc.
2,000,000 Shares
Offering Price - $0.15 per Shares

Minimum Investment: 6,666 Shares ($1,000)

Far West Resources, Inc. (the "Company") is offering 2,000,000 Shares (the "Shares") at a price of $0.15 per Share, with a minimum purchase of 6,666 Shares ($1,000). The Shares are offered for sale directly by the Company, subject to the terms and conditions set forth herein.

THESE ARE SPECULATIVE SECURITIES AND INVOLVE A HIGH
DEGREE OF RISK. SEE "RISK FACTORS

The securities offered by this Memorandum have not been registered under the Securities Act of 1993, as amended (the "Securities Act"), and are offered for sale in reliance upon the exemption provided by, or pursuant to regulations promulgated under, Section 4(2), Regulation D, Rule 504 of such Act relating to transactions not involving a public offering. Because the securities are not registered under the Securities Act or the securities laws of any state, the investor must hold them indefinitely unless (I) they are registered under the Securities Act and any applicable state securities laws, (ii) the investor obtains an opinion of counsel satisfactory to the Company to the effect that registration is not required under the Securities Act and applicable state laws or (iii) the Company permits the sale, transfer, or other disposition of the securities by the investor as provided herein. No public market exists for any of the securities offered hereby and such a market for resale of these securities may never develop.

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED OR APPROVED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THESE AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This offering will be withdrawn on August 31, 1997, unless the offering is extended one or more times by the Company without notice to subscribers to a date not later than September 30, 1997 (the "Termination Date") as provided herein.

The date of this Memorandum is June 30, 1997

This Memorandum does not constitute an offer to sell or a solicitation of an offer to purchase the Shares in any state or to any person to whom it is unlawful to make such offer or solicitation and does not constitute an offer to sell or solicitation to any member of the general public. This Memorandum has been prepared solely for the benefit of investors interested in purchasing the Shares offered hereby. Any distribution of this Memorandum to any person other than the recipient (or to those individuals whom he may retain to advise him with respect thereto) is unauthorized, and any reproduction of this Memorandum in whole or in part, or the divulgence of any of its contents without the prior written consent of the Company, is unauthorized and prohibited.

The recipient, by accepting delivery of this Memorandum, agrees to return this Memorandum and all documents furnished herewith to the Company or its representatives if the recipient does not purchase any of the Shares offered hereby or if the offering is withdrawn or terminated.

The delivery of this Memorandum at any time subsequent to the date hereof does not imply that the information contained herein is correct as of any time subsequent to the date of this Memorandum.

No dealer or salesperson has been authorized to give any information or make any representations or warranties, either express or implied, other than those that may be contained in this Memorandum or other documents included herein or in written supplements to this Memorandum and, if given or made, such information, representations and warranties must not be relied upon by any potential investor.

During the course of the offering and prior to sale, each prospective investor and his purchaser representative(s), if any, are invited to ask questions of and obtain additional information from the Company and its directors concerning the terms and conditions of the offering, the Company and its officers and directors and any other relevant matters, including, but not limited to, additional information to verify the accuracy of the information set forth in the Memorandum. The Company will provide such information to the extent it is available or can be acquired without unreasonable effort or expense. Answers to questions and additional information may be given only by the Company and its duly authorized representatives. Information, representations or warranties received from any other person or in any other manner must not be relied upon as having been authorized by the Company.

This Memorandum contains statements, believed to be accurate, based on certain documents, but reference is hereby made to the actual documents for complete information relating thereto. Copies of such documents are attached as exhibits to this Memorandum or are on file at the Company. All such statements are qualified in their entirety by this reference. All documents relating to this investment will be made available to any prospective subscriber and his purchaser representative(s) upon request.

The Shares are offered by the Company subject to receipt and acceptance of subscriptions, the right to reject any subscription in whole or in part, withdrawal, cancellation or modification of the offer without notice to investors and certain other conditions.

NOTICES TO ALL INVESTORS:

1. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

2. EXCEPT AS SET FORTH HEREIN, NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, OTHER THAN THOSE WHICH , MAY BE CONTAINED HEREIN. IF MADE, SUCH INFORMATION MUST NOT BE RELIED UPON. NO STATEMENT CONTAINED HEREIN SHALL BE DEEMED TO MODIFY, SUPPLEMENT OR CONSTRUE IN ANY WAY THE PROVISIONS OF ANY DOCUMENTS ATTACHED HERETO AS EXHIBITS OR ANY OF THE LANGUAGE CONTAINED THEREIN, AND ANY STATEMENT MADE HEREIN WITH RESPECT TO ANY SUCH DOCUMENT IS QUALIFIED BY REFERENCE THERETO.

3. THESE SECURITIES ARE OFFERED SOLELY BY THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM AND ARE SUBJECT TO PRIOR SALE. THE COMPANY RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO WITHDRAW OR MODIFY THIS OFFER WITHOUT PRIOR NOTICE OR TO REJECT ANY SUBSCRIPTION IN WHOLE OR IN PART OR TO ALLOT TO ANY PROSPECTIVE INVESTOR FEWER THAN THE INTERESTS APPLIED FOR BY SUCH INVESTOR.

4. AN INVESTMENT IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. (SEE "RISK FACTORS") THESE RISK FACTORS INCLUDE, AMONG OTHER RISKS, THE FOLLOWING:

A. THERE IS LIMITED MARKET FOR RESALE OF THE STOCK; HOWEVER, THERE ARE NO ASSURANCES THAT THIS MARKET WILL EXIST WHEN THE INVESTOR DESIRES TO LIQUIDATE. IN ADDITION, TRANSFERABILITY OF THE STOCK IS RESTRICTED AND INVESTORS MAY FIND IT DIFFICULT OR IMPOSSIBLE TO LIQUIDATE THEIR INVESTMENT AT A TIME WHEN THEY MAY DESIRE TO DO SO. INVESTORS MAY, THEREFORE, BE REQUIRED TO BEAR THE ECONOMIC RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. ANY SALE OR TRANSFER OF THE STOCK OR NOTES MAY ALSO RESULT IN ADVERSE TAX CONSEQUENCES.

B. THIS OFFERING INVOLVES SUBSTANTIAL RISKS INHERENT IN ANY BUSINESS WHICH IS A START-UP AND, IN PARTICULAR, A BUSINESS WHICH IS DEPENDENT UPON THE COMMERCIAL SUCCESS OF UNTESTED PRODUCTS.

5. NO OFFERING LITERATURE OR ADVERTISING IN WHATEVER FORM IS AUTHORIZED FOR USE IN CONNECTION WITH THIS OFFERING EXCEPT THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM AND THE DOCUMENTS LISTED HEREIN. NO PERSON OR SALESMAN HAS BEEN AUTHORIZED TO MAKE ANY REPRESENTATION OR GIVE ANY INFORMATION WITH RESPECT TO THESE INVESTMENT SHARES, EXCEPT THE INFORMATION CONTAINED IN SUCH DOCUMENTS. ONLY THOSE REPRESENTATIONS EXPRESSLY SET FORTH IN SUCH DOCUMENTS MAY BE RELIED UPON IN CONNECTION WITH THE OFFERING OF THESE INVESTMENT SHARES.

WHO MAY INVEST

The Shares are being offered through this Memorandum without registration under the Securities Act pursuant to the exemption from the registration requirements of such Act provided by Section 4(2) thereof and Rule 504 of Regulation D promulgated thereunder.

The Shares will be sold only to a person:

(I) who makes a minimum purchase of 20,000 Shares for $10,000, unless the Company, in its sole discretion, permits the purchase of fewer Shares;

(ii) who complies with the terms of the Subscription Agreement;

(iii) who represents that they have been furnished and have carefully read and relied solely on the information contained in this Memorandum, including all exhibits, amendments and supplements hereto;

(iv) who either:

(a) represents in writing that they qualify as an Accredited Investor or

(b) if they are a Non-Accredited Investor, demonstrates in the Subscription Agreement that they, either alone or with their Purchaser Representative(s), has such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of an investment in the Shares (investors will also be required to provide the Company with any additional information or documentation that may be required to verify such qualifications);

(v) whose overall commitment to investments which are not readily marketable is not disproportionate to their net worth, and whose acquisition of the Shares will not cause such overall commitment to become excessive; and

(vi) who has no need for liquidity with respect to their investment in the Shares and is capable of suffering the loss of their entire investment in any Shares purchased.

Accredited Investor is defined in the Securities Act of 1933, Rule 501(a) and shall mean any person who comes within any of the following categories, or who the issuer reasonable believes comes within any of the following categories, at the time of the sale of the securities to that person:

1. Bank, Broker, Insurance Company, Investment Company, Small Business Investment Company, State Plan, or Employee Benefit Plan. Any bank as defined in section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; any insurance company as defined in section 2(13) of the Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act; any small business investment company licensed by the US Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; and plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

2. Private Business Development Company. Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

3. Organization, Partnership, Corporate or Other Entity Investor. Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

4. Officer of Issuer. Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;

5. $1,000,000 Net Worth. Any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of this purchase exceeds $1,000,000;

6. $200,000 Income. Any natural person who had individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same level of income in the current year;

7. Trust. Any trust, with total assets in excess of $5,000,000 not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule
506(b)(2)(ii); and

8. Entity. Any entity in which all of the equity owners are accredited investors.

A breach of an investor of any of its representations made to the Company in the Subscription Agreement which results in a loss by the Company of its registration exemption provided by Regulation D will cause such investor to be liable to the Company for all damages and losses proximately caused thereby.

The bases for establishing the foregoing standards include the relative lack of liquidity of the Shares and the risks inherent in an investment in the Company. The foregoing standards represent minimum requirements for a prospective purchaser and the Company reserves the right to reject any subscription notwithstanding compliance with these standards. Shares may also be sold to corporations, partnerships, trusts and other entities meeting the foregoing requirements.

Certain states in which the Company may qualify its Shares for sale may establish suitability standards and minimum purchase requirements more restrictive than those set by the Company. Those requirements, if any, will be set forth in a supplement to this Memorandum.

SUMMARY OF THE OFFERING

The following material is intended to summarize information contained elsewhere in this Memorandum. This summary is qualified in its entirety by express reference to the Memorandum and the exhibits referred to therein. Each prospective investor is urged to read this Memorandum in its entirety, as well as various filings submitted to the SEC and other regulatory bodies.

The Company was incorporated under the laws of the State of Utah, on July 14, 1983 under the name of Far West Gold, Inc., with an authorized capital of 50,000,000 shares of common stock with a par value of $.001 per share.

On July 14, 1983, the Company, in connection with a 504 D offering issued 5,141,000 shares of common stock for cash at $.003 per share or $15,000. During October 1984, the Company issued 13,009,000 shares of common stock at $.01 per share or $130,090, less offering expenses of the offering of $27,547, for a net cash of $102,543. For the year ending December 31, 1990, the Company received a capital contribution of $4,364 to pay expenses of the Company. For the year ending December 31, 1991, the Company received a capital contribution of $100 to pay expenses of the Company. For the year ending December 31, 1995, the Company issued 20,000,000 shares of common stock at $.001 per share to satisfy current liabilities in the amount of $20,000.

On April 15, 1996, the Company effected a reverse split of 500:1, with the par value remaining at $.001. On April 16, 1996, the Company issued 4,000,000 shares of common stock at $.0005 or $2000 for services to Mr. Harmel Rayat, a director of the Company. On May 9, 1996, in connection with a 504 D offering, the Company issued 4,000,000 shares of common stock at $.05 per share for cash in the amount of $200,000. On May 9, 1996, shareholders of the Company approved a name change to Far West Resources, Inc and approved an increase in the number of shares that the Company has authority to issue to 105,000,000, of which 100,000,000 shares shall be at $.001 par value common stock, and 5,000,000shares shall be $.10 par valued preferred stock.

The Company is engaged in the development of natural resource and real estate properties.

The Offering
------------

Shares Offered                 2,000,000

Offering Price                 $0.15 Per Share

The Company plans to use the proceeds from this Offering for working capital, public relations and management consulting purposes.

Even if all or substantially all of the Shares offered hereunder are sold, the Company may be dependent upon, among other things, the receipt of additional capital. The Company plans to seek the additional financing it will require through the sale of additional debt or equity securities, through venture capital or through strategic partnerships. There is no assurance that such additional financing will be available when required in order to proceed with the business plan and complete preparations to continue operations.

RISK FACTORS

Investment in the Company involves a number of risks. In addition to the risks and investment considerations discussed elsewhere in the Memorandum, the following factors should be considered prior to purchasing the Shares offered through this Memorandum.

SUMMARY OF RISKS

The economic success of an investment in the Shares depends, to a large degree, upon many factors over which the Company has not control. These factors include general economic, industrial and international conditions; inflation or deflation; fluctuation in interest rates; the Company's competition; and governmental regulations.

The Shares are a very speculative investment. Although the Company is confident it will succeed in its endeavours, Investors could lose their entire investment.

The Company's officers, directors and other personnel have engaged in a variety of businesses and have been involved in business financing, operations and marketing, but their experience in these fields is limited. There is no assurance that such experience will result in the success for the Company.

No assurance can be given that the Company will be successful in achieving its stated objectives, that the Company's business, once business is undertaken by the Company, will generate

cash sufficient to operate the business of the Company or that other parties entering into agreements relating to the Company's business will meet their respective obligations.

Much of the operating capital of the Company over the past several years has come from cash provided by private fundings. The Company has not been profitable in the past nor has it generated sufficient capital to cover the on-going operating and expansion expenses.

There is no assurance that such additional financing will be available when required in order to proceed with the business plan or that the Company's ability to respond to competition or changes in the market place. If the Company is unsuccessful in securing the additional capital needed to continue operations within the time required, the Company will not be in a position to continue operations and the purchasers of Shares in this offering may lose their entire investment.

The purchasers of the Shares being offered hereby will furnish a substantial portion of the Company's initial capital. Therefore the capital invested by the purchasers of the Shares will be at risk immediately in the business of the Company. Even if all Shares offered hereunder are sold, the investors in the Shares should assume that the shares of Common Stock will have only a minimal book value.

In order to satisfy the requirements of the exemptions from registration under the Securities Act and the various applicable state securities laws, each subscriber must acquire his Common Stock for investment purposes only and not with a view to distribution or resale. Consequently, certain conditions of such federal and state securities laws must be satisfied prior to any disposition of the securities. Some of these conditions may include a minimum holding period, availability of certain reports, including financial statements, from the Company, limitation on the percentage of the securities sold and the manner in which the securities are sold. The Company can prohibit any sale, transfer or other disposition unless it receives an opinion of counsel provided at the Shareholder's expense, in a form satisfactory to the Company, stating that the proposed sale, transfer or other disposition will not result in a violation of the applicable federal and state securities laws and regulations or other applicable federal and state laws and regulations. It is likely that Rule 144, which permits sales of unregistered securities under certain conditions, will be available to the shareholders of the Company. No public market exists for the Common Stock, and no assurances can be given that such a market for the resale of such securities will develop. Consequently, owners of the securities may have to hold them indefinitely and may not be able to liquidate their investment in the Company or pledge such securities as collateral for a loan in the event of an emergency.

The Company's Board of Directors presently intends to cause the Company to follow a policy of retaining earnings, if any, for the purpose of increasing the net worth and reserves of the Company. Therefore, there can be no assurance that any holder of Common Stock will receive any cash, stock or other dividends on his shares of Common Stock. Future dividends on Common Stock, if any, will depend on future earnings, financing requirements and other factors.

The offering price of the Common Stock was arbitrarily set by the Company. No independent investment banking firm was retained to assist in determining the offering price. The offering price of the Common Stock may not bear any relation to the actual value of the Common Stock. Among the factors considered in determining the price were estimates of the prospects of the Company, the background and capital contributions of Management and current conditions in the securities markets and the Company's industry. There is, however, no relationship between the offering price of the Common Stock and the Company's assets, earnings, book value or any other objective criteria of value.

The Company's Certificate of Incorporation authorizes the issuance of 100,000,000 shares of Common Stock, and 5,000,000 shares of Preferred Stock. At this time, 8,076,202 shares of Common Stock have been issued. Accordingly, shareholders, including those purchasing the shares offered with the sale of these Shares, will be dependent upon the judgment of management in connection with the future issuance and sale of shares of the Company's capital stock, in the event purchasers can be found for such securities.

Name                     Position                          Director
                                                           Since
Harmel S. Rayat          President and CEO                 3/96
Jasbinder Chohan         Director, Secretary/Treasurer     3/96
Kundan S. Rayat          Director                          3/96

At the present time no Officer or Director receives any compensation for their services.

Although the Company is not party to any Employment or Consulting Agreements currently, it is anticipated that all future employees will enter into standard confidentiality and non-compete agreements prior to employment.

The Company currently has a policy of awarding stock options to certain directors and employees and views the issuance of stock options necessary in order to attract and maintain the services of individuals essential to the Company's long term success.

                             Before Offering               After Offering
                         Number of    Percent of      Number of     Percent of
Name                     Shares       Class           Shares        Class
Harmel S. Rayat          4,000,000    49.5%           4,000,000     39.6%

DESCRIPTION OF COMMON STOCK

Holders of the Common Stock are entitled to one vote for each share held by them of record on the books of the Company in all matters to be voted on by the stockholders. Holders of Common Stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors out of funds legally available, and in the event of liquidation, dissolution or winding up of the Company, to share ratably in all assets remaining after payment of liabilities. Declaration of dividends on Common Stock is subject to the discretion of the Board of Directors and will depend upon a number of factors, including the future earnings, capital requirements and financial condition of the Company. The Company has not declared dividends on its Common Stock in the past and the

management currently anticipates that retained earnings, if any, in the future will be applied to the expansion and development of the Company rather than the payment of dividends.

The holders of Common Stock have no preemptive or conversion rights and are not subject to further calls or assessments by the Company. There are no redemption or sinking fund provisions applicable to the Common Stock. The Common Stock currently outstanding is, and the Common Stock offered by the Company hereby will, when issued, be validly issued, fully paid and nonassessable.

There are no warrants outstanding.

Purchasers of the Shares of Common Stock offered hereby must be aware of the long-term nature of their investment and be able to bear the economic risk of their investment for an indefinite period of time. There is no public trading market for the shares of Common Stock and there can be no assurance that any such market will develop in the foreseeable future. The Shares of Common Stock have not been registered under the Securities Act or the securities laws of any state. The right of any purchaser to sell, transfer, pledge or otherwise dispose of such securities is limited by the Securities Act and state securities laws and the regulations promulgated thereunder. The Company's stock transfer records will reflect "stop transfer" restrictions with respect to its Common Stock and the certificates representing such securities will bear the following legend:

These securities have not been registered under the Securities Act of 1933 or any applicable state securities laws, and they may not be offered for sale, sold, transferred, pledged or hypothecated without an effective registration statement under the Securities Act and under any applicable state securities laws, or an opinion of counsel, satisfactory to the company, that an exemption from such registration is available.

The conversion price from time to time in effect shall be subject to adjustment from time to time as follows:

1. In case the corporation shall at any time subdivide the outstanding shares of common stock, or shall issue a stock dividend on its outstanding common stock, the conversion price in effect immediately prior to such subdivision or the issuance of such dividend shall be proportionately decreased, and in case the corporation shall at any time combine the outstanding shares of common stock, the conversion price in effect immediately prior to such combination shall be proportionately increased, effective at the close of business on the date of such subdivision, dividend or combination, as the case may be.

2. The conversion price will be adjusted for dividends or distributions on common stock payable in company stock; subdivisions, combinations or certain reclassifications of common stock; distributions to all holders of common stock of certain rights to purchase common stock at less than current market price at the time; distributions to such holders of assets or debt securities of the Company or certain rights to purchase securities of the Company (excluding cash dividends or distributions from current or retained earnings). However, no adjustment need be made if security holders may participate in the transaction or in certain other cases.

DIVIDEND POLICY

The Company's Board of Directors presently intends to cause the Company to follow a policy of retaining earnings, if any, for the purpose of increasing the net worth and reserves of the Company. Therefore, there can be no assurance that any holder of Common Stock will receive any cash, stock or other dividends on his shares of Common Stock. To date, the Company has neither declared nor paid any dividends on its Common Stock nor does the Company anticipate that dividends will be paid in the foreseeable future. Rather, the Company intends to apply earnings to the expansion and development of its business.

LITIGATION

There are no pending legal proceedings to which the Company is a party.

ADDITIONAL INFORMATION

In the opinion of the Board of Directors of the Company, this Memorandum contains a fair presentation of the subjects discussed herein and does not contain a misstatement of a material fact or fail to state a material fact necessary to make any statements made herein not misleading. Persons to whom offers are made will be furnished with such additional information concerning the Company and other matters discussed herein as they, or their purchaser representative or other advisors, may reasonably request. The Company shall, to the extent such information is available or can be acquired without unreasonable effort or expense, endeavour to provide the information to such persons. All offerees are urged to make such personal investigations, inspections or inquiries as they deem appropriate.

SUBSCRIPTION DOCUMENT

1. The undersigned hereby subscribes for Shares of common stock (hereinafter "Shares"), as described in the Private Offering Memorandum dated June 30, 1997 ("Memorandum"), of Far West Resources, Inc., a Utah corporation (the "Company"), being offered by the Company for a purchase price of $0.15 per share and tenders herewith the sum of $ In payment therefore, together with tender of this Subscription Document.

2. The undersigned represents and warrants that he is a bona fide resident of the State of .

3. The undersigned acknowledges:

a. Receipt of a copy of the Private Offering Memorandum;

b. That this subscription, if accepted by the Company, is legally binding and irrevocable;

c. That the Company has a very limited financial and operating history;

d. That the Shares have not been registered under the Securities Act of 1933, as amended, in reliance upon exemptions contained in that Act, and that the Shares have not been registered under the securities acts of any state in reliance upon exemptions contained in certain state's securities laws; and

e. That the representations and warranties provided in this Subscription Document are being relied upon by the Company as the basis for the exemption from the registration requirements of the Securities Act 1933 and of the applicable state's securities laws.

FOR NEW YORK RESIDENTS ONLY: THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

4. The undersigned represents and warrants as follows:

a. That the undersigned subscriber is purchasing said Shares as an investment and said Shares are purchased solely for the undersigned's own account;

b. That the undersigned subscriber has sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of an investment in the Shares;

c. That the undersigned subscriber is able to bear the economic risk of an investment in the Shares;

d. That the undersigned subscriber has read and is thoroughly familiar with the Private Offering Memorandum and represents and warrants that he is aware of the high degree of risk involved in making an investment in the Shares;

e. That the undersigned subscriber's decision to purchase the Shares is based solely on the information contained in the Private Offering Memorandum and on written answers to such questions as he has raised concerning the transaction;

f. That the undersigned subscriber is purchasing the Shares directly from the Company and understands that neither the Company nor the Offering is associated with, endorsed by nor related in any way with any investment company, national or local brokerage firm or other broker dealer. The undersigned subscriber's decision to purchase the Shares is not based in whole or in part on any assumption or understanding that an investment company, national or local brokerage firm or other broker dealer is involved in any way in this Offering or has endorsed or otherwise recommended an investment in these Shares.

g. That the undersigned subscriber has an investment portfolio of sufficient value that he could suitably absorb a high risk illiquid addition such as an investment in the Shares.

h. The undersigned further represents that (INITIAL APPROPRIATE CATEGORY):

[ ] I am a natural person whose individual net worth, or joint worth with my spouse at the time of purchase, exceeds $200,000;

[ ] I am a natural person who had an individual income in excess of $50,000 or joint income with my spouse in excess of $50,000 in each of the two most recent years and who reasonably expects an income in excess of those amounts in the current year.

i. That Regulation D requires the Company to conclude that each investor has sufficient knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the shares, or to verify that the investor has retained the services of one or more purchaser representatives for the purpose of evaluating the risks of investment in the shares, and hereby represents and warrants that he has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of an investment in the shares and

of making an informed investment decision and will not require a purchaser representative.

5. The undersigned understands and agrees that this subscription is made subject to each of the following terms and conditions:

a. The Company shall have the right to accept or reject this subscription, in whole or part, for any reason. Upon receipt of each Subscription Document, the Company shall have until August 31, 1997 in which to accept or reject it. If no action is taken by the Company within said period, the subscription shall be deemed to have been accepted. In each case where the subscription is rejected, the Company shall return the entire amount tendered by the subscriber, without interest;

b. That the undersigned subscriber will, from time to time, execute and deliver such documents or other instruments as may be requested by the Company in order to aid the Company in the consummation of the transactions contemplated by the Memorandum.

6. The undersigned hereby constitutes and appoints the Company, with full power of substitution, as attorney-in-fact for the purpose of executing and delivering, swearing to and filing, any documents or instruments related to or required to make any necessary clarifying or conforming changes in the Subscription Document so that such document is correct in all respects.

7. As used herein, the singular shall include the plural and the masculine shall include the feminine where necessary to clarify the meaning of this Subscription Document. All terms not defined herein shall have the same meanings as in the Memorandum.

IN WITNESS WHEREOF, the undersigned has executed this Subscription Document this __ day of __________, 1997.

Number of Shares           ___________________

Total amount tendered      $__________________

INDIVIDUAL OWNERSHIP:      __________________________________________
                           Name ( Please Type or Print )

                           __________________________________________
                           Signature

                           __________________________________________
                           Social Security Number

JOINT OWNERSHIP:           __________________________________________
                           Name   ( Please Type or Print )

                           __________________________________________
                           Signature

                           __________________________________________
                           Social Security Number

OTHER OWNERSHIP            __________________________________________
                           Name   ( Please Type or Print )

                           By:_______________________________________
                                  ( Signature )

                           __________________________________________
                                            Title

                           __________________________________________
                           Employer Indentification Number

ADDRESS:____________________________________________________________________
Street City State Zip

Phone ( Residence )_____________________ ; Phone ( Business ) _________________

I,________________________________, do hereby certify that the representations made herein concerning my financial status are true, and that all other statements contained herein are true, accurate and complete to the best of my knowledge.

Date: ___________________ , 1996. __________________________________________ Signature

CERTIFICATE OF DELIVERY

I hereby acknowledg that I delivered the foregoing Subscription Document to _________ _________________ on the _______ day of __________________ , 1996.

ACCEPTANCE

This Subscription is accepted by Far West Resources, Inc., as of the ______ day of _____________ , 1997.

Far West Resources, Inc.

By :______________________________________
Harmel Rayat, President

PRIVATE PLACEMENT MEMORANDUM

American Alliance Corporation
1,000,000 Shares
Offering Price - $0.50 per Shares

Minimum Investment: 20,000 Shares ($10,000)

American Alliance Corporation (the "Company") is offering 1,000,000 Shares (the "Shares") at a price of $0.50 per Share, with a minimum purchase of 20,000 Shares ($10,000). The Shares are offered for sale directly by the Company, subject to the terms and conditions set forth herein. See "TERMS OF THE OFFERING" and "PLAN OF PLACEMENT".

THESE ARE SPECULATIVE SECURITIES AND INVOLVE A HIGH
DEGREE OF RISK. SEE "RISK FACTORS

The securities offered by this Memorandum have not been registered under the Securities Act of 1993, as amended (the "Securities Act"), and are offered for sale in reliance upon the exemption provided by, or pursuant to regulations promulgated under, Section 4(2), Regulation D, Rule 504 of such Act relating to transactions not involving a public offering. Because the securities are not registered under the Securities Act or the securities laws of any state, the investor must hold them indefinitely unless (I) they are registered under the Securities Act and any applicable state securities laws, (ii) the investor obtains an opinion of counsel satisfactory to the Company to the effect that registration is not required under the Securities Act and applicable state laws or (iii) the Company permits the sale, transfer, or other disposition of the securities by the investor as provided herein. No public market exists for any of the securities offered hereby and such a market for resale of these securities may never develop.

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED OR APPROVED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THESE AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

                                             Price to         Selling           Proceeds to
                                             Investors        Commissions (1)   the Company
Per Share                                    $0.50            $0.03             $0.47
Total Minimum Offering (100,000 Shares)      $50,000.00       $3,000.00         $47,000.00
Total Maximum Offering (1,000,000 Shares)    $500,000.00      $30,000.00        $470,000.00

(1) The Company is offering the Shares directly and no person is obligated to purchase any Shares. The Company may, in its discretion, accept subscriptions for Shares received through broker-dealers that are members of the National Association of Securities Dealers, Inc. ("NASD") and will, in connection with such sales, pay a commission of 6% of the price of each Shares sold, provided not fewer than 100,000 Shares (the "Minimum Offering") are sold in the offering. See "PLAN OF PLACEMENT." The offering is made on a "best efforts, all-or-none" basis with respect to the Minimum Offering and on a "best efforts" basis with respect to the remaining Shares offered. See "TERMS OF THE OFFERING."

The date of this Memorandum is October 1, 1997

This offering will be withdrawn on October 31, 1997, unless the offering is extended one or more times by the Company without notice to subscribers to a date not later than November 30, 1997 (the "Termination Date") as provided herein. See "TERMS OF THE OFFERING."

This Memorandum does not constitute an offer to sell or a solicitation of an offer to purchase the Shares in any state or to any person to whom it is unlawful to make such offer or solicitation and does not constitute an offer to sell or solicitation to any member of the general public. This Memorandum has been prepared solely for the benefit of investors interested in purchasing the Shares offered hereby. Any distribution of this Memorandum to any person other than the recipient (or to those individuals whom he may retain to advise him with respect thereto) is unauthorized, and any reproduction of this Memorandum in whole or in part, or the divulgence of any of its contents without the prior written consent of the Company, is unauthorized and prohibited.

The recipient, by accepting delivery of this Memorandum, agrees to return this Memorandum and all documents furnished herewith to the Company or its representatives if the recipient does not purchase any of the Shares offered hereby or if the offering is withdrawn or terminated.

The delivery of this Memorandum at any time subsequent to the date hereof does not imply that the information contained herein is correct as of any time subsequent to the date of this Memorandum.

No dealer or salesperson has been authorized to give any information or make any representations or warranties, either express or implied, other than those that may be contained in this Memorandum or other documents included herein or in written supplements to this Memorandum and, if given or made, such information, representations and warranties must not be relied upon by any potential investor.

During the course of the offering and prior to sale, each prospective investor and his purchaser representative(s), if any, are invited to ask questions of and obtain additional information from the Company and its directors concerning the terms and conditions of the offering, the Company and its officers and directors and any other relevant matters, including, but not limited to, additional information to verify the accuracy of the information set forth in the Memorandum. The Company will provide such information to the extent it is available or can be acquired without unreasonable effort or expense. Answers to questions and additional information may be given only by the Company and its duly authorized representatives. Information, representations or warranties received from any other person or in any other manner must not be relied upon as having been authorized by the Company.

This Memorandum contains statements, believed to be accurate, based on certain documents, but reference is hereby made to the actual documents for complete information relating thereto. Copies of such documents are attached as exhibits to this Memorandum or are on file at the Company. All such statements are qualified in their entirety by this reference. All documents relating to this investment will be made available to any prospective subscriber and his purchaser representative(s) upon request.

The Shares are offered by the Company subject to receipt and acceptance of subscriptions, the right to reject any subscription in whole or in part, withdrawal, cancellation or modification of the offer without notice to investors and certain other conditions.

NOTICES TO ALL INVESTORS:

1. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

2. EXCEPT AS SET FORTH HEREIN, NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, OTHER THAN THOSE WHICH , MAY BE CONTAINED HEREIN. IF MADE, SUCH INFORMATION MUST NOT BE RELIED UPON. NO STATEMENT CONTAINED HEREIN SHALL BE DEEMED TO MODIFY, SUPPLEMENT OR CONSTRUE IN ANY WAY THE PROVISIONS OF ANY DOCUMENTS ATTACHED HERETO AS EXHIBITS OR ANY OF THE LANGUAGE CONTAINED THEREIN, AND ANY STATEMENT MADE HEREIN WITH RESPECT TO ANY SUCH DOCUMENT IS QUALIFIED BY REFERENCE THERETO.

3. THESE SECURITIES ARE OFFERED SOLELY BY THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM AND ARE SUBJECT TO PRIOR SALE. THE COMPANY RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO WITHDRAW OR MODIFY THIS OFFER WITHOUT PRIOR NOTICE OR TO REJECT ANY SUBSCRIPTION IN WHOLE OR IN PART OR TO ALLOT TO ANY PROSPECTIVE INVESTOR FEWER THAN THE INTERESTS APPLIED FOR BY SUCH INVESTOR.

4. AN INVESTMENT IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. (SEE "RISK FACTORS") THESE RISK FACTORS INCLUDE, AMONG OTHER RISKS, THE FOLLOWING:

A. THERE IS LIMITED MARKET FOR RESALE OF THE STOCK; HOWEVER, THERE ARE NO ASSURANCES THAT THIS MARKET WILL EXIST WHEN THE INVESTOR DESIRES TO LIQUIDATE. IN ADDITION, TRANSFERABILITY OF THE STOCK IS RESTRICTED AND INVESTORS MAY FIND IT DIFFICULT OR IMPOSSIBLE TO LIQUIDATE THEIR INVESTMENT AT A TIME WHEN THEY MAY DESIRE TO DO SO. INVESTORS MAY, THEREFORE, BE REQUIRED TO BEAR THE ECONOMIC RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. ANY SALE OR TRANSFER OF THE STOCK OR NOTES MAY ALSO RESULT IN ADVERSE TAX CONSEQUENCES.

B. THIS OFFERING INVOLVES SUBSTANTIAL RISKS INHERENT IN ANY BUSINESS WHICH IS A START-UP AND, IN PARTICULAR, A BUSINESS WHICH IS DEPENDENT UPON THE COMMERCIAL SUCCESS OF UNTESTED PRODUCTS.

5. NO OFFERING LITERATURE OR ADVERTISING IN WHATEVER FORM IS AUTHORIZED FOR USE IN CONNECTION WITH THIS OFFERING EXCEPT THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM AND THE DOCUMENTS LISTED HEREIN. NO PERSON OR SALESMAN HAS BEEN AUTHORIZED TO MAKE ANY REPRESENTATION OR GIVE ANY INFORMATION WITH RESPECT TO THESE INVESTMENT SHARES, EXCEPT THE INFORMATION CONTAINED IN SUCH DOCUMENTS. ONLY THOSE REPRESENTATIONS EXPRESSLY SET FORTH IN SUCH DOCUMENTS MAY BE RELIED UPON IN CONNECTION WITH THE OFFERING OF THESE INVESTMENT SHARES.

WHO MAY INVEST

The Shares are being offered through this Memorandum without registration under the Securities Act pursuant to the exemption from the registration requirements of such Act provided by Section 4(2) thereof and Rule 504 of Regulation D promulgated thereunder.

General Suitability Standards

The Shares will be sold only to a person:

(I) who makes a minimum purchase of 20,000 Shares for $10,000, unless the Company, in its sole discretion, permits the purchase of fewer Shares;

(ii) who complies with the terms of the Subscription Agreement;

(iii) who represents that they have been furnished and have carefully read and relied solely on the information contained in this Memorandum, including all exhibits, amendments and supplements hereto;

(iv) who either:

(a) represents in writing that they qualify as an Accredited Investor or

(b) if they are a Non-Accredited Investor, demonstrates in the Subscription Agreement that they, either alone or with their Purchaser Representative(s), has such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of an investment in the Shares (investors will also be required to provide the Company with any additional information or documentation that may be required to verify such qualifications);

(v) whose overall commitment to investments which are not readily marketable is not disproportionate to their net worth, and whose acquisition of the Shares will not cause such overall commitment to become excessive; and

(vi) who has no need for liquidity with respect to their investment in the Shares and is capable of suffering the loss of their entire investment in any Shares purchased.

Accredited Investor is defined in the Securities Act of 1933, Rule 501(a) and shall mean any person who comes within any of the following categories, or who the issuer reasonable believes comes within any of the following categories, at the time of the sale of the securities to that person:

1. Bank, Broker, Insurance Company, Investment Company, Small Business Investment Company, State Plan, or Employee Benefit Plan. Any bank as defined in section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; any insurance company as defined in section 2(13) of the Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act; any small business investment company licensed by the US Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; and plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

2. Private Business Development Company. Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

3. Organization, Partnership, Corporate or Other Entity Investor. Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

4. Officer of Issuer. Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;

5. $1,000,000 Net Worth. Any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of this purchase exceeds $1,000,000;

6. $200,000 Income. Any natural person who had individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same level of income in the current year;

7. Trust. Any trust, with total assets in excess of $5,000,000 not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii); and

8. Entity. Any entity in which all of the equity owners are accredited investors.

A breach of an investor of any of its representations made to the Company in the Subscription Agreement which results in a loss by the Company of its registration exemption provided by Regulation D will cause such investor to be liable to the Company for all damages and losses proximately caused thereby.

The bases for establishing the foregoing standards include the relative lack of liquidity of the Shares and the risks inherent in an investment in the Company. The foregoing standards represent minimum requirements for a prospective purchaser and the Company reserves the right to reject any subscription notwithstanding compliance with these standards. Shares may also be sold to corporations, partnerships, trusts and other entities meeting the foregoing requirements.

Certain states in which the Company may qualify its Shares for sale may establish suitability standards and minimum purchase requirements more restrictive than those set by the Company. Those requirements, if any, will be set forth in a supplement to this Memorandum.

SUMMARY OF THE OFFERING

The following material is intended to summarize information contained elsewhere in this Memorandum. This summary is qualified in its entirety by express reference to the Memorandum and the exhibits referred to therein. Each prospective investor is urged to read this Memorandum in its entirety, as well as various filings submitted to the SEC and other regulatory bodies.

The Company was incorporated under the laws of the State of Utah, on July 14, 1983 under the name of Far West Gold, Inc., with an authorized capital of 50,000,000 shares of common stock with a par value of $.001 per share.

On July 14, 1983, the Company, in connection with a 504 D offering issued 5,141,000 shares of common stock for cash at $.003 per share or $15,000. During October 1984, the Company issued 13,009,000 shares of common stock at $.01 per share or $130,090, less offering expenses of the offering of $27,547, for a net cash of $102,543. For the year ending December 31, 1990, the Company received a capital contribution of $4,364 to pay expenses of the Company. For the year ending December 31, 1991, the Company received a capital contribution of $100 to pay expenses of the Company. For the year ending December 31, 1995, the Company issued 20,000,000 shares of common stock at $.001 per share to satisfy current liabilities in the amount of $20,000.

On April 15, 1996, the Company effected a reverse split of 500:1, with the par value remaining at $.001. On April 16, 1996, the Company issued 4,000,000 shares of common stock at $.0005 or $2000 for services to Mr. Harmel Rayat, a director of the Company. On May 9, 1996, in connection with a 504 D offering, the Company issued 4,000,000 shares of common stock at $.05 per share for cash in the amount of $200,000. On May 9, 1996, shareholders of the Company approved a name change to Far West Resources, Inc and approved an increase in the number of shares that the Company has authority to issue to 105,000,000, of which 100,000,000 shares shall be at $.001 par value common stock, and 5,000,000shares shall be $.10 par valued preferred stock.

On June 30, 1997, the shareholders of the Company approved a name change to American Alliance Corporation, approved a change in state registration from Utah to Nevada, approved an increase in common share par value from $.001 to $.00001 and preferred par value from $.10 to $.0001, and approved the 1997 Employee and Director Stock Option Plan for 1,250,000 shares. On June 30, 1997, the Company issued 2,000,000 common shares at $.15 per share in connection with a 504 D offering.

The Company is a developmental stage company that currently actively seeking to acquire or enter into a technology based business endeavor.

The Offering
------------

Shares Offered                                                1,000,000

Offering Price                                                $0.50 Per Share

Common Stock Outstanding (Oct 1/97)                           10,076,202

Common Stock to be Outstanding After the Offering

                  MINIMUM OFFERING:                           10,176,202
                  MAXIMUM OFFERING:                           11,076,202

Estimated Proceeds of the Offering

                  MINIMUM OFFERING:                           $50,000
                  MAXIMUM OFFERING:                           $500,000

The Company plans to use the proceeds from this Offering for working capital purposes while the Company seeks potential technology related acquisitions or business opportunities. See -- "ESTIMATED USE OF PROCEEDS."

Even if all or substantially all of the Shares offered hereunder are sold, the Company may be dependent upon, among other things, the receipt of additional capital. The Company plans to seek the additional financing it will require through the sale of additional debt or equity securities, through venture capital or through strategic partnerships. There is no assurance that such additional financing will be available when required in order to proceed with the business plan and complete preparations to continue operations. See "RISK FACTORS - Dependence Upon Offering Proceeds and Need for Additional Capital."

Investment in the Common Stock involves a high degree of risk. Potential investors should carefully consider the information under the caption, "RISK FACTORS."

RISK FACTORS

Investment in the Company involves a number of risks. In addition to the risks and investment considerations discussed elsewhere in the Memorandum, the following factors should be considered prior to purchasing the Shares offered through this Memorandum.

SUMMARY OF RISKS

The economic success of an investment in the Shares depends, to a large degree, upon many factors over which the Company has not control. These factors include general economic, industrial and international conditions; inflation or deflation; fluctuation in interest rates; the Company's competition; and governmental regulations.

The Shares are a very speculative investment. Although the Company is confident it will succeed in its endeavours, Investors could lose their entire investment.

The Company's officers, directors and other personnel have engaged in a variety of businesses and have been involved in business financing, operations and marketing, but their experience in these fields is limited. There is no assurance that such experience will result in the success for the Company.

No assurance can be given that the Company will be successful in achieving its stated objectives, that the Company's business, once business is undertaken by the Company, will generate cash sufficient to operate the business of the Company or that other parties entering into agreements relating to the Company's business will meet their respective obligations.

Much of the operating capital of the Company over the past several years has come from cash provided by private fundings. The Company has not been profitable in the past nor has it generated sufficient capital to cover the on-going operating and expansion expenses.

There is no assurance that such additional financing will be available when required in order to proceed with the business plan or that the Company's ability to respond to competition or changes in the market place. If the Company is unsuccessful in securing the additional capital needed to

continue operations within the time required, the Company will not be in a position to continue operations and the purchasers of Shares in this offering may lose their entire investment.

The purchasers of the Shares being offered hereby will furnish a substantial portion of the Company's initial capital. Therefore the capital invested by the purchasers of the Shares will be at risk immediately in the business of the Company. Even if all Shares offered hereunder are sold, the investors in the Shares should assume that the shares of Common Stock will have only a minimal book value.

In order to satisfy the requirements of the exemptions from registration under the Securities Act and the various applicable state securities laws, each subscriber must acquire his Common Stock for investment purposes only and not with a view to distribution or resale. Consequently, certain conditions of such federal and state securities laws must be satisfied prior to any disposition of the securities. Some of these conditions may include a minimum holding period, availability of certain reports, including financial statements, from the Company, limitation on the percentage of the securities sold and the manner in which the securities are sold. The Company can prohibit any sale, transfer or other disposition unless it receives an opinion of counsel provided at the Shareholder's expense, in a form satisfactory to the Company, stating that the proposed sale, transfer or other disposition will not result in a violation of the applicable federal and state securities laws and regulations or other applicable federal and state laws and regulations. It is likely that Rule 144, which permits sales of unregistered securities under certain conditions, will be available to the shareholders of the Company. No public market exists for the Common Stock, and no assurances can be given that such a market for the resale of such securities will develop. Consequently, owners of the securities may have to hold them indefinitely and may not be able to liquidate their investment in the Company or pledge such securities as collateral for a loan in the event of an emergency.

The Company's Board of Directors presently intends to cause the Company to follow a policy of retaining earnings, if any, for the purpose of increasing the net worth and reserves of the Company. Therefore, there can be no assurance that any holder of Common Stock will receive any cash, stock or other dividends on his shares of Common Stock. Future dividends on Common Stock, if any, will depend on future earnings, financing requirements and other factors.

The offering price of the Common Stock was arbitrarily set by the Company. No independent investment banking firm was retained to assist in determining the offering price. The offering price of the Common Stock may not bear any relation to the actual value of the Common Stock. Among the factors considered in determining the price were estimates of the prospects of the Company, the background and capital contributions of Management and current conditions in the

securities markets and the Company's industry. There is, however, no relationship between the offering price of the Common Stock and the Company's assets, earnings, book value or any other objective criteria of value. See "PLAN OF PLACEMENT."

The Company's Certificate of Incorporation authorizes the issuance of 100,000,000 shares of Common Stock, and 5,000,000 shares of Preferred Stock. At this time, 10,076,202 shares of Common Stock have been issued. Accordingly, shareholders, including those purchasing the shares offered with the sale of these Shares, will be dependent upon the judgment of management in connection with the future issuance and sale of shares of the Company's capital stock, in the event purchasers can be found for such securities.

Item                                                          Maximum Shares
                                                              Sold
Working Capital                                               $500,000.00
Legal, Accounting & Transfer Agent                            $30,000.00
         TOTAL                                                $470,000.00

Item                                                        Maximum Shares
                                                            Sold
Gross Proceeds of Offering                                  $500,000.00
LESS:    Commissions                                        $30,000.00
         Costs of Offering*                                 $5,000.00
         TOTAL PROCEEDS RECEIVED                            $465,000.00

* The Company estimates that the costs of the Offering will be as follows: (I) legal fees of approximately $1000, (ii) accounting fees of approximately $1000,
(iii) travel expenses of approximately $3000, and (iv) printing and other miscellaneous costs of approximately $1000.

Even if all the Shares offered hereunder are sold, the Company may require additional capital in order to fund continued development activities and capital expenditures that must be made. The Company's business plan is based on the premise that additional funding will be obtained through funds generated from operations, the exercising of the warrants by shareholders, additional offerings of its securities, or other arrangements. There can be no assurances that any securities offerings will take place in the future, or that funds sufficient to meet any of the foregoing needs or plans will be raised from operations or any other source.

Name                          Position                         Director
                                                               Since
Harmel S. Rayat               President and CEO                3/96
Jasbinder Chohan              Director, Secretary/Treasurer    3/96
Kundan S. Rayat               Director                         3/96

At the present time no Officer or Director receives any compensation for their services.

Although the Company is not party to any Employment or Consulting Agreements currently, it is anticipated that all future employees will enter into standard confidentiality and non-compete agreements prior to employment.

The Company currently has a policy of awarding stock options to certain directors and employees and views the issuance of stock options necessary in order to attract and maintain the services of individuals essential to the Company's long term success.

                            Before Offering                  After Offering
                      Number of      Percent of       Number of     Percent of
Name                  Shares         Class            Shares        Class
Harmel S. Rayat       4,000,000      39.7%            4,000,000     36.1%

DESCRIPTION OF COMMON STOCK

Holders of the Common Stock are entitled to one vote for each share held by them of record on the books of the Company in all matters to be voted on by the stockholders. Holders of Common Stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors out of funds legally available, and in the event of liquidation, dissolution or winding up of the Company, to share ratably in all assets remaining after payment of liabilities. Declaration of dividends on Common Stock is subject to the discretion of the Board of Directors and will depend upon a number of factors, including the future earnings, capital requirements and financial condition of the Company. The Company has not declared dividends on its Common Stock in the past and the management currently anticipates that retained earnings, if any, in the future will be applied to the expansion and development of the Company rather than the payment of dividends.

The holders of Common Stock have no preemptive or conversion rights and are not subject to further calls or assessments by the Company. There are no redemption or sinking fund provisions applicable to the Common Stock. The Common Stock currently outstanding is, and the Common Stock offered by the Company hereby will, when issued, be validly issued, fully paid and nonassessable.

There are no warrants outstanding.

Purchasers of the Shares of Common Stock offered hereby must be aware of the long-term nature of their investment and be able to bear the economic risk of their investment for an indefinite period of time. There is no public trading market for the shares of Common Stock and there can be

no assurance that any such market will develop in the foreseeable future. The Shares of Common Stock have not been registered under the Securities Act or the securities laws of any state. The right of any purchaser to sell, transfer, pledge or otherwise dispose of such securities is limited by the Securities Act and state securities laws and the regulations promulgated thereunder. The Company's stock transfer records will reflect "stop transfer" restrictions with respect to its Common Stock and the certificates representing such securities will bear the following legend:

These securities have not been registered under the Securities Act of 1933 or any applicable state securities laws, and they may not be offered for sale, sold, transferred, pledged or hypothecated without an effective registration statement under the Securities Act and under any applicable state securities laws, or an opinion of counsel, satisfactory to the company, that an exemption from such registration is available.

The conversion price from time to time in effect shall be subject to adjustment from time to time as follows:

1. In case the corporation shall at any time subdivide the outstanding shares of common stock, or shall issue a stock dividend on its outstanding common stock, the conversion price in effect immediately prior to such subdivision or the issuance of such dividend shall be proportionately decreased, and in case the corporation shall at any time combine the outstanding shares of common stock, the conversion price in effect immediately prior to such combination shall be proportionately increased, effective at the close of business on the date of such subdivision, dividend or combination, as the case may be.

2. The conversion price will be adjusted for dividends or distributions on common stock payable in company stock; subdivisions, combinations or certain reclassifications of common stock; distributions to all holders of common stock of certain rights to purchase common stock at less than current market price at the time; distributions to such holders of assets or debt securities of the Company or certain rights to purchase securities of the Company (excluding cash dividends or distributions from current or retained earnings). However, no adjustment need be made if security holders may participate in the transaction or in certain other cases.

DIVIDEND POLICY

The Company's Board of Directors presently intends to cause the Company to follow a policy of retaining earnings, if any, for the purpose of increasing the net worth and reserves of the Company. Therefore, there can be no assurance that any holder of Common Stock will receive any cash, stock or other dividends on his shares of Common Stock. To date, the Company has neither declared nor paid any dividends on its Common Stock nor does the Company anticipate that dividends will be paid in the foreseeable future. Rather, the Company intends to apply earnings to the expansion and development of its business.

TERMS OF THE OFFERING

PLAN OF PLACEMENT

The Shares are offered directly by the Company in accordance with the terms and conditions set forth in this Memorandum. The Company offers the Shares on a "best efforts, all-or-none" basis with respect to the Minimum Offering and on a "best efforts" basis with respect to the remaining Shares offered, which means that no person or participating dealer is obligated to purchase any Shares. The Company will use its best efforts to sell the Shares to investors. There can be no assurance that all or any of the Shares offered hereunder will be sold.

The Company may, in its discretion, accept subscriptions for Shares received through broker-dealers that are members of the National Association of Securities Dealers, Inc. ("NASD") and will, in connection with such sales, pay a commission of 6% of the price of each Share sold, provided not less than the Minimum Offering is sold in the offering.

LITIGATION

There are no pending legal proceedings to which the Company is a party.

LEGAL MATTERS

Gary R. Blume, Esquire, 11801 North Tatum Boulevard, Suite 108,

Phoenix, Arizona 85028, will pass upon certain matters for the Company.

ADDITIONAL INFORMATION

In the opinion of the Board of Directors of the Company, this Memorandum contains a fair presentation of the subjects discussed herein and does not contain a misstatement of a material fact or fail to state a material fact necessary to make any statements made herein not misleading. Persons to whom offers are made will be furnished with such additional information concerning the Company and other matters discussed herein as they, or their purchaser representative or other advisors, may reasonably request. The Company shall, to the extent such information is available or can be acquired without unreasonable effort or expense, endeavour to provide the information to such persons. All offerees are urged to make such personal investigations, inspections or inquiries as they deem appropriate.

SUBSCRIPTION DOCUMENT

1. The undersigned hereby subscribes for Shares of common stock (hereinafter "Shares"), as described in the Private Offering Memorandum dated October 1, 1997 ("Memorandum"), of American Alliance Corporation, a Nevada corporation (the "Company"), being offered by the Company for a purchase price of $0.50 per share and tenders herewith the sum of $ In payment therefore, together with tender of this Subscription Document.

2. The undersigned represents and warrants that he is a bona fide resident of the State of ________________.

3. The undersigned acknowledges:

a. Receipt of a copy of the Private Offering Memorandum;

b. That this subscription, if accepted by the Company, is legally binding and irrevocable;

c. That the Company has a very limited financial and operating history;

d. That the Shares have not been registered under the Securities Act of 1933, as amended, in reliance upon exemptions contained in that Act, and that the Shares have not been registered under the securities acts of any state in reliance upon exemptions contained in certain state's securities laws; and

e. That the representations and warranties provided in this Subscription Document are being relied upon by the Company as the basis for the exemption from the registration requirements of the Securities Act 1933 and of the applicable state's securities laws.

FOR NEW YORK RESIDENTS ONLY: THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

4. The undersigned represents and warrants as follows:

a. That the undersigned subscriber is purchasing said Shares as an investment and said Shares are purchased solely for the undersigned's own account;

b. That the undersigned subscriber has sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of an investment in the Shares;

c. That the undersigned subscriber is able to bear the economic risk of an investment in the Shares;

d. That the undersigned subscriber has read and is thoroughly familiar with the Private Offering Memorandum and represents and warrants that he is aware of the high degree of risk involved in making an investment in the Shares;

e. That the undersigned subscriber's decision to purchase the Shares is based solely on the information contained in the Private Offering Memorandum and on written answers to such questions as he has raised concerning the transaction;

f. That the undersigned subscriber is purchasing the Shares directly from the Company and understands that neither the Company nor the Offering is associated with, endorsed by nor related in any way with any investment company, national or local brokerage firm or other broker dealer. The undersigned subscriber's decision to purchase the Shares is not based in whole or in part on any assumption or understanding that an investment company, national or local brokerage firm or other broker dealer is involved in any way in this Offering or has endorsed or otherwise recommended an investment in these Shares.

g. That the undersigned subscriber has an investment portfolio of sufficient value that he could suitably absorb a high risk illiquid addition such as an investment in the Shares.

h. The undersigned further represents that (INITIAL APPROPRIATE CATEGORY):

[ ] I am a natural person whose individual net worth, or joint worth with my spouse at the time of purchase, exceeds $200,000;

[ ] I am a natural person who had an individual income in excess of $50,000 or joint income with my spouse in excess of $50,000 in each of the two most recent years and who reasonably expects an income in excess of those amounts in the current year.

i. That Regulation D requires the Company to conclude that each investor has sufficient knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the shares, or to verify that the investor has retained the services of one or more purchaser representatives for the purpose of evaluating the risks of investment in the shares, and hereby represents and warrants that he has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of an investment in the shares and

of making an informed investment decision and will not require a purchaser representative.

5. The undersigned understands and agrees that this subscription is made subject to each of the following terms and conditions:

a. The Company shall have the right to accept or reject this subscription, in whole or part, for any reason. Upon receipt of each Subscription Document, the Company shall have until October 31, 1997 in which to accept or reject it. If no action is taken by the Company within said period, the subscription shall be deemed to have been accepted. In each case where the subscription is rejected, the Company shall return the entire amount tendered by the subscriber, without interest;

b. That the undersigned subscriber will, from time to time, execute and deliver such documents or other instruments as may be requested by the Company in order to aid the Company in the consummation of the transactions contemplated by the Memorandum.

6. The undersigned hereby constitutes and appoints the Company, with full power of substitution, as attorney-in-fact for the purpose of executing and delivering, swearing to and filing, any documents or instruments related to or required to make any necessary clarifying or conforming changes in the Subscription Document so that such document is correct in all respects.

7. As used herein, the singular shall include the plural and the masculine shall include the feminine where necessary to clarify the meaning of this Subscription Document. All terms not defined herein shall have the same meanings as in the Memorandum.

IN WITNESS WHEREOF, the undersigned has executed this Subscription Document this __ day of __________, 1997.

Number of Shares           ___________________

Total amount tendered      $__________________

INDIVIDUAL OWNERSHIP:      __________________________________________
                           Name ( Please Type or Print )

                           __________________________________________
                           Signature

                           __________________________________________
                           Social Security Number

JOINT OWNERSHIP:           __________________________________________
                           Name   ( Please Type or Print )

                           __________________________________________
                           Signature

                           __________________________________________
                           Social Security Number

OTHER OWNERSHIP            __________________________________________
                           Name   ( Please Type or Print )

                           By:_______________________________________
                                  ( Signature )

                           __________________________________________
                                            Title

                           __________________________________________
                           Employer Indentification Number

ADDRESS:____________________________________________________________________
Street City State Zip

Phone ( Residence )_____________________ ; Phone ( Business ) _________________

I,________________________________, do hereby certify that the representations made herein concerning my financial status are true, and that all other statements contained herein are true, accurate and complete to the best of my knowledge.

Date: ___________________ , 1996. __________________________________________ Signature

CERTIFICATE OF DELIVERY

I hereby acknowledg that I delivered the foregoing Subscription Document to _________ _________________ on the _______ day of __________________ , 1996.

ACCEPTANCE

This Subscription is accepted by Far West Resources, Inc., as of the ______ day of _____________ , 1997.

Far West Resources, Inc.

By :______________________________________
Harmel Rayat, President

PRIVATE PLACEMENT MEMORANDUM

American Alliance Corporation

$2.00 Per Share
Consisting of
450,000 Shares of Common Stock

and 450,000 Four Year Share Purchase Warrants

Minimum Investment: $10,000

                                TABLE OF CONTENTS

COVER PAGE

NOTICES TO INVESTORS.......................................................... 5

WHO MAY INVEST................................................................ 6

SUMMARY OF THE OFFERING....................................................... 9

THE COMPANY................................................................... 9

RISK FACTORS..................................................................11

ESTIMATED USE OF PROCEEDS.....................................................13

MANAGEMENT....................................................................14

PRINCIPAL SHAREHOLDERS........................................................15

DESCRIPTION OF COMMON STOCK...................................................15

DIVIDEND POLICY...............................................................17

TERMS OF THE OFFERING.........................................................17

PLAN OF PLACEMENT.............................................................17

LITIGATION....................................................................17
.
LEGAL MATTERS.................................................................17

ADDITIONAL INFORMATION........................................................18

EXHIBITS

Exhibit A - Subscription Agreement

Exhibit B - Warrant to Purchase Common Stock

No part of this document may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the Company.

PRIVATE PLACEMENT MEMORANDUM

American Alliance Corporation

450,000 Shares and 450,000 Four Year Share Purchase Warrants Offering Price - $2.00 per Shares

Minimum Investment: 5,000 Shares ($10,000)

American Alliance Corporation (the "Company") is offering 450,000 Shares (the "Shares"), along with 450,000 4 year Share Purchase Warrants (the "Warrants"). The Shares are offered at a price of $2.00 per Share, with a minimum purchase of 5,000 Shares ($10,000), and are accompanied by Warrants to purchase an equal amount of shares at a price of $2.00 within 4 years of closing of this offering. The Shares are offered for sale directly by the Company, subject to the terms and conditions set forth herein. See "TERMS OF THE OFFERING" and "PLAN OF PLACEMENT".

THESE ARE SPECULATIVE SECURITIES AND INVOLVE A HIGH
DEGREE OF RISK. SEE "RISK FACTORS

The securities offered by this Memorandum have not been registered under the Securities Act of 1993, as amended (the "Securities Act"), and are offered for sale in reliance upon the exemption provided by, or pursuant to regulations promulgated under, Section 4(2), Regulation D, Rule 505 of such Act relating to transactions not involving a public offering. Because the securities are not registered under the Securities Act or the securities laws of any state, the investor must hold them indefinitely unless (I) they are registered under the Securities Act and any applicable state securities laws, (ii) the investor obtains an opinion of counsel satisfactory to the Company to the effect that registration is not required under the Securities Act and applicable state laws or (iii) the Company permits the sale, transfer, or other disposition of the securities by the investor as provided herein. No public market exists for any of the securities offered hereby and such a market for resale of these securities may never develop.

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED OR APPROVED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THESE AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

                                            Price to       Selling            Proceeds to
                                            Investors      Commissions (1)    the Company
Per Share                                   $2.00          $0.14              $1.86
Total Minimum Offering (100,000 Shares)     $200,000.00    $28,000.00         $172,000.00
Total Maximum Offering (450,000 Shares)     $900,000.00    $63,000.00         $837,000.00

(1) The Company is offering the Shares directly and no person is obligated to purchase any Shares. The Company may, in its discretion, accept subscriptions for Shares received through broker-dealers that are members of the National Association of Securities Dealers, Inc. ("NASD") and will, in connection with such sales, pay a commission of 7% of the price of each Shares sold, provided not fewer than 100,000 Shares (the "Minimum Offering") are sold in the offering. See "PLAN OF PLACEMENT." The offering is made on a "best efforts, all-or-none" basis with respect to the Minimum Offering and on a "best efforts" basis with respect to the remaining Shares offered. See "TERMS OF THE OFFERING."

The date of this Memorandum is December 1, 1997

This offering will be withdrawn on December 31, 1997, unless the offering is extended one or more times by the Company without notice to subscribers to a date not later than January 31, 1998 (the "Termination Date") as provided herein. See "TERMS OF THE OFFERING."

This Memorandum does not constitute an offer to sell or a solicitation of an offer to purchase the Shares in any state or to any person to whom it is unlawful to make such offer or solicitation and does not constitute an offer to sell or solicitation to any member of the general public. This Memorandum has been prepared solely for the benefit of investors interested in purchasing the Shares offered hereby. Any distribution of this Memorandum to any person other than the recipient (or to those individuals whom he may retain to advise him with respect thereto) is unauthorized, and any reproduction of this Memorandum in whole or in part, or the divulgence of any of its contents without the prior written consent of the Company, is unauthorized and prohibited.

The recipient, by accepting delivery of this Memorandum, agrees to return this Memorandum and all documents furnished herewith to the Company or its representatives if the recipient does not purchase any of the Shares offered hereby or if the offering is withdrawn or terminated.

The delivery of this Memorandum at any time subsequent to the date hereof does not imply that the information contained herein is correct as of any time subsequent to the date of this Memorandum.

No dealer or salesperson has been authorized to give any information or make any representations or warranties, either express or implied, other than those that may be contained in this Memorandum or other documents included herein or in written supplements to this Memorandum and, if given or made, such information, representations and warranties must not be relied upon by any potential investor.

During the course of the offering and prior to sale, each prospective investor and his purchaser representative(s), if any, are invited to ask questions of and obtain additional information from the Company and its directors concerning the terms and conditions of the offering, the Company and its officers and directors and any other relevant matters, including, but not limited to, additional information to verify the accuracy of the information set forth in the Memorandum. The Company will provide such information to the extent it is available or can be acquired without unreasonable effort or expense. Answers to questions and additional information may be given only by the Company and its duly authorized representatives. Information, representations or warranties received from any other person or in any other manner must not be relied upon as having been authorized by the Company.

This Memorandum contains statements, believed to be accurate, based on certain documents, but reference is hereby made to the actual documents for complete information relating thereto. Copies of such documents are attached as exhibits to this Memorandum or are on file at the Company. All such statements are qualified in their entirety by this reference. All documents relating to this investment will be made available to any prospective subscriber and his purchaser representative(s) upon request.

The Shares are offered by the Company subject to receipt and acceptance of subscriptions, the right to reject any subscription in whole or in part, withdrawal, cancellation or modification of the offer without notice to investors and certain other conditions.

NOTICES TO ALL INVESTORS:

1. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

2. EXCEPT AS SET FORTH HEREIN, NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, OTHER THAN THOSE WHICH , MAY BE CONTAINED HEREIN. IF MADE, SUCH INFORMATION MUST NOT BE RELIED UPON. NO STATEMENT CONTAINED HEREIN SHALL BE DEEMED TO MODIFY, SUPPLEMENT OR CONSTRUE IN ANY WAY THE PROVISIONS OF ANY DOCUMENTS ATTACHED HERETO AS EXHIBITS OR ANY OF THE LANGUAGE CONTAINED THEREIN, AND ANY STATEMENT MADE HEREIN WITH RESPECT TO ANY SUCH DOCUMENT IS QUALIFIED BY REFERENCE THERETO.

3. THESE SECURITIES ARE OFFERED SOLELY BY THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM AND ARE SUBJECT TO PRIOR SALE. THE COMPANY RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO WITHDRAW OR MODIFY THIS OFFER WITHOUT PRIOR NOTICE OR TO REJECT ANY SUBSCRIPTION IN WHOLE OR IN PART OR TO ALLOT TO ANY PROSPECTIVE INVESTOR FEWER THAN THE INTERESTS APPLIED FOR BY SUCH INVESTOR.

4. AN INVESTMENT IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. (SEE "RISK FACTORS") THESE RISK FACTORS INCLUDE, AMONG OTHER RISKS, THE FOLLOWING:

A. THERE IS LIMITED MARKET FOR RESALE OF THE STOCK; HOWEVER, THERE ARE NO ASSURANCES THAT THIS MARKET WILL EXIST WHEN THE INVESTOR DESIRES TO LIQUIDATE. IN ADDITION, TRANSFERABILITY OF THE STOCK IS RESTRICTED AND INVESTORS MAY FIND IT DIFFICULT OR IMPOSSIBLE TO LIQUIDATE THEIR INVESTMENT AT A TIME WHEN THEY MAY DESIRE TO DO SO. INVESTORS MAY, THEREFORE, BE REQUIRED TO BEAR THE ECONOMIC RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. ANY SALE OR TRANSFER OF THE STOCK OR NOTES MAY ALSO RESULT IN ADVERSE TAX CONSEQUENCES.

B. THIS OFFERING INVOLVES SUBSTANTIAL RISKS INHERENT IN ANY BUSINESS WHICH IS A START-UP AND, IN PARTICULAR, A BUSINESS WHICH IS DEPENDENT UPON THE COMMERCIAL SUCCESS OF UNTESTED PRODUCTS.

5. NO OFFERING LITERATURE OR ADVERTISING IN WHATEVER FORM IS AUTHORIZED FOR USE IN CONNECTION WITH THIS OFFERING EXCEPT THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM AND THE DOCUMENTS LISTED HEREIN. NO PERSON OR SALESMAN HAS BEEN AUTHORIZED TO MAKE ANY REPRESENTATION OR GIVE ANY INFORMATION WITH RESPECT TO THESE INVESTMENT SHARES, EXCEPT THE INFORMATION CONTAINED IN SUCH DOCUMENTS. ONLY THOSE REPRESENTATIONS EXPRESSLY SET FORTH IN SUCH DOCUMENTS MAY BE RELIED UPON IN CONNECTION WITH THE OFFERING OF THESE INVESTMENT SHARES.

WHO MAY INVEST

The Shares are being offered through this Memorandum without registration under the Securities Act pursuant to the exemption from the registration requirements of such Act provided by Section 4(2) thereof and Rule 505 of Regulation D promulgated thereunder.

General Suitability Standards

The Shares will be sold only to a person:

(I) who makes a minimum purchase of 5,000 Shares for $10,000, unless the Company, in its sole discretion, permits the purchase of fewer Shares;

(ii) who complies with the terms of the Subscription Agreement;

(iii)who represents that they have been furnished and have carefully read and relied solely on the information contained in this Memorandum, including all exhibits, amendments and supplements hereto;

(iv) who either:

(a) represents in writing that they qualify as an Accredited Investor or

(b) if they are a Non-Accredited Investor, demonstrates in the Subscription Agreement that they, either alone or with their Purchaser Representative(s), has such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of an investment in the Shares (investors will also be required to provide the Company with any additional information or documentation that may be required to verify such qualifications);

(v) whose overall commitment to investments which are not readily marketable is not disproportionate to their net worth, and whose acquisition of the Shares will not cause such overall commitment to become excessive; and

(vi) who has no need for liquidity with respect to their investment in the Shares and is capable of suffering the loss of their entire investment in any Shares purchased.

Accredited Investor is defined in the Securities Act of 1933, Rule 501(a) and shall mean any person who comes within any of the following categories, or who the issuer reasonable believes comes within any of the following categories, at the time of the sale of the securities to that person:

1. Bank, Broker, Insurance Company, Investment Company, Small Business Investment Company, State Plan, or Employee Benefit Plan. Any bank as defined in section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; any insurance company as defined in section 2(13) of the Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act; any small business investment company licensed by the US Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; and plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

2. Private Business Development Company. Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

3. Organization, Partnership, Corporate or Other Entity Investor. Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

4. Officer of Issuer. Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;

5. $1,000,000 Net Worth. Any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of this purchase exceeds $1,000,000;

6. $200,000 Income. Any natural person who had individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same level of income in the current year;

7. Trust. Any trust, with total assets in excess of $5,000,000 not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii); and

8. Entity. Any entity in which all of the equity owners are accredited investors.

A breach of an investor of any of its representations made to the Company in the Subscription Agreement which results in a loss by the Company of its registration exemption provided by Regulation D will cause such investor to be liable to the Company for all damages and losses proximately caused thereby.

The bases for establishing the foregoing standards include the relative lack of liquidity of the Shares and the risks inherent in an investment in the Company. The foregoing standards represent minimum requirements for a prospective purchaser and the Company reserves the right to reject any subscription notwithstanding compliance with these standards. Shares may also be sold to corporations, partnerships, trusts and other entities meeting the foregoing requirements.

Certain states in which the Company may qualify its Shares for sale may establish suitability standards and minimum purchase requirements more restrictive than those set by the Company. Those requirements, if any, will be set forth in a supplement to this Memorandum.

SUMMARY OF THE OFFERING

The following material is intended to summarize information contained elsewhere in this Memorandum. This summary is qualified in its entirety by express reference to the Memorandum and the exhibits referred to therein. Each prospective investor is urged to read this Memorandum in its entirety, as well as various filings submitted to the SEC and other regulatory bodies.

The Company was incorporated under the laws of the State of Utah, on July 14, 1983 under the name of Far West Gold, Inc., with an authorized capital of 50,000,000 shares of common stock with a par value of $.001 per share.

On July 14, 1983, the Company, in connection with a 504 D offering issued 5,141,000 shares of common stock for cash at $.003 per share or $15,000. During October 1984, the Company issued 13,009,000 shares of common stock at $.01 per share or $130,090, less offering expenses of the offering of $27,547, for a net cash of $102,543. For the year ending December 31, 1990, the Company received a capital contribution of $4,364 to pay expenses of the Company. For the year ending December 31, 1991, the Company received a capital contribution of $100 to pay expenses of the Company. For the year ending December 31, 1995, the Company issued 20,000,000 shares of common stock at $.001 per share to satisfy current liabilities in the amount of $20,000.

On April 15, 1996, the Company effected a reverse split of 500:1, with the par value remaining at $.001. On April 16, 1996, the Company issued 4,000,000 shares of common stock at $.0005 or $2000 for services to Mr. Harmel Rayat, a director of the Company. On May 9, 1996, in connection with a 504 D offering, the Company issued 4,000,000 shares of common stock at $.05 per share for cash in the amount of $200,000. On May 9, 1996, shareholders of the Company approved a name change to Far West Resources, Inc and approved an increase in the number of shares that the Company has authority to issue to 105,000,000, of which 100,000,000 shares shall be at $.001 par value common stock, and 5,000,000shares shall be $.10 par valued preferred stock.

On June 30, 1997, the shareholders of the Company approved a name change to American Alliance Corporation, approved a change in state registration from Utah to Nevada, approved an increase in common share par value from $.001 to $.00001 and preferred par value from $.10 to $.0001, and approved the 1997 Employee and Director Stock Option Plan for 1,250,000 shares. On June 30, 1997, the Company issued 2,000,000 common shares at $.15 per share in connection with a 504 D offering. On October 14, 1997, the Company issued 1,000,000 common shares at $.50 per share in connection with a 504 D offering.

The Company is a developmental stage company that currently actively seeking to acquire or enter into a technology based business endeavor.

The Offering
------------

Shares Offered                                                450,000

Offering Price                                                $2.00 Per Share

Common Stock Outstanding (Dec 1/97)                           11,076,202

Common Stock to be Outstanding After the Offering

                  MINIMUM OFFERING:                           11,176,202
                  MAXIMUM OFFERING:                           11,526,202

Estimated Proceeds of the Offering

                  MINIMUM OFFERING:                           $200,000
                  MAXIMUM OFFERING:                           $900,000

The Company plans to use the proceeds from this Offering for working capital purposes while the Company seeks potential technology related acquisitions or business opportunities. See -- "ESTIMATED USE OF PROCEEDS."

Even if all or substantially all of the Shares offered hereunder are sold, the Company may be dependent upon, among other things, the receipt of additional capital. The Company plans to seek the additional financing it will require through the sale of additional debt or equity securities, through venture capital or through strategic partnerships. There is no assurance that such additional financing will be available when required in order to proceed with the business plan and complete preparations to continue operations. See "RISK FACTORS - Dependence Upon Offering Proceeds and Need for Additional Capital."

Investment in the Common Stock involves a high degree of risk. Potential investors should carefully consider the information under the caption, "RISK FACTORS."

RISK FACTORS

Investment in the Company involves a number of risks. In addition to the risks and investment considerations discussed elsewhere in the Memorandum, the following factors should be considered prior to purchasing the Shares offered through this Memorandum.

SUMMARY OF RISKS

The economic success of an investment in the Shares depends, to a large degree, upon many factors over which the Company has not control. These factors include general economic, industrial and international conditions; inflation or deflation; fluctuation in interest rates; the Company's competition; and governmental regulations.

The Shares are a very speculative investment. Although the Company is confident it will succeed in its endeavours, Investors could lose their entire investment.

The Company's officers, directors and other personnel have engaged in a variety of businesses and have been involved in business financing, operations and marketing, but their experience in these fields is limited. There is no assurance that such experience will result in the success for the Company.

No assurance can be given that the Company will be successful in achieving its stated objectives, that the Company's business, once business is undertaken by the Company, will generate cash sufficient to operate the business of the Company or that other parties entering into agreements relating to the Company's business will meet their respective obligations.

Much of the operating capital of the Company over the past several years has come from cash provided by private fundings. The Company has not been profitable in the past nor has it generated sufficient capital to cover the on-going operating and expansion expenses.

There is no assurance that such additional financing will be available when required in order to proceed with the business plan or that the Company's ability to respond to competition or changes in the market place. If the Company is unsuccessful in securing the additional capital needed to continue operations within the time required, the Company will not be in a position to continue operations and the purchasers of Shares in this offering may lose their entire investment.

The purchasers of the Shares being offered hereby will furnish a substantial portion of the Company's initial capital. Therefore the capital invested by the purchasers of the Shares will be at risk immediately in the business of the Company. Even if all Shares offered hereunder are sold, the investors in the Shares should assume that the shares of Common Stock will have only a minimal book value.

In order to satisfy the requirements of the exemptions from registration under the Securities Act and the various applicable state securities laws, each subscriber must acquire his Common Stock for investment purposes only and not with a view to distribution or resale. Consequently, certain conditions of such federal and state securities laws must be satisfied prior to any disposition of the securities. Some of these conditions may include a minimum holding period, availability of certain reports, including financial statements, from the Company, limitation on the percentage of the securities sold and the manner in which the securities are sold. The Company can prohibit any sale, transfer or other disposition unless it receives an opinion of counsel provided at the Shareholder's expense, in a form satisfactory to the Company, stating that the proposed sale, transfer or other disposition will not result in a violation of the applicable federal and state securities laws and regulations or other applicable federal and state laws and regulations. It is likely that Rule 144, which permits sales of unregistered securities under certain conditions, will be available to the shareholders of the Company. No public market exists for the Common Stock, and no assurances can be given that such a market for the resale of such securities will develop. Consequently, owners of the securities may have to hold them indefinitely and may not be able to liquidate their investment in the Company or pledge such securities as collateral for a loan in the event of an emergency.

The Company's Board of Directors presently intends to cause the Company to follow a policy of retaining earnings, if any, for the purpose of increasing the net worth and reserves of the Company. Therefore, there can be no assurance that any holder of Common Stock will receive any cash, stock or other dividends on his shares of Common Stock. Future dividends on Common Stock, if any, will depend on future earnings, financing requirements and other factors.

The offering price of the Common Stock was arbitrarily set by the Company. No independent investment banking firm was retained to assist in determining the offering price. The offering price of the Common Stock may not bear any relation to the actual value of the Common Stock. Among the factors considered in determining the price were estimates of the prospects of the Company, the background and capital contributions of Management and current conditions in the securities markets and the Company's industry. There is, however, no relationship between the offering price of the Common Stock and the Company's assets, earnings, book value or any other objective criteria of value.
See "PLAN OF PLACEMENT."

The Company's Certificate of Incorporation authorizes the issuance of 100,000,000 shares of Common Stock, and 5,000,000 shares of Preferred Stock. At this time,11,076,202 shares of Common Stock have been issued. Accordingly, shareholders, including those purchasing the shares offered with the sale of these Shares, will be dependent upon the judgment of management in connection with the future issuance and sale of shares of the Company's capital stock, in the event purchasers can be found for such securities.

Item                                          Maximum Shares
                                              Sold
Working Capital                               $900,000.00
Legal, Accounting & Transfer Agent            $3,000.00

         TOTAL                                $897,000.00

NET FUNDS AVAILABLE TO COMPANY

The net proceeds of the sale if all of the Shares offered are sold will be $837,000. The Company will incur expenses in connection with the offering in an amount anticipated not to exceed $63,000 for commissions, legal fees, accounting fees, filing fees, printing costs and other expenses. If the maximum number of Shares are sold, the Company anticipates that the net proceeds to it from the Offering will be as follows:

Item                                    Maximum Shares
                                        Sold
Gross Proceeds of Offering              $900,000.00
LESS:    Commissions                    $63,000.00
         Costs of Offering*             $3,000.00
         TOTAL PROCEEDS RECEIVED        $834,000.00

* The Company estimates that the costs of the Offering will be as follows: (I) legal fees of approximately $1000, (ii) accounting fees of approximately $1000,
(iii) filing fees of approximately $0, and (iv) printing and other miscellaneous costs of approximately $1000.

Even if all the Shares offered hereunder are sold, the Company may require additional capital in order to fund continued development activities and capital expenditures that must be made. The Company's business plan is based on the premise that additional funding will be obtained through funds generated from operations, the exercising of the warrants by shareholders, additional offerings of its securities, or other arrangements. There can be no assurances that any securities offerings will take place in the future, or that funds sufficient to meet any of the foregoing needs or plans will be raised from operations or any other source.

Name                         Position                          Director
                                                               Since
Harmel S. Rayat              President and CEO                 3/96
Jasbinder Chohan             Director, Secretary/Treasurer     3/96
Kundan S. Rayat              Director                          3/96

At the present time no Officer or Director receives any compensation for their services.

Although the Company is not party to any Employment or Consulting Agreements currently, it is anticipated that all future employees will enter into standard confidentiality and non-compete agreements prior to employment.

The Company currently has a policy of awarding stock options to certain directors and employees and views the issuance of stock options necessary in order to attract and maintain the services of individuals essential to the Company's long term success.

                                  Before Offering                After Offering
                             Number of      Percent of      Number of    Percent of
Name                         Shares         Class           Shares       Class
Harmel S. Rayat              4,000,000      36.1%           4,000,000    34.7%

DESCRIPTION OF COMMON STOCK

Holders of the Common Stock are entitled to one vote for each share held by them of record on the books of the Company in all matters to be voted on by the stockholders. Holders of Common Stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors out of funds legally available, and in the event of liquidation, dissolution or winding up of the Company, to share ratably in all assets remaining after payment of liabilities. Declaration of dividends on Common Stock is subject to the discretion of the Board of Directors and will depend upon a number of factors, including the future earnings, capital requirements and financial condition of the Company. The Company has not declared dividends on its Common Stock in the past and the management currently anticipates that retained earnings, if any, in the future will be applied to the expansion and development of the Company rather than the payment of dividends.

The holders of Common Stock have no preemptive or conversion rights and are not subject to further calls or assessments by the Company. There are no redemption or sinking fund provisions

applicable to the Common Stock. The Common Stock currently outstanding is, and the Common Stock offered by the Company hereby will, when issued, be validly issued, fully paid and nonassessable.

Prior to this offering there were no warrants outstanding. .

Purchasers of the Shares of Common Stock offered hereby must be aware of the long-term nature of their investment and be able to bear the economic risk of their investment for an indefinite period of time. There is no public trading market for the shares of Common Stock and there can be no assurance that any such market will develop in the foreseeable future. The Shares of Common Stock have not been registered under the Securities Act or the securities laws of any state. The right of any purchaser to sell, transfer, pledge or otherwise dispose of such securities is limited by the Securities Act and state securities laws and the regulations promulgated thereunder. The Company's stock transfer records will reflect "stop transfer" restrictions with respect to its Common Stock and the certificates representing such securities will bear the following legend:

These securities have not been registered under the Securities Act of 1933 or any applicable state securities laws, and they may not be offered for sale, sold, transferred, pledged or hypothecated without an effective registration statement under the Securities Act and under any applicable state securities laws, or an opinion of counsel, satisfactory to the company, that an exemption from such registration is available.

The conversion price from time to time in effect shall be subject to adjustment from time to time as follows:

1. In case the corporation shall at any time subdivide the outstanding shares of common stock, or shall issue a stock dividend on its outstanding common stock, the conversion price in effect immediately prior to such subdivision or the issuance of such dividend shall be proportionately decreased, and in case the corporation shall at any time combine the outstanding shares of common stock, the conversion price in effect immediately prior to such combination shall be proportionately increased, effective at the close of business on the date of such subdivision, dividend or combination, as the case may be.

2. The conversion price will be adjusted for dividends or distributions on common stock payable in company stock; subdivisions, combinations or certain reclassifications of common stock; distributions to all holders of common stock of certain rights to

purchase common stock at less than current market price at the time; distributions to such holders of assets or debt securities of the Company or certain rights to purchase securities of the Company (excluding cash dividends or distributions from current or retained earnings). However, no adjustment need be made if security holders may participate in the transaction or in certain other cases.

DIVIDEND POLICY

The Company's Board of Directors presently intends to cause the Company to follow a policy of retaining earnings, if any, for the purpose of increasing the net worth and reserves of the Company. Therefore, there can be no assurance that any holder of Common Stock will receive any cash, stock or other dividends on his shares of Common Stock. To date, the Company has neither declared nor paid any dividends on its Common Stock nor does the Company anticipate that dividends will be paid in the foreseeable future. Rather, the Company intends to apply earnings to the expansion and development of its business.

TERMS OF THE OFFERING

PLAN OF PLACEMENT

The Shares are offered directly by the Company in accordance with the terms and conditions set forth in this Memorandum. The Company offers the Shares on a "best efforts, all-or-none" basis with respect to the Minimum Offering and on a "best efforts" basis with respect to the remaining Shares offered, which means that no person or participating dealer is obligated to purchase any Shares. The Company will use its best efforts to sell the Shares to investors. There can be no assurance that all or any of the Shares offered hereunder will be sold.

The Company may, in its discretion, accept subscriptions for Shares received through broker-dealers that are members of the National Association of Securities Dealers, Inc. ("NASD") and will, in connection with such sales, pay a commission of 7% of the price of each Share sold, provided not less than the Minimum Offering is sold in the offering.

LITIGATION

There are no pending legal proceedings to which the Company is a party.

LEGAL MATTERS

Gary R. Blume, Esquire, 11801 North Tatum Boulevard, Suite 108,

Phoenix, Arizona 85028, will pass upon certain matters for the Company.

ADDITIONAL INFORMATION

In the opinion of the Board of Directors of the Company, this Memorandum contains a fair presentation of the subjects discussed herein and does not contain a misstatement of a material fact or fail to state a material fact necessary to make any statements made herein not misleading. Persons to whom offers are made will be furnished with such additional information concerning the Company and other matters discussed herein as they, or their purchaser representative or other advisors, may reasonably request. The Company shall, to the extent such information is available or can be acquired without unreasonable effort or expense, endeavour to provide the information to such persons. All offerees are urged to make such personal investigations, inspections or inquiries as they deem appropriate.

EXHIBITS

American Alliance Corporation - Exhibit A

SUBSCRIPTION DOCUMENT

1. The undersigned hereby subscribes for Shares of common stock (hereinafter "Shares"), as described in the Private Offering Memorandum dated December 1, 1997 ("Memorandum"), of American Alliance Corporation, a Nevada corporation (the "Company"), being offered by the Company for a purchase price of $2.00 per share, along with 4 year warrants to accompany an equivalent amountg of shares at $2.00, and tenders herewith the sum of $ In payment therefore, together with tender of this Subscription Document.

2. The undersigned represents and warrants that he is a bona fide resident of the State of __________.

3. The undersigned acknowledges:

a. Receipt of a copy of the Private Offering Memorandum;

b. That this subscription, if accepted by the Company, is legally binding and irrevocable;

c. That the Company has a very limited financial and operating history;

d. That the Shares have not been registered under the Securities Act of 1933, as amended, in reliance upon exemptions contained in that Act, and that the Shares have not been registered under the securities acts of any state in reliance upon exemptions contained in certain state's securities laws; and

e. That the representations and warranties provided in this Subscription Document are being relied upon by the Company as the basis for the exemption from the registration requirements of the Securities Act 1933 and of the applicable state's securities laws.

FOR NEW YORK RESIDENTS ONLY: THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

4. The undersigned represents and warrants as follows:

a. That the undersigned subscriber is purchasing said Shares as an investment and said Shares are purchased solely for the undersigned's own account;

b. That the undersigned subscriber has sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of an investment in the Shares;

c. That the undersigned subscriber is able to bear the economic risk of an investment in the Shares;

d. That the undersigned subscriber has read and is thoroughly familiar with the Private Offering Memorandum and represents and warrants that he is aware of the high degree of risk involved in making an investment in the Shares;

e. That the undersigned subscriber's decision to purchase the Shares is based solely on the information contained in the Private Offering Memorandum and on written answers to such questions as he has raised concerning the transaction;

f. That the undersigned subscriber is purchasing the Shares directly from the Company and understands that neither the Company nor the Offering is associated with, endorsed by nor related in any way with any investment company, national or local brokerage firm or other broker dealer. The undersigned subscriber's decision to purchase the Shares is not based in whole or in part on any assumption or understanding that an investment company, national or local brokerage firm or other broker dealer is involved in any way in this Offering or has endorsed or otherwise recommended an investment in these Shares.

g. That the undersigned subscriber has an investment portfolio of sufficient value that he could suitably absorb a high risk illiquid addition such as an investment in the Shares.

h. The undersigned further represents that (INITIAL APPROPRIATE CATEGORY):

[ ] I am a natural person whose individual net worth, or joint worth with my spouse at the time of purchase, exceeds $200,000;

[ ] I am a natural person who had an individual income in excess of $50,000 or joint income with my spouse in excess of $50,000 in each of the two most recent years and who reasonably expects an income in excess of those amounts in the current year.

i. That Regulation D requires the Company to conclude that each investor has sufficient knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the shares, or to verify that the investor has retained the services of one or more purchaser representatives for the purpose of evaluating the risks of investment in the shares, and hereby represents and warrants that he has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of an investment in the shares and of making an informed investment decision and will not require a purchaser representative.

5. The undersigned understands and agrees that this subscription is made subject to each of the following terms and conditions:

a. The Company shall have the right to accept or reject this subscription, in whole or part, for any reason. Upon receipt of each Subscription Document, the Company shall have until December 31, 1997 in which to accept or reject it. If no action is taken by the Company within said period, the subscription shall be deemed to have been accepted. In each case where the subscription is rejected, the Company shall return the entire amount tendered by the subscriber, without interest;

b. That the undersigned subscriber will, from time to time, execute and deliver such documents or other instruments as may be requested by the Company in order to aid the Company in the consummation of the transactions contemplated by the Memorandum.

6. The undersigned hereby constitutes and appoints the Company, with full power of substitution, as attorney-in-fact for the purpose of executing and delivering, swearing to and filing, any documents or instruments related to or required to make any necessary clarifying or conforming changes in the Subscription Document so that such document is correct in all respects.

7. As used herein, the singular shall include the plural and the masculine shall include the feminine where necessary to clarify the meaning of this Subscription Document. All terms not defined herein shall have the same meanings as in the Memorandum.

IN WITNESS WHEREOF, the undersigned has executed this Subscription Document this __ day of __________, 1997.

Number of Shares           ___________________

Total amount tendered      $__________________

INDIVIDUAL OWNERSHIP:      __________________________________________
                           Name ( Please Type or Print )

                           __________________________________________
                           Signature

                           __________________________________________
                           Social Security Number

JOINT OWNERSHIP:           __________________________________________
                           Name   ( Please Type or Print )

                           __________________________________________
                           Signature

                           __________________________________________
                           Social Security Number

OTHER OWNERSHIP            __________________________________________
                           Name   ( Please Type or Print )

                           By:_______________________________________
                                  ( Signature )

                           __________________________________________
                                            Title

                           __________________________________________
                           Employer Indentification Number

ADDRESS:____________________________________________________________________
Street City State Zip

Phone ( Residence )_____________________ ; Phone ( Business ) _________________

I,________________________________, do hereby certify that the representations made herein concerning my financial status are true, and that all other statements contained herein are true, accurate and complete to the best of my knowledge.

Date: ___________________ , 1996. __________________________________________ Signature

CERTIFICATE OF DELIVERY

I hereby acknowledg that I delivered the foregoing Subscription Document to _________ _________________ on the _______ day of __________________ , 1996.

ACCEPTANCE

This Subscription is accepted by Far West Resources, Inc., as of the ______ day of _____________ , 1997.

Far West Resources, Inc.

By :______________________________________
Director

Warrant to Purchase Common Stock - Exhibit B

THIS WARRANT AND THE SECURITIES PURCHASED UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS (I) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER.

Warrant to Purchase 450,000 common shares.

Warrant to Purchase Common Stock of
AMERICAN ALLIANCE CORPORATION

THIS CERTIFIES that or any subsequent holder hereof ("Holder"), has the right to purchase from AMERICAN ALLIANCE CORPORATION, a Nevada corporation (the "Company"), not more than 450,000 fully paid and nonassessable shares of the Company's common stock, $.00001 par value ("Common Stock"), at a price equal to the Exercise Price of $2.00 per share at any time during the period beginning on the Date of Issuance (defined below) and ending at 5:00 p.m., PST, on , 2001 (the "Exercise Period").

Holder agrees with the Company that this Warrant to Purchase Common Stock of American Alliance Corporation (this "Warrant") is issued and all rights hereunder shall be held subject to all of the conditions, limitations and provisions set forth herein.

1. Date of Issuance

This Warrant shall be deemed to be issued on ___________, 1997 ("Date of Issuance").

2. Exercise

(a) Manner of Exercise. During the Exercise Period, this Warrant may be exercised as to all or any lesser number of full shares of Common Stock covered hereby upon surrender of this Warrant, with the Exercise Form attached hereto as Exhibit A (the "Exercise Form") duly executed, together with the full Exercise Price (as defined below) for each share of Common Stock as to which this Warrant is exercised, at the office of the Company, 1628 West 1st Ave, Suite 216, Vancouber, BC, V6J 1G1 Attention: President, or at such other office or agency as the Company may designate

in writing, by overnight mail, with an advance copy of the Exercise Form sent to the Company by facsimile (such surrender and payment of the Exercise Form sent to the Company by facsimile (such surrender and payment of the Exercise Price hereinafter called the "Exercise of this Warrant").

(b) Date of Exercise. The "Date of Exercise" of the Warrant shall be defined as the date that the advance copy of the Exercise Form is sent by facsimile to the Company, provided that the original Warrant and Exercise Form are received by the Company within five (5) business days thereafter. The original Warrant and Exercise Form must be received within five (5) business days of the Date of Exercise, or the exercise may, at the Company's option, be considered void. Alternatively, the Date of Exercise shall be defined as the date the original Exercise Form is received by the Company, if Holder has not sent advance notice by facsimile.

(c) Cancellation of Warrant. This Warrant shall be cancelled upon the Exercise of this Warrant, and, as soon as practical after the Date of Exercise, Holder shall be entitled to receive Common Stock for the number of shares purchased upon such Exercise of this Warrant, and if this Warrant is not exercised in full, Holder shall be entitled to receive a new Warrant (containing terms identical to this Warrant) representing any unexercised portion of this Warrant in addition to such Common Stock.

(d) Holder of Record. Each person in whose name any Warrant for shares of Common Stock is issued shall, for all purposes, be deemed to be the Holder of record of such shares on the Date of Exercise, irrespective of the date of delivery of the Common Stock purchased upon Exercise of this Warrant. Nothing in this Warrant shall be construed as conferring upon Holder any rights as a stockholder of the Company.

3. Transfer and Registration

(a) Transfer Rights. Subject to the provisions of Section 7 of this Warrant, this Warrant may be transferred on the books of the Company, in whole or in part, in person or by attorney, upon surrender of this Warrant properly endorsed. This Warrant shall be cancelled upon such surrender and, as soon as practicable thereafter, the person to whom such transfer is made shall be entitled to receive a new Warrant or Warrants as to the portion of this Warrant transferred, and Holder shall be entitled to receive a new Warrant as to the portion hereof retained.

4. Anti-Dilution Adjustments

(a) Stock Dividend. If the Company shall at any time declare a dividend payable in shares of Common Stock, then Holder, upon Exercise of this Warrant after the record date for the determination of holders of Common Stock entitled to receive such dividend, shall be entitled to receive upon Exercise of this Warrant, in addition to the

number of shares of Common Stock as to which this Warrant is exercised, such additional shares of Common Stock as such Holder would have received had this Warrant been exercised immediately prior to such record date and the Exercise Price will be proportionately adjusted.

(b) Recapitalization or Reclassification. If the Company shall at any time effect a recapitalization, reclassification or other similar transaction of such character that the shares of Common Stock shall be changed into or become exchangeable for a larger or smaller number of shares, then upon the effective date thereof, the number of shares of Common Stock which Holder shall be entitled to purchase upon the Exercise of this Warrant shall be increased or decreased, as the case may be, in direct proportion to the increase or decrease in the number of shares of Common Stock by reason of such recapitalization, reclassification or similar transaction, and the Exercise Price shall be, in the case of an increase in the number of shares, proportionally decreased and, in the case of decrease in the number of shares, proportionally increased. The Company shall give Holder the same notice it provides to holders of Common Stock of any transaction described in this Section 4(b).

(c) Distributions. If the Company shall at any time distribute for no consideration to holders of Common Stock cash, evidences of indebtedness or other securities or assets (other than cash dividends or distributions payable out of earned surplus or net profits for the current or preceding year) then, in any such case, Holder shall be entitled to receive, upon Exercise of this Warrant, with respect to each share of Common Stock issuable upon such exercise, the amount of cash or evidences of indebtedness or other securities or assets which Holder would have been entitled to receive with respect to each such share of Common Stock as a result of the happening of such event had this Warrant been exercised immediately prior to the record date or other date fixing shareholders to be affected by such event (the "Determination Date") or, in lieu thereof, if the Board of Directors of the Company should so determine at the time of such distribution, a reduced Exercise Price determined by multiplying the Exercise Price on the Determination Date by a fraction, the numerator of which is the result of such Exercise Price reduced by the value of such distribution applicable to one share of Common Stock (such value to be determined by the Board of Directors of the Company in its discretion) and the denominator of which is such Exercise Price.

(d) Notice of Consolidation or Merger. In the event of a merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock shall be changed into the same or a different number of shares of the same or another class or classes of stock or securities or other assets of the Company or another entity or there is a sale of all or substantially or other assets of the Company or another entity or there is a sale of all or substantially all the Company's assets (a "Corporate Change"), then this Warrant shall be assumed

by the acquiring entity or any affiliate thereof and thereafter this Warrant shall be exercisable into such class and type of securities or other assets as Holder would have received had Holder exercised this Warrant immediately prior to such Corporate Change; provided, however, that Company may not affect any Corporate Change unless it first shall have given thirty (30) business days notice to Holder hereof of any Corporate Change.

(e) Exercise Price Adjusted. As used in this Warrant, the term "Exercise Price" shall mean the purchase price per share specified in Section 3 of this Warrant until the occurrence of an event stated in subsection
(a), (b) or (c) of this Section 4 and thereafter shall mean said price as adjusted from time to time in accordance with the provisions of said subsection. No such adjustment under this Section 4 shall be made unless such adjustment would change the Exercise Price at the time by $.01 or more; provided, however, that all adjustments not so made shall be deferred and made when the aggregate thereof would change the Exercise Price at the time by $.01 or more. No adjustment made pursuant to any provision of this Section 4 shall have the net effect of increasing the total consideration payable upon Exercise of this Warrant in respect of all the Common Stock as to which this Warrant may be exercised. Notwithstanding anything to the contrary contained herein, the Exercise Price shall not be reduced to an amount below the par value of the Common Stock.

(f) Adjustments: Additional Shares, Securities or Assets. In the event that at any time, as a result of an adjustment made pursuant to this
Section 4, Holder shall, upon Exercise of this Warrant, become entitled to receive shares and/or other securities or assets (other than Common Stock) then, wherever appropriate, all references herein to shares of Common Stock shall be deemed to refer to and include such shares and/or other securities or assets; and thereafter the number of such shares and/or other securities or assets shall be subject to adjustment from time to time in a manner and upon terms as nearly equivalent as practicable to the provisions of this Section 4.

5. Fractional Interests

No fractional shares or scrip representing fractional shares shall be issuable upon the Exercise of this Warrant, but on Exercise of this Warrant, Holder may purchase only a whole number of shares of Common Stock. If, on Exercise of this Warrant, Holder would be entitled to a fractional share of Common Stock or a right to acquire a fractional share of Common Stock, such fractional share shall be disregarded and the number of shares of Common Stock issuable upon exercise shall be the next higher number of shares.

6. Reservation of Shares

The Company shall at all times reserve for issuance such number of authorized and unissued shares of Common Stock (or other securities substituted therefor as herein above provided) as shall be sufficient for the Exercise of this Warrant and payment of the Exercise Price. The Company covenants and agrees that upon the Exercise of this Warrant, all shares of Common Stock issuable upon such exercise shall be duly and validly issued, fully paid, nonassessable and not subject to preemptive rights, rights of first refusal or similar rights of any person or entity.

7. Restrictions on Transfer

(a) Registration or Exemption Required.. This Warrant and the Common Stock issuable on Exercise hereof have not been registered under the Securities Act of 1933, as amended, and may not be sold, transferred, pledged, hypothecated or otherwise disposed of in the absence of registration or the availability of an exemption from registration under said Act and applicable state laws. All shares of Common Stock issued upon Exercise of this Warrant shall bear an appropriate legend to such effect, if applicable.

(b) Assignment. If Holder can provide the Company with reasonably satisfactory evidence that the conditions of (a) above regarding registration or exemption have been satisfied, Holder may sell, transfer, assign, pledge or otherwise dispose of this substantially in the form of the Assignment attached hereto as Exhibit B, indicating the person or persons to whom the Warrant shall be assigned and the respective number of warrants to be assigned to each assignee. The Company shall effect the assignment within ten days, and shall deliver to the assignee(s) designated by Holder a Warrant or Warrants of like tenor and terms for the appropriate number of shares.

(c) Investment Intent. The Warrant and Common Stock issuable upon conversion are intended to be held for investment purposes and not with an intent to distribution, as defined in the Act.

8. Benefit of this Warrant

Nothing in this Warrant shall be construed to confer upon any person other than the Company and Holder any legal or equitable right, remedy or claim under this Warrant and this Warrant shall be for the sole and exclusive benefit of the Company and Holder.

9. Applicable Law

This Warrant is issued under and shall for all purposes be governed by and construed in accordance with the laws of the state of Nevada, without giving effect to conflict of law provisions thereof.

10. Loss of Warrant

Upon receipt by the Company of evidence of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) of indemnity or security reasonably satisfactory to the Company, and upon surrender and cancellation of this Warrant, if mutilated, the Company shall execute and deliver a new Warrant of like tenor and date.

IN WITNESS WHEREOF, the undersigned has executed this Warrant as of the ___ day of ________, 1997.

AMERICAN ALLIANCE CORPORATION

By:__________________________
Director

EXHIBIT A

EXERCISE FORM

TO: MEDCARE TECHNOLOGIES, INC.

The undersigned hereby irrevocably exercises the right to purchase of the shares of common stock (the "Common Stock") of AMERICAN ALLIANCE CORPORATION., a Nevada corporation (the "Company"), evidenced by the attached warrant (the "Warrant"), and herewith makes payment of the exercise price with respect to such shares in full, all in accordance with the conditions and provisions of said Warrant.

1. The undersigned agrees not to offer, sell, transfer or otherwise dispose of any of the Common Stock obtained on exercise of the Warrant, except in accordance with the provisions of Section 7(a) of the Warrant.

2. The undersigned requests that stock certificates for such shares be issued free of any restrictive legend, if appropriate, and a warrant representing any unexercised portion hereof be issued, pursuant to the Warrant in the name of the undersigned and delivered to the undersigned at the address set forth below:

Date:

Signature

Printed Name

Address

NOTICE:

The signature to the foregoing Exercise Form must correspond to the name as written upon the face of the attached Warrant in every particular, without alteration or enlargement or any change whatsoever.

EXHIBIT B

ASSIGNMENT

(To be executed by the registered Holder desiring to transfer of the Warrant)

FOR VALUE RECEIVED, the undersigned holder of the attached warrant (the "Warrant") hereby sells, assigns and transfers unto the person or persons below named the right to purchase shares of the common stock of AMERICAN ALLIANCE CORPORATION (the "Company") evidence by the attached Warrant and does hereby irrevocably constitute and appoint _____________________ attorney to transfer the said Warrant on the books of the Company, with full power of substitution in the premises.

Dated:

Signature

Fill in for new registration of Warrant:

Name

Address

Please print name and address of
assignee (including zip code number)

NOTICE:

The signature to the foregoing Assignment must correspond to the name as written upon the face of the attached Warrant in every particular, without alteration or enlargement or any change whatsoever.

TRADEMARK APPLICATION

IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
APPLICATION FOR REGISTRATION OF A SERVICE MARK
PRINCIPAL REGISTER

Mark: WHATSONLINE

Class: International Class 42

Basis for Filing: Sect. I(b)of the Trademark Act of 1946, as amended

To: BOX NEW APP-FEE

The Assistant Commissioner For Trademarks
2900 Crystal Drive
Arlington, VA 22202-3513

The Applicant, American Alliance, Inc., a Nevada corporation, having an established place of business at 216-1628 West 1" Ave, Vancouver, British Columbia, Canada V6J 101, and a mailing address of same, has a bonafide intention to use the mark identified above and in the accompanying drawing in Commerce on or in connection with COMPUTER SERVICES, namely, PROVIDING COMPILATION SERVICES OF LIVE AND ON DEMAND AUDIO AND VIDEO GLOBAL COMPUTER NETWORK STREAMING AND GLOBAL COMPUTER NETWORK PUBLISHING MEDIA CONTENT SERVICES, and seeks registration of said mark in the United States Patent and Trademark Office tinder Section 1(b) of the Trademark Act of 1946, as amended, in International Class 42.

Applicant intends to use, the mark on screen and downloaded printed copies of its global computer network offered services, as well as promotional materials standard for the ilidustry.

The Applicant hereby appoints Kathleen T. Petrich, Registration No. 37,205, having a mailing address of Petrich Law Firm PLLC, P.O. Box 15316, Seattle, WA 98115 USA, and physical address at 3513 NE 45th, Suite 2-West, Seattle, Washington 98105 USA as attorney with full power of substitution andrevocation, to prosecute this application, to make alterations and amendments therein, to receive the registration thereof, and to transact all business in the United States Patent and Trademark Office in connection therewith.

Further, the undersigned, Harmel S. Rayatt, being warned that willful false statements and the like so made are punishable by fine or imprisonment, or both, under section 1001 of Title 18 of the United States Code, and may jeopardize the validity of the apptication or any registrationresultin2r, therefrom, declares that: he is the president of Applicant corporation and is authorized to execute this Declaration on behalf of said coTporation, that said corporation is believed to be the owner of the trademark sought to be registered; that the Applicant has a bonafide intent to use the mark in commerce on or in connection with the goods or services specified in this application; to the best of his knowledge and belief, no other entity has the right to use such mark in commerce, either in identicalform or in such near resemblance thereto as to be likely, when applied to the goods or services of such other entity, to cause confusion, or to cause mistake, or to deceive; and that the facts set forth in this application are true; and all statements made of his own knowledge are true and all statements made on information and belief are believed to be true.

SIGNED AT___________(city), _________________ (Province),

_______________ (Country) this _____th day of March 1999.

American Alliance, Inc.

/s/ Harmel S. Rayat
_____________________________
Harmel S. Rayatt, President

Applicant: American Alliance, Inc.

Address: 216-1628 West 1st Ave.

Vancouver, British Columbia
Canada, V6J 1G1

Date of First Use:       Not Applicable, filed under
                         S. 1(b) of the Trademark Acot of 1946,
                         as amended



First Use, Interstate    Not applicable, filed under
Commerce Regulatable     S. 1(b) of the Trademark Act of 1946,
by Congress:             as amended


Goods or Services:       COMPUTER SERVICES, namely, PROVIDING
                         COMPILATION SERVICES OF LIVE AN ON
                         DEMAND AUDIO AND VIDEO GLOBAL
                         COMPUTER NETWORK STREAMING AND
                         GLOBAL COMPUTER NETWORK
                         PUBLISHING MEDIA CONTENT SERVICES