Exhibit
10.1


INTRAWARE, INC.


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


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


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


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


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


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


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


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


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


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


 

















 


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


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


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


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


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


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


 


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


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


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


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


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


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


THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL, IN
A REASONABLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR APPLICABLE STATE SECURITIES LAWS, OR (II) UNLESS SOLD PURSUANT TO RULE 144
UNDER SAID ACT.


 


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


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


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


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


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


II.                                     REPRESENTATIONS BY THE COMPANY


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


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


 


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


2.2           Organization
and Qualification.  The
Company is duly organized and validly existing in good standing under the laws
of the jurisdiction in which it is organized, and has the requisite power and
authorization to own its properties and to carry on its business as now being
conducted.  The Company is duly
qualified as a foreign corporation to do business and is in good standing in
every jurisdiction in which its ownership of property or the nature of the
business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not
have a Material Adverse Effect.  As used
in this Subscription Agreement, “Material Adverse Effect” means any
material adverse effect on the business, properties, assets, operations,
results of operations, financial condition or prospects of the Company, or on
the transactions contemplated hereby, or by the other Offering Documents or the
agreements and instruments to be entered into in connection herewith or therewith,
or on the authority or ability of the Company to perform its obligations under
the Offering Documents.  The Company
does not have any operating subsidiaries other than as set forth in the
Offering Documents and all of the non-operating subsidiaries are wholly-owned
by the Company.


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


 


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


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


2.5           SEC
Documents; Financial Statements. 
Since the date of the Company’s last Annual Report on Form 10-K, the
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements
of the Exchange Act (all of the foregoing filed prior to the date hereof and
all exhibits included therein and financial statements and schedules thereto
and documents incorporated by reference therein being hereinafter referred to
as the “SEC Documents”).  The
Company has made available to the Subscriber or its representatives copies of
the SEC Documents.  As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents, and none of the SEC Documents, at
the time they were filed with the SEC, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.  As of their respective dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto.  Such financial statements have been prepared
in accordance with generally accepted accounting principles, consistently
applied, during the periods involved (except (a) as may be otherwise indicated
in such financial statements or the notes thereto, or (b) in the case of
unaudited interim statements, to the extent they may exclude footnotes or may
be condensed or summary statements) and fairly present in all material respects
the financial position of the Company as of the dates thereof and the results
of its operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments that will
not be material).  As of the date
hereof, the Company meets the requirements for the use of Form S-3 for
registration of the resale of the Shares and Warrant Shares. The Company has no
reason to believe its independent auditors will withhold their consent to the
inclusion of their audit opinion concerning the Company’s financial statements
which are included in the Registration Statement.


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


 


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


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


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


 


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


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


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


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


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


 


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


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


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


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


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


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


 


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


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


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


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


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


2.22         Consents.  Except as contemplated by this Subscription
Agreement, the Company is not required to obtain any consent, authorization or
order of, or make any filing or registration with, any court or governmental
agency or any regulatory or self-regulatory agency in order for it to execute,
deliver or perform any of its obligations under or contemplated by the Offering
Documents.  Except as otherwise provided
in the Offering Documents, all consents, authorizations, orders, filings and
registrations that the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof.  The Company is unaware of any facts or
circumstances that might prevent the Company from obtaining or effecting any of
the foregoing.


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


 


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


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


III.                                 TERMS OF SUBSCRIPTION


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


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


 


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


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


IV.                                 CONDITIONS TO CLOSING.


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


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


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


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


V.                                    MISCELLANEOUS


5.1           Notice.  Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Subscription Agreement must be in writing and will be deemed to have been
delivered: (a) upon receipt, when delivered personally, (b) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party), or (c) one (1)
business day after deposit with an overnight courier service, in each case
properly addressed to the party to receive the same.  The addresses and facsimile numbers for such communications shall
be:


 


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If to the Company:


Intraware, Inc.

25 Orinda Way

Orinda, CA 94563

Telephone:  (925) 253-4500

Facsimile:  (925) 253-4541

Attention:  General Counsel


With a copy to:


Wilson Sonsini
Goodrich & Rosati, Professional Corporation 

650 Page Mill Road

Palo Alto, CA 94304

Telephone:  (650) 493-9300

Facsimile:  (650) 493-6811

Attention:  Adam R. Dolinko, Esq.


If to the Subscriber, to its address and facsimile number set forth at
the end of this Subscription Agreement, or to such other address and/or
facsimile number and/or to the attention of such other person as specified by
written notice given to the Company five (5) days prior to the effectiveness of
such change.  Written confirmation of
receipt (a) given by the recipient of such notice, consent, waiver or other
communication, (b) mechanically or electronically generated by the sender’s
facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission, or (c) provided by an overnight
courier service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from an overnight courier service in accordance with
clause (a), (b) or (c) above, respectively.


5.2           Entire
Agreement; Revocation; Amendment. 
This Subscription Agreement supersedes all other prior oral or written
agreements between the Subscriber, the Company, their affiliates and persons
acting on their behalf with respect to the matters discussed herein, and this
Subscription Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor the Subscriber makes any representation, warranty, covenant or
undertaking with respect to such matters. 
This Subscription Agreement is subject to revocation or reconfirmation
by the Subscriber upon receipt by the Subscriber of notification of the Per
Share Purchase Price and any other material information regarding the Company
released after the execution of this Subscription Agreement and prior to the
Closing. No provision of this Subscription Agreement may be amended or waived
other than by an instrument in writing signed by the Company and the holders of
at least a majority of the Securities then outstanding (or if prior to the
Closing, the Subscribers purchasing at least a majority of the Units to be
purchased at the Closing).  No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the Securities then outstanding.


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


 


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


5.4           Governing Law;
Jurisdiction; Jury Trial. 
All questions concerning the construction, validity, enforcement and
interpretation of this Subscription Agreement shall be governed by the internal
laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any
other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.  Each party hereby irrevocably submits to the exclusive jurisdiction
of the federal courts sitting in the Southern District of New York, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Subscription Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.  Each
party hereby irrevocably waives any right it may have, and agrees not to
request, a jury trial for the adjudication of any dispute hereunder or in
connection with or arising out of this Subscription Agreement or any
transaction contemplated hereby.


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


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


5.7           No Third
Party Beneficiaries.  This
Subscription Agreement is intended for the benefit of the parties hereto and
their respective permitted successors and assigns, and is not for the benefit
of, nor may any provision hereof be enforced by, any other person.


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


5.9           Further
Assurances.  Each party shall
do and perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such other


 


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agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Subscription Agreement and the consummation of
the transactions contemplated hereby.


5.10         No Strict
Construction.  The language
used in this Subscription Agreement will be deemed to be the language chosen by
the parties to express their mutual intent, and no rules of strict construction
will be applied against any party.


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


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


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


5.14         Counterparts.  This Subscription Agreement may be executed
in two or more identical counterparts, all of which shall be considered one and
the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party; provided that a
facsimile signature shall be considered due execution and shall be binding upon
the signatory thereto with the same force and effect as if the signature were
an original, not a facsimile signature.


 


15

















 


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


 


	
   

  	
   

  	
   

  
	
  Signature of Subscriber

  	
   

  	
  Signature of
  Co-Subscriber

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of Subscriber

  [please print]

  	
   

  	
  Name of Co-Subscriber

  [please print]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address of Subscriber

  	
   

  	
  Address of
  Co-Subscriber

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Social Security or
  Taxpayer Identification Number of Subscriber

  	
   

  	
  Social Security or
  Taxpayer Identification Number of Co-Subscriber

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Subscriber’s Account
  Number at Commonwealth Associates

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dollar Amount of Units
  Subscribed For

  	
   

  	
  Principal Amount of
  Notes Converted as Payment for Units Subscribed for

  
	
   

  	
   

  	
   

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

  	
   

  	
   

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

  	
   

  	
  Subscription Accepted:

  INTRAWARE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
  Name of NASD Member

  	
   

  	
   Name:

  Title:

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Dollar Amount of
  Subscription Accepted

  
	
  Authorized Officer
  Accepted

  	
   

  	
   

  



 


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