EXHIBIT 99.1
------------
CENTURA SOFTWARE CORPORATION
NOTE CONVERSION AGREEMENT
FEBRUARY 27, 1998
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
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-
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-
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."
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, 0000 Xxxx Xxxx
Xxxx, Xxxxx Xxxx, Xxxxxxxxxx, 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-
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-
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 Xxxxx 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 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
-4-
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-
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 0000 Xxx) 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 0000 Xxx) 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 xxxx 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 xxxx 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 xxxx 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 xxxx
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-
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-
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 XXXX.Xx 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-
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 0000 Xxx.
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-
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-
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-
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 Xxxxx 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 Xxxxx. 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-
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-
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-
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-
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 Xxxxx X. Xxxxxxx, Venture Law Group, 0000 Xxxx Xxxx Xxxx, Xxxxx Xxxx, XX
00000 or (b) if to the Purchaser, with a copy to Xxxxxxx Xxxxxxxx, Xxxxxxxxx
Madison & Sutro LLP, 0000 Xxxxxxx Xxxxxx, Xxxx Xxxx, XX 00000.
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 Xxxxxx Capital Group, Ltd. ("XXXXXX") as its advisor in
connection with the transactions contemplated by this Agreement and the Note
Purchase and Sale Agreement. Purchaser acknowledges that Xxxxxx 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
Xxxxxx, and no representation or warranty is made by Xxxxxx 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 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 Purchaser 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. Each Party
agrees to hold Xxxxxx harmless and the Company agrees to indemnify Xxxxxx 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 Xxxxxx.
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-
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-
The parties have executed this Note Conversion Agreement as of the date
first written above.
COMPANY:
CENTURA SOFTWARE CORPORATION
By: /s/Xxxxx X. Xxxxxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
-------------------------------------
(print)
Title: CEO
------------------------------------
Address: 000 Xxxxxx Xxxxx
Xxxxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
PURCHASER:
NEWPORT ACQUISITION
COMPANY NO. 2 LLC
By: Crossroads Capital Partners LLC,
as Managing Member
By: /s/Xxxxx Xxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxx
--------------------------------------
(print)
Title: Principal
------------------------------------
Address: 0000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
SIGNATURE PAGE TO CONVERSION AGREEMENT
