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                            Letter of Understanding

PERSONAL AND CONFIDENTIAL

November 12, 2002

William F. Mason
President & CEO
VERTICA SOFTWARE, INC.
106 East Sixth Street
Austin, Texas 78701

Dear Bill:

We are pleased to set forth the terms of the engagement of Thomas E. Lindholm,
by VERTICA SOFTWARE, INC. (the "Company") in connection with advising and
assisting the Company with (a) obtaining new financing (including senior debt
and subordinated debt) for the Company and/or any of its affiliates, (b)
refinancing or restructuring existing debt of the Company and/or any of its
affiliates, and (c) the recapitalization of the Company and/or any of its
affiliates (each a "Financial Transaction" and collectively the "Financial
Transactions"), as more fully set forth herein. This agreement will confirm
Thomas E. Lindholm's engagement by the Company on the following terms and
conditions:

1. Services To Be Provided. Thomas E. Lindholm will assist the Company as the
non-exclusive financial advisor in connection with Financial Transactions for
180 days from the date of this document signing. In connection with Thomas E.
Lindholm's activities on the Company's behalf. Thomas E. Lindholm will
familiarize himself, to the extent reasonably necessary, with the business,
operations, properties, financial condition and prospects of the Company, and as
soon as reasonably practicable, complete an initial analysis of the Company's
operational viability. In connection with his role as financial advisor. Thomas
E. Lindholm shall advise the Company on potential Financial Transactions and
assist the Company in obtaining the Financial Transactions the Company desires
to pursue. Such services shall include the following:

a. Capital Raising/Debt Activities. Thomas E. Lindholm will assist the Company
in (i) developing a plan to restructure and/or refinance the Company's
financial structure, (ii) implement any such restructuring and/or refinancing
plans through discussions and negotiations with creditors (whether they be
secured, unsecured or trade creditors), shareholders and parties in interest and
with potential parties to any Financial Transaction; (iii) structuring and
raising new debt or equity securities issued by

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Company: and (iv) evaluating any securities that might be issued in connection
with any restructuring or recapitalization plan.

b. Financial Advisory Services. Thomas E. Lindholm will assist the Company in
such other financial advisory services as may be mutually agreed upon by Thomas
E. Lindholm and the Company, including assisting the Company in negotiations
with senior lender concerning a loan amendment, forbearance and standstill
agreement.

2. Fees. In consideration for our services pursuant to this Agreement, Thomas E.
Lindholm shall be entitled to receive, and the Company shall pay to Thomas E.
Lindholm, the following compensation:

     a. Engagement Fees. Upon the execution of this Agreement, the Company shall
        pay to Thomas E. Lindholm an engagement fee of payable in the form of
        350,000 restricted common shares of VERTICA SOFTWARE, INC. The
        engagement fee shall be deemed earned when this Agreement is executed by
        both parties hereto and shall be non-refundable.

     b. Financial Transaction Fee. Upon the closing of any Financial
        Transactions for the Company, the Company shall pay to Thomas E.
        Lindholm a cash fee (the "Financial Transaction Fee") equal to, the
        aggregate, the following:

             i.    2.0% of the principal amount of senior debt, which is
          obtained,refinanced, amended or restructured; and separately,
             ii.   4.0% of the principal amount of all subordinated debt which
        is obtained, refinanced, amended or restructured; and separately,
             iii.  5.0% of the gross amount of any new equity securities issued
        by the Company.

             It should be noted that the Financial Transaction Fee is not a
        cumulative fee but a fee for each type of capital raised.

             For Example, if $800,000 equity were raised, the Financial
        Transaction Fee would be $40,000 ($800,0000 x 5%) and no fee for senior
        or subordinated debt.

        The Financial Transaction Fee shall be due and payable by the Company
        upon the closing of the subject Financial Transaction. Thomas E.
        Lindholm retains the option of taking the Financial Transaction fee in
        the form of restricted common shares at the closing of the subject
        Financial Transaction.

        The number of restricted shares shall be the Financial Transaction Fee
        divided by a 30% discount of the company stock's previous 30-day average
        closing bid price.

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          For example, an earned $40,000 Financial Transaction fee divided a
     stock price of $0.07 (30% discount on the previous 30-day average bid price
     of $0.10) shall mean 571,428 restricted common shares.

     Debt Reduction Fee. Upon the closing of any refinancing in which any
     creditor (whether secured or unsecured creditor, trade creditor or other
     creditor) agrees to accept as full payment an amount less than the total
     actual amount it is then owed (including any "soft notes") in accordance
     with the applicable loan documents, the Company shall pay Thomas E.
     Lindholm an additional fee (the "Debt Reduction Fee") equal to 20% of the
     amount of any reduction of that total amount owed. The Debt Reduction Fee
     shall be in addition to any Financial Transaction Fee that my be owed to
     Thomas E. Lindholm for such refinancing.

  c. Expenses. In addition to the fees described above, the Company agrees to
     promptly reimburse Thomas E. Lindholm upon request from time to time, for
     pre-approved out-of-pocket expenses, the (the "Expenses") reasonably
     incurred by Thomas E. Lindholm up to any aggregate maximum of $5,000, which
     shall be itemized, unless the Company has agreed in writing to a greater
     amount during the term of this engagement. Thomas E. Lindholm retains the
     option of taking the Expenses in the form of restricted common shares. The
     number of shares shall be determined by the expenses total divided by a 30%
     discount of the Company stocks previous 30-day average closing bid.

3. Cooperation. In connection with Thomas E. Lindholm's activities on the
Company's behalf, the Company will cooperate with and will furnish Thomas E.
Lindholm with all information and data concerning the Company and any Financial
Transaction (the "Information") which Thomas E. Lindholm deems appropriate and
will provide Thomas E. Lindholm with access to the Company's officers,
directors, employees, independent accountants and legal counsel. The Company
represents that to the best of it's knowledge, all information (a) made
available to Thomas E. Lindholm by the Company or (b) contained in any filing by
the Company with any court or any government or regulatory agency, commission or
instrumentality each (an "Agency") will, at all times during the period of
engagement of Thomas E. Lindholm, hereunder, be complete and correct in all
material respects and will not contain any untrue statement of material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances under which such statements are
made. The Company further represents and warrants that any projections will have
been prepared in good faith and will be based on assumptions, which, in light of
the circumstances under which they are made, are reasonable.

Company acknowledges and agrees that, in rendering its services hereunder,
Thomas E. Lindholm will be using and relying on the information (and
information available from

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public sources and other sources deemed reliable by Thomas E. Lindholm) without
independent verification thereof or independent appraisal of any of the
Company's assets. Thomas E. Lindholm does not assume responsibility for the
accuracy or completeness of the information or any other information regarding
the Company or any Financial Transaction. Any advice rendered by Thomas E.
Lindholm, pursuant to this Agreement may not be disclosed publicly by the
Company without Thomas E. Lindholm's prior written consent.

4. Indemnification. The Company agrees to indemnify Thomas E. Lindholm in
accordance with the indemnification provisions attached to this Agreement as
Appendix A, which are incorporated herein and made a part hereof.

5. Other Matters.

          a.  The Company hereby acknowledges that it is a sophisticated
              business enterprise that has retained Thomas E. Lindholm for the
              limited purposes set forth in this Agreement and the parties
              acknowledge and agree that their respective rights and obligations
              are contractual in nature. Each party disclaims any intention to
              impose fiduciary obligations on the other by virtue of the
              engagement contemplated by this Agreement.

          b.  This Agreement may be terminated with or without cause by Thomas
              E. Lindholm or the Company at any time upon receipt of written
              notice by the other party to that effect. Upon termination of the
              Agreement, neither party will have any liability or continuing
              obligation to the other, except, that: (i) the Indemnification
              provisions of Exhibit A to this Agreement will survive any such a
              termination and if a Financial Transaction is (1) consummated from
              the date of termination through the twelve (12) month anniversary
              of such termination or (2) consummated with a Designated Party
              from the (12) month anniversary of such termination through the
              twenty-four (24) month anniversary of such termination (or if a
              definitive agreement with respect to such a Financial Transaction
              which is subsequently consummated is entered into during such
              periods), the Company will remain obligated to pay Thomas E.
              Lindholm, the Financial Transaction Fee and any other fees earned
              in accordance with the terms of this Agreement, provided, however,
              that if (a) Thomas E. Lindholm, terminates this Agreement without
              Cause (as hereafter defined), or (b) the Company terminates this
              Agreement with Company Cause (as hereafter defined). Thomas E.
              Lindholm, shall not thereafter be entitled to such Financial
              Transaction Fee. For purposes of this Agreeement only, "Cause"
              shall mean and include the Company's breach of any term of this
              Agreement or the failure of the Company to provide with the
              information requested in connection with the Company or a
              potential Financial Transaction. For purpose of this Agreement,
              "Company Cause" shall mean and include only Thomas E. Lindholm's
              gross negligence, willful misconduct, or substantial
              nonperformance of the services contemplated

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          by this Agreement. For purposes of this Agreement, "Designated Party"
          shall mean and include (i) any entity that Thomas E. Lindholm
          designates to the Company, from time to time, as having been contacted
          by Thomas E. Lindholm in connection with his Financial Transaction
          activities and (ii) any affiliate, insider, or person controlled by or
          under the control of any of the aforementioned foregoing.

       c. Without prior consent of the Company, Thomas E. Lindholm shall not
          disclose any confidential information concerning the Company to any
          prospective provider of capital or any other person who has not
          executed an agreement to keep such information confidential.

       d. The validity and interpretation and enforcement of this Agreement
          shall be governed by the law of the State of Texas without reference
          to conflict of law principles, (applicable to agreements made and to
          be fully performed therein). The Company hereby irrevocably submits to
          any court located in Tarrant County in the State of Texas as the
          exclusive jurisdiction of any suit, action or other proceeding arising
          out of this Agreement, or any the agreements or transactions
          contemplated hereby, which is brought by or against the Company, and
          (i) hereby irrevocably agrees that all claims in respect of any suit,
          action or proceeding may be heard and determined in any such court and
          (ii) to the extent that the Company has acquired, or hereafter may
          acquire, any immunity from jurisdiction of any such court or from any
          legal process therein, the Company hereby waives, to the fullest
          extent permitted by legal, such immunity. The Company hereby waives
          and agrees not to assert in any such suit, action or proceeding, in
          each case, to the fullest extent permitted by applicable law, any
          claim that (a) the Company is not personally subject to the
          jurisdiction of any such court, (b) the Company is immune from any
          legal process (whether through service or notice, attachment prior to
          judgment, attachment in aid of execution or otherwise) with respect
          to the Company or its property or (c) any such suit, action or
          proceeding is brought in an inconvenient forum.

       e. The benefits of this Agreement shall inure to the respective
          successors and assigns of the parties hereto and of the indemnified
          parties hereunder and their successors and assigns and
          representatives, and the obligations and liabilities assumed in this
          Agreement by the parties hereto shall be binding upon their respective
          successors and assigns. No fee payable to any other financial advisor
          by the Company or any other company in connection with the subject
          matter of this engagement shall reduce or otherwise affect any fee
          payable hereunder to Thomas E. Lindholm.

       f. Thomas E. Lindholm and the Company, acting through senior management,
          shall cooperate fully in the engagement contemplated by this
          Agreement; provided that any written reports or recommendations

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          shall be timely prepared for submission and, if appropriate, approval
          by the Company's Board of Directors.

If the foregoing correctly sets forth our understanding, we would appreciate you
signing the enclosed copy of this Agreement in the space provided and returning
it to us.

Very truly yours,

By /s/ Thomas E. Lindholm
   ---------------------------
   Thomas E. Lindholm

Confirmed and Agreed to this 20 day of November, 2002

VERTICA SOFTWARE, INC.

By /s/ William F. Mason
   ---------------------------
   William F. Mason
   President & CEO

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APPENDIX A
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        This Appendix A is incorporated in and made a material part of that
certain Letter of Understanding (the "Letter Agreement") between Thomas E.
Lindholm and VERTICA SOFTWARE, INC. (the "Company"). In the event that Thomas E.
Lindholm, becomes involved in any capacity, other than as a plaintiff, in any
action, proceeding or investigation brought by or against any person, including
stockholders of the Company, or any related entity in connection with any matter
related to the assignment described in the Letter Agreement will periodically
(but in ?? event less frequently than quarterly each year), the Company
periodically will subsequent proceeding, reimburse Thomas E. Lindholm for its
legal and other expenses (including the cost of any investigation and
preparation) reasonably ???? in connection therewith; provided, however, that it
is found in any such action, proceeding or investigation, or is ??? that an
loss, claim, damage or liability of Thomas E. Lindholm has resulted from gross
negligence or bad faith of Thomas E. Lindholm, in performing the services which
are the subject of the Letter Agreement. Thomas E. Lindholm shall repay such
portion of the reimbursed amounts that is attributable in expenses incurred in
retention to the act or omission of Thomas E. Lindholm which is the subject of
such finding. The Company also will indemnify and hold Thomas E. Lindholm
harmless against any losses, claims, damages, or liabilities to any such person
in connection with any matter related to the assignment described in the Letter
Agreement, except to the extent that any such loss, claim, damage or liability
results from the gross negligence or bad faith of Thomas E. Lindholm in
performing the services that are the subject of the Letter Agreement. If for any
reason the foregoing indemnification is partially unavailable to Thomas E.
Lindholm as a result of his bad faith or gross negligence, or is insufficient to
hold him harmless, then the Company shall contribute to the amount paid by
Thomas E. Lindholm as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect the relative economic interests of the
Company and its stockholders on the one hand and Thomas E. Lindholm on the other
hand in the matters contemplated by the Letter Agreement as well as the relative
fault of the Company and Thomas E. Lindholm with respect to loss, claim, damage
or liability and any other relevant equitable considerations; provided, however,
that in no event shall Thomas E. Lindholm, be required to contribute any amounts
in excess of the fees received by it hereunder. The Company shall be liable for
any settlement of any claim against Thomas E. Lindholm made with the Comapny's
written consent, which consent shall not unreasonably be withheld, and the
Company shall not without the prior written consent of Thomas E. Lindholm which
consent shall not be unreasonably withheld, ??? of ??? any claim or permit a
default or ??? to the entry of judgment in respect thereof, unless such
settlement, compromise or consent includes, as an unconditional term thereof,
the giving by the ??? to Thomas E. Lindholm, of an unconditional release from
any and all liability in respect to such claim. Thomas E. Lindholm shall have
the right to retain ??? of his own choice to represent him in connection with
any matter as to which the indemnity and contribution obligations of the Company
under this Appendix A shall apply and shall pay the costs and expenses of such
counsel in addition to any liability which the Company may otherwise have, shall
extend upon the same terms and conditions to any affiliate of Thomas E.
Lindholm, and the directors, agents, employees and controlling persons (if any),
as the case may be, of Thomas E. Lindholm and any such affiliate, and shall be
binding upon and inure to the benefit of any ???, ???, heirs and personal
representatives of the Company, Thomas E. Lindholm, any such affiliate and any
such person. The Company also agrees that neither Thomas E. Lindholm nor any of
such affiliates, directors, agents, employees or controlling persons shall have
any liability to the Company and its stockholders for or in connection with any
matter referred to in the Letter Agreement except to the extent that any losses,
claims, damages liabilities or expenses incurred by the Company result from the
gross negligence or bad faith of Thomas E. Lindholm in performing the services
that are subject of the Letter Agreement. The provisions of this Appendix A
shall survive any termination or completion of the engagement provided by the
Letter Agreement and the Letter Agreement shall be governed by and construed in
accordance with the laws of Texas without regard to principles of conflicts of
laws.

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