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Exhibit 10.2

SUBSCRIPTION AGREEMENT

THIS SUBSCRIPTION AGREEMENT made as of this 2nd day of April, 2001 between
Intraware, Inc., a corporation organized under the laws of the State of Delaware
with offices at 25 Orinda Way, Suite 101, Orinda, California 94563 (the
"Company"), and the undersigned (the "Subscriber", and together with each of the
other subscribers in the Offering (defined below), the "Subscribers").

WHEREAS, the Company desires to issue a minimum of six (6) (the "Minimum
Offering") and a maximum of fourteen (14) units (including fractions thereof)
(the "Maximum Offering") (such units, the "Preferred Units") in a private
placement (the "Offering"), each Unit consisting of (a) 50,000 shares of
Series B Convertible Preferred Stock (the "Preferred Shares") convertible into
shares (the "Conversion Shares") of the Company's common stock, $0.0001 par
value (the "Common Stock"), and (ii) a warrant (the "Preferred Warrants") to
purchase shares of Common Stock representing 20% (subject to adjustment) of the
number of shares of Common Stock issuable upon conversion of 50,000 of the
Preferred Shares (the "Warrant Shares" and, together with the Conversion Shares,
the "Issuable Shares"); and

WHEREAS, [                  ] is acting as placement agent (the "Placement
Agent") in the Offering pursuant to a Placement Agency Agreement dated April 2,
2001 between the Company and the Placement Agent (the "Agency Agreement"); and

WHEREAS, the Preferred Shares are convertible into the Conversion Shares on the
terms set forth in the Company's Certificate of Designations, Preferences and
Rights of Series B Convertible Preferred Stock (the "Series B Designation"), the
form of which is attached to this Subscription Agreement as Exhibit A.

WHEREAS, each Warrant represents the right to purchase one share of Common Stock
(the "Warrant Shares") on the terms set forth in the Preferred Warrant, the form
of which is attached to this Subscription Agreement as Exhibit B; and

WHEREAS, the Conversion Shares and the 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, the Subscriber is delivering simultaneously herewith a completed
confidential investor questionnaire (the "Questionnaire").

NOW, THEREFORE, for and in consideration of the promises 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 Preferred 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 Preferred Units as is set forth upon
the signature page hereof at a price equal to $500,000 per Unit and the Company
agrees to sell such Preferred Units to the Subscriber for said purchase price
subject to the Company's right to sell to the Subscriber such lesser number of
Preferred Units as the Company may, in its sole discretion, deem necessary or
desirable. The purchase price is payable by certified or bank check made payable
to "American Stock Transfer & Trust Company as escrow agent for Intraware, Inc."
(American Stock Transfer & Trust Company is referred to as the "Escrow Agent")
or by wire transfer of funds, contemporaneously with the execution and delivery
of this Subscription Agreement. 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

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Agent. The Preferred Shares and Preferred Warrants shall be delivered by the
Company within five (5) business days following the consummation of the Offering
as set forth in Article III.

1.2  Reliance on Exemptions. The Subscriber acknowledges that this offering of
Preferred Units has not been reviewed by the United States Securities and
Exchange Commission ("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 Preferred Units.

1.3  Investment Purpose. The Subscriber represents that the Preferred Shares and
Preferred Warrants comprising its Preferred 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 Preferred
Shares or Preferred Warrants 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 Preferred 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
Preferred Units involves a high degree of risk in that: (i) the Company has
incurred substantial losses from operations; (ii) 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 Preferred Units;
(iii) an investment in the Preferred Units is illiquid; (iv) transferability of
the securities comprising the Preferred Units is extremely limited; and (v) the
Company will 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.

1.6  Information. The Subscriber acknowledges receipt and careful review of:
(a) the Annual Report of the Company for the fiscal year ended February 29, 2000
filed with the SEC on Form 10-K on May 26, 2000, as amended on November 9, 2000,
(b) the Quarterly Report of the Company for the fiscal quarter ended May 31,
2000 filed with the SEC on Form 10-Q on July 17, 2000, (c) the Quarterly Report
of the Company for the fiscal quarter ended August 31, 2000 filed with the SEC
on Form 10-Q on October 16, 2000, (d) the Quarterly Report of the Company for
the fiscal quarter ended November 30, 2000 filed with the SEC on Form 10-Q on
January 16, 2001, (e) a Confidential Executive Summary prepared by the Company
and attached hereto as Schedule 1.6 (the "Confidential Executive Summary"),
(f) the Agency Agreement, (g) the Preferred Warrant, (h) this Subscription
Agreement, (i) the Registration Rights Agreement, (j) the Series B Designation,
and (k) all exhibits, schedules and appendices which are part of the
aforementioned documents (collectively, the "Offering Documents"), and hereby
represents that: (i) it has been furnished by the Company during the course of
this transaction with all information regarding the Company which it has
requested; and (ii) that it 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 Offering, and any additional information which
it has requested.

1.7  No Representations. The Subscriber hereby represents that, except as
expressly set forth in the Offering Documents, no representations or warranties
have been made to the Subscriber by the

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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
and the results of independent investigation by the Subscriber.

1.8  Tax Consequences. The Subscriber acknowledges that this offering of
Preferred Units 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 Preferred Units.

1.9  Transfer or Resale. The Subscriber understands that, except as set forth in
the Registration Rights Agreement: (a) the Preferred Units have not been and are
not being registered under the 1933 Act or any state securities laws; (b) the
Preferred Shares, the Conversion Shares, the Preferred Warrants and the Warrant
Shares (collectively, the "Securities") may not be offered for sale, sold,
assigned, transferred or otherwise disposed of (each a "Disposition") unless,
prior to effecting any such Disposition, (i) (A) such Securities, or the
offering of such Securities, as applicable, are or is subsequently registered
under the 1933 Act, (B) the Subscriber delivers to the Company an opinion of
counsel, in a reasonably acceptable form, that a Disposition of the Securities
may be made pursuant to an exemption from such registration, or (C) the
Subscriber provides the Company with reasonable assurance that a Disposition of
the Securities may be made pursuant to Rule 144 promulgated under the 1933 Act
(the "Rule") and (ii) the Subscriber and all direct or indirect transferees in
any such Disposition have agreed in writing upon the aggregate number of
Issuable Shares that each such direct or indirect transferee may receive upon
the conversion or exercise, as the case may be, of the Preferred Shares and the
Preferred Warrants transferred to such transferee so that such exercise or
conversion does not, when aggregated with conversions or exercises allocated to
the Subscriber and any other transferees of such Subscriber, exceed the Per
Subscriber Limit (defined below); (c) any Disposition of Securities made in
reliance upon the Rule may be made only in accordance with the terms of the Rule
and further, if the Rule is not applicable, any Disposition of the Securities
under circumstances in which the seller (or the person through whom the
Disposition is made) may be deemed to be an underwriter (as such term is defined
in the 1933 Act) may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC promulgated thereunder; and (d) the
Company is under no obligation to register the Securities under the 1933 Act or
any state securities laws or to comply with the terms and conditions of any
registration exemption thereunder.

1.10  Lock-Up. The Subscriber hereby agrees to enter into a lock-up agreement
(the "Lock-Up Agreement") in the form attached hereto as Exhibit D, provided
that (i) Frost Prioleau enters into a substantially similar agreement,
(ii) Peter Jackson enters into a lock-up agreement in the form attached hereto
as Exhibit E (the "Jackson Lock-Up") and (iii) each of David Dunlap, Norman
Pensky, Donald Freed, Paul Martinelli and James Brentano enter into a lock-up
agreement in the form attached hereto as Exhibit F (together, the "Other
Lock-Ups").

1.11  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.

1.12  Legends. The Subscriber understands that the certificates or other
instruments representing the Securities, until such time as they have been
registered under the 1933 Act as contemplated by the Registration Rights
Agreement, 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

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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.

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 registered 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 may be 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.

The Subscriber acknowledges that any certificates representing the Securities
will bear a legend stating that the securities represented by such certificates
are subject to the terms of the Lock-Up Agreement.

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 Preferred
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  Residency. The Subscriber represents that its principal address is
furnished at the end of this Subscription Agreement.

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 Preferred Units or any use of this
Subscription Agreement, including: (a) the legal requirements within its
jurisdiction for the purchase of the Preferred 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 comprising the Preferred Units. Such Subscriber's
subscription and payment for, and his or her continued beneficial ownership of
the Preferred Units, will not violate any applicable securities or other laws of
the Subscriber's jurisdiction.

1.16  NASD Member. The Subscriber acknowledges that if it is a Registered
Representative of a NASD member firm, the Subscriber must give such firm notice
required by the NASD's Rules of Fair Practice, receipt of which must be
acknowledged by such firm on the signature page hereof.

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  Organization and Qualification. The Company and its "Subsidiaries" (which
for purposes of this Subscription Agreement means any entity in which the
Company, directly or indirectly, owns capital stock and holds a majority or
similar interest) are duly organized and validly existing in good standing under
the laws of the jurisdiction in which they were organized, and have the
requisite power and authorization to own their properties and to carry on their
business as now being conducted. Each of the Company and its Subsidiaries 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

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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 and its Subsidiaries, if any, taken as a whole, 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. A complete list of all Subsidiaries of the Company with
substantive business activities is set forth in Schedule 2.1.

2.2  Authorization; Enforcement; Validity. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Subscription Agreement and 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. The Offering
Documents have been duly executed and delivered by the Company, and constitute
valid and binding obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies.

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. 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 any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries 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
or any of its Subsidiaries; (iv) there are no agreements or arrangements under
which the Company or any of its Subsidiaries is obligated to register the sale
of any of their securities under the 1933 Act; (v) there are no outstanding
securities of the Company or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to redeem a security of the Company or any of its
Subsidiaries; (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 Documents; 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 no security holder has any
rescission rights with respect thereto.

2.4  Issuance of Securities; Reservation. The issuance, sale and delivery of the
Securities have been duly authorized by all requisite corporate action by the
Company and, upon issuance in accordance with the Offering Documents, shall be
(a) duly authorized, validly issued, fully paid and non-assessable,

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(b) free from all taxes, liens and charges with respect to the issue thereof,
and (c) entitled to the rights and preferences set forth in the Series B
Designation and the Preferred Warrants. At least 12,850,000 shares of Common
Stock have been duly authorized and reserved for issuance upon conversion of the
Preferred Shares and exercise of the Preferred Warrants. In the event the number
of shares of Common Stock issuable upon conversion or exercise of the Preferred
Shares or the Preferred Warrants exceed the number of authorized shares of
Common Stock as a result of the conversion price or exercise price reset terms
of the Preferred Shares or Preferred Warrants, the Company shall use its best
efforts to seek stockholder approval of and file a Certificate of Amendment to
increase the authorized number of shares of Common Stock accordingly. Upon
conversion of the Preferred Shares or exercise of the Preferred Warrants in
accordance with the Series B Designation or the Preferred Warrants, as the case
may be, the Conversion Shares and the Warrant Shares will be duly authorized,
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue thereof, with the holders being entitled to
all rights accorded to a holder of Common Stock. Assuming (i) the accuracy of
the information provided by the respective Subscribers in the Subscription
Agreement and Questionnaire, (ii) that all of the offerees and Subscribers are
"accredited investors" as such term is defined in Rule 501 of Regulation D, and
(iii) that the Placement Agent has not engaged, nor will engage, in connection
with the Offering, in any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D, the offer and sale of the
Preferred Shares and the Preferred Warrants pursuant to the terms of this
Subscription Agreement are and will be 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 disqualification contained in Rule 507 thereof or otherwise.

2.5  No Conflicts. Except as set forth in Schedule 2.5, the execution, delivery
and performance of the Offering Documents by the Company, the consummation by
the Company of the transactions contemplated by the Offering Documents, and the
performance by the Company of its obligations under the Series B Designation and
the Preferred Warrants, including without limitation, the reservation for
issuance and the issuance of the Securities, will not (a) result in a violation
of the Company's Certificate of Incorporation, any certificate of designations,
preferences and rights of any outstanding series of preferred stock of the
Company, or the Company's bylaws, (b) conflict with, or constitute a default or
an event which with notice or lapse of time or both would become a default
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, lease, license or instrument (including
without limitation, any document filed as an exhibit to any of the Company's SEC
Documents (as defined below)), or (c) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations and the rules and regulations of The Nasdaq National
Market, Inc.) applicable to the Company or any of its Subsidiaries or by which
any property or asset of the Company or any of its Subsidiaries is bound or
affected.

2.6  Consents. Except as contemplated by the Agency Agreement, and except for
the filing of the Registration Statement (as defined in the Registration Rights
Agreement) with the SEC, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency or any regulatory or self-regulatory agency in order for it
to execute, deliver or perform any of its obligations under or contemplated by
the Offering Documents. Except as otherwise provided in the Offering Documents,
all consents, authorizations, orders, filings and registrations which 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 and its
Subsidiaries are unaware of any facts or circumstances which might prevent the
Company from obtaining or effecting any of the foregoing.

2.7  No General Solicitation. None of the Company, its Subsidiaries, any of
their affiliates, and any person acting on their behalf, has engaged in any form
of general solicitation or general advertising

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(within the meaning of Regulation D under the 1933 Act) in connection with the
offer or sale of the Securities.

2.8  No Integrated Offering. None of the Company, its Subsidiaries, any of their
affiliates, and any person acting on their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any
security, under circumstances that would require registration of any of the
Securities under the 1933 Act or cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of the 1933 Act 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 Subsidiaries, their affiliates and any person acting on their
behalf will take any action or steps referred to in the preceding sentence that
would require registration of any of the Securities under the 1933 Act or cause
the offering of the Securities to be integrated with other offerings.

2.9  Application of Takeover Protections; Rights Agreement. The Company and its
board of directors 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 Subscription
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.

2.10  SEC Documents; Financial Statements. Since February 29, 2000, the Company
has filed all reports, schedules, forms, statements and other documents required
to be filed by it with the SEC pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act") (all of the
foregoing filed prior to the date hereof and all exhibits included therein and
financial statements and schedules thereto and documents incorporated by
reference therein being hereinafter referred to as the "SEC Documents"). 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 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (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
Common Stock issuable upon exercise of the Preferred Warrant and upon conversion
of the Preferred Shares.

2.11  Conduct of Business; Regulatory Permits. Except as set forth on
Schedule 2.11, since February 29, 2000 the Company has not (a)  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, having a Material Adverse Effect, (b) made or
suffered any

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changes in its contingent obligations by way of guaranty, endorsement (other
than the endorsement of checks for deposit in the usual and ordinary course of
business), indemnity, warranty or otherwise, (c) discharged or satisfied any
liens other than those securing, or paid any obligation or liability other than,
current liabilities shown on the balance sheet dated as at February 29, 2000 and
forming part of the SEC Documents, and current liabilities incurred since the
February 29, 2000, in each case in the usual and ordinary course of business,
(d) mortgaged, pledged or subjected to lien any of its assets, tangible or
intangible, (e) sold, transferred or leased any of its assets except in the
usual and ordinary course of business, (f) cancelled or compromised any debt or
claim, or waived or released any right, of material value, (g) suffered any
physical damage, destruction or loss (whether or not covered by insurance)
adversely affecting the properties, business or prospects of the Company,
(h) entered into any transaction other than in the usual and ordinary course of
business except for this Subscription Agreement and the related agreements
referred to herein, (i) encountered any labor difficulties or labor union
organizing activities, (j) made or granted any wage or salary increase or
entered into any employment agreement, (k) 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, (l) declared or paid any dividends
on or made any other distributions with respect to, or purchased or redeemed,
any of its outstanding equity securities, (m) 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, having (either by itself or in conjunction with all such other
changes, events and conditions) a Material Adverse Effect, (n) made any change
in the accounting principles, methods or practices followed by it or
depreciation or amortization policies or rates theretofore adopted, or
(o) entered into any agreement, or otherwise obligated itself, to do any of the
foregoing. Neither the Company nor any of its Subsidiaries is in violation of
any judgment, decree or order or any statute, ordinance, rule or regulation
applicable to the Company or its Subsidiaries, and neither the Company nor any
of its Subsidiaries will conduct its business in violation of any of the
foregoing, except for possible violations which would not, individually or in
the aggregate, have a Material Adverse Effect. The Company's Common Stock has
been designated for quotation or listed on the Nasdaq National Market, trading
in the Common Stock has not been suspended by the SEC or the Nasdaq National
Market and the Company has received no communication, written or oral, from the
SEC or the Nasdaq National Market regarding the suspension or delisting of the
Common Stock from the Nasdaq National Market. Except as disclosed on
Schedule 2.11, the Company is not in violation of the listing requirements of
the Nasdaq National Market 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 the Nasdaq National Market in the foreseeable future. The
Company and its Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, except where the
failure to possess such certificates, authorizations or permits would not have,
individually or in the aggregate, a Material Adverse Effect, and neither the
Company nor any such Subsidiary has received any notice of proceedings relating
to the revocation or modification of any such certificate, authorization or
permit.

2.12  Foreign Corrupt Practices. Neither the Company, nor any of its
Subsidiaries, nor any director, officer, agent, employee or other person acting
on behalf of the Company or any of its Subsidiaries has, in the course of its
actions for, or on behalf of, the Company, (a) 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,
(b) violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended, or (c) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.

2.13  Absence of Litigation. Except as set forth in Schedule 2.13, there is no
action, suit, proceeding, inquiry or investigation before or by the Nasdaq
National Market, any court, public board, government

8

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agency, self-regulatory organization or body, or arbitrator pending or, to the
knowledge of the Company, threatened against the Company, the Common Stock or
any of the Company's Subsidiaries or any of the Company's or the Company's
Subsidiaries' officers or directors in their capacities as such.

2.14  Tax Status. The Company and each of its Subsidiaries has made or filed all
federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject, and has paid all taxes and
other governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations or otherwise due
and payable, except those being contested in good faith and has set aside on its
books reserves in accordance with GAAP reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.

2.15  Securities Law Compliance. The offer, offer for sale, and sale of the
Preferred Units has not been registered with the SEC. The Preferred 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 conduct
the Offering in compliance with the requirements of Regulation D under the 1933
Act, and the Company will file all appropriate notices of offering with the SEC.

2.16  Title. Except as set forth in or contemplated by Schedule 2.16, the
Company has good and marketable title to all material properties and tangible
assets owned by it, free and clear of all liens, charges, encumbrances or
restrictions, except as 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, leases or licenses all such properties
as are necessary to its operations as described in the Offering Documents.

2.17  Intellectual Property Rights. To the Company's knowledge after due
investigation, the Company and its Subsidiaries own or possess adequate rights
or licenses to use all trademarks, trade names, service marks, service mark
registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets and rights
necessary to conduct their respective businesses as now conducted. Except as set
forth on Schedule 2.17, to the Company's knowledge after due investigation, none
of the Company's trademarks, trade names, service marks, service mark
registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, government authorizations, trade secrets or other
intellectual property rights have expired or terminated, or are expected to
expire or terminate within two years from the date of this Subscription
Agreement, except where such expiration or termination would not have either
individually or in the aggregate a Material Adverse Effect. After due
investigation, the Company and its Subsidiaries do not have any knowledge of any
infringement by the Company or its Subsidiaries of trademarks, trade name
rights, patents, patent rights, copyrights, inventions, licenses, service names,
service marks, service mark registrations, trade secrets or other similar rights
of others, or of any such development of similar or identical trade secrets or
technical information by others and, except as set forth on Schedule 2.17, no
claim, action or proceeding has been made or brought against, or to the
Company's knowledge, has been threatened against, the Company or its
Subsidiaries regarding trademarks, trade name rights, patents, patent rights,
inventions, copyrights, licenses, service names, service marks, service mark
registrations, trade secrets or other infringement, except where such
infringement, claim, action or proceeding would not reasonably be expected to
have either individually or in the aggregate a Material

9

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Adverse Effect. Except as set forth on Schedule 2.17, the Company and its
Subsidiaries are unaware, after due investigation, of any facts or circumstances
which might give rise to any of the foregoing. The Company and its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their intellectual properties except where the failure to do
so would not have either individually or in the aggregate a Material Adverse
Effect.

2.18  Registration Rights. Except with respect to holders of the Preferred Units
and the Preferred Warrant, and except as set forth in Schedule 2.18, no person
has any right to cause the Company to effect the registration under the 1933 Act
of any securities of the Company.

2.19  Brokers. Neither the Company nor any of its officers, directors, employees
or stockholders has employed any broker or finder in connection with the
transactions contemplated by the Agency Agreement other than the Placement
Agent.

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 of securities
by the Company.

2.21  Interim Financial Statements. Attached hereto as Schedule 2.21 are
complete and accurate copies of the Company's unaudited, consolidated financial
statements as of and for the three (3) month period and as of and for the year
ended February 28, 2001 (the "Financial Statements"). To the best of the
Company's knowledge as of the date hereof, and except as set forth in
Schedule 2.21 or in any notes to the Financial Statements, the Financial
Statements (including any notes thereto) were prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the period indicated and prior periods and present fairly and
accurately the consolidated financial position, results of operations and cash
flows of the Company as of and for the three (3) month period and as of and for
the year ended February 28, 2001 (in each case, subject to normal year-end audit
adjustments).

2.22  Disclosure. None of the representations and warranties of the Company
appearing in this Subscription Agreement or any information appearing in any
Exhibit or Schedule hereto or in any of the Offering Documents, when considered
together as a whole, contains, or on any Closing Date will contain, any untrue
statement of a material fact or omits, or on any Closing Date will omit, to
state any material fact required to be stated herein or therein in order for the
statements herein or therein, in light of the circumstances under which they
were made, not to be misleading.

2.23  Certain Officers. As of the date hereof, Peter Jackson, Frost Prioleau,
James Brentano, David Dunlap, Paul Martinelli and Norman Pensky (the "Key
Executives") are employed by the Company on a full-time basis, and, to the
Company's knowledge, none of the Key Executives is planning to cease being
employed by the Company on a full-time basis in their current capacity and the
Company is not aware of any circumstances related to the employment of the Key
Executives, apart from circumstances related to the operations of the Company as
a whole, that could result in cessation of full-time employment of any of the
Key Executives in their current capacities.

III. TERMS OF SUBSCRIPTION

3.1  Closing and Termination of Offering. Provided the Minimum Offering shall
have been subscribed for, funds representing the sale thereof shall have
cleared, all conditions to closing set forth in Section 3 of the Agency
Agreement and Articles V and VI hereof have been satisfied or waived and neither
the Company nor the Placement Agent have notified the other that they do not
intend to effect the closing of the Minimum Offering, a closing (the "Initial
Preferred Closing") shall take place at the offices of counsel to the Placement
Agent, Paul, Hastings, Janofsky & Walker LLP, 345 California Street, 29th Floor,
San Francisco, California, within three (3) business days thereafter (but in no
event later than five days following the Preferred Termination Date), which
closing date may be accelerated

10

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or adjourned by agreement between the Company and the Placement Agent. At the
Initial Preferred Closing, payment for the Preferred Units issued and sold by
the Company shall be made against delivery of the Preferred Shares and Preferred
Warrants comprising such Preferred Units. The Company and the Placement Agent
may consummate subsequent closings of the Offering, upon mutual agreement only,
each of which shall be subject to satisfaction or waiver of the conditions to
closing set forth in Articles V and VI hereof and in Section 3 of the Agency
Agreement, and each of which shall be deemed a "Preferred Closing" hereunder.
The date of the last closing of the Offering is hereinafter referred to as the
"Final Closing" and the date of any Preferred Closing hereunder is hereinafter
referred to as a "Closing Date". The offering period for the Offering (the
"Preferred Offering Period") shall commence on the day the Transaction Documents
(as defined in the Agency Agreement) relating thereto are first made available
to [                  ] by the Company for delivery in connection with the
offering for sale of the Preferred Units and shall continue until the earlier to
occur of: (i) the sale of the Maximum Offering; or (ii) 5:00 p.m. (New York
time), April 26, 2001. In any event, however, the Placement Agent shall use its
reasonable best efforts to close at least $3,000,000 of gross proceeds of the
Offering by 11:59 p.m. (New York time) on April 3, 2001. If the Minimum Offering
is not sold by 11:59 p.m. (New York time) on April 3, 2001, the Offering will be
terminated and all funds received from Subscribers will be returned, without
interest and without any deduction. The day that the Preferred Offering Period
terminates is hereinafter referred to as the "Preferred Termination Date." The
Preferred Termination Date may be extended for up to thirty (30) days by mutual
agreement of the Placement Agent and the Company.

3.2  Expenses; Fees. Simultaneously with payment for and delivery of the
Preferred Units at each Preferred Closing, the Company shall: (A) pay to the
Placement Agent a cash fee equal to 6% of the gross proceeds of the Preferred
Units sold (the "Cash Fee"); (B) reimburse the Placement Agent for its actual
out-of-pocket expenses incurred in connection with the Offering, including,
without limitation, the reasonable fees and expenses of its counsel (Paul,
Hastings, Janofsky & Walker LLP), including, without limitation, due diligence
investigation expenses, travel and mailing expenses, up to a maximum of $60,000,
which amount may be increased with the prior written consent of the Company, and
(C) pay all expenses in connection with the qualification of the Securities
under the blue sky laws of the states which the Placement Agent shall designate,
including legal fees, filing fees and disbursements of Placement Agent's counsel
in connection with such blue sky matters.

3.3  Escrow. Pending the sale of the Preferred Units, all funds paid hereunder
shall be deposited by the Company in escrow with American Stock Transfer & Trust
Company. If the Company shall not have obtained subscriptions (including this
subscription) for purchases of at least six (6) Preferred Units ($3,000,000) on
or before the Preferred Termination Date, then this subscription shall be void
and all funds paid hereunder by the Subscriber, without interest, shall be
promptly returned to the Subscriber, subject to Section  3.5 hereof. If at least
six (6) Preferred Units ($3,000,000) are sold on or prior to the Preferred
Termination Date, then all subscription proceeds shall be paid over to the
Company within three (3) business days thereafter at an initial closing. In such
event, placements of additional Preferred Units may continue until the Preferred
Termination Date, with subsequent releases of funds to be at the mutual consent
of the Company and the Placement Agent.

3.4  Certificates. The Subscriber hereby authorizes and directs the Company,
upon each closing in the Offering, to deliver certificates representing the
securities 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.

3.5  Return of Funds. The Subscriber hereby authorizes and directs the Company
to return any funds for unaccepted subscriptions to the same account from which
the funds were drawn, including any customer account maintained with the
Placement Agent.

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3.6  Irrevocable Proxy. The Subscriber hereby grants to the Placement Agent an
irrevocable proxy to vote such Subscriber's Preferred Shares in the election of
the Company's Board of Directors, and otherwise authorizes the Placement Agent
to take all action the Placement Agent may deem necessary in order to elect the
director (the "Series B Director") which the holders of the Preferred Shares are
entitled to elect under Section 1(c) of the Series B Designation and to
designate and elect such director's replacement, and the Subscriber agrees that
the Placement Agent may choose, in its sole discretion, the person to be so
elected or designated.

IV. COVENANTS

4.1  Registration Rights Agreement. The Company shall provide for the
registration of the Conversion Shares and the Warrant Shares for resale under
the 1933 Act, as provided herein and in the Registration Rights Agreement. The
Company and the Subscriber agree to the terms and provisions of Registration
Rights Agreement attached hereto as Exhibit C, which terms and provisions are
incorporated herein by reference in their entirety and made a part hereof.

4.2  Best Efforts. Each party shall use its best efforts timely to satisfy each
of the conditions to be satisfied by it as provided in Articles V and VI of this
Subscription Agreement.

4.3  Form D and Blue Sky. The Company shall file a Form D with respect to the
Preferred Shares and Preferred Warrants as required under Regulation D under the
1933 Act and, upon request, provide a copy thereof to the Subscriber promptly
after such filing. The Company shall, on or before the Closing, take such action
as the Company shall reasonably determine is necessary in order to obtain an
exemption for or to qualify the Preferred Shares and the Preferred Warrants for
sale to the Subscriber pursuant to this Subscription Agreement under applicable
securities or "Blue Sky" laws of the states of the United States, and shall
provide evidence of any such action so taken to the Subscriber on or prior to
the Closing. The Company shall make all filings and reports relating to the
offer and sale of the Securities required under applicable securities or "Blue
Sky" laws of the states of the United States following the Closing.

4.4  No Redemption or Repurchase. Unless approved by (A) the vote or written
consent of the holders of a majority of the Preferred Shares (treating for this
purpose, the holders of Conversion Shares issued upon conversion of the
Preferred Shares as holders of the Preferred shares) or (B) the Series B
Director and except as otherwise provided in the Transaction Documents, the
Company shall not purchase or redeem any capital stock of the Company or any
Subsidiary or any indebtedness of the Company or any Subsidiary convertible into
or exchangeable for its capital stock or any option, warrant or right to
purchase any such capital stock or convertible security. Notwithstanding the
foregoing, the Company may repurchase from its employees shares of Common Stock
purchased by its employees pursuant to early exercises of stock options or
restricted stock purchases if such employees terminated their employment with
the Company prior to the vesting of ownership of such shares and if the Company
pays no more per share of Common Stock than the purchase price per share paid by
such employees.

4.5  Use of Proceeds. The Company shall only use the proceeds of the sale of the
Preferred Shares and Preferred Warrants for the purpose set forth on
Schedule 4.5 hereto.

4.6 Conversion and Warrant Exercise Limits.

    (a) If the number of Issuable Shares issuable upon conversion of all the
Preferred Shares and exercise of all the Preferred Warrants sold in the Offering
requires the Company to obtain the Required Approval (defined below), then until
such Required Approval is obtained by the Company, the Subscriber agrees to
convert Preferred Shares and exercise Preferred Warrants for only that aggregate
number of Issuable Shares that would, together with all conversions of Preferred
Shares and exercises of Preferred Warrants by direct and indirect transferees of
the

12

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Subscriber, result in an issuance of no more Issuable Shares than the Per
Subscriber Limit (defined below).

    (b) The "Per Subscriber Limit" means that number of Issuable Shares equal to
5,646,355 multiplied by a fraction, the numerator of which is the sum of (A) the
number of Issuable Shares issuable upon conversion of all Preferred Stock held
by the Subscriber and any direct or indirect transferee of the Subscriber plus
(B) the number of Issuable Shares issuable upon exercise of all Preferred
Warrants held by the Subscriber and any direct or indirect transferee of the
Subscriber, and the denominator of which is the sum of (A) the number of
Issuable Shares issuable upon conversion of all Preferred Stock issued in the
Offering plus (B) the number of Issuable Shares issuable upon exercise of all
Preferred Warrants issued in the Offering.

    (c) The "Required Approval" means either (i) approval of the conversion and
exercise, respectively, of all Preferred Shares and Warrants issued to the
Subscribers by the holders of a majority of the issued and outstanding Common
Stock, if such approval is required by NASD Marketplace Rule 4460(i)(1)(D)(ii)
or (ii) obtaining an exception from Nasdaq under NASD Marketplace
Rule 4460(i)(2) permitting the Company to issue the Units without obtaining the
shareholder approval required under clause (i) of this sentence.

4.7  Penalty for Failure to Obtain Required Approval. If, the Required Approval
is not obtained by the Company within 6 months after the Final Closing (the
"Approval Deadline") then upon the delivery of written notice from the Placement
Agent to the Company, the Company shall be required to repurchase the number of
Preferred Shares set forth in such notice at a price per Preferred Share equal
to the greater of (x) double the amount of the Conversion Price or (y) the
difference between (A) the Conversion Price and (B) the average closing bid
price on Nasdaq for the Common Stock for the 10 trading days preceding the
Approval Deadline.

V. CONDITIONS TO CLOSING IN FAVOR OF THE COMPANY

The obligation of the Company hereunder to issue and sell Preferred Units to the
Subscriber at the Closing is subject to the satisfaction, at or before the
Closing, of each of the following conditions, provided that these conditions are
for the Company's sole benefit and may be waived by the Company at any time in
its sole discretion by providing the Subscriber with prior written notice
thereof:

5.1  Offering Documents. The Subscriber shall have executed a Questionnaire, a
Subscription Agreement, the Registration Rights Agreement and a Lock-Up
Agreement and delivered the same to the Company.

5.2  Purchase Price. The Subscriber shall have delivered to the Escrow Agent the
purchase price for the Preferred Units being purchased by the Subscriber at the
Closing in the manner set forth in Section 1.1.

5.3  Representations and Warranties. The representations and warranties of the
Subscriber shall be true and correct in all material respects as of the date
when made and as of the Closing as though made at that time, and the Subscriber
shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Subscription Agreement to
be performed, satisfied or complied with by the Subscriber at or prior to the
Closing.

5.4  Series B Designation. The Secretary of State of the State of Delaware shall
have accepted for filing the Series B Designation.

VI. CONDITIONS TO CLOSING IN FAVOR OF THE SUBSCRIBER

The obligation of the Subscriber hereunder to purchase the Preferred Units is
subject to the satisfaction, at or before the Closing, of each of the following
conditions, provided that these conditions

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are for the Subscriber's sole benefit and may be waived by the Subscriber at any
time in its sole discretion by providing the Company with prior written notice
thereof:

6.1  Offering Documents. The Company shall have executed and delivered to the
Subscriber each of the Offering Documents to which its signature is required.

6.2  Lock-Up Agreements. The Company shall have delivered to the Placement Agent
a Lock-Up Agreement executed by Frost Prioleau, the Jackson Lock-Up executed by
Peter Jackson and the Other Lock-Ups executed by the individuals specified in
Section 1.10(iii) hereof.

6.3  Legal Opinion. The Subscriber shall have received the opinion of the
Company's counsel dated as of the Closing, in substantially the form provided
for in Section 3(c)(v) of the Agency Agreement.

6.4  Representations and Warranties. The representations and warranties of the
Company shall be true and correct as of the date when made and as of the Closing
as though made at that time (except for representations and warranties that
reference a specific date which shall have been true and correct in all material
respects as of such date), and the Company shall have performed, satisfied and
complied in all respects with the covenants, agreements and conditions required
by the Transaction Documents to be performed, satisfied or complied with by the
Company at or prior to the Closing, except where the failure of such
representations and warranties to be true and correct as stated above and except
for such nonperformance, failure to satisfy or comply as would not, individually
or in the aggregate, have a Material Adverse Effect.

6.5  Series B Designation. The Series B Designation shall have been accepted for
filing by the Secretary of State of the State of Delaware, and a certified copy
thereof shall have been delivered to the Placement Agent.

6.6  Due Diligence. The Placement Agent shall have completed its due diligence
investigation of the Company, including without limitation, its review of the
Company's financial statements, projections, business prospects, capital
structure, and contractual arrangements, to the Placement Agent's reasonable
satisfaction.

6.7  Closing Documents. At the Closing, the Company shall have delivered to the
Placement Agent the following: (A) a certificate of the Chief Executive Officer
stating that (I) the condition set forth in Section 6.4 has been satisfied,
(II) except as set forth in the any Schedule or Exhibit to this Subscription
Agreement or the Agency Agreement, since November 30, 2000, there has been no
event, condition or circumstance that has had or could reasonably be expected to
have a Material Adverse Effect, and (III) the Company has complied with its
covenants and agreements set forth in the Transaction Documents, and (B) a
certificate of the Secretary of the Company containing: (I) true and complete
copies, as of the Closing Date, of the Certificate of Incorporation and by-laws
of the Company and of the certificates of designations of all series of
preferred stock of the Company, (II) true and complete copies of the resolutions
of the Board of Directors of the Company approving the Transaction Documents and
all documents and matters incident thereto, and (III) a certification of
authenticity of the signatures of the officers of the Company who have executed
and delivered the documentation for this Offering.

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6.8  Conditions of Agency Agreement. All of the conditions to closing set forth
in Section 3 of the Agency Agreement shall have been satisfied.

6.9  Other Matters. All opinions, certificates and documents and all proceedings
related to this Offering shall be in form and content satisfactory to the
Placement Agent and its counsel.

VII.  RIGHTS OF TERMINATION

7.1  Termination by Subscriber or Company. This Subscription Agreement may be
terminated at any time prior to the Closing: (a) by mutual written consent of
the parties hereto; (b) by either the Company or the Placement Agent upon
written notice to the other party if the Closing shall not have been consummated
by 11:59 p.m. on April 3, 2001, unless such failure of consummation shall be due
to the failure of the party seeking to terminate to perform or observe in all
material respects the covenants and agreements hereof to be performed or
observed by such party; or (c) by the Company or the Subscriber upon written
notice to the other party if any court or governmental authority of competent
jurisdiction shall have issued a final, non-appealable order restraining,
enjoining or otherwise prohibiting the consummation of the transactions
contemplated by this Subscription Agreement. Termination of this Subscription
Agreement under this Section 7.1 shall result in this Subscription Agreement
becoming void and of no further force and effect, except that a termination
shall not release, or be construed as so releasing, any party hereto from any
liability or damage to the other party hereto arising out of the breaching
party's willful and material breach of the warranties and representations made
by it, or willful and material failure in performance of any of its covenants,
agreements, duties or obligations provided hereunder, and the obligations under
Section 8.8 shall survive such termination.

7.2  Termination by the Placement Agent. In the event the Placement Agent
decides for any reason prior to the Closing not to proceed with the Offering,
upon notice to the Company and the Subscriber, this Subscription Agreement shall
be terminated and become void and of no further force and effect, and none of
the Company, the Placement Agent, or the Subscriber shall have any further
obligations pursuant to this Subscription Agreement, including without
limitation, the obligation to consummate the Offering, provided, however, that
the obligations under Section 8.8 shall survive such termination.

VIII.  MISCELLANEOUS

8.1  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:

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

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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.

8.2  Entire Agreement; 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. 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
Preferred Shares then outstanding (or if prior to the Closing, the Subscribers
purchasing at least a majority of the Preferred Shares 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 Preferred Shares then outstanding.

8.3  Severability. If any provision of this Subscription Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Subscription Agreement in that jurisdiction or the validity or
enforceability of any provision of this Subscription Agreement in any other
jurisdiction.

8.4  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 non-exclusive jurisdiction of
the state and 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.

8.5  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.

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8.6  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 Preferred Shares and the Preferred
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 Preferred Shares 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.

8.7  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.

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

8.9  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 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.

8.10  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.

8.11  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 Paul, Hastings, Janofsky & Walker 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 forego 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.

8.12  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 Preferred Shares or
Preferred Warrants or Conversion Shares or Warrant Shares in enforcing any of
its rights and remedies under this Subscription Agreement, the Series B
Designation, the Preferred Warrants or the Registration Rights Agreement.

8.13  Confidentiality. The Subscriber agrees that, at all times during the
period ending five (5) business days after the filing by the Company with the
SEC of its next Annual Report on Form 10-K following the date hereof, 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 contained in the Offering Documents to which it has
become privy by reason of this Subscription Agreement.

8.14  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.

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

SUBSCRIBER**:   CO-SUBSCRIBER**:

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Signature of Subscriber
 

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Signature of Co-Subscriber

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Name of Subscriber [please print]
 

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Name of Co-Subscriber [please print]

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Address of Subscriber
 

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Address of Co-Subscriber

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Social Security or Taxpayer
Identification Number of Subscriber
 

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Social Security or Taxpayer Identification
Number of Co-Subscriber

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Name of Holder(s) as it should appear on the security certificates* [please
print]

* Please provide the exact names that you wish to see on the certificates

(1) For individuals, print full name of subscriber.

(2) For joint, print full name of subscriber and all co-subscribers.

(3) For corporations, partnerships, LLC, print full name of entity, including
"&", "Co.", "Inc.", "etc", "LLC", "LP", etc.

(4) For Trusts, print trust name (please contact your trustee for the exact name
that should appear on the certificates.)

(5) For IRA account maintained at [                  ], print "Wexford Clearing
Corp as C/F FBO [client name]".

Subscriber's Account Number at [                  ], if applicable:             
            

Dollar Amount of Preferred Units Subscribed For: $                        

Dollar Amount of Unit Subscription Accepted: $                        

**If Subscriber is a Registered Representative with an NASD member firm or an
affiliated person of an NASD member firm, have the acknowledgment to the right
signed by the appropriate party:   The undersigned NASD member firm acknowledges
receipt of the notice required by Rule 3040 of the NASD Conduct Rules.
 
 
 
 

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Name of NASD Member Firm
 
 
 
 
By:
 
             

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Authorized Officer
SUBSCRIPTION ACCEPTED BY THE COMPANY:
 
 
INTRAWARE, INC.
 
 
 
 
By:
 
 
 
 
 
     

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EXHIBIT A

Series B Designation

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EXHIBIT B

Preferred Warrant

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EXHIBIT C

Registration Rights Agreement

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EXHIBIT D

Lock-Up Agreement

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EXHIBIT E

Jackson Lock-Up

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EXHIBIT F

Other Lock-Up

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QuickLinks

SUBSCRIPTION AGREEMENT
EXHIBIT A Series B Designation
EXHIBIT B Preferred Warrant
EXHIBIT C Registration Rights Agreement
EXHIBIT D Lock-Up Agreement
EXHIBIT E Jackson Lock-Up
EXHIBIT F Other Lock-Up