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                                                                    EXHIBIT 10.5

                               SABA SOFTWARE, INC.
                           THIRD AMENDED AND RESTATED
                           INVESTORS' RIGHTS AGREEMENT

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                THIS THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
(this "Agreement") is made as of November 10, 1999, by and between Saba
Software, Inc., a Delaware corporation (the "Company"), each of the investors
listed on Schedule A hereto (each an "Investor" and collectively the
"Investors"), and Babak Yazdani (the "Founder").

                                 R E C I T A L S

                WHEREAS, certain of the Investors (the "Existing Investors")
hold shares of the Company's Series A Preferred Stock (the "Series A Preferred
Stock"), the Company's Series B Preferred Stock (the "Series B Preferred
Stock"), the Company's Series C Preferred Stock (the "Series C Preferred Stock")
and/or shares of Common Stock issuable upon the conversion thereof and possess
registration rights and other rights pursuant to a Second Amended and Restated
Investors' Rights Agreement, dated as of April 14, 1999, by and among the
Company, the Founder and the Existing Investors (the "Prior Agreement");

                WHEREAS, the Founder and the Existing Investors are holders of
at least that number of Registrable Securities (as defined in the Prior
Agreement) required to amend each section of the Prior Agreement pursuant to
Section 3.7 thereof;

                WHEREAS, the Company and certain Investors have entered into, as
of the date hereof, a Series D Preferred Stock Purchase Agreement (the "Series D
Agreement") pursuant to which the Company will issue and sell shares of the
Series D Preferred Stock of the Company (the "Series D Preferred Stock");

                WHEREAS, certain of the Company's and such Investors'
obligations under the Series D Agreement are conditioned upon the execution and
delivery of this Agreement by such Investors, the holders of a majority of the
outstanding shares of Series B Preferred Stock, the holders of two-thirds (2/3)
of the outstanding shares of Series C Preferred Stock, and the holders of a
majority of the outstanding shares of Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock voting together as a single class,
the Founder and the Company.

        NOW, THEREFORE, in consideration of the mutual premises and covenants
set forth herein, the Company, the Existing Investors and the Founder hereby
agree that the Prior Agreement shall be amended and restated as set forth
herein, and the parties hereto further agree as follows:

        1. REGISTRATION RIGHTS. The Company covenants and agrees as follows:

                1.1. DEFINITIONS. For purposes of this Agreement:

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

                        (b) The term "Founder's Shares" means the 7,000,000
shares of Common Stock (subject to appropriate adjustment for stock splits,
stock dividends, combinations and other recapitalizations (collectively, a
"Recapitalization")) issued to the Founder.

                        (c) The term "Form S-3" means such form under the Act as
in effect on the date hereof or any registration form under the 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.

                        (d) The term "Holder" means any person owning or having
the right to acquire Registrable Securities or any assignee thereof in
accordance with Section 1.13 hereof.

                        (e) The term "1934 Act" shall mean the Securities
Exchange Act of 1934, as amended.

                        (f) The term "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) the
Common Stock issuable or issued upon conversion of the Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock,
(ii) the Founder's Shares 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 the shares referenced in (i) or (ii)
above, excluding in all cases, however, any Registrable Securities that have
been sold by a person in a transaction in which his or her rights under this
Section 1 are not assigned or that have been sold by a person pursuant to a
registration statement under the Act covering such Registrable Securities that
has been declared effective by the SEC or in an open market transaction under
Rule 144 of the Act. Notwithstanding anything to the contrary set forth in this
Section 1.1(g), neither the Common Stock issuable or issued upon conversion of
the Series A Preferred Stock or the Founder's Shares (or any shares of Common
Stock otherwise deemed "Registrable Securities" with respect thereto pursuant to
clause (iii) of this Section 1.1(g)) shall be deemed Registrable Securities and
the holders thereof shall not be deemed Holders for the purposes of Section 1.2,
1.6, 1.12, and 1.14.

                        (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.

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                1.2. REQUEST FOR REGISTRATION.

                        (a) If the Company shall receive at any time after the
earlier of the five-year anniversary of the date hereof or 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 an SEC Rule 145 transaction), a
written request from the Holders of a majority of the Registrable Securities
then outstanding that the Company file a registration statement under the Act
covering the registration of at least twenty-five percent (25%) of the
Registrable Securities then outstanding (or a lesser percent if the anticipated
aggregate offering price, net of underwriting discounts and commissions, would
exceed $7,500,000), then the Company shall:

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

                                (ii) as soon as practicable, use commercially
reasonable efforts to effect the registration under the Act of all Registrable
Securities which the Holders request to be registered, together with all or such
portion of the Registrable Securities of any Holder or Holders joining in such
request as are specified in a written request received by the Company, within
twenty (20) days of the mailing of such notice by the Company in accordance with
Section 3.5, subject to the limitations of subsection 1.2(b).

                        (b) If the Holders initiating the registration request
hereunder ("Initiating 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. In
such event, the right of any Holder to include his Registrable Securities in
such registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company as provided in subsection 1.4(e)) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. Notwithstanding any other provision of this
Section 1.2, if the underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each Holder; provided, however,
that the number of shares of Registrable Securities to be included in such
underwriting shall not be reduced unless all other securities are first entirely
excluded from the underwriting.

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                        (c) Not withstanding the foregoing, if the Company shall
furnish to 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 120 days
after receipt of the request of the Initiating Holders; 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:

                                (i) After the Company has effected two (2)
registrations requested by the Holders of Registrable Securities pursuant to
this Section 1.2 and such registrations have been declared or ordered effective;

                                (ii) During the period starting with the date
sixty (60) days prior to the Company's good faith estimate of the date of filing
of, and ending on a date one hundred eighty (180) days after the effective date
of, a registration subject to Section 1.3 hereof; provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective; or

                                (iii) If the Initiating Holders propose to
dispose of shares of Registrable Securities that may be immediately registered
on Form S-3 pursuant to a request made pursuant to Section 1.12 below.

                1.3. COMPANY REGISTRATION. If (but without any obligation to do
so) the Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Holders) 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
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 or a registration in which the only Common Stock being
registered is Common Stock issuable upon conversion of debt securities which are
also being registered), the Company shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request of each
Holder given within twenty (20) days after mailing of such notice by the Company
in accordance with Section 3.5, the Company shall, subject to the provisions of
Section 1.8, use its reasonable efforts to cause to be registered under the Act
all of the Registrable Securities that each such Holder has requested to be
registered.

                1.4. OBLIGATIONS OF THE COMPANY. Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:

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                        (a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use commercially
reasonable efforts to cause such registration statement to become effective;

                        (b) 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 Act with respect to the disposition of all securities covered
by such registration statement;

                        (c) Furnish to each Holder such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as it may reasonably request
from time to time in order to facilitate the disposition of Registrable
Securities owned by it;

                        (d) Use commercially 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, unless the Company is already required to qualify to do business
or subject to service in such jurisdiction and except as may be required by the
Act;

                        (e) 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 of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement;

                        (f) 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 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;

                        (g) Cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange on which similar
securities issued by the Company are then listed; and

                        (h) Provide a transfer agent and registrar for all
Registrable Securities registered pursuant hereunder and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration.

                1.5. FURNISH INFORMATION. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Section 1
with respect to 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

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such securities as shall be required to effect the registration of such Holder's
Registrable Securities.

                1.6. EXPENSES OF DEMAND REGISTRATION. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company
(including fees and disbursements of counsel for the Company in its capacity as
counsel to the selling Holders hereunder; if Company counsel does not make
itself available for this purpose, the Company will pay the reasonable fees and
disbursements of one counsel for the selling Holders) shall be borne by the
Company; provided, however, that the Company shall not be required to pay for
any expenses of any registration proceeding begun pursuant to Section 1.2 if the
registration request is subsequently withdrawn at the request of the Holders of
a majority of the Registrable Securities to be registered (in which case all
participating Holders shall bear such expenses), unless the Holders of a
majority of the Registrable Securities agree to forfeit their right to one
demand registration pursuant to Section 1.2.

                1.7. EXPENSES OF COMPANY 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 Section 1.3 for each Holder, 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 in its capacity as counsel to the selling Holders thereunder (if
Company counsel does not make itself available for this purpose, the Company
will pay the reasonable fees and disbursements of one counsel for the selling
Holders selected by them), but excluding underwriting discounts and commissions
relating to Registrable Securities.

                1.8. UNDERWRITING REQUIREMENTS. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 1.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it and then
only in such quantity as the underwriters determine in their sole discretion
will not, jeopardize the success of the offering by the Company. If the total
amount of securities, including Registrable Securities, requested by
stockholders to be included in such offering exceeds the amount of securities
sold other than by the Company that the underwriters determine in their sole
discretion is compatible with the success of the offering, then the number of
shares of Holders' securities to be included in such offering shall be reduced
in such manner as the Company and the underwriters determine to permit the
success of such offering (the securities so included to be apportioned pro rata
among the selling stockholders according to the total amount of securities
entitled to be included therein owned by each selling stockholder or in such
other proportions as shall mutually be agreed to by such selling stockholders)
but in no event shall (i) the amount of securities of the selling Holders of
Registrable Securities included in the offering be reduced below thirty percent
(30%) of the total amount of securities included in such offering, unless such
offering is the initial public offering of the Company's securities in which
case the selling stockholders may be excluded if the underwriters make the
determination described above and no other stockholders' securities are
included, (ii) notwithstanding (i) above, any shares

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being sold by a stockholder exercising a demand registration right similar to
that granted in Section 1.2 be excluded from such offering, or (iii) the number
of shares of Registrable Securities to be included in such underwriting
(excluding any Founder's Shares) be reduced unless the Founder's Shares are
first entirely excluded from such underwriting. For purposes of the preceding
parenthetical concerning apportionment, for any selling stockholder which is a
holder of Registrable Securities and which is a partnership or corporation, the
partners, retired partners and stockholders of such holder, 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.

                1.9. 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.

                1.10. 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 or the 1934 Act, 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, or any rule or regulation promulgated under
the Act or the 1934 Act; 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; provided, however, that the indemnity
agreement contained in this subsection 1.10(a) shall not apply to (1) 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), or (2) 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 any such Holder,
underwriter or controlling person.

                        (b) To the extent permitted by law, each selling Holder
will indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the

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registration statement, each person, if any, who controls the Company within the
meaning of the Act, any underwriter, any other stockholder of the Company that
is selling securities in such registration statement and any controlling person
of any such underwriter or such other stockholder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act or the 1934 Act, 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 expressly for use in connection
with such registration; and each such Holder will pay any legal or other
expenses reasonably incurred by any person intended to be indemnified pursuant
to this subsection 1.10(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 1.10(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 under this subsection 1.10(b) exceed the gross proceeds from the
offering received by such Holder.

                        (c) Promptly after receipt by an indemnified party under
this Section 1.10 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 1.10, 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
(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, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.10, 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 1.10.

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

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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 1.10 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.

                1.11. 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 or
pursuant to a registration on Form S-3, 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) take such action, including the voluntary
registration of its Common Stock under Section 12 of the 1934 Act, as is
necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities, such action to be taken as soon as practicable after the
end of the fiscal year in which the first registration statement filed by the
Company for the offering of its securities to the general public is declared
effective;

                        (c) 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

                        (d) 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), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (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 or pursuant to such form.

                1.12. FORM S-3 REGISTRATION. In case the Company shall receive
from any Holder or Holders a written request or requests that the Company effect
a registration on Form S-

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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:

                        (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, use commercially reasonable
efforts to 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 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 1.12: (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 $5,000,000; (3) if the Company shall furnish to the
Holders 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 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 60 days after receipt of the request of
the Holder or Holders under this Section 1.12; provided, however, that the
Company shall not utilize this right more than once in any twelve (12) month
period; (4) if the Company has, within the twelve (12) month period preceding
the date of such request, already effected two registrations on Form S-3 for the
Holders pursuant to this Section 1.12; or (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 use
commercially reasonable efforts to 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. All
expenses other than underwriting discounts and commissions incurred in
connection with the first three (3) registrations requested pursuant to Section
1.12, including (without limitation) all registration, filing and qualification
fees, printers' and accounting fees, fees and disbursements of counsel for the
Company (including fees and disbursements of counsel for the Company in its
capacity as counsel to the selling Holders hereunder; if Company counsel does
not make itself available for this purpose, the Company will pay the reasonable
fees and disbursements of one counsel for the selling Holders) shall be borne by
the Company; provided, however, that the Company shall not be required to pay
for any expenses of any registration proceeding begun pursuant to Section 1.12
if the registration request is subsequently withdrawn at the request of the
Holders of a majority of the Registrable Securities to be registered (in which
case all participating Holders shall bear such expenses), unless the Holders of
a majority of the Registrable Securities agree to forfeit their right to have
the Company bear the expenses of one (1) Form S-3 registration pursuant to this
Section 1.12.

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Except as provided in the immediately preceding sentence, all expenses incurred
in connection with a registration requested pursuant to this Section 1.12,
including (without limitation) all registration, filing, qualification,
printer's and accounting fees and the reasonable fees and disbursements of
counsel for the selling Holder or Holders and counsel for the Company, shall be
borne pro rata by the Holder or Holders participating in the Form S-3
Registration. Registrations effected pursuant to this Section 1.12 shall not be
counted as demands for registration or registrations effected pursuant to
Sections 1.2 or 1.3, respectively.

                1.13. 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 Eight Hundred Thousand (800,000) shares of Registrable Securities (subject
to appropriate adjustment for Recapitalizations), provided: (a) the Company is,
within a reasonable time after 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 1.15 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, the holdings of transferees and assignees of a partnership who are
partners or retired partners of such partnership (including spouses and
ancestors, lineal descendants and siblings of such partners or spouses who
acquire Registrable Securities by gift, will or intestate succession) shall be
aggregated together and with the partnership; provided that all assignees and
transferees who would not qualify individually for assignment of registration
rights shall have a single attorney-in-fact for the purpose of exercising any
rights, receiving notices or taking any action under this Section 1.

                1.14. LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and
after the date of this Agreement, the Company shall not, without the prior
written consent of the Holders of a majority of the outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company which would allow such holder or prospective
holder (a) to include such securities in any registration filed under Section
1.2 hereof, unless under the terms of such agreement, such holder or prospective
holder may include such securities in any such registration only to the extent
that the inclusion of his securities will not reduce the amount of the
Registrable Securities of the Holders which is included or (b) to make a demand
registration which could result in such registration statement being declared
effective prior to the earlier of either of the dates set forth in subsection
1.2(a) or within one hundred twenty (120) days of the effective date of any
registration effected pursuant to Section 1.2.

                1.15. "MARKET STAND-OFF" AGREEMENT. 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

                                       11
<PAGE>   12

donees who agree to be similarly bound) any securities of the Company held by it
at any time during such period except Common Stock included in such
registration; provided, however, that:

                        (a) such agreement shall be applicable only to the first
registration statement of the Company which covers Common Stock (or other
securities) to be sold on its behalf to the public in an underwritten offering;

                        (b) such market stand-off time period shall not exceed
180 days; and

                        (c) all officers and directors of the Company, all
holders of one percent (1%) or more of the outstanding equity securities of the
Company, and all other persons with registration rights enter into similar
agreements.

                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.

                Notwithstanding the foregoing, the obligations described in this
Section 1.15 shall not apply to a registration relating solely to employee
benefit plans on Form S-1 or Form S-8 or similar forms which may be promulgated
in the future, or a registration relating solely to a Commission Rule 145
transaction on Form S-4 or similar forms which may be promulgated in the future.

                1.16. TERMINATION OF REGISTRATION RIGHTS.

                        (a) No Holder shall be entitled to exercise any right
provided for in this Section 1 after three (3) years following the consummation
of the sale of securities pursuant to a registration statement filed by the
Company under the Act in connection with the initial firm commitment
underwritten offering of its Common Stock to the general public.

                        (b) In addition, the right of any Holder to request
registration or inclusion in any registration pursuant to Section 1.3 shall
terminate on the closing of the first Company-initiated registered public
offering of Common Stock of the Company if all shares of Registrable Securities
held or entitled to be held upon conversion by such Holder may immediately be
sold under Rule 144 during any 90-day period, or on such date after the closing
of the first Company-initiated registered public offering of Common Stock of the
Company as all shares of Registrable Securities held or entitled to be held upon
conversion by such Holder may immediately be sold under Rule 144 during any
90-day period.

        2. COVENANTS OF THE COMPANY.

                2.1. DELIVERY OF FINANCIAL STATEMENTS. The Company shall deliver
to each Investor holding at least Eight Hundred Thousand (800,000) shares of
Registrable Securities (subject to appropriate adjustment for any
Recapitalization):

                        (a) as soon as practicable, but in any event within
ninety (90) days after the end of each fiscal year of the Company, an income
statement for such fiscal year, a

                                       12
<PAGE>   13

balance sheet of the Company and statement of stockholder's equity as of the end
of such year, and a schedule as to the sources and applications of funds for
such year, such year-end financial reports to be in reasonable detail, prepared
in accordance with generally accepted accounting principles ("GAAP"), and
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
forty-five (45) 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, schedule
as to the sources and application of funds for such fiscal quarter and an
unaudited balance sheet as of the end of such fiscal quarter.

                        (c) within thirty (30) days of the end of each month, an
unaudited income statement and schedule as to the sources and application of
funds and balance sheet for and as of the end of such month, in reasonable
detail;

                        (d) as soon as practicable, but in any event thirty (30)
days prior to the end of each fiscal year, a budget for the next fiscal year,
including balance sheets and sources and applications of funds statements and,
as soon as prepared, any other budgets or revised budgets prepared by the
Company;

                        (e) with respect to the financial statements called for
in subsections 2.1(b) and 2.1(c), an instrument executed by the Chief Financial
Officer or President of the Company and certifying that such financials were
prepared in accordance with GAAP consistently applied with prior practice for
earlier periods (with the exception of footnotes that may be required by GAAP)
and fairly present the financial condition of the Company and its results of
operation for the period specified, subject to year-end audit adjustment; and

                        (f) such other information relating to the financial
condition, business, prospects or corporate affairs of the Company as the
Investor or any assignee of the Investor may from time to time reasonably
request, provided, however, that the Company shall not be obligated under this
subsection 2.1(f) or any other subsection of Section 2.1 to provide information
which could adversely affect the attorney-client privilege between the Company
and its counsel or which it deems in good faith to be a trade secret or similar
confidential information, and provided further that the Company may require the
Investor to execute a nondisclosure agreement prior to disclosure of any such
information.

                2.2. INSPECTION. The Company shall permit Investors holding at
least Eight Hundred Thousand (800,000) shares of Registrable Securities (subject
to appropriate adjustment for any Recapitalization) to visit and inspect the
Company's properties, to examine its books of account and records and to discuss
the Company's affairs, finances and accounts with its officers, all at such
reasonable times as may be requested by the Investor; provided, however, that
the Company shall not be obligated pursuant to this Section 2.2 to provide
access to any information which the Company reasonably considers to be a trade
secret or similar confidential information.

                2.3. TERMINATION OF INFORMATION AND INSPECTION COVENANTS. The
covenants set forth in Sections 2.1 and 2.2 shall terminate and be of no further
force or effect when the sale

                                       13
<PAGE>   14

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 12(g) or
15(d) of the 1934 Act, whichever event shall first occur.

                2.4. RIGHT OF FIRST OFFER. Subject to the terms and conditions
specified in this Section 2.4, the Company hereby grants to each Major Investor
(as hereinafter defined) a right of first offer with respect to future sales by
the Company of its Shares (as hereinafter defined). For purposes of this Section
2.4, a Major Investor shall mean any Investor that holds at least Eight Hundred
Thousand (800,000) shares (subject to appropriate adjustment for any
Recapitalization) of Series B Preferred Stock, Series C Preferred Stock, Series
D Preferred Stock or Common Stock issued upon conversion thereof and any person
who acquires at least Eight Hundred Thousand (800,000) shares (subject to
appropriate adjustment for any Recapitalization) of Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock or Common Stock issued upon
conversion thereof. For purposes of this Section 2.4, Investor includes any
general partners and affiliates of an Investor. An Investor shall be entitled to
apportion the right of first offer hereby granted it among itself and its
partners and affiliates in such proportions as it deems appropriate.

                        Each time the Company proposes to offer any shares of,
or securities convertible into or exercisable for any shares of, any class of
its capital stock ("Shares"), the Company shall first make an offering of such
Shares to each Major Investor in accordance with the following provisions:

                        (a) The Company shall deliver a written notice
("Notice") to the Major Investors stating (i) its bona fide intention to offer
such shares, (ii) the number of such Shares to be offered, and (iii) the price
and terms, if any, upon which it proposes to offer such Shares.

                        (b) By written notification received by the Company,
within 20 calendar days after the giving of the Notice, the Major Investor may
elect to purchase or obtain, at the price and on the terms specified in the
Notice, up to that portion of such Shares which equals the proportion that the
number of shares of Common Stock issued and held, or issuable upon conversion of
the Series B Preferred Stock Series C Preferred Stock and Series D Preferred
Stock then held by such Major Investor bears to the total number of shares of
Common Stock of the Company then outstanding (assuming full conversion and
exercise of all convertible or exercisable securities).

                        (c) If all Shares referred to in the Notice are not
elected to be obtained as provided in subsection 2.4(b) hereof, the Company may,
during the 60-day period following the expiration of the period provided in
subsection 2.4(b) hereof, offer the remaining unsubscribed portion of such
Shares to any person or persons at a price not less than, and upon terms no more
favorable to the offeree than those specified in the Notice. If the Company does
not enter into an agreement for the sale of the Shares within such period, or if
such agreement is not consummated within 60 days of the execution thereof, the
right provided hereunder shall be deemed to be revived and such Shares shall not
be offered unless first reoffered to the Major Investors in accordance herewith.

                                       14
<PAGE>   15

                        (d) The right of first offer in this Section 2.4 shall
not be applicable to (i) the issuance or sale of Common Stock to officers,
directors, employees or consultants for the primary purpose of soliciting or
retaining their employment or services if such issuance is approved by the Board
of Directors, (ii) to or after consummation of a firm commitment underwritten
public offering of shares of Common Stock registered under the Act, (iii) the
issuance of securities pursuant to the conversion or exercise of convertible or
exercisable securities, (iv) the issuance of securities in connection with a
bona fide business acquisition by the Company, whether by merger, consolidation,
sale of assets, sale or exchange of stock or otherwise, or (v) the issuance or
sale of Common Stock, or securities convertible into or exchangeable for Common
Stock (A) in connection with any borrowings, direct or indirect, from financial
institutions by the Company, whether or not presently authorized, including any
type of loan or payment evidenced by any type of debt instrument, (B) to vendors
or customers or to other persons in similar commercial situations with the
Company if such issuance is approved by the Board of Directors or (C) in
connection with obtaining lease financing, whether issued to a lessor, guarantor
or other person.

                        (e) The right of first refusal set forth in this Section
2.4 may not be assigned or transferred, except, other than with respect to a
direct competitor of the Company, as reasonably determined by the Company, that
(i) such right is assignable by each Major Investor to any wholly owned
subsidiary or parent of, or to any corporation or entity that is, within the
meaning of the Act, controlling, controlled by or under common control with, any
such Major Investor, and (ii) such right is assignable to a transferee or
assignee who holds after such transfer at least Eight Hundred Thousand (800,000)
shares of Registrable Securities (subject to appropriate adjustment for any
Recapitalization).

        3. MISCELLANEOUS.

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

                3.2. GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.

                3.3. 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.

                3.4. 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.

                                       15
<PAGE>   16

                3.5. NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given (i) upon personal delivery to the party to be notified; or
(ii) by deposit with an overnight delivery service or with the United States
Post Office, by certified mail, postage prepaid, and addressed to the party to
be notified at the address indicated for such party on the signature page
hereof, or at such other address as such party may designate by ten (10) days'
advance written notice to the other parties.

                3.6. 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.

                3.7. AMENDMENTS AND WAIVERS. Any term of Section 1 of this
Agreement may be amended and the observance of any term of Section 1 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,
the holders of a majority of the then-outstanding Registrable Securities subject
to or enjoying the rights under the provisions being amended or waived, and the
holders of at least two-thirds (2/3) of the then-outstanding shares of Common
Stock issued or issuable upon conversion of the Series C Preferred Stock subject
to or enjoying the rights under the provisions being amended or waived. Any term
of Section 2 of this Agreement may be amended and the observance of any term of
Section 2 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, the holders of a majority of the then-outstanding shares
of Common Stock issued or issuable upon conversion of the Series B Preferred
Stock, Series C Preferred Stock and Series D Preferred Stock, and the holders of
at least two-thirds (2/3) of the then-outstanding shares of Common Stock issued
or issuable upon conversion of the Series C Preferred Stock. Any term of Section
3 of this Agreement may be amended and the observance of any term of Section 3
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, the holders of a majority of the Registrable Securities then
outstanding, and the holders of at least two-thirds (2/3) of the
then-outstanding shares of Common Stock issued or issuable upon conversion of
the Series C Preferred Stock. Any amendment or waiver effected in accordance
with this Section 3.7 shall be binding upon each holder of any Registrable
Securities then outstanding, each future holder of all such Registrable
Securities, and the Company.

                3.8. 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.

                3.9. AGGREGATION OF STOCK. All shares of Registrable Securities
held or acquired by affiliated or associated entities or persons shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.

                                       16
<PAGE>   17

                3.10. AMENDMENT OF PRIOR AGREEMENT AND WAIVER OF RIGHT OF FIRST
REFUSAL. Effective upon the later of (i) the Closing (as defined in the Series D
Agreement) and (ii) the execution and delivery of this Agreement by the Company,
the Founder and Existing Investors holding at least that number of Registrable
Securities (as defined in the Prior Agreement) required to amend the Prior
Agreement pursuant to Section 3.7 thereof, the Prior Agreement shall be amended
and restated in its entirety as set forth herein. Effective upon the execution
and delivery of this Agreement by the Company and Existing Investors holding at
least that number of Registrable Securities (as defined in the Prior Agreement)
required to waive the provisions of Section 2.4 of the Prior Agreement pursuant
to Section 3.7 thereof, the Major Investors hereby waive any right to receive
notice of, and to participate in, the sale by the Company of (i) any shares of
Series D Preferred Stock pursuant to the Series D Agreement and (ii) any other
securities of the Company sold prior to the Closing (as defined in the Series D
Agreement).

                3.11. 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.

                                       17
<PAGE>   18

                                                      Third Amended and Restated
                                                     Investors' Rights Agreement

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

SABA SOFTWARE, INC.

By:
   ----------------------------------
   Babak Yazdani, President

Address: 2400 Bridge Parkway
         Redwood Shores, CA 94065

FOUNDER:

By:
   ----------------------------------
   Babak Yazdani

INVESTORS:

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

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

Address:
        -----------------------------

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

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

<PAGE>   19

                                                      Third Amended and Restated
                                                     Investors' Rights Agreement

                                   Schedule A

                              Schedule of Investors

Kamyar Kaviani
Mohammad J. Kaviani
Farzin Arsanjani
Patrick Bischoff
Gaurav Mehra
Brett Newbold
Abraham Kleinfeld
Kaveh Chehrehsa
Wayne A. Merrick
Atri Chatterjee
Richard Beard

Sequoia Capital VIII
Sequoia International Technology Partners VIII
Sequoia International Technology Partners VIII (Q)
CMS Partners LLC
Sequoia 1997
Klaus Murko
Axel Doehner
Clark Callander
Nick Zaldastani
Benigna Kirsten
Joachim R. Kirsten
Larry Solomon
Baum Family Trust
Broadview Associates
David Lamond
Stuart Rudick
Nina Bischoff
Ludwig Schloesser
Hans Christoph von Mitschke-Collande
Dieter Bischoff
Marc Benioff
John Martin
Christopher von Mitschke-Collande
Uwe Fischer
David C. Martin
David C. and Kim S. Martin
Grant Ricketts
Mark Hoefig
Andrew Loveless
Mindful Partners L.P.
Stuart Rudick cust Tmima Rudick
Martin Rudick

<PAGE>   20

Marie Codling
Ed Ott

Omega Ventures III, L.L.C.
RS & Co. Offshore Omega Ventures III
Omega Bayview, L.L.C.
Crossover Fund II, L.P.
Tullius Partners, LLC
Sequoia Capital Franchise Fund
Sequoia Capital Franchise Partners
Comdisco, Inc.
Robert or Martha A. Cohn, TTEES, The Wellington Trust U/A/D 1-30-86
Stuart Jacobson
David Lamond
Patrick Bischoff
David C. Martin
Carola Stroehlein
John Martin
Christopher von Mitschke-Collande
Mindful Partners L.P.
Stuart Rudick
The Hollis Trust, Nathaniel de Rothschild Trustee
Nathaniel de Rothschild
Amitabh Shukla
Janet McCabe
Clark Callander
Peter J. Mooney as nominee for the Broadview Partners Group

Crosslink Omega Ventures III, L.L.C.
Crosslink Offshore Omega Ventures III
Omega Bayview, L.L.C.
Crosslink Crossover Fund III, L.P.
Sequoia Capital VIII
Sequoia International Technology Partners VIII
Sequoia International Technology Partners VIII(Q)
CMS Partners LLC
Sequoia Capital Franchise Fund
Sequoia Capital Franchise Partners
Comdisco, Inc.
Robert or Martha A. Cohn, TTEES, The Wellington Trust U/A/D 1-30-86
Stuart L. Rudick
Delaware Charter Guarantee & Trust Company TTEE FBO Stuart Rudick GTC IRA
    Rollover
Stuart Rudick Cust. Tmima Rudick CAUTMA Until Age 18
Mindful Partners, L.P.
The Hollis Trust, Nathaniel de Rothschild Trustee
Nathaniel de Rothschild
London Pacific Life & Annuity Company

<PAGE>   21

                                                      Third Amended and Restated
                                                     Investors' Rights Agreement

Goldman Sachs Group
State Street Bank and Trust Company as Trustee for Northrup Grumman Corporation
    Master Trust
Upstart Communications, Inc.
Howard Marc Block
Tim Crossely
Philip Brook Manville
Jeffrey S. Milum
Daniel H. Case, III
Joseph B. Costello

<PAGE>   22

                               SABA SOFTWARE, INC.

                               AMENDMENT NO. 1 TO
             THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT

                THIS AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED INVESTORS'
RIGHTS AGREEMENT (the "Amendment") is made as of _______________, 2000, by and
between Saba Software, Inc., a Delaware corporation (the "Company"), certain
holders of capital stock of the Company (the "Existing Investors") and General
Electric Company, a New York corporation acting through its Power Systems
business unit (the "Warrantholder").

                                    RECITALS

                WHEREAS, each of the Existing Investors holds that number of
shares of Common Stock, Series B Preferred Stock, Series C Preferred Stock and
Series D Preferred Stock of the Company and/or shares of Common Stock issued
upon conversion thereof set forth beneath such Existing Investor's name on the
signature page hereto, and possesses registration rights, information rights,
rights of first refusal, and other rights pursuant to the Third Amended and
Restated Investors' Rights Agreement, dated as of November 10, 1999 (the
"Investors' Rights Agreement");

                WHEREAS, the Warrantholder has been issued a warrant (the
"Warrant") to purchase a certain number of shares of Common Stock of the Company
(the "Warrant Shares") pursuant to that certain Warrant to Purchase Shares of
Common Stock of Saba Software, Inc. dated as of December 30, 1999 (the "Warrant
Agreement");

                WHEREAS, the Existing Investors are holders of a majority of the
outstanding Registrable Securities (as defined in the Investors' Rights
Agreement) and the Existing Investors are the holders of at least two-thirds of
the outstanding shares of Common Stock issued or issuable upon conversion of the
Series C Preferred Stock of the Company currently outstanding;

                WHEREAS, the Company and such Existing Investors desire to amend
the Investors' Rights Agreement as provided herein; and

                NOW, THEREFORE, in consideration of the mutual premises and
covenants set forth herein, the Existing Investors and the Company hereby agree
that the Investors' Rights Agreement shall be amended as set forth herein, and
the parties hereto further agree as follows:

1. Amendment of Definition of "Registrable Securities". Section 1.1(g) of the
Investors' Rights Agreement is hereby amended to read as follows:

<PAGE>   23

        (g) The term "Registrable Securities" means (i) the Common Stock
        issuable or issued upon conversion of the Series A Preferred Stock,
        Series B Preferred Stock, Series C Preferred Stock or Series D Preferred
        Stock, (ii) the Founder's Shares, (iii) solely for purposes of Sections
        1 and 3 of the Agreement, the Common Stock issued upon exercise of that
        certain Warrant to Purchase Shares of Common Stock of Saba Software,
        Inc., by and between the Company and General Electric Company acting
        through its Power Systems business unit and dated as of December 30,
        1999 (the "Warrant Shares") and (iv) 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 shares referenced in (i), (ii) or (iii) above, excluding in all
        cases, however, any Registrable Securities that have been sold by a
        person in a transaction in which his or her rights under this Section 1
        are not assigned or that have been sold by a person pursuant to a
        registration statement under the Act covering such Registrable
        Securities that has been declared effective by the SEC or in an open
        market transaction under Rule 144 of the Act. Notwithstanding anything
        to the contrary set forth in this Section 1.1(g), neither the Common
        Stock issuable or issued upon conversion of the Series A Preferred Stock
        or the Founder's Shares (or any shares of Common Stock otherwise deemed
        "Registrable Securities" with respect thereto pursuant to clause (iv) of
        this Section 1.1(g)) shall be deemed Registrable Securities and the
        holders thereof shall not be deemed Holders for the purposes of Section
        1.2, 1.6, 1.12, and 1.14. Notwithstanding anything to the contrary set
        forth in this Section 1.1(g), neither the Warrant Shares nor any shares
        of Common Stock otherwise deemed "Registrable Securities" with respect
        thereto pursuant to clause (iv) of this Section 1.1(g) shall be deemed
        Registrable Securities and the holders thereof shall not be deemed
        Holders for the purposes of (i) Section 1.14, and (ii) determining
        whether the Company is required to effect a registration or file a
        registration statement pursuant to Section 1.2 or Section 1.12.

2. Amendment of Underwriting Requirements for "Demand" Registrations. The
penultimate sentence of Section 1.2(b) of the Investors' Rights Agreement is
hereby amended to read as follows:

        Notwithstanding any other provision of this Section 1.2, if the
        underwriter advises the Initiating Holders in writing that marketing
        factors require a limitation of the number of shares to be underwritten,
        then the Initiating Holders shall so advise all Holders of Registrable
        Securities which would otherwise be underwritten pursuant hereto, and
        the number of shares of Registrable Securities that may be included in
        the underwriting shall be allocated among all Holders thereof, including
        the Initiating Holders, in proportion (as nearly as practicable) to the
        amount of Registrable Securities of the Company owned by each Holder;
        provided, however, that the number of shares of Registrable Securities
        to be included in such underwriting shall not be reduced unless all
        other securities are first entirely excluded from the underwriting;
        provided, further, that the number of shares of Registrable Securities
        to be included in such underwriting (excluding any Warrant Shares or
        other securities issuable upon the exercise of warrants or options
        granted to vendors or customers of the Company ("Vendor/Customer
        Shares") which are entitled to be included in such underwriting) shall
        not be reduced unless the Warrant Shares and Vendor/Customer Shares are
        first entirely excluded from such underwriting.

3. Amendment of Underwriting Requirements for "Piggy-Back" Registration. Section
1.8 of the Investors' Rights Agreement is hereby amended to read as follows:

        1.8. UNDERWRITING REQUIREMENTS. In connection with any offering
        involving an underwriting of shares of the Company's capital stock, the
        Company shall not be required

                                       2
<PAGE>   24

        under Section 1.3 to include any of the Holders' securities in such
        underwriting unless they accept the terms of the underwriting as agreed
        upon between the Company and the underwriters selected by it and then
        only in such quantity as the underwriters determine in their sole
        discretion will not, jeopardize the success of the offering by the
        Company. If the total amount of securities, including Registrable
        Securities, requested by stockholders to be included in such offering
        exceeds the amount of securities sold other than by the Company that the
        underwriters determine in their sole discretion is compatible with the
        success of the offering, then the number of shares of Holders'
        securities to be included in such offering shall be reduced in such
        manner as the Company and the underwriters determine to permit the
        success of such offering (the securities so included to be apportioned
        pro rata among the selling stockholders according to the total amount of
        securities entitled to be included therein owned by each selling
        stockholder or in such other proportions as shall mutually be agreed to
        by such selling stockholders) but in no event shall (i) the amount of
        securities of the selling Holders of Registrable Securities included in
        the offering be reduced below thirty percent (30%) of the total amount
        of securities included in such offering, unless such offering is the
        initial public offering of the Company's securities in which case the
        selling stockholders may be excluded if the underwriters make the
        determination described above and no other stockholders' securities are
        included, (ii) notwithstanding clause (i) above and except as provided
        in clause (iii) below, any shares being sold by a stockholder exercising
        a demand registration right similar to that granted in Section 1.2 be
        excluded from such offering, (iii) the number of shares of Registrable
        Securities to be included in such underwriting (excluding any Warrant
        Shares or Vendor/Customer Shares which are entitled to be included in
        such underwriting), be reduced unless the Warrant Shares and
        Vendor/Customer Shares are first entirely excluded from such
        underwriting, and (iv) the number of shares of Registrable Securities to
        be included in such underwriting (excluding any Founder's Shares,
        Warrant Shares and Vendor/Customer Shares) be reduced unless the
        Founder's Shares are first entirely excluded from such underwriting. For
        purposes of the preceding parenthetical concerning apportionment, for
        any selling stockholder which is a holder of Registrable Securities and
        which is a partnership or corporation, the partners, retired partners
        and stockholders of such holder, 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.

4. Amendment of Underwriting Requirements for "Form S-3" Registrations. Section
1.12(b) of the Investors' Rights Agreement is hereby amended by adding the
following sentence to the end of such Section 1.12(b):

        Notwithstanding any other provision of this Section 1.12, if the
        underwriter of shares to be registered and sold pursuant to this Section
        1.12 advises, in writing, the Holders desiring to participate in such
        registration that marketing factors require a limitation of the number
        of shares to be underwritten, then the number of shares of Registrable
        Securities that may be included in the underwriting shall be allocated
        among all Holders thereof, including the Holders initiating the
        registration request hereunder, in proportion (as nearly as practicable)
        to the amount of Registrable Securities of the Company owned by each
        Holder; provided, however, that the number of shares of Registrable
        Securities to be included in such underwriting (excluding any Warrant
        Shares or Vendor/Customer Shares which are entitled to be included in
        such underwriting) shall not be reduced unless the Warrant Shares and
        Vendor/Customer Shares are first entirely excluded from such
        underwriting.

                                       3
<PAGE>   25

5. Agreement to be Bound. Upon execution of this Amendment, the Warrantholder
shall be deemed to be a party to the Investors' Rights Agreement and
Warrantholder agrees to be subject to the terms and conditions thereof.

6. Interpretation of Amendment. This Amendment shall be considered a part of and
construed in conjunction with the Investors' Rights Agreement. In the event of
any inconsistency or conflict between the Investors' Rights Agreement and this
Amendment, the terms, conditions and provisions of this Amendment shall govern
and control.

7. Continuance of Investors' Rights Agreement. Except as expressly modified by
this Amendment, the Investors' Rights Agreement will continue in full force and
effect in accordance with its terms.

8. Miscellaneous.

        8.1 Amendment of Investors' Rights Agreement. Effective upon the
execution and delivery of this Amendment by the Company, the Warrantholder and
the Existing Investors, the Investors' Rights Agreement shall be amended as
herein provided pursuant to Section 3.7 of the Investors' Rights Agreement. This
Amendment is entered into on behalf of all Investors (as defined in the
Investors' Rights Agreement) and shall be binding upon each holder of any
Registrable Securities currently outstanding, each future holder of all such
Registrable Securities, the Warrantholder and the Company.

        8.2 Governing Law. This Amendment shall be governed by and construed
under the laws of the State of California, as applied to agreements among
California residents entered into and to be performed entirely within
California.

        8.3 Counterparts. This Amendment 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.

        8.4 Entire Agreement. The Investors' Rights Agreement and this Amendment
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof. All previous discussions and
agreements with respect to such subject matter are superseded by the Investors'
Rights Agreement and this Amendment.

                                      * * *

                                       4
<PAGE>   26

       Amendment No. 1 to Third Amended and Restated Investors' Rights Agreement

        IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.

COMPANY:

Saba Software, Inc.

By:
   ----------------------------------
   Babak Yazdani, President

WARRANTHOLDER:

General Electric Company

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

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

Its:
    ---------------------------------

EXISTING INVESTOR:

Babak Yazdani
(7,000,000 shares of Common Stock)

By:
   ----------------------------------
   Babak Yazdani

<PAGE>   27

       Amendment No. 1 to Third Amended and Restated Investors' Rights Agreement

EXISTING INVESTORS:

Sequoia Capital VIII
(5,177,822 shares of Series B Preferred Stock)
(594,062 shares of Series C Preferred Stock)
(282,286 shares of Series D Preferred Stock)

Sequoia International Technology Partners VIII
(65,701 shares of Series B Preferred Stock)
(7,538 shares of Series C Preferred Stock)
(3,573 shares of Series D Preferred Stock)

Sequoia International Technology Partners VIII (Q)
(342,788 shares of Series B Preferred Stock)
(39,329 shares of Series C Preferred Stock)
(18,643 shares of Series D Preferred Stock)

By: SC VIII Management LLC, a California limited
liability partner
Its: General Partner

By:
   ----------------------------------
   Managing Member

CMS Partners LLC
(114,263 shares of Series B Preferred Stock)
(13,109 shares of Series C Preferred Stock)
(6,214 shares of Series D Preferred Stock)

Sequoia 1997
(12,569 shares of Series B Preferred Stock)
(1,442 shares of Series C Preferred Stock)

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

Sequoia Capital Franchise Fund
(947,168 shares of Series C Preferred Stock)
(465,569 shares of Series D Preferred Stock)

<PAGE>   28

       Amendment No. 1 to Third Amended and Restated Investors' Rights Agreement

Sequoia Capital Franchise Partners
(167,147 shares of Series C Preferred Stock)
(63,487 shares of Series D Preferred Stock)

By: SCFF Management, LLC, a Delaware limited liability company

Its: General Partner

By:
   ----------------------------------
   Managing Member

<PAGE>   29

       Amendment No. 1 to Third Amended and Restated Investors' Rights Agreement

EXISTING INVESTORS:

Omega Ventures III, L.L.C.
(677,806 shares of Series C Preferred Stock)

RS & Co. Offshore Omega Ventures III
(1,056,970 shares of Series C Preferred Stock)

By: RS Omega III Holdings, L.L.C.
Its: Authorized Signatory

By:
   ----------------------------------
   Managing Member

Omega Bayview, L.L.C.
(93,448 shares of Series C Preferred Stock)
(23,522 shares of Series D Preferred Stock)

By:
   ----------------------------------
   Authorized Signatory

Crossover Fund II, L.P.
(173,526 shares of Series C Preferred Stock)

By:  Crossover Investment Management, L.L.C.
Its:  General Partner

By:
   ----------------------------------
    Managing Member

Crosslink Omega Ventures III, L.L.C.
(170,612 shares of Series D Preferred Stock)

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

Crosslink Offshore Omega Ventures III
(266,051 shares of Series D Preferred Stock)

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

<PAGE>   30

       Amendment No. 1 to Third Amended and Restated Investors' Rights Agreement

Crosslink Crossover Fund III, L.P.
(43,678 shares of Series D Preferred Stock)

By:
   ----------------------------------<PAGE>   1

                                                                    EXHIBIT 10.6

                               SABA SOFTWARE, INC.

                       RESTRICTED STOCK PURCHASE AGREEMENT

                THIS RESTRICTED STOCK PURCHASE AGREEMENT (the "Agreement") is
entered into as of ______________, by and between Saba Software, Inc., a
Delaware corporation (the "Company"), and _________________ ("Recipient").

                               W I T N E S S E T H

                WHEREAS, the Company regards Recipient as a valuable contributor
to the Company and has determined that it would be in the interest of the
Company and its stockholders to sell the Stock (as defined below) provided for
in this Agreement to Recipient as an incentive for continued service with the
Company and increased achievements in the future by Recipient;

                NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties to this Agreement hereby agree as follows:

                                A G R E E M E N T

                1. Restricted Stock Purchase.

                        (a) Contemporaneously with the execution of this
Agreement, the Company will issue and sell to Recipient ___________ shares of
Common Stock, par value $0.001 per share, of the Company (the "Stock") for a
consideration of $___________ per share (the "Purchase Price"). Payment for the
Stock in the amount of the Purchase Price multiplied by the number of shares
issued hereunder shall be made to the Company upon execution of this Agreement.
Such payment shall be made in cash, by check or wire transfer payable to the
Company, by execution of a promissory note substantially in the form attached
hereto as Exhibit A (the "Note"), or any combination of the foregoing. Stock
certificates evidencing the Stock will be retained by the Company, accompanied
by blank stock powers executed by Recipient, for the period during which the
Stock constitutes Restricted Stock (as defined below) pursuant to the terms of
Sections 2, 3 and 4 hereof.

                        (b) All shares of Stock issued hereunder shall be deemed
issued to Recipient as fully paid and nonassessable shares, and Recipient shall
have all rights of a stockholder with respect thereto, including the right to
vote, receive dividends (including stock dividends), participate in stock splits
or other recapitalizations, and exchange such shares in a merger, consolidation
or other reorganization. The term "Stock," in addition to the shares purchased
pursuant to this Agreement, also refers to all securities received in
replacement of the Stock, as a stock dividend or as a result of any stock split,
recapitalization, merger, reorganization, exchange or the like, and all new,
substituted or additional securities or other properties to which Recipient is
entitled by reason of Recipient's ownership of the Stock.

                                       1
<PAGE>   2

                2. Restrictions.

                        (a) No Stock issued to the Recipient hereunder shall be
sold, transferred by gift, pledged, hypothecated, or otherwise transferred or
disposed of by the Recipient prior to the date when the Recipient shall become
vested in such Stock pursuant to Section 3 or 4 hereof, and such Stock shall
constitute "Restricted Stock" until such date. Any attempt to transfer Stock in
violation of this Section 2 shall be null and void and shall be disregarded by
the Company.

                        (b) In addition, Restricted Stock shall be subject to a
repurchase option in favor of the Company (the "Repurchase Option"). The
Repurchase Option shall be subject to the following terms and conditions:

                                (i) In the event of the voluntary or involuntary
termination of Recipient as an employee of the Company for any reason, with or
without cause (including death or disability), the Company shall, upon the date
of such termination, have an irrevocable, exclusive option for a period of
ninety (90) days from such date to repurchase any or all Restricted Stock from
Recipient or any person receiving the Restricted Stock by operation of law of
other involuntary transfer, at the original Purchase Price for the Restricted
Stock. The Repurchase Option may be assigned by the Company to any third person
or entity.

                                (ii) The Repurchase Option shall be exercised by
written notice by the Company or its assignee to Recipient or his or her
executor and, at the Company's or its assignee's option, by delivery to the
Recipient or his or her executor, with such notice, of (A) a check in the amount
of the Purchase Price for the Restricted Stock being repurchased, (B) in the
event that Recipient is indebted to the Company or its assignee, by cancellation
by the Company or its assignee of an amount of such indebtedness equal to the
Purchase Price for the Restricted Stock being repurchased, or (C) by a
combination of (A) and (B) so that the combined payment and cancellation of
indebtedness equals such Purchase Price. Upon delivery by the Company or its
assignee of such notice and payment of the Purchase Price, the Company or its
assignee shall become the legal and beneficial owner of the Restricted Stock
being repurchased and all rights and interest therein or related thereto, and
the Company shall have the right to transfer to its or its assignee's own name
the number of shares of Restricted Stock being repurchased by the Company or its
assignee, without further action by Recipient.

                        (c) For purposes of facilitating the enforcement of the
provisions of this Section 2, Recipient agrees, immediately upon receipt of the
certificate(s) for the Stock, to deliver such certificate(s), together with an
Assignment Separate from Certificate, in substantially the form of that attached
hereto as Exhibit B, executed in blank by Recipient and Recipient's spouse (if
required for transfer) with respect to each such stock certificate, to the
Secretary or Assistant Secretary of the Company, or their designee, to hold in
escrow for so long as such Stock remains Restricted Stock, with the authority to
take all such actions and to effectuate all such transfers and/or releases as
may be necessary or appropriate to accomplish the objectives of this Agreement
in accordance with the terms hereof. Recipient hereby acknowledges that the
appointment of the Secretary or Assistant Secretary of the Company (or their
designee) as the escrow holder hereunder with the stated authorities is a
material inducement to the Company to make this Agreement and that such
appointment is coupled with an interest and is accordingly irrevocable.
Recipient agrees that such escrow holder shall not be

                                       2
<PAGE>   3

liable to any party hereto (or to any other party) for any actions or omissions
unless such escrow holder is grossly negligent relative thereto. The escrow
holder may rely upon any letter, notice or other document executed by any
signature purported to be genuine and may resign at any time.

                3. Vesting. For purposes of this Agreement, the term "vest"
shall mean with respect to any share of the Stock that such share is no longer
Restricted Stock subject to the restrictions on transfer set forth in Section 2
and that such share is released from the Repurchase Option. If Recipient would
become vested in any fraction of a share of Stock on any date, such fractional
share shall not vest and shall remain Restricted Stock until the Recipient
becomes vested in the entire share. The shares of Stock subject to this
Agreement shall vest as follows:

                        (a) ________________ percent (___%) of the shares of
Stock subject to this Agreement shall vest on ________________; and

                        (b) the remaining ______________ percent (___%) of the
shares of Stock subject to this Agreement shall vest in ________________
installments commencing on ________________ and continuing quarterly thereafter
until all shares of Stock have become fully vested.

        Notwithstanding the vesting schedule set forth in this Section 3, upon
termination without Cause (as defined below) by the Company of Recipient's
employment with the Company, an additional fifty percent (50%) of the shares of
Stock or, if less, all of the remaining shares of Restricted Stock, shall
immediately vest and thereby be released from the Repurchase Option. For the
purpose of this Section 3, "Cause" shall mean: (i) any act or failure to act by
Recipient that was performed in bad faith and to the detriment of the Company;
(ii) recipient refuses or fails to act in accordance with any lawful, reasonable
direction or order of the Board of Directors of the Company and such refusal or
failure has a materially adverse effect on the Company's business; (iii)
Recipient exhibits willful misconduct or dishonesty in the management of the
affairs of the Company; or (iv) Recipient is convicted of a felony and such
conviction has a material adverse effect on the Company or on Recipient's
ability to serve as an employee of the Company.

                4. Corporate Transaction.

                        (a) For purposes of this Section 4, a "Corporate
Transaction" shall include any of the following stockholder-approved
transactions to which the Company is a party:

                                (i) a merger or consolidation in which the
Company is not the surviving entity, except for (1) a transaction the principal
purpose of which is to change the state of the Company's incorporation, or (2) a
transaction in which the Company's stockholders immediately prior to such merger
or consolidation hold (by virtue of securities received in exchange for their
shares in the Company) securities of the surviving entity representing more than
fifty percent (50%) of the total voting power of such surviving entity
immediately after such transaction;

                                (ii) the sale, transfer or other disposition of
all or substantially all of the assets of the Company unless the Company's
stockholders immediately prior to such

                                       3
<PAGE>   4

sale, transfer or other disposition hold (by virtue of securities received in
exchange for their shares in the Company) securities of the purchaser or other
transferee representing more than fifty percent (50%) of the total voting power
of such entity immediately after such transaction; or

                                (iii) any reverse merger in which the Company is
the surviving entity but in which the Company's stockholders immediately prior
to such merger do not hold (by virtue of their shares in the Company) securities
of the surviving entity held immediately prior to such transaction representing
more than fifty percent (50%) of the total voting power of the surviving entity
immediately after such transaction.

                        (b) In the event of any Corporate Transaction, all of
the Restricted Stock shall, immediately prior to the specified effective date of
the Corporate Transaction, vest and thereby be released from the Repurchase
Option.

                5. Withholding of Taxes. Recipient shall provide the Company
with a copy of any timely election made pursuant to Section 83(b) of the
Internal Revenue Code or similar provision of state law (collectively, an "83(b)
Election"), a form of which election is attached hereto as Exhibit C. If
Recipient makes a timely 83(b) Election, Recipient shall immediately pay the
Company the amount necessary to satisfy any applicable federal, state, and local
income and employment tax withholding requirements. If Recipient does not make a
timely 83(b) Election, Recipient shall, either at the time that the restrictions
lapse under this Agreement or at the time withholding is otherwise required by
any applicable law, pay the Company the amount necessary to satisfy any
applicable federal, state, and local income and employment tax withholding
requirements.

                6. Additional Securities. Any securities received as the result
of ownership of Restricted Stock (hereinafter called "Additional Securities"),
including, without limitation, warrants, options and securities received as a
stock dividend or stock split, or as a result of a recapitalization or
reorganization, shall be retained by the Company in the same manner and subject
to the same conditions as the Restricted Stock with respect to which they were
issued. Recipient shall be entitled to direct the Company to exercise any
warrant or option received as Additional Securities upon supplying the funds
necessary to do so, in which event the securities so purchased shall constitute
Additional Securities, but the Recipient may not direct the Company to sell any
such warrant or option. If Additional Securities consist of a convertible
security, Recipient may exercise any conversion right, and any securities so
acquired shall be deemed Additional Securities. Additional Securities shall be
subject to the provisions of Sections 2,3 and 4 above in the same manner as the
Restricted Stock.

                7. Investment Representations.

                        (a) This Agreement is made in reliance upon the
Recipient's representation to the Company, which by its acceptance hereof the
Recipient hereby confirms, that the shares of Stock to be received by Recipient
will be acquired for investment for his or her own account, not as a nominee or
agent, and not with a view to the sale or distribution of any part thereof, and
that he or she has no present intention of selling, granting participation in,
or otherwise distributing the same, but subject nevertheless to any requirement
of law that the disposition of his or her property shall at all times be within
his or her control.

                                       4
<PAGE>   5

                        (b) The Recipient understands that the Stock is not
registered under the Securities Act of 1933, as amended (the "1933 Act"), on the
basis that the sale provided for in this Agreement and the issuance of
securities hereunder is exempt from registration under the 1933 Act pursuant to
Section 4(2) thereof, and that the Company's reliance on such exemption is
predicated on the Recipient's representations set forth herein. The Recipient
realizes that the basis for the exemption may not be present if, notwithstanding
such representations, the Recipient has in mind merely acquiring shares of the
Stock for a fixed or determinable period in the future, or for a market rise, or
for sale if the market does not rise. The Recipient does not have any such
intention.

                        (c) The Recipient understands that the Stock may not be
sold, transferred, or otherwise disposed of without registration under the 1933
Act or an exemption therefrom, and that in the absence of an effective
registration statement covering the Stock or an available exemption from
registration under the 1933 Act, the Stock must be held indefinitely. In
particular, the Recipient is aware that the Stock may not be sold pursuant to
Rule 144 or Rule 701 promulgated under the 1933 Act unless all of the conditions
of the applicable Rules are met. Among the conditions for use of Rule 144 is the
availability of current information to the public about the Company. Such
information is not now available, and the Company has no present plans to make
such information available. The Recipient represents that, in the absence of an
effective registration statement covering the Stock, it will sell, transfer, or
otherwise dispose of the Stock only in a manner consistent with its
representations set forth herein and then only in accordance with the provisions
of paragraph 7(d) hereof.

                        (d) The Recipient agrees that in no event will it make a
transfer or disposition of any of the Stock (other than pursuant to an effective
registration statement under the 1933 Act), unless and until (i) the Recipient
shall have notified the Company of the proposed disposition and shall have
furnished the Company with a statement of the circumstances surrounding the
disposition, and (ii) if requested by the Company, at the expense of the
Recipient or transferee, the Recipient shall have furnished to the Company
either (A) an opinion of counsel, reasonably satisfactory to the Company, to the
effect that such transfer may be made without registration under the 1933 Act or
(B) a "no action" letter from the Securities and Exchange Commission to the
effect that the transfer of such securities without registration will not result
in a recommendation by the staff of the Securities and Exchange Commission that
action be taken with respect thereto.

                        (e) The Recipient represents and warrants to the Company
that he or she is an "accredited investor" within the meaning of Securities and
Exchange Commission Rule 501 of Regulation D, as presently in effect and, for
the purpose of Section 25102(f) of the California Corporations Code, he or she
is excluded from the count of "purchasers" pursuant to Rule 260.102.13
thereunder.

                8. Legends; Stop Transfer.

                        (a) All certificates for shares of the Stock shall bear
substantially the following legends:

                                       5
<PAGE>   6

                THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
                FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
                THE SALE OR DISTRIBUTION THEREOF. THESE SECURITIES HAVE NOT BEEN
                REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE
                SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
                OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
                UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
                COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

                THE SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE
                TERMS OF THAT CERTAIN RESTRICTED STOCK PURCHASE AGREEMENT
                BETWEEN THE COMPANY AND THE NAMED SHAREHOLDER. THE SHARES
                REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
                ACCORDANCE WITH SUCH AGREEMENT, A COPY OF WHICH IS ON FILE WITH
                THE SECRETARY OF THE COMPANY.

                        (b) The certificates for shares of the Stock shall also
bear the following legend required by the Bylaws of the Company and any other
legends required by applicable state corporate or securities laws:

                THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
                RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE COMPANY, AS
                PROVIDED IN THE BYLAWS OF THE COMPANY.

                        (c) In addition, the Company shall make a notation
regarding the restrictions on transfer of the Stock in its stockbooks, and
shares of the Stock shall be transferred on the books of the Company only if
transferred or sold pursuant to an effective registration statement under the
1933 Act covering such shares or pursuant to and in compliance with the
provisions of paragraph 6(d) hereof.

                9. NO EFFECT ON TERMS OF EMPLOYMENT. THIS AGREEMENT SHALL NOT
CONFER UPON RECIPIENT ANY RIGHT WITH RESPECT TO CONTINUATION OF RECIPIENT'S
EMPLOYMENT WITH THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH THE RIGHT OF
RECIPIENT OR THE COMPANY TO TERMINATE RECIPIENT'S EMPLOYMENT WITH THE COMPANY AT
ANY TIME FOR ANY REASON WITH OR WITHOUT CAUSE OR CHANGE THE TERMS OF EMPLOYMENT
OF RECIPIENT.

                                       6
<PAGE>   7

                10. Lock-Up Agreement.

                        (a) Agreement. Recipient, if requested by the Company
and the lead underwriter of any public offering of the Common Stock or other
securities of the Company (the "Lead Underwriter"), hereby irrevocably agrees
not to sell, contract to sell, grant any option to purchase, transfer the
economic risk of ownership in, make any short sale of, pledge or otherwise
transfer or dispose of any interest in any Common Stock or any securities
convertible into or exchangeable or exercisable for or any other rights to
purchase or acquire Common Stock (except Common Stock included in such public
offering or acquired on the public market after such offering) during the
180-day period following the effective date of a registration statement of the
Company filed under the Securities Act, or such shorter period of time as the
Lead Underwriter shall specify. Recipient further agrees to sign such documents
as may be requested by the Lead Underwriter to effect the foregoing and agrees
that the Company may impose stop-transfer instructions with respect to such
Common Stock subject until the end of such period. The Company and Recipient
acknowledge that each Lead Underwriter of a public offering of the Company's
stock, during the period of such offering and for the 180-day period thereafter,
is an intended beneficiary of this Section 10.

                        (b) Permitted Transfers. Notwithstanding the foregoing,
Section 10(a) hereof shall not prohibit Recipient from transferring any shares
of Common Stock or securities convertible into or exchangeable or exercisable
for the Company's Common Stock to the extent such transfer is not otherwise
prohibited by this Agreement, either during Recipient's lifetime or on death by
will or intestacy to Recipient's immediate family or to a trust the
beneficiaries of which are exclusively Recipient and/or a member or members of
Recipient's immediate family; provided, however, that prior to any such
transfer, each transferee shall execute an agreement pursuant to which each
transferee shall agree to receive and hold such securities subject to the
provisions of this Section 10. For the purposes of this paragraph, the term
"immediate family" shall mean spouse, lineal descendant, father, mother, brother
or sister of the transferor.

                        (c) No Amendment Without Consent of Underwriter. During
the period from identification as a Lead Underwriter in connection with any
public offering of the Company's Common Stock until the earlier of (i) the
expiration of the lock-up period specified in Section 10(a) hereof in connection
with such offering or (ii) the abandonment of such offering by the Company and
the Lead Underwriter, the provisions of this Section 10 may not be amended or
waived except with the consent of the Lead Underwriter.

                11. California Law. This agreement is to be construed in
accordance with and governed by the internal laws of the State of California as
permitted by Section 1646.5 of the California Civil Code (or any similar
successor provision) without giving effect to any choice of law rule that would
cause the application of the laws of any jurisdiction other than the internal
laws of the State of California to the rights and duties of the parties.

                12. Notice. Any notice required to be given under the terms of
this Agreement shall be addressed to the Company in care of its Secretary at the
office of the Company at 2400 Bridge Parkway, Bldg. 12, Redwood Shores, CA
94065, and any notice to be given to Recipient shall be addressed to him at the
address given by Recipient beneath his or her signature to this Agreement, or
such other address as either party to this Agreement may

                                       7
<PAGE>   8

hereafter designate in writing to the other. Any such notice shall be deemed to
have been duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, registered or certified and deposited (postage or
registration or certification fee prepaid) in a post office or branch post
office regularly maintained by the United States.

                13. Successors. This Agreement shall be binding upon and inure
to the benefit of any successor or successors of the Company. Where the context
permits, "Recipient" as used in this Agreement shall include Recipient's
executor, administrator or other legal representative or the person or persons
to whom Recipient's rights pass by will or the applicable laws of descent and
distribution.

                14. Spousal Consent. Recipient shall cause his or her spouse to
execute a Consent of Spouse in substantially the form of that attached hereto as
Exhibit D concurrently with the execution of this Agreement or, if later, at the
time Recipient becomes married.

                15. California Securities Law. THE SALE OF THE SECURITIES WHICH
ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER
OF CORPORATIONS OF THE STATE OF CALIFORNIA, AND THE ISSUANCE OF SUCH SECURITIES
OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO
SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE
QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS
CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON
SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

                16. Employee and Employment References. References in this
Agreement that imply that the Recipient is an employee of the Company,
including, without limitation, references regarding Recipient's employment with
the Company, shall be deemed to include services provided to the Company by
Recipient in a consulting capacity and, to the extent that Recipient is
providing services in a consulting capacity, shall not be deemed to imply that
Recipient is an employee of the Company.

                IN WITNESS WHEREOF, the parties hereto have duly executed this
Restricted Stock Purchase Agreement as of the date first above written.

SABA SOFTWARE, INC.,                    RECIPIENT:
a Delaware corporation

By:
   ----------------------------------   ----------------------------------------
   Bobby Yazdani, President and Chief
   Executive Officer

                                        Address:

                                       8
<PAGE>   9

                                    EXHIBIT A

                             SECURED, FULL-RECOURSE

                                 PROMISSORY NOTE

$
 -----------                                               ---------------------

                FOR VALUE RECEIVED, the undersigned, _________________
("Maker"), promises to pay to Saba Software, Inc., a Delaware corporation
("Payee"), at 2400 Bridge Parkway, Building 12, Redwood Shores, California
94065, or such other place as Payee may from time to time designate, without
counterclaim, deduction or offset of any kind, in lawful money of the United
States, the principal sum of one hundred forty one thousand seven hundred fifty
dollars ($___________) plus interest thereon, as set forth below.

                1. INTEREST. Interest on the principal sum of this Note shall
accrue at the simple rate of ___% per annum, based on a 365 day year and the
actual number of days elapsed.

                2. PRINCIPAL AND INTEREST PAYMENTS. On each of the first three
(3) twelve (12) month anniversaries of the date of this Note, all accrued
interest on the outstanding principal amount of this Note and principal in the
amount of $___________ shall be due and payable hereunder; provided, that, if
such payment date is not a business day, then payment shall be due on the first
business day following such payment date.

                3. PREPAYMENT.

                        (a) Permissive. This Note may be prepaid in whole or in
part, at any time, without penalty or premium.

                        (b) Mandatory Prepayment. Maker shall be required to
prepay all principal and accrued but unpaid interest due under this Note within
ten (10) business days after a termination for any reason of Maker's employment
with Payee.

                4. APPLICATION OF PAYMENTS. All payments and prepayments
received by Payee shall be applied first to accrued interest, then to other
charges due with respect to this Note or the Pledge Agreement (as defined
below), and then to the unpaid principal balance.

                5. SECURITY. This Note is secured by a Stock Pledge Agreement in
the form attached hereto as Attachment A (the "Pledge Agreement"), encumbering
certain shares of Common Stock of Payee held by Maker, and the proceeds thereof
(the "Collateral").

                                       1
<PAGE>   10

                6. DEFAULT AND REMEDIES.

                        a. Default. Maker will be in default under this Note if
(i) Maker fails to make a payment of principal and/or interest hereunder when
due or declared due, whether at scheduled maturity, by acceleration or
otherwise, within ten (10) business days after receipt of written notice of such
nonpayment; (ii) except as permitted by the Pledge Agreement, Maker agrees to or
does sell, convey, encumber, hypothecate or otherwise alienate the Collateral,
or any part thereof, of any interest therein, or if divested of its title to the
Collateral or any interest therein in any manner or any way, whether voluntarily
or involuntarily, without the prior written consent of Holder, or if any other
person or entity with a security interest in the Collateral exercises or seeks
to exercise the remedies of a secured party with respect to the Collateral; or
(iii) Maker files a petition in bankruptcy, is adjudicated insolvent, petitions
or applies to any tribunal for the appointment of a receiver, custodian, or any
trustee for Maker or commences any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction or any such proceeding has been commenced
against Maker which remains undismissed for a period of sixty (60) days.

                        b. Remedies. Upon Maker's default, Payee may (i) upon
written notice to Maker, declare the entire principal sum and all accrued and
unpaid interest hereunder immediately due and payable and (ii) exercise any and
all of the remedies provided in the Pledge Agreement and applicable law.

                7. MISCELLANEOUS.

                        a. All communications or notices required or given under
this Note shall be given in accordance with the provisions of Section 12(e) of
the Pledge Agreement.

                        b. This Note may be modified only by a written agreement
executed by Maker and Payee.

                        c. This Note shall be governed by California law.

                        d. The terms of this Note shall inure to the benefit of
and bind Maker and Payee and their respective heirs, legal representatives and
successors and assigns.

                        e. Time is of the essence with respect to all matters
set forth in this Note.

                        f. If this Note is destroyed, lost or stolen, Maker will
deliver a new note to Payee on the same terms and conditions as this Note with a
notation of the unpaid principal and accrued and unpaid interest in substitution
of the prior Note. Payee shall furnish to Maker reasonable evidence that the
Note was destroyed, lost or stolen and any security or indemnity that may be
reasonably required by Maker in connection with the replacement of this Note.

                                       2
<PAGE>   11

                IN WITNESS WHEREOF, Maker has executed this Note as of the date
and year first above written.

                                        MAKER:

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

                                       3
<PAGE>   12

                                  ATTACHMENT A

                             STOCK PLEDGE AGREEMENT

        THIS STOCK PLEDGE AGREEMENT (the "Agreement") is entered into as of
___________, by and between ___________ ("Debtor") and Saba Software, Inc., a
Delaware corporation ("Secured Party").

                                    RECITALS

        A. Secured Party has loaned Debtor the principal sum of $___________,
which is evidenced by a promissory note of even date herewith for such principal
amount (the "Note").

        B. As a condition to making of the loan evidenced by the Note, Secured
Party has required that the Note be secured, upon the terms herein provided, by
certain shares of the Common Stock of Secured Party held by Debtor.

        NOW, THEREFORE, in consideration of the foregoing and the further
promises contained herein, Debtor and Secured Party agree as follows:

                                    AGREEMENT

                1. GRANT OF SECURITY INTEREST. To secure full payment and
performance of Debtor's obligations under the Note and each and every obligation
of Debtor under this Agreement (collectively the "Obligations"), when due
(whether at the stated maturity, by acceleration or otherwise), Debtor hereby
pledges the Collateral (defined below in Section 2), and grants a security
interest in the Collateral, to Secured Party.

                2. COLLATERAL. "Collateral" means ___________ shares of the
Common Stock of Secured Party (the "Pledged Stock"), evidenced by Common Stock
Certificate No. ____ (the "Certificate"), duly registered in the name of Debtor,
together with all property rights as may derive from or accrue to the same,
including without limitation, additional shares (whether as a result of stock
splits, stock dividends or otherwise) or replacement securities representing
interests in Secured Party or an affiliate or successor in interest of Secured
Party, and all dividends (whether in cash, stock or other forms) and other
income or proceeds derived therefrom or receivable or received on the sale,
exchange, collection or other disposition thereof, whether voluntary or
involuntary, and distributions with respect thereto. For purposes of this
Agreement, the term "proceeds" includes whatever is receivable or received when
Collateral or proceeds is sold, collected, exchanged, or otherwise disposed of,
whether such disposition is voluntary or involuntary.

                3. DELIVERY OF COLLATERAL. On or prior to the execution of this
Agreement, Debtor has delivered or will deliver the Certificate, together with a
stock power duly executed in blank by Debtor to the Secured Party for purposes
of perfecting Secured Party's security interest hereunder and in accordance with
the terms of this Agreement. Upon payment from time to time of the principal
amount of the Note, or any portion thereof, Secured Party shall, at Debtor's

                                       1
<PAGE>   13

request, take all steps reasonably necessary to cause the redelivery to Debtor
of such portion of the Collateral corresponding to such payment.

                4. STOCK ADJUSTMENTS. Secured Party shall have the right to
collect and hold any shares of stock or securities of any class or kind
distributed on account of the Pledged Stock by reason of any stock dividend,
distribution, reclassification or other change in the capital structure of
Secured Party, all of which shall be delivered by Debtor to Secured Party and
held by Secured Party in accordance with the terms of this Agreement.

                5. COVENANTS OF DEBTOR. In addition to other covenants of Debtor
contained in this Agreement, Debtor shall:

                                (i) from time to time promptly execute and
deliver to Secured Party all such stock powers, assignments, financing
statements and other instruments or documents as may be necessary in order to
more fully evidence and perfect the security interest of Secured Party in the
Collateral and promptly furnish Secured Party with any information or writings
which Secured Party may reasonably request concerning the Collateral;

                                (ii) appear in and defend any action or
proceeding which may affect Debtor's title to or Secured Party's interest in the
Collateral; and

                                (iii) keep the Collateral free of all levies and
security interests or other liens or changes except those approved in writing by
Secured Party.

                6. DEBTOR'S RIGHTS IN COLLATERAL.

                        (a) The parties agree that the grant of a security
interest in, and the assignment and pledge of, the Collateral to Secured Party
hereunder is intended solely for the purpose of securing the Obligations.
Accordingly, prior to the occurrence of an Event of Default (as that term is
defined in Section 10) and the exercise of rights and remedies afforded Secured
Party as a result of such Event of Default, and to the extent not inconsistent
with the terms of this Agreement, Debtor will be entitled to exercise rights as
the owner of the Pledged Stock and will be entitled to receive and retain, any
cash distributions or allocations ("Distributions") and to exercise any other
rights appurtenant to the ownership of the Collateral. Without limiting the
generality of the foregoing, prior to the occurrence of an Event of Default,
Debtor will have the sole and absolute right to:

                        (i) vote or exercise any and all other consensual rights
in respect of the Collateral, provided, however, that Debtor may not consent to
any amendment or modification of the Certificate of Incorporation or Bylaws of
Debtor that materially adversely affects Secured Party's interest in the
Collateral (including, without limitation, any amendment or modification
creating additional or different transfer restrictions on the Common Stock of
Debtor in a manner that is different from any other shares of Debtor's Common
Stock); and

                        (ii) receive, retain, use or alienate any Distributions
free and clear of the interest of Secured Party.

                                       2
<PAGE>   14

                        (b) After an Event of Default and the exercise of rights
and remedies by Secured Party, all rights of Debtor to exercise the voting and
other contractual rights which it would otherwise be entitled to exercise
pursuant to this Section 6 and to receive and retain the Distributions which it
would otherwise be authorized to receive and retain under this Section 6 will
cease. Following the occurrence of an Event of Default and pending delivery to
Secured Party of any Distributions, Debtor will hold the same in trust for
Secured Party, free and clear of all liens and claims whatsoever other than the
interest of Secured Party.

                7. REPRESENTATIONS AND WARRANTIES. Debtor represents and
warrants to Secured Party that:

                                (i) The execution, delivery and performance of
this Agreement does not conflict with any law or any agreement or undertaking of
which Debtor is a party or by which Debtor is bound;

                                (ii) Except for the rights of Debtor and Secured
Party, no other person will have any right, title, claim or interest (by way of
security interest or other lien or charge or otherwise) in, against or to the
Collateral; and

                                (iii) All information presently or subsequently
supplied to Secured Party by or on behalf of Debtor with respect to the
Collateral is true and correct.

                8. RIGHTS OF SECURED PARTY.

                        (a) Secured Party, upon ten (10) days written notice to
Debtor if Debtor fails to perform any of its obligations hereunder, may, but
need not, perform such acts to preserve its rights and the value of the
Collateral. Debtor hereby irrevocably appoints Secured Party as Debtor's
attorney-in-fact (which appointment is coupled with an interest) to do any such
act, and to exercise such rights and powers as Debtor might exercise with
respect to the Collateral in connection therewith. No failure to so act by
Secured Party will relieve Debtor of Debtor's duties under this Agreement or in
any way impair or discharge the obligations, and no such failure to act will
result in any liability to Debtor or any third party on the part of Secured
Party.

                        (b) Secured Party does not assume any of the obligations
or liabilities of Debtor arising under any of the Collateral or any agreement in
respect thereto.

                9. CARE OF COLLATERAL.

                        (a) Secured Party will use reasonable care in the
custody and preservation of any Collateral in its possession. The parties
further agree that such care as Secured Party gives to the safekeeping of its
own property of like kind will constitute reasonable care of the Collateral when
in Secured Party's possession; provided, however, that Secured Party will not be
required to make any presentment, demand or protest, or give any notice and need
not take any action to preserve any rights any prior party or any other person
in connection with the Obligations or with respect to the Collateral.

                                       3
<PAGE>   15

                        (b) Secured Party will not be responsible for or have
any liability for the form, legal sufficiency, genuineness, or legal effect of
any signature, description, guaranty, instruction, or document related to the
Collateral.

                        (c) Debtor agrees that Secured Party will not in any way
or manner be liable or responsible for any diminution in the value of the
Collateral resulting from the sale or other disposition of the Collateral at
Debtor's request, or from the failure of Secured Party to sell or consent to the
sale, liquidation, reinvestment or other disposition of the Collateral, or for
any act or default by any bailee, forwarding agency, transfer agent or any
person whomsoever, in connection with the Collateral.

                10. DEFAULT. An "Event of Default" will have occurred if:

                        (a) There is an occurrence of an event of default under
the Note, subject to applicable grace periods, if any; or

                        (b) Debtor breaches any provision of this Agreement, and
such breach continues after written notice from Secured Party for a period of
ten (10) business days or such longer period of time reasonably required to
remedy the breach, provided Debtor promptly commences remedial action with ten
(10) business days of such written notice and thereafter diligently pursues the
remedial action.

                11. REMEDIES.

                        (a) Upon the occurrence of an Event of Default, as
defined in Section 10 above, Secured Party may, at Secured Party's option:

                        (i) exercise with respect to the Collateral all of the
remedies of a secured party under Articles 8 and 9 of the California Commercial
Code (the "Code"). Without limiting the foregoing and subject to subsection (b)
below, Secured Party shall have the right to sell or otherwise dispose of the
Collateral in accordance with the provisions of the Code. At any such sale,
Secured Party shall have the right to purchase all or any part of the Collateral
and may credit bid amounts owing under the Note. In view of the fact that
federal and state securities laws may impose certain restrictions on the method
by which a sale of the Pledged Stock and any other Collateral consisting of
securities may be effected, Debtor agrees that upon the occurrence of an Event
of Default, Secured Party may from time to time attempt to sell all or any part
of the Pledged Stock and any other Collateral consisting of securities by means
of a private placement restricting the prospective purchasers to those who
satisfy the requirements for available exemptions under applicable securities
laws. In so doing, Secured Party may solicit offers to buy the Pledged Stock and
any other Collateral consisting of securities from a limited number of investors
deemed by Secured Party to satisfy those standards. If Secured Party solicits
such offers from not less than three (3) such investors, then the acceptance by
Secured Party of the highest offer(s) obtained therefrom shall be deemed to be a
commercially reasonable method of disposition of the Pledged Stock and any other
Collateral consisting of securities. Debtor further agrees that, to the extent
notice of sale shall be required by law, ten (10) days' prior notice to Debtor
shall constitute reasonable notice. Secured Party shall not be obligated to
proceed with any sale of Collateral regardless of notice of sale having been
given. Nothing herein shall be

                                       4
<PAGE>   16

deemed to limit or restrict Secured Party in disposing of the Collateral in
other commercially reasonable ways;

                        (ii) exercise any and all remedies available under law
or in equity; and

                        (iii) recover from Debtor all costs and expenses,
including attorneys' fees and expenses, incurred by Secured Party in exercising
any right or remedy provided for hereunder or by law, which costs and expenses
are included in the Obligations secured by the Collateral.

                        (b) Nothing herein shall be construed to limit Secured
Party's right to seek a deficiency judgment against Debtor.

                        (c) No delay or omission to exercise any right or remedy
of Secured Party upon a default by Debtor will constitute a waiver of any right
or remedy of Secured Party or be construed as a waiver of any similar default
which occurs later. Debtor waives any right to require Secured Party to proceed
against any other person or to exhaust any Collateral or to pursue any other
remedy in Secured Party's power.

                        (d) It is the intention of the parties that the grant of
the security interest and assignment and pledge of the Collateral to Secured
Party, and the exercise by Secured Party of any right or remedy granted in this
Agreement, is in addition to all other security interests and remedies given to
Secured Party by virtue of any statute or rule of law or any other agreement,
all of which security interests and remedies are cumulative and, to the maximum
extent permitted by applicable law, may be exercised successively and
concurrently without impairing the rights and remedies of Secured Party under
this Agreement.

                12. MISCELLANEOUS.

                        (a) SUCCESSORS. The terms of this Agreement will inure
to the benefit of and bind the parties hereto and their respective successors,
assigns, executors, heirs and legal representatives.

                        (b) ENTIRE AGREEMENT; SEVERABILITY. This Agreement
contains the entire security agreement between Secured Party and Debtor with
respect to the Pledged Stock and may be modified only by a writing signed by
Secured Party and Debtor. If any of the provisions of this Agreement are held
invalid or unenforceable, this Agreement will be construed as if not containing
the invalid or unenforceable provisions.

                        (c) CHOICE OF LAW. This Agreement will be construed in
accordance with and governed by the laws of the State of California.

                        (d) ATTORNEYS' FEES. In any action brought to enforce
the terms of this Agreement, the prevailing party will be reimbursed by the
losing party for its reasonable costs and expenses incurred in such action,
including reasonable attorneys' fees.

                        (e) NOTICES. All notices, requests, demands and other
communications to be given pursuant to the terms of this Agreement shall be in
writing and shall be delivered

                                       5
<PAGE>   17
personally, telecopied or sent by recognized overnight delivery service, and
shall be deemed given when so delivered personally, telecopied or received, as
follows

                        (i) If to Secured Party:

                            Saba Software, Inc.
                            2400 Bridge Parkway, Building 12
                            Redwood Shores, CA 94065

                        (ii) If to Debtor:

                        Any party may change its address or telecopier number by
prior written notice to the other party.

                        (f) TIME. Time is of the essence of each and every
provision of this Agreement.

                        (g) COUNTERPARTS. This Agreement may be executed by
facsimile and in any number of counterparts, and when so executed shall have the
same force and effect as though all signatures appeared on one document.

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.

                                        SECURED PARTY:

                                        SABA SOFTWARE, INC.

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

                                        DEBTOR:

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

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

                                       6
<PAGE>   18

                                    EXHIBIT B

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

                FOR VALUE RECEIVED and pursuant to that certain Restricted Stock
Purchase Agreement between the undersigned ("Recipient") and Saba Software, Inc.
dated __________ ____, 1999 (the "Agreement"), Recipient hereby sells, assigns
and transfers unto _______________ _________________ (_________) shares of
Common Stock of Saba Software, Inc. standing in Recipient's name on the books of
said corporation represented by Certificate No. _________ herewith and does
hereby irrevocably constitute and appoint
_____________________________________________________________ to transfer said
stock on the books of the within-named corporation with full power of
substitution in the premises. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY
THE AGREEMENT AND THE EXHIBITS THERETO.

Dated:__________________, 19___         By:
                                           -------------------------------------

Instruction: Please do not fill in any blanks other than the signature line. The
purpose of this assignment is to enable the Company to exercise its repurchase
option set forth in the Agreement without requiring additional signatures on the
part of Recipient.

                                       1
<PAGE>   19

                       ELECTION UNDER SECTION 83(B) OF THE
                    INTERNAL REVENUE CODE OF 1986, AS AMENDED

                The undersigned taxpayer hereby elects, pursuant to the Internal
Revenue Code, as amended, to include in gross income for 1999 the amount of any
compensation taxable in connection with the taxpayer's receipt of the property
described below:

                1. The name, address, taxpayer identification number and taxable
year of the undersigned are:

                TAXPAYER'S NAME: ___________

                SPOUSE'S NAME:

                TAXPAYER'S SOCIAL SECURITY NO.:

                SPOUSE'S SOCIAL SECURITY NO.:

                TAXABLE YEAR: CALENDAR YEAR

                ADDRESS:

                2. The property which is the subject of this election is:
___________ shares of Common Stock (the "Shares") of Saba Software, Inc., a
Delaware corporation (the "Company").

                3. The Shares were transferred to the undersigned on
_____________.

                4. The Shares are subject to the following restriction: Upon a
termination of the undersigned's employment with the Company, the Company has
the right to repurchase unvested Shares at the original purchase price. The
Shares shall vest, and the Company's repurchase right shall lapse, as to
____________ percent (__%) of the Shares on ______________ and as to
______________ percent (______%) of the Shares in ________________ installments
commencing on _________________.

                5. The fair market value of the property at the time of transfer
(determined without regard to any restriction other than a restriction which by
its terms will never lapse) is: $___________ per Share x ___________ Shares =
$_________________.

                6. The undersigned contributed $___________ per Share x
___________ Shares for the Shares transferred or a total of $_____________. The
undersigned has submitted a copy of this statement to the Company.

                                       1
<PAGE>   20

                The undersigned has submitted a copy of this statement to the
person for whom the services were performed in connection with the undersigned's
receipt of the above-described property. The undersigned taxpayer is the person
performing the services in connection with the transfer of said property.

                The undersigned will file this election with the Internal
Revenue Service office in which he or she files his or her annual income tax
return not later than 30 days after the date of transfer of the property. A copy
of the election also will be furnished to the person for whom the services were
performed. Additionally, the undersigned will include a copy of the election
with his or her income tax return for the taxable year in which property is
transferred. The undersigned understands that this election will also be
effective as an election under California law.

                THE UNDERSIGNED UNDERSTANDS THAT THE FOREGOING ELECTION MAY NOT
                BE REVOKED EXCEPT WITH THE CONSENT OF THE COMMISSIONER OF THE
                INTERNAL REVENUE SERVICE.

DATED: __________________, 1999
                                        ----------------------------------------

           The undersigned spouse of taxpayer joins in this election.

DATED: __________________, 1999
                                        ----------------------------------------
                                                    Spouse of Taxpayer

                                       2
<PAGE>   21

                                    EXHIBIT D

                                CONSENT OF SPOUSE

                I, _____________________, spouse of ___________, have read and
approved the foregoing Agreement. In consideration of the right of my spouse to
purchase shares of Saba Software, Inc. as set forth in the Agreement, I hereby
appoint my spouse as my attorney-in-fact in respect to the exercise of any
rights under the Agreement insofar as I may have any rights under the community
property laws of the State of California or similar laws relating to marital
property in effect in the state of our residence as of the date of the signing
of the foregoing Agreement.

DATED: __________________, 1999
                                        ----------------------------------------

<PAGE>   22

                                                                    EXHIBIT 10.7

                               SABA SOFTWARE, INC.

                       RESTRICTED STOCK PURCHASE AGREEMENT

                THIS RESTRICTED STOCK PURCHASE AGREEMENT (the "Agreement") is
entered into as of ___________, by and between Saba Software, Inc., a Delaware
corporation (the "Company"), and ___________ ("Recipient").

                               W I T N E S S E T H

                WHEREAS, the Company regards Recipient as a valuable contributor
to the Company and has determined that it would be in the interest of the
Company and its stockholders to sell the Stock (as defined below) provided for
in this Agreement to Recipient as an incentive for continued service with the
Company and increased achievements in the future by Recipient;

                NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties to this Agreement hereby agree as follows:

                                A G R E E M E N T

                1. Restricted Stock Purchase.

                        (a) Contemporaneously with the execution of this
Agreement, the Company will issue and sell to Recipient ___________ shares of
Common Stock, par value $0.001 per share, of the Company (the "Stock") for a
consideration of $___________ per share (the "Purchase Price"). Payment for the
Stock in the amount of the Purchase Price multiplied by the number of shares
issued hereunder shall be made to the Company upon execution of this Agreement.
Such payment shall be made in cash, by check or wire transfer payable to the
Company, by execution of a promissory note substantially in the form attached
hereto as Exhibit A (the "Note"), or any combination of the foregoing. Stock
certificates evidencing the Stock will be retained by the Company, accompanied
by blank stock powers executed by Recipient, for the period during which the
Stock constitutes Restricted Stock (as defined below) pursuant to the terms of
Sections 2 and 3 hereof.

                        (b) All shares of Stock issued hereunder shall be deemed
issued to Recipient as fully paid and nonassessable shares, and Recipient shall
have all rights of a stockholder with respect thereto, including the right to
vote, receive dividends (including stock dividends), participate in stock splits
or other recapitalizations, and exchange such shares in a merger, consolidation
or other reorganization. The term "Stock," in addition to the shares purchased
pursuant to this Agreement, also refers to all securities received in
replacement of the Stock, as a stock dividend or as a result of any stock split,
recapitalization, merger, reorganization, exchange or the like, and all new,
substituted or additional securities or other properties to which Recipient is
entitled by reason of Recipient's ownership of the Stock.

                                       1
<PAGE>   23

                2. Restrictions.

                        (a) No Stock issued to the Recipient hereunder shall be
sold, transferred by gift, pledged, hypothecated, or otherwise transferred or
disposed of by the Recipient prior to the date when the Recipient shall become
vested in such Stock pursuant to Section 3 hereof, and such Stock shall
constitute "Restricted Stock" until such date. Any attempt to transfer Stock in
violation of this Section 2 shall be null and void and shall be disregarded by
the Company.

                        (b) In addition, Restricted Stock shall be subject to a
repurchase option in favor of the Company (the "Repurchase Option"). The
Repurchase Option shall be subject to the following terms and conditions:

                                (i) In the event of the voluntary or involuntary
termination of Recipient as an employee of the Company for any reason, with or
without cause (including death or disability), the Company shall, upon the date
of such termination, have an irrevocable, exclusive option for a period of
ninety (90) days from such date to repurchase any or all Restricted Stock from
Recipient or any person receiving the Restricted Stock by operation of law of
other involuntary transfer, at the original Purchase Price for the Restricted
Stock. The Repurchase Option may be assigned by the Company to any third person
or entity.

                                (ii) The Repurchase Option shall be exercised by
written notice by the Company or its assignee to Recipient or his or her
executor and, at the Company's or its assignee's option, by delivery to the
Recipient or his or her executor, with such notice, of (A) a check in the amount
of the Purchase Price for the Restricted Stock being repurchased, (B) in the
event that Recipient is indebted to the Company or its assignee, by cancellation
by the Company or its assignee of an amount of such indebtedness equal to the
Purchase Price for the Restricted Stock being repurchased, or (C) by a
combination of (A) and (B) so that the combined payment and cancellation of
indebtedness equals such Purchase Price. Upon delivery by the Company or its
assignee of such notice and payment of the Purchase Price, the Company or its
assignee shall become the legal and beneficial owner of the Restricted Stock
being repurchased and all rights and interest therein or related thereto, and
the Company shall have the right to transfer to its or its assignee's own name
the number of shares of Restricted Stock being repurchased by the Company or its
assignee, without further action by Recipient.

                        (c) For purposes of facilitating the enforcement of the
provisions of this Section 2, Recipient agrees, immediately upon receipt of the
certificate(s) for the Stock, to deliver such certificate(s), together with an
Assignment Separate from Certificate, in substantially the form of that attached
hereto as Exhibit B, executed in blank by Recipient and Recipient's spouse (if
required for transfer) with respect to each such stock certificate, to the
Secretary or Assistant Secretary of the Company, or their designee, to hold in
escrow for so long as such Stock remains Restricted Stock, with the authority to
take all such actions and to effectuate all such transfers and/or releases as
may be necessary or appropriate to accomplish the objectives of this Agreement
in accordance with the terms hereof. Recipient hereby acknowledges that the
appointment of the Secretary or Assistant Secretary of the Company (or their
designee) as the escrow holder hereunder with the stated authorities is a
material inducement to the Company to make this Agreement and that such
appointment is coupled with an interest and is accordingly irrevocable.
Recipient agrees that such escrow holder shall not be

                                       2
<PAGE>   24

liable to any party hereto (or to any other party) for any actions or omissions
unless such escrow holder is grossly negligent relative thereto. The escrow
holder may rely upon any letter, notice or other document executed by any
signature purported to be genuine and may resign at any time.

                3. Vesting. For purposes of this Agreement, the term "vest"
shall mean with respect to any share of the Stock that such share is no longer
Restricted Stock subject to the restrictions on transfer set forth in Section 2
and that such share is released from the Repurchase Option. If Recipient would
become vested in any fraction of a share of Stock on any date, such fractional
share shall not vest and shall remain Restricted Stock until the Recipient
becomes vested in the entire share. The shares of Stock subject to this
Agreement shall vest as follows:

                        (a) __________________ percent (___%) of the shares of
Stock subject to this Agreement shall vest on _________________; and

                        (b) the remaining ____________ percent (___%) of the
shares of Stock subject to this Agreement shall vest in ______________
installments commencing on ______________ and continuing quarterly thereafter
until all shares of Stock have become fully vested.

                4. Withholding of Taxes. Recipient shall provide the Company
with a copy of any timely election made pursuant to Section 83(b) of the
Internal Revenue Code or similar provision of state law (collectively, an "83(b)
Election"), a form of which election is attached hereto as Exhibit C. If
Recipient makes a timely 83(b) Election, Recipient shall immediately pay the
Company the amount necessary to satisfy any applicable federal, state, and local
income and employment tax withholding requirements. If Recipient does not make a
timely 83(b) Election, Recipient shall, either at the time that the restrictions
lapse under this Agreement or at the time withholding is otherwise required by
any applicable law, pay the Company the amount necessary to satisfy any
applicable federal, state, and local income and employment tax withholding
requirements.

                5. Additional Securities. Any securities received as the result
of ownership of Restricted Stock (hereinafter called "Additional Securities"),
including, without limitation, warrants, options and securities received as a
stock dividend or stock split, or as a result of a recapitalization or
reorganization, shall be retained by the Company in the same manner and subject
to the same conditions as the Restricted Stock with respect to which they were
issued. Recipient shall be entitled to direct the Company to exercise any
warrant or option received as Additional Securities upon supplying the funds
necessary to do so, in which event the securities so purchased shall constitute
Additional Securities, but the Recipient may not direct the Company to sell any
such warrant or option. If Additional Securities consist of a convertible
security, Recipient may exercise any conversion right, and any securities so
acquired shall be deemed Additional Securities. Additional Securities shall be
subject to the provisions of Sections 2,3 and 4 above in the same manner as the
Restricted Stock.

                                       3
<PAGE>   25

                6. Investment Representations.

                        (a) This Agreement is made in reliance upon the
Recipient's representation to the Company, which by its acceptance hereof the
Recipient hereby confirms, that the shares of Stock to be received by Recipient
will be acquired for investment for his or her own account, not as a nominee or
agent, and not with a view to the sale or distribution of any part thereof, and
that he or she has no present intention of selling, granting participation in,
or otherwise distributing the same, but subject nevertheless to any requirement
of law that the disposition of his or her property shall at all times be within
his or her control.

                        (b) The Recipient understands that the Stock is not
registered under the Securities Act of 1933, as amended (the "1933 Act"), on the
basis that the sale provided for in this Agreement and the issuance of
securities hereunder is exempt from registration under the 1933 Act pursuant to
Section 4(2) thereof, and that the Company's reliance on such exemption is
predicated on the Recipient's representations set forth herein. The Recipient
realizes that the basis for the exemption may not be present if, notwithstanding
such representations, the Recipient has in mind merely acquiring shares of the
Stock for a fixed or determinable period in the future, or for a market rise, or
for sale if the market does not rise. The Recipient does not have any such
intention.

                        (c) The Recipient understands that the Stock may not be
sold, transferred, or otherwise disposed of without registration under the 1933
Act or an exemption therefrom, and that in the absence of an effective
registration statement covering the Stock or an available exemption from
registration under the 1933 Act, the Stock must be held indefinitely. In
particular, the Recipient is aware that the Stock may not be sold pursuant to
Rule 144 or Rule 701 promulgated under the 1933 Act unless all of the conditions
of the applicable Rules are met. Among the conditions for use of Rule 144 is the
availability of current information to the public about the Company. Such
information is not now available, and the Company has no present plans to make
such information available. The Recipient represents that, in the absence of an
effective registration statement covering the Stock, it will sell, transfer, or
otherwise dispose of the Stock only in a manner consistent with its
representations set forth herein and then only in accordance with the provisions
of paragraph 6(d) hereof.

                        (d) The Recipient agrees that in no event will it make a
transfer or disposition of any of the Stock (other than pursuant to an effective
registration statement under the 1933 Act), unless and until (i) the Recipient
shall have notified the Company of the proposed disposition and shall have
furnished the Company with a statement of the circumstances surrounding the
disposition, and (ii) if requested by the Company, at the expense of the
Recipient or transferee, the Recipient shall have furnished to the Company
either (A) an opinion of counsel, reasonably satisfactory to the Company, to the
effect that such transfer may be made without registration under the 1933 Act or
(B) a "no action" letter from the Securities and Exchange Commission to the
effect that the transfer of such securities without registration will not result
in a recommendation by the staff of the Securities and Exchange Commission that
action be taken with respect thereto.

                        (e) The Recipient represents and warrants to the Company
that he or she is an "accredited investor" within the meaning of Securities and
Exchange Commission Rule 501

                                       4
<PAGE>   26

of Regulation D, as presently in effect and, for the purpose of Section 25102(f)
of the California Corporations Code, he or she is excluded from the count of
"purchasers" pursuant to Rule 260.102.13 thereunder.

                7. Legends; Stop Transfer.

                        (a) All certificates for shares of the Stock shall bear
substantially the following legends:

                THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
                FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
                THE SALE OR DISTRIBUTION THEREOF. THESE SECURITIES HAVE NOT BEEN
                REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE
                SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
                OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
                UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
                COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

                THE SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE
                TERMS OF THAT CERTAIN RESTRICTED STOCK PURCHASE AGREEMENT
                BETWEEN THE COMPANY AND THE NAMED SHAREHOLDER. THE SHARES
                REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
                ACCORDANCE WITH SUCH AGREEMENT, A COPY OF WHICH IS ON FILE WITH
                THE SECRETARY OF THE COMPANY.

                        (b) The certificates for shares of the Stock shall also
bear the following legend required by the Bylaws of the Company and any other
legends required by applicable state corporate or securities laws:

                THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
                RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE COMPANY, AS
                PROVIDED IN THE BYLAWS OF THE COMPANY.

                        (c) In addition, the Company shall make a notation
regarding the restrictions on transfer of the Stock in its stockbooks, and
shares of the Stock shall be transferred on the books of the Company only if
transferred or sold pursuant to an effective registration statement under the
1933 Act covering such shares or pursuant to and in compliance with the
provisions of paragraph 6(d) hereof.

                8. NO EFFECT ON TERMS OF EMPLOYMENT. THIS AGREEMENT SHALL NOT
CONFER UPON RECIPIENT ANY RIGHT WITH RESPECT TO CONTINUATION OF RECIPIENT'S
EMPLOYMENT WITH THE

                                       5
<PAGE>   27

COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH THE RIGHT OF RECIPIENT OR THE
COMPANY TO TERMINATE RECIPIENT'S EMPLOYMENT WITH THE COMPANY AT ANY TIME FOR ANY
REASON WITH OR WITHOUT CAUSE OR CHANGE THE TERMS OF EMPLOYMENT OF RECIPIENT.

                9. Lock-Up Agreement.

                        (a) Agreement. Recipient, if requested by the Company
and the lead underwriter of any public offering of the Common Stock or other
securities of the Company (the "Lead Underwriter"), hereby irrevocably agrees
not to sell, contract to sell, grant any option to purchase, transfer the
economic risk of ownership in, make any short sale of, pledge or otherwise
transfer or dispose of any interest in any Common Stock or any securities
convertible into or exchangeable or exercisable for or any other rights to
purchase or acquire Common Stock (except Common Stock included in such public
offering or acquired on the public market after such offering) during the
180-day period following the effective date of a registration statement of the
Company filed under the Securities Act, or such shorter period of time as the
Lead Underwriter shall specify. Recipient further agrees to sign such documents
as may be requested by the Lead Underwriter to effect the foregoing and agrees
that the Company may impose stop-transfer instructions with respect to such
Common Stock subject until the end of such period. The Company and Recipient
acknowledge that each Lead Underwriter of a public offering of the Company's
stock, during the period of such offering and for the 180-day period thereafter,
is an intended beneficiary of this Section 9.

                        (b) Permitted Transfers. Notwithstanding the foregoing,
Section 9(a) hereof shall not prohibit Recipient from transferring any shares of
Common Stock or securities convertible into or exchangeable or exercisable for
the Company's Common Stock to the extent such transfer is not otherwise
prohibited by this Agreement, either during Recipient's lifetime or on death by
will or intestacy to Recipient's immediate family or to a trust the
beneficiaries of which are exclusively Recipient and/or a member or members of
Recipient's immediate family; provided, however, that prior to any such
transfer, each transferee shall execute an agreement pursuant to which each
transferee shall agree to receive and hold such securities subject to the
provisions of this Section 9. For the purposes of this paragraph, the term
"immediate family" shall mean spouse, lineal descendant, father, mother, brother
or sister of the transferor.

                        (c) No Amendment Without Consent of Underwriter. During
the period from identification as a Lead Underwriter in connection with any
public offering of the Company's Common Stock until the earlier of (i) the
expiration of the lock-up period specified in Section 9(a) hereof in connection
with such offering or (ii) the abandonment of such offering by the Company and
the Lead Underwriter, the provisions of this Section 9 may not be amended or
waived except with the consent of the Lead Underwriter.

                10. California Law. This agreement is to be construed in
accordance with and governed by the internal laws of the State of California as
permitted by Section 1646.5 of the California Civil Code (or any similar
successor provision) without giving effect to any choice of law rule that would
cause the application of the laws of any jurisdiction other than the internal
laws of the State of California to the rights and duties of the parties.

                                       6
<PAGE>   28

                11. Notice. Any notice required to be given under the terms of
this Agreement shall be addressed to the Company in care of its Secretary at the
office of the Company at 2400 Bridge Parkway, Bldg. 12, Redwood Shores, CA
94065, and any notice to be given to Recipient shall be addressed to him at the
address given by Recipient beneath his or her signature to this Agreement, or
such other address as either party to this Agreement may hereafter designate in
writing to the other. Any such notice shall be deemed to have been duly given
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
registered or certified and deposited (postage or registration or certification
fee prepaid) in a post office or branch post office regularly maintained by the
United States.

                12. Successors. This Agreement shall be binding upon and inure
to the benefit of any successor or successors of the Company. Where the context
permits, "Recipient" as used in this Agreement shall include Recipient's
executor, administrator or other legal representative or the person or persons
to whom Recipient's rights pass by will or the applicable laws of descent and
distribution.

                13. Spousal Consent. Recipient shall cause his or her spouse to
execute a Consent of Spouse in substantially the form of that attached hereto as
Exhibit D concurrently with the execution of this Agreement or, if later, at the
time Recipient becomes married.

                14. California Securities Law. THE SALE OF THE SECURITIES WHICH
ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER
OF CORPORATIONS OF THE STATE OF CALIFORNIA, AND THE ISSUANCE OF SUCH SECURITIES
OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO
SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE
QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS
CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON
SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

                15. Employee and Employment References. References in this
Agreement that imply that the Recipient is an employee of the Company,
including, without limitation, references regarding Recipient's employment with
the Company, shall be deemed to include services provided to the Company by
Recipient in a consulting capacity and, to the extent that Recipient is
providing services in a consulting capacity, shall not be deemed to imply that
Recipient is an employee of the Company.

                                       7
<PAGE>   29

                  IN WITNESS WHEREOF, the parties hereto have duly executed this
Restricted Stock Purchase Agreement as of the date first above written.

SABA SOFTWARE, INC.,                    RECIPIENT:
a Delaware corporation

By:
   -------------------------------      ----------------------------------------
   Bobby Yazdani, President and
   Chief Executive Officer              ----------------------------------------

                                        Address:
                                                --------------------------------

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

                                       8
<PAGE>   30

                                    EXHIBIT A

                             SECURED, FULL-RECOURSE

                                 PROMISSORY NOTE

$
 -----------                                                         -----------

                FOR VALUE RECEIVED, the undersigned, ___________ ("Maker"),
promises to pay to Saba Software, Inc., a Delaware corporation ("Payee"), at
2400 Bridge Parkway, Building 12, Redwood Shores, California 94065, or such
other place as Payee may from time to time designate, without counterclaim,
deduction or offset of any kind, in lawful money of the United States, the
principal sum of eighty one thousand dollars ($___________) plus interest
thereon, as set forth below.

                1. INTEREST. Interest on the principal sum of this Note shall
accrue at the simple rate of ____% per annum, based on a 365 day year and the
actual number of days elapsed.

                2. PRINCIPAL AND INTEREST PAYMENTS. On each of the first three
(3) twelve (12) month anniversaries of the date of this Note, all accrued
interest on the outstanding principal amount of this Note and principal in the
amount of $______________ shall be due and payable hereunder; provided, that, if
such payment date is not a business day, then payment shall be due on the first
business day following such payment date.

                3. PREPAYMENT.

                        (a) Permissive. This Note may be prepaid in whole or in
part, at any time, without penalty or premium.

                        (b) Mandatory Prepayment. Maker shall be required to
prepay all principal and accrued but unpaid interest due under this Note within
ten (10) business days after a termination for any reason of Maker's employment
with Payee.

                4. APPLICATION OF PAYMENTS. All payments and prepayments
received by Payee shall be applied first to accrued interest, then to other
charges due with respect to this Note or the Pledge Agreement (as defined
below), and then to the unpaid principal balance.

                5. SECURITY. This Note is secured by a Stock Pledge Agreement in
the form attached hereto as Attachment A (the "Pledge Agreement"), encumbering
certain shares of Common Stock of Payee held by Maker, and the proceeds thereof
(the "Collateral").

                                       1
<PAGE>   31

                6. DEFAULT AND REMEDIES.

                        a. Default. Maker will be in default under this Note if
(i) Maker fails to make a payment of principal and/or interest hereunder when
due or declared due, whether at scheduled maturity, by acceleration or
otherwise, within ten (10) business days after receipt of written notice of such
nonpayment; (ii) except as permitted by the Pledge Agreement, Maker agrees to or
does sell, convey, encumber, hypothecate or otherwise alienate the Collateral,
or any part thereof, of any interest therein, or if divested of its title to the
Collateral or any interest therein in any manner or any way, whether voluntarily
or involuntarily, without the prior written consent of Holder, or if any other
person or entity with a security interest in the Collateral exercises or seeks
to exercise the remedies of a secured party with respect to the Collateral; or
(iii) Maker files a petition in bankruptcy, is adjudicated insolvent, petitions
or applies to any tribunal for the appointment of a receiver, custodian, or any
trustee for Maker or commences any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction or any such proceeding has been commenced
against Maker which remains undismissed for a period of sixty (60) days.

                        b. Remedies. Upon Maker's default, Payee may (i) upon
written notice to Maker, declare the entire principal sum and all accrued and
unpaid interest hereunder immediately due and payable and (ii) exercise any and
all of the remedies provided in the Pledge Agreement and applicable law.

                7. MISCELLANEOUS.

                        a. All communications or notices required or given under
this Note shall be given in accordance with the provisions of Section 12(e) of
the Pledge Agreement.

                        b. This Note may be modified only by a written agreement
executed by Maker and Payee.

                        c. This Note shall be governed by California law.

                        d. The terms of this Note shall inure to the benefit of
and bind Maker and Payee and their respective heirs, legal representatives and
successors and assigns.

                        e. Time is of the essence with respect to all matters
set forth in this Note.

                        f. If this Note is destroyed, lost or stolen, Maker will
deliver a new note to Payee on the same terms and conditions as this Note with a
notation of the unpaid principal and accrued and unpaid interest in substitution
of the prior Note. Payee shall furnish to Maker reasonable evidence that the
Note was destroyed, lost or stolen and any security or indemnity that may be
reasonably required by Maker in connection with the replacement of this Note.

                                       2
<PAGE>   32

                IN WITNESS WHEREOF, Maker has executed this Note as of the date
and year first above written.

                                        MAKER:

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

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

                                       3
<PAGE>   33

                                  ATTACHMENT A

                             STOCK PLEDGE AGREEMENT

        THIS STOCK PLEDGE AGREEMENT (the "Agreement") is entered into as of
___________, by and between ___________ ("Debtor") and Saba Software, Inc., a
Delaware corporation ("Secured Party").

                                    RECITALS

        A. Secured Party has loaned Debtor the principal sum of $___________,
which is evidenced by a promissory note of even date herewith for such principal
amount (the "Note").

        B. As a condition to making of the loan evidenced by the Note, Secured
Party has required that the Note be secured, upon the terms herein provided, by
certain shares of the Common Stock of Secured Party held by Debtor.

        NOW, THEREFORE, in consideration of the foregoing and the further
promises contained herein, Debtor and Secured Party agree as follows:

                                    AGREEMENT

                1. GRANT OF SECURITY INTEREST. To secure full payment and
performance of Debtor's obligations under the Note and each and every obligation
of Debtor under this Agreement (collectively the "Obligations"), when due
(whether at the stated maturity, by acceleration or otherwise), Debtor hereby
pledges the Collateral (defined below in Section 2), and grants a security
interest in the Collateral, to Secured Party.

                2. COLLATERAL. "Collateral" means __________ shares of the
Common Stock of Secured Party (the "Pledged Stock"), evidenced by Common Stock
Certificate No. ____ (the "Certificate"), duly registered in the name of Debtor,
together with all property rights as may derive from or accrue to the same,
including without limitation, additional shares (whether as a result of stock
splits, stock dividends or otherwise) or replacement securities representing
interests in Secured Party or an affiliate or successor in interest of Secured
Party, and all dividends (whether in cash, stock or other forms) and other
income or proceeds derived therefrom or receivable or received on the sale,
exchange, collection or other disposition thereof, whether voluntary or
involuntary, and distributions with respect thereto. For purposes of this
Agreement, the term "proceeds" includes whatever is receivable or received when
Collateral or proceeds is sold, collected, exchanged, or otherwise disposed of,
whether such disposition is voluntary or involuntary.

                3. DELIVERY OF COLLATERAL. On or prior to the execution of this
Agreement, Debtor has delivered or will deliver the Certificate, together with a
stock power duly executed in blank by Debtor to the Secured Party for purposes
of perfecting Secured Party's security interest hereunder and in accordance with
the terms of this Agreement. Upon payment from time to time of the principal
amount of the Note, or any portion thereof, Secured Party shall, at Debtor's

                                       1
<PAGE>   34

request, take all steps reasonably necessary to cause the redelivery to Debtor
of such portion of the Collateral corresponding to such payment.

                4. STOCK ADJUSTMENTS. Secured Party shall have the right to
collect and hold any shares of stock or securities of any class or kind
distributed on account of the Pledged Stock by reason of any stock dividend,
distribution, reclassification or other change in the capital structure of
Secured Party, all of which shall be delivered by Debtor to Secured Party and
held by Secured Party in accordance with the terms of this Agreement.

                5. COVENANTS OF DEBTOR. In addition to other covenants of Debtor
contained in this Agreement, Debtor shall:

                        (i) from time to time promptly execute and deliver to
Secured Party all such stock powers, assignments, financing statements and other
instruments or documents as may be necessary in order to more fully evidence and
perfect the security interest of Secured Party in the Collateral and promptly
furnish Secured Party with any information or writings which Secured Party may
reasonably request concerning the Collateral;

                        (ii) appear in and defend any action or proceeding which
may affect Debtor's title to or Secured Party's interest in the Collateral; and

                        (iii) keep the Collateral free of all levies and
security interests or other liens or changes except those approved in writing by
Secured Party.

                6. DEBTOR'S RIGHTS IN COLLATERAL.

                        (a) The parties agree that the grant of a security
interest in, and the assignment and pledge of, the Collateral to Secured Party
hereunder is intended solely for the purpose of securing the Obligations.
Accordingly, prior to the occurrence of an Event of Default (as that term is
defined in Section 10) and the exercise of rights and remedies afforded Secured
Party as a result of such Event of Default, and to the extent not inconsistent
with the terms of this Agreement, Debtor will be entitled to exercise rights as
the owner of the Pledged Stock and will be entitled to receive and retain, any
cash distributions or allocations ("Distributions") and to exercise any other
rights appurtenant to the ownership of the Collateral. Without limiting the
generality of the foregoing, prior to the occurrence of an Event of Default,
Debtor will have the sole and absolute right to:

                        (i) vote or exercise any and all other consensual rights
in respect of the Collateral, provided, however, that Debtor may not consent to
any amendment or modification of the Certificate of Incorporation or Bylaws of
Debtor that materially adversely affects Secured Party's interest in the
Collateral (including, without limitation, any amendment or modification
creating additional or different transfer restrictions on the Common Stock of
Debtor in a manner that is different from any other shares of Debtor's Common
Stock); and

                        (ii) receive, retain, use or alienate any Distributions
free and clear of the interest of Secured Party.

                                       2
<PAGE>   35

                        (b) After an Event of Default and the exercise of rights
and remedies by Secured Party, all rights of Debtor to exercise the voting and
other contractual rights which it would otherwise be entitled to exercise
pursuant to this Section 6 and to receive and retain the Distributions which it
would otherwise be authorized to receive and retain under this Section 6 will
cease. Following the occurrence of an Event of Default and pending delivery to
Secured Party of any Distributions, Debtor will hold the same in trust for
Secured Party, free and clear of all liens and claims whatsoever other than the
interest of Secured Party.

                7. REPRESENTATIONS AND WARRANTIES. Debtor represents and
warrants to Secured Party that:

                                (i) The execution, delivery and performance of
this Agreement does not conflict with any law or any agreement or undertaking of
which Debtor is a party or by which Debtor is bound;

                                (ii) Except for the rights of Debtor and Secured
Party, no other person will have any right, title, claim or interest (by way of
security interest or other lien or charge or otherwise) in, against or to the
Collateral; and

                                (iii) All information presently or subsequently
supplied to Secured Party by or on behalf of Debtor with respect to the
Collateral is true and correct.

                8. RIGHTS OF SECURED PARTY.

                        (a) Secured Party, upon ten (10) days written notice to
Debtor if Debtor fails to perform any of its obligations hereunder, may, but
need not, perform such acts to preserve its rights and the value of the
Collateral. Debtor hereby irrevocably appoints Secured Party as Debtor's
attorney-in-fact (which appointment is coupled with an interest) to do any such
act, and to exercise such rights and powers as Debtor might exercise with
respect to the Collateral in connection therewith. No failure to so act by
Secured Party will relieve Debtor of Debtor's duties under this Agreement or in
any way impair or discharge the obligations, and no such failure to act will
result in any liability to Debtor or any third party on the part of Secured
Party.

                        (b) Secured Party does not assume any of the obligations
or liabilities of Debtor arising under any of the Collateral or any agreement in
respect thereto.

                9. CARE OF COLLATERAL.

                        (a) Secured Party will use reasonable care in the
custody and preservation of any Collateral in its possession. The parties
further agree that such care as Secured Party gives to the safekeeping of its
own property of like kind will constitute reasonable care of the Collateral when
in Secured Party's possession; provided, however, that Secured Party will not be
required to make any presentment, demand or protest, or give any notice and need
not take any action to preserve any rights any prior party or any other person
in connection with the Obligations or with respect to the Collateral.

                                       3
<PAGE>   36

                        (b) Secured Party will not be responsible for or have
any liability for the form, legal sufficiency, genuineness, or legal effect of
any signature, description, guaranty, instruction, or document related to the
Collateral.

                        (c) Debtor agrees that Secured Party will not in any way
or manner be liable or responsible for any diminution in the value of the
Collateral resulting from the sale or other disposition of the Collateral at
Debtor's request, or from the failure of Secured Party to sell or consent to the
sale, liquidation, reinvestment or other disposition of the Collateral, or for
any act or default by any bailee, forwarding agency, transfer agent or any
person whomsoever, in connection with the Collateral.

                10. DEFAULT. An "Event of Default" will have occurred if:

                        (a) There is an occurrence of an event of default under
the Note, subject to applicable grace periods, if any; or

                        (b) Debtor breaches any provision of this Agreement, and
such breach continues after written notice from Secured Party for a period of
ten (10) business days or such longer period of time reasonably required to
remedy the breach, provided Debtor promptly commences remedial action with ten
(10) business days of such written notice and thereafter diligently pursues the
remedial action.

                11. REMEDIES.

                        (a) Upon the occurrence of an Event of Default, as
defined in Section 10 above, Secured Party may, at Secured Party's option:

                                (i) exercise with respect to the Collateral all
of the remedies of a secured party under Articles 8 and 9 of the California
Commercial Code (the "Code"). Without limiting the foregoing and subject to
subsection (b) below, Secured Party shall have the right to sell or otherwise
dispose of the Collateral in accordance with the provisions of the Code. At any
such sale, Secured Party shall have the right to purchase all or any part of the
Collateral and may credit bid amounts owing under the Note. In view of the fact
that federal and state securities laws may impose certain restrictions on the
method by which a sale of the Pledged Stock and any other Collateral consisting
of securities may be effected, Debtor agrees that upon the occurrence of an
Event of Default, Secured Party may from time to time attempt to sell all or any
part of the Pledged Stock and any other Collateral consisting of securities by
means of a private placement restricting the prospective purchasers to those who
satisfy the requirements for available exemptions under applicable securities
laws. In so doing, Secured Party may solicit offers to buy the Pledged Stock and
any other Collateral consisting of securities from a limited number of investors
deemed by Secured Party to satisfy those standards. If Secured Party solicits
such offers from not less than three (3) such investors, then the acceptance by
Secured Party of the highest offer(s) obtained therefrom shall be deemed to be a
commercially reasonable method of disposition of the Pledged Stock and any other
Collateral consisting of securities. Debtor further agrees that, to the extent
notice of sale shall be required by law, ten (10) days' prior notice to Debtor
shall constitute reasonable notice. Secured Party shall not be obligated to
proceed with any sale of Collateral regardless of notice of sale having been
given. Nothing herein shall be

                                       4
<PAGE>   37

deemed to limit or restrict Secured Party in disposing of the Collateral in
other commercially reasonable ways;

                        (ii) exercise any and all remedies available under law
or in equity; and

                        (iii) recover from Debtor all costs and expenses,
including attorneys' fees and expenses, incurred by Secured Party in exercising
any right or remedy provided for hereunder or by law, which costs and expenses
are included in the Obligations secured by the Collateral.

                        (b) Nothing herein shall be construed to limit Secured
Party's right to seek a deficiency judgment against Debtor.

                        (c) No delay or omission to exercise any right or remedy
of Secured Party upon a default by Debtor will constitute a waiver of any right
or remedy of Secured Party or be construed as a waiver of any similar default
which occurs later. Debtor waives any right to require Secured Party to proceed
against any other person or to exhaust any Collateral or to pursue any other
remedy in Secured Party's power.

                        (d) It is the intention of the parties that the grant of
the security interest and assignment and pledge of the Collateral to Secured
Party, and the exercise by Secured Party of any right or remedy granted in this
Agreement, is in addition to all other security interests and remedies given to
Secured Party by virtue of any statute or rule of law or any other agreement,
all of which security interests and remedies are cumulative and, to the maximum
extent permitted by applicable law, may be exercised successively and
concurrently without impairing the rights and remedies of Secured Party under
this Agreement.

                12. MISCELLANEOUS.

                        (a) SUCCESSORS. The terms of this Agreement will inure
to the benefit of and bind the parties hereto and their respective successors,
assigns, executors, heirs and legal representatives.

                        (b) ENTIRE AGREEMENT; SEVERABILITY. This Agreement
contains the entire security agreement between Secured Party and Debtor with
respect to the Pledged Stock and may be modified only by a writing signed by
Secured Party and Debtor. If any of the provisions of this Agreement are held
invalid or unenforceable, this Agreement will be construed as if not containing
the invalid or unenforceable provisions.

                        (c) CHOICE OF LAW. This Agreement will be construed in
accordance with and governed by the laws of the State of California.

                        (d) ATTORNEYS' FEES. In any action brought to enforce
the terms of this Agreement, the prevailing party will be reimbursed by the
losing party for its reasonable costs and expenses incurred in such action,
including reasonable attorneys' fees.

                        (e) NOTICES. All notices, requests, demands and other
communications to be given pursuant to the terms of this Agreement shall be in
writing and shall be delivered

                                       5
<PAGE>   38

personally, telecopied or sent by recognized overnight delivery service, and
shall be deemed given when so delivered personally, telecopied or received, as
follows

                        (i) If to Secured Party:

                            Saba Software, Inc.
                            2400 Bridge Parkway, Building 12
                            Redwood Shores, CA 94065

                        (ii) If to Debtor:

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

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

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

                        Any party may change its address or telecopier number by
prior written notice to the other party.

                        (f) TIME. Time is of the essence of each and every
provision of this Agreement.

                        (g) COUNTERPARTS. This Agreement may be executed by
facsimile and in any number of counterparts, and when so executed shall have the
same force and effect as though all signatures appeared on one document.

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.

                                        SECURED PARTY:

                                        SABA SOFTWARE, INC.

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

                                        DEBTOR:

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

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

                                       6
<PAGE>   39

                                    EXHIBIT B

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

                FOR VALUE RECEIVED and pursuant to that certain Restricted Stock
Purchase Agreement between the undersigned ("Recipient") and Saba Software, Inc.
dated __________ ____, 1999 (the "Agreement"), Recipient hereby sells, assigns
and transfers unto _______________ _________________ (_________) shares of
Common Stock of Saba Software, Inc. standing in Recipient's name on the books of
said corporation represented by Certificate No. _________ herewith and does
hereby irrevocably constitute and appoint _____________________________________
____________________________ to transfer said stock on the books of the
within-named corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.

Dated: ________________, 19___          By:
                                           -------------------------------------

Instruction: Please do not fill in any blanks other than the signature line. The
purpose of this assignment is to enable the Company to exercise its repurchase
option set forth in the Agreement without requiring additional signatures on the
part of Recipient.

                                       1
<PAGE>   40

                                    EXHIBIT C

                       ELECTION UNDER SECTION 83(B) OF THE

                    INTERNAL REVENUE CODE OF 1986, AS AMENDED

                The undersigned taxpayer hereby elects, pursuant to the Internal
Revenue Code, as amended, to include in gross income for 1999 the amount of any
compensation taxable in connection with the taxpayer's receipt of the property
described below:

                1. The name, address, taxpayer identification number and taxable
year of the undersigned are:

                TAXPAYER'S NAME: ___________

                SPOUSE'S NAME:

                TAXPAYER'S SOCIAL SECURITY NO.:

                SPOUSE'S SOCIAL SECURITY NO.:

                TAXABLE YEAR: Calendar Year 1999

                ADDRESS:

                2. The property which is the subject of this election is:
___________ shares of Common Stock (the "Shares") of Saba Software, Inc., a
Delaware corporation (the "Company").

                3. The Shares were transferred to the undersigned on
___________.

                4. The Shares are subject to the following restriction: Upon a
termination of the undersigned's employment with the Company, the Company has
the right to repurchase unvested Shares at the original purchase price. The
Shares shall vest, and the Company's repurchase right shall lapse, as to
________________ percent (__%) of the Shares on ______________ and as to the
remaining _____________ percent (___%) of the Shares in
_________________________ installments commencing on ______________.

                5. The fair market value of the property at the time of transfer
(determined without regard to any restriction other than a restriction which by
its terms will never lapse) is: $___________ per Share x ___________ Shares =
$______________.

                6. The undersigned contributed $___________ per Share x
___________ Shares for the Shares transferred or a total of $____________. The
undersigned has submitted a copy of this statement to the Company.

                The undersigned has submitted a copy of this statement to the
person for whom the services were performed in connection with the undersigned's
receipt of the above-described

                                       1
<PAGE>   41

property. The undersigned taxpayer is the person performing the services in
connection with the transfer of said property.

                The undersigned will file this election with the Internal
Revenue Service office in which he or she files his or her annual income tax
return not later than 30 days after the date of transfer of the property. A copy
of the election also will be furnished to the person for whom the services were
performed. Additionally, the undersigned will include a copy of the election
with his or her income tax return for the taxable year in which property is
transferred. The undersigned understands that this election will also be
effective as an election under California law.

                THE UNDERSIGNED UNDERSTANDS THAT THE FOREGOING ELECTION MAY NOT
                BE REVOKED EXCEPT WITH THE CONSENT OF THE COMMISSIONER OF THE
                INTERNAL REVENUE SERVICE.

DATED: __________________, 1999
                                        ----------------------------------------

           The undersigned spouse of taxpayer joins in this election.

DATED: __________________, 1999
                                        ----------------------------------------
                                                   Spouse of Taxpayer

                                       2
<PAGE>   42

                                    EXHIBIT D

                                CONSENT OF SPOUSE

                I, _____________________, spouse of ___________, have read and
approved the foregoing Agreement. In consideration of the right of my spouse to
purchase shares of Saba Software, Inc. as set forth in the Agreement, I hereby
appoint my spouse as my attorney-in-fact in respect to the exercise of any
rights under the Agreement insofar as I may have any rights under the community
property laws of the State of California or similar laws relating to marital
property in effect in the state of our residence as of the date of the signing
of the foregoing Agreement.

Dated:  ____________, 1999              ----------------------------------------

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