Document:

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                                   ADEXA, INC.

                        2000 EMPLOYEE STOCK PURCHASE PLAN

                     (AS ADOPTED EFFECTIVE August 24, 2000)

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                                TABLE OF CONTENTS
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                                                                            PAGE
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SECTION 1.  PURPOSE OF THE PLAN..............................................1

SECTION 2.  ADMINISTRATION OF THE PLAN.......................................1
         (a)  Committee Composition..........................................1
         (b)  Committee Responsibilities.....................................1

SECTION 3.  ENROLLMENT AND PARTICIPATION.....................................1
         (a)  Offering Periods...............................................1
         (b)  Accumulation Periods...........................................1
         (c)  Enrollment.....................................................1
         (d)  Duration of Participation......................................2
         (e)  Applicable Offering Period.....................................2

SECTION 4.  EMPLOYEE CONTRIBUTIONS...........................................2
         (a)  Frequency of Payroll Deductions................................2
         (b)  Amount of Payroll Deductions...................................2
         (c)  Changing Withholding Rate......................................3
         (d)  Discontinuing Payroll Deductions...............................3
         (e)  Limit on Number of Elections...................................3

SECTION 5.  WITHDRAWAL FROM THE PLAN.........................................3
         (a)  Withdrawal.....................................................3
         (b)  Re-Enrollment After Withdrawal.................................3

SECTION 6.  CHANGE IN EMPLOYMENT STATUS......................................3
         (a)  Termination of Employment......................................3
         (b)  Leave of Absence...............................................3
         (c)  Death..........................................................4

SECTION 7.  PLAN ACCOUNTS AND PURCHASE OF SHARES.............................4
         (a)  Plan Accounts..................................................4
         (b)  Purchase Price.................................................4
         (c)  Number of Shares Purchased.....................................4
         (d)  Available Shares Insufficient..................................4
         (e)  Issuance of Stock..............................................4
         (f)  Tax Withholding................................................5
         (g)  Unused Cash Balances...........................................5
         (h)  Stockholder Approval...........................................5

SECTION 8.  LIMITATIONS ON STOCK OWNERSHIP...................................5
         (a)  Five Percent Limit.............................................5
         (b)  Dollar Limit...................................................5

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SECTION 9.  RIGHTS NOT TRANSFERABLE..........................................6

SECTION 10.  NO RIGHTS AS AN EMPLOYEE........................................6

SECTION 11.  NO RIGHTS AS A STOCKHOLDER......................................7

SECTION 12.  SECURITIES LAW REQUIREMENTS.....................................7

SECTION 13.  STOCK OFFERED UNDER THE PLAN....................................7
         (a)  Authorized Shares..............................................7
         (b)  Anti-Dilution Adjustments......................................7
         (c)  Reorganizations................................................7

SECTION 14.  AMENDMENT OR DISCONTINUANCE.....................................7

SECTION 15.  DEFINITIONS.....................................................8
         (a)  Accumulation Period............................................8
         (b)  Board..........................................................8
         (c)  Code...........................................................8
         (d)  Committee......................................................8
         (e)  Company........................................................8
         (f)  Compensation...................................................8
         (g)  Corporate Reorganization.......................................8
         (h)  Eligible Employee..............................................8
         (i)  Exchange Act...................................................8
         (j)  Fair Market Value..............................................8
         (k)  IPO............................................................9
         (l)  Offering Period................................................9
         (m)  Participant....................................................9
         (n)  Participating Company..........................................9
         (o)  Plan...........................................................9
         (p)  Plan Account...................................................9
         (q)  Purchase Price.................................................9
         (r)  Stock..........................................................9
         (s)  Subsidiary.....................................................9

SECTION 16.  EXECUTION......................................................10
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                                   ADEXA, INC.

                        2000 EMPLOYEE STOCK PURCHASE PLAN

SECTION 1.  PURPOSE OF THE PLAN.

                  The Board adopted the Plan effective as of the date of the
IPO. The purpose of the Plan is to provide Eligible Employees with an
opportunity to increase their proprietary interest in the success of the
Company by purchasing Stock from the Company on favorable terms and to pay
for such purchases through payroll deductions. The Plan is intended to
qualify under section 423 of the Code.

SECTION 2.  ADMINISTRATION OF THE PLAN.

                  (a) COMMITTEE COMPOSITION. The Committee shall administer the
Plan. The Committee shall consist exclusively of one or more directors of the
Company, who shall be appointed by the Board.

                  (b) COMMITTEE RESPONSIBILITIES. The Committee shall interpret
the Plan and make all other policy decisions relating to the operation of the
Plan. The Committee may adopt such rules, guidelines and forms as it deems
appropriate to implement the Plan. The Committee's determinations under the Plan
shall be final and binding on all persons.

SECTION 3.  ENROLLMENT AND PARTICIPATION.

                  (a) OFFERING PERIODS. While the Plan is in effect, two
overlapping Offering Periods shall commence in each calendar year. The Offering
Periods shall consist of the 24-month periods commencing on each May 1 and
November 1, except that the first Offering Period shall commence on the date of
the IPO and end on October 31, 2002.

                  (b) ACCUMULATION PERIODS. While the Plan is in effect, two
Accumulation Periods shall commence in each calendar year. The Accumulation
Periods shall consist of the six-month periods commencing on each May 1 and
November 1, except that the first Accumulation Period shall commence on the date
of the IPO and end on April 30, 2001.

                  (c) ENROLLMENT. Any individual who, on the day preceding the
first day of an Offering Period, qualifies as an Eligible Employee may elect to
become a Participant in the Plan for such Offering Period by executing the
enrollment form prescribed for this purpose by the Committee. The enrollment
form shall be filed with the Company at the prescribed location not later than
10 business days prior to the commencement of such Offering Period, except that
the Company may announce a deadline that is less than 10 business days prior to
the commencement of the first Offering Period.

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                  (d) DURATION OF PARTICIPATION. Once enrolled in the Plan, a
Participant shall continue to participate in the Plan until he or she ceases to
be an Eligible Employee, withdraws from the Plan under Section 5(a) or reaches
the end of the Accumulation Period in which his or her employee contributions
were discontinued under Section 4(d) or 8(b). A Participant who discontinued
employee contributions under Section 4(d) or withdrew from the Plan under
Section 5(a) may again become a Participant, if he or she then is an Eligible
Employee, by following the procedure described in Subsection (c) above. A
Participant whose employee contributions were discontinued automatically under
Section 8(b) shall automatically resume participation at the beginning of the
earliest Accumulation Period ending in the next calendar year, if he or she then
is an Eligible Employee.

                  (e) APPLICABLE OFFERING PERIOD. For purposes of calculating
the Purchase Price under Section 7(b), the applicable Offering Period shall be
determined as follows:

                  (i) Once a Participant is enrolled in the Plan for an Offering
         Period, such Offering Period shall continue to apply to him or her
         until the earliest of (A) the end of such Offering Period, (B) the end
         of his or her participation under Subsection (d) above or (C)
         re-enrollment for a subsequent Offering Period under Paragraph (ii) or
         (iii) below.

                  (ii) In the event that the Fair Market Value of Stock on the
         last trading day before the commencement of the Offering Period for
         which the Participant is enrolled is higher than on the last trading
         day before the commencement of any subsequent Offering Period, the
         Participant shall automatically be re-enrolled for such subsequent
         Offering Period.

                  (iii) Any other provision of the Plan notwithstanding, the
         Company (at its sole discretion) may determine prior to the
         commencement of any new Offering Period that all Participants shall be
         re-enrolled for such new Offering Period.

                  (iv) When a Participant reaches the end of an Offering Period
         but his or her participation is to continue, then such Participant
         shall automatically be re-enrolled for the Offering Period that
         commences immediately after the end of the prior Offering Period.

SECTION 4.  EMPLOYEE CONTRIBUTIONS.

                  (a) FREQUENCY OF PAYROLL DEDUCTIONS. A Participant may
purchase shares of Stock under the Plan solely by means of payroll deductions.
Payroll deductions, as designated by the Participant pursuant to Subsection (b)
below, shall occur on each payday during participation in the Plan.

                  (b) AMOUNT OF PAYROLL DEDUCTIONS. An Eligible Employee shall
designate on the enrollment form the portion of his or her Compensation that he
or she elects to have withheld for the purchase of Stock. Such portion shall be
a whole percentage of the Eligible Employee's Compensation, but not less than 1%
nor more than 15%.

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                  (c) CHANGING WITHHOLDING RATE. If a Participant wishes to
change the rate of payroll withholding, he or she may do so by filing a new
enrollment form with the Company at the prescribed location at any time. The new
withholding rate shall be effective as soon as reasonably practicable after the
Company has received such form. The new withholding rate shall be a whole
percentage of the Eligible Employee's Compensation, but not less than 1% nor
more than 15%.

                  (d) DISCONTINUING PAYROLL DEDUCTIONS. If a Participant wishes
to discontinue employee contributions entirely, he or she may do so by filing a
new enrollment form with the Company at the prescribed location at any time.
Payroll withholding shall cease as soon as reasonably practicable after the
Company has received such form. (In addition, employee contributions may be
discontinued automatically pursuant to Section 8(b).) A Participant who has
discontinued employee contributions may resume such contributions by filing a
new enrollment form with the Company at the prescribed location. Payroll
withholding shall resume as soon as reasonably practicable after the Company has
received such form.

                  (e) LIMIT ON NUMBER OF ELECTIONS. No Participant shall make
more than two elections under Subsection (c) or (d) above during any
Accumulation Period.

SECTION 5.  WITHDRAWAL FROM THE PLAN.

                  (a) WITHDRAWAL. A Participant may elect to withdraw from the
Plan by filing the prescribed form with the Company at the prescribed location
at any time before the last day of an Accumulation Period. As soon as reasonably
practicable thereafter, payroll deductions shall cease and the entire amount
credited to the Participant's Plan Account shall be refunded to him or her in
cash, without interest. No partial withdrawals shall be permitted.

                  (b) RE-ENROLLMENT AFTER WITHDRAWAL. A former Participant who
has withdrawn from the Plan shall not be a Participant until he or she
re-enrolls in the Plan under Section 3(c). Re-enrollment may be effective only
at the commencement of an Offering Period.

SECTION 6.  CHANGE IN EMPLOYMENT STATUS.

                  (a) TERMINATION OF EMPLOYMENT. Termination of employment as an
Eligible Employee for any reason, including death, shall be treated as an
automatic withdrawal from the Plan under Section 5(a). (A transfer from one
Participating Company to another shall not be treated as a termination of
employment.)

                  (b) LEAVE OF ABSENCE. For purposes of the Plan, employment
shall not be deemed to terminate when the Participant goes on a military leave,
a sick leave or another BONA FIDE leave of absence, if the leave was approved by
the Company in writing. Employment, however, shall be deemed to terminate 90
days after the Participant goes on a leave, unless a contract or statute
guarantees his or her right to return to work. Employment shall be deemed to
terminate in any event when the approved leave ends, unless the Participant
immediately returns to work.

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                  (c) DEATH. In the event of the Participant's death, the amount
credited to his or her Plan Account shall be paid to a beneficiary designated by
him or her for this purpose on the prescribed form or, if none, to the
Participant's estate. Such form shall be valid only if it was filed with the
Company at the prescribed location before the Participant's death.

SECTION 7.  PLAN ACCOUNTS AND PURCHASE OF SHARES.

                  (a) PLAN ACCOUNTS. The Company shall maintain a Plan Account
on its books in the name of each Participant. Whenever an amount is deducted
from the Participant's Compensation under the Plan, such amount shall be
credited to the Participant's Plan Account. Amounts credited to Plan Accounts
shall not be trust funds and may be commingled with the Company's general assets
and applied to general corporate purposes. No interest shall be credited to Plan
Accounts.

                  (b) PURCHASE PRICE. The Purchase Price for each share of Stock
purchased at the close of an Accumulation Period shall be the lower of:

                  (i) 85% of the Fair Market Value of such share on the last
         trading day in such Accumulation Period; or

                  (ii) 85% of the Fair Market Value of such share on the last
         trading day before the commencement of the applicable Offering Period
         (as determined under Section 3(e)) or, in the case of the first
         Offering Period under the Plan, 85% of the price at which one share of
         Stock is offered to the public in the IPO.

                  (c) NUMBER OF SHARES PURCHASED. As of the last day of each
Accumulation Period, each Participant shall be deemed to have elected to
purchase the number of shares of Stock calculated in accordance with this
Subsection (c), unless the Participant has previously elected to withdraw from
the Plan in accordance with Section 5(a). The amount then in the Participant's
Plan Account shall be divided by the Purchase Price, and the number of shares
that results shall be purchased from the Company with the funds in the
Participant's Plan Account. The foregoing notwithstanding, no Participant shall
purchase more than 5,000 shares of Stock with respect to any Accumulation Period
nor more than the amounts of Stock set forth in Sections 8(b) and 13(a). The
Committee may determine with respect to all Participants that any fractional
share, as calculated under this Subsection (c), shall be (i) rounded down to the
next lower whole share or (ii) credited as a fractional share.

                  (d) AVAILABLE SHARES INSUFFICIENT. In the event that the
aggregate number of shares that all Participants elect to purchase during an
Accumulation Period exceeds the maximum number of shares remaining available for
issuance under Section 13(a), then the number of shares to which each
Participant is entitled shall be determined by multiplying the number of shares
available for issuance by a fraction. The numerator of such fraction is the
number of shares that such Participant has elected to purchase, and the
denominator of such fraction is the number of shares that all Participants have
elected to purchase.

                  (e) ISSUANCE OF STOCK. Certificates representing the shares of
Stock purchased by a Participant under the Plan shall be issued to him or her as
soon as reasonably

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practicable after the close of the applicable Accumulation Period, except
that the Committee may determine that such shares shall be held for each
Participant's benefit by a broker designated by the Committee (unless the
Participant has elected that certificates be issued to him or her). Shares
may be registered in the name of the Participant or jointly in the name of
the Participant and his or her spouse as joint tenants with right of
survivorship or as community property.

                  (f) TAX WITHHOLDING. To the extent required by applicable
federal, state, local or foreign law, a Participant shall make arrangements
satisfactory to the Company for the satisfaction of any withholding tax
obligations that arise in connection with the Plan. The Company shall not be
required to issue any shares of Stock under the Plan until such obligations are
satisfied.

                  (g) UNUSED CASH BALANCES. An amount remaining in the
Participant's Plan Account that represents the Purchase Price for any fractional
share shall be carried over in the Participant's Plan Account to the next
Accumulation Period. Any amount remaining in the Participant's Plan Account that
represents the Purchase Price for whole shares that could not be purchased by
reason of Subsection (c) above, Section 8(b) or Section 13(a) shall be refunded
to the Participant in cash, without interest.

                  (h) STOCKHOLDER APPROVAL. Any other provision of the Plan
notwithstanding, no shares of Stock shall be purchased under the Plan unless and
until the Company's stockholders have approved the adoption of the Plan.

SECTION 8.  LIMITATIONS ON STOCK OWNERSHIP.

                  (a) FIVE PERCENT LIMIT. Any other provision of the Plan
notwithstanding, no Participant shall be granted a right to purchase Stock under
the Plan if such Participant, immediately after his or her election to purchase
such Stock, would own stock possessing more than 5% of the total combined voting
power or value of all classes of stock of the Company or any parent or
Subsidiary of the Company. For purposes of this Subsection (a), the following
rules shall apply:

                  (i) Ownership of stock shall be determined after applying the
         attribution rules of section 424(d) of the Code;

                  (ii) Each Participant shall be deemed to own any stock that he
         or she has a right or option to purchase under this or any other plan;
         and

                  (iii) Each Participant shall be deemed to have the right to
         purchase 5,000 shares of Stock under this Plan with respect to each
         Accumulation Period.

                  (b) DOLLAR LIMIT. Any other provision of the Plan
notwithstanding, no Participant shall purchase Stock with a Fair Market Value in
excess of the following limit:

                  (i) In the case of Stock purchased during an Offering Period
         that commenced in the current calendar year, the limit shall be equal
         to (A) $25,000 minus (B) the Fair Market Value of the Stock that the
         Participant previously

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         purchased in the current calendar year (under this Plan and all
         other employee stock purchase plans of the Company or any parent or
         Subsidiary of the Company).

                  (ii) In the case of Stock purchased during an Offering Period
         that commenced in the immediately preceding calendar year, the limit
         shall be equal to (A) $50,000 minus (B) the Fair Market Value of the
         Stock that the Participant previously purchased (under this Plan and
         all other employee stock purchase plans of the Company or any parent or
         Subsidiary of the Company) in the current calendar year and in the
         immediately preceding calendar year.

                  (iii) In the case of Stock purchased during an Offering Period
         that commenced in the second preceding calendar year, the limit shall
         be equal to (A) $75,000 minus (B) the Fair Market Value of the Stock
         that the Participant previously purchased (under this Plan and all
         other employee stock purchase plans of the Company or any parent or
         Subsidiary of the Company) in the current calendar year and in the two
         preceding calendar years.

For purposes of this Subsection (b), the Fair Market Value of Stock shall be
determined in each case as of the beginning of the Offering Period in which such
Stock is purchased. Employee stock purchase plans not described in section 423
of the Code shall be disregarded. If a Participant is precluded by this
Subsection (b) from purchasing additional Stock under the Plan, then his or her
employee contributions shall automatically be discontinued and shall resume at
the beginning of the earliest Accumulation Period ending in the next calendar
year (if he or she then is an Eligible Employee).

SECTION 9.  RIGHTS NOT TRANSFERABLE.

                  The rights of any Participant under the Plan, or any
Participant's interest in any Stock or moneys to which he or she may be entitled
under the Plan, shall not be transferable by voluntary or involuntary assignment
or by operation of law, or in any other manner other than by beneficiary
designation or the laws of descent and distribution. If a Participant in any
manner attempts to transfer, assign or otherwise encumber his or her rights or
interest under the Plan, other than by beneficiary designation or the laws of
descent and distribution, then such act shall be treated as an election by the
Participant to withdraw from the Plan under Section 5(a).

SECTION 10.  NO RIGHTS AS AN EMPLOYEE.

                  Nothing in the Plan or in any right granted under the Plan
shall confer upon the Participant any right to continue in the employ of a
Participating Company for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Participating Companies or of
the Participant, which rights are hereby expressly reserved by each, to
terminate his or her employment at any time and for any reason, with or without
cause.

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SECTION 11.  NO RIGHTS AS A STOCKHOLDER.

                  A Participant shall have no rights as a stockholder with
respect to any shares of Stock that he or she may have a right to purchase under
the Plan until such shares have been purchased on the last day of the applicable
Accumulation Period.

SECTION 12.  SECURITIES LAW REQUIREMENTS.

                  Shares of Stock shall not be issued under the Plan unless the
issuance and delivery of such shares comply with (or are exempt from) all
applicable requirements of law, including (without limitation) the Securities
Act of 1933, as amended, the rules and regulations promulgated thereunder, state
securities laws and regulations, and the regulations of any stock exchange or
other securities market on which the Company's securities may then be traded.

SECTION 13.  STOCK OFFERED UNDER THE PLAN.

                  (a) AUTHORIZED SHARES. The number of shares of Stock available
for purchase under the Plan shall be 750,000 (subject to adjustment pursuant to
this Section 13). On May 1 of each year, commencing with May 1, 2001, the
aggregate number of shares of Stock available for purchase during the life of
the Plan shall automatically be increased by the number of shares necessary to
cause the number of shares then available for purchase to be restored to 750,000
(subject to adjustment pursuant to this Section 13).

                  (b) ANTI-DILUTION ADJUSTMENTS. The aggregate number of shares
of Stock offered under the Plan, the 5,000-share limitation described in Section
7(c) and the price of shares that any Participant has elected to purchase shall
be adjusted proportionately by the Committee for any increase or decrease in the
number of outstanding shares of Stock resulting from a subdivision or
consolidation of shares or the payment of a stock dividend, any other increase
or decrease in such shares effected without receipt or payment of consideration
by the Company, the distribution of the shares of a Subsidiary to the Company's
stockholders or a similar event.

                  (c) REORGANIZATIONS. Any other provision of the Plan
notwithstanding, immediately prior to the effective time of a Corporate
Reorganization, the Offering Period and Accumulation Period then in progress
shall terminate and shares shall be purchased pursuant to Section 7, unless the
Plan is continued or assumed by the surviving corporation or its parent
corporation. The Plan shall in no event be construed to restrict in any way the
Company's right to undertake a dissolution, liquidation, merger, consolidation
or other reorganization.

SECTION 14.  AMENDMENT OR DISCONTINUANCE.

                  The Board shall have the right to amend, suspend or terminate
the Plan at any time and without notice. Except as provided in Section 13, any
increase in the aggregate number of shares of Stock to be issued under the Plan
shall be subject to approval by a vote of the stockholders of the Company. In
addition, any other amendment of the Plan shall be subject to approval by a vote
of the stockholders of the Company to the extent required by an applicable

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law or regulation. The Plan shall terminate automatically 20 years after its
adoption by the Board, unless (a) the Plan is extended by the Board and (b)
the extension is approved within 12 months by a vote of the stockholders of
the Company.

SECTION 15.  DEFINITIONS.

                  (a) "ACCUMULATION PERIOD" means a six-month period during
which contributions may be made toward the purchase of Stock under the Plan, as
determined pursuant to Section 3(b).

                  (b) "BOARD" means the Board of Directors of the Company, as
constituted from time to time.

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

                  (d) "COMMITTEE" means a committee of the Board, as described
in Section 2.

                  (e) "COMPANY" means Adexa, Inc., a Delaware corporation.

                  (f) "COMPENSATION" means (i) the total compensation paid in
cash to a Participant by a Participating Company, including salaries, wages,
bonuses, incentive compensation, commissions, overtime pay and shift premiums,
plus (ii) any pre-tax contributions made by the Participant under section 401(k)
or 125 of the Code. "Compensation" shall exclude all non-cash items, moving or
relocation allowances, cost-of-living equalization payments, car allowances,
tuition reimbursements, imputed income attributable to cars or life insurance,
severance pay, fringe benefits, contributions or benefits received under
employee benefit plans, income attributable to the exercise of stock options,
and similar items. The Committee shall determine whether a particular item is
included in Compensation.

                  (g) "CORPORATE REORGANIZATION" means:

                  (i) The consummation of a merger or consolidation of the
         Company with or into another entity or any other corporate
         reorganization; or

                  (ii) The sale, transfer or other disposition of all or
         substantially all of the Company's assets or the complete liquidation
         or dissolution of the Company.

                  (h) "ELIGIBLE EMPLOYEE" means any employee of a Participating
Company whose customary employment is for more than five months per calendar
year and for more than 20 hours per week. The foregoing notwithstanding, an
individual shall not be considered an Eligible Employee if his or her
participation in the Plan is prohibited by the law of any country which has
jurisdiction over him or her or if he or she is subject to a collective
bargaining agreement that does not provide for participation in the Plan.

                  (i) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.

                  (j) "FAIR MARKET VALUE" means the market price of Stock,
determined by the Committee as follows:

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                  (i) If the Stock was traded on The Nasdaq National Market or
         The Nasdaq SmallCap Market on the date in question, then the Fair
         Market Value shall be equal to the last-transaction price quoted for
         such date by such Market;

                  (ii) If the Stock was traded on a stock exchange on the date
         in question, then the Fair Market Value shall be equal to the closing
         price reported by the applicable composite transactions report for such
         date; or

                  (iii) If none of the foregoing provisions is applicable, then
         the Committee shall determine the Fair Market Value in good faith on
         such basis as it deems appropriate.

Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in THE WALL STREET JOURNAL or as reported
directly to the Company by Nasdaq or a stock exchange.

Such determination shall be conclusive and binding on all persons.

                  (k) "IPO" means the initial offering of Stock to the public
pursuant to a registration statement filed by the Company with the Securities
and Exchange Commission.

                  (l) "OFFERING PERIOD" means a 24-month period with respect to
which the right to purchase Stock may be granted under the Plan, as determined
pursuant to Section 3(a).

                  (m) "PARTICIPANT" means an Eligible Employee who elects to
participate in the Plan, as provided in Section 3(c).

                  (n) "PARTICIPATING COMPANY" means (i) the Company and (ii)
each present or future Subsidiary designated by the Committee as a Participating
Company.

                  (o) "PLAN" means this Adexa, Inc. 2000 Employee Stock Purchase
Plan, as it may be amended from time to time.

                  (p) "PLAN ACCOUNT" means the account established for each
Participant pursuant to Section 7(a).

                  (q) "PURCHASE PRICE" means the price at which Participants may
purchase Stock under the Plan, as determined pursuant to Section 7(b).

                  (r) "STOCK" means the Common Stock of the Company.

                  (s) "SUBSIDIARY" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company, if
each of the corporations other than the last corporation in the unbroken chain
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

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SECTION 16.  EXECUTION.

                  To record the adoption of the Plan by the Board on
August 24, 2000, the Company has caused its duly authorized officer to execute
this document in the name of the Company.

                                           ADEXA, INC.

                                           By: /s/ J. Timothy Romer
                                               --------------------------------
                                           Title:  Chief Financial Officer
                                                  -----------------------------

                                       10<PAGE>

                            LOAN, PLEDGE AND OPTION AGREEMENT

    THIS LOAN, PLEDGE AND OPTION AGREEMENT (the "Agreement") is made as of
July 31, 1997 between PARAGON MANAGEMENT SYSTEMS, INC., a California
corporation ("Lender" or the "Company"), K. CYRUS HADAVI ("Borrower") and
MANATT, PHELPS & PHILLIPS, LLP ("Pledgeholder"), and provides as follows:

                                    RECITALS

    A.  Borrower desires to borrow Two Hundred Thousand Dollars ($200,000.00)
from Lender on the terms and subject to the conditions of this Agreement.

    B.  To induce Lender to make the loan, Borrower desires to pledge and
grant to Lender a security interest in certain assets of Borrower, as more
fully described herein.

    C.  Borrower also desires to provide Lender an option to purchase certain
capital stock owned by Borrower, upon the occurrence of certain events, as
more fully described below.

    D.  The parties desire Pledgeholder to secure the Collateral and perform
other functions, as more fully described below.

    THE PARTIES AGREE AS FOLLOWS:

1.  LOAN.

    1.1  ADVANCE OF FUNDS.  Subject to the terms and conditions of this
Agreement Lender hereby loans to Borrower and Borrower hereby borrows the
amount of Two Hundred Thousand Dollars ($200,000.00) (the "Loan") which Loan
shall be evidenced by a Promissory Note in the form attached hereto as
Exhibit A (the "Note").

    1.2  LIMITATION ON RECOURSE.  In the event of any breach or default by
Borrower of his obligations under this Agreement or the Note, and
notwithstanding any other provision of this Agreement or the Note to the
contrary, the sole recourse of Lender shall be the Collateral (as such term
is defined in Section 2.1 hereof), and neither Borrower nor any person liable
by, through or under Borrower shall be personally liable therefor, nor shall
any of the property or assets of Borrower or of any such person, other than
the Collateral, be subject to garnishment, attachment or other process for
the enforcement of judgments or the collection of debts, except that the
foregoing limitations shall not apply to any breach or default concerning any
representation or warranty of Borrower or of any covenant of Borrower
concerning the ownership of or transfer of any interest in the Collateral.
This paragraph shall take priority over and be deemed to modify and supersede
any inconsistent provision contained in this Agreement or the Note, and any
such provision shall be null and void to the extent of the inconsistency.

    1.3  ACCELERATION.  Lender may, at its option and in its sole discretion,
declare the then outstanding principal balance of the Loan, together with all
accrued and unpaid interest thereon, to be immediately due and payable if any
of the following (each of which is referred to herein as an "Event of
Default") shall occur:

                                        1.

<PAGE>

         (a)  the failure of Borrower to pay any amount under the Note when
due, and upon written notice thereof given to Borrower, if such failure shall
not have been cured or waived within ten (10) business days of such notice;

         (b)  the commencement of any proceeding against Borrower in
bankruptcy, or otherwise seeking any reorganization, arrangement or similar
relief, or the appointment of a receiver, trustee, or liquidator to take
possession of the assets of Borrower, or the commencement of any other
proceeding under any law for the relief of creditors;

         (c)  any assignment by Borrower for the benefit of Borrower's
creditors; or

         (d)  any other breach by Borrower of any of Borrower's
representations, warranties or obligations under this Agreement which is not
cured to the satisfaction of Lender within thirty (30) days after notice of
such breach is deemed given pursuant to Section 6.6.

2.  PLEDGE AS SECURITY.

         2.1  PLEDGE AND GRANT OF SECURITY INTEREST. As security for all of
Borrower's obligations and liabilities to Lender whether now existing or
hereafter arising under this Agreement (the "Obligations"), Borrower hereby
assigns as security and pledges to Lender One Million Six Hundred Ninety Four
Thousand Nine Hundred Twenty (1,694,920) shares (the "Shares") of the Common
Stock of Lender owned by Borrower, and grants Lender a security interest in
Borrower's right, title and interest in and to the Shares, the proceeds (from
disposition or otherwise) thereof and all proceeds (from disposition or
otherwise) of the proceeds (collectively the "Collateral"). Borrower agrees
to take such additional actions (including, without limitation, the filing of
a Form UCC-1) as may be necessary or advisable at the reasonable request of
Lender to perfect and continue Lender's security interest in the Collateral.

         2.2  STOCK DISTRIBUTIONS AND ADJUSTMENTS OF COLLATERAL. If, during
the term of this Agreement, any stock or other non-cash distribution,
dividend, stock split, reclassification, readjustment, exchange, substitution
or other change is declared or made in the capital structure of Lender, or
there is any merger, consolidation, reorganization or sale of all or
substantially all of the assets of Lender pursuant to which holders of Common
Stock of Lender are entitled to receive cash, securities or other property (a
"Reorganization"), all new, substituted and additional shares of stock or
other securities or property issued by reason of any such change or
Reorganization shall be immediately delivered by Borrower to Pledgeholder (as
defined in Section 4.1), together with duly executed assignment(s) separate
from certificate or other appropriate transfer and title documents, to be
held by Pledgeholder in the same manner as the Shares originally pledged
hereunder, and hereafter the term "Shares" or "Collateral" shall include such
cash securities or property. Furthermore, after such event, all references to
prices, number of Shares or number of shares of Common Stock of Lender in
this Agreement shall be adjusted to give effect to such event.

         2.3  RELEASE OF COLLATERAL. Lender and Borrower mutually acknowledge
that the number of Shares pledged to secure the Loan is based on a fair
market value equal to One Dollar

                                       2.

<PAGE>

and Eighteen Cents ($1.18) per Share, as determined by the parties.
Notwithstanding the fact that the Company's Board of Directors may determine
at any time that the fair market value of shares of Common Stock of the
Company is in excess of such amount, Pledgeholder (as such term is defined in
Section 4.1 hereof) shall retain all Shares as Collateral.

         2.4  SUBSTITUTION OF COLLATERAL. Borrower may substitute at any
time, and from time to time, any Collateral, with the prior written consent
of Lender, such consent to be given or withheld in Lender's sole discretion.

         2.5  SALE OF COLLATERAL. In the event of the nonpayment of any
Obligations when due, whether by acceleration or otherwise, or upon the
happening of any Event of Default, Lender may then, or at any time
thereafter, at its election, apply, set off, collect or sell in one or more
sales, or take such steps as may be necessary to liquidate and reduce to cash
in the hands of Lender in whole or in part, with or without any previous
demands or demand of performance or notice or advertisement, the whole or
any part of the Collateral in such order as Lender may elect and any such
sale may be made either at public or private sale at its place of business or
elsewhere, or at any broker's board or securities exchange, either for cash
or upon credit or for future delivery. Lender-may be the purchaser of any or
all Collateral so sold and hold the same thereafter in its own right free
from any claim of Borrower or right of redemption. Demands of performance,
notices of sale, advertisements and presence of property at sale are hereby
waived.

3.       OPTION.

         3.1  OPTION TO PURCHASE SHARES. At any time from and after the date
the Borrower terminates service as an employee of or director or consultant
to the Company until repayment of the Loan and all accrued interest, Lender
shall have the right and option (the "Option"), exercisable at its sole
discretion by giving written notice to Borrower (with a copy to
Pledgeholder), to purchase from Borrower the Shares (plus any additional
stock of the Company, cash, securities or other property receivable on
account thereof as a result of any distribution, dividend, stock split,
reclassification, readjustment, exchange, substitution. Reorganization or
similar transaction with respect to such Shares since the date hereof) for an
aggregate price of Two Hundred Thousand Dollars ($200,000.00) (the "Purchase
Price"). The Purchase Price may be paid by applying and setting off dollar
for dollar the unpaid balance of principal and interest under the Note
(whether or not then due and payable), with any remaining balance to be paid
in cash. Lender shall have full power and authority to take any and all steps
in the name of the Lender or of Borrower to complete the transfer of such
Shares to Lender free of any rights of Borrower or any person claiming by,
through or under Borrower, including, without limitation, delivery to the
Lender of stock certificates representing such Shares and Assignments
Separate from Certificate as delivered by Borrower pursuant to Section 4.1
below.

                                    3.

<PAGE>

4.   PLEDGE.

     4.1   APPOINTMENT OF PLEDGEHOLDER. Lender hereby appoints Manatt,
Phelps & Phillips, LLP as "Pledgeholder" to accept and hold the deliveries
described below on its behalf. To assure Borrower's ability to perform
Borrower's Obligations under this Agreement, Borrower will, concurrently
with the delivery of this Agreement, deliver Stock Certificate No(s).
_________, together with duly executed blank Assignments Separate from
Certificate (in the form attached hereto as Exhibit B) for such
Certificate(s), to Pledgeholder, such Assignments to be held in pledge (the
"Pledge") pursuant to the terms of this Section 4.

     4.2   DUTIES AFTER AN EVENT OF DEFAULT OR OPTION EXERCISE.

           (a)   Pledgeholder shall have no duty to determine the existence
of an Event of Default and shall, subject to Section 4.15, without any
liability whatsoever, rely upon the written notice of Lender that an Event of
Default has occurred. If, following an Event of Default, Lender shall elect
to exercise its right to realize on the Shares, Pledgeholder shall, upon the
receipt of written notice from Lender (with a copy to Borrower), subject to
Section 4.15, deliver possession of the Collateral to Lender, without
warranty. Following an Event of Default, Pledgeholder shall dispose of the
Collateral other than the Shares in accordance with written instructions of
Lender.

           (b)   If Lender exercises the Option pursuant to Section 3.1,
Pledgeholder shall, upon the receipt of written notice of the exercise of the
Option and delivery of payment in full of the Purchase Price, by any means
provided in Section 3.1, deliver possession of the Shares to Lender and, if
applicable, deliver the purchase funds to Borrower without warranty in either
case.

     4.3   ATTORNEY-IN-FACT; ADDITIONAL STOCK ASSIGNMENTS. Borrower hereby
irrevocably constitutes and appoints Pledgeholder as Borrower's
attorney-in-fact and agent for the term of this Pledge to execute, with
respect to such securities or other Collateral as are deposited with
Pledgeholder hereunder, all documents necessary or appropriate to make such
securities or other Collateral negotiable and complete any transaction herein
contemplated. Borrower shall deliver to Pledgeholder from time to time such
number of stock assignments separate from certificate or other documents duly
executed by Borrower as may be reasonably requested by Lender or Pledgeholder.

     4.4   RETURN OF PROPERTY. If at the time of termination of this
Agreement, Pledgeholder has in Pledgeholder's possession any documents,
securities, or other property belonging to Borrower, Pledgeholder shall
deliver all of same to Borrower and shall be discharged of all further
obligations hereunder.

     4.5   DUTIES; MODIFICATION OF DUTIES. Pledgeholder shall carry out
Pledgeholder's duties hereunder to the best of Pledgeholder's ability and
shall be liable only for willful misconduct. Pledgeholder's duties hereunder
may be altered, amended, modified or revoked only by a written instrument
signed by Lender, Borrower and Pledgeholder.

                                      4.
<PAGE>

     4.6   OBLIGATIONS. Pledgeholder shall be obligated only for the
performance of such duties as are specifically set forth herein and may rely
and shall be protected in relying or refraining from acting on any instrument
reasonably believed by Pledgeholder to be genuine and to have been signed or
presented by the proper party or parties. Pledgeholder shall not be
personally liable for any act Pledgeholder may do or omit to do hereunder as
Pledgeholder or as attorney-in-fact for Borrower while acting in good faith
and in the exercise of Pledgeholder's own good judgment, and any act done or
omitted by Pledgeholder pursuant to the advice of Pledgeholder's own
attorneys shall be conclusive evidence of such good faith.

     4.7   AUTHORIZATION TO ACT. Pledgeholder is hereby expressly authorized
to disregard any and all warnings given by any of the parties hereto or by
any other person or corporation, excepting only orders or process of courts
of law, and is hereby expressly authorized to comply with and obey orders,
judgments or decrees of any court. In case Pledgeholder obeys or complies
with any such order, judgment or decree of any court, Pledgeholder shall not
be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set
aside, vacated or found to have been entered without jurisdiction.

     4.8   AUTHORITY TO INVEST. Any cash received by Pledgeholder pursuant to
this Agreement and designated by Lender as additional Collateral and which is
to be retained in pledge by Pledgeholder for more than fifteen (15) days
shall be invested in an interest bearing savings account specified by Lender
and the interest therein shall constitute a part of such additional
Collateral.

     4.9   SUBSTITUTION OF COLLATERAL. If Pledgeholder receives securities or
other property as substitute for Collateral, an assignment(s) separate from
certificate if applicable and the consent of Lender in accordance with
Section 2.4 above, Pledgeholder shall deliver to Borrower the stock
certificates or other property for which Pledgeholder has received substitute
collateral.

     4.10  BANKRUPTCY. Bankruptcy, insolvency, or dissolution of any party
hereto shall not affect Pledgeholder's performance hereunder.

     4.11  STATUTE OF LIMITATIONS.  Pledgeholder shall not be liable for the
lapse of any rights because of any statute of limitation applicable with
respect to this Agreement or any documents deposited with Pledgeholder.

     4.12  LEGAL COUNSEL. Pledgeholder shall be entitled to employ such legal
counsel and other experts as Pledgeholder may deem necessary to properly
advise Pledgeholder in connection with Pledgeholder's obligations and may pay
such counsel reasonable compensation therefor for which Pledgeholder shall be
reimbursed by Lender.

     4.13  TERMINATION OF DUTIES; SUCCESSOR. Pledgeholder's responsibilities
as Pledgeholder hereunder shall terminate if (i) Pledgeholder shall resign by
thirty (30) days' written notice to Borrower and Lender, (ii) Borrower and
Lender jointly agree as to Pledgeholder's termination and appoint
Pledgeholder's  successor, or (iii) Pledgeholder ceases to exist or is

                                      5.
<PAGE>

otherwise unable to continue to discharge its duties hereunder. In the event
of Pledgeholder's termination as Pledgeholder by resignation, ceasing to
exist or by otherwise becoming unable to perform, Lender and Borrower shall
mutually appoint a successor. Upon Pledgeholder's receipt of notice of any
such appointment of Pledgeholder's successor, all documents, shares and other
property then in Pledgeholder's possession pursuant to this Agreement shall
be delivered to such successor.

     4.14  FURTHER INSTRUMENTS. If Pledgeholder reasonably requires other or
further instruments in connection with this Agreement or obligations in
respect hereto, the necessary parties hereto shall join in furnishing such
instruments.

     4.15  CONFLICTING NOTICES; DISPUTES. It is understood and agreed that
should any dispute arise with respect to the delivery or ownership or right
of possession of the Collateral, secruities or any other property held by
Pledgeholder hereunder, Pledgeholder is authorized and directed to retain in
its possession without liability to anyone all or any part of said
Collateral, securities and such other property until such dispute shall have
been settled either by mutual written agreement of the parties concerned or
by a final order, decree, or judgment of a court of competent jurisdiction
after the time for appeal has expired and no appeal has been perfected, but
Pledgeholder shall be under no duty whatsoever to institute or defend any
such proceeding.

5.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER.

     5.1   OWNERSHIP OF COLLATERAL; NO CONFLICTS. Borrower represents and
warrants as of this date, and covenants for the period beginning on this date
and ending upon the termination of this Agreement, that (i) Borrower has and
will have the right to enter into this Agreement, to transfer to Pledgeholder
all or any part of the Collateral, free and clear of any lien, claim,
encumbrance or restriction of any type or nature whatsoever (other than
restrictions on resale that may arise under applicable federal and state
securities laws and the restrictions contained in the Company's Bylaws); (ii)
the Collateral is not and will not be subject to any right of first refusal,
right of repurchase or any similar right granted to, or retained by, the
Company, any shareholder of the Company or any other person which has not
been effectively waived or forfeited, other than the Option described in
Section 3 herein and the rights and restrictions contained in the Company's
Bylaws; and (iii) there is no provision of any existing agreement, and
Borrower will not enter into an agreement, by which Borrower is or would be
bound (or to which Borrower is or would become subject) that conflicts or
would conflict with this Agreement or the performance of Borrower's
obligations under this Agreement.

     5.2   FURTHER ASSURANCES. Upon the reasonable request of Pledgeholder or
Lender, Borrower will prepare, execute and deliver any further instruments
and do any further acts that may be necessary to carry out more effectively
the purpose of this Agreement.

6.   MISCELLANEOUS.

                                      6.
<PAGE>

     6.1   AMENDMENT. Except as provided in Section 4.5, this Agreement may
only be amended by a writing signed by Borrower and Lender. The signature of
Pledgeholder shall be required as well for any amendment affecting Article 4
or 6 hereof.

     6.2   ASSIGNMENT. Borrower may not assign or otherwise transfer any of
his rights or obligations under this Agreement. Except for any assignment of
rights under this Agreement to affiliated partnerships of Lender, or to
partners of Lender or such partnerships, Lender may assign all or any portion
of its rights and obligations under this Agreement only with the prior
written consent of Borrower, which consent shall not be unreasonably withheld
or delayed. Subject to the foregoing, this Agreement shall be binding upon
the heirs, executors and personal representatives of Borrower and shall be
binding upon and inure to the benefit of the successors and assigns of Lender.

     6.3   ENTIRE AGREEMENT; CONTROLLING DOCUMENT. This Agreement constitutes
the entire agreement of the parties with respect to the subject matter hereof
and supersedes any and all prior negotiations, correspondence and
understandings between the parties with respect to the subject matter hereof,
whether oral or in writing.

     6.4   COSTS OF ENFORCEMENT. If either party to this Agreement seeks to
enforce its rights under this Agreement by legal proceedings or otherwise,
the non-prevailing party shall pay all costs and expenses incurred by the
prevailing party, including, without limitation, all reasonable attorneys'
fees.

     6.5   GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California applicable to
contracts entered into by California residents and to be performed wholly in
the State of California.

     6.6   NOTICES. All notices and other communications under this Agreement
(other than payments hereunder, which shall be deemed made as of the date of
receipt by Lender) shall be in writing, and shall be deemed to have been duly
given on the date of delivery if delivered personally, or on the second day
after mailing if mailed to the party to whom notice is to be given by first
class mail, registered or certified, postage prepaid, and addressed as
follows (until any such address is changed by notice duly given):

           To Borrower at:                 K. Cyrus Hadavi
                                           c/o Paragon Management Systems, Inc.
                                           5933 W. Century Blvd., Suite 1220
                                           Los Angeles, CA 90045

           To Lender at:                   Paragon Management Systems, Inc.
                                           5933 W. Century Blvd., Suite 1220
                                           Los Angeles, CA 90045

           To Pledgeholder at:             Manatt, Phelps & Phillips, LLP
                                           Attn: T. Hale Boggs
                                           11355 West Olympic Boulevard

                                       7.
<PAGE>

                                           Los Angeles, CA 90064-1614

Copies of all notices to be given to either Borrower or Lender pursuant to
this Agreement also shall be delivered to Pledgeholder.

     6.7   COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     6.8   SEVERABILITY. If any provision of this Agreement shall be
determined to be invalid or unenforceable, the remainder shall be valid and
enforceable to the maximum extent possible.

     6.9   HEADINGS. The section headings used in this Agreement are intended
principally for convenience and shall not by themselves determine the rights
and obligations of the parties to this Agreement.

     6.10  DELAY AND WAIVER. No delay on the party of Lender in exercising
any right under this Agreement shall operate as a waiver of such right. The
waiver by Lender of any term or condition of this Agreement shall not be
construed as a waiver of a subsequent breach or failure of the same term or
condition or a waiver of any other term or condition contained in this
Agreement.

     6.11  TERM. This Agreement shall terminate on the later of (i) delivery
by Lender, to Borrower and Pledgeholder, of notice that all Obligations of
Borrower under this Agreement have been fulfilled, or (ii) exercise by Lender
of the Option and the transfer to Lender of the Shares subject to the Option.

                                      8.
<PAGE>

         IN WITNESS WHEREOF, the undersigned have executed this Agreement the
day and year first above written.

                                       BORROWER:

                                       /s/ K. Cyrus Hadavi
                                       ---------------------------------------
                                       K. Cyrus Hadavi

                                       LENDER:

                                       PARAGON MANAGEMENT SYSTEMS, INC.

                                       By:  /s/ Nima Bakhtiary
                                          ------------------------------------
                                       Name:  Nima Bakhtiary
                                            ----------------------------------
                                       Title:  VP Strategic Partnerships
                                             ---------------------------------

         Upon reading and approving the foregoing, and in consideration of the
consummation of the transactions contemplated hereby, I, SHIVA HADAVI, the
spouse of K. Cyrus Hadavi, agree to be bound by the Agreement and further
agree that any community property or other such interest shall be similarly
bound by the Agreement. I hereby appoint my spouse as my attorney-in-fact
with respect to any amendment or exercise of any rights under the Agreement.

                                       SPOUSE

                                       /s/ Shiva Hadavi
                                       ---------------------------------------

         The undersigned agrees to act as Pledgeholder under this Agreement
pursuant to Section 4 and agrees to be bound only by Section 4 and Section 6.

                                       PLEDGEHOLDER

                                       MANATT, PHELPS & PHILLIPS, LLP

                                       By:
                                          ------------------------------------

                                      9.
<PAGE>

         IN WITNESS WHEREOF, the undersigned have executed this Agreement the
day and year first above written.

                                       BORROWER:

                                       ---------------------------------------
                                       K. Cyrus Hadavi

                                       LENDER:

                                       PARAGON MANAGEMENT SYSTEMS, INC.

                                       By:
                                          ------------------------------------
                                       Name:
                                            ----------------------------------
                                       Title:
                                             ---------------------------------

         Upon reading and approving the foregoing, and in consideration of the
consummation of the transactions contemplated hereby, I, __________________,
the spouse of K. Cyrus Hadavi, agree to be bound by the Agreement and further
agree that any community property or other such interest shall be similarly
bound by the Agreement. I hereby appoint my spouse as my attorney-in-fact with
respect to any amendment or exercise of any rights under the Agreement.

                                       SPOUSE

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

         The undersigned agrees to act as Pledgeholder under this Agreement
pursuant to Section 4 and agrees to be bound only be Section 4 and Section 6.

                                       PLEDGEHOLDER

                                       MANATT, PHELPS & PHILLIPS, LLP

                                       By:  /s/ [ILLEGIBLE]
                                          ------------------------------------

                                      9.
<PAGE>

                                   EXHIBIT A

                            SECURED PROMISSORY NOTE

                                                                Los Angeles, CA
                                                                 July __, 1997

         FOR VALUE RECEIVED, the undersigned promises to pay to the order of
PARAGON MANAGEMENT SYSTEMS, INC., a California corporation at 5933 W. Century
Blvd., Suite 1220, Los Angeles, California 90045, or at such other place as
the holder hereof may from time to time designate, the sum of Two Hundred
Thousand Dollars ($200,000.00) in lawful money of the United States, together
with interest on all unpaid principal at the rate of five percent (5%) per
annum, commencing on the date of this Note and continuing until paid in full.
Interest shall be payable semi-annually in arrears, not later than December
31st and June 30th. All outstanding principal and accrued interest shall be
due and payable in full on or before July 31, 2002. In addition, upon an
"Event of Default" as defined in that certain Loan. Pledge and Option
Agreement of even date herewith (the "Loan Agreement"), the holder of this
Note shall have the right to declare the entire sum of principal and accrued
interest immediately due and payable. This Note may be prepaid in whole or in
part at the option of the undersigned without premium or penalty at any time.

         In case suit or any legal proceeding is instituted to collect this
Note or any portion thereof, the undersigned promises to pay, in addition to
the costs and disbursements allowed by law, reasonable attorneys' fees as
determined by the court.

         The makers, endorsers and all persons now or hereafter liable on
this Note severally waive demand notice, presentment for payment and protest
and notice of any default whereby this Note may be declared immediately due
and payable.

         This Note is secured by the Loan Agreement, pursuant to which the
undersigned has pledged certain shares of the Common Stock of Paragon
Management Systems, Inc. In the event of any breach of or default under the
Loan Agreement, the entire unpaid principal balance hereof, together with
accrued interest, shall at the option of the holder, without notice, become
immediately due and payable. This Note shall be governed by the laws of the
State of California.

                                       ---------------------------------------
                                       K. Cyrus Hadavi

<PAGE>

                                  EXHIBIT B

                     ASSIGNMENT SEPARATE FROM CERTIFICATE

         FOR VALUE RECEIVED, I, K. Cyrus Hadavi, hereby sell, assign and
transfer unto ____________________, __________ shares of the Common Stock of
Paragon Management Systems, Inc. (the "Company") standing in my name on the
books of the Company represented by Certificate No(s). ___________________
herewith and do hereby irrevocably constitute and appoint the Secretary or
Assistant Secretary of the Company to transfer said stock on the books of the
Company with full power of substitution in the premises.

Dated:
      --------------------------

                                           -----------------------------------
                                           K. Cyrus Hadavi

         This Assignment Separate from Certificate was executed in
conjunction with the terms of a Loan. Pledge and Option Agreement dated
July __, 1997, and shall not be used in any manner except as provided in
such Agreement.

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