<PAGE>

                                                                   Exhibit 10.16

                          TRINET EMPLOYER GROUP, INC.

               AMENDED AND RESTATED INVESTOR'S RIGHTS AGREEMENT
<PAGE>

                               Table Of Contents

<TABLE>
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                                                                        Page
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ARTICLE 1    GENERAL....................................................   1

     1.1   Amendment and Restatement....................................   1
     1.2   Definitions..................................................   2

ARTICLE 2    REGISTRATION...............................................   3

     2.1   Series E Holders Demand Registration.........................   3
     2.2   Series F Holders Demand Registration.........................   4
     2.3   Series E Holders Piggyback Registrations.....................   5
     2.4   Series F Holders Piggyback Registrations.....................   6
     2.5   Series E Holders Form S-3 Registration.......................   8
     2.6   Series F Holders Form S-3 Registration.......................   8
     2.7   Expenses of Registration.....................................   9
     2.8   Obligations of the Company...................................  10
     2.9   Termination of Registration Rights...........................  11
     2.10  Delay of Registration; Furnishing Information................  11
     2.11  Indemnification..............................................  12
     2.12  Assignment of Registration Rights............................  14
     2.13  Amendment of Registration Rights.............................  14
     2.14  Limitation on Subsequent Registration Rights.................  14
     2.15  "Market Stand-Off" Agreement.................................  14
     2.16  Rule 144 Reporting...........................................  15

ARTICLE 3    COVENANTS OF THE COMPANY...................................  15

     3.1   Basic Financial Information and Reporting....................  15
     3.2   Attendance at Board Meetings.................................  16
     3.3   Confidentiality of Records...................................  17
     3.4   Reservation of Common Stock..................................  17
     3.5   Termination of Covenants.....................................  17

ARTICLE 4    MISCELLANEOUS..............................................  17

     4.1   Arbitration and Governing Law................................  17
     4.2   Successors and Assigns.......................................  18
     4.3   Severability.................................................  18
</TABLE>

                                      i.
<PAGE>

                               Table of Contents
                                  (CONTINUED)


<TABLE>
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     4.4   Amendment and Waiver.........................................  18
     4.5   Delays or Omissions..........................................  18
     4.6   Notices......................................................  19
     4.7   Attorneys' Fees..............................................  19
     4.8   Titles and Subtitles.........................................  19
     4.9   Pronouns.....................................................  19
     4.10  Counterparts.................................................  19
</TABLE>

                                      ii.
<PAGE>

               AMENDED AND RESTATED INVESTOR'S RIGHTS AGREEMENT

     This Amended and Restated Investor's Rights Agreement (the "Agreement") is
entered into as of the ___nd day of February __, 2000, by and among TriNet
Employer Group, Inc., a California corporation (the "Company"), Select
Appointments (Holdings) PLC and Affiliates (the "Series E Investors"), and each
of those persons and entities whose names are set forth on the Schedule of
Investors attached hereto as Exhibit A (which persons and entities are
hereinafter collectively referred to as "Series F Investors" and each
individually as a "Series F Investor"). The Series E Investors and Series F
Investors are collectively referred to as "Investors" and each individually as
an "Investor." This Agreement is being entered into pursuant to that certain
Series F Preferred Stock Purchase Agreement of even date herewith between the
Company and the Series F Investors (the "Series F Agreement").

                                   Recitals

     Whereas, certain of the Investors hold shares of the Company's Series E
Preferred Stock (the "Series E Stock") and/or shares of Common Stock issued upon
conversion thereof and possess certain registration rights, information rights
and other rights pursuant to that certain Investor's Rights Agreement dated as
of July 22, 1995 between the Company and Series E Investors (the "Prior
Agreement"); and

     Whereas, the undersigned Series E Investors desire to terminate the Prior
Agreement and to accept the rights created pursuant hereto in lieu of the rights
granted to them under the Prior Agreement; and

     Whereas, Series F Investors are parties to the Series F Agreement, and
certain of the Company's and Series F Investor's obligations under the Series F
Agreement are conditioned upon the execution and delivery by Series F Investors,
the holders of at least a majority of the Series E Stock and the Company of this
Agreement.

                                   Agreement

     Now, Therefore, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth herein, the Series E Investors
hereby agree that the Prior Agreement shall be superseded and replaced in its
entirety by this Agreement, and the parties mutually agree as follows:

                                   ARTICLE 1

                                    GENERAL

     1.1  Amendment and Restatement.  Effective upon the closing of the sale and
issuance of the Company's Series F Preferred Stock (the "Series F Stock")
pursuant to the Series F Agreement, all provisions of, rights granted and
covenants made in the Prior Agreement and any other agreement between the
Company and the Series E Investors are hereby waived, released and terminated in
their entirety and shall have no further force or effect whatsoever. The rights
and covenants of this Agreement set forth the sole and entire agreement among
the

                                       1.
<PAGE>

Company and the Investors on the subject matter and supersede any and all rights
granted or covenants made under any prior agreement.

     1.2  Definitions. As used in this Agreement the following terms shall have
the following respective meanings:

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

     "Form S-3" means such form under the Securities Act as in effect on the
date hereof or any registration form under the Securities Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.

     "Holder" means a Series E Holder or a Series F Holder.

     "Initial Offering" means the Company's first firm commitment underwritten
public offering of its Common Stock registered under the Securities Act in which
the gross proceeds to the Company (before underwriting discounts, commissions
and fees) are at least $20,000,000.

     "Register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.

     "Registrable Securities" means (i) Common Stock of the Company issued or
issuable upon conversion of the Shares, (ii) shares of Common Stock acquired by
the Investor from other shareholders of the Company, and (iii) 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, such
above-described securities. Notwithstanding the foregoing, Registrable
Securities shall not include any securities sold by a person to the public
either pursuant to a registration statement or Rule 144 or sold in a private
transaction in which the transferor's rights under Article II of this Agreement
are not assigned.

     "Registrable Securities then outstanding" shall be the number of shares
determined by calculating the total number of shares of the Company's Common
Stock that are Registrable Securities and either (1) are then issued and
outstanding or (2) are issuable pursuant to then exercisable or convertible
securities.

     "Registration Expenses" shall mean all expenses incurred by the Company in
complying with Sections 2.1, 2.2, 2.3, 2.4, 2.5 and 2.6 hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, reasonable fees and disbursements
not to exceed Fifteen Thousand Dollars ($15,000) of a single special counsel for
the Holders, blue sky fees and expenses and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company which shall be paid in any event by the
Company).

                                       2.
<PAGE>

     "Series E Holder" means any Series E Investor owning of record Registrable
Securities that have not been sold to the public or any assignee of record of
such Registrable Securities in accordance with Section 2.12 hereof.

     "Series F Holder" means any Series F Investor owning of record Registrable
Securities that have not been sold to the public or any assignee of record of
such Registrable Securities in accordance with Section 2.12 hereof.

     "SEC" or "Commission" means the Securities and Exchange Commission.

     "Securities Act" shall mean the Securities Act of 1933, as amended.

     "Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale.

     "Shares" shall mean the Company's Series F Stock issued pursuant to the
Series F Agreement, Series E Stock and any shares of Common Stock issued upon
conversion of Series E Stock.

                                   ARTICLE 2

                                 REGISTRATION


     2.1  Series E Holders Demand Registration.

          2.1.1  Subject to the conditions of this Section 2.1, if the Company
shall receive a written request from the Series E Holders of more than fifty
percent (50%) of the Registrable Securities held by such Series E Holders then
outstanding (the "Initiating Series E Holders") that the Company file a
registration statement under the Securities Act covering the registration of
Registrable Securities having an aggregate offering price to the public of not
less than $5,000,000, then the Company shall, within thirty (30) days of the
receipt thereof, give written notice of such request to all Series E Holders,
and subject to the limitations of this Section 2.1, use its best efforts to
effect, as soon as practicable, the registration under the Securities Act of all
Registrable Securities that the Series E Holders request to be registered.

          2.1.2  If the Initiating Series E 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
this Section 2.1 and the Company shall include such information in the written
notice referred to in Section 2.1.1. In such event, the right of any Series E
Holder to include its Registrable Securities in such registration shall be
conditioned upon such Series E Holder's participation in such underwriting and
the inclusion of such Series E Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed upon by a majority in interest of
the Initiating Series E Holders and such Series E Holder) to the extent provided
herein. All Series E Holders proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by a
majority in interest of the Initiating Series E Holders (which underwriter or
underwriters shall be reasonably acceptable to the Company). Notwithstanding any
other provision of this Section 2.1, if the underwriter

                                       3.
<PAGE>

advises the Company that marketing factors require a limitation of the number of
securities to be underwritten (including Registrable Securities) then the
Company shall so advise all Series E Holders of Registrable Securities which
would otherwise be underwritten pursuant hereto, and the number of shares that
may be included in the underwriting shall be allocated to the Series E Holders
of such Registrable Securities on a pro rata basis based on the number of
Registrable Securities held by all such Series E Holders (including the
Initiating Series E Holders). In the event that a demand registration by Series
E Holders includes Series F Holders, then any limitation of the number of
securities to be underwritten shall be allocated to the Series E Holders and
Series F Holders on a pro rata basis based on the number of Registrable
Securities held by all Series E Holders and Series F Holders. Any Registrable
Securities excluded or withdrawn from such underwriting shall be withdrawn from
the registration.

          2.1.3  The Company shall not be required to effect a registration
pursuant to this Section 2.1:

                 (i)   prior to the earlier to occur of (A) one hundred eighty
(180) days after the Initial Offering and (B) the second anniversary of the date
of this Agreement; or

                 (ii)  after the Company has effected one (1) registration
pursuant to this Section 2.1, and such registration has been declared or ordered
effective; or

                 (iii) during the period starting with the date of filing of,
and ending on the date one hundred eighty (180) days following the effective
date of the registration statement pertaining to the Initial Offering; or

                 (iv)  if within thirty (30) days of receipt of a written
request from Initiating Series E Holders pursuant to Section 2.1.1, the Company
gives notice to the Series E Holders of the Company's intention to make its
Initial Offering within sixty (60) days; or

                 (v)   if the Company shall furnish to Series E Holders
requesting a registration statement pursuant to this Section 2.1, a certificate
signed by the Chairman of the Board 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 shareholders for such registration statement to be effected at
such time, in which event the Company shall have the right to defer such filing
for a period of not more than ninety (90) days after receipt of the request of
the Initiating Series E Holders; provided that such right to delay a request
shall be exercised by the Company not more than once in any twelve (12) month
period.

     2.2  Series F Holders Demand Registration.

          2.2.1  Subject to the conditions of this Section 2.2, if the Company
shall receive a written request from the Series F Holders of more than fifty
percent (50%) of the Registrable Securities held by such Series F Holders then
outstanding (the "Initiating Series F Holders") that the Company file a
registration statement under the Securities Act covering the registration of
Registrable Securities having an aggregate offering price to the public of not
less than $5,000,000, then the Company shall, within thirty (30) days of the
receipt thereof, give written notice of such request to all Series F Holders,
and subject to the limitations of this Section 2.2,

                                       4.
<PAGE>

use its best efforts to effect, as soon as practicable, the registration under
the Securities Act of all Registrable Securities that the Series F Holders
request to be registered.

          2.2.2  If 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
this Section 2.2 and the Company shall include such information in the written
notice referred to in Section 2.2.1. In such event, the right of any Series F
Holder to include its Registrable Securities in such registration shall be
conditioned upon such Series F Holder's participation in such underwriting and
the inclusion of such Series F Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed upon by a majority in interest of
the Initiating Series F Holders and such Series F Holder) to the extent provided
herein. All Series F Holders proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by a
majority in interest of the Initiating Series F Holders (which underwriter or
underwriters shall be reasonably acceptable to the Company). Notwithstanding any
other provision of this Section 2.2, if the underwriter advises the Company that
marketing factors require a limitation of the number of securities to be
underwritten (including Registrable Securities) then the Company shall so advise
all Series F Holders of Registrable Securities which would otherwise be
underwritten pursuant hereto, and the number of shares that may be included in
the underwriting shall be allocated to the Series F Holders of such Registrable
Securities on a pro rata basis based on the number of Registrable Securities
held by all such Series F Holders (including the Initiating Series F Holders).
In the event that a demand registration by Series F Holders includes Series E
Holders, then any limitation of the number of securities to be underwritten
shall be allocated to the Series E Holders and Series F Holders on a pro rata
basis based on the number of Registrable Securities held by all Series E Holders
and Series F Holders. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the registration.

          2.2.3  The Company shall not be required to effect a registration
pursuant to this Section 2.2:

                 (i)   prior to the earlier to occur of (A) July 30, 2001 or (B)
twelve months after an Initial Offering for aggregate proceeds in excess of
$10,000,000; or

                 (ii)  after the Company has effected one (1) registration
pursuant to this Section 2.2, and such registration has been declared or ordered
effective; or

                 (iii) if the Company shall furnish to Series F Holders
requesting a registration statement pursuant to this Section 2.2, a certificate
signed by the Chairman of the Board 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 shareholders for such registration statement to be effected at
such time, in which event the Company shall have the right to defer such filing
for a period of not more than ninety (90) days after receipt of the request of
the Initiating Series F Holders; provided that such right to delay a request
shall be exercised by the Company not more than once in any twelve (12) month
period.

                                       5.
<PAGE>

     2.3  Series E Holders Piggyback Registrations. The Company shall notify all
Series E Holders of Registrable Securities in writing at least thirty (30) days
prior to the filing of any registration statement under the Securities Act for
purposes of a public offering of securities of the Company (including, but not
limited to, registration statements relating to secondary offerings of
securities of the Company, but excluding registration statements relating to
employee benefit plans or with respect to corporate reorganizations or other
transactions under Rule 145 of the Securities Act) and will afford each such
Series E Holder an opportunity to include in such registration statement all or
part of such Registrable Securities held by such Series E Holder. Each Series E
Holder desiring to include in any such registration statement all or any part of
the Registrable Securities held by it shall, within thirty (30) days after the
above-described notice from the Company, so notify the Company in writing. Such
notice shall state the intended method of disposition of the Registrable
Securities by such Series E Holder. If a Series E Holder decides not to include
all of its Registrable Securities in any registration statement thereafter filed
by the Company, such Series E Holder shall nevertheless continue to have the
right to include any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by the Company with respect
to offerings of its securities, all upon the terms and conditions set forth
herein.

          2.3.1  Underwriting. If the registration statement under which the
Company gives notice under this Section 2.3 is for an underwritten offering, the
Company shall so advise the Series E Holders of Registrable Securities. In such
event, the right of any such Series E Holder to be included in a registration
pursuant to this Section 2.3 shall be conditioned upon such Series E Holder's
participation in such underwriting and the inclusion of such Series E Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Series E Holders proposing to distribute their Registrable Securities through
such underwriting shall enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by the
Company (which underwriter or underwriters shall be reasonably acceptable to the
Series E Holders). Notwithstanding any other provision of the Agreement, if the
underwriter determines in good faith that marketing factors require a limitation
of the number of shares to be underwritten, the number of shares that may be
included in the underwriting shall be allocated, first, to the Company; second,
to the Series E Holders on a pro rata basis based on the total number of
Registrable Securities held by the Series E Holders; and third, to any
shareholder of the Company (other than a Series E Holder) on a pro rata basis.
No such reduction shall reduce the securities being offered by the Company for
its own account to be included in the registration and underwriting, and in no
event shall the amount of securities of the selling Series E Holders included in
the registration be reduced to include the shares of any other selling
shareholders or below twenty-five percent (25%) of the total amount of
securities included in such registration, unless such offering is the Initial
Offering, in which event any or all of the Registrable Securities of the Series
E Holders may be excluded in accordance with the immediately preceding sentence.
In no event will shares of any other selling shareholder be included in such
registration which would reduce the number of shares which may be included by
Series E Holders without the written consent of the holders of not less than
two-thirds (66 2/3%) of the Registrable Securities held by Series E Holders
proposed to be sold in the offering.

          2.3.2  Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.3 prior to the effectiveness of such registration whether or not any
Series E Holder has elected to include

                                       6.
<PAGE>

securities in such registration. The Registration Expenses of such withdrawn
registration shall be borne by the Company in accordance with Section 2.7
hereof.

     2.4  Series F Holders Piggyback Registrations. The Company shall notify all
Series F Holders of Registrable Securities in writing at least thirty (30) days
prior to the filing of any registration statement under the Securities Act for
purposes of a public offering of securities of the Company (including, but not
limited to, registration statements relating to secondary offerings of
securities of the Company, but excluding registration statements relating to
employee benefit plans or with respect to corporate reorganizations or other
transactions under Rule 145 of the Securities Act) and will afford each such
Series F Holder an opportunity to include in such registration statement all or
part of such Registrable Securities held by such Series F Holder. Each Series F
Holder desiring to include in any such registration statement all or any part of
the Registrable Securities held by it shall, within thirty (30) days after the
above-described notice from the Company, so notify the Company in writing. Such
notice shall state the intended method of disposition of the Registrable
Securities by such Series F Holder. If a Series F Holder decides not to include
all of its Registrable Securities in any registration statement thereafter filed
by the Company, such Series F Holder shall nevertheless continue to have the
right to include any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by the Company with respect
to offerings of its securities, all upon the terms and conditions set forth
herein.

          2.4.1  Underwriting. If the registration statement under which the
Company gives notice under this Section 2.4 is for an underwritten offering, the
Company shall so advise the Series F Holders of Registrable Securities. In such
event, the right of any such Series F Holder to be included in a registration
pursuant to this Section 2.4 shall be conditioned upon such Series F Holder's
participation in such underwriting and the inclusion of such Series F Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Series F Holders proposing to distribute their Registrable Securities through
such underwriting shall enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by the
Company (which underwriter or underwriters shall be reasonably acceptable to the
Series F Holders). Notwithstanding any other provision of the Agreement, if the
underwriter determines in good faith that marketing factors require a limitation
of the number of shares to be underwritten, the number of shares that may be
included in the underwriting shall be allocated, first, to the Company; second,
to the Series E Holders on a pro rata basis based on the total number of
Registrable Securities held by such Series E Holders; third, to the Series F
Holders on a pro rata basis based on the total number of Registrable Securities
held by such Series F Holders; and fourth, to any shareholder of the Company
(other than a Series E Holder or a Series F Holder) on a pro rata basis. No such
reduction shall reduce the securities being offered by the Company for its own
account to be included in the registration and underwriting, and in no event
shall the amount of securities of the selling Series F Holders included in the
registration be reduced to include the shares of any other selling shareholders
or below twenty-five percent (25%) of the total amount of securities included in
such registration, unless such offering is the Initial Offering, in which event
any or all of the Registrable Securities of the Series F Holders may be excluded
in accordance with the immediately preceding sentence. In no event will shares
of any other selling shareholder be included in such registration which would
reduce the number of shares which may be included by Series F Holders without
the written

                                       7.
<PAGE>

consent of the holders of not less than two-thirds (66 2/3%) of the Registrable
Securities held by Series F Holders proposed to be sold in the offering.

          2.4.2  Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.4 prior to the effectiveness of such registration whether or not any
Series F Holder has elected to include securities in such registration. The
Registration Expenses of such withdrawn registration shall be borne by the
Company in accordance with Section 2.7 hereof.

     2.5  Series E Holders Form S-3 Registration. In case the Company shall
receive from any Series E Holder or Series E Holders of Registrable Securities a
written request or requests that the Company effect a registration on Form S-3
(or any successor to Form S-3) or any similar short-form registration statement
and any related qualification or compliance with respect to all or a part of the
Registrable Securities owned by such Series E Holder or Series E Holders, the
Company will:

          2.5.1  promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Series E Holders of
Registrable Securities; and

          2.5.2  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 Series E
Holder's or Series E Holders' Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of any
other Series E Holder or Series E Holders joining in such request as are
specified in a written request given within twenty (20) 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 2.5:

                 (i)   if Form S-3 (or any successor or similar form) is not
available for such offering by the Series E Holders; or

                 (ii)  if the Series E Holders, together with 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 of less than $500,000; or

                 (iii) if the Company shall furnish to the Series E Holders a
certificate signed by the Chairman of the Board of Directors 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 shareholders
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 Series E Holder or Series E Holders under this Section 2.5;
provided, that such right to delay a request shall be exercised by the Company
not more than once in any twelve (12) month period; or

                 (iv)  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.

                                       8.
<PAGE>

          2.5.3  Subject to the foregoing, the Company shall file Form S-3
registration statements 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 Series E Holders.

     2.6  Series F Holders Form S-3 Registration. In case the Company shall
receive from the Series F Holders representing at least twenty percent (20%) of
the Registrable Securities held by Series F Holders a written request or
requests that the Company effect a registration on Form S-3 (or any successor to
Form S-3) or any similar short-form registration statement and any related
qualification or compliance with respect to all or a part of the Registrable
Securities owned by such Series F Holder or Series F Holders, the Company will:

          2.6.1  promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Series F Holders of
Registrable Securities; and

          2.6.2  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 Series F
Holder's or Series F Holders' Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of any
other Series F Holder or Series F Holders joining in such request as are
specified in a written request given within twenty (20) 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 2.6:

                 (i)   if Form S-3 (or any successor or similar form) is not
available for such offering by the Series F Holders; or

                 (ii)  if the Series F Holders, together with 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 of less than $1,000,000; or

                 (iii) after the Company has effected one (1) registration
pursuant to this Section 2.6 within a twelve-month period, and such registration
has been declared or ordered effective; or

                 (iv)  if the Company shall furnish to the Series F Holders a
certificate signed by the Chairman of the Board of Directors 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 shareholders
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 Series F Holder or Series F Holders under this Section 2.6;
provided, that such right to delay a request shall be exercised by the Company
not more than once in any twelve (12) month period; or

                 (v)   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.

                                       9.
<PAGE>

          2.6.3  Subject to the foregoing, the Company shall file Form S-3
registration statements 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 Series F Holders.

     2.7  Expenses of Registration. Except as specifically provided herein, all
Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2.1 or Section 2.2 or any
registration under Section 2.3, Section 2.4, Section 2.5 or Section 2.6 herein
shall be borne by the Company. All Selling Expenses incurred in connection with
any registrations hereunder, shall be borne by the holders of the securities so
registered pro rata on the basis of the number of shares so registered. The
Company shall not, however, be required to pay for expenses of any registration
proceeding begun pursuant to Section 2.1, 2.2, 2.5 or 2.6 the request of which
has been subsequently withdrawn by the Initiating Series E Holders or Initiating
Series F Holders unless (a) the withdrawal is based upon material adverse
information concerning the Company of which the Initiating Series E Holders or
Initiating Series F Holders were not aware at the time of such request or (b)
the Series E Holders of a majority of Registrable Securities held by Series E
Holders, or the Series F Holders of a majority of Registrable Securities held by
Series F Holders, agree to forfeit their right to one requested registration
pursuant to Section 2.1 and Section 2.2 respectively, in which event such right
shall be forfeited by all such Holders. If the Initiating Series E Holders or
Initiating Series F Holders are required to pay the Registration Expenses, such
expenses shall be borne by the holders of securities (including Registrable
Securities) requesting such registration in proportion to the number of shares
for which registration was requested. If the Company is required to pay the
Registration Expenses of a withdrawn offering pursuant to clause (a) above, then
the Holders shall not forfeit their rights pursuant to Section 2.1 and Section
2.2 to one demand registration statement or Section 2.5 and 2.6 to demand
registrations.

     2.8  Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:

          2.8.1  Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use all reasonable efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to ninety (90) days or with respect
to a Form S-3 Registration Statement, one hundred eighty (180) days or, if
earlier, until the Holder or Holders have completed the distribution related
thereto.

          2.8.2  Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.

          2.8.3  Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.

                                      10.
<PAGE>

          2.8.4   Use all reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.

          2.8.5   In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.

          2.8.6   Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.

          2.8.7   Furnish, at the request of a majority of the Holders
participating in the registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and (ii) a letter
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and if permitted by
applicable accounting standards, to the Holders requesting registration of
Registrable Securities.

     2.9  Termination of Registration Rights. All registration rights granted to
a Holder under this Article II shall terminate and be of no further force and
effect as to such Holder upon the date on which the Company's Common Stock is
publicly traded on a national securities exchange and all Registrable Securities
held by and issuable to such Holder may be sold under Rule 144 during any ninety
(90) day period.

     2.10 Delay of Registration; Furnishing Information.

          2.10.1  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 Article II.

          2.10.2  It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 2.1, 2.2, 2.3, 2.4, 2.5 or 2.6
that the selling Holders shall furnish to

                                      11.
<PAGE>

the Company such information regarding themselves, the Registrable Securities
held by them and the intended method of disposition of such securities as shall
be required to effect the registration of their Registrable Securities.

           2.10.3  The Company shall have no obligation with respect to any
registration requested pursuant to Section 2.1, Section 2.2, Section 2.5 or
Section 2.6 if, due to the operation of subsection 2.10.2, 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 aggregate offering price required to originally trigger the
Company's obligation to initiate such registration as specified in Section 2.1,
Section 2.2, Section 2.5 and Section 2.6 whichever is applicable.

     2.11  Indemnification. In the event any Registrable Securities are included
in a registration statement under Sections 2.1, 2.2, 2.3, 2.4, 2.5 or 2.6:

           2.11.1  To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the partners, officers, directors and legal
counsel of each Holder, any underwriter (as defined in the Securities Act) for
such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Exchange Act, against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Securities Act, the Exchange 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") by the Company: (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 Securities Act,
the Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law in
connection with the offering covered by such registration statement; and the
Company will reimburse each such Holder, partner, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided however, that the indemnity
agreement contained in this Section 2.11.1 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 Company, which consent shall
not be unreasonably withheld, nor shall the Company be liable in any such case
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 expressly for use in connection
with such registration by such Holder, partner, officer, director, underwriter
or controlling person of such Holder.

           2.11.2  To the extent permitted by law, each Holder will, if
Registrable Securities held by such Holder are included in the securities as to
which such registration, qualification or compliance is being effected,
indemnify and hold harmless the Company, each of its directors, its officers,
and legal counsel and each person, if any, who controls the Company within the
meaning of the Securities Act, any underwriter and any other Holder selling
securities under

                                      12.
<PAGE>

such registration statement or any of such other Holder's partners, directors or
officers or any person who controls such Holder, against any losses, claims,
damages or liabilities (joint or several) to which the Company or any such
director, officer, controlling person, underwriter or other such Holder, or
partner, director, officer or controlling person of such other Holder may become
subject under the Securities Act, the Exchange 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 under an
instrument duly executed by such Holder and stated to be specifically for use in
connection with such registration; and each such Holder will reimburse any legal
or other expenses reasonably incurred by the Company or any such director,
officer, controlling person, underwriter or other Holder, or partner, officer,
director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Violation; provided, however,
that the indemnity agreement contained in this Section 2.11.2 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 further, that in no event shall any
indemnity under this Section 2.11 exceed the proceeds from the offering received
by such Holder.

          2.11.3  Promptly after receipt by an indemnified party under this
Section 2.11 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 2.11, 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 counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own 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, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.11 to the extent of such prejudice
only, but the omission so to 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 2.11.

          2.11.4  If the indemnification provided for in this Section 2.11 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability 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 Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be

                                      13.
<PAGE>

determined by a court of law 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;
provided, that in no event shall any contribution by a Holder hereunder exceed
the proceeds from the offering received by such Holder.

           2.11.5  The obligations of the Company and Holders under this Section
2.11 shall survive completion of any offering of Registrable Securities in a
registration statement. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.

     2.12  Assignment of Registration Rights. The rights to cause the Company to
register Registrable Securities pursuant to this Article II may be assigned by a
Holder to a transferee or assignee of Registrable Securities which (i) is a
subsidiary, parent, sister corporation, general partner, limited partner or
retired partner of a Holder, (ii) is a Holder's family member or trust for the
benefit of an individual Holder, or (iii) acquires at least sixty thousand
(60,000) shares of Registrable Securities (as adjusted for stock splits and
combinations); provided, however, (A) the transferor shall, within ten (10) days
after such transfer, furnish to the Company 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 and (B) such transferee shall agree
to be subject to all restrictions set forth in this Agreement.

     2.13  Amendment of Registration Rights. Any provision of this Article II
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and (i) the holders of at least sixty-six and
two-thirds percent (66 2/3%) of the Registrable Securities then held by Series E
Holders and (ii) the holders of at least sixty-six and two-thirds percent (66
2/3%) of the Registrable Securities then held by Series F Holders. Any amendment
or waiver effected in accordance with this Section 2.13 shall be binding upon
each Holder and the Company. By acceptance of any benefits under this Article
II, Holders of Registrable Securities hereby agree to be bound by the provisions
hereunder.

     2.14  Limitation on Subsequent Registration Rights. After the date of this
Agreement, the Company shall not, without the prior written consent of (i) the
holders of at least sixty-six and two-thirds percent (66 2/3%) of the
Registrable Securities then held by Series E Holders and (ii) the holders of at
least sixty-six and two-thirds percent (66 2/3%) of the Registrable Securities
then held by Series F Holders, enter into any agreement with any holder or
prospective holder of any securities of the Company that would grant such holder
registration rights.

     2.15  "Market Stand-Off" Agreement. If requested by the Company or the
representative of the underwriters of Common Stock (or other securities) of the
Company, each Holder shall not sell or otherwise transfer or dispose of any
Common Stock (or other securities) of the Company held by such Holder (other
than those included in the registration) for a period

                                      14.
<PAGE>

specified by the representative of the underwriters not to exceed one hundred
eighty (180) days following the effective date of a registration statement of
the Company filed under the Securities Act, provided that:

                (i)    such agreement shall apply only to the Company's Initial
Offering; and

                (ii)   all officers, directors and other greater than 1%
shareholders of the Company enter into similar agreements.

     The obligations described in this Section 2.15 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The obligations described in this
Section 2.15 shall permit transfers of any Common Stock (or other securities) of
the Company held by Series F Holders to a general partner, limited partner or
retired partner of such Series F Holder; provided, such transferee shall agree
to be subject to all restrictions set forth in this Agreement.

     The Company may impose stop-transfer instructions with respect to the
shares of Common Stock (or other securities) subject to the foregoing
restriction until the end of said one hundred eighty (180) day period. The
foregoing notwithstanding, if the Company or the underwriters waives the
application of the stand-off agreement for any officer, director or greater than
1% shareholder, each Holder shall no longer be subject to the terms of this
Section 2.15.

     2.16  Rule 144 Reporting. With a view to making available to the Holders
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to use its best efforts to:

           (a)  Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date of
the first registration filed by the Company for an 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 Exchange Act;

           (c)  So long as a Holder owns any Registrable Securities, furnish to
such Holder forthwith upon request: a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 of the Securities
Act, and of the Exchange Act (at any time after it has become subject to such
reporting requirements); a copy of the most recent annual or quarterly report of
the Company; and such other reports and documents as a Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing it to
sell any such securities without registration.

                                   ARTICLE 3

                           COVENANTS OF THE COMPANY

                                      15.
<PAGE>

     3.1  Basic Financial Information and Reporting.

          3.1.1  The Company will maintain true books and records of account in
which full and correct entries will be made of all its business transactions
pursuant to a system of accounting established and administered in accordance
with generally accepted accounting principles consistently applied, and will set
aside on its books all such proper accruals and reserves as shall be required
under generally accepted accounting principles consistently applied.

          3.1.2  As soon as practicable after the end of each fiscal year of the
Company, and in any event within ninety (90) days thereafter, the Company will
furnish Investor with an audited consolidated balance sheet of the Company, as
at the end of such fiscal year, and a consolidated statement of income and a
consolidated statement of cash flows of the Company, for such year, all prepared
in accordance with generally accepted accounting principles consistently applied
and setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail. Such financial statements shall be
accompanied by an opinion thereon by independent public accountants of national
standing selected by the Company's Board of Directors.

          3.1.3  So long as the Series E Investor (with its affiliates) shall
own not less than 500,000 Shares of Common or 10,000 Shares of Series E Stock
(as adjusted for stock splits and combinations), the Company will furnish the
Series E Investor (i) at least thirty (30) days prior to the beginning of each
fiscal year an annual budget and operating plans for such fiscal year (and as
soon as available, any subsequent revisions thereto); and (ii) as soon as
practicable after the end of each month, and in any event within twenty-one (21)
days thereafter, a consolidated balance sheet of the Company as of the end of
each such month, and a consolidated statement of income and a consolidated
statement of cash flows of the Company for such month and for the current fiscal
year to date, including a comparison to plan figures for such period, prepared
in accordance with generally accepted accounting principles consistently
applied, with the exception that no notes need be attached to such statements
and year-end audit adjustments may not have been made.

          3.1.4  So long as the Series F Investor (with its affiliates) shall
own not less than 20,000 Shares of Common or 10,000 Shares of Series F Stock (as
adjusted for stock splits and combinations), the Company will furnish the Series
F Investor as soon as practicable after the end of each fiscal quarter, and in
any event within twenty-one (21) days thereafter, a consolidated balance sheet
of the Company as of the end of each such quarter, and a consolidated statement
of income and a consolidated statement of cash flows of the Company for such
quarter and for the current fiscal year to date, including a comparison to plan
figures for such period, prepared in accordance with generally accepted
accounting principles consistently applied, with the exception that no notes
need be attached to such statements and year-end audit adjustments may not have
been made.

     3.2  Attendance at Board Meetings. One representative of the Series F
Investors reasonably acceptable to the Company shall have the right to attend
all meetings of the Board of Directors in a nonvoting observer capacity, to
receive notice of such meetings and to receive information provided by the
Company to the Board of Directors; provided, however, that the Company may
require as a condition precedent to any Series F Investor's rights under this

                                      16.
<PAGE>

Section 3.2 that such representative proposing to attend any meeting of the
Board of Directors shall agree to hold in confidence and trust and to act in a
fiduciary manner with respect to all information so received during such
meetings or otherwise; and provided further, that the Company reserves the right
not to provide information and to exclude such representative from any meeting
or portion thereof if delivery of such information or attendance at such meeting
by such representative would result in disclosure of trade secrets to such
representative or would adversely affect the attorney-client privilege between
the Company and its counsel. Notwithstanding Section 3.5 hereof, the rights set
forth in this Section 3.2 shall terminate six months after the Initial Offering.

     3.3  Confidentiality of Records. The Investor agrees to use, and to use its
best efforts to insure that its authorized representatives use, the same degree
of care as such Investor uses to protect its own confidential information to
keep confidential any information furnished to it which the Company identifies
as being confidential or proprietary (so long as such information is not in the
public domain), except that Investor may disclose such proprietary or
confidential information to any partner, subsidiary, principal shareholder,
officer or director or employee or parent of Investor for the purpose of
evaluating its investment in the Company as long as such partner, subsidiary,
principal shareholder, officer or director or employee or parent is advised of
the confidentiality provisions of this Section 3.3.

     3.4  Reservation of Common Stock. The Company will at all times reserve and
keep available, solely for issuance and delivery upon the conversion of the
Preferred Stock, all Common Stock issuable from time to time upon such
conversion.

     3.5  Termination of Covenants. All covenants of the Company contained in
Article III (other than Section 3.3) of this Agreement shall expire and
terminate as to each Investor on the effective date of the registration
statement pertaining to the Initial Offering.

                                   ARTICLE 4

                                 MISCELLANEOUS


     4.1  Arbitration and Governing Law. All disputes, controversies,
differences, claims or the like between the parties under, arising out of or
related to this Agreement, or the performance, enforcement, breach, termination
or validity of this Agreement (collectively, "Disputes"), shall first be
discussed in good faith between responsible executives of each party (with
necessary authority to resolve the Dispute on behalf of each party) with a view
to promptly and amicably resolving the Dispute. Such discussion shall continue
for a maximum of 90 days after one party provides written notice to the other of
the Dispute. If a Dispute cannot be resolved by such executives, the Dispute
shall be submitted to final and binding arbitration in accordance with the Rules
of the American Arbitration Association (the "AAA"). The arbitration shall be
commenced when one party serves the other with a written demand to arbitrate.
Any arbitration shall be conducted in San Francisco, California, and the parties
consent to the personal jurisdiction of the courts there, for any cause arising
out of or otherwise related to this arbitration, its conduct and its
enforcement. Resolution of Disputes under this Agreement shall be governed by
and construed under the substantive laws of California, as applied to agreements
executed and performed entirely in California by California residents,

                                      17.
<PAGE>

without regard to conflicts of law rules. Each party agrees to abide by the
award rendered in any arbitration conducted pursuant to this Agreement and
agrees that a judgment of the court having jurisdiction may be entered upon the
award. The arbitration panel shall consist of three impartial arbitrators
selected by the AAA in accordance with their rules. Prompt disposal of any
Dispute is important to the parties, and the resolution of any Dispute shall
therefore be conducted expeditiously. The arbitration panel shall give active,
attentive case management to the scope, form, cost-effectiveness and scheduling
of all discovery that may be needed in order that the lack of discovery does not
itself cause an injustice. However, there shall be no discovery that the
arbitrators do not find to be cost-effective and needed. The arbitrators may
issue orders to protect the confidentiality of proprietary information, trade
secrets and other sensitive information disclosed in discovery or the final
hearing, and to protect against misuse of such information and secrets. The
parties agree to abide by such orders. The arbitrators shall assess their costs,
fees and expenses against the party losing the case unless the panel believes
that neither party is the clear loser, in which case the arbitrators shall
divide their fees, costs and expenses according to their sole discretion.
Attorneys fees shall be paid as provided in Section 4.7. The arbitrators shall
state in writing the reasons upon which the final award is based.

     4.2  Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, permitted assigns, heirs, executors, and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of Registrable Securities from time to time;
provided, however, that prior to the receipt by the Company of adequate written
notice of the transfer of any Registrable Securities specifying the full name
and address of the transferee, the Company may deem and treat the person listed
as the holder of such shares in its records as the absolute owner and holder of
such shares for all purposes, including the payment of dividends or any
redemption price. The rights and obligations under this Agreement may not be
assigned by the Company.

     4.3  Severability. In case any provision of the Agreement shall be invalid,
illegal, or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

     4.4  Amendment and Waiver.

          4.4.1  Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company, the holders of
at least sixty-six and two-thirds percent (66 2/3%) of the Registrable
Securities then held by Series E Holders and the holders of at least sixty-six
and two-thirds percent (66 2/3%) of the Registrable Securities then held by
Series F Holders.

          4.4.2  Except as otherwise expressly provided, the obligations of the
Company and the rights of the Holders under this Agreement may be waived only
with the written consent of the holders of at least sixty-six and two-thirds
percent (66 2/3%) of the Registrable Securities then held by Series E Holders
and the holders of at least sixty-six and two-thirds percent (66 2/3%) of the
Registrable Securities then held by Series F Holders.

                                      18.
<PAGE>

     4.5  Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character on
any Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not
alternative.

     4.6  Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) two (2) days after deposit
with an internationally recognized overnight courier, specifying two-day
delivery, with written verification of receipt. All communications shall be sent
to the party to be notified at the address as set forth on the signature pages
hereof or at such other address as such party may designate by ten (10) days
advance written notice to the other parties hereto.

     4.7  Attorneys' Fees. In the event that any dispute among the parties to
this Agreement should result in arbitration or litigation, the prevailing party
in such dispute shall be entitled to recover from the losing party all fees,
costs and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.

     4.8  Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

     4.9  Pronouns. All pronouns contained herein and any variations thereof
shall be deemed to refer to the masculine, feminine or neuter, singular or
plural, as the identity of the parties hereto may require.

     4.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

                    [REST OF PAGE INTENTIONALLY LEFT BLANK]

                                      19.
<PAGE>

     In Witness Whereof, the parties hereto have executed this Investor's Rights
Agreement as of the date set forth in the first paragraph hereof.

Company:

TriNet Employer Group, Inc.
101 Callan Avenue, Third Floor
San Leandro, California 94577

By:___________________________________
Title:________________________________

Investors:

SELECT APPOINTMENTS NORTH AMERICA INC.
Ziggurat Grosvenor Road
St. Albans, Hertfordshire
UK AL13HW

By:___________________________________

By:___________________________________
   Print Name:

BESSEMER VENTURE PARTNERS V L.P.

By: Deer V & Co. LLC, General Partner

By:___________________________________
    Robert H. Buescher, Manager

BESSEC VENTURES V L.P.

By: Deer V & Co. LLC, General Partner

By:___________________________________
     Robert H. Buescher, Manager

BVE LLC.

By: Deer V & Co. LLC, General Partner

By:___________________________________
     Robert H. Buescher, Manager

                                      20.
<PAGE>

                                   Exhibit A


Name and Address                                  Shares
----------------                                  ------

BESSEMER VENTURE PARTNERS V L.P.                    87,453
Attn: Robert H. Buescher
1400 Old Country Road, Suite 407
Westbury, New York 11590

BESSEC VENTURE V L.P.                               58,302
Attn: Robert H. Buescher
1400 Old Country Road, Suite 407
Westbury, New York 11590

BVE LLC                                              4,508
Attn: Robert H. Buescher
1400 Old Country Road, Suite 407
Westbury, New York 11590

TOTAL:                                             150,263

                                      21.