Document:

Exhibit
4.4

REGISTRATION RIGHTS
AGREEMENT

REGISTRATION RIGHTS AGREEMENT (the “Agreement”), dated as of
May 24, 2002, by and between Intraware, Inc., a Delaware corporation (the “Company”),
Commonwealth Associates, L.P., a New York limited partnership (“Commonwealth”),
and each of the investors identified on Schedule  1 hereto (as such schedule
may be updated from time to time) and signatory hereto (each, an “Investor”,
and collectively, the “Investors”) or their permitted assigns (each, a “Holder”,
and collectively, the “Holders”).

WHEREAS, this Agreement is being entered into in
connection with the financing extended by the Investors to the Company (the “Financing”)
in which, pursuant to the terms of subscription agreements entered into between
the Company and each Investor (collectively, the “Subscription  Agreement”),
each Investor will receive units (the “Units”) consisting of (a) shares
(the “Shares”) of common stock, par value $0.0001 per share (the “Common  Stock”),
and (b) four-year warrants (the “Warrants”) to purchase shares of Common
Stock (the “Warrant  Shares”) and in which, pursuant to the
terms of the Placement Agency Agreement, dated May 10, 2002, between
Commonwealth and the Company, Commonwealth will receive Warrants to purchase
shares of Common Stock (the “Agent’s Shares”); and

WHEREAS, the terms of the Financing contemplate
that the Conversion Shares, the Warrant Shares and the Agent’s Shares are
entitled to registration rights.

NOW, THEREFORE, in consideration of the foregoing and
the mutual promises, representations, warranties and covenants and agreements
contained herein, the Company and each of the Investors hereto, intending to be
legally bound hereby agree as follows:

I.              DEFINITIONS.

The following additional
definitions shall apply for purposes of this Agreement:

1.1           The
term “Holder” means Commonwealth or an Investor and any transferee or assignee
thereof to whom Commonwealth or an Investor, as applicable, assigns its rights
under this Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section  6.2.

1.2           The
term “Person” means an individual, a limited liability company, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization, a
government or any department or agency thereof.

1.3           The
term “Prospectus” means the Prospectus included in any Registration Statement
(including without limitation, a Prospectus that discloses information
previously omitted from a Prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act of
1933, as amended (the “1933  Act”)), as amended or supplemented by
any amendment or Prospectus supplement, including post-effective amendments,
and all materials incorporated by reference or explicitly deemed to be
incorporated by reference in such Prospectus.

 

 

1.4           The
terms “Register,” “Registered,” and “Registration” refer to a registration
effected by preparing and filing one or more Registration Statements (as
defined below) or similar document in compliance with the 1933 Act and Rule 415
thereunder or any successor rule providing for the offering for resale of
securities on a continuous or delayed basis (“Rule  415”), and the
declaration or ordering of effectiveness of such Registration Statement or
document by the United States Securities and Exchange Commission (the “SEC”).

1.5           The
term “Registrable  Securities” means (a) the Warrant Shares and any other
securities of the Company issuable upon the exercise of the Warrants, (b) the
Shares, (c) the Agent’s Shares and any other securities of the Company issuable
upon the exercise of the Warrants held by the Agent or its transferee or
assignee, and (d) any shares of capital stock or other securities issued or
issuable with respect to the Warrant Shares, the Shares or the Agent’s Shares
as a result of any stock split, stock dividend, recapitalization, exchange or
similar event or otherwise, without regard to any limitations on the exercise
of the Warrants; provided, however, that any securities deemed Registrable
Securities in accordance herewith shall cease to be Registrable Securities (i)
upon the sale of such securities pursuant to a Registration Statement, (ii)
upon the sale of such securities pursuant to Rule 144 promulgated under the 1933
Act, or (iii) on the date on which such securities become available for sale
under Rule 144(k).

1.6           The
term “Registration Statement” means a registration statement on Form S-1 or
Form S-3 or any similar or successor form then appropriate for or applicable to
the offer and sale of the Registrable Securities and filed under the 1933 Act.

II.            REGISTRATION.

2.1           Right to
Include Registrable Stock. 
If the Company proposes to register any of its securities under the 1933
Act in connection with the public offering of such securities solely for cash
(other than a registration on Form S-4, Form S-8, or any successor or similar
forms, the registration statement covering the shares underlying the Company’s
Series A Preferred Stock and Series B Preferred Stock outstanding on the date
hereof, or a registration statement filed pursuant to the Registration Rights
Agreement dated August 31, 2001 by and among the Company, Commonwealth and the
investors listed therein to cover the shares underlying warrants issued by the Company)
(a “Piggyback Registration”), 
whether for the account of the Company or otherwise, it will promptly,
but not later than thirty (30) days before the anticipated date of filing such
Registration Statement, give written notice to each Holder.  Upon the written request of any of the
Holders made within fifteen (15) days after the receipt of any such notice
(which request shall specify the Registrable Securities intended to be disposed
of by such Holders and the intended method of distribution thereof), the
Company will use its reasonable best efforts to effect the registration under
the 1933 Act of all Registrable Securities which the Company has been requested
to register by any of the Holders in accordance with the intended methods of
distribution specified in such request; provided, however, that (a) if, at any
time after giving written notice of its intention to register any securities
and prior to the effective date of the Registration Statement filed in
connection with such registration, the Company determines for any reason not to
proceed with such registration, the Company may, at its election, give written
notice of such determination to the Holders and, thereupon, will be relieved of
its obligation to register any Registrable Securities in connection with such
registration, and (b) in case of a determination by the Company to delay
registration of its securities, the Company will be permitted to delay the
registration of Registrable Securities for the same period as the delay in 

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registering such other securities; provided, however,
that the provisions of this Article II will not be deemed to limit or otherwise
restrict the rights of the Holders under Article III.

2.2           Mandatory
Registration;Liquidated Damages.

(a)           Notwithstanding the foregoing, the
Company shall prepare and file with the SEC on or before the date that is
twenty (20) days from the Initial Closing (as defined in the Subscription
Agreement) (the “Filing Deadline”), a Registration Statement or
Registration Statements, as necessary, on Form S-3 covering the resale of all
of the Holders’ 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 2.5. The Company shall use its reasonable
best efforts to cause such Registration Statement to be declared effective by
the SEC as promptly as practicable, but in no event later than sixty (60) days after
the Initial Closing if the Registration Statement is not reviewed by the staff
of the SEC, or if the Registration Statement is so reviewed, one hundred twenty
(120) days after the Initial Closing (the “Effectiveness Deadline”).

(b)           In the event that (i) the
Registration Statement to be filed by the Company pursuant to Section 2.2(a)
above is not filed with the Commission on or prior to the Filing Deadline, (ii)
such Registration Statement is not declared effective by the Commission on or
prior to the Effectiveness Deadline, (iii) such Registration Statement is not
maintained as effective by the Company for the period set forth in Section 3.1
below or (iv) the amendment to the Registration Statement or the additional
Registration Statement referred to in Section 2.6 below is not filed within
fifteen (15) business days as set forth therein (each a “Registration
Default”) then the Company will pay the Holders (pro rated on a daily
basis), as liquidated damages for a Registration Default and not as a penalty
two percent (2%) of the purchase price of the Units purchased from the Company
and held by the Holders at the time of and during the pendency of such
Registration Default for each month that one or more Registration Defaults are
then in existence, subject to a cap, in the case of failure to maintain
effectiveness only, of twenty percent (20%) of the purchase price of the
Units.  Such payment of the liquidated
damages shall be made to the Holders in cash, within five (5) calendar days of
demand, provided, however, that the payment of such liquidated damages shall
not relieve the Company from its obligations to register the Shares pursuant to
this Section.  Notwithstanding the
foregoing, in the event that the Holder holds Agent’s Warrants, the two percent
(2%) penalties and the twenty percent (20%) cap described above shall not be
payable in cash but shall be effected as a reduction in the exercise price of
the Agent’s Warrants.

(c)           If the Company does not remit the
payment to the Holders as set forth above, the Company will pay the Holders
reasonable costs of collection, including attorneys’ fees, in addition to the
liquidated damages. The registration of the Shares pursuant to this provision
shall not affect or limit the Holders’ other rights or remedies as set forth in
this Agreement.

2.3           Priority.  If the managing underwriter for a
registration (other than with respect to a Registration Statement filed
pursuant to Section 2.2) involving an underwritten offering advises the Company
in writing that, in its opinion, the number of securities of the Company
(including without limitation, Registrable Securities) requested to be included
in such registration by the holders thereof 

 

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exceeds the number of securities of the Company (the “Sale
Number”) which can be sold in an orderly manner in such offering within a
price range acceptable to the Company, the Company will include (a) first, all
securities of the Company that the Company proposes to register for its own
account, and (b) second, to the extent that the number of securities of the
Company to be included by the Company is less than the Sale Number, a number of
the Registrable Securities equal to the number derived by multiplying (i) the
difference between the Sale Number and the securities proposed to be sold by
the Company, and (ii) a fraction the numerator of which is the number of
Registrable Securities originally requested to be registered by the Holders,
and the denominator of which shall be the aggregate number of all securities
requested to be registered by all holders of the Company’s securities (other
than securities being registered by the Company itself).  The Company hereby agrees that it will not
grant registration rights to any other holder that are more favorable to such
holder than the registration rights granted hereunder.

2.4           Legal
Counsel.  Subject to Section
6.1 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 Article II (“Legal Counsel”), which shall be
Loeb & Loeb LLP or such other counsel as thereafter designated by the
holders of a majority of the Registrable Securities.  The Company shall reasonably cooperate with Legal Counsel in
performing the Company’s obligations under this Agreement.

2.5           Ineligibility
of Form S-3.  In the event
that Form S-3 is not available for the registration of the resale of
Registrable Securities hereunder, the Company shall (a) register the resale of
the Registrable Securities on another appropriate form, and (b) undertake to
register the resale of the Registrable Securities on Form S-3 as soon as such
form is available; provided, however, 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.

2.6           Sufficient
Number of Shares Registered. 
In the event the number of shares available under a Registration
Statement filed pursuant to Section 2.2 is insufficient to cover all of the
Registrable Securities which such Registration Statement is required to cover,
the Company shall amend the 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, 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 cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof.  For purposes of the foregoing provision, the
number of shares available under a Registration Statement shall be deemed
“insufficient to cover all of the Registrable Securities” if the number of
Registrable Securities issued or issuable upon exercise of the Warrants covered
by such Registration Statement is greater than the number of shares of Common
Stock available for resale under the Registration Statement to cover shares
issued or issuable upon exercise of the Warrants.  For purposes of the calculation set forth in the foregoing
sentence, any restrictions on the exercise of the Warrants shall be disregarded
and such calculation shall assume that the Warrants are then exercisable for or
convertible into shares of Common Stock at the then prevailing applicable
Exercise Price (as defined in the Warrants).

 

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III.           OBLIGATIONS
OF THE COMPANY.

Whenever required under
this Agreement to effect the registration of any Registrable Securities, the
Company will, as expeditiously as possible, fulfill the following obligations:

3.1           Registration
Statement.  The Company shall
promptly prepare and file with the SEC a Registration Statement with respect to
the Registrable Securities (but in no event later than the Filing Deadline) and
use its best efforts to cause such Registration Statement to become effective (but
in no event later than the applicable Effectiveness Deadline).  The Company will use its reasonable best
efforts to keep such Registration Statement effective for up to three (3) years
from its effective date, but not in any event after such securities cease being
Registrable Securities (the “Registration Period”).  The Registration Statement (including 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.  The Company shall submit to
the SEC, within two (2) business days, unless Legal Counsel withholds approval
as provided in 3.3, 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 the 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 2 business days after the submission of such
request. Within three (3) business days
after the Registration Statement which includes Registrable Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel
selected by the Company to deliver, to the transfer agent for the Registrable
Securities (with copies to the Investors whose Registrable Securities are
included in such Registration Statement), an opinion of such counsel in the
form attached hereto as Exhibit A.

3.2           Registration
Statement Amendments and Supplements.  The Company shall prepare and file with the SEC such amendments
and supplements to such Registration Statement and the Prospectus used in
connection with such Registration Statement as may be necessary to comply with
the provisions of the 1933 Act with respect to the disposition of all
Registrable Securities 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. 
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 3.2) 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.

3.3           Legal
Counsel.  The Company shall
(a) permit Legal Counsel to review and comment upon (i) those sections of a
Registration Statement relating to the Investors at least five (5) business
days prior to its filing with the SEC, and (ii) all other sections of a
Registration Statement and all amendments and supplements to all Registration
Statements, which are applicable to the Investors (except for Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any
similar or successor report and registration statements on Form S-8) at least
four (4) business days prior to their filing with the SEC, and (b) not file any
document in a form to which Legal Counsel reasonably objects.  The Company shall not submit a request for
acceleration of the 

 

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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, (a)
any correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to any Registration Statement, (b) 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 and
all exhibits and (c) upon the effectiveness of any Registration Statement, one
copy of the Prospectus included in such Registration Statement and all
amendments and supplements thereto.  The
Company shall reasonably cooperate with Legal Counsel in performing the Company’s
obligations pursuant to this Article III.

3.4           Notification.  Within two (2) business days after the
Company’s receipt of notice of the following, give notice to the Holders and
Legal Counsel (a) when the Registration Statement or any post-effective
amendment has been declared effective, (b) of the issuance by the SEC or any
other federal or state governmental authority of any stop order or other
suspension of the effectiveness of the Registration Statement, or the
suspension of the qualification of any of the Registrable Securities for sale
in any jurisdiction, or the initiation or threatening of any proceedings for
that purpose, (c) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, (d) of the
occurrence of (but not the nature of or details concerning) a Material Event
(defined in Section 3.7), and (e) of the determination by the Company that a
post-effective amendment to the Registration Statement will be filed with the
SEC, which notice may, at the discretion of the Company (or as required
pursuant to Section 3.7), state that it constitutes a Deferral Notice, in which
event the provisions of Section 3.7  shall apply.

3.5           Prospectuses.  The Company shall deliver to each Holder in
connection with any sale of Registrable Securities pursuant to the Registration
Statement, without charge, as many copies of the Prospectus or Prospectuses
relating to such Registrable Securities (including each preliminary Prospectus)
and any amendment or supplement thereto as such Holder may reasonably request,
and the Company hereby consents (except during such periods that a Deferral
Notice is outstanding and has not been revoked) to the use of such Prospectus
or each amendment or supplement thereto by each Holder in connection with any
offering and sale of the Registrable Securities covered by such Prospectus or
any amendment or supplement thereto in the manner set forth therein.

3.6           Blue Sky
Laws.  The Company shall,
prior to any public offering of the Registrable Securities pursuant to the
Registration Statement, register or qualify or cooperate with the Holders in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and
sale under the securities or “Blue Sky” laws of such jurisdictions within the
United States as any Holder reasonably requests in writing, and keep each such
registration or qualification (or exemption therefrom) effective during the
Registration Period in connection with such Holder’s offer and sale of
Registrable Securities pursuant to such registration or qualification (or
exemption therefrom) and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of such Registrable
Securities in the manner set forth in the Registration Statement and the
related Prospectus; provided, however, that the Company will not be required to
(a) qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for this
Agreement, or (b) take any action that would subject it to general service of
process in suits or to taxation in any such jurisdiction where it is not 

 

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then so subject. 
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 threat of any proceeding for such purpose.

3.7           Stop Orders;
Material Events.  The Company
shall use commercially reasonable 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.  Upon (a) any
issuance by the SEC of a stop order or other suspension of the effectiveness of
the Registration Statement, or the suspension of the qualification of any of
the Registrable Securities for sale in any jurisdiction despite the Company’s
commercially reasonable efforts to prevent such stop order or suspension, or
the initiation of proceedings with respect to the Registration Statement under
Section 8(d) or 8(e) of the 1933 Act; (b) the occurrence of any event or the
existence of any fact (a “Material Event”) as a result of which the
Registration Statement shall contain any 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 not misleading, or any Prospectus shall contain any
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 the light
of the circumstances under which they were made, not misleading; or (c) the
occurrence or existence of any pending corporate development, public filing
with the SEC or other similar event with respect to the Company that, in the
reasonable discretion of the Company, makes it appropriate to suspend the
availability of the Registration Statement and the related Prospectus, the
Company shall (i) in the case of clause (b) above, subject to the next
sentence, as promptly as practicable prepare and file, if necessary pursuant to
applicable law, a post-effective amendment to such Registration Statement or a
supplement to the related Prospectus or any document incorporated therein by
reference or file any other required document that would be incorporated by
reference into such Registration Statement and Prospectus so that such
Registration Statement does not contain any 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 not misleading, and such Prospectus does not
contain any 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 the light of the circumstances under which they were made, not misleading,
and, in the case of a post-effective amendment to a Registration Statement,
subject to the next sentence, use its reasonable efforts to cause it to be
declared effective as promptly as is practicable; and (ii) give notice to the
Holders and Legal Counsel that the availability of the Registration Statement
is suspended (a “Deferral Notice”) and, upon receipt of any Deferral
Notice, each Holder agrees not to sell any Registrable Securities pursuant to
the Registration Statement until such Holder’s receipt of copies of the
supplemented or amended Prospectus provided for in clause (i) above, or until
it is advised in writing by the Company that the Prospectus may be used, and
has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in such Prospectus.  The Company will use commercially reasonable
efforts to ensure that the use of the Prospectus may be resumed (x) in the case
of clause (a) above, as promptly as is practicable, (y) in the case of clause
(b) above, as soon as, in the sole judgment of the Company, public disclosure
of such Material Event would not be prejudicial to or contrary to the interests
of the Company or, if necessary to avoid unreasonable burden or expense, as
soon as practicable thereafter, and (z) in the case of clause (c) above, as
soon as, in the discretion of the Company, such suspension is no longer
appropriate (such period, during which the availability of the Registration
Statement and any Prospectus is suspended being a 

 

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“Deferral Period”).  Notwithstanding the foregoing, no Deferral Period instituted
pursuant to clause (b) or clause (c) above shall last for a period of time in
excess of thirty (30) days from the date of the Material Event or other
occurrence or state of facts on account of which such Deferral Period is
instituted, and the Company shall institute no more than one (1) Deferral
Period in the aggregate pursuant to clause (b) or clause (c) above in any
consecutive twelve (12) month period. 
The Company shall use commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of a Registration
Statement or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction in which they have been qualified for sale, in either case as
promptly as practicable.

3.8           Accountants
Letters and Legal Opinions. 
At the reasonable request of any Holder and at the expense of the
Company 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 any of the Holders may reasonably request (if the offering
contemplated by such Registration Statement is an underwritten offering) (a) 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, and (b) 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 to underwriters in an underwritten public
offering, addressed to the Holders.

3.9           Listing or
Quotation.  The Company shall
use its reasonable best efforts to either (a) 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 (b) secure designation and
quotation of all the Registrable Securities covered by the Registration
Statement on the Nasdaq National Market or The New York Stock Exchange, Inc.,
or, if the Company is unsuccessful in satisfying the preceding clause (a) or
(b), (c) the Company shall secure the inclusion for quotation on The American
Stock Exchange, Inc., or The Nasdaq SmallCap Market, for such Registrable
Securities and, without limiting the generality of the foregoing, to arrange
for at least two (2) 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 3.9.

3.10         Access to
Information.  The Company
shall make documents, files, books, records, officers, directors and employees
of the Company reasonably available to any Holder, Legal Counsel and one firm
of accountants or other agents retained by the Holders and provided the
underwriters, if any, shall have agreed to be bound by the provisions of this
Section 3.10, to such underwriters (collectively the “Inspectors”), and
make such other accommodations as are reasonably necessary for the Inspectors,
if any, to perform a due diligence review of the Company; provided, however,
that all such information (“Confidential Information”) will be kept
confidential and not utilized by the Inspectors except as contemplated herein
and except as required by law or court order. 
The term “Confidential Information” does not include information that
(a) is already in possession of such other party (other than that which is
subject to another confidentiality agreement), (b) becomes generally available
to the public, or (c) becomes available on a non-confidential basis from a
source other than the Company.  Each
Holder agrees that it shall, upon learning that disclosure of such Confidential
Information is sought in or by a court or governmental body of competent
jurisdiction or 

 

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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 information
deemed confidential.

3.11         Non-Disclosure.  The Company shall hold in confidence and not
make any disclosure of information concerning any Holder provided to the
Company unless (a) disclosure of such information is necessary to comply with
federal or state securities laws, (b) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in any Registration
Statement, (c) 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, (d) such information has been made generally
available to the public other than by disclosure in violation of this Agreement
or any other agreement, or (e) such Holder consents to the form and content of
any such disclosure. The Company agrees that it shall, upon learning that
disclosure of such information concerning any 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.

3.12         Certificates.  The Company shall cooperate with each of the
Holders who hold Registrable Securities being offered, and to the extent
applicable, 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.

3.13         Transfer
Agent and Registrar.  The
Company shall provide a transfer agent and registrar of all such Registrable
Securities not later than the effective date of such Registration Statement.

3.14         Amendments
and Supplements Requested by Holders.  If requested by any Holder, the Company shall (a) as soon as
practicable incorporate in a Prospectus supplement or post-effective amendment
such information as such 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 and any other terms of the
offering of the Registrable Securities to be sold in such offering, (b) as soon
as practicable make all required filings of such Prospectus supplement or
post-effective amendment after being notified of the matters to be incorporated
in such Prospectus supplement or post-effective amendment, and (c) supplement
or make amendments to any Registration Statement if reasonably requested by any
Holder of such Registrable Securities.

3.15         Additional
Registrations and Approvals. 
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.

3.16         Earnings
Statements.  The Company
shall make generally available to its security holders as soon as practical,
but not later than ninety (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 

 

9

 

a twelve (12) month period beginning not later than
the first day of the Company’s fiscal quarter next following the effective date
of the Registration Statement, provided that the Company shall be deemed to
satisfy its obligations under this Section 3.16 if it timely makes all required
filings under the 1934 Act and does not change its fiscal year.

3.17         SEC
Compliance.  The Company
shall otherwise comply with all applicable rules and regulations of the SEC in
connection with any registration hereunder.

3.18         Confirmation
of Registration.  Within two (2)
business days after a Registration Statement which covers applicable
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 and to
Legal Counsel) confirmation that such Registration Statement has been declared
effective by the SEC in the form attached hereto as Exhibit B.

3.19         Actions for
Public Offering.  The Company
shall provide such opinions, certifications, indemnifications, and take such
other actions, including without limitation, entering into such agreements
(including underwriting agreements), as are reasonably required and
appropriate, to permit the Holders to make a public offering of the Registrable
Securities requested to be registered.

3.20         Rule 144
Requirements. For so long as the Registrable Securities are
outstanding, the Company covenants that it shall file the reports required to
be filed by it under the 1933 Act and the 1934 Act, and the rules and
regulations adopted by the SEC thereunder, provided, however, the Company may
delay any such filing but only pursuant to Rule 12b-25 under the 1934 Act, and
the Company shall take such further action as any Holder of Registrable
Securities may reasonably request (including without limitation, promptly
obtaining any required legal opinions from Company counsel necessary to effect
the sale of Registrable Securities under Rule 144 and paying the related fees
and expenses of such counsel), all to the extent required from time to time to
enable such Holder to sell Registrable Securities without registration under
the 1933 Act within the limitation of the exemptions provided by (a) Rule 144
under the Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC.  Upon the request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.  If the Company fails to satisfy its
covenants and obligations under this Section 3.20, then it shall be in breach
of this Agreement (such a breach being a “Rule 144 Default”).

IV.           OBLIGATIONS
OF THE HOLDERS.

4.1           Furnish
Information.  The Company’s
obligation to cause any Registration Statement to become effective in
connection with distribution of any Registrable Securities pursuant to this
Agreement is contingent upon each Holder, with reasonable promptness,
furnishing to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such
securities, as is required  pursuant to Regulation
S-K promulgated under the 1933 Act, to effect the registration of the
Registrable Securities.  Each Holder
agrees, by acquisition of the Registrable Securities, that it shall not be
entitled to sell any of such Registrable Securities pursuant to the
Registration Statement or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company with all information required to be disclosed
in order to make the information 

 

10

 

previously furnished to the Company by such Holder not
misleading in a material respect and any other information regarding such
Holder and the distribution of such Registrable Securities as the Company may
from time to time reasonably request. 
Any sale of any Registrable Securities by any Holder shall constitute a
representation and warranty by such Holder that the information relating to
such Holder and its plan of distribution is as set forth in the Prospectus
delivered by such Holder in connection with such disposition, that such
Prospectus does not as of the time of such sale contain any untrue statement of
a material fact relating to or provided by such Holder or relating to its plan
of distribution and that such Prospectus does not as of the time of such sale
omit to state any material fact relating to or provided by such Holder or
relating to its plan of distribution necessary to make the statements in such
Prospectus, in the light of the circumstances under which they were made, not
misleading.

V.            INDEMNIFICATION.

In the event of any
registration under this Agreement:

5.1           Indemnification
by the Company.  The Company
will indemnify and hold harmless each Holder and its officers, directors,
partners and affiliates (and their officers, directors and partners), any
underwriter (as defined in the 1933 Act) for each Holder and each person (and
its officers, directors, partners and affiliates), if any, who controls any
Holder or underwriter within the meaning of the 1933 Act or the 1934 Act (each
a “Company Indemnified Person”), against any losses, claims, damages,
expenses or liabilities, joint or several, or actions in respect thereof (“Losses”)
to which they may become subject under the 1933 Act, the 1934 Act, or other
federal or state law, insofar as such Losses arise out of or are based upon any
of the following statements, omissions or violations (collectively a “Violation”):
(a) any untrue statement or alleged untrue statement of a material fact
contained in such Registration Statement, including any preliminary Prospectus
or final Prospectus contained therein or any amendments or supplements thereto,
(b) the omission or alleged omission to state therein 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, or (c)
any violation or alleged violation by the Company of the 1933 Act, the 1934
Act, any state securities law, or any rule or regulation promulgated under the
1933 Act, the 1934 Act, or any state securities law, and the Company will pay
to each such Company Indemnified Person, as incurred, any legal or other
expenses reasonably incurred by or on behalf of him in connection with
investigating or defending any such Loss; provided, however, that the indemnity
agreement contained in this Section 5.1 shall not apply to amounts paid in
settlement of any such Loss if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld), nor will the
Company be liable in any such case for any such Loss to the extent that it
arises out of or is based upon (a) a Violation which occurs solely as the
result of the written information furnished by any Holder, underwriter or
controlling person seeking indemnification hereunder, as applicable, expressly
for inclusion in the Registration Statement, or (b) with respect to any
underwriter and controlling person of such underwriter (and their respective
officers and directors), a Violation which results from the fact that there was
not sent or given to a person who bought Registrable Securities, at or prior to
the written confirmation of the sale, a copy of the final Prospectus, as then
amended or supplemented, if the Company had previously furnished copies of such
Prospectus hereunder and such Prospectus corrected the misstatement or omission
forming the basis of the Violation.

 

11

 

5.2           Indemnification
by Holders.  Each Holder will
indemnify and hold harmless the Company, each of its directors, each of its officers
who has signed the Registration Statement, each person, if any, who controls
the Company within the meaning of the 1933 Act, any underwriter and any
controlling person of any such underwriter or other holder (each a “Holder
Indemnified Person”), against any Losses to which any of the foregoing
persons may become subject, under the 1933 Act, the 1934 Act, or other federal
or state law, insofar as such Losses arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs solely as a result of the written information furnished by
each Holder expressly for inclusion in the applicable Registration Statement,
and such Holder will pay, as incurred, any legal or other expenses reasonably
incurred by any Holder Indemnified Person intended to be indemnified pursuant
to this Section 5.2, in connection with investigating or defending any such
Loss; provided, however, that any Holder’s liability pursuant to this Section
5.2 shall be limited to the amount of the net proceeds received by such Holder
from the sale of the Registrable Securities sold by it, and further provided
that the indemnity agreement contained in this Section 5.2 does not apply to
amounts paid in settlement of any such Loss if such settlement is effected
without the consent of such Holder, which consent shall not be unreasonably
withheld.

5.3           Indemnification
Procedures.  Promptly after
receipt by an indemnified party under this Article V of notice of the
commencement of any action (including any governmental action), such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this Article V, deliver to the indemnifying party a
written notice of the commencement of such action and the indemnifying party
will 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 the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an indemnified party (together with all other
indemnified parties which may be represented without conflict by one counsel)
will have the right to retain one separate counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of the indemnified
party by the counsel retained by the indemnifying party would be inappropriate
due to actual or potential differing interests between the indemnified party
and any other party represented by such counsel in the same proceeding.  If the indemnifying party shall fail to
defend the action, or conducts a defense which is not reasonably adequate in
light of the circumstances, the indemnified party may conduct its own defense
and shall be entitled to reimbursement for the costs of such defense.  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 party under this Agreement, except to the extent that the
indemnifying party is materially prejudiced by such failure.  The omission so to deliver written notice to
the indemnifying party does not relieve it of any liability that it may have to
any indemnified party otherwise than under this Agreement.  No indemnifying party under this Agreement
will enter into any settlement or consent to any entry of judgment without the
indemnified party’s written consent which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to the indemnified party
of a release from all liability in respect of such claim or litigation.

5.4           Contribution.  If the indemnification provided for in this
Article V is held by a court of competent jurisdiction to be unavailable to an
indemnified party or is insufficient to indemnify an indemnified party with
respect to any Loss, then the indemnifying party, in lieu of or in addition to,
as appropriate, indemnifying such indemnified party hereunder, will contribute
to the amount paid or payable by such indemnified party as a result of such
Loss in such proportion as is appropriate to 

 

12

 

reflect the relative fault of the indemnifying party
on the one hand and of the indemnified party on the other in connection with
the statements or omissions that resulted in such Loss as well as any other
relevant equitable considerations.  The
relative fault of the indemnifying party and of the indemnified party will be
determined 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.  The obligation of any Holder to make a
contribution pursuant to this Section 5.4  shall be limited to the net proceeds
received by such Holder from the sale of the Registrable Securities sold by it,
less any amounts paid pursuant to Section 5.2. 
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 Article V to the fullest extent permitted by law; provided, however,
that: (a) 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 (b) 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.

5.5           Survival.  The indemnity and contribution provisions
contained in this Article V  shall remain operative and in full force
and effect regardless of (a) any termination of this Agreement, (b) any
investigation made by or on behalf of any Holder or any person controlling any
Holder, or the Company, or the Company’s officers or directors or any person
controlling the Company, and (c) the sale of any Registrable Securities by any
Holder.

VI.           MISCELLANEOUS.

6.1           Expenses.  The Company shall bear all fees and expenses
incurred in connection with the performance by the Company of its obligations
under this Agreement (including without limitation, all registration and filing
fees, fees with respect to filings required to be made with the National
Association of Securities Dealers, Inc., fees and expenses of compliance with
securities or “Blue Sky” laws, printing expenses, messenger, telephone and
distribution expenses associated with the preparation and distribution of any
Registration Statement, all fees and expenses associated with the listing of
any Registrable Securities on any securities exchange or exchanges, the fees
and disbursements of counsel for the Company and its accountants, any
underwriting fees and the reasonable fees and expenses of one counsel to the
Holders, not to exceed an amount equal to $25,000, whether or not the
Registration Statement is declared effective, and transfer agent fees.  Notwithstanding the provisions of this
Section 6.1, each seller of Registrable Securities shall pay all underwriting
fees and expenses, selling commissions and stock transfer and documentary stamp
taxes, if any, applicable to any Registrable Securities registered and sold by
such seller and all registration expenses to the extent the Company is
prohibited from paying such expenses under applicable law.

6.2           Assignment
of Registration Rights.  The
rights under this Agreement shall be automatically assignable by any Holder to
any transferee of all or any portion of Registrable Securities if: (a) such
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; (b) the 

 

13

 

Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of (i) the name and
address of such transferee or assignee, and (ii) the securities with respect to
which such registration rights are being transferred or assigned; (c)
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; (d) at or before the time the Company
receives the written notice contemplated by clause (b) of this sentence the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions contained herein and (e) at least 100,000 shares of Common Stock
(or the equivalent number of Warrants that are exercisable for that number of
shares of Common Stock) are transferred by such Holder to the transferee of the
Registrable Securities contemplated by this Section 6.2.

VII.          GENERAL.

7.1           Notice.  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: (a)
upon receipt, when delivered personally, (b) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party), or (c) one (1)
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:

If to the Company:

 

Intraware, Inc.

25 Orinda Way

Orinda, CA 94563

Telephone:  (925) 253-4500

Facsimile:  (925) 253-4541

Attention:  General Counsel

With a copy to (which
shall not constitute notice):

Wilson Sonsini Goodrich
& Rosati, Professional Corporation

650 Page Mill Road

Palo Alto, CA
94304-1050

Telephone:  (650) 493-9300

Facsimile:  (650) 493-6811

Attention: Adam R.
Dolinko, Esq.

If to a Holder, to its
most recent address and facsimile number provided to the Company five (5) days
prior to the effectiveness of any change thereof, together with a copy to
Commonwealth Associates, L.P., 830 Third Avenue, New York, NY  10022.

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 

 

14

 

service, receipt by
facsimile or receipt from an overnight courier service in accordance with
clause (a), (b) or (c) above, respectively.

7.2           Owner of
Registrable Securities.  A
Person is deemed to be a holder of Registrable Securities whenever such Person
owns or is deemed to be owner of record of 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.

7.3           Consents.  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, determined as if all the Warrants then outstanding have been
exercised for Registrable Securities without regard for any limitations on
exercise of the Warrants.

7.4           Additional
Rights.  From and after the
date of this Agreement, the Company shall not without the prior written consent
of holders of majority of the outstanding Registrable Securities enter into any
agreement with any holder or prospective holder of any securities of the
Company providing for the grant to such holder of rights superior to those
granted herein.

7.5           Specific
Performance.  Each of the
parties hereto acknowledges and agrees that the breach of this Agreement would
cause irreparable damage to the other parties hereto and that the other parties
hereto will not have an adequate remedy at law.  Therefore, the obligations of each of the parties hereto under
this Agreement shall be enforceable by a decree of specific performance issued
by any court of competent jurisdiction, and appropriate injunctive relief may
be applied for and granted in connection therewith.  Such remedies shall, however, be cumulative and not exclusive and
shall be in addition to any other remedies which any party may have under this
Agreement or otherwise.

7.6           Entire
Agreement; Amendment.  This
Agreement supersedes all other prior oral or written agreements among the
parties, their affiliates and persons acting on their behalf with respect to
the matters discussed herein, and this Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the
matters covered herein and therein.  No
provision of this Agreement may be amended or waived other than by an
instrument in writing signed by the Company and the Holders of at least a
majority of the Registrable Securities then outstanding.  Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Securities whose
securities are being sold pursuant to the Registration Statement and that does
not directly or indirectly affect the rights of other Holders of Registrable
Securities may be given by Holders of at least a majority of the Registrable
Securities being sold by such Holders pursuant to such Registration
Statement.  Each Holder of Registrable
Securities outstanding at the time of any such amendment, modification,
supplement, waiver or consent or thereafter shall be bound by any such
amendment, modification, supplement, waiver or consent effected pursuant to
this Section 7.6, whether or not any notice, writing or marking indicating such
amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.

7.7           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 

 

15

 

remainder of this Agreement in that jurisdiction or
the validity or enforceability of any provision of this Agreement in any other
jurisdiction.

7.8           Termination.  This Agreement and the obligations of the
parties hereunder shall terminate as of the end of the Registration Period
except for Article V hereof which shall survive and remain in full force and
effect in accordance with its terms.

7.9           Governing
Law; Jurisdiction.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York without regard to principles of conflicts of laws.  Any action or proceeding seeking to enforce
any provision of, or based on any right arising out of, this Agreement must be
brought against any of the parties in the courts of the State of New York or,
if it has or can acquire jurisdiction, in the United States District Court for
the Southern District of New York, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.  Process in any action or proceeding referred
to in the preceding sentence may be served on any party anywhere in the world.

7.10         Headings.  The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.

7.11         Successors
and Assigns; No Third Party Beneficiaries.  Subject to Section 6.2, this Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns.  Nothing in this
Agreement shall create or be deemed to create any third-party beneficiary
rights in any person not a party to this Agreement except as provided below and
in Section 6.2.  Upon any assignment,
the references in this Agreement to any Holder shall also apply to any such
assignee unless the context otherwise requires.

7.12         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.

7.13         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.

7.14         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.

[remainder of page
intentionally left blank]

 

16

 

IN WITNESS WHEREOF, the parties hereto have executed or have caused this
Registration Rights Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first written above.

 

	
   

  	
  INTRAWARE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter H.
  Jackson

  
	
   

  	
   

  	
  Name:  Peter H. Jackson

  
	
   

  	
   

  	
  Title: Chief
  Executive Officer

  

 

 

The foregoing Agreement
is hereby accepted as of the date

first above
written:

 

 

 

	
  By:

  	
   

  	
   

  
	
  Investor Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  COMMONWEALTH
  ASSOCIATES, L.P.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Commonwealth
  Associates Management Company, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Joseph Wynne

  	
   

  
	
   

  	
  Name:  Joseph Wynne

  	
   

  
	
   

  	
  Title: Secretary

  	
   

  

 

 

17

 

SCHEDULE I

 

	
  No.

  	
   

  	
  Name

  	
   

  	
  Address

  	
   

  	
  Number of Shares

  	
   

  	
  Number of Warrants

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Apodaca Investment Partners, LP

  	
   

  	
  505 Montgomery, Suite 1100

  San Francisco, CA  94111

  	
   

  	
  100,000

  	
   

  	
  20,000

  	
   

  
	
  2.

  	
   

  	
  Passport I, LP

  	
   

  	
  One Sansome St., 39th
  Floor

  San Francisco, CA  94104

  	
   

  	
  250,000

  	
   

  	
  50,000

  	
   

  
	
  3.

  	
   

  	
  Cranshire Capital, L.P.

  	
   

  	
  666 Dundee Road, Suite
  1901

  Northbrook, IL  60062

  	
   

  	
  250,000

  	
   

  	
  50,000

  	
   

  
	
  4.

  	
   

  	
  Micro Capital Fund,
  Ltd.

  	
   

  	
  410 Jessie St., #1002

  San Francisco, CA  94103

  	
   

  	
  175,000

  	
   

  	
  35,000

  	
   

  
	
  5.

  	
   

  	
  Micro Capital Fund,
  L.P.

  	
   

  	
  410 Jessie St., #1002

  San Francisco, CA  94103

  	
   

  	
  325,000

  	
   

  	
  65,000

  	
   

  
	
  6.

  	
   

  	
  Primarius Partners LP

  	
   

  	
  One Montgomery, Suite
  3300

  San Francisco, CA  94104

  	
   

  	
  40,000

  	
   

  	
  8,000

  	
   

  
	
  7.

  	
   

  	
  Triton West Group

  	
   

  	
  601 Montgomery St.,
  Suite 1060

  San Francisco, CA  94111

  	
   

  	
  500,000

  	
   

  	
  100,000

  	
   

  
	
  8.

  	
   

  	
  Stacy B. and Thomas T.
  McCormick Family Trust

  	
   

  	
  17 Camino Encinas

  Orinda, CA  94563

  	
   

  	
  125,000

  	
   

  	
  25,000

  	
   

  
	
  9.

  	
   

  	
  Lloyd A. Moriber

  	
   

  	
  Palm Bay Towers

  720 NE 69th Street

  Miami, FL  33138

  	
   

  	
  25,000

  	
   

  	
  5,000

  	
   

  
	
  10.

  	
   

  	
  ComVest Venture
  Partners, LP

  	
   

  	
  830 Third Avenue

  New York, NY  10022

  	
   

  	
  250,000

  	
   

  	
  50,000

  	
   

  
	
  11.

  	
   

  	
  George M. Drysdale

  	
   

  	
  35B Pacific Plaza

  Ayala Ave.

  Makati, Phillippines

  	
   

  	
  200,000

  	
   

  	
  40,000

  	
   

  
	
  12.

  	
   

  	
  Robert Priddy

  	
   

  	
  3435 Kingsboro Road
  Apt. 1601

  Atlanta, GA  30326

  	
   

  	
  300,000

  	
   

  	
  60,000

  	
   

  
	
  13.

  	
   

  	
  Shea Ventures, LLC

  	
   

  	
  655 Brea Canyon Road

  Walnut, CA  91789

  	
   

  	
  250,000

  	
   

  	
  50,000

  	
   

  

 

18

 

	
  No.

  	
   

  	
  Name

  	
   

  	
  Address

  	
   

  	
  Number of Shares

  	
   

  	
  Number of Warrants

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Capital
  Ventures International

  	
   

  	
  c/o Heights Capital

  Management

  Attention:  Mike Mollen

  401 City Avenue, Suite 220

  Bala Cynwyd, PA 19004

  	
   

  	
  1,000,000

  	
   

  	
  200,000

  	
   

  
	
  15.

  	
   

  	
  Harvard
  Investments, Inc.

  	
   

  	
  7600
  E. Doubletree Ranch Rd. #220

  Scottsdale, AZ  85258

  	
   

  	
  20,000

  	
   

  	
  4,000

  	
   

  
	
  16.

  	
   

  	
  Harvard
  Developments Inc.

  	
   

  	
  2000-1874
  Scarth Street

  Regina, Saskatchewan, Canada

  S4P 4B3

  	
   

  	
  10,000

  	
   

  	
  2,000

  	
   

  
	
  17.

  	
   

  	
  Carol
  R. Hill Spousal Trust

  	
   

  	
  Suite
  29, First Floor

  Beckwith Mall

  Lower Broad Street

  BridgeTown, Barbados

  	
   

  	
  20,000

  	
   

  	
  4,000

  	
   

  
	
  18.

  	
   

  	
  Allan
  MacDonald and Eileen MacDonald JTWROS

  	
   

  	
  48
  Inverleith Place

  EH3 5QB Edinburgh Scotland,

  United Kingdom

  	
   

  	
  50,000

  	
   

  	
  10,000

  	
   

  
	
  19.

  	
   

  	
  Noam Gottesman and
  Geraldine Gottesman

  	
   

  	
  31 Phillimore Gardens

  London, W8 70G

  United Kingdom

  	
   

  	
  50,000

  	
   

  	
  10,000

  	
   

  
	
  20.

  	
   

  	
  Commonwealth
  Associates, L.P.

  	
   

  	
  830 Third Avenue

  New York, NY  10022

  	
   

  	
   

  	
   

  	
  354,240

  	
   

  
	
  21.

  	
   

  	
  Ladenburg Thalmann
  & Co. Inc.

  	
   

  	
  590 Madison Ave.

  New York, NY 10022

  	
   

  	
   

  	
   

  	
  18,000

  	
   

  
	
   

  	
   

  	
  TOTAL:

  	
   

  	
   

  	
   

  	
  3,940,00

  	
   

  	
  1,160,240

  	
   

  

 

19

 

EXHIBIT A

Form of Letter to Transfer Agent

[Transfer Agent]

Attn:

Re:          Intraware, Inc.

Ladies and Gentlemen:

 

                Reference is made to
(a) the Subscription Agreements between Intraware, Inc., a Delaware corporation
(the “Company”), and the investor parties thereto (the “Holders”) pursuant to
which the Company is issuing to the Holders shares of its common stock and
common stock purchase warrants (the Subscription Agreements”) and (b) the
Registration Rights Agreement dated May __, 2002 (the “Registration Agreement”)
by and among Company, Commonwealth Associates, L.P. and the Holders pursuant to
which the Company agreed to register such shares of common stock and the common
stock issuable upon exercise of the common stock purchase warrants (the “Common
Stock”).

 

                This letter shall
serve as our irrevocable authorization and direction to you (provided that you
are the transfer agent for the Company with respect to its Common Stock at such
time) to issue Common Stock from time to time upon notice from the
Company.  So long as you have previously
received (i) an opinion of the Company’s outside counsel substantially in the
form of Exhibit A attached hereto (the “Opinion”) (which the Company shall
direct be delivered to you by such outside counsel upon the effectiveness of
the registration statement covering resales of Common Stock) stating that a
registration statement covering resales of Common Stock has been declared
effective by the Securities and Exchange Commission under the Securities Act of
1933, as amended, (ii) a certification from the clearing broker for the Holders
as to compliance with the prospectus delivery requirements and as to the fact
that the sale of the Common Stock was made in compliance with the “Plan of
Distribution” section set forth in such registration statement (the “Broker
Certification”), (iii) a copy of such registration statement and (iv)
confirmation from the Company that sales are permitted under the registration
statement at that time, then certificates representing Common Stock sold
pursuant to such registration statement shall not bear any legend restricting
transfer of Common Stock thereby and should not be subject to any stop-transfer
restriction.  Provided, however, that if
you have not previously received a copy of the Opinion, the Broker
Certification and such registration statement, then the certificates representing
Common Stock shall bear the following legend:

 

THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION
FROM, OR IN A 

 

 

20

 

 

TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”).  THE SECURITIES
MAY NOT BE OFFERED, SOLD, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.

 

                Please be advised
that the Holders have relied upon this instruction letter as an inducement to
enter into the Subscription Agreements and the Registration Rights Agreement,
accordingly, each of the Holders is a third party beneficiary to these
instructions.

 

                Please execute this
letter in the space indicated to acknowledge your agreement to act in
accordance with these instructions.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  INTRAWARE, INC.

  

 

 

21

 

EXHIBIT B

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 those certain Subscription Agreements (the
“Subscription Agreements”) entered into by and among the Company and the
Investors named therein (collectively, the “Holders”) pursuant to which the
Company issued to the Holders 8% senior secured promissory notes and warrants
(the “Warrants”) to purchase shares of the Company’s common stock, par value
$0.0001 per share (the “Common Stock”) . 
Pursuant to the above mentioned agreements, the Company also has entered
into a Registration Rights Agreement with the Holders (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 issuable upon exercise of the
Warrants, under the 1933 Act of 1933, as amended (the “1933 Act”).  In connection with the Company’s obligations
under the Registration Rights Agreement, on ____________ ____, 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 Holders
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]

 

22Exhibit
10.1

INTRAWARE, INC.

SUBSCRIPTION
AGREEMENTmade as of this 24th day of May, 2002 between Intraware, Inc., a
corporation organized under the laws of the State of Delaware with offices at
25 Orinda Way, Orinda, California 94563 
(the “Company”), and the undersigned (the “Subscriber”).

WHEREAS,
the Company desires to issue in a private placement to “accredited investors”
(the “Placement”) a minimum of 30 (the “Minimum Offering”) and a
maximum of 60 (the “Maximum Offering”) units (“Units”) on the
terms and conditions set forth herein and in the exhibits hereto, and the
Subscriber desires to acquire the number of Units set forth on the signature
page hereof; and

WHEREAS
each Unit shall consist of: (i) that number of shares of the Company’s common
stock (the “Common Stock”) which is equal to $100,000 divided by the Per Share
Purchase Price (the “Shares”); and (ii) four-year warrants to purchase
the number of shares of Common Stock (the “Warrant Shares”) equal to 20%
of the Shares comprising a Unit at an exercise price per share equal to the
Market Price (the “Warrants”). The “Per Share Purchase Price”
shall be the lower of (i) $1.00 or (ii) 85% of the Market Price. The “Market
Price” shall be the average of the closing prices of the Common Stock for
the five consecutive trading days immediately preceding the initial closing of
the Placement (the “Initial Closing”); and

WHEREAS,
the Warrants shall be governed by the warrant agreement in the form attached
hereto as Exhibit B (the “Warrant Agreement”); and

WHEREAS,
the Shares and Warrant Shares are entitled to registration rights on the terms
set forth in this Subscription Agreement and in the Registration Rights
Agreement (the “Registration Rights Agreement”), attached hereto as Exhibit
C and incorporated herein by reference and made a part hereof; and

WHEREAS,
Commonwealth Associates, L.P. is acting as placement agent (the “Placement
Agent”) for the Placement pursuant to a placement agency agreement dated as
of May 10, 2002 between the Company and the Placement Agent (the “Agency
Agreement”); and

WHEREAS,
the Subscriber is delivering simultaneously herewith a completed confidential
investor questionnaire (the “Questionnaire”).

NOW,
THEREFORE, for and in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as follows:

I.                                         SUBSCRIPTION FOR UNITS AND REPRESENTATIONS BY AND COVENANTS
OF SUBSCRIBER

1.1           Subscription
for Units.  Subject to the
terms and conditions hereinafter set forth, the Subscriber hereby subscribes
for and agrees to purchase from the Company such number of Units as is set
forth upon the signature page hereof at a price equal to $100,000 per Unit and
the Company agrees to sell such Units to the Subscriber for said purchase
price.  The purchase price is payable by
certified or bank check made payable to “First Republic Trust

 

 

Company as escrow agent for Intraware, Inc.,” by wire
transfer of funds, or by cancellation of outstanding indebtedness
contemporaneously with the execution and delivery of this Subscription
Agreement.  First Republic Trust Company
(the “Escrow Agent”) shall act as such in accordance with the terms and
conditions of an escrow agreement to be entered into among the Placement Agent,
the Company and the Escrow Agent.

1.2           Reliance on
Exemptions.  The Subscriber
acknowledges that the Placement has not been reviewed by the United States
Securities and Exchange Commission (the “SEC”) or any state agency
because of the Company’s representations that this is intended to be a nonpublic
offering exempt from the registration requirements of the Securities Act of
1933, as amended (the “1933 Act”) and state securities laws.  The Subscriber understands that the Company
is relying in part upon the truth and accuracy of, and the Subscriber’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Subscriber set forth herein in order to determine the
availability of such exemptions and the eligibility of the Subscriber to
acquire the Units.

1.3           Investment
Purpose.  The Subscriber
represents that the Shares and the Warrants comprising the Units are being
purchased for its own account, for investment purposes only and not for
distribution or resale to others in contravention of the registration requirements
of the 1933 Act.  The Subscriber agrees
that it will not sell or otherwise transfer the Shares, the Warrants or the
Warrant Shares (collectively, the “Securities”) unless they are
registered under the 1933 Act or unless an exemption from such registration is
available.

1.4           Accredited
Investor.  The Subscriber
represents and warrants that it is an “accredited investor” as such term is
defined in Rule 501 of Regulation D promulgated under the 1933 Act, as
indicated by its responses to the Questionnaire, and that it is able to bear
the economic risk of any investment in the Units.  The Subscriber further represents and warrants that the
information furnished in the Questionnaire is accurate and complete in all
material respects.

1.5           Risk of
Investment.  The Subscriber
recognizes that the purchase of Units involves a high degree of risk in
that:  (i) an investment in the Company
is highly speculative and only investors who can afford the loss of their
entire investment should consider investing in the Company and the Securities;
(ii) transferability of the Securities is limited; and (iii) the Company may
require substantial additional funds to operate its business and there can be
no assurance that the Maximum Offering will be completed or that any other
funds will be available to the Company, in addition to all of the other risks
set forth in the Company’s SEC Documents (as defined in Section 2.5 hereof).

1.6           Information.  The Subscriber acknowledges that the Company
has made available for its review: (a) the Company’s Annual Report on Form 10-K
for the year ended February 28, 2001, (b) the Company’s Quarterly Reports on
Form 10-Q for the fiscal quarters ended May 31, 2001, August 31, 2001 and
November 30, 2001, (c) the Company’s Proxy Statement  for the annual meeting of shareholders held on August 15, 2001,
and (d) the Company’s Current Report on Form 8-K filed with the SEC on
September 21, 2001, and hereby represents that: (i) the Subscriber has been
furnished by the Company during the course of this transaction with all
information regarding the Company which it has requested; (ii) that the

 

2

 

Subscriber has been afforded the opportunity to ask
questions of and receive answers from duly authorized officers of the Company
concerning the terms and conditions of the Placement, and any additional
information which it has requested, if any; and (iii) the Subscriber has been
given the opportunity by the Placement Agent to review the Agency Agreement if
it has requested.

1.7           No
Representations.  The
Subscriber hereby represents that, except as expressly set forth in (a) the
Warrant Agreement, (b) this Subscription Agreement, (c) the Registration Rights
Agreement, and (d) all exhibits, schedules and appendices which are part of the
aforementioned documents (collectively, the “Offering Documents”), no
representations or warranties have been made to the Subscriber by the Company
or any agent, employee or affiliate of the Company, including the Placement
Agent, and in entering into this transaction the Subscriber is not relying on
any information other than that contained in the Offering Documents, the SEC
Documents and the results of independent investigation by the Subscriber.

1.8           Tax
Consequences.  The Subscriber
acknowledges that the Placement may involve tax consequences and that the
contents of the Offering Documents do not contain tax advice or
information.  The Subscriber
acknowledges that he must retain his own professional advisors to evaluate the
tax and other consequences of an investment in the Units.

1.9           Transfer or
Resale. The Subscriber understands that Rule 144 (the “Rule”)
promulgated under the 1933 Act requires, among other conditions, a one-year
holding period prior to the resale (in limited amounts) of securities acquired
in a non–public offering without having to satisfy the registration
requirements under the 1933 Act. The Subscriber understands and hereby
acknowledges that the Company is under no obligation to register the securities
comprising the Units under the 1933 Act, with the exception of certain
registration rights covering the resale of the Shares and Warrant Shares set
forth in the Registration Rights Agreement.

1.10         Placement
Agent.  The Subscriber agrees
that neither the Placement Agent or any of its directors, officers, employees
or agents shall be liable to any Subscriber for any action taken or omitted to
be taken by it in connection therewith, except for willful misconduct or gross
negligence.

1.11         Legends.
The Subscriber understands that the certificates or other instrument
representing the Securities, until such time as they have been registered under
the 1933 Act, shall bear a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of such
certificates or other instruments):

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, 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.

 

3

 

The legend set forth above shall be removed and the Company shall issue
a certificate or other instrument without such legend to the holder of the
Securities upon which it is stamped, if (a) such Securities are being sold
pursuant to a registration statement under the 1933 Act, (b) such holder
delivers to the Company an opinion of counsel, in a reasonably acceptable form,
to the Company that a disposition of the Securities is being made pursuant to
an exemption from such registration, or (c) such holder provides the Company
with reasonable assurance that a disposition of the Securities may be made
pursuant to the Rule without any restriction as to the number of securities
acquired as of a particular date that can then be immediately sold.

1.12         No General
Solicitation. The Subscriber represents that the Subscriber was not
induced to invest by any of the following: (i) any advertisement, article,
notice or other communication published in any newspaper, magazine or similar
media or broadcast over the news or radio; and (ii) any seminar or meeting
whose attendees were invited by any general solicitation or advertising.

1.13         Validity;
Enforcement.  If the
Subscriber is a corporation, partnership, trust or other entity, the Subscriber
represents and warrants that: (a) it is authorized and otherwise duly qualified
to purchase and hold the Units; and (b) that this Subscription Agreement has
been duly and validly authorized, executed and delivered and constitutes the
legal, binding and enforceable obligation of the undersigned.

1.14         Address.  The Subscriber hereby represents that the
address of Subscriber furnished by the Subscriber at the end of this
Subscription Agreement is the undersigned’s principal residence if the
Subscriber is an individual or its principal business address if it is a
corporation or other entity.

1.15         Foreign
Subscriber.  If the
Subscriber is not a United States person, such Subscriber hereby represents
that it has satisfied itself as to the full observance of the laws of its
jurisdiction in connection with any invitation to subscribe for the Securities
comprising the Units or any use of this Subscription Agreement, including: (a)
the legal requirements within its jurisdiction for the purchase of the Units;
(b) any foreign exchange restrictions applicable to such purchase; (c) any
governmental or other consents that may need to be obtained; and (d) the income
tax and other tax consequences, if any, that may be relevant to the purchase,
holding, redemption, sale or transfer of the Securities.  Such Subscriber’s subscription and payment
for, and his or her continued beneficial ownership of the Securities, will not
violate any applicable securities or other laws of the Subscriber’s
jurisdiction.

II.                                     REPRESENTATIONS BY THE COMPANY

The Company represents and warrants to the Subscriber, except as set
forth in the disclosure schedules attached hereto:

2.1           Securities
Law Compliance.  The offer,
offer for sale, and sale of the Units have not been registered under the 1933
Act. The Units are to be offered, offered for sale and sold in reliance upon
the exemptions from the registration requirements of Section 5 of the 1933
Act.  The Company will use its best
efforts to conduct the Placement in compliance with the requirements of
Regulation D of the General Rules and Regulations under the 1933 Act and
applicable state “blue sky” laws, and the Company will file all appropriate
notices of offering

 

4

 

with the SEC. 
The Company has prepared the Offering Documents.  The Offering Documents will not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading.  If at any time prior to the completion of
the Placement or other termination of this Subscription Agreement any event
shall occur as a result of which it might become necessary to amend or
supplement the Offering Documents so that they do not include any untrue
statement of any material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances then
existing, not misleading, the Company will promptly notify the Subscriber and
will supply the Subscriber with amendments or supplements correcting such
statement or omission.

2.2           Organization
and Qualification.  The
Company is duly organized and validly existing in good standing under the laws
of the jurisdiction in which it is organized, and has the requisite 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 Subscription Agreement, “Material Adverse Effect” means any
material adverse effect on the business, properties, assets, operations,
results of operations, financial condition or prospects of the Company, or on
the transactions contemplated hereby, or by the other Offering Documents or the
agreements and instruments to be entered into in connection herewith or therewith,
or on the authority or ability of the Company to perform its obligations under
the Offering Documents.  The Company
does not have any operating subsidiaries other than as set forth in the
Offering Documents and all of the non-operating subsidiaries are wholly-owned
by the Company.

2.3           Capitalization.
The authorized, issued and outstanding capital stock of the Company prior to
the consummation of the transactions contemplated hereby is set forth in
Schedule 2.3 to this Subscription Agreement. 
All of such outstanding shares have been and are, or upon issuance will
be duly authorized, validly issued, fully paid and non-assessable. Except as
disclosed in Schedule 2.3, (i) no shares of the Company’s capital stock are
subject to preemptive rights under Delaware law or any other similar rights or
any liens or encumbrances suffered or permitted by the Company; (ii) there are
no outstanding debt securities issued by the Company; (iii) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, any shares of capital stock of the
Company, or contracts, commitments, understandings or arrangements by which the
Company is or may become bound to issue additional shares of capital stock of
the Company or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, any shares of capital stock of the
Company; (iv) there are no agreements or arrangements under which the Company
is obligated to register the sale of any of their securities under the 1933
Act; (v) there are no outstanding securities of the Company that contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
redeem a security of the Company; (vi) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Securities as described in the Offering

 

5

 

Documents that shall not have been waived prior to the
Initial Closing; and (vii) the Company does not have any stock appreciation
rights or “phantom stock” plans or agreements or any similar plan or
agreement.  All prior sales of
securities of the Company were either registered under the 1933 Act and applicable
state securities laws or exempt from such registration, and, to the knowledge
of the Company,  no security holder has
any rescission rights with respect thereto.

2.4           Subsidiaries
and Investments.  Other than
as set forth in Schedule 2.4 to this Subscription Agreement, the Company
has no subsidiaries, and the Company does not own, directly or indirectly, any
capital stock or other equity ownership or proprietary interests in any other
corporation, association, trust, partnership, joint venture or other entity.

2.5           SEC
Documents; Financial Statements. 
Since the date of the Company’s last Annual Report on Form 10-K, 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 Exchange 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”).  The
Company has made available to the Subscriber or its representatives copies of
the SEC Documents.  As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Exchange 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 (a) as may be otherwise indicated
in such financial statements or the notes thereto, or (b) 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 that will
not be material).  As of the date
hereof, the Company meets the requirements for the use of Form S-3 for
registration of the resale of the Shares and Warrant Shares. The Company has no
reason to believe its independent auditors will withhold their consent to the
inclusion of their audit opinion concerning the Company’s financial statements
which are included in the Registration Statement.

2.6           Absence of
Changes.  Since November 30,
2001, except with respect to matters of which the Company has notified the
Placement Agent in writing or publicly disclosed and other than as set forth in
Schedule 2.6 to this Subscription Agreement, the Company has not (i)
incurred any debts, obligations or liabilities, absolute, accrued, contingent
or otherwise, whether due or to become due, except current liabilities incurred
in the usual and ordinary course of business and consistent with past
practices, having individually or in the aggregate a Material Adverse Effect,
(ii) made or suffered any changes in its contingent obligations by way of
guaranty, endorsement (other than the endorsement of checks for deposit in the
usual and

 

6

 

ordinary course of business), indemnity, warranty or
otherwise, (iii) discharged or satisfied any liens or paid any obligation or
liability other than current liabilities shown on the balance sheet dated as of
November 30, 2001, and current liabilities incurred since the date of the
balance sheet dated as of November 30, 2001, in each case in the usual and
ordinary course of business and consistent with past practices, (iv) mortgaged,
pledged or subjected to lien any of its assets, tangible or intangible, (v)
sold, transferred or leased any of its assets except in the usual and ordinary
course of business and consistent with past practices, (vi) cancelled or
compromised any debt or claim, or waived or released any right, of material
value, (vii) suffered any physical damage, destruction or loss (whether or not
covered by insurance) adversely affecting the properties, business or prospects
of the Company, (viii) entered into any transaction other than in the usual and
ordinary course of business except for the Agency Agreement and the Offering
Documents and the related agreements referred to herein and therein, (ix)
encountered any labor difficulties or labor union organizing activities, (x)
made or granted any wage or salary increase or entered into any employment
agreement, (xi) issued or sold any shares of capital stock or other securities
or granted any options with respect thereto, or modified any equity security of
the Company, (xii) declared or paid any dividends on or made any other
distributions with respect to, or purchased or redeemed, any of its outstanding
equity securities, (xiii) suffered or experienced any change in, or condition
affecting, its condition (financial or otherwise), properties, assets,
liabilities, business operations, results of operations or prospects other than
changes, events or conditions in the usual and ordinary course of its business
and consistent with past practices, having (either by itself or in conjunction
with all such other changes, events and conditions) a Material Adverse Effect,
(xiv) made any change in the accounting principles, methods or practices
followed by it or depreciation or amortization policies or rates theretofore
adopted, or (xv) entered into any agreement, or otherwise obligated itself, to
do any of the foregoing.

2.7           Title.  Except as set forth in or contemplated by Schedule
2.7 to this Subscription Agreement, the Company has good and marketable
title to all properties and assets owned by it, free and clear of all liens,
charges, encumbrances or restrictions, except such as are not significant or
important in relation to the Company’s business; all of the material leases and
subleases under which the Company is the lessor or sublessor of properties or
assets or under which the Company holds properties or assets as lessee or
sublessee are in full force and effect, and the Company is not in default in
any material respect with respect to any of the terms or provisions of any of
such leases or subleases, and no material claim has been asserted by anyone
adverse to rights of the Company as lessor, sublessor, lessee or sublessee
under any of the leases or subleases mentioned above, or affecting or
questioning the right of the Company to continued possession of the leased or
subleased premises or assets under any such lease or sublease. The Company owns
or leases all such properties as are necessary to its operations as described
in the Offering Documents.

2.8           Proprietary
Rights.  To the Company’s
knowledge after due investigation, the Company owns, or is duly licensed to use
or possess, or possesses exclusive and enforceable rights to use all patents,
patent applications, trademarks, service marks, copyrights, trade secrets,
processes, formulations, technology or know-how used in the conduct of its
business (the “Proprietary Rights”). 
Except as set forth on Schedule 2.8 to this Subscription Agreement,
the Company has not received any notice of any claims, nor does it have any
knowledge of any threatened claims, and knows of no facts which would form the
basis

 

7

 

of any claim, asserted by any person to the effect
that the sale or use of any product or process now used or offered by the
Company or proposed to be used or offered by the Company infringes on any
patents or infringes upon the use of any such Proprietary Rights of another
person and, to the best of the Company’s knowledge, no others have infringed
the Company’s Proprietary Rights.

2.9           Litigation.  Except as set forth in or contemplated by Schedule
2.9 to this Subscription Agreement, there is no material action, suit,
investigation, customer complaint, claim or proceeding at law or in equity by
or before any arbitrator, court, governmental instrumentality or agency,
self-regulatory organization or body or public board now pending or, to the
knowledge of the Company, threatened against the Company of any of the
Company’s officers or directors in their capacities as such (or basis therefor
known to the Company), the adverse outcome of which would have a Material
Adverse Effect.  The Company is not
subject to any judgment, order, writ, injunction or decree of any Federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign that have a Material Adverse
Effect.

2.10         Non-Defaults;
Non-Contravention.Except as set forth in or contemplated by Schedule
2.10 to this Subscription Agreement, the Company is not in violation of or
default under, nor will the execution and delivery of this Subscription
Agreement or any of the other Offering Documents or consummation of the
transactions contemplated herein or therein result in a violation of or
constitute a default in the performance or observance of any obligation under:
(i) its Certificate of Incorporation, or its By-laws; or (ii) any indenture,
mortgage, contract, material purchase order or other agreement or instrument to
which the Company is a party or by which it or its property is bound, where
such violation or default would have a Material Adverse Effect; or (iii) any
material order, writ, injunction or decree of any court of any Federal, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign (including federal and state securities
laws and regulations and the rules and regulations of The Nasdaq Stock Market,
Inc.), where such violation or default would have a Material Adverse Effect,
and there exists no condition, event or act that constitutes, nor which after
notice, the lapse of time or both, could constitute a default under any of the
foregoing, which in either case would have a Material Adverse Effect.

2.11         Taxes.  The Company has filed all tax returns that
are required to be filed by it or otherwise met its disclosure obligations to
the relevant agencies and all such returns are true and correct. The Company
has paid or adequately provided for all tax liabilities of the Company as
reflected on such returns or pursuant to any assessments received by it or that
it is obligated to withhold from amounts owing to any employee, creditor or
third party.  The Company has properly
accrued all taxes required to be accrued by GAAP consistently applied.  The income tax returns of the Company have
never been audited by any government or regulatory authorities.  The Company has not waived any statute of
limitations with respect to taxes or agreed to any extension of time with
respect to any tax assessment or deficiency.

2.12         Compliance
With Laws; Licenses, Etc. 
The Company has not received notice of any violation of or noncompliance
with any laws, ordinances, regulations and orders applicable to its business
that would have a Material Adverse Effect and that has not been cured.  The Company has all material licenses and
permits and other governmental certificates,

 

8

 

authorizations and permits and approvals
(collectively, “Licenses”) required by every government or regulatory
body for the operation of its business as currently conducted and the use of
its properties.  The Licenses are in
full force and effect and to the Company’s knowledge no violations currently
exist in respect of any License and no proceeding is pending or threatened to
revoke or limit any thereof.

2.13         Authorization;
Enforcement; Validity.  The
Company has the requisite corporate power and authority to enter into and
perform its obligations under this Subscription Agreement and the other
Offering Documents, to file and perform its obligations under the Offering
Documents, and to issue the Securities in accordance with the terms of the
Offering Documents.  The execution and
delivery of the Offering Documents by the Company and the consummation by the
Company of the transactions contemplated by the Offering Documents, including
without limitation the issuance of the Securities, have been duly authorized by
the Company’s board of directors and no further consent or authorization is
required by the Company, its board of directors or its stockholders.

2.14         Authorization
of Securities.  The
issuance, sale and delivery of the Shares and the Warrants have been duly
authorized by all requisite corporate action of the Company.  When so issued, sold and delivered in
accordance with the Offering Documents for the consideration set forth therein,
the Shares and the Warrants will be duly executed, issued and delivered and
will constitute valid and legal obligations of the Company enforceable in
accordance with their respective terms and, in each case, will not be subject
to preemptive or any other similar rights of the stockholders of the Company or
others which rights shall not have been waived prior to the Initial Closing.
The issuance, sale and delivery by the Company of the common shares issuable
upon exercise of the Warrants (the “Reserved Shares”) have been duly
authorized by all requisite corporate action of the Company and the Reserved
Shares have been duly reserved for issuance upon exercise of all or any of the
Warrants and when so issued, sold, paid for and delivered for the consideration
set forth in the Offering Documents, the Reserved Shares will be validly issued
and outstanding, fully paid and nonassessable, and not subject to preemptive or
any other similar rights of the stockholders of the Company or others which
rights shall not have been waived prior to the Initial Closing.

2.15         Exemption
from Registration.  Assuming
(i) the accuracy of the information provided by the respective Subscribers
in the Subscription Agreements and (ii) that the Placement Agent has
complied in all material respects with the provisions of Regulation D
promulgated under the 1933 Act, the offer and sale of the Units pursuant to the
terms of this Agreement are exempt from the registration requirements of the
1933 Act and the rules and regulations promulgated thereunder.  The Company is not disqualified from the
exemption under Regulation D by virtue of the disqualifications contained in
Rule 505(b)(2)(iii) or Rule 507 promulgated thereunder.

2.16         Registration
Rights.  No person has any
right to cause the Company to effect registration under the 1933 Act of any
securities of the Company.

2.17         Brokers.  Neither the Company nor any of its officers,
directors, employees or stockholders has employed any broker or finder in
connection with the transactions

 

9

 

contemplated by this Subscription Agreement other than
the Placement Agent and Ladenburg Thalmann.

2.18         Title to
Securities.  When
certificates representing the Shares and the Warrants have been duly delivered
to the purchasers participating in the Placement and payment shall have been
made therefor, the several purchasers shall receive from the Company good and
marketable title to such securities free and clear of all liens, encumbrances
and claims whatsoever (with the exception of claims arising through the acts or
omissions of the purchasers and except as arising from applicable federal and
state securities laws), and the Company shall have paid all taxes, if any, in
respect of the original issuance thereof.

2.19         Takeover
Protections; Rights Agreement. 
The Company and the Board have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Certificate of Incorporation
or the laws of the state of its incorporation which is or could become
applicable to the Subscriber as a result of the transactions contemplated by
this Agency Agreement, including without limitation, the Company’s issuance of
the Securities and the Subscriber’s ownership of the Securities.  The Company has not adopted a shareholder
rights plan or similar arrangement relating to accumulations of beneficial
ownership of Common Stock or a change in control of the Company.

2.20         Right of
First Refusal. No person, firm or other business entity is a party
to any agreement, contract or understanding, written or oral entitling such
party to a right of first refusal with respect to offerings by the Company.

2.21         Exchange
Listing. The Company’s Common Stock has been designated for
quotation or listed on the Nasdaq National Market (“Nasdaq”) and trading
in the Common Stock has not been suspended by the SEC or Nasdaq. Except as
disclosed on Schedule 2.21 to this Subscription Agreement, the Company
has received no communication, written or oral, from the SEC or Nasdaq
regarding the suspension or delisting of the Common Stock from Nasdaq, and the
Company is not in violation of the listing requirements of Nasdaq as in effect
on the date hereof and has no actual knowledge of any facts which would
reasonably lead to delisting or suspension of the Common Stock by Nasdaq in the
foreseeable future.

2.22         Consents.  Except as contemplated by this Subscription
Agreement, 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 Offering
Documents.  Except as otherwise provided
in the Offering Documents, all consents, authorizations, orders, filings and
registrations that the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof.  The Company is unaware of any facts or
circumstances that might prevent the Company from obtaining or effecting any of
the foregoing.

2.23         No General
Solicitation.  None of the
Company, any of its affiliates, and any person acting on its behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D under the 1933 Act) in connection with the offer or
sale of the Securities.

 

10

 

2.24         No
Integrated Offering.  None of
the Company, any of its affiliates, and any person acting on its 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 Securities under the 1933 Act or cause the
Placement to be integrated with prior offerings by the Company for purposes of
the 1933 Act or any applicable stockholder approval provisions, including
without limitation, under the rules and regulations of any exchange or
automated quotation system on which any of the securities of the Company are
listed or designated.  None of the
Company, its affiliates and any person acting on its behalf will take any
action or steps referred to in the preceding sentence that would require
registration of any of the Securities under the 1933 Act or cause the Placement
to be integrated with other offerings.

2.25         Foreign Corrupt Practices.  Neither the Company nor any director,
officer, agent, employee or other person acting on behalf of the Company has,
in the course of its actions for, or on behalf of, the Company, (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
corporate funds, (ii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended, or (iii) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.

III.                                 TERMS OF SUBSCRIPTION

3.1           Offering
Period.  This Subscription
Agreement will terminate at 11:59 PM Eastern time on June 7, 2002, unless
extended by the Company and the Placement Agent for up to 15 days (the “Termination
Date”).  Provided the Minimum
Offering shall have been subscribed for, funds representing the sale thereof
shall have cleared, and all conditions to closing set forth in Section 4 have
been satisfied or waived, the Initial Closing shall take place at the offices
of counsel to the Placement Agent, Loeb & Loeb, 345 Park Avenue, New York,
New York 10154, within two business days thereafter (but in no event later than
two business days following the closing of the Company’s previously announced
asset sale to Computer Associates).  At
the Initial Closing, payment for the Units issued and sold by the Company shall
be made against delivery of the Shares and Warrants comprising such Units.  Subsequent closings (each of which shall be
deemed a “Closing” hereunder) shall take place by mutual agreement of
the Company and the Placement Agent. 
The date of the last closing of the Placement is hereinafter referred to
as the “Final Closing” and the date of any Closing hereunder is
hereinafter referred to as a “Closing Date”.

3.2           Expenses;
Fees. Simultaneously with payment for and delivery of the Units at
the closing of the Placement and subject to the following sentence, the Company
shall: (A) pay to the Placement Agent a placement agent fee equal to 6% of the
gross proceeds of Units sold in the Placement (subject to reduction in certain
events); and (B) issue to the Placement Agent or its designees five-year
warrants in the form to be agreed to by the Company and the Placement Agent to
purchase that number of Shares as equals 8% of the Shares and Warrant Shares
sold in the Placement. The Company shall also reimburse the Placement Agent,
upon presentation of receipts or invoices, for up to $50,000 of its accountable
expenses.

 

11

 

3.3           Escrow.  Pending the sale of the Units, all funds
paid hereunder shall be deposited by the Subscribers in escrow with the Escrow
Agent.  If the closing conditions set
forth in Section 4 shall not have been met on or before the Termination Date,
then this subscription shall be void and all funds paid hereunder by the
Subscriber, with interest, shall be returned to the Subscriber promptly.

3.4           Certificates.  The Subscriber hereby authorizes and directs
the Company, upon each Closing in the Placement, to deliver the Shares and
Warrants to be issued to such Subscriber pursuant to this Subscription
Agreement either (a) to the Subscriber’s address indicated in the Questionnaire,
or (b) directly to the Subscriber’s account maintained with the Placement
Agent, if any.

IV.                                 CONDITIONS TO CLOSING.

4.1           Asset Sale.
The Company shall have consummated the previously announced asset sale to
Computer Associates.

4.2           Officers’
Certificate. The Subscriber shall have received a certificate of the
Company, signed by the Chief Executive Officer and Chief Financial Officer
thereof, that the representations and warranties contained in Section 2
hereof are true and accurate in all material respects as of the Closing.

4.3           Opinion of
Counsel. The Subscriber shall have received the opinion of Wilson,
Sonsini, Goodrich & Rosati, Professional Corporation, counsel to the
Company, in the form delivered to the Placement Agent pursuant to Section 3 of
the Agency Agreement.

4.4           Material
Adverse Event. There shall not have occurred, at any time prior to
the closing of this subscription (i) any domestic or international event,
act or occurrence that has materially disrupted, or in the Subscriber’s opinion
will in the immediate future materially disrupt, the securities markets;
(ii) a general suspension of, or a general limitation on prices for,
trading in securities on the New York Stock Exchange or the Nasdaq - Amex Stock
Exchange; (iii) any outbreak of major hostilities or other national or
international calamity; (iv) any banking moratorium declared by a state or
federal authority; (v) any moratorium declared in foreign exchange trading
by major international banks or other persons; (vi) any material interruption
in the mail service or other means of communication within the United States;
(vii) any material adverse change in the business, properties, assets,
results of operations, or financial condition of the Company; or
(viii) any material adverse change in the market for securities in general
or in political, financial, or economic conditions.

V.                                    MISCELLANEOUS

5.1           Notice.  Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Subscription Agreement must be in writing and will be deemed to have been
delivered: (a) upon receipt, when delivered personally, (b) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party), or (c) one (1)
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:

 

12

 

If to the Company:

Intraware, Inc.

25 Orinda Way

Orinda, CA 94563

Telephone:  (925) 253-4500

Facsimile:  (925) 253-4541

Attention:  General Counsel

With a copy to:

Wilson Sonsini
Goodrich & Rosati, Professional Corporation 

650 Page Mill Road

Palo Alto, CA 94304

Telephone:  (650) 493-9300

Facsimile:  (650) 493-6811

Attention:  Adam R. Dolinko, Esq.

If to the Subscriber, to its address and facsimile number set forth at
the end of this Subscription Agreement, or to such other address and/or
facsimile number and/or to the attention of such other person as specified by
written notice given to the Company five (5) 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 (a), (b) or (c) above, respectively.

5.2           Entire
Agreement; Revocation; Amendment. 
This Subscription Agreement supersedes all other prior oral or written
agreements between the Subscriber, the Company, their affiliates and persons
acting on their behalf with respect to the matters discussed herein, and this
Subscription Agreement and the instruments referenced herein 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 the Subscriber makes any representation, warranty, covenant or
undertaking with respect to such matters. 
This Subscription Agreement is subject to revocation or reconfirmation
by the Subscriber upon receipt by the Subscriber of notification of the Per
Share Purchase Price and any other material information regarding the Company
released after the execution of this Subscription Agreement and prior to the
Closing. No provision of this Subscription Agreement may be amended or waived
other than by an instrument in writing signed by the Company and the holders of
at least a majority of the Securities then outstanding (or if prior to the
Closing, the Subscribers purchasing at least a majority of the Units to be
purchased at the Closing).  No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the Securities then outstanding.

5.3           Severability.  If any provision of this Subscription
Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect

 

13

 

the validity or enforceability of the remainder of
this Subscription Agreement in that jurisdiction or the validity or
enforceability of any provision of this Subscription Agreement in any other
jurisdiction.

5.4           Governing Law;
Jurisdiction; Jury Trial. 
All questions concerning the construction, validity, enforcement and
interpretation of this Subscription Agreement shall be governed by the internal
laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any
other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.  Each party hereby irrevocably submits to the exclusive jurisdiction
of the federal courts sitting in the Southern District of New York, 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 Subscription 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 Subscription Agreement or any
transaction contemplated hereby.

5.5           Headings.  The headings of this Subscription Agreement
are for convenience of reference and shall not form part of, or affect the
interpretation of, this Subscription Agreement.

5.6           Successors
And Assigns.  This
Subscription Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns, including any purchasers
of the Shares and the Warrants.  The
Company shall not assign this Subscription Agreement or any rights or
obligations hereunder without the prior written consent of the holders of at
least a majority the Securities then outstanding, except by merger or
consolidation.  The Subscriber may
assign some or all of its rights hereunder without the consent of the Company,
provided, however, that any such assignment shall not release the Subscriber
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.

5.7           No Third
Party Beneficiaries.  This
Subscription 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.

5.8           Survival.  The representations and warranties of the
Company and the Subscriber contained in Articles I and II and the agreements
set forth this Article V shall survive the Final Closing for a period of two
years.

5.9           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

 

14

 

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 Subscription Agreement and the consummation of
the transactions contemplated hereby.

5.10         No Strict
Construction.  The language
used in this Subscription 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.

5.11         Legal
Representation.  The
Subscriber acknowledges that: (a) it has read this Subscription Agreement and
the exhibits hereto; (b) it understands that the Company has been represented
in the preparation, negotiation, and execution of this Subscription Agreement
by Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel to
the Company; (c) it understands that the Placement Agent has been represented
by Loeb & Loeb LLP, counsel to the Placement Agent, and that such counsel
has not represented and is not representing the Subscriber; (d) it has either
been represented in the preparation, negotiation, and execution of this
Subscription Agreement by legal counsel of its own choice, or has chosen to
forgo such representation by legal counsel after being advised to seek such
legal representation; and (e) it understands the terms and consequences of this
Subscription Agreement and is fully aware of its legal and binding effect.

5.12         Expenses of
Enforcement.  The Company
shall pay all fees and expenses (including reasonable fees and expenses of
counsel and other professionals) incurred by the Subscriber or any successor
holder of Securities in enforcing any of its rights and remedies under this
Subscription Agreement.

5.13         Confidentiality;
Required Press Release.  The
Subscriber agrees that it shall keep confidential and not divulge, furnish or
make accessible to anyone, the confidential information concerning or relating
to the business or financial affairs of the Company, if any,  contained in the Offering Documents to which
it becomes privy until such information has been publicly disclosed by the
Company or until such information is no longer material. The Company agrees
that within two business days after the closing of this subscription, it shall
either file a Current Report on Form 8-K or issue a press release, either or
both of  which shall set forth all of the
material terms of the Placement, including pricing. In the event this
Subscription Agreement is filed as an exhibit to a Current Report on Form 8-K,
the signature pages and all references to the names of the Subscribers shall be
redacted.

5.14         Counterparts.  This Subscription 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.

 

15

 

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

 

	
   

  	
   

  	
   

  
	
  Signature of Subscriber

  	
   

  	
  Signature of
  Co-Subscriber

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of Subscriber

  [please print]

  	
   

  	
  Name of Co-Subscriber

  [please print]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address of Subscriber

  	
   

  	
  Address of
  Co-Subscriber

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Social Security or
  Taxpayer Identification Number of Subscriber

  	
   

  	
  Social Security or
  Taxpayer Identification Number of Co-Subscriber

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Subscriber’s Account
  Number at Commonwealth Associates

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dollar Amount of Units
  Subscribed For

  	
   

  	
  Principal Amount of
  Notes Converted as Payment for Units Subscribed for

  
	
   

  	
   

  	
   

  
	
  *If Subscriber is a Registered Representative with an NASD
  member firm, have the following acknowledgment signed by the appropriate
  party:

  	
   

  	
   

  
	
  The undersigned NASD
  member firm acknowledges receipt of the notice required by Rule 3040 of the
  NASD Conduct Rules.

  	
   

  	
  Subscription Accepted:

  INTRAWARE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
  Name of NASD Member

  	
   

  	
   Name:

  Title:

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Dollar Amount of
  Subscription Accepted

  
	
  Authorized Officer
  Accepted

  	
   

  	
   

  

 

16

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