Document:

Exhibit
10.1

 

LOAN
MODIFICATION AGREEMENT

 

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

 

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

 

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

 

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

 

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

 

3.             DESCRIPTION OF CHANGE
IN TERMS.

 

A.                                Modification(s) to Loan Agreement.

 

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

 

2.1.3        Equipment 2 Advances.

 

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

 

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

 

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

 

 

(d)           Bank’s obligation to lend the
undisbursed portion of the Obligations will terminate if, in Bank’s sole
discretion, there has been a material adverse change in the general affairs,
management, results of operation, condition (financial or otherwise) or the
prospect of repayment of the Obligations, or there has been any material
adverse deviation by Borrower from the most recent business plan of Borrower
presented 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 accrue
interest on the outstanding principal balance at a per annum rate of the
greater of (i) Prime plus 1 percentage point, or (ii) 5.5%.  After an Event of Default, Obligations accrue
interest at 5 percent above the rate effective immediately before the Event of
Default.  Interest is computed on a 360
day year for the actual number of days elapsed.

 

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

 

2.                                       The
following defined terms are hereby amended in, or incorporated into, Section
13.1 entitled “Definitions”:

 

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

 

“Credit Extension” is
each Equipment Advance, Equipment 2 Advance, the Term Loan or any other
extension 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 Section
2.1.3.

 

“Equipment 2 Maturity Date” is defined in
Section 2.1.3.

 

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

 

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

 

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

 

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

 

 

Loan Modification
Agreement in no way shall obligate Bank to make any future modifications to the
Obligations.  Nothing in this Loan
Modification Agreement shall constitute a satisfaction of the Obligations.  It is the intention of Bank and Borrower to
retain 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 Modification
Agreement.  The terms of this paragraph
apply not only to this Loan Modification Agreement, but also to all subsequent
loan modification agreements.

 

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

 

 

This Loan Modification
Agreement 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: VPExhibit 10.2

 

INTRAWARE,
INC.

 

1996
STOCK OPTION PLAN

 

STOCK
OPTION AGREEMENT

 

Unless otherwise defined herein, the terms defined in
the Plan shall have the same defined meanings in this Option Agreement.

 

I.              NOTICE OF STOCK OPTION GRANT

 

                    .

 

You have been granted an option to purchase Common
Stock of the Company, subject to the terms and conditions of the Plan and this
Option Agreement, as follows:

 

	
  Grant Number

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date of Grant

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Vesting Commencement
  Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exercise Price per
  Share

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  Total Number of Shares
  Granted

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total Exercise Price

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  Type of Option:

  	
   

  	
  Incentive Stock Option

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Nonstatutory Stock
  Option

  
	
  Term/Expiration Date:

  	
   

  	
   

  

 

Vesting Schedule:

 

This Option may be exercised, in whole or in part, in
accordance with the following schedule:

 

1/4th of the Shares subject to the
Option shall vest twelve months after the Vesting Commencement Date, and 1/48
of the Shares subject to the Option shall vest each month thereafter, subject
to the Optionee continuing to be an Employee or Consultant on such dates.

 

 

Termination Period:

 

This Option may be
exercised for three months after Optionee ceases to be an Employee or
Consultant.  Upon the death or Disability
of the Optionee, this Option may be exercised for twelve months after Optionee
ceases to be an Employee or Consultant. 
In no event shall this Option be exercised later than the
Term/Expiration Date as provided above.

 

II.            AGREEMENT

 

A.            Grant
of Option.  

 

The Plan Administrator of
the Company hereby grants to the Optionee named in the Notice of Grant attached
as Part I of this Agreement (the “Optionee”) an option (the “Option”) to
purchase the number of Shares, as set forth in the Notice of Grant, at the
exercise price per share set forth in the Notice of Grant (the “Exercise Price”),
subject to the terms and conditions of the Plan, which is incorporated herein
by reference.  Subject to Section 13 of
the Plan, in the event of a conflict between the terms and conditions of the
Plan and the terms and conditions of this Option Agreement, the terms and
conditions of the Plan shall prevail.

 

If designated in the
Notice of Grant as an Incentive Stock Option (“ISO”), this Option is intended
to qualify as an Incentive Stock Option under Section 422 of the
Code.  However, if this Option is
intended to be an Incentive Stock Option, to the extent that it exceeds the
$100,000 rule of Code Section 422(d) it shall be treated as a Nonstatutory
Stock Option (“NSO”).

 

B.            Exercise
of Option.

 

(a)           Right
to Exercise.  This Option is
exercisable during its term in accordance with the Vesting Schedule set out in
the Notice of Grant and the applicable provisions of the Plan and this Option
Agreement.

 

(b)           Method of Exercise.  This Option is exercisable by delivery of an
exercise notice, in the form attached as Exhibit A (the “Exercise Notice”),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the “Exercised Shares”), and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. 
The Exercise Notice shall be completed by the Optionee and delivered to
the Stock Administrator  of the
Company.  The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares.  This Option shall be deemed to
be exercised upon receipt by the Company of such fully executed Exercise Notice
accompanied by such aggregate Exercise Price.

 

No Shares shall be issued
pursuant to the exercise of this Option unless such issuance and exercise
complies with Applicable Laws.  Assuming
such compliance, for income tax purposes the Exercised Shares shall be
considered transferred to the Optionee on the date the Option is exercised with
respect to such Exercised Shares.

 

 

C.            Method
of Payment.

 

Payment of the aggregate
Exercise Price shall be by any of the following, or a combination thereof, at
the election of the Optionee:

 

1.           cash; or

 

2.           check; or

 

3.           consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan; or

 

4.           surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.

 

D.            Non-Transferability
of Option.

 

This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by the
Optionee.  The terms of the Plan and this
Option Agreement shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.

 

E.             Term
of Option.

 

This Option may be
exercised only within the term set out in the Notice of Grant, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option Agreement.

 

F.             Tax
Consequences.  

 

Some of the federal tax
consequences relating to this Option, as of the date of this Option, are set
forth below.  THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.  THE OPTIONEE SHOULD CONSULT A TAX ADVISER
BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

 

G.            Exercising
the Option.

 

1.           Nonstatutory Stock Option.  The Optionee may incur regular federal income
tax liability upon exercise of a NSO. 
The Optionee will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the Fair
Market Value of the Exercised Shares on the date of exercise over their
aggregate Exercise Price.  If the
Optionee is an Employee or a former Employee, the Company will be required to
withhold from his or her compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

 

 

2.           Incentive Stock Option.  If this Option qualifies as an ISO, the
Optionee will have no regular federal income tax liability upon its exercise,
although the excess, if any, of the Fair Market Value of the Exercised Shares
on the date of exercise over their aggregate Exercise Price will be treated as
an adjustment to alternative minimum taxable income for federal tax purposes
and may subject the Optionee to alternative minimum tax in the year of
exercise.  In the event that the Optionee
ceases to be an Employee but remains a Service Provider, any Incentive Stock
Option of the Optionee that remains unexercised shall cease to qualify as an
Incentive Stock Option and will be treated for tax purposes as a Nonstatutory
Stock Option on the date three (3) months and one (1) day following such change
of status.

 

3.           Disposition of Shares.

 

(a)           NSO.  If the Optionee holds NSO Shares for at least
one year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.

 

(b)           ISO.  If the Optionee holds ISO Shares for at least
one year after exercise and two years after the grant date, any gain realized
on disposition of the Shares will be treated as long-term capital gain for
federal income tax purposes.  If the
Optionee disposes of ISO Shares within one year after exercise or two years
after the grant date, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
excess, if any, of the lesser of (A) the difference between the Fair Market
Value of the Shares acquired on the date of exercise and the aggregate Exercise
Price, or (B) the difference between the sale price of such Shares and the
aggregate Exercise Price.  Any additional
gain will be taxed as capital gain, short-term or long-term depending on the
period that the ISO Shares were held.

 

(c)           Notice
of Disqualifying Disposition of ISO Shares. 
If the Optionee sells or otherwise disposes of any of the Shares
acquired pursuant to an ISO on or before the later of (i) two years after
the grant date, or (ii) one year after the exercise date, the Optionee
shall immediately notify the Company in writing of such disposition.  The Optionee agrees that he or she may be
subject to income tax withholding by the Company on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.

 

H.            Entire
Agreement; Governing Law.

 

The Plan is incorporated
herein by reference.  The Plan and this
Option Agreement con­sti­tute the entire agreement of the parties with respect
to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof, and may not be modified adversely to the Optionee’s
interest except by means of a writing signed by the Company and Optionee.  This agreement is governed by the internal
substantive laws, but not the choice of law rules, of California.

 

I.              NO
GUARANTEE OF CONTINUED SERVICE.

 

OPTIONEE ACKNOWLEDGES AND
AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS
EARNED ONLY BY CONTINUING AS AN EMPLOYEE OR CONSULTANT AT THE WILL OF THE
COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING
SHARES HEREUNDER).  OPTIONEE FURTHER
ACKNOWLEDGES AND 

 

 

AGREES THAT THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS AN EMPLOYEE OR CONSULTANT FOR THE VESTING PERIOD, FOR ANY PERIOD,
OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT
TO TERMINATE OPTIONEE’S RELATIONSHIP AS AN EMPLOYEE OR CONSULTANT AT ANY TIME,
WITH OR WITHOUT CAUSE.

 

By your signature and the signature of the Company’s
representative below, you and the Company agree that this Option is granted
under and governed by the terms and conditions of the Plan and this Option
Agreement.  Optionee has reviewed the
Plan and this Option Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option Agreement and fully
understands all provisions of the Plan and Option Agreement.  Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions relating to the Plan and Option Agreement.  Optionee further agrees to notify the Company
upon any change in the residence address indicated below.

 

	
  OPTIONEE:

  	
   

  	
  INTRAWARE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Residence Address

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

CONSENT
OF SPOUSE

 

 

The undersigned spouse of Optionee has read and hereby
approves the terms and conditions of the Plan and this Option Agreement (Grant
#       ). 
In consideration of the Company’s granting his or her spouse the right
to purchase Shares as set forth in the Plan and this Option Agreement, the
undersigned hereby agrees to be irrevocably bound by the terms and conditions
of the Plan and this Option Agreement and further agrees that any community
property interest shall be similarly bound. 
The undersigned hereby appoints the undersigned’s spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Spouse of Optionee

  	
   

  

 

 

EXHIBIT
A

 

INTRAWARE,
INC.

 

1996
STOCK OPTION PLAN

 

EXERCISE
NOTICE

 

Intraware, Inc.

25 Orinda Way

Orinda, California 94563

Attention:  Stock Administrator

 

 

1.             Exercise of Option.  Effective as of today,                    ,
         , the undersigned (“Purchaser”)
hereby elects to purchase                    
shares (the “Shares”) of the Common Stock of Intraware, Inc. (the “Company”)
under and pursuant to the 1996 Stock Option Plan (the “Plan”) and the Stock
Option Agreement dated,          
(the “Option Agreement”).  The purchase
price for the Shares shall be $        ,
as required by the Option Agreement.

 

2.             Delivery of Payment.  Purchaser herewith delivers to the Company
the full purchase price for the Shares.

 

3.             Representations of Purchaser.  Purchaser acknowledges that Purchaser has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.

 

4.             Rights as Shareholder.  Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exer­cise of the Option.  The Shares so acquired shall be issued to the
Optionee as soon as practicable after exercise of the Option.  No adjustment will be made for a divi­dend or
other right for which the record date is prior to the date of issuance, except
as pro­vided in Sec­tion 11 of the Plan.

 

5.             Tax Consultation. 
Purchaser understands that Purchaser may suffer adverse tax consequences
as a result of Purchaser’s purchase or disposition of the Shares.  Purchaser represents that Purchaser has
consulted with any tax consultants Purchaser deems advisable in connection with
the purchase or dis­position of the Shares and that Purchaser is not relying on
the Company for any tax advice.

 

 

6.             Entire Agreement; Governing Law.  The Plan and Option Agreement are
incorporated herein by reference.  This
Agreement, the Plan and the Option Agreement con­sti­tute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Purchaser
with respect to the subject matter hereof, and may not be modified adversely to
the Purchaser’s interest except by means of a writing signed by the Company and
Purchaser.  This agreement is governed by
the internal substantive laws, but not the choice of law rules, of California.

 

	
  Submitted by:

  	
   

  	
  Accepted by:

  
	
   

  	
   

  	
   

  
	
  PURCHASER:

  	
   

  	
  INTRAWARE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Stock Administrator

  
	
  Print Name

  	
   

  	
  Its

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Intraware, Inc.

  
	
   

  	
   

  	
  25 Orinda Way

  
	
   

  	
   

  	
  Orinda, California
  94563

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date Received

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