Document:

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Exhibit 4.2

SUCCESS ACQUISITION CORPORATION

FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

May 19, 2006

 

 

SUCCESS ACQUISITION CORPORATION

FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

     This Fourth Amended and Restated Investor Rights Agreement (this “Agreement”) is made
effective as of May 19, 2006, by and among Success Acquisition Corporation, a Delaware corporation
(the “Company”), and the investors listed on the Schedule of Purchasers attached hereto as
Exhibit A who are signatories to this Agreement (the “Purchasers”).

RECITALS

     A. The Company and certain of the Purchasers are entering into a Series E Preferred Stock
Purchase Agreement of even date herewith (the “Purchase
Agreement”) pursuant to which the Company
shall sell, and the Purchasers shall acquire, shares of the Company’s Series E Preferred Stock (the
“Series E Preferred Stock”).

     B. The obligations of the Company and the Purchasers under the Purchase Agreement are
conditioned, among other things, upon the execution and delivery of this Agreement by the Company
and the Purchasers.

     C. Certain of the Purchasers are parties to a Third Amended and Restated Investor Rights
Agreement dated February 11, 2005 (the “Prior Investor Rights Agreement”) entered into in
connection with the sale of the Company’s Series D Preferred Stock (the “Series D Preferred
Stock”).

     D. The Prior Investor Rights Agreement provides that the Company and the holders of at least
70% of the then-outstanding shares of Series A Preferred Stock (the “Series A Preferred Stock”),
Series B Preferred Stock (the “Series B Preferred Stock”) Series C Preferred Stock (the “Series C
Preferred Stock”) and Series D Preferred Stock may amend the provisions of such Prior Investor
Rights Agreement.

     E. The signatories to this Agreement who constitute the requisite holders of 70% of the
then-outstanding shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock and Series D Preferred Stock, voting together as a single class, do hereby consent to the
amendment of the Prior Investor Rights Agreement such that the provisions of this Agreement shall
amend and replace in all respects the provisions of the Prior Investor Rights Agreement.

AGREEMENT

     NOW, THEREFORE, in consideration of the mutual promises and covenants herein, the receipt and
sufficiency are hereby acknowledged, the parties hereto agree as follows:

     1. Certain Definitions. As used in this Agreement, the following terms shall have the
following respective meanings:

 

 

          “Commission” means the Securities and Exchange Commission or any other federal agency
at the time administering the Securities Act.

          “Conversion Stock” means the Company’s Common Stock issued or issuable pursuant to
conversion of the Preferred Stock.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any similar
federal rule or statute and the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the time.

          “Holder” means (i) any Purchaser holding Registrable Securities and (ii) any person
holding Registrable Securities to whom the rights under this Agreement have been transferred in
accordance with Section 9 hereof.

          “Initiating Holders” means any Holder or Holders who, in the aggregate, hold not less
than twenty-five percent (25%) of the Registrable Securities.

          “Preferred Stock” shall mean the Company’s Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred
Stock.

          “Registrable Securities” means (i) the Conversion Stock and (ii) any Common Stock of
the Company issued or issuable in respect of any of the foregoing upon any stock split, stock
dividend, recapitalization or similar event; provided, however, that securities
shall only be treated as Registrable Securities if and so long as (x) they have not been registered
or sold to or through a broker or dealer or underwriter in a public distribution or a public
securities transaction and (y) the registration rights with respect to such securities have not
terminated pursuant to Section 5.10.

          The terms “register,” “registered” and “registration” refer to a
registration effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such registration
statement.

          “Registration Expenses” shall mean all expenses, except as otherwise stated below
under “Selling Expenses”, incurred by the Company in complying with Sections 5.1, 5.2 and 5.3
hereof, including without limitation, all registration, qualification and filing fees, printing
expenses, escrow fees, fees and disbursements of counsel for the Company, reasonable fees and
expenses of a special counsel for the Holders, blue sky fees and expenses, the expense of any
special audits incident to or required by any such registration (but excluding the compensation of
regular employees of the Company which shall be paid in any event by the Company, and exclusive of
any underwriting discounts and commissions).

          “Restricted Securities” shall mean the securities of the Company required to bear the
legends set forth in Section 3 hereof.

          “Rule 144” and “Rule 145” shall mean Rules 144 and 145, respectively,
promulgated under the Securities Act, or any similar federal rules thereunder, all as the same
shall be in effect at the time.

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          “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar
federal rule or statute and the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the time.

          “Selling Expenses” shall mean all underwriting discounts, selling commissions and
stock transfer taxes applicable to the securities registered by the Holders and all fees and
disbursements of counsel for any Holder not included in Registration Expenses.

     2. Restrictions on Transferability. The Preferred Stock, the Conversion Stock and any
other securities issued in respect of such stock upon any stock split, stock dividend,
recapitalization, merger, or similar event, shall not be sold, assigned, transferred or pledged
except upon the conditions specified in this Agreement, which conditions are intended to ensure
compliance with the provisions of the Securities Act. Each Holder or transferee shall cause any
proposed purchaser, assignee, transferee or pledgee of any such shares held by the Holder or
transferee to agree to take and hold such securities subject to the restrictions and upon the
conditions specified in this Agreement.

     3. Restrictive Legend. Each certificate representing the Preferred Stock, the
Conversion Stock or any other securities issued in respect of such stock upon any stock split,
stock dividend, recapitalization, merger, or similar event, shall (unless otherwise permitted by
the provisions of Section 4 below) be stamped or otherwise imprinted with legends in substantially
the following form (in addition to any legends required by agreement or by applicable state
securities laws):

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). SUCH SECURITIES MAY NOT
BE TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN
EFFECT AS TO SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE COMPANY,
SUCH TRANSFER MAY BE MADE PURSUANT TO RULE 144 OR RULE 701 OR
REGISTRATION UNDER THE ACT IS OTHERWISE UNNECESSARY IN ORDER FOR SUCH
TRANSFER TO COMPLY WITH THE ACT.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
UPON TRANSFER AS SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER AND THE
ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. SUCH RESTRICTIONS UPON TRANSFER ARE
BINDING ON TRANSFEREES OF THESE SHARES.

          Each Holder consents to the Company making a notation on its records and giving stop transfer
instructions to any transfer agent of its capital stock in order to implement the restrictions on
transfer established in this Agreement.

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          The Company shall be obligated to reissue promptly certificates removing the first of the
above legends at the request of any Holder if the Holder shall have obtained an opinion of counsel
reasonably acceptable to the Company to the effect that the securities proposed to be disposed of
may lawfully be so disposed of without registration, qualification or legend and will remove the
second legend upon termination of this Agreement.

     4. Notice of Proposed Transfers. The holder of each certificate representing
Restricted Securities by acceptance thereof agrees to comply in all respects with the provisions of
this Section 4. Without in any way limiting the immediately preceding sentence, no sale,
assignment, transfer or pledge of Restricted Securities shall be made by any holder thereof to any
person unless such person shall first agree (in the case of a pledge, prior to any transfer
pursuant to an exercise of rights under the pledge) in writing to be bound by the restrictions of
this Agreement including, without limitation, Section 7. Prior to any proposed sale, assignment,
transfer or transfer pursuant to the exercise of rights under a pledge (a “pledge transfer”) of any
Restricted Securities, unless there is in effect a registration statement under the Securities Act
covering the proposed transfer, the holder thereof shall give written notice to the Company of such
holder’s intention to effect such transfer, sale, assignment or pledge transfer. Each such notice
shall describe the manner and circumstances of the proposed transfer, sale, assignment or pledge
transfer in sufficient detail. Each certificate evidencing the Restricted Securities transferred
as above provided shall bear, except if such transfer is made pursuant to Rule 144, the appropriate
restrictive legend set forth in Section 3 above, except that such certificate shall not bear such
restrictive legend if in the opinion of counsel for such holder and counsel for the Company such
legend is not required in order to establish compliance with any provision of the Securities Act.
Notwithstanding the foregoing, each holder of Restricted Securities agrees that it will not request
that a transfer of the Restricted Securities be made or that the legend set forth in Section 3 be
removed from the certificate representing the Restricted Securities, solely in reliance on Rule
144(k), if as a result thereof the Company would be rendered subject to the reporting requirements
of the Exchange Act.

     5. Registration.

          5.1 Requested Registration.

               (a) Request for Registration. In case the Company shall receive from Initiating
Holders a written request that the Company effect any registration with respect to shares of
Registrable Securities, the Company will:

                    (i) promptly give written notice of the proposed registration to all other Holders; and

                    (ii) as soon as practicable, use its best efforts to effect such registration (including,
without limitation, appropriate qualification under applicable state securities laws and
appropriate compliance with applicable regulations issued under the Securities Act and any other
governmental requirements or regulations) as may be so requested and as would permit or facilitate
the sale and distribution of such Registrable Securities, including all or such portion of the
Registrable Securities of any Holder or Holders joining in such request by delivering a written
notice to such effect to the Company within 20 days after

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the date of such written notice from the Company subject to the limitations set forth in
Section 5.1(b).

     Notwithstanding the foregoing, the Company shall not be obligated to take any action to effect
or complete any such registration pursuant to this Section 5.1:

                         (A) Prior to the earlier of (i) six months after the effective date of the Company’s first
registered public offering of its Common Stock or (ii) May 19, 2010;

                         (B) Unless the requested registration would have an aggregate offering price of all
Registrable Securities sought to be registered by all Holders of not less than $15,000,000;

                         (C) During the period starting with the date 60 days prior to the Company’s estimated date of
filing of, and ending on the date 180 days immediately following the effective date of, any
registration statement pertaining to securities of the Company (other than a registration of
securities in a Rule 145 transaction or with respect to an employee benefit plan), provided that
the Company is actively employing in good faith commercially reasonable efforts to cause such
registration statement to become effective;

                         (D) After the Company has effected two registrations pursuant to this Section 5.1(a) and such
registration has been declared or ordered effective;

                         (E) If the Company, within 30 days of the receipt of the written request of the Initiating
Holders, gives notice of its bona fide intention to effect the filing of a registration statement
with the Commission within 120 days of receipt of such request (other than with respect to a
registration statement relating to a Rule 145 transaction, an offering solely to employees or any
other registration which is not appropriate for the registration of Registrable Securities),
provided that the Company makes reasonable good faith efforts to complete such offering;

                         (F) If the Company shall furnish to the Initiating Holders a certificate signed by the
President of the Company stating that in the good faith judgment of the Board of Directors it would
be detrimental to the Company or its stockholders for a registration statement to be filed in the
near future. In such case, the Company’s obligation under this Section 5.1(a) shall be deferred
for a period not to exceed 120 days from the date of receipt of the written request from the
Initiating Holders, provided that the Company may not exercise this deferral right more than once
per 12 month period.

     Subject to the foregoing clauses (A) through (F), the Company shall file a registration
statement covering the Registrable Securities so requested to be registered as soon as practicable
after receipt of the request or requests of the Initiating Holders.

               (b) Underwriting. If the Initiating Holders intend to distribute Registrable
Securities by means of an underwriting, they shall so advise the Company as part of their request
made pursuant to Section 5.1(a), and the Company shall advise the Holders as part of the notice
given pursuant to Section 5.1(a)(i) that the right of any Holder to registration

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pursuant to Section 5.1 shall be conditioned upon such Holder’s participation in such
underwriting arrangements, and the inclusion of such Holder’s Registrable Securities in the
underwriting to the extent requested shall be limited to the extent provided herein.

     The Company shall, together with all Holders proposing to distribute their securities through
such underwriting, enter into an underwriting agreement in customary form with the managing
underwriter selected for such underwriting by a majority in interest of the shares to be registered
held by the Initiating Holders, but subject to the Company’s reasonable approval. Notwithstanding
any other provision of this Section 5.1, if the managing underwriter advises the Initiating Holders
in writing that marketing factors require a limitation of the number of shares to be underwritten,
then the Company shall so advise all Holders requesting to be included in the registration and
underwriting and the number of shares that may be included in the registration and underwriting
shall be allocated among all Holders requesting to be included in the registration and underwriting
in proportion, as nearly as practicable, to the respective amounts of Registrable Securities held
by them. No Registrable Securities excluded from the underwriting by reason of the underwriter’s
marketing limitation shall be included in such registration. To facilitate the allocation of
shares in accordance with the above provisions, the Company or the underwriters may round the
number of shares allocated to any Holder to the nearest 100 shares. If any Holder of Registrable
Securities disapproves of the terms of the underwriting, such person may elect to withdraw
therefrom by written notice to the Company.

               (c) Notwithstanding anything to the contrary contained in this Section 5.1, Holders shall not
be deemed to have used or forfeited their rights to registration of their Registrable Securities
under this Section 5.1, if a registration of Registrable Securities is conducted pursuant to an
underwritten offering undertaken after the exercise of the Holders’ rights under this Section 5.1
and the underwriters advise the Company and/or the Holders that marketing factors require the
Company to limit the number of Registrable Securities to be sold in such offering to a number less
than seventy-five percent (75%) of the Registrable Securities requested to be registered by the
persons exercising such demand right.

          5.2 Company Registration.

               (a) Notice of Registration. If at any time or from time to time the Company shall
determine to register any of its equity securities, either for its own account or the account of a
Holder or other holders, other than (i) a registration relating solely to employee benefit plans,
(ii) a registration relating solely to a Rule 145 transaction, or (iii) a registration in which the
only equity security being registered is Common Stock issuable upon conversion of convertible debt
securities which are also being registered, the Company will:

                    (i) promptly give to each Holder written notice thereof; and

                    (ii) include in such registration (and any related qualifications including compliance with
Blue Sky laws), and in any underwriting involved therein, all the Registrable Securities specified
in a written request or requests, made within 20 days after the date of such written notice from
the Company, by any Holder subject to the limitations set forth in Section 5.2(b).

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               (b) Underwriting. If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so advise the Holders as a
part of the written notice given pursuant to Section 5.2(a)(i). In such event, the right of any
Holder to registration pursuant to Section 5.2 shall be conditioned upon such Holder’s
participation in such underwriting and the inclusion of Registrable Securities in the underwriting
shall be limited to the extent provided herein.

     All Holders proposing to distribute their securities through such underwriting shall (together
with the Company and the other Holders distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the managing underwriter selected for
such underwriting by the Company. Notwithstanding any other provision of this Section 5.2, if the
managing underwriter determines that marketing factors require a limitation of the number of shares
to be underwritten, the managing underwriter may limit the Registrable Securities to be included in
such registration (i) in the case of the Company’s initial public offering in which no other
selling stockholders participate, to zero, and (ii) in the case of any other offering, to an amount
no less than 25% of all shares to be included in such offering. The Company shall so advise all
Holders requesting to be included in the registration and underwriting and the number of shares of
Registrable Securities that may be included in the registration and underwriting shall be allocated
among all the Holders requesting to be included in the registration and underwriting in proportion,
as nearly as practicable, to the respective amounts of Registrable Securities held by them at the
time of filing the registration statement. To facilitate the allocation of shares in accordance
with the above provisions, the Company or the underwriters may round the number of shares allocated
to any Holder to the nearest 100 shares. If any Holder disapproves of the terms of any such
underwriting, such person may elect to withdraw therefrom by written notice to the Company.

               (c) Right to Terminate Registration. The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 5.2 prior to the effectiveness of such
registration whether or not any Holder has elected to include securities in such registration.

          5.3 Registration on Form S-3.

               (a) Request for Registration. In case the Company shall receive from the Holders of
at least 20% of the Registrable Securities a written request that the Company file a registration
statement on Form S-3 (or any successor form to Form S-3) for a public offering of shares of the
Registrable Securities the aggregate price to the public of which, net of underwriting discounts
and commissions, would equal or exceed $1,000,000, and the Company is a registrant entitled to use
Form S-3 to register the Registrable Securities for such an offering, the Company shall as soon as
practicable cause such Registrable Securities to be registered for the offering on such form and to
cause such Registrable Securities to be qualified in such jurisdictions as such Holder or Holders
may reasonably request. The Company shall inform the other Holders of the proposed registration
and offer them the opportunity to participate. In the event the registration is proposed to be
part of a firm commitment underwritten public offering, the substantive provisions of Section
5.1(b) shall be applicable to each such registration initiated under this Section 5.3.

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               (b) Notwithstanding the foregoing, the Company shall not be obligated to take any action
pursuant to this Section 5.3:

                    (i) If the Company, within 30 days of the receipt of the written request of the Initiating
Holders, gives notice of its bona fide intention to effect the filing of a registration statement
with the Commission within 120 days of receipt of such request (other than with respect to a
registration statement relating to a Rule 145 transaction, an offering solely to employees or any
other registration which is not appropriate for the registration of Registrable Securities),
provided that the Company makes reasonable good faith efforts to complete such offering;

                    (ii) During the period starting with the date 60 days prior to the Company’s estimated date of
filing of, and ending on the date 180 days immediately following the effective date of, any
registration statement pertaining to securities of the Company (other than a registration of
securities in a Rule 145 transaction or with respect to an employee benefit plan), provided that
the Company is actively employing in good faith commercially reasonable efforts to cause such
registration statement to become effective;

                    (iii) More than two times during any 12-month period; or

                    (iv) If the Company shall furnish to the Holders initiating a request pursuant to this Section
5.3 a certificate signed by the President of the Company stating that, in the good faith judgment
of the Board of Directors, it would be detrimental to the Company or its stockholders for a
registration statement to be filed in the near future, then the Company’s obligation to file a
registration statement shall be deferred for a period not to exceed 120 days from the receipt of
the request to file such registration by such Holders, provided that the Company may not exercise
this deferral right more than once per 12 month period.

          5.4 Subsequent Registration Rights. From and after the date of this Agreement, the
Company shall not, without the prior written consent of the Holders of at least 70% of the
Registrable Securities, enter into any agreement with any holder or prospective holder of any
securities of the Company that would allow such holder or prospective holder to include such
securities in any registration filed under Section 5 hereof, unless the terms of such agreement
provide that such holder or prospective holder may include such securities in any such registration
only to the extent that the inclusion of such securities will not reduce the amount of the
Registrable Securities of the Holders that are included.

          5.5 Expenses of Registration. All Registration Expenses incurred in connection with
(i) two registrations pursuant to Section 5.1, (ii) all registrations pursuant to Section 5.2 and
(iii) all registrations pursuant to Section 5.3, shall be borne by the Company. Notwithstanding
the foregoing, in the event that Initiating Holders cause the Company to begin a registration
pursuant to Section 5.1 or Section 5.3, and the request for such registration is subsequently
withdrawn by the Initiating Holders or such registration is not completed due to failure to meet
the net proceeds requirement set forth in such section or is otherwise not successfully completed
due to no fault of the Company, all Holders shall be deemed to have forfeited their right to one
registration under Section 5.1 or a registration at the expense of the Company under Section 5.3,
as applicable, unless the Initiating Holders pay for, or reimburse the

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Company for, the Registration Expenses incurred in connection with such withdrawn or
incomplete registration; provided, however, that if at the time of such withdrawal, the Holders
have learned of a material adverse change in the condition, business or prospects of the Company
from that known to the Holders at the time of their request and have withdrawn the request with
reasonable promptness following disclosure by the Company of such material adverse change, then the
Holders shall not be required to pay any of such expenses and shall retain their rights pursuant to
Section 5.1. Unless otherwise stated, all Selling Expenses relating to securities registered on
behalf of the Holders and all other registration expenses shall be borne by the Holders of such
securities pro rata on the basis of the number of shares so registered or proposed to be so
registered.

          5.6 Registration Procedures. In the case of each registration effected by the Company
pursuant to this Agreement, the Company will keep each Holder advised in writing as to the
initiation of such registration and as to the completion thereof. The Company will:

               (a) Prepare and file with the Commission a registration statement, the prospectus, and such
amendments and supplements as may be necessary and use commercially reasonable efforts to cause
such registration statement to become and remain effective for at least 120 days or until the
distribution described in the registration statement has been completed, whichever first occurs.

               (b) Furnish to the Holders participating in such registration and to the underwriters of the
securities being registered such reasonable number of copies of the registration statement,
preliminary prospectus, final prospectus and such other documents, including any amendment or
supplement to the prospectus, as such underwriters and Holders may reasonably request in order to
facilitate the public offering of such securities.

               (c) Use its best efforts to register and qualify the securities covered by such registration
statement under the securities laws of such jurisdictions as shall be reasonably appropriate for
the distribution of the securities covered by the registration statement, 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 jurisdiction, and provided further
that (anything in this Agreement to the contrary notwithstanding with respect to the bearing of
expenses) if any jurisdiction in which the securities shall be qualified shall require that
expenses incurred in connection with the qualification of the securities in that jurisdiction be
borne by selling shareholders, then such expenses shall be payable by the selling Holders pro rata,
to the extent required by such jurisdiction if such Holders do not elect to withdraw from the
registration after notice of such requirement.

               (d) In the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement with terms generally satisfactory to the managing underwriter of
such offering. Each Holder participating in such underwriting shall also enter into and perform
its obligations under such an agreement.

               (e) Notify each Holder of Registrable Securities covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus

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included in such registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances then existing.

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

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

          5.7 Indemnification.

               (a) The Company will indemnify each Holder, each of its officers, directors, members and
partners, and each person controlling such Holder within the meaning of Section 15 of the
Securities Act, with respect to which registration has been effected pursuant to this Agreement,
against all expenses, claims, losses, damages or liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were made, not misleading,
or any violation by the Company of the Securities Act, the Exchange Act, state securities laws or
any rule or regulation promulgated under such laws applicable to the Company in connection with any
such registration, and the Company will reimburse each such Holder, each of its officers,
directors, members and partners, and each person controlling such Holder, for any legal and any
other expenses reasonably incurred, as such expenses are incurred, in connection with
investigating, preparing or defending any such claim, loss, damage, liability or action, provided
that the Company will not be liable in any such case to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement or omission or
alleged untrue statement or omission, made in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by such Holder or controlling
person, and stated to be specifically for use therein; provided, however, that the
foregoing indemnity agreement is subject to the condition that, insofar as it relates to any such
untrue statement, alleged untrue statement, omission or alleged omission made in a preliminary
prospectus on file with the Commission at the time the registration statement becomes effective or
the amended prospectus is filed with the Commission pursuant to Rule 424(b) (the “Final
Prospectus”), such indemnity agreement shall not inure to the benefit of any Holder, if a copy of
the Final Prospectus was not furnished to the person asserting the loss, liability, claim or damage
at or prior to the time such action is required by the Securities Act, and if the Final Prospectus
would have cured the defect giving rise to the loss, liability, claim or damage.

               (b) Each Holder will, if Registrable Securities held by such Holder are included in the
securities as to which such registration is being effected, indemnify the Company, each of its
directors and officers who have signed the registration statement, any other holders of

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the Company’s securities covered by such registration statement, each person who controls the
Company within the meaning of Section 15 of the Securities Act, and any person who controls any
other holders of the Company’s securities covered by such registration statement within the meaning
of Section 15 of the Securities Act, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement, prospectus, offering
circular or other document, or any amendment or supplement thereto, incident to any such
registration, or based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or any violation by the Holder of the
Securities Act, the Exchange Act, state securities laws or any rule or regulation promulgated under
such laws applicable to the Holder, and will reimburse the Company, such other Holders, such
directors, officers, or control persons for any legal or any other expenses reasonably incurred,
as such expenses are incurred, in connection with investigating or defending any such claim, loss,
damage, liability or action, but only to the extent that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder, director, officer or
controlling person and stated to be specifically for use therein. Notwithstanding the foregoing,
the liability of each Holder under this subsection 5.7(b) shall be limited in an amount equal to
the net proceeds from the offering received by such Holder unless such liability arises out of or
is based on willful misconduct or fraud by such Holder.

               (c) Each party entitled to indemnification under this Section 5.7 (the “Indemnified Party”)
shall give notice to the party required to provide indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct
the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at
such party’s expense, and provided further that the failure of any Indemnified Party to give notice
as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement
unless the failure to give such notice is materially prejudicial to an Indemnifying Party’s ability
to defend such action and provided further, that the Indemnifying Party shall not assume the
defense for matters as to which there is a conflict of interest or there are separate and different
defenses. No Indemnifying Party, in the defense of any such claim or litigation, shall, except
with the consent of each Indemnified Party (whose consent shall not be unreasonably withheld),
consent to entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation.

               (d) If the indemnification provided for in this Section 5.7 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

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proportion as is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the statements or omissions
that resulted in such loss, liability, claim, damage or expense as well as any other relevant
equitable considerations; provided, that in no event shall any contribution by a Holder
under this Subsection 5.7(d) exceed the net proceeds from the offering received by such Holder,
except in the case of willful fraud by such Holder. 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.

          5.8 Information by Holder. The Holder or Holders of Registrable Securities included
in any registration shall furnish to the Company such information regarding such Holder or Holders,
the Registrable Securities held by them and the distribution proposed by such Holder or Holders as
the Company may reasonably request in writing and as shall be required in connection with any
registration referred to in this Agreement.

          5.9 Rule 144 Reporting. With a view to making available the benefits of certain rules
and regulations of the Commission which may at any time permit the sale of the Restricted
Securities to the public without registration, after such time as a public market exists for the
Common Stock of the Company, the Company agrees to:

               (a) Make and keep public information available, as those terms are understood and defined in
Rule 144 under the Securities Act, at all times after the effective date that the Company becomes
subject to the reporting requirements of the Securities Act or the Exchange Act;

               (b) File with the Commission in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements);

               (c) So long as a Holder owns any Restricted Securities, to furnish to the Holder forthwith
upon request a written statement by the Company as to its compliance with the reporting
requirements of said Rule 144 (at any time after 90 days after the effective date of the first
registration statement filed by the Company for an offering of its securities to the general
public), a copy of the most recent annual or quarterly report of the Company, and such other
reports and documents of the Company and other information in the possession of or reasonably
obtainable by the Company as the Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing the Holder to sell any such securities without registration;
and

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               (d) Take such action, including the voluntary registration of its Common Stock under Section
12 of the Exchange 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.

          5.10 Termination of Registration Rights. The rights granted pursuant to Sections 5.1,
5.2 and 5.3 of this Agreement shall terminate as to any Holder upon the earlier of (i) seven years
after the Company’s initial public offering, or (ii) the date such Holder is eligible to sell all
of such Holder’s Registrable Securities under Rule 144 within any three month period.

     6. Financial Information; Inspection Rights.

          6.1 Financial Information. The Company will provide the following documents to each
Purchaser who, together with its affiliated funds, continues to hold at least 1,000,000 shares of
Preferred Stock and/or Conversion Stock (as adjusted for stock splits, stock dividends, stock
combinations and the like):

               (a) As soon as practicable after the end of each fiscal year thereafter, and in any event
within ninety (90) days after the end of each such fiscal year, balance sheets of the Company as of
the end of such fiscal year, and statements of operations and statements of cash flows and
stockholders’ equity of the Company, for such year, prepared in accordance with generally accepted
accounting principles and setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, which financial statements shall be accompanied by
a report and opinion thereon by independent public accountants of national standing selected by the
Company’s Board of Directors;

               (b) As soon as practicable after the end of each month and after the first, second and third
quarterly accounting periods in each fiscal year of the Company and in any event within 45 days
thereafter, a balance sheet of the Company as of the end of each such monthly or quarterly period,
and statements of operations and statements of cash flows of the Company for such period and for
the current fiscal year to date, prepared in accordance with generally accepted accounting
principles (other than accompanying notes), subject to changes resulting from year-end audit
adjustments, in reasonable detail and signed by the principal financial or accounting officer of
the Company; and

               (c) Annually, but in no event later than 10 days after adoption by the Board of Directors, and
promptly after any material amendment thereof, the operating plan and budget of the Company, in the
form approved by the Board of Directors, which plan shall include at least a projection of income
and cash flow for each fiscal quarter and such fiscal year and a projected balance sheet as of the
end of each fiscal quarter and the fiscal year.

          6.2 For purposes of determining the minimum holdings pursuant to this Section 6, any Purchaser
which is a partnership or limited liability company shall be deemed to hold any Preferred Stock
originally purchased by such Purchaser and subsequently distributed to constituent partners or
members of such Purchaser, but which have not been resold by such partners or members. If the
partnership or limited liability company is still in existence, the

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Company may satisfy any obligation to distribute reports to individual partners of the
partnership or members of a limited liability company by delivering a single copy of each report to
the partnership or limited liability company as agent for the constituent partners or members.

          6.3 Inspection. The Company shall permit each Investor who holds at least 1,000,000
shares of Preferred Stock, 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 6(c)
to provide access to any information which it reasonably considers to be a trade secret or similar
confidential information; it being understood and agreed, however, that no such limitation on an
Investor’s inspection right shall prevent an Investor from having access to the following: the
Company’s financial statements and records and any records relating to capitalization and corporate
governance of the Company.

          6.4 Each Purchaser or transferee of rights under this Section 6 acknowledges and agrees that
any information obtained pursuant to this Section 6 which may be considered nonpublic information
will be maintained in confidence by such Purchaser or transferee and will not be utilized by such
Purchaser or transferee in connection with purchases or sales of the Company’s securities except in
compliance with applicable state and Federal securities laws.

          6.5 The covenants of the Company set forth in this Section 6 shall terminate and be of no
further force or effect upon the closing of a firm commitment underwritten public offering of the
Company’s Common Stock or at such time as the Company is required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act, whichever shall occur first.

     7. Lockup Agreement. Each Purchaser, Holder and transferee hereby agrees that, in
connection with the initial public offering of any securities of the Company under the Securities
Act for the account of the Company, if so requested by the Company or any representative of the
underwriters (the “Managing Underwriter”), such Purchaser, Holder or transferee shall not sell or
otherwise transfer any securities of the Company (except for those securities being registered,
those securities purchased in the initial public offering or those securities purchased in the
public market following the initial public offering) during the period specified by the Company’s
Board of Directors at the request of the Managing Underwriter (the “Market Standoff Period”), with
such period not to exceed 180 days following the effective date of such registration statement;
provided that officers, directors and holders of at least one percent (1%) of the Company’s voting
securities are bound by and have entered into similar agreements. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing restrictions until
the end of such Market Standoff Period.

     8. Right of First Refusal.

          8.1 The Company hereby grants to each Purchaser who continues to hold at least 1,000,000
shares of Preferred Stock and/or Conversion Stock (as adjusted for stock splits, stock dividends,
stock combinations and the like) (each such Purchaser referred to herein as a “Qualified
Purchaser”), the right of first refusal to purchase its Pro Rata Share of New Securities (as
defined in this Section 8) which the Company may, from time to time, propose to sell and

-14-

 

issue. A “Pro Rata Share,” for purposes of this right of first refusal, is the ratio that (i)
the sum of the number of shares of Common Stock then held by each Qualified Purchaser plus the
number of shares of Common Stock issuable upon conversion of the Preferred Stock and upon the
exercise or conversion of any securities exercisable or convertible, directly or indirectly, into
Common Stock, then held by such Qualified Purchaser bears to (ii) the sum of the total number of
shares of Common Stock then outstanding plus the number of shares of Common Stock issuable upon
exercise or conversion of all then outstanding securities exercisable for or convertible into,
directly or indirectly, Common Stock.

          8.2 Except as set forth below, “New Securities” shall mean any shares of capital stock of the
Company, including Common Stock and any series of preferred stock, whether now authorized or not,
and rights, options or warrants to purchase said shares of Common Stock or preferred stock, and
securities of any type whatsoever that are, or may become, convertible into or exchangeable for
said shares of Common Stock or preferred stock. Notwithstanding the foregoing, “New Securities”
does not include securities referred to as exceptions to the definition of “Additional Shares of
Common Stock” contained in sections 3(e)(iv)(i)—(vii) of the Company’s Sixth Amended and Restated
Certificate of Incorporation.

          8.3 In the event the Company proposes to undertake an issuance of New Securities, it shall
give each Qualified Purchaser written notice of its intention, describing the amount and type of
New Securities, and the price and terms upon which the Company proposes to issue the same. Each
Qualified Purchaser shall have fifteen (15) days from the date of receipt of any such notice to
agree to purchase up to its respective Pro Rata Share of such New Securities for the price and upon
the terms specified in the notice by giving written notice to the Company and stating therein the
quantity of New Securities to be purchased. An indication by a Qualified Purchaser to exercise its
rights of first refusal shall not be binding upon such Qualified Purchaser unless and until the
Company obtains binding commitments to purchase all of the securities specified in the notice of
the offering on the terms stated in such notice.

          8.4 Beginning fifteen (15) days after the notice given pursuant to Section 8(c) above, the
Company shall have 180 days to sell the New Securities not elected or eligible to be purchased by
Qualified Purchasers at the price and upon the terms no more favorable to the purchasers of such
securities than specified in the Company’s notice. In the event the Company has not sold all of
the New Securities within said 180 day period or offers the New Securities on substantially
different terms, the Company shall not thereafter issue or sell any New Securities without first
offering such securities in the manner provided above.

          8.5 The provisions of this Section 8 will terminate and be of no further force or effect upon
the closing of the Company’s initial public offering.

     9. Transfer of Rights. The rights granted under Sections 5, 6 and 8 of this Agreement
may be assigned to any transferee or assignee, other than a competitor or potential competitor of
the Company (as determined in good faith by the Company’s Board of Directors) in connection with
any transfer or assignment of Registrable Securities by the Holder, provided that: (i) such
transfer is otherwise effected in accordance with applicable securities laws and the terms of this
Agreement; (ii) such assignee or transferee acquires at least 300,000 shares (or all shares
held, if less, with respect to the rights granted under Section 5) (as adjusted for stock

-15-

 

splits,
stock dividends, stock combinations and the like) of Registrable Securities (including Preferred
Stock convertible into Registrable Securities), (iii) written notice is promptly given to the
Company; and (iv) such transferee or assignee agrees in writing to be bound by the provisions of
this Agreement. Subsection 9(ii) shall not apply to transfers to any of its affiliates (as such
term is defined in Rule 405 promulgated under the Securities Act), partner, member, beneficiary (in
the case of a trust), family member, trust for the benefit of family members, or family limited
partnership.

     10. Board Observer Right. The Company covenants and agrees that Granite Global
Ventures and its affiliates (“GGV”) shall be entitled to an observer who may be present at all
meetings of the Board of Directors, which designated representative shall receive copies of all
notice, minutes, consents and other materials that the Company provides to its directors at the
same time as such materials are provided to the directors, including telephonic board meetings;
provided, however, such designated representative of GGV may be excluded from any
meeting or portion thereof if the Company believes, upon advice of counsel, that such exclusion is
necessary to preserve attorney-client privilege, to protect highly confidential proprietary
information, for conflict of interest obligations, or for other similar reasons. GGV hereby agrees
that any proprietary information obtained by it and/or its designated representative in connection
with such observer’s attendance at board meetings shall be held in confidence and will not be
disclosed by GGV except to the extent otherwise required by law.

     11. Certain Covenants Relating to SBA Matters.

          11.1 Compliance. So long as any Investor which is a licensed Small Business
Investment Company (an “SBIC Investor”) holds any securities of the Company, the Company will at
all times comply with the non-discrimination requirements of 13 C.F.R. Parts 112, 113 and 117.

          11.2 Information for SBIC Investor. Within 45 days after the end of each fiscal year
and at such other times as an SBIC Investor may reasonably request, the Company shall deliver to
such SBIC Investor a written assessment, in form and substance satisfactory to such SBIC Investor,
of the economic impact of such SBIC Investor’s financing specifying the full-time equivalent jobs
created or retained in connection with such investment, and the impact of the financing on the
Company’s business in terms of profits and on taxes paid by the Company and its employees. Upon
request, the Company agrees to promptly provide each SBIC Investor with sufficient information to
permit such Investor to comply with its obligations under the Small Business Investment Act of
1958, as amended, and the regulations promulgated thereunder and related thereto; provided,
however, each SBIC Investor agrees that it will protect any information which the Company labels as
confidential to the extent permitted by law. Any submission of any financial information under
this Section shall include a certificate of the Company’s president, chief executive officer,
treasurer or chief financial officer.

          11.3 Number of Holders of Voting Securities. So long as any SBIC Investor holds any
securities purchased pursuant to the Purchase Agreement or issued by the Company with respect
thereto, the Company shall notify each SBIC Investor (i) at least 15 days prior to taking any
action after which the number of record holders of the Company’s voting securities would be
increased from fewer than 50 to 50 or more, and (ii) of any other action or occurrence

-16-

 

after which
the number of record holders of the Company’s voting securities was increased (or would increase)
from fewer than 50 to 50 or more, as soon as practicable after the Company becomes aware that such
other action or occurrence has occurred or is proposed to occur.

     12. Amendment. Except as otherwise provided herein, any provision of this Agreement
may be amended or the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of the Company
and the Holders of at least seventy percent (70%) of the then-outstanding shares of Preferred
Stock; provided, however, that any amendment of Section 10 shall require the approval of the
holders of at least seventy percent (70%) of the Series E Preferred Stock. Any amendment or waiver
effected in accordance with Section 5.4 or this Section 12, as applicable, shall be binding upon
each Purchaser, Holder of Registrable Securities at the time outstanding, each future holder of any
of such securities and the Company.

     13. Governing Law. This Agreement shall be governed in all respects by the internal
laws of the State of California without regard to conflict of laws provisions.

     14. Entire Agreement. This Agreement constitutes the full and entire understanding
and Agreement among the parties regarding the matters set forth herein and does hereby supersede
all other agreements of the parties relating to the subject matter hereof, including the Prior
Investor Rights Agreement. Except as otherwise expressly provided herein, the provisions hereof
shall inure to the benefit of, and be binding upon the successors, assigns, heirs, executors and
administrators of the parties hereto.

     15. Notices, etc. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid,
delivered by a nationally recognized overnight courier, or sent by facsimile transmission, or by
hand or by messenger, addressed:

          15.1 if to a Holder, at such Holder’s address as set forth in Exhibit A, or at such
other address as such Holder shall have furnished to the Company;

          15.2 if to the Company, to:

Success Acquisition Corporation

999 Baker Way, Suite 500

San Mateo, California 94404

Attn: Lars Dalgaard, President

Fax: (650) 645-2099

-17-

 

     or at such other address as the Company shall have furnished to the Holders, with a copy to:

Fenwick & West LLP

Silicon Valley Center

801 California Street

Mountain View, CA 94041

Attn: William Schreiber, Esq.

Facsimile Number: (650) 938-5200

     Each such notice or other communication shall for all purposes of this Agreement be treated as
effective or having been given (i) when delivered if delivered personally, (ii) if sent by
facsimile, the first business day after the date of confirmation that the facsimile has been
successfully transmitted to the facsimile number for the party notified, (iii) if sent by mail, at
the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed and mailed as aforesaid or (iv) one
day after deposit with a nationally recognized overnight courier, specifying next day delivery.

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

     17. Aggregation of Stock. All shares of Preferred Stock and Conversion Stock held by
or acquired by affiliated entities or persons shall be aggregated for the purpose of determining
the availability of any rights under this Agreement.

[Remainder of page left intentionally blank.]

-18-

 

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

	 	 	 	 	 	 	 	 	 	 	 
	COMPANY	 	 	 	PURCHASERS	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	SUCCESS ACQUISITION CORPORATION,	 	 	 	EMERGENCE CAPITAL PARTNERS, L.P.	 	 
	 	 	 	 	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By: Emergence Equity Partners, L.L.C.	 	 
	 	 	 	 	 	 	Its: General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Lars Dalgaard
 

Lars Dalgaard,
	 	 	 	By:
	 	/s/ Jason Green
 

Jason Green, Managing Member
	 	 
	 

	 	President and Chief Executive Officer	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	EMERGENCE CAPITAL ASSOCIATES, L.P.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By: Emergence Equity Partners, L.L.C.	 	 
	 	 	 	 	 	 	Its: General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Jason Green	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Jason Green, Managing Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	EMERGENCE CAPITAL PARTNERS SBIC, L.P.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By: Emergence Equity Partners, Inc.	 	 
	 	 	 	 	 	 	Its: General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Jason Green	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Jason Green, President	 	 

 

 

	 	 	 	 	 
	 	CVP SBIC, L.P.

By: CV SBIC, Inc.

Its: General Partner

 	 
	 	By:  	/s/ Eric Dunn
 	 
	 	 	Eric Dunn, Principal 	 
	 	 	 	 
	 
	 	CARDINAL VENTURE AFFILIATES, L.P.

By: Cardinal Ventures, LLC

Its: General Partner

 	 
	 	By:  	/s/ Eric Dunn
 	 
	 	 	Eric Dunn, Principal 	 
	 	 	 	 
	 
	 	TPG VENTURES

By: TPG Ventures Genpar, L.P.

By: TPG Ventures Advisors, LLC

 	 
	 	By:  	/s/ Jeffery D. Ekberg
 	 
	 	 	Jeffery D. Ekberg, Vice President 	 
	 	 	 	 
	 
	 	GREYLOCK EQUITY LIMITED PARTNERSHIP

By: Greylock Equity GP Limited
	 	 	Partnership, its General Partner

 	 
	 	By:  	/s/ Donald A. Sullivan
 	 
	 	 	Name:  	Donald A. Sullivan 	 
	 	 	Title:  	Administrative Partner 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	MAPACHE INVESTMENTS, L.P.

 	 
	 	By:  	/s/ David Strohm
 	 
	 	 	David Strohm, General Partner 	 
	 	 	 	 
	 
	 	 	 
	 	                                                     /s/ David Strohm
 	 
	 	DAVID STROHM 	 
	 	 	 
	 
	 	CANAAN EQUITY, L.P.

By: Canaan Equity Partners, L.L.C.

 	 
	 	By:  	/s/ Deepak Kamra
 	 
	 	 	Name:  	Deepak Kamra 	 
	 	 	Title:  	Member/Manager 	 
	 
	 	CANAAN EQUITY III L.P.

By: Canaan Equity Partners III LLC

 	 
	 	By:  	/s/ Deepak Kamra
 	 
	 	 	Member/Manager 	 
	 	 	 	 
	 
	 	CANAAN EQUITY III 

ENTREPRENEURS LLC

By: Canaan Equity Partners III LLC

 	 
	 	By:  	/s/ Deepak Kamra
 	 
	 	 	Manager 	 
	 	 	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	GRANITE GLOBAL VENTURES II L.P.

By: Granite Global Ventures II L.L.C., its
	 	 	General Partner

 	 
	 	By:  	/s/ Glenn Solomon
 	 
	 	 	Glenn Solomon 	 
	 	 	Managing Director 	 
	 
	 	GGV II ENTREPRENEURS FUND, L.P.

By: Granite Global Ventures II L.L.C., its
	 	 	
General Partner

 	 
	 	By:  	/s/ Glenn Solomon
 	 
	 	 	Glenn Solomon 	 
	 	 	Managing Director 	 
	 
	 	 	 
	 	                                                          /s/ John V. Balen
 	 
	 	JOHN V. BALEN 	 
	 	 	 
	 
	 	 	 
	 	                                                          /s/ Deepak Kamra
 	 
	 	DEEPAK KAMRA 	 
	 	 	 
	 
	 	 	 
	 	                                                          /s/ Eric A. Young
 	 
	 	ERIC A. YOUNG 	 
	 	 	 
	 
	 	 	 
	 	                                                          /s/ David Whorton
 	 
	 	DAVID WHORTONexv10w1

 

Exhibit 10.1

INDEMNITY AGREEMENT

     This Indemnity Agreement (this “Agreement”), dated as of                      _, 2007, is made by
and between SuccessFactors, Inc., a Delaware corporation (the “Company”), and
                    , a director and/or officer of the Company (the “Indemnitee”).

RECITALS

     A. The Company is aware that competent and experienced persons are increasingly reluctant to
serve as directors or officers of corporations unless they are protected by comprehensive liability
insurance and/or indemnification, due to increased exposure to litigation costs and risks resulting
from their service to such corporations, and because the exposure frequently bears no reasonable
relationship to the compensation of such directors and officers;

     B. Based on their experience as business managers, the Board of Directors of the Company (the
“Board”) has concluded that, to retain and attract talented and experienced individuals to serve as
officers and directors of the Company, and to encourage such individuals to take the business risks
necessary for the success of the Company, it is necessary for the Company contractually to
indemnify officers and directors and to assume for itself maximum liability for expenses and
damages in connection with claims against such officers and directors in connection with their
service to the Company;

     C. Section 145 of the General Corporation Law of Delaware, under which the Company is
organized (the “Law”), empowers the Company to indemnify by agreement its officers, directors,
employees and agents, and persons who serve, at the request of the Company, as directors, officers,
employees or agents of other corporations or enterprises, and expressly provides that the
indemnification provided by the Law is not exclusive; and

     D. The Company desires and has requested the Indemnitee to serve or continue to serve as a
director or officer of the Company free from undue concern for claims for damages arising out of or
related to such services to the Company.

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

     1. Definitions.

          1.1 Agent. For the purposes of this Agreement, “agent” of the Company means any
person who is or was a director or officer of the Company or a subsidiary of the Company; or is or
was serving at the request of, for the convenience of, or to represent the interest of the Company
or a subsidiary of the Company as a director or officer of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise or an affiliate of the Company; or was a
director or officer of a foreign or domestic corporation which was a predecessor corporation of the
Company, including, without limitation, SuccessFactors, Inc., a California corporation, or was a
director or officer of another enterprise or affiliate of the Company at the request of, for the
convenience of, or to represent the interests of such

 

 

predecessor corporation. The term “enterprise” includes any employee benefit plan of the
Company, its subsidiaries, affiliates and predecessor corporations.

          1.2 Expenses. For purposes of this Agreement, “expenses” includes all direct and
indirect costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees
and related disbursements and other out-of-pocket costs) actually and reasonably incurred by the
Indemnitee in connection with the investigation, defense or appeal of a proceeding or establishing
or enforcing a right to indemnification or advancement of expenses under this Agreement, Section 4
or otherwise.

          1.3 Proceeding. For the purposes of this Agreement, “proceeding” means any
threatened, pending or completed action, suit or other proceeding, whether civil, criminal,
administrative, investigative or any other type whatsoever.

          1.4 Subsidiary. For purposes of this Agreement, “subsidiary” means any corporation of
which more than fifty percent (50%) of the outstanding voting securities is owned directly or
indirectly by the Company, by the Company and one or more of its subsidiaries or by one or more of
the Company’s subsidiaries.

     2. Agreement to Serve. The Indemnitee agrees to serve and/or continue to serve as an
agent of the Company, at the will of the Company (or under separate agreement, if such agreement
exists), in the capacity the Indemnitee currently serves as an agent of the Company, faithfully and
to the best of his ability, so long as he or she is duly appointed or elected and qualified in
accordance with the applicable provisions of the charter documents of the Company or any subsidiary
of the Company; provided, however, that the Indemnitee may at any time and for any
reason resign from such position (subject to any contractual obligation that the Indemnitee may
have assumed apart from this Agreement), and the Company or any subsidiary shall have no obligation
under this Agreement to continue the Indemnitee in any such position.

     3. Directors’ and Officers’ Insurance. The Company shall, to the extent that the
Board determines it to be economically reasonable, maintain a policy of directors’ and officers’
liability insurance (“D&O Insurance”), on such terms and conditions as may be approved by the
Board.

     4. Mandatory Indemnification. Subject to Section 9 below, the Company shall indemnify
the Indemnitee:

          4.1 Third Party Actions. If the Indemnitee is a person who was or is a party or is
threatened to be made a party to any proceeding (other than an action by or in the right of the
Company) by reason of the fact that he is or was an agent of the Company, or by reason of anything
done or not done by him in any such capacity, against any and all expenses and liabilities of any
type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) actually and reasonably incurred by him in connection with the
investigation, defense, settlement or appeal of such proceeding if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of the Company and,
with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful; and

 

 

          4.2 Derivative Actions. If the Indemnitee is a person who was or is a party or is
threatened to be made a party to any proceeding by or in the right of the Company to procure a
judgment in its favor by reason of the fact that he is or was an agent of the Company, or by reason
of anything done or not done by him in any such capacity, against any amounts paid in settlement of
any such proceeding and all expenses actually and reasonably incurred by him in connection with the
investigation, defense, settlement or appeal of such proceeding if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of the Company;
except that no indemnification under this subsection shall be made in respect of any claim,
issue or matter as to which such person shall have been finally adjudged to be liable to the
Company by a court of competent jurisdiction due to willful misconduct of a culpable nature in the
performance of his duty to the Company, unless and only to the extent that the Court of Chancery or
the court in which such proceeding was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such amounts which the Court of Chancery or such other
court shall deem proper; and

          4.3 Exception for Amounts Covered by Insurance. Notwithstanding the foregoing, the
Company shall not be obligated to indemnify the Indemnitee for expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties and
amounts paid in settlement) to the extent such have been paid directly to the Indemnitee by D&O
Insurance.

     5. Partial Indemnification and Contribution.

          5.1 Partial Indemnification. If the Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of any expenses or
liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) incurred by him or her in the investigation,
defense, settlement or appeal of a proceeding but is not entitled, however, to indemnification for
all of the total amount thereof, then the Company shall nevertheless indemnify the Indemnitee for
such total amount except as to the portion thereof to which the Indemnitee is not entitled to
indemnification.

          5.2 Contribution. If the Indemnitee is not entitled to the indemnification provided
in Section 4 for any reason other than the statutory limitations set forth in the Law, then in
respect of any threatened, pending or completed proceeding in which the Company is jointly liable
with the Indemnitee (or would be if joined in such proceeding), the Company shall contribute to the
amount of expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred and paid or payable by the Indemnitee in such proportion as is
appropriate to reflect (i) the relative benefits received by the Company on the one hand and the
Indemnitee on the other hand from the transaction from which such proceeding arose and (ii) the
relative fault of the Company on the one hand and of the Indemnitee on the other hand in connection
with the events which resulted in such expenses, judgments, fines or settlement amounts, as well as
any other relevant equitable considerations. The relative fault of the Company on the one hand and
of the Indemnitee on the other hand shall be determined by reference to, among other things, the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
the circumstances resulting in such

 

 

expenses, judgments, fines or settlement amounts. The Company agrees that it would not be
just and equitable if contribution pursuant to this Section 5 were determined by pro rata
allocation or any other method of allocation that does not take account of the foregoing equitable
considerations.

     6. Mandatory Advancement of Expenses.

          6.1 Advancement. Subject to Section 9 below and except as prohibited by law, the
Company shall advance all expenses incurred by the Indemnitee in connection with the investigation,
defense, settlement or appeal of any proceeding to which the Indemnitee is a party or is threatened
to be made a party by reason of the fact that the Indemnitee is or was an agent of the Company or
by reason of anything done or not done by him in any such capacity. The Indemnitee hereby
undertakes to promptly repay such amounts advanced only if, and to the extent that, it shall
ultimately be determined that the Indemnitee is not entitled to be indemnified by the Company under
the provisions of this Agreement, the Certificate of Incorporation or Bylaws of the Company, the
Law or otherwise. The advances to be made hereunder shall be paid by the Company to the Indemnitee
within thirty (30) days following delivery of a written request therefor by the Indemnitee to the
Company.

          6.2 Exception. Notwithstanding the foregoing provisions of this Section 6, the
Company shall not be obligated to advance any expenses to the Indemnitee arising from a lawsuit
filed directly by the Company against the Indemnitee if an absolute majority of the members of the
Board reasonably determines in good faith, within thirty (30) days of the Indemnitee’s request to
be advanced expenses, that the facts known to them at the time such determination is made
demonstrate clearly and convincingly that the Indemnitee acted in bad faith. If such a
determination is made, the Indemnitee may have such decision reviewed by another forum, in the
manner set forth in Sections 8.3, 8.4 and 8.5 hereof, with all references therein to
“indemnification” being deemed to refer to “advancement of expenses,” and the burden of proof shall
be on the Company to demonstrate clearly and convincingly that, based on the facts known at the
time, the Indemnitee acted in bad faith. The Company may not avail itself of this Section 6.2 as
to a given lawsuit if, at any time after the occurrence of the activities or omissions that are the
primary focus of the lawsuit, the Company has undergone a change in control. For this purpose, a
change in control shall mean a given person or group of affiliated persons or groups increasing
their beneficial ownership interest in the Company by at least twenty (20) percentage points
without advance Board approval.

     7. Notice and Other Indemnification Procedures.

          7.1 Promptly after receipt by the Indemnitee of notice of the commencement of or the threat of
commencement of any proceeding, the Indemnitee shall, if the Indemnitee believes that
indemnification with respect thereto may be sought from the Company under this Agreement, notify
the Company of the commencement or threat of commencement thereof.

          7.2 If, at the time of the receipt of a notice of the commencement of a proceeding pursuant to
Section 7.1 hereof, the Company has D&O Insurance in effect, the Company shall give prompt notice
of the commencement of such proceeding to the insurers in accordance with the procedures set forth
in the respective policies. The Company shall

 

 

thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of
the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of
such D&O Insurance policies.

          7.3 In the event the Company shall be obligated to advance the expenses for any proceeding
against the Indemnitee, the Company, if appropriate, shall be entitled to assume the defense of
such proceeding, with counsel approved by the Indemnitee (which approval shall not be unreasonably
withheld), upon the delivery to the Indemnitee of written notice of its election to do so. After
delivery of such notice, approval of such counsel by the Indemnitee and the retention of such
counsel by the Company, the Company will not be liable to the Indemnitee under this Agreement for
any fees of counsel subsequently incurred by the Indemnitee with respect to the same proceeding,
provided that: (a) the Indemnitee shall have the right to employ his or her own counsel in
any such proceeding at the Indemnitee’s expense; (b) the Indemnitee shall have the right to employ
his or her own counsel in connection with any such proceeding, at the expense of the Company, if
such counsel serves in a review, observer, advice and counseling capacity and does not otherwise
materially control or participate in the defense of such proceeding; and (c) if (i) the employment
of counsel by the Indemnitee has been previously authorized by the Company, (ii) the Indemnitee
shall have reasonably concluded that there may be a conflict of interest between the Company and
the Indemnitee in the conduct of any such defense or (iii) the Company shall not, in fact, have
employed counsel to assume the defense of such proceeding, then the fees and expenses of the
Indemnitee’s counsel shall be at the expense of the Company.

     8. Determination of Right to Indemnification.

          8.1 To the extent the Indemnitee has been successful on the merits or otherwise in defense of
any proceeding referred to in Section 4.1 or 4.2 of this Agreement or in the defense of any claim,
issue or matter described therein, the Company shall indemnify the Indemnitee against expenses
actually and reasonably incurred by him or her in connection with the investigation, defense or
appeal of such proceeding, or such claim, issue or matter, as the case may be.

          8.2 In the event that Section 8.1 is inapplicable, or does not apply to the entire proceeding,
the Company shall nonetheless indemnify the Indemnitee unless the Company shall prove by clear and
convincing evidence to a forum listed in Section 8.3 below that the Indemnitee has not met the
applicable standard of conduct required to entitle the Indemnitee to such indemnification.

          8.3 The Indemnitee shall be entitled to select the forum in which the validity of the
Company’s claim under Section 8.2 hereof that the Indemnitee is not entitled to indemnification
will be heard from among the following, except that the Indemnitee can select a forum
consisting of the stockholders of the Company only with the approval of the Company:

               (a) A quorum of the Board consisting of directors who are not parties to the proceeding for
which indemnification is being sought;

               (b) The stockholders of the Company;

 

 

               (c) Legal counsel mutually agreed upon by the Indemnitee and the Board, which counsel shall
make such determination in a written opinion;

               (d) A panel of three arbitrators, one of whom is selected by the Company, another of whom is
selected by the Indemnitee and the last of whom is selected by the first two arbitrators so
selected; or

               (e) The Court of Chancery of Delaware.

          8.4 As soon as practicable, and in no event later than thirty (30) days after the forum has
been selected pursuant to Section 8.3 above, the Company shall, at its own expense, submit to the
selected forum its claim that the Indemnitee is not entitled to indemnification, and the Company
shall act in the utmost good faith to assure the Indemnitee a complete opportunity to defend
against such claim.

          8.5 If the forum selected in accordance with Section 8.3 hereof is not a court, then after the
final decision of such forum is rendered, the Company or the Indemnitee shall have the right to
apply to the Court of Chancery of Delaware, for the purpose of appealing the decision of such
forum, provided that such right is executed within sixty (60) days after the final decision
of such forum is rendered. If the forum selected in accordance with Section 8.3 hereof is a court,
then the rights of the Company or the Indemnitee to appeal any decision of such court shall be
governed by the applicable laws and rules governing appeals of the decision of such court.

          8.6 Notwithstanding any other provision in this Agreement to the contrary, the Company shall
indemnify the Indemnitee against all expenses incurred by the Indemnitee in connection with any
hearing or proceeding under this Section 8 involving the Indemnitee and against all expenses
incurred by the Indemnitee in connection with any other proceeding between the Company and the
Indemnitee involving the interpretation or enforcement of the rights of the Indemnitee under this
Agreement unless a court of competent jurisdiction finds that each of the material claims and/or
defenses of the Indemnitee in any such proceeding was frivolous or not made in good faith.

     9. Exceptions. Any other provision herein to the contrary notwithstanding, the
Company shall not be obligated pursuant to the terms of this Agreement:

          9.1 Claims Initiated by Indemnitee. To indemnify or advance expenses to the
Indemnitee with respect to proceedings or claims initiated or brought voluntarily by the Indemnitee
and not by way of defense, except with respect to proceedings specifically authorized by
the Board or brought to establish or enforce a right to indemnification and/or advancement of
expenses arising under this Agreement, the charter documents of the Company or any subsidiary or
any statute or law or otherwise, but such indemnification or advancement of expenses may be
provided by the Company in specific cases if the Board finds it to be appropriate; or

          9.2 Unauthorized Settlements. To indemnify the Indemnitee hereunder for any amounts
paid in settlement of a proceeding unless the Company consents in advance in writing to such
settlement, which consent shall not be unreasonably withheld; or

 

 

          9.3 Securities Law Actions. To indemnify the Indemnitee on account of any suit in
which judgment is rendered against the Indemnitee for an accounting of profits made from the
purchase or sale by the Indemnitee of securities of the Company pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions
of any federal, state or local statutory law; or

          9.4 Unlawful Indemnification. To indemnify the Indemnitee if a final decision by a
court having jurisdiction in the matter shall determine that such indemnification is not lawful.
In this respect, the Company and the Indemnitee have been advised that the Securities and Exchange
Commission takes the position that indemnification for liabilities arising under the federal
securities laws is against public policy and is, therefore, unenforceable and that claims for
indemnification should be submitted to appropriate courts for adjudication.

     10. Non-Exclusivity. The provisions for indemnification and advancement of expenses
set forth in this Agreement shall not be deemed exclusive of any other rights which the Indemnitee
may have under any provision of law, the Company’s Certificate of Incorporation or Bylaws, the vote
of the Company’s stockholders or disinterested directors, other agreements or otherwise, both as to
action in the Indemnitee’s official capacity and to action in another capacity while occupying his
position as an agent of the Company, and the Indemnitee’s rights hereunder shall continue after the
Indemnitee has ceased acting as an agent of the Company and shall inure to the benefit of the
heirs, executors and administrators of the Indemnitee.

     11. General Provisions.

          11.1 Interpretation of Agreement. It is understood that the parties hereto intend
this Agreement to be interpreted and enforced so as to provide indemnification and advancement of
expenses to the Indemnitee to the fullest extent now or hereafter permitted by law, except as
expressly limited herein.

          11.2 Severability. If any provision or provisions of this Agreement shall be held to
be invalid, illegal or unenforceable for any reason whatsoever, then: (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including, without limitation,
all portions of any paragraphs of this Agreement containing any such provision held to be invalid,
illegal or unenforceable that are not themselves invalid, illegal or unenforceable) shall not in
any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of
this Agreement (including, without limitation, all portions of any paragraphs of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that are not themselves
invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable and to give effect to Section 11.1 hereof.

          11.3 Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.

 

 

          11.4 Subrogation. In the event of full payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of recovery of the
Indemnitee, who shall execute all documents required and shall do all acts that may be necessary or
desirable to secure such rights and to enable the Company effectively to bring suit to enforce such
rights.

          11.5 Counterparts. This Agreement may be executed in one or more counterparts, which
shall together constitute one agreement.

          11.6 Successors and Assigns. The terms of this Agreement shall bind, and shall inure
to the benefit of, the successors and assigns of the parties hereto.

          11.7 Notice. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed duly given: (a) if delivered by hand and signed
for by the party addressee; or (b) if mailed by certified or registered mail, with postage prepaid,
on the third business day after the mailing date. Addresses for notice to either party are as
shown on the signature page of this Agreement or as subsequently modified by written notice.

          11.8 Governing Law. This Agreement shall be governed exclusively by and construed
according to the laws of the State of Delaware, without giving effect to that body of laws
pertaining to conflict of laws.

          11.9 Consent to Jurisdiction. The Company and the Indemnitee each hereby irrevocably
consent to the jurisdiction of the courts of the State of Delaware for all purposes in connection
with any action or proceeding that arises out of or relates to this Agreement.

          11.10 Attorneys’ Fees. In the event Indemnitee is required to bring any action to
enforce rights under this Agreement (including, without limitation, the expenses of any Proceeding
described in Section 1.3) the Indemnitee shall be entitled to all reasonable fees and expenses in
bringing and pursuing such action, unless a court of competent jurisdiction finds each of the
material claims of the Indemnitee in any such action was frivolous and not made in good faith.

 

 

     IN WITNESS WHEREOF, the parties hereto have entered into this Indemnity Agreement effective as
of the date first written above.

	 	 	 	 	 	 	 
	SUCCESSFACTORS, INC.	 	INDEMNITEE:
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Name

	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Address

	 	 	 	Address:

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