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EXHIBIT 4.1
EXHIBIT I
FORM OF WARRANT
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, OR (B) AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY, IN A
REASONABLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144
UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THIS WARRANT MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY THIS
WARRANT.
INTRAWARE, INC.
WARRANT TO PURCHASE COMMON STOCK
Warrant No.: Number of Shares:
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Date of Issuance: __________, 2000
Intraware, Inc., a Delaware corporation (the "COMPANY"), hereby certifies that,
for Ten United States Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
____________________, the registered holder hereof or its permitted assigns, is
entitled, subject to the terms set forth below, to purchase from the Company, at
the Warrant Exercise Price (as defined below) then in effect, upon surrender of
this Warrant, at any time or times on or after the date hereof, but not after
11:59 P.M. Eastern Time on the Expiration Date (as defined herein), a number of
fully paid nonassessable shares of Common Stock (as defined herein) of the
Company equal to the product of (i) the number of Preferred Shares (as defined
below) purchased by the initial holder of this Warrant on the Closing Date (as
defined in the Securities Purchase Agreement), multiplied by (ii) the quotient
of (A) $4,800, divided by (B) the Warrant Exercise Price then in effect,
multiplied by (iii) the Pricing Period Quotient (the "WARRANT SHARES");
provided, however, that the Company shall not effect the exercise of this
Warrant and no holder of this Warrant shall have the right to exercise this
Warrant to the extent that after giving effect to such exercise, such Person (as
defined below) (together with such Person's affiliates) would have acquired,
through exercise of this warrant or otherwise, beneficial ownership of a number
of shares of Common Stock during the 60-day period ending
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on and including the date this Warrant was exercised (the "60 DAY PERIOD"),
that, when added to the number of shares of Common Stock beneficially owned
by such Person (together with such Person's affiliates) at the beginning of
the 60 Day Period, exceeds 10.00% of the number of shares of Common Stock
outstanding immediately after giving effect to such exercise. For purposes of
the foregoing sentence, the aggregate number of shares of Common Stock
beneficially owned by such Person and its affiliates shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect
to which the determination of such sentence is being made, but shall exclude
shares of Common Stock which would be issuable upon (i) exercise of the
remaining, unexercised portion of this Warrant beneficially owned by such
Person and its affiliates and (ii) exercise or conversion of the unexercised
or unconverted portion of any other securities of the Company beneficially
owned by such Person and its affiliates (including, without limitation, any
convertible notes or preferred stock) subject to a limitation on conversion
or exercise analogous to the limitation contained herein. Except as set forth
in the preceding sentence, for purposes of this paragraph, beneficial
ownership shall be calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended. For purposes of this Warrant, in
determining the number of outstanding shares of Common Stock a holder may
rely on the number of outstanding shares of Common Stock as reflected in (1)
the Company's most recent Form 10-Q, Form 10-K or other public filing with
the Securities and Exchange Commission, as the case may be, (2) a more recent
public announcement by the Company or (3) any other notice by the Company or
its transfer agent setting forth the number of shares of Common Stock
outstanding. Upon the written request of any holder, the Company shall
promptly, but in no event later than one (1) Business Day following the
receipt of such notice, confirm in writing to any such holder the number of
shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to
conversions of Preferred Shares (as defined below) and exercise of Warrants
(as defined below) by such holder and its affiliates since the date as of
which such number of outstanding shares of Common Stock was reported.
Section 1.
(a) SECURITIES PURCHASE AGREEMENT. This Warrant is one of
the Warrants (the "PREFERRED SHARE WARRANTS") issued pursuant to Section 1 of
that certain Securities Purchase Agreement dated as of June 29, 2000, among
the Company and the Buyers referred to therein (the "SECURITIES PURCHASE
AGREEMENT").
(b) DEFINITIONS. The following words and terms as used in
this Warrant shall have the following meanings:
(i) "APPROVED STOCK PLAN" shall mean any
stock option plan, restricted stock plan or stock purchase plan which has
been approved by the Board of Directors of the Company, pursuant to which the
Company's securities may be issued to any employee, officer or director for
services provided to the Company.
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(ii) "AVERAGE CONVERSION PRICE" means, as of any
date of determination, the average of the Series A Conversion Price, the
Series B Conversion Price and the Series C Conversion Price (as each term is
defined in the Certificate of Designations).
(iii) "CERTIFICATE OF DESIGNATIONS" means the
Company's Certificate of Designations, Preferences and Rights for each of its
Series A, Series B and Series C Preferred Stock.
(iv) "BUSINESS DAY" means any day other than
Saturday, Sunday or any other day on which commercial banks in the City of
New York are authorized or required by law to remain closed.
(v) "CLOSING BID PRICE" and "CLOSING SALE PRICE"
means, for any security as of any date, the last closing bid price and last
closing trade price, respectively, for such security on the Principal Market
(as defined below) as reported by Bloomberg Financial Markets ("BLOOMBERG"),
or, if the Principal Market begins to operate on an extended hours basis and
does not designate the closing bid price or the closing trade price, as the
case may be, then the last bid price or last trade price, respectively, of
such security prior to 4:00:00 p.m. Eastern Time as reported by Bloomberg,
or, if the Principal Market is not the principal securities exchange or
trading market for such security, the last closing bid price or last trade
price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by
Bloomberg, or if the foregoing do not apply, the last closing bid price or
last trade price, respectively, of such security in the over-the-counter
market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no last closing bid price or last trade price,
respectively, is reported for such security by Bloomberg, the average of the
bid prices, or the ask prices, respectively, of any market makers for such
security as reported in the "pink sheets" by the National Quotation Bureau,
Inc. If the Closing Bid Price, or the Closing Sale Price, cannot be
calculated for such security on such date on any of the foregoing bases, the
Closing Bid Price or the Closing Sale Price, as the case may be, of such
security on such date shall be the fair market value as mutually determined
by the Company and the holder of this Warrant. If the Company and the holder
of this Warrant are unable to agree upon the fair market value of such
security, then such dispute shall be resolved pursuant to Section 2(a) below
with the term "Closing Bid Price" or "Closing Sale Price" being substituted
for the term "Warrant Exercise Price." All such determinations to be
appropriately adjusted for any stock dividend, stock split or other similar
transaction during such period.
(vi) "COMMON STOCK" means (i) the Company's common
stock, par value $0.0001 per share, and (ii) any capital stock into which
such Common Stock shall have been changed or any capital stock resulting from
a reclassification of such Common Stock.
(vii) "COMMON STOCK DEEMED OUTSTANDING" means, at any
given time, the number of shares of Common Stock actually outstanding at such
time, plus the number of shares of Common Stock deemed to be outstanding
pursuant to Sections 8(b)(i) and 8(b)(ii) hereof regardless of whether the
Options or Convertible Securities are actually exercisable at such time,
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but excluding any shares of Common Stock owned or held by or for the account
of the Company or issuable upon conversion of the Preferred Shares or
exercise of the Warrants
(viii) "CONVERTIBLE SECURITIES" means any stock or
securities (other than Options) directly or indirectly convertible into or
exchangeable for Common Stock.
(ix) "EXCLUDED SECURITY" means (X) any of the
following, but only to the extent that such securities are issued or sold,
or in accordance with Section 8 are deemed to have been issued or sold, for a
consideration per share greater than the Warrant Exercise Price on the date
of such issuance or sale: (a) any issuance by the Company of securities in
connection with a strategic partnership or joint venture in which there is a
significant commercial relationship with the Company, (b) any issuance by the
Company of securities as consideration for a merger or consolidation or the
acquisition of a business, product, license or other asset of another Person,
(c) any issuance by the Company of securities in a firm commitment,
underwritten public offering with net proceeds to the Company of at least
$25,000,000 by an underwriter which is listed in the most recently issued
report by Securities Data Corporation as one of the top 20 underwriters,
based on dollar amount raised, for U.S. equity offerings, (d) any issuance by
the Company of shares of Common Stock for a consideration per share which is
greater than 85% of the Closing Bid Price of the Common Stock on the date of
such issuance and which is not issued concurrent with or in connection with
any other equity security or component, including, without limitation, rights
to receive additional equity securities, or (e) any issuance by the Company
of securities to a personnel recruiting firm or to a landlord of the Company
or in connection with an asset backed financing, a loan by an institutional
lender or a lease by a leasing company, provided that the aggregate amount of
such securities described in this clause (e) does not exceed 100,000 shares
of Common Stock (as adjusted for any stock splits, stock dividends, stock
combinations or other similar transactions), on an as-converted basis; and
(Y) any issuance by the Company of securities in connection with the
acquisition of Janus Technologies.
(x) "EXPIRATION DATE" means the date four (4) years
after the date of issuance of this Warrant or, if such date falls on a
Saturday, Sunday or other day on which banks are required or authorized to be
closed in the City of New York or the State of New York or on which trading
does not take place on the Principal Market (a "HOLIDAY"), the next date that
is not a Holiday; provided that the Expiration Date shall be increased by the
aggregate number of days of all Grace Periods (as defined in Section 3(t) of
the Registration Rights Agreement).
(xi) "OPTIONS" means any rights, warrants or
options to subscribe for or purchase Common Stock or Convertible Securities.
(xii) "OTHER SECURITIES" means (A) those options and
warrants of the Company issued prior to, and outstanding on, the date of
issuance of this Warrant, (B) the shares of Common Stock issued upon exercise
of such options and warrants, provided such options and warrants are not
amended in any material way after the issuance date of this Warrant, (C) the
Preferred Shares and (D) the shares of Common Stock issued upon conversion of
the Preferred Shares or the exercise of the Preferred Share Warrants.
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(xiii) "PERSON" means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.
(xiv) "PREFERRED SHARES" means the shares of the
Company's Series A, Series B and Series C Preferred Stock, par value $0.0001
per share, issued pursuant to the Securities Purchase Agreement.
(xv) "PRICING DATE" means the last trading day in the
Series C Pricing Period (as defined in the Certificate of Designations for
the Company's Series C Preferred Stock), giving effect to the completion of
the Series C Pricing Period.
(xvi) "PRICING PERIOD QUOTIENT" means (A) on or prior
to the Pricing Date, one (1), or (B) after the Pricing Date, the quotient of
(I) the sum of the number of trading days in the Series A Pricing Period (as
defined in the Certificate of Designations, Preferences and Rights for the
Company's Series A Preferred Stock), plus the number of trading days in the
Series B Pricing Period (as defined in the Certificate of Designations,
Rights and Preferences of the Company's Series B Preferred Stock), plus the
number of trading days in the Series C Pricing Period (as defined in the
Certificate of Designations, Preferences and Rights of the Company's Series C
Preferred Stock), divided by (II) 60.
(xvii) "PRINCIPAL MARKET" means the Nasdaq
National Market or if the Common Stock is not traded on the Nasdaq National
Market, then the principal securities exchange or trading market for the
Common Stock.
(xviii) "REGISTRATION RIGHTS AGREEMENT" means that
certain Registration Rights Agreement dated June 29, 2000 by and among the
Company and the initial holders of the Preferred Share Warrants.
(xix) "SECURITIES ACT" means the Securities Act of
1933, as amended.
(xx) "WARRANT" means this Warrant and all Warrants
issued in exchange, transfer or replacement hereof.
(xxi) "WARRANT EXERCISE PRICE," with respect to any
Warrant Share, shall be equal to (A) on or prior to the Pricing Date, the
Average Conversion Price as of the date of issuance of this Warrant, or (B)
after the Pricing Date, the Average Conversion Price as of the Pricing Date,
in each case subject to adjustment as provided in this Warrant.
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(c) OTHER DEFINITIONAL PROVISIONS.
(i) Except as otherwise specified herein, all
references herein (A) to the Company shall be deemed to include the Company's
successors and (B) to any applicable law defined or referred to herein, shall
be deemed references to such applicable law as the same may have been or may
be amended or supplemented from time to time.
(ii) When used in this Warrant, the words
"HEREIN," "HEREOF," and "hereunder," and words of similar import, shall refer
to this Warrant as a whole and not to any provision of this Warrant, and the
words "SECTION," "SCHEDULE," and "EXHIBIT" shall refer to Sections of, and
Schedules and Exhibits to, this Warrant unless otherwise specified.
(iii) Whenever the context so requires, the
neuter gender includes the masculine or feminine, and the singular number
includes the plural, and vice versa.
Section 2. EXERCISE OF WARRANT.
(a) Subject to the terms and conditions hereof, this
Warrant may be exercised by the holder hereof then registered on the books of
the Company, in whole or in part, at any time on any Business Day on or after
the opening of business on the date hereof and prior to 11:59 P.M. Eastern
Time on the Expiration Date by (i) delivery of a written notice, in the form
of the subscription form attached as EXHIBIT A hereto (the "EXERCISE
NOTICE"), of such holder's election to exercise this Warrant, which notice
shall specify the number of Warrant Shares to be purchased, (ii) (A) payment
to the Company of an amount equal to the applicable Warrant Exercise Price
multiplied by the number of Warrant Shares as to which this Warrant is being
exercised (the "AGGREGATE EXERCISE PRICE") in cash or wire transfer of
immediately available funds or (B) by notifying the Company that this Warrant
is being exercised pursuant to a Cashless Exercise (as defined in Section
2(f)) and (iii) the surrender to a common carrier for overnight delivery to
the Company, as soon as practicable following such date, of this Warrant (or
an indemnification undertaking with respect to this Warrant in the case of
its loss, theft or destruction). In the event of any exercise of the rights
represented by this Warrant in compliance with this Section 2(a), the Company
shall on the second Business Day following the date of receipt of the
Exercise Notice, the Aggregate Exercise Price (or notice of a Cashless
Exercise) and this Warrant (or an indemnification undertaking with respect to
this Warrant in the case of its loss, theft or destruction) (the "EXERCISE
DELIVERY DOCUMENTS"), credit such aggregate number of shares of Common Stock
to which the holder shall be entitled to the holder's or its designee's
balance account with The Depository Trust Company; provided, however, if the
holder who submitted the Exercise Notice requested physical delivery of any
or all of the Warrant Shares, then the Company shall, on or before the second
Business Day following receipt of the Exercise Delivery Documents issue and
surrender to a common carrier for overnight delivery to the address specified
in the Exercise Notice, a certificate, registered in the name of the holder,
for the number of shares of Common Stock to which the holder shall be
entitled pursuant to such request. Upon delivery of the Exercise Notice and
Aggregate Exercise Price referred to in clause (ii)(A) above or notification
to the Company of a Cashless Exercise referred to in Section 2(f), the holder
of this
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Warrant shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date of delivery of this Warrant as required
by clause (iii) above or the certificates evidencing such Warrant Shares. In
the case of a dispute as to the determination of the Warrant Exercise Price
or the arithmetic calculation of the Warrant Shares, the Company shall
promptly issue to the holder the number of shares of Common Stock that is not
disputed and shall transmit an explanation of the disputed determinations or
arithmetic calculations to the holder via facsimile within one Business Day
of receipt of the holder's Exercise Notice. If the holder and the Company are
unable to agree upon the determination of the Warrant Exercise Price or
arithmetic calculation of the Warrant Shares within two (2) Business Days of
such disputed determination or arithmetic calculation being transmitted to
the holder, then the Company shall within one (1) Business Day transmit via
facsimile (i) the disputed determination of the Warrant Exercise Price to an
independent, reputable investment banking firm or (ii) the disputed
arithmetic calculation of the Warrant Shares to its independent, outside
accountant. The Company shall cause the investment banking firm or the
accountant, as the case may be, to perform the determinations or calculations
and notify the Company and the holder of the results no later than
forty-eight (48) hours from the time it receives the disputed determinations
or calculations. Such investment banking firm's or accountant's determination
or calculation, as the case may be, shall be deemed conclusive absent
manifest error.
(b) Unless the rights represented by this Warrant shall
have expired or shall have been fully exercised, the Company shall, as soon
as practicable and in no event later than five (5) Business Days after any
exercise and at its own expense, issue a new Warrant identical in all
respects to this Warrant except it shall represent rights to purchase the
number of Warrant Shares purchasable immediately prior to such exercise under
this Warrant, less the number of Warrant Shares with respect to which such
Warrant is exercised.
(c) No fractional shares of Common Stock are to be issued
upon the exercise of this Warrant, but rather the number of shares of Common
Stock issued upon exercise of this Warrant shall be rounded up or down to the
nearest whole number.
(d) If the Company shall fail for any reason or for no
reason to issue to the holder within five (5) Business Days of receipt of the
Exercise Delivery Documents, a certificate for the number of shares of Common
Stock to which the holder is entitled or to credit the holder's balance
account with The Depository Trust Company for such number of shares of Common
Stock to which the holder is entitled upon the holder's exercise of this
Warrant, the Company shall, in addition to any other remedies under this
Warrant or the Securities Purchase Agreement or otherwise available to such
holder, including any indemnification under Section 8 of the Securities
Purchase Agreement, pay as additional damages in cash to such holder on each
day the issuance of such Common Stock certificate is not timely effected an
amount equal to 0.5% of the product of (A) the sum of the number of shares of
Common Stock not issued to the holder on a timely basis and to which the
holder is entitled, and (B) the average of the Closing Bid Price of the
Common Stock for the three consecutive trading days immediately preceding the
last possible date
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which the Company could have issued such Common Stock to the holder without
violating this Section 2.
(e) If within five (5) Business Days after the Company's
receipt of the Exercise Delivery Documents, the Company fails to deliver a
new Warrant to the holder for the number of shares of Common Stock to which
such holder is entitled pursuant to Section 2(b) hereof, then, in addition to
any other available remedies under this Warrant or the Securities Purchase
Agreement including indemnification pursuant to Section 9 thereof or
otherwise available to such holder, the Company shall pay as additional
damages in cash to such holder on each day after such fifth (5th) Business
Day that such delivery of such new Warrant is not timely effected an amount
equal to 0.5% of the product of (A) the number of shares of Common Stock
represented by the portion of this Warrant which is not being exercised and
(B) the average of the Closing Bid Prices of the Common Stock for the three
consecutive trading days immediately preceding the last possible date which
the Company could have issued such Warrant to the holder without violating
this Section 2.
(f) If (i) despite the Company's obligations under the
Securities Purchase Agreement and the Registration Rights Agreement, the
Warrant Shares to be issued are not registered and available for resale
pursuant to a registration statement (including on days during a Grace Period
(as defined in the Registration Rights Agreement)) in accordance with the
Registration Rights Agreement or (ii) the Company consents, then
notwithstanding anything contained herein to the contrary, the holder of this
Warrant may, in its sole discretion, exercise this Warrant in whole or in
part and, in lieu of making the cash payment otherwise contemplated to be
made to the Company upon such exercise in payment of the Aggregate Exercise
Price, elect instead to receive upon such exercise the "Net Number" of shares
of Common Stock determined according to the following formula (a "CASHLESS
EXERCISE"):
Net Number = (A X B) - (A X C)
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B
For purposes of the foregoing formula:
A= the total number of shares with respect to which
this Warrant is then being exercised.
B= the Closing Sale Price of the Common Stock (as
reported by Bloomberg) on the date immediately
preceding the date of the Exercise Notice.
C= the Warrant Exercise Price then in effect for the
applicable Warrant Shares at the time of such
exercise.
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Section 3. COVENANTS AS TO COMMON STOCK. The Company
hereby covenants and agrees as follows:
(a) This Warrant is, and any Warrants issued in
substitution for or replacement of this Warrant will upon issuance be, duly
authorized and validly issued.
(b) All Warrant Shares which may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be
validly issued, fully paid and nonassessable and free from all taxes, liens
and charges with respect to the issue thereof.
(c) During the period within which the rights represented
by this Warrant may be exercised, the Company will at all times have
authorized and reserved at least 100% of the number of shares of Common Stock
needed to provide for the exercise of the rights then represented by this
Warrant and the par value of said shares will at all times be less than or
equal to the applicable Warrant Exercise Price.
(d) The Company shall promptly secure the listing of the
shares of Common Stock issuable upon exercise of this Warrant upon each
national securities exchange or automated quotation system, if any, upon
which shares of Common Stock are then listed (subject to official notice of
issuance upon exercise of this Warrant) and shall maintain, so long as any
other shares of Common Stock shall be so listed, such listing of all shares
of Common Stock from time to time issuable upon the exercise of this Warrant;
and the Company shall so list on each national securities exchange or
automated quotation system, as the case may be, and shall maintain such
listing of, any other shares of capital stock of the Company issuable upon
the exercise of this Warrant if and so long as any shares of the same class
shall be listed on such national securities exchange or automated quotation
system.
(e) The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed by it hereunder, but will at all
times in good faith assist in the carrying out of all the provisions of this
Warrant and in the taking of all such action as may reasonably be requested
by the holder of this Warrant in order to protect the exercise privilege of
the holder of this Warrant against dilution or other impairment, consistent
with the tenor and purpose of this Warrant. No impairment of the
designations, preferences and rights of the Preferred Shares contained in the
Company's Certificate of Designations or any waiver thereof which has an
adverse effect on the rights granted hereunder shall be given effect until
the Company has taken appropriate action (satisfactory to the holders of
Preferred Share Warrants representing at least a majority of the shares of
Common Stock issuable upon the exercise of such Preferred Share Warrants then
outstanding) to avoid such adverse effect with respect to this Warrant.
Without limiting the generality of the foregoing, the Company (i) will not
increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the Warrant Exercise Price then in effect, and
(ii) will take all such actions as may be necessary or
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appropriate in order that the Company may validly and legally issue fully
paid and nonassessable shares of Common Stock upon the exercise of this
Warrant.
Section 4. TAXES. The Company shall pay any and all taxes which
may be payable with respect to the issuance and delivery of Warrant Shares
upon exercise of this Warrant.
Section 5. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as
otherwise specifically provided herein, no holder, as such, of this Warrant
shall be entitled to vote or receive dividends or be deemed the holder of
shares of the Company for any purpose, nor shall anything contained in this
Warrant be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance to the holder of this Warrant of the Warrant
Shares which he or she is then entitled to receive upon the due exercise of
this Warrant. In addition, nothing contained in this Warrant shall be
construed as imposing any liabilities on such holder to purchase any
securities (upon exercise of this Warrant or otherwise) or as a stockholder
of the Company, whether such liabilities are asserted by the Company or by
creditors of the Company. Notwithstanding this Section 5, the Company will
provide the holder of this Warrant with copies of the same notices and other
information given to the stockholders of the Company generally,
contemporaneously with the giving thereof to the stockholders.
Section 6. REPRESENTATIONS OF HOLDER. The holder of this
Warrant, by the acceptance hereof, represents that it is acquiring this
Warrant and the Warrant Shares for its own account for investment only and
not with a view towards, or for resale in connection with, the public sale or
distribution of this Warrant or the Warrant Shares, except pursuant to sales
registered or exempted under the Securities Act; provided, however, that by
making the representations herein, the holder does not agree to hold this
Warrant or any of the Warrant Shares for any minimum or other specific term
and reserves the right to dispose of this Warrant and the Warrant Shares at
any time in accordance with or pursuant to a registration statement or an
exemption under the Securities Act. The holder of this Warrant further
represents, by acceptance hereof, that, as of this date, such holder is an
"accredited investor" as such term is defined in Rule 501(a) of Regulation D
promulgated by the Securities and Exchange Commission under the Securities
Act (an "ACCREDITED INVESTOR"). Upon exercise of this Warrant, other than
pursuant to a Cashless Exercise, the holder shall, if requested by the
Company, confirm in writing, in a form satisfactory to the Company, that the
Warrant Shares so purchased are being acquired for the holder's own account
and not as a nominee for any other party, for investment, and not with a view
toward public distribution or resale, except pursuant to sales registered or
exempted under the Securities Act, and that such holder is an Accredited
Investor. If such holder cannot make such representations because they would
be factually incorrect, it shall be a condition to such holder's exercise of
this Warrant, other than pursuant to a Cashless Exercise, that the Company
receive such other representations as the Company considers reasonably
necessary to assure the Company that the issuance of its securities upon
exercise of this Warrant shall not violate any United States or state
securities laws.
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Section 7. OWNERSHIP AND TRANSFER.
(a) The Company shall maintain at its principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof), a register for this Warrant, in which the
Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee.
The Company may treat the person in whose name any Warrant is registered on
the register as the owner and holder thereof for all purposes,
notwithstanding any notice to the contrary, but in all events recognizing any
transfers made in accordance with the terms of this Warrant.
(b) This Warrant and the rights granted hereunder shall
be assignable by the holder hereof without the consent of the Company.
(c) The Company is obligated to register the Warrant
Shares for resale under the Securities Act pursuant to the Registration
Rights Agreement and the initial holder of this Warrant (and certain
assignees thereof) is entitled to the registration rights in respect of the
Warrant Shares as set forth in the Registration Rights Agreement.
Section 8. ADJUSTMENT OF WARRANT EXERCISE PRICE AND NUMBER OF
SHARES. The Warrant Exercise Price and the number of shares of Common Stock
issuable upon exercise of this Warrant shall be adjusted from time to time as
follows:
(a) ADJUSTMENT OF WARRANT EXERCISE PRICE UPON ISSUANCE OF
COMMON STOCK. If and whenever on or after the date of issuance of this
Warrant the Company issues or sells, or in accordance with this Section 8 is
deemed to have issued or sold, any shares of Common Stock (including the
issuance or sale of shares of Common Stock owned or held by or for the
account of the Company, but excluding shares of Common Stock deemed to have
been issued by the Company (I) in connection with an Approved Stock Plan,
(II) upon conversion of the Preferred Shares, (III) which are an Excluded
Security, of (IV) which are issued or deemed to have been issued by the
Company upon the issuance, exercise or conversion of the Other Securities)
for a consideration per share less than a price (the "APPLICABLE PRICE")
equal to the greater of (i) the Warrant Exercise Price in effect on the date
of such issuance or sale or (ii) the Closing Sale Price of the Common Stock
on the date of such issuance or sale, then immediately after such issue or
sale the Warrant Exercise Price then in effect shall be reduced to an amount
equal to the product of (x) the Warrant Exercise Price in effect immediately
prior to such issue or sale and (y) the quotient determined by dividing (1)
the sum of the product of the Applicable Price and the number of shares of
Common Stock Deemed Outstanding immediately prior to such issue or sale and
the consideration, if any, received by the Company upon such issue or sale,
by (2) the product of the Applicable Price multiplied by the number of shares
of Common Stock Deemed Outstanding immediately after such issue or sale.
(b) EFFECT ON WARRANT EXERCISE PRICE OF CERTAIN EVENTS.
For purposes of determining the adjusted Warrant Exercise Price under Section
8(a) above, the following shall be applicable:
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(i) ISSUANCE OF OPTIONS. If the Company in
any manner grants any Options and the lowest price per share for which one
share of Common Stock is issuable upon the exercise of any such Option or
upon conversion or exchange of any Convertible Securities issuable upon
exercise of any such Option is less than the Applicable Price, then such
share of Common Stock shall be deemed to be outstanding and to have been
issued and sold by the Company at the time of the granting or sale of such
Option for such price per share. For purposes of this Section 8(b)(i), the
"lowest price per share for which one share of Common Stock is issuable upon
exercise of such Options or upon conversion or exchange of such Convertible
Securities" shall be equal to the sum of the lowest amounts of consideration
(if any) received or receivable by the Company with respect to any one share
of Common Stock upon the granting or sale of the Option, upon exercise of the
Option and upon conversion or exchange of any Convertible Security issuable
upon exercise of such Option. No further adjustment of the Warrant Exercise
Price shall be made upon the actual issuance of such Common Stock or of such
Convertible Securities upon the exercise of such Options or upon the actual
issuance of such Common Stock upon conversion or exchange of such Convertible
Securities.
(ii) ISSUANCE OF CONVERTIBLE SECURITIES. If the
Company in any manner issues or sells any Convertible Securities and the
lowest price per share for which one share of Common Stock is issuable upon
the conversion or exchange thereof is less than the Applicable Price, then
such share of Common Stock shall be deemed to be outstanding and to have been
issued and sold by the Company at the time of the issuance or sale of such
Convertible Securities for such price per share. For the purposes of this
Section 8(b)(ii), the "lowest price per share for which one share of Common
Stock is issuable upon the conversion or exchange" shall be equal to the sum
of the lowest amounts of consideration (if any) received or receivable by the
Company with respect to one share of Common Stock upon the issuance or sale
of the Convertible Security and upon conversion or exchange of such
Convertible Security. No further adjustment of the Warrant Exercise Price
shall be made upon the actual issuance of such Common Stock upon conversion
or exchange of such Convertible Securities, and if any such issue or sale of
such Convertible Securities is made upon exercise of any Options for which
adjustment of the Warrant Exercise Price had been or is to be made pursuant
to other provisions of this Section 8(b), no further adjustment of the
Warrant Exercise Price shall be made by reason of such issue or sale.
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(iii) CHANGE IN OPTION PRICE OR RATE OF
CONVERSION. If the purchase price provided for in any Options, the
additional consideration, if any, payable upon the issue, conversion or
exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exchangeable for Common Stock changes at
any time, the Warrant Exercise Price in effect at the time of such change
shall be adjusted to the Warrant Exercise Price which would have been in
effect at such time had such Options or Convertible Securities provided for
such changed purchase price, additional consideration or changed conversion
rate, as the case may be, at the time initially granted, issued or sold. For
purposes of this Section 8(b)(iii), if the terms of any Option or Convertible
Security that was outstanding as of the date of issuance of this Warrant are
changed in the manner described in the immediately preceding sentence, then
such Option or Convertible Security and the Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have been issued
as of the date of such change. No adjustment pursuant to this Section 8(b)
shall be made if such adjustment would result in an increase of the Warrant
Exercise Price then in effect.
(c) EFFECT ON WARRANT EXERCISE PRICE OF CERTAIN EVENTS.
For purposes of determining the adjusted Warrant Exercise Price under
Sections 8(a) and 8(b), the following shall be applicable:
(i) CALCULATION OF CONSIDERATION RECEIVED. If
any Common Stock, Options or Convertible Securities are issued or sold or
deemed to have been issued or sold for cash, the consideration received
therefor will be deemed to be the net amount received by the Company
therefor. If any Common Stock, Options or Convertible Securities are issued
or sold for a consideration other than cash, the amount of such consideration
received by the Company will be the fair value of such consideration, except
where such consideration consists of securities, in which case the amount of
consideration received by the Company will be the average of the Closing Bid
Price of such security for the five consecutive trading days immediately
preceding the date of receipt of such securities. If any Common Stock,
Options or Convertible Securities are issued to the owners of the
non-surviving entity in connection with any merger in which the Company is
the surviving entity, the amount of consideration therefor will be deemed to
be the fair value of such portion of the net assets and business of the
non-surviving entity as is attributable to such Common Stock, Options or
Convertible Securities, as the case may be. The fair value of any
consideration other than cash or securities will be determined jointly by the
Company and the holders of Preferred Share Warrants representing at least a
majority of the shares of Common Stock obtainable upon exercise of the
Preferred Share Warrants then outstanding. If such parties are unable to
reach agreement within ten (10) days after the occurrence of an event
requiring valuation (the "VALUATION EVENT"), the fair value of such
consideration will be determined within five Business Days after the tenth
(10th) day following the Valuation Event by an independent, reputable
appraiser jointly selected by the Company and the holders of Preferred Share
Warrants representing at least a majority of the shares of Common Stock
obtainable upon exercise of the Preferred Share Warrants then outstanding.
The determination of such appraiser shall be final and binding upon all
parties and the fees and expenses of such appraiser shall be borne jointly by
the Company and the holders of Preferred Share Warrants.
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(ii) INTEGRATED TRANSACTIONS. In case any
Option is issued in connection with the issue or sale of other securities
of the Company, together comprising one integrated transaction in which no
specific consideration is allocated to such Options by the parties thereto,
the Options will be deemed to have been issued for a consideration of $0.01.
(iii) TREASURY SHARES. The number of shares of
Common Stock outstanding at any given time does not include shares owned or
held by or for the account of the Company, and the disposition of any shares
so owned or held will be considered an issue or sale of Common Stock unless
such shares are cancelled.
(iv) RECORD DATE. If the Company takes a
record of the holders of Common Stock for the purpose of entitling them (1)
to receive a dividend or other distribution payable in Common Stock, Options
or in Convertible Securities or (2) to subscribe for or purchase Common
Stock, Options or Convertible Securities, then such record date will be
deemed to be the date of the issue or sale of the shares of Common Stock
deemed to have been issued or sold upon the declaration of such dividend or
the making of such other distribution or the date of the granting of such
right of subscription or purchase, as the case may be.
(d) ADJUSTMENT OF WARRANT EXERCISE PRICE UPON SUBDIVISION
OR COMBINATION OF COMMON STOCK. If the Company at any time after the date of
issuance of this Warrant subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares
of Common Stock into a greater number of shares, any Warrant Exercise Price
in effect immediately prior to such subdivision will be proportionately
reduced and the number of shares of Common Stock obtainable upon exercise of
this Warrant will be proportionately increased. If the Company at any time
after the date of issuance of this Warrant combines (by combination, reverse
stock split or otherwise) one or more classes of its outstanding shares of
Common Stock into a smaller number of shares, any Warrant Exercise Price in
effect immediately prior to such combination will be proportionately
increased and the number of shares of Common Stock obtainable upon exercise
of this Warrant will be proportionately decreased. Any adjustment under this
Section 8(d) shall become effective at the close of business on the date the
subdivision or combination becomes effective.
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(e) DISTRIBUTION OF ASSETS. If the Company shall declare
or make any dividend or other distribution of its assets (or rights to
acquire its assets) to holders of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock
or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement or other similar transaction) (a
"DISTRIBUTION"), at any time after the issuance of this Warrant, then, in
each such case:
(i) any Warrant Exercise Price in effect
immediately prior to the close of business on the record date fixed for the
determination of holders of Common Stock entitled to receive the Distribution
shall be reduced, effective as of the close of business on such record date,
to a price determined by multiplying such Warrant Exercise Price by a
fraction of which (A) the numerator shall be the Closing Bid Price of the
Common Stock on the trading day immediately preceding such record date minus
the value of the Distribution (as determined in good faith by the Company's
Board of Directors) applicable to one share of Common Stock, and (B) the
denominator shall be the Closing Bid Price of the Common Stock on the trading
day immediately preceding such record date; and
(ii) either (A) the number of Warrant Shares
obtainable upon exercise of this Warrant shall be increased to a number of
shares equal to the number of shares of Common Stock obtainable immediately
prior to the close of business on the record date fixed for the determination
of holders of Common Stock entitled to receive the Distribution multiplied by
the reciprocal of the fraction set forth in the immediately preceding clause
(i), or (B) in the event that the Distribution is of common stock of a
company whose common stock is traded on a national securities exchange or a
national automated quotation system, then the holder of this Warrant shall
receive an additional warrant to purchase Common Stock, the terms of which
shall be identical to those of this Warrant, except that such warrant shall
be exercisable into the amount of the assets that would have been payable to
the holder of this Warrant pursuant to the Distribution had the holder
exercised this Warrant immediately prior to such record date and with an
exercise price equal to the amount by which the exercise price of this
Warrant was decreased with respect to the Distribution pursuant to the terms
of the immediately preceding clause (i).
(f) CERTAIN EVENTS. If any event occurs of the type
contemplated by the provisions of this Section 8 but not expressly provided
for by such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity
features), then the Company's Board of Directors will make an appropriate
adjustment in the Warrant Exercise Price and the number of shares of Common
Stock obtainable upon exercise of this Warrant so as to protect the rights of
the holders of the Preferred Share Warrants; provided that no such adjustment
pursuant to this Section 8(f) will increase the Warrant Exercise Price or
decrease the number of shares of Common Stock obtainable as otherwise
determined pursuant to this Section 8.
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(g) NOTICES.
(i) Immediately upon any adjustment of a
Warrant Exercise Price, the Company will give written notice thereof to
the holder of this Warrant, setting forth in reasonable detail, and
certifying, the calculation of such adjustment.
(ii) The Company will give written notice to
the holder of this Warrant at least ten (10) days prior to the date on which
the Company closes its books or takes a record (A) with respect to any
dividend or distribution upon the Common Stock, (B) with respect to any pro
rata subscription offer to holders of Common Stock or (C) for determining
rights to vote with respect to any Organic Change (as defined below),
dissolution or liquidation, provided that such information shall be made
known to the public prior to or in conjunction with such notice being
provided to such holder.
(iii) The Company will also give written notice
to the holder of this Warrant at least ten (10) days prior to the date on
which any Organic Change, dissolution or liquidation will take place,
provided that such information shall be made known to the public prior to or
in conjunction with such notice being provided to such holder.
Section 9. PURCHASE RIGHTS; REORGANIZATION, RECLASSIFICATION,
CONSOLIDATION, MERGER OR Sale.
(a) In addition to any adjustments pursuant to Section 8
above, if at any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of Common Stock
(the "PURCHASE RIGHTS"), then the holder of this Warrant will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which such holder could have acquired if such holder had held
the number of shares of Common Stock acquirable upon complete exercise of
this Warrant immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such record is
taken, the date as of which the record holders of Common Stock are to be
determined for the grant, issue or sale of such Purchase Rights.
(b) Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Company's assets
to another Person or other transaction in each case which is effected in such a
way that holders of Common Stock are entitled to receive (either directly or
upon subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock is referred to herein as an "ORGANIC CHANGE." Prior to
the consummation of any (i) sale of all or substantially all of the Company's
assets to an acquiring Person or (ii) other Organic Change following which the
Company is not a surviving entity, the Company will secure from the Person
purchasing such assets or the successor resulting from such Organic Change (in
each case, the "ACQUIRING ENTITY") a written agreement (in form and substance
reasonably satisfactory to the holders of Preferred Share Warrants representing
at least a majority of the shares of Common Stock obtainable upon exercise of
the Preferred Share Warrants then outstanding) to deliver to each holder of
Preferred Share Warrants in exchange for such Warrants, a security of the
Acquiring Entity evidenced by a written instrument substantially similar in form
and substance to this Warrant and reasonably satisfactory to the holders of at
least a majority of the Preferred Share
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Warrants then outstanding (including, an adjusted warrant exercise price
equal to the value for the Common Stock reflected by the terms of such
consolidation, merger or sale, and exercisable for a corresponding number of
shares of Common Stock acquirable and receivable upon exercise of the
Preferred Share Warrants (without regard to any limitations or exercise), if
the value so reflected is less than any Warrant Exercise Price in effect
immediately prior to such consolidation, merger or sale). Prior to the
consummation of any other Organic Change, the Company shall make appropriate
provision (in form and substance reasonably satisfactory to the holders of
Preferred Share Warrants representing at least a majority of the shares of
Common Stock obtainable upon exercise of the Preferred Share Warrants then
outstanding) to insure that each of the holders of the Preferred Share
Warrants will thereafter have the right to acquire and receive in lieu of or
in addition to (as the case may be) the shares of Common Stock immediately
theretofore acquirable and receivable upon the exercise of such holder's
Preferred Share Warrants (without regard to any limitations or exercise),
such shares of stock, securities or assets that would have been issued or
payable in such Organic Change with respect to or in exchange for the number
of shares of Common Stock which would have been acquirable and receivable
upon the exercise of such holder's Warrant as of the date of such Organic
Change (without taking into account any limitations or restrictions on the
exerciseability of this Warrant).
Section 10. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this
Warrant is lost, stolen, mutilated or destroyed, the Company shall promptly,
on receipt of an indemnification undertaking (or, in the case of a mutilated
Warrant, the Warrant), issue a new Warrant of like denomination and tenor as
this Warrant so lost, stolen, mutilated or destroyed.
Section 11. NOTICE. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Warrant must be in writing and will be deemed to have been delivered: (i)
upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or (iii) one
Business Day after deposit with an overnight courier service, in each case
properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
If to the Company:
Intraware, Inc.
200 Powell Street, Suite 140
Emeryville, California 94608
Telephone: (925) 253-4500
Facsimile: (510) 597-4890
Attention: President
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With a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
Telephone: (650) 493-9300
Facsimile: (650) 493-6811
Attention: Adam R. Dolinko, Esq.
If to a holder of this Warrant, to it at the address and facsimile number set
forth on the Schedule of Buyers to the Securities Purchase Agreement, with
copies to such holder's representatives as set forth on such Schedule of
Buyers, or at such other address and facsimile as shall be delivered to the
Company upon the issuance or transfer of this Warrant. Each party shall
provide five days' prior written notice to the other party of any change in
address or facsimile number. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the
first page of such transmission or (C) provided by an overnight courier
service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from an overnight courier service in accordance with
clause (i), (ii) or (iii) above, respectively.
Section 12. DATE. The date of this Warrant is ___________. This
Warrant, in all events, shall be wholly void and of no effect after the close
of business on the Expiration Date, except that notwithstanding any other
provisions hereof, the provisions of Section 7(c) shall continue in full
force and effect after such date as to any Warrant Shares or other securities
issued upon the exercise of this Warrant.
Section 13. AMENDMENT AND WAIVER. Except as otherwise provided
herein, the provisions of the Preferred Share Warrants may be amended and the
Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company has obtained the
written consent of the holders of Preferred Share Warrants representing at
least a majority of the shares of Common Stock obtainable upon exercise of
the Preferred Share Warrants then outstanding; provided that no such action
may increase the Warrant Exercise Price of any Preferred Share Warrant or
decrease the number of shares or class of stock obtainable upon exercise of
any Preferred Share Warrant without the written consent of the holder of such
Preferred Share Warrant.
Section 14. DESCRIPTIVE HEADINGS; GOVERNING LAW. The descriptive
headings of the several sections and paragraphs of this Warrant are inserted
for convenience only and do not constitute a part of this Warrant. The
corporate laws of the State of Delaware shall govern all issues concerning
the relative rights of the Company and its stockholders. All other questions
concerning the construction, validity, enforcement and interpretation of this
Warrant shall be governed by the internal laws of the State of Illinois,
without giving effect to any choice of law
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or conflict of law provision or rule (whether of the State of Illinois, or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Illinois.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by ___________________, its ____________________________, as of ____________,
2000.
INTRAWARE, INC.
By:
--------------------------------
Name:
------------------------------
Title:
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<PAGE>
EXHIBIT A TO WARRANT
SUBSCRIPTION FORM
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT
INTRAWARE, INC.
The undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("WARRANT SHARES") of
Intraware, Inc., a Delaware corporation (the "COMPANY"), evidenced by the
attached Warrant (the "WARRANT"). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.
1. Form of Warrant Exercise Price. The Holder intends that payment
of the Warrant Exercise Price shall be made as:
____________ a "CASH EXERCISE" with respect to
_________________ arrant Shares; and/or
____________ a "CASHLESS EXERCISE" with respect to
_______________ Warrant Shares(to the extent
permitted by the terms of the Warrant).
2. Payment of Warrant Exercise Price. In the event that the holder
has elected a Cash Exercise with respect to some or all of the Warrant Shares
to be issued pursuant hereto, the holder shall pay the sum of
$___________________ to the Company in accordance with the terms of the
Warrant.
3. Delivery of Warrant Shares. The Company shall deliver to the
holder __________ Warrant Shares in accordance with the terms of the Warrant.
Date: _______________ __, ______
Name of Registered Holder
By:
-------------------------------
Name:
Title:
<PAGE>
ACKNOWLEDGMENT
The Company hereby acknowledges this Exercise Notice and hereby
directs [TRANSFER AGENT] to issue the above indicated number of shares of
Common Stock in accordance with the Transfer Agent Instructions dated
____________, 2000 from the Company and acknowledged and agreed to by
[TRANSFER AGENT].
INTRAWARE, INC.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
<PAGE>
EXHIBIT B TO WARRANT
FORM OF WARRANT POWER
FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
________________, Federal Identification No. __________, a warrant to
purchase ____________ shares of the capital stock of Intraware, Inc., a
Delaware corporation, represented by warrant certificate no. _____, standing
in the name of the undersigned on the books of said corporation. The
undersigned does hereby irrevocably constitute and appoint ______________,
attorney to transfer the warrants of said corporation, with full power of
substitution in the premises.
Dated: _________, ____
------------------------------------
Name:
-------------------------------
Title:
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