Document:

<PAGE>   1
                           LOAN MODIFICATION AGREEMENT

         This Loan Modification Agreement is entered into as of December 31,
2000 by and between Crossroads Systems, Inc. (the "Borrower") and Silicon Valley
Bank ("Bank").

DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among other
documents, an Amended and Restated Loan and Security Agreement, dated August 17,
1999, as may be amended from time to time (the "Loan Agreement"). The Loan
Agreement provided for, among other things, a Committed Revolving Line in the
original principal amount of Two Million Five Hundred Thousand Dollars
($2,500,000). Defined terms used but not otherwise defined herein shall have the
same meanings as in the Loan Agreement.

Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Indebtedness."

2.       DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness
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 Indebtedness shall be
referred to as the "Security Documents". Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents".

3.       DESCRIPTION OF CHANGE IN TERMS.

         A. Modification(s) to Loan Agreement.

         1.       Section 6.2 entitled "Financial Statements, Reports,
                  Certificates" is hereby amended to read as follows:

                  (a) Borrower will deliver to Bank: (i) as soon as available,
                  but no later than 30 days after the last day of each month, a
                  company prepared consolidated balance sheet and income
                  statement covering Borrower's consolidated operations during
                  the period, in a form acceptable to Bank and certified by a
                  Responsible Officer; (ii) as soon as available, but no later
                  than 90 days after the end of Borrower's fiscal year, audited
                  consolidated financial statements prepared under GAAP,
                  consistently applied, together with an unqualified opinion on
                  the financial statements from an independent certified public
                  accounting firm acceptable to Bank; (iii) within 5 days of
                  filing, copies of all statements, reports and notices made
                  available to Borrower's security holders or to any holders of
                  Subordinated Debt and all reports on Form 10-K, 10-Q and 8-K
                  filed with the Securities and Exchange Commission; (iv) a
                  prompt report of any legal actions pending or threatened
                  against Borrower or any Subsidiary that could result in
                  damages or costs to Borrower or any Subsidiary of $100,000 or
                  more; and (v) budgets, sales projections, operating plans or
                  other financial information Bank requests.

                  (b) Within 30 days after the last day of each month, Borrower
                  will deliver to Bank a Borrowing Base Certificate signed by a
                  Responsible Officer with aged listings of accounts receivable
                  and accounts payable.

                  (c) Within 30 days after the last day of each month, Borrower
                  will deliver to Bank with the monthly financial statements a
                  Compliance Certificate signed by a Responsible Officer.

                  (d) Bank has the right to audit Borrower's Accounts at
                  Borrower's expense, but the audits will be conducted prior to
                  the initial Advance and no more often than

<PAGE>   2

                  once every 6 months thereafter unless an Event of Default has
                  occurred and is continuing.

         2.       Section 6.7 entitled "Financial Covenants" is hereby amended
                  to read as follows:

                  Borrower will maintain as of the last day of each month:

                  (i)      Quick Ratio. A ratio of Quick Assets to Current
                           Liabilities of at least 1.50 to 1.00.

                  (ii)     Borrower may incur a quarterly loss, provided such
                           loss (as measured by earnings before interest, taxes,
                           depreciation and amortization) is not greater than
                           $11,700,000 for the fiscal quarter ending January 31,
                           2001, $11,800,000 for the fiscal quarter ending April
                           30, 2001, $11,400,000 for the fiscal quarter ending
                           July 31, 2001 and $10,400,000 for the fiscal quarter
                           ending October 31, 2001.

         3.       The following terms as defined in Section 13.1 entitled
                  "Definitions" are hereby amended to read as follows:

                  "Borrowing Base" is 80% of Eligible Accounts, as determined by
                  Bank from Borrower's most recent Borrowing Base Certificate.

                  "Committed Revolving Line" is an Advance of up to $3,000,000.

                  "Eligible Accounts" (item "d" only) Accounts for an account
                  debtor, including Affiliates, whose total obligations to
                  Borrower exceed 25% of all Accounts, for the amounts that
                  exceed that percentage, unless Bank approves in writing;

                 "Revolving Maturity Date" is February 1, 2002.

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
the obligations to pay any amounts under the Indebtedness.

6.       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 Indebtedness pursuant to this Loan Modification Agreement in no
way shall obligate Bank to make any future modifications to the Indebtedness.
Nothing in this Loan Modification Agreement shall constitute a satisfaction of
the Indebtedness. 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. 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.

7.       CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon the occurrence of either of the following events no later than
February 2, 2001: (i) Borrower to pay a loan fee to Bank (the "Loan Fee") or
(ii) Borrower to deposit a minimum amount of cash into a demand deposit account
with Bank (the "Minimum Deposit"). The amounts of the Loan Fee and the Minimum
Deposit shall be negotiated in good faith between Bank and Borrower

                                       2
<PAGE>   3

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

<TABLE>
<S>                                            <C>
BORROWER:                                      BANK:

CROSSROADS SYSTEMS, INC.                       SILICON VALLEY BANK

By: /s/ Larry Sanders                          By:
    ----------------------------------------        ----------------------------
Name: Larry Sanders                            Name:
      --------------------------------------         ---------------------------
Title: President and Chief Operating Officer   Title:
      --------------------------------------          --------------------------
</TABLE>

                                       3
<PAGE>   4

[SILICON VALLEY BANK LOGO]

                               SILICON VALLEY BANK

                       PRO FORMA INVOICE FOR LOAN CHARGES

BORROWER:                  CROSSROADS SYSTEMS, INC.

LOAN OFFICER:              MIKE DRAEKEN

DATE:                      DECEMBER 31, 2000

                           LOAN FEE              $
                                                 ---------
                           DOCUMENTATION FEE        250.00

                           TOTAL FEE DUE         $     .00
                                                 =========

PLEASE INDICATE THE METHOD OF PAYMENT:

         { }   A CHECK FOR THE TOTAL AMOUNT IS ATTACHED.

         { }   DEBIT DDA #                    FOR THE TOTAL AMOUNT.
                           ------------------

         { }   LOAN PROCEEDS

----------------------------------------------
BORROWER                                (DATE)

----------------------------------------------
SILICON VALLEY BANK                     (DATE)
ACCOUNT OFFICER'S SIGNATURE

<PAGE>   5

                             COMPLIANCE CERTIFICATE

TO:   SILICON VALLEY BANK

FROM: CROSSROADS SYSTEMS, INC.

The undersigned authorized officer of CROSSROADS SYSTEMS, INC. ("Borrower")
certifies that under the terms and conditions of the Amended and Restated Loan
and Security Agreement between Borrower and Bank (the "Agreement"), (i) Borrower
is in complete compliance for the period ending _______________ with all
required covenants except as noted below and (ii) all representations and
warranties in the Agreement are true and correct in all material respects on
this date. Attached are the required documents supporting the certification. The
Responsible Officer certifies that these are prepared in accordance with
Generally Accepted Accounting Principles (GAAP) consistently applied from one
period to the next except as explained in an accompanying letter or footnotes.
The Responsible Officer acknowledges that no borrowings may be requested at any
time or date of determination that Borrower is not in compliance with any of the
terms of the Agreement, and that compliance is determined not just at the date
this certificate is delivered.

 PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES" COLUMN.

<TABLE>
<CAPTION>
REPORTING COVENANT                      REQUIRED                      COMPLIES
------------------                      --------                      --------
<S>                                     <C>                           <C>
CPA audited Financial Statements + CC   Annually within 90 days       YES / NO
Interim Financial Statements + CC       Monthly within 30 days        YES / NO
Annual 10K Report                       Within 5 days of SEC filing   YES / NO
A/R and A/P Aging, Borrowing
Base Certificate                        Monthly within 30 days        YES / NO
</TABLE>

<TABLE>
<CAPTION>
FINANCIAL COVENANT         REQUIRED          ACTUAL                   COMPLIES
------------------         --------          ------                   --------

TO BE TESTED ON A MONTHLY BASIS, UNLESS OTHERWISE NOTED:

<S>                        <C>               <C>                      <C>
Quick Ratio                1.50 : 1.00       ____ : 1.00              YES / NO
Maximum Loss (quarterly)   *                 $___________________     YES / NO
</TABLE>

*Not greater than $11,700,000 for the fiscal quarter ending January 31, 2001,
$11,800,000 for the fiscal quarter ending April 30, 2001, $11,400,000 for the
fiscal quarter ending July 31, 2001 and $10,400,000 for the fiscal quarter
ending October 31, 2001.

COMMENTS REGARDING FINANCIAL COVENANTS:

                                         =================================
                                                             BANK USE ONLY
                                         RECEIVED BY: ____________________
                                         DATE: ________________
                                         REVIEWED BY: ____________________
                                         COMPLIANCE STATUS:  YES / NO
                                         =================================

Very truly yours,
CROSSROADS SYSTEMS, INC.

BY:  /s/ LARRY SANDERS
     --------------------------------------------
NAME: LARRY SANDERS
                   ------------------------------

TITLE:  PRESIDENT AND CHIEF OPERATING OFFICER
                                              ---

                                       2
<PAGE>   6

                           BORROWING BASE CERTIFICATE
                               COLLATERAL SCHEDULE

<TABLE>
<S>                                       <C>               <C>                 <C>
Borrower: Crossroads Systems, Inc.        Lender:           Silicon Valley Bank

Commitment Amount:         $3,000,000

ACCOUNTS RECEIVABLE
1.                Accounts Receivable Book Value as of                          $
                                                       ------                   ----------
2.                Additions (please explain on reverse)                         $
                                                                                ----------
3.                TOTAL ACCOUNTS RECEIVABLE                                     $
                                                                                ----------

ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
                  a.       Amounts over 90 days due              $
                                                                 ----------
                  b.       Balance of 50% over 90 day accounts   $
                                                                 ----------
                  c.       Excess 25% Concentration Limit        $
                                                                 ----------
                  d.       Foreign Accounts                      $
                                                                 ----------
                  e.       Governmental Accounts                 $
                                                                 ----------
                  f.       Contra Accounts                       $
                                                                 ----------
                  g.       Promotion or Demo Accounts            $
                                                                 ----------
                  h.       Intercompany/Employee Accounts        $
                                                                 ----------
                  i.       Other (please explain on reverse)     $
                                                                 ----------
         4.                TOTAL ACCOUNTS RECEIVABLE DEDUCTION                  $
                                                                                ----------
         5.                Eligible Accounts (#3 minus #4)                      $
                                                                                ----------
         6.    LOAN VALUE OF ACCOUNTS (80% of #5 )                              $
                                                                                ----------

BALANCES
         7.       Maximum Loan Amount (minus Cash Management Sublimit)          $
                                                                                ----------
         8.       Total Funds Available Lesser of #6 or #7                      $
                                                                                ----------
         9.       Present balance owing on Line of Credit                       $
                                                                                ----------
        10.       Outstanding under Sublimits (Letters of Credit)               $
                                                                                ----------
RESERVE POSITION (#8  minus #9 and #10)                                         $
                                                                                ----------
</TABLE>

The undersigned represents and warrants that the foregoing is true, complete and
correct, and that the information reflected in this Borrowing Base Certificate
complies with the representations and warranties set forth in the Loan and
Security Agreement between the undersigned and Silicon Valley Bank.

COMMENTS:                                                   BANK USE ONLY
                                                            -------------
CROSSROADS SYSTEMS, INC.
                                                       Rec'd By:
                                                                 ------------
By: /s/ Larry Sanders                                            Auth. Signer
    -------------------------------                    Date:
      Authorized Signer                                     -----------------

                                                       Verified:
                                                                 ------------
                                                                 Auth. Signer

                                                       Date:
                                                            -----------------

                                                            -----------------

                                       3SETTLEMENT AGREEMENT AND RELEASE

                  This  SETTLEMENT AND RELEASE (the  "Agrcement) is entered into
         as of May 1, 1999,  by and between  Optima  Investments,  Inc., a Texas
         corporation  ("Optima'),  its  agents,  predecessors,   successors  and
         assigns, and any affiliates thereof (collectively referred to herein as
         "Optima') and Cyntech  Technologies,  Inc., a Utah corporation formerly
         known  as  Carbon  Fiber  Products,  Inc.,  its  agents,  predecessors,
         successors and assigns; and any affiliates thereof (including,  but not
         limited to any  corporation  or  business  entity  containing  the name
         "Cyntech or any variation in spelling thereof)  (collectively  referred
         to herein as "CYNT")

         RECITALS.

                  WHEREAS, CYNT engaged Optima to assist CYNT in structuring and
         completing  a  transaction  under  agreements,  including  that certain
         agreement dated October 30, 1998 and a subsequent addendum; and,

                  WHEREAS,  as compensation for the services provided by Optima,
         CYNT agreed to cause CYNT to issue shares of CYNT Common Stock,  $0.001
         par value ("CYNT" Common Stock to Optima; and,

                  WHEREAS,  subsequent  disputes  have arisen  among the parties
         hereto as to the value of the services provided by Optima; and,

                  WHEREAS, the parties hereto have reached certain agreements to
         resolve the disputes among them, with respect to the foregoing matters.

                  NOW  THEREFORE,   for  and  in  consideration  of  the  mutual
         covenants and promises set forth herein and for other good and valuable
         consideration,   the  receipt  and   sufficiency  of  which  is  hereby
         acknowledged, it is hereby agreed as follows:

                  1. Payment for  Services.  Optima  acknowledges  and agrees to
         accept and retain  300,000  shares of CYNT  Common  Stock (the  "Optima
         Shares") in full  satisfaction  of all  services  provided by Optima to
         CYNT.  Optima agrees that Optima has  previously  received and paid par
         value for  500,000  shares of CYNT  Common  Stock,  and Optima  further
         agrees  to  transfer  200,000  of said  500,000  shares to CYNT (or the
         market value thereof), pursuant to CYNT instructions.  Thus Optima will
         be left with 300,000 shares as payment as set forth herein.

                  2. Termination of Prior  Agreements and Issuances.  Optima and
         CYNT hereby agree and acknowledge  that any and all prior agreements by
         and between Optima and CYNT shall terminate in all respects,  including
         any and all  performance  and payment  obligations  or  obligations  to
         transfer or privately place of CYNT Common Stock.  Optima hereby agrees
         that any and all other agreements for the issuance of CYNT Common Stock
         to Optima are canceled and shall be of no force and effect.

<PAGE>

         3. Settlement

                  a.  Optima  agrees  to  accept  and  retain   300,000   shares
         previously transferred to Optima via certificate number 3734, issued on
         or about January 28, 1999 in the amount of 500,000 shares, and replaced
         by certificate  number 3775 in the amount of 500,000 shares  registered
         to CEDE and company issued on February 18, 1999

                  b.  Optima  agrees to return  1,400,000  shares of  restricted
         stock issued to Optima via certificate  number 3735, issued on or about
         January 28, 1999, to CYNT.

                  c. Optima agrees to cancellation of agreements pursuant to the
         3,500,000  shares to be received by Optima and related  directly to the
         facilitation of private placement investors on behalf of CYNT.

                  d.  Optima  agrees to notify  any and all  transferees  of any
         portion  of the  300,000  shares  and that the  shares  are  subject to
         registration   in  the  future.   Optima  further  agrees  that  it  is
         responsible to register such sham at its expense. Optima further agrees
         to  assist  with  the  notification  to the  entity  referred  as "ONI"
         regarding the following stock certificates received by 'ONI' from CYNT.
         Certificate  3803 for  50,000  shares of CYNT  issued  March 22,  1999,
         certificate  number  3804 for 30,000  shares of CYNT  issued  March 22,
         1999, and certificate number 3826 for 95,000
          shares of CYNTissued March 29,1999.

                  e. CYNT agrees,  upon  execution of agreement to send a letter
         to DTC, CEDE, Merrill Lynch,  and/or any other agency which is a direct
         party to the clearing  and/or trading of the  certificates  in order to
         advise these parties that any and all disputes  between Optima and CYNT
         have been resolved.

         4.  Relationship To Company Optima  acknowledges and agrees that Optima
   shall  have  no  authority  to  represent  CYNT  or  hold  itself  out  as  a
   representative  of CYNT,  including in  connection  with any offering of CYNT
   Common  Stock.   Optima  shall  not  acknowledge  or  disclose  any  business
   relationship with CYNT, except as may be required by law.

         5. CYNT  Non-circumvention.  CYNT agrees  that it shall not,  under any
   circumstances,  contact,  negotiate,  discuss,  or enter into or perform  any
   existing or contemplated agreements with any parties, individuals or entities
   introduced  to CYNT  by or  through  Optima,  or any  Optima  representative:
   provided  however  that said  non-circumvention  shall not apply to "ONI" Ron
   Sparkman.

         6.Representations and Warranties.

         a. Optima  represents  and  warrants  as  follows;  (i) it has the full
         right, power and authority to execute and deliver this Agreement and to
         consummate the transactions  contemplated  hereby without obtaining any
         further  consents or approvals from, or the taking of any other actions
         with respect to, an third parties. (ii) this Agreement,

                                        2

<PAGE>

         when executed and delivered by the parties hereto,  will constitute the
         valid and binding agreement of it, enforceable against it in accordance
         with its terms.

         b. CYNT represents and warrants as follows:  (i) it has the full right,
         power and  authority  to execute  and  deliver  this  Agreement  and to
         consummate the transactions  contemplated  hereby without obtaining any
         further  consents or approvals from, or the taking of any other actions
         with respect to, any third parties. (ii) this Agreement,  when executed
         and  delivered by the parties  hereto,  will  constitute  the valid and
         binding agreement of it, enforceable  against it in accordance with its
         terms.

     7. Mutual Release.  In consideration of the  representations and warranties
     of Optima and CYNT  contained  herein,  Optima and CYNT hereby  jointly and
     mutually  release,  acquit,  and forever  discharge  each other,  and their
     respective  officers,   directors,   shareholders,   partners,   employees,
     servants, agents, representatives,  attorneys,  accountants,  subsidiaries,
     predecessors,  successors,  trusts, corporations,  or other entities in any
     manner affiliated or connected therewith, from any and all claims, demands,
     damages, causes or action or suits of any kind or nature, known or unknown,
     that they jointly or severally, may have had at time or have as of the date
     hereof or which might subsequently  accrue,  arise for or out of , or be in
     any manner  connected  with,  directly or  indirectly  any and all services
     provided  by Optima to CYNT,  and any  related  event,  occurrence,  act of
     omission or condition occurring or existing on or prior to the date hereof,
     excluding the provisions of 8 below.

     8. Indemnification.

                a: Mutual  Indemnification  CYNT and Optima  agree to  indemnify
                each  other  and  their  affiliates  from any  actions,  claims,
                demands,  damages,  causes  of  actions  or suits of any kind or
                nature,  known or unknown,  which arises,  or might arise out of
                this agreement or any other prior agreement between the parties,
                except as provided in this section.

                 b. Indemnification by Optima Optima further agrees to indemnify
                 CYNT and its  affiliates  from  any  action,  claims,  demands,
                 damages,  causes of actions,  or suits of any nature,  known or
                 unknown,  which  arises or might  arise out of the  transfer of
                 common stock of CYNT to third  parties by Optima,  specifically
                 including,  but not limited to the third  parties  which an the
                 subject of paragraph  3(d) hereof  Furthermore,  Optima  hereby
                 indemnifies  and holds  harmless CYNT from any action,  claims,
                 demands, damages, causes, or suits of any kind or nature, known
                 or unknown  brought by or  asserted  by Ahmad  Alyasin  (or his
                 associates,  affiliates,  successors or assigns) which arise or
                 might arise regarding any agreements between Optima and CYNT.

     9. Authority of Optima Optima represents and warrants that it has authority
     to execute this  agreement,  and to consent to the termination of all prior
     agreements by and between Optima and CYNT, and the  cancellation of any and
     all prior  agreements  for the  issuance of CYNT Common  Stock to Optima as
     provided in section 2 of this agreement.

                                        3

<PAGE>

                   10.  Authority of CTNY.  CYNT represents and warrants that it
         has the  authority  to execute  this  Agreement,  and to consent to the
         terminations  of all prior  agreements by and between  Optima and CYNT,
         and the  cancellation of any and all prior  agreements for the issuance
         of CYNT  Common  Stock to  Optima  as  provided  in  Section  2 of this
         Agreement

                   11. Confidentialily, The parties to this Agreement agree that
          the terms of this Agreement shall remain confidential and shall not be
          disclosed to any person who is not an
         officer or director of any of the parties to this Agreement,  except as
         may be  required  by  applicable  law,  subpoena,  or order  of  court,
         provided,  however,  if  any  governmental  entity  or  court  requests
         disclosure,  the party of whom disclosure is requested shall notify the
         other party in writing within a reasonable time to allow the contesting
         party an opportunity to oppose such disclosure.

                   12. Miscellaneous,

                      1. This Agreement  shall be governed by,  construed  under
                      and enforced in  accordance  with the laws of the State of
                      Texas.

                      2.  This  Agreement  contains  the  entire  agreement  and
                       understanding  among the parties  relating to the subject
                       matter of this Agreement and supersedes any
                      negotiations  and  agreements  between the parties  hereto
                      concerning  the same subject  matter,  except as expressly
                      provided or allowed under the terms of this Agreement.

                      3. The  execution  and delivery of this  Agreement and all
                      transactions  contemplated hereby, including the, transfer
                      for the Optima  Shares as provided  above,  have been duly
                      authorized  by all  requisite  action  on the  part of the
                      parties.

                      4.  This   Agreement  may  be  executed  in  one  or  more
                      counterparts,  each of which shall be an original, but all
                      of  which  together  shall  constitute  one and  the  same
                      instrument.

         IN WITNESS  WHEREOF,  the parties  hereto have executed this  Agreement
effective as of the date first above written.

                                                        OPTIMA INVESTMENTS, INC.

                                                       By: __/s/________________
                                                          Robert Pennington, CEO

                                                       CYNTECH TECHNOLOGIES, INC

                                                        By: __/s/_______________
                                                       R. Frank Meyer, President

                                        4

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