Document:

exv10w19

 

Exhibit 10.19

AMENDED AND RESTATED VOTING AGREEMENT

     THIS AMENDED AND RESTATED VOTING AGREEMENT (the “Agreement”) is made and entered into as of
September 20, 2002, by and among DemandTec, Inc., a Delaware corporation (the “Company”), the
holders of the Company’s Series A Preferred Stock, Series B Preferred Stock and Series C Preferred
Stock (collectively, the “Preferred Stock”) listed on the Schedule of Investors attached as
Schedule A hereto (the “Investors”), and the holders of Common Stock of the Company (the
“Common Holders”) listed on the Schedule of Common Holders attached as Schedule B hereto.
The Company, the Common Holders and the Investors are individually each referred to herein as a
“Party” and are collectively referred to herein as the “Parties.” The Company’s Board of Directors
is referred to herein as the “Board.”

WITNESSETH:

     WHEREAS, the Company and certain of the Investors have entered into that certain Supplemental
Series C Preferred Stock Purchase Agreement of even date herewith (the “Purchase Agreement”), which
provides for, among other things, the purchase by certain of the Investors of shares of the
Company’s Series C Preferred Stock (the “Series C Stock”);

     WHEREAS, the Company’s Certificate of Incorporation provides that (a) holders of shares of
Common Stock, voting together as a class, shall elect two (2) members of the Board (the “Common
Directors”), (b) holders of shares of the Company’s Series B Preferred Stock (“Series B Stock”),
voting together as a class, shall elect one (1) member of the Board (the “Series B Director”), (c)
holders of shares of the Company’s Series C Stock, voting together as a class, shall elect one (1)
member of the Board (the “Series C Director”; together with the Series B Director, the “Preferred
Directors”) and (d) holders of shares of Common Stock and holders of shares of Preferred Stock,
voting together as a class, shall be entitled to elect the two (2) remaining members of the Board
(the “Industry Directors”); and

     WHEREAS, the Company, the Common Holders and certain of the Investors are parties to that
certain Amended and Restated Voting Agreement dated as of November 16, 2001 (the “Previous
Agreement”); and

     WHEREAS, to induce certain Investors to enter into the Purchase Agreement and purchase shares
of Series C Stock thereunder, the Company, the holders of shares of the Company’s Series A
Preferred Stock, Series B Stock, Series C Stock and the Common Holders desire to enter into this
Agreement with such Investors, which Agreement shall amend and restate the Previous Agreement in
its entirety;

     NOW, THEREFORE, in consideration of the foregoing premises and certain other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:

     1. Agreement to Vote. Each Investor, as a holder of Preferred Stock, hereby agrees on
behalf of itself and any transferee or assignee of any such shares of the Preferred Stock, to hold
all of the shares of Preferred Stock registered in its name (and any securities of the

 

 

Company issued with respect to, upon conversion of, or in exchange or substitution of the
Preferred Stock, and any other voting securities of the Company subsequently acquired by such
Investor) (hereinafter collectively referred to as the “Investor Shares”) subject to, and to vote
the Investor Shares at a regular or special meeting of stockholders (or by written consent) in
accordance with, the provisions of this Agreement. Each Common Holder, as a holder of Common Stock
of the Company, hereby agrees on behalf of itself and any transferee or assignee of any such shares
of Common Stock, to hold all of such shares of Common Stock and any other securities of the Company
acquired by such Common Holder in the future (and any securities of the Company issued with respect
to, upon conversion of, or in exchange or substitution for such securities) (hereinafter
collectively referred to as the “Common Holder Shares”) subject to, and to vote the Common Holder
Shares at a regular or special meeting of stockholders (or by written consent) in accordance with,
the provisions of this Agreement.

     2. Election of Directors.

          (a) In any election of directors of the Company to elect the Common Directors, the Parties
holding shares of Common Stock shall each vote at any regular or special meeting of stockholders
(or by written consent) such number of shares of Common Stock then owned by them (or as to which
they then have voting power) as may be necessary to elect two (2) directors, one of which directors
shall be the Company’s chief executive officer. Initially, such directors shall be Dan Fishback
and Mike Neal.

          (b) In any election of directors of the Company to elect the Series B Director, the Parties
holding shares of Series B Stock shall each vote at any regular or special meeting of stockholders
(or by written consent) such number of shares of Series B Stock then owned by them (or as to which
they then have voting power) as may be necessary to elect one (1) director nominated by Crosspoint
Venture Partners (“Crosspoint”). Initially, the director nominated by Crosspoint shall be James
Dorrian.

          (c) In any election of directors of the Company to elect the Series C Director, the Parties
holding shares of Series C Stock shall each vote at any regular or special meeting of stockholders
(or by written consent) such number of shares of Series C Stock then owned by them (or as to which
they then have voting power) as may be necessary to elect one (1) director nominated by Cargill
eVentures (“Cargill”). Initially, the director nominated by Cargill shall be James D. Sayre.

          (d) In any election of directors of the Company to elect the Industry Directors, the Investors
and the Common Holders shall each vote at any regular or special meeting of stockholders (or by
written consent) such number of shares of capital stock then owned by them (or as to which they
have voting power) as may be necessary to elect two (2) independent outside directors nominated and
approved by the holders of a majority of Preferred Stock then outstanding. Initially, the
directors nominated as the Industry Directors shall be Larry Lowry and Han Kim.

          (e) In the event of the resignation, death, removal or disqualification of a director selected
by Crosspoint or Cargill, as the case may be, Crosspoint or Cargill shall promptly nominate a new
director, and, after written notice of the nomination has been given by

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Crosspoint or Cargill, as the case may be, to the other parties, each Investor and Common
Holder shall promptly vote its shares of capital stock of the Company to elect such nominee to the
Board of Directors.

     3. Removal. Any director of the Company may be removed from the Board in the manner
allowed by law and the Company’s Certificate of Incorporation and Bylaws, but with respect to a
director designated pursuant to subsections 2(a), 2(b), 2(c) and 2(d) above, only upon the vote or
written consent of the stockholders entitled to designate such director.

     4. Legend on Share Certificates. Each certificate representing any Investor Shares or
Common Holder Shares shall be endorsed by the Company with a legend reading substantially as
follows:

“The Shares evidenced hereby are subject to a Voting Agreement (a
copy of which may be obtained upon written request from the issuer),
and by accepting any interest in such shares the person accepting
such interest shall be deemed to agree to and shall become bound by
all the provisions of said Voting Agreement.”

     5. Covenants of the Company. The Company agrees to use its reasonable efforts to
ensure that the rights granted hereunder are effective and that the Parties hereto enjoy the
benefits thereof. Such actions include, without limitation, the use of the Company’s reasonable
efforts to cause the nomination and election of the directors as provided above. The Company will
not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the
terms to be performed hereunder by the Company, but will at all times in good faith assist in the
carrying out of all of the provisions of this Agreement and in the taking of all such actions as
may be necessary or appropriate in order to protect the rights of the Parties hereunder against
impairment.

     6. No Liability for Election of Recommended Directors. Neither the Company, the
Common Holders, the Investors, nor any officer, director, stockholder, partner, employee or agent
of such Party, makes any representation or warranty as to the fitness or competence of the nominee
of any Party hereunder to serve on the Company’s Board by virtue of such Party’s execution of this
Agreement or by the act of such Party in voting for such nominee pursuant to this Agreement.

     7. No Revocation. The voting agreements contained herein are coupled with an interest
and may not be revoked during the term of this Agreement (or until as amended according to the
terms of this Agreement).

     8. Specific Enforcement. It is agreed and understood that monetary damages would not
adequately compensate an injured Party for the breach of this Agreement by any Party, that this
Agreement shall be specifically enforceable, and that any breach or threatened breach of this
Agreement shall be the proper subject of a temporary or permanent injunction or restraining order.
Further, each Party hereto waives any claim or defense that there is an adequate remedy at law for
such breach or threatened breach.

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     9. Execution by the Company. The Company, by its execution in the space provided
below, agrees that it will cause the certificates evidencing the shares of Common Stock and
Preferred Stock to bear the legend required by Section 4 herein, and it shall supply, free of
charge, a copy of this Agreement to any holder of a certificate evidencing shares of capital stock
of the Company upon written request from such holder to the Company at its principal office. The
parties hereto do hereby agree that the failure to cause the certificates evidencing the shares of
Common Stock and Preferred Stock to bear the legend required by Section 4 herein and/or failure of
the Company to supply, free of charge, a copy of this Agreement as provided under this Section 9
shall not affect the validity or enforceability of this Agreement.

     10. Captions. The captions, headings and arrangements used in this Agreement are for
convenience only and do not in any way limit or modify the terms and provisions hereof.

     11. Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be sent prepaid registered or certified mail, return receipt requested, addressed to the
other Party at the address shown below or at such other address for which such Party gives notice
hereunder. Such notice shall be deemed to have been given three (3) days after deposit in the
mail.

     12. Term. This Agreement shall terminate and be of no further force or effect upon
the earlier of (a) the consummation of the Company’s sale of its Common Stock or other securities
pursuant to a bona fide, firmly underwritten public offering of such shares of Common Stock
pursuant to a registration filed on Form S-1 or Form SB-2 under the Securities Act of 1933, as
amended, (b) the closing of the Company’s sale of all or substantially all of its assets, or (c)
the acquisition of the Company by another entity by means of merger, consolidation or other
transaction or series of related transactions resulting in (x) the transfer of fifty percent (50%)
or more of the outstanding voting power of the Company or (y) the stockholders of the Company
immediately prior to such transaction or series of related transactions owning less than fifty
percent (50%) of the outstanding voting power of the Company immediately after such transaction or
series of related transactions.

     13. Manner of Voting. The voting of shares pursuant to this Agreement may be effected
in person, by proxy, by written consent, or in any other manner permitted by applicable law.

     14. Amendments and Waivers. Any term hereof may be amended and the observance of any
term hereof may be waived (either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of (a) the holders of a majority of the shares of
Common Stock (not including shares of Common Stock issued upon conversion of Preferred Stock) held
by parties to this Agreement and (b) the holders of a majority of the shares of Common Stock
issuable or issued upon conversion of Preferred Stock held by parties to this Agreement; provided,
however, that the written consent of Crosspoint shall be necessary for any amendment or waiver of
Section 2(b) regarding Crosspoint, and the written consent of Cargill shall be necessary for any
amendment or waiver of Section 2(c) regarding Cargill. Any amendment or waiver so effected shall
be binding upon all the Parties hereto.

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     15. Stock Splits, Stock Dividends, etc. In the event of any issuance of shares of the
Company’s voting securities hereafter to any of the Parties hereto (including, without limitation,
in connection with any stock split, stock dividend, recapitalization, reorganization, or the like),
such shares shall become subject to this Agreement and shall be endorsed with the legend set forth
in Section 4.

     16. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.

     17. Binding Effect. In addition to any restriction on transfer that may be imposed by
any other agreement by which any Party hereto may be bound, this Agreement shall be binding upon
the Parties, their respective heirs, successors and assigns and to such additional individuals or
entities that may become stockholders of the Company and that desire to become Parties hereto;
provided that for any such transfer to be deemed effective, the transferee shall have executed and
delivered an Adoption Agreement substantially in the form attached hereto as Exhibit A.
Upon the execution and delivery of an Adoption Agreement by any transferee reasonably acceptable to
the Company, such transferee shall be deemed to be a Party hereto as if such transferee’s signature
appeared on the signature pages hereto. By their execution hereof or any Adoption Agreement, each
of the Parties hereto appoints the Company as its attorney-in-fact for the purpose of executing any
Adoption Agreement that may be required to be delivered hereunder.

     18. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to conflicts of law principles thereof.

     19. Entire Agreement. This Agreement is intended to be the sole agreement of the
Parties as it relates to this subject matter and does hereby supersede all other agreements of the
Parties relating to the subject matter hereof.

     20. 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.

[Signature Page Next]

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     IN WITNESS WHEREOF, the Parties have executed this Amended and Restated Voting Agreement as of
the date first above written.

	 	 	 	 	 
	 	DEMANDTEC, INC.

 	 
	 	By:  	/s/ Dan Fishback
 	 
	 	 	Dan Fishback, President and Chief 	 
	 	 	        Executive Officer 	 
	 

	 	 	 
	 Address:

	 	One Circle Star Way, Suite 200

San Carlos, CA 94070

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED
VOTING AGREEMENT

 

 

	 	 	 
	 

	 	INVESTOR:
	 
	 	 
	 

	 	CROSSPOINT VENTURE PARTNERS 2000, L.P.

By: Crosspoint Associates 2000, L.L.C.

Its: General Partner
	 
	 	 
	 

	 	By:/s/ James Dorrian
	 

	 	 
	 
	 	 
	Address:

	 	2925 Woodside Road

Woodside, California 94062
	 
	 	 
	 

	 	CROSSPOINT VENTURE PARTNERS 2000 (Q), L.P.

By: Crosspoint Associates 2000, L.L.C.

Its: General Partner
	 
	 	 
	 

	 	By:/s/ James Dorrian
	 

	 	 
	 
	 	 
	Address:

	 	2925 Woodside Road

Woodside, California 94062

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED
VOTING AGREEMENT

 

 

	 	 	 	 	 
	 	

INVESTOR:

CARGILL, INCORPORATED

 	 
	 	By:  	/s/ James Sayre
 	 
	 	 	President, Cargill Ventures 	 
	 	 	 	 
	 

	 	 	 
	 Address:

	 	1500 Fashion Island Blvd, Suite 209

San Mateo, Ca 94404

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED
VOTING AGREEMENT

 

 

	 	 	 	 	 
	 	INVESTOR:

ALTOS VENTURES

 	 
	 	By:  	/s/ Han J. Kim
 	 
	 	 	General Partner 	 
	 	 	 	 
	 

	 	 	 
	 Address:

	 	2882 Sand Hill Road, Suite 100

Menlo Park, California 94025

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED
VOTING AGREEMENT

 

 

	 	 	 	 	 
	 	INVESTOR:

ATHENA VENTURE FUND LP

 	 
	 	By:  	/s/ Steven Lee
 	 
	 	 	Principal 	 
	 	 	 	 
	 

	 	 	 
	 Address:

	 	310 University Avenue, Suite 202

Palo Alto, California 94301

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED
VOTING AGREEMENT

 

 

	 	 	 	 	 
	 	INVESTOR:

Homer and Marcia Dunn

 	 
	 	/s/ Homer Dunn
 	 
	 	 	 
	 	 	 
	 

	 	 	 
	Address:

	 	1190 Sacramento Street

San Francisco, CA 94108

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED
VOTING AGREEMENT

 

 

	 	 	 
	 

	 	INVESTOR:
	 
	 	 
	 

	 	Moldaw Variable Fund
	 
	 	 
	 

	 	By: /s/ Stuart G. Moldaw
	 

	 	 
	 

	 	General Partner
	 
	 	 
	Address:

	 	c/o Gymboree

Attn: Stuart Moldaw

700 Airport Blvd., Suite# 200

Burlingame, CA 94010

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED
VOTING AGREEMENT

 

 

	 	 	 
	 

	 	INVESTOR:
	 
	 	 
	 

	 	GC&H Investments
	 
	 	 
	 

	 	By: /s/ Andrei M. Manoliu
	 

	 	 
	 

	 	Executive Partner
	 
	 	 
	Address:

	 	c/o Cooley Godward

5 Palo Alto Square

3000 El Camino Real

Palo Alto, CA 94306

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED
VOTING AGREEMENT

 

 

	 	 	 
	 

	 	INVESTOR:
	 
	 	 
	 

	 	WS Investments Co 99B
	 
	 	 
	 

	 	By: /s/ Aaron Alter
	 

	 	 
	 
	 	 
	Address:

	 	c/o Wilson Sonsini Goodrich & Rosati

650 Page Mill Road

Palo Alto, CA 94304

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED
VOTING AGREEMENT

 

 

	 	 	 
	 

	 	INVESTOR:
	 
	 	 
	 

	 	Storm Duncan
	 
	 	 
	 

	 	/s/ Storm Duncan
	 

	 	 
	 
	 	 
	Address:

	 	21 Mallorca Way

San Francisco, CA 94123

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED
VOTING AGREEMENT

 

 

	 	 	 
	 

	 	INVESTOR:
	 
	 	 
	 

	 	Howard Park
	 
	 	 
	 

	 	/s/ Howard Park
	 

	 	 
	 
	 	 
	Address:

	 	289 29th Avenue

San Francisco, CA 94121

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED
VOTING AGREEMENT

 

 

	 	 	 
	 

	 	INVESTOR:
	 
	 	 
	 

	 	Gerard Cunningham
	 
	 	 
	 

	 	/s/ Gerard Cunningham
	 

	 	 
	 
	 	 
	 Address:

	 	208 Third Street

Sausalito, CA 94965

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED
VOTING AGREEMENT

 

 

	 	 	 
	 

	 	INVESTOR:
	 
	 	 
	 

	 	Richard Arnold
	 
	 	 
	 

	 	/s/ Richard Arnold, Jr.
	 

	 	 
	 
	 	 
	 Address:

	 	 c/o Wilson Sonsini Goodrich & Rosati

650 Page Mill Road

Palo Alto, CA 94304

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED
VOTING AGREEMENT

 

 

	 	 	 
	 

	 	INVESTOR:
	 
	 	 
	 

	 	Aaron Alter
	 
	 	 
	 

	 	/s/ Aaron Alter
	 

	 	 
	 
	 	 
	 Address:

	 	 c/o Wilson Sonsini Goodrich & Rosati

650 Page Mill Road

Palo Alto, CA 94304

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED
VOTING AGREEMENT

 

 

	 	 	 	 	 	 	 
	 

	 	 	 	INVESTOR:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Jamie Stewart	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Jamie Stewart
	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	c/o Wilson Sonsini Goodrich & Rosati	 	 
	 

	 	 	 	650 Page Mill Road	 	 
	 

	 	 	 	Palo Alto, CA 94304	 	 

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED

VOTING AGREEMENT

 

 

	 	 	 	 	 	 	 
	 

	 	 	 	INVESTOR:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Larry Lowry	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Larry Lowry
 

	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	137 Stockbridge Avenue	 	 
	 

	 	 	 	Atherton, CA 94027	 	 

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED

VOTING AGREEMENT

 

 

	 	 	 	 	 	 	 
	 

	 	 	 	INVESTOR:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Hartwig Huemer	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Hartwig Huemer
 

	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	7945 Almor Drive	 	 
	 

	 	 	 	Verona, WI 53593	 	 

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED

VOTING AGREEMENT

 

 

	 	 	 	 	 	 	 
	 

	 	 	 	INVESTOR:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Gary Davis	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Gary Davis
 

	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	263 29th Avenue	 	 
	 

	 	 	 	San Francisco, CA 94121	 	 

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED

VOTING AGREEMENT

 

 

	 	 	 	 	 	 	 
	 	 	INVESTOR:	 	 
	 
	 	 	 	 	 	 
	 	 	G&H Partners	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jonathan Gleason
 

	 	 
	 
	 	 	 	 	 	 
	Address:	 	c/o Gunderson Dettmer	 	 
	 	 	155 Constitution Drive	 	 
	 	 	Menlo Park, CA 94025	 	 

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED

VOTING AGREEMENT

 

 

	 	 	 	 	 	 	 
	 

	 	 	 	INVESTOR:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Dan Fishback	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Dan Fishback
 

	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Address:

	 	 	 	c/o DemandTec, Inc.	 	 
	 

	 	 	 	One Circle Star Way, #200	 	 
	 

	 	 	 	San Carlos, CA 94070	 	 

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED

VOTING AGREEMENT

 

 

	 	 	 	 	 	 	 
	 

	 	 	 	INVESTOR:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Andy Moss	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Andy Moss
 

	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Address:

	 	 	 	c/o DemandTec, Inc.	 	 
	 

	 	 	 	One Circle Star Way, #200	 	 
	 

	 	 	 	San Carlos, CA 94070	 	 

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED

VOTING AGREEMENT

 

 

	 	 	 	 	 	 	 
	 

	 	 	 	INVESTOR:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	John Shap	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ John Shap
 

	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Address:

	 	 	 	c/o DemandTec, Inc.	 	 
	 

	 	 	 	One Circle Star Way, #200	 	 
	 

	 	 	 	San Carlos, CA 94070	 	 

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED

VOTING AGREEMENT

 

 

	 	 	 	 	 
	 	 	INVESTOR:
	 
	 	 	 	 
	 	 	Mark A. Culhane and Michele L. Culhane
	 	 	Trustees UTA dtd, 12/16/99
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark Culhane
	 

	 	 	 	 
	 

	 	 	 	Trustee
	 
	 	 	 	 
	 	 	USB Piper Jaffray as custodian FBO
	 	 	Mark Culhane IRA 120 224946
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark Culhane
	 

	 	 	 	 
	 

	 	 	 	Trustee
	 
	 	 	 	 
	 	 	Maxwell A.R. Culhane 1999 Irrevocable Trust
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark Culhane
	 

	 	 	 	 
	 

	 	 	 	Trustee
	 
	 	 	 	 
	 	 	Monica G. Culhane 1999 Irrevocable Trust
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark Culhane
	 

	 	 	 	 
	 

	 	 	 	Trustee
	 
	 	 	 	 
	 	 	Michael D. Culhane 1999 Irrevocable Trust
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark Culhane
	 

	 	 	 	 
	 

	 	 	 	Trustee
	 
	 	 	 	 
	Address:	 	c/o DemandTec, Inc.
	 	 	One Circle Star Way, #200
	 	 	San Carlos, CA 94070

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED

VOTING AGREEMENT

 

 

	 	 	 	 	 	 	 
	 

	 	 	 	INVESTOR:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Phil Mahoney	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Phil Mahoney
 

	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	12100 Foothill Lane	 	 
	 

	 	 	 	Los Altos Hills, CA 94022	 	 

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED

VOTING AGREEMENT

 

 

	 	 	 	 	 
	 	 	INVESTOR:
	 
	 	 	 	 
	 	 	Eleven Rings, LLC
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Harris Barton
	 

	 	 	 	 
	 

	 	 	 	Managing Member

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED

VOTING AGREEMENT

 

 

	 	 	 	 	 
	 	 	INVESTOR:
	 
	 	 	 	 
	 	 	NONSTOP Solutions, Inc.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ [illegible]
	 

	 	 	 	 

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED

VOTING AGREEMENT

 

 

	 	 	 	 	 
	 

	 	COMMON HOLDERS:

	 
	 	 	 	 
	 

	 	By:
	 	/s/ Michael Neal
	 

	 	 	 	 
	 

	 	 	 	Michael Neal
	 
	 	 	 	 
	Address:	 	c/o DemandTec, Inc.
	 	 	One Circle Star Way, #200
	 	 	San Carlos, CA 94070
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Hau Lee
	 

	 	 	 	 
	 

	 	 	 	Hau Lee
	 
	 	 	 	 
	Address:	 	c/o DemandTec, Inc.
	 	 	One Circle Star Way, #200
	 	 	San Carlos, CA 94070
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Scott Molinaroli
	 

	 	 	 	 
	 

	 	 	 	Scott Molinaroli
	 
	 	 	 	 
	Address:	 	c/o DemandTec, Inc.
	 	 	One Circle Star Way, #200
	 	 	San Carlos, CA 94070

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED

VOTING AGREEMENT

 

 

	 	 	 	 	 
	 	 	COMMON HOLDERS:
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Dan Fishback
	 

	 	 	 	 
	 

	 	 	 	Dan Fishback
	 
	 	 	 	 
	Address:	 	c/o DemandTec, Inc.
	 	 	One Circle Star Way, #200
	 	 	San Carlos, CA 94070
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Phil Delurgio
	 

	 	 	 	 
	 

	 	 	 	Phil Delurgio
	 
	 	 	 	 
	Address:	 	c/o DemandTec, Inc.
	 	 	One Circle Star Way, #200
	 	 	San Carlos, CA 94070

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED

VOTING AGREEMENT

 

 

	 	 	 	 	 
	 	 	COMMON HOLDERS:
	 
	 	 	 	 
	 	 	Mark A. Culhane and Michele L. Culhane
	 	 	Trustees UTA dtd, 12/16/99
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark Culhane
	 

	 	 	 	 
	 

	 	 	 	Trustee
	 
	 	 	 	 
	 	 	USB Piper Jaffray as custodian FBO
	 	 	Mark Culhane IRA 120 224946
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark Culhane
	 

	 	 	 	 
	 

	 	 	 	Trustee
	 
	 	 	 	 
	 	 	Maxwell A.R. Culhane 1999 Irrevocable Trust
	 

	 	By:
	 	/s/ Mark Culhane
	 

	 	 	 	 
	 

	 	 	 	Trustee
	 
	 	 	 	 
	 	 	Monica G. Culhane 1999 Irrevocable Trust
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark Culhane
	 

	 	 	 	 
	 

	 	 	 	Trustee
	 
	 	 	 	 
	 	 	Michael D. Culhane 1999 Irrevocable Trust
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark Culhane
	 

	 	 	 	 
	 
	 	 	 	Trustee
	 
	Address:	 	c/o DemandTec, Inc.
	 	 	One Circle Star Way, #200
	 	 	San Carlos, CA 94070

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED

VOTING AGREEMENT

 

 

	 	 	 	 	 
	 	 	COMMON HOLDERS:
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Andy Moss
	 

	 	 	 	 
	 

	 	 	 	Andy Moss
	 
	 	 	 	 
	Address:	 	c/o DemandTec, Inc.
	 	 	One Circle Star Way, #200
	 	 	San Carlos, CA 94070
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John Shap
	 

	 	 	 	 
	 

	 	 	 	John Shap
	 
	 	 	 	 
	Address:	 	c/o DemandTec, Inc.
	 	 	One Circle Star Way, #200
	 	 	San Carlos, CA 94070

SIGNATURE PAGE TO THE DEMANDTEC, INC. AMENDED AND RESTATED

VOTING AGREEMENT

 

 

SCHEDULE A

LIST OF INVESTORS

Aaron J. Alter

Altos Ventures

Altos Ventures II, LP

Andy Moss

Athena Technology Ventures

Athena Venture Fund, L.P.

Cargill, Incorporated

Crosspoint Venture Partners 2000 (Q), L.P.

Crosspoint Venture Partners 2000, L.P.

Dan Fishback

Eleven Rings, LLC

G&H Partners

Gary S. Davis

GC&H Investments

Gerard Cunningham

Hartwig Huemer

Homer and Marcia Dunn

Howard C. Park

John Shap

Jamie Stewart

Larry Lowry

Moldaw Variable Fund

Mark A. Culhane and Michele L. Culhane, Trustees UTA dated 12/16/99

USB Piper Jaffray as custodian FBO Mark Culhane IRA 120 224946

Maxwell A. R. Culhane 1999 Irrevocable Trust

Monica G. Culhane 1999 Irrevocable Trust

Michael D. Culhane 1999 Irrevocable Trust

NONSTOP Solutions, Inc.

Phil Mahoney

Richard S. Arnold, Jr.

Storm Duncan

WS Investment Company 99B

 

 

SCHEDULE B

LIST OF COMMON HOLDERS:

Michael Neal

Hau Lee

Scott Molinaroli

Philip Delurgio

Dan Fishback

Mark Culhane

Andy Moss

John Shap

 

 

EXHIBIT A

ADOPTION AGREEMENT

          This Adoption Agreement (“Adoption Agreement”) is executed by the undersigned (the
“Transferee”) pursuant to the terms of that certain Amended and Restated Voting Agreement dated as
of September 20, 2002 (the “Agreement”) by and among the Company and certain of its Stockholders.
Capitalized terms used but not defined herein shall have the respective meanings ascribed to such
terms in the Agreement. By the execution of this Adoption Agreement, the Transferee agrees as
follows:

          (a) Acknowledgment. Transferee acknowledges that Transferee is acquiring certain
shares of the capital stock of the Company (the “Stock”), subject to the terms and conditions of
the Agreement.

          (b) Agreement. Transferee (i) agrees that the Stock acquired by Transferee shall be
bound by and subject to the terms of the Agreement, and (ii) hereby adopts the Agreement with the
same force and effect as if Transferee were originally a Party thereto.

          (c) Notice. Any notice required or permitted by the Agreement shall be given to
Transferee at the address listed beside Transferee’s signature below.

          EXECUTED
AND DATED this
                     day of                     ,                   .

	 	 	 	 	 
	 	TRANSFEREE:

 	 
	 	By:  	 	 
	 	 	Name and Title 	 
	 	 	 	 
	 

	 	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Fax:	 	 	 	 
	 

	 	 	 	 

	 	 

Accepted and Agreed:

DEMANDTEC, INC.

	 	 	 	 	 
	By:
	 	 	 	 
	Title:exv10w22

 

Exhibit 10.22

 

 

THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

between

SILICON VALLEY BANK

and

DEMANDTEC, INC.

May 23, 2006

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	1.	 	ACCOUNTING AND OTHER TERMS	1
	2.	 	LOAN AND TERMS OF PAYMENT	2
	 
	 	2.1	 	Promise to Pay	 	2
	 
	 	 	 	2.1.1                          Revolving Advances	 	2
	 
	 	 	 	2.1.2                           Cash Management Services Sublimit	 	3
	 
	 	 	 	2.1.3                          Letters of Credit Sublimit	 	3
	 
	 	 	 	2.1.4                          Foreign Exchange Sublimit	 	3
	 
	 	 	 	2.1.5                          International Services Sublimit	 	3
	 
	 	2.2	 	Overadvances	 	3
	 
	 	2.3	 	Interest Rate, Payments	 	4
	 
	 	2.4	 	Fees	 	4
	3.	 	CONDITIONS OF LOANS 	5
	 
	 	3.1	 	Conditions Precedent to Initial Credit Extension	 	5
	 
	 	3.2	 	Conditions Precedent to all Credit Extensions	 	5
	4.	 	CREATION OF SECURITY INTEREST	5
	 
	 	4.1	 	Grant of Security Interest	 	5
	 
	 	4.2	 	Authorization to File	 	5
	5.	 	REPRESENTATIONS AND WARRANTIES	5
	 
	 	5.1	 	Due Organization and Authorization	 	5
	 
	 	5.2	 	Collateral	 	6
	 
	 	5.3	 	Litigation	 	6
	 
	 	5.4	 	No Material Adverse Change in Financial Statements	 	6
	 
	 	5.5	 	Solvency	 	7
	 
	 	5.6	 	Regulatory Compliance	 	7
	 
	 	5.7	 	Subsidiaries	 	7
	 
	 	5.8	 	Full Disclosure	 	7
	6.	 	AFFIRMATIVE COVENANTS	7
	 
	 	6.1	 	Government Compliance	 	8
	 
	 	6.2	 	Financial Statements, Reports, Certificates	 	8

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 
	 	6.3	 	Inventory; Returns	 	9
	 
	 	6.4	 	Taxes	 	9
	 
	 	6.5	 	Insurance	 	9
	 
	 	6.6	 	Primary Accounts	 	9
	 
	 	6.7	 	Registration of Intellectual Property Rights	 	9
	 
	 	6.8	 	Use of Proceeds	 	10
	 
	 	6.9	 	Further Assurances	 	10
	7.	 	NEGATIVE COVENANTS	10
	 
	 	7.1	 	Dispositions	 	10
	 
	 	7.2	 	Changes in Business, Ownership, Management	 	10
	 
	 	 	 	or Locations of Collateral	 	 
	 
	 	7.3	 	Mergers or Acquisitions	 	11
	 
	 	7.4	 	Indebtedness	 	11
	 
	 	7.5	 	Encumbrance	 	11
	 
	 	7.6	 	Distributions; Investments	 	11
	 
	 	7.7	 	Transactions with Affiliates	 	11
	 
	 	7.8	 	Subordinated Debt	 	12
	 
	 	7.9	 	Compliance	 	12
	8.	 	EVENTS OF DEFAULT	12
	 
	 	8.1	 	Payment Default	 	12
	 
	 	8.2	 	Covenant Default	 	12
	 
	 	8.3	 	Material Adverse Change	 	13
	 
	 	8.4	 	Attachment	 	13
	 
	 	8.5	 	Insolvency	 	13
	 
	 	8.6	 	Other Agreements	 	13
	 
	 	8.7	 	Judgments	 	13
	 
	 	8.8	 	Misrepresentations	 	13
	9.	 	BANK’S RIGHTS AND REMEDIES	14
	 
	 	9.1	 	Rights and Remedies	 	14
	 
	 	9.2	 	Power of Attorney	 	14
	 
	 	9.3	 	Bank Expenses	 	15

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 
	 	9.4	 	Bank’s Liability for Collateral	 	15
	 
	 	9.5	 	Remedies Cumulative	 	15
	 
	 	9.6	 	Demand Waiver	 	15
	10.	 	NOTICES	15
	11.	 	CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER	16
	12.	 	GENERAL PROVISIONS	16
	 
	 	12.1	 	Successors and Assigns	 	16
	 
	 	12.2	 	Indemnification	 	16
	 
	 	12.3	 	Time of Essence	 	16
	 
	 	12.4	 	Severability of Provision	 	16
	 
	 	12.5	 	Amendments in Writing, Integration	 	17
	 
	 	12.6	 	Counterparts	 	17
	 
	 	12.7	 	Survival	 	17
	 
	 	12.8	 	Confidentiality	 	17
	 
	 	12.9	 	Attorneys’ Fees, Costs and Expenses	 	17
	13.	 	DEFINITIONS	18
	 
	 	13.1	 	Definitions	 	18

 

 

This THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT dated as of the Effective Date, between SILICON VALLEY BANK (“Bank”), whose address is 3003
Tasman Drive, Santa Clara, California 95054 and DEMANDTEC, INC. (“Borrower”), whose address is
One Circle Star Way, Suite 200, San Carlos, California 94070, provides the terms on which Bank
will lend to Borrower and Borrower will repay Bank. The parties agree as follows:

RECITALS:

     A. The Bank and the Borrower have previously entered into that certain Loan and
Security Agreement dated as of October 23, 2001, which was amended and restated in its
entirety pursuant to that certain Amended and Restated Loan and Security Agreement dated as
of July 25, 2003, as amended by that certain Loan Modification Agreement dated as of November
2003, which was amended and restated in its entirety pursuant to that certain Second Amended
and Restated Loan and Security Agreement dated as of May 2, 2005 (as such agreement was
further amended from time to time, the “Original Credit Agreement”).

     B. The Original Credit Agreement provided for the making of a term loan in the
amount of $3,000,000 (the “Original Term Loan”) and a revolving credit loan in the
amount of up to $2,500,000 (the “Original Revolving Loan”).

     C. Immediately prior to the amendment and restatement of the Original Credit
Agreement in accordance with the terms and conditions hereof, the following original loans
remain outstanding under the Original Credit Agreement; (i) with respect to the Original Term
Loan, $1,979,037.61 in aggregate principal and $8,311.96 of interest and (ii) with respect to
the Original Revolving Loan, $0 in aggregate principal and $0 of interest.

     D. Advances (as defined below) made on the date hereof pursuant to this Agreement
will be applied to pay off the Original Term Loan in full.

     E. It is not the intention of the Bank or the Borrower that this Agreement constitute a
novation of the indebtedness governed by the Original Credit Agreement, and from and after
the Effective Date, the Original Credit Agreement shall be amended and restated in its entirety
in accordance with the terms and provisions hereof.

     E. The Bank and the Borrower desire to amend the terms and conditions of the Original Credit
Agreement to, among other things, reflect an increase in the Committed Revolving Line (as defined
below).

	1.	 	ACCOUNTING AND OTHER TERMS.

     Accounting terms not defined in this Agreement will 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.

 

 

2.LOAN AND TERMS OF PAYMENT.

2.1 Promise to Pay.

     Borrower will pay Bank the unpaid principal amount of all Credit Extensions and interest on
the unpaid principal amount of the Credit Extensions.

	2.1.1	 	Revolving Advances.

     (a) Bank will make Advances to Borrower not exceeding the lesser of: (x) the
Committed Revolving Line or (y) an amount equal to the sum of:

(i) up to 80% of Eligible Receivables, plus

(ii)(I) if Adjusted Quick Ratio is greater than 1.50:1.00,
$3,000,000 or (2) if Adjusted Quick Ratio is equal to or less than
1.50:1,00, $0, minus

(iii) the aggregate amount outstanding under the Cash Management Services
Sublimit, International Services Sublimit, FX Reserve and Letters of Credit,
and minus

(iv) such reserves as Bank may deem proper and necessary from time to time
(the “Borrowing Base”).

     Amounts borrowed under this Section may be repaid and reborrowed during the term of
this Agreement.

     (b) To obtain an Advance, Borrower must notify Bank by facsimile or telephone by 12:00
noon Pacific time on the Business Day the Advance is to be made. Borrower must promptly confirm
the notification by delivering to Bank the Payment/Advance Form attached as Exhibit B. Bank
will credit Advances to Borrower’s deposit account. Bank may make Advances under this Agreement
based on instructions from a Responsible Officer or his or her designee or without instructions
if the Advances are necessary to meet Obligations which have become due. Bank may rely on any
telephone notice given by a person whom Bank believes is a Responsible Officer or designee.
Borrower will indemnify Bank for any loss Bank suffers due to such reliance.

     (c) The Committed Revolving Line terminates on the Revolving Maturity Date, when all
Advances are immediately payable.

     (d) Notwithstanding anything contained herein, Borrower acknowledges and
agrees that on and as of the Closing Date, the outstanding principal amount and accrued
interest of the Original Revolving Loan then outstanding shall be refinanced and converted
into Advances contemplated hereby.

 

 

     (e) Amounts borrowed pursuant to this Section 2 may be prepaid without
premium or penalty and the Committed Revolving Line closed without premium or penalty.

2.1.2
Cash Management Services Sublimit.

     Borrower may use up to $1,000,000 of the Committed Revolving Line, minus the amounts
outstanding under the International Services Sublimit, FX Reserve and Letters of Credit for Bank’s
cash management services, which may include merchant services, direct deposit of payroll, business
credit card, check cashing services identified in various cash management services agreements
related to such services (the “Cash Management Services”). All amounts Bank pays for any
Cash Management Services will be treated as Advances under the Committed Revolving Line.

2.1.3 Letters of Credit Sublimit.

     Bank may issue Letters of Credit for Borrower’s account not exceeding $1,000,000 minus the
amounts outstanding under the Cash Management Sublimit, International Services Sublimit and FX
Reserve. Each Letter of Credit will have an expiry date of no later than thirty days prior to the
Revolving Maturity Date, but Borrower’s reimbursement obligation will be secured by unencumbered
cash on terms acceptable to Bank at any time upon the Revolving Maturity Date if the term of this
Agreement is not extended by Bank. Borrower agrees to execute any further documentation in
connection with the Letters of Credit as Bank may reasonably request.

2.1.4 Foreign Exchange Sublimit.

     Borrower may enter in foreign exchange forward contracts with the Bank under which Borrower
commits to purchase from or sell to Bank a set amount of foreign currency more than one business
day after the contract date (the “FX Forward Contract”). Bank will subtract 10% of each
outstanding FX Forward Contract from the foreign exchange sublimit which is a maximum of
$1,000,000, minus the amounts outstanding under the Cash Management Services Sublimit,
International Services Sublimit and Letters of Credit (the “FX Reserve”). The total FX
Forward Contracts at any one time may not exceed 10 times the amount of the FX Reserve. Bank may
terminate the FX Forward Contracts if an Event of Default occurs.

2.1.5 International Services Sublimit.

     Borrower may use up to $1,000,000 of the Committed Revolving Line, minus the amounts
outstanding under the Cash Management Services Sublimit, FX Reserve and Letters of Credit (the
“International Services Sublimit”), for Bank’s international management services, which may
include foreign exchange contracts and export letters of credit.

2.2 Overadvances.

     If at any time (i) Borrower’s Obligations under Sections 2.1.1, 2.1.2, 2.1.3, 2.1.4 and
2.1.5 exceed the Committed Revolving Line or the Borrowing Base, (ii) Borrower’s Obligations

 

 

under Sections 2.1.2, 2.1.3, 2.1.4 and 2.1.5 exceed $1,000,000 or (iii) Advances made on
Foreign Eligible Accounts exceed $1,500,000, then Borrower must
immediately pay Bank the excess.

2.3 Interest Rate, Payments.

     (a) Interest Kate. Advances accrue interest on the outstanding principal
balance at a per annum rate equal to the greater of (i) 0.50 percentage points above the
Prime Rate or (ii) 8%. During the Trigger Period, Advances will accrue interest on the
outstanding principal balance at a per annum rate equal to
2 percentage points above the Prime Kate.
After an Event of Default, Obligations accrue interest at 5 percent above the rate
effective immediately before the Event of Default. The interest rate increases or decreases when
the Prime Rate changes. Interest is computed on a 360 day year for the actual number of days
elapsed.

     (b) Payments, Interest due on the Committed Revolving Line is payable on the last day of
each month. Bank may debit any of Borrower’s deposit accounts including Account Number
3300337567 for principal and interest payments or any amounts Borrower owes Bank when due. Bank
will notify Borrower when it debits Borrower’s accounts. These debits are not a set-off.
Payments received after 12:00 noon Pacific time are considered received at the opening of
business on the next Business Day. When a payment is due on a day that is not a Business Day,
the payment is due the next Business Day and additional fees or interest accrue.

     (c) Minimum Monthly Interest. If the aggregate amount of all interest earned by Bank in any
month is less than the amount of interest Bank would have earned if the outstanding principal
balance of Advances were $2,000,000 for any such month in the first year of this Agreement (the
“Minimum Monthly Interest”), Borrower shall pay Bank an amount, payable on the last day of such
month, in an amount equal to the (i) Minimum Monthly Interest minus (ii) the aggregate amount of
all interest earned by Bank (exclusive of any collateral monitoring fees, unused line fees, or
any other fees and charges hereunder) in such month.

     (d) Trigger Period. During a Trigger Period, (i) all proceeds of Accounts and other cash
collections shall be deposited by Borrower into a lockbox account as Bank may specify and (ii)
Bank will sweep all accounts of Borrower on a daily basis and apply all such cash to repay the
Advances.

2.4
Fees. Borrower will pay:

     (a) Bank Expenses. All Bank Expenses (including reasonable attorneys’ fees and reasonable
expenses) incurred through and after the date of this Agreement, are payable when due.

     (b) Loan Fee. Borrower will pay to Bank a loan fee in the amount of $35,000 (the “Loan
Fee”); provided however, if no Credit Extensions are made due to the sole
fault of the Bank, Bank will refund the Loan Fee to Borrower.

 

 

     (c) Anniversary Fee. On the first anniversary of this Agreement, Borrower
will pay to bank an anniversary fee of $30,000.

3. CONDITIONS OF LOANS

3.1 Conditions Precedent to Initial Credit Extension.

     Bank’s obligation to make the initial Credit Extension is subject to the condition precedent
that it receive the agreements, documents and fees it requires.

3.2 Conditions Precedent to all Credit Extensions.

     Bank’s obligations to make each Credit Extension, including the initial Credit Extension, is
subject to the following:

     (a) timely receipt of any Payment/Advance Form;

     (b) timely receipt of a Transaction Report; and

     (c) the representations and warranties in Section 5 must be materially true on the date of
the Payment/Advance Form and on the effective date of each Credit Extension and no Event of
Default may have occurred and be continuing, or result from the Credit Extension. Each Credit
Extension is Borrower’s representation and warranty on that date that the representations and
warranties of Section 5 remain materially true.

4. CREATION OF SECURITY INTEREST

4.1 Grant of Security Interest.

     Borrower grants Bank a continuing security interest in all presently existing and later
acquired Collateral to secure all Obligations and performance of each of Borrower’s duties under
the Loan Documents. Except for Permitted Liens, any security interest will be a first priority
security interest in the Collateral. If this Agreement is terminated, Bank’s lien and security
interest in the Collateral will continue until Borrower fully satisfies its Obligations.

4.2 Authorization to File.

     Borrower authorizes Bank to file financing statements without notice to Borrower, with all
appropriate jurisdictions, as Bank deems appropriate, in order to perfect or protect Bank’s
interest in the Collateral.

5. REPRESENTATIONS AND WARRANTIES

     Borrower represents and warrants as follows:

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 has not changed its state of formation or its organizational structure or type
or any organizational number (if any) assigned by its jurisdiction of formation.

     The execution, delivery and performance of the Loan Documents have been duly authorized,
and do not conflict with Borrower’s formation 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 or Borrower
has Rights to each asset that is Collateral. Borrower has no other deposit account, other than the
deposit accounts described in the Schedule. The Accounts are bona fide, existing obligations, and
the service or property has been performed or delivered to the account debtor or its agent for
immediate shipment to and unconditional acceptance by the account debtor. Except for certain
computer hardware installed off-site at the facilities of Borrower’s customers, the Collateral is
not in the possession of any third party bailee (such as at a warehouse). In the event that
Borrower, after the date hereof, intends to store or otherwise deliver the Collateral to such a
bailee, then Borrower will receive the prior written consent of Bank and such bailee must
acknowledge in writing that the bailee is holding such Collateral for the benefit of Bank. Borrower
has no notice of any actual or imminent Insolvency Proceeding of any account debtor whose accounts
are an Eligible Account in any Borrowing Base Certificate. All Inventory is in all material
respects of good and marketable quality, free from material defects. Borrower is the sole owner of
the Intellectual Property, except for non-exclusive licenses granted to its customers in the
ordinary course of business. To the Borrower’s knowledge, each Patent is valid and enforceable
and no part of the Intellectual Property has been judged invalid or unenforceable, in whole or in
part, and no claim has been made that any part of the Intellectual Property violates the rights of
any third party, except to the extent such claim could not reasonably be expected to cause a
Material Adverse Change.

5.3 Litigation.

     Except as shown to the Schedule, there are no actions or proceedings pending or, to the
knowledge of Borrower’s Responsible Officers and legal counsel, threatened by or against
Borrower or any Subsidiary in which a likely adverse decision could reasonably be expected to
cause a Material Adverse Change.

5.4 No Material Adverse Change 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.

5.5 Solvency.

     The fair salable value of Borrower’s assets (including goodwill minus disposition costs)
exceeds the fair value of its liabilities; the Borrower is not left with unreasonably small
capital after the transactions in this Agreement; and Borrower is able to pay its debts
(including trade debts) as they mature.

5.6 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 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 do so could not reasonably be expected to cause a
Material Adverse Change.

5.7 Subsidiaries.

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

5.8 Full Disclosure.

     No written representation, warranty or other statement of Borrower in any certificate or
written statement given to Bank (taken together with all such written certificates and written
statements 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.
It being recognized by Bank that the projections and forecasts provided by Borrower in good faith
and based upon reasonable assumptions are not viewed as facts and that actual results during the
period or periods covered by such projections and forecasts may differ from the projected and
forecasted results.

6. AFFIRMATIVE COVENANTS

     Borrower will do all of the following for so long as Bank has an obligation to lend, or

 

 

there are outstanding Obligations:

6.1 Government Compliance.

     Borrower will maintain its and all Subsidiaries’ legal existence and good standing in its
jurisdiction of formation and maintain qualification in each jurisdiction to which the failure to
so qualify would reasonably be expected to cause a material adverse effect on Borrower’s business
or operations. Borrower will 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 will deliver to Bank: (i) as soon as available, but no later than 30
days after the last day of each month, a company prepared consolidated balance sheet and income
statement and statement of cash flows 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 180 days after the last day of Borrower’s fiscal year, audited
consolidated financial statements prepared under GAAP, consistently applied, together with an
unqualified opinion on the financial statements from an independent certified public accounting
firm reasonably acceptable to Bank; (lit) if applicable, within 5 days of filing, copies of all
statements, reports and notices made available to Borrower’s security holders or to any holders
of Subordinated Debt and all reports on Form 10-&, 10-Q and 8-K filed with the Securities and
Exchange Commission; (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
$100,000 or more; (v) budgets, sales projections, operating plans or other financial information
Bank reasonably requests; and (vi) prompt notice of any material change in the composition of the
Intellectual Property, including any subsequent ownership right of Borrower in or to any
Copyright, Patent or Trademark not shown in any intellectual property security agreement between
Borrower and Bank or knowledge of an event that materially adversely affects the value of the
Intellectual Property.

     (b) Within 30 days after the last day of each month and at each time Borrower requests an
Advance, Borrower will deliver to Bank a Transaction Report signed by a Responsible Officer,
together with aged listings of accounts receivable, accounts payable, deferred revenue and such
other schedules as Bank may request During a Trigger Period, Borrower will deliver to Bank a
Transaction Report with all schedules on a weekly basis.

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

     (d) Within 30 days after the last day of each quarter, Borrower will deliver to Bank a
quarterly bookings statement.

 

 

     (e) Within 30 days after the last day of each fiscal year, Borrower will deliver to
Bank financial projections approved by Borrower’s Board of Directors and commensurate with
those provided to venture capital investors.

     (f) Borrower will allow Bank to audit Borrower’s Collateral at Borrower’s expense. Such
audits will be conducted semi-annually, and more frequently as Bank may require at such times
as an Event of Default has occurred and is continuing or during a Trigger Period.

6.3 Inventory; Returns.

     Borrower will keep all Inventory in good and marketable condition, free from material
defects. Returns arid allowances between Borrower and its account debtors will follow Borrower’s
customary practices as they exist at execution of this Agreement. Borrower must promptly notify
Bank of all returns, recoveries, disputes and claims, that involve more than $50,000.

6.4 Taxes.

     Borrower will make, and cause each Subsidiary to make, timely payment of all material
federal, state, and local taxes or assessments and will deliver to Bank, on demand, appropriate
certificates attesting to the payment

6.5 Insurance.

     Borrower will keep its business and the Collateral insured for risks and in amounts, as are
normal and customary for Borrower’s industry. Insurance policies will be in a form and with
companies that are satisfactory to Bank in Bank’s reasonable discretion. All property policies
will have a lender’s loss payable endorsement showing Bank as an additional loss payee and all
liability policies will show the Bank as an additional insured and provide that the insurer must
give Bank at least 20 days notice before canceling its policy (10 days in: the case of
cancellation for non-payment), At Bank’s request, Borrower will deliver certified copies of
policies and evidence of all premium payments. Proceeds payable under any policy will, at Bank’s
option, be payable to Bank on account of the Obligations.

6.6 Primary; Accounts.

     Borrower will maintain its primary depository, investment and operating accounts with Bank,
which relationship shall include Borrower maintaining account balances in any accounts at or
tough Bank representing at least 80% of its unrestricted cash and cash equivalents.

6.7 Registration of Intellectual Property Rights.

     Borrower shall not register any Copyrights or Mask Works with the United States Copyright
Office unless it: (i) has given at least fifteen (15) days’ prior notice to Bank of its intent
to register such Copyrights or Mask Works and has provided Bank with a copy of the application
it intends to file with the United States Copyright Office (excluding exhibits thereto);

 

 

(ii) executes a security agreement or such other documents as Bank may reasonably
request in order to maintain the perfection and priority of Bank’s security interest in the
Copyrights proposed to be registered with the United States Copyright Office; and (iii) records
such security documents with the United States Copyright Office contemporaneously with filing the
Copyright application’s) with the United States Copyright Office. Borrower shall promptly provide
to Bank a copy of the Copyright application(s) filed with the United States Copyright Office,
together with evidence of the recording of the security documents necessary for Bank to maintain
the perfection and priority of its security interest in such Copyrights or Mask Works. Borrower
shall provide written notice to Bank of any application filed by Borrower in the United States
Patent Trademark Office for a patent or to register a trademark or service mark within 30 days of
any such filing.

     Borrower will (i) protect, defend and maintain the validity and enforceability of the
Intellectual Property unless Borrower, in the exercise of its business judgment, determines
otherwise, and promptly advise Bank in writing of material infringements and (ii) not allow any
Intellectual Property to be abandoned, forfeited or dedicated to the public without Bank’s
written consent, which shall not be unreasonably withheld.

6.8 Use of Proceeds. Borrower will use the Advances to pay the Original Term Loan and for
working capital needs.

6.9 Further Assurances.

     Borrower will 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 will not do any of the following without Bank’s prior written consent, which will not be
unreasonably withheld, for so long as Bank has an obligation to lend and there are any
outstanding Obligations:

7.1 Dispositions.

     Convey, sell, lease, transfer or otherwise dispose of (collectively “Transfer”), or permit
any of its Subsidiaries to Transfer, all or any material part of its business or property, other
than 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 Locations of Collateral.

     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 or management of greater than 25% (other than by the sale of Borrower’s
equity securities in a public offering or to strategic, corporate or venture capital

 

 

investors so long as Borrower identifies the venture capital investors prior to the closing of
the investment). Borrower will not, without at least 30 days prior written notice, relocate its
chief executive office, change its state of formation (including reincorporation), change its
organizational number or name or add any new offices or business locations (such as warehouses)
in which Borrower maintains or stores over $25,000 in Collateral.

7.3 Mergers or Acquisitions.

Without the express written consent of Bank (which consent shall not be unreasonably withheld),
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, except where (i) no Event of Default has occurred
and is continuing or would result from such action during the term of this Agreement and
(ii) such transaction would not result in a decrease of more than 25% of Tangible Net Worth. 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, 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 here, subject to Permitted Liens subject to Permitted Liens and except
for Liens for ad valorem Taxes not yet due and payable and such imperfections of title and
encumbrances, if any, which are not material in character, amount or extent, and which
do not materially detract from the value, or materially interfere with the present use, of the
property subject thereto or affected thereby.

7.6 Distributions; Investments.

     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. Pay any dividends
or make any distribution or payment or redeem, retire or purchase any capital stock, except for
repurchases of stock from former employees or directors of Borrower under the terms of
applicable repurchase agreements in an aggregate amount not to exceed $250,000 in the aggregate
in any fiscal year, provided that no Event of Default has occurred, is continuing or would exist
after giving effect to the repurchases.

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 nonaffiliated 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 Credit Extension 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.

     If Borrower fails to pay any of the Obligations within 3 days after their due date, however,
during such period no Credit Extensions will be made;

8.2
Covenant Default.

     (a) If Borrower fails to perform any obligation under Sections 6.2 or 6.7 or violates any
of the covenants contained in Article 7 of this Agreement, or

     (b) If Borrower fails or neglects to perform, keep, or observe any other material term, provision,
condition, covenant, or agreement contained in this Agreement, in any of the Loan Documents, or in any
other present or future agreement between Borrower and Bank and as to any default under such other term,
provision, condition, covenant or agreement that can be cured, has failed to cure such default within ten
(10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured
within the ten (10) day period or cannot after diligent attempts by Borrower be cured within such ten (10) day
period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional
reasonable period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within
such reasonable time period the failure to have cured such default shall not be deemed an Event of Default (provided
that no Credit Extensions will be made during such cure period);

 

 

8.3 Material Adverse Change.

     If there (i) occurs a material adverse change in the business operations, or condition
(financial or otherwise) of the Borrower; or (ii) is a material impairment of the prospect of
repayment of any portion of the Obligations; or (iii) is a material impairment of the value or
priority of Bank’s security interests in the Collateral (the foregoing being defined as a
“Material Adverse Change”).

8.4 Attachment.

     If any material 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 10
days, or if Borrower is enjoined, restrained, or prevented by court order from conducting a
material part of its business or if a judgment or other claim becomes a Lien on a material
portion of Borrower’s assets, or if a notice of lien, levy, or assessment is filed against any of
Borrower’s assets by any government agency and not paid within 10 days after Borrower receives
notice. These are not Events of Default if stayed or if a bond is posted pending contest by
Borrower (but no Credit Extensions will be made during the cure period);

8.5 Insolvency.

     If Borrower becomes insolvent or if Borrower begins an Insolvency Proceeding or an
Insolvency Proceeding is begun against Borrower and not dismissed or stayed within 30 days (but
no Credit Extensions will be made before any Insolvency Proceeding is dismissed);

8.6 Other Agreements.

     If there is a default in any agreement between Borrower and a third party that gives the
third party the right to accelerate any Indebtedness exceeding $250,000 or that could cause a
Material Adverse Change;

8.7 Judgments.

     If a money judgment(s) in the aggregate of at least $250,000 is rendered against Borrower
and is unsatisfied and unstayed for 10 days (but no Credit Extensions will be made before the
judgment is stayed or satisfied); or

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.

 

 

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; notify any Person owing Borrower money of
Bank’s security interest in the funds and verify the amount of the Account Borrower must
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 will assemble the Collateral if Bank requires 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 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; and

     (g) Dispose of the Collateral according to the Code.

9.2 Power of Attorney.

 

 

     Effective only when an Event of Default occurs and continues, Borrower irrevocably appoints
Bank as its lawful attorney to: (i) endorse Borrower’s name on any checks or other forms of
payment or security; (ii) sign Borrower’s name on any invoice or bill of lading for any Account
or drafts against account debtors, (iii) make, settle, and adjust all claims under Borrower’s
insurance policies; (iv) settle and adjust disputes and claims about the Accounts directly with
account debtors, for amounts and on terms Bank determines reasonable; and (v) transfer the
Collateral into the name of Bank or a third party as the Code permits. Bank may exercise the
power of attorney to sign Borrower’s name on any documents necessary to perfect or continue the
perfection of any security interest regardless of whether an Event of Default has occurred.
Bank’s appointment as Borrower’s attorney in fact, and all of Bank’s rights and powers, coupled
with an interest, are irrevocable until all Obligations have been fully repaid and performed and
Bank’s obligation to provide Credit Extensions terminates.

9.3 Bank Expenses.

     If Borrower falls to pay any amount or furnish any required proof of payment to third
persons, Bank may make all or part of the payment or obtain insurance policies required in
Section 6.5, and take any action under the policies Bank deems prudent. Any amounts paid by Bank
are Bank Expenses and immediately due and payable, bearing interest at the then applicable rate
and secured by the Collateral. No payments by Bank are deemed an agreement to make similar
payments in the future or Bank’s waiver of any Event of Default.

9.4 Bank’s Liability for Collateral.

     If Bank complies with reasonable banking practices and Section 9-207 of the Code, it is not
liable 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.

9.5 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 is effective unless signed by Bank and then is only effective for the
specific instance and purpose for which it was given.

9.6 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.

10. NOTICES

 

 

     All notices or demands by any party about this Agreement or any other related agreement
must be in writing; and be personally delivered or sent by an overnight delivery service, by
certified mail, postage prepaid, return receipt requested, or by telefacsimile to the addresses
set forth at the beginning of this Agreement. A party may change its notice address by giving the
other party written notice.

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
Santa Clara County, California.

BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING
OUT OF ANY OF 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. 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 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.

12.2 Indemnification.

     Borrower will indemnify, defend and hold harmless Bank and its officers, employees, and
agents 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 Time of Essence.

     Time is of the essence for the performance of all obligations in this
Agreement.

12.4 Severability of Provision.

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

 

 

12.5 Amendments in Writing, Integration.

     All amendments to this Agreement must be in writing and signed by Borrower and Bank. This
Agreement represents the entire agreement about this subject matter, and supersedes prior
negotiations or agreements, including the Original Credit Agreement. The Original Credit Agreement
and all prior agreements, understandings, representations, warranties, and negotiations between
the parties about the subject matter of this Agreement merge into this Agreement and the Loan
Documents.

12.6 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.

12.7 Survival.

     All covenants, representations and warranties made in this Agreement continue in full force
while any Obligations remain outstanding. The obligations of Borrower in Section 12.2 to
indemnify Bank will survive until all statutes of limitations for actions that may be brought
against Bank have run.

12.8 Confidentiality.

     In handling any confidential information, Bank will 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 loans (provided, however, Bank shall
use commercially reasonable efforts in obtaining such prospective transferee or purchasers
agreement of 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 exercising remedies under this Agreement. Confidential information does not
include 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.

12.9 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, as such definition may be amended from time to time according to the Code.

     “Advance” or “Advances” is an advance made under the Committed Revolving Line.

     “Adjusted Quick Ratio” is the ratio of Quick Assets to Current Liabilities minus the current
portion of Deferred Revenue plus the long term portion of the Obligations.

     “Affiliate” of a Person 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.

     “Bank Expenses” are all audit fees and expenses and reasonable costs and 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 the Bank is
closed.

     “Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by
the United States or any agency or any State thereof having maturities of not more than one (1)
year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after
its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s
Investors Service, Inc, (c) Bank’s certificates of deposit issued maturing no more than one (1)
year after issue; corporate bonds and asset-backed securities having maturities of not more than
one (1) year from the date of acquisition; and (e) money market instruments (money market funds,
CDs, and repurchase agreements) at least ninety-five percent (95%) of the assets of which
constitute Cash Equivalents of the kinds described in clauses (a) through (c) of this definition.

 

 

     “Cash Management Services” are defined in Section 2.1.2.

     “Closing Date” means the date that this Agreement is executed by Borrower and Bank.

     “Code” is the California Uniform Commercial Code, as applicable.

     “Collateral” is the property described on Exhibit A.

     “Committed Revolving Line” is $5,000,000.

     “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.

     “Copyrights” are all copyright rights, applications or registrations and like protections
in each work or authorship or derivative work, whether published or not (whether or not it is a
trade secret) now or later existing, created, acquired or held.

     “Credit Extension” is each Advance, exchange contract, or any other extension of credit by
Bank for Borrower’s benefit.

     “Current Liabilities” are the aggregate amount of Borrower’s Total Liabilities which mature
within one (1) year.

     “Deferred Revenue” is all amounts received in advance of performance and not yet recognized
as revenue.

     “Eligible Accounts” are Accounts in the ordinary course of Borrower’s business that meet all
Borrower’s representations and warranties in Section 5; but Bank may change eligibility
standards by giving Borrower notice. Unless Bank agrees otherwise in writing, Eligible Accounts
will not include:

     (a) Accounts that the account debtor has not paid within 90 days of invoice date;

     (b) Accounts for an account debtor 50% or more of whose Accounts have not been paid within
90 days of invoice date;

 

 

     (c) Credit balances over 90 days from invoice date;

     (d) Accounts for an account debtor, including Affiliates, whose total obligations to Borrower
exceed 25% of all Accounts, for the amounts that exceed that percentage, unless the Bank otherwise
approves in writing or the Accounts are Special Accounts, for which the percentage may be up to
50%;

     (e) Accounts for which the account debtor does not have its principal place of business in
the United States other than the Eligible Foreign Accounts;

     (f) Accounts for which the account debtor is a federal, state or local government entity or
any department, agency, or instrumentality;

     (g) 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);

     (h) 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 account
debtor’s payment may be conditional;

     (i) Accounts for which the account debtor is Borrower’s Affiliate, officer, employee, or
agent;

     (j) 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;

     (k) Accounts for which Bank reasonably determines collection to be doubtful.

     “Equipment” is all present and future machinery, equipment, tenant improvements, furniture,
fixtures, vehicles, tools, parts and attachments in which Borrower has any interest.

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

     “Foreign Eligible Accounts” are Accounts with each of the following account debtors:
Sainsbury’s Supermarkets Limited (or JSD Information Systems Limited, a wholly-owned subsidiary of
Sainsbury’s), B&Q plc., IBM France/Monoprix, and any other account debtor who does not have its
principal place of business in the United States and is approved by Bank in writing.

     “GAAP” is generally accepted accounting principles.

 

 

     “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” are proceedings 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.

     “Intellectual Property” is all of Borrower’s:

     (a) Copyrights, Trademarks, Patents, and Mask Works including amendments, renewals,
extensions, and all licenses or other rights to use and all license fees and royalties from the
use;

     (b) Any trade secrets and any intellectual property rights in computer software and computer
software products now or later existing, created, acquired or held;

     (c) All design rights which may be available to Borrower now or later created, acquired or
held;

     (d) Any claims for damages (past, present or future) for infringement of any of the rights
above, with the right, but not the obligation, to sue and collect damages for use or infringement
of the intellectual property rights above;

     All proceeds and products of the foregoing, including all insurance, indemnity or warranty
payments.

     “Inventory” is present and future inventory in which Borrower has any interest, including
merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and
finished products intended for sale or lease or to be furnished under a contract of service, of
every kind and description now or later owned by or in the custody or possession, actual or
constructive, of Borrower, including inventory temporarily out of its custody or possession or in
transit and including returns on any accounts or other proceeds (including insurance proceeds) from
the sale or disposition of any of the foregoing and any documents of title.

     “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.

     “Investment Guidelines” is that certain Investment Guidelines document, as reviewed and
accepted by Bank as of the date of the Prior Agreement.

 

 

     “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.

     “Mask Works” are all mask works or similar rights available for the protection of
semiconductor chips, now owned or later acquired.

     “Material Adverse Change” is defined in Section 8.3.

     “Obligations” are debts, principal, interest, Bank Expenses and other amounts Borrower owes
Bank now or later, including Cash Management Services, letters of credit and foreign exchange
contracts, if any, and including interest accruing after Insolvency Proceedings begin and debts,
liabilities, or obligations of Borrower assigned to Bank.

     “Original Revolving Loan” has the meaning set forth in the recitals.

     “Original Term Loan” has the meaning set forth in the recitals.

     “Patents” are patents, patent applications and like protections, including improvements,
divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.

     “Permitted Indebtedness” is:

     (a) Borrower’s indebtedness to Bank under this Agreement or any other Loan Document;

     (b) Indebtedness existing on the Effective Date and shown on the Schedule;

     (c) Subordinated Debt;

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

     (e) Indebtedness secured by Permitted Liens.

     
“Permitted Investments” are:

     (a) Investments shown on the Schedule and existing on the Effective Date;

     (b) (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., and (iii)
Bank’s certificates of deposit issued maturing no more than 1 year after issue; and

     (c) Investments made pursuant to Borrower’s Investment Guidelines.

     “Permitted Liens” are:

     (a) Liens existing on the Effective Date and shown on the Schedule or 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 (i) on Equipment acquired or held by Borrower or its Subsidiaries
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) Licenses or sublicenses granted in the ordinary course of Borrower’s business and any
interest or title of a licensor or under any license or sublicense, if the licenses and
sublicenses permit granting Bank a security interest;

     (e) Leases or subleases granted in the ordinary course of Borrower’s business, including in
connection with Borrower’s leased premises or leased property;

     (f) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by
Liens described in (a) through (c), 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 association, 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.

     “Quick Assets” is, on any date, the Borrower’s consolidated, unrestricted cash, cash
equivalents, and net billed domestic accounts receivable, determined according to GAAP.

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

 

 

     “Revolving Maturity Date” is May __, 2008.

     “Rights” as applied to the Collateral, means the Borrower’s rights and interests in, and
powers with respect to, that Collateral, whatever the nature of those rights, interests and powers
and, in any event, including Borrower’s power to transfer rights in such Collateral to Bank.

     “Schedule” is any attached schedule of exceptions.

     “Special Accounts” are Accounts with each of the following account debtors: Salisbury’s, B&Q,
Best Buy, Long Drug Stores, RadioShack, Safeway, Proctor and Gamble, Advance Stores Company (dba
Advance Auto Parts), Ahold Information Services, Anheuser-Busch, Circle K Stores, Duane Reade,
Foodlion, 20th Century Fox, Giant Eagle, Hannaford Bros., HEB Grocery Company, Office Depot,
Piggly Wiggly, and Tyson Foods.

     “Subordinated Debt” is debt incurred by Borrower subordinated to Borrower’s indebtedness owed
to Bank and which is reflected in a written agreement in a manner and form acceptable to Bank and
approved by Bank in writing.

     “Subsidiary” is for any Person, 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
such as 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, and (ii) Total Liabilities less Deferred Revenue,

     “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 Subordinated Debt allowed to be paid, but excluding all other Subordinated Debt,

     “Trademarks” are trademark and servicemark rights, registered or not, applications to
register and registrations and like protections, and the entire goodwill of the business of
Assignor connected with the trademarks.

     “Transaction Report” is that certain Transaction Report in the form of Exhibit C.

     “Trigger Period” is the period commencing on the first day of the month after any month end
where Borrower’s Adjusted Quick Ratio is equal to or less than 1.50 and ending on the month end
where Borrower’s Adjusted Quick Ratio is greater than 1.50 for two consecutive months.

 

 

	 	 	 	 	 
	BORROWER: 

DEMANDTEC, INC.

 	 	 
	By:  	/s/ Mark Culhane
 	 	 
	 	 	Title: EVP & CFO 	 
	 	 	 	 
	 
	BANK:

SILICON VALLEY BANK

 	 	 
	By:  	/s/ Illegible
 	 	 
	 	 	Title: RM 	 
	 	 	 	 
	 

 

 

EXHIBIT A

     The Collateral consists of all of Borrower’s right, title and interest in and to the
following whether owned now or hereafter arising and whether the Borrower has rights now or
hereafter has rights therein and wherever located:

     All goods and equipment now owned or hereafter acquired, including, without limitation, all
machinery, fixtures, vehicles (including motor, vehicles and trailers), and any interest in any of
the foregoing, and all attachments, accessories, accessions, replacements, substitutions,
additions, and improvements to any of the foregoing, wherever located;

     All inventory, now owned or hereafter acquired, including, without limitation, all
merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and
finished products including such inventory as is held for sale or lease, or to be furnished under
a contract of service or is temporarily out of Borrower’s custody or possession or in transit and
including any returns or repossession upon any accounts or other proceeds, including insurance
proceeds, resulting from the sale or disposition of any of the foregoing and any documents of
title representing any of the above;

     All contract rights and general intangibles now owned or hereafter acquired, including,
without limitation, goodwill, trademarks, servicemarks, trade styles, trade names, patents, patent
applications, leases, license agreements, franchise agreements, blueprints, drawings, purchase
orders, customer lists, route lists, infringements, claims, computer programs, computer discs,
computer tapes, literature, reports, catalogs, design rights, income tax refunds, payments of
insurance, payment intangibles, and rights to payment of any kind;

     All now existing and hereafter arising accounts (including health-care insurance
receivables), contract rights, royalties, license rights and all other forms of obligations owing
to Borrower arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Borrower, whether or not earned by performance, and any and all credit
insurance, insurance (including refunds) claims and proceeds, guaranties, and other security
therefor, as well as all merchandise returned to or reclaimed by Borrower,

     All documents (including negotiable documents), cash, deposit accounts, securities,
securities entitlements, securities accounts, investment property, financial assets, letters of
credit, letter of credit rights, money, certificates of deposit, instruments (including promissory
notes) and chattel paper (including tangible and electronic chattel paper) now owned or hereafter
acquired and Borrower’s Books relating to the foregoing;

     All copyright rights, copyright applications, copyright registrations and like protections in
each work of authorship and derivative work thereof, whether published or unpublished, now owned
or hereafter acquired; all trade secret rights, including all rights to unpatented inventions,
know-how, operating manuals, license rights and agreements and confidential information, now owned
or hereafter acquired; all claims for damages by way of any past, present and future

 

 

infringement of any of the foregoing; and

     All Borrower’s Books relating to the foregoing, and the computers and equipment
containing said books and records, and any and all claims, rights and interests in any of the above
and all substitutions for, additions and accessions to and proceeds thereof.

 

 

EXHIBIT B

LOAN PAYMENT / ADVANCE TELEPHONE REQUEST FORM

DEADLINE FOR SAME DAY PROCESSING IS 12:00 NOON., P.S.T.

	 	 	 	 	 	 	 
	TO:

	 	CENTRAL CLIENT SERVICE DIVISION
	 	DATE:
	 	5/23/2006 

	 
	 	 	 	 	 	 
	FAX#:

	 	(408) 496-2426
	 	TIME:
	 	 

FROM:
                                 
                                 
                       
DEMANDTEC, INC. 

CLIENT NAME (BORROWER) 

REQUESTED BY:  Mark Culhane 

AUTHORISED SIGNER’S NAME

AUTHORISED SIGNATURE: /s/ Mark Culhane 

PHONE NUMBER: 650-226-4800 

	 	 	 	 	 	 	 
	FROM ACCOUNT #

	 	 

	 	TO ACCOUNT #
	 	3300337567 

	 	 	 	 	 
	REQUESTED TRANSACTION TYPE
	 	REQUESTED DOLLAR AMOUNT
	 
	PRINCIPAL INCREASE (ADVANCE)
	 	$	3,000,000	 
	PRINCIPAL PAYMENT (ONLY)
	 	$	                    	 
	PRINCIPAL PAYMENT (ONLY)
	 	$	                    	 
	PRINCIPAL AND INTEREST (PAYMENT)
	 	$	                    	 

	 	 	 
	OTHER INSTRUCTIONS:

	 	 

	 

All Borrower’s representations and warranties in the Loan and Security Agreement are true, correct
and complete in all material respects on the date of the telephone request for and Advance
confirmed by this Borrowing Certificate; but those representations and warranties expressly
referring to another date shall be true, correct and complete in all material respects as of that
date.

1

BANK USE ONLY

TELEPHONE REQUEST:

The following person is authorized to request the loan payment transfer/loan advance on the advance
designated account and is known to me.

	 	 	 
	 
Authorized Requester

	 	 
Phone #
	 
	 	 
	 
Received By (Bank)

	 	 
Phone #

 

 

 

Authorized Signature (Bank)

 2

 

 

EXHIBIT C

TRANSACTION REPORT

See attached.

 

 

EXHIBIT D

COMPLIANCE CERTIFICATE

	 	 	 
	TO:

	 	SILICON VALLEY BANK
	 
	 	 
	FROM:

	 	DEMANDTEC, INC

     The undersigned authorized officer of DEMANDTEC, INC. (“Borrower”) certifies that under the
terms and conditions of the Loan and Security Agreement between Borrower and Bank (the
“Agreement”), (i) Borrower is in complete compliance for the period ending                     
with all required covenants except as noted below and (ii) all representations and warranties in
the Agreement are true and correct in all material respects on this date. In addition, the
undersigned authorized officer of Borrower certifies that Borrower and each Subsidiary (i) 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 and (ii) does
not have any legal actions pending or threatened against Borrower or any Subsidiary which Borrower
has not previously notified in writing to Bank. Attached are the required documents supporting the
certification. The Officer certifies that these are prepared in accordance with Generally Accepted
Accounting Principles (GAAP) consistently applied from one period to the next except as explained
in an accompanying letter or footnotes. The Officer acknowledges that no borrowings may be
requested at any time or date of determination that Borrower is not in compliance with any of the
terms of the Agreement, and that compliance is determined not just at the date this certificate is
delivered.

Please Indicate compliance status by circling Yes/No under “Complies” column.

	 	 	 	 	 	 	 
	Reporting Covenant	 	Required	 	Complies
	Monthly financial statements + CC

	 	Monthly within 30 days
	 	Yes
	 	No
	Annual (Audited)

	 	FYB within 180 days
	 	Yes
	 	No
	A/R, A/P Agings & Deferred Rev.

	 	Monthly within 30 days
	 	Yes
	 	No
	A/R Audit

	 	Semi-annual
	 	Yes
	 	No
	Transaction Report

	 	Monthly within 30 days*
	 	Yes
	 	No
	Bookings Report

	 	Quarterly within 30 days
	 	Yes
	 	No
	Projections

	 	Annually within 30 days	 	 	 	 

 

			
	*	 	During the Trigger Period, the Transaction Report is due weekly

	 	 	 	 	 	 	 	 	 
	Revolving Advance Limit and	 	 	 	 	 	 
	Interest Rate Determination	 	Required	 	Actual	 	Complies
	Quick Ratio (Adjusted)*

	 	1.50: 1.00
	 	                    : 1.00
	 	Yes
	 	No

 

			
	*	 	If greater than 1.50:1.00, the Borrowing Base includes the $3,000,000 non-formula limit.
	 
		 	If less than 1,50; 1.00, interest shall accrue at 2 percentage points above the Prime Rate.

Borrower only has deposit accounts located at the following
institutions:                                         .

 

 

Has Borrower filed any new Trademark, Patent or Copyright applications? Yes /No
(If “yes”, please list below and complete the attached Addendum to Intellectual Property Security
Agreement)

	 	 	 	 	 	 
	Trademarks:

	 	BANK USE ONLY	 
	 
	 	 	 	 	 
	Patents:

	 	Received by:	 	 	 
	 

	 	 	 	 	 
	 

	 	 	 	AUTHORIZED SIGNER	 
	Copyrights:
	 	 	 	 	 
	 

	 	Date:	 	 	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 
	 

	 	Verified:	 	 	 
	 

	 	 	 	 	 
	 

	 	 	 	AUTHORIZED SIGNER	 
	 
	 	 	 	 	 
	 

	 	Date:	 	 	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 
	 

	 	Compliance Status:
	 	Yes No	 

Comments Regarding Exceptions: See Attached.

Sincerely,

	 	 	 	 	 
	DEMANDTEC, INC.

 	 	 
	 	 	 
	Signature 	 	 
	 	 	 
	Title  	 	 
	 	 	 
	Date

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