Document:

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                               VerticalBuyer, Inc.
                         Nonstatutory Stock Option Plan

                             Adopted: March 1, 2000
                       Termination Date: February 28, 2010

1.   Purposes.

         (a) Eligible Option Recipients. The persons eligible to receive Options
are the Directors, Employees and Consultants of the Company and its Affiliates.

         (b) Available Options. The purpose of the Plan is to provide a means by
which eligible recipients of Options may be given an opportunity to benefit from
increases in value of the Common Stock through the granting of Nonstatutory
Stock Options.

         (c) General Purpose. The Company, by means of the Plan, seeks to retain
the services of the group of persons eligible to receive Options, to secure and
retain the services of new members of this group and to provide incentives for
such persons to exert maximum efforts for the success of the Company and its
Affiliates.

2.   Definitions.

         (a) "Affiliate" means any parent corporation or subsidiary corporation
of the Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.

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

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

         (d) "Committee" means a committee of one or more members of the Board
appointed by the Board in accordance with subsection 3(c).

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

         (f) "Company" means VerticalBuyer, Inc., a Delaware corporation.

         (g) "Consultant" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting or advisory services and who is
compensated for such services.

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         (h) "Continuous Service" means that the Optionholder's service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. The Optionholder's Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
the Optionholder renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Optionholder
renders such service, provided that there is no interruption or termination of
the Optionholder's Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or a Director will not
constitute an interruption of Continuous Service. The Board or the chief
executive officer of the Company, in that party's sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave or
any other personal leave.

         (i) "Director" means a member of the Board of Directors or committee of
the Board of Directors of the Company.

         (j) "Disability" means the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code.

         (k) "Employee" means any person employed by the Company or an
Affiliate. The term "Employee" shall include Officers of the Company or its
Affiliates.

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

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

                  (i) If the Common Stock is listed on any established stock
exchange or traded on the Nasdaq National Market, the Nasdaq SmallCap Market, or
the OTC Bulletin Board, the Fair Market Value of a share of Common Stock shall
be the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or market (or the exchange or market with
the greatest volume of trading in the Common Stock) on the last market trading
day prior to the day of determination, as reported by Bloomberg or such other
source as the Board deems reliable.

                  (ii) In the absence of such markets for the Common Stock, the
Fair Market Value shall be determined in good faith by the Board.

         (n) "Non-Employee Director" means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or a subsidiary, does
not receive compensation (directly or indirectly) from the Company or its parent
or a subsidiary for services rendered as a consultant or in any capacity other
than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act ("Regulation S-K")), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K and is not engaged in a business relationship

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as to which disclosure would be required under Item 404(b) of Regulation S-K; or
(ii) is otherwise considered a "non-employee director" for purposes of Rule
16b-3.

         (o) "Nonstatutory Stock Option" means an Option not intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.

         (p) "Officer" means a person who possesses the authority of an
"officer" under the Company's bylaws.

         (q) "Option" means a Nonstatutory Stock Option granted pursuant to the
Plan.

         (r) "Option Agreement" means a written agreement between the Company
and an Optionholder evidencing the terms and conditions of an individual Option
grant. Each Option Agreement shall be subject to the terms and conditions of the
Plan.

         (s) "Optionholder" means a person to whom an Option is granted pursuant
to the Plan or, if applicable, such other person who holds an outstanding
Option.

         (t) "Plan" means this VerticalBuyer, Inc. Nonstatutory Stock Option
Plan.

         (u) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act or
any successor to Rule 16b-3, as in effect from time to time.

         (v) "Securities Act" means the Securities Act of 1933, as amended.

3.   Administration.

         (a) Administration by Board. The Board shall administer the Plan unless
and until the Board delegates administration to a Committee, as provided in
subsection 3(c).

         (b) Powers of Board. The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:

                  (i) To determine from time to time which of the persons
eligible under the Plan shall be granted Options; when and how each Option shall
be granted; what type or combination of types of Option shall be granted; the
provisions of each Option granted (which need not be identical), including the
time or times when a person shall be permitted to receive Common Stock pursuant
to an Option; and the number of shares of Common Stock with respect to which an
Option shall be granted to each such person.

                  (ii) To construe and interpret the Plan and Options granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this

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power, may correct any defect, omission or inconsistency in the Plan or in any
Option Agreement, in a manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective.

                  (iii) To amend the Plan or an Option as provided in
Section 11.

                  (iv) Generally, to exercise such powers and to perform such
acts as the Board deems necessary or expedient to promote the best interests of
the Company which are not in conflict with the provisions of the Plan.

         (c)  Delegation to Committee.

                  (i) General. The Board may delegate administration of the Plan
to a Committee or Committees of one (1) or more members of the Board, and the
term "Committee" shall apply to any person or persons to whom such authority has
been delegated. If administration is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board, including the power to delegate to a
subcommittee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board shall thereafter be to the
Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and revest in
the Board the administration of the Plan.

                  (ii) Committee Composition when Common Stock is Publicly
Traded. At such time as the Common Stock is publicly traded, in the discretion
of the Board, a Committee may consist solely of two or more Non-Employee
Directors, in accordance with Rule 16b-3. Within the scope of such authority,
the Board or the Committee may delegate to a committee of one or more members of
the Board who are not Non-Employee Directors the authority to grant Options to
eligible persons who are not then subject to Section 16 of the Exchange Act.

         (d) Effect of Board's Decision. All determinations, interpretations and
constructions made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all persons.

4.   Shares Subject to the Plan.

         (a) Share Reserve. Subject to the provisions of Section 10 relating to
adjustments upon changes in Common Stock, the Common Stock that may be issued
pursuant to Options shall not exceed in the aggregate two million (2,000,000)
shares of Common Stock.

         (b) Reversion of Shares to the Share Reserve. If any Option shall for
any reason expire or otherwise terminate, in whole or in part, without having
been exercised in full, the shares of Common Stock not acquired under such
Option shall revert to and again become available for issuance under the Plan.

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         (c) Source of Shares. The shares of Common Stock subject to the Plan
may be unissued shares or reacquired shares, bought on the market or otherwise.

5.   Eligibility.

         (a) Eligibility for Specific Options. Nonstatutory Stock Options may
only be granted to Directors, Employees and Consultants.

         (b)  Consultants.

                  (i) A Consultant shall not be eligible for the grant of an
Option if, at the time of grant, a Form S-8 Registration Statement under the
Securities Act ("Form S-8") is not available to register either the offer or the
sale of the Company's securities to such Consultant because of the nature of the
services that the Consultant is providing to the Company, or because the
Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (i) that such
grant (A) shall be registered in another manner under the Securities Act (e.g.,
on a Form S-3 Registration Statement) or (B) does not require registration under
the Securities Act in order to comply with the requirements of the Securities
Act, if applicable, and (ii) that such grant complies with the securities laws
of all other relevant jurisdictions.

                  (ii) Form S-8 generally is available to consultants and
advisors only if (i) they are natural persons; (ii) they provide bona fide
services to the issuer, its parents, its majority-owned subsidiaries or
majority-owned subsidiaries of the issuer's parent; and (iii) the services are
not in connection with the offer or sale of securities in a capital-raising
transaction, and do not directly or indirectly promote or maintain a market for
the issuer's securities.

6.   Option Provisions. Each Option shall be in such form and shall contain such
terms and conditions as the Board shall deem appropriate. The provisions of
separate Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

         (a) Term. The term of an Option shall be the term determined by the
Board, either at the time of Grant of the Option or as the Option may be amended
thereafter.

         (b) Exercise Price of a Nonstatutory Stock Option. The exercise price
of each Nonstatutory Stock Option shall be not less than eighty-five percent
(85%) of the Fair Market Value of the Common Stock subject to the Option on the
date the Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock
Option may be granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section
424(a) of the Code.

         (c) Consideration. The purchase price of Common Stock acquired pursuant
to an Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the

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time the Option is exercised or (ii) at the discretion of the Board at the time
of the grant of the Option (or subsequently in the case of a Nonstatutory Stock
Option) (1) by delivery to the Company of other Common Stock, (2) according to a
deferred payment or other similar arrangement with the Optionholder or (3) in
any other form of legal consideration that may be acceptable to the Board.
Unless otherwise specifically provided in the Option, the purchase price of
Common Stock acquired pursuant to an Option that is paid by delivery to the
Company of other Common Stock acquired, directly or indirectly from the Company,
shall be paid only by shares of the Common Stock of the Company that have been
held for more than six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes).

In the case of any deferred payment arrangement, interest shall be compounded at
least annually and shall be charged at the minimum rate of interest necessary to
avoid the treatment as interest, under any applicable provisions of the Code, of
any amounts other than amounts stated to be interest under the deferred payment
arrangement.

         (d) Transferability of a Nonstatutory Stock Option. A Nonstatutory
Stock Option shall be transferable to the extent provided in the Option
Agreement. If the Nonstatutory Stock Option does not provide for
transferability, then the Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option.

         (e) Vesting Generally. The total number of shares of Common Stock
subject to an Option may, but need not, vest and therefore become exercisable in
periodic installments that may, but need not, be equal. The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The
provisions of this subsection 6(e) are subject to any Option provisions
governing the minimum number of shares of Common Stock as to which an Option may
be exercised.

         (f) Termination of Continuous Service. In the event an Optionholder's
Continuous Service terminates (other than upon the Optionholder's death or
Disability), the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise such Option as of the date of
termination) but only within such period of time ending on the earlier of (i)
the date three (3) months following the termination of the Optionholder's
Continuous Service (or such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the Option as set forth in the
Option Agreement. If, after termination, the Optionholder does not exercise his
or her Option within the time specified in the Option Agreement, the Option
shall terminate.

         (g) Extension of Termination Date. An Optionholder's Option Agreement
may also provide that if the exercise of the Option following the termination of
the Optionholder's Continuous Service

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(other than upon the Optionholder's death or Disability) would be prohibited at
any time solely because the issuance of shares of Common Stock would violate the
registration requirements under the Securities Act, then the Option shall
terminate on the earlier of (i) the expiration of the term of the Option set
forth in subsection 6(a) or (ii) the expiration of a period of three (3) months
after the termination of the Optionholder's Continuous Service during which the
exercise of the Option would not be in violation of such registration
requirements.

         (h) Disability of Optionholder. In the event that an Optionholder's
Continuous Service terminates as a result of the Optionholder's Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in
the Option Agreement) or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, after termination, the Optionholder does not
exercise his or her Option within the time specified herein, the Option shall
terminate.

         (i) Death of Optionholder. In the event (i) an Optionholder's
Continuous Service terminates as a result of the Optionholder's death or (ii)
the Optionholder dies within the period (if any) specified in the Option
Agreement after the termination of the Optionholder's Continuous Service for a
reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholder's estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
Option upon the Optionholder's death pursuant to subsection 6(d), but only
within the period ending on the earlier of (1) the date eighteen (18) months
following the date of death (or such longer or shorter period specified in the
Option Agreement) or (2) the expiration of the term of such Option as set forth
in the Option Agreement. If, after death, the Option is not exercised within the
time specified herein, the Option shall terminate.

         (j) Early Exercise. The Option may, but need not, include a provision
whereby the Optionholder may elect at any time before the Optionholder's
Continuous Service terminates to exercise the Option as to any part or all of
the shares of Common Stock subject to the Option prior to the full vesting of
the Option. Any unvested shares of Common Stock so purchased may be subject to a
repurchase option in favor of the Company or to any other restriction the Board
determines to be appropriate.

7.   Covenants of the Company.

         (a) Availability of Shares. During the terms of the Options, the
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Options.

         (b) Securities Law Compliance. The Company shall seek to obtain from
each regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to grant Options and to issue and sell shares of
Common Stock upon exercise of the Options; provided,

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however, that this undertaking shall not require the Company to register under
the Securities Act the Plan, any Option or any Common Stock issued or issuable
pursuant to any such Option. If, after reasonable efforts, the Company is unable
to obtain from any such regulatory commission or agency the authority which
counsel for the Company deems necessary for the lawful issuance and sale of
Common Stock under the Plan, the Company shall be relieved from any liability
for failure to issue and sell Common Stock upon exercise of such Options unless
and until such authority is obtained.

8.   Use of Proceeds from Stock. Proceeds from the sale of Common Stock pursuant
to Options shall constitute general funds of the Company.

9.   Miscellaneous.

         (a) Acceleration of Exercisability and Vesting. The Board shall have
the power to accelerate the time at which an Option may first be exercised or
the time during which an Option or any part thereof will vest in accordance with
the Plan, notwithstanding the provisions in the Option stating the time at which
it may first be exercised or the time during which it will vest.

         (b) Stockholder Rights. No Optionholder shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
of Common Stock subject to such Option unless and until such Optionholder has
satisfied all requirements for exercise of the Option pursuant to its terms.

         (c) No Employment or other Service Rights. Nothing in the Plan or any
instrument executed or Option granted pursuant thereto shall confer upon any
Optionholder any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Option was granted or shall affect the right
of the Company or an Affiliate to terminate (i) the employment of an Employee
with or without notice and with or without cause, or (ii) the service of a
Consultant pursuant to the terms of such Consultant's agreement with the Company
or an Affiliate.

         (d) Investment Assurances. The Company may require an Optionholder, as
a condition of exercising or acquiring Common Stock under any Option, (i) to
give written assurances satisfactory to the Company as to the Optionholder's
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Option; and (ii) to give
written assurances satisfactory to the Company stating that the Optionholder is
acquiring Common Stock subject to the Option for the Optionholder's own account
and not with any present intention of selling or otherwise distributing the
Common Stock. The foregoing requirements, and any assurances given pursuant to
such requirements, shall be inoperative if (1) the issuance of the shares of
Common Stock upon the exercise or acquisition of Common Stock under the Option
has been registered under a then currently effective registration statement
under the Securities Act or (2) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable

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securities laws. The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the Common
Stock.

         (e) Withholding Obligations. To the extent provided by the terms of an
Option Agreement, the Optionholder may satisfy any federal, state or local tax
withholding obligation relating to the exercise or acquisition of Common Stock
under an Option by any of the following means (in addition to the Company's
right to withhold from any compensation paid to the Optionholder by the Company)
or by a combination of such means: (i) tendering a cash payment; (ii)
authorizing the Company to withhold shares of Common Stock from the shares of
Common Stock otherwise issuable to the Optionholder as a result of the exercise
or acquisition of Common Stock under the Option, provided, however, that no
shares of Common Stock are withheld with a value exceeding the minimum amount of
tax required to be withheld by law; or (iii) delivering to the Company owned and
unencumbered shares of Common Stock.

10.  Adjustments upon Changes in Stock.

         (a) Capitalization Adjustments. If any change is made in the Common
Stock subject to the Plan, or subject to any Option, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject to the Plan
pursuant to subsection 4(a) and the maximum number of securities subject to
award to any person pursuant to subsection 5(c), and the outstanding Options
will be appropriately adjusted in the class(es) and number of securities and
price per share of Common Stock subject to such outstanding Options. The Board
shall make such adjustments, and its determination shall be final, binding and
conclusive. (The conversion of any convertible securities of the Company shall
not be treated as a transaction "without receipt of consideration" by the
Company.)

         (b) Dissolution or Liquidation. In the event of a dissolution or
liquidation of the Company, then all outstanding Options shall terminate
immediately prior to such event.

         (c) Asset Sale. In the event of a sale of all or substantially all of
the assets of the Company, then all Options outstanding under the Plan shall
continue in full force and effect.

         (d) Merger or Consolidation in Which the Company is Not the Surviving
Corporation. In the event of a merger or consolidation in which the Company is
not the surviving corporation, then any surviving corporation or acquiring
corporation shall assume any Options outstanding under the Plan or shall
substitute similar options (including an award to acquire the same consideration
paid to the stockholders in the transaction described in this subsection 11(d))
for those outstanding under

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the Plan. In the event any surviving corporation or acquiring corporation
refuses to assume such Options or to substitute similar options for those
outstanding under the Plan, then with respect to Options held by Participants
whose Continuous Service has not terminated, the vesting of such Options (and,
if applicable, the time during which such Options may be exercised) shall be
accelerated in full, and the Options shall terminate if not exercised (if
applicable) at or prior to such event. With respect to any other Options
outstanding under the Plan, such Options shall terminate if not exercised (if
applicable) prior to such event.

         (e) Reverse Merger. In the event of a reverse merger in which the
Company is the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise, then any
acquiring corporation (or a corporation which directly or indirectly controls
such an acquiring corporation) shall assume any Options outstanding under the
Plan or shall substitute similar options (including an award to acquire the same
consideration paid to the stockholders in the transaction described in this
subsection 11(e)) for those outstanding under the Plan. In the event any
acquiring corporation or corporation controlling such an acquiring corporation
refuses to assume such Options or to substitute similar options for those
outstanding under the Plan, then with respect to Options held by Participants
whose Continuous Service has not terminated, the vesting of such Options (and,
if applicable, the time during which such Options may be exercised) shall be
accelerated in full, and the Options shall terminate if not exercised (if
applicable) at or prior to such event. With respect to any other Options
outstanding under the Plan, such Options shall terminate if not exercised (if
applicable) prior to such event.

11.  Amendment of the Plan and Options.

         (a) Amendment of Plan. The Board at any time, and from time to time,
may amend the Plan.

         (b) Contemplated Amendments. It is expressly contemplated that the
Board may amend the Plan in any respect the Board deems necessary or advisable
to provide eligible Employees with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated
thereunder and/or to bring the Plan and/or Options granted under it into
compliance therewith.

         (c) No Impairment of Rights. Rights under any Option granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the Optionholder and (ii) the
Optionholder consents in writing.

         (d) Amendment of Options. The Board at any time, and from time to time,
may amend the terms of any one or more Options; provided, however, that the
rights under any Option shall not be impaired by any such amendment unless (i)
the Company requests the consent of the Optionholder and (ii) the Optionholder
consents in writing.

12.  Termination or Suspension of the Plan.

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         (a) Plan Term. The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on the day before the tenth
(10th) anniversary of the date the Plan is adopted by the Board. No Options may
be granted under the Plan while the Plan is suspended or after it is terminated.

         (b) No Impairment of Rights. Suspension or termination of the Plan
shall not impair rights and obligations under any Option granted while the Plan
is in effect except with the written consent of the Optionholder.

13.  Effective Date of Plan. The Plan shall become effective as determined by
the Board.

14.  Choice of Law. The law of the State of New York shall govern all questions
concerning the construction, validity and interpretation of this Plan, without
regard to such state's conflict of laws rules.

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                         FORM OF STOCK OPTION AGREEMENT

                               VerticalBuyer, Inc.
                         Nonstatutory Stock Option Plan

                             Stock Option Agreement
                           (Nonstatutory Stock Option)

         Pursuant to the Grant Notice and this Stock Option Agreement,
VerticalBuyer, Inc. (the "Company") has granted you an option under its
Nonstatutory Stock Option Plan (the "Plan") to purchase the number of shares of
the Company's Common Stock indicated in the Grant Notice at the exercise price
indicated in the Grant Notice below. Defined terms not explicitly defined in
this Stock Option Agreement but defined in the Plan shall have the same
definitions as in the Plan.

         The details of your option are as follows:

         1.  Vesting. Subject to the limitations contained herein, your option
will vest as provided in your Grant Notice, provided that vesting will cease
upon the termination of your Continuous Service.

         2.  Number of Shares and Exercise Price. The number of shares of Common
Stock subject to your option and your exercise price per share referenced in
your Grant Notice may be adjusted from time to time for Capitalization
Adjustments, as provided in the Plan.

         3.  Exercise prior to Vesting ("Early Exercise"). If permitted in your
Grant Notice (i.e., the "Exercise Schedule" indicates that "Early Exercise" of
your option is permitted) and subject to the provisions of your option, you may
elect at any time that is both (i) during the period of your Continuous Service
and (ii) during the term of your option, to exercise all or part of your option,
including the nonvested portion of your option.

         4.  Method of Payment. Payment of the exercise price is due in full
upon exercise of all or any part of your option. You may elect to make payment
of the exercise price by check or in any other manner permitted by your Grant
Notice.

         5.  Whole Shares. You may exercise your option only for whole shares of
Common Stock.

         6.  Securities Law Compliance. Notwithstanding anything to the contrary
contained herein, you may not exercise your option unless the shares of Common
Stock issuable upon such exercise are then registered under the Securities Act
or, if such shares of Common Stock are not then so registered, the Company has
determined that such exercise and issuance would be exempt from the registration
requirements of the Securities Act. The exercise of your option must also comply
with other applicable laws and regulations governing your option, and you may
not exercise your option if the Company determines that such exercise would not
be in material compliance with such laws

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and regulations.

         7.  Term. You may not exercise your option before the commencement of
its term or after its term expires. The term of your option commences on the
Date of Grant and expires upon the earliest of the following:

                  (a) three (3) months after the termination of your Continuous
Service for any reason other than your Disability or death, provided that if
during any part of such three- (3) month period your option is not exercisable
solely because of the condition set forth in the preceding paragraph relating to
"Securities Law Compliance," your option shall not expire until the earlier of
the Expiration Date or until it shall have been exercisable for an aggregate
period of three (3) months after the termination of your Continuous Service;

                  (b) twelve (12) months after the termination of your
Continuous Service due to your Disability;

                  (c) eighteen (18) months after your death if you die either
during your Continuous Service or within three (3) months after your Continuous
Service terminates;

                  (d)  the Expiration Date indicated in your Grant Notice; or

                  (e) the day before the tenth (10th) anniversary of the Date of
Grant.

         8.  Exercise.

                  (a) You may exercise the vested portion of your option (and
the unvested portion of your option if your Grant Notice so permits) during its
term by delivering a notice of exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to such
other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require.

                  (b) By exercising your option you agree that, as a condition
to any exercise of your option, the Company may require you to enter into an
arrangement providing for the payment by you to the Company of any tax
withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the
shares of Common Stock are subject at the time of exercise, or (3) the
disposition of shares of Common Stock acquired upon such exercise.

         9.  Transferability. Your option is not transferable, except by will or
by the laws of descent and distribution, and is exercisable during your life
only by you. Notwithstanding the foregoing, by delivering written notice to the
Company, in a form satisfactory to the Company, you may designate a third party
who, in the event of your death, shall thereafter be entitled to exercise your
option.

                                        2
<PAGE>

         10. Option not a Service Contract. Your option is not an employment or
service contract, and nothing in your option shall be deemed to create in any
way whatsoever any obligation on your part to continue in the employ of the
Company or an Affiliate, or of the Company or an Affiliate to continue your
employment. In addition, nothing in your option shall obligate the Company or an
Affiliate, their respective shareholders, Boards of Directors, Officers or
Employees to continue any relationship that you might have as a Director or
Consultant for the Company or an Affiliate.

         11. Withholding Obligations.

                  (a) At the time you exercise your option, in whole or in part,
or at any time thereafter as requested by the Company, you hereby authorize
withholding from payroll and any other amounts payable to you, and otherwise
agree to make adequate provision for any sums required to satisfy the federal,
state, local and foreign tax withholding obligations of the Company or an
Affiliate, if any, which arise in connection with your option.

                  (b) Upon your request and subject to approval by the Company,
in its sole discretion, and compliance with any applicable conditions or
restrictions of law, the Company may withhold from fully vested shares of Common
Stock otherwise issuable to you upon the exercise of your option a number of
whole shares of Common Stock having a Fair Market Value, determined by the
Company as of the date of exercise, not in excess of the minimum amount of tax
required to be withheld by law. If the date of determination of any tax
withholding obligation is deferred to a date later than the date of exercise of
your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of
the Code, covering the aggregate number of shares of Common Stock acquired upon
such exercise with respect to which such determination is otherwise deferred, to
accelerate the determination of such tax withholding obligation to the date of
exercise of your option. Notwithstanding the filing of such election, shares of
Common Stock shall be withheld solely from fully vested shares of Common Stock
determined as of the date of exercise of your option that are otherwise issuable
to you upon such exercise. Any adverse consequences to you arising in connection
with such share withholding procedure shall be your sole responsibility.

                  (c) You may not exercise your option unless the tax
withholding obligations of the Company and/or any Affiliate are satisfied.
Accordingly, you may not be able to exercise your option when desired even
though your option is vested, and the Company shall have no obligation to issue
a certificate for such shares of Common Stock or release such shares of Common
Stock from any escrow provided for herein.

         12. Notices. Any notices provided for in your option or the Plan shall
be given in writing and shall be deemed effectively given upon receipt or, in
the case of notices delivered by mail by the Company to you, five (5) days after
deposit in the United States mail, postage prepaid, addressed to you at the last
address you provided to the Company.

         13. Governing Plan Document. Your option is subject to all the
provisions of the Plan, the

                                        3
<PAGE>

provisions of which are hereby made a part of your option, and is further
subject to all interpretations, amendments, rules and regulations which may from
time to time be promulgated and adopted pursuant to the Plan. In the event of
any conflict between the provisions of your option and those of the Plan, the
provisions of the Plan shall control.

                                        4
<PAGE>

                               VerticalBuyer, Inc.
                            Stock Option Grant Notice
                        (Nonstatutory Stock Option Plan)

         VerticalBuyer, Inc. (the "Company"), pursuant to its Nonstatutory Stock
Option Plan (the "Plan"), hereby grants to Optionholder an option to purchase
the number of shares of the Company's Common Stock set forth below. This option
is subject to all of the terms and conditions as set forth herein and in the
Stock Option Agreement, the Plan and the Notice of Exercise, all of which are
attached hereto and incorporated herein in their entirety.

Optionholder:
                                            ------------------------------------

Date of Grant:
                                            ------------------------------------

Vesting Commencement Date:
                                            ------------------------------------

Number of Shares Subject to Option:
                                            ------------------------------------

Exercise Price (Per Share):
                                            ------------------------------------

Total Exercise Price:
                                            ------------------------------------

Expiration Date:
                                            ------------------------------------

Type of Grant:                              Nonstatutory Stock Option

Exercise Schedule:                          Same as Vesting Schedule

Vesting Schedule:
                                            ------------------------------------

Payment:
                                            ------------------------------------

Additional Terms/Acknowledgements:          The undersigned Optionholder
                                            acknowledges receipt of, and
                                            understands and agrees to, this
                                            Grant Notice, the Stock Option
                                            Agreement and the Plan. Optionholder
                                            further acknowledges that as of the
                                            Date of Grant, this Grant Notice,
                                            the Stock Option Agreement and the
                                            Plan set forth the entire
                                            understanding between Optionholder
                                            and the Company regarding the
                                            acquisition of stock in the Company
                                            and supersede all prior oral and
                                            written agreements on that subject
                                            with the exception of (i) options
                                            previously granted and delivered to

                                        1
<PAGE>

                                            Optionholder under the Plan, and
                                            (ii) the following agreements only:

Other Agreements:
                                            ------------------------------------

VerticalBuyer, Inc.                         Optionholder:

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

Name:                                       Name:
      ------------------------------              ------------------------------

Title:                                      Date:
      ------------------------------              ------------------------------

Date:
      ------------------------------

Attachments:      Stock Option Agreement
                  Nonstatutory Stock Option Plan

                                        2<PAGE>

                                             Executed in 6 Parts
                                             Counterpart No. (   )

                             NATIONAL EQUITY TRUST
                                DOW GROWTH SERIES
                           REFERENCE TRUST AGREEMENT

     This Reference Trust Agreement dated ________, 2000 among Prudential
Securities Incorporated, as Depositor and The Bank of New York, as Trustee, sets
forth certain provisions in full and incorporates other provisions by reference
to the document entitled "National Equity Trust, Trust Indenture and Agreement"
(the "Basic Agreement") dated February 2, 2000. Such provisions as are set forth
in full herein and such provisions as are incorporated by reference constitute a
single instrument (the "Indenture").

                                WITNESSETH THAT:

     In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee agree as follows: Part I.

                     STANDARD TERMS AND CONDITIONS OF TRUST

     Subject to the provisions of Part II hereof, all the provisions contained
in the Basic Agreement are herein incorporated by reference in their entirety
and shall be deemed to be a part of this instrument as fully and to the same
extent as though said provisions had been set forth in full in this instrument.

A.      Article III, entitled "Administration of Trust," shall be amended as
        follows:

        (i)  Section 3.14 Deferred Sales Charge shall be amended to add the
             following sentences at the end thereof:

             "References to Deferred Sales Charge in this Trust Indenture and
             Agreement shall include any Creation and Development Fee indicated
             in the prospectus for a Trust.  The Creation and Development Fee
             shall be payable on each date so designated and in an amount
             determined as specified in the prospectus for a Trust."

<PAGE>
                                    Part II.

                     SPECIAL TERMS AND CONDITIONS OF TRUST

     The following special terms and conditions are hereby agreed to:

A.   The Trust is denominated National Equity Trust, Dow Growth Series.

B.   The Units of the Trust shall be subject to a deferred sales charge.

C.   The publicly traded stocks listed in Schedule A hereto are those which,
     subject to the terms of this Indenture, have been or are to be deposited in
     Trust under this Indenture as of the date hereof.

D.   The term "Depositor" shall mean Prudential Securities Incorporated.

E.   The aggregate number of Units referred to in Sections 2.03 and 9.01 of the
      Basic Agreement is          as of the date hereof.

F.   A Unit of the Trust is hereby declared initially equal to 1/     th of the
     Trust.

G.   The term "First Settlement Date" shall mean                        , 2000.

H.   The terms "Computation Day" and "Record Date" shall be on such dates as the
     Sponsor shall direct.

I.   The term "Distribution Date" shall be on such dates as the Sponsor shall
     direct.

J.   The term "Termination Date" shall mean          , 2001.

K.   The Trustee's Annual Fee shall be $      (per 1,000 Units) for 49,999,999
     and below units outstanding $      (per 1,000 Units) on the next 50,000,000
     Units, $     (per 1,000 Units) on the next 100,000,000 Units and $     (per
     1,000 Units) on Units in excess of 200,000,000 Units.  In calculating the
     Trustee's annual fee, the fee applicable to the number of units outstanding
     shall apply to all units outstanding.

L.   The Depositor's Portfolio supervisory service fee shall be $     per 1,000
     Units.

               [Signatures and acknowledgments on separate pages]

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