Subscription Agreement





                                                                   Exhibit 10.1




SUBSCRIPTION AGREEMENT



 

This SUBSCRIPTION AGREEMENT (the "Agreement"), dated as
of December 30, 1999, has been executed by the undersigned (individually, a
"Subscriber" and collectively, the "Subscribers") in connection with the
offering and sale (the "Offering") of (i) up to 18,500 shares (of which 12,500
shares shall be the "Initial Shares" and 6,000 shares shall be the "Call
Shares") of Series A Cumulative Convertible Preferred Stock, par value $0.01 per
share (the "Preferred Stock"), of Centura Software Corporation, a Delaware
corporation (the "Company"), for a purchase price of $1,000 per share,
convertible into shares of common stock, par value $0.01 per share, of the
Company (the "Common Stock"), and possessing such other rights and preferences
as are set forth in the Certificate of Designations, Preferences and Rights of
the Preferred Stock, attached hereto as EXHIBIT A and filed with Secretary of
State of the State of Delaware on or prior to the date hereof (the
"Certificate"), and (ii) warrants (the "Warrants") to purchase an aggregate of
214,776 shares of Common Stock substantially in the form attached hereto as
EXHIBIT B.  The solicitation of this Agreement and, if accepted by the Company,
the offer and sale of the Preferred Stock and the Warrants, are being made in
reliance upon the provisions of Regulation D ("Regulation D") promulgated by the
Securities and Exchange Commission (the "SEC") under the United States
Securities Act of 1933, as amended (the "Securities Act").  The shares of Common
Stock issuable upon conversion of the Preferred Stock (the "Underlying Common
Shares") and the shares of Common Stock issuable upon exercise of the Warrants
(the "Underlying Warrant Shares") are sometimes referred to in this Agreement as
the "Underlying Shares."



Upon the terms and subject to the conditions set forth
herein, the Subscribers hereby, severally but not jointly, agree to purchase,
and the Company hereby agrees to issue and sell, up to 18,500 shares of
Preferred Stock and the Warrants at the aggregate purchase price set forth in
Section 14 in the name, number of shares of Preferred Stock and the Warrants set
forth opposite the name of each Subscriber on Schedule I attached hereto.  In
consideration of the mutual promises, representations, warranties and conditions
set forth hereto, and intending to be legally bound hereby, the Company and the
Subscribers hereby agree as follows: 



1.Agreement to Subscribe


1.1Purchase and Sale of Initial Shares and
Warrants.  On the basis of the representations and warranties contained in
this Agreement and subject to the terms and conditions hereinafter set forth,
the Company shall issue and sell to each Subscriber and each Subscriber hereby
subscribes for and purchases the specified number of shares of Preferred Stock
and the specified number of Warrants set forth opposite the name of such
Subscriber on Schedule I attached hereto upon and subject to the conditions set
forth in this Agreement for an aggregate purchase price for each Initial Share
and related Warrants of $1,000.  The closing of the purchase of the Initial
Shares and Warrants (the "Initial Closing") shall occur on December 30, 1999 or
such other date as may be agreed to in writing by the Company and the
Subscribers (the "Initial Closing Date"); provided that (a) the purchase
price has been delivered by the Subscribers to LaSalle National Bank, as escrow
agent (the "Escrow Agent") in accordance with the terms of the escrow agreement
substantially in the form of EXHIBIT E hereto (the "Escrow Agreement") (in
immediately available funds via a wire transfer pursuant to instructions
previously delivered for such purpose), (b) the Initial Shares and the Warrants
subscribed for hereby shall have been issued and delivered by the Company to the
Escrow Agent in accordance with the Escrow Agreement and (c) all other
conditions precedent to the obligations of the Subscribers and the Company to
the Initial Closing set forth herein shall have been satisfied or waived in
writing. 



1.2Call Option.  On any date during the period
beginning twelve (12) months after the Initial Closing Date and ending 90 days
thereafter (the "Option Period"), if the Stated Value (as defined in the
Certificate) of the Preferred Stock then outstanding held by a Subscriber (the
"Outstanding Stated Value") is $1,000,000 less than the Stated Value of the
Initial Shares purchased by such Subscriber on the Initial Closing Date, such
Subscriber may exercise an option (a "Call Option"), without the consent of the
Company, to obligate the Company to issue and sell to such Subscriber Call
Shares with a Stated Value (the "Call Preferred Stated Value") up to such
Subscriber's Pro Rata Percentage of $12,500,000 minus the Outstanding Stated
Value of such Subscriber's shares of Preferred Stock; provided,
however, the Call Preferred Stated Value of the Call Shares subject to
any Call Option shall not be less than $1,000,000 or more than the applicable
Subscriber's Pro Rata Percentage of $6,000,000.  As used herein, a "Subscriber's
Pro Rata Percentage" shall equal the percentage obtained by dividing the number
of Initial Shares purchased by such Subscriber by 12,500.  Each Subscriber shall
only be entitled to exercise its Call Option on one occasion.  If a Subscriber
does not exercise its Call Option during the Option Period, the Subscriber's
Call Option shall expire at the end of the Option Period.  The purchase price
per Call Share shall be $1,000 and the Conversion Price of the Call Shares shall
be identical to that of the Initial Shares.  The closing of the purchase of each
Call Option (each, a "Subsequent Closing") shall occur two (2) business days
following the receipt by the Company of written notice by a Subscriber that the
Subscriber's Call Option has been exercised (each, a "Subsequent Closing Date"),
and in the same manner as the Initial Closing.  At each Subsequent Closing, the
Company shall deliver to the applicable Subscriber, subject to the terms and
conditions herein, such Subscriber's Call Shares.  Each Subsequent Closing shall
take place in the same manner as the Initial Closing; provided that (a)
the purchase price (and, if the Subsequent Closing Date is not the Subsequent
Issuance Date (as defined in the Certificate), an amount equal to the amount of
accumulated dividends since the Subsequent Issuance Date or, if later, since the
last Dividend Payment Date (as defined in the Certificate)) has been delivered
by the Subscriber to the Company or as otherwise agreed between the parties (in
immediately available funds via a wire transfer pursuant to instructions
previously delivered for such purpose), (b) the applicable Call Shares shall
have been issued and delivered by the Company to the applicable Subscriber or as
otherwise agreed between the parties and (c) all other conditions precedent to
the obligations of the applicable Subscriber and the Company to each Subsequent
Closing set forth herein shall have been satisfied or waived in writing.  The
Initial Closing and each Subsequent Closing are hereinafter sometimes referred
to as a "Closing."  The Initial Closing Date and each Subsequent Closing Date
are hereinafter sometimes referred to as a "Closing Date."



1.3Conditions Precedent to the Obligation of the
Company to Sell the Initial Shares at the Closing.  The obligation hereunder
of the Company to issue and sell the Initial Shares to each Subscriber is
subject to the satisfaction, at or before the Closing, of each of the conditions
set forth below.  Each of these conditions are for the Company's sole benefit
and may be waived in writing by the Company at any time in its sole
discretion.


(a)Accuracy of the Subscriber's Representations and
Warranties.  The representations and warranties of the Subscriber shall be
true and correct as of the date when made and in all material respects as of the
Closing Date as though made at each time.



(b)Performance by the Subscriber.  The Subscriber
shall have performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by this Agreement or any other
Transaction Documents (as defined herein) to be performed, satisfied or complied
with by the Subscriber at or prior to the Closing.



(c)No Injunction.  No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement and the other Transaction Documents, and no valid
proceeding shall have been commenced which may have the effect of prohibiting or
adversely affecting any of the transactions contemplated hereby and thereby.



(d)Legal Investment.  At the time of the Closing,
the purchase of the Initial Shares and the Warrants by the Subscriber shall be
legally permitted by all statutes, rules and regulations to which the Subscriber
and the Company are subject.



(e)Registration Rights Agreement.  The Subscriber
shall have entered into the Registration Rights Agreement contemplated by
Section 5.1.



(f)Full Subscription.  All of the Initial Shares
shall have been subscribed for.





1.4Conditions Precedent to the Obligation of the
Subscribers to Purchase the Initial Shares at the Initial Closing.  The
obligation of the Subscribers hereunder to acquire and pay for the Initial
Shares is subject to the satisfaction, at or before the Initial Closing, of each
of the following conditions.  Each of these conditions is for each Subscriber's
sole benefit and may be waived in writing by a Subscriber at any time in its
sole discretion (any such waiver shall have effect only with respect to the
waiving Subscriber).


(a)Accuracy of the Company's Representations and
Warranties.  The representations and warranties of the Company shall be true
and correct as of the date when made and in all material respects as of the
Initial Closing Date as though made at such time. 



(b)Performance by the Company.  The Company shall
have performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by this Agreement or any of the
other Transaction Documents to be performed, satisfied or complied with by the
Company at or prior to the Initial Closing.



(c)No Injunction.  No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits or adversely effects any of the transactions
contemplated by this Agreement and the other Transaction Documents, and no
proceeding shall have been commenced which may have the effect of prohibiting or
adversely affecting any of the transactions contemplated hereby and thereby.




(d)Adverse Changes.  For the period from December
31, 1998 until the Closing Date, except as publicly disclosed in the Company's
press releases or filings (the "Recent Exchange Act Reports") pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (the, "Prior
Public Disclosures"), no event shall have occurred which has had or is
reasonably likely to have a Material Adverse Effect (as defined in Section 3.6
hereof) on the Company.



(e)No Suspension of Trading in or Delisting of Common
Stock.  The trading in the Common Stock shall not have been suspended by the
SEC or the National Association of Securities Dealers, Inc. (the "NASD"); the
Common Stock shall not have been delisted from The Nasdaq SmallCap Market and
the Company shall not have received any notice of threatened or pending
proceedings for delisting the Common Stock from The Nasdaq SmallCap Market,
which proceedings have not been withdrawn; and trading in securities generally
as reported by The Nasdaq SmallCap Market shall not have been suspended or
limited or minimum prices shall not have been established on securities whose
trades are reported by The Nasdaq SmallCap Market.



(f)Legal Opinion.  The Company shall have
delivered to the Subscriber's an opinion of independent counsel to the Company,
substantially in the form of EXHIBIT C attached hereto, dated the Initial
Closing Date.



(g)Officer's Certificate.  The Company shall have
delivered to the Subscribers a certificate in form and substance reasonably
satisfactory to each Subscriber, executed by an executive officer of the
Company, to the effect that all the conditions to the Closing shall have been
satisfied and that the representations and warranties of the Company contained
in the Agreement are true and correct in all respects on and as of the Closing
Date with the same force and effect as though such representations and
warranties had been made on the date hereof.



(h)Registration Rights Agreement.  The Company
shall have entered into the Registration Rights Agreement with the Subscribers
(the "Registration Rights Agreement") contemplated by Section 5.1, substantially
in the form of EXHIBIT D.



(i)Certificate of Designations.  The Company shall
have filed the Certificate in accordance with the provisions hereof, the
Certificate shall have become effective and the Company shall have delivered
evidence thereof to the Subscribers.



(j)Reservation of Shares. On or prior to the
Initial Closing Date, the Company shall have duly reserved the number of
Underlying Common Shares and Underlying Warrant Shares required by this
Agreement, the Certificate, the Registration Rights Agreement and the Warrants
(collectively, the "Transaction Documents") to be reserved for issuance upon
conversion of the Initial Shares and the Call Shares and upon exercise of the
Warrants.



(k)Legal Investment.  At the time of the Closing,
the purchase of the Initial Shares and the Warrants by the Subscribers shall be
legally permitted by all statutes, rules and regulations to which the
Subscribers and the Company are subject.



(l)Warrants.  The Company shall have executed and
delivered to the Subscribers the Warrants.



(m)Secretary's Certificate.  The Company shall
have delivered to the Subscribers a certificate in form and substance reasonably
satisfactory to each Subscriber, executed by the Secretary of the Company,
certifying as to the truth and accuracy of the certificate of incorporation of
the Company (the "Certificate of Incorporation"), as in effect on the Closing
Date, the By-Laws of the Company, as in effect on the Closing Date, and the
resolutions duly adopted by the Board of Directors authorizing and approving the
execution and delivery of this Agreement and the other Transaction Documents and
the consummation of the transactions contemplated hereby and thereby.



(n)Nasdaq Filing.  Pursuant to Rule 4310(c)(17) of
The Nasdaq Stock Market, Inc.'s Marketplace Rules, the Company shall have filed
a form with The Nasdaq Stock Market, Inc. designated by The Nasdaq Stock Market,
Inc. for the listing of the Underlying Shares with respect to the Initial Shares
not later than required by The Nasdaq Stock Market, Inc.



(o)Other Matters.  On or prior to the Initial
Closing Date, the Company shall have delivered to the Subscribers the
following:



(i)A copy of the Certificate and the Certificate of
Incorporation, certified as of a recent date by the Secretary of State of the
State of Delaware; and



(ii)A long-form certificate of good standing and tax
status of the Company certified as of a recent date by the Secretary of State of
the States of Delaware and California.





1.5Conditions Precedent to the Obligation of each
Subscriber to Purchase the Call Shares at each Subsequent Closing.  The
obligation of each Subscriber hereunder to acquire and pay for the Call Shares
is subject to the satisfaction, at or before the applicable Subsequent Closing,
of each of the following conditions.  Each of these conditions is for each
Subscriber's sole benefit and may be waived in writing by such Subscriber at any
time in its sole discretion (any such waiver shall have effect only with respect
to the waiving Subscriber and shall waive all waivable rights which the waiving
Subscriber may otherwise have with respect to the condition waived).


(a)Initial Closing.  The Initial Closing shall
have occurred.



(b)Accuracy of the Company's Representations and
Warranties.  The representations and warranties of the Company shall be true
and correct as of the date when made and in all material respects as of the
applicable Subsequent Closing Date as though made at such time.



(c)Performance by the Company.  The Company shall
have performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by this Agreement or any of the
other Transaction Documents to be performed, satisfied or complied with by the
Company at or prior to each Subsequent Closing.



(d)No Injunction.  No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits or adversely effects any of the transactions
contemplated by this Agreement and the other Transaction Documents, and no
proceeding shall have been commenced which may have the effect of prohibiting or
adversely affecting any of the transactions contemplated hereby and thereby.




(e)Adverse Changes.  For the period from the
Initial Closing Date until the applicable Subsequent Closing Date, except as
publicly disclosed in the Company's press releases or the Exchange Act Reports,
no event shall have occurred or be threatened to occur which has had or is
likely to have a Material Adverse Effect on the Company.



(f)No Suspension of Trading in or Delisting of Common
Stock.  The trading in the Common Stock shall not have been suspended by the
SEC or the NASD; the Common Stock shall not have been delisted from The Nasdaq
SmallCap Market and the Company shall not have received any notice of threatened
or pending proceedings for delisting the Common Stock from The Nasdaq SmallCap
Market, which proceedings have not been withdrawn; and trading in securities
generally as reported by The Nasdaq SmallCap Market shall not have been
suspended or limited or minimum prices shall not have been established on
securities whose trades are reported by The Nasdaq SmallCap Market.



(g)Legal Opinion.  The Company shall have
delivered to the Subscriber an opinion of independent counsel to the Company,
substantially in the form of EXHIBIT C attached hereto, dated the applicable
Subsequent Closing Date.



(h)Officer's Certificate.  The Company shall have
delivered to the Subscriber a certificate in form and substance reasonably
satisfactory to the Subscriber, executed by an executive officer of the Company,
to the effect that all the conditions to the applicable Subsequent Closing shall
have been satisfied and that the representations and warranties of the Company
contained in the Agreement are true and correct in all respects on and as of the
applicable Subsequent Closing Date with the same force and effect as though such
representations and warranties had been made on the date hereof.



(i)Reservation of Shares. On the applicable
Subsequent Closing Date, the Company shall have duly reserved the number of
Underlying Common Shares required by this Agreement to be reserved for issuance
upon conversion or exercise of any Call Shares.



(j)Legal Investment.  At the time of the
applicable Subsequent Closing, the purchase of the Call Shares by the Subscriber
shall be legally permitted by all statutes, rules and regulations to which the
Subscriber and the Company are subject.



(k)Nasdaq Filing.  Pursuant to Rule 4310(c)(17) of
The Nasdaq Stock Market, Inc.'s Marketplace Rules, the Company shall have filed
a form with The Nasdaq Stock Market, Inc. designated by The Nasdaq Stock Market,
Inc. for the listing of the Underlying Shares with respect to the Call Shares
not later than required by The Nasdaq Stock Market, Inc.



(l)Performance of Conversion Obligations.  The
Company shall have delivered Underlying Common Shares upon any conversion of the
Initial Shares and otherwise performed its obligations in accordance with the
terms, conditions and timing requirements of the Certificate.



 





2.Representations and Warranties of the Subscriber



Each Subscriber, with respect only to itself, represents
and warrants to the Company that: 


2.1No Government Recommendation or Approval.  The
Subscriber understands that no United States federal or state agency or similar
agency of any other country, has passed upon or made any recommendation or
endorsement of the Company or of the Offering.



2.2Intent.  The Subscriber is purchasing the
Initial Shares, the Warrants and, if applicable, the Call Shares (collectively,
the "Securities") for its own account and not with a view towards distribution
and the Subscriber has no present arrangement to sell the Securities to or
through any person or entity; provided, however, that by making
the representation herein, the Subscriber does not agree to hold the Securities
for any minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with federal and state securities laws
applicable to such disposition.  The Subscriber understands that the Securities
must be held indefinitely unless such Securities are subsequently registered
under the Securities Act or an exemption from registration is available.  The
Subscriber has been advised or is aware of the provisions of Rule 144
promulgated under the Securities Act.



2.3Sophisticated Investor.  The Subscriber is an
"accredited investor" (as defined in Rule 501 of Regulation D), and the
Subscriber has such experience in business and financial matters that it is
capable of evaluating the merits and risks of an investment in the Securities.
The Subscriber acknowledges that the Securities are speculative and involve a
high degree of risk.



2.4Independent Investigation.  The Subscriber, in
making the decision to purchase the Preferred Stock subscribed for hereunder,
has relied upon an independent investigation made by it and/or its
representatives and has not relied on any information or representations made by
third parties or on any oral or written representations or assurances from the
Company or any representative or agent of the Company other than as set forth in
the Transaction Documents and the Prior Public Disclosures.  The Subscriber has
had a reasonable opportunity to ask questions of, and receive answers from, the
Company concerning the Company and the Offering.  The Subscriber acknowledges
that the price and terms of the Preferred Stock and the Warrants offered hereby
have been determined by negotiation based in part on the market price for the
Common Stock, and that it does not necessarily bear any relationship to the
assets, book value or potential performance of the Company or any other
recognized criteria of value.  Neither such inquiries nor any other due
diligence investigations conducted by such Subscriber or its advisors, if any,
or its representatives shall modify, amend or affect such Subscriber's right to
rely on the Company's representations and warranties contained in Section 3
below.



2.5Authority.  This Agreement has been duly
authorized and validly executed and delivered by the Subscriber and is a legal,
valid and binding obligation of the Subscriber, enforceable against the
Subscriber accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.



2.6No Legal Advice from Company.  The Subscriber
acknowledges that it has had the opportunity to review this Agreement and the
transactions contemplated by this Agreement with its own legal counsel and
investment and tax advisors.  Except for any statements or representations of
the Company made in this Agreement, the Registration Rights Agreement, the
Certificate, the Warrants and the legal opinion called for by Section 1.4(f)
hereof, the Subscriber is relying solely on its counsel and advisors and not on
any statements or representations of the Company or any of its representatives
or agents for legal, tax or investment advice with respect to this investment,
the transactions contemplated by this Agreement or the securities laws of any
jurisdiction.



2.7No Brokers.  The Subscriber has taken no action
which would give rise to any claim by any person for brokerage commissions,
finder's fees or similar payments by the Company relating to this Agreement or
the transactions contemplated hereby.



2.8Not an Affiliate.  The Subscriber is not an
officer, director or "affiliate" (as that term is defined in Rule 405 of
Securities Act) of the Company.



2.9Reliance on Representations and Warranties.
The Subscriber understands that the Preferred Stock and the Warrants are being
offered and sold to it in reliance on specific provisions of United States
federal and state securities laws and that the Company is relying upon the truth
and accuracy of the representations, warranties, agreements, acknowledgments and
understandings of the Subscriber set forth in this Agreement in order to
determine the applicability of such provisions.



2.10Placement Agent.  The Subscriber acknowledges
that Rochon Capital Group, Ltd. is acting as placement agent (the "Placement
Agent") in connection with the offering of the shares of Preferred Stock by the
Company and will be compensated by the Company for acting in such capacity.  The
Subscriber further acknowledges that the Placement Agent has acted solely as
placement agent in connection with the offering of the shares of Preferred Stock
by the Company, that the Subscriber has not obtained any advice from the
Placement Agent concerning its investment or participation herein, that the
information and data provided to the Subscriber in connection with the
transactions contemplated hereby have not been subjected to independent
verification by the Placement Agent, and that the Placement Agent makes no
representation or warranty with respect to the accuracy or completeness of such
information, data or other disclosure material.  The Subscriber understands that
the provisions of this Section 2.10 are for the benefit of, and may be enforced
by, the Placement Agent.






3.Representations and Warranties of Company





The Company represents and warrants to each Subscriber
that: 


3.1Company Status.  The Company has registered its
Common Stock pursuant to Section 12(b) or 12(g) of the Exchange Act, is in full
compliance with all reporting requirements of the Exchange Act and with all
requirements for the continued quotation of its Common Stock on The Nasdaq
SmallCap Market, and such Common Stock is currently quoted for trading on The
Nasdaq SmallCap Market.



3.2Current Public Information.  The Recent
Exchange Act Reports are the only filings made by the Company with the SEC
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, in the case
of the Initial Closing Date, since December 31, 1998, and in the case of any
Subsequent Closing Date, since the Initial Closing Date.  The Recent Exchange
Act Reports have been filed with the SEC on a timely basis.



3.3No Directed Selling Efforts or General Solicitation
in Regard to this Transaction.  The Company has not conducted any general
solicitation (as that term is used in Regulation D) with respect to the
Securities, nor has it made any offers or sales of any security or solicited any
offers to buy any security, under circumstances that would require registration
of the Securities under the Securities Act.



3.4Valid Issuance of Capital Stock.  (a) The
Company has an authorized capitalization consisting of 60,000,000 shares of
Common Stock and 2,000,000 shares of preferred stock, par value $0.01 per share.
The Company has issued and outstanding on December 27, 1999 37,347,527 shares of
Common Stock, of which no shares are held in treasury.  As of the date hereof,
the Company has outstanding the following securities convertible into or
exercisable or exchangeable for Common Stock (the "Derivative Securities"):
warrants to purchase 1,511,676 shares of Common Stock and options to purchase
7,504,475 shares of Common Stock.  From the date hereof to the Initial Closing,
there will be no changes in the authorized capital stock or Derivative
Securities, except as contemplated by this Agreement.



(b)All of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid and
non-assessable.  On or before the Initial Closing Date, the authorized
capitalization of the Company shall include the Preferred Stock and the
Warrants; upon issuance, the shares of Preferred Stock shall be (i) validly
authorized and issued, fully paid and non-assessable, (ii) free and clear from
all taxes, liens and charges with respect to the issuance thereof and (iii)
entitled to the rights and preferences set forth in the Certificate.  At least
7,000,000 shares of Common Stock (subject to adjustment pursuant to the
Company's covenant set forth in Section 5.2 below) have been duly authorized and
reserved for issuance upon conversion of the Preferred Stock and exercise of the
Warrants.  Upon conversion or exercise in accordance with the Certificate or the
Warrants, as the case may be, the Underlying Shares will be validly issued,
fully paid and nonassessable and free from all taxes, liens and charges with
respect to the issuance thereof, with the holders being entitled to all rights
accorded to a holder of Common Stock and the holders of outstanding capital
stock of the Company are not and shall not be entitled to preemptive or other
rights afforded by the Company to subscribe for the capital stock or other
securities of the Company as a result of the sale of the Preferred Stock, the
Warrants or the issuance of Underlying Stock upon the conversion or exercise
thereof.  The issuance by the Company of the Securities is exempt from
registration under the Securities Act.  The issuance by the Company of the
Preferred Stock and the Warrants is being made in reliance upon the exemption
from registration set forth in Rule 506 of Regulation D under the Securities Act
and is only being made to "accredited investors" that meet the requirements of
Rule 501(a) of Regulation D and similar exemptions under state law.



(c)Other than as set forth in Section 3.4(a), (i) no
shares of the Company's capital stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the
Company; (ii) there are no outstanding debt securities issued by the Company;
(iii) there are no outstanding options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into, any shares of capital stock of the Company or any of
its Subsidiaries (as defined herein), or contracts, commitments, understandings
or arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries; (iv) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under the Securities Act (except the Registration Rights
Agreement); (v) there are no outstanding securities of the Company or any of its
Subsidiaries which contain any redemption or similar provisions, and there are
no contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to redeem a security of the
Company or any of its Subsidiaries; (vi) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Securities as described in this Agreement; and (vii) the Company
does not have any stock appreciation rights or "phantom stock" plans or
agreements or any similar plan or agreement.



(d)100% of the authorized shares of capital stock of
each Subsidiary (as defined herein) is owned by the Company (except for
directors' qualifying shares or promotional shares), free and clear of any lien,
charge, security interest, encumbrance, adverse claim or other restriction, and
all the issued and outstanding shares of each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights.  There
are no outstanding agreements or commitments requiring the Company or any
Subsidiary to issue capital stock or Derivative Securities.



3.5Share Issuance.  The number of shares of Common
Stock issuable upon conversion of the Preferred Stock and upon exercise of the
Warrants may increase substantially in certain circumstances, including, but not
necessarily limited to, the circumstance wherein the trading price of the Common
Stock declines prior to conversion of the Preferred Stock or exercise of the
Warrants.  The Company's executive officers and directors have studied and fully
understand the nature of the Securities being sold hereby and recognize that
they have a potentially dilutive effect.  The Board of Directors of the Company
has concluded, in its good faith business judgment, that such issuance is in the
best interest of the Company.  The Company specifically acknowledges that its
obligation to issue the Underlying Shares upon conversion of the Preferred Stock
and upon exercise of the Warrants is binding upon the Company and enforceable
regardless of the dilution such issuance may have on the ownership interests of
other stockholders of the Company.



3.6Organization and Qualification.  The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power to own its
properties and assets and to carry on its business as now being conducted and as
proposed to be conducted.  The Company has no Significant Subsidiaries (as
defined herein) and no subsidiaries other than as set forth on Schedule 3.6
hereto (the "Subsidiaries").  The Company owns no securities other than the
capital stock of the Subsidiaries. The Company is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary other than those jurisdictions in which the failure so
to qualify would not have a Material Adverse Effect.  "Material Adverse Effect"
means any material adverse effect on the business, operations, properties,
prospects, or condition (financial or otherwise) of the Company and/or any
condition or situation which would prohibit or otherwise adversely interfere
with the ability of the Company to enter into and perform its obligations under
the Transaction Documents.  As used herein, "Significant Subsidiary" has the
meaning set forth in Section 1-02(w) of Regulation S-X. 



3.7Authorization; Enforcement.  (a) The Company
has the requisite corporate power and authority to enter into and perform this
Agreement and the other Transaction Documents, to issue the Preferred Stock in
accordance with the terms hereof and thereof and to file and perform its
obligations under the Certificate and the Certificate of Incorporation; (b) the
execution and delivery of this Agreement and the other Transaction Documents,
the issuance and delivery of the Preferred Stock and the Warrants, the filing of
the Certificate by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action, and no further consent or authorization of the
Company or its Board of Directors or stockholders is required except as
contemplated by Section 5.15; (c) this Agreement has been, and on or before the
Initial Closing Date each of the other Transaction Documents will be, duly
executed and delivered by the Company and on the Initial Closing Date, the
Certificate will be duly filed and effective; and (d) this Agreement
constitutes, and upon execution and delivery thereof, each of the other
Transaction Documents shall constitute, legal, valid and binding obligations of
the Company enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of general
application.



3.8Corporate Documents.  The Company has furnished
or made available to the Subscriber true, correct and complete copies of the
Certificate of Incorporation, as in effect on the date hereof and the Company's
By-Laws, as in effect on the date hereof (the Certificate of Incorporation, the
Certificate and the Company's By-Laws are collectively referred to herein as the
"Charter Documents"), certified in each case by the Secretary of the Company.
The Company is not in violation of any of the provisions of its Charter
Documents.



3.9No Conflicts.  The execution, delivery and
performance of this Agreement, including the conversion of the Preferred Stock
into Common Stock of the Company, and the Registration Rights Agreement, the
filing of the Certificate, the issuance of the Preferred Stock and the
Underlying Common Shares upon conversion of the Preferred Stock, the issuance of
the Warrants and the Underlying Warrant Shares upon exercise of the Warrants and
the consummation by the Company of the transactions contemplated hereby and
thereby do not and will not (i) result in a violation of the Charter Documents
or (ii) result in the creation of any lien, charge, security interest or
encumbrance upon any of the assets of the Company pursuant to the terms or
provisions of or, conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture, credit facility or instrument to which the Company is a
party, or result in a violation of any federal, state, local or foreign law,
rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations) applicable to the Company or by which any
property or asset of the Company is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect).  The business of the Company is not being conducted in
violation of any law, ordinance or regulations of any governmental entity,
except for violations or potential violations which either individually or in
the aggregate do not and will not have a Material Adverse Effect.  The Company
is not required under federal, state or local law, rule or regulation in the
United States to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental or self-regulatory agency
in order for it to execute, deliver or perform any of its obligations under this
Agreement or the Registration Rights Agreement or issue and sell the Preferred
Stock or the Underlying Common Shares or issue and sell the Warrants or the
Underlying Warrant Shares in accordance with the terms hereof and thereof (other
than any SEC, NASD or state securities filings which may be required to be made
by the Company subsequent to the Initial Closing, any registration statement
which may be filed pursuant hereto and the filing of the Certificate).



3.10Exchange Act Reports.  The Company has made
available to each Subscriber through the Electronic Data Gathering Analysis and
Retrieval (EDGAR) system true, correct and complete copies of all reports
required to be filed by it under the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, since January 1, 1996 (the foregoing materials being
collectively referred to herein as the "Exchange Act Reports").  The Company has
not provided to the Subscriber any information which, according to applicable
law, rule or regulation, should have been disclosed publicly by the Company but
which has not been so disclosed.  As of their respective dates, the Exchange Act
Reports complied (and as of its effective date, the Registration Statement for
the Underlying Shares will comply) in all material respects with the
requirements of the Exchange Act (or, in the case of such Registration
Statement, the Securities Act) and the rules and regulations of the SEC
promulgated thereunder and other applicable federal, state and local laws, rules
and regulations, and none of the Exchange Act Reports contained (and, as of its
effective date, such Registration Statement will not contain) any untrue
statement of a material fact or omitted (and, as of its effective date, the
Registration Statement will not omit) to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading.  The audited financial statements of the Company included in the
Exchange Act Reports or incorporated by reference in the Registration Statement
comply or will comply in all material respects as to form with applicable
accounting requirements and the published rules and regulations of the SEC or
other applicable rules and regulations with respect thereto.  Such financial
statements have been (or will be) prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except (a) as may be otherwise indicated in such financial statements or the
notes thereto or (b) in the case of unaudited interim statements, to the extent
they may not include footnotes or may be condensed or summary statements) and
fairly present (or will fairly present) in all material respects the
consolidated financial position of the Company as of the dates thereof and the
consolidated results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).  The Company has timely filed (including filing such documents by
incorporation by reference) all agreements or documents to which the Company is
a party that are required to be filed as exhibits to the Exchange Act
Reports.



3.11No Material Adverse Change.  In the case of
the Initial Closing, since December 31, 1998, except as disclosed in the Prior
Public Disclosures, no Material Adverse Effect has occurred or exists with
respect to the Company. In the case of any Subsequent Closing, since the Initial
Closing, except as disclosed in the Exchange Act Reports, no Material Adverse
Effect has occurred or exists with respect to the Company.



3.12No Undisclosed Liabilities.  The Company has
no liabilities or obligations not disclosed in the Exchange Act Reports, other
than those incurred in the ordinary course of the Company's business since, in
the case of the Initial Closing, December 31, 1998, and in the case of each
Subsequent Closing, the Initial Closing Date, or which, individually or in the
aggregate, do not or would not have a Material Adverse Effect on the
Company.



3.13No Undisclosed Events or Circumstances.  No
event or circumstance has occurred or exists with respect to the Company or its
business, operations, properties, prospects or condition (financial or
otherwise), which, under applicable law, rule or regulation, requires public
disclosure or announcement by the Company but which has not been so publicly
announced or disclosed.



3.14Employee 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 its employees are good.  No executive
officer (as defined in Rule 501(f) of the Securities Act) has notified the
Company's Board of Directors that such officer intends to leave the Company in
the near future or otherwise terminate such officer's employment with the
Company and the Company does not expect to terminate any such officer during the
six months following the date of this Agreement.



3.15Transactions With Affiliates and Employees.
Except as set forth on Schedule 3.15 hereto or in the Exchange Act Reports filed
at least ten days prior to the date hereof and other than the grant or exercise
of stock options disclosed in Section 3.4(a), none of the officers or directors
of the Company and, to the Company's knowledge, none of the employees of the
Company is presently a party to any transaction with the Company (other than for
services as employees, officers and directors), including any contract,
agreement or other 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.



3.16Application of Takeover Protections.  The
Company and its board of directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Certificate of Incorporation
or the laws of the State of Delaware which is or could become applicable to the
Subscribers as a result of the Subscribers and the Company fulfilling their
obligations under the Transaction Documents, including, without limitation, the
Company's issuance of the Securities and the Subscribers' ownership of the
Securities.



3.17No Brokers. Except for the Company's retention
of the Placement Agent to act as a broker in connection with the transactions
contemplated by this Agreement, the Company has not taken any action which would
give rise to a claim by any person for brokerage commissions, finder's fees or
similar payments by the Subscriber relating to this Agreement or the
transactions contemplated hereby. 



3.18Effectiveness of SEC Filings.  The SEC has not
issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company under the Exchange Act or the
Securities Act.  



3.19No Material Litigation Proceedings.  The
Company is not a party to or the subject of any litigation, arbitration or other
proceeding which, if adversely determined, would individually or in the
aggregate have a Material Adverse Effect.  There is no action, suit, proceeding
or investigation pending, or, to the knowledge of the Company, threatened,
against the Company before or by any court, regulatory body or administrative
agency or any other governmental agency or body, domestic or foreign, or any
action, suit, proceeding or investigation pending, or, to the knowledge of the
Company, threatened, which in any such case challenges the validity of any
action taken or to be taken by the Company pursuant to or in connection with
this Agreement, the other Transaction Documents or the issuance of the
Securities.



3.20Compliance with Instruments, etc.  TheCompany
(or the manner in which it conducts its business) is not in breach or violation
of, or in default under, any term or provision of (i) the Charter Documents,
(ii) any indenture, mortgage, deed of trust, voting trust agreement,
stockholders agreement, note agreement or other agreement or instrument to which
it is a party or by which it is or may be bound or to which any of its property
or assets is or may be subject, or any indebtedness, the effect of which breach
or default, individually or in the aggregate, would reasonably be likely to have
a Material Adverse Effect, or (iii) any statute, judgment, decree, order, rule
or regulation applicable to the Company or of any arbitrator, court, regulatory
body, administrative agency or any other governmental agency or body, domestic
or foreign, having jurisdiction over the Company or any of its  activities,
properties or assets and the effect of which breach or default, individually or
in the aggregate, would reasonably be likely to have a Material Adverse
Effect.



3.21Permits; Governmental and Other Approvals. The
Company has such licenses, permits, consents, orders, approvals and other
authorizations necessary for the conduct of its business as now being conducted
and proposed to be conducted.  No approval, consent, authorization or other
order of, and no designation, filing, registration, qualification or recording
with any governmental authority, domestic or foreign, is required for the
Company's performance of this Agreement or the other Transaction Documents or
the consummation of the transactions contemplated hereby and thereby.



3.22Intellectual Property.



(a)The Company has full and exclusive right, title
and interest in and to, or license rights to, all patents, patent applications,
registered or unregistered trademarks, service marks and trade names, registered
or unregistered copyrights and applications therefor, licenses, approvals or
governmental authorizations to conduct its business as now conducted, know-how,
proprietary rights and processes, trade secrets, customer lists, methodologies
(to the extent protectible), proprietary development and marketing information
and know-how, inventions, inventors' notes (to the extent such notes exist),
drawings, designs associated with the foregoing, and other confidential
information (collectively, "Intellectual Property") relating to its business or
otherwise used in or necessary for the proper conduct of its business, free and
clear of all liens, security interests, claims and encumbrances of any nature,
other than liens, security interests, claims and encumbrances obtained in
connection with a secured debt financing with a bank or other financial
institution; and (ii) the Company has no obligation to any other person or
entity with respect to the Intellectual Property or any product or process of
the Company utilizing or embodying any Intellectual Property.


(b)Only where the failure of the following to be true
would have a Material Adverse Effect, there is (i) no infringement, misuse or
misappropriation of any Intellectual Property owned, licensed or controlled by
any third party arising out of any product or process now being used,
manufactured or distributed, or ever having been used, manufactured or
distributed at any time previously, by or on behalf of the Company, (ii) no
pending or, to the knowledge of the Company, threatened claim or challenge of or
proceeding for infringement, misuse or misappropriation of or interference with
any Intellectual Property owned, licensed or controlled by any third party
arising out of any product or process now being used, manufactured or
distributed, or ever having been used, manufactured or distributed at any time
previously, by or on behalf of the Company, (iii) no pending or threatened
or potential claim, challenge or proceeding by the Company against any third
party for infringement, misuse or misappropriation of or interference with any
Intellectual Property owned, licensed or controlled by the Company or (iv) no
notice or, to the knowledge of the Company, facts or information rendering any
Intellectual Property owned, controlled or licensed by the Company invalid or
unenforceable, nor, to the knowledge of the Company, is there any allegation
that any such Intellectual Property is invalid or unenforceable.



3.23Material Contracts.  All contracts to which
the Company is a party or by which the Company is bound which are or are
required to be filed as or incorporated by reference as exhibits to the Exchange
Act Reports (the "Material Contracts"), are valid, binding and enforceable in
accordance with their terms (assuming the other parties thereto are bound) and
are in full force and effect, except where such invalidity or unenforceability
would not have a Material Adverse Effect.  No payment default, breach or
violation or alleged default by the Company exists under the Material Contracts,
except where such default, breach or violation or alleged default would not have
a Material Adverse Effect.



3.24Investment Company.  The Company is not, and
is not controlled by or under common control with an affiliate of, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.



3.25Solicitation Materials.  The Company has not
distributed to parties other than the Subscribers and their agents any offering
materials in connection with the offering and sale of the Securities.  The
Company understands and confirms that the Subscribers shall be relying on the
foregoing representations in effecting the transactions contemplated hereby.



3.26No Integration.  Neither the Company nor any
of its affiliates nor any person acting on the Company's behalf has, directly or
indirectly, at any time within the past six (6) months made any offer or sale of
any security or solicitation of any offer to buy any security under
circumstances that would (i) eliminate the availability of the exemption
from registration under Regulation D under the Securities Act in connection with
the offer and sale of the Securities as contemplated hereby or (ii) cause the
offering of the Securities pursuant to this Agreement to be integrated with
prior offerings by the Company for purposes of the Securities Act or any
applicable stockholder approval provisions, including, without limitation, under
the rules and regulations of the NASD, as applicable.



3.27Insurance.  The Company maintains property and
casualty, general liability, workers' compensation, personal injury and other
similar types of insurance with financially sound and reputable insurers that is
consistent with industry standards.  The Company has not  received notice from,
or has any knowledge of any threat by, any insurer (that has issued any
insurance policy to the Company) that such insurer intends to deny coverage
under or cancel, discontinue or not renew any insurance policy presently in
force.

3.28Taxes.  All applicable tax returns required to
be filed by the Company have been filed, or if not yet filed have been granted
extensions of the filing dates which extensions have not expired, and all taxes,
assessments, fees and other governmental charges upon the Company or upon any of
its properties, income or franchises, shown in such returns and on assessments
received by the Company to be due and payable have been paid, or adequate
reserves therefor have been set up if any of such taxes are being contested in
good faith; or if any of such tax returns or extensions requested have not been
filed or if any such taxes have not been paid or so reserved for, the failure to
so file or to pay would not in the aggregate or individually have a Material
Adverse Effect.



3.29Year 2000 Compliance.  All computer hardware,
software, databases, systems and other computer equipment (collectively,
"Software") used by the Company can be used prior to, during and after the
calendar year 2000, and shall operate during each such time period, both on a
stand-alone basis and when interacting or interoperating with third-party
Software, without error relating to the processing, calculating, comparing,
sequencing or other use of Date Data, except where the failure of such operation
would not have a Material Adverse Effect.  "Date Data" is any data derived from
or dependent upon the proper recognition by software or hardware of dates prior
to or after the year 2000.



3.30Form S-3 Eligible.  The Company meets the
requirements for use of Form S-3 under the Securities Act.



3.31Disclosure.  The written information with
respect to the Company heretofore provided and to be provided by the Company
pursuant to this Agreement and the other Transaction Documents, including the
Schedules and Exhibits hereto, and each of the agreements, documents,
certificates and writings to be delivered to the Subscriber or its
representatives at each Closing, do not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated herein or therein or necessary in order to make the statements and
writings contained herein and therein not false or misleading in the light of
the circumstances under which they were made.  There is no fact known to the
Company which would have a Material Adverse Effect which has not been set forth
herein or otherwise disclosed in writing to the Subscriber.  





4.Covenants of each Subscriber


4.1Resales.  The Subscriber shall not make any
offers or sales of the Securities other than pursuant to a registration
statement under the Securities Act or pursuant to an exemption from registration
under the Securities Act.  The Subscriber will comply with applicable prospectus
delivery requirements.






5.Covenants of the Company


5.1Registration Rights.  The Company will file
as promptly as possible, but in no event later than 30 days after the Initial
Closing, and use its best efforts to cause to become effective, as promptly as
possible, but in no event later than 90 days after the Initial Closing, a
registration statement (the "Registration Statement") on Form S-3 under the
Securities Act covering any resale of the Underlying Shares and shall take all
action necessary to qualify the Underlying Shares under all applicable state
"blue sky" laws, in accordance with terms of the Registration Rights Agreement.




5.2Reservation of Common Stock.  As of the
Closing, the Company will reserve and the Company shall continue to reserve and
keep available at all times, free of preemptive rights, shares of Common Stock
in a number sufficient to enable the Company to satisfy one and one-half times
the number of shares necessary to satisfy any obligation to issue shares of
Common Stock upon conversion of the Preferred Stock as if all the Preferred
Stock (whether Initial Shares or Call Shares) were converted as of the Initial
Closing at the then applicable conversion price and at all times thereafter,
plus the number of additional shares of Common Stock as would be issued upon
exercise of the Warrants.  The number of shares so reserved may be reduced by
the number of shares actually delivered pursuant to conversion of a portion of
the Preferred Stock (provided that in no event shall the number of shares so
reserved be less than one and one-half times the number required to satisfy the
remaining conversion rights on the unconverted Preferred Stock) and the number
of shares so reserved shall be increased to reflect stock splits and stock
dividends and distributions. 



5.3Listing of Underlying Shares.  The Company
hereby agrees, promptly following the each of the Closings of the transactions
contemplated by this Agreement, to take such action to cause the Underlying
Shares to be listed for trading on The Nasdaq SmallCap Market as promptly as
possible but no later than the effective date of the Registration Statement
referred to in Section 5.1.  The Company further agrees, if the Company applies
to have the Common Stock traded on any other principal stock exchange or market,
that it will include in such application the Underlying Shares and will take
such other action as is necessary to cause the Underlying Shares to be listed on
such other exchange or market concurrently with any other Common Stock.



5.4Exchange Act Registration.  The Company will
cause its Common Stock to continue to be registered under Section 12(b) or 12(g)
of the Exchange Act, will comply in all respects with its reporting and filing
obligations under the Exchange Act, and will not take any action or file any
document (whether or not permitted by the Exchange Act or the rules and
regulations thereunder) to terminate or suspend such registration or to
terminate or suspend its reporting and filing obligations under the Exchange
Act.  The Company will take all action necessary to continue the listing and
trading of its Common Stock on The Nasdaq SmallCap Market and will comply in all
respects with the Company's reporting, filing and other obligations under the
bylaws or rules of the NASD and The Nasdaq SmallCap Market.



5.5Legends.  The Underlying Shares and
certificates evidencing the same shall at all times be free of legends (except
as provided in Section 6.1 below), "stop transfers," "stock transfer
restrictions" or other restrictions, upon the effectiveness of the Registration
Statement.



5.6Transfer Agent Instructions.  The Company
covenants and agrees that, promptly following execution and delivery of this
Agreement, it shall issue irrevocable instructions (the "Irrevocable Transfer
Agent Instructions") to its transfer agent for the Common Stock, and any
subsequent transfer agent, such instructions to be in form and substance
reasonably acceptable to the Subscribers, to facilitate trades of the Underlying
Shares and to permit the Subscribers to timely deliver within any applicable
settlement period certificates representing such shares in connection with any
transfer or disposition of the Underlying Shares.  The Company further covenants
and agrees that, except as otherwise required by law, no instruction, other than
the Irrevocable Transfer Agent Instructions, will be given by the Company to its
transfer agent and that the Underlying Shares shall otherwise be freely
transferable on the books and records of the Company as and to the extent
provided in this Agreement and the Registration Rights Agreement.  Each of the
Subscribers and the Company acknowledge and agree that their respective
obligations pursuant to this Section 5.6 are subject to compliance by each of
them with applicable securities laws.  The Company covenants that it will use
its best efforts to cause the Company's transfer agent to deliver certificates
representing shares issued in connection with a transfer of Underlying Shares as
promptly as practicable but in no event later than three (3) business days after
delivery by a Subscriber of all required documentation in respect of such
transfer to both the Transfer Agent and the Company as required pursuant to
Paragraphs 7 and 8 of the Certificate.  The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the
Subscribers by vitiating the intent and purpose of the transaction contemplated
hereby.  Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Section 5.6 will be inadequate and agrees,
in the event of a breach or threatened breach by the Company of the provisions
of this Section 5.6, that the Subscribers shall be entitled, in addition to all
other available remedies, to an injunction restraining any breach and requiring
immediate issuance and transfer, without the necessity of showing economic loss
and without any bond or other security being required.



5.7Corporate Existence.  So long as any Subscriber
beneficially owns any Preferred Stock or Warrants, the Company shall maintain
its corporate existence.



5.8Use of Proceeds.  The Company shall use all the
proceeds received from the sale of the Securities pursuant to this Agreement for
general corporate purposes, including working capital and for the repayment of
the Company's borrowings, provided that the Company shall not use the
proceeds to redeem its equity or equity-equivalent securities.  Pending
application of the proceeds of this placement in the manner permitted hereby,
the Company will invest such proceeds in interest bearing accounts and/or short-
term, investment grade interest bearing securities.



5.9Rule 144A Information. The Company will (i)
make available, upon request, to any holder of Securities and any prospective
purchaser thereof designated by such a holder, upon the request of such holder
or prospective purchaser, the information required to be provided to such holder
or prospective purchaser by Rule 144A(d)(4) under the Securities Act and (ii)
update such information from time to time in order to prevent such information
from becoming false and misleading and will take such other actions as are
necessary to ensure that the safe harbor exemption from the registration
requirements of the Securities Act under Rule 144A is and will be available for
resales of the Preferred Stock and the Warrants Shares conducted in accordance
with Rule 144A.



5.10Notice of Adverse Change.  The Company will
notify the Subscribers promptly (but in any event within seven days) after
becoming aware of the existence of any condition or event which has had or is
likely to have a Material Adverse Effect.



5.11Dividends and Distributions.  Until the
delivery by the Company to the Subscribers of all of the shares of Common Stock
issuable upon conversion of the Preferred Stock or all sums of cash upon
redemption of the Preferred Stock, as applicable, such that after such delivery
upon any such conversion or redemption no more than 10% of the Preferred Stock
issued on the Closing Date remains outstanding, the Company shall not make or
fix a record date for the determination of holders of Common Stock or other
securities entitled to receive a dividend or other distribution (special or
otherwise) or declare a cash dividend or other distribution payable in cash or
property of the Company.



5.12Filing of Current Report on Form 8-K.  On or
before the second business day following any Closing Date, the Company shall
file with the SEC a Current Report on Form 8-K describing the terms of the
transaction consummated at the Closing.



5.13Form D.  The Company agrees to file one or
more Form D's with respect to the Securities as required under Regulation D and
to provide a copy thereof to the Subscribers promptly after each such
filing.



5.14Integration.  The Company shall not sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that would be
integrated with the offer or sale of the Securities in a manner that would
require the registration under the Securities Act of the sale of any or all of
such Securities to any Subscriber.



5.15Shareholder Approval.  After the Company-
Directed Period (as defined in the Certificate), the Company shall provide each
stockholder entitled to vote at the next meeting of stockholders of the Company,
which meeting shall occur on or before the  date which is 90 days after the
Proxy Statement Triggering Date (as defined below) (the "Stockholder Meeting
Deadline"), a proxy statement soliciting each such stockholder's affirmative
vote at such stockholder meeting for approval of the Company's issuance of all
of the Securities as described in this Agreement, and the Company shall use its
best efforts to (i) solicit its stockholders' approval of such issuance of the
Securities and (ii) cause the Board of Directors of the Company to recommend to
the stockholders that they approve such proposal.  If the Company fails to hold
a meeting of its stockholders by the Stockholder Meeting Deadline, then, as
partial relief (which remedy shall not be exclusive of any other remedies
available at law or in equity), the Company shall pay to each holder of shares
of Preferred Stock an amount in cash per share of Preferred Stock equal to the
product of (i) $1,000; multiplied by (ii) 0.02; multiplied by (iii) the quotient
of (x) the number of days after the Stockholder Meeting Deadline that a meeting
of the Company's stockholders is not held, divided by (y) 30.  The Company shall
make the payments referred to in the immediately preceding sentence within five
days of the earlier of (I) the holding of the meeting of the Company's
stockholders, the failure of which resulted in the requirement to make such
payments, and (II) the last day of each 30-day period beginning on the
Stockholder Meeting Deadline.  In the event the Company fails to make such
payments in a timely manner, such payments shall bear interest at the rate of
2.0% per month (pro rated for partial months) until paid in full.  As used
herein, "Proxy Statement Triggering Date" shall mean the first date after the
end of the Company-Directed Period on which the sum of (A) the number of
Underlying Shares issued and (B) the number of Underlying Shares issuable upon
conversion of all the outstanding shares of Preferred Stock based on the
Conversion Price (as defined in the Certificate), and upon exercise of all the
outstanding Warrants based on the Warrant Price (as defined in the Warrants) in
effect on the date of such determination (without regard to any limitation upon
the conversion of any shares of Preferred Stock or exercise of Warrants), equals
or exceeds 15% of the number of shares of Common Stock issued and outstanding
immediately prior to the Initial Closing Date.



5.16Exclusivity.  The Company shall not issue and
sell any shares of Preferred Stock to any person or entity other than the
Subscribers pursuant to this Agreement other than with the prior written consent
of each of the Subscribers.



5.17Right of First Refusal.  If, during the period
commencing on the Initial Closing Date and ending 180 days thereafter, the
Company proposes to issue or sell any of its equity or debt securities or any
Derivative Securities (other than (i) securities issued or sold pursuant to a
firm commitment underwritten public offering by the Company, (ii) securities
issued or sold in connection with a merger or consolidation or sale of all or
substantially all of the Company's assets, (iii) merger or acquisition in
which the purchase price is paid in whole or in part in securities of the
Company, or (iv) securities issued or sold to a Strategic Partner (as defined
below), whether singly or together with other securities, then the Company shall
give written notice (the "Proposal Notice") to the Subscribers of such proposed
issuance, specifying the terms and conditions thereof in reasonable detail, and
each Subscriber shall have the right, exercisable by written notice delivered
within thirty (30) days of the date of receipt by the Subscriber of the Proposal
Notice, to subscribe for and purchase all (or such lesser portion as the
Subscriber shall specify in writing) of the Common Stock or other securities
proposed to be issued, on terms and conditions no less favorable to the
Subscriber than those specified in the Proposal Notice.  This Section 5.17 shall
not apply to (x) options or other securities issued to employees, directors,
consultants, or officers of the Company as compensation or (y) warrants with a
fixed exercise price and no reset provisions issued to a bank or other financial
institution in connection with the issuance of non-convertible debt securities,
or the entering into of a credit facility, a lease financing facility or other
lending facility.  A "Strategic Partner" shall mean an entity which is issued
securities of the Company in connection with a significant commercial
transaction or relationship with the Company which is directly related to the
Company's business and is approved by the Board of Directors.



5.18Transactions With Affiliates. So long as
(i) any shares of Preferred Stock or Warrants are outstanding or (ii) any
Subscriber owns Underlying Shares with a market value of at least $500,000 the
Company shall not, and shall cause each Subsidiary not to, enter into, amend,
modify or supplement, or permit any Subsidiary to enter into, amend, modify or
supplement, any agreement, transaction, commitment or arrangement with any of
the Company's or any Subsidiary's officers, directors, persons who were officers
or directors at any time during the previous two years, stockholders who
beneficially own 5% or more of the Common Stock, or Affiliates or with any
individual related by blood, marriage or adoption to any such individual or with
any entity in which any such entity or individual owns a 5% or more beneficial
interest (each, a "Related Party"), except for (a) customary employment
arrangements and benefit programs on reasonable terms, (b) any agreement,
transaction, commitment or arrangement which is approved by a majority of the
disinterested directors of the Company or (c) any agreement, transaction,
commitment or arrangement on an arms-length basis on terms no less favorable
than terms which would have been obtainable from a person other than such
Related Party.  For purposes hereof, any director who is also an officer of the
Company or any Subsidiary shall not be a disinterested director with respect to
any such agreement, transaction, commitment or arrangement.  "Affiliate" for
purposes hereof means, with respect to any person or entity, another person or
entity that, directly or indirectly, (i) has a 5% or more equity interest
in that person or entity, (ii) has 5% or more common ownership with that
person or entity, (iii) controls that person or entity, or (iv) shares
common control with that person or entity.  "Control" or "Controls" for purposes
hereof means that a person or entity has the power, direct or indirect, to
conduct or govern the policies of another person or entity.



5.19Credit Facility.  The Company at all times
shall (i) have a cash and cash equivalent balance of at least $5.0 million as
shown on the Company's quarterly and annual financial statements or (ii) have in
full force and effect an asset based loan facility with a bank or other
financial institution which permits borrowings by the Company in excess of $5.0
million.






6.Legends; Subsequent Transfer of Securities;
Denominations


6.1Legend.  The Company will issue one or more
certificates evidencing the Preferred Stock and the Warrants in the name of the
Subscriber and in such number of shares to be specified by such Subscriber prior
to (or from time to time subsequent to) the applicable Closing.  The Preferred
Stock, the Warrants and any shares of Common Stock issued upon conversion
thereof, will bear the following legend (the "Legend"):


THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
SOLD OR OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.  





Following the effectiveness of the Registration
Statement, the Company will issue certificates representing the Securities
without the Legend to any transferee other than holders who are "affiliates" of
the Company (as such term is defined under the Securities Act), promptly upon
request, if (i) the holder thereof is permitted to dispose of such Securities
pursuant to Rule 144(k) under the Securities Act, (ii) the Securities are sold
to a purchaser or purchasers in a transaction exempt from registration under the
Securities Act, as evidenced by an opinion of counsel to the transferor
delivered and reasonably satisfactory to the Company or (iii) the
Securities are sold to a purchaser or purchasers pursuant to an effective
registration statement and the prospectus delivery requirements under the
Securities Act are met.



6.2Subscriber's Compliance.  Nothing in this
Section 6 shall affect in any way the Subscribers' obligations and agreement to
comply with all applicable securities laws upon resale of the Securities.



6A.Payment Set Aside



To the extent that the Company makes a payment or
payments to any Subscriber hereunder or pursuant to the Registration Rights
Agreement or the Certificate or any Subscriber enforces or exercises its rights
hereunder or thereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action) by the court of competent jurisdiction in a final non-
appealable judgment, then to the extent of any such restoration the obligation
or part thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or set-off had not occurred.






7.Governing Law; Jurisdiction



This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without regard to
principles of conflicts of law or choice of law, except for matters arising
under the Securities Act or the Exchange Act which matters shall be construed
and interpreted in accordance with such laws.  The Company and the Subscribers
hereby agree that all actions or proceedings arising directly or indirectly from
or in connection with this Agreement shall be litigated only in the Supreme
Court of the State of New York or the United States District Court for the
Southern District of New York located in New York County, New York.  The Company
and each Subscriber consents to the jurisdiction and venue of the foregoing
courts and consent that any process or notice of motion or other application to
either of said courts or a judge thereof may be served inside or outside the
State of New York or the Southern District of New York by registered mail,
return receipt requested, directed to the such party at its address set forth in
this Agreement (and service so made shall be deemed complete five (5) days after
the same has been posted as aforesaid) or by personal service or in such other
manner as may be permissible under the rules of said courts.  The parties hereto
hereby waive any right to a trial by jury in connection with any litigation
pursuant to this Agreement and the transactions contemplated hereby.  






8.Assignment; Entire Agreement; Amendment



8.1Assignment.  Neither this Agreement nor any
rights hereunder may be assigned by either party without the prior written
consent of the other party hereto;  provided, however, any
Subscriber may assign its rights under this Agreement to an affiliate of the
Subscriber who agrees to be bound by the terms hereof.  To the extent that any
Subscriber assigns this Agreement with the prior written consent of the Company
or to an affiliate of the Subscriber, the provisions of this Agreement, the
Certificate and the Registration Rights Agreement shall inure to the benefit of,
and be enforceable by, any transferee of any of the Securities purchased by the
Subscriber hereunder with respect to the Securities held by such person.



8.2Entire Agreement; Amendment.  This Agreement,
the Certificate, the Registration Rights Agreement, the Warrants and the other
documents delivered pursuant hereto and thereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof, and no party shall be liable or bound to any other party in
any manner by any warranties, representations or covenants except as
specifically set forth in this Agreement or therein.  Except as expressly
provided in this Agreement, neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written instrument
signed by the party against whom enforcement of any such amendment, waiver,
discharge or termination is sought.






9.Publicity



The Company agrees that it will not disclose, and
will not include in any public announcement, the name or any information in
respect of the transactions contemplated herein, including, without limitation,
the names of the Subscribers, without the applicable Subscriber's prior written
consent, except that nothing herein shall prevent or impede the right of the
Company to make such disclosure as is required by law or applicable regulation,
to the extent that the Company determines in good faith that it is legally
obligated to do so;  provided, however, the Company shall file
with the SEC Current Reports on Form 8-K pursuant to Section 5.12 herein.
Except as may be required by law, the Company and the Subscribers shall consult
with each other before issuing any press release or otherwise making any public
statements with respect to this Agreement and shall not issue any such press
release or make any such public statement prior to such consultation.






10.Notices, Etc.; Expenses, Indemnity



10.1Notices.  Any notice, demand or request
required or permitted to be given by either the Company or the Subscribers
pursuant to the terms of this Agreement shall be in writing and shall be deemed
given when delivered personally or by facsimile, with a hard copy to follow by
two day courier, addressed to the parties at the addresses of the parties set
forth at the end of this Agreement or such other address as a party may request
by notifying the other in writing.  Copies of notices to the Subscribers shall
be sent to Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New
York 10038-4982, Attention: James R. Tanenbaum, facsimile no.: (212) 806-6006.
Copies of notices to the Company shall be sent to Orrick, Herrington &
Sutcliffe LLP, Old Federal Reserve Bank Building, 400 Sansome Street, San
Francisco, California 94111, Attention: Richard Grey, facsimile no.: (415) 773-
5759.



10.2Expenses.  The Company shall reimburse the
Subscribers for their respective reasonable expenses and fees in connection with
this Agreement, which amount shall be withheld by the Subscribers from the
purchase price, in an amount not to exceed $35,000, pursuant to the Escrow
Agreement.



10.3Indemnification.  Each party shall indemnify
the other against any loss, cost or damages (including reasonable attorney's
fees and expenses) incurred as a result of such parties' breach of any
representation, warranty, covenant or agreement in this Agreement.  






11.Counterparts



This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.  






12.Survival; Severability



The representations, warranties, covenants and
agreements of the parties hereto shall survive the Closing notwithstanding any
due diligence investigation conducted by or on behalf of the Subscriber.  In the
event that any provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision; provided
that no such severability shall be effective if it materially changes the
economic benefit of this Agreement to any party.  






13.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.  





14.Placement Agent



The Company acknowledges that it has engaged the
Placement Agent as a placement agent in connection with the sale of the
Securities. The Company shall be responsible for the payment of any placement
agent's fees or brokers' commissions relating to or arising out of the
transactions contemplated hereby.  The Company shall pay, and hold each
Subscriber harmless against, any liability, loss or expense (including, without
limitation, attorneys' fees and out of pocket expenses) arising in connection
with any such claim.





[Remainder of Page Intentionally Left Blank]



IN WITNESS WHEREOF, the Company and the Subscribers have
caused this Agreement to be executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.


	
COMPANY
	
SUBSCRIBERS

	 	 
	
CENTURA SOFTWARE CORPORATION
	
LEONARDO, L.P.

	 	 
	

By:   /s/ Richard Lucien
	

By:  ANGELO, GORDON & CO., L.P.

	
Name:  Richard Lucien

Title:  Chief Financial Officer
	
its General Partner

	
Address:975 Island Drive

Redwood Shores, California 94065

Attention:  Chief Financial Officer

Telephone: (650) 596-3400

Facsimile: (650) 596-4334





	
By: /s/ Michael L. Gordon

Name:  Michael L. Gordon

Title:  Chief Operating Officer


Address:c/o Angelo, Gordon & Co., L.P.

245 Park Avenue, 26th Floor

New York, New York 10167

Attention:  Gary Wolf or Ari Storch

Telephone: (212) 692-2035

Facsimile: (212) 692-6449



	 	

 

	 	
PECONIC FUND, LTD.


By:  RAMIUS CAPITAL GROUP, LLC

its Investment Adviser

	 	 
	 	
By: /s/ Jeffrey M. Solomon

Name:  Jeffrey M. Solomon

Title:  Principal


Address:  c/o Ramius Capital Group, LLC

757 Third Avenue, 27th Floor

New York, New York  10017

Attention:  Jeffrey M. Solomon

Andrew Strober

Telephone: (212) 845-7917

Facsimile: (212) 845-7999






 

Schedule I



 

Subscribers



	
Name and Address of Subscriber
	
Number of Initial Shares to be purchased:
	
Number of Warrants to be purchased:
	
Aggregate purchase price:

	
Leonardo, L.P.
	
8,000
	
137,457
	
$8,000,000

	
Peconic Fund, Ltd.
	
4,500
	
  77,319
	
$4,500,000

	
Total
	
12,500
	
214,776
	
$12,500,000

	 	
 
	
 
	
 







 

 

EXHIBIT A

FORM OF CERTIFICATE OF DESIGNATIONS



 

 

EXHIBIT B

FORM OF WARRANT



 

EXHIBIT C



FORM OF OPINION



EXHIBIT D

FORM OF REGISTRATION RIGHTS AGREEMENT



 

EXHIBIT E



FORM OF ESCROW AGREEMENT