Document:

EXHIBIT 10.39

May 31, 2000

Mr. Hoyt Hackney, President
Wellington Hall Caribbean Corporation ("WHCC" or "Company")
P.O. Box 1354
Lexington, North Carolina  27293-1354

Mr. Hoyt Hackney, President
Wellington Hall, Limited ("WH" or "Sponsor")
Route 17, U.S. Highway No 29. and No. 70
P.O. Box 1354
Lexington, North Carolina  27293-1354

Mr. Hoyt Hackney, President
Muebles Wellington Hall, S.A. ("Muebles" or "Guarantor")
P.O. Box 1371
San Pedro Sula, Honduras, C. A.

Re:  Wellington Hall Caribbean Corporation's
     Financing for Operations in Honduras

Ladies and Gentlemen:

1.   We refer to that  certain  letter  agreement  dated as of May 1,  2000 (the
"Forbearance  Agreement") among Wellington Hall Caribbean Corporation ("WHCC' or
"Company"),  Wellington Hall, Limited ("WH" or "Sponsor") and Muebles Wellington
Hall ("Muebles" or "Guarantor") and the Overseas Private Investment  Corporation
("OPIC" or "Lender"),  the Loan  Agreement,  as amended,  and related  documents
executed  among and between  WHCC,  WH, and  Muebles,  and OPIC with  respect to
WHCC's furniture  manufacturing  operations in Honduras (the "Project")  through
its  wholly  owned  subsidiary,  Muebles.  All  capitalized  terms  used and not
otherwise  defined herein shall have the meaning set forth for such terms in the
Loan Agreement and Forbearance Agreement.

2.   The Forbearance  Agreement is hereby amended at paragraph  3(ii),  which is
hereby amended and restated in its entirety as follows:

     "Make  quarterly  interest  payments  in the manner  specified  in the Loan
Agreement on the full,  unpaid balance of the loan,  effective as of October 31,
1999; and in lieu of making penalty interest  payments on each quarterly payment
date  specified in the Loan  Agreement,  the Company  shall pay a total  penalty
charge of $25,138.70 on October 31, 2000,  which represents the penalty interest
that will accrue during the Forbearance Period, computed on the basis of 360-day
years of twelve 30-day months; and"

3.   Except as expressly  provided herein, all other terms and conditions of the
Forbearance  Agreement  shall remain in full force and effect,  and the Company,
the Sponsor, and the Guarantor each hereby reaffirms its respective  obligations
under the Financing  Documents and the  Forbearance  Agreement and confirms that
such obligations remain in full force and effect, without any claims,  set-offs,
or defenses.

4.   Each  Signatory for WHCC,  the Sponsor and the Guarantor has full power and
authority to enter into this Agreement and to incur and perform all  obligations
and covenants  contained  herein,  all of which have been duly authorized by all
proper and necessary corporate action.

5.   This  Agreement  shall be  binding  upon and  inure to the  benefit  of the
Company, Sponsor,  Guarantor, OPIC, and each of their respective heirs, personal
representatives,   successors,  and  assigns.  None  of  the  Company,  Sponsor,
Guarantor shall assign any of their respective  rights or obligations under this
Agreement without the express written consent of OPIC.

<PAGE>
                                      -53-

6.   In case  one or  more  provisions  contained  in this  Agreement  shall  be
invalid,  illegal,  or unenforceable in any respect under any law, the validity,
legality,  and enforceability of the remaining  provision contained herein shall
remain effective and binding and shall not be affected or impaired thereby.

7.   This  Agreement  shall be governed by the laws of the  District of Columbia
without regard to the conflict of laws principles thereof.

     Please  sign  and  return  a  copy  of  this  Agreement   confirming   your
acknowledgment  and agreement  with the terms hereof,  whereupon  this Agreement
shall constitute a legally binding document.

Yours truly,

John R. Aldonas
Manager, Special Assets

                                   SIGNATURES

Wellington Hall Caribbean Corporation

By: ___________________________         Date: ___________________________

    Hoyt Hackney
    President

Wellington Hall, Limited

By: _____________________________       Date: __________________________

    Hoyt Hackney
    President

Muebles Wellington Hall, S.A.

By: ______________________________      Date: __________________________

    Hoyt Hackney
    President<PAGE>

                                                                    EXHIBIT 10.8

                          CROSSWORLDS SOFTWARE, INC.

                         2000 NON-EXECUTIVE STOCK PLAN

    1.   Purposes of the Plan.  The purposes of this Stock Plan are to attract
         --------------------
and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants and
to promote the success of the Company's business.  Options granted under the
Plan shall be Nonstatutory Stock Options.  Stock Purchase Rights may also be
granted under the Plan.

    2.   Definitions.  As used herein, the following definitions shall apply:
         -----------

         (a) "Administrator" means the Board or any of its Committees as shall
              -------------
be administering the Plan in accordance with Section 4 hereof.

         (b) "Applicable Laws" means the requirements relating to the
             -----------------
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are
granted under the Plan.

         (c) "Board" means the Board of Directors of the Company.
              -----

         (d) "Change of Control" means a sale of all or substantially all of the
              -----------------
Company's assets, or a merger, consolidation or other capital reorganization of
the Company with or into another corporation, or any other transaction or series
of related transactions in which the Company's stockholders immediately prior
thereto own less than 50% of the voting stock of the Company (or its successor
or parent) immediately thereafter.

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

         (f) "Committee"  means a committee of Directors appointed by the Board
              ---------
in accordance with Section 4 hereof.

         (g) "Common Stock" means the Common Stock of the Company.
              ------------

         (h) "Company" means CrossWorlds Software, Inc., a Delaware corporation.
              -------

         (i) "Consultant" means any person who is engaged by the Company or any
              ----------
Parent or Subsidiary to render consulting or advisory services to such entity,
excluding Officers, Named Executives and Directors of the Company.

         (j) "Director" means a member of the Board of Directors of the Company.
              --------

         (k) "Employee" means any person, excluding Officers, Directors and
              --------
Named Executives, employed by the Company or any Parent or Subsidiary of the
Company, with the
<PAGE>

status of employment determined based upon such minimum number of hours or
periods worked as shall be determined by the Administrator, subject to any
requirements of the Code. A Service Provider shall not cease to be an Employee
in the case of (i) any leave of absence approved by the Company or (ii)
transfers between locations of the Company or between the Company, its Parent,
any Subsidiary, or any successor. Neither service as a Director nor payment of a
director's fee by the Company shall be sufficient to constitute "employment" by
the Company.

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

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

              (i)   If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing price for such stock (or the closing bid,
if no sales were reported) as quoted on such exchange or system for the date of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;

              (ii)  If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
for the date of determination; or

              (iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.

         (n)  "Named Executive" means any individual who, on the last day of the
               ---------------
Company's fiscal year, is the chief executive officer of the Company (or is
acting in such capacity) or among the four most highly compensated officers of
the Company (other than the chief executive officer).  Such officer status shall
be determined pursuant to the executive compensation disclosure rules under the
Exchange Act.

         (o)  "Nonstatutory Stock Option" means an Option not intended to
              -------------------------
qualify as an Incentive Stock Option, as designated in the applicable Option
Agreement. "Incentive Stock Option" means an Option intended to qualify as an
            ----------------------
incentive stock option within the meaning of Section 422 of the Code.

         (p)  "Officer" means a person who is an officer of the Company within
               -------
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

         (q)  "Option" means a stock option granted pursuant to the Plan.
               ------

         (r)  "Option Agreement" means a written or electronic agreement between
               ----------------
the Company and an Optionee evidencing the terms and conditions of an individual
Option grant.  The Option Agreement is subject to the terms and conditions of
the Plan.

                                      -2-
<PAGE>

         (s)  "Option Exchange Program" means a program whereby outstanding
               -----------------------
Options are exchanged for Options with a lower exercise price.

         (t)  "Optioned Stock" means the Common Stock subject to an Option or a
               --------------
Stock Purchase Right.

         (u)  "Optionee" means the holder of an outstanding Option or Stock
               --------
Purchase Right granted under the Plan.

         (v)  "Parent" means a "parent corporation," whether now or hereafter
               ------
existing, as defined in Section 424(e) of the Code.

         (w)  "Plan" means this 2000 Non-Executive Stock Plan.
               ----

         (x)  "Restricted Stock" means shares of Common Stock acquired pursuant
               ----------------
to a grant of a Stock Purchase Right under Section 11 below.

         (y)  "Section 16(b)" means Section 16(b) of the Securities Exchange Act
               -------------
of 1934, as amended.

         (z)  "Service Provider" means an Employee or Consultant.
               ----------------

         (aa) "Share" means a share of the Common Stock, as adjusted in
               -----
accordance with Section 12 below.

         (bb) "Stock Purchase Right" means a right to purchase Common Stock
               --------------------
pursuant to Section 11 below.

         (cc) "Subsidiary" means a "subsidiary corporation," whether now or
               ----------
hereafter existing, as defined in Section 424(f) of the Code.

     3.  Stock Subject to the Plan.  Subject to the provisions of Section 12 of
         -------------------------
the Plan, the maximum aggregate number of Shares which may be subject to option
and sold under the Plan is 2,200,000. The Shares may be authorized but unissued,
or reacquired Common Stock.

         If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated).  However, Shares that have actually been issued under the Plan,
upon exercise of either an Option or Stock Purchase Right, shall not be returned
to the Plan and shall not become available for future distribution under the
Plan, except that if Shares of Restricted Stock are repurchased by the Company
at their original purchase price, such Shares shall become available for future
grant as Stock Purchase Rights or Nonstatutory Stock Options under the Plan.

     4.  Administration of the Plan.
         --------------------------

                                      -3-
<PAGE>

          (a) General.  The Plan shall be administered by the Board or a
              -------
Committee, or a combination thereof, as determined by the Board.  The Plan may
be administered by different administrative bodies with respect to different
classes of Optionees and, if permitted by the Applicable Laws, the Board may
authorize one or more officers (who may (but need not) be Officers) to grant
Options or Stock Purchase Rights to Employees and Consultants.

          (b) Committee Composition.  If a Committee has been appointed pursuant
              ---------------------
to this Section 4, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board.  From time to time the Board may
increase the size of any Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies (however caused) and remove all members of a Committee
and thereafter directly administer the Plan, all to the extent permitted by the
Applicable Laws.

         (d) Powers of the Administrator.  Subject to the provisions of the Plan
             ---------------------------
and, in the case of a Committee, the specific duties delegated by the Board to
such Committee, and subject to the approval of any relevant authorities, the
Administrator shall have the authority in its discretion:

             (i)    to determine the Fair Market Value;

             (ii)   to select the Service Providers to whom Options and Stock
Purchase Rights may from time to time be granted hereunder;

             (iii)  to determine the number of Shares to be covered by each
such award granted hereunder;

             (iv)   to approve forms of agreement for use under the Plan;

             (v)    to determine the terms and conditions, of any Option or
Stock Purchase Right granted hereunder. Such terms and conditions include, but
are not limited to, the exercise price, the time or times when Options or Stock
Purchase Rights may be exercised (which may be based on performance criteria),
any vesting acceleration or waiver of forfeiture restrictions, and any
restriction or limitation regarding any Option or Stock Purchase Right or the
Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;

             (vi)   to determine whether and under what circumstances an Option
may be settled in cash under subsection 10(f) instead of Common Stock;

             (vii)  to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option has declined since the date the Option was granted;

             (viii) to initiate an Option Exchange Program;

                                      -4-
<PAGE>

             (ix) to prescribe, amend and rescind rules and regulations relating
to the Plan, including rules and regulations relating to sub-plans established
for the purpose of qualifying for preferred tax treatment under foreign tax
laws;

             (x)  to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise
of an Option or Stock Purchase Right that number of Shares having a Fair Market
Value equal to the minimum statutory amount required to be withheld.  The Fair
Market Value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined.  All elections by
Optionees to have Shares withheld for this purpose shall be made in such form
and under such conditions as the Administrator may deem necessary or advisable;
and

             (xi) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.

         (d) Effect of Administrator's Decision.  All decisions, determinations
             ----------------------------------
and interpretations of the Administrator shall be final and binding on all
Optionees.

     5.  Eligibility.
         -----------

         (a) Nonstatutory Stock Options and Stock Purchase Rights may be granted
to Service Providers.

         (b) Each Option shall be designated in the Option Agreement as a
Nonstatutory Stock Option.

         (c) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon any Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall it interfere in
any way with his or her right or the Company's right to terminate such
relationship at any time, with or without cause.

     6.  Term of Plan.  The Plan shall become effective upon its adoption by the
         ------------
Board.  It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 14 of the Plan.

     7.  Term of Option.  The term of each Option shall be stated in the Option
         --------------
Agreement; provided, however, that the term shall be no more than ten (10) years
from the date of grant thereof.

     8.  Option Exercise Price and Consideration.
         ---------------------------------------

         (a) The per share exercise price for the Shares to be issued upon
exercise of an Option shall be such price as is determined by the Administrator.

         (b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator.  Such consideration  may consist of (1) cash, (2) check, (3)
promissory note, (4) other Shares which

                                      -5-
<PAGE>

(x) in the case of Shares acquired upon exercise of an Option, have been owned
by the Optionee for more than six months on the date of surrender, and (y) have
a Fair Market Value on the date of surrender equal to the aggregate exercise
price of the Shares as to which such Option shall be exercised, (5)
consideration received by the Company under a cashless exercise program
implemented by the Company in connection with the Plan, or (6) any combination
of the foregoing methods of payment. In making its determination as to the type
of consideration to accept, the Administrator shall consider if acceptance of
such consideration may be reasonably expected to benefit the Company.

    9.    Exercise of Option.
          ------------------

          (a) Procedure for Exercise; Rights as a Stockholder. Any Option
              -----------------------------------------------
granted hereunder shall be exercisable according to the terms hereof at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement, which may include vesting requirements and/or
performance criteria with respect to the Company and/or the Optionee.  Unless
the Administrator provides otherwise, vesting of Options granted hereunder shall
be tolled during any unpaid leave of absence.

          An Option may not be exercised for a fraction of a Share.

          An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised.  Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan.  Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Shares, notwithstanding the exercise of the Option.  The
Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised.  No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the Plan.

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

          (b) Termination of Relationship as a Service Provider.  If an Optionee
              -------------------------------------------------
ceases to be a Service Provider, such Optionee may exercise his or her Option
within such period of time as is specified in the Option Agreement (of at least
thirty (30) days) to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of the Option
as set forth in the Option Agreement).  In the absence of a specified time in
the Option Agreement, the Option shall remain exercisable for three (3) months
following the Optionee's termination.  If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan.  If,

                                      -6-
<PAGE>

after termination, the Optionee does not exercise his or her Option within the
time specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

         (c) Disability of Optionee.  If an Optionee ceases to be a Service
             ----------------------
Provider as a result of the Optionee's disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement).  In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination.  If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan.  If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

         (d) Death of Optionee.  If an Optionee dies while a Service Provider,
             -----------------
the Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death.  In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination.  If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
revert to the Plan.  The Option may be exercised by the executor or
administrator of the Optionee's estate or, if none, by the person(s) entitled to
exercise the Option under the Optionee's will or the laws of descent or
distribution.  If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

         (e) Extension of Exercise Period.  The Administrator shall have full
             ----------------------------
power and authority to extend the period of time for which an Option is to
remain exercisable following termination of an Optionee's Service Provider
relationship with the Company from the periods set forth in Sections 9(b), 9(c)
and 9(d) above or in the Option Agreement to such greater time as the Board
shall deem appropriate, provided that in no event shall such Option be
exercisable later than the date of expiration of the term of such Option as set
forth in the Option Agreement.

         (f) Buyout Provisions.  The Administrator may at any time offer to buy
             -----------------
out for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.

     10. Non-Transferability of Options and Stock Purchase Rights.  Options and
         --------------------------------------------------------
Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution provided that, the Administrator may in its discretion
grant transferable Options pursuant to Option Agreements

                                      -7-
<PAGE>

specifying (i) the manner in which such Options are transferable and (ii) that
any such transfer shall be subject to the Applicable Laws. The designation of a
beneficiary by an Optionee will not constitute a transfer. An Option or Stock
Purchase Right may be exercised, during the lifetime of the holder of Option or
Stock Purchase Right, only by such holder or a transferee permitted by this
Section 10.

    11.  Stock Purchase Rights.
         ---------------------

         (a) Rights to Purchase.  Stock Purchase Rights may be issued either
             ------------------
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan.  After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically of the terms, conditions and restrictions
related to the offer, including the number of Shares that such person shall be
entitled to purchase, the price to be paid, and the time within which such
person must accept such offer. The offer shall be accepted by execution of a
Restricted Stock purchase agreement in the form determined by the Administrator.

         (b) Repurchase Option.  Unless the Administrator determines otherwise,
             -----------------
the Restricted Stock purchase agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
disability).  The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company.  The repurchase option shall lapse at such rate as the
Administrator may determine.

         (c) Other Provisions.  The Restricted Stock purchase agreement shall
             ----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.

         (d) Rights as a Stockholder.  Once the Stock Purchase Right is
             -----------------------
exercised, the purchaser shall have rights equivalent to those of a stockholder
and shall be a stockholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company.  No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 11 of
the Plan.

    12.  Adjustments Upon Changes in Capitalization, Change of Control.
         -------------------------------------------------------------

         (a) Changes in Capitalization.  Subject to any required action by the
             -------------------------
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, the number of shares of Common
Stock which have been authorized for issuance under the Plan but as to which no
Options or Stock Purchase Rights have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock

                                      -8-
<PAGE>

split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company.
The conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an Option or Stock Purchase Right.

         (b) Dissolution or Liquidation.  In the event of the proposed
             --------------------------
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction.  The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until fifteen (15) days prior to
such transaction as to all of the Optioned Stock covered thereby, including
Shares as to which the Option would not otherwise be exercisable.  In addition,
the Administrator may provide that any Company repurchase option applicable to
any Shares purchased upon exercise of an Option or Stock Purchase Right shall
lapse as to all such Shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated.  To the extent it has
not been previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.

         (c) Change of Control.  In the event of a Change of Control, each
             -----------------
outstanding Option and Stock Purchase Right shall be assumed or an equivalent
option or right substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation.  In the event that the successor
corporation refuses to assume or substitute for the Option or Stock Purchase
Right, the Optionee shall fully vest in and have the right to exercise the
Option or Stock Purchase Right as to all of the Optioned Stock, including Shares
as to which it would not otherwise be vested or exercisable.  If an Option or
Stock Purchase Right becomes fully vested and exercisable in lieu of assumption
or substitution in the event of a merger or sale of assets, the Administrator
shall notify the Optionee in writing or electronically that the Option or Stock
Purchase Right shall be fully exercisable for a period of fifteen (15) days from
the date of such notice, and the Option or Stock Purchase Right shall terminate
upon the expiration of such period.  For the purposes of this paragraph, the
Option or Stock Purchase Right shall be considered assumed if, following the
Change of Control, the option or right confers the right to purchase or receive,
for each Share of Optioned Stock subject to the Option or Stock Purchase Right
immediately prior to the Change of Control, the consideration (whether stock,
cash, or other securities or property) received in the Change of Control by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the Change of Control
is not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of the Option or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right, to be

                                      -9-
<PAGE>

solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the Change of Control.

         (d) Termination Following A Change of Control.  If the holder of an
             -----------------------------------------
Option or Stock Purchase Right is an employee of the Company and such holder's
employment terminates as a result of an Involuntary Termination other than for
Cause (as such terms are defined below) at any time within (1) one year
following a Change of Control, then, subject to subsection (e) below, (i) in the
case of an Option, the unvested shares under such Option shall automatically be
accelerated and become exercisable as of the effective date of the Involuntary
Termination in an amount equal to twelve (12) months of further vesting in
accordance with the vesting schedule specified in the employee's option
agreement and (ii) in the case of a Stock Purchase Right, any rights of
repurchase with respect to such Stock Purchase Right shall automatically
terminate as of the effective date of the Involuntary Termination with respect
to an amount of shares equal to twelve (12) months of further vesting in
accordance with the vesting schedule set forth in the employee's restricted
stock purchase agreement.

         (e) Limitation on Payments.  In the event that the vesting acceleration
             ----------------------
provided for in subsection (d) above (i) constitutes "parachute payments" within
the meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), and (ii) but for this subsection (e), would be subject to the
excise tax imposed by Section 4999 of the Code (or any corresponding provisions
of state income tax law), then the vesting acceleration pursuant to subsection
(d) above shall be either

             (i)  delivered in full, or

             (ii) delivered as to such lesser extent which would result in no
portion of such severance benefits being subject to excise tax under Section
4999 of the Code, whichever of the foregoing amounts, taking into account the
applicable federal, state and local income taxes and the excise tax imposed by
Section 4999, results in the receipt by the holder of an Option or Stock
Purchase Right on an after-tax-basis, of the greater amount of severance
benefits, notwithstanding that all or some portion of such severance benefits
may be taxable under Section 4999 of the Code.  Any determination required under
this subsection (e) shall be made in writing by the Company's independent
accountants, whose determination shall be conclusive and binding on the Company
and all holders of Options and Stock Purchase Rights for all purposes. In the
event that subdivision (i) above applies, then the holder of the Option or Stock
Purchase Rights shall be responsible for any excise taxes imposed with respect
to such severance and other benefits.  In the event that subdivision (ii) above
applies, then each benefit provided hereunder shall be proportionately reduced
to the extent necessary to avoid imposition of such excise taxes.

         (f) Definition of Terms.  The following terms used in subsections (d)
             -------------------
through (e) shall have the following meanings:

             (i) Cause.  "Cause" shall mean (i) gross negligence or willful
                 -----
misconduct in the performance of an employee's duties to the Company; (ii)
repeated unexplained or unjustified absence from the Company; (iii) a material
and willful violation of any federal or state law; (iv) refusal or failure to
act in accordance with any specific direction or

                                      -10-
<PAGE>

order of, or contractual obligation with, the Company; (v) commission of any act
of fraud with respect to the Company; or (vi) conviction of or plea of no
contest to a felony or a crime involving moral turpitude causing material harm
to the standing and reputation of the Company, in each case as determined by the
Board of Directors of the Company.

               (ii) Involuntary Termination.  "Involuntary Termination" shall
                    -----------------------
mean (A) any termination by the Company without Cause and (B) a voluntary
resignation by an employee within 60 days following the occurrence of one of the
following events without the employee's express written consent: (i) the
significant reduction of such employee's duties, authority or responsibilities,
relative to the employee's duties, authority or responsibilities as in effect
immediately prior to such reduction, or the assignment to the employee of such
reduced duties, authority or responsibilities, provided, however, that the
assignment of the employee to a position with the same title as the employee
then holds, or substantially similar title, in a business unit, division or
subsidiary of the Company following a Change of Control or a company into which
the Company is merged in a Change of Control or otherwise acquiring assets or
voting shares of the Company in connection with a Change of Control, or a parent
of such a company, shall not constitute a significant reduction of duties,
authority or responsibilities; (ii) a material reduction by the Company in the
base salary of the employee as in effect immediately prior to such reduction;
(iii) a material reduction by the Company in the kind or level of employee
benefits, including bonuses, to which the employee was entitled immediately
prior to such reduction with the result that the employee's overall benefits
package is significantly reduced; or (iv) the relocation of the employee to a
facility or a location more than fifty (50) miles from the employee's then
present location.

    13.  Time of Granting Options and Stock Purchase Rights.  The date of grant
         --------------------------------------------------
of an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Employee or Consultant to
whom an Option or Stock Purchase Right is so granted within a reasonable time
after the date of such grant.

    14.  Amendment and Termination of the Plan.
         -------------------------------------

         (a) Amendment and Termination.  The Board may at any time amend, alter,
             -------------------------
suspend or terminate the Plan.

         (b) Effect of Amendment or Termination.  No amendment, alteration,
             ----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.

                                      -11-
<PAGE>

    15.  Conditions Upon Issuance of Shares.
         ----------------------------------

         (a) Legal Compliance.  Shares shall not be issued pursuant to the
             ----------------
exercise of an Option  unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with the Applicable Laws and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

         (b) Investment Representations.  As a condition to the exercise of an
             --------------------------
Option, the Administrator may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

    16.  Inability to Obtain Authority.  The inability of the Company to obtain
         -----------------------------
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

    17.  Reservation of Shares.  The Company, during the term of this Plan,
         ---------------------
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

    18.  Information to Optionees and Purchasers.  The Company shall provide to
         ---------------------------------------
each Optionee and to each individual who acquires Shares pursuant to the Plan,
copies of annual reports and other information which are provided to all
stockholders of the Company.

                                      -12-

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