Document:

Prepared by MerrillDirect

COMMERCIAL
SECURITY AGREEMENT

	Principal

  $5,000,000.00	Loan Date

  06-28-2001	Maturity

  05-15-2002	Loan No

  530037155	Call / Coll
           2000	Account	Officer

  602	Initials
	References in the
  shaded area for Lender's use only and do not limit the applicability of this
  document to any particular loan or item.

  Any item above containg "***" has been omittted due to text length
  limitations.
	 
	Grantor:	Versant
  Corporation
	 	6539
  Dumbarton Circle
	 	Fremont,
  CA 94555
	 	 
	Lender:	Greater
  Bay Bank
	 	A
  Division of Mid-Peninsula Bank
	 	39470
  Paseo Padre Parkway
	 	Fremont,
  CA 94538
									

 

THIS COMMERCIAL SECURITY AGREEMENT dated June 28, 2001, is
made and executed between Versant Corporation ("Grantor") and Greater
Bay Bank ("Lender").

GRANT OF SECURITY INTEREST. For valuable consideration,
Grantor grants to Lender a security interest in the Collateral to
secure
the Indebtedness and agrees that Lender shall have the rights stated in this
Agreement with respect to the Collateral, in addition to all other rights which
Lender may have by law.

COLLATERAL DESCRIPTION. The
word "Collateral" as used in this Agreement means the following
described property, whether now owned or hereafter acquired, whether now
existing or hereafter arising, and wherever located, in which Grantor is giving
to Lender a security interest for the payment of the Indebtedness and
performance of all other obligations under the Note and this Agreement:

All Inventory, Chattel Paper, Accounts, Equipment and General
Intangibles

In addition, the word
"Collateral" also includes all the following, whether now owned or
hereafter acquired, whether now existing or hereafter arising, and wherever
located:

(A) All accessions, attachments,
accessories, tools, parts, supplies, replacements and additions to any of the
collateral described herein, whether added now or later.

(B) All products and produce of any of
the property described in this Collateral section.

(C) All accounts, general intangibles,
instruments, rents, monies, payments, and all other rights, arising out of a sale,
lease, or other disposition of any of the property described in this Collateral
section.

(D) All proceeds (including insurance
proceeds) from the sale, destruction, loss, or other disposition of any of the
property described in this Collateral section, and sums due from a third party
who has damaged or destroyed the Collateral or from that party's insurer,
whether due to judgment, settlement or other process.

(E) All records and data relating to any
of the property described in this Collateral section, whether in the form of a
writing, photograph, microfilm, microfiche, or electronic media, together with
all of Grantor's right, title, and interest in and to all computer software
required to utilize, create, maintain, and process any such records or data on
electronic media.

Despite any other provision of this
Agreement, Lender is not granted, and will not have, a nonpurchase money
security interest in household goods, to the extent such a security interest
would be prohibited by applicable law. In addition, if because of the type of
any Property, Lender is required to give a notice of the right to cancel under
Truth in Lending for the Indebtedness, then Lender will not have a security
interest in such Collateral unless and until such a notice is given.

CROSS-COLLATERALIZATION. In
addition to the Note, this Agreement secures all obligations, debts and
liabilities, plus interest thereon, of Grantor to Lender, or any one or more of
them, as well as all claims by Lender against Grantor or any one or more of them,
whether now existing or hereafter arising, whether related or unrelated to the
purpose of the Note, whether voluntary or otherwise, whether due or not due,
direct or indirect, determined or undetermined, absolute or contingent,
liquidated or unliquidated whether Grantor may be liable individually or
jointly with others, whether obligated as guarantor, surety, accommodation
party or otherwise, and whether recovery upon such amounts may be or hereafter
may become barred by any statute of limitations, and whether the obligation to
repay such amounts may be or hereafter may become otherwise unenforceable. 

GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE
COLLATERAL. With respect to the
Collateral, Grantor represents and promises to Lender that:

Perfection of Security Interest. Grantor
agrees to execute financing statements and to take whatever other actions are
requested by Lender to perfect and continue Lender's security interest in the
Collateral. Upon request of Lender, Grantor will deliver to Lender any and all
of the documents evidencing or constituting the Collateral, and Grantor will
note Lender's interest upon any. and all chattel paper if not delivered to
Lender for possession by Lender. This is a continuing Security Agreement and will continue
in effect even though all or any part of the Indebtedness is paid in full and
even though for a period of time Grantor may not be indebted to Lender.

Notices to Lender.
Grantor will promptly notify Lender in writing at Lender's address shown above
(or such other addresses as Lender may designate from time to time) prior to
any (1) change in Grantor's name; (2) change in Grantor's assumed business

name(s); (3) change in the management of the corporation Grantor; (4) change in
the authorized signer(s); (5) change in Grantor's principal office address; (6)
conversion of Grantor to a new or different type of business entity; or (7)
change in any other aspect of Grantor that directly or indirectly relates to
any agreements between Grantor and Lender. No change in Grantor's name will
take effect until after Lender has been notified.

No Violation.
The execution and delivery of this Agreement will not violate any law or
agreement governing Grantor or to which Grantor is a party, and its certificate
or articles of incorporation and bylaws do not prohibit any term or condition
of this Agreement.

Enforceability of Collateral.
To the extent the Collateral consists of accounts, chattel paper, or general
intangibles, as defined by the Uniform Commercial Code, the Collateral is
enforceable in accordance with its terms, is genuine, and fully complies with
all applicable laws and regulations concerning form, content and manner of
preparation and execution, and all persons appearing to be obligated on the
Collateral have authority and capacity to contract and are in fact obligated as
they appear to be on the Collateral. At the time any Account becomes subject to
a security interest in favor of Lender, the Account shall be a good and valid
account representing an undisputed, bona fide indebtedness incurred by the
account debtor, for merchandise held subject to delivery instructions or
previously shipped or delivered pursuant to a contract of sale, or for services
previously performed by Grantor with or for the account debtor. So long as this
Agreement remains in effect, Grantor shall not, without Lender's prior written
consent, compromise, settle, adjust, or extend payment under or with regard to
any such Accounts. There shall be no setoffs or counterclaims against any of the
Collateral, and no agreement shall have been made under which any deductions or
discounts may be claimed concerning the Collateral except those disclosed to
Lender in writing.

Location
of the Collateral. Except
in the ordinary course of Grantor's business, Grantor agrees to keep the
Collateral (or to the extent the Collateral consists of intangible property
such as accounts or general intangibles, the records concerning the Collateral)
at Grantor's address shown above or at such other locations as are acceptable
to Lender. Upon Lender's request, Grantor will deliver to Lender in form
satisfactory to Lender a schedule of real properties and Collateral locations
relating to Grantor's operations, including without limitation the following:
(1) all real property Grantor owns or is purchasing; (2) all real property
Grantor is renting or leasing; (3) all storage facilities Grantor owns, rents,
leases, or uses; and (4) all other properties where Collateral is or may be
located.

Removal of the Collateral. Except
in the ordinary course of Grantor's business, including the sales of inventory,
Grantor shall not remove the Collateral from its existing location without
Lender's prior written consent. To the extent that the Collateral consists of
vehicles, or other titled property, Grantor shall not take or permit any action
which would require application for certificates of title for the vehicles
outside the State of California, without Lender's prior written consent.
Grantor shall, whenever requested, advise Lender of the exact location of the
Collateral.

Transactions Involving Collateral.
Except for inventory sold or accounts collected in the ordinary course of
Grantor's business, or as otherwise provided for in this Agreement, Grantor
shall not sell, offer to sell, or otherwise transfer or dispose of the
Collateral. While Grantor is not in default under this Agreement, Grantor may
sell inventory, but only in the ordinary course of its business and only to
buyers who qualify as a buyer in the ordinary course of business. A sale in the
ordinary course of Grantor's business does not include a transfer in partial or
total satisfaction of a debt or any bulk sale. Grantor shall not pledge,
mortgage, encumber or otherwise permit the Collateral to be subject to any
lien, security interest, encumbrance, or charge, other than the security
interest provided for in this Agreement, without the prior written consent of
Lender. This includes security interests even if junior in right to the
security interests granted under this Agreement. Unless waived by Lender, all
proceeds from any disposition of the Collateral (for whatever reason) shall be
held in trust for Lender and shall not be commingled with any other funds;
provided however, this requirement shall not constitute consent by Lender to
any sale or other disposition. Upon receipt, Grantor shall immediately deliver
any such proceeds to Lender.

Title. Grantor represents and
warrants to Lender that Grantor holds good and marketable title to the
Collateral, free and clear of all liens and encumbrances except for the lien of
this Agreement. No financing statement covering any of the Collateral is on
file in any public office other than those which reflect the security interest
created by this Agreement or to which Lender has, specifically consented.
Grantor shall defend Lender's rights in the Collateral against the claims and
demands of all other persons.

Repairs and Maintenance. Grantor
agrees to keep and maintain, and to cause others to keep and maintain, the
Collateral in good order, repair and condition at all times while this
Agreement remains in effect. Grantor further agrees to pay when due all claims
for work done on, or services rendered or material furnished in connection with
the Collateral so that no lien or encumbrance may ever attach to or be filed
against the Collateral.

Inspection of Collateral.
Lender and Lender's designated
representatives and agents shall have the right at all reasonable times to
examine and inspect the Collateral wherever located.

Taxes, Assessments and Liens. Grantor
will pay when due all taxes, assessments and liens upon the Collateral, its use
or operation, upon this Agreement, upon any promissory note or notes evidencing
the Indebtedness, or upon any of the other Related Documents. Grantor may
withhold any such payment or may elect to contest any lien if Grantor is in
good faith conducting an appropriate proceeding to contest the obligation to
pay and so long as Lender's interest in the Collateral is not jeopardized in
Lender's sole opinion. If the Collateral is subjected to a lien which is not
discharged within fifteen (15) days, Grantor shall deposit with Lender cash, a
sufficient corporate surety bond or other security satisfactory to Lender in an
amount adequate to provide for the discharge of the lien plus any interest,
costs, attorneys' fees or other charges that could accrue as a result of
foreclosure or sale of the Collateral. In any contest Grantor shall defend
itself and Lender and shall satisfy any final adverse judgment before
enforcement against the Collateral. Grantor shall name Lender as an additional
obligee under any surety bond furnished in the contest proceedings. Grantor
further agrees to furnish Lender with evidence that such taxes, assessments,
and governmental and other charges have been paid in full and in a timely
manner. Grantor may withhold any such payment or may elect to contest any lien
if Grantor is in good faith conducting an appropriate proceeding to contest the
obligation to pay and so long as Lender's interest in the Collateral is not
jeopardized.

Compliance with Governmental Requirements. Grantor
shall comply promptly with all laws, ordinances, rules and regulations of all
governmental authorities, now or hereafter in effect, applicable to the
ownership, production, disposition, or use of the Collateral. Grantor may
contest in good faith any such law, ordinance or regulation and withhold
compliance during any proceeding, including appropriate appeals, so long as
Lender's interest in the Collateral, in Lender's opinion, is not jeopardized.

Hazardous Substances. Grantor
represents and warrants that the Collateral never has been, and never will be
so long as this Agreement remains a lien on the Collateral, used in violation
of any Environmental Laws or for the generation, manufacture, storage,
transportation, treatment, disposal, release or threatened release of any
Hazardous Substance. The representations and warranties contained herein are
based on Grantor's due diligence in investigating the Collateral for Hazardous
Substances. Grantor hereby (1) releases and waives any future claims against
Lender for indemnity or contribution in the event Grantor becomes liable for
cleanup or other costs under any Environmental Laws, and (2) agrees to
indemnify and hold harmless Lender against any and all claims and losses
resulting from a breach of this provision of this Agreement. This obligation to
indemnify shall survive the payment of the Indebtedness and the satisfaction of
this Agreement.

Maintenance of Casualty Insurance. Grantor
shall procure and maintain all risks insurance, including without limitation
fire, theft and liability coverage together with such other insurance as Lender
may require with respect to the Collateral, in form, amounts, coverages and
basis reasonably acceptable to Lender and issued by a company or companies
reasonably acceptable to Lender. Grantor, upon request of Lender, will deliver
to Lender from time to time the policies or certificates of insurance in form
satisfactory to Lender, including stipulations that coverages will not be
cancelled or diminished without at least ten (10) days' prior written notice to
Lender and not including any disclaimer of the insurer's liability for failure
to give such a notice. Each insurance policy also shall include an endorsement
providing that coverage in favor of Lender will not be impaired in any way by
any act, omission or default of Grantor or any other person. In connection with
all policies covering assets in which Lender holds or is offered a security
interest, Grantor will provide Lender with such loss payable or other
endorsements as Lender may require. If Grantor at any time fails to obtain or
maintain any insurance as required under this Agreement, Lender may (but shall
not be obligated to) obtain such insurance as Lender deems appropriate,
including if Lender so chooses "single interest insurance," which
will cover only Lender's interest in the Collateral.

Application of Insurance Proceeds. Grantor
shall promptly notify Lender of any loss or damage to the Collateral. Lender
may make proof of loss if Grantor fails to do so within fifteen (15) days of
the casualty. All proceeds of any insurance on the Collateral, including
accrued proceeds thereon, shall be held by Lender as part of the Collateral. If
Lender consents to repair or replacement of the damaged or destroyed
Collateral, Lender shall, upon satisfactory proof of expenditure, pay or
reimburse Grantor from the proceeds for the reasonable cost of repair or
restoration. If Lender does not consent to repair or replacement of the
Collateral, Lender shall retain a sufficient amount of the proceeds to pay all
of the Indebtedness, and shall pay the balance to Grantor. Any proceeds which
have not been disbursed within six (6) months after their receipt and which
Grantor has not committed to the repair or restoration of the Collateral shall
be used to prepay the Indebtedness.

Insurance Reserves.
Lender may require Grantor to maintain with Lender reserves for payment of
insurance premiums, which reserves shall be created by monthly payments from
Grantor of a sum estimated by Lender to be sufficient to produce, at least
fifteen (15) days before the premium due date, amounts at least equal to the
insurance premiums to be paid. If fifteen (115) days before payment is due, the
reserve funds are insufficient, Grantor shall upon demand pay any deficiency to
Lender. The reserve funds shall be held by Lender as a general deposit and
shall constitute a non-interest-bearing account which Lender may satisfy by
payment of the insurance premiums required to be paid by Grantor as they become
due. Lender does not hold the reserve funds in trust for Grantor, and Lender is
not the agent of Grantor for payment of the insurance premiums required to be
paid by Grantor. The responsibility for the payment of premiums shall remain
Grantor's sole responsibility.

Insurance Reports.
Grantor, upon request of Lender, shall furnish to Lender reports on each
existing policy of insurance showing such information as Lender may reasonably
request including the following: (1) the name of the insurer; (2) the risks
insured; (3) the amount of the policy; (4) the property insured; (5) the then
current value on the basis of which insurance has been obtained and the manner
of determining that value; and (6) the expiration date of the policy. In
addition, Grantor shall upon request by Lender (however not more often than
annually) have an independent appraiser satisfactory to Lender determine, as
applicable, the cash value or replacement cost of the Collateral.

GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until
default and except as otherwise provided
below with respect to accounts, Grantor may have possession of the tangible
personal property and beneficial use of all the Collateral and may use it in
any lawful manner not inconsistent with this Agreement or the Related
Documents, provided that Grantor's right to possession and beneficial use shall
not apply to any Collateral where possession of the Collateral by Lender is
required by law to perfect Lender's security interest in such Collateral. Until
otherwise notified by Lender, Grantor may collect any of the Collateral
consisting of accounts. At any time and even though no Event of Default exists,
Lender may exercise its rights to collect the accounts and to notify account
debtors to make payments directly to Lender for application to the
Indebtedness. If Lender at any time has possession of any Collateral, whether
before or after an Event of Default, Lender shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral if Lender
takes such action for that purpose as Grantor shall request or as Lender, in
Lender's sole discretion, shall deem appropriate under the circumstances, but
failure to honor any request by Grantor shall not of itself be deemed to be a
failure to exercise reasonable care. Lender shall not be required to take any
steps necessary to preserve any rights in the Collateral against prior parties,
nor to protect, preserve or maintain any security interest given to secure the
Indebtedness.

LENDER'S EXPENDITURES.
If any action or proceeding is commenced that would materially affect Lender's
interest in the Collateral or if Grantor fails to comply with any provision of
this Agreement or any Related Documents, including but not limited to Grantor's
failure to discharge or pay when due any amounts Grantor is required to
discharge or pay under this Agreement or any Related Documents, Lender on
Grantor's behalf may (but shall not be obligated to) take any action that Lender
deems appropriate, including but not limited to discharging or paying all
taxes, liens, security interests, encumbrances and other claims, at any time
levied or placed on the Collateral and paying all costs for insuring,
maintaining and preserving the Collateral. All such expenditures incurred or
paid by Lender for such purposes will then bear interest at the rate charged
under the Note from the date incurred or paid by Lender to the date of
repayment by Grantor. All such expenses will become a part of the Indebtedness
and, at Lender's option, will (A) be payable on demand; (B) be added to the
balance of the Note and be apportioned among and be payable with any
installment payments to become due during either (1) the term of any applicable
insurance policy; or (2) the remaining term of the Note; or (C) be treated as a
balloon payment which will be due and payable at the Note's maturity. The
Agreement also will secure payment of these amounts. Such right shall be in
addition to all other rights and remedies to which Lender may be entitled upon
Default.

DEFAULT. Each of the following
shall constitute an Event of Default under this Agreement:

Payment Default.
Grantor fails to make any payment when due under the Indebtedness.

Other Defaults.
Grantor fails to comply with or to perform any other term, obligation, covenant
or condition contained in this Agreement or in any of the Related Documents or
to comply with or to perform any term, obligation, covenant or condition
contained in any other agreement between Lender and Grantor.

Default in Favor of Third Parties. Should
Grantor or any Grantor default under any loan, extension of credit, security
agreement, purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Grantor's property
or Grantor's or any Grantor's ability to repay the Indebtedness or perform
their respective obligations under this Agreement or any of the Related
Documents.

False Statements. Any
warranty, representation or statement made or furnished to Lender by Grantor or
on Grantor's behalf under this Agreement, the Note, or the Related Documents is
false or misleading in any material respect, either now or at the time made or
furnished or becomes false or misleading at any time thereafter.

Defective Collateralization. This
Agreement or any of the Related Documents ceases to be in full force and effect
(including failure of any collateral document to create a valid and perfected
security interest or lien) at any time and for any reason.

Insolvency.
The dissolution or termination of Grantor's existence as a going business, the
insolvency of Grantor, the appointment of a receiver for any part of Grantor's
property, any assignment for the benefit of creditors, any type of creditor workout,
or the commencement of any proceeding under any bankruptcy or insolvency laws
by or against Grantor.

Creditor or Forfeiture Proceedings. Commencement
of foreclosure or forfeiture proceedings, whether by judicial proceeding,
self-help, repossession or any other method, by any creditor of Grantor or by
any governmental agency against any collateral securing the Indebtedness. This
includes a garnishment of any of Grantor's accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if there
is a good faith dispute by Grantor as to the validity or reasonableness of the
claim which is the basis of the creditor or forfeiture proceeding and if
Grantor gives Lender written notice of the creditor or forfeiture proceeding
and deposits with Lender monies or a surety bond for the creditor or forfeiture
proceeding, in an amount determined by Lender, in its sole discretion, as being
an adequate reserve or bond for the dispute.

Events Affecting Guarantor. Any
of the preceding events occurs with respect to guarantor, endorser, surety, or
accommodation party of any of the Indebtedness or guarantor, endorser, surety,
or accommodation party dies or becomes incompetent or revokes or disputes the
validity of, or liability under, any Guaranty of the Indebtedness.

Adverse Change. A
material adverse change occurs in Grantors financial condition, or Lender
believes the prospect of payment or performance of the Indebtedness is
impaired.

Cure Provisions.
If any default, other than a default in payment is curable and if Grantor has
not been given a notice of a breach of the same provision of this Agreement
within the preceding twelve (12) months, it may be cured (and no event of
default will have occurred) if Grantor, after receiving written notice from
Lender demanding cure of such default: (1) cures the default within fifteen
(15) days; or (2) if the cure requires more than fifteen (15) days, immediately
initiates steps which Lender deems in Lender's sole discretion to be sufficient
to cure the default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably
practical.

RIGHTS AND REMEDIES ON DEFAULT. If
an Event of Default occurs under this Agreement, at any time thereafter, Lender
shall have all the rights of a secured party under the California Uniform
Commercial Code. In addition and without limitation, Lender may exercise any
one or more of the following rights and remedies:

Accelerate Indebtedness. Lender
may declare the entire Indebtedness, including any prepayment penalty which
Grantor would be required to pay, immediately due and payable, without notice
of any kind to Grantor.

Assemble Collateral. Lender
may require Grantor to deliver to Lender all or any portion of the Collateral
and any and all certificates of title and other documents relating to the
Collateral. Lender may require Grantor to assemble the Collateral and make it
available to Lender at a place to be designated by Lender. Lender also shall
have full power to enter upon the property of Grantor to take possession of and
remove the Collateral. If the Collateral contains other goods not covered by
this Agreement at the time of repossession, Grantor agrees Lender may take such
other goods, provided that Lender makes reasonable efforts to return them to
Grantor after repossession.

Sell the Collateral. Lender
shall have full power to sell, lease, transfer, or otherwise deal with the
Collateral or proceeds thereof in Lender's own name or that of Grantor. Lender may
sell the Collateral at public auction or private sale. Unless the Collateral
threatens to decline speedily in value or is of a type customarily sold on a
recognized market, Lender will give Grantor reasonable notice of the time after
which any private sale or any other intended disposition of the Collateral is
to be made. The requirements of reasonable notice shall be met if such notice
is given at least fifteen (15) days, or such lesser time as required by state
law, before the time of the sale or disposition. All expenses relating to the
disposition of the Collateral, including without limitation the expenses of
retaking, holding, insuring, preparing for sale and selling the Collateral,
shall become a part of the Indebtedness secured by this Agreement and shall be
payable on demand, with interest at the Note rate from date of expenditure
until repaid.

Appoint Receiver. Lender
shall have the right to have a receiver appointed to take possession of all or
any part of the Collateral, with the power to protect and preserve the
Collateral, to operate the Collateral preceding foreclosure or sale, and to
collect the Rents from the Collateral and apply the proceeds, over and above
the cost of the receivership, against the Indebtedness. The receiver may serve
without bond if permitted by law. Lender's right to the appointment of a
receiver shall exist whether or not the apparent value of the Collateral
exceeds the Indebtedness by a substantial amount. Employment by Lender shall
not disqualify a person from serving as a receiver.

Collect Revenues, Apply Accounts. Lender,
either itself or through a receiver, may collect the payments, rents, income,
and revenues from the Collateral. Lender may at any time in Lender's discretion
transfer any Collateral into Lender's own name or that of Lender's nominee and
receive the payments, rents, income, and revenues therefrom and hold the same
as security for the Indebtedness or apply it to payment of the Indebtedness in
such order of preference as Lender may determine. Insofar as the Collateral
consists of accounts, general intangibles, insurance policies, instruments,
chattel paper, choses in action, or similar property, Lender may demand,
collect, receipt for, settle, compromise, adjust, sue for, foreclose, or
realize on the Collateral as Lender may determine, whether or not Indebtedness
or Collateral is then due. For these purposes, Lender may, on behalf of and in
the name of Grantor, receive, open and dispose of mail addressed to Grantor;
change any address to which mail and payments are to be sent; and endorse
notes, checks, drafts, money orders, documents of title, instruments and items
pertaining to payment, shipment, or storage of any Collateral. To facilitate
collection, Lender may notify account debtors and obligors on any Collateral to
make payments directly to Lender.

Obtain Deficiency.
If Lender chooses to sell any or all of the Collateral, Lender may obtain a
judgment against Grantor for any deficiency remaining on the Indebtedness due
to Lender after application of all amounts received from the exercise of the
rights provided in this Agreement. Grantor shall be liable for a deficiency
even if the transaction described in this subsection is a sale of accounts or
chattel paper.

Other Rights and Remedies.
Lender shall have all the rights and remedies of a secured creditor under the
provisions of the Uniform Commercial Code, as may be amended from time to time.
In addition, Lender shall have and may exercise any or all other rights and
remedies it may have available at law, in equity, or otherwise.

Election of Remedies.
Except as may be prohibited by applicable law, all of Lender's rights and
remedies, whether evidenced by this

Agreement, the Related Documents, or by any other writing, shall be cumulative
and may be exercised singularly or concurrently. Election by Lender to pursue
any remedy shall not exclude pursuit of any other remedy, and an election to
make expenditures or to take action to perform an obligation of Grantor under
this Agreement, after Grantor's failure to perform, shall not affect Lender's
right to declare a default and exercise its remedies.

MISCELLANEOUS PROVISIONS. The
following miscellaneous provisions are a part of this Agreement:

Amendments.' This
Agreement, together with any Related Documents, constitutes the entire
understanding and agreement of the parties as to the matters set forth in this
Agreement. No alteration of or amendment to this Agreement shall be effective
unless given in writing and signed by the party or parties sought to be charged
or bound by the alteration or amendment.

Attorneys' Fees; Expenses.
Grantor agrees to pay upon demand all of Lender's costs and expenses, including
Lender's attorneys' fees and Lender's legal expenses, incurred in connection
with the enforcement of this Agreement. Lender may hire or pay someone else to
help enforce this Agreement, and Grantor shall pay the costs and expenses of
such enforcement. Costs and expenses include Lender's attorneys' fees and legal
expenses whether or not there is a lawsuit, including attorneys' fees and legal
expenses for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-judgment
collection services. Grantor also shall pay all court costs and such additional
fees as may be directed by the court.

Caption Headings.
Caption headings in this Agreement are for convenience purposes only and are
not to be used to interpret or define the provisions of this Agreement.

Governing Law. This Agreement will be governed by, construed
and enforced in accordance with federal law and the laws of the State of
California. This Agreement has been accepted by Lender in the State of
California.

Choice of Venue. If
there is a lawsuit, Grantor agrees upon Lender's request to submit to the
jurisdiction of the courts of Alameda County, State of California.

Preference Payments. Any
monies Lender pays because of. an asserted preference claim in Grantor's
bankruptcy will become a part of the Indebtedness and, at Lender's option,
shall be payable by Grantor as provided in this Agreement.

No Waiver by Lender.
Lender shall not be deemed to have waived any rights under this Agreement
unless such waiver is given in writing and signed by Lender. No delay or
omission on the part of Lender in exercising any right shall operate as a
waiver of such right or any other right. A waiver by Lender of a provision of
this Agreement shall not prejudice or constitute a waiver of Lender's right
otherwise to demand strict compliance with that provision or any other
provision of this Agreement. No prior waiver by Lender, nor any course of
dealing between Lender and Grantor, shall constitute a waiver of any of
Lender's rights or of any of Grantor's obligations as to any future
transactions. Whenever the consent of Lender is required under this Agreement,
the granting of such consent by Lender in any instance shall not constitute
continuing consent to subsequent instances where such consent is required and
in all cases such consent may be granted or withheld in the sole discretion of
Lender.

Notices. Any notice required to
be given under this Agreement shall be given in writing, and shall be effective
when actually delivered, when actually received by telefacsimile (unless
otherwise required by law), when deposited with a nationally recognized
overnight courier, or, if mailed, when deposited in the United States mail, as
first class, certified or registered mail postage prepaid, directed to the
addresses shown near the beginning of this Agreement. Any party may change its
address for notices under this Agreement by giving formal written notice to the
other parties, specifying that the purpose of the notice is to change the
party's address. For notice purposes, Grantor agrees to keep Lender informed at
all times of Grantor's current address. Unless otherwise provided or required
by law, if there is more than one Grantor, any notice given by Lender to any
Grantor is deemed to be notice given to all Grantors.

Power of Attorney. Grantor
hereby appoints Lender as Grantor's irrevocable attorney-in-fact for the
purpose of executing any documents necessary to perfect or to continue the
security interest granted in this Agreement . Lender may at any time, and
without further authorization from Grantor, file a carbon, photographic or
other reproduction of any financing statement or of this Agreement for use as a
financing statement. Grantor will reimburse Lender for all expenses for the
perfection and the continuation of the perfection of Lender's security interest
in the Collateral.

Waiver of Co-Obligor's Rights. If
more than one person is obligated for the Indebtedness, Grantor irrevocably
waives, disclaims and relinquishes all claims against such other person which
Grantor has or would otherwise have by virtue of payment of the Indebtedness or
any part thereof, specifically including but not limited to all rights of
indemnity, contribution or exoneration.

Severability. If
a court of competent jurisdiction finds any provision of this Agreement to be
illegal, invalid, or unenforceable as to any circumstance, that finding shall
not make the offending provision illegal, invalid, or unenforceable as to any
other circumstance. If feasible, the offending provision shall be considered
modified so that it becomes legal, valid and enforceable. If the offending
provision cannot be so modified, it shall be considered deleted from this
Agreement. Unless otherwise required by law, the illegality, invalidity, or
unenforceability of any provision of this Agreement shall not affect the
legality, validity or enforceability of any other provision of this Agreement.

Successors and Assigns. Subject
to any limitations stated in this Agreement on transfer of Grantor's interest,
this Agreement shall be binding upon and inure to the benefit of the parties,
their successors and assigns. If ownership of the Collateral becomes vested in
a person other than Grantor, Lender, without notice to Grantor, may deal with
Grantor's successors with reference to this Agreement and the Indebtedness by
way of forbearance or extension without releasing Grantor from the obligations
of this Agreement or liability under the Indebtedness.

Survival of Representations and Warranties. All
representations, warranties, and agreements made by Grantor in this Agreement
shall survive the execution and delivery of this Agreement, shall be continuing
in nature, and shall remain in full force and effect until such time as
Grantor's Indebtedness shall be paid in full.

Time is of the Essence. Time
is of the essence in the performance of this Agreement.

DEFINITIONS. The
following capitalized words and terms shall have the following meanings when
used in this Agreement. Unless specifically stated to the contrary, all
references to dollar amounts shall mean amounts in lawful money of the United
States of America. Words and terms used in the singular shall include the
plural, and the plural shall include the singular, as the context may require.
Words and terms not otherwise defined in this Agreement shall have the meanings
attributed to such terms in the Uniform Commercial Code:

Account. The word
"Account" means a trade account, account receivable, other
receivable, or other right to payment for goods sold or services rendered owing
to Grantor (or to a third party grantor acceptable to Lender).

Agreement. The word
"Agreement" means this Commercial Security Agreement, as this
Commercial Security Agreement may be amended or modified from time to time,
together with all exhibits and schedules attached to this Commercial Security
Agreement from time to time.

Borrower. The word
"Borrower" means Versant Corporation, and all other persons and
entities signing the Note in whatever capacity.

Collateral. The
word "Collateral" means all of Grantor's right, title and interest in
and to all the Collateral as described in the Collateral Description section of
this Agreement.

Default. The word
"Default" means the Default set forth in this Agreement in the
section titled "Default".

Environmental Laws. The
words "Environmental Laws" mean any and all state, federal and local
statutes, regulations and ordinances relating to the protection of human health
or the environment, including without limitation the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the
California Health and Safety Code, Section 25100, et seq., or other applicable
state or federal laws, rules, or regulations adopted pursuant thereto.

Event of Default.
The words "Event of Default" mean any of the events of default set
forth in this Agreement in the default section of this Agreement.

Grantor. The word
"Grantor" means Versant Corporation.

Guaranty. The
word "Guaranty" means the guaranty from guarantor, endorser, surety,
or accommodation party to Lender, including without limitation a guaranty of
all or part of the Note.

Hazardous Substances. The
words "Hazardous Substances" mean materials that, because of their
quantity, concentration or physical, chemical or infectious characteristics,
may cause or pose a present or potential hazard to human health or the
environment when improperly used, treated, stored, disposed of, generated,
manufactured, transported or otherwise handled. The words "Hazardous
Substances" are used in their very broadest sense and include without
limitation any and all hazardous or toxic substances, materials or waste as
defined by or listed under the Environmental Laws. The term "Hazardous
Substances" also includes, without limitation, petroleum and petroleum by-products
or any fraction thereof and asbestos.

Indebtedness. The
word "Indebtedness" means the indebtedness evidenced by the Note or
Related Documents, including all principal and interest together with all other
indebtedness and costs and expenses for which Grantor is responsible under this
Agreement or under any of the Related Documents.

Lender. The word
"Lender" means Greater Bay Bank, its successors and assigns.

Note. The word
"Note" means the Note executed by Grantor in the principal amount of
$5,000,000.00 dated June 28, 2001, together with all renewals of, extensions
of, modifications of, refinancings of, consolidations of, and substitutions for
the note or credit agreement.

Related Documents.
The words "Related Documents" mean all promissory notes, credit agreements,
loan agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, security deeds, collateral mortgages, and all other
instruments, agreements and documents, whether now or hereafter existing,
executed in connection with the Indebtedness.

GRANTOR HAS READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS
AGREEMENT IS DATED JUNE 28, 2001.

GRANTOR:

	VERSANT CORPORATION 
	 
	By: /s/ LEE McGRATH
	 	

	 
	 	Lee McGrath, Chief Financial Officer of Versant
	 	CorporationPrepared by MerrillDirect

ON-SITE SOURCING, INC.

2001 BROAD BASED OPTION PLAN

PURPOSE

On-Site Sourcing, Inc., a Delaware
corporation (the “Company”),
wishes to recruit, reward, and retain employees.  To further these objectives, the Company hereby sets forth the
On-Site Sourcing, Inc. 2001 Broad Based Option Plan (the “Plan”), effective as of July 11, 2001
(the “Effective Date”), to
provide options (“Options”) to employees of the Company and its Related
Companies to purchase shares of the Company’s common stock (the “Common Stock”).

PARTICIPANTS

All Employees of the Company and of any
Eligible Affiliates are eligible for Options under this Plan.  Eligible individuals become “optionees” when the
Administrator grants them an option under this Plan.  The term optionee also
includes, where appropriate, a person authorized to exercise an Option in place
of the original recipient.

Employee
means any person employed as a common law employee of the Company or of a
Related Company.

ADMINISTRATOR

The Administrator
is the Board of Directors of the Company (the "Board"), unless the
Board specifies a committee of the Board (which could be a committee of one).

The Administrator is responsible for the
general operation and administration of the Plan and for carrying out its
provisions and has full discretion in interpreting and administering the
provisions of the Plan.  Subject to the
express provisions of the Plan, the Administrator may exercise such powers and
authority of the Board as the Administrator may find necessary or appropriate
to carry out its functions.  The
Administrator may delegate its functions (other than those described in the Granting of Options section) to officers or
other Employees of the Company.

The Administrator’s powers will include,
but not be limited to, the power to amend, waive, or extend any provision or
limitation of any Option.  The
Administrator may act through meetings of a majority of its members or by
unanimous consent.

The Administrator may provide that an
Option is exercisable for shares while the shares are subject to forfeiture
under conditions the Administrator specifies.

The Administrator may also make direct
grants of Common Stock (with any or no restrictions) as a bonus or other
incentive or to grant such stock or other awards in lieu of Company obligations
to pay cash under other plans or compensatory arrangements, including the
Company’s bonus plans or any deferred compensation plans.

GRANTING
OF OPTIONS

Subject to the terms of the Plan, the
Administrator will, in its sole discretion, determine

the
persons who receive Options,

the
terms of such Options,

the
schedule for exercisability (including any requirements that the optionee or
the Company satisfy performance criteria),

the
time and conditions for expiration of the Options, and

the
form of payment due upon exercise.

The Administrator’s determinations under
the Plan need not be uniform and need not consider whether possible recipients
are similarly situated.

Options will be nonqualified stock
options (“NQSOs”) not intended to be
within the meaning of Section 422 of the Internal Revenue Code of 1986 (the “Code”).

          Substitutions

The Administrator may grant Options in
substitution for options or other equity interests held by individuals who
become Employees of the Company or of a Related Company as a result of the
Company’s or Related Company’s acquiring or merging with the individual’s
employer or acquiring its assets.  In
addition, the Administrator may provide for the Plan’s assumption of options
granted outside the Plan to persons who would have been eligible under the
terms of the Plan to receive a grant (or who were eligible under the acquired
company’s plan), including (i) persons who provided services to any acquired
company or business, (ii) persons who provided services to the Company or any
Related Company, and (iii) persons who received option grants from the
Company before the Effective Date of the Plan. 
If appropriate to conform the Options to the interests for which they
are substitutes, the Administrator may grant substitute Options under terms and
conditions (including Exercise Price) that vary from those the Plan otherwise
requires.

DATE
OF GRANT

The Date
of Grant will be the date as of which the Administrator
grants an Option to a person, as specified in the Plan or in the
Administrator’s minutes or other written evidence of action.

EXERCISE
PRICE

The Exercise
Price is the value of the consideration that an optionee must
provide in exchange for one share of Common Stock.  The Administrator will determine the Exercise Price under each
Option and may set the Exercise Price without regard to the Exercise Price of
any other Options granted at the same or any other time.  The Company may use the consideration it
receives from the optionee for general corporate purposes.  The Exercise Price per share for Options may
not be less than 85% of the Fair Market Value of a share on the Date of Grant.

The Administrator may satisfy any state
law requirements regarding adequate consideration for stock grants by, among
other methods, (i) issuing Common Stock held as treasury stock or (ii) charging
the recipients at least the par value for the shares received.  The Administrator may also designate that a
recipient may satisfy the preceding clause (ii) either by direct payments
or by the Administrator’s withholding from other payments due to the recipient.

          FAIR MARKET VALUE

Fair Market Value
of a share of Common Stock for purposes of the Plan will be determined as
follows:

by
the closing sale price on the day preceding the Date of Grant;

if
the Common Stock does not trade on a national securities exchange, the closing
sale price as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System (“Nasdaq”)
for such date;

if
no such closing sale price information is available, by the average of the
closing bid and asked prices that Nasdaq reports for such date;

if
there are no such closing bid and asked prices, by the average of the closing
bid and asked prices as reported by any other commercial service for such date;
or

if
the Company has no publicly-traded stock, the Administrator will determine the
Fair Market Value for purposes of the Plan using any measure of value it
determines in good faith to be appropriate.

For any date that is not a trading day,
the Fair Market Value of a share of Common Stock for such date will be
determined by using the closing sale price or the average of the closing bid
and asked prices, as appropriate, for the immediately preceding trading
day.  The Administrator can substitute a
particular time of day or other measure of 
“closing sale price” or “bid and asked prices” if appropriate because of
changes in exchange or market procedures.

The Administrator has sole discretion to
determine the Fair Market Value for purposes of this Plan, and all Options are
conditioned on the optionees’ agreement that the Administrator’s determination
is conclusive and binding even though others might make a different and also
reasonable determination.

EXERCISABILITY

The Administrator will determine the
times and conditions for exercise of each Option.

Options will become exercisable at such
times and in such manner as the Administrator determines and the Option
Agreement indicates; provided, however, that the Administrator
may, on such terms and conditions as it determines appropriate, accelerate the
time at which the optionee may exercise any portion of an Option.

If the Administrator does not specify
otherwise, Options will expire as of the tenth anniversary of the Date of Grant
(unless they expire earlier under the Plan or the Option Agreement).  The Administrator has the sole discretion to
determine that a change in service–providing relationship eliminates any
further service credit on the exercise schedule.

No portion of an Option that is
unexercisable at an optionee’s termination of service-providing relationship
(for any reason) will thereafter become exercisable (and the optionee will
immediately forfeit any unexercisable portions at his termination of
service-providing relationship), unless the Option Agreement provides otherwise,
either initially or by amendment.

          SUBSTANTIAL CORPORATE CHANGE

Upon a Substantial Corporate Change, the
Plan and any unexercised Options will terminate (after the occurrence of one of
the alternatives set forth below under Termination
Alternatives) unless either (i) an option agreement with an optionee
provides otherwise or (ii) provision is made in writing in connection with such
transaction for

the
assumption or continuation of outstanding Options, or

the
substitution for such options or grants of any options or grants covering the
stock or securities of a successor employer entity, or a parent or subsidiary
of such successor, with appropriate adjustments as to the number and kind of
shares of stock and prices (and with fractional shares rounded down to the
nearest whole share unless the Administrator determines otherwise), in which
event the Options will continue in the manner and under the terms so provided,

with such increases in exercisability, if
any, as the Administrator determines appropriate in its sole discretion.

                           Termination Alternatives

If an Option
would otherwise terminate under the preceding sentence, the Administrator will
either

provide
that optionees will have the right, at such time before the completion of the
transaction causing such termination as the Board or the Administrator
reasonably designates, to exercise any unexercised portions of the Options,
including, if the Administrator so determines in its sole discretion, portions
of the Options not already exercisable or

cause
the Company, or agree to allow the successor, to cancel each Option after
payment to the optionee of an amount in cash, cash equivalents, or successor
equity interests substantially equal to the Fair Market Value under the
transaction minus the Exercise Price for the shares covered by the Option (and,
where the Board or the Administrator determines it is appropriate, any required
tax withholdings).

A “Substantial
Corporate Change”
means any of the following events:

(i)
sale of all or substantially all of the assets of the Company to one or more
individuals, entities, or groups (other than an Excluded Owner) acting
together,

(ii)
complete or substantially complete dissolution or liquidation of the Company,

(iii)
a person, entity, or group (other than an Excluded Owner) acquires or attains
ownership of more than 50% of the undiluted total voting power of the Company’s
then-outstanding securities eligible to vote to elect members of the Board (“Company Voting Securities”),
or

(iv)
completion of a merger, consolidation, or reorganization of the Company with or
into any other entity (other than an Excluded Owner) unless the holders of the
Company Voting Securities outstanding immediately before such completion,
together with any trustee or other fiduciary holding securities under a Company
benefit plan, retain control because they hold securities that represent
immediately after such merger or consolidation at least 50% of the combined
voting power of the then outstanding voting securities of either the Company or
the other surviving entity or its ultimate parent;

An “Excluded
Owner” consists of the Company, any Related Company, any
Company benefit plan or any underwriter temporarily holding securities for an
offering of such securities.

Even if other tests are met, a SUBSTANTIAL CORPORATE CHANGE
has not occurred under any circumstance in which the Company files for
bankruptcy protection or is reorganized following a bankruptcy filing.  The Administrator may determine that a
particular optionee’s Options will not become fully exercisable as a result of
what the Administrator, in its sole discretion, determines is the optionee’s
insufficient cooperation with the Company with respect to a SUBSTANTIAL CORPORATE CHANGE.  The Administrator may allow conditional
exercises in advance of the completion of a SUBSTANTIAL CORPORATE CHANGE that are
then rescinded if no SUBSTANTIAL
CORPORATE CHANGE occurs.  The
Administrator may also provide that the accelerations under the SUBSTANTIAL CORPORATE CHANGE
occur automatically up to six months after the SUBSTANTIAL CORPORATE CHANGE.

Any Option granted to an optionee in
replacement of other awards not under this Plan will not become fully
exercisable upon a SUBSTANTIAL
CORPORATE CHANGE  unless
(i) the plan under which the awards were originally granted specifically
provided for such acceleration, (ii) the Administrator provided for such
acceleration in replacing the options, or (iii) the Administrator so provides.

The Board or other Administrator may take
any actions described in the SUBSTANTIAL CORPORATE CHANGE section, without any
requirement to seek optionee consent.

METHOD
OF EXERCISE

To exercise any exercisable portion of an
Option, the optionee must:

Deliver
notice of exercise to the Secretary of the Company (or to whomever the Administrator
designates), in a form complying with any rules the Administrator may issue,
signed or otherwise authenticated by the optionee, and specifying the number of
shares of Common Stock underlying the portion of the Option the optionee is
exercising;

Pay
the full Exercise Price by cash or a cashier’s or certified check for the
shares of Common Stock with respect to which the Option is being exercised,
unless the Administrator consents to another form of payment (which could
include (i) monies received from the Company at the time of exercise as a
compensatory cash payment, or (ii) the use of Common Stock); and

Deliver
to the Administrator such representations and documents as the Administrator,
in its sole discretion, may consider necessary or advisable.

Payment in full of the Exercise Price
need not accompany the written notice of exercise if the exercise complies with
a previously-approved cashless exercise method, including, for example, that
the notice directs that the stock certificates (or other indicia of ownership)
for the shares issued upon the exercise be delivered to a licensed broker
acceptable to the Company as the agent for the individual exercising the option
and at the time the stock certificates (or other indicia) are delivered to the
broker, the broker will tender to the Company cash or cash equivalents
acceptable to the Company and equal to the Exercise Price and any required
withholding taxes.

If the Administrator agrees to allow an
optionee to pay through tendering shares of Common Stock to the Company, the
individual can only tender stock he has held for at least six months at the
time of surrender.  Shares of stock
offered as payment will be valued, for purposes of determining the extent to
which the optionee has paid the Exercise Price, at their Fair Market Value on
the date of exercise.  The Administrator
may also, in its discretion, accept attestation of ownership of Common Stock
and issue a net number of shares upon Option exercise, or by having a broker
tender to the Company cash equal to the exercise price and any withholding
taxes.

OPTION
EXPIRATION

No one may exercise an Option more than
ten years after its Date of Grant.  An
Optionee will immediately forfeit and can never exercise any portion of an
Option that is unexercisable at his termination of service-providing
relationship (for any reason), unless the Option Agreement provides otherwise,
either initially or by amendment. 
Unless the Option Agreement provides otherwise, either initially or by
amendment, no one may exercise otherwise exercisable portions of an Option
after the first to occur of:

             EMPLOYMENT TERMINATION

The
90th day after the date of termination of the service-providing relationship
(other than for death or Disability), where termination of service-providing relationship
means the time when the employer-employee or other individual service-providing
relationship between the individual and the Company (and all Related Companies)
ends for any reason.  The Administrator
may provide that Options terminate immediately upon termination of employment
for “cause” under an Employee’s employment or consultant’s services agreement
or under another definition specified in the Option Agreement.  Unless the Option Agreement or the Administrator
provides otherwise, termination of service-providing relationship includes
instances in which the Company immediately rehires a common law employee as an
independent contractor.  The
Administrator, in its sole discretion, will determine all questions of whether
particular terminations or leaves of absence are terminations of employment and
may decide to suspend the exercise schedule during a leave rather than to
terminate the option.

             GROSS MISCONDUCT

For the Company’s termination of the optionee’s
service-providing relationship as a result of the optionee’s Gross Misconduct,
the time of such termination.  For
purposes of this Plan, “Gross Misconduct” means the optionee has

committed
fraud, misappropriation, embezzlement, or willful misconduct that has resulted
or is likely to result in material harm to the Company or a Related Company;

committed
or been indicted for or convicted of, or pled guilty or no contest to, any
misdemeanor (other than for minor infractions or traffic violations) involving
fraud, breach of trust, misappropriation, or other similar activity or
otherwise relating to the Company or any Related Company, or any felony; or

committed
an act of gross negligence or otherwise acted with willful disregard for the
Company’s or a Related Company’s best interests in a manner that has resulted
or is likely to result in material harm to the Company or a Related Company.

If
the optionee has a written employment or other agreement in effect at the time
of his termination that specifies “cause” for termination, “Gross Misconduct”
for purposes of his termination will refer to “cause” under the employment or
other agreement, rather than to the foregoing definition.

          DISABILITY

The
one year anniversary of the optionee’s termination of employment for
disability, where “disability”
means the inability to engage in any substantial gainful activity because of
any medically determinable physical or mental impairment that can be expected
to result in death or that has lasted or can be expected to last for a
continuous period of not less than 12 months, or, if the Company then maintains
long-term disability insurance, the date as of which the individual is eligible
for benefits under that insurance; or

          DEATH

The
first anniversary of the optionee’s date of death.

If exercise is permitted after termination
of service-providing relationship, the Option will nevertheless expire as of
the date that the former service provider violates any covenant not to compete
or other post-employment covenant in effect between the Company or a Related
Company and the former employee or other service provider.

Nothing in this Plan extends the term of
an Option beyond the tenth anniversary of its Date of Grant, nor does anything
in this Option Expiration section
make an Option exercisable that has not otherwise become exercisable, unless
the Administrator specifies otherwise.

OPTION
AGREEMENT

Option Agreements (which could be
certificates) will set forth the terms of each Option and will include such
terms and conditions, consistent with the Plan, as the Administrator may
determine are necessary or advisable. 
To the extent the agreement is inconsistent with the Plan, the Plan will
govern.  The Option Agreements may
contain special rules.

PUT
AND CALL RIGHTS; OTHER RESTRICTIONS

The Administrator may provide in Option
Agreements or other agreements that the Company has the right (or obligation)
to purchase outstanding Options, or the shares received from exercising an
Option, under certain circumstances, including termination of service-providing
relationship for any reason or death and may provide for rights of first
refusal.  The Administrator may
distinguish between unexercisable and exercisable Options.  The Administrator may provide in Option
Agreements that individuals who receive shares from exercising an Option may not
transfer such shares without complying with the agreement’s conditions.

STOCK
SUBJECT TO PLAN

Except as adjusted below under Adjustments upon Changes in Capital Stock,
the aggregate number of shares of Common Stock that may be issued under Options
may not exceed 250,000 shares.

The Common Stock will come from either
authorized but unissued shares or from previously issued shares that the
Company reacquires, including shares it purchases on the open market or holds
as treasury shares.  If any Option expires,
is canceled, or terminates for any other reason, the shares of Common Stock
available under that Option will again be available for the granting of new
Options (but will be counted against that calendar year’s limit, if any, for a
given individual).  Shares used as
payment for the Exercise Price or any required withholdings will be added back
to the totals available for issuance.

No adjustment will be made for a dividend
or other right (except a stock dividend)
for which the record date precedes the date of exercise.

The optionee will have no rights of a
stockholder with respect to the shares of stock subject to an Option except to
the extent that the Company has issued certificates for, or otherwise confirmed
ownership of, such shares upon the exercise of the Option.

The Company will not issue fractional
shares pursuant to the exercise of an Option, unless the Administrator
determines otherwise, but the Administrator may, in its discretion, direct the
Company to make a cash payment in lieu of fractional shares.

PERSON
WHO MAY EXERCISE

During the optionee’s lifetime and except
as provided under Transfers, Assignments, and
Pledges, only the optionee or his duly appointed guardian or
personal representative may exercise the Options.  After his death, his personal representative or any other person
authorized under a will or under the laws of descent and distribution may
exercise any then exercisable portion of an Option.  If someone other than the original recipient seeks to exercise
any portion of an Option, the Administrator may request such proof as it may
consider necessary or appropriate of the person’s right to exercise the Option.

ADJUSTMENTS
UPON CHANGES IN CAPITAL STOCK

Subject to any required action by the
Company (which it agrees to promptly take) or its stockholders, and subject to
the provisions of applicable corporate law, if, after the Date of Grant of an
Option,

the
outstanding shares of Common Stock increase or decrease or change into or are
exchanged for a different number or kind of security because of any
recapitalization, reclassification, stock split, reverse stock split,
combination of shares, exchange of shares, stock dividend, or other
distribution payable in capital stock, or

some
other increase or decrease in such Common Stock occurs without the Company’s
receiving consideration (excluding, unless the Administrator determines
otherwise, stock repurchases),

the Administrator must make a
proportionate and appropriate adjustment in the number of shares of Common
Stock underlying each Option, so that the proportionate interest of the
optionee immediately following such event will, to the extent practicable, be
the same as immediately before such event. 
(This adjustment does not apply to Common Stock that the optionee has
already purchased, which is subject to the adjustments applicable to Common
Stock.)  Unless the Administrator
determines another method would be appropriate, any such adjustment to an
Option will not change the total price with respect to shares of Common Stock
underlying the unexercised portion of the Option but will include a
corresponding proportionate adjustment in the Option’s Exercise Price.  The Board or other Administrator may take
any actions described in this section without any requirement to seek optionee
consent.

The Administrator will make a
commensurate change to the maximum number and kind of shares provided in the Stock Subject to Plan section.

Any issue by the Company of any class of
preferred stock, or securities convertible into shares of common or preferred
stock of any class, will not affect, and no adjustment by reason thereof will
be made with respect to, the number of shares of Common Stock subject to any
Option or the Exercise Price except as this Adjustments
section specifically provides.  The grant
of an Option under the Plan will not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes
of its capital or business structure, or to merge or to consolidate, or to
dissolve, liquidate, sell, or transfer all or any part of its business or
assets.

RELATED
COMPANY EMPLOYEES

Employees of Eligible Affiliates will be
entitled to participatein the Plan, except as otherwise designated by
the Board or the Administrator.

“Eligible Affiliate” means each of the
Related Companies, except as the Administrator otherwise specifies.  “Related Company” means, in general, any
corporation in an unbroken chain of corporations including the Company if, at
the time an Option is granted to a participant under the Plan, each corporation
(other than the last corporation in the unbroken chain) owns stock possessing
50% or more of the total combined voting power of all classes of stock in
another corporation in such chain.  Related
Company also includes a single-member limited liability company included within
the chain described in the preceding sentence. 
The Board or the Administrator may use a different definition of Related
Company and may include other forms of entity at the same level of equity
relationship (or such other level as the Board or the Administrator specifies).

LEGAL
COMPLIANCE

The Company will not issue any shares of
Common Stock under an Option until all applicable requirements imposed by
Federal and state securities and other laws, rules, and regulations, and by any
applicable regulatory agencies or stock exchanges, have been fully met.  To that end, the Company may require the
optionee to take any reasonable action to comply with such requirements before
issuing such shares, including compliance with any Company black-out periods or
trading restrictions.  No provision in
the Plan or action taken under it authorizes any action that Federal or state
laws otherwise prohibit.

The Plan is intended to conform to the
extent necessary with all provisions of the Securities Act of 1933 (“Securities
Act”) and the Securities Exchange Act of 1934 and all regulations
and rules the Securities and Exchange Commission issues under those laws.  Notwithstanding anything in the Plan to the
contrary, the Administrator must administer the Plan, and Options may be
granted and exercised, only in a way that conforms to such laws, rules, and
regulations.  To the extent permitted by
applicable law, the Plan and any Options will be treated as amended to the
extent necessary to conform to such laws, rules, and regulations.

PURCHASE
FOR INVESTMENT AND OTHER RESTRICTIONS

Unless a registration statement under the
Securities Act covers the shares of Common Stock an optionee receives upon
exercising his Option, the Administrator may require, at the time of such
exercise, that the optionee agree in writing to acquire such shares for
investment and not for public resale or distribution, unless and until the
shares subject to the Option are registered under the Securities Act.  Unless the shares are registered under the
Securities Act, the optionee must acknowledge:

that
the shares purchased on exercise of the Option are not so registered, and

that
the optionee may not sell or otherwise transfer the shares unless

such
sale or transfer complies with all applicable laws, rules, and regulations,
including all applicable Federal and state securities laws, rules, and
regulations, and either

the
shares have been registered under the Securities Act in connection with the
sale or transfer thereof, or

counsel
satisfactory to the Company has issued an opinion satisfactory to the Company
that the sale or other transfer of such shares is exempt from registration
under the Securities Act.

Additionally, the Common Stock, when
issued upon the exercise of an Option, will be subject to any other transfer
restrictions, rights of first refusal, rights of repurchase, and voting
agreements set forth in or incorporated by reference into other applicable
documents, including the Option Agreements, or the Company’s articles or
certificate of incorporation, by-laws, or generally applicable stockholders’
agreements.

The Administrator may, in its sole
discretion, take whatever additional actions it deems appropriate to comply
with such restrictions and applicable laws, including placing legends on
certificates and issuing stop- transfer orders to transfer agents and
registrars.

TAX WITHHOLDING

The optionee
must satisfy all applicable Federal, state, and local income and employment tax
withholding requirements before the Company will deliver stock certificates or
otherwise recognize ownership upon the exercise of an Option.  The Company may decide to satisfy the
withholding obligations through additional withholding on salary or wages.  If the Company does not or cannot withhold
from other compensation, the optionee must pay the Company, with a cashier’s
check or certified check, the full amounts, if any, required for
withholding.   Payment of withholding
obligations is due before the Company will issue any shares on exercise or, if
the Administrator so requires, at the same time as is payment of the Exercise
Price.  If the Administrator so
determines, the optionee may instead satisfy the minimum level of withholding
obligations by directing the Company to retain shares from the Option exercise,
by tendering previously owned shares, or by attesting to his ownership of
shares (with the distribution of net shares), or by having a broker tender to
the Company cash equal to the withholding taxes.  Without any requirement to seek an optionee's consent, the
Company may require the optionee to use one or more specified brokerage firms
to exercise and to hold shares received from Options until the later of one
year after exercise or two years after the Date of Grant.

TRANSFERS,
ASSIGNMENTS,
AND
PLEDGES

Unless the Administrator otherwise
approves in advance in writing for estate planning or other purposes, an Option
may not be assigned, pledged, or otherwise transferred in any way, whether by
operation of law or otherwise or through any legal or equitable proceedings
(including bankruptcy), by the optionee to any person, except by will or by
operation of applicable laws of descent and distribution.  If necessary to comply with Rule 16b-3, the
optionee may not transfer or pledge shares of Common Stock acquired upon
exercise of an Option until at least six months have elapsed from (but
excluding) the Date of Grant, unless the Administrator approves otherwise in
advance in writing.  The Administrator
may, in its discretion, expressly provide that an optionee may transfer his
Option, without receiving consideration, to (i) members of his immediate family
(children, grandchildren, or spouse), (ii) trusts for the benefit of such
family members, or (iii) partnerships whose only partners are such family
members.

AMENDMENT
OR TERMINATION OF PLAN AND OPTIONS

The Board may amend, suspend, or
terminate the Plan at any time, without the consent of the optionees or their
beneficiaries; provided, however, that such actions are consistent with
this section.  Except as required by law
or by the SUBSTANTIAL CORPORATE CHANGE
section, the Administrator may not, without the optionee’s or beneficiary’s
consent, modify the terms and conditions of an Option so as to materially
adversely affect the optionee.  No amendment,
suspension, or termination of the Plan will, without the optionee’s or
beneficiary’s consent, terminate or materially adversely affect any right or
obligations under any outstanding Options, except as provided in the SUBSTANTIAL CORPORATE CHANGE Section.

PRIVILEGES
OF STOCK
OWNERSHIP

No optionee and no beneficiary or other
person claiming under or through such optionee will have any right, title, or
interest in or to any shares of Common Stock allocated or reserved under the
Plan or subject to any Option except as to such shares of Common Stock, if any,
already issued to such optionee.

EFFECT
ON OTHER PLANS

Whether exercising an Option causes the
optionee to accrue or receive additional benefits under any pension or other
plan is governed solely by the terms of such other plan.

LIMITATIONS
ON LIABILITY

Notwithstanding any other provisions of
the Plan, no individual acting as a director, officer, other employee, or agent
of the Company will be liable to any optionee, former optionee, spouse, beneficiary,
or any other person for any claim, loss, liability, or expense incurred in
connection with the Plan, nor will such individual be personally liable because
of any contract or other instrument he executes in such other capacity.  The Company will indemnify and hold harmless
each director, officer, other employee, or agent of the Company to whom any
duty or power relating to the administration or interpretation of the Plan has
been or will be delegated, against any cost or expense (including attorneys’ fees)
or liability (including any sum paid in settlement of a claim with the Board’s
approval) arising out of any act or omission to act concerning this Plan unless
arising out of such person’s own fraud or bad faith.

NO
EMPLOYMENT CONTRACT

Nothing contained in this Plan
constitutes an employment contract between the Company and the optionees.  The Plan does not give any optionee any
right to be retained in the Company’s employ, nor does it enlarge or diminish
the Company’s right to end the optionee’s employment or other relationship with
the Company.

APPLICABLE
LAW

The laws of the State of Delaware (other
than its choice of law provisions) govern this Plan and its interpretation.

DURATION
OF PLAN

Unless the Board extends the Plan’s term,
the Administrator may not grant Options after July 11, 2011.  The Plan will then terminate but will
continue to govern unexercised and unexpired Options.

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