{"id":43814,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/investor-rights-agreement-corio-inc-and-ernst-amp-amp-young.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"investor-rights-agreement-corio-inc-and-ernst-amp-amp-young","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/securities\/investor-rights-agreement-corio-inc-and-ernst-amp-amp-young.html","title":{"rendered":"Investor Rights Agreement &#8211; Corio Inc. and Ernst &#038; Young LLP"},"content":{"rendered":"<pre>                                  CORIO, INC.\n                            INVESTOR RIGHTS AGREEMENT\n\n               This Investor Rights Agreement (this \"AGREEMENT\") is made and\nentered into as of April 20, 2000, by and between Corio, Inc., a Delaware\ncorporation (the \"COMPANY\"), and the consulting services division of Ernst &amp; Young LLP, as the same may hereafter be constituted as an entity separate from\nErnst &amp; Young LLP (the \"INVESTOR\").\n\n                                 R E C I T A L S\n\n               A. The Investor desires to obtain from the Company, and the\nCompany has agreed to grant to the Investor, the right to acquire warrants (the\n\"WARRANTS\") to purchase shares of the Company's Common Stock (the \"WARRANT\nSHARES\") on the terms and conditions set forth in the Warrant Rights Agreement,\ndated of even date herewith by and between the Company and the Investor (the\n\"WARRANT RIGHTS AGREEMENT\").\n\n               B. The Company and the Investor are also entering into certain\ncommercial arrangements of mutual benefit, pursuant to the Alliance and\nCo-Marketing Agreement referred to in the Warrant Rights Agreement (the \"JOINT\nMARKETING AGREEMENT,\" together with the Warrant Rights Agreement and this\nAgreement, the \"OPERATIVE AGREEMENTS\").\n\n               C. The Warrant Rights Agreement provides that the Investor and\nthe Company shall each be granted certain rights, all as more fully set forth\nherein.\n\n               NOW, THEREFORE, in consideration of the foregoing, the mutual\npromises hereinafter set forth, and other good and valuable consideration, the\nreceipt and sufficiency of which are hereby acknowledged, the parties hereto\nagree as follows:\n\n               1.  STANDSTILL AGREEMENT.\n                \n                   1.1 Standstill. The Investor agrees that the Investor (as\ndefined below) shall not acquire, or enter into discussions, negotiations,\narrangements or understandings with any third party to acquire, beneficial\nownership (as defined in Rule 13d-3 promulgated under the Securities Exchange\nAct of 1934, as amended) of any Company Securities (as defined below) without\nthe prior written consent of the Board of Directors of the Company, except, in\nany case, (i) shares issued upon the due exercise of the Warrants, and (ii)\nshares issued by way of stock dividends or other distributions or offerings made\navailable to the Investor by the Company as a result of such distribution or\noffering being made by the Company to all holders generally of the same class or\nclasses of Company Securities held by the Investor.\n\n                   1.2 Company Securities Defined: As used in this Section 1,\nthe term \"COMPANY SECURITIES\" means shares of Preferred Stock or Common Stock of\nthe Company and any other securities issued by the Company having the ordinary\npower to vote in the election of directors of the Company (\"EQUITY SECURITIES\"),\nas well as any securities convertible into or exchangeable for Equity Securities\nor any other right to acquire Equity Securities. The term Company Securities\n\n\n\n   2\nincludes, without limiting the foregoing, securities and instruments issued by\nthe Company having such power only upon the happening of a contingency that has\nnot yet occurred. This provision shall not prevent, however, the due exercise of\nthe Warrants issued pursuant to the Warrant Rights Agreement in accordance with\nthe terms of such respective Warrants.\n\n                   1.3 Additional Terms Defined: In this Agreement, the term\n\"PERSON\" shall mean a person, partnership, trust or other entity and the term\n\"PERSONS\" shall have a corresponding meaning, and the term \"AFFILIATE\" of a\nPerson shall mean any other Person directly or indirectly controlling,\ncontrolled by or under common control with the first Person, where for the\npurposes hereof \"control\" shall have the meaning ascribed under the Securities\nAct of 1933, as amended, and the rules and regulations thereunder. In this\nAgreement, the terms \"WARRANTS\", \"WARRANT SHARES\", \"FIRST WARRANT\", \"SECOND\nWARRANT\", \"THIRD WARRANT\" and \"FOURTH WARRANT\" shall have the respective\nmeanings specified in the Warrant Rights Agreement. For the purposes of Sections\n1 and 2, the \"INVESTOR\" shall refer to the Investor and any Affiliate of the\nInvestor (including any Person that may become an Affiliate of the Investor\nhereafter), individually and collectively.\n\n               2. COMPANY FIRST REFUSAL ON SALE OF SHARES BY INVESTOR.\n\n                   2.1 Company Right of First Refusal. The Investor may not\nsell, transfer or otherwise dispose or attempt to sell, transfer or otherwise\ndispose of any Company Securities (referred to as a \"PROPOSED DISPOSITION\")\nwithout first providing written notice (the \"NOTICE\") of such intention to the\nCompany. Such Notice shall specify in reasonable detail the Company Securities\nto be disposed, the identity of the proposed transferee, the proposed means and\ntiming of disposition, and the purchase price. The Company shall have sixty (60)\ndays from delivery of such Notice to elect to purchase all or any portion of\nsuch Company Securities from the Investor at the Purchase Price (as defined\nbelow) by delivering to the Investor an irrevocable written election by the\nCompany to purchase such Company Securities at such Purchase Price (the\n\"ELECTION\"). In the event the Company delivers such Election, the Company shall\nbe obligated to purchase, and the Investor shall be obligated to sell, such\nCompany Securities at a closing to be held at such time and place as the Company\nand the Investor shall agree, not more than thirty (30) days following the date\nof the Company's Election.\n\n                   2.2 Exception for Certain Transfers. The following\ntransactions shall be excluded from the provisions of Section 2.1:\n\n                       (a) Investor may transfer Company Securities (i) to any\nwholly-owned subsidiary of the Investor, in a transaction for no consideration,\nand (ii) subject to prior written notice to the Company and compliance with\napplicable securities, to individual constituent partners of the Investor\npursuant to compensatory arrangements, in an amount not exceeding 10,000 shares\nof Company Securities to any individual constituent partner in any one year or\n20,000 shares of Company Securities to any individual constituent partner in the\naggregate (subject in each case to appropriate adjustment for all stock splits,\ndividends, combinations, recapitalizations and the like), provided in each case\nthat the transferee agrees to be bound by the provisions of this Agreement;\n\n\n\n                                      -2-\n   3\n                       (b) Subject to the restrictions herein, at such time as\nthe Company's Common Stock is publicly traded on a national securities exchange\nor the Nasdaq National Market, the Investor may sell Common Stock in open market\ntransactions through a broker dealer, in an aggregate amount not to exceed in\nany 90 day period 1% of the aggregate number of outstanding shares of Common\nStock of the Company; and\n\n                       (c) Subject to the restrictions herein, at such time as\nthe Company's Common Stock is publicly traded on a national securities exchange\nor the Nasdaq National Market, any individual constituent partner of the\nInvestor who receives shares pursuant to subparagraph 2.2(a)(ii) above may\nresell such shares in open market transactions through a broker dealer.\n\n                   2.3 Additional Exception. Notwithstanding Section 2.1, the\nInvestor may dispose of its Company Securities in response to a \"SPECIFIED\nTENDER OFFER.\" In this Section 2.3 a Specified Tender Offer shall mean (a) an\noffer to purchase or exchange for cash or other consideration any Company\nSecurities which is made by another Person or Related Group of Persons pursuant\nto a tender offer which is not opposed by the Board of Directors of the Company\nwithin the time such Board is required by the applicable law to advise the\nCompany's stockholders of the Board's position on such offer; and (b) any other\noffer made by another Person or Related Group of Persons to purchase or exchange\nfor cash or other consideration any Company Securities which, if successful,\nwould result in such Person or Related Group of Persons owning or having the\nright to acquire Company Securities entitling the holders thereof to more than\nninety percent (90%) of the Total Voting Power of the Company (as defined\nbelow).\n\n                   2.4 Forfeiture of Company Right of First Refusal. If the\nCompany fails to deliver an Election within the sixty (60) day period specified\nin Section 2.1, the Company shall forfeit its rights under Section 2.1 with\nrespect to such Proposed Disposition, provided the terms and conditions of such\nProposed Disposition are not subsequently modified. If the terms and conditions\nof a Proposed Disposition are modified subsequent to the sixty (60) day period\nwithin which the Company can deliver the Election referred to in Section 2.1,\nsuch Proposed Disposition shall be deemed to be a new Proposed Disposition\nsubject to the rights of the Company contained in Section 2.1.\n\n                   2.5 Investor Sale Right Upon Forfeiture. If the Company\nforfeits its rights to acquire Company Securities under the terms of and in\naccordance with Section 2.4, the member or members of the Investor that shall\nhave provided the Notice to the Company shall be free to Dispose all or a\nportion of the Company Securities referenced in the Notice in the manner and at\nthe price provided in the Notice, provided that such Disposition must be made to\na Person who (together with any Related Group of Persons) would not, to the\nInvestor's knowledge, own or have the right to acquire 5% or more of the Company\nSecurities outstanding immediately after such Disposition. In other than an open\nmarket sale of a block of shares representing less than 2% of the Total Voting\nPower of the Company, the Investor shall obtain from the transferee a written\nrepresentation (on which the Company shall expressly be entitled to rely) to the\neffect that the transferee together with any Related Group of Persons shall not\nbeneficially own following the Disposition 5% or more of the Total Voting Power\nof the Company.\n\n\n\n                                      -3-\n   4\n\n                   2.6 Definitions. In this Section 2, the following terms shall\nhave these meanings:\n\n                       (a) \"PURCHASE PRICE\" means the lesser of (i) the value of\nthe consideration to be received by the Investor in a Proposed Disposition of\nCompany Securities, as specified in the Notice, and (ii) the Market Price of\nsuch Company Securities at the time of such Proposed Disposition. In this\nAgreement, the term \"MARKET PRICE\" means, as to a Company Security, the average\nof the closing prices of sales on all domestic securities exchanges and national\nmarkets on which the Company Security may at the time be listed, or, if there\nhave been no sales on any such exchange on any day, the average of the highest\nbid and lowest asked prices on all such exchanges at the end of such day, or, if\non any day the Company Security is not so listed, the average of the\nrepresentative bid and asked prices quoted in the Nasdaq National Market as of\n4:00 P.M., New York time, on such day, or, if on any day the Company Security is\nnot quoted in the Nasdaq National Market, the average of the highest bid and\nlowest asked prices on such day in the domestic over-the-counter market as\nreported by the National Quotation Bureau, Incorporated, or any similar\nsuccessor organization, in each such case averaged over a period of thirty (30)\nTrading Days immediately preceding the date of the Proposed Disposition;\nPROVIDED, HOWEVER, that if the Company Security is listed on any domestic\nsecurities exchange the term \"TRADING DAYS\" as used in this sentence means days\non which such exchange is open for trading. If at any time the Company Security\nis not listed on any domestic securities exchange or quoted in the Nasdaq\nNational Market or the domestic over-the counter market, the \"MARKET PRICE\"\nshall be the fair value thereof determined jointly by the Company and the\nInvestor, PROVIDED, HOWEVER that if such parties are unable to reach agreement\nwithin fifteen (15) business days following written notice from the Investor to\nthe Company setting forth the Investor's determination of such fair value, such\nfair value shall be determined by an appraiser jointly selected by the Company\nand the Investor. The determination of such appraiser shall be final and binding\non the Company and the Investor, and the Company and the Investor shall pay in\nequal proportions the fees and expenses of such appraiser.\n\n                       (b) \"RELATED GROUP OF PERSONS\". A person is \"RELATED\" to\nanother person if such person controls the other person, directly or indirectly,\nin any manner whatsoever or if the person is so controlled by the other person.\nA person is also related to another person if both are controlled, directly or\nindirectly in any manner whatsoever, by the same person. Persons who are related\nto the same person are related to one another. A \"RELATED GROUP OF PERSONS\" is a\ngroup comprising Persons each one of whom is related to the other.\n\n                       (c) \"TOTAL VOTING POWER\" of any Person means the total\nnumber of votes that can be cast in the election of directors (or similar\nmanaging authority) of such Person at any meeting of stockholders (or equity\nowners) of such Person if all outstanding securities of such Person entitled to\nvote in such election were present and voted at such meeting.\n\n               3. COMPANY RIGHT TO ACQUIRE WARRANT SHARES ON CERTAIN EVENTS.\n\n                   3.1 Repurchase Right on Change in Control or Breach.\n\n                      (a) Repurchase Right. The Company shall have the right to\nrepurchase certain Warrant Shares issued under the First Warrant at a purchase\nprice per share equal to the Per \n\n\n\n                                      -4-\n   5\nShare Purchase Price specified in such Warrant, subject to appropriate\nadjustment for all stock splits, dividends, combinations, recapitalizations and\nthe like, upon the occurrence of any of the following events (herein, each\nreferred to as a \"SPECIFIED EVENT\"):\n\n                      (i) Change in Control. Any transaction or series of\nrelated transactions by which a Person or Related Group of Persons, other than\nErnst &amp; Young LLP and its Affiliates and other than Cap Gemini S.A. or its\nAffiliates (collectively, \"CAP GEMINI\"), acquires 40% or more of the equity\ninterest in or Total Voting Power of the Investor or the High Growth Middle\nMarket (as defined under the Joint Marketing Agreement) implementation business\nof the Investor (or a similar transaction affecting a successor to any of the\nforegoing businesses);\n\n                      (ii) Failure to Assume by Cap Gemini. Any transaction or\nseries of related transactions by which Cap Gemini acquires 40% or more of the\nequity interests in or Total Voting Power of the Investor or the High Growth\nMiddle Market implementation business of the Investor, unless Cap Gemini and Cap\nGemini Ernst &amp; Young U.S. LLC, the entity organized by Cap Gemini to conduct the\nbusiness of the Investor, or such other entity organized for that purpose (each,\nan \"ONGOING ENTITY\") assume all obligations of the Investor under the Operative\nAgreements;\n\n                      (iii) Formation of Competitor. The creation by the\nInvestor or any successor to the Investor (including, following any acquisition\nby Cap Gemini of a controlling equity interest in the Investor, the Ongoing\nEntity or Cap Gemini) of a High Growth Middle Market hosting business that the\nCompany reasonably concludes competes with the Company; or\n\n                      (iv) Breach of Joint Marketing Agreement. The occurrence\nof a material breach of the Joint Marketing Agreement by the Investor or any\nsuccessor to the Investor (including, following any acquisition by Cap Gemini of\na controlling equity interest in the Investor, the Ongoing Entity or Cap\nGemini), including, among others, a breach of Section 4 (concerning\nexclusivity), of such agreement, which breach remains uncured for a period of\nthirty (30) days after the giving of notice thereof.\n\n                   (b) Number of Shares That May Be Purchased. (i) Except as\nprovided in paragraph (ii) hereof, the number of Warrant Shares issuable under\nthe First Warrant that the Company shall be entitled to repurchase from the\nInvestor upon the occurrence of a Specified Event shall be calculated as follows\n(appropriately adjusted in each case for all stock splits, dividends,\ncombinations, recapitalizations and the like): (i) if the Specified Event occurs\nwithin three (3) years from the date hereof, 4,666,666 Warrant Shares; (ii) if\nthe Specified Event occurs more than three (3) years but less than five (5)\nyears from the date hereof, 2,333,333 Warrant Shares; and (iii) if the Specified\nEvent occurs more than five (5) years but less than seven (7) years from the\ndate hereof, 1,666,667 Warrant Shares.\n\n                   (c) Notwithstanding the foregoing, in the event that the\nCompany shall have repurchased Warrant Shares issuable under the First Warrant\npursuant to Section 3.2 hereof (or \n\n\n\n                                      -5-\n   6\nthe total number of shares issuable under the First Warrant shall have been\nreduced pursuant to Sections 3.2 and 3.3 hereof), then the number of Warrant\nShares that the Company shall have the right to repurchase pursuant to this\nSection 3.1 shall be reduced. In such event, the number of Warrant Shares that\nthe Company may repurchase under this Section 3.1 shall be reduced\nproportionately based on the ratio of the number of Warrant Shares repurchased\nunder Section 3.2 (or cancelled under Sections 3.2 and 3.3) to the total number\nof Warrant Shares originally issuable under the First Warrant (in each case\nappropriately adjusted for all stock splits, dividends, combinations,\nrecapitalizations and the like). As an example, if the Company repurchases\none-fourth of the Warrant Shares originally issuable under the First Warrant\npursuant to Section 3.2, then the number of Warrant Shares that otherwise may be\nrepurchased under this Section 3.1 shall be reduced by one-fourth.\n\n               3.2 Repurchase Rights on Investor Election of NonExclusivity.\n\n                      (a) Investor Election. In the event that the Company shall\nnot have completed its initial underwritten offering of equity securities to the\npublic (a \"QUALIFIED IPO\") by December 31, 2000, then at any time prior to April\n___, 2002 the Investor may elect, by written notice to the Company, to terminate\nthe exclusivity provisions set forth in Sections 4.1 and 4.2 of the Joint\nMarketing Agreement. In such event, the Company shall have the right to\nrepurchase from the Investor 2,333,333 Warrant Shares issuable under the First\nWarrant at a purchase price per share equal to the Per Share Purchase Price\nspecified in the First Warrant (subject to appropriate adjustment in the case of\nsuch number and purchase price per share for all stock splits, dividends,\ncombinations, recapitalizations and the like). The Company shall effect such\nrepurchase by written notice to the Investor within ninety (90) days following\nthe date of notice from the Investor terminating exclusivity.\n\n               3.3 Cancellation of Warrant or Payment in Cash in Lieu of\nPurchase of Shares. If upon the occurrence of any event specified in Section 3.1\nor 3.2 and the election by the Company to repurchase Warrant Shares from the\nInvestor the Investor shall not have previously exercised the First Warrant for\na sufficient number of Warrant Shares to satisfy the obligation to sell Warrant\nShares to the Company, then the Company shall have the right to cancel the First\nWarrant (for no consideration) for a number of shares equal to the shortfall in\nthe number of Warrant Shares to be so repurchased.\n\n               3.4 Repurchase Rights on Independence Issue and Accounting Issue.\n\n                      (a) Independence Issue. The parties hereto acknowledge\nthat the U. S. Securities and Exchange Commission (the \"SEC\") continues to\nreview certain issues relating to the \"INDEPENDENCE\" of independent public\naccountants and that this review could result in an assessment by the SEC of the\nimpact on independence of the transactions contemplated by the Operative\nAgreements (collectively, the \"OPERATIVE TRANSACTIONS\"). The parties hereto\nfurther acknowledge that the Operative Transactions could create an issue\nregarding Ernst &amp; Young LLP's independence (\"INDEPENDENCE\") under the SEC's\nrules and interpretations relating to auditor independence, under any federal or\nstate governmental or regulatory rules or under professional guidelines\napplicable to independent public accountants. The parties agree that in the\nevent that after\n\n\n\n                                      -6-\n   7\nthe Company's initial public offering it becomes known to either party that the\nStaff of the SEC shall have made any pronouncement or taken any action which, in\nthe reasonable, good faith judgment of Ernst &amp; Young LLP or the Company\nindicates that the Operative Transactions have or are reasonably likely to have\na material adverse effect on the Independence of Ernst &amp; Young LLP, then such\nparty shall notify the other party of such pronouncement or action (each, an\n\"INDEPENDENCE ISSUE\") by telephone and facsimile notice.\n\n                      (b) Accounting Issue. The parties acknowledge that the SEC\ncontinues to review the appropriate accounting treatment associated with\nwarrants issued by a corporation in connection with commercial relationships\nsuch as those contemplated by the Joint Marketing Agreement and the Warrants\n(collectively, the \"COMMERCIAL WARRANT TRANSACTIONS\"). In the event that the\nCompany shall determine that, as a result of SEC requirements or changes in\naccounting principles, the Commercial Warrant Transactions require accounting\ntreatment that differs materially and adversely from the accounting for the\nCommercial Warrant Transactions reflected in the Company's registration\nstatement on Form S-1 initially filed with the SEC in connection with the\nCompany's initial public offering (which accounting shall be reviewed with the\nInvestor for information purposes prior to the filing of such form), then the\nCompany shall notify Ernst &amp; Young LLP of such accounting change (an \"ACCOUNTING\nISSUE\") by telephone and facsimile notice.\n\n                      (c) Disposition and Termination of Rights. If the\nIndependence Issue or the Accounting Issue, as the case may be, shall not have\nbeen satisfactorily resolved within ninety (90) business days following the date\nof the notices referred to in Section 3.4(a) and 3.4(b) (deemed to be the date\nof the telephone and facsimile transmission, which date is herein referred to as\nthe \"PARTICULAR DATE\") and, in the good faith and reasonable opinion of a\nmajority of the Board of Directors, the Independence Issue or Accounting Issue\nis interfering with, or appears reasonably likely to interfere with, the ability\nof the Company to conduct its business in the ordinary course or is resulting\nin, or appears reasonably likely to result in a material and adverse impact on\nthe Company's business, financial condition or reported financial results, then:\n\n                           (i) the Company may, at its election, by written\nnotice to the Investor, terminate the Investor's rights upon a proposed sale of\nthe Company specified in Section 7.1 hereof;\n\n                           (ii) the Company may, at its election, by written\nnotice to the Investor: (A) terminate and cancel in their entirety all rights of\nthe Investor to receive Warrant Shares under the First Warrant to the extent the\nFirst Warrant shall not previously have been exercised and (B) to the extent the\nFirst Warrant shall previously have been exercised, the Company shall have the\nright to acquire each Warrant Share issued upon such exercise and then held by\nthe Investor at a price of $6.50 per Warrant Share (subject to adjustment for\nall stock splits, dividends, combinations, recapitablizations and the like);\nprovided, however, that a certain portion of the Warrant Shares which shall have\ntheretofore been issued on exercise of the First Warrant and described below as\nthe \"FIRST WARRANT RETAINED SHARES\" may not be so repurchased by the Company.\n\n\n\n                                      -7-\n   8\nThe number of Warrant Shares issued under the First Warrant and which the\nCompany shall not be entitled to repurchase as provided in this Section\n3.4(c)(ii) (such retained shares being referred to as the \"FIRST WARRANT\nRETAINED SHARES\") shall be determined as follows:\n\n                           a) If the Particular Date is before April 20, 2001,\nthe Investor's First Warrant Retained Shares shall be nil shares;\n\n                           b) If the Particular Date is on or after April 20,\n2001 and before April 20, 2002, the Investor's First Warrant Retained Shares as\nof such Particular Date shall be 777,777 shares (subject to adjustment for all\nstock splits, dividends, combinations, recapitablizations and the like);\n\n                           c) If the Particular Date is on or after April 20,\n2002 and before April 20, 2003, the Investor's First Warrant Retained Shares as\nof such Particular Date shall be 1,555,555 shares (subject to adjustment for all\nstock splits, dividends, combinations, recapitablizations and the like);\n\n                           d) If the Particular Date is on or after April 20,\n2003 and before April 20, 2004 the Investor's First Warrant Retained Shares\nshall be 2,166,666 shares (subject to adjustment for all stock splits,\ndividends, combinations, recapitablizations and the like);\n\n                           e) If the Particular Date is on or after April 20,\n2004 and before April 20, 2005 the Investor's First Warrant Retained Shares as\nof such Particular Date shall be 2,333,333 shares (subject to adjustment for all\nstock splits, dividends, combinations, recapitablizations and the like);\n\n                           f) If the Particular Date is on or after April 20,\n2005 and before April 20, 2006 the Investor's First Warrant Retained Shares as\nof such Particular Date shall be 2,666,666 shares (subject to adjustment for all\nstock splits, dividends, combinations, recapitablizations and the like);\n\n                           g) If the Particular Date is on or after April 20,\n2006 and before April 20, 2007 the Investor's First Warrant Retained Shares as\nof such Particular Date shall be 2,999,999 shares (subject to adjustment for all\nstock splits, dividends, combinations, recapitablizations and the like); and\n\n                           h) If the Particular Date is on or after April 20,\n2007, the Investor's First Warrant Retained Shares as of such Particular Date\nshall be 4,666,666 shares (subject to adjustment for all stock splits,\ndividends, combinations, recapitablizations and the like).\n\n                           (iii) the Company may, at its election, by written\nnotice to the Investor require the Investor to sell to the Company, at a price\nper share equal to the Market Price (determined as provided in Section 2 hereof)\nall the Investor's First Warrant Retained Shares;\n\n\n\n                                      -8-\n   9\n                           (iv) the Company may at its election, by written\nnotice to the Investor, terminate and cancel in their entirety all rights of the\nInvestor to receive Warrant Shares, respectively, under the Second Warrant, the\nThird Warrant and the Fourth Warrant and shall have the right to acquire at the\nMarket Price (determined as provided in Section 2 hereof) each Warrant Share\nthat shall have theretofore been issued upon the exercise of the Second Warrant,\nthe Third Warrant or the Fourth Warrant, respectively, and are then held by the\nInvestor; and\n\n                           (v) to the extent that the Company has not acquired\nfrom the Investor all of the Warrant Shares that it may elect to acquire under\nSection 3.4(c)(iii) and Section 3.4(c)(iv), the Company may, at its election, by\nwritten notice to the Investor require the Investor to sell such shares within\nsixty (60) days to a \"FINANCIAL INSTITUTION\" acceptable to the Company. For the\npurpose of this Section 3.4(c)(v), a \"FINANCIAL INSTITUTION\" shall mean a\nfinancial institution such as a bank, investment company, broker-dealer or\nsimilar institution, which is not an operating entity, acquires the shares\nsolely for passive investment purposes, and agrees in writing to the Company\nthat the Warrant Shares may only be resold in open market sales through a\nbroker-dealer or to a market maker.\n\n                   3.5 Investor Election on Company Exercise of Disposition and\nTermination Rights. If the Company elects under Sections 3.4(c) to terminate the\nrights of the Investor specified therein and to require the Investor to dispose\nof its Warrant Shares as specified therein, the Investor may, at its election,\nby written notice to the Company, terminate the exclusivity provisions set forth\nin Sections 4.1 and 4.2 of the Joint Marketing Agreement and terminate the\nCompany's right of first refusal on the sale of the Investor's Business\nspecified in Section 4 hereof.\n\n                   3.6 No Sale of Shares Subject to Repurchase Rights. Neither\nthe Investor nor any Person to whom the First Warrant (or Warrant Shares\nissuable on exercise of the First Warrant) may properly be transferred or\nassigned under the terms of the Warrant Rights Agreement, this Agreement and the\nFirst Warrant shall sell, assign or otherwise transfer any Warrant Shares issued\nor issuable under the First Warrant to the extent that, and for so long as, such\nWarrant Shares remain subject to any potential repurchase rights of the Company\nunder this Section 3.\n\n               4. COMPANY RIGHT OF FIRST REFUSAL ON SALE OF HGMM BUSINESS.\n\n                   4.1 Company Right of First Refusal. The Investor may not\ndispose or attempt to dispose of all or any material portion of its High Growth\nMiddle Market implementation business (such business, or the portion of such\nbusiness and assets, proposed to be sold is referred to as the \"BUSINESS\") (such\ndisposition or attempted disposition herein referred to as a \"PROPOSED\nDISPOSITION\") without first providing written notice (the \"NOTICE\") of such\nintention to the Company. Such Notice shall specify in reasonable detail the\nBusiness proposed to be disposed, the identity of the proposed transferee, the\nproposed means and timing of disposition, and the proposed purchase price (the\n\"BUSINESS PURCHASE PRICE\"), and shall also include a copy of all due diligence\nmaterials provided to the proposed purchaser of the Business. In addition, the\nInvestor shall promptly provide to the Company and its representatives the\nopportunity to perform full due diligence (including without limitation\nbusiness, financial and legal due diligence) with respect to the Business. The\nCompany shall have fifteen (15) days from delivery of such Notice to elect to\npurchase such \n\n\n\n                                      -9-\n   10\nBusiness from the Investor at the Business Purchase Price by delivering to the\nInvestor an irrevocable written election by the Company to purchase such\nBusiness at such price (the \"ELECTION\"). In the event the Company delivers such\nElection, the Company shall be obligated to purchase, and the Investor shall be\nobligated to sell, such Business at a closing date mutually agreed by the\nparties not more than sixty (60) days following the date of the Company's\nElection (or as soon as practicable thereafter following completion of all\nrequisite regulatory procedures).\n\n                   4.2 Forfeiture of Company Right of First Refusal. If the\nCompany fails to deliver an Election within the fifteen (15) day period\nspecified in Section 4.1, the Company shall forfeit its rights under Section 4.1\nwith respect to such Proposed Disposition, the Investor shall be free to dispose\nof all or a portion of its Business, to the Person and on the terms described in\nthe Notice, provided the terms and conditions of such Proposed Disposition are\nnot subsequently modified. If the terms and conditions of a Proposed Disposition\nare modified subsequent to the fifteen (15) day period within which the Company\ncan deliver the Election referred to in Section 4.1, such Proposed Disposition\nshall be deemed to be a new Proposed Disposition subject to the rights of the\nCompany contained in Section 4.1.\n\n                   4.3 Exception. Ernst &amp; Young LLP has entered into an\nagreement to sell its consulting services division, which division includes the\nBusiness, to Cap Gemini, which intends to carry on the Business through an\nOngoing Entity. The Company shall not have a right of first refusal pursuant to\nthis Section 4 on any such transaction with Cap Gemini, provided that Cap\nGemini, on behalf of Cap Gemini and its Affiliates, and the Ongoing Entity each\nagree to be bound by and subject to all of the terms and provisions of this\nAgreement, the Warrant Rights Agreement and the Joint Marketing Agreement on the\nsame basis as the obligations of the Investor hereunder and thereunder.\n\n               5. LEGENDS; STOP TRANSFER RESTRICTIONS.\n\n               The Warrants and the certificates evidencing Warrant Shares\nissued on exercise of the Warrants (as well as any securities issued in respect\nthereof) shall bear restrictive legends referring to the restrictions set forth\nin this Agreement. In addition, the Company shall be entitled to issue stop\ntransfer instructions to the transfer agent for the Warrants, Warrant Shares and\nany other securities issued in respect thereof to ensure compliance with the\nrestrictions set forth in this Agreement.\n\n               6. INVESTOR BOARD REPRESENTATION.\n\n                      (a) Subject to Section 6.1(b), until the Company's\nQualified IPO, and thereafter for so long as the Investor beneficially owns ten\npercent (10%) or more of the Total Voting Power of the Company, the Board of\nDirectors of the Company shall include in the slate of nominees presented to the\nstockholders of the Company for election one (1) nominee designated by the\nInvestor. Such director (herein referred to as the \"INVESTOR DIRECTOR\") shall\nhave the customary and usual rights of a member of the Company's Board of\nDirectors to participate in the management of Company affairs, PROVIDED,\nHOWEVER, that in the event the Company's Board of Directors votes on an\nacquisition, merger or other combination with and proposed by Arthur Anderson,\nAndersen\n\n\n\n                                      -10-\n   11\nConsulting, PricewaterhouseCoopers, KPMG or Deloitte &amp; Touch (a \"STRATEGIC\nACQUISITION PROPOSAL\"), the Investor Director shall at the request of the Board\nof Directors recuse himself or herself from the deliberations of such proposal\nand any vote thereon.\n\n                      (b) The Board of Directors rights herein shall terminate\nupon the first to occur of (i) termination of the Joint Marketing Agreement (ii)\nthe acquisition by any Person other than Ernst &amp; Young LLP or Cap Gemini of 40%\nor more of the equity interests in or Total Voting Power of the Investor. In\naddition, following any acquisition by Cap Gemini of 40% or more of the equity\ninterests in or Total Voting Power of the Investor, and the assignment of this\nBoard of Director right to Cap Gemini, any director nominee of Cap Gemini other\nthan David Shpilberg must be an individual deemed acceptable by the Company.\n\n               7. INVESTOR RIGHTS UPON PROPOSED SALE OF COMPANY.\n\n                   7.1 Right of First Refusal on Sale of Company. In the event\nthat the Company receives a Strategic Acquisition Proposal, the Company must\nprovide written notice (the \"NOTICE\") of such Strategic Acquisition Proposal to\nthe Investor specifying in reasonable detail the terms and conditions of such\nproposal, including the identity of the proposed purchaser and the purchase\nprice. The Investor shall have fifteen (15) days from delivery of such Notice to\nelect to undertake the acquisition described in the Notice (the \"ACQUISITION\")\non the same terms as specified in the Notice, by delivering to the Company an\nirrevocable written election to undertake the Acquisition at such price so (the\n\"ELECTION\"). In the event the Investor delivers such Election, the Investor\nshall be obligated to undertake the Acquisition, and the Company shall be\nobligated to undertake the Acquisition subject to applicable stockholder\napproval requirements, at a closing date mutually agreed by the parties not more\nthan fifteen (15) days following the date of the Investor's Election (or as soon\nas practicable thereafter following completion of all requisite regulatory\nprocedures).\n\n                   7.2 Forfeiture of Right of First Refusal. If the Investor\nfails to deliver an Election within the fifteen (15) day period specified in\nSection 7.1, the Investor shall forfeit its rights under Section 7.1 with\nrespect to the proposed Acquisition, and the Company shall be free to undertake\nthe Acquisition with the Person and on the terms described in the Notice,\nprovided the terms and conditions of such proposed Acquisition are not\nsubsequently modified. If the terms and conditions of the proposed Acquisition\nare modified subsequent to the fifteen (15) day period within which the Investor\ncan deliver the Election referred to in Section 7.1, the proposed Acquisition\nshall be deemed to be a new Strategic Acquisition Proposal subject to the rights\nof the Investor contained in Section 7.1.\n\n                   7.3 Termination. The rights of the Investor pursuant to this\nSection 7 shall terminate upon the Company's Qualified IPO.\n\n               8. REGISTRATION RIGHTS.\n\n\n\n                                      -11-\n   12\n                   8.1 Definitions. For purposes of this Section 8:\n\n                      (a) The term \"1934 ACT\" means the Securities Exchange Act\nof 1934, as amended. \n\n                      (b) The term \"ACT\" means the Securities Act of 1933, as\namended.\n\n                      (c) \"COMMON STOCK\" means the Company's common stock, par\nvalue per share of $0.001.\n\n                      (d) The term \"FORM S-3\" means such form under the Act as\nin effect on the date hereof or any registration form under the Act subsequently\nadopted by the SEC which permits inclusion or incorporation of substantial\ninformation by reference to other documents filed by the Company with the SEC.\n\n                      (e) The term \"HOLDER\" means any person owning or having\nthe right to acquire Registrable Securities or any assignee thereof in\naccordance with Section 8.11 hereof.\n\n                      (f) The terms \"REGISTER\", \"REGISTERED\" and \"REGISTRATION\"\nrefer to a registration effected by preparing and filing a registration\nstatement or similar document in compliance with the Act, and the declaration or\nordering of effectiveness of such registration statement or document by the SEC.\n\n                      (g) The term \"REGISTRABLE SECURITIES\" means (i) Common\nStock of the Company issuable or issued upon exercise of the Warrants, and (ii)\nany Common Stock of the Company issued as a dividend or other distribution with\nrespect to, or in exchange for or in replacement of the shares referenced in\nclause (i), excluding in all cases, however, any Registrable Securities sold by\na person in a transaction in which his rights under this Section 8 are not duly\nassigned as provided herein or any Registrable Securities after such securities\nhave been sold to the public or sold pursuant to Rule 144 promulgated under the\nAct.\n\n                   8.2 Company Registration. \n\n                      (a) Registration Rights. If (but without any obligation to\ndo so) the Company proposes to register (including for this purpose a\nregistration effected by the Company for stockholders other than the Holders)\nany of its stock or other securities under the Act in connection with the public\noffering of such securities solely for cash (other than a registration relating\nsolely to the sale of securities to participants in a Company stock plan, a\nregistration pursuant to a Rule 145 transaction, a registration on any form\nwhich does not include substantially the same information as would be required\nto be included in a registration statement covering the sale of the Registrable\nSecurities or a registration in which the only Common Stock being registered is\nCommon Stock issuable upon conversion of debt securities which are also being\nregistered), the Company shall, at such time, promptly give each Holder written\nnotice of such registration. Upon the written request of each Holder given\nwithin fifteen (15) days after the date of such notice by the Company, the\n\n\n\n                                      -12-\n   13\nCompany shall, subject to the provisions of paragraph 8.2(b) below, cause to be\nregistered under the Act all of the Registrable Securities that each such Holder\nhas requested to be registered.\n\n                   (b) Underwriting Requirements. In connection with any\noffering involving an underwriting of shares of the Company's capital stock, the\nCompany shall not be required under this Section 8.2 to include any of Holder's\nsecurities in such underwriting unless the Holder accepts the terms of the\nunderwriting as agreed upon between the Company and the underwriters selected by\nit (or by other persons entitled to select the underwriters), provided such\nterms are reasonable and customary in an underwriting of similar securities and\nof a similar amount, and then only in such quantity as the underwriters\ndetermine in their sole discretion will not jeopardize the success of the\noffering by the Company. If the total amount of securities, including\nRegistrable Securities, requested by stockholders to be included in such\noffering exceeds the amount of securities sold other than by the Company that\nthe underwriters determine in their sole discretion is compatible with the\nsuccess of the offering, then the Company shall be required to include in the\noffering only that number of such securities, including Registrable Securities,\nwhich the underwriters determine in their sole discretion will not jeopardize\nthe success of the offering, and the underwriters may exclude Registrable\nSecurities from the offering entirely if the underwriters make the determination\ndescribed above and no other stockholder's securities are included. Allocation\nof securities to be sold in any such offering shall be made on a pro-rata basis\namong the selling stockholders according to the total number of securities held\nby each such selling stockholder and entitled to inclusion therein on the basis\nof a registration rights agreement with the Company. For purposes of allocation\nof securities to be included in any offering, for any selling stockholder which\nis a partnership or corporation, the \"affiliates\" (as defined in Rule 405 under\nthe Act), partners, retired partners and stockholders of such holder (and in the\ncase of a partnership, any affiliated partnerships), or the estates and family\nmembers of any such partners and retired partners and any trusts for the benefit\nof any of the foregoing persons shall be deemed to be a single \"selling\nstockholder,\" and any pro-rata reduction with respect to such \"selling\nstockholder\" shall be based upon the aggregate amount of shares carrying\nregistration rights owned by all entities and individuals included in such\n\"selling stockholder,\" as defined in this sentence.\n\n               8.3 Form S-3 Registration. In case the Company shall receive from\nany Holder or Holders a written request or requests that the Company effect a\nregistration on Form S-3 and any related qualification or compliance with\nrespect to all or a part of the Registrable Securities owned by such Holder or\nHolders, the Company will:\n\n                   (a) promptly give written notice of the proposed\nregistration, and any related qualification or compliance, to all other Holders;\nand\n\n                   (b) as soon as practicable, effect such registration and all\nsuch qualifications and compliance as may be so requested and as would permit or\nfacilitate the sale and distribution of all or such portion of such Holder's or\nHolders' Registrable Securities as are specified in such request, together with\nall or such portion of the Registrable Securities of any other Holder or Holders\njoining in such request as are specified in a written request given within\nfifteen (15) days after receipt of such written notice from the Company;\nprovided, however, that the Company shall \n\n\n\n                                      -13-\n   14\nnot be obligated to effect any such registration, qualification or compliance,\npursuant to this Section 8.3: (1) if the Registrable Securities requested by all\nHolders to be registered pursuant to this Section 8.3 have an anticipated\naggregate offering price to the public (before deducting any underwriter\ndiscounts, concessions or commissions) of less than $2,000,000; (2) if Form S-3\nis not available for such offering by the Holders; (3) if the Company shall\nfurnish to the Holders a certificate signed by the President of the Company\nstating that in the good faith judgment of the Board of Directors of the\nCompany, it would be seriously detrimental to the Company and its stockholders\nfor such Form S-3 Registration to be effected at such time, in which event the\nCompany shall have the right to defer the filing of the Form S-3 registration\nstatement for a period of not more than ninety (90) days after receipt of the\nrequest of the Holder or Holders under this Section 8.3; provided, however, that\nthe Company shall not utilize this right more than twice in any twelve month\nperiod; (4) if the Company has, within the twelve (12) month period preceding\nthe date of such request, already effected a registration on Form S-3 for the\nHolders pursuant to this Section 8.3; or (5) in any particular jurisdiction in\nwhich the Company would be required to qualify to do business or to execute a\ngeneral consent to service of process in effecting such registration,\nqualification or compliance.\n\n                   (c) Subject to the foregoing, the Company shall file a\nregistration statement covering the Registrable Securities and other securities\nso requested to be registered as soon as practicable after receipt of the\nrequest or requests of the Holders.\n\n               8.4 Obligations of the Company. Whenever required under this\nSection 8 to effect the registration of any Registrable Securities, the Company\nshall, as expeditiously as reasonably possible:\n\n                   (a) Prepare and file with the SEC a registration statement\nwith respect to such Registrable Securities and use its best efforts to cause\nsuch registration statement to become effective, and, upon the request of the\nHolders of a majority of the Registrable Securities registered thereunder, keep\nsuch registration statement effective for a period of up to ninety (90) days or\nuntil the distribution contemplated in the Registration Statement has been\ncompleted; provided, however, that such 90-day period shall be extended for a\nperiod of time equal to the period the Holder refrains from selling any\nsecurities included in such registration at the request of an underwriter of\nCommon Stock (or other securities) of the Company.\n\n                   (b) Prepare and file with the SEC such amendments and\nsupplements to such registration statement and the prospectus used in connection\nwith such registration statement as may be necessary to comply with the\nprovisions of the Act with respect to the disposition of all securities covered\nby such registration statement.\n\n                   (c) Furnish to the Holders such numbers of copies of a\nprospectus, including a preliminary prospectus, in conformity with the\nrequirements of the Act, and such other documents as they may reasonably request\nin order to facilitate the disposition of Registrable Securities owned by them.\n\n\n\n                                      -14-\n   15\n                   (d) Use its best efforts to register and qualify the\nsecurities covered by such registration statement under such other securities or\nBlue Sky laws of such jurisdictions as shall be reasonably requested by the\nHolders; provided that the Company shall not be required in connection therewith\nor as a condition thereto to qualify to do business or to file a general consent\nto service of process in any such states or jurisdictions.\n\n                   (e) In the event of any underwritten public offering, enter\ninto and perform its obligations under an underwriting agreement, in usual and\ncustomary form, with the managing underwriter of such offering. Each Holder\nparticipating in such underwriting shall also enter into and perform its\nobligations under such an agreement.\n\n                   (f) Notify each Holder of Registrable Securities covered by\nsuch registration statement at any time when a prospectus relating thereto is\nrequired to be delivered under the Act of the happening of any event as a result\nof which the prospectus included in such registration statement, as then in\neffect, includes an untrue statement of a material fact or omits to state a\nmaterial fact required to be stated therein or necessary to make the statements\ntherein not misleading in the light of the circumstances then existing.\n\n                   (g) Cause all such Registrable Securities registered pursuant\nhereunder to be listed on each securities exchange on which similar securities\nissued by the Company are then listed.\n\n                   (h) Provide a transfer agent and registrar for all\nRegistrable Securities registered pursuant hereunder and a CUSIP number for all\nsuch Registrable Securities, in each case not later than the effective date of\nsuch registration.\n\n                   (i) In the event of any underwritten public offering,\ncooperate with the selling Holders, the underwriters participating in the\noffering and their counsel in any due diligence investigation reasonably\nrequested by the selling Holders or the underwriters in connection therewith,\nand participate, to the extent reasonably requested by the managing underwriter\nfor the offering or the selling Holder, in efforts to sell the Registrable\nSecurities under the offering (including, without limitation, participating in\n\"roadshow\" meetings with prospective investors) that would be customary for\nunderwritten primary offerings of a comparable amount of equity securities by\nthe Company.\n\n               8.5 Furnish Information.\n\n                   (a) It shall be a condition precedent to the obligations of\nthe Company to take any action pursuant to this Section 1 with respect to the\nRegistrable Securities of any selling Holder that such Holder shall furnish to\nthe Company such information regarding itself, the Registrable Securities held\nby it, and the intended method of disposition of such securities as shall be\nrequired to effect the registration of such Holder's Registrable Securities.\n\n                   (b) The Company shall have no obligation with respect to any\nregistration requested pursuant to Section 8.3 if, due to the operation of\nSection 8.5(a), the number of shares or \n\n\n\n                                      -15-\n   16\nthe anticipated aggregate offering price of the Registrable Securities to be\nincluded in the registration does not equal or exceed the number of shares or\nthe anticipated aggregate offering price required to originally trigger the\nCompany's obligation to initiate such registration as specified in Section 8.3.\n\n               8.6 Expenses of Company or S-3 Registration. All expenses\n(exclusive of underwriting discounts and commissions and stock transfer taxes)\nincurred in connection with registrations, filings or qualifications pursuant to\nthis Section 8 including (without limitation) all registration, filing and\nqualification fees, printers' and accounting fees, fees and disbursements of\ncounsel for the Company and the reasonable fees and disbursements of one counsel\nfor all selling holders, including Holders of Registrable Securities, shall be\nborne by the Company; provided, however, that the Company shall not be required\nto pay for any expenses of any registrations effected pursuant to Section 8.3 if\nthe Company has already undertaken five (5) such registrations in the aggregate\nunder this and all other registration rights agreements.\n\n               8.7 Delay of Registration. No Holder shall have any right to\nobtain or seek an injunction restraining or otherwise delaying any such\nregistration as the result of any controversy that might arise with respect to\nthe interpretation or implementation of this Section 8.\n\n               8.8 Indemnification. In the event any Registrable Securities are\nincluded in a registration statement under this Section 8:\n\n                   (a) To the extent permitted by law, the Company will\nindemnify and hold harmless each Holder, the constituent partners and members,\nor officers and directors of each Holder, any underwriter (as defined in the\nAct) and each person, if any, who controls such Holder or underwriter within the\nmeaning of the Act or the 1934 Act, against any losses, claims, damages, or\nliabilities (joint or several) to which they may become subject under the Act,\nthe 1934 Act or other federal or state law, insofar as such losses, claims,\ndamages, or liabilities (or actions in respect thereof) arise out of or are\nbased upon any of the following statements, omissions or violations\n(collectively a \"VIOLATION\"): (i) any untrue statement or alleged untrue\nstatement of a material fact contained in such registration statement, including\nany preliminary prospectus or final prospectus contained therein or any\namendments or supplements thereto, (ii) the omission or alleged omission to\nstate therein a material fact required to be stated therein, or necessary to\nmake the statements therein not misleading, or (iii) any violation or alleged\nviolation by the Company of the Act, the 1934 Act, any state securities law or\nany rule or regulation promulgated under the Act, the 1934 Act or any state\nsecurities law; and the Company will pay to each such Holder, underwriter or\ncontrolling person any legal or other expenses reasonably incurred by them in\nconnection with investigating or defending any such loss, claim, damage,\nliability, or action, as such expenses are incurred; provided, however, that the\nindemnity agreement contained in this subsection 8.8(a) shall not apply to\namounts paid in settlement of any such loss, claim, damage, liability, or action\nif such settlement is effected without the consent of the Company (which consent\nshall not be unreasonably withheld), nor shall the Company be liable in any such\ncase for any such loss, claim, damage, liability, or action to the extent that\nit arises out of or is based upon a Violation which occurs in reliance upon and\nin conformity with written information furnished expressly for use in connection\nwith such registration by any such Holder, underwriter or controlling person.\n\n\n\n                                      -16-\n   17\n                   (b) To the extent permitted by law, each selling Holder will\nindemnify and hold harmless the Company, each of its directors, each of its\nofficers who has signed the registration statement, each person, if any, who\ncontrols the Company within the meaning of the Act, any underwriter, any other\nHolder selling securities in such registration statement and any controlling\nperson of any such underwriter or other Holder, severally but not jointly,\nagainst any losses, claims, damages, or liabilities (joint or several) to which\nany of the foregoing persons may become subject, under the Act, the 1934 Act or\nother federal or state law, insofar as such losses, claims, damages, or\nliabilities (or actions in respect thereto) arise out of or are based upon any\nViolation, in each case to the extent (and only to the extent) that such\nViolation occurs in reliance upon and in conformity with written information\nfurnished by such Holder expressly for use in connection with such registration;\nand each such Holder will pay any legal or other expenses reasonably incurred by\nany person intended to be indemnified pursuant to this Section 8.8(b), in\nconnection with investigating or defending any such loss, claim, damage,\nliability, or action; provided, however, that the indemnity agreement contained\nin this Section 8.8(b) shall not apply to amounts paid in settlement of any such\nloss, claim, damage, liability or action if such settlement is effected without\nthe consent of the Holder, which consent shall not be unreasonably withheld;\nprovided, that, in no event shall a Holder's cumulative, aggregate liability\nunder this Section 8.8(b), under Section 8.8(d), or under such sections\ntogether, exceed the net proceeds received by such Holder from the offering out\nof which such Violation arises.\n\n                   (c) Promptly after receipt by an indemnified party under this\nSection 8.8 of notice of the commencement of any action (including any\ngovernmental action), such indemnified party will, if a claim in respect thereof\nis to be made against any indemnifying party under this Section 8.8, deliver to\nthe indemnifying party a written notice of the commencement thereof and the\nindemnifying party shall have the right to participate in, and, to the extent\nthe indemnifying party so desires, jointly with any other indemnifying party\nsimilarly noticed, to assume the defense thereof with one counsel mutually\nsatisfactory to the parties; provided, however, that an indemnified party\n(together with all other indemnified parties which may be represented without\nconflict by one counsel) shall have the right to retain one separate counsel,\nwith the fees and expenses to be paid by the indemnifying party, if\nrepresentation of such indemnified party by the counsel retained by the\nindemnifying party would be inappropriate due to actual or potential differing\ninterests between such indemnified party and any other party represented by such\ncounsel in such proceeding. The failure to deliver written notice to the\nindemnifying party within a reasonable time of the commencement of any such\naction shall not relieve such indemnifying party of any liability to the\nindemnified party under this Section 8.8 unless the failure to deliver notice is\nmaterially prejudicial to its ability to defend such action. Any omission to so\ndeliver written notice to the indemnifying party will not relieve it of any\nliability that it may have to any indemnified party otherwise than under this\nSection 8.8.\n\n                   (d) If the indemnification provided for in this Section 8.8\nis held by a court of competent jurisdiction to be unavailable to an indemnified\nparty with respect to any loss, liability, claim, damage, or expense referred to\nherein, then the indemnifying party, in lieu of indemnifying such indemnified\nparty hereunder, shall contribute to the amount paid or payable by such\nindemnified party as a result of such loss, liability, claim, damage, or expense\nin such\n\n\n\n                                      -17-\n   18\nproportion as is appropriate to reflect the relative fault of the\nindemnifying party on the one hand, and of the indemnified party on the other,\nin connection with the statements or omissions that resulted in such loss,\nliability, claim, damage, or expense as well as any other relevant equitable\nconsiderations. The relative fault of the indemnifying party and of the\nindemnified party shall be determined by reference to, among other things,\nwhether the untrue or alleged untrue statement of a material fact or the\nomission to state a material fact relates to information supplied by the\nindemnifying party or by the indemnified party and the parties' relative intent,\nknowledge, access to information, and opportunity to correct or prevent such\nstatement or omission.\n\n                   (e) Notwithstanding the foregoing, to the extent that the\nprovisions on indemnification and contribution contained in the underwriting\nagreement entered into in connection with the underwritten public offering are\nin conflict with the foregoing provisions, the provisions in the underwriting\nagreement shall control.\n\n                   (f) The obligations of the Company and Holders under this\nSection 8.8 shall survive the completion of any offering of Registrable\nSecurities in a registration statement under this Section 8, and otherwise.\n\n               8.9 Reports under Securities Exchange Act of 1934. With a view to\nmaking available to the Holders the benefits of Rule 144 promulgated under the\nAct and any ther rule or regulation of the SEC that may at any time permit a\nHolder to sell securities of the Company to the public without registration or\npursuant to a registration on Form S-3, the Company agrees to:\n\n                   (a) make and keep public information available, as those\nterms are understood and defined in SEC Rule 144, at all times after ninety (90)\ndays after the effective date of the first registration statement filed by the\nCompany for the offering of its securities to the general public;\n\n                   (b) take such action, including the voluntary registration of\nits Common Stock under Section 12 of the 1934 Act, as is necessary to enable the\nHolders to utilize Form S-3 for the sale of their Registrable Securities, such\naction to be taken as soon as practicable after the end of the fiscal year in\nwhich the first registration statement filed by the Company for the offering of\nits securities to the general public is declared effective;\n\n                   (c) file with the SEC in a timely manner all reports and\nother documents required of the Company under the Act and the 1934 Act; and\n\n                   (d) furnish to any Holder, so long as the Holder owns any\nRegistrable Securities, forthwith upon request (i) a written statement by the\nCompany that it has complied with the reporting requirements of SEC Rule 144 (at\nany time after ninety (90) days after the effective date of the first\nregistration statement filed by the Company), the Act and the 1934 Act (at any\ntime after it has become subject to such reporting requirements), or that it\nqualifies as a registrant whose securities may be resold pursuant to Form S-3\n(at any time after it so qualifies), (ii) a copy of the most recent annual or\nquarterly report of the Company and such other reports and documents so filed by\nthe Company, and (iii) such other information as may be reasonably requested in\navailing any\n\n\n\n                                      -18-\n   19\nHolder of any rule or regulation of the SEC which permits the\nselling of any such securities without registration or pursuant to such form.\n\n               8.10 Assignment of Registration Rights. The rights to cause the\nCompany to register Registrable Securities pursuant to this Section 8 may only\nbe assigned (but only with all related obligations), (i) upon prior written\nnotice to the Company, to an Affiliate of the Investor or to Cap Gemini, or (ii)\nwith the prior written consent of the Company.\n\n               8.11 \"Market Stand-Off\" Agreement. Each Holder hereby agrees\nthat, during the period of duration specified by the Company and an underwriter\nof common stock or other securities of the Company, following the effective date\nof a registration statement of the Company filed under the Act, it shall not, to\nthe extent requested by the Company and such underwriter, directly or indirectly\nsell, offer to sell, contract to sell (including, without limitation, any short\nsale), grant any option to purchase or otherwise transfer or dispose of (other\nthan to donees who agree to be similarly bound) any securities of the Company\nheld by it at any time during such period except common stock included in such\nregistration; provided, however, that:\n\n                   (a) all officers and directors of the Company and all other\npersons with registration rights (whether or not pursuant to this Agreement)\nenter into similar agreements;\n\n                   (b) the Company uses all reasonable efforts to obtain from\npersons who hold one percent (1%) or greater of the Company's outstanding\ncapital stock, a lock-up agreement similar to that set forth in this Section\n8.11; and\n\n                   (c) such market stand-off time period shall not exceed one\nhundred eighty (180) days for the Company's initial public offering, and ninety\n(90) days for any subsequent public offerings.\n\n               Each Holder agrees to provide to the other underwriters of any\npublic offering such further agreements as such underwriter may reasonably\nrequest in connection with this market stand-off agreement, provided that the\nterms of such agreements are substantially consistent with the provisions of\nthis Section 8.11. In order to enforce the foregoing covenant, the Company may\nimpose stop-transfer instructions with respect to the Registrable Securities of\neach Holder (and the shares or securities of every other person subject to the\nforegoing restriction) until the end of such period.\n\n               Notwithstanding the foregoing, the obligations described in this\nSection 8.11 shall not apply to a registration relating solely to employee\nbenefit plans on Form S-1 or Form S-8 or similar forms which may be promulgated\nin the future, or a registration relating solely to an SEC Rule 145 transaction.\n\n               8.12 Termination of Registration Rights. The right of any Holder\nto request registration or to include Registrable Securities in any registration\npursuant to this Section 8 shall terminate upon the earlier of (i) the date\nwhich is five (5) years after the effective date of the first registration\nstatement for an initial public offering of securities of the Company (other\nthan a\n\n\n\n\n                                      -19-\n   20\nregistration statement relating either to the sale of securities to employees of\nthe Company pursuant to a stock option, stock purchase or similar plan or SEC\nRule 145 transaction), or (ii) such date as a public trading market shall exist\nfor the Company's Common Stock and all shares of Registrable Securities\nbeneficially owned and subject to Rule 144 aggregation by such Holder may\nimmediately be sold under Rule 144 (without regard to Rule 144(k)) during any\n90-day period, provided that such Holder is not then an \"affiliate\" of the\nCompany within the meaning of Rule 144 and such Holder owns less than 1% of the\nthen outstanding shares of capital stock.\n\n               9. GENERAL PROVISIONS.\n\n                   9.1 Notices and Elections. Any notice or election required or\npermitted under this Agreement will be given in writing, shall be effective when\nreceived, and shall in any event be deemed received and effectively given upon\npersonal delivery to the party to be notified or three (3) business days after\ndeposit with the United States Post Office, by registered or certified mail,\npostage prepaid, or one (1) business day after deposit with a nationally\nrecognized courier service such as FedEx for next business day delivery, or one\n(1) business day after facsimile with copy delivered by registered or certified\nmail, postage prepaid and addressed to the party to be notified at the address\nindicated for such party on the signature page hereof or at such other address\nas the Investor or the Company may designate by giving at least ten (10) days\nadvance written notice pursuant to this Section 9.1.\n\n\n                      (a) If to the Investor, at:\n\n                                             Ernst &amp; Young LLP\n                                             787 7th Avenue, 24th Floor\n                                             New York, New York 10019\n                                             Attention: Doug Galin\n                                             Telephone No.:_____________________\n                                             Facsimile No.:_____________________\n\n                               with a copy to:\n\n                                             Foley Hoag &amp; Eliot LLP\n                                             One Post Office Square\n                                             Boston, MA  02109                \n                                             Attention:  Adam Sonnenschein, Esq.\n                                             Telephone No.:  (617) 832-1000\n                                             Facsimile No.:  (617) 832-7000\n\n                      (b) If to the Company, at:\n\n                                             Corio, Inc.\n                                             700 Bay Road, Suite 210\n                                             Redwood City, CA  94063\n                                             Telephone No.: (650) 298-4800\n\n\n\n                                      -20-\n   21\n                                          Facsimile No.: (650) _________________\n\n                           with a copy to:\n                                          Wilson Sonsini Goodrich &amp; Rosati, P.C.\n                                          650 Page Mill Road\n                                          Palo Alto, California 94304-1050\n                                          Attention: Howard Zeprun\n                                          Telephone No.: (650) 493-9300\n                                          Facsimile No.:  (650) 493-6811\n\nAny party hereto may by notice so given change its address for future notices\nhereunder. Notice shall conclusively be deemed to have been given when\npersonally delivered or when deposited in the mail in the manner set forth\nabove.\n\n               9.2 Entire Agreement. This Agreement, together with all the\nExhibits hereto, constitutes and contains the entire agreement and understanding\nof the parties with respect to the subject matter hereof and supersedes any and\nall prior negotiations, correspondence, agreements, understandings, duties or\nobligations between the parties respecting the subject matter hereof.\n\n               9.3 Limitation on Liability. In the event of the occurrence of a\nSpecified Event (but without limiting any other liability that one party may\notherwise have to the other party for matters other than the occurence of a\nSpecified Event), the Company's sole recourse and the Investor's sole liability\nor obligation arising out of such event, and the Investor's sole recourse and\nthe Company's sole liability or obligation arising out of such event, shall be\nlimited to repurchase or termination of the Warrants and Warrant Shares and\ntermination of certain provisions in the Joint Marketing Agreement and this\nAgreement, as provided in Section 3 and 4 hereof (to the extent provided in such\nsections). With respect to any such event (but only with respect to each event\nand without limiting any liability that one party may otherwise have to the\nother), neither party shall be liable to the other for compensation,\nreimbursement or damages on account of lost profits or other expenses, or be\nliable to the other party for any special, consequential, punitive, incidental\nor indirect damages, howsoever caused, on any theory of liability. These limits\nshall apply notwithstanding any failure of essential purpose of any limited\nremedy.\n\n               9.4 Governing Law. This Agreement shall be governed by and\nconstrued exclusively in accordance with the General Corporation Law of the\nState of Delaware, with respect to matters of corporate law, and, with respect\nto matters of law other than corporate law, in accordance with the internal laws\nof the State of California as they apply to agreements entered into and to be\nperformed entirely within the State of California by residents thereof.\n\n               9.5 Severability. If one or more provisions of this Agreement are\nheld to be unenforceable under applicable law, then such provision(s) shall be\nexcluded from this Agreement and the balance of this Agreement shall be\ninterpreted as if such provision(s) were so excluded and shall be enforceable in\naccordance with its terms.\n\n\n\n                                      -21-\n   22\n               9.6 Third Parties. Nothing in this Agreement, express or implied,\nis intended to confer upon any person, other than the parties hereto and their\npermitted successors and assigns, any rights or remedies under or by reason of\nthis Agreement.\n\n               9.7 Successors and Assigns. Neither this Agreement nor any of the\nobligations or benefits specified herein may be assigned by the Investor except\nas expressly provided herein or as the Company may otherwise agree in writing.\nNotwithstanding the foregoing, it is expressly understood (i) that this\nAgreement is being entered into by the consulting services division of Ernst &amp; Young LLP, as the same may hereafter be constituted as an entity separate from\nErnst &amp; Young LLP, (ii) that Ernst &amp; Young LLP may transfer its consulting\nservices division into a limited liability company, corporation or other entity\nseparate from Ernst &amp; Young LLP, (iii) that Ernst &amp; Young LLP may thereafter\nsell, transfer or otherwise assign its interest in such entity to Cap Gemini,\nand (iv) that this Agreement may be assigned to any of the foregoing specified\nentities as a successor to the business and assets of the consulting services\ndivision of Ernst &amp; Young LLP, upon written notice to the Company but without\nany required consent by the Company, provided that such successor agrees to be\nbound by all of the terms and conditions of the Warrant Rights Agreement, the\nJoint Marketing Agreement and this Agreement. Subject to the foregoing, the\nprovisions of this Agreement shall inure to the benefit of, and shall be binding\nupon, the respective successors and assigns of the parties hereto.\n\n               9.8 Captions. The captions to sections of this Agreement have\nbeen inserted for identification and reference purposes only and shall not be\nused to construe or interpret this Agreement.\n\n               9.9 Counterparts. This Agreement may be executed in counterparts,\neach of which shall be deemed an original, but all of which together shall\nconstitute one and the same instrument.\n\n\n\n                                      -22-\n   23\n          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as\nof the date and year first above written. CORIO, INC.\n\n                                       By:\n                                          --------------------------------------\n                                       Name:\n                                            ------------------------------------\n                                       Title:\n                                             -----------------------------------\n                                       ERNST &amp; YOUNG LLP, ON BEHALF OF\n                                       ITS CONSULTING SERVICE DIVISION AS THE\n                                       SAME MAY BE SEPARATELY CONSTRUED\n\n                                       By:\n                                          --------------------------------------\n                                       Name:\n                                            ------------------------------------\n                                       Title:\n                                             -----------------------------------\n\n\n\n                                      -23-\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7212],"corporate_contracts_industries":[9510],"corporate_contracts_types":[9630,9629],"class_list":["post-43814","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-corio-inc","corporate_contracts_industries-technology__programming","corporate_contracts_types-securities__invest","corporate_contracts_types-securities"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43814","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43814"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43814"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43814"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43814"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}