<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934 (Amendment No. )*
CENTURA SOFTWARE CORPORATION
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
15640W 10 3
(CUSIP Number)
Dennis I. Simon
Newport Acquisition Company No. 2 LLC
c/o Crossroads Capital Partners, LLC
1600 Dove Street, Suite 300
Newport Beach, CA 92660
(714) 261-1600
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
WITH A COPY TO:
L. William Caraccio
Pillsbury Madison & Sutro LLP
2550 Hanover Street
Palo Alto, CA 94304-1115
(650) 233-4500
FEBRUARY 27, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D,
and is filing this schedule because of Rule 13d-1(b)(3) or (4), check
the following box |_|.
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
Page 1 of 11 Pages
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
CUSIP No. 15640W 10 3
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1 NAMES OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY) Newport Acquisition Company No. 2 LLC 52-2085075
- -------------------------------------------------------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
2 (a) |_|
(b) |_|
- -------------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS) WC
- -------------------------------------------------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_|
- -------------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware, U.S.A.
- -------------------------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER 11,415,094
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER Not Applicable
BENEFICIALLY
OWNED BY EACH --------------------------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER 11,415,094
PERSON WITH
--------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER Not Applicable
- -------------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 11,415,094
- -------------------------------------------------------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_|
- -------------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11) 38.7%
- -------------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) OO
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2 of 11 Pages
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
CUSIP No. 15640W 10 3
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1 NAMES OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY) Crossroads Capital Partners, LLC 33-0749571
- -------------------------------------------------------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
2 (a) |_|
(b) |_|
- -------------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS) WC
- -------------------------------------------------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_|
- -------------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION California, U.S.A.
- -------------------------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER Not Applicable
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER 11,415,094
BENEFICIALLY
OWNED BY EACH --------------------------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER Not Applicable
PERSON WITH
--------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER 11,415,094
- -------------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 11,415,094
- -------------------------------------------------------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_|
- -------------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11) 38.7%
- -------------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) OO
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3 of 11 Pages
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
CUSIP No. 15640W 10 3
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1 NAMES OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY) Rubin Pachulski Dew Properties, LLC 95-4649433
- -------------------------------------------------------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
2 (a) |_|
(b) |_|
- -------------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS) WC
- -------------------------------------------------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_|
- -------------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION California, U.S.A.
- -------------------------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER Not Applicable
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER Not Applicable
BENEFICIALLY
OWNED BY EACH --------------------------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER Not Applicable
PERSON WITH
--------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER 2,073,742
- -------------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 2,073,742
- -------------------------------------------------------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_|
- -------------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11) 7.0%
- -------------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) OO
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 4 of 11 Pages
<PAGE>
ITEM 1. SECURITY AND ISSUER.
The class of equity securities to which this statement relates is the
common stock, par value $0.01 per share (the "Common Stock"), of Centura
Software Corporation, a California corporation (the "Issuer"). The Issuer's
principal executive offices are located at 975 Island Drive, Redwood Shores,
California 94065.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) This statement is filed by the following parties:
(i) Newport Acquisition Company No. 2 LLC, a Delaware limited liability
company ("Newport"). The principal business of Newport is to serve as an
investment holding company. Newport's address is c/o Crossroads Capital
Partners, LLC, 1600 Dove Street, Suite 300, Newport Beach, CA 92660.
(ii) Crossroads Capital Partners, LLC, a California limited liability
company and the sole Managing Member of Newport ("Crossroads"). The principal
business of Crossroads is to provide merchant banking services for undervalued
companies. Crossroads' address is 1600 Dove Street, Suite 300, Newport Beach,
California 92660. The Managing Member of Crossroads is Dennis I. Simon, an
individual whose business address is 1600 Dove Street, Suite 300, Newport Beach,
California 92660. The principal occupation of Mr. Simon is to serve as the
Managing Member of Crossroads.
(iii) Rubin Pachulski Dew Properties, LLC, a California limited
liability company and a non-managing Member of Newport ("RPD"). The principal
business of RPD is real estate investments. RPD's address is 10351 Santa Monica
Boulevard, Suite 410, Los Angeles, California 90025. The Managing Members of RPD
are Stewart Rubin, Richard Pachulski and Scott Dew. The business address of
Messrs. Rubin, Pachulski and Dew is 10351 Santa Monica Boulevard, Suite 410, Los
Angeles, California 90025. The principal occupation of Mr. Rubin is real estate
investor. The principal occupation of Mr. Pachulski is attorney-at-law. The
principal occupation of Mr. Dew is real estate investor.
(d) During the last five years, neither Newport, Crossroads or RPD,
nor, to such parties' knowledge, any of the other persons with respect to whom
information is given in response to this Item 2, has been convicted in a
criminal proceeding.
(e) During the last five years, neither Newport, Crossroads or RPD,
nor, to such parties' knowledge, any of the other persons with respect to whom
information is given in response to this Item 2, has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction
resulting in a judgment, decree or final order enjoining future violations of,
or prohibiting activities subject to, federal or state securities laws or
finding any violations with respect to such laws.
(f) To the knowledge of Newport, Crossroads and RPD, all of the persons
with respect to whom information is given in response to this Item 2 are
citizens of the United States.
Page 5 of 11 Pages
<PAGE>
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to that certain Note Conversion Agreement dated as of February
27, 1998 by and between Centura Software Corporation, a California corporation
(the "Issuer"), and Newport (the "Conversion Agreement"), Newport converted the
aggregate amount of principal and accrued interest under that certain Floating
Rate Convertible Subordinated Note Due 1998 (the "Note") into an aggregate of
11,415,094 shares of Common Stock of the Issuer (the "Common Stock"). As of
February 27, 1998, the aggregate amount of principal and accrued interest under
the Note was $12,251.771.19. Newport acquired the Note at a discount from
Computer Associates International, Inc., a Delaware corporation ("Computer
Associates"), pursuant to that certain Note Purchase and Sale Agreement dated as
of February 27, 1998 by and among the Issuer, Newport and Computer Associates.
The consideration paid by Newport to Computer Associates to acquire the Note was
originally obtained by Newport in the form of capital contributions from each
member of Newport at the time the limited liability company was formed.
The foregoing summary of the Conversion Agreement is qualified in its
entirety by reference to the form of Conversion Agreement included as Exhibit
99.1 to this Schedule 13D and incorporated herein in its entirety by reference.
ITEM 4. PURPOSE OF TRANSACTION.
As disclosed in Item 3 above, on February 27, 1998 (the "Closing
Date"), Newport purchased the Note and converted it into 11,415,094 shares of
Common Stock of Issuer, pursuant to the terms and conditions of the Conversion
Agreement. The Common Stock was acquired by Newport solely for investment
purposes.
In connection with the closing of the Conversion Agreement, the Issuer
and Newport entered into an Investor Rights Agreement dated as of February 27,
1998, pursuant to which the Issuer has agreed to file, not later than December
30, 1998, with the Securities and Exchange Commission a registration statement
on Form S-3 covering the resale of the Common Stock. In addition, the Issuer
agreed that, on or after June 1, 1998, the Issuer will use its best efforts to
include in any registration statement it files in connection with proposed
public offerings of its equity securities all shares of Common Stock requested
to be so included by the holders thereof. Pursuant to the Investor Rights
Agreement, Newport and its members were granted a right of first refusal to
purchase a pro rata share of any New Securities (as defined in the Investor
Rights Agreement) which the Issuer may, from time to time, propose to sell and
issue.
The foregoing description of the Investor Rights Agreement is qualified
in its entirety by reference to the form of Investor Rights Agreement included
as Exhibit 99.2 to the Schedule 13D and incorporated herein in its entirety by
reference.
Pursuant to the Conversion Agreement, effective upon the Closing Date,
the Issuer adopted an amendment to its Bylaws setting the number of directors on
its Board of Directors at seven (7) and appointed two (2) new directors to its
Board of Directors, each of whom were nominated by Newport. Provided that
Newport and/or its members and successors thereto continue to hold greater than
25% of the issued and outstanding stock of Issuer, the Issuer shall recommend in
all proxy materials relating to its annual meetings of shareholders that the
shareholders at each such meeting
Page 6 of 11 Pages
<PAGE>
elect two individuals to the Board of Directors who are nominated by Newport (or
the holders of a majority of the Common Stock if Newport has been dissolved) and
the Issuer shall at each such meeting cause its designated proxyholder to vote
all proxies received from shareholders in favor of such nominees, provided that
such nominees are reasonably acceptable to the Issuer. Provided that Newport
and/or its members or successors thereto continue to hold greater than 15% but
less than or equal to 25% of the issued and outstanding stock of the Issuer, the
Issuer shall recommend in such proxy materials that its shareholders at each
such meeting elect one (1) individual to its Board of Directors who is nominated
by Newport (or the holders of a majority of the Common Stock if Newport has been
dissolved) and the Issuer shall at each such meeting cause its designated
proxyholder to vote all proxies received from shareholders in favor of such
nominee, provided that such nominee is reasonably acceptable to the Issuer. In
the event the Issuer increases its board size above seven (7) directors prior to
the next annual meeting of shareholders, the Issuer shall not be required to
nominate or recommend election of additional Newport candidates to the Board of
Directors other than as set forth above, provided that the number of directors
who are officers, employees or paid full-time consultants of the Issuer is not
greater than two (2). In addition, the Issuer has agreed that the Compensation
Committee of the Board of Directors shall be comprised of three (3) directors
and shall include one (1) director who is nominated to the Board by Newport.
Pursuant to the Conversion Agreement, effective upon the Closing Date,
the Issuer adopted an amendment to its Bylaws providing that a two-thirds
supermajority vote of directors be required to approve any of the following
actions: (i) consolidation or merger of the Issuer with or into any other
corporation in which securities possessing more than 50% of the total combined
voting power of the Issuer's outstanding securities are transferred to a person
or persons different from the persons holding those securities immediately prior
to such transaction (other than a consolidation or merger in which the surviving
entity is the Issuer or one of its wholly-owned subsidiaries) or transfer or
sale of all or substantially all of the assets of the Issuer; and (ii) an
increase in the Issuer's secured indebtedness to an aggregate amount in excess
of $15 million. The Issuer agreed to not amend the foregoing supermajority
Bylaws amendment without Newport's consent so long as Newport and/or its members
or successors thereto continue to hold at least 7.5% of the issued and
outstanding capital stock of the Issuer.
Pursuant to the Conversion Agreement, effective upon the Closing Date,
the Issuer amended that certain Preferred Shares Rights Agreement dated August
3, 1994 between the Issuer and Chemical Trust Company of California (the "Rights
Plan"), to provide that (i) the sale of the Common Stock to Newport under the
Conversion Agreement is not deemed to be a Triggering Event (as defined in the
Rights Plan), (ii) neither Newport nor any of its members, affiliates,
associates, representatives or control persons shall be deemed an "Acquiring
Person" under the Rights Plan and (iii) Newport's nominees to the Board of
Directors shall be deemed "continuing directors" under the Rights Plan.
Pursuant to the Conversion Agreement, on the Closing Date, the Issuer
consummated a private placement of approximately 2,300,000 shares of its common
stock at a purchase price of $1.06 per share, and issued to the purchasers
thereof warrants to acquire approximately 583,000 shares of common stock at an
exercise price of $1.25 per share. None of the reporting persons under this
Schedule 13D acquired shares of the Issuer in such private placement.
Pursuant to the Conversion Agreement, Newport agreed that, in the event
that a shareholder vote is solicited by the Issuer to amend and restate its
Articles of Incorporation, Newport will vote in favor of proposed amendments to
effect any of the following measures: (i) a reverse stock split of
Page 7 of 11 Pages
<PAGE>
the Issuer's capital stock in a ratio reasonably recommended by the Issuer's
executive management, (ii) reincorporation of the Issuer into Delaware, and
(iii) an increase in the total number of authorized shares of the Issuer's
Common Stock (subject to certain conditions). Also pursuant to the Conversion
Agreement, Newport agreed that during the period commencing two weeks prior to
the Closing Date and continuing through the date on which Newport holds 5% or
less of the common stock acquired thereunder, Newport will not directly or
indirectly engage in short sales, derivative transactions or any similar hedging
techniques of strategies involving any Common Stock of Issuer.
The foregoing summary of the Conversion Agreement is qualified in its
entirety by reference to the form of Conversion Agreement included as Exhibit
99.1 to this Schedule 13D and incorporated herein in its entirety by reference.
Except as disclosed above, Newport has no present plans or proposals
with respect to the Issuer that relate to or could result in the occurrence of
any of the following events:
(a) The acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of
its subsidiaries;
(c) A sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries;
(d) Any change in the present board of directors or management of
the Issuer, including any plans or proposals to change the
number of term of directors or to fill any existing vacancies
on the board;
(e) Any material change in the present capitalization or dividend
policy of the Issuer;
(f) Any other material change in the Issuer's business or
corporate structure;
(g) Changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted
from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of
a registered national securities association;
(i) A class of equity securities of the Issuer becoming eligible
for termination of registration pursuant to section 12(g)(4)
of the Exchange Act; or
(j) Any action similar to any of those enumerated above.
Notwithstanding the foregoing, Newport reserves the right to develop such plans
or proposals and may hereafter develop such plans or proposals with respect to
the Issuer.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) As a result of Newport's conversion of the Note, Newport
beneficially owns 11,415,094 shares of Common Stock on the date hereof, or
approximately 38.7% of the 29,526,171 shares of Issuer's common stock that would
be issued and outstanding as of February 27, 1998. Newport may be deemed to have
the sole power to vote (and to direct the vote of) and to dispose of (and direct
the disposition of) the 11,415,094 shares of Common Stock owned of record by it.
As a result of Crossroads' ownership of a 15% equity interest in
Newport, Crossroads may be deemed to have indirect beneficial ownership of
1,712,263 shares of Common Stock on the date
Page 8 of 11 Pages
<PAGE>
hereof, or approximately 5.8% of the shares of Issuer's common stock that would
be issued and outstanding as of February 27, 1998. In addition, as a result of
Crossroads' role as the Managing Member of Newport, pursuant to which Crossroads
has the authority to vote (and to direct the vote of) and to dispose of (and
direct the disposition of) the 11,415,094 shares of Common Stock owned of record
by Newport, Crossroads may be deemed to have indirect beneficial ownership of
the 11,415,094 shares of Common Stock owned of record by Newport.
As a result of RPD's ownership of an 18.2% equity interest in Newport,
RPD may be deemed to have indirect beneficial ownership of 2,073,742 shares of
Common Stock of the Issuer, or approximately 7.0% of the shares of Issuer's
common stock that would be issued and outstanding as of February 27, 1998.
To the knowledge of Newport, Crossroads and RPD, no shares of Common
Stock are beneficially owned by any other persons, except for such indirect
beneficial ownership by Newport's members arising solely from the purchase of
the Common Stock by Newport.
(c) Except as disclosed herein, neither Newport, Crossroads nor RPD,
nor, to the knowledge of Newport, Crossroads and RPD, any person with respect to
whom information is given in the Schedule 13D, has effected any transaction in
the Common Stock during the past sixty (60) days.
(d) Except for Newport and its members (including without limitation
Crossroads and RFD), no other person is known to have the right to receive or
the power to direct the receipt of dividends from, or the proceeds from the sale
of, the Common Stock. Newport anticipates that, following the Closing Date under
the Conversion Agreement, Sterling Centura Software LLC, a nonmanaging member of
Newport which owns a 30.0% equity interest in Newport, will withdraw from
Newport and receive in redemption of its membership interest 3,424,528 shares of
the Common Stock, constituting approximately 11.6% of the shares of Issuer's
common stock that would be issued and outstanding as of February 27, 1998. At
such time as the sale of the Common Stock has been registered under and in
accordance with the Investor Rights Agreement, any other member of Newport
(including without limitation Crossroads and RPD) may redeem all or any portion
of such member's interest in Newport in return for a distribution to such member
of the percentage of the shares of Common Stock of the Issuer allocated to such
member. In no event will Crossroads be allowed to redeem more than 80% of its
membership interest in Newport.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Except as described in Item 4 and Item 5, Newport, Crossroads and RPD
have no contract, arrangement, understanding or relationship (legal or
otherwise) with any person with respect to any security of the Issuer,
including, but not limited to, transfer or voting of any securities, finder's
fees, joint ventures, loan or option arrangements, puts or calls, guarantees of
profits, division of profits or loss, or the giving or withholding of proxies.
Page 9 of 11 Pages
<PAGE>
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
EXHIBIT NO.
99.1 Note Conversion Agreement dated February 27, 1998 between
Issuer and Newport (excluding exhibits thereto).
99.2 Investor Rights Agreement dated February 27, 1998 between
Issuer and Newport (excluding exhibits thereto).
99.3 Agreement to Jointly File Schedule 13D dated March 6, 1998
among Newport, Crossroads and RPD.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: March 6, 1998.
NEWPORT ACQUISITION COMPANY NO. 2 LLC
By: Crossroads Capital Partners, LLC, as Managing
Member
By /S/ DENNIS SIMON
------------------------------------------------
Dennis I. Simon
Managing Member
(Principal Executive Officer)
CROSSROADS CAPITAL PARTNERS, LLC
By /S/ DENNIS SIMON
------------------------------------------------
Dennis I. Simon
Managing Member
/S/ DENNIS SIMON
---------------------------------------------------
Dennis I. Simon
Page 10 of 11 Pages
<PAGE>
RUBIN PACHULSKI DEW PROPERTIES, LLC
By /S/ SCOTT DEW
---------------------------------------------------
Scott Dew
Managing Member
/S/ STEWART RUBIN
---------------------------------------------------
Stewart Rubin
/S/ RICHARD PACHULSKI
---------------------------------------------------
Richard Pachulski
/S/ SCOTT DEW
---------------------------------------------------
Scott Dew
Page 11 of 11 Pages
EXHIBIT 99.1
------------
CENTURA SOFTWARE CORPORATION
NOTE CONVERSION AGREEMENT
FEBRUARY 27, 1998
<PAGE>
TABLE OF CONTENTS
Page
1. Conversion of Principal and Interest Indebtedness..........................1
1.1 Issuance of Common Stock..............................................1
1.2 Delivery into Escrow..................................................2
1.3 Purchase and Sale Irrevocable.........................................2
1.4 Closing; Delivery.....................................................2
2. Representations and Warranties of the Company..............................3
2.1 Organization, Good Standing and Qualification.........................3
2.2 Capital Stock.........................................................3
2.3 Authorization.........................................................4
2.4 Intentionally Omitted.................................................4
2.5 Compliance with Other Instruments.....................................4
2.6 SEC Reports...........................................................5
2.7 Compliance with SmallCap Continued Listing Requirements...............5
2.8 Absence of Certain Changes............................................5
2.9 Absence of Litigation.................................................6
2.10 No Undisclosed Events, Liabilities, Developments or
Circumstances........................................................6
2.11 No General Solicitation..............................................6
2.12 Employee Relations...................................................6
2.13 Intellectual Property Rights.........................................6
2.14 Title................................................................7
2.15 Insurance............................................................7
2.16 Regulatory Permits...................................................7
2.17 Internal Accounting Controls.........................................7
2.18 No Materially Adverse Contracts, Etc.................................7
2.19 Tax Status...........................................................8
2.20 Transactions With Affiliates.........................................8
2.21 Consent..............................................................8
3. Representations and Warranties of Purchaser................................8
3.1 Authorization.........................................................8
3.2 Purchase Entirely for Own Account.....................................9
3.3 Accredited Investor...................................................9
3.4 Restricted Securities.................................................9
3.5 Further Limitations on Disposition....................................9
3.6 Legends..............................................................10
3.7 Disclosure of Information............................................10
3.8 Membership of the Purchaser..........................................11
4. Registration of Securities................................................11
4.1 Rights Agreement.....................................................11
<PAGE>
TABLE OF CONTENTS
(continued)
Page
4.2 Prohibition on Hedging...............................................11
5. Covenants of the Company..................................................11
5.1 Nomination of Directors..............................................11
5.2 Bylaws Amendments....................................................12
5.3 Amendment to Preferred Shares Rights Agreement.......................12
5.4 Form D and Blue Sky..................................................12
5.5 Reporting Status.....................................................13
5.6 Financial Information................................................13
5.7 Listing..............................................................13
5.8 Filing of Form 8-K...................................................13
5.9 Private Placement....................................................14
5.10 Coast Consent.......................................................14
6. Covenants of the Purchaser................................................14
7. Conditions of the Purchaser's Obligations at the Closing..................14
7.1 Representations and Warranties.......................................14
7.2 Performance..........................................................14
7.3 Compliance Certificate...............................................14
7.4 Qualifications.......................................................15
7.5 Opinion of Company Counsel...........................................15
7.6 NASD Confirmation....................................................15
7.7 Release..............................................................15
7.8 Schedule of Exceptions...............................................15
8. Conditions of the Company's Obligations at Closing........................15
8.1 Representations and Warranties.......................................15
8.2 Performance..........................................................15
8.3 Qualifications.......................................................15
8.4 Note and Other Evidence of Principal Indebtedness....................16
8.5 NASD Confirmation....................................................16
9. Miscellaneous.............................................................16
9.1 Survival of Warranties...............................................16
9.2 Transfer; Successors and Assigns.....................................16
9.3 Governing Law........................................................16
9.4 Counterparts.........................................................16
9.5 Titles and Subtitles.................................................16
9.6 Notices..............................................................16
8.7 Company Advisor / Payment of Fees....................................17
9.8 Fees and Expenses....................................................17
-ii-
<PAGE>
TABLE OF CONTENTS
(continued)
Page
9.9 Attorney's Fees......................................................17
9.10 Amendments and Waivers..............................................17
9.11 Severability........................................................18
9.12 Delays or Omissions.................................................18
9.13 Entire Agreement....................................................18
9.14 Corporate Securities Law............................................18
9.15 Confidentiality.....................................................18
-iii-
<PAGE>
CENTURA SOFTWARE CORPORATION
NOTE CONVERSION AGREEMENT
This Note Conversion Agreement (the "AGREEMENT") is made as of the 27th
day of February 1998 by and between Centura Software Corporation, a California
corporation (the "COMPANY"), and Newport Acquisition Company No. 2 LLC, a
Delaware limited liability company (the "PURCHASER").
Recitals
Whereas, the Company and Computer Associates International, Inc. a
Delaware corporation (the "SELLER" or "CA"), entered into that certain Note
Purchase Agreement dated March 31, 1995 (the "PRIOR AGREEMENT") and that certain
Floating Rate Convertible Subordinated Note Due 1998 in the principal amount of
$10,000,000 (the "PRINCIPAL INDEBTEDNESS") dated as of April 3, 1995 in the form
attached hereto as EXHIBIT A (the "NOTE");
Whereas, the Company, the Purchaser and the Seller have entered into a
Note Purchase and Sale Agreement (the "PURCHASE AGREEMENT") of even date
herewith pursuant to which the Purchaser has agreed to purchase the Note and all
accrued interest thereunder (the "INTEREST INDEBTEDNESS") and all of Seller's
rights and obligations pursuant to the Prior Agreement; and the Seller has
agreed to sell the Note and the Interest Indebtedness to the Purchaser and to
assign to Purchaser all of its rights and obligations under the Note and the
Prior Agreement in consideration for the Purchaser's payment to the Seller of $6
million and the Company has agreed, in consideration of CA's release of the
Company with respect to the Note as set forth in a Warrant Purchase Agreement of
even date herewith between Seller and the Company in the form attached hereto as
EXHIBIT B ("WARRANT PURCHASE AGREEMENT"), to deliver and sell to the Seller
concurrently at a price of $0.001 per share a warrant in the form attached
hereto as EXHIBIT B (the "WARRANT") to purchase up to 500,000 shares of the
Company's Common Stock at an exercise price of $1.906 per share; and
Whereas, the Company and the Purchaser desire to convert the Principal
Indebtedness and Interest Indebtedness under the Note to equity securities of
the Company simultaneously with the Closing of the Purchase Agreement.
Now, therefore, for good and valuable consideration, the parties hereby
agree as follows:
1. Conversion of Principal and Interest Indebtedness.
1.1 Issuance of Common Stock. Subject to the terms and
conditions of this Agreement, at the Closing, in consideration for the
cancellation of all Principal Indebtedness and Interest Indebtedness under the
Note and any other instrument evidencing such indebtedness, the Company shall
issue and sell to the Purchaser and the Purchaser shall purchase a total of
11,415,094 shares of the Company's Common Stock. The shares of Common Stock
issuable upon the conversion hereunder (the "CONVERSION STOCK") shall also be
hereinafter referred to as the "STOCK" or the "SECURITIES."
<PAGE>
1.2 Delivery into Escrow. On the basis of the representations,
warranties, terms and conditions contained herein, on the date hereof each party
shall deliver to the financial entity or other entity mutually agreed to by the
Parties (the "ESCROW AGENT"), pursuant to an agreement in the form attached
hereto as EXHIBIT C (the "ESCROW AGREEMENT"), the following:
(a) Seller shall deliver the original signature Note;
(b) Purchaser shall deliver $6 million in cash or by wire
transfer;
(c) The Company shall deliver an affidavit executed by an
officer of the Company setting forth the Interest Indebtedness on the Note
calculated through February 27, 1998 and certified as correct by an officer of
the Seller (the "INTEREST AFFIDAVIT"); and
(d) Seller, Purchaser and the Company shall deliver each
of the other items required to be delivered by each of them pursuant to the
terms of the Escrow Agreement.
1.3 Purchase and Sale Irrevocable. The Company and Purchaser
each acknowledge and agree that by its delivery of the respective consideration
set forth above in Section 1.1 to the Escrow Agent, it shall have made an
irrevocable commitment to close the purchase, sale and assignment transactions
contemplated hereunder subject to the fulfillment of the terms and conditions of
this Agreement, the Purchase Agreement, and the Escrow Agreement.
1.4 Closing; Delivery.
(a) The issuance and sale of the Conversion Stock
hereunder shall take place at the offices of Venture Law Group, 2800 Sand Hill
Road, Menlo Park, California, at 2:00 p.m., on February __, 1998, or at such
other time and place as the Company and the Purchaser mutually agree upon,
orally or in writing (which time and place are designated as the "CLOSING"),
provided that such Closing occurs simultaneously with the closing of the
Purchase Agreement pursuant to the terms and conditions thereof (without waiver
of any term or condition thereof).
(b) At the Closing, in consideration for the conversion
of the Principal and Interest Indebtedness by the Purchaser, the Company shall
instruct the Escrow Agent to deliver to the Purchaser a stock certificate
representing the Conversion Stock being issued.
(c) At the Closing, in consideration for the issuance of
the Conversion Stock by the Company, the Purchaser shall instruct the Escrow
Agent to deliver to the Company for cancellation the Note and the Interest
Affidavit as defined in Section 1.2.(a) of the Purchase Agreement, setting forth
the Interest Indebtedness under the Note.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser that, except as set forth on a Schedule
of Exceptions attached hereto as EXHIBIT D, which exceptions shall be deemed to
be representations and warranties as if made hereunder:
-2-
<PAGE>
2.1 Organization, Good Standing and Qualification. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of California and has all requisite corporate power and
authority to carry on its business.
2.2 Capital Stock. The authorized capital of the Company
consists, or will consist, immediately prior to the Closing, of 60,000,000
shares of Common Stock, $0.01 par value per share, of which 15,780,886 shares
were issued and outstanding as of February 9, 1998, and 2,000,000 shares of
Preferred Stock, $0.01 par value per share, none of which are issued or
outstanding. All such shares have been duly authorized, and all such issued and
outstanding shares have been validly issued, are fully paid and nonassessable,
are not subject to any preemptive rights or rights of first refusal (other than
rights of first refusal held by the Company and specifically described in the
Schedule of Exceptions) under applicable law, the Articles of Incorporation or
Bylaws of the Company, or any agreement to which the Company is a party or by
which it is bound and are free of any liens or encumbrances other than any liens
or encumbrances created by or imposed upon the holders thereof. The Company has
also reserved (i) an aggregate of 2,000,000 shares of Common Stock issuable to
employees and consultants pursuant to the Company's 1995 Stock Option Plan, of
which 1,164,947 shares are issuable upon exercise of outstanding options under
such plan, (ii) an aggregate of 2,657,399 shares of Common Stock issuable to
employees and consultants pursuant to the Company's 1986 Stock Option Plan, of
which 2,657,399 shares are issuable upon exercise of outstanding options under
such plan, (iii) an aggregate of 400,000 shares of Common Stock issuable to
employees pursuant to the Company's 1992 Employee Stock Purchase Plan, of which
no shares are available for future issuance under such plan, (iv) 500,000 shares
of Common Stock issuable to non-employee directors pursuant to Company's 1996
Directors' Stock Option Plan, of which 300,000 shares are issuable upon exercise
of outstanding options under such plan, (v) non-plan options issued to the
Company's Chief Executive Officer, Chief Financial Officer and Vice President of
Marketing to purchase up to an aggregate of 1,500,000 shares of Common Stock,
(vi) up to 450,000 shares of Common Stock issuable upon exercise of warrants
granted or to be granted to certain third parties, including vendors, suppliers
and financial and investment advisors of the Company, prior to inclusion of the
Warrant for 500,000 shares of Common Stock to be issued to the Seller. The
shares of Conversion Stock have been duly authorized and, when issued and paid
for in accordance with this Agreement, will be validly issued, fully paid, and
nonassessable, and not subject to any preemptive rights or rights of first
refusal under applicable law, the Articles of Incorporation or Bylaws of the
Company, or any agreement to which the Company is a party or by which the
Company is bound, and are free of any taxes, claims, liens, charges or
encumbrances other than taxes, claims, liens, charges or encumbrances created by
or imposed upon the holders thereof; provided, however, that the Conversion
Stock may be subject to restrictions on transfer as set forth in this Agreement.
There are no agreements or arrangements under which the Company is obligated to
register the sale of any of its securities under the Securities Act of 1933, as
amended (the "1933 ACT"). There are no outstanding securities of the Company
which 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. There are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Conversion Stock. There are no outstanding
securities or instruments of the Company which contain any
-3-
<PAGE>
redemption or similar provisions, and there are on contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
redeem a security of the Company. The Company does not have any stock
appreciation rights or "phantom stock" plans or agreements or any similar plan
or agreement. Other than as set forth in the Reports, the Company has no
subsidiaries or equity interest in any other entity. The Company has furnished
to the Purchaser true and correct copies of the Company's Articles of
Incorporation, as amended and as in effect on the date hereof (the "ARTICLES OF
INCORPORATION"), and the Company's Bylaws, as amended and as in effect on the
date hereof (the "Bylaws"), and the terms of all securities convertible into or
exercisable for Common Stock and the material rights of the holders thereof in
respect thereto. The execution, delivery and performance by the Company of the
Transaction Agreements will not cause the conversion rights or exercise rights
of any securities convertible into or exercisable for Common Stock to be
accelerated.
2.3 Authorization. The execution, delivery and performance by
the Company of this Agreement and the Investor Rights Agreement attached hereto
as EXHIBIT E (the "RIGHTS AGREEMENT" and together with the Agreement and the
Purchase Agreement, the "TRANSACTION AGREEMENTS") are within the Company's
corporate power and have been duly authorized by all requisite action by the
Company. The Transaction Agreements have been duly executed and delivered by the
Company and this Agreement constitutes, and the Rights Agreement when executed
and delivered in accordance with this Agreement will constitute, the valid and
binding obligation of the Company, enforceable in accordance with their
respective terms, except as such enforceability may be limited by principles of
public policy and subject to the laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules of law governing
specific performance, injunctive relief or other equitable remedies.
2.4 Intentionally Omitted.
2.5 Compliance with Other Instruments. The execution, delivery
and performance of the Transaction Agreements and the consummation of the
transactions contemplated thereby will not result in any violation or default of
any provisions of the Articles of Incorporation or Bylaws of the Company or of
any instrument, judgment, order, writ, decree or contract to which the Company
is a party or by which the Company is bound or, to the Company's knowledge, of
any provision of federal or state statute, rule or regulation applicable to the
Company, or be in conflict with or constitute, with or without the passage of
time and giving of notice, either a default under any such provision,
instrument, judgment, order, writ, decree or contract or an event which results
in the creation of any lien, charge or encumbrance upon any assets of the
Company.
2.6 SEC Reports. The Company has filed with the Securities and
Exchange Commission (the "COMMISSION") via Edgar its Annual Report on Form 10-K
for the year ended December 31, 1996 and its Quarterly Reports on Form 10-Q for
the first three quarters of the year ended December 31, 1997 (the "REPORTS"),
and such Reports are available to Purchaser through Edgar in electronic format.
As of their respective filing dates, the Reports complied in all material
respects with the requirements of the Securities Exchange Act of 1934, as
amended, and none of the Reports contained any untrue statement of a material
fact or omitted to state a
-4-
<PAGE>
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances in which they were made, not
misleading, except to the extent corrected by a document subsequently filed with
the Commission and provided to Purchaser prior to the date hereof. No other
information provided by or on behalf of the Company to the Purchaser which is
not included in the Reports, including, but not limited to, information referred
to in Section 2.2 of this Agreement, contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements therein, in light of the circumstance under which they are or were
made, not misleading. Neither the Company nor any of its officers, directors,
employees or agents have provided the Purchaser with any material, nonpublic
information.
2.7 COMPLIANCE WITH SMALLCAP CONTINUED LISTING REQUIREMENTS.
After giving effect to the transactions contemplated hereunder and a private
placement of the Company's equity securities scheduled to close concurrently
with the Closing, on the Closing Date the Company will have (a) net tangible
assets in excess of $2,000,000, (b) a public float of in excess of 500,000
shares, (c) a market value for the public float in excess of $1,000,000, (d) in
excess of 300 shareholders, (e) at least two market makers for its registered
securities and (f) corporate governance standards duly adopted by its Board of
Directors which the Company reasonably believes satisfy published requirements
for The Nasdaq SmallCap Market. After giving effect to the transactions
contemplated hereunder and the private placement referenced above, the Company
reasonably believes that (A) on the Closing Date the Company will be in
compliance with all other requirements, other than the $1.00 per share bid price
maintenance requirement, imposed by Nasdaq upon the Company with respect to the
continued listing of the Common Stock for quotation on The Nasdaq SmallCap
Market, and (B) the Common Stock of the Company will continue to be listed for
quotation on The Nasdaq SmallCap Market.
2.8 Absence of Certain Changes. Since September 30, 1997,
there has been no material adverse change and no material adverse development in
the business, properties, operations, financial condition, results of operations
or prospects of the Company. The Company has not taken any steps, and does not
currently expect to take any steps, to seek protection pursuant to any
bankruptcy law nor does the Company have any knowledge or reason to believe that
its creditors intend to initiate involuntary bankruptcy proceedings. Since
September 30, 1997 the Company has not declared or paid any dividends, sold any
assets outside of the ordinary course of business or had material capital
expenditures.
2.9 ABSENCE OF LITIGATION. There is no action, suit,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company, threatened against or affecting the Company, its
Common Stock or any of the Company's officers or directors in their capacities
as such or that questions the validity of the Transaction Agreements or the
right of the Company to enter into them, or to consummate the transactions
contemplated thereby.
2.10 NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR
CIRCUMSTANCES. No event, liability, development or circumstance has occurred or
exists, or to the Company's knowledge is contemplated to occur, with respect to
the Company or its business, properties,
-5-
<PAGE>
prospects, operations or financial condition, that would be required to be
disclosed by the Company under applicable securities laws on a registration
statement filed with the SEC relating to an issuance and sale by the Company of
its Common Stock and which has not been publicly announced.
2.11 No General Solicitation. Neither the Company, nor any of
its affiliates, nor any person acting on its or 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
Conversion Stock.
2.12 Employee Relations. The Company is not involved in any
union labor dispute nor, to the knowledge of the Company, is any such dispute
threatened. None of the Company's employees is a member of a union, the Company
is not a party to a collective bargaining agreement, and the Company believes
that its relations with is employees are good. No executive officer (as defined
in Rule 501(f) of the 1933 Act) has notified the Company that such officer
intends to leave the Company or otherwise terminate such officer's employment
with the Company.
2.13 Intellectual Property Rights. The Company owns or
possesses 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 its business as
now conducted. 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. The Company does
not have any knowledge of any infringement by the Company of trademarks, trade
name rights, patents, patent rights, copyrights, inventions, licenses, service
names, service marks, service mark registrations, trade secret or other similar
rights of others, or of any such development of similar or identical trade
secrets or technical information by others, other than technology underlying
competitive products in the market, and there is no claim, action or proceeding
being made or brought against, or to the Company's knowledge, being threatened
against the Company regarding trademarks, trade names, patents, patent rights,
invention, copyright, license, service names, service marks, service mark
registrations, trade secrets or other infringements; and the Company is unaware
of any facts or circumstances which might give rise to any of the foregoing. The
Company has taken reasonable security measures to protect the secrecy,
confidentiality and value of all of its intellectual properties.
2.14 Title. The Company has good and marketable title to all
real property and good and marketable title to all personal property owned by it
which is material to the business of the Company free and clear of all liens,
claims, charges, encumbrances and defects such as do not materially affect the
value of such property and do not interfere with the use made and proposed to
made of such property by the Company. Any real property and facilities held
under lease by the Company is held by it under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by the Company.
-6-
<PAGE>
2.15 Insurance. The Company is insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as management of the Company believes to be prudent and customary in the
businesses in which the Company is engaged. The Company has not been refused any
insurance coverage sought or applied for and the Company has no reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not materially
and adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company.
2.16 Regulatory Permits. The Company possesses, to its
knowledge, all certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct its business, and the Company has not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit.
2.17 Internal Accounting Controls. The Company maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
2.18 No Materially Adverse Contracts, Etc. The Company is not
subject to any charter, corporate or other legal restriction, or any judgment,
decree, order, rule or regulation which in the reasonable business judgment of
the Company's officers, who were appointed as officers of the Company on
December 5, 1997, has or could reasonably be expected in the future to have a
material adverse effect on the Company. The Company is not a party to any
contract, agreement or arrangement which in the reasonable business judgment of
the Company's officers, who were appointed as officers of the Company on
December 5, 1997, has or could reasonably be expected to have a material adverse
effect on the Company.
2.19 Tax Status. The Company has made or filed all tax
returns, reports and declarations required by any jurisdiction to which it is
subject (unless and only to the extent that the Company has set aside on its
books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, and has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company know of no basis for any such
claim.
2.20 TRANSACTIONS WITH AFFILIATES. None of the officers,
directors, or employees of the Company is presently a party to any transaction
with the Company (other than
-7-
<PAGE>
for services as employees, officers and directors), including any contract,
agreement or arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.
2.21 Consent. Coast Business Credit is the sole holder of
Senior Indebtedness under the Note. The Company has obtained the oral consent of
such holders of Senior Indebtedness under the Note to the transactions
contemplated hereunder and under the Transaction Agreements and will use best
efforts to obtain the written consent of such holder prior to the Closing.
2.22 ENVIRONMENT LAWS.To its knowledge, the Company (i) is in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) has received all permits, licenses and
other approvals required of it under applicable Environmental Laws to conduct
its respective businesses and (iii) is in compliance with all terms and
conditions of any such permit, license or approval where, in each of the three
foregoing cases, the failure to so comply would have individually or in the
aggregate, a material adverse effect on the Company.
3. Representations and Warranties of Purchaser. The Purchaser hereby
represents and warrants to the Company that:
3.1 Authorization. The execution, delivery and performance by
the Purchaser of the Transaction Agreements are within the Purchaser's limited
liability company power and have been duly authorized by all requisite action by
the Purchaser. The Transaction Agreements have been duly executed and delivered
by the Purchaser and this Agreement constitutes, and the Rights Agreement when
executed and delivered in accordance with this Agreement will constitute, the
valid and binding obligation of the Purchaser, enforceable in accordance with
their respective terms, except as such enforceability may be limited by
principles of public policy and subject to the laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies.
3.2 Purchase Entirely for Own Account. The Purchaser is
acquiring the shares of Conversion Stock hereunder for investment for the
Purchaser's own account, and not as a nominee or agent, and not with a view to
the resale or distribution of any part thereof. Purchaser has no present
intention of selling, granting any participation in, or otherwise distributing
the Securities other than to members of the Purchaser as of the date hereof.
3.3 Accredited Investor. The Purchaser is an accredited
investor as defined in Rule 501(a) of Regulation D promulgated under the 1933
Act.
-8-
<PAGE>
3.4 Restricted Securities. Purchaser understands that the
Securities are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such Securities may be resold without registration under
the 1933 Act, only in certain limited circumstances. In this connection,
Purchaser represents that it is familiar with SEC Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by the Act.
3.5 Further Limitations on Disposition. Notwithstanding
anything to the contrary contained in Section 3.5 of the Purchase Agreement,
without in any way limiting the representations set forth in this Agreement,
Purchaser further agrees not to make any disposition of all or any portion of
the Securities unless and until:
(a) There is then in effect a Registration Statement
under the 1933 Act covering such proposed disposition and such disposition is
made in accordance with such Registration Statement; or
(b) (i) Purchaser shall have notified the Company of the
proposed disposition and shall have furnished the Company with such information
as is necessary to effect the proposed disposition, (ii) the transferee has
agreed in writing for the benefit of the Company to be bound by this Section 3,
and (iii) if reasonably requested by the Company, Purchaser shall have furnished
the Company with an opinion of counsel, reasonably satisfactory to the Company,
that such disposition will not require registration under the 1933 Act.
3.6 Legends. Purchaser understands that the Securities, and
any securities issued in respect thereof or exchange therefor, may bear one or
all of the following legends, if applicable:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS
SOLD PURSUANT TO RULE 144 OF SUCH ACT."
(b) Any legend required by the laws of the State of
California, including any legend required by the California Department of
Corporations.
(c) Any legend required by the Blue Sky laws of any other
state to the extent such laws are applicable to the shares represented by the
certificate so legended.
(d) Any legend required by the Company's Shareholder
Rights Plan.
The legends set forth in subparagraphs (a), (b) and (c) above shall be removed
upon application to the Company after the one year anniversary date of this
Agreement and the Company shall
-9-
<PAGE>
promptly issue a certificate without such legends to the holder of Securities
upon which it is stamped and shall remove all stop transfer orders and other
transfer restrictions communicated to the Company's transfer agent, if (i) such
Securities are registered for sale under the 1933 Act, (ii) in connection with a
sale transaction, such holder provides the Company with an opinion of counsel,
in a generally acceptable form, to the effect that a public sale, assignment or
transfer of the Securities may be made without registration under the 1933 Act
or (iii) such holder provides the Company with reasonable assurances that the
Securities can be sold pursuant to Rule 144 and the Company's counsel has
reasonably determined that the legends set forth in subparagraphs (a), (b) and
(c) above may be removed under Rule 144; provided however, that in the event
Purchaser is granted piggy-back registration rights in connection with an equity
offering by the Company prior to the one year anniversary date of this
Agreement, the legends set forth in subparagraphs (a), (b) and (c) above shall
be removed upon application to the Company and the Company shall issue a
certificate without such legends to the holder of Securities upon which it is
stamped.
3.7 Disclosure of Information. Purchaser has had an
opportunity to discuss the Company's business, management, financial affairs and
the terms and conditions of the offering of the Securities with the Company's
management and has had an opportunity to review the Company's Reports. Purchaser
understands that such discussions, as well as the written information issued by
the Company, were intended to describe the aspects of the Company's business
which it believes to be material.
3.8 Membership of the Purchaser. EXHIBIT F attached hereto
contains a true and complete list of all of the members of the Purchaser.
4. Registration of Securities.
4.1 Rights Agreement. The Company and the Purchaser will enter
into an Investor Rights Agreement in the form attached hereto as EXHIBIT E,
setting forth the obligations and the rights of the parties, respectively, with
respect to registration of the Securities.
4.2 Prohibition on Hedging. During the period commencing with
the date that is two (2) weeks prior to the Closing and continuing through the
date on which the Purchaser holds 5% or less of the Conversion Stock acquired
hereunder, the Purchaser hereby agrees that it shall not directly or indirectly
engage in short sales, derivative transactions or any similar hedging techniques
or strategies involving any Common Stock of the Company.
5. Covenants of the Company. The Company agrees that:
5.1 Nomination of Directors. On or before the Closing date,
effective upon the consummation of the transaction contemplated hereunder, the
Company shall have (i) adopted an amendment to its Bylaws setting the number of
directors on its Board of Directors at seven (7) and (ii) appointed two (2) new
directors to its Board of Directors, each of whom shall have been nominated by
the Purchaser at least three (3) business days prior to the Closing Date,
provided that such individuals are reasonably acceptable to the Company.
Provided that the Purchaser and/or one or more of the persons listed on EXHIBIT
F continues to hold greater than 25% of the issued and outstanding stock of the
Company as of the record date for the mailing of
-10-
<PAGE>
proxy materials to shareholders in connection with the Company's annual meeting
of shareholders, the Company shall recommend in such proxy materials that
shareholders at each such meeting elect two (2) individuals to its Board of
Directors who were nominated by the Purchaser (or the holders of a majority of
the Conversion Stock if the Purchaser has been dissolved) and the Company shall
at each such meeting cause its designated proxyholder to vote proxies received
from shareholders in favor of such nominees, provided that such nominees are
reasonably acceptable to the Company. Provided that the Purchaser and/or one or
more of the persons listed on EXHIBIT F continues to hold greater than 15% but
less than or equal to 25% of the issued and outstanding stock of the Company as
of the record date for the mailing of proxy materials to shareholders in
connection with the Company's annual meeting of shareholders, the Company shall
recommend in such proxy materials that shareholders at each such meeting elect
one (1) individual to its Board of Directors who was nominated by the Purchaser
(or the holders of a majority of the Conversion Stock if the Purchaser has been
dissolved) and the Company shall at each such meeting cause its designated
proxyholder to vote proxies received from shareholders in favor of such nominee,
provided that such nominee is reasonably acceptable to the Company. In the event
the Company increases its Board size above seven (7) directors prior to the next
annual meeting of shareholders, the Company shall not be required to nominate or
recommend election of additional Purchaser candidates to the Company's Board of
Directors other than as set forth above in this Section 5.1, provided that the
number of directors who are officers, employees, or paid full-time consultants
of the Company is not greater than two (2). The Compensation Committee of the
Board of Directors shall be comprised of three (3) directors and shall include
one (1) director who was nominated to the Board by the Purchaser.
5.2 Bylaws Amendments. On or before the Closing date,
effective upon the consummation of the transaction contemplated hereunder, the
Company shall have adopted an amendment to its Bylaws providing that a
two-thirds super majority vote of directors be required to approve any of the
following actions:
(i) consolidation or merger of the Company with or into
any other corporation in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Company's outstanding securities
are transferred to a person or persons different from the persons holding those
securities immediately prior to such transaction (other than a consolidation or
merger in which the surviving entity is the Company or one of its wholly-owned
subsidiaries) or transfer or sale of all or substantially all of the assets of
the Company; or
(ii) an increase in the Company's secured indebtedness to
an aggregate amount in excess of $15 million.
The Company agrees that it will not amend the foregoing super majority bylaws
amendment without obtaining the prior written consent of the Purchaser (or the
holders of a majority of the Conversion Stock if the Purchaser has been
dissolved) so long as the Purchaser and/or one or more of the persons listed on
EXHIBIT F continues to hold at least 7.5% of the issued and outstanding capital
stock of the Company.
-11-
<PAGE>
5.3 AMENDMENT TO PREFERRED SHARES RIGHTS AGREEMENT. On or
before the Closing Date, the Company shall have taken all appropriate action to
ensure that (a) the sale of the Conversion Stock to Purchaser hereunder is not
deemed to be a Triggering Event as that term is defined in Section 1(y) of the
Preferred Shares Rights Agreement dated August 3, 1994 between the Company and
Chemical Trust Company of California (the "RIGHTS PLAN"), (b) neither the
Purchaser nor any of its members, Affiliates, Associates, representatives or
control persons shall be deemed an "Acquiring Person" under the Rights Plan and
(c) the Purchaser nominees to the Board of Directors shall be deemed "Continuing
Directors" under the Rights Plan.
5.4 Form D and Blue Sky. The Company agrees to file a Form D
with respect to the Conversion Stock as required under Regulation D and to
provide a copy thereof to the Purchaser promptly after such filing. The Company
shall, on or before the Closing Date, take such action as the Company shall
reasonably determine is necessary to qualify the Conversion Stock for, or obtain
exemption for the Conversion Stock for, sale to the Purchaser at the Closing
pursuant to this 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 Purchaser on or prior to the Closing Date. The Company shall make
all filings and reports relating to the offer and sale of the Conversion Stock
required under applicable securities or "Blue Sky" laws of applicable states of
the United States following the Closing Date.
5.5 Reporting Status. Until the date as of which the Holders
(as that term is defined in the Rights Agreement) may sell all of the Conversion
Shares without restriction pursuant to Rule 144(k) promulgated under 1933 Act
(or successor thereto), the Company shall file all reports required to be filed
with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 ACT"), and until that date, the Company shall not terminate its status as
an issuer required to file reports under the 1934 Act even if the 1934 Act, or
the rules and regulations thereunder would otherwise permit such termination,
unless the reporting requirements of Rule 144(k) have also been amended to
permit the Holders to sell the Conversion Shares without restriction.
5.6 Financial Information. The Company shall file with the SEC
via Edgar all registration statements and all reports required pursuant to the
1933 Act and the 1934 Act, including without limitation, its Annual Reports on
Form 10-K, its Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
any registration statements (including those on Form S-8) or amendments and such
reports will be available to the Purchaser via Edgar. The Company shall deliver
to the Purchaser copies of any notices and other information made available or
given to the shareholders of the Company generally, contemporaneously with the
making available or giving thereof to the shareholders.
5.7 Listing. The Company shall use its best efforts to
maintain the inclusion for quotation on The Nasdaq SmallCap Market of its Common
Stock, and without limiting the generality of the foregoing, the Company shall
use its best efforts to arrange for at least two market makers to register with
the NASD or any other comparable exchange as such with respect to the Common
Stock. The Company shall not knowingly take any action which would be
-12-
<PAGE>
reasonably expected to result in the removal of the Common Stock from quotation
on The Nasdaq SmallCap Market. At such time as the Company is able to satisfy
the listing requirements on the Nasdaq National Market System ("NNM") and the
Company's management reasonably believes that the Company will be able to
continue to comply with the continued listing requirements of the NNM
thereafter, the Company shall use its reasonable efforts to secure designation
and quotation of its outstanding Common Stock on the NNM. The Company shall
promptly report to its Board of Directors information or notices it receives
regarding the continued eligibility of its Common Stock for quotation on any
automated quotation system or securities exchange.
5.8 Filing of Form 8-K. Within five (5) business days
following the Closing Date, the Company shall file a Form 8-K with the SEC
describing the terms of the transactions contemplated by the Transaction
Agreements and the Note Purchase Agreement in the form specified by the 1934
Act.
5.9 Private Placement. Concurrently with the Closing of the
transactions contemplated hereunder, the Company will consummate a private
placement of Common Stock of the Company, at not less than $1.06 per share (with
up to 25% warrant coverage at an exercise price of at least $1.25 per share),
resulting in gross proceeds to the Company of at least $1,000,000.
5.10 COAST CONSENT. The Company shall have obtained from
Coast, as a condition to the Closing, a written consent by Coast to the
Company's execution, delivery and performance of the Transaction Agreements and
a waiver, effective upon the Closing, of any defaults by the Company under its
debt facility with Coast occurring prior to the Closing Date.
6. Covenants of the Purchaser. In the event that a shareholder vote is
solicited by the Company to amend and restate its Articles of Incorporation, the
Purchaser agrees to vote in favor of proposed amendments to effect any of the
following measures:
(a) a reverse stock split of the Company's capital stock in a
ratio reasonably recommended by the Company's executive management;
(b) reincorporation of the Company into Delaware; and
(c) an increase in the total number of authorized shares of
the Company's Common Stock, provided however that the Purchaser shall not be
obligated to vote in favor of such an amendment unless the authorized number of
the Company's Common Stock has been reduced to a number that is less than 60
million as the result of a reverse stock split pursuant to subsection 6(a)
above.
7. Conditions of the Purchaser's Obligations at the Closing. The
obligations of the Purchaser under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
-13-
<PAGE>
7.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true and correct on
and as of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of the Closing.
7.2 Performance. The Company shall have performed and complied
with all covenants, agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing.
7.3 Compliance Certificate. The President of the Company shall
deliver to the Purchaser at the Closing a certificate ("OFFICER'S COMPLIANCE
CERTIFICATE") certifying that (a) the conditions specified in Sections 5.1, 5.2,
5.3, 7.1 and 7.2 have been fulfilled and (b) all conditions of the Company's
obligations under the Purchase Agreement and the Warrant Purchase Agreement have
been fulfilled or waived.
7.4 Qualifications. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Securities pursuant to this Agreement shall be obtained and effective as
of the Closing.
7.5 Opinion of Company Counsel. The Purchaser shall have
received from Venture Law Group, counsel for the Company, an opinion, dated as
of the Closing, in substantially the form of EXHIBIT G.
7.6 NASD Confirmation. The Company shall have received
confirmation from the National Association of Securities Dealers, Inc. (the
"NASD") that approval by the Company's shareholders is not required prior to the
consummation of the actions (including without limitation, the issuance of the
Securities to Purchaser) contemplated hereunder.
7.7 Release. CA shall have executed and delivered the Warrant
Purchase Agreement.
7.8 Schedule of Exceptions. The Company shall have delivered
the final Schedule of Exceptions, reasonably approved by Purchaser, in the form
attached as EXHIBIT D.
8. Conditions of the Company's Obligations at Closing. The obligations
of the Company under this Agreement are subject to the fulfillment, on or before
the Closing, of each of the following conditions, unless otherwise waived:
8.1 Representations and Warranties. The representations and
warranties of the Purchaser contained in Section 3 shall be true and correct in
all material respects on and as of the Closing with the same effect as though
such representations and warranties had been made on and as of the Closing.
-14-
<PAGE>
8.2 Performance. All covenants, agreements and conditions
contained in this Agreement to be performed by the Purchaser on or prior to the
Closing shall have been performed or complied with in all material respects.
8.3 Qualifications. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Securities pursuant to this Agreement shall be obtained and effective as
of the Closing.
8.4 Note and Other Evidence of Principal Indebtedness. The
Purchaser shall have delivered to the Company for cancellation the originally
executed Note and any other related documents or instruments, including the
Interest Affidavit, evidencing indebtedness under the Note.
8.5 NASD Confirmation. The Company shall have received
confirmation from the NASD that approval by the Company's shareholder is not
required prior to the consummation of the actions (including without limitation,
the issuance of the Securities to Purchaser) contemplated hereunder.
9.Miscellaneous.
9.1 Survival of Warranties. Unless otherwise set forth in this
Agreement, the warranties, representations and covenants of the Company and the
Purchaser contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing for a period of two (2)
years following the Closing.
9.2 Transfer; Successors and Assigns. The terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties and successive holders of all
or any portion of the Conversion Stock and their respective successors and
assigns. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto, holders of Conversion Stock, or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
9.3 Governing Law. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of California, without giving effect to principles of conflicts of
law.
9.4 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
9.5 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience of reference only and are not to be
considered in construing or interpreting this Agreement.
-15-
<PAGE>
9.6 Notices. Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient upon delivery, when
delivered personally or by overnight courier or sent by telegram or fax
(provided that electronic confirmation of transmission has been received), or
forty-eight (48) hours after being deposited in the US mail, as certified or
registered mail, with postage prepaid, addressed to the party to be notified at
such party's address as set forth on the signature page hereto, or as
subsequently modified by written notice, and (a) if to the Company, with a copy
to Craig W. Johnson, Venture Law Group, 2800 Sand Hill Road, Menlo Park, CA
94025 or (b) if to the Purchaser, with a copy to William Caraccio, Pillsbury
Madison & Sutro LLP, 2550 Hanover Street, Palo Alto, CA 94304.
9.7 Company Advisor/Payment of Fees. Purchaser represents
that it neither is nor will be obligated for any finder's fee or commissions to
any third party in connection with this transaction. The Company represents that
it has retained Rochon Capital Group, Ltd. ("ROCHON") as its advisor in
connection with the transactions contemplated by this Agreement and the Note
Purchase and Sale Agreement. Purchaser acknowledges that Rochon has acted solely
as an advisor to the Company, and has in no way acted for or on behalf of
Purchaser in connection herewith. The information provided to Purchaser by the
Company (or by Purchaser) has not been subjected to independent verification by
Rochon, and no representation or warranty is made by Rochon as to the accuracy
or completeness of such information or the advisability of Purchaser entering
into this Agreement and consummating the transactions contemplated hereby.
Purchaser acknowledges that it has not relied on any statements made by Rochon
in connection with its decision to enter into and perform this Agreement and the
transactions contemplated hereby. The Company agrees to indemnify and to hold
harmless Purchaser from any liability for any compensation payable to Rochon
(and the costs and expenses of defending against such liability or asserted
liability) in connection with the transactions contemplated hereby. Each Party
agrees to hold Rochon harmless and the Company agrees to indemnify Rochon and
its officers, directors, principals, employees and agents (and their respective
heirs, successors and assigns) from and against any liability arising from this
Agreement, including the consummation of or the failure to consummate any or all
of the transactions contemplated hereby, except to the extent such liability
results from the gross negligence or willful misconduct of Rochon.
9.8 Fees and Expenses. The Company shall pay the reasonable
fees and expenses of legal, accounting and financial advisors for the Purchaser
incurred with respect to this Agreement and the transactions contemplated
hereby, provided such fees and expenses do not exceed $45,000 in the aggregate,
of which reimbursement for legal fees shall not exceed $30,000, reimbursement
for fees incurred as a result of due diligence conducted by individuals or
entitles not affiliated with prospective purchasers of the Company's capital
stock shall not exceed $10,000 and reimbursement of travel expenses shall not
exceed $5,000.
9.9 Attorney's Fees. If any action at law or in equity
(including arbitration) is necessary to enforce or interpret the terms of any of
the Agreements, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
-16-
<PAGE>
9.10 Amendments and Waivers. Any term of this Agreement may be
amended or waived only with the written consent of the Company and the holders
of at least two thirds (2/3) of the Conversion Stock. Any amendment or waiver
effected in accordance with this Section 9.10 shall be binding upon the
Purchaser and each transferee of the Conversion Stock and the Company.
9.11 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such provision, then
(a) such provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
9.12 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any party under this Agreement, upon any
breach or default of any other party under this Agreement, shall impair any such
right, power or remedy of such non-breaching or non-defaulting party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.
9.13 Entire Agreement. This Agreement, and any transaction
documents referred to herein constitute the entire agreement between the parties
hereto pertaining to the subject matter hereof, and any and all other written or
oral agreements or commitments relating to the subject matter hereof existing
between the parties hereto (except for any confidentiality provisions or terms
contained therein) are expressly superseded hereby and canceled.
9.14 Corporate Securities Law. THE SALE OF THE SECURITIES
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR
PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON THE QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO EXEMPT.
9.15 Confidentiality. Each party hereto agrees that, except
with the prior written permission of the other parties, it shall at all times
keep confidential and not divulge, furnish or make accessible to anyone,
including without limitation CA, any confidential
-17-
information, knowledge or data concerning or relating to the business or
financial affairs of the other parties to which such party has been or shall
become privy by reason of the Transaction Agreements, discussions or
negotiations relating to the terms of the Transaction Agreements, the
performance of its obligations hereunder or the ownership of Securities
purchased hereunder, except for such disclosure as is required by law. The
parties acknowledge and agree that the Company will file reports with the
Securities and Exchange Commission from time to time following the consummation
of the transactions hereunder and that press releases may also be required or
desirable, provided that such press releases will contain only such information
as may be required for proper disclosure in the opinion of legal counsel to the
Company. This Section 9.15 shall not prohibit the disclosure by Purchaser to its
members and permitted assignees of the Conversion Stock of such information,
knowledge or data, provided each recipient thereof agrees to be bound by the
confidentiality covenants hereunder.
[Signature Pages Follow]
-18-
<PAGE>
The parties have executed this Note Conversion Agreement as of the date
first written above.
COMPANY:
CENTURA SOFTWARE CORPORATION
By: /s/Scott R. Broomfield
----------------------------------------
Name: Scott R. Broomfield
-------------------------------------
(print)
Title: CEO
------------------------------------
Address: 975 Island Drive
Redwood Shores, CA 94065
Telephone: (650) 596-3400
Fax: (650) 596-4986
PURCHASER:
NEWPORT ACQUISITION
COMPANY NO. 2 LLC
By: Crossroads Capital Partners LLC,
as Managing Member
By: /s/James Skelton
---------------------------------------
Name: James Skelton
--------------------------------------
(print)
Title: Principal
------------------------------------
Address: 1600 Dove Street
Suite 300
Newport Beach, CA 92660
Telephone: (714) 261-1600
Fax: (714) 261-1655
SIGNATURE PAGE TO CONVERSION AGREEMENT
EXHIBIT 99.2
INVESTOR RIGHTS AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of this 27th day of February, 1998 by and between NEWPORT ACQUISITION
COMPANY NO. 2, LLC., a Delaware limited liability company ("Newport") and
CENTURA SOFTWARE CORPORATION, a California corporation (the "Company").
RECITALS:
A. THE HOLDER. Newport is a limited liability company duly organized
and in good standing under the laws of the State of Delaware with its principal
executive offices located in Newport Beach, California.
B. THE COMPANY. The Company is an existing corporation, formed under
the laws of the State of California, with its principal executive offices
located in Redwood Shores, California.
C. CORPORATE APPROVALS. Each of the parties to this Agreement has
obtained all necessary corporate and member approvals for the execution and
delivery of this Agreement.
D. ARM'S-LENGTH RELATIONSHIP. The parties to this Agreement intend to
conduct their relationships hereunder on an arm's-length basis.
E. PRIVATE PLACEMENT EXCHANGE. The Company intends to complete the
issuance to Newport of 11,415,094 shares of the Company's Common Stock, $.01 par
value per share (the "Common Shares"), in exchange for all of Newport's right,
title and interest in that certain Floating Rate Convertible Subordinated Note
Due 1998 of the Company, including all principal indebtedness and accrued
interest indebtedness thereunder (the "Note") pursuant to an exchange offering
exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Private Placement"). Newport acquired the Note from Computer
Associates International, Inc. ("CA") pursuant to that certain Note Purchase and
Sale Agreement dated the date hereof by and among Newport, CA and the Company.
F. INVESTOR RIGHTS. In conjunction with the Private Placement, the
Holder and the Company desire to enter into this Agreement to provide certain
registration and other investor rights as provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and for other good and valuable consideration had
and received, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. DEFINITIONS. As used herein, the following terms shall have the
following respective meanings:
-1-
<PAGE>
"Affiliate" shall mean any Person that directly or indirectly controls,
is controlled by, or is under common control with such Person. A Person shall be
deemed to control another Person if such Person owns five percent (5%) or more
of any equity interest in the "controlled" Person or possesses, directly or
indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock or
partnership or member interests, by contract, agreement or understanding
(whether oral or written), or otherwise.
"Common Shares" shall have the meaning set forth in Recital E of this
Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Holders" shall mean Newport, each of the Persons listed on Schedule 1
attached hereto and made a part hereof, any Affiliate of Newport or of any of
the Persons listed on Schedule 1 (other than the Company) and any transferee or
assignee under Section 10 hereof, and any combination of one or more such
Holders.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Other Holders" shall mean Persons (other than Holders) who are holders
of record of equity securities of the Company who subsequent to the date hereof
acquire more than five percent (5%) of the outstanding shares of Common Stock
pursuant to a transaction with the Company and to whom the Company grants
registration rights pursuant to a written agreement in connection with such
transaction.
"Person" shall mean any individual, corporation, association,
partnership, group (as defined in section 13(d)(3) of the Exchange Act), limited
liability company, joint venture, business trust or unincorporated organization,
or a government or any agency or political subdivision thereof.
"Registrable Shares" shall mean the Common Shares and any shares of
capital stock issued or issuable with respect to the Common Shares as a result
of any stock split, stock dividend, recapitalization, exchange or similar event
or otherwise. As to any particular Registrable Share, such Registrable Share
shall cease to be a Registrable Share when (w) it shall have been sold,
transferred or otherwise disposed of or exchanged pursuant to a registration
statement under the Securities Act; (x) it may be distributed to the public,
together with all other Registrable Shares held by the Holder of such share,
during any ninety (90) day period pursuant to and in compliance with all
applicable requirements of Rule 144 (or any successor provision) under the
Securities Act; (y) it shall have been sold or transferred in a private
transaction to a Person other than a Designated Transferee (as defined in
Section 10 below); or (z) it shall have been sold, transferred or otherwise
disposed of in violation of this Agreement.
"Registration Expenses" shall have the meaning set forth in Section
7.(a) hereof.
-2-
<PAGE>
"SEC" shall mean the Securities and Exchange Commission or any
successor agency thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended.
2. INCIDENTAL REGISTRATIONS.
(a) RIGHT TO INCLUDE REGISTRABLE SHARES. On or after June 1, 1998 (the
"Rights Commencement Date"), each time the Company shall determine to file a
registration statement under the Securities Act in connection with a proposed
offer and sale for cash of any equity securities (other than an offering of debt
securities which are convertible into equity securities) by the Company, the
Company will give prompt written notice of its determination to each Holder and
of such Holder's rights under this Section 2, at least twenty (20) days prior to
the anticipated filing date of such registration statement. Upon the written
request of each Holder made within fifteen (15) days after the receipt of any
such notice from the Company (which request shall specify the Registrable Shares
intended to be disposed of by such Holder), the Company will use its best
efforts to effect the registration under the Securities Act of all Registrable
Shares which the Company has been so requested to register by the Holders
thereof, to the extent required to permit the disposition of the Registrable
Shares so to be registered; PROVIDED, HOWEVER, that (i) if, at any time after
giving written notice of its intention to register any securities and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to proceed with the
proposed registration of the securities to be sold by it, the Company may, at
its election, give written notice of such determination to each Holder of
Registrable Shares and thereupon shall be relieved of its obligation to register
any Registrable Shares in connection with such registration (but not from its
obligation to pay the Registration Expenses in connection therewith), and (ii)
if such registration involves an underwritten offering, all Holders of
Registrable Shares requesting to be included in the Company's registration must
sell their Registrable Shares to the underwriters on the same terms and
conditions as apply to the Company, with such differences, including any with
respect to indemnification and liability insurance, as may be customary or
appropriate in combined primary and secondary offerings. If a registration
requested pursuant to this Section 2(a) involves an underwritten public
offering, any Holder of Registrable Shares requesting to be included in such
registration may elect, in writing at least five (5) days prior to the effective
date of the registration statement filed in connection with such registration,
not to register such securities in connection with such registration. No
registration effected under this Section 2 shall relieve the Company of its
obligations to effect the registration under Section 4 hereof.
(b) PRIORITY IN INCIDENTAL REGISTRATION. If a registration pursuant to
this Section 2 involves an underwritten offering and the managing underwriter(s)
in good faith advise(s) the Company in writing that, in its opinion, the number
of securities which the Company, the Holders and any other Persons intend to
include in such registration exceeds the largest number of securities which can
be sold in such offering without having an adverse effect on such offering
(including the price at which such securities can be sold), then the Company
will include in such registration (i) first, the securities the Company proposes
to sell for its
-3-
<PAGE>
own account; (ii) second, to the extent that the number of securities which the
Company proposes to sell is less than the number of securities which the Company
has been advised can be sold in such offering without having the adverse effect
referred to above, such number of Registrable Shares which the Holders have
requested to be included in such registration pursuant to Section 2(a) hereof;
PROVIDED, HOWEVER, that the aggregate value of the Registrable Securities to be
included in such registration by the Holders may not be so reduced to less than
twenty-five percent (25%) of the total value of all securities included in such
registration; and (iii) third, to the extent that the number of securities which
are to be included in such registration pursuant to clauses (i) and (ii) is, in
the aggregate, less than the number of securities which the Company has been
advised can be sold in such offering without having the adverse effect referred
to above, such number of other securities requested to be included in the
offering for the account of any Other Holders which, in the opinion of such
managing underwriter(s), can be sold without having the adverse effect referred
to above. The number of Registrable Shares included in such registration
statement shall be allocated pro rata among the Holders based on the number of
Registrable Shares held by each Holder.
3. HOLDBACK AGREEMENTS.
(a) If any registration of Registrable Shares shall be in connection
with a Qualified Public Offering (defined below), the Holders shall not effect
any public sale or distribution (except in connection with such public
offering), of any Registrable Securities (other than as part of such
underwritten public offering) during the one hundred twenty (120) day period (or
such lesser period as the managing underwriter(s) may permit) beginning on the
effective date of such registration, if, and to the extent, the managing
underwriter(s) of any such offering determine(s) such action is necessary or
desirable to effect such offering. A "Qualified Public Offering" is defined
herein as a firm commitment, underwritten public offering registered under the
Securities Act (other than a registration relating solely to a transaction under
Rule 145 under the Securities Act or to an employee benefit plan of the
Company), at a price per share of at least $2.00 and with aggregate proceeds to
the Company and/or any selling shareholders (before deduction for underwriters'
discounts and expenses) of at least $7,500,000.
(b) If any registration of Registrable Shares shall be in connection
with a Qualified Public Offering, the Company shall not effect any public sale
or distribution (except in connection with such public offering) of any of its
equity securities or of any security convertible into or exchangeable or
exercisable for any of its equity securities (in each case other than as part of
such underwritten public offering) during the one hundred twenty (120) day
period (or such lesser period as the managing underwriter(s) may permit)
beginning on the effective date of such registration, and the Company shall use
its best efforts to cause each member of the management of the Company who holds
any equity security and each other holder of five percent (5%) or more of the
outstanding shares of any equity security, or of any security convertible into
or exchangeable or exercisable for any equity security, of the Company purchased
from the Company (at any time other than in a public offering) to so agree.
-4-
<PAGE>
(c) In the event of any discretionary waiver or termination of the
restrictions set forth in the agreements described in Section 3(b) above by the
Company or the representatives of the underwriters, the number of shares subject
to such waiver shall be allocated among all persons subject to such agreements
and to all Holders pro rata based on the number of securities held.
4. REGISTRATION.
(a) MANDATORY REGISTRATION. The Company shall prepare and, no later
than 305 days after the date of issuance of the Common Shares (the "Filing
Deadline"), file with the SEC a registration statement on Form S-3 covering the
resale of all of the Registrable Shares, or such lesser amount of Registrable
Shares as the Holders shall in their discretion notify the Company to register.
In the event that Form S-3 is unavailable for such a registration, the Company
shall use such other form as is available for such a registration, subject to
the further provisions of this Section 4(a). The Company shall use its best
efforts to have the registration statement declared effective no later than 365
days after the date of issuance of the Common Shares and in any event shall have
the registration declared effective no later than 380 days after the date of
issuance of the Common Shares. In the event that Form S-3 is not available for
the registration of Registrable Shares hereunder, the Company shall (i) register
the sale of the Registrable Shares on another appropriate form and (ii)
undertake to register the Registrable Shares on Form S-3 as soon as such form is
available, provided that the Company shall maintain the effectiveness of the
registration statement then in effect until such time as a registration
statement on Form S-3 covering the Registrable Shares has been declared
effective by the SEC. No securities other than Registrable Shares will be
included in any registration statement filed pursuant to this Section 4(a)
subject to Section 4(e) below. The Company shall keep a registration statement
described in this Section 4(a) hereof effective pursuant to Rule 415 promulgated
under the Securities Act at all times until the earlier of (i) the date as of
which each of the Holders may sell all of the Registrable Shares held by such
Holder without restriction pursuant to Rule 144(k) promulgated under the
Securities Act or (ii) the date on which the Holders shall have sold all the
Registrable Shares to the public (the"Registration Period"). The registration
statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading.
(b) BLACK-OUT PERIODS. If (i) in the good faith judgment of the Board
of Directors of the Company, the disclosure which would be required in
connection with the mandatory registration under Section 4(a) above would be
seriously detrimental to the Company and the Board of Directors of the Company
concludes by a duly adopted resolution that, as a result, it is essential at
such time to defer the filing of such registration statement or to suspend the
sale of securities thereunder, and (ii) the Company shall furnish to such
Holders a certificate signed by the President of the Company stating that in the
good faith judgment of the Board of Directors of the Company it would be
seriously detrimental to the Company for such registration statement to be filed
or for securities to be sold thereunder in the near future and that it is,
therefore, essential to defer the filing of such registration statement or
-5-
<PAGE>
to suspend the sale of securities thereunder, then the Company shall have the
right to defer such filing or suspend the sale of securities thereunder for the
period during which such disclosure would be seriously detrimental (a "Black-out
Period"); PROVIDED, HOWEVER, that (A) the Company shall not have the right to
impose any Black-out Periods for ninety (90) days following the effectiveness of
the registration statement filed pursuant to Section 4(a) above, (B) no
Black-out Period shall extend longer than forty-five (45) consecutive calendar
days, (C) no Black-out Period may be imposed within forty-five (45) days
following the completion of a prior Black-out Period, and (D) the Company shall
not impose Black-out Periods which, in the aggregate, exceed ninety (90) days in
any twelve (12) month period. The Holders acknowledge and agree that the Company
may impose a legend setting forth the provisions of this Section 4(b) on the
Registrable Shares.
(c) SUBSEQUENT REGISTRATIONS. In the event fewer than all of the
Registrable Shares are covered by the registration effectuated pursuant to
Section 4(a) above, then, commencing six (6) months following the effective date
of such registration, upon the written request of the Holders of at least fifty
percent (50%) of the Registrable Shares not so covered that the Company effect
the registration of all or part of such Registrable Shares not so covered, and
specifying the amount and the intended method of disposition thereof, the
Company will promptly give notice of such requested registration to all other
Holders of Registrable Shares not so covered and, as expeditiously as possible,
use its best efforts to effect the registration under the Securities Act of: (i)
the Registrable Shares which the Company has been so requested to register by
such requesting Holders; and (ii) all other Registrable Shares which the Company
has been requested to register by any other Holder thereof by written request
received by the Company within thirty (30) days after the giving of such written
notice by the Company; PROVIDED, HOWEVER, that the Company shall not be required
to effect more than one (1) registration pursuant to this Section 4(c);
PROVIDED, FURTHER, that the Company shall not be obligated to file a
registration statement relating to a registration request under this Section
4(c), (x) if the registration request is delivered after delivery of a notice by
the Company of an intended registration and prior to the effective date of the
registration statement referred to in such notice, provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statements to become effective, or (y) within a period of ninety
(90) days after the effective date of any other registration statement of the
Company pursuant to which the Holders included Registrable Shares.
(d) REGISTRATION STATEMENT FORM. If any registration pursuant to this
Section 4 shall be in connection with an underwritten public offering, and if
the managing underwriter(s) shall advise the Company in writing that, in its
opinion, the use of a form of registration statement other than on Form S-3 is
of material importance to the success of such proposed offering, then such
registration shall be effected on such other form.
(e) PRIORITY IN REQUESTED REGISTRATIONS. If any registration pursuant
to this Section 4 involves an underwritten offering and the managing
underwriter(s) in good faith advise(s) the Company in writing that, in its
opinion, the number of securities requested to be included in such registration
(including securities of the Company which are not Registrable Shares) exceeds
the largest number of securities which can be sold in such offering without
having an adverse effect on such offering (including the price at which such
securities can
-6-
<PAGE>
be sold), then the Company will include in such registration (i) first, one
hundred percent (100%) of the Registrable Shares requested to be registered
pursuant to Section 4(a) hereof (provided that if the number of Registrable
Shares requested to be registered pursuant to Section 4(a) hereof exceeds the
number which the Company has been advised can be sold in such offering without
having the adverse effect referred to above, the number of such Registrable
Shares to be included in such registration by the Holders shall be allocated pro
rata among such Holders on the basis of the relative number of Registrable
Shares each such Holder has requested to be included in such registration); (ii)
second, to the extent that the number of Registrable Shares requested to be
registered pursuant to Section 4(a) hereof is less than the number of securities
which the Company has been advised can be sold in such offering without having
the adverse effect referred to above, such number of shares of equity securities
the Company requests to be included in such registration, and (iii) third, to
the extent that the number of Registrable Shares requested to be included in
such registration pursuant to Section 4(a) hereof and the securities which the
Company proposes to sell for its own account are, in the aggregate, less than
the number of equity securities which the Company has been advised can be sold
in such offering without having the adverse effect referred to above, such
number of other securities proposed to be sold by any Other Holder which, in the
opinion of such managing underwriter(s), can be sold without having the adverse
effect referred to above (provided that if the number of such securities of such
Other Holder requested to be registered exceeds the number which the Company has
been advised can be sold in such offering without having the adverse effect
referred to above, the number of such securities to be included in such
registration pursuant to this Section 4(d) shall be allocated pro rata among all
such Other Holders on the basis of the relative number of securities each such
Other Holder has requested to be included in such registration).
(f) ADDITIONAL RIGHTS. If the Company at any time grants to any other
holders of equity securities of the Company any rights to request the Company to
effect the registration of any such shares of equity securities on terms more
favorable to such holders than the terms set forth in this Section 4 and in
Section 5 hereof, the terms of this Section 4 and of Section 5 hereof shall be
deemed amended or supplemented to the extent necessary to provide the Holders
such more favorable rights and benefits. In no event shall the Company grant to
any person any rights to request the Company to effect the registration of any
shares of equity securities of the Company on terms which would have the effect
of delaying the effectiveness of or reducing the number of shares covered by any
registration statements effectuated pursuant to Section 2 and this Section 4.
5. REGISTRATION PROCEDURES.
(a) Whenever a Holder has requested that any Registrable Shares be
registered pursuant to Section 2(a) or 4(c) or at such time as the Company is
obligated to file and maintain the effectiveness of a registration statement
with the SEC pursuant to Section 4(a), the Company shall use its best efforts to
effect the registration of the Registrable Shares in accordance with the
intended method of disposition thereof and, pursuant thereto, the Company shall
have the following obligations:
-7-
<PAGE>
(i) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for the Registration Period and to comply with the
provisions of the Securities Act, the Exchange Act, and the rules and
regulations promulgated thereunder with respect to the disposition of
all the securities covered by such registration statement during such
period in accordance with the intended methods of disposition by the
Holders thereof set forth in such registration statement; PROVIDED,
HOWEVER, that (A) before filing a registration statement (including an
initial filing) or prospectus, or any amendments or supplements
thereto, the Company will furnish to one counsel (the "Holder Counsel")
selected by the Holders of a majority of the Registrable Shares covered
by such registration statement copies of all documents proposed to be
filed at least seven days prior to their filing with the SEC, which
documents will be subject to the review and comment of such counsel,
and (B) the Company will notify each Holder of Registrable Shares
covered by such registration statement of any stop order issued or
threatened by the SEC, any other order suspending the use of any
preliminary prospectus or of the suspension of the qualification of the
registration statement for offering or sale in any jurisdiction, and
take all reasonable actions required to prevent the entry of such stop
order, other order or suspension or to remove it if entered;
(ii) the Company shall furnish to the Holder Counsel, without
charge, any correspondence from the SEC or the staff of the SEC to the
Company or its representatives relating to any registration statement;
(iii) furnish without charge to each Holder and each
underwriter, if applicable, of Registrable Shares covered by such
registration statement such number of copies of the registration
statement and of each amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus
included in such registration statement (including each preliminary
prospectus and summary prospectus), in conformity with the requirements
of the Securities Act, and such other documents as each Holder of
Registrable Shares covered by such registration statement may
reasonably request in order to facilitate the disposition of the
Registrable Shares by such Holder;
(iv) use its best efforts to register or qualify such
Registrable Shares covered by such registration statement under the
state securities or blue sky laws of such jurisdictions as each Holder
of Registrable Shares covered by such registration statement and, if
applicable, each underwriter, may reasonably request, and do any and
all other acts and things which may be reasonably necessary to
consummate the disposition in such jurisdictions of the Registrable
Shares owned by such Holder, except that the Company shall not for any
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction where, but for the requirements of this
-8-
<PAGE>
clause (iv), it would not be obligated to be so qualified (the Company
shall promptly notify Holder Counsel and each Holder of the receipt by
the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Shares for sale
under the securities or "blue sky" laws of any jurisdiction in the
United States or its receipt of actual notice of the initiation or
threatening of any proceeding for such purpose);
(v) use its best efforts to cause such Registrable Shares
covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the Holders thereof to consummate the disposition
of such Registrable Shares;
(vi) if at any time an event shall have occurred as the result
of which any prospectus relating to any Registrable Shares as then in
effect would include an 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, immediately give written
notice thereof to each Holder and the managing underwriter or
underwriters, if any, of such Registrable Shares and prepare and
furnish to each such Holder a reasonable number of copies of an amended
or supplemental prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Shares, such prospectus
shall not include an untrue statement of material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading;
(vii) either (A) list any portion of such Registrable Shares
not already listed on any securities exchange on which similar
securities of the Company are then listed, and enter into customary
agreements including a listing application and indemnification
agreement in customary form, or (B) maintain the inclusion for
quotation on The Nasdaq SmallCap Market for the Registrable Shares and,
at such time as the Company is able to satisfy the listing requirements
on the Nasdaq National Market System and the Company's management
reasonably believes the Company will be able to continue to comply with
such requirements, use its best efforts to secure designation and
quotation of all the Registrable Shares on the Nasdaq National Market
System, and, without limiting the generality of the foregoing, use its
best efforts to arrange for at least two market makers to register with
the NASD as such with respect to the Registrable Shares, and provide a
transfer agent and registrar for such Registrable Shares covered by
such registration statement not later than the effective date of such
registration statement;
(viii) enter into such customary agreements (including an
underwriting agreement in customary form) and take such other actions
as each Holder of Registrable Shares being sold or the underwriter or
-9-
<PAGE>
underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Shares, including
customary indemnification and opinions;
(ix) use its best efforts to obtain a "cold comfort" letter or
letters from the Company's independent public accountants in customary
form and covering matters of the type customarily covered by "cold
comfort" letters as the Holders of the Registrable Shares being sold or
the underwriters retained by such Holders shall reasonably request,
provided that this provision shall only apply with respect to an
underwritten registration;
(x) make available for inspection by representatives of any
Holder, by any underwriter participating in any disposition to be
effected pursuant to such registration statement and by any attorney,
accountant or other agent retained by such Holders or any such
underwriter, all financial and other records pertinent corporate
documents and properties of the Company and its subsidiaries' officers,
directors and employees to supply all information and respond to all
inquiries reasonably requested by such Holders or any such
representative, underwriter, attorney, accountant or agent in
connection with such registration statement;
(xi) promptly prior to the filing of any document which is to
be incorporated by reference into the registration statement or the
prospectus (after initial filing of the registration statement), if
such document is not available to the public electronically via EDGAR,
provide copies of such document to counsel to the Holders and to the
managing underwriter(s), if any, and make the Company's representatives
available for discussion of such document;
(xii) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable after the effective
date of the registration statement, an earning statement which shall
satisfy the provisions of section 11(a) of the Securities Act and the
rules and regulations promulgated thereunder;
(xiii) not later than the effective date of the applicable
registration statement, use its best efforts to provide a CUSIP number
for any portion of such Registrable Shares not already included in a
CUSIP number for similar securities of the Company, and provide the
applicable transfer agents with printed certificates for the
Registrable Shares which are in a form eligible for deposit with the
Depository Trust Company;
(xiv) notify counsel for the Holders of Registrable Shares
included in such registration statement and the managing underwriter or
underwriters, if any, immediately and confirm the notice in writing,
(A) when the registration
-10-
<PAGE>
statement, or any post-effective amendment to the registration
statement, shall have become effective, or any supplement or amendment
to the prospectus shall have been filed, (B) of the receipt of any
comments from the SEC and (C) of any request of the SEC to amend the
registration statement or amend or supplement the prospectus or for
additional information;
(xv) in the event the Company and the Holders who hold at
least two-thirds of the Registrable Shares mutually agree to an
underwritten offering for one or more offerings of Registrable Shares
under Section 4(a) hereof, enter into and perform its obligations under
an underwriting agreement, in usual and customary form, including, but
not limited to, customary indemnification and contribution obligations,
with the underwriters (without limiting the generality of the
foregoing, if the underwriters for marketing or other reasons request
the inclusion in the registration statement of information which is not
required under the Securities Act to be included in a registration
statement on the applicable form for such registration, the Company
nonetheless will provide such information as may be reasonably
requested for inclusion by the underwriters in such registration
statement);
(xvi) use its best efforts to prevent the issuance of any stop
order or other suspension of effectiveness of a registration statement,
or the suspension of the qualification of any of the Registrable Shares
for sale in any jurisdiction and, if such an order or suspension is
used, use its best efforts to obtain the withdrawal of such order or
suspension at the earliest possible time;
(xvii) cooperate with each of the Holders and, to the extent
applicable, any managing underwriter or underwriters, to facilitate the
timely preparation and delivery of certificates (not bearing any
restrictive legend) representing the Registrable Shares offered and
sold pursuant to a registration statement and enable such certificates
to be in such denominations or amounts, as the case may be, as the
managing underwriter or underwriters, if any, or, if there is no
managing underwriter or underwriters, each of the Holders may
reasonably request and registered in such names as the managing
underwriter or underwriters, if any, or each of the Holders may
request;
(xviii) cooperate with each seller of Registrable Shares and
each underwriter, if any, participating in the disposition of such
Registrable Shares and their respective counsel in connection with any
filings required to be made with the NASD; and
(xix) take all other reasonable actions necessary or
reasonably requested by an Holder to expedite and facilitate
disposition by such Holder of Registrable Shares pursuant to a
registration statement.
-11-
<PAGE>
(b) Each Holder of Registrable Shares hereby agrees that, upon receipt
of any notice from the Company of the happening of any event of the type
described in Section 5(a)(vi) hereof, such Holder shall forthwith discontinue
disposition of such Registrable Shares covered by such registration statement or
related prospectus until such Holder's receipt of the copies of the supplemental
or amended prospectus contemplated by Section 5(a)(vi) hereof, and, if so
directed by the Company, such Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Shares at the
time of receipt of such notice.
(c) Each Holder hereby agrees to provide the Company, upon receipt of
its request, with such information about such Holder to enable the Company to
comply with the requirements of the Securities Act and to execute such
certificates as the Company may reasonably request in connection with such
information and otherwise to satisfy any requirements of law.
6. UNDERWRITTEN REGISTRATIONS. Notwithstanding anything in this
Agreement to the contrary, the Company in its sole discretion shall determine
whether a registration on Form S-3 pursuant to Section 4 hereof shall be by
means of an underwritten offering. In the case of any underwritten offerings
pursuant to Section 2 and Section 4 hereof, the managing underwriter(s) that
will administer the offering shall be selected by the Company; PROVIDED,
HOWEVER, that such managing underwriter(s) shall be reasonably satisfactory to
the Holders of a majority of the Registrable Shares to be registered.
7. EXPENSES.
(a) Subject to Section 7(b), the Company shall pay all fees, costs and
expenses of all registrations pursuant to Section 2 and Section 4 hereof,
including all SEC and stock exchange or NASD registration and filing fees and
expenses, reasonable fees and expenses of any "qualified independent
underwriter" and its counsel as may be required by the rules of the NASD, fees
and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel for the underwriters, if any, in
connection with blue sky qualifications of the Registrable Shares), rating
agency fees, printing expenses (including expenses of printing certificates for
Registrable Shares and prospectuses), messenger, telephone and delivery
expenses, the fees and expenses incurred in connection with the listing of the
securities to be registered on each securities exchange or national or other
market system on which similar securities issued by the Company are then listed,
fees and disbursements of counsel for the Company and all independent certified
public accountants (including the expenses of any annual audit, special audit
and "cold comfort" letters required by or incident to such performance and
compliance), the fees and disbursements of the underwriters customarily paid by
issuers or sellers of securities (including expenses relating to "road shows"
and other marketing activities), the reasonable fees and expenses of special
experts required to be retained by the Company in connection with such
registration, the reasonable fees and expenses of other Persons required to be
retained by the Company and the reasonable fees and expenses, not to exceed
$10,000 per registration statement, of one counsel for the Holders
(collectively, "Registration Expenses");
-12-
<PAGE>
(b) The Holders shall pay the following: (i) any underwriting or
selling discounts or commissions or transfer taxes, if any, attributable to the
sale of Registrable Shares by the Holders pursuant to this Agreement, and (ii)
except as set forth in subsection 7(a) above, all fees, costs and expenses of
counsel to the Holders pursuant to this Agreement in connection with any
registration pursuant to this Agreement.
8. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. In the event of any registration of
any securities of the Company under the Securities Act pursuant to Section 2 or
4 hereof, the Company will, and it hereby does, indemnify and hold harmless, to
the fullest extent permitted by law, each of the Holders of any Registrable
Shares covered by such registration statement, each Affiliate of such Holder
(other than the Company) and their respective partners, members, Affiliates,
directors and officers, each other Person who participates as an underwriter in
the offering or sale of such securities and each other Person, if any, who
controls such Holder or any such underwriter within the meaning of the
Securities Act (collectively, the "Indemnified Parties"), against any and all
losses, claims, damages or liabilities, joint or several, and expenses
(including any amounts paid in any settlement effected with the Company's
consent, which consent shall not be unreasonably withheld or delayed) to which
any Indemnified Party may become subject under the Securities Act, state
securities or blue sky laws, common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof,
whether or not such Indemnified Party is a party thereto) or expenses arise out
of or are based upon any of the following (each, a "Violation") (i) any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under the
Securities Act, any preliminary, final or summary prospectus contained therein,
or any amendment or supplement thereof, (ii) any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading or (iii) any violation by the Company of
any federal, state or common law rule or regulation applicable to the Company
and relating to action required of or inaction by the Company in connection with
any such registration, and the Company will promptly reimburse such Indemnified
Party for any legal or any other expenses reasonably incurred by it in
connection with investigating or defending any such loss, claim, liability,
action or proceeding; PROVIDED, HOWEVER, that the Company shall not be liable to
any Indemnified Party in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement or amendment or
supplement thereof or in any such preliminary, final or summary prospectus in
reliance upon and in conformity with written information with respect to such
Holder furnished to the Company by such Holder specifically for use in the
preparation thereof. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Holder or any
Indemnified Party and shall survive the transfer of such securities by such
Holder.
(b) INDEMNIFICATION BY THE HOLDERS AND THE UNDERWRITERS. In the event
of any registration of any securities of the Company under the Securities Act
pursuant to Section 2
-13-
<PAGE>
or 4 hereof, each Holder of Registerable Shares included in the Securities as to
which such registration is being effected will, and it hereby does, indemnify
and hold harmless, to the fullest extent permitted by law, the Company, each
Affiliate of the Company, each of its directors, each of its officers who has
signed the registration statement, each Person, if any, who controls the Company
within the meaning of the Securities Act, any underwriter, any other Holder
selling securities under such registration statement and any controlling person
of any such underwriter or other Holder (collectively, the "Company Indemnified
Parties"), against any and all losses, claims, damages or liabilities, joint or
several, and expenses (including amounts paid in any settlement effected with
the Holder's prior written consent, which consent shall not be unreasonably
withheld or delayed) to which any Company Indemnified Party may become subject
under the Securities Act, state securities or blue sky laws, common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof, whether or not such Company Indemnified Party is
a party thereto) or expenses arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs due
to the Company's reliance upon and in conformity with written information
furnished by such Holder to the Company under an instrument duly executed by
such Holder and stated to be specifically for use in connection with such
registration statement, preliminary, final or summary prospectus or amendment or
supplement thereto; and each such Holder will promptly reimburse such Company
Indemnified Party for any legal or any other expenses reasonably incurred by it
in connection with investigation or defending any such loss, claim, liability,
action or proceeding if it is judicially determined that there was such a
Violation; PROVIDED, HOWEVER, that each such Holder shall be severally, and not
jointly, liable under any such indemnification; PROVIDED, FURTHER, that no such
Holder shall be liable in any event for any indemnity claims in excess of the
amount of the net proceeds received by such Holder from the sale of its
Registrable Shares. The Company may further require, in connection with any
underwritten registration effectuated in accordance with Section 2 or 4 hereof,
that the Company shall have received an undertaking reasonably satisfactory to
it from the underwriter to indemnify and hold harmless (in the same manner and
to the same extent as set forth in this Section 8(b)) the Company with respect
to any statement or alleged statement in or omission or alleged omission from
such registration statement, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information such underwriter furnished to the Company
specifically for use in the preparation of such registration statement,
preliminary, final or summary prospectus or amendment or supplement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any of the Holders, or any of their
respective Affiliates (other than the Company), directors, officers or
controlling Persons, and shall survive the transfer of such securities by such
Holder.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified
party hereunder of written notice of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 8, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action; PROVIDED,
-14-
<PAGE>
HOWEVER, that the failure of the indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under this
Section 8, except to the extent that the indemnifying party is actually
materially prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, the indemnifying party will be entitled to
participate in and to assume the defense thereof, with counsel satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation; PROVIDED, HOWEVER,
that the indemnified party shall have the right, at the sole cost and expense of
the indemnifying party, to employ counsel to represent the indemnified party and
its respective controlling persons, directors, officers, employees or agents who
may be subject to liability arising out of any claim in respect of which
indemnity may be sought by the indemnified party against such indemnifying party
under this Section 8 if (i) the employment of such counsel shall have been
authorized in writing by such indemnifying party in connection with the defense
of such action, (ii) the indemnifying party shall not have promptly employed
counsel reasonably satisfactory to the indemnified party to assume the defense
of such action or counsel, or (iii) any indemnified party shall have reasonably
concluded that there may be defenses available to such indemnified party or its
respective controlling persons, directors, officers, employees or agents which
are in conflict with or in addition to those available to an indemnifying party;
PROVIDED, FURTHER, that the indemnifying party shall not be obligated to pay for
more than the expenses of one firm of separate counsel for the indemnified
party. No indemnifying party will consent to entry of any judgment or enter into
any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to any indemnified party under Section 8(a) or 8(b) hereof
or is insufficient to hold it harmless in respect of any loss, claim, damage or
liability, or any action in respect of any loss, claim, damage or liability, or
any action in respect thereof referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative benefits
received by the indemnified party and indemnifying party or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the indemnified party
and indemnifying party with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. Notwithstanding any
other provision of this Section 8(d), no Holder of Registrable Shares shall be
required to contribute an amount greater than the dollar amount of the net
proceeds received by such Holder with respect to the sale of any such
Registrable Shares. No person guilty of fraudulent misrepresentation (within the
meaning of section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
-15-
<PAGE>
(e) OTHER INDEMNIFICATION. Indemnification similar to that specified in
the preceding subdivisions of this Section 8 (with appropriate modifications but
subject to the same provisos set forth in Section 8(b) above) shall be given by
the Company and each Holder of Registrable Shares with respect to any required
registration or other qualification of securities under any federal or state law
or regulation other than the Securities Act.
(f) NON-EXCLUSIVITY. The obligations of the parties under this Section
8 shall be in addition to any liability which any party may otherwise have to
any other party.
9. RULE 144. With a view to making available to the Holders the
benefits of Rule 144 promulgated under the Securities Act or any other similar
rule or regulation of the SEC that may at any time permit the Holders to sell
securities of the Company to the public without registration ("Rule 144"), the
Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Exchange Act, so long as
the Company remains subject to such requirements and the filing of such
reports and other documents is required for the applicable provisions
of Rule 144; and
(c) furnish to each Holder so long as such Holder owns
Registrable Shares, promptly upon request, (i) a written statement by
the company that it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the
most recent annual or quarterly report of the Company and such other
reports and documents so filed by the company, and (iii) such other
information as may be reasonably requested to permit the Holders to
sell such securities pursuant to Rule 144 without registration.
10. ASSIGNABILITY. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and the Holders and their respective
successors and permitted assigns. Except as provided herein, no party may assign
any of its rights or delegate any of its duties under this Agreement without the
express consent of the other parties hereto. In addition, and whether or not any
express assignment shall have been made, the provisions of this Agreement which
are for the benefit of the Holders shall also be for the benefit of and
enforceable by any subsequent Holder, subject to the provisions contained
herein. Any Holder may assign any of its rights or delegate any of its duties
under this Agreement, in whole or in part, without any prior consent of the
Company only to a Person (a "Designated Transferee") who is (a) an Affiliate,
member or partner of a Holder, (b) a family member of or a trust for the benefit
of an individual Holder, or (c) a transferee of at least 250,000 Registrable
Shares (whether through purchase, share exchange, bequest or otherwise) and who
agrees to be bound by the terms of this Agreement. Any purported assignment in
violation of this Section 10 shall be void.
-16-
<PAGE>
11. RIGHT OF FIRST REFUSAL. The Company hereby grants to each Holder
the right of first refusal to purchase a pro rata share of New Securities (as
defined in this Section 12) which the Company may, from time to time, propose to
sell and issue. A Holder's pro rata share, for purposes of this right of first
refusal, is the ratio of the number of shares of Common Stock owned by such
Holder immediately prior to the issuance of New Securities, to the total number
of shares of Common Stock outstanding immediately prior to the issuance of New
Securities. Each Holder shall have a right of over-allotment such that if any
Holder fails to exercise its right hereunder to purchase its pro rata share of
New Securities, the Company shall provide each Holder with prompt written notice
of this event and the other Holders may purchase the non-purchasing Holder's
portion on a pro rata basis within ten (10) days from the date of such notice.
This right of first refusal shall be subject to the following provisions:
(a) "New Securities" shall mean any capital stock (including Common
Stock and/or Preferred Stock) of the Company whether now authorized or not, and
rights, options or warrants to purchase such capital stock, and securities of
any type whatsoever that are, or may become, convertible into capital stock;
provided that the term "New Securities" does not include (i) securities issued
upon conversion of the warrants issued to CA on the date hereof; (ii) securities
issued to investors and securities issuable upon exercise of the warrants issued
to such investors in a private placement of the Company's Common Stock in an
aggregate offering amount of up to $2.5 million that will close as of the date
hereof, (iii) securities issued pursuant to the acquisition of another business
entity or business segment of any such entity by the Company by merger, purchase
of substantially all the assets or other reorganization whereby the Company will
own more than fifty percent (50%) of the voting power of such business entity or
business segment of any such entity; (iv) any borrowings, direct or indirect,
from financial institutions or other persons by the Company, whether or not
presently authorized, including any type of loan or payment evidenced by any
type of debt instrument, provided such borrowings do not have any equity
features including warrants, options or other rights to purchase capital stock
and are not convertible into capital stock of the Company; (v) securities issued
to employees, consultants, officers or directors of the Company pursuant to any
stock option, stock purchase or stock bonus plan, agreement or arrangement
existing on the date hereof or hereafter approved by the unanimous vote of the
Board of Directors or Compensation Committee; (vi) securities issued in
connection with obtaining bona fide lease financing, whether issued to a lessor
or guarantor; (vii) securities issued in a public offering of Common Stock of
the Company pursuant to a firm-commitment underwritten registration under the
Securities Act with an aggregate offering price to the public of at least
$10,000,000 and in which no single purchaser or group of affiliated purchasers
acquire in such offering greater than ten percent (10%) of the shares sold in
the offering or three (3%) of then outstanding equity securities of the Company;
and (viii) securities issued in connection with any stock split, stock dividend
or recapitalization of the Company.
(b) In the event the Company proposes to undertake an issuance of New
Securities, it shall give each Holder written notice of its intention,
describing the type of New Securities, and their price and the general terms
upon which the Company proposes to issue the same. Each Holder shall have
fifteen (15) days after any such notice is mailed or
-17-
<PAGE>
delivered to agree to purchase up to such Holder's pro rata share of such New
Securities for the price and upon the terms specified in the notice by giving
written notice to the Company and stating therein the quantity of New Securities
to be purchased.
(c) In the event the Holders fail to exercise fully the right of first
refusal within such fifteen (15) day period and after the expiration of the
ten-day (10) period for the exercise of the over-allotment provisions of this
Section 12, the Company shall have sixty (60) days thereafter to sell or enter
into an agreement (pursuant to which the sale of New Securities covered thereby
shall be closed, if at all, within ninety (90) days to sell the New Securities
respecting which the Holders' right of first refusal option set forth in this
Section 12 was not exercised, at a price and upon terms no more favorable to the
purchasers thereof than specified in the Company's notice to Holders pursuant to
Section 12(b). In the event the Company has not sold within such 90-day period
or entered into an agreement to sell the New Securities in accordance with the
foregoing within sixty (60) days from the date of such agreement, the Company
shall not thereafter issue or sell any New Securities, without first again
offering such securities to the Holders in the manner provided in Section 12(b)
above.
(d) The right of first refusal granted under this Agreement shall
expire on the earlier to occur of (i) two (2) years from the date of this
Agreement or (ii) the date the Holders as a group hold less than 15% of the
issued and outstanding capital stock of the Company.
12. NOTICES. Any and all notices, designations, consents, offers,
acceptances or any other communications shall be given in writing by either (a)
personal delivery to and receipted for by the addressee or by (b) telecopy or
registered or certified mail which shall be addressed, in the case of the
Company, to: Centura Software Corporation, 975 Island Drive, Redwood Shores,
California 94065, attention: Chief Financial Officer; in the case of Holders, to
the address or addresses thereof appearing on the books of the Company or of the
transfer agent and registrar for its Common Stock. All such notices and
communications shall be deemed to have been duly given and effective: when
delivered by hand, if personally delivered; two (2) business days after being
deposited in the mail, postage prepaid, if mailed; and when receipt is
acknowledged, if telecopied.
13. NO INCONSISTENT AGREEMENTS. The Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent with the
rights granted to the Holders in this Agreement.
14. SPECIFIC PERFORMANCE. The Company acknowledges that the rights
granted to the Holders in this Agreement are of a special, unique and
extraordinary character, and that any breach of this Agreement by the Company
could not be compensated for by damages. Accordingly, if the Company breaches
its obligations under this Agreement, the Holders shall be entitled, in addition
to any other remedies that they may have, to enforcement of this Agreement by a
decree of specific performance requiring the Company to fulfill its obligations
under this Agreement.
-18-
<PAGE>
15. SEVERABILITY. If any provision of this Agreement or any portion
thereof is finally determined by a court of competent jurisdiction to be
unlawful or unenforceable, such provision or portion thereof shall in no way
affect any other provision of this Agreement, the application of any such
provision and any other circumstances, and any portion of such invalidated
provision that is not invalidated by such a determination shall remain in full
force and effect.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which,
together, shall constitute one and the same instrument.
17. DEFAULTS. A default by any party to this Agreement in such party's
compliance with any of the conditions or covenants hereof or performance of any
of the obligations of such party hereunder shall not constitute a default by any
other party.
18. AMENDMENTS, WAIVERS. This Agreement may not be amended, modified or
supplemented and no waivers of or consents to or departures from the provisions
hereof may be given unless consented to in writing by the Company and the
holders of two-thirds of the Registrable Shares; PROVIDED, HOWEVER, that no such
amendment, supplement, modification or waiver shall deprive any Holder of any
rights under Section 2 or 4 hereof without the consent of such Holder.
19. CONSTRUCTION. The captions contained in this Agreement are for
reference purposes only and shall not constitute a part of this Agreement.
Unless the context requires otherwise, the use of the masculine shall include
the feminine, and the use of the singular shall include the plural. The word
"including" shall mean "including, but not limited to." The language used in
this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent and no rules of strict construction will be applied
against any party.
20. ATTORNEYS' FEES. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the successful party shall be entitled to recover reasonable
attorneys' fees in addition to any other available remedy.
21. ADDITIONAL ACTIONS. Each party (including transferees and assigns
thereof) shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.
22. ENTIRE AGREEMENT. This Agreement, together with the Note Purchase
Agreement and Exchange Agreement, contains the entire agreement among the
parties hereto with respect to the transaction contemplated herein and
understandings among the parties relating to the subject matter hereof. Any and
all previous agreements and understandings between
-19-
<PAGE>
or among the parties hereto regarding the subject matter hereof are, whether
written or oral, superseded by this Agreement.
23. GOVERNING LAW. This Agreement is made pursuant to and shall be
construed in accordance with the laws of the State of California without regard
to that state's conflicts of laws principles.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date first written
above.
NEWPORT ACQUISITION COMPANY NO. 2
LLC
By Crossroads Capital Partners, LLC, as managing
Member
By /S/JAMES A. SKELTON
----------------------------------------------
Name JAMES A. SKELTON
--------------------------------------------
Title PRINCIPAL
-------------------------------------------
CENTURA SOFTWARE CORPORATION
By /S/JOHN BOWMAN
---------------------------------------------
Name JOHN BOWMAN
-------------------------------------------
Title CHIEF FINANCIAL OFFICER
------------------------------------------
-20-
EXHIBIT 99.3
AGREEMENT TO JOINTLY FILE SCHEDULE 13D
Each of the undersigned parties hereby agree, effective March 6, 1998,
to cause to be jointly filed on their behalf a Schedule 13D with the Securities
and Exchange Commission, the Nasdaq Small Cap Market, and Centura Software
Corporation ("Centura") in connection with the acquisition by Newport
Acquisition Company No. 2 LLC of 11,415,094 shares of Centura common stock on
February 27, 1998.
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be executed as of the date first referenced above.
NEWPORT ACQUISITION COMPANY NO. 2 LLC
By: Crossroads Capital Partners,
LLC, as Managing Member
By /s/Dennis I. Simon
--------------------------------------------
Dennis I. Simon
Managing Member
CROSSROADS CAPITAL PARTNERS, LLC
By /s/Dennis I. Simon
--------------------------------------------
Dennis I. Simon
Managing Member
RUBIN PACHULSKI DEW PROPERTIES, LLC
By /s/Scott Dew
--------------------------------------------
Scott Dew
Managing Member
