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Exhibit 10.3

INTRAWARE, INC.

PLACEMENT AGENCY AGREEMENT

[                  ]
[                  ]
[                  ]

April 2, 2001

Ladies and Gentlemen:

    This Placement Agency Agreement (the "Agency Agreement") confirms the
retention by Intraware, Inc., a Delaware corporation (the "Company"), of
[                  ], a New York limited partnership ("[                  ]," or
the "Placement Agent"), to act as the sales agent, on a best efforts basis, in
connection with the private placement of the Preferred Units (as defined below)
of the Company, on the terms set forth below.

    The Company proposes to offer for sale solely to "accredited investors," in
a private placement (the "Offering"), up to 14 units (including fractions
thereof) (the "Preferred Units") at $500,000 per Preferred Unit, each Preferred
Unit consisting of (i) 50,000 shares of the Company's Series B Convertible
Preferred Stock (the "Preferred Shares") having the rights and preferences set
forth in a Certificate of Designations, Preferences and Rights of Series B
Preferred Stock in the form attached hereto as Exhibit A (the "Series B
Designation"), and (ii) seven-year warrants in the form attached hereto as
Exhibit B (the "Preferred Warrants") to purchase a number of shares of Common
Stock equal to 20% (subject to adjustment) of the number of shares of common
stock, par value $0.0001 per share ("Common Stock"), of the Company issuable
upon conversion of 50,000 of the Preferred Shares (the "Warrant Shares") issued
in connection herewith.

    A minimum of 6 Preferred Units ($3,000,000) (the "Minimum Offering") and a
maximum of 14 Preferred Units ($7,000,000) (the "Maximum Offering") will be sold
in the Offering. The Preferred Units will be offered pursuant to those terms and
conditions set forth herein. The Minimum Offering will be made on a "best
efforts-all-or-none" basis and the balance of the Offering will be made on a
"best efforts" basis. The Preferred Units will be offered in accordance with
Regulation D promulgated by the Securities and Exchange Commission (the "SEC").

     (i) The SEC Documents (as defined in Section 2(j)), and (ii) the
"Confidential Executive Summary" (as defined in the Subscription Agreement
between each prospective investor subscribing to purchase Preferred Units
pursuant to the Offering (each a "Subscriber") and the Company (the
"Subscription Agreement") attached hereto as Exhibit C), are together referred
to herein as the "Offering Documents"; and (iii) the Subscription Agreement,
(iv) the Registration Rights Agreement among each Subscriber, the Company and
the Placement Agent (the "Registration Rights Agreement") attached hereto as
Exhibit D, (iv) the Series B Designation, (iv) the Preferred Warrants, (vi) this
Agency Agreement, and (vii) the exhibits, schedules and appendices which are
part of the Subscription Agreement, the Registration Rights Agreement, the
Series B Designation, the Preferred Warrants, and the Agency Agreement, are
collectively referred to herein as the "Transaction Documents."

    The Company will prepare and deliver to the Placement Agent a reasonable
number of copies of the Transaction Documents in form and substance satisfactory
to the Placement Agent and its counsel.

    Each Subscriber will be required to deliver, among other things, a
Subscription Agreement and a confidential investor questionnaire ("Investor
Questionnaire") in the form to be provided to offerees. Capitalized terms used
herein, unless otherwise defined or unless the context otherwise indicates,
shall have the same meanings provided in the Transaction Documents.

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    1.  Appointment of Placement Agent.

    (a) [                  ] is hereby appointed exclusive placement agent of
the Company (subject to [                  ]'s right to have selected dealers
("Selected Dealers") in good standing with the National Association of
Securities Dealers ("NASD") participate in the Offering) during the offering
periods for the Offering herein specified for the purposes of assisting the
Company in finding qualified Subscribers in the Offering.

    (b) Subject to the performance by the Company in all material respects of
its obligations to be performed under this Agency Agreement and to the
completeness and accuracy of all representations and warranties of the Company
contained in this Agency Agreement, the Placement Agent hereby accepts such
agency and agrees to use its reasonable best efforts to assist the Company in
finding qualified Subscribers. It is understood that the Placement Agent has no
commitment to sell the Preferred Units. [                  ]'s agency hereunder
is not terminable by the Company except upon termination of the Preferred
Offering Period or a material breach by [                  ] of its obligations
hereunder.

    (c) Subscriptions for Preferred Units shall be evidenced by the execution by
Subscribers of a Subscription Agreement. No Subscription Agreement shall be
effective unless and until it is accepted by the Company. The Placement Agent
shall not have any obligation to independently verify the accuracy or
completeness of any information contained in any Subscription Agreement or the
authenticity, sufficiency, or validity of any check delivered by any prospective
investor in payment for Preferred Units.

    (d) The Placement Agent and/or its affiliates may be investors in the
Offering.

    2.  Representations and Warranties of the Company. The Company represents
and warrants to the Placement Agent and each Selected Dealer, if any, as
follows:

    (a) Organization and Qualification. The Company and its "Subsidiaries"
(which for purposes of this Agency 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 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 Agency 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 Transaction 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
Transaction Documents. A complete list of all Subsidiaries of the Company with
substantive business activities is set forth in Schedule 2(a).

    (b) Authorization; Enforcement; Validity. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agency Agreement and other Transaction Documents, to file and perform its
obligations under the Transaction Documents, and to issue the Securities in
accordance with the terms of the Transaction Documents. The execution and
delivery of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated by the Transaction 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
Transaction Documents have been duly executed and delivered

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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.

    (c) 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(c). 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(c), (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 Transaction 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.

    (d) 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 Transaction Documents,
shall be (a) duly authorized, validly issued, fully paid and non-assessable,
(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 Warrants. In the event the number of shares
of Common Stock issuable upon conversion or exercise of the Preferred Shares or
the 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
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 Warrants in accordance with the Series B Designation or the 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 Investor Questionnaires, (ii) that all of the
offerees and Subscribers are "accredited investors" as such term is defined in
Rule 501 of Regulation D,

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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 Agency 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.

    (e) No Conflicts. Except as set forth in Schedule 2(e), the execution,
delivery and performance of the Transaction Documents by the Company, the
consummation by the Company of the transactions contemplated by the Transaction
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.

    (f)  Consents. Except as contemplated by this 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 Transaction Documents. Except as otherwise provided in the
Transaction 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.

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

    (h) No Integrated Offering. None of the Company, its Subsidiaries, any of
their affiliates, and any person acting on their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of 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.

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    (i)  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 Agency
Agreement, including without limitation, the Company's issuance of the
Securities and the Subscriber's ownership of the Securities. The Company has not
adopted a shareholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of Common Stock or a change in control of
the Company.

    (j)  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 Warrants and upon
conversion of the Preferred Shares.

    (k) Conduct of Business; Regulatory Permits. Except as set forth on
Schedule 2(k), 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 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 Agency Agreement and the related

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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(k), 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.

    (l)  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.

    (m) Absence of Litigation. Except as set forth in Schedule 2(m), there is no
action, suit, proceeding, inquiry or investigation before or by the Nasdaq
National Market, any court, public board, government 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.

    (n) 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

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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.

    (o) 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.

    (p) Title. Except as set forth in or contemplated by Schedule 2(p), 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 Transaction Documents.

    (q) 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(q), 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 Agency 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(q), 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 Adverse Effect. Except as set forth
on Schedule 2(q), 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.

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    (r) Registration Rights. Except with respect to holders of the Preferred
Units and the Preferred Warrants, and except as set forth in Schedule 2(r), no
person has any right to cause the Company to effect the registration under the
1933 Act of any securities of the Company.

    (s) 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.

    (t)  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.

    (u) Interim Financial Statements. Attached hereto as Schedule 2(u) 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(u) 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).

    (v) Disclosure. None of the representations and warranties of the Company
appearing in this Agency Agreement or any information appearing in any Exhibit
or Schedule hereto or in any of the Transaction Documents or Offering Documents
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.

    (w) 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.

    3.  Closing and Fees.

    (a) Closing of the 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 hereof and Articles V and VI of the
Subscription Agreement 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 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 of the

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Subscription Agreement and in Section 3 hereof, 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 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.

    (b) Conditions to Placement Agent's Obligations. The obligations of the
Placement Agent hereunder will be subject to the accuracy in all material
respects of the representations and warranties of the Company herein contained
as of the date hereof and as of each Closing Date of the Placements, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:

     (i) Due Qualification or Exemption. (A) The Offering will become qualified
or be exempt from qualification under the securities or "blue sky" laws of the
several states pursuant to Section 4(d) below not later than the Initial
Preferred Closing Date, and (B) at any Closing Date no stop order suspending the
sale of the Preferred Units shall have been issued and no proceedings by any
governmental authority, self regulatory organization or any securities exchange
for that purpose shall have been initiated or threatened in writing;

    (ii) No Material Misstatements. Neither the blue sky qualification materials
nor the Transaction Documents, nor any supplement thereto, will contain any
untrue statement of a fact which in the reasonable opinion of the Placement
Agent is material, or omits to state a fact, which in the reasonable opinion of
the Placement Agent is material and is required to be stated therein, or is
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading;

    (iii) Compliance with Agreements. The Company will have complied in all
material respects with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at or prior to each Preferred Closing;

    (iv) Corporate Action. The Company has or will have taken all necessary
corporate action, including, without limitation, obtaining the approval of its
Board of Directors and stockholders, for the execution and delivery of this
Agency Agreement, the performance by the Company of its obligations hereunder
and the Offering contemplated hereby (including any approval of the issuance of
the Preferred Shares and Preferred Warrants in the Offering by the Company's
stockholders required by the rules of the Nasdaq National Market unless a waiver
therefrom has been obtained; provided that, if the terms of such waiver require
stockholder ratification of the issuance, the Placement Agent shall receive an
irrevocable proxy from each of the Company's executive officers and directors
solely for the purpose of voting in favor of such ratification);

    (v) Opinion of Company Counsel. At each Preferred Closing, the Placement
Agent shall receive the opinion of Wilson, Sonsini, Goodrich & Rosati,
Professional Corporation, counsel

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to the Company, addressed to the Placement Agent and the Subscribers
substantially to the effect that:

    (A) The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware. The Company is duly
qualified as a foreign corporation to do business and is in good standing in the
State of California.

    (B) The Company has the requisite corporate power and authority to execute,
deliver and perform its obligations under the Placement Agency Agreement, the
Subscription Agreement, the Series B Designation, the Warrant and the
Registration Rights Agreement (collectively, the "Transaction Documents"),
including issuance of the Preferred Shares and the Warrants in accordance with
the terms thereof. The execution and delivery of the Transaction Documents by
the Company, the performance of the obligations of the Company thereunder and
the consummation by it of the transactions contemplated therein have been duly
authorized by the Company's Board of Directors. The Transaction Documents have
been duly executed and delivered by the Company.

    (C) The issuance and sale of the Preferred Shares and the Warrants has been
duly authorized, and when issued and paid for in accordance with the terms of
the Placement Agency Agreement, the Preferred Shares will be validly issued,
fully paid and non-assessable and free of all liens, encumbrances and preemptive
rights with respect to the issue thereof. The Common Stock issuable upon the
conversion of the Preferred Shares (the "Conversion Shares") and the Common
Stock issuable upon the exercise of the Warrants (the "Warrant Shares") are duly
authorized and reserved for issuance in accordance with the Placement Agency
Agreement, the Series B Designation and the Warrants, and when issued and paid
for in accordance with the Placement Agency Agreement, the Series B Designation
and the Warrants, the Conversion Shares and the Warrant Shares will be validly
issued, fully paid and non-assessable and free of all taxes, liens, charges and
preemptive rights with respect to the issue thereof.

    (D) Based in part upon, and subject to the accuracy as to factual matters
of, the Subscribers' representations in Article II of the Subscription
Agreement, the Preferred Shares and the Warrants may be issued to the
Subscribers pursuant to the Transaction Documents without registration under the
Securities Act of 1933, as amended.

    (E) No authorization, approval, consent, filing or other order of any
Federal or state governmental body, regulatory agency, self-regulatory
organization or stock exchange or market, or to our knowledge, any court, is
required to be obtained by the Company to enter into and perform its obligations
under the Transaction Documents or for the issuance and sale of the Preferred
Shares and the Warrants as contemplated by the Transaction Documents, except
such as have been made or will be made by the Company.

    (F) To our knowledge, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board or body or any governmental
agency or self-regulatory organization pending or threatened against the Company
or any of its subsidiaries or any of the properties of the Company or any of its
subsidiaries which might reasonably be expected to prevent the transactions
contemplated by the Transaction Documents.

    (G) The execution, delivery and performance by the Company of the
Transaction Documents, the consummation by the Company of the transactions
contemplated thereby and the compliance by the Company with the terms thereof
does not violate, conflict with or constitute a default under the Restated
Certificate, Series B Designation, the Bylaws or any other material contract,
agreement arrangement by which the Company is bound.

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    (vi) Representations and Warranties. The representations and warranties of
the Company set forth in Section 2 hereof 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.

   (vii) Closing Documents. At the Closing, the Company shall have delivered to
the Subscriber the following: (A) a certificate of the Chief Executive Officer
stating that (I) the condition set forth in Section 3(b)(vi) has been satisfied,
(II) except as expressly set forth in any Schedule or Exhibit to the
Subscription Agreement or this 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.

   (viii) Designation of Preferred. 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.

    (ix) Fund Escrow Agreement. The Placement Agent shall receive a copy of a
duly executed escrow agreement in the form previously delivered to the Placement
Agent regarding the deposit of funds pending the closing(s) of the Offering with
a bank or trust company (the "Escrow Agent") acceptable to the Placement Agent.

    (x) Minimum Offering. The Minimum Offering shall have been sold in the
Offering and the Escrow Agent shall have received proceeds from such offering of
at least $3,000,000.

    (xi) Series B Director. Upon the Initial Preferred Closing, the Board will
consist of seven (7) directors which shall include one (1) member designated by
the Placement Agent on behalf of the holders of the Preferred Shares (the
"Series B Director"). In the event that the holders of the Preferred Shares do
not exercise their right to designate a member of the Board, then the failure to
do so shall not constitute a waiver of such right and the holders of the
Preferred Shares may then appoint any person to be an observer who shall be
entitled to attend and observe meetings of the Board and any committees thereof
(an receive notices, communications and other information provided in connection
with such meetings).

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   (xii) Directors and Officers Insurance. The Company shall purchase and
maintain in full force and effect, to the extent permitted by law and with such
coverage as is customary, directors and officers liability insurance.

   (xiii) No Adverse Changes. There shall not have occurred, at any time prior
to the applicable closing (i) a general suspension of, or a general limitation
on prices for, trading in securities on the New York Stock Exchange, the Nasdaq,
the Amex Stock Exchange, or in the over-the-counter market; (ii) any outbreak of
major hostilities or other national or international calamity; (iii) any banking
moratorium declared by Federal or New York authorities; (iv) any material
adverse change in the business, properties, assets, results of operations, or
financial condition of the Company which materially impairs the investment
quality of the Preferred Units; or (v) any material adverse change in the market
for securities in general or in political, financial, or economic conditions
which, in the Placement Agent's reasonable judgment, makes it inadvisable to
proceed with the Offering.

   (xiv) Due Diligence Investigation Complete. The Placement Agent shall have
concluded its due diligence investigation of the Company to the Placement
Agent's reasonable satisfaction, including, without limitation, an investigation
of the Company's financial statements, projections, business prospects, capital
structure, and other contractual arrangements.

   (xv) Conditions of Subscription Agreement. All of the conditions to closing
set forth in Section 6 of the Subscription Agreement shall have been satisfied.

   (xvi) Lock-Up Agreements. The Placement Agent shall have received a signed
lock-up agreement from Frost Prioleau in substantially the form attached as
Exhibit D to the Subscription Agreement, a signed lock-up agreement from Peter
Jackson in substantially the form attached as Exhibit E to the Subscription
Agreement and the Other Lock-Ups (as defined in the Subscription Agreement)
executed by the individuals specified in Section 1.10(iii) of the Subscription
Agreement.

    (c) Blue Sky. Counsel to the Placement Agent will prepare and file the
necessary documents so that offers and sales of the securities to be offered in
the Offering may be made in certain jurisdictions in the United States. It is
understood that such filings may be based on or rely upon: (i) the
representations of each Subscriber set forth in the Subscription Agreement
delivered by such Subscriber; (ii) the representations, warranties and
agreements of the Company set forth in Section 2 of this Agency Agreement; and
(iii) the representations of the Company set forth in the certificate to be
delivered at each Preferred Closing pursuant to Section 3(b)(vii).

    (d) Placement Fee and Expenses.

     (i) Offering. 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, 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 (the reimbursement and payment obligations of the Company
set forth in clauses (B) through (C) above, the "Placement Agent Expenses").

    (ii) Interest. In the event that for any reason the Company shall fail to
pay to the Placement Agent all or any portion of the fees payable hereunder when
due, interest shall

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accrue and be payable on the unpaid cash balance due hereunder from the date
when first due through and including the date when actually collected by the
Placement Agent, at a rate equal to four percent above the prime rate of
Citibank, N.A., in New York, New York, computed on a daily basis and adjusted as
announced from time to time.

    (e) Bring-Down Opinions and Certificates. If there is more than one
Preferred Closing, then at each such Closing there shall be delivered to the
Placement Agent updated opinions and certificates as described in
Section 3(b)(v) and (vii) above, respectively.

    4.  Covenants of the Company.

    (a) Use of Proceeds. The net proceeds of the Offering will be used by the
Company substantially as set forth in Section 4.5 of the Subscription Agreement.

    (b) Expenses of Offering, Other Payments and Option

     (i) The Company shall be responsible for, and shall bear all expenses
directly incurred in connection with, the Offering including, but not limited
to, (i) legal fees of the Company's counsel relating to the costs of preparing
the Transaction Documents and all amendments, supplements and exhibits thereto
delivering all Preferred Units and (ii) the Placement Agent Expenses.

    (ii) Prior to the Initial Preferred Closing, if the Company unilaterally
decides not to effect the Initial Preferred Closing for any reason (other than
Placement Agent's inability to close the Minimum Offering prior to 11:59 p.m.
(New York time) on April 3, 2001 for reasons other than the Company's refusal to
close the Minimum Offering, or upon mutual written agreement with the Placement
Agent not to proceed with the Offering), the Placement Agent and its affiliates
shall have the irrevocable option for the Option Period (defined below) to
purchase Preferred Units from the Company under the otherwise applicable terms
of the Transaction Documents in any amount up to $5 million; provided however,
that in such case the Cash Fee shall be only 3% of the gross proceeds of the
Preferred Units purchased (which option and fee the Company agrees is a fair
measure of the compensation to be received by the Placement Agent in respect of,
among other things its advice, time and effort in respect of the Offering), and
the Company will be obligated to reimburse the Placement Agent and counsel for
Placement Agent, as applicable, for the Placement Agent Expenses as set in
Section 3(d)(i) above within ten business days of the occurrence of any event
described in this Section 4(b)(ii).

    (iii) The "Option Period" shall be the 45 day period beginning on the
earlier of (x) the date of termination of this Agency Agreement pursuant to
Section 7(h), (y) the date on which the Company provides notice to the Placement
Agent that it has unilaterally elected not to proceed with the Offering and
(z) 11:59 p.m. (New York time) on April 3, 2001, if the Minimum Offering shall
not have been sold by such date.

    (iv) The Placement Agent shall have no liability to the Company for any
reason should the Placement Agent choose not to proceed with the Offering
contemplated hereby. Notwithstanding any of the foregoing provisions of this
Section 4(c), if the Minimum Offering has not been sold by 11:59 p.m. on
April 3, 2001, and the Company has been willing and prepared to sell the
Preferred Units as provided in this Agency Agreement at all times during the
period between the date of this Agency Agreement and 11:59 p.m. on April 3,
2001, then the Company shall not be obligated to proceed with the Offering or
pay the Cash Fee to the Placement Agent.

    (c) Notification. The Company shall notify the Placement Agent immediately,
and in writing, (i) when any event shall have occurred during the period
commencing on the date hereof and

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ending on the later of the Final Closing or the Preferred Termination Date as a
result of which the Transaction Documents would include any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and (ii) of the
receipt of any notification with respect to the modification, rescission,
withdrawal or suspension of the qualification or registration of the Preferred
Shares, Common Stock or Warrants, or of any exemption from such registration or
qualification, in any jurisdiction. The Company will use its reasonable best
efforts to prevent the issuance of any such modification, rescission, withdrawal
or suspension and, if any such modification, rescission, withdrawal or
suspension is issued and the Placement Agent so requests, to obtain the lifting
thereof as promptly as possible.

    (d) 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 Placement Agent
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 Warrants for
sale to the Subscriber pursuant to this Agency 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 Placement Agent 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.

    (e) Press Releases, Etc. To the extent practicable, the Company shall
provide two business days prior written notice of any proposed press release or
other communication, or any press conference with respect to any material
development concerning the Company, its financial condition, results of
operations, business, properties, assets, or liabilities; provided however, the
Company may issue any press release without such prior notice if in the
reasonable opinion of counsel to the Company issuance before such notice can be
provided is required for compliance with any governmental agency or exchange on
which the Company's securities are listed. Furthermore, the Company shall not at
any time include information with respect to the use of the Placement Agent's
name in any press release, advertisement or on any website maintained by the
Company without the prior written consent of the Placement Agent.

    (f)  Restrictions on Issuances of Securities. During the period commencing
on the date hereof and ending on the later of (i) the Final Closing or (ii) the
Preferred Termination Date, provided the Placement Agent shall not have breached
any material covenant, representation or warranty contained in this Agency
Agreement and the Placement Agent is actively conducting the Offering, the
Company will not, without the prior written consent of the Placement Agent,
issue additional shares of Common Stock, other than pursuant to the exercise of
options, warrants or rights outstanding on the date hereof, or issue or grant
any warrants, options or other securities of the Company or any debt
convertible, redeemable or exchangeable for any equity security of the Company.

    (g) Board Designee. In the event the Minimum Offering is completed, the
Company agrees that as long as there shall be Preferred Shares outstanding (the
"Board Representation Period"), it shall cause the Board to have the composition
set forth in Section 3(b)(xi) hereof, and the number of directors comprising the
Board shall not increase without the consent of the Series B Director. It shall
be a condition of the appointment of the Series B Director that such person
agree in advance to resign from the Board of Directors at the expiration of the
Board Representation Period, notwithstanding that the term of office for such
director has not yet expired. The class of this directorship will be determined
at the time of appointment. The Series B Director may be replaced at any time by
the holders of the Preferred Shares. In addition, in the event that the

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Series B Director resigns or for any reason no longer serves as a director, then
the holders of the Preferred Shares shall designate a replacement for such
director.

    (h) Veto Right of Series B Director. The Company agrees that it will not
award or grant any stock options, warrants or shares of capital stock of the
Company or any other stock-based incentive if such award or grant does not fully
comply with the Company's New Hire and Existing Employee Guidelines attached
hereto as Schedule 3(h), unless the Company's Board Compensation Committee,
including the Series B Director, approves of such award or grant. The
restrictions set forth in this Section 3(h) shall not apply to the Company's
employee stock purchase plan.

    (i)  Independent Auditors. During the three-year period following the
Initial Preferred Closing, the Company will not switch auditors, other than to a
"Big Five" accounting firm, without the approval of a majority of the
independent members of the Board of Directors.

    (j)  Quarterly Communications. Within forty-five (45) days after the end of
each fiscal quarter, the Company shall (i) send to the Placement Agent (x) a
letter setting forth the results of operations for the fiscal quarter and
management's analysis thereof (which delivery obligation shall be satisfied by
timely filing with the SEC the applicable quarterly report on Form 10-Q) and
(y) a schedule of all securities issuances by the Company, including the
issuances of shares pursuant to the cashless exercise provisions of any options
or warrants, and (ii) present an update on the affairs of the Company at the
offices of the Placement Agent for the Subscribers and employees of the
Placement Agent, ensuring that such update complies with Regulation FD under the
Securities Act. In addition, within ninety (90) days after the end of each
fiscal year, the Company shall send to the Subscribers a stockholders letter in
form and substance reasonably satisfactory to the Placement Agent setting forth
the results of operations for the fiscal year and management's analysis thereof
(which delivery obligation shall be satisfied by timely filing with the SEC the
applicable annual report on Form 10-K).

    (k) Transmittal Letters. Within five days after each closing of the
Offering, the Placement Agent shall receive copies of all letters from the
Company to the Subscribers transmitting the securities sold in the Offering and
shall receive a letter from the Company confirming transmittal of the securities
to the Subsidiaries.

    (l)  Committees. The Company will not create any committees of its Board of
Directors that are not composed of a majority of the independent members of the
Board of Directors unless it has received the approval of a majority of the
independent members of the Board of Directors to do so.

    (m) Transfer Agent. The Company shall provide a transfer agent and registrar
in respect of its capital stock, which transfer agent and registrar shall be
reasonably acceptable to the Placement Agent.

    (n) Purchase or Redemption. Unless approved by 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), 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.
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.

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    5.  Indemnification.

    (a) The Company agrees to indemnify and hold harmless the Placement Agent
and each selected dealer, if any, and their respective stockholders, directors,
officers, agents and controlling persons (an "Indemnified Party") against any
and all loss, liability, claim, damage and expense whatsoever (and all actions
in respect thereof), and to reimburse the Placement Agent for reasonable legal
fees and related expenses as incurred (including, but not limited to the costs
of investigating, preparing or defending any such action or claim whether or not
in connection with litigation in which the Placement Agent is a party and the
costs of giving testimony or furnishing documents in response to a subpoena or
otherwise), caused by or arising out of (i) any untrue statement or alleged
untrue statement of a material fact contained in the Transaction Documents or
the omission or alleged omission therefrom of a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading (provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, liability, claim,
damage or expense arises out of or is based upon any untrue statement of a
material fact or alleged untrue statement or a material fact provided by the
Placement Agent in writing to the Company specifically for use in the
Transaction Documents), (ii) any violation by the Company of the federal
securities laws or the securities laws of any states, or otherwise arising out
of the Placement Agent's engagement hereunder, except in respect of any matters
as to which the Placement Agent shall have been adjudicated to have acted with
gross negligence, or (iii) any breach by the Company of any of its
representations, warranties or covenants contained in this Agency Agreement.

    (b) Promptly after receipt by an Indemnified Party under this Section of
notice of the commencement of any action, the indemnified party will, if a claim
in respect thereof is to be made against the Company under this Section, notify
in writing the Company of the commencement thereof; but the omission so to
notify the Company will not relieve it from any liability which it may have to
the Indemnified Party otherwise than under this Section except to the extent the
defense of the claim is prejudiced. In case any such action is brought against
an Indemnified Party, and it notifies the Company of the commencement thereof,
the Company will be entitled to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, subject to the provisions herein stated, with counsel
reasonably satisfactory to the Indemnified Party, and after notice from the
Company to the Indemnified Party of its election so to assume the defense
thereof, the Company will not be liable to the Indemnified Party under this
Section for any legal or other expenses subsequently incurred by the Indemnified
Party in connection with the defense thereof other than reasonable costs of
investigation (provided the Company has been advised in writing that such
investigation is being undertaken). The Indemnified Party shall have the right
to employ separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall not be at the expense
of the Company if the Company has assumed the defense of the action with counsel
reasonably satisfactory to the Indemnified Party; provided that the fees and
expenses of such counsel shall be at the expense of the Company if (i) the
employment of such counsel has been specifically authorized in writing by the
Company (which it shall have no obligation to do) or (ii) the named parties to
any such action (including any impleaded parties) include both the Indemnified
Party or Parties and the Company and, in the reasonable judgment of counsel for
the Indemnified Party, it is advisable for the Indemnified Party or Parties to
be represented by separate counsel due to material conflict of interest (in
which case the Company shall not have the right to assume the defense of such
action on behalf of an Indemnified Party or Parties), it being understood,
however, that the Company shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys for all
the Indemnified Parties. No settlement by an Indemnified

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Party of any action against an Indemnified Party shall be made without the
Company's consent which shall not be unreasonably withheld. No settlement of any
action against an Indemnified Party by the Company shall be made unless such an
Indemnified Party is fully and completely released in connection therewith.

    6.  Contribution.

    To provide for just and equitable contribution, if (i) an Indemnified Party
makes a claim for indemnification pursuant to Section 5 but it is found in a
final judicial determination, not subject to further appeal, that such
indemnification may not be enforced in such case, even though this Agency
Agreement expressly provides for indemnification in such case, or (ii) any
indemnified or indemnifying party seeks contribution under the 1933 Act, the
1934 Act, or otherwise, then the Company (including for this purpose any
contribution made by or on behalf of any officer, director, employee or agent
for the Company, or any controlling person of the Company), on the one hand, and
the Placement Agent and any Selected Dealers (including for this purpose any
contribution by or on behalf of an indemnified party), on the other hand, shall
contribute to the losses, liabilities, claims, damages, and expenses whatsoever
to which any of them may be subject, in such proportions as are appropriate to
reflect the relative benefits received by the Company, on the one hand, and the
Placement Agent and the Selected Dealers, on the other hand; provided, however,
that if applicable law does not permit such allocation, then other relevant
equitable considerations such as the relative fault of the Company and the
Placement Agent and the Selected Dealers in connection with the facts which
resulted in such losses, liabilities, claims, damages, and expenses shall also
be considered. In no case shall the Placement Agent or a Selected Dealer be
responsible for a portion of the contribution obligation in excess of the
compensation received by it or the Selected Dealer Agreement, as the case may
be. No person guilty of a fraudulent misrepresentation shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each person, if any, who
controls the Placement Agent or a Selected Dealer within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 Act and each officer,
director, shareholder, employee and agent of the Placement Agent or a Selected
Dealer, shall have the same rights to contribution as the Placement Agent or the
Selected Dealer, and each person, if any who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act and each
officer, director, employee and agent of the Company, shall have the same rights
to contribution as the Company, subject in each case to the provisions of this
Section 6. Anything in this Section 6 to the contrary notwithstanding, no party
shall be liable for contribution with respect to the settlement of any claim or
action effected without its written consent. This Section 6 is intended to
supersede any right to contribution under the 1933 Act, the 1934 Act, or
otherwise.

    7.  Miscellaneous.

    (a) Survival. Any termination of the Offering without consummation thereof
shall be without obligation on the part of any party except that the
indemnification provided in Section 5 hereof and the contribution provided in
Section 6 hereof shall survive any termination and shall survive the Final
Closing for a period of two years.

    (b) Representations, Warranties and Covenants to Survive Delivery. The
respective representations, warranties, indemnities, agreements, covenants and
other statements as of the date hereof shall survive execution of this Agency
Agreement and delivery of the Preferred Units and the termination of this Agency
Agreement for a period of three (3) years after such respective event.

    (c) No Other Beneficiaries. This Agency Agreement is intended for the sole
and exclusive benefit of the parties hereto and their respective successors and
controlling persons, and no other person, firm or corporation shall have any
third-party beneficiary or other rights hereunder.

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    (d) Governing Law; Resolution of Disputes. This Agency Agreement shall be
governed by and construed in accordance with the law of the State of New York
without regard to conflict of law provisions. The Placement Agent and the
Company will attempt to settle any claim or controversy arising out of this
Agency Agreement through consultation and negotiation in good faith and a spirit
of mutual cooperation. Should such attempts fail, then the dispute will be
mediated by a mutually acceptable mediator to be chosen by the Placement Agent
and the Company within fifteen (15) days after written notice from either party
demanding mediation. Neither party may unreasonably withhold consent to the
selection of a mediator, and the parties will share the costs of the mediation
equally. Any dispute which the parties cannot resolve through negotiation or
mediation within six (6) months of the date of the initial demand for it by one
of the parties may then be submitted to the courts for resolution. The use of
mediation will not be construed under the doctrine of latches, waiver or
estoppel to affect adversely the rights of either party. Nothing in this Section
will prevent either party from resorting to judicial proceedings if (a) good
faith efforts to resolve the dispute under these procedures have been
unsuccessful or (b) interim relief from a court is necessary to prevent serious
and irreparable injury.

    (e) Counterparts. This Agency Agreement may be signed in counterparts with
the same effect as if both parties had signed one and the same instrument.

    (f)  Notices. Any communications specifically required hereunder to be in
writing, if sent to the Placement Agent, will be sent by overnight courier
providing a receipt of delivery or by certified or registered mail to it at
[               ], with a copy to Paul, Hastings, Janofsky & Walker LLP, 29th
Floor, 345 California Street, San Francisco, California 94104-2635, Att: Thomas
R. Pollock, and if sent to the Company, will be sent by overnight courier
providing a receipt of delivery or by certified or registered mail to it at 25
Orinda Way, Orinda, California 94563, Att: Frost Prioleau, with a copy to
Wilson, Sonsini, Goodrich & Rosati, Professional Corporation, 650 Page Mill
Road, Palo Alto, California 94304, Attention: Adam R. Dolinko.

    (g) Entire Agreement. This Agency Agreement constitutes the entire agreement
of the parties with respect to the matters herein referred and supersedes all
prior agreements and understandings, written and oral, between the parties with
respect to the subject matter hereof including, but not limited to, that certain
engagement letter agreement, dated March 7, 2001, as amended, between the
Company and [                  ]. Neither this Agency Agreement nor any term
hereof may be changed, waived or terminated orally, except by an instrument in
writing signed by the party against which enforcement of the change, waiver or
termination is sought.

    (h) Termination. This Agency Agreement is subject to termination by notice
given by the Placement Agent to the Company, if (i) after the execution and
delivery of this Agency Agreement and prior to the Initial Preferred Closing
(A) trading generally shall have been suspended or materially limited on or by,
as the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (B) trading of any securities of the Company shall have been suspended
on any exchange or in any over-the-counter market, (C) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (D) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crises that, in the Placement Agent's judgement, is material and
adverse and (ii) in the case of any of the events specified in Sections
7(h)(i)(A) through 7(h)(i)(D), such event, singly or together with any other
such event, makes it, in the Placement Agent's judgement, impracticable to offer
the Preferred Units on the terms and in the manner contemplated herein.

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    (i)  If you find the foregoing is in accordance with our understanding,
kindly sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement between us.

    Very truly yours,
 
 
Intraware, Inc.
 
 
By:
       

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Name:
Title:

Agreed:

[                  ]

    By:   [                  ] Management Company, Inc., its general partner
 
 
By:
 
 
         

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Name:
Title:  

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Exhibit A   Form of Series B Designation
Exhibit B
 
Form of Preferred Warrants
Exhibit C
 
Form of Subscription Agreement
Exhibit D
 
Form of Registration Rights Agreement

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INTRAWARE, INC. PLACEMENT AGENCY AGREEMENT