{"id":43202,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/agreement-and-plan-of-reorganization-portable-software-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-and-plan-of-reorganization-portable-software-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-reorganization-portable-software-corp.html","title":{"rendered":"Agreement and Plan of Reorganization &#8211; Portable Software Corp. and 7Software Inc."},"content":{"rendered":"<pre>                      AGREEMENT AND PLAN OF REORGANIZATION\n\n\n                THIS AGREEMENT AND PLAN OF REORGANIZATION (the \"AGREEMENT\") is\nentered into as of this 30th day of June, 1998, by and among Portable Software\nCorporation, A Washington corporation (\"PORTABLE\"), PSC Merger Corp., a Delaware\ncorporation and a wholly-owned subsidiary of Portable (\"PORTABLE SUBSIDIARY\"),\nand 7Software, Inc., a California corporation (\"SEVEN\"), and Melissa Widner and\nAndrew Dent, the principal shareholders of Seven (the \"PRINCIPAL SHAREHOLDERS\").\n\n\n                                    RECITALS\n\n\n         A. The parties intend that, subject to the terms and conditions of this\nAgreement, Portable Subsidiary will merge with and into Seven in a reverse\ntriangular merger with Seven to be the surviving corporation of the Merger, all\npursuant to the terms and conditions of this Agreement and an Agreement of\nMerger substantially in the form of Exhibit A (the \"AGREEMENT OF MERGER\") and\nthe applicable provisions of the laws of the States of Delaware and California.\nUpon the effectiveness of the Merger, all the outstanding capital stock of Seven\nwill be converted into capital stock of Portable, and Portable will assume all\noutstanding options to purchase shares of capital stock of Seven, as provided in\nthis Agreement and the Agreement of Merger.\n\n         B. The Merger is intended to be treated as a tax-free reorganization\npursuant to the provisions of Section 368(a)(1)(A) of the Internal Revenue Code\nof 1986, as amended (the \"CODE\"), by virtue of the provisions of Section\n368(a)(2)(E) of the Code.\n\n                NOW, THEREFORE, the parties hereto hereby agree as follows:\n\n         1.       CERTAIN DEFINITIONS\n\n                  As used in this Agreement, the following terms will have the\nmeanings set forth below:\n\n                  1.1 The \"MERGER\" means the statutory merger of Portable\nSubsidiary with and into Seven to be effected pursuant to the terms and\nconditions of this Agreement.\n\n                  1.2 The \"EFFECTIVE TIME\" means the time and date on which the\nMerger first becomes legally effective under the laws of the States of\nCalifornia and Delaware as a result of: (i) the filing with the California\nSecretary of State of the Agreement of \n\n\n\n   2\n\nMerger and any required officers' certificates; and (ii) the filing with the\nDelaware Secretary of State of the Agreement of Merger and any required\nofficers' certificates or, in lieu thereof at Portable's option, a Certificate\nof Merger (the \"CERTIFICATE OF MERGER\"), conforming to the requirements of\nSection 252 of the Delaware General Corporation Law.\n\n                  1.3 \"PORTABLE COMMON STOCK\" means Portable's Common Stock, no\npar value per share.\n\n                  1.4 \"SEVEN COMMON STOCK\" means Seven's Common Stock, no par\nvalue per share.\n\n                  1.5 \"SEVEN OPTIONS\" means, collectively, options to purchase\nshares of Seven Common Stock granted by Seven to Seven employees or consultants\n(a) under the its 1997 Stock Option Plan (the \"SEVEN OPTION PLAN\") or (b)\noutside of its 1997 Stock Option Plan as disclosed in the Seven Disclosure\nSchedule.\n\n                  1.6 \"SEVEN DERIVATIVE SECURITIES\" means, collectively: (a) any\nwarrant, option, right or other security issued by Seven that entitles the\nholder thereof to purchase or otherwise acquire any shares of the capital stock\nof Seven (collectively, \"SEVEN STOCK RIGHTS\"); (b) any note, evidence of\nindebtedness, stock or other security of Seven that is convertible into or\nexchangeable for any shares of the capital stock of Seven or any Seven Stock\nRights (\"SEVEN CONVERTIBLE SECURITY\"); and (c) any warrant, option, right, note,\nevidence of indebtedness, stock or other security issued by Seven that entitles\nthe holder thereof to purchase or otherwise acquire any Seven Stock Rights or\nany Seven Convertible Security from Seven; provided, however, that the term\n\"Seven Derivative Securities\" does not include any of the Seven Options.\n\n                  1.7 \"NUMBER OF FULLY DILUTED SEVEN SHARES\" means that number\nof shares of Seven Common Stock that is equal to the sum of: (a) the total\nnumber of shares of Seven Common Stock that are issued and outstanding\nimmediately prior to the Effective Time; plus (b) the total number of shares of\nSeven Common Stock subject to or issuable under all Seven Options that are\nissued and outstanding immediately prior to the Effective Time; plus (c) the\ntotal number of shares of Seven Common Stock that, immediately prior to the\nEffective Time, are, directly or indirectly, ultimately or potentially issuable\nby Seven upon the exercise, conversion or exchange of all Seven Derivative\nSecurities (if any) that are issued and outstanding immediately prior to the\nEffective Time.\n\n                  1.8 \"SEVEN SHAREHOLDERS\" means those persons (each being\nindividually referred to herein as a \"SEVEN SHAREHOLDER\") who, immediately prior\nto the Effective Time, hold the shares of Seven Common Stock that are\noutstanding immediately prior to the Effective Time; provided, however, that for\npurposes of Section 2.4 and Section 11 of this Agreement, the term \"Seven\nShareholders\" means only those Seven Shareholders (as defined above in this\nSection) who are issued shares of Portable Common Stock in the Merger.\n\n                  1.9 \"SEVEN DISSENTING SHARES\" means any shares of any capital\nstock of Seven that (i) are outstanding immediately prior to the Effective Time\nand qualify fully as \"dissenting shares\" within the meaning of Section 1300(b)\nof the California Corporations Code and (ii) with respect to which dissenter's\nrights to require the purchase of such dissenting shares \n\n                                      -2-\n\n\n\n   3\n\nfor cash at their fair market value in accordance with Chapter 13 of the\nCalifornia Corporations Code have been duly and properly exercised and perfected\nin connection with the Merger.\n\n                  1.10 \"PORTABLE MERGER SHARES\" means 2,082,118 shares of\nPortable Common Stock.\n\n                  1.11 \"CONVERSION RATIO\" means the quotient obtained by\ndividing (a) the number of shares of Portable Common Stock constituting the\nPortable Merger Shares by (b) the Number of Fully Diluted Seven Shares. For\nexample, if the Number of Fully Diluted Seven Shares is 2,446,294, then the\nConversion Ratio will be 2,082,118 divided by 2,446,294, or approximately\n0.851132.\n\n                  1.12 \"KNOWLEDGE,\" when used with reference to Seven or Seven\nShareholders, means the collective actual knowledge of the Seven Shareholders,\nthe President and\/or Chief Executive Officer of Seven, the Chief Financial\nOfficer of Seven and\/or any Vice President of Seven.\n\n         2.       PLAN OF REORGANIZATION\n\n                  2.1 The Merger. Subject to the terms and conditions of this\nAgreement, Portable Subsidiary will be merged with and into Seven pursuant to\nthis Agreement and the Agreement of Merger and in accordance with applicable\nprovisions of the laws of the States of Delaware and California as follows:\n\n                           2.1.1 Conversion of Subsidiary Stock. At the\nEffective Time, each share of the Common Stock of Portable Subsidiary that is\nissued and outstanding immediately prior to the Effective Time will, by virtue\nof the Merger and without the need for any further action on the part of the\nholder thereof, be converted into and become one share of Seven Common Stock\nthat is issued and outstanding immediately after the Effective Time, and the\nshares of Seven Common Stock into which the shares of Portable Subsidiary are so\nconverted in the Merger will be the only shares of capital stock of Seven that\nare issued and outstanding immediately after the Effective Time.\n\n                           2.1.2 Conversion of Shares. Each share of Seven\nCommon Stock, issued and outstanding immediately prior to the Effective Time\nother than shares, if any, for which dissenters rights have been or will be\nperfected in compliance with applicable law, will by virtue of the Merger and at\nthe Effective Time, and without further action on the part of any holder\nthereof, be converted into a number of shares of Portable Common Stock that is\nequal to the Conversion Ratio, subject to the provisions of 2.2 regarding the\nelimination of fractional shares.\n\n                           2.1.3 Adjustments for Capital Changes. If, prior to\nthe Effective Time, Portable or Seven recapitalizes through a split-up of its\noutstanding shares into a greater number, or a combination of its outstanding\nshares into a lesser number, reorganizes, reclassifies or otherwise changes its\noutstanding shares into the same or a different number of shares of other\nclasses (other than through a split-up or combination of shares provided for in\nthe previous clause), or declares a dividend on its outstanding shares payable\nin shares or securities \n\n                                      -3-\n\n\n\n   4\n\nconvertible into shares, the Conversion Ratio and the number of Portable Merger\nShares will be adjusted appropriately so as to maintain the proportionate\ninterests of the shareholders and optionholders of Portable and Seven in the\noutstanding equity of Portable immediately following the Merger as contemplated\nby this Agreement.\n\n                           2.1.4 Dissenting Shares. Holders of shares of Seven\nCommon Stock who have complied with all requirements for perfecting\nshareholders' rights of appraisal, as set forth in Section 1300 et seq of the\nCalifornia General Corporation Law (the \"CALIFORNIA LAW\"), shall be entitled to\ntheir rights under the California Law with respect to such shares.\n\n                2.2 Fractional Shares. No fractional shares of Portable Common\nStock will be issued in connection with the Merger, but in lieu thereof each\nholder of Seven Common Stock who would otherwise be entitled to receive a\nfraction of a share of Portable Common Stock will receive from Portable,\npromptly after the Effective Time, an amount of cash (without interest)\ndetermined by multiplying such fraction by $1.00.\n\n                2.3 Seven Options. Each Seven Option that is outstanding\nimmediately prior to the Effective Time shall, by virtue of the Merger at the\nEffective Time and without further action on the part of any holder thereof, be\nassumed by Portable and converted into an option (a \"PORTABLE OPTION\") to\npurchase after the Effective Time that number of shares of Portable Common\nStock, determined by multiplying the number of shares of Seven Common Stock\nsubject to such Seven Option immediately prior to the Effective Time by the\nConversion Ratio, at an exercise price per share of Portable Common Stock equal\nto the exercise price per share of the Seven Option immediately prior to the\nEffective Time divided by the Conversion Ratio and rounded up to the nearest\nwhole cent. If the foregoing calculation results in an assumed option being\nexercisable for a fraction of a share, then the number of shares of Portable\nCommon Stock subject to such option will be rounded down to the nearest whole\nnumber with no cash being payable for such fractional share. The terms,\nexercisability, vesting schedule, status as an \"incentive stock option\" under\nSection 422 of the Code, if applicable, and all other terms of the Seven Options\nwill otherwise be unchanged. Continuous employment with Seven will be credited\nto an optionee for purposes of determining the number of shares subject to such\noptionee's Portable Option which may have become vested from time to time.\n\n                2.4 Escrow Agreement. At the closing of the Merger (the\n\"CLOSING\"), Portable will withhold seventeen and one-half percent (17 1\/2%) of\nthe Portable Merger Shares to be issued to each Seven Shareholder in accordance\nwith Section 2.1 (rounded down to the nearest whole number of shares to be\nissued to each Seven Shareholder, and such that the shares to be withheld from\nthe Principal Shareholders will be divided equally between vested and unvested\nshares as specified in the Escrow Agreement (as defined below)) and deliver such\nshares (the \"ESCROW SHARES\") to the State Street Bank &amp; Trust Company of\nCalifornia, N.A. (the \"ESCROW AGENT\"), as escrow agent, to be held by Escrow\nAgent as collateral for the indemnification obligations of Seven and the\nPrincipal Shareholders under Section 11.2 and pursuant to the provisions of an\nescrow agreement (the \"ESCROW AGREEMENT\") in substantially the form of Exhibit\n2.4. The Escrow Shares will be represented by a certificate or certificates\nissued in the name of the Escrow Agent and will be held by the Escrow Agent from\nthe Closing until the one year \n\n\n                                      -4-\n\n\n\n   5\n\nanniversary of the Closing Date (the \"ESCROW PERIOD\"). In the event that the\nMerger is approved by the Seven Shareholders as provided herein, the Seven\nShareholders shall, without any further act of any Seven Shareholder, be deemed\nto have consented to and approved (i) the use of the Escrow Shares as collateral\nfor the indemnification obligations of Seven and the Principal Shareholders\nunder Section 11.2 in the manner set forth in the Escrow Agreement, (ii) the\nappointment of Melissa Widner as the representative of the Seven Shareholders\n(the \"REPRESENTATIVE\") under the Escrow Agreement and as the attorney-in-fact\nand agent for and on behalf of each Seven Shareholder (other than holders of\nSeven Dissenting Shares), and the taking by the Representative of any and all\nactions and the making of any decisions required or permitted to be taken by her\nunder the Escrow Agreement (including, without limitation, the exercise of the\npower to authorize delivery to Portable of Escrow Shares in satisfaction of\nclaims by Portable; agree to, negotiate, enter into settlements and compromises\nof and demand arbitration and comply with orders of courts and awards of\narbitrators with respect to such claims; resolve any claim made pursuant to\nSection 11.2; and take all actions necessary in the judgment of the\nRepresentative for the accomplishment of the foregoing) and (iii) to all of the\nother terms, conditions and limitations in the Escrow Agreement. In the event\nthat the Escrow Agent is unable or unwilling to serve as escrow agent, the\nparties agree that Fenwick &amp; West LLP, or a third party mutually agreed upon\nbetween Portable and the Representative, may serve as escrow agent under the\nEscrow Agreement on substantially the same terms as the Escrow Agreement.\n\n                2.5 Effects of the Merger. At the Effective Time: (a) the\nseparate existence of Portable Subsidiary will cease and Portable Subsidiary\nwill be merged with and into Seven, and Seven will be the surviving corporation,\npursuant to the terms of the Agreement of Merger, (b) the Articles of\nIncorporation and Bylaws of Seven will be amended to read as set forth in\nExhibit 2.5 attached hereto, and will be the Articles of Incorporation and\nBylaws of the surviving corporation, (c) each share of Portable Subsidiary\nCommon Stock outstanding immediately prior to the Effective Time will continue\nto be an identical outstanding share of the surviving corporation, (d) each\nshare of Seven Common Stock and each Seven Option outstanding immediately prior\nto the Effective Time will be converted as provide in Sections 2.1, 2.2 and 2.3;\n(e) the officers and directors of the Surviving Corporation will be the officers\nand directors of Portable Subsidiary, and (f) the Merger will, from and after\nthe Effective Time, have all of the effects provided by applicable law.\n\n                2.6 Further Assurances. Seven agrees that if, at any time before\nor after the Effective Time, Portable considers or is advised that any further\ndeeds, assignments or assurances are reasonably necessary or desirable to vest,\nperfect or confirm in Portable title to any property or rights of Seven,\nPortable and its proper officers and directors may execute and deliver all such\nproper deeds, assignments and assurances and do all other things necessary or\ndesirable to vest, perfect or confirm title to such property or rights in\nPortable and otherwise to carry out the purpose of this Agreement, in the name\nof Seven or otherwise.\n\n                2.7 Tax-Free Reorganization. The parties intend to adopt this\nAgreement as a tax-free plan of reorganization and to consummate the Merger in\naccordance with the provisions of Section 368(a)(1)(A) of the Code. The parties\nbelieve that the value of the Portable Common \n\n                                      -5-\n\n\n\n   6\n\nStock to be received in the Merger is equal, in each instance, to the value of\nthe Seven Common Stock to be surrendered in exchange therefor. The Portable\nCommon Stock issued in the Merger will be issued solely in exchange for the\nSeven Common Stock, and no other transaction other than the Merger represents,\nprovides for or is intended to be an adjustment to, the consideration paid for\nthe Seven Common Stock. Except for cash paid in lieu of fractional shares or for\nSeven Dissenting Shares, no consideration that could constitute \"other property\"\nwithin the meaning of Section 356 of the Code is being paid by Portable for the\nSeven Common Stock in the Merger. The parties shall not take a position on any\ntax returns inconsistent with this Section 2.7. In addition, Portable represents\nnow, and as of the Closing Date, that it presently intends to continue Seven's\nhistoric business or use a significant portion of Seven's business assets in a\nbusiness.\n\n                  2.8 Securities Laws Matters. Portable shall issue the shares\nof Portable Common Stock to be issued in the Merger pursuant to Section 2.1.2 of\nthe Agreement and the Portable Options to be issued in the Merger pursuant to an\nexemption from registration under Section 4(2) and\/or Regulation D promulgated\nunder the 1933 Act and the exemption from qualification under Section 25120 of\nthe California Corporation Code (the \"CCC\") provided by Section 25103(h) of the\nCCC, and shall make any requisite filings within the time prescribed by\napplicable law. In connection therewith, (a) each Seven Shareholder shall\nexecute and deliver to Portable an Investment Representation letter in the form\nof Exhibit 2.8A hereto (the \"INVESTMENT REPRESENTATION LETTER\"); and (b)\nsubstantially all of the holders of outstanding Seven Options shall execute and\ndeliver to Portable an Optionee Investment Representation Letter in the form of\nExhibit 2.8B hereto (the \"OPTIONEE INVESTMENT REPRESENTATION LETTER\").\n\n                  2.9 Purchase Accounting. The parties intend that the Merger be\ntreated as a purchase for accounting purposes.\n\n         3.       REPRESENTATIONS AND WARRANTIES OF SEVEN AND THE PRINCIPAL\n                  SHAREHOLDERS\n\n                  As an inducement to Portable to enter into this Agreement,\neach of the Principal Shareholders and Seven hereby jointly and severally\nrepresents and warrants to Portable that, except as set forth on the Seven\nDisclosure Schedule delivered to Portable herewith as Exhibit 3.0 (the \"SEVEN\nDISCLOSURE SCHEDULE\").\n\n                  3.1 Organization and Good Standing. Seven is a corporation\nduly organized, validly existing and in good standing under the laws of\nCalifornia, has the corporate power and authority to own, operate and lease its\nproperties and to carry on its business as now conducted and as proposed to be\nconducted, and is qualified as a foreign corporation in each jurisdiction in\nwhich a failure to be so qualified could reasonably be expected to have a\nmaterial adverse effect on its present or expected operations or financial\ncondition.\n\n                  3.2 Power, Authorization and Validity.\n\n                           3.2.1 Seven has the right, power, legal capacity and\nauthority to enter into and perform its obligations under this Agreement, and\nall agreements to which Seven is or will \n\n                                      -6-\n\n\n   7\n\nbe a party that are required to be executed pursuant to this Agreement (the\n\"SEVEN ANCILLARY AGREEMENTS\") and Seven has all requisite corporate power and\nauthority to consummate the Merger. The execution, delivery and performance of\nthis Agreement and the Seven Ancillary Agreements have been duly and validly\napproved and authorized by Seven's Board of Directors. Each of the Principal\nShareholders has the right, power, legal capacity, and authority to enter into,\nexecute, deliver, and perform his or her respective obligations under this\nAgreement and each of the Ancillary Agreements to be executed and delivered by\nsuch Principal Shareholder (the \"PRINCIPAL SHAREHOLDER ANCILLARY AGREEMENTS\").\n\n                           3.2.2 No filing, authorization or approval,\ngovernmental or otherwise, is necessary to enable Seven or any Principal\nShareholder to enter into, and to perform its obligations under, this Agreement,\nthe Seven Ancillary Agreements, and the Shareholder Ancillary Agreements except\nfor (a) the filing of the Agreement of Merger with the California and Delaware\nSecretaries of State, and the filing of appropriate documents with the relevant\nauthorities of other states in which Seven is qualified to do business, if any,\n(b) such filings as may be required to comply with federal and state securities\nlaws, and (c) the approval of the Seven Shareholders of the transactions\ncontemplated hereby.\n\n                           3.2.3 This Agreement and the Seven Ancillary\nAgreements are, or when executed by Seven will be, valid and binding obligations\nof Seven, except as to the effect, if any, of (a) applicable bankruptcy and\nother similar laws affecting the rights of creditors generally and (b) rules of\nlaw governing specific performance, injunctive relief and other equitable\nremedies; provided, however, that the Agreement of Merger will not be effective\nuntil filed with the Delaware and California Secretaries of State. This\nAgreement and each of the Principal Shareholder Ancillary Agreements are, or\nwhen executed by the each Principal Shareholder will be, valid and binding\nobligations of such Principal Shareholder enforceable in accordance with their\nrespective terms, except as to the effect, if any, of (a) applicable bankruptcy\nand other similar laws affecting the rights of creditors generally and (b) rules\nof law governing specific performance, injunctive relief and other equitable\nremedies; provided, however, that the Agreement of Merger will not be effective\nuntil filed with the Delaware and California Secretaries of State.\n\n                  3.3 Capitalization. The authorized capital stock of Seven\nconsists of 10,000,000 shares of Common Stock, no par value, of which 2,082,294\nshares are issued and outstanding, and 5,000,000 shares of Preferred Stock, none\nof which are issued or outstanding. Options to purchase a total of 366,000\nshares of Seven Common Stock are outstanding. All issued and outstanding shares\nof Seven Common Stock have been duly authorized and validly issued, are fully\npaid and nonassessable, are not subject to any right of rescission, and have\nbeen offered, issued, sold and delivered by Seven in compliance with all\nregistration or qualification requirements (or applicable exemptions therefrom)\nof applicable federal and state securities laws. A list of all holders of Seven\nOptions, Seven Derivative Securities, the number of shares, options and warrants\nheld by each is set forth on the Seven Disclosure Schedule. Except as set forth\nin this Section, there are no options, warrants, calls, commitments, conversion\nprivileges or preemptive or other rights or agreements outstanding to purchase\nany of Seven's authorized but unissued capital stock or any securities\nconvertible into or exchangeable for shares of Seven \n\n\n\n                                      -7-\n\n   8\n\nCommon Stock or obligating Seven to grant, extend, or enter into any such\noption, warrant, call, right, commitment, conversion privilege or other right or\nagreement, and there is no liability for dividends accrued but unpaid. There are\nno voting agreements, rights of first refusal or other restrictions (other than\nnormal restrictions on transfer under applicable federal and state securities\nlaws) applicable to any of Seven's outstanding securities. Seven is not under\nany obligation to register under the Securities Act any of its presently\noutstanding securities or any securities that may be subsequently issued.\n\n                3.4 Subsidiaries. Seven does not have any subsidiaries or any\ninterest, direct or indirect, in any corporation, partnership, joint venture or\nother business entity.\n\n                3.5 No Violation of Existing Agreements. Neither the execution\nand delivery of this Agreement nor any Seven Ancillary Agreement by Seven or any\nof the Principal Shareholders, nor the consummation of the transactions\ncontemplated hereby, will conflict with, or (with or without notice or lapse of\ntime, or both) result in a termination, breach, impairment or violation of (a)\nany provision of the Articles of Incorporation or Bylaws of Seven, as currently\nin effect, (b) in any material respect, any material instrument or contract,\nletter of intent or memorandum of understanding, or commitment to which Seven is\na party or by which Seven is bound, or (c) any federal, state, local or foreign\njudgment, writ, decree, order, statute, rule or regulation applicable to Seven\nor its assets or properties. The consummation of the Merger in and of itself\nwill not require the consent of any third party and will not have a material\nadverse effect upon any rights, licenses, franchises, leases or agreements of\nSeven pursuant to the terms of those agreements.\n\n                3.6 Litigation. There is no action, proceeding, claim or\ninvestigation pending against Seven before any court or administrative agency\nthat if determined adversely to Seven may reasonably be expected to have a\nmaterial adverse effect on the present or future operations or financial\ncondition of Seven, nor, to the best of Seven's knowledge, has any such action,\nproceeding, claim or investigation been threatened. There is, to the best of\nSeven's knowledge, no reasonable basis for any shareholder or former shareholder\nof Seven, or any other person, firm, corporation, or entity, to assert a claim\nagainst Seven based upon: (a) ownership or rights to ownership of any shares of\nSeven Common Stock (except for dissenter's rights with respect to shares of\nPortable Common Stock issuable by virtue of the Merger), (b) any rights as a\nSeven shareholder, including any option or preemptive rights or rights to notice\nor to vote, (c) any rights under any agreement among Seven and its shareholders,\nor (d) Seven entering into this Agreement or any Seven Ancillary Agreement or\nany of the transactions contemplated hereby or thereby. There is no judgment,\ndecree, injunction, rule, or order of any governmental entity or agency, court\nor arbitrator outstanding against Seven.\n\n                3.7 Taxes. Seven has filed all federal, state, local and foreign\ntax returns required to be filed, has paid all taxes required to be paid in\nrespect of all periods for which returns have been filed, has established an\nadequate accrual or reserve for the payment of all taxes payable in respect of\nthe periods subsequent to the periods covered by the most recent applicable tax\nreturns, has made all necessary estimated tax payments, and has no material\nliability for taxes in excess of the amount so paid or accruals or reserves so\nestablished. Seven is \n\n\n                                      -8-\n\n\n\n   9\n\nnot delinquent in the payment of any tax or in the filing of any tax returns,\nand no deficiencies for any tax have been threatened, claimed, proposed or\nassessed. No tax return of Seven has ever been audited by the Internal Revenue\nService or any state taxing agency or authority. For the purposes of this\nSection, the terms \"TAX\" and \"TAXES\" include all federal, state, local and\nforeign income, gains, franchise, excise, property, sales, use, employment,\nlicense, payroll, occupation, recording, value added or transfer taxes,\ngovernmental charges, fees, levies or assessments (whether payable directly or\nby withholding), and, with respect to such taxes, any estimated tax, interest\nand penalties or additions to tax and interest on such penalties and additions\nto tax. To Seven's knowledge, all elections and notices required by Section\n83(b) of the Code and any analogous provisions of applicable state tax laws have\nbeen timely filed by all individuals who have purchased shares of Seven Common\nStock, and the Principal Shareholders expressly assume any liability for any\nfailure to file any such elections and notices.\n\n                3.8 Seven Financial Statements. Seven has delivered to Portable\nas Exhibit 3.8 Seven's unaudited balance sheet as of June 1, 1998 (the \"SEVEN\nBALANCE SHEET\") and income statement for the six month period then ended\n(collectively, the \"SEVEN FINANCIAL STATEMENTS\"). The Seven Financial Statements\n(a) are in accordance with the books and records of Seven, and (b) fairly\npresent the financial condition of Seven at the date therein indicated and the\nresults of operations for each period therein specified. Seven has no material\ndebt, liability or obligation of any nature, whether accrued, absolute,\ncontingent or otherwise, whether due or to become due, and which is required to\nbe reflected in a financial statement prepared in accordance with generally\naccepted accounting principles, that is not reflected or reserved against in the\nSeven Financial Statements, except for those that may have been incurred after\nthe date of the Seven Financial Statements in the ordinary course of its\nbusiness, consistent with past practice and that are not material in amount\neither individually or collectively.\n\n                3.9 Title to Properties. Seven has good and marketable title to\nall of its assets as shown on the Seven Balance Sheet, free and clear of all\nliens, charges, restrictions or encumbrances (other than for taxes not yet due\nand payable). All machinery and equipment included in such properties is in good\ncondition and repair, normal wear and tear excepted, and all leases of real or\npersonal property to which Seven is a party are fully effective and afford Seven\npeaceful and undisturbed possession of the subject matter of the lease. Seven is\nnot in violation of any zoning, building, safety or environmental ordinance,\nregulation or requirement or other law or regulation applicable to the operation\nof owned or leased properties (the violation of which would have a material\nadverse effect on its business), or has received any notice of violation with\nwhich it has not complied. Seven does not own any real property.\n\n                3.10 Absence of Certain Changes. Since the date of the Seven\nBalance Sheet, there has not been with respect to Seven any:\n\n                           (a) material change in the financial condition,\nproperties, assets, liabilities, business or operations thereof which change by\nitself or in conjunction with all other such changes, whether or not arising in\nthe ordinary course of business, has had or will have a material adverse effect\non Seven;\n\n\n                                      -9-\n\n\n   10\n\n                           (b) material contingent liability incurred by Seven\nas guarantor or otherwise with respect to the obligations of others;\n\n                           (c) mortgage, encumbrance or lien placed on any of\nSeven's properties;\n\n                           (d) material obligation or liability incurred by\nSeven other than obligations and liabilities incurred in the ordinary course of\nbusiness;\n\n                           (e) purchase, license or sale or other disposition,\nor any agreement or other arrangement for the purchase, license, sale or other\ndisposition, of any of the properties or assets of Seven other than in the\nordinary course of business;\n\n                           (f) damage, destruction or loss, whether or not\ncovered by insurance, materially and adversely affecting the properties, assets\nor business of Seven;\n\n                           (g) declaration, setting aside or payment of any\ndividend on, or the making of any other distribution in respect of, the capital\nstock thereof, any split, combination or recapitalization of the capital stock\nthereof or any direct or indirect redemption, purchase or other acquisition of\nthe capital stock of Seven;\n\n                           (h) change in the compensation payable or to become\npayable to any of its officers, employees or agents, or any bonus payment or\narrangement made to or with any of such officers, employees or agents;\n\n                           (i) change with respect to the management,\nsupervisory or other key personnel thereof;\n\n                           (j) transfer or grant of a right under any Seven IP\nRights (as such term is defined in Section 3.12 below) other than those\ntransferred or granted in the ordinary course of its business consistent with\npast practice;\n\n                           (k) issuance or sale of any debt or equity securities\nof Seven or any options or other rights to acquire from Seven, directly or\nindirectly, any debt or equity securities;\n\n                           (l) payment or discharge of a material lien or\nliability thereof which lien was not either shown on the Seven Balance Sheet or\nincurred in the ordinary course of business thereafter; or\n\n                           (m) obligation or liability incurred thereby to any\nof its officers, directors or shareholders or any loans or advances made thereby\nto any of its officers, directors or shareholders except normal compensation and\nexpense allowances payable to officers.\n\n                3.11 Contracts and Commitments. The Seven Disclosure Schedule\nsets forth a list of each of the following written or oral contracts,\nagreements, or commitments to which Seven is a party or by which it or any of\nits assets or properties are bound: (i) any stock \n\n                                      -10-\n\n\n\n   11\n\nredemption or purchase agreement, financing agreement, license, lease or\nfranchise, (ii) any contract providing for the development of software for\nSeven, or the license of software to Seven which is used or incorporated in any\nproducts currently distributed by Seven, (iii) license agreement as licensor or\nlicensee (except for standard non-exclusive hardware and software licenses\ngranted to end-user customers by Seven, and standard non-exclusive hardware and\nsoftware licenses arising from the purchase of \"off the shelf\" or standard\nproducts by Seven, in the ordinary course of business); (iv) material agreement\nfor the lease of real or personal property; (v) joint venture contract or\narrangement or any other agreement that involves a sharing of profits with other\npersons; (vi) instrument evidencing or related in any way to indebtedness for\nborrowed money by way of direct loan, sale of debt securities, purchase money\nobligation, conditional sale, guarantee, or otherwise, except for trade\nindebtedness incurred in the ordinary course of business, and except as\ndisclosed in the Seven Financial Statements; (vii) contract containing covenants\npurporting to limit Seven's freedom to compete in any line of business in any\ngeographic area; (viii) contract involving a potential commitment or payment of\n$10,000 or more; (ix) contract for the sale, license, distribution, or\nmanufacture of products or services which is not terminable upon ninety (90)\ndays' or less notice without cost or other liability to Seven or in which Seven\nhas granted or received manufacturing rights most favored customer pricing\nprovisions or exclusive marketing rights relating to any product or services,\ngroups of products or services, or territory; (x) contract or commitment for the\nemployment of any officer, employee or consultant of Seven, or any other type of\ncontract or understanding with any officer, employee, consultant or director\nthat is not immediately terminable by Seven without liability; (xi) agreement or\ninstrument governing any Seven IP Right; or (xii) any agreement relating to the\nsale, issuance, grant, exercise, award, purchase, repurchase, or redemption of\nany shares of capital stock or other securities of Seven or options, warrants,\nor other rights to acquire such capital stock or securities, or options,\nwarrants or other rights therefor. A copy of each agreement or document listed\non the Seven Disclosure Schedule identified to this Section 3.11 has been\ndelivered to Portable's counsel. Seven is not nor to its knowledge is any other\nparty in default in any material respect under any contract, obligation or\ncommitment listed on the Seven Disclosure Schedule identified to this Section\n3.11 or that is otherwise material to the business of Seven. Seven is not a\nparty to any contract or arrangement which has had or could reasonably be\nexpected to have a material adverse effect on its business or prospects. All\nagreements, contracts, plans, leases, instruments, arrangements, licenses and\ncommitments listed on the Seven Disclosure Schedule identified to this Section\n3.11 are valid and in full force and effect.\n\n                3.12 Intellectual Property. To Seven's knowledge, Seven owns, or\nhas the right to use, sell or license all Intellectual Property Rights (as\ndefined below) necessary or required for the conduct of its business as\npresently conducted (such Intellectual Property Rights being hereinafter\ncollectively referred to as the \"SEVEN IP RIGHTS\") and such rights to use, sell\nor license are reasonably sufficient for the conduct of its business. As used\nherein, the term \"INTELLECTUAL PROPERTY RIGHTS\" shall mean all worldwide\nindustrial and intellectual property rights, including, without limitation,\npatents, patent applications, patent rights, trademarks, trademark applications,\ntrade names, service marks, service mark applications, copyright, copyright\napplications, franchises, licenses, inventories, know-how, trade secrets,\ncustomer lists, proprietary processes and formulae, all source and object code,\nalgorithms, architecture, structure, display screens, layouts, inventions,\ndevelopment tools and all documentation and \n\n\n                                      -11-\n\n\n\n   12\n\nmedia constituting, describing or relating to the above, including, without\nlimitation, manuals, memoranda and records.\n\n                           (a) The Seven Disclosure Schedule lists (i) all\npatents, copyrights, trademarks, service marks, any renewal rights for any of\nthe foregoing, and any applications and registrations for any of the foregoing\nwhich are included in the Seven IP Rights and owned by Seven; (ii) all hardware\nproducts, software products, and services that are currently published, offered\nor under development by Seven; and (iii) all licenses, sublicenses and other\nagreements to which Seven is a party either as licensor or licensee or pursuant\nto which Seven has rights substantially equivalent to those of a licensor or\nlicensee (other than standard non-exclusive hardware and software licenses\narising from the purchase of \"off the shelf\" or standard products by Seven). The\ndisclosures described in (iii) hereof include the identities of the parties to\nthe relevant agreements, a description of the nature and subject matter thereof\n(including without limitation a description of all exclusivity, rights of first\nrefusal, and noncompetition provisions), and the applicable royalty or summary\nof formula or procedure for divorcing such royalty.\n\n                           (b) All Seven IP Rights which consist of a license or\nanother right to third party property are set forth on the Seven Disclosure\nSchedule. To Seven's knowledge, all other Seven IP Rights consists solely of\nitems and rights which are either: (i) owned by Seven, or (ii) in the public\ndomain. To Seven's knowledge, Seven has all rights in the Seven IP Rights\nnecessary to carry out Seven's current, former and anticipated future\nactivities, including without limitation rights to make, use, exclude others\nfrom using, reproduce, modify, adapt, create derivative works based on,\ntranslate, distribute (directly and indirectly), transmit, display and perform\npublicly, license, rent, lease, assign, and sell the Seven IP Rights in all\ngeographic locations and fields of use, and to sublicense any or all such rights\nto third parties, including the right to grant further sublicenses.\n\n                           (c) Seven is not, nor as a result of the execution or\ndelivery of this Agreement, or performance of Seven's obligations hereunder,\nwill Seven be, in violation of any license, sublicense or agreement to which\nSeven is a party or otherwise bound. Except as specifically described in the\nSeven Disclosure Schedule, Seven is not obligated to provide any consideration\n(whether financial or otherwise) to any third party, nor is any third party\notherwise entitled to any consideration with respect to any exercise of rights\nby Seven or Portable in the Seven IP Rights.\n\n                           (d) The use, manufacturing, distribution, licensing,\nsublicensing, sale, or any other exercise of rights in any product, work,\ntechnology or process as now used or offered or proposed for use, licensing or\nsale by Seven does not infringe on any copyright, trade secret, trademark,\nservice mark, trade name, firm name, logo, trade dress, mask work or patent of\nany person; provided, however, that with respect to patent infringement, such\nrepresentation is limited to Seven's knowledge. No claims (i) challenging the\nvalidity, effectiveness, or ownership by Seven of any of the Seven IP Rights, or\n(ii) to the effect that the use, distribution, licensing, sublicensing, sale or\nany other exercise of rights in any product, work technology or process as now\nused or offered, proposed for use, licensing, sublicensing or sale, or under\ndevelopment by Seven infringes or will infringe on any Intellectual Property\nRight of any person have been \n\n\n                                      -12-\n\n\n\n   13\n\nasserted or, to the best knowledge of Seven and each of the Principal\nShareholders, are threatened by any person nor are there any valid grounds for\nany bona fide claim of any such kind. All granted or issued patents and mask\nworks and all registered trademarks listed on the Seven Disclosure Schedule and\nall copyright registrations held by Seven are valid, enforceable and subsisting.\nTo the best knowledge of Seven and each of the Principal Shareholders, there is\nno unauthorized use, infringement or misappropriation of any of the Seven IP\nRights by any third party, employee or former employer.\n\n                3.13 Compliance with Laws. Seven has complied, and is now and at\nthe Closing Date will be in full compliance, in all material respects with all\napplicable laws, ordinances, regulations, and rules, and all orders, writs,\ninjunctions, awards, judgments, and decrees applicable to it or to the assets,\nproperties, and business thereof. Seven has received all permits and approvals\nfrom, and has made all filings with, third parties, including government\nagencies and authorities, that are necessary in connection with its present\nbusiness, except to the extent the failure to obtain such permits and approvals\nand to make such filings would not have a material adverse effect on Seven's\npresent or future operations or financial condition. To the best of Seven's\nknowledge, there are no legal or administrative proceedings or investigations\npending or threatened, that, if enacted or determined adversely to Seven, would\nresult in any material adverse change in its present or future operations or\nfinancial condition.\n\n                3.14 Certain Transactions and Agreements. None of the officers\nof Seven, nor any member of their immediate families, has any direct or indirect\nownership interest in any firm or corporation that competes with Seven (except\nwith respect to any interest in less than one percent of the stock of any\ncorporation whose stock is publicly traded). None of said officers or directors,\nor any member of their immediate families, is directly or indirectly interested\nin any contract or informal arrangement with Seven, except for normal\ncompensation for services as an officer, director or employee thereof. None of\nsaid officers or directors or family members has any interest in any property,\nreal or personal, tangible or intangible, including inventions, patents,\ncopyrights, trademarks or trade names or trade secrets, used in or pertaining to\nthe business of Seven, except for the normal rights of a shareholder.\n\n                3.15. Employees, ERISA and Other Compliance.\n\n                        3.15.1 Except as set forth in the Seven Disclosure\nSchedule, Seven does not have any employment contracts or consulting agreements\ncurrently in effect that are not terminable at will (other than agreements with\nthe sole purpose of providing for the confidentiality of proprietary information\nor assignment of inventions). All officers, employees and consultants of Seven\nhaving access to proprietary information have executed and delivered to Seven an\nagreement regarding the protection of such proprietary information and the\nassignment of inventions to Seven; copies of the form of all such agreements\nhave been delivered to Portable's counsel.\n\n                        3.15.2 Seven (i) has never been and is not now subject\nto a union organizing effort, (ii) is not subject to any collective bargaining\nagreement with respect to any of its employees, (iii) is not subject to any\nother contract, written or oral, with any trade or labor union, employees'\nassociation or similar organization, or (iv) does not have any current labor\ndisputes. \n\n\n                                      -13-\n\n\n\n   14\n\nSeven has good labor relations, and has no knowledge of any facts indicating\nthat the consummation of the transactions contemplated hereby will have a\nmaterial adverse effect on such labor relations, and has no knowledge that any\nof its key employees intends to leave its employ.\n\n                        3.15.3 The Seven Disclosure Schedule identifies each\n\"employee benefit plan\" (each a \"SEVEN EMPLOYEE PLAN\") as defined in Section\n3(3) of the Employee Retirement Income Security Act of 1974, as amended\n(\"ERISA\"). To the knowledge of each of the Principal Shareholders and Seven,\nafter reasonable inquiry with legal counsel, each Seven Employee Plan is in\nmaterial compliance with ERISA and the Code.\n\n                        3.15.4 The Seven Disclosure Schedule lists each\nemployment, severance or other similar contract, arrangement or policy and each\nplan or arrangement (written or oral) providing for insurance coverage\n(including any self-insured arrangements), workers' benefits, vacation benefits,\nseverance benefits, disability benefits, death benefits, hospitalization\nbenefits, retirement benefits, deferred compensation, profit-sharing, bonuses,\nstock options, stock purchase, phantom stock, stock appreciation or other forms\nof incentive compensation or post-retirement insurance, compensation or benefits\nfor employees, consultants or directors which (A) is not a Seven Employee Plan,\n(B) is entered into, maintained or contributed to, as the case may be, by Seven\nand (C) covers any employee or former employee of Seven (such contracts, plans\nand arrangements as are described in this Section 3.15.4 are herein referred to\ncollectively as the \"SEVEN BENEFIT ARRANGEMENTS\"). Each Seven Benefit\nArrangement has been maintained in substantial compliance in all material\nrespects with its terms and with the requirements prescribed by any and all\nstatutes, orders, rules and regulations which are applicable to such Seven\nBenefit Arrangement. Seven has delivered to Portable or its counsel a complete\nand correct copy or description of each Seven Benefit Arrangement.\n\n                        3.15.5 No benefit payable or which may become payable by\nSeven pursuant to any Seven Employee Plan or any Seven Benefit Arrangement or as\na result of or arising under this Agreement shall constitute an \"excess\nparachute payment\" (as defined in Section 280G(b)(1) of the Code) which is\nsubject to the imposition of an excise tax under Section 4999 of the Code or\nwhich would not be deductible by reason of Section 280G of the Code.\n\n                        3.15.6 Seven is in compliance in all material respects\nwith all applicable laws, agreements and contracts relating to employment,\nemployment practices, wages, hours, and terms and conditions of employment,\nincluding, but not limited to, employee compensation matters, but not including\nERISA.\n\n                        3.15.7 No employee of Seven is in violation of any term\nof any employment contract, patent disclosure agreement, noncompetition\nagreement, or any other contract or agreement, or any restrictive covenant\nrelating to the right of any such employee to be employed thereby, or to use\ntrade secrets or proprietary information of others, and the employment of such\nemployees does not subject Seven to any liability.\n\n\n                                      -14-\n\n\n   15\n\n                        3.15.8 Seven has provided a list of all employees,\nofficers and consultants of Seven and their current compensation to Portable.\n\n                        3.15.9 Seven is not a party to any (a) agreement with\nany executive officer or other key employee thereof (i) the benefits of which\nare contingent, or the terms of which are materially altered, upon the\noccurrence of a transaction involving Seven in the nature of any of the\ntransactions contemplated by this Agreement and the Agreement of Merger, (ii)\nproviding any term of employment or compensation guarantee, or (iii) providing\nseverance benefits or other benefits after the termination of employment of such\nemployee regardless of the reason for such termination of employment, or (b)\nagreement or plan, including, without limitation, any stock option plan, stock\nappreciation rights plan or stock purchase plan, any of the benefits of which\nwill be materially increased, or the vesting of benefits of which will be\nmaterially accelerated, by the occurrence of any of the transactions\ncontemplated by this Agreement and the Agreement of Merger or the value of any\nof the benefits of which will be calculated on the basis of any of the\ntransactions contemplated by this Agreement and the Agreement of Merger.\n\n                3.16 Corporate Documents. Seven has made available to Portable\nfor examination all documents and information listed in the Seven Disclosure\nSchedule or other exhibits called for by this Agreement which has been requested\nby Portable's legal counsel, including, without limitation, the following: (a)\ncopies of Seven's Articles of Incorporation and Bylaws as currently in effect;\n(b) its Minute Book containing all records of all proceedings, consents,\nactions, and meetings of the shareholders, the board of directors and any\ncommittees thereof; (c) its stock ledger and journal reflecting all stock\nissuances and transfers; and (d) all permits, orders, and consents issued by any\nregulatory agency with respect to Seven, or any securities of Seven, and all\napplications for such permits, orders, and consents.\n\n                3.17 No Brokers. Neither Seven nor any of the Seven Shareholders\nis obligated for the payment of fees or expenses of any investment banker,\nbroker or finder in connection with the origin, negotiation or execution of this\nAgreement or the Agreement of Merger or in connection with any transaction\ncontemplated hereby or thereby.\n\n                3.18 Disclosure. To Seven's knowledge, neither this Agreement,\nits exhibits and schedules, nor any of the certificates or documents to be\ndelivered by Seven to Portable under this Agreement, taken together, contains\nany untrue statement of a material fact or omits to state any material fact\nnecessary in order to make the statements contained herein and therein, in light\nof the circumstances under which such statements were made, not misleading.\n\n                3.19 Books and Records. The books, records and accounts of Seven\n(a) are in all material respects true, complete and correct, (b) have been\nmaintained in accordance with good business practices on a basis consistent with\nprior years, (c) are stated in reasonable detail and accurately and fairly\nreflect the transactions and dispositions of the assets of Seven, and (d)\naccurately and fairly reflect the basis for the Seven Financial Statements.\n\n                3.20 Insurance. Seven maintains and at all times during the\nprior year has maintained fire and casualty, general liability, business\ninterruption, product liability, and \n\n\n                                      -15-\n\n   16\n\nsprinkler and water damage insurance which it believes to be reasonably prudent\nfor similarly sized and similarly situated businesses.\n\n                3.21 Environmental Matters.\n\n                        To their knowledge:\n\n                        3.21.1 During the period that Seven has leased or owned\nits properties or owned or operated any facilities, there have been no\ndisposals, releases or threatened releases of Hazardous Materials (as defined\nbelow) on, from or under such properties or facilities. No knowledge of any\npresence, disposals, releases or threatened releases of Hazardous Materials on,\nfrom or under any of such properties or facilities, occurred prior to Seven\nhaving taken possession of any of such properties or facilities. For the\npurposes of this Agreement, the terms \"disposal,\" \"release,\" and \"threatened\nrelease\" shall have the definitions assigned thereto by the Comprehensive\nEnvironmental Response, Compensation and Liability Act of 1980, 42 U.S.C.\nSection 9601 et seq., as amended (\"CERCLA\"). For the purposes of this Agreement\n\"HAZARDOUS MATERIALS\" shall mean any hazardous or toxic substance, material or\nwaste which is or becomes prior to the Closing regulated under, or defined as a\n\"hazardous substance,\" \"pollutant,\" \"contaminant,\" \"toxic chemical,\" \"hazardous\nmaterials,\" \"toxic substance\" or \"hazardous chemical\" under (1) CERCLA; (2) any\nsimilar federal, state or local law; or (3) regulations promulgated under any of\nthe above laws or statutes.\n\n                        3.21.2 None of the properties or facilities of Seven is\nin violation of any federal, state or local law, ordinance, regulation or order\nrelating to industrial hygiene or to the environmental conditions on, under or\nabout such properties or facilities, including, but not limited to, soil and\nground water condition. During the time that Seven has owned or leased its\nrespective properties and facilities, neither Seven nor, any third party, has\nused, generated, manufactured or stored on, under or about such properties or\nfacilities or transported to or from such properties or facilities any Hazardous\nMaterials.\n\n                        3.21.3 During the time that Seven has owned or leased\nits respective properties and facilities, there has been no litigation brought\nor threatened against Seven by, or any settlement reached by Seven with, any\nparty or parties alleging the presence, disposal, release or threatened release\nof any Hazardous Materials on, from or under any of such properties or\nfacilities.\n\n        4. REPRESENTATIONS AND WARRANTIES OF PORTABLE AND PORTABLE SUBSIDIARY\n\n                As an inducement to Seven and the Principal Shareholders to\nenter into this Agreement, Portable and Portable Subsidiary, jointly and\nseverally, hereby represent and warrant that, except as set forth on the\nPortable Disclosure Schedule delivered to Seven as Exhibit 4.0 (the \"PORTABLE\nDISCLOSURE SCHEDULE\"):\n\n                4.1 Organization and Good Standing. Portable is a corporation\nduly organized, validly existing and in good standing under the laws of the\nState of Washington, and has the \n\n\n                                      -16-\n\n\n\n   17\n\ncorporate power and authority to own, operate and lease its properties and to\ncarry on its business as now conducted and as proposed to be conducted. Portable\nSubsidiary is a corporation duly organized, validly existing and in good\nstanding under the laws of the State of Delaware and has the corporate power and\nauthority to own, operate, and lease its properties and to carry on its business\nas proposed to be conducted. Portable Subsidiary was formed solely for the\npurpose of the Merger, and has not conducted any business other than related to\nsuch purpose.\n\n                4.2 Power, Authorization and Validity.\n\n                        4.2.1 Portable has the right, power, legal capacity and\nauthority to enter into and perform its obligations under this Agreement, and\nall agreements to which Portable is or will be a party that are required to be\nexecuted pursuant to this Agreement (the \"PORTABLE ANCILLARY AGREEMENTS\"). The\nexecution, delivery and performance of this Agreement and the Portable Ancillary\nAgreements have been duly and validly approved and authorized by Portable's\nBoard of Directors, and do not require the approval by Portable's shareholders.\nPortable Subsidiary has the right, power and authority to execute, deliver and\nperform its obligations under this Agreement, and upon approval of the Merger\nand the Agreement of Merger by Portable Subsidiary's sole stockholder, Portable\nSubsidiary will have the right, power and authority to execute, deliver and\nperform the Agreement of Merger and all agreements to which Portable Subsidiary\nis or will be a party that are required to be executed pursuant to this\nAgreement (the \"PORTABLE SUBSIDIARY ANCILLARY AGREEMENTS\"). The execution,\ndelivery and performance of this Agreement, the Agreement of Merger and all\nother Portable Subsidiary Ancillary Agreements by Portable Subsidiary have been\nduly and validly approved and authorized by Portable Subsidiary's Board of\nDirectors.\n\n                        4.2.2 No filing, authorization or approval, governmental\nor otherwise, is necessary to enable Portable or Portable Subsidiary to enter\ninto, and to perform their respective obligations under, this Agreement, the\nPortable Ancillary Agreements and the Portable Subsidiary Ancillary Agreements\nexcept for (a) the filing of the Agreement of Merger with the California and the\nDelaware Secretary of State, (b) the recording of the Agreement of Merger in the\noffice of the Recorder of the Delaware county in which Portable Subsidiary's\nregistered office is located, and (c) such filings as may be required to comply\nwith federal and state securities laws.\n\n                        4.2.3 This Agreement and the Portable Ancillary\nAgreements are, or when executed by Portable will be, valid and binding\nobligations of Portable enforceable in accordance with their respective terms,\nexcept as to the effect, if any, of (a) applicable bankruptcy and other similar\nlaws affecting the rights of creditors generally, (b) rules of law governing\nspecific performance, injunctive relief and other equitable remedies and (c) the\nenforceability of provisions requiring indemnification in connection with the\noffering, issuance or sale of securities; provided, however, that the Agreement\nof Merger will not be effective until filed with the Delaware and California\nSecretaries of State. This Agreement and the Portable Subsidiary Ancillary\nAgreements are, or when executed by Portable Subsidiary will be, valid and\nbinding obligations of Portable Subsidiary, enforceable in accordance with their\nrespective terms, except as to the effect, if any, of (a) applicable bankruptcy\nand other similar laws affecting the rights of \n\n                                      -17-\n\n\n\n\n   18\n\ncreditors generally and (b) rules of law and equity governing specific\nperformance, injunctive relief and other equitable remedies; provided, however,\nthat the Agreement of Merger will not be effective until filed with the Delaware\nand California Secretaries of State.\n\n                4.3. Capitalization. At the close of business on May 17, 1998,\nthere were outstanding, on a fully-diluted basis, 30,846,194 shares of Portable\nCommon Stock (including shares issuable upon conversion of outstanding Preferred\nStock or exercise of outstanding options and warrants, shares available for\ngrant under the Portable's Stock Option Plan, and any other rights to, directly\nor indirectly, acquire shares or options or warrants to acquire shares of\nPortable capital stock). All of such outstanding shares of Portable Common Stock\nhave been duly authorized and validly issued, are fully paid and nonassessable,\nare not subject to any right of rescission, and have been offered, issued, sold\nand delivered by Portable in compliance with all registration or qualification\nrequirements (or applicable exemptions therefrom) of applicable federal and\nstate securities laws. The Portable Merger Shares, when issued in accordance\nwith this Agreement (and with respect to the Portable Merger Shares to be issued\nupon the exercise of Portable Options, when issued in accordance with the\nagreements governing such Portable Options), will be duly authorized, validly\nissued, fully paid and nonassessable, and will have been offered, issued, sold\nand delivered by Portable in compliance with all registration or qualification\nrequirements (or applicable exemptions therefrom) of applicable federal and\nstate securities laws.\n\n                4.4 No Violation of Existing Agreements. Neither the execution\nand delivery of this Agreement nor any Portable Ancillary Agreement, nor the\nconsummation of the transactions contemplated hereby, will conflict with, or\n(with or without notice or lapse of time, or both) result in a termination,\nbreach, impairment or violation of (a) any provision of the Certificate of\nIncorporation or Bylaws of Portable, as currently in effect, (b) in any material\nrespect, any material instrument or contract to which Portable is a party or by\nwhich Portable is bound, or (c) any federal, state, local or foreign judgment,\nwrit, decree, order, statute, rule or regulation applicable to Portable or its\nassets or properties.\n\n                4.5 Portable Financial Statements. Portable has delivered to\nSeven as Exhibit 4.5 Portable's unaudited balance sheet as of April 30, 1998\n(the \"PORTABLE BALANCE SHEET\"), Portable's income statement for the period then\nended and Portable's audited financial statements for the Portable's 1996 and\n1997 fiscal years (collectively, the \"PORTABLE FINANCIAL STATEMENTS\"). The\nPortable Financial Statements (a) are in accordance with the books and records\nof Portable, and (b) fairly present the financial condition of Portable at the\ndate therein indicated and the results of operations for each period therein\nspecified. Portable has no material debt, liability or obligation of any nature,\nwhether accrued, absolute, contingent or otherwise, whether due or to become\ndue, and which is required to be reflected in a financial statement prepared in\naccordance with generally accepted accounting principles, that is not reflected\nor reserved against in the Portable Financial Statements, except for those that\nmay have been incurred after the date of the Portable Financial Statements in\nthe ordinary course of its business, consistent with past practice and that are\nnot material in amount either individually or collectively.\n\n\n                                      -18-\n\n\n   19\n\n                4.6 Absence of Certain Changes. Since the date of the Portable\nBalance Sheet, there has not been any change in the financial condition,\nproperties, assets, liabilities, business or operations of Portable which change\nby itself or in conjunction with all other such changes, whether or not arising\nin the ordinary course of business, has had or will have a material adverse\neffect on Portable.\n\n                4.7 No Brokers. Portable is not obligated for the payment of\nfees or expenses of any investment banker, broker or finder in connection with\nthe origin, negotiation or execution of this Agreement or the Agreement of\nMerger or in connection with any transaction contemplated hereby or thereby.\n\n                4.8 No Violation of Existing Agreements. Portable has not\nreceived notice from any third party that it is or would, with the passage of\ntime, be (i) in material violation of any provision of the Articles of\nIncorporation or Bylaws; or (ii) in default or violation of any material term,\ncondition or provision of (a) any material judgment, decree, order, injunction\nor stipulation applicable to Portable or (b) any currently effective material\nagreement, note, mortgage, indenture, contract, lease or instrument, permit,\nconcession, franchise or license, which default or violation would have a\nmaterial adverse effect on the business, operations or financial condition of\nPortable.\n\n                4.9 Litigation. There is no action, claim, suit, arbitration,\nproceeding, claim or investigation pending against Portable before any court,\nadministrative agency or arbitrator that, if determined adversely to Portable,\nis likely to have a material adverse effect on Portable's financial condition or\nresults of operation, nor, to Portable's knowledge, has any such action, suit,\nproceeding, arbitration, claim or investigation been threatened.\n\n                4.10 Disclosure. To Portable's knowledge, neither this\nAgreement, its exhibits and schedules, nor any of the certificates or documents\nto be delivered by Portable to Seven under this Agreement, taken together,\ncontains any untrue statement of a material fact or omits to state any material\nfact necessary in order to make the statements contained herein and therein, in\nlight of the circumstances under which such statements were made, not\nmisleading.\n\n        5. PRE-CLOSING COVENANTS OF SEVEN AND THE PRINCIPAL SHAREHOLDERS\n\n                During the period from the date of this Agreement until the\nEffective Time, Seven and each Principal Shareholder covenants and agrees as\nfollows:\n\n                5.1 Advice of Changes. Seven will promptly advise Portable in\nwriting (a) of any event occurring subsequent to the date of this Agreement of\nwhich Seven has knowledge that would render any representation or warranty of\nSeven contained in this Agreement, if made on or as of the date of such event or\nthe Closing Date, untrue or inaccurate in any material respect and (b) of any\nmaterial adverse change in Seven's business, results of operations or financial\ncondition.\n\n\n\n                                      -19-\n\n\n   20\n\n                5.2 Maintenance of Business. Seven will use its best efforts to\ncarry on and preserve its business and its relationships with customers,\nsuppliers, employees and others in substantially the same manner as it has prior\nto the date hereof. If Seven becomes aware of a material deterioration in the\nrelationship with any customer, supplier or key employee, it will promptly bring\nsuch information to the attention of Portable in writing and, if requested by\nPortable, will exert its best efforts to restore the relationship.\n\n                5.3 Conduct of Business. Seven will continue to conduct its\nbusiness and maintain its business relationships in the ordinary and usual\ncourse and will not, without the prior written consent of the President of\nPortable (which may be given verbally to be promptly followed by written\nconfirmation):\n\n                        (a) borrow any money except for expenses incurred in the\nordinary course consistent with past practice, or lend any money;\n\n                        (b) enter into any transaction or agreement not in the\nordinary course of business consistent with past practice (other than the\nengagement of a purchaser representative);\n\n                        (c) encumber or permit to be encumbered any of its\nassets;\n\n                        (d) dispose of any of its assets;\n\n                        (e) enter into any lease or contract for the purchase or\nsale of any property;\n\n                        (f) pay any bonus, increased salary or special\nremuneration to any officer, employee or consultant (except pursuant to existing\narrangements previously disclosed to and approved in writing by Portable) or\nenter into any new employment or consulting agreement with any such person or\nterminate any employee;\n\n                        (g) change any of its accounting methods;\n\n                        (h) declare, set aside or pay any cash or stock dividend\nor other distribution in respect of capital stock, or redeem or otherwise\nacquire any of its capital stock;\n\n                        (i) amend or terminate any contract, agreement or\nlicense to which it is a party (including any royalty arrangement);\n\n                        (j) lend any amount to any person or entity, other than\nadvances for travel and expenses which are incurred in the ordinary course of\nbusiness consistent with past practice, not material in amount and documented by\nreceipts for the claimed amounts;\n\n                        (k) guarantee or act as a surety for any obligation\nexcept for the endorsement of checks and other negotiable instruments in the\nordinary course of business, consistent with past practice, which are not\nmaterial in amount;\n\n\n                                      -20-\n\n\n   21\n\n                        (l) waive or release any material right or claim except\nin the ordinary course of business, consistent with past practice;\n\n                        (m) issue or sell any shares of its capital stock of any\nclass (except upon the exercise of an option or warrant currently outstanding),\nor any other of its securities, or issue or create any warrants, obligations,\nsubscriptions, options, convertible securities, or other commitments to issue\nshares of capital stock, or accelerate the vesting of any outstanding option or\nother security;\n\n                        (n) split or combine the outstanding shares of its\ncapital stock of any class or enter into any recapitalization affecting the\nnumber of outstanding shares of its capital stock of any class or affecting any\nother of its securities;\n\n                        (o) merge, consolidate or reorganize with, or acquire\nany entity;\n\n                        (p) amend its Articles of Incorporation or Bylaws;\n\n\n                        (q) license any of its technology or intellectual\nproperty (other than to end-users in the ordinary course of business pursuant to\nits standard end-user license agreement);\n\n                        (r) change any insurance coverage or issue any\ncertificates of insurance; or\n\n                        (s) agree to do, any of the things described in the\npreceding clauses 5.3(a) through 5.3(r).\n\n                5.4 Shareholders Approval. Seven will hold a special meeting of\nits shareholders (the \"SHAREHOLDERS MEETING\") (or solicit the written consent of\nits shareholders in lieu thereof) at the earliest practicable date to submit\nthis Agreement, the Merger and related matters for the consideration and\napproval of the Seven Shareholders, which approval will be recommended by\nSeven's Board of Directors and management. Such meeting (or the solicitation of\na written consent in lieu thereof) will be called, held and conducted, and any\nproxies will be solicited, in compliance with applicable law.\n\n                5.5 Regulatory Approvals. Seven will execute and file, or join\nin the execution and filing, of any application or other document that may be\nnecessary in order to obtain the authorization, approval or consent of any\ngovernmental body, federal, state, local or foreign which may be reasonably\nrequired, or which Portable may reasonably request, in connection with the\nconsummation of the transactions contemplated by this Agreement. Seven will use\nits best efforts to obtain all such authorizations, approvals and consents.\n\n                5.6 Necessary Consents. Seven will use its best efforts to\nobtain such written consents and take such other actions as may be necessary or\nappropriate to allow the consummation of the transactions contemplated hereby\nand to allow Portable to carry on Seven's business after the Closing.\n\n\n                                      -21-\n\n   22\n\n                5.7 Litigation. Seven will notify Portable in writing promptly\nafter learning of any material actions, suits, proceedings or investigations by\nor before any court, board or governmental agency, initiated by or against it or\nknown by it to be threatened against it.\n\n                5.8 No Other Negotiations. From the date hereof until the\nearlier of termination of this Agreement or consummation of the Merger, Seven\nwill not, and will not authorize or permit any officer, director, employee or\naffiliate of Seven, or any other person, on its behalf to, directly or\nindirectly, solicit or encourage any offer from any party or consider any\ninquiries or proposals received from any other party, participate in any\nnegotiations regarding, or furnish to any person any information with respect\nto, or otherwise cooperate with, facilitate or encourage any effort or attempt\nby any person (other than Portable), concerning the possible disposition of all\nor any substantial portion of Seven's business, assets or capital stock by\nmerger, sale or any other means or concerning any investment in Seven. Seven\nwill promptly notify Portable orally and in writing of any such inquiries or\nproposals.\n\n                5.9 Access to Information. Until the Closing, Seven will allow\nPortable and its agents reasonable access the files, books, records and offices\nof Seven, including, without limitation, any and all information relating to\nSeven's taxes, commitments, contracts, leases, licenses, and real, personal and\nintangible property and financial condition. Seven will cause its accountants to\ncooperate with Portable and its agents in making available all financial\ninformation reasonably requested, including without limitation the right to\nexamine all working papers pertaining to all financial statements prepared or\naudited by such accountants.\n\n                5.10 Satisfaction of Conditions Precedent. Seven will use its\nbest efforts to satisfy or cause to be satisfied all the conditions precedent\nwhich are set forth in Section 9, and Seven will use its best efforts to cause\nthe transactions contemplated by this Agreement to be consummated, and, without\nlimiting the generality of the foregoing, to obtain all consents and\nauthorizations of third parties and to make all filings with, and give all\nnotices to, third parties that may be necessary or reasonably required on its\npart in order to effect the transactions contemplated hereby.\n\n                  5.11 Seven Dissenting Shares. As promptly as practicable after\nthe date of the Shareholders' Meeting and prior to the Closing Date, Seven shall\nfurnish Portable with the name and address of each holder of Seven Dissenting\nShares (\"SEVEN DISSENTING SHAREHOLDER\") and the number of Seven Dissenting\nShares owned by such Seven Dissenting Shareholder.\n\n                  5.12 Blue Sky Laws. Seven shall use its best efforts to assist\nPortable to the extent necessary to comply with the securities and Blue Sky laws\nof all jurisdictions which are applicable in connection with the Merger.\n\n        6. PORTABLE PRE-CLOSING COVENANTS\n\n                During the period from the date of this Agreement until the\nEffective Time, Portable covenants and agrees as follows:\n\n\n                                      -22-\n\n\n   23\n\n                6.1 Advice of Changes. Portable will promptly advise Seven in\nwriting (a) of any event occurring subsequent to the date of this Agreement that\nwould render any representation or warranty of Portable contained in this\nAgreement, if made on or as of the date of such event or the Closing Date,\nuntrue or inaccurate in any material respect and (b) of any material adverse\nchange in Portable's business, results of operations or financial condition.\n\n                6.2 Regulatory Approvals. Portable will execute and file, or\njoin in the execution and filing, of any application or other document that may\nbe necessary in order to obtain the authorization, approval or consent of any\ngovernmental body, federal, state, local or foreign, which may be reasonably\nrequired, or which Seven may reasonably request, in connection with the\nconsummation of the transactions contemplated by this Agreement. Portable will\nuse its best efforts to obtain all such authorizations, approvals and consents.\n\n                6.3 Satisfaction of Conditions Precedent. Portable will use its\nbest efforts to satisfy or cause to be satisfied all the conditions precedent\nwhich are set forth in Section 8, and Portable will use its best efforts to\ncause the transactions contemplated by this Agreement to be consummated, and,\nwithout limiting the generality of the foregoing, to obtain all consents and\nauthorizations of third parties and to make all filings with, and give all\nnotices to, third parties that may be necessary or reasonably required on its\npart in order to effect the transactions contemplated hereby.\n\n                6.4 Blue Sky Laws. Portable shall take such steps as may be\nnecessary to comply with the securities and Blue Sky laws of all jurisdictions\nwhich are applicable in connection with the Merger.\n\n                6.5 Employee Matters. Portable will have extended written offers\nof employment to each of the Seven employees listed on Exhibit 6.5.\n\n        7. CLOSING MATTERS\n\n                7.1 The Closing. Subject to termination of this Agreement as\nprovided in Section 10 below, the Closing will take place at the offices of\nFenwick &amp; West, Two Palo Alto Square, Palo Alto, California 94306 at 1:30 p.m.,\nPacific Standard Time on June 30, 1998, or, if all conditions to closing have\nnot been satisfied or waived by such date, such other place, time and date as\nSeven and Portable may mutually select (the \"Closing Date\"). Concurrently with\nthe Closing, the Agreement of Merger will be filed in the office of the Delaware\nand California Secretaries of State. The Agreement of Merger provides that the\nMerger shall become effective upon filing with the California Secretary of\nState.\n\n                7.2 Exchange of Certificates.\n\n                        7.2.1 As of the Effective Time, all shares of Seven\nCommon Stock that are outstanding immediately prior thereto will, by virtue of\nthe Merger and without further action, cease to exist and will be converted into\nthe right to receive from Portable the number of shares \n\n                                      -23-\n\n\n\n\n   24\n\nof Portable Common Stock determined as set forth in Section 2.1.2, subject to\nSections 2.1.3, 2.1.4 and 2.2.\n\n                        7.2.2 As soon as practicable after the Effective Time,\neach holder of shares of Seven Common Stock that are not Seven Dissenting Shares\nwill surrender the certificate(s) for such shares (the \"SEVEN CERTIFICATES\"),\nduly endorsed as requested by Portable, to Portable for cancellation. Within\nfive (5) business days of the date that Portable receives written confirmation\nof the Effective Time, and conditioned upon Portable's receipt of such Seven\nCertificates and any other documentation deliverable by any such holder under\nthis Agreement, Portable will issue to each tendering holder of Seven\nCertificates a certificate for the number of shares of Portable Common Stock to\nwhich such holder is entitled pursuant to Section 2.1.2 hereof, less the shares\nof Portable Common Stock deposited into escrow pursuant to Section 2.4 hereof,\nand distribute any cash payable under Section 2.2.\n\n                        7.2.3 No dividends or distributions payable to holders\nof record of Portable Common Stock after the Effective Time, or cash payable in\nlieu of fractional shares, will be paid to the holder of any unsurrendered Seven\nCertificate(s) until the holder of the Seven Certificate(s) surrenders such\nSeven Certificate(s). Subject to the effect, if any, of applicable escheat and\nother laws, following surrender of any Seven Certificate, there will be\ndelivered to the person entitled thereto, without interest, the amount of any\ndividends and distributions therefor paid with respect to Portable Common Stock\nso withheld as of any date subsequent to the Effective Time and prior to such\ndate of delivery.\n\n                        7.2.4 All Portable Common Stock delivered upon the\nsurrender of Seven Common Stock in accordance with the terms hereof will be\ndeemed to have been delivered in full satisfaction of all rights pertaining to\nsuch Seven Common Stock. There will be no further registration of transfers on\nthe stock transfer books of Seven or its transfer agent of the Seven Common\nStock. If, after the Effective Time, Seven Certificates are presented for any\nreason, they will be canceled and exchanged as provided in this Section 7.2.\n\n                        7.2.5 Until certificates representing Seven Common Stock\noutstanding prior to the Merger are surrendered pursuant to Section 7.2.2 above,\nsuch certificates will be deemed, for all purposes, to evidence ownership of the\nnumber of shares of Portable Common Stock into which the Seven Common Stock will\nhave been converted, reduced by the number of shares withheld as Escrow Shares.\n\n                7.3 Assumption of Options. As soon as practicable after the\nEffective Time, Portable will notify in writing each holder of a Seven Option of\nthe assumption of such Seven Option by Portable, and the number of shares of\nPortable Common Stock that are then subject to such Portable Option and the\nexercise price of such Portable Option, as determined pursuant to Sections 2.1\nand 2.3 hereof.\n\n\n                                      -24-\n\n\n\n   25\n\n\n\n        8. CONDITIONS TO OBLIGATIONS OF SEVEN\n\n                The obligations of Seven and the Principal Shareholders\nhereunder are subject to the fulfillment or satisfaction, on and as of the\nClosing, of each of the following conditions (any one or more of which may be\nwaived by Seven, but only in a writing signed by Seven):\n\n                8.1 Accuracy of Representations and Warranties. The\nrepresentations and warranties of Portable and Portable Subsidiary set forth in\nSection 4 shall be true and accurate in every material respect on and as of the\nClosing with the same force and effect as if they had been made at the Closing,\nand Seven shall receive a certificate to such effect executed by Portable's\nPresident and Chief Financial Officer.\n\n                8.2 Covenants. Portable shall have performed and complied in all\nmaterial respects with all of its covenants contained in Section 6 on or before\nthe Closing, and Seven shall receive a certificate to such effect signed by\nPortable's President and Chief Financial Officer.\n\n                8.3 Compliance with Law. There shall be no order, decree, or\nruling by any court or governmental agency or threat thereof, or any other fact\nor circumstance, which would prohibit or render illegal the transactions\ncontemplated by this Agreement.\n\n                8.4 Government Consents. There shall have been obtained at or\nprior to the Closing Date such permits or authorizations, and there shall have\nbeen taken such other action, as may be required to consummate the Merger by any\nregulatory authority having jurisdiction over the parties and the actions herein\nproposed to be taken, including but not limited to requirements under applicable\nfederal and state securities laws.\n\n                8.5 Opinion of Portable's Counsel. Seven shall have received\nfrom counsel to Portable, an opinion substantially in the form of Exhibit 8.5.\n\n                8.6 Employment and Non-Competition Agreements. Portable shall\nexecute and deliver Employment and Non-Competition Agreements in favor of\nMelissa Widner and Andrew Dent substantially in the forms attached as Exhibit\n8.6A and 8.6B.\n\n                8.7 No Litigation. No litigation or proceeding shall be\nthreatened or pending for the purpose or with the probable effect of enjoining\nor preventing the consummation of any of the transactions contemplated by this\nAgreement, or which could be reasonably expected to have a material adverse\neffect on the present or future operations or financial condition of Portable.\n\n        9. CONDITIONS TO OBLIGATIONS OF PORTABLE\n\n                The obligations of Portable hereunder are subject to the\nfulfillment or satisfaction on, and as of the Closing, of each of the following\nconditions (any one or more of which may be waived by Portable, but only in a\nwriting signed by a duly authorized representative of Portable):\n\n\n                                      -25-\n\n\n   26\n\n                9.1 Accuracy of Representations and Warranties. The\nrepresentations and warranties of Seven and the Principal Shareholders set forth\nin Section 3 shall be true and accurate in every material respect on and as of\nthe Closing with the same force and effect as if they had been made at the\nClosing, and Portable shall receive a certificate to such effect executed by\nSeven's President and Chief Financial Officer.\n\n                9.2 Covenants. Seven shall have performed and complied in all\nmaterial respects with all of its covenants contained in Section 5 on or before\nthe Closing, and Portable shall receive a certificate to such effect signed by\nSeven's President and Chief Financial Officer.\n\n                9.3 Compliance with Law. There shall be no order, decree, or\nruling by any court or governmental agency or threat thereof, or any other fact\nor circumstance, which would prohibit or render illegal the transactions\ncontemplated by this Agreement.\n\n                9.4 Government Consents. There shall have been obtained at or\nprior to the Closing Date such permits or authorizations, and there shall have\nbeen taken such other action, as may be required to consummate the Merger by any\nregulatory authority having jurisdiction over the parties and the actions herein\nproposed to be taken, including but not limited to requirements under applicable\nfederal and state securities laws.\n\n                9.5 Opinion of Seven's Counsel. Portable shall have received\nfrom counsel to Seven, an opinion substantially in the form of Exhibit 9.5.\n\n                9.6 Consents. Portable shall have received duly executed copies\nof all material third-party consents, approvals, assignments, waivers,\nauthorizations or other certificates specified on Exhibit 9.6.\n\n                9.7 No Litigation. No litigation or proceeding shall be\nthreatened or pending for the purpose or with the probable effect of enjoining\nor preventing the consummation of any of the transactions contemplated by this\nAgreement, or which could be reasonably expected to have a material adverse\neffect on the present or future operations or financial condition of Seven.\n\n                9.8 Requisite Approvals. The principal terms of this Agreement\nand the Agreement of Merger shall have been approved and adopted by Seven\nShareholders, as required by applicable law and Seven's Articles of\nIncorporation and Bylaws. Not less than ninety percent (90%) of the outstanding\nequity securities of Seven shall have voted in favor of the Merger.\n\n                9.9 Seven Dissenting Shares. The Seven Dissenting Shares shall\nnot constitute more than five percent (5%) of the total number of shares of\nSeven Common Stock outstanding immediately prior to the Effective Time.\n\n                9.10 Escrow. Portable shall have received the Escrow Agreement\nexecuted by Seven and Melissa Widner, as the Representative for all Seven\nShareholders, the Escrow Agent and by all shareholders of Seven voting for\napproval of this Agreement and the Merger providing for the escrow of the Escrow\nShares on the terms and conditions of the Escrow Agreement.\n\n                                      -26-\n\n\n   27\n\n                9.11 Exercise of Seven Derivative Securities. All outstanding\nSeven Derivative Securities shall have been exercised in full and thereby\nconverted into shares of Seven Common Stock.\n\n                9.12 Employment and Non-Competition Agreements. Portable shall\nhave received from each of Melissa Widner and Andrew Dent a duly executed\nEmployment and Non-Competition Agreement substantially in the form attached as\nExhibit 8.6.\n\n                9.13 Termination of Rights. Any registration rights, rights of\nrefusal, rights to any liquidation preference, or redemption rights of any Seven\nShareholder shall have been terminated or waived as of the Closing.\n\n                9.14 Maximum Number of Shares. Immediately prior to the Merger,\nSeven shall not have outstanding a Number of Fully Diluted Seven Shares that\nwould require the issuance of more than 2,082,118 shares of Portable Common\nStock (including options exercisable therefor) in exchange therefor.\n\n                9.15 Resignation of Directors. By virtue of the Merger at the\nEffective Time and without further action on the part of any person, the\ndirectors of Seven in office immediately prior to the Effective Time of the\nMerger will be deemed to have resigned as directors of Seven effective as of the\nEffective Time.\n\n                9.16 Investment Letters Executed. Each of the Seven Shareholders\nshall have executed and delivered to Seven an Investment Representation Letter,\nand substantially all of the holders of outstanding Seven Options shall have\nexecuted and delivered to Portable an Optionee Investment Representation Letter.\n\n                9.17 Continued Employment of Certain Employees. Each of the\npersons listed on Exhibit 9.17 will be employed by Seven on the Closing Date.\n\n        10. TERMINATION OF AGREEMENT\n\n                10.1 Prior to Closing.\n\n                        10.1.1 This Agreement may be terminated at any time\nprior to the Closing by the mutual written consent of each of the parties\nhereto.\n\n                        10.1.2 Unless otherwise agreed by the parties hereto,\nthis Agreement will be terminated if all conditions to the Closing have not been\nsatisfied or waived on or before July 15, 1998.\n\n                10.2 At the Closing. At the Closing, this Agreement may be\nterminated and abandoned:\n\n\n                                      -27-\n\n\n   28\n\n                        10.2.1 By Portable if any of the conditions precedent to\nPortable's obligations set forth in Section 9 above have not been fulfilled or\nwaived at and as of the Closing; or\n\n                        10.2.2 By Seven if any of the conditions precedent to\nSeven's obligations set forth in Section 8 above have not been fulfilled or\nwaived at and as of the Closing.\n\n                        Any termination of this Agreement under this Section\n10.2 will be effective by the delivery of notice of the terminating party to the\nother party hereto.\n\n                10.3 No Liability. Any termination of this Agreement pursuant to\nthis Section 10 will be without further obligation or liability upon any party\nin favor of the other party hereto other than the obligations provided in\nSections 12.2 and 12.16 and in the Reciprocal Nondisclosure Agreement between\nSeven and Portable dated February 1, 1998, which will survive termination of\nthis Agreement; provided, however, that nothing herein will limit the obligation\nof Seven and Portable to use their best efforts to cause the Merger to be\nconsummated, as set forth in Sections 5.10 and 6.3 hereof, respectively.\n\n                10.4 Break-Up Fee. Portable agrees to pay Seven a \"break-up fee\"\nof Five Hundred Thousand Dollars ($500,000.00) in the event the Closing fails to\noccur unless such failure is due to the failure or non-satisfaction of\nconditions set forth in Sections 9.1, 9.2, 9.5, 9.6, 9.8, 9.9, 9.10, 9.11, 9.12,\n9.13, 9.14, 9.16 or 9.17. Such amounts shall be paid to Seven within thirty (30)\ndays of the termination of this Agreement in cash, or partly in cash and partly\nby cancellation of that certain Note dated May 23, 1998 payable to Portable\ndescribed in the Seven Disclosure Schedule.\n\n        11.     SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION AND REMEDIES,\n                CONTINUING COVENANTS\n\n                11.1 Survival of Representations. All representations,\nwarranties and covenants of Portable contained in this Agreement will remain\noperative and in full force and effect, regardless of any investigation made by\nor on behalf of the parties to this Agreement, until the earlier of the\ntermination of this Agreement or one year after the Closing Date, whereupon such\nrepresentations, warranties and covenants will expire (except for covenants that\nby their terms survive for a longer period). Unless otherwise specified herein,\nall representations, warranties and covenants of Seven will survive the\nEffective Time and will continue until the expiration of the period set forth in\nthe previous sentence and covenants that by their terms survive thereafter will\ncontinue to survive in accordance with their terms.\n\n                11.2 Agreement to Indemnify. Subject to the limitations set\nforth in this Section 11, Seven will indemnify and hold harmless Portable and\nits officers, directors, agents and employees, and each person, if any, who\ncontrols or may control Portable within the meaning of the Securities Act\n(hereinafter referred to individually as an \"INDEMNIFIED PERSON\" and\ncollectively as \"INDEMNIFIED PERSONS\") from and against any and all claims,\ndemands, actions, causes of actions, losses, costs, damages, liabilities and\nexpenses including, without \n\n\n                                      -28-\n\n\n\n   29\n\nlimitation, reasonable legal fees actually incurred by Portable (hereinafter\nreferred to as \"DAMAGES\"):\n\n                        (a) Arising out of any misrepresentation or breach of or\ndefault in connection with any of the representations, warranties and covenants\ngiven or made by Seven in this Agreement or any certificate, document or\ninstrument delivered by or on behalf of Seven pursuant hereto (other than with\nrespect to changes in the truth or accuracy of the representations and\nwarranties of Seven under this Agreement after the date hereof if Seven has\nadvised Portable of such changes in an update to Exhibit 3.0 delivered prior to\nthe Closing and Portable has nonetheless proceeded with the Closing); or\n\n                        (b) Resulting from any failure of any Seven Shareholders\nto have good, valid and marketable title to the issued and outstanding Seven\nCommon Stock held by such shareholders, free and clear of all liens, claims,\npledges, options, adverse claims, assessments or charges of any nature\nwhatsoever, or to have full right, capacity and authority to vote such Seven\nCommon Stock in favor of the Merger and the other transactions contemplated by\nthe Agreement of Merger.\n\n        In seeking indemnification for Damages under this Section, the\nIndemnified Persons shall exercise their remedies solely with respect to the\nEscrow Shares and any other assets deposited in escrow pursuant to the Escrow\nAgreement; provided, however, that no such claim for Damages will be asserted\nafter the expiration of the Escrow Period. Except for intentional fraud: (i) no\nSeven Shareholder shall have any liability to an Indemnified Person under this\nAgreement except to the extent of such Seven Shareholder's Escrow Shares and any\nother assets deposited under the Escrow Agreement and (ii) the remedies set\nforth in this Section 11.2 shall be the exclusive remedies of Portable and the\nother Indemnified Persons hereunder against any Seven Shareholder. The\nindemnification provided for in this Section 11.2 shall not apply unless the\naggregate Damages for which one or more Indemnified Persons is entitled to\nindemnification exceeds Twenty-Five Thousand Dollars ($25,000) (the \"BASKET\"),\nin which case the indemnification provided for in this Section 11.2 shall apply\nto the extent the aggregate Damages for which one or more Indemnified Persons is\nentitled to indemnification exceeds Twelve Thousand Five Hundred Dollars\n($12,500).\n\n                11.3 Notice and Defense of Third Party Claims.\n\n                        (a) The Indemnified Persons shall give prompt written\nnotice to the Representative of any claim by a third party that might give rise\nto a claim by the Indemnified Persons based upon the indemnity agreement\ncontained in Section 11.2 hereof, stating the nature and basis of such claim and\nthe amount thereof, to the extent known. The Indemnified Persons shall have the\nsole right to control the defense of any such action, suit or proceeding. The\nRepresentative shall be kept fully informed of such action, suit or proceeding\nat all stages thereof. In addition, the Representative may, at its expense,\nparticipate in the defense of any such action, suit or proceeding with one\ncounsel of its choice; provided, however, that the Indemnified Persons shall at\nall times have the right to control such defense. The parties hereto \n\n                                      -29-\n\n\n   30\n\nshall render to each other such assistance as they may reasonably require of\neach other in order to ensure the proper and adequate defense of any such\naction, suit or proceeding.\n\n                        (b) Neither the Indemnified Persons nor the\nRepresentative shall make any settlement of any claims without the written\nconsent of the others, which consent shall not be unreasonably withheld.\n\n        12. MISCELLANEOUS\n\n                12.1 Governing Law. The internal laws of the State of California\n(irrespective of its choice of law principles) will govern the validity of this\nAgreement, the construction of its terms, and the interpretation and enforcement\nof the rights and duties of the parties hereto.\n\n                12.2 Assignment; Binding Upon Successors and Assigns. Neither\nparty hereto may assign any of its rights or obligations hereunder without the\nprior written consent of the other party hereto. This Agreement will be binding\nupon and inure to the benefit of the parties hereto and their respective\nsuccessors and permitted assigns.\n\n                12.3 Severability. If any provision of this Agreement, or the\napplication thereof, will for any reason and to any extent be invalid or\nunenforceable, the remainder of this Agreement and application of such provision\nto other persons or circumstances will be interpreted so as reasonably to effect\nthe intent of the parties hereto. The parties further agree to replace such void\nor unenforceable provision of this Agreement with a valid and enforceable\nprovision that will achieve, to the extent possible, the economic, business and\nother purposes of the void or unenforceable provision.\n\n                12.4 Counterparts. This Agreement may be executed in any number\nof counterparts, each of which will be an original as regards any party whose\nsignature appears thereon and all of which together will constitute one and the\nsame instrument. This Agreement will become binding when one or more\ncounterparts hereof, individually or taken together, will bear the signatures of\nboth parties reflected hereon as signatories.\n\n                12.5 Other Remedies. Except as otherwise provided herein, any\nand all remedies herein expressly conferred upon a party will be deemed\ncumulative with and not exclusive of any other remedy conferred hereby or by law\non such party, and the exercise of any one remedy will not preclude the exercise\nof any other.\n\n                12.6 Amendment and Waivers. Any term or provision of this\nAgreement may be amended, and the observance of any term of this Agreement may\nbe waived (either generally or in a particular instance and either retroactively\nor prospectively) only by a writing signed by the party to be bound thereby. The\nwaiver by a party of any breach hereof or default in the performance hereof will\nnot be deemed to constitute a waiver of any other default or any succeeding\nbreach or default. The Agreement may be amended by the parties hereto at any\ntime before or after approval of the Seven Shareholders, but, after such\napproval, no amendment will \n\n\n                                      -30-\n\n\n   31\n\nbe made which by applicable law requires the further approval of the Seven\nShareholders without obtaining such further approval.\n\n                12.7 No Waiver. The failure of any party to enforce any of the\nprovisions hereof will not be construed to be a waiver of the right of such\nparty thereafter to enforce such provisions.\n\n                12.8 Expenses. Portable will pay promptly (and in any event\nwithin thirty (30) days) upon demand the reasonable legal and accounting fees\nand expenses, in excess of $2,000, incurred by Seven in this transaction, not to\nexceed a combined total of $55,000.\n\n                12.9 Attorneys' Fees. Should suit be brought to enforce or\ninterpret any part of this Agreement, the prevailing party will be entitled to\nrecover, as an element of the costs of suit and not as damages, reasonable\nattorneys' fees to be fixed by the court (including without limitation, costs,\nexpenses and fees on any appeal). The prevailing party will be entitled to\nrecover its costs of suit, regardless of whether such suit proceeds to final\njudgment.\n\n                12.10 Notices. Any notice or other communication required or\npermitted to be given under this Agreement will be in writing, will be delivered\npersonally or by registered or certified mail, postage prepaid and will be\ndeemed given upon delivery, if delivered personally, or three days after deposit\nin the mails, if mailed, to the following addresses:\n\n                (i)  If to Portable or Portable Subsidiary:\n\n                           Portable Software Corporation\n                           6222-185th Street, N.E.\n                           Redmond, WA  98122\n                           Attention:  Fred Ingham\n\n                           with a copy to:\n\n                           Fenwick &amp; West LLP\n                           Two Palo Alto Square\n                           Palo Alto, CA  94306\n                           Attention:  Matthew P. Quilter, Esq.\n\n                (ii) If to Seven:\n\n                           7Software, Inc.\n                           25 Loyola Avenue\n                           Menlo Park, CA  94025\n                           Attention:  President\n\n                           with a copy to:\n\n                           Gray Cary Ware &amp; Freidenrich\n\n\n                                      -31-\n\n   32\n\n                           400 Hamilton Avenue\n                           Palo Alto, CA  94301\n                           Attention:  Peter M. Astiz, Esq.\n\nor to such other address as a party may have furnished to the other parties in\nwriting pursuant to this Section 12.10.\n\n                12.11 Construction of Agreement. This Agreement has been\nnegotiated by the respective parties hereto and their attorneys and the language\nhereof will not be construed for or against either party. A reference to a\nSection or an exhibit will mean a Section in, or exhibit to, this Agreement\nunless otherwise explicitly set forth. The titles and headings herein are for\nreference purposes only and will not in any manner limit the construction of\nthis Agreement which will be considered as a whole.\n\n                12.12 No Joint Venture. Nothing contained in this Agreement will\nbe deemed or construed as creating a joint venture or partnership between any of\nthe parties hereto. No party is by virtue of this Agreement authorized as an\nagent, employee or legal representative of any other party. No party will have\nthe power to control the activities and operations of any other and their status\nis, and at all times, will continue to be, that of independent contractors with\nrespect to each other. No party will have any power or authority to bind or\ncommit any other. No party will hold itself out as having any authority or\nrelationship in contravention of this Section.\n\n                12.13 Further Assurances. Each party agrees to cooperate fully\nwith the other parties and to execute such further instruments, documents and\nagreements and to give such further written assurances as may be reasonably\nrequested by any other party to evidence and reflect the transactions described\nherein and contemplated hereby and to carry into effect the intents and purposes\nof this Agreement.\n\n                12.14 Absence of Third Party Beneficiary Rights. No provisions\nof this Agreement are intended, nor will be interpreted, to provide or create\nany third party beneficiary rights or any other rights of any kind in any\nclient, customer, affiliate, shareholder, partner or any party hereto or any\nother person or entity unless specifically provided otherwise herein, and,\nexcept as so provided, all provisions hereof will be personal solely between the\nparties to this Agreement.\n\n                12.15 Public Announcement. Portable will, at its discretion\nissue a press release announcing the Merger, within six (6) months after the\nEffective Date. Portable may issue such press releases, and make such other\ndisclosures regarding the Merger, as it determines are required under applicable\nsecurities laws or regulatory rules. Prior to the publication of such press\nrelease (unless this Agreement has been terminated), neither party will make any\npublic announcement relating to this Agreement or the transactions contemplated\nhereby.\n\n                12.16 Confidentiality. Seven and Portable each recognize that\nthey have received and will receive confidential information concerning the\nother during the course of the Merger negotiations and preparations.\nAccordingly, Portable and Seven and each Principal \n\n                                      -32-\n\n   33\n\n\nShareholder each agrees (a) to use its respective best efforts to prevent the\nunauthorized disclosure of any confidential information concerning the other\nthat was or is disclosed during the course of such negotiations and\npreparations, and is clearly designated in writing as confidential at the time\nof disclosure, and (b) to not make use of or permit to be used any such\nconfidential information other than for the purpose of effectuating the Merger\nand related transactions. The obligations of this section will not apply to\ninformation that (i) is or becomes part of the public domain, (ii) is disclosed\nby the disclosing party to third parties without restrictions on disclosure,\n(iii) is received by the receiving party from a third party without breach of a\nnondisclosure obligation to the other party or (iv) is required to be disclosed\nby law. If this Agreement is terminated, all copies of documents containing\nconfidential information shall be returned by the receiving party to the\ndisclosing party.\n\n                12.17 Entire Agreement. This Agreement and the exhibits hereto\nconstitute the entire understanding and agreement of the parties hereto with\nrespect to the subject matter hereof and supersede all prior and contemporaneous\nagreements or understandings, inducements or conditions, express or implied,\nwritten or oral, between the parties with respect hereto other than the\nReciprocal Nondisclosure Agreement between Seven and Portable dated February 1,\n1998. The express terms hereof control and supersede any course of performance\nor usage of the trade inconsistent with any of the terms hereof.\n\n\n                                      -33-\n\n   34\n\n\n\n\n       IN WITNESS WHEREOF, the parties hereto have executed this Agreement and\nPlan of Reorganization as of the date first above written.\n\n\nPORTABLE SOFTWARE CORPORATION         7SOFTWARE, INC.\n\nBy: \/s\/ STERLING WILSON               By: \/s\/ MELISSA WIDNER\n   -----------------------------         ---------------------------------------\n   Sterling Wilson, Chief                Melissa Widner\n   Financial Officer                     CEO\/President\n\n\nPSC MERGER CORP.\n\nBy: \/s\/ DOUGLAS CHOI\n   -----------------------------\n   Douglas Choi, President\n\n\nPRINCIPAL SHAREHOLDERS:\n\n\/s\/ MELISSA WIDNER                    \/s\/ ANDREW DENT\n--------------------------------      ------------------------------------------\nMelissa Widner                        Andrew Dent\n\n\n\n                                      -34-\n\n   35\n\n\n\n                                    Exhibit A\n\n                               Agreement of Merger\n\n\n\n   36\n\n\n\n                                   Exhibit 2.4\n\n                                Escrow Agreement\n\n\n\n   37\n\n\n\n                                   Exhibit 2.5\n\n                      Amended Articles and Bylaws of Seven\n\n\n\n   38\n\n\n\n                                  Exhibit 2.8A\n\n                        Investment Representation Letter\n\n\n\n   39\n\n\n\n                                  Exhibit 2.8B\n\n                    Optionee Investment Representation Letter\n\n\n\n   40\n\n\n\n                                   Exhibit 3.0\n\n                            Seven Disclosure Schedule\n\n\n\n   41\n\n\n\n                                   Exhibit 3.8\n\n                           Seven Financial Statements\n\n\n\n   42\n\n\n\n                                   Exhibit 4.0\n\n                          Portable Disclosure Schedule\n\n         This disclosure schedule (this \"DISCLOSURE SCHEDULE\") contains\nexceptions to the representations and warranties made by Portable and Portable\nSubsidiary in Section 4 of the Agreement and Plan of Reorganization dated as of\nJune 30, 1998 (the \"AGREEMENT\") by and among Portable, Portable Subsidiary,\nSeven and the Principal Shareholders. The section references used herein are to\nparticular subsections in Section 4 of the Agreement. Any information disclosed\nunder any section in this Disclosure Schedule is deemed to be disclosed and\nincorporated in any other section of this Disclosure Schedule where such\ndisclosure would or might be appropriate. Capitalized terms used in this\nDisclosure Agreement, unless otherwise specified, have the same meanings given\nto them in the Agreement. Nothing in this Disclosure Schedule constitutes an\nadmission to any third party of any liability or obligation of Portable or\nPortable Subsidiary to any third party, nor an admission that any matter\nreferred to herein is or would be material or would be reasonably likely to\nresult in a material adverse effect on Portable or Portable Subsidiary.\n\n        Section 4.3. Capitalization.\n\n\n\n   43\n\n\n\n                                   Exhibit 4.5\n\n                          Portable Financial Statements\n\n\n\n   44\n\n\n\n                                   Exhibit 6.5\n\n                           Persons Offered Employment\n\n                                   Andrew Dent\n                                   Elena Donio\n                                   Terry Glenn\n                                    Ian Huynh\n                                 Vincent Payette\n                                  Kristin Reams\n                                 Karen Skjervem\n                                 Erik Wahlstrom\n                                 Melissa Widner\n\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7179],"corporate_contracts_industries":[9513],"corporate_contracts_types":[9622,9626],"class_list":["post-43202","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-concur-technologies-inc","corporate_contracts_industries-technology__software","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43202","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43202"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43202"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43202"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43202"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}