EXHIBIT 2.1
INTEREST PURCHASE AGREEMENT
among:
PUMA TECHNOLOGY, INC.
a Delaware corporation;
DRY CREEK SOFTWARE LLC
a California limited liability company;
and
THE DRY CREEK MEMBERS
---------------------------
Dated as of July 7, 2000
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EXHIBITS
Exhibit A - Dry Creek Members
Exhibit B - Certain definitions
Exhibit C - Form of Escrow Agreement
Exhibit D1 - Form of Employment and Release Agreements for
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and
▇▇▇▇▇ ▇▇▇▇
Exhibit D2 - Form of Employment and Release Agreements for ▇▇▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Exhibit D3 - Form of Employment and Release Agreements for all
other Dry Creek Employees
Exhibit D4 - Form of Noncompetition Agreement to be executed by
▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇
Exhibit E - Dry Creek Disclosure Schedule
Exhibit F - Tufts ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP Legal Opinion
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INTEREST PURCHASE AGREEMENT
THIS INTEREST PURCHASE AGREEMENT ("Agreement") is made and entered into as
of July 7, 2000, by and among: Puma Technology, Inc., a Delaware corporation
("PUMATECH"); Dry Creek Software LLC, a California limited liability company
("Dry Creek"); and all of the members of Dry Creek Software LLC, as identified
on EXHIBIT A (the "Dry Creek Members"). Certain capitalized terms used in this
Agreement are defined in EXHIBIT B.
RECITALS
A. PUMATECH, Dry Creek and the Dry Creek Members intend to effect an
exchange of all of the issued and outstanding membership interests, economic
interests, options, and rights to acquire interests (the "Interests") of Dry
Creek for newly issued shares of PUMATECH common stock ("PUMATECH Common
Stock").
B. This Agreement contemplates a transaction in which PUMATECH will
acquire all of the outstanding Interests of Dry Creek for shares of PUMATECH
Common Stock and cash in a taxable purchase of such Interests.
C. This Agreement has been adopted and approved by the board of
directors of PUMATECH and the managers of Dry Creek.
AGREEMENT
The parties to this Agreement agree as follows:
SECTION 1. DESCRIPTION OF TRANSACTION
1.1 PURCHASE OF INTERESTS.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, at the Closing, PUMATECH agrees to pay the following total
consideration (the "Total Consideration") in exchange for all outstanding Dry
Creek membership interests, economic interests, options, and rights to acquire
interests (the "Dry Creek Interests") and the Dry Creek Members agree to assign
and transfer to PUMATECH in exchange for the following Total Consideration all
outstanding Dry Creek Interests:
(i) $1,987,500 in cash (the "Cash Consideration"); and
(ii) 153,353 shares of PUMATECH common stock, which is equal
to $4,543,113 divided by the PUMATECH Average Stock Price (the number of shares
determined
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above being referred to herein as the "PUMATECH Stock"). No adjustment shall be
made in the number of shares of PUMATECH Common Stock issued pursuant to this
Agreement as a result of any increase or decrease in the market price of
PUMATECH Common Stock prior to the Closing.
Thereupon, Dry Creek will be a single member limited liability company which is
wholly-owned by PUMATECH and the corporate existence of Dry Creek, with all its
purposes, powers and objects, shall continue unaffected and unimpaired.
1.2 ESCROW OF PUMATECH STOCK. At the Closing, PUMATECH shall segregate
from the PUMATECH Stock issuable hereunder 22,044 shares of PUMATECH Stock
represented by one stock certificate (the "Escrow Stock") and cause such stock
to be deposited with U.S. Bank Trust National Association to act as escrow agent
(the "Escrow Agent"), under the escrow agreement in the form attached hereto as
EXHIBIT C.
1.3 CLOSING. The consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of General Counsel
Associates LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ at 1:00 p.m. on
July 14, 2000 (provided that all other conditions set forth in Sections 7 and 8
have been satisfied or waived) or on such other date as is mutually agreed upon
by Dry Creek and PUMATECH. (The date on which the Closing actually takes place
is referred to in this Agreement as the "Closing Date.").
1.4 DELIVERIES AT EXECUTION AND CLOSING.
(a) Contemporaneously with the execution and delivery of this
Agreement Dry Creek shall deliver to PUMATECH a certificate pursuant to which
Dry Creek represents and warrants to PUMATECH that attached to such certificate
are resolutions duly adopted by the unanimous consent of its managers approving
this Agreement and the transactions contemplated hereby.
(b) At the Closing: (i) PUMATECH and each of ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇▇ and at least seven out of the remaining nine Dry Creek employees
shall accept at-will employment with PUMATECH and enter into agreements between
PUMATECH and each of them regarding their employment offers and release
agreements as set forth in the agreements in the form of EXHIBIT D1 (in the case
of ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇), EXHIBIT D2 (in
the case of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇) and EXHIBIT D3 (in the case of
all other Dry Creek employees); (ii) PUMATECH and each of ▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ ▇▇▇▇ shall have executed the Noncompetition Agreements in the form of
EXHIBIT D4 (ii) the Dry Creek Members shall each deliver to PUMATECH (x) an
assignment of one hundred percent of their outstanding Dry Creek Interests;
(iii) Dry Creek and PUMATECH shall deliver the documents and agreements set
forth in Sections 7 and 8, respectively; and (iv) PUMATECH shall deliver checks
for the cash payments and the PUMATECH Stock in accordance with Sections 1.6(a)
and 1.6(g) and shall make the cash payments for fractional shares specified in
Section 1.6(f).
1.5 ARTICLES OF ORGANIZATION; MANAGERS.
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(a) The Articles of Organization of Dry Creek shall be amended and
restated as of the Closing in a form satisfactory to PUMATECH.
(b) The managers of Dry Creek immediately after the Closing shall
be those Persons designated by PUMATECH in its sole discretion.
1.6 THE PURCHASE.
(a) At the Closing, by virtue of the terms of this Agreement and
without any further action on the part of PUMATECH, Dry Creek or any Dry Creek
Member, each Member shall receive the following:
(i) ▇▇▇▇ ▇▇▇▇▇▇▇ shall receive 143,353 shares of PUMATECH
Stock and ▇▇▇▇▇▇▇▇ ▇▇▇▇ shall receive 10,000 shares of PUMATECH Stock; and
(ii) ▇▇▇▇ ▇▇▇▇▇▇▇ shall receive $1,809,500 in cash and
▇▇▇▇▇▇▇▇ ▇▇▇▇ shall receive $178,000 in cash.
(b) Notwithstanding anything to the contrary contained in this
Agreement, a portion of the shares of PUMATECH Stock issued in the transactions
contemplated by this Agreement shall be delivered into escrow and held as
specified in Section 1.2 and 1.7 hereof.
(c) In the event PUMATECH at any time or from time to time between
the date of this Agreement and the Closing declares or pays any dividend on
PUMATECH Stock payable in PUMATECH Stock or in any right to acquire PUMATECH
Stock, or effects a subdivision of the outstanding shares of PUMATECH Stock into
a greater number of shares of PUMATECH Stock (by stock dividends, combinations,
splits, recapitalizations and the like), or in the event the outstanding shares
of PUMATECH Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of PUMATECH Stock, then the number of
shares of PUMATECH Stock issued to the Members shall be appropriately adjusted.
(d) The shares of PUMATECH Stock to be issued in the transaction
shall be characterized as "restricted securities" for purposes of Rule 144 under
the Securities Act, and each certificate representing any of such shares shall
bear a legend identical or similar in effect to the following legend (together
with any other legend or legends required by applicable state securities laws or
otherwise):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS REGISTERED UNDER THE ACT OR
UNLESS AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT IS AVAILABLE."
(e) If any Dry Creek Interests outstanding immediately prior to
the Closing are
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unvested or are subject to a repurchase option, risk of forfeiture or other
condition under any applicable restricted purchase agreement or other agreement
with Dry Creek, then the shares of PUMATECH Stock issued in exchange for such
Dry Creek Interests will also be unvested and subject to the same repurchase
option, risk of forfeiture or other condition, and the certificates representing
such shares of PUMATECH Stock may accordingly be marked with appropriate
legends.
(f) No fractional shares of PUMATECH Stock shall be issued in
connection with the transactions contemplated by this Agreement, and no
certificates for any such fractional shares shall be issued. In lieu of such
fractional shares, any holder of Dry Creek Interests who would otherwise be
entitled to receive a fraction of a share of PUMATECH Stock (after aggregating
all fractional shares of PUMATECH Stock issuable to such holder) shall, upon
surrender of such holder's assignment of Dry Creek Interests, be paid in cash
the dollar amount (rounded to the nearest whole cent), without interest,
determined by multiplying such fraction by the PUMATECH Average Stock Price. In
no case shall any holder of Dry Creek Interests be entitled to receive cash for
fractional shares in an amount equal to or greater than the value of one share
of PUMATECH Stock.
(g) PUMATECH shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable to any holder or former holder of
Dry Creek Interests pursuant to this Agreement such amounts as PUMATECH may be
required to deduct or withhold therefrom under the Internal Revenue Code of
1986, as amended (the "Code") or under any provision of state, local or foreign
tax law. To the extent such amounts are so deducted or withheld, such amounts
shall be treated for all purposes under this Agreement as having been paid to
the Person to whom such amounts would otherwise have been paid.
(h) The shares of PUMATECH Stock issued upon surrender for
exchange of shares of Dry Creek Interests in accordance with the terms of this
Agreement shall be deemed to have been fully paid and issued in full
satisfaction of all rights pertaining to such shares.
1.7 ASSIGNMENT OF INTERESTS; ISSUANCE OF PUMATECH CERTIFICATES; ESCROW
SHARES.
(a) At the Closing, each Dry Creek Member shall deliver to
PUMATECH an assignment of such Member's entire Dry Creek Interests, together
with such other documents as may be reasonably required by PUMATECH. As soon as
practicable after the Closing, PUMATECH shall (i) deliver to (A) ▇▇▇▇ ▇▇▇▇▇▇▇ a
certificate representing 122,746 of the shares of PUMATECH Stock that such Dry
Creek Member has the right to receive pursuant to the provisions of Section 1.6
and (B) ▇▇▇▇▇▇▇▇ ▇▇▇▇ a certificate representing 8,563 of the shares of PUMATECH
Stock that such Dry Creek Member has the right to receive pursuant to the
provisions of Section 1.6, and (ii) deliver to the escrow agent under the Escrow
Agreement in the form of EXHIBIT C hereto (the "Escrow Agreement") (A) on behalf
and in the name of ▇▇▇▇ ▇▇▇▇▇▇▇ a certificate representing 20,607 of the shares
of PUMATECH Stock that such Dry Creek Member has the right to receive pursuant
to the provisions of Section 1.6 and (B) on behalf and in the name of ▇▇▇▇▇▇▇▇
▇▇▇▇ a certificate representing 1,437 of the shares of PUMATECH Stock that such
Dry Creek Member has the right to receive pursuant to the provisions of Section
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1.6 (the "Escrow Shares"). If any shares of PUMATECH Stock are to be issued in
the name of a person other than the person in whose name the Dry Creek Interests
and related assignment are registered, it shall be a condition to the issuance
of such shares that (i) such issuance shall be accompanied by appropriate
documentation as may be required by PUMATECH, (ii) such transfer shall otherwise
be proper and (iii) the person requesting such transfer shall pay PUMATECH, or
its exchange agent, any transfer or other taxes payable by reason of the
foregoing or establish to the satisfaction of PUMATECH that such taxes have been
paid or are not required to be paid. If any assignment of a Dry Creek Interest
shall have been lost, stolen or destroyed, PUMATECH may, in its discretion and
as a condition precedent to the issuance of any certificate representing
PUMATECH Stock, require the owner of such lost, stolen or destroyed certificate
representing a Dry Creek Interest to provide an appropriate affidavit with
respect to such certificate representing the Dry Creek Interest.
(b) No dividends or other distributions declared or made with
respect to PUMATECH Stock with a record date after the Closing shall be paid to
the holder of any unassigned Dry Creek Interest with respect to the shares of
PUMATECH Stock represented thereby, and no cash payment in lieu of any
fractional share shall be paid to any such holder, until such holder assigns
such Dry Creek Interest in accordance with this Section 1.7 (at which time such
holder shall be entitled to receive all such dividends and distributions and
such cash payment payable subsequent to the Closing but prior to the assignment
of such Dry Creek Interest).
1.8 TAX CONSEQUENCES. For United States federal income tax purposes, the
transactions contemplated by this Agreement are intended to constitute a taxable
sale of Dry Creek Interests to PUMATECH.
1.9 ACCOUNTING TREATMENT. For accounting purposes, the transaction is
intended to be treated as a "purchase."
1.10 FURTHER ACTION. If, at any time after the Closing, any further
action is determined by PUMATECH to be necessary or desirable to carry out the
purposes of this Agreement or to vest Dry Creek or PUMATECH with full right,
title and possession of and to all rights and property of Dry Creek, the
managers of Dry Creek and the officers and directors of PUMATECH shall be fully
authorized (in the name of Dry Creek and otherwise) to take such action.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF DRY CREEK
Except as set forth in the Disclosure Schedule attached hereto as EXHIBIT
E, Dry Creek represents and warrants, to PUMATECH that the representations and
warranties set forth below are true and correct as of the date of the Agreement
and will be correct and complete as of the Closing Date (as though made then and
as though the Closing Date were substituted for the date of this Agreement), as
follows:
2.1 DUE ORGANIZATION; SUBSIDIARIES; ETC.
(a) Dry Creek is a limited liability company duly organized,
validly existing and in good standing under the laws of the state of California.
Dry Creek has all necessary power and
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authority: (i) to conduct its business in the manner in which its business is
currently being conducted; (ii) to own and use its assets in the manner in which
its assets are currently owned; and (iii) to perform its obligations in all
material respects under all Material Contracts by which it is bound.
(b) Except as set forth on Part 2.1(b) of the Disclosure Schedule,
Dry Creek has not conducted any business under or otherwise used, for any
purpose or in any jurisdiction, any fictitious name, assumed name, trade name or
other name.
(c) Dry Creek is not, and has not been, required to be qualified,
authorized, registered or licensed to do business as a foreign limited liability
company in any jurisdiction, except where the failure to be so qualified,
authorized, registered or licensed would not have a Material Adverse Effect on
Dry Creek.
(d) Part 2.1(d) of the Disclosure Schedule accurately sets forth
the names of Dry Creek's managers. Dry Creek's managers have never appointed any
officers or established any committees.
(e) Dry Creek has no subsidiaries and has never owned,
beneficially or otherwise, any shares or other securities of, or any direct or
indirect interest of any nature in, any other Entity.
2.2 ARTICLES OF ORGANIZATION AND OPERATING AGREEMENT; RECORDS. Dry Creek
has delivered to PUMATECH accurate and complete copies of: (a) Dry Creek's
articles of organization and operating agreement, including all amendments
thereto; (b) the capital account records of Dry Creek; (c) statements of
information; and (d) the minutes and other records of the meetings and other
proceedings (including any actions taken by written consent or otherwise without
a meeting) of the members of Dry Creek and the managers of Dry Creek. There have
been no meetings or other proceedings or actions of the Members of Dry Creek or
the managers of Dry Creek that are not fully reflected in such minutes or other
records. There has not been any material violation of any of the provisions of
Dry Creek's articles of organization or operating agreement or of any resolution
adopted by Dry Creek's Members or Dry Creek's managers. The books of account,
capital account records, minute books and other records of Dry Creek are
accurate, up-to-date and complete in all material respects, and have been
maintained in accordance with all applicable material Legal Requirements.
2.3 MEMBER INTERESTS, ETC.
(a) EXHIBIT A to this Agreement sets forth the names and permanent
addresses of Dry Creek's Members as of the date of this Agreement and their
respective capital contributions contributed and owned of record by each of such
Dry Creek Members as of the date of this Agreement. There are no preemptive
rights applicable to any Interest of Dry Creek.
(b) Except as identified in Section 2.3(a), as of the date of this
Agreement, there is no: (i) outstanding Interest in Dry Creek or any
subscription, option, call, warrant or right (whether or not currently
exercisable) to acquire any Interest in Dry Creek; or (ii) outstanding security,
instrument or obligation that is or may become convertible into or exchangeable
for any Interest
8
in Dry Creek.
(c) Any Interests or other securities repurchased, redeemed or
otherwise reacquired by Dry Creek were validly reacquired in compliance with (i)
all applicable securities laws and other applicable Legal Requirements, and (ii)
any requirements set forth in applicable Contracts.
(d) All outstanding Dry Creek Interests have been issued in
compliance with (i) all applicable securities laws and other applicable Legal
Requirements, and (ii) all requirements set forth in applicable Contracts.
2.4 FINANCIAL STATEMENTS.
(a) Dry Creek has delivered to PUMATECH the following financial
statements and notes (collectively, the "Dry Creek Financial Statements"):
(i) the unaudited consolidated balance sheets of Dry Creek
as of December 31, 1999, and the related unaudited consolidated statements of
income, statements of members' equity and statements of cash flows of Dry Creek
for the year then ended, together with the notes thereto; and
(ii) the unaudited consolidated balance sheet of Dry Creek as
of July 7, 2000 (the "Unaudited Interim Balance Sheet"), and the related
unaudited consolidated statement of income of Dry Creek for the period then
ended.
(b) Dry Creek Financial Statements are accurate and complete in
all material respects and present fairly the financial position of Dry Creek as
of the respective dates thereof and the results of operations and cash flows of
Dry Creek for the periods covered thereby. Dry Creek Financial Statements have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods covered (except that the
financial statements referred to in Section 2.4(a)(ii) do not contain footnotes
and are subject to normal and recurring year-end audit adjustments, which will
not, individually or in the aggregate, be material in magnitude).
2.5 ABSENCE OF CHANGES. Except as set forth in Part 2.5 of the
Disclosure Schedule, and except with respect to the actions contemplated by this
agreement since July 7, 2000:
(a) there has not been any material adverse change in Dry Creek's
business, condition, assets, liabilities, operations or financial performance,
and no event has occurred that will, or could reasonably be expected to, have a
Material Adverse Effect on Dry Creek;
(b) there has not been any material loss, damage or destruction
to, or any interruption in the use of, any of Dry Creek's assets (whether or not
covered by insurance);
(c) Dry Creek has not declared, accrued, set aside or paid any or
made any distribution in respect of any Dry Creek Interest, and has not
repurchased, redeemed or otherwise reacquired any Dry Creek Interest or other
securities;
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(d) Dry Creek has not sold, issued or authorized the issuance of
(i) any interest or other security, (ii) any option, call, warrant or right to
acquire, or otherwise relating to, any interest or any other security, or (iii)
any instrument convertible into or exchangeable for any interest or other
security;
(e) Dry Creek has not made any capital expenditure which
individually exceeds $10,000 or, when added to all other capital expenditures
made by Dry Creek since July 7, 2000, exceeds $25,000 in the aggregate;
(f) Dry Creek has not (i) entered into or permitted any of the
assets owned or used by it to become bound by any Material Contract (as defined
in Section 2.10(a)), or (ii) amended or prematurely terminated, or waived any
material right or remedy under any Material Contract to which it is or was a
party or under which it has or had any rights or obligations;
(g) Dry Creek has not (i) acquired, leased or licensed any right
or other assets from any other Person (other than immaterial rights or other
immaterial assets acquired, leased or licensed by Dry Creek from other Persons
in the ordinary course of business and consistent with Dry Creek's past
practices), (ii) sold, assigned or otherwise disposed of, or leased or licensed,
any right or other asset to any other Person (other than immaterial rights or
other immaterial assets disposed of or leased or licensed by Dry Creek to other
Persons in the ordinary course of business and consistent with Dry Creek's past
practices), or (iii) waived or relinquished any right (other than immaterial
rights waived or relinquished by Dry Creek in the ordinary course of business
and consistent with Dry Creek's past practices);
(h) Dry Creek has not written off as uncollectible, or established
any extraordinary reserve with respect to, any account receivable or other
indebtedness;
(i) Dry Creek has not made any pledge of any of its assets or
otherwise permitted any of its assets to become subject to any Encumbrance,
except for pledges of immaterial assets made in the ordinary course of business
and consistent with Dry Creek's past practices;
(j) Dry Creek has not (i) lent money to any Person, or (ii)
incurred or guaranteed any indebtedness for borrowed money;
(k) Dry Creek has not (i) established, adopted or amended any
Employee Benefit Plan, or (ii) made any profit-sharing or similar payment to any
of its directors, officers or employees;
(l) Dry Creek has not materially changed any of its methods of
accounting or accounting practices in any respect;
(m) Dry Creek has not made any Tax election;
(n) Dry Creek has not commenced or settled any material Legal
Proceeding;
(o) Dry Creek has not entered into any material transaction or
taken any other
10
material action outside the ordinary course of business or inconsistent with its
past practices; and
(p) Dry Creek has not agreed or committed to take any of the
actions referred to in clauses "(c)" through "(o)" above.
2.6 TITLE TO ASSETS.
(a) Except as set forth in Part 2.6(a) of the Disclosure Schedule,
Dry Creek owns, and has good, valid and marketable title to, all material assets
purported to be owned by it, including: (i) all material assets reflected on the
Unaudited Interim Balance Sheet (except for those disposed of in the ordinary
course of business since July 7, 2000); (ii) all material assets referred to in
Parts 2.8 and 2.9 of the Disclosure Schedule and all of Dry Creek's rights under
the Contracts identified in Part 2.10(a) of the Disclosure Schedule; and (iii)
all other material assets reflected in Dry Creek's books and records as being
owned by Dry Creek. Except as set forth in Part 2.6(a) of the Disclosure
Schedule, all of said material assets are owned by Dry Creek free and clear of
any liens or other Encumbrances, except for (i) any lien for current taxes not
yet due and payable, and (ii) minor liens that have arisen in the ordinary
course of business and that do not (in any case or in the aggregate) materially
detract from the value of the assets subject thereto or materially impair the
operations of Dry Creek.
(b) Part 2.6(b) of the Disclosure Schedule identifies all assets
that are being leased or licensed to Dry Creek, except for (i) any equipment
being leased to Dry Creek under a standard operating lease requiring annual
payments by Dry Creek of less than $10,000, and (ii) any software being licensed
to Dry Creek under any third party software license generally available to the
public at a total cost of less than $10,000.
2.7 BANK ACCOUNTS; RECEIVABLES; CUSTOMERS.
(a) Part 2.7(a) of the Disclosure Schedule provides accurate and
complete information (including account numbers, type of account and names of
all individuals authorized to draw on or make withdrawals from each account)
with respect to each account maintained by or for the benefit of Dry Creek at
any bank or other financial institution.
(b) Except as set forth in Part 2.7(b) of the Disclosure Schedule,
all existing accounts receivable of Dry Creek (including those accounts
receivable reflected on the Unaudited Interim Balance Sheet that have not yet
been collected and those accounts receivable that have arisen since July 7, 2000
and have not yet been collected) (i) represent valid obligations of customers of
Dry Creek arising from bona fide transactions entered into in the ordinary
course of business, and (ii) no request or agreement for deduction or discount
has been made with respect to any amounts receivable.
(c) Part 2.7(c) of the Disclosure Schedule (i) identifies and
provides an accurate and complete breakdown of the revenues received from each
customer or other Person that accounted for more than 5% of the revenues of Dry
Creek in the fiscal year ended December 31, 1999 and the period ending July 7,
2000, and (ii) identifies each customer that is obligated to make payments to
Dry Creek in an aggregate amount exceeding $25,000 per year. Dry Creek has not
11
received any notice or other communication indicating that any customer or other
Person identified in Part 2.7(c) of the Disclosure Schedule intends or expects
to cease dealing with Dry Creek or to effect a material reduction in the volume
of business transacted by such Person with Dry Creek below historical levels:
except where the termination or modification of such customer relationship would
not, individually or in to aggregate, have a Material Adverse Effect on the Dry
Creek.
2.8 EQUIPMENT; LEASEHOLD.
(a) The equipment owned or leased by Dry Creek is, taken as a
whole, adequate for the uses to which it is being put, is in good condition and
repair (ordinary wear and tear excepted) and is adequate for the conduct of Dry
Creek's business in the manner in which such business is currently being
conducted.
(b) Dry Creek does not own any real property or any interest in
real property, except for the leasehold created under the real property leases
identified in Part 2.8(b) of the Disclosure Schedule.
2.9 PROPRIETARY ASSETS.
(a) Part 2.9(a)(1) of the Disclosure Schedule sets forth, with
respect to each Dry Creek Proprietary Asset that has been registered, recorded
or filed with any Governmental Body or with respect to which an application has
been filed with any Governmental Body, (i) a brief description of such Dry Creek
Proprietary Asset, and (ii) the names of the jurisdictions covered by the
applicable registration, recordation, filing or application. Part 2.9(a)(2) of
the Disclosure Schedule identifies and provides a brief description of all other
Dry Creek Proprietary Assets owned by Dry Creek. Part 2.9(a)(3) of the
Disclosure Schedule identifies and provides a brief description of each Dry
Creek Proprietary Asset that is owned by any other Person and that is licensed
to or used by Dry Creek (except for any Dry Creek Proprietary Asset that is
licensed to Dry Creek under any third party software license that (1) is
generally available to the public at a cost of less than $5,000, and (2) imposes
no future monetary obligation on Dry Creek) and identifies the license agreement
or other agreement under which such Dry Creek Proprietary Asset is being
licensed to or used by Dry Creek. Except as set forth in Part 2.9(a)(4) of the
Disclosure Schedule, Dry Creek has good, valid and marketable title to all of
the Dry Creek Proprietary Assets identified in Parts 2.9(a)(1) and 2.9(a)(2) of
the Disclosure Schedule, free and clear of all liens and other Encumbrances, and
has a valid right to use all Proprietary Assets identified in Part 2.9(a)(3) of
the Disclosure Schedule. Except as set forth in Part 2.9(a)(5) of the Disclosure
Schedule, Dry Creek is not obligated to make any payment to any Person for the
use of any Dry Creek Proprietary Asset. Except as set forth in Part 2.9(a)(6) of
the Disclosure Schedule, Dry Creek is free to use, modify, copy, distribute,
sell, license or otherwise exploit each of the Dry Creek Proprietary Assets on
an exclusive basis (other than Dry Creek Proprietary Assets consisting of
software licensed to Dry Creek under third party licenses generally available to
the public, with respect to which Dry Creek's rights are not exclusive).
(b) Dry Creek has taken all reasonable measures and precautions
necessary to protect and maintain the confidentiality and secrecy of all Dry
Creek Proprietary Assets (except Dry
12
Creek Proprietary Assets whose value would be unimpaired by public disclosure)
and otherwise to maintain and protect the value of all Dry Creek Proprietary
Assets. Except as set forth in Part 2.9(b) of the Disclosure Schedule, Dry Creek
has not disclosed nor delivered nor permitted to be disclosed or delivered to
any Person, and no Person (other than Dry Creek) has access to or has any rights
with respect to, the source code, or any portion or aspect of the source code,
of any Dry Creek Proprietary Asset.
(c) None of Dry Creek Proprietary Assets infringes or conflicts
with any Proprietary Asset owned or used by any other Person. Except as set
forth in Part 2.9(c) of the Disclosure Schedule, Dry Creek is not infringing,
misappropriating or making any unlawful use of, and Dry Creek has not at any
time infringed, misappropriated or made any unlawful use of, or received any
notice or other communication of any actual, alleged, possible or potential
infringement, misappropriation or unlawful use of, any Proprietary Asset
owned or used by any other Person. Except as set forth in Part 2.9(c) of the
Disclosure Schedule, no other Person is infringing, misappropriating or
making any unlawful use of, and no Proprietary Asset owned or used by any
other Person infringes or conflicts with, any Dry Creek Proprietary Asset.
(d) Dry Creek Proprietary Assets constitute all the Proprietary
Assets necessary to enable Dry Creek to conduct its business in the manner in
which such business has been conducted. Except as set forth in Part 2.9(d) of
the Disclosure Schedule, (i) Dry Creek has not licensed any of Dry Creek
Proprietary Assets to any Person on an exclusive basis, and (ii) Dry Creek has
not entered into any covenant not to compete or Contract limiting its ability to
exploit fully any of the Dry Creek Proprietary Assets or to transact business in
any market or geographical area or with any Person.
(e) Except as set forth in Part 2.9(e) of the Disclosure Schedule,
all current and former employees of Dry Creek, and all current and former
consultants and independent contractors to Dry Creek, have executed and
delivered to Dry Creek, as applicable, written agreements (containing no
exceptions to or exclusions from the scope of their coverage) that are
substantially identical to the form of Employee Invention Assignment and
Confidentiality Agreement attached to Part 2.9(e) of the Disclosure Schedule.
(f) Except as set forth in Part 2.9(f) of the Disclosure Schedule,
Dry Creek has not entered into and is not bound by any Contract under which any
Person has the right to distribute or license, on a commercial basis, any Dry
Creek Proprietary Asset including source code, object code, or any versions,
modifications or derivative works of source code or object code in any Dry Creek
Proprietary Asset.
(g) Each computer program and other item of software owned by Dry
Creek is Year 2000 Compliant. Each computer program and other item of software
that has been designed, developed, sold, installed, licensed or otherwise made
available by Dry Creek to any Person is Year 2000 Compliant. As used in this
Section 2.9(g), "Year 2000 Compliant" means, with respect to a computer program
or other item of software (i) the functions, calculations, and other computing
processes of the program or software (collectively, "Processes") perform in a
consistent and correct manner without interruption regardless of the date on
which the Processes
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are actually performed and regardless of the date input to the applicable
computer system, whether before, on, or after January 1, 2000; (ii) the program
or software accepts, calculates, compares, sorts, extracts, sequences, and
otherwise processes date inputs and date values, and returns and displays date
values, in a consistent and correct manner regardless of the dates used whether
before, on, or after January 1, 2000; (iii) the program or software accepts and
responds to year input, if any, in a manner that resolves any ambiguities as to
century in a defined, predetermined, and appropriate manner; (iv) the program or
software stores and displays date information in ways that are unambiguous as to
the determination of the century; and (v) leap years will be determined by the
following standard (A) if dividing the year by 4 yields an integer, it is a leap
year, except for years ending in 00, but (B) a year ending in 00 is a leap year
if dividing it by 400 yields an integer.
2.10 CONTRACTS.
(a) Part 2.10(a) of the Disclosure Schedule identifies each Dry
Creek Contract that constitutes a "Material Contract." (For purposes of this
Agreement, each of the following (and each other Contract that is material to
the business of Dry Creek taken together as a whole) shall be deemed to
constitute a "Material Contract":
(i) any Contract relating to the employment or engagement
of, or the performance of services by, any employee, consultant or independent
contractor (other than offer letters which do not contain any payments to an
employee which become due upon termination of employment);
(ii) any Contract relating to the acquisition, transfer, use,
development, sharing or license of any technology or any Proprietary Asset;
(iii) any Contract imposing any restriction on Dry Creek's
right or ability (A) to compete with any other Person, (B) to acquire any
product or other asset or any services from any other Person, to sell any
product or other asset to or perform any services for any other Person or to
transact business or deal in any other manner with any other Person, or (C) to
develop or distribute any technology;
(iv) any Contract creating or involving any agency
relationship, distribution arrangement or franchise relationship;
(v) any Contract creating or relating to the creation of any
material Encumbrance with respect to any material asset owned or used by Dry
Creek;
(vi) any Contract involving or incorporating any guaranty,
any pledge, any performance or completion bond, any indemnity, any right of
contribution or any surety arrangement;
(vii) any Contract creating or relating to any partnership or
joint venture or any sharing of revenues, profits, losses, costs or liabilities;
14
(viii) any Contract relating to the purchase or sale of any
product or other asset by or to, or the performance of any services by or for,
any Related Party (as defined in Section 2.19);
(ix) any Contract to which any Governmental Body is a party
or under which any Governmental Body has any rights or obligations, or involving
or directly or indirectly benefiting any Governmental Body (including any
subcontract or other Contract between Dry Creek and any contractor or
subcontractor to any Governmental Body);
(x) any Contract entered into outside the ordinary
course of business or inconsistent with Dry Creek's past practices;
(xi) any Contract that has a term of more than 90 days and
that may not be terminated by Dry Creek (without penalty) within 90 days after
the delivery of a termination notice by Dry Creek; and
(xii) any Contract (not otherwise identified in clauses "(i)"
through "(xi)" of this sentence) that contemplates or involves (A) the payment
or delivery of cash or other consideration in an amount or having a value in
excess of $25,000 in the aggregate, or (B) the performance of services having a
value in excess of $25,000 in the aggregate.
(b) Dry Creek has delivered to PUMATECH accurate and complete
copies of all Contracts identified in Part 2.10(a) of the Disclosure Schedule,
including all amendments thereto. Each Contract identified in Part 2.10(a) of
the Disclosure Schedule is valid and in full force and effect, and is
enforceable by Dry Creek in accordance with its terms, subject to (i) laws of
general application relating to bankruptcy, insolvency and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.
(c) Except as set forth in Part 2.10(c) of the Disclosure
Schedule:
(i) Dry Creek has not committed any material breach or
default under any Dry Creek Contract, and, to the Knowledge of Dry Creek, no
other Person has committed any material breach or default under any Dry Creek
Contract;
(ii) to the Knowledge of Dry Creek, no event has occurred,
and no circumstance or condition exists, that (with or without notice or lapse
of time) will, or could reasonably be expected to, (A) result in a material
violation or breach of any of the provisions of any Dry Creek Contract, (B) give
any Person the right to declare a default or exercise any remedy under any Dry
Creek Contract, (C) give any Person the right to accelerate the maturity or
performance of any Dry Creek Contract, or (D) give any Person the right to
cancel, terminate or materially modify any Dry Creek Contract;
(iii) Dry Creek has not received any written notice or other
communication regarding (i) any material violation or breach of, or default
under, any Dry Creek Contract, or (ii) any termination of any material Dry Creek
Contract; and
15
(iv) Dry Creek has not waived any of its material rights
under any Contract.
(d) No Person is renegotiating, or has the right to renegotiate,
any amount paid or payable to Dry Creek under any Dry Creek Contract or any
other term or provision of any Dry Creek Contract.
(e) The Contracts identified in Part 2.10(a) of the Disclosure
Schedule collectively constitute all of the Material Contracts necessary to
enable Dry Creek to conduct the business in the manner in which the business is
currently being conducted.
2.11 LIABILITIES.
(a) Dry Creek has not accrued, contingent or other liabilities of
any nature, either matured or unmatured (whether or not required to be reflected
in financial statements in accordance with generally accepted accounting
principles, and whether due or to become due), except for: (i) liabilities
identified as such in the "liabilities" column of the Unaudited Interim Balance
Sheet; (ii) liabilities incurred in the ordinary course of business (and in
compliance with this Agreement) since the date of the Unaudited Interim Balance
Sheet; (iii) liabilities for future performance under existing Material
Contracts (iv) accounts payable or accrued salaries that have been incurred by
Dry Creek since July 7, 2000 in the ordinary course of business and consistent
with Dry Creek's past practices; (v) the liabilities identified in Part 2.11(a)
or another part of the Disclosure Schedule; and (vi) liabilities (other than
those provided for separately in sections (i), (ii), (iii), (iv) and (v) of this
Section 2.11) which do not exceed $10,000, individually or in the aggregate.
(b) Part 2.11(b) of the Disclosure Schedule provides an accurate
and complete breakdown of: (i) all accounts payable of Dry Creek as of July 7,
2000, (ii) all notes payable of Dry Creek and all indebtedness of Dry Creek for
borrowed money, (iii) all customer deposits and other deposits held by Dry Creek
as of July 7, 2000; and (iv) deferred revenue, warranty or obligations to
deliver services, support or upgrades.
2.12 COMPLIANCE WITH LEGAL REQUIREMENTS. Dry Creek is, in substantial
compliance with each Legal Requirement that is applicable in any material
respect to the conduct of its business or the ownership of its assets. No event
has occurred, and no condition or circumstance exists, that might (with or
without notice or lapse of time) constitute or result directly or indirectly in
a violation by Dry Creek of, or a failure on the part of Dry Creek to comply
with, any material Legal Requirement. Except as set forth in Part 2.12 of the
Disclosure Schedule, Dry Creek has never received any notice or other
communication from any Governmental Body regarding any actual or possible
violation of, or failure to comply with, any material Legal Requirement.
2.13 GOVERNMENTAL AUTHORIZATIONS. Part 2.13 of the Disclosure Schedule
identifies each Governmental Authorization held by Dry Creek, and Dry Creek has
delivered to PUMATECH accurate and complete copies of all Governmental
Authorizations identified in Part 2.13 of the Disclosure Schedule. The
Governmental Authorizations identified in Part 2.13 of the Disclosure Schedule
are valid and in full force and effect, and collectively constitute all
Governmental Authorizations necessary to enable Dry Creek to conduct the
business in the manner in which
16
their business is currently being conducted except such Governmental
Authorizations that no Governmental Body has demanded to be obtained or of which
Dry Creek is unaware, or which the failure to obtain if required, would not have
a Material Adverse Effect on Dry Creek. Dry Creek is in compliance with the
material terms and requirements of the respective Governmental Authorizations
identified in Part 2.13 of the Disclosure Schedule. Dry Creek has never received
any written notice or other written communication from any Governmental Body
regarding (a) any material violation of or failure to comply with any material
term or requirement of any Governmental Authorization, or (b) any revocation,
withdrawal, suspension, cancellation, termination or modification of any
Governmental Authorization.
2.14 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf of Dry
Creek with any Governmental Body on or before the date hereof (the "Dry Creek
Returns") (i) have been filed in a timely manner, and (ii) have been accurately
and completely prepared in compliance with all applicable Legal Requirements.
All amounts shown on the Dry Creek Returns to be due on or before the date
hereof have been paid. Dry Creek has delivered to PUMATECH accurate and complete
copies of all Dry Creek Returns filed since the date of Dry Creek's formation.
(b) Each Tax required to have been paid, or claimed by any
Governmental Body to be payable, by Dry Creek (whether pursuant to any Tax
Return or otherwise) has been duly paid in full on a timely basis. Any Tax
required to have been withheld or collected by Dry Creek has been duly withheld
and collected on a timely basis; and (to the extent required) each such Tax has
been paid to the appropriate Governmental Body on a timely basis.
(c) Dry Creek Financial Statements fully accrue all actual and
contingent liabilities for Taxes with respect to all periods through the dates
thereof in accordance with generally accepted accounting principles. Dry Creek
has established, in the ordinary course of business and consistent with its past
practices, reserves adequate for the payment of all Taxes for the period from
July 7, 2000 through the date hereof.
(d) No Dry Creek Return relating to income Taxes has ever been
examined or audited by any Governmental Body. Except as set forth in Part
2.14(d) of the Disclosure Schedule, there has been no examination or audit of
any Dry Creek Return, and no such examination or audit has been proposed or
scheduled by any Governmental Body. Dry Creek has delivered to PUMATECH accurate
and complete copies of all audit reports and similar documents (to which Dry
Creek has access) relating to Dry Creek Returns. No extension or waiver of the
limitation period applicable to any of Dry Creek Returns has been granted (by
Dry Creek, or any other Person), and no such extension or waiver has been
requested from Dry Creek.
(e) No claim or Legal Proceeding is pending or has been threatened
against or with respect to Dry Creek in respect of any Tax. There are no
unsatisfied liabilities for Taxes (including liabilities for interest, additions
to tax and penalties thereon and related expenses) with respect to any notice of
deficiency or similar document received by Dry Creek. There are no liens for
Taxes upon any of the assets of Dry Creek, except liens for current Taxes not
yet due and payable. Dry Creek will not be required to include any adjustment in
its taxable income for
17
any tax period (or portion thereof) as a result of transactions or events
occurring, or accounting methods employed, prior to the date hereof.
(f) There is no agreement, plan, arrangement or other Contract
covering any employee or independent contractor or former employee or
independent contractor of Dry Creek that, considered individually or considered
collectively with any other such Contracts, will, or could reasonably be
expected to, give rise directly or indirectly to the payment of any amount that
would not be deductible pursuant to Section 280G or Section 162 of the Code. Dry
Creek is not, and has never been, a party to or bound by any tax indemnity
agreement, tax sharing agreement, tax allocation agreement or similar Contract.
(g) Except as set forth in Part 2.14(g) of the Disclosure
Schedule, since Dry Creek's formation, (i) no Governmental Body has asserted any
claim or otherwise made any allegation that Dry Creek has failed or may have
failed to pay any sales tax, use tax or similar Tax, and (ii) Dry Creek has not
engaged in any discussions or negotiations with any Governmental Body, and has
not sent any written communication to or received any written communication from
any Governmental Body, in connection with any possible failure on the part of
Dry Creek to pay any sales tax, use tax or similar Tax.
(h) Dry Creek has disclosed on its federal income Tax Returns
all positions taken therein that could give rise to a substantial
understatement of federal income Tax within the meaning of Code
Section 6662. Dry Creek (A) has not been a member of an affiliated group
filing a consolidated federal income Tax Return and (B) does not have any
Liability for the Taxes of any other Person under Reg. Sections 1.1502-6 (or
any similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise.
(i) Dry Creek has had no income which is effectively connected
with a US trade or business under Code section 864. Except as set forth in Part
2.14(i) of the Disclosure Schedule, Dry Creek is not a party to an Advance
Pricing Agreement (or any similar agreement under foreign law) and all
transactions between Dry Creek (and any other commonly controlled parties) have
been in accordance with the arm's length standard in compliance with Code
section 482 and the treasury regulations thereunder.
2.15 EMPLOYEE AND LABOR MATTERS; BENEFIT PLANS.
(a) Part 2.15(a) of the Disclosure Schedule contains a list of all
employees of Dry Creek as of the date of this Agreement, and correctly reflects
their salaries, any other compensation payable to them (including compensation
payable pursuant to bonus, deferred compensation or commission arrangements),
their dates of employment and their positions and their vacation accruals as of
July 7, 2000. Dry Creek is not, and has never been, a party to any collective
bargaining contract or other Contract with a labor union involving any of its
employees.
(b) There is no employee of Dry Creek who is not fully available
to perform work because of disability or other leave. The employment of each
employee of Dry Creek is
18
terminable by Dry Creek at will. Dry Creek has delivered to PUMATECH accurate
and complete copies of all employee manuals and handbooks, disclosure materials,
policy statements and other materials relating to the employment of the current
employees of Dry Creek.
(c) Part 2.15(c) of the Disclosure Schedule identifies each
salary, bonus, deferred compensation, incentive compensation, stock purchase,
stock option, severance pay, termination pay, hospitalization, medical,
insurance, supplemental unemployment benefits, profit-sharing, pension or
retirement plan, program or agreement (individually referred to as a "Plan" and
collectively referred to as the "Plans") sponsored, maintained, contributed to
or required to be contributed to by Dry Creek for the benefit of any current or
former employee of Dry Creek.
(d) Except as set forth in Part 2.15(d) of the Disclosure
Schedule, Dry Creek does not maintain, sponsor or contribute to, and has not at
any time in the past maintained, sponsored or contributed to, any employee
pension benefit plan (as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") , which applies to such
employees, whether or not excluded from coverage under specific Titles or Merger
Subtitles of ERISA applicable collective agreements and extension orders) for
the benefit of employees or former employees of Dry Creek (a "Pension Plan").
(e) Dry Creek does not maintain, sponsor or contribute to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA, whether or
not excluded from coverage under specific Titles or Merger Subtitles of ERISA)
for the benefit of employees or former employees of Dry Creek (a "Welfare Plan")
except for those Welfare Plans described in Part 2.15(e) of the Disclosure
Schedule, none of which is a multiemployer plan (within the meaning of Section
3(37) of ERISA).
(f) With respect to each Plan, Dry Creek has delivered to
PUMATECH:
(i) an accurate and complete copy of such Plan (including
all amendments thereto);
(ii) an accurate and complete copy of the annual report (if
required under ERISA) with respect to such Plan for each of 1997 and 1998;
(iii) an accurate and complete copy of (A) the most recent
summary plan description, together with each Summary of Material Modifications
(if required under ERISA) with respect to such Plan, and (B) each material
employee communication relating to such Plan;
(iv) if such Plan is funded through a trust or any third
party funding vehicle, an accurate and complete copy of the trust or other
funding agreement (including all amendments thereto) and accurate and complete
copies the most recent financial statements thereof;
(v) accurate and complete copies of all Contracts relating
to such Plan, including service provider agreements, insurance contracts,
minimum premium contracts, stop-loss agreements, investment management
agreements, subscription and participation agreements and recordkeeping
agreements; and
19
(vi) an accurate and complete copy of the most recent
determination letter received from the Internal Revenue Service with respect to
such Plan (if such Plan is intended to be qualified under Section 401(a) of the
Code).
(g) Dry Creek is nor and has never been required to be treated as
a single employer with any other Person under Section 4001(b)(1) of ERISA or
Section 414(b), (c), (m) or (o) of the Code. Dry Creek has never been a member
of an "affiliated service group" within the meaning of Section 414(m) of the
Code. Dry Creek has never made a complete or partial withdrawal from a
"multiemployer plan" (as defined in Section 3(37) of ERISA) resulting in
"withdrawal liability" (as defined in Section 4201 of ERISA), without regard to
subsequent reduction or waiver of such liability under either Section 4207 or
4208 of ERISA.
(h) Dry Creek has no plan or commitment to create any additional
Welfare Plan or any Pension Plan, or to modify or change any existing Welfare
Plan or Pension Plan (other than to comply with applicable law).
(i) No Welfare Plan provides death, medical or health benefits
(whether or not insured) with respect to any current or former employee of Dry
Creek after any such employee's termination of service (other than (i) benefit
coverage mandated by applicable law, including coverage provided pursuant to
Section 4980B of the Code, (ii) deferred compensation benefits accrued as
liabilities on the Unaudited Interim Balance Sheet, and (iii) benefits the full
cost of which are borne by current or former employees of Dry Creek (or their
beneficiaries)).
(j) With respect to each of the Welfare Plans constituting a group
health plan within the meaning of Section 4980B(g)(2) of the Code, the
provisions of Section 4980B of the Code ("COBRA") have been complied with in all
material respects.
(k) Each of the Plans has been operated and administered in all
material respects in accordance with applicable Legal Requirements, including
ERISA and the Code.
(l) Each of the Plans intended to be qualified under Section
401(a) of the Code has received a favorable determination from the Internal
Revenue Service, and Dry Creek is not aware of any reason why any such
determination letter should be revoked.
(m) Except as set forth in Part 2.15(m) of the Disclosure
Schedule, neither the execution, delivery or performance of this Agreement, nor
the consummation of the transactions contemplated by this Agreement, will result
in any bonus payment, golden parachute payment, severance payment or other
payment to any current or former manager or employee of Dry Creek (whether or
not under any Plan), or materially increase the benefits payable under any Plan,
or result in any acceleration of the time of payment or vesting of any such
benefits.
(n) Dry Creek is in compliance in all material respects with all
applicable Legal Requirements and Contracts relating to employment, employment
practices, employee compensation, wages, bonuses and terms and conditions of
employment.
(o) Dry Creek has good labor relations, and, except as set forth
in Part 2.15(o) of the
20
Disclosure Schedule, Dry Creek has no Knowledge of any facts indicating that (i)
the consummation of the transactions contemplated by this Agreement will have a
material adverse effect on Dry Creek's labor relations, or (ii) any of Dry
Creek's employees intends to terminate his or her employment with Dry Creek, as
applicable. To the best of the Knowledge of Dry Creek, no employee of Dry Creek
is a party to or is bound by any confidentiality agreement, noncompetition
agreement or other Contract (with any Person) that may have an adverse effect on
(A) the performance by such employee of any of his duties or responsibilities as
an employee of Dry Creek, or (B) the business or operations of Dry Creek.
2.16 ENVIRONMENTAL MATTERS. Dry Creek is and has at all times been in
compliance with all applicable Environmental Laws. Each property that is owned
by, leased to, controlled by or used by Dry Creek, and all surface water,
groundwater, soil and air associated with or adjacent to such property (a) is
free of any Hazardous Material and any harmful chemical or physical conditions,
and (b) is free of any environmental contamination of any nature. Dry Creek
possess all permits and other Governmental Authorizations required under
applicable Environmental Laws, and Dry Creek is and has at all times been in
compliance with the terms and requirements of all such Governmental
Authorizations. Dry Creek has not received any notice or other communication
(whether from a Governmental Body, citizens group, employee or otherwise) that
alleges that Dry Creek is not in compliance with any Environmental Law, and, to
the best of the Knowledge of Dry Creek, there are no circumstances that could
reasonably be expected to prevent or interfere with Dry Creek's compliance with
any Environmental Law in the future. To the best of the Knowledge of Dry Creek,
no current or prior owner of any property leased or controlled by Dry Creek has
received any notice or other communication (whether from a Governmental Body,
citizens group, employee or otherwise) that alleges that such current or prior
owner or Dry Creek is not or was not in compliance with any Environmental Law.
All Governmental Authorizations currently held by Dry Creek pursuant to
Environmental Laws are identified in Part 2.16 of the Disclosure Schedule. (For
purposes of this Section 2.16: (i) "Environmental Law" means any federal, state,
local or foreign Legal Requirement relating to pollution or protection of human
health or the environment (including ambient air, surface water, ground water,
land surface or subsurface strata), including any law or regulation relating to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern; and (ii) "Materials of Environmental
Concern" include chemicals, pollutants, contaminants, wastes, toxic substances,
petroleum and petroleum products and any other substance that is now or in the
future regulated by any Environmental Law or that is otherwise a danger to
health, reproduction or the environment.)
2.17 SALE OF PRODUCTS; PERFORMANCE OF SERVICES.
(a) Each product, system, program, Proprietary Asset or other
asset designed, developed, manufactured, assembled, sold, installed, repaired,
licensed or otherwise made available by Dry Creek to any Person: (i) conformed
and complied in all material respects with the terms and requirements of any
applicable warranty or other Contract and with all material applicable Legal
Requirements; and (ii) was free of any bug, virus, design defect or other defect
or deficiency at the time it was sold or otherwise made available, other than
any immaterial bug
21
or similar defect that would not adversely affect in any material respect such
product, system, program, Proprietary Asset or other asset (or the operation or
performance thereof).
(b) All installation services, design services, development
services, programming services, repair services, maintenance services, support
services, training services, upgrade services and other services that have been
performed by Dry Creek were performed properly and in conformity in all material
respects with the terms and requirements of all applicable warranties and other
Contracts and with all material applicable Legal Requirements.
(c) Dry Creek will not incur or otherwise become subject to any
material Liability arising directly or indirectly from (i) any product, system,
program, Proprietary Asset or other asset designed, developed, manufactured,
assembled, sold, installed, repaired, licensed or otherwise made available by
Dry Creek, or (ii) any installation services, design services, development
services, programming services, repair services, maintenance services, support
services, training services, upgrade services or other services performed by Dry
Creek.
(d) Except as set forth in Part 2.17(d) of the Disclosure
Schedule, no customer or other Person has ever asserted or, to Dry Creek's
Knowledge, threatened to assert any claim against Dry Creek (i) under or based
upon any warranty provided by or on behalf of Dry Creek, or (ii) under or based
upon any other warranty relating to any product, system, program, Proprietary
Asset or other asset designed, developed, manufactured, assembled, sold,
installed, repaired, licensed or otherwise made available by Dry Creek or any
services performed by Dry Creek. To the best of the Knowledge of Dry Creek, no
event has occurred, and no condition or circumstance exists, that might (with or
without notice or lapse of time) directly or indirectly give rise to or serve as
a basis for the assertion of any such claim.
2.18 INSURANCE. Part 2.18 of the Disclosure Schedule identifies each
insurance policy maintained by, at the expense of or for the benefit of Dry
Creek. Dry Creek has delivered to PUMATECH accurate and complete copies of the
insurance policies identified in Part 2.18 of the Disclosure Schedule. Each of
the insurance policies identified in Part 2.18 of the Disclosure Schedule is in
full force and effect.
2.19 RELATED PARTY TRANSACTIONS. Except as set forth in Part 2.19 of the
Disclosure Schedule and except for this agreement and the transactions
contemplated hereby: (a) no Related Party has, and no Related Party has at any
time had any material indirect interest in any material asset used in or
otherwise relating to the business of Dry Creek; (b) no Related Party is, or has
at any time been, indebted to Dry Creek; (c) no Related Party has entered into,
or has had any material financial interest in, any material Contract,
transaction or business dealing involving Dry Creek. (For purposes of this
Section 2.19, each of the following shall be deemed to be a "Related Party": (i)
each of the Dry Creek Members; (ii) each individual who is, or who has at any
time been a manager of Dry Creek; (iii) each individual who is, or who at any
time been a member of the immediate family of any of the individuals referred to
in clauses "(i)" and "(ii)" above; and (iv) any trust or other Entity (other
than Dry Creek) in which any one of the individuals referred to in clauses
"(i)," "(ii)" and "(iii)" above holds (or in which more than one of such
individuals collectively hold), beneficially or otherwise, a material voting,
proprietary or equity interest.).
22
2.20 LEGAL PROCEEDINGS; ORDERS.
(a) Except as set forth in Part 2.20(a) of the Disclosure
Schedule, there is no pending Legal Proceeding, and (to the Knowledge of Dry
Creek) no Person has threatened to commence any Legal Proceeding: (i) that
involves Dry Creek or any of the assets owned or used by Dry Creek; or (ii) that
challenges, or that may have the effect of preventing, delaying, making illegal
or otherwise interfering with, the transactions contemplated by this Agreement.
To the best of the Knowledge of Dry Creek, except as set forth in Part 2.20(a)
of the Disclosure Schedule, no event has occurred, and no claim, dispute or
other condition or circumstance exists, that will, or that could reasonably be
expected to, give rise to or serve as a basis for the commencement of any such
Legal Proceeding.
(b) Except as set forth in Part 2.20(b) of the Disclosure
Schedule, no material Legal Proceeding has ever been commenced by, and no
material Legal Proceeding has ever been pending against, Dry Creek.
(c) There is no order, writ, injunction, judgment or decree to
which Dry Creek, or any of the assets owned or used by Dry Creek, is subject.
None of the Dry Creek Members is subject to any order, writ, injunction,
judgment or decree that relates to Dry Creek's business or to any of the assets
owned or used by Dry Creek. To the Knowledge of Dry Creek, no manager or other
employee of Dry Creek is subject to any order, writ, injunction, judgment or
decree that prohibits such officer or other employee from engaging in or
continuing any Dry Creek, activity or practice relating to Dry Creek's business.
2.21 AUTHORITY; BINDING NATURE OF AGREEMENT. Dry Creek has the absolute
and unrestricted right, power and authority to enter into and to perform its
obligations under this Agreement and under each other agreement, document or
instrument referred to in or contemplated by this Agreement to which Dry Creek
is or will be a party; and the execution, delivery and performance by Dry Creek
of this Agreement and of each such other agreement, document and instrument has
been duly authorized by all necessary action on the part of Dry Creek, and its
members. This Agreement and each other agreement, document and instrument
referred to in or contemplated by this Agreement to which Dry Creek is a party
constitutes, assuming the due authorization, execution and delivery hereof by
PUMATECH, the legal, valid and binding obligation of Dry Creek, as applicable,
enforceable against Dry Creek, as applicable, in accordance with its terms,
subject to (i) laws of general application relating to bankruptcy, insolvency
and the relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
2.22 NON-CONTRAVENTION; CONSENTS. Except as set forth in Part 2.22 of the
Disclosure Schedule and except for Breaches which could not reasonably be
expected to have a Material Adverse Effect on Dry Creek, neither (1) the
execution, delivery or performance of this Agreement or any other agreement,
document or instrument referred to in or contemplated by this Agreement, nor (2)
the consummation of the transactions contemplated by this Agreement or any such
other agreement, document or instrument, will directly or indirectly (with or
without notice or lapse of time):
23
(a) contravene, conflict with or result in a violation of (i) any
of the provisions of Dry Creek's articles of organization or operating
agreement, or (ii) any resolution adopted by Dry Creek's members or Dry Creek's
managers;
(b) contravene, conflict with or result in a violation of, or give
any Governmental Body or other Person the right to challenge any of the
transactions contemplated by this Agreement or to exercise any remedy or obtain
any relief under, any Legal Requirement or any order, writ, injunction, judgment
or decree to which Dry Creek, or any of the assets owned or used by Dry Creek,
is subject;
(c) contravene, conflict with or result in a violation of any of
the terms or requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any Governmental Authorization
that is held by Dry Creek or that otherwise relates to Dry Creek's business or
to any of the assets owned or used by Dry Creek;
(d) contravene, conflict with or result in a material violation or
breach of, or result in a material default under, any provision of any material
Contract, or give any Person the right to (i) declare a default or exercise any
remedy under any Contract, (ii) accelerate the maturity or performance of any
Contract, or (iii) cancel, terminate or modify any Contract; or
(e) result in the imposition or creation of any lien or other
Encumbrance upon or with respect to any asset owned or used by Dry Creek (except
for minor liens that will not, in any case or in the aggregate, materially
detract from the value of the assets subject thereto or materially impair the
operations of Dry Creek).
Dry Creek is not, nor will be, required to make any filing with or give any
notice to, or to obtain any Consent from, any Person in connection with (x) the
execution, delivery or performance of this Agreement or any other agreement,
document or instrument referred to in or contemplated by this Agreement, or (y)
the consummation of the transactions contemplated by this Agreement or
contemplated by any other agreement, document or instrument referred to in or
contemplated by this Agreement except for such other consents, approvals,
orders, authorizations, registrations, declarations and filings, the failure of
which to be obtained or made would not have, individually or in the aggregate, a
Material Adverse Effect on Dry Creek.
2.23 NO BROKERS. Except as set forth in Part 2.23, Dry Creek has not
agreed or become obligated to pay to any Person, or has taken any action that
might result in any Person claiming to be entitled to receive, any brokerage
commission, finder's fee or similar commission or fee in connection with any of
the transactions contemplated by this Agreement.
2.24 FULL DISCLOSURE. This Agreement (including the Disclosure Schedule)
does not (i) contain any Dry Creek representation, warranty or information in
the Dry Creek Disclosure Schedule that is false or misleading with respect to
any material fact, or (ii) omit to state any material fact necessary in order to
make the Dry Creek representations, warranties and information in the Dry Creek
Disclosure Schedule contained herein (in light of the circumstances under which
such representations, warranties and information in the Dry Creek Disclosure
Schedule were made or provided) not false or misleading.
24
SECTION 3. REPRESENTATIONS AND WARRANTIES OF DRY CREEK MEMBERS
The Dry Creek Members each, severally and not jointly, represent and
warrant to PUMATECH that on the date hereof and as of the Closing, as though
made at the Closing, as follows:
3.1 OWNERSHIP OF DRY CREEK INTERESTS. Such Dry Creek Member is the sole
record and beneficial owner of the Dry Creek Interests designated as being owned
by the Dry Creek Member opposite his, her or its name in EXHIBIT A to this
Agreement. Such Dry Creek Interests are not subject to any Liens or to any
rights of first refusal of any kind, and such Dry Creek Member has not granted
any rights to purchase such Dry Creek Interests to any other person or entity.
Such Dry Creek Member has the sole right to transfer such Dry Creek Interests to
PUMATECH. Such Dry Creek Interests constitute all of the Dry Creek Interests
owned, beneficially or of record, by such Dry Creek Member and such Dry Creek
Member has no options, warrants or other rights to acquire Dry Creek Interests.
At the Closing, in exchange for the PUMATECH Stock and Cash Consideration issued
pursuant to Sections 1.1 and 1.6 hereof, PUMATECH will receive good title to
such Dry Creek Interests, subject to no Liens retained, granted or permitted by
such Dry Creek Member or Dry Creek. Such Dry Creek Member is a "resident of the
United States" as defined in Section 7701(b) of thy Internal Revenue Code of
1986 and a resident of California for California income tax purposes.
3.2 TAX MATTERS. Such Dry Creek Member has had an opportunity to review
with his own tax advisors the tax consequences to the Dry Creek Member of the
transactions contemplated by this Agreement. Such Dry Creek Member understands
that he must rely solely on his advisors and not on any statements or
representations by PUMATECH, Dry Creek or any of their agents. Such Dry Creek
Member understands that he (and not PUMATECH and Dry Creek) shall be responsible
for his, her or its own tax liability that may arise as a result of the
transactions contemplated by this Agreement.
3.3 AUTHORITY. Such Dry Creek Member has all requisite power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by such
Dry Creek Member, and, assuming the due authorization, execution and delivery by
the other parties hereto, constitutes the valid and binding obligation of such
Dry Creek Member, enforceable in accordance with its terms, except as such
enforceability may be limited by principles of public policy and subject to the
laws of general application relating to bankruptcy, insolvency and the relief of
debtors and to rules of law governing specific performance, injunctive relief or
other equitable remedies.
3.4 NO CONFLICT. The execution and delivery by such Dry Creek Member of
this Agreement and the consummation of the transactions contemplated hereby will
not conflict with any material mortgage, indenture, lease, contract or other
agreement or instrument, permit, concession, franchise or license to which such
Dry Creek Member or any of his, her or its properties or assets is subject, or
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to such Dry Creek Member or his, her or its properties or assets.
3.5 EXEMPTION FROM REGISTRATION. Such Dry Creek Member is aware (i) that
the
25
PUMATECH Stock to be issued to Dry Creek Member in the transactions contemplated
by this Agreement will not be registered immediately and will not be issued
pursuant to a registration statement under the Securities Act of 1933, as
amended (the "Act"), but will instead be issued in reliance on the exemption
from registration set forth in Section 4(2) of the Act and in Regulation D under
the Act, and (ii) that neither the transactions contemplated by this Agreement
nor the issuance of such PUMATECH Stock has been approved or reviewed by the
Securities and Exchange Commission (the "SEC") or by any other governmental
agency.
3.6 NO IMMEDIATE RESALE. Such Dry Creek Member is aware that, because
the PUMATECH Stock to be issued in the transactions contemplated by this
Agreement will not be registered immediately under the Act, such PUMATECH Stock
cannot be resold unless such PUMATECH Stock is registered under the Act or
unless an exemption from registration is available and that the provisions of
Rule 144 under the Act will permit resale of the PUMATECH Stock to be issued to
Dry Creek Member in the transactions contemplated by this Agreement only under
limited circumstances, and such PUMATECH Stock must be held by Dry Creek Member
for at least one year before it can be sold pursuant to Rule 144.
3.7 INVESTMENT INTENT. The PUMATECH Stock to be issued to Dry Creek
Member in the transactions contemplated by this Agreement will be acquired by
Dry Creek Member for investment and for his own account, and not with a view to,
or for resale in connection with, any unregistered distribution thereof.
3.8 ADEQUATE INVESTIGATION. Dry Creek Member has received, reviewed and
considered all the information Dry Creek Member considers necessary to enable
Dry Creek Member to make an informed decision to invest in PUMATECH Stock,
including the PUMATECH SEC Documents (defined below).
3.9 SOPHISTICATED INVESTOR. Dry Creek Member (either by himself or in
conjunction with his representative) is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in securities presenting investment decisions like that involved in
Dry Creek Member's contemplated investment in the PUMATECH Stock to be issued in
the transactions contemplated by this Agreement. Dry Creek Member understands
and has fully considered the risks of acquiring and owning PUMATECH Stock and
further understands that: (i) an investment in PUMATECH Stock is a speculative
investment which involves a high degree of risk and is suitable only for an
investor who is able to bear the economic consequences of losing his or her
entire investment; and (ii) there are substantial restrictions on the
transferability of the PUMATECH Stock to be issued in the transactions
contemplated by this Agreement, and, accordingly, it may not be possible for Dry
Creek Member to liquidate his investment in such PUMATECH Stock (in whole or in
part) in the case of emergency. Dry Creek Member is able: (1) to hold the
PUMATECH Stock that he is to receive in the transactions contemplated by this
Agreement for a substantial period of time; and (2) to afford a complete loss of
his investment in such PUMATECH Stock.
3.10 LEGENDS; STOP TRANSFER ORDERS. Dry Creek Member understands that
stop transfer instructions will be given to PUMATECH's transfer agent with
respect to the PUMATECH
26
Stock to be issued to Dry Creek Member in the transactions contemplated by this
Agreement, and that there will be placed on the certificate or certificates
representing such PUMATECH Stock a legend identical or similar in effect to the
following legend (together with any other legend or legends required by
applicable state securities laws or otherwise):
"THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED
OR HYPOTHECATED UNLESS REGISTERED UNDER
THE ACT OR UNLESS AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT
IS AVAILABLE."
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PUMATECH. PUMATECH represents and
warrants to the Dry Creek Members as follows:
4.1 CORPORATE STATUS. PUMATECH is a corporation duly organized, validly
existing and in good standing under, the laws of the State of Delaware.
4.2 SEC FILINGS; FINANCIAL STATEMENTS.
(a) PUMATECH has filed all required reports, schedules, forms,
statements and other documents with the SEC since (the "PUMATECH SEC
Documents"). PUMATECH has delivered or otherwise made available to the Dry Creek
Members accurate and complete copies (excluding copies of exhibits) of each
report, registration statement (on a form other than Form S-8) and definitive
proxy statement filed by PUMATECH with the SEC between July 31, 1999 and the
date of this Agreement. As of the time it was filed with the SEC (or, if amended
or superseded by a filing prior to the date of this Agreement, then on the date
of such filing): (i) each of the PUMATECH SEC Documents complied in all material
respects with the applicable requirements of the Securities Act or the Exchange
Act (as the case may be); and (ii) none of the PUMATECH SEC Documents contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(b) The consolidated financial statements contained in the
PUMATECH SEC Documents: (i) complied as to form in all material respects with
the published rules and regulations of the SEC applicable thereto; (ii) were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods covered, except as may be indicated in
the notes to such financial statements and (in the case of unaudited statements)
as permitted by Form 10-Q of the SEC, and except that unaudited financial
statements may not contain footnotes and are subject to normal and recurring
year-end audit adjustments (which will not, individually or in the aggregate, be
material in magnitude); and (iii) fairly present the consolidated financial
position of PUMATECH and its subsidiaries as of the respective dates thereof and
the consolidated results of operations of PUMATECH and its
27
subsidiaries for the periods covered thereby.
4.3 AUTHORITY; BINDING NATURE OF AGREEMENT. PUMATECH has the absolute
and unrestricted right, power and authority to perform their obligations under
this Agreement and under each other agreement, document or instrument referred
to in or contemplated by this Agreement to which PUMATECH is or will be a party;
and the execution, delivery and performance by PUMATECH of this Agreement and
under each other agreement, document or instrument referred to in or
contemplated by this Agreement to which PUMATECH is or will be a party has been
duly authorized by all necessary action on the part of PUMATECH and its board of
directors. This Agreement and each other agreement, document or instrument
referred to in or contemplated by this Agreement to which PUMATECH is or will be
a party constitutes the legal, valid and binding obligation of PUMATECH,
enforceable against PUMATECH in accordance with its terms, subject to (i) laws
of general application relating to bankruptcy, insolvency and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.
4.4 CONSENTS AND APPROVALS; NO VIOLATIONS. There is no requirement
applicable to PUMATECH to make any filing with, or to obtain any permit,
authorization, consent or approval of any governmental or regulatory authority
as a condition to the lawful consummation by PUMATECH of the transactions
contemplated by this Agreement. Neither the execution and delivery of this
Agreement by PUMATECH nor the consummation by PUMATECH of the transactions
contemplated by this Agreement will (i) conflict with or result in any breach of
any provision of the Certificate of Incorporation or Bylaws of PUMATECH, (ii)
result in a material breach or default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms, conditions or
provisions of any material note, bond, mortgage, indenture, license agreement,
lease or other material contract, instrument or obligation to which PUMATECH is
a party or by which any of its assets may be bound, or violate in any material
respects any statute, rule, regulation, order, writ, injunction or decree
applicable to PUMATECH or any of its assets, where the consequences of any and
all such breaches, defaults and violations would, in the aggregate, have a
material and adverse effect on the business, operations or financial condition
of PUMATECH taken as a whole, or (iii) result in the creation of any material
(individually or in the aggregate) liens, charges or encumbrances on any of the
assets of PUMATECH.
4.5 VALID ISSUANCE. Subject to Section 1.6(e), the PUMATECH Stock to be
issued in the transactions contemplated by this Agreement will, when issued in
accordance with the provisions of this Agreement, be validly issued, fully paid
and nonassessable, and free of Encumbrances, issued in compliance with all Legal
Requirements and free of restriction on transfer other than restrictions
pursuant to this Agreement and under applicable securities laws.
SECTION 5. CERTAIN COVENANTS
5.1 ACCESS AND INVESTIGATION.
(a) During the period from the date of this Agreement through the
Closing Date (the "Pre-Closing Period"), Dry Creek shall: (a) provide PUMATECH
and PUMATECH's Representatives with reasonable access to Dry Creek's personnel
and assets and to all existing
28
books, records, tax returns, work papers and other documents and information
relating to Dry Creek; and (b) provide PUMATECH and PUMATECH's Representatives
with copies of such existing books, records, tax returns, work papers and other
documents and information relating to Dry Creek, and with such additional
financial, operating and other data and information regarding Dry Creek, as
PUMATECH may reasonably request.
(b) During the Pre-Closing Period, PUMATECH shall: (a) provide Dry
Creek and Dry Creek's Representatives with reasonable access to PUMATECH's
personnel and assets and to all existing books, records, tax returns, work
papers and other documents and information relating to PUMATECH; and (b) provide
Dry Creek and Dry Creek's Representatives with copies of such existing books,
records, tax returns, work papers and other documents and information relating
to PUMATECH, and with such additional financial, operating and other data and
information regarding PUMATECH, as Dry Creek may reasonably request.
(c) All information provided during the Pre-Closing Period by
PUMATECH or Dry Creek to the other or the other's Representatives in connection
with any investigation hereunder or pursuant to the negotiation and execution of
this Agreement and the consummation of the transactions contemplated hereby
shall be subject to the provisions of the Master Mutual Nondisclosure Agreement
dated March 3, 1999 between PUMATECH and Dry Creek (the "Nondisclosure
Agreement"), which shall remain in full force and effect. Except for information
set forth in the Disclosure Schedule or the attachments thereto, no information
obtained in any investigation shall effect or be deemed to modify any
representation or warranty contained in this Agreement.
5.2 OPERATION OF THE BUSINESS OF DRY CREEK. Without the prior written
consent of PUMATECH during the Pre-Closing Period, and except as otherwise
contemplated or permitted by this Agreement:
(a) Dry Creek shall use its best effort to conduct its business
and operations in the ordinary course and in substantially the same manner as
such business and operations have been conducted prior to the date of this
Agreement, shall pay its debts and Taxes when due (subject to good faith
disputes, if any, over such debts and Taxes), and shall pay or perform its other
material obligations when due;
(b) Dry Creek shall use commercially reasonable efforts to (i)
preserve intact its current business organization, (ii) keep available the
services of its current officers and employees and (iii) maintain its relations
and good will with all suppliers, customers, landlords, creditors, employees and
other Persons having business relationships with Dry Creek;
(c) Dry Creek shall not declare, accrue, set aside or pay or make
any distribution in respect of any Dry Creek Interest;
(d) Dry Creek shall not repurchase, redeem or otherwise reacquire
any Dry Creek Interests or other securities;
(e) Dry Creek shall not sell, issue or authorize the issuance of
(i) any Dry Creek
29
Interest or other security, (ii) any option or right to acquire any Dry Creek
Interest or other security or (iii) any instrument convertible into or
exchangeable for any Dry Creek Interest or other security;
(f) Dry Creek shall not amend its articles of organization or
operating agreement, or effect or permit Dry Creek to become a party to any
Acquisition Transaction, recapitalization, reclassification of interests or
shares, stock split, reverse stock split or similar transaction;
(g) Dry Creek shall not form any subsidiary or acquire any equity
interest or other interest in any other Entity;
(h) Dry Creek shall not (i) establish, adopt or amend any employee
benefit plan, (ii) pay any bonus or make any profit-sharing payment, severance
(except as required by applicable law), cash incentive payment or similar
payment to, increase the amount of the wages, salary, commissions, fringe
benefits or other compensation or remuneration payable to, any of its directors,
officers or employees, or accelerate the vesting of any Dry Creek Interests
subject to vesting or (iii) hire any new employee or terminate any current
employee;
(i) Dry Creek shall not change any of its methods of accounting or
accounting practices;
(j) Dry Creek shall not change or make any Tax election;
(k) Dry Creek shall not commence or settle any Legal Proceeding,
except as required by applicable law;
(l) Dry Creek shall not enter into any license agreement with
respect to or otherwise transfer any rights to any Dry Creek Proprietary Asset,
or except in the ordinary course of business enter into any license with respect
to any Proprietary Asset of any other person or entity;
(m) Dry Creek shall not enter into or amend any Contract pursuant
to which any other party is granted marketing, distribution or similar rights of
any type or scope with respect to any products or technology of Dry Creek;
(n) Dry Creek shall not amend or otherwise modify or violate the
terms of any of Dry Creek Contracts set forth or described in the Disclosure
Schedule;
(o) Dry Creek shall not incur any indebtedness for borrowed money
(other than indebtedness to trade creditors in the ordinary course of business)
or guarantee any such indebtedness or issue or sell any debt securities or
guarantee any debt securities of others;
(p) Dry Creek shall not grant any loans to others (other than
advances of employee travel expenses in the ordinary course of business
consistent with past practices) or purchase debt securities of others or amend
the terms of any outstanding loan agreement;
(q) Dry Creek shall not revalue any of its assets, including
without limitation writing
30
down the value of inventory or writing off notes;
(r) Other than obligations existing as of the date of this
Agreement, Dry Creek shall not pay, discharge or satisfy, in an amount in excess
of $25,000 (in any one case) or $100,000 (in the aggregate), any claim,
liability or obligation (absolute, accrued, asserted or unasserted, contingent
or otherwise);
(s) No Dry Creek Member shall transfer any Dry Creek Interests to
any other Person;
(t) Neither Dry Creek nor any Dry Creek Member shall agree or
commit to take any of the actions described in clauses "(c)" through "(s)"
above.
5.3 NOTIFICATION; UPDATES TO DISCLOSURE SCHEDULE.
(a) During the Pre-Closing Period, Dry Creek shall promptly notify
PUMATECH in writing of: (i) the discovery by Dry Creek of any event, condition,
fact or circumstance that occurred or existed on or prior to the date of this
Agreement and that caused or constitutes an inaccuracy in or breach of any
representation or warranty made by Dry Creek in this Agreement; (ii) any event,
condition, fact or circumstance that occurs, arises or exists after the date of
this Agreement and that would cause or constitute an inaccuracy in or breach of
any representation or warranty made by Dry Creek in this Agreement if (A) such
representation or warranty had been made as of the time of the occurrence,
existence or discovery of such event, condition, fact or circumstance or (B)
such event, condition, fact or circumstance had occurred, arisen or existed on
or prior to the date of this Agreement; (iii) any breach of any covenant or
obligation of Dry Creek; and (iv) any event, condition, fact or circumstance
that would make the timely satisfaction of any of the conditions set forth in
Section 7 impossible or unlikely. Notification in accordance with this Section
5.3(a) shall not affect Dry Creek's liability for breach of any such
representation, warranty or covenant under this Agreement.
(b) During the Pre-Closing Period, PUMATECH shall promptly notify
Dry Creek in writing of: (i) the discovery by PUMATECH of any event, condition,
fact or circumstance that occurred or existed on or prior to the date of this
Agreement and that caused or constitutes an inaccuracy in or breach of any
representation or warranty made by PUMATECH in this Agreement; (ii) any event,
condition, fact or circumstance that occurs, arises or exists after the date of
this Agreement and that would cause or constitute an inaccuracy in or breach of
any representation or warranty made by PUMATECH in this Agreement if (A) such
representation or warranty had been made as of the time of the occurrence,
existence or discovery of such event, condition, fact or circumstance or (B)
such event, condition, fact or circumstance had occurred, arisen or existed on
or prior to the date of this Agreement; (iii) any breach of any covenant or
obligation of PUMATECH; and (iv) any event, condition, fact or circumstance that
would make the timely satisfaction of any of the conditions set forth in Section
8 impossible or unlikely. Notification in accordance with this Section 5.3(b)
shall not affect PUMATECH's liability for breach of any such representation,
warranty or covenant under this Agreement.
5.4 NO NEGOTIATION. During the Pre-Closing Period, Dry Creek and the Dry
Creek Members shall not, and shall not permit any of their Representatives to:
(a) solicit any proposal or offer
31
from any Person (other than PUMATECH) for or relating to a possible Acquisition
Transaction; or (b) participate in any negotiations or enter into any agreement
with, or provide any information to or cooperate with, any Person (other than
PUMATECH) relating to or in connection with a possible Acquisition Transaction
or any other transaction which would alter the equity ownership of Dry Creek. In
addition to the foregoing, if Dry Creek receives prior to the Closing or the
termination of this Agreement any offer, proposal, or request relating to any of
the above, Dry Creek shall immediately notify PUMATECH thereof, including
information as to the identity of the offeror or the party making any such offer
or proposal and the specific terms of such offer or proposal, as the case may
be, and such other information related thereto as PUMATECH may reasonably
request.
5.5 FIRPTA MATTERS At the Closing, (a) Dry Creek shall deliver to
PUMATECH a statement (in such form as may be reasonably requested by General
Counsel Associates LLP) conforming to the requirements of Section
1.897-2(h)(1)(I) of the United States Treasury Regulation, and (b) Dry Creek
shall deliver to the Internal Revenue Service the notification required under
Section 1.897-2(h)(2) of the United States Treasury Regulations.
SECTION 6. ADDITIONAL COVENANTS OF THE PARTIES
6.1 FILINGS AND CONSENTS. As promptly as practicable after the execution
of this Agreement, each party to this Agreement (a) shall make all filings, if
any, and give all notices, if any, required to be made and given by such party
in connection with the transactions contemplated by this Agreement and (b) shall
use all commercially reasonable efforts to obtain all Consents, if any, required
to be obtained (pursuant to any applicable Legal Requirement or Contract, or
otherwise) by such party in connection with the transactions contemplated by
this Agreement.
6.2 NASDAQ LISTING. If required, as promptly as practicable after the
date hereof, and in any event prior to the Closing, PUMATECH shall use its best
efforts to cause the shares of the PUMATECH Stock to be issued pursuant to this
Agreement to be included on Nasdaq, subject to notice of official issuance
thereof.
6.3 PUBLIC ANNOUNCEMENTS. Except as required by applicable law,
PUMATECH, in its sole discretion, shall determine the form, timing and contents
of announcements and disclosures regarding the proposed transaction; PROVIDED,
HOWEVER, prior to any such announcement, PUMATECH shall afford Dry Creek a
reasonable opportunity to review and comment on any such announcement or
disclosure.
6.4 BEST EFFORTS. During the Pre-Closing Period, Dry Creek and PUMATECH
shall each use their best efforts to cause the conditions set forth in Sections
7 and 8 to be satisfied before July 14, 2000.
6.5 EMPLOYEE MATTERS. PUMATECH and Dry Creek shall use commercially
reasonable efforts to recruit each employee of Dry Creek to continue at-will
employment with Dry Creek after the Closing. Those employees of Dry Creek that
continue to be employees of PUMATECH or any of its affiliates, including Dry
Creek, following the Closing shall upon the closing be eligible to participate
in PUMATECH's health, vacation, employee stock purchase, 401(k) and
32
other plans, to the same extent as comparably situated employees of PUMATECH and
shall receive credit under PUMATECH's benefit plans for time served as an
employee of Dry Creek.
6.6 PRIVATE PLACEMENT. PUMATECH and Dry Creek shall each take all steps
necessary or desirable, utilize all commercially reasonable efforts and
cooperate with one another in every way to have the issuance of the shares of
PUMATECH Stock to be issued in the transactions contemplated by this Agreement
qualify for one of the exemptions from registration under the Securities Act
provided in Regulation D promulgated thereunder, including the retention of a
purchaser representative, if necessary.
6.7 RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the SEC which may, under certain circumstances
and subject to compliance with applicable rules and holding periods, permit the
sale of the PUMATECH Stock to the public without registration, PUMATECH agrees
to use its best efforts to:
(a) Make and keep public information available, as prescribed by
Rule 144(c) under the Securities Act public so long as PUMATECH remains subject
to the periodic reporting requirements under Sections 13 or 15(d) of the
Exchange Act; and
(b) Use its best efforts to file with the SEC in a timely manner
all reports and other documents required of PUMATECH under the Securities Act
and the Exchange Act.
SECTION 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF PUMATECH
The obligations of PUMATECH to effect the transactions contemplated
by this Agreement are subject to the satisfaction (or waiver by PUMATECH), at or
prior to the Closing, of each of the following conditions:
7.1 ACCURACY OF REPRESENTATIONS. Each of the representations and
warranties made by Dry Creek and the Dry Creek Members in this Agreement shall
have been accurate as of the date of this Agreement. In addition, the
representations and warranties of Dry Creek and the Dry Creek Members contained
in this Agreement shall be true and correct in all material respects on and as
of the Closing except for changes contemplated by this Agreement and except for
those representations and warranties which address matters only as of a
particular date (which shall remain true and correct as of such particular
date), with the same force and effect as if made on and as of the Closing except
in such cases (other than the representations in Sections 2.2, 2.3, 2.21, 3.1
and 3.4) where the failure to be so true and correct would not in the aggregate
have an adverse effect on Dry Creek of up to $100,000. PUMATECH shall have
received a certificate with respect to the foregoing signed on behalf of each of
the Managers of Dry Creek.
7.2 PERFORMANCE OF COVENANTS. All of the covenants and obligations that
Dry Creek is required to comply with or to perform at or prior to the Closing
shall have been complied with and performed in all material respects, except
where the failure to have performed or complied with such covenants and
obligations has not had a Material Adverse Effect on Dry Creek, or PUMATECH's
ownership and control thereof, after the Closing. PUMATECH shall have received a
certificate with respect to the foregoing signed on behalf of each of the
Managers of
33
Dry Creek.
7.3 AGREEMENTS AND DOCUMENTS. PUMATECH shall have received the following
agreements and documents, each of which shall be in full force and effect:
(a) an Escrow Agreement in the form of EXHIBIT C hereto, executed
by each of the Dry Creek Members;
(b) written resignations of all managers of Dry Creek, effective
as of the Closing Date;
(c) executed Employment and Release Agreements in substantially
the form attached hereto as EXHIBIT D1 with each of ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇, EXHIBIT D2 with each of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, and EXHIBIT D3 in the case of ▇▇▇▇▇ ▇▇▇▇▇▇ and seven (7) of the
remaining nine (9) employees of Dry Creek;
(d) executed Noncompetition Agreements in the form of EXHIBIT D4
with each of ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇;
(e) a legal opinion of Tufts ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP,
substantially in the form of EXHIBIT F hereto;
(f) a FIRPTA Statement, executed by Dry Creek;
(g) a certificate executed on behalf of Dry Creek by its Managers
with respect to the matters set forth in Sections 7.1 and 7.2; and
(h) the other documents specified in Section 1.4 hereof.
7.4 CONSENTS. All Consents required to be obtained (pursuant to any
applicable Legal Requirement or Contract, or otherwise) in connection with the
transactions contemplated by this Agreement have been obtained.
7.5 NO RESTRAINTS. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the
transactions contemplated by this Agreement shall have been issued by any court
of competent jurisdiction and remain in effect, and there shall not be any Legal
Requirement enacted or deemed applicable to the transactions contemplated by
this Agreement that makes consummation of the transactions contemplated by this
Agreement illegal.
7.6 PRIVATE PLACEMENT. The issuance of the PUMATECH Stock in the
transactions contemplated by this Agreement shall qualify for issuance under
Regulation D in the reasonable judgment of PUMATECH.
7.7 TERMINATION OF PENSION PLAN. Dry Creek shall, immediately prior to
the Closing Date, based on direction from PUMATECH terminate the Dry Creek
401(k) Plan (the "Plan") and no further contributions shall be made to the Plan,
provided that as a condition of such termination
34
Dry Creek's employees shall be eligible to participate in PUMATECH's 401(k) plan
immediately following the Closing Date. Dry Creek shall provide to PUMATECH (i)
executed resolutions by the Managers of Dry Creek authorizing the termination
and (ii) an executed amendment to the Plan sufficient to assure compliance with
all applicable requirements of the Internal Revenue Code and regulations
thereunder so that the tax-qualified status of the Plan will be maintained at
the time of termination.
SECTION 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF DRY CREEK. The obligations of
Dry Creek to effect the transactions contemplated by this Agreement are subject
to the satisfaction (or waiver), at or prior to the Closing, of the following
conditions:
8.1 ACCURACY OF REPRESENTATIONS. Each of the representations and
warranties made by PUMATECH in this Agreement shall have been accurate as of the
date of this Agreement. In addition, the representations and warranties of
PUMATECH contained in this Agreement shall be true and correct in all material
respects on and as of the Closing except for changes contemplated by this
Agreement and except for those representations and warranties which address
matters only as of a particular date (which shall remain true and correct as of
such particular date), with the same force and effect as if made on and as of
the Closing except in such cases where the failure to be so true and correct
would not have a Material Adverse Effect on PUMATECH. Dry Creek shall have
received a certificate with respect to the foregoing signed on behalf of
PUMATECH by the Chief Financial Officer of PUMATECH.
8.2 PERFORMANCE OF COVENANTS. All of the covenants and obligations that
PUMATECH are required to comply with or to perform at or prior to the Closing
shall have been complied with and performed in all material respects, except
where the failure to have performed or complied with such covenants and
obligations has not had a Material Adverse Effect on PUMATECH.
8.3 ESCROW AGREEMENT. Dry Creek shall have received an Escrow Agreement
in the form of EXHIBIT C hereto, executed by PUMATECH.
8.4 CONSENTS. All Consents required to be obtained (pursuant to any
applicable Legal Requirement or Contract, or otherwise) in connection with the
transactions contemplated by this Agreement have been obtained.
8.5 NASDAQ LISTING. If required by Nasdaq, the shares of PUMATECH Stock
to be issued in the transactions contemplated by this Agreement shall have been
approved for listing (subject to notice of issuance) on the Nasdaq National
Market.
8.6 NO RESTRAINTS. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the
transactions contemplated by this Agreement shall have been issued by any court
of competent jurisdiction and remain in effect, and there shall not be any Legal
Requirement enacted or deemed applicable to the transactions contemplated by
this Agreement that makes consummation of the transactions contemplated by this
Agreement illegal.
SECTION 9. TERMINATION
35
9.1 TERMINATION EVENTS. This Agreement may be terminated prior to the
Closing:
(a) by PUMATECH if (i) any representation or warranty of Dry Creek
contained in Section 2 was incorrect in any material respect when made such that
the condition set forth in Section 7.1 would not be satisfied; (ii) any
representation or warranty of the Dry Creek Members contained in Section 3 was
incorrect in any material respect when made such that the condition set forth in
Section 7.1 would not be satisfied; or (iii) if (x) any of Dry Creek's covenants
contained in this Agreement shall have been breached in any material respect;
(y) such breach has not been cured within 15 days after written notice thereof
is delivered by PUMATECH to Dry Creek; provided, however, that no cure period
shall apply if such breach is not capable of cure; and (z) as a result of such
breach, the condition set forth in Section 7.2 would not be satisfied;
(b) by Dry Creek if any representation or warranty of PUMATECH
contained in Section 4 was incorrect in any material respect when made such that
the condition set forth in Section 8.1 would not be satisfied, or if: (i) any of
PUMATECH's 's covenants contained in this Agreement shall have been breached in
any material respect; (ii) such breach has not been cured within 15 days after
written notice thereof is delivered by Dry Creek to PUMATECH; provided, however,
that no cure period shall apply if such breach is not capable of cure; and (iii)
as a result of such breach, the condition set forth in Section 8.2 would not be
satisfied;
(c) by PUMATECH if the Closing has not taken place on or before
July 30, 2000 (other than as a result of any failure on the part of PUMATECH to
comply with or perform any covenant or obligation of PUMATECH set forth in this
Agreement or in any other agreement or instrument delivered to Dry Creek);
(d) by Dry Creek if the Closing has not taken place on or before
July 30, 2000 (other than as a result of the failure on the part of Dry Creek to
comply with or perform any covenant or obligation set forth in this Agreement or
in any other agreement or instrument delivered to PUMATECH); or
(e) by the mutual written consent of PUMATECH and Dry Creek.
9.2 TERMINATION PROCEDURES. If PUMATECH wishes to terminate this
Agreement pursuant to Section 9.1(a) or Section 9.1(c), PUMATECH shall deliver
to Dry Creek a written notice stating that PUMATECH is terminating this
Agreement and setting forth a brief description of the basis on which PUMATECH
is terminating this Agreement. If Dry Creek wishes to terminate this Agreement
pursuant to Section 9.1(b) or Section 9.1(d), Dry Creek shall deliver to
PUMATECH a notice, in writing, stating that Dry Creek is terminating this
Agreement and setting forth a brief description of the basis on which it is
terminating this Agreement.
9.3 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
Section 9.1, all further obligations of the parties under this Agreement shall
terminate; PROVIDED, HOWEVER, that: (a) none of the parties shall be relieved of
any obligation or liability arising from any prior willful breach by such party
of any provision of this Agreement; and (b) the parties shall, in all events,
remain bound by and continue to be subject to the provisions set forth in
Sections 6.2, 11
36
and this Section 9.3 and in the Nondisclosure Agreement.
SECTION 10. INDEMNIFICATION, ETC.
10.1 SURVIVAL OF REPRESENTATIONS, ETC. The representations and warranties
made by Dry Creek, Dry Creek Members and PUMATECH in this Agreement shall
survive the Closing and shall expire on the one year anniversary of the Closing
Date (the "Termination Date"). Upon the expiration of the representations and
warranties of Dry Creek, the Dry Creek Members and PUMATECH, all liability of
the parties with respect to any breach of such representation or warranties
shall thereupon be extinguished except to the extent a claim for breach shall
have been made prior to such expiration. The pre-closing covenants of Dry Creek
and PUMATECH contained in this Agreement shall terminate as of the Closing.
10.2 INDEMNIFICATION.
(a) INDEMNIFICATION BY DRY CREEK MEMBERS. From and after the
Closing Date (but subject to Section 10.1), the Dry Creek Members who shall have
received PUMATECH Stock and Cash Consideration pursuant to Section 1.5 (the
"Member Indemnitors"), shall (pro rata in accordance with their interest in the
Escrow Fund) hold harmless and indemnify each of the Indemnitees from and
against, and shall compensate and reimburse each of the Indemnitees for, any
Damages which are suffered or incurred by any of the Indemnitees or to which any
of the Indemnitees may otherwise become subject (regardless of whether or not
such Damages relate to any third-party claim) and which arise from or as a
direct or indirect result of, or are directly or indirectly connected with: (i)
any inaccuracy in or Breach of any representation or warranty made by Dry Creek
or the Dry Creek Members in this Agreement or the Disclosure Schedule(ii) any
breach of any covenant or obligation of Dry Creek or the Dry Creek Members; or
(iii) any Legal Proceeding relating to any Breach referred to in clause "(i)"
or"(ii)" of this sentence.
(b) INDEMNIFICATION BY PUMATECH. From and after the Closing Date
(but subject to Section 10.1), PUMATECH shall hold harmless and indemnify each
Dry Creek Member from and against, and shall compensate and reimburse each of
the Dry Creek Members for, any Damages which are suffered or incurred by any of
the Dry Creek Members or to which any of the Dry Creek Members may otherwise
become subject (regardless of whether or not such Damages relate to any
third-party claim) and which arise from or as a direct or indirect result of, or
are directly or indirectly connected with: (i) any inaccuracy in or Breach of
any representation or warranty made by PUMATECH in this Agreement ; (ii) any
breach of any covenant or obligation of PUMATECH; or (iii) any Legal Proceeding
relating to any Breach referred to in clause "(i)" or "(ii)" of this sentence.
Notwithstanding anything to the contrary, PUMATECH shall be under no obligation
to deal directly with individual Dry Creek Members in connection with the
indemnity provided to the Dry Creek Members under this Section 10 but shall only
be obligated to respond to notices from, and to provide notices to, and
otherwise deal only with, the Members' Agent, who shall have exclusive authority
to act for purposes of the indemnification provided by PUMATECH under this
Section 10 on behalf of all of the Dry Creek Members.
(c) DAMAGES TO DRY CREEK. If Dry Creek suffers or otherwise
becomes subject to any Damages, then (without limiting any of the rights of Dry
Creek as an Indemnitee)
37
PUMATECH shall also be deemed, by virtue of its ownership of the shares of Dry
Creek, to have suffered Damages.
10.3 EXCLUSIVE REMEDY; LIMITATIONS. Absent fraud, willful
misrepresentation, or willful deceit, from and after the Closing, recourse of
the Indemnitees to the Escrow Amount in the Escrow Fund shall be the sole and
exclusive remedy of the Indemnitees for Damages relating to any claim relating
to this Agreement provided, however, that nothing in this Section 10 shall limit
an individual Dry Creek Member's liability with respect to a Breach of a
representation or warranty made by such Dry Creek Member in Section 3.1 of this
Agreement. Absent fraud, willful misrepresentation, or willful deceit, from and
after the Closing, the maximum liability of PUMATECH to the Dry Creek Members
for Damages relating to any Breach of any representation, warranty, covenant or
agreement contained in this Agreement shall be limited to $653,061. The Dry
Creek Members shall not be required to make any indemnification, compensation or
reimbursement payment pursuant to Section 10.2(a) until such time as the total
amount of all Damages incurred by the Indemnitees exceeds $25,000. If the total
amount of such Damages exceeds $25,000, then the Indemnitees shall be entitled
to be indemnified against all Damages and not only for the portion of such
Damages exceeding $25,000. PUMATECH shall not be required to make any
indemnification, compensation or reimbursement payment pursuant to Section
10.2(b) until such time as the total amount of all Damages incurred by the Dry
Creek Members exceeds $25,000. If the total amount of such Damages exceeds
$25,000, then the Dry Creek Members shall be entitled to be indemnified against
all Damages and not only for the portion of such Damages exceeding $25,000.
10.4 NO CONTRIBUTION. Each Dry Creek Member waives, acknowledges and
agrees that he shall not have and shall not exercise or assert (or attempt to
exercise or assert), any right of contribution, right of indemnity or other
similar right or remedy against Dry Creek in connection with any actual or
alleged inaccuracy in or other Breach of any representation, warranty, covenant
or obligation set forth in this Agreement.
10.5 DEFENSE OF THIRD PARTY CLAIMS AGAINST INDEMNITEES. In the event of
the assertion or commencement by any Person of any claim or Legal Proceeding
(whether against Dry Creek, against any other Indemnitee or against any other
Person) with respect to which any of the Dry Creek Members may become obligated
to indemnify, hold harmless, pay, compensate or reimburse any Indemnitee
pursuant to this Section 10, (i) PUMATECH, as soon as practicable after it
receives written notice of any such claim or Legal Proceeding, shall notify the
Members' Agent of such claim or Legal Proceeding (it being understood that the
failure to notify the Members' Agent shall not in any way limit the rights of
the Indemnitees under this Agreement except to the extent that such failure
materially prejudices the defenses available to the Members' Agent), and (ii)
PUMATECH shall have the right, at its election, to assume the defense of such
claim or Legal Proceeding; provided, however, that notwithstanding the foregoing
if the maximum exposure (as reasonably determined by PUMATECH) to all
Indemnitees in such claim or Legal Proceeding, together with the maximum
exposure (as reasonably determined by PUMATECH) under all claims or Legal
Proceedings that may then already be pending involving exposure to the
Indemnitees under this Section 10, does not exceed the value of the shares
placed in the Escrow Fund (with such shares being deemed to have a per share
value equal to
38
PUMATECH Average Stock Price), or if PUMATECH does not within a reasonable
period of time assume the defense of such claim or Legal Proceeding, then the
Members' Agent may assume the defense of such claim or Legal Proceeding. If the
Members' Agent assumes the defense of any such claim or Legal Proceeding:
(a) the Members' Agent shall proceed to defend such claim or Legal
Proceeding in a diligent manner with counsel reasonably satisfactory to
PUMATECH;
(b) PUMATECH shall make available to the Members' Agent any
non-privileged documents and non-privileged materials in the possession of
PUMATECH that may be necessary to the defense of such claim or Legal Proceeding;
(c) the Members' Agent shall keep PUMATECH informed of all
material developments and events relating to such claim or Legal Proceeding;
(d) PUMATECH shall have the right to participate in the defense of
such claim or Legal Proceeding at its own expense;
(e) the Members' Agent shall not settle, adjust or compromise such
claim or Legal Proceeding without the prior written consent of PUMATECH (which
consent shall not be unreasonably withheld); and
(f) PUMATECH may at any time assume the defense of such claim or
Legal Proceeding if (i) the Members' Agent shall fail to comply with any of its
obligations under this Section 10.5 (including its obligation to defend any
claim or Legal Proceeding in a diligent manner), or (ii) PUMATECH, after
consultation with its counsel, reasonably determines that the control of the
defense by the Members' Agent would give rise to a conflict of interest.
If PUMATECH proceeds with the defense of any such claim or Legal Proceeding on
its own:
(i) the Dry Creek Members shall make available to PUMATECH
any documents and materials in the possession or control of any of the Dry Creek
Members that may be necessary to the defense of such claim or Legal Proceeding;
(ii) PUMATECH shall keep the Members' Agent informed of all
material developments and events relating to such claim or Legal Proceeding; and
(iii) PUMATECH shall have the right to settle, adjust or
compromise such claim or Legal Proceeding with the consent of the Members'
Agent; PROVIDED, HOWEVER, that the Members' Agent shall not unreasonably
withhold such consent.
10.6 DEFENSE OF THIRD PARTY CLAIMS AGAINST DRY CREEK MEMBERS. In the
event of the assertion or commencement by any Person of any claim or Legal
Proceeding with respect to which PUMATECH may become obligated to indemnify,
hold harmless, pay, compensate or reimburse any Dry Creek Member pursuant to
this Section 10, (i) the Members' Agent, as soon as practicable after it
receives written notice of any such claim or Legal Proceeding, shall notify
39
PUMATECH of such claim or Legal Proceeding (it being understood that the failure
to notify PUMATECH shall not in any way limit the rights of the Dry Creek
Members under this Agreement except to the extent such failure materially
prejudices the defenses available to PUMATECH), and (ii) the Members' Agent
shall have the right, at its election, to assume the defense of such claim or
Legal Proceeding; provided, however, that notwithstanding the foregoing if the
maximum exposure (as reasonably determined by the Members' Agent) to the Dry
Creek Members in such claim or Legal Proceeding, together with the maximum
exposure (as reasonably determined by the Members' Agent) under all claims or
Legal Proceedings that may then already be pending involving exposure to the Dry
Creek Members under this Section 10, does not exceed the value of the amount set
forth in the second sentence of Section 10.3, or if the Members' Agent does not
within a reasonable period of time assume the defense of such claim or Legal
Proceeding, then PUMATECH may assume the defense of such claim or Legal
Proceeding. The parties shall thereafter proceed in the manner provided in
Section 10.5 with the roles of PUMATECH and the Members' Agent reversed.
10.7 EXERCISE OF REMEDIES BY INDEMNITEES OTHER THAN PUMATECH. No
Indemnitee (other than PUMATECH or any successor thereto or assign thereof)
shall be permitted to assert any indemnification claim or exercise any other
remedy under this Agreement unless PUMATECH (or any successor thereto or assign
thereof) shall have consented to the assertion of such indemnification claim or
the exercise of such other remedy.
SECTION 11. MISCELLANEOUS PROVISIONS
11.1 MEMBERS' AGENT. The Dry Creek Members irrevocably appoint ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ as their agent in connection with the transactions contemplated by
Section 10 of this Agreement and the Escrow Agreement (the "Members' Agent"),
and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ hereby accepts his appointment as the Members' Agent.
PUMATECH shall be entitled to deal with the Members' Agent on all matters
relating to Section 10 and the Escrow Agreement, and shall be entitled to rely
on any document executed or purported to be executed on behalf of the Member
Indemnitors by the Members' Agent, and on any other action taken or purported to
be taken on behalf of the Member Indemnitors by the Members' Agent, as fully
binding upon such Member Indemnitor. If the Members' Agent shall die, become
disabled or otherwise be unable to fulfill his responsibilities as agent of the
Member Indemnitors, then the Member Indemnitors shall, within ten days after
such death or disability, appoint a successor agent and, promptly thereafter,
shall notify PUMATECH of the identity of such successor. Any such successor
shall become the "Members' Agent" for purposes of this Section 11.1. If for any
reason there is no Members' Agent at any time, all references herein to the
Members' Agent shall be deemed to refer to the Member Indemnitors.
11.2 FURTHER ASSURANCES. Each party hereto shall execute and cause to be
delivered to each other party hereto such instruments and other documents, and
shall take such other actions, as such other party may reasonably request (prior
to, at or after the Closing) for the purpose of carrying out or evidencing any
of the transactions contemplated by this Agreement.
11.3 FEES AND EXPENSES. Each party to this Agreement shall bear and pay
all fees, costs and
40
expenses (including legal fees and accounting fees) that have been incurred or
that are incurred by such party in connection with the transactions contemplated
by this Agreement.
11.4 ATTORNEYS' FEES. If any action or proceeding relating to this
Agreement or the enforcement of any provision of this Agreement is brought
against any party hereto, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements (in addition to any other
relief to which the prevailing party may be entitled).
11.5 NOTICES. Any notice or other communication required or permitted to
be delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by facsimile) to the
address or facsimile telephone number set forth beneath the name of such party
below (or to such other address or facsimile telephone number as such party
shall have specified in a written notice given to the other parties hereto):
IF TO PUMATECH:
Puma Technology, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO:
General Counsel Associates LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO DRY CREEK, THE MEMBERS' AGENT OR THE DRY CREEK MEMBERS:
Dry Creek Software LLC
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (408) 42-5525
WITH A COPY TO:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tufts ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
11.6 HEADINGS. The underlined headings contained in this Agreement are
for convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
11.7 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
11.8 GOVERNING LAW; VENUE. This Agreement shall be construed in
accordance with, and governed in all respects by, the internal laws of the State
of California (without giving effect to principles of conflicts of laws). In any
action between the parties arising out of or relating to this Agreement or any
of the transactions contemplated by this Agreement: (a) each of the parties
irrevocably and unconditionally consents and submits to the exclusive
jurisdiction and venue of the state and federal courts located in the County of
Santa ▇▇▇▇▇, State of California; (b) if any such action is commenced in a state
court, then, subject to applicable law, no party shall object to the removal of
such action to any federal court located in the Northern District of California;
(c) each of the parties irrevocably consents to service of process by first
class certified mail, return receipt requested, postage prepaid, to the address
at which such party is to receive notice in accordance with Section 11.5.
11.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon each of
the parties hereto and each of their respective successors and assigns, if any.
This Agreement shall inure to the benefit of: Dry Creek, the Dry Creek Members,
PUMATECH, and the respective successors and assigns, if any, of the foregoing.
No party may assign any of its rights, or delegate any of its obligations, under
this Agreement without the prior written consent of the other parties. PUMATECH
will consent to the assignment of a Dry Creek Member's right to consideration
hereunder to a trust established by such Dry Creek Member for estate planning
purposes if PUMATECH is satisfied that such assignment is in full compliance
with all applicable securities and other laws and such assignee executes and
delivers to PUMATECH documentation satisfactory to PUMATECH reflecting such
assignment, which documentation may include, without limitation, such
representations, warranties and covenants as PUMATECH may require.
11.10 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. The rights and remedies
of the parties hereto shall be cumulative (and not alternative). The parties to
this Agreement agree that, in the event of any breach or threatened breach by
any party to this Agreement of any covenant, obligation or other provision set
forth in this Agreement for the benefit of any other party to this Agreement,
such other party shall be entitled (in addition to any other remedy that may be
available to it) to (a) a decree or order of specific performance or mandamus to
enforce the observance and performance of such covenant, obligation or other
provision and (b) an injunction restraining such breach or threatened breach.
11.11 WAIVER. No failure on the part of any Person to exercise any power,
right, privilege or
42
remedy under this Agreement, and no delay on the part of any Person in
exercising any power, right, privilege or remedy under this Agreement, shall
operate as a waiver of such power, right, privilege or remedy; and no single or
partial exercise of any such power, right, privilege or remedy shall preclude
any other or further exercise thereof or of any other power, right, privilege or
remedy. No Person shall be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement, unless
the waiver of such claim, power, right, privilege or remedy is expressly set
forth in a written instrument duly executed and delivered on behalf of such
Person; and any such waiver shall not be applicable or have any effect except in
the specific instance in which it is given.
11.12 AMENDMENTS. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of all of the parties hereto; provided, however, that any
amendment to this Agreement which solely adds New Dry Creek Members as parties
shall not require any approval by any of the parties and may be effected by
adding additional signature pages and additional Exhibit A pages hereto.
11.13 SEVERABILITY. In the event that any provision of this Agreement, or
the application of any such provision to any Person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
to Persons or circumstances other than those as to which it is determined to be
invalid, unlawful, void or unenforceable, shall not be impaired or otherwise
affected and shall continue to be valid and enforceable to the fullest extent
permitted by law.
11.14 PARTIES IN INTEREST. None of the provisions of this Agreement is
intended to provide any rights or remedies to any Person other than the parties
hereto, and their respective successors and assigns, if any.
11.15 ENTIRE AGREEMENT. This Agreement and the other agreements referred
to herein set forth the entire understanding of the parties hereto relating to
the subject matter hereof and thereof and supersede all prior agreements and
understandings among or between any of the parties relating to the subject
matter hereof and thereof; PROVIDED, HOWEVER, that the Nondisclosure Agreement
shall not be superseded by this Agreement and shall remain in effect in
accordance with its terms until the earlier of (a) the Closing Date or (b) the
date on which such Nondisclosure Agreement is terminated in accordance with its
terms.
11.16 CONSTRUCTION.
(a) For purposes of this Agreement, whenever the context requires:
the singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender shall
include the masculine and neuter genders; and the neuter gender shall include
the masculine and feminine genders.
(b) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.
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(c) As used in this Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(d) Except as otherwise indicated, all references in this
Agreement to "Sections," "Schedules" and "Exhibits" are intended to refer to
Sections of this Agreement and Schedules and Exhibits to this Agreement.
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The parties hereto have caused this Agreement to be executed and delivered
as of July __, 2000.
PUMA TECHNOLOGY, INC.
Name: ______________________________
Title: _____________________________
DRY CREEK SOFTWARE LLC
Name: ______________________________
Title: _____________________________
DRY CREEK MEMBERS' AGENT
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
DRY CREEK MEMBERS
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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EXHIBIT A
DRY CREEK MEMBERS
PERMANENT CAPITAL
NAME RESIDENCE ADDRESS CONTRIBUTION
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇. $6,700
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇,▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
46
EXHIBIT B
CERTAIN DEFINITIONS
For purposes of the Agreement (including this EXHIBIT B):
ACQUISITION TRANSACTION. "Acquisition Transaction" means any transaction
involving: (a) the sale, license, disposition or acquisition of all or
substantially all of the business or assets of Dry Creek (taken as a whole), as
the case may be; (b) the issuance, disposition or acquisition of membership
interests, economic interests, options, and rights to acquire interests or other
equity securities of Dry Creek constituting more than 50% of the outstanding
membership interests or economic interests of Dry Creek; or (c) any
consolidation, business combination, reorganization or similar transaction
involving Dry Creek.
AGREEMENT. "Agreement" shall mean the Interest Purchase Agreement to which
this EXHIBIT B is attached (including the Disclosure Schedule), as it may be
amended from time to time.
BREACH. There shall be deemed to be a "Breach" of a representation,
warranty, covenant, obligation or other provision if there is or has been any
material inaccuracy in or breach of, or any failure to comply with or perform,
such representation, warranty, covenant, obligation or other provision.
DRY CREEK INTERESTS. "Dry Creek Interests" means the outstanding
membership interests, economic interests, options, and rights to acquire
interests of Dry Creek.
DRY CREEK CONTRACT. "Dry Creek Contract" shall mean any Contract: (a) to
which Dry Creek is a party; (b) by which Dry Creek, or any of its assets is or
may become bound or under which Dry Creek has, or may become subject to, any
obligation; or (c) under which Dry Creek has or may acquire any right or
interest.
DRY CREEK PROPRIETARY ASSET. "Dry Creek Proprietary Asset" shall mean any
Proprietary Asset owned by or licensed to Dry Creek or otherwise used by Dry
Creek.
CONSENT. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
CONTRACT. "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, warranty,
insurance policy, benefit plan, or legally binding commitment or undertaking of
any nature.
DAMAGES. "Damages" shall include any loss, damage, injury, decline in
value, lost opportunity, Liability, claim, demand, settlement, judgment, award,
fine, penalty, Tax, fee (including reasonable attorneys' fees), charge, cost
(including costs of investigation) or expense of any nature.
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DISCLOSURE SCHEDULE. "Disclosure Schedule" shall mean the schedule (dated
as of the date of the Agreement) delivered to PUMATECH on behalf of Dry Creek
and the Dry Creek Members.
EMPLOYEE BENEFIT PLAN. "Employee Benefit Plan" shall have the meaning
specified in Section 3(3) of ERISA.
ENCUMBRANCE. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).
ENTITY. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or entity.
EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
GOVERNMENTAL AUTHORIZATION. "Governmental Authorization" shall mean any:
(a) permit, license, certificate, franchise, permission, clearance,
registration, qualification or authorization issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement; or (b) right under any Contract with any Governmental
Body.
GOVERNMENTAL BODY. "Governmental Body" shall mean any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental division, department, agency, commission,
instrumentality, official, organization, unit, body or Entity and any court or
other tribunal).
KNOWLEDGE. An individual shall be deemed to have "Knowledge" of a
particular fact or other matter if: (a) such individual is actually aware of
such fact or other matter; or (b) a prudent individual would be expected to
become aware of such fact or other matter in normal scope of performing his
duties. Dry Creek shall be deemed to have "Knowledge" of a particular fact or
other matter if any officer or director level employee of Dry Creek has
Knowledge of such fact or other matter. PUMATECH shall be deemed to have
"Knowledge" of a particular fact or other matter if any officer of PUMATECH has
Knowledge of such fact or other matter.
INDEMNITEES. "Indemnitees" shall mean the following Persons:
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(a) PUMATECH; (b) PUMATECH's current and future affiliates (including Dry
Creek); (c) the respective Representatives of the Persons referred to in clauses
"(a)" and "(b)" above; and (d) the respective successors and assigns of the
Persons referred to in clauses "(a)", "(b)" and "(c)" above; PROVIDED, HOWEVER,
that the Dry Creek Members shall not be deemed to be "Indemnitees."
LEGAL PROCEEDING. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.
LEGAL REQUIREMENT. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Body.
LIABILITY. "Liability" means any debt, obligation, duty or liability of
any nature (including any unknown, undisclosed, unmatured, unaccrued,
unasserted, contingent, indirect, conditional, implied, vicarious, derivative,
joint, several or secondary liability), regardless of whether such debt,
obligation, duty or liability would be required to be disclosed on a balance
sheet prepared in accordance with generally accepted accounting principles and
regardless of whether such debt, obligation, duty or liability is immediately
due and payable.
MATERIAL ADVERSE EFFECT. A violation or other matter will be deemed to
have a "Material Adverse Effect" on Dry Creek if such violation or other matter
would have a material adverse effect on Dry Creek's business, condition, assets,
liabilities, operations or financial performance.
MEMBER'S PERCENTAGE. A Member's Percentage shall mean the Member's initial
capital contributions to Dry Creek as follows: (i) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ - 67%; and
(ii) ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ - 33%.
PERSON. "Person" shall mean any individual, Entity or Governmental Body.
PROPRIETARY ASSET. "Proprietary Asset" shall mean any: (a) patent, patent
application, trademark (whether registered or unregistered), trademark
application, trade name, fictitious business name, service ▇▇▇▇ (whether
registered or unregistered), service ▇▇▇▇ application, copyright (whether
registered or unregistered), copyright application, maskwork, maskwork
application, trade secret, know-how, customer list, franchise, system, computer
software, source code, computer program, invention, design, blueprint,
engineering drawing, proprietary product, technology, proprietary right or other
intellectual property right or intangible asset; or (b) right to use or exploit
any of the foregoing.
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PUMATECH STOCK. "PUMATECH Stock" shall mean the common stock, par value
$.001 per share, of PUMATECH.
PUMATECH AVERAGE STOCK PRICE. "PUMATECH Average Stock Price" means the
average of the closing prices for a share of PUMATECH Common Stock as quoted on
the Nasdaq Stock Market for the ten (10) trading days immediately preceding and
ending on the trading day that is three (3) calendar days prior to the date
hereof, which is equal to $29.6252.
REPRESENTATIVES. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives.
SEC. "SEC" shall mean the United States Securities and Exchange
Commission.
SECURITIES ACT. "Securities Act" shall mean the Securities Act of 1933, as
amended.
TAX. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, gross receipts fee or tax, value-added tax, surtax, excise
tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax,
business tax, withholding tax or payroll tax), levy, assessment, tariff, duty
(including any customs duty), deficiency or fee, and any related charge or
amount (including any fine, penalty or interest), imposed, assessed or collected
by or under the authority of any Governmental Body.
TAX RETURN. "Tax Return" shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
50