Document:

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                                                                    Exhibit 10.1

                           CROSSWORLDS SOFTWARE, INC.

                    FIFTH RESTATED INVESTOR RIGHTS AGREEMENT

                                 October 1, 1999

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                               TABLE OF CONTENTS

1.   Registration Rights..............................................1

     1.1  Definitions.................................................1
     1.2  Demand Registration.........................................2
     1.3  Piggyback Registration Rights...............................5
     1.4  Form S-3 Registration.......................................5
     1.5  Furnish Information.........................................6
     1.6  Expenses of Registration....................................7
     1.7  No Delay of Registration....................................7
     1.8  Indemnification.............................................7
     1.9  Reports under Securities Exchange Act of 1934...............9
     1.10 Assignment of Registration Rights..........................10
     1.11 Market Stand-Off Agreement.................................10
     1.12 Termination of Registration Rights.........................11

2.   Company Right of First Refusal on Sales of Shares...............11

     2.1  General....................................................11
     2.2  Exceptions.................................................12
     2.3  No Assignment of Rights of First Refusal...................12
     2.4  Termination................................................12

3.   Covenants of the Company........................................12

     3.1  Delivery of Financial Statements...........................12
     3.2  Inspection Rights..........................................13
     3.3  Payment of Taxes and Other Claims..........................13
     3.4  Maintenance of Properties; Insurance.......................13
     3.5  Books and Records..........................................14
     3.6  Compliance with Laws.......................................14
     3.7  Proprietary Information Agreements.........................14
     3.8  Investment Company Act.....................................14
     3.9  Termination of Covenants...................................14

4.   Securities Law Compliance.......................................14

     4.1  Restrictions on Transferability............................14
     4.2  Further Limitations on Disposition.........................15

5.   Miscellaneous...................................................15

     5.1  Successors and Assigns.....................................15
     5.2  Governing Law..............................................16
     5.3  Counterparts...............................................16
     5.4  Titles and Subtitles.......................................16
     5.5  Notices....................................................16
     5.6  Expenses...................................................16

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     5.7  Amendments and Waivers.....................................16
     5.8  Aggregation of Stock.......................................16
     5.9  Severability...............................................17
     5.10 Entire Agreement...........................................17
     5.11 Additional Parties.........................................17

EXHIBITS

     Exhibit A: Schedule of Investors

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                    FIFTH RESTATED INVESTOR RIGHTS AGREEMENT

         THIS FIFTH RESTATED INVESTOR RIGHTS AGREEMENT (this "Agreement") is
made as of the 1st day of October 1999, by and among CrossWorlds Software, Inc.,
a Delaware corporation (the "Company") and the Investors listed on Exhibit A
hereto (collectively, the "Investors").

RECITALS

         WHEREAS, the Company and certain of the Investors (the "Prior Holders")
have previously entered into a Fourth Restated Investor Rights Agreement dated
as of January 7, 1999, as amended by the First Amendment to Fourth Restated
Investor Rights Agreement, dated as of March 26, 1999, providing certain
registration and other rights to such Investors (the "Prior Agreement");

         WHEREAS, the Company and certain of the Investors (the "Series F
Holders") are entering into a Series F Preferred Stock Purchase Agreement (the
"Purchase Agreement") of even date herewith;

         WHEREAS, in order to induce the Series F Holders to purchase shares of
Series F Preferred Stock pursuant to the Purchase Agreement, the Company and the
Prior Holders desire that the Company grant to the Series F Holders the
registration and other rights set forth herein, and further desire to conform
the existing registration and other rights of the Prior Holders to such rights
of the Series F Holders as set forth herein; and

         WHEREAS, all Investors desire that the prior Agreement shall be
terminated and that this Agreement shall govern the registration and other
rights of all Investors.

         NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

         1.       Registration Rights. The Company covenants and agrees as
follows:

                  1.1      Definitions.  For purposes of this Section 1:

                           (a)      The term "Act" means the Securities Act of
1933, as amended.

                           (b) The term "Affiliated Person" shall mean any
Person who is an "affiliate" (as defined in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended) and, with
respect to Soros Private Equity Partners LLC, any Person controlling, controlled
by, or under common control with Soros Fund Management LLC. For the purposes of
this Agreement, "control" includes the ability to have investment discretion
through contractual means or by operation of law.

                            (c) The term "Holder" means any person owning or
having the right to acquire Registrable Securities or any permitted assignee
thereof pursuant to the terms of Section 1.10.
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                           (d) The term "1934 Act" shall mean the Securities
Exchange Act of 1934, as amended.

                           (e) The term "Person" means any individual, firm,
corporation, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, limited liability company,
government (or any agency or political subdivision thereof) or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.

                           (f) The terms "register", "registered" and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Act, and the
declaration or ordering of effectiveness of such registration statement or
document.

                           (g) The term "Registrable Securities" means (i)
Common Stock issuable or issued upon conversion of the Series A Preferred
Stock currently held by Investors as specified on Exhibit A hereto; (ii) Common
Stock issuable or issued upon conversion of the Series B Preferred Stock
currently held by Investors as specified on Exhibit A hereto; (iii) Common Stock
issuable or issued upon conversion of the Series C Preferred Stock currently
held by Investors as specified on Exhibit A hereto; (iv) Common Stock issuable
or issued upon conversion of the Series D Preferred Stock currently held by
Investors as specified on Exhibit A hereto; (v) Common Stock issuable or issued
upon conversion of the Series E Preferred Stock currently held by Investors as
specified on Exhibit A hereto; (vi) Common Stock issuable or issued upon
conversion of the Series F Preferred Stock acquired by Purchasers (as defined in
the Purchase Agreement) pursuant to the Purchase Agreement; (vii) the additional
shares of Common Stock currently held by certain Investors as specified on
Exhibit A hereto; and (viii) any Common Stock of the Company issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, the foregoing, excluding in all cases,
however, any shares sold or transferred by a person in a transaction in which
the rights under this Section 1 are not assigned.

                           (h) The number of shares of "Registrable Securities
then outstanding" shall be determined by the number of shares of Common
Stock outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities.

                           (i) The term "SEC" shall mean the Securities and
Exchange Commission.

                  1.2      Demand Registration.

                           (a)      If the Company shall receive at any time
after six (6) months after the effective date of the first registration
statement for a public offering of securities of the Company (other than a
registration statement relating either to the sale of securities to employees of
the Company pursuant to a stock option, stock purchase or similar plan or a SEC
Rule 145 transaction), a written request from (1) at least 30% of the
Registrable Securities then outstanding

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(the "Initiating Holders") or (2) Quantum Industrial Partners LDC or SFM
Domestic Investments LLC and, subject to Section 1.10, their permitted assigns
(the "Initiating Series F Holders"), requesting that the Company file a
registration statement under the Act covering the registration of a portion of
the Registrable Securities then outstanding, then the Company shall:

                                    (i)     within ten (10) days of the receipt
thereof, give written notice of such request to all Holders; and

                                    (ii)    effect as soon as practicable, and
in any event within sixty (60) days of the receipt of such request, the
registration under the Act of all Registrable Securities which the Holders
request to be registered, subject to the limitations of subsection 1.2(b), and,
in the event of a limitation pursuant to subsection 1.2(b), within fifteen (15)
days of the mailing of such notice by the Company in accordance with Section
5.5.

                           (b) If the Initiating Holders or the Initiating
Series F Holders intend to distribute the Registrable Securities covered by
their request by means of an underwriting, they shall so advise the Company as a
part of their request made pursuant to subsection 1.2(a) and the Company shall
include such information in the written notice referred to in subsection 1.2(a).
The underwriter will be selected by the Company and shall be reasonably
acceptable to a majority in interest of the Initiating Holders or the Initiating
Series F Holders, as the case may be. In such event, the right of any Holder or
other holder of securities of the Company to include securities in such
registration shall be conditioned upon such Holder's or holders' participation
in such underwriting and the inclusion of such Holder's or holders' securities
in the underwriting (unless otherwise mutually agreed by a majority in interest
of the Initiating Holders or the Initiating Series F Holders, as the case may
be, and such Holder or holder) to the extent provided herein. All Holders and
other holders of securities of the Company proposing to distribute their
securities through such underwriting shall (together with the Company and the
other holders distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the managing underwriter
selected for such underwriting by the Company. Notwithstanding any other
provision of this Section 1.2, if the Company and the underwriter advise the
Initiating Holders or the Initiating Series F Holders, as the case may be, in
writing that marketing factors require a limitation of the number of shares to
be underwritten, then the Initiating Holders or the Initiating Series F Holders
shall so advise all Holders of Registrable Securities and other holders of
registration rights which would otherwise be underwritten pursuant hereto, and
the number of shares of securities that may be included in the underwriting on
behalf of each Holder or other holder shall be allocated pro-rata amongst the
selling stockholders according to the total number of securities held by each
such selling stockholder and entitled to inclusion therein on the basis of a
registration rights agreement with the Company; provided that if marketing
factors require a limitation of the number of shares to be underwritten in a
registration requested by the Initiating Series F Holders, the Company shall
reduce (to zero, if necessary), first as to the any Holders of Registrable
Securities and other holders of registration rights who are not Initiating
Series F Holders as a group, if any, and then, if such reduction is not
sufficient, as to the Initiating Series F Holders as a group, pro rata within
each group based on the number of Registrable Securities included in the request
for registration, the amount of Registrable Securities to be included by each
Holder in such registration. For purposes of allocation securities to be
included in any offering, for any selling stockholder which is a

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partnership or corporation, the partners, retired partners and stockholders of
such holder (and in the case of a partnership, any affiliated partnerships), or
the estates and family members of any such partners and retired partners and any
trusts for the benefit of any of the foregoing persons shall be deemed to be a
single "selling stockholder," and any pro-rata reduction with respect to such
"selling stockholder" shall be based upon the aggregate amount of shares
carrying registration rights owned by all entities and individuals included in
such "selling stockholder," as defined in this sentence.

                           (c) Notwithstanding the foregoing, if the Company
shall furnish to the Holders requesting a registration statement pursuant
to this Section 1.2 a certificate signed by the Chief Executive Officer of the
Company stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its stockholders
for such registration statement to be filed and it is therefore essential to
defer the filing of such registration statement, the Company shall have the
right to defer taking action with respect to such filing for a period of not
more than ninety (90) days after receipt of the request of the Initiating
Holders or the Initiating Series F Holders, as the case may be; provided,
however, that the Company may not utilize this right more than once in any
twelve-month period.

                           (d) In addition, the Company shall not be obligated
to effect, or to take any action to effect, any registration pursuant to
this Section 1.2 after the Company has effected: (i) two (2) registrations
requested by the Initiating Holders pursuant to this Section 1.2, and (ii) two
registrations requested by the Initiating Series F Holders, pursuant to this
Section 1.2, and such registrations have been declared or ordered effective. For
purposes of this Section 1.2, a proposed registration that is withdrawn due to a
material adverse change in the Company's business or financial condition shall
not count as a registration.

                           (e) In addition, if the Company shall deliver to the
Initiating Holders or the Initiating Series F Holders, as the case may
be, requesting a registration statement pursuant to this Section 1.2, a
certificate signed by the Chief Executive Officer of the Company stating that
the Company intends to file, within sixty (60) days following the date of
receipt of the request of Initiating Holders or the Initiating Series F Holders,
as the case may be, a registration statement covering securities to be offered
by the Company on its own behalf, then the Company may defer the registration
statement requested by this Section 1.2 for so long as the Company in good faith
intends to file a registration statement for the offering of securities on its
own behalf (but in any event, a registration statement shall be filed within
ninety (90) days following receipt of the request of the Initiating Holders or
the Initiating Series F Holders, except as provided in paragraph (c) hereof). In
the event the Company shall file a registration statement for the offering of
securities on its own behalf as provided herein, the Holders shall be entitled
to include Registrable Securities in such registration and offering, provided
that the registration statement relates to shares of Common Stock of the Company
and Registrable Securities are eligible under law for inclusion in such
registration. In such event, the right of the Holders to inclusion of shares in
such registration and offering shall be governed by the provisions of Section
1.3 hereof, except that (with respect to an offering governed by this paragraph
(e)) in the event of an underwritten offering, if marketing factors require the
limitation of the number of shares to be underwritten, the number of shares to
be included in such underwritten registration and offering on behalf of the
Holders and other holders of pari passu registration rights shall not

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constitute less than forty percent (40%) of the total number of securities
included in such underwritten registration and offering.

                  1.3      Piggyback Registration Rights.

                           (a)      Registration Rights. If the Company proposes
to register any of its stock or other securities under the Act in connection
with the public offering of such securities solely for cash (other than a
registration relating solely to the sale of securities to participants in a
Company stock plan, a registration effected pursuant to Rule 145 under the Act,
the first registration for a public offering of securities of the Company or a
registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Registrable Securities) the Company shall, at such
time, promptly give each Holder written notice of such registration. Upon the
written request of each Holder given within fifteen (15) days after mailing of
such notice by the Company in accordance with Section 5.5, the Company shall,
subject to the provisions of paragraph (b) below, cause to be registered under
the Act all of the Registrable Securities that each such Holder has requested to
be registered.
                           (b) Underwriting. If the registration of which the
Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Holders as part of the written
notice given pursuant to Section 1.3(a). In such event, the right of any Holder
to registration pursuant to this Section 1.3 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of Registrable
Securities in the underwriting to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by the
Company. Notwithstanding any other provision of this Section 1.3, if the Company
and the managing underwriter determine that marketing factors require a
limitation of the number of shares to be underwritten, the managing underwriter
may limit or exclude entirely the Registrable Securities to be included in such
registration. The Company shall so advise all Holders distributing their
securities through such underwriting, and the number of shares of Registrable
Securities and other securities that may be included in the registration and
underwriting on behalf of persons other than the Company shall be allocated
among all Holders and such other holders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities and other
securities entitled to registration rights held by such Holders and other
holders at the time of filing the registration statement. To facilitate the
allocation of shares in accordance with the above provisions, the Company may
round the number of shares allocated to any Holder or other holder to the
nearest 100 shares.

                  1.4      Form S-3 Registration. If at any time that the
Company shall be eligible to effect a registration and offering pursuant to Form
S-3 under the Act or any successor form ("Form S-3"), the Company shall receive
from one or more of the Holders a written request or requests that the Company
effect a registration on Form S-3 and any related qualification or compliance
with respect to all or a part of the Registrable Securities owned by such Holder
or Holders, the Company will:

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                           (a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other
Holders; and

                           (b) as soon as practicable, effect such registration
and all such qualifications and compliances as may be so requested and
as would permit or facilitate the sale and distribution of all or such portion
of such Holder's or Holders' Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of any
other Holder or Holders joining in such request as are specified in a written
request given within fifteen (15) days after receipt of such written notice from
the Company; provided, however, that the Company shall not be obligated to
effect any such registration, qualification or compliance, pursuant to this
Section 1.4: (1) if Form S-3 is not available for such offering by the Holders;
(2) if the Holders, together with the holders of any other securities of the
Company entitled to inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) at an aggregate price to the
public (net of any underwriters' discounts or commissions) of less than one
million dollars ($1,000,000); (3) if the Company shall furnish to the Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such Form S-3 Registration
to be effected at such time, in which event the Company shall have the right to
defer the filing of the Form S-3 registration statement for a period of not more
than ninety (90) days after receipt of the request of the Holder or Holders
under this Section 1.4; provided, however, that the Company shall not utilize
this right more than twice in any twelve month period, and the Company shall not
utilize this right (or the similar right to defer in Section 1.2(c)) for two
consecutive ninety (90) days periods; (4) if the Company has, within the twelve
(12) month period preceding the date of such request, previously effected a
registration on Form S-3 pursuant to this Section 1.4; (5) in any particular
jurisdiction in which the Company would be required to qualify to do business or
to execute a general consent to service of process in effecting such
registration, qualification or compliance.

                           (c) Subject to the foregoing, the Company shall file
a registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt of
the request or requests of the Holders. Registrations effected pursuant to this
Section 1.4 shall not be counted as demands for registration or registrations
effected pursuant to Sections 1.2 or 1.3, respectively.

                  1.5      Furnish Information.

                           (a) It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 1 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.

                           (b) The Company shall have no obligation with respect
to any registration requested pursuant to Section 1.2 if, due to the operation
of subsection 1.5(a), the number of shares or the anticipated aggregate offering
price of the Registrable Securities to be included in the registration does not
equal or exceed the number of shares or the anticipated

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aggregate offering price required to originally trigger the Company's obligation
to initiate such registration as specified in subsection 1.2(a).

                  1.6 Expenses of Registration. The Company shall bear and pay
all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Sections 1.2, 1.3 and 1.4 for each Holder (which right may be
assigned as provided in Section 1.10), including (without limitation) all
registration, filing, and qualification fees, printers and accounting fees
relating or apportionable thereto and the fees and disbursements of counsel for
the Company and no more than one counsel for all the selling Holders, but
excluding underwriting discounts and commissions relating to Registrable
Securities; provided, however, that the Company shall not be required to pay for
any expenses of any registration proceeding begun pursuant to Section 1.2 or 1.4
if the registration request is subsequently withdrawn at the request of a
majority of the Holders of the Registrable Securities electing to be registered
(in which case all participating Holders shall bear such expenses), unless (i)
the registration is withdrawn following any deferral of the registration by the
Company pursuant to Section 1.2(c) or 1.4(b); (ii) the registration is withdrawn
due to a material adverse change in the Company's business or financial
condition; or (iii) in the case of a demand registration pursuant to Section
1.2, the Holders of a majority of the Registrable Securities proposed to be
registered by such Holders requesting withdrawal agree that the Holders shall
forfeit their right to one registration pursuant to Section 1.2.

                  1.7 No Delay of Registration. No Holder shall have any right
to obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.

                  1.8      Indemnification. In the event any Registrable
Securities are included in a registration statement under this Section 1:

                           (a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, any underwriter (as defined in
the Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Act or the 1934 Act, against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Act, the 1934 Act or other federal or state law, insofar as
such losses, claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any state securities law or
any rule or regulation promulgated under the Act, the 1934 Act or any state
securities law; and the Company will pay to each such Holder, underwriter or
controlling person any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, or action, as such expenses are incurred; provided, however, that the
indemnity agreement contained in this subsection 1.8(a) shall not apply to
amounts paid in

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settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable to any indemnitee
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished by such indemnitee.

                           (b) To the extent permitted by law, each Holder will
indemnify and hold harmless the Company, each of its directors, each of
its officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, severally but not jointly,
against any losses, claims, damages, or liabilities (joint or several) to which
any of the foregoing persons may become subject, under the Act, the 1934 Act or
other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder; and each such Holder will pay any legal or other
expenses reasonably incurred by any person intended to be indemnified pursuant
to this subsection 1.8(b), in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this subsection 1.8(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; provided that in no event shall any
indemnity by any Holder under this subsection 1.8(b) exceed the gross proceeds
from the offering received by such Holder.

                           (c) Promptly after receipt by an indemnified party
under this Section 1.8 of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.8,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with one counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
indemnified party under this Section 1.8 unless the failure to deliver notice is
materially prejudicial to its ability to defend such action. Any omission to so
deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 1.8.

                           (d) If the indemnification provided for in this
Section 1.8 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss,

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liability, claim, damage, or expense referred to therein, then the indemnifying
party, in lieu of indemnifying such indemnified party hereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the statements
or omissions that resulted in such loss, liability, claim, damage, or expense as
well as any other relevant equitable considerations; provided that in no event
shall any Holder be required to contribute under this subsection 1.8(d) an
aggregate amount in excess of the gross proceeds from the offering received by
such Holder less any amounts paid by the Holder pursuant to subsection 1.8(b).
The relative fault of the indemnifying party and of the indemnified party shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.

                           (e) Notwithstanding the foregoing, to the extent that
the provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.

                           (f) The obligations of the Company and Holders under
this Section 1.8 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.

                  1.9 Reports under Securities Exchange Act of 1934. With a view
to making available to the Holders the benefits of Rule 144 promulgated under
the Act and any other rule or regulation of the SEC that may at any time permit
a Holder to sell securities of the Company to the public without registration,
the Company agrees to:

                           (a) make and keep public information available, as
those terms are understood and defined in SEC Rule 144, at all times after
ninety (90) days after the effective date of the first registration statement
filed by the Company for the offering of its securities to the general public;

                           (b)      file with the SEC in a timely manner all
reports and other documents required of the Company under the Act and the 1934
Act; and

                           (c) furnish to any Holder, so long as the Holder owns
any Registrable Securities, forthwith upon request (i) a written statement by
the Company that it has complied with the reporting requirements of SEC Rule 144
(at any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), (ii) a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information as may
be reasonably requested in availing any Holder of any rule or regulation of the
SEC which permits the selling of any such securities without registration.

                                      -9-
<PAGE>

                  1.10 Assignment of Registration Rights. The rights to cause
the Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such securities who, after such assignment or transfer, holds at
least seventy-five thousand (75,000) shares of Registrable Securities (subject
to appropriate adjustment for stock splits, dividends, combinations and other
recapitalizations), provided: (a) the Company is, within a reasonable time
before such transfer, furnished with written notice of the name and address of
such transferee or assignee and the securities with respect to which such
registration rights are being assigned; (b) such transferee or assignee agrees
in writing to be bound by and subject to the terms and conditions of this
Agreement, including without limitation the provisions of Section 1.11 below;
and (c) such assignment shall be effective only if immediately following such
transfer the further disposition of such securities by the transferee or
assignee is restricted under the Act. For the purposes of determining the number
of shares of Registrable Securities held by a transferee or assignee of a holder
of Registrable Securities, (i) Affiliated Persons, and (ii) the holdings of
spouses, ancestors, lineal descendants and siblings who acquire Registrable
Securities by gift, will or intestate succession (collectively, "Family
Members"), shall in each case be aggregated together, provided that all
assignees and transferees who would not qualify individually for assignment of
registration rights shall designate in writing to the Company from time to time
a single attorney-in-fact on behalf of the entire group of Affiliated Persons or
Family Members, as the case may be, for the purpose of exercising any rights,
receiving notices or taking any action under this Section 1.

                  1.11     "Market Stand-Off" Agreement.

                           (a) Each Holder hereby agrees that, during the period
of duration specified by the Company and an underwriter of common stock
or other securities of the Company, following the effective date of a
registration statement of the Company filed under the Act, it shall not, to the
extent requested by the Company and such underwriter, directly or indirectly
sell, offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) any securities of the Company
held by it as of the effective date except common stock included in such
registration; provided, however, that:

                                    (i)     all officers and directors of the
Company enter into similar agreements; and

                                    (ii)    such market stand-off time period
shall not exceed one hundred eighty (180) days without the consent of the
affected Holder.

                           (b) Each Holder agrees to provide to the other
Underwriters of any public offering such further agreement as such Underwriter
may require in connection with this market stand-off agreement. In order to
enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Registrable Securities of each Holder (and the
shares or securities of every other person subject to the foregoing restriction)
until the end of such period.

                                      -10-
<PAGE>

                           (c) Notwithstanding the foregoing, the obligations
described in this Section 1.11 shall not apply to a Holder eligible to use
Schedule 13G under the 1934 Act for any underwritten public offering by the
Company other than its initial underwritten public offering.

                  1.12     Termination of Registration Rights.

                           (a) The right of any Holder to inclusion in any
registration pursuant to Section 1.3 shall terminate upon such date as, in the
opinion of counsel to the Company, a public trading market shall exist for the
Company's Common Stock and all shares of Registrable Securities beneficially
owned or subject to Rule 144 aggregation by such Holder may immediately be sold
under Rule 144 (without regard to Rule 144(k)) during any 90-day period and such
Holder holds less than one percent (1%) of the outstanding capital stock of the
Company.

                           (b)      The right of any Holder to inclusion in any
registration pursuant to Sections 1.2 or 1.4 shall terminate upon the earlier of
(i) such date as, in the opinion of counsel to the Company, a public trading
market shall exist for the Company's Common Stock and all shares of Registrable
Securities beneficially owned or subject to Rule 144 aggregation by such Holder
may immediately be sold under Rule 144 (without regard to Rule 144(k)) during
any 90-day period and such Holder holds less than two percent (2%) of the
outstanding capital stock of the Company, and (ii) the date which is three years
from the date of the Company's initial underwritten public offering.

         2.       Company Right of First Refusal on Sales of Shares.

                  2.1 General. In the event that a Holder proposes to make any
sale or transfer of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series F
Preferred Stock or Common Stock issued upon conversion of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock, Series E Preferred Stock or Series F Preferred Stock otherwise permitted
pursuant to this Agreement, then prior to effecting such sale or transfer the
Holder shall give the Company the opportunity to purchase such shares in the
following manner:

                           (a) Such Holder shall give notice (the "Transfer
Notice") to the Company in writing of such intention, specifying the
securities proposed to be sold or transferred, the proposed price per share
therefor (the "Transfer Price"), the name of the proposed transferee or
transferees and the other material terms upon which such disposition is proposed
to be made, including such other terms and information as the Company may
reasonably request in order to confirm the bona fide nature of the proposed
transaction.

                           (b) The Company shall have the right, exercisable by
written notice given by the Company to such Holder within thirty (30) days after
receipt of such Transfer Notice to purchase all (but not less than all) of the
securities specified in such Transfer Notice.

                           (c) If the Company exercises its right of first
refusal hereunder, the closing of the purchase of the securities with respect
to which such right has been exercised shall

                                      -11-
<PAGE>

take place within thirty (30) days after the Company gives notice of such
exercise, which period of time shall be extended if necessary to comply with
applicable securities laws and regulations. Upon exercise of its right of first
refusal, the Company and such Holder shall be legally obligated to consummate
the purchase contemplated thereby and shall use their best efforts to secure any
approvals required in connection therewith.

                           (d) If the Company does not exercise its right of
first refusal hereunder within the thirty (30) day period specified for such
exercise, such Holder shall be free, during the period of thirty (30) days
following the expiration of such time for exercise to enter into an agreement to
sell the securities specified in such Transfer Notice, to the specified proposed
transferee or another investor which is solely a financial investor acquiring
for investment purposes, on terms no less favorable to such Holder than the
terms specified in such Transfer Notice, provided that the closing of the
purchase and sale of such securities shall take place within thirty (30) days
after such Holder enters into such agreement.

                  2.2 Exceptions. The right of first refusal herein shall not
apply to any transfer of securities by a Holder without receipt of consideration
by the Holder (i) to any Family Member (as defined in Section 1.1) of any Holder
who is an individual, or to a trust for the benefit of the Holder or the
Holder's Family Members, (ii) to any Affiliated Person (as defined in Section
1.1) of a Holder, (iii) to any partner, member of shareholder of the Holder, or
(iv) to any not-for-profit organization which qualifies under Section 501(c) of
the Internal Revenue Code of 1986, as amended, provided in any such case that
the transferee agrees to be bound by the provisions of this right of first
refusal with respect to any further transfers.

                  2.3 No Assignment of Rights of First Refusal. The Company may
not assign its rights of first refusal under this Section 2.

                  2.4 Termination. The Company's right of first refusal set
forth herein shall terminate upon the first to occur of (i) the closing of an
initial public offering of the Common Stock of the Company to the general public
which is effected pursuant to a registration statement filed with, and declared
effective by, the SEC under the Securities Act, and (ii) such date as the
Company shall be subject to the reporting requirements of Section 13(a) or 15(d)
of the 1934 Act.

         3. Covenants of the Company.

                  3.1 Delivery of Financial Statements. The Company shall
deliver to each Investor, so long as such Investor shall be a Holder of at least
seventy-five thousand (75,000) shares of Registrable Securities (subject to
appropriate adjustment for stock splits, dividends, combinations and other
recapitalizations):

                           (a) as soon as practicable, but in any event within
one hundred twenty (120) days after the end of each fiscal year of the Company,
an income statement for such fiscal year, a balance sheet of the Company and
statement of stockholders' equity as of the end of such year, and a statement of
cash flows for such year, such year-end financial reports to be in reasonable
detail, prepared in accordance with generally accepted accounting principles,
and

                                      -12-
<PAGE>

audited and certified by independent public accountants of nationally recognized
standing selected by the Company;

                           (b) as soon as practicable, but in any event within
sixty (60) days after the end of each of the first three (3) quarters of each
fiscal year of the Company, an unaudited profit or loss statement, a statement
of cash flows for such fiscal quarter and an unaudited balance sheet as of the
end of such fiscal quarter; and

                           (c) within thirty (30) days of the end of each month,
an unaudited profit or loss statement, a statement of cash flows for such month
and an unaudited balance sheet as of the end of such month.

                  3.2 Inspection Rights. The Company will permit representatives
of each Investor holding at least 75,000 shares of Registrable Securities
(subject to appropriate adjustments for all stock splits, dividends,
combinations, recapitalizations and the like) to visit and inspect any of its
properties and during regular business hours upon reasonable notice and as often
as may reasonably by desired, and (in person or telephonically) to discuss the
business, operations, properties, prospects and financial and other condition of
the Company and its subsidiaries with appropriate officers and employees of the
Company and its subsidiaries and with their independent certified public
accountants, subject to an appropriate nondisclosure agreement being executed by
the Investor.

                  3.3 Payment of Taxes and Other Claims. The Company and its
subsidiaries will pay or discharge (or cause to be paid or discharged), before
the same shall become delinquent, all material Taxes, assessments and
governmental charges levied or imposed upon the Company or its subsidiaries or
upon its or their income, profits or property; provided, however, that the
Company and its subsidiaries shall not be required to pay or discharge or cause
to be paid or discharged) any such Tax, assessment or charge whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings provided that adequate reserves or accruals are established and
maintained therefor in accordance with GAAP.

                  3.4      Maintenance of Properties; Insurance.

                           (a) Maintenance of Properties. The Company will, in
all material respects, cause all its properties, licenses, rights, franchises
and agreements ("Properties"), and the Properties of its subsidiaries used or
useful in the conduct of the business of the Company and its subsidiaries, to be
maintained and kept in good condition, repair and working order, and will cause
to be made all necessary repairs, renewals, replacements, and improvements
thereof, all as in the judgment of Company may be reasonable for the conduct of
the business of the Company; provided, however, that nothing in this Section 3.4
shall prevent the Company or a subsidiary from discontinuing the operation and
maintenance of any Property if such discontinuance is, in the judgment of the
Company, desirable in the conduct of its business.

                           (b) Insurance. The Company shall obtain and maintain
(or cause to be obtained and maintained) for itself and each of its
subsidiaries from one or more carriers, policies for "all risk" and general
public liability insurance against loss, damage or claims of the kinds

                                      -13-
<PAGE>

that, in the reasonable, good faith opinion of the Company, is adequate and
appropriate for the conduct of the business of the Company and such Subsidiaries
in a prudent manner, all of which insurance shall be in such amounts, with such
deductibles and amounts of self-insurance and by such methods as shall be
customary, and adequate and appropriate for the conduct of the business of the
Company and such subsidiaries in a prudent manner for entities similarly
situated in its industry.

                  3.5 Books and Records. The Company will, and will cause each
of its subsidiaries to, keep proper books of record and account in which entries
in conformity with generally accepted accounting principles and all requirements
of applicable law shall be made of all dealings and transactions in relation to
its and their business and activities. The Company shall maintain an office in
the continental United States where such books and records shall be maintained
and can be inspected.

                  3.6 Compliance with Laws. The Company shall comply, and shall
cause each of its subsidiaries to comply, with all Laws (as defined in Section
2.25 of the Purchase Agreement) to which any of them or any of their respective
properties is subject, except to the extent that the failure to so comply is not
reasonably expected to have a material adverse effect upon the business or
financial condition of the Company.

                  3.7 Proprietary Information Agreements. The Company shall
maintain in full force and effect in accordance with their respective terms, and
shall take all actions necessary to protect and enforce its rights under, its
Proprietary Information and Invention Assignment Agreements with its employees.

                  3.8 Investment Company Act. The Company shall not become an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended. In the
event that the Company breaches the foregoing, the Company shall forthwith
notify the Purchasers and shall take immediate corrective action to the extent
commercially practicable in order to remedy such breach.

                  3.9 Termination of Covenants. The covenants set forth in this
Section 3 shall terminate and be of no further force or effect (i) when the sale
of securities pursuant to a registration statement filed by the Company under
the Act in connection with the firm commitment underwritten offering of its
securities to the general public is consummated or when the Company first
becomes subject to the periodic reporting requirements of Sections 13(a) or
15(d) of the 1934 Act, whichever event shall first occur or (ii) with respect to
the covenants set forth in this Section 3, as to any Holder, or transferee or
assignee of such Holder, who is deemed by the Board of Directors of the Company
to be a competitor or potential competitor of the Company.

         4.       Securities Law Compliance.

                  4.1 Restrictions on Transferability. The Series A, Series B,
Series C, Series D, Series E and Series F Preferred Stock (collectively, the
"Preferred Stock"), the Common Stock issuable upon conversion thereof (the
"Conversion Stock") and any other

                                      -14-
<PAGE>

securities issues with respect of the Preferred Stock upon any stock split,
stock dividend, recapitalization, merger, consolidation, or similar event, shall
not be sold, assigned, transferred or pledged except upon the conditions
specified in this Agreement, which conditions are intended to ensure compliance
with the provisions of the Act. Each Investor will cause any proposed purchaser,
assignee, transferee, or pledgee of any such shares held by such Investor to
agree to take and hold such securities subject to the provisions and upon the
conditions specified in this Agreement.

                  4.2 Further Limitations on Disposition. Without in any way
limiting the above, each Investor further agrees not to make any disposition of
all or any portion of the Preferred Stock or Conversion Stock unless and until
the transferee has agreed in writing for the benefit of the Company to be bound
by Sections 1.11 and 2 of this Agreement and (to the extent required by
applicable securities law, in the opinion of counsel to the Company) has agreed
to be bound by these Sections 4.1 and 4.2, and:

                           (a) There is then in effect a Registration Statement
under the Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or

                           (b) (i) The Investor shall have notified the Company
of the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii)
until such time as the proposed disposition may be made under Rule 144(k) under
the 1934 Act, if reasonably requested by the Company, the Investor shall have
furnished the Company with an opinion of counsel, reasonably satisfactory to the
Company, that such disposition will not require registration of such shares
under the Act.

         Notwithstanding the foregoing, any shares of Series E Preferred Stock
of the Company, any Common Stock issuable upon exercise thereof, as well as any
other shares of capital stock of the Company which are issued with respect to
such shares as a result of a stock dividend, stock split, or other capital
reorganization of the Company, purchased by Hambrecht & Quist California,
Hambrecht & Quist Employee Venture Fund, L.P. II, Access Technology Partners,
L.P., Access Technology Partners Brokers Fund, L.P. and H&Q CrossWorlds Software
Investors, L.P. (collectively the "H&Q Investors") pursuant to the terms of the
Series E Preferred Stock Purchase Agreement and the other agreements referenced
therein, each dated as of January 7, 1999, as amended as of the date hereof,
shall be freely transferable between the H&Q Investors without restriction,
including but not limited to any restriction imposed by the Company or any
requirement of prior notice to the Company or any other restriction other wise
imposed by or for the benefit of the Company in connection with any such
transfer.

         5.       Miscellaneous.

                  5.1 Successors and Assigns. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including transferees of any shares of Registrable Securities). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies,

                                      -15-
<PAGE>

obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

                  5.2 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of California as such laws apply to
agreements entered into by residents of California and to be performed entirely
within such state.

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

                  5.4 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

                  5.5 Notices. All notices and other communications required or
permitted hereunder shall be in writing, shall be effective when given, and
shall in any event be deemed to be given upon receipt or, if earlier, (a) five
(5) days after deposit with the U.S. Postal Service or other applicable postal
service, if delivered by first class mail, postage prepaid, (b) upon delivery,
if delivered by hand, (c) one (1) business day after the business day of deposit
with Federal Express or similar overnight courier, freight prepaid or (d) one
(1) business day after the business day of facsimile transmission, if delivered
by facsimile transmission with copy by first class mail, postage prepaid, and
shall be addressed (i) if to an Investor, at the Investor's addresses as set
forth on Exhibit A hereto and (ii) if to the Company, at the address of its
principal corporate offices (attention: Secretary), or in any such case at such
other address as a party may designate by ten (10) days' advance written notice
to the other party pursuant to the provisions above.

                  5.6 Expenses. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.

                  5.7 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Registrable Securities then outstanding; provided that (a) the
provisions of Sections 1.11(c) and 3.8 may not be amended as to any Holder
without such Holder's prior written consent, (b) the provisions of Section 3 may
be amended only with the consent of the holders of a majority of the outstanding
Series D Preferred Stock, (c) the provisions of Sections 1.1(b), 1.2(a), 1.10,
1.12 and 2.2 may be amended only with the written consent of Quantum Industrial
Partners LDC and SFM Domestic Investments LLC and (d) the provisions set forth
in the last paragraph of Section 4.2 with respect to the H&Q Investors may be
amended only with the consent of a majority of the Registrable Securities held
by the H&Q Investors. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each holder of any Registrable Securities then
outstanding, each future holder of all such Registrable Securities, and the
Company.

                                      -16-
<PAGE>

                  5.8 Aggregation of Stock. All shares of the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock, Series E Preferred Stock or Series F Preferred Stock held or acquired (or
Common Stock issued upon conversion thereof) by affiliated entities or persons
(including (i) partners or constituent members, (ii) former partners and former
constituent members and (iii) affiliated companies controlled by, controlling or
under common control of such person or entity and their employees and each of
its and their clients with assets under management by any of them) shall be
aggregated for the purpose of determining the availability of or discharge of
any rights under this Agreement. For purposes of this Section 5.8, the Company
may rely on such person whom a group of related persons shall designate from
time to time for information relating to the affiliations of entities or
persons.

                  5.9 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.

                  5.10 Entire Agreement. This Agreement (including the Exhibits
hereto, if any) constitutes the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof, and
supersedes all prior agreements and understandings with respect to the subject
matter hereof (including without limitation the Prior Agreement).

                  5.11 Additional Parties. The parties hereto agree that should
the Company sell additional shares of Series F Preferred Stock to additional
purchasers (the "Additional Purchasers") pursuant to any Additional Closing (as
defined in the Purchase Agreement), such Additional Purchasers shall, after
executing copies of this Agreement (and without any amendment hereto), become
"Investors" and "Purchasers" hereunder and have their names and related
information added to Exhibit A hereto.

                                      -17-
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Fifth Restated
Investor Rights Agreement as of the date first above written.

                                            CROSSWORLDS SOFTWARE, INC.

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

                                      Address:  577 Airport Boulevard, Suite 800
                                                Burlingame, CA  94010

                                            SERIES F HOLDER:

                                            NIR BARKAT HOLDINGS, LTD.

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

                                            ELI BARKAT HOLDINGS, LTD

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

                                            YUVAL 63 HOLDINGS 1995, LTD

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

                                            BARE, LLC

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

         [Signature Page to Fifth Restated Investor Rights Agreement]
<PAGE>

                                            QUANTUM INDUSTRIAL PARTNERS LDC

                                      By:
                                          --------------------------------------
                                           Name:  Michael C. Neus
                                           Title:  Attorney-in-Fact

                                            SFM DOMESTIC INVESTMENTS LLC

                                      By:
                                          --------------------------------------
                                            Name:  Michael C. Neus
                                            Title:  Attorney-in-Fact

          [Signature Page to Fifth Restated Investor Rights Agreement]
<PAGE>

                                            SAP AG (Walldorf)

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

          [Signature Page to Fifth Restated Investor Rights Agreement]
<PAGE>

                                     SELIGMAN COMMUNICATIONS AND
                                     INFORMATION FUND, INC.

                                     By: J. & W. Seligman & Co. Incorporated,
                                         Its investment advisor

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

          [Signature Page to Fifth Restated Investor Rights Agreement]
<PAGE>

                     TERENCE J. GARNETT and KATRINA A.
                     GARNETT, Trustees of the GARNETT
                     FAMILY TRUST U/D/T dated April 2, 1997

                     By: __________________________________
                         Name:
                         Title:

                    KATRINA GARNETT

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

                    FREDERICK GLUCK

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

                    ANDREW LUDWICK

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

                     The Ludwick Family 1989 Trust, Andrew K.
                     Ludwick and Worth Z. Ludwick, Trustees

                     By: __________________________________
                         Name:
                         Title:

                     LUDWICK FAMILY LIMITED PARTNERSHIP

                     By: __________________________________
                         Name:
                         Title:

          [Signature Page to Fifth Restated Investor Rights Agreement]
<PAGE>

                    ACCESS TECHNOLOGY PARTNERS BROKERS FUND, L.P.
                    By:    H&Q VENTURE MANAGEMENT, LLC
                    Its:   General Partner

                    By:
                         ----------------------------------------------
                    Its:
                         ----------------------------------------------

                    H&Q CROSSWORLDS SOFTWARE INVESTORS, L.P.

                    By:
                         ----------------------------------------------
                    Its:
                         ----------------------------------------------

                    HAMBRECHT & QUIST CALIFORNIA

                    By:
                         ----------------------------------------------
                    Its:
                         ----------------------------------------------

                    HAMBRECHT & QUIST EMPLOYEE VENTURE FUND, L.P. II

                    By:    H&Q VENTURE MANAGEMENT, LLC
                    Its:   General Partner

                    By:
                         ----------------------------------------------
                    Its:
                         ----------------------------------------------

                    ACCESS TECHNOLOGY PARTNERS, L.P.

                    By:    ACCESS TECHNOLOGY MANAGEMENT, LLC
                    Its:   Managing Member

                    By:
                         ----------------------------------------------
                    Its:
                         ----------------------------------------------

          [Signature Page to Fifth Restated Investor Rights Agreement]
<PAGE>

                                              VENROCK ASSOCIATES

                                         By:  __________________________________
                                              Name:
                                              Title:

                                              VENROCK ASSOCIATES II, L.P.

                                         By:  __________________________________
                                              Name:
                                              Title:

          [Signature Page to Fifth Restated Investor Rights Agreement]
<PAGE>

                                              ALBERT A. PIMENTEL

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

          [Signature Page to Fifth Restated Investor Rights Agreement]
<PAGE>

                                    Exhibit A

                              SCHEDULE OF INVESTORS

                               INVESTOR ADDRESSES

George F. Adam, Jr.

Admirals L.P.

ATGF II
SUCRE Building Calle 48 Este
Bella Vista, PO Box 5168
Panama S, Panama

Attractor LP
1110 Burlingame Avenue
Burlingame, CA  94010
Attention:  Harvey Allison

Attractor Dearborn Partners LP
1110 Burlingame Avenue
Burlingame, CA  94010
Attention:  Harvey Allison

Attractor Institutional LP
1110 Burlingame Avenue
Burlingame, CA  94010
Attention:  Harvey Allison

Axon Solutions Limited
90a Queens Road
Twickenham
Middlesex
TWI 4ET, UK
<PAGE>

Bayview Investors, Ltd.
c/o Dana Zink
555 California Street
San Francisco, CA 941041

William James Bell 1993 Trust
10539 Bellagio Road
Los Angeles, CA 90077
Attention:  William Bell

Marc Benioff
95 Telegraph Hill
San Francisco, CA 94133

Brad Benson
c/o People Soft
4440 Rosewood Dr., Bldg. 4
Pleasanton, CA 94588-3050

Mark A. Bertelsen
2250 Byron Street
Palo Alto, CA  94301

BIG Partnership
c/o Margaret L. Taylor
40 Kentfield Court
Alamo, CA 94507

BmU-Beteiligungsgesellschaft fur
mittelstandische Unternehmen mbH
Am Platz der Republik
60325 Frankfurt am Main
Germany

George Boutros
c/o Credit Suisse First Boston
2400 Hanover Street
Palo Alto, CA 94304

Ann S. Bowers Separate Property
Trust, Ann S. Bowers, Trustee
237 Coleridge Avenue
Palo Alto, CA 94301-3532
<PAGE>

James J. Bozzini
c/o PeopleSoft
4440 Rosewood Drive, Bldg. 4
Pleasanton, CA 94588

William J. Brady
c/o People Soft
4440 Rosewood Dr., Bldg. 4
Pleasanton, CA 94588-3050

Roy Bukstein
c/o Alger & Bukstein
790 Clydesdale Road
Hillsborough, CA 94010

David Burlington
c/o People Soft
4440 Rosewood Dr., Bldg. 4
Pleasanton, CA 94588-3050

Johnny S. Chen and Sherry H. Chen
1994 Trust
c/o Johnny Chen
Sybase
6475 Christie Avenue
Emeryville, CA 94608

Emily A. Chien
21 East 87th Street, Apt. 8C
New York, NY 10128

Anthony Ciulla
c/o Amerindo Investment Advisers, Inc.
One Embarcadero Center, Suite 2300
San Francisco, CA 94111

CPQ Holdings, Inc.
20555 State Highway 249
Mail Stop 110605
Houston, TX 77070
Attention:  Shaka Jaggi
<PAGE>

Michael S. Dell
c/o Dell Computer Corporation
2214 W. Braker Lane, Suite D
Austin, TX 78758

DMG Employee Coinvestment Fund, L.P.
31 W. 52nd St., 13th Floor
New York, NY 10019
Attention:  Frank Thuemmer

DMG Technology Ventures, L.L.C.
31 W. 52nd St., 13th Floor
New York, NY 10019
Attention:  Frank Thuemmer

Dain, Rauscher & Wessels
Dain Rauscher Plaza
60 South 6th Street, 18th Floor
Minneapolis, MN 55402
Attention: Bryson Hollimon

David A. Duffield Trust
Dated July 14, 1988
c/o PeopleSoft
4440 Rosewood Drive, Bldg. 4
Pleasanton, CA 94588

Francois Duliege
c/o UB Networks
29 Bis Avenue du Chateau
Le Perrenx, FRANCE 94170

J.D. Edwards & Company
One Technology Way
Denver, CO 80237
Attention:  Rick Allen

Fede Corp.
Egerton Stud, The Hodge
Cambridge Road
New Market, Suffolk
CB806J, England
<PAGE>

Michael Frandsen
c/o People Soft
4440 Rosewood Dr., Bldg. 4
Pleasanton, CA 94588-3050

Galleon Management Services
135 E. 57th Street, 26th Floor
New York, NY 10022
Attention:  Raj Rajarantnam

Katrina A. Garnett
c/o CrossWorlds Software, Inc.
577 Airport Blvd., Ste. 800
Burlingame, CA  94010

Terence J. Garnett and Katrina
Garnett, as Husband and Wife
c/o CrossWorlds Software, Inc.
577 Airport Blvd., Ste. 800
Burlingame, CA  94010

George Gilbert
c/o Credit Suisse First Boston
2400 Hanover Street
Palo Alto, CA 94304

Frederick W. Gluck
743 San Ysidro Road
Santa Barbara, CA  93108

Hambrecht & Quist California
Hambrecht & Quist Employee
   Venture Fund, L.P. II
Access Technology Partners, L.P.
Access Technology Partners Brokers Fund, L.P.
H&Q CrossWorlds Software Investors, L.P.
One Bush Street
San Francisco, CA 94104

John J. Hamilton III
c/o William Wilson & Co.
150 Fox Hollow Road
Woodside, CA 94062
Attention:  John J. Hamilton
<PAGE>

Promod Haque
236 Old Adobe Road
Los Gatos, CA 95030

Anthony Harris
c/o SAP Australia Pty Ltd.
Level 1, 168 Walker Street
North Sydney NSW 2060
Australia

Les Hayman
750A Chai Chee Road
7th Floor Chai Chee Industrial Park
Singapore 469001

Industri-Mathematik International Corp.
Box 7733
103 95 Stockholm, Sweden

Intel Corporation
Attn:  Guy Anthony
Strategic Investments and Acquisitions
Treasury Department SC4210
2200 Mission College Boulevard
Santa Clara, CA 95052

John Martin Jack, Trustee, FBO
John M. Jack Trust U/A/D 08/10/95
c/o Vantive Corporation
2455 Augustine Drive
Santa Clara, CA  95054

Friedrich Carol Janssen

Amal Johnson, Trustee,
Johnson Family Living Trust
BAAN
2350 Mission College Blvd., Ste. 1300
Santa Clara, CA  95054
<PAGE>

Kanematsu Corporation
1555 Bovet Rd., Suite 800
San Mateo, CA  94402
Attn: Rob Jacobs

Kanematsu USA Inc.
1555 Bovet Rd., Suite 800
San Mateo, CA  94402
Attn: Rob Jacobs

Fred Langhammer
c/o Estee Lauder
767 5th Avenue
New York, NY 10153
Attention:  Frank Thuemmler

Michael J. Levinthal and Katherine Grace Schlien
and Theodore Elliott Schlein, Trustees of the
Levinthal Family Generation SkippingTrust
c/o Mayfield
420 Maple Street
Palo Alto, CA 94301

Michael J. Levinthal and Katherine Grace Schlien
and Theodore Elliott Schlein, Trustees of the Kate
Parker Levinthal Trust-1997 UTA dated 10/8/97
c/o Mayfield
420 Maple Street
Palo Alto, CA 94301

Michael J. Levinthal, Trustee of the
Michael J. Levinthal Trust U/D/T 1/18/88
c/o Mayfield
420 Maple Street
Palo Alto, CA 94301

Michael J. Levinthal and Katherine Grace Schlien
and Theodore Elliott Schlein, Trustees of the
Zachary Dylan Parker Trust dated 10/8/97
c/o Mayfield
420 Maple Street
Palo Alto, CA 94301
<PAGE>

Litton Master Trust
c/o Chase Manhattan Bank
Four New York Plaza
Ground Floor
New York, NY 10004
Attn: Chase Acct# P49391, Litton Industries

The Ludwick Family Limited Partnership
491 Santa Rita Road
Palo Alto, CA 94301

The Ludwick Family 1989 Trust, Andrew K.
Ludwick and Worth Z. Ludwick, Trustees
491 Santa Rita Road
Palo Alto, CA 94301

John R. and Rhonda R. Luongo
c/o Vantive Corporation
2455 Augustine Corporation
Santa Clara, CA  95054

Homer L. Luther
3661 Wickersham Lane
Houston, TX 77027

Homer Luther IRA Rollover
3661 Wickersham Lane
Houston, TX 77027

Manugistics, Inc.
2115 East Jefferson Street
Rockville, MD 20852-4999
Attention:  Bill Gibson

Emeric McDonald
c/o Amerindo Investment Advisers, Inc.
One Embarcadero Center, Suite 2300
San Francisco, CA 94111

Christina M. Morgan
c/o Hambrecht & Quist
2127 Greenways Drive
Woodside, CA 94062
<PAGE>

Nancy S. Mueller Revocable Trust
2100 Waverly Street
Palo Alto, CA 94301

T. Michael and Yvonne M. Nevens
as Husband and Wife
c/o McKinsey & Co.
24142 Summerhill Avenue
Los Altos, CA 94024

Nexus Capital Partners I L.P.
c/o DMG
1 Market Plaza
Steuart Tower, Suite 2400
San Francisco, CA 94105
Attention:  Rob Horning

NIR Barkat Holdings, LTD
ELI Barkat Holdings, LTD
Yuval 63 Holdings 1995, LTD
BARE, LLC
8 Hamarpe st
Har Hozvim, Jerusalem
Israel 91450
Attention: Avi Broder

Omron Corporation
Karasuma Nanajo
Shinogoyo-ky
Kyoto 617
Japan
Attention:  Tatsuro Ichihara

Pade Family Trust
c/o McKinsey & Co.
Attn:  William Pade
630 Hansen Way
Palo Alto, CA 94304

Palmetto Partners
Attn:  Don Kendall
711 Louisianna, 33rd Floor
Houston, TX 77002
<PAGE>

Robert T. Pardue
c/o PeopleSoft
4440 Rosewood Drive, Bldg. 4
Pleasanton, CA 94588-3050

Thomas Pasley
c/o People Soft
4440 Rosewood Dr., Bldg. 4
Pleasanton, CA 94588-3050

Charles E. Phillips
c/o Morgan Stanley
1585 Broadway, 14th Floor
New York, NY 10036

Ross Anthony Pimentel 1994 Trust
c/o Rocky Pimentel
18206 Daves Avenue
Monte Sereno, CA 95030

Albert A. & Laurie J. Pimentel Joint Trust
c/o Rocky Pimentel
18206 Daves Avenue
Monte Sereno, CA 95030

Jacquelyn Marie Pimentel 1994 Trust
c/o Rocky Pimentel
18206 Daves Avenue
Monte Sereno, CA 95030

Jayne Leigh Pimentel 1994 Trust
c/o Rocky Pimentel
18206 Daves Avenue
Monte Sereno, CA 95030

Kathryn Rose Pimentel 1996 Trust
c/o Rocky Pimentel
18206 Daves Avenue
Monte Sereno, CA 95030
<PAGE>

Porcelain Partners L.P.
c/o DMG
1 Market Street
Steuart Tower, Suite 2400
San Francisco, CA 94105
Attention:  Rob Homing

Quattrone Family Trust, Frank P. Quattrone and
Denise Foderaro, Trustees
c/o Credit Suisse First Boston Corp.
2400 Hanover Street
Palo Alto, CA  94304

M.R. Rangaswami
6233 E. Country Club Vista Drive
Tucson, AZ 85750

David B. Readerman and Rita Burgess, as Husband
and Wife
55 Rolling Hills Road
Tiburon, CA 94520

Heinz Ulrich Roggenkemper
c/o SAP AG
950 Tower Ln., 16th Floor
Foster City, CA  94404

SAP AG
950 Tower Ln., 16th Floor
Foster City, CA  94404
Attn: Heinz Ulrich Roggenkemper

Ori Sasson
2 Irving Court
Orinda, CA 94563

Seligman Communications and Information Fund,
Inc.
125 University Avenue
Palo Alto, CA 94301
Attention:  Storm Bostwick
<PAGE>

James C. Sha
c/o Actra
18 Valley Oak
Portola Valley, CA 94028

Roger J. Sippl
c/o Visigenics
116 Fox Hollow Road
Woodside, CA 94062

Bob Spinner
c/o Clarify
2125 O'Nell Drive
San Jose, CA  95131

James Stableford
c/o Amerindo Investment Advisers, Inc.
43 Upper Grosvenor Street
London W1X9PG
England

David Stamm
c/o Clarify Inc.
2125 O'Nell Drive
San Jose, CA 95131

Star Bay Partners, L.P., a California Limited
Partnership
44 Montgomery Street, Suite 2000
San Francisco, CA 94104
Attention:  Pascal N. Levensohn

Frank H. Thuemmler
c/o DMG Technology
31 West 52nd Street, 15th Floor
New York, NY 10019

Thyssen Global, Inc.
1 Piso
1642 Lomas de San Isidro
Buenos Aires, Argentina
Attention:  Claudio Zich Thyssen
<PAGE>

Morton Topfer
c/o Dell Computer Corporation
1415 Woolridge Drive
Austin, TX 78703

Venrock Associates
30 Rockefeller Plaza, Room 5508
New York, NY 10112
Attn: Ted McCourtney

Venrock Associates II, L.P.
30 Rockefeller Plaza, Room 5508
New York, NY 10112
Attn: Ted McCourtney

Alex Vieux
c/o Dasar
1157 San Antonio Road
Mountain View, CA 94043

John Neil Weintraut
c/o 21st Century Internet
1949 Chestnut Street #201
San Francisco, CA 94123

The Wilson Family Limited Partnership
c/o William Wilson & Associates
Attn:  William Wilson
2929 Campus Drive, Suite 450
San Mateo, CA 94403

William Wilson III
c/o William Wilson & Associates
Attn:  William Wilson
2929 Campus Drive, Suite 450
San Mateo, CA 94403

WS Investment Co. 96A
Attn: Mary Anne Pedroni
650 Page Mill Road
Palo Alto, CA 94304-1050
<PAGE>

WS Investment Co. 97A
Attn:  Mary Anne Pedroni
c/o Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304-1050

Trustee, WSG&R Retirement Plan
FBO Howard S. Zeprun
Attn: Jayne Brownlee
650 Page Mill Road
Palo Alto, CA 94304-1050

Howard S. Zeprun, as custodian for
Morgan Garnett under CUTMA
until age 21
Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304

Quantum Industrial Partners LDC
SFM Domestic Investments LLC
Attn:  Michael C. Neus, Esq.
c/o Soros Fund Management
888 Seventh Avenue
New York, NY  10106

SAP AG (Walldorf)
Neurottstrasse 16
69190 Walldorf
Germany
Tel: ###-##-#### 7 51222
Fax: ###-##-#### 7 42540

[Robert Solomon]
[Address]<PAGE>

                                                                    EXHIBIT 10.8

                             EMPLOYMENT AGREEMENT

          This AGREEMENT is entered into as of October 5, 1999, by and between
Alfred J. Amoroso (the "Executive") and CrossWorlds Software, Inc., a Delaware
corporation (the "Company").

          1.  Duties and Scope of Employment.
              ------------------------------

                  (a)  Position. For the term of his employment under this
                       --------
Agreement ("Employment"), the Company agrees to employ the Executive in the
position of President and Chief Executive Officer. The Executive shall report to
the Company's Board of Directors. At the next meeting of the Board of Directors,
the Executive will be nominated to serve as a Director, and if so elected, the
Executive shall serve in such capacity without additional compensation.

                  (b)  Obligations to the Company. During the term of his
                       --------------------------
Employment, the Executive shall devote his full business efforts and time to the
Company; provided, however, that after the first year of Employment with the
Company this shall not preclude the Executive from serving as a member of the
board of directors of up to three other companies to the extent such other
companies do not compete with the Company and to the extent such service does
not materially impact the ability of the Executive to fulfill his obligations to
the Company. During the first year of Employment, the Executive may serve as a
member of the board of directors of other companies only with the written
consent of the Board of Directors of the Company. The Executive shall comply
with the Company's policies and rules, as they may be in effect from time to
time during the term of his Employment.

                  (c)  No Conflicting Obligations. The Executive represents and
                       --------------------------
warrants to the Company that he is under no obligations or commitments, whether
contractual or otherwise, that are inconsistent with his obligations under this
Agreement. The Executive represents and warrants that he will not use or
disclose, in connection with his employment by the Company, any trade secrets or
other proprietary information or intellectual property in which the Executive or
any other person has any right, title or interest and that his employment by the
Company as contemplated by this Agreement will not infringe or violate the
rights of any other person or entity. The Executive represents and warrants to
the Company that he has returned all property and confidential information
belonging to any prior employers.

                  (d)  Commencement Date.  The Executive shall commence full-
                       -----------------
time Employment on October __, 1999.

          2.  Cash and Incentive Compensation.
              -------------------------------

                  (a)  Salary.  The Company shall pay the Executive as
                       ------
compensation for his services a base salary at the rate of not less than
$41,666.66 per month, payable in accordance
<PAGE>

with the Company's standard payroll schedule. (The compensation specified in
this Subsection (a), together with any increases in such compensation that the
Company may grant from time to time, is referred to in this Agreement as "Base
Salary.")

                  (b)  Sign-on Bonus. The Executive shall be paid a sign-on
                       -------------
bonus of $400,000, less all applicable deductions, that will be earned when
Executive commences Employment. This bonus will be paid on or before March 1,
2000.

                  (c)  Target Bonus. The Executive will be paid a pro rata
                       ------------
target bonus for the period ending December 31, 1999 based on the number of
weeks of actual employment in 1999 and a full annual target bonus of $250,000;
this bonus will be paid on or before March 1, 2000. Executive will be paid a
bonus of $250,000 for calendar year 2000; this payment will be made on or before
February 15, 2001. Beginning with the year 2001 and for each year thereafter
during the Employment Period, the Executive will be eligible to earn an annual
bonus (the "Bonus") equal to at least fifty percent (50%) of his Base Salary
based on his achievement of objective or subjective criteria established by the
Company's Board after consultation with Executive. Unless otherwise provided in
this paragraph (c), any bonus payable hereunder shall be payable annually in
accordance with the Company's normal practices and policies.

                  (d)  Stock Options.
                       -------------

                         (i)  Option Grant. Subject to the approval of the
                              ------------
Company's Board of Directors, the Company shall grant the Executive a stock
option to purchase 1,328,245 shares of the Company's common stock, which after
including the stock option grant described in Subsection (ii) below, represents
8% of the Company's outstanding fully diluted common stock immediately following
such stock grant (including common shares and assumed conversion into common
stock of all series of preferred shares, warrants, options and shares available
for option grants and giving effect to the Company's Series F Preferred stock
financing and related one for three reverse stock split). Such option shall be
granted as soon as reasonably practicable after the date Executive's Employment
commences. The per share exercise price of the option will be equal to the per
share fair market value of the common stock on the date of grant, as determined
by the Board of Directors. The term of such option shall be 10 years, subject to
earlier expiration in the event of the termination of the Executive's
Employment. Such option shall be immediately exercisable, if Executive elects to
do so, but the purchased shares shall be subject to repurchase by the Company at
the exercise price in the event that the Executive's Employment terminates
before he vests in the shares. The Executive shall vest, and the Company's
repurchase right if applicable shall lapse in the option shares in equal monthly
installments over forty-eight (48) months from the date Executive's Employment
commences.

                         (ii) Option Grant. Subject to the approval of the
                              ------------
Company's Board of Directors, the Company shall grant the Executive a stock
option to purchase 796,947 shares of the Company's common stock, which after
including the stock option grant described in Subsection (i) above, represents
8% of the Company's outstanding fully diluted common stock immediately following
such stock grant (including common shares and assumed conversion into common
stock of all series of preferred shares, warrants, options and shares available
for option grants and giving effect to the Company's Series F Preferred stock
financing and related one for

                                       2
<PAGE>

three reverse stock split). Such option shall be granted as soon as reasonably
practicable after the date Executive's Employment commences. The per share
exercise price of the option will be equal to the per share fair market value of
the common stock on the date of grant, as determined by the Board of Directors.
The term of such option shall be 10 years, subject to earlier expiration in the
event of the termination of the Executive's Employment. Such option shall be
immediately exercisable, if Executive elects to do so, but the purchased shares
shall be subject to repurchase by the Company at the exercise price in the event
that the Executive's Employment terminates before he vests in the shares. The
Executive shall vest in the option shares, and the Company's repurchase right if
applicable shall lapse, in equal monthly installments over forty-eight (48)
months from the date Executive's Employment commences; however, the vesting
shall accelerate and the Company's repurchase right, if applicable, will lapse
immediately upon the effective date of an initial public offering of the
Company's stock.

                         (iii)  Exercise of Options. The option grants made
                                -------------------
pursuant to subsections (i) and (ii) above shall be subject to the Company's
standard form of stock option agreements, copies of each of which are attached
hereto as exhibits and must be executed as a condition of the grant and
exercise. Executive shall have the right to exercise his options while he
remains employed by the Company by delivering a full recourse promissory note
secured by a pledge of the shares purchased thereunder. If required under the
laws of the Company's state of incorporation, Executive shall pay cash for the
par value of the exercised option shares. Interest on the promissory note shall
accrue at the minimum applicable federal rate under the Internal Revenue Code to
avoid imputed income. The principal balance and interest shall be due in full on
the earlier of the fourth anniversary of Executive's hire date or 90 days after
the termination of Executive's Employment. The note shall be subject to such
other terms and conditions as may be agreed to by the Company and Executive. The
credit extended to Executive hereunder shall equal the aggregate option price
payable for the purchased shares.

                         (iv) Registration of Shares. The Company will take all
                              ----------------------
reasonable steps at its sole cost and expense to register Executive's stock
following an initial public offering so that Executive can sell any vested
shares of stock if he so chooses following the expiration of any applicable
lock-up period. Nothing herein will be interpreted as requiring the Company to
breach any rights regarding the registration of securities under the Securities
Act of 1933.

                         (v)  Effect of Termination of Employment. If during the
                              -----------------------------------
first year of Executive's Employment, the Company terminates Executive's
Employment "Without Cause" or Executive resigns for "Good Reason," then fifty
percent (50%) of the shares subject to Executive's outstanding options will
become vested and, if applicable, the Company's repurchase rights as to such
shares will lapse. Following the first year of Executive's Employment, if the
Company terminates Executive's Employment "Without Cause," or Executive resigns
for "Good Reason," then Executive shall receive additional vesting of all of his
outstanding options and, if applicable, the Company's repurchase rights as to
such shares will lapse, as if he had provided an additional twelve (12) months
of service from the date employment terminates.

                         (vi) Effect of Change of Control. In the event of a
                              ---------------------------
Change of Control during the period of Executive's employment, then each of
Executive's outstanding

                                       3
<PAGE>

options will become fully vested and, if applicable, the Company's repurchase
rights will lapse as to all shares subject to all options.

                         (vii)  Definitions.
                                -----------

                             (a)   "Change of Control." For all purposes under
                                    -------------------
this Agreement, "Change of Control" shall mean (i) a merger or consolidation in
which securities possessing at least fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities are transferred to a
person or persons different from the persons holding those securities
immediately prior to such transaction, or (ii) the sale, transfer or other
disposition of all or substantially all of the Corporation's assets in complete
liquidation or dissolution of the Corporation.

                             (b)   "Good Reason." For all purposes under this
                                   --------------
Agreement, "Good Reason" for Executive's resignation will exist if he resigns
within sixty days of any of the following: (i) any reduction in his base salary
or target bonus; (ii) any material reduction in his benefits; (iii) a change in
his position with the Company or a successor company which materially reduces
his duties or level of responsibility; or (iv) any requirement that he relocate
his place of employment by more than thirty-five (35) miles from his then
current office, provided such reduction, change or relocation is effected by the
Company without his written consent. A resignation by Executive under any other
circumstances or for any other reasons will be a resignation "Without Good
Reason."

                             (c)   Termination for "Cause." For all purposes
                                   ------------------------
under this Agreement, a termination for "Cause" shall mean a good faith
determination by the Company's Board of Directors that Executive's Employment be
terminated for any of the following reasons: (i) willful misconduct which
materially damages the Company; (ii) misappropriation of the assets of the
Company; or (iii) conviction of, or a plea of "guilty" or "no contest" to, a
felony under the laws of the United States or any state thereof. A termination
of Executive's Employment in any other circumstances or for any other reasons
will be a termination "Without Cause."

          3.  Vacation and Executive Benefits. During the term of his
              -------------------------------
Employment, the Executive shall be eligible for paid vacation in accordance with
the Company's standard policy for similarly situated employees, as it may be
amended from time to time. During the term of his Employment, the Executive
shall be eligible to participate in any employee benefit plans maintained by the
Company for similarly situated employees, subject in each case to the generally
applicable terms and conditions of the plan in question and to the
determinations of any person or committee administering such plan.

          4.  Business Expenses. During the term of his Employment, the
              -----------------
Executive shall be authorized to incur necessary and reasonable travel,
entertainment and other business expenses in connection with his duties
hereunder. The Company shall reimburse the Executive for such expenses upon
presentation of an itemized account and appropriate supporting documentation,
all in accordance with the Company's generally applicable policies.

                                       4
<PAGE>

          5.  Real Estate Assistance. The Company will provide the Executive
              ----------------------
with a moving assistance loan (the "Loan") of $1,500,000 to assist the Executive
in moving into a home similar to that in which he presently resides. This Loan
will be provided within a reasonable time after Executive commences employment.
In order to receive this Loan, Executive will be required to execute a non-
recourse promissory note (the "Note") secured by Executive's real estate or
other collateral acceptable to the Company. The Note will bear interest at the
minimum applicable federal rate under the Internal Revenue Code to avoid the
imputation of income. The principal amount of the Loan and accrued interest are
due and payable on the earlier of (i) nine months after the date Executive's
Employment terminates, or (ii) the date when Executive's home is sold. However,
the principal amount of the Loan and accrued interest will be forgiven in equal
monthly installments on the last day of each month from the date of employment
for a period of forty-eight (48) months, provided the Executive remains employed
through each such date. The Company will make periodic bonus payments to
Executive which, following the deduction of all applicable taxes, will allow
Executive to make all tax payments on the loan and forgiven interest. If prior
to the fourth anniversary of the date Executive commences Employment the Company
terminates Executive's Employment "Without Cause" or Executive resigns for "Good
Reason," then on the termination date the Company shall forgive Executive's
monthly installment payments of the loan and accrued interest for twelve (12)
additional months as if Executive had been employed by the Company for those
twelve additional months.

          6.  Relocation and Temporary Living Expenses.
              ----------------------------------------

                  (a)  Relocation Assistance. The Company will provide the
                       ---------------------
Executive with full relocation assistance including payment of all closing costs
on the sale of Executive's current home plus all acquisition costs on the
purchase of his new home in the Bay Area. The Company also will pay for the
packing and unpacking of his household goods, relocation of his household goods
and two house hunting trips including business class airfare from Tokyo, Japan
to the Bay Area for Executive, his spouse and dependent child. The Company
agrees to pay for the relocation of household goods from the Executive's
temporary residence in Tokyo to either Connecticut or California, as Executive
deems necessary, and from Executive's current home in Connecticut to a new home
in California. The Executive shall present appropriate supporting documentation
of such costs in accordance with the Company's generally applicable policies.

                  (b)  Temporary Living Expenses. The Company also will pay for
                       -------------------------
Executive's temporary living costs to make Executive whole until such time as
the Executive, his spouse and dependent children permanently relocate to the Bay
Area. The Executive shall present appropriate supporting documentation of such
costs in accordance with the Company's generally applicable policies. The
Company and Executive agree that such costs cannot be fully anticipated at this
time, but may total $200,000 to $300,000, and may include, but are not limited
to, the following: (a) a monthly housing allowance for rental of a furnished
apartment for Executive's family in Tokyo, Japan; (b) a monthly housing
allowance for Executive's rental of temporary housing in the Bay Area; (c)
tuition and related educational fees for Executive's dependent son; (d) monthly
support for Executive's spouse and dependent child in Tokyo, Japan through
Relocation Services; and (e) reimbursement for two roundtrip business class
airfares per month for either Executive to return to Tokyo, Japan or Executive's
spouse and dependent child to travel to the Bay Area. The Executive will book
such travel arrangements as far in advance as

                                       5
<PAGE>

practicable to minimize the expense of such airfare, and make all possible
efforts to consolidate business travel with trips to Tokyo. In the event there
are additional unanticipated temporary living expenses, the Company will
evaluate in good faith payment of such expenses with the intent to make the
Executive whole.

                  (c)  Gross-up. The Company will provide Executive a gross-up
                       --------
on payments for relocation and temporary living expenses that are not deductible
for tax purposes.

          7.  Term of Employment.
              ------------------

                  (a)  Basic Rule. The Company agrees to continue the
                       ----------
Executive's Employment, and the Executive agrees to remain in Employment with
the Company, from the commencement date set forth in Section 1(d) until the date
when the Executive's Employment terminates pursuant to Subsection (b) below (the
"Employment Period"). The Executive's Employment with the Company shall be "at
will," which means that either the Executive or the Company may terminate the
Executive's Employment at any time, for any reason, with or without Cause. Any
contrary representations, which may have been made to the Executive shall be
superseded by this Agreement. This Agreement shall constitute the full and
complete agreement between the Executive and the Company on the "at will" nature
of the Executive's Employment, which may only be changed in an express written
agreement signed by the Executive and a duly authorized officer of the Company.

                  (b)  Termination. The Company may terminate the Executive's
                       -----------
Employment at any time and for any reason (or no reason), and with "Cause" or
"Without Cause," by giving the Executive notice in writing. The Executive may
terminate his Employment by giving the Company 14 days' advance notice in
writing. The Executive's Employment shall terminate automatically in the event
of his death.

                  (c)  Rights Upon Termination. Except as expressly provided in
                       -----------------------
Section 8, upon the termination of the Executive's Employment pursuant to this
Section 7, the Executive shall be entitled to the compensation, benefits and
reimbursements described in Sections 2, 3 and 4 for the period preceding the
effective date of the termination, including payment of a pro rata share of
Executive's target bonus for the year in which the termination occurs. The
payments under this Agreement shall fully discharge all responsibilities of the
Company to the Executive.

                  (d)  Termination of Agreement. This Agreement shall terminate
                       ------------------------
when all obligations of the parties hereunder have been satisfied. The
termination of this Agreement shall not limit or otherwise affect any of the
Executive's obligations under Section 9.

          8.  Termination Benefits.
              --------------------

                  (a)  Severance Pay. If the Company terminates the Executive's
                       -------------
Employment "Without Cause" or Executive resigns for "Good Reason," then the
Company shall pay the Executive a lump sum payment equal to the sum of (i)
twelve months of his Base Salary plus (ii) his annual target bonus. The Company
also will pay for the cost of Executive continuing his medical coverage for
himself and his eligible dependents under COBRA for a period of one

                                       6
<PAGE>

year following the date his employment terminates if he elects to continue that
coverage. The Company will also accelerate the vesting of the Executive's
outstanding stock options and forgive Executive's repayment of the Loan in
accordance with Sections 2(d)(v) and 5, respectively. Executive's Base Salary
shall be paid at the rate in effect at the time of the termination of Employment
and in accordance with the Company's standard payroll procedures.

          9.  Non-Solicitation and Non-Disclosure.
              -----------------------------------

                  (a)  Non-Solicitation. During the period commencing on the
                       ----------------
date of this Agreement and continuing until the first anniversary of the date
when the Executive's Employment terminated for any reason, the Executive shall
not directly or indirectly, personally or through others, solicit or attempt to
solicit (on the Executive's own behalf or on behalf of any other person or
entity) the employment or retaining of any employee or consultant of the Company
or any of the Company's affiliates.

                  (b)  Non-Disclosure. As a condition of employment Executive
                       --------------
will execute the Company's standard Proprietary Information Agreement, a copy of
which is attached.

          10.  Legal Fees. The Company will pay Executive's reasonable
               ----------
attorneys' fees in connection with negotiating and drafting this Agreement.

          11. Successors.
              ----------

                  (a)  Company's Successors. This Agreement shall be binding
                       --------------------
upon any successor (whether direct or indirect and whether by purchase, lease,
merger, consolidation, liquidation or otherwise) to all or substantially all of
the Company's business and/or assets. For all purposes under this Agreement, the
term "Company" shall include any successor to the Company's business and/or
assets which becomes bound by this Agreement.

                  (b)  Executive's Successors. This Agreement and all rights of
                       ----------------------
the Executive hereunder shall inure to the benefit of, and be enforceable by,
the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.

          12.  Indemnity. The Company will indemnify and provide a defense to
               ---------
the Executive to the full extent permitted by law and its bylaws with respect to
any claims arising out of the performance of his duties as an employee, director
or officer of the Company. To the same extent, the Company will pay, and subject
to any legal limitations, advance all expenses, including reasonable attorney
fees and costs of court-approved settlements, actually and necessarily incurred
by Executive in connection with the defense of any action, suit or proceeding
and in connection with any appeal, which has been brought against Executive by
reason of his service as an officer, director or agent of the Company, or his
acceptance of this Agreement or the performance of his duties thereunder. The
Company shall use its best efforts to obtain coverage for Executive under a
liability insurance policy or policies that cover the actions of officers and
directors of the Company.

          13.  Miscellaneous Provisions.
               ------------------------

                                       7
<PAGE>

                  (a)  Notice. Notices and all other communications contemplated
                       ------
by this Agreement shall be in writing and shall be deemed to have been duly
given when personally delivered or when mailed by overnight courier, U.S.
registered or certified mail, return receipt requested and postage prepaid. In
the case of the Executive, mailed notices shall be addressed to him at the home
address which he most recently communicated to the Company in writing. In the
case of the Company, mailed notices shall be addressed to its corporate
headquarters, and all notices shall be directed to the attention of its
Secretary.

                  (b)  Modifications and Waivers. No provision of this Agreement
                       -------------------------
shall be modified, waived or discharged unless the modification, waiver or
discharge is agreed to in writing and signed by the Executive and by an
authorized officer of the Company (other than the Executive). No waiver by
either party of any breach of, or of compliance with, any condition or provision
of this Agreement by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another time.

                  (c)  Whole Agreement. No other agreements, representations or
                       ---------------
understandings (whether oral or written) which are not expressly set forth in
this Agreement have been made or entered into by either party with respect to
the subject matter of this Agreement. This Agreement, the Proprietary
Information Agreement, and applicable stock option agreements and stock plans,
contain the entire understanding of the parties with respect to the subject
matter hereof.

                  (d)  Taxes. All payments made under this Agreement shall be
                       -----
subject to reduction to reflect taxes or other charges required to be withheld
by law.

                  (e)  Choice of Law. The validity, interpretation, construction
                       -------------
and performance of this Agreement shall be governed by the laws of the State of
California (except provisions governing the choice of law).

                  (f)  Severability. The invalidity or unenforceability of any
                       ------------
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.

                  (g)  No Assignment. This Agreement and all rights and
                       -------------
obligations of the Executive hereunder are personal to the Executive and may not
be transferred or assigned by the Executive at any time. The Company may assign
its rights under this Agreement to any entity that assumes the Company's
obligations hereunder in connection with any sale or transfer of all or a
substantial portion of the Company's assets to such entity.

                  (h)  Arbitration. Any dispute or claim arising out of or in
connection with this Agreement will be finally settled by binding arbitration in
San Francisco, California in accordance with the rules of the American
Arbitration Association by one arbitrator appointed in accordance with said
rules. The Executive and the Company shall split the cost of the arbitration
filing and hearing fees and the cost of the arbitrator. Each party shall bear
its own attorney fees, unless otherwise determined by the arbitrator. The
arbitrator shall apply California law, without reference to rules of conflicts
of law or rules of statutory arbitration, to the resolution of any

                                       8
<PAGE>

dispute. Judgment on the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof. Notwithstanding the foregoing, the parties
may apply to any court of competent jurisdiction for preliminary or interim
equitable relief, or to compel arbitration in accordance with this paragraph,
without breach of this arbitration provision. This Subsection 13(h) shall not
apply to any dispute or claim relating to the Proprietary Information Agreement.

                  (i)  Headings. The headings of the paragraphs contained in
                       --------
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of any provision of this Agreement.

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

          IN WITNESS WHEREOF, each of the parties has executed this Agreement,
in the case of the Company by its duly authorized officer, as of the day and
year first above written.

                                           EXECUTIVE

                                           /S/ Alfred J. Amoroso
                                           ________________________________
                                           Alfred J. Amoroso

                                           CROSSWORLDS SOFTWARE, INC.

                                           By:_____________________________

                                           Title:__________________________

EXHIBIT A - Stock Option Agreements
EXHIBIT B - Proprietary Information Agreement

                                       9

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