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AGREEMENT AND PLAN OF MERGER
DATED AS OF OCTOBER 28, 2001,
BY AND AMONG
SPSS INC.,
RED SOX ACQUISITION CORP.
AND
NETGENESIS CORP.
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TABLE OF CONTENTS
ARTICLE I. THE MERGER; CERTAIN RELATED MATTERS............................... 1
1.1 THE MERGER ................................................ 1
1.2 CLOSING ................................................... 2
1.3 EFFECTIVE TIME............................................. 2
1.4 EFFECTS OF THE MERGER...................................... 2
1.5 CERTIFICATE OF INCORPORATION............................... 2
1.6 BYLAWS..................................................... 2
1.7 APPOINTMENT OF DIRECTORS AND OFFICERS...................... 2
1.8 EFFECT ON CAPITAL STOCK.................................... 3
1.9 NETGENESIS STOCK OPTIONS AND OTHER EQUITY-BASED AWARDS..... 4
1.10 OBLIGATIONS UNDER GMBH MERGER AGREEMENT.................... 5
1.11 CERTAIN ADJUSTMENTS........................................ 5
1.12 TAX CONSEQUENCES........................................... 5
ARTICLE II. EXCHANGE OF CERTIFICATES......................................... 5
2.1 EXCHANGE FUND.............................................. 5
2.2 EXCHANGE PROCEDURES........................................ 6
2.3 DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES........... 6
2.4 NO FRACTIONAL SHARES OF SPSS COMMON STOCK.................. 6
2.5 TERMINATION OF EXCHANGE FUND............................... 7
2.6 NO LIABILITY............................................... 7
2.7 INVESTMENT OF THE EXCHANGE FUND............................ 7
2.8 LOST CERTIFICATES.......................................... 7
2.9 WITHHOLDING RIGHTS......................................... 8
2.10 FURTHER ASSURANCES......................................... 8
2.11 STOCK TRANSFER BOOKS....................................... 8
ARTICLE III. REPRESENTATIONS AND WARRANTIES....................................8
3.1 REPRESENTATIONS AND WARRANTIES OF SPSS.......................8
(a) Organization, Standing and Power; Subsidiaries......8
(b) Capital Structure...................................9
(c) Authority; No Conflicts............................10
(d) Reports and Financial Statements...................11
(e) Information Supplied...............................12
(f) Board Approval.....................................12
(g) Litigation; Compliance with Laws...................12
(h) Intellectual Property..............................13
(i) Absence of Undisclosed Liabilities.................13
3.2 REPRESENTATIONS AND WARRANTIES OF NETGENESIS................13
(a) Organization, Standing and Power; Subsidiaries.....14
(b) Capital Structure..................................14
(c) Authority; No Conflicts............................15
(d) Reports and Financial Statements...................17
(e) Information Supplied...............................17
(f) Board Approval.....................................18
(g) Vote Required; Voting Agreement....................18
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(h) Litigation; Compliance with Laws...................18
(i) Absence of Undisclosed Liabilities.................19
(j) Absence of Certain Changes or Events...............19
(k) Environmental Matters..............................19
(l) Title to Assets....................................19
(m) Intellectual Property..............................19
(n) Brokers or Finders.................................20
(o) Opinions of NetGenesis Financial Advisor...........20
(p) Taxes..............................................20
(q) Certain Contracts..................................20
(r) Employee Benefit Plans.............................22
(s) Labor Matters......................................22
(t) Related Transactions...............................23
(u) Bank Accounts; Safe Deposit Boxes..................23
3.3 REPRESENTATIONS AND WARRANTIES OF SPSS AND MERGER SUB.......23
(a) Organization, Standing and Power...................23
(b) Capital Structure..................................23
(c) Authority; No Conflicts............................24
(d) No Business Activities.............................24
3.4 DATE OF REPRESENTATIONS.....................................24
ARTICLE IV. COVENANTS RELATING TO CONDUCT OF BUSINESS.........................25
4.1 COVENANTS OF NETGENESIS.....................................25
(a) Ordinary Course....................................25
(b) General Ledger Trial Balance.......................26
(c) Dividends; Changes in Share Capital................26
(d) Issuance of Securities.............................26
(e) Governing Documents................................26
(f) No Acquisitions....................................26
(g) No Dispositions....................................27
(h) Investments; Indebtedness..........................27
(i) Compensation.......................................27
(j) Accounting Methods; Income Tax Election............27
(k) Certain Agreements.................................27
(l) No Related Actions.................................28
(m) Involuntary Terminations...........................28
4.2 GOVERNMENTAL FILINGS........................................28
4.3 CONTROL OF OTHER PARTY'S BUSINESS...........................28
ARTICLE V. ADDITIONAL AGREEMENTS..............................................28
5.1 PREPARATION OF PROXY STATEMENT; SHAREHOLDERS MEETINGS.......28
5.2 ACCESS TO INFORMATION/EMPLOYEES.............................30
5.3 COMMERCIALLY REASONABLE EFFORTS.............................31
5.4 ACQUISITION PROPOSALS.......................................32
5.5 FEES AND EXPENSES...........................................33
5.6 PUBLIC ANNOUNCEMENTS........................................33
5.7 LISTING OF SHARES OF SPSS COMMON STOCK......................33
5.8 SECTION 16 MATTERS..........................................34
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5.9 CONFIDENTIAL INFORMATION....................................34
5.10 EMPLOYEE BENEFITS...........................................34
5.11 INDEMNIFICATION AND LIABILITY INSURANCE.....................34
5.12 REPAYMENT OF INDEBTEDNESS...................................35
ARTICLE VI. CONDITIONS PRECEDENT..............................................35
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER..35
(a) Shareholder Approval...............................35
(b) No Injunctions, Litigation or Restraints,
Illegality.........................................35
(c) Consents and Approvals.............................35
(d) NASDAQ Listing.....................................35
(e) Effectiveness of the Form S-4......................36
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF SPSS AND MERGER SUB.36
(a) Representations and Warranties.....................36
(b) Performance of Obligations of NetGenesis...........36
(c) Closing Certificate................................36
(d) Transfer of Bank Accounts; Safe Deposit Boxes......36
(e) No Material Adverse Change of NetGenesis...........36
(f) Tax Opinion........................................36
6.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF NETGENESIS..........37
(a) Representations and Warranties.....................37
(b) Performance of Obligations of SPSS.................37
(c) Closing Certificate................................37
(d) No Material Adverse Change of SPSS.................37
(e) Tax Opinion........................................37
6.4 FRUSTRATION OF CLOSING CONDITIONS...........................38
ARTICLE VII. TERMINATION AND AMENDMENT........................................38
7.1 TERMINATION.................................................38
7.2 EFFECT OF TERMINATION.......................................39
7.3 AMENDMENT...................................................40
7.4 EXTENSION; WAIVER...........................................40
ARTICLE VIII. GENERAL PROVISIONS..............................................40
8.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS..40
8.2 NOTICES.....................................................40
8.3 INTERPRETATION..............................................42
8.4 COUNTERPARTS................................................42
8.5 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES..............42
8.6 GOVERNING LAW...............................................42
8.7 SEVERABILITY................................................42
8.8 ASSIGNMENT..................................................42
8.9 SUBMISSION TO JURISDICTION; WAIVERS.........................43
8.10 ENFORCEMENT.................................................43
8.11 FURTHER ASSURANCES..........................................43
8.12 DEFINITIONS.................................................43
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THIS AGREEMENT AND PLAN OF MERGER, dated as of October 26, 2001 (the
"Agreement"), is entered into by and among SPSS Inc., a Delaware corporation
("SPSS"), Red Sox Acquisition Corp., a Delaware corporation and a direct
wholly-owned subsidiary of SPSS ("Merger Sub"), and NetGenesis Corp., a Delaware
corporation ("NetGenesis").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of SPSS, Merger Sub and NetGenesis
deem it advisable and in the best interests of each corporation and its
respective stockholders that SPSS and NetGenesis engage in a business
combination in order to advance the long-term strategic business interests of
SPSS and NetGenesis, respectively, which each of the Boards of Directors
anticipates will serve to enhance shareholder value;
WHEREAS, in furtherance of the foregoing, the respective Boards of
Directors of SPSS, Merger Sub and NetGenesis have approved a business
combination by means of a transaction in which NetGenesis will become a direct
wholly-owned subsidiary of SPSS as the result of the merger of Merger Sub with
and into NetGenesis (the "Merger") pursuant to the terms, and subject to the
conditions, set forth in this Agreement;
WHEREAS, this Agreement provides that each share of common stock, par
value $0.001 per share, of NetGenesis (the "NetGenesis Common Stock") issued and
outstanding immediately prior to the Effective Time (as defined herein), other
than shares of NetGenesis Common Stock owned by SPSS, Merger Sub or any direct
or indirect wholly owned subsidiary of SPSS or Merger Sub immediately prior to
the Effective Time, shall be converted into 0.097 shares of common stock, par
value $0.01 per share, of SPSS (the "SPSS Common Stock") as described in greater
detail in Section 1.8 hereof; and
WHEREAS, for Federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Code (as defined in Section 8.12 hereof).
NOW, THEREFORE, in consideration of the foregoing, the respective
representations, warranties, covenants and agreements set forth herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the parties hereto agree
as follows:
ARTICLE I.
THE MERGER; CERTAIN RELATED MATTERS
1.1 THE MERGER. Upon the terms set forth in this Agreement, but subject
to the conditions set forth in this Agreement and in compliance with all
applicable provisions of the Delaware General Corporation Law (the "DGCL"),
Merger Sub shall be merged with and into NetGenesis at the Effective Time.
Following the Merger, the separate corporate existence of Merger Sub shall cease
and NetGenesis shall continue as the surviving corporation (the "Surviving
Corporation").
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1.2 CLOSING. The closing of the Merger (the "Closing") will take place
at 10:00 a.m., local time, on the first Business Day (as defined in Section 8.12
hereof) after the satisfaction or waiver (to the extent permitted by applicable
law) of the conditions (excluding conditions that, by their nature, cannot be
satisfied prior to the Closing) set forth in Article VI hereof at the offices of
▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or on such
other date, and at such other place and time, as may be agreed to in writing by
the parties hereto. The date on which the Closing actually occurs is referred to
herein as the "Closing Date."
1.3 EFFECTIVE TIME. On or prior to the Closing Date, the parties shall
(a) cause a certificate of merger (the "Certificate of Merger") to be filed with
the Delaware Secretary of State in accordance with the relevant provisions of
the DGCL and (b) take or cause to be taken all such further actions as may be
required pursuant to this Agreement or under the DGCL as a condition precedent
to the effectiveness of the Merger. The Merger shall become effective upon such
date and at such time as the Certificate of Merger is accepted for filing by the
Delaware Secretary of State or on any date and/or at any time subsequent to the
date and time of such acceptance as SPSS and NetGenesis may hereafter agree in
writing and as shall be specified in the Certificate of Merger. The date and
time on and at which the Merger becomes effective as provided above is referred
to herein as the "Effective Time."
1.4 EFFECTS OF THE MERGER. At and after the Effective Time, the effects
of the Merger shall be as provided in this Agreement and the applicable
provisions set forth in the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all of the respective
property, rights, privileges, powers and franchises of NetGenesis and Merger Sub
shall be vested in the Surviving Corporation, and all of the respective debts,
liabilities and duties of NetGenesis and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
1.5 CERTIFICATE OF INCORPORATION. The certificate of incorporation of
Merger Sub, as in effect immediately prior to the Effective Time and in the form
attached as Exhibit A hereto, shall be the certificate of incorporation of the
Surviving Corporation until thereafter amended in accordance with the DGCL and
as provided therein; provided, however, that Article FIRST of the Certificate of
Incorporation of the Surviving Corporation shall be amended to read as follows:
"The name of the corporation is "NetGenesis Corp."
1.6 BYLAWS. The bylaws of Merger Sub, as in effect immediately prior to
the Effective Time and in the form attached as Exhibit B hereto, shall be the
bylaws of the Surviving Corporation until thereafter amended in accordance with
the DGCL and as provided therein.
1.7 APPOINTMENT OF DIRECTORS AND OFFICERS. The directors and officers
of Merger Sub holding office immediately prior to the Effective Time shall be
the initial directors and officers of the Surviving Corporation, each to hold
office in accordance with the certificate of incorporation and bylaws of the
Surviving Corporation. On or before the Closing Date, NetGenesis shall deliver
to SPSS a resignation of each of the directors and officers of NetGenesis then
holding office, each of such resignation to be effective as of the Effective
Time.
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1.8 EFFECT ON CAPITAL STOCK.
(a) At the Effective Time, by virtue of the Merger and without any
action being required on the part of the holders thereof, each share of
NetGenesis Common Stock issued and outstanding immediately prior to the
Effective Time (other than shares of NetGenesis Common Stock owned by SPSS,
Merger Sub or any direct of indirect wholly owned subsidiary of SPSS or Merger
Sub immediately prior to the Effective Time, all of which shall be canceled as
provided in Section 1.8(c) hereof), shall be converted into 0.097 (the "Exchange
Ratio") validly issued, fully paid and nonassessable shares of SPSS Common
Stock, provided, however, that SPSS shall pay cash in lieu of issuing fractional
shares as provided in Section 2.4 hereof and, provided further, however, that
SPSS' obligation to issue or cause the issuance of any certificates representing
shares of SPSS Common Stock to be issued in connection with the Merger is
subject to the prior satisfaction of the conditions identified in Article II
hereof. The shares of SPSS Common Stock and cash to which the holders of
NetGenesis Common Stock will become entitled at the Effective Time is referred
to herein as the "Merger Consideration."
(b) As a result of the Merger and without any action being
required on the part of the holders thereof, at the Effective Time, all shares
of NetGenesis Common Stock issued and outstanding immediately prior to the
Effective Time shall cease to be outstanding and shall be canceled and retired
and shall cease to exist, and each holder of a certificate which immediately
prior to the Effective Time represented any such shares of NetGenesis Common
Stock (a "Certificate") shall, except as specifically provided herein or in any
applicable provision of the DGCL, thereafter cease to have any rights with
respect to such shares of NetGenesis Common Stock represented by such
Certificate other than the right to receive (i) that portion of the Merger
Consideration to which the holder thereof shall be entitled pursuant to the
terms of this Agreement and (ii) any additional amounts, if any, to which the
holder of such Certificate may be entitled as of the date on which such
Certificate is surrendered pursuant to Section 2.3 hereof (the amounts set forth
in clauses (i) and (ii) above relating to each Certificate being hereinafter
sometimes referred to collectively as the "Required Exchange Payment").
(c) Each share of NetGenesis Common Stock owned by SPSS, Merger
Sub or any direct of indirect wholly owned subsidiary of SPSS or Merger Sub
immediately prior to the Effective Time shall, by virtue of the Merger, cease to
be outstanding and shall be canceled and retired without any conversion thereof
and no shares of SPSS Common Stock or other consideration shall be delivered in
exchange therefor. Any shares of NetGenesis Common Stock held in the treasury of
NetGenesis immediately prior to the Effective Time shall be cancelled and
retired without any conversion thereof and no shares of SPSS Common Stock or
other consideration shall be delivered in exchange therefor.
(d) Each share of common stock, par value $0.01 per share, of
Merger Sub issued and outstanding immediately prior to the Effective Time shall,
by virtue of the Merger, be converted into one validly issued, fully paid and
nonassessable share of common stock, par value $0.01 per share, of the Surviving
Corporation.
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1.9 NETGENESIS STOCK OPTIONS AND OTHER EQUITY-BASED AWARDS.
(a) At the Effective Time, each option and other right to acquire
shares of NetGenesis Common Stock then outstanding that was granted pursuant to
any of the NetGenesis Stock Option Plans (as defined in Section 3.2(b)) (each
such option, a "NetGenesis Stock Option"), shall cease to represent a right to
acquire shares of NetGenesis Common Stock, and shall be assumed by SPSS. Each
NetGenesis Stock Option so assumed by SPSS under this Agreement will continue to
have, and be subject to, the same terms and conditions set forth in the
applicable NetGenesis Stock Option Plan pursuant to which such NetGenesis Stock
Option was issued and any option agreement between NetGenesis and the optionee
with regard to the NetGenesis Stock Option in effect immediately prior to the
Effective Time (taking into account any changes thereto, including, without
limitation, the full acceleration of vesting of such NetGenesis Stock Options
and the extension of exercise periods in effect as of the date of this
Agreement), except that (i) each NetGenesis Stock Option will be exercisable for
that number of whole shares of SPSS Common Stock determined by multiplying the
number of shares of NetGenesis Common Stock subject to such NetGenesis Stock
Option by the Exchange Ratio, rounded down, if necessary, to the nearest whole
share of SPSS Common Stock, and (ii) the per share exercise price for the shares
of SPSS Common Stock issuable upon exercise of such assumed NetGenesis Stock
Option will be equal to the per share exercise price specified in such
NetGenesis Stock Option divided by the Exchange Ratio (such quotient to be
rounded to the nearest one-hundredth of a cent); provided, however, that in the
case of any NetGenesis Stock Option to which Section 421 of the Code applies by
reason of its qualification under Section 422 of the Code, the option price, the
number of shares subject to such option and the terms and conditions of exercise
of such option shall be determined in a manner consistent with the requirements
of Section 424(a) of the Code. On or prior to the Effective Time, NetGenesis
will take all actions necessary such that all NetGenesis Stock Options
outstanding prior to the Effective Time under the NetGenesis Stock Option Plans
are treated in accordance with the immediately preceding sentences, including,
but not limited to, precluding the holder of each NetGenesis Stock Option from
receiving any cash payments in respect of such NetGenesis Stock Option in
connection with the Merger. After the Effective Time, SPSS or the Surviving
Corporation shall issue to each holder of an outstanding NetGenesis Stock Option
a document evidencing the foregoing assumption of such outstanding NetGenesis
Stock Option. It is the intention of the parties that the NetGenesis Stock
Options assumed by SPSS qualify following the Effective Time as incentive stock
options as defined in Section 422 of the Code to the extent the NetGenesis Stock
Options qualified as incentive stock options immediately prior to the Effective
Time and the provisions of this Section 1.9(a) shall be applied in a manner
consistent with such intent; provided, however, that SPSS makes no
representations that the NetGenesis Stock Options assumed by SPSS will qualify
as incentive stock options.
(b) SPSS shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of SPSS Common Stock for delivery upon
exercise of NetGenesis Stock Options assumed in accordance with this Section
1.9. Promptly, but in no event later than five business days, after the
Effective Time, SPSS shall file a registration statement on Form S-8 (or any
successor or other appropriate forms), with respect to the shares of SPSS Common
Stock subject to such options and shall use commercially reasonable efforts to
maintain the effectiveness of such registration statement or registration
statements (and maintain the current
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status of the prospectus or prospectuses contained therein) for so long as any
of such options remains outstanding.
1.10 OBLIGATIONS UNDER GMBH MERGER AGREEMENT. At the Effective Time,
the right (the "GmbH Acquisition Right") to acquire shares of NetGenesis Common
Stock that was granted pursuant to the Share Purchase and Assignment Agreement,
dated as of October 23, 2000, by and among NetGenesis, ▇▇▇▇ ▇▇▇▇▇▇ and
e-dynamics GmbH (the "GmbH Merger Agreement") shall cease to represent the right
to acquire shares of NetGenesis Common Stock and shall be assumed by SPSS. The
GmbH Acquisition Right so assumed by SPSS under this Agreement will continue to
have, and be subject to, the same terms and conditions set forth in the GmbH
Merger Agreement, except that the GmbH Acquisition Right shall represent the
right to acquire that number of shares of SPSS Common Stock equal to the number
of shares of NetGenesis Common Stock to which the holder of such GmbH
Acquisition Right would otherwise be entitled pursuant to the GmbH Merger
Agreement multiplied by the Exchange Ratio, rounded down, if necessary, to the
nearest whole share of SPSS Common Stock.
1.11 CERTAIN ADJUSTMENTS. If, between the date of this Agreement and
the Effective Time, the outstanding SPSS Common Stock or NetGenesis Common Stock
shall have been changed into a different number of shares or a different class
of securities by reason of any reclassification, recapitalization, stock split,
split-up, combination or exchange of shares or a stock dividend or dividend
payable in any other securities shall be declared with a record date within such
period, or any similar event shall have occurred, the Exchange Ratio shall be
appropriately adjusted to take into account any such change, dividend or event
described above in order to provide the holders of NetGenesis Common Stock with
the same economic effect as contemplated by this Agreement prior to the
occurrence of such change, dividend or event.
1.12 TAX CONSEQUENCES. It is intended by the parties hereto that the
Merger shall constitute a "reorganization" within the meaning of Section 368 of
the Code. Unless this Agreement is otherwise terminated, the parties hereto
adopt this Agreement as a "plan of reorganization" within the meaning of
Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax Regulations.
ARTICLE II.
EXCHANGE OF CERTIFICATES
2.1 EXCHANGE FUND. Prior to the Effective Time, SPSS shall appoint its
current transfer agent to act as exchange agent (the "Exchange Agent") pursuant
to the terms and conditions of an Exchange Agent Agreement to be entered into by
and among the Exchange Agent, SPSS and the Surviving Corporation prior to the
Closing Date (none of the terms of which shall be inconsistent with any term of
this Agreement) for the purpose of exchanging Certificates for the Required
Exchange Payment. Promptly after the Effective Time, SPSS shall deposit (or,
with respect to the cash payable in lieu of the issuance of fractional shares,
make other arrangements satisfactory to the Exchange Agent) with the Exchange
Agent, in trust for the benefit of the holders of Certificates, (a) one or more
certificates representing the shares of SPSS Common Stock to be issued in
connection with the Merger and (b) sufficient cash to make the cash payments
required in lieu of the issuance of fractional shares as provided in Section 2.4
hereof. Any certificate or certificates representing shares of SPSS Common
Stock, together with
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any dividends or distributions with respect thereto, and any cash deposited by
SPSS with the Exchange Agent as provided herein, whether such deposit is made
prior to, on or after the Closing Date, are referred to herein collectively as
the "Exchange Fund."
2.2 EXCHANGE PROCEDURES. Promptly after the Effective Time, the
Surviving Corporation shall cause the Exchange Agent to mail to each holder of a
Certificate (a) a letter of transmittal which shall specify that delivery of the
Certificates shall be effected, and the risk of loss of and title to the
Certificates shall pass, only upon proper delivery of the Certificates to the
Exchange Agent, and which letter shall be in customary form and have such other
provisions as SPSS and the Exchange Agent may reasonably specify and (b)
instructions for effecting the surrender of Certificates in exchange for the
Required Exchange Payment. Upon surrender of a Certificate to the Exchange Agent
together with such letter of transmittal and such other documents as may
reasonably be required by the Exchange Agent, all completed, executed and
delivered in accordance with the instructions, the Exchange Agent shall promptly
deliver to the holder of such Certificate (a) one or more certificates
representing such number of shares of SPSS Common Stock to which the holder of
such Certificate shall be entitled pursuant to the terms of this Agreement
(which shall be in uncertificated book-entry form unless a physical certificate
is requested), (b) a check for the amount of cash, if any, to which the holder
of such Certificate is entitled pursuant to Section 2.4 hereof, and (c) a check
for the amount of cash, if any, or evidence of the ownership of any other
property, if any, to which the holder of such Certificate shall be entitled
pursuant to Section 2.3 hereof. No interest will be paid or will accrue on any
cash payable to the holder of a Certificate pursuant to Article II of this
Agreement. Until so surrendered, each outstanding Certificate that, prior to the
Effective Time, represented shares of NetGenesis Common Stock will be deemed
from and after the Effective Time, for all corporate purposes, other than the
payment of dividends, to evidence the ownership of the number of full shares of
SPSS Common Stock into which such shares of NetGenesis Common Stock shall have
been so converted, together with any dividends or other distributions to which
such holder is entitled pursuant to Section 2.3, and the right to receive an
amount in cash in lieu of the issuance of any fractional shares in accordance
with Section 2.4.
2.3 DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. The holders of
Certificates shall not be entitled to receive any dividend or other distribution
payable with respect to the shares of SPSS Common Stock which such holder is
entitled to receive upon surrender of such Certificate until such Certificate is
actually surrendered by, and the shares of SPSS Common Stock are actually issued
to, such holder. Rather, any dividend or other distribution declared or made
after the date of this Agreement with a record date after the Effective Date
with respect to a share of SPSS Common Stock then held by the Exchange Agent as
part of the Exchange Fund shall be delivered by SPSS to Exchange Agent in trust
for the benefit of holders of Certificates and delivered by the Exchange Agent
concurrently with the shares of SPSS Common Stock to which such dividend or
other distribution relates.
2.4 NO FRACTIONAL SHARES OF SPSS COMMON STOCK.
(a) No fractional shares of SPSS Common Stock shall be issued or
made upon the surrender for exchange of Certificates and no rights relating to
the ownership of SPSS Common Stock shall accrue to any Person (as defined in
Section 8.12 hereof) with respect to such fractional shares of SPSS Common
Stock.
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(b) Notwithstanding any other provision of this Agreement to the
contrary, each holder of shares of NetGenesis Common Stock surrendered to the
Exchange Agent for exchange pursuant to the terms of this Agreement who would
otherwise have been entitled to receive a fraction of a share of SPSS Common
Stock (after taking into account all Certificates delivered by such holder)
shall receive, in lieu thereof, cash (without interest and rounded to the
nearest whole cent) in an amount equal to the product of (i) such fractional
part of a share of SPSS Common Stock multiplied by (ii) a number equal to the
average per share closing price of the SPSS Common Stock for the ten most recent
days that SPSS Common Stock has traded ending on the trading day immediately
prior to the Effective Time, as reported on the Nasdaq National Market.
(c) As promptly as practicable after the determination of the
amount of cash, if any, to be paid to holders of fractional interests, the
Exchange Agent shall so notify SPSS, and SPSS shall cause the Surviving
Corporation to deposit such amount with the Exchange Agent and shall cause the
Exchange Agent to forward payments to such holders of fractional interests
subject to and in accordance with the terms hereof.
2.5 TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
which remains undistributed to the holders of Certificates as of the first
anniversary of the Closing Date shall be delivered by the Exchange Agent to, or
otherwise on the instruction of, SPSS, and any holders of Certificates who have
not theretofore surrendered such Certificates for exchange in accordance with
the terms of this Agreement, the letter of transmittal and any instructions
delivered to such holder with the letter of transmittal shall thereafter look
only to SPSS for payment of that portion of the Merger Consideration and any
dividends or other distributions with respect to SPSS Common Stock to which such
holder is entitled upon surrender of such theretofore unsurrendered
Certificates. Any such portion of the Exchange Fund remaining unclaimed by
holders of Certificates as of the fifth anniversary of the Closing Date (or such
earlier date immediately prior to such time as such amounts would otherwise
escheat to or become the property of any Governmental Entity (as defined in
Section 3.1 (c) (iii)) shall, to the extent permitted by law, become the
property of the Surviving Corporation free and clear of any claims or interest
of any Person previously entitled thereto.
2.6 NO LIABILITY. None of SPSS, Merger Sub, NetGenesis, the Surviving
Corporation or the Exchange Agent shall be liable to any Person in respect of
any Merger Consideration or any portion of the Exchange Fund properly delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar law.
2.7 INVESTMENT OF THE EXCHANGE FUND. The Exchange Agent shall invest
any cash included in the Exchange Fund as directed by SPSS on a daily basis;
provided, however, that no gain or loss resulting from such investment shall
affect the amounts to which the holders of Certificates are entitled upon
surrender thereof pursuant to the terms of this Agreement. SPSS shall be
exclusively entitled to any gain and responsible for any loss resulting from the
investment of any cash included in the Exchange Fund.
2.8 LOST CERTIFICATES. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such Person of a bond in such amount
as the Surviving Corporation may reasonably direct as indemnity against
7
any claim that may be made against it with respect to such Certificate, the
Exchange Agent will deliver in exchange for such lost, stolen or destroyed
Certificate (and compliance with such other reasonable requirements as shall,
from time to time be established by SPSS and the Exchange Agent) that portion of
the Merger Consideration and any dividends or other distribution with respect to
shares of SPSS Common Stock to which the holder of such lost, stolen or
destroyed Certificate is entitled pursuant to the terms of this Agreement.
2.9 WITHHOLDING RIGHTS. Each of the Surviving Corporation and SPSS
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of Certificates such amounts as
it is required to deduct and withhold with respect to the making of such payment
under the Code, or any provision of state, local or foreign tax law. To the
extent that amounts are so withheld by the Surviving Corporation or SPSS, as the
case may be, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Certificate in respect of
which such deduction and withholding was made.
2.10 FURTHER ASSURANCES. NetGenesis agrees that if, at any time after
the Effective Time, SPSS determines or is advised that any further deeds,
assignments or assurances are reasonably necessary or desirable to vest, perfect
or confirm in the Surviving Corporation title to any property or rights of
NetGenesis, then the Surviving Corporation and its proper officers and directors
may execute and deliver all such proper deeds, assignments and assurances and do
all other things necessary or desirable to vest, perfect or confirm title to
such property or rights in the Surviving Corporation and otherwise to carry out
the purposes of this Agreement, in the name of NetGenesis or otherwise, so long
as such action is not inconsistent with this Agreement.
2.11 STOCK TRANSFER BOOKS. The stock transfer books of NetGenesis shall
be closed as of the close of business on the Business Day immediately preceding
the Effective Time and there shall be no further registration of transfers of
shares of NetGenesis Common Stock thereafter on the records of NetGenesis. On or
after the Effective Time, any Certificates presented to the Exchange Agent or
SPSS for any reason shall be converted into the Merger Consideration with
respect to the shares of NetGenesis Common Stock formerly represented thereby
(including any cash in lieu of fractional shares of SPSS Common Stock to which
the holders thereof are entitled pursuant to Section 2.4) and any dividends or
other distributions to which the holders thereof are entitled pursuant to
Section 2.3.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF SPSS. Except as set forth in the
SPSS disclosure schedule delivered by SPSS to NetGenesis in connection with the
execution of this Agreement (the "SPSS Disclosure Schedule") (each section of
which qualifies the correspondingly numbered paragraph of this Section 3.1 or
such other numbered paragraph of this Section 3.1 as is specifically referenced
in the SPSS Disclosure Schedule), SPSS represents and warrants to NetGenesis as
follows:
(a) Organization, Standing and Power; Subsidiaries.
8
(i) Each of SPSS and each of its Subsidiaries (as defined in
Section 8.12 hereof) is duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation
or organization, has the requisite power and authority to own,
lease and operate its properties and to carry on its business as
now being conducted and, except where any failure to be so
qualified and in good standing would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect (as
defined in Section 8.12 hereof) on SPSS, is duly qualified and in
good standing to do business in each jurisdiction in which the
nature of its business or the ownership or leasing of its
properties makes such qualification necessary. The copies of the
certificate of incorporation and bylaws of SPSS which were
previously furnished or made available to NetGenesis are true,
complete and correct copies of such documents as in effect on the
date of this Agreement.
(ii) Exhibit 21.1 to SPSS' Annual Report on Form 10K for the
year ended December 31, 2000 includes all of the Subsidiaries of
SPSS which as of the date of this Agreement are Significant
Subsidiaries (as defined in Rule 1-02 of Regulation S-X
promulgated under the Securities Act (as defined in Section 8.12
hereof)). All the outstanding shares of capital stock of, or other
equity interests in, each such Significant Subsidiary (as defined
in Section 8.12 hereof) have been validly issued and are fully
paid and nonassessable and are owned of record and beneficially,
either directly or indirectly, by SPSS, free and clear of all
pledges, claims, liens, charges, encumbrances and security
interests of any kind or nature whatsoever (collectively "Liens")
and free of any other restriction (including any restriction on
the right to vote, sell or otherwise dispose of such capital stock
or other equity interests), except for restrictions imposed by
applicable securities laws.
(b) Capital Structure.
(i) As of the date hereof, the authorized capital stock of
SPSS consists of 50,000,000 shares of SPSS Common Stock. As of
October 25, 2001, 14,298,387 shares of SPSS Common Stock were
issued and outstanding and no shares of SPSS Common Stock were
held in treasury by SPSS.
(ii) As of September 30, 2001, SPSS has reserved 3,149,445
shares of SPSS Common Stock for issuance upon the exercise of
options granted under SPSS' Third Amended and Restated 1995 Equity
Incentive Plan, 1999 Employee Equity Incentive Plan, and Amended
1991 Stock Option Plan (collectively, the "SPSS Stock Option
Plans"), and has granted options (the "SPSS Stock Options") to
acquire 3,037,930 shares of SPSS Common Stock upon the exercise
thereof.
(iii) As of October 25, 2001, SPSS has not granted any
warrants to acquire shares of SPSS Common Stock upon the exercise
thereof.
(iv) All the outstanding shares of SPSS Common Stock have
been duly authorized, and are validly issued, fully paid and
nonassessable, and such shares
9
of SPSS Common Stock have been issued in compliance with any
preemptive rights which have not been waived prior to the date of
this Agreement. The shares of SPSS Common Stock when issued in
connection with the Merger and the shares of SPSS Common Stock,
when issued and delivered upon exercise of stock options converted
in the Merger pursuant to Section 1.9, will be duly authorized,
validly issued, fully paid and nonassessable, and will be issued
in compliance with any preemptive rights which have not been
waived prior to the date of this Agreement. Except for the options
and warrants identified in Section 3.1(b) of the SPSS Disclosure
Schedule, no options, warrants, subscriptions or purchase rights
of any nature to acquire from SPSS, or commitments of SPSS to
issue, shares of SPSS Common Stock or other securities are
authorized, issued or outstanding, nor is SPSS obligated in any
other manner to issue shares or rights to acquire any of its
capital stock or other securities except as contemplated by this
Agreement. Except as set forth in Section 3.1(b) of the SPSS
Disclosure Schedule, none of SPSS' outstanding securities or
authorized capital stock are subject to any rights of redemption,
repurchase, rights of first refusal, preemptive rights or other
similar rights, whether contractual, statutory or otherwise, for
the benefit of SPSS, any stockholder or any other Person. Except
as set forth in Section 3.1(b) of the SPSS Disclosure Schedule,
there are no restrictions on the transfer of shares of SPSS Common
Stock other than those imposed by relevant federal and state
securities laws. The offer and sale of all SPSS Common Stock and
other securities of SPSS issued before the date of this Agreement
complied with or were exempt from all applicable federal and state
securities laws and no stockholder has a right of rescission or
damages with respect thereto.
(v) No bonds, debentures, notes or other indebtedness of SPSS
having the right to vote on any matters on which holders of
capital stock of SPSS may vote ("SPSS Voting Debt") are issued or
outstanding.
(c) Authority; No Conflicts.
(i) SPSS has all requisite corporate power and authority to
enter into this Agreement and the other documents and agreements
contemplated hereby to be entered into by it (the Agreement,
together with all such other documents and agreements,
collectively, the "SPSS Transaction Documents") and to consummate
the transactions contemplated hereby and thereby. The execution
and delivery of the SPSS Transaction Documents and the
consummation of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the
part of SPSS. The SPSS Transaction Documents have been or will be
duly executed and delivered by SPSS and constitute or will
constitute the valid and binding agreements of SPSS, enforceable
against it in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or
affecting the rights of creditors generally or by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
10
(ii) The execution and delivery by SPSS of the SPSS
Transaction Documents, and the consummation by SPSS of the Merger
and the other transactions contemplated hereby and thereby, will
not: (a) violate or conflict with SPSS' certificate of
incorporation or bylaws; (b) conflict with, or result in the
breach, termination or acceleration of, or constitute a default
under, any lease, mortgage, loan or credit agreement, license,
agreement, commitment or other instrument to which SPSS is a party
or by which it is bound; (c) constitute a violation of any law,
regulation, order, writ, judgment, injunction or decree applicable
to SPSS or any of the properties or assets of SPSS; or (d) result
in the creation of any lien, pledge, security interest, charge or
other encumbrance upon the properties or assets of SPSS.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any national, state,
municipal or local government, any instrumentality, subdivision,
court, administrative agency or commission or other authority
thereof, or any quasi-governmental or private body exercising any
regulatory, taxing, importing or other governmental or
quasi-governmental authority (a "Governmental Entity"), or other
Person, is required in connection with the execution and delivery
by SPSS of the SPSS Transaction Documents or the consummation by
SPSS of the Merger or the performance by SPSS of the other
obligations to be performed by SPSS pursuant to the terms hereof
or thereof, except for those required under or in relation to (A)
state securities or "blue sky" laws (the "Blue Sky Laws"), (B) the
Securities Act (as defined in Section 8.12 hereof), (D) the DGCL
with respect to the filing of the Certificate of Merger, (E) rules
and regulations of NASDAQ, (F) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be
required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (the "HSR Act") and (G) such other consents,
approvals, orders, authorizations, registrations, declarations or
filings when any failure to obtain or make the same, in the
aggregate, would not reasonably be expected to have a Material
Adverse Effect on SPSS or to adversely affect the ability of the
parties to consummate the Merger. Each such consent, approval,
order, authorization, registration, declaration and filing
identified in clauses (A) through (G) above shall be made or
obtained within the period required.
(d) Reports and Financial Statements. SPSS has filed all required
registration statements, prospectuses, reports, schedules, forms, statements and
other documents required to be filed by it with the SEC during the period from
January 1, 1998 to the date of this Agreement (collectively, including all
exhibits thereto, the "SPSS SEC Reports"). No Subsidiary of SPSS is required to
file any form, report, registration statement, prospectus or other document with
the SEC. None of the SPSS SEC Reports, as of their respective dates (and, if
amended or superseded by a later-dated document filed by SPSS with the SEC, then
on the date of such filing), contained or will contain any untrue statement of a
material fact or omitted or will omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of the financial
statements included in the SPSS SEC Reports (other than any of such financial
statements which were identified as having been prepared on a "pro forma" or "as
adjusted" basis) presents fairly, in all
11
material respects, the consolidated financial position and consolidated results
of operations and cash flows of SPSS and its consolidated Subsidiaries as of the
respective dates of and for the respective periods covered by each of such
financial statements. Except as otherwise noted therein and, subject, in the
case of unaudited interim financial statements, to the absence of notes and
normal year-end adjustments, all of the financial statements (other than any
such financial statements which were identified as having been prepared on a
"pro forma" or "as adjusted" basis) included in the SPSS SEC Reports were
prepared in conformity with the United States Generally Accepted Accounting
Principles ("GAAP") consistently applied, except as otherwise noted therein,
during the periods covered. Each such SPSS SEC Report, as of its respective date
(and as of the date of any subsequent amendment to any previously filed SPSS SEC
Report), complied in all material respects with the applicable requirements of
the Securities Act and the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such SPSS SEC Report.
(e) Information Supplied.
(i) None of the information supplied or to be supplied by
SPSS for inclusion or incorporation by reference in the Form S-4
(as defined in Section 5.1) will, at the time the Form S-4 is
filed with the SEC, at any time the Form S-4 is amended or
supplemented, at the time the Form S-4 becomes effective under the
Securities Act and the Exchange Act or on the date it is first
mailed to the holders of NetGenesis Common Stock, contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
will be made, not misleading.
(ii) Notwithstanding the foregoing provisions of this Section
3.1 (e), no representation or warranty is made by SPSS with
respect to information supplied or to be supplied by NetGenesis
for inclusion or incorporation by reference in the Form S-4 nor
with respect to any statements made or incorporated by reference
in the Form S-4 based in whole or in part upon such information.
(f) Board Approval. The Board of Directors (as defined in Section
8.12 hereof) of SPSS, by resolutions duly adopted at a meeting duly called and
held and not subsequently rescinded or modified in any way (the "SPSS Board
Approval"), has duly (i) determined that this Agreement and the Merger are
advisable and are fair to and in the best interests of SPSS and its stockholders
and (ii) approved the Merger and the execution and delivery of the SPSS
Transaction Documents in the name and on behalf of SPSS and has authorized the
performance by SPSS of all of SPSS' obligations pursuant to the SPSS Transaction
Documents and the transactions contemplated hereby and thereby.
(g) Litigation; Compliance with Laws.
(i) Except as disclosed in the SPSS SEC Reports, there are no
suits, actions or proceedings (collectively "Actions") pending or,
to the knowledge of SPSS, threatened, against or affecting SPSS or
any Subsidiary of SPSS which, in the aggregate, would reasonably
be expected to have a Material Adverse Effect on
12
SPSS, nor are there any judgments, decrees, injunctions, rules or
orders of any Governmental Entity or arbitrator outstanding
against SPSS or any Subsidiary of SPSS which would, in the
aggregate, reasonably be expected to have a Material Adverse
Effect on SPSS. There is no Action pending, or to the knowledge of
SPSS, threatened against or affecting SPSS or any Subsidiary of
SPSS which questions the validity of this Agreement or any action
taken or to be taken by SPSS in connection with any of the
transactions contemplated by this Agreement.
(ii) Except as disclosed in the SPSS SEC Reports and except
as, in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on SPSS, SPSS and its Subsidiaries hold
all permits, licenses, variances, exemptions, orders and approvals
of all Governmental Entities which are necessary for the operation
of the businesses of SPSS and its Subsidiaries, taken as a whole
(the "SPSS Permits"). Except where the failures to so comply would
not, in the aggregate, reasonably be expected to have a Material
Adverse Effect on SPSS, SPSS is in compliance with the terms of
the SPSS Permits. Except for violations which would not, in the
aggregate, reasonably be expected to have a Material Adverse
Effect on SPSS, neither SPSS nor any of its Subsidiaries is in
violation of, and SPSS and its Subsidiaries have not received any
notices of violations with respect to, any laws, ordinances or
regulations of any Governmental Entity.
(h) Intellectual Property. (i) SPSS owns or has the right to use
all Intellectual Property used in or necessary for the conduct of its business
as currently conducted; (ii) the use of any Intellectual Property by SPSS does
not infringe on or otherwise violate the rights of any Person and is in material
compliance with any applicable license or other agreement pursuant to which SPSS
acquired the right to use any Intellectual Property; (iii) to the knowledge of
SPSS, no Person is challenging, infringing on or otherwise violating any right
of SPSS with respect to any Intellectual Property owned by and/or licensed to
SPSS; and (iv) SPSS has not received any written notice or otherwise has
knowledge of any pending claim, order or proceeding with respect to any
Intellectual Property used by SPSS and, to the knowledge of SPSS, no
Intellectual Property owned and/or licensed by SPSS is being used or enforced in
a manner that would reasonably be expected to result in the abandonment,
cancellation or unenforceability of such Intellectual Property.
(i) Absence of Undisclosed Liabilities. Since June 30, 2001, SPSS
has not incurred any material liabilities that are of a nature that would be
required to be disclosed on a balance sheet of SPSS or the footnotes thereto
prepared in conformity with GAAP, other than (A) liabilities incurred in the
ordinary course of business, or (B) liabilities that, in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on SPSS.
3.2 REPRESENTATIONS AND WARRANTIES OF NETGENESIS. Except as set forth
in the NetGenesis Disclosure Schedule delivered by NetGenesis to SPSS in
connection with the execution of this Agreement (the "NetGenesis Disclosure
Schedule") (each section of which qualifies the correspondingly numbered
paragraph of this Section 3.2 or such other numbered paragraph of this Section
3.2 as is specifically referenced in the NetGenesis Disclosure Schedule),
NetGenesis represents and warrants to SPSS as follows:
13
(a) Organization, Standing and Power; Subsidiaries.
(i) Except for the Subsidiaries identified in Section 3.2(a)
of the NetGenesis Disclosure Schedule (NetGenesis together with
the Subsidiaries identified in the NetGenesis Disclosure Schedule
being hereinafter referred to collectively as the "NetGenesis
Entities"), NetGenesis does not directly or indirectly own or
control, any equity or other ownership interest in any person.
Each of the NetGenesis Entities is duly organized, validly
existing and in good standing under the laws of its jurisdiction
of incorporation or organization, has the requisite power and
authority to own, lease and operate its properties and to carry on
its business as now being conducted and, except where any failure
to be so qualified and in good standing, would not, in the
aggregate, reasonably be expected to have a Material Adverse
Effect on NetGenesis, is duly qualified and in good standing to do
business in each jurisdiction in which the nature of its business
or the ownership or leasing of its properties makes such
qualification necessary. The copies of the certificate of
incorporation and bylaws of each of the NetGenesis Entities which
were previously furnished or made available to SPSS are true,
complete and correct copies of such documents as in effect on the
date of this Agreement.
(ii) All the outstanding shares of capital stock of, or other
equity interests in, each NetGenesis Entity other than NetGenesis
have been validly issued and are fully paid and nonassessable and
are owned of record and beneficially, either directly or
indirectly, by NetGenesis, free and clear of all Liens and free of
any other restriction (including any restriction on the right to
vote, sell or otherwise dispose of such capital stock or other
equity interests), except for restrictions imposed by applicable
securities laws.
(b) Capital Structure.
(i) As of the date hereof, the authorized capital stock of
NetGenesis consists of 105,000,000 shares, consisting of (A)
100,000,000 shares of NetGenesis Common Stock and (B) 5,000,000
shares of preferred stock, par value $.001 per share ("NetGenesis
Preferred Stock"). As of October 25, 2001, 23,596,254 shares of
NetGenesis Common Stock were issued and outstanding, no shares of
NetGenesis Common Stock were held in treasury by NetGenesis, and
no shares of NetGenesis Preferred Stock were issued or outstanding
or were held in treasury by NetGenesis.
(ii) As of the date hereof, NetGenesis has reserved 7,375,000
shares of NetGenesis Common Stock for issuance upon the exercise
of options granted under the NetGenesis 1995 Incentive Stock
Option Plan, the NetGenesis 1999 Stock Incentive Plan and the
NetGenesis 2001 Nonqualified Stock Option Plan (collectively, the
"NetGenesis Stock Option Plans") and has granted options to
acquire 3,533,357 shares of NetGenesis Common Stock upon the
exercise thereof. Section 3.2(b) of the NetGenesis Disclosure
Schedule sets forth a list of each option outstanding as of
October 25, 2001 and identifies the number of shares of
14
SPSS Common Stock subject to issuance upon the exercise thereof as
well as the exercise price or prices associated with such option.
(iii) All the outstanding shares of NetGenesis Common Stock
have been duly authorized, and are validly issued, fully paid and
nonassessable, and such shares of NetGenesis Common Stock have
been issued in compliance with any preemptive rights which have
not been waived prior to the date of this Agreement. Except for
the options and warrants identified in Section 3.2(b) of the
NetGenesis Disclosure Schedule, no options, warrants,
subscriptions or purchase rights of any nature to acquire from
NetGenesis, or commitments of NetGenesis to issue, shares of
NetGenesis Common Stock or other securities are authorized, issued
or outstanding, nor is NetGenesis obligated in any other manner to
issue shares or rights to acquire any of its capital stock or
other securities except as contemplated by this Agreement. Except
as set forth in Section 3.2(b) of the NetGenesis Disclosure
Schedule, none of NetGenesis' outstanding securities or authorized
capital stock are subject to any rights of redemption, repurchase,
rights of first refusal, preemptive rights or other similar
rights, whether contractual, statutory or otherwise, for the
benefit of NetGenesis, any stockholder or any other Person. Except
as set forth in Section 3.2(b) of the NetGenesis Disclosure
Schedule, there are no restrictions on the transfer of shares of
NetGenesis Common Stock other than those imposed by relevant
federal and state securities laws. The offer and sale of all
NetGenesis Common Stock and other securities of NetGenesis issued
before the date of this Agreement complied with or were exempt
from all applicable federal and state securities laws and no
stockholder has a right of rescission or damages with respect
thereto.
(iv) The authorized capital stock of each of NetGenesis'
Subsidiaries is disclosed in Section 3.2(b) of the NetGenesis
Disclosure Schedule. All shares of capital stock of each of
NetGenesis' Subsidiaries have been validly issued, fully paid, are
nonassessable and were issued in compliance with applicable
federal and state securities laws, and, except as disclosed in
Section 3.2(b) of the NetGenesis Disclosure Schedule, are
wholly-owned by NetGenesis free and clear of any pre-emptive
rights, claims, security interests, encumbrances or restrictions
of any kind. There are no outstanding subscriptions, options,
rights, warrants, convertible securities or other agreements or
commitments obligating any Subsidiary of NetGenesis to issue or to
transfer from treasury any additional shares of capital stock or
any securities convertible into or which grant the holder the
right to acquire any capital stock of any Subsidiary of
NetGenesis.
(v) No bonds, debentures, notes or other indebtedness of
NetGenesis having the right to vote on any matters on which
holders of capital stock of NetGenesis may vote ("NetGenesis
Voting Debt") are issued or outstanding.
(c) Authority; No Conflicts.
(i) NetGenesis has all requisite corporate power and
authority to enter into this Agreement and the other documents and
agreements contemplated
15
hereby to be entered into by it (the Agreement, together with all
such other documents and agreements, collectively, the "NetGenesis
Transaction Documents") and to consummate the transactions
contemplated hereby and thereby, subject in the case of the
consummation of the Merger to the adoption of this Agreement by
the Required NetGenesis Vote (as defined in Section 3.2(g)
hereof). The execution and delivery of the NetGenesis Transaction
Documents and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by all necessary
corporate action on the part of NetGenesis, subject in the case of
the consummation of the Merger to the adoption of this Agreement
by the Required NetGenesis Vote (as defined in Section 3.2(g)
hereof). The NetGenesis Transaction Documents have been or will be
duly executed and delivered by NetGenesis and constitute or will
constitute the valid and binding agreements of NetGenesis,
enforceable against it in accordance with their terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or
affecting the rights of creditors generally or by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(ii) Except as set forth in Section 3.2(c) of the NetGenesis
Disclosure Schedules, the execution and delivery of the NetGenesis
Transaction Documents by NetGenesis and the consummation by
NetGenesis of the Merger and the other transactions contemplated
hereby and thereby, will not (a) violate or conflict with
NetGenesis' certificate of incorporation or bylaws; (b) conflict
with, or result in the breach, termination or acceleration of, or
constitute a default under, any lease, mortgage, loan or credit
agreement, license, agreement, commitment or other instrument to
which NetGenesis is a party or by which it is bound; (c)
constitute a violation of any law, regulation, order, writ,
judgment, injunction or decree applicable to NetGenesis or any of
the properties or assets of NetGenesis; or (d) result in the
creation of any lien, pledge, security interest, charge or other
encumbrance upon the properties or assets of NetGenesis.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity
or other Person, except for the Required NetGenesis Vote, is
required in connection with the execution and delivery by
NetGenesis of the NetGenesis Transaction Documents or the
consummation by NetGenesis of the Merger or the performance by
NetGenesis of the other obligations to be performed by NetGenesis
pursuant to the terms hereof or thereof, except for those required
under or in relation to (A) state securities or "blue sky" laws
(the "Blue Sky Laws"), (B) the Securities Act and the Exchange Act
(each as defined in Section 8.12 hereof), (D) the DGCL with
respect to the filing of the Certificate of Merger, (E) rules and
regulations of NASDAQ, (F) the Required NetGenesis Vote, (G) such
consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under the HSR Act, and
(H) such other consents, approvals, orders, authorizations,
registrations, declarations or filings when any failure to obtain
or make the same, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on NetGenesis or to
adversely affect the ability of the parties to consummate the
16
Merger. Each such consent, approval, order, authorization,
registration, declaration and filing identified in clauses (A)
through (H) above shall be made or obtained within the period
required.
(d) Reports and Financial Statements. Except as set forth in
Section 3.2(d) of the NetGenesis Disclosure Schedule, NetGenesis has filed all
required registration statements, prospectuses, reports, schedules, forms,
statements and other documents required to be filed by it with the SEC during
the period from March 31, 2000 to the date of this Agreement (collectively,
including all exhibits thereto, the "NetGenesis SEC Reports"). No Subsidiary of
NetGenesis is required to file any form, report, registration statement or
prospectus or other document with the SEC. None of the NetGenesis SEC Reports,
as of their respective dates (and, if amended or superseded by a later-dated
document filed by NetGenesis with the SEC, then on the date of such filing),
contained or will contain any untrue statement of a material fact or omitted or
will omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Each of the financial statements included in the
NetGenesis SEC Reports (other than any of such financial statements which were
identified as having been prepared on a "pro forma" or "as adjusted" basis)
presents fairly, in all material respects, the consolidated financial position
and consolidated results of operations and cash flows of NetGenesis and its
consolidated Subsidiaries as of the respective dates of and for the respective
periods covered by each of such financial statements. Except as otherwise noted
therein and, subject, in the case of the unaudited interim financial statements,
to the absence of notes and normal year-end adjustments, all of the financial
statements (other than any such financial statements which were identified as
having been prepared on a "pro forma" or "as adjusted" basis) included in the
NetGenesis SEC Reports were prepared in conformity with GAAP consistently
applied, except as otherwise noted therein, during the periods covered. Each
such NetGenesis SEC Report, as of its respective date (and as of the date of any
subsequent amendment to any previously filed NetGenesis SEC Report), complied in
all material respects with the applicable requirements of the Securities Act and
the Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such NetGenesis SEC Report.
(e) Information Supplied.
(i) None of the information supplied or to be supplied by
NetGenesis for inclusion or incorporation by reference in the Form
S-4 will, at the time the Form S-4 is filed with the SEC, at any
time the Form S-4 is amended or supplemented, at the time the Form
S-4 becomes effective under the Securities Act and the Exchange
Act or on the date it is first mailed to the holders of NetGenesis
Common Stock, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they will be made, not misleading.
(ii) Notwithstanding the foregoing provisions of this Section
3.2 (e), no representation or warranty is made by NetGenesis with
respect to information supplied or to be supplied by NetGenesis
for inclusion or incorporation by reference in the Form S-4 nor
with respect to any statements made or incorporated by reference
in the Form S-4 based in whole or in part upon such information.
17
(f) Board Approval. The Board of Directors of NetGenesis, by
resolutions duly adopted by unanimous vote of those voting at a meeting duly
called and held and not subsequently rescinded or modified in any way (the
"NetGenesis Board Approval"), has duly (i) determined that this Agreement and
the Merger are advisable and are fair to and in the best interests of NetGenesis
and its stockholders, (ii) approved the Merger and the execution and delivery of
the NetGenesis Transaction Documents in the name and on behalf of NetGenesis and
has authorized the performance by NetGenesis of all of NetGenesis' obligations
pursuant to the NetGenesis Transaction Documents and the transactions
contemplated hereby and thereby and (iii) recommended (the "NetGenesis
Recommendation") that the stockholders of NetGenesis approve this Agreement and
approve the Merger and directed that this Agreement and the transactions
contemplated hereby be submitted for consideration by NetGenesis' stockholders
at the NetGenesis Stockholder Meeting (as defined in Section 5.1(b) hereof).
(g) Vote Required; Voting Agreement. The affirmative vote of the
holders of a majority of the outstanding shares of NetGenesis Common Stock to
adopt this Agreement and approve the Merger (the "Required NetGenesis Vote") is
the only vote of the holders of any class or series of NetGenesis capital stock
necessary to adopt this Agreement and approve the Merger and the other
transactions contemplated hereby. The holders of NetGenesis Common Stock listed
on Section 3.2(g) of the NetGenesis Disclosure Schedule have executed a voting
agreement in the form attached hereto as Exhibit C (the "Voting Agreement").
(h) Litigation; Compliance with Laws.
(i) Except as disclosed in the NetGenesis SEC Reports or in
Section 3.2(h) of the NetGenesis Disclosure Schedules, there are
no Actions pending or, to the knowledge of NetGenesis, threatened,
against or affecting any NetGenesis Entity which would, in the
aggregate, reasonably be expected to have a Material Adverse
Effect on NetGenesis, nor are there any judgments, decrees,
injunctions, rules or orders of any Governmental Entity or
arbitrator outstanding against any NetGenesis Entity which would,
in the aggregate, reasonably be expected to have a Material
Adverse Effect on NetGenesis. There is no Action pending or, to
the knowledge of NetGenesis, threatened against or affecting any
of the NetGenesis Entities which questions the validity of this
Agreement or any action taken or to be taken by NetGenesis in
connection with any of the transactions contemplated by this
Agreement, and neither NetGenesis nor its officers or directors
has any knowledge of a fact or circumstance which could reasonably
be expected to give rise to such an Action or threatened Action.
(ii) Except as would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect on NetGenesis, the
NetGenesis Entities hold all permits, licenses, variances,
exemptions, orders and approvals of all Governmental Entities
necessary for the operation of the businesses of the NetGenesis
Entities, taken as a whole (the "NetGenesis Permits"). Except
where the failures to so comply would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect on
NetGenesis, the NetGenesis Entities are in compliance with the
terms of the NetGenesis Permits. None of the NetGenesis Entities
is in violation of, and the NetGenesis Entities have not received
any notices of violations with respect to, any laws, ordinances or
regulations of any
18
Governmental Entity, except for violations which, in the
aggregate, would not reasonably be expected to have a Material
Adverse Effect on NetGenesis.
(i) Absence of Undisclosed Liabilities. Since June 30, 2001, the
NetGenesis Entities have not incurred any material liabilities that are of a
nature that would be required to be disclosed on a balance sheet of the
NetGenesis Entities or the footnotes thereto prepared in conformity with GAAP,
other than (A) liabilities incurred in the ordinary course of business, or (B)
liabilities that, in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on NetGenesis.
(j) Absence of Certain Changes or Events. Except (A) for
liabilities incurred in connection with this Agreement or the transactions
contemplated hereby and (B) as permitted by Section 4.2 hereof, since June 30,
2001 (i) the NetGenesis Entities have conducted their business only in the
ordinary course and (ii) there has not been any action taken by the NetGenesis
Entities that, if taken during the period from the date of this Agreement
through the Effective Time, would constitute a breach of Section 4.2 hereof.
Since June 30, 2001, there have not been any changes, circumstances or events
which, in the aggregate, have had, or would reasonably be expected to have, a
Material Adverse Effect on NetGenesis.
(k) Environmental Matters. Except as would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect on NetGenesis, the
operations of the NetGenesis Entities have been and are in compliance with all
applicable Environmental Laws (as defined in Section 8.12 hereof).
(l) Title to Assets. Except as set forth in Section 3.2(l) of the
NetGenesis Disclosure Schedules, each of the NetGenesis Entities has good and
valid title to, or in the case of leased properties and assets, valid leasehold
interests in, all of its assets, tangible and intangible, free of any Liens.
Section 3.2(l) of the NetGenesis Disclosure Schedule identifies each lease of
real property to which any of the NetGenesis Entities is a party. Each of the
NetGenesis Entities is in compliance with each applicable lease and holds a
valid leasehold interest free of any Liens, except as would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect on
NetGenesis.
(m) Intellectual Property. Set forth on Section 3.2(m) of the
NetGenesis Disclosure Schedule is a list of all U.S. or foreign patent and
patent applications, trademark applications and registrations, and copyright
registrations and applications owned by NetGenesis, specifying as to each, as
applicable, the applicable jurisdiction, registration number (or application
number) and date issued (or date filed). Set forth on Section 3.2(m) of the
NetGenesis Disclosure Schedule is a list of: (a) material licenses, sublicenses
and other agreements under which any of the NetGenesis Entities have obtained
the right to use Intellectual Property, or under which any of the NetGenesis
Entities have authorized any Person to use Intellectual Property owned by
NetGenesis, and (b) any encumbrances or restrictions on the NetGenesis Entities'
right to use Intellectual Property owned by NetGenesis. Except as, in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
NetGenesis, and as specifically set forth on Section 3.2(m) of the NetGenesis
Disclosure Schedule, (i) each of the NetGenesis Entities owns or has the right
to use all Intellectual Property used in or necessary for the conduct of its
business as currently conducted; (ii) the use of any Intellectual Property by
the NetGenesis Entities does not infringe on or otherwise violate the rights of
any Person and is
19
in material compliance with any applicable license or other agreement pursuant
to which any of the NetGenesis Entities acquired the right to use any
Intellectual Property; (iii) to the knowledge of NetGenesis, no Person is
challenging, infringing on or otherwise violating any right of any of the
NetGenesis Entities with respect to any Intellectual Property owned by and/or
licensed to any of the NetGenesis Entities; and (iv) none of the NetGenesis
Entities have received any written notice or otherwise has knowledge of any
pending claim, order or proceeding with respect to any Intellectual Property
used by any of the NetGenesis Entities and, to the knowledge of NetGenesis, no
Intellectual Property owned and/or licensed by any of the NetGenesis Entities is
being used or enforced in a manner that would reasonably be expected to result
in the abandonment, cancellation or unenforceability of such Intellectual
Property. Substantially all of NetGenesis' United States employees have executed
an Employee Confidentiality, NonCompetition and Intellectual Property Assignment
Agreement in the form provided to SPSS or an Employee Agreement, NonDisclosure
Agreement and NonCompete Agreement in the form provided to SPSS.
(n) Brokers or Finders. Except as set forth on Section 3.2(n) of
the NetGenesis Disclosure Schedule, no agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement, based upon arrangements made by
or on behalf of NetGenesis.
(o) Opinions of NetGenesis Financial Advisor. NetGenesis has
received the opinion of ▇.▇. ▇▇▇▇▇▇ Securities Inc., dated on or about the date
of this Agreement, to the effect that, as of such date, the Exchange Ratio is
fair, from a financial point of view, to the holders of NetGenesis Common Stock.
(p) Taxes. Each of the NetGenesis Entities has accurately filed
all tax returns required to have been filed (or extensions have been duly
obtained) and has paid all taxes required to have been paid by it, except where
failure to accurately file such tax returns or pay such taxes would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect on
NetGenesis. Except as is not material to NetGenesis, NetGenesis' financial
statements as of the Effective Time reflect adequate reserves for taxes.
(q) Certain Contracts.
(i) Section 3.1(q) of the NetGenesis Disclosure Schedule
identifies each contract, commitment or agreement, whether oral or
written:
(A) with a supplier of any NetGenesis Entity pursuant to
which such NetGenesis Entity has a remaining commitment to
such supplier in an amount in excess of $25,000;
(B) relating to the provision of professional services
not yet completed by any NetGenesis Entity pursuant to which
such NetGenesis Entity expects to receive revenue in an
amount in excess of $25,000;
(C) which constitutes a software maintenance support
contract pursuant to which any NetGenesis Entity expects to
receive an amount in
20
excess of $25,000 during the current term thereof and which
(1) requires a NetGenesis Entity to respond on-site if a
problem is not remedied within a specified period of time,
(2) requires a NetGenesis Entity to provide a dedicated
resource, (3) requires coverage by a NetGenesis Entity for
more than eight (8) hours per day for five (5) days per
calendar week, (4) specifies a "fix time" rather than a
"response time", or (5) requires a faster response time than
the response time provided in the ordinary course of
business;
(D) which contains an unexpired warranty obligation of
any NetGenesis Entity extending for longer than ninety (90)
days;
(E) which provides for any other payment by or payment
to any of the NetGenesis Entities of an amount in excess of
$100,000 and pursuant to which any of the NetGenesis Entities
has any ongoing material rights or obligations other than the
obligation to provide maintenance/support services; or
(F) which was entered into by any NetGenesis Entity
outside the ordinary course of business and pursuant to which
any NetGenesis Entity has ongoing material rights or
obligations.
Collectively, the contracts identified on Schedule 3.2(q) are
hereinafter referred to as the "Contracts." Each such Contract is
a valid and binding obligation of the applicable NetGenesis
Entity, enforceable in accordance with its respective terms to the
extent permitted by applicable law, and is in full force and
effect; and each NetGenesis Entity is in compliance therewith. To
the knowledge of NetGenesis, none of the Contracts relating to
payments to any of the NetGenesis Entities for the provision of
services to its customers provides for either a daily rate or an
imputed rate (if such Contract is a fixed-rate contract) which is
less than the average salary of the NetGenesis Entity employee
providing such products or services. No allegation or notice of
default has been received by any of the NetGenesis Entities with
respect to any of the Contracts, and to NetGenesis' knowledge, no
other party to any of the Contracts is in default or breach
thereof in any material respect. None of the NetGenesis Entities
is in material default and there is no basis for any valid claim
of material default, in any respect under any of the Contracts.
(ii) As of the date hereof, none of the NetGenesis Entities
is a party to or bound by any noncompetition agreements or any
other agreements or arrangements that limit or otherwise restrict
any of the NetGenesis Entities or any of their respective
affiliates or any successor thereto or that would, after the
Closing Date, to the knowledge of NetGenesis, limit or restrict
SPSS or any of its affiliates (including the Surviving
Corporation) or any successor thereto, from engaging or competing
in any line of business or in any geographic area, which
agreements or arrangements, in the aggregate, would reasonably be
expected to have a Material Adverse Effect on SPSS and its
Subsidiaries (including the
21
Surviving Corporation and its Subsidiaries), taken together,
after giving effect to the Merger.
(r) Employee Benefit Plans. Except as set forth in Section 3.2(r)
of the NetGenesis Disclosure Schedule, there are no Benefit Plans maintained by
NetGenesis covering only NetGenesis executive officers. NetGenesis does not
sponsor or contribute to, nor has it ever sponsored or contributed to, any
defined benefit pension plan subject to Title I of ERISA. NetGenesis does not
sponsor any Benefit Plan which is a "welfare plan" described in Section 3(1) of
ERISA providing benefits after termination of employment (other than "COBRA"
health care continuation benefits described in Sections 601 et seq. of ERISA),
except for such benefits which would not reasonably be expected to have a
Material Adverse Effect on NetGenesis. Each Benefit Plan maintained by
NetGenesis has been operated and administered in accordance with its terms and
applicable law, except where failure to do so would not reasonably be expected
to have a Material Adverse Effect on NetGenesis. NetGenesis has timely paid all
required contributions to each of its Benefit Plans, except where failure to do
so would not reasonably be expected to have a Material Adverse Effect on
NetGenesis. As to the NetGenesis Benefit Plans, there is no litigation pending
or threatened, nor any pending investigation by a governmental body, which, if
resolved adversely to NetGenesis or to the applicable Benefit Plan, would have a
Material Adverse Effect on NetGenesis. The execution of this Agreement and the
consummation of the Merger will not constitute an event under any Benefit Plan
maintained by NetGenesis that will or may result in any payment, acceleration,
forgiveness of indebtedness, vesting, distribution, increase in compensation or
benefits or obligation to fund benefits with respect to any NetGenesis Employee
which, in the aggregate, have had, or would reasonably be expected to have, a
Material Adverse Effect on NetGenesis.
(s) Labor Matters.
(i) Section 3.2(s) of the NetGenesis Disclosure Schedule
identifies all written employment contracts and all written
pension, bonus, profit sharing, stock option, life, health,
retirement welfare, or other agreements or arrangements providing
for employee remuneration or benefits to which any of the
NetGenesis Entities are a party or by which they are bound, and
all these contracts and arrangements are in full force and effect.
There have been no claims of defaults and there are no facts or
conditions which if continued, or with the giving of notice, will
result in a default under these contracts or arrangements.
(ii) Except where failure to comply would not reasonably be
expected to have a Material Adverse Effect on NetGenesis,
NetGenesis is and has been in compliance with all applicable laws
of the United States, or of any state or local government or any
subdivision thereof or of any foreign government respecting
employment and employment practices, terms and conditions of
employment and wages and hours, including, without limitation,
ERISA, the Code, the Immigration Reform and Control Act, the WARN
Act, any laws respecting employment discrimination, sexual
harassment, disability rights or benefits, equal opportunity,
plant closure issues, affirmative action, workers' compensation,
employee benefits, severance payments, COBRA, labor relations,
employee leave issues, wage and hour standards, occupational
safety and health requirements and
22
unemployment insurance and related matters, and is not engaged in
any unfair labor practices. There are no violations or alleged
violations of any of the foregoing laws which would have a
Material Adverse Effect on NetGenesis.
(t) Related Transactions. Except as set forth on Section 3.2(t) of
the NetGenesis Disclosure Schedule, none of the NetGenesis Entities has made or
entered into any loan, contract, lease or commitment, whether oral or written,
with any officer, director, employee, shareholder or partner of any of the
NetGenesis Entities, or with any affiliate or associate of any of the foregoing,
under which the NetGenesis Entities have continuing obligations.
(u) Bank Accounts; Safe Deposit Boxes. Section 3.2(u) of the
NetGenesis Disclosure Schedule sets forth the names and locations of all banks
in which any of the NetGenesis Entities have an account or safe deposit box and
the names of all persons authorized to draw thereon or to have access thereto.
3.3 REPRESENTATIONS AND WARRANTIES OF SPSS AND MERGER SUB. SPSS and
Merger Sub represent and warrant to NetGenesis as follows:
(a) Organization, Standing and Power. Merger Sub is duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the requisite power and authority to own its assets and to
have performed such activities as it has performed during the period from the
date of its incorporation to the date of this Agreement. Other than in such
jurisdictions where the failure to so qualify would not reasonably be expected
to have a Material Adverse Effect on Merger Sub or upon the ability of Merger
Sub to perform the obligations to be performed by it pursuant to the terms of
this Agreement, neither the ownership of its assets nor the nature of the
activities heretofore performed by Merger Sub will cause Merger Sub to fail to
qualify as a foreign corporation in any jurisdiction. Merger Sub is a direct
wholly-owned subsidiary of SPSS and does not directly or indirectly own any
capital stock of or other equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for any capital stock of or
other equity or similar interest in, any corporation, partnership, joint venture
or other business association or entity. The copies of the certificate of
incorporation and bylaws of Merger Sub which were previously furnished or made
available to NetGenesis are true, complete and correct copies of such documents
as in effect on the date of this Agreement.
(b) Capital Structure.
(i) As of the date hereof, the authorized capital stock of
Merger Sub consists of 1000 shares of common stock, $0.01 par
value per share, of which 1000 shares are issued and outstanding
and no shares are held in treasury by Merger Sub.
(ii) All of the outstanding shares of Merger Sub common stock
have been duly authorized, and are validly issued, fully paid and
nonassessable, and are not subject to any preemptive rights.
(iii) Except as contemplated in this Agreement, as of the
date of this Agreement there are, and as of the Closing Date there
will be, no securities,
23
options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which Merger Sub is a
party or by which it is bound obligating Merger Sub to issue,
deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other voting securities of
Merger Sub or obligating Merger Sub to issue, grant or extend or
enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking.
(c) Authority; No Conflicts.
(i) Merger Sub has all requisite corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Merger Sub and its sole
stockholder. This Agreement has been duly executed and delivered
by Merger Sub and constitutes a valid and binding agreement of
Merger Sub, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws relating
to or effecting the rights of creditors generally or by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(ii) Except for this Agreement, any other agreement to which
Merger Sub is required to become a party pursuant hereto or as
otherwise contemplated by this Agreement, Merger Sub is neither a
party to nor bound by any agreement, obligation, instrument,
permit, franchise, judgment, order or decree. The execution and
delivery of this Agreement by Merger Sub, and the consummation by
Merger Sub of the Merger and the other transactions contemplated
hereby will not, conflict with, constitute a default under (with
or without the giving of notice of lapse of time, of both) or
constitute or result in a violation of or under the certification
of incorporation or bylaws of Merger Sub.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity
or other Person is required in connection with the execution and
delivery of this Agreement by Merger Sub or the consummation by
Merger Sub of the Merger or the performance by Merger Sub of the
other obligations to be performed by Merger Sub pursuant to the
terms of this Agreement and the other transactions contemplated
hereby.
(d) No Business Activities. Merger Sub has not conducted any
activities other than in connection with the organization of Merger Sub, the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated hereby. Merger Sub has no Subsidiaries.
3.4 DATE OF REPRESENTATIONS. Unless otherwise provided, each
representation and warranty of the parties set forth in this Agreement shall be
true and correct on and as of the date of this Agreement.
24
ARTICLE IV.
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1 COVENANTS OF NETGENESIS. During the period from the date of this
Agreement to the Closing Date, NetGenesis agrees as to the NetGenesis Entities
that (except as contemplated or permitted by this Agreement or to the extent
that SPSS shall otherwise consent in writing, which consent shall not be
unreasonably withheld or delayed):
(a) Ordinary Course.
(i) The NetGenesis Entities shall carry on their respective
businesses in the usual, regular and ordinary course in all
material respects, in substantially the same manner as heretofore
conducted, and shall use commercially reasonable efforts to
preserve intact their respective present lines of business,
maintain their respective rights and franchises and preserve their
relationships with customers, suppliers and others having business
dealings with them, all to further the goal that their ongoing
businesses shall not be impaired in any material respect;
provided, however, that no action by the NetGenesis Entities with
respect to matters specifically addressed by any other provision
of this Section 4.1 shall be deemed a breach of this Section 4.1
(a) (i) unless such action would constitute a breach of one or
more of such other provisions.
(ii) Other than in connection with acquisitions permitted by
Section 4.1 (e), none of the NetGenesis Entities shall, and none
of the NetGenesis Entities shall permit any of their Subsidiaries
to, (A) enter into any licensing agreement other than licenses in
connection with the sale of goods or services entered into in the
ordinary course of business; (B) enter into any new line of
business; (C) incur or commit to any capital expenditures or any
obligations or liabilities in connection therewith other than
Permitted Capital Expenditures (as defined below) and obligations
or liabilities in connection therewith, or; (D) enter into any
contract, agreement or other arrangement for the sale of
inventories or for the furnishing of services which contract,
agreement or other arrangement involves expenditures in excess of
$50,000 or which may give rise to commitments which may extend
beyond twelve (12) months from the date of such contract,
agreement or arrangement, unless such contract, agreement or
arrangement can be terminated by the applicable NetGenesis
Entities on not more than thirty (30) days' notice and without
incurring an obligation to pay any material premium or penalty or
suffering any other material detriment. As used herein, a
"Permitted Capital Expenditure" is a capital expenditure (i) in an
amount under $10,000 in any individual or group of related
expenditures, or (ii) approved by SPSS (which approval will not be
unreasonably withheld by SPSS and will be delivered within two
business days of request by NetGenesis). During the period from
the date of this Agreement to the Closing Date, NetGenesis shall,
not later than the tenth (10th) day of each calendar month,
deliver to SPSS a schedule of capital expenditures made by or on
behalf of any NetGenesis Entity in the immediately preceding
calendar month.
25
(b) General Ledger Trial Balance. Each of the NetGenesis Entities
shall deliver to SPSS (i) on a monthly basis, within 7 business days following
the end of each such month, a general ledger trial balance and accompanying
schedules, which schedules shall reflect all commitments by such NetGenesis
Entity that will affect the reported trial balance, and (ii) on a weekly basis,
an account of weekly cash receipts and disbursement reporting. SPSS shall have
the right to request any additional information and to audit any such
information as SPSS, in its sole discretion, deems reasonably necessary and
appropriate during regular business hours.
(c) Dividends; Changes in Share Capital. None of NetGenesis
Entities shall, nor shall any of the NetGenesis Entities propose to: (i) declare
or pay any dividends on or make other distributions in respect of any of its
capital stock, (ii) split, combine or reclassify any class or series of their
respective capital stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for, shares of any
class or series of their respective capital stock, or (iii) repurchase, redeem
or otherwise acquire any shares of their respective capital stock or any
securities or other rights exchangeable or convertible into or exercisable for
any shares of their respective capital stock.
(d) Issuance of Securities. None of the NetGenesis Entities shall
issue, deliver or sell, or authorize or propose the issuance, delivery or sale
of, any shares of any class or series of their respective capital stock, any
NetGenesis Voting Debt or any securities or other rights exercisable or
convertible into or exercisable for, or any rights, warrants, calls or options
to acquire, any such shares, NetGenesis Voting Debt or securities or other
rights, or enter into any commitment, arrangement, undertaking or agreement with
respect to any of the foregoing, other than (i) the issuance of NetGenesis
Common Stock upon the exercise of NetGenesis Stock Options or in connection with
other stock-based benefits plans where such NetGenesis Stock Options or other
benefits were granted prior to the date of this Agreement, in each case in
accordance with their terms as of the date of this Agreement, or such additional
and/or different terms as shall have been accurately and completely described in
a written statement delivered by NetGenesis to SPSS and approved in writing by
SPSS prior to the effectiveness thereof, (ii) issuances by a wholly owned
Subsidiary of NetGenesis of capital stock to such Subsidiary's parent or another
wholly owned subsidiary of NetGenesis and (iii) shares of NetGenesis Common
Stock issuable to participants in the NetGenesis 1999 Employee Stock Purchase
Plan consistent with the terms of that plan, provided that NetGenesis shall
suspend such plan not more than ten (10) business days after the date on which
this Agreement is executed, which suspension shall not affect the rights of any
participant holding options under such plan as of the date such plan is
suspended.
(e) Governing Documents. Except to the extent required to comply
with their respective obligations hereunder or with applicable law, none of the
NetGenesis Entities shall amend or propose to so amend its respective
certificates or articles of incorporation, bylaws or other governing documents.
(f) No Acquisitions. None of the NetGenesis Entities shall acquire
or agree to acquire, whether by means of a merger or consolidation with, the
purchase or other acquisition of any equity interest in, the purchase or other
acquisition of any substantial portion of the assets of, or by any other means,
any corporation, partnership, association or other business organization or
division thereof.
26
(g) No Dispositions. None of the NetGenesis Entities shall sell,
lease or otherwise dispose of, or agree to sell, lease or otherwise dispose of,
any of its assets (including capital stock of any NetGenesis Subsidiaries),
other than the sale, lease or disposition of (i) inventory in the ordinary
course of business, (ii) office equipment no longer used by NetGenesis or (iii)
office equipment (valued not more than $10,000 individually or $200,000 in the
aggregate) transferred to employees of NetGenesis in connection with the
termination of such employees.
(h) Investments; Indebtedness. None of the NetGenesis Entities
shall (i) make any loans, advances or capital contributions to, or investments
in, any other Person, other than (x) by NetGenesis or a NetGenesis Subsidiary to
or in NetGenesis or any other NetGenesis Subsidiary or (y) pursuant to or in
connection with any contract or other legal obligation (including, but not
limited to, loans made by NetGenesis for the purposes of paying applicable
federal, state and local income and employment tax withholding requirements in
connection with the several Stock Restriction and Repurchase Agreements between
NetGenesis and certain holders of NetGenesis Common Stock in effect on the date
hereof in the aggregate not exceeding $200,000) binding on a NetGenesis Entity
as of the date of this Agreement and identified in the NetGenesis Disclosure
Schedule or (ii) create, incur, assume or suffer to exist any indebtedness
(other than ordinary course trade payables), issuances of debt securities,
guarantees, loans or advances not in existence as of, or exceeding the liability
therefor, the date of this Agreement except pursuant to credit facilities,
indentures and other borrowing arrangements in existence on the date of this
Agreement and identified in the NetGenesis Disclosure Schedule, provided,
however, that the amount of any such new or additional liabilities may not
exceed $25,000 in the aggregate without the prior written consent of SPSS.
(i) Compensation. None of the NetGenesis Entities shall increase
the amount of compensation of any director, executive officer or employee, make
any increase in or commitment to increase any employee benefits, issue any
additional NetGenesis Stock Options, terminate or amend any existing employee
benefit plan, adopt or make any commitment to adopt any additional employee
benefit plan or make any contribution, other than (i) regularly scheduled
contributions to any NetGenesis Benefit Plan in the ordinary course of business
consistent with past practice, (ii) as, and then only to the extent, necessary
to satisfy an obligation existing as of the date of this Agreement and
identified in the NetGenesis Disclosure Schedule, (iii) in connection with the
extension of the exercise period or acceleration of vesting of the NetGenesis
Stock Options or (iv) payments made in connection with the termination of
NetGenesis employees in a manner and in amounts not inconsistent with the
description of the NetGenesis severance policy attached hereto as Exhibit D.
(j) Accounting Methods; Income Tax Election. Except as set forth
in the NetGenesis Disclosure Schedule, NetGenesis shall not change its methods
of accounting in effect at June 30, 2001, except as required by changes in GAAP
as concurred in by NetGenesis' independent public accountants. NetGenesis shall
not (i) change its fiscal year or (ii) make any material tax election, other
than in the ordinary course of business consistent with past practice.
(k) Certain Agreements. None of the NetGenesis Entities shall
enter into any agreements or arrangements that limit or otherwise restrict any
NetGenesis Entity or any of their respective affiliates or any successor
thereto, or that could, after the Effective Time, limit or restrict SPSS or any
of its affiliates (including the Surviving Corporation) or any successor
27
thereto, from engaging or competing in any line of business or in any geographic
area which agreements or arrangements, individually or would, in the aggregate,
reasonably be expected to have a Material Adverse Effect on SPSS and its
Subsidiaries (including the Surviving Corporation and its Subsidiaries), taken
together, after giving effect to the Merger.
(l) No Related Actions. NetGenesis will not, and will not permit
any of its Subsidiaries to, agree or commit to any of the foregoing.
(m) Involuntary Terminations. From the date of this Agreement to
the Closing Date, NetGenesis will not involuntarily terminate the employment of
any officer or other employee without the prior written (except as provided in
subsection (ii) below) consent of SPSS, which consent (i) shall not be
unreasonably withheld, and (ii) shall be deemed to have been given if SPSS does
not object to such termination prior to the close of business on the second
business day following the date on which it received written notification from
NetGenesis of the proposed termination.
4.2 GOVERNMENTAL FILINGS. Each party shall (a) confer on a regular and
frequent basis with the other and (b) report to the other (to the extent
permitted by law or regulation or any applicable confidentiality agreement) on
operational matters. Each of NetGenesis and SPSS shall file all reports required
to be filed by each of them with the SEC (and all other Governmental Entities)
between the date of this Agreement and the Closing Date and shall (to the extent
permitted by law or regulation or any applicable confidentiality agreement)
deliver to the other party copies of all such reports promptly after the same
are filed.
4.3 CONTROL OF OTHER PARTY'S BUSINESS. Each of SPSS and NetGenesis
releases the other party from any liability or damage based upon a claim that
the exercise of such other party's rights pursuant to this Article IV or any
other provision of this Agreement constitutes the control of their business.
Each of SPSS and NetGenesis acknowledges that the foregoing sentence shall not
be construed to limit the exercise of any right by either SPSS or NetGenesis
pursuant to this Agreement.
ARTICLE V.
ADDITIONAL AGREEMENTS
5.1 PREPARATION OF PROXY STATEMENT; SHAREHOLDERS MEETINGS.
(a) As promptly as reasonably practicable following the date of
this Agreement, SPSS and NetGenesis shall prepare and file with the SEC a
mutually acceptable proxy statement (the "Proxy Statement") and SPSS shall
prepare and file with the SEC a Registration Statement on Form S-4 in which the
Proxy Statement will be included as a prospectus (such Registration Statement,
and any amendments or supplements thereto, the "Form S-4"). SPSS agrees to
provide NetGenesis with a reasonable opportunity to review and comment on the
Form S-4 before filing with the SEC. Each of SPSS and NetGenesis shall use
commercially reasonable efforts (i) to request, within twenty-four (24) hours of
receiving oral or written notification by the SEC that it has no further comment
on the Form S-4, that the effective date of the Form S-4 be accelerated so that
the Form S-4 become effective as promptly as practicable thereafter, (ii) to
otherwise have the Form S-4 declared effective by the SEC as
28
promptly as practicable, and (iii) to keep the Form S-4 effective as long as is
necessary to consummate the Merger and the transactions contemplated thereby.
SPSS and NetGenesis shall, as promptly as practicable after receipt thereof, (A)
provide the other party copies of any written comments and advise the other
party of any oral comments received from the SEC relating to matters being
considered by the SEC in connection with its review, if any, of the Form S-4 and
(B) respond to such comments by filing with the SEC a proper response and, if
necessary or desirable, an amendment to the Form S-4. SPSS and its counsel shall
be responsible for the preparation and filing of the Form S-4, provided,
however, that NetGenesis and its counsel shall promptly provide such
information, draft and provide to SPSS such portions of the Form S-4 and provide
such other assistance with respect to the preparation and filing of the Form S-4
as SPSS may from time to time reasonably request. Notwithstanding any other
provision herein to the contrary, no portion of the Form S-4 or any amendment or
supplement thereto nor any response to comments relating thereto may be filed
with the SEC, and no document or portion thereof may be incorporated by
reference into the Form S-4, without the prior approval of both SPSS and
NetGenesis, which approval shall not be unreasonably withheld or delayed. In the
event of a Change (as defined in Section 5.1(c) herein) in the NetGenesis
Recommendation at any time following the initial filing of the Form S-4 with the
SEC, SPSS shall amend or supplement the Form S-4 in order to accurately describe
the deliberations and conclusions of NetGenesis' Board of Directors with respect
to the Merger by means of a Qualifying Amendment (as defined below) and shall
file the same with the SEC as soon as practicable. A "Qualifying Amendment"
means an amendment or supplement to the Form S-4 to the extent that such
amendment or supplement does no more than (i) identify a Change in the
NetGenesis Recommendation, (ii) provide a reasonably concise statement of the
reasons why the NetGenesis Board of Directors determined that it was necessary
or appropriate to change the NetGenesis Recommendation and the factors
considered in making such determination, and (iii) set forth such additional
information as the parties agree in the good faith exercise of their respective
reasonable discretion is related to the foregoing and is necessary or
appropriate in the circumstances. NetGenesis will use commercially reasonable
efforts to cause the Form S-4 to be mailed to NetGenesis' stockholders as soon
as practicable after the Form S-4 is declared effective by the SEC. SPSS shall
take any action (other than qualifying to do business in any jurisdiction in
which it is not now so qualified or to file a general consent to service of
process) required to be taken under any applicable state securities laws in
connection with the issuance of the shares of SPSS Common Stock to be issued in
the Merger (the "Share Issuance") and NetGenesis shall furnish all information
concerning NetGenesis and the holders of NetGenesis Common Stock as may be
reasonably requested in connection with any such action. Each party will advise
the other party, promptly after it receives notice thereof, of the time when the
Form S-4 has been declared effective by the SEC, the issuance by the SEC or any
state securities regulatory authority of any stop order or threatened stop order
relating to the Form S-4, the suspension of the qualification of the SPSS Common
Stock issuable in connection with the Merger for offering or sale in any
jurisdiction, any request by the SEC or any state securities regulatory
authority to respond to an inquiry, to provide any information on a supplemental
basis, to amend or supplement any document incorporated by reference into the
Form S-4 (regardless of whether the document which is the subject of such
request was filed by the party who is to receive notice as provided above), or
any request by the SEC to amend or supplement the Form S-4; in each case,
together with all of the facts and circumstances known to the notifying party
relating to the event or events which has or have given rise to the obligation
to provide such notification. If at any time prior to the Effective
29
Time either SPSS or NetGenesis becomes aware that any information including,
without limitation, information relating to SPSS or NetGenesis, or any of their
respective affiliates, officers or directors, has either been misstated in, or
omitted from, the Form S-4, the party who has become aware of such misstatement
or omission shall promptly advise the other party and SPSS and NetGenesis shall
cooperate with one another in the preparation and filing, as soon as reasonably
practicable, of an amendment or supplement to the Form S-4 so that following the
filing of such amendment or supplement, the Form S-4 (including any documents
incorporated by reference therein) would not include any misstatement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(b) As soon as reasonably practicable after the date on which the
Form S-4 has been declared effective by the SEC, NetGenesis shall take all
actions required by the DGCL and Regulations 14A and 14C promulgated under the
Exchange Act to call, give notice of, solicit proxies with respect to, convene
and hold a meeting of its stockholders for the purpose of obtaining the Required
NetGenesis Vote (the "NetGenesis Stockholder Meeting").
(c) In connection with obtaining the Required NetGenesis Vote, the
Board of NetGenesis will not withdraw, modify or qualify the NetGenesis
Recommendation in a manner adverse to SPSS (any such withdrawal, modification or
qualification, a "Change") or take any action in connection with or make any
statement at the NetGenesis Stockholder Meeting which is inconsistent with the
NetGenesis Recommendation or would reasonably be expected to diminish the
likelihood of obtaining the Required NetGenesis Vote, provided, however, that:
(i) the foregoing shall not prohibit accurate disclosure (and
such disclosure shall not be deemed a Change) of factual
information regarding the business, financial condition or
operations of SPSS or NetGenesis;
(ii) the foregoing shall not, if such disclosure is required
by applicable law and then only to the minimum extent necessary to
satisfy such requirement, prohibit disclosure of the fact that an
Acquisition Proposal (as hereinafter defined) has been made
together with the identity of the Person making such proposal and
the material terms thereof; and
(iii) subject to NetGenesis' continuing obligation to pay any
fees due under Sections 7.2(b) and 7.2(d) hereof, the Board of
Directors of NetGenesis may effect a Change in the NetGenesis
Recommendation:
(A) as a result of a Superior Proposal in accordance
with the provisions of Section 5.4 hereof (it being
understood that any recommendation to accept a Superior
Proposal shall be deemed a Change); or
(B) if the Board of Directors of NetGenesis determines
in good faith that a Material Adverse Effect has occurred
with respect to SPSS.
30
5.2 ACCESS TO INFORMATION/EMPLOYEES.
(a) During the period prior to the Effective Time and upon
reasonable notice, each of SPSS and NetGenesis shall afford to certain specified
officers, employees, accountants, counsel, financial advisors and other
representatives of the other party reasonable access during normal business
hours to all its properties, books, material contracts, commitments, records,
business relationships, officers and employees. Any such information obtained
pursuant to this Section 5.2 (hereinafter referred to collectively as
"Confidential Information") will be used solely for the purpose of consideration
or performance of the transactions contemplated by this Agreement.
(b) In connection with the mutual exchange of Confidential
Information described in subsection (a) above, each party agrees to: (i) hold
the Confidential Information in strict confidence; (ii) not disclose any of the
Confidential Information to any third party or to any such party's employees,
agents or representatives other than those who need to know and/or have access
to such Confidential Information in connection with the performance of their
duties pursuant to this Agreement; (iii) use the Confidential Information only
in furtherance of the joint business activities of the parties set forth in this
Agreement; and (iv) return to the other party or destroy or delete, at such
other party's election, all of the relevant portions of any of the documents and
other materials embodying Confidential Information (including all copies
thereof) in such party's possession upon termination of this Agreement.
Notwithstanding the foregoing, such restrictions shall not apply to information
which: (A) is generally known to and available for use within the trade or by
the public at the time of disclosure to the other party; (B) becomes generally
known to and available for use within the trade or by the public other than as a
result of a breach of the other party's duty of confidentiality hereunder; (C)
is required to be disclosed by law or pursuant to a court order, subject to
prompt prior written notice by the party subject to such law or receiving such
court order to the other party of such potential disclosure and the other
party's right to prevent or otherwise limit such disclosure within the bounds of
the law or court order; and (D) is authorized to be used and/or disclosed to
third parties by one party in writing, subject to execution of a confidentiality
agreement acceptable to such party by the third party.
(c) After the date hereof, SPSS will be permitted, prior to the
Effective Time and subject to applicable law, to communicate directly with
NetGenesis employees, in a manner reasonably acceptable to both SPSS and
NetGenesis, regarding employment related matters after the Effective Time.
5.3 COMMERCIALLY REASONABLE EFFORTS. Subject to the terms and
conditions of this Agreement, each party will use commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under this Agreement and
applicable laws and regulations to consummate and make effective the Merger and
the other transactions contemplated by this Agreement and to fulfill and cause
to be fulfilled the conditions to closing under this Agreement as soon as
practicable after the date hereof, including (i) preparing and filing as
promptly as practicable all documentation to effect all necessary applications,
notices, petitions, filings, tax ruling requests and other documents and to
obtain as promptly as practicable all consents, waivers, licenses, orders,
registrations, approvals, permits, tax rulings and authorizations necessary or
advisable to be obtained from any third party and/or any Governmental Entity in
order to consummate the Merger or any of the other transactions contemplated by
this Agreement and (ii) taking all commercially reasonable steps as
31
may be necessary to obtain all such material consents, waivers, licenses,
registrations, permits, authorizations, tax rulings, orders and approvals. Each
party hereto, at the reasonable request of another party, shall execute and
deliver such other instrument and do and perform such other acts and things as
may be necessary or desirable for effecting completely the consummation of the
transactions contemplated hereby, so long as such action is not inconsistent
with this Agreement.
5.4 ACQUISITION PROPOSALS.
(a) Without limitation on any of NetGenesis' other obligations
under this Agreement (including under Article IV hereof), NetGenesis agrees that
neither it nor any of its Subsidiaries nor any of the officers and directors of
it or its Subsidiaries shall, and that it shall cause its and its Subsidiaries'
employees, agents and representatives (including any investment banker, attorney
or accountant retained by it or any of its Subsidiaries) not to, directly or
indirectly, initiate, solicit, encourage or knowingly facilitate (including by
way of furnishing information) any inquiries or the making of any proposal or
offer by any Person (other than as contemplated by this Agreement) with respect
to a merger, reorganization, share exchange, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving it, or any purchase or sale of the consolidated assets (including
without limitation stock of Subsidiaries) of such party and its Subsidiaries,
taken as a whole, (any such proposal or offer (other than a proposal or offer
made by the other party or an affiliate thereof) being hereinafter referred to
as an "Acquisition Proposal"). NetGenesis further agrees that neither it nor any
of its Subsidiaries nor any of the officers and directors of it or its
Subsidiaries shall, and it shall cause its and its Subsidiaries' employees,
agents and representatives (including any investment banker, attorney or
accountant retained by it or any of its Subsidiaries) not to, directly or
indirectly, have any discussion with or provide any confidential information or
data to any Person relating to an Acquisition Proposal, engage in any
negotiations concerning an Acquisition Proposal, knowingly facilitate any effort
or attempt to make or implement an Acquisition Proposal or accept an Acquisition
Proposal.
(b) Notwithstanding anything in this Agreement to the contrary,
NetGenesis and its Board of Directors shall be permitted to:
(i) take such actions as are, in consultation with
NetGenesis' counsel, deemed necessary to comply with Rule 14d-9
and Rule 14e-2 promulgated under the Exchange Act with regard to
an Acquisition Proposal; and
(ii) engage in any discussions or negotiations with, or
provide any information to, any Person in response to an
unsolicited bona fide written Acquisition Proposal by any such
Person, if, and only to the extent that, the NetGenesis Board of
Directors concludes in good faith that such Acquisition Proposal
constitutes a Superior Proposal (as defined in Section 8.12),
provided however, that prior to providing any information or data
to any Person or entering into discussions or negotiations with
any Person relating to a Superior Proposal, NetGenesis shall
provide SPSS with a copy of the written Acquisition Proposal
(unless prevented from doing so under a non-disclosure agreement
executed prior to September 19, 2001) and, thereafter, shall keep
SPSS informed of the status of any discussions or negotiations
with respect thereto and promptly provide SPSS
32
with copies of any documents or correspondence received by
NetGenesis with respect thereto, including, without limitation,
any amended or revised Acquisition Proposal.
(c) NetGenesis agrees that it will, and will cause its officers,
directors and representatives to, immediately cease and cause to be terminated
any activities, discussions or negotiations existing as of the date of this
Agreement with any parties conducted heretofore with respect to any Acquisition
Proposal. NetGenesis agrees that it will use commercially reasonable efforts to
promptly inform its directors, officers, key employees, agents and
representatives of the obligations undertaken in this Section 5.4. Nothing in
this Section 5.4 shall (x) permit NetGenesis to terminate this Agreement (except
as specifically provided in Article VII hereof) or (y) affect any other
obligation of NetGenesis under this Agreement.
5.5 FEES AND EXPENSES. Whether or not the Merger is consummated, all
Expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such Expenses,
provided, however, that in the event the Merger is consummated, the Surviving
Corporation will pay up to $2,000,000 in Expenses incurred by NetGenesis prior
to the Closing Date in connection with this Agreement and the transactions
contemplated hereby. As used in this Agreement, "Expenses" includes all
commercially reasonable out-of-pocket expenses (including, without limitation,
all fees and expenses of counsel, accountants, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by a party or on its
behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement and the transactions
contemplated hereby, including the preparation, printing, filing and mailing of
the Joint Proxy Statement/Prospectus and the solicitation of stockholder
approvals and all other matters related to the transactions contemplated hereby.
NetGenesis shall provide an accounting of all expenses covered under this
Section 5.5 on at least a bi-weekly basis during the period between the date of
this Agreement and the Effective Time.
5.6 PUBLIC ANNOUNCEMENTS. SPSS and NetGenesis shall use commercially
reasonable efforts to develop a joint communications plan and each party shall
use commercially reasonable efforts (i) to ensure that all press releases and
other public statements with respect to the transactions contemplated hereby
shall be consistent with such joint communications plan, and (ii) unless
otherwise required by applicable law or by obligations pursuant to any listing
agreement with or rules of any securities exchange, neither party shall issue
any press release or otherwise making any public statement with respect to this
Agreement or the transactions contemplated hereby without the prior written
consent of the other party. In addition to the foregoing, except to the extent
disclosed in or consistent with the Joint Proxy Statement/Prospectus in
accordance with the provisions of Section 5.1, neither SPSS nor NetGenesis shall
issue any press release or otherwise make any public statement or disclosure
concerning the other party or the other party's business, financial condition or
results of operations without the consent of the other party, which consent
shall not be unreasonably withheld or delayed.
5.7 LISTING OF SHARES OF SPSS COMMON STOCK. SPSS shall use
commercially reasonable efforts to cause the shares of SPSS Common Stock to be
issued in the Merger and the shares of SPSS Common Stock to be reserved for
issuance upon exercise of the NetGenesis
33
Stock Options to be approved for listing on NASDAQ, subject to official notice
of issuance, prior to the Closing Date.
5.8 SECTION 16 MATTERS. Prior to the Effective Time, SPSS and
NetGenesis shall take all such steps as may be required pursuant to Rules
16b-3(d) and 16b-3(e) under the Exchange Act to cause any dispositions of
NetGenesis Common Stock or acquisitions of SPSS Common Stock or the assumption
of the NetGenesis Stock Options resulting from the transactions contemplated by
Article I or Article II of this Agreement by each individual who is subject to
the reporting requirements of Section 16a of the Exchange Act with respect to
NetGenesis, to be exempt under Rule 16b promulgated under the Exchange Act.
5.9 CONFIDENTIAL INFORMATION. All documents or other information
provided by any party to this Agreement to any other party hereto shall be
governed by the terms of the Confidentiality Agreement (as defined in Section
8.12 hereof).
5.10 EMPLOYEE BENEFITS. As soon as administratively practicable after
the Effective Time, SPSS shall take commercially reasonable efforts so that
employees of NetGenesis shall be entitled to participate in each employee
benefit plan, program or arrangement of SPSS of general applicability (the "SPSS
Benefits Plans") to the same extent as similarly-situated employees of SPSS (it
being understood that inclusion of the employees of NetGenesis in the SPSS
Benefits Plans may occur at different times with respect to different plans).
Nothing herein shall limit the ability of SPSS to amend or terminate any of
NetGenesis' Benefits Plans in accordance with their terms at any time. To the
extent such NetGenesis employees are currently covered by NetGenesis' employee
benefit plans, programs or arrangements of general applicability, including,
without limitation, medical plans, SPSS shall make all necessary and appropriate
arrangements with its insurance provider to ensure that such NetGenesis'
employees will receive equivalent coverage under the SPSS Benefits Plans to the
extent such coverage is generally available under the SPSS Benefits Plans.
5.11 INDEMNIFICATION AND LIABILITY INSURANCE. SPSS agrees that all
rights to indemnification now existing in favor of the directors or officers of
NetGenesis and its subsidiaries as provided in their respective charters or
bylaws shall become obligations of the Surviving Corporation following the
Merger and shall continue in full force and effect, to the fullest extent
permitted by applicable law, for a period of five years from the Effective Time
with respect to matters occurring prior to the Effective Time. Prior to the
Effective Time, Merger Sub or, if so requested by SPSS, NetGenesis, shall
purchase a "Tail Policy" or "Run-Off Coverage" (as those terms are hereafter
defined) for the benefit of the directors and officers of NetGenesis upon the
following terms and conditions:
(a) The term or duration of the Tail Policy or Run-Off Coverage
shall be three (3) years (without regard to cost) or such longer term as can be
purchased for premiums of $200,000 in total;
(b) The coverage limits of the Tail Policy or Run-Off coverage
shall be $5,000,000 in the aggregate; and
(c) Except as set forth above, or as otherwise consented to in
writing by SPSS and NetGenesis, the Tail Policy or Run-Off coverage shall
provide coverage for claims and contain such other terms and conditions as are
substantially similar to NetGenesis' current directors' and officers' liability
insurance policy.
For purposes of this Section 5.11, a Tail Policy or Run-Off Coverage shall mean
a policy insuring directors and officers of NetGenesis from claims brought
after the termination or expiration of NetGenesis' current directors' and
officers' liability insurance policy where the events giving rise to such
claims occurred prior to such termination or expiration.
34
5.12 REPAYMENT OF INDEBTEDNESS. NetGenesis shall use commercially
reasonable efforts to induce ▇▇▇▇▇ ▇▇▇▇▇▇ to repay, prior to the Effective Time,
all amounts due and owing to NetGenesis under that certain Promissory Note,
dated January 17, 2001, in the principal amount of $100,000, made by ▇▇▇▇▇
▇▇▇▇▇▇ to the order of NetGenesis.
ARTICLE VI.
CONDITIONS PRECEDENT
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligations of NetGenesis, SPSS and Merger Sub to effect the Merger
shall be subject to the satisfaction or waiver on or prior to the Closing Date
of the following conditions:
(a) Shareholder Approval. NetGenesis shall have obtained the
Required NetGenesis Vote in connection with the adoption of this Agreement by
the stockholders of NetGenesis.
(b) No Injunctions, Litigation or Restraints, Illegality. No Laws
shall have been adopted or promulgated, no Actions are pending or threatened,
and no temporary restraining order, preliminary or permanent injunction or other
order issued by a court or other Governmental Entity of competent jurisdiction
shall be in effect, (i) having the effect, or which reasonably could be expected
to have the effect, of making the Merger illegal or otherwise prohibiting
consummation of the Merger or (ii) which otherwise, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect on
SPSS and its Subsidiaries (including the Surviving Corporation and its
Subsidiaries), taken together after giving effect to the Merger; provided,
however, that, for a period of 180 days after the execution of this Agreement,
each party agrees to take all commercially reasonable steps necessary to avoid
or to defend itself and each other party against any such temporary retraining
order, preliminary or permanent injunction or other order issued by a court or
other Governmental Entity of competent jurisdiction.
(c) Consents and Approvals. All consents, approvals and actions
of, filings with and notices to any Governmental Entity or other Person required
of SPSS, NetGenesis or any of their Subsidiaries to consummate the Merger, the
Share Issuance and the other transactions contemplated hereby, the failure of
which to be obtained or taken, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on SPSS and its
Subsidiaries (including the Surviving Corporation and its Subsidiaries), taken
together after giving effect to the Merger, shall have been obtained; provided,
however, that the provisions of this Section 6.1(c) shall not be available to
any party whose failure to fulfill its obligations pursuant to Section 5.3 shall
have been the cause of, or shall have resulted in, the failure to obtain such
consent or approval. No consents, approvals, actions, filings or notices related
to any antitrust requirements of any jurisdiction shall be a condition of
closing under this Section 6.1(c).
(d) NASDAQ Listing. The shares of SPSS Common Stock to be issued
in the Merger and such other shares to be reserved for issuance in connection
with the Merger shall
35
have been approved for listing on NASDAQ, subject to official notice of
issuance, unless the failure to have such shares approved for listing on NASDAQ
is waived in writing by NetGenesis.
(e) Effectiveness of the Form S-4. The Form S-4 shall have been
declared effective by the SEC under the Securities Act. No stop order suspending
the effectiveness of the Form S-4 shall have been issued by the SEC and no
proceedings for that purpose shall have been initiated or threatened by the SEC.
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF SPSS AND MERGER SUB. The
obligations of SPSS and Merger Sub to effect the Merger are subject to the
satisfaction of, or waiver by, SPSS, on or prior to the Closing Date of the
following conditions:
(a) Representations and Warranties. Each of the representations
and warranties of NetGenesis set forth in this Agreement shall be true and
correct in all respects on and as of the date of this Agreement and shall be
true and correct in all respects on and as of the Closing Date as though made on
and as of the Closing Date (except to the extent in either case that such
representations and warranties speak as of another date), other than for such
failures to be true and correct that, individually or in the aggregate, would
not constitute a Material Adverse Effect with respect to SPSS (including the
Surviving Corporation and its Subsidiaries).
(b) Performance of Obligations of NetGenesis. NetGenesis shall
have performed or complied in all respects with all agreements and covenants
required to be performed by it under this Agreement at or prior to the Closing
Date, other than for such failures to so perform or comply that, individually or
in the aggregate, would not constitute a Material Adverse Effect with respect to
SPSS (including the Surviving Corporation and its Subsidiaries).
(c) Closing Certificate. NetGenesis shall have delivered to SPSS a
Closing Certificate, dated as of the Closing Date, executed by the chief
executive officer and the chief financial officer of NetGenesis acknowledging
that NetGenesis has fulfilled its obligations under Sections 6.2(a) and 6.2(b)
hereof.
(d) Transfer of Bank Accounts; Safe Deposit Boxes. NetGenesis
shall have delivered to SPSS signature cards, banking resolutions and/or all
other instruments necessary to transfer to SPSS ownership of each of the bank
accounts and safe deposit boxes maintained by the NetGenesis Entities at the
banks listed on Schedule 3.2(u) of the NetGenesis Disclosure Schedule and to
designate new authorized signatories with respect to each such bank account and
safe deposit box.
(e) No Material Adverse Change of NetGenesis. Since June 30, 2001,
there shall not have occurred a Material Adverse Effect with respect to
NetGenesis.
(f) Tax Opinion. SPSS shall have received an opinion of ▇▇▇▇ &
▇▇▇▇▇▇▇, LLP, dated as of the Closing Date, in form and substance reasonably
satisfactory to SPSS, on the basis of the facts, representations and assumptions
set forth or referred to in such opinion, that the Merger will constitute a
"reorganization" within the meaning of Section 368 of the Code and that each of
SPSS and NetGenesis will be a party to the reorganization within the meaning of
Section 368(a) of the Code; provided, however, that if the counsel to SPSS does
not render such opinion, this condition shall nonetheless be deemed to be
satisfied with respect to SPSS if
36
counsel to NetGenesis renders such opinion to SPSS. In rendering such opinion,
counsel to SPSS shall be entitled to rely upon information, representations and
assumptions provided by SPSS, NetGenesis and Merger Sub (allowing for such
amendments to the representations as counsel to SPSS deems reasonably
necessary). The parties to this Agreement agree to make such reasonable
representations as requested by such counsel for the purpose of rendering such
opinions.
6.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF NETGENESIS. The
obligations of NetGenesis to effect the Merger are subject to the satisfaction
of, or waiver by NetGenesis, on or prior to the Closing Date of the following
additional conditions:
(a) Representations and Warranties. Each of the representations
and warranties of SPSS set forth in this Agreement shall be true and correct in
all respects on and as of the date of this Agreement and shall be true and
correct in all respects on and as of the Closing Date as though made on and as
of the Closing Date (except to the extent in either case that such
representations and warranties speak as of another date), other than for such
failures to be true and correct that, individually or in the aggregate, would
not constitute a Material Adverse Effect with respect to NetGenesis.
(b) Performance of Obligations of SPSS. SPSS shall have performed
or complied in all respects with all agreements and covenants required to be
performed by it under this Agreement at or prior to the Closing Date, other than
for such failures to so perform or comply that, individually or in the
aggregate, would not constitute a Material Adverse Effect with respect to
NetGenesis.
(c) Closing Certificate. SPSS shall have delivered to NetGenesis a
Closing Certificate, dated as of the Closing Date, executed by the chief
executive officer and the chief financial officer of SPSS acknowledging that
SPSS has fulfilled its obligations under Sections 6.3(a) and 6.3(b) hereof.
(d) No Material Adverse Change of SPSS. Since June 30, 2001, there
shall not have occurred a Material Adverse Effect with respect to SPSS.
(e) Tax Opinion. NetGenesis shall have received an opinion of
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, LLP, dated as of the Closing Date, in form and substance
reasonably satisfactory to NetGenesis, on the basis of the facts,
representations and assumptions set forth or referred to in such opinion, that
the Merger will constitute a "reorganization" within the meaning of Section 368
of the Code and that each of SPSS and NetGenesis will be a party to the
reorganization within the meaning of Section 368(a) of the Code; provided,
however, that if the counsel to NetGenesis does not render such opinion, this
condition shall nonetheless be deemed to be satisfied with respect to NetGenesis
if counsel to SPSS renders such opinion to NetGenesis. In rendering such
opinion, counsel to NetGenesis shall be entitled to rely upon information,
representations and assumptions provided by SPSS, NetGenesis and Merger Sub
(allowing for such amendments to the representations as counsel to NetGenesis
deems reasonably necessary). The parties to this Agreement agree to make such
reasonable representations as requested by such counsel for the purpose of
rendering such opinions.
37
6.4 FRUSTRATION OF CLOSING CONDITIONS. None of SPSS, Merger Sub or
NetGenesis may rely on the failure of any condition set forth in Section 6.1,
6.2 or 6.3, as the case may be, to be satisfied if such failure was caused by
such party's failure to use commercially reasonable efforts to satisfy such
condition and consummate the Merger and the other transactions contemplated by
this Agreement.
ARTICLE VII.
TERMINATION AND AMENDMENT
7.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval of the Merger by the
stockholders of NetGenesis:
(a) By mutual written consent of the Boards of Directors of SPSS
and NetGenesis;
(b) By SPSS if (i) NetGenesis commits a breach of any provision of
this Agreement and such breach shall not have been cured within thirty (30) days
after written notice thereof shall have been received by NetGenesis, and (ii)
such breach or failure to cure such breach shall have a Material Adverse Effect
on NetGenesis (provided that SPSS is not also in material breach of any
provision of this Agreement; and provided further, that no cure period shall be
provided for a breach which by its nature cannot be cured);
(c) By NetGenesis if (i) SPSS commits a breach of any provision of
this Agreement and such breach shall not have been cured within thirty (30) days
after written notice thereof shall have been received by SPSS, and (ii) such
breach or failure to cure such breach shall have a Material Adverse Effect on
SPSS (provided that NetGenesis is not also in material breach of any provision
of this Agreement; and provided further, that no cure period shall be provided
for a breach which by its nature cannot be cured);
(d) By either SPSS or NetGenesis if approval of the Merger and
adoption for this Agreement by the NetGenesis Stockholders shall not have been
obtained by reason of the failure to obtain the Required NetGenesis Vote at the
NetGenesis Stockholder Meeting;
(e) By either SPSS or NetGenesis if the Effective Time shall not
have occurred on or before ninety (90) days following the date of this Agreement
(the "Termination Date") unless (i) the absence of such occurrence shall be due
to the failure of the party seeking to terminate this Agreement to perform, in
all material respects, each of its obligations under this Agreement required to
be performed by it at or prior to the Effective Time, (ii) the parties are then
unable to close because of a delay in the Form S-4 becoming effective, in which
case the Termination Date shall be changed to one hundred and twenty (120) days
following the date of this Agreement, (iii) the parties are then unable to close
because (A) it becomes necessary as a result of an increase in the market value
of the SPSS Common Stock to make a filing under the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Act, and
(B) the waiting period (and any extension thereof) applicable to the Merger
under the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Act has not been terminated or has not expired, in
which
38
case, the Termination Date shall be changed to one hundred thirty (130) days
following the date of this Agreement or (iv) the parties hereto mutually agree
in writing to a later date; or
(f) By either SPSS or NetGenesis, if the Board of Directors of
NetGenesis authorizes NetGenesis to accept a proposal that the Board of
Directors of NetGenesis has determined is a Superior Proposal; provided, that
NetGenesis shall not terminate this Agreement pursuant to this Section 7.1(f)
and enter into a definitive agreement relating to such Superior Proposal until
the expiration of five (5) Business Days following SPSS' receipt of written
notice advising SPSS that NetGenesis has received a Superior Proposal specifying
the material terms and conditions of such Superior Proposal (and including a
copy thereof with all accompanying documentation, if in writing), identifying
the Person making such Superior Proposal and stating whether NetGenesis intends
to enter into a definitive agreement relating to such Superior Proposal. After
providing such notice, NetGenesis shall provide a commercially reasonable
opportunity to SPSS during such period to make such adjustments in the terms and
conditions of this Agreement as would enable NetGenesis to proceed with the
Merger on such adjusted terms.
7.2 EFFECT OF TERMINATION.
(a) In the event this Agreement is terminated by either NetGenesis
or SPSS pursuant to Section 7.1 hereof, this Agreement shall hereafter become
void and there shall be no liability or obligation on the part of SPSS,
NetGenesis or Merger Sub or their respective officers or directors, except as
set forth in Section 7.2 and Article VIII and except that nothing herein will
relieve any party from liability for breach of this Agreement.
(b) In the event this Agreement is terminated by SPSS pursuant to
Section 7.1(b), then NetGenesis shall pay to SPSS not later than three (3)
Business Days after the date of such termination an amount of cash equal to two
percent (2%) of the Merger Value (as defined below) (the "Breakup Fee"). For
purposes of this Section 7.2, the term "Merger Value" shall mean an amount equal
to the per share closing price as reported on the Nasdaq National Market of the
SPSS Common Stock on the date of such termination multiplied by the product of
(i) the Exchange Ratio multiplied by (ii) the number of shares of NetGenesis
Common Stock issued and outstanding immediately prior to the date of such
termination (other than the shares of NetGenesis Common Stock owned by SPSS or
Merger Sub or any direct or indirect wholly owned subsidiary of SPSS or Merger
Sub immediately prior to such termination).
(c) In the event this Agreement is terminated by NetGenesis
pursuant to Section 7.1(c), then SPSS shall pay to NetGenesis not later than
three (3) Business Days after the date of such termination an amount of cash
equal to the Breakup Fee.
(d) In the event this Agreement is terminated by NetGenesis or
SPSS pursuant to Section 7.1(f), then NetGenesis shall pay to SPSS no later than
three (3) Business Days after the date of such termination an amount of cash
equal to the sum of (i) the Breakup Fee plus (ii) an additional one percent (1%)
of the Merger Value (the "Topping Fee"); provided, however, that in no event
shall NetGenesis be obligated under this Agreement to pay SPSS an amount in
excess of the sum of the Breakup Fee plus the Topping Fee in the event of
termination pursuant to Section 7.1(f).
39
(e) All payments under this Section 7.2 shall be made by wire
transfer of immediately available funds to an account designated by SPSS or
NetGenesis, as applicable.
7.3 AMENDMENT. This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective Boards of Directors, at any time
before or after approval of the matters presented in connection with the Merger
by the stockholders of NetGenesis and SPSS, but, after any such approval, no
amendment shall be made which by law or in accordance with the rules of any
relevant stock exchange requires further approval by such stockholders without
such further approval. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
7.4 EXTENSION; WAIVER. The parties hereto, by action taken or
authorized by their respective Boards of Directors, may, to the extent legally
allowed, (i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.
ARTICLE VIII.
GENERAL PROVISIONS
8.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. None
of the representations, warranties, covenants and other agreements in this
Agreement or in any instrument delivered pursuant to this Agreement, including
any rights arising out of any breach of such representations, warranties,
covenants and other agreements, shall survive the Closing Date, except for both
those covenants and agreements contained herein and therein that by their terms
apply or are to be performed in whole or in part after the Closing Date and this
Article VIII.
8.2 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, or by telecopy or telefacsimile, upon confirmation of
receipt, (b) on the first Business Day following the date of dispatch if
delivered by a recognized next-day courier service, or (c) on the third Business
Day following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
40
(a) if to SPSS or Merger Sub, to:
SPSS, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇,
President and Chief Executive Officer
SPSS, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
(b) if to NetGenesis to:
NetGenesis CORP.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
President and Chief Executive Officer
with a copy to:
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., Esq.
41
8.3 INTERPRETATION. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of,
Exhibit to or Schedule to this Agreement unless otherwise indicated. The table
of contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
8.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which taken
together shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party, it being understood that both parties need not
sign the same counterpart.
8.5 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES.
(a) This Agreement, the Confidentiality Agreement, and the other
agreements of the parties referred to herein constitute the entire agreement
between the parties hereto with respect to the transactions contemplated herein
and supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.
(b) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other Person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
8.6 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware (without giving effect to
choice of law principles thereof).
8.7 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any law or public policy, all other
terms and provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
8.8 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise), without
the prior written consent of the other party, and any attempt to make any such
assignment without such consent shall be null and void, except that Merger Sub
may assign, in its sole discretion, any or all of its rights, interests and
obligations under this Agreement to any direct wholly owned Subsidiary of SPSS
without the consent of NetGenesis, but no such assignment shall relieve Merger
Sub of any of its obligations under this
42
Agreement. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
8.9 SUBMISSION TO JURISDICTION; WAIVERS. Each of SPSS and NetGenesis
irrevocably agrees that any legal action or proceeding with respect to this
Agreement or for recognition and enforcement of any judgment in respect hereof
brought by the other party hereto or its successors or assigns may be brought
and determined in the Courts of the State of Delaware, and each of SPSS and
NetGenesis hereby irrevocably submits with regard to any such action or
proceeding for itself and in respect to its property, generally and
unconditionally, to the nonexclusive jurisdiction of the aforesaid courts. Each
of SPSS and NetGenesis hereby irrevocably waives, and agrees not to assert, by
way of motion, as a defense, counterclaim or otherwise, in any action or
proceeding with respect to this Agreement, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any reason
other than the failure to lawfully serve process (b) that it or its property is
exempt or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise), and (c) to the fullest extent permitted by applicable law, that (i)
the suit, action or proceeding in any such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper and (iii)
this Agreement, or the subject matter hereof, may not be enforced in or by such
courts.
8.10 ENFORCEMENT. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms. It is accordingly agreed that the parties
shall be entitled to specific performance of the terms hereof, this being in
addition to any other remedy to which they are entitled at law or in equity.
8.11 FURTHER ASSURANCES. From and after the date of this Agreement,
upon request of any party hereto, the parties hereto, as applicable, shall
execute and deliver such instruments, documents or other writings as may be
reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
8.12 DEFINITIONS. As used in this Agreement:
(a) "Beneficial ownership" or "beneficially own" shall have the
meaning under Section 13 (d) of the Exchange Act.
(b) "Benefit Plans" means, with respect to any Person, each
employee benefit plan, program, arrangement and contract (including, without
limitation, any "employee benefit plan," as defined in Section 3 (3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and any
bonus, deferred compensation, stock bonus, stock purchase, restricted stock,
stock option, employment, termination, stay agreement or bonus, change in
control and severance plan, program, arrangement and contract) in effect on the
date of this Agreement or disclosed on the NetGenesis Disclosure Schedule or the
SPSS Disclosure Schedule, as the case may be, to which such Person or its
Subsidiary is a party, which is maintained or contributed to by such Person, or
with respect to which such Person could incur material liability under Section
4069, 4201 or 4212 (c) of ERISA.
43
(c) "Board of Directors" means the Board of Directors of any
specified Person and any committees thereof.
(d) "Business Day" means any day on which banks are not required
or authorized to close in the City of Chicago, Illinois.
(e) "Code" means the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder.
(f) "Confidentiality Agreement" means that certain Non-Disclosure
Agreement, dated May 9, 2001 by and between SPSS and NetGenesis.
(g) "Environmental Laws" means any and all federal, state,
foreign, interstate, local or municipal laws, rules, regulations, statutes,
ordinances and codes of any Governmental Entity regulating, relating to or
imposing liability or standards of conduct concerning pollution, Hazardous
Materials or protection of human health, safety or the environment, as currently
in effect, and includes the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C.ss.ss.9601, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C.ss.ss.1801, et seq., the Resource Conservation and
Recovery Act, 42 U.S.C.ss.ss.6901, et seq., the Clean Water Act; 33 ▇.▇.▇.▇▇.▇▇.
1251, et seq., the Clean Air Act, 33 U.S.C.ss.ss.2601, et seq., the Toxic
Substances Control Act, 15 ▇.▇.▇.▇▇.▇▇. 2601, et seq., the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C.ss.ss.136, et seq., Occupational Safety
and Health Act 29 U.S.C.ss.ss.651, et seq. and the Oil Pollution Act of 1990, 33
U.S.C.ss.ss.2701, et seq., and the regulations promulgated pursuant thereto, and
all analogous state or local statutes.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
(i) "Hazardous Materials" means any materials or wastes, defined
or regulated as hazardous, toxic, a pollutant, a contaminant or dangerous in or
under any Environmental Laws which includes petroleum, petroleum products,
friable asbestos, urea formaldehyde, radioactive materials and polychlorinated
biphenyls.
(j) "Intellectual Property" means software, trademarks, service
marks, brand names, certification marks, trade dress and other indications of
origin, the goodwill associated with the foregoing and registrations in any
jurisdiction of, and applications in any jurisdiction to register, the
foregoing, including any extension, modification or renewal of any such
registration or application; inventions, discoveries and ideas, whether
patentable or not, in any jurisdiction; patents, applications for patents
(including, without limitation, divisions, continuations, continuations in part
and renewal applications), and any renewals, extensions or reissues thereof, in
any jurisdiction; proprietary information and trade secrets (as defined under
the Illinois Trade Secrets Act); and copyrights and registrations or
applications for registration of copyrights in any jurisdiction, and any
renewals or extensions thereof, any similar intellectual property or proprietary
rights.
(k) "Known" or "knowledge" means, with respect to any party, the
knowledge of such party's executive officers after reasonable inquiry.
44
(l) "Material Adverse Effect" means, with respect to any entity
any event, change, or occurrence that has, or is reasonably likely to have, a
materially adverse effect on (i) the business, financial condition or results of
operations of such entity and its Subsidiaries taken as a whole, other than any
event, change or occurrence relating (u) to a worsening of current conditions
caused by acts of terrorism or war (whether or not declared) occurring after the
date of this Agreement, (v) to the economy or financial markets in general, (w)
in general to the industries in which such entity operates and not specifically
relating to (or having the effect of specifically relating to or having a
materially disproportionate effect (relative to most other industry
participants) on) such entity, (x) to the announcement of the transactions
contemplated by this Agreement, (y) absent any other change, to movement in the
share price of either party, or (z) with respect to NetGenesis, (1) to a
failure, absent any other change, to achieve any particular revenue or operating
income level or (2) to actions taken by NetGenesis at the request of or with the
approval of SPSS, or (ii) the ability of such entity to consummate the
transactions contemplated by this Agreement. All references to Material Adverse
Effect on SPSS or its Subsidiaries contained in this Agreement shall be deemed
to refer solely to SPSS and its Subsidiaries without including its ownership of
NetGenesis and its Subsidiaries after the Merger.
(m) "the other party" means, with respect to NetGenesis, SPSS and
means, with respect to SPSS, NetGenesis.
(n) "Person" means an individual, corporation, limited liability
company, partnership, association, trust, unincorporated organization, other
entity or group (as defined in the Exchange Act).
(o) "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
(p) "Subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or unincorporated, (i)
of which such party or any other Subsidiary of such party is a general partner
(excluding partnerships, the general partnership interests of which held by such
party or any Subsidiary of such party do not have a majority of the voting
interests in such partnership) or (ii) at least a majority of the securities or
other interests of which having by their terms ordinary voting power to elect a
majority of the Board of Directors or others performing similar functions with
respect to such corporation or other organization is directly or indirectly
owned or controlled by such party or by any one or more of its Subsidiaries, or
by such party and one or more of its Subsidiaries.
(q) "Superior Proposal" means with respect to NetGenesis, a
written proposal made by a Person other than SPSS which is for (I) (i) a merger,
reorganization, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
NetGenesis, (ii) a sale, lease, exchange, transfer or other disposition of all
of the assets of NetGenesis and its Subsidiaries, taken as a whole, in a single
transaction or a series of related transactions, or (iii) the acquisition,
directly or indirectly, by a Person of beneficial ownership of all of the common
stock of NetGenesis whether by merger, consolidation, share exchange, business
combination, tender or exchange offer or otherwise and which is (II) otherwise
on terms which the Board of Directors of NetGenesis in good faith concludes
(after consultation with its financial advisors and outside counsel), taking
into account,
45
among other things, all legal, financial, regulatory and other aspects of the
proposal, the Person making the proposal, and the likelihood of the consummation
of the transaction contemplated by such proposal, would, if consummated, result
in a transaction that is more favorable to its shareholders (in their capacities
as shareholders), from a financial point of view, than the transactions
contemplated by this Agreement.
46
IN WITNESS WHEREOF, SPSS, Merger Sub and NetGenesis have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
SPSS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President and Chief Executive Officer
RED SOX ACQUISITION CORP.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President
NETGENESIS CORP.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------
Title: CEO
-----------------------------------
