WARRANT PURCHASE AGREEMENT
FEBRUARY 27, 1998
TABLE OF CONTENTS
Page
1. Purchase and Sale of the Warrant. . . . . . . . . . . . . . . . . . . . . . 1
1.1 Deliver into Escrow . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Closing; Delivery.. . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Representations and Warranties of the Company . . . . . . . . . . . . . . . 2
2.1 Organization, Good Standing and Qualification . . . . . . . . . . . . 2
2.2 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.5 Compliance with Other Instruments . . . . . . . . . . . . . . . . . . 3
2.6 SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Representations and Warranties of CA . . . . . . . . . . . . . . . . . . . . . 4
3.1 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Purchase Entirely for Own Account . . . . . . . . . . . . . . . . . . 4
3.3 Accredited Investor . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.4 Restricted Securities . . . . . . . . . . . . . . . . . . . . . . . . 4
3.5 Further Limitations on Disposition. . . . . . . . . . . . . . . . . . 5
3.6 Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.7 Disclosure of Information . . . . . . . . . . . . . . . . . . . . . . 5
4. Registration of Securities. . . . . . . . . . . . . . . . . . . . . . . . . 6
5. Resale Restrictions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6. Release of Claims.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.1. Release of Claims in Connection With the Note.. . . . . . . . . . . . . .10
6.2. Civil Code Section 1542.. . . . . . . . . . . . . . . . . . . . . . . . .10
7. Conditions of CA's Obligations at the Closing . . . . . . . . . . . . . . .10
7.1 Representations and Warranties. . . . . . . . . . . . . . . . . . . .10
7.2 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
7.3 Compliance Certificates . . . . . . . . . . . . . . . . . . . . . . .11
7.4 Qualifications. . . . . . . . . . . . . . . . . . . . . . . . . . . .11
7.5 Escrow Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . .11
7.6 Delivery into Escrow. . . . . . . . . . . . . . . . . . . . . . . . .11
8. Conditions of the Company's Obligations at the Closing. . . . . . . . . . .11
8.1 Representations and Warranties. . . . . . . . . . . . . . . . . . . .11
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TABLE OF CONTENTS
(continued)
Page
8.2 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
8.3 Qualifications. . . . . . . . . . . . . . . . . . . . . . . . . . . .11
8.4 Escrow Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . .12
8.5 Delivery into Escrow. . . . . . . . . . . . . . . . . . . . . . . . .12
8.6 Note Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . .12
9. Miscellaneous.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
9.1 Survival of Warranties. . . . . . . . . . . . . . . . . . . . . . . .12
9.2 Transfer; Successors and Assigns. . . . . . . . . . . . . . . . . . .12
9.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
9.4 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
9.5 Titles and Subtitles. . . . . . . . . . . . . . . . . . . . . . . . .12
9.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
9.7 Company Advisor / Payment of Fees . . . . . . . . . . . . . . . . . .13
9.8 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . .13
9.9 Attorney's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . .13
9.10 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . .13
9.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
9.12 Delays or Omissions. . . . . . . . . . . . . . . . . . . . . . . . .14
9.13 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . .14
9.14 Corporate Securities Law . . . . . . . . . . . . . . . . . . . . . .14
9.15 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . .14
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WARRANT PURCHASE AGREEMENT
This Warrant Purchase Agreement (the "AGREEMENT") is made as of the 27th
day of February 1998 by and between Computer Associates International, Inc., a
Delaware corporation ("CA" or "HOLDER"), and Centura Software Corporation, a
California corporation (the "COMPANY"). Hereinafter, CA and the Company may
also be referred to collectively as the "Parties" and each may be referred to as
a "Party."
Recitals
Whereas, the Company and 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 (the
"NOTE");
Whereas, CA has entered into a Note Purchase and Sale Agreement to sell
the Note;
Whereas, the Company has agreed to issue and sell to CA and CA has
agreed to purchase at a purchase price of $0.001 per share a warrant to
purchase 500,000 shares of the Company's Common Stock (the "WARRANT") at an
exercise price of $1.906 per share; and
Whereas, as additional consideration for issuance of the Warrant by the
Company CA has agreed to release the Company from any and all claims it may
have against the Company as a result of: (i) the alleged breach by the
Company of any representations, warranties, or covenants it made to CA
pursuant to the Prior Agreement and (ii) any subsequent loss incurred by CA
in connection with CA's sale of the Note pursuant to the Note Purchase
Agreement.
Now, therefore, for good and valuable consideration, the parties hereby
agree as follows:
1. PURCHASE AND SALE OF THE WARRANT.
1.1 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 A (the "ESCROW AGREEMENT"), the following:
(a) CA shall deliver $500 in cash or by check or by wire
transfer for purchase of the Warrant; and
(b) The Company shall deliver the fully executed Warrant in
the form attached hereto as EXHIBIT B.
1.2 CLOSING; DELIVERY.
(a) The purchase and sale of the Warrant pursuant to the
terms of this Agreement shall take place at the offices of Venture Law Group,
0000 Xxxx Xxxx Xxxx, Xxxxx Xxxx, Xxxxxxxxxx, at 2:00 p.m., on February __,
1998, or at such other time and place as the Parties mutually agree upon,
orally or in writing (which time and place are designated as the "Closing").
(b) At the Closing, in consideration for the release of
claims contained herein and the payment of $500 by CA, the Company shall
instruct the Escrow Agent to deliver to CA the Warrant, and in consideration
for the Warrant, CA shall have delivered to the Company an executed copy of
this Agreement, including the release of claims contained herein, and shall
instruct the Escrow Agent to deliver to the Company $500.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to CA that, except as set forth on a Schedule of
Exceptions attached hereto as Exhibit C, which exceptions shall be deemed to
be representations and warranties as if made hereunder:
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) 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
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advisors of the Company, prior to inclusion of the shares of Common Stock
issuable upon exercise of the Warrant being purchased and sold hereunder.
The Warrant, when issued and paid for in accordance with this Agreement, and
the shares of Common Stock issuable upon exercise thereof, when issued and
paid for in accordance with the Warrant, 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 liens or encumbrances other than
liens or encumbrances created by or imposed upon the holders thereof;
provided, however, that the Warrant (and the shares of Common Stock issuable
upon exercise thereof) may be subject to restrictions on transfer as set
forth in this Agreement, the Warrant, the Registration Statement on Form S-3
to be filed with the Securities and Exchange Commission pursuant to Section 4
hereunder, (the "RIGHTS AGREEMENT"), or the Articles of Incorporation or
Bylaws of the Company.
2.3 AUTHORIZATION. The execution, delivery and performance by the
Company of this Agreement, the Escrow Agreement, the Warrant and the Rights
Agreement (collectively, 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 Escrow
Agreement, the Warrant and 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 LITIGATION. There is no action, suit, proceeding or
investigation pending or, to the Company's knowledge, currently threatened
against the Company or any of its subsidiaries that is not disclosed in the
Reports and that would have a material adverse effect on the Company 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.
2.5 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 Xxxxx its Annual Report on Form 10-K
for the year ended
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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 CA through Xxxxx 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 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 CA prior to the date
hereof.
3. REPRESENTATIONS AND WARRANTIES OF CA. CA hereby represents and
warrants to the Company that:
3.1 AUTHORIZATION. The execution, delivery and performance by CA
of the Transaction Agreements are within CA's corporate power and have been
duly authorized by all requisite action by CA. The Transaction Agreements
have been duly executed and delivered by CA and this Agreement constitutes,
and the Escrow Agreement, the Warrant and the Rights Agreement when executed
and delivered in accordance with this Agreement, will constitute the valid
and binding obligation of the CA, 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. CA is acquiring the
Warrant (and the shares of Common Stock issuable upon exercise thereof (the
"WARRANT STOCK", together with the Warrant, the "Securities")) hereunder for
investment for CA's own account, and not as a nominee or agent, and not with
a view to the resale or distribution of any part thereof. CA has no present
intention of selling, granting any participation in, or otherwise
distributing the foregoing.
3.3 ACCREDITED INVESTOR. CA is an accredited investor as defined
in Rule 501(a) of Regulation D promulgated under the Securities Act.
3.4 RESTRICTED SECURITIES. CA understands that the Warrant and
the Warrant Stock 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 Warrant and the Warrant Stock may be resold
without registration under the Securities Act of 1933, as amended (the
"ACT"), only in certain limited circumstances. In this connection, CA
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. Without in any way
limiting the representations set forth above, CA further agrees not to make
any disposition of all or any portion of the Warrant and the Warrant Stock
unless and until:
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(a) There is then in effect a Registration Statement under
the Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or
(b) (i) The transferee has agreed in writing for the benefit
of the Company to be bound by this Section 3; (ii) CA 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, and
(iii) if reasonably requested by the Company, CA shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company,
that such disposition will not require registration under the Act.
3.6 LEGENDs. CA understands that the Warrant and the Warrant
Stock, and any securities issued in respect thereof or exchange therefor, may
bear one or all of the following legends:
(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 referring to the Company's Shareholder Rights
Plan.
3.7 DISCLOSURE OF INFORMATION. CA has had an opportunity to
discuss the Company's business, management, financial affairs and the terms
and conditions of the offering of the Warrant and the Warrant Stock with the
Company's management and has had an opportunity to review the Company's
Reports. CA 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.
4. REGISTRATION OF SECURITIES.
(a) As soon as reasonably practicable after the Closing, but in no
event later than 60 days after the Closing, the Company shall use its
reasonable efforts to prepare and file a registration statement on Form S-3
(the "REGISTRATION STATEMENT") with the Commission under the Act to register
the resale of the Common Stock issuable upon exercise of the Warrant
("REGISTRABLE SECURITIES") and thereafter shall use its best efforts to
secure the effectiveness of such Registration Statement as soon as possible
and to maintain its effectiveness thereafter.
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(b) The Company shall pay all Registration Expenses (as defined
below) in connection with any registration, qualification or compliance
hereunder, and CA or any transferee of the Registrable Securities (each, a
"HOLDER") shall pay all Selling Expenses (as defined below) and other
expenses that are not Registration Expenses relating to the Registrable
Securities resold by Holder. "Registration Expenses" shall mean all expenses,
except for Selling Expenses, incurred by the Company in complying with the
registration provisions herein described, including, without limitation, all
registration, qualification and filing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to or required by any such
registration. "Selling Expenses" shall mean all selling commissions,
brokerage or underwriting fees and stock transfer taxes applicable to the
Registrable Securities and all fees and disbursements of counsel for Holder.
(c) In the case of any registration effected by the Company
pursuant to these registration provisions, and subject to the limitations on
registration set forth in Section 4(d) below, the Company will use
commercially reasonable efforts to: (i) keep such registration effective
until the earlier of (A) one (1) year after the date of the Closing or (B)
such date as the Company shall be satisfied that then-current Holders may
sell all of their Registrable Securities then outstanding within a three (3)
month period; (ii) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in
connection with such Registration Statement as may be necessary to comply
with the provisions of the Act with respect to the disposition of all
securities covered by such Registration Statement; (iii) furnish such number
of prospectuses and other documents incident thereto, including any amendment
of or supplement to the prospectus, as a Holder from time to time may
reasonably request; (iv) register and qualify the securities covered by such
Registration Statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holders, provided that
the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions; (v) cause all such Registrable
Securities registered as described herein to be listed on each securities
exchange and quoted on each quotation service on which similar securities
issued by the Company are then listed or quoted; and (vi) otherwise use
commercially reasonable efforts to comply with all applicable rules and
regulations of the Commission.
(d) The Company may, by written notice to Holder, delay the filing
or effectiveness of, or suspend, the Registration Statement, and require that
Holder immediately cease sales of shares pursuant to such Registration
Statement in any period during which the Company is engaged in any activity
or transaction or preparations or negotiations for any activity or
transaction ("COMPANY ACTIVITY") that the Company desires to keep
confidential for business reasons, if the Company determines in good faith
that the public disclosure requirements imposed on the Company under the Act
in connection with the Registration Statement would require disclosure of the
Company Activity; provided, however, that (A) the Company shall use
commercially reasonable efforts to minimize the length of any such period of
delay or suspension, and (B) any such delay or suspension shall be applied in
the same manner to any other resale registration statement then in effect.
If the Company delays or suspends the
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Registration Statement or requires Holder to cease sales of shares pursuant
to this Section 4(d), the Company shall, as promptly as practicable following
the termination of the circumstance which entitled the Company to do so, take
such actions as may be necessary to file or reinstate the effectiveness of
the Registration Statement and/or give written notice to Holder authorizing
it to resume sales pursuant to such Registration Statement. If as a result
thereof the prospectus included in the Registration Statement has been
amended to comply with the requirements of the Act, the Company shall enclose
such revised prospectus with the notice to Holders given pursuant to this
Section 4(d), and Holder shall make no offers or sales of shares pursuant to
the Registration Statement other than by means of such revised prospectus.
(e) If Holder shall propose to sell any Registrable Securities
pursuant to the Registration Statement, it shall notify the Company of any
such sale within one business day after such sale and the provision of such
notice to the Company shall conclusively be deemed to establish an agreement
by Holder to comply with the registration provisions herein described. Such
notice shall be deemed to constitute a representation that any information
required to be included in the Registration Statement and previously supplied
by Holder is accurate as of the date of such notice. When Holder is entitled
to sell and gives notice of its intent to sell in compliance with the
foregoing, the Company shall promptly, furnish to Holder a reasonable number
of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the Holders of such shares,
such prospectus shall not include an 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 not misleading or incomplete in the light of the
circumstances then existing. Holder agrees that the Company may impose a
legend setting forth the provisions of this Section 4(e) on the Registrable
Securities.
(f) With a view to making available to the holders the benefits of
Rule 144 promulgated under the Act and any other rule or regulation of the
Commission that may at any time permit Holder to sell Registrable Securities
to the public without registration or pursuant to a registration on Form S-3,
the Company hereby covenants and agrees to: (i) make and keep public
information available, as those terms are understood and defined in Rule 144,
at all times after the closing; and (ii) file with the Commission in a timely
manner all reports and other documents required of the Company under the Act
and Exchange Act.
(g) Indemnification.
(i) To the extent permitted by law, the Company will
indemnify and hold harmless Holder, any underwriter (as defined in the Act)
for Holder, its officers, directors, shareholders or partners and each
person, if any, who controls Holder or underwriter within the meaning of the
Act or the Exchange Act, against any losses, claims, damages, or liabilities
to which they may become subject under the Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively a "VIOLATION"):
(A) any untrue statement or alleged untrue statement of a material fact
contained in such Registration Statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto or (B) the omission
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or alleged omission to state therein a material fact required to be stated
therein, or necessary to make the statements therein not misleading; and the
Company will pay to each such Holder, underwriter or controlling person, as
incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement
contained in this Section 4(g)(i) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any
such case for any such loss, claim, damage, liability, or action to the
extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by any such Holder, underwriter
or controlling person; further provided, however, that the foregoing
indemnity with respect to any untrue statement in or omission from any
preliminary prospectus shall not inure to the benefit of any Holder from whom
the person asserting any such losses, claims, damages or liabilities
purchased the Registrable Securities if a copy of the final prospectus or any
amendment thereto had not been sent or given to such person at or prior to
the written confirmation of the sale of such Registrable Securities to such
person if required by the Act and the untrue statement or omission of a
material fact contained in such preliminary prospectus was corrected in the
final prospectus or amendment and such final prospectus or amendment was
distributed to the Holder prior to such sale of Registrable Securities.
(ii) To the extent permitted by law, each selling Holder
will indemnify and hold harmless 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 Act, any underwriter, any
other Holder selling securities in such Registration Statement and any
controlling person of any such underwriter or other Holder, against any
losses, claims, damages, or liabilities to which any of the foregoing persons
may become subject, under the Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case
to the extent (and only to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished by such Holder
expressly for use in connection with such registration; and each such Holder
will pay, as incurred, any legal or other expenses reasonably incurred by any
person intended to be indemnified pursuant to this subsection 4(g)(ii), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement
contained in this subsection 4(g)(ii) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided, that, in no event shall any indemnity
under this subsection 4(g)(ii) exceed the net proceeds from the offering
received by such Holder, except in the case of willful fraud by such Holder.
(iii) Promptly after receipt by an indemnified party
under this Section 4(g) of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim
in respect thereof is to be made against any indemnifying party under this
Section 4(g), deliver to the indemnifying party a written notice of the
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commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided, however,
that an indemnified party (together with all other indemnified parties which
may be represented without conflict by one counsel) shall have the right to
retain one separate counsel, with the reasonable fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and
any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time
of the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 4(g).
5. RESALE RESTRICTIONS. Holder agrees that it will not sell any
Registrable Securities issued hereunder until 90 calendar days after the
Closing and the earlier to occur of; (i) effectiveness of the Registration
Statement to be filed pursuant to Section 4 above; and (ii) the first
anniversary of the issuance of the Warrant. Holder further agrees that,
notwithstanding anything in this Agreement to the contrary, the maximum
number of Registrable Securities which may be sold by Holder in open market
transactions on any day (including sales pursuant to Rule 144 under the Act)
shall not exceed twenty-five percent (25%) of the average daily trading
volume of the Company's Common Stock as calculated over the immediately
preceding twenty (20) consecutive trading days. Notwithstanding the
foregoing, the Company may suspend resales by the Holder pursuant to a
Registration Statement if an underwriter reasonably determines that such
resales would adversely affect the Company's ability to raise additional
capital in a secondary offering of the Company's equity securities and such
underwriter issues a written opinion to the Company to that effect. Any such
suspension of resales by the Holder pursuant to the foregoing sentence will
not exceed 120 calendar days commencing on the date of the secondary
offering. The volume and resale restrictions set forth in this Section 5
shall be set forth in any and all Registration Statements brought effective
pursuant to Section 4 above, and the Company shall instruct its transfer
agent, broker dealers and market makers to enforce the volume restrictions
set forth herein.
6. RELEASE OF CLAIMS.
6.1 RELEASE OF CLAIMS IN CONNECTION WITH THE NOTE. In
consideration for the obligations of the Company set forth in this Agreement,
CA, on behalf of itself, and its respective officers, directors, employees,
shareholders, attorneys, accountants, predecessor and successor corporations,
affiliates, subsidiaries, representatives, transferees and assigns, hereby
fully and forever releases the Company and its respective officers,
directors, employees, shareholders, attorneys, accountants, predecessor and
successor corporations, affiliates, subsidiaries, representatives,
transferees and assigns from any claim, duty, obligation or cause of action
relating to any matters of any kind, whether known or unknown, suspected or
unsuspected, that it may possess arising from any omissions, acts or facts
that have occurred up until and including the date of the Closing of this
Agreement including, without limitation:
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(a) any and all claims in connection with the Company's
representations, warranties and covenants under the Note Purchase Agreement;
(b) any and all claims relating to or arising from CA's purchase
of the Note from the Company and subsequent sale of the Note at a loss; and
(c) any and all claims for attorney's fees and costs.
The Company and CA agree that the release set forth in this section shall be
and remain in effect in all respects as a complete and general release as to
the matters released. This release does not extend to any obligations
incurred under this Agreement.
6.2. CIVIL CODE SECTION 1542. The parties represent that they are
not aware of any claim by either of them other than the claims that are
released by this Agreement. CA acknowledges that it is familiar with the
provisions of California Civil Code Section 1542, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
CA, being aware of such code section, agrees to waive any rights it may
have thereunder, as well as under any similar provision under New York state
law, or other applicable state law, statute or common law principles of
similar effect.
7. CONDITIONS OF CA'S OBLIGATIONS AT THE CLOSING. The obligations of
CA under this Agreement are subject to the fulfillment, on or before the
Closing, of each of the following conditions, unless otherwise waived:
7.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 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 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 CERTIFICATES. The President of the Company shall
deliver at the Closing a certificate certifying that the conditions specified
in Sections 7.1 and 7.2 have been fulfilled.
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
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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 ESCROW AGREEMENT. The Company, CA and the Escrow Agent shall
have executed and entered into the Escrow Agreement.
7.6 DELIVERY INTO ESCROW. Each Party shall have delivered to the
Escrow Agent its respective consideration for the transactions contemplated
hereunder in accordance with the provisions of Section 1.1 hereof.
8. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT THE 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 CA 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 date of
the Closing.
8.2 PERFORMANCE. CA 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.
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 ESCROW AGREEMENT. The Company, CA and the Escrow Agent shall
have executed and entered into the Escrow Agreement.
8.5 DELIVERY INTO ESCROW. Each Party shall have delivered to the
Escrow Agent its respective consideration for the transactions contemplated
hereunder in accordance with the provisions of Section 1.1 hereof.
8.6 NOTE PURCHASE AGREEMENT. The Note Purchase Agreement by and
between the Company, NAC and CA of even date herewith shall have closed
immediately prior to or concurrently with the Closing hereunder.
9. MISCELLANEOUS.
9.1 SURVIVAL OF WARRANTIES. Unless otherwise set forth in this
Agreement, the warranties, representations and covenants of the Company and
CA contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing for a period of one
(1) year following the Closing.
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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. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the
Parties hereto 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 only and are not to be considered in
construing or interpreting this Agreement.
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 U.S. 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 if to the Company, with a
copy to Xxxxx X. Xxxxxxx, Venture Law Group, 0000 Xxxx Xxxx Xxxx, Xxxxx Xxxx,
XX 00000.
9.7 COMPANY ADVISOR / PAYMENT OF FEES. CA 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 Xxxxxx Capital Group, Ltd. ("XXXXXX") as its advisor in
connection with the transactions contemplated by this Agreement and the Note
Purchase and Sale Agreement. CA acknowledges that Xxxxxx has acted solely as
an advisor to the Company, and has in no way acted for or on behalf of CA in
connection herewith. The information provided to CA by the Company (or by CA)
has not been subjected to independent verification by Xxxxxx, and no
representation or warranty is made by Xxxxxx as to the accuracy or
completeness of such information or the advisability of CA entering into this
Agreement and consummating the transactions contemplated hereby. CA
acknowledges that it has not relied on any statements made by Xxxxxx 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 CA from any liability for any compensation payable to Xxxxxx
(and the costs and expenses of defending against such liability or asserted
liability) in connection with the transactions contemplated hereby. The
Company agrees to indemnify and hold harmless Xxxxxx and its officers,
directors, principals, employees and agents (and their respective heirs,
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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 Xxxxxx.
9.8 FEES AND EXPENSES. Each Party shall pay its own expenses
incurred with respect to this Agreement and the transactions contemplated
hereby, provided, however, that the Company shall pay the fees incurred with
respect to services provided by the Escrow Agent.
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.
9.10 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended or waived only with the written consent of the Company and CA. Any
amendment or waiver effected in accordance with this Section 9.10 shall be
binding upon CA and each transferee of the Warrant (or the Common Stock
issuable upon conversion thereof) 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.
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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 any
confidential 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 Transaction Agreements, the
performance of its obligations hereunder or the ownership of Securities
purchased hereunder, except for such disclosure as is required by law.
[Signature Pages Follow]
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The parties have executed this Warrant Purchase Agreement as of the date
first written above.
COMPANY:
CENTURA SOFTWARE CORPORATION
By: /s/Xxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxxx
-----------------------------------
(print)
Title: CEO
----------------------------------
Address: 000 Xxxxxx Xxxxx
Xxxxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
WARRANT HOLDER:
COMPUTER ASSOCIATES
INTERNATIONAL, INC.
By: /s/Xxx Zar
-------------------------------------
Name: Xxx Zar
-----------------------------------
(print)
Title: SVP
-----------------------------------
Address: Xxx Xxxxxxxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Fax: (000) 000-0000
EXHIBITS
Exhibit A - Form of Escrow Agreement
Exhibit B - Form of Common Stock Warrant
Exhibit C - Schedule of Exceptions to Representations and Warranties
