Document:

Seventh Amended and Restated Investors Rights Agreement

 EXHIBIT 4.2 
  

SEVENTH AMENDED AND RESTATED 
  
 INVESTORS’ RIGHTS AGREEMENT 
  
 MOTIVE COMMUNICATIONS, INC. 
  
 December 2, 2003 
  

 TABLE OF CONTENTS 
  

	 	  	Page

	 1. Registration Rights
	  	2
	 1.1   Definitions
	  	2
	 1.2   Request for Registration
	  	3
	 1.3   Company Registration
	  	4
	 1.4   Obligations of the Company
	  	5
	 1.5   Furnish Information
	  	6
	 1.6   Expenses of Demand Registration
	  	6
	 1.7   Expenses of Company Registration
	  	6
	 1.8   Underwriting Requirements
	  	7
	 1.9   Delay of Registration
	  	7
	 1.10 Indemnification
	  	7
	 1.11 Reports Under Securities Exchange Act of 1934
	  	9
	 1.12 Form S-3 Registration
	  	10
	 1.13 Assignment of Registration Rights
	  	11
	 1.14 “Market Stand-Off” Agreement Rights
	  	11
	 1.15 Limitations on Subsequent Registration Rights
	  	12
	 1.16 Termination of Registration Rights
	  	12
		
	 2. Covenants of the Company
	  	13
	 2.1   Delivery of Financial Statements
	  	13
	 2.2   Inspection
	  	13
	 2.3   Termination of Information and Inspection Covenants
	  	13
	 2.4   Key–Man Insurance
	  	14
	 2.5   Right of First Offer
	  	14
	 2.6   Assignments of Rights of First Refusal
	  	15
	 2.7   Right to Participate in Initial Public Offering
	  	16
	 2.8   Voting Provisions
	  	18
		
	 3. Miscellaneous
	  	19
	 3.1   Successors and Assigns
	  	20
	 3.2   Governing Law
	  	20
	 3.3   Counterparts
	  	20
	 3.4   Titles and Subtitles
	  	20
	 3.5   Notices
	  	20
	 3.6   Expenses
	  	21
	 3.7   Amendments and Waivers
	  	21
	 3.8   Severability
	  	21
	 3.9   Aggregation of Stock
	  	21
	 3.10 Entire Agreement
	  	21
	 3.10 Further Assurances
	  	21
		
	 SCHEDULE A Schedule of Investors
	  	 
	 SCHEDULE B Schedule of Founders
	  	 

  

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 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 
  
 THIS SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (this
“Agreement”) is made as of December 2, 2003, by and among Motive Communications, Inc., a Delaware corporation (the “Company”), and the investors listed on Schedule A hereto, each of which is herein referred to as an
“Investor,” and the founders listed on Schedule B hereto, each of which is herein referred to as a “Founder”. 
  
 RECITALS 
  
 WHEREAS, certain of the Investors (the “Existing Investors”) have been issued (i) Series A Preferred Stock, par value $.001 per share, of the
Company (“Series A Preferred Stock”) pursuant to that certain Series A Preferred Stock Purchase Agreement, dated as of June 6, 1997, (ii) Series B Preferred Stock, par value $.001 per share, of the Company (“Series B Preferred
Stock”) pursuant to that certain Series B Preferred Stock Purchase Agreement, dated as of July 15, 1998, (iii) Series C Preferred Stock, par value $.001 per share, of the Company (“Series C Preferred Stock”) pursuant to that certain
Series C Preferred Stock Purchase Agreement, dated as of June 24, 1999, (iv) Series D-1 Preferred Stock, par value $.001 per share, of the Company (“Series D-1 Preferred Stock”), Series D-2 Preferred Stock, par value $.001 per share, of
the Company (“Series D-2 Preferred Stock”), and Series D-3 Preferred Stock, par value $.001 per share, of the Company (“Series D-3 Preferred Stock”) pursuant to that certain Agreement and Plan of Reorganization by and between the
Company and Ventix Systems Inc., dated as of January 10, 2000, (v) Series E-1 Preferred Stock, par value $.001 per share, of the Company (“Series E-1 Preferred Stock”) and Series E-2 Preferred Stock, par value $.001 per share, of the
Company (“Series E-2 Preferred Stock”) pursuant to that certain Asset Purchase Agreement by and between the Company and Question Technologies, Inc., dated as of August 15, 2001, as amended by the First Amendment to Asset Purchase
Agreement, dated as of August 26, 2001, and (vi) Series F-1 Preferred Stock, par value $.001 per share, of the Company (“Series F-1 Preferred Stock”), Series F-2 Preferred Stock, par value $.001 per share, of the Company (“Series F-2
Preferred Stock”) and Series F-3 Preferred Stock, par value $.001 per share, of the Company (“Series F-3 Preferred Stock”) pursuant to that certain Agreement and Plan of Merger, dated as of November 6, 2002, by and among the Company,
T-Bone Acquisition, Inc., a Texas corporation, and BroadJump, Inc., a Texas corporation; 
  
 WHEREAS, the Existing Investors possess certain registration rights, information rights and other rights pursuant to that certain Sixth Amended and Restated Investors’ Rights Agreement, dated as of March 17, 2003
(the “Prior Agreement”); 
  
 WHEREAS, the Board of
Directors of the Company has determined that it is advisable and in the best interests of the Company and its stockholders to amend the Prior Agreement as the Company intends to pursue an underwritten initial public offering (the
“Offering”) of shares of Common Stock of the Company; and 
  

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 WHEREAS, in connection with the potential Offering and the transactions related thereto, the Company and
the Existing Investors desire to enter into this Agreement to amend and restate the Prior Agreement so as to modify the rights contained therein to be as set forth herein; 
  
 NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS: 
  
 1.    Registration Rights.    The Company covenants and agrees as follows:

  
 1.1    Definitions.    For purposes of this Section 1: 
  
 (a)    The term “Act” means the Securities Act of 1933, as amended. 
  
 (b)    The term “Affiliate” means, with respect
to any Person, any other Person that, directly or indirectly, through one or more intermediaries, is controlled by such Person. For the purposes of this definition, “control” (including, with correlative meaning, the term “controlled
by”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract
or otherwise. 
  
 (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 (as defined below) that 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 (as defined below) 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 “Person” means any individual, corporation, limited liability company, partnership, limited partnership, association, trust or any other entity or organization of any kind or character.

  
 (g)    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. 
  
 (h)    The term “Registrable Securities” means (i) (A) the Common Stock issuable or issued upon conversion of the Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock, the Series
D-1 Preferred Stock, the Series D-2 Preferred Stock, the Series D-3 Preferred Stock (such Series D-1 Preferred Stock, Series D-2 Preferred Stock and Series D-3 Preferred Stock are collectively referred to herein as the “Series D Preferred
Stock”), the Series E-1 Preferred Stock, the Series E-2 Preferred Stock (such Series E-1 Preferred Stock and Series E-2 Preferred Stock are collectively referred to herein as the “Series E Preferred 
  

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 Stock”), the Series F-1 Preferred Stock, the Series F-2 Preferred Stock or the Series F-3 Preferred Stock (such
Series F-1 Preferred Stock, Series F-2 Preferred Stock and Series F-3 Preferred Stock are collectively referred to herein as the “Series F Preferred Stock”), and (B) the Common Stock issuable or issued upon exercise of those certain
Warrants to Purchase Shares issued in connection with the Unit Purchase Agreement, dated on or about October 11, 2002, (ii) the shares of Common Stock issued to the Founders; provided, however, that such shares of Common Stock shall not be deemed
Registrable Securities and the aforementioned individuals shall not be deemed Holders for the purposes of Sections 1.2, 1.12, 1.15 and 3.7 (other than the proviso in Section 3.7), and (iii) any Common Stock of the Company issued as (or issuable upon
the conversion or exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange for, or in replacement of the shares referenced in (i) and (ii) above, excluding in all cases,
however, any Registrable Securities sold by a person in a transaction in which his rights under this Section 1 are not assigned. 
  
 (i)    The number of shares of “Registrable Securities then outstanding” shall be determined by the number of shares of
Common Stock outstanding that are, and the number of shares of Common Stock issuable pursuant to then exercisable or convertible securities that are, Registrable Securities. 
  
 (j)    The term “SEC” shall mean the Securities and Exchange Commission. 
  
 1.2    Request for Registration. 
  
 (a)    If the Company shall receive a written request
from the Holders of two-thirds of the Registrable Securities then outstanding that the Company file a registration statement under the Act covering the registration of at least forty percent (40%) of the Registrable Securities then outstanding (or a
lesser percent if the anticipated aggregate offering price, net of underwriting discounts and commissions, would exceed $15,000,000), then the Company shall: 
  

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

  

	 	(ii)	 	effect as soon as practicable, and in any event within sixty (60) days of the receipt of such request, the registration under the Act of all Registrable Securities that the Holders
request to be registered, subject to the limitations of subsection 1.2(b), within twenty (20) days of the mailing of such notice by the Company in accordance with Section 3.5. 

  
 (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 a majority in interest of the Initiating Holders and shall be reasonably acceptable to the Company. 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 

  

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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 that 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. 
  
 (c)    Notwithstanding 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 one hundred twenty
(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 (12) 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 pursuant to this Section 1.2 and such registrations have been declared or ordered effective; 

  

	 	(ii)	 	Within twelve (12) months of the effective date of a registration statement filed pursuant to this Section 1.2; or 

  

	 	(iii)	 	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) a registration statement filed pursuant to Section 1.3 or Section 1.12 hereof or (B) the first registration statement by the Company that covers Common Stock to be sold on its behalf to the public in an underwritten
public offering; provided that in both cases the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective. 

  
 1.3    Company Registration.    If the Company proposes to register
(including for this purpose a registration effected by the Company for stockholders) any of its stock or other securities under the Act in connection with the public offering of such securities solely for cash (other than the (a) first registration
effected by the Company that covers Common Stock to be sold on its behalf to the public in an underwritten public offering, (b) a registration relating solely 
  

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 to the sale of securities to participants in a Company stock plan, (c) a registration on any form that 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 (d) a registration in which the only Common Stock being registered is Common Stock issuable upon
conversion of debt securities that 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, 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: 
  
 (a)    Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for a period of up to one hundred twenty (120) days or until the distribution contemplated in the Registration Statement has been completed. 
  
 (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 the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them. 
  
 (d)    Use its best 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. 
  
 (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 
  

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 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. 
  
 (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. 
  
 (a)    It shall be a condition precedent to the obligations of the Company to take any action pursuant
to this Section 1 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such
securities as shall be required to effect the registration of such Holder’s Registrable Securities. 
  
 (b)    The Company shall have no obligation with respect to any registration requested pursuant to Section 1.2 or Section 1.12 if, due
to the operation of subsection 1.5(a), the number of shares or the anticipated aggregate offering price of the Registrable Securities to be included in the registration does not equal or exceed the number of shares or the anticipated aggregate
offering price required to originally trigger the Company’s obligation to initiate such registration as specified in subsection 1.2(a) or subsection 1.12(b)(2), whichever is applicable. 
  
 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 and fees and disbursements of counsel for the Company 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. All other expenses of any registration proceeding pursuant to Section 1.2, including
the expenses of counsel for the selling Holders, shall be borne pro-rata by the selling Holders. 
  
 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 (which right may be assigned as provided in Section 1.13), including (without limitation)
all registration, filing, and qualification fees, and printers and accounting fees relating or apportionable thereto, but excluding underwriting discounts and commissions relating to Registrable Securities and the fees and disbursements of counsel
for the selling Holders. 
  

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 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 Holder’s securities in such underwriting unless such Holder accepts the terms of the
underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), 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 Company shall be required to include in the offering only that number of such securities, including Registrable Securities, that the
underwriters determine in their sole discretion will not jeopardize the success of the 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 included in the offering be reduced below
twenty-five percent (25%) 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 Holders may be excluded if the underwriters make
the determination described above and no other stockholder’s securities are included or (ii) notwithstanding (i) above, any shares being sold by a stockholder exercising a demand registration right granted in Section 1.2 or a registration right
similar to that granted in Section 1.2 be excluded from such offering. For purposes of the preceding parenthetical concerning apportionment, for any selling stockholder that is a holder of Registrable Securities and that 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, the 1934 Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of
the following statements, omissions or violations (collectively, a “Violation”): (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, 
  

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 including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii)
the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Act, the 1934 Act, any
state securities law or any rule or regulation promulgated under the Act, the 1934 Act or any state securities law; and the Company will pay to each such Holder, underwriter or controlling person, as incurred, 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 amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based upon a Violation that 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 registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages or
liabilities (joint or several) to which any of the foregoing persons may become subject under the Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration;
and each such Holder will pay, as incurred, 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 net 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 that 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 

 

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 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 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 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; 
  

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 (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 that 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 a written request from the Holders of twenty-five percent (25%) of the Registrable Securities then outstanding that the Company effect a registration on Form S-3 and any
related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company will: 
  
 (a)    promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders;
and 
  
 (b)    as soon as practicable, effect
such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holder’s or Holders’ Registrable Securities as are specified in
such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the
Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this section 1.12: (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 $500,000; (3) if the Company shall furnish to the Holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such Form S-3 Registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more
than ninety (90) days after receipt of the request of the Holder or Holders under this Section 1.12; 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 one (1) registration on Form S-3 for the Holders pursuant to this Section 1.12, or if the Company has already effected a total of three (3) registrations on Form S-3 for
the Holders pursuant to this Section 1.12; or (5) in any particular jurisdiction in which the 
  

 10 

 Company would be required to qualify to do business or to execute a general consent to service of process in effecting
such registration, qualification or compliance. 
  
 (c)    Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request
or requests of the Holders. All expenses incurred in connection with a registration requested pursuant to 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, but excluding any underwriters’ discounts or commissions associated with Registrable Securities, shall be borne by the Company. 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 750,000 shares of Registrable Securities
(subject to appropriate adjustment for stock splits, stock dividends, combinations and other 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 1.14 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) or of an LLC who are members of such LLC 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    “Market Stand-Off”
Agreement Rights.    Each Holder hereby agrees that, during the period of one hundred eighty (180) days following the effective date of a registration statement of the Company filed under the Act, it shall not directly or
indirectly sell, pledge, offer to sell, contract to sell (including, without limitation, any short sale), purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, enter into any swap agreement or otherwise
transfer or dispose of (other than to donees who agree to be similarly bound) any Registrable Securities held by it at any time during such period or any Common Stock or any other securities convertible into or exercisable or exchangeable for Common
Stock held by it at any time during such period except for transactions relating to shares of Common Stock or other securities acquired in open market transactions after the effective date of the registration statement; provided, however, that:

  

 11 

 (a)    such agreement shall be applicable only to the first such registration
statement of the Company that covers Common Stock (or other securities) to be sold on its behalf to the public in an underwritten offering; and 
  
 (b)    such market stand-off time period shall not exceed one hundred eighty (180) days. 
  
 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. 
  
 If: 
  
 (i)    during the last 17 days of the 180-day restricted period the Company issues an earnings release
or material news or a material event relating to the Company occurs; or 
  
 (ii)    prior to the expiration of the 180-day restricted period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the 180-day
period, 
  
 the restrictions imposed by this section shall
continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. 
  
 1.15    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 its 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 
  
 1.16    Termination of Registration
Rights.    No Holder shall be entitled to exercise any right provided for in this Section 1 after (a) four (4) 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 securities to the general public or, (b) as to any Holder, such earlier time at which all Registrable Securities held by such Holder can be sold
without registration in compliance with and without regard to the volume limitations of Rule 144 of the Act. 
  

 12 

 2.    Covenants of the Company. 
  
 2.1    Delivery of Financial Statements. The
Company shall deliver to each Investor and Founder: 
  
 (a)    so long as such Investor or Founder holds at least 150,000 shares of Registrable Securities, 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 balance sheet of the Company and statement of stockholder’s equity as of the end of such year, and a statement of cash flows for such year, such year-end financial reports to be in reasonable detail,
prepared in accordance with generally accepted accounting principles (“GAAP”), and audited and certified by independent public accountants of nationally recognized standing selected by the Company; 
  
 (b)    so long as such Investor or Founder holds at least
150,000 shares of Registrable Securities, 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 income statement and statement of
cash flows for such fiscal quarter and an unaudited balance sheet and a statement of stockholder’s equity as of the end of such fiscal quarter; 
  
 (c)    so long as such Investor or Founder holds at least 150,000 shares of Registrable Securities, as soon as practicable, but in any
event within thirty (30) days of the end of each month, an unaudited income statement and statement of cash flows and balance sheet for and as of the end of such month, in reasonable detail; 
  
 (d)    so long as such Investor or Founder holds at least
150,000 shares of Registrable Securities, as soon as practicable, but in any event at least thirty (30) days prior to the end of each fiscal year, a budget for the next fiscal year, prepared on a monthly basis, including balance sheets and
statements of cash flows, for such months, and, as soon as prepared, any other budgets or revised budgets prepared by the Company; and 
  
 (e)    with respect to the financial statements called for in subsections (b) and (c) of this Section 2.1, an instrument executed by
the Chief Financial Officer or President of the Company 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. 
  
 2.2    Inspection.    So long as an Investor holds at least 150,000 shares of Registrable Securities, the
Company shall permit such Investor, at such Investor’s expense, 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 that it reasonably considers to be a trade secret or
similar confidential information. 
  
 2.3    Termination of Information and Inspection Covenants.    The covenants set forth in Section 2.1 and Section 2.2 shall terminate as to Investors and be of no further force or 

 

 13 

 effect when the sale of securities pursuant to a registration statement filed by the Company under the Act in connection
with the firm commitment underwritten offering of its securities to the general public is consummated or when the Company first becomes subject to the periodic reporting requirements of Sections 12(g) or 15(d) of the 1934 Act, whichever event shall
first occur. 
  
 2.4    Key-Man
Insurance.    The Company shall maintain in full force and effect term life insurance in the amount of $2,000,000 on the life of Scott L. Harmon, and such other officers of the Company and in such amounts as the Board of
Directors deems necessary, with proceeds payable to the Company until such time as the Board of Directors determines that such insurance should be discontinued. 
  

2.5    Right of First Offer.    Subject to the terms and conditions specified in this paragraph 2.5, 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, a Major Investor shall mean any Investor
that holds 150,000 shares of Registrable Securities, (subject to appropriate adjustment for stock splits, stock dividends, combinations and other recapitalizations). A Major Investor includes any partners, LLC members and affiliates of a Major
Investor and a Major Investor shall be entitled to apportion the right of first offer hereby granted to 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 notice by certified
mail (“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 twenty (20) calendar days after delivery of the Notice, each 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 that equals the proportion that the
number of shares of Common Stock issued and held, or issuable upon conversion of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and Series F 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, exercise and exchange of all then convertible, exercisable or exchangeable securities). The Company shall
promptly, in writing, inform each Major Investor which purchases all the shares available to it (each, a “Fully Exercising Investor”) of any other Major Investor’s failure to do likewise. During the ten-day period commencing after
delivery of notification of such information to the Fully Exercising Investors, each Fully Exercising Investor shall be entitled to obtain that portion of the Shares for which Major Investors were entitled to subscribe but which were not subscribed
for by the Major Investors 
  

 14 

 which is equal to the proportion that the number of shares of Common Stock issued and held, or issuable upon conversion
of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock or Series F Preferred Stock then held, by such Fully Exercising Investor bears to the total number of shares of
Common Stock issued and held, or issuable upon conversion of such Preferred Stock then held, by all Fully Exercising Investors who wish to purchase some of the unsubscribed shares. 
  
 (c)    If all Shares that Major Investors are entitled to obtain pursuant to subsection 2.5(b) are not
elected to be obtained as provided in subsection 2.5(b) hereof, the Company may, during the sixty (60) day period following the expiration of the ten-day or twenty-day period provided in subsection 2.5(b) hereof, as the case may be, 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 the transaction contemplated by such agreement is not consummated within thirty (30) 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. 
  
 (d)    The right of first offer in this paragraph 2.5 shall not be applicable (i) to the issuance or sale of not more than 30,017,638 shares of Common Stock (or options therefor) (or such other number as is unanimously
agreed by the Company’s Board of Directors) to employees or directors of or consultants to the Company for the primary purpose of soliciting or retaining their services; provided that any shares so issued or sold shall, to the extent vested, be
subject to rights of first refusal in favor of the Company and its assignees so long as no shares of the Company are sold in an offering registered under the Act, (ii) to or after consummation of a public offering of shares of Common Stock,
registered under the Act pursuant to a registration statement on Form S-1 or SB-2 or any comparable successor form then in effect, at an offering price of at least $5.53 per share (appropriately adjusted for any stock split, dividend, combination or
other recapitalization) and $25,000,000 in the aggregate, (iii) to or after consummation of a public offering of shares of Common Stock on or before May 31, 2004, registered under the Act pursuant to a registration statement on Form S-1 or SB-2 or
any comparable successor form then in effect, at an offering price of at least $2.75 per share (appropriately adjusted for any stock split, dividend, combination or other recapitalization) and $25,000,000 in the aggregate, (iv) the issuance of
securities pursuant to the conversion, exercise or exchange of convertible, exercisable or exchangeable securities, (v) the issuance of securities with the approval of at least seventy-five percent (75%) of the members of the Company’s Board of
Directors in connection with a bona fide business acquisition of or by the Company, whether by merger, consolidation, sale of assets, sale or exchange of stock or otherwise, or (vi) the issuance of stock, warrants or other securities or rights to
persons (including, without limitation, employees, consultants, directors and vendors of the Company) or entities with which the Company has business and/or consulting relationships, provided such issuances are for other than primarily equity
financing purposes. 
  
 2.6    Assignments
of Rights of First Refusal.    So long as shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock or Series F Preferred Stock are outstanding,
the Company agrees that, as a condition to issuing any shares of Common Stock to any employee or director of the Company 
  

 15 

 under the Company’s 1997 Stock Option/Stock Issuance Plan, or any successor or subsequent stock option or stock
purchase plan adopted by the Company (each a “Plan”), such employee or director shall be required to enter into an agreement with the Company which shall provide the Company, or any assignee or assignees of the Company, with a right of
first refusal to purchase any shares which such employee or director has acquired a vested interest in and which such employee or director proposes to sell to a person other than the Company. The Company further covenants and agrees that, in the
event (i) an employee or director who has vested in shares purchased under a Plan proposes to sell such shares to a person other than the Company, (ii) the Company has not sold shares of the Company’s capital stock in an offering registered
under the Act and (iii) the Company has determined not to elect to exercise its right of first refusal to purchase all of the vested shares that are proposed to be sold by such employee or director (such balance of the shares not elected to be
purchased by the Company being the “Available Shares”), then the Company agrees that it shall assign its right of first refusal to purchase the Available Shares to the Major Investors by notice to the Major Investors made at least three
(3) business days prior to the expiration of the Company’s right of first refusal, and each Major Investor shall thereafter have the right to elect to exercise such right of first refusal to purchase its proportionate share of the Available
Shares based on the number of shares of Registrable Securities then held by such Major Investor bears to the aggregate number of shares of Registrable Securities then held by all Major Investors. The exercise of such right of first refusal by the
Major Investors shall be made subject to and in compliance with the terms applicable to the right of first refusal in favor of the Company as set forth in the applicable agreements used under the Plan. Notwithstanding the foregoing, shares of Common
Stock held by the Founders shall be subject to that certain Fifth Amended and Restated Right of First Refusal Agreement, dated as of the date hereof, and not the provisions of this Section 2.6. 
  
 2.7    Right to Participate in Initial Public
Offering.    Subject to the terms and conditions specified in this Section 2.7, the Company hereby grants to each Major Investor other than holders of the Series D Preferred Stock, Series E Preferred Stock and Series F
Preferred Stock and entities affiliated with Austin Ventures, SSM Ventures and Accel Partners (the “IPO Major Investors”) a right to purchase shares of Common Stock in the Company’s first public offering of shares of its Common Stock
registered under the Act pursuant to a registration statement on Form S-1 or Form SB-2 (the “Initial Offering”). 
  
 In connection with the Initial Offering, the Company shall use all reasonable efforts to require that its underwriter make an offering of the shares of
its Common Stock to be sold in such offering (excluding any shares sold in any over-allotment option) (the “IPO Shares”) to each IPO Major Investor in accordance with the following provisions: 
  
 (a)    The Company shall deliver a notice in accordance
with Section 3.5 (“IPO Notice”) to the IPO Major Investors stating (i) its bona fide intention to consummate the Initial Offering, (ii) the number of IPO Shares proposed to be offered, and (iii) the proposed price range upon which the IPO
Shares will be offered. The difference from the high end of such price range and the low end of such price range shall not exceed $3.00. In the event of a change in the price range, the Company shall promptly deliver notice to each IPO Major
Investor of such change (the “Price Change Notice”). 
  

 16 

 (b)    By written notification received by the Company, within ten (10) calendar days
after receipt of the IPO Notice, (i) entities affiliated with Attractor LP, Attractor Institutional LP and Attractor Ventures LLC (collectively, “Attractor”) may elect to purchase, at the gross price per share negotiated by the Company
with the underwriters as reflected on the final prospectus (the “Gross IPO Price Per Share”), up to an aggregate of 2.5% of such IPO Shares and (ii) each IPO Major Investor may elect to purchase, at the Gross IPO Price Per Share, up to
that portion of such IPO Shares that equals the product of 4.5% of the total number of IPO Shares multiplied by the proportion that the number of shares of Common Stock of the Company issued and held, or issuable upon conversion of the Series B
Preferred Stock or Series C Preferred Stock then held, by such IPO Major Investor bears to the total number of shares of Common Stock of the Company issued and held, or issuable upon conversion of the Series B Preferred Stock or Series C Preferred
Stock then held, by all IPO Major Investors (such Investor’s “IPO Pro-Rata Share”). 
  
 (c)    The Company shall promptly, in writing, inform each IPO Major Investor that elects to purchase its IPO Pro-Rata Share (a
“Fully-Exercising IPO Investor”) of any other IPO Major Investor’s failure to do likewise. During the five (5) day period commencing after such information is given, each Fully-Exercising IPO Investor may elect to purchase that
portion of the IPO Shares for which IPO Major Investors were entitled to subscribe but which were not subscribed for by the IPO Major Investors (the “Unsubscribed IPO Shares”) that is equal to the proportion that the number of shares of
Common Stock of the Company issued and held, or issuable upon conversion of Series B Preferred Stock or Series C Preferred Stock then held, by such Fully-Exercising IPO Investor bears to the total number of shares of Common Stock of the Company
issued and held, or issuable upon conversion of the Series B Preferred Stock or Series C Preferred Stock then held, by all Fully-Exercising IPO Investors who wish to purchase any of the Unsubscribed IPO Shares. Notwithstanding the foregoing, no
Fully-Exercising IPO Investor shall have rights to purchase Unsubscribed IPO Shares in the event that (i) the Company’s underwriters request that such Fully-Exercising IPO Investor waive its right to purchase Unsubscribed IPO Shares pursuant to
subsection 2.7(c) and (ii) such Fully-Exercising IPO Investor agrees to waive its right to purchase Unsubscribed IPO Shares pursuant to subsection 2.7(c). 
  
 (d)    The rights set forth in this Section 2.7 shall only be applicable to the Initial Offering. The right of each IPO Major Investor
to purchase its IPO Pro-Rata Share pursuant to subsection 2.7(b) may only be waived with respect to a given IPO Major Investor by such IPO Major Investor. 
  
 (e)    By written notification received by the Company within twenty-four hours after delivery of the Price Change Notice (or such
shorter period of time as may be requested by the Company or the Company’s underwriters, such period of time to be no shorter than four hours), an IPO Major Investor may elect to increase or decrease the number of IPO Shares for which such IPO
Major Investor had elected to purchase; provided however, the total number of IPO Shares available for purchase by the IPO Major Investors shall not exceed seven percent (7%) of the IPO Shares. Any IPO Shares that become available for purchase by
IPO Major Investors pursuant to this Section 2.7(e) shall be allocated among the Fully—Exercising IPO Investors in accordance with the provisions of Section 2.7(c). 
  

 17 

 (f)    Notwithstanding the foregoing, the underwriter of the Initial Offering, if
any, shall be entitled to reduce the number of IPO Shares to be offered to the IPO Major Investors to the extent deemed necessary in the underwriter’s reasonable judgment (i) to ensure the success of the Initial Offering for reasons set forth
in writing no less than one week prior to the anticipated effective date of the registration statement covering such Initial Offering, or (ii) to comply with applicable rules and regulations for reasons set forth in writing no less than one day
prior to the anticipated effective date of the registration statement covering such Initial Offering. If the number of IPO Shares is reduced, such reduction shall be made pro rata among the IPO Major Investors proportionate to the amount the IPO
Major Investors would otherwise be entitled to receive under subsection 2.7(b) above. 
  
 2.8    Voting Provisions. 
  
 (a)    The Investors and Founders each agree to hold all shares of voting capital stock of the Company registered in their respective names or beneficially owned by them as of the date of this
Agreement and any and all other securities of the Company legally or beneficially held or acquired by each of the Stockholders after the date of this Agreement (collectively referred to in this Agreement as the “Covered Shares”) subject
to, and to vote the Covered Shares in accordance with, the provisions of this Agreement. 
  
 (b)    Board of Directors. 
  

	 	(i)	 	Number. From and after the date of this Agreement, each of the Investors and Founders shall vote all Covered Shares, and shall take all other necessary or desirable actions
within his, her, or its control (whether in his, her, or its capacity as a stockholder, director, or officer of the Company or otherwise), including without limitation calling meetings, attending meetings, executing a proxy to vote at any meeting
and executing written consents, in order to ensure that the size of the Board of Directors (the “Board”) shall be set at eight and to cause the election to the Board of: 

  

	 	(1)	 	Series A Directors.    Two representatives designated by the Holders of a majority of the shares of Series A Preferred Stock (the “Series A
Directors”), who shall initially be Eric L. Jones and John D. Thornton; 

  

	 	(2)	 	Existing Common Directors.    Two representatives designated by the Holders of a majority of the shares of Common Stock of the Company held by the
Founders (other than the Founders (the “Other Founders”) that were issued Common Stock of the Company as a result of the merger of T-Bone Acquisition, Inc. with and into Target) and their respective Affiliates (the “Existing Common
Directors” and, together with the Series A Directors, the “Existing Motive Directors”), who shall initially be Scott L. Harmon and Michael J. Maples, Sr.; 

  

	 	(3)	 	Target Preferred Director.    Onerepresentative designated by the Holders of a majority of the shares of Series F Preferred Stock (other than the Holders
of Series F Preferred Stock that held Registrable Securities of the Company immediately prior to the merger of T-Bone Acquisition, Inc. with and into Target) (the “Target Preferred Director”), who shall be appointed from time to time;

  

 18 

	 	(4)	 	Target Common Director.    One representative designated by the Holders of a majority of the shares of Common Stock of the Company held by the Other
Founders and their respective Affiliates (the “Target Common Director” and, together with the Target Preferred Director, the “Target Directors”), who shall initially be Kip McClanahan; 

  

	 	(5)	 	Other Directors.    Two representatives (the “Other Directors”) jointly designated by the consent of (i) a majority of the Existing Motive
Directors and (ii) a majority of the Target Directors, who shall be appointed from time to time. 

  

	 	(ii)	 	Removal.    A representative designated as provided in Section 2.8(b)(i) above may be removed during his or her term of office, with or without cause,
only by the persons authorized to designate such representative. 

  

	 	(iii)	 	Vacancies.    If any representative designated as provided in Section 2.8(b)(i) above for any reason ceases to serve as a member of the Board during his
or her term of office, the parties to this Agreement shall cause the resulting vacancy to be filled by a representative designated as provided above by the respective person or persons entitled to designate such representative.

  

	 	(iv)	 	Compensation Committee.    The Board shall establish and maintain a compensation committee comprised of the Target Preferred Director and any other
members of the Board appointed by the Board. The compensation committee of the Board shall determine the salaries, bonuses, and other compensation and benefits of officers and key employees of the Company and its Subsidiaries, and shall administer
any stock option, incentive, or compensation plans or arrangements. The Company may create such other committees as it deems appropriate or necessary by the affirmative vote of a majority of the entire Board. 

  
 (c)    Termination.    The
provisions of this Section 2.8 shall terminate and be of no further force or effect upon the automatic conversion of all shares of Preferred Stock of the Company into shares of Common Stock pursuant to Article IV.B.4(b)(i) or (ii) of the Restated
Certificate of Incorporation. 
  
 (d)    Amendments; Waivers.    Any term of this Section 2.8 may be amended and the observance of any term of this Section 2.8 may be waived (either generally or in a particular instance and
either retroactively or prospectively), only in accordance with Section 3.7; provided, that any amendment or waiver that would have the effect of reducing or eliminating the right of any person or group to designate a director, such amendment or
waiver shall also require the written consent such person or group; provided, further, that any amendment or waiver of this Section 2.8(d) shall also require the unanimous consent of each member of the Board. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any Registrable Securities then outstanding, each future holder of all such Registrable Securities, and the Company. 
  

 19 

 (e)    Legends on Stock Certificates. The certificates representing Covered
Shares shall bear the following legend (together with any other legends required by separate agreement and applicable laws): 
  
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VOTING LIMITATIONS AND RESTRICTIONS SET FORTH IN AN INVESTORS’
RIGHTS AGREEMENT AMONG THE COMPANY, THE HOLDER HEREOF, AND CERTAIN OTHER STOCKHOLDERS OF THE COMPANY, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY. A COPY OF SUCH AGREEMENT WILL BE FURNISHED TO THE RECORD HOLDER OF THIS
CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS. 
  
 The Company agrees that, during the term of this Agreement, it shall not remove, and it shall not permit to be removed (upon registration of transfer, reissuance, or otherwise), the above legend from any such
certificate and shall place or cause to be placed such legend on any new certificate issued to represent Covered Shares. 
  
 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 Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within Delaware. 
  
 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. 
  
 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 upon personal delivery to the party to be notified or upon deposit with the United States Post Office, by registered or 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. 
  

 20 

 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 this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) and a party may be
added, only with the written consent of the Company and the Holders of a majority of the Registrable Securities then outstanding or issuable; provided, however, that in the event such amendment or waiver adversely affects the rights and/or
obligations of any party under this Agreement in a different manner than the other parties, such amendment or waiver shall also require the written consent of the Holders of seventy-five percent (75%) of the Common Stock or Registrable Securities
held by such affected parties. Any amendment, waiver or addition of a party effected in accordance with this paragraph shall be binding upon each holder of any Registrable Securities then outstanding, each future holder of all such Registrable
Securities, and the Company. 
  
 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
entities or persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement. For the purposes of this Agreement, the term “affiliated” shall include entities under common investment
management. 
  
 3.10    Entire
Agreement.    This Agreement (including the Exhibits hereto, if any) constitutes the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. This Agreement supersedes
the Prior Agreement in its entirety. 
  
 3.11    Further Assurances.    Each party agrees, without necessity of further consideration, to execute and deliver any and all such further documents and take any and all such actions as may
be necessary or appropriate to carry out the intent and purposes of this Agreement and to consummate the transaction contemplated herein. 
  
 [REMAINDER OF PAGE LEFT BLANK INTENTIONALLY.] 
  
  

 21 

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

  
 MOTIVE COMMUNICATIONS, INC. 
  
 By:    /s/    Scott L. Harmon                 
         Scott L. Harmon 
         President 
  
 Address:    12515 Research Boulevard 
                     Building 5

                     Austin, Texas 78759 
                     (512) 339-8335 
                     (512)
339-9040-fax 
  
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 INVESTORS: 
  
 ATTRACTOR LP 
  
 By:  Attractor Ventures, LLC, 
         its General Partner 
  
 By:
                                        
         
         Gigi Brisson, its
             
  
 ATTRACTOR VENTURES, LLC 
  
 By:  Attractor Ventures, LLC, 
         its General Partner 
  
 By:
                                        
         
         Gigi Brisson, its
             
  
 ATTRACTOR INSTITUTIONAL LP 
  
 By:  Attractor Ventures, LLC, 
         its General Partner 
  
 By:
                                        
         
         Gigi Brisson, its
             
  
 ATTRACTOR QP LP 
  
 By:  Attractor Ventures, LLC, 
         its General Partner

  
 By:
                                        
         
         Gigi Brisson, its
             
  
 Address:    1440 Chapin Ave., Suite 201 
                     Burlingame, California 94010 
  
 with a copy to: 
                     Rick Cohen 
                     Buchalter, Nemer, Fields & Young, P.C. 
                     601 Figueroa
Street, Suite 2400 
                     Los Angeles, California 90017 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 AUSTIN VENTURES V, L.P. 
  
 By:  AV Partners V, L.P., 
         its General Partner 
  
 By: /s/ John Thornton
                 
         John Thornton 
  
 AUSTIN VENTURES V AFFILIATES 
 FUND, L.P. 
  
 By:  AV Partners V, L.P. 
         Its General Partner 
  
 By: /s/ John Thornton
                 
         John Thornton 
  
 AUSTIN VENTURES VII, L.P. 
  
 By:  AV Partners VII, L.P., 
         its
General Partner 
  
 By: /s/ John
Thornton                  
         John Thornton 
  
 Address:     Attn: John Thornton 
                     300 West 6th Street, Ste. 2300 
                     Austin, Texas 78701-3902 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 AUSTIN VENTURES VI, L.P. 
  
 By:  AV Partners VI, L.P., 
         its General Partner 
  
 By: /s/ John Thornton
                 
         John Thornton 
  
 AUSTIN VENTURES VI AFFILIATES FUND, 
 L.P. 
  
 By:  AV Partners VI, L.P., 
         its General Partner 
  
 By: /s/ John Thornton
                 
         John Thornton 
  
 Address:     Attn: John Thornton 
                     300 West 6th Street, Ste. 2300 
                     Austin, Texas 78701-3902 
  
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 SSM I, L.P. 
 General Partner of SSM Venture Partners, L.P. 
  

By:  SSM Corporation, 
         its General Partner 
  
 By: /s/ William F.
Harrison                        
 Print Name: William F. Harrison             
 Title:
Vice-President                                 
  
 Address:     110 Wild Basin Road,
Suite 280 
                     Austin, Texas 78750 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 ACCEL V L.P. 
  
 By:  Accel V Associates L.L.C., 
         its General Partner 
  
 By: /s/ Tracy
Sedlock                                       
          
         Attorney-In-Fact 
  
 ACCEL INTERNET/STRATEGIC TECHNOLOGY 
 FUND L.P. 
  
 By:  Accel Internet/Strategic Technology Fund

         Associates L.L.C., 
         its General Partner 
  
 By: /s/ Tracy
Sedlock                                       
          
         Attorney-In-Fact 
  
 ACCEL KEIRETSU V L.P. 
  
 By:  Accel Keiretsu V Associates L.L.C., 
         its General
Partner 
  
 By: /s/ Tracy
Sedlock                                       
          
         Attorney-In-Fact 
  
 ACCEL INVESTORS ‘97 L.P. 
  
 By: /s/ Tracy
Sedlock                                       
          
         Attorney-In-Fact 
  
 ACCEL VII, L.P. 
  
 By:  Accel VII Associates L.L.C., 
         its General Partner

  
 By: /s/ Tracy
Sedlock                                       
          
         Attorney-In-Fact 
  
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 ACCEL INTERNET FUND III L.P. 
  
 By:  Accel Internet Fund III Associates L.L.C.,

         its General Partner 
  
 By: /s/ Tracy
Sedlock                                       
          
         Attorney-In-Fact 
  
 ACCEL INVESTORS ‘99 L.P. 
  
 By: /s/ Tracy
Sedlock                                       
          
         Attorney-In-Fact 
  
 ELLMORE C. PATTERSON PARTNERS 
  
 By: /s/ Arthur
Patterson                                       
      
         Arthur C. Patterson 
         General Partner 
  
 Address:     Richard Zamboldi 
                     Accel Partners

                     428 University Avenue 
                     Palo Alto, California 94301 
  
 with a copy to: 
                     G. Carter
Sednaoui 
                     Accel Partners 
                     One Palmer Square 
                     Princeton, New
Jersey 08542 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 PALANTIR ASSOCIATES, LLC 
  
 By: /s/ Glenn Doshay
                                        
  
         Glenn Doshay 
  
 Address:     Palantir Associates,
LLC 
                     6279 Via Campo Verde 
                     Rancho Santa Fe, California 92067 
  
 with copies to: 
  

                    Doug Hammer

                     Shartis, Friese & Ginsburg 
                     One Maritime
Plaza, 18th Floor 
                     San Francisco, California 94111 
                     (415) 249-1572

  
                     Tom Sullivan 
                     Citicorp Center 
                     153 East
53rd Street 
                     New York, New York 10022 
                     (212) 292-6764

  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 PIPER JAFFRAY TECHNOLOGY CAPITAL 
 SBIC, L.P. 
  
 By:  Piper Venture Capital, Inc., 
         its General Partner 
  
 By: /s/ Maureen
Harder                                  
 Print Name: Maureen
Harder                         
 Title: Managing
Director                                
  
 Address:     Attn: Maureen Harder

                     800 Nicollet Mall, J1012232 
                     Minneapolis,
Minnesota 55402 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 THE FABBIO FAMILY LIMITED PARTNERSHIP 
  
 By:  Fabbio Management, LLC, 
         its General Partner 
  
 By: /s/ Robert A.
Fabbio                          
         Robert A. Fabbio, Manager 
  
 Address:     Vieo, Inc. 
                     12401 Research
Blvd. 
                     Austin, Texas 78759 
  
 /s/ Robert A.
Fabbio                                  
 Robert Fabbio 
  
 Address:     Vieo, Inc. 
                     12401 Research
Blvd. 
                     Austin, Texas 78759 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 GLOBAL EXCHANGE SERVICES HOLDINGS, INC. 
  
 By: /s/ Jeff
McCroskey                                  
 Print Name: Jeff
McCroskey                         
 Title: Sr. V.P. Business Development           
  
 Address:     Attn: David Goldberg

                     100 Edison Park Drive 
                     Gaithersburg, MD 20878 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 VIGNETTE CORPORATION 
  
 By: /s/ Charles
Sansbury                                  
 Print Name: Charles
Sansbury                         
 Title:
                                        
                          
  
 Address:     c/o Charles Sansbury 
                     1601 S. Mopac
Expressway 
                     Austin, Texas 78746 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 TECHXAS FUND IIQ, L.P. 
  
 By:  Techxas Ventures II, L.P., 
         Its General Partner 
  
 By:  Techxas Ventures, L.L.C., 
         Its General Partner 
  
 By: /s/ Michael P. La Vigna
                              
         Michael La Vigna 
         Manager 
  
 TECHXAS FUND IIA, L.P. 
  
 By:  Techxas Ventures II, L.P., 
         Its General Partner 
  
 By:  Techxas Ventures, L.L.C., 
         Its General Partner 
  
 By: /s/ Michael P. La Vigna
                                   
         Michael La Vigna 
         Manager 
  
 TECHXAS FUND v1.0, L.P. 
  
 By:  Techxas Ventures, L.L.C., 
         Its General Partner 
  
 By: /s/ Michael P. La Vigna
                                        
                
         Michael La Vigna 
         Manager 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 TECHXAS II AFFILIATES FUND, L.P. 
  
 By:  Techxas Ventures, L.L.C., 
         Its General Partner 
  
 By: /s/ Michael P. La
Vigna                          
         Michael La Vigna 
         Manager 
  
 Address:     500 Plaza on the Lake, Suite 275 
                     Austin, Texas
78746 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 BJMP PARTNERS I, LLC 
  
 By: /s/ Adam
Winnick                                       
   
 Print Name: Adam
Winnick                                 
 Title: Managing
Member                                      
  
 Address:     1900 Avenue of the
Stars 
                     Suite 2701 
                     Los Angeles, CA 90067 
                     Attn: Adam
Winnick 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 /s/ John
McHale                                       
          
 John McHale 
  
 Address:     7501B N. Cap. of
Texas Highway 
                     Austin, TX 78731 
  
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 VINSON & ELKINS L.L.P. 
  
 By: /s/ William
Volk                                    
 Print Name: William R.
Volk                      
 Title:
Partner                                       
          
  
 Address:     2801 Via Fortuna, Suite 100 
                     Austin, Texas 78746 
                     Attn: William R. Volk 
                     Fax: (512)
236-3450 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 MACARTHUR FOUNDATION 
  
 By:    /s/    Susan E.
Manske                                     
 Print Name: Susan E. Manske 
 Title: Vice President/Chief Investment Officer 
  
 Address:     Attn: Joshua Mintz 
                     140 South
Dearborn Street, Suite 1100 
                     Chicago, Illinois 60603-5285 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 BELLSOUTH CORPORATION 
  
 By: /s/ Bradley
Greene                                       
     
         Bradley O. Greene 
         Executive Director – Corporate Development 
  
 Address:     1155 Peachtree Street
N.W. 
                     Suite 1929 
                     Atlanta, GA 30309-3610 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

	ABS EMPLOYEES’ VENTURE FUND LIMITED PARTNERSHIP
		
	 By:
	 	 Alex. Brown Investments Inc.
 General
Partner
  

	By:	 	/s/    FRED C. C.
CROZIER            
	 	 	 Fred C. C. Crozier
  

	 Address:
	 	 One South Street

	 	 	 Baltimore, MD 21202

	 	 	 Attn: Steven Lane

	 	 	           Mail Stop BAL01-1206

	CHARLES RIVER FRIENDS X-C LLC
		
	 By:
	 	 Charles River Friends, Inc.,
 its
Manager
  

	By:	 	/s/    TED R. DINTERSMITh     
	 Print Name: Ted R. Dintersmith

	 Title: Authorized Officer

  

	CHARLES RIVER FRIENDS X-B LLC
		
	 By:
	 	 Charles River Friends, Inc.,
 its
Manager

	 By:
	 	/s/    TED R. DINTERSMITh     
	 Print Name: Ted R. Dintersmith

	 Title: Authorized Officer

  

	CHARLES RIVER PARTNERSHIP X, A LIMITED PARTNERSHIP
		
	 By:
	 	 Charles River X GP LLC,

	 	 	 its General Partner
  

	 By:
	 	 /s/    TED R. DINTERSMITH        
    

	 Print Name: Ted R. Dintersmith

	 Title: Authorized Officer

	CHARLES RIVER PARTNERSHIP X-A, LP
		
	 By:
	 	 Charles River X GP LLC,

	 	 	 its General Partner
  

	 By:
	 	 /s/    TED R. DINTERSMITH        
    

	 Print Name: Ted R. Dintersmith

	 Title: Authorized Officer
  

	 Address:
	 	 Attn: Joe Pignato

	 	 	 1000 Winter St.

	 	 	 Suite 3300

	 	 	 Waltham, MA 02451

 FOUNDERS: 
  
 /s/    Scott L. Harmon
                             
 Scott L. Harmon 
  
 SLH HOLDINGS, LTD. 
  
 By:    /s/    Scott L.
Harmon                     
         Scott L. Harmon 
         General Partner 
  
 /s/    Michael J. Maples, Jr.                       
 Michael J. Maples, Jr. 
  
 MJMJR, LTD. 
  
 By:    /s/    Michael J. Maples,
Jr.                 
         Michael J. Maples, Jr. 
         General Partner 
  
 /s/    Scott R.
Abel                                     
 Scott R. Abel 
  
 MIKO VENTURES, LTD. 
  
 By:    /s/    Scott R.
Abel                             
         Scott R. Abel 
         General Partner 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 /s/    Kip
McClanahan                                     
 Kip McClanhan 
  
 THE MCCLANAHAN 2001 ANNUITY TRUST 
  
 By:    /s/    Kenny Van
Zant                             
 Kenny Van Zant 
 Trustee 
  
 THE MCCLANAHAN 2001 FAMILY
TRUST 
  
 By:    /s/    Kenny Van
Zant                             
         Kenny Van Zant 
         Trustee 
  
 /s/    Kenny Van
Zant                                       

Kenny Van Zant 
  
 THE VAN ZANT 2001 ANNUITY TRUST 
  
 By:    /s/    Kenny Van
Zant                                     
         Kenny Van Zant 
         Trustee 
  
 THE VAN ZANT 2001 FAMILY TRUST 
  
 By:    /s/    Kenny Van
Zant                               
         Kenny Van Zant 
         Trustee 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 /s/    James
Crow                                        
     
 James Crow 
  
 BRIAN & ELIZABETH VETTER EXEMPT 
 DESCENDANTS TRUST 
  
 By:    /s/    Brian
Vetter                                     
 Name: Brian Vetter 
 Title: Trustee 
  
 BRIAN VETTER 2000 EXEMPT TRUST 
  
 By:    /s/    Brian
Vetter                                     
         Brian Vetter 
         Trustee 
  
 ELIZABETH VETTER 2000 EXEMPT TRUST 
  
 By:    /s/    Elizabeth
Vetter                                 
         Elizabeth Vetter 
         Trustee 
  

 SIGNATURE PAGE TO MOTIVE COMMUNICATIONS, INC. 
 SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 Schedule A 
  

Schedule of Investors 
  
 Name and Address 
  
 Attractor LP 
 Attractor Ventures, LLC 
 Attractor Institutional LP 
 Attractor QP LP 
 Attn:
Gigi Brisson 
 1440 Chapin Avenue, Suite 201 
 Burlingame, California 94010 
  
 with a copy to: 
 Rick Cohen 
 Buchalter, Nemer, Fields & Young, P.C. 
 601 Figueroa Street, Suite 2400 
 Los Angeles, California 90017 
  
 MacArthur Foundation 
 Attn. Joshua Mintz 
 140 South Dearborn Street, Suite 1100 
 Chicago, Illinois 60603-5285 
  
 Austin Ventures V, L.P. 
 Austin Ventures VII, L.P. 
 Austin Ventures V Affiliates Fund, L.P.

 Austin Ventures VI, L.P. 

	Austin	 	Ventures VI Affiliates Fund, L.P. 

 Attn: Joseph C. Aragona

 300 West 6th Street, Ste. 2300 
 Austin, Texas 78701-3902 
  
 Brian Goffman 
 c/o Austin Ventures 
 300 West 6th Street, Suite 2300 
 Austin, Texas 78701-3902 
  
 Silverton Partners 
 c/o Austin Ventures 
 300 West 6th Street, Suite 2300 
 Austin, Texas 78701-3902 
 Attn. William Wood 
  

 A-1 

 Name and Address 
  
 SSM I, L.P. 
 c/o SSM Corporation 
 Attn: Bill Harrison 
 110 Wild Basin Road,
Suite 280 
 Austin, Texas 78750 
  
 Accel V L.P. 
 Accel Internet/Strategic Technology Fund L.P. 
 Accel Keiretsu V L.P. 
 Accel Investors ‘97 L.P. 
 Accel VII, L.P. 
 Accel Internet Fund III L.P. 
  
 Accel Investors ‘99 L.P. 
 Ellmore C. Patterson Partners 
 c/o Mr. Rich Zamboldi 
 Accel Partners 
 428 University Avenue

 Palo Alto, California 94301 
  
 with a copy to: 
 G. Carter Sednaoui

 Accel Partners 
 One Palmer
Square 
 Princeton, New Jersey 08542 
  
 Douglas McNary 
 c/o Motive Communications, Inc. 

12515 Research Boulevard, Building 5 
 Austin, Texas 78759 
  
 John T. Galligan 
 1 Eagle Court 
 Greenland, NH 03840-2336

  
 Charles Schwab & Co. Inc. FBO John T. Galligan IRA 
 c/o Charles Schwab & Co. Inc. 
 Attn.
Securities Deposits 
 101 Montgomery Street 
 San Francisco, California 94104 
  

 A-2 

 Name and Address 
  
 Palantir Associates, LLC 
 Attn: Glenn Doshay 
 6279 Via Campo Verde 
 Rancho Santa Fe,
California 92067 
  
 with copies to: 
 Doug Hammer 
 Shartis Friese & Ginsburg

 One Maritime Plaza, 18th Floor 
 San Francisco, California 94111 
  
 and 
  
 Tim Sullivan 
 Citicorp Center 
 153 East 53rd Street

 New York, New York 10022 
  
 Pivotal Partners, L.P. 
 Attn: Christopher Lord 
 c/o Criterion 
 One Maritime Plaza, Suite 1460

 San Francisco, CA 94111-3162 
  
 Hambrecht and Quist California 
 Hambrecht & Quist Employee Venture Fund,
L.P. II 
 H & Q Motive Communications Investors, LLC 
 Attn: Bridget Storm 
 c/o JP Morgan 
 560 Mission Street, 10th Floor 
 San Francisco, CA 94105 
  

 A-3 

 Name and Address 
  
 Access Technology Partners, L.P. 
 Access Technology Partners Brokers Fund, LP

 Attn: Bridget Storm 
 c/o JP
Morgan 
 560 Mission Street, 10th Floor 
 San Francisco, CA 94105 
  
 Dell USA, L.P. 
 c/o Dell Computer Corporation 
 Attn: Maggie
Dolan 
 One Dell Way, Building One 
 Round Rock, Texas 78682 
  
 with a copy to: 

 
 William Volk 
 Vinson & Elkins L.L.P. 
 2801 Via Fortuna,
Ste. 100 
 Austin, Texas 78746 
 (512) 236-3450 
  
 ABS Employees’ Venture Fund Limited Partnership

 Attn: Shawn McMenimen 
 c/o
Investors Bank & Trust 
 200 Clarendon Street, MS FFT063 
 Boston, MA 02116 
  
 BT Investment Partners, Inc.

 345 Park Avenue, 16th Floor 
 New York, NY 10154-0010 
  
 Intel Corporation 
 Attn: Andrew Fligel 
 2200 Mission College
Boulevard, MS 524-203 
 Santa Clara, California 95052 
  
 Piper Jaffray Technology Capital SBIC, L.P. 
 Attn: Maureen Harder 
 800 Nicollet Mall, J1012232 
 Minneapolis, Minnesota 55402 
  

 A-4 

 Name and Address 
  
 Standby Fund 1998 
 Attn: Paul D. Grangaard 
 c/o Piper Jaffray 
 800 Nicollet Mall

 Minneapolis, Minnesota 55402 
  
 Kent Adams 
 c/o Piper Jaffray 
 800 Nicollet Mall 
 Minneapolis, Minnesota
55402 
  
 William Benjamin 
 c/o Piper Jaffray 
 800 Nicollet Mall

 Minneapolis, Minnesota 55402 
  
 Kyle Crowe 
 c/o Piper Jaffray 
 800 Nicollet Mall 
 Minneapolis, Minnesota
55402 
  
 TL Ventures III, L.P. 
 TL Ventures III Offshore L.P. 
 TL Ventures III Interfund L.P. 
 Attn: Mr. Mark J. DeNino 
 700 Building

 435 Devon Park Drive 
 Wayne,
PA 19087-1990 
  
 The Fabbio Family Limited Partnership 
 Attn: Mr. Robert Fabbio 
 Vieo, Inc.

 12401 Research Blvd. 
 Austin,
Texas 78759 
  
 Robert Fabbio, Individually 
 Vieo, Inc. 
 12401 Research Blvd. 

Austin, Texas 78759 
  
 Gerald H. Weghorst 
 10020 Circleview Drive 
 Austin, Texas 78735 
  

 A-5 

 Name and Address 
  
 David Sikora 
 2314 Island Wood Road 
 Austin, Texas 78733 
  
 GE Capital Equity Investments, Inc. 
 Attn: Brian P Keil

 120 Long Ridge Road 
 Stamford,
CT 06927 
  
 Global Exchange Services Holdings, Inc. 
 Attn: David Goldberg 
 100 Edison Park Drive

 Gaithersburg, MD 20878 
  
 Vignette Corporation 
 Attn: Charles Sansbury 
 1601 S. Mopac Expressway 
 Austin, Texas 78746

  
 Charles River X-C LLC 
 Charles River X-B LLC 
 Charles River Partnership X-A, A Limited Partnership

 Charles River Partnership X, LP 
 Attn: Joe
Pignato 
 1000 Winter St. 
 Waltham, MA 02451 
  
 Techxas Fund IIQ, L.P. 
 Techxas Fund IIA, L.P. 
 Techxas Fund v1.0, L.P. 
 Techxas II Affiliates Fund, L.P 
 500 Plaza on the Lake, Suite
275 
 Austin, Texas 78746 
  
 BJMP Partners I, LLC 
 Attn: Adam Winnick 
 1900 Avenue of the Stars, Suite 2710 
 Los
Angeles, CA 90067 
  

 A-6 

 Name and Address 
  
 Vortex Partners BDJ, LP 
 2626 Cole Avenue, Suite 710

 Dallas, Texas 75204 
  
 John McHale 
 7501B North Capital of Texas Hwy 
 Austin, Texas 78731 
  
 Paul Zito 
 111 Congress Avenue, Suite 3000 
 Austin, Texas 78701 
  
 Donald R. Anselmo 
 1464 East Amberwood Drive 
 Phoenix, Arizona 85048 
  
 James A. Johnson 
 5909 Long Court 
 Austin, Texas 78730 
  
 Kent A. Savage 
 54 St. Stephens School Rd. 
 Austin, Texas 78746 
  
 John Becker 
 W 1958 Pastime Lane 
 East Troy, Wisconsin 53120 
  
 David L. Heys 
 3201 Winding Creek Cove 
 Austin, Texas 78735 
  
 Shelby Carter 
 2301 Island Wood Road 
 Austin, Texas 78733-2117 
  
 James Goetz 
 200 Forrester Road 
 Los Gatos, California 95032 
  
 Michael O’Rourke 
 2908 Sparkling Brook Lane 

Austin, Texas 78746 
  

 A-7 

 Name and Address 
  
 Nuevo Private Equities, L.P. 
 111 Congress Avenue, Suite 3000

 Austin, Texas 78701 
  
 LLG, LLP 
 700 Louisiana Street, Suite 2610 
 Houston, Texas 77002 
  
 Scanlon Family Partnership 
 Scanlon Limited Partnership 
 30 Riderwood Road 
 North Barrington, Illinois
60010 
  
 JMM PHLP, LTD. 
 609 Castle Ridge Road, Suite 215 
 Austin,
Texas 78746 
  
 G&H Partners, L.P. 
 155 Constitution Drive 
 Menlo Park,
California 94025 
  
 Vinson & Elkins, L.L.P. 
 2801 Via Fortuna, Suite 100 
 Austin, Texas
78746 
 Attn: William R. Volk 
 Fax: (512) 236-3450 
  
 SBC Venture Capital Corporation 
 175 East Houston, Room 11-E-10 
 San Antonio,
Texas 78205 
  
 BellSouth Corporation 
 1155 Peachtree Street N.W., Suite 1929 
 Atlanta, Georgia 30309-3610 

	

	

	

  

 A-8 

 Name and Address 
  
 Patrick D. Motola 1999 Exempt Trust 
 Patrick Motola 1999 Exempt Trust

 Nancy Elizabeth Motola 1999 Exempt Trust 
 Patrick D. Motola

 Nancy E. Motola 
 c/o Motive Communications,
Inc. 
 12515 Research Blvd., Building 5 
 Austin, Texas 78759 
  
 Hanzlik Family Limited Partnership 
  
 Nortel Networks Limited 
  
  

 A-9 

 Schedule B 
  

Schedule of Founders 
  
 Scott L. Harmon 
 12515 Research Boulevard, Building 5 
 Austin, Texas 78759 
  
 Michael J. Maples, Jr. 
 12515 Research Boulevard, Building 5 
 Austin, Texas 78759 
  
 Scott R. Abel 

12515 Research Boulevard, Building 5 
 Austin, Texas 78759 
  
 Brian J. Vetter 
 12515 Research Boulevard, Building 5 
 Austin, Texas 78759 
  
 Thomas W. Bereiter 
 12515 Research Boulevard,
Building 5 
 Austin, Texas 78759 
  
 Kip McClanahan 
 12515 Research Boulevard, Building 5 
 Austin, Texas 78759 
  
 Kenny Van Zant 
 12515 Research Boulevard, Building 5 
 Austin, Texas 78759 
  
 Adam Chibib 
 12515 Research Boulevard, Building 5 
 Austin, Texas 78759 
  
 James Crow 
 12515 Research Boulevard, Building 5 
 Austin, Texas 78759 
  

 B-1Form of Senior Subordinated Promissory Note

 EXHIBIT 10.1 
  
 No.      
  
 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. 
  
 MOTIVE COMMUNICATIONS, INC. 
  

SENIOR SUBORDINATED PROMISSORY NOTE 
  

	$                                      
  	 	 	 	October 11, 2002

  
 Austin, Texas

  
 FOR VALUE RECEIVED Motive Communications, Inc., a Delaware
corporation (“Company”), promises to pay to                             
(“Investor”), or its registered assigns, in lawful money of the United States of America the principal sum of
                            
($                    ), or such lesser amount as shall equal the outstanding principal amount hereof, together with interest from the date of
this Note on the unpaid principal balance at a rate equal to eleven percent (11.00%) per annum (subject to adjustment as provided in Section 2 below), computed on the basis of the actual number of days elapsed and a year of 365 days. All unpaid
principal, together with any then unpaid and accrued interest and other amounts payable hereunder, shall be due and payable on the earliest of (i) October 11, 2007, (ii) the closing of a Change of Control (as defined below) or (iii) when, upon or
after the occurrence of an Event of Default (as defined below), such amounts are declared due and payable by Investor or made automatically due and payable in accordance with the terms hereof. The earliest of (i), (ii) and (iii) above shall be
referred to as the “Maturity Date.” This Note is one of the “Notes” issued pursuant to the Unit Purchase Agreement of even date herewith (as amended, modified or supplemented, the “Unit Purchase Agreement”) between
Company and the Investors (as defined in the Unit Purchase Agreement). Pursuant to the terms of that certain Subordination Agreement of even date herewith (the “Subordination Agreement”), the Notes shall be subordinate to that certain
Amended and Restated Loan and Security Agreement, dated as of November 15, 2000, and as amended from time to time, between the Company and Comerica Bank-California. Subject to the terms of the Subordination Agreement, the holder of this Note is
entitled to all of the benefits and rights of, and subject to the provisions of, the Unit Purchase Agreement. 
  
 The following is a statement of the rights of Investor and the conditions to which this Note is subject, and to which Investor, by the acceptance of this
Note, agrees: 
  
 1. Definitions. As used in this
Note, the following capitalized terms have the following meanings: 
  
 (a) “Act” shall mean the Securities Act of 1933, as amended. 
  
 (b) “Change of Control” shall mean (i) the acquisition of Company by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or
consolidation) that results in the transfer of fifty percent (50%) or more of the outstanding voting power of Company or (ii) the sale of all or substantially all of the assets of Company. 

 (c) “Company” includes the corporation initially executing this Note and any Person that shall
succeed to or assume the obligations of Company under this Note. 
  
 (d) “Event of Default” has the meaning given in Section 4 hereof. 
  
 (e) “Investor” shall mean the Person specified in the introductory paragraph of this Note or any Person who shall at the time be the registered holder of this Note. 
  
 (f) “Majority in Interest” shall mean more than 50% of the
aggregate outstanding principal amount of the Notes issued pursuant to the Unit Purchase Agreement. 
  
 (g) “Unit Purchase Agreement” has the meaning given in the introductory paragraph hereof. 
  
 (h) “Obligations” shall mean and include all loans, advances,
debts, liabilities, covenants, agreements and other obligations of Company to Investor of every kind and description (whether or not evidenced by any note or instrument and whether or not for the payment of money), now existing or hereafter arising
under or pursuant to the terms of this Note and the Unit Purchase Agreement and the other Transaction Documents, including, all interest, fees, charges, expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable to and
payable by Company hereunder and thereunder, in each case, whether direct or indirect, absolute or contingent, due or to become due, and whether or not arising after the commencement of a proceeding under Title 11 of the United States Code (11 U. S.
C. Section 101 et seq.), as amended from time to time (including post-petition interest) and whether or not allowed or allowable as a claim in any such proceeding. 
  
 (i) “Person” shall mean and include an individual, a partnership, a corporation (including a business trust), a
joint stock company, a limited liability company, an unincorporated association, a joint venture or other entity or a governmental authority. 
  
 (j) “Subordination Agreement” has the meaning given in the introductory paragraph hereof. 
  
 (k) “Transaction Documents” shall mean this Note, each of the
other Notes issued under the Unit Purchase Agreement, the Unit Purchase Agreement and the Warrants issued under the Unit Purchase Agreement. 
  
 2. Interest. Accrued interest on this Note shall be payable in arrears on March 31, June 30, September 30, and December 31 of each year
(each, a “Payment Date”), until the outstanding principal amount hereof shall be paid in full at maturity, with the first such payment due on December 31, 2002; provided, that, at Company’s option, by written notice given to the
holder of each of the Notes on or before such Payment Date, payment of accrued interest under all Notes due on any Payment Date may be deferred until the Maturity Date, in which case interest for the quarterly period ending on such Payment Date will
accrue at the rate of fourteen percent 

  

 2 

 
(14.00%) per annum and such accrued interest will be added to the outstanding principal amount of this Note. Such interest shall compound quarterly.

  
 3. Prepayment. Company may prepay this Note in
whole or in part; provided that any such prepayment will be applied first to the payment of expenses due under this Note, second to interest accrued on this Note and third, if the amount of prepayment exceeds the amount of all such expenses and
accrued interest, to the payment of principal of this Note. 
  
 4.
Events of Default. The occurrence of any of the following shall constitute an “Event of Default” under this Note and the other Transaction Documents: 
  
 (a) Failure to Pay. Company shall fail to pay (i) when due any principal or interest payment or (ii) any other
payment Obligation on the date due and such payment shall not have been made within five days of Company’s receipt of written notice to Company of such failure to pay; 
  
 (b) Covenant Default. A material default by Company in the punctual performance or observance of any Covenant as set
forth in Section 4 of the Unit Purchase Agreement, and such default shall continue unremedied for the longer of (i) a period of 30 days, or (ii) if Company provides written of such default to Holder within 30 days after the occurrence of the event
giving rise to such default, until five days after written notice by a Majority in Interest to Company stating that such default, if not cured, will constitute an Event of Default; 
  
 (c) Breach of Representation. Any warranty, representation, financial statement or other information furnished to
Investor by or on behalf of Company in connection with this Note or the Unit Purchase Agreement, or to induce Investor to make a loan to Company, proves to have been false in any material respect when made or furnished; 
  
 (d) Judgments. If a judgment or judgments for the payment of money
shall be rendered against Company and shall remain unsatisfied and unstayed for a period of thirty (30) days or more, which judgment or judgments result in (i) a material adverse change in the business, operations or condition (financial or
otherwise) of Company, or (ii) a material impairment of the prospect of repayment of any portion of the payment Obligations; 
  
 (e) Attachment. If any material portion of Company’s assets is attached, seized, subjected to a writ or distress warrant, or is levied upon,
or comes into the possession of any trustee, receiver or Person acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within thirty (30) days; or if Company is
enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, or if a judgment or other claim becomes a lien or encumbrance upon any material portion of Company’s
assets, or if a notice of lien, levy, or assessment is filed of record with respect to any material portion of Company’s assets by the federal government, or any department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, and the same is not paid within thirty (30) days after Company receives notice thereof, provided that none of the foregoing shall constitute an Event of Default where such action or event is stayed or an adequate
bond has been posted pending a good faith contest by Company; 
  
 (f) Subordinated Debt. Company makes any payment on account of any indebtedness or obligation that has been subordinated to the Obligations other than as permitted pursuant to the terms of such indebtedness and in the applicable
subordination agreement, or if any Person that has subordinated such indebtedness or obligation terminates or in any way limits the subordination agreement; 
  
 (g) Voluntary Bankruptcy or Insolvency Proceedings. Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of its property, (ii) be unable, or admit in writing its inability, to pay its debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors, (iv)
conceal, remove or transfer any part of its property with the intent to hinder, delay or defraud its creditors, (v) be dissolved or liquidated, (vi) become insolvent (as such term may be defined or interpreted under any applicable statute), (vii)
commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or
to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (viii) take any action for the purpose of effecting any of the foregoing; or 
  
 (h) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for
the appointment of a receiver, trustee, liquidator or custodian of Company or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to
Company or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within thirty (30) days of
commencement. 
  
 5. Rights of Investor upon
Default. Upon the occurrence or existence of an Event of Default under any of Sections 4(a), (b), (c), (d), (e) or (f) and at any time thereafter during the continuance of such Event of Default, the holders of a Majority in Interest, by
written notice to Company, may declare all outstanding Obligations payable by Company hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived. Upon
the occurrence or existence of any Event of Default described in any of Sections 4(g) or (h), immediately and without notice, all outstanding Obligations payable by Company hereunder shall automatically become immediately due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default the holders of a Majority in Interest may
exercise any other right power or remedy permitted to it by law, the Unit Purchase Agreement or otherwise, either by suit in equity or by action at law, or both. No delay on the part of the holder of this Note in the exercise of any power or right
under this Note or the Unit Purchase Agreement or under any other instrument executed pursuant to this Note or the Unit Purchase Agreement shall operate as a waiver of any such power or right, nor shall a single or partial exercise of any power or
right preclude other or further exercise of such power or right or the exercise of any other power or right. 
  

 3 

 6. Default Interest Rate. All Obligations shall bear interest, from and after the
occurrence and during the continuance of an Event of Default, at a rate equal to the lesser of (i) four percentage points above the interest rate applicable immediately prior to the occurrence of such Event of Default or (ii) the maximum interest
rate allowed by applicable law. 
  
 7. Successors and
Assigns. Subject to the restrictions on transfer described in Sections 9 and 10 below, the rights and obligations of Company and Investor of this Note shall be binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties. 
  
 8. Subordination.
Notwithstanding any other provision hereof, the indebtedness evidenced by, and the repayment of, this Note is hereby expressly subordinated, in right of payment to the prior payment in full of all of Company’s Senior Indebtedness (as defined in
the Unit Purchase Agreement) to the extent and in the manner set forth in the Subordination Agreement. In the event that Company’s Amended and Restated Loan and Security Agreement, as amended from time to time, dated November 15, 2000 with
Comerica Bank-California is terminated and replaced with a similar agreement with a similar lender, the holders of the Notes shall enter into subordination agreements with such new lender on terms substantially equivalent to the terms of the
Subordination Agreement. 
  
 9. Waiver and
Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of Company and the holders of a Majority in Interest. 
  

10. Transfer of this Note. Subject to compliance with the terms and conditions of this Section 10, this Note and all rights hereunder are
transferable, in whole or in part, without charge to Investor hereof (except for transfer taxes), upon surrender of this Note properly endorsed or accompanied by written instructions of transfer; provided, that this Note may not be transferred
unless the principal amount so “transferred is equal to the lesser of (i) $7,000,000 or (ii) the entire principal amount then outstanding under this Note. With respect to any offer, sale or other disposition of this Note, Investor agrees to
give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such holder’s counsel, or other evidence, if reasonably requested by the Company, to the effect that such offer, sale or
other disposition may be effected without registration or qualification (under the Act as then in effect or any federal or state securities law then in effect) of this Note and indicating whether or not under the Act notes to be issued upon transfer
hereof require any restrictive legend as to applicable restrictions on transferability in order to ensure compliance with such law. Upon receiving such written notice and reasonably satisfactory opinion or other evidence, if so requested, the
Company, as promptly as practicable, shall notify Investor that Investor may sell or otherwise dispose of this Note, all in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this Section
10 that the opinion of counsel for Investor or other evidence is not reasonably satisfactory to the Company, the Company shall so notify Investor promptly after such determination has been made, which notification shall contain a detailed
description of the reasons for such determination. Each note issuable upon transfer of this Note in accordance with this Section 10 shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with such
laws, unless in the aforesaid opinion of counsel for Investor, such legend is not required in order to ensure compliance with such laws. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.

  

 4 

 11. Assignment by Company. Neither this Note nor any of the rights, interests or
obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by Company without the prior written consent of Investor. 
  
 12. Notices. All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall be in
writing and faxed, mailed or delivered to each party as follows: (i) if to an Investor, at such Investor’s address or facsimile number set forth in the Schedule of Investors attached as Schedule I to the Unit Purchase Agreement, or at such
other address as such Investor shall have furnished Company in writing, or (ii) if to Company, at 12515 Research Blvd., Bldg. 5, Austin, TX 78759-2220, Tel: (512)-339-8335, Fax: (512) 531-2400 (Attn: Paul Baker), with a copy to Wilson Sonsini
Goodrich & Rosati, P.C., 8911 Capital of Texas Highway North, Westech 360, Suite 3350, Austin TX 78759, (Attn: Tony Allen) Tel: (512) 338-5400, Fax: (512) 338-5499. All such notices and communications shall be effective (a) when sent by Federal
Express or other overnight service of recognized standing, on the business day following the deposit with such service; (b) when mailed, by registered or certified mail, first class postage prepaid and addressed as aforesaid through the United
States Postal Service, upon receipt; (c) when delivered by hand, upon delivery; or (d) when faxed, upon confirmation of receipt. 
  
 13. Pari Passu Notes. Investor acknowledges and agrees that the payment and prepayments of all or any portion of the outstanding principal
amount of this Note and all interest hereon shall be pari passu in right of payment and in all other respects to the other Notes issued pursuant to the Unit Purchase Agreement based upon the aggregate unpaid principal amount of this Note and
the other Notes. By accepting this Note, each holder of this Note agrees that if any holder of this Note or of any of the other Notes obtains any payments (whether voluntary, involuntary, by prepayment, set-off or otherwise) of the principal or
interest on this Note or any of the other Notes in excess of such holder’s pro rata share of payments received by all holders of the Notes, such holder shall purchase from the other holders of this Note and the other Notes such participation in
such notes held by them as is necessary to cause all such holders to share the excess payment ratably among each of them as provided in this Section. 
  
 14. Usury. All agreements between Company and Investor, whether now existing or hereafter arising and whether written or oral, are expressly
limited so that in no contingency or event whatsoever, whether by acceleration of the maturity of this Note or otherwise, shall the amount paid, or agreed to be paid, to Investor for the use, forbearance or detention of the money to be loaned under
this Agreement or otherwise, exceed the maximum amount permissible under applicable law. If from any circumstances whatsoever fulfillment of any provision of this Note or of any other document evidencing, securing or pertaining to the indebtedness
evidenced by this Note, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law, then ipso facto, the obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances Investor shall ever receive anything of value as interest or deemed interest by applicable law under this Note or any other document evidencing, securing or pertaining to the indebtedness evidenced by
this Note or otherwise an amount that would exceed the highest lawful rate, such amount that would be excessive interest shall be applied to the reduction of the principal amount owing under this Note or on account of any other indebtedness of
Company to Investor relating to this Note, and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal 

  

 5 

 
of this Note and such other indebtedness, such excess shall be refunded to Company. In determining whether or not the interest paid or payable with respect
to any indebtedness of Company to Investor, under any specific contingency, exceeds the highest lawful rate, Company and Investor shall, to the maximum extent permitted by applicable law, (i) characterize any nonprincipal payment as an expense, fee
or premium rather than as interest, (ii) amortize, prorate, allocate and spread the total amount of interest throughout the full term of such indebtedness so that the actual rate of interest on account of such indebtedness is uniform throughout the
term of such indebtedness, and/or (iii) allocate interest between portions of such indebtedness, to the end that no such portion shall bear interest at a rate greater than that permitted by law. The terms and provisions of this Section shall control
and supersede every other conflicting provision of all agreements between Company and Investor. Investor has been advised by Company to seek the advice of an attorney and an accountant in connection with the issuance of this Note. Company has had
the opportunity to seek the advice of an attorney and accountant of Company’s choice in connection with issuance of this Note. 
  
 15. Waivers. Company hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and all
other notices or demands relative to this instrument. 
  
 16.
Severability. If one or more provisions of this Note are held to be unenforceable under applicable law, such provision(s) shall be excluded from this Note and the balance of this Note shall be interpreted as if such provision(s) were
so excluded and shall be enforceable in accordance with its terms 
  
 17. Governing Law. This Note and all actions arising out of or in connection with this Note shall be governed by and construed in accordance with the laws of the State of Texas, without regard to the conflicts of law
provisions of the State of Texas, or of any other state. 
  
 IN
WITNESS WHEREOF, Company has caused this Note to be issued as of the date first written above. 
  

	MOTIVE COMMUNICATIONS, INC.
a Delaware corporation
		
	 By:
	 	  

	 Name:
 Title:
	 	  Scott L. Harmon
  President and Chief Executive Officer

  
  
  
  
  
 Signature page to Subordinated Promissory Note

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