EXHIBIT 10.1 LOAN AND SECURITY AGREEMENT THIS LOAN AND SECURITY AGREEMENT (this “AGREEMENT”) dated as of theEffective Date between SILICON VALLEY BANK, a California corporation (“BANK”),and COMMVAULT SYSTEMS, INC., a Delaware corporation (“BORROWER”), provides theterms on which Bank shall lend to Borrower and Borrower shall repay Bank. Theparties agree as follows: 1. ACCOUNTING AND OTHER TERMS Accounting terms not defined in this Agreement shall be construed followingGAAP. Calculations and determinations must be made following GAAP. Capitalizedterms not otherwise defined in this Agreement shall have the meanings set forthin Section 13. All other terms contained in this Agreement, unless otherwiseindicated, shall have the meaning provided by the Code to the extent such termsare defined therein. 2. LOAN AND TERMS OF PAYMENT 2.1 PROMISE TO PAY. Borrower hereby unconditionally promises to pay Bankthe outstanding principal amount of all Credit Extensions and accrued and unpaidinterest thereon as and when due in accordance with this Agreement. 2.1.1 TERM LOAN. (a) Availability. Bank shall make one (1) term loan available on orafter the Effective Date but no later than the earlier of (i) five (5) BusinessDays following Borrower closing on an initial public offering or (ii) July 31,2006 to Borrower in an amount up to the Term Loan Amount, subject to thesatisfaction of the terms and conditions of this Agreement. (b) Repayment. Commencing on June 1, 2006 and on the first (1st) dayof each quarter thereafter, Borrower shall repay the Term Loan in (i) equalinstallments of principal, which would fully amortize the Term Loan over atwenty-four (24) month period, plus (ii) accrued interest ((i) and (ii)collectively, the “TERM LOAN PAYMENT”). Borrower’s final Term Loan Payment, dueon the Term Loan Maturity Date, shall include all outstanding principal andaccrued and unpaid interest under the Term Loan. 2.2 GENERAL PROVISIONS RELATING TO THE CREDIT EXTENSION. Borrower shall payinterest accrued on the Credit Extension at the rates and in the manner setforth in Section 2.3(b). 2.3 PAYMENT OF INTEREST ON THE CREDIT EXTENSION. (a) Computation of Interest. Interest on the Credit Extension and allfees payable hereunder shall be computed on the basis of a 360-day year and theactual number of days elapsed in the period during which such interest accrues.In computing interest on any Credit Extension, the date of the making of suchCredit Extension shall be included and the dateof payment shall be excluded; provided, however, that if any Credit Extension isrepaid on the same day on which it is made, such day shall be included incomputing interest on such Credit Extension. (b) The Term Loan. The Term Loan shall bear interest on theoutstanding principal amount thereof from the date when made, continued orconverted until paid in full at a rate per annum equal to the LIBOR Rate plusthe LIBOR Rate Margin. (c) Default Interest. Except as otherwise provided in Section 2.3(b),after an Event of Default or after acceleration of the Obligations, Obligationsshall bear interest at a rate per annum which is five percent (5.00%) above therate effective immediately before the Event of Default (the “DEFAULT RATE”).Payment or acceptance of the increased interest provided in this Section is nota permitted alternative to timely payment and shall not constitute a waiver ofany Event of Default or otherwise prejudice or limit any rights or remedies ofBank. (d) Debit of Accounts. Bank may debit any of Borrower’s depositaccounts, including the Designated Deposit Account, for principal and interestpayments when due, or any other amounts Borrower owes Bank, when due. Bank shallpromptly notify Borrower after it debits Borrower’s accounts. These debits shallnot constitute a set-off. 2.4 FEES. Borrower shall pay to Bank all Bank Expenses (includingreasonable attorneys’ fees and expenses, plus expenses for documentation andnegotiation of this Agreement) incurred through and after the Effective Date,immediately upon receipt of an invoice therefore. 3. CONDITIONS OF LOANS 3.1 CONDITIONS PRECEDENT TO CREDIT EXTENSION. Bank’s obligation to make theCredit Extension is subject to the condition precedent that Bank shall havereceived, in form and substance satisfactory to Bank, such documents, andcompletion of such other matters, as Bank may reasonably deem necessary orappropriate, including, without limitation: (a) Borrower shall have delivered duly executed original signatures tothe Loan Documents to which it is a party; (b) Borrower shall have delivered duly executed original signatures tothe Control Agreement; (c) Borrower shall have delivered its Operating Documents and a goodstanding certificate of Borrower certified by the Secretary of State of theState of Delaware and the Secretary of State of the State of New Jersey as of adate no earlier than thirty (30) days prior to the Effective Date; (d) Borrower shall have delivered duly executed original signatures tothe completed Borrowing Resolutions for Borrower; (e) Bank shall have received certified copies, dated as of a recentdate, of financing statement searches, as Bank shall request, accompanied bywritten evidence (including 2any UCC termination statements) that the Liens indicated in any such financingstatements either constitute Permitted Liens or have been or, in connection withthe Credit Extension, will be terminated or released; (f) Borrower shall have delivered the Perfection Certificate executedby Borrower; (g) Borrower shall have delivered the insurance policies and/orendorsements required pursuant to Section 6.4 hereof evidence satisfactory toBank that the insurance policies required by Section 6.4 hereof are in fullforce and effect, together with appropriate evidence showing loss payable and/oradditional insured clauses or endorsements in favor of Bank; and (h) Borrower shall have paid the fees and Bank Expenses specified inSection 2.4 hereof. 3.2 PROCEDURE FOR THE BORROWING OF CREDIT EXTENSIONS. Subject to the prior satisfaction of all other applicable conditions to themaking of the Term Loan set forth in this Agreement, the Term Loan shall be madeupon Borrower’s irrevocable written notice delivered to Bank in the form of aNotice of Borrowing, executed by a Responsible Officer of Borrower or his or herdesignee. Bank may rely on any telephone notice given by a person whom Bankbelieves is a Responsible Officer or designee. Borrower will indemnify Bank forany loss Bank suffers due to such reliance. Such Notice of Borrowing must bereceived by Bank prior to 11:00 a.m. Pacific time, at least three (3) BusinessDays prior to the Funding Date specifying the requested Funding Date. The proceeds of the Term Loan will then be made available to Borrower onthe Funding Date by Bank by transfer to the Designated Deposit Account and,subsequently, by wire transfer to such other account as Borrower may instruct inthe Notice of Borrowing. No Credit Extensions shall be deemed made to Borrower,and no interest shall accrue on the Term Loan, until the related funds have beendeposited in the Designated Deposit Account. 3.3 SPECIAL PROVISIONS GOVERNING THE TERM LOAN. Notwithstanding any other provision of this Agreement to the contrary, thefollowing provisions shall govern with respect to the Term Loan as to thematters covered: (a) Determination of Applicable Interest Rate. As soon as practicableon each Interest Rate Determination Date, Bank shall determine (whichdetermination shall, absent manifest error in calculation, be final, conclusiveand binding upon all parties) the interest rate that shall apply to the TermLoan and shall promptly give notice thereof (in writing or by telephoneconfirmed in writing) to Borrower. (b) Inability to Determine Applicable Interest Rate. In the event thatBank shall have determined (which determination shall be final and conclusiveand binding upon all parties hereto) on any Interest Rate Determination Datewith respect to the Term Loan, that by reason of circumstances affecting theLondon interbank market adequate and fair means do not 3exist for ascertaining the interest rate applicable to the Term Loan on thebasis provided for in the definition of LIBOR, Bank shall on such date givenotice (by facsimile or by telephone confirmed in writing) to Borrower of suchdetermination, whereupon the Term Loan shall bear interest on the outstandingprincipal amount thereof at the Alternate Rate until such time as Bankdetermines that such circumstances cease to exist. (c) Compensation for Breakage or Non-Commencement of Interest Periods.Borrower shall compensate Bank, upon written request by Bank (which requestshall set forth the manner and method of computing such compensation), for allreasonable losses, expenses and liabilities, if any (including any interest paidby Bank to lenders of funds borrowed by it to make or carry its Term Loan andany loss, expense or liability incurred by Bank in connection with theliquidation or re-employment of such funds), that Bank may incur: (i) if for anyreason (other than a default by Bank or due to any failure of Bank to fund aTerm Loan due to impracticability or illegality under Sections 3.4(d) and3.4(e)) a borrowing does not occur on a date specified in a Notice of Borrowing,or (ii) if any principal payment of any of its Term Loan occurs on a date priorto the last day of an Interest Period. (d) Assumptions Concerning Funding of the Term Loan. Calculation ofall amounts payable to Bank under this Section and under Section 3.4 shall bemade as though Bank had actually funded the Term Loan through the purchase of aEurodollar deposit bearing interest at LIBOR in an amount equal to the amount ofsuch Term Loan and having a maturity comparable to the relevant Interest Period;provided, however, that Bank may fund the Term Loan in any manner it sees fitand the foregoing assumptions shall be utilized only for the purposes ofcalculating amounts payable under this Section and under Section 3.4. 3.4 ADDITIONAL REQUIREMENTS/PROVISIONS REGARDING THE TERM LOAN. (a) If for any reason (including voluntary or mandatory prepayment oracceleration), Bank receives all or part of the principal amount of the TermLoan prior to the last day of the Interest Period, Borrower shall immediatelynotify Borrower’s account officer at Bank and, on demand by Bank, pay Bank theamount (if any) by which (i) the additional interest which would have beenpayable on the amount so received had it not been received until the last day ofsuch Interest Period exceeds (ii) the interest which would have been recoverableby Bank by placing the amount so received on deposit in the certificate ofdeposit markets, the offshore currency markets, or United States Treasuryinvestment products, as the case may be, for a period starting on the date onwhich it was so received and ending on the last day of such Interest Period atthe interest rate determined by Bank in its reasonable discretion. Bank’sdetermination as to such amount shall be conclusive absent manifest error. (b) Borrower shall pay Bank, upon demand by Bank, from time to timesuch amounts as Bank may determine to be necessary to compensate it for anycosts incurred by Bank that Bank determines are attributable to its making ormaintaining of any amount receivable by Bank hereunder in respect of any CreditExtensions relating thereto (such increases in costs and reductions in amountsreceivable being herein called “ADDITIONAL COSTS”), in each case resulting fromany Regulatory Change which: 4 (i) changes the basis of taxation of any amounts payable to Bankunder this Agreement in respect of any Credit Extensions (other than changeswhich affect taxes measured by or imposed on the overall net income of Bank bythe jurisdiction in which Bank has its principal office); (ii) imposes or modifies any reserve, special deposit or similarrequirements relating to any extensions of credit or other assets of, or anydeposits with, or other liabilities of Bank (including any Credit Extensions orany deposits referred to in the definition of LIBOR); or (iii) imposes any other condition affecting this Agreement (orany of such extensions of credit or liabilities). Bank will notify Borrower of any event occurring after the Effective Datewhich will entitle Bank to compensation pursuant to this Section 3.4 as promptlyas practicable after it obtains knowledge thereof and determines to request suchcompensation. Bank will furnish Borrower with a statement setting forth thebasis and amount of each request by Bank for compensation under this Section3.4. Determinations and allocations by Bank for purposes of this Section 3.4 ofthe effect of any Regulatory Change on its costs of maintaining its obligationsto make Credit Extensions, of making or maintaining Credit Extensions, or onamounts receivable by it in respect of Credit Extensions, and of the additionalamounts required to compensate Bank in respect of any Additional Costs, shall beconclusive absent manifest error. (c) If Bank shall determine that the adoption or implementation of anyapplicable law, rule, regulation, or treaty regarding capital adequacy, or anychange therein, or any change in the interpretation or administration thereof byany governmental authority, central bank, or comparable agency charged with theinterpretation or administration thereof, or compliance by Bank (or itsapplicable lending office) with any request or directive regarding capitaladequacy (whether or not having the force of law) of any such authority, centralbank, or comparable agency, has or would have the effect of reducing the rate ofreturn on capital of Bank or any Person controlling Bank (a “PARENT”) as aconsequence of its obligations hereunder to a level below that which Bank (orits Parent) could have achieved but for such adoption, change, or compliance(taking into consideration policies with respect to capital adequacy) by anamount deemed by Bank to be material, then from time to time, within fifteen(15) days after demand by Bank, Borrower shall pay to Bank such additionalamount or amounts as will compensate Bank for such reduction. A statement ofBank claiming compensation under this Section 3.4(c) and setting forth theadditional amount or amounts to be paid to it hereunder shall be conclusiveabsent manifest error. (d) If, at any time, Bank, in its sole and absolute discretion,determines that (i) the amount of the Term Loan for periods equal to thecorresponding Interest Periods are not available to Bank in the offshorecurrency interbank markets, or (ii) LIBOR does not accurately reflect the costto Bank of lending the Term Loan, then Bank shall promptly give notice thereofto Borrower. Upon the giving of such notice, the Term Loan shall bear interestat the Alternate Rate until Bank determines that such circumstances have ceasedto exist. 5 (e) If it shall become unlawful for Bank to maintain the Term Loan, orto perform its obligations hereunder, upon demand by Bank, Borrower shall prepaythe Credit Extensions in full with accrued interest thereon and all otheramounts payable by Borrower hereunder (including, without limitation, any amountpayable in connection with such prepayment pursuant to Section 3.4(a)). 4. CREATION OF SECURITY INTEREST 4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants Bank, to secure thepayment and performance in full of all of the Obligations, a continuing securityinterest in, and pledges to Bank, the Collateral, wherever located, whether nowowned or hereafter acquired or arising, and all proceeds and products thereof.Borrower represents, warrants, and covenants that the security interest grantedherein is and shall at all times continue to be a first priority perfectedsecurity interest in the Collateral (subject only to Permitted Liens that mayhave superior priority to Bank’s Lien under this Agreement). If Borrower shallacquire a commercial tort claim, Borrower shall promptly notify Bank in awriting signed by Borrower of the general details thereof and grant to Bank insuch writing a security interest therein and in the proceeds thereof, all uponthe terms of this Agreement, with such writing to be in form and substancereasonably satisfactory to Bank. If this Agreement is terminated, Bank’s Lien in the Collateral shallcontinue until the Obligations (other than inchoate indemnity obligations) arerepaid in full in cash. Upon payment in full in cash of the Obligations and atsuch time as Bank’s obligation to make Credit Extensions has terminated, Bankshall, at Borrower’s sole cost and expense, release its Liens in the Collateraland all rights therein shall revert to Borrower. 4.2 AUTHORIZATION TO FILE FINANCING STATEMENTS. Borrower hereby authorizesBank to file financing statements, without notice to Borrower, with allappropriate jurisdictions to perfect or protect Bank’s interest or rightshereunder, including a notice that any disposition of the Collateral, by eitherBorrower or any other Person, shall be deemed to violate the rights of Bankunder the Code. 5. REPRESENTATIONS AND WARRANTIES Borrower represents and warrants as follows: 5.1 DUE ORGANIZATION AND AUTHORIZATION. Borrower and each of itsSubsidiaries are duly existing and in good standing as Registered Organizationsonly in the State of Delaware and are qualified and licensed to do business andare in good standing in any jurisdiction in which the conduct of their businessor their ownership of property requires that they be qualified except where thefailure to do so could not reasonably be expected to have a material adverseeffect on Borrower’s business. In connection with this Agreement, Borrower hasdelivered to Bank a completed certificate substantially in the form attachedhereto as Exhibit E signed by Borrower, entitled “Perfection Certificate.”Borrower represents and warrants to Bank that (a) Borrower’s exact legal name isthat indicated on the Perfection Certificate and on the signature page hereof;(b) Borrower is an organization of the type and is organized in the jurisdictionset forth in the Perfection Certificate; (c) the Perfection Certificateaccurately sets forth Borrower’s 6organizational identification number or accurately states that Borrower hasnone; (d) the Perfection Certificate accurately sets forth Borrower’s place ofbusiness, or, if more than one, its chief executive office as well as Borrower’smailing address (if different than its chief executive office); (e) Borrower(and each of its predecessors) has not, in the past five (5) years, changed itsstate of formation, organizational structure or type, or any organizationalnumber assigned by its jurisdiction; and (f) all other information set forth onthe Perfection Certificate pertaining to Borrower and each of its Subsidiariesis accurate and complete. If Borrower is not now a Registered Organization butlater becomes one, Borrower shall promptly notify Bank of such occurrence andprovide Bank with Borrower’s organizational identification number. The execution, delivery and performance of the Loan Documents have beenduly authorized, and do not conflict with Borrower’s organizational documents,nor constitute an event of default under any material agreement by whichBorrower is bound. Borrower is not in default under any agreement to which it isa party or by which it is bound in which the default could have a materialadverse effect on Borrower’s business. 5.2 COLLATERAL. Borrower has good title to, has rights in, and the power totransfer each item of the Collateral upon which it purports to grant a Lienhereunder, free and clear of any and all Liens except Permitted Liens. Borrowerhas no deposit accounts other than (a) deposit accounts with Bank, (b) depositaccounts, if any, described in the Perfection Certificate delivered to Bank inconnection herewith, and (c) deposit accounts with respect to which Borrower hasgiven Bank notice and to the extent required under this Agreement, taken suchactions as are necessary to give Bank a perfected security interest therein. The Collateral is not in the possession of any third party bailee (such asa warehouse) except as otherwise provided in the Perfection Certificate. None ofthe components of the Collateral shall be maintained at locations other than asprovided in the Perfection Certificate or as Borrower has given Bank noticepursuant to Section 7.2. In the event that Borrower, after the date hereof,intends to store or otherwise deliver any portion of the Collateral to a bailee,then Borrower will first receive the written consent of Bank and such baileemust execute and deliver a bailee agreement in form and substance satisfactoryto Bank in its sole discretion. Borrower is the sole owner of its intellectual property, except fornon-exclusive licenses granted to its customers in the ordinary course ofbusiness. Each patent is valid and enforceable, and no part of the intellectualproperty has been judged invalid or unenforceable, in whole or in part, and tothe best of Borrower’s knowledge, no claim has been made that any part of theintellectual property violates the rights of any third party except to theextent such claim could not reasonably be expected to have a material adverseeffect on Borrower’s business. Except as noted on the Perfection Certificate,Borrower is not a party to, or bound by, any material license or other agreementwith respect to which Borrower is the licensee that prohibits or otherwiserestricts Borrower from granting a security interest in Borrower’s interest insuch license or agreement or any other property. Borrower shall provide writtennotice to Bank within ten (10) days of entering or becoming bound by any suchlicense or agreement which is reasonably likely to have a material impact onBorrower’s business or financial condition (other than over-the-counter softwarethat is commercially available to the public). Borrower shall take such steps asBank requests to obtain the consent of, or waiver by, any Person whose consentor waiver is necessary for all such licenses or contract rights to be deemed”Collateral” and for Bank to have 7a security interest in it that might otherwise be restricted or prohibited bylaw or by the terms of any such license or agreement (such consent orauthorization may include a licensor’s agreement to a contingent assignment ofthe license to Bank if Bank determines that is necessary in its good faithjudgment), whether now existing or entered into in the future. 5.3 LITIGATION. There are no actions or proceedings pending or, to theknowledge of the Responsible Officers, threatened in writing by or againstBorrower or any of its Subsidiaries involving more than Two Hundred FiftyThousand Dollars ($250,000). 5.4 NO MATERIAL DEVIATION IN FINANCIAL STATEMENTS. All consolidatedfinancial statements for Borrower and any of its Subsidiaries delivered to Bankfairly present in all material respects Borrower’s consolidated financialcondition and Borrower’s consolidated results of operations as of the datesthereof. There has not been any material deterioration in Borrower’sconsolidated financial condition since the date of the most recent financialstatements submitted to Bank. 5.5 SOLVENCY. Borrower is not left with unreasonably small capital afterthe transactions contemplated by this Agreement; and Borrower is able to pay itsdebts (including trade debts) as they mature. 5.6 REGULATORY COMPLIANCE. Borrower is not an “investment company” or acompany “controlled” by an “investment company” under the Investment CompanyAct. Borrower is not engaged as one of its important activities in extendingcredit for margin stock (under Regulations T and U of the Federal Reserve Boardof Governors). Borrower has complied in all material respects with the FederalFair Labor Standards Act. Borrower has not violated any laws, ordinances orrules, the violation of which could reasonably be expected to have a materialadverse effect on its business. None of Borrower’s or any of its Subsidiaries’properties or assets has been used by Borrower or any Subsidiary or, to the bestof Borrower’s knowledge, by previous Persons, in disposing, producing, storing,treating, or transporting any hazardous substance other than legally. Borrowerand each of its Subsidiaries have obtained all consents, approvals andauthorizations of, made all declarations or filings with, and given all noticesto, all government authorities that are necessary to continue its business ascurrently conducted. 5.7 SUBSIDIARIES; INVESTMENTS. Borrower does not own any stock, partnershipinterest or other equity securities except for Permitted Investments. 5.8 TAX RETURNS AND PAYMENTS; PENSION CONTRIBUTIONS. Borrower has timelyfiled all required tax returns and reports, and Borrower has timely paid allforeign, federal, state and local taxes, assessments, deposits and contributionsowed by Borrower. Borrower may defer payment of any contested taxes, providedthat Borrower (a) in good faith contests its obligation to pay the taxes byappropriate proceedings promptly and diligently instituted and conducted, (b)notifies Bank in writing of the commencement of, and any material developmentin, the proceedings, and (c) posts bonds or takes any other steps required toprevent the governmental authority levying such contested taxes from obtaining aLien upon any of the Collateral that is other than a “Permitted Lien.” Borroweris unaware of any claims or adjustments proposed for any of Borrower’s prior taxyears which could result in additional taxes becoming due and 8payable by Borrower. Borrower has paid all amounts necessary to fund all presentpension, profit sharing and deferred compensation plans in accordance with theirterms, and Borrower has not withdrawn from participation in, and has notpermitted partial or complete termination of, or permitted the occurrence of anyother event with respect to, any such plan which could reasonably be expected toresult in any liability of Borrower, including any liability to the PensionBenefit Guaranty Corporation or its successors or any other governmental agency. 5.9 USE OF PROCEEDS. Borrower shall use the proceeds of the CreditExtensions solely to finance a dividend to Borrower’s preferred shareholders andto fund its general business requirements and not for personal, family,household or agricultural purposes. 5.10 FULL DISCLOSURE. No written representation, warranty or otherstatement of Borrower in any certificate or written statement given to Bank, asof the date such representations, warranties, or other statements were made,taken together with all such written certificates and written statements givento Bank, contains any untrue statement of a material fact or omits to state amaterial fact necessary to make the statements contained in the certificates orstatements not misleading (it being recognized by Bank that the projections andforecasts provided by Borrower in good faith and based upon reasonableassumptions are not viewed as facts and that actual results during the period orperiods covered by such projections and forecasts may differ from the projectedor forecasted results). 6. AFFIRMATIVE COVENANTS Borrower shall do all of the following: 6.1 GOVERNMENT COMPLIANCE. Maintain its and all its Subsidiaries’ legalexistence and good standing in their respective jurisdictions of formation andmaintain qualification in each jurisdiction in which the failure to so qualifywould reasonably be expected to have a material adverse effect on Borrower’sbusiness or operations. Borrower shall comply, and have each Subsidiary comply,with all laws, ordinances and regulations to which it is subject, noncompliancewith which could have a material adverse effect on Borrower’s business. 6.2 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. (a) DELIVER TO BANK: (i) so long as Borrower is not subject to thereporting requirements under the Securities Exchange Act of 1934, as amended(the “ACT”), as soon as available, but no later than thirty (30) days after thelast day of each month, a company prepared consolidated balance sheet and incomestatement covering Borrower’s and each of its Subsidiary’s operations during theperiod certified by a Responsible Officer and in a form acceptable to Bank; (ii)so long as Borrower is not subject to the reporting requirements under the Act,as soon as available, but no later than one hundred twenty (120) days after thelast day of Borrower’s fiscal year, audited consolidated financial statementsprepared under GAAP, consistently applied, together with an unqualified opinionon the financial statements from an independent certified public accounting firmacceptable to Bank in its reasonable discretion; (iii) within five (5) days ofdelivery, copies of all statements, reports and notices made available toBorrower’s security holders or to any holders of Subordinated Debt; (iv) in theevent that Borrower becomes subject to the reporting requirements under the Act,within forty-five (45) 9days of filing, all reports on Form 10-Q and 8-K filed with the Securities andExchange Commission or a link thereto on Borrower’s or another website on theInternet; (v) in the event that Borrower becomes subject to the reportingrequirements under the Act, as amended, within one hundred twenty (120) days ofBorrower’s fiscal year end, all reports on Form 10-K filed with the Securitiesand Exchange Commission or a link thereto on Borrower’s or another website onthe Internet; (vi) a prompt report of any legal actions pending or threatenedagainst Borrower or any of its Subsidiaries that could result in damages orcosts to Borrower or any of its Subsidiaries of Fifty Thousand Dollars ($50,000)or more; (vii) prompt notice of an event that materially and adversely affectsthe value of the intellectual property; (viii) as soon as available, but nolater than thirty (30) days after approval by Borrower’s board of directors,copies of all annual financial projections, commensurate in form, substance andtiming with those provided by Borrower to its venture capital and otherinvestors and (ix) budgets, sales projections, operating plans and otherfinancial information reasonably requested by Bank. (b) Within (i) thirty (30) days after the last day of each month solong as Borrower is not subject to the reporting requirements under the Act or(ii) at all times that Borrower is subject to the reporting requirements of theAct, Borrower shall deliver to Bank within forty-five (45) days after the lastday of each quarter, a duly completed Compliance Certificate signed by aResponsible Officer setting forth calculations showing compliance with thefinancial covenant set forth in this Agreement and as soon as available, but inno event more than seven (7) days after each month end, a cash balance report inform and detail satisfactory to Bank in all respects (c) Allow Bank to audit Borrower’s Collateral at Borrower’s expense. 6.3 TAXES; PENSIONS. Make, and cause each of its Subsidiaries to make,timely payment of all foreign, federal, state, and local taxes or assessments(other than taxes and assessments which Borrower is contesting pursuant to theterms of Section 5.8 hereof) and shall deliver to Bank, on demand, appropriatecertificates attesting to such payments, and pay all amounts necessary to fundall present pension, profit sharing and deferred compensation plans inaccordance with their terms. 6.4 INSURANCE. Keep its business and the Collateral insured for risks andin amounts standard for companies in Borrower’s industry and location and asBank may reasonably request. Insurance policies shall be in a form, withcompanies, and in amounts that are satisfactory to Bank. All property policiesshall have a lender’s loss payable endorsement showing Bank as the sole losspayee and waive subrogation against Bank, and all liability policies shall show,or have endorsements showing, Bank as an additional insured. All policies (orthe loss payable and additional insured endorsements) shall provide that theinsurer must give Bank at least twenty (20) days notice before canceling,amending, or declining to renew its policy. At Bank’s request, Borrower shalldeliver certified copies of policies and evidence of all premium payments.Proceeds payable under any policy shall, at Bank’s option, be payable to Bank onaccount of the Obligations. Notwithstanding the foregoing, (a) so long as noEvent of Default has occurred and is continuing, Borrower shall have the optionof applying the proceeds of any casualty insurance policy up to Two HundredFifty Thousand Dollars ($250,000), in the aggregate, toward the replacement orrepair of destroyed or damaged property; provided that any such replaced orrepaired property (i) shall be of equal or like value as the replaced orrepaired Collateral and (ii) 10shall be deemed Collateral in which Bank has been granted a first prioritysecurity interest, and (b) after the occurrence and during the continuance of anEvent of Default, all proceeds payable under such casualty policy shall, at theoption of Bank, be payable to Bank on account of the Obligations. If Borrowerfails to obtain insurance as required under this Section 6.4 or to pay anyamount or furnish any required proof of payment to third Persons and Bank, Bankmay make all or part of such payment or obtain such insurance policies requiredin this Section 6.4, and take any action under the policies Bank deems prudent. 6.5 OPERATING ACCOUNTS. (a) Maintain its primary operating accounts with Bank. (b) Provide Bank not less than five (5) days prior written noticebefore establishing any Collateral Account at or with any bank or financialinstitution other than Bank or its Affiliates. In addition, for each CollateralAccount that Borrower at any time maintains, Borrower shall cause the applicablebank or financial institution (other than Bank) at or with which any CollateralAccount is maintained to execute and deliver a Control Agreement or otherappropriate instrument with respect to such Collateral Account to perfect Bank’sLien in such Collateral Account in accordance with the terms hereof; provided,however that no Control Agreement is required for any deposit account with anamount on deposit the does not at any time exceed Two Hundred Fifty ThousandDollars ($250,000), so long as the aggregate amounts in such deposit accounts donot exceed One Million Dollars ($1,000,000). The provisions of the previoussentence which require a Control Agreement, shall not apply to deposit accountsexclusively used for payroll, payroll taxes and other employee wage and benefitpayments to or for the benefit of Borrower’s employees and identified to Bank byBorrower as such. 6.6 FINANCIAL COVENANTS. Borrower shall maintain, at all times, to betested as of the last day of each month, unless otherwise noted, on aconsolidated basis with respect to Borrower and its Subsidiaries a ratio ofQuick Assets to Current Liabilities minus Deferred Revenue of at least 1.5 to1.0 (the “ADJUSTED QUICK RATIO”). 6.7 PROTECTION AND REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS. Borrowershall: (a) protect, defend and maintain the validity and enforceability ofits intellectual property; (b) promptly advise Bank in writing of material infringements of itsintellectual property; and (c) not allow any intellectual property material to Borrower’sbusiness to be abandoned, forfeited or dedicated to the public without Bank’swritten consent. If Borrower decides to register any copyrights or mask works inthe United States Copyright Office, Borrower shall: (x) provide Bank with atleast fifteen (15) days prior written notice of its intent to register suchcopyrights or mask works together with a copy of the application it intends tofile with the United States Copyright Office (excluding exhibits thereto); (y)execute an intellectual property security agreement or such other documents asBank may reasonably request to maintain the perfection and priority of Bank’ssecurity interest in the copyrights or mask works 11intended to be registered with the United States Copyright Office; and (z)record such intellectual property security agreement with the United StatesCopyright Office contemporaneously with filing the copyright or mask workapplication(s) with the United States Copyright Office. Borrower shall promptlyprovide to Bank a copy of the application(s) filed with the United StatesCopyright Office together with evidence of the recording of the intellectualproperty security agreement necessary for Bank to maintain the perfection andpriority of its security interest in such copyrights or mask works. Borrowershall provide written notice to Bank of any application filed by Borrower in theUnited States Patent and Trademark Office for a patent or to register atrademark or service mark within thirty (30) days after any such filing. 6.8 LITIGATION COOPERATION. From the date hereof and continuing through thetermination of this Agreement, make available to Bank, without expense to Bank,Borrower and its officers, employees and agents and Borrower’s books andrecords, to the extent that Bank may deem them reasonably necessary to prosecuteor defend any third-party suit or proceeding instituted by or against Bank withrespect to any Collateral or relating to Borrower. 6.9 FURTHER ASSURANCES. Borrower shall execute any further instruments andtake further action as Bank reasonably requests to perfect or continue Bank’sLien in the Collateral or to effect the purposes of this Agreement. 7. NEGATIVE COVENANTS Borrower shall not do any of the following without Bank’s prior written consent: 7.1 DISPOSITIONS. Convey, sell, lease, transfer or otherwise dispose of(collectively, “TRANSFER”), or permit any of its Subsidiaries to Transfer, allor any part of its business or property, except for Transfers (a) of Inventoryin the ordinary course of business; (b) of worn-out or obsolete Equipment; and(c) in connection with Permitted Liens and Permitted Investments. 7.2 CHANGES IN BUSINESS OR BUSINESS LOCATIONS. (a) Engage in or permit any of its Subsidiaries to engage in anybusiness other than the businesses currently engaged in by Borrower and suchSubsidiary, as applicable, or reasonably related thereto; or (b) liquidate ordissolve. Borrower shall not, without at least thirty (30) days prior writtennotice to Bank: (1) add any new offices or business locations, includingwarehouses (unless such new offices or business locations contain less than OneHundred Thousand Dollars ($100,000) in Borrower’s assets or property), (2)change its jurisdiction of organization, (3) change its organizational structureor type, (4) change its legal name, or (5) change any organizational number (ifany) assigned by its jurisdiction of organization. 7.3 MERGERS OR ACQUISITIONS. Merge or consolidate, or permit any of itsSubsidiaries to merge or consolidate, with any other Person, or acquire, orpermit any of its Subsidiaries to acquire, all or substantially all of thecapital stock or property of another Person. A Subsidiary may merge orconsolidate with or into another Subsidiary or into Borrower. 12 7.4 INDEBTEDNESS. Create, incur, assume, or be liable for any Indebtedness,or permit any Subsidiary to do so, other than Permitted Indebtedness. 7.5 ENCUMBRANCE. Create, incur, or allow any Lien on any of its property,or assign or convey any right to receive income, including the sale of anyAccounts, or permit any of its Subsidiaries to do so, except for PermittedLiens, permit any Collateral not to be subject to the first priority securityinterest granted herein, or enter into any agreement, document, instrument orother arrangement (except with or in favor of Bank) with any Person whichdirectly or indirectly prohibits or has the effect of prohibiting Borrower orany Subsidiary from assigning, mortgaging, pledging, granting a securityinterest in or upon, or encumbering any of Borrower’s or any Subsidiary’sintellectual property, except as is otherwise permitted in Section 7.1 hereofand the definition of “Permitted Lien” herein. 7.6 MAINTENANCE OF COLLATERAL ACCOUNTS. Maintain any Collateral Accountexcept pursuant to the terms of Section 6.5(b) hereof. 7.7 INVESTMENTS; DISTRIBUTIONS. (a) Directly or indirectly make any Investment other than PermittedInvestments, or permit any of its Subsidiaries to do so; or (b) pay anydividends or make any distribution or payment or redeem, retire or purchase anycapital stock provided that (i) Borrower may convert any of its convertiblesecurities into other securities pursuant to the terms of such convertiblesecurities or otherwise in exchange thereof, (ii) Borrower may pay dividendssolely in common stock, and (iii) Borrower may repurchase the stock of formeremployees or consultants pursuant to stock repurchase agreements so long as anEvent of Default does not exist at the time of such repurchase and would notexist after giving effect to such repurchase, provided such repurchase does notexceed in the aggregate of Fifty Thousand Dollars ($50,000) per fiscal year. 7.8 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into orpermit to exist any material transaction with any Affiliate of Borrower, exceptfor transactions that are in the ordinary course of Borrower’s business, uponfair and reasonable terms that are no less favorable to Borrower than would beobtained in an arm’s length transaction with a non-affiliated Person. 7.9 SUBORDINATED DEBT. (a) Make or permit any payment on any Subordinated Debt, except underthe terms of the subordination, intercreditor, or other similar agreement towhich such Subordinated Debt is subject, or (b) Amend any provision in any document relating to the SubordinatedDebt which would increase the amount thereof or adversely affect thesubordination thereof to Obligations owed to Bank. 7.10 COMPLIANCE. Become an “investment company” or a company controlled byan “investment company,” under the Investment Company Act of 1940 or undertakeas one of its important activities extending credit to purchase or carry marginstock (as defined in Regulation 13U of the Board of Governors of the Federal Reserve System), or use the proceedsof any Credit Extension for that purpose; fail to meet the minimum fundingrequirements of ERISA, permit a Reportable Event or Prohibited Transaction, asdefined in ERISA, to occur; fail or permit any Subsidiary to fail to comply withthe Federal Fair Labor Standards Act or violate any other law or regulation, ifthe violation could reasonably be expected to have a material adverse effect onBorrower’s business; withdraw or permit any Subsidiary to withdraw fromparticipation in, permit partial or complete termination of, or permit theoccurrence of any other event with respect to, any present pension, profitsharing and deferred compensation plan which could reasonably be expected toresult in any liability of Borrower, including any liability to the PensionBenefit Guaranty Corporation or its successors or any other governmental agency. 8. EVENTS OF DEFAULT Any one of the following shall constitute an event of default (an “EVENT OFDEFAULT”) under this Agreement: 8.1 PAYMENT DEFAULT. Borrower fails to (a) make any payment of principal orinterest on any Credit Extension on its due date, or (b) pay any otherObligations within three (3) Business Days after such Obligations are due andpayable. During the cure period, the failure to cure the payment default is notan Event of Default (but no Credit Extension will be made during the cureperiod); 8.2 COVENANT DEFAULT. (a) Borrower fails or neglects to perform any obligation in Sections6.2, 6.5, 6.5, 6.6 or violates any covenant in Section 7; or (b) Borrower fails or neglects to perform, keep, or observe any otherterm, provision, condition, covenant or agreement contained in this Agreement,any Loan Document, and as to any default (other than those specified in Section8.8 below) under such other term, provision, condition, covenant or agreementthat can be cured, has failed to cure the default within ten (10) days after theoccurrence thereof; provided, however, that if the default cannot by its naturebe cured within the ten (10) day period or cannot after diligent attempts byBorrower be cured within such ten (10) day period, and such default is likely tobe cured within a reasonable time, then Borrower shall have an additional period(which shall not in any case exceed thirty (30) days) to attempt to cure suchdefault, and within such reasonable time period the failure to cure the defaultshall not be deemed an Event of Default (but no Credit Extensions shall be madeduring such cure period). Grace periods provided under this Section shall notapply, among other things, to financial covenants or any other covenants setforth in subsection (a) above; 8.3 MATERIAL ADVERSE CHANGE. A Material Adverse Change occurs; 14 8.4 ATTACHMENT. (a) Any material portion of Borrower’s assets is attached,seized, levied on, or comes into possession of a trustee or receiver and theattachment, seizure or levy is not removed in ten (10) days; (b) the service ofprocess upon Bank seeking to attach, by trustee or similar process, any funds ofBorrower, or of any entity under control of Borrower (including a Subsidiary) ondeposit with Bank; (c) Borrower is enjoined, restrained, or prevented by courtorder from conducting a material part of its business; (d) a judgment or otherclaim in excess of Fifty Thousand Dollars ($50,000) becomes a Lien on any ofBorrower’s assets; or (e) a notice of lien, levy, or assessment is filed againstany of Borrower’s assets by any government agency and not paid within ten (10)days after Borrower receives notice. These are not Events of Default if stayedor if a bond is posted pending contest by Borrower (but no Credit Extensionsshall be made during the cure period); 8.5 INSOLVENCY. (a) Borrower is unable to pay its debts (including tradedebts) as they become due or otherwise becomes insolvent; (b) Borrower begins anInsolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrowerand not dismissed or stayed within thirty (30) days (but no Credit Extensionsshall be made while of any of the conditions described in clause (a) existand/or until any Insolvency Proceeding is dismissed); 8.6 OTHER AGREEMENTS. There is a default in any agreement to which Borroweris a party with a third party or parties resulting in a right by such thirdparty or parties, whether or not exercised, to accelerate the maturity of anyIndebtedness in an amount in excess of Two Hundred Fifty Thousand Dollars($250,000) or that could have a material adverse effect on Borrower’s business; 8.7 JUDGMENTS. A judgment or judgments for the payment of money in anamount, individually or in the aggregate, of at least Two Hundred Fifty ThousandDollars ($250,000) (not covered by independent third-party insurance) shall berendered against Borrower and shall remain unsatisfied and unstayed for a periodof ten (10) days after the entry thereof (provided that no Credit Extensionswill be made prior to the satisfaction or stay of such judgment); 8.8 MISREPRESENTATIONS. Borrower or any Person acting for Borrower makesany representation, warranty, or other statement now or later in this Agreement,in any other Loan Document or in any writing delivered to Bank or to induce Bankto enter this Agreement or any Loan Document, and such representation, warranty,or other statement is incorrect in any material respect when made; or 8.9 SUBORDINATED DEBT. A default or breach occurs under any agreementbetween Borrower and any creditor of Borrower that signed a subordination,intercreditor, or other similar agreement with Bank, or any creditor that hassigned such an agreement with Bank breaches any terms of such agreement. 9. BANK’S RIGHTS AND REMEDIES 9.1 RIGHTS AND REMEDIES. While an Event of Default occurs and continuesBank may, without notice or demand, do any or all of the following: 15 (a) declare all Obligations immediately due and payable (but if anEvent of Default described in Section 8.5 occurs all Obligations are immediatelydue and payable without any action by Bank); (b) stop advancing money or extending credit for Borrower’s benefitunder this Agreement or under any other agreement between Borrower and Bank; (c) settle or adjust disputes and claims directly with Account Debtorsfor amounts on terms and in any order that Bank considers advisable, notify anyPerson owing Borrower money of Bank’s security interest in such funds, andverify the amount of such account; (d) make any payments and do any acts it considers necessary orreasonable to protect the Collateral and/or its security interest in theCollateral. Borrower shall assemble the Collateral if Bank requests and make itavailable as Bank designates. Bank may enter premises where the Collateral islocated, take and maintain possession of any part of the Collateral, and pay,purchase, contest, or compromise any Lien which appears to be prior or superiorto its security interest and pay all expenses incurred. Borrower grants Bank alicense to enter and occupy any of its premises, without charge, to exercise anyof Bank’s rights or remedies; (e) apply to the Obligations any (i) balances and deposits of Borrowerit holds, or (ii) any amount held by Bank owing to or for the credit or theaccount of Borrower; (f) ship, reclaim, recover, store, finish, maintain, repair, preparefor sale, advertise for sale, and sell the Collateral. Bank is hereby granted anon-exclusive, royalty-free license or other right to use, without charge,Borrower’s labels, patents, copyrights, mask works, rights of use of any name,trade secrets, trade names, trademarks, service marks, and advertising matter,or any similar property as it pertains to the Collateral, in completingproduction of, advertising for sale, and selling any Collateral and, inconnection with Bank’s exercise of its rights under this Section, Borrower’srights under all licenses and all franchise agreements inure to Bank’s benefit; (g) place a “hold” on any account maintained with Bank and/or delivera notice of exclusive control, any entitlement order, or other directions orinstructions pursuant to any Control Agreement or similar agreements providingcontrol of any Collateral; (h) demand and receive possession of Borrower’s Books; and (i) exercise all rights and remedies available to Bank under the LoanDocuments or at law or equity, including all remedies provided under the Code(including disposal of the Collateral pursuant to the terms thereof). 9.2 POWER OF ATTORNEY. Borrower hereby irrevocably appoints Bank as itslawful attorney-in-fact, exercisable upon the occurrence and during thecontinuance of an Event of Default, to: (a) endorse Borrower’s name on anychecks or other forms of payment or security; (b) sign Borrower’s name on anyinvoice or bill of lading for any Account or drafts against Account Debtors; (c)settle and adjust disputes and claims about the Accounts directly with 16Account Debtors, for amounts and on terms Bank determines reasonable; (d) make,settle, and adjust all claims under Borrower’s insurance policies; (e) pay,contest or settle any Lien, charge, encumbrance, security interest, and adverseclaim in or to the Collateral, or any judgment based thereon, or otherwise takeany action to terminate or discharge the same; and (f) transfer the Collateralinto the name of Bank or a third party as the Code permits. Borrower herebyappoints Bank as its lawful attorney-in-fact to sign Borrower’s name on anydocuments necessary to perfect or continue the perfection of any securityinterest regardless of whether an Event of Default has occurred until allObligations have been satisfied in full and Bank is under no further obligationto make Credit Extensions hereunder. Bank’s foregoing appointment as Borrower’sattorney in fact, and all of Bank’s rights and powers, coupled with an interest,are irrevocable until all Obligations have been fully repaid and performed andBank’s obligation to provide Credit Extensions terminates. 9.3 ACCOUNTS VERIFICATION; COLLECTION. Whether or not an Event of Defaulthas occurred and is continuing, Bank may notify any Person owing Borrower moneyof Bank’s security interest in such funds and verify the amount of such account.After the occurrence of an Event of Default, any amounts received by Borrowershall be held in trust by Borrower for Bank, and, if requested by Bank, Borrowershall immediately deliver such receipts to Bank in the form received from theAccount Debtor, with proper endorsements for deposit. 9.4 PROTECTIVE PAYMENTS. If Borrower fails to obtain the insurance calledfor by Section 6.4 or fails to pay any premium thereon or fails to pay any otheramount which Borrower is obligated to pay under this Agreement or any other LoanDocument, Bank may obtain such insurance or make such payment, and all amountsso paid by Bank are Bank Expenses and immediately due and payable, bearinginterest at the then highest applicable rate, and secured by the Collateral.Bank will make reasonable efforts to provide Borrower with notice of Bankobtaining such insurance at the time it is obtained or within a reasonable timethereafter. No payments by Bank are deemed an agreement to make similar paymentsin the future or Bank’s waiver of any Event of Default. 9.5 APPLICATION OF PAYMENTS AND PROCEEDS. Unless an Event of Default hasoccurred and is continuing, Bank shall apply any funds in its possession,whether from Borrower account balances, payments, or proceeds realized as theresult of any collection of Accounts or other disposition of the Collateral,first, to Bank Expenses, including without limitation, the reasonable costs,expenses, liabilities, obligations and attorneys’ fees incurred by Bank in theexercise of its rights under this Agreement; second, to the interest due uponany of the Obligations; and third, to the principal of the Obligations and anyapplicable fees and other charges, in such order as Bank shall determine in itssole discretion. Any surplus shall be paid to Borrower or other Persons legallyentitled thereto; Borrower shall remain liable to Bank for any deficiency. If anEvent of Default has occurred and is continuing, Bank may apply any funds in itspossession, whether from Borrower account balances, payments, proceeds realizedas the result of any collection of Accounts or other disposition of theCollateral, or otherwise, to the Obligations in such order as Bank shalldetermine in its sole discretion. Any surplus shall be paid to Borrower or otherPersons legally entitled thereto; Borrower shall remain liable to Bank for anydeficiency. If Bank, in its good faith business judgment, directly or indirectlyenters into a deferred payment or other credit transaction with any purchaser atany sale of Collateral, Bank 17shall have the option, exercisable at any time, of either reducing theObligations by the principal amount of the purchase price or deferring thereduction of the Obligations until the actual receipt by Bank of cash therefor. 9.6 BANK’S LIABILITY FOR COLLATERAL. So long as Bank complies withreasonable banking practices regarding the safekeeping of the Collateral in thepossession or under the control of Bank, Bank shall not be liable or responsiblefor: (a) the safekeeping of the Collateral; (b) any loss or damage to theCollateral; (c) any diminution in the value of the Collateral; or (d) any act ordefault of any carrier, warehouseman, bailee, or other Person. Borrower bearsall risk of loss, damage or destruction of the Collateral. 9.7 NO WAIVER; REMEDIES CUMULATIVE. Bank’s failure, at any time or times,to require strict performance by Borrower of any provision of this Agreement orany other Loan Document shall not waive, affect, or diminish any right of Bankthereafter to demand strict performance and compliance herewith or therewith. Nowaiver hereunder shall be effective unless signed by Bank and then is onlyeffective for the specific instance and purpose for which it is given. Bank’srights and remedies under this Agreement and the other Loan Documents arecumulative. Bank has all rights and remedies provided under the Code, by law, orin equity. Bank’s exercise of one right or remedy is not an election, and Bank’swaiver of any Event of Default is not a continuing waiver. Bank’s delay inexercising any remedy is not a waiver, election, or acquiescence. 9.8 DEMAND WAIVER. Borrower waives demand, notice of default or dishonor,notice of payment and nonpayment, notice of any default, nonpayment at maturity,release, compromise, settlement, extension, or renewal of accounts, documents,instruments, chattel paper, and guarantees held by Bank on which Borrower isliable. 10. NOTICES All notices, consents, requests, approvals, demands, or other communication(collectively, “COMMUNICATION”) by any party to this Agreement or any other LoanDocument must be in writing and shall be deemed to have been validly served,given, or delivered: (a) upon the earlier of actual receipt and three (3)Business Days after deposit in the U.S. mail, first class, registered orcertified mail return receipt requested, with proper postage prepaid; (b) upontransmission, when sent by electronic mail or facsimile transmission; (c) one(1) Business Day after deposit with a reputable overnight courier with allcharges prepaid; or (d) when delivered, if hand-delivered by messenger, all ofwhich shall be addressed to the party to be notified and sent to the address,facsimile number, or email address indicated below. Bank or Borrower may changeits address or facsimile number by giving the other party written notice thereofin accordance with the terms of this Section 10. If to Borrower: Commvault Systems, Inc. 2 Crescent Place Oceanport, New Jersey 07757-0900 Attn: Lou Miceli, Chief Financial Officer Fax: (732) 870-4514 Email: 18 If to Bank: Silicon Valley Bank 5 Radnor Corporate Center, Suite 555 100 Matsonford Road Radnor, PA 19087 Attn: Richard White Fax: (610) 971-2063 Email: 11. CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER AND JUDICIAL REFERENCE Pennsylvania law governs the Loan Documents without regard to principles ofconflicts of law. Borrower and Bank each submit to the exclusive jurisdiction ofthe State and Federal courts in Santa Clara County, California; provided,however, that nothing in this Agreement shall be deemed to operate to precludeBank from bringing suit or taking other legal action in any other jurisdictionto realize on the Collateral or any other security for the Obligations, or toenforce a judgment or other court order in favor of Bank. Borrower expresslysubmits and consents in advance to such jurisdiction in any action or suitcommenced in any such court, and Borrower hereby waives any objection that itmay have based upon lack of personal jurisdiction, improper venue, or forum nonconveniens and hereby consents to the granting of such legal or equitable reliefas is deemed appropriate by such court. Borrower hereby waives personal serviceof the summons, complaints, and other process issued in such action or suit andagrees that service of such summons, complaints, and other process may be madeby registered or certified mail addressed to Borrower at the address set forthin Section 10 of this Agreement and that service so made shall be deemedcompleted upon the earlier to occur of Borrower’s actual receipt thereof orthree (3) days after deposit in the U.S. mails, proper postage prepaid.BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSEOF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANYCONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHERCLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THISAGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIRRESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trialby jury is not enforceable, the parties hereto agree that any and all disputesor controversies of any nature between them arising at any time shall be decidedby a reference to a private judge, mutually selected by the parties (or, if theycannot agree, by the Presiding Judge of the Santa Clara County, CaliforniaSuperior Court) appointed in accordance with California Code of Civil ProcedureSection 638 (or pursuant to comparable provisions of federal law if the disputefalls within the exclusive jurisdiction of the federal courts), sitting withouta jury, in Santa Clara County, California; and the parties hereby submit to thejurisdiction of such court. The reference proceedings shall be conductedpursuant to and in accordance with the provisions of California Code of CivilProcedure Sections 638 through 645.1, inclusive. The private judge shall havethe power, among others, to grant provisional relief, including withoutlimitation, entering temporary restraining orders, issuing preliminary andpermanent injunctions and appointing 19receivers. All such proceedings shall be closed to the public and confidentialand all records relating thereto shall be permanently sealed. If during thecourse of any dispute, a party desires to seek provisional relief, but a judgehas not been appointed at that point pursuant to the judicial referenceprocedures, then such party may apply to the Santa Clara County, CaliforniaSuperior Court for such relief. The proceeding before the private judge shall beconducted in the same manner as it would be before a court under the rules ofevidence applicable to judicial proceedings. The parties shall be entitled todiscovery which shall be conducted in the same manner as it would be before acourt under the rules of discovery applicable to judicial proceedings. Theprivate judge shall oversee discovery and may enforce all discovery rules andorder applicable to judicial proceedings in the same manner as a trial courtjudge. The parties agree that the selected or appointed private judge shall havethe power to decide all issues in the action or proceeding, whether of fact orof law, and shall report a statement of decision thereon pursuant to theCalifornia Code of Civil Procedure Section 644(a). Nothing in this paragraphshall limit the right of any party at any time to exercise self-help remedies,foreclose against collateral, or obtain provisional remedies. The private judgeshall also determine all issues relating to the applicability, interpretation,and enforceability of this paragraph. 12. GENERAL PROVISIONS 12.1 SUCCESSORS AND ASSIGNS. This Agreement binds and is for the benefit ofthe successors and permitted assigns of each party. Borrower may not assign thisAgreement or any rights or obligations under it without Bank’s prior writtenconsent (which may be granted or withheld in Bank’s discretion). Bank has theright, without the consent of or notice to Borrower, to sell, transfer,negotiate, or grant participation in all or any part of, or any interest in,Bank’s obligations, rights, and benefits under this Agreement and the other LoanDocuments. 12.2 INDEMNIFICATION. Borrower agrees to indemnify, defend and hold Bankand its directors, officers, employees, agents, attorneys, or any other Personaffiliated with or representing Bank harmless against: (a) all obligations,demands, claims, and liabilities (collectively, “CLAIMS”) asserted by any otherparty in connection with the transactions contemplated by the Loan Documents;and (b) all losses or Bank Expenses incurred, or paid by Bank from, following,or arising from transactions between Bank and Borrower (including reasonableattorneys’ fees and expenses), except for Claims and/or losses directly causedby Bank’s gross negligence or willful misconduct. 12.3 LIMITATION OF ACTIONS. Any claim or cause of action by Borroweragainst Bank, its directors, officers, employees, agents, accountants,attorneys, or any other Person affiliated with or representing Bank based upon,arising from, or relating to this Loan Agreement or any other Loan Document, orany other transaction contemplated hereby or thereby or relating hereto orthereto, or any other matter, cause or thing whatsoever, occurred, done, omittedor suffered to be done by Bank, its directors, officers, employees, agents,accountants or attorneys, shall be barred unless asserted by Borrower by thecommencement of an action or proceeding in a court of competent jurisdiction by(a) the filing of a complaint within one year from the earlier of (i) the dateany of Borrower’s officers or directors had knowledge of the first act, theoccurrence or omission upon which such claim or cause of action, or any partthereof, is based, or (ii) the date this Agreement is terminated, and (b) theservice of a summons and complaint on an officer of Bank, or on any other Personauthorized to accept service on behalf of Bank, within thirty (30) 20days thereafter. Borrower agrees that such one-year period is a reasonable andsufficient time for Borrower to investigate and act upon any such claim or causeof action. The one-year period provided herein shall not be waived, tolled, orextended except by the written consent of Bank in its sole discretion. Thisprovision shall survive any termination of this Loan Agreement or any other LoanDocument. 12.4 TIME OF ESSENCE. Time is of the essence for the performance of allObligations in this Agreement. 12.5 SEVERABILITY OF PROVISIONS. Each provision of this Agreement isseverable from every other provision in determining the enforceability of anyprovision. 12.6 AMENDMENTS IN WRITING; INTEGRATION. All amendments to this Agreementmust be in writing and signed by both Bank and Borrower. This Agreement and theLoan Documents represent the entire agreement about this subject matter andsupersede prior negotiations or agreements. All prior agreements,understandings, representations, warranties, and negotiations between theparties about the subject matter of this Agreement and the Loan Documents mergeinto this Agreement and the Loan Documents. 12.7 COUNTERPARTS. This Agreement may be executed in any number ofcounterparts and by different parties on separate counterparts, each of which,when executed and delivered, are an original, and all taken together, constituteone Agreement. 12.8 SURVIVAL. All covenants, representations and warranties made in thisAgreement continue in full force until this Agreement has terminated pursuant toits terms and all Obligations (other than inchoate indemnity obligations and anyother obligations which, by their terms, are to survive the termination of thisAgreement) have been satisfied. The obligation of Borrower in Section 12.2 toindemnify Bank shall survive until the statute of limitations with respect tosuch claim or cause of action shall have run. 12.9 CONFIDENTIALITY. In handling any confidential information, Bank shallexercise the same degree of care that it exercises for its own proprietaryinformation, but disclosure of information may be made: (a) to Bank’sSubsidiaries or Affiliates; (b) to prospective transferees or purchasers of anyinterest in the Credit Extensions (provided, however, Bank shall usecommercially reasonable efforts to obtain such prospective transferee’s orpurchaser’s agreement to the terms of this provision); (c) as required by law,regulation, subpoena, or other order; (d) to Bank’s regulators or as otherwiserequired in connection with Bank’s examination or audit; and (e) as Bankconsiders appropriate in exercising remedies under this Agreement. Confidentialinformation does not include information that either: (i) is in the publicdomain or in Bank’s possession when disclosed to Bank, or becomes part of thepublic domain after disclosure to Bank; or (ii) is disclosed to Bank by a thirdparty, if Bank does not know that the third party is prohibited from disclosingthe information. 12.10 ATTORNEYS’ FEES, COSTS AND EXPENSES. In any action or proceedingbetween Borrower and Bank arising out of or relating to the Loan Documents, theprevailing party shall be entitled to recover its reasonable attorneys’ fees andother costs and expenses incurred, in addition to any other relief to which itmay be entitled. 21 12.11 RIGHT OF SETOFF. Borrower hereby grants to Bank a Lien and a right ofsetoff as security for all Obligations to Bank, whether now existing orhereafter arising upon and against all deposits, credits, collateral andproperty, now or hereafter in the possession, custody, safekeeping or control ofBank or any entity under the control of Bank (including a subsidiary of Bank) orin transit to any of them. At any time after the occurrence and during thecontinuance of an Event of Default, without demand or notice, Bank may setoffthe same or any part thereof and apply the same to any liability or Obligationof Borrower even though unmatured and regardless of the adequacy of any othercollateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE BANK TOEXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICHSECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TOSUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY,VOLUNTARILY AND IRREVOCABLY WAIVED. 13. DEFINITIONS 13.1 DEFINITIONS. As used in this Agreement, the following terms have thefollowing meanings: “ACCOUNT” is any “account” as defined in the Code with such additions tosuch term as may hereafter be made, and includes, without limitation, allaccounts receivable and other sums owing to Borrower. “ACCOUNT DEBTOR” is any “account debtor” as defined in the Code with suchadditions to such term as may hereafter be made. “ACT” is defined in Section 6.2(a). “AFFILIATE” of any Person is (a) a Person that owns or controls directly orindirectly the Person, (b) any Person that controls or is controlled by or isunder common control with the Person, and (c) each of that Person’s seniorexecutive officers, directors, partners and, for any Person that is a limitedliability company, that Person’s managers and members (such officers, directors,managers and members being called “Non Natural Affiliates”). “AGREEMENT” is defined in the preamble hereof. “ALTERNATE RATE” is a floating rate equal to Prime Rate, minus one percent(1.0%) per annum. “BANK” is defined in the preamble hereof. “BANK EXPENSES” are all audit fees and expenses, costs, and expenses(including reasonable attorneys’ fees and expenses) for preparing, negotiating,administering, defending and enforcing the Loan Documents (including, withoutlimitation, those incurred in connection with appeals or Insolvency Proceedings)or otherwise incurred with respect to Borrower. “BORROWER” is defined in the preamble hereof. 22 “BORROWER’S BOOKS” are all Borrower’s books and records including ledgers,federal and state tax returns, records regarding Borrower’s assets orliabilities, the Collateral, business operations or financial condition, and allcomputer programs or storage or any equipment containing such information. “BORROWING RESOLUTIONS” are, with respect to any Person, those resolutionssubstantially in the form attached hereto as Exhibit D. “BUSINESS DAY” is any day other than a Saturday, Sunday or other day onwhich banking institutions in the State of California are authorized or requiredby law or other governmental action to close, except that if any determinationof a “Business Day” shall relate to the Term Loan, the term “Business Day” shallalso mean a day on which dealings are carried on in the London interbank market. “CASH EQUIVALENTS” means (a) marketable direct obligations issued orunconditionally guaranteed by the United States or any agency or any Statethereof having maturities of not more than one (1) year from the date ofacquisition; (b) commercial paper maturing no more than one (1) year after itscreation and having the highest rating from either Standard & Poor’s RatingsGroup or Moody’s Investors Service, Inc.; and (c) Bank’s certificates of depositissued maturing no more than one (1) year after issue. “CODE” is the Uniform Commercial Code, as the same may, from time to time,be enacted and in effect in the Commonwealth of Pennsylvania; provided, that, tothe extent that the Code is used to define any term herein or in any LoanDocument and such term is defined differently in different Articles or Divisionsof the Code, the definition of such term contained in Article or Division 9shall govern; provided further, that in the event that, by reason of mandatoryprovisions of law, any or all of the attachment, perfection, or priority of, orremedies with respect to, Bank’s Lien on any Collateral is governed by theUniform Commercial Code in effect in a jurisdiction other than the State ofCalifornia, the term “CODE” shall mean the Uniform Commercial Code as enactedand in effect in such other jurisdiction solely for purposes on the provisionsthereof relating to such attachment, perfection, priority, or remedies and forpurposes of definitions relating to such provisions. “COLLATERAL” is any and all properties, rights and assets of Borrowerdescribed on Exhibit A. “COLLATERAL ACCOUNT” is any Deposit Account, Securities Account, orCommodity Account. “COMMODITY ACCOUNT” is any “commodity account” as defined in the Code withsuch additions to such term as may hereafter be made. “COMMUNICATION” is defined in Section 10. “COMPLIANCE CERTIFICATE” is that certain certificate in the form attachedhereto as Exhibit C. 23 “CONTINGENT OBLIGATION” is, for any Person, any direct or indirectliability, contingent or not, of that Person for (a) any indebtedness, lease,dividend, letter of credit or other obligation of another such as an obligationdirectly or indirectly guaranteed, endorsed, co-made, discounted or sold withrecourse by that Person, or for which that Person is directly or indirectlyliable; (b) any obligations for undrawn letters of credit for the account ofthat Person; and (c) all obligations from any interest rate, currency orcommodity swap agreement, interest rate cap or collar agreement, or otheragreement or arrangement designated to protect a Person against fluctuation ininterest rates, currency exchange rates or commodity prices; but “ContingentObligation” does not include endorsements in the ordinary course of business.The amount of a Contingent Obligation is the stated or determined amount of theprimary obligation for which the Contingent Obligation is made or, if notdeterminable, the maximum reasonably anticipated liability for it determined bythe Person in good faith; but the amount may not exceed the maximum of theobligations under any guarantee or other support arrangement. “CONTROL AGREEMENT” is a control agreement substantially in the form ofExhibit F. “CREDIT EXTENSION” is any Term Loan or any other extension of credit byBank for Borrower’s benefit. “CURRENT LIABILITIES” are all obligations and liabilities of Borrower toBank that mature within one (1) year. “DEFAULT” means any event which with notice or passage of time or both,would constitute an Event of Default. “DEFAULT RATE” is defined in Section 2.3(c). “DEFERRED REVENUE” is all amounts received or invoiced in advance ofperformance under contracts and not yet recognized as revenue. “DEPOSIT ACCOUNT” is any “deposit account” as defined in the Code with suchadditions to such term as may hereafter be made. “DESIGNATED DEPOSIT ACCOUNT” is Borrower’s deposit account, account number_____________, maintained with Bank. “DOLLARS,” “DOLLARS” and “$” each mean lawful money of the United States. “EFFECTIVE DATE” is the date Bank executes this Agreement and as indicatedon the signature page hereof. “EQUIPMENT” is all “equipment” as defined in the Code with such additionsto such term as may hereafter be made, and includes without limitation allmachinery, fixtures, goods, vehicles (including motor vehicles and trailers),and any interest in any of the foregoing. “ERISA” is the Employment Retirement Income Security Act of 1974, and itsregulations. 24 “EVENT OF DEFAULT” is defined in Section 8. “FUNDING DATE” is the date on which the Term Loan is made to or on accountof Borrower which shall be a Business Day. “GAAP” is generally accepted accounting principles set forth in theopinions and pronouncements of the Accounting Principles Board of the AmericanInstitute of Certified Public Accountants and statements and pronouncements ofthe Financial Accounting Standards Board or in such other statements by suchother Person as may be approved by a significant segment of the accountingprofession, which are applicable to the circumstances as of the date ofdetermination. “GENERAL INTANGIBLES” is all “general intangibles” as defined in the Codein effect on the date hereof with such additions to such term as may hereafterbe made, and includes without limitation, all copyright rights, copyrightapplications, copyright registrations and like protections in each work ofauthorship and derivative work, whether published or unpublished, any patents,trademarks, service marks and, to the extent permitted under applicable law, anyapplications therefor, whether registered or not, any trade secret rights,including any rights to unpatented inventions, payment intangibles, royalties,contract rights, goodwill, franchise agreements, purchase orders, customerlists, route lists, telephone numbers, domain names, claims, income and othertax refunds, security and other deposits, options to purchase or sell real orpersonal property, rights in all litigation presently or hereafter pending(whether in contract, tort or otherwise), insurance policies (including withoutlimitation key man, property damage, and business interruption insurance),payments of insurance and rights to payment of any kind. “INDEBTEDNESS” is (a) indebtedness for borrowed money or the deferred priceof property or services, such as reimbursement and other obligations for suretybonds and letters of credit, (b) obligations evidenced by notes, bonds,debentures or similar instruments, (c) capital lease obligations, and (d)Contingent Obligations. “INSOLVENCY PROCEEDING” is any proceeding by or against any Person underthe United States Bankruptcy Code, or any other bankruptcy or insolvency law,including assignments for the benefit of creditors, compositions, extensionsgenerally with its creditors, or proceedings seeking reorganization,arrangement, or other relief. “INTEREST PERIOD” means the period commencing on the Funding Date andending on the date that is one (1) month after the Funding Date, and eachsuccessive one (1) month period until the Term Loan Maturity Date; provided,however, that (a) no Interest Period shall end later than the Term Loan MaturityDate, (b) the last day of an Interest Period shall be determined in accordancewith the practices of the LIBOR interbank market as from time to time in effect,(c) if any Interest Period would otherwise end on a day that is not a BusinessDay, that Interest Period shall be extended to the following Business Day unlessthe result of such extension would be to carry such Interest Period into anothercalendar month, in which event such Interest Period shall end on the precedingBusiness Day, (d) any Interest Period that begins on the last Business Day of acalendar month (or on a day for which there is no numerically corresponding dayin the calendar month at the end of such Interest Period) shall end on the lastBusiness Day of the calendar month at the end of such Interest Period, and (e)interest shall accrue from and include 25the first Business Day of an Interest Period but exclude the last Business Dayof such Interest Period. “INTEREST RATE DETERMINATION DATE” means each date for calculating theLIBOR for purposes of determining the interest rate in respect of an InterestPeriod. The Interest Rate Determination Date shall be the second Business Dayprior to the first day of the related Interest Period for the Term Loan. “INVENTORY” is all “inventory” as defined in the Code in effect on the datehereof with such additions to such term as may hereafter be made, and includeswithout limitation all merchandise, raw materials, parts, supplies, packing andshipping materials, work in process and finished products, including withoutlimitation such inventory as is temporarily out of Borrower’s custody orpossession or in transit and including any returned goods and any documents oftitle representing any of the above. “INVESTMENT” is any beneficial ownership interest in any Person (includingstock, partnership interest or other securities), and any loan, advance orcapital contribution to any Person. “IP AGREEMENT” is that certain Intellectual Property Security Agreementexecuted and delivered by Borrower to Bank dated as of the Effective Date. “LIBOR” means, for any Interest Rate Determination Date, the rate ofinterest per annum determined by Bank to be the per annum rate of interest atwhich deposits in Dollars are offered to Bank in the London interbank market(rounded upward, if necessary, to the nearest 1/1000th of one percent (0.001%))in which Bank customarily participates at 11:00 a.m. (local time in suchinterbank market) two (2) Business Days prior to the first day of such InterestPeriod for a period approximately equal to such Interest Period and in an amountapproximately equal to the amount of the applicable Credit Extension. “LIBOR RATE” means, for each Interest Period, an interest rate per annum(rounded upward to the nearest 1/1000th of one percent (0.001%)) equal to LIBORfor such Interest Period divided by one (1) minus the Reserve Requirement forsuch Interest Period. “LIBOR RATE MARGIN” is one and one half of one percent (1.50%). “LIEN” is a mortgage, lien, deed of trust, charge, pledge, securityinterest or other encumbrance. “LOAN DOCUMENTS” are, collectively, this Agreement, the PerfectionCertificate, the IP Agreement, any note or guaranty, executed by Borrower or anyother Person and any other present or future agreement for the benefit of Bankin connection with this Agreement, all as amended, restated, or otherwisemodified. “MATERIAL ADVERSE CHANGE” is (a) a material impairment in the perfection orpriority of Bank’s Lien in the Collateral or in the value of such Collateral;(b) a material adverse change in 26the business, operations, or condition (financial or otherwise) of Borrower; or(c) a material impairment of the prospect of repayment of any portion of theObligations. “NOTICE OF BORROWING” means a notice given by Borrower to Banksubstantially in the form of Exhibit B, with appropriate insertions. “OBLIGATIONS” are Borrower’s obligation to pay when due any debts,principal, interest, Bank Expenses and other amounts Borrower owes Bank now orlater, whether under this Agreement, the Loan Documents, or otherwise,including, without limitation, all obligations relating to letters of credit,cash management services, and foreign exchange contracts, if any, and includinginterest accruing after Insolvency Proceedings begin and debts, liabilities, orobligations of Borrower assigned to Bank, and the performance of Borrower’sduties under the Loan Documents. “OPERATING DOCUMENTS” are, for any Person, such Person’s formationdocuments, as certified with the Secretary of State of such Person’s state offormation on a date that is no earlier than 30 days prior to the Effective Date,and, (a) if such Person is a corporation, its bylaws in current form, (b) ifsuch Person is a limited liability company, its limited liability companyagreement (or similar agreement), and (c) if such Person is a partnership, itspartnership agreement (or similar agreement), each of the foregoing with allcurrent amendments or modifications thereto. “PERFECTION CERTIFICATE” is defined in Section 5.1. “PERMITTED INDEBTEDNESS” is: (a) Borrower’s Indebtedness to Bank under this Agreement and the other LoanDocuments; (b) Indebtedness existing on the Effective Date and shown on the PerfectionCertificate; (c) Subordinated Debt; (d) unsecured Indebtedness to trade creditors incurred in the ordinarycourse of business; (e) Indebtedness incurred as a result of endorsing negotiable instrumentsreceived in the ordinary course of business; (f) Indebtedness in an aggregate principal amount not to exceed One MillionDollars ($1,000,000) secured by Permitted Liens; and (g) extensions, refinancings, modifications, amendments and restatements ofany items of Permitted Indebtedness (a) through (f) above, provided that theprincipal amount thereof is not increased or the terms thereof are not modifiedto impose more burdensome terms upon Borrower or its Subsidiary, as the case maybe. 27 “PERMITTED INVESTMENTS” are: (a) Investments shown on the Perfection Certificate and existing on theEffective Date; (b) Cash Equivalents; (c) Investments consisting of the endorsement of negotiable instruments fordeposit or collection or similar transactions in the ordinary course ofBorrower; (d) Investments consisting of deposit accounts in which Bank has aperfected security interest; (e) Investments accepted in connection with Transfers permitted by Section7.1; (f) Investments of Subsidiaries in or to other Subsidiaries or Borrower andInvestments by Borrower in Subsidiaries not to exceed One Million Dollars($1,000,000); (g) Investments consisting of (i) travel advances and employee relocationloans and other employee loans and advances in the ordinary course of business,and (ii) loans to employees, officers or directors relating to the purchase ofequity securities of Borrower or its Subsidiaries pursuant to employee stockpurchase plans or agreements approved by Borrower’s Board of Directors; (h) Investments (including debt obligations) received in connection withthe bankruptcy or reorganization of customers or suppliers and in settlement ofdelinquent obligations of, and other disputes with, customers or suppliersarising in the ordinary course of business; and (i) Investments consisting of notes receivable of, or prepaid royalties andother credit extensions, to customers and suppliers who are not Affiliates, inthe ordinary course of business; provided that this paragraph (i) shall notapply to Investments of Borrower in any Subsidiary. “PERMITTED LIENS” are: (a) Liens existing on the Effective Date and shown on the PerfectionCertificate or arising under this Agreement and the other Loan Documents; (b) Liens for taxes, fees, assessments or other government charges orlevies, either not delinquent or being contested in good faith and for whichBorrower maintains adequate reserves on Borrower’s Books, if they have nopriority over any of Bank’s Liens; (c) purchase money Liens (i) on Equipment acquired or held by Borrowerincurred for financing the acquisition of the Equipment securing no more thanFive Hundred Thousand Dollars ($500,000) in the aggregate amount outstanding, or(ii) existing on Equipment when acquired, if the Lien is confined to theproperty and improvements and the proceeds of the Equipment; 28 (d) statutory Liens securing claims or demands of materialmen, mechanics,carriers, warehousemen, landlords and other Persons imposed without action ofsuch parties, provided the aggregate amount of such Liens does not at any timeexceed Fifty Thousand Dollars ($50,000); (e) Liens to secure payment of workers’ compensation, employment insurance,old-age pensions, social security and other like obligations incurred in theordinary course of business, provided, they have no priority over any of Bank’sLiens and the aggregate amount of the Indebtedness secured by such Liens doesnot at any time exceed Fifty Thousand Dollars ($50,000); (f) Liens incurred in the extension, renewal or refinancing of theindebtedness secured by Liens described in (a) through (c), but any extension,renewal or replacement Lien must be limited to the property encumbered by theexisting Lien and the principal amount of the indebtedness may not increase; (g) leases or subleases of real property granted in the ordinary course ofbusiness, and leases, subleases, non-exclusive licenses or sublicenses ofproperty (other than real property or intellectual property) granted in theordinary course of Borrower’s business, if the leases, subleases, licenses andsublicenses do not prohibit granting Bank a security interest; (h) non-exclusive license of intellectual property granted to third partiesin the ordinary course of business; (i) Liens arising from judgments, decrees or attachments in circumstancesnot constituting an Event of Default under Section 8.4 or 8.7; and (j) Liens in favor of other financial institutions arising in connectionwith Borrower’s deposit and/or securities accounts held at such institutions,provided that Bank has a perfected security interest in the amounts held in suchsecurities accounts. “PERSON” is any individual, sole proprietorship, partnership, limitedliability company, joint venture, company, trust, unincorporated organization,association, corporation, institution, public benefit corporation, firm, jointstock company, estate, entity or government agency. “PRIME RATE” is Bank’s most recently announced “prime rate,” even if it isnot Bank’s lowest rate. “QUICK ASSETS” is, on any date, Borrower’s unrestricted cash, CashEquivalents, net billed accounts receivable and investments with maturities offewer than twelve (12) months determined according to GAAP. “REGISTERED ORGANIZATION” is any “registered organization” as defined inthe Code with such additions to such term as may hereafter be made “REGULATORY CHANGE” means, with respect to Bank, any change on or after thedate of this Agreement in United States federal, state, or foreign laws orregulations, including Regulation D, or the adoption or making on or after suchdate of any interpretations, directives, or requests applying to a class oflenders including Bank, of or under any United States federal or 29state, or any foreign, laws or regulations (whether or not having the force oflaw) by any court or governmental or monetary authority charged with theinterpretation or administration thereof. “RESPONSIBLE OFFICER” is any of the Chief Executive Officer, President,Chief Financial Officer and Controller of Borrower. “RESERVE REQUIREMENT” means, for any Interest Period, the average maximumrate at which reserves (including any marginal, supplemental, or emergencyreserves) are required to be maintained during such Interest Period underRegulation D against “Eurocurrency liabilities” (as such term is used inRegulation D) by member banks of the Federal Reserve System. Without limitingthe effect of the foregoing, the Reserve Requirement shall reflect any otherreserves required to be maintained by Bank by reason of any Regulatory Changeagainst (a) any category of liabilities which includes deposits by reference towhich the LIBOR Rate is to be determined as provided in the definition of LIBORor (b) any category of extensions of credit or other assets which include CreditExtensions. “SECURITIES ACCOUNT” is any “securities account” as defined in the Codewith such additions to such term as may hereafter be made. “SUBORDINATED DEBT” is indebtedness incurred by Borrower subordinated toall of Borrower’s now or hereafter indebtedness to Bank (pursuant to asubordination, intercreditor, or other similar agreement in form and substancesatisfactory to Bank entered into between Bank and the other creditor), on termsacceptable to Bank. “SUBSIDIARY” means, with respect to any Person, any Person of which morethan 50% of the voting stock or other equity interests is owned or controlled,directly or indirectly, by such Person or one or more Affiliates of such Person(other than Credit Suisse, or any Non-Natural Affiliates). “TERM LOAN” is a loan made by Bank pursuant to the terms of Section 2.1.1hereof. “TERM LOAN AMOUNT” is an aggregate amount equal to Twenty Million Dollars($20,000,000) outstanding at any time. “TERM LOAN MATURITY DATE” is the day which is twenty-four (24) months afterthe Funding Date, but in no event later than March 31, 2008. “TERM LOAN PAYMENT” is defined in Section 2.1.1(b). “TRANSFER” is defined in Section 7.1. [Signature page follows.] 30 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to beexecuted as of the Effective Date.BORROWER:COMMVAULT SYSTEMS, INC.By /s/ Louis F. Miceli ———————————-Name: Louis F. MiceliTitle: CFOBANK:SILICON VALLEY BANKBy /s/ Richard White ———————————-Name: Richard WhiteTitle: Relationship ManagerEffective Date: May 2, 2006 [Signature page to Loan and Security Agreement] 31 EXHIBIT AThe Collateral consists of all of Borrower’s right, title and interest in and tothe following personal property: All goods, Accounts (including health-care receivables), Equipment,Inventory, contract rights or rights to payment of money, leases, licenseagreements, franchise agreements, General Intangibles, commercial tort claims,documents, instruments (including any promissory notes), chattel paper (whethertangible or electronic), cash, deposit accounts, fixtures, letters of creditrights (whether or not the letter of credit is evidenced by a writing),securities, and all other investment property, supporting obligations, andfinancial 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. All other terms contained in this Exhibit, unless otherwise indicated,shall have the meanings provided by the Code (as defined herein), to the extentsuch terms are defined in the Code. For purposes hereof, the following termsshall have the following meanings: “ACCOUNTS” are all existing and later arising accounts, contract rights,and other obligations owed Borrower in connection with its sale or lease ofgoods (including licensing software and other technology) or provision ofservices, all credit insurance, guaranties, other security and all merchandisereturned or reclaimed by Borrower and Borrower’s Books relating to any of theforegoing, as such definition may be amended from time to time according to theCode. “BORROWER’S BOOKS” are all Borrower’s books and records including ledgers,records regarding Borrower’s assets or liabilities, the Collateral, businessoperations or financial condition and all computer programs or discs or anyequipment containing the information. “CODE” is the Uniform Commercial Code as adopted in Pennsylvania as amendedand in effect from time to time. “COPYRIGHTS” are all copyright rights, applications or registrations andlike protections in each work or authorship or derivative work, whetherpublished or not (whether or not it is a trade secret) now or later existing,created, acquired or held. “EQUIPMENT” is all present and future machinery, equipment, tenantimprovements, furniture, fixtures, vehicles, tools, parts and attachments inwhich Borrower has any interest. Exhibit A Page 1 “INTELLECTUAL PROPERTY” is: (a) Copyrights, Trademarks, Mask Works and Patents includingamendments, renewals, extensions, and all licenses or other rights to use andall license fees and royalties from the use; (b) Any trade secrets and any intellectual property rights in computersoftware, chip design, chip mask works and computer software products now orlater existing, created, acquired or held; (c) All design rights, including chips, masks and associated softwarewhich may be available to Borrower now or later created, acquired or held; (d) Any claims for damages (past, present or future) for infringementof any of the rights above, with the right, but not the obligation, to sue andcollect damages for use or infringement of the intellectual property rightsabove; (e) All Proceeds and products of the foregoing, including allinsurance, indemnity or warranty payments. “INVENTORY” is present and future inventory in which Borrower has anyinterest, including merchandise, raw materials, parts, supplies, packing andshipping materials, work in process and finished products intended for sale orlease or to be furnished under a contract of service, of every kind anddescription now or later owned by or in the custody or possession, actual orconstructive, of Borrower, including inventory temporarily out of its custody orpossession or in transit and including returns on any accounts or other proceeds(including insurance proceeds) from the sale or disposition of any of theforegoing and any documents of title. “LETTER-OF-CREDIT RIGHT” means a right to payment or performance under aletter of credit, whether or not the beneficiary has demanded or is at the timeentitled to demand payment or performance. “MASK WORKS” are all mask works or similar rights available for theprotection of semiconductor chips, now owned or later acquired. “PATENTS” are patents, patent applications and like protections, includingimprovements, divisions, continuations, renewals, reissues, extensions andcontinuations in part of the same. “PROCEEDS” has the meaning described in the Code as in effect from time totime. “SUPPORTING OBLIGATION” means a letter-of-credit right, secondaryobligation or obligation of a secondary obligor or that supports the payment orperformance of an account, chattel paper, a document, a general intangible, aninstrument or investment property. “TRADEMARKS” are trademark and service mark rights, registered or not,applications to register and registrations and like protections, and the entiregoodwill of the business of Borrower connected with the trademarks. Exhibit A Page 2 EXHIBIT B FORM OF NOTICE OF BORROWING COMMVAULT SYSTEMS, INC. Date: ______________TO: SILICON VALLEY BANK 3003 Tasman Drive Santa Clara, CA 95054 Attention: Corporate Services DepartmentRE: Loan and Security Agreement dated as of March __, 2006 (as amended, modified, supplemented or restated from time to time, the “Loan Agreement”), by and between Commvault Systems, Inc. (“Borrower”), and Silicon Valley Bank (“Bank”)Ladies and Gentlemen: The undersigned refers to the Loan Agreement, the terms defined therein andused herein as so defined, and hereby gives you notice irrevocably, pursuant toSection 3.2 of the Loan Agreement, of the borrowing of an Advance. 1. The Funding Date, which shall be a Business Day, of the requestedborrowing is _______________. The undersigned hereby certifies that the following statements are true onthe date hereof, and will be true on the date of the proposed Advance before andafter giving effect thereto, and to the application of the proceeds therefrom,as applicable: (a) all representations and warranties of Borrower contained in the Loan Agreement are true, accurate and complete in all material respects as of the date hereof; (b) no Default or Event of Default has occurred and is continuing, or would result from such proposed Credit Extension; and (c) the requested Credit Extension will not exceed the Term Loan Amount.BORROWER COMMVAULT SYSTEMS, INC. By: ————————————— Name: ————————————- Title: ———————————— Exhibit B Page 1For internal Bank use only

LIBOR Pricing Date LIBOR LIBOR Variance Maturity Date- —————— —– ————– ————- ____%

Exhibit B Page 2 EXHIBIT C COMPLIANCE CERTIFICATETO: SILICON VALLEY BANK Date: ______________FROM: COMMVAULT SYSTEMS, INC. The undersigned authorized officer of COMMVAULT SYSTEMS, INC. (“Borrower”)certifies that under the terms and conditions of the Loan and Security Agreementbetween Borrower and Bank (the “Agreement”), (1) Borrower is in completecompliance for the period ending _______________ with all required covenantsexcept as noted below, (2) there are no Events of Default, (3) allrepresentations and warranties in the Agreement are true and correct in allmaterial respects on this date except as noted below; provided, however, thatsuch materiality qualifier shall not be applicable to any representations andwarranties that already are qualified or modified by materiality in the textthereof; and provided, further that those representations and warrantiesexpressly referring to a specific date shall be true, accurate and complete inall material respects as of such date, (4) Borrower, and each of itsSubsidiaries, has timely filed all required tax returns and reports, andBorrower has timely paid all foreign, federal, state and local taxes,assessments, deposits and contributions owed by Borrower except as otherwisepermitted pursuant to the terms of Section 5.8of the Agreement, and (5) no Lienshave been levied or claims made against Borrower or any of its Subsidiariesrelating to unpaid employee payroll or benefits of which Borrower has notpreviously provided written notification to Bank. Attached are the requireddocuments supporting the certification. The undersigned certifies that these areprepared in accordance with GAAP consistently applied from one period to thenext except as explained in an accompanying letter or footnotes. The undersignedacknowledges that no borrowings may be requested at any time or date ofdetermination that Borrower is not in compliance with any of the terms of theAgreement, and that compliance is determined not just at the date thiscertificate is delivered. Capitalized terms used but not otherwise definedherein shall have the meanings given them in the Agreement.PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER “COMPLIES” COLUMN.

REPORTING COVENANT REQUIRED COMPLIES —————— ——– ——– PRE-IPOMonthly financial statements withCompliance Certificate Monthly within 30 days Yes NoAnnual financial statement (CPA Audited) + CC FYE within 120 days Yes NoAnnual Board Projections Board Approval plus 30 days Yes NoPOST-IPOMonthly Cash Balance Report Monthly within 7 days Yes NoCompliance Certificate Quarterly within 45 days Yes No10-Q and 8-K Quarterly within 45 days Yes No10-K FYE plus 120 days Yes NoAnnual Board Projections Board Approval plus 30 days Yes No

Exhibit C Page 1The following Intellectual Property was registered after the Effective Date (ifno registrations, state “None”)

FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES —————— ———- ——— ——– Maintain on a Monthly Basis:Minimum Quick Ratio ___1.5:1.0 _____:1.0 Yes No

The financial covenant analysis and information set forth in Schedule 1attached hereto is 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.”)- ——————————————————————————— ——————————————————————————— ——————————————————————————–COMMVAULT SYSTEMS, INC. BANK USE ONLYBy: Received by: ——————————— —————————Name: AUTHORIZED SIGNER ——————————- Date:Title: ———————————- —————————— Verified: —————————— AUTHORIZED SIGNER Date: ———————————- Compliance Status: Yes No Exhibit C Page 2 SCHEDULE 1 TO COMPLIANCE CERTIFICATE FINANCIAL COVENANTS OF BORROWERDated: ____________________I. ADJUSTED QUICK RATIO (Section 6.6)Required: 1.5:1.0Actual:

A. Value of Line I.D. (Quick Assets) $________B. Value of Line I.G. (Current Liabilities) $________C. Aggregate value of all amounts received or invoiced by Borrower in advance of performance under contracts and not yet recognized as revenue $________D. Line B minus line C $________E. Adjusted Quick Ratio (line A divided by line C) ________

Is line E equal to or greater than 1.5:1:0?_____ No, not in compliance _____ Yes, in compliance Schedule 1 to Compliance Certificate Page 1 EXHIBIT D BORROWING RESOLUTIONS Exhibit D Page 1 EXHIBIT E PERFECTION CERTIFICATETO: SILICON VALLEY BANK The undersigned, the of COMMVAULT SYSTEMS, INC. (the “Company”), herebyrepresents and warrants to you on behalf of the Company as follows: 1. NAMES OF THE COMPANY a. The name of the Company as it appears in its current Articles orCertificate of Incorporation is: b. The federal employer identification number of the Company is: c. The Company is formed under the laws of the State Delaware. d. The organizational identification number of the Company is: e. The Company transacts business in the following jurisdictions (listjurisdictions other than jurisdiction of formation): f. The Company is duly qualified to transact business as a foreign entityin the following jurisdictions (list jurisdictions other than jurisdiction offormation): g. The following is a list of all other names (including fictitious names,d/b/a’s, trade names or similar names) currently used by the Company or usedwithin the past five years:

Name Period of Use- —- ————-

Exhibit E Page 1 h. The following are the names of all entities which have been merged intothe Company during the past five years:

Name of Merged Entity Year of Merger- ——————— ————–

i. The following are the names and addresses of all entities from whom theCompany has acquired any personal property in a transaction not in the ordinarycourse of business during the past five years, together with the date of suchacquisition and the type of personal property acquired (e.g., equipment,inventory, etc.):

Name Address Date of Acquisition Type of Property- —- ——- ——————- —————-

2. PARENT/SUBSIDIARIES OF THE COMPANY. a. The legal name of each subsidiary and parent of the Company is asfollows. (A “parent” is an entity owning more than 50% of the outstandingcapital stock of the Company. A “subsidiary” is an entity, 50% or more of theoutstanding capital stock of which is owned by the Company.)

Name Subsidiary/Parent Fed. Employer ID No.- —- —————– ——————– Sub [ ] Parent [ ] Sub [ ] Parent [ ] Sub [ ] Parent [ ]

b. The following is a list of the respective jurisdictions and dates offormation of the parent and each subsidiary of the Company:

Name Jurisdiction Date of Formation- —- ———— —————–

c. The following is a list of all other names (including fictitious names,d/b/a’s, trade names or similar names) currently used by each subsidiary of theCompany or used during the past five years:

Name Subsidiary- —- ———-

Exhibit E Page 2 d. The following are the names of all corporations which have been mergedinto a subsidiary of the Company during the five years:

Name Subsidiary- —- ———-

e. The following are the names and addresses of all entities from whom eachsubsidiary of the Company has acquired any personal property in a transactionnot in the ordinary course of business during the past five years, together withthe date of such acquisition and the type of personal property acquired (e.g.,equipment, inventory, etc.):

Date of Type ofName Address Acquisition Property Subsidiary- —- ——- ———– ——– ———-

LOCATIONS OF Company AND ITS SUBSIDIARIES a. The chief executive offices of the Company and its subsidiaries arepresently located at the following addresses:

Complete Street and Mailing Address, including County and Zip Code Company/Subsidiary- ———————————— —————— Company [ ] OR Name of Sub Company [ ] OR Name of Sub Company [ ] OR Name of Sub Company [ ] OR Name of Sub

b. The Company’s books and records and those of its subsidiaries arelocated at the following additional addresses (if different from the above): Exhibit E Page 3

Complete Street and Mailing Address, including County and Zip Code Company/Subsidiary- ———————————— —————— Company [ ] OR Name of Sub Company [ ] OR Name of Sub Company [ ] OR Name of Sub Company [ ] OR Name of Sub

c. The following are all the locations where the Company and itssubsidiaries own, lease, or occupy any real property:

Complete Street and Mailing Address, including County and Zip Code Company/Subsidiary- ———————————— —————— Company [ ] OR Name of Sub Company [ ] OR Name of Sub Company [ ] OR Name of Sub Company [ ] OR Name of Sub

d. The following are all of the locations where the Company and itssubsidiaries maintain any inventory, equipment, or other property:

Complete Address Company/Subsidiary- —————- —————— Company [ ] OR Name of Sub Company [ ] OR Name of Sub Company [ ] OR Name of Sub Company [ ] OR Name of Sub

Exhibit E Page 4 e. The following are the names and addresses of all warehousemen, bailees,or other third parties who have possession of any of the Company’s inventory orequipment or any of the inventory or equipment of its subsidiaries:

Complete Street and Mailing Address,Name including County and Zip Code Company/Subsidiary- —- ———————————— —————— Company [ ] OR Name of Sub Company [ ] OR Name of Sub Company [ ] OR Name of Sub Company [ ] OR Name of Sub

4. SPECIAL TYPES OF COLLATERAL a. The Company and its subsidiaries own the following kinds of assets. (Ifthe answer is “Yes” to any of the following questions, please attach a scheduledescribing each such asset owned by the Company or its subsidiaries andidentifying which party owns the asset.)

Copyrights or copyright applications registered with the U.S. Copyright Office Yes [ ] No [ ]Software registered with the U.S. Copyright Office Yes [ ] No [ ]Software not registered with the U.S. Copyright Office Yes [ ] No [ ]Patents and patent applications Yes [ ] No [ ]Trademarks or trademark applications (including any service marks, collective marks and certification marks) Yes [ ] No [ ]Licenses to use trademarks, patents and copyrights of others Yes [ ] No [ ]Licenses, permits (including environmental), authorizations, or certifications issued by federal, state, or local governments issued to the Company and/or its subsidiaries or with respect to their assets, properties, or businesses Yes [ ] No [ ]Stocks, bonds or other securities Yes [ ] No [ ]Promissory notes, or other instruments or evidence of indebtedness Yes [ ] No [ ]Leases of equipment, security agreements naming such person as secured party or other chattel paper Yes [ ] No [ ]Aircraft Yes [ ] No [ ]Vessels, Boats or Ships Yes [ ] No [ ]Railroad Rolling Stock Yes [ ] No [ ]Motor Vehicles Yes [ ] No [ ]

Exhibit E Page 5 b. The following is a list of material contracts to which the Company is aparty (include any equipment leases) or in which the Company has an interest(including whether such contract has a nonassignability provision which wouldrequire the other party’s or another person’s consent to the granting of asecurity interest in such contract): Nonassignability Clause

ConsentOther Party Title/Date Asset Sale Security Obtainedto Contract of Contract (Y/N) (Y/N) Interest (Y/N)- ———– ———– ———- ——– ——– ——–

c. The following are all banks or savings institutions at which the Companyand its subsidiaries maintain deposit accounts:

Bank Name Account Number Branch Address Company/Subsidiary- ——— ————– ————– —————— Company [ ] OR Name of Sub Company [ ] OR Name of Sub Company [ ] OR Name of Sub Company [ ] OR Name of Sub

d. Does or is it contemplated that the Company will regularly receiveletters of credit from customers or other third parties to secure payments ofsums owed to the Company? The following is a list of letters of credit namingthe Company as “beneficiary” thereunder:

LC Number Name of LC Issuer LC Applicant- ——— —————– ————

Exhibit E Page 6 5. ENCUMBRANCES The Company’s and its subsidiaries’ property are subject to the followingliens or encumbrances:

Name of Holder ofLien/Encumbrance Description of Property Encumbered Company/Subsidiary- —————– ———————————- —————— Company [ ] OR Name of Sub Company [ ] OR Name of Sub Company [ ] OR Name of Sub

6. LITIGATION a. The following is a complete list of pending and threatened litigation orclaims involving amounts claimed against the Company in an indefinite amount orin excess of $50,000 in each case: b. The following are the only claims which the Company has against others(other than claims on accounts receivable), which the Company is asserting orintends to assert, and in which the potential recovery exceeds $50,000: 7. TAXES The following tax assessments are currently outstanding and unpaid:

Assessing Authority Amount and Description- ——————- ———————-

8. INSURANCE BROKER The following broker handles the Company’s property insurance:


9. OFFICERS OF THE COMPANY AND ITS SUBSIDIARIES The following are the names and titles of the officers of the Company andits subsidiaries.

Office/Title Name of Officer Company/Subsidiary- ———— ————— —————— Company [ ] OR Name of Sub

Exhibit E Page 7

Company [ ] OR Name of Sub Company [ ] OR Name of Sub Company [ ] OR Name of Sub

10. IRS FORM W9 The Company’s completed and executed IRS Form W9 is attached hereto asExhibit A. 11. LEGAL COUNSEL The following attorney will represent the Company in connection with theloan documents:


The Company agrees to advise you of any change or modification to any ofthe foregoing information or any supplemental information provided on anycontinuation pages attached hereto, and, until such notice is received by you,you shall be entitled to rely upon such information and presume it is correct.The Company acknowledges that your acceptance of this Perfection Certificate andany continuation pages does not imply any commitment on your part to enter intoa loan transaction with the Company, and that any such commitment may only bemade by an express written loan commitment, signed by one of your authorizedofficers.Date: ——————————- COMMVAULT SYSTEMS, INC. By: ———————————— Its: ———————————– Email: ——————————— Phone: ——————————— Fax: ———————————– Exhibit E Page 8 EXHIBIT F ACCOUNT CONTROL AGREEMENT Exhibit F Page 1