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EXHIBIT 10.32
SUBORDINATION AGREEMENT
(All Indebtedness and Liens)
Versant Corporation ("Borrower") is indebted to the undersigned
("Creditor") in the principal sum of ______ Dollars ( $3,619,000 ) evidenced by
___an open account [X] promissory note ___ other (describe) ____ which
indebtedness is ___ unsecured [X] secured by Borrower's Assets , and Creditor is
or may become financially interested in borrower and desires to aid Borrower in
obtaining or having continued financial accommodations, whether by way of loan,
commitment to loan, discounting of instruments, extensions of credit or the
obtaining of any other financial aid from Comerica Bank-California ("Bank").
In order to induce the Bank to extend or to continue to extend financial
accommodations to Borrower from time to time, whether by way of a loan,
commitment to loan, discounting of instruments, extension of credit or otherwise
and in consideration of any of these financial accommodations, Creditor agrees
as follows:
1. Any and all obligations and liabilities of Borrower to Creditor, including,
without limit, principal and interest, whether direct or indirect, absolute or
contingent, joint or several, secured or unsecured, due or to become due, now
existing or later arising and whatever the amount and however evidenced (the
"Subordinated Indebtedness"), are subordinated in right of payment to any and
all obligations and liabilities of Borrower. to the Bank, including, without
limit, principal and interest payments whether direct or indirect, absolute or
contingent, joint or several, secured or unsecured, due or to become due, now
existing or later arising and however evidenced, together with all other sums
due thereon and all costs of collecting the same (including, without limit,
reasonable attorney fees) for which Borrower is liable (the "Senior
Indebtedness").
2. Except for the conversion of the Subordinated Indebtedness into equity
securities of Borrower (upon which Creditor shall terminate its security
interest in any of Borrower's property) Creditor will not ask for, demand, xxx
for, take or receive (by way of voluntary payment, acceleration, set-off or
counterclaim, foreclosure or other realization on security, dividends in
bankruptcy or otherwise), or offer to make any discharge or release of, any of
the Subordinated Indebtedness, and Creditor waives any such rights with respect
to the Subordinated Indebtedness nor shall Creditor exercise any rights of
subrogation or other similar rights with respect to the Senior Indebtedness.
3. Creditor will not exercise any of Creditor's rights in any collateral now or
later securing the Subordinated Indebtedness. All rights of Creditor in any
collateral now or later securing the Subordinated Indebtedness are subordinated
to all rights of the Bank now or later existing in any of the same collateral
securing the Senior Indebtedness.
4. Should any payment, distribution or security or proceeds from these be
received by Creditor upon or with respect to the Subordinated Indebtedness prior
to the satisfaction in full of the
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Senior Indebtedness, Creditor shall immediately deliver same to the Bank in the
form received (except for endorsement or assignment by Creditor where required
by the Bank), for application on the Senior Indebtedness (whether or not then
due and in such order of maturity as Bank elects) and, until so delivered, the
same shall be held in trust by Creditor as the property of the Bank.
5. Creditor represents and warrants that it has not made or permitted to be made
and shall not make or permit any assignment, transfer, pledge, or disposition
for collateral purposes or otherwise, of all or any part of the Subordinated
Indebtedness or any collateral or other security for the Subordinated
Indebtedness so long as this Agreement remains in effect. 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 of 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.
6. This Agreement constitutes a continuing agreement of subordination, even
though at times Borrower is not indebted to the Bank. The Bank may continue, in
reliance on this Agreement, without notice to Creditor, to lend monies, extend
credit, modify, renew or make other financial accommodations, to or for the
account of Borrower until the fifth (5th) day ("effective date") following
written acknowledgment by an officer of the Bank that the Bank received written
notice of revocation of this Agreement from Creditor. Any such notice of
revocation shall not be effective as to any Senior Indebtedness existing at the
effective date of revocation or any Senior Indebtedness created after that
pursuant to any commitment or agreement of the Bank or pursuant to any Borrower
loan (whether advances or readvances by the Bank after the effective date of
revocation are optional or obligatory) existing at the effective date of
revocation or any modifications or renewals of any Senior Indebtedness, whether
in whole or in part. Possession by the Bank of any note or other evidence of
indebtedness made, endorsed or guaranteed by Borrower shall be conclusive
evidence (but not the only means of establishing) that Borrower is indebted to
the Bank.
7. Creditor shall indemnify the Bank against all claims, damages, costs, and
expenses, including, without limit, reasonable attorneys' fees, incurred by the
Bank in connection with any suit, claim or action against the Bank arising out
of any modification or termination of a Borrower loan or any refusal by the Bank
to extend additional credit relating to the revocation of this Agreement.
8. Creditor delivers this Agreement based solely on Creditor's independent
investigation of (or decision not to investigate) the financial condition of the
Borrower and is not relying on any information furnished by the Bank. Creditor
assumes full responsibility for obtaining any further information concerning the
Borrower's financial condition, the status of the Senior Indebtedness or any
other matter which Creditor may deem necessary or appropriate now or later.
Creditor waives any duty on the part of the Bank, and agrees that Creditor is
not relying upon nor expecting the Bank to disclose to Creditor any fact now of
later known by the Bank, whether
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relating to the operations or condition of the Borrower, the existence,
liabilities or financial condition of any guarantor of the Senior Indebtedness,
the occurrence of any default with respect to the Senior Indebtedness, or
otherwise, notwithstanding any effect such fact may have upon Creditor's risk or
Creditor's rights against the Borrower. Creditor knowingly accepts the full
range of risk encompassed in this Agreement, which risk includes, without limit,
the possibility that the Borrower may incur Senior Indebtedness to the Bank
after the financial condition of the Borrower, or its ability to pay Borrower's
debts as they mature, has deteriorated. Creditor acknowledges and agrees that
the Bank's rights under this Agreement are not conditioned upon pursuit by the
Bank of any remedy the Bank may have against the Borrower or any other person or
any other security. The absence of Borrower's signature at the end of this
Agreement shall in no way impair or affect the validity of this Agreement.
9. The Bank, in its sole discretion, without notice to Creditor, may release,
exchange, enforce and otherwise deal with any security now or later held by the
Bank for payment of the Senior Indebtedness or release any party now or later
liable for payment of the Senior Indebtedness without affecting in any manner
the Bank's rights under this Agreement. Creditor acknowledges and agrees that
the Bank has no obligation to acquire or perfect any lien on or security
interest in any asset(s), whether realty or personalty, to secure payment of the
Senior Indebtedness, and Creditor is not relying upon assets in which the Bank
has or may have a lien or security interest for payment of the Senior
Indebtedness.
10. Notwithstanding any prior revocation, termination, surrender, or discharge
of this Agreement in whole or in part, the effectiveness of this Agreement shall
automatically continue or be reinstated in the event that any payment received
or credit given by the Bank in respect of the Senior Indebtedness is returned,
disgorged, or rescinded under any applicable state or federal law, including,
without limitation, laws pertaining to bankruptcy or insolvency, in which case
this Agreement, shall be enforceable against the Creditor as if the returned,
disgorged, or rescinded payment or credit had not been received or given by the
Bank, and whether or not the Bank relied upon this payment or credit or changed
its position as a consequence of it. In the event of continuation or
reinstatement of this Agreement, the Creditor agrees upon demand by the Bank to
execute and deliver to the Bank those documents which the Bank determines are
appropriate to further evidence (in the public records or otherwise) this
continuation or reinstatement, although the failure of the Creditor to do so
shall not affect in any way the reinstatement or continuation.
11. Creditor waives any right to require the Bank to: (a) proceed against any
person or property; (b) give notice of the terms, time and place of any public
or private sale of personal property security held from the Borrower or any
other person, or otherwise comply with the provisions of Section 9-504 of any
applicable Uniform Commercial Code; or (c) pursue any other remedy in the Bank's
power. Creditor waives notice of acceptance of this Agreement and presentment,
demand, protest, notice of protest, dishonor, notice of dishonor, notice of
default, notice of intent to accelerate or demand payment of any Senior
Indebtedness, any and all other notices to which the undersigned might otherwise
be entitled, and diligence in collecting any Senior Indebtedness, and agrees
that the Bank may, once or any number of times, modify the terms of any Senior
Indebtedness, compromise, extend, increase, accelerate, renew or forbear to
enforce payment of any or all Senior Indebtedness, or permit the Borrower to
incur additional Senior Indebtedness,
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all without notice to Creditor and without affecting in any manner the
unconditional obligations of Creditor under this Agreement.
12. Creditor acknowledges that the Bank has the right to sell, assign, transfer,
negotiate or grant participations or any interest in, any or all of the Senior
Indebtedness and any related obligations, including without limit this
Agreement. In connection with the above, but without limiting its ability to
make other disclosures to the full extent allowable, the Bank may disclose all
documents and information which the Bank now or later has or acquires relating
to Creditor and this Agreement, however obtained. Creditor further agrees that
the Bank may disclose such documents and information to the Borrower. Creditor
agrees that the Bank may provide information relating to this Subordination
Agreement or to the undersigned to the Bank's parent, affiliates, subsidiaries
and service providers.
13. No waiver or modification of any of its rights under this Agreement shall be
effective unless the waiver or modification shall be in writing and signed by an
authorized officer on behalf of the Bank, and each waiver or modification shall
be a waiver or modification only with respect to the specific matter to which
the waiver or modification relates and shall in no way impair the rights of the
Bank or the obligations of Creditor to the Bank in any other respect.
14. This Agreement shall bind and be for the benefit of Creditor and the Bank
and their respective successors and assigns, and shall be construed according to
the laws of the State of California without regard to conflict of laws
principles. If this Agreement is executed by two or more persons, it shall bind
each of them individually as well as jointly. Creditor further agrees, upon
Bank's request to enter into a new subordination agreement with any person
refinancing the Senior Indebtedness or assuming Bank's rights and obligations
with respect to the Senior Indebtedness (plus an additional principal amount of
not more than $4,000,000), which agreement will contain substantially the terms
and condition of this Agreement.
15. The term "Borrower", as used in this Agreement, includes any person,
corporation, partnership or business entity which succeeds to the interests or
business of the Borrower named above, and the terms "Senior Indebtedness" and
"Subordinated Indebtedness" include indebtedness of any successor Borrower to
the Bank and Creditor.
16. Creditor agrees to reimburse the Bank for any and all costs and expenses
(including, without limit, court costs, legal fees, and reasonable attorney fees
whether inside or outside counsel is used, whether or not suit is instituted
and, if instituted, whether at the trial or appellate level, in a bankruptcy,
probate or administrative proceeding, or otherwise) incurred in enforcing any of
the duties and obligations of Creditor under this Agreement.
17. Creditor waives any defense against the enforceability of this Agreement
based upon or arising by reason of the application by the Borrower of the
proceeds of any Indebtedness for purposes other than the purposes represented by
the Borrower to the Bank or intended or understood by the Bank or Creditor.
Creditor waives all rights to require the Bank to xxxxxxxx the Collateral or any
other property the Bank may at any time have as security for the Indebtedness
and waives all right to require the Bank to first proceed against any guarantor
or other person before proceeding against the Collateral.
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18. The relative priorities of the Bank and Creditor in the Collateral as set
forth in this Agreement control irrespective of the time, method or order of
attachment or perfection of the liens and security interests acquired by the
parties in the Collateral and irrespective of the priorities as would otherwise
be determined by reference to the Uniform Commercial Code or other applicable
laws. Creditor shall not contest the validity, priority or perfection of the
Bank's security interest in the Collateral (regardless of whether the Bank's
security interest in the Collateral is valid or perfected). The priorities of
any liens or security interests of the parties in any property of the Borrower
other than the Collateral are not affected by this Agreement and shall be
determined by reference to applicable law. The Bank's rights under this
Agreement are in addition to, and not in substitution of, its rights under any
other subordination agreement with Creditor.
19. Special Provisions: * None if left blank.
THE UNDERSIGNED AND THE BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTION ALONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN
ANY WAY RELATED TO, THIS AGREEMENT.
IN WITNESS WHEREOF, Creditor has caused this Agreement to be executed as of
October 16, 1998 (date)
Vertex Technology Fund Pte. Ltd. CREDITOR'S ADDRESS
CREDITOR
BY:___________________________ _____________________________
SIGNATURE OF STREET ADDRESS
ITS:___________________________ _____________________________
TITLE (if applicable) CITY STATE ZIP
BY:___________________________
SIGNATURE OF
ITS:___________________________
TITLE (if applicable)
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Versant Corporation
("Borrower"), accepts notice of subordination created by this Agreement and
agrees that it will take no action inconsistent with this Agreement and that,
except with the prior written approval of Bank, no payment or distribution shall
be made by Borrower on or with respect to the Subordinated Indebtedness, so long
as this Agreement remains in effect. Borrower agrees that the Bank may, at its
option, without notice and without limiting Bank's other rights, upon any breach
by Creditor of, or purported termination by the Creditor of, this Agreement,
declare all Senior Indebtedness to be immediately due and payable and/or
terminate any commitments of Bank to Borrower.
Versant Corporation BORROWER'S ADDRESS
BORROWER
BY:___________________________ _____________________________
SIGNATURE OF STREET ADDRESS
ITS:___________________________ _____________________________
TITLE (if applicable) CITY STATE ZIP
BY:___________________________
SIGNATURE OF
ITS:___________________________
TITLE (if applicable)
BY:___________________________
SIGNATURE OF
ITS:___________________________
TITLE (if applicable)
BY:___________________________
SIGNATURE OF
ITS:___________________________
TITLE (if applicable)
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