-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nxxj27c1EjfkFSryuwO89wmq+W2uInyKc948D/gq+49eQ4CBZYAb7Z7IF2OWQmCf vVhZuEZ3ATnW5agNghcD3A== 0000912057-01-001618.txt : 20010123 0000912057-01-001618.hdr.sgml : 20010123 ACCESSION NUMBER: 0000912057-01-001618 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010112 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTRAWARE INC CENTRAL INDEX KEY: 0001025134 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 680389976 STATE OF INCORPORATION: DE FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-25249 FILM NUMBER: 1509699 BUSINESS ADDRESS: STREET 1: 25 ORINDA WAY CITY: ORINDA STATE: CA ZIP: 94563 BUSINESS PHONE: 9254468729 MAIL ADDRESS: STREET 1: 25 ORINDA WAY CITY: ORINDA STATE: CA ZIP: 94563 8-K 1 a2035290z8-k.txt 8-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 JANUARY 12, 2001 Date of Report (date of earliest event reported) INTRAWARE, INC. - -------------------------------------------------------------------------------- (Exact name of Registrant as specified in charter) DELAWARE 000-25249 68-0389976 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission File Number) (I. R. S. Employer of incorporation) Identification No. ) 25 ORINDA WAY ORINDA, CALIFORNIA 94563 (Address of principal executive offices) Registrant's telephone number, including area code: (925) 253-4500 N/A - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) ================================================================================ Item 5. OTHER EVENTS On January 12, 2001, Intraware, Inc., a Delaware corporation, issued a press release announcing that it redeemed all of its outstanding Series A, B and C Preferred Stock issued on June 29, 2000 pursuant to three separate agreements. As of January 10, 2001, there was $9.16 million principal amount of the Series A, B and C Preferred Stock outstanding. The Series A, B and C Preferred Stock carried a 9% dividend and had a term of two years from the date of issuance. In exchange for the surrender of all shares of Series A, B and C Preferred Stock, the company paid to the holders an aggregate of $7.5 million in cash, issued 750,000 shares of Intraware common stock and adjusted the exercise price of the warrants issued in connection with Series A, B and C Preferred Stock to $2.03125 per share, the closing bid price for the Intraware common stock reported on Nasdaq on January 11, 2001. Intraware has agreed to file a registration statement with the SEC by January 17, 2001 to register the resale of the shares of Intraware common stock issued as part of the redemption and the shares of Intraware common stock issued upon exercise of the warrants. Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) Financial Statements. Not applicable. (b) Pro Forma Financial Information. Not applicable. (c) Exhibits. 99.1 Form of Redemption and Amendment Agreement. 99.2 Form of Registration Rights Agreement. -2- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: January 16, 2001 INTRAWARE, INC. /S/ JOHN J. MOSS ----------------------------- John J. Moss General Counsel and Secretary -3- EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT TITLE 99. 1 Form of Redemption and Amendment Agreement. 99.2 Form of Registration Rights Agreement.
-2- EX-99.1 2 a2035290zex-99_1.txt EX-99.1 EXHIBIT 99.1 REDEMPTION AND AMENDMENT AGREEMENT REDEMPTION AND AMENDMENT AGREEMENT (the "AGREEMENT"), dated as of January 10, 2001, by and among Intraware, Inc., a Delaware corporation, with headquarters located at 25 Orinda Way, Orinda, California 94563 (the "COMPANY"), and the investors listed on the Schedule of Investors attached hereto (individually, an "INVESTOR" and collectively, the "INVESTORS"). WHEREAS: A. The Company, the Investors and certain other entities (the "OTHER INVESTORS") have entered into that certain Securities Purchase Agreement, dated as of June 29, 2000 (the "SECURITIES PURCHASE AGREEMENT"), pursuant to which the Investors and the Other Investors purchased from the Company (I) shares of the Company's Series A Convertible Preferred Stock (the "SERIES A PREFERRED STOCK"), which are convertible into shares of the Company's common stock, par value $0.0001 per share (the "COMMON STOCK") (as converted, the "SERIES A CONVERSION SHARES"), in accordance with the terms of the Company's Certificate of Designations, Preferences and Rights of the Series A Preferred Stock filed with the Secretary of State of the State of Delaware on June 30, 2000 (the "SERIES A CERTIFICATE OF DESIGNATIONS"), (II) shares of the Company's Series B Convertible Preferred Stock (the "SERIES B PREFERRED STOCK"), which are convertible into shares of Common Stock (as converted, the "SERIES B CONVERSION Shares"), in accordance with the terms of the Company's Certificate of Designations, Preferences and Rights of the Series B Preferred Stock filed with the Secretary of State of the State of Delaware on June 30, 2000 (the "SERIES B CERTIFICATE OF DESIGNATIONS"), (III) shares of the Company's Series C Convertible Preferred Stock (the "SERIES C PREFERRED STOCK" and, collectively with the Series A Preferred Stock and the Series B Preferred Stock, the "PREFERRED STOCK"), which are convertible into shares of Common Stock (as converted, the "SERIES C CONVERSION SHARES" and, collectively with the Series A Conversion Shares and the Series B Conversion Shares, the "CONVERSION SHARES"), in accordance with the terms of the Company's Certificate of Designations, Preferences and Rights of the Series C Preferred Stock filed with the Secretary of State of the State of Delaware on June 30, 2000 (the "SERIES C CERTIFICATE OF DESIGNATIONS" and, collectively with the Series A Certificate of Designations and the Series B Certificate of Designations, the "CERTIFICATE OF DESIGNATIONS"), and (IV) warrants to purchase shares of Common Stock (the "WARRANTS" and, as exercised the "WARRANT SHARES"); B. Each Investor is the holder of that number of shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, respectively, (each a "PREFERRED SHARE" and, collectively, the "PREFERRED SHARES") and a Warrant (each, an "INVESTOR WARRANT") to purchase that number of Warrant Shares set forth opposite its name on the Schedule of Investors; C. The Company wishes to redeem the Preferred Shares held by the Investors and each of the Investors wishes to allow the Company to redeem, upon the terms and conditions set forth in this Agreement, such Investor's Preferred Shares for an aggregate of $3,758,188.20 in cash and the issuance of 375,819 shares of Common Stock, as adjusted for any stock splits, stock dividends, stock combinations or other similar transaction (the "COMMON SHARES"), in exchange for the Preferred Shares (pro rata based on the number of Preferred Shares held by each such Investor relative to 459 Preferred Shares); D. The Company and the Investors wish to amend the terms of the Investor Warrants to decrease the Warrant Exercise Price (as defined in the Warrants); E. The exchange of a portion of the Preferred Shares for the Common Shares as part of the redemption of all the Preferred Shares is being made in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the "1933 ACT"); and F. At the Closing (as defined below) the parties will execute and deliver a Registration Rights Agreement substantially in the form attached hereto as EXHIBIT A (the "REGISTRATION RIGHTS AGREEMENT") pursuant to which the Company shall agree to provide certain registration rights under the 1933 act and the rules and regulations promulgated thereunder, and applicable state securities laws; NOW THEREFORE, the Company and the Investor hereby agree as follows: 1. REDEMPTION AND EXCHANGE OF PREFERRED SHARES; AMENDMENT OF WARRANTS. (a) REDEMPTION AND EXCHANGE OF PREFERRED SHARES. Subject to satisfaction (or waiver) of the conditions set forth in Sections 5 and 6, the Company shall redeem from each Investor and each Investor shall allow the Company to redeem from it on the Closing Date (as defined below) all of such Investor's Preferred Shares set forth opposite such Investor's name on the Schedule of Investors (which number of Preferred Shares in the aggregate equals 417 Preferred Shares) (the "CLOSING"). The redemption price (the "REDEMPTION PRICE") to be paid by the Company for each Preferred Share being redeemed at the Closing shall consist of (i) the payment by the Company of $8,187.77 in cash (the "CASH COMPONENT") and (ii) the issuance by the Company of 818.77 Common Shares in exchange for the portion of such Preferred Share not redeemed by the Cash Component (such that the aggregate Cash Component for all Preferred Shares is $3,758,188.20 and the aggregate number of Common Shares issued is 375,819, each in the respective amounts set forth opposite each Investor's name on the Schedule of Investor's. (b) CLOSING DATE. The date and time of the Closing (the "CLOSING DATE") shall be 10:00 a.m. Central Time, on January 12, 2001, subject to notification of satisfaction (or waiver) of the conditions to the Closing set forth in Sections 5 and 6 below (or such later date as is mutually agreed to by the Company and each Investor, but in no event later than January 16, 2001). The Closing shall occur on the Closing Date at the offices of Katten Muchin Zavis, 525 West Monroe Street, Suite 1600, Chicago, Illinois 60661-3693. (c) FORM OF PAYMENT. On the Closing Date, (i) the Company (A) shall pay to each Investor the Cash Component of the aggregate Redemption Price for the Preferred Shares held by such Investor which the Company is redeeming at the Closing, by wire transfer of immediately available funds in accordance with such Investor's written wire instructions, and (B) shall issue and deliver to each Investor the Common Shares being issued, as part of the 2 Redemption Price, in exchange for the portion of each of such Investor's Preferred Shares not redeemed by the Cash Component, and (ii) each Investor shall deliver to the Company stock certificates (the "PREFERRED STOCK CERTIFICATES") representing such number of the Preferred Shares of the respective series of the Preferred Shares held by such Investor (as indicated opposite such Investor's name on the Schedule of Investors). (d) AMENDMENT OF WARRANTS. Effective as of the date of this Agreement, each Investor Warrant is amended by deleting Section 1(b)(xx) of each such Investor Warrant and replacing Section 1(b)(xx) in its entirety with the following: "(xx) "WARRANT EXERCISE PRICE," with respect to any Warrant Share, shall be equal to the Closing Bid Price of the Common Stock on the trading day immediately preceding the earlier of (A) the Closing Date (as defined in the Redemption and Amendment Agreement, dated as of January 10, 2001, by and among the Company and the investors named therein, including the initial holder of this Warrant), and (B) January 16, 2001." 2. INVESTOR'S REPRESENTATIONS AND WARRANTIES. Each Investor represents and warrants with respect to only itself that: (a) VALIDITY; ENFORCEMENT. This Agreement has been duly and validly authorized, executed and delivered on behalf of such Investor and is a valid and binding agreement of such Investor enforceable against such Investor in accordance with its terms, subject as to enforceability to general principles of equity and to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies. (b) TRANSFER OR RESALE. Such Investor understands that except as provided in the Registration Rights Agreement: (i) the Common Shares have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Investor shall have delivered to the Company an opinion of counsel reasonably acceptable to the Company, in a reasonably acceptable form, to the effect that such Common Shares to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such Investor provides the Company with reasonable assurance that such Common Shares can be sold, assigned or transferred pursuant to Rule 144 promulgated under the 1933 Act, as amended, (or a successor rule thereto) ("RULE 144"); (ii) any sale of the Common Shares made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Common Shares under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the Securities and Exchange Commission (the "SEC") thereunder; and (iii) neither the Company nor any other person is under any obligation to register 3 the Common Shares for resale under the 1933 Act or any state securities laws or to comply with the terms and conditions of any resale exemption thereunder. (c) LEGENDS. Such Investor understands that, until such time as the sale of the Common Shares have been registered under the 1933 Act as contemplated by the Registration Rights Agreement, the stock certificates representing the Common Shares, except as set forth below, shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates): THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY, IN A REASONABLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the Common Shares upon which it is stamped, if, unless otherwise required by state securities laws, (i) such Common Shares are registered for sale under the 1933 Act, (ii) in connection with a sale, assignment or other transfer, such holder provides the Company with an opinion of counsel reasonably acceptable to the Company, in a reasonably acceptable form, to the effect that such sale, assignment or transfer of the Common Shares may be made without registration under the 1933 Act, or (iii) such holder provides the Company with reasonable assurance that the Common Shares can be sold, assigned or transferred pursuant to Rule 144. Each Investor acknowledges, covenants and agrees to sell the Common Shares represented by a certificate(s) from which the legend has been removed, only pursuant to (i) a registration statement effective under the 1933 Act, or (ii) advice of counsel that such sale is exempt from the registration requirements of Section 5 of the 1933 Act. (d) FREE OF LIENS. Assuming that pursuant to the Securities Purchase Agreement the Company issued such Investor the Preferred Shares held by such Investor free and clear of any taxes, security interest, liens, encumbrances, claims and demands of any kind whatsoever, at the time of the Closing such Investor shall hold the Preferred Shares to be redeemed by the Company from such Investor at such Closing, and shall transfer such Preferred Shares to the Company, free and clear of any restrictions on transfer, taxes, security interest, liens, encumbrances and demands of any kind whatsoever. 4 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to each of the Investors that: (a) ORGANIZATION AND QUALIFICATION. The Company is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware, and has the requisite corporate power and authorization to own its properties and to carry on its business as now being conducted. The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. As used in this Agreement, "MATERIAL ADVERSE EFFECT" means any material adverse effect on the business, properties, assets, operations, results of operations or financial condition of the Company and its subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements and instruments to be entered into in connection herewith, or on the authority or ability of the Company to perform its obligations under the Transaction Documents (as defined below). (b) AUTHORIZATION; ENFORCEMENT; VALIDITY. The Company has the requisite corporate power and authority to enter into and perform this Agreement, the Registration Rights Agreement and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the "TRANSACTION DOCUMENTS") and to issue the Common Shares in accordance with the terms of this Agreement. The execution and delivery of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, including without limitation the redemption of the Preferred Shares (including the reservation for issuance and the issuance of the Common Shares), have been duly authorized by the Company's Board of Directors by unanimous written consent and no further consent or authorization is required by the Company, its Board of Directors or its stockholders. This Agreement and the other Transaction Documents of even date herewith have been duly executed and delivered by the Company, and constitute the valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors' rights and remedies. As of the Closing, the Transaction Documents dated after the date hereof shall have been duly executed and delivered by the Company, and shall constitute the valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors' rights and remedies. (c) ISSUANCE OF SECURITIES. 750,000 shares of Common Stock have been duly authorized and reserved for issuance of the Common Shares. Upon issuance in accordance with the terms of this Agreement, the Common Shares will be validly issued, fully paid and 5 nonassessable and free from all taxes, liens and charges with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. The issuance by the Company of the Common Shares is exempt from registration under the 1933 Act and applicable state securities laws pursuant to Section 3(a)(9) of the 1933 Act and similar exemptions under state law, respectively. (d) NO CONFLICTS. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the redemption of the Preferred Shares (including the reservation for issuance and issuance of the Common Shares) will not (i) result in a violation of the Certificate of Incorporation (as defined below), any Certificate of Designations, Preferences and Rights of any outstanding series of preferred stock of the Company or the Bylaws (as defined below) or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, indenture or instrument to which the Company or any of its subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of The Nasdaq Stock Market, Inc.) applicable to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries is bound or affected. (e) CONSENTS. Except for the filing of the Registration Statement (as defined in the Registration Rights Agreement) with the SEC, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency or any regulatory or self-regulatory agency in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case in accordance with the terms hereof or thereof. (f) ACKNOWLEDGMENT REGARDING REDEMPTION OF INVESTOR'S PREFERRED SHARES. The Company acknowledges and agrees that each Investor is acting solely in the capacity of arm's length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and that no Investor is (i) an officer or director of the Company, (ii) an "affiliate" of the Company (as defined in Rule 144) or (iii) a "beneficial owner" of more than 10% of the Common Stock (as defined for purposes of Rule 13d-3 of the 1934 Act (as defined below)). The Company further acknowledges that no Investor is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by an Investor or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Investor's entering into this Agreement. The Company further represents to each Investor that the Company's decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives. (g) NO SOLICITATION. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has paid or given, either directly or indirectly, any 6 commission or other remuneration to any person for soliciting the exchange of the portions of the Preferred Shares for the Common Shares or for any other transaction contemplated by this Agreement. (h) NO INTEGRATED OFFERING. None of the Company, its subsidiaries, any of their affiliates, and any person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the Company's issuance of any of the Common Shares under the 1933 Act or cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of the 1933 Act. None of the Company, its Subsidiaries, their affiliates and any person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration of the Company's issuance of any of the Common Shares under the 1933 Act or cause the offering of the Common Shares to be integrated with other offerings. (i) SEC DOCUMENTS; FINANCIAL STATEMENTS. Since February 28, 1999, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "1934 ACT") (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the "SEC DOCUMENTS"). As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). (j) ABSENCE OF CERTAIN CHANGES. Except as has been publicly disclosed prior to the date of this Agreement and except as set forth on SCHEDULE 3(j), since February 29, 2000, there has been no material adverse change and no material adverse development in the business, properties, operations, financial condition, results of operations or prospects of the Company or its subsidiaries. The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any bankruptcy law nor does the Company or any of its 7 subsidiaries have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy proceedings. (k) CONDUCT OF BUSINESS. Except as set forth on SCHEDULE 3(k), the Company is not in violation of any term of or in default under its Certificate of Incorporation, any Certificate of Designations, Preferences and Rights of any outstanding series of preferred stock of the Company or Bylaws. The Company is not in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company, except for possible violations which would not, individually or in the aggregate, have a Material Adverse Effect. (l) EQUITY CAPITALIZATION. As of the date hereof, the authorized capital stock of the Company consists of (x) 250,000,000 shares of Common Stock, of which (i) as of January 5, 2001, 27,565,399 shares were issued and outstanding, (ii) as of the date hereof, 9,430,167 shares are reserved for issuance pursuant to the Company's stock option and purchase plans and (iii) as of the date hereof, no shares are reserved for issuance pursuant to securities (other than the Preferred Shares and the Warrants) exercisable or exchangeable for, or convertible into, shares of Common Stock, and (y) 10,000,000 shares of preferred stock, of which as of the date hereof, none are issued and outstanding, and none are reserved for issuance (other than the Preferred Stock). All of such outstanding shares have been, or upon issuance will be, validly issued and are fully paid and nonassessable. No shares of the Company's capital stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company. The Company has furnished to the Buyer true and correct copies of the Company's Certificate of Incorporation, as amended and as in effect on the date hereof (the "CERTIFICATE OF INCORPORATION"), and the Company's Bylaws, as amended and as in effect on the date hereof (the "BYLAWS"). (m) CONSENT TO AMEND INVESTOR WARRANTS. On or prior to the date hereof, the Company has obtained, and delivered copies to the Investors of, the written consent of at least that number of Other Investors holding Warrants which, when combined with the Investor Warrants, represent a sufficient number of Warrant Shares as is required under Section 13 of the Warrants to amend the provisions of the Investor Warrants in the manner provided in Section 1 of this Agreement. 4. COVENANTS. (a) BEST EFFORTS. Each party shall use its best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Sections 5 and 6 of this Agreement. (b) REPORTING STATUS. Until the date on which the Investors shall have sold all the Common Shares and the Warrant Shares and none of the Warrants is outstanding (the "REPORTING PERIOD"), the Company shall file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would otherwise permit such termination. 8 (c) FINANCIAL INFORMATION. The Company agrees to send the following to each Investor during the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through EDGAR, within one business day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K and any registration statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) on the same day as the release thereof, facsimile copies of all press releases issued by the Company or any of its Subsidiaries, and (iii) copies of any notices and other information made available or given to the stockholders of the Company generally, contemporaneously with the making available or giving thereof to the stockholders. (d) LISTING. The Company shall promptly secure the listing of all of the Registrable Securities (as defined in the Registration Rights Agreement) upon each national securities exchange and automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Registrable Securities from time to time issuable under the terms of the Transaction Documents and the Warrants. The Company shall maintain the Common Stock's authorization for quotation on the Nasdaq National Market, The New York Stock Exchange, Inc. or The American Stock Exchange, Inc. The Company shall not take any action which would be reasonably expected to result in the delisting or suspension of the Common Stock on the Nasdaq National Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(d). (e) EXPENSES; FEES. Subject to Section 7 below, at the Closing, the Company shall pay a nonaccountable expense allowance of $10,200 to Fisher Capital Ltd. (an Investor) or its designee(s) and $4,800 to Wingate Capital Ltd. (an Investor) or its designee(s), by wire transfer of immediately available funds in accordance with each such Investor's written wire instructions. [This provision is only applicable to the agreement with Fisher Capital Ltd. & Wingate Capital Ltd.] (f) PLEDGE OF SECURITIES. The Company acknowledges and agrees that the Common Shares may be pledged by an Investor in connection with a bonafide margin agreement or other loan or financing arrangement secured by the Common Shares. The pledge of Common Shares shall not be deemed to be a transfer, sale or assignment of the Common Shares hereunder, and no Investor effecting a pledge of Common Shares shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement, any other Transaction Document, including without limitation, Section 2(b) of this Agreement; provided that an Investor and its pledgee shall be required to comply with the provisions of Section 2(b) hereof in order to effect a sale, transfer or assignment of Securities to such pledgee. The Company hereby agrees to execute and deliver such documentation as a pledgee of the Common Shares may reasonably request in connection with a pledge of the Common Shares to such pledgee by an Investor. (g) DISCLOSURE OF TRANSACTIONS AND OTHER MATERIAL INFORMATION. On or before the first business day following the Closing Date, the Company shall file a Form 8-K describing the terms of the transactions contemplated by the Transaction Documents in the form required by 9 the 1934 Act, and attaching the material Transaction Documents (including, without limitation, this Agreement and the Registration Rights Agreement) as exhibits to such filing (including all attachments, exhibits and schedules to such documents, the "8-K FILING"). The Company shall not publicly disclose, by press release or otherwise, the transactions contemplated by the Transaction Documents or any other financing transaction prior to the Closing Date. From and after the filing of the 8-K Filing with the SEC, no Investor shall be in possession of any material nonpublic information received from the Company, any of its subsidiaries or any of its respective officers, directors, employees or agents, that is not disclosed in the 8-K Filing. The Company shall not, and shall cause each of its subsidiaries and its and each of their respective officers, directors, employees and agents, not to, provide any Investor with any material nonpublic information regarding the Company or any of its subsidiaries from and after the filing of the 8-K Filing with the SEC without the express written consent of such Investor. In the event of a breach of the foregoing covenant by the Company, any of its subsidiaries, or any of its or their respective officers, directors, employees and agents, in addition to any other remedy provided herein, in the Transaction Documents, an Investor shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such material nonpublic information without the prior approval by the Company, its subsidiaries, or any of its or their respective officers, directors, employees or agents. No Investor shall have any liability to the Company, its subsidiaries, or any of its or their respective officers, directors, employees, shareholders or agents for any such disclosure. Subject to the foregoing, neither the Company nor any Investor shall issue any press releases or any other public statements with respect to the transactions contemplated hereby or disclosing the name of any Investor; provided, however, that the Company shall be entitled, without the prior approval of any Investor, to make any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Investor shall be consulted by the Company in connection with any such press release or other public disclosure prior to its release). (h) WAIVER OF SECTION 4(o); HOLDINGS. During the period beginning on the date hereof and ending on and including the earlier of (i) the Closing Date and (ii) January 16, 2001 (or such later date as the Company and each Investor agree in writing) (the "PRE-CLOSING PERIOD"), each Investor, severally and not jointly, waives the Company's compliance with its obligations under Section 4(o) of the Securities Purchase Agreement; provided, however, that if the Closing does not occur on or prior to January 16, 2001 (or such later date as the Company and each Investor agree in writing), then the waiver set forth in this Section 4(h) shall be null and void and of no further force or effect with respect to all periods, including the Pre-Closing Period. If the Closing occurs on or prior to January 16, 2001 (or such later date as the Company and each Investor agree in writing), then effective as of the Closing, each Investor, severally and not jointly, permanently waives the Company's compliance with its obligations under Section 4(o) of the Securities Purchase Agreement. If the Closing occurs on or prior to January 16, 2001 (or such later date as the Company and each Investor agree in writing) and the Registration Statement (as defined in the Registration Rights Agreement) is effective and available for the sale of all the Registrable Securities (as defined in the Registration Rights Agreement) on each day during the 60-day 10 period immediately following the date the Company notifies each Investor that the Registration Statement has been declared effective by the SEC, then each Investor agrees that beginning on and including the date which is 60 days after the date the Company notifies each Investor that the Registration Statement has been declared effective by the SEC in accordance with the terms of the Registration Rights Agreement and ending on and including the date which is one (1) year after the Closing Date, neither such Investor nor any of its affiliates shall maintain, directly or indirectly, any short position in the Common Stock in excess of a number of shares equal to the sum of (i) the number of Warrant Shares issuable upon exercise of the Investor Warrants held by such Investor or its affiliates (without regard to any limitations on exercise), plus (ii) the number of Warrant Shares issued upon exercise of Investor Warrants by such Investor or its affiliates and which Warrant Shares such Investor or its affiliates continue to hold. (i) PREFERRED SHARE REGISTRATION. On or before the second (2nd) Business Day following the Closing, the Company shall remove the Investors, including all references thereto or securities held thereby, from the registration statement on Form S-3 filed by the Company on November 9, 2000 (and any amendments thereto) pursuant to the registration rights agreement, dated as of June 29, 2000, by and among the Company, the Investors and the Other Investors (the "PREFERRED SHARE REGISTRATION RIGHTS AGREEMENT"). During the Pre-Closing Period, each Investor, severally and not jointly, waives the Company's compliance with its obligations under the Preferred Share Registration Rights Agreement; provided, however, that if the Closing does not occur on or prior to January 16, 2001 (or such later date as the Company and each Investor agree in writing), then the waiver set forth in this Section 4(i) shall be null and void and of no further force or effect with respect to all periods, including the Pre-Closing Period. If the Closing occurs on or prior to January 16, 2001 (or such later date as the Company and each Investor agree in writing), then effective as of the Closing, each Investor, severally and not jointly, permanently waives the Company's compliance with its obligations under the Preferred Share Registration Rights Agreement. If the Closing occurs on or prior to January 16, 2001 (or such later date as the Company and each Investor agree in writing), then effective as of the Closing, the Company permanently waives each Investor's compliance with its obligations under the Preferred Share Registration Rights Agreement. (j) RULE 144. The Company shall not, directly or indirectly, dispute or otherwise interfere with any claim by a holder of the Common Shares that such holder's holding period of any Common Shares for purposes of Rule 144 relates back (i.e., tacks) to the holding period for the Preferred Shares. 5. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The obligation of the Company hereunder to redeem the Preferred Shares from an Investor (including the issuance of the applicable number of Common Shares to such Investor) at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion by providing each Investor with prior written notice thereof: 11 (a) Such Investor shall have executed this Agreement and the Registration Rights Agreement and delivered the same to the Company. (b) Such Investor shall have delivered to the Company the Stock Certificates representing the Preferred Shares to be redeemed by the Company from such Investor at such Closing with stock powers duly endorsed in blank. (c) The representations and warranties of such Investor contained herein shall be true and correct in all material respects as of the date when made and as of such Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and such Investor shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Investor at or prior to the such Closing Date. 6. CONDITIONS TO EACH INVESTOR'S OBLIGATIONS AT CLOSING. The obligation of each Investor hereunder to permit the Company to redeem the Preferred Shares at the Closing is subject to the satisfaction, at or before the applicable Closing Date, of each of the following conditions, provided that these conditions are for such Investor's sole benefit and may be waived by such Investor at any time in its sole discretion by providing the Company and each Investor with prior written notice thereof: (a) The Company shall have executed this Agreement and the Registration Rights Agreement and delivered the same to such Investor. (b) The Company shall have delivered to such Investor the Cash Component of the Redemption Price for the number of Preferred Shares being redeemed by the Company from such Investor (as set forth in Section 1(a)) on the Closing Date, by wire transfer of immediately available funds pursuant to the wire instructions provided by such Investor (and, with respect to Fisher Capital Ltd. and Wingate Capital Ltd., the Company shall have delivered the amounts set forth in Section 4(e) by wire transfer of immediately available funds such Investor). (c) The Company shall have executed and delivered to such Investor the Stock Certificates (in such denominations as such Investor shall request) representing the Common Shares being issued in exchange for such Investor's Preferred Shares (as set forth in Section 1(a)) which is not redeemed by the Cash Component at the Closing. (d) Such Investor shall have received the opinion of the Company's counsel dated as of the Closing Date, in form, scope and substance reasonably satisfactory to such Investor and in substantially the form of EXHIBIT B attached hereto. (e) The Company shall have delivered to such Investor a certificate evidencing the incorporation and good standing of the Company in Delaware issued by the Secretary of State of the State of Delaware as of a date within 10 days of the Closing Date. 12 (f) The Company shall have delivered to such Investor a certificate, executed by the Secretary of the Company dated as of the Closing Date, as to (i) the resolutions described in Section 3 as adopted by the Company's Board of Directors in a form reasonably acceptable to such Investor, (ii) the Certificate of Incorporation and (iii) the Bylaws, each as in effect at the Closing in the form attached here to as EXHIBIT C. (g) The representations and warranties of the Company shall be true and correct as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Closing Date. Such Investor shall have received a certificate, executed by the Chief Executive Officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Investor in the form attached here to as EXHIBIT D. (h) The Company shall have delivered to such Investor such other documents relating to the transactions contemplated by this Agreement as such Investor or its counsel may reasonably request. (i) (i) The Common Stock shall be designated for quotation or listing on the Principal Market, and (ii) trading in the Common Stock on the Principal Market shall not have been suspended by the SEC or the Principal Market nor shall suspension by the SEC or the Principal Market have been threatened. 7. TERMINATION. In the event that the Closing shall not have occurred with respect to an Investor on or before January 16, 2001 hereof due to the Company's or such Investor's failure to satisfy the conditions set forth in Sections 5 and 6 above (and the nonbreaching party's failure to waive such unsatisfied condition(s)), the nonbreaching party shall have the option to terminate this Agreement with respect to such breaching party at the close of business on such date without liability of any party to any other party; provided, however, that if this Agreement is terminated pursuant to this Section 7, the Company shall remain obligated to reimburse Fisher Capital Ltd. and Wingate Capital Ltd. (provided they are not breaching parties) for the expenses described in Section 4(e) above. 13 8. MISCELLANEOUS. (a) GOVERNING LAW; JURISDICTION; JURY TRIAL. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Illinois, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Illinois or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Illinois. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the state and federal courts sitting in the City of Chicago, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereby irrevocably waives any right it may have, and agrees not to request, a jury trial for the adjudication of any dispute hereunder or in connection with or arising out of this agreement or any transaction contemplated hereby. (b) COUNTERPARTS. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature. (c) HEADINGS. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. (d) SEVERABILITY. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. (e) ENTIRE AGREEMENT; EFFECT ON PRIOR AGREEMENTS; AMENDMENTS. (i) Except for the Securities Purchase Agreement, the Preferred Share Registration Rights Agreement, the Warrants, the Certificate of Designations and the Irrevocable Transfer Agent Instructions (as defined in the Securities Purchase Agreement), this Agreement supersedes all other prior oral or written agreements between the Investors, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced herein 14 contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor any Investor makes any representation, warranty, covenant or undertaking with respect to such matters. (ii) If the Closing occurs on or prior to January 16, 2001 (or such later date as the Company and each Investor agree in writing), then effective as of the Closing, each Investor, severally and not jointly, permanently waives the Company's compliance with its obligations under the Securities Purchase Agreement, except for Sections 4(b), 4(h), 4(j), 4(k), 5 and 9 of the Securities Purchase Agreement. As provided in Section 4(i), if the Closing occurs on or prior to January 16, 2001 (or such later date as the Company and each Investor agree in writing), then effective as of the Closing, each Investor, severally and not jointly, permanently waives the Company's compliance with its obligations under the Preferred Share Registration Rights Agreement. As provided in Section 4(i), if the Closing occurs on or prior to January 16, 2001 (or such later date as the Company and each Investor agree in writing), then effective as of the Closing, the Company permanently waives each Investor's compliance with its obligations under the Preferred Share Registration Rights Agreement. The Warrants, as amended by this Agreement, shall remain in full force and effect. The Irrevocable Transfer Agent Instructions shall remain in full force and effect with respect to the securities and the transactions contemplated thereby. The Investors acknowledge that, if the Closing occurs, the Company may, in its sole discretion, file a certificate of elimination with respect to each of the Certificate of Designations. (iii) No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Investors which hold of at least a majority of the Common Shares then held by Investors (or if prior to the Closing, the Investors holding at least a majority of the Preferred Shares then outstanding), and no provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Preferred Shares then outstanding. (iv) The Company has not, directly or indirectly, made any agreements with any Investors relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. (f) NOTICES. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one business day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: 15 If to the Company: Intraware, Inc. 25 Orinda Way Orinda, California 94563 Telephone: 925-253-4500 Facsimile: 925-253-4541 Attention: President With a copy to: Wilson Sonsini Goodrich & Rosati Professional Corporation 650 Page Mill Road Palo Alto, California 94304 Telephone: 650-493-9300 Facsimile: 650-493-6811 Attention: Adam R. Dolinko, Esq. If to an Investor, to its address and facsimile number set forth on the Schedule of Investors, with copies to such Investor's representatives as set forth on the Schedule of Investors, or to such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party five days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively. (g) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of the Preferred Shares, the Investor Warrants or the Common Shares. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investors holding at least a majority of the Common Shares then held by the Investors, including by merger or consolidation, except pursuant to a Change of Control (as defined in Section 5 of the Certificate of Designations) with respect to which the Company is in compliance with Section 5 of the Certificate of Designations and Section 9 of the Warrants. An Investor may assign some or all of its rights hereunder without the consent of the Company, provided, however, that any such assignment shall not release such Investor from its obligations hereunder unless such obligations are assumed by such assignee and the Company has consented to such assignment and assumption, which consent shall not be unreasonably withheld. 16 (h) NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person. (i) SURVIVAL. Unless this Agreement is terminated under Section 7, the representations and warranties of the Company and the Investors contained in Sections 2 and 3, the agreements and covenants set forth in Sections 4 and 8 shall survive the Closing. Each Investor shall be responsible only for its own representations, warranties, agreements and covenants hereunder. (j) FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. (k) INDEMNIFICATION. In consideration of each Investor's execution and delivery of the Transaction Documents to which it is a party in addition to all of the Company's other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless each Investor and each other holder of the Common Shares and all of their stockholders, officers, directors, employees and direct or indirect investors and any of the foregoing person's agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the "INDEMNITEES") from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys' fees and disbursements (the "INDEMNIFIED LIABILITIES"), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (ii) any disclosure made by such Investor pursuant to Section 4(g), or (iii) solely the status of such Investor or holder of the Common Shares as an investor in the Company. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. Except as otherwise set forth herein, the mechanics and procedures with respect to the rights and obligations under this Section 8(k) shall be the same as those set forth in Section 6 of the Registration Rights Agreement. 17 (l) NO STRICT CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. (m) REMEDIES. Each Investor and each holder of the Common Shares shall have all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which such holders have under any law. Any person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. (n) PAYMENT SET ASIDE. To the extent that the Company makes a payment or payments to the Investors hereunder or pursuant to any of the other Transaction Documents or the Investors enforce or exercise their rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred. (o) MUTUAL GENERAL RELEASE. i. In consideration of the release set forth in Section 8(o)(ii), effective as of the Closing (the "EFFECTIVE TIME") each Investor, severally and not jointly, on behalf of itself and its heirs, executors, administrators, devisees, trustees, partners, directors, officers, shareholders, employees, consultants, representatives, predecessors, principals, agents, parents, associates, affiliates, subsidiaries, attorneys, accountants, successors, successors-in-interest and assignees (collectively, the "INVESTOR RELEASING PERSONS"), hereby waives and releases, to the fullest extent permitted by law, but subject to Section 8(o)(iii) below, any and all claims, rights and causes of action, whether known or unknown (collectively, the "INVESTOR CLAIMS"), that any of the Investor Releasing Persons had or currently has against (i) the Company, (ii) any of the Company's current or former parents, shareholders, affiliates, subsidiaries, predecessors or assigns, or (iii) any of the Company's or such other persons' or entities' current or former officers, directors, employees, agents, principals, investors, signatories, advisors, consultants, spouses, heirs, estates, executors, attorneys, auditors and associates and members of their immediate families (collectively, the "COMPANY RELEASED PERSONS"), including, without limitation, Investor Claims arising out of or relating to the Securities Purchase Agreement, the Registration Rights Agreement, the Warrants and the Certificate of Designations (collectively, the "RELEASED DOCUMENTS") other than Investor Claims arising after the Effective Time. 18 ii. In further consideration of the Investors entering into this Agreement, effective as of the Effective Time, the Company on behalf of itself and its heirs, executors, administrators, devisees, trustees, partners, directors, officers, shareholders, employees, consultants, representatives, predecessors, principals, agents, parents, associates, affiliates, subsidiaries, attorneys, accountants, successors, successors-in-interest and assignees (collectively, the "COMPANY RELEASING PERSONS"), hereby waives and releases, to the fullest extent permitted by law, but subject to Section 8(o)(iii) below, any and all claims, rights and causes of action, whether known or unknown (collectively, the "COMPANY CLAIMS"), that any of the Company Releasing Persons had or currently has against (i) the Investors, (ii) any of the Investors' respective current or former parents, shareholders, affiliates, subsidiaries, predecessors or assigns, or (iii) any of the Investors' or such other persons' or entities' current or former officers, directors, employees, agents, principals, investors, signatories, advisors, consultants, spouses, heirs, estates, executors, attorneys, auditors and associates and members of their immediate families (collectively, the "INVESTOR RELEASED PERSONS"), including, without limitation, any Company Claims arising out of or relating to the Released Documents. iii. The Company and each of the Investors acknowledge that the release set forth in Sections 8(o)(i) and 8(o)(ii) above does not affect any claim which any Company Releasing Person or Investor Releasing Person may have under this Agreement and Section 9(k) of the Securities Purchase Agreement. iv. It is the intention of each party that this Section 8(o) shall be effective as a final accord and satisfaction and release of each and every Investor Claim and Company Claim, except as otherwise specifically provided in this Section 8(o). In furtherance of this intention, each party acknowledges that it is familiar with Section 1542 of the California Civil Code which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT NOW KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. Each party hereby waives and relinquishes every right or benefit which it may have under Section 1542 or the California Civil Code to the extent that it may lawfully waive such right or benefit pertaining to the subject matter of this Agreement. Each party acknowledges that the foregoing waiver was separately bargained for and is a key element of the Agreement of which this release is a part. * * * * * * 19 IN WITNESS WHEREOF, each Investor and the Company have caused this Redemption and Amendment Agreement to be duly executed as of the date first written above. COMPANY: INVESTORS: INTRAWARE, INC. By: -------------------------- Name: Title:
SCHEDULE OF INVESTORS [For agreement with Fisher & Wingate] INVESTOR'S NAME INVESTOR ADDRESS NUMBER OF NUMBER OF NUMBER OF TOTAL TOTAL TOTAL CASH TOTAL AND FACSIMILE NUMBER SHARES OF SHARES OF SHARES OF NUMBER OF NUMBER OF COMPONENT COMMON SERIES A SERIES B SERIES C SHARES OF WARRANT SHARES PREFERRED PREFERRED PREFERRED PREFERRED SHARES STOCK STOCK STOCK STOCK - ------------------- -------------------------------- -------- -------- --------- --------- --------- ------------ -------- Fisher Capital Ltd. "Citadel Investment Group, L.L.C. 284 14 14 312 117,969 $2,554,585.4 255,459 225 West Washington Street Chicago, Illinois 60606 Attention: Daniel J. Hopkins Jefrey D. Rogers Facsimile: (312) 338-0780 Telephone: (312) 696-2100 Residence: Cayman Islands (REPRESENTATIVES) Katten Muchin Zavis 525 W. Monroe Street Chicago, Illinois 60661-3693 Attention: Robert J. Brantman, Esq. Facsimile: (312) 902-1061 Telephone: (312) 902-5200 - ------------------- -------------------------------- -------- -------- --------- --------- --------- ------------ -------- Wingate Capital Ltd. "Citadel Investment Group, L.L.C. 133 7 7 147 55,515 $1,203,602.8 120,360 225 West Washington Street Chicago, Illinois 60606 Attention: Daniel J. Hopkins Jefrey D. Rogers Facsimile: (312) 338-0780 Telephone: (312) 696-2100 Residence: Cayman Islands (REPRESENTATIVES) Katten Muchin Zavis 525 W. Monroe Street Chicago, Illinois 60661-3693 Attention: Robert J. Brantman, Esq. Facsimile: (312) 902-1061 Telephone: (312) 902-5200 SCHEDULE OF INVESTORS [For agreement with HFTP] - ------------------- -------------------------------- -------- -------- --------- --------- --------- ------------ -------- HFTP Investment c/o Promethean Asset Management, 167 8 8 183 69,394 $1,498,362.45 149,836 L.L.C. L.L.C. 750 Lexington Ave, 22nd Floor New York, NY 10022 Attention: John Floegel Telephone: (212) 702-5200 Facsimile: (212) 758-9334 Residence: New York (REPRESENTATIVES) Katten Muchin Zavis 525 W. Monroe Street Chicago, Illinois 60661-3693 Attention: Robert J. Brantman, Esq. Facsimile: (312) 902-1061 Telephone: (312) 902-5200 SCHEDULE OF INVESTORS [For agreement with Marshall Capital] - ------------------- -------------------------------- -------- -------- --------- --------- --------- ------------ -------- Marshall Capital Marshall Capital Management, Inc. 250 12 12 274 104,090 $2,243,449.78 224,345 Management, Inc. c/o Credit Suisse First Boston 11 Madison Ave., 7th Floor New York, NY 10010 Attention: Alan Weine Charles Gassenheimer Telephone: (212) 325-0038 (312) 750-3239 Facsimile: (212) 325-6519 (312) 750-1031 Residence: New York (REPRESENTATIVES) Solomon, Zauderer, Ellenhorn, Frischer & Sharp 45 Rockefeller Plaza New York, New York 10111 Attention: Robert Mazzeo Telephone: (212) 956-3700 Facsimile: (212) 956-4068
EXHIBITS
Exhibit A Form of Registration Rights Agreement Exhibit B Form of Company Counsel Opinion Exhibit C Form of Secretary's Certificate Exhibit D Form of Officer's Certificate
INTRAWARE, INC. DISCLOSURE SCHEDULE AS OF JANUARY 10, 2001 Pursuant to Section 3 of the Redemption and Amendment, dated as of January 10, 2001 (the "AGREEMENT"), Intraware hereby delivers this Disclosure Schedule to the representations and warranties of Intraware given in the Agreement. Any capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Agreement. 3(j) ABSENCE OF CERTAIN CHANGES. The Company may be in breach of documents related to its Series A, B and C Preferred Stock Financing. The market price of the Company's Common Stock has dropped by more than 95% since February 29, 2000. This drop may have created and may in the future create concerns on the part of potential customers and partners regarding the Company's viability, thereby causing them to delay or avoid purchasing products or services from the Company and/or entering into business arrangements with the Company. This drop may also have created and may in the future create concerns on the part of key employees and members of the Board of Directors of the Company regarding the Company's viability and the value of their Common Stock holdings and/or options to purchase Common Stock, thereby making it difficult for the Company to retain those key employees and members of the Board of Directors. The Company is in the process of restructuring and consolidating its business operations and its product and service offering, in connection with the Company's press release on December 1, 2000 and its report on Form 8-K filed with the Securities and Exchange Commission on December 12, 2000. This restructuring and consolidation have resulted in an overall reduction in the resources devoted to sales, marketing, support and development of the Company's products and services, and in the number and scope of products and services offered, and may thereby adversely affect the Company's future operating results. In addition, the restructuring and consolidation may have had and may continue to have an adverse impact on the morale of employees and the ability of the Company to attract and retain qualified employees. The Company is in the business of selling information technology (IT) products and services to companies. In recent months, key U.S. companies in several industries, and the U.S. government, have released data suggesting that the growth of revenues and profits among U.S. companies generally is decreasing. The majority of the Company's revenues and profits are derived from sales to U.S. companies. The trend suggested by the above-referenced data may cause those companies to decrease their spending on IT products and services such as those offered by the Company. In addition, prior to February 29, 2000, a substantial portion of the Company's sales was to emerging growth technology companies. Since February 29, 2000, the capital resources available to emerging growth technology companies have diminished substantially and the financial performance of the emerging-growth technology sector has deteriorated substantially. This combination of events appears to have caused, and is expected to continue to cause, a substantial reduction in the spending of emerging growth technology companies on IT products and services such as those offered by the Company. The Company has historically experienced significant operating losses that have required the Company to fund operations through financing activities, such as the sale of the Company's common stock and preferred stock. Because of the uncertain nature of the business climate generally, as well as the uncertain demand for the Company's products and services, the Company may experience operating losses in the future. Depending on the magnitude and frequency of any such operating losses, the Company may require additional funding through the issuance of debt or equity securities. Since February 29, 2000, it has become increasingly difficult for emerging growth technology companies such as Intraware to raise capital through the issuance of debt or equity securities. In the event of significant ongoing operation losses, there can be no assurances that the Company will be able to raise sufficient capital in the future to fund operations. 3(k) CONDUCT OF BUSINESS. The Company may be in breach of documents related to its Series A, B and C Preferred Stock Financing. EX-99.2 3 a2035290zex-99_2.txt EX 99-2 EXHIBIT 99.2 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of January 10, 2001, by and among Intraware, Inc., a Delaware corporation, with headquarters located at 25 Orinda Way, Orinda, California 94563 (the "COMPANY"), and the undersigned investors (each, an "INVESTOR" and collectively, the "INVESTORS"). WHEREAS: A. The Company, the Investors and certain other entities (the "OTHER INVESTORS") previously entered into that certain Securities Purchase Agreement, dated as of June 29, 2000 (the "SECURITIES PURCHASE AGREEMENT"), pursuant to which the Investors and the Other Investors purchased from the Company (I) shares of the Company's Series A, B and C Convertible Preferred Stock (the "PREFERRED STOCK"), which are convertible into shares of the Company's common stock, par value $0.0001 per share (the "COMMON STOCK") and (II) warrants to purchase shares of Common Stock (the "WARRANTS" and, as exercised, the "WARRANT SHARES"); B. In connection with the Redemption and Amendment Agreement by and among the parties hereto of even date herewith (the "REDEMPTION AGREEMENT"), the parties have agreed, upon the terms and subject to the conditions of the Redemption Agreement, (i) that the Company shall redeem the shares of Preferred Stock held by the Investors for an aggregate of $3,758,188.20 in cash and the issuance of an aggregate of 375,819 shares of Common Stock, as adjusted for any stock splits, stock dividends, stock combinations or other similar transactions (the "COMMON SHARES"), and (ii) to amend the terms of the Warrants to decrease the exercise price; C. To induce each Investor to execute and deliver the Redemption Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the "1933 ACT"), and applicable state securities laws. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each Investor hereby agree as follows: 1. DEFINITIONS. As used in this Agreement, the following terms shall have the following meanings: a. "HOLDER" means an Investor, any transferee or assignee thereof to whom an Investor assigns its rights under this Agreement and who agrees to become bound by the 1 provisions of this Agreement in accordance with Section 9 and any transferee or assignee thereof to whom a transferee or assignee assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9. b. "PERSON" means a corporation, a limited liability company, an association, a partnership, an organization, a business, an individual, a governmental or political subdivision thereof or a governmental agency. c. "REGISTER," "REGISTERED," and "REGISTRATION" refer to a registration effected by preparing and filing one or more Registration Statements (as defined below) in compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous basis ("RULE 415"), and the declaration or ordering of effectiveness of such Registration Statement(s) by the United States Securities and Exchange Commission (the "SEC"). d. "REGISTRABLE SECURITIES" means the Common Shares and the Warrant Shares issued or issuable to the Investors upon exercise of the Warrants and any shares of capital stock issued or issuable with respect to the Common Shares, such Warrant Shares or the Warrants held by the Investors as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, in each case without regard to any limitation on exercises of the Warrants. e. "REGISTRATION STATEMENT" means a registration statement of the Company filed under the 1933 Act. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Redemption Agreement. 2. REGISTRATION. a. MANDATORY REGISTRATION. The Company shall prepare, and, as soon as practicable but in no event later than 5 days after the Closing Date (as defined in the Redemption Agreement) (the "MANDATORY FILING DATE"), file with the SEC a Registration Statement or Registration Statements (as is necessary) on Form S-3 covering the resale of all of the Registrable Securities. In the event that Form S-3 is unavailable for such a registration, the Company shall use such other form as is available for such a registration, subject to the provisions of Section 2(d). The initial Registration Statement prepared pursuant hereto shall register for resale at least that number of shares of Common Stock equal to the number of Registrable Securities calculated as of the date immediately preceding the date the Registration Statement is initially filed with the SEC, subject to adjustment as provided in Section 3(b). The Company shall use its best efforts to have the Registration Statement declared effective by the SEC as soon as practicable, but in no event later than 65 days after the Closing Date (the "MANDATORY EFFECTIVE DATE"). 2 b. ALLOCATION OF REGISTRABLE SECURITIES. The initial number of Registrable Securities included in any Registration Statement and each increase in the number of Registrable Securities included therein shall be allocated pro rata among the Holders based on the number of Registrable Securities held by each Holder at the time the Registration Statement covering such initial number of Registrable Securities or increase thereof is last filed with the SEC. In the event that a Holder sells or otherwise transfers any of such Person's Registrable Securities, each transferee shall be allocated a pro rata portion of the then remaining number of Registrable Securities included in such Registration Statement for such transferor. Any shares of Common Stock included in a Registration Statement and which remain allocated to any Person which ceases to hold any Registrable Securities shall be allocated to the remaining Holders, pro rata based on the number of Registrable Securities then held by such Holders. c. LEGAL COUNSEL. Subject to Section 5 hereof, the Investors holding a majority of the Registrable Securities shall have the right to select one legal counsel to review and oversee any offering pursuant to this Section 2 ("LEGAL COUNSEL"). The Company shall reasonably cooperate with Legal Counsel in performing the Company's obligations under this Agreement. d. ELIGIBILITY FOR FORM S-3. The Company represents and warrants that it currently meets the requirements for use of Form S-3 for registration of the resale of the Registrable Securities, and has no actual knowledge of any facts which would reasonably cause the Company to fail to meet such requirements. In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on another appropriate form, reasonably acceptable to the holders of a majority of the Registrable Securities, and (ii) undertake to register the Registrable Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC. e. SUFFICIENT NUMBER OF SHARES REGISTERED. In the event that the number of shares available under (i) the Registration Statement filed pursuant to Section 2(a) together with (ii) any Registration Statements filed pursuant to this Section 2(e) is insufficient to cover the resale of 100% of the Registrable Securities or a Holder's allocated portion of the registered shares pursuant to Section 2(b), the Company shall amend any such Registration Statement, or file a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover at least 100% of the Registrable Securities calculated as of the trading day immediately preceding the date of the filing of such amendment or new Registration Statement), in each case, as soon as practicable, but in any event not later than fifteen (15) Business Days after the necessity therefor arises. The Company shall use its best efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof. f. EFFECT OF FAILURE TO OBTAIN AND MAINTAIN EFFECTIVENESS OF REGISTRATION STATEMENT. If (i) a Registration Statement covering all the Registrable Securities and required to 3 be filed by the Company pursuant to this Agreement is not declared effective by the SEC on or before the Mandatory Effective Date or (ii) on any day after the Registration Statement has been declared effective by the SEC sales of all the Registrable Securities required to be included on such Registration Statement cannot be made (other than during an Allowable Grace Period) pursuant to the Registration Statement (including, without limitation, because of a failure to keep the Registration Statement effective, to disclose such information as is necessary for sales to be made pursuant to the Registration Statement or to register sufficient shares of Common Stock), then, as partial relief for the damages to any holder by reason of any such delay in or reduction of its ability to sell Registrable Securities (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to each holder of Registrable Securities an amount in cash per Registrable Security equal to the product of (i) the Closing Sale Price (as defined in the Certificate of Designations, Preferences and Rights of the Company's Series A Convertible Preferred Stock) of the Common Stock on the date of determination multiplied by (ii) the sum of (A) 0.025, if the Registration Statement is not declared effective by the Mandatory Effective Date, plus, (B) 0.025, if the Registration Statement is not declared effective by the 30th day after the Mandatory Effective Date and 0.025 if the Registration Statement is not declared effective by each successive 30th day, plus (C) the product of (I) 0.000833 multiplied by (II) the number of days after the Registration Statement has been declared effective by the SEC that such Registration Statement is not available (other than days during an Allowable Grace Period) for the resale of all the Registrable Securities required to be included on such Registration Statement pursuant to Section 2(e). The payments to which a holder shall be entitled pursuant to this Section 2(f) are referred to herein as "REGISTRATION DELAY PAYMENTS." Registration Delay Payments shall be paid on the earlier of (I) the last day of the calendar month during which such Registration Delay Payments are incurred and (II) the third business day after the event or failure giving rise to the Registration Delay Payments is cured. In the event the Company fails to make Registration Delay Payments in a timely manner, such Registration Delay Payments shall bear interest at the rate of 2.0% per month (prorated for partial months) until paid in full. 3. RELATED OBLIGATIONS. In connection with the Company's obligation to file a Registration Statement with the SEC pursuant to Section 2(a) or 2(e), the Company shall have the following obligations: a. The Company shall submit to the SEC, within two business days after the Company learns that no review of a particular Registration Statement will be made by the staff of the SEC or that the staff has no further comments on a Registration Statement, as the case may be, a request for acceleration of effectiveness of such Registration Statement to a time and date not later than 48 hours after the submission of such request. The Company shall keep a Registration Statement effective pursuant to Rule 415 at all times until the earlier of (i) the date as of which none of the Warrants is outstanding and the Holders shall have sold all the Registrable Securities or (ii) the date as of which all the Holders may sell all of the Registrable Securities pursuant to Rule 144(k) under the 1933 Act (or any successor thereto) (the "REGISTRATION PERIOD"). The Company shall insure that each Registration Statement (including 4 any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. b. The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement or pursuant to Rule 144 under the 1933 Act. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Securities Exchange Act of 1934, as amended (the "1934 ACT"), the Company shall have incorporated such report by reference into the Registration Statement, if applicable, or shall file such amendments or supplements with the SEC on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement the Registration Statement. Without limiting the generality of the obligation set forth in this Section 3(b), the Company shall, from time to time, file a supplement to the prospectus included in a Registration Statement which updates the information contained in the Registration Statement relating to (i) the total number of Warrants outstanding, (ii) the exercise price of the Warrants, (iii) the total number of shares of Common Stock issuable upon exercise of all outstanding Warrants, (iv) the number of shares of Common Stock beneficially owned by each Holder whose shares are included in the Registration Statement, and (v) the number of shares of Common Stock being offered by each Holder whose shares are included in the Registration Statement. The Company shall file any such supplement with the SEC under Rule 424(b)(3) of the 1933 Act, or if the supplement may not be filed under Rule 424(b)(3) of the 1933 Act, then under such other applicable provisions of the 1933 Act. c. The Company shall permit Legal Counsel to review and comment upon a Registration Statement and all amendments and supplements thereto at least five business days prior to their filing with the SEC, and not file any document in a form to which Legal Counsel reasonably objects. The Company shall not submit a request for acceleration of the effectiveness of a Registration Statement or any amendment or supplement thereto without the prior approval of Legal Counsel, which consent shall not be unreasonably withheld. The Company shall furnish to Legal Counsel, without charge, (i) any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to any Registration Statement, (ii) promptly after the same is prepared and filed with the SEC, one copy of any Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits and (iii) upon the effectiveness of any Registration 5 Statement, one copy of the prospectus included in such Registration Statement and all amendments and supplements thereto. d. The Company shall furnish to each Holder whose Registrable Securities are included in any Registration Statement, without charge, (i) promptly after the same is prepared and filed with the SEC, at least one copy of such Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (ii) upon the effectiveness of any Registration Statement, ten copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as such Holder may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as such Holder may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Holder. e. The Company shall use its best efforts to (i) register and qualify, unless an exemption from registration or qualification applies, all the Registrable Securities covered by a Registration Statement under all securities or "blue sky" laws of such jurisdictions in the United States, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify Legal Counsel and each Holder who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or "blue sky" laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose. f. The Company shall (i) notify Legal Counsel and each Holder in writing (provided that in no event shall such notice include any material, nonpublic information) as promptly as practicable upon its discovery that the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, (ii) promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission, and (iii) deliver ten copies of such supplement or amendment to Legal Counsel and each Holder (or such other number of copies as Legal Counsel or such Holder may reasonably request). The Company shall also promptly notify Legal Counsel and each Holder in writing (provided that in no event shall such notice include any material, nonpublic information) (x) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and 6 when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel and each Holder by facsimile on the same day of such effectiveness and by overnight mail), (y) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, and (z) of the Company's reasonable determination that a post-effective amendment to a Registration Statement would be appropriate. g. The Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify (provided that in no event shall such notification include any material, nonpublic information) Legal Counsel and each Holder who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose. h. At the reasonable request of any Holder, the Company shall furnish to such Holder, on the date of the effectiveness of the Registration Statement and thereafter from time to time on such dates as a Holder may reasonably request (i) a letter, dated such date, from the Company's independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Holders, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the Holders. i. The Company shall make available for inspection by (i) any Holder, (ii) Legal Counsel and (iii) one firm of accountants or other agents retained by the Holders (collectively, the "INSPECTORS") all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the "RECORDS"), as shall be reasonably deemed necessary by each Inspector, and cause the Company's officers, directors and employees to supply all information which any Inspector may reasonably request; provided, however, that each Inspector shall hold in strict confidence and shall not make any disclosure (except to a Holder) or use of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (b) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure in violation of this or any other agreement of which the Inspector has knowledge. Each Holder agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. 7 j. The Company shall hold in confidence and not make any disclosure of information concerning a Holder provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning a Holder is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Holder and allow such Holder, at the Holder's expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information. k. The Company shall use its best efforts either to (i) cause all the Registrable Securities covered by a Registration Statement to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) secure designation and quotation of all the Registrable Securities covered by the Registration Statement on the Nasdaq National Market System or, if, despite the Company's best efforts to satisfy the preceding clause (i) or (ii), the Company is unsuccessful in satisfying the preceding clause (i) or (ii), to secure the inclusion for quotation on The Nasdaq SmallCap Market for such Registrable Securities and, without limiting the generality of the foregoing, to arrange for at least two market makers to register with the National Association of Securities Dealers, Inc. ("NASD") as such with respect to such Registrable Securities. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(k). l. The Company shall cooperate with the Holders who hold Registrable Securities being offered to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the Holders may reasonably request and registered in such names as the Holders may request. m. The Company shall provide a transfer agent and registrar of all such Registrable Securities not later than the effective date of such Registration Statement. n. If requested by a Holder, the Company as promptly as practicable shall: (i) incorporate in a prospectus supplement or post-effective amendment such information as a Holder requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor, the persons selling the Registrable Securities and any other terms of the offering of the Registrable Securities; (ii) make all required filings of such prospectus supplement or post-effective 8 amendment as soon as notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement if requested by a holder of such Registrable Securities. o. The Company shall use its best efforts to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities. p. The Company shall make generally available to its security holders as soon as practical, but not later than 90 days after the close of the period covered thereby, an earnings statement (in form complying with the provisions of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter next following the effective date of the Registration Statement. q. The Company shall otherwise use its best efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder. r. Within two (2) business days after the Registration Statement which includes the Registrable Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Holders whose Registrable Securities are included in such Registration Statement) confirmation that the Registration Statement has been declared effective by the SEC in the form attached hereto as EXHIBIT A. s. The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Holders of Registrable Securities pursuant to a Registration Statement. t. Notwithstanding anything to the contrary in Section 3(f), at any time after the Registration Statement has been declared effective by the SEC, the Company may delay the disclosure of material non-public information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Board of Directors of the Company and its counsel, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required (a "GRACE PERIOD"); provided, that the Company shall promptly (i) notify the Holders in writing of the existence of material non-public information giving rise to a Grace Period (provided that in each notice the Company will not disclose the content of such material non-public information to the Holders) and the date on which the Grace Period will begin, and (ii) notify the Holders in writing of the date on which the Grace Period ends; and, provided further, that no Grace Period shall exceed 15 consecutive days, such Grace Periods shall not exceed an aggregate of 30 days during any consecutive 365 day period and the first day of any Grace Period must be at least thirty trading days after the last day of any prior Grace Period (an "ALLOWABLE GRACE PERIOD"). For purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include the date the holders receive the notice referred 9 to in clause (i) and shall end on and include the later of the date the holders receive the notice referred to in clause (ii) and the date referred to in such notice. The provisions of Section 3(g) shall not be applicable during the period of any Allowable Grace Period. In the event of any Grace Period, the Expiration Date (as defined in the Warrants) shall be delayed one day for each day in the Grace Period as provided in Section 1(b)(x) of the Warrants. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of a Holder in accordance with the terms of the Redemption Agreement in connection with any sale of Registrable Securities with respect to which a Holder has entered into a contract for sale prior to the Holder's receipt of the notice of a Grace Period and for which the Holder has not yet settled. 4. OBLIGATIONS OF THE HOLDERS. a. At least three business days prior to the first anticipated filing date of a Registration Statement, the Company shall notify each Holder in writing of the information the Company requires from each such Holder if such Holder elects to have any of such Holder's Registrable Securities included in such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request. b. Each Holder, by such Holder's acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Holder has notified the Company in writing of such Holder's election to exclude all of such Holder's Registrable Securities from such Registration Statement. c. Each Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence of 3(f), such Holder will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities until such Holder's receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(g) or the first sentence of 3(f) or receipt of notice that no supplement or amendment is required. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of a Holder in accordance with the terms of the Redemption Agreement, in the case of Common Shares, or the Securities Purchase Agreement, in the case of Warrant Shares, in connection with any sale of Registrable Securities with respect to which a Holder has entered into a contract for sale prior to the Holder's receipt of a notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence of 3(f) and for which the Holder has not yet settled. 10 5. EXPENSES OF REGISTRATION. All reasonable expenses, other than underwriting discounts and brokerage commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company shall be paid by the Company. [The Company also shall reimburse the Holders for fees and disbursements of Legal Counsel in connection with registration filing or qualification pursuant to Sections 2 and 3 of this Agreement up to $10,000.] [This sentence is applicable only to the agreement with Fisher Capital Ltd. and Wingate Capital Ltd.] 6. INDEMNIFICATION. In the event any Registrable Securities are included in a Registration Statement under this Agreement: a. To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Holder, the directors, officers, partners, employees, agents, representatives of, and each Person, if any, who controls any Holder within the meaning of the 1933 Act or the 1934 Act (each, an "INDEMNIFIED PERSON"), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, attorneys' fees, amounts paid in settlement or expenses, joint or several, (collectively, "CLAIMS") incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto ("INDEMNIFIED DAMAGES"), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other "blue sky" laws of any jurisdiction in which Registrable Securities are offered ("BLUE SKY FILING"), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement and not corrected in any final prospectus delivered to the Holder in a timely manner, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any material violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, "VIOLATIONS"). The Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal fees or other 11 reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(d); (ii) shall not be available to the extent such Claim is based on a failure of the Holder to deliver or to cause to be delivered the prospectus made available by the Company, if such prospectus was timely made available by the Company pursuant to Section 3(d); and (iii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Holders pursuant to Section 9. b. In connection with any Registration Statement in which a Holder is participating, each such Holder agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement, each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (each an "INDEMNIFIED PARTY") any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Holder expressly for use in connection with such Registration Statement; and, subject to Section 6(d), such Holder will reimburse any legal or other reasonable expenses incurred by them in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Holder, which consent shall not be unreasonably withheld; provided, further, however, that the Holder shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Holder as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Holders pursuant to Section 9. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) with respect to any prospectus shall not inure to the benefit of any Indemnified Party if the untrue statement or omission of material fact contained in the prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented. c. Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified 12 Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. The Company shall pay reasonable fees for only one separate legal counsel for the Holders, and such legal counsel shall be selected by the Holders holding a majority in interest of the Registrable Securities included in the Registration Statement to which the Claim relates. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such Claim or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action. d. The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred. e. The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law. 13 7. CONTRIBUTION. To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities pursuant to such Registration Statement. 8. REPORTS UNDER THE 1934 ACT. With a view to making available to the Holders the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the Holders to sell securities of the Company to the public without registration ("RULE 144"), the Company agrees to: a. make and keep public information available, as those terms are understood and defined in Rule 144; b. file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements (it being understood that nothing herein shall limit the Company's obligations under Section 4(c) of the Securities Purchase Agreement and Section 4(b) of the Redemption Agreement) and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and c. furnish to each Holder so long as such Holder owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Holders to sell such securities pursuant to Rule 144 without registration. 14 9. ASSIGNMENT OF REGISTRATION RIGHTS. The rights under this Agreement shall be automatically assignable by the Holders to any transferee of all or any portion of Registrable Securities if: (i) the Holder agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the 1933 Act and applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee provides the Company with a writing agreeing to be bound by all of the provisions contained herein; and (v) such transfer shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement, in the case of the Warrants and the Warrant Shares, or the Redemption Agreement, in the case of the Common Shares. 10. AMENDMENT OF REGISTRATION RIGHTS. Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Holders who then hold a majority of the Registrable Securities. Any amendment or waiver effected in accordance with this Section 10 shall be binding upon each Holder and the Company. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Registrable Securities. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this Agreement. 11. MISCELLANEOUS. a. A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities. b. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one business day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: 15 If to the Company: Intraware, Inc. 25 Orinda Way Orinda, California 94563 Telephone: 925-253-4500 Facsimile:925-253-4541 Attention: President With a copy to: Wilson Sonsini Goodrich & Rosati 650 Page Mill Road Palo Alto, California 94304-1050 Telephone: 650-493-9300 Facsimile: 650-493-6811 Attention: Adam R. Dolinko, Esq. If to Legal Counsel: Katten Muchin Zavis 525 West Monroe Street, Suite 1600 Chicago, Illinois 60661-3693 Telephone: 312-902-5200 Facsimile: 312-902-1061 Attention: Robert J. Brantman, Esq. If to an Investor, to its address and facsimile number set forth on the Schedule of Investors attached hereto, with copies to such Investor's representatives as set forth on the Schedule of Investors, or to such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party five days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively. c. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof. d. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Illinois, 16 without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Illinois or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Illinois. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the state and federal courts sitting in the City of Chicago, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. Each party hereby irrevocably waives any right it may have, and agrees not to request, a jury trial for the adjudication of any dispute hereunder or in connection herewith or arising out of this Agreement or any transaction contemplated hereby. e. This Agreement, the Redemption Agreement and the Transaction Documents (as defined in the Redemption Agreement) constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement, the Redemption Agreement and the Transaction Documents supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof. f. Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto. g. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. h. This Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement. i. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the 17 intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. j. All consents and other determinations to be made by the Holders pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by Holders holding a majority of the Registrable Securities. k. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party. l. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. * * * * * * 18 IN WITNESS WHEREOF, each Investor and the Company have caused this Registration Rights Agreement to be duly executed as of day and year first above written. COMPANY: INTRAWARE, INC. By: ---------------------------------- Name: -------------------- Title: -------------------- 19 SCHEDULE OF INVESTORS [For agreement w/ Fisher and Wingate]
HOLDER NAME INVESTOR'S ADDRESS AND FACSIMILE NUMBER - ---------------------------------- --------------------------------------- Fisher Capital Ltd. "Citadel Investment Group, L.L.C. 225 West Washington Street Chicago, Illinois 60606 Attention: Daniel J. Hopkins Jefrey D. Rogers Facsimile: (312) 338-0780 Telephone: (312) 696-2100 Wingate Capital Ltd. "Citadel Investment Group, L.L.C. 225 West Washington Street Chicago, Illinois 60606 Attention: Daniel J. Hopkins Jefrey D. Rogers Facsimile: (312) 338-0780 Telephone: (312) 696-2100 SCHEDULE OF INVESTORS [For agreement w/ HFTP] HFTP Investment c/o Promethean Asset Management, L.L.C. L.L.C. 750 Lexington Ave, 22nd Floor New York, NY 10022 Attention: John Floegel Telephone: (212) 702-5200 Facsimile: (212) 758-9334 Residence: New York (REPRESENTATIVES) Katten Muchin Zavis 525 W. Monroe Street Chicago, Illinois 60661-3693 Attention: Robert J. Brantman, Esq. Facsimile: (312) 902-1061 Telephone: (312) 902-5200 SCHEDULE OF INVESTORS [For agreement w/ Marshall Capital] Marshall Capital Marshall Capital Management, Inc. Management, Inc. c/o Credit Suisse First Boston 11 Madison Ave., 7th Floor New York, NY 10010 Attention: Alan Weine Charles Gassenheimer Telephone: (212) 325-0038 (312) 750-3239 Facsimile: (212) 325-6519 (312) 750-1031 Residence: New York (REPRESENTATIVES) Solomon, Zauderer, Ellenhorn, Frischer & Sharp 45 Rockefeller Plaza New York, New York 10111 Attention: Robert Mazzeo Telephone: (212) 956-3700 Facsimile: (212) 956-4068
EXHIBIT A FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT [TRANSFER AGENT] Attn: Re: Intraware, Inc. Ladies and Gentlemen: We are counsel to Intraware, Inc., a Delaware corporation (the "COMPANY"), and have represented the Company in connection with that certain Redemption and Amendment Agreement (the "REDEMPTION AGREEMENT") entered into by and among the Company and the investors named therein (collectively, the "INVESTORS") pursuant to which the Company issued to the Investors shares of its common stock, par value $0.0001 per share (the "COMMON STOCK"), and that certain Securities Purchase Agreement, dated as of June 29, 2000, by and among the Company, the Investors and certain other buyers pursuant to which the Company issued to the Investors warrants to purchase shares of the Common Stock (the "WARRANTS"). Pursuant to the Redemption Agreement, the Company also has entered into a Registration Rights Agreement with the Investors (the "REGISTRATION RIGHTS AGREEMENT") pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration Rights Agreement), including the shares of Common Stock issued pursuant to the Redemption Agreement and issuable upon exercise of the Warrants, under the Securities Act of 1933, as amended (the "1933 ACT"). In connection with the Company's obligations under the Registration Rights Agreement, on ____________ ___, 200__, the Company filed a Registration Statement on Form S-3 (File No. 333-_____________) (the "REGISTRATION STATEMENT") with the Securities and Exchange Commission (the "SEC") relating to the Registrable Securities which names each of the Investors as a selling stockholder thereunder. In connection with the foregoing, we advise you that a member of the SEC's staff has advised us by telephone that the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after telephonic inquiry of a member of the SEC's staff, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for resale under the 1933 Act pursuant to the Registration Statement. Very truly yours, [ISSUER'S COUNSEL] By: ----------------------- cc: [LIST NAMES OF HOLDERS] -----END PRIVACY-ENHANCED MESSAGE-----