Document:

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                                                                   Exhibit 10.20

                               SECURITY AGREEMENT

                         Dated as of September 22, 2000

                                     between

                             EROOM TECHNOLOGY, INC.

                                       and

                               FLEET NATIONAL BANK

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                                TABLE OF CONTENTS

1.   DEFINITIONS........................................................1
2.   GRANT OF SECURITY INTEREST.........................................1
         2.1.   COLLATERAL GRANTED......................................1
         2.2.   DELIVERY OF INSTRUMENTS, ETC............................2
3.   TITLE TO COLLATERAL, ETC...........................................4
4.   CONTINUOUS PERFECTION..............................................4
5.   NO LIENS...........................................................4
6.   NO TRANSFERS.......................................................5
7.   INSURANCE..........................................................5
         7.1.   MAINTENANCE OF INSURANCE................................5
         7.2.   INSURANCE PROCEEDS......................................6
         7.3.   NOTICE OF CANCELLATION, ETC.............................6
8.   MAINTENANCE OF COLLATERAL; COMPLIANCE WITH LAW.....................6
9.   COLLATERAL PROTECTION EXPENSES; PRESERVATION OF COLLATERAL.........7
         9.1.   EXPENSES INCURRED BY BANK...............................7
         9.2.   BANK'S OBLIGATIONS AND DUTIES...........................7
10.   SECURITIES AND DEPOSITS...........................................7
11.   NOTIFICATION TO ACCOUNT DEBTORS AND OTHER OBLIGORS................8
12.   FURTHER ASSURANCES................................................8
13.   POWER OF ATTORNEY.................................................9
         13.1.   APPOINTMENT AND POWERS OF BANK.........................9
         13.2.   RATIFICATION BY COMPANY................................10
         13.3.   NO DUTY ON BANK........................................10
14.   REMEDIES..........................................................10
15.   NO WAIVER, ETC....................................................11
16.   MARSHALLING.......................................................11
17.   PROCEEDS OF DISPOSITIONS; EXPENSES................................12
18.   OVERDUE AMOUNTS...................................................12
19.   GOVERNING LAW; CONSENT TO JURISDICTION............................12
20.   WAIVER OF JURY TRIAL..............................................13
21.   CONCERNING REVISED ARTICLE 9 OF THE UNIFORM COMMERCIAL CODE.......13
         21.1.   ATTACHMENT.............................................13
         21.2.   PERFECTION BY FILING...................................14
         21.3.   OTHER PERFECTION, ETC..................................14
         21.4.   OTHER PROVISIONS.......................................15
         21.5.   SAVINGS CLAUSE.........................................15
22.   MISCELLANEOUS.....................................................15

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                               SECURITY AGREEMENT

     SECURITY AGREEMENT, dated as of September 22, 2000, between EROOM
TECHNOLOGY, INC., a Delaware corporation (the "Company"), and FLEET NATIONAL
BANK, a national banking association (hereinafter, the "Bank").

     WHEREAS, the Company has entered into a Credit Agreement of even date (as
amended and in effect from time to time, the "Credit Agreement"), with the Bank,
pursuant to which the Bank, subject to the terms and conditions contained
therein, is to make loans or otherwise extend credit to the Company; and

     WHEREAS, it is a condition precedent to the Bank's making any loans or
otherwise extending credit to the Company under the Credit Agreement that the
Company execute and deliver to the Bank a security agreement in substantially
the form hereof; and

     WHEREAS, the Company wishes to grant security interests in favor of the
Bank as herein provided;

     NOW, THEREFORE, in consideration of the promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

     1. DEFINITIONS. All capitalized terms used herein without definitions shall
have the respective meanings provided therefor in the Credit Agreement. The term
"Obligations", as used herein, means all of the indebtedness, obligations and
liabilities of the Company to the Bank, individually or collectively, whether
direct or indirect, joint or several, absolute or contingent, due or to become
due, now existing or hereafter arising under or in respect of the Credit
Agreement, any promissory notes or other instruments or agreements executed and
delivered pursuant thereto or in connection therewith or this Agreement.

     2. GRANT OF SECURITY INTEREST.

          2.1. COLLATERAL GRANTED. The Company hereby grants to the Bank, to
     secure the payment and performance in full of all of the Obligations, a
     security interest in and so pledges and assigns to the Bank the following
     properties, assets and rights of the Company, wherever located, whether now
     owned or hereafter acquired or arising, and all proceeds and products
     thereof (all of the same being hereinafter called the "Collateral"):

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               All personal property of every kind and nature including without
          limitation all furniture, equipment, raw materials, inventory, or
          other goods, accounts, contract rights, rights to the payment of
          money, insurance refund claims and all other insurance claims and
          proceeds, tort claims, chattel paper, documents, instruments,
          securities and other investment property, deposit accounts, rights to
          proceeds of letters of credit and all general intangibles including,
          without limitation, all tax refund claims, license fees, computer
          programs, computer software, engineering drawings, service marks,
          customer lists, goodwill, and all licenses, permits, agreements of any
          kind or nature pursuant to which the Company possesses, uses or has
          authority to possess or use property (whether tangible or intangible)
          of others or others possess, use or have authority to possess or use
          property (whether tangible or intangible) of the Company, and all
          recorded data of any kind or nature, regardless of the medium of
          recording including, without limitation, all software, writings,
          plans, specifications and schematics, excluding, however, all patents,
          patent applications, trademarks, trademark applications, trade names,
          copyrights, copyright applications and rights to sue and recover for
          past infringement of patents, trademarks and copyrights except to the
          extent that any such patents, patent applications, trademarks,
          trademark applications, trade name, copyrights, copyright
          applications, and rights to sue and recover for past infringement of
          patents, trademarks and copyrights are necessary to sell, dispose or
          collect any of the Collateral.

          2.2. DELIVERY OF INSTRUMENTS, ETC.

               (a) Pursuant to the terms hereof, the Company has endorsed,
          assigned and delivered to the Bank all negotiable or non-negotiable
          instruments, certificated securities and chattel paper pledged by it
          hereunder, together with instruments of transfer or assignment duly
          executed in blank as the Bank may have specified. In the event that
          the Company shall, after the date of this Agreement, acquire any other
          negotiable or non-negotiable instruments, certificated securities or
          chattel paper to be pledged by it hereunder, the Company shall
          forthwith endorse, assign and deliver the same to the Bank,
          accompanied by such instruments of transfer or assignment duly
          executed in blank as the Bank may from time to time specify.

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               (b) To the extent that any securities now or hereafter acquired
          by the Company are uncertificated and are issued to the Company or its
          nominee directly by the issuer thereof, the Company shall cause the
          issuer to note on its books the security interest of the Bank in such
          securities and shall cause the issuer, pursuant to an agreement in
          form and substance satisfactory to the Bank, to agree to comply with
          instructions from the Bank as to such securities, without further
          consent of the Company or such nominee. To the extent that any
          securities, whether certificated or uncertificated, or other
          investment property now or hereafter acquired by the Company is held
          by the Company or its nominee through a securities intermediary or
          commodity intermediary, the Company shall, at the request of the Bank,
          cause such securities intermediary or (as the case may be) commodity
          intermediary, pursuant to an agreement in form and substance
          satisfactory to the Bank, to agree to comply with entitlement orders
          or other instructions from the Bank to such securities intermediary as
          to such securities or other investment property, or (as the case may
          be) to apply any value distributed on account of any commodity
          contract as directed by the Bank to such commodity intermediary,
          without further consent of the Company or such nominee. The Bank
          agrees with the Company that the Bank shall not give any such
          entitlement orders or instructions or directions to any such issuer,
          securities intermediary or commodity intermediary unless an Event of
          Default has occurred and is continuing and the Bank has elected to
          exercise its rights and remedies as contemplated by ss.14.

               (c) To the extent that the Company is a beneficiary under any
          written letter of credit now or hereafter issued in favor of the
          Company, the Company shall deliver such letter of credit to the Bank.
          The Bank shall from time to time, at the request and expense of the
          Company, make such arrangements with the Company as are in the Bank's
          reasonable judgment necessary and appropriate so that the Company may
          make any drawing to which the Company is entitled under such letter of
          credit, without impairment of the Bank's perfected security interest
          in the Company's rights to proceeds of such letter of credit or in the
          actual proceeds of such drawing. At the Bank's request, the Company
          shall, for any letter of credit, whether or not written, now or
          hereafter issued in favor of the Company as beneficiary, execute and

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          deliver to the issuer and any confirmer of such letter of credit an
          assignment of proceeds form, in favor of the Bank and satisfactory to
          the Bank and such issuer or (as the case may be) such confirmer,
          requiring the proceeds of any drawing under such letter of credit to
          be paid directly to the Bank for application as provided in the Credit
          Agreement.

     3. TITLE TO COLLATERAL, ETC. The Company is the owner of the Collateral
free from any adverse lien, security interest or other encumbrance, except for
the security interest created by this Agreement and other liens permitted by the
Credit Agreement. None of the Collateral constitutes, or is the proceeds of,
"farm products" as defined in ss.9-109(3) of the Massachusetts UCC. None of the
account debtors in respect of any accounts, chattel paper or general intangibles
and none of the obligors in respect of any instruments included in the
Collateral is a governmental authority subject to the Federal Assignment of
Claims Act.

     4. CONTINUOUS PERFECTION. The Company's place of business or, if more than
one, chief executive office is indicated on the Perfection Certificate delivered
to the Bank herewith (the "Perfection Certificate"). The Company will not change
the same, or the name, identity or corporate structure of the Company in any
manner, without providing at least 30 days prior written notice to the Bank. The
Collateral, to the extent not delivered to the Bank pursuant to ss.2.2, will be
kept at those locations listed on the Perfection Certificate and the Company
will not remove the Collateral from such locations, without providing at least
30 days prior written notice to the Bank.

     5. NO LIENS. Except for the security interest herein granted and as
permitted under the Credit Agreement, the Company shall be the owner of the
Collateral free from any lien, security interest or other encumbrance, and the
Company shall defend the same against all claims and demands of all persons at
any time claiming the same or any interests therein adverse to the Bank. The
Company shall not pledge, mortgage or create, or suffer to exist a security
interest in the Collateral in favor of any person other than the Bank or as
permitted under the Credit Agreement.

     6. NO TRANSFERS. The Company will not sell or offer to sell or otherwise
transfer the Collateral or any interest therein except for (i) sale and leases
of inventory and licenses of general intangibles in the ordinary course of
business and (ii) sales or other dispositions of obsolescent items of equipment
in the ordinary course of business consistent with past practices.

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     7. INSURANCE.

          7.1. MAINTENANCE OF INSURANCE. The Company will maintain with
     financially sound and reputable insurers insurance with respect to its
     properties and business against such casualties and contingencies as shall
     be in accordance with general practices of businesses engaged in similar
     activities in similar geographic areas. Such insurance shall be in such
     minimum amounts that the Company will not be deemed a co-insurer under
     applicable insurance laws, regulations and policies and otherwise shall be
     in such amounts, contain such terms, be in such forms and be for such
     periods as may be reasonably satisfactory to the Bank. In addition, all
     such insurance shall be payable to the Bank as loss payee under a
     "standard" or "New York" loss payee clause. Without limiting the foregoing,
     the Company will (i) keep all of its physical property insured with
     casualty or physical hazard insurance on an "all risks" basis, with broad
     form flood and earthquake coverages and electronic data processing
     coverage, with a full replacement cost endorsement and an "agreed amount"
     clause in an amount equal to 100% of the full replacement cost of such
     property, (ii) maintain all such workers' compensation or similar insurance
     as may be required by law and (iii) maintain, in amounts and with
     deductibles equal to those generally maintained by businesses engaged in
     similar activities in similar geographic areas, general public liability
     insurance against claims of bodily injury, death or property damage
     occurring, on, in or about the properties of the Company; business
     interruption insurance; and product liability insurance.

          7.2. INSURANCE PROCEEDS. The proceeds of any casualty insurance in
     respect of any casualty loss of any of the Collateral shall, subject to the
     rights, if any, of other parties with a prior interest in the property
     covered thereby, (i) so long as no Default or Event of Default has occurred
     and is continuing and to the extent that the amount of such proceeds is
     less than $250,000.00, be disbursed to the Company for direct application
     by the Company solely to the repair or replacement of the Company's
     property so damaged or destroyed and (ii) in all other circumstances, be
     held by the Bank as cash collateral for the Obligations. The Bank may, at
     its sole option, disburse from time to time all or any part of such
     proceeds so held as cash collateral, upon such terms and conditions as the
     Bank may reasonably prescribe, for direct application by the Company solely
     to the repair or replacement of the Company's property so damaged or
     destroyed, or the Bank may apply all or any part of such proceeds to the
     Obligations with the Revolving Credit

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     Commitment (if not then terminated) being reduced by the amount so applied
     to the Obligations.

          7.3. NOTICE OF CANCELLATION, ETC. All policies of insurance shall
     provide for at least thirty (30) days prior written cancellation notice to
     the Bank. In the event of failure by the Company to provide and maintain
     insurance as herein provided, the Bank may, at its option, provide such
     insurance and charge the amount thereof to the Company. The Company shall
     furnish the Bank with certificates of insurance and policies evidencing
     compliance with the foregoing insurance provision.

     8. MAINTENANCE OF COLLATERAL; COMPLIANCE WITH LAW. The Company will keep
the Collateral in good order and repair and will not use the same in violation
of law or any policy of insurance thereon. The Bank, or its designee, may
inspect the Collateral at any reasonable time, upon reasonable prior (notice so
long as no Default or Event of Default has occurred and is continuing) wherever
located. The Company will pay promptly when due all taxes, assessments,
governmental charges and levies upon the Collateral or incurred in connection
with the use or operation of such Collateral or incurred in connection with this
Agreement. The Company has at all times operated, and the Company will continue
to operate, its business in compliance with all applicable provisions of the
federal Fair Labor Standards Act, as amended, and with all applicable provisions
of federal, state and local statutes and ordinances dealing with the control,
shipment, storage or disposal of hazardous materials or substances.

     9. COLLATERAL PROTECTION EXPENSES; PRESERVATION OF COLLATERAL.

          9.1. EXPENSES INCURRED BY BANK. In its discretion, the Bank may
     discharge taxes and other encumbrances at any time levied or placed on any
     of the Collateral, make repairs thereto and pay any necessary filing fees.
     The Company agrees to reimburse the Bank on demand for any and all
     expenditures so made. The Bank shall have no obligation to the Company to
     make any such expenditures, nor shall the making thereof relieve the
     Company of any default.

          9.2. BANK'S OBLIGATIONS AND DUTIES. Anything herein to the contrary
     notwithstanding, the Company shall remain liable under each contract or
     agreement comprised in the Collateral to be observed or performed by the
     Company thereunder. The Bank shall not have any obligation or liability
     under any such contract or agreement by reason of or arising out of this
     Agreement or the receipt by the Bank of any payment relating to any of the

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     Collateral, nor shall the Bank be obligated in any manner to perform any of
     the obligations of the Company under or pursuant to any such contract or
     agreement, to make inquiry as to the nature or sufficiency of any payment
     received by the Bank in respect of the Collateral or as to the sufficiency
     of any performance by any party under any such contract or agreement, to
     present or file any claim, to take any action to enforce any performance or
     to collect the payment of any amounts which may have been assigned to the
     Bank or to which the Bank may be entitled at any time or times. The Bank's
     sole duty with respect to the custody, safe keeping and physical
     preservation of the Collateral in its possession, under ss.9-207 of the
     Massachusetts UCC or otherwise, shall be to deal with such Collateral in
     the same manner as the Bank deals with similar property for its own
     account.

     10. SECURITIES AND DEPOSITS. The Bank may at any time, at its option,
transfer to itself or any nominee, as pledgee, any securities constituting
Collateral, receive any income thereon and hold such income as additional
Collateral or apply it to the Obligations. During the continuation of an Event
of Default, the Bank may demand, sue for, collect, or make any settlement or
compromise which it deems desirable with respect to the Collateral. Regardless
of the adequacy of Collateral or any other security for the Obligations, during
the continuation of an Event of Default, any deposits or other sums at any time
credited by or due from the Bank to the Company may at any time be applied to or
set off against any of the Obligations.

     11. NOTIFICATION TO ACCOUNT DEBTORS AND OTHER OBLIGORS. If an Event of
Default shall have occurred and be continuing, the Company shall, at the request
of the Bank, notify account debtors on accounts, chattel paper and general
intangibles of the Company and obligors on instruments for which the Company is
an obligee of the security interest of the Bank in any account, chattel paper,
general intangible or instrument and that payment thereof is to be made directly
to the Bank or to any financial institution designated by the Bank as the Bank's
agent therefor, and the Bank may itself, if an Event of Default shall have
occurred and be continuing, without notice to or demand upon the Company, so
notify account debtors and obligors. After the making of such a request or the
giving of any such notification, the Company shall hold any proceeds of
collection of accounts, chattel paper, general intangibles and instruments
received by the Company as trustee for the Bank without commingling the same
with other funds of the Company and shall turn the same over to the Bank in the
identical form received, together with any necessary endorsements or
assignments. The Bank

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shall apply the proceeds of collection of accounts, chattel paper, general
intangibles and instruments received by the Bank to the Obligations, such
proceeds to be immediately entered after final payment in cash or solvent
credits of the items giving rise to them.

     12. FURTHER ASSURANCES. The Company, at its own expense, shall do, make,
execute and deliver all such additional and further acts, things, deeds,
assurances and instruments as the Bank may require more completely to vest in
and assure to the Bank its rights hereunder or in any of the Collateral,
including, without limitation, (i) executing, delivering and, where appropriate,
filing financing statements and continuation statements under the Uniform
Commercial Code, (ii) obtaining governmental and other third party consents and
approvals, including without limitation any consent of any licensor, lessor or
other applicable party referred to in ss.2.3, (iii) obtaining waivers from
mortgagees and landlords and (iv) taking all actions required by Sections 8-313
and 8-321 of the Uniform Commercial Code (1990) or Sections 8-106 and 9-115 of
the Uniform Commercial Code (1994), as applicable in each relevant jurisdiction,
with respect to certificated and uncertificated securities.

     13. POWER OF ATTORNEY.

          13.1. APPOINTMENT AND POWERS OF BANK. The Company hereby irrevocably
     constitutes and appoints the Bank and any officer or agent thereof, with
     full power of substitution, as its true and lawful attorneys-in-fact with
     full irrevocable power and authority in the place and stead of the Company
     or in the Bank's own name, for the purpose of carrying out the terms of
     this Agreement, to take any and all appropriate action and to execute any
     and all documents and instruments that may be necessary or desirable to
     accomplish the purposes of this Agreement and, without limiting the
     generality of the foregoing, hereby gives said attorneys the power and
     right, on behalf of the Company, without notice to or assent by the
     Company, to do the following:

               (a) upon the occurrence and during the continuance of an Event of
          Default, generally to sell, transfer, pledge, make any agreement with
          respect to or otherwise deal with any of the Collateral in such manner
          as is consistent with the Massachusetts UCC and as fully and
          completely as though the Bank were the absolute owner thereof for all
          purposes, and to do at the Company's expense, at any time, or from
          time to time, all acts and things which the Bank deems necessary

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          to protect, preserve or realize upon the Collateral and the Bank's
          security interest therein, in order to effect the intent of this
          Agreement, all as fully and effectively as the Company might do,
          including, without limitation, (i) upon written notice to the Company,
          the exercise of voting rights with respect to voting securities, which
          rights may be exercised, if the Bank so elects, with a view to causing
          the liquidation in a commercially reasonable manner of assets of the
          issuer of any such securities and (ii) the execution, delivery and
          recording, in connection with any sale or other disposition of any
          Collateral, of the endorsements, assignments or other instruments of
          conveyance or transfer with respect to such Collateral; and

               (b) to file such financing statements with respect hereto, with
          or without the Company's signature, or a photocopy of this Agreement
          in substitution for a financing statement, as the Bank may deem
          appropriate and to execute in the Company's name such financing
          statements and amendments thereto and continuation statements which
          may require the Company's signature.

          13.2. RATIFICATION BY COMPANY. To the extent permitted by law, the
     Company hereby ratifies all that said attorneys shall lawfully do or cause
     to be done by virtue hereof. This power of attorney is a power coupled with
     an interest and shall be irrevocable.

          13.3. NO DUTY ON BANK. The powers conferred on the Bank hereunder are
     solely to protect its interests in the Collateral and shall not impose any
     duty upon it to exercise any such powers. The Bank shall be accountable
     only for the amounts that it actually receives as a result of the exercise
     of such powers and neither it nor any of its officers, directors, employees
     or agents shall be responsible to the Company for any act or failure to
     act, except for the Bank's own gross negligence or willful misconduct.

     14. REMEDIES. If an Event of Default shall have occurred and be continuing,
the Bank may, without notice to or demand upon the Company, declare this
Agreement to be in default, and the Bank shall thereafter have in any
jurisdiction in which enforcement hereof is sought, in addition to all other
rights and remedies, the rights and remedies of a secured party under the
Uniform Commercial Code, including, without limitation, the right to take
possession of the Collateral, and for that

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purpose the Bank may, so far as the Company can give authority therefor, enter
upon any premises on which the Collateral may be situated and remove the same
therefrom. The Bank may in its discretion require the Company to assemble all or
any part of the Collateral at such location or locations within the state(s) of
the Company's principal office(s) or at such other locations as the Bank may
designate which is reasonably convenient to both the Company and the Bank.
Unless the Collateral is perishable or threatens to decline speedily in value or
is of a type customarily sold on a recognized market, the Bank shall give to the
Company at least seven Business Days prior written notice of the time and place
of any public sale of Collateral or of the time after which any private sale or
any other intended disposition is to be made. The Company hereby acknowledges
that seven Business Days prior written notice of such sale or sales shall be
reasonable notice. In addition, the Company waives any and all rights that it
may have to a judicial hearing in advance of the enforcement of any of the
Bank's rights hereunder, including, without limitation, its right following an
Event of Default to take immediate possession of the Collateral and to exercise
its rights with respect thereto.

     15. NO WAIVER, ETC. The Company waives demand, notice, protest, notice of
acceptance of this Agreement, notice of loans made, credit extended, Collateral
received or delivered or other action taken in reliance hereon and all other
demands and notices of any description. With respect to both the Obligations and
the Collateral, the Company assents to any extension or postponement of the time
of payment or any other indulgence, to any substitution, exchange or release of
or failure to perfect any security interest in any Collateral, to the addition
or release of any party or person primarily or secondarily liable, to the
acceptance of partial payment thereon and the settlement, compromising or
adjusting of any thereof, all in such manner and at such time or times as the
Bank may deem advisable. The Bank shall have no duty as to the collection or
protection of the Collateral or any income thereon, nor as to the preservation
of rights against prior parties, nor as to the preservation of any rights
pertaining thereto beyond the safe custody thereof as set forth in ss.9.2. The
Bank shall not be deemed to have waived any of its rights upon or under the
Obligations or the Collateral unless such waiver shall be in writing and signed
by the Bank. No delay or omission on the part of the Bank in exercising any
right shall operate as a waiver of such right or any other right. A waiver on
any one occasion shall not be construed as a bar to or waiver of any right on
any future occasion. All rights and remedies of the Bank with respect to the
Obligations or the Collateral, whether evidenced hereby or by any other
instrument or papers, shall be cumulative and may be exercised singularly,
alternatively, successively or concurrently at such time or at such times as the
Bank deems expedient.

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     16. MARSHALLING. The Bank shall not be required to marshal any present or
future collateral security (including but not limited to this Agreement and the
Collateral) for, or other assurances of payment of, the Obligations or any of
them or to resort to such collateral security or other assurances of payment in
any particular order, and all of its rights hereunder and in respect of such
collateral security and other assurances of payment shall be cumulative and in
addition to all other rights, however existing or arising. To the extent that it
lawfully may, the Company hereby agrees that it will not invoke any law relating
to the marshalling of collateral which might cause delay in or impede the
enforcement of the Bank's rights under this Agreement or under any other
instrument creating or evidencing any of the Obligations or under which any of
the Obligations is outstanding or by which any of the Obligations is secured or
payment thereof is otherwise assured, and, to the extent that it lawfully may,
the Company hereby irrevocably waives the benefits of all such laws.

     17. PROCEEDS OF DISPOSITIONS; EXPENSES. The Company shall pay to the Bank
on demand any and all expenses, including reasonable attorneys' fees and
disbursements, incurred or paid by the Bank in protecting, preserving or
enforcing the Bank's rights under or in respect of any of the Obligations or any
of the Collateral. After deducting all of said expenses, the residue of any
proceeds of collection or sale of the Obligations or Collateral shall, to the
extent actually received in cash, be applied to the payment of the Obligations
in such order or preference as the Bank may determine, proper allowance and
provision being made for any Obligations not then due. Upon the final payment
and satisfaction in full of all of the Obligations and after making any payments
required by Section 9-504(1)(c) of the Massachusetts UCC, any excess shall be
returned to the Company, and the Company shall remain liable for any deficiency
in the payment of the Obligations.

     18. OVERDUE AMOUNTS. Until paid, all amounts due and payable by the Company
hereunder shall be a debt secured by the Collateral and shall bear, whether
before or after judgment, interest at the rate of interest for overdue principal
set forth in the Credit Agreement.

     19. GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT IS INTENDED TO
TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. The Company
agrees that any suit for the enforcement of this Agreement may be brought in the
courts of the Commonwealth of Massachusetts or any federal court sitting therein
and consents to the non-exclusive

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jurisdiction of such court and to service of process in any such suit being made
upon the Company by mail at the address specified in ss.13 of the Credit
Agreement. The Company hereby waives any objection that it may now or hereafter
have to the venue of any such suit or any such court or that such suit is
brought in an inconvenient court.

     20. WAIVER OF JURY TRIAL. THE COMPANY WAIVES ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY
SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, the Company waives any
right which it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. The Company (i)
certifies that neither the Bank nor any representative, agent or attorney of the
Bank has represented, expressly or otherwise, that the Bank would not, in the
event of litigation, seek to enforce the foregoing waivers and (ii) acknowledges
that, in entering into the Credit Agreement and the other Loan Documents to
which the Bank is a party, the Bank is relying upon, among other things, the
waivers and certifications contained in this ss.20.

     21. CONCERNING REVISED ARTICLE 9 OF THE UNIFORM COMMERCIAL CODE. The
parties acknowledge and agree to the following provisions of this Agreement in
anticipation of the possible application, in one or more jurisdictions to the
transactions contemplated hereby, of the revised Article 9 of the Uniform
Commercial Code in the form or substantially in the form approved by the
American Law Institute and the National Conference of Commissioners on Uniform
State Law and contained in the 1999 official text of the Uniform Commercial Code
("Revised Article 9").

          21.1. ATTACHMENT. In applying the law of any jurisdiction in which
     Revised Article 9 is in effect, the Collateral is all assets of the
     Company, whether or not within the scope of Revised Article 9. The
     Collateral shall include, without limitation, the following categories of
     assets as defined in Revised Article 9: goods (including inventory,
     equipment and any accessions thereto), instruments (including promissory
     notes), documents, accounts (including health-care-insurance receivables),
     chattel paper (whether tangible or electronic), deposit accounts,
     letter-of-credit rights (whether or not the letter of credit is evidenced
     by a writing), commercial tort claims, securities and all other investment
     property, general intangibles (including payment intangibles and software),
     supporting obligations and any and all proceeds of any thereof,

<PAGE>   15
                                      -13-

     wherever located, whether now owned and hereafter acquired. If the Company
     shall at any time, whether or not Revised Article 9 is in effect in any
     particular jurisdiction, acquire a commercial tort claim, as defined in
     Revised Article 9, the Company shall immediately notify the Bank in a
     writing signed by the Company of the brief details thereof and grant to the
     Bank in such writing a security interest therein and in the proceeds
     thereof, all upon the terms of this Agreement, with such writing to be in
     form and substance satisfactory to the Bank.

          21.2. PERFECTION BY FILING. The Bank may at any time and from time to
     time, pursuant to the provisions of ss.13, file financing statements,
     continuation statements and amendments thereto that describe the Collateral
     as all assets of the Company or words of similar effect and which contain
     any other information required by Part 5 of Revised Article 9 for the
     sufficiency or filing office acceptance of any financing statement,
     continuation statement or amendment, including whether the Company is an
     organization, the type of organization and any organization identification
     number issued to the Company. The Company agrees to furnish any such
     information to the Bank promptly upon request. Any such financing
     statements, continuation statements or amendments may be signed by the Bank
     on behalf of the Company, as provided in ss.13, and may be filed at any
     time in any jurisdiction whether or not Revised Article 9 is then in effect
     in that jurisdiction.

          21.3. OTHER PERFECTION, ETC. The Company shall at any time and from
     time to time, whether or not Revised Article 9 is in effect in any
     particular jurisdiction, take such steps as the Bank may reasonably request
     for the Bank (a) to obtain an acknowledgement, in form and substance
     satisfactory to the Bank, of any bailee having possession of any of the
     Collateral that the bailee holds such Collateral for the Bank, (b) to
     obtain "control" of any investment property, deposit accounts,
     letter-of-credit rights or electronic chattel paper (as such terms are
     defined in Revised Article 9 with corresponding provisions in Rev. ss.ss.
     9-104, 9-105, 9-106 and 9-107 relating to what constitutes "control" for
     such items of Collateral), with any agreements establishing control to be
     in form and substance satisfactory to the Bank, and (c) otherwise to insure
     the continued perfection and priority of the Bank's security interest in
     any of the Collateral and of the preservation of its rights therein,
     whether in anticipation and following the effectiveness of Revised Article
     9 in any jurisdiction.

<PAGE>   16
                                      -14-

          21.4. OTHER PROVISIONS. In applying the law of any jurisdiction in
     which Revised Article 9 is in effect, the following references to sections
     in this Agreement to existing Article 9 of that jurisdiction shall be to
     the Revised Article 9 Section of that jurisdiction indicated below:

<TABLE>
<CAPTION>
------------------------ ----------------------------------- -----------------------------------
Agreement Section        Existing Article 9                  Revised Article 9
------------------------ ----------------------------------- -----------------------------------
<S>                      <C>                                 <C>
3                        ss. 9-109(3)                        Rev.ss.9-102(a)(34)
------------------------ ----------------------------------- -----------------------------------
9.2                      ss. 9-207                           Rev.ss.9-207
------------------------ ----------------------------------- -----------------------------------
12                       ss.ss.8-106 and 9-115 (1994)        Rev.ss.ss.8-106 and 9-106
------------------------ ----------------------------------- -----------------------------------
17                       ss. 9-504(1)(c)                     Rev.ss.ss.9-608(a)(1)(C) and
                                                             9-615(a)(3)
------------------------ ----------------------------------- -----------------------------------
</TABLE>

          21.5. SAVINGS CLAUSE. Nothing contained in this ss.21 shall be
     construed to narrow the scope of the Bank's security interest in any of the
     Collateral or the perfection or priority thereof or to impair or otherwise
     limit any of the rights, powers, privileges or remedies of the Bank
     hereunder except (and then only to the extent) mandated by Revised Article
     9 to the extent then applicable.

     22. MISCELLANEOUS. The headings of each section of this Agreement are for
convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon the
Company and its respective successors and assigns, and shall inure to the
benefit of the Bank and its successors and assigns. If any term of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity of
all other terms hereof shall in no way be affected thereby, and this Agreement
shall be construed and be enforceable as if such invalid, illegal or
unenforceable term had not been included herein. The Company acknowledges
receipt of a copy of this Agreement.

<PAGE>   17
                                      -15-

     IN WITNESS WHEREOF, intending to be legally bound, the Company has caused
this Agreement to be duly executed as a sealed instrument as of the date first
above written.

                                   EROOM TECHNOLOGY, INC.

                                   By: /s/ Robert L. Lentz
                                       -----------------------------------------
                                       Title: Senior Vice President and CFO

Accepted:

FLEET NATIONAL BANK

By: /s/ Stephen C. Buzzell
    --------------------------------------
    Title: Vice President

                          CERTIFICATE OF ACKNOWLEDGMENT

COMMONWEALTH OF MASSACHUSETTS        )
                               ) ss.  September 26, 2000
COUNTY OF Middlesex)

     Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this 26th day of September, 2000, personally appeared Robert L.
Lentz to me known personally, and who, being by me duly sworn, deposes and says
that he/she is the Senior Vice President and CFO of eRoom Technology, and that
said instrument was signed and sealed on behalf of said corporation by authority
of its directors, and said Robert L. Lentz acknowledged said instrument to be
the free act and deed of said corporation.

                                      /s/ Kimberly R. Hurkins
                                      -----------------------------------------
                                      Kimberly R. Hurkins
                                      Notary Public
                                      My commission expires: March 2, 2001Exhibit 10.1

                         APPLIED DIGITAL SOLUTIONS, INC.

                            1999 FLEXIBLE STOCK PLAN
                     (As Amended Through September 1, 2000)

<PAGE>

                         APPLIED DIGITAL SOLUTIONS, INC.

                            1999 FLEXIBLE STOCK PLAN
                     (As Amended Through September 1, 2000)

                                TABLE OF CONTENTS

                                                                            Page

1. NAME AND PURPOSE                                                            1
         1.1. Name.............................................................1
         1.2. Purpose..........................................................1

2. DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION                              1
         2.1. General Definitions..............................................1
                  2.1.1. Affiliate.............................................1
                  2.1.2. Agreement.............................................1
                  2.1.3. Benefit...............................................1
                  2.1.4. Board.................................................1
                  2.1.5. Cash Award............................................2
                  2.1.6. Change of Control.....................................2
                  2.1.7. Code..................................................3
                  2.1.8. Company...............................................3
                  2.1.9. Committee.............................................3
                  2.1.10. Common Stock.........................................3
                  2.1.11. Effective Date.......................................4
                  2.1.12. Employee.............................................4
                  2.1.13. Employer.............................................4
                  2.1.14. Exchange Act.........................................4
                  2.1.15. Fair Market Value....................................4
                  2.1.16. Fiscal Year..........................................4
                  2.1.17. ISO..................................................4
                  2.1.18. NQSO.................................................4
                  2.1.19. Option...............................................4
                  2.1.20. Other Stock Based Award..............................4
                  2.1.21. Parent...............................................4
                  2.1.22. Participant..........................................5
                  2.1.23. Performance Based Compensation.......................5
                  2.1.24. Performance Share....................................5
                  2.1.25. Plan.................................................5
                  2.1.26. Reload Option........................................5
                  2.1.27. Restricted Stock.....................................5
                  2.1.28. Rule 16b-3...........................................5
                  2.1.29. SEC..................................................5
                  2.1.30. Share................................................5
                  2.1.31. SAR..................................................6
                  2.1.32. Subsidiary...........................................6
         2.2. Other Definitions................................................6
         2.3. Conflicts........................................................6

3. COMMON STOCK                                                                6
         3.1. Number of Shares.................................................6

                                       i
<PAGE>

         3.2. Reusage..........................................................6
         3.3. Adjustments......................................................7

4. ELIGIBILITY                                                                 7
         4.1. Determined By Committee..........................................7

5. ADMINISTRATION                                                              7
         5.1. Committee........................................................7
         5.2. Authority........................................................7
         5.3. Delegation.......................................................8
         5.4. Determination....................................................8

6. AMENDMENT                                                                   8
         6.1. Power of Board...................................................8
         6.2. Limitation.......................................................8

7. TERM AND TERMINATION                                                        9
         7.1. Term.............................................................9
         7.2. Termination......................................................9

8. MODIFICATION OR TERMINATION OF BENEFITS                                     9
         8.1. General..........................................................9
         8.2. Committee's Right................................................9

9. CHANGE OF CONTROL                                                           9
         9.1. Vesting and Payment..............................................9
         9.2. Other Action....................................................10

10. AGREEMENTS AND CERTAIN BENEFITS                                           10
         10.1. Grant Evidenced by Agreement...................................10
         10.2. Provisions of Agreement........................................10
         10.3. Transferability................................................11

11. REPLACEMENT AND TANDEM AWARDS                                             11
         11.1. Replacement....................................................11
         11.2. Tandem Awards..................................................11

12. PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING                              11
         12.1. Payment........................................................11
         12.2. Dividend Equivalents...........................................11
         12.3. Deferral.......................................................12
         12.4. Withholding....................................................12

13. OPTIONS                                                                   12
         13.1. Types of Options...............................................12
         13.2. Grant of ISOs and Option Price.................................12
         13.3. Other Requirements for ISOs....................................12
         13.4. NQSOs..........................................................12
         13.5. Determination by Committee.....................................12

14. SARS                                                                      13
         14.1. Grant and Payment..............................................13
         14.2. Grant of Tandem Award..........................................13
         14.3. ISO Tandem Award...............................................13
         14.4. Payment of Award...............................................13

                                       ii
<PAGE>

15. ANNUAL LIMITATIONS                                                        13
         15.1. Limitation on Options and SARs.................................13
         15.2. Computations...................................................13

16. RESTRICTED STOCK AND PERFORMANCE SHARES                                   13
         16.1. Restricted Stock...............................................13
         16.2. Cost of Restricted Stock.......................................14
         16.3. Non-Transferability............................................14
         16.4. Performance Shares.............................................14
         16.5. Grant..........................................................14

17. CASH AWARDS                                                               14
         17.1. Grant..........................................................14
         17.2. Rule 16b-3.....................................................14
         17.3. Restrictions...................................................14

18. OTHER STOCK BASED AWARDS AND OTHER BENEFITS                               15
         18.1. Other Stock Based Awards.......................................15
         18.2. Other Benefits.................................................15

19. MISCELLANEOUS PROVISIONS                                                  15
         19.1. Underscored References.........................................15
         19.2. Number and Gender..............................................15
         19.3. Unfunded Status of Plan........................................15
         19.4. Termination of Employment......................................15
         19.5. Designation of Beneficiary.....................................15
         19.6. Governing Law..................................................16
         19.7. Purchase for Investment........................................16
         19.8. No Employment Contract.........................................16
         19.9. No Effect on Other Benefits....................................16

                                      iii
<PAGE>

                      APPLIED DIGITAL SOLUTIONS, INC.

                            1999 FLEXIBLE STOCK PLAN
                     (As Amended Through September 1, 2000)

1.      NAME AND PURPOSE

         1.1.   Name.

                The name of this Plan is the "Applied  Digital  Solutions,  Inc.
1999 Flexible Stock Plan."

         1.2.   Purpose.

                The  Company  has  established  this  Plan to  attract,  retain,
motivate and reward Employees and other individuals,  to encourage  ownership of
the Company's  Common Stock by Employees and other  individuals,  and to promote
and further the best interests of the Company by granting cash and other awards.
This Plan is intended to be "Broadly  Based" (as such term is used for  purposes
of rules promulgated by The National Association of Securities Dealers).

2.      DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION

        2.1.    General Definitions.

                The following words and phrases,  when used in the Plan,  unless
otherwise specifically defined or unless the context clearly otherwise requires,
shall have the following respective meanings:

                2.1.1.  Affiliate.

                        A Parent or Subsidiary of the Company.

                 2.1.2. Agreement.

                        The  document  which  evidences the grant of any Benefit
         under  the Plan  and  which  sets  forth  the  Benefit  and the  terms,
         conditions  and  provisions  of, and  restrictions  relating  to,  such
         Benefit.

                2.1.3.  Benefit.

                        Any benefit granted to a Participant under the Plan.

                2.1.4.  Board.

                        The Board of Directors of the Company.

                                       1

<PAGE>

                2.1.5.  Cash Award.

                        A Benefit payable in the form of cash.

                2.1.6.  Change of Control.

                        The occurrence of any of the following:

                (a)     An  acquisition of  any  Common  Stock or  other  voting
        securities of the Company entitled to vote generally for the election of
        directors (the "Voting  Securities") by any "Person" or "Group" (as each
        such term is used for purposes of Section 13(d) or 14(d) of the Exchange
        Act),  immediately after which such Person or Group, as the case may be,
        has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated
        under the Exchange Act) of more than 20% of the then outstanding  shares
        of Common  Stock or the  combined  voting  power of the  Company's  then
        outstanding Voting Securities;  provided,  however,  that in determining
        whether a Change of  Control  has  occurred,  shares of Common  Stock or
        Voting  Securities  that are acquired in a Non-Control  Acquisition  (as
        defined below) shall not  constitute an acquisition  which would cause a
        Change of Control. A "Non-Control Acquisition" shall mean an acquisition
        by (i) the Company,  (ii) any  Subsidiary  or (ii) any employee  benefit
        plan  maintained  by the  Company or any  Subsidiary,  including a trust
        forming part of any such plan (an "Employee Benefit Plan");

                (b)     When, during any 2-year  period, individuals who, at the
        beginning of the 2-year  period,  constitute  the Board (the  "Incumbent
        Board"),  cease for any reason to constitute at least 50% of the members
        of the Board; provided,  however, that (i) if the election or nomination
        for  election by the  Company's  shareholders  of any new  director  was
        approved by a vote of at least two-thirds of the Incumbent  Board,  such
        new director shall, for purposes hereof, be deemed to be a member of the
        Incumbent  Board;  and (ii) no individual shall be deemed to be a member
        of the Incumbent Board if such individual  initially assumed office as a
        result  of  either  an  actual  or  threatened  "Election  Contest"  (as
        described in Rule 14a-11  promulgated  under the Exchange  Act) or other
        actual or threatened solicitation of proxies or consents by or on behalf
        of a Person or Group other than the Board (a "Proxy Contest")  including
        by reason of any  agreement  intended  to avoid or settle  any  Election
        Contest or Proxy Contest;

                (c)     The consummation of:

                        (i) a merger,  consolidation or reorganization involving
                the Company or any Subsidiary,  unless the merger, consolidation
                or reorganization is a Non-Control  Transaction.  A "Non-Control
                Transaction"    shall   mean   a   merger,    consolidation   or
                reorganization of the Company or any Subsidiary where:

                            (A)  the  shareholders  of the  Company  immediately
                        prior to the  merger,  consolidation  or  reorganization
                        own, directly or indirectly,  immediately following such
                        merger, consolidation or reorganization, at least 50% of
                        the  combined  voting  power of the  outstanding  voting
                        securities  of  the  corporation   resulting  from  such
                        merger,  consolidation or reorganization (the "Surviving
                        Corporation")  in  substantially  the same proportion as
                        their   ownership   of  the   Common   Stock  or  Voting
                        Securities, as the case may be, immediately prior to the
                        merger, consolidation or reorganization,

                                       2
<PAGE>

                            (B)  the   individuals   who  were  members  of  the
                        Incumbent  Board  immediately  prior to the execution of
                        the agreement providing for the merger, consolidation or
                        reorganization  constitute  at least  two-thirds  of the
                        members  of the  board  of  directors  of the  Surviving
                        Corporation,   or  a  corporation  beneficially  owning,
                        directly  or  indirectly,   a  majority  of  the  voting
                        securities of the Surviving Corporation, and

                            (C)  no Person or Group, other than (1) the Company,
                        (2) any Subsidiary, (3) any Employee Benefit Plan or (4)
                        any other Person or Group who,  immediately prior to the
                        merger, consolidation or reorganization,  had Beneficial
                        Ownership  of not less than 20% of the then  outstanding
                        Voting   Securities  or  Common  Stock,  has  Beneficial
                        Ownership of 20% or more of the combined voting power of
                        the  Surviving  Corporation's  then  outstanding  voting
                        securities or common stock;

                        (d)  A  complete   liquidation  or  dissolution  of  the
                Company; or

                        (e)  The   sale   or   other   disposition   of  all  or
                substantially  all of the  assets of the  Company  to any Person
                (other than a transfer to a Subsidiary).

                Notwithstanding the foregoing,  a Change of Control shall not be
deemed  to have  occurred  solely  because  any  Person or Group  (the  "Subject
Person") acquired Beneficial  Ownership of more than the permitted amount of the
then outstanding Voting Securities or Common Stock of the Company as a result of
an  acquisition of Voting  Securities or Common Stock by the Company  which,  by
reducing  the  number  of  shares of Voting  Securities  or  Common  Stock  then
outstanding,  increases the proportional  number of shares beneficially owned by
the Subject Person;  provided,  however,  that if a Change of Control would have
occurred (but for the operation of this sentence) as a result of the acquisition
of Voting Securities or Common Stock by the Company,  and after such acquisition
by  the  Company,  the  Subject  Person  becomes  the  beneficial  owner  of any
additional  shares of Voting  Securities  or Common Stock,  which  increases the
percentage of the then outstanding  shares of Voting  Securities or Common Stock
beneficially  owned by the  Subject  Person,  then a Change of Control  shall be
deemed to have occurred.

                2.1.7.  Code.

                        The  Internal  Revenue Code  of  1986,  as amended.  Any
         reference to the Code includes the regulations  promulgated pursuant to
         the Code.

                2.1.8.  Company.

                        Applied Digital Solutions, Inc.

                2.1.9.  Committee.

                        The Committee described in Section 5.1.

                2.1.10. Common Stock.

                        The  Company's  common stock which  presently  has a par
         value of $.001 per Share.

                                       3
<PAGE>

                2.1.11. Effective Date.

                        The date that the Plan is approved  by the  shareholders
         of the  Company  which  must  occur  within  one year  before  or after
         approval by the Board.  Any grants of Benefits prior to the approval by
         the  shareholders  of the Company shall be void if such approval is not
         obtained.

                2.1.12. Employee.

                        Any person employed by the Employer.

                2.1.13. Employer.

                        The Company and all Affiliates.

                2.1.14. Exchange Act.

                        The Securities Exchange Act of 1934, as amended.

                2.1.15. Fair Market Value.

                        The  closing  price of  Shares  on the  Nasdaq  National
         Market on a given  date,  or, in the  absence of sales on a given date,
         the  closing  price on the  Nasdaq  National  Market on the last day on
         which a sale occurred prior to such date.

                2.1.16. Fiscal Year.

                        The taxable  year of the Company  which is the  calendar
         year.

                2.1.17. ISO.

                        An  Incentive  Stock Option as defined in Section 422 of
         the Code.

                2.1.18. NQSO.

                        A  non-qualified  stock Option,  which is an Option that
         does not qualify as an ISO.

                2.1.19. Option.

                        An option to purchase Shares granted under the Plan.

                2.1.20. Other Stock Based Award.

                        An award under  Section 18 that is valued in whole or in
         part by reference to, or otherwise based on, Common Stock.

                2.1.21. Parent.

                        Any corporation (other than the Company or a Subsidiary)
         in an unbroken chain of  corporations  ending with the Company,  if, at
         the  time of the  grant of an  Option  or  other  Benefit,  each of the

                                       4
<PAGE>
         corporations (other than the Company) 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.

                2.1.22. Participant.

                        An  individual  who is granted a Benefit under the Plan.
         Benefits  may be  granted  only to  Employees,  members  of the  Board,
         employees  and owners of entities  which are not  Affiliates  but which
         have a direct or indirect ownership interest in an Employer or in which
         an Employer has a direct or indirect  ownership  interest,  individuals
         who, and  employees  and owners of entities  which,  are  customers and
         suppliers of an Employer,  individuals who, and employees and owners of
         entities which,  render services to an Employer,  and individuals  who,
         and employees and owners of entities,  which have ownership or business
         affiliations with any individual or entity previously described.

                2.1.23. Performance Based Compensation.

                        Compensation  which  meets the  requirements  of Section
         162(m)(4)(C) of the Code.

                2.1.24. Performance Share.

                        A Share awarded to a Participant under Section 16 of the
         Plan.

                2.1.25. Plan.

                        The Applied Digital Solutions,  Inc. 1999 Flexible Stock
         Plan and all amendments and supplements to it.

                2.1.26. Reload Option.

                        An Option to  purchase  the  number of Shares  used by a
         Participant  to  exercise  an Option  and to  satisfy  any  withholding
         requirement incident to the exercise of such Option.

                2.1.27. Restricted Stock.

                        Shares issued under Section 15 of the Plan.

                2.1.28. Rule 16b-3.

                        Rule 16b-3  promulgated  by the SEC, as amended,  or any
         successor rule in effect from time to time.

                2.1.29. SEC.

                        The Securities and Exchange Commission.

                2.1.30. Share.

                        A share of Common Stock.

                                       5
<PAGE>

                2.1.31. SAR.

                        A  stock  appreciation  right,  which  is the  right  to
         receive an amount equal to the appreciation, if any, in the Fair Market
         Value of a Share from the date of the grant of the right to the date of
         its payment.

                2.1.32. Subsidiary.

                        Any corporation,  other than the Company, in an unbroken
         chain of  corporations  beginning  with the  Company if, at the time of
         grant of an Option or other Benefit,  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.

        2.2.    Other Definitions.

                In addition to the above definitions,  certain words and phrases
used in the Plan and any Agreement may be defined in other  portions of the Plan
or in such Agreement.

        2.3.    Conflicts.

                In the case of any conflict in the terms of the Plan relating to
a Benefit,  the provisions in the section of the Plan which specifically  grants
such Benefit  shall  control  those in a different  section.  In the case of any
conflict between the terms of the Plan relating to a Benefit and the terms of an
Agreement relating to a Benefit, the terms of the Plan shall control.

3.      COMMON STOCK

        3.1.    Number of Shares.

                The  number of  Shares  which may be issued or sold or for which
Options,  SARs or  Performance  Shares  may be  granted  under the Plan shall be
17,000,000  Shares,  plus an annual  increase,  effective as of the first day of
each  calendar  year,  commencing  with  2001,  equal  to 10% of the  number  of
outstanding  Shares as of the first day of such calendar  year,  but in no event
more than 30,000,000 Shares in the aggregate.  Such Shares may be authorized but
unissued Shares, Shares held in the treasury, or both. The full number of Shares
available  may be used  for any  type of  Option  or  other  Benefit;  provided,
however,  that the  number of Shares  that may be issued  under  ISOs  shall not
exceed 15,000,000.

        3.2.    Reusage.

                If an Option or SAR expires or is  terminated,  surrendered,  or
canceled  without  having  been  fully  exercised,   if  Restricted   Shares  or
Performance  Shares are  forfeited,  or if any other grant results in any Shares
not being issued,  the Shares covered by such Option or SAR, grant of Restricted
Shares,  Performance  Shares or other grant,  as the case may be, shall again be
available  for use under the Plan.  Any Shares which are used as full or partial
payment to the Company upon  exercise of an Option or for any other Benefit that
requires a payment to the Company shall be available for purposes of the Plan.

                                       6
<PAGE>

        3.3.    Adjustments.

                If there is any  change in the  Common  Stock of the  Company by
reason of any stock dividend, spin-off,  split-up,  spin-out,  recapitalization,
merger,  consolidation,  reorganization,  combination or exchange of shares,  or
otherwise,  the  number of SARs and  number  and class of shares  available  for
Options and grants of Restricted Stock, Performance Shares and Other Stock Based
Awards and the number of Shares subject to outstanding Options,  SARs, grants of
Restricted  Stock which are not vested,  grants of Performance  Shares which are
not vested, and Other Stock Based Awards, and the price thereof,  as applicable,
shall be appropriately adjusted by the Committee.

4.      ELIGIBILITY

        4.1.    Determined By Committee.

                The  Participants  and the Benefits  they receive under the Plan
shall be determined solely by the Committee.  In making its determinations,  the
Committee  shall consider past,  present and expected  future  contributions  of
Participants  and potential  Participants  to the Employer,  including,  without
limitation,  the  performance  of, or the refraining  from the  performance  of,
services.  Unless specifically  provided otherwise herein, all determinations of
the Committee in connection  with the Plan or an Agreement  shall be made in its
sole discretion.

5.      ADMINISTRATION

        5.1.    Committee.

                The Plan shall be administered  by the Committee.  The Committee
shall consist of the Board, unless the Board appoints a Committee of two or more
but less than all of the Board.  If the  Committee  does not  include the entire
Board, it shall serve at the pleasure of the Board,  which may from time to time
appoint  members in  substitution  for  members  previously  appointed  and fill
vacancies, however caused, in the Committee. The Committee may select one of its
members as its  Chairman and shall hold its meetings at such times and places as
it may  determine.  A majority of its members  shall  constitute  a quorum.  All
determinations  of the Committee  made at a meeting at which a quorum is present
shall be made by a majority of its members present at the meeting.  Any decision
or  determination  reduced to writing  and signed by a majority  of the  members
shall be fully as  effective  as if it had  been  made by a  majority  vote at a
meeting duly called and held.

        5.2.    Authority.

                Subject  to the  terms of the Plan,  the  Committee  shall  have
discretionary authority to:

                (a) determine the individuals to whom Benefits are granted,  the
        type and amounts of Benefits to be granted and the date of issuance  and
        duration of all such grants;

                (b) determine  the  terms,  conditions  and  provisions  of, and
        restrictions relating to, each Benefit granted;

                (c) interpret and construe the Plan and all Agreements;

                                       7
<PAGE>

                (d) prescribe,  amend and rescind rules and regulations relating
        to the Plan;

                (e) determine the content and form of all Agreements;

                (f) determine all questions relating to Benefits under the Plan;

                (g) maintain accounts, records and ledgers relating to Benefits;

                (h) maintain records concerning its decisions and proceedings;

                (i) employ agents,  attorneys,  accountants or other persons for
        such purposes as the Committee considers necessary or desirable;

                (j) take,  at any time,  any action  described in Section 9.1 or
        permitted  by Section  9.2(a),  irrespective  of  whether  any Change of
        Control has occurred or is imminent;

                (k) determine,  except to the extent  otherwise  provided in the
        Plan,  whether and the extent to which  Benefits  under the Plan will be
        structured    to   conform   to   the    requirements    applicable   to
        Performance-Based  Compensation, and to take such action, establish such
        procedures,  and impose such  restrictions at the time such Benefits are
        granted as the Committee  determines to be necessary or  appropriate  to
        conform to such requirements; and

                (l) do and  perform  all acts  which it may  deem  necessary  or
        appropriate  for  the  administration  of the  Plan  and  carry  out the
        purposes of the Plan.

        5.3.    Delegation.

                Except as  required  by Rule  16b-3  with  respect  to grants of
Options,  Stock  Appreciation  Awards,  Performance  Shares,  Other  Stock Based
Awards,  or other Benefits to  individuals  who are subject to Section 16 of the
Exchange Act or as otherwise  required for  compliance  with Rule 16b-3 or other
applicable  law, the  Committee  may  delegate all or any part of its  authority
under the Plan to any Employee, Employees or committee.

        5.4.    Determination.

                All determinations of the Committee shall be final.

6.      AMENDMENT

        6.1.    Power of Board.

                Except as  hereinafter  provided,  the Board shall have the sole
right and power to amend the Plan at any time and from time to time.

        6.2.    Limitation.

                The  Board  may not amend  the  Plan,  without  approval  of the
shareholders of the Company:

                                       8
<PAGE>

                (a) in a manner which would cause  Options which are intended to
        qualify as ISOs to fail to qualify;

                (b) in a manner  which  would cause the Plan to fail to meet the
        requirements of Rule 16b-3; or

                (c) in a manner which would violate applicable law.

7.      TERM AND TERMINATION

        7.1.    Term.

                The Plan shall commence as of the Effective Date and, subject to
the terms of the Plan, including those requiring approval by the shareholders of
the Company and those  limiting the period over which ISOs or any other Benefits
may be granted, shall continue in full force and effect until terminated.

        7.2.    Termination.

                The Plan may be terminated at any time by the Board.

8.      MODIFICATION OR TERMINATION OF BENEFITS

        8.1.    General.

                Subject to the  provisions  of Section  8.2,  the  amendment  or
termination of the Plan shall not adversely affect a Participant's  right to any
Benefit granted prior to such amendment or termination.

        8.2.    Committee's Right.

                Any Benefit  granted may be  converted,  modified,  forfeited or
canceled,  in whole or in part, by the Committee if and to the extent  permitted
in the Plan or applicable  Agreement or with the consent of the  Participant  to
whom such Benefit was granted.  Except as may be provided in an  Agreement,  the
Committee  may,  in  its  sole  discretion,  in  whole  or in  part,  waive  any
restrictions  or conditions  applicable  to, or  accelerate  the vesting of, any
Benefit.

9.      CHANGE OF CONTROL

        9.1.    Vesting and Payment.

                In the event of a Change of Control:

                (a) all  outstanding  Options  shall become  fully  exercisable,
        except to the extent that the right to exercise the Option is subject to
        restrictions  established  in  connection  with an SAR that is issued in
        tandem with the Option;

                                       9
<PAGE>

                (b) all  outstanding  SARs  shall  become  immediately  payable,
        except to the extent  that the right to  exercise  the SAR is subject to
        restrictions  established in connection with an Option that is issued in
        tandem with the SAR;

                (c) all Shares of Restricted Stock shall become fully vested;

                (d) all  Performance  Shares  shall be deemed to be fully earned
        and shall be paid out in such manner as determined by the Committee; and

                (e) all Cash Awards, Other Stock Based Awards and other Benefits
        shall become fully vested  and/or  earned and paid out in such manner as
        determined by the Committee.

        9.2.    Other Action.

                In the event of a Change of Control, the Committee,  in its sole
discretion,  may, in addition to the  provisions of Section 9.1 above and to the
extent not inconsistent therewith:

                (a)  provide  for the  purchase  of any Benefit for an amount of
        cash  equal to the  amount  which  could  have  been  attained  upon the
        exercise or realization of such Benefit;

                (b) make such adjustment to the Benefits then outstanding as the
        Committee  deems  appropriate  to reflect  such  transaction  or change;
        and/or

                (c) cause the Benefits then  outstanding  to be assumed,  or new
        Benefits  substituted  therefor,  by the surviving  corporation  in such
        change.

10.     AGREEMENTS AND CERTAIN BENEFITS

        10.1.   Grant Evidenced by Agreement.

                The grant of any Benefit  under the Plan may be  evidenced by an
Agreement  which shall describe the specific  Benefit  granted and the terms and
conditions of the Benefit.  The granting of any Benefit shall be subject to, and
conditioned  upon, the  recipient's  execution of any Agreement  required by the
Committee.  Except as otherwise provided in an Agreement,  all capitalized terms
used in the  Agreement  shall  have the same  meaning  as in the  Plan,  and the
Agreement shall be subject to all of the terms of the Plan.

        10.2.   Provisions of Agreement.

                Each Agreement  shall contain such provisions that the Committee
shall  determine to be  necessary,  desirable  and  appropriate  for the Benefit
granted which may include, but not necessarily be limited to, the following with
respect  to any  Benefit:  description  of the type of  Benefit;  the  Benefit's
duration;  its  transferability;  if an Option, the exercise price, the exercise
period and the person or persons who may  exercise  the Option;  the effect upon
such  Benefit  of the  Participant's  death,  disability,  changes  of duties or
termination  of  employment;  the Benefit's  conditions;  when,  if, and how any
Benefit may be forfeited,  converted into another Benefit,  modified,  exchanged
for another Benefit,  or replaced;  and the restrictions on any Shares purchased
or granted under the Plan.

                                       10
<PAGE>

        10.3.   Transferability.

                Unless  otherwise  specified in an Agreement or permitted by the
Committee,  each Benefit granted shall be not transferable other than by will or
the  laws of  descent  and  distribution  and  shall  be  exercisable  during  a
Participant's lifetime only by him.

11.     REPLACEMENT AND TANDEM AWARDS

        11.1.   Replacement.

                The Committee  may permit a Participant  to elect to surrender a
Benefit in exchange for a new Benefit.

        11.2.   Tandem Awards.

                Awards may be granted by the  Committee in tandem.  However,  no
Benefit may be granted in tandem with an ISO except SARs.

12.     PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING

        12.1.   Payment.

                Upon the  exercise  of an  Option  or in the  case of any  other
Benefit that requires a payment by a Participant to the Company,  the amount due
the Company is to be paid:

                (a)  in  cash,  including  by  means  of a  so-called  "cashless
        exercise" of an Option;

                (b) by the surrender of all or part of a Benefit  (including the
        Benefit being exercised);

                (c) by the tender to the Company of Shares owned by the optionee
        and  registered  in his name  having a Fair  Market  Value  equal to the
        amount due to the Company;

                (d) in other property,  rights and credits deemed  acceptable by
        the Committee, including the Participant's promissory note;

                (e) by any combination of the payment methods  specified in (a),
        (b), (c) and (d) above.

                Notwithstanding, the foregoing, any method of payment other than
(a) may be used only with the consent of the  Committee  or if and to the extent
so  provided  in an  Agreement.  The  proceeds  of the sale of Shares  purchased
pursuant to an Option and any payment to the Company for other Benefits shall be
added to the general funds of the Company or to the Shares held in treasury,  as
the case may be, and used for the corporate purposes of the Company as the Board
shall determine.

        12.2.   Dividend Equivalents.

                Grants of  Benefits in Shares or Share  equivalents  may include
dividend equivalent payments or dividend credit rights.

                                       11
<PAGE>

        12.3.   Deferral.

                The right to  receive  any  Benefit  under the Plan may,  at the
request of the  Participant,  be deferred for such period and upon such terms as
the  Committee  shall  determine,  which may  include  crediting  of interest on
deferrals of cash and crediting of dividends on deferrals denominated in Shares.

        12.4.   Withholding.

                The Company may, at the time any  distribution is made under the
Plan,  whether  in cash or in Shares,  or at the time any  Option is  exercised,
withhold  from such  distribution  or Shares  issuable  upon the  exercise of an
Option,  any amount necessary to satisfy federal,  state and local income and/or
other tax withholding requirements with respect to such distribution or exercise
of such  Options.  The  Committee  or the Company may require a  participant  to
tender to the Company cash and/or Shares in the amount  necessary to comply with
any such withholding requirements.

13.     OPTIONS

        13.1.   Types of Options.

                It is  intended  that both ISOs and  NQSOs,  which may be Reload
Options, may be granted by the Committee under the Plan.

        13.2.   Grant of ISOs and Option Price.

                Each ISO must be granted to an Employee  and granted  within ten
years from the  earlier of the date of  adoption  by the Board or the  Effective
Date. The purchase price for Shares under any ISO shall be no less than the Fair
Market Value of the Shares at the time the Option is granted.

        13.3.   Other Requirements for ISOs.

                The terms of each Option  which is intended to qualify as an ISO
shall meet all requirements of Section 422 of the Code.

        13.4.   NQSOs.

                The terms of each NQSO shall  provide  that such Option will not
be treated as an ISO. The  purchase  price for Shares under any NQSO shall be no
less than 85% of the Fair  Market  Value of the Shares at the time the Option is
granted.

        13.5.   Determination by Committee.

                Except as otherwise  provided in Section  13.2  through  Section
13.4, the terms of all Options shall be determined by the Committee.

                                       12
<PAGE>

14.     SARS

        14.1.   Grant and Payment.

                The Committee may grant SARs.  Upon electing to receive  payment
of a SAR, a  Participant  shall receive  payment in cash,  in Shares,  or in any
combination of cash and Shares, as the Committee shall determine.

        14.2.   Grant of Tandem Award.

                The Committee may grant SARs in tandem with an Option,  in which
case:  the  exercise of the Option shall cause a  correlative  reduction in SARs
standing to a Participant's credit which were granted in tandem with the Option;
and the payment of SARs shall cause a correlative  reduction of the Shares under
such Option.

        14.3.   ISO Tandem Award.

                When SARs are granted in tandem with an ISO, the SARs shall have
such terms and conditions as shall be required for the ISO to qualify as an ISO.

        14.4.   Payment of Award.

                SARs  shall  be paid by the  Company  to a  Participant,  to the
extent payment is elected by the Participant (and is otherwise due and payable),
as soon as practicable after the date on which such election is made.

15.     ANNUAL LIMITATIONS

        15.1.   Limitation on Options and SARs.

                The number of (a) Shares  covered by Options  where the purchase
price is no less than the Fair  Market  Value of the Shares on the date of grant
plus (b) SARs which may be granted to any  Participant  in any Fiscal Year shall
not exceed 5,000,000.

        15.2.   Computations.

                For purposes of Section 15.1:  Shares  covered by an Option that
is canceled shall count against the maximum, and, if the exercise price under an
Option is reduced,  the  transaction  shall be treated as a cancellation  of the
Option and a grant of a new Option;  and SARs covered by a grant of SARs that is
canceled  shall count  against the  maximum,  and, if the Fair Market Value of a
Share on which  the  appreciation  under a grant of SARs will be  calculated  is
reduced,  the transaction  will be treated as a cancellation of the SARs and the
grant of a new grant of SARs.

16.     RESTRICTED STOCK AND PERFORMANCE SHARES

        16.1.   Restricted Stock.

                The  Committee  may grant  Benefits  in Shares  available  under
Section 3 of the Plan as Restricted  Stock.  Shares of Restricted Stock shall be
issued and delivered at the time of the grant or as otherwise  determined by the

                                       13
<PAGE>

Committee,  but shall be subject to forfeiture  until provided  otherwise in the
applicable  Agreement  or the  Plan.  Each  certificate  representing  Shares of
Restricted  Stock  shall  bear a  legend  referring  to the Plan and the risk of
forfeiture of the Shares and stating that such Shares are nontransferable  until
all  restrictions  have been  satisfied and the legend has been removed.  At the
discretion  of the  Committee,  the  grantee  may or may not be entitled to full
voting and dividend  rights with respect to all shares of Restricted  Stock from
the date of grant.

        16.2.   Cost of Restricted Stock.

                Unless otherwise  determined by the Committee,  grants of Shares
of Restricted  Stock shall be made at a per Share cost to the Participant  equal
to par value.

        16.3.   Non-Transferability.

                Shares of Restricted Stock shall not be transferable until after
the removal of the legend with respect to such Shares.

        16.4.   Performance Shares.

                Performance  Shares  are the  right of an  individual  to whom a
grant of such Shares is made to receive  Shares or cash equal to the Fair Market
Value  of such  Shares  at a  future  date in  accordance  with  the  terms  and
conditions of such grant.  The terms and  conditions  shall be determined by the
Committee,  in its sole  discretion,  but  generally  are  expected  to be based
substantially   upon  the  attainment  of  targeted  profit  and/or  performance
objectives.

        16.5.   Grant.

                The  Committee  may grant an award of  Performance  Shares.  The
number of Performance  Shares and the terms and conditions of the grant shall be
set forth in the applicable Agreement.

17.     CASH AWARDS

        17.1.   Grant.

                The  Committee  may grant Cash Awards at such times and (subject
to Section 17.2) in such amounts as it deems appropriate.

        17.2.   Rule 16b-3.

                The  amount  of  any  Cash  Award  in  any  Fiscal  Year  to any
Participant  who is subject to Section 16 of the  Exchange  Act shall not exceed
the  greater of $100,000 or 100% of his cash  compensation  (excluding  any Cash
Award under this Section 17) for such Fiscal Year.

        17.3.   Restrictions.

                Cash Awards may be subject or not subject to conditions (such as
an investment  requirement),  restricted or nonrestricted,  vested or subject to
forfeiture and may be payable currently or in the future or both.

                                       14
<PAGE>

18.     OTHER STOCK BASED AWARDS AND OTHER BENEFITS

        18.1.   Other Stock Based Awards.

                The  Committee  shall have the right to grant  Other Stock Based
Awards  which may  include,  without  limitation,  the grant of Shares  based on
certain  conditions,  the payment of cash based on the performance of the Common
Stock, and the grant of securities convertible into Shares.

        18.2.   Other Benefits.

                The Committee  shall have the right to provide types of Benefits
under  the Plan in  addition  to those  specifically  listed,  if the  Committee
believes  that such  Benefits  would further the purposes for which the Plan was
established.

19.     MISCELLANEOUS PROVISIONS

        19.1.   Underscored References.

                The  underscored  references  contained in the Plan are included
only for  convenience,  and they shall not be construed as a part of the Plan or
in any respect affecting or modifying its provisions.

        19.2.   Number and Gender.

                The masculine and neuter, wherever used in the Plan, shall refer
to either the masculine,  neuter or feminine;  and, unless the context otherwise
requires, the singular shall include the plural and the plural the singular.

        19.3.   Unfunded Status of Plan.

                The  Plan is  intended  to  constitute  an  "unfunded"  plan for
incentive and deferred compensation.  With respect to any payments or deliveries
of Shares not yet made to a Participant by the Company, nothing contained herein
shall give any rights that are greater  than those of a general  creditor of the
Company.   The   Committee  may  authorize  the  creation  of  trusts  or  other
arrangements to meet the obligations created under the Plan to deliver Shares or
payments hereunder consistent with the foregoing.

        19.4.   Termination of Employment.

                If the employment of a Participant by the Company terminates for
any reason,  except as  otherwise  provided in an  Agreement,  all  unexercised,
deferred, and unpaid Benefits may be exercisable or paid only in accordance with
rules  established by the Committee.  These rules may provide,  as the Committee
may  deem  appropriate,  for  the  expiration,   forfeiture,   continuation,  or
acceleration of the vesting of all or part of the Benefits.

        19.5.   Designation of Beneficiary.

                A Participant may file with the Committee a written  designation
of a beneficiary or beneficiaries (subject to such limitations as to the classes
and number of  beneficiaries  and contingent  beneficiaries as the Committee may
from  time to time  prescribe)  to  exercise,  in the  event of the death of the

                                       15
<PAGE>

Participant,  an  Option,  or to  receive,  in such  event,  any  Benefits.  The
Committee reserves the right to review and approve beneficiary  designations.  A
Participant  may from  time to time  revoke or change  any such  designation  of
beneficiary  and  any  designation  of  beneficiary  under  the  Plan  shall  be
controlling  over any other  disposition,  testamentary or otherwise;  provided,
however,  that if the  Committee  shall be in doubt as to the  right of any such
beneficiary to exercise any Option or to receive any Benefit,  the Committee may
determine  to  recognize  only an  exercise by the legal  representative  of the
recipient,  in which case the Company,  the  Committee  and the members  thereof
shall not be under any further liability to anyone.

        19.6.   Governing Law.

                This Plan shall be construed and administered in accordance with
the laws of the State of Missouri.

        19.7.   Purchase for Investment.

                The Committee may require each person purchasing Shares pursuant
to an Option or other  award under the Plan to  represent  to and agree with the
Company in writing that such person is acquiring the Shares for  investment  and
without a view to distribution or resale.  The  certificates for such Shares may
include  any  legend  which the  Committee  deems  appropriate  to  reflect  any
restrictions on transfer.  All  certificates for Shares delivered under the Plan
shall be subject to such  stock-transfer  orders and other  restrictions  as the
Committee may deem advisable under all applicable  laws,  rules and regulations,
and  the  Committee  may  cause  a  legend  or  legends  to be put  on any  such
certificates to make appropriate references to such restrictions.

        19.8.   No Employment Contract.

                Neither  the  adoption  of the  Plan  nor  any  Benefit  granted
hereunder  shall confer upon any Employee any right to continued  employment nor
shall  the  Plan or any  Benefit  interfere  in any way  with  the  right of the
Employer to terminate the employment of any of its Employees at any time.

        19.9.   No Effect on Other Benefits.

                The receipt of  Benefits  under the Plan shall have no effect on
any benefits to which a Participant  may be entitled  from the  Employer,  under
another plan or  otherwise,  or preclude a Participant  from  receiving any such
benefits.

                                       16

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