-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WDRLFY8hgeR+nedeQ38d5YQ69x7Xt2mrvQmbWo1w2iQWzSFJQC13ev6PmOr51hYu /+ONmw40bbdhCAusv/Fo6w== 0001045638-97-000013.txt : 19971127 0001045638-97-000013.hdr.sgml : 19971127 ACCESSION NUMBER: 0001045638-97-000013 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19971126 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPSS INC CENTRAL INDEX KEY: 0000869570 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 362815480 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-41207 FILM NUMBER: 97729787 BUSINESS ADDRESS: STREET 1: 444 NORTH MICHIGAN AVE CITY: CHICAGO STATE: IL ZIP: 60611 BUSINESS PHONE: 3123292400 MAIL ADDRESS: STREET 1: 444 N MICHIGAN AVE CITY: CHICAGO STATE: IL ZIP: 60611 S-3 1 QUANTIME S-3 As filed with the Securities and Exchange Commission on November 26, 1997. Registration No. _____________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 SPSS INC. (Exact name of registrant as specified in its charter) DELAWARE 36-2815480 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 444 North Michigan Avenue, Chicago, Illinois 60611 (312) 329-2400 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Edward Hamburg Executive Vice President, Corporate Operations, Chief Financial Officer, and Secretary SPSS Inc. 444 North Michigan Avenue Chicago, Illinois 60611 (312) 329-2400 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: T. Stephen Dyer, Esq. Ross & Hardies 150 N. Michigan Avenue Chicago, Illinois 60601 (312) 558-1000 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE. If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.|X| CALCULATION OF REGISTRATION FEE
Proposed Proposed Maximum Maximum Aggregate Amount of Title of Each of Amount to be Offering Price Offering Registration Fee Securities to be Registered Registered Per Unit (1) Price(1) - -------------------------------------------------------------------------------------------------------------------------------- Common Stock, $.01 par value 1,031,951 $22.6875 $23,412,388 $7,094.66
(1) Solely for the purpose of calculating the registration fee, the offering price per share, the aggregate offering price and the amount of the registration fee have been computed in accordance with Rule 457(c) under the Securities Act of 1933, as amended. Accordingly, the price per share of Common Stock has been calculated to be equal to the average of the high and low prices for a share of Common Stock as reported by the Nasdaq National Market on November 20, 1997, which is a specified date within five business days prior to the original date of filing of this Registration Statement. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - 1 - The information contained herein is subject to completion or amendment. A Registration Statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the Registration Statement becomes effective. This Prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION NOVEMBER 26, 1997 PROSPECTUS 1,031,951 Shares SPSS INC. Common Stock ($.01 Par Value) This Prospectus relates to the offer and sale of up to 1,031,951 shares of the common stock, $.01 par value (the "Common Shares" or "Common Stock"), of SPSS Inc. (the "Company"). The Common Shares may be offered by particular stockholders of the Company (the "Selling Stockholders") or persons who are recipients of gifts made by Selling Stockholders ("Donee Stockholders") from time to time in transactions on the Nasdaq National Market, in negotiated transactions, or a combination of such methods of sale, at fixed prices that may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. The Selling Stockholders or Donee Stockholders may effect such transactions by the sale of the Common Shares to or through broker-dealers, and such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the Selling Stockholders, Donee Stockholders and/or the purchasers of the Common Shares for whom such broker-dealers may act as agent or to whom they may sell as principal, or both (which compensation to a particular broker-dealer might be in excess of customary commissions). The Selling Stockholders, Donee Stockholders and any broker-dealer who acts in connection with the sale of Common Shares hereunder may be deemed to be "underwriters" as that term is defined in the Securities Act of 1933, as amended (the "Securities Act"), and any commission received by them and profit on any resale of the Common Shares as principal might be deemed to be underwriting discounts and commissions under the Securities Act. See "Selling Stockholders" elsewhere in this Prospectus. The Company will not receive any of the proceeds from the sale of the Common Shares by the Selling Stockholders or Donee Stockholders. The Company's Common Stock is traded and quoted on the Nasdaq National Market under the symbol "SPSS." On November 25, 1997, the last sale price of the Common Stock, as reported on the Nasdaq National Market, was $23 7/8 per share. The Company will bear all expenses (other than underwriting discounts and selling commissions, and fees and expenses of counsel or other advisors to the Selling Stockholders and Donee Stockholders) in connection with the registration of the shares of Common Stock being offered hereby, which expenses are estimated to be approximately $60,000. See "Selling Stockholders" elsewhere in this Prospectus. SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is November ___, 1997 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information filed by the Company, and the Registration Statement of which this Prospectus forms a part, the exhibits and schedules thereto and amendments thereof, may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Judiciary Plaza, Washington, D.C. 20549, and at the regional offices of the Commission located at 7 World Trade Center, 13th Floor, New York, New York 10048 and at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can also be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 at prescribed rates. The Commission maintains a Web site that contains reports, proxy and information statements and other information regarding registrants, like the Company, that file electronically with the Commission and the address of that Web site is "http://www.sec.gov". The Company's Common Stock is quoted on the Nasdaq National Market, and therefore such reports, proxy statements and other information can also be inspected at the offices of the National Association of Securities Dealers, Inc., 1735 K Street, N.W., 3rd Floor, Washington, D.C. 20006. Additional information regarding the Company and the shares offered hereby is contained in the Registration Statement on Form S-3 and the exhibits thereto (collectively, the "Registration Statement") filed with the Commission under the Securities Act of 1933, as amended (the "Securities Act"). As permitted by the rules and regulations of the Commission, this Prospectus does not contain all of the information set forth in the Registration Statement and the exhibits thereto, to which reference is hereby made. Statements made in this Prospectus as to the contents of any contract, agreement or other document referred to are not necessarily complete. With respect to each such contract, agreement or other document filed as an exhibit to the Registration Statement, reference is hereby made to the exhibit for a more complete description of the matter involved, and each such statement will be deemed qualified in its entirety by such reference. For further information with respect to the Company and the shares of Common Stock offered hereby, reference is hereby made to the Registration Statement, and the exhibits thereto. SPSS, Categories, SYSTAT, Jandel Scientific, SigmaPlot, SigmaStat, SigmaScan and SigmaGel are registered trademarks of the Company. SPSS/PC(TM) SPSS Real Stats. Real Easy(TM), BMDP(TM), Jandel(TM), CLEAR(TM), DeltaGraph(TM), Quancept(TM) and Quantime(TM) are unregistered trademarks of the Company. QI Analyst(TM) is currently an unregistered trademark of the Company, but the Company has received notification from the United States Patent and Trademark Office that the Company may pursue further registration on a showing of use of the trademark in interstate commerce. This Prospectus also includes trade names and marks of companies other than SPSS Inc. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Company hereby incorporates by reference the following documents previously filed with the Commission: (a) The Company's Annual Report on Form 10-K, filed March 31, 1997 for the fiscal year ended December 31, 1996; (b) The Company's Quarterly Report on Form 10-Q, filed May 15, 1997 for the fiscal quarter ended March 31, 1997; (c) The Company's Quarterly Report on Form 10-Q filed August 14, 1997 for the fiscal quarter ended June 30, 1997; - 2 - (d) The Company's Quarterly Report on Form 10-Q filed November 14, 1997 for the fiscal quarter ended September 30, 1997; (e) The Company's Current Report on Form 8-K and amendments thereto filed with the Commission on October 15, 1997 (acquisition of Quantime Limited); (f) The description of the Company's Common Stock, $.01 par value (the "Common Stock"), contained in the Company's Registration Statement on Form 8-A filed with Commission on August 4, 1993, pursuant to Section 12 of the Exchange Act; and (g) The Company's Proxy Statement, filed with the Commission on May 20, 1997, for its annual meeting of stockholders held on June 18, 1997, except for the Compensation Committee Report contained therein. All reports and other documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, subsequent to the date of this Prospectus and prior to the filing of a post-effective amendment to the Registration Statement, shall be deemed to be incorporated by reference in the Registration Statement and to be a part hereof from the date of filing of such documents. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein, or in any subsequently filed document which also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide, without charge, to each person (including any beneficial owner) to whom this Prospectus is delivered, upon written or oral request of such person, a copy of any and all of the information that has been incorporated by reference in this Prospectus (not including exhibits to such information unless such exhibits are specifically incorporated by reference into such information). Such requests should be directed to: Edward Hamburg, Executive Vice President, Corporate Operations, Chief Financial Officer and Secretary, at the Company's principal executive offices at 444 North Michigan Avenue, Chicago, Illinois 60611, telephone (312) 329-2400. - 3 - UNLESS THE CONTEXT OTHERWISE REQUIRES, REFERENCES IN THIS PROSPECTUS TO "SPSS" AND THE "COMPANY" SHALL MEAN SPSS INC. A DELAWARE CORPORATION, ITS ILLINOIS PREDECESSOR AND ITS SUBSIDIARIES, COLLECTIVELY; AND REFERENCES TO THE "COMMON STOCK" SHALL MEAN SPSS INC.'S COMMON STOCK, PAR VALUE $ .01 PER SHARE. THE COMPANY General SPSS Inc. ("the Company") was incorporated in Illinois in 1975 under the name "SPSS, Inc." and was reincorporated in Delaware in May 1993 under the name "SPSS Inc." The Company is a multinational company that delivers reporting, analysis and modeling software products, and whose primary markets are marketing research, business analysis/data mining, scientific research and quality improvement analysis. The Company develops, markets and supports an integrated line of statistical software and other products that enable users to effectively bring marketplace and enterprise data to bear on decision-making. The Company's major products include SPSS for business and general applications, NewView for analytical reporting, SYSTAT, SigmaPlot and DeltaGraph for scientific research, QI Analyst for quality improvement and statistical process control, allCLEAR for process documentation and management and the Quantime family of products for market research. The primary users of the Company's software are managers and data analysts in corporate settings, government agencies and academic institutions. In addition to its widespread use in survey analysis, SPSS software also performs other types of market research, as well as quality improvement analyses, scientific and engineering applications and data reporting. The current generation of SPSS desktop products features a windows-based point-and-click graphical user interface, sophisticated statistical procedures, data access and management capabilities, report writing and integrated graphics. The Company's products provide extensive analytical capabilities not found in spreadsheets, database management systems or graphics packages. In its 22 years of operation, SPSS has become a widely recognized name in statistical software. The Company plans to leverage its current position to take advantage of the increased demand for software applications that not only provide ready access to the data that organizations collect and store, but also enable users to systematically analyze, interpret and present such information for use in decision-making. Management believes that ease-of-use of the Company's current generation products, combined with the greater processing speed and storage capacity of the latest desktop computers, has substantially expanded the market for SPSS statistical software. In summer 1993, the Company completed an initial public offering (the "IPO") of common stock, $.01 par value (the "Common Stock"). The Common Stock is listed on the Nasdaq National Market under the symbol "SPSS". In early 1995, the Company and certain selling stockholders (the "Selling Stockholders") sold 1,865,203 shares of Common Stock in a public offering. The Company is a Delaware corporation. The Company's principal executive offices are located at 444 N. Michigan Avenue, Chicago, Illinois 60611, and its telephone number at its principal executive offices is (312) 329-2400. Safe Harbor "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: With the exception of historical information, the matters discussed in this Prospectus are forward-looking statements that involve risks and uncertainties including, but not limited to, market conditions, competition and other risks indicated in the Registration Statement of which this Prospectus forms a part, and the Company's other filings with the Securities and Exchange Commission. - 4 - Recent Developments The Company appointed Michael Blair as a director on July 24, 1997, filling in a vacancy on the Board of Directors of the Company. In September 1997, SPSS acquired approximately 97% of the outstanding shares of capital stock of Quantime Limited, a corporation organized under the laws of England ("Quantime"), from certain shareholders and warrant holders of Quantime, in exchange for 863,049 shares of Common Stock. In November 1997, SPSS acquired the remaining shares of capital stock of Quantime in exchange for 28,175 shares of Common Stock. The acquisition was accounted for as a pooling of interests. Quantime is a developer of market research software products. SPSS will continue to operate the Quantime business principally from the Quantime offices in London, England. In November 1997, SPSS acquired the outstanding shares of capital stock of In2itive Technologies, a corporation organized under the laws of Denmark ("In2itive"), in exchange for 140,727 shares of Common Stock in a merger accounted for as a pooling of interests. In2itive is a computer software company specializing in market research software. SPSS will continue to operate the In2itive business principally from the In2itive headquarters in Copenhagen, Denmark. The financial information included herein other than in the Unaudited Selected Pro Forma Financial Data and share amounts reflect the Company as combined with Quantime, but does not include the In2itive acquisition, unless otherwise indicated. UNAUDITED SELECTED PRO FORMA FINANCIAL DATA (in thousands, except per share data) The unaudited selected pro forma financial data is provided as supplementary information for illustrative purposes to give effect to the acquisitions of Quantime and In2itive. The unaudited selected pro forma financial data gives retroactive effect to the acquisitions of Quantime and In2itive, which have been accounted for as poolings of interests for financial reporting purposes, and as a result, the financial position and results of operations are presented as if the combining companies had been consolidated for all periods presented. The financial data include in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the data for the periods presented. The unaudited selected pro forma financial data should be read in conjunction with the other financial information included or incorporated by reference in this Prospectus. Such financial data are not necessarily indicative of the results that would have occurred if the acquisitions had been in effect during the periods presented or which may be attained in the future.
Nine Months Year Ended December 31, Ended September 30, 1994 1995 1996 1996 1997 ---- ---- ---- ---- ---- Pro Forma Statement of Operations Data: Net revenues $74,760 $87,403 $99,621 $73,023 $80,684 Operating income 7,168 6,396 9,917 8,201 1,695 Net income 4,196(1) 3,180(2) 6,237(3) 5,072(4) 169(5) Net income per share $0.53(1) $0.35(2) $0.66(3) $0.54(4) $0.02(5) Shares used in per share calculation 7,926 9,042 9,382 9,321 9,643 - 5 - Pro Forma Balance Sheet Data: As of December 31, As of September 30, 1995 1996 1997 ------ ------ ------- Working capital $4,163 $9,042 $12,944 Total assets 53,096 63,052 57,463 Total stockholders' equity 21,232 29,099 29,191
(1) Includes a pre-tax write-off of acquired in-process technology and other acquisition-related charges amounting to $1,928. (2) Includes a pre-tax write-off of acquired in-process technology and other acquisition-related charges amounting to $1,051 and a write-off principally of certain software assets capitalized more than two years ago amounting to $2,466. (3) Includes a pre-tax write-off of acquired in-process technology and other acquisition-related charges amounting to $3,636. (4) Includes a pre-tax write-off of acquisition-related charges amounting to $980. (5) Includes pre-tax charges of $2,413 relating to certain asset write-downs and acquisition-related costs of $5,985. RISK FACTORS In addition to the other information in this Prospectus, the following risk factors should be considered carefully by potential purchasers in evaluating a sale of the Common Stock offered hereby. Fluctuations in Quarterly Operating Results. The Company's quarterly operating results can be subject to fluctuation due to several factors, including the number and timing of product updates and new product introductions, delays in product development and introduction, purchasing schedules of its customers, changes in foreign currency exchange rates, product and market development expenditures, the timing of product shipments, changes in product mix, timing, costs and effects of acquisitions and general economic conditions. Because the Company's expense levels are to a large extent based on its forecasts of future revenues, operating results may be adversely affected if such revenues fall below expectations. Accordingly, the Company believes that quarter-to-quarter comparisons of its results of operations may not be meaningful and should not be relied upon as an indication of future performance. The Company has historically operated with very little backlog because its products are generally shipped as orders are received. As a result, revenues in any quarter are dependent on orders shipped and licenses renewed in that quarter. The Company has experienced a seasonal pattern in its operating results with the fourth quarter typically having the highest operating income. For example, excluding acquisition and other non-recurring charges, the percentage of the Company's operating income realized in the fourth quarter was 33% in 1994, 34% in 1995 and 32% in 1996. In addition, the timing and amount of the Company's revenues are subject to a number of factors that make estimation of operating results prior to the end of a quarter uncertain. A significant portion of the Company's operating expenses are relatively fixed, and planned expenditures are based primarily on revenue forecasts. More specifically, in the fourth quarter, the variable profit margins on modest increases in sales volume at the end of the quarter are significant. Should the Company fail to achieve such fourth quarter revenue increases, net income for the fourth quarter and the full year could be materially affected. Generally, if revenues do not meet the Company's expectations in any given quarter, operating results will be adversely affected. Although the Company had been profitable in each of the seven quarters up to and including the quarter ending June 30, 1994, the Company experienced a net loss of $137,000 in the third quarter of 1994 due to a one-time write-off of $1,928,000 for acquired and in-process technology and other acquisition-related charges - 6 - recorded in connection with the Company's acquisition of SYSTAT, Inc. ("SYSTAT"). The Company was profitable in the seven quarters from December 31, 1994 through June 30, 1997, but had a net loss of $3,401,000 in the third quarter of 1997 due primarily to one-time acquisition charges of $5,985,000 and a charge from the revaluation of certain assets of $2,413,000. There can be no assurance that profitability on a quarterly or annual basis can be achieved or sustained in the future. Dependence on a Single Product Category; Declining Sales of Certain Products. The Company derives the major part of its product revenues from licenses of statistical software. Accordingly, any decline in revenues from licenses of the Company's statistical software, or reduction in demand for statistical software generally, could have a material adverse effect on the Company. In recent years, SPSS, excluding the effects of the Quantime and In2itive acquisitions, has experienced a significant shift in the sources of its revenues. Historically, the Company derived a large portion of its revenues from licenses of its mainframe and minicomputer ("Large Systems") products. As a result of the general shift by computer users from Large Systems to desktop computers, the Company experienced a decline in revenues from Large Systems products in the last several years, although in 1996 sales of Large Systems products stabilized. Revenues from Large Systems licenses declined from approximately $15.6 million in 1991 to $10.7 million in 1996, while sales of desktop products increased from $14.7 million in 1991 to $66.2 million in 1996. Revenues from Large Systems licenses increased slightly from 1995 to 1996, by $45,000. Management is unable to predict whether the decline in Large Systems licenses will continue or at what rate such licenses will decline. Revenues from the Company's products for desktop computers ("Desktop products") now account for nearly three-quarters of the Company's revenues and this percentage may continue to increase. Risk Relating to Business Integration in Europe and Other Acquisitions. In recent years, SPSS has made a significant number of acquisitions, including the acquisition of businesses based outside of the United States. See "Recent Developments." While SPSS has substantial international operations, it faces challenges and business integration issues with its September, 1997 acquisition of Quantime Limited, a corporation organized under the laws of the United Kingdom ("Quantime"). Although persons whom the Company believes are qualified and trained will continue to work with Quantime after its acquisition by SPSS, there can be no assurance that Quantime will be able to retain these employees or hire suitable replacements in the event they should leave the employ of SPSS. If the Company loses key personnel from Quantime or is unable to integrate Quantime's business into its own effectively, the Company may experience a material adverse impact on its financial condition. While SPSS believes that it has been successful in integrating the acquisitions it has made in the past, there can be no assurance that the recent acquisitions of Quantime or In2itive or future acquisitions will be successfully integrated into SPSS. Rapid Technological Change. The computer software industry is characterized by rapid technological advances, changes in customer requirements, frequent product enhancements and new product introductions. The Company's future success will depend upon its ability to enhance its existing products and introduce new products that keep pace with technological developments, respond to evolving customer requirements and achieve market acceptance. In particular, the Company believes it must continue to respond quickly to users' needs for greater functionality, improved usability and support for new hardware and operating systems. Any failure by the Company to respond adequately to technological developments and customer requirements, or any significant delays in product development or introduction, could result in loss of revenues. In the past, the Company has, on occasion, experienced delays in the introduction of new products and product enhancements, primarily due to difficulties with particular operating environments and problems with software provided by third parties. The extent of these delays has varied depending upon the size and scope of the project and the nature of the problems encountered. Such delays have most often resulted from "bugs" encountered in working with new and/or beta-stage versions of operating systems and other third party software, and bugs or unexpected difficulties in existing third party software which complicate integration with the Company's software. From time to time, the Company has discovered bugs in its products which are resolved through maintenance releases or through periodic updates depending upon the seriousness of the defect. There can be no assurance that the Company will be successful in developing and - 7 - marketing new products or product enhancements on a timely basis or that the Company will not experience significant delays or defects in its products in the future, which could have a material adverse effect on the Company. In addition, there can be no assurance that new products or product enhancements developed by the Company will achieve market acceptance or that developments by others will not render the Company's products or technologies obsolete or noncompetitive. International Operations. The Company's revenues from operations outside of North America accounted for approximately 49%, 52% and 53% of the Company's net revenues in 1994, 1995 and 1996, respectively. The Company expects that revenues from international operations will continue to represent a large percentage of its net revenues and that this percentage may increase, particularly as the Company further "localizes" the SPSS product line by translating its products into additional languages and expands its operations through acquisitions of companies outside the United States. International revenues are subject to a number of risks, including greater difficulties in accounts receivable collection, longer payment cycles, exposure to currency fluctuations, political and economic instability and the burdens of complying with a wide variety of foreign laws and regulatory requirements. The Company also believes that it is exposed to greater levels of software piracy in international markets because of the weaker protection afforded to intellectual property in some foreign jurisdictions. As the Company expands its international operations, the risks described above could increase and, in any event, could have a material adverse effect on the Company. Potential Volatility of Stock Price. There has been significant volatility in the market prices of securities of technology companies, including SPSS, and, in some instances, such volatility has been unrelated to the operating performance of such companies. Market fluctuations may adversely affect the price of the Common Stock. The Company also believes factors such as announcements of new products by the Company or its competitors, quarterly variations in financial results, recommendations and reports of analysts, acquisitions and factors beyond the Company's control could cause the market price of the Common Stock to fluctuate substantially. Reliance on Relationships with Third Parties. The Company licenses certain software from third parties. Some of this licensed software is embedded in the Company's products, and some is offered as add-on products. If such licenses are discontinued, or become invalid or unenforceable, there can be no assurance that the Company will be able to develop substitutes for this software independently or to obtain alternative sources in a timely manner. Any delays in obtaining or developing substitutes for licensed software could have a material adverse effect on the Company. In February 1993, the Company entered into an exclusive, worldwide agreement (the "Prentice Hall Agreement") with Prentice Hall, Inc. ("Prentice Hall") under which Prentice Hall publishes and distributes the student version of the Company's software and all of the Company's publications. As a result, the Company is dependent on Prentice Hall for the development and support of the markets for student software and its publications. The failure of Prentice Hall to perform its obligations under the Prentice Hall Agreement adequately could have a material adverse effect on the Company. In January 1997, the Company entered into a Banta Global Turnkey Software Distribution Agreement (the "Banta Agreement"), under which Banta Global Turnkey ("Banta") manufactures, packages, and distributes the Company's software products to the Company's domestic and international customers and certain international subsidiaries. The Banta Agreement has a three-year term and automatically renews thereafter for successive periods of one year. Either party may terminate the Banta Agreement for cause by written notice if the other materially breaches its obligations. Such a termination notice for cause must specifically identify the breach (or breaches) upon which it is based and will be effective 180 days after the notice is received by the other party, unless the breach(es) is (are) corrected during the 180 days. Either party may also terminate the Banta Agreement on 180 days' notice for any other reason. If Banta terminates the Banta Agreement other than for cause, it is required to assist the Company in finding a new vendor. If Banta fails to perform adequately any of its obligations under the Banta Agreement, the Company's operating results could be materially adversely affected. - 8 - Changes in Public Expenditures and Overall Economic Activity Levels. A significant portion of the Company's revenues comes from licenses of its products directly to foreign and domestic government entities. In addition, significant amounts of the Company's revenues come from licenses to academic institutions, healthcare organizations and private businesses which contract with or are funded by government entities. Government appropriations processes are often slow, unpredictable and subject to factors outside the Company's control. In addition, proposals are currently being made in certain countries to reduce government spending. Reductions in government expenditures and termination or renegotiation of government-funded programs or contracts could have a material adverse effect on the Company. In addition, declines in overall levels of economic activity could also have a material adverse impact on the Company. Competition. The market for the statistical software is both highly competitive and fragmented. The Company primarily competes with one general statistical software provider which is larger and has greater resources than the Company, as well as with numerous other companies offering statistical applications software, many of which offer products focused on specific statistical applications. The Company considers its primary worldwide competitor to be the larger and better-financed SAS Institute ("SAS"), although the Company believes that SAS's revenues are derived principally from products that are used for purposes other than statistics and operate on large systems platforms. StatSoft Inc., developers of the Statistica product ("Statistica"), Manugistics Group, Inc., distributors of the Statgraphics Plus product ("Statgraphics"), and Minitab, Inc. ("Minitab") are also competitors, although their annual revenues from statistical products are believed to be considerably less than the revenues of SPSS. In the future, SPSS may face competition from new entrants into the statistical software market. The Company could also experience competition from companies in other sectors of the broader market for data management, analysis and presentation software, such as providers of spreadsheets, database management systems, report writers and executive information systems. These companies have added, or in the future may add, statistical analysis capabilities to their products. Many of these companies have significant name recognition, as well as substantially greater capital resources, marketing experience and research and development capabilities than the Company. There can be no assurance that the Company will have sufficient resources to make the necessary investment in research and development and sales and marketing, or that the Company will otherwise be able to make the technological advances necessary to maintain or enhance its competitive position. The Company's future success will also depend significantly upon its ability to continue to sell its Desktop products, to attract new customers looking for more sophisticated or powerful software and to introduce additional add-on products to existing customers. There can be no assurance that the Company will be able to compete successfully in the future. Dependence on Key Personnel. The Company is dependent on the efforts of certain executives and key employees, including its President and Chief Executive Officer, Jack Noonan. The Company's continued success will depend in part on its ability to attract and retain highly qualified technical, managerial, sales, marketing and other personnel. Competition for such personnel is intense. There can be no assurance that the Company will be able to continue to attract or retain such highly qualified personnel. No life insurance policies are maintained on the Company's key personnel. Intellectual Property; Proprietary Rights. The statistical algorithms incorporated in the Company's software are not proprietary. The Company believes that the proprietary technology constituting a portion of the Company's software determines the speed and quality of displaying the results of computations, the connectivity of the Company's products with third party software and the ease of use of its products. The Company's success will depend, in part, on its ability to protect the proprietary aspects of its products. The Company attempts to protect its proprietary software with trade secret laws and internal nondisclosure safeguards, as well as copyright and trademark laws and contractual restrictions on copying, disclosure and transferability that are incorporated into its software license agreements. The Company licenses its software only in the form of executable code, with contractual restrictions on copying, disclosures and transferability. Except for licenses of its products to users of Large System products and annual licenses of its Desktop products, the Company licenses its products to end-users - 9 - by use of a "shrink-wrap" license that is not signed by licensees, as is customary in the industry. It is uncertain whether such license agreements are legally enforceable. The source code for all of the Company's products is protected as a trade secret and as unpublished copyrighted work. In addition, the Company has entered into confidentiality and nondisclosure agreements with its key employees. Despite these restrictions, it may be possible for competitors or users to copy aspects of the Company's products or to obtain information which the Company regards as a trade secret. The Company has no patents, and judicial enforcement of copyright laws may be uncertain, particularly outside of North America. Preventing unauthorized use of computer software is difficult, and software piracy is expected to be a persistent problem for the packaged software industry. These problems may be particularly acute in international markets. In addition, the laws of certain countries in which the Company's products are or may be licensed do not protect the Company's products and intellectual property rights to the same extent as the laws of the United States. Despite the precautions taken by the Company, it may be possible for unauthorized third parties to reverse engineer or copy the Company's products or obtain and use information that the Company regards as proprietary. There can be no assurance that the steps taken by the Company to protect its proprietary rights will be adequate to prevent misappropriation of its technology. Although the Company's products have never been the subject of an infringement claim, there can be no assurance that third parties will not assert infringement claims against the Company in the future or that any such assertion will not result in costly litigation or require the Company to obtain a license to use the intellectual property of third parties. There can be no assurance that such licenses will be available on reasonable terms, or at all. There can also be no assurance that the Company's competitors will not independently develop technologies that are substantially equivalent or superior to the Company's technologies. Control by Existing Stockholders; Antitakeover Effects. As of November 24, 1997, the Company's executive officers and directors owned beneficially approximately 13% of the outstanding shares of Common Stock. The Norman H. Nie Revocable Trust Dated March 15, 1991 (the "Nie Trust") and affiliates of the Nie Trust are entitled to nominate a director for inclusion in the management slate for election to the Board if the Nie Trust owns no less than 12.5% of the outstanding shares of Common Stock. As of November 24, 1997, the Nie Trust and affiliates of the Nie Trust beneficially owned approximately 12.3% of the outstanding shares of Common Stock. The Company's Certificate of Incorporation and Bylaws contain a number of provisions, including provisions requiring an 80% super majority stockholder approval of certain actions and provisions for a classified Board of Directors, which would make the acquisition of the Company, by means of an unsolicited tender offer, a proxy contest or otherwise, more difficult or impossible. Shares Eligible for Future Sale. The Company is filing the Registration Statement to permit transactions with respect to the shares of Common Stock issued in connection with the Quantime and In2itive transactions. These shares of Common Stock are currently deemed "restricted securities," as defined in Rule 144 under the Securities Act, and may not be resold in the absence of registration under the Securities Act or pursuant to an exemption from such registration, including exemptions provided by Rule 144 under the Securities Act. In addition to the shares of Common Stock which are outstanding, as of November 24, 1997, there were vested options outstanding held by management to purchase approximately an additional 686,971 shares of Common Stock, with an average exercise price of $8.19 per share, and unvested options to purchase approximately an additional 169,972 shares of Common Stock. The Company has also established a stock purchase plan available to employees of the Company, which permits employees to acquire shares of Common Stock at the end of each quarter at 85% of the market price of the Common Stock as of the day after the end of the quarter. No prediction can be made as to the effect, if any, that future sales, or the availability of shares of Common Stock for future sales, will have on the market price prevailing from time to time. Sales of substantial amounts of Common Stock by the Company or by shareholders who hold "restricted securities," or the perception that such sales may occur, could adversely affect prevailing market prices for the Common Stock. - 10 - Accumulated Deficit. The Company had an accumulated deficit of $11,597,000 as of December 31, 1996. SELLING STOCKHOLDERS The following table sets forth the number of shares of Common Stock beneficially owned by each Selling Stockholder as of November 24, 1997, the number of shares of Common Stock that may be offered for the Selling Stockholder's account and the number of shares of Common Stock and based on the number of shares of Common Stock beneficially owned as of November 24, 1997, the percentage of the shares of Common Stock to be beneficially owned by such Selling Stockholder if they elect to sell all of their Shares of Common Stock that are available for sale.
Maximum Shares of Common Number Stock To Be Shares of of Shares Beneficially Owned Common Stock Available Assuming Sale of All Beneficially To Be Sold Shares Available For Name and Address of Owned As of Pursuant Sale Hereunder Selling Stockholder November 26, 1997 Hereto Number Percent - --------------------------------------------------------------------------------------------------------------- Michael Oestreicher 441,635 441,635 0 * TR UA DTD 6/30/97 Edward Sherman Ross Trust 312 Walnut Street, Suite 1400 Cincinnati, OH 45202-4029 Joya Charitable Foundation 88,418 88,418 0 * 312 Walnut Street, Suite 1400 Cincinnati, OH 45202-4029 Min Charitable Trust 16,007 16,007 0 * c/o Richard Cassell Brown & Wood, Princes Court 7 Princes Street London EC2R 8AQ UK M Ross 1,904 1,904 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK J Powell 1,904 1,904 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK - 11 - Maximum Shares of Common Number Stock To Be Shares of of Shares Beneficially Owned Common Stock Available Assuming Sale of All Beneficially To Be Sold Shares Available For Name and Address of Owned As of Pursuant Sale Hereunder Selling Stockholder November 26, 1997 Hereto Number Percent - --------------------------------------------------------------------------------------------------------------- Norman Grunbaum 115,744 115,744 0 * TR UA DTD 6/30/97 Norman Grunbaum Discretionary Settlement c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK Richard Kottler TR UA DTD 6/30/97 Richard Kottler Discretionary Settlement 119,522 119,522 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK International Services SA 27,375 27,375 0 * 7-11 Britannia Place Bath Street St. Helier, Jersey JE4 8US Channel Islands Louis Davidson 2,585 2,585 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK J Marinelli 20,261 20,261 0 * c/o Quantime Corp. 11 East 26th Street, 16th Fl New York, NY 10010 Stephanie Gwilliam 13,117 13,117 0 * 1 Redroofs Close, The Avenue Beckenham, Kent BR3 2YR Tony Legg 10,297 10,297 10,297 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK - 12 - Maximum Shares of Common Number Stock To Be Shares of of Shares Beneficially Owned Common Stock Available Assuming Sale of All Beneficially To Be Sold Shares Available For Name and Address of Owned As of Pursuant Sale Hereunder Selling Stockholder November 26, 1997 Hereto Number Percent - --------------------------------------------------------------------------------------------------------------- Mark Katz 9,530 9,530 9,530 0 * 26 Hoop Lane London NW11 8BU UK Eva Huzan 4,420 4,420 4,420 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK Madeleine Ashbery 3,047 3,047 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK Valerie Griffin 2,455 2,455 0 * c/o Quantime Corp. 100 Merchant Street, Suite 125 Cincinnati, OH 45246 Pete Trotman 2,331 2,331 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK Joni Orgel 2,087 2,087 0 * c/o Quantime Corp. 11 East 26th Street, 16th Fl New York, NY 10010 Adrian Dewey 1,675 1,675 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK Pete Dacosta 761 761 0 * c/o Quantime Corp. 100 Merchant Street, Suite 125 Cincinnati, OH 45246 - 13 - Maximum Shares of Common Number Stock To Be Shares of of Shares Beneficially Owned Common Stock Available Assuming Sale of All Beneficially To Be Sold Shares Available For Name and Address of Owned As of Pursuant Sale Hereunder Selling Stockholder November 26, 1997 Hereto Number Percent - --------------------------------------------------------------------------------------------------------------- Nick Brown 761 761 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK Jonathan Chody 761 761 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK Gail Haslam 609 609 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK Annie McGlone 608 608 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK Alan Renny 536 536 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK Earl Wardally 456 456 0 * c/o Quantime Ltd. 11 East 26th Street, 16th Floor New York, NY 10010 Martin Klein 432 432 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK - 14 - Maximum Shares of Common Number Stock To Be Shares of of Shares Beneficially Owned Common Stock Available Assuming Sale of All Beneficially To Be Sold Shares Available For Name and Address of Owned As of Pursuant Sale Hereunder Selling Stockholder November 26, 1997 Hereto Number Percent - --------------------------------------------------------------------------------------------------------------- Sharon Jordan 334 334 0 * c/o Quantime Corp. 100 Merchant Street, Suite 125 Cincinnati, OH 45246 Heather Dyer 254 254 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK Sue Wooderson 229 229 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK Jonathan Rabson 229 229 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK Jorge Almonacid 197 197 0 * c/o Quantime SA de CV Passeo de la Reforma 90-4 Pisco, Suite 405 Colonia Juarez Mexico Roger Phillips 152 152 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK Louise Weale 152 152 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK - 15 - Maximum Shares of Common Number Stock To Be Shares of of Shares Beneficially Owned Common Stock Available Assuming Sale of All Beneficially To Be Sold Shares Available For Name and Address of Owned As of Pursuant Sale Hereunder Selling Stockholder November 26, 1997 Hereto Number Percent - --------------------------------------------------------------------------------------------------------------- John Taggart 152 152 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK Andi Peretz 152 152 0 * 540 8th Street, Brooklyn New York, NY 11215 Gwen Smith 75 75 0 * c/o Quantime Corp. 11 East 26th Street, 16th Fl New York, NY 10010 Wes Frost 30 30 0 * c/o Quantime Corp. 100 Merchant Street Suite 125 Cincinnati, OH 45246 Sue Jordan 30 30 0 * c/o Quantime Ltd. Maygrove House Maygrove Road London NW6 2EG UK Jens Nielsen 8,838 8,838 0 * Ingas Vag 27 PL. 494 28691 Orkelljunga Sweden Henrik Rosendahl 8,838 8,838 0 * Dyrehavevej 27, I 2930 Klampenborg Denmark Ole Stangegaard 1,087 1,087 0 * Tvaerfej 46 2830 Vitum Denmark - 16 - Maximum Shares of Common Number Stock To Be Shares of of Shares Beneficially Owned Common Stock Available Assuming Sale of All Beneficially To Be Sold Shares Available For Name and Address of Owned As of Pursuant Sale Hereunder Selling Stockholder November 26, 1997 Hereto Number Percent - --------------------------------------------------------------------------------------------------------------- Lars Thinggaard 1,087 1,087 0 * Drosselvej 53 K 2000 Frederiksberg Denmark Peter Tottrup 3,020 3,020 0 * Langelands Plads5, 4th. 2000 Frederiksberg Denmark Edward O'Hara 16,827 16,827 0 * Nattergalevej 16 2970 Horsholm Denmark Steen Hansen 314 314 0 * Snogegardsvej 120 2860 Soborg Denmark Magnus Egholm 97 97 0 * GI. Jernbanevej 26, 1th. 2500 Valby Denmark Mikkel Jorgensen 869 869 0 * Baunehojvej 46, st.tv. 2800 Lyngby Denmark Michael Elbaek Bertelsen 194 194 0 * Lundtofteparken 36, 2th. 2800 Lyngby Denmark Bjame Jensen 543 543 0 * Lilsviervej 81B, 1tv. 2800 Lyngby Denmark Thomas Leistiko 431 431 0 * Arhusgade 10, 1tv. 2100 Kobenhavn O Denmark Dansk Erhvervsinvestering 12,944 12,944 0 * Bredgade 73 1260 Kobenhavn K Denmark - 17 - Maximum Shares of Common Number Stock To Be Shares of of Shares Beneficially Owned Common Stock Available Assuming Sale of All Beneficially To Be Sold Shares Available For Name and Address of Owned As of Pursuant Sale Hereunder Selling Stockholder November 26, 1997 Hereto Number Percent - --------------------------------------------------------------------------------------------------------------- Bjorn Haugland 27,767 27,767 0 * Camilla Collettesvei 8 9258 Oslo Norway 2M Invest 47,541 47,541 0 * Frederiksgade 9 1265 Kobenhavn K Denmark Dorte Siggaard Andersen 1,087 1,087 0 * Malmmosevej 3 2840 Holte MSP Finans 2ApS 5,438 5,438 0 * Parkvaenget 2829 2920 Charlottenlund Hans Chr. Iversen 3,805 3,805 0 * Rungstedvej 97 2960 Rungsted
* The percentage of shares beneficially owned does not exceed 1% of the class. The Company has agreed to register offers, sales and other distributions of the shares of Common Stock of the Selling Stockholders and Donee Stockholders offered hereby under the Securities Act. In this connection, the Selling Stockholders and Donee Stockholders are required to pay the underwriting discounts and commissions and transfer taxes, if any, associated with the sale of their shares of Common Stock, and the Company will pay substantially all of the expenses directly associated with the registration of such shares of Common Stock hereunder. USE OF PROCEEDS The Company will not receive any proceeds from the registration or sale of the shares of Common Stock offered hereby. DIVIDEND POLICY AND RESTRICTIONS The Company has never declared any cash dividends or distributions on its capital stock and does not anticipate paying cash dividends in the foreseeable future. The Company currently intends to retain its future earnings to fund ongoing operations and future capital requirements of its business. PLAN OF DISTRIBUTION The Common Stock may be offered by the Selling Stockholders or Donee Stockholders from time to time in transactions on the Nasdaq National Market, in negotiated transactions, or a combination of such methods of sale, at fixed prices that may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. The Selling Stockholders or Donee Stockholders may effect such transactions by the sale of the Common Stock to or through broker-dealers, and such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the Selling Stockholders, Donee Stockholders and/or the purchasers of the Common Stock for whom such broker-dealers may act as agent or to whom they may sell as principal, or both (which compensation to a particular broker-dealer might be in excess of customary commissions). The Selling Stockholders, Donee Stockholders and any - 18 - broker-dealer who acts in connection with the sale of Common Stock hereunder may be deemed to be "underwriters" as that term is defined in the Securities Act, and any commission received by them and profit on any resale of the Common Stock as principal might be deemed to be underwriting discounts and commissions under the Securities Act. No prediction can be made as to the effect, if any, that future sales, or the availability of shares of Common Stock for future sales, will have on the market price prevailing from time to time. See "RISK FACTORS -- Shares Eligible for Future Sale" elsewhere in this Prospectus. The Company is filing a registration statement to permit transactions with respect to all of the shares of SPSS Common Stock acquired by former shareholders of Quantime and In2itive in connection with the acquisitions of Quantime and In2itive. These shares are currently "restricted securities," as defined in Rule 144 under the Securities Act, and may not be resold in the absence of registration under the Securities Act or pursuant to an exemption from such registration, including exemptions provided by Rule 144 under the Securities Act. LEGAL MATTERS The validity of the shares of Common Stock was passed upon for the Company by its general counsel, Ross & Hardies, Chicago, Illinois. EXPERTS The Consolidated Financial Statements and Schedule of the Company as of December 31, 1996 and 1995, and for each of the years in the three-year period ended December 31, 1996, incorporated by reference in this Prospectus and elsewhere in the Registration Statement, have been audited by KPMG Peat Marwick LLP, independent certified public accountants, as indicated in their report with respect thereto, incorporated by reference herein, and are incorporated by reference herein upon the authority of said firm as experts in accounting and auditing. With respect to SPSS Inc.'s unaudited interim financial information for the periods ended March 31, 1996 and 1997, June 30, 1996 and 1997, and September 30, 1996 and 1997, incorporated by reference herein, the independent certified public accountants have reported that they applied limited procedures in accordance with professional standards for a review of such information. However, their separate reports included in the Company's quarterly reports on Form 10-Q for the quarters ended March 31, 1997, June 30, 1997, and September 30, 1997, state that they did not audit and they do not express an opinion on such interim financial information. Accordingly, the degree of reliance on their reports on such information should be restricted in light of the limited nature of the review procedures applied. The accountants are not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their reports on the unaudited interim financial information because such reports are not a "report" or a "part" of the registration statement prepared or certified by the accountants within the meaning of Sections 7 and 11 of the Securities Act of 1933. - 19 - - -------------------------------------------------------------------------------- NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION 1,031,951 Shares OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN SPSS INC. AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY COMMON STOCK CIRCUMSTANCES CREATE AN IMPLICATION ($.01 PAR VALUE) THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH _________________ OFFER OR SOLICITATION IS NOT AUTHORIZED Prospectus OR IN WHICH THE PERSON MAKING SUCH OFFER _________________ OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR TABLE OF CONTENTS SOLICITATION IS NOT Dated November ___, 1997 QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. TABLE OF CONTENTS Page Available Information........................................ 2 Incorporation of Certain Documents by Reference.............. 2 The Company.................................................. 4 Risk Factors................................................. 6 Selling Stockholders........................................ 11 Plan of Distribution........................................ 17 Use of Proceeds..............................................16 Dividend Policy and Restrictions............................ 17 Legal Matters............................................... 17 Experts..................................................... 17 - -------------------------------------------------------------------------------- - 20 - PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution The following table sets forth various estimated fees and estimated expenses in connection with the sale and distribution of the securities being registered, all of which are being borne by the registrant. SEC registration fee.................................$ 7,094.66 Printing expenses....................................$ 1,000.00 ------------- Legal fees and expenses..............................$ 20,000.00 Accounting fees and expenses.........................$ 30,000.00 Miscellaneous........................................$ 1,905.34 ------------- Total......................................$ 60,000.00 ============ Item 15. Indemnification of Directors and Officers Delaware General Corporation Law. The Company has statutory authority to indemnify the officers and directors. The applicable provisions of the General Corporation Law of the State of Delaware (the "GCL") state that, to the extent such person is successful on the merits or otherwise, a corporation may indemnify any person who was or is a party or who is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise ("such Person"), against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement, actually and reasonably incurred by such Person, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. In any threatened pending or completed action by or in the right of the corporation, a corporation also may indemnify any such Person for costs actually and reasonably incurred by him in connection with that action's defense or settlement, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation; however, no indemnification shall be made with respect to any claim, issue or matter as to which such Person shall have been adjudged to be liable to the corporation, unless and only to the extent that a court shall determine that such indemnity is proper. Under the applicable provisions of the GCL, any indemnification shall be made by the corporation only as authorized in the specific case upon a determination that the indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct. Such determination shall be made: (1) By the Board of Directors by a majority vote of a quorum consisting of directors who are not parties to such action, suit or proceeding; or (2) If such a quorum is not obtainable or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion; or (3) By the affirmative vote of a majority of the shares entitled to vote thereon. - 21 - The Company's Certificate of Incorporation provides for indemnification to the full extent permitted by the laws of the State of Delaware against and with respect to threatened, pending or completed actions, suits or proceedings arising from or alleged to arise from, a party's actions or omissions as a director, officer, employee or agent of the Company or of any subsidiary of the Company or of any other corporation, partnership, joint venture, trust or other enterprise which he has served in such capacity at the request of the Company if such acts or omissions occurred or were or are alleged to have occurred, while said party was a director or officer of the Company. - 22 - Item 16. Exhibits Incorporation by Exhibit Reference Number Description (if applicable) 2.1 Stock Purchase Agreements - Quantime * 2.2 Stock Purchase Agreement - In2itive 5.1 Opinion of Ross & Hardies regarding legality of shares of Common Stock 15.1 Letter Re: Unaudited Interim Financial Information 23.1 Consent of KPMG Peat Marwick LLP 23.2 Consent of Ross & Hardies (contained in opinion described in 5.1) 24.1 Power of Attorney * * * Two Stock Purchase Agreements, each dated September 30, 1997, between SPSS and certain shareholders of Quantime are included as an exhibit to the Company's report on Form 8-K filed with the Commission on October 15, 1997. The remaining Stock Purchase Agreement is being filed herewith. * * Included in signature pages. (b) The Company did not file any reports on form 8-K during fiscal year 1995 or for the first two quarters of fiscal year 1996. The Company filed reports on Form 8-K with the Commission on October 11, 1996 (acquisition of Clear Software), and on December 4, 1996 (acquisition of Jandel Corporation), and on October 15, 1997 (acquisition of Quantime Limited). Item 17. Undertakings The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. - 23 - (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in the Registration Statement. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X is not set forth in the Prospectus, to deliver, or cause to be delivered to each person to whom the Prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the Prospectus to provide such interim financial information. - 24 - SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on November 26, 1997. SPSS INC. By: /s/ Jack Noonan Jack Noonan President and Chief Executive Officer - 25 - POWER OF ATTORNEY Each person whose signature appears below hereby constitutes and appoints Jack Noonan and Edward Hamburg, and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in furtherance of the foregoing, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on November 26, 1997. Signature Title(s) /s/ Norman H. Nie Norman H. Nie Chairman of the Board of Directors /s/ Jack Noonan Jack Noonan President, Chief Executive Officer and Director /s/ Edward Hamburg Edward Hamburg Executive Vice President, Corporate Operations, Chief Financial Officer and Secretary /s/ Robert Brinkmann Robert Brinkmann Controller and Assistant Secretary (Chief Accounting Officer) /s/ Bernard Goldstein Bernard Goldstein Director /s/ Frederic W. Harman Frederic W. Harman Director /s/ Merritt Lutz Merritt Lutz Director /s/ Michael Blair Michael Blair Director - 26 - SPSS INC. EXHIBIT INDEX Location of Document Exhibit in Sequential No. Description of Document Numbering System 2.1 Third Stock Purchase Agreement - Quantime 2.2 Stock Purchase Agreement - In2itive 5.1 Opinion of Ross & Hardies regarding legality of shares of Common Stock (includes consent of Ross & Hardies) 15.1 Letter re: Unaudited Interim Financial Statements 23.1 Consent of KPMG Peat Marwick LLP 24.1 Power of Attorney * * Included in signature pages. - 27 - EX-2.1 2 QUANTIME ACQUISITION AGREEMENT STOCK PURCHASE AGREEMENT By and Among SPSS INC. and THE SHAREHOLDERS OF QUANTIME LIMITED LISTED ON THE SIGNATURE PAGES HEREOF Dated as of November 21, 1997 STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT, dated as of November 21, 1997, (the "Agreement"), by and among SPSS INC., a Delaware corporation ("SPSS") and the shareholders of Quantime Limited, a corporation incorporated under the laws of England with Registered Number 1400578 ("Quantime") listed on the signature pages of this Agreement (hereinafter collectively referred to as the "Quantime Shareholders"). W I T N E S S E T H: WHEREAS, Quantime is engaged in the business of developing and distributing market research software encapsulating strong data collection, tabulation, on-screen analysis and EIS capabilities; WHEREAS, the respective Boards of Directors of each of Quantime, and SPSS have determined that it is advisable and for the benefit of their corporations and their respective shareholders that Quantime be acquired by SPSS by means of the acquisition from the Quantime Shareholders of the outstanding capital shares of Quantime, comprised of Class "A" 1 pence ordinary shares, Class "B" 1 pence ordinary shares and Class "C" US$0.01 ordinary shares (collectively, the "Shares") including those represented by bearer warrants (the "Warrants") held by the Quantime Shareholders, 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, on September 30, 1997, SPSS acquired 96.8384% of the issued and outstanding Shares from certain UK-connected and non-UK connected shareholders of Quantime (collectively, the "Majority Shareholders"), pursuant to those certain Stock Purchase Agreements dated as of September 30, 1997 (such Stock Purchase Agreements are hereinafter collectively referred to as the "Prior Agreements") between SPSS, the Majority Shareholders and Edward Ross, Richard Kottler, Norman Grunbaum and Louis Davidson. WHEREAS, the Quantime Shareholders own of record and beneficially 3.1616% of the issued and outstanding Shares; WHEREAS, for United States federal income tax purposes, it is intended that this transaction qualify as a reorganization under the provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the "Code"), and that for United Kingdom taxation purposes, the transaction likewise qualify as a reorganization (or the United Kingdom equivalent thereof) under the provisions of applicable tax laws of the United Kingdom; and WHEREAS, for United States 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, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and in reliance upon the representations and warranties contained herein, the parties hereto agree as follows: 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 Quantime Shareholders shall sell, assign, transfer and deliver the Shares owned by them to SPSS, and SPSS shall purchase the Shares owned by the Quantime Shareholders from the Quantime Shareholders, for an aggregate purchase price consisting of the items and amounts set forth in Section 1.3 hereof (the "Purchase Price") payable pursuant to the terms provided in Section 1.3 hereof. The Quantime Shareholders hereby represent, warrant and covenant that (a) the Quantime Shareholders own and have good title to the Shares, free and clear of any lien, pledge, claim, encumbrance, restriction or right of any third party of any kind; (b) at the Closing, SPSS will acquire good title to the Shares owned by the Quantime Shareholders free and clear as aforesaid, including without limitation any of the foregoing set forth in the Memorandum of Association of Quantime; and (c) the Shares owned by the Quantime Shareholders represent the only equity interest of the Quantime Shareholders in Quantime. Each of the Quantime Shareholders waives any rights of pre-emption and rights of first refusal in relation to sales or transfers of the Shares owned by the Quantime Shareholders, whether under the Articles of Association of Quantime or otherwise. 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 Berwin Leighton in London forthwith on this Agreement being executed. 1.3 Payment of Purchase Price. Upon satisfaction of all matters set forth in Article VIII hereof (the "Closing Date"), SPSS shall deliver to the Quantime Shareholders the Purchase Price consisting of 28,175 shares of SPSS Common Stock (the "Total Shares" or "Acquisition Stock") to be allocated between the Quantime Shareholders as set forth in Schedule 1.3 hereof. Only whole shares of SPSS Common Stock will be issued in connection with the Acquisition. In lieu of fractional shares, each Quantime 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 on September 30, 1997. No such shareholder will be entitled to dividends, voting rights or other rights in respect of any such fractional share. 1.4 Tax and Accounting. The parties hereto shall each use all reasonable efforts to cause the transactions contemplated hereunder to be treated as (i) a 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. 2 ARTICLE II SECURITIES MATTERS 2.1 Registration of SPSS Common Stock. (a) SPSS shall prepare and file with the United States Securities and Exchange Commission ("SEC") as soon as practicable, subject to review by the Quantime Shareholders, (but in no event later than 90 days after the Closing) a registration statement on Form S-3 and/or Form S-4, as appropriate (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 SPSS Common Stock for the account of the Quantime Shareholders. SPSS expects to have published audited financial results, covering at least thirty (30) days of the combined operations of SPSS and Quantime following the Acquisition, not later than March 31, 1998. SPSS shall use all reasonable efforts to have the Registration declared effective by the SEC promptly after filing. To the extent that shares of SPSS Common Stock are not acquired by a Quantime Shareholder pursuant to an effective registration statement on Form S-4, SPSS shall use all reasonable efforts 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 Quantime 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 shares of SPSS Common Stock have been sold by the Quantime Shareholders (the "Trading Period"). While any Form S-3 Registration Statement remains in effect, SPSS may at any time deliver to the Quantime 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 Quantime 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 Quantime Shareholders were instructed to refrain from selling shares of SPSS Common Stock during all Blackout Periods. 3 (b) The Quantime 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. (c) SPSS shall not grant to any holder of shares of SPSS Common Stock registration rights which interfere with the rights of the Quantime Shareholders and the obligations of SPSS under this Article II. (d) Prior to such date as financial results covering at least thirty (30) days of post-Acquisition combined operations of SPSS and Quantime have been published within the meaning of Section 201-01 of the SEC's Codification of Financial Reporting Policies (such date is hereinafter referred to as the "Earnings Release Date"), SPSS will not take any action for which it would be required to file a Form 8-K under Item 1 or Item 2 thereof. 2.2 Sales of SPSS Common Stock by the Quantime Shareholders. If at any time prior to the effectiveness of the Registration Statement any Quantime Shareholder elects to sell all or any of his shares of SPSS Common Stock, such Quantime Shareholder shall conduct such sales only through registered securities brokers ("Brokers"). 2.3 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 the Quantime Shareholders' counsel or otherwise incurred by the Quantime 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 Quantime Shareholder. 2.4 Restricted Stock. Quantime has advised the Quantime Shareholders, and the Quantime Shareholders understand and agree, as follows: (a) That the shares of SPSS Common Stock to be received by the Quantime Shareholders pursuant to this Agreement 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 SPSS Common Stock to be received by the Quantime Shareholders pursuant to this Agreement except in compliance with the provisions of the Act. Any proposed transferee of the shares of SPSS Common Stock shall agree to take and hold such securities upon the conditions set forth in Section 2.4(c) hereof. (c) Until such time as the shares being sold hereunder to the Quantime Shareholders may be sold under Rule 144(k), each certificate representing the shares of SPSS Common Stock issued to the Quantime Shareholders shall be stamped or otherwise imprinted 4 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 IN A PRIVATE PLACEMENT. SUCH SHARES MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE UNITED STATES IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 OR AN EXEMPTION THEREFROM OR IN CONTRAVENTION OF THE AGREEMENT COVERING THE 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 shares being sold hereunder to the Quantime Shareholders may be sold under the circumstances described in Rule 144(k) (or any successor rule or regulation) and there exists no other restriction on the sale of stock imposed subsequent to the date hereof, SPSS will, upon request of the Quantime Shareholders, cause SPSS' transfer agent to exchange the shares legended as set forth above for unlegended shares. (d) Unless a registration statement under the Act covering transactions in the SPSS Common Stock to be received by the Quantime 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 Quantime Shareholders pursuant to this Agreement shall comply in all respects with the provisions of this Section 2.4. 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' 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. 2.5 Indemnification; Contribution. In the event any SPSS Common Stock held by a Quantime Shareholder is included in a registration statement under this Article II: 5 (a) SPSS will indemnify and hold harmless such Quantime Shareholder, any underwriter (as defined in the Act) for such Quantime Shareholder and each person, if any, who controls such Quantime Shareholder or underwriter within the meaning of the Act or the 1934 Act, against any losses, claims, damages, liabilities (joint or several) or expenses to which they may become subject under the Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages, liabilities (or actions in respect thereof) or expenses 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, 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 Quantime 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 2.5(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, action or expense if such settlement is effected without the consent of SPSS, which consent shall not be unreasonably withheld, nor shall SPSS be liable in any such case for any such loss, claim, damage, liability, action or expense 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 Quantime Shareholder or any controlling person of such Quantime Shareholder expressly for use in connection with such registration. (b) Such Quantime 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, liabilities (joint or several) or expenses 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, liabilities (or actions in respect thereto) or expenses 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 Quantime Shareholder expressly for use in connection with such registration; and such Quantime Shareholder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this subsection 2.5(b), in connection with investigating or defending any such loss, claim, damage, liability, action or expense; provided, however, that the indemnity agreement contained in this subsection 2.5(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, action or expense if such settlement is effected without the consent of such Quantime Shareholder, which consent shall not be unreasonably withheld or delayed; provided, that, in no event shall any indemnity under this subsection 2.5(b) exceed the gross proceeds from the offering of the shares of SPSS Common Stock received by such Quantime Shareholder. SPSS 6 shall make the Registration Statement available to the Quantime Shareholders for comment prior to the filing thereof. (c) Promptly after receipt by an indemnified party under this Section 2.5 of notice of 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 2.5, deliver to the indemnifying party a written notice of the commencement thereof 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 written notice to the indemnifying party within a reasonable time of the 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 2.5. (d) If the indemnification provided for in this Section 2.5 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 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. 2.6 Additional Obligations of SPSS. With respect to any registration hereunder, SPSS shall: 7 (a) furnish to the Quantime 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) use reasonable efforts to notify the NASDAQ Stock Market of the issuance of the shares of SPSS Common Stock covered by such registration statement and list such shares; and (d) notify each Quantime 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 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. 2.7 Reports Under the Exchange Act. With a view to making available to the Quantime 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 Quantime 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 Quantime 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 Quantime Shareholder of any rule or regulation of the SEC permitting the selling of any securities of SPSS held by it without registration. 8 ARTICLE III REPRESENTATIONS AND WARRANTIES OF SPSS SPSS represents and warrants to the Quantime Shareholders as follows: 3.1 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. 3.2 Authority. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by SPSS and, no other corporate proceedings on the part of SPSS 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 constitute legal, valid and binding agreements of SPSS. 3.3 Consents and Approvals. 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 SPSS to consummate the transactions contemplated hereby and fully perform its obligations hereunder. 3.4 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 SPSS is bound. 3.5 Acquisition Stock. The Acquisition Stock, when delivered in accordance with this Agreement, shall be duly authorized, validly issued, fully paid and nonassessable. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE QUANTIME SHAREHOLDERS The Quantime Shareholders severally represent and warrant to SPSS as follows: 4.1 Authority. The Quantime Shareholders, on their own behalf, and the attorneys-in-fact executing and delivering this Agreement on behalf of any such Quantime Shareholders, have 9 full power, capacity and authority (corporate or otherwise) to execute and deliver this Agreement, and all documents and instruments executed and delivered in connection therewith, and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and such other documents and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by all necessary action on the part of each of the Quantime Shareholders and no other proceedings (corporate or otherwise) on the part of any of the Quantime Shareholders are necessary to authorize this Agreement and such documents or to consummate the transactions contemplated hereby and thereby. This Agreement and the other agreements contemplated by this Agreement have been duly and validly executed and delivered by or on behalf of each of the Quantime Shareholders and constitute legal, valid and binding agreements of the Quantime Shareholders. ARTICLE V COVENANTS OF THE QUANTIME SHAREHOLDERS The Quantime Shareholders, jointly and severally, covenant as follows: 5.1 Consents and Approvals. The Quantime 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 the Quantime 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. The Quantime Shareholders waive any pre-emption rights and rights of first refusal in relation to the Shares, whether under the Articles of Association of Quantime or otherwise. 5.2 Cost of Shares. Upon request by SPSS, the Quantime Shareholders will provide SPSS with information relating to, and including, the consideration paid by the Quantime Shareholders for the Shares owned by the Quantime Shareholders at the time of acquisition of such Shares. 5.3 Further Assurances. The Quantime 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. 5.4 Power of Attorney. Pending the entry of SPSS onto Quantime's share register, each of the Quantime Shareholders will grant to SPSS an irrevocable power of attorney to exercise all rights relating to the Shares to the same extent and with the same effect as if SPSS had been entered on such share register. 10 ARTICLE VI COVENANTS OF SPSS SPSS covenants as follows: 6.1 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 VII MUTUAL COVENANTS Each of the parties hereto covenants as follows: 7.1 Confidentiality. Except as otherwise required by law or judicial or administrative proceedings, including proceedings between the parties with respect to the transactions contemplated hereby, and then only to the extent specifically required by such proceedings, and except for public announcements 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 of Quantime 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 of Quantime 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 at the time of the disclosure or becomes publicly known through no wrongful act or failure of Quantime, the Quantime Shareholders or SPSS, (ii) is disclosed by a third party which does not have a confidential relationship with either Quantime, the Quantime Shareholders or SPSS, and which was rightfully acquired by a 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. 7.2 Consistent Tax Reporting. The parties agree for tax purposes to report the transactions contemplated by this Agreement, and to treat any subsequent related transactions 11 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 appropriate for all relevant tax purposes relating to the transactions contemplated by this Agreement. ARTICLE VIII CLOSING DELIVERIES The following deliveries shall be made at the Closing: 8.1 Delivery of Share Certificates and Stock Transfers. The Quantime Shareholders shall deliver to SPSS the share certificates and related signed stock transfers in respect of the other Shares. 8.2 Delivery of Closing Documents. The Quantime Shareholders shall deliver to SPSS all other instruments and documents required hereunder. 8.3 Consents. The Quantime Shareholders shall deliver to SPSS all consents and approvals required in connection with the performance by the Quantime Shareholders of their respective obligations under this Agreement and the consummation by the Quantime Shareholders of the transactions contemplated hereby and thereby. SPSS shall deliver to the Quantime 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 and thereby. 8.4 Repayment of Amounts Owed. The Quantime Shareholders shall repay, or cause to be repaid, all amounts owing on the Closing Date to Quantime and the subsidiaries of Quantime from the directors of any of them and from the Quantime Shareholders, whether due for payment or not. 8.5 Resolutions of Certain Quantime Shareholders. Each Quantime Shareholder that is not an individual or is not acting individually and on his or her own behalf, shall execute and deliver to SPSS certified resolutions authorizing the execution and delivery by such Quantime Shareholder of this Agreement and the documents related thereto, and performance by such Quantime Shareholder of the transactions contemplated hereby and thereby. 8.6 Further Assurances. Each party shall deliver, or cause to be delivered, all other documents required to be delivered by it at the Closing to 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. 12 ARTICLE IX SURVIVAL AND INDEMNIFICATION 9.1 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 delivery to SPSS of SPSS' year-end audited financial statements by SPSS' outside auditors (the "Audit Release Date"). All covenants contained herein shall survive until performed fully. 9.2 Indemnification. (a) Subject to and as modified by Section 9.2(b), the Quantime 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, interest, 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 any breach of any representation, warranty or covenant made by the Quantime Shareholders set forth herein. (b) The aggregate of all indemnities to be provided to SPSS pursuant to this Article IX (an "Indemnification Payment") shall not exceed an amount equal to ten percent (10%) of the Total Shares (the "Cap"). Notwithstanding the foregoing, the Cap shall not apply to the indemnities provided in this Agreement for any fraud, willful misconduct, gross negligence or criminal action on the part of the Quantime Shareholder engaging in such fraud, willful misconduct, gross negligence or criminal action, and notwithstanding anything contained or implied in this Agreement, the indemnity obligations set forth herein above in this sentence shall survive the Closing without limitation except as provided by the applicable statute of limitations (including any extension of said statute of limitations). 9.3 Indemnification by SPSS. SPSS agrees to indemnify and hold the Quantime Shareholders and their 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 any breach of any representation, warranty or covenant of SPSS set forth herein. Any indemnification made by SPSS under this section 9.3 shall be in SPSS Common Stock, valued at the closing price of SPSS Common Stock on September 30, 1997. 9.4 Indemnification Procedure. (a) An indemnified party under this Article IX 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, shall assume the defense thereof or other 13 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); provided, however, that the indemnified party may settle any 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 the results of arbitration, conducted in accordance with Section 9.5 hereof, determines that the indemnifying party must indemnify the indemnified party therefor. Notwithstanding anything in this Section 9.4 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. 9.5 Arbitration. Any dispute as to any claims under this Agreement shall be settled by arbitration in Wilmington, Delaware by three arbitrators, one of whom shall be appointed by the Quantime Shareholders, one by SPSS and the third of whom shall be appointed by the first two arbitrators. If either party fails to appoint an arbitrator within 30 days of a request in writing by the other party to do so or if the first two arbitrators cannot agree on the appointment of a third arbitrator within 20 days of their designation, then such arbitrator shall be appointed by the Chief Judge of the United States District Court for the District of Delaware. Except as to the selection of arbitrators which shall be as set forth above, the arbitration shall be conducted promptly and expeditiously in accordance with the commercial arbitration rules of the American Arbitration Association so as to enable the arbitrators to render an award within 90 days of the commencement of the arbitration proceedings. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The costs of the arbitration and the arbitrator shall be allocated as provided in the results of the arbitration. 9.6 Treatment as Adjustment of Purchase Price. Any indemnity payment received by a party hereunder shall be treated as an adjustment of the purchase price. However, in the event 14 that the Internal Revenue Service, Inland Revenue or any other taxing authority determines that such indemnity payment constitutes taxable gain or income to the indemnified party, the indemnifying party shall increase the amount otherwise required to be paid so that the indemnified party, receives, on an after-tax basis, an amount equal to the amount it would have received had the indemnity not resulted in taxable gain or income. 9.7 Limited Remedies. SPSS shall have no cause of action against the Quantime Shareholders for matters arising out of the sale to SPSS of Shares of Quantime other than the contractual remedies contained herein or in ancillary documents executed and delivered in connection with the transactions contemplated hereby, and claims sounding in fraud, misrepresentation under United States laws, equitable estoppel and promissory estoppel. SPSS acknowledges that it has not been induced to enter into this Agreement by any representation, warranty, promise or assurance by the Quantime Shareholders or any other person other than those specifically contained in this Agreement or in ancillary documents executed and delivered in connection with the transaction contemplated hereby. ARTICLE X MISCELLANEOUS 10.1 Amendment and Modification. Subject to applicable law, this Agreement may be amended, modified and supplemented by written agreement of the parties. 10.2 Waiver of Compliance. Any failure of the Quantime 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. 10.3 Expenses. Payment of the reasonable fees and expenses incurred by the Quantime Shareholders solely in connection with the Acquisition of the Shares of the Quantime Shareholders under this Agreement shall be made by SPSS. SPSS agrees to pay the fees and disbursements of Simmons & Simmons in acting for the Quantime Shareholders in relation to this Agreement. 10.4 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: 15 (a) If to I.M. Katz, G. Haslam, A.D. Renny, M. Klein, H.J.S. Dyer, S. Wooderson, J. Rabson and/or R. Phillips, addressed to such Quantime Shareholder, to: c/o Quantime Limited Maygrove House 67 Maygrove Road London NW6 2EG, ENGLAND Facsimile No.: 44 171 624 5297 (b) If to J. Almonacid, to: J. Almonacid c/o Quantime S.A. de C.V. Paseo de la Reforma 90-4 Piso Suite 405 Colonia Juarez Mexico DF 06600 Facsimile No.: 00 52 5 535 6657 (c) If to Min Charitable Trust, to: Min Charitable Trust c/o Brown & Wood Princes Court 7 Princes Street London EC2R 8AQ, ENGLAND Attention: Richard Cassell Facsimile No.: 0171 796 1807 as to each of (a), (b) and (c), with a copy to: Simmons & Simmons 14 Dominion Street London EC2M 2RJ, ENGLAND Attention: Jane Newman/Catherine Moss Facsimile No.: 0171 628 2070 or to such other person or address as the Quantime Shareholders shall furnish to SPSS in writing by notice given in the manner set forth above. 16 (b) If to SPSS, to: SPSS Inc. 444 North Michigan Avenue Chicago, Illinois 60611 Attention: Mr. Edward Hamburg Facsimile No.: (312) 329-3558 with a copy to: Ross & Hardies 150 North Michigan Avenue, Suite 2500 Chicago, Illinois 60601 Attention: T. Stephen Dyer, Esq. Facsimile No.: (312) 750-8600 or to such other person or address as SPSS shall furnish to the Quantime Shareholders in writing by notice given in the manner set forth above. 10.5 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 shall issue to the Quantime Shareholders the SPSS Common Stock as provided herein. 10.6 Publicity. Neither the Quantime 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, nor shall the Quantime Shareholders cause or permit Quantime to do so. 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. 10.7 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. 17 10.8 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. 10.9 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 Federal Courts of Illinois for the resolution of any disputes which may arise under or with respect to compliance with this Agreement. 10.10 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. 10.11 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. 10.12 References to Laws. References to particular statutes within this Agreement, to the extent such references relate to laws other than the laws of the United States or any particular State thereof, are intended to refer, and shall be construed as referring, to laws of the United Kingdom. 10.13 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. 10.14 Trustees. To the extent signatories hereto are trustees or attorneys-in-fact, the parties acknowledge and agree that such persons are executing and delivering this Agreement and consummating the transactions contemplated hereby solely in their capacity as such trustees and attorneys-in-fact and not individually, and further, that said trustees and attorneys-in-fact shall have no personal liability in connection therewith. With respect to Quantime Shareholders which are trusts or foundations, claims under the Agreement are limited to trust assets and the Shares and no claims will be made against the trustees, attorneys-in-fact and officers acting in their capacity as such. The provisions of this Section 10.14 shall apply with equal force to and shall be deemed to be incorporated by reference in all ancillary documents signed by signatories who are trustees or attorneys-in-fact and who execute any ancillary documents in connection with the transactions contemplated by this Agreement. 10.15 Investment in the Common Stock. As of the Closing Date, each of the Quantime Shareholders (as to himself or herself and not as to any other Quantime Shareholder): (i) has received and carefully reviewed copies of the SPSS Reports (hereinafter defined); (ii) has evaluated, and/or his or her business, tax and/or other legal advisors have evaluated and advised 18 such Quantime Shareholder as to the merits, disadvantages and risks of an investment in SPSS Common Stock; (iii) acknowledges that, in reliance upon these representations, SPSS is not registering the issuance of the SPSS Common Stock under the Act prior to the Closing Date; (iv) acknowledges that the SPSS Common Stock may not be resold except in a transaction which is registered under the Act or which is exempt from such registration requirements and that SPSS will cause a legend setting forth such restrictions to be placed on each certificate representing the SPSS Common Stock and will make appropriate notations in its records and the records of its transfer agent with respect thereto; (v) recognizes the speculative nature of the SPSS Common Stock and is able to bear the economic risk of the investment he or she is making in SPSS Common Stock by reason of the transactions contemplated by this Agreement; (vi) is acquiring the SPSS Common Stock for his or her own account, as principal, for investment purposes only and without a view to the resale, transfer or other distribution thereof except in a sale registered under the Act or in a transaction exempt from the registration requirements of the Act; (vii) acknowledges 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; and (viii) has been afforded an opportunity to ask questions and receive answers concerning SPSS and its operations, business and financial condition, the SPSS Common Stock and the terms and conditions of this Agreement and has received any additional information concerning SPSS and its operations, business and financial condition, the SPSS Common Stock and this Agreement that such Quantime Shareholder has reasonably requested. 19 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as an agreement under hand (in the case of SPSS) and as a deed (in the case of the Quantime Shareholders), all as of the day and year first written above. SPSS: SPSS INC., a Delaware corporation By: /s/ Jack Noonan Name: Jack Noonan Title: President 20 THE QUANTIME SHAREHOLDERS: /s/ I.M. KATZ /s/ G. Haslam I.M. KATZ G. HASLAM /s/ A.D. Renny /s/ M. Klein A.D. RENNY M. KLEIN /s/ H.J.S. Dyer /s/ S. Wooderson H.J.S. DYER S. WOODERSON /s/ J. Rabson /s/ R. Phillips J. RABSON R. PHILLIPS /s/ J. Almonacid J. ALMONACID TRUSTEES OF MIN CHARITABLE TRUST By: /s/ Richrad A. Cassell Name: Richard A. Cassell Title: Trustee By: Name: Title: 21 SCHEDULE 1.3 Min Charitable Trust 16,007 I.M. Katz 9,530 G. Haslam 609 A.D. Renny 536 M. Klein 432 H.J.S. Dyer 254 S. Wooderson 229 J. Rabson 229 J. Almonacid 197 R. Phillips 152 22 EX-2.2 3 IN2ITIVE TECHNOLOGIES A/S PURCHASE AGREEMENT EXHIBIT 2.2 STOCK PURCHASE AGREEMENT By and Among SPSS INC., JENS NIELSEN, HENRIK ROSENDAHL, OLE STANGEGAARD, LARS THINGGAARD, EDWARD O'HARA, BJORN HAUGLAND, 2M INVEST and the Shareholders listed on Exhibit A Dated as of November 21, 1997 STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT, dated as of November 21, 1997, (the "Agreement"), by and among Jens Nielsen, Henrik Rosendahl, Ole Stangegaard, Lars Thinggaard, Edward O'Hara, Bjorn Haugland, 2M Invest (the "Key Shareholders") and certain other shareholders of In2itive listed on Exhibit A (when taken together with the Key Shareholders, the "Shareholders"), and SPSS Inc., a Delaware corporation ("SPSS"). W I T N E S E T H: WHEREAS, In2itive Technologies A/S, a Danish corporation ("In2itive") is engaged in the business of developing and distributing software; WHEREAS, the respective Boards of Directors of In2itive and SPSS have determined that it is advisable and for the benefit of their corporations and their respective shareholders that In2itive be acquired by SPSS by means of the acquisition of all the outstanding capital stock of In2itive, DKK50 par value per share, on the terms and conditions set forth hereinafter (the "Shares"), held by the Shareholders in exchange for shares of common stock, $.01 par value per share of SPSS (the "SPSS Common Stock"), to be determined pursuant to the terms set forth herein; WHEREAS, the Shareholders own of record and beneficially all of the issued and outstanding Shares; 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, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and in reliance upon the representations and warranties contained herein, the parties hereto agree as follows: 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 and the attached schedules which shall form an integral part of 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 the aggregate purchase price set forth in Section 1.2 hereof (the "Purchase Price") payable pursuant to the terms provided in Section 1.2 hereof. 1.2 Payment of Purchase Price. Upon satisfaction of all the terms and conditions set forth in this Agreement, on the Closing date SPSS shall deliver the Purchase Price. consisting of 145,000 shares of SPSS Common Stock, reduced by the number of shares of SPSS Common Stock having an aggregate value on the Closing Date (calculated based upon the closing price of SPSS Common Stock on November 3, 1997) not to exceed $99,163, representing the fees and expenses to be borne by the Shareholders in respect hereof and paid by SPSS, as more fully described in Section 16.3 hereof (the "Total Shares"), to be paid as follows (a) the Shareholders shall receive an aggregate of ninety percent (90%) of the Total Shares to be allocated between the Shareholders as set forth in Schedule 1.2 hereof, and (b) ten percent (10%) of the Total Shares (the "Escrowed Shares") shall be held in escrow in accordance with Article III hereof. Only whole shares of SPSS Common Stock will be issued in connection with the Acquisition. 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 on November 3, 1997. No such shareholder will be entitled to dividends, voting rights or other rights in respect of any such fractional share. 1.3 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 Gorrissen Federspiel Kierkegaard, H.C, Copenhagen, Denmark, at 9:00 a.m., on November 21, 1997 (the "Closing Date") or such other place or time as the parties may agree. 1.4 Accounting. The parties hereto shall each use their best efforts to cause the transactions contemplated hereunder to qualify for accounting treatment as a pooling of interests. ARTICLE II SHAREHOLDERS' REPRESENTATIVE 2.1 In order to administer efficiently (i) the implementation of the Agreement by the Shareholders, (ii) the waiver of any condition to the obligations of the Shareholders to consummate the transactions contemplated hereby, and (iii) the settlement of any dispute with respect to the Agreement, the Shareholders hereby designate Ole Stangegaard, as their representative (the "Shareholders' Representative"). 2.2 The Shareholders hereby authorize the Shareholders' Representative (i) to take all action necessary in connection with the implementation of the Agreement on behalf of the Shareholders, the waiver of any condition to the obligations of the Shareholders to consummate the transactions contemplated hereby, or the settlement of any dispute, (ii) to give and receive all notices required to be given under the Agreement and (iii) to take any and all additional action as is contemplated to be taken by or on behalf of the Shareholders by the terms of this Agreement. Such authorization granted by the shareholders to the Shareholders' Representative shall remain effective until December 31, 1998. 2 2.3 In the event (i) that the Shareholders' Representative dies, becomes legally incapacitated or resigns from such position, or (ii) upon a written consent executed by at least 66 2/3% in interest (calculated based on the allocation set for in Schedule 1.2 hereof, notwithstanding any subsequent change in shareholdings by way of sale, etc.) of the Shareholders, the Shareholders may designate a replacement to the Shareholders' Representative; however, no change in the Shareholders' Representative shall be effective until SPSS is given notice of it by the Shareholders. 2.4 All decisions and actions by the Shareholders' Representative shall be binding upon all of the Shareholders, and no Shareholder shall have the right to object, dissent, protest or otherwise contest the same, in the absence of fraud, gross negligence or willful misconduct of the Shareholders' Representative. 2.5 By their execution of this Agreement, the Shareholders agree that: (i) SPSS shall be able to rely conclusively on the instructions and decisions of the Shareholders' Representative as to any actions required or permitted to be taken by the Shareholders or the Shareholders' Representative hereunder, and no party hereunder shall have any cause of action against SPSS for any action taken by SPSS in reliance upon the instructions or decisions of the Shareholders' Representative; (ii) all actions, decisions and instructions of the Shareholders' Representative shall be conclusive and binding upon all of the Shareholders; no Shareholder shall have any cause of action against SPSS or In2itive for any action taken or omitted to be taken, decision made or omitted to be made or any instruction given or omitted to be given by the Shareholders' Representative; and no Shareholder shall have any cause of action against the Shareholders' Representative for any action taken, decision made or instruction given by the Shareholders' Representative under this Agreement, except for fraud, gross negligence or willful breach of this Agreement by the Shareholders' Representative; (iii) remedies available at law for any breach of the provisions of this Section 2.5 are inadequate; therefore, SPSS shall be entitled to temporary and permanent injunctive relief without the necessity of proving damages if SPSS brings an action to enforce the provisions of this Section 2.5; and (iv) the provisions of this Section 2.5 are independent and severable, shall constitute an irrevocable power of attorney, coupled with an interest and surviving death, granted by the Shareholders to the Shareholders' Representative and shall be binding upon the executors, heirs, legal representatives and successors of each Shareholder. 3 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 as set forth on Schedule 3.1. SPSS will hold in escrow for the Shareholders' account, in the respective amounts set forth on Schedule 3.1, the Escrowed Shares, together with stock powers duly executed in blank attached, in good form for delivery. SPSS will hold the Escrowed Shares subject to the terms and conditions of Section 3.2 hereof. 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 any post-Closing claims for breaches under this Agreement. Escrowed Shares used to satisfy any post-Closing claims for breaches under this Agreement shall be divided on a pro-rata basis from the Shareholders. The number of Escrowed Shares, if any, remaining after any retention made in accordance with this Agreement will be delivered to the Shareholders, in amounts proportionate to the Shareholders' interest in such Escrowed Shares, promptly after the earlier of the first anniversary of the Closing Date or the date of delivery to SPSS of SPSS' year-end audited financial statements by SPSS' outside auditors (the "Audit Release Date"), except for the number of such Escrowed Shares then subject to a bona fide dispute over which a party is entitled to such Escrowed Shares. ARTICLE IV SECURITIES MATTERS 4.1 Registration of SPSS Common Stock. (a) SPSS shall prepare and file with United States Securities and Exchange Commission (the "SEC") as soon as practicable but in no event later than 30 days following the Audit Release Date, 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 "S-3 Registration Statement"), or such other appropriate registration statement under the Securities Act of 1933, as described in greater detail below, and the rules and regulations promulgated thereunder (the "1933 Act" or the "Act"), for the registration (the "Registration") of the secondary offering of the SPSS Common Stock for the account of the Shareholders. SPSS expects to have published unaudited financial results, covering at least thirty (30) days of the combined operations of SPSS and In2itive following the acquisition of In2itive by SPSS (the "Acquisition"), not later than March 31, 1998. SPSS shall use reasonable efforts to have the Registration declared effective by the SEC promptly after unaudited financial results covering at least 4 thirty (30) days of the combined operations of SPSS and In2itive following the Acquisition have been publicly released by SPSS. 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 for a period of twenty-four (24) months following the date of effectiveness, or such shorter period that will terminate when all of the shares of SPSS Common Stock have been sold by the Shareholders (the "Trading Period"). In the event Form S-3 is not available to SPSS for the Registration, SPSS shall, at the written request of the Shareholders holding a majority of the SPSS Common Stock, prepare one (1) company paid (excluding any underwriting fees and discounts) registration statement on the appropriate form, 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 (a "Non-S-3 Registration Statement", with the S-3 Registration Statement and a Non-S-3 Registration Statement referred to herein as the "Registration Statement"), and SPSS shall use all reasonable efforts to maintain the effectiveness of such Non-S-3 Registration Statement for a period of 90 days after the date of initial effectiveness. While such Registration Statement remains in effect, SPSS may at any time deliver to any Shareholders in the employment of SPSS, 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 or because SPSS has received an opinion of counsel that such sales may violate provisions of the United States Securities Laws; upon receipt of any such notice, such 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. The Blackout Period, as used herein shall be defined as the current Blackout Period policy currently in effect at SPSS. (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. 5 (c) SPSS shall not grant to any holder of shares of SPSS Common Stock registration rights which interfere with the rights of Shareholders and the obligations of SPSS under this Article IV of this Agreement. 4.2 Sales of SPSS Common Stock by Shareholders. If at any time any Shareholder elects to sell all or any of his shares of SPSS Common Stock, Shareholder shall conduct such sales only through registered securities brokers ("Brokers"). 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 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. In2itive has advised the Shareholders, and the Shareholders understand and agree, as follows: (a) That the shares of SPSS Common Stock to be received by the Shareholders pursuant to this Agreement 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 SPSS Common Stock to be received by the Shareholders pursuant to this Agreement except in compliance with the provisions of the Act. Any proposed transferee of the shares of SPSS Common Stock shall agree to take and hold such securities upon the conditions set forth in 4.4(c) hereof. (c) Until such time as the Shares being sold hereunder to the Shareholders may be sold under Rule 144(k), each certificate representing the shares of SPSS Common Stock issued to the Shareholders 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 6 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 shares being sold hereunder to the Shareholders may be sold under the circumstances described in Rule 144(k) (or any successor rule or regulation) and there exists no other restriction on the sale of stock imposed subsequent to the date hereof, SPSS will, upon request of the Shareholders' Representative, cause SPSS' transfer agent to exchange the shares legended as set forth above for unlegended shares. (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' 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, liabilities (joint or several) or expenses to which they may become subject under the Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages, liabilities (or actions in respect thereof) or expenses 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, 7 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, 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; and SPSS will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this subsection 4.5(a), in connection with investigating or defending any such loss, claim, damage, liability, action or expense 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, action or expense if such settlement is effected without the consent of SPSS, which consent shall not be unreasonably withheld, nor shall SPSS be liable in any such case for any such loss, claim, damage, liability, action or expense 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, liabilities (joint or several) or expenses 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, liabilities (or actions in respect thereto) or expenses 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, action or expense; 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, action or expense 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 gross proceeds from the offering of the shares of SPSS Common Stock received by such Shareholder. SPSS shall make the Registration Statement available to the Shareholders prior to the filing thereof. (c) Promptly after receipt by an indemnified party under this Section 4.5 of notice of 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 commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the 8 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 written notice to the indemnifying party within a reasonable time of the 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. 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 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; 9 (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 THE SHAREHOLDERS The Shareholders represent and warrant to SPSS that: 5.1 Organization and Qualification. (a) In2itive is a corporation duly organized, validly existing under the laws of the Danish Corporation Act ("DCA") and has the corporate power and corporate 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 In2itive, as certified by the Commerce and Companies Registry and of the By-laws, as amended to date, of In2itive, as certified by its Chairman of the Board, 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 In2itive are contained in the minute books of In2itive and said minute books have been furnished to SPSS for examination at a reasonable time prior to the Closing. No minutes or consents 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) In2itive is licensed or qualified to do business in every domestic and foreign jurisdiction where the failure to be licensed or qualified would have a material adverse effect on the business of In2itive (a "Material Adverse Effect"). (d) In2itive has no subsidiaries. 5.2 Authority. 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 10 approved by each of the Shareholders and the Board of Directors of In2itive and no other proceedings (corporate or otherwise) on the part of any of the Shareholders or In2itive 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 Shareholders and constitute legal, valid and binding agreements of the Shareholders enforceable in accordance with its terms, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefore may be brought. 5.3 Capitalization. The entire authorized capital stock of In2itive consists solely of Shares in the nominal amount of DKK [3,261,750] of which DKK [2,866,750] are A- Shares and DKK [395,000] are B-Shares which as of the date of this Agreement are the only issued and outstanding Shares (the "Outstanding Shares"). There are no other authorized shares of capital stock of In2itive. The Shares represent the only equity interests of the Shareholders or any other person or entity in In2itive. All of the issued and outstanding Shares are owned of record and beneficially by the Shareholders in the respective amounts set forth in Schedule 5.3. The Shares are subject to no restrictions on transferability, other than the requirement to consent by the board of directors of In2itive to a transfer of Shares as set forth in Section 4 of the Articles of Association of In2itive. All of the outstanding Shares 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 in treasury, and there are no Shares reserved for issuance. Except as set forth in Schedule 5.3, there are no outstanding options, warrants, conversion or other rights to acquire from any of the Shareholders or In2itive, or any plans, contracts or commitments providing for the issuance of, or the granting of, rights by any of the Shareholders or In2itive to acquire: (i) any capital stock of In2itive (whether issued or unissued) or (ii) any securities convertible into or exchangeable for any capital stock of In2itive. Other than those disclosed on Schedule 5.3, there are no agreements or understandings with respect to the voting, holding or selling of any Shares of capital stock of In2itive, or any contractual obligations of In2itive or any of the Shareholders with respect to In2itive's capital stock. There are no voting trusts or proxies currently in effect with respect to the Shares. The Key Shareholders agree that In2itive will use its best efforts to obtain the exercise or termination of all outstanding options for In2itive shares, if any, on or prior to the Closing Date. SPSS will not assume, substitute for, or continue any options for In2itive stock outstanding on the closing date (hereinafter the "Remaining Options"). 5.4 Title to Shares. 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, including without limitation any of the foregoing set forth in the Bylaws of In2itive. The Shares represent the only equity interest of the Shareholders in In2itive. 11 5.5 Consents and Approvals. Except the consent by the Board of Directors of In2itive to the transfer of the Shares, which consent has been obtained and is in full force and effect, and as listed on Schedule 5.5, 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 by In2itive or the Shareholders in order for the Shareholders to consummate the transactions contemplated hereby and fully perform their obligations hereunder. 5.6 Absence of Conflicts. Other than listed on Schedules 5.8 and 5.16, the execution, delivery and performance by In2itive and the Shareholders of this Agreement and the consummation by the Shareholders of the transactions contemplated hereby will not, with or without the giving of notice or lapse of time or both, (i) conflict with or result in a breach or default under any term or condition of the Articles of Incorporation or By-laws of In2itive, (ii) violate any provision of law, statute, rule or regulation to which In2itive or the Shareholders is or was subject, (iii) violate any order, judgment or decree which is or was applicable to In2itive or the Shareholders; (iv) conflict with or result in a breach or default under any term or condition of any agreement or other instrument to which In2itive or the Shareholders is a party or by which either of them is bound, or (v) cause, or give any person grounds to cause, the maturity of any debt, liability or obligation of In2itive to be accelerated or increase any such liability or obligation. 5.7 Financial Statements; Accounts Receivable. The Key Shareholders have caused In2itive to previously deliver to SPSS for inspection, within a reasonable time prior to the Closing Date, true and correct copies of the audited balance sheets of In2itive as of December 31, 1995 and December 31, 1996 and the related audited statements of income, statements of retained earnings and statements of changes in financial position for the periods ending on such dates (collectively, the "Financial Statements"). The Financial Statements (i) have been prepared in accordance with Danish Annual Accounts Act and the supplementing guidelines of the Danish Institute of State Authorized Public Accountants, (ii) are correct and complete and are in accordance with the books and records of In2itive, in all material respects and (iii) present fairly in all material respects the financial position and condition of In2itive and the related results of operations as at the dates and for the periods then ended (subject to customary year-end adjustments, which adjustments are not material in kind or amount, it being understood that neither (ii) nor (iii) above shall imply that the Financial Statements are intended to present financial position and results of operations in conformity with generally accepted accounting principles of the United States. Subject to a reserve for bad debts shown on In2itive's latest balance sheets included in the Financial Reports, all accounts and notes receivable reflected on the balance sheets are, and all accounts and notes receivable subsequently accruing to the Closing Date will be, (a) valid, genuine and subsisting, (b) subject to no known defenses, set-offs or counterclaims and (c) current and collectible. 5.8 Absence of Undisclosed Liabilities; Warranties in Connection with Software Products. To the best of the Key Shareholders' knowledge, after due inquiry of 12 In2itive, and except as and to the extent reserved for in the Financial Statements, the Financial Statements of In2itive reflect all material claims and liabilities which should be or are required to be disclosed under the guidelines of the Danish Institute of State Authorized Public Accountants and the Danish Annual Accounts Acts other than those in the ordinary course of business since December 31, 1996, which have not yet been accrued or booked. The Key Shareholders have made due inquiry with the management of In2itive and do not know of any basis for the assertion of any claim or liability relating to the businesses of In2itive, nor are they aware of any occurrence or fact that has or might have an adverse effect on the businesses of In2itive. Except as listed on Schedule 5.8, as of the date of this Agreement, In2itive has no material outstanding debt to any bank or other lender. For the purposes of this paragraph, materiality shall mean any liability or debt in excess of $5,000. 5.9 Absence of Certain Changes or Events. To the best of the Key Shareholders' knowledge, after due inquiry of In2itive, since September 30, 1997 and other than listed on Schedule 5.9, there has not been (a) any damage, destruction or casualty loss to the properties or assets of In2itive (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 In2itive, 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 $5,000 or outside the ordinary course of business of In2itive; (d) any direct or indirect redemption, repurchase or other acquisition for value by In2itive 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 In2itive's capital stock; (e) other than increases in base compensation and bonuses in the ordinary course of business (not exceeding 10% per annum of the aggregate payroll), any increase in the rate or terms of compensation payable or to become payable by In2itive to its respective directors, managers, 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, manager, employee, agent or independent contractor; (f) any sale, transfer or other disposition of any asset of In2itive 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 In2itive is a party or any termination or waiver of any other rights of value to the businesses of In2itive, except in the ordinary course of business; (h) any capital expenditure for additions to property or equipment by In2itive in excess of $5,000; (i) any split, combination, exchange or reclassification of shares of capital stock of In2itive; (j) any issuance of capital stock of In2itive or of securities convertible into or rights to acquire any such capital stock; (k) any failure by In2itive 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 $5,000; (m) any pledge of any of the assets or properties of In2itive or any action or inaction which would subject any such assets or properties to any lien, security interest, 13 mortgage, pledge, claim, charge or other encumbrance of any kind; (n) the incurrence of any liability or obligation by In2itive, except for liabilities incurred in the ordinary course of business; (o) any actual or threatened termination or cancellation of, or modification or change in, any business relationship with any customer or customers of In2itive or other agreement or arrangement involving or related to the assets or properties of the businesses of In2itive ; (p) any cancellation of a debt due to or a claim of In2itive, other than by payment or other satisfaction; (q) any failure of In2itive to perform under, or any default by In2itive 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 In2itive 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 In2itive; or (u) any agreement, whether in writing or otherwise, to take any action described in this Section 5.9. 5.10 Investment in the SPSS Common Stock. (a) SPSS has provided to each of the Shareholders listed on Exhibit B (the "Non-English Shareholders") and each of the Non-English Shareholders acknowledge receipt of a copy of, the Confidential Private Placement Memorandum, dated October 23, 1997, together with the materials provided therewith, and each of the Shareholders further acknowledge that (i) each has been afforded such other information as each has deemed necessary to make an informed decision to acquire the SPSS Common Stock to be received by the Shareholders pursuant to this Agreement and have had sufficient opportunity to ask questions and receive answers of In2itive and SPSS, as appropriate, concerning the operations, business and financial condition of SPSS and regarding the Acquisition and the business of SPSS and In2itive, and all such questions have been answered, (ii) each has been informed of the provisions of Article IV of this Agreement, (iii) each has been informed that the shares of SPSS Common Stock each is acquiring must be held by such Shareholder indefinitely, unless an effective 1933 Act registration statement or exemption from registration is available; (iv) each has been informed 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; (v) each has been informed 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 SPSS Common Stock to be received by the Shareholders pursuant to this Agreement; (vi) each has been informed that the Shareholders have no recourse against SPSS for declines in the value of their investment in the SPSS Common Stock to be received by the Shareholders pursuant to this Agreement absent fraud or violations of the Federal and State securities, blue sky and other similar laws on the part of SPSS; and (vii) each has been informed that the SPSS Common Stock to be received by the Shareholders pursuant to 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 the SPSS Common Stock. 14 5.11 Real and Personal Property; Inventories. Schedule 5.11(a) correctly identifies all real property owned or used by In2itive and each material lease of real property held by In2itive. No claims, charges or notice of violations have been filed, served, made or threatened, orally or in writing, against or relating to any such property or any of the operations conducted at any property leased by In2itive. In2itive owns no real property. Schedule 5.11(b) describes all material tangible or intangible personal property and assets of In2itive with an estimated value greater than $5,000. The tangible personal property and assets are generally in good working order or condition, reasonable wear and tear excepted. In2itive has good and marketable title to, and is in possession of or has control over, all of its personal property, none of which is held under or subject to any mortgage, pledge, lien, lease, encumbrance, conditional sales contract or other security arrangement ("Liens") except for Taxes (as defined below) not yet due (such Liens for Taxes and the amounts, if known, listed on Schedule 5.11(b)) and such other matters as are reflected on Schedule 5.11(b). 5.12 Patents, Trademarks, Etc. Schedule 5.12(a) contains an accurate and complete description of all domestic and foreign patents, trademarks, current service marks, trademark registrations, logos, trade names, assumed names, copyrights and copyright registrations and all pending applications therefor other than those assets relating to readily available commercial products or software (collectively, the "Intellectual Assets"), presently owned or held by In2itive or under which In2itive owns or holds any license, or in which In2itive owns or holds any direct or indirect interest; and to the Key Shareholders' knowledge, no others are necessary for the conduct of the present businesses of In2itive. To the best of the Key Shareholders' knowledge, and other than readily available commercial products or software, or as described on Schedule 5.12(b), none of the products manufactured, distributed or sold by In2itive, nor any of the Intellectual Assets, or intellectual property, including without limitation, technology, inventions, processes, designs, formulae, know-how, trade secrets, (collectively, with the Intellectual Assets, the "Intellectual Property"), or any of In2itive's activities, conflict with, infringe or otherwise violate any patents, trademarks or copyrights, or any other rights, of any individual or entity, nor require payments to be made to any person. To the best of the Key Shareholder's knowledge, information and belief, In2itive has the sole and exclusive rights to the Intellectual Property and has the right and power to use, lease and sell the Intellectual Property. To the best of the Key Shareholder's knowledge, information and belief, no claim or potential claim has been asserted by any other party to the Intellectual assets and there exists no basis for such a claim or potential claim. To the best of the Key Shareholders' and In2itive's knowledge, In2itive is not using confidential information or trade secrets of any former employer of any past or present employees engaged in businesses of In2itive. To the best of the Key Shareholder's knowledge, information and belief, the items described in the schedules attached hereto and the other Intellectual Property are reasonably adequate to conduct the businesses of In2itive as presently conducted. Upon consummation of the transactions contemplated hereby, SPSS will acquire good and marketable title to all of the Intellectual Property and the goodwill associated therewith. 15 Solely for purposes of this Section 5.12, "knowledge" shall mean actual knowledge and that information resulting from a due inquiry by the Key Shareholders of all present employees and independent contractors of In2itive and such past employees and independent contractors of In2itive as deemed appropriate and as reflected in the letters from such persons attached hereto. 5.13 Employees. All personnel, including employees, agents, consultants and contractors, who have contributed to or participated in, in a material way, the conception and development of the Intellectual Assets on behalf of In2itive either (a) were at such time parties to "work-for-hire" arrangements or similar agreements with In2itive, that has accorded In2itive full, effective, exclusive and original ownership of all intellectual property thereby arising, or (b) except as disclosed on Schedule 5.13(b), have executed appropriate instruments of assignment, which are still in full force and effect, in favor of In2itive, as assignee, that have conveyed to In2itive full, effective and exclusive ownership of all intellectual property thereby arising. To the best of the Key Shareholders' knowledge, no employee of In2itive is in violation of (i) any term of any employment contract, any "work for hire" arrangement or similar 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 In2itive or to use trade secrets or proprietary information of others. 5.14 Contracts and Commitments. (a) Schedule 5.14 contains a list of all enforceable agreements, contracts, guarantees, commitments, restrictions or instruments of any kind of In2itive, including without limitation (i) powers of attorney (whether revocable or irrevocable) to any individual or entity, (ii) Intellectual Property licenses, including, without limitation, licenses with respect to source codes used or to be used in either the Software Products, and any agreements by which In2itive has an obligation to pay royalties to any third party in connection therewith, (iii) contracts, agreements, licenses or other commitments or arrangements in effect with respect to the development, marketing, distribution, licensing, or promotion of the Software Products or any other inventory, the Technical Documentation, or In2itive's Intellectual Assets with any independent salesperson, distributor, sublicensor, or other remarketer or sales organization, (iv) grants to any individual or entity of any rights or security interests with respect to the source codes for the Software Products, and (v) insurance policies held by In2itive concerning its businesses, operations and properties ("Contracts"). True and correct copies of all Contracts have been made available to SPSS at a reasonable time prior to Closing. To the best of the Key Shareholders' knowledge, after due inquiry of In2itive, all of the Contracts are valid and binding obligations of In2itive enforceable in accordance with their respective terms to the extent permitted by applicable law, and are in full force and effect and complied with. To the best of the Key Shareholders' knowledge, all of the Contracts are legal and binding obligations of the other party, enforceable in accordance with their respective terms to the extent permitted by applicable law. All of the Contracts are in full force and effect and complied with, and to the best of In2itive's knowledge, none of the Contracts have a Material Adverse Effect on In2itive. All of In2itive's 16 standard form customer contracts constitute only end-user agreements, each of which grants the end-user thereunder solely the non-exclusive right and license to use an identified Software Product of In2itive and related user documentation, for internal purposes only. True and correct copies of each standard form customer and distributor contracts currently in use by In2itive in the conduct of its businesses are attached to Schedule 5.14. In2itive has not agreed with any customer or distributor to make any variation in any such contract which could have a Material Adverse Effect on In2itive. (b) To the best of the Key Shareholders' knowledge and except as disclosed on Schedule 5.14(b), In2itive is not in default, and there is no basis for any valid claim of default, in any respect under any of the Contracts. To the best of the Key Shareholders' knowledge, no other party to any of the Contracts is in default or breach thereof. 5.15 Source Code. Except as listed on Schedule 5.15, In2itive 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 In2itive has not agreed to pay to any individual or entity any royalty, commission or other amount on account of sales of its software products. 5.16 Government Contracts. Except as described on Schedule 5.16, the Key Shareholders do 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 In2itive, 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 claim, refusal or dispute involving In2itive, its businesses, or any of its assets and any Government Contract Party or (b) any suspension, debarment or contract termination, or proceeding related thereto. In2itive does not have any contracts with any Government Contract Party (as defined below) other than standard end-user license agreements containing appropriate reservations of rights. All of In2itive's development of technical data and Software Products were developed exclusively at private expense. For purposes of this Section the term "Government Contract Party" means any independent or executive agency, division, subdivision, audit group or procuring office of any government, including any prime contractor of any government and any higher level subcontractor of a prime contractor of any government, and including any employees or agents thereof, in each case acting in such capacity. 5.17 Insurance. Schedule 5.17 hereto is a description of all insurance policies held by In2itive. Each of In2itive's insurance policies is in full force and effect, 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 In2itive, or any other individual or entity under any insurance policies. 5.18 Litigation and Administrative Proceedings. Except as described in detail on Schedule 5.18, there is no claim, action, suit, proceeding or investigation in any court or 17 before any governmental or regulatory authority pending, or to the best of the Key Shareholders' knowledge otherwise threatened, against or adversely affecting In2itive or which seeks to enjoin or obtain damages in respect of the transactions contemplated hereby. The Key Shareholders do not know nor have any reason to know of any basis for any such claim, action, suit, proceeding or investigation. 5.19 Tax Matters. For purposes of this Agreement: (i) The term "Taxes" means all state and local taxes imposed by any Danish or foreign law, 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 whatever including stamp duty and VAT 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; (ii) 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; 5.19.1 All Returns Filed. All Returns required to be filed by or on behalf of In2itive on or before the Effective Date has been filed and such Returns are complete and accurate and to the best knowledge of the Key Shareholders, after due inquiry of In2itive, disclose all Taxes (and other charges) required to be paid for the periods covered thereby. 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. 5.19.2 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 In2itive and, no basis exists for the imposition of any such liens. 5.19.3 Examinations, Etc. To the best knowledge of the Key Shareholders, after due inquiry of In2itive, no state, local, foreign or other Returns of In2itive for tax years that remain open under any applicable statute of limitations have been examined by the tax authorities and no deficiencies have been asserted or assessments made as a result of examinations (including all penalties and interest). No issues have been raised by (or are 18 currently pending before) any taxing authority in connection with any of the Returns which could reasonably be expected to have a Material Adverse Effect on In2itive, if decided adversely to In2itive, nor are there any such issues which have not been so raised but, if so raised by any taxing authority in connection with any of the Returns could, in the aggregate, reasonably be expected to have a Material Adverse Effect on In2itive. 5.19.4 Withholding. In2itive has withheld from its employees and others (and timely remitted to the appropriate taxing authorities) proper and accurate amounts for all periods in compliance with all tax withholding provisions of applicable state, foreign, local and other laws (including, without limitation, income, withholding, social security, employment and other payroll taxes). 5.19.5 Prior Consolidated Groups. In2itive is not, and has never been, subject to joint taxation with any other company. 5.19.6 Unpaid Tax. To the best knowledge of the Key Shareholders, after due inquiry of In2itive, In2itive's unpaid taxes do not exceed 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 the most recent balance sheet included in the Financial Statements, as adjusted for the passage of time through the Effective Date, in accordance with its past custom and practice. 5.20 Compliance with Laws. To the best knowledge of the Key Shareholders, after due inquiry to In2itive, In2itive has not in the past been nor is presently in any 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, foreign or otherwise) (collectively, "Laws"). In2itive has not received any written notice of any asserted present or past failure of In2itive to comply with any of such Laws. For purposes of this paragraph, materiality shall mean any violation which could result in expenses or fines to In2itive greater than $5,000. 5.21 Environmental and Safety Matters. To the best knowledge of the Key Shareholders, after due inquiry of In2itive, In2itive has complied in all material respects with all state, local or foreign Laws, regulations or ordinances relating to environmental matters ("Environmental Laws") including, but not limited to: air pollution; water pollution; noise control; on-site or off-site solid or hazardous waste storage, treatment, discharge, disposal or recovery; toxic and hazardous chemical reporting; or employee safety and hazardous material use, generation, reliance, transportation, and reporting provisions. No written notice of violation of or potential liability resulting from any such Environmental Laws, or orders with respect thereto, has been received, nor is any such notice pending or to the best of its knowledge threatened. For purpose of this paragraph materiality shall mean any violation which could result in a liability or penalty of greater than $5,000. 19 5.22 Employee Benefits. 5.22.1 Schedule 5.22 contains a written list of all employee benefit plans relating to employee benefits with respect to which In2itive 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 (collectively referred to as the "Plans"). 5.22.2 Except as disclosed on Schedule 5.22 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. 5.22.3 Except as disclosed on Schedule 5.22 no pension promises have been issued which are not fully funded in or with banks, pension funds or insurance companies in accordance with Danish law and all due premiums have been made or duly reserved for. 5.22.4 Other than for claims in the ordinary course of business for benefits under the Plans, and except as disclosed on Schedule 5.22 there are no actions, suits, claims or proceedings, pending or threatened, nor to the best knowledge of In2itive does there exist any basis therefor, which may result in any liability with respect to any Plan to In2itive, or any Plan or trust thereof. 5.23 Licenses and Permits. In2itive has all material governmental licenses and permits and other material governmental authorizations and approvals required for the conduct of its businesses as presently conducted. 5.24 Relations With Suppliers and Customers. Neither In2itive nor the Shareholders is required to provide any bonding or other financial security arrangements in connection with any transaction with any customer or supplier. Neither In2itive nor the Shareholders has received any notice that any customer or supplier of In2itive will cease to do business with In2itive or refuse to do business with SPSS, or In2itive after the consummation of the transactions contemplated hereby. 5.25 Interests in Competitors, Suppliers and Customers. Except as set forth in Schedule 5.25, none of the Shareholders nor any manager or director of In2itive or any entity controlled by or under common control with In2itive has a greater than five percent (5%) ownership interest in any competitor, supplier or customer of In2itive or any property used in the operation of its businesses. 5.26 Employment Matters. Schedule 5.26 contains a list of all oral and written employment or consulting contracts or other agreements or arrangements to which In2itive is a party or by which it is bound, and all these contracts and arrangements are in full force and 20 effect. Except as disclosed on Schedule 5.26, there are no other oral contracts or arrangements of the type described in the preceding sentence. There have been no claims of defaults and there are no facts or conditions which if continued, or with the giving of notice, will result in a default under these contracts or arrangements. 5.27 Related Transactions. In2itive has not made or entered into any loan, contract, lease, commitment, arrangement or understanding with any of its directors, managers, employees, shareholders or any entity controlled by or under common control with In2itive, except normal compensation arrangements with managers, all of which are reasonable in amount and terminable by In2itive on 30 days' notice. 5.28 Brokers and Finders. Neither In2itive nor the Shareholders (nor any of their respective managers, 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. 5.29 Questionable Payments. Neither In2itive nor the Shareholders, nor any director, manager, agent, employee or other person associated with or acting on behalf of In2itive 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) established or maintained any unlawful or unrecorded fund of corporate monies or other assets; (d) intentionally made any false or fictitious entry on the books or records of In2itive; (e) made any bribe, payoff, influence payment, kickback or other unlawful payment; or (f) 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. 5.30 Books and Records. The books and records of In2itive have been maintained in accordance with Danish bookkeeping regulations and commercially reasonable business and bookkeeping practices and accurately reflect in all material respects the business, assets, properties, rights, obligations, liabilities and operations of In2itive. 5.31 Bank Accounts; Safe Deposit Boxes. Included on Schedule 5.31 are the names and locations of all banks in which In2itive has accounts or safe deposit boxes and the names of all persons authorized to draw thereon or to have access thereto. 5.32 Full Disclosure. In2itive and the Key Shareholders have disclosed to SPSS all facts material to the business, operations, assets or condition (financial or otherwise) of In2itive. To the best knowledge of the Key Shareholders, no representation or warranty by the Shareholders in this Agreement, any of the Schedules attached hereto or any other documents, exhibits, certificates or schedules furnished to SPSS pursuant hereto, contains, or as of the Closing Date will contain, any untrue statement of a material fact, or omits, or as of the Closing 21 Date 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. 5.33 Effect of Certificates. All representations and warranties made in certificates of In2itive and the managers of In2itive or the Key Shareholders, or any of the foregoing, delivered hereunder shall be deemed to be additional representations and warranties of the Shareholders. 5.34 Accounting Matters. Neither In2itive nor the Shareholders has taken or agreed to take any action that would prevent SPSS from accounting for the business transaction to be effected by the Acquisition as a pooling of interests. ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SPSS SPSS represents and warrants to In2itive as follows: 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. SPSS has full power, capacity and authority 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 by SPSS, and no other corporate proceedings on the part of SPSS 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 constitute legal, valid and binding agreements of SPSS, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights, (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefore may be brought, and (iii) enforceability of Section 4.5 of this Agreement may be subject to limitations of public policy under and State securities laws. 6.3 Consents and Approvals. 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 SPSS to consummate the transactions contemplated hereby and fully perform their obligations hereunder. SPSS has received a form of the pooling letter referred to in Section 12.8 22 herein, and has no reason to believe that a final letter from KPMG Peat Marwick LLP will not be delivered as required under Section 12.7. 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 SPSS Common Stock in the Acquisition) 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) conflict with or result in a breach or default under any term or condition of the Articles of Incorporation or By-laws of SPSS, (ii) violate any provision of law, statute, rule or regulation to which SPSS is or was subject, (iii) violate any order, judgment or decree which is or was applicable to SPSS or (iv) conflict with, or result in a breach or default under, any term or condition of the Certificates of Incorporation or By-Laws of SPSS or any agreement or other instrument to which either of them is a party or by which either of them is bound, or (v) cause, or give any person grounds to cause the maturity of any debt, liability or obligation of SPSS to be accelerated or increase any such liability or obligation. 6.5 Capitalization. The authorized capital stock of SPSS consists solely of 50,000,000 shares of SPSS Common Stock, of which, as of September 30, 1997, approximately 8,637,440 shares were issued and outstanding. All the issued and outstanding shares of SPSS Common Stock are validly issued, fully paid and nonassessable. There are no options, warrants or other rights, agreements or commitments obligating of SPSS to issue shares of its capital stock except for stock options to purchase approximately 1,807,482 shares of SPSS Common Stock pursuant to various SPSS option plans and agreements and employee rights to purchase SPSS Common Stock pursuant to SPSS' employee stock purchase plans. 6.6 Reports and Financial Statement. SPSS has previously furnished In2itive with true and complete copies of its (i) Annual Report on Form 10-K for the fiscal year ended December 31, 1996 as filed with the SEC, (ii) its Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June 30, 1997, as filed with the SEC and (iii) its report on Form 8-K to reflect the acquisition of Quantime Limited filed October 15, 1997 as filed with SEC (collectively the "SPSS Reports"). 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 cash flows for the periods then ended subject, in the case of the unaudited financial statements, to normal year-end adjustments which are not materially adverse. The SPSS Reports required to be filed by SPSS under the Exchange Act since December 31, 1996 and its 1997 proxy statement have been filed by SPSS in a timely manner, to the best of SPSS's knowledge, were complete and correct in all material respects, as of the dates at which the information was furnished, and, to the best of SPSS's knowledge, contained no untrue statement of a material fact, nor omitted to state a material fact or disclose any liability required to be included therein or necessary in light of the circumstances under which it was made in order to make the statements made therein not misleading. 23 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 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 SPSS Common Stock. The SPSS Common Stock to be issued in the Acquisition, when delivered in accordance with this Agreement, shall be duly authorized, validly issued, fully paid and nonassessable. 6.10 Effect of Certificates. All representations and warranties made in certificates of SPSS and the officers of SPSS, or any of the foregoing, delivered hereunder shall be deemed to be additional representations and warranties of SPSS. 6.11 Pooling of Interests Accounting. SPSS has consulted with KPMG Peat Marwick 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 on its discussions with KPMG Peat Marwick LLP, and assuming the accuracy of the information in the Schedules attached hereto and the other information disclosed in connection with the transactions contemplated by this Agreement, SPSS believes that the condition precedent contained in Section 12.8 hereof will be satisfied. 6.12 Dividends and Distributions. From December 31, 1996 to the date hereof, SPSS has not declared or paid any dividends on any shares of its capital stock nor has it made any other payments or distributions to its stockholders. 6.13 Marketable Title. SPSS owns and has good and marketable title to the SPSS Common Stock, free and clear of any lien, pledge, claim, encumbrance, restriction or right of any third party of any kind. On the Closing Date, the Stockholders will acquire good and marketable title to the SPSS Common Stock, free and clear of the aforesaid, including without limitation, any of the foregoing set forth in the Bylaws of SPSS. 6.14 Reliance on Responses. SPSS, its agents, counsellors and other representatives have had an opportunity to interrogate In2itive, the management of In2itive and the auditor of In2itive about In2itive, its accounts, its activities, its management, its personnel and employment agreements, its lease contracts and all other material third party contracts, its supply and distribution contracts, its insurance coverage, its intangible rights and all other contract rights and obligations related to or referred to in this Agreement and the attached schedules. SPSS has relied on the accuracy of all of the responses given it by In2itive, its management, and its auditor 24 in connection with the transactions contemplated by this Agreement and all such questions have been satisfactorily answered. ARTICLE VII COVENANTS RELATING TO CONDUCT OF BUSINESS 7.1 Conduct of Business (a) Conduct of Business by In2itive. During the period from the date of this Agreement to the Closing Date of the Acquisition Agreement, the Shareholders shall ensure that In2itive 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 managers and employees, preserve its relationships with customers, suppliers, licensor, licensees, distributors and others having business dealings with it to the end that its goodwill and ongoing businesses shall be unimpaired at the Closing Date of the Acquisition Agreement. Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Closing Date of the Acquisition Agreement, In2itive shall not: (i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock; (ii) split, combine or reclassify any of its 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 purchase, redeem or otherwise acquire any shares of capital stock of In2itive or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities; (iii) 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; (iv) other than as disclosed elsewhere in this Agreement, amend its Articles of Incorporation, By-laws or other comparable charter or organizational documents; (v) acquire or agree to acquire (A) 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 (B) any assets that individual or in the aggregate are material to In2itive, except purchases of inventory in the ordinary course of business consistent with past practice; (vi) sell, lease, license, mortgage or otherwise encumber or subject to any lien or otherwise dispose of any of its properties or assets; 25 (vii) (A) incur any indebtedness, except for short term borrowings incurred in the ordinary course of business consistent with past practice, or (B) make any loans, advances or capital contributions to, or investments in, any other person; (viii) make or agree to make any equipment leases or any new capital expenditure or capital expenditures which are individually in excess of $5,000 or in the aggregate are in excess of $10,000; (ix) make any tax election that could reasonably be expected to have a material adverse effect or settle or compromise any income tax liability; (x) 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; (xi) except in the ordinary course of business, modify, amend or terminate any material contract or agreement to which In2itive is a party or waive, release or assign any material rights or claims thereunder; (xii) take any action that (without giving effect to any action taken or agreed to be taken by SPSS or any of its affiliates) 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 "reorganization" under Section 368(a) of the Code; or (xiii) take any action to institute any new severance or termination pay practices with respect to any directors, managers or employees of In2itive or to increase the benefits payable under its severance or termination pay practices in effect on the date hereof; and (xiv) (except for salary increases in the ordinary course of business and consistent with past practice) 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, managers or employees. (xv) authorize any of, or commit or agree to take any of, the foregoing actions; (b) Negotiations with Others. Neither the Shareholders nor In2itive shall, directly or indirectly, through any manager, director, employee, representative or agent thereof, solicit or encourage (including by way of furnishing nonpublic information) or take other action 26 to facilitate any inquiries or the making of any proposal that constitutes or may reasonably be expected to lead to an Business Combination 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 "Business Combination Proposal" means inquiries or proposals regarding (i) any merger, consolidation, sale of substantial assets or similar transactions involving In2itive, (ii) sale of 10% or more of the outstanding shares of capital stock of In2itive or similar transactions involving In2itive, 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. In2itive 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. The Shareholders shall give prompt notice to SPSS and SPSS shall give prompt notice to 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 the Shareholders on the one hand or SPSS on the other hand, as the case may be, or of any officer, manager, 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. (d) Pooling Accounting. The Shareholders and SPSS hereby agree (i) not to take any action, based on information or advice provided by KPMG Peat Marwick LLP, 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, based on information or advice provided by KPMG Peat Marwick LLP, 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. ARTICLE VIII COVENANTS OF THE SHAREHOLDERS The Shareholders covenant as follows: 8.1 Consents and Approvals. 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 In2itive 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. 27 8.2 Tax 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 In2itive due after the Closing Date and attributable to periods ending on or before the Closing Date (the "Returns"). SPSS shall direct the preparation and filing of the Returns; provided, however, that the Shareholders shall be responsible for paying any Taxes to the extent of the indemnity therefor. 8.3 Access to Information. (a) From the signing of this Agreement to the Closing Date, the Shareholders shall allow SPSS to have complete access at all reasonable times to In2itive's managers, employees, agents, properties, books and records, and shall furnish SPSS all financial, operating and other data and information as SPSS including, but not limited to such information as may be reasonably requested from time to time concerning the underlying tax basis of each shareholders stock of In2itive, through its officers, employees or agents, may reasonably request. (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 Affiliates and Certain Stockholders. Prior to the Closing Date, the Shareholders shall cause In2itive to deliver to SPSS a letter identifying all persons who are "affiliates" of In2itive for purposes of applicable interpretations regarding the pooling-of-interests method of accounting (the "In2itive Affiliates"). The Shareholders shall cause each In2itive Affiliate to deliver to SPSS on or prior to the Closing Date a written agreement substantially in the form attached as Exhibit C hereto (the "Affiliates Letter"). If the Acquisition would otherwise qualify for pooling-of-interests accounting treatment, shares of SPSS Common Stock issued to such affiliates of In2itive in exchange for Shares shall not be transferable until such time as financial results covering at least thirty (30) days of combined operations of SPSS and In2itive 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 8.4, except to the extent permitted by, and in accordance with, Accounting Series Release 135 and Staff Accounting Bulletins 65 and 76 (such date is hereinafter referred to as the "Earnings Release Date"). Any shares of SPSS Common Stock held by Affiliates shall not be transferable, regardless of whether each such Affiliate has provided the written agreement referred to in this Section 8.4, 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. The Shareholders shall ensure that In2itive shall not register the transfer of any certificate representing capital stock of In2itive, unless such transfer is made in compliance with the foregoing. Except as provided in Article 4 hereof, SPSS shall not be required to maintain the effectiveness of any registration statement under the 1933 Act for the purposes of resale of the SPSS Common Stock by Affiliates. 28 8.5 Further A surances. 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 Retention of Records. After the Closing Date, SPSS will retain all of In2itive's books and records in their possession in accordance with the requirements of Danish law and SPSS's policies for retention of its own books and records, and upon reasonable notice, for a reasonable purpose, 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. 9.2 Severance Packages. Within a reasonable time after the Closing Date, SPSS shall provide reasonable severance packages, as it determines in its sole discretion, to In2itive employees who are not retained for employment with SPSS. 9.3 Further Assurances. SPSS shall from time to time, at the request of the Shareholders and without further cost or expense to the Shareholders, 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. 9.4 Affiliates and Certain Stockholders. 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 cause each SPSS Affiliate to deliver to SPSS on or prior to the Closing Date a written agreement substantially in the form attached as Exhibit D hereto (the "SPSS Affiliate Letter"). If the Acquisition would otherwise qualify for pooling-of-interests accounting treatment, SPSS Affiliates shall not transfer any shares of SPSS Stock until such time as financial results covering at least thirty (30) days of combined operations of SPSS and In2itive 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 9.4, except to the extent permitted by, and in accordance with, Accounting Series Release 135 and Staff Accounting Bulletins 65 and 76 (such date is hereinafter referred to as the "Earnings Release Date"). Any shares of SPSS Common Stock 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 9.4, 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 29 combination to be effected by the Acquisition as a pooling of interests. SPSS shall ensure that it shall not register the transfer of any certificate representing capital stock of SPSS, unless such transfer is made in compliance with the foregoing. ARTICLE X MUTUAL COVENANTS Each of the parties hereto covenants as follows: 10.1 Confidentiality. Except as disclosed on Schedule 10.1 and as otherwise required by law or judicial or administrative proceedings, including proceedings between the parties with respect to the transactions contemplated hereby, and then only to the extent specifically required by such proceedings, and except for public announcements 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, managers, 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, In2itive, 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, In2itive, 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 at the time of the disclosure or becomes publicly known through no wrongful act or failure of In2itive, the Shareholders, SPSS, (ii) is disclosed by a third party which does not have a confidential relationship with In2itive, the Shareholders, 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 appropriate for all relevant tax purposes relating to the transactions contemplated by this Agreement. 30 10.3 Cooperation. The parties agree to cooperate 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 In2itive. ARTICLE XI CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDERS The obligations of the Shareholders to consummate the transactions contemplated hereby is 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 such date. 11.2 Performance. SPSS 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. 11.3 Filings; Consents; Waiting Periods. All registrations, filings, applications, notices, transfers, consents, approvals, orders, qualifications, waivers and other actions listed on Schedule 6.3 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 SPSS of their respective obligations under this Agreement shall have been made or obtained and all applicable waiting periods shall have expired or been terminated. 11.4 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 SPSS of its 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 SPSS. 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. 11.5 Pooling. In2itive shall have discussed with and received approval from KPMG Peat Marwick LLP as to any action to be taken by or inaction of In2itive of In2itive or the Shareholders between the date hereof and the Closing Date which would or may prevent SPSS from accounting for the transactions contemplated hereunder 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 31 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 Delivery. At the closing the documents referred in Section 13.1(b) shall be delivered to the Shareholders. 11.7 Legal Opinion. The Shareholders shall have received the written opinion dated the Closing Date of counsel to SPSS referenced in Section 13.1(b). 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: 12.1 Representations and Warranties. The representations and warranties of 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. The Shareholders 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 the schedules attached 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 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 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 In2itive. 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 32 which restrains or prohibits the consummation of the transactions contemplated by this Agreement. 12.5 Non-Compete Agreements. SPSS and each of the individuals listed on Schedule 11.5 shall have entered into a Non-Competition Agreement, substantially in the attached hereto as Exhibit E. 12.6 Legal Opinion. SPSS shall have received the written opinion, dated the Closing Date, of Mazanti-Andersen & Korso Jensen, counsel to In2itive, substantially in the form attached hereto as Exhibit F. 12.7 Pooling. SPSS shall have received from KPMG Peat Marwick 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. 12.8 Shareholder Approval. This Agreement and the Acquisition shall have been approved and adopted by the consent of the Shareholders in accordance with the DCA and the Articles of Incorporation and By-laws of In2itive. 12.9 Affiliates and Certain Stockholders. (a) Prior to the Closing Date, the Shareholders shall cause In2itive to deliver to SPSS the Affiliates Letters in form and substance satisfactory to SPSS in its sole discretion. 12.10 Delivery. At the Closing, the documents referenced in Section 13.1(a) shall be delivered to SPSS. ARTICLE XIII CLOSING DELIVERIES 13.1(a) The following deliveries shall be made to SPSS at the Closing: (i) Books and Records. The Shareholders shall have caused to be delivered to SPSS all of In2itive's books and records, including without limitation the stock transfer and minute books and financial records. The Shareholders shall cause the transfer of the ownership of the shares of In2itive to SPSS to have been duly registered in the share register. 33 (ii) Legal Opinion. The Shareholders shall cause to be delivered to SPSS the written legal opinion, dated the Closing Date, of Mazanti- Andersen, Korso Jensen & Partners counsel to In2itive, substantially in the form attached hereto as Exhibit F. (iii) Consents. The Shareholders shall cause In2itive to deliver to SPSS all consents and approvals required in connection with the performance by the Shareholders of their obligations under this Agreement and the consummation by the Shareholders of the transactions contemplated hereby and thereby, including the consent by the Board of Directors of In2itive to the transfer of the Shares to SPSS. (iv) Closing Certificates. The Shareholders shall deliver, or cause to be delivered, to SPSS closing certificates in the form attached as Exhibit G hereto, and such other documents as SPSS and its counsel shall reasonably request. (v) Charter; Certificates. The Shareholders shall cause to be delivered to SPSS the Shares duly endorsed to SPSS, In2itive's Articles of Incorporation, as amended to the Closing Date, certified by the Commerce and Companies Registry and a Certified Copy of Compiled Summary from the Commerce and Companies Registry and each other jurisdiction in which In2itive is required to be qualified. (vi) Affiliate Letters. SPSS shall have received an executed Affiliate Letter from each In2itive Affiliate. (vii) Stock Pledge and Escrow Agreement. The Shareholders shall have executed and delivered the Stock Pledge and Escrow Agreement, substantially in t e form attached hereto as Exhibit H hereto and the Escrowed Shares shall have been deposited with the Escrow Agent to be held in escrow pursuant to the provisions of the Stock Pledge and Escrow Agreement. (viii) CFMC Compliance. The Shareholders shall have received and delivered to SPSS evidence that the right of first refusal to purchase the capital stock of In2itive by Computers for Marking Corporation, a California corporation ("CFMC") pursuant to that certain Joint Development Agreement between CFMC and In2itive, has been complied with or waived. (ix) Performance. The Shareholders 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. 34 (x) Further Assurances. The Shareholders 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. 13.1(b) The Following deliveries shall be made to the Shareholders at the Closing: (i) Legal Opinion. SPSS shall cause to be delivered to the Shareholders the written legal opinion, dated the Closing Date, of Ross & Hardies, counsel to SPSS, substantially in the form attached hereto as Exhibit I. (ii) Consents. SPSS shall deliver to the Shareholders the pooling letter referred to in Section 12.8 herein and 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 and thereby, including the consent by the Board of Directors of SPSS to the purchase of the shares of In2itive. (iii) Closing Certificates. SPSS shall deliver, or cause to be delivered, to the Shareholders closing certificates in the form attached as Exhibit J hereto, the Restated Certificate of Incorporation of SPSS, By-laws, and Good Standing Certificate certified by the Secretary of State of Delaware. (iv) Affiliate Letters. The Shareholders shall have received an executed Affiliate Letter from each SPSS Affiliate. (v) Stock Pledge and Escrow Agreement. The Shareholders shall have executed and delivered the Stock Pledge and Escrow Agreement, substantially in the form attached hereto as Exhibit H hereto and the Escrowed Shares shall have been deposited with the Escrow Agent to be held in escrow pursuant to the provisions of the Stock Pledge and Escrow Agreement. (vi) Share Certificates. SPSS shall deliver, or cause to be delivered, duly issued and signed share certificates for 90% of the purchase price together with stock powers in blank. (vii) Further Assurances. SPSS 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. 35 ARTICLE XIV SURVIVAL AND INDEMNIFICATION 14.1 Survival of Representations and Warranties; Covenants. Except as otherwise set forth in this Article XIV of this Agreement, 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 Audit 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 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 In2itive or the Shareholders in connection with this Agreement; (ii) any breach of any covenant, obligation or agreement of In2itive 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; and (iii) any intentional fraud or criminal act on the part of In2itive or the Shareholders. (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 In2itive 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 In2itive 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 In2itive 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 In2itive's past practice and customs; and (iv) all Taxes of any corporation other than In2itive which was at any time prior to the Closing Date a member of an "affiliated group" of corporations that included In2itive. 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 36 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 In2itive 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) All Losses payable by the Shareholders to SPSS pursuant to the indemnities provided in this Agreement shall not aggregate an amount greater than the Escrow Shares (the "Cap"), except as set forth in this Section 14.2(c). Except for a claim under Section 4.5(b) hereunder or a claim based on a breach of a representation or warranty hereunder caused by intentional fraud or criminal action on the part of a Shareholder, a claim against the Escrowed Shares shall be the exclusive remedy for SPSS hereunder. Except for a claim under Section 4.5 hereunder or a claim based on a breach of a representation or warranty hereunder involving intention fraud or criminal action on the part of a Shareholder, the indemnity provided in this Agreement shall not apply until the cumulative amount of all Losses shall exceed one percent (1%) of the Purchase Price, as measured by multiplying the number of shares issued pursuant to this Agreement times the closing price for SPSS on the Closing Date, in the aggregate (the "Basket"). If the Basket is exceeded, SPSS shall be entitled to the excess, if any, of the full amount of all such claims over the Basket, subject to the Cap. Notwithstanding any other provision of this Agreement, in no event shall the amount of Losses for which SPSS is indemnified by any Shareholder pursuant to Section 4.5 hereof or for which SPSS is indemnified by any Shareholder and which result from a breach of a representation or warranty caused by intentional fraud or criminal action by another Shareholder (but not the indemnifying Shareholder) exceed the purchase price paid by SPSS to such Shareholder hereunder, less any other Losses for which SPSS is indemnified by such Shareholder under this Agreement (but not subtracting the amount of Losses resulting from a breach of a representation or warranty involving intentional fraud or criminal action by such Shareholder). If a claim for breach of a representation or warranty on the part of the Shareholder or Shareholders is based on intentional fraud or criminal action and is made against a Shareholder or Shareholders of In2itive (the "Defrauding Shareholder") by SPSS, the Defrauding Shareholder which has engaged in such intentional fraud or criminal action shall indemnify and hold SPSS and its Representatives harmless from and against all Losses resulting from such breach of a representation or warranty caused by intentional fraud or criminal action by the Defrauding Shareholder without regard to the Basket or the Cap, and SPSS agrees to claim first against the Defrauding Shareholder to recoup its Losses. If the amount of the Losses resulting from the breach of a representation or warranty caused by intentional fraud or criminal action by the Defrauding Shareholder exceeds the amount for which SPSS and its Representative have recouped from the Defrauding Shareholder and its Representatives, then each other Shareholder shall be 37 responsible for its pro rata share of the remainder of such Losses on a pro-rata basis up to a maximum of the purchase price paid by SPSS to such Shareholder (its pro rata share of the Purchase Price) less such Shareholder's share of any other Losses (except for the amount of Losses resulting from a breach of any other representation or warranty involving intentional fraud or criminal action by such Shareholder) for which SPSS is indemnified by such Shareholder under this Agreement (the "Fraud Cap"). Notwithstanding anything contained or implied in this Agreement, the indemnity obligations set forth hereinabove in this paragraph shall survive the Closing without limitation except as provided by the applicable statute of limitations (including any extension of said statute of limitations); provided, however that the indemnity obligations of 2M Invest A/S and Dansk Erhvervsinvestering A/S set forth in this paragraph shall only survive until the second anniversary date of the Closing Date. (d) Any indemnification payment made pursuant to Article XIV of this Agreement shall be adjusted to reflect any tax benefit or liability gained or incurred as a result of such indemnification payment. 14.3 Indemnification by SPSS. SPSS agrees to indemnify and hold the shareholders and its affiliates and the respective managers, 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 intentional cause of action with respect thereto arises out of or is related to actions or omissions of In2itive 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 (including without limitation the commencement of any audit proceeding, the notice of non-filing of returns, the notice of non-payment of tax, or any other similar action or notice by any federal, state or other taxing authority) or the commencement of any action, suit or proceeding for which indemnification may be sought, and through counsel reasonably satisfactory to the indemnified 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. 38 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); provided, however, that the indemnified party may settle any 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 indemnification from the Shareholders. 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 39 returned to the Shareholders. Any post-administrative review contest shall be conducted at the sole cost and expense of the Shareholders. 14.5 Arbitration. Any dispute as to any claims under this Agreement shall be settled by binding arbitration in the City of Chicago, Illinois by three arbitrators, one of whom shall be appointed by the Shareholders, one by SPSS and the third of whom shall be appointed by the first two arbitrators. If either party fails to appoint an arbitrator within 20 days of a request in writing by the other party to do so or if the first two arbitrators cannot agree on the appointment of a third arbitrator within 20 days of their designation, then such arbitrator shall be appointed by the Chief Judge of the United States District Court for the Northern District of Illinois. Except as to the selection of arbitrators which shall be as set forth above, the arbitration shall be conducted promptly and expeditiously in accordance with the commercial arbitration rules of the American Arbitration Association so as to enable the arbitrators to render an award within 90 days of the commencement of the arbitration proceedings. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Each party shall bear the expenses of its arbitrator and shall jointly and equally share with the other the expenses for the third arbitrator and the arbitration. 14.6 Treatment as Adjustment of Acquisition Price. Any indemnity payment received by a party hereunder shall be treated as an adjustment of the acquisition price. ARTICLE XV TERMINATION, AMENDMENT AND WAIVER Termination. This Agreement may be terminated at any time prior to the Closing Date, whether before or after approval by the Shareholders of In2itive: (a) by the Board of Directors of SPSS; (b) by the Shareholders or SPSS if a material breach of any provision of this Agreement has been committed and such breach is not waived; (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 In2itive on or before November 30, 1997; or (d) by the Shareholders, 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 SPSS or before November 30, 1997; or 40 (e) by either SPSS or the Shareholders if the Acquisition shall not have been consummated on or before November 30, 1997 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 the Shareholders or SPSS or their respective officers, managers 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 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. 16.3 Expenses. Whether or not the transactions contemplated by this Agreement shall be consummated, the parties hereto agree that all fees and expenses incurred by In2itive or the Shareholders, on the one hand, and 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 the Shareholders, and by SPSS, respectively, including, without limitation, all fees of counsel and accountants, provided, however, the Shareholders and SPSS agree to each pay one-half of any assessed Danish stock transfer tax due upon completion of the Acquisition, SPSS agrees to pay fees incurred by In2itive to KPMG Peat Marwick for the audit of In2itive financials, if required, and the Total Shares shall be reduced accordingly. Payment of the fees and expenses incurred by the In2itive Shareholders not exceeding $99,163 shall be made by SPSS, and the Total Shares shall be reduced in accordance with Section 1.2 hereof. 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: 41 (a) If to the Shareholders to: Ole Stangegaard In2itive Technologies, AS Roejelskaer 11 DK-2840 Holte, Copenhagen, Denmark Facsimile Number: 45 45 41 15 45 with a copy to: Mazanti-Andersen, Korso Jensen & Brothers Store Kongensgade 69 1264 Copenhagen, Denmark Attention: Georg Dedichen Facsimile Number: 011 45 33 111073 or to such other person or address as In2itive 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. 444 North Michigan Avenue Chicago, Illinois 60611 Attention: Mr. Edward Hamburg Facsimile Number: (312) 329-3558 with a copy to: Ross & Hardies 150 North Michigan Avenue, Suite 2500 Chicago, Illinois 60601 Attention: T. Stephen Dyer, Esq. Facsimile Number: (312) 750-8600 or to such other person or address as SPSS shall furnish to In2itive 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 42 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. 16.6 Publicity. In2itive 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 Illinois of the United States of America, without regard to its conflicts of law doctrine. The parties hereto expressly submit themselves to the non-exclusive jurisdictions of the State and Federal Courts of the Northern District of Illinois for the resolution of any disputes which may arise under or with respect to compliance with this Agreement. 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 References to Laws. References to particular statutes within this Agreement, to the extent such references relate to laws other than the laws of the United States or any particular State thereof, are intended to refer, and shall be construed as referring, to laws of Denmark. 16.13 Entire Agreement. This Agreement, including the Exhibits and Schedules hereto, sets forth the entire agreement and understanding of the parties hereto in respect 43 of the subject matter contained herein, and supersedes all prior agreements, covenants, representations or warranties, whether oral or written, by any party hereto. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as of the day and year first written above. SPSS INC. /s/ Edward Hamburg By: Edward Hamburg Title: Executive Vice President Corporate Operations and Chief Executive Officer SHAREHOLDERS: /s/ Jens Nielsen /s/ Bjorn Haugland - ----------------------------- ---------------------------- Jens Nielsen Bjorn Haugland /s/ Soren Brunn, /s/ Henrik Rosendahl as power of attorney - ----------------------------- ---------------------------- Henrik Rosendahl 2M Invest By: Its: /s/ Ole Stangegaard, /s/ Ole Stangegaard as power of attorney - ----------------------------- ---------------------------- Ole Stangegaard Peter Tottrup /s/ Ole Stangegaard, /s/ Lars Thinggard as power of attorney - ----------------------------- ---------------------------- Lars Thinggaard Steen Hansen /s/ Ole Stangegaard, /s/ Edward O'Hara as power of attorney - ----------------------------- ---------------------------- Edward O'Hara Magnus Egholm /s/ Ole Stangegaard, /s/ Ole Stangegaard, as power of attorney as power of attorney - ----------------------------- ---------------------------- Mikkel Jorgensen Michael Elbaek Bertelsen /s/ Ole Stangegaard, /s/ Ole Stangegaard, as power of attorney as power of attorney - ----------------------------- ---------------------------- Bjarne Jensen Thomas Leistiko /s/ Ole Stangegaard, /s/ Ole Stangegaard, as power of attorney as power of attorney - ----------------------------- ---------------------------- Dansk Erhvervsinvestering Dorte Siggaard Andersen By: 44 /s/ Ole Stangegaard, /s/ Ole Stangegaard, as power of attorney as power of attorney - ----------------------------- ---------------------------- MSP Finans 2 ApS Hans Chr. Iversen 45 THE SHAREHOLDERS' REPRESENTATIVE HEREBY ACCEPTS AND AGREES TO THE DUTIES AND OBLIGATIONS SET FORTH HEREIN. /s/ Ole Stangegaard - ----------------------------- Ole Stangegaard, as Shareholders' Representative 46 TABLE OF CONTENTS ARTICLE I - TERMS OF PURCHASE AND SALE........................................ 1 1.1 Purchase and Sale of the Shares............................. 1 1.2 Payment of Purchase Price................................... 1 1.3 Closing..................................................... 2 1.4 Tax and Accounting.......................................... 2 ARTICLE II SHAREHOLDERS' REPRESENTATIVE....................................... 2 ARTICLE III ESCROW............................................................ 4 3.1 Escrow...................................................... 4 3.2 Escrowed Shares............................................. 4 ARTICLE IV SECURITIES MATTERS................................................. 4 4.1 Registration of SPSS Common Stock........................... 4 4.2 Sales of SPSS Common Stock by Shareholders.................. 6 4.3 Registration Expenses....................................... 6 4.4 Restricted Stock............................................ 6 4.5 Indemnification ............................................ 7 4.6 Additional Obligations of SPSS.............................. 9 4.7 Reports Under the Exchange Act.............................. 8 ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS..................10 5.1 Organization and Qualification..............................10 5.2 Authority...................................................10 5.3 Capitalization..............................................11 5.4 Title to Shares.............................................11 5.5 Consents and Approvals......................................12 5.6 Absence of Conflicts........................................12 5.7 Financial Statements; Accounts Receivable...................12 5.8 Absence of Undisclosed Liabilities; Warranties in Connection with Software Products......................................12 5.9 Absence of Certain Changes or Events........................13 5.10 Investment in the SPSS Common Stock.........................14 5.11 Real and Personal Property; Inventories.....................15 5.12 Patents, Trademarks, Etc....................................15 5.13 Employees...................................................16 5.14 Contracts and Commitments...................................16 5.15 Source Code.................................................17 5.16 Government Contracts........................................17 5.17 Insurance...................................................17 5.18 Litigation and Administrative Proceedings...................17 5.19 Tax Matters.................................................18 i 5.20 Compliance with Laws........................................19 5.21 Environmental and Safety Matters............................19 5.22 Employee Benefits...........................................20 5.23 Licenses and Permits........................................20 5.24 Relations With Suppliers and Customers......................20 5.25 Interests in Competitors, Suppliers and Customers...........20 5.26 Employment Matters..........................................20 5.27 Related Transactions........................................21 5.28 Brokers and Finders.........................................21 5.29 Questionable Payments.......................................21 5.30 Books and Records...........................................21 5.31 Bank Accounts; Safe Deposit Boxes...........................21 5.32 Full Disclosure.............................................21 5.33 Effect of Certificates......................................22 5.34 Accounting Matters..........................................22 ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SPSS.............................22 6.1 Organization and Qualification. ............................22 6.2 Authority...................................................22 6.3 Consents and Approvals......................................22 6.4 Absence of Conflicts........................................23 6.5 Capitalization..............................................23 6.6 Reports and Financial Statement.............................23 6.7 Litigation and Administrative Proceedings. ................24 6.8 Brokers and Finders.........................................24 6.9 SPSS Common Stock...........................................24 6.10 Effect of Certificates......................................24 6.11 Pooling of Interests Accounting.............................24 6.12 Dividends and Distributions.................................24 6.13 Marketable Title............................................24 6.14 Reliance on Responses.......................................24 ARTICLE VII COVENANTS RELATING TO CONDUCT OF BUSINESS.........................25 7.1 Conduct of Business.........................................25 ARTICLE VIII COVENANTS OF THE SHAREHOLDERS....................................27 8.1 Consents and Approvals......................................27 8.2 Closing Tax.................................................28 8.3 Access to Information.......................................28 8.4 Affiliates and Certain Stockholders.........................28 8.5 Further Assurances..........................................29 ARTICLE IX COVENANTS OF SPSS..................................................29 9.1 Retention of Records........................................29 ii 9.2 Severance Packages..........................................29 9.3 Further Assurances..........................................29 9.4 Affiliates and Certain Stockholders.........................29 ARTICLE X MUTUAL COVENANTS....................................................30 10.1 Confidentiality.............................................30 10.2 Consistent Tax Reporting....................................30 10.3 Cooperation.................................................31 ARTICLE XI CONDITIONS TO OBLIGATIONS .........................................31 11.1 Representations and Warranties..............................31 11.2 Performance.................................................31 11.3 Filings; Consents; Waiting Periods..........................31 11.4 No Injunction...............................................31 11.5 Pooling.....................................................31 11.6 Delivery....................................................32 11.7 Legal Opinion...............................................32 ARTICLE XII CONDITIONS TO OBLIGATIONS OF SPSS.................................32 12.1 Representations and Warranties..............................32 12.2 Performance.................................................32 12.3 Filings; Consents; Waiting Periods..........................32 12.4 No Litigation...............................................32 12.5 Non-Compete Agreements......................................33 12.6 Legal Opinion...............................................33 12.7 Pooling.....................................................33 12.8 Shareholder Approval........................................33 12.9 Affiliates and Certain Stockholders.........................33 12.10 Delivery....................................................33 ARTICLE XIII CLOSING DELIVERIES...............................................33 13.1 Books and Records...........................................33 13.2 Legal Opinion...............................................34 13.3 Consents....................................................34 13.4 Closing Certificates........................................34 13.5 Charter; Certificates.......................................34 13.6 Affiliates Letters..........................................34 13.7 Stock Pledge and Escrow Agreement...........................34 13.8 Resignations of In2itive's Managers and Directors...........34 13.9 CFMC Compliance.............................................34 13.10 Performance.....................................34 13.11 Further Assurances..............................35 ARTICLE XIV SURVIVAL AND INDEMNIFICATION......................................36 iii 14.1 Survival of Representations and Warranties; Covenants.......36 14.2 Indemnification.............................................36 14.3 Indemnification by SPSS.....................................38 14.4 Indemnification Procedure...................................38 14.5 Arbitration.................................................40 14.6 Treatment as Adjustment of Acquisition Price................40 ARTICLE XV TERMINATION, AMENDMENT AND WAIVER..................................40 15.1 Termination.................................................40 15.2 Effect of Termination.......................................41 ARTICLE XVI MISCELLANEOUS.....................................................41 16.1 Amendment and Modification..................................41 16.2 Waiver of Compliance........................................41 16.3 Expenses....................................................41 16.4 Notices.....................................................41 16.5 Assignment..................................................42 16.6 Publicity...................................................43 16.7 Headings....................................................43 16.8 Severability................................................43 16.9 Governing Law...............................................43 16.10 Counterparts................................................43 16.11 Third Parties...............................................43 16.12 References to Laws..........................................43 16.13 Entire Agreement............................................43 iv EX-5.1 4 ROSS & HARDIES OPINION EXHIBIT 5.1 November 26, 1997 SPSS INC. 444 N. Michigan Avenue Chicago, Illinois 60611 Re: Registration Statement on Form S-3 Ladies and Gentlemen: You have requested our opinion with respect to the offering and sale of Common Stock pursuant to a Registration Statement on Form S-3 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Act"), of up to an aggregate of 1,031,951 shares of Common Stock, $.01 par value per share (the "Common Stock") of SPSS Inc. (the "Corporation"). In so acting, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as we have deemed relevant and necessary to form a basis for the opinions hereinafter expressed. In conducting such examination, we have assumed (i) that all signatures are genuine, (ii) that all documents and instruments submitted to us as copies conform with the originals, and (iii) the due execution and delivery of all documents where due execution and delivery are a prerequisite to the effectiveness thereof. As to any facts material to this opinion, we have relied upon statements and representations of officers and other representatives of the Corporation and certificates of public officials and have not independently verified such facts. Based upon the foregoing, it is our opinion that the Common Stock is legally issued, fully paid and non-assessable. We express no opinion as to the laws of any jurisdiction other than the State of Illinois, the United States of America, and, solely with respect to matters of corporate organization and authority, the General Corporation Law of the State of Delaware. We are not admitted to the practice of law in the State of Delaware. Insofar as the foregoing opinion relates to matters that would be controlled by the substantive laws of any jurisdiction other than the United States of America, the General Corporation Law of the State of Delaware (with respect to matters of corporate organization and authority) or the State of Illinois, we have assumed that the substantive laws of such jurisdiction conform in all respects to the internal laws of the State of Illinois. We hereby consent to the use of this opinion as Exhibit 5.1 to the Registration Statement relating to the registration of 1,031,951 shares of Common Stock and to the use of our name as your counsel in connection with the Registration Statement and in the Prospectus forming a part thereof. Very truly yours, ROSS & HARDIES By: /s/ T. Stephen Dyer A Partner - 28 - EX-15.1 5 LETTER RE UNAUDITED INTERIM FINANCIAL INFORMATION EXHIBIT 15.1 LETTER RE: UNAUDITED INTERIM FINANCIAL INFORMATION The Board of Directors SPSS Inc.: With respect to the subject registration statement on Form S-3, we acknowledge our awareness of the incorporation by reference therein of our reports dated April 29, 1997, July 29, 1997, and October 29, 1997, related to our reviews of interim financial information as of March 31, 1997, June 30, 1997, and September 30, 1997, respectively, which reports appear in the quarterly reports on Form 10-Q of SPSS Inc. for the quarters ended March 31, 1997, June 30, 1997, and September 30, 1997, respectively, incorporated by reference therein. Pursuant to Rule 436(c) under the Securities Act of 1933, such reports are not considered part of a registration statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of sections 7 and 11 of the Act. /s/ KPMG PEAT MARWICK LLP Chicago, Illinois November 26, 1997 - 29 - EX-23 6 ACCOUNTANT'S CONSENT EXHIBIT 23.1 ACCOUNTANTS' CONSENT The Board of Directors SPSS Inc.: We consent to incorporation by reference in the registration statement on Form S-3 of SPSS Inc. of our audit report dated February 19, 1997, relating to the consolidated balance sheets of SPSS Inc. and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 1996, and the related schedule, which report appears in the December 31, 1996 annual report on Form 10-K of SPSS Inc. /s/ KPMG PEAT MARWICK LLP Chicago, Illinois November 26, 1997 - 30 - -----END PRIVACY-ENHANCED MESSAGE-----