**Exhibit10.1**

 

**LOANMODIFICATION AGREEMENT**

 

ThisLoan Modification Agreement is entered into as of September 20, 2004, by andbetween Intraware, Inc. (the “Borrower”) and Silicon Valley Bank (“Bank”).

 

1.             DESCRIPTION OF EXISTINGOBLIGATIONS:  Among other Obligationswhich may be owing by Borrower to Bank, Borrower is indebted to Bank pursuantto, among other documents, a Loan and Security Agreement, dated August 1, 2003,as amended or modified from time to time, (the “Loan Agreement”). The LoanAgreement provides for, among other things, a Committed Equipment Line in theoriginal principal amount of Five Hundred Thousand Dollars ($500,000) and aTerm Loan in the original principal amount of One Million Nine HundredEighty-Two Thousand Nine Hundred Forty-Five Dollars ($1,982,945).  Defined terms used but not otherwise definedherein shall have the same meanings as set forth in the Loan Agreement.

 

Hereinafter, allindebtedness owing by Borrower to Bank shall be referred to as the “Obligations.”

 

2.             DESCRIPTION OF COLLATERAL. Repayment of theObligations is secured by the Collateral as described in the Loan Agreement.

 

Hereinafter,the above-described security documents and guaranties, together with all otherdocuments securing repayment of the Obligations shall be referred to as the “SecurityDocuments”.  Hereinafter, the SecurityDocuments, together with all other documents evidencing or securing theObligations shall be referred to as the “Existing Loan Documents”.

 

3.**            **DESCRIPTION OF CHANGEIN TERMS.

 

A.                                Modification(s) to Loan Agreement.

 

1.                                       The following sections are hereby incorporated into the Loan Agreement:

 

2.1.3        Equipment 2 Advances.

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#### (a) Through August 1,2005 (the “Equipment 2 Availability End Date”), Bank will make advances (“Equipment2 Advance” and, collectively, “Equipment 2 Advances”) not exceeding theCommitted Equipment 2 Line.  TheEquipment 2 Advances may only be used to finance or refinance Equipmentpurchased on or after 90 days before the date of each Equipment 2 Advance andmay not exceed 100% of the equipment invoices.

 

#### (b)           Interest accrues from the date ofeach Equipment 2 Advance at the rate in Section 2.2.3 (a) and is payablemonthly until the Equipment 2 Availability End Date occurs. Equipment 2Advances outstanding on the Equipment 2 Availability End Date are payable in 24equal monthly installments of principal, plus accrued interest, beginning onthe 1st of each month following the Equipment 2 Availability End Date andending on August 1, 2007 (the “Equipment 2 Maturity Date”).  Equipment 2 Advances when repaid may not bereborrowed.

 

#### (c)           To obtain an Equipment 2 Advance,Borrower must notify Bank (the notice is irrevocable) by facsimile no laterthan 12:00 p.m. Pacific time 1 Business Day before the day on which theEquipment 2 Advance is to be made.  Thenotice in the form of Exhibit B (Payment/Advance Form) must be signed by aResponsible Officer or designee and include a copy of the invoice for theEquipment being financed.

 

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#### (d)           Bank’s obligation to lend theundisbursed portion of the Obligations will terminate if, in Bank’s solediscretion, there has been a material adverse change in the general affairs,management, results of operation, condition (financial or otherwise) or theprospect of repayment of the Obligations, or there has been any materialadverse deviation by Borrower from the most recent business plan of Borrowerpresented to and accepted by Bank prior to the execution of this Agreement.

 

Section 2.2.3 Equipment 2 Advances.

 

(a)Interest Rate.  Equipment 2 Advances accrueinterest on the outstanding principal balance at a per annum rate of thegreater of (i) Prime plus 1 percentage point, or (ii) 5.5%.  After an Event of Default, Obligations accrueinterest at 5 percent above the rate effective immediately before the Event ofDefault.  Interest is computed on a 360day year for the actual number of days elapsed.

 

(b)Payments.  Interest due on the Equipment2 Advances is payable on the 1st of each month. Bank may debit any of Borrower’s deposit accounts including AccountNumber 3300400250 for principal and interest payments owing  to Bank. Bank will promptly notify Borrower when it debits Borrower’saccounts.  These debits are not aset-off.  Payments received after 12:00noon Pacific time are considered received at the opening of business on thenext Business Day.  When a payment is dueon a day that is not a Business Day, the payment is due the next Business Dayand additional interest shall accrue.

 

2.                                       Thefollowing defined terms are hereby amended in, or incorporated into, Section13.1 entitled “Definitions”:

 

“Committed Equipment 2Line” is a Credit Extension of up to $500,000.

 

“Credit Extension” iseach Equipment Advance, Equipment 2 Advance, the Term Loan or any otherextension of credit by Bank for Borrower’s benefit.

 

“Equipment 2 Advance” is defined in Section 2.1.3.

 

“Equipment 2 Availability End Date” is defined in Section2.1.3.

 

“Equipment 2 Maturity Date” is defined inSection 2.1.3.

 

4.             CONSISTENT CHANGES.  The Existing Loan Documents are herebyamended wherever necessary to reflect the changes described above.

 

5.             NO DEFENSES OF BORROWER.  Borrower (and each guarantor and pledgorsigning below) agrees that, as of the date hereof, it has no defenses againstpaying any of the Obligations.

 

6.             PAYMENT OF LOAN FEE.  Borrower shall pay Bank a fee in the amountof Five Thousand Dollars ($5,000) (“Loan Fee”) plus all out-of-pocket expenses.

 

7.             CONTINUING VALIDITY.  Borrower (and each guarantor and pledgorsigning below) understands and agrees that in modifying the existingIndebtedness, Bank is relying upon Borrower’s representations, warranties, andagreements, as set forth in the Existing Loan Documents.  Except as expressly modified pursuant to thisLoan Modification Agreement, the terms of the Existing Loan Documents remainunchanged and in full force and effect. Bank’s agreement to modifications to the existing Obligations pursuantto this 

 

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Loan ModificationAgreement in no way shall obligate Bank to make any future modifications to theObligations.  Nothing in this LoanModification Agreement shall constitute a satisfaction of the Obligations.  It is the intention of Bank and Borrower toretain as liable parties all makers and endorsers of Existing Loan Documents,unless the party is expressly released by Bank in writing.  Unless expressly released herein, no maker,endorser, or guarantor will be released by virtue of this Loan ModificationAgreement.  The terms of this paragraphapply not only to this Loan Modification Agreement, but also to all subsequentloan modification agreements.

 

8.             CONDITIONS. The effectiveness of this Loan Modification Agreement is conditionedupon payment of the Loan Fee.

 

 

This Loan ModificationAgreement is executed as of the date first written above.

 
| **BORROWER:**       | ** **      | **BANK:**               |
|---------------------|-----------------|-------------------------|
|                |            |                    |
| **INTRAWARE, INC.** | ** **      | **SILICON VALLEY BANK** |
|                |            |                    |
| By:                 | /s/ WENDY NIETO |                    |   | By: | /s/ HEATHER HAMILTON |   |
| Name: Wendy Nieto   |            | Name: Heather Hamilton  |
| Title: CFO          |            | Title: VP               |
|                     |                 |                         |  |  |  |  |

 

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