Document:

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                           PROBUSINESS SERVICES, INC.

           6.9% SENIOR CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

                                 August 1, 2000

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                                TABLE OF CONTENTS

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SECTION 1 - Authorization and Sale of Preferred Stock.................................................................3

         1.1      Authorization.......................................................................................3
         1.2      Sale of Convertible Preferred.......................................................................3

SECTION 2 - Closing Date; Delivery....................................................................................3

         2.1      Closing Date........................................................................................4
         2.2      Delivery............................................................................................4

SECTION 3 - Representations and Warranties of the Company.............................................................4

         3.1      Organization and Standing...........................................................................4
         3.2      Capitalization. ....................................................................................4
         3.3      Corporate Power; Authorization......................................................................5
         3.4      Issuance and Delivery of the Shares.................................................................5
         3.5      SEC Documents; Financial Statements.................................................................6
         3.6      No Material Adverse Change..........................................................................6
         3.7      Litigation..........................................................................................6
         3.8      Governmental Authorization; Third Party Consents....................................................6
         3.9      Compliance with Laws................................................................................7
         3.10     Liabilities.........................................................................................7
         3.11     Private Offering....................................................................................7
         3.12     Broker's, Finder's or Similar Fees..................................................................7
         3.13     Section 203.........................................................................................7

SECTION 4 - Representations and Warranties of the Purchasers..........................................................8

         4.1      Investment Representations and Covenants of the Purchasers..........................................8
         4.2      Receipt of Information..............................................................................9
         4.3      Authorization.......................................................................................9
         4.4      Brokers or Finders..................................................................................9
         4.5      Tax Advisors........................................................................................9
         4.6      Investor Counsel...................................................................................10
         4.7      HSR Compliance.....................................................................................10

SECTION 5 - Conditions to Closing of the Purchasers..................................................................10

         5.1      Representations and Warranties Correct.............................................................10
         5.2      Covenants..........................................................................................10
         5.3      Compliance Certificate.............................................................................10
         5.4      Blue Sky...........................................................................................11
         5.5      Legal Matters......................................................................................11
         5.6      Opinion of Counsel.................................................................................11
         5.7      Registration Rights Agreement......................................................................11
         5.8      Secretary's Certificate............................................................................11
         5.9      Documents..........................................................................................11
         5.10     Filing of the Certificate of Designations..........................................................11
         5.11     Shares.............................................................................................11

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                                TABLE OF CONTENTS
                                   (CONTINUED)

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SECTION 6 - Conditions to Closing of Company.........................................................................12

         6.1      Representations and Warranties.....................................................................12
         6.2      Blue Sky...........................................................................................12
         6.3      Legal Matters......................................................................................12
         6.4      Board and Stockholder Approval.....................................................................12
         6.5      Registration Rights Agreements.....................................................................12

SECTION 7 - Affirmative Covenants of the Company.....................................................................12

         7.1      SEC Filings........................................................................................12
         7.2      Reservation of Common Stock and Preferred Stock....................................................13
         7.3      Registration and Listing...........................................................................13
         7.4      Use of Proceeds....................................................................................13

SECTION 8 - Indemnification..........................................................................................13

         8.1      Indemnification....................................................................................13
         8.2      Notification.......................................................................................14
         8.3      Contribution.......................................................................................15
         8.4      Limitation on Indemnification......................................................................15

SECTION 9 - Miscellaneous............................................................................................15

         9.1      Governing Law......................................................................................15
         9.2      Survival...........................................................................................15
         9.3      Successors and Assigns.............................................................................15
         9.4      Entire Agreement; Amendment........................................................................16
         9.5      Notices, etc.......................................................................................16
         9.6      Delays or Omissions................................................................................16
         9.7      California Corporate Securities Law................................................................17
         9.8      Expenses...........................................................................................17
         9.9      Counterparts.......................................................................................17
         9.10     Severability.......................................................................................17
         9.11     Further Assurances.................................................................................17
         9.12     Publicity..........................................................................................17

EXHIBITS

         A.       Schedule of Purchasers
         B.       Certificate of Designations
         C.       Schedule of Exceptions
         D.       Compliance Certificate
         E.       Registration Rights Agreement
         F.       Opinion of Wilson Sonsini Goodrich & Rosati
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                           PROBUSINESS SERVICES, INC.

           6.9% SENIOR CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

         This Convertible Preferred Stock Purchase Agreement (the
"AGREEMENT") is made as of the 1st day of August 2000 by and between
ProBusiness Services, Inc., a Delaware corporation (the "COMPANY"), with its
principal office at 4125 Hopyard Road, Pleasanton, California 94588, and the
persons listed on the Schedule of Purchasers attached hereto as EXHIBIT A
(the "PURCHASERS").

         In consideration of the mutual promises, covenants and conditions
hereinafter set forth, the parties hereto mutually agree as follows:

                                   DEFINITIONS

         As used in this Agreement, and unless the context requires a
different meaning, the following terms have the meanings indicated:

         "AFFILIATE" shall mean any Person who is an "affiliate" as defined
in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. In
addition, the following shall be deemed to be Affiliates of GAP Coinvestment,
GAP LP and GapStar: (a) GAP LLC, the members of GAP LLC, the limited partners
of GAP Coinvestment and the limited partners of GAP LP; (b) any Affiliate of
GAP LLC, the members of GAP LLC, the limited partners of GAP Coinvestment or
the limited partners of GAP LP; and (c) any limited liability company or
partnership a majority of whose members or partners, as the case may be, are
members or former members of GAP LLC or consultants or key employees of
General Atlantic Service Corporation, a Delaware corporation and an Affiliate
of GAP LLC. In addition, GAP LP, GAP Coinvestment and GapStar shall be deemed
to be Affiliates of one another.

         "AGREEMENT" shall have the meaning as defined above.

         "BOARD OF DIRECTORS" means the Board of Directors of the Company.

         "BYLAWS" means the bylaws of the Company as amended and as in effect
as of the Closing Date.

         "CERTIFICATE" shall have the meaning as defined in Section 1.1.

         "CERTIFICATE OF DESIGNATIONS" means the Certificate of Designations,
Rights and Preferences of the Convertible Preferred of the Company.

         "CLAIMS" shall mean any actions, suits, proceedings, claims,
complaints, disputes, arbitrations or investigations.

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         "CERTIFICATE OF INCORPORATION" means the Amended and Restated
Certificate of Incorporation of the Company.

         "CLOSING" shall have the meaning as defined in Section 2.1.

         "CLOSING DATE" shall have the meaning as defined in Section 2.1.

         "COMMISSION" shall have the meaning as defined in Section 4.1(c).

         "COMMON STOCK" means Common Stock, par value $.001 per share, of the
Company, or any other capital stock of the Company into which such stock is
reclassified or reconstituted.

         "CONDITION OF THE COMPANY AND THE SUBSIDIARY" means the assets,
business, properties, operations or condition (financial or otherwise) of the
Company and the Subsidiary, taken as a whole.

         "CONVERTIBLE PREFERRED" shall have the meaning as defined in Section
1.1.

         "EXCHANGE ACT" shall have the meaning as defined in Section 3.4.

         "FINANCIAL STATEMENTS" shall have the meaning set forth in Section
3.5.

         "GAP LLC" means General Atlantic Partners, LLC, a Delaware limited
liability company and the general partner of GAP LP and the managing member
of GapStar, and any successor to such entity.

         "GAP COINVESTMENT" has the meaning set forth in the preamble to this
Agreement.

         "GAP LP" shall mean General Atlantic Partners 70, L.P., a Delaware
limited partnership.

         "GAPSTAR" shall mean GapStar, LLC, a Delaware limited liability
company.

         "GOVERNMENTAL AUTHORITY" means the government of any nation, state,
city, locality or other political subdivision thereof, any entity exercising,
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.

         "PERSON" means any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company, Governmental Authority or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.

         "REGISTRATION RIGHTS AGREEMENT" shall mean the Amended and Restated
Registration Rights Agreement dated March 12, 1997 between the Company, the
Purchasers and the Original Holders (as defined therein), as amended by the
Amendment to Amended and Restated Registration Rights Agreement dated the
date hereof between such parties.

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         "REQUIREMENTS OF LAW" means, as to any Person, any law, statute,
treaty, rule, regulation, right, privilege, qualification, license or
franchise or determination or order of an arbitrator or a court or other
Governmental Authority or stock exchange, in each case applicable or binding
upon such Person or any of its property or to which such Person or any of its
property is subject or pertaining to any or all of the transactions
contemplated or referred to herein.

         "SECURITIES ACT" shall have the meaning as defined in Section 3.4.

         "STOCK EQUIVALENTS" means any security or obligation which is by its
terms convertible into or exchangeable for shares of common stock or other
capital stock or securities of the Company, and any option, warrant or other
subscription or purchase right with respect to common stock or such other
capital stock or securities.

         "STOCK OPTION PLAN" means the stock option plan of the Company
pursuant to which up to 5,963,571 shares of restricted stock and options to
purchase shares of Common Stock are reserved and available for grant to
officers, directors, employees and consultants of the Company.

         "SUBSIDIARIES" means those subsidiaries of the Company set out under
Schedule 3.2 to the Schedule of Exceptions.

         "TRANSACTION DOCUMENTS" means the Agreement and the Registration
Rights Agreement.

                                   SECTION 1

                    AUTHORIZATION AND SALE OF PREFERRED STOCK

     1.1 AUTHORIZATION. The Company has authorized the sale and issuance of
up to 1,132,075 shares (the "SHARES") of its 6.9% Senior Convertible
Preferred Stock (the "CONVERTIBLE PREFERRED"), having rights, privileges and
preferences as set forth in the Certificate of Designations (the
"CERTIFICATE") in the form attached to this Agreement as EXHIBIT B. The
Company's Certificate of Incorporation authorizes the issuance of up to
1,800,000 shares of Convertible Preferred.

     1.2 SALE OF CONVERTIBLE PREFERRED. Subject to the terms and conditions
hereof, the Company will issue and sell to the Purchasers and the Purchasers
will severally purchase from the Company, at the Closing, the respective
number of shares of Convertible Preferred indicated on the Schedule of
Purchasers at a purchase price of $26.50 per share, for the aggregate
purchase price for each Purchaser as indicated thereon.

                                    SECTION 2

                             CLOSING DATE; DELIVERY

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     2.1 CLOSING DATE. The closing of the execution of this Agreement and the
sale and purchase of the Shares hereunder shall be held at the offices of
Wilson Sonsini Goodrich & Rosati, 975 Page Mill Road, Palo Alto, California
94304 at 9:00 a.m., local time, on Tuesday August 1, 2000 (the "Closing") or
at such other time and place upon which the Company and the Purchasers shall
agree (the date of the Closing is hereinafter referred to as the "CLOSING
DATE").

     2.2 DELIVERY. At the Closing, the Company will deliver to each Purchaser
an executed counterpart of this Agreement together with a certificate,
registered in such Purchaser's name, representing the number of Shares to be
issued on the Closing Date as set forth beside such Purchaser's name on the
Schedule of Purchasers, against delivery of an executed counterpart of this
Agreement, together with payment of the purchase price for the Shares by
check payable to the Company or wire transfer per the Company's instructions.

                                    SECTION 3

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         Except as set forth on the "Schedule of Exceptions" attached hereto
as EXHIBIT C, the Company hereby represents and warrants to the Purchasers as
of the Closing Date as follows:

     3.1 ORGANIZATION AND STANDING. The Company and each of the Subsidiaries
(a) is a corporation duly organized and validly existing under, and by virtue
of, the laws of the State of Delaware, (b) is in good standing as a domestic
corporation under the laws of said state, (c) is duly qualified as a foreign
corporation, licensed and in good standing under each jurisdiction in which
its ownership, lease or operation of property or the conduct of its business
requires such qualifications. No jurisdiction, other than those referred to
in clause, (c) above, has claimed, in writing or otherwise, that the Company
or any of the Subsidiaries is required to qualify as a foreign corporation or
other entity therein, and neither the Company nor any of the Subsidiaries
files any franchise, income or other tax returns in any other jurisdiction
based upon the ownership or use of property therein or the derivation of
income therefrom.

     3.2 CAPITALIZATION.

         (a) As of June 30, 2000, the authorized capital stock of the Company
consisted of (i) 60,000,000 shares of Common Stock, of which 23,584,000
shares were issued and outstanding, and (ii) 5,000,000 shares of Preferred
Stock, none of which shares were issued and outstanding, but of which as of
closing, 1,804,000 shall be designated as the Convertible Preferred. As of
June 30, 2000, the aggregate number of shares subject to options to purchase
shares of Common Stock which may be issued under the Stock Option Plan is
5,963,571, of which 4,344,606 have been granted. The Company has reserved an
aggregate of 1,800,000 shares of Common Stock for issuance upon conversion of
the Shares. Except for the (i) conversion privileges of the Shares, (ii)
shares of Common Stock subject to outstanding options issued under the
Company's Stock Option Plan and (iii) shares of Common Stock reserved for
future issuance pursuant to the Company's Stock Option

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Plan, there are no options, warrants, conversion privileges, subscription or
purchase rights or other rights outstanding to purchase or otherwise acquire
(i) any authorized but unissued, unauthorized or treasury shares of the
Company's capital stock, (ii) any Stock Equivalents or (iii) other securities
of the Company and there are no commitments, contracts, agreements,
arrangements or understandings by the Company to issue any shares of the
Company's capital stock or any Stock Equivalents or other securities of the
Company.

         (b) SCHEDULE 3.2(b) sets forth, as of June 30, 2000, a true and
complete list of (x) each of the Subsidiaries of the Company, (y) the
aggregate number of authorized shares of capital stock of such Subsidiary and
(z) the stockholders of such Subsidiary and, opposite the name of each
stockholder, the amount of all outstanding capital stock and Stock
Equivalents owned by such stockholder. The Company owns all of the issued and
outstanding capital stock of the Subsidiaries, free and clear of all liens or
encumberances. All of such shares of capital stock are duly authorized,
validly issued, fully paid and non-assessable, and were issued in compliance
with the registration and qualification requirements of all applicable
federal, state and foreign securities laws. There are no options, warrants,
conversion privileges, subscription or purchase rights or other rights
presently outstanding to purchase or otherwise acquire any authorized but
unissued, unauthorized or treasury shares of capital stock or other
securities of, or any proprietary interest in, any of the Subsidiaries, and
there is no outstanding security of any kind convertible into or exchangeable
for such shares or proprietary interest. Neither the Company nor any of its
Subsidiaries, owns any interest, or has a right to acquire any interest, in
any Person that is not a Subsidiary.

     3.3 CORPORATE POWER; AUTHORIZATION. The Company has all requisite legal
and corporate power and has taken all requisite corporate action to execute
and deliver each of the Transaction Documents, to sell and issue the Shares
and to carry out and perform all of its obligations under each of the
Transaction Documents. Each of the Transaction Documents constitutes the
legal, valid and binding obligation of the Company, enforceable in accordance
with its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the enforcement of
creditors' rights generally and (ii) as limited by equitable principles
generally. The execution and delivery of each of the Transaction Documents
does not, and the performance of each of the Transaction Documents and the
compliance with the provisions thereof and the issuance, sale and delivery of
the Shares by the Company will not materially conflict with, or result in a
material breach or violation of the terms, conditions or provisions of, or
constitute a material default under, or result in the creation or imposition
of any material lien pursuant to the terms of, the Certificate of
Incorporation, the Certificate of Designations or Bylaws of the Company or
any statute, law, rule or regulation or any state or federal order, judgment
or decree (collectively, "Orders") or any indenture, mortgage, lease or other
material agreement or instrument to which the Company or any of its
properties is subject.

     3.4 ISSUANCE AND DELIVERY OF THE SHARES. The Shares, when issued in
compliance with the provisions of this Agreement, will be validly issued,
fully paid and nonassessable. The shares of Common Stock issuable upon
conversion of the Shares have been duly reserved for issuance upon conversion
of the Shares and, when issued in compliance with the Certificate of
Designation, will be

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validly issued, fully paid and non-assessable. Neither the issuance and
delivery of the Shares nor the issuance of the shares of Common Stock
issuable upon conversion of the Shares will be subject to preemptive or any
other similar rights of the stockholders of the Company or any liens or
encumbrances.

     3.5 SEC DOCUMENTS; FINANCIAL STATEMENTS. The Company has filed in a
timely manner all documents that the Company was required to file with the
Commission under Sections 13, 14(a) and 15(d) of the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), during the twelve (12) months
preceding the date of this Agreement. As of their respective filing dates,
all documents filed by the Company with the Commission (the "SEC DOCUMENTS")
complied in all material respects with the requirements of the Exchange Act
or the Securities Act of 1933, as amended (the "SECURITIES ACT"), as
applicable. The SEC Documents did not contain any untrue statement of
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company and the notes thereto included in the SEC Documents
(the "FINANCIAL STATEMENTS") comply as to form in all material respects with
applicable accounting requirements and with the published rules and
regulations of the Commission with respect thereto. The Financial Statements
have been prepared in accordance with generally accepted accounting
principles consistently applied and fairly present the consolidated financial
position of the Company and any subsidiaries at the dates thereof and the
consolidated results of their operations and consolidated cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal,
recurring adjustments).

     3.6 NO MATERIAL ADVERSE CHANGE. Except as otherwise disclosed herein,
since March 31, 2000, there have not been any changes in the assets,
liabilities, financial condition or operations of the Company from that
reflected in the Financial Statements except changes in the ordinary course
of business which have not had, either individually or in the aggregate, a
materially adverse effect on the Condition of the Company or the Subsidiary.

     3.7 LITIGATION. There are no actions, suits, proceedings, claims,
complaints, disputes, arbitrations or investigations pending or, to the
knowledge of the Company, threatened, at law, in equity, in arbitration or
before any Governmental Authority against the Company or the Subsidiary which
would, if adversely determined, have a material adverse effect on (a) the
Condition of the Company and the Subsidiary or (b) the ability of the Company
to perform its obligations under any of the Transaction Documents. No Order
has been issued by any court or other Governmental Authority against the
Company purporting to enjoin or restrain the execution, delivery or
performance of any of the Transaction Documents.

     3.8 GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENTS. No approval,
consent, compliance, exemption, authorization or other action by, or notice
to, or filing with any (i) Governmental Authority, (ii) NASD or (iii) other
Person (whether acting in an individual, fiduciary or other capacity), and no
lapse of a waiting period under a Requirement of Law, is necessary or is
required to be made or obtained by the Company or any of its Subsidiaries for
the execution, delivery and performance (including, without limitation, the
sale, issuance and delivery

                                      -6-
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of the Shares) by, or enforcement against, the Company of the Transaction
Documents and the consummation of the transactions contemplated hereby and
thereby.

     3.9 COMPLIANCE WITH LAWS.

         (a) The Company is in compliance with all Requirements of Law issued
by any court or Governmental Authority against the Company except for those
that would have no material adverse effect on the Company. To the Company's
knowledge, there is no existing or proposed Requirement of Law which could
reasonably be expected to prohibit or restrict the Company from, or otherwise
materially adversely effect the Company in, conducting its business in any
jurisdiction in which it now conducts or proposes, to conduct its business.

         (b) (i) The Company has all licenses, permits and approvals of any
Governmental Authority (collectively, "Permits") that are necessary for the
conduct of the business of the Company; (ii) such Permits are in full force
and effect; and (iii) no violations are or have been recorded in respect of
any Permit.

         (c) No material expenditure is presently required by the Company to
comply with any existing Requirement of Law.

     3.10 LIABILITIES. The Company does not have any material direct or
indirect obligation or liability ("LIABILITIES") other than (a) Liabilities
fully and adequately reflected or reserved against on the Financial
Statements and (b) Liabilities incurred since March 31, 2000 in the ordinary
course of business. The Company has no knowledge of any circumstance,
condition, event or arrangement that could reasonably be expected to give
rise hereafter to any Liabilities of the Company except in the ordinary
course of business.

     3.11 PRIVATE OFFERING. No form of general solicitation or general
advertising was used by the Company or its representatives in connection with
the offer or sale of the Shares. No registration of the Shares, pursuant to
the provisions of the Securities Act or any state securities or "blue sky"
laws, will be required by the offer, sale or issuance of the Shares. The
Company agrees that neither it, nor anyone acting on its behalf, shall offer
to sell the Shares or any other securities of the Company so as to require
the registration of the Shares pursuant to the provisions of the Securities
Act or any state securities or "blue sky" laws, unless such Shares or other
securities are so registered.

     3.12 BROKER'S, FINDER'S OR SIMILAR FEES. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by the
Company in connection with the transactions contemplated hereby based on any
agreement, arrangement or understanding with the Company or any action taken
by any such Person.

     3.13 SECTION 203. This Agreement and the transactions contemplated
hereby have been approved by all necessary action of the Board of Directors
in accordance with Section 203(a)(1) of the General Corporation Law of the
State of Delaware.

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                                   SECTION 4

                REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

         Each Purchaser hereby represents and warrants (severally as to
itself and not jointly) to the Company with respect to its purchase of the
Shares as follows:

4.1      INVESTMENT REPRESENTATIONS AND COVENANTS OF THE PURCHASERS.

         (a) This Agreement is made by the Company with the Purchaser in
reliance upon such Purchaser's representations and covenants made in this
Section 4, which by its execution of this Agreement the Purchaser hereby
confirms. The Purchaser represents that the Convertible Preferred to be
received will be acquired for investment for its own account, not as a
nominee or agent, and not with a view to the sale or distribution of any part
thereof, and that it has no present intention of selling, granting any
participation in or otherwise distributing the same. The Purchaser further
represents that it does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the Convertible
Preferred or any Common Stock acquired on conversion thereof.

         (b) The Purchaser understands and acknowledges that the offering of
the Convertible Preferred pursuant to this Agreement will not, and any
issuance of Common Stock on conversion thereof may not, be registered under
the Securities Act on the ground that the sale provided for in this Agreement
and the issuance of securities hereunder is exempt pursuant to Section 4(2)
of the Securities Act, and that the Company's reliance on such exemption is
predicated on the Purchasers' representations set forth herein.

         (c) The Purchaser covenants that in no event will it make any
disposition of any of the Convertible Preferred, or any Common Stock acquired
upon the conversion thereof, except in accordance with the Registration
Rights Agreement and pursuant to Rule 144 promulgated under the Securities
Act ("Rule 144") or otherwise in compliance with federal and state securities
laws. The Purchaser further covenants that it will not make any sale,
transfer or other disposition of the Convertible Preferred or the Common
Stock issuable upon conversion thereof in violation of the Securities Act,
the Exchange Act, or the rules of the Securities and Exchange Commission (the
"COMMISSION") promulgated thereunder.

         (d) The Purchaser represents that it is experienced in evaluating
companies similar to the Company, is able to fend for itself in transactions
such as the one contemplated by this Agreement, has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of its prospective investment in the Company, has the
ability to bear the economic risks of the investment and is an "accredited
investor" as defined by Regulation D promulgated under the Securities Act of
1933, as amended.

         (e) The Purchaser acknowledges and understands that the Convertible
Preferred, and any Common Stock acquired upon the conversion thereof, must be
held indefinitely unless it is

                                      -8-

<PAGE>

subsequently registered under the Securities Act or an exemption from such
registration is available, and that, except as otherwise provided in the
Registration Rights Agreement, the Company is under no obligation to register
either the Convertible Preferred or Common Stock.

         (f) The Purchaser acknowledges that it has reviewed a copy of Rule
144, which permits limited public resales of securities acquired in a
nonpublic offering, subject to the satisfaction of certain conditions. The
Purchaser understands that before the Convertible Preferred, or any Common
Stock issued upon conversion thereof, may be sold under Rule 144, the
following conditions must be fulfilled: (i) certain public information about
the Company must be available, (ii) the sale must occur at least one year
after the Purchaser purchased and paid for the Convertible Preferred, (iii)
the sale must be made in a broker's transaction and (iv) the number of shares
of Convertible Preferred sold must not exceed certain volume limitations.

         (g) The Purchaser acknowledges that in the event the applicable
requirements of Rule 144 are not met, registration under the Securities Act,
compliance with the Commission's Regulation A or another exemption from
registration will be required for any disposition of its stock. The Purchaser
understands that although Rule 144 is not exclusive, the Commission has
expressed its opinion that persons proposing to sell restricted securities
received in a private offering other than in a registered offering or
pursuant to Rule 144 will have a substantial burden of proof in establishing
that an exemption from registration is available for such offers or sales and
that such persons and the brokers who participate in the transactions do so
at their own risk.

     4.2 RECEIPT OF INFORMATION. The Purchaser has received and reviewed the
Transaction Documents and all exhibits thereto and the SEC Documents. The
Purchaser and its counsel have had access to and an opportunity to review all
documents and other materials requested of the Company; the Purchaser and its
counsel have been given an opportunity to ask any and all questions of, and
receive answers from, the Company concerning the terms and conditions of the
offering and to obtain all information it or they believe necessary or
appropriate to evaluate the suitability of an investment in the Convertible
Preferred; and, in evaluating the suitability of an investment in the
Convertible Preferred, it and they have not relied upon any representations
or other information (whether oral or written) other than as set forth in the
documents and answers referred to above.

     4.3 AUTHORIZATION. Each of the Transaction Documents when executed and
delivered by the Purchaser will constitute a valid and legally binding
obligation of the Purchaser, enforceable in accordance with its terms, except
(i) as limited by laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies and (ii) to the
extent that the enforceability of the indemnification provisions of the
Registration Rights Agreement may be limited by applicable law.

     4.4 BROKERS OR FINDERS. The Purchaser has not, and will not, incur,
directly or indirectly, as a result of any action taken by the Purchaser, any
liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement.

     4.5 TAX ADVISORS. The Purchaser has reviewed with its own tax advisors
the federal, state, local and foreign tax consequences of this investment,
where applicable, and the transactions

                                      -9-
<PAGE>

contemplated by this Agreement. The Purchaser is relying solely on such
advisors and not on any statements or representations of the Company or any
of its agents and understands that it (and not the Company) shall be
responsible for the Purchaser's own tax liability that may arise as a result
of this investment or the transactions contemplated by this Agreement.

     4.6 INVESTOR COUNSEL. The Purchaser acknowledges that it has had the
opportunity to review the Transaction Documents, the exhibits and the
schedules attached hereto and thereto and the transactions contemplated by
the Transaction Documents with its own legal and investment counsel. The
Purchaser is relying solely on such counsel and not on any statements or
representations of the Company or any of its agents for legal or investment
advice with respect to this investment or the transactions contemplated by
the Transaction Documents.

     4.7 HSR COMPLIANCE

         (a) Each Purchaser is its own "ultimate parent entity" as defined in
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended or the
rules and regulations promulgated thereto (together, the "HSR Act").

         (b) Each Purchaser, other than GAP LP, will hold less than
$15,000,000 in voting securities of the Company following execution of this
Agreement, as valued under the HSR Act.

         (c) GAP LP has less than $10,000,000 in assets and less than
$10,000,000 in annual revenue, as defined under the HSR Act.

                                   SECTION 5

                     CONDITIONS TO CLOSING OF THE PURCHASERS

         The Purchasers' obligations to purchase the Shares at the Closing
and to perform any obligations hereunder are, at the option of the
Purchasers, subject to the fulfillment of the following conditions:

     5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 3 hereof shall be true and correct
in all material respects on the Closing Date as if made on such date.

     5.2 COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to the Closing Date
shall have been performed or complied with in all material respects.

     5.3 COMPLIANCE CERTIFICATE. The Company shall have delivered to the
Purchasers a certificate of the Company in the form of EXHIBIT D hereto,
executed by the President of the Company, dated the Closing Date, and
certifying, among other things, to the fulfillment of the conditions
specified in Sections 5.1 and 5.2 of this Agreement.

                                      -10-
<PAGE>

     5.4 BLUE SKY. The Company shall have obtained all necessary Blue Sky law
permits and qualifications, or have the availability of exemptions therefrom,
required by any state for the offer and sale of the Convertible Preferred and
the Common Stock issuable upon conversion of the Convertible Preferred.

     5.5 LEGAL MATTERS. All material matters of a legal nature that pertain
to the Transaction Documents and the transactions contemplated hereby and
thereby, shall have been reasonably approved by special counsel to the
Purchasers.

     5.6 OPINION OF COUNSEL. The Purchasers shall have received an opinion of
Wilson Sonsini Goodrich & Rosati, dated the Closing Date, relating to the
transactions contemplated by or referred to herein, substantially in the form
attached hereto as EXHIBIT F.

     5.7 REGISTRATION RIGHTS AGREEMENT. The Company, each Purchaser and a
majority of the Original Holders (as defined therein) shall have entered into
the Registration Rights Agreement in substantially the form attached hereto
as EXHIBIT E.

     5.8 SECRETARY'S CERTIFICATE. The Purchasers shall have received a
certificate from the Company, in form and substance satisfactory to the
Purchasers, dated the Closing Date and signed by the Secretary or an
Assistant Secretary of the Company, certifying (a) that the attached copies
of the Certificate of Designations, the Bylaws and resolutions of the Board
of Directors of the Company approving each of the Transaction Documents to
which the Company is a party, are true, complete and correct and remain
unamended and in full force and effect and (b) as to the incumbency and
specimen signature of each officer of the Company executing each Transaction
Document and any other document delivered at the Closing on behalf of the
Company.

     5.9 DOCUMENTS. The Purchasers shall have received true, complete and
correct copies of such documents as they may reasonably request in connection
with or relating to the sale of the Shares and the transactions contemplated
hereby, all in form and substance reasonably satisfactory to the Purchasers.

     5.10 FILING OF THE CERTIFICATE OF DESIGNATIONS. The Certificate of
Designations shall have been filed by the Company with the Secretary of State
of the State of Delaware in accordance with the General Corporation Law of
the State of Delaware.

     5.11 SHARES. The Company shall have delivered to the Purchasers
certificates in definitive form representing the number of Shares set forth
opposite such Purchaser's name on EXHIBIT A hereto, registered in the name of
such Purchaser.

                                      -11-
<PAGE>

                                   SECTION 6

                        CONDITIONS TO CLOSING OF COMPANY

         The Company's obligation to sell and issue the Shares pursuant to
Section 1.2 hereof and to perform any obligations hereunder, is, at the
option of the Company, subject to the fulfillment as of the Closing Date of
the following conditions:

     6.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by the Purchasers in Section 4 hereof shall be true and correct when
made, and shall be true and correct on the Closing Date.

     6.2 BLUE SKY. The Company shall have obtained all necessary Blue Sky law
permits and qualifications, or have the availability of exemptions therefrom,
required by any state for the offer and sale of the Shares and the Common
Stock issuable upon conversion of the Shares.

     6.3 LEGAL MATTERS. All material matters of a legal nature that pertain
to the Transaction Documents and the transactions contemplated hereby and
thereby, shall have been reasonably approved by counsel to the Company. At
the time of the Closing, the purchase of the Shares shall be legally
permitted by all laws and regulations to which each Purchaser and the Company
are subject.

     6.4 BOARD AND STOCKHOLDER APPROVAL. All approvals of the Company's Board
of Directors and Stockholders necessary for performance of the transactions
contemplated by the Transaction Documents shall have been obtained.

     6.5 REGISTRATION RIGHTS AGREEMENTS. The Company, each Purchaser and a
majority of the Original Holders (as defined therein) shall have entered into
the Registration Rights Agreement in substantially the form attached hereto
as EXHIBIT E.

                                   SECTION 7

                      AFFIRMATIVE COVENANTS OF THE COMPANY

         The Company hereby covenants and agrees with the Purchasers with
respect to this Section 7 so long as any shares of Convertible Preferred or
shares of Common Stock issuable upon the conversion thereof are outstanding
as follows:

     7.1 SEC FILINGS. From and after the date of this Agreement, the Company
agrees that it will use commercially reasonable efforts to file with the
Commission, within the time periods specified in the Commission's rules and
regulations for as long as they are applicable to the Company, (i) all
quarterly and annual financial information required to be filed with SEC on
Forms 10-Q and 10-K, (ii) all current reports required to be filed with the
Commission on Form 8-K and (iii) any other information required to be filed
with the Commission.

                                      -12-
<PAGE>

     7.2 RESERVATION OF COMMON STOCK AND PREFERRED STOCK. The Company hereby
covenants and agrees that it shall at all times reserve and keep available
out of its authorized shares of Common Stock, solely for the purpose of issue
or delivery upon conversion of the Shares, as provided in the Certificate of
Designations, the maximum number of shares of Common Stock that may be
issuable or deliverable upon such conversion. The Company shall issue such
shares of Common Stock in accordance with the terms of the Certificate of
Designations and otherwise comply with the terms thereof.

     7.3 REGISTRATION AND LISTING. If any shares of Common Stock required to
be reserved for purposes of conversion of the Shares, as provided in the
Certificate of Designations, require registration with or approval of any
Governmental Authority under any Federal or state or other applicable law
before such shares of Common Stock may be issued or delivered upon conversion
or exercise, the Company will in good faith and as expeditiously as possible
cause such shares of Common Stock to be duly registered or approved, as the
case may be. So long as the shares of Common Stock are quoted on the NASDAQ
or listed on any national securities exchange, the Company will, if permitted
by the rules of such system or exchange, quote or list and keep quoted or
listed on such system or exchange, upon official notice of issuance, all
shares of Common Stock issuable or deliverable upon conversion of the Shares.

     7.4 USE OF PROCEEDS. The Company shall use the proceeds from the sale of
the Shares to the Purchasers to fund the Company's working capital.

                                   SECTION 8

                                 INDEMNIFICATION

     8.1 INDEMNIFICATION. Except as otherwise provided in this Section 8, the
Company (the "INDEMNIFYING PARTY") agrees to indemnify, defend and hold
harmless each of the Purchasers and its Affiliates and their respective
officers, directors, agents, employees, subsidiaries, partners, members and
controlling persons (each, an "INDEMNIFIED PARTY") to the fullest extent
permitted by law from and against any and all losses, Claims, or written
threats thereof (including, without limitation, any Claim by a third party),
damages, expenses (including reasonable fees, disbursements and other charges
of counsel incurred by the Indemnified Party in any action between the
Indemnifying Party and the Indemnified Party or between the Indemnified Party
and any third party or otherwise) or other liabilities (collectively,
"LOSSES") resulting from or arising out any breach of any representation or
warranty, covenant or agreement by the Company in this Agreement or the other
Transaction Documents; PROVIDED however, that if and to the extent that such
indemnification is unenforceable for any reason, the Indemnifying Party shall
make the maximum contribution to the payment and satisfaction of such Losses
which shall be permissible under applicable laws. In connection with the
obligation of the Indemnifying Party to indemnify for expenses as set forth
above, the Indemnifying Party shall, upon presentation of appropriate
invoices containing reasonable detail, reimburse each Indemnified Party for
all such expenses (including reasonable fees, disbursements and other charges
of counsel incurred by the Indemnified Party in any action between

                                      -13-
<PAGE>

the Indemnifying Party and the Indemnified Party or between the Indemnified
Party and any third party) as they are incurred by such Indemnified Party;
PROVIDED HOWEVER, that if an Indemnified Party is reimbursed under this
Section 8 for any expenses, such reimbursement of expenses shall be refunded
to the extent it is finally judicially determined that the Losses in question
resulted primarily from the willful misconduct or gross negligence of such
Indemnified Party.

     8.2 NOTIFICATION. Each Indemnified Party under this Section 8 shall,
promptly after the receipt of notice of the commencement of any Claim against
such Indemnified Party in respect of which indemnity may be sought from the
Indemnifying Party under this Section 8, notify the Indemnifying Party in
writing of the commencement thereof. The omission of any Indemnified Party to
so notify the Indemnifying Party of any such action shall not relieve the
Indemnifying Party from any liability which it may have to such Indemnified
Party (a) other than pursuant to this Section 8 or (b) under this Section 8
unless, and only to the extent that, such omission results in the
Indemnifying Party's forfeiture of substantive rights or defenses. In case
any such Claim shall be brought against any Indemnified Party, and it shall
notify the Indemnifying Party of the commencement thereof, the Indemnifying
Party shall be entitled to assume the defense thereof at its own expense,
with counsel satisfactory to such Indemnified Party in its reasonable
judgment; PROVIDED, HOWEVER, that any Indemnified Party may, at its own
expense, retain separate counsel to participate in such defense at its own
expense. Notwithstanding the foregoing, in any Claim in which both the
Indemnifying Party, on the one hand, and an Indemnified Party, on the other
hand, are, or are reasonably likely to become, a party, such Indemnified
Party shall have the right to employ separate counsel and to control its own
defense of such Claim if, in the reasonable opinion of counsel to such
Indemnified Party, either (x) one or more defenses are available to the
Indemnified Party that are not available to the Indemnifying Party or (y) a
conflict or potential conflict exists between the Indemnifying Party, on the
one hand, and such Indemnified Party, on the other hand, that would make such
separate representation advisable; PROVIDED, HOWEVER, that the Indemnifying
Party (i) shall not be liable for the fees and expenses of more than one
counsel to all Indemnified Parties and (ii) shall reimburse the Indemnified
Parties for all of such fees and expenses of such counsel incurred in any
action between the Indemnifying Party and the Indemnified Parties or between
the Indemnified Parties and any third party, as such expenses are incurred.
The Indemnifying Party agrees that it will not, without the prior written
consent of the Purchasers, settle, compromise or consent to the entry of any
judgment in any pending or threatened Claim relating to the matters
contemplated hereby (if any Indemnified Party is a party thereto or has been
actually threatened to be made a party thereto) unless such settlement,
compromise or consent includes an unconditional release of each Indemnified
Party from all liability arising or that may arise out of such Claim. The
Indemnifying Party shall not be liable for any settlement of any Claim
effected against an Indemnified Party without its written consent, which
consent shall not be unreasonably withheld. The rights accorded to an
Indemnified Party hereunder shall be in addition to any rights that any
Indemnified Party may have at common law, by separate agreement or otherwise;
PROVIDED, HOWEVER, that notwithstanding the foregoing or anything to the
contrary contained in this Agreement, nothing in this Section 8 shall
restrict or limit any rights that any Indemnified Party may have to seek
equitable relief.

                                      -14-
<PAGE>

     8.3 CONTRIBUTION. If the indemnification provided for in this Section 8
from the Indemnifying Party is unavailable to an Indemnified Party hereunder
in respect of any Losses referred to herein, then the Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses in such
proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and Indemnified Party in connection with the actions which
resulted in such Losses, as well as any other relevant equitable
considerations. The relative faults of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the Losses
referred to above shall be deemed to include, subject to the limitations set
forth in Sections 8.1 and 8.2, any legal or other fees, charges or expenses
reasonably incurred by such party in connection with any investigations or
proceeding.

     8.4 LIMITATION ON INDEMNIFICATION. Anything in this Agreement to the
contrary notwithstanding, no indemnification payment shall be made to an
Indemnified Party pursuant to Section 8 of this Agreement until the amounts
which the Indemnified Party would otherwise be entitled to receive as
indemnification under this Agreement aggregate at least $1,000,000, at which
time the Indemnified Party shall be entitled to receive any such payments and
any subsequent payments in full. Anything in this Agreement to the contrary
notwithstanding, the Indemnifying Party's liability pursuant to this Section
8 shall in no event exceed $30,000,000.

                                   SECTION 9

                                  MISCELLANEOUS

     9.1 GOVERNING LAW. This Agreement shall be governed in all respects by
and in accordance with the laws of the State of Delaware, without regard to
the principles of conflicts of law thereof. The parties expressly stipulate
that any litigation under this Agreement shall be brought in the state courts
of the County of Alameda, California or the County of New York, New York and
in the United States District Court for the Northern District of California
or the Southern District of New York. The parties agree to submit to the
jurisdiction and venue of any of those courts.

     9.2 SURVIVAL. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by a Purchaser and the
closing of the transactions contemplated hereby.

     9.3 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties
hereto, provided, however, that the rights of a Purchaser to purchase the
Convertible Preferred shall not be assignable without the consent of the
Company, except subject to applicable securities laws, the Purchasers may
assign any of their rights under any of the Transaction

                                      -15-
<PAGE>

Documents to any of their respective Affiliates; provided however, the
Company shall not be obligated to register transfers to more than 15 such
transferees, without prior written consent not to be unreasonably withheld.

     9.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other documents
delivered pursuant hereto at the Closing constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof, and no party shall be liable or bound to any other party
in any manner by any warranties, representations or covenants except as
specifically set forth herein or therein. Except as expressly provided
herein, neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the
party against whom enforcement of any such amendment, waiver, discharge or
termination is sought; provided, however, that any provisions hereof may be
amended, waived, discharged or terminated, on behalf of all holders, upon the
written consent of the Company and the holders of a majority of the Common
Stock issued or issuable upon the conversion of the Convertible Preferred.

     9.5 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by
messenger, addressed (a) if to a Purchaser, to such Purchaser's address set
forth on the Schedule of Purchasers, or at such other address as the
Purchaser shall have furnished to the Company in writing with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New
York, New York 10019-6064, Telecopy: (212) 757-3990, Attention: Douglas A.
Cifu, or (b) if to any other holder of any Shares, at such address as such
holder shall have furnished the Company in writing, or, until any such holder
so furnishes an address to the Company, then to and at the address of the
last holder of such Shares who has so furnished an address to the Company, or
(c) if to the Company, one copy should be sent to its address set forth at
the beginning of this Agreement and addressed to the attention of the
President of the Company, or at such other address as the Company shall have
furnished to the Purchasers with a copy to Wilson Sonsini Goodrich & Rosati,
650 Page Mill Road, Palo Alto, California 94304, Telecopy: (415) 493-6811,
Attention: Brian Erb, Esq.

     Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or
72 hours after the same has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed and mailed as
aforesaid.

     9.6 DELAYS OR OMISSIONS. Except as expressly provided herein, no delay
or omission to exercise any right, power or remedy accruing to any holder of
any Shares, upon any breach or default of the Company under this Agreement,
shall impair any such right, power or remedy of such holder nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of any
holder of any breach or default under this Agreement or any waiver on the
part of any holder of any

                                      -16-
<PAGE>

provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
holder, shall be cumulative and not alternative.

     9.7 CALIFORNIA CORPORATE 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 AN EXEMPTION FROM
SUCH QUALIFICATION IS AVAILABLE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, OR SUCH
EXEMPTION BEING AVAILABLE.

     9.8 EXPENSES. Each of the Company and the Purchasers shall bear its own
expenses and legal fees incurred with respect to this Agreement and the
transactions contemplated hereby.

     9.9 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be enforceable against the party actually
executing such counterpart, and all of which together shall constitute one
instrument.

     9.10 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective
if it materially changes the economic benefit of this Agreement to any party.

     9.11 FURTHER ASSURANCES. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any Governmental Authority
or any other Person) as may be reasonably required or desirable to carry out
or to perform the provisions of this Agreement.

     9.12 PUBLICITY. Except as may be required by applicable Requirement of
Law, none of the parties hereto shall issue a publicity release or public
announcement or otherwise make any disclosure concerning this Agreement, the
transactions contemplated hereby, the Purchases or the business, technology
or financial affairs of the Company, without prior approval by the other
parties hereto; PROVIDED, HOWEVER, that nothing in this Agreement shall
restrict any of the Purchasers from disclosing information (a) that is
already publicly available, (b) that was known to such Purchaser on a
non-confidential basis prior to its disclosure by the Company as shown by
written records of the Purchaser, (c) that may be required or appropriate in
response to any summons or subpoena or in connection with any litigation,
PROVIDED that such Purchaser will notify the Company in advance of such
disclosure so as to permit the Company to seek a protective order or
otherwise contest such disclosure, and such Purchaser will cooperate, at the
expense of the Company, with the Company in pursuing any such protective
order, (d) to such Purchaser's or the Company's officers, directors,
shareholders, advisors, employees, members, partners, controlling persons,
auditors or counsel who have good reason to know such information or (e) to
Persons from whom releases, consents or

                                      -17-
<PAGE>

approvals are requires, or to whom notice is required to be provided,
pursuant to the transactions contemplated by the Transaction Documents; and
PROVIDED FURTHER, that GAP LLC may disclose on its worldwide web page
WWW.GAPARTNERS.COM, the name of the Company, the name of the Chief Executive
Officer of the Company, a brief description of the business of the Company
and the aggregate amount of the Purchasers' investment in the Company. If any
announcement is required by law to be made by any party hereto, prior to
making such announcement such party will deliver a draft of such announcement
to the other parties and shall give the other parties an opportunity to
comment thereon.

         IN WITNESS WHEREOF, the foregoing Agreement is hereby executed as of
the date first above written.

                                       PROBUSINESS SERVICES, INC.

                                       By:____________________________________
                                              Thomas H. Sinton, President

                                      -18-
<PAGE>

                           PROBUSINESS SERVICES, INC.

           6.9% SENIOR CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

     IN WITNESS WHEREOF, the foregoing Agreement is hereby executed as of the
date first above written.

                                       GENERAL ATLANTIC PARTNERS 70, L.P.

                                       By:   GENERAL ATLANTIC PARTNERS, LLC,
                                              its General Partner

                                             By:______________________________
                                                Name:
                                                Title: A Managing Member

                                       GAP COINVESTMENT PARTNERS II, L.P.

                                       By:____________________________________
                                          Name:
                                          Title: A General Partner

                                       GAPSTAR, LLC

                                       By:   GENERAL ATLANTIC PARTNERS, LLC,
                                              its Managing Member

                                             By:______________________________
                                                Name:
                                                Title: A Managing Member

                                      -19-
<PAGE>

                                    EXHIBIT A

                           PROBUSINESS SERVICES, INC.

                             SCHEDULE OF PURCHASERS

<TABLE>
<CAPTION>

               Name and Address                              Number of Shares            Total Purchase Price
-----------------------------------------------------     ------------------------     ------------------------
<S>                                                       <C>                          <C>
General Atlantic Partners 70, L.P.                                  915,515                  $24,261,147.50
General Atlantic Service Corporation
3 Pickwick Plaza
Greenwich, Connecticut 06830
Telecopy: (203) 622-8818
Attn: Mr. David Hodgson

GAP Coinvestment Partners II, L.P.                                  145,805                   $3,863,832.50
c/o General Atlantic Service Corporation
3 Pickwick Plaza
Greenwich, Connecticut 06830
Telecopy: (203) 622-8818
Attn: Mr. David Hodgson

GapStar, LLC                                                         70,755                   $1,875,007.50
c/o General Atlantic Service Corporation
3 Pickwick Plaza
Greenwich, Connecticut 06830
Telecopy: (203) 622-8818
Attn: Mr. David Hodgson

                                                          ------------------------     ------------------------
                                               Total              1,132,075                  $29,999,987.50
</TABLE>

                                      -20-<PAGE>

                                                                   Exhibit 10.1

                                                                  EXECUTION COPY

                                 FIFTH AMENDMENT

                            Dated as of June 9, 2000

     This FIFTH AMENDMENT (the "Fifth Amendment") among The Donna Karan Company,
a New York general partnership, The Donna Karan Company Store, G.P., a New York
general partnership, Donna Karan Studio, a New York general partnership, and DK
Footwear Partners, a New York general partnership (collectively, the
"Borrowers"), the financial institutions from time to time parties thereto as
lenders (the "Lenders"), the financial institutions from time to time parties
thereto as issuing banks (the "Issuing Banks"), Citibank, N.A., in its capacity
as administration agent for the Lenders and the Issuing Banks (the
"Administrative Agent"), The Chase Manhattan Bank and Nationsbank, N.A., in
their capacity as co-agents (the "Co-Agents").

                             PRELIMINARY STATEMENTS:

     (1) The Borrowers, the Lenders, the Issuing Banks, the Co-Agents and the
Administrative Agent have entered into a Second Amended and Restated Credit
Agreement dated as of January 29, 1998, as amended from time to time (as so
amended, the "Credit Agreement"). Unless otherwise defined herein, the terms
defined in the Credit Agreement shall be used herein as therein defined.

     (2) The Borrowers and the Lenders have agreed to amend the Credit Agreement
as hereinafter set forth.

     SECTION 1. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is,
effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 2 hereof, hereby amended as follows:

         (a) The reference to $70,000,000 in the lead-in language in SECTION
2.03 of the Credit Agreement is deleted and in substitution therefor the amount
of "$90,000,000" is added.

         (b) The reference to $70,000,000 in clause (I) of SECTION
2.03(A)(II)(A) of the Credit Agreement is deleted and in substitution therefor
the amount of "$90,000,000" is added.

     SECTION 2. CONDITIONS OF EFFECTIVENESS. This Fifth Amendment shall become
effective when the Administrative Agent shall have received counterparts of this
Fifth Amendment executed by the Borrowers and the Requisite Lenders.

     SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS. Each Borrower
represents and warrants as follows:
<PAGE>

         (a) After giving effect to this Fifth Amendment, all of the
representations and warranties contained in Section 6.01 of the Credit Agreement
and in the other Loan Documents shall be true in all material respects.

         (b) After giving effect to this Fifth Amendment, no Default or Event of
Default shall have occurred and be continuing.

     SECTION 4. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS. (a) Upon the
effectiveness of this Fifth Amendment, on and after the date hereof each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or
words of like import referring to the Credit Agreement, and each reference in
the other Loan Documents to "the Credit Agreement", "thereunder", "thereof" or
words of like import referring to the Credit Agreement, shall mean and be a
reference to the Credit Agreement as amended hereby.

     (b) Except as specifically amended above, the Credit Agreement and all
other Loan Documents, are and shall continue to be in full force and effect and
are hereby in all respects ratified and confirmed. Without limiting the
generality of the foregoing, the Loan Documents and all of the Collateral
described therein do and shall continue to secure the payment of all obligations
of the Borrowers under the Credit Agreement, the Notes and the other Loan
Documents, in each case as amended hereby.

     (c) The execution, delivery and effectiveness of this Fifth Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Lender or the Agent under any of the Loan Documents, nor
constitute a waiver of any provision of any of the Loan Documents.

     SECTION 5. EXECUTION IN COUNTERPARTS. This Fifth Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement.

     SECTION 6. GOVERNING LAW. This Fifth Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
<PAGE>

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

                            THE DONNA KARAN COMPANY

                            By:   Donna Karan International Inc., a general
                                  partner

                                  By: /s/ JOSEPH B. PARSONS
                                     -------------------------------------------
                                  Title:
                                        ----------------------------------------

                            DONNA KARAN STUDIO

                            By:  Full Requirements Merchandising, Inc., a
                                 general partner

                                  By: /s/ JOSEPH B. PARSONS
                                     -------------------------------------------
                                  Title:
                                        ----------------------------------------

                            THE DONNA KARAN COMPANY STORE, G.P.

                            By:   Donna Karan International Inc., a general
                                  partner

                                  By: /s/ JOSEPH B. PARSONS
                                     -------------------------------------------
                                  Title:
                                        ----------------------------------------

                            DK FOOTWEAR PARTNERS

                            By:   Donna Karan International Inc., a general
                                  partner

                                  By: /s/ JOSEPH B. PARSONS
                                     -------------------------------------------
                                  Title:
                                        ----------------------------------------

<PAGE>

                            CITIBANK, N.A., as Administrative Agent and Lender

                            By: /s/
                               -------------------------------------------------
                                 Vice President

                            THE CHASE MANHATTAN BANK, as Co-Agent
                                   and Lender

                            By: /s/
                               -------------------------------------------------
                               Title:

                            BANKAMERICA BUSINESS CREDIT, as Co-Agent
                            and Lender

                            By: /s/
                               -------------------------------------------------
                               Title:

                            PNC BANK NATIONAL ASSOCIATION

                            By: /s/
                               -------------------------------------------------
                               Title:

                            THE CIT GROUP/COMMERCIAL SERVICES, INC.

                            By: /s/
                               -------------------------------------------------
                               Title:
<PAGE>

                            NATIONAL CITY COMMERCIAL FINANCE, INC.

                            By: /s/
                               -------------------------------------------------
                               Title:

                            JACKSON NATIONAL LIFE INSURANCE CO.,
                            By:  PPM FINANCE, INC., its Attorney-in-Fact

                            By: /s/
                               -------------------------------------------------
                               Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}]]