Exhibit 10.23


 





 


SILICON VALLEY BANK LOAN AND
SECURITY AGREEMENT


 


This
LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of June 16, 2005, between SILICON VALLEY BANK, a California chartered bank, with its
principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 (FAX                        )
(“Bank”) and VERSANT CORPORATION, a California corporation, with offices at 6539
Dumbarton Circle, Fremont, California 94555 (FAX 510-789-1515) (“Borrower”),
provides the terms on which Bank shall lend to Borrower and Borrower shall
repay Bank. The parties agree as
follows:


 


1                                         ACCOUNTING AND OTHER TERMS


 


Accounting terms not defined
in this Agreement shall be construed following GAAP. Calculations and determinations must be made following GAAP.
The term “financial statements” includes the notes and schedules. The terms “including”
and “includes” always mean “including (or includes) without limitation,” in
this or any Loan Document. Capitalized terms in this Agreement shall have the
meanings set forth in Section 13. All other terms contained in this
Agreement, unless otherwise indicated, shall have the meanings provided by the
Code, to the extent such terms are defined therein.


 


2                                         LOAN AND TERMS OF PAYMENT


 


2.1                               Promise to Pay. Borrower hereby unconditionally promises to
pay Bank the unpaid principal amount
of all Advances hereunder with all interest, fees and finance charges due
thereon as and when due in accordance with this Agreement.


 


2.1.1                     Financing of Accounts.


 


(a)                                  Availability. Subject to the terms of this Agreement, Borrower may request that Bank
finance specific Eligible
Accounts. Bank may, in its good faith business discretion in each instance, finance
such Eligible Accounts by
extending credit to Borrower in an amount equal to the result of the Advance
Rate multiplied by the face
amount of the Eligible Account (the “Advance”). Bank may, in its sole
discretion, change the percentage of the Advance Rate for a particular Eligible
Account on a case by case basis; provided, however, only while the Streamline Agreement (as defined in Section 13
hereof) is in effect, Bank will promptly notify Borrower before implementing such change. When Bank
makes an Advance, the Eligible Account becomes a “Financed Receivable.”


 


(b)                                 Maximum Advances. The aggregate face amount of all Financed
Receivables outstanding at any time may not exceed the Facility Amount, and the
Bank shall have no obligation to make Advances in excess of Three Million
Dollars ($3,000,000) in the aggregate at anytime outstanding.


 


(c)                                  Borrowing Procedure. Borrower will deliver an Invoice
Transmittal for each Eligible Account it offers. Bank may rely on information
set forth in or provided with the Invoice Transmittal.


 


(d)                                 Credit Quality; Confirmations. Bank may, at its option, conduct a credit
check of the Account Debtor for
each Account requested by Borrower for financing hereunder in order to approve
any such Account Debtor’s credit
before agreeing to finance such Account. Bank may also verify directly with the
respective Account Debtors the validity, amount and other matters relating to
the Accounts (including confirmations of Borrower’s representations in Section 5.3) by means of mail,
telephone or otherwise, either in the name of Borrower


 


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or Bank from time to time in
its sole discretion; provided, however, only while the Streamline
Agreement is in effect,
Bank will promptly notify Borrower before pursuing such verification.


 


(e)                                  Accounts Notification/Collection. Bank may notify any Person owing Borrower
money of Bank’s security
interest in the funds and verify and/or collect the amount of the Account.


 


(f)                                    Early Termination. This Agreement may be terminated prior to
the Maturity Date as follows: (i) by
Borrower, effective three Business Days after written notice of termination is
given to Bank; or (ii) by Bank
at any time after the occurrence of an Event of Default, without notice,
effective immediately. If this Agreement
is terminated early by Borrower for any reason, Borrower shall pay to Bank a
termination fee in an amount
equal to Fifteen Thousand Dollars ($15,000) (the “Early Termination Fee”). The
Early Termination Fee shall be due and payable on the effective date of such
termination and thereafter shall bear interest at a rate equal to the highest rate applicable to any of the
Obligations. Notwithstanding the foregoing, Bank agrees to waive the Early
Termination Fee if Bank agrees to refinance and redocument this Agreement under
another division of Bank (in its sole and exclusive discretion) prior to the
Maturity Date.


 


(g)                                 Maturity. This Agreement shall terminate and all Obligations outstanding
hereunder shall be immediately due and payable on the Maturity Date.


 


(h)                                 Suspension of Advances. Borrower’s ability to request that Bank
finance Eligible Accounts
hereunder will terminate if, in Bank’s sole discretion, there has been a
material adverse change in the general affairs, management, results of
operation, condition (financial or otherwise) or the prospect of repayment of
the Obligations, or there has been any material adverse deviation by Borrower
from the most recent business plan of Borrower presented to and accepted by
Bank prior to the execution of this Agreement; provided, however,
only while the Streamline
Agreement is in effect, Bank will promptly notify Borrower before taking such
action.


 


2.2                               Collections, Finance Charges,
Remittances and Fees. The Obligations shall be subject to the
following fees and Finance Charges. Unpaid fees and Finance Charges may, in
Bank’s discretion, accrue interest and fees as described in Section 9.2
hereof.


 


2.2.1                     Collections. Collections will be credited to the Financed
Receivable Balance for such Financed Receivable, but if there is an Event of Default, Bank may apply
Collections to the Obligations in any order it chooses. If Bank receives a
payment for both a Financed Receivable and a non-Financed Receivable, the funds
will first be applied to the Financed Receivable and, if there is no Event of
Default then existing, the excess will be remitted to Borrower, subject to Section 2.2.7.


 


2.2.2                     Facility Fee. A fully earned, non-refundable facility fee
of Twenty Thousand Dollars ($20,000) is due upon execution of this Agreement, and an additional fully earned
(as of the date of this Agreement), non-refundable facility fee of Fifteen Thousand Dollars ($15,000) is payable
on the first anniversary of the date of this Agreement.


 


2.2.3                     Finance Charges. All Collections received by Bank shall be
deemed applied by Bank on account of the Obligations three (3) Business
Days after receipt of the Collections. Borrower will pay a finance charge (the “Finance
Charge”) on each Financed Receivable which is equal to the Applicable Rate divided
by 360 multiplied by the number of days each such Financed
Receivable is outstanding multiplied by the outstanding Financed
Receivable Balance. The Finance Charge is payable when the Advance made based
on such Financed Receivable is payable in accordance with Section 2.3
hereof.


 


2.2.4                     Collateral Handling Fee. If the Streamline Agreement is in not in
effect, Borrower will pay to Bank
a collateral handling fee equal to 0.375% per month of the Financed Receivable
Balance for each Financed Receivable
outstanding based upon a 360 day year (the “Collateral Handling Fee”). This fee
is charged on a daily basis which is equal to the Collateral Handling Fee
divided by 30, multiplied by the number of days each such Financed Receivable
is outstanding, multiplied by the outstanding Financed Receivable Balance. The
Collateral Handling Fee is payable when the Advance made based on such Financed
Receivable is payable in accordance with Section 2.3 hereof. In computing
Collateral Handling Fees under this Agreement, all Collections received by Bank


 


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shall
be deemed applied by Bank on account of Obligations three (3) Business
Days after receipt of the Collections. After an Event of Default, the
Collateral Handling Fee will increase an additional 0.50% effective immediately
upon such Event of Default.


 


2.2.4.5           Warrant Waiver Fee. Borrower shall pay to Bank a Warrant Waiver
Fee equal to $25,000 if the Borrower requests Bank to waive the requirement of
providing a Warrant to Purchase Stock as a condition precedent to any Advances.
The Warrant Waiver Fee, if applicable, is fully earned and payable on the date
of this Agreement.


 


2.2.5                     Accounting. After each Reconciliation Period, Bank will
provide an accounting of the transactions
for that Reconciliation Period, including the amount of all Financed Receivables,
all Collections, Adjustments,
Finance Charges, Collateral Handling Fee and the Facility Fee. If Borrower does
not object to the accounting in writing within thirty (30) days it shall be
considered accurate. All Finance Charges and other interest and fees are calculated on the basis of a 360
day year and actual days elapsed.


 


2.2.6                     Deductions. Bank may deduct fees, Finance Charges,
Advances which become due pursuant to Section 2.3, and other amounts due pursuant to this Agreement from
any Advances made or Collections received by Bank.


 


2.2.7                     Lockbox; Account Collection
Services. Borrower shall direct each Account Debtor
(and each depository institution
where proceeds of Accounts are on deposit) to remit payments with respect to
the Accounts to a lockbox
account established with Bank or to wire transfer payments to a cash collateral
account that Bank controls (collectively, the “Lockbox”). It will be considered
an immediate Event of Default if the Lockbox is not set-up and operational
within forty-five (45) days from the date of this Agreement. Until such Lockbox
is established, the proceeds of
the Accounts shall be paid by the Account Debtors to an address consented to by
Bank. Upon receipt by Borrower
of such proceeds, the Borrower shall immediately transfer and deliver same to
Bank, along with a detailed cash
receipts journal. Provided no Event of Default exists or an event that with
notice or lapse of time will be an Event of Default, within three (3) days
of receipt of such amounts by Bank, Bank will turn over to Borrower the proceeds of the Accounts other than
Collections with respect to Financed Receivables and the amount of Collections
in excess of the amounts for which Bank has made an Advance to Borrower, less
any amounts due to Bank, such as the Finance Charge, the Facility Fee, payments
due to Bank, other fees and expenses, or otherwise; provided, however, Bank may
hold such excess amount with respect to Financed Receivables as a reserve until
the end of the applicable Reconciliation Period if Bank, in its discretion,
determines that other Financed Receivable(s) may no longer qualify as an
Eligible Account at any time prior to the end of the subject Reconciliation
Period. This Section does
not impose any affirmative duty on Bank to perform any act other than as specifically
set forth herein. All Accounts and the proceeds thereof are Collateral and if
an Event of Default occurs, Bank may apply the proceeds of such Accounts to the Obligations.


 


2.2.8                     Good Faith Deposit. Borrower has paid to Bank a Good Faith
Deposit of $10,000 (the “Good Faith Deposit”) to initiate Bank’s due diligence
review process. Any portion of the Good Faith Deposit not utilized to pay Bank
Expenses will be applied to the Facility Fee. Borrower will be provided with a
$6,000 credit from the Good Faith Deposit towards the payment of Bank Expenses
consisting of attorneys’ fees and expenses; provided, however, Borrower
understands and agrees that any Bank Expenses consisting of attorneys’ fees and
expenses in excess of such $6,000 credit shall continue to constitute
Obligations, and the Borrower shall pay the same when due and payable.


 


2.3                               Repayment of Obligations; Adjustments.


 


2.3.1                     Repayment. Borrower will repay each Advance on the
earliest of: (a) the date on which payment is received of the Financed
Receivable with respect to which the Advance was made, (b) the date on
which the Financed Receivable is no longer an Eligible Account, (c) the
date on which any Adjustment is asserted to the Financed Receivable (but only
to the extent of the Adjustment if the Financed Receivable remains otherwise an
Eligible Account), (d) the
date on which there is a breach of any warranty or representation set forth in Section 5.3,
or (e) the Maturity Date
(including any early termination). Each payment will also include all accrued
Finance Charges and Collateral
Handling Fees with respect to such Advance and all other amounts then due and
payable hereunder.


 


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2.3.2                     Repayment on Event of Default. When there is an Event of Default, Borrower
will, if Bank demands (or, upon
the occurrence of an Event of Default under Section 8.5, immediately
without notice or demand from
Bank) repay all of the Advances. The demand may, at Bank’s option, include the
Advance for each Financed Receivable
then outstanding and all accrued Finance Charges, the Early Termination Fee,
Collateral Handling Fee, Warrant
Waiver Fee, attorneys and professional fees, court costs and expenses, and any
other Obligations.


 


2.3.3                     Debit of Accounts. Bank may debit any of Borrower’s deposit
accounts for payments or any amounts Borrower owes Bank hereunder. Bank shall
promptly notify Borrower when it debits Borrower’s accounts. These debits shall
not constitute a set-off.


 


2.3.4                     Adjustments. If at any time during the term of this
Agreement any Account Debtor asserts an Adjustment or if Borrower issues a credit memorandum or if any of the
representations, warranties or covenants set forth in Section 5.3 are not
longer true in all material respects, Borrower will promptly advise Bank.


 


2.4                               Power of Attorney. Borrower irrevocably appoints Bank and its
successors and assigns as attorney-in-fact
and authorizes Bank, to: (i) following the occurrence of an Event of
Default, sell, assign, transfer, pledge,
compromise, or discharge all or any part of the Financed Receivables; (ii) following
the occurrence of an Event of Default, demand, collect, sue, and give releases
to any Account Debtor for monies due and compromise, prosecute, or defend any action, claim, case
or proceeding about the Financed Receivables, including filing a claim or
voting a claim in any bankruptcy case in Bank’s or Borrower’s name, as Bank
chooses; (iii) following the occurrence of an Event of Default, prepare,
file and sign Borrower’s name on any notice, claim, assignment, demand, draft, or notice of or satisfaction
of lien or mechanics’ lien or similar document; (iv) regardless of whether
there has been an Event of Default, notify all Account Debtors to pay Bank
directly; (v) regardless of whether there has been an Event of Default, receive, open, and dispose of mail
addressed to Borrower; (vi) regardless of whether there has been an Event of Default, endorse
Borrower’s name on checks or other instruments (to the extent necessary to pay amounts owed pursuant to this
Agreement); and (vii) regardless of whether there has been an Event of Default, execute on Borrower’s behalf any
instruments, documents, financing statements to perfect Bank’s interests in the
Financed Receivables and Collateral and do all acts and things necessary or
expedient, as determined solely
and exclusively by Bank, to protect or preserve, Bank’s rights and remedies
under this Agreement, as directed
by Bank.


 


3                                         CONDITIONS OF LOANS


 


3.1                               Conditions Precedent to Initial Advance. Bank’s agreement to make the initial Advance
is subject to the condition
precedent that Bank shall have received, in form and substance satisfactory to
Bank, such documents, and
completion of such other matters, as Bank may reasonably deem necessary or
appropriate, including, without
limitation, subject to the condition precedent that Bank shall have received,
in form and substance satisfactory
to Bank, the following:


 


(a)                                  a certificate of the Secretary of Borrower
with respect to articles, bylaws, incumbency and resolutions authorizing the execution and delivery of this
Agreement;


 


(b)                                 an Intellectual Property Security Agreement;


 


(c)                                  subordination agreements/intercreditor
agreements by certain Persons, if applicable; 


 


(d)                                 Perfection Certificate(s) by Borrower;


 


(e)                                  Warrant to Purchase Stock, if applicable;


 


(f)                                    Account Control Agreement/ Investment Account
Control Agreement, if applicable;


 


(g)                                 insurance certificates;


 


(h)                                 payment of the fees and Bank Expenses then
due and payable;


 


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(i)                                     Certificate of Foreign Qualification (if
applicable);


 


(j)                                     Certificate of Good Standing/Legal Existence;
and


 


(k)                                  such other documents, and completion of such
other matters, as Bank may reasonably deem necessary or appropriate.


 


3.2                              Conditions Precedent to all
Advances. Bank’s agreement to make each Advance,
including the initial Advance,
is subject to the following:


 


(a)                                  receipt of the Invoice Transmittal;


 


(b)                                 Bank shall have (at its option) conducted the confirmations
and verifications as described in Section 2.1.1 (d); and


 


(c)                                  each of the representations and warranties in Section 5
shall be true on the date of the Invoice
Transmittal and on the effective date of each Advance and no Event of Default
shall have occurred and be continuing,
or result from the Advance. Each Advance is Borrower’s
representation and warranty on that date that the representations and warranties in Section 5
remain true.


 


4                                         CREATION OF SECURITY INTEREST


 


4.1                               Grant of Security Interest. Borrower hereby grants Bank, to secure the
payment and performance in full
of all of the Obligations and the performance of each of Borrower’s duties
under the Loan Documents, a continuing security interest in, and pledges and
assigns to Bank, the Collateral, wherever located, whether now owned or hereafter
acquired or arising, and all proceeds and products thereof. Borrower warrants
and represents that the security interest granted herein shall be a first
priority security interest in the Collateral.


 


Except as noted on the
Perfection Certificate, Borrower is not a party to, nor is bound by, any
material license or other agreement with respect to which Borrower is the
licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s
interest in such license or agreement or any other property. Borrower will provide written notice to Bank
within 30 days of entering or becoming bound by any such license or agreement which is reasonably likely to have a
material impact on Borrower’s business or financial condition (other than
over-the-counter software that is commercially available to the public).
Borrower shall take such steps as Bank requests to obtain the consent of, authorization by, or waiver by, any
person whose consent or waiver is necessary for all such licenses or contract
rights to be deemed “Collateral” and for Bank to have a security interest in it
that might otherwise be restricted or prohibited by law or by the terms of any
such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent
assignment of the license to Bank if the Bank determines that is necessary in
its good faith judgment), whether now existing or entered into in the future.


 


If the Agreement is
terminated, Bank’s lien and security interest in the Collateral shall continue
until Borrower fully satisfies
its Obligations. If Borrower shall at any time, acquire a commercial tort
claim, Borrower shall promptly
notify Bank in a writing signed by Borrower of the brief details thereof and
grant to Bank in such writing a
security interest therein and in the proceeds thereof, all upon the terms of
this Agreement, with such writing
to be in form and substance satisfactory to Bank.


 


4.2                               Authorization to File Financing
Statements. Borrower hereby authorizes Bank to file
financing statements, without notice to Borrower, with all appropriate
jurisdictions in order to perfect or protect Bank’s interest or rights
hereunder, which financing statements may indicate the Collateral as “all
assets of the Debtor” or words of similar effect, or as being of an equal or
lesser scope, or with greater detail, all in Bank’s discretion.


 


5                                         REPRESENTATIONS AND WARRANTIES


 


Borrower represents and
warrants as follows:


 


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5.1                               Due Organization and
Authorization. Borrower and each Subsidiary is duly existing
and in good standing in its
state of formation and qualified and licensed to do business in, and in good
standing in, any state in which the conduct of its business or its ownership of
property requires that it be qualified except where the failure to do so could not reasonably be expected to
cause a Material Adverse Change. Borrower represents and warrants to Bank that: (a) Borrower’s exact legal
name is that indicated on the Perfection Certificate and on the signature page hereof;
and (b) Borrower is an organization of the type, and is organized in the
jurisdiction, set forth in the Perfection
Certificate; and (c) the Perfection Certificate accurately sets forth
Borrower’s organizational identification
number or accurately states that Borrower has none; and (d) the Perfection
Certificate accurately sets forth
Borrower’s place of business, or, if more than one, its chief executive office
as well as Borrower’s mailing address
if different, and (e) all other information set forth on the Perfection Certificate
pertaining to Borrower is accurate and complete. If Borrower does not now have
an organizational identification number, but later obtains one, Borrower shall
forthwith notify Bank of such organizational identification number.


 


The execution, delivery and
performance of the Loan Documents have been duly authorized, and do not
conflict with Borrower’s organizational documents, nor constitute an event of
default under any material agreement by which Borrower is bound. Borrower is
not in default under any agreement to which or by which it is bound in which
the default could reasonably be expected to cause a Material Adverse Change.


 


5.2                               Collateral. Borrower has good title to the Collateral,
free of Liens except Permitted Liens. All inventory is in all material respects of good and marketable quality,
free from material defects. Borrower has no deposit account, other than the
deposit accounts with Bank and deposit accounts described in the Perfection Certificate delivered to Bank in connection
herewith. The Collateral is not in the possession of any third party bailee
(such as a warehouse). Except as hereafter disclosed to Bank in writing by
Borrower, none of the components of
the Collateral shall be maintained at locations other than as provided in the
Perfection Certificate. In the event that Borrower, after the date hereof,
intends to store or otherwise deliver any portion of the Collateral to a
bailee, then Borrower will first receive the written consent of Bank and such
bailee must acknowledge in writing that the bailee is holding such Collateral
for the benefit of Bank.


 


5.3                              Financed Receivables. Borrower represents and warrants for each
Financed Receivable:


 


(a)                                  Each Financed Receivable is an Eligible
Account;


 


(b)                                 Borrower is the owner with legal right to
sell, transfer, assign and encumber such Financed Receivable;


 


(c)                                  The correct amount is on the Invoice
Transmittal and is not disputed;


 


(d)                                 Payment is not contingent on any obligation or
contract and Borrower has fulfilled all its obligations as of the Invoice
Transmittal date;


 


(e)                                  Each Financed Receivable is based on an
actual sale and delivery of goods and/or services rendered, is due to Borrower,
is not past due or in default, has not been previously sold, assigned,
transferred, or pledged and is free of any liens, security interests and
encumbrances other than Permitted Liens;


 


(f)                                    There are no defenses, offsets, counterclaims
or agreements for which the Account Debtor may claim any deduction or discount;


 


(g)                                 Borrower reasonably believes no Account
Debtor is insolvent or subject to any Insolvency Proceedings;


 


(h)                                 Borrower has not filed or had filed against
it Insolvency Proceedings and does not anticipate any filing;


 


(i)                                     Bank has the right to endorse and/ or require
Borrower to endorse all payments received on Financed Receivables and all
proceeds of Collateral; and


 


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(j)                                     No representation, warranty or other statement
of Borrower in any certificate or written statement given to Bank contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statement
contained in the certificates or statement not misleading.


 


5.4                               Litigation. There are no actions or proceedings pending
or, to the knowledge of Borrower’s Responsible
Officers or legal counsel, threatened by or against Borrower or any Subsidiary
in which an adverse decision could reasonably be expected to cause a Material
Adverse Change.


 


5.5                               No Material Deviation in
Financial Statements. All consolidated financial statements for Borrower and any Subsidiary delivered to Bank
fairly present in all material respects Borrower’s consolidated financial
condition and Borrower’s consolidated results of operations. There has not been
any material deterioration in Borrower’s consolidated financial condition since
the date of the most recent financial statements submitted to Bank.


 


5.6                               Solvency. Borrower is able to pay its debts (including
trade debts) as they mature.


 


5.7                               Regulatory Compliance. Borrower is not an “investment company” or a
company “controlled” by an “investment company” under the Investment Company
Act. Borrower is not engaged as one of its important activities in extending credit for margin
stock (under Regulations X, T and U of the Federal Reserve Board of Governors).
Borrower has complied in all material respects with the Federal Fair Labor
Standards Act. Borrower has not violated any laws, ordinances or rules, the
violation of which could reasonably be expected to cause a Material Adverse Change. None of Borrower’s or
any Subsidiary’s properties or assets has been used by Borrower or any
Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in
disposing, producing, storing, treating,
or transporting any hazardous substance other than legally. Borrower and each
Subsidiary has timely filed all required tax returns and paid, or made adequate
provision to pay, all material taxes, except those being contested in good
faith with adequate reserves under GAAP. Borrower and each Subsidiary has
obtained all consents, approvals and authorizations of, made all declarations
or filings with, and given all notices to, all government authorities that are
necessary to continue its business as currently conducted except where the
failure to obtain or make such consents, declarations, notices or filings would
not reasonably be expected to cause a Material Adverse Change.


 


5.8                               Subsidiaries. Borrower does not own any stock, partnership
interest or other equity securities except for Permitted Investments.


 


5.9                               Full Disclosure. No written representation, warranty or other
statement of Borrower in any certificate or written statement given to Bank
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained in the certificates or
statements not misleading.


 


6                                         AFFIRMATIVE COVENANTS


 


Borrower shall do all of the
following:


 


6.1                               Government Compliance. Borrower shall maintain its and all
Subsidiaries’ legal existence and good
standing in its jurisdiction of formation and maintain qualification in each
jurisdiction in which the failure to so qualify would reasonably be expected to
have a material adverse effect on Borrower’s business or operations. Borrower shall comply, and have each
Subsidiary comply, with all laws, ordinances and regulations to which it is
subject, noncompliance with which could have a material adverse effect on
Borrower’s business or operations or would reasonably be expected to cause a Material Adverse Change.


 


6.2                               Financial Statements, Reports,
Certificates.


 


(a)                                  Borrower shall deliver to Bank:  (i) as
soon as available, but no later than thirty (30)
days after the last day of each month, a company prepared consolidated balance
sheet and income statement covering Borrower’s consolidated operations during
the period certified by a Responsible Officer and in a form acceptable to Bank;
(ii) as soon as available, but no later than one hundred
twenty (120) days after the last day of Borrower’s


 


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fiscal year, or as provided
for by the Securities and Exchange Commission, audited consolidated financial statements prepared under GAAP, consistently
applied, together with, if available, an unqualified opinion on the financial
statements from an independent certified public accounting firm reasonably
acceptable to Bank; (iii) [omitted];
(iv) a prompt report of any legal actions pending or threatened against
Borrower or any Subsidiary that could
result in damages or costs to Borrower or any Subsidiary of One Hundred
Thousand Dollars ($100,000.00) or more; (v) prompt notice of any material
change in the composition of the intellectual property, or the registration of
any copyright, including any subsequent ownership right of Borrower in or to
any Copyright, Patent or Trademark not
shown in the IP Agreement or knowledge of an event that materially adversely
affects the value of the intellectual property; and (vi) budgets, sales
projections, operating plans or other financial information reasonably
requested by Bank.


 


(b)                                 Within thirty (30)
days after the last day of each month, Borrower shall deliver to Bank with the
monthly financial statements a Compliance Certificate signed by a Responsible Officer
in the form of Exhibit B.


 


(c)                                  Borrower will allow Bank to audit Borrower’s
Collateral, including, but not limited to, Borrower’s Accounts and accounts
receivable, at Borrower’s expense, upon reasonable notice to Borrower;
provided, however, prior to the occurrence of an Event of Default, Borrower
shall be obligated to pay for not more than one (1) audit per year;
provided, further, that provided no Event of Default has occurred and is
continuing, Bank will not require such audits unless Borrower maintains an
Advances balance outstanding for thirty (30) consecutive days. After the
occurrence of an Event of Default, Bank may audit Borrower’s Collateral,
including, but not limited to, Borrower’s Accounts and accounts receivable at
Borrower’s expense and at Bank’s sole and exclusive discretion and without
notification and authorization from Borrower.


 


(d)                                 Upon Bank’s request, provide a written report
respecting any Financed Receivable, if payment of any Financed Receivable does
not occur by its due date and include the reasons for the delay.


 


(e)                                  Provide Bank with, as soon as available, but
no later than thirty (30) days following each Reconciliation Period, an aged
listing of accounts receivable and accounts payable by invoice date, in form acceptable
to Bank.


 


(f)                                    Provide Bank with, as soon as available, but
no later than thirty (30) days following each Reconciliation Period, a Deferred
Revenue report, in form acceptable to Bank.


 


(g)                                 Provide Bank, no later than 60 days following
the end of Borrower’s then current fiscal year, Borrower’s annual operating
budget (including income statements, balance sheets and cash flow statements,
by month) for Borrower’s upcoming fiscal year.


 


6.3                               Taxes. Borrower shall make, and cause each
Subsidiary to make, timely payment of all material federal, state, and local taxes or
assessments (other than taxes and assessments which Borrower is contesting in
good faith, with adequate
reserves maintained in accordance with GAAP) and will deliver to Bank, on
demand, appropriate certificates attesting to such payments.


 


6.4                               Insurance. Borrower shall keep its business and the
Collateral insured for risks and in amounts, and as Bank may reasonably
request. Insurance policies shall be in a form, with companies, and in amounts
that are satisfactory to Bank. All property policies shall have a lender’s loss
payable endorsement showing Bank as an additional loss payee and all liability
policies shall show Bank as an additional insured and all policies shall provide that the insurer must give Bank at
least twenty (20) days notice before canceling its policy. At Bank’s request, Borrower shall deliver certified
copies of policies and evidence of all premium payments. Proceeds payable under any policy shall, at Bank’s option, be
payable to Bank on account of the Obligations. If Borrower fails to obtain
insurance as required under this Section or to pay any amount or furnish
any required proof of payment to third persons and Bank, Bank may make all or
part of such payment or obtain such insurance policies required in this Section and
take any action under the policies Bank deems prudent.


 


8

















 


6.5                               Accounts.


 


(a)                                  In order to permit Bank to monitor Borrower’s
financial performance and condition, Borrower, and all Borrower’s Subsidiaries
located in the United States of America, shall maintain Borrower’s, and such Subsidiaries, primary depository and
operating accounts and securities accounts with Bank. Notwithstanding the
foregoing, the following Subsidiaries of Borrower will not be subject to this
provision: Versant GmbH, Versant Ltd.
and Versant India Pvt. Ltd.


 


(b)                                 Borrower shall identify to Bank, in writing,
any bank or securities account opened by Borrower with any institution other than Bank. In addition, for each
such account that Borrower at any time opens or maintains, Borrower shall, at
Bank’s request and option, pursuant to an agreement in form and substance acceptable to Bank, cause the depository bank
or securities intermediary to agree that such account is the collateral of Bank pursuant to the terms hereunder. The
provisions of the previous sentence shall not apply to deposit accounts
exclusively used for payroll, payroll taxes and other employee wage and benefit
payments to or for the benefit
of Borrower’s employees.


 


6.6                               Financial Covenants. Omitted.


 


6.7                               Further Assurances. Borrower shall execute any further
instruments and take further action as Bank reasonably requests to perfect or
continue Bank’s security interest in the Collateral or to effect the purposes
of this Agreement.


 


7                                         NEGATIVE COVENANTS


 


Borrower shall not do any of
the following without Bank’s prior written consent (which shall be a matter of
Bank’s good faith business judgment).


 


7.1                               Dispositions. Convey, sell, lease, transfer or otherwise
dispose of (collectively a “Transfer”), or permit any of its Subsidiaries to
Transfer, all or any part of its business or property, except for Transfers (i) of
inventory in the ordinary course of business; (ii) of non-exclusive
licenses and similar arrangements for the use of the property of Borrower or
its Subsidiaries in the ordinary course of business; or (iii) of worn-out
or obsolete equipment.


 


7.2                               Changes in Business, Ownership,
Management or Business Locations. Engage in or permit
any of its Subsidiaries to engage in any business other than the businesses
currently engaged in by Borrower or reasonably related thereto, or have a material change in its ownership
(other than by the sale of Borrower’s equity securities in a public offering or
to venture capital investors so long as Borrower identifies to Bank the venture
capital investors prior to the
closing of the investment), or management. Borrower shall not, without at least
thirty (30) days prior written notice to Bank: (i) [omitted], or (ii) change
its jurisdiction of organization, or (iii) change its organizational
structure or type, or (iv) change its legal name, or (v) change any
organizational number (if any) assigned by its jurisdiction of organization.


 


7.3                               Mergers or Acquisitions. Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person. A Subsidiary may merge or
consolidate into another Subsidiary or into Borrower.


 


7.4                               Indebtedness. Create, incur, assume, or be liable for any
Indebtedness, or permit any Subsidiary to do so, other than Permitted
Indebtedness.


 


7.5                               Encumbrance. Create, incur, or allow any Lien on any of
its property, including the intellectual property, or assign or convey any
right to receive income, including the sale of any Accounts, or permit any of
its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral
not to be subject to the first priority security interest granted herein. The
Collateral may also be subject to Permitted Liens.


 


9

















 


7.6                               Distributions; Investments.   (i) Directly or
indirectly acquire or own any Person, or make any Investment in any Person,
other than Permitted Investments, or permit any of its Subsidiaries to do so;
or (ii) pay any dividends
or make any distribution or payment or redeem, retire or purchase any capital
stock.


 


7.7                               Transactions with Affiliates. Directly or indirectly enter into or permit
to exist any material transaction with any Affiliate of Borrower, except for
transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that
are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated
Person.


 


7.8                               Subordinated Debt. Make or permit any payment on any
Subordinated Debt, except under the terms of the Subordinated Debt, or amend any provision in any document
relating to the Subordinated Debt, without Bank’s prior written consent.


 


7.9                               Compliance. Become an “investment company” or a company
controlled by an “investment company”,
under the Investment Company Act of 1940 or undertake as one of its important
activities extending credit to
purchase or carry margin stock, or use the proceeds of any Advance for that
purpose; fail to meet the minimum
funding requirements of ERISA, permit a Reportable Event or Prohibited
Transaction, as defined in ERISA, to occur; fail to comply with the Federal
Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to
have a material adverse effect on Borrower’s business or operations or would reasonably be expected to cause a
Material Adverse Change, or permit any of its Subsidiaries to do so.


 


8                                         EVENTS OF DEFAULT


 


Any one of the following is
an Event of Default:


 


8.1                               Payment Default. Borrower fails to pay any of the Obligations
when due;


 


8.2                               Covenant Default. Borrower fails or neglects to perform any
obligation in Section 6 or violates any covenant in Section 7 or fails or neglects to perform, keep,
or observe any other material term, provision, condition, covenant or agreement
contained in this Agreement, any Loan Documents and as to any default under
such other term, provision, condition, covenant or agreement that can be cured,
has failed to cure the default within ten (10) days after the occurrence thereof; provided, however, grace
and cure periods provided under this section shall not apply to financial
covenants or any other covenants that are required to be satisfied, completed
or tested by a date certain;


 


8.3                               Material Adverse Change. A Material Adverse Change occurs;


 


8.4                               Attachment. (i) Any portion of Borrower’s assets is
attached, seized, levied on, or comes into possession of a trustee or receiver
and the attachment, seizure or levy is not removed in ten (10) days; (ii) the
service of process upon Borrower
seeking to attach, by trustee or similar process, any funds of Borrower on
deposit with Bank, or any entity
under the control of Bank (including a subsidiary); (iii) Borrower is
enjoined, restrained, or prevented
by court order from conducting any part of its business; (iv) a judgment
or other claim becomes a Lien on a portion of Borrower’s assets; or (v) a
notice of lien, levy, or assessment is filed against any of Borrower’s assets
by any government agency and not
paid within ten (10) days after Borrower receives notice;


 


8.5                               Insolvency.   (i) Borrower is unable
to pay its debts (including trade debts) as they become due or otherwise
becomes insolvent; (ii) Borrower begins an Insolvency Proceeding; or (iii) an
Insolvency Proceeding is begun
against Borrower and not dismissed or stayed within thirty (30) days (but no
Advances shall be made before any
Insolvency Proceeding is dismissed);


 


8.6                               Other Agreements. If there is a default in any agreement to
which Borrower is a party with a third
party or parties resulting in a right by such third party or parties, whether
or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of One Hundred
Thousand Dollars ($100,000) or that could result in a Material Adverse Change;


 


10

















 


8.7                               Judgments.  If a judgment or judgments for
the payment of money in an amount, individually or in the aggregate, of at least Two Hundred
Thousand Dollars ($200,000) shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period
of ten (10) days (provided that no Advances will be made prior to the satisfaction or stay of such judgment);


 


8.8                               Misrepresentations. If Borrower or any Person acting for Borrower
makes any material misrepresentation
or material misstatement now or later in any warranty or representation in this
Agreement or in any writing
delivered to Bank or to induce Bank to enter this Agreement or any Loan
Document;


 


8.9                               Subordinated Debt. A default or breach occurs under any
agreement between Borrower and any creditor of Borrower that signed a
subordination agreement with Bank, or any creditor that has signed a
subordination agreement with Bank breaches any terms of the subordination
agreement.


 


8.10                        Guaranty.  (i) Any guaranty of any Obligations
terminates or ceases for any reason to be in full force; or (ii) any
Guarantor does not perform any obligation under any guaranty of the
Obligations; or (iii) any material
misrepresentation or material misstatement exists now or later in any warranty
or representation in any guaranty of the Obligations or in any certificate
delivered to Bank in connection with the guaranty; or (iv) any
circumstance described in Section 7, or Sections 8.4, 8.5 or 8.7 occurs to
any Guarantor, or (v) the death, liquidation, winding up, termination of
existence, or insolvency of any Guarantor.


 


9                                         BANK’S RIGHTS AND REMEDIES


 


9.1                               Rights and Remedies. When an Event of Default occurs and continues
Bank may, without notice or
demand, do any or all of the following:


 


(a)                                  Declare all Obligations immediately due and
payable (but if an Event of Default described in Section 8.5 occurs all Obligations are immediately due
and payable without any action by Bank);


 


(b)                                 Stop advancing money or extending credit for
Borrower’s benefit under this Agreement or under any other agreement between Borrower and Bank;


 


(c)                                  Settle or adjust disputes and claims directly
with Account Debtors for amounts, on terms and in any order that Bank considers
advisable and notify any Person owing Borrower money of Bank’s security
interest in such funds and verify the amount of such account. Borrower shall
collect all payments in trust for Bank and, if requested by Bank, immediately
deliver the payments to Bank in the form received from the Account Debtor, with
proper endorsements for deposit;


 


(d)                                 Make any payments and do any acts it
considers necessary or reasonable to protect its security interest in the
Collateral. Borrower shall assemble the Collateral if Bank requests and make it
available as Bank designates. Bank may enter premises where the Collateral is
located, take and maintain possession of any part of the Collateral, and pay, purchase, contest,
or compromise any Lien which appears to be prior or superior to its security
interest and pay all expenses incurred. Borrower grants Bank a license to enter
and occupy any of its premises, without charge, to exercise any of Bank’s
rights or remedies;


 


(e)                                  Apply to the Obligations any (i) balances
and deposits of Borrower it holds, or (ii) any amount held by Bank owing to or for the
credit or the account of Borrower;


 


(f)                                    Ship, reclaim, recover, store, finish,
maintain, repair, prepare for sale, advertise for sale, and sell the
Collateral. Bank is hereby granted a non-exclusive, royalty-free license or
other right to use, without charge, Borrower’s labels, patents, copyrights,
mask works, rights of use of any name, trade secrets, trade names, trademarks,
service marks, and advertising matter, or any similar property as it pertains
to the Collateral, in completing production of, advertising for sale, and
selling any Collateral and, in connection with Bank’s exercise of its rights under this Section, Borrower’s
rights under all licenses and all franchise agreements inure to Bank’s benefit;


 


11

















 


(g)                                 Place a “hold” on any account maintained with
Bank and/or deliver a notice of exclusive control, any entitlement order, or
other directions or instructions pursuant to any control agreement or similar agreements
providing control of any Collateral; and


 


(h)                                 Exercise all rights and remedies and dispose
of the Collateral according to the Code.


 


9.2                               Bank Expenses; Unpaid Fees. Any amounts paid by Bank as provided herein
shall constitute Bank Expenses and are immediately due and payable, and shall
bear interest at the Default Rate and be secured by the Collateral. No payments
by Bank shall be deemed an agreement to make similar payments in the future or
Bank’s waiver of any Event of Default. In addition, any amounts advanced
hereunder which are not based on Financed
Receivables (including, without limitation, unpaid fees and Finance Charges as
described in Section 2.2) shall
accrue interest at the Default Rate and be secured by the Collateral.


 


9.3                               Bank’s Liability for Collateral. So long as Bank complies with reasonable
banking practices regarding the
safekeeping of collateral, Bank shall not be liable or responsible for: (a) the
safekeeping of the Collateral; (b) any
loss or damage to the Collateral; (c) any diminution in the value of the
Collateral; or (d) any act or default of any carrier, warehouseman,
bailee, or other Person. Borrower bears all risk of loss, damage or destruction
of the Collateral.


 


9.4                               Remedies Cumulative. Bank’s rights and remedies under this
Agreement, the Loan Documents, and
all other agreements are cumulative. Bank has all rights and remedies provided
under the Code, by law, or in equity. Bank’s exercise of one right or remedy is
not an election, and Bank’s waiver of any Event of Default is not a continuing
waiver. Bank’s delay is not a waiver, election, or acquiescence. No waiver
hereunder shall be effective unless
signed by Bank and then is only effective for the specific instance and purpose
for which it was given.


 


9.5                               Demand Waiver. Borrower waives demand, notice of default or
dishonor, notice of payment and nonpayment, notice of any default, nonpayment
at maturity, release, compromise, settlement, extension, or renewal of
accounts, documents, instruments, chattel paper, and guarantees held by Bank on
which Borrower is liable.


 


9.6                               Default Rate. After the occurrence of an Event of Default,
all Obligations shall accrue interest at the Applicable Rate plus five percent (5.0%) per annum (the “Default
Rate”).


 


10                                  NOTICES.


 


Notices or demands by either
party about this Agreement must be in writing and personally delivered or sent by an overnight delivery service, by
certified mail postage prepaid return receipt requested, or by fax to the addresses listed at the beginning of this
Agreement. A party may change notice address by written notice to the other
party.


 


11                                  CHOICE OF LAW, VENUE AND JURY
TRIAL WAIVER


 


California law
governs the Loan Documents without regard to principles of conflicts of law.
Borrower and Bank each submit to the exclusive jurisdiction of the State and
Federal courts in California and Borrower accepts jurisdiction of the courts
and venue in Santa Clara County, California. NOTWITHSTANDING THE
FOREGOING, BANK SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST
BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH BANK
DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO
OTHERWISE ENFORCE BANK’S RIGHTS AGAINST BORROWER OR ITS PROPERTY.


 


BORROWER AND BANK EACH WAIVE
THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR
BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION,
INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A
MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY
HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.


 


12

















 


12                                  GENERAL PROVISIONS


 


12.1                        Successors and Assigns. This Agreement binds and is for the benefit
of the successors and permitted assigns of each party. Borrower may not assign
this Agreement or any rights or Obligations under it without Bank’s prior
written consent which may be granted or withheld in Bank’s discretion. Bank has
the right, without the consent of or notice to Borrower, to sell, transfer,
negotiate, or grant participation in all or any part of, or any interest in,
Bank’s obligations, rights and benefits under this Agreement, the Loan
Documents or any related agreement.


 


12.2                        Indemnification. Borrower hereby indemnifies, defends and
holds Bank and its officers, employees, directors and agents harmless against: (a) all
obligations, demands, claims, and liabilities asserted by any other party in
connection with the transactions contemplated by the Loan Documents; and (b) all
losses or Bank Expenses incurred,
or paid by Bank from, following, or consequential to transactions between Bank
and Borrower (including reasonable attorneys’ fees and expenses), except for
losses caused by Bank’s gross negligence or willful misconduct.


 


12.3                        Right of Set-Off. Borrower hereby grants to Bank, a lien,
security interest and right of setoff as security for all Obligations to Bank, whether now existing or hereafter
arising upon and against all deposits, credits, collateral and property, now or
hereafter in the possession, custody, safekeeping or control of Bank or any
entity under the control of Bank (including a Bank subsidiary) or in transit to
any of them. At any time after the occurrence and during the continuance of an
Event of Default, without demand or notice, Bank may set off the same or any
part thereof and apply the same to any liability or obligation of Borrower even
though unmatured and regardless of the adequacy of any other collateral
securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS
RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE
OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH
DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.


 


12.4                        Time of Essence. Time is of the essence for the performance of
all Obligations in this Agreement.


 


12.5                        Severability of Provision. Each provision of this Agreement is severable
from every other provision in determining the enforceability of any provision.


 


12.6                        Amendments in Writing;
Integration. All amendments to this Agreement must be in
writing signed by both Bank and Borrower. This Agreement and the Loan Documents
represent the entire agreement about this subject matter, and supersede prior
negotiations or agreements. All prior agreements, understandings,
representations, warranties, and negotiations between the parties about the
subject matter of this Agreement and the Loan Documents merge into this
Agreement and the Loan Documents.


 


12.7                        Counterparts. This Agreement may be executed in any number
of counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, are an original, and all taken together,
constitute one Agreement.


 


12.8                        Survival. All covenants, representations and
warranties made in this Agreement continue in full force while any Obligations
remain outstanding. The obligation of Borrower in Section 12.2 to
indemnify Bank shall survive until the statute of limitations with respect to
such claim or cause of action shall have run.


 


12.9                        Confidentiality. In handling any confidential information,
Bank shall exercise the same degree of care that it exercises for its own
proprietary information, but disclosure of information may be made: (i) to
Bank’s subsidiaries or affiliates in connection with their business with
Borrower; (ii) to prospective transferees or purchasers of any interest in the Advances
(provided, however, Bank shall use commercially reasonable efforts in obtaining such prospective transferee’s or
purchaser’s agreement to the terms of this provision); (iii) as required
by law, regulation, subpoena, or other order, (iv) as required in
connection with Bank’s examination or audit; and (v) as Bank considers
appropriate in exercising remedies under this Agreement. Confidential
information does not include


 


13

















 


information that either: (a) is in the public domain or in Bank’s
possession when disclosed to Bank, or becomes part of the public domain after
disclosure to Bank; or (b) is disclosed to Bank by a third party, if Bank
does not know that the
third party is prohibited from disclosing the information.


 


12.10                 Attorneys’ Fees, Costs and
Expenses. In any action or proceeding between Borrower
and Bank arising out of the Loan
Documents, the prevailing party will be entitled to recover its reasonable
attorneys’ fees and other reasonable costs and expenses incurred, in addition
to any other relief to which it may be entitled.


 


13                                  DEFINITIONS


 


13.1                        Definitions. In this Agreement:


 


“Accounts” are all existing and later arising accounts,
contract rights, and other obligations owed Borrower in connection with its sale or lease of goods (including
licensing software and other technology) or provision of services, all credit
insurance, guaranties, other security and all merchandise returned or reclaimed
by Borrower and Borrower’s Books relating to any of the foregoing.


 


“Account Debtor” is as defined in the Code and shall include,
without limitation, any person liable on any Financed Receivable, such as, a
guarantor of the Financed Receivable and any issuer of a letter of credit or
banker’s acceptance.


 


“Adjusted Quick Ratio” is the ratio of Quick Assets to Current
Liabilities minus Deferred Revenue.


 


“Adjustments” are all discounts, allowances, returns,
disputes, counterclaims, offsets, defenses, rights of recoupment, rights of
return, warranty claims, or short payments, asserted by or on behalf of any
Account Debtor for any Financed Receivable.


 


“Advance” is defined in Section 2.1.1.


 


“Advance Rate” is eighty percent (80.0%), net of any offsets
related to each specific Account Debtor.


 


“Affiliate” is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is under common control with
the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that
is a limited liability company, that Person’s managers and members.


 


“Applicable Rate” is, while the Streamline Agreement is in
effect, a per annum rate equal to the Prime Rate plus four percent (4.0%);
otherwise, a per annum rate equal to the Prime Rate plus four and one-half
percent (4.5%).


 


“Bank Expenses” are all audit fees and expenses and reasonable
costs or expenses (including reasonable attorneys’ fees and expenses) for
preparing, negotiating, administering, defending and enforcing the Loan
Documents (including appeals or Insolvency Proceedings).


 


“Borrower’s Books” are all Borrower’s books and records
including ledgers, records regarding Borrower’s assets or liabilities, the Collateral, business operations or financial
condition and all computer programs or discs or any equipment containing the
information.


 


“Business Day” is any day that is not a Saturday, Sunday or
a day on which Bank is closed.


 


“Closing Date” is the date of this Agreement.


 


“Code” is the Uniform Commercial Code as adopted in
California, as amended and as may be amended and in effect from time to time.


 


14

















 


“Collateral” is any and all properties, rights and assets
of Borrower granted by Borrower to Bank or arising under the Code, now, or in
the future, in which Borrower obtains an interest, or the power to transfer
rights, as described on Exhibit A.


 


“Collateral Handling Fee” is defined in Section 2.2.4.


 


“Collections” are all funds received by Bank from or on
behalf of an Account Debtor for Financed Receivables.


 


“Compliance Certificate” is attached as Exhibit B.


 


“Contingent Obligation” is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness, lease, dividend, letter of credit
or other obligation of another such as an obligation directly or indirectly
guaranteed, endorsed, co-made, discounted or sold with recourse by that Person,
or for which that Person is
directly or indirectly liable; (ii) any obligations for undrawn letters of
credit for the account of that Person; and (iii) all obligations from any
interest rate, currency or commodity swap agreement, interest rate cap or
collar agreement, or other agreement or arrangement designated to protect a
Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent
Obligation” does not include endorsements in the ordinary course of business.
The amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by
the Person in good faith; but the amount may not exceed the maximum of the
obligations under the guarantee or other support arrangement.


 


“Current Liabilities” is all obligations and liabilities of
Borrower to Bank, plus, without duplication, the aggregate amount of Borrower’s
Total Liabilities which mature within one (1) year.


 


“Default Rate” is defined in Section 9.6.


 


“Deferred Revenue” is all amounts received or invoiced, as
appropriate, in advance of performance under contracts and not yet recognized
as revenue.


 


“Early Termination Fee” is defined in Section 2.1.1.


 


“Eligible Accounts” are billed Accounts in the ordinary course of
Borrower’s business that meet all Borrower’s representations and warranties in Section 5.3,
have been, at the option of Bank, confirmed in accordance with Section 2.1.1
(d), and are due and owing from Account Debtors deemed creditworthy by Bank in
its sole discretion. Without
limiting the fact that the determination of which Accounts are eligible
hereunder is a matter of Bank discretion in each instance, Eligible Accounts
shall not include the following Accounts (which listing may be amended or changed in Bank’s discretion with
notice to Borrower):


 


(a)                                  Accounts that the Account Debtor has not paid
within ninety (90) days of invoice date;


 


(b)                                 Accounts for an Account Debtor, fifty percent
(50%) or more of whose Accounts have not been paid within ninety (90) days of
invoice date;


 


(c)                                  Accounts for which the Account Debtor does not
have its principal place of business in the United States, unless agreed to by
Bank in writing, in its sole discretion, on a case-by-case basis;


 


(d)                                 Accounts for which the Account Debtor is a
federal, state or local government entity or any department, agency, or instrumentality
thereof except for Accounts of the United States if the payee has assigned its payment rights to Bank and the assignment has
been acknowledged under the Assignment of Claims Act of 1940 (31 U.S.C. 3727);


 


(e)                                  Accounts for which Borrower owes the Account
Debtor, but only up to the amount owed (sometimes called “contra” accounts,
accounts payable, customer deposits or credit accounts);


 


15

















 


(f)                                    Accounts for demonstration or promotional
equipment, or in which goods are consigned, sales guaranteed, sale or return,
sale on approval, bill and hold, or other terms if the Account Debtor’s payment
may be conditional;


 


(g)                                 Accounts for which the Account Debtor is
Borrower’s Affiliate, officer, employee, or agent;


 


(h)                                 Accounts in which the Account Debtor disputes
liability or makes any claim and Bank believes there may be a basis for dispute
(but only up to the disputed or claimed amount), or if the Account Debtor is
subject to an Insolvency
Proceeding, or becomes insolvent, or goes out of business;


 


(i)                                     Accounts for which Bank reasonably determines
collection to be doubtful or any Accounts which are unacceptable to Bank for any reason.


 


“ERISA” is the Employment Retirement Income Security
Act of 1974, and its regulations. 


 


“Events of Default” are set forth in Article 8.


 


“Facility Amount” is Three Million Seven Hundred and Fifty
Thousand Dollars ($3,750,000).


 


“Facility Fee” is defined in Section 2.2.2.


 


“Finance Charges” is defined in Section 2.2.3.


 


“Financed Receivables” are all those Eligible Accounts, including
their proceeds which Bank finances and makes an Advance, as set forth in Section 2.1.1.
A Financed Receivable stops being a Financed Receivable (but remains
Collateral) when the Advance made for the Financed Receivable has been fully
paid.


 


“Financed Receivable Balance” is the total outstanding gross face amount,
at any time, of any Financed Receivable.


 


“GAAP” is generally accepted accounting principles.


 


“Good Faith Deposit” is defined in Section 2.2.8.


 


“Guarantor” is any present or future guarantor of the
Obligations.


 


“Indebtedness” is (a) indebtedness for borrowed money
or the deferred price of property or services, such as reimbursement and other obligations for
surety bonds and letters of credit, (b) obligations evidenced by notes,
bonds, debentures or similar instruments, (c) capital lease obligations
and (d) Contingent Obligations.


 


“Insolvency Proceeding” is any proceeding by or against any Person
under the United States Bankruptcy Code,
or any other bankruptcy or insolvency law, including assignments for the benefit
of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.


 


“Investment” is any beneficial ownership of (including
stock, partnership interest or other securities) any Person, or any loan,
advance or capital contribution to any Person.


 


“Invoice Transmittal” shows Eligible Accounts which Bank may finance
and, for each such Account, includes the Account Debtor’s, name, address,
invoice amount, invoice date and invoice number.


 


“Intellectual Property Collateral” is a defined in the IP Agreement.


 


“IP Agreement” is a certain Intellectual Property Security
Agreement executed and delivered by Borrower to Bank.


 


16

















 


“Lockbox” is defined in Section 2.2.7.


 


“Lien” is a mortgage, lien, deed of trust, charge,
pledge, security interest or other encumbrance.


 


“Loan Documents” are, collectively, this Agreement, any note,
or notes or guaranties executed by Borrower
or Guarantor, and any other present or future agreement between Borrower and/or
for the benefit of Bank in connection with this Agreement, all as amended,
extended or restated.


 


“Material Adverse Change” is: (i) A material impairment in the
perfection or priority of Bank’s security interest in the Collateral or in the value of such Collateral; (ii) a
material adverse change in the business, operations, or condition (financial or
otherwise) of Borrower; or (iii) a material impairment of the prospect of
repayment of any portion of the
Obligations.


 


“Maturity Date” is two (2) years from the date of this
Agreement.


 


“Obligations” are all advances, liabilities, obligations,
covenants and duties owing, arising, due or payable by Borrower to Bank now or
later under this Agreement or any other document, instrument or agreement,
account (including those acquired
by assignment) primary or secondary, such as all Advances, Finance Charges,
Facility Fee, Early Termination Fee, Collateral Handling Fee, Warrant Waiver
Fee, interest, fees, expenses, professional fees and attorneys’ fees, or other amounts now or hereafter owing by
Borrower to Bank.


 


“Perfection Certificate” is a certain representations and warranties
letter agreement previously executed and delivered by Borrower to Bank in
connection with this Agreement.


 


“Permitted Indebtedness” is:


 


(a)                                  Borrower’s indebtedness to Bank under this
Agreement or the Loan Documents;


 


(b)                                 Subordinated Debt;


 


(c)                                  Indebtedness to trade creditors incurred in
the ordinary course of business; and


 


(d)                                 Indebtedness secured by Permitted Liens.


 


“Permitted
Investments” are: (i) marketable
direct obligations issued or unconditionally guaranteed by the United States or
its agency or any state maturing within 1 year from its acquisition, (ii) commercial
paper maturing no more than 1 year after its creation and having the highest
rating from either Standard & Poor’s Corporation or Moody’s Investors Service, Inc., (iii) Bank’s certificates
of deposit issued maturing no more than 1 year after issue, (iv) any other investments administered through
Bank. 


 


“Permitted Liens” are:


 


(a)                                  Liens arising under this Agreement or other
Loan Documents;


 


(b)                                 Liens for taxes, fees, assessments or other
government charges or levies, either not delinquent or being contested in good faith and for which
Borrower maintains adequate reserves on its Books, if they have no priority over any of Bank’s security
interests;


 


(c)                                  Purchase money Liens securing no more than $50,000
in the aggregate amount outstanding (i) on equipment acquired or held by
Borrower incurred for financing the acquisition of the equipment, or (ii) existing on equipment when
acquired, if the Lien is confined to the property and improvements and
the proceeds of the equipment;


 


(d)                                 Leases or subleases and non-exclusive
licenses or sublicenses granted in the ordinary course of Borrower’s business, if
the leases, subleases, licenses and sublicenses permit granting Bank a security
interest;


 


17

















 


(e)                                  Liens incurred in the extension, renewal or
refinancing of the indebtedness secured by Liens described in (a) through (d), but any extension, renewal or
replacement Lien must be limited to the property encumbered by the existing
Lien and the principal amount of the indebtedness may not increase.


 


“Person” is any individual, sole proprietorship,
partnership, limited liability company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or
government agency.


 


“Prime Rate” is Bank’s most recently announced “prime
rate,” even if it is not Bank’s lowest rate.


 


“Reconciliation Day” is the last calendar day of each month.


 


“Reconciliation Period” is each calendar month.


 


“Responsible Officer” is each of the Chief Executive Officer,
President, Chief Financial Officer and Controller of Borrower.


 


“Streamline Agreement” is that certain Streamline Facility Agreement
of approximate even date herewith executed
and delivered by Borrower to Bank.


 


“Subordinated Debt” is debt incurred by Borrower subordinated to
Borrower’s debt to Bank (pursuant to a subordination agreement entered into
between Bank, Borrower and the subordinated creditor), on terms acceptable to
Bank.


 


“Subsidiary” is any Person, corporation, partnership,
limited liability company, joint venture, or any other business entity of which more than 50% of the
voting stock or other equity interests is owned or controlled, directly or
indirectly, by the Person or one or more Affiliates of the Person.


 


“Tangible Net Worth” is, on any date, the consolidated total
assets of Borrower and its Subsidiaries minus (i) any amounts attributable to (a) goodwill,
(b) intangible items including unamortized debt discount and expense, patents, trade and service marks and names,
copyrights and research and development expenses except prepaid expenses, and (c) reserves not already
deducted from assets, minus (ii) Total Liabilities, plus (iii) Subordinated
Debt.


 


“Total Liabilities” is on any day, obligations that should, under
GAAP, be classified as liabilities on Borrower’s consolidated balance sheet,
including all Indebtedness, and current portion of Subordinated Debt permitted by Bank to be paid by Borrower, but
excluding all other Subordinated Debt.


 


“Warrant Waiver Fee” shall have the meaning as set forth in Section 2.2.4.5
hereof.


 


18

















 


IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed as a sealed instrument under the laws of the State of
California as of the date first above written.


 


BORROWER:


 


VERSANT
CORPORATION


 


 


	
  By

  	
   /s/ Jochen Witte

  	
   

  
	
  Name:

  	
   JOCHEN WITTE

  	
   

  
	
  Title:

  	
   CEO

  	
   

  
					



 


BANK:


 


SILICON VALLEY BANK


 


 


	
  By

  	
   /s/ Brett Maver

  	
   

  
	
  Name:

  	
   BRETT MAVER

  	
   

  
	
  Title:

  	
   VP

  	
   

  
					



 


19

















 


EXHIBIT A


 


The Collateral consists of
all of Borrower’s right, title and interest in and to the following:


 


All goods, equipment,
inventory, contract rights or rights to payment of money, leases, license
agreements, franchise
agreements, general intangibles (including payment intangibles) accounts
(including health-care receivables), documents, instruments (including any
promissory notes), chattel paper (whether tangible or electronic), cash,
deposit accounts, fixtures, letters of credit rights (whether or not the letter
of credit is evidenced by a writing), commercial tort claims, securities, and
all other investment property, supporting obligations, and financial assets,
whether now owned or hereafter acquired, wherever located; and any copyright
rights, copyright applications,
copyright registrations and like protections in each work of authorship and
derivative work, whether published
or unpublished, now owned or later acquired; any patents, trademarks, service
marks and applications therefor; trade styles, trade names, any trade secret
rights, including any rights to unpatented inventions, know-how, operating
manuals, license rights and agreements and confidential information, now owned
or hereafter acquired; or any
claims for damages by way of any past, present and future infingement of any of
the foregoing; and all Borrower’s
books relating to the foregoing and any and all claims, rights and interests in
any of the above and all substitutions for, additions, attachments,
accessories, accessions and improvements to and replacements, products,
proceeds and insurance proceeds of any or all of the foregoing.


 


20

















 


EXHIBIT B


 





 


SILICON
VALLEY BANK


SPECIALTY
FINANCE DIVISION


Compliance Certificate


 


I, as authorized officer of
Versant Corporation (“Borrower”) certify under the Loan and Security Agreement (the “Agreement”) between Borrower
and Silicon Valley Bank (“Bank”) as follows (all capitalized terms used herein shall have the meaning set forth
in the Agreement):


 


Borrower represents and warrants
for each Financed Receivable:


 


Each Financed Receivable is
an Eligible Account.


 


Borrower is the owner with
legal right to sell, transfer, assign and encumber such Financed Receivable;


 


The correct amount is on the
Invoice Transmittal and is not disputed;


 


Payment is not contingent on
any obligation or contract and Borrower has fulfilled all its obligations as of
the Invoice Transmittal
date;


 


Each
Financed Receivable is based on an actual sale and delivery of goods and/or
services rendered, is due to Borrower, is not past due or in default, has not
been previously sold, assigned, transferred, or pledged and is free of any
liens, security interests and encumbrances other than Permitted Liens;


 


There are no defenses,
offsets, counterclaims or agreements for which the Account Debtor may claim any
deduction or discount;


 


It reasonably believes no
Account Debtor is insolvent or subject to any Insolvency Proceedings;


 


It has not filed or had filed
against it Insolvency Proceedings and does not anticipate any filing;


 


Bank has the right to endorse
and/ or require Borrower to endorse all payments received on Financed Receivables
and all proceeds of
Collateral.


 


No representation, warranty
or other statement of Borrower in any certificate or written statement given to
Bank contains any untrue
statement of a material fact or omits to state a material fact necessary to
make the statement contained in
the certificates or statement not misleading.


 


Additionally, Borrower represents
and warrants as follows:


 


Borrower and each Subsidiary
is duly existing and in good standing in its state of formation and qualified
and licensed to do business
in, and in good standing in, any state in which the conduct of its business or
its ownership of property requires that it be qualified except where the
failure to do so could not reasonably be expected to cause a Material Adverse
Change. The execution, delivery and performance of the Loan Documents have been
duly authorized, and do not conflict with Borrower’s organizational documents,
nor constitute an event of default under any material agreement by which Borrower is bound. Borrower is not in
default under any agreement to which or by which it is bound in which the
default could reasonably be expected to cause a Material Adverse Change.


 


Borrower has good title to
the Collateral, free of Liens except Permitted Liens. All inventory is in all
material respects of good and marketable quality, free from material defects.


 


21

















 


Borrower is not an “investment
company” or a company “controlled” by an “investment company” under the Investment Company Act. Borrower is not
engaged as one of its important activities in extending credit for margin stock
(under Regulations X, T and U of the Federal Reserve Board of Governors).
Borrower has complied in all material respects with the Federal Fair Labor
Standards Act. Borrower has not violated any laws, ordinances or rules, the violation of which could reasonably
be expected to cause a Material Adverse Change. None of Borrower’s or any
Subsidiary’s properties or assets has been used by Borrower or any Subsidiary
or, to the best of Borrower’s knowledge, by previous Persons, in disposing,
producing, storing, treating, or transporting any hazardous substance other than legally.
Borrower and each Subsidiary has timely filed all required tax returns and paid, or made adequate provision to pay, all
material taxes, except those being contested in good faith with adequate reserves under GAAP. Borrower and each
Subsidiary has obtained all consents, approvals and authorizations of, made all
declarations or filings with, and given all notices to, all government
authorities that are necessary to continue its business as currently conducted
except where the failure to obtain or make such consents, declarations, notices
or filings would not reasonably be expected to cause a Material Adverse Change.


 


All representations and
warranties in the Agreement are true and correct in all material respects on
this date, and the Borrower represents that there is no existing Event of
Default.


 


Sincerely,


 


	
  Signature:

  	
  /s/ Jochen Witte

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  CEO

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  June 17, 2005

  	
   

  



 


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