Document:

Exhibit 10.2

 

INVESTOR RIGHTS AGREEMENT

 

This INVESTOR RIGHTS
AGREEMENT (the “Agreement”) is made as of November 9,
2005, by and between Intraware, Inc., a Delaware corporation (the “Company”) and Digital River, Inc., a Delaware
corporation (“Digital River”).

 

WHEREAS, the Company and
Digital River are parties to the Series B Preferred Stock Purchase
Agreement, dated November 9, 2005 (the “Purchase
Agreement”), pursuant to which Digital River is purchasing 1,000 shares
of the Company’ Series B Preferred Stock (the “Shares”);
and

 

WHEREAS, subject to the
terms and conditions set forth herein, the Company has agreed to grant certain
registration rights and other rights to Digital River with respect to the
Shares.

 

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

 

ARTICLE I

 

DEFINITIONS

 

1.1           Definitions.  For the purpose of this Agreement, the
following terms shall have the meanings specified with respect thereto below:

 

(a)           “Board of
Directors” shall mean the Board of Directors of the Company.

 

(b)           “Common Stock”
shall mean the Common Stock, par value $0.0001 per share, of the Company.

 

(c)           “Eligible
Period” shall mean the period commencing on the second anniversary
of this Agreement.

 

(d)           “Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended.

 

(e)           “Register,”
“registered,” and “registration”
refers to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration statement or
document.

 

(f)            “Registrable
Shares” shall mean the shares of Common Stock (including shares of
Common Stock issuable upon conversion of the Series B Preferred Stock)
issued or issuable to Stockholder in accordance with the terms and conditions
of the Purchase Agreement, and any securities of the Company issued as a
dividend on or other distribution with respect to, or in exchange for or
replacement of, such Common Stock.

 

 

(g)           “Registration
Statement” shall mean any registration statement described in Sections 2.1
or 2.2 of this Agreement.

 

(a)           “Rule 144” shall mean Rule 144 as promulgated under
the Exchange Act.

 

(h)           “Rule 145”
shall mean Rule 145 as promulgated under the Securities Act.

 

(i)            “SEC”
shall mean the U.S. Securities and Exchange Commission.

 

(j)            “Securities
Act” shall mean the Securities Act of 1933, as amended.

 

(k)           “Series B
Preferred Stock” shall mean the Series B Preferred Stock,
$0.0001 par value per share, of the Company.

 

(l)            “Standstill
Agreement” shall mean that Standstill and Stock Restriction
Agreement, dated November 9, 2005, by and between the Company and Digital
River.

 

(m)          “Stockholder”
shall mean Digital River, any transferee or assignee thereof to whom Digital
River assigns its rights under the Agreement and who agrees to become bound by
the provisions of this Agreement in accordance with Section 6.5,
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 6.5.

 

(n)           “Voting Stock”
shall mean shares of the Common Stock and shares of any class of capital stock
of the Company which are then entitled to vote generally in the election of the
Board of Directors of the Company.

 

ARTICLE II

 

REGISTRATION RIGHTS

 

2.1           Demand Registration.

 

(a)           If at any time during
the Eligible Period the Stockholder requests in writing (the “Stockholder
Demand”) that the Company file a registration statement on Form S-3 (or
any successor form to Form S-3) for a public offering of shares of the
Registrable Shares the Company shall, subject to Section 2.4, file
such Registration Statement with the SEC within forty-five (45) days after
its receipt of such request.  The Company
shall use commercially reasonable efforts to cause such Registration Statement
to be declared effective as soon thereafter as practicable and keep such
registration statement effective until the Stockholder notifies the Company in
writing that the Company is no longer required to keep such Registration
Statement effective. In no event, however, shall the Company be required to (i) effect
more than two (2) registrations pursuant to this section or (ii) keep
one or more registration statements filed pursuant to this section effective
for more than an aggregate of one hundred twenty (120) days.  In the event the registration is proposed to
be part of a firm commitment underwritten public offering, the substantive
provisions of Section 2.3 shall be

 

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applicable to each
such registration initiated under this Section 2.1 and the
piggyback registration rights of Stockholder shall be applicable to a
registration effected pursuant to this Section 2.1.

 

(b)           Notwithstanding the
foregoing, the Company shall not be obligated to take any action pursuant to
subparagraph (a):

 

(i)            if the Company, within
ten (10) days of the receipt of the Stockholder Demand, gives notice
of its bona  fide intention to effect the filing of a registration
statement with the SEC within sixty (60) days of receipt of such demand
(other than a registration relating primarily to the sale of securities to
participants in a Company stock plan or employee benefit plan, a transaction
covered by Rule 145 under the Securities Act or the resale of securities
issued in such a transaction, a registration in which the only stock being
registered is Common Stock issuable upon conversion or exchange of debt
securities which are also being registered, or any registration on any form
which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of the Registrable
Shares); provided, however, that if such
registration statement is not filed by the Company within 60 days of receipt of
such Stockholder Demand and declared effective by the SEC within 120 days after
the Company’s receipt of such Stockholder Demand, the Company shall be
obligated to cause such Registrable Shares of the Stockholder to be registered
in accordance with the provisions of this Section 2.1  provided that the Company is actively employing in good
faith all reasonable efforts to cause such registration statement to become
effective; or

 

(ii)           during the period
starting with the Company’s date of filing of, and ending on the date ninety
(90) days immediately following, the effective date of any registration
statement pertaining to securities of the Company (other than a registration of
securities in a Rule 145 transaction or with respect to an offering solely
to employees or consultants, or any other registration which is not appropriate
for the registration of Registrable Shares), which registration was either
filed as a result of the exercise by Stockholder of its rights pursuant to Section 2.1
hereof or was subject to Section 2.2 hereof.

 

2.2           Piggyback
Registration.  If at any time, the
Company proposes to register any of its Common Stock under the Securities Act
in connection with a public offering of such Common Stock solely for cash
(other than a registration relating primarily to the sale of securities to
participants in a Company stock plan of employee benefit plan, a transaction
covered by Rule 145 under the Securities Act or the resale of securities
issued in such a transaction, a registration in which the only stock being
registered is Common Stock issuable upon conversion or exchange of debt
securities which are also being registered or any registration on any form
which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of the Registrable
Shares), the Company shall, at such time, give the Stockholder notice of
such registration.  Upon the
written request of the Stockholder, given within twenty (20) days
after notice has been given by the Company in accordance with Section 6.1,
the Company shall, subject to Section 2.3, cause to be registered
under the Securities Act all of the Registrable Shares that the Stockholder has
requested to be registered.

 

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2.3           Underwriting
Requirements.

 

(a)           In connection with any
underwritten public offering, the Company shall not be required to include
any of the Registrable Shares in such underwriting unless the Stockholder
accepts the terms of the underwriting as agreed upon between the Company and the
underwriters for the offering (which underwriters shall be selected by the
Company).

 

(b)           If the total amount of
securities, including Registrable Shares, requested to be included in an
underwritten public offering exceeds the amount of securities that the
underwriters determine in their sole discretion is compatible with the success
of the offering, then the Company shall be required subject to the requirements
of this Section 2.3(b) to include in the offering only that
number of such securities, including Registrable Shares, which the underwriters
determine in their sole discretion will not jeopardize the success of the
offering.  In such event, the Company may
reduce the number of Registrable Shares to be included in the offering.

 

2.4           Conditions and Limitations
on Registration Rights.  The
registration rights granted by this agreement are subject to the following
additional conditions and limitations:

 

(a)           Delays and
Suspension.  The Company may delay
the filing of, or suspend or delay the effectiveness of a Registration
Statement for up to thirty (30) days, if the Company shall furnish to the
Stockholder a certificate signed by the Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors it would be seriously
detrimental to the Company or its stockholders for such a registration
statement to be filed or declared effective or for an effective registration
statement not to be suspended. In such event, the Company’s obligation under
this Agreement to file a registration statement, seek effectiveness of a
registration statement or keep such registration statement effective shall be
deferred for a period not to exceed sixty (60) days from the receipt of the
request to file such registration by the Stockholder, provided
that the Company may not exercise this right of deferral for an aggregate of in
excess of seventy-five (75) days in any one year period.  If the Company suspends the effectiveness of
a Registration Statement, the Company will promptly deliver notice to the
Stockholder of such suspension and will again deliver notice to the Stockholder
when such suspension is no longer necessary. 
The duration for which the Company is required to keep a Registration
Statement effective shall be extended by an additional number of days equal to
the length of any suspension period.

 

(b)           Amended or
Supplemented Prospectus.  The
Stockholder agrees that, upon receipt of any notice from the Company described
in Section 2.4(a) hereof that suspends an effective
registration statement, the Stockholder shall forthwith discontinue disposition
of Registrable Shares until such Stockholder’s receipt of copies of a
supplemented or amended prospectus from the Company, or until it is advised in
writing by the Company that the use of the prospectus may be resumed, and has
received copies of any additional or supplemental filings which are
incorporated by reference in the prospectus. 
If so directed by the Company, the Stockholder will deliver to the Company
all copies of the prospectus covering such Registrable Shares current at the
time of receipt of such notice of suspension.

 

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2.5           Information from
Stockholder.  It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Agreement with respect to the Registrable Shares of the Stockholder that the
Stockholder shall furnish to the Company such information regarding itself, the
Registrable Shares held by it, and the intended method of disposition of such
securities, as shall be required to effect the registration of the Registrable
Shares.

 

2.6           Expenses of
Registration.  The Company shall pay
all registration, filing and qualification fees (including SEC filing fees and
the listing fees of the quotation system or any stock exchange on which the
Company securities are traded) attributable to the Registrable Shares
registered under this Agreement, and any legal, accounting or other
professional fees or expenses incurred by the Company. The Stockholder shall
pay all underwriting discounts, selling commissions and stock transfer taxes,
if any, attributable to the sale of such securities registered by the
Stockholder and any legal, accounting or other professional fees incurred by
the Stockholder.

 

2.7           Reports Under the
Exchange Act.  The Company agrees to
file with the SEC in a timely manner all reports and other documents and
information required of the Company under the Exchange Act, and take such other
actions as may be necessary to assure the availability of Form S-3 for use
in connection with the registration rights provided in this Agreement and Rule 144
for use in connection with resales of the Registrable Shares.

 

2.8           Rule 144.  In the event that all of the Stockholder’s
Registrable Shares may, under Rule 144, be resold or otherwise disposed of
in a ninety (90) day period without registration under the Securities Act,
the registration rights granted under this Agreement to such Stockholder and
the obligations of the Company hereunder (other than its obligations under Section 2.7
and Article IV) to such Stockholder, shall automatically terminate
in their entirety and be of no further force and effect whatsoever without any
further action on the part of the Company or the Stockholder.

 

2.9           Market Stand-Off.  The Stockholder agrees that, upon the request
of the underwriters managing any underwritten public offering of the Company’s
securities in connection with an effective registration statement under the
Securities Act, it will not offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, the Registrable Shares other than those included in the
registration, without the prior written consent of such underwriters, for such
period of time, not to exceed ninety (90) days (or such lesser period as
executive officers or directors of the Company are so restricted with respect
to the transfer of shares of Common Stock held by them) after the effective
date of the registration statement relating thereto, provided
that such registration was filed as a result of the exercise by Stockholder of
its rights pursuant to Section 2.1 hereof or was subject to Section 2.2
hereof.  The Stockholder agrees that, if
requested by the underwriters for such an offering, it will enter into a
lock-up agreement directly with the underwriters under substantially the same
terms and conditions and for the same time period as entered into by the
executive officers and directors of the Company.  The Stockholder agrees that the Company may
instruct its transfer agent to place stop-transfer notations in its records to
enforce the provisions of this Section 2.9.

 

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ARTICLE III

 

FURTHER OBLIGATIONS OF THE COMPANY AFTER REGISTRATION

 

3.1           Blue Sky Compliance.  The Company shall, as soon as reasonably
possible after the effectiveness of a Registration Statement, use its best
efforts to register and qualify the Registrable Shares covered by the
Registration Statement under such other securities or “blue sky” laws of such
jurisdictions as shall be reasonably requested by the Stockholder, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions
unless the Company is already subject to service in such jurisdiction and
except as may be required by the Securities Act.

 

3.2           Furnishing of
Prospectus.  With respect to a
Registration Statement filed pursuant to Sections 2.1 or 2.2, the
Company shall furnish to the Stockholder copies of any preliminary prospectus
and, as soon as reasonably possible after the effectiveness of the Registration
Statement, furnish to the Stockholder such numbers of copies of a final
prospectus in conformity with the requirements of the Securities Act, and such
other documents as the Stockholder may reasonably request, in order to
facilitate the resale or other disposition of Registrable Shares owned by it.

 

3.3           Amendments.  With respect to a Registration Statement
filed pursuant to Section 2.1 or 2.2 of this Agreement, and subject
to any events contemplated by or actions taken under Section 2.4 of
this Agreement, the Company shall prepare and file with the SEC such amendments
to the Registration Statement and amendments or supplements to the prospectus
contained therein as may be necessary to keep such Registration Statement
effective and such Registration Statement and prospectus accurate and complete
for the entire period for which the Registration Statement remains effective.

 

3.4           Notices.  The Company shall:

 

(a)           Notify the Stockholder,
promptly after it shall receive notice thereof, of the date and time when any
Registration Statement and each post-effective amendment thereto has become
effective;

 

(b)           Notify the Stockholder
promptly of any request by the SEC for the amending or supplementing of any
Registration Statement or prospectus or for additional information;

 

(c)           Notify the Stockholder,
at any time when a prospectus relating to the Registrable Shares is required to
be delivered under the Securities Act, of any event which would cause any such
prospectus or any other prospectus as then in effect to include an untrue
statement of a material fact or omit to state any 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, and promptly prepare
and file with the SEC, and promptly notify the Stockholder of the filing of,
such amendments or supplements to any Registration Statement or prospectus as
may be necessary to correct any such statements or omissions; and

 

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(d)           Notify Stockholder,
promptly after it shall receive notice, of the issuance of any stop order by
the SEC suspending the effectiveness of any Registration Statement or the
initiation or threatening of any proceeding for that purpose and promptly use
commercially reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued.

 

ARTICLE IV

 

INDEMNIFICATION

 

4.1           Indemnification.

 

(a)           To the extent permitted
by law, the Company will indemnify the Stockholder, each of its officers,
directors and partners, legal counsel, agents and each person controlling the
Stockholder within the meaning of Section 15 of the Securities Act, with
respect to which registration, qualification or compliance has been effected
pursuant to this Agreement, and each underwriter, if any, and each person who
controls any underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages and liabilities
(or actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, (commenced or threatened), arising out of or
based on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or any violation by the Company of the Securities
Act, the Exchange Act, and any state securities laws or any rule, regulation or
qualification promulgated thereunder, and the Company will reimburse the
Stockholder, each of its officers, directors, and partners, legal counsel,
agents and each person controlling the Stockholder, each such underwriter and
each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred, in connection with investigating, preparing or
defending any such claim, loss, damage, liability or action, provided, however, that the Company will not be liable in
any such case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or omission or
alleged untrue statement or omission, made in reliance upon and in conformity
with written information furnished to the Company by the Stockholder,
controlling person or underwriter expressly for use therein.

 

(b)           The foregoing indemnity
is subject to the condition that, insofar as it relates to any such untrue
statement, alleged untrue statement, omission or alleged omission made in a
preliminary prospectus on file with the SEC at the time the registration
statement becomes effective or the amended prospectus filed with the SEC
pursuant to Rule 424(b), as amended from time to time (the “Final Prospectus”), such indemnity shall not inure to the
benefit of:  (a) the Stockholder (i) if
a copy of the Final Prospectus was not furnished by the Stockholder to the
person asserting the loss, liability, claim or damage at or prior to the time
such action as required by the Securities Act and such Final Prospectus would
have cured the defect giving rise to the loss, liability, claim or damage or (ii) to
the extent that such untrue statement, alleged untrue statement, omission or
alleged

 

7

 

omission is made
in reliance upon and in conformity with written information furnished to the
Company by the Stockholder expressly for use therein, or (b) any
underwriter (i) if a copy of the Final Prospectus was not furnished to the
person asserting the loss, liability, claim or damage at or prior to the time
such action as required by the Securities Act and the Final Prospectus would
have cured the defect giving rise to the loss, liability, claim or damage or (ii) to
the extent that such untrue statement, alleged untrue statement, omission or
alleged omission is made in reliance on and in conformity with written
information furnished to the Company by the underwriter for use therein.

 

(c)           The Stockholder will,
if Registrable Shares held by the Stockholder are included in the securities as
to which such registration, qualification or compliance is being effected,
indemnify the Company, each of its directors and officers, each underwriter, if
any, of the Company’s securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of Section 15
of the Securities Act, against all expenses, claims, losses, damages and
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation (commenced or threatened), arising out
of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering
circular or other document, or any amendment or supplement thereto, incident to
such registration, qualification or compliance, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and, severally, and not jointly,
will reimburse the Company, such directors, officers, persons, underwriters or
control persons for any legal and any other expenses reasonably incurred, in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by the Stockholder expressly for use therein.  Notwithstanding the foregoing, the liability
of the Stockholder under this Section 4.1 shall be limited to an
amount equal to the net proceeds received by the Stockholder from the sale of
shares in such registration.

 

(d)           Each party entitled to
indemnification under this Section 4.1 (the “Indemnified
Party”) shall give notice to the party required to provide
indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld), and the
Indemnified Party may participate in such defense at such party’s expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Agreement, unless the failure to give such notice is
prejudicial to an Indemnifying Party’s ability to defend such action, and provided further that an Indemnified Party shall have the
right to retain its own counsel, with the fees and expenses of such counsel to
be paid by the Indemnifying Party, if representation of such Indemnified Party
by the counsel retained by the Indemnifying Party would be inappropriate due to
actual or potential differing interests between such Indemnified Party and any
other party represented by such counsel in such proceeding.  No

 

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Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.

 

(e)           If the indemnification
provided for in this Section 4.1 is held by a court of competent
jurisdiction to be unavailable to an Indemnified Party with respect to any
losses, claims, damages or liabilities referred to herein, the Indemnifying
Party, in lieu of indemnifying such Indemnified Party thereunder, shall to the
extent permitted by applicable law contribute to the amount paid or payable by
such Indemnified Party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the violation(s) that resulted in such loss, claim, damage or
liability, as well as any other relevant equitable considerations.  The relative fault of the Indemnifying Party
and of the Indemnified Party shall be determined by a court of law by reference
to, among other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied
by the Indemnifying Party or by the Indemnified Party and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission; provided, that
in no event shall any contribution by the Stockholder hereunder exceed the net
proceeds from the offering received by the Stockholder.

 

(f)            The obligations of the
Company and the Stockholder under this Section 4.1 shall survive
completion of any offering of Registrable Securities in a registration
statement and the termination of this Agreement.

 

ARTICLE V

 

BOARD OF DIRECTORS

 

5.1           Election of Director.  After the date of execution of a strategic
alliance agreement between Digital River and the Company and for so long as
Digital River continues to own ten percent (10%) or more of the outstanding
shares of Voting Stock, the Company will nominate and use its reasonable
efforts to have one individual designated by Digital River and reasonably
acceptable to the Board of Directors (the “Digital River Designee”)
elected to the Board of Directors (including filling any vacancy created as the
result of the resignation, removal, incapacitation or death of a Digital River
Designee with another Digital River Designee as permitted by the Company’s
certificate of incorporation and bylaws, and at each annual or special meeting
of stockholders of the Company at which the applicable class of directors are
to be elected, causing the Board of Directors to recommend to the stockholders
of the Company that such Digital River Designee be elected as a member of the
Board of Directors and soliciting proxies and voting such proxies in favor of
the election of such Digital River Designee).

 

5.2           Resignation of
Director.  In the event that Digital
River owns less than ten percent (10%) of the
outstanding shares of Voting Stock, then the Company may at such time request
the

 

9

 

Digital River Designee to resign from the
Board of Directors, and within ten (10) days following such request, the
Digital River Designee shall resign from the Board of Directors.

 

5.3           Conflicts of
Interest.  The Digital River Designee
may be excluded from any meeting or portion thereof of the Board of Directors
or from access to any notices, minutes, consents or other materials provided to
the Board of Directors if the Board of Directors determines such exclusion is
necessary to avoid conflicts of interest or where the Board of Directors or its
chairman determines that the business interests of Digital River are
inconsistent with the business interests of the Company.

 

5.4           Indemnification.  The Company shall indemnify its directors to
the full extent permitted by law and shall maintain coverage under directors
and officers insurance in customary form and coverage levels and payable to the
Company as beneficiary.

 

5.5           Reimbursment of
Expenses.  The Company shall
reimburse the Digital River Designee for reasonable expenses incurred in
connection with the attendance of the Digital River Designee at meetings of the
Board of Directors, upon presentation of appropriate documentation therefor.

 

ARTICLE VI

 

MISCELLANEOUS

 

6.1           Notices.  All notices and other communications required
or permitted hereunder shall be made in the manner and to addresses set forth
in the Purchase Agreement.

 

6.2           Interpretation.  The words “include,” “includes” and “including”
when used herein shall be deemed in each case to be followed by the words “without
limitation.”  The headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

 

6.3           Counterparts.  This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.

 

6.4           Entire Agreement.  This Agreement, the Purchase Agreement, the
Standstill Agreement and the documents and instruments and other agreements
among the parties hereto referenced herein: 
(a) constitute the entire agreement among the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to
the subject matter hereof; and (b) are not intended to confer upon any
other person any rights or remedies hereunder.

 

6.5           Assignment.
Digital River may transfer or assign its rights and obligations hereunder
together with any Registrable Shares transferred or assigned in accordance with
the terms of the Standstill Agreement, as long as such transferee or assignee
of the Registrable Shares executes and

 

10

 

delivers a
counterpart copy of this Agreement thereby agreeing to be bound by the terms
and provisions set forth herein.  Except
as permitted herein, any assignment of rights or delegation of duties under
this Agreement by a party without the prior written consent of the other
parties, if such consent is required hereby, shall be void ab initio.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

 

6.6           Severability.  In the event that any provision of this
Agreement or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect and the application of
such provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto.  The parties further agree to replace such
void or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and
other purposes of such void or unenforceable provision.

 

6.7           Attorneys’ Fees.  In any action at law or suit in equity in
relation to this Agreement, the prevailing party in such action or suit shall
be entitled to receive a reasonable sum for its attorneys’ fees and all other
reasonable costs and expenses incurred in such action or suit.

 

6.8           Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof.

 

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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.

 

	
   

  	
  INTRAWARE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter H. Jackson

  	
   

  
	
   

  	
   

  	
  Name: Peter H. Jackson

  	
   

  
	
   

  	
   

  	
  Title: Chairman, Chief Executive Officer
  and

  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DIGITAL RIVER, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Thomas Donnelly

  	
   

  
	
   

  	
   

  	
  Name: Thomas Donnelly

  	
   

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  	
   

  

 

 

[Signature Page to
Investor Rights Agreement]Exhibit
10.3

 

STANDSTILL AND STOCK RESTRICTION
AGREEMENT

 

This STANDSTILL AND STOCK RESTRICTION AGREEMENT (the “Agreement”) is made as of November 9, 2005, by and
between Intraware, Inc., a Delaware corporation (the “Company”)
and Digital River, Inc., a Delaware corporation (“Digital
River”).

 

WHEREAS, the Company and Digital River have executed a
Preferred Stock Purchase Agreement, dated November 9, 2005, by and among
the Company and Digital River (the “Purchase Agreement)
pursuant to which Digital River is purchasing 1,000 shares of the Company’s Series B
Preferred Stock;

 

WHEREAS, the Company and Digital River desire, in
connection with the execution of the Purchase Agreement, to make certain
covenants and agreements with one another pursuant to this Agreement;

 

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

 

ARTICLE I

 

DEFINITIONS

 

1.1           Definitions.  For the purpose of this Agreement, the
following terms shall have the meanings specified with respect thereto below:

 

(a)           “13D Group”
means any group of persons formed for the purpose of acquiring, holding, voting
or disposing of Voting Stock which would be required under Section 13(d) of
the Exchange Act, and the rules and regulations promulgated thereunder, to
file a statement on Schedule 13D pursuant to Rule 13d-1(a) or a Schedule 13G
pursuant to Rule 13d-1(c) with the SEC as a “person” within the
meaning of Section 13(d)(3) of the Exchange Act.

 

(b)           “Affiliate”
shall have the meaning set forth in Rule 12b-2 of the rules and
regulations promulgated under the Exchange Act.

 

(c)           “Beneficially Own,”
“Beneficially Owned,” or “Beneficial Ownership” shall have the meaning set forth in Rule 13d-3
of the rules and regulations promulgated under the Exchange Act.

 

(d)           “Board Approval”
shall mean the affirmative vote or written consent of a majority of the Board
of Directors of the Company duly obtained in accordance with the applicable
provisions of the Company’s bylaws and applicable law.

 

(e)           “Change of Control of the
Company” shall mean any of the following: (A) a merger,
consolidation or other business combination or transaction to which the Company
is a party if the stockholders of the Company immediately prior to the
effective date of such merger, consolidation or other business combination or
transaction, as a result of such share

 

 

ownership, have Beneficial Ownership of voting
securities representing less than fifty percent (50%) of the Total Current
Voting Power of the surviving or successor entity (or its ultimate parent
company) following such merger, consolidation or other business combination or
transaction; (B) an acquisition by any person, entity or 13D Group of
direct or indirect Beneficial Ownership of Voting Stock of the Company
representing fifty percent (50%) or more of the Total Current Voting Power of
the Company; (C) a sale of all or substantially all the assets of the
Company; (D) a liquidation or dissolution of the Company; or (E) during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Company was approved by a vote of a
majority of the directors of the Company then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved, other than a director designated by a
person who has entered into an agreement with the Company to effect a
transaction described in the preceding clauses) cease for any reason to
constitute a majority of the Board of Directors of the Company then in office.

 

(f)            “Common Stock”
shall mean Shares of the Common Stock, $0.0001 par value per share, of the
Company.

 

(g)           “Control” or “Controlled by” shall have the meaning set forth in Rule 12b-2
of the rules and regulations promulgated under the Exchange Act.

 

(h)           “Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended.

 

(i)            “Fair Market Value”
means, as of any date of determination, (A) in the case of any security,
the average of the closing sale prices of such security during the 10 trading
days immediately preceding such date of determination on the principal U.S. or
foreign securities exchange on which such security is listed or, if such
security is not listed or primarily traded on any such exchange, the average of
the closing sale prices or the closing bid quotations of such security during
the 10-day period preceding such date of determination on Nasdaq or any
comparable system then in use or, if no such quotations are available, the fair
market value of such security as of such date of determination as determined
pursuant to clause (B) below, and (B) in the case of property other
than cash or any security the Fair Market Value of which can be determined
pursuant to the foregoing clause (A), the fair market value of such property on
such date of determination as determined in good faith by a majority of
Independent Directors; provided, however,
if Digital River disputes such determination, then the fair market value shall
be as determined by two Investment Banks, with one Investment Bank to be
selected by each of the Company and Digital River for such purpose.  Each such Investment Bank shall determine the
fair market value and shall deliver its written valuation to the Company and
Digital River within thirty (30) days after selection.  In the event that such Investment Banks do
not agree on the fair market value, the fair market value shall be the average
of the two valuations, except that if the higher of the two valuations is
greater than twice the lower valuation, the Investment Banks shall select
another Investment Bank of similar qualifications who shall determine the fair
market value independently of such selection in accordance with the procedures
specified in the foregoing sentence.  None of the Company, Digital River or the
initial Investment Banks shall provide the third Investment Bank with
information regarding the valuation of the initial

 

2

 

Investment Banks. 
The valuation of the third Investment Bank shall be arithmetically
averaged with the two prior valuations and the valuation farthest from the
average of the three valuations shall be disregarded.  The fair market value shall be the average of
the two remaining valuations.  The
Company and Digital River shall each pay one-half of the expense of the
valuation.

 

(j)            “Digital River Shares”
shall mean the shares of Series B Preferred Stock of the Company issued to
Digital River pursuant to the Purchase Agreement (including shares of Common
Stock issuable upon conversion of the Series B Preferred Stock).

 

(k)           “Independent Director”
shall mean a director of the Company who qualifies as an independent
director under the listing standards of Nasdaq, excluding any director
nominated by Digital River pursuant to the Investor Rights Agreement.

 

(l)            “Investment Bank”
means any nationally recognized investment-banking firm that has not had any
significant relationship with the Company or Digital River or their respective
Affiliates in the last twelve (12) months.

 

(m)          “Investor Rights Agreement”
shall mean the Investor Rights Agreement dated as of November 9, 2005,
between the Company and Digital River.

 

(n)           “Nasdaq” shall
mean The Nasdaq Stock Market.

 

(o)           “Non-Voting Convertible
Securities” shall mean any securities of the Company which are
convertible into, exchangeable for or otherwise exercisable to acquire Voting
Stock of the Company, including convertible securities, warrants, rights or
options to purchase Voting Stock of the Company.

 

(p)           “person” shall
mean an individual, corporation, partnership, limited liability company,
association, trust, or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.

 

(q)           “Rule 144”
shall mean Rule 144 as promulgated under the Exchange Act.

 

(r)            “SEC” shall mean
the U.S. Securities and Exchange Commission.

 

(s)           “Securities Act”
shall mean the Securities Act of 1933, as amended.

 

(t)            “Series B Preferred
Stock” shall mean Shares of the Series B Preferred Stock,
$0.0001 par value per share, of the Company.

 

(u)           “Shares” shall
mean any shares of Voting Stock that are then Beneficially Owned by Digital
River.

 

(v)           “Standstill Limit”
shall mean fifteen percent (15%) of the Total Current Voting Power of the
Company.

 

(w)          “Standstill Period”
shall mean the period beginning on the date hereof and ending on the occurrence
of a Standstill Termination Event, except for any period beginning

 

3

 

on the date of a Standstill Suspension Event and
ending on the date of a Standstill Reinstatement Event.

 

(x)            “Standstill Reinstatement
Event” shall mean either (A) with respect to a Suspending
Acquisition, such person, entity or 13D Group directly or indirectly Beneficially
Owning Voting Stock of the Company representing less than fifteen percent (15%)
of the Total Current Voting Power of the Company; (B) with respect to a
Suspending Merger, the withdrawal or termination (including, without
limitation, as a result of a temporary restraining order or an injunction
issued by a governmental entity) of such merger, consolidation or other
business combination or transaction or a sale of all or substantially all the
assets of the Company; or (C) with respect to a Tender Offer Commencement,
the withdrawal or termination (including, without limitation, as a result of a
temporary restraining order or an injunction issued by a governmental entity)
by such person, entity or 13D Group of the Third Party Tender Offer.

 

(y)           “Standstill Suspension
Event” shall mean either: (A) a Suspending Acquistion; (B) a
Suspending Merger; or (C) a Tender Offer Commencement.

 

(z)            “Standstill Termination
Event” shall mean the earliest to occur of the following: (A) Digital
River Beneficially Owning less than ten percent (10%) of the Total Current
Voting Power of the Company; provided, however,
that such event occurs or is continuing more than one (1) year following
the date of this Agreement; or (B) a Change of Control of the Company
(other than a Change of Control of the Company involving Digital River).

 

(aa)         “Suspending Acquisition”
shall mean an acquisition by any person, entity or 13D Group of direct or
indirect Beneficial Ownership of Voting Stock of the Company representing more
than fifteen percent (15%) but less than fifty percent (50%) of the Total
Current Voting Power of the Company.

 

(bb)         “Suspending Merger”
shall mean the entry into by the Company of any merger, consolidation or other
business combination or transaction with any person, entity or 13D Group or a
sale of all or substantially all the assets of the Company to any person,
entity or 13D Group pursuant to which the Common Stock of the Company would be
converted into cash or securities of another person, entity or 13D Group or which
would result in all or substantially all of the Company’s assets being sold to
another person, entity or 13D Group.

 

(cc)         “Tender Offer Commencement”
shall mean the announcement or commencement by any person, entity or 13D Group
of a Third Party Tender Offer.

 

(dd)         “Third Party Tender Offer”
shall mean a bona fide public tender offer subject to the provisions of
Regulation 14D when first commenced within the meaning of Rule 14d-2(a) of
the rules and regulations under the Exchange Act, by a person, entity or
13D Group (which is not made by and does not include the Company or Digital
River) to purchase or exchange for cash or other consideration any Voting
Stock, which, if successful, would result in such person, entity or 13D Group
owning, when combined with any other Voting Stock owned by such person, entity
or 13D Group, fifteen percent (15%) or more of the Total Current Voting Power
of the Company.

 

4

 

(ee)         “Total Current Voting Power”
shall mean, with respect to any entity, at the time of determination of Total
Current Voting Power, the total number of votes which may be cast in the
election of members of the board of directors of the corporation if all
securities entitled to vote in the election of such directors are present and
voted (or, in the event the entity is not a corporation, the governing members,
board or other similar body of such entity).

 

(ff)           “Transfer” shall
mean any sale, assignment, transfer, lease, pledge, conveyance,
hypothecation or other transfer or disposition of such share, whether or not
for value and whether voluntary or involuntary.

 

(gg)         “Voting Stock”
shall mean shares of the Common Stock and shares of any class of capital stock
of the Company which are then entitled to vote generally in the election of the
Board of Directors of the Company.

 

ARTICLE II

 

STANDSTILL
OBLIGATIONS, TRANSFER RESTRICTIONS

AND OTHER OBLIGATIONS

 

2.1           Digital
River’s Standstill Obligations. 
Digital River agrees that, during the Standstill Period:

 

(a)  Neither it nor any of its Affiliates shall,
directly or indirectly, acquire or Beneficially Own Voting Stock or authorize
or make a tender offer, exchange offer or other offer to acquire Voting Stock,
if the effect of such acquisition would be to increase the percentage of Total
Current Voting Power of the Company represented by all Shares Beneficially
Owned by Digital River and its Affiliates to more than the Standstill
Limit.  Digital River shall not be deemed
to have violated its respective covenants under this Section 2.1 by
virtue of any increase in the aggregate percentage of the Total Current Voting
Power of the Company represented by Shares Beneficially Owned by Digital River
or its Affiliates if such increase is the result of a recapitalization of the Company,
a repurchase of securities by the Company or other actions taken by the Company
or any of the Company’s Affiliates that have the effect of reducing the Total
Current Voting Power of the Company. 
Notwithstanding the foregoing, if the Shares Beneficially Owned by
Digital River and its Affiliates is ever less than the Standstill Limit due to
the issuance and sale by the Company of its Voting Stock or for any reason
other than by Digital River’s own action, Digital River may, at any time,
purchase from third parties in normal broker transactions an amount of Common
Stock sufficient to raise Digital River’s relative ownership of the Company’s
capital stock to the Standstill Limit, subject to applicable laws and any
applicable trading restrictions or black-out periods under the Company’s
insider trading policies.

 

(b)  It shall promptly notify the Company if its
aggregate Beneficial Ownership of Voting Stock exceeds the aggregate Beneficial
Ownership of Voting Stock specified in Digital River’s most recent prior notice
to the Company under this Section 2.1 (or if no such notice has yet
been given, the aggregate Beneficial Ownership of Voting Stock on the date of
this Agreement) by more than 1% of the outstanding Voting Stock.  Such notice shall specify the amount of
Voting Stock Beneficially Owned by Digital River as of the date of the
notice.  Notwithstanding any provision of
this Section 2.1(b) to the contrary, the provisions of this

 

5

 

Section 2.1(b) requiring notice to the Company may be satisfied by the
delivery by Digital River to the Company of an amendment to any Schedule 13D
filed by Digital River with respect to the Shares.

 

(c)  It shall not, without first obtaining Board
Approval, solicit proxies with respect to any Voting Stock or make any
recommendation regarding the voting of any Voting Stock.

 

(d)  It shall not, without first obtaining Board
Approval, (i) deposit any Voting Stock or Non-Voting Convertible
Securities in a voting trust or, except as otherwise provided or contemplated
herein, subject any Voting Stock or Non-Voting Convertible Securities to any
arrangement or agreement with any third party with respect to the voting of
such Voting Stock or (ii) join a 13D Group, partnership, limited partnership,
syndicate or other group, or otherwise act in concert with any third person for
the purpose of acquiring, holding, voting or disposing of Voting Stock or Non-Voting
Convertible Securities.

 

2.2           The
Company’s Right of First Refusal

 

(a)  Digital River’s right to Transfer (other than a Transfer to any Affiliate of such holder or a
Transfer to the Company pursuant to a redemption or otherwise) the shares shall be subject to the Company’s right of first
refusal to purchase such Shares on the following terms and conditions:

 

(i)            Digital River
shall give prior notice (the “Transfer Notice”)
to the Company in writing of any intention to Transfer Shares, specifying the
name of the proposed purchaser or transferee, the number of Shares proposed to
be the subject of such Transfer, the proposed price therefor and the other
material terms upon which such disposition is proposed to be made.

 

(ii)           The Company
shall have the right, exercisable by written notice given by the Company to
Digital River within ten (10) business days after receipt of such Transfer
Notice (the “Response Notice”), to
purchase all or any portion of the Shares specified in such Transfer Notice for
cash at the price per share specified in the Transfer Notice or, if
consideration other than cash is specified in the Transfer Notice, in an amount
equal to the Fair Market Value of such non-cash consideration.  Such right shall not be conditional upon the
Company having sufficient financing, at the time the right arises, to purchase
the Shares; provided, however, in any event the
Company is required to obtain such financing within the time period set forth
in Section 2.2(a)(iii).

 

(iii)          If the Company
exercises its right of first refusal hereunder, the closing of the purchase of
the Shares with respect to which such right has been exercised shall take place
within sixty (60) calendar days after the Company gives the Response Notice to
Digital River or, if later, within five (5) business days of the
determination of the Fair Market Value of any non-cash consideration.  Subject to Section 2.2(a)(iv),
upon exercise of its right of first refusal, the Company and Digital River
shall be legally obligated to consummate the purchase and sale contemplated
thereby and shall use their reasonable best efforts to secure any approvals
required in connection therewith.

 

6

 

(iv)         If the Company
does not exercise its right of first refusal hereunder within the time
specified for such exercise in Section 2.2(a)(ii) above or
close within the time period specified in Section 2.2(a)(iii) with
respect to all of the Shares specified in such Transfer Notice, Digital River
shall be free, during the period of ninety (90) calendar days following the
expiration of such time for exercise or close, as the case may be, to Transfer
or tender for Transfer those Shares specified in such Transfer Notice with
respect to which the Company has not exercised its first refusal rights to the
proposed purchaser or transferee specified in such Transfer Notice, and on
terms not materially less favorable to Digital River than the terms specified
in such Transfer Notice.

 

(b)  The Company may assign its right of first
refusal under this Section 2.2 to any other person or persons in
connection with any proposed Transfer.

 

2.3           Digital
River’s Other Obligations

 

(a)  Quorum.  So long as Digital River Beneficially Owns at
least one percent (1%) of the Total Current Voting Power of the Company,
Digital River, as the holder of Shares, shall be present, in person or by
proxy, at all meetings of stockholders of the Company so that all shares of
Voting Stock held by Digital River may be counted for purposes of determining
the presence of a quorum at such meetings.

 

(b)  No Exercise of Dissenter’s Rights.  Until the fifth (5th) anniversary
of the date of this Agreement, at any time that Digital River Beneficially Owns
at least one percent (1%) of the Total Current Voting Power of the Company,
Digital River agrees not to exercise any dissenter’s rights, if any, that it
may have under applicable law in connection with any merger, consolidation,
reorganization or other transaction that is approved by the Company’s Board of
Directors, regardless of the manner in which Digital River may have voted or
cast Shares of Voting Stock with respect to such transaction.

 

ARTICLE III

 

MISCELLANEOUS

 

3.1           Governing
Law; Jurisdiction and Venue

 

(a)  This Agreement is to be construed in
accordance with and governed by the internal laws of the State of Delaware
without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the
State of Delaware to the rights and duties of the parties.

 

(b)  Any legal action or other legal proceeding
relating to this Agreement or the enforcement of any provision of this
Agreement may be brought or otherwise commenced in any state or federal court
located in the State of Delaware.  Each
party to this Agreement:

 

(i)            expressly and
irrevocably consents and submits to the jurisdiction of each state and federal
court located in the State of Delaware (and each appellate court located in the
State of Delaware) in connection with any such legal proceeding, including to
enforce any settlement, order or award;

 

7

 

(ii)           agrees that
each state and federal court located in the State of Delaware shall be deemed
to be a convenient forum; and

 

(iii)          waives and
agrees not to assert (by way of motion, as a defense or otherwise), in any such
legal proceeding commenced in any state or federal court located in the State
of Delaware, any claim that such party is not subject personally to the
jurisdiction of such court, that such legal proceeding has been brought in an
inconvenient forum, that the venue of such proceeding is improper or that this
Agreement or the subject matter hereof or thereof may not be enforced in or by
such court.

 

(c)  Each party hereto agrees to the entry of an
order to enforce any resolution, settlement, order or award made pursuant to
this Section 3.1 by the state and federal courts located in the
State of Delaware and in connection therewith hereby waives, and agrees not to
assert by way of motion, as a defense, or otherwise, any claim that such
resolution, settlement, order or award is inconsistent with or violative of the
laws or public policy of the laws of the State of Delaware or any other
jurisdiction.

 

3.2           Assignment.  No
party may assign either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the other
parties.  Except as provided herein, any
assignment of rights or delegation of duties under this Agreement by a party
without the prior written consent of other parties shall be void ab
initio.  Subject to the preceding two
sentences, this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted assigns.

 

3.3           Entire
Agreement; No Third Party Beneficiaries; Amendment.  This Agreement, the Purchase Agreement, the
Investor Rights Agreement and the agreements referred to herein and therein
constitute the full and entire understanding and agreement between the parties
with regard to the subject hereof, and no party shall be liable or bound to any
other party in any manner by any warranties, representations or covenants
except as specifically set forth herein and in the agreements referred to
herein.  This Agreement is not intended
to confer upon any other person any rights or remedies hereunder.  Except as expressly provided herein, neither
this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.

 

3.4           Notices.   All notices and other communications
required or permitted hereunder shall be made in the manner and to the
addresses set forth in the Purchase Agreement.

 

3.5           Delays
or Omissions.  Except as expressly
provided herein, no delay or omission to exercise any right, power or remedy
accruing to a party under this Agreement shall impair any such right, power or
remedy nor shall it be construed to be a waiver of any such breach or default,
or an acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring.

 

8

 

3.6           Expenses.
 Except as otherwise specifically
provided herein, the Company and Digital River shall bear their own expenses
incurred with respect to this Agreement and the transactions contemplated
hereby.

 

3.7           Specific
Performance.  The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific intent or were otherwise breached. 
It is accordingly agreed that the parties shall not be entitled to an
injunction or injunctions, without bond, to prevent or cure breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof, this being in addition to any other remedy to which they may
be entitled by law or equity, and any party sued for breach of this Agreement
expressly waives any defense that a remedy in damages would be adequate.

 

3.8           Further
Assurances.  The parties hereto 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 or documents as any other party may reasonably request from time to
time in order to carry out the intent and purposes of this Agreement and the
consummation of the transactions contemplated hereby.  Neither the Company nor Digital River shall
voluntarily undertake any course of action inconsistent with satisfaction of
the requirements applicable to them set forth in this Agreement and each shall
promptly do all such acts and take all such measures as may be appropriate to
enable them to perform as early as practicable the obligations herein and
therein required to be performed by them.

 

3.9           Facsimile;
Counterparts.  This Agreement may be
executed by facsimile and in any number of counterparts, each of which shall be
enforceable against the parties actually executing such counterparts, and all
of which together shall constitute one instrument.

 

3.10         Severability.  In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided, that no such severability shall be
effective if it materially changes the economic impact of this Agreement on any
party.

 

3.11         Interpretation.

 

(a)  The various section headings are
inserted for purposes of reference only and shall not affect the meaning or
interpretation of this Agreement or any provision hereof. The definitions
contained in this Agreement are applicable to the singular as well as the
plural forms of such terms and to the masculine as well as to the feminine and
neuter genders of such terms.

 

(b)  Each party hereto acknowledges that it has
been represented by competent counsel and participated in the drafting of this
Agreement, and agrees that any applicable rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in connection with the construction or interpretation of this
Agreement.

 

(c)  When a reference is made in this Agreement to
a Section, Exhibit or Schedule, such reference shall be to a Section of,
Exhibit to or Schedule to this Agreement unless otherwise indicated.

 

9

 

(d)  Any reference to a statute, rule, regulation,
form or schedule under either the Exchange Act or the Securities Act
contained in this Agreement shall be deemed to include any to successor or
replacement statute, rule, regulation, form or schedule.

 

3.12         Attorneys’
Fees.  In any action at law or suit
in equity in relation to this Agreement, the prevailing party in such action or
suit shall be entitled to receive a reasonable sum for its attorneys’ fees and
all other reasonable costs and expenses incurred in such action or suit.

 

 

[Remainder of this page intentionally left blank.]

 

10

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.

 

	
   

  	
  INTRAWARE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter H. Jackson

  	
   

  
	
   

  	
   

  	
  Name: Peter H. Jackson

  	
   

  
	
   

  	
   

  	
  Title: Chairman, Chief Executive Officer
  and

  President

  	
   

  
	
   

  	
   

  
	
   

  	
  DIGITAL RIVER, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Thomas Donnelly

  	
   

  
	
   

  	
   

  	
  Name: Thomas Donnelly

  	
   

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  	
   

  
					

 

 

[Signature Page to Standstill and Stock
Restriction Agreement]

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