Document:

Exhibit 10.1

 

Note:   The **** symbol indicates that material has
been omitted pursuant to a request for confidential treatment.  A copy of this document without omissions has
been filed separately with the Securities and Exchange Commission.

 

ASSET PURCHASE AGREEMENT

 

This Asset
Purchase Agreement (the “Agreement”) is made and entered into as of October 28,
2005 by and between Intraware, Inc., a Delaware corporation having its
principal place of business at 25 Orinda Way, Orinda, CA 94563 (“Intraware”)
and FusionStorm (“FusionStorm”), a Delaware corporation having its
principal place of business at 620 Old West Center Street, Franklin, MA 02038.

 

RECITALS

 

WHEREAS,

 

A.            Intraware is in the business of
assisting Software Spectrum, Inc., the successor-in-interest to CorpSoft, Inc.,
(“Spectrum”) as an alliance
partner in reselling certain Sun Microsystems, Inc. software products, and
Intraware is also in the business of providing hosted electronic software and
license delivery and management services;

 

B.
           FusionStorm is in the business
of providing technology solutions, including but not limited to third-party
software products, to enterprises; and

 

C.
           FusionStorm wishes to purchase
and acquire from Intraware information that Intraware has developed about purchasers
and prospective purchasers of such Sun software products, and Intraware wishes
to sell and transfer such customer information to FusionStorm, subject to the
conditions herein.

 

A
G R E E M E N T

 

NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants and agreements contained herein, the parties
agree as follows:

 

ARTICLE I

DEFINITIONS

 

As used herein, the following terms shall
have the following meanings:

 

1.1           “Closing Date” shall mean sixty-six (66)
days after the Effective Date or such other date that the parties may agree
upon in writing.

 

 

1.2           “Damages” shall mean any claim, demand,
loss, liability, damage or expense including, without limitation, interest,
penalties, and reasonable attorneys’, accountants’ and experts’ fees and costs
of investigation incurred as a result thereof.

 

1.3           “Effective Date” shall mean the date of
execution of this Agreement.

 

1.4           “Employee Trigger Date” will have the
meaning given to it in Section 7.2.

 

1.5           “Gross Profit” shall mean, with respect to a
period, the cumulative aggregate of all amounts paid or payable to FusionStorm
or any of its affiliates for sales of, licenses or other rights to use or
access Sun Software, less fees paid by FusionStorm to Sun or Sun’s distributor
for such Sun Software and excluding any sales taxes collected by FusionStorm
with respect to those sales.  Gross
Profit shall not be reduced by the amount of any bad or uncollected debt,
warranty expense or charge or other payments, fees, taxes (other than sales
taxes), expenses, costs, penalties, liabilities or charges and shall not be
increased by any rebates.  It is the
parties’ intent that Gross Profit be determined in a manner consistent the true
amount charged and paid by FusionStorm and its affiliates for the Sun Software.  In furtherance but not in limitation of the
foregoing, Gross Profit shall be increased to the extent that FusionStorm or
its affiliates charge a reduced amount for the Sun Software in return for
charging an increased amount for another product or service offered by Fusion
Storm or its affiliates, as well as to the extent that FusionStorm or its
affiliates pays an increased amount to Sun or its distributors for the Sun
Software in return for a discount on other products or services offered by Sun
or its distributors.

 

1.6           “Key Employees” shall have the meaning set
forth in Section 7.2.

 

1.7           “Purchased Assets” shall mean the Sun
Customer List.

 

1.8           “Sales Services Employees” shall mean the
individuals identified on Schedule 1.8
hereto.

 

1.9           “Serious Payment Default” shall have the
meaning set forth in Section 7.4.

 

1.10         “Services Agreement” shall mean the Services Agreement for Intraware’s provision
of the SubscribeNet service to FusionStorm, which the parties are executing
contemporaneously with the execution of this Agreement.

 

1.11         “Spectrum
Alliance Agreement” will mean the Alliance Agreement dated as of August 1,
2005, and any related confidentiality agreement, between Intraware and
Spectrum.

 

1.12         “Sun” shall mean Sun Microsystems, Inc.
and any successor.

 

2

 

1.13         “Sun Customer List” shall mean the list of Sun Software customers and
prospective customers developed by Intraware as of the Closing, as further
described in Section 4.5 below.

 

1.14         “Sun Software” shall mean only the Sun
software products currently marketed under the brands SunOne, Sun Java
Enterprise Suite, Sun Studio, Sun Development Tools, Sun Star Office and
Tarantella, including successor products, as they may be re-branded by Sun from
time to time, and licenses, maintenance and support services for such software
products.

 

ARTICLE II

SALE AND PURCHASE

 

2.1           Sale and Purchase.  Effective as of the Closing Date and subject
to the terms and conditions contained herein, Intraware hereby sells,
transfers, assigns, conveys and delivers to FusionStorm, and FusionStorm hereby
purchases and accepts from Intraware, all right, title and interest in and to
the Purchased Assets.

 

2.2           Purchase Price.  The purchase price of the Purchased Assets to
be sold to FusionStorm as provided herein shall be:

 

(a)           $400,000, which shall be paid by FusionStorm to
Intraware on the Closing Date; and

 

(b)           $200,000, which shall be paid by FusionStorm within
thirteen (13) months after the Closing Date, if Gross Profit exceeds $****
during the twelve (12) months beginning on the Closing Date and ending twelve (12)
months after the Closing Date.

 

2.3           Method of Payment.  Payments under Section 2.2 above
shall be made by wire transfer of funds to Intraware’s account.  Instructions for wire transfer of funds to
Intraware’s account are set forth in Schedule 2.3 hereto.

 

2.4           Transfer Taxes.  FusionStorm shall be liable for, and shall
pay when due, all sales, use, excise, VAT, registration, stamp or other taxes (“Transfer
Taxes”), if any, incurred in connection with the sale, purchase or transfer
of the Purchased Assets.

 

****            Indicates that
material has been omitted pursuant to a request for confidential
treatment.  A copy of this document
without omissions has been filed separately with the Securities and Exchange
Commission.

 

3

 

ARTICLE III

CLOSING;
DELIVERIES

 

3.1           Closing. 
The closing of this transaction (the “Closing”) shall be held on
the Closing Date at or about 2:00 P.M. at Intraware’s offices at 25 Orinda
Way, Orinda, CA 94563 or at such other time and place as the parties may agree.

 

3.2           Conditions to FusionStorm’s Obligations.  FusionStorm’s obligation hereunder to
purchase and pay for the Purchased Assets is subject to the satisfaction, on or
before the Closing Date, of the following conditions, any of which may be
waived, in whole or in part, by FusionStorm in its sole discretion, and both
parties shall use commercially reasonable efforts to cause such conditions to
be fulfilled:

 

(a)           Transferred Employees.  At least five (5) Key Employees who have
accepted offers of employment from FusionStorm on or before the third (3rd)
business day after the Effective Date, in accordance with Section 7.2,
have not withdrawn such acceptances.

 

(b)           Representations, Warranties and Covenants.  The representations and warranties of
Intraware contained in this Agreement shall be true and correct in all material
respects when made and on and as of the Closing Date. Intraware shall have in
all material respects duly and properly performed, complied with and observed
each of its covenants, agreements and obligations contained in this Agreement
to be performed, complied with and observed on or before the Closing Date.
FusionStorm shall have received a certificate to the effect that this condition
has been satisfied, signed by a duly authorized officer of Intraware.

 

(c)           Sale Permitted by Applicable Laws. The sale
and transfer of the Purchased Assets by Intraware hereunder shall not be
prohibited by any applicable law or governmental regulation and shall not
subject FusionStorm to any material penalty, liability or other onerous
condition under or pursuant to any applicable law or governmental regulation.

 

(d)           No Adverse Decision.  There shall be no action, suit, investigation
or proceeding pending or, to the knowledge of Intraware, threatened by or
before any court, arbitrator or administrative or governmental body which seeks
to restrain, enjoin, prevent the consummation of or otherwise affect the transactions
contemplated by this Agreement or questions the validity or legality of any
such transactions or seeks to recover damages or to obtain other relief in
connection with any such transactions.

 

3.3           Conditions to Intraware’s Obligations.  The obligation of Intraware to consummate the
transactions contemplated hereby is subject to the fulfillment of the following

 

4

 

conditions on
or prior to the Closing Date, any of which may be waived, in whole or in part,
by Intraware in its sole discretion, and both parties shall use their
reasonable best efforts to cause such conditions to be fulfilled:

 

(a)           Representations and Warranties Correct;
Performance. The representations and warranties of FusionStorm contained in
this Agreement shall be true and correct in all material respects when made and
on and as of the Closing Date. 
FusionStorm shall have in all material respects duly and properly
performed, complied with and observed each of its covenants, agreements and
obligations contained in this Agreement to be performed, complied with and
observed on or before the Closing Date. 
Intraware shall have received a certificate to the effect that this
condition has been satisfied, signed by a duly authorized officer of FusionStorm.

 

(b)           Purchase Permitted by Applicable Laws. The
purchase of and payment for the Purchased Assets to be purchased by FusionStorm
hereunder shall not be prohibited by any applicable law or governmental
regulation and shall not subject Intraware to any material penalty, liability
or other onerous condition under or pursuant to any applicable law or
governmental regulation.

 

(c)           No Adverse Decision.  There shall be no action, suit, investigation
or proceeding pending or, to the knowledge of Fusionstorm, threatened by or
before any court, arbitrator or administrative or governmental body which seeks
to restrain, enjoin, prevent the consummation of or otherwise affect the
transactions contemplated by this Agreement or questions the validity or legality
of any such transactions or seeks to recover damages or to obtain other relief
in connection with any such transactions.

 

3.4           Deliverables.  At the Closing, Intraware shall deliver or
cause to be delivered to FusionStorm the Sun Customer List and such other
documents and instruments of transfer as may be necessary or appropriate to
convey title to the Purchased Assets to FusionStorm.  At the Closing, FusionStorm shall deliver to
Intraware the Purchase Price provided for in Section 2.2(a) above,
in accordance with Section 2.3 above, and such other documents and
instruments of transfer as may be necessary or appropriate to consummate the
transactions contemplated hereby.

 

ARTICLE IV

INTRAWARE’S
REPRESENTATION AND WARRANTIES

 

Except as set forth in the Disclosure
Schedules attached hereto as Exhibit A, Intraware hereby represents
and warrants that as of the Effective Date and at Closing:

 

4.1           Organization and Good Standing.   Intraware is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals to carry on its business as
now conducted.

 

5

 

4.2           Corporate Authority.  Intraware has full authority to execute,
deliver and perform this Agreement in accordance with its terms.  The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby does not and will
not result in a breach, violation or default or give rise to an event which
with the giving of notice or after the passage of time, would result in a
breach, violation or default of any of the terms or provisions of Intraware’s
Certificate of Incorporation, as amended, or by-laws or of any indenture,
agreement, judgment, decree or other instrument or restriction to which
Intraware is a party or by which Intraware or any of the Purchased Assets may
be bound or affected, except where the breach, violation or default will not
have a material adverse effect on FusionStorm’s use and enjoyment of the
Purchased Assets.  The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all requisite corporate action
on the part of Intraware and no further authorization or approval, whether of
the stockholders or directors of Intraware or governmental bodies or otherwise,
is necessary in order to enable Intraware to enter into and perform the same.

 

4.3           Rights to Purchased Assets.  None of the Purchased Assets or the use
thereof: (i) is subject to any easements, restrictions, mortgages, liens,
pledges, charges, encumbrances, encroachments or rights of others, (ii) violates
any confidentiality or trade secret rights of a third party, including but not
limited to Spectrum, or otherwise encroaches or infringes on the property or
rights of Spectrum or any other person in any material respect or that would
materially adversely affect FusionStorm’s use of the Purchased Assets as
contemplated hereunder, or (iii) contravenes any applicable law or
ordinance or any administrative regulation or violates any restrictive
covenant, the enforcement of which would result in any liability to the owner
of all or any part of the Purchased Assets or would in any respect interfere
with or prevent the present and continued use of all of the Purchased Assets
for the purposes for which they are now being used or would affect the value
thereof.  There are no agreements or
arrangements between Intraware and Spectrum or any other third person which
have any material effect upon Intraware’s rights respecting the Purchased
Assets.  This representations and
warranties in this Section 4.3 shall not be limited by the disclosures in
the attached Disclosure Schedules, notwithstanding the preamble to this Article IV.

 

4.4           Compliance With Law.  Intraware is not in violation of any laws,
governmental orders, rules or regulations, whether federal, state or
local, to which the Purchased Assets are subject that would materially
adversely affect FusionStorm’s use of the Purchased Assets as contemplated
hereunder.

 

4.5           Customers. 
The Sun Customer List is a true and complete list of (i) all
customers that have purchased Sun Software from Intraware, (ii) to the
best of Intraware’s knowledge and belief, all customers that have purchased Sun
Software from Spectrum since July 1, 2001, and (iii) all prospective
customers on Intraware’s prospect list for sales of Sun Software; provided,
however, such Sun Customer List excludes (x) customers of whom Intraware
first became aware as existing or prospective Sun Software customers as a
result of information provided by

 

6

 

Spectrum and
(y) prospective customers that Intraware added to its prospect list as a result
of information provided by Spectrum.  As
of the Effective Date, the Sun Customer List consists of **** customers that
have purchased Sun Software since July 1, 2001, and **** prospective
customers that have been added to the Sun Customer List since July 1, 2001.  To the best of Intraware’s knowledge and
belief, based on information provided by Spectrum to Intraware, customer
purchases of Sun Software from Spectrum during Intraware’s most recent fiscal
year, ended February 28, 2005, and its two most recent fiscal quarters,
ended May 31 and August 31, 2005, totaled approximately $**** in
gross sales and $**** in gross margin.

 

4.6           Litigation. 
There is no litigation currently pending or to Intraware’s knowledge threatened
that does or might affect Intraware’s interest in the Purchased Assets or its
ability to convey to FusionStorm the Purchased Assets.

 

4.7           No Untrue or Inaccurate Representation or
Warranty.  To the best of Intraware’s
knowledge, no representation or warranty by Intraware, nor any statement, schedule or
exhibit furnished or to be furnished to FusionStorm under this Agreement,
contains or will contain any untrue statement of material fact, or omits or
will omit to state a material fact necessary to make the statements in it not
misleading.

 

4.8           No Warranties.  EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE IV,
INTRAWARE HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING,
WITHOUT LIMITATION THE IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. 
WITHOUT LIMITING THE FOREGOING, INTRAWARE DOES NOT WARRANT OR REPRESENT
THAT CUSTOMERS OR PROSPECTIVE CUSTOMERS IDENTIFIED ON THE SUN CUSTOMER LIST
WILL PURCHASE ANY PARTICULAR AMOUNT OF SUN SOFTWARE FROM FUSIONSTORM OR FROM
ANY OTHER COMPANY IN THE FUTURE.

 

ARTICLE V

REPRESENTATIONS
AND WARRANTIES OF FUSIONSTORM

 

FusionStorm hereby represents and warrants to
Intraware as follows as of the Effective Date and at Closing:

 

5.1           Organization and Good Standing.  FusionStorm is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.

 

****                    Indicates that
material has been omitted pursuant to a request for confidential
treatment.  A copy of this document without
omissions has been filed separately with the Securities and Exchange
Commission.

 

7

 

5.2           Corporate
Authority. FusionStorm has full authority to execute and to perform this
Agreement in accordance with its terms. 
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby does not and will not result in a breach,
violation or default or give rise to an event which, with the giving of notice
or after the passage of time, would result in a breach, violation or default of
any of the terms or provisions of FusionStorm’s Certificate of Incorporation,
as amended, or by-laws or of any indenture, agreement, judgment, decree or
other instrument or restriction to which FusionStorm is a party or by which
FusionStorm may be bound or affected. 
The execution and delivery of this Agreement and consummation of the
transactions contemplated hereby have been duly authorized by all requisite
corporate action on the part of FusionStorm and no further authorization or
approval, whether of the stockholders or directors of FusionStorm or
governmental bodies or otherwise, is necessary in order to enable FusionStorm
to enter into and perform the same.

 

5.3           No
Untrue or Inaccurate Representation or Warranty.  To the best of FusionStorm’s knowledge, no
representation or warranty by FusionStorm, nor any statement, schedule or
exhibit furnished or to be furnished to Intraware under this Agreement,
contains or will contain any untrue statement of material fact, or omits or
will omit to state a material fact necessary to make the statements in it not
misleading.

 

ARTICLE VI

COVENANTS

 

7.1           Operation of Business.  Except as otherwise contemplated by this
Agreement, from the Effective Date hereof to the Closing Date, Intraware shall
not do any of the following with respect to the Purchased Assets without the
prior written consent of FusionStorm:

 

(a)           mortgage, pledge or subject to any lien, charge,
security interest or encumbrance any of the Purchased Assets;

 

(b)           sell, assign, transfer, convey or otherwise dispose
or agree to sell any of the Purchased Assets; or

 

(c)           grant any rights or licenses with respect to the
Purchased Assets.

 

7.2           Employees. 
Immediately on the Effective Date Intraware shall allow FusionStorm
reasonable access to the Sales Services Employees to enable FusionStorm to
evaluate such employees for potential hiring by FusionStorm.  Within one (1) business day after Effective
Date, FusionStorm shall present written offers of employment to the Sales
Services Employees selected by FusionStorm (the “Key Employees”).  If at least five (5) of such Key
Employees (or such lesser number of Key Employees as there may be) have not have
accepted offers of employment from FusionStorm by the third (3rd)
business day after the Effective Date, FusionStorm may

 

8

 

terminate this
Agreement by delivering written notice of termination to Intraware no later
than such third (3rd) business day after the Effective Date.  The above-mentioned employment offers shall
provide that any employment of the respective Key Employee with FusionStorm
shall not commence until on or after the Closing Date, except as may otherwise
by agreed in writing by Intraware and FusionStorm.  FusionStorm will have the right to make those
offers conditioned on the Closing of this Agreement.  In addition, such employment offers shall
include retention bonuses that total no less that $100,000 in the
aggregate.  To each Key Employee who accepts
such an employment offer from FusionStorm, FusionStorm shall pay the respective
bonus(es) within one (1) year of the commencement of such Key Employee’s
employment with FusionStorm, unless such Key Employee voluntarily resigns from
FusionStorm or is terminated by FusionStorm for good cause prior to the bonus
payment date agreed upon between FusionStorm and such Key Employee.  If FusionStorm terminates a Key Employee
because FusionStorm is enjoined by a court from reselling Sun Software based on
a claim related to this Agreement, then any such bonus payment made by
FusionStorm upon such termination shall be considered Damages of FusionStorm
for purposes of Intraware’s indemnification obligations under Article IX
below.   Within thirteen (13) months
after the Closing Date, FusionStorm shall deliver a report to Intraware
detailing all such retention bonuses paid by FusionStorm to Key Employees
during the first twelve (12) months after the Closing Date.

 

7.3           Non-Competition.  In consideration of the purchase price
payable by FusionStorm to Intraware under this Agreement, Intraware agrees that
it shall not, during the term of the Services Agreement and for two (2) years
after any termination or expiration of such term, (i) use the Sun Customer
List to solicit or attempt to solicit the resale, or assist any third party in
soliciting or attempting to solicit the resale, of third party software
products or maintenance services, or (ii) provide its SubscribeNet service
to Spectrum for delivery of Sun Software.

 

7.4           Payment Obligations.  For purposes of this Section, a “Serious
Payment Default” shall occur when either:

 

(i)            the portion of the purchase price
described in Section 2.2(b) is owing by FusionStorm 60 or more
days after the date on which such amount became due and payable and 30 or more
days after Intraware gave notice to FusionStorm that such amount is past due
and owing; or

 

(ii)           FusionStorm has failed to pay all of
the retention bonuses required to be paid to the Key Employees under Section 7.2
within one year after the commencement of such Key Employees’ employment with
FusionStorm, and such payment failure has continued for thirty (30) days after
Intraware has notified FusionStorm in writing thereof; or

 

(iii)          Intraware has the right to accelerate
payments under Section 7 of the Services Agreement, Intraware has
exercised that right in accordance with the Services Agreement, and FusionStorm
has not paid all past-due amounts and accelerated amounts

 

9

 

under the Services Agreement within 10 days
after Intraware has given written notice to FusionStorm under the Services
Agreement of such acceleration.

 

In the event a Serious Payment Default occurs, then, notwithstanding
anything to the contrary in this Agreement, (x) FusionStorm shall not solicit,
attempt to solicit, or enter into any arrangement with a third party regarding
solicitation of, any sales or resales of Sun Software to any entity identified
on the Sun Customer List, until the date which is two years after the Closing
Date, (y) FusionStorm shall not solicit, attempt to solicit, or enter into any
arrangement with a third party regarding solicitation of, any sales or resales
of any other software, support or maintenance services to any entity identified
on the Sun Customer List unless such entity was a customer of FusionStorm prior
to the Closing Date; and (z) Intraware’s obligations under Section 7.3
shall immediately terminate.

 

7.5           Publicity. 
Each party agrees that no publicity release or announcement concerning
the transactions contemplated hereby shall be issued without the advance
written approval of the form and substance thereof by the other party (which
approval shall not be unreasonably withheld or delayed); except as such release
or announcement may be required by law or the rules or regulations of any
national securities exchange or automated quotation system, in which case the
party required to make the release or announcement shall allow the other party
reasonable time to comment on such release or announcement in advance of such
issuance.

 

7.6           Further Assurances.  Each party agrees that, upon request by the
other party from time to time, it will do, execute, acknowledge and deliver, or
will cause to be done, executed, acknowledged and delivered, all such further
acknowledgments, deeds, assignments, bills of sale, transfers, conveyances,
instruments, consents and assurances as may reasonably be required to
consummate the transactions contemplated by this Agreement, and for the better
assigning, transferring, granting, conveying, assuring and confirming to
FusionStorm, its successors and assigns, the Purchased Assets to be sold or
assigned to FusionStorm as provided herein.

 

7.7           Payments Received by Seller.  Intraware hereby covenants that it will
promptly deliver to FusionStorm any and all checks received by Intraware after
the Closing that relate to sales by FusionStorm of the Sun Software.

 

7.8           No Employment of Key Employees.  Intraware hereby covenants that it will not,
for a period of two years after the Closing Date, directly or indirectly, in
any form or manner, solicit the employment of any Key Employee without the
written consent of FusionStorm, unless this Agreement is terminated on or
before the Closing Date.  The foregoing
obligation shall not apply to any Key Employee who has not been employed by
FusionStorm during the twelve (12) months prior to any solicitation.

 

10

 

ARTICLE VIII

LICENSE

 

8.1           Upon
Termination of Non-Competition Obligation.  
FusionStorm hereby grants to Intraware a perpetual, irrevocable,
non-exclusive, fully paid-up license, beginning only on the termination (in
accordance with Section 7.3 (Non-Competition) or 7.4
(Payment Under Services Agreement above) of Intraware’s obligations under Section 7.3
(Non-Competition) above, to use the Sun Customer List to sell and resell
software, support and maintenance services, and to solicit such sales and
resales, but only to those customers on the Sun Customer List as in effect at
Closing.  Intraware shall use reasonable
care to maintain the confidentiality of such information, including by limiting
disclosure of such information to Intraware personnel and third parties who are
involved in or who support such sales, resales or solicitations, and by
ensuring that all such Intraware personnel and third parties have signed
written agreements obligating them to maintain the confidentiality of such
information.

 

8.2           Fees
Derived from Exercise of Licenses. 
As between Intraware and FusionStorm, all fees, revenues and other
amounts derived by Intraware from its exercise of the licenses described in Section 8.1
above shall belong to and be retained by Intraware exclusively.

 

ARTICLE IX

SURVIVAL;
INDEMNIFICATION; ARBITRATION

 

9.1           Survival of Representations and Warranties.  All of the representations and warranties set
forth in this Agreement shall survive the Closing and remain in full force and
effect for a period of 26 months thereafter, except that Intraware’s
representations with respect to its agreement(s) with Spectrum will survive for
four years after the termination of such agreements.

 

9.2           Indemnification by Intraware.  Intraware hereby agrees to indemnify and hold
FusionStorm harmless from and against any Damages arising or resulting from any
breach of any representation or warranty or default in the performance by
Intraware of any covenant or agreement of Intraware contained herein, and any
breach of warranty or inaccurate representation made by Intraware herein.

 

9.3           Indemnification by FusionStorm.  FusionStorm hereby agrees to indemnify and
hold Intraware harmless from and against any Damages arising or resulting from
any breach of any representation or warranty or default in the performance by
FusionStorm of any covenant or agreement of Intraware contained herein, and any
breach of warranty or inaccurate representation made by FusionStorm herein.

 

9.4           Claims for Indemnity.

 

(a)           Whenever a claim for Damages shall arise for which
one party (“Indemnitee”) shall be entitled to indemnification hereunder,
Indemnitee shall notify the other party or parties (each, an “Indemnitor”)
in writing within thirty (30) days of the first receipt of notice of such
claim, and in any event within such shorter period as may be

 

11

 

necessary for
Indemnitor to take appropriate action to resist such claim; provided
that the failure to give notice as herein provided shall not relieve Indemnitor
of its obligation to indemnify Indemnitee except to the extent that Indemnitor
shall have been materially prejudiced in its ability to defend such claim.  Such notice shall specify all material facts
known to Indemnitee giving rise to such indemnity rights and shall estimate the
amount of the liability arising therefrom. 
The right of Indemnitee to indemnification and the estimated amount
thereof, as set forth in this notice, shall be deemed agreed to by Indemnitor
unless, within thirty (30) days after the mailing of such notice, Indemnitor
shall notify Indemnitee in writing that it disputes the right of Indemnitee to
indemnification, or that Indemnitor elects to defend such claim in the manner
provided in Section 9.4(b) below.

 

(b)           Defense of Claims.  Upon receipt by Indemnitor of a notice from
Indemnitee with respect to any claim of a third party against Indemnitee, and
acknowledgment by Indemnitor (whether after resolution of a dispute or
otherwise) of Indemnitee’s right to indemnification hereunder with respect to
such claim, Indemnitor shall assume the defense of such claim with counsel
reasonably satisfactory to Indemnitee, with the fees and expenses of such
counsel to be paid by Indemnitor, and Indemnitee shall cooperate to the extent
reasonably requested by Indemnitor in defense or prosecution thereof and shall
furnish such records, information and testimony and attend all such
conferences, discovery proceedings, hearings, trials and appeals as may be
reasonably requested by Indemnitor in connection therewith.  If Indemnitor shall acknowledge Indemnitee’s
right to indemnification and elect to assume the defense of such claim,
Indemnitee shall have the right to employ its own counsel in any such case, but
the reasonable fees and expenses of such counsel shall be at the expense of
Indemnitee.  If Indemnitor has assumed
the defense of any claim against Indemnitee, Indemnitor shall have the right to
settle any claim for which indemnification has been sought and is available
hereunder; provided that, to the extent that such settlement requires
Indemnitee to take, or prohibits Indemnitee from taking, any action or purports
to obligate Indemnitee, then Indemnitor shall not settle such claim without the
prior written consent of Indemnitee.  If
Indemnitor does not assume the defense of a third party claim for which
Indemnitee is entitled to indemnification hereunder and Indemnitor disputes
Indemnitee’s right to indemnification for such claim, Indemnitee shall have the
right to participate in the defense of such claim through counsel of its
choice, at Indemnitor’s expense (such expenses to be paid on a timely,
as-accrued basis), and Indemnitee shall have control over the litigation and
authority to resolve such claim subject to this Article IX.

 

9.5           Limitations
on Liability.

 

(a)           Intraware shall have no obligation to indemnify
FusionStorm for Damages claims made pursuant to Section 9.2 above
until the aggregate amount of Damages incurred by FusionStorm with respect to
such claims exceeds $25,000 except that it will

 

12

 

be zero for
any penalty or fine, at which point Intraware shall be responsible for
indemnifying FusionStorm for all such Damages including the $25,000.

 

(b)           FusionStorm shall have no obligation to indemnify
Intraware for Damages claims made pursuant to Section 9.3 above
until the aggregate amount of Damages incurred by Intraware with respect to
such claims exceeds $25,000 except that it will be zero for any penalty or
fine, at which point FusionStorm shall be responsible for indemnifying
Intraware for all such Damages including the $25,000 (other than with respect
to claims relating to payment of the purchase price of the Purchased Assets or
the payment of Transfer Taxes).

 

(c)           Intraware’s liability to FusionStorm for any claims
made pursuant to Section 9.2 or arising from or related to this
Agreement and the transactions contemplated hereby (whether in contract, tort
or otherwise) shall be limited to $2,500,000.

 

9.6           Effect on Spectrum Alliance Agreement.  If FusionStorm is enjoined by a court from
reselling all or substantially all of the Sun Software to all or substantially
all of the entities identified on the Sun Customer List, based on a claim
related to this Agreement, then FusionStorm’s obligation to make the “Base Fee”
under Section 2.1 of Exhibit A to the Services Agreement will be
suspended immediately, and Intraware will be entitled only to the “Variable Fee”
under Section 2.1 of Exhibit A to the Services Agreement until the injunction
is terminated or dissolved, at which time the Base Fee will resume for future
periods.  During the period in which any
such injunction is in effect, the “Variable Fee” shall mean ****% of the Gross
Profit (as defined in Section 4 of Exhibit A to the Services
Agreement) from Sun Software sales in the applicable month, and the quarterly
limit on such Variable Fee shall be $****, notwithstanding anything to the
contrary in Section 2.1 of Exhibit A of the Services Agreement.

 

9.7           Arbitration. 
Any controversy or claim arising out of or relating to this Agreement or
the Purchased Assets shall be settled by binding arbitration before a single
arbitrator in accordance with the Commercial Arbitration Rules of JAMS
then in effect and the substantive laws of California, and judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction. Any such arbitration shall be conducted in San Francisco,
California.  The arbitrators shall be
selected from a panel of persons having experience with and knowledge of
computers and the computer business. The arbitrators shall have no authority to
make any ruling, finding or award that does not conform to the terms and
conditions of this Agreement. Either party, before or during any arbitration,
may apply to a court having jurisdiction for a temporary restraining order or
preliminary injunction where such relief is

 

****            Indicates that
material has been omitted pursuant to a request for confidential
treatment.  A copy of this document
without omissions has been filed separately with the Securities and Exchange
Commission.

 

13

 

necessary to protect its interests pending completion of the
arbitration proceedings. Arbitration shall not be required for actions for
recovery of specific property, such as actions for replevin. Neither party nor
the arbitrator may disclose the existence or results of any arbitration without
the prior written consent of both parties, except as may be required by law.
Prior to initiation of arbitration or any other form of legal or equitable
proceeding, the aggrieved party shall give the other party written notice
describing the claim and amount as to which it intends to initiate action.

 

ARTICLE X

CONFIDENTIALITY

 

10.1         Confidentiality. At all times after the
Closing Date, Intraware shall keep the information in the Sun Customer List in
confidence, and shall not use such information for its benefit or for the
benefit of others, except as provided in Article VIII (Licenses)
above.

 

ARTICLE XI

GENERAL
PROVISIONS

 

11.1         Notices. 
All notices, requests, demands and other communications hereunder shall
be in writing, shall refer to this Agreement and the provision of this
Agreement that is the subject of the notice and shall be effective when (a) delivered
personally, (b) one day after sent by Federal Express or other private
courier (if a confirmation of delivery is obtained), or (c) five days
after sent by United States certified or registered mail, return receipt
requested and postage prepaid.  All
notices shall be directed to:

 

	
   

  	
  (a)

  	
  in the case of notices to Intraware:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Wendy A. Nieto

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
  Intraware, Inc.

  
	
   

  	
   

  	
   

  	
  25 Orinda Way

  
	
   

  	
   

  	
   

  	
  Orinda, CA 94563

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  with
  a copy to:

  	
  John
  J. Moss

  
	
   

  	
   

  	
   

  	
  Senior
  Vice President and General Counsel

  
	
   

  	
   

  	
   

  	
  Intraware, Inc.

  
	
   

  	
   

  	
   

  	
  25 Orinda Way

  
	
   

  	
   

  	
   

  	
  Orinda, CA 94563

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  in the case of FusionStorm to:

  

 

14

 

	
   

  	
   

  	
   

  	
  Daniel R.
  Serpico

  
	
   

  	
   

  	
   

  	
  Chief
  Financial Officer

  
	
   

  	
   

  	
   

  	
  FusionStorm

  
	
   

  	
   

  	
   

  	
  620 Old West
  Center Street

  
	
   

  	
   

  	
   

  	
  Franklin, MA
  02038

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  	
  George N. Buffington, Esq.

  
	
   

  	
   

  	
   

  	
  Buffington & Aaron, ALC

  
	
   

  	
   

  	
   

  	
  388 Market St.,
  Suite 820

  
	
   

  	
   

  	
   

  	
  San Francisco, CA 94111

  

 

or to such other address or to such other person as FusionStorm or
Intraware shall have last designated by written notice given as herein
provided.

 

11.2         Governing Law. 
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of California (excluding its conflict of
laws provisions).

 

11.3         Jurisdiction and Venue. The parties agree that
any action or arbitration arising under or relating to this Agreement shall be
located in San Francisco, California.  If
either party is compelled to seek judicial enforcement of its rights under this
Agreement, the prevailing party in any such action shall be entitled to recover
its costs incurred in such action, including reasonable attorneys’ fees.

 

11.4         No Third Party Beneficiaries.  Nothing contained in this Agreement shall be
construed to confer upon or give to any person or entity other than the parties
hereto and their successors and assigns any rights or remedies under or by
reason of this Agreement.

 

11.5         Binding Effect; Assignment.  Neither party to this Agreement shall assign
any of its rights or obligations hereunder without the other party’s prior
written consent, which shall not be unreasonably withheld.  Notwithstanding the foregoing, either party
may assign its rights and obligations hereunder pursuant to a merger,
consolidation or sale of substantially all of its assets related to this
Agreement, provided it promptly notifies the non-assigning party in
writing of the assignment and the assignee agrees in writing to be bound by the
terms of this Agreement.  This Agreement
shall be binding upon and inure to the benefit of the parties and their
successors and permitted assigns.

 

11.6         Counterparts; Headings.  This Agreement may be executed simultaneously
in any number of counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.  The paragraph headings in this Agreement are
for convenience of reference only and shall not be deemed to alter or affect
any provision hereof.

 

15

 

11.7         Termination. 
This Agreement may be terminated by FusionStorm (i) in accordance
with Section 7.2, or (ii) on the Closing Date if the closing
conditions in Section 3.2 are not satisfied and Intraware has not
delivered the deliverables it is required to deliver under Section 3.4.  This Agreement may be terminated by Intraware
on the Closing Date if the closing conditions in Section 3.3 are
not satisfied and FusionStorm has not delivered the deliverables it is required
to deliver under Section 3.4.

 

11.8         Transaction Expenses.  Notwithstanding anything else in this
Agreement to the contrary, the parties hereto shall each be responsible for the
payment of (and shall indemnify and hold the other party or parties hereto
harmless against) any and all of its own expenses, including without limitation
the fees and expenses of counsel, accountants and other advisers, arising out
of or relating directly or indirectly to the transactions contemplated by this
Agreement, whether or not such transactions are consummated in whole or in
part.

 

11.9         Waiver; Severability.  The waiver of one breach or default hereunder
shall not constitute the waiver of any other or subsequent breach or
default.  If one or more of the
provisions of this Agreement are deemed void by law, then the remaining
provisions will continue in full force and effect.

 

11.10       No Agency. 
This Agreement shall not constitute either party the legal
representative or agent of the other, nor shall either party have the right or
authority to assume, create, or incur any liability or any obligation of any
kind, express or implied, against or in the name of or on behalf of the other
party.

 

11.11       Entire Agreement; Amendment.  This Agreement (including the Exhibits and
Schedules annexed hereto), the Services Agreement, and the documents or
instruments or other agreements referenced herein or therein contain the entire
agreement between the parties hereto and supersede all prior negotiations,
agreements and understandings, whether written or oral, including but not
limited to the Outline of Proposed Transaction dated as of October 10,
2005, among the parties with respect to the subject matter hereof and thereof,
and there are no agreements, warranties or representations which are not set
forth herein or therein.  This Agreement
may not be modified or amended except by an instrument in writing duly executed
by authorized officers of both parties.

 

IN WITNESS WHEREOF, the undersigned have
executed this Agreement.

 

	
  Intraware, Inc.

  	
  FusionStorm

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ WENDY NIETO

  	
   

  	
  By:

  	
  /s/ JOHN G. VAREL

  	
   

  
	
  Name: Wendy Nieto

  	
  Name: John G. Varel

  
	
  Title: Chief Financial Officer

  	
  Title: President

  
						

 

16

 

	
  By:

  	
  /s/ JOHN J. MOSS

  	
   

  	
  By:

  	
  /s/ JOHN G. VAREL

  	
   

  
	
  Name: John J. Moss

  	
  Name: John G. Varel

  
	
  Title: SVP, General
  Counsel and Secretary

  	
  Title: Secretary

  

 

17

 

Schedule 1.8

 

Sales Services
Employees

 

Director

Account Manager

Account Manager

Account Manager

Account Manager

Account Manager

Account Manager

Systems Engineer

Sales Operations Specialists

 

(All Key Employees are members
of Intraware’s Sales Services Division)

 

18

 

Schedule 2.3

 

Wire Transfer
Instructions

 

19Exhibit 10.2

 

AMENDMENT
ONE

to

ASSET
PURCHASE AGREEMENT

between

INTRAWARE,
INC.

and

FUSIONSTORM

 

This amendment (“Amendment One”) amends the Asset Purchase Agreement
dated October 28, 2005 (the “Agreement”), between Intraware, Inc. (“Intraware”)
and FusionStorm.  All capitalized terms
not defined in this Amendment One shall have the meanings given in the
Agreement.  This Amendment One shall be
effective as of January 2, 2006.

 

	
  1.

  	
  CLOSING DATE

  
	
   

  	
   

  
	
   

  	
  Section 1.1
  (“Closing Date”) is deleted and replaced with:

  
	
   

  	
   

  
	
   

  	
  “Closing Date” shall mean January 3, 2006.

  
	
   

  	
   

  
	
  2.

  	
  PURCHASE PRICE

  
	
   

  	
   

  
	
   

  	
  In
  Section 2.2(a) (Purchase Price), “$400,000” is deleted and replaced
  with “$250,000”.

  
	
   

  	
   

  
	
  Subject to
  the above modifications, the Agreement shall remain in full force and effect.

  
	
   

  
	
  INTRAWARE, INC.

  	
  FUSIONSTORM

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  By:

  	
  /s/ John J. Moss

  	
   

  	
  By:

  	
  /s/ Daniel Serpico

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  Name:

  	
  John J. Moss

  	
  Name:

  	
  Daniel Serpico

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  Title:

  	
  Senior Vice President, General

  	
  Title:

  	
  Chief Financial Officer

  	
   

  	 

	
   

  	
  Counsel and Secretary

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