<PAGE>

                                UNITED STATES 
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                                 ___________

                                  FORM 10-Q

(Mark One)

/X/  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
     EXCHANGE ACT OF 1934
     FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998

                                      OR

//   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     FOR THE TRANSITION PERIOD        TO

                           Commission file number: 

                         CENTURA SOFTWARE CORPORATION
            (Exact name of registrant as specified in its charter)

                  CALIFORNIA                             94-2874178
       (State or other jurisdiction of                (I.R.S. Employer
        incorporation or organization)             Identification Number)
 975 ISLAND DRIVE, REDWOOD SHORES, CALIFORNIA               94065
   (Address of principal executive offices)              (Zip Code)

      Registrant's telephone number, including area code: (650) 596-3400

         Securities registered pursuant to Section 12(b) of the Act:
                                     NONE

         Securities registered pursuant to section 12(g) of the Act:
                    COMMON STOCK, $.01 PAR VALUE PER SHARE

     Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.

                          Yes        No   X
                              -----     -----

     As of October 31, 1998, there were 29,598,932 shares of the Registrant's 
Common Stock outstanding.

<PAGE>


                        CENTURA SOFTWARE CORPORATION
             FORM 10-Q for the Quarter Ended September 30, 1998

                                    INDEX
<TABLE>
<CAPTION>
                                                                        PAGE
                                                                       NUMBER
                                                                       ------
<S>                                                                    <C>
PART I  FINANCIAL INFORMATION
        Item 1.      Financial Statements and Supplementary Data
                     a)   Condensed consolidated balance sheets at 
                          September 30, 1998 and December 31, 1997 . . .   1
                     b)   Condensed consolidated statements of 
                          operations for the three months and nine 
                          months ended September 30, 1998 and 1997 . . .   2
                     c)   Condensed consolidated statements of cash 
                          flows for the nine months ended September 
                          30, 1998 and 1997  . . . . . . . . . . . . . .   3
                     d)   Notes to condensed consolidated financial 
                          Statements . . . . . . . . . . . . . . . . . .   4
        Item 2.      Management's Discussion and Analysis of 
                     Financial Condition and Results of Operations . . .   8
PART II OTHER INFORMATION
        Item 1.      Legal Proceedings . . . . . . . . . . . . . . . . .  17
        Item 2.      Changes in Securities and Use of Proceeds . . . . .  17
        Item 3.      Defaults in Senior Securities . . . . . . . . . . .  17
        Item 4.      Submission of Matters to a Vote of Security 
                     Holders . . . . . . . . . . . . . . . . . . . . . .  17
        Item 5.      Other Information . . . . . . . . . . . . . . . . .  17
        Item 6.      Exhibits and Reports on Form 8-K. . . . . . . . . .  18
</TABLE>
<PAGE>

                                  PART I 
                           FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                        CENTURA SOFTWARE CORPORATION
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                                (Unaudited)
                   (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                 SEPTEMBER 30,      DECEMBER 31,
                                                                                     1998              1997
                                                                                 -------------      ------------
<S>                                                                              <C>                <C>
                                   ASSETS
Current Assets:
   Cash and cash equivalents...................................................    $  7,728          $  3,974 
   Accounts receivable, less allowances of $1,512 and $1,621...................      13,106            11,744 
   Inventory...................................................................         145               259 
   Other current assets........................................................       3,421             3,089 
                                                                                   --------          --------
     Total current assets......................................................      24,400            19,066 
Property and equipment, at cost, net of accumulated depreciation...............       2,776             3,511 
Capitalized software, at cost, net of accumulated amortization.................       1,824             2,573 
Long-term investments..........................................................       1,377             1,263 
Other assets...................................................................       1,546             1,787 
                                                                                   --------          --------
     Total assets..............................................................    $ 31,923          $ 28,200 
                                                                                   --------          --------
                                                                                   --------          --------

                  LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
   Subordinated Notes Payable..................................................    $     --          $ 10,000 
   Accounts payable............................................................       3,609             4,244 
   Accrued compensation and related expenses...................................       1,564             1,521 
   Short-term borrowings.......................................................       3,996             1,581 
   Other accrued liabilities...................................................       2,200             5,334 
   Deferred revenue............................................................      12,816            14,618 
                                                                                   --------          --------
     Total current liabilities.................................................      24,185            37,298 
Other long-term liabilities....................................................         856               856 
                                                                                   --------          --------
          Total liabilities....................................................    $ 25,041          $ 38,154 

Shareholders' Equity (Deficit):
     Preferred stock, no par value; 2,000 shares authorized; none issued.......          --                -- 
     Common stock, par value $.01 per share; 60,000 shares authorized;
     29,599 shares 15,784 shares issued and outstanding........................      85,701            70,636 
     Cumulative translation adjustment.........................................        (552)             (484)
     Accumulated deficit.......................................................     (78,267)          (80,106)
                                                                                   --------          --------
          Total shareholders' equity (deficit).................................       6,882            (9,954)
                                                                                   --------          --------
          Total liabilities and shareholders' equity (deficit).................    $ 31,923          $ 28,200 
                                                                                   --------          --------
                                                                                   --------          --------
</TABLE>

  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED CONSOLIDATED 
                           FINANCIAL STATEMENTS.


                                     1
<PAGE>

                        CENTURA SOFTWARE CORPORATION

              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Unaudited)
                   (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                              THREE MONTHS ENDED   NINE MONTHS ENDED
                                                                              ------------------   -----------------
                                                                                 SEPTEMBER 30,       SEPTEMBER 30,
                                                                              ------------------   -----------------
                                                                               1998       1997      1998      1997
                                                                              -------    -------   -------   -------
<S>                                                                           <C>        <C>       <C>       <C>
Net Revenues:
   Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    $ 8,811    $ 9,371   $25,377   $30,675          
   Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      5,310      4,327    14,563    12,727
                                                                              -------    -------   -------   -------
     Net revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . .     14,121     13,698    39,940    43,402

Cost of revenues:
   Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1,370        906     3,556     3,573
   Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1,079      1,868     3,241     6,259
                                                                              -------    -------   -------   -------
     Cost of revenues. . . . . . . . . . . . . . . . . . . . . . . . . . .      2,449      2,774     6,797     9,832
                                                                              -------    -------   -------   -------
     Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . . . . .     11,672     10,924    33,143    33,570

Operating expenses:
   Sales and marketing . . . . . . . . . . . . . . . . . . . . . . . . . .      7,178      5,964    19,945    19,974
   Research and development. . . . . . . . . . . . . . . . . . . . . . . .      1,674      2,512     4,574     7,933
   General and administrative. . . . . . . . . . . . . . . . . . . . . . .      1,786      1,694     5,294     5,152
   Restructuring Expense . . . . . . . . . . . . . . . . . . . . . . . . .        -          563       -         563
   Acquisition expense . . . . . . . . . . . . . . . . . . . . . . . . . .        -          -         -         530
                                                                              -------    -------   -------   -------
     Total operating expenses. . . . . . . . . . . . . . . . . . . . . . .     10,638     10,733    29,813    34,152
                                                                              -------    -------   -------   -------
      Operating income (loss) . . . . . . . . . . . . . . . . . . . . . . .     1,034        191     3,330      (582)

Other income (expense):
   Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . .        110         90       249       186
   Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . .       (113)      (293)     (428)     (717)
   Imputed value of warrants issued in connection with debt conversion . .        -          -        (990)       -  
   Foreign currency gain (loss). . . . . . . . . . . . . . . . . . . . . .        163        132      (118)     (521)
                                                                              -------    -------   -------   -------
Income (loss) before income taxes. . . . . . . . . . . . . . . . . . . . .      1,194        120     2,043    (1,634)
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . .         90         10       204        45
                                                                              -------    -------   -------   -------
Net income (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . . .    $ 1,104    $   110   $ 1,839   $(1,679)
                                                                              -------    -------   -------   -------
                                                                              -------    -------   -------   -------
Basic net income (loss) per share. . . . . . . . . . . . . . . . . . . . .    $  0.04    $  0.01   $  0.07   $ (0.11)
                                                                              -------    -------   -------   -------
                                                                              -------    -------   -------   -------
Basic weighted average common shares . . . . . . . . . . . . . . . . . . .     29,599     15,464    26,696    15,327
                                                                              -------    -------   -------   -------
                                                                              -------    -------   -------   -------
Diluted net income (loss) per share. . . . . . . . . . . . . . . . . . . .    $  0.04    $  0.01   $  0.07   $ (0.11)
                                                                              -------    -------   -------   -------
                                                                              -------    -------   -------   -------
Diluted weighted average common shares . . . . . . . . . . . . . . . . . .     29,714     16,149    27,191   15,327 
                                                                              -------    -------   -------   -------
                                                                              -------    -------   -------   -------
</TABLE>

  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED CONSOLIDATED
                           FINANCIAL STATEMENTS.

                                     2
<PAGE>
                        CENTURA SOFTWARE CORPORATION

              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (Unaudited)
                              (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                              NINE MONTHS ENDED
                                                                                SEPTEMBER 30,
                                                                              -----------------
                                                                               1998      1997
                                                                              -------   -------
<S>                                                                           <C>       <C>
Cash flows from operating activities:
   Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . .    $ 1,839   $(1,679)
   Adjustments to reconcile net income (loss) to net cash provided by 
     (used in) operating activities:
     Depreciation and amortization . . . . . . . . . . . . . . . . . . . .      2,666     3,913 
     Loss on disposal of fixed assets. . . . . . . . . . . . . . . . . . .        327        -- 
     Provision for doubtful accounts, sales returns and allowances . . . .       (109)       62 
     Issuance of stock warrants. . . . . . . . . . . . . . . . . . . . . .        990       102 
   Changes in assets and liabilities:
     Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . .     (1,253)    4,644 
     Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        114        -- 
     Other current assets. . . . . . . . . . . . . . . . . . . . . . . . .       (332)     (773)
     Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . .        146      (229)
     Accounts payable and accrued liabilities. . . . . . . . . . . . . . .     (1,549)   (2,105)
     Deferred revenue. . . . . . . . . . . . . . . . . . . . . . . . . . .     (1,802)   (6,367)
     Accrued litigation expense. . . . . . . . . . . . . . . . . . . . . .         --         9 
     Other long-term liabilities . . . . . . . . . . . . . . . . . . . . .         --       392 
                                                                              -------   -------
       Net cash provided by (used in) operating activities . . . . . . . .      1,037    (2,031)


Cash flows from investing activities:
   Maturities of investments . . . . . . . . . . . . . . . . . . . . . . .         --     2,065 
   Purchase of investments . . . . . . . . . . . . . . . . . . . . . . . .       (114)       -- 
   Acquisitions of property and equipment. . . . . . . . . . . . . . . . .       (908)   (3,067)
   Capitalization of software costs. . . . . . . . . . . . . . . . . . . .       (428)     (639)
   Proceeds from sale of property and equipment. . . . . . . . . . . . . .         --       462 
   Capitalization of intangibles and other assets. . . . . . . . . . . . .        (78)     (179)
                                                                              -------   -------
       Net cash used in investing activities . . . . . . . . . . . . . . .      1,528    (1,358)


Cash flows from financing activities:
   Repayment of note payable . . . . . . . . . . . . . . . . . . . . . . .         --      (180)
   Proceeds from short-term borrowings . . . . . . . . . . . . . . . . . .      2,415        -- 
   Proceeds from issuance of common stock, net . . . . . . . . . . . . . .      1,898       616 
                                                                              -------   -------
       Net cash provided by financing activities . . . . . . . . . . . . .      4,313       436 


Effect of exchange rate changes on cash and cash equivalents . . . . . . .        (68)      109 
                                                                              -------   -------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . .      3,754    (2,844)
Cash and cash equivalents at beginning of period . . . . . . . . . . . . .      3,974     6,669 
                                                                              -------   -------
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . .    $ 7,728   $ 3,825 
                                                                              -------   -------
                                                                              -------   -------
</TABLE>

  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED CONSOLIDATED
                            FINANCIAL STATEMENTS.


                                      3
<PAGE>

                        CENTURA SOFTWARE CORPORATION

            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                (Unaudited)


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     METHOD OF PREPARATION.  The condensed consolidated balance sheet as of 
September 30, 1998, the condensed consolidated statements of operations for 
the three and nine month periods ended September 30, 1998 and 1997, and cash 
flows for the nine month periods ended September 30, 1998 and 1997 have been 
prepared by Centura Software Corporation (the "Company") without audit. In 
the opinion of management, all adjustments necessary for a fair statement of 
the financial position, results of operations, and cash flows have been made 
for all periods presented. The financial data should be reviewed in 
conjunction with the audited financial statements and notes thereto included 
in the Company's Annual Report on Form 10-K for the year ended December 31, 
1997. The results of operations for the three and nine month periods ended 
September 30, 1998, are not necessarily indicative of the operating results 
to be expected for the full year. 

     The December 31, 1997 balance sheet was derived from audited financial 
statements, but does not include all disclosures required by generally 
accepted accounting principles. Such disclosures are contained in the 
Company's Annual Report on Form 10K.

     DERIVATIVE INSTRUMENTS.  During the first quarter of 1997, the Company 
recognized a loss of $731,000 attributed to foreign currency fluctuations on 
net assets denominated in foreign currencies. As a result, the Company enters 
into short-term forward contracts to reduce the risks associated with such 
foreign currency fluctuations. For the quarter ended September 30, 1998, the 
Company recognized a gain of $163,000 related to foreign currency 
fluctuations. At September 30, 1998, the Company had $5,778,000 in forward 
contracts denominated in five currencies; German Deutsche Marks, British 
Pound Sterling, Netherlands Guilders, Italian Lira and Australian Dollars. 
The carrying value of the instruments approximate their fair value as the 
Company records entries to "mark-to-market" the respective contracts on a 
monthly basis. The respective gains and losses from forward contracts are 
included in other income (expense). 

     NET INCOME (LOSS) PER SHARE.  Basic earnings per share is computed using 
the weighted average number of shares of common stock. Diluted earnings per 
share is computed using the weighted average number of shares of common 
stock, common equivalent shares outstanding during the period. Common 
equivalent shares consist of stock options and warrants (using the treasury 
stock method). Common equivalent shares are excluded from the computation if 
their effect is antidilutive.



                                      4
<PAGE>

     The following is a reconciliation of the computation for basic and 
diluted EPS:

<TABLE>
<CAPTION>
                                          THREE MONTHS        NINE MONTHS
                                             ENDED               ENDED 
                                          SEPTEMBER 30,       SEPTEMBER 30,
                                       -----------------   ------------------
                                         1998      1997      1998      1997
                                       -------   -------   -------    -------
                                        (in thousands, except per share data)
<S>                                    <C>       <C>       <C>        <C>
Net income (loss)                      $ 1,104   $   110   $ 1,839    $(1,679)
                                       -------   -------   -------    -------
Shares calculation

  Average basic shares outstanding      29,599    15,464    26,696     15,327 
Effect of dilutive securities Options      115       685       495         -- 
                                       -------   -------   -------    -------
Total shares used to compute
diluted earnings per share              29,714    16,149    27,191     15,327 
                                       -------   -------   -------    ------- 

Earnings (loss) per basic share        $  0.04   $  0.01   $  0.07    $ (0.11)
                                       -------   -------   -------    -------
                                       -------   -------   -------    -------
Earnings (loss) per diluted share      $  0.04   $  0.01   $  0.07    $ (0.11)
                                       -------   -------   -------    -------
                                       -------   -------   -------    -------
</TABLE>

     Antidilutive options and warrants to purchase 8,256,628 and 251,850 were 
outstanding at September 30, 1998 and September 30, 1997, respectively. Debt 
convertible to 4,382,017 shares of common stock was outstanding at September 
30, 1997 and was antidilutive.  No such debt was outstanding as of September 
30, 1998.

     REVENUE RECOGNITION.  In October 1997, the American Institute of 
Certified Public Accountants ("AICPA") issued Statement of Positions No 97-2 
("SOP 97-2"), "Software Revenue Recognition," which the Company has adopted 
for transactions entered into beginning January 1, 1998. SOP 97-2 provides 
guidance for recognizing revenue on software transactions and supersedes SOP 
91-1 "Software Revenue Recognition." 

     In March 1998, the AICPA issued Statement of Position No. 98-4 ("SOP 
98-4") "Deferral of the Effective Date of a Provision of SOP 97-2, Software 
Revenue Recognition". SOP 98-4 defers, for one year, the application of 
certain passages in SOP 97-2 which limit what is considered vendor-specific 
objective evidence ("VSOE") necessary to recognize revenue for software 
licenses on multiple-element arrangements when undelivered elements exist.  
Additional guidance is expected to be provided prior to adoption of the 
deferred provision of SOP 97-2. The Company will determine the impact, if 
any, the further guidance will have on current revenue recognition practices 
when issued. 

     COMPREHENSIVE INCOME (LOSS).  The Company has adopted Statement of 
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" 
(SFAS 130).  This Statement requires that all items recognized under 
accounting standards as components of comprehensive earnings be reported in 
an annual financial statement that is displayed with the same prominence as 
other annual financial statements. SFAS 130 also requires that an entity 
classify items of other comprehensive earnings by their nature in an annual 
financial statement. Other comprehensive earnings consist of foreign currency 
translation adjustments. Annual financial statements for prior periods will 
be reclassified, as required. The Company's total comprehensive earnings were 
as follows:

<TABLE>
<CAPTION>
                                         THREE MONTHS          NINE MONTHS
                                      ENDED SEPTEMBER 30,  ENDED SEPTEMBER 30,
                                      -------------------  -------------------
                                        1998       1997     1998        1997
                                      --------    -------  -------     -------
                                                   (in thousands)
<S>                                   <C>         <C>       <C>        <C>
Net income (loss)                      $1,104     $ 110     $1,839     $(1,679)
Other comprehensive loss (gain)            32      (101)        68        (109)
                                       ------     -----     ------     -------
Total comprehensive income (loss)      $1,136     $   9     $1,907     $(1,788)
                                       ------     -----     ------     -------
                                       ------     -----     ------     -------
</TABLE>


                                      5
<PAGE>

     RECENT ACCOUNTING PRONOUNCEMENTS.  In September 1997, the Financial 
Accounting Standards Board issued Statement of Financial Accounting Standards 
No. 131, "Disclosures About Segments of An Enterprise and Related 
Information" ("SFAS 131"). SFAS 131 revises information regarding the 
reporting of operating segments. It also establishes standards for related 
disclosures about products and services, geographic areas and major 
customers. The Company will adopt SFAS 131 for the fiscal year ending 
December 31, 1998 and does not expect such adoption to have a material effect 
on the consolidated financial statements. 

     In April 1998, the American Institute of Certified Public Accountants 
issued Statement of Position 98-1 "Accounting for the Costs of Computer 
Software Developed or Obtained for Internal Use" ("SOP 98-1").  SOP 98-1 
provides guidance on capitalization of the costs incurred for computer 
software developed or obtained for internal use. It also provides guidance 
for determining whether computer software is internal-use software and on 
accounting for the proceeds of computer software originally developed or 
obtained for internal use and then subsequently sold to the public.  The 
Company has not yet determined the impact, if any, of adopting this 
statement.  The disclosures prescribed by SOP 98-1 will be effective for the 
Company's consolidated financial statements for the fiscal year ending 
December 31, 1999.

     In June 1998, the Financial Accounting Standards Board (FASB) issued 
Statement No. 133, "Accounting for Derivative Instruments and Hedging 
Activities" (SFAS 133).  SFAS 133 establishes accounting and reporting 
standards for derivative instruments, embedded in other contracts, and for 
hedging activities. It requires that an entity recognize all derivatives as 
either assets or liabilities in the statement of financial position and 
measure those instruments at fair value.  The accounting for changes in the 
fair value of a derivative depends on the intended use of the derivative and 
the resulting designation.  The Company will adopt SFAS 133 in the first 
quarter of the fiscal year ending December 31, 2000 and has not yet evaluated 
the impact of adoption and its effects on the Company's results of 
operations, financial position, capital resources or liquidity.

     RECLASSIFICATIONS.  In order to conform to the condensed consolidated 
balance sheet and statement of cash flows for the nine months ended September 
30, 1998, certain reclassifications have been made to the condensed 
consolidated balance sheet at December 31, 1997 and statement of cash flows 
for the nine months ended September 30, 1997. 

2.   LITIGATION

     On September 17, 1997, Technology Venture (Software) Holdings Limited, 
formerly known as Eagerquest Investments Limited ("Eagerquest") filed suit 
against the Company in the United States District Court for the Central 
District of California alleging that the Company acted improperly with 
respect to its contract with Eagerquest for the distribution of the Company's 
products in the territories of Hong Kong and China and that the Company's 
actions illegally damaged Eagerquest. While the formal settlement document 
has not yet been signed, the Company has reached an agreement in principle 
with Eagerquest to resolve outstanding differences and to dismiss the 
lawsuit.  The Company does not believe this will have an adverse material 
affect on the Company's financial situation or business prospects.

     Other than the above, there are currently no material pending legal 
proceedings against the Company or any of its subsidiaries.  The Company 
operates in an environment, however, where litigation may occur in the course 
of its normal business operations.  In the complex and volatile industry in 
which the Company operates, disputes, litigation, regulatory proceedings and 
other actions are a necessary risk of doing business.  There can be no 
assurance that the Company will not participate in such legal proceedings and 
that the costs and charges will not have material adverse impact on the 
Company's future success.

3.   SHORT-TERM BORROWINGS

     In January 1998, the Company entered into a $5,000,000 asset based loan 
facility with Coast Business Credit, the "Facility."  The loan provides for 
borrowings of up to $5,000,000, secured by the Company's accounts receivable, 
combined with a $500,000 capital equipment facility.  The Facility bears 
interest at 1.75% above the Bank of America Reference Rate, and provides for 
the ability to reduce interest cost based on the achievement of certain 
financial covenants.  The Facility matures in January 2000 and provides for 
the ability to extend the agreement for one year at the option of the 
Company.  The facility replaces an accounts receivable factoring agreement 
entered into by the Company in June 1997.   As of September 30, 1998 there 
was $3,996,000 drawn against the $5,000,000 loan facility.

4.   CONVERSION OF NOTE PAYABLE 

     In February 1998, Computer Associates, Inc. ("CA"), and Newport 
Acquisition Company, LLP ("NAC") entered into a Note Purchase and Sale 
Agreement (with the Company's consent) and the Company and NAC entered into a 
Note Conversion Agreement (the "Agreements"). Under the terms of the 
Agreements, a promissory note, plus accrued interest, in


                                      6
<PAGE>

the amount of $12,251,000, payable to CA (the "CA Note") was acquired by NAC, 
and immediately converted into 11,415,094 shares of the Company's common 
stock (the "Shares").  In February 1998, in connection with the Agreements, 
the Company entered into a Warrant Purchase Agreement with CA wherein the 
Company sold and issued to CA, at an issuance price of $.001 per share, a 
warrant to purchase 500,000 shares of the Company's common stock.  The 
warrant is exercisable at $1.906 per share and expires on February 27, 2004. 
The warrants were valued at $300,000 using a risk-free rate of 5.5% and a 
volatility factor of 65% and the related charge is included in other income 
(expense) in the first quarter of 1998.

     Also, in consideration of services rendered in connection with the 
Conversion of Note Payable, the Company issued to Rochon Capital Group, Ltd. 
warrants to purchase 283,019 shares of the Company's common stock at an 
exercise price of $2.12 (the "Rochon Conversion Warrants"). The Rochon 
Conversion Warrants expire on February 27, 2003. The warrants were valued at 
$141,000.

     Included with the Note Conversion Agreement is an Investor Rights 
Agreement ("IRA") between the Company and NAC that carries certain 
anti-dilution rights for two years.   In June 1998, the Company and NAC 
entered into an agreement to amend the IRA.  The amendment included 
modifications to the IRA that limit NAC's anti-dilution rights related to 
certain transactions, including the grant of stock options to employees and 
shares that may be issued as consideration in connection with certain 
strategic transactions, such as, an acquisition, asset purchase, or license 
agreement.  In consideration for these modifications, the Company issued to 
NAC warrants to purchase up to 893,320 shares of common stock at an exercise 
price of $1.81 and up to 300,000 shares of common stock at an exercise price 
of $2.09, both expiring on June 11, 2003.  The warrants for the 893,320 
shares were valued at $393,800 by an independent specialty investment banking 
firm, using a modified Black Scholes method with a risk free rate of 5.51% 
and a volatility factor of 62.77%.  The warrants for the 300,000 shares were 
valued at $155,300 by an independent specialty investment banking firm, using 
a modified Black Scholes method with a risk-free rate of 5.48% and a 
volatility factor of 62.77%.  The related charges are included in other 
income (expense) in the second quarter of 1998.

5.   PRIVATE PLACEMENT

     In February 1998, pursuant to the terms of Stock Purchase Agreements, 
the Company completed a private placement of 2,330,191 shares of the 
Company's common stock (the "Private Placement"), resulting in gross proceeds 
to the Company of $2,470,000.  In connection with the Private Placement the 
Company issued warrants to purchase 582,548 shares of the Company's common 
stock.  The warrants are exercisable at $1.25 per share and expire on 
February 28, 2003.  Also, in consideration of services rendered in connection 
with the Private Placement, the Company issued to Rochon Capital Group, Ltd. 
warrants to purchase 71,698 shares of the Company's common stock at an 
exercise price of $2.12 (the "Rochon Private Placement Warrants"). The Rochon 
Private Placement Warrants expire on February 27, 2003.  The Company 
registered the foregoing shares and warrants under the Securities Act of 
1933, as amended on a Form S-3 declared effective on May 18, 1998.


                                      7
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
        RESULTS OF OPERATIONS

     This Quarterly Report on Form 10-Q contains certain forward-looking 
statements within the meaning of Section 27A of the Securities Act of 1933 
and Section 21E of the Securities Exchange Act of 1934. Actual results could 
differ materially from those projected in the forward-looking statements as a 
result of certain of the risk factors set forth below and elsewhere in this 
Quarterly Report on Form 10-Q. In evaluating the Company's business, 
prospective investors should carefully consider the following factors in 
addition to the other information presented in this report. 

     The following discussion should be read in conjunction with the 
unaudited condensed consolidated financial statements and notes thereto 
included in Part I--Item 1 of this Quarterly Report, and the audited 
consolidated financial statements and notes thereto, and Management's 
Discussion and Analysis of Financial Condition and Results of Operations 
included in the Company's Annual Report on Form 10-K for the year ended 
December 31, 1997.

Results of Operations:

     NET PRODUCT REVENUES.  Net product revenues consist of product shipments 
and license fees. Net product revenues decreased 6% to $8.8 million for the 
quarter ended September 30, 1998, from $9.4 million for the quarter ended 
September 30, 1997. Declines in Tools and Database product sales were 
partially offset by increases in the connectivity and reporting product 
sales. International sales accounted for $4.6 million or 52% and 
$5.6 million or 59% of net product revenues for the quarters ended September 
30, 1998 and 1997, respectively. The decline in international sales is 
primarily attributable to decreased sales in Europe and the Asia-Pacific 
region as compared with the third quarter of 1997.

     Net product revenues decreased 17% to $25.4 million for the nine months 
ended September 30, 1998, from $30.7 million for the nine months ended 
September 30, 1997. International sales accounted for $13.0 million or 51% 
and $19.2 million or 63% of net product revenues for the nine months ended 
September 30, 1998 and 1997, respectively. The decrease in international 
sales is primarily due to decreased sales in Europe.

     NET SERVICE REVENUES.  Net service revenues increased 23% to $5.3 
million for the quarter ended September 30, 1998, from $4.3 million for the 
quarter ended September 30, 1997. The increase was primarily due to increased 
sales of license maintenance support. International sales accounted for 51% 
and 50% of total net service revenues for the quarters ended September 30, 
1998 and 1997, respectively. Net service revenues were $14.6 million and 
$12.7 million for the nine months ended September 30, 1998 and 1997, 
respectively.  International sales accounted for 52% and 45% of total net 
service revenues for the nine months ended September 30, 1998 and 1997, 
respectively. 

     COST OF PRODUCT REVENUES.  Cost of product revenues includes the cost of 
production and the amortization of capitalized software. Cost of product 
revenues increased 51% to $1.4 million for the quarter ended September 30, 
1998, principally due to an increase in royalties expense as compared with 
$0.9 million in the 1997 third quarter.  Cost of product revenues remained 
relatively consistent at $3.6 million over the nine month period ended 
September 30, 1998 as compared with the same period in the prior year. Cost 
of product revenues as a percentage of product revenues increased to 16% from 
10% for the quarters ended September 30, 1998 and 1997, respectively. Cost of 
product revenues as a percentage of product revenues also increased to 14% 
from 12% for the nine months ended September 30, 1998 and 1997, respectively.

     In accordance with Statement of Financial Accounting Standards No. 86, 
"Accounting for the Costs of Computer Software to be Sold, Leased or 
Otherwise Marketed", the Company capitalizes internal development costs on a 
project when the technological feasibility of such project has been 
determined. The Company ceases capitalizing such expenses when the products 
derived from the project are released for sale. The capitalized costs are 
then amortized ratably over the useful life of the products, generally 
estimated to be two to three years. Amortization of capitalized software 
costs, which include the software purchased from third parties, were $373,000 
and $1,177,000 for the three and nine month periods ended September 30, 1998 
compared with $627,000 and $1,864,000 for the same periods in 1997, 
respectively. 

     COST OF SERVICE REVENUES.  Cost of service revenues consists primarily 
of personnel costs related to product license maintenance, training and 
technical support. Cost of service revenues decreased to $1.1 million from 
$1.9 million for the three month periods ended September 30, 1998 and 1997, 
respectively. For the nine month period ending September 30, 1998 and 1997, 
cost of services revenues were $3.2 million and $6.3 million, respectively.  
Cost of service revenues as a percentage of net service revenues were 20% and 
43% for the quarters ended September 30, 1998 and 1997, respectively, and 22% 
and 49% for the nine month period ended September 30, 1998 and 1997, 
respectively.  These decreases were due principally to a reduction of the 
Company's work force, outsourcing of front end telephone support, and the 
streamlining of operations which took effect in the third quarter of 1997.

                                      8
<PAGE>


     SALES AND MARKETING EXPENSES.  Sales and marketing expenses were $7.2 
million, or 51% of net revenues, for the quarter ended September 30, 1998, 
compared with $6.0 million, or 44% of net revenues, for the quarter ended 
September 30, 1997. For the nine month period ended September 30, 1998, sales 
and marketing expenses were $19.9 million, or 50% of net revenues, compared 
with $20.0 million or 46% of net revenues for the nine month period ended 
September 30, 1997.  The increase in sales and marketing expense as a 
percentage of net revenues is due to the Company's worldwide marketing 
efforts.

     RESEARCH AND DEVELOPMENT EXPENSES.  The table below sets forth gross 
research and development expenses, capitalized software development costs, 
and net research and development expenses in dollar amounts and as a 
percentage of net revenues for the periods indicated: 

<TABLE>
<CAPTION>
                                                            THREE MONTHS        NINE MONTHS
                                                               ENDED               ENDED
                                                            SEPTEMBER 30,       SEPTEMBER 30,
                                                          ----------------    ----------------
                                                           1998      1997      1998      1997
                                                          ------    ------    ------    ------
                                                                     (in thousands)
<S>                                                       <C>       <C>       <C>       <C>
Gross research and development expenses. . . . . . . .    $1,740    $2,697    $5,002    $8,572 
Capitalized internal software development costs. . . .       (66)     (185)     (428)     (639)
                                                          ------    ------    ------    ------
Net research and development expenses. . . . . . . . .    $1,674    $2,512    $4,574    $7,933 
                                                          ------    ------    ------    ------
                                                          ------    ------    ------    ------

As a percentage of net revenue
    Gross research and development expenses. . . . . .       12%       20%       13%       20%
    Net research and development expenses. . . . . . .       12%       18%       11%       18%
</TABLE>

     GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative 
expenses were $1.8 million and $1.7 million for the quarters ended September 
30, 1998 and 1997, respectively, and $5.3 million and $5.2 million for the 
nine month period ended September 30, 1998 and 1997, respectively. 

     OTHER INCOME (EXPENSE), NET.  Other income (expense), net is comprised 
of interest income, interest expense, and gains or losses on foreign currency 
transactions. For the quarter ended September 30, 1998 other income 
(expense) remained relatively consistent at $0.1 Million, and is primarily 
attributable to net gains on foreign currency transactions.

     For the nine month period ended September 30, 1998 other income 
(expense), net was $(1.3) million, compared to $(1.1) million for the nine 
month period ended September 30, 1997. The increased expense was primarily 
attributable to the imputed value of warrants of $1.0 million issued in 
connection with the Company's conversion of debt during the first quarter of 
1998, offset by a decrease in net interest expense of $0.4 million, and 
$0.4 million less of foreign currency losses due to the purchase of foreign 
currency forward contracts in the principal currencies in which the Company 
conducts business.

     PROVISION FOR INCOME TAXES.  The provision for income taxes was $0.1 
million for the quarter ended September 30, 1998 and was $0.2 million for the 
first nine month period of 1998, and was insignificant for the corresponding 
periods of 1997.  The provision primarily relates to foreign withholding 
taxes. Due to the availability of net operating loss carryforwards arising in 
prior years, no provision for U.S. income taxes was made for the three and 
nine month periods ended September 30, 1998 and 1997.

                                      9
<PAGE>

     YEAR 2000 ISSUE.  Background.  Some computers, software, and other 
equipment include programming code in which calendar year data is abbreviated 
to only two digits. As a result of this design decision, some of these 
systems could fail to operate or fail to produce correct results if "00" is 
interpreted to mean 1900, rather than 2000.  These problems are widely 
expected to increase in frequency and severity as the year 2000 approaches, 
and are commonly referred to as the "Millenium Bug" or "Year 2000 Problem".

     Assessment.  The Year 2000 Problem could affect computers, software, and 
other equipment used, operated, or maintained by the Company.  Accordingly, 
the Company is reviewing its internal computer programs and systems to ensure 
that the programs and systems will be Year 2000 compliant.  The Company 
presently believes that its computer systems will be Year 2000 compliant in a 
timely manner.  However, while the estimated cost of these efforts are not 
expected to be material to the Company's financial position or any year's 
results of operations, there can be no assurance to this effect.

     Software Sold to Consumers.  All current products developed by CENTURA 
are designed to record, store and process and present calendar dates 
occurring on or after January 1, 2000 with the same degree of accuracy that 
such products process dates occuring before such date.

     Internal Infrastructure.  The Company believes that it has identified 
substantially all of the major computers, software applications, and related 
equipment used in connection with its internal operations that must be 
modified, upgraded, or replaced to minimize the possibility of a material 
disruption to its business.  The Company has commenced the process of 
modifying, upgrading, and replacing major systems that have been identified 
as adversely affected, and expects to complete this process in a timely 
manner.

     Systems Other than Information Technology Systems.  In addition to 
computers and related systems, the operation of office and facilities 
equipment, such as fax machines, photocopiers, telephone switches, security 
systems, and other common devices may be affected by the Year 2000 Problem.  
The Company is currently assessing the potential effect of, and costs of 
remediating, the Year 2000 Problem on its office and facilities equipment.

     The Company estimates the total cost to the Company of completing any 
required modifications, upgrades, or replacements of these internal systems 
will not have a material adverse effect on the Company's business or results 
of operations.  This estimate is being monitored and will be revised as 
additional information becomes available.

     Suppliers.  The Company has initiated communications with third party 
suppliers of the major computers, software, and other equipment used, 
operated, or maintained by the Company to identify and, to the extent 
possible, to resolve issues involving the Year 2000 Problem.  However, the 
Company has limited or no control over the actions of these third party 
suppliers. Thus, while the Company expects that it will be able to resolve 
any significant Year 2000 Problems with these systems, there can be no 
assurance that these suppliers will resolve any or all Year 2000 Problems 
with these systems before the occurrence of a material disruption to the 
business of the Company or any of its customers. Any failure of these third  
parties to resolve Year 2000 problems with their systems in a timely manner 
could have a material adverse effect on the Company's business, financial 
condition, and results of operation.

     Disclaimer.  Management believes that it is not possible to determine 
with complete certainty that all Year 2000 Problems affecting the Company 
have been identified or corrected. The number of devices that could be 
affected and the interactions among these devices are simply too numerous. In 
addition, one cannot accurately predict how many Year 2000 Problem-related 
failures will occur, or the severity, duration, or financial consequences of 
these perhaps inevitable failures. The discussion of the Company's efforts, 
and management's expectations, relating to Year 2000 compliance are 
forward-looking statements. The Company's ability to achieve Year 2000 
compliance and the level of incremental costs associated therewith, could be 
adversely impacted by, among other things, the availability and cost of 
programming and testing resources, vendors' ability to modify proprietary 
software, and unanticipated problems identified in the ongoing compliance 
review.

                                      10
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES:

     At September 30, 1998, the Company had a working capital position of 
$0.2 million, including a liability for deferred revenues of $12.8 million. 
Excluding deferred revenues, working capital would have been $13 million.   
This represents an increase in working capital of $18.5 million from December 
31, 1997.  Net cash provided by operating activities for the nine months 
ended September 30, 1998 was $1.0 million, which resulted primarily from net 
income, depreciation and amortization, increases in accounts receivable and 
other assets, and reductions in deferred revenue and accounts payable and 
accrued liabilities. Cash used in investing activities totaled $1.5 million, 
which related primarily to the purchase of equipment and capitalization of 
software development costs. Cash provided by financing activities totaled 
$4.3 million, and related to an increase in short-term borrowings, and net 
proceeds from the issuance of common stock.

     At September 30, 1998 the Company had $5.8 million in unsecured foreign 
currency contracts, denominated in various currencies, as part of a program 
to hedge the financial exposure arising from foreign denominated monetary 
assets and liabilities.

     The deferred product and support revenues of $12.8 million at September 
30, 1998 reflects a delay in recognition of revenue in accordance with 
Generally Accepted Accounting Principles and requires minimal use of future 
resources of the Company.

     The Company believes that expected cash flows from operations and 
existing cash balances, will be sufficient to meet the Company's currently 
anticipated working capital and capital expenditure requirements for the next 
12 months. The Company may, however, choose to raise cash for operational or 
other needs sometime in the future.  If the Company needs further financing, 
there can be no assurance that it will be available on reasonable terms or at 
all.  Any additional equity financing will result in dilution to the 
Company's shareholders.

     The Company's capital requirements also may be affected by acquisitions 
of businesses, products and technologies that are complementary to the 
Company's business, which the Company may consider from time to time. The 
Company regularly evaluates such opportunities. Any such transaction, if 
consummated, may further reduce the Company's working capital or require the 
issuance of equity. 

FACTORS THAT MAY AFFECT FUTURE RESULTS:

     CHANGES IN STRATEGIC DIRECTION: RESTRUCTURING.  In efforts to stem 
losses and maximize return on the Company's core assets and technologies, the 
Company has restructured its operations and announced changes in strategic 
direction several times in recent financial periods.  The first of these 
changes, which began in December 1995, encompassed a change in the Company's 
name from Gupta Corporation to Centura Software Corporation and the 
identification of a flagship product bearing the name CENTURA.  In early 
1997, the Company refocused its marketing and sales efforts away from RDBMS 
and development tools products to a middleware connectivity product and a 
related Merger Agreement with Infospinner, Inc. ("InfoSpinner"). In the 
second half of 1997, however, the Company restructured and refocused 
operations on its core


                                      11
<PAGE>

competencies, products and technologies and severed its distribution 
arrangement with InfoSpinner. There can be no assurance that the 
restructuring efforts the Company has engaged in to date will be successful 
or that the Company will be able to sustain profitability on a quarterly or 
annual basis.  In addition, there can be no assurance that the Company's 
management will not deem it appropriate to undertake other major 
restructuring efforts or changes in strategic direction in the future or to 
what degree any of these efforts will result in improved operational 
performance, if at all.

     RECENT CHANGES IN SENIOR MANAGEMENT.  In the fourth quarter of 1997, the 
Company announced significant changes in senior management.  Such changes 
included the election and appointment of Scott R. Broomfield as Chief 
Executive Officer, the appointment of John W. Bowman as Chief Financial 
Officer, Kathy Lane as Senior Vice President of Marketing, and the election 
of Messrs. Jack King, Philip Koen and Earl Stahl to the Company's Board of 
Directors, and the retirement of Samuel M. Inman, III, Earl Stahl and Richard 
Gelhaus from their positions as officers of the Company.  In February 1998 
the Company announced the election of Messrs. William D. Nicholas and Peter 
Micciche to the Board of Directors and the appointment of Scott R. Broomfield 
to the position of Chairman & CEO.  There can be no assurance that the new 
management team will be successful in the execution of its objectives or that 
the successful execution of these objectives will result in improved 
operating results or financial position of the Company. 

     DEPENDENCE ON KEY PERSONNEL.  The Company's future performance is 
substantially dependent on the performance of its executive officers and key 
product development, technical, sales, marketing and management personnel.  
The Company does not have employment or non-competition agreements with any 
of its employees. The loss of the services of any executive officer or other 
key technical or management personnel of the Company for any reason could 
have a material adverse effect on the business, operating results and 
financial condition of the Company. 

     The future success of the Company also depends on its continuing ability 
to identify, hire, train, motivate and retain other highly qualified 
technical and managerial personnel.  Competition for such personnel is 
intense and there can be no assurance that the Company will be able to 
attract, assimilate or retain other highly qualified technical and managerial 
personnel in the future.  The inability to attract and retain the necessary 
technical and managerial personnel could have a material and adverse effect 
upon its business, operating results and financial condition.

     RECENT COMPANY LOSSES; FLUCTUATIONS IN QUARTERLY RESULTS.  The Company 
has experienced in the past and may in the future continue to experience 
significant fluctuations in quarterly operating results.  The Company 
reported a loss of $0.6 million for fiscal year 1997, a profit of $2.0 
million for 1996, and a loss of $44.1 million for 1995.  There can be no 
assurance that the restructuring efforts the Company has engaged in to date 
will be successful or that the Company will be able to sustain profitability 
on a quarterly or annual basis.  Many of the Company's product licensing 
arrangements are subject to revenue recognition on a per-unit deployed basis 
as the Company's deferred obligation to such customers is gradually 
extinguished.  Revenue recognition in such cases is therefore dependent upon 
the business activities of the Company's customers and the timely and 
accurate reporting of such activities to the Company, which makes 
predictability of the related revenue extremely uncertain. In addition, 
quarterly operating results of the Company will depend on a number of other 
factors that are difficult to forecast, including, general market demand for 
the Company's products; the size and timing of individual orders during a 
quarter; the Company's ability to fulfill such orders; introduction, 
localization or enhancement of products by the Company; delays in the 
introduction and/or enhancement of products by the Company and its 
competitors; market acceptance of new products; reviews in the industry press 
concerning the products of the Company or its competitors; software "bugs" or 
other product quality problems; competition and pricing in the software 
industry; sales mix among distribution channels; customer order deferrals in 
anticipation of new products; reduction in demand for existing products and 
shortening of product life cycles as a result of new product introductions; 
changes in operating expenses; changes in the Company's strategy; personnel 
changes; foreign currency exchange rates; mix of products sold; inventory 
obsolescence; product returns and rotations; and general economic conditions. 
Sales of the Company's products also may be negatively affected by delays in 
the introduction or availability of new hardware and software products from 
third parties.  The Company's financial results also may vary as a result of 
seasonal factors including year and quarter end purchasing and the timing of 
marketing activities, such as industry conventions and tradeshows.

     DILUTIVE AND POTENTIAL DILUTIVE EFFECT TO SHAREHOLDERS.  In February 
1998, Computer Associates, Inc. ("CA"), and Newport Acquisition Company, LLP 
("NAC") entered into a Note Purchase and Sale Agreement and the Company and 
NAC entered into a Note Conversion Agreement (the "Agreements").  Under the 
terms of the Agreements, a promissory note, plus accrued interest, in the 
amount of $12,251,000, payable to CA (the "CA Note") was acquired by NAC, and 
immediately converted into 11,415,094 shares of the Company's common stock 
(the "Shares"). In February 1998, in connection with the Agreements, the 
Company entered into a Warrant Purchase Agreement with CA wherein the Company 
sold and issued to CA, at an issuance price of $.001 per share, a warrant to 
purchase 500,000 shares of the Company's common stock.  The warrant is 
exercisable at $1.906 per share and expires on February 27, 2004. The 
warrants were valued at $300,000 using a risk-free rate of 5.5% and a 
volatility factor of 65% and the related charge is included in other income 
(expense) in the first quarter of 1998.

     Also, in consideration of services rendered in connection with the 
Conversion of Notes Payable, the Company


                                      12
<PAGE>

issued to Rochon Capital Group, Ltd. warrants to purchase 283,019 shares of 
the Company's common stock at an exercise price of $2.12 (the "Rochon 
Conversion Warrants"). The Rochon Conversion Warrants expire on February 27, 
2003. The warrants were valued at $141,000.

     Included with the Note Conversion Agreement is an Investor Rights 
Agreement ("IRA") between the Company and NAC that carries certain 
anti-dilution rights for two years.   In June 1998, the Company and NAC 
entered into an agreement to amend the IRA.  The amendment included 
modifications to the IRA that limit NAC's anti-dilution rights related to 
certain transactions, including the grant of stock options to employees and 
shares that may be issued as consideration in connection with certain 
strategic transactions, such as, an acquisition, asset purchase, or license 
agreement.  In consideration for these modifications, the Company issued to 
NAC warrants to purchase up to 893,320 shares of common stock at an exercise 
price of $1.81 and up to 300,000 shares of common stock at an exercise price 
of $2.09, both expiring on June 11, 2003.  The warrants for the 893,320 
shares were valued at $393,800 by an independent specialty investment banking 
firm, using a modified Black Scholes method with a risk free rate of 5.51% 
and a volatility factor of 62.77%.  The warrants for the 300,000 shares were 
valued at $155,300 by an independent specialty investment banking firm, using 
a modified Black Scholes method with a risk-free rate of 5.48% and a 
volatility factor of 62.77%.  The related charges are included in other 
income (expense) in the second quarter of 1998.

     Also in February 1998, pursuant to the terms of Stock Purchase 
Agreements, the Company completed a private placement of 2,330,191 shares of 
the Company's common stock (the "Private Placement"), resulting in gross 
proceeds to the Company of $2,470,000.  In connection with the Private 
Placement the Company issued warrants to purchase 582,548 shares of the 
Company's common stock.  The warrants are exercisable at $1.25 per share and 
expire on February 28, 2003.  Also, in consideration of services rendered in 
connection with the Private Placement, the Company issued to Rochon Capital 
Group, Ltd. warrants to purchase 71,698 shares of the Company's common stock 
at an exercise price of $2.12 (the "Rochon Private Placement Warrants"). The 
Rochon Private Placement Warrants expire on February 27, 2003.  The Company 
registered the foregoing shares and warrants under the Securities Act of 
1933, as amended on a Form S-3 declared effective on May 18, 1998.

     STOCK OPTION PLANS.  From time to time, the Company issues shares of 
common stock pursuant to its 1992 Employee Stock Purchase Plan and pursuant 
to options granted under its 1995 Incentive Stock Option Plan, 1998 Employee 
Stock Option Plan (for non-officer employees) and 1996 Directors' Stock 
Option Plan. Additional options remain outstanding and are exercisable 
pursuant to the Company's 1986 Incentive Stock Option Plan, which terminated 
in July 1996.  In addition, the Company has issued non-plan options to the 
Company's Chief Executive Officer, Chief Financial Officer and Sr. Vice 
President of Marketing, exercisable for a total of 1,500,000 shares.

     NEW PRODUCT RISKS; RAPID TECHNOLOGICAL CHANGE.  The markets for the 
Company's software products and services are characterized by rapid 
technological developments, evolving industry standards, swift changes in 
customer requirements and computer operating environments, and frequent new 
product introductions and enhancements.  As a result, the success of the 
Company depends substantially upon its ability to continue to enhance 
existing products, develop and introduce in a timely manner, new products 
incorporating technological advances and meet increasing customer 
expectations, all on a timely and cost-effective basis.  To the extent one or 
more competitors introduce products that better address customer needs, the 
Company's businesses could be adversely affected. The Company's success will 
also depend on the ability of its primary products, SQLBASE, CENTURA TEAM 
DEVELOPER, SQLWINDOWS, CENTURA NET.DB, and SQLHOST, to perform well with 
existing and future leading, industry-standard application software products 
intended to be used in connection with RDBMS.  Any failure to deliver these 
products as scheduled or their failure to achieve early market acceptance as 
a result of competition, technological change, failure of the Company to 
timely release new versions or upgrades, failure of such upgrades to achieve 
market acceptance or otherwise, could have a material adverse effect on the 
business, operating results and financial condition of the Company.  In 
addition, commercial acceptance of the Company's products and services could 
be adversely affected by critical or negative statements or reports by 
industry and financial analysts concerning the Company and its products, or 
other factors such as the Company's financial performance.  If the Company is 
unable to develop and introduce new products or enhancements to existing 
products in a timely manner in response to changing market conditions or 
customer requirements, its business, operating results and financial 
condition could be materially and adversely affected. 

     The Company depends substantially upon internal efforts for the 
development of new products and product enhancements.  The Company has in the 
past experienced delays in the development of new products and product 
versions, which resulted in loss or delays of product revenues, and there can 
be no assurance that the Company will not experience further delays in 
connection with its current product development or future development 
activities.  Also, software products as complex as those offered by the 
Company may contain undetected errors when first introduced or as new 
versions are released. The Company has in the past discovered software errors 
in certain of its new products and enhancements, respectively, after their 
introduction.  Although the Company has not experienced material adverse 
effects resulting from any such errors to date, there can be no assurance 
that errors will not be found in new products or releases after commencement 
of commercial shipments, resulting in adverse product reviews and a loss of 
or delay in market acceptance, which could have


                                      13
<PAGE>

a material adverse effect upon the Company's business, operating results and 
financial condition. 

     From time to time, the Company or its competitors may announce new 
products, product versions, capabilities or technologies that have the 
potential to replace or shorten the life cycles of the Company's existing 
products.  The Company has historically experienced increased returns of a 
particular product version following the announcement of a planned release of 
a new version of that product.  The Company provides allowances for 
anticipated returns, and believes its existing policies result in the 
establishment of allowances that are adequate, and have been adequate in the 
past, but there can be no assurance that product returns will not exceed such 
allowances in the future. The announcement of currently planned or other new 
products may cause customers to delay their purchasing decisions in 
anticipation of such products, which could have a material adverse effect on 
business, operating results and financial condition of the Company. 

     YEAR 2000 ISSUE.  Background.  Some computers, software, and other 
equipment include programming code in which calendar year data is abbreviated 
to only two digits. As a result of this design decision, some of these 
systems could fail to operate or fail to produce correct results if "00" is 
interpreted to mean 1900, rather than 2000.  These problems are widely 
expected to increase in frequency and severity as the year 2000 approaches, 
and are commonly referred to as the "Millenium Bug" or "Year 2000 Problem".

     Assessment.  The Year 2000 Problem could affect computers, software, and 
other equipment used, operated, or maintained by the Company.  Accordingly, 
the Company is reviewing its internal computer programs and systems to ensure 
that the programs and systems will be Year 2000 compliant.  The Company 
presently believes that its computer systems will be Year 2000 compliant in a 
timely manner.  However, while the estimated cost of these efforts is not 
expected to be material to the Company's financial position or any year's 
results of operations, there can be no assurance to this effect.

     Software Sold to Consumers.  All current products developed by CENTURA 
are designed to record, store and process and present calendar dates 
occurring on or after January 1, 2000 with the same degree of accuracy that 
such products process dates occuring before such date.

     Internal Infrastructure.  The Company believes that it has identified 
substantially all of the major computers, software applications, and related 
equipment used in connection with its internal operations that must be 
modified, upgraded, or replaced to minimize the possibility of a material 
disruption to its business.  The Company has commenced the process of 
modifying, upgrading, and replacing major systems that have been identified 
as adversely affected, and expects to complete this process in a timely 
manner.

     Systems Other than Information Technology Systems.  In addition to 
computers and related systems, the operation of office and facilities 
equipment, such as fax machines, photocopiers, telephone switches, security 
systems, and other common devices may be affected by the Year 2000 Problem.  
The Company is currently assessing the potential effect of, and costs of 
remediating, the Year 2000 Problem on its office and facilities equipment.

     The Company estimates the total cost to the Company of completing any 
required modifications, upgrades, or replacements of these internal systems 
will not have a material adverse effect on the Company's business or results 
of operations.  This estimate is being monitored and will be revised as 
additional information becomes available.

     Suppliers.  The Company has initiated communications with third party 
suppliers of the major computers, software, and other equipment used, 
operated, or maintained by the Company to identify and, to the extent 
possible, to resolve issues involving the Year 2000 Problem.  However, the 
Company has limited or no control over the actions of these third party 
suppliers. Thus, while the Company expects that it will be able to resolve 
any significant Year 2000 Problems with these systems, there can be no 
assurance that these suppliers will resolve any or all Year 2000 Problems 
with these systems before the occurrence of a material disruption to the 
business of the Company or any of its customers. Any failure of these third  
parties to resolve Year 2000 problems with their systems in a timely manner 
could have a material adverse effect on the Company's business, financial 
condition, and results of operation.

     Disclaimer.  Management believes that it is not possible to determine 
with complete certainty that all Year 2000 Problems affecting the Company 
have been identified or corrected. The number of devices that could be 
affected and the interactions among these devices are simply too numerous. In 
addition, one cannot accurately predict how many Year 2000 Problem-related 
failures will occur, or the severity, duration, or financial consequences of 
these perhaps inevitable failures. The discussion of the Company's efforts, 
and management's expectations, relating to Year 2000 compliance are 
forward-looking statements. The Company's ability to achieve Year 2000 
compliance and the level of incremental costs associated therewith, could be 
adversely impacted by, among other things, the availability and cost of 
programming and testing resources, vendors' ability to modify proprietary 
software, and unanticipated problems identified in the ongoing compliance 
review.

     While the Company has begun the implementation of Year 2000 related 
upgrades appropriate for the Company's internal systems and equipment and 
Year 2000 compliance issues in the systems of customers, vendors and other 
related parties, there can be no assurance that problems will not arise as a 
result of the Year 2000 issue.

     EMBEDDABLE DATABASE MARKET.  Since database capacity is often indicative 
of differences in customer application, segments within the PC client/server 
market in which the Company competes can generally be distinguished and 
segregated by the target capacity of the database utilized. The Company 
generally markets its database products in environments utilizing capacity 
ranging from small, Smart Device environments to those of multiple Gigabytes. 
Competitors of the Company, including Microsoft, Sybase, Pervasive and 
Oracle, generally have product offerings which compete with the Company's 
products in some or all of these capacity ranges.  In addition, some of these 
competitors are providers of sophisticated database software, originally 
designed and marketed primarily for use with mainframes and minicomputers, 
which, if successfully re-configured to provide similar functionality in PC 
client/server, or smaller capacity environments, could materially and 
adversely impact the Company's revenues, results of operations and financial 
condition.

     COMPETITION.  The market for client/server system software is intensely 
competitive and rapidly changing.  The Company's products are specifically 
targeted at the emerging portion of this market relating to embeddable PC and 
Web client/server software, and the Company's current and prospective 
competitors offer a variety of solutions to address this market segment. 

     TOOLS AND CONNECTIVITY MARKETS.  The Company faces competition from 
providers of software specifically developed for the PC client/server market, 
such as Oracle, Sybase, Microsoft, Inprise and Forte, and connectivity 
software competitors, such as IBI Systems, Inc. and Sybase.  The Company also 
faces potential competition from vendors of applications development tools 
based on 4GLs (generation languages) or CASE (Computer Aided Software 
Engineers) technologies. With the emergence of the World Wide Web as an 
important platform for application development and deployment and a variety 
of newly created tools that export Java--TM-- program language connectivity, 
additional competitors or potential competitors have emerged.

     The principal competitive factors affecting the market for the Company's 
products include, breadth of distribution and name recognition, product 
architecture, performance, functionality, price, product quality, customer 
support.  The Company experienced increased competition during 1997, 1996, 
and 1995, resulting in loss of market share.  The Company must continue to 
introduce enhancements to its existing products and offer new products on a 
timely basis in order to remain competitive.  However, even if the Company 
introduces such products in this manner, it may not be able to compete 
effectively because of the significantly larger resources available to many 
of the Company's competitors.  There can be no assurance that the Company 
will be able to compete successfully or that competition will not have a 
material adverse effect on the Company's business, operating results and 
financial condition.  See "Competition."

     INTERNET SOFTWARE MARKET.  The market for Internet software in general, 
and the segments of such market addressed by the Company's products in 
particular, are relatively new.  The future financial performance of the 
Company will depend in part on the continued expansion of this market and 
these market segments and the growth in the demand for other products 
developed by the Company, as well as increased acceptance of the Company's 
products by MIS professionals.  There can be no assurance that the Internet 
software market and the relevant segments of the market will continue to 
grow, that the Company will be able to respond effectively to the evolving 
requirements of the market and market segments, or that MIS professionals 
will accept the Company's products.  If the Company is not successful in 
developing, marketing, localizing and selling applications that gain 
commercial acceptance in these markets and market segments on a timely basis, 
the Company's business, operating results and financial condition could be 
materially and adversely affected.  See "Industry Overview."

     DEPENDENCE UPON DISTRIBUTION CHANNELS.  The Company relies on 
relationships with value-added resellers and independent third party 
distributors for a substantial portion of its sales and revenues.  Some of 
the Company's resellers and distributors also offer competing products.  Most 
of the Company's resellers and distributors are not subject to any minimum 
purchase requirements, they can cease marketing the Company's products at any 
time, and they may from time to time be granted stock exchange or rotation 
rights. Moreover, the introduction of new and enhanced products may result in 
higher product returns and exchanges from distributors and resellers.  Any 
product returns or exchanges in excess of recorded allowances could have a 
material adverse effect on the Company's business, operating results and 
financial condition. The Company also maintains strategic relationships with 
a number of vertical software vendors and other technology companies for 
marketing or resale of the Company's products.  Any termination or 
significant disruption of the Company's relationship with a major portion of 
its resellers or distributors, or the failure by such parties to renew 
agreements with the Company, could materially and adversely affect the 
Company's business, operating results and financial condition.  Since 1994 
the Company has reduced its resources devoted to North American corporate 
sales and also decreased its expenditures on corporate and product marketing. 
Failure of the Company to successfully implement, support and manage its 
sales strategies could have a material adverse effect on the Company.

     The distribution channels through which client/server software products 
are sold have been characterized by rapid change, including consolidations 
and financial difficulties of distributors, resellers and other marketing 
partners including certain of the Company's current distributors.  The 
bankruptcy, deterioration in financial condition or other business 
difficulties of a distributor or retailer could render the Company's accounts 
receivable from such entity uncollectible, and this could result in a 
material adverse effect on the Company's business, operating results and 
financial condition.  There can be no assurance that distributors will 
continue to purchase the Company's products or provide the Company's products 
with adequate promotional support.  Failure of distributors to do so could 
have a material and adverse effect on the Company's business, operating 
results and financial condition.

     In a number of international markets the Company has entered into 
quasi-exclusive, multi-year agreements with independent companies that have 
also licensed the use of the Company's name. These agreements are in place to 
increase the Company's opportunities and penetration in such markets where 
the rapid adoption of client/server technologies is anticipated.  While the 
Company believes that to date these agreements have increased the Company's 
penetration in such markets, there can be no certainty that this performance 
will continue nor that these relationships will remain in place.  The 
Company's future cost of maintaining its business in these markets could 
increase substantially if these agreements are not renewed.

     DEPENDENCE ON THIRD PARTY ORGANIZATIONS.  The Company is increasingly 
dependent on the efforts of third party "partners", including consultants, 
system houses and software developers to implement, service and support the 
Company's products.  These third parties increasingly have opportunities to 
select from a very broad range of products from the Company's competitors, 
many of whom have greater resources and market acceptance than the Company.  
In order to succeed, the Company must actively recruit and sustain 
relationships with these third parties.  There can be no assurance that the 
Company will be successful in recruiting new partners or in sustaining its 
relationships with its existing partners.

     INTERNATIONAL SALES AND OPERATIONS.  International sales represented 
58%, 60% and 61% of the Company's net revenues for the years ended December 
31, 1997, 1996 and 1995, respectively.  A key component of the Company's 
strategy is continued expansion into international markets, and the Company 
currently anticipates that international sales, particularly in new and 
emerging markets, will continue to account for a significant percentage of 
total revenues.  The Company will need to retain effective distributors, and 
hire, retain and motivate qualified personnel internationally to maintain 
and/or expand its international presence.  There can be no assurance that the 


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<PAGE>

Company will be able to successfully market, sell, localize and deliver its 
products in these international markets.  In addition to the uncertainty as 
to the Company's ability to sustain or expand its international presence, 
there are certain risks inherent in doing business on an international level, 
such as unexpected changes in regulatory requirements and government 
controls, problems and delays in collecting accounts receivable, tariffs, 
export license requirements and other trade barriers, difficulties in 
staffing and managing foreign operations, longer payment cycles, political 
and economic instability, fluctuations in currency exchange rates, seasonal 
reductions in business activity during summer months in Europe and certain 
other parts of the world, restrictions on the export of critical technology, 
and potentially adverse tax consequences, which could adversely impact the 
success of international operations.  Sales of the Company's products are 
denominated both in local currencies of the respective geographic region and 
in US dollars, depending upon the economic stability of that region and 
locally accepted business practices.  Accordingly, any increase in the value 
of the US dollar relative to local currencies in these markets may negatively 
impact revenues, results of operations and financial condition.  An increase 
in the relative value of the US dollar would serve to increase the relative 
foreign currency cost to the customer of a US dollar denominated purchase, 
which may negatively affect the Company's sales in foreign markets. In 
addition, the US dollar value of a sale denominated in a region's local 
currency decreases in proportion to relative increases in the value of the US 
dollar.  In addition, effective copyright and trade secret protection may be 
limited or unavailable under the laws of certain foreign jurisdictions.  
There can be no assurance that one or more of such factors will not have a 
material adverse effect on the Company's international operations and, 
consequently, on the Company's business, operating results and financial 
condition.

     PROPRIETARY RIGHTS.  The success and ability of the Company to compete 
is dependent in part upon the Company's proprietary technology.  While the 
Company relies on trademark, trade secret and copyright laws to protect its 
technology, the Company believes that factors such as the technological and 
creative skills of its personnel, new product developments, frequent product 
enhancements, name recognition and customer support are more essential to 
establishing and maintaining a technology leadership position.  The Company 
has one patent with respect to its SQLWINDOWS and CENTURA TEAM DEVELOPER 
products. The Company believes that the ownership of patents is not 
necessarily a significant factor in its business and that its success does 
not depend on the ownership of patents, but primarily on the innovative 
skills, technical competence and marketing abilities of its personnel.  Also, 
there can be no assurance that others will not develop technologies that are 
similar or superior to the Company's technology.  The source code for the 
Company's proprietary software is protected both as a trade secret and as a 
copyrighted work.  Despite these precautions, it may be possible for a third 
party to copy or otherwise obtain and use their products or technology 
without authorization, or to develop similar technology independently.  In 
addition, effective copyright and trade secret protection may be unavailable 
or limited in certain foreign countries.  The Company intends to apply for 
new patents as appropriate opportunities and need becomes evident.

     The Company generally enters into confidentiality or license agreements 
with its employees, consultants and vendors, and generally controls access to 
and distribution of its software, documentation and other proprietary 
information.  Despite efforts to protect proprietary rights, unauthorized 
parties may attempt to copy aspects of the Company's products or to obtain 
and use information that is regarded as proprietary.  Policing such 
unauthorized use is difficult.  There can be no assurance that the steps 
taken by the Company will prevent misappropriation of the Company's 
technology or that such agreements will be enforceable.  In addition, 
litigation may be necessary in the future to enforce intellectual property 
rights, to protect trade secrets or to determine the validity and scope of 
the proprietary rights of others.  Such litigation could result in 
substantial costs and diversion of resources and could have a material 
adverse effect on the Company's business, operating results and financial 
condition.

      There can be no assurance that third parties will not claim 
infringement by the Company with respect to current or future products, and 
the Company expects that it will increasingly be subject to such claims as 
the number of products and competitors in the client/server and Internet 
connectivity software market grows and the functionality of such products 
overlaps with other industry segments.  In the past, the Company has received 
notices alleging that its products infringe trademarks of third parties.  The 
Company has historically dealt with and will in the future continue to deal 
with such claims in the ordinary course of business, evaluating the merits of 
each claim on an individual basis.  There are currently no material pending 
legal proceedings against the Company regarding trademark infringement.  Any 
such third party claims, whether or not they are meritorious, could result in 
costly litigation or require the Company to enter into royalty or licensing 
agreements. Such royalty or license agreements, if required, may not be 
available on terms acceptable to the Company, or at all.  If the Company was 
found to have infringed upon the proprietary rights of third parties, it 
could be required to pay damages, cease sales of the infringing products and 
redesign or discontinue such products, any of which could have a material 
adverse effect on the Company's business, operating results and financial 
condition.

     LEGAL PROCEEDINGS.  Other than as described in Item 1 of Part II hereof, 
there are currently no material pending legal proceedings against the Company 
or any of its subsidiaries, other than ordinary routine litigation incidental 
to the business of the Company. The Company operates, however, in a complex 
and volatile industry in which disputes, litigation, regulatory proceedings 
and other actions are a necessary risk of doing business. There can be no 
assurance that the Company will not participate in such legal proceedings and 
that the costs and charges will not have a material adverse impact on the 



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<PAGE>

Company's future success.

                                   PART II
                              OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

On September 17, 1997, Technology Venture (Software) Holdings Limited, 
formerly known as Eagerquest Investments Limited ("Eagerquest") filed suit 
against the Company in the United States District Court for the Central 
District of California alleging that the Company acted improperly with 
respect to its contract with Eagerquest for the distribution of the Company's 
products in the territories of Hong Kong and China and that the Company's 
actions illegally damaged Eagerquest. While the formal settlement document 
has not yet been signed, the Company has reached an agreement in principle 
with Eagerquest to resolve outstanding differences and to dismiss the 
lawsuit.  The Company does not believe this will have an adverse material 
affect on the Company's financial situation or business prospects.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

     (a)  SECURITIES SOLD.  On February 28, 1998 the Company issued and sold to
purchasers in a Private Placement 2,330,191 shares of the Company's Common Stock
(the "PP Shares") and warrants exercisable for 1,082,548 shares of the Company's
Common Stock (the "PP Warrants").  The Company also issued and sold to Computer
Associates International, Inc. ("CA") a warrant exercisable for 500,000 shares
of the Company's Common Stock (the "CA Warrant").  The Company also converted a
convertible promissory note plus accrued interest (collectively, the "Note")
held by Newport Acquisition Company No. 2, LLC ("NAC") into 11,415,094 shares of
the Company's Common Stock. (the "NAC Shares").  The Company also issued to
Rochon Capital Group, Ltd. ("Rochon"), its financial advisor, warrants
exercisable for a total of 354,717 shares of the Company's Common Stock (the
"Rochon Warrants") in partial consideration for Rochon's services in connection
with the foregoing transactions.  On March 17, 1998 and June 11, 1998, the
Company also issued and sold to NAC two warrants exercisable for 893,320 shares
and 300,000 shares of the Company's Common Stock respectively (collectively, the
"NAC Warrants").

     (b)  UNDERWRITERS AND OTHER PURCHASERS.  There were no underwriters for 
the foregoing transactions.  The PP Shares and PP Warrants were offered only 
to a group of accredited investors.  The CA Warrant was offered only to CA, 
an accredited investor.  The NAC Shares and the NAC Warrants were offered 
only to NAC, an accredited investor.  The Rochon Warrants were offered only 
to Rochon, an accredited investor.

     (c)  CONSIDERATION.  The PP Shares and PP Warrants were sold for an 
aggregate offering price of $2,470,502.  The CA Warrant was sold for an 
aggregate offering price of $500.  The NAC Shares were sold in consideration 
of NAC's cancellation of the Note in the aggregate principal amount of 
$10,000,000 plus accrued interest through February 27, 1998 of $2,251,771, 
and the NAC Warrants were issued and sold in partial consideration of a 
negotiated amendment to the Investor Rights Agreement between the Company and 
NAC dated February 27, 1998.  The Rochon Warrants were issued to Rochon in 
partial consideration for Rochon's services in connection with the Private 
Placement and conversion of the note.

     (d)  EXEMPTION FROM REGISTRATION CLAIMED.  The foregoing transactions 
were exempt from registration under the Securities Act of 1933, as amended 
(the "Act") pursuant to Rule 506 of Regulation D, which provides an exemption 
for sales without regard to the dollar amount of the offering, provided that 
there are no more than 35 purchasers, and the sale satisfies all terms and 
conditions of Rules 501 and 502 under the Act.  All shares of Common Stock 
and Warrants exercisable for Common Stock issued and sold pursuant to the 
foregoing transactions were subsequently registered on Registration 
Statements on Form S-3 declared effective by the Securities Exchange 
Commission as of May 18, 1998 and July 8, 1998, respectively.

     (e)  TERMS OF CONVERSION OR EXERCISE.  The PP Warrants are exercisable 
at a price of $1.25 per share and expire on February 28, 2003. The CA Warrant 
is exercisable at a price of $1.906 per share and expires on February 27, 
2004. The Rochon Warrants are exercisable at a price of $2.12 per share and 
expire on February 27, 2003.  The NAC Warrants are exercisable at prices of 
$1.81 and $2.09 per share, respectively, and both expire on June 11, 2003.

                                      16
<PAGE>


ITEM 3.   DEFAULTS IN SENIOR SECURITIES--NOT APPLICABLE

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS--NOT APPLICABLE

ITEM 5.   OTHER INFORMATION

     (a)  KEY PERSONNEL.  Subsequent to the quarter ended September 30, 1998, 
the Company hired Joseph Falcone as Senior Vice President and Chief 
Technology Officer.  Additionally, Kathy Lane is now Senior Vice President of 
Strategic Alliances.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits:

          27.1 Financial Data Schedule

     (b)  The Company filed no reports on Form 8-K during the quarter ended
          September 30, 1998.





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<PAGE>

                                  SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                                  CENTURA SOFTWARE CORPORATION

                                  By:  /s/ John W. Bowman
                                  ----------------------------
November 16, 1998                 John W. Bowman
                                  Senior Vice President Of Finance And
                                  Operations, Chief Financial Officer
                                  (Principal Financial and Accounting Officer)


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