VERTICA SOFTWARE, INC.

                             NOTE PURCHASE AGREEMENT


         THIS NOTE PURCHASE AGREEMENT ("Agreement") is made as of the 9th day of
April 1997 by and between VERTICA SOFTWARE,  INC. a California  corporation (the
"Company"), and Arthur A. Gingell, an individual (the "Purchaser").

         In  consideration  of the  mutual  promises  hereinafter  set forth the
parties hereby agree as follows:


SECTION 1. AMOUNT AND TERMS OF THE LOAN

         1.1 The Loan.  Subject  to the  terms of this  Agreement,  the  Company
agrees to sell and Purchaser agrees to loan to the Company, One Hundred Thousand
Dollars  ($100,000.00)  (the  "Loan  Amount")  pursuant  to two (2)  convertible
promissory  notes  (the  "First  Note"  and  "Second  Note",  collectively,  the
"Notes"), each in the form attached hereto as Exhibit A. Upon the closing of the
Company's Stock Financing (as defined below) the outstanding  principal  balance
and unpaid accrued interest of the Notes shall automatically convert into shares
of Company's  Securities  pursuant to the terms of Section 1.3. In the event the
Stock  Financing has not closed within one year from the date of this Agreement,
the  principal  balance  and  unpaid  accrued  interest  of the  Notes  shall be
automatically converted into shares of the Company's Series A Preferred Stock.

         1.2 Stock Financing. For purposes of this Agreement,  "Stock Financing"
shall mean the sale by the Company of shares of its capital stock ("Securities")
to investors  ("Investors") with aggregate cash proceeds to the Company equal to
or in excess of Three Hundred Thousand Dollars ($300,000).

         1.3 Conversion Upon Stock Financing.  Immediately  prior to or upon the
closing of a Stock Financing as defined in Section 1.2, the principal amount and
any accrued and unpaid  interest on the Notes shall  automatically  convert into
shares of the  Company's  Securities  purchased by the Investors at a conversion
price equal to the lower of (i) One Dollar and Sixty Cents ($1.60) per share, or
(ii)  eighty  percent  (80%)  of the  price  per  share  paid  by the  Investors
purchasing the Securities.

         1.4 Other  Conversion.  In the event the Stock Financing has not closed
within one year from the date of this  Agreement,  the principal  amount and any
accrued and unpaid interest on the Notes shall automatically convert into shares
of the  Company's  Series A Preferred  Stock at a conversion  price equal to One
Dollar and Sixty Cents ($1.60) per share.


SECTION 2. THE CLOSING

         2.1      Closings.

                  (a) First Closing. The closing of the purchase and sale of the
First Note (the


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"First  Closing")  shall be held on April 10,  1997,  at the  offices  of Cooley
Godward LLP, Five Palo Alto Square,  3000 El Camino Real, Palo Alto,  California
94306,  or at such other time as the Company and the Purchaser  shall agree (the
"First Closing Date").

                  (b) Second  Closing.  The closing of the  purchase and sale of
the Second Note (the "Second  Closing")  shall be held on April 11, 1997, at the
offices of Cooley Godward LLP, Five Palo Alto Square,  3000 El Camino Real, Palo
Alto,  California  94306, or at such other time as the Company and the Purchaser
shall agree (the "Second Closing Date").

                  2.2 Deliveries.

                  (a) At the First  Closing (i)  Purchaser  will  deliver to the
Company a check or wire transfer funds in the amount of Fifty  Thousand  Dollars
($50,000);  and (ii) the Company shall deliver to Purchaser a Note  representing
such Purchaser's Loan Amount.

                  (b) At the Second  Closing (i)  Purchaser  will deliver to the
Company a checkor wire transfer  funds in the amount of Fifty  Thousand  Dollars
($50,000);  and (ii) the Company shall deliver to Purchaser a Note  representing
such Purchaser's Loan Amount.


SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         The Company hereby represents and warrants to Purchaser as follows:

         3.1  Corporate  Power.  The Company  will have at the Closing  Date all
requisite corporate power to execute and deliver this Agreement and to carry out
and perform its obligations under the terms of this Agreement.

         3.2 Authorization. All corporate action on the part of the Company, its
directors  and its  shareholders  necessary  for the  authorization,  execution,
delivery and performance of this Agreement by the Company and the performance of
the Company's obligations hereunder,  including the issuance and delivery of the
Notes has been taken or will be taken prior to the Closing.  This  Agreement and
the Notes when executed and delivered by the Company, shall constitute valid and
binding  obligations of the Company  enforceable in accordance with their terms,
subject to laws of general application relating to bankruptcy,  insolvency,  the
relief of debtors and, with respect to rights to  indemnity,  subject to federal
and  state  securities  laws.  The  Series A  Preferred  Stock  or other  equity
securities of the Company, when issued in compliance with the provisions of this
Agreement,  or the Notes,  will be validly issued,  fully paid and nonassessable
and free of any liens or encumbrances.

         3.3  Governmental  Consents.  All  consents,   approvals,   orders,  or
authorizations of, or registrations, qualifications, designations, declarations,
or filings with, any governmental authority, required on the part of the Company
in  connection  with the valid  execution  and delivery of this  Agreement,  the
offer,  sale or issuance of the Notes and the equity  securities  issuable  upon
conversion  of  the  Notes  or  the   consummation  of  any  other   transaction
contemplated  hereby  shall  have been  obtained  and will be  effective  at the
Closing, except for notices required or permitted to be filed with certain state
and federal  securities  commissions,


<PAGE>

which notices will be filed on a timely basis.

         3.4  Offering.   Assuming  the  accuracy  of  the  representations  and
warranties of the Purchasers  contained in Section 4 hereof,  the offer,  issue,
and  sale of the  Notes  are and  will  be  exempt  from  the  registration  and
prospectus delivery  requirements of the Securities Act of 1933, as amended (the
" 1933  Act"),  and have  been  registered  or  qualified  (or are  exempt  from
registration and qualification) under the registration, permit, or qualification
requirements of all applicable state securities laws.


SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

         4.1 Purchase for Own Account. Purchaser represents that it is acquiring
the  Notes and the  equity  securities  issuable  upon  conversion  of the Notes
(collectively, the "Notes and Underlying Securities") solely for its own account
and  beneficial  interest  for  investment  and not  for  sale or with a view to
distribution of the Notes and Underlying  Securities or any part thereof, has no
present  intention of selling (in connection  with a distribution or otherwise),
granting any participation in, or otherwise  distributing the same, and does not
presently have reason to anticipate a change in such intention.

         4.2 Information and Sophistication.  Purchaser acknowledges that it has
received all the  information  it has  requested  from the Company and considers
necessary or appropriate  for deciding  whether to acquire the Notes.  Purchaser
represents  that it has had an opportunity to ask questions and receive  answers
from the Company regarding the terms and conditions of the offering of the Notes
and to obtain any additional information necessary to verify the accuracy of the
information given the Purchaser.  Purchaser further  represents that it has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risk of this investment.

         4.3  Ability  to  Bear  Economic  Risk.  Purchaser   acknowledges  that
investment in the Notes involves a high degree of risk,  and represents  that it
is able,  without  materially  impairing  its financial  condition,  to hold the
Securities for an indefinite period of time and to suffer a complete loss of its
investment.

         4.4 Further Limitations on Disposition. Without in any way limiting the
representations  set  forth  above,  Purchaser  further  agrees  not to make any
disposition of all or any portion of the Securities unless and until:

                  (a) There is then in effect a Registration Statement under the
1933 Act covering  such proposed  disposition  and such  disposition  is made in
accordance with such Registration Statement; or

                  (b) (i) The  Purchaser  shall have notified the Company of the
proposed  disposition  and shall  have  furnished  the  Company  with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
reasonably  requested by the Company,  such  Purchaser  shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration under the 1933 Act.


<PAGE>


         4.5 Experience.  Purchaser is an "accredited  investor" as such term is
defined in Rule 501 under the Securities Act.

SECTION 5. MISCELLANEOUS

         5.1 Binding Agreement. The terms and conditions of this Agreement shall
inure to. the  benefit  of and be binding  upon the  respective  successors  and
assigns of the  parties.  Nothing in this  Agreement,  express  or  implied,  is
intended to confer upon any third party any rights,  remedies,  obligations,  or
liabilities under or by reason of this Agreement,  except as expressly  provided
in this Agreement.

         5.2  Governing  Law Venue.  This  Agreement  shall be  governed  by and
construed  under the laws of the State of  California  as applied to  agreements
among California  residents,  made and to be performed entirely within the State
of  California.  Each of Company and Purchaser  hereby  submits to the exclusive
jurisdiction  of the State and  Federal  courts  located  in the County of Santa
Clara, State of California.

         5.3  Counterparts.  This  Agreement  may be  executed  in  two or  more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.

         5.4  Titles  and  Subtitles.  The  titles  and  subtitles  used in this
Agreement  are  used  for  convenience  only  and  are not to be  considered  in
construing or interpreting this Agreement.

         5.5 Notices.  All notices  required or permitted  hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile, (iii) five
(5) days after having been sent by registered or certified mail,  return receipt
requested,  postage prepaid, or (iv) one (1) day after deposit with a nationally
recognized  overnight  courier,  specifying  next  day  delivery,  with  written
verification of receipt.

         5.6 Modification; Waiver. No modification or waiver of any provision of
this Agreement or consent to departure  therefrom  shall be effective  unless in
writing and approved by the Company and the Purchaser.

         5.7 Entire Agreement. This Agreement and the Exhibits hereto constitute
the full and entire understanding and agreement between the par-ties with regard
to the subjects hereof and no party shall be liable or bound to any other in any
manner by any  representations,  warranties,  covenants and agreements except as
specifically set forth herein.


<PAGE>


         IN WITNESS  WHEREOF,  the parties  have  executed  this Notes  Purchase
Agreement as of the date set forth in the first paragraph hereof.

                                      COMPANY:
                                      VERTICA SOFTWARE, INC.
                                      5801 Christie Avenue, Suite 240
                                      Emeryville, CA 94608

                                      By:
                                         ---------------------------------------
                                           Hans Nehme
                                           President and Chief Executive Officer


                                      PURCHASER:
                                      Arthur A. Gingell
                                      157 Camino Arroyo North
                                      Palm Desert, CA 92260


                                      /s/ Arthur A. Gingell
                                      ------------------------------------------
                                              Arthur A. Gingell

         21275299
         040997


<PAGE>


         IN WITNESS  WHEREOF,  the parties  have  executed  this Notes  Purchase
Agreement as of the date set forth in the first paragraph hereof.

                                      COMPANY:
                                      VERTICA SOFTWARE, INC.
                                      5801 Christie Avenue, Suite 240
                                      Emeryville, CA 94608


                                      By: /s/ Hans Nehme
                                         ---------------------------------------
                                           Hans Nehme
                                           President and Chief Executive Officer


                                      PURCHASER:
                                      Arthur A. Gingell
                                      157 Camino Arroyo North
                                      Palm Desert, CA 92260


                                          --------------------------------------
                                            Arthur A. Gingell

21275299
040997