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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) November 29, 1999
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SPSS Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 33-64732 36-2815480
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
233 South Wacker Drive, Chicago, Illinois 60606
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(Address of Principal Executive Offices) (Zip Code)
(312) 651-3000
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS
On November 29, 1999, SPSS Inc. acquired 100% of the outstanding
capital shares of Vento Software, Inc., a Florida corporation, from the
shareholders of Vento (the "Shareholders"), for 546,060 shares of SPSS common
stock, $.01 par value per share, valued at approximately $12.3 million. The
acquisition, accounted for as a pooling of interests, occurred pursuant to the
Stock Acquisition Agreement between SPSS, Vento and the Shareholders dated as of
November 29, 1999. Vento is a leader in providing business performance
management solutions for business executives in the telecommunications, banking,
health care and retail industries.
The purchase price for the acquisition of Vento was established through
negotiations between SPSS and Vento.
Other than the transactions included in, or contemplated by the
acquisition agreement, there are no material relationships between Vento and
SPSS or SPSS' affiliates, or any director or officer of SPSS, or any associate
of any such director or officer.
The foregoing description of the acquisition is qualified in its
entirety by reference to the acquisition agreement filed as Exhibit 2.1 hereto
and incorporated by this reference.
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ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) The following Exhibits to this Form 8-K are attached hereto:
Exhibit
Number Description of Document
2.1 Stock Acquisition Agreement by and among SPSS Inc., Vento
Software, Inc. and David Blyer, John Gomez and John
Pappajohn, dated as of November 29, 1999, together with a
list briefly identifying the contents of omitted
schedules.
99.1 Press Release of SPSS Inc., issued November 30, 1999,
announcing acquisition of Vento Software, Inc. by SPSS
Inc.
SPSS agrees to furnish supplementally a copy of any omitted schedule to the
Agreement to the Securities and Exchange Commission upon request.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
SPSS has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
SPSS Inc.
Date: December 10, 1999 By: /s/ Robert Brinkmann
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Robert Brinkmann
Assistant Secretary and Controller
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Exhibit 2.1
EXECUTION COPY
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STOCK ACQUISITION AGREEMENT
By and Among
SPSS INC.,
VENTO SOFTWARE, INC.
and
DAVID BLYER, JOHN GOMEZ and JOHN PAPPAJOHN
Dated as of November 29, 1999
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================================================================================
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STOCK ACQUISITION AGREEMENT
THIS STOCK ACQUISITION AGREEMENT is entered into and dated as of
November 29, 1999, (the "Agreement"), by and among SPSS INC., a Delaware
corporation, or its designee ("SPSS"), and VENTO SOFTWARE, INC., a Florida
corporation ("Vento"), DAVID BLYER, an individual having an address at 3610 32
Avenue, Hollywood, FL 33021, JOHN GOMEZ, an individual having an address at 1726
Espanola Drive, Miami, FL 33133 and JOHN PAPPAJOHN, an individual having an
address at 2116 Financial Center, Des Moines, IA 50309 (David Blyer, John Gomez
and John Pappajohn are hereinafter individually referred to as a "Shareholder"
and collectively referred to as the "Shareholders").
W I T N E S S E T H:
WHEREAS, Vento is engaged in the business of developing certain
software products and rendering related consulting services;
WHEREAS, the respective Boards of Directors of each of Vento and SPSS
have determined that it is advisable and for the benefit of their corporations
and their respective shareholders that Vento be acquired by SPSS by means of the
acquisition from the Shareholders by SPSS of all of the outstanding capital
shares of Vento, $1.00 par value per share (the "Shares"), in exchange for
shares of common stock $.01 par value per share of SPSS (the "Common Stock"),
pursuant to the terms and conditions set forth herein (the "Acquisition");
WHEREAS, the Shareholders own of record and beneficially all of the
issued and outstanding Shares;
WHEREAS, for federal income tax purposes, it is intended that this
transaction qualify as a tax-free reorganization under the provisions of Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, for accounting purposes, it is intended that this transaction
be accounted for as a "pooling of interests".
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained herein, the receipt and sufficiency of which are hereby
acknowledged, and in reliance upon the representations and warranties contained
herein, the parties hereto agree as follows:
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ARTICLE I
TERMS OF PURCHASE AND SALE
1.1 Purchase and Sale of the Shares. Subject to the terms and
conditions contained in this Agreement, on the Closing Date (as hereinafter
defined), the Shareholders shall sell, assign, transfer and deliver the Shares
to SPSS, and SPSS shall purchase the Shares from the Shareholders, for an
aggregate purchase price consisting of the items set forth in Section 1.3 hereof
(the "Purchase Price") payable pursuant to the terms provided in Section 1.3
hereof.
1.2 Closing. Subject to the terms and conditions of this Agreement,
the closing of the transactions contemplated hereby (the "Closing") shall take
place at the offices of Ross & Hardies, Chicago, Illinois, at 9:00 a.m., Central
Daylight Time, on or before November 30, 1999 or such other place or time as the
parties may mutually agree (the "Closing Date").
1.3 Payment of Purchase Price. Upon satisfaction of all the terms and
conditions set forth in Article XI, Article XII and Article XIII hereof, on the
Closing Date SPSS shall deliver the Purchase Price consisting of 546,060 shares
of SPSS Common Stock (hereinafter referred to as the "Total Shares" or the
"Acquisition Stock") to be paid as follows (a) the Shareholders shall receive an
aggregate of 90% of the Total Shares to be allocated among the Shareholders as
set forth in Schedule 1.3 hereof, and (b) 10% of the Total Shares (the "Escrowed
Shares") shall be held in escrow in accordance with Article III hereof and the
Stock Pledge and Escrow Agreement referred to therein. Only whole shares of SPSS
Common Stock will be issued in connection with this Agreement. In lieu of
fractional shares, each Shareholder otherwise entitled to a fractional share of
SPSS Common Stock will be paid in cash an amount equal to the amount of such
fraction multiplied by the closing price of SPSS Common Stock three trading days
prior to the Closing Date.
1.4 Tax and Accounting. The parties hereto shall each use their
commercially reasonable, good faith efforts to cause the transactions
contemplated hereunder to be treated as (i) a tax-free reorganization within the
meaning of Section 368(a)(1)(B) of the Code, and (ii) to qualify for accounting
treatment as a pooling of interests.
ARTICLE II
INTENTIONALLY OMITTED
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ARTICLE III
ESCROW
3.1 Escrow. At Closing, SPSS shall cause to be issued, in the name of
each Shareholder newly issued shares of SPSS Common Stock in accordance with the
provisions of Schedule 1.3. The Escrow Agent (as defined in the Stock Pledge and
Escrow Agreement to be entered into between the parties hereto, a copy of which
is attached hereto as Exhibit A (the "Escrow Agreement")) will hold in escrow
for the Shareholders' account, in the respective amounts set forth on Schedule
1.3, the Escrowed Shares, together with stock powers duly executed in blank
attached, in good form for delivery. The Escrow Agent will hold the Escrowed
Shares subject to the terms and conditions of Section 3.2 of this Agreement and
the terms and conditions of the Escrow Agreement.
3.2 Escrowed Shares. Upon the Closing Date, the Shareholders shall
pledge and grant a first priority security interest in the Escrowed Shares to
SPSS as collateral to satisfy each respective Shareholder's pro rata liability
for any post-Closing claims for indemnity under this Agreement, and will enter
into the Escrow Agreement. The number of Escrowed Shares, if any, remaining
after any retention made in accordance with this Agreement and the Escrow
Agreement will be delivered to the Shareholders in amounts proportionate to each
Shareholder's respective interest in the Escrowed Shares, promptly after
delivery to SPSS of SPSS's year-end audited financial statements for its fiscal
year ending December 31, 1999, by SPSS's outside auditors (the "Audit Release
Date"), except for the number of such Escrowed Shares then subject to a bona
fide dispute over which party is entitled to such Escrowed Shares, which shares
will continue to be held by the Escrow Agent or otherwise in accordance with the
terms of the Escrow Agreement.
ARTICLE IV
SECURITIES MATTERS
4.1 Registration of SPSS Common Stock.
(a) SPSS shall prepare and file with the SEC as soon as
practicable (but in no event later than 90 days after the Closing) a
registration statement on Form S-3 (together with all amendments and supplements
to any such registration statement, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such registration statement, the "Registration Statement") under the Securities
Act of 1933, and the rules and regulations promulgated thereunder (the "1933
Act" or the "Act"), for the registration (the "Registration") of the secondary
offering of the Total Shares for the account of the Shareholders. The contents
of the Registration Statement shall be subject to review and approval of the
Shareholders prior to any filing thereof with the SEC, provided, however, that
the aforesaid 90 day period shall be increased for such time as may be
reasonably necessary to accommodate any such review by the Shareholders which is
not complete within 10 days of the Shareholders' receipt of the Registration
Statement for review. Failure of the Shareholders to notify SPSS of their
approval or
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disapproval of the Registration Statement within 10 days of receipt thereof for
review shall be deemed approval. SPSS expects to have published financial
results, covering at least thirty (30) days of the combined operations of SPSS
and Vento following the Acquisition, not later than March 30, 2000. SPSS shall
use all reasonable efforts to have the Registration declared effective by the
SEC promptly after audited financial results covering at least thirty (30) days
of the combined operations of SPSS and Vento following the Acquisition have been
publicly released by SPSS. Simultaneously with the filing of the Registration
Statement, SPSS will request acceleration of the Effective Date of the
Registration Statement to the earliest practicable date in accordance with Rule
461 promulgated under the Securities Act of 1933. SPSS shall take such steps as
are reasonably required to register such SPSS Common Stock for sale on a delayed
or continuous basis under Rule 415 of the 1933 Act and, provided that Form S-3
shall be available to SPSS for the Registration, to keep such Registration
Statement continuously effective, current and available for use by the
Shareholders for a period of twenty-four (24) months following the date of
effectiveness, or such shorter period that will terminate when all of the Total
Shares have been sold by the Shareholders (the "Trading Period"). While the
Registration Statement on Form S-3 remains in effect, SPSS may at any time
deliver to the Shareholders written notice to the effect that sales may not be
effected under the Registration Statement for a period of time (the "Blackout
Period") because of the existence of material facts not disclosed or
incorporated by reference in such Registration Statement and in the then-current
prospectus included therein; upon receipt of any such notice, the Shareholders
shall refrain from selling any shares of SPSS Common Stock under such
Registration Statement until they have received notice from SPSS to the effect
that such sales may then be effected. In no event shall the Blackout Period be
greater than any similar period of time during which SPSS restricts any of its
employees from effecting sales in SPSS Common Stock because of the existence of
material facts not disclosed or incorporated by reference in any then-effective
registration statement and in the then-current prospectus included therein or
otherwise not publicly disclosed. SPSS shall promptly update such Registration
Statement and the prospectus included therein in order to permit the shares of
SPSS Common Stock to be sold, and the Trading Period shall automatically be
extended by the aggregate number of days during which the Shareholders were
instructed to refrain from selling shares of SPSS Common Stock during all
Blackout Periods.
(b) The Shareholders shall cooperate with SPSS in connection with
the Registration and shall provide such information and execute such documents
as SPSS shall reasonably request in connection with the Registration. The
Shareholders shall, to the extent required by Horkey & Associates PA ("Horkey"),
give their approval to Horkey's consent to the inclusion in the Registration
Statement of Horkey's report, and to that entity's assistance in preparing
reconciliations in accordance with generally accepted accounting principles, as
necessary.
(c) SPSS shall not grant to any holder of shares of SPSS Common
Stock registration rights which interfere with the rights of the Shareholders
and the obligations of SPSS under this Article IV.
4.2 Sales of SPSS Common Stock by the Shareholders. If at any time
prior to the effectiveness of the Registration Statement any Shareholder elects
to sell all or any portion of the
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Total Shares, such Shareholder shall conduct such sales only through registered
securities brokers ("Brokers"). The immediately preceding sentence shall not
apply, however, to any gifts or transfers by Shareholders of any portion of the
Total Shares to their respective family members or into trusts for the benefit
of the respective Shareholders, their respective family members or otherwise for
estate planning purposes generally, nor with respect to any sale or transfer of
any or all of the Total Shares to a third party making a cash, tender, or
exchange offer in compliance with Regulations 14D and E under the Securities
Exchange Act of 1934, as amended (the "Exchange Act" or the "1934 Act")
following the filing with the SEC, in compliance with the Exchange Act, by SPSS
of a Recommendation Statement on Schedule 14D-9 pursuant to which SPSS
affirmatively recommends to the SPSS shareholders the acceptance of such cash,
tender or exchange offer.
4.3 Registration Expenses. SPSS shall be responsible for and shall pay
all fees, costs and expenses incurred by it relating to the Registration,
including without limitation, all SEC and securities exchange, NASDAQ
registration and filing fees, and all fees and expenses of compliance by SPSS
with the federal securities laws or any applicable state blue sky laws, but not
including (i) any fees and expenses of Shareholders' counsel or otherwise
incurred by the Shareholders, and (ii) underwriters' fees or expenses, broker's
costs, commissions and other similar disposition costs associated with the SPSS
Common Stock owned by any Shareholder.
4.4 Restricted Stock. Vento has advised the Shareholders, and the
Shareholders understand and agree, as follows:
(a) That the Total Shares are not currently subject to a
registration statement under the Act, and are issued pursuant to exemptions from
registration under the Act which exemptions depend, among other things, on the
bona fide nature of their investment intent.
(b) That they shall not transfer the Total Shares except in
compliance with the provisions of the Act. Any proposed transferee of any of the
Total Shares shall agree to take and hold such securities upon the conditions
set forth in Section 4.4(c) hereof.
(c) Until such time as the Total Shares may be sold under Rule
144(k), each certificate representing any of such Total Shares shall be stamped
or otherwise imprinted with a legend in substantially the following form (in
addition to any legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT UNDER AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933.
SUCH SHARES MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
SAID ACT OR AN EXEMPTION THEREFROM OR IN CONTRAVENTION
OF THE AGREEMENT COVERING THE
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PURCHASE OF THESE SHARES AND RESTRICTING THEIR TRANSFER.
COPIES OF THE AGREEMENT MAY BE OBTAINED AT NO COST BY
WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS
CERTIFICATE TO THE SECRETARY OF THE COMPANY AT ITS
PRINCIPAL OFFICE.
When the Total Shares may be sold under the circumstances described in Rule
144(k) (or any successor rule or regulation), SPSS will, upon request of any of
the Shareholders, cause SPSS's transfer agent to exchange the share certificates
legended as set forth above for unlegended share certificates.
(d) Unless a registration statement under the Act covering
transactions in the SPSS Common Stock to be received by the Shareholders
pursuant to this Agreement has been declared effective by the SEC and such
registration statement remains effective at the time of transfer, each holder of
shares of SPSS Common Stock to be received by the Shareholders pursuant to this
Agreement shall comply in all respects with the provisions of this Section 4.4.
Prior to any proposed transfer of any such securities, the holder thereof shall
give written notice to SPSS of such holder's intention to effect such transfer
and shall comply with the requirements set forth in the balance of this section.
Each such notice shall describe the manner and circumstances of the proposed
transfer in reasonable detail, and shall be accompanied by (i) a written opinion
of legal counsel who shall be reasonably satisfactory to SPSS, addressed to
SPSS, and reasonably satisfactory in form and substance to SPSS's counsel, to
the effect that the proposed transfer of such securities may be effected without
registration under the 1933 Act, (ii) a "no action" letter from the SEC to the
effect that the distribution of such securities without registration will not
result in a recommendation by the staff of the SEC that action be taken with
respect thereto, or (iii) such other showing satisfactory to SPSS and its
counsel that the proposed transfer of such securities may be effected without
registration under the 1933 Act, whereupon the holder of such securities shall
be entitled to transfer such securities in accordance with the terms of the
notice delivered by the holder to SPSS.
4.5 Indemnification. In the event any SPSS Common Stock held by a
Shareholder is included in a registration statement under this Article IV:
(a) SPSS will indemnify and hold harmless such Shareholder, any
underwriter (as defined in the Act) for such Shareholder and each person, if
any, who controls such Shareholder or underwriter within the meaning of the Act
or the 1934 Act against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively a "Violation"): (i)
any untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by SPSS of the Act, the 1934 Act,
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any state securities law or any rule or regulation promulgated under the Act,
the 1934 Act or any state securities law; and SPSS will pay to each such
Shareholder, underwriter or controlling person, any and all legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this subsection 4.5(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability, or
action if such settlement is effected without the consent of SPSS, which consent
shall not be unreasonably withheld or delayed, nor shall SPSS be liable in any
such case for any such loss, claim, damage, liability, or action to the extent
that it arises out of or is based upon a Violation which occurs in reliance upon
and in conformity with written information furnished by such Shareholder or any
controlling person of such Shareholder expressly for use in connection with such
registration.
(b) Such Shareholder will indemnify and hold harmless SPSS, each
of its directors, each of its officers who has signed the registration
statement, each person, if any, who controls SPSS within the meaning of the Act,
any underwriter, and any controlling person of any such underwriter, against any
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Shareholder expressly for use in connection with such registration, and such
Shareholder will pay, as incurred, any legal or other expenses reasonably
incurred by any person intended to be indemnified pursuant to this subsection
4.5(b), in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this subsection 4.5(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such Shareholder, which consent
shall not be unreasonably withheld or delayed; provided, that, in no event shall
any indemnity under this subsection 4.5(b) exceed the lesser of that
Shareholder's pro rata share of the Cap (hereinafter defined) or the gross
proceeds from the offering of the shares of SPSS Common Stock received by such
Shareholder.
(c) Promptly after receipt by an indemnified party under this
Section 4.5 of notice of any claim, demand or the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this Section
4.5, deliver to the indemnifying party a written notice of the claim, demand or
action and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party (together with all other indemnified parties which may be represented
without conflict by one counsel) shall have the right to retain one separate
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to a conflict of interests between
such indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver
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written notice to the indemnifying party within a reasonable time of receipt by
the indemnified party of notice of such claim, demand or commencement of any
such action, if prejudicial to its ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party under this
Section 4.5.
(d) If the indemnification provided for in this Section 4.5 from
the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall, subject to Section 14.2(f), contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified party in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
faults of such indemnifying party and indemnified party shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include any fees, charges or expenses (including fees, disbursements
and other charges of legal counsel) reasonably incurred by such party in
connection with any investigation or proceeding. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person.
4.6 Additional Obligations of SPSS. With respect to any registration
hereunder, SPSS shall:
(a) furnish to the Shareholders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of shares of SPSS Common Stock owned by
them;
(b) use reasonable efforts to qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably appropriate for the distribution of the
securities covered by the registration statement;
(c) notify NASDAQ of the issuance of the shares of SPSS Common
Stock covered by such registration statement; and
(d) notify each Shareholder of shares of SPSS Common Stock under
such registration statement as promptly as possible, at any time when a
prospectus relating thereto is required to be delivered under the Act, of the
happening of any event of which SPSS has knowledge as a result of which the
prospectus contained in such registration statement, as then in effect, includes
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an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing.
4.7 Reports Under the Exchange Act. With a view to making available to
the Shareholders the benefits of Rule 144 promulgated under the Act and any
other rule or regulation of the SEC that may at any time permit a Shareholder to
sell securities of SPSS to the public without registration, SPSS agrees to use
its reasonable efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times;
(b) file with the SEC in a timely manner all reports and other
documents required of SPSS under the Act and the Exchange Act; and
(c) furnish to any Shareholder forthwith upon request a written
statement by SPSS that it has complied with the reporting requirements of Rule
144 and of the Act and the Exchange Act, a copy of the most recent annual or
quarterly report of SPSS, and such other reports and documents so filed by SPSS
as may be reasonably requested in availing any Shareholder of any rule or
regulation of the SEC permitting the selling of any securities of SPSS held by
it without registration.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF VENTO
AND THE SHAREHOLDERS
Vento, David Blyer and John Gomez, jointly and severally, and John
Pappajohn, severally (and not jointly), represent and warrant to SPSS as
follows:
5.1 Organization and Qualification. (a) Vento is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida and has the corporate power and authority to enter into this Agreement,
to consummate the transactions contemplated hereby, to own or lease the
properties and other assets which it presently owns or leases and to carry on
its business as presently conducted.
(b) The copy of the Articles of Incorporation, and all amendments
thereto, of Vento, as certified by the Secretary of State of the State of
Florida, and of the By-laws, as amended to date, of Vento, as certified by its
Secretary, being delivered herewith to SPSS, are true, complete and correct
copies as amended and presently in effect. All minutes and consents of the
shareholders and directors of Vento are contained in the minute book of Vento
and said minute book has been furnished to SPSS for examination at a reasonable
time prior to the Closing. No minutes or consents
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have been included in such minute books since such examination by SPSS which
have not heretofore been furnished to SPSS and no corporate action not reflected
in said minute books has been taken.
(c) Except as set forth in that certain letter dated as of the
date of this Agreement from Vento to SPSS (the "Letter"), Vento is duly licensed
or qualified to do business as a foreign corporation, and is in good standing,
in every domestic and foreign jurisdiction in which Vento is required to be so
licensed or qualified, except where the failure to be so qualified or licensed
would not have a materially adverse effect on the business of Vento.
5.2 Authority. Vento and the Shareholders, as appropriate, have full
power, capacity and authority (corporate or otherwise) to execute and deliver
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 and validly authorized and
approved by all necessary action on the part of each of the Vento Shareholders
and the Board of Directors of Vento and no other proceedings (corporate or
otherwise) on the part of any of the Vento Shareholders or Vento are necessary
to authorize this Agreement or to consummate the transactions contemplated
hereby. This Agreement and the other agreements contemplated by this Agreement
have been duly and validly executed and delivered by each of the Vento
Shareholders and Vento and constitute legal, valid and binding agreements of
Vento and the Vento Shareholders, except to the extent that public policy may
limit the enforceability of Section 4.5.
5.3 Capitalization. The entire authorized capital stock of Vento and
the number of Shares thereof which are issued and outstanding are as follows:
================================================================================
NUMBER OF NUMBER
AUTHORIZED SHARES ISSUED AND
OF VENTO CLASS OUTSTANDING
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1,000 Common 1,000
================================================================================
All of the issued and outstanding Shares of Vento's capital stock are owned of
record and beneficially by the Shareholders in the respective amounts set forth
in Schedule 5.3 hereto. The Shares are subject to no restrictions on
transferability other than restrictions imposed by the 1933 Act, and applicable
state securities laws. All of the outstanding Shares of capital stock of Vento
are duly authorized and validly issued and outstanding, fully paid and
non-assessable, and were not issued in violation of any preemptive rights. There
are no Shares of capital stock in treasury, and there are no Shares reserved for
issuance. There are no outstanding options, warrants, conversion or other rights
to acquire from any of the Shareholders or Vento, or any plans, contracts or
commitments providing for the issuance of, or the granting of, rights by any of
the Shareholders or Vento to acquire: (i) any capital stock of Vento (whether
issued or unissued) or (ii) any securities convertible into or exchangeable for
any capital stock of Vento. There are no agreements or understandings with
respect to the voting, holding or selling of any Shares of capital stock of
Vento, or any contractual obligations of Vento or
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any of its Shareholders with respect to Vento's capital stock. There are no
voting trusts or proxies currently in effect with respect to the Shares. No
person has any right to require Vento to register any of its securities under
the 1933 Act.
5.4 Title to Shares. Subject to Article IX of Vento's Articles of
Incorporation, the Shareholders own and have good and marketable title to the
Shares, free and clear of any lien, pledge, claim, encumbrance, restriction or
right of any third party of any kind. On the Closing Date, SPSS will acquire
good and marketable title to the Shares free and clear as aforesaid excepting,
however, any of the foregoing set forth in Article IX of Vento's Articles of
Incorporation. The Shares represent the only equity interest of the Shareholders
in Vento.
5.5 Consents and Approvals. Except as set forth in Schedule 5.5
hereto, there is no authorization, consent, order or approval of, or notice to
or filing with, any individual or entity required to be obtained or given in
order for Vento and the Shareholders to consummate the transactions contemplated
hereby and fully perform their respective obligations hereunder.
5.6 Absence of Conflicts. The execution, delivery and performance by
Vento and the Shareholders of this Agreement and the consummation by Vento and
the Shareholders of the transactions contemplated hereby will not, with or
without the giving of notice or lapse of time or both, (i) violate any provision
of law, statute, rule or regulation to which either Vento or the Shareholders is
or was subject, (ii) violate any order, judgment or decree which is or was
applicable to either Vento or the Shareholders; (iii) conflict with or result in
a breach or default under any term or condition of the Articles of Incorporation
or Bylaws of Vento, or any agreement or other instrument to which either Vento
or the Shareholders are, or any of them is, a party or by which either of them
is bound, or (iv) cause, or give any person grounds to cause, the maturity of
any debt, liability or obligation of Vento to be accelerated or increase any
such liability or obligation.
5.7 Financial Statements: Accounts Receivable. Vento has previously
delivered to SPSS true and correct copies of the audited balance sheets of Vento
as of May 31, 1999 and the related statements of income, statements of retained
earnings and statements of changes in financial position for the periods ending
on May 31, 1999, and the unaudited balance sheet of Vento at October 31, 1999
and related statement of income for the period June 1, 1999 through October 31,
1999 (collectively, the "Financial Statements"). Except as disclosed on Schedule
5.7, the Financial Statements (i) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis, are
correct and complete and are in accordance with the books and records of Vento,
(ii) present fairly in all material respects the financial position and
condition of Vento and the related results of operations as at the dates and for
the periods then ended and (iii) contain no material misstatements or omissions
which under generally accepted accounting principles would be required to be
disclosed for financial statement purposes.
Subject to applicable reserves for bad debts shown on Vento's latest
balance sheets included in the Financial Statements, as such reserves are
adjusted from the date thereof in the ordinary course of business, all accounts
and notes receivable reflected on the balance sheets are, and all accounts and
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notes receivable subsequently accruing to the Closing Date will be, (a) valid,
genuine and subsisting, (b) subject to no known defenses, setoffs or
counterclaims and (c) current and collectible.
5.8 Absence of Undisclosed Liabilities. Except as and to the extent
reserved for in the Financial Statements or as set forth in Schedule 5.8 hereto,
Vento has no liabilities or obligations, whether accrued, absolute or
contingent, determined or undetermined, known or unknown or whether due or to
become due (including, without limitation, obligations as guarantor) other than
those in the ordinary course of business since October 31, 1999, which have not
yet been accrued or booked. Except as set forth on Schedule 5.8, there is no
basis for the assertion of any claim or liability relating to the businesses of
Vento, and Vento is not aware of any occurrence or fact that has or might have
an adverse effect on the businesses of Vento. Except as disclosed in Schedule
5.8, as of the date of this Agreement, Vento has no outstanding debt to any bank
or other lender.
5.9 Absence of Certain Changes or Events. Except as set forth on
Schedule 5.9 hereto, since October 31, 1999, there has not been (a) any material
damage, destruction or casualty loss to the properties or assets of Vento
(whether covered by insurance or not) outside the ordinary course of business;
(b) any material adverse change in the business, assets, properties, operations,
prospects or financial condition of Vento, or any fact or condition which could
cause such a change, other than any change, fact or condition related solely to
the transactions contemplated hereby; (c) any entry into any transaction,
commitment or agreement (including, without limitation, any borrowing) in excess
of $10,000.00, or outside the ordinary course of business of Vento; (d) any
direct or indirect redemption, repurchase or other acquisition for value by
Vento of its capital stock or any agreement to take such action, or any
declaration, setting aside or payment of any dividend or other distribution in
cash, stock or property with respect to Vento's capital stock; (e) any increase
in the rate or terms of compensation payable or to become payable by Vento to
its directors, officers, employees, agents or independent contractors or any
increase in the rate or change in the terms of any employment agreement or
compensatory arrangement, or any changes in any bonus, severance, pension,
insurance or other employee benefit plan, or any other payment or benefit made
to or for any such director, officer, employee, agent or independent contractor;
(f) any sale, transfer or other disposition of any asset of Vento to any party,
including, without limitation, the Shareholders, except for payment of
obligations incurred, and sale of products, in the ordinary course of business
consistent with past practices; (g) any amendment or termination of any material
contract or agreement to which Vento is a party or any termination or waiver of
any other rights of value to the businesses of Vento; (h) any capital
expenditure for additions to property or equipment by Vento in excess of
$10,000.00; (i) any split, combination, exchange or reclassification of shares
of capital stock of Vento; (j) any issuance of capital stock of Vento or of
securities convertible into or rights to acquire any such capital stock; (k) any
failure by Vento to pay accounts payable or other obligations in the ordinary
course of business; (l) the incurrence of any obligations or liability (absolute
or contingent) or the making of any capital expenditure not in the ordinary
course of business or in excess of $10,000.00; (m) any pledge of any of the
assets or properties of Vento or any action or inaction which would subject any
such assets or properties to any lien, security interest, mortgage, pledge,
claim, charge or other encumbrance of any kind; (n) the incurrence of any
liability or obligation by Vento, except for liabilities incurred in the
ordinary course of business; (o) any actual or, to the best of Vento's and the
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Shareholders' knowledge, threatened termination or cancellation of, or
modification or change in, any business relationship with any customer or
customers of Vento or other agreement or arrangement involving or related to the
assets or properties of the businesses of Vento; (p) any cancellation of a debt
due to or a claim of Vento, other than by payment or other satisfaction; (q)
except as set forth in the Letter, any failure of Vento to perform under, or any
default by Vento under, any agreement, obligation or covenant to which it is or
was bound; (r) any change in any method of accounting or accounting practice,
principle or procedure; (s) any action or inaction which might cause Vento to
incur any tax liability out of the ordinary course of business; (t) any other
event or condition of any character which materially and adversely affects the
businesses of Vento; or (u) any agreement, whether in writing or otherwise, to
take any action described in this Section 5.9.
5.10 Investment in the Common Stock.
(a) Vento has informed the Shareholders of the provisions of Article
IV and (i) that the Acquisition Shares they are acquiring must be held by them
indefinitely, unless an effective 1933 Act registration statement or exemption
from registration is available; (ii) of the provisions of Rule 144 and Rule 144A
promulgated under the 1933 Act, which rules permit limited resale of restricted
securities subject to the satisfaction of certain conditions; (iii) that
restrictions upon the sale of SPSS Common Stock imposed by Federal and State
securities, blue sky and other similar laws may markedly affect the ability of
the Shareholders to liquidate their investment in the Acquisition Stock and that
the Shareholders have no recourse against SPSS for declines in the value of
their investment in the Acquisition Stock absent fraud or violations of the
Federal and State securities, blue sky and other similar laws on the part of
SPSS; and (iv) that the Acquisition Stock of SPSS being acquired pursuant to the
terms of this Agreement represents an investment in the business of SPSS, and
that SPSS has made no representations or warranties with respect to the future
business performance of SPSS or the price of its Common Stock.
(b) Vento has given to the Shareholders for their review the
information as described in Regulation 230.502(b)(2)(ii) promulgated under the
1933 Act and such other information as the Shareholders have deemed necessary to
make an informed decision to acquire the Acquisition Stock and have had an
opportunity to ask questions and receive answers concerning the operations,
business and financial condition of SPSS and all such questions have been
answered.
5.11 Real and Personal Property; Inventories. Schedule 5.11(a) hereto
correctly identifies (i) each lease or rental of real property held or paid by
Vento; and (ii) each parcel of real property, and each interest (other than such
leases or rentals) in real property, used the operations of the businesses of
Vento. Except as set forth in Schedule 5.11(a) hereto, (a) to the best of
Vento's and the Shareholders' knowledge, any structures described in Schedule
5.11(a) and Vento's use thereof conform in all material respects with all
applicable ordinances, requirements, regulations, zoning laws, restrictive
covenants, conditions and restrictions and do not encroach on property of
others, and are not encroached upon by structures of others; and (b) no claims,
charges or notice of violations have been filed, served, made or, to the best of
Vento's and the Shareholders' knowledge, threatened, orally or in writing,
against or relating to any such property or any of Vento's operations conducted
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at any such property (currently or in the past) as a result of (i) any violation
or alleged violation of any applicable ordinances, requirements, regulations,
zoning laws, restrictive covenants, conditions or restrictions, or (ii) as a
result of any encroachment on the property of others. Schedule 5.11(b) hereto
describes all material tangible or intangible personal property and assets of
Vento. Vento has good and marketable title to, and is in possession of or has
control over, all of its real and personal property, none of which is held under
or subject to any mortgage, pledge, lien, lease, encumbrance, conditional sales
contract or other security arrangement except to the extent described in
Schedule 5.11 (b) hereto. To the best of Vento's and the Shareholders'
knowledge, each item of such tangible personal property and assets is in good
working order or condition, reasonable wear and tear excepted.
5.12 Patents, Trademarks. Etc. Schedule 5.12 hereto contains an
accurate and complete description of all software products now sold by Vento and
all domestic and foreign patents (collectively, "Patents"), trademarks, service
marks, trademark registrations (collectively, "Marks"), logos, trade names,
assumed names, copyrights and copyright registrations and all applications
therefor (the Patents and Marks, together with all of the foregoing are
hereinafter collectively referred to as the "Intellectual Property"), presently
owned or held by Vento or under which Vento owns or holds any license, or in
which Vento owns or holds any direct or indirect interest; and no others are
necessary for the conduct of the present businesses of Vento. Vento has the full
right, power and authority to transfer the rights, titles and interests granted
herein, and is the legal and beneficial owner of all right, title and interest
in and to the Intellectual Property, having good title thereto, free and clear
of any and all mortgages, liens, security interests and charges, and no other
person or entity has any claims of ownership in the Intellectual Property,
except as to Patents and Marks as to which, to Vento's and the Shareholders'
actual knowledge, no other person or entity has any claims of ownership therein.
Except as described in Schedule 5.12, Vento has not previously assigned,
transferred, conveyed or otherwise encumbered any right, title or interest in
the Intellectual Property, and has not granted to any third party any license to
use the Intellectual Property in any manner, or any covenant not to sue for any
such use of the Intellectual Property. To the extent any Intellectual Property,
and the right, title and interest therein has not yet been assigned by any
person or entity to Vento, Vento shall cause the assignment thereof to Vento
prior to Closing, at the Shareholders' sole cost and expense. The Intellectual
Property is valid and in good standing. The Patents and Marks, to Vento's and
the Shareholders' actual knowledge, are not the subject of any challenge. The
other Intellectual Property is not the subject of any challenge. Except as set
forth on Schedule 5.12, no intellectual property other than the Intellectual
Property is necessary for the conduct of the present businesses of Vento. None
of the products manufactured, distributed or sold by Vento, nor any of the
Intellectual Property or other intellectual property (including without
limitation, technology, inventions, processes, designs, formulae, know-how,
trade secrets) (collectively, with the Intellectual Property, the "Intellectual
Assets"), or any of Vento's activities, conflict with, infringe or otherwise
violate any copyrights, or, to Vento's and the Shareholders' actual knowledge,
any patents, trademarks or service marks of any individual or entity, nor
require payments to be made to any person (other than any fees payable for
maintenance of those U.S. or state registrations set forth in Schedule 5.12).
Except for the statutory landlord's lien relating to Vento's office lease set
forth on Schedule 5.11(a) and those rights and licenses granted by Vento under
the various contracts set forth
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in Schedules 5.14(a) and 5.15 regarding that part of the Intellectual Assets
comprising copyrights arising under U.S. Copyright Law and U.S. Copyright
Registrations, or trade secrets, Vento has the sole and exclusive right to use
and the right and power to sell the Intellectual Assets. Vento has taken
reasonable measures to maintain and protect the Intellectual Assets. With regard
to that portion of the Intellectual Assets comprising Marks, logos, tradenames
or assumed names, subject to the statutory landlord's lien relating to Vento's
office lease set forth on Schedule 5.11(a) and any rights or licenses granted
under those third party contracts listed in Schedules 5.14(a) and 5.15 hereto,
and as to Patents (if any), to the best of Vento's and the Shareholders' actual
knowledge, Vento has the sole and exclusive right to use, has the right and
power to sell, and has taken reasonable measures to maintain and protect those
components of the Intellectual Assets. No claims have been asserted by any
individual or entity with respect to any Intellectual Assets or challenging or
questioning the validity or effectiveness of any license or agreement with
respect thereto, and, to the best knowledge of Vento, there is no valid basis
for any such claim. Vento is not using confidential information or trade secrets
of any former employer of any past or present employee of Vento. The items
described in Schedule 5.12 and the other Intellectual Assets are adequate to
conduct the businesses of Vento as presently conducted. Subject to those matters
set forth in this Section 5.12 and the Schedules referred to herein, upon
consummation of the transaction contemplated hereby, SPSS will acquire good and
marketable title to all of the Intellectual Assets and the goodwill associated
therewith.
Notwithstanding anything contained herein to the contrary, other than
the current state or federal trademark or servicemark registrations explicitly
described on Schedule 5.12, Vento has not obtained registrations or made
application for registration of any other trademark or servicemark with any
state or federal governmental agency, department or authority or otherwise,
including, without limitation, the U.S. Patent and Trademark Office. Vento has
not obtained any U.S. Letters Patent or foreign patent rights, nor has it made
application for any of same. Vento has not conducted any investigation regarding
whether or not, or to what extent, any other person or entity has in any respect
established any common law rights to, or has obtained any state or federal
trademark or servicemark registrations for any trademark or servicemark which
may be the same as or similar to any of the Marks, logos, tradenames or assumed
names referred to on Schedule 5.12 and used by Vento as a source identifier for
its products or services. Vento has not made any investigation into whether any
products distributed by or through Vento infringe on any U.S. or foreign
patents. To date, Vento has not received any notice of any claim or demands
alleging that any Marks, logos, tradenames or assumed names used by Vento in the
conduct of its business infringe upon any trademark or servicemark or rights of
others, or that any product distributed by or through Vento infringes any U.S.
or foreign patent. Vento and the Shareholders have no actual knowledge that any
person or entity has, prior or subsequent to Vento's adoption and use of its
Marks, logos, tradenames or trade dress, adopted the use of any trademark,
servicemark, tradename, logo or trade dress identical or similar to any of
Vento's Marks, tradenames, logos or trade dress, whether in connection with
goods or services which are the same as or similar to any goods or services of
Vento or otherwise, or that any product distributed by or through Vento
infringes any third party U.S. or foreign patents.
5.13 Employees. All personnel, including employees, agents, consultants
and contractors, who have materially contributed to or materially participated
in the conception and development of
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the Intellectual Assets on behalf of Vento either (a) were at such time parties
to "work-for-hire" arrangements or agreements with Vento, in accordance with
applicable federal and state law, that has accorded Vento full, effective,
exclusive and original ownership of all intellectual property thereby arising,
or (b) have executed appropriate instruments of assignment, which are still in
full force and effect, in favor of Vento, as assignee, that have conveyed to
Vento full, effective and exclusive ownership of all intellectual property
thereby arising. Vento does not own or claim to own or have or claim to have any
right, license or interest, whether as a licensee, licensor or otherwise, in any
copyrights, patents, applications for copyrights or patents, trade secrets,
inventions, processes and designs or in any trademarks, service marks, trade
names, or applications for them, except as listed or described in Schedule 5.12.
To the best of Vento's and the Shareholders' knowledge, no employee of Vento is
in violation of (i) any term of any employment contract, any "work for hire"
arrangement or agreement, or any patent disclosure agreement or (ii) any other
contract or agreement, or any restrictive covenant relating to the rights of any
such employee to be employed by Vento or to use trade secrets or proprietary
information of others.
5.14 Contracts and Commitments.
(a) Except as set forth in Schedules 5.11(a), 5.14(a), 5.15, 5.24 and
5.33 hereto, Vento is not a party to any agreements, contracts, guarantees,
commitments, restrictions or instruments of any kind ("Contracts"). True and
correct copies of all Contracts listed on Schedules 5.11(a), 5.14(a), 5.15, 5.24
and 5.33 hereto have been made available to SPSS at a reasonable time prior to
Closing. To the best of Vento's and the Shareholders' knowledge and belief, all
of the Contracts are valid and binding obligations of Vento, enforceable in
accordance with their respective terms to the extent permitted by applicable
law, and are in full force and effect and complied with and no other party to
any of the Contracts is in default or breach thereof. Vento has not agreed with
any customer or distributor to make any variation in any such contract which
could have a material adverse effect on Vento's assets, properties, businesses,
financial condition or prospects.
(b) Vento has not given any power of attorney (whether revocable or
irrevocable) to any individual or entity.
(c) Except as set forth in item six of the Letter, Vento is not in
default, and, to the best of Vento's and the Shareholders' knowledge, there is
no basis for any valid claim of default, in any respect under any of the
Contracts.
5.15 Source Code. Except as set forth in Schedule 5.15, Vento owns all
rights, title and interest in and to the source codes for all of its software
products and has not distributed any copies of such source codes to any third
parties, and Vento has not agreed to pay to any individual or entity any
royalty, commission or other amount on account of sales of their software
products.
5.16 Licenses and Royalties. Except as set forth on Schedule 5.16
hereto, Vento is not a licensee under any license, including, without
limitation, licenses with respect to source codes used or to be used in Vento's
software products, and has no obligation to pay royalties to any third party
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in connection therewith. Vento has not granted to any individual or entity any
rights or security interests with respect to the source codes for Vento's
software products.
5.17 Adequacy of Documentation. Except as set forth in Schedule 5.17,
the technical documentation for Vento's products includes the source code,
system documentation, statements or principles of operation, and schematics for
all of the software products currently maintained or licensed by Vento, as well
as any pertinent commentary or explanation that may be necessary to render such
materials understandable and usable by a trained computer programmer familiar
with the relevant compilers, tools and platform (the "Technical Documentation").
5.18 Third-Party Components in Software Programs. Vento has validly and
effectively obtained the right and license to use, copy, modify and distribute
any third-party programming and materials contained in Vento's software products
and the Technical Documentation pursuant to licenses from third parties as set
forth in Schedule 5.18. Except as otherwise provided in Schedule 5.18, Vento's
software products and the Technical Documentation contains no other programming
or materials in which any third party may claim superior, joint or common
ownership, including any right or license, and, do not contain derivative works
of any programming or materials not owned in their entirety by Vento.
5.19 Third-Party Interests or Marketing Rights in Software Programs.
There are no contracts, agreements, licenses or other commitments or
arrangements in effect with respect to the development, marketing, distribution,
licensing, or promotion of Vento's software products or any other inventory, the
Technical Documentation, or Vento's Intellectual Assets with any independent
salesperson, distributor, sublicensor, or other remarketer or sales
organization, except for Contracts identified in Schedules 5.14 and 5.15 and
5.18.
5.20 No Virus Warranties. Except as set forth in Schedule 5.20, the
software products, as delivered to SPSS, shall be free of any passwords, keys,
security devices or trap doors, and any computer instructions (including, but
not limited to, computer instructions commonly referred to as Trojan Horses,
anomalies, worms, self-destruct mechanisms, or time/logic bombs) which are
intended to interfere with or frustrate the use of the software products, any
portion thereof, or other software or computer hardware, whether or not
currently in effect with respect to any copy of Vento's software products.
5.21 Software. Vento's software products, other than that currently
under development, will operate substantially in accordance with the
corresponding Technical Documentation.
5.22 Government Contracts. Vento does not have knowledge of any acts,
omissions or noncompliance with regard to any applicable public contracting
statute, regulation or contract requirement (whether express or incorporated by
reference) to any contracts relating to Vento, its businesses or any of its
assets with any Government Contract Party (as defined below) in either case that
have led to or could lead to (a) any material claim or dispute involving Vento,
its businesses, or any of its assets and any Government Contract Party or (b)
any suspension, debarment or contract
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termination, or proceeding related thereto. Vento has no knowledge of any act or
omission related to the marketing, licensing, or selling of any Vento software
product, or its business that has led to or could have any material adverse
affects on Vento's rights or on any of its assets. All of Vento's development of
technical data and computer software was developed exclusively at private
expense. For purposes of this Section 5.22, the term "Government Contract Party"
means any independent or executive agency, division, subdivision, audit group or
procuring office of the federal government, including any prime contractor of
the federal government and any higher level subcontractor of a prime contractor
of the federal government, and including any employees or agents thereof, in
each case acting in such capacity.
5.23 Product Warranties and Liabilities. Vento has not given or made
any express or, to the best of Vento's and the Shareholders' knowledge, implied
warranties with respect to any products licensed, distributed, offered or sold
or services performed by Vento, except for the limited warranties stated in
those contracts, in the forms attached to or described in Schedule 5.14, with
modifications that, in the aggregate, would not have a material adverse effect
on the business, prospects or financial condition of Vento. There is no fact or
occurrence of any event forming the basis of any present or future claim against
Vento, whether or not fully covered by insurance, for liability on account of
products liability or on account of any express or implied product warranty,
except for warranty obligations and product returns in the ordinary course of
business and as set forth in Schedule 5.23.
5.24 Insurance. Schedule 5.24 hereto is a description of all insurance
policies held by Vento concerning its businesses, operations and properties,
true, complete and correct copies of which have been previously provided to
SPSS. Each of the insurance policies referred to in Schedule 5.24 is in force
and the premiums with respect thereto are fully paid through the dates indicated
thereon. No insurer has denied coverage or reserved rights for any claim made by
Vento or any other individual or entity under any insurance policies.
5.25 Litigation and Administrative Proceedings. Except as set forth in
Schedule 5.25 hereto, there is no claim, action, suit, proceeding or, to the
best of Vento's and the Shareholders' knowledge, investigation in any court or
before any governmental or regulatory authority pending or, to the best of
Vento's and the Shareholders' knowledge, threatened, against or affecting Vento
or which seeks to enjoin or obtain damages in respect of the transactions
contemplated hereby. Vento does not know nor have any reason to know of any
basis for any such claim, action, suit, proceeding or investigation. No claim,
action, suit, proceeding or investigation set forth in Schedule 5.25 could, if
adversely decided, have a material adverse effect on the business, properties,
condition (financial or otherwise) or prospects of Vento.
5.26 Tax Matters. For purposes of this Agreement:
(a) The term "Taxes" means all federal, state, local, foreign, and
other net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, lease, service, service use, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, property,
windfall profits, customs, duties or other taxes, fees, assessments, or charges
of any kind
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whatever, together with any interest and any penalties, additions to tax, or
additional amounts with respect thereto, and the term "Tax" means any one of the
foregoing Taxes;
(b) The term "Returns" means all returns, declarations, reports,
statements, and other documents required to be filed in respect of Taxes, and
the term "Return" means any one of the foregoing Returns;
(c) The term "Code" means the Internal Revenue Code of 1986, as
amended. All citations to the Code or to the regulations promulgated thereunder
shall include any amendments or any substitute or successor provisions thereto.
5.26.1 Corporation Matters. Vento has not qualified as an "S"
corporation as such term is defined in Section 1361(a)(1) of the Code.
5.26.2 All Returns Filed. All Returns required to be filed by or
on behalf of Vento on or before the Closing Date have been filed, or proper
extensions for the filing of such Returns have been filed, and such Returns are
complete and accurate and disclose all Taxes (and other charges) for the periods
covered thereby. Except as set forth in Schedule 5.26.2, no extension of time in
which to file any such Returns is currently in effect and there are not
outstanding agreements or waivers extending the statutory period of limitation
applicable to such Returns.
5.26.3 All Taxes Paid. All Taxes (and other charges) shown on such
Returns or otherwise required to be paid, and any deficiency assessments,
penalties, interest and other charges with respect thereto, have been paid, and
there is otherwise no current liability for any unpaid taxes (or other charges)
due in connection with such Returns or otherwise. There are no tax liens (other
than for taxes not yet due) on any of the assets or properties of Vento, and, to
the best knowledge of the Shareholders and Vento, no basis exists for the
imposition of any such liens.
5.26.4 Examinations, Etc. To the best of Vento's and the
Shareholders' knowledge, no federal, state, local, foreign or other Returns of
Vento for tax years that remain open under any applicable statute of limitations
have been examined by the IRS or other pertinent tax authorities and no
deficiencies have been asserted or assessments made as a result of examinations
(including all penalties and interest), and neither Vento nor the Shareholders
have received notice of any such assertion or assessment. Vento has not been
notified that any issues have been raised by (or are currently pending before)
the IRS or any other taxing authority in connection with any of the Returns
which could reasonably be expected to have a material adverse effect on the
financial condition of Vento, taken as a whole, if decided adversely to Vento,
nor to the best of Vento's or the Shareholder's knowledge are there any such
issues which have not been so raised but, if so raised by the IRS or any other
taxing authority in connection with any of the Returns could, in the aggregate,
reasonably be expected to have a material adverse effect on the financial
condition of Vento.
5.26.5 Withholding. Vento has withheld from its employees and
others (and timely remitted to the appropriate taxing authorities) proper and
accurate amounts for all periods in
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compliance with all tax withholding provisions of applicable federal, state,
foreign, local and other laws (including, without limitation, income,
withholding, social security, employment and other payroll taxes).
5.26.6 Foreign Person, Etc. No Shareholder is a "foreign person"
as defined in Section 1445(f)(3) of the Code. Vento does not have a permanent
establishment in any foreign country, as defined in the applicable tax treaty,
if any, between the United States and such foreign country. Vento is not, and
never has been, a United States real property holding corporation within the
meaning Section 897(c)(1)(A)(ii) of the Code and SPSS is not required to
withhold tax on the purchase of the Shares by reason of Section 1445 or any
other provisions of the Code. Vento has not participated in an international
boycott within the meaning of Section 999 of the Code. Vento has no foreign
assets.
5.26.7 Parachute Payments. Vento has not made, has not become
obligated to make nor will, as a result of any event connected with the
acquisition of Vento by SPSS or any other transaction contemplated herein, make
or become obligated to make any "excess parachute payment" as defined in Section
280G of the Code.
5.26.8 Accounting; Tax Attributes. None of the assets or
properties of Vento (a) is tax-exempt use property within the meaning of Section
168(h) of the Code, (b) directly or indirectly secures any debt the interest on
which is tax-exempt under Section 103(a) of the Code, or (c) is required to be
treated as property owned by another under the provisions of former Section
168(f)(8) of the Code. Vento has not agreed to make, nor is it required to make,
any adjustment under Section 481(a) of the Code. To the best knowledge of the
Shareholders and Vento, the basis of Vento in its assets is as set forth in its
financial and tax records. Vento is not a party to or bound by any tax
indemnity, tax sharing or tax allocation agreement.
5.26.9 Prior Consolidated Groups. Except as set forth on Schedule
5.26.9, Vento is not, and has never been, an includible corporation in an
affiliated group of corporations within the meaning of Section 1504 of the Code.
5.27 Compliance with Laws. Except as set forth in Schedule 5.27(i), to
the best of Vento's and the Shareholders' knowledge, Vento has not in the past
been nor is Vento presently in material violation of, in respect of operations,
real property, machinery, equipment, all other property, practices and all other
aspects of its businesses, any applicable law (whether statutory or otherwise),
rule, regulation, order, ordinance, judgment or decree of any governmental
authority (federal, state, local or otherwise) (collectively, "Laws"). Vento has
not received any notification of any asserted present or past failure of Vento
to comply with any of such Laws. "Material" for purposes of this Section 5.27
shall mean liability accruing prior to the Closing Date which, in the aggregate,
exceeds $25,000.00.
5.28 Environmental and Safety Matters. (a) Except as otherwise
disclosed in Schedule 5.28 hereto, (i) Vento has obtained all Environmental
Permits (as defined herein) that are required with
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respect to the business, operations and properties of Vento; (ii) to the best of
Vento's and the Shareholders' knowledge, Vento has been and is in compliance
with all terms and conditions of all Environmental Laws (as defined herein) and
Environmental Permits; (iii) Vento has not received any notice from a
governmental authority or third party of any violation of or potential liability
arising under any Environmental Law or Environmental Permit in connection with
the business of Vento or the operation thereof, nor is any such notice pending
nor to the best of Vento's and the Shareholders' knowledge, threatened; (iv) to
the best of Vento's and the Shareholders' knowledge, no underground or above
ground storage tanks are or have been located on the real properties described
in Schedule 5.11(a) attached hereto or previously owned or operated by Vento;
and (v) Vento is not aware of any generation, treatment, storage, transfer,
disposal, release or threatened release in, at, from or on such real properties
of toxic or hazardous substances by any current or previous owner or tenant of
such real properties. Vento has delivered to SPSS all environmental records and
material safety data sheets relating to its business and operations. Vento shall
permit SPSS and its agents access at all reasonable times to Vento's property
for the purpose of conducting a Phase I environmental audit thereof subject,
however, to any prohibitions or restrictions on any such activities imposed
under applicable leases.
(b) Except as set forth in Schedule 5.28, there is no condition or
any set of facts or circumstances that could give rise to an Environmental Claim
(as defined herein).
(c) Except as set forth in Schedule 5.28, to the best of the
Shareholders' and Vento's knowledge, there have been no releases of Hazardous
Material into the soil, surface water or ground water at its offices at 111 Park
Center Boulevard, Miami Florida.
(d) For purposes of this Agreement, the following terms shall have
the respective meanings set forth herein:
"Environmental Permit" shall mean any permit, license, approval or
other authorization with respect to the business of Vento or the operation
thereof under any applicable Environmental Law (as defined herein), including
laws, regulations or other requirements relating to emissions, discharges or
releases of Hazardous Material (as defined herein) into ambient air, surface
water, ground water, or land, or otherwise arising from the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of Hazardous Material by Vento or the employees, representatives,
contractors or actual agents of Vento.
"Environmental Claim" shall mean any action, lawsuit, claim or
proceeding relating to the business of Vento or its predecessors or their
respective subsidiaries or the operation thereof which seeks to impose
liability, for (i) violation of any Environmental Law, (ii) release of any
Hazardous Material, (iii) noise, (iv) pollution or contamination of the air,
surface water, groundwater or land; (v) solid, gaseous or liquid waste
generation, handling, treatment, storage, disposal or transportation; (vi)
exposure to hazardous or toxic substances; or (vii) the manufacture, processing,
distribution in commerce, use (by Vento or its predecessors or their respective
subsidiaries or the employees, representatives, contractors or actual agents of
any of such entities), or storage (by Vento
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or its predecessors or their respective subsidiaries or the employees,
representatives, contractors or actual agents of any of such entities) of
chemical substances. An "Environmental Claim" includes, but is not limited to, a
proceeding to issue, modify or terminate a permit or license, or to adopt or
amend a law or regulation to the extent that such a proceeding attempts to
redress violations of the applicable permit, license, law or regulation which
occurred on or prior to the Closing Date as alleged by any federal, state or
local executive, legislative, judicial regulatory or administrative agency,
board or authority.
"Hazardous Material" shall mean the following: (i) All "hazardous
substances," as such term is defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C.A. Sec. 9601(14);
(ii) all "hazardous wastes," as such term is defined in the Resource
Conservation and Recovery Act, 42 U.S.C.A. Sec. 6903(5); (iii) all materials
that are classified as hazardous or toxic under any Environmental Law, as
defined below; (iv) petroleum products, including gasoline, diesel fuel, fuel
oil, crude oil, and motor oil, and the constituents of those products; or (v)
medical wastes.
"Environmental Laws" shall mean, without limitation, the
following: the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C.A. Sec. 9601 et seq.); the Resource Conservation and Recovery Act
(42 U.S.C.A. Sec. 6901 et seq.); the Clean Water Act (33 U.S.C.A. Sec. 1251 et
seq.); the Clean Air Act (42 U.S.C.A. Sec. 7401 et seq.); the Toxic Substance
Control Act (15 U.S.C.A. Sec. 2601 et seq.); the Occupational Safety and Health
Act (29 U.S.C. 651 et seq.); and all other federal, state and local statutes and
ordinances pertaining to protection of the environment, health or safety, and
all amendments made to, and regulations promulgated under, the foregoing laws
effective at the time of Closing.
5.29 Employee Benefits.
5.29.1 Attached hereto as Schedule 5.29 is a written list of all
employee benefit plans relating to employee benefits with respect to which Vento
has incurred or may incur any future or contingent obligations, including,
without limitation, all plans, agreements or arrangements relating to deferred
compensation, pensions, profit sharing, retirement income or other benefits,
stock purchase, stock ownership and stock option plans, stock appreciation
rights, bonuses, severance arrangements, health and welfare benefits, insurance
benefits and all other employee benefits or fringe benefits whether or not
committed to writing and whether or not any such plan is an "employee benefit
plan" as defined in Section 3.3 of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") (collectively referred to as the "Plans"). Except
as may be indicated on Schedule 5.29, Vento does not contribute, nor has it ever
contributed, to any multi-employer plan within the meaning of Section 4001(a)(3)
of ERISA, nor is Vento affiliated with any entity such that Vento has, or might
have in the future, any multi-employer plan withdrawal liability under Subtitle
E of Part IV of ERISA.
5.29.2 Vento has, with respect to each Plan, delivered to SPSS
true and complete copies of: (i) all plan texts and agreements and related trust
agreements or annuity contracts; (ii) all
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summary plan descriptions and material employee communications; (iii) the annual
reports (Form 5500 series) (including all schedules thereto) for the most recent
three (3) plan years; (iv) the actuarial valuations for the most recent three
(3) plan years; (v) if the Plan is intended to qualify under Code Sections
401(a), the most recent determination letter received from the IRS; and (vi) any
and all communications with any governmental entity or agency including, without
limitation, the IRS, Department of Labor and the Pension Benefit Guaranty
Corporation ("PBGC").
5.29.3 To the best of Vento's and the Shareholders' knowledge,
each Plan (and each trust forming a part of such Plan) has been administered and
operated in all respects in accordance with its terms and applicable law. Where
designated on Schedule 5.29, each Plan is "qualified" within the meaning of
Section 401(a) of the Code and each related trust is exempt from tax under
Section 501(a) of the Code.
5.29.4 With respect to each Plan, no person: (i) has entered into
any non-exempt "prohibited transaction," as such term is defined in ERISA and
the Code; (ii) has breached a fiduciary obligation or violated Sections 402,
403, 405, 503, 510 or 511 of ERISA; (iii) has any liability for any failure to
act or comply with the administration or investment of the assets of such Plan;
(iv) has engaged in any transactions or otherwise acted with respect to such
Plan in a manner which could subject Vento or any fiduciary or plan
administrator or other person dealing with such Plan, to liability under
Sections 409 or 502 of ERISA or Sections 4972 or 4976 through 4980 of the Code.
5.29.5 With respect to any Plan subject to Title IV of ERISA: (i)
No liability to PBGC has been, or to the best of Vento's and the Shareholders'
knowledge, is expected to be, incurred with respect to any Plan, except for
liabilities for PBGC premiums which may be expected to be incurred in the
ordinary course of business; (ii) no such Plan has been terminated; (iii) no
filing of a notice to terminate any such Plan has been made; (iv) PBGC has not
instituted proceedings to terminate any such Plan; (v) no "reportable event," as
defined in Section 4043(b) of ERISA, for which the obligation to report to the
PBGC within 30 days has not been waived by the PBGC, has occurred with respect
to any such Plan; and (vi) there exists no condition or set of circumstances
which presents a risk of termination or partial termination of any Plan and
which could result in a liability on the part of Vento to PBGC.
5.29.6 Except as set forth in the Letter, full payment has been
made of all amounts which Vento was required under the terms of any of the Plans
to have paid as contributions to such Plans on or prior to the Closing Date, and
no "accumulated funding deficiency" (as defined in Section 302(a)(2) of ERISA
and Section 412(a) of the Code), whether or not waived, exists with respect to
any such Plan.
No assets of Vento are subject to any lien under ERISA Section
302(f) or Code Section 412(n). Except as set forth on Schedule 5.29.6, with
respect to each Plan, there are no funded benefit obligations for which
contributions have not been made or properly accrued and there are no unfunded
benefit obligations that have not been accounted for by reserves, or otherwise
properly footnoted in accordance with generally accepted accounting principles,
on the financial statements of Vento.
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5.29.7 Other than for claims in the ordinary course of business
for benefits under the Plans, there are no actions, suits, claims or
proceedings, pending or, to the best of Vento's and the Shareholders' knowledge,
threatened, nor to the best of Vento's and the Shareholders' knowledge does
there exist any basis therefor, which may result in any liability with respect
to any Plan to Vento or any Plan or trust thereof.
5.29.8 Except for continuation coverage under Sections 601 et seq.
of ERISA, no former employee of Vento or any affiliate thereof, nor any
dependent of any such former employee, is entitled to any medical, dental
benefits or other welfare benefits under any Plan.
5.29.9 No Plan is described in Code Section 413(c) or ERISA
Sections 4063, 4064 or 4066. No Plan which is a "welfare plan" as defined in
Section 3(1) of ERISA is a "multiple employer welfare arrangement" as defined in
ERISA Section 3(40).
5.29.10 Each Plan which is a "pension plan" as defined in ERISA
Section 3(2) and which is not qualified under Code Section 401(a) is exempt from
Parts 2, 3 and 4 of Title I of ERISA as an unfunded plan that is maintained
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees, pursuant to ERISA Sections
201(2), 301(a)(3) and 401(a)(1). No assets of Vento are allocated to or held in
a "rabbi trust" or similar funding vehicle.
5.29.11 Except as disclosed on Schedule 5.33, the consummation of
the transactions contemplated by this Agreement will not: (i) entitle any
current or former employee of Vento to severance pay, unemployment compensation
or any similar payment; (ii) accelerate the time of payment or vesting, or
increase the amount of any compensation due to, or in respect of, any current or
former employee, (iii) constitute or involve a prohibited transaction; or (iv)
constitute or involve a breach of fiduciary responsibility within the meaning of
ERISA Section 502(1) or otherwise violate Part 4 of Subtitle B of Title I of
ERISA.
5.30 Licenses and Permits. Except as set forth in the Letter, Vento has
all governmental licenses and permits and other governmental authorizations and
approvals required for the conduct of its businesses as presently conducted
("Permits"). Schedule 5.30 hereto includes a list of all Permits.
5.31 Relations With Suppliers and Customers. Neither Vento nor the
Shareholders is or are required to provide any bonding or other financial
security arrangements in connection with any transaction with any customer or
supplier. Neither Vento nor the Shareholders has received any notice that any
customer or supplier of Vento will cease to do business with Vento or refuse to
do business with SPSS after the consummation of the transactions contemplated
hereby.
5.32 Interests in Competitors, Suppliers and Customers. None of the
Shareholders nor any officer or director of Vento or any entity controlled by or
under common control with Vento has any
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ownership interest in any competitor, supplier or customer of Vento or any
property used in the operation of Vento's businesses.
5.33 Employment Matters. Schedule 5.33 hereto is a list of all oral and
written employment or consulting contracts or other agreements or arrangements
providing for remuneration to which Vento is a party or by which it is bound,
and all these contracts and arrangements are in full force and effect. There are
no oral contracts or arrangements other than those described in the preceding
sentence which, individually or in the aggregate, exceed $50,000.00 in value.
There have been no claims of defaults and, to the best of Vento's and the
Shareholders' knowledge, 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.
5.34 Discrimination: Occupational Safety; Labor. No person or party
(including, but not limited to, governmental agencies of any kind) has asserted
any claim or except as set forth in the Letter, has any basis for any action or
proceeding, against Vento arising out of any statute, ordinance or regulation
relating to discrimination in employment or employment practices or occupational
safety and health standards (including, but without limiting the foregoing, The
Fair Labor Standards Act, as amended; Title VII of the Civil Rights Act of 1964,
as amended; 42 U.S.C. 1981 or the Age Discrimination in Employment Act of 1967,
as amended), which, if upheld, would have an adverse effect on the assets,
properties, businesses or conditions, financial or otherwise, of Vento. There is
no pending or, to the best of Vento's and the Shareholders' knowledge,
threatened, federal or state equal employment opportunity enforcement action or
labor dispute, strike, or work stoppage affecting any of businesses of Vento.
Vento has no collective bargaining or similar agreements, nor does Vento have
any obligation to bargain with any labor organization as the representative of
its employees, and there is neither pending nor, to Vento's knowledge,
threatened, any labor dispute, strike or work stoppage which affects or which
may affect Vento's businesses or which may interfere with the continued
operations of Vento. No present or former employee of Vento has any claim
against Vento for (a) overtime pay, other than overtime pay for the current
payroll period, (b) wages or salary (excluding bonuses and amounts accruing
under pension and profit sharing plans) for any period other than the current
payroll period, (c) vacation, time off or pay in lieu of vacation or time off or
bonus days, except as set forth on Schedule 5.34, or (d) any material violation
of any statute, ordinance or regulation relating to minimum wages or maximum
hours of work.
5.35 Related Transactions. Except as set forth on Schedule 5.35, Vento
has not made or entered into any loan, contract, lease, commitment, arrangement
or understanding with any of its officers, directors, employees, shareholders or
any entity controlled by or under common control with Vento, except normal
compensation arrangements with officers, all of which are reasonable in amount
and terminable by Vento on 30 days' notice.
5.36 Brokers and Finders. Neither Vento nor the Shareholders (nor any
of their respective officers, directors, employees, affiliates, associates, or
family members), has employed any broker, finder or investment banker, or
incurred any liability for any brokerage fees, commissions or finders' fees in
connection with this Agreement or the transactions contemplated hereby.
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5.37 Questionable Payments. Neither Vento nor the Shareholders, nor any
director, officer, agent, employee or other person associated with or acting on
behalf of Vento has directly or indirectly: (a) used any corporate funds for
unlawful contributions, gifts, entertainment or other unlawful expenses relating
to political activity; (b) made any unlawful payment to government officials or
employees or to political parties or campaigns from corporate funds; (c)
violated any provision of the Foreign Corrupt Practices Act of 1977, as amended;
(d) established or maintained any unlawful or unrecorded fund of corporate
monies or other assets; (e) intentionally made any false or fictitious entry on
the books or records of Vento; (f) made any bribe, payoff, influence payment,
kickback or other unlawful payment; or (g) made any bribe or other payment of a
similar or comparable nature to any person or entity, private or public,
regardless of form, to obtain favorable treatment in securing business or to
obtain special concessions or treatment. Except for those listed on Schedule
5.37, Vento has no foreign assets.
5.38 Books and Records. The books and records of Vento have been
maintained in accordance with commercially reasonable business and bookkeeping
practices and accurately reflect in all material respects the business, assets,
properties, rights, obligations, liabilities and operations of Vento, other than
valuations of any Intellectual Property or Intellectual Assets.
5.39 Bank Accounts; Safe Deposit Boxes. Schedule 5.39 hereto sets forth
the names and locations of all banks in which Vento has accounts or safe deposit
boxes and the names of all persons authorized to draw thereon or to have access
thereto.
5.40 Year 2000 Compliance. Vento's internally developed proprietary
software products, including any third party software incorporated therein, are
Year 2000 Compliant (as hereinafter defined) when used in accordance with the
corresponding technical documentation furnished by Vento in connection with
those software products, provided that all third party software or hardware not
incorporated therein but used in combination with the subject Vento software
products are also Year 2000 Compliant. "Year 2000 Compliant" means that the
software product in question is designed to be used from, into and between the
20th and 21st centuries, including the years 1999 and 2000; will accurately
receive, provide and process date/time data (including, but not limited to,
calculating, comparing and sequencing)) during those time periods; and will not
malfunction, cease to function or provide invalid or incorrect results as a
result of the date/time data or leap year calculations. Except as set forth
above, Vento makes no warranties or representations concerning Year 2000
Compliance of any third party products Vento distributes or utilizes.
5.41 Full Disclosure. Vento and the Shareholders have disclosed in
writing in, or pursuant to, this Agreement all facts material to the business,
operations, assets or condition (financial or otherwise) of Vento. No
representation or warranty to SPSS contained in this Agreement, and no statement
contained in the schedules to this Agreement, any certificate, list or other
writing furnished to SPSS pursuant to the provisions hereof, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements herein or therein not misleading.
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5.42 Effect of Certificates. All representations and warranties made in
certificates of Vento and the officers of Vento and/or the Shareholders
delivered hereunder shall be deemed to be additional representations and
warranties of Vento and the Shareholders, respectively.
5.43 Accounting Matters. Neither Vento nor the Shareholders has through
the date of this Agreement taken or agreed to take any action that (without
giving effect to this Agreement, the transactions contemplated hereby, or
actions relating thereto, or any actions taken or agreed to be taken by SPSS)
would, to the best of their knowledge, prevent SPSS from accounting for the
business combination to be effected hereby as a pooling of interests.
5.44 Pooling of Interests Accounting. Vento has consulted with its
independent auditors, regarding Vento's ability to qualify for pooling of
interests accounting relating to the transactions contemplated hereunder. Such
auditors have reviewed the amounts and timing of salary, bonus and distribution
payments made by Vento during applicable years and such auditors have not stated
to Vento any doubt that pooling of interests accounting will be available with
respect to the transactions contemplated hereunder. Vento presently believes
that the condition precedent contained in Section 11.5 hereof will be satisfied.
5.45 Material Misstatements or Omissions. No representation or warranty
by either Vento or the Shareholders in this Agreement nor any documents,
exhibits, certificates or schedules furnished to SPSS pursuant hereto, knowingly
contains or will contain any untrue statement of a material fact, or knowingly
omits or will omit to state any material fact necessary to make the statements
or facts contained therein not misleading. The copies of all documents furnished
to SPSS hereunder are true and complete copies of the originals thereof in all
material respects. As used in this Section 5.45, "knowingly," as applied to the
Shareholders and Vento (which is deemed to include the directors and officers of
Vento), shall mean actual knowledge and such knowledge that a reasonably prudent
person in like circumstances should have had.
5.46 Knowledge. The terms "know" and "knowledge," as applied to David
Blyer and John Gomez, or either of them, and as applied to Vento (which is
deemed to include the directors and officers of Vento), shall mean actual
knowledge and such knowledge that a reasonably prudent person in like
circumstances should have had upon reasonable investigation of the matter. The
terms "know" and "knowledge," as applied to John Pappajohn shall mean actual
knowledge. Anything in this Article V to the contrary notwithstanding, all
representations and/or warranties of John Pappajohn are made solely to his
actual knowledge.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SPSS
SPSS represents and warrants to Vento and the Shareholders as follows:
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6.1 Organization and Qualification. SPSS is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the corporate power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby.
6.2 Authority. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of SPSS, and no other proceedings
(corporate or otherwise) on the part of SPSS, its shareholders or Board of
Directors, are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by SPSS and constitutes legal, valid and binding
agreements of SPSS.
6.3 Consents and Approvals. There is no authorization, consent, order
or approval of, or notice to or filing with, any individual, entity or
governmental department, agency or authority required to be obtained or given in
order for SPSS to consummate the transactions contemplated hereby and fully
perform its obligations hereunder.
6.4 Absence of Conflicts. The execution, delivery and performance by
SPSS of this Agreement (including, without limitation, the offering, issuance
and sale of the Acquisition Stock) and the consummation by SPSS of the
transactions contemplated hereby will not, with or without the giving of notice
or the lapse of time, or both, (i) violate any provision of law, statute, rule
or regulation to which SPSS is or was subject, (ii) violate any order, judgment
or decree which is or was applicable to SPSS, or (iii) conflict with, or result
in a breach or default under, any term or condition of the Certificate of
Incorporation or By-Laws of SPSS or any agreement or other instrument to which
SPSS is a party or by which it is bound.
6.5 Capitalization. The authorized capital stock of SPSS consists of
50,000,000 shares of Common Stock, of which, as of the date hereof, 9,069,805
shares were issued and outstanding. All the issued and outstanding shares of
Common Stock are validly issued, fully paid and nonassessable. There are no
options, warrants or other rights, agreements or commitments obligating SPSS to
issue shares of its capital stock except for stock options to purchase shares of
Common Stock pursuant to various SPSS option plans and agreements and employee
rights to purchase Common Stock pursuant to SPSS's employee stock purchase
plans.
6.6 Reports and Financial Statements. SPSS has previously furnished
Vento with true and complete copies of its (i) Annual Report on Form 10-K for
the fiscal year ended December 31, 1998 as filed with the SEC, (ii) its
Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30, and
September 30, 1999 as filed with the SEC (collectively the "SPSS Reports"),
(iii) definitive proxy statement for the 1999 annual meeting of stockholders of
SPSS; and (iv) each other report or document provided generally to the
stockholders of SPSS since December 31, 1998, or incorporated by reference in
public filings by SPSS since such date (collectively the "SPSS Reports"). As of
their respective dates, each SPSS Report (i) complied as to form in all material
respects with the applicable requirements of the Exchange Act, and (ii) to the
best of SPSS's knowledge, did not on the date of filing or the date as of which
information is set forth therein, contain any untrue statement of a
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material fact or 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. The audited and unaudited consolidated
financial statements of SPSS (the "SPSS Financial Statements") included or
incorporated by reference into such SPSS Reports have been prepared in
accordance with generally accepted accounting principles applied in a consistent
basis (except as may be indicated therein or in the notes thereto) and fairly
present the financial position of SPSS and its consolidated subsidiaries, as of
the dates thereof, and the results of their operations and changes in financial
position for the periods then ended, subject in the case of the unaudited
financial statements, to normal year-end adjustments which are not materially
adverse. SPSS is currently eligible to register the resale of the Acquisition
Stock by the Shareholders with the SEC on Form S-3.
6.7 Litigation and Administrative Proceedings. There is no claim,
action, suit, proceeding or investigation in any court or before any
governmental or regulatory authority pending or, to the best knowledge of SPSS,
threatened, against or affecting SPSS which seeks to enjoin or obtain damages in
respect of the transactions contemplated hereby.
6.8 Brokers and Finders. SPSS has not employed any broker, finder or
investment banker, or incurred any liability for any brokerage fees, commissions
or finders' fees in connection with this Agreement or the transactions
contemplated by this Agreement.
6.9 Acquisition Stock. The Acquisition Stock, when delivered in
accordance with this Agreement, shall be duly authorized, validly issued, fully
paid and nonassessable.
6.10 Pooling of Interests Accounting. SPSS has consulted with KPMG LLP,
as its independent auditors, regarding the ability to qualify for pooling of
interests accounting relating to the transactions contemplated hereunder. Such
auditors have not stated to SPSS any material doubt that pooling of interests
accounting will be available with respect to the transactions contemplated
hereunder. Based upon its discussions with KPMG LLP and Vento's independent
auditors, and assuming the accuracy of the information in the schedules to this
Agreement and all other information disclosed by Vento and the Shareholders in
connection with this Agreement, SPSS believes that the condition precedent
contained in Section 12.7 hereof will be satisfied.
6.11 Year 2000 Compliance. SPSS assembled a committee of
representatives from all of its divisions and operating areas in early 1998 to
address the year 2000 computer date recognition issue. SPSS has completed an
inventory of the readiness of all its major Information Technology systems and
is in the process of replacing non-Year 2000 Compliant systems. SPSS is in the
process of testing the software it sells to third parties, and the status of
such products is detailed at SPSS's world wide web site at www.spss.com. SPSS
has sent year 2000 questionnaires to all of its material suppliers, and is in
the process of developing a contingency plan should its Information Technology,
its software, or its material suppliers be non-Year 2000 Compliant.
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6.12 Effect of Certificates. All representations and warranties made in
certificates of SPSS and the officers of SPSS delivered under or pursuant to
this Agreement shall be deemed to be additional representations and warranties
of SPSS.
6.13 NASDAQ Authorization. The Acquisition Stock to be issued pursuant
to this Agreement will on the date required by NASDAQ be registered on the
NASDAQ stock market's national market, subject to official notice of issuance.
6.14 Material Misstatements or Omissions. No representation or warranty
by SPSS in this Agreement (taken together with all reports and documents filed
by SPSS with the SEC) nor any documents, exhibits, certificates or schedules
furnished to Vento or the Shareholders pursuant hereto, knowingly contains any
untrue statement of a material fact, or knowingly omits to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading. The copies of all documents
furnished to Vento and the Shareholders hereunder are true and complete copies
of the originals thereof in all material respects. As used in this Section 6.14,
"knowingly," as applied to SPSS (which is deemed to include the directors and
officers of SPSS), shall mean actual knowledge and such knowledge that a
reasonably prudent person in like circumstances should have had.
6.15 Knowledge. The terms "know" and "knowledge," as applied to SPSS
(which is deemed to include the directors and officers of SPSS), shall mean
actual knowledge and such knowledge that a reasonably prudent person in like
circumstances should have had upon reasonable investigation of the matter.
ARTICLE VII
COVENANTS RELATING TO CONDUCT OF BUSINESS
7.1 Conduct of Business.
(a) Conduct of Business by Vento. During the period from the date of
this Agreement to the Closing Date or any earlier termination of this Agreement,
Vento shall carry on its business in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and, to the extent
consistent therewith, use all reasonable efforts to preserve intact its current
business organizations, keep available the services of its current officers and
employees, preserve its relationships with customers, suppliers, licensors,
licensees, distributors and others having business dealings with it to the end
that its goodwill and ongoing businesses shall be unimpaired in all material
respects at the Closing Date and, without limiting the generality of the
foregoing, Vento shall not:
(i) (x) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, (y)
split, combine or reclassify any of its
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capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of
its capital stock or (z) purchase, redeem or otherwise acquire any
shares of capital stock of Vento or any other securities thereof or any
rights, warrants or options to acquire any such shares or other
securities;
(ii) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants, or options to
acquire, any such shares, voting securities or convertible securities;
(iii) amend its articles of incorporation, by-laws or other
comparable charter or organizational documents;
(iv) acquire or agree to acquire (x) by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, joint venture, association or other business organization
or division thereof or (y) any assets that individually or in the
aggregate are material to Vento, except purchases of inventory in the
ordinary course of business consistent with past practice;
(v) sell, lease, license other than in the usual course of its
business, mortgage or otherwise encumber or subject to any lien or
otherwise dispose of any of its properties or assets;
(vi) (x) incur any indebtedness, except for short term
borrowings incurred in the ordinary course of business consistent with
past practice, (y) make any loans, advances or capital contributions
to, or investments in, any other person;
(vii) make or agree to make any equipment leases or any new
capital expenditure or capital expenditures which are individually in
excess of $5,000.00 or in the aggregate are in excess of $10,000.00;
(viii) make any tax election that could reasonably be expected
to have a material adverse effect or settle or compromise any income
tax liability;
(ix) pay, discharge, settle or satisfy any claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent
or otherwise), other than the payment, discharge or satisfaction, in
the ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities reflected or reserved
against in, or contemplated by, the most recent Financial Statements or
incurred since the date of such financial statements in the ordinary
course of business consistent with past practice;
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(x) except in the ordinary course of business, modify, amend
or terminate any material contract or agreement to which Vento is a
party or waive, release or assign any material rights or claims
thereunder;
(xi) take any action that would prevent SPSS from accounting
for the business combination to be effected by the Acquisition as a
pooling of interests or from treating the Acquisition as a tax-free
reorganization under Section 368(a)(1)(B) of the Code;
(xii) take any action to institute any new severance or
termination pay practices with respect to any directors, officers or
employees of Vento or to increase the benefits payable under its
severance or termination pay practices in effect on the date hereof;
(xiii) adopt or amend, in any material respect, except as may
be required by applicable law or regulation, any collective bargaining,
bonus, profit sharing, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment or other
employee benefit plan, agreement, trust, fund, plan or arrangement for
the benefit or welfare of any directors, officers or employees; or
(xiv) authorize any of, or commit or agree to take any of, the
foregoing actions.
(b) Negotiations with Others. Neither the Shareholders nor Vento
shall, directly or indirectly, through any officer, director, employee,
representative or agent thereof, solicit or encourage (including by way of
furnishing nonpublic information) or take other action to facilitate any
inquiries or the making of any proposal that constitutes or may reasonably be
expected to lead to an Acquisition Proposal (as defined below) from any person,
or engage in any discussions or negotiations relating thereto or in furtherance
thereof or accept any acquisition proposal. For the purposes of this Agreement,
"Acquisition Proposal" means inquiries or proposals regarding (i) any merger,
consolidation, sale of substantial assets or similar transactions involving
Vento, (ii) sale of 10% or more of the outstanding shares of capital stock of
Vento or similar transactions involving Vento, or (iii) any public announcement
of a proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing. Vento and the Shareholders shall immediately
cease and cause to be terminated any existing discussions or negotiations with
any parties conducted prior to the date of this Agreement with respect to any of
the foregoing.
(c) Notification of Certain Matters. Vento and the Shareholders shall
give prompt notice to SPSS, and SPSS shall give prompt notice to Vento and the
Shareholders of: (i) the occurrence or failure to occur, of any event which such
party believes would be likely to cause any of its representations or warranties
contained in this Agreement to be untrue or inaccurate at any time from the date
hereof to the Closing Date and (ii) any failure of Vento and the Shareholders on
the one hand or SPSS on the other hand, as the case may be, or of any officer,
director, employee or agent thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that failure to give such notice shall not constitute a
waiver of any defense that may be validly asserted.
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(d) Pooling Accounting. Vento, the Shareholders and SPSS each hereby
agree (i) not to take any action that would adversely affect the ability of SPSS
to treat the Acquisition as a pooling of interests, and (ii) to take such action
as may be reasonably required to negate the impact of any past actions which
would adversely affect the ability of SPSS to treat the Acquisition as a pooling
of interests in accordance with generally accepted accounting principles
consistently applied and all published rules, regulations and policies of the
SEC, provided, however, that neither Vento nor the Shareholders will be
obligated to take any such action specified above if, by so doing, they would
incur, or could reasonably be anticipated to incur liability to any third party
or parties, or if such actions would result in any increased expense on the part
of Vento or the Shareholders beyond those usual and customary transactional
expenses to be paid by Vento or the Shareholders as set forth at Section 16.3,
and nothing herein shall be construed as amending the obligations of Vento or
the Shareholders under Section 16.3.
ARTICLE VIII
COVENANTS OF VENTO AND THE SHAREHOLDERS
Vento and the Shareholders, jointly and severally, covenant as follows:
8.1 Consents and Approvals. Vento and the Shareholders agree to use
all reasonable efforts to make all registrations, filings and applications, and
give all notices and obtain all governmental and other consents, approvals,
orders, qualifications and waivers necessary for the consummation of the
transactions contemplated by, or the performance by Vento and the Shareholders
of any of their obligations under, this Agreement, or which may become
reasonably necessary or desirable in connection with any of the foregoing, in
each case upon terms and conditions reasonably satisfactory to SPSS and its
counsel.
8.2 Closing Returns. SPSS will cooperate with the Shareholders to
file, or cause to be prepared and filed, on a timely basis all income tax
returns of Vento due after the Closing Date and attributable to periods ending
on or before the Closing Date, including without limitation, federal and state
income tax returns for the short period ending on the Closing Date (the "Closing
Returns"). SPSS shall, subject to the review and approval of the Shareholders,
direct the preparation and filing of the Closing Returns.
8.3 Access to Information.
(a) Vento shall allow SPSS to have complete access at all reasonable
times to its officers, employees, agents, properties, books and records, and
shall furnish SPSS all financial, operating and other data and information as
SPSS, through its officers, employees or agents, may reasonably request.
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(b) No investigation pursuant to this Section 8.3 shall affect, add to
or subtract from any representations or warranties or the conditions to the
obligations of the parties hereto to effect the Acquisition.
8.4 Further Assurances. The Shareholders shall from time to time, at
the request of SPSS and without further cost or expense to SPSS, execute and
deliver such other documents and take such other actions as shall be reasonably
necessary or appropriate to consummate fully the transactions contemplated
hereby.
ARTICLE IX
COVENANTS OF SPSS
SPSS covenants as follows:
9.1 Required Filings. SPSS agrees to use all reasonable efforts to
make all registrations, filings and applications, and give all notices and
obtain all governmental and other consents, approvals, orders, qualifications
and waivers necessary for the consummation of the transactions contemplated by,
or the performance by SPSS of any of its obligations under, this Agreement, or
which may become reasonably necessary or desirable in connection with any of the
foregoing, in each case upon terms and conditions reasonably satisfactory to
Vento and its counsel.
9.2 Retention of Records. After the Closing Date, SPSS will retain all
of Vento's books and records in their possession in accordance with SPSS's
policies for retention of its own books and records, and in accordance with
applicable law and upon reasonable notice and during SPSS's regular business
hours and at reasonable intervals, will provide the Shareholders, and their
respective agents and representatives designated in writing, access to such
books and records, concerning periods prior to the Closing Date.
9.3 Severance Packages. Within a reasonable time after the Closing
Date, SPSS shall provide its standard severance package to any Vento employees
who are not retained for employment with SPSS. Such package shall consist of two
weeks of severance pay, plus one additional week of severance pay for each full
year of employment with Vento.
9.4 Employment Agreements. At the Closing, SPSS and David Blyer and
John Gomez, respectively, shall enter into employment agreements substantially
in the forms attached hereto as Exhibit B.
9.5 Cooperation/Audits. In connection with the preparation of returns,
audit examinations and any administrative or judicial proceedings relating to
tax liabilities imposed on Vento or the Shareholders, or any of them, for any
pre-Closing periods, SPSS and the
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Shareholders will cooperate fully with each other in good faith and SPSS shall
promptly notify the Shareholders of any inquiries, claims or assessments, audits
or similar events regarding any taxes in relation to pre-Closing periods. SPSS
shall have exclusive authority to represent the interests of Vento with respect
to any proceeding before any taxing authority or any court and the sole right to
extend or waive the statute of limitations and to control the defense,
compromise or resolution of any Vento tax matters. The foregoing
notwithstanding, however, SPSS shall not enter into any settlement of any
contest or otherwise compromise any issue that affects or may reasonably be
anticipated to affect the tax liability of Vento or any of the Shareholders with
respect to any pre-Closing period for which indemnification may be sought
without in each instance obtaining the prior written consent of the particular
Shareholder or Shareholders in question, which consent will not be unreasonably
withheld. SPSS shall allow the Shareholders to observe all proceedings and keep
the Shareholders reasonably informed regarding the commencement, status and
nature of any Vento tax matters. SPSS shall in good faith allow the Shareholders
to make comments to SPSS regarding the conduct of or positions taken in any such
proceeding.
9.6 Further Assurances. SPSS shall from time to time execute and
deliver such other documents and take such other actions as shall be reasonably
necessary or appropriate to consummate fully the transactions contemplated
hereby.
ARTICLE X
MUTUAL COVENANTS
Each of the parties hereto covenants as follows:
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10.1 Confidentiality. Except as otherwise required by law or pursuant
to proceedings before a court of competent jurisdiction, and then only to the
extent specifically required by such proceedings, and except for public
announcements of the transactions contemplated hereby on the advice of counsel,
each of the parties agrees not to (i) disclose any Confidential Information
(defined hereinbelow) of any other party, or the terms of this Agreement, to any
individual or entity (other than its directors, officers, employees, agents and
representatives with a need to know such Confidential Information in order to
consummate the transactions contemplated hereby and then only if reasonable
steps are taken with such parties to preserve the confidentiality thereof) or
(ii) use any Confidential Information for any purpose other than, with respect
to SPSS, operating the acquired business. "Confidential Information" shall mean
any secret or confidential information of the software business, Vento or SPSS,
including, but not limited to, customer information, financial information,
technical information, details or information concerning contracts, trade
secrets, marketing information or any other data, information or proprietary
information of or relating to the software business, Vento or SPSS or any
affiliate thereof, or their respective products or services. No obligations
shall exist under this Agreement with respect to Confidential Information that
(i) is publicly known or available at the time of the disclosure or becomes
publicly known or available through no wrongful act or failure of Vento, the
Shareholders or SPSS, (ii) is disclosed by a third party which does not have a
confidential relationship with either Vento, the Shareholders or SPSS, and which
was rightfully acquired by third party, or (iii) is legally compelled to be
disclosed pursuant to a subpoena, summons, order or other judicial or
governmental process, provided that the parties hereto provide prompt notice of
any such subpoena, summons, order or other judicial or governmental process to
such other parties of the Confidential Information, so as to allow the parties
an opportunity to oppose such process.
10.2 Consistent Tax Reporting. The parties agree for tax purposes to
report the transactions contemplated by this Agreement, and to treat any
subsequent related transactions or items, in a manner consistent in all respects
with the terms and provisions of this Agreement. Each party shall cooperate with
the other parties as reasonable and appropriate for all relevant tax purposes
relating to the transactions contemplated by this Agreement.
10.3 Cooperation. The parties agree to cooperate with each other in
good faith for all other reasonable purposes after the Closing, including with
respect to any audit by any taxing authority of any of the income tax or other
tax returns of Vento.
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ARTICLE XI
CONDITIONS TO OBLIGATIONS OF VENTO
AND THE SHAREHOLDERS
The obligations of Vento and the Shareholders to consummate the
transactions contemplated by this Agreement are subject to the satisfaction on
or prior to the Closing Date of the following conditions:
11.1 Representations and Warranties. The representations and warranties
of SPSS shall be true and accurate on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
the Closing Date.
11.2 Performance. SPSS shall have performed in all material respects
all covenants and agreements required by this Agreement to be performed by it on
or before the Closing Date.
11.3 Filings; Consents: Waiting Periods. All registrations, filings,
applications, notices, transfers, consents, approvals, orders, qualifications,
waivers and other actions required of any persons or governmental authorities or
private agencies in connection with the consummation of the transactions
contemplated by and the performance by SPSS of its obligations under this
Agreement shall have been made or obtained and all applicable waiting periods
shall have expired or been terminated.
11.4 No Injunction. At the Closing Date, there shall be no injunction,
restraining order or decree of any nature of any court or governmental body in
effect which restricts or prohibits the consummation of the transactions
contemplated by this Agreement.
11.5 Pooling. Vento shall have received from Horkey & Associates, P.A.
a letter dated as of the Closing Date, in form and substance reasonably
acceptable to SPSS, stating that Vento qualifies for pooling of interests
accounting treatment under generally accepted accounting principles and
applicable SEC rules and regulations. No action shall have been taken by any
government authority or any statute, rule, regulation or order, promulgated or
issued by any governmental authority, or any proposal made for any such action
by any governmental authority which is reasonably likely to be put into effect,
that would prevent SPSS from accounting for the transactions contemplated
hereunder as a pooling of interests.
11.6 Intentionally Omitted.
11.7 Legal Opinion. The Shareholders shall have received the written
opinion dated the Closing Date of Ross & Hardies substantial in the form
attached hereto as Exhibit C.
11.8 Employment Agreements. SPSS and David Blyer and John Gomez,
respectively, shall enter into employment agreements substantially in the forms
attached as Exhibit B.
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11.9 Closing Documents. All documents required to be delivered by SPSS
to Vento and the Shareholders at Closing under Article XIII shall have been
delivered at Closing.
11.10 No Litigation. No action, suit or proceeding shall have been
instituted or threatened by any person, entity or any governmental agency or
body, before a court or governmental body, to restrain or prevent the
consummation of the transactions contemplated by, or the performance by SPSS of
their respective obligations under, this Agreement or which seeks other relief
with respect to any of such transactions.
11.11 Board of Director Approval. This Agreement and the Acquisition
shall have been approved and adopted by the consent of the Board of Directors of
SPSS in accordance with applicable law and the Articles of Incorporation and
By-laws of SPSS.
11.12 Affiliates and Certain Stockholders. (a) Prior to the Closing
Date, SPSS shall identify all persons who are "affiliates" of SPSS for purposes
of applicable interpretations regarding the pooling-of-interests method of
accounting (the "SPSS Affiliates"). SPSS shall use its best efforts to cause
each such person to deliver to SPSS on or prior to the Closing Date a written
agreement substantially in the form attached as Exhibit F hereto. If the
Acquisition would otherwise qualify for pooling-of-interests accounting
treatment, SPSS common stock shall not be transferable by SPSS Affiliates until
the date financial results covering at least thirty (30) days of
post-combination operations of SPSS and Vento have been published within the
meaning of Section 201-01 of the SEC's Codification of Financial Reporting
Policies, regardless of whether each such affiliate has provided the written
agreement referred to in this Section 11.12, except to the extent permitted by,
and in accordance with, Accounting Series Release 135 and Staff Accounting
Bulletins 65 and 76. Any Shares of SPSS held by SPSS Affiliates shall not be
transferable, regardless of whether each such SPSS Affiliate has provided the
written agreement referred to in this Section 11.12, if such transfer, either
alone or in the aggregate with other transfers by SPSS Affiliates, would
preclude SPSS's ability to account for the business combination to be effected
by the Acquisition as a pooling of interests. SPSS shall not register the
transfer of any certificate representing capital stock of SPSS, unless such
transfer is made in compliance with the foregoing. SPSS has advised the SPSS
Affiliates of the provisions of this Section 11.12 and such SPSS Affiliates have
agreed to abide by the terms of this Section 11.12.
ARTICLE XII
CONDITIONS TO OBLIGATIONS OF SPSS
The obligation of SPSS to consummate the transactions contemplated
hereby is subject to the satisfaction on or prior to the Closing Date of the
following conditions:
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12.1 Representations and Warranties. The representations and warranties
of Vento and the Shareholders shall be true and accurate on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date.
12.2 Performance. Vento shall have performed in all material respects
all covenants and agreements required by this Agreement to be performed by it on
or before the Closing Date.
12.3 Filings: Consents; Waiting Periods. All registrations, filings,
applications, notices, transfers, consents, approvals, orders, qualifications,
waivers and other actions of any kind listed on Schedule 5.5 hereto or otherwise
required of any persons or governmental authorities or private agencies in
connection with the consummation of the transactions contemplated by, and the
performance by Vento and the Shareholders of their respective obligations under
this Agreement shall have been made or obtained and all applicable waiting
periods shall have expired or been terminated, in each case upon terms and
conditions reasonably satisfactory to SPSS.
12.4 No Litigation. No action, suit or proceeding shall have been
instituted by any person or entity, or threatened by any governmental agency or
body, before a court or governmental body, to restrain or prevent the
consummation of the transactions contemplated by, or the performance by Vento or
the Shareholders of their respective obligations under, this Agreement or which
seeks other relief with respect to any of such transactions or which could
reasonably be expected to have a materially adverse effect on the businesses,
results of operations, assets, financial condition or prospects of Vento. At the
Closing Date, there shall be no injunction, restraining order or decree of any
nature of any court or governmental agency or body in effect which restrains or
prohibits the consummation of the transactions contemplated by this Agreement.
12.5 Legal Opinion. SPSS shall have received the written opinion, dated
the Closing Date, of Buckingham, Doolittle & Burroughs, LLP, substantially in
the form attached hereto as Exhibit D.
12.6 Due Diligence Investigation. SPSS shall have completed a due
diligence investigation of Vento, the results of which shall have been
satisfactory to SPSS in its sole discretion.
12.7 Pooling. SPSS shall have received from KPMG LLP a letter dated as
of the Closing Date, in form and substance reasonably acceptable to SPSS, and
stating that the transactions to be effected hereunder may be accounted for as a
pooling of interests by SPSS for purposes of its consolidated financial
statements under generally accepted accounting principles and applicable SEC
rules and regulations. No action shall have been taken by any government
authority or any statute, rule, regulation or order, promulgated or issued by
any governmental authority, or any proposal made for any such action by any
governmental authority which is reasonably likely to be put into effect, that
would prevent SPSS from accounting for the transactions contemplated hereunder
as a pooling of interests.
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12.8 Shareholder Approval. This Agreement and the Acquisition shall
have been approved and adopted by the consent of the Shareholders in accordance
with applicable law and the Articles of Incorporation and By-laws of Vento.
12.9 Affiliates and Certain Stockholders. (a) Prior to the Closing
Date, Vento shall deliver to SPSS a letter identifying all persons who are
"affiliates" of Vento for purposes of applicable interpretations regarding the
pooling-of-interests method of accounting. Vento shall use its best efforts to
cause each such person to deliver to SPSS on or prior to the Closing Date a
written agreement substantially in the form attached as Exhibit E hereto. If the
Acquisition would otherwise qualify for pooling-of-interests accounting
treatment, shares of SPSS Common Stock issued to such affiliates of Vento in
exchange for Shares of Vento shall not be transferable until the date financial
results covering at least thirty (30) days of combined operations of SPSS and
Vento have been published within the meaning of Section 201-01 of the SEC's
Codification of Financial Reporting Policies, regardless of whether each such
affiliate has provided the written agreement referred to in this Section 12.9,
except to the extent permitted by, and in accordance with, Accounting Series
Release 135 and Staff Accounting Bulletins 65 and 76. Any Shares of Vento held
by such affiliates shall not be transferable, regardless of whether each such
affiliate has provided the written agreement referred to in this Section 12.9,
if such transfer, either alone or in the aggregate with other transfers by
affiliates, would preclude SPSS's ability to account for the business
combination to be effected by the Acquisition as a pooling of interests. Vento
shall not register the transfer of any certificate representing capital stock of
Vento, unless such transfer is made in compliance with the foregoing. Except as
provided in Section 4.1 hereof, SPSS shall not be required to maintain the
effectiveness of any registration statement under the Securities Act for the
purposes of resale of the SPSS Common Stock by such affiliates. Vento has
advised the affiliates of the provisions of this Section 12.9 and such
affiliates have agreed to abide by the terms of this Section 12.9.
12.10 Delivery. At the Closing, the documents referenced in Article
XIII shall be delivered to SPSS.
ARTICLE XIII
CLOSING DELIVERIES
The following deliveries shall be made at the Closing:
13.1 Delivery of Certificates for Total Shares and Acquisition Stock.
The Shareholders shall deliver to SPSS the Shares, together with executed stock
powers endorsed as directed by SPSS for both the Shares and the Escrowed Shares,
and SPSS shall deliver to the Shareholders the Acquisition Stock (less the
Escrowed Shares), and to the Escrow Agent, the Escrowed Shares and related stock
powers as described above.
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13.2 Books and Records. Vento shall have caused to be delivered to
SPSS all of Vento's books and records, including without limitation the stock
transfer and minute books and financial records. The Shareholders shall have the
right to retain copies of Vento's books and records with respect to all periods
through the Closing Date.
13.3 Legal Opinions. Vento shall cause to be delivered to SPSS the
written legal opinion of Buckingham, Doolittle & Burroughs, LLP, in
substantially the form attached hereto as Exhibit D. SPSS shall cause to be
delivered to the Shareholders the written legal opinion of Ross & Hardies in
substantially the form attached hereto as Exhibit C.
13.4 Consents. Vento shall deliver to SPSS all consents and approvals
required in connection with the performance by Vento of its obligations under
this Agreement and the consummation by Vento of the transactions contemplated
hereby. SPSS shall deliver to Vento and the Shareholders all consents and
approvals required in connection with the performance by SPSS of its obligations
under this Agreement and the consummation by SPSS of the transactions
contemplated hereby.
13.5 Closing Certificates. Vento shall deliver, or cause to be
delivered, to SPSS such closing certificates and documents as SPSS and its
counsel shall reasonably request. SPSS shall deliver or cause to be delivered to
the Shareholders such closing certificates as the Shareholders and their counsel
shall reasonably request.
13.6 Charter: Good Standing Certificates. Vento shall cause to be
delivered to SPSS Vento's Articles of Incorporation, as amended to the Closing
Date, certified by the Secretary of State of the State of Florida, and good
standing and tax certificates from such office, as well as from each other
jurisdiction in which Vento is required to be qualified.
13.7 Resignations of Vento's Officers and Directors. Vento shall have
caused to be delivered to SPSS resignations, operative as of the Closing Date,
of all the officers and directors of Vento.
13.8 Performance. The parties hereto shall have performed in all
material respects all covenants and agreements required by this Agreement to be
performed by them on or before the Closing Date.
13.9 Escrow Agreement. SPSS and the Shareholders and the Escrow Agent
shall have executed the Escrow Agreement for the Escrowed Shares substantially
in the form attached hereto as Exhibit A.
13.10 Employment Agreements. SPSS and David Blyer and John Gomez,
respectively, shall have executed and delivered each to the other the Employment
Agreements.
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13.11 General Release. Vento shall deliver to SPSS an executed General
Release of Obligation and Waiver of Rights in the form attached hereto as
Exhibit G from each of such Vento employees, consultants and contractors as are
listed on Exhibit G.
13.12 Consulting and Licensing Agreements. Vento shall deliver to SPSS
executed Consulting and Licensing Agreements by and between Vento and the
following persons and entities: Multicar Ltda., Megacar Ltda., Telkom S.A. Ltd.,
David Slachter, P.A., Catalina Lighting, Hartford Steam Boiler Inspection and
Insurance Company and Sun Microsystems, Inc., DBI, John Alden Life Insurance
Company and Business Research.
13.13 Further Assurances. Each party shall deliver, or cause to be
delivered, all other documents required to be delivered at the Closing by the
other party and shall take all other actions which the other parties may
reasonably determine necessary or appropriate in order to consummate fully the
transactions contemplated hereby.
ARTICLE XIV
SURVIVAL AND INDEMNIFICATION
14.1 Survival of Representations and Warranties: Covenants. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive the Closing Date until the earlier of the
first anniversary of the Closing Date or the date of release of results of the
first post-acquisition audit of SPSS (the "Earnings Release Date"). All
covenants contained herein shall survive until performed fully.
14.2 Indemnification.
(a) The Shareholders agree to indemnify and hold SPSS and its
affiliates and the respective officers, directors, employees, agents and
representatives of each of the foregoing (collectively, the "Representatives")
harmless from and against any and all costs, expenses, losses, claims, damages,
penalties, fines, liabilities and obligations whenever arising or incurred
(including, without limitation, amounts paid in settlement, costs of
investigation and attorneys' fees and expenses) (individually, a "Loss," and
collectively, "Losses") arising out of or relating to (i) any breach of any
representation or warranty made by Vento or the Shareholders (A) set forth
herein or in any related schedule or (B) set forth in any closing certificate or
other document entered into or delivered by Vento or the Shareholders in
connection with this Agreement; (ii) any breach of any covenant, obligation or
agreement of Vento or the Shareholders contained in this Agreement, or set forth
in any closing certificate or other document entered into or delivered in
connection with this Agreement; (iii) any intentional fraudulent representation
or intentional fraudulent misrepresentation on the part of Vento or the
Shareholders, and (iv) any tax liability or obligation asserted against SPSS and
arising out of or related to Vento's operations for tax periods ending on or
prior to the Closing Date or Vento's or the Shareholders' actions or omissions.
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(b) Without limitation as to the indemnification set forth in
subparagraph (a) hereof, the Shareholders agree, to indemnify and hold SPSS and
its affiliates and Representatives harmless from and against (i) any Taxes of or
incurred by Vento for any taxable year or other period the Return for which was
filed or due on or before the Closing Date; (ii) any Taxes incurred by Vento for
any taxable year or other period ending on or prior to the Closing Date, the
Return for which is filed or due after the Closing Date, to the extent in excess
of the reserve for tax liability (excluding any reserve for deferred Taxes
established to reflect timing differences between book and tax income) as set
forth in its most recent balance sheet contained in the Financial Statements;
(iii) the pro-rata share of any Taxes incurred by Vento for any taxable year or
other period beginning before and ending after the Closing Date, to the extent
in excess of the reserve for tax liability (excluding any reserve for deferred
taxes established to reflect timing differences between book and tax income) set
forth or included in its most recent balance sheet contained in the Financial
Statements, as adjusted for the passage of time through the Closing Date in
accordance with Vento's past practice and customs; and (iv) all Taxes of any
corporation other than Vento which was at any time prior to the Closing Date a
member of an "affiliated group" of corporations that included Vento. For
purposes of this Subparagraph 14.2(b), in the case of any taxable period
beginning before and ending after the Closing Date, for purposes of determining
the amount of liability for Taxes attributable to the portion of the taxable
period ending on or before the Closing Date: (A) in the case of sales, use,
payroll or excise Taxes or Taxes based upon or related to income, such portion
of the taxable period shall be deemed to be a separate taxable year and the
Shareholders' liability shall be determined by taking into account all items of
income, gain, loss, deduction or credit on a basis consistent with that employed
in preparing the federal income tax return of Vento for the taxable year ending
on the Closing Date and the relevant state or local tax return for prior years,
and (B) in the case of other Taxes, the Shareholders' liability shall equal a
pro-rata portion of the liability for taxes for the entire taxable period based
on the ratio of the number of days from the beginning of such taxable period
through the Closing Date to the total number of days included in such taxable
period.
(c) Subject to the following sentence, the aggregate of all
indemnities to be provided to SPSS under this Agreement (an "Indemnification
Payment" or "Indemnification Payments") shall not exceed an amount equal to ten
percent (10%) of the Total Shares (the "Cap"), and any and all Indemnification
Payments to be made to SPSS shall be satisfied solely out of the Escrowed Shares
(without recourse to the Shareholders except as set forth in the Escrow
Agreement), and with respect to such Cap, each Shareholder's liability with
respect thereto shall be limited to such Shareholder's pro rata portion of the
Cap, as set forth on Schedule 1.3. Except as otherwise specifically set forth
herein, the indemnities provided in this Agreement shall not commence until the
cumulative amount of all Losses shall exceed Fifty Thousand Dollars ($50,000.00)
in the aggregate (the "Basket"); provided, however, that if the Basket is
reached, the indemnities provided for in this Agreement shall apply to all
Losses, including, without limitation, the Basket, subject to the Cap.
Notwithstanding the foregoing, the Basket and the Cap shall not apply to the
indemnities provided in this Agreement for (i) breach of any non-competition or
confidentiality obligation contained herein or in any other closing document,
(ii) any failure of title to the Shares,
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(iii) any intentional fraud, (iv) any willful misconduct (v) any liability
relating to or arising from third party claims which would have been covered by
business, property or general liability insurance had such insurance been
maintained by Vento in accordance with reasonable business practices, (vi) any
liability resulting from the matters described at provision (ii) of Schedule
5.27, or (vii) criminal action on the part of the Shareholders or Vento, and
shall not apply to any liability under Subparagraph 14.2(a)(iii), Subparagraph
14.2(a)(iv) or Subparagraph 14.2(b) hereof, and notwithstanding anything
contained or implied in this Agreement, the indemnity obligations set forth
herein above shall survive the Closing without limitation except as provided by
the applicable statute of limitations (including any extension of said statute
of limitations) or as otherwise explicitly limited by the terms of this
Agreement.
(d) Anything in this Agreement to the contrary notwithstanding, the
Shareholders shall have no obligation to indemnify or hold harmless SPSS, its
affiliates and Representatives against any Loss to the extent of any insurance
proceeds actually received by SPSS, its affiliates and Representatives in
connection with any such Loss, net of applicable deductibles, taxes and costs
and expenses of submitting to and pursuing against the insurer claims therefor,
including, without limitation, reasonable attorneys' fees. In the event SPSS,
its affiliates and/or Representatives (as applicable) have insurance covering a
Loss, such party shall make a good faith effort to claim and recover against the
applicable insurer for any such Loss.
(e) Notwithstanding anything to the contrary contained or implied in
this Agreement, or in any schedule, exhibit (except the Employments Agreement as
provided in subparagraph 14.2(g) herein) or certificate executed or delivered in
connection with this Agreement, except for the Shareholders' respective
obligations to indemnify SPSS as expressly set forth in Sections 4.5 and 14.2 of
this Agreement, in no event shall Vento or the Shareholders or any of them be
liable to SPSS or any of its affiliates or any of their respective
Representatives, or any other person or entity for any damages whatsoever,
whether direct damages or indirect damages (including, without limitation, any
special, incidental, consequential or any other indirect damages) or any
punitive damages, under any theory or theories of liability or cause or causes
of action arising out of or relating to this Agreement or any schedule, exhibit
(except the Employment Agreements as provided in subparagraph 14.2(g) herein) or
certificate executed or delivered by Vento or the Shareholders or any of them in
connection with this Agreement or the Acquisition. Subject to the limitations of
Section 14.2(f), nothing herein shall prevent SPSS from seeking the equitable
remedy of specific performance against the Shareholders for the performance of
their respective obligations under this Agreement.
(f) Subject to the provisions of Section 14.2(c), notwithstanding
anything to the contrary contained or implied in this Agreement or in any
schedule, exhibit (except the Employment Agreements as provided in subparagraph
14.2(g) herein) or certificate executed, entered into or delivered in connection
with this Agreement, in no event shall any of the Shareholders be liable to SPSS
or any of its affiliates or any of their respective Representatives, nor shall
SPSS or any of its affiliates or their respective Representatives have any right
to recover against any Shareholder, any sum or sums, or to specifically enforce
performance of any covenant
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or obligation of any Shareholder under this Agreement or under any schedule,
exhibit (except the Employment Agreements as provided in subparagraph 14.2(g)
herein) or certificate hereto, which sums (and/or expense to any such
Shareholder in the event of specific performance) in the aggregate exceed, with
regard to each of the respective Shareholders, an amount equal to the value of
that number of Total Shares actually received by that particular Shareholder
under this Agreement. For purposes of this provision 14.2(f), the value of that
number of the Total Shares received by the respective Shareholders under this
Agreement shall be calculated using the closing price for SPSS Common Stock as
of the Closing Date as published in the Wall Street Journal.
(g) Nothing in subparagraphs 14.2(e) or 14.2(f) hereof is intended
nor shall be construed as amending the Employment Agreements or modifying any
rights of any party to the Employment Agreements arising under the Employment
Agreements.
14.3 Indemnification by SPSS. Subject to an amount equal to the Cap,
SPSS agrees to indemnify and hold Vento and its affiliates and the respective
officers, directors, employees, agents and representatives of each of the
foregoing harmless from and against any and all Losses relating to (i) any
breach of any representation or warranty of SPSS set forth herein or in any
related schedule, or set forth in any closing certificate or other document
entered into or delivered by SPSS in connection with this Agreement; (ii) any
breach of any covenant, obligation or agreement of SPSS contained in this
Agreement or in any other closing document and (iii) any fraudulent
representation or intentional misrepresentation on the part of SPSS, unless the
claim or cause of action with respect thereto arises out of or is related to
actions or omissions of Vento or the Shareholders prior to the Closing Date.
14.4 Indemnification Procedure. (a) An indemnified party under this
Article XIV shall give prompt written notice to the indemnifying party (when and
to the extent that the indemnified party has actual knowledge thereof) of any
condition, event or occurrence or the commencement of any action, suit or
proceeding for which indemnification may be sought, and through counsel
reasonably satisfactory to the indemnified party, the indemnifying party shall
assume the defense thereof or other indemnification obligation with respect
thereto; provided, however, that any indemnified party shall be entitled to
participate in any such action, suit or proceeding with counsel of its own
choice but at its own expense; and provided, further, that any indemnified party
shall be entitled to participate in any such action, suit or proceeding with
counsel of its own choice at the expense of the indemnifying party, if, under
applicable canons of ethics, joint representation of the indemnifying party and
the indemnified party presents a conflict of interest.
In any event, if the indemnifying party fails to assume the defense
within a reasonable time, the indemnified party may assume such defense or other
indemnification obligation and the reasonable fees and expenses of its attorneys
will be covered by the indemnity provided for hereunder. No action, suit or
proceeding for which indemnification may be sought shall be compromised or
settled in any manner which might adversely affect the interests of the
indemnifying party without the prior written consent of the indemnifying party
(which shall not be unreasonably withheld or delayed); provided, however, that
the indemnified party may settle any
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<PAGE> 47
claim or cause of action without the indemnifying party's consent, but in such
case the indemnifying party shall not be required to reimburse the indemnified
party for its Losses except and to the extent that a court of competent
jurisdiction finally determines on appeal that indemnifying party must indemnify
the indemnified party therefor. Notwithstanding anything in this Section 14.4 to
the contrary, the indemnifying party shall not, without the prior written
consent of the indemnified party, (i) settle or compromise any action, suit or
proceeding or consent to the entry of any judgment which does not include as an
unconditional term thereof the delivery by the claimant or plaintiff to the
indemnified party of a written release from all liability in respect of such
action, suit or proceeding or (ii) settle or compromise any action, suit or
proceeding in any manner that may materially and adversely affect the
indemnified party other than as a result of money damages or other money
payments. The indemnifying party shall pay all expenses, including attorneys'
fees, that may be incurred by any indemnified party in enforcing the indemnity
provided for hereunder.
(b) In the case of any proposed or actual assessment of tax
liabilities for which SPSS is entitled to indemnification from the Shareholders
as provided in Section 14.2(b), SPSS shall give written notice to the
Shareholders as provided in subparagraph (a) hereof and shall contest such
proposed or actual assessment through the administrative review or appeal
procedures available under the relevant tax laws and regulations, provided,
however, that SPSS shall not be required to contest such proposed or actual
assessment unless the Shareholders shall first provide an opinion of counsel,
reasonably acceptable to SPSS, stating that the Shareholders have a reasonable
basis for their position. SPSS shall keep the Shareholders fully informed as to
the progress of such contest. If at any point prior to the termination of the
administrative review process, the Shareholders notify SPSS in writing that they
are willing to accept a settlement proposed by the IRS with respect to such
proposed or actual assessment of tax liabilities, SPSS will settle the proposed
or actual tax assessment, and SPSS shall immediately be entitled to prorata
indemnification from the Shareholders, in the proportions set forth on Schedule
1.3, and subject to the Cap. If the Shareholders never elect to request SPSS to
settle and such administrative review process is unsuccessful at eliminating the
proposed tax, SPSS shall be entitled to pay the tax (and any penalties and
interest) and be entitled to indemnification from the Shareholders; provided,
that if within ten (10) days of receipt from SPSS of notice that it is paying
the tax, the Shareholders notify SPSS of their desire to contest the proposed or
assessed tax deficiency in the courts, the Shareholders shall be entitled to do
so provided that (a) if the proposed or actual tax deficiency is contested in
tax court, the Shareholders shall pay from their own sources any amount of
taxes, penalties and interest determined to be due and (b) if the proposed or
actual tax deficiency is contested by suit for refund in any other court, funds
shall be provided to SPSS and SPSS shall pay the tax and if the outcome of the
contest determines that the tax paid should be refunded, such refund shall be
returned to the Shareholders. Any contest (whether during the administrative
review process or otherwise) shall be conducted at the sole cost and expense of
the Shareholders.
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ARTICLE XV
TERMINATION, AMENDMENT AND WAIVER
15.1 Termination. This Agreement may be terminated at any time prior
to the Closing Date, whether before or after approval by the Shareholders of
Vento:
(a) by mutual consent of the respective Boards of Directors of SPSS
and Vento;
(b) by Vento or SPSS if a material breach of any provision of this
Agreement has been committed by the other party and such breach is not waived by
the nonbreaching party;
(c) by SPSS, if the conditions set forth in Section XI hereof shall
not have been complied with or performed in any material respect and such
noncompliance or nonperformance shall not have been cured or eliminated (or by
its nature cannot be cured or eliminated) by Vento on or before December 31,
1999; or
(d) by Vento, if the conditions set forth in Section XII hereof shall
not have been complied with or performed in any material respect and such
noncompliance or nonperformance shall not have been cured or eliminated (or by
its nature cannot be cured or eliminated) by SPSS or before December 31, 1999;
or
(e) by SPSS or Vento if the Acquisition shall not have been
consummated on or before December 31, 1999 or such later date as the parties
hereto agree in writing.
15.2 Effect of Termination. In the event of termination of this
Agreement as provided above, this Agreement shall hereafter become void and
there shall be no liability or further obligation on the part of Vento, the
Shareholders or SPSS or their respective officers or directors, except as set
forth in Section 10.1 and Section 16.3 and except that nothing herein will
relieve any party from liability for breach of this Agreement.
ARTICLE XVI
MISCELLANEOUS
16.1 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented by written agreement of the
parties.
16.2 Waiver of Compliance. Any failure of Vento or the Shareholders on
the one hand, or SPSS, on the other, to comply with any obligation herein may be
expressly waived hereunder, but such waiver shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Any waiver must be in
writing and duly executed by the appropriate parties.
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16.3 Expenses. Whether or not the transactions contemplated by this
Agreement shall be consummated, the parties hereto agree that all fees and
expenses up to $75,000.00 incurred by Vento or the Shareholders, on the one
hand, and all fees and expenses of SPSS, on the other, in connection with this
Agreement and the transactions and other actions contemplated thereby or taken
in connection therewith, shall be borne by Vento, and by SPSS, respectively,
including, without limitation, all fees of counsel and accountants (without any
adjustment of the Purchase Price, Total Shares or indemnification by the
Shareholders); provided, however, that SPSS agrees to pay the fees incurred by
KPMG LLP if an audit of Vento's financial statements is required; and provided
further that fees and expenses of Vento and the Shareholders in excess of
$75,000.00 shall be paid by SPSS and the Purchase Price adjusted accordingly.
16.4 Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand or by facsimile transmission (receipt
confirmed), one day after being sent by recognized overnight courier or delivery
service, freight prepaid, or five days after being mailed, certified or
registered mail, postage prepaid, return receipt requested:
(a) If to Vento or the Shareholders to:
Vento Software, Inc.
1111 Park Center Boulevard, Suite 300
Miami, Florida 33169
Attention: Mr. David Blyer
Facsimile No.: 305-625-5554
with a copy to:
Buckingham, Doolittle & Burroughs, LLP
4800 North Federal Highway, Suite 104A
Boca Raton, Florida 33431
Attention: Solomon B. Zoberman, Esq.
Facsimile No.: 561-338-2127
or to such other person or address as Vento or the Shareholders shall furnish to
SPSS in writing by notice given in the manner set forth in (a) above.
(b) If to SPSS, to:
SPSS Inc.
233 South Wacker Drive, 11th Floor
Chicago, Illinois 60606
Attention: Mr. Edward Hamburg
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<PAGE> 50
Facsimile No.: 312-651-3558
with a copy to:
Ross & Hardies
150 North Michigan Avenue, Suite 2500
Chicago, Illinois 60601
Attention: Lawrence R. Samuels, Esq.
Facsimile No.: 312-750-8600
or to such other person or address as SPSS shall furnish to Vento in writing by
notice given in the manner set forth above.
16.5 Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties,
except by operation of law and except that SPSS may assign its rights and
obligations under this Agreement to any other entity wholly owned by SPSS. If
such assignment shall be made by SPSS, the assignee shall be entitled to all of
the rights and shall assume all of the obligations of SPSS hereunder, provided,
that SPSS shall remain liable for and guarantee the performance of such entity's
obligations under this Agreement, and the Acquisition Stock shall consist of
SPSS Common Stock as if such assignment had not occurred.
16.6 Publicity. Neither Vento nor the Shareholders, nor SPSS shall
make or issue, or cause to be made or issued, any announcement or written
statement concerning this Agreement or the transactions contemplated hereby for
dissemination to the general public, without the prior written consent of the
other parties. This provision shall not apply, however, to any announcement or
written statement required to be made by law, the regulations of any federal or
state governmental agency or any stock exchange, except that the party required
to make such announcement shall, whenever practicable, consult with the other
party concerning the timing and content of such announcement before such
announcement is made.
16.7 Headings. The Article and Section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
16.8 Severability. If any provision of this Agreement shall be
determined to be contrary to law and unenforceable by any court of law, the
remaining provisions shall be severable and enforceable in accordance with their
terms.
16.9 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to its
conflicts of law doctrine. The parties hereto expressly submit themselves to the
non-exclusive jurisdictions of the State and
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Federal Courts of Delaware for the resolution of any disputes which may arise
under or with respect to compliance with this Agreement. In any action or
actions brought by SPSS, any of its affiliates or Representatives, against one
or more Shareholders, SPSS, such affiliate or Representative shall have the
right to join any or all of such Shareholders in a single action.
16.10 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
16.11 Third Parties. Nothing herein shall be construed to confer upon
or give to any party other than the parties hereto and their successors or
permitted assigns, any rights or remedies under or by reason of this Agreement.
16.12 Entire Agreement. This Agreement, including the Exhibits and
Schedules hereto, sets forth the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein, and supersedes
all prior agreements, covenants, representations or warranties, whether oral or
written, by any party hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first written above.
VENTO SOFTWARE, INC., Florida corporation
By:_______________________________________________
Name:
Title:
__________________________________________________
DAVID BLYER
__________________________________________________
JOHN GOMEZ
__________________________________________________
JOHN PAPPAJOHN
SPSS INC., a Delaware corporation
By:_______________________________________________
Jack Noonan
President and Chief Executive Officer
<PAGE> 53
LIST OF OMITTED SCHEDULES AND EXHIBITS
Sch. 1.3 Allocation of Purchase Price
Sch. 5.3 Allocation of Vento's capital stock
Sch. 5.5 Vento Consents/Approvals
Sch. 5.7 Financial Statements
Sch. 5.8 Vento Liabilities/Debt
Sch. 5.9 Certain Changes or Events
Sch. 5.11(a) Real Property
Sch. 5.11(b) Personal Property
Sch. 5.12 Intellectual Property
Sch. 5.14(a) Standard Form Contracts
Sch. 5.15 Third Party Rights in Source Code
Sch. 5.16 License Agreements (Vento as licensee)
Sch. 5.17 Technical Documentation
Sch. 5.18 Third-Party Licenses
Sch. 5.20 No Virus
Sch. 5.23 Products Liability and Warranty Claims
Sch. 5.24 Insurance Policies
Sch. 5.25 Litigation and Administrative Proceedings
Sch. 5.26.2 Extensions for Tax Returns
Sch. 5.26.9 Prior Consolidated Groups
Sch. 5.27 Compliance with Laws
Sch. 5.28 Environmental Matters
Sch. 5.29 Employee Benefit Plans
Sch. 5.29.6 Funded Benefit Obligations
Sch. 5.30 Licenses and Permits
Sch. 5.33 Employment Contracts
Sch. 5.35 Related Transactions
Sch. 5.34 Employee Claims
Sch. 5.37 Foreign Assets
Sch. 5.39 Bank Accounts; Safe Deposit Boxes
Ex. A Form of Escrow Agreement
Ex. B Form of Employment Agreement
Ex. C Form Legal Opinion of R&H
Ex. D Form of Legal Opinion of BD&B
Ex. E Form of Vento Affiliate Letter
Ex. F Form of SPSS Affiliate Letter
Ex. G Form of General Release of Obligation and Waiver of Rights by
Vento Employees
<PAGE> 1
Exhibit 99.1
SPSS Acquires Vento Software
Key acquisition positions SPSS with first vertical analytical applications
CHICAGO - Nov. 30, 1999 - Staking its claim in analytical applications, SPSS
Inc. (Nasdaq: SPSS) announced today its purchase of Vento Software, Inc. The
transaction, completed on Nov. 29, 1999, was executed as a pooling of interests
in which SPSS issued approximately 550,000 shares of its common stock.
Vento Software is a leader in providing business performance management
solutions for business executives in the telecommunications, banking, health
care and retail industries. SPSS, a leading data mining provider, has purchased
Vento with the intention of integrating its own analytical components into
Vento's suite of vertical solutions.
"We believe this acquisition makes a great deal of sense," said Mike Schiff,
director of data warehousing strategies at Current Analysis, Inc. "With its
existing offerings and the new Vento products, SPSS is extending the
complementary technologies of data mining and OLAP to encompass vertical
solutions. This framework for measuring, understanding and predicting business
performance will benefit SPSS by enhancing its presence in the business
community while benefiting the organizations that deploy the resultant
analytical applications." Vento's flagship product, VentoMap, is a packaged
business intelligence application that provides decision makers with a highly
graphical view of their business performance as well as drill-down analytic
capabilities for decision support. Vento provides each vertical market with an
industry-specific version of the VentoMap product, customizing each
implementation to closely match the way decision makers at customer sites think
about their particular business.
"Analytic applications are entering a new phase of growth, and business
performance management is an important sector of the overall market," said Henry
Morris, vice president of research with International Data Corporation. "SPSS
enters the field with its acquisition of Vento, and is positioned to take the
market a step further by combining business performance management with a strong
vertical market orientation and the predictive power of data mining technology.
Merging these three components expands the breadth and impact of analytic
applications and further increases the value these applications bring to the
market."
VentoMap applications transform operational data into business intelligence by
delivering information in the form of key performance indicators (KPI). After a
series of consultations with the customer, Vento and the customer select the
appropriate indicators, and then Vento delivers a customized solution. To arrive
at the solution, Vento uses a robust, systematic approach that guides executives
through the thought process they use during problem solving, and Vento
consultants deliver the solution within a guaranteed five-month time frame.
"With this acquisition, SPSS can move quickly into vertical applications," said
Jack Noonan, SPSS Inc. president and CEO. "Vento has significant domain
expertise along with solid products
<PAGE> 2
and services that help people better understand their business. By incorporating
these vertical 'best practices' and data mining, organizations can extend
traditional business intelligence solutions and get answers tailored to their
specific business.
"The Vento acquisition gives SPSS new growth opportunities by appealing to a
wider audience. We plan to offer a complete solution combining VentoMap's
implementation of KPIs and the predictive power of SPSS' data mining solutions,"
continued Noonan. "For example, today VentoMap can provide management with
current information about how the business is doing in terms of customer
retention. By adding data mining, the same management team can also see how the
business is likely to do in the future - and make changes if needed." Vento
Software delivers high-level, cross-functional applications that measure and
analyze business performance according to KPIs. These applications incorporate
domain expertise across a range of subjects and functions such as financial,
human resources and customer relationship management. As a result, these
indicators give business executives a strategic view of what has happened in
their organization and how well they are executing their business strategy.
Bob Moran, vice president of decision support research with the Aberdeen Group
observed, "Behind every acquisition is a strategy. By acquiring Vento, SPSS is
aiming to leverage its leading position and investment in data mining technology
into the business performance management market. Through the power of data
mining-driven prediction, the company will expand the practice of using known
performance indicators into a new domain - 'knowable' performance indicators.
This merging of the already known and the predictable will re-classify and
greatly increase the value of key performance indicators."
"Vento has achieved rapid growth and widespread industry recognition by
delivering packaged business intelligence applications that provide business
executives with critical information they need to compete and win," said David
Blyer, Vento president, CEO and co-founder. "By joining SPSS, a company that
shares our strategy and vision, we can do even better by leveraging our
respective strengths in business intelligence, data mining and CRM solutions
worldwide. Together, we can be the leading provider of solutions in key vertical
markets. We are very enthusiastic about the benefits to our customers, our
partners and the marketplace at large."
"In providing analytical application solutions, delivering subject and
vertical-specific business models and metrics is a critical first step," said
Mark A. Smith, program director for META Group. "Companies such as SPSS, with
its recent acquisition of Vento, can add this valuable content to their solution
offerings for integration with their data mining and analytic framework. With
this foundation, these offerings can deliver higher value to customers than just
delivering specific tools."
Explaining what this acquisition may mean to SPSS' financial performance, SPSS
Inc. Chief Financial Officer Edward Hamburg said, "We expect the Vento
acquisition to be accretive in the neighborhood of two cents per share in the
first 12 months following the acquisition. Vento Software's estimated 1999
calendar year revenues should be approximately $2 million, and we hope to double
that revenue in the next year."
<PAGE> 3
SPSS plans to continue to develop and market the Vento products. "Vento products
have been typically sold through partners such as Unisys, Hewlett Packard and
Applied Communications, Inc. and have achieved strong penetration in Latin
America and Asia." said Noonan. "In addition to working with these partners, we
plan to incorporate VentoMap solutions into SPSS' established worldwide sales
organization, which has recently been restructured into vertical markets. As a
result, we expect these products and services to have a much stronger presence
in the U.S. and Europe." SPSS plans to maintain Vento operations in Vento's
Miami office.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: Certain statements in this press release are forward-looking statements.
Such statements can be identified by phrases such as "plans to develop" and "we
expect." Such statements also involve known and unknown risks which may cause
the company's actual results, performance, achievements, or industry results, to
be materially different than any future results, performance or achievements
expressed or implied in or by such forward-looking statements. By way of example
and not limitation, known risks and uncertainties include changes in market
conditions; continued stable relationships with partners; success in
incorporating VentoMap solutions into SPSS' organization; success in integrating
SPSS' analytical components into Vento products; changes and/or product demand
and acceptance; the competitive environment; product release schedules; and
currency fluctuations. In light of these and other risks and uncertainties, the
inclusion of a forward-looking statement in this release should not be regarded
as a representation by the company that any future results, performance or
achievements will be attained. The company assumes no obligation to update the
information contained in this press release.
Company information SPSS Inc., a multinational software and services company, is
a leader in business intelligence, especially data mining and customer
relationship management. The company delivers enterprise solutions to key
vertical markets including: telecommunications, healthcare, banking, finance,
insurance, manufacturing, retail, consumer packaged goods, market research and
the public sector. With products running on all major computer platforms and
translated in several languages, SPSS helps organizations leverage information
to increase revenues and improve processes.
Founded in 1968, the company has more than 40 offices, over 900 employees and
1998 revenues of $121 million. The company also has won the following awards:
ranked No. 70 on Forbes 1999 list of the "200 best small companies" and as the
22nd most profitable company on the Nasdaq exchange by Equities magazine;
granted 1999 World Class Solution award in business intelligence and named "best
decision support system for business intelligence" in the 1999 RealWare award
competition; named No. 14 in DM Review's 1999 Data Warehouse Top 100; placed No.
23 on the 1999 Soft.letter 100, a ranking of the top 100 personal computer
software companies in the United States; and No. 97 in the 1999 Software 500, a
ranking of the world's largest software vendors by Software Magazine.
Headquartered in Chicago, SPSS has offices and distributors around the world.
For more information, visit www.spss.com.
<PAGE> 4
About Vento Software Inc. Vento Software is a leader in providing packaged
business intelligence solutions for the telecommunications, banking, managed
care and retail industries. Founded in 1994, Vento remains unique in its ability
to offer industry-specific applications that address the full data warehouse
lifecycle, from extraction through delivery of business intelligence.
