Document:

Subordination Agreement between St. Bernard Software, Inc. and Silicon Valley

 Exhibit 10.3 
 SUBORDINATION AGREEMENT 
 This Subordination Agreement (this “Agreement”) dated January 25,
2008, is between Agility Capital, LLC (“Creditor”), and Silicon Valley Bank (“Bank”). 
 Recitals 
 A. St. Bernard Software, Inc. (“Borrower”) has requested and/or obtained credit from Bank which may be secured by its assets and property.

 B. Creditor proposes to extend credit to Borrower and/or may later extend other credit to Borrower. 
 C. To induce Bank to extend credit to Borrower and make further extensions of credit to or for Borrower, or to purchase or extend credit pursuant to any
instrument or writing on which Borrower is liable or to grant renewals or extensions of any loan, extension of credit, purchase, or other accommodation, Creditor will subordinate: (i) all of Borrower’s indebtedness and obligations to
Creditor, existing now or later (the “Subordinated Debt”) to all of Borrower’s indebtedness and obligations to Bank, existing now or later, together with collection costs (including attorneys’ fees), including interest accruing
after any bankruptcy, reorganization or similar proceeding (collectively, the “Senior Debt”); and (ii) all of Creditor’s security interests to all of Bank’s security interests in the Borrower’s property securing the
Senior Debt, each in accordance with the terms of this Agreement. 
 D. In connection with the lien of Borrower granted to Creditor, Creditor
is, among other things, entering into an account control agreement with Bank (referred to herein as the “Creditor ACA”) regarding Borrower’s deposit account or accounts with Bank (“Borrower’s Deposit Accounts”) in order
to perfect Creditor’s lien therein and otherwise to set forth the agreement of the parties with respect to the rights of each of Bank and Creditor with respect to such deposit account or accounts. 
 THE PARTIES AGREE AS FOLLOWS: 
 1. Creditor
subordinates to Bank any security interest or lien that it has in any property of Borrower. Despite attachment or perfection dates of Creditor’s security interest and Bank’s security interest, Bank’s security interest in all assets of
Borrower is prior to Creditor’s security interest. 
 2. All Subordinated Debt payments are subordinated to all of Borrower’s
obligations to Bank for the Senior Debt. Notwithstanding any other term or provision of this Agreement, it is agreed that Obligations under the Senior Debt and related documents and otherwise owing to Bank shall not exceed the following in order to
be regarded as Senior Debt for purposes hereof: 
 Principal debt outstanding in the amount of $2,000,000 (including, without limitation, cash
management credit extensions, and obligations relating to letters of credit, foreign exchange contracts and Deposit Account Accommodations (as defined below)), plus interest, fees, and costs as set forth in the Loan Agreement. 
 3. Except as expressly allowed below pursuant to the provisions of this Section 3, Creditor will not demand or receive from Borrower (and
Borrower will not pay) any part of the Subordinated Debt, by payment, prepayment, or otherwise. Provided however, so long as no Event of Default has occurred and is continuing under any of the documents evidencing the Senior Debt, Creditor may
receive and Borrower may make regularly scheduled payments of both principal and interest on the Subordinated Debt in the amounts currently set forth in the Loan Agreement between Creditor and Borrower dated as of January 25, 2008 a true and correct
final copy of which has been delivered to Bank. 
  

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 4. Creditor will not exercise any remedy against any of Borrower’s property, or accelerate the
Subordinated Debt, or begin to or participate in any action against Borrower in any way related to the Subordinated Debt, until all the Senior Debt is paid. This does not prohibit Creditor from converting any Subordinated Debt into equity securities
of Borrower. 
 5. Creditor must deliver to Bank in the form received (except for endorsement or assignment by Creditor) any payment,
distribution, security or proceeds it receives on the Subordinated Debt other than according to this Agreement. 
 6. These provisions remain
in full force and effect, despite Borrower’s insolvency, reorganization or any case or proceeding under any bankruptcy or insolvency law, and Bank’s claims against Borrower and Borrower’s estate will be fully paid before any payment
is made to Creditor. 
 7. Until the Senior Debt is paid, Creditor irrevocably appoints Bank as its attorney-in-fact, with power of attorney
with power of substitution, in Creditor’s name or in Bank’s name, for Bank’s use and benefit without notice to Creditor, to do the following in any bankruptcy, insolvency or similar proceeding involving Borrower: 
 (i) File any claims for the Subordinated Debt for Creditor if Creditor does not do so at least 10 days before the time to file claims
expires, and 
 (ii) Accept or reject any plan of reorganization or arrangement for Creditor and vote Creditor’s claims
in respect of the Subordinated Debt in any way it chooses. 
 8. Creditor shall immediately affix a legend to the instruments evidencing the
Subordinated Debt stating that the instruments are subject to the terms of this Agreement. No amendment of the documents evidencing or relating to the Subordinated Debt shall directly or indirectly modify the provisions of this Agreement in any
manner which might terminate or impair the subordination of the Subordinated Debt or the subordination of the security interest or lien that Creditor may have in any property of Borrower. By way of example, such instruments shall not be amended to
(i) increase the rate of interest with respect to the Subordinated Debt, or (ii) accelerate the payment of the principal or interest or any other portion of the Subordinated Debt. 
 9. This Agreement is effective while Borrower owes any amounts to Bank. If after full payment of the Senior Debt Bank must disgorge any payments made on
the Senior Debt, this Agreement and the relative rights and priorities provided in it, will be reinstated as to all disgorged payments as though the payments had not been made, and Creditor will immediately pay Bank all payments received under the
Subordinated Debt to the extent the payments would have been prohibited under this Agreement. At any time without notice to Creditor, Bank may take actions it considers appropriate on the Senior Debt such as terminating advances, increasing the
principal, extending the time of payment, increasing interest rates, renewing, compromising or otherwise amending any documents affecting the Senior Debt and any collateral securing the Senior Debt, and enforcing or failing to enforce any rights
against Borrower or any other person. No action or inaction will impair or otherwise affect Bank’s rights under this Agreement. Creditor waives the benefits, if any, of any statutory or common law rule that may permit a subordinating creditor
to assert any defenses of a surety or guarantor, or that may give the subordinating creditor the right to require a senior creditor to marshal assets, and Creditor agrees that it shall not assert any such defenses or rights. 
 10. This Agreement binds Creditor, its successors or assigns, and benefits Bank’s successors or assigns. This Agreement is for Creditor’s and
Bank’s benefit and not for the benefit of Borrower or any other party. If Borrower is refinancing any of the Senior Debt with a new lender, upon Bank’s request of creditor, Creditor will enter into a new subordination agreement with the
new lender on substantially the terms of this Agreement. 
  

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 11. This Agreement may be executed in two or more counterparts, each of which is an original and all of
which together constitute one instrument. 
 12. California law governs this Agreement without regard to principles of conflicts of law.
Creditor and Bank each submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California; provided, however, that nothing in this Agreement shall be deemed to operate to preclude Bank from bringing suit or taking
other legal action in any other jurisdiction to enforce a judgment or other court order in favor of Bank. Creditor expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and Creditor hereby
waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Creditor hereby
waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to Creditor at the
address set forth below and that service so made shall be deemed completed upon the earlier to occur of Creditor’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid. 
 TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, CREDITOR AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING
OUT OF OR BASED UPON THIS AGREEMENT 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. 
 WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL
BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge,
mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable
provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court. The reference
proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive. The private judge shall have the power, among others, to grant provisional relief,
including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential and all records relating thereto shall
be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the Santa Clara
County, California Superior Court for such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings. The parties shall be
entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings. The private judge shall oversee discovery and may enforce all discovery rules and order
applicable to judicial proceedings in the same manner as a trial court judge. The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall
report a statement of decision thereon pursuant to the California Code of Civil Procedure § 644(a). Nothing in this paragraph shall limit the right of any party at any time to exercise self-help remedies, foreclose against collateral, or obtain
provisional remedies. The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph. 
 13. This Agreement is the entire agreement about this subject matter, and supersedes prior negotiations or agreements. Creditor is not relying on any representations by Bank or Borrower in entering into this
Agreement. Creditor will keep itself informed of Borrower’s financial and other conditions. This Agreement may be amended only by written instrument signed by Creditor and Bank. 
  

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 14. If there is an action to enforce the rights of a party under this Agreement, the party prevailing
will be entitled, in addition to other relief, all reasonable costs and expenses, including reasonable attorneys’ fees, incurred in the action. 
 15. Each undersigned party hereby represents and warrants that (a) the execution and delivery of this Agreement and the consummation of the transactions contemplated herein have each been duly authorized by all
necessary action on the part of such party and (b) this Agreement has been duly executed and delivered and constitutes a legal, valid and binding obligation of such party, enforceable in accordance with its terms. 
  

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	“Creditor:	 		 	“Bank”
	AGILITY CAPITAL, LLC	 		 	SILICON-VALLEY BANK
					
	By:	 	/s/ Daniel Corry	 		 	By:	 	/s/ Derek Brunelle
	Title:	 	Chief operating officer	 		 	Title:	 	Relationship Manager
		 		 		 		 	
	Address:	 	 226 E. Canal Perdido
 Suite F
 Santa Barbara, CA 93110
	 		 	Address:	 	 4445 Eastgate Mall
 Suite 100
 San Diego, CA 92121

	Telephone:	 	(805) 568-0425	 		 	Telephone	 	(858) 784-3311
	Facsimile:	 	(805) 568-0427	 		 	Facsimile:	 	 

 The Borrower acknowledges the terms of this Agreement. 
  

			
	“Borrower”
	ST. BERNARD SOFTWARE, INC.
		
	By:	 	/s/ Vincent Rossi
	Title:	 	CEO

  

 5Third Amendment to Loan and Security Agreement between St. Bernard Software, Inc

 Exhibit 10.4 
 THIRD AMENDMENT 
 TO 
 LOAN AND SECURITY AGREEMENT 
 THIS THIRD AMENDMENT to Loan and Security
Agreement (this “Amendment”) is entered into this 25th day of January 2008, by and between Silicon Valley Bank (“Bank”) and ST. BERNARD SOFTWARE, INC., a Delaware corporation (“Borrower”) whose address is 15015 Avenue
of Science, San Diego, CA 92128. 
 RECITALS 
 A. Bank and Borrower have entered into that certain Loan and Security Agreement dated as of May 11, 2007 as amended by that certain First
Amendment to Loan and Security Agreement dated as of July 9, 2007 and that certain Second Amendment to Loan and Security Agreement dated as of August 13, 2007 (as the same may from time to time be further amended, modified, supplemented or
restated, the “Loan Agreement”). 
 B. Bank has extended credit to Borrower for the purposes permitted in the Loan
Agreement. 
 C. Borrower has requested that Bank amend the Loan Agreement to (i) reduce the amount of the Revolving Line, and
(ii) make certain other revisions to the Loan Agreement as more fully set forth herein. 
 D. Bank has agreed to so amend certain
provisions of the Loan Agreement, but only to the extent, in accordance with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below. 
 AGREEMENT 
 NOW, THEREFORE,
in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows: 
 1. Definitions. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.

 2. Amendments to Loan Agreement. 
 2.1 Section 2.1.1 (Revolving Advances). A Sentence is hereby added to the end of Section 2.1.1(a) as follows: 
 “Notwithstanding the foregoing, on January 25, 2008 or as soon thereafter as is practical, Bank shall make an Advance to
Borrower to refinance all outstanding Indebtedness owing from Borrower to Bank with respect to Term Loan Advances made to Borrower hereunder and thereafter Borrower shall not be permitted to request any additional Term Advances hereunder.”

 2.2 Section 2.3(a) (Interest Rate). Section 2.3(a) is amended in its
entirety and replaced with the following: 
 “(a) Interest Rate. Subject to Section 2.3(b), the amounts outstanding under the
Revolving Line shall accrue interest at a per annum rate equal to three percentage points (3.00%) above the Applicable Rate, which interest shall be payable monthly.” 
 2.3 Section 2.4 (Fees). Section 2.4(a) is amended in its entirety and replaced with the following: 
 (i) Commitment Fee. A fully earned, non-refundable commitment fee of Twenty Thousand Dollars ($20,000), on each yearly anniversary
of the Effective Date; 
 2.4 Section 6.9(a) (Tangible Net Worth). Section 6.9(a) is amended in its entirety
and replaced with the following: 
 “(a) Tangible Net Worth. A Tangible Net Worth not less than (i) negative Seventeen
Million Two Hundred Thousand Dollars ($17,200,000) at all times until May 31, 2008, (ii) negative Seventeen Million Eight Hundred Thousand Dollars ($17,800,000) at all times from June 1, 2008 through June 30, 2008,
(iii) negative Eighteen Million Dollars ($18,000,000) at all times from July 1, 2008 through August 31, 2008, (iv) negative Eighteen Million Four Hundred Thousand Dollars ($18,400,000) at all times from September 1, 2008
through September 30, 2008, (v) negative Eighteen Million Six Hundred Thousand Dollars ($18,600,000) at all times from October 1, 2008 through October 31, 2008, (vi) negative Eighteen Million Eight Hundred Thousand Dollars
($18,800,000) at all times from November 1, 2008 through November 30, 2008 and (vii) negative Nineteen Million Dollars ($19,000,000) at all times from December 1, 2008 through December 31, 2008, in each case, increasing
quarterly by fifty percent (50%) of Net Income and monthly by fifty percent (50%) of issuances of equity after February 8, 2008 and the principal amount of Subordinated Debt received after February 8, 2008.” 
 2.5 Section 8.7 (Judgments). Section 8.7 of the Loan Agreement is amended by substituting “Ninety-Nine Thousand
Dollars ($99,000)” for “Fifty Thousand Dollars ($50,000)” in the second line thereof. 
 2.6
Section 12.1 (Termination Prior to Revolving Line Maturity Date). Section 12.1 is amended in its entirety and replaced with the following: 
 “Termination Prior to Revolving Line Maturity Date. This Agreement may be terminated prior to the Revolving Line Maturity Date by Borrower, effective three (3) Business Days after written
notice of 
  

 2 

 
termination is given to Bank. Notwithstanding any such termination, Bank’s lien and security interest in the Collateral shall continue until Borrower
fully satisfies its Obligations (other than inchoate indemnity obligations and cash collateralized Letters of Credit extending beyond the termination date of this Agreement). If such termination is at Borrower’s election or at Bank’s
election due to the occurrence and continuance of an Event of Default, Borrower shall pay to Bank, in addition to the payment of any other expenses or fees then-owing, a termination fee in an amount equal to Eighty Thousand Dollars ($80,000) (the
“Early Termination Fee”). The Early Termination Fee shall be due and payable on the effective date of such termination and thereafter shall bear interest at a rate equal to the highest rate applicable to any of the Obligations.
Notwithstanding the foregoing, Bank agrees to waive the Early Termination Fee if Bank agrees to refinance and redocument this Agreement under another division of Bank (in its sole and exclusive discretion) prior to the “Revolving Line Maturity
Date.” 
 2.7 Section 13 (Definitions). The following terms and their definitions set forth in
Section 13.1 are added or amended in their entirety and replaced with the following: 
 “Borrowing
Base” means (i) seventy percent (70%) of Eligible Accounts and (ii) sixty percent (60%) of Advanced Billing Accounts, as determined by Bank from Borrower’s Transaction Report submitted at the end of the most
recently ended month; provided, however, that Bank may, with notice to Borrower, decrease the foregoing percentage in its good faith business judgment based on events, conditions, contingencies, or risks which, as determined by Bank, may adversely
affect Collateral. 
 “Revolving Line” is an Advance or Advances in an amount up to Two Million Dollars
($2,000,000). 
 “Revolving Line Maturity Date” is May 15, 2009. 
 2.8 Section 13 (Definitions). A new subsection (j) is hereby added to the definition of “Permitted Liens” set
forth in Section 13.1 as follows: 
 “(j) Liens incurred in connection with Subordinated Debt.” 
 2.9 Exhibit A to the Agreement is hereby replaced with Exhibit A attached hereto. 
 2.10 Exhibit C to the Agreement is hereby replaced with Exhibit C attached hereto. 
 3. Limitation of Amendments. 
 3.1 The amendments set forth in Section 2, above, are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or
modification of any other term or 

  

 3 

 
condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the future under or in connection
with any Loan Document. 
 3.2 This Amendment shall be construed in connection with and as part of the Loan Documents
and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect. 
 4. Representations and Warranties. To induce Bank to enter into this Amendment, Borrower hereby represents and warrants to Bank as follows:

 4.1 Immediately after giving effect to this Amendment (a) the representations and warranties contained in the
Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and
(b) no Event of Default has occurred and is continuing; 
 4.2 Borrower has the power and authority to execute and
deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment; 
 4.3
The organizational documents of Borrower delivered to Bank on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect; 
 4.4 The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan
Agreement, as amended by this Amendment, have been duly authorized; 
 4.5 The execution and delivery by Borrower of
this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual
restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower;

 4.6 The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations
under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or
subdivision thereof, binding on either Borrower, except as already has been obtained or made; and 
 4.7 This Amendment
has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in 

  

 4 

 
accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar
laws of general application and equitable principles relating to or affecting creditors’ rights. 
 5. Counterparts. This
Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument. 
 6. Effectiveness. This Amendment shall be effective as of the date first written above upon (a) the due execution and delivery to Bank of this Amendment by each party hereto, (b) the due execution and
delivery to Bank of an Intellectual Property Security Agreement and a Warrant by Borrower; (d) receipt by Bank of an amendment fee in the amount of Twenty Thousand Dollars ($20,000) and (e) delivery by Borrower to Bank of a Subordination
Agreement from all holders of Subordinated Debt. 
 [Signature page follows.] 
  

 5 

 IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed and delivered as of the date first written above. 
  

									
	BANK	 		 	BORROWER
			
	SILICON VALLEY BANK	 		 	ST. BERNARD SOFTWARE, INC.
					
	By:	 	/s/ Derek Brunelle	 		 	By:	 	/s/ Vincent Rossi
	Name: 	 	Derek R. Brunelle	 		 	Name: 	 	Vincent A. Rossi
	Title:	 	Relationship Manager	 		 	Title:	 	CEO

 EXHIBIT A 
 The Collateral consists of all of Borrower’s right, title and interest in and to the following personal property: 
 All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles, commercial tort
claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities,
and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and 
 all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products,
proceeds and insurance proceeds of any or all of the foregoing. 
 Notwithstanding the foregoing, the Collateral does not include any of the
following, whether now owned or hereafter acquired: (i) more than 65% of the presently existing and hereafter arising issued and outstanding shares of capital stock owned by Borrower of any Foreign Subsidiary which shares entitle the holder
thereof to vote for directors or any other matter or (ii) the Evault Assets. 

 EXHIBIT C 
 COMPLIANCE CERTIFICATE 
  

									
	TO:	 	SILICON VALLEY BANK	 		 		 	Date:                            
	FROM:	 	ST. BERNARD SOFTWARE, INC.	 		 		 	

 The undersigned authorized officer of ST. BERNARD SOFTWARE, INC. (“Borrower”) certifies
that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for the period ending
                     with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations
and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date,
(4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as
otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not
previously provided written notification to Bank. Attached are the required documents supporting the certification. The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as
explained in an accompanying letter or footnotes and except as otherwise permitted in the Agreement. The undersigned 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. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement. 
 Please indicate compliance status by circling Yes/No under “Complies” column. 
  

					
	 Reporting Covenant
	  	 Required
	  	Complies
	 Monthly financial statements with
 Compliance Certificate

	  	Monthly within 30 days	  	Yes No
	Annual Projections	  	FYE within 45 days	  	Yes No
	10-Q, 10-K and 8-K	  	Within 5 days after filing with SEC	  	Yes No
	A/R & A/P Agings, Deferred Revenue Report	  	Monthly within 15 days	  	Yes No
	Transaction Report	  	(A) the more frequent of weekly or with each Advance request when there are Advances outstanding or (B) if there are no Advances outstanding, within fifteen (15) days after the end each month
	  	Yes No

  

							
	 Financial Covenant
	  	 Required
	  	 Actual
	  	 Complies

	 Maintain on a Monthly Basis:
	  		  		  	
	 Minimum Tangible Net Worth
	  	$                    *	  	$                    	  	Yes  No

  

	*	A Tangible Net Worth not less than (i) negative Seventeen Million Two Hundred Thousand Dollars ($17,200,000) at all times until May 31,2008, (ii) negative Seventeen
Million Eight Hundred Thousand Dollars ($17,800,000) at all times from June 1, 2008 through June 30,2008, (iii) negative Eighteen Million Dollars ($18,000,000) at all times from July 1, 2008 through August 31, 2008,
(iv) negative Eighteen Million Four Hundred Thousand Dollars ($18,400,000) at all times from September 1, 2008 through September 30, 2008, (v) negative Eighteen Million Six Hundred Thousand Dollars ($18,600,000) at all times from
October 1, 2008 

	 	 
through October 31,2008, (vi) negative Eighteen Million Eight Hundred Thousand Dollars ($18,800,000) at all times from November 1, 2008
through November 30,2008 and (vii) negative Nineteen Million Dollars ($19,000,000) at all times from December 1,2008 through December 31, 2008, in each case, increasing quarterly by fifty percent (50%) of Net Income and
monthly by fifty percent (50%) of issuances of equity after February 8,2008 and the principal amount of Subordinated Debt received after February 8, 2008. 

 The following financial covenant analysis and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this
Certificate. 
 The following are the exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions
to note.”) 
                                       
                                        
                                        
                                        
                                        
                                        
                    
                                       
                                        
                                        
                                        
                                        
                                        
                    
 ________________________ 

 

									
	ST. BERNARD SOFTWARE, INC	 		 	BANK USE ONLY
				
		 		 	Received by:	 	 
	By:	 	 	 		 		 	AUTHORIZED SIGNER
	Name:	 	 	 		 	Date:	 	 
	Title:	 	 	 		 		 	
		 		 		 	Verified:	 	 
		 		 		 		 	AUTHORIZED SIGNER
		 		 		 	Date:	 	 
		 		 		 		 	
		 		 		 	Compliance Status:	 	Yes  No

 Schedule 1 to Compliance Certificate 
 Financial Covenants of Borrower 
 In the event of a conflict between this Schedule and
the Loan Agreement, the terms of the Loan Agreement shall govern. 
 Dated:
                     
 Tangible Net Worth
(Section 6.9(a)) 
 Required: A Tangible Net Worth not less than (i) negative Seventeen Million Two Hundred Thousand Dollars ($17,200,000) at all
times until May 31, 2008, (ii) negative Seventeen Million Eight Hundred Thousand Dollars ($17,800,000) at all times from June 1,2008 through June 30, 2008, (iii) negative Eighteen Million Dollars ($18,000,000) at all times
from July 1, 2008 through August 31, 2008, (iv) negative Eighteen Million Four Hundred Thousand Dollars ($18,400,000) at all times from September 1,2008 through September 30,2008, (v) negative Eighteen Million Six
Hundred Thousand Dollars ($18,600,000) at all times from October 1, 2008, through October 31, 2008, (vi) negative Eighteen Million Eight Hundred Thousand Dollars ($18,800,00’0) at all times from November 1,2008 through
November 30, 2008 and (vii) negative Nineteen Million Dollars ($19,000,000) at all times from December 1, 2008 through December 31, 2008, in each case, increasing quarterly by fifty percent (50%) of Net Income and monthly by
fifty percent (50%) of issuances of equity after February 8, 2008 and the principal amount of Subordinated Debt received after February 8, 2008. 
 Actual: 
  

				
	A. Aggregate net worth of Borrower	  	$	            
		
	B. Aggregate value of intangible assets of Borrower	  	$	            
		
	C. Aggregate Subordinated Debt	  	$	            
		
	D. Tangible Net Worth (line A minus line B plus line C)	  	$	            

 Is line D equal to or greater than the dollar amount required above? 
              No, not in compliance
                                        
                             Yes, in compliance

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}]]