SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 31, 1996
Datastream Systems, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-25590 57-0813674
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
50 Datastream Plaza, Greenville, S.C. 29605
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (864) 422-5001
Not Applicable
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On December 31, 1996, Datastream Systems, Inc. (the "Company") consummated
the acquisition of all of the capital stock and equity interests of SQL Group,
B.V., a corporation organized and existing under the laws of The Netherlands
("SQL"). SQL was founded in 1988, is a leading computerized maintenance
management software vendor in Europe and has developed an Oracle-based client/
server maintenance management system with cross-platform capability that is
available in twelve languages. As consideration for the acquisition and pursuant
to the Share Purchase Agreement dated as of December 15, 1996 by and among the
Company, SQL and the stockholders of SQL (the "SQL Stockholders"), Datastream
paid the SQL Stockholders $17 million in cash and 751,381 shares of the Common
Stock of the Company, which consideration was determined as a result of arm's
length negotiations between the two unaffiliated parties. The Company used funds
from its initial public offering in April 1995 and its secondary offering in
October 1995 to fund the acquisition.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
As of the filing date of this Current Report on Form 8-K, it is
impracticable for the Company to provide the financial statements required by
Item 7(a) of Form 8-K. In accordance with Item 7(a)(4) of Form 8-K, such
financial statements shall be filed by amendment to this Form 8-K no later than
60 days after December 31, 1996.
(b) Pro Forma Financial Information.
As of the filing date of this Current Report on Form 8-K, it is
impracticable for the Company to provide the pro forma financial information
required by Item 7(b) of Form 8-K. In accordance with Item 7(a)(4) of Form 8-K,
such pro forma financial information shall be filed by amendment to this Form
8-K no later than 60 days after December 31, 1996.
(c) Exhibits.
The following exhibits are filed herewith in accordance with the
provisions of Item 601 of Regulation S-K:
Exhibit No. Description of Exhibit
2.1 Share Purchase Agreement dated as of December 15, 1996 by and among
Datastream Systems, Inc., SQL Group, B.V. and the stockholders of SQL
Group, B.V. listed on the signature pages thereto.
4.1 Escrow Agreement dated as of December 31, 1996 by and among Datastream
Systems, Inc., the stockholders of SQL Group, B.V. listed on the
signature pages thereto and Robert J.J. Lijdsman, as Escrow Agent.
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Exhibit No. Description of Exhibit
4.2 Registration Rights Agreement dated as of December 31, 1996 by and
among Datastream Systems, Inc., the stockholders of SQL Group, B.V.
listed on the signature pages thereto and Residentie Participaties
III CV, in its capacity as the SQL Stockholders' Representative.
Item 9. Sale of Securities Pursuant to Regulation S.
As a portion of the consideration for the acquisition of all of the
capital stock and equity interests of SQL, on December 31, 1996 the Company
issued 751,381 shares of its Common Stock, $.01 par value per share, to the SQL
Stockholders. The shares of Common Stock were issued without registration
pursuant to the exemption provided by Rule 903 of Regulation S promulgated under
the Securities Act of 1933, as amended ("Regulation S"). The Company claims this
exemption from registration on the basis that the issuance was made (i) in an
"offshore transaction" to persons who are not "U.S. person" as defined in Rule
902 of Regulation S, (ii) the Company and its affiliates and any agent acting on
behalf of the Company or its affiliates did not engage in any "directed selling
efforts" as defined in Rule 902 of Regulation S, (iii) "Offering Restrictions"
as defined in Rule 902 of Regulation S were, to the extent applicable,
implemented by the Company, and (iv) all of the shares of Common Stock issued to
the SQL Stockholders are subject to the restriction that they may not be traded
for 40 days after the date of issuance and bear a legend to such effect. The
Company also claims an exemption from registration under Section 4(2) of the
Securities Act of 1933, as amended, because the shares of Common Stock were
issued to a small number of persons in a transaction that did not involve any
public offering.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATASTREAM SYSTEMS, INC.
Date: _______________
Larry G. Blackwell, Ph.D., P.E.
President and Chief Executive Officer
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATASTREAM SYSTEMS, INC.
Date: 01/10/97 /s/ Larry G. Blackwell, Ph.D., P.E.
-----------------------------------
Larry G. Blackwell, Ph.D., P.e.
President and Chief Executive Officer
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
2.1 Share Purchase Agreement dated as of December 15, 1996 by and among
Datastream Systems, Inc., SQL Group, B.V. and the stockholders of SQL
Group, B.V. listed on the signature pages thereto.
4.1 Escrow Agreement dated as of December 31, 1996 by and among
Datastream Systems, Inc., the stockholders of SQL Group, B.V. listed
on the signature pages thereto and Robert J.J.Lijdsman, as Escrow
Agent.
4.2 Registration Rights Agreement dated as of December 31, 1996 by and
among Datastream Systems, Inc., the stockholders of SQL Group, B.V.
listed on the signature pages thereto and Residentie Participaties
III CV, in its capacity as the SQL Stockholders' Representative.
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EXHIBIT 2.1
Execution Copy
DATED AS OF DECEMBER 15, 1996
SHARE PURCHASE AGREEMENT
by and among
DATASTREAM SYSTEMS, INC.
("Datastream"),
SQL GROUP, B.V.
("SQL"),
and
THE STOCKHOLDERS OF SQL GROUP, B.V.
LISTED ON THE SIGNATURE PAGES HERETO
(the "SQL Stockholders")
<PAGE>
4
SHARE PURCHASE AGREEMENT
BY AND AMONG
DATASTREAM SYSTEMS, INC.,
SQL GROUP, B.V.
AND
THE STOCKHOLDERS OF SQL GROUP, B.V.
LISTED ON THE SIGNATURE PAGES HERETO
TABLE OF CONTENTS
ARTICLE I DEFINITIONS...............................................1
ARTICLE II SHARE PURCHASE............................................7
ARTICLE III THE CLOSING...............................................8
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SQL
STOCKHOLDERS..............................................8
ARTICLE V REPRESENTATIONS AND WARRANTIES OF DATASTREAM.............19
ARTICLE VI ADDITIONAL COVENANTS AND AGREEMENTS......................21
ARTICLE VII CLOSING CONDITIONS.......................................26
ARTICLE VIII TERMINATION..............................................28
ARTICLE IX SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND
INDEMNIFICATION..........................................29
ARTICLE X STOCKHOLDERS' REPRESENTATIVE.............................32
ARTICLE XI GENERAL PROVISIONS.......................................34
EXHIBITS
EXHIBIT A ESCROW AGREEMENT
EXHIBIT B NOTARIAL DEED
EXHIBIT C REGISTRATION RIGHTS AGREEMENT
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SHARE PURCHASE AGREEMENT
BY AND AMONG
DATASTREAM SYSTEMS, INC.,
SQL GROUP, B.V.
AND
THE STOCKHOLDERS OF SQL GROUP, B.V.
LISTED ON THE SIGNATURE PAGES HERETO
THIS SHARE PURCHASE AGREEMENT is made and entered into as of this 15th
day of December, 1996, by and among Datastream Systems, Inc., a Delaware
corporation ("Datastream"), SQL Group, B.V., a corporation organized and
existing under the law of The Netherlands ("SQL"), and the stockholders of SQL
listed on the signature pages hereto (hereinafter referred to individually as an
"SQL Stockholder" and collectively as the "SQL Stockholders").
The parties hereto have agreed that Datastream will acquire SQL by
purchasing all of the capital stock of SQL from the SQL Stockholders upon the
terms and conditions set forth herein (the "Transaction"). The Board of
Directors of Datastream and the Supervisory Board of SQL have approved the
Transaction and this Agreement. The parties hereto desire to make this Agreement
for the purpose of setting forth certain representations, warranties, covenants
and conditions in connection with the Transaction.
THEREFORE, in consideration of the mutual representations, warranties,
covenants, and conditions contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following capitalized terms used in this Agreement shall have the
meanings set forth below:
1.1 "Affiliate" means, with respect to a specific Person, another Person
that directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the Person specified.
1.2 "Articles of Association" of a corporation incorporated in The
Netherlands means the Articles of Association of such corporation, as amended
through the date hereof.
1.3 "Business Day" means any day, other than a Saturday, Sunday or legal
holiday on which banks are permitted to close in either Greenville, South
Carolina or Rotterdam, The Netherlands.
1.4 "Cash Consideration" means US $17.0 million, the aggregate amount of
cash to be delivered by Datastream at the Effective Time.
1.5 "Claim" or "Claims" shall mean any demand, claim, action or cause of
action, assessment, loss, damage, liability, cost or expense described in
Article IX hereof.
1.6 "Closing" means the closing of the transactions contemplated
by this Agreement.
1.7 "Closing Date" means the date on which the Effective Time shall
occur.
1.8 "Code" means the Internal Revenue Code of 1986, as amended.
1.9 "Datastream" means Datastream Systems, Inc., a Delaware
corporation.
1.10"Datastream Common Stock" means the shares of common stock, $.01 par
value per share, of Datastream.
1.11"DGCL" means the Delaware General Corporation Law.
1.12"Disclosure Letter" means that certain letter by the SQL
Stockholders to Datastream dated as of the date hereof that sets forth with
particularity, by reference to particular Sections of this Agreement, those
facts and circumstances, which if not disclosed therein, would result in a
breach of the representations and warranties contained in Article IV hereof or
of the additional covenants and agreements set forth in Article VI hereof.
1.13"Effective Time" means the date and time at which the Notarial
Deed is executed.
1.14"Environmental Laws" means all laws relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, ground water, land, surface or subsurface strata) or
concerning or relating to emissions, discharges, releases or threatened releases
of any Hazardous Materials, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of any Hazardous Materials.
1.15"Environmental Permits" means all permits, licenses, approvals,
consents, and authorizations relating to environmental matters or issued under
Environmental Laws.
1.16"Escrow Agent" means the escrow agent to be named under the
Escrow Agreement.
1.17"Escrow Agreement" means the Escrow Agreement referred to in Section
9.9 hereof, substantially in the form attached hereto as Exhibit A.
1.18"Escrow Shares" means the 150,276 shares of Datastream Common Stock
to be deposited in escrow by the SQL Stockholders (other than Marconi Stichting)
pursuant to the Escrow Agreement in the proportions set forth on Schedule 2.2.
1.19"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
1.20"Financial Statements" means (i) the audited consolidated balance
sheet, statement of operations and statement of stockholders' equity of SQL,
together with related schedules and notes, as of and for the twelve-month period
ended December 31, 1995, and (ii) the Interim Statements.
1.21"Governmental Authority" means any court, administrative agency,
commission or other governmental authority or instrumentality, local, state or
federal, of any domestic or foreign government.
1.22"Hazardous Materials" means any hazardous, toxic, or polluting
substances, materials, pollutants, contaminants, petroleum or petroleum
products, gas or gas products or asbestos-containing materials (as any of such
terms may be defined under any applicable laws or regulations of any
Governmental Authority).
1.23"Indemnified Party" shall have the meaning ascribed to such term in
Section 9.4 hereof.
1.24"Indemnifying Party" shall have the meaning ascribed to such term in
Section 9.4 hereof.
1.25"Intellectual Property" means all intellectual property and the
rights thereto, whether owned or used by SQL or one of its Affiliates or
licensed from another party by SQL or one of its Affiliates, whether existing
under the laws of The Netherlands, the United States of America or any other
jurisdiction, including, without limitation:
(a) patents, patent applications, patent rights, patent
disclosures and improvements thereto;
(b) trademarks, trade names, trade designs, trade dress logos,
service marks, corporate names and registrations and applications for
registrations thereof;
(c) copyrights, and registrations and applications for
registration thereof;
(d) computer software (including without limitation the
source code for any such software), data and documentation;
(e) trade secrets and confidential business information, including
without limitation, customer lists, ideas, formulae, inventions (whether
patentable or not and whether or not reduced to practice), know-how,
manufacturing and production processes and techniques, research and development
information, drawings, specifications, designs, plans, development and other
tools, proposals, technical data, copyrightable works of authorship, financial,
marketing and business data, pricing and cost information, business and
marketing plans, proprietary processes, techniques and formulae;
(f) other proprietary rights; and
(g) all documentation and tangible embodiments thereof (in whatever
form or medium) constituting, describing or relating to the above, including,
without limitation, manuals, memoranda and records.
1.26"Interim Statements" means the unaudited consolidated balance sheet
and statement of operations of SQL, together with any related schedules and
notes, as of and for the nine-month period ended September 30, 1996.
1.27"Liability" means any and all liability for damages (as such term is
commonly defined under Dutch law), provided, that such term shall also include
attorneys' fees and expenses necessary to enforce rights hereunder if such
rights arise in respect of gross misrepresentation, fraud or illegal business
activities.
1.28"Lien" means any mortgage, charge, pledge, lien, option, right of
conversion, right to purchase or other form of security or encumbrance of any
kind or nature whatsoever, on , over or affecting the subject assets, property
or securities (provided, that such term shall not be deemed to include rights of
first refusal, preemptive, preferential or similar rights, including those
rights commonly known under Dutch corporate law as "blocking rights").
1.29"Material" or "material" means any event, change or effect related
to the condition (financial or otherwise), properties, assets, liabilities,
businesses, operations or results of operations of an entity that a reasonable
investor would deem to be important in deciding whether or not to make an
investment in such entity. No particular dollar (or other currency) amount shall
be dispositive of materiality.
1.30"Material Adverse Effect" means a Material adverse effect on the
condition (financial or other), business, properties, net worth or results of
operations of a company and its Subsidiaries taken as a whole.
1.31"Nasdaq/NMS" means the automated quotation system of the
Nasdaq Stock Market, Inc. known as the National Market System, on which
the Datastream Common Stock is listed.
1.32"Notarial Deed" means the Notarial Deed of Transfer, substantially
in the form of Exhibit B hereto, by which the shares of SQL Capital Stock will
be transferred, free and clear of any Liens, from the SQL Stockholders to
Datastream.
1.33"Optionholders" shall mean the persons named on Annex 4.6(a) to the
Disclosure Letter as holders, as of the date hereof, of options to purchase
depository receipts representing shares of SQL Capital Stock at the respective
exercise prices set forth thereon.
1.34"Person" means a natural person, company, corporation, partnership,
government, or political subdivision, agency or instrumentality of any domestic
or foreign government.
1.35"Products" shall have the meaning set forth in Section 4.20(a)
hereof.
1.36"Registration Rights Agreement" means the Registration Rights
Agreement, substantially in the form of Exhibit C hereto, among Datastream and
the SQL Stockholders.
1.37"Regulation S" means Regulation S and the rules thereunder
promulgated under the Securities Act of 1933, as amended.
1.38"Regulation S Legend" means the legend to be placed on the shares of
Datastream Common Stock constituting the Stock Consideration that reads as
follows:
"The shares of Datastream Common Stock represented by this
Certificate have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), and have been issued
outside the United States in reliance upon Regulation S promulgated
under the Securities Act. Such shares may not be offered or sold in
the United States or to U.S. persons (as defined in Regulation S
promulgated under the Securities Act), other than distributors,
unless the shares are registered under the Securities Act or such
offer or sale is made in compliance with Regulation S or another
exemption from the registration requirements of the Securities Act
is available.
1.39"SEC" means the Securities and Exchange Commission.
1.40"SEC Documents" means Datastream's Annual Report on Form 10-K and
Annual Report to Stockholders for the fiscal year ended December 31, 1995, all
Quarterly Reports on Form 10-Q filed with the SEC since December 31, 1995 and
all Current Reports on Form 8-K filed with the SEC since December 31, 1995,
Datastream's Proxy Statement for the 1995 Annual Meeting of Stockholders and all
other reports filed or required to be filed by Datastream with the SEC
subsequent to January 1, 1996 and prior to the Effective Time.
1.41"Securities Act" means the Securities Act of 1933, as amended.
1.42"Service Agreements" means the respective Amended and Restated
Employment Agreements to be entered into as of the Closing Date between SQL and
each of Peter A.G. Huisman and Vincent Mom, which will reflect the discussions
between the parties prior to the date hereof. Each such Service Agreement shall,
by its terms, amend and (to the extent set forth therein) supersede any and all
prior employment agreements or compensatory arrangements by and between SQL (or
any Subsidiary or Affiliate of SQL) and such executive.
1.43"Severance and Non-Compete Agreement" means the Severance and
Non-Compete Agreement, which will reflect the discussions between the parties
prior to the date hereof, to be entered into between SQL and Paul de Gruyter.
1.44"SQL" means SQL Group, B.V., a corporation organized and existing
under the laws of The Netherlands, together with any predecessor corporation of
SQL, if any.
1.45"SQL Capital Stock" means all of the outstanding shares of capital
stock of SQL, except those shares of common stock held by SQL as treasury shares
as scheduled in Annex 4.6(a) of the Disclosure Letter.
1.46"SQL Expenses" means all fees and expenses, incurred by SQL and all
fees and expenses of the SQL Stockholders in connection with the preparation for
and consummation of the transactions contemplated by this Agreement and the
other documents or instruments referenced in this Agreement, including, without
limitation, all attorneys', accountants', investment banking and other
professional fees and expenses and brokers' or finders' fees and expenses
(including those of Alex. Brown & Sons, Inc.) for persons engaged by SQL or the
SQL Stockholders (or claiming to be so engaged), filing fees, copying expenses,
travel expenses (if any) and other out-of-pocket costs related to the
Transaction. The term "SQL Expenses" shall exclude (i) the actual and reasonable
attorney's fees incurred by SQL in connection with the negotiation of this
Agreement on its behalf to the extent of 20% thereof up to a maximum amount of
NLG 50,000 and (ii) the actual and reasonable fees of Deloitte & Touche incurred
in connection with the review contemplated by Section 6.10.
1.47"SQL Stockholders' Representative" shall have the meaning ascribed
to such term in Section 11.1 hereof.
1.48"Stock Consideration" means 751,381 shares of Datastream Common
Stock, the aggregate number of shares of Datastream Common Stock to be delivered
by Datastream at the Effective Time. Subject to Section 6.13 hereof, the
certificates evidencing the shares of Datastream Common Stock constituting the
Stock Consideration shall bear the Regulation S Legend and the certificates
evidencing the Escrow Shares may also bear a legend referencing this Agreement
and the Escrow Agreement.
1.49"Stock Price" means the average of the high and low bid and ask
prices of Datastream Common Stock on the Nasdaq/NMS (or other principal stock
market on which the Datastream Common Stock is, as of the date of such
determination, then traded) on any particular date, as such prices are reported
by the Wall Street Journal.
1.50"Subsidiary," with respect to any entity, means another entity the
majority of the outstanding equity interests of which are owned by the first
entity, together with any predecessor corporation of such majority-owned entity,
if any.
1.51"Tax or Taxes" means, with respect to any entity, all corporate
("VpB") income taxes (including any tax on or based upon net income, gross
income, income as specially defined, earnings, profits, or selected items of
income, earnings, or profits) and all sales, use, transfer, franchise, license,
withholding, social security and payroll, employment, severance, occupation,
pension premium, V.U.T., property or alternative or add-on minimum taxes,
customs duties, or other taxes, fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax, or
additional amounts imposed by any taxing authority (domestic or foreign) on such
entity, whether disputed or not.
1.52"Total Consideration" means US $ 34.0 million, the ascribed value of
the Transaction, paid in cash and Datastream Common Stock as set forth herein.
1.53 "Transaction Consideration" means the Cash Consideration and the
Stock Consideration payable by Datastream. As used herein, the term "Transaction
Consideration" is expressed on a per share basis; provided that the payment or
delivery of the Transaction Consideration shall be in the proportions set forth
on Schedule 2.2.
1.54 "Transaction Documents" means this Agreement, the Escrow Agreement,
the Notarial Deed, the Registration Rights Agreement, the Service Agreements and
the Severance and Non-Compete Agreement.
ARTICLE II
SHARE PURCHASE
2.1 Performance of Agreement. Prior to the date hereof, the parties
hereto shall take all actions necessary in accordance with applicable corporate
law and their respective Certificate of Incorporation and Bylaws or Articles of
Association to approve this Agreement and the transactions contemplated hereby
and to cause the Transaction to be consummated, including, without limitation,
convening meetings of the stockholders of the respective parties to consider and
vote upon the approval of the Transaction if such stockholder approval is
required (or obtaining the written consent of the stockholders in lieu of a
meeting if permitted under applicable law).
2.2 Sale and Purchase of SQL Capital Stock. Each of the SQL Stockholders
hereby sells all of the right, title and interest in and to the SQL Capital
Stock owned by each of them and Datastream hereby purchases all of such right,
title and interest in such shares of SQL Capital Stock, subject to the terms and
conditions hereof. Each outstanding share of SQL Capital Stock sold and
purchased shall be transferred to Datastream, free and clear of any Liens, and
the Transaction shall be deemed effective, at the Effective Time by execution of
a Notarial Deed substantially in the form of Exhibit B attached hereto, in
consideration for Datastream's payment and delivery of the Transaction
Consideration in respect of each such share. At Closing, in exchange for the SQL
Capital Stock transferred to Datastream by each SQL Stockholder, and for the
options held by the Optionholders transferred to Datastream at Closing by
Marconi Stichting acting on behalf of the Optionholders, Datastream shall, with
respect to each of the SQL Stockholders (with Marconi Stichting acting for
itself and also on behalf of the Optionholders), in the proportions set forth on
Schedule 2.2, (i) deliver certificates representing the number of shares of
Datastream Common Stock equal to the aggregate Stock Consideration (less the
Escrow Shares) due to the SQL Stockholders (with Marconi Stichting acting for
itself and also on behalf of the Optionholders), (ii) effect a wire transfer to
an account of the SQL Stockholders' Representative for the benefit of the SQL
Stockholders (with Marconi Stichting acting for itself and also on behalf of the
Optionholders) in an amount equal to the aggregate Cash Consideration due to
them, and (iii) deliver certificates representing the Escrow Shares to the
Escrow Agent. At Closing, Datastream may deduct from the aggregate Cash
Consideration due to each SQL Stockholder, such SQL Stockholder's pro rata
portion of the reimbursement obligation of the SQL Stockholders set forth in
Section 6.5 hereof as agreed on or prior to Closing. Schedule 2.2 shall be
delivered to Datastream by the SQL Stockholders at Closing and shall identify
the proportionate share of the Total Consideration and, for purposes of Article
IX hereof, the proportionate share of the SQL Stockholders' indemnification
obligations, it being agreed that Marconi Stichting's share of the SQL
Stockholders' indemnification obligations shall be shared by the other SQL
Stockholders and that such proportionate shares shall total to 100%.
2.3 Board Resignations. The SQL Stockholders shall cause all of
the members of the SQL Supervisory Board and its Management Board to
resign, effective as of the Effective Time..
ARTICLE III
THE CLOSING
3.1 Location, Time, Etc. The Closing shall be held at the offices of
Trenite Van Doorne, Amsterdam, The Netherlands, on the Closing Date commencing
at 10:00 a.m. local time, or at such other time and place as the parties hereto
may agree in writing. All of the actions and transactions necessary to effect
the Closing, as described in Article VII hereof, shall be deemed to have
occurred, and all agreements, documents and other instruments shall be deemed to
have been executed and delivered, simultaneously at the Closing. No action,
transaction or execution and delivery of any agreement, document or other
instrument or payment or issuance of shares shall be considered to have been
made or effected until all the actions shall have been taken at the Closing, and
the Closing shall have been completed.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE SQL STOCKHOLDERS
Each of the SQL Stockholders, severally and not jointly, hereby
represents and warrants to Datastream as follows:
4.1 Authorization, Etc. Such SQL Stockholder has the power, authority
and capacity to enter into this Agreement and each other Transaction Document to
which it is a party and to carry out the transactions contemplated hereby and
thereby, and, assuming due execution and delivery of this Agreement and such
other agreements by the other parties hereto and thereto, this Agreement and
each other Transaction Document constitutes a valid and binding agreement of
such SQL Stockholder, enforceable against such SQL Stockholder in accordance
with its terms. Such SQL Stockholder has irrevocably waived any preemptive
rights or other rights of first refusal applicable to the Transaction under
Dutch corporate law or SQL's Articles of Association.
4.2 No Consent Required. No consent, approval, order or authorization
of, or registration, declaration or filing with any Governmental Authority on
the part of such SQL Stockholder is required in connection with its execution or
delivery of or performance under this Agreement or any other Transaction
Document or the consummation of the Transaction.
4.3 Litigation Relating to the Agreement. Such SQL Stockholder is not a
party to, or subject to any judgement, decree or order entered in any lawsuit or
proceeding brought by any Governmental Agency or other party seeking to prevent
the execution of this Agreement or any other Transaction Document or the
consummation of the Transaction.
4.4 Other Claims. Such SQL Stockholder does not have and shall not have
any claim or cause of action whatsoever (including, without limitation, any
claim under any employment, management, consulting or service agreement) against
SQL or any of its Subsidiaries arising out of or in any way connected with any
occurrence or state of facts in existence prior to the Effective Time.
4.5 U.S. Status. Such SQL Stockholder is not a "U.S. person" as such
term is defined in Section 902 of Regulation S. Such SQL Stockholder
acknowledges that he, she or it has received and reviewed copies of Datastream's
SEC Documents; provided, however, that such review has been made solely in
connection with such SQL Stockholder's evaluation of the Transaction, and
without verifying, representing or warranting as to the accuracy, or conformity
with the Exchange Act or the rules and regulations promulgated by the SEC
thereunder, of such documents.
4.6 Capitalization.
(a) The authorized, issued and outstanding common and preferred
stock of SQL and each of its Subsidiaries, including without limitation all
options, warrants or convertible securities to purchase any such capital stock,
is as set forth in the Disclosure Letter. Each SQL Stockholder owns all of the
issued and outstanding shares of SQL Capital Stock (including all rights
attached thereto or associated therewith) as set forth opposite such SQL
Stockholder's name in the Disclosure Letter and has legal and valid title to
such shares of SQL Capital Stock, free and clear of all Liens. At the Effective
Time, (i) no dividends or rights to receive dividends shall have accrued to the
holders of the common stock or the preferred stock of SQL that have not been
paid in full by SQL or otherwise extinguished, (ii) no options, warrants, rights
or other forms of securities exercisable for or convertible or exchangeable into
any equity interests of SQL shall be outstanding and (iii) the shares of SQL
Capital Stock transferred by Notarial Deed pursuant to Article II hereof will
represent all of the issued and outstanding equity capital of SQL (excluding any
shares of common stock of SQL held by SQL as treasury shares) at such time.
Except as set forth the Disclosure Letter, none of the securities listed therein
are subject to any Lien. The register of stockholders of SQL and each of its
Subsidiaries contains complete, true and accurate records of SQL and each of
such respective Subsidiaries and sets forth such information regarding the
stockholders of such entities as is necessary under applicable law.
(b) The issued and outstanding shares of capital stock described in
the Disclosure Letter have been duly authorized and validly issued, are fully
paid (i.e., there are no liabilities associated with such shares) and, except
for such rights of first refusal, preemptive, preferential or similar rights set
forth the Disclosure Letter or existing under Dutch law (all of which have been
waived), are not entitled or subject to any preemptive, preferential or similar
rights. Except as set forth in the Disclosure Letter, (i) SQL owns, directly or
indirectly through one or more Subsidiaries, all of the issued and outstanding
capital stock of each such Subsidiary, free and clear of any Lien, and (ii) SQL
has no other Subsidiaries and owns, neither directly nor indirectly through one
or more Subsidiaries, no other capital stock or equity interests, or securities
exercisable or exchangeable for or convertible into capital stock or any other
equity interest, in any other corporation, partnership, joint venture,
association, trust or other business organization.
4.7 Corporate Organization.
(a) SQL has been duly incorporated and is validly existing and duly
registered under the laws of The Netherlands, with full corporate power and
authority to own, lease and operate its properties and to conduct its business
as presently conducted, and is operating in accordance with its Articles of
Association. SQL is duly registered and qualified to do business as a
corporation under the foreign corporation law of each jurisdiction where such
registration or qualification is required, except where the failure to so
register or qualify would not have a Material Adverse Effect on SQL; and no
proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such registration or
qualification.
(b) Each Subsidiary of SQL has been duly incorporated and is validly
existing and duly registered under the laws of its jurisdiction of
incorporation, with full corporate power and authority to own, lease and operate
its properties and to conduct business as presently conducted, and is operating
in accordance with its Articles of Association. Each such Subsidiary of SQL is
duly registered and qualified to do business as a corporation under the foreign
corporation law of each jurisdiction where such registration or qualification is
required, except where the failure to so register or qualify would not have a
Material Adverse Effect on SQL; and no proceeding has been instituted in any
such jurisdiction revoking, limiting or curtailing, or seeking to revoke, limit
or curtail, such registration or qualification.
4.8 Authority. SQL has all requisite corporate power and authority to
enter into this Agreement and each other Transaction Document and to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and each other Transaction Document by SQL and the consummation by SQL of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of SQL. This Agreement and each other
Transaction Document has been duly executed and delivered by SQL and, assuming
due execution and delivery of this Agreement and such other agreements by the
other parties hereto and thereto, this Agreement and each other Transaction
Document constitutes a valid and binding agreement of SQL enforceable in
accordance with its terms.
4.9 Noncontravention. The execution, delivery and performance of this
Agreement and each other Transaction Document to which SQL is a party by SQL,
and the consummation of the transactions contemplated hereby and thereby and
SQL's compliance with the provisions hereof and thereof will not:
(a) conflict with, result in a violation of, result in a breach of
or cause a default under (with or without notice or lapse of time, or both), or
give rise to a right of termination, amendment, cancellation or acceleration of
any obligation contained in, or require the consent or approval of any party to,
or result in the creation of any Lien upon any of the properties or assets of
SQL or any Subsidiary of SQL under any term, condition or provision of, any loan
or credit agreement, note, bond, indenture, lease or other agreement,
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to SQL or any Subsidiary
of SQL or any of its properties or assets, other than any such conflicts,
violations, defaults, losses or Liens which, individually or in the aggregate,
would not have a Material Adverse Effect on SQL;
(b) violate any provision of the Articles of Association of
SQL; or
(c) require the consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority to be
obtained by SQL or any Subsidiary of SQL in connection with the execution and
delivery of this Agreement or any other Transaction Document or the consummation
of the transactions contemplated hereby and thereby.
4.10Litigation. There are no legal, governmental or arbitration
proceedings pending or, to the knowledge of SQL, threatened against SQL or any
Subsidiary of SQL, or to which SQL or any Subsidiary of SQL or any property
owned or leased by SQL or any Subsidiary of SQL is subject, that would
reasonably be expected to have a Material Adverse Effect on SQL.
4.11Bankruptcy or Liquidation Proceedings. There are no bankruptcy or
liquidation proceedings pending against SQL or any Subsidiary of SQL or, to the
knowledge of SQL, threatened against SQL or any Subsidiary of SQL. Neither SQL
nor any of its subsidiaries has incurred any Liability as a managing director of
any company subjected to bankruptcy proceedings or engaged in a suspension of
payments.
4.12Certain Contracts.
(a) Except as set forth in the Disclosure Letter, neither SQL nor
any of its Subsidiaries is a party to any material written or oral:
(i) Joint venture contract, royalty arrangement or agreement which
has involved or is reasonably expected to involve a sharing of profits with any
third party;
(ii) Indenture, mortgage, promissory note, loan agreement, guarantee
or other agreement, arrangement or commitment for the borrowing of money, a line
of credit or a leasing transaction of a type required to be capitalized in
accordance with Dutch accounting standards;
(iii) Indenture, mortgage, promissory note, loan agreement,
guarantee or other agreement, arrangement or commitment for the borrowing of
money or line of credit from or to SQL or any of its Subsidiaries to which any
SQL Stockholder (or any Affiliate of any SQL Stockholder) is a party;
(aa) Except as set forth in the Disclosure Letter, neither SQL nor
any of its Subsidiaries is a party to any written or oral:
(i) Lease or other agreement under which SQL (or any Subsidiary of
SQL) is lessor of, lessee of, or holds or operates any items of tangible
personal property or real property owned by any third party, which individual
item involves payments by SQL (or any Subsidiary of SQL) in an amount in excess
of $50,000 per annum;
(ii) Agreement, license, franchise, permit, indenture or
authorization which individual item involves payment by SQL (or any subsidiary
of SQL) in an amount in excess of $50,000 per annum;
(iii) Agreement, license, franchise, permit, indenture or
authorization, which individual item involves payment to SQL (or any Subsidiary
of SQL) in an amount in excess of $250,000 per annum; or
(iv) Agreement that restricts SQL (or any Subsidiary of SQL) from
engaging in any aspect of its business or competing in any line of business in
any geographic area.
(b) Except as set forth in Disclosure Letter, there are no
distribution contracts (including, without limitation, all OEM and end-user
contracts) to which SQL or any of its Subsidiaries is a party which grant any
exclusive right of any kind to any party.
(c) Except as set forth in the Disclosure Letter, all software
development agreements under which SQL or any Subsidiary of SQL is or was a
recipient of the software development efforts of any third party provide, for
the assignment to SQL or such Subsidiary of title to any technology, development
work or other products developed by any other party for SQL or any Subsidiary of
SQL. Except as set forth in such Disclosure Letter, none of such agreements
permits any other party to retain or own, or grant to any other party, any right
to any technology, development work or other product developed by such party
thereunder or owned by SQL or any Subsidiary of SQL or of which SQL or such
Subsidiary is a recipient.
(d) Except as set forth in the Disclosure Letter, SQL has not
granted any source code licenses or established any source code escrow
arrangements. None of such source code licenses or source code escrow agreements
authorize any party thereto other than SQL or one of its Subsidiaries to resell
or otherwise exploit such source code commercially or to further develop such
source code in order to resell or otherwise exploit it commercially.
(e) Neither SQL nor any of its Subsidiaries nor, to its knowledge,
any other party is in default under any agreement set forth on any section of
the Disclosure Letter pursuant to this Section 4.12, nor under any other
agreement to which SQL or any Subsidiary of SQL is a party, if such default
would reasonably be expected to have a Material Adverse Effect on SQL.
4.13Financial Statements. The Financial Statements present fairly the
consolidated financial position and results of operations of SQL at the
respective dates or for the respective periods covered thereby, and the
Financial Statements have been prepared in accordance with generally accepted
Dutch accounting principles consistently applied throughout the periods
involved. Except as set forth in the Financial Statements, including the notes
thereto, as of the respective dates thereof, or in the Disclosure Letter,
neither SQL nor any of its Subsidiaries has any other Material liability. All
reserves established by SQL in the Financial Statements are adequate for all
known liabilities and reasonably anticipated losses.
4.14Absence of Other Liabilities. Since September 30, 1996, SQL has not
incurred any Liabilities that would reasonably be expected to have a Material
Adverse Effect on SQL. Except as set forth in the Disclosure Letter, neither SQL
nor any of its Subsidiaries is delinquent in the payment of principal or
interest on any outstanding debt or other obligation.
4.15Property. Except as set forth in the Disclosure Letter, neither SQL
nor any of its Subsidiaries owns any material real property. SQL has full legal
title ("onbezwaarde volledige eigendom") to all properties and assets reflected
as owned by it in the Interim Statements, free and clear of any Lien except
those which are described in the Interim Statements, or that are not Material to
SQL and which do not interfere in any Material respect with the use or proposed
use of the property or the conduct of the business of SQL; all the property
(real and personal) held or used by SQL under leases, franchises, licenses or
other agreements is held by it under valid, subsisting, binding and enforceable
leases, franchises, licenses or other agreements, except those that are not
Material to SQL and which do not interfere in any Material respect with the use
of the property or the conduct of the business of SQL.
4.16Permits. SQL and each of its Subsidiaries has obtained and holds,
and is in compliance with, all permits, licenses, franchises, approvals,
consents and authorisations of all Governmental Authorities required under all
laws, rules and regulations in connection with their business (hereinafter
"permit" or "permits") as are necessary to own its properties and assets, and to
conduct its business in the manner currently being conducted, except for such
permits, the absence of which would not, individually or in the aggregate, have
a Material Adverse Effect on SQL; and SQL and each of its Subsidiaries has
fulfilled and performed all of its obligations with respect to each such permit
and no event has occurred which could reasonably be expected to result in, or
after notice or lapse of time would reasonably be expected to result in,
violation, revocation or termination of any such permit or result in any other
impairment of the right of the holder of any permit.
4.17No Illegal Acts. SQL and each of its Subsidiaries is presently in
material compliance with all laws, orders, rules and regulations applicable to,
required of or binding upon it or its business, and neither SQL nor any of its
Subsidiaries has received any notice from any Governmental Authority with
respect to any failure or alleged failure of SQL or any of its Subsidiaries to
comply with any such law, order, rule or regulation, nor, to SQL's knowledge,
are any such notices proposed or threatened. SQL and the SQL Stockholders have
duly observed all merger control regulations (SER fusiegedragsregels) in
connection with the Transaction.
4.18Prior Issuances. All offers and sales of the capital stock of SQL
and each of its Subsidiaries prior to the date hereof and all cash payments or
distributions of the capital stock of SQL as dividends were made in compliance
with the corporate and securities laws of The Netherlands and all other
applicable laws and regulations, and were not made in contravention of any
pre-emptive or other rights of first refusal under Dutch or other applicable law
or such entity's Articles of Association.
4.19Tax Returns.
(a) All applicable tax returns and reports which have been required
to be filed by or on behalf of SQL (or any of its Subsidiaries) with respect to
all periods ended prior to the date of this Agreement have been filed (or are
the subject of valid extensions) with the appropriate Governmental Authorities
and all such tax returns and reports, as filed, are accurate and complete in all
Material respects; all Taxes required to be shown on all such tax returns and
reports or claimed to be due from or with respect to the business of SQL (or any
of its Subsidiaries) have been paid or reflected as a liability on the Financial
Statements for appropriate periods; all deficiencies asserted as a result of any
tax audits have been paid or finally settled and no issue has been raised in any
such audit which reasonably could be expected to result in a proposed deficiency
for any other period not so audited; no set of facts exists or has existed which
would constitute grounds for the assessment of any Tax liability with respect to
any tax periods including periods which have not been audited by appropriate
Governmental Authorities; and there are no outstanding agreements or waivers
extending the statutory period of limitation applicable to any tax return or
report for any period.
(b) All amounts due and payable by SQL or any of its Subsidiaries
through the Effective Time in respect of Taxes will have been paid or adequately
reserved for in the financial accounts of such entity. No Taxes (in particular,
no corporate income taxes) are or will be due resulting from (a breach of) a
fiscal unity or similar tax structure of which SQL or any of its Subsidiaries is
a part, as a result of this Agreement or the Transaction. No disputes exist or
are to be expected with any Governmental Authority concerning the Tax position
of SQL or any of its Subsidiaries. Neither SQL nor any of its Subsidiaries has
made any distributions that are taxable or disposed or acquired any asset in
such a manner that Taxes would be due. If SQL or any of its Subsidiaries has
disposed of its assets for consideration equal to the book value of that asset
as shown in or adopted for the purposes of its accounts, no liability for Taxes
would reasonably be expected to arise by reference to any profit, nor would any
relief or allowance previously claimed be liable to be withdrawn or subject to
drawback.
(c) The Financial Statements reflect certain amounts of net
operating losses ("NOLs"). Under Dutch and German tax laws it is generally
possible to set off future earnings against past (recognized) losses (in The
Netherlands, there is an indefinite period of time for the setoff of losses
sustained after 1986; in Germany, there is an indefinite period of time for the
setoff of losses sustained after 1984). The applicable tax returns and reports
which have been required to be filed by or on behalf of SQL and its Subsidiaries
with respect to the periods in which these NOLs were sustained have been filed
(or are the subject of valid extensions) with the appropriate Governmental
Authorities and all such tax returns and reports, as filed, are accurate and
complete in all Material respects. In this respect, it is noted that the tax
returns for 1994 of SQL have been filed with the appropriate tax authorities,
but have not yet been accepted or adopted by them.
4.20Intellectual Property.
(a) The products listed in the Disclosure Letter and the support and
maintenance services provided for those products pursuant to license or
distribution agreements are the only products (hardware, software, services and
others) under development or manufactured, marketed, licensed, sold or otherwise
distributed or intended for distribution by SQL or any of its Subsidiaries
during the last five years (all such products shall be referred to hereinafter
collectively as the "Products").
(b) Set forth in the Disclosure Letter is a true, correct and
complete list of all Intellectual Property of SQL or any of its Subsidiaries.
There is no other Intellectual Property that is useful or necessary to SQL or
its Subsidiaries in the development, manufacture, license, sale, distribution,
purchase and use of the Products. Such list identifies (A) SQL (or a Subsidiary
of SQL) as either the owner or licensee of each item of Intellectual Property;
(B) in the cases where SQL (or a Subsidiary of SQL) is a licensee, the
licensor(s) and license agreements(s) for such item of Intellectual Property;
(C) as applicable, the Product to which such item of Intellectual Property
relates; and (D) as applicable, the fee, royalty or other amount payable to any
other party with respect to such item of Intellectual Property or Product.
Except as set forth on Schedule 4.20(b), each license granted to SQL (or a
Subsidiary of SQL) is perpetual and irrevocable. To the extent SQL or any of its
Subsidiaries claims to own such Products or Intellectual Property, SQL or such
Subsidiary owns all right, title and interest in and to the Products and the
Intellectual Property related thereto, free and clear of any Lien, including
without limitation any exclusive right, however described, granted to parties
other than SQL (or one of its Subsidiaries) with respect to the Products and
other Intellectual Property. To the extent SQL or one of its Subsidiaries claims
to be licensed to use such Products or Intellectual Property, SQL or such
subsidiary has a valid and enforceable license for the purposes for which it
uses such Products or Intellectual Property.
(c) Neither SQL nor any Subsidiary of SQL (nor any Product
developed, manufactured, licensed, sold or distributed by SQL or any Subsidiary
of SQL) has infringed or made any unlawful use or received notice of any claimed
infringement or unlawful use of, any trademark, trade name, patent, copyright,
maskwork, trade secret or other proprietary right of any third party.
(d) SQL and each of its Subsidiaries has taken all necessary
measures to protect its rights in the Products and the Intellectual Property,
and maintains all copyrights and other intellectual property rights necessary
for marketing, licensing, selling or otherwise distributing the Products in the
jurisdictions in which they have been distributed. Neither SQL nor any of its
Subsidiaries has sent or otherwise communicated to any other person any notice,
charge, claim or assertion of, or has any knowledge of, any present, impending
or threatened infringement by such other person of any right relating to the
Intellectual Property of SQL or any of its Subsidiaries.
(e) SQL and each of its Subsidiaries has entered into agreements
with each of its past and present independent contractor software developers
pursuant to which such contractors have disclaimed any copyright or other
intellectual property rights in the Products and the Intellectual Property, and
have duly assigned to SQL or one of its Subsidiaries, as applicable, all such
copyrights and other intellectual property rights. Neither SQL nor any of its
Subsidiaries has received notice, orally or in writing, that any other Person
claims any interest in any Products or Intellectual Property of SQL or any of
its Subsidiaries, nor , to the best knowledge of SQL, does any such claim (or
any valid basis for any such claim) exist, except the ownership and other rights
claimed by licensors under valid and enforceable licenses.
4.21Product Warranty and Liability.
(a) Each Product has been developed, manufactured, sold, licensed
and/or delivered in conformity with all applicable contractual commitments and
with all express or implied warranties extended by SQL or any of its
Subsidiaries in connection with such Product, except to the extent that the
liability of SQL for non-conformity or for repair and replacement in the
aggregate does not exceed any warranty reserves maintained in the Financial
Statements.
(b) SQL and its Subsidiaries have incurred no liability arising out
of any injury to persons or property (and, to the best knowledge of SQL, there
is no basis for any present or future claim, complaint, action, suit,
proceeding, hearing, investigation, claim or demand against SQL or any of its
Subsidiaries arising out of any such injury) as a result of the use of the
Products.
4.22Pension Matters.
(a) Except as set forth in the Disclosure Letter, neither SQL nor
any of its Subsidiaries is a party to or makes or is required to make
contributions to any pension, profit sharing, retirement, deferred compensation,
bonus, severance, medical or life insurance or other employee (or ex-employee)
welfare or benefit plans, agreements or arrangements maintained for the benefit
of any of its employees or is required to make any payment of "back-service"
contributions now or upon will be so required the termination of the employment,
retirement, death of disability of its employees.
(b) There are no actual, accrued or contingent pension liabilities
or overdue back-service liabilities through the withholdings of SQL or any of
its Subsidiaries or otherwise with respect to employees and ex-employees of SQL
or any of its Subsidiaries other than as reserved for in the Financial
Statements. All premiums paid by SQL or any of its Subsidiaries with respect to
such pension liabilities have been fully paid and are current. Except as set
forth in the Disclosure Letter, since the date of the most recent balance sheet
included in the Financial Statements, neither SQL nor any of its Subsidiaries
has made any pension undertaking with respect to employees who have been
employed after that date.
(c) All due contributions and expenses (including actuarial,
trusteeship, consultancy, legal, audit and administrative expenses) in respect
of any of the pension plans or arrangements maintained by SQL or any of its
Subsidiaries have been paid. All contracts of insurance relating to such plans
or arrangements are enforceable and sufficient to cover the accrued pension
liabilities through to the date hereof, and there is no basis on which the
insurers might reasonably be expected to avoid liability under them. Without
limiting the foregoing, all lump sum and pension benefits payable in the event
of the death of a stockholder of SQL who is also a director or employee of SQL
or any of its Subsidiaries are fully insured, and all benefits that are in
payment and that are paid up and all contingent benefits are fully secured with
a reputable insurance company.
(d) All of the above-described pension plans and arrangements of SQL
and any of its Subsidiaries have at all times been operated in accordance with,
and all of the employers participating in such plans or arrangements have
observed and performed all of their obligations under, the requirements of, any
applicable legislation. No claims have been made or threatened against SQL or
any of its Subsidiaries or the administrators of such pension plans or
arrangements or against any person whom SQL or any Subsidiary of SQL are or may
be liable to indemnify or compensate, in respect of any act, event, omission or
other matter arising out of or in connection with such pension plans or
arrangements or any other retirement/death/disability benefits.
4.23Internal Controls. SQL and each of its Subsidiaries maintains
internal accounting controls sufficient to provide reasonable assurances that
transactions are recorded as necessary to permit preparation of consolidated
financial statements in conformity with generally accepted Dutch accounting
principles. The account balances included in the September 30, 1996 Interim
Statements of SQL in respect of receivables, liabilities and stockholders'
equity were, as of such date, accurate and complete in all material respects.
4.24Labor and Employment Matters.
(a) The Disclosure Letter sets forth the names, date of commencement
of employment or appointment to office and terms and conditions of employment of
all directors, executives and consultants of SQL and each of its Subsidiaries
whom SQL or such Subsidiary compensates in excess of NLG 200,000 a year. Except
as set forth in the Disclosure Letter, no benefits in kind or other perquisites
are payable to or are provided to any such director, executive or consultant.
(b) The Disclosure Letter sets forth the principal terms and
conditions of, including the termination dates and monthly rental amounts for,
all leases pertaining to automobiles provided by SQL or any of its Subsidiaries
as a benefit in kind to any of its directors, executives, consultants or
employees.
(c) All management or other agreements pursuant to which managerial
services are provided to SQL or its Subsidiaries to which SQL or any Subsidiary
of SQL is a party may be terminated by SQL or such Subsidiary upon not more than
two months' notice and without payment of compensation or damages (other than
any payment for unfair and/or wrongful dismissal). No such agreement is subject
to requalification or recharacterization as an employment agreement as to which
SQL or any such Subsidiary acted, or should have acted, as a withholding agent
for tax purposes under the laws of The Netherlands.
(d) Except with respect to the month in which this Agreement is
entered into, there are no outstanding arrears of salary, wages, holiday pay,
social security payments or other remuneration due to or payable for any
director, executive, consultant or employee of SQL or any of its Subsidiaries.
(e) Except as set forth in the Disclosure Letter, neither SQL nor
any of its Subsidiaries is obligated contractually or otherwise to make any
bonus, incentive or other similar payments to any of its directors, executives,
consultants or employees or to increase the rate of remuneration of or improve
any benefits in kind to any such Person.
(f) Except as set forth in the Disclosure Letter, there are no
schemes, agreements or plans in operation by or in relation to SQL or any of its
Subsidiaries under which any of its directors, executives, consultants or
employees is entitled to any shares of SQL Capital Stock (or any other equity
interest in SQL or any of its Subsidiaries ), nor is SQL or any of its
Subsidiaries obligated contractually or otherwise to pay any such Person a
commission or remuneration of any kind calculated by reference in whole or in
part to the turnover, profits or revenues of SQL or any of its Subsidiaries.
(g) Within one year preceding the date hereof, neither SQL nor any
of its Subsidiaries has terminated any person.
(h) None of SQL or any of its Subsidiaries has a collective labor
agreement or other agreement or arrangement (binding or otherwise) with any
trade union, works council or other body representing its employees, nor is
there any dispute pending or threatened with any such body. No works council has
been appointed in respect of SQL or any of its Subsidiaries. Neither SQL nor any
Subsidiaries has experienced any material slowdown, work interruption, work
stoppage or strike by any of their employees, nor (to the knowledge of SQL and
the SQL Stockholders) is any such action presently threatened or contemplated.
(i) No past or present director, executive, employee or consultant
has any claim against SQL or any of its Subsidiaries for loss of office, arising
out of the termination of his office or employment (including any severance or
redundancy payment) and there is no event that would reasonably be expected to
give rise to any such claim. Neither SQL nor any of its Subsidiaries has
incurred any liability for breach of any contract of service or for services,
for redundancy payments, protective awards or for wrongful dismissal or unfair
dismissal or for failure to comply with any order for the reinstatement or
re-engagement of any employee or for any other liability accruing from the
termination of any contract of employment or for services.
(j) No gratuitous payment has been made or promised by SQL or any of
its Subsidiaries in connection with the actual or proposed termination,
suspension or variation of employment or engagement of any present or former
director, executive, consultant or employee.
(k) Neither SQL or any of its Subsidiaries is involved in any
industrial or other dispute with any of its directors, executives, consultants
or employees.
(l) Except as set forth in the Disclosure Letter, neither SQL nor
any of its Subsidiaries has made any loans to or entered into any Material
credit transaction with any of its directors or executives or any Affiliate of
any such director or executive.
(m) No works council has been appointed for SQL or any of its
Subsidiaries, nor is SQL or any of its Subsidiaries in breach of any legislation
in relation to Works Councils.
4.25Environmental Matters. SQL and each of its Subsidiaries has
conducted its business in compliance with, and is presently in compliance with,
all applicable Environmental Laws and has all necessary Environmental Permits.
There are no claims or proceedings arising under Environmental Laws pending or
threatened with respect to the ownership, use, condition or operation of the
business of SQL or any of its Subsidiaries or any asset used in such business or
any violation or alleged violation of any applicable Environmental Laws.
4.26Fees and Expenses. Except for a fee to be paid by the SQL
Stockholders upon consummation of the Transaction to Alex. Brown & Sons, Inc.,
SQL has not paid, nor is it obligated to pay any fee or commission to any
broker, finder or financial intermediary in connection with the transactions
contemplated by this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF DATASTREAM
Datastream hereby represents and warrants to the SQL Stockholders as
follows:
5.1 Organization; Good Standing; Qualification and Power. Datastream is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. Datastream and each of its Subsidiaries is duly
registered and qualified to do business as a foreign corporation under the
corporation law of each jurisdiction where such registration and qualification
is required, except where the failure to so register or qualify would not have a
Material Adverse Effect on Datastream, and no proceeding has been instituted in
any such jurisdiction revoking, limiting or curtailing, or seeking to revoke,
limit or curtail, such power and authority or qualification.
5.2 Authority. Datastream has all requisite corporate power and
authority to enter into this Agreement and each other Transaction Document to
which it is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby (including, without
limitation, the issuance of the Datastream Common Stock and the filing of the
notification and supporting documentation to Nasdaq/NMS described in Section
6.4), and the execution and delivery of this Agreement and each other
Transaction Document to which it is a party by Datastream and the consummation
by Datastream of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of Datastream. This
Agreement and each other Transaction Document to which Datastream is a party has
been duly executed and delivered by Datastream and, assuming due execution and
delivery of this Agreement and such other agreements by the other parties hereto
and thereto, this Agreement and each other Transaction Document to which
Datastream is a party constitutes the valid and binding agreement of Datastream
enforceable in accordance with its terms.
5.3 Noncontravention. The execution, delivery and performance of this
Agreement and each other Transaction Document to which Datastream is a party,
the consummation of the transactions contemplated hereby and thereby, and
compliance with the provisions hereof and thereof, will not:
(a) conflict with, result in a violation of, result in a breach of
or cause a default under (with or without notice or lapse of time, or both), or
give rise to a right of termination, amendment, cancellation or acceleration of
any obligation contained in, or require the consent or approval of any party to,
or result in the creation of any Lien upon any of the properties or assets of
Datastream or any of its Subsidiaries under any term, condition or provision of,
any loan or credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise, license, judgement, order,
decree, statute, law, ordinance, rule or regulation applicable to Datastream or
any of its Subsidiaries or their respective properties or assets, other than any
such conflicts, violations, defaults, losses, and Liens which, individually or
in the aggregate, would not have a Material Adverse Effect on Datastream.
(b) violate any provision of the Certificate of
Incorporation or Bylaws of Datastream; or
(c) require the consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority to be
obtained by Datastream in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby except for
the filing with the SEC of such reports and information under the Exchange Act
and the rules and regulations promulgated by the SEC thereunder as may be
required in connection with this Agreement and the transactions contemplated
hereby.
5.4 SEC Documents. Each of the SEC Documents filed to date, when it was
filed with the SEC, conformed in all material respects to the requirements of
the Exchange Act and the rules and regulations of the Commission thereunder,
and, as of their filing date, none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
5.5 Capitalization. Datastream's authorized, issued and outstanding
capital stock is, as of the respective dates thereof, as set forth in the SEC
Documents. All of the issued shares of capital stock of the Company have been
duly authorized and validly issued, are fully paid and nonassessable and are not
entitled or subject to any preemptive, preferential or similar rights.
5.6 No Calamities. Since the date of the most recent balance sheet
included in the financial statements included in the SEC Documents, neither
Datastream nor any of its Subsidiaries has sustained any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court
governmental action, order or decree.
5.7 No Changes. Since the respective date of the most recent balance
sheet included in the unaudited financial statements included in the SEC
Documents, (i) neither Datastream nor any of its Subsidiaries has incurred any
liabilities or obligations, direct or contingent, or entered into any
transactions, not in the ordinary course of business, that are material to
Datastream and its Subsidiaries taken as a whole, (ii) Datastream has not
purchased any of its outstanding capital stock or declared, paid or otherwise
made any dividend or distribution of any kind on its capital stock, (iii) there
has not been any material change in the capital stock, long-term debt or
short-term debt (other than changes effected in the ordinary course of business
consistent with Datastream's past practice and in a manner permitted by the
DGCL) of Datastream or any of its Subsidiaries, and (iv) Datastream has not
suffered any Material Adverse Effect.
5.8 Stock Issuance. The shares of Datastream Common Stock to be issued
as Stock Consideration have been duly authorized, and when issued and delivered
against delivery of the certificates representing shares of SQL Capital Stock as
provided herein, will be validly issued, fully paid and nonassessable; the
certificates evidencing the shares of Datastream Common Stock to be issued as
Stock Consideration will comply with all applicable requirements of the DGCL and
the delivery of such certificates will pass valid title to such shares, free and
clear of any Lien. Assuming the accuracy and completeness of the representations
of the SQL Stockholders set forth in Section 4.5 hereof, the offer and sale of
the shares of Datastream Common Stock to be issued as Stock Consideration will
be issued in compliance with Regulation S.
5.9 Financial Statements. The consolidated financial statements
(including the related notes) of Datastream and its consolidated subsidiaries
included in the SEC Documents were prepared in accordance with generally
accepted U.S. accounting principles consistently applied throughout the periods
involved and fairly present the financial position, results of operations and
cash flows of Datastream and its Subsidiaries, on a consolidated basis, at the
dates and for the periods presented.
5.10Internal Controls. Datastream and each of its Subsidiaries maintains
internal accounting controls which provide reasonable assurance that
transactions are recorded as necessary to permit preparation of Datastream's
consolidated financial statements in accordance with generally accepted U.S.
accounting principles.
ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS
6.1 Conduct of Business by SQL Pending the Transaction. Except as
otherwise contemplated hereby, after the date hereof and prior to the Effective
Time or earlier termination of this Agreement, unless Datastream shall otherwise
agree in writing or as otherwise expressly contemplated by this Agreement (it
being agreed, however, that SQL shall be solely responsible for its operations),
SQL and each of its Subsidiaries shall:
(a) conduct its businesses in the ordinary and usual course
of business and consistent with past practice;
(b) not (i) amend or propose to amend its Articles of Association;
(ii) split, combine or reclassify its outstanding capital stock; or (iii) or
declare, set aside or pay any dividend or distribution payable in cash, stock,
property or otherwise;
(c) not (i) authorize the issuance of, or issue, sell, grant, pledge
or dispose of, or agree to issue, sell, grant, pledge or dispose of, any
additional shares of, or any options, warrants or rights of any kind to acquire
any shares of, its capital stock of any class or any debt or equity securities
convertible into or exchangeable for such capital stock (except for the issuance
of shares of SQL Capital Stock (x) upon the exercise of options, warrants,
rights or other securities exercisable for or convertible into such shares and
(y) upon consummation of the transaction referred to in Section 7.3(g)); adopt
any stock option plans or agreements with respect thereto; sell (including,
without limitation, by sale-leaseback), pledge, dispose of or encumber any
material assets or interests therein, other than in the ordinary course of
business and consistent with past practice; (ii) redeem, purchase, acquire or
offer to purchase or acquire any shares of its capital stock; or (iii) enter
into any contract, agreement, commitment or arrangement with respect to any of
the foregoing;
(d) use its best efforts to preserve intact its business
organizations and goodwill, keep available the services of its present executive
officers and key employees, and preserve the goodwill and business relationships
with suppliers, distributors, customers and others having business relationships
with it;
(e) confer on a regular and frequent basis with one or more
representatives of Datastream to discuss material operational matters and the
general status of ongoing operations;
(f) promptly notify Datastream of any material changes in the
business, properties, assets, condition (financial or other), results of
operations or prospects of SQL or any of its Subsidiaries;
(g) not acquire, or publicly propose to acquire, all or any
substantial part of the business and properties or capital stock of any Person
not a party to this Agreement, whether by merger, purchase of assets, tender
offer or otherwise;
(h) not initiate, solicit or materially encourage (nor shall any SQL
Stockholder or any Affiliate of SQL or any SQL Stockholder initiate, solicit or
encourage), and will direct and use its best efforts to cause any SQL
Stockholder, officer, director, employee, investment banker, attorney,
accountant or other agent employed or retained by SQL not to initiate, solicit
or encourage, any proposal or offer to acquire all or any substantial part of
the business and properties or capital stock of SQL, whether by merger, purchase
of assets, tender offer or otherwise;
(i) not enter into or materially amend any employment, severance,
bonus, special pay arrangement with respect to termination of employment or
other similar arrangements or agreements with any directors, executives or key
employees;
(j) other than in the ordinary course of business and consistent
with past practice, not adopt, enter into or amend any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation, health
care, employment or other employee benefit plan, agreement, trust, fund or
arrangement for the benefit or welfare of any employee or retiree, except as
required to comply with changes in applicable law occurring after the date
hereof;
(k) other than in the ordinary course of business and consistent
with past practice, not to make any payments to any Affiliate or waive, release
or discharge any Affiliate from any indebtedness owed to SQL or any Subsidiary
of SQL, including without limitation, the forgiveness of any account receivable
from any such Affiliate;
(l) other than in the ordinary course of business and consistent
with past practice, not incur any indebtedness for borrowed money or guarantee
any such indebtedness or issue or sell any debt securities or make any loans or
advances; and
(m) not agree in writing or otherwise to take any of the foregoing
actions or any other action which would make any representation or warranty
contained in Article IV untrue or incorrect in any material respect as of the
Closing Date.
Notwithstanding the foregoing covenants set forth in subsections (a) and
(d) above, Datastream recognizes and acknowledges that the announcement of the
Transaction may cause certain of SQL and its Subsidiaries' customers, executive
officers, key employees, suppliers, distributors and others having business
relationships with SQL or any of its Subsidiaries to alter or seek to alter such
relationships with SQL and its Subsidiaries. Datastream agrees that SQL shall
not be required to obtain the prior written consent of Datastream to changes or
proposed changes in such relationships initiated by parties other than SQL or
its Subsidiaries primarily as a result of the announcement of the Transaction,
although Datastream shall be entitled to receive prompt notice thereof.
6.2 Access to Information.
(a) SQL and its Subsidiaries shall afford to Datastream and its
accountants, counsel, lenders and other representatives reasonable access during
normal business hours and upon reasonable notice throughout the period prior to
the Effective Time to all of its properties, books, contracts, commitments and
records (including, but not limited to, tax returns) and, during such period,
shall furnish promptly to Datastream all other information and documents
concerning their respective businesses, properties and personnel as Datastream
may reasonably request; provided that no investigation pursuant to this Section
6.2 or otherwise shall affect any representations or warranties made herein or
the conditions to the obligations of the respective parties to consummate the
Transaction. These access rights shall include a right on the part of Datastream
to cause to be made, at its expense, such environmental audit or audits as it
deems necessary to properly evaluate any Liability SQL may have under applicable
Environmental Laws.
(b) Datastream shall afford to the SQL Stockholders and their
accountants, counsel and other representatives reasonable access during normal
business hours and upon reasonable notice throughout the period prior to the
Effective Time to all of its respective properties, books, contracts,
commitments and records (including, but not limited to, tax returns) and, during
such period, shall furnish promptly to SQL (i) a copy of each report, schedule,
notice and other document filed or received by it pursuant to the requirements
of federal or state securities laws or filed with or received by it from the
SEC, or the Nasdaq/NMS and (ii) all other information and documents concerning
its business, properties and personnel as SQL may reasonably request; provided
that no investigation pursuant to this Section 6.2(b) or otherwise shall affect
any representations or warranties made herein or the conditions to the
obligations of the respective parties to consummate the Transaction.
6.3 Filings with the SEC. As soon as practicable after the date hereof,
Datastream shall promptly prepare and file and assist SQL and its respective
officers and directors with the preparation and filing of filings required under
the Exchange Act, the Securities Act or any other federal or state securities
laws relating to the Transaction, including without limitation, Form 8-K, Forms
3, 4 and 5 under Section 16 of the Exchange Act and, if applicable, Schedule
13D.
6.4 Nasdaq/NMS Listing. Datastream shall (i) notify Nasdaq/NMS, at or
prior to the Effective Time, of the issuance of Datastream Common Stock to the
SQL Stockholders in connection with the Transaction and request the listing of
additional shares of Datastream Common Stock on Nasdaq/NMS, and (ii) furnish
Nasdaq/NMS with all required and requested documentation in connection with the
notice described in (i) above, including but not limited to, (x) copies of board
and stockholder resolutions, as applicable, approving the issuance of the
Datastream Common Stock and the listing of additional shares on Nasdaq/NMS and
(y) the required additional listing filing fee.
6.5 Expenses. Whether or not the Transaction is consummated, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses. If not
paid prior to the Closing Date, the SQL Stockholders shall reimburse Datastream
at Closing or as soon as practicable thereafter for all SQL expenses.
6.6 Agreement to Cooperate. Subject to the terms and conditions herein
provided, each of the parties hereto shall use all best efforts to take, or
cause to be taken, all action to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including using its
best efforts to obtain all necessary or appropriate governmental and third-party
waivers, consents and approvals, to effect all necessary registrations and
filings to proceed with the Transaction as expeditiously as possible. Each party
hereto agrees to allow the other to review each regulatory filing made by such
party prior to the filing thereof during the term of this Agreement.
6.7 Public Statements. The parties shall consult with each other prior
to issuing any public announcement or statement with respect to this Agreement
or the transactions contemplated hereby and shall not issue any such public
announcement or statement prior to such consultation, except as may be required
by law; provided, however, that Datastream shall not undertake or cause to be
undertaken any "Directed Selling Efforts" as defined in Section 902(b) of
Regulation S.
6.8 Release. Each of the SQL Stockholders does hereby release and
forever discharge SQL, its Subsidiaries, its respective officers and directors
and each of the other SQL Stockholders from any and all claims, demands,
actions, causes of actions, losses and expenses (including attorneys' fees and
expenses) of any kind whatsoever, whether arising out of a contract or
otherwise, that such SQL Stockholder has had, now has or may hereafter have
against SQL, any Subsidiary of SQL and any successor to SQL and such Subsidiary
or to their respective businesses, any of the officers and directors of SQL or
any of its Subsidiaries (in his capacity as such) or any other SQL Stockholder
(in his capacity as such); provided, that such release shall not relate, or be
deemed to relate, to the obligations of SQL or any Subsidiary of SQL under any
written agreement of employment or consulting or managerial services with any
such SQL Stockholder or under any written financing agreement with any such SQL
Stockholder, provided, further, that such agreements are identified in the
Disclosure Letter.
6.9 Amounts Payable By SQL Stockholders. Promptly upon request from
Datastream, and in any event within 20 business days following the Closing Date,
each SQL Stockholder who shall owe any indebtedness to SQL (or any Affiliate of
SQL) or whose Affiliate shall owe any indebtedness to SQL (or any Affiliate of
SQL) shall repay any such amounts to SQL in full.
6.10Nine-Month Review. As soon as practicable after the date hereof,
Datastream's independent accountants, KPMG Peat Marwick ("KPMG"), shall review
the Interim Statements of SQL based on practices and procedures consistent with
those used by Deloitte & Touche in its most recent audit of the consolidated
financial statements of SQL. Any proposed adjustments to the Interim Statements
recommended by KPMG shall be reviewed by Deloitte & Touche, and agreed upon by
KPMG and Deloitte & Touche. This review shall include a "valuation review" to
assist Datastream in properly allocating the Total Consideration between
tangible and intangible assets.
6.11Resale Restrictions. Each SQL Stockholder agrees not to resell
or cause the resale of the Datastream Common Stock received by such SQL
Stockholder as Stock Consideration in the United States or to a "U.S.
person" (as such term is defined in Regulation S) for a period of 40 days
after the Closing.
6.12Closing Matters. Datastream shall engage and instruct its counsel to
prepare an opinion substantially in the form described in Section 7.2(b) hereof
and SQL and the SQL Stockholders shall engage and instruct its counsel to
prepare an opinion substantially in the form described in Section 7.3(b) hereof.
6.13Removal of Regulation S Legend. Upon the expiration of the 40-day
"restricted period" (as such term is defined in Regulation S) and upon the
request of any SQL Stockholder, Datastream shall cause the Regulation S Legend
to be removed from the certificates representing the shares of Datastream Common
Stock to be issued as Stock Consideration, or issue replacement certificates,
provided, however, that such Regulation S Legend shall be replaced as follows:
"The securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and may not be
offered or sold absent registration or an applicable exemption from the
registration requirements of the Securities Act."
6.14Stockholders' Equity. The SQL Stockholders shall maintain the
stockholders' equity of SQL and its Subsidiaries on a consolidated basis such
that such stockholders' equity is, as of the Closing Date, not less than such
amount reflected in the Interim Statements as of September 30, 1996; provided
that (i) the stockholders' equity shall be calculated on a basis that is
consistent with the preparation of the Interim Statements and in accordance with
generally accepted Dutch accounting standards, (ii) the calculation shall not
take into account restructuring costs, and (iii) the calculation shall be
subject to the mutual approval of KPMG and Deloitte & Touche.
ARTICLE VII
CLOSING CONDITIONS
7.1 Conditions to Each Party's Obligations to Consummate the
Transaction. The respective obligations of each party to consummate the
Transaction shall be subject to the fulfilment at or prior to the Effective Time
of the following conditions precedent:
(a) The shares of Datastream Common Stock issuable in the
Transaction shall be listed on the Nasdaq/NMS upon their issuance provided that
Datastream shall have complied with Section 6.4 hereof in connection therewith;
(b) No preliminary or permanent injunction or other order or decree
by any court of competent jurisdiction that prevents the consummation of the
Transaction (other than any preliminary or permanent injunction, order or decree
issued at the request of a party hereto, which injunction, order or decree shall
not then be utilized as a condition to such party's obligation to consummate the
Transaction) shall have been issued and remain in effect (each party agreeing to
use all best efforts to have any such injunction, order or decree lifted).
7.2 Conditions to Obligation of SQL and the SQL Stockholders to
Consummate the Transaction. The obligation of SQL and the SQL Stockholders to
consummate the Transaction shall be subject to the fulfilment at or prior to the
Effective Time of the following additional conditions precedent:
(a) Datastream shall have performed in all material respects its
obligations contained in this Agreement required to be performed at or prior to
the Effective Time;
(b) SQL and the SQL Stockholders shall have received an opinion from
counsel to Datastream, reasonably satisfactory to SQL, dated as of the Closing
Date, in form and scope customary for transactions of this type. Such opinion
shall address, the authority of Datastream to enter into each of the Transaction
Documents to which it is a party and consummate the Transaction, the
enforceability of each of the Transaction Documents to which it is a party
against Datastream, the non-contravention of Datastream's execution, delivery
and performance of each of the Transaction Documents to which it is a party in
terms of its Certificate of Incorporation, Bylaws and other specifically
identified agreements, the absence of any requirement that governmental or third
party consents not yet obtained be obtained prior to consummation of the
Transaction and that the shares of Datastream Common Stock being issued in
connection with the Transaction are not required to be registered under the
Securities Act and are being offered pursuant to an exemption from registration
under Regulation S;
(c) Since the date hereof, in the course of their continuing due
diligence investigation pursuant to Section 6.2(b), the SQL Stockholders shall
not have discovered any material inaccuracy or incompleteness in the
representations and warranties made by Datastream in Article V hereof, which
material inaccuracy or incompleteness is caused by gross misrepresentation or
fraud on the part of Datastream or reflects illegal business activity on the
part of Datastream or any of its Subsidiaries; and
(d) Datastream and each of the SQL Stockholders shall have entered
into a Registration Rights Agreement substantially in the form of Exhibit C
hereto.
7.3 Conditions to Obligation of Datastream to Consummate the
Transaction. The obligation of Datastream to consummate the Transaction shall be
subject to the fulfilment at or prior to the Effective Time of the following
additional conditions precedent:
(a) SQL shall have performed in all material respects its
obligations contained in this Agreement required to be performed at or prior to
the Effective Time;
(b) Datastream shall have received an opinion from counsel to SQL
and the SQL Stockholders, reasonably satisfactory to Datastream, dated as of the
Closing Date, in form and scope customary for transactions of this type. Such
opinion shall address the authority of SQL and the SQL Stockholders to enter
into each of the Transaction Documents to which it is a party and consummate the
Transaction, the enforceability of each of the Transaction Documents to which it
is a party against SQL and the SQL Stockholders, the binding nature of the
Transaction Documents as against the spouse of any SQL Stockholder who is a
natural person, the non-contravention of such parties' execution, delivery and
performance of each of the Transaction Documents to which it is a party in terms
of the Articles of Association and other specifically identified agreements
(so-called "finance" agreements only) of SQL or any SQL Stockholder, the absence
of any requirement that any governmental or third party consents not yet
obtained be obtained prior to consummation of the Transaction, the valid
transfer of the shares of SQL Capital Stock at the Effective Time free and clear
of any Liens and the absence of any other outstanding equity interests in SQL or
warrants, rights or options to purchase the same other than those shares of SQL
Capital Stock transferred at the Effective Time;
(c) Each of Peter A.G. Huisman and Vincent Mom shall have
executed and delivered Service Agreements to Datastream;
(d) Paul de Gruyter shall have executed and delivered the
Severance and Non-Compete Agreement to Datastream;
(e) Each of the SQL Stockholders shall have executed and delivered
the Escrow Agreement and deposited the Escrow Shares in the escrow fund created
thereby;
(f) Since the date hereof, in the course of its continuing due
diligence investigation pursuant to Section 6.2(a) hereof, Datastream shall not
have discovered any material inaccuracy or incompleteness in the representations
and warranties made by the SQL Stockholders in Article IV hereof, which material
inaccuracy or incompleteness is caused by gross misrepresentation or fraud on
the part of the SQL Stockholders or reflects illegal business activity on the
part of SQL or any of its Subsidiaries;
(g) After September 30, 1996, SQL shall have taken into
equity an amount equal to U.S. $1.447 million of additional capital;
(h) No options, warrants or other securities exercisable for or
convertible or exchangeable into capital stock or other equity interests of SQL
of any kind or nature whatsoever shall be outstanding; the shares of SQL Capital
Stock transferred to Datastream shall constitute all of the outstanding equity
interests (including without limitation any option, warrant, right to acquire or
right of conversion with respect to any such equity interests) in SQL; and all
shares of preferred stock of SQL shall have been converted into shares of common
stock of SQL; and
(i) SQL and each of its Subsidiaries shall have made all payments of
principal and interest on any outstanding debt or other obligation that is due
or to be paid on or before December 31, 1996 or such payments shall have been
extended.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement may be terminated and the Transaction
contemplated hereby may be abandoned (and the purchase and sale of the shares of
SQL Capital Stock effected by virtue of Section 2.2(a) hereof annulled without
being given any effect whatsoever) at any time prior to the Effective Time,
whether before or after approval by the stockholders of any of the parties
hereto, if any such approval is required:
(a) by mutual consent of Datastream and SQL;
(b) by either Datastream or SQL if (i) the Transaction shall not
have been consummated on or before January 31, 1997 (the "Termination Date") (it
being acknowledged that each party is obligated to cooperate in accordance with
Section 6.6 hereof) or (ii) any court of competent jurisdiction in The
Netherlands, the United States or any State shall have issued an order,
judgement or decree (other than a temporary restraining order) restraining,
enjoining or otherwise prohibiting the Transaction, provided that the right to
terminate this Agreement under this Section 8.1(b) shall not be available to any
party whose failure to fulfil any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Effective Time to occur on or
before such date;
(c) by Datastream if there has been a failure of any of the
conditions set forth in Section 7.3 hereof (or any of such conditions has been
rendered impossible to perform prior to the Closing Date); or
(d) by the SQL Stockholders if there has been a failure of any of
the conditions set forth in Section 7.2 hereof (or any of such conditions has
been rendered impossible to perform prior to the Closing Date).
8.2 Effect of Termination. In the event of termination of this Agreement
by either Datastream or SQL, as provided in Section 8.1, this Agreement shall
forthwith become void and, without limiting the generality of the foregoing, the
sale and purchase contemplated by Section 2.2(a) hereof shall be annulled
without being given any effect whatsoever. Nothing in this Section 8.2 shall
relieve any party from liability for any breach of this Agreement occurring
prior to such termination or giving rise to such termination.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES AND INDEMNIFICATION
9.1 Survival of Representations and Warranties.
(a) All representations, warranties, agreements, covenants and
obligations made or undertaken by SQL or any of the SQL Stockholders in this
Agreement shall survive the Closing hereunder and shall not merge in the
performance of any obligation by any party hereto. Each of SQL and the SQL
Stockholders acknowledge and agree that prior to the Effective Time, Datastream
intends to perform such investigation of SQL as it may deem necessary or
appropriate; however, no investigation by Datastream either before or after the
Effective Time will diminish or obviate any of the representations, warranties,
covenants or agreements made or to be performed by SQL or the SQL Stockholders
pursuant to this Agreement, and all other agreements referred to herein, or
Datastream's right to rely upon such representations, warranties, covenants and
agreements.
(b) All representations, warranties, agreements, covenants and
obligations made or undertaken by Datastream in this Agreement shall survive the
Closing hereunder and shall not merge in the performance of any obligation by
any party hereto. Datastream acknowledges and agrees that prior to the Effective
Time, the SQL Stockholders intend to perform such investigation of Datastream as
they each deem necessary or appropriate; however, no investigation by the SQL
Stockholders either before or after the Effective Time will diminish or obviate
any of the representations, warranties, covenants or agreements made or to be
performed by Datastream pursuant to this Agreement and all other agreements
referred to herein, or the SQL Stockholders' right to rely upon such
representations, warranties, covenants and agreements.
9.2 Obligation of SQL Stockholders to Indemnify. Subject to the
limitations of Section 9.5, each of the SQL Stockholders (exclusive of Marconi
Stichting), severally and proportionately in the proportions set forth on
Schedule 2.2, agrees to indemnify and hold Datastream harmless from and against
all Liabilities asserted against, imposed upon or incurred by Datastream by
reason of or resulting from (a) a breach of any representation or warranty of
any SQL Stockholder contained in Article IV hereof, or (b) a breach of any
covenant or agreement of SQL or any SQL Stockholder contained in or made
pursuant to this Agreement (and not, in either such case, the subject of a
specifically disclosed exception set forth in the Disclosure Letter).
9.3 Obligations of Datastream to Indemnify. Subject to the limitations
of Section 9.5, Datastream agrees to indemnify and hold the SQL Stockholders
harmless from and against all Liabilities asserted against, imposed upon or
incurred by the SQL Stockholders by reason of or resulting from (a) a breach of
any representation or warranty of Datastream contained in or made pursuant to
this Agreement, or (b) a breach of any covenant or agreement of Datastream
contained in or made pursuant to this Agreement.
9.4 Conditions of Indemnification with Respect to Third Party Claims.
Each party indemnified (the "Indemnified Party") under the provisions of Section
9.2 or 9.3 hereof, upon receipt of written notice of any claim or the service of
a summons, or other initial legal process upon it in any action instituted
against it, in respect of which indemnity may be sought on account of any
indemnity agreement contained in Section 9.2 or 9.3 hereof, shall promptly give
notice of such claim or the commencement of such action, or threat thereof, to
each other party ("Indemnifying Party") from whom indemnity shall be sought
hereunder. Each Indemnifying Party shall be entitled at its own expense to
participate in the defense of such claim or action, or, if it shall so elect, to
assume (in conjunction with any other indemnifying party) the defense of such
claim or action, in which case the defense shall be conducted by counsel
reasonably acceptable to the Indemnified Party, and such Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it; but if the
Indemnifying Party shall elect not to assume the defense of such claim or
action, the Indemnifying Party shall reimburse each Indemnified Party for the
reasonable fees and expenses of any counsel retained by it. Notwithstanding the
above, should any Indemnified Party reasonably conclude that there may be
defenses available to it that are different from or additional to those
available to the Indemnifying Party, the Indemnifying Party shall have the right
to direct the defense of such action on behalf of the Indemnified Party, but
only after consultation with the Indemnified Party. The Indemnifying Party shall
also have the right to settle or compromise any such claim but only if it shall
first obtain the written consent of the Indemnified Party, which consent shall
not be unreasonably withheld. The terms "Indemnified Party" and "Indemnifying
Party," as used herein shall, in appropriate circumstances, be deemed to mean
Datastream, on the one hand, and the SQL Stockholders (collectively and as
represented by the SQL Stockholders' Representative), on the other hand.
9.5 Limitations on Liability.
(a) The Indemnifying Parties shall not be required to indemnify the
Indemnified Party unless the amount of any Claim, when aggregated with all other
Claims of such Indemnified Party, shall exceed $250,000 (the "Minimum Aggregate
Liability Amount"), at which time Claims may only be asserted for amounts in
excess of $125,000; provided, however, that the foregoing Minimum Aggregate
Liability Amount shall not apply to any Liability which results from or arises
out of fraud or any intentional misrepresentation or an intentional breach of a
representation or warranty made pursuant to this Agreement.
(b) Except for Claims for which proper notice of indemnification
shall have been submitted in good faith and in reasonable detail not later than
the close of business on the dates set forth in items (i) and (ii) below, (i)
except as otherwise set forth in item (ii) below, all rights of indemnification
pertaining to any sections of this Agreement shall terminate and expire on July
1, 1998 and (ii) all rights of indemnification pertaining to Sections 4.19 and
4.22 (insofar, but only insofar, as any submission of such Claim in connection
with Section 4.22 relates to a related alleged liability of SQL or any of the
Subsidiaries causing a ground for indemnification, which liability was not
discovered before July 1, 1998 and could surface under an applicable statutory
period of limitation allowing for the pertinent Governmental Authority to assert
such liability during such applicable statutory period of limitation) hereof
shall terminate and expire five Business Days after such time as the relevant
statutes of limitation pertaining to such matters (including without limitation,
any period for which such statutes of limitation have been tolled, and any
period of extension of the relevant tax statutes) expire.
9.6 Reduction for Certain Benefits. Any insurance or other recovery,
payment or credit received by the Indemnified Party from any third party which
was not taken into account in computing the amount of any Claim shall promptly
be paid over to the Indemnifying Party up to the amount of the indemnification
payment made by the Indemnifying Party with respect thereto, such that the total
amount received by the Indemnified Party from the Indemnifying Party and the
third parties in connection with such Claim shall not exceed the amount of such
Claim.
9.7 Cap; No Release for Fraud, Ownership Representations. Except as
otherwise set forth in the following sentence, the aggregate liability of any
SQL Stockholder hereunder shall be limited to the proportionate share of such
SQL Stockholder as shown on Schedule 2.2 of the Total Consideration; provided,
that for purposes of determining whether any such Person has indemnified
Datastream to the full extent of such Person's proportionate share of the Total
Consideration, if, in satisfaction of an indemnification obligation to
Datastream hereunder, such Person decides to satisfy such indemnification
obligation by transferring shares of Datastream Common Stock at a time when the
Stock Price (as adjusted for stock splits, combinations and other like events)
is less than $22.625 per share, then each such share shall be attributed a value
of $22.625 per share notwithstanding such Stock Price. Nothing contained in this
Agreement (either in terms of proportionate liability or the termination of any
indemnification period) shall relieve any SQL Stockholder of any liability or
limit any liability that he, she or it may have on account of any breach of any
representation or warranty contained in Section 4.6 above, nor shall anything
contained in this Agreement relieve any SQL Stockholder or any other party to
this Agreement of any liability or limit any liability that he, she or it may
have in the case of fraud in connection with the transaction contemplated by
this Agreement or in connection with the delivery of any certificate required to
be delivered under the terms hereof.
9.8 Subrogation Rights. In the event that an Indemnifying Party shall be
obligated to indemnify an Indemnified Party pursuant to this Article IX, the
Indemnifying Party shall, upon payment of such indemnity in full, be subrogated
to all rights of the Indemnified Party with respect to the Claim to which such
indemnification relates; provided, however, that the Indemnifying Party shall
only be subrogated to the extent of any amount paid by it pursuant to this
Article IX in connection with such Claim and provided further that no SQL
Stockholder shall have any subrogation rights against SQL.
9.9 Establishment of Escrow; Indemnification Not Limited.
(a) At the Effective Time, pursuant to Section 2.2 (iii) hereof,
Datastream shall deliver the Escrow Shares to the Escrow Agent, which Escrow
Shares shall be held in escrow pursuant to the terms of this Agreement and the
Escrow Agreement.
(b) The parties to this Agreement understand and agree that the
establishment of the escrow referred to in paragraph (a) above is not the
exclusive source for indemnification pursuant to this Agreement and that such
escrow in no way limits the amount of Claims that may be made pursuant to this
Agreement.
9.10Interest. If any payment required to be made by an Indemnifying
Party hereunder is not made by the due date for payment thereof, then that
payment shall carry interest (calculated on a daily basis) from the due date of
payment until actual payment (as well after judgement as before) at the
Amsterdam Inter Bank Offered Rate plus 2%.
ARTICLE X
STOCKHOLDERS' REPRESENTATIVE
10.1Appointment; Acceptance. By executing this Agreement, each of the
SQL Stockholders hereby irrevocably constitutes and appoints Residentie
Participaties III CV and its successors, acting as hereinafter provided, as his
attorney-in-fact and agent in his name, place and stead in connection with the
transactions and agreements contemplated by this Agreement (the "SQL
Stockholders' Representative"), and acknowledges that such appointment is
coupled with an interest. By executing and delivering this Agreement, Holland
Venture Holdings II CV hereby (i) accepts its appointment and authorization to
act as the SQL Stockholders' Representative, as attorney-in-fact and agent on
behalf of the SQL Stockholders in accordance with the terms of this Agreement,
and (ii) agrees to perform its obligations under, and otherwise comply with,
this Article XI.
10.2Authority.
(a) Each of the SQL Stockholders authorizes the SQL
Stockholders' Representative:
(i) to dispute or to refrain from disputing any claim made by
Datastream under this Agreement and the other agreements, instruments and
documents to be delivered by or on behalf of the SQL Stockholders pursuant to
this Agreement;
(ii) to negotiate and compromise any dispute which may arise under,
and to exercise or refrain from exercising remedies available under this
Agreement and the other agreements, instruments and documents to be delivered by
or on behalf of the SQL Stockholders pursuant to this Agreement and to sign any
releases or other documents with respect to such dispute or remedy;
(iii) to determine the location of the arbitration of any claim by
the SQL Stockholders in accordance with Section 11.9 hereof and to otherwise
take action on behalf of the SQL Stockholders pursuant to Section 11.9;
(iv) to give such instructions and to do such other things and
refrain from doing such other things as the SQL Stockholders' Representative
shall deem necessary or appropriate to carry out the provisions of this
Agreement and the other agreements, instruments and documents to be delivered by
or on behalf of the SQL Stockholders pursuant to this Agreement; and
(v) to enter into amendments of this Agreement and execute
instruments in writing to reflect such amendments pursuant to Section 12.1
hereof.
(b) Each of the SQL Stockholders agrees to be irrevocably bound by
all agreements and determinations made by and documents executed and delivered
by the SQL Stockholders' Representative under this Agreement and the other
agreements, instruments and documents to be delivered by or on behalf of the SQL
Stockholders pursuant to this Agreement.
10.3Actions. Each of the SQL Stockholders hereby expressly acknowledges
and agrees that the SQL Stockholders' Representative is authorized to act on his
behalf. Notwithstanding any dispute or disagreement among the SQL Stockholders,
Datastream and any other Person or entity shall be entitled to rely on any and
all action taken by the SQL Stockholders' Representative under this Agreement
and the other agreements, instruments and documents to be delivered by or on
behalf of the SQL Stockholders pursuant to this Agreement without any liability
to, or obligation to inquire of, any of the SQL Stockholders. Datastream and any
other Person or entity are hereby expressly authorized to rely on the
genuineness of the signature of the SQL Stockholders' Representative and, upon
receipt of any writing which reasonably appears to have been signed by the SQL
Stockholders' Representative, Datastream and any other Person or entity may act
upon the same without any further duty of inquiry as to the genuineness of the
writing.
10.4Successors. If Residentie Participaties III CV ceases to function in
its capacity as the SQL Stockholders' Representative for any reason whatsoever,
then a majority of the SQL Stockholders may appoint a successor; provided,
however, that if for any reason no successor has been appointed pursuant to the
foregoing within thirty (30) days, then Residentie Participaties III CV shall be
obligated to nominate a successor acceptable to a majority of the SQL
Stockholders and to Datastream or to petition a court of competent jurisdiction
for appointment of a successor.
10.5Effectiveness. The authorizations of the SQL Stockholders'
Representative shall be effective until his rights and obligations under this
Agreement terminate by virtue of the termination of any and all obligations of
the SQL Stockholders to Datastream under this Agreement. The SQL Stockholders
may not, after the date hereof, terminate the authority of the SQL Stockholders'
Representative to act on their behalf hereunder. Any such action shall be void
and of no force or effect.
10.6Indemnification. The SQL Stockholders hereby jointly and severally
agree to indemnify and hold the SQL Stockholders' Representative harmless for
any and all liability, loss, cost, damage or expense (including attorneys' fees)
incurred or suffered as a result of the performance of his duties under this
Agreement or failure to perform any such duty, except any liability, loss, cost,
damage or expense suffered or incurred as a result of the SQL Stockholders'
Representative's gross negligence or wilful misconduct.
ARTICLE XI
GENERAL PROVISIONS
11.1Amendment. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto, except that the SQL
Stockholders' Representative may execute amendments on behalf of the SQL
Stockholders pursuant to Section 10.2(a)(v) hereof.
11.2Extension; Waiver. At any time prior to the Closing Date, the
parties (through a duly authorized officer in the case of a corporate party)
may:
(a) extend the time for the performance of any of the
obligations or other acts of the other parties;
(b) waive any inaccuracies in the representations and
warranties contained in this Agreement or in any document delivered
pursuant to this Agreement; and
(c) waive compliance with any of the agreements or
conditions contained in this Agreement.
Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
each of the parties.
11.3Entire Agreement. This Agreement (including the Schedules and
Exhibits hereto) and the other documents referenced herein contain the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior arrangements and understandings, both written and oral, with
respect thereto.
11.4Severability. It is the desire and intent of the parties that the
provisions of this Agreement be enforced to the fullest extent permissible under
the law and public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, in the event that any provision of this Agreement would be
held in any jurisdiction to be invalid, prohibited, or unenforceable for any
reason, such provision, as to such jurisdiction, shall be ineffective, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
Notwithstanding the foregoing, if such provision could be more narrowly drawn so
as not to be invalid, prohibited or unenforceable in such jurisdiction, it
shall, as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
11.5Notices. All notices and other communications pursuant to this
Agreement shall be in writing and shall be deemed to be sufficient if contained
in a written instrument and shall be deemed given if delivered personally,
telecopied, sent by internationally-recognized, overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) If to Datastream or the Subsidiary, to:
Datastream Systems, Inc.
50 Datastream Plaza
Greenville, South Carolina 29605
Attention: Larry G. Blackwell, Ph.D., P.E.
Telephone: (864) 422-5215
Telecopier: (864) 422-5000
with a copy to:
Hunton & Williams
600 Peachtree Street, N.E.
Suite 4100
Atlanta, Georgia 30308-2216
Attention: J. Stephen Hufford, Esq.
Telephone: (404) 888-4045
Telecopier: (404) 888-4190
(b) If to SQL, to:
SQL Systems B.V.
Marconistraat 16
P.O. Box 11344
3004 E.H. Rotterdam
Holland
Attention: Dr. Peter A.G. Huisman
with a copy to:
Trenite Van Doorne
P.O. Box 17207
2502 CE The Hague
Holland
Attention: Dr. Bas Steins Bisschop
(c) If to the SQL Shareholders, to the SQL
Stockholders' Representative:
Residentie Participaties III CV
P.O. Box 1345
7301 BN Apeldoorn
Holland
with a copy to:
Trenite Van Doorne
P.O. Box 17207
2502 CE The Hague
Holland
Attention: Dr. Bas Steins Bisschop
(d) all such notices and other communications shall
be deemed to have been received
(i) in the case of personal delivery, on the date of
such delivery,
(ii) in the case of a telecopy, when the party sending such
telecopy shall have confirmed sending the communication by telephone to an
officer-level representative of the addressee,
(iii) in the case of delivery by nationally-recognized,
overnight courier, on the Business Day following dispatch, and
(iv) in the case of mailing, on the third Business Day
following such mailing.
11.6Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
11.7Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
11.8Benefits; Assignment. This Agreement is not intended to confer upon
any Person other than the parties any rights or remedies hereunder and shall not
be assigned by operation of law or otherwise; provided, however, that (i)
Datastream may assign all or any portion of the rights hereunder to any
wholly-owned subsidiary of Datastream, and SQL shall, upon request, execute any
amendment to the Transaction Documents necessary to provide the benefits of this
Agreement to any such assignee and (ii) Residentie Participaties III CV and
Holland Venture Holdings II CV may consolidate their respective holdings for
purposes of receiving their share of the Total Consideration, but without in any
way substantively affecting Datastream's rights hereunder, and Datastream shall,
upon request, execute any amendment to the Transaction Documents necessary in
connection with any such consolidation.
11.9Governing Law; Arbitration. This Agreement shall be governed by and
construed in accordance with the laws of The Netherlands as applicable to
contracts made and to be performed therein. All disputes between the parties
hereto arising under or in connection with this Agreement or further agreements
resulting from this Agreement including all disputed claims for breach by either
party of any representation, warranty, undertaking or covenant on its part under
this Agreement, shall be resolved by arbitration in accordance with the rules of
the United Nations Commission on International Trade Law, provided that the
parties shall have the right to settle any such dispute in summary proceedings
and the right to obtain seizure, and provided, further, that it is the desire of
the parties to this Agreement such arbitrators undertake their best efforts to
complete any such arbitration within one year of the date such arbitration is
commenced. The arbitration proceedings shall only be conducted in the English
language and all pleadings and papers (other than original exhibits) submitted
in connection with such arbitration shall only be submitted in the English
language. The place of arbitration shall be New York, New York or London,
England, at the discretion of the party initiating a Claim hereunder. The
arbitration panel shall consist of three members, or, subject to the agreement
of the parties, one member. If the panel is to consist of one member, such
member shall be chosen by agreement of the parties within 30 days following
initiation of the arbitration proceedings or, if the parties are unable to agree
within that time, by the United Nations Commission on International Trade Law in
a manner consistent with its rules. If the panel is to consist of three members,
the first two members shall be chosen by each party and such members shall
choose the third member within 30 days following the initiation of the
arbitration proceedings. For purposes of this Section 11.9, the term "party," as
used herein shall, in appropriate circumstances, be deemed to mean Datastream,
on the one hand, and the SQL Stockholders (collectively and as represented by
the SQL Stockholders' Representative), on the other hand.
11.10 Agent for Service. Each of the SQL Stockholders authorizes and
appoints the SQL Stockholders' Representative as his agent to receive service of
process for any action or proceeding arising out of or relating to this
Agreement.
11.11 Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent and no
rule of strict construction shall be applied against any party. Any reference to
any federal, state, local or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise. Nothing in the Disclosure Letter shall be deemed adequate to
disclose an exception to a representation or warranty made herein unless the
Disclosure Letter identifies the exception with particularity, describes the
relevant facts in detail and makes specific reference to the Section of this
Agreement from which exception is taken. Without limiting the generality of the
foregoing, the mere listing (or inclusion of a copy) of a document or other item
shall not be deemed adequate to disclose an exception to a representation or
warranty made herein (unless the representation or warranty has to do with the
existence of the document or other items itself). The parties intend that each
representation, warranty and covenant contained herein shall have independent
significance. If any party has breached any representation, warranty or covenant
contained herein in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the party has not
breached shall not detract from or mitigate the fact that the party is in breach
of the first representation, warranty or covenant.
[Signatures appear on following pages.]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have signed or have caused this
Agreement to be signed by their respective duly authorized officers, all as of
the date first written above.
DATASTREAM: DATASTREAM SYSTEMS, INC.
By:
---------------------------
Title: _______________________
[CORPORATE SEAL]
SQL: SQL GROUP, B.V.
By:____________________________
Title:
-----------------------
[Signatures continued on following pages.]
<PAGE>
- ------------------------------- -----------------------------------
by: Residentie Participaties III CV by: Holland Venture Holdings II
- -------------------------------- -----------------------------------
by: P.A.G. Huisman by: Spouse
- -------------------------------- -----------------------------------
by: H.P. de Gruyter by: Spouse
- -------------------------------- -----------------------------------
by: Parnib BV by: V.W.J. Mom
- -------------------------------- -----------------------------------
by: M. Robijns by: Stichting Marconi
- --------------------------------
by: SQL Group BV
Accepted by:
SQL STOCKHOLDERS' ------------------------------------
REPRESENTATIVE: by: Residentie Participaties
III CV
<PAGE>
SCHEDULE 2.2
(To be completed at Closing.)
Total Share of
Escrow Consideration(2) Indemnity
SQL Stockholder Shares(1) Stock Cash($) Obligation(3)
Residentie
Participaties III CV 49,730 179,583 5,350,480 33.09%
P.A.G. Huisman 24,106 87,050 2,593,546 16.04
H.P. de Gruyter 24,106 87,050 2,593,546 16.04
V.W.J. Mom 24,106 87,050 2,593,546 16.04
Holland Venture
Holdings II 16,960 61,172 1,822,557 11.27
Parnib BV 8,486 30,643 912,981 5.66
M. Robijns 2,802 22,841 13,651 1.86
Stichting Marconi(4) 0 16,662 388,776 0
Stichting Marconi(5) 0 29,054 730,917 0
------- ------- --------- -----
150,276 601,105 17,000,000 100.0%
======= ======= ========== =====
(1) Per Section 2.2(iii).
(2) Per Section 1.51 and 2.2.
(3) Per Section 9.2 and 9.7.
(4) Acting for itself.
(5) Acting on behalf of the Optionholders.
<PAGE>
EXHIBIT 4.1
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made as of December 31,
1996, by and among Datastream Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware ("Datastream"), the
stockholders of SQL Group, B.V. listed on the signature pages hereto (the "SQL
Stockholders"), and Robert J.J. Lijdsman, a civil law notary with his offices in
Rotterdam, The Netherlands, as escrow agent (the "Escrow Agent").
RECITALS
WHEREAS, Datastream, SQL Group, B.V., a corporation organized and
existing under the laws of The Netherlands ("SQL"), and the SQL Stockholders
have entered into that certain Share Purchase Agreement dated as of December 15,
1996 (the "Share Purchase Agreement"), providing for the acquisition of SQL by
Datastream through the purchase of all of the capital stock of SQL outstanding
on the Closing Date (the "Transaction");
WHEREAS, pursuant to the Share Purchase Agreement, the SQL Stockholders
are entitled to receive, at the Effective Time of the Transaction, an aggregate
of 751,381 shares of Datastream Common Stock as a portion of the consideration
for such Transaction;
WHEREAS, the Share Purchase Agreement provides that 150,276 shares of
Datastream Common Stock (the "Escrow Shares") shall be delivered to the Escrow
Agent and shall be placed and held in escrow (the "Escrow") pursuant to the
terms and conditions specified herein;
WHEREAS, the respective number of Escrow Shares being placed in Escrow
by each of the SQL Stockholders is set forth on Schedule 2.2 to the Share
Purchase Agreement;
WHEREAS, the execution and delivery by the SQL Stockholders of this
Agreement is a condition precedent to Datastream's obligations to effect the
Transaction under the Share Purchase Agreement; and
WHEREAS, Robert J.J. Lijdsman is willing to accept delivery of the
Escrow Shares from the SQL Stockholders and to hold and release such Escrow
Shares in accordance with the terms and conditions specified herein;
NOW, THEREFORE, in consideration of the premises, the agreements set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
<PAGE>
TERMS AND CONDITIONS
1. Definitions.
(a) Capitalized terms used but not otherwise defined herein shall have
the meanings ascribed to such terms in the Share Purchase Agreement.
(b) As used herein, the term "Escrow Shares" includes any shares of
Datastream Common Stock issued by Datastream during the term of the Escrow in
payment of stock dividends or stock splits with respect to the shares of
Datastream Common Stock deposited pursuant to this Agreement, but does not
include any shares released from the Escrow pursuant to the provisions hereof.
2. Appointment of Escrow Agent.
Datastream and the SQL Stockholders hereby designate and appoint Robert
J.J. Lijdsman to serve as escrow agent hereunder, and Robert J.J. Lijdsman
hereby accepts such designation and appointment upon the terms, conditions and
provisions of this Agreement.
3. Deposit with Escrow Agent.
At the Closing, each SQL Stockholder will deposit for safekeeping
("overdracht ten titel van bewaarrening") with the Escrow Agent stock
certificates representing the Escrow Shares, together with a duly executed power
of attorney substantially in the form attached hereto as Exhibit B (the "Power
of Attorney"), appointing the Escrow Agent as such SQL Stockholder's
attorney-in-fact for the purpose of executing and delivering the stock powers
and instructions necessary to effect the distributions contemplated by this
Agreement. The SQL Stockholders will allow the Escrow Shares to remain in Escrow
with the Escrow Agent and will not withdraw or attempt to withdraw the same from
the Escrow except as herein provided.
4. Escrow Shares; Voting Rights and Cash Dividends.
Upon receipt of the Escrow Shares, the Escrow Agent shall hold the same
in accordance with the terms hereof. The Escrow Shares shall be held in Escrow
until delivered to the SQL Stockholders, Datastream or both pursuant to the
terms hereof. For so long as the Escrow Agent is acting in such capacity with
respect to Escrow Shares held hereunder, the Escrow Agent hereby gives each SQL
Stockholder a power of attorney giving each SQL Stockholder the sole right to
vote or direct the voting of his Escrow Shares and the right to receive all cash
dividends declared by the Company with respect thereto.
- 2 -
<PAGE>
5. Purpose of Escrow.
The Escrow is being established for the purpose of providing a
non-exclusive fund for recovery by Datastream, subject to the terms of the Share
Purchase Agreement, for any (i) SQL Expenses not paid as of the Closing Date and
(ii) any Liability incurred by Datastream or SQL after the Effective Time as a
result of any breach of a representation or warranty or other breach of the
Share Purchase Agreement by the SQL Stockholders in connection with the
Transaction or in connection with the delivery of any certificates, agreements
or other documents required to be delivered under the terms of the Share
Purchase Agreement (except for such breaches specifically disclosed in the
Disclosure Letter).
6. Valuation of Escrow Shares.
(a) For the purposes of this Agreement and all notices and
distributions contemplated hereby, each of the Escrow Shares shall have a value
equal to $22.625, subject to adjustment for stock splits or reverse stock
splits, if any, declared by Datastream during the term of the Escrow (the stock
price as so adjusted shall be referred to herein as the "Stock Value").
(b) The number of Escrow Shares to be retained by the Escrow Agent in
connection with a Claim against the Escrow or released to Datastream in payment
of a Claim against the Escrow shall be determined by dividing the dollar amount
of such Claim by the Stock Value, and rounding the number so obtained down to
the nearest whole number.
(c) No fractional share shall be issued or released in connection with
the payment of a Claim against the Escrow and the amount of any such Claim as to
which a fractional share would otherwise be disbursed, shall be disregarded by
the Escrow Agent.
7. Retention of Escrow Shares.
Subject to the provisions of Section 8 of this Agreement, the Escrow
Agent shall hold all Escrow Shares deposited with it pending the receipt by the
Escrow Agent from time to time of:
(a) One or more written notices of a Claim against the Escrow in the
form specified in Section 16(b) of this Agreement (each a "Notice of Claim");
(b) One or more written notices of the settlement of a disputed Claim
against the Escrow in the form specified in Section 16(c) of this Agreement
(each a "Notice of Settlement"); or
(c) An arbitration decision directing the release of some or all of the
Escrow Shares from an arbitrator chosen and acting in accordance with the
provisions of Section 11.9 of the Share Purchase Agreement (an "Order").
- 3 -
<PAGE>
8. Claim Procedure.
(a) In the event that the Escrow Agent receives a Notice of Claim from
Datastream, the Escrow Agent shall notify the SQL Stockholders' Representative
of the receipt of such Notice of Claim within five (5) Business Days by sending
a copy of the Notice of Claim marked to show the date of receipt by the Escrow
Agent to the SQL Stockholders' Representative. If the SQL Stockholders wish to
dispute the Claim against the Escrow contained in the Notice of Claim, the SQL
Stockholders' Representative shall send a notice to the Escrow Agent that the
SQL Stockholders dispute the Claim against the Escrow in the form specified in
Section 16(d) of this Agreement (a "Notice of Dispute"). Such Notice of Dispute
must be received by the Escrow Agent within fifteen (15) Business Days after the
receipt by the Escrow Agent of the Notice of Claim.
(b) If the Escrow Agent receives a Notice of Dispute from the SQL
Stockholders' Representative within fifteen (15) Business Days after the receipt
by the Escrow Agent of a Notice of Claim, the Escrow Agent shall not release
Escrow Shares subject to such Notice of Claim and Notice of Dispute until the
Escrow Agent receives a Notice of Settlement or an Order directing the Escrow
Agent to cause the delivery of all or a specified portion of the Escrow Shares
to the appropriate party or parties. Upon receipt of such Notice of Settlement
or Order, the Escrow Agent shall distribute, as soon as practicable, the number
of Escrow Shares specified therein in accordance with the directions contained
therein and the provisions of Sections 6, 10 and 11 of this Agreement.
(c) If the Escrow Agent does not receive a Notice of Dispute from the
SQL Stockholders' Representative within fifteen (15) Business Days after the
receipt by the Escrow Agent of a Notice of Claim, the Escrow Agent shall release
to Datastream, as soon as practicable, the number of Escrow Shares required to
pay the Claim specified in the Notice of Claim at the Stock Value (as determined
pursuant to Section 6 of this Agreement) in accordance with Section 10 of this
Agreement.
(d) Notwithstanding the receipt of one or more Notices of Dispute, the
Escrow Agent shall release the appropriate number of Escrow Shares required to
pay a Claim specified in a Notice of Claim for which no Notice of Dispute has
been timely received regardless of whether such release would cause the
remaining number of Escrow Shares to be less than the number of Escrow Shares
then subject to other Notices of Claim or Notices of Dispute that have been
timely received by the Escrow Agent.
(e) The Escrow Agent shall release Escrow Shares from the Escrow Shares
registered in each SQL Stockholder's name pro rata in accordance with the
percentages set forth in the third column of Schedule 2.2 to the Share Purchase
Agreement.
- 4 -
<PAGE>
9. Termination and Release of Escrow Shares.
(a) This Agreement, except for the provisions in Sections 12, 13 and 15
relating to the performance, liability and indemnification of the Escrow Agent
and except as set forth in subsection (b) below, shall terminate on July 1, 1998
(the "Termination Date") unless the Escrow Agent shall have received:
(i) any Notice of Claim for which the fifteen (15) Business
Day period for filing a Notice of Dispute shall not have expired (an
"Outstanding Notice of Claim"); or
(ii) any Notice of Claim for which a timely Notice of Dispute
shall have been received by the Escrow Agent for which the Escrow Agent shall
not have received a Notice of Settlement or an Order (an "Outstanding Notice of
Dispute").
(b) In the event that on the Termination Date the Escrow Agent shall be
in possession of an Outstanding Notice of Claim or an Outstanding Notice of
Dispute, this Agreement shall remain in effect and the Escrow Agent shall
release, as soon as practicable, to the SQL Stockholders the number of Escrow
Shares then held by the Escrow Agent in excess of the number of Escrow Shares
then subject to any Outstanding Notice of Claim and any Outstanding Notice of
Dispute. This Agreement shall thereafter terminate at the time that the Escrow
Agent shall have released all of the Escrow Shares in accordance with the terms
of this Agreement.
(c) In the event that on the Termination Date the Escrow Agent shall
not be in possession of an Outstanding Notice of Claim or an Outstanding Notice
of Dispute, the Escrow Agent shall release, as soon as practical, the number of
Escrow Shares then held to the SQL Stockholders.
10. Manner of Release of Escrow Shares to Datastream.
Whenever the Escrow Agent determines that it is required to release
some or all of the Escrow Shares to Datastream, the Escrow Agent shall deliver
the following items to First Union National Bank of North Carolina, the transfer
agent for the common stock of Datastream (the "Transfer Agent");
(a) Stock certificates representing the Escrow Shares;
(b) Copies of the Powers of Attorney delivered to the Escrow Agent
pursuant to Section 3 of this Agreement;
(c) Appropriate stock powers signed by an authorized officer of the
Escrow Agent, together with evidence of the authority of the officer acting on
behalf of the Escrow Agent; and
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<PAGE>
(d) Written instructions to the Transfer Agent to:
(i) reissue a stock certificate registered in the name of
Datastream and representing the number of Escrow Shares to be released to
Datastream and deliver the same to Datastream; and
(ii) reissue stock certificates, registered in the names of
each of the SQL Stockholders representing the balance of such SQL Stockholder's
Escrow Shares and deliver the same to the Escrow Agent.
11. Manner of Release of the Escrow Shares to the SQL Stockholders.
Whenever the Escrow Agent determines that it is required to release
some or all of the Escrow Shares to the SQL Stockholders, the Escrow Agent shall
deliver to the Transfer Agent:
(a) Stock certificates representing the Escrow Shares;
(b) Copies of the Powers of Attorney delivered to the Escrow Agent
pursuant toSection 3 of this Agreement;
(c) Appropriate stock powers signed by an authorized officer of
the Escrow Agent, with evidence of the authority of the officer acting on behalf
of the Escrow Agent; and
(d) Written instructions to the Transfer Agent to:
(i) reissue stock certificates registered in the names of each
of the SQL Stockholders representing the number of Escrow Shares to be released
to each SQL Stockholder in accordance with the percentages set forth in Schedule
2.2 to the Share Purchase Agreement;
(ii) reissue stock certificates registered in the names of
each of the SQL Stockholders representing the balance of such SQL Stockholder's
Escrow Shares; and
(iii) deliver the stock certificates representing the Escrow
Shares to be released to the SQL Stockholders to the Stockholder's
Representative and deliver the stock certificates representing the balance of
each of the SQL Stockholder's Escrow Shares to the Escrow Agent.
12. Agreement of Escrow Agent.
The Escrow Agent hereby agrees to receive the Escrow Shares and the
Powers of Attorney, to hold the same in Escrow in accordance with the terms of
this Agreement and
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<PAGE>
not permit any withdrawal thereof except under the terms of this Agreement. The
Escrow Agent shall be responsible only for the safekeeping of the Escrow Shares
and the distribution or delivery thereof in accordance with the terms of this
Agreement. The Escrow Agent shall not be responsible for the authenticity or
accuracy of any documents or stock certificates, or the sufficiency of the
Escrow Shares and the Powers of Attorney to make the distributions required
herein.
13. Performance by Escrow Agent.
The parties to this Agreement agree as follows:
(a) In performing any of its duties under this Agreement, or upon the
claimed failure to perform its duties hereunder, the Escrow Agent shall not be
liable to any party for any damages, losses or expenses which may be incurred as
a result of the Escrow Agent so acting or failing to act, except the failure by
the Escrow Agent to give notice to the SQL Stockholders' Representative of
receipt by the Escrow Agent of a Notice of Claim.
(b) The Escrow Agent shall not be responsible for or be required to
enforce any of the terms or conditions of the Share Purchase Agreement or any
other agreement by and among Datastream, SQL and the SQL Stockholders.
(c) The Escrow Agent shall not be responsible or liable in any manner
whatsoever for the performance of or by Datastream, SQL and the SQL Stockholders
of their respective obligations under this Agreement, nor shall the Escrow Agent
be responsible or liable in any manner whatsoever for the failure of any third
party to honor any of the provisions of this Agreement.
(d) The parties hereto represent to the Escrow Agent that they are
authorized to enter into the Escrow Agreement by their duly authorized
representatives and that the Escrow Agent is entitled to rely on this
representation without the need to confirm the authority of the representatives.
(e) The duties and obligations of the Escrow Agent shall be limited to
and determined solely by the express provisions of this Agreement and no implied
duties or obligations shall be read into this Agreement against the Escrow
Agent. The Escrow Agent is not bound by and is under no duty to inquire into the
terms or validity of any other agreements or documents, including any agreements
or documents which may be related to, referred to in, or deposited with the
Escrow Agent in connection with this Agreement.
(f) The Escrow Agent shall be entitled to rely upon and shall be
protected in acting in reliance upon any notice submitted to it in connection
with its duties under this Escrow Agreement in the appropriate form as set forth
in Section 16 of this Agreement, which the Escrow Agent in good faith believes
to have been signed or presented by the proper party or parties.
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<PAGE>
(g) The Escrow Agent shall be entitled to consult with counsel of its
own selection and the opinion of such counsel shall be full and complete
authorization and protection to the Escrow Agent in respect of any action taken
or omitted by the Escrow Agent hereunder in good faith, and in accordance with
the opinion of such counsel.
(h)The Escrow Agent shall have the right to resign at any time and for
any reason, and shall be discharged of its duties as Escrow Agent hereunder by
giving written notice of its resignation to the parties hereto at least twenty
(20) Business Days prior to the date specified for such resignation to take
effect. All obligations of the Escrow Agent hereunder shall cease and terminate
on the effective date of its resignation and its sole responsibility thereafter
shall be to deliver the Escrow Shares to First Union National Bank of North
Carolina, together with the Powers of Attorney previously delivered to the
Escrow Agent pursuant to Section 3 hereof, whereupon First Union National Bank
of North Carolina shall assume all of the rights and obligations of, and be
deemed to be for all purposes, the Escrow Agent hereunder.
(i) If the Escrow Agent shall die or become legally disabled, then a
civil law notary from the firm of Loeff Claeys Verbeke shall be designated to
serve as a replacement Escrow Agent in his stead.
14. Fees of Escrow Agent.
For its services hereunder (which shall include receipt and return or
release of the Escrow Shares in the manner contemplated herein), the Escrow
Agent shall receive such compensation as may be agreed upon with the Escrow
Agent, and Datastream, on the one hand, and the SQL Stockholders (jointly and
not severally), on the other hand, shall be equally responsible therefor.
15. Indemnification.
(a) Datastream, SQL and the SQL Stockholders jointly and severally
agree to indemnify and hold the Escrow Agent harmless from and against any and
all liabilities, causes of action, claims, demands, judgments, damages, costs
and expenses(including reasonable attorneys fees and expenses) that may arise
out of or in connection with the Escrow Agent's good faith acceptance of or
good faith performance of its duties and obligations under this Agreement.
(b)The Escrow Agent shall be under no duty to institute any suit or to
take any remedial procedures under this Agreement or to enter any appearance or
in any way defend any suit in which it is made a defendant hereunder until it
shall be indemnified as provided above.
(c) In the event that the Escrow Agent shall be uncertain as to its
duties or rights hereunder, or receive instructions with respect to the Escrow
Shares which, in its sole
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<PAGE>
discretion, are in conflict either with other instructions received by it or
with any provision of this Agreement, the Escrow Agent shall have the absolute
right to suspend all further performance under this Escrow Agreement(except for
the safekeeping of the Escrow Shares) until the resolution of such uncertainty
or conflicting instructions to the Escrow Agent's sole satisfaction by final
judgment or a court of competent jurisdiction, joint written instructions from
all of the other parties hereto, or otherwise.
(d) In the event that any controversy arises between one or more of the
parties hereto or any other party with respect to this Agreement or the Escrow
Shares, the Escrow Agent shall not be required to determine the proper
disposition of such controversy or the proper disposition of the Escrow Shares
and shall have the absolute right, in its sole discretion, to hold the Escrow
Shares subject to such dispute until it receives an Order directing the release
of some or all of the Escrow Shares.
16. Instructions and Notices.
(a) In executing and performing its duties hereunder, the Escrow Agent
shall be entitled to rely upon instructions of Datastream and the SQL
Stockholders' Representative. Any notice, payment, demand, instruction or
communication required or permitted to be given by this Agreement shall be in
writing and shall be deemed to have been sufficiency given or served for all
purposes on the date on which the same was sent if transmitted via confirmed
facsimile with a copy thereof sent by reputable, guaranteed delivery service,
shipping charges prepaid, to the appropriate party at the facsimile number and
address stated below:
If to Datastream: Datastream Systems, Inc.
50 Datastream Plaza
Greenville, South Carolina 29067
Attn: Larry G. Blackwell, Ph.D,P.E.
Facsimile: (864) 422-5000
with a copy to: Hunton & Williams
600 Peachtree Street, NE
Suite 4100
Atlanta, Georgia 30308
Attn: J. Stephen Hufford, Esq.
Facsimile: (404) 888-4190
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<PAGE>
If to the SQL Stockholders' Residentie Participaties III CV
Representative P.O. Box 1345
7301 BN Apeldoorn
Holland
with a copy to: Trenite Van Doorne
Churchillplein 5
P. O. Box 17207
2502 CE, The Hague
Holland
Attn: Bas Steins Bisshop
Telephone: (31 70) 338-3131
Facsimile: (31 70) 358-4798
If to the Escrow Agent: Robert J.J. Lijdsman
Loeff Claeys Verbeke
Weena 70
Rotterdam, The Netherlands
Telephone: (31 10) 403-4777
Facsimile: (31 10) 403-4616
with a copy to: Mr. J. G. deGroot
Facsimile: (31 10) 414-9388
Any party hereto may change its address for purposes of notice by giving notice
of such change to the other parties hereto in the manner specified herein.
(b) A Notice of Claim shall specify the amount of the Claim against the
Escrow, expressed in dollars, the number of Escrow Shares required to pay the
Claim determined in accordance with Section 6 of this Agreement, and a statement
describing the nature and grounds of the Claim, specifying the section of the
Share Purchase Agreement to which such Claim pertains (if applicable), setting
forth the aggregate amount of all Claims for which Datastream is seeking or has
sought indemnification from the SQL Stockholders and demonstrating the amount of
such Claim that may be paid from the Escrow in accordance with the provisions of
Section 9.5 of the Share Purchase Agreement. Any Notice of Claim shall be
prepared, executed and delivered to the Escrow Agent by Datastream.
(c) A Notice of Settlement shall specify the Notice of Claim to which
it relates by indicating the date of such Notice of Claim and the dollar amount
of the Claim against the Escrow, and shall specify the Notice of Dispute to
which it relates by indicating the date of such Notice of Dispute. The Notice of
Settlement shall contain a brief description of the resolution of the claim and
dispute and shall include instructions to the Escrow Agent specifying the number
of Escrow Shares to be released and to which party the shares are to be
released. Each Notice of Settlement must be signed by both an authorized officer
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<PAGE>
of Datastream and the SQL Stockholders' Representative acting on behalf of the
SQL Stockholders.
(d) A Notice of Dispute shall specify the Notice of Claim to which it
relates by indicating the date of such Notice of Claim and the dollar amount of
the claim against the Escrow, and shall also indicate in reasonable detail the
basis for the dispute of the Notice of Claim. The Notice of Dispute shall be
executed on behalf of the SQL Stockholders by the SQL Stockholders'
Representative and delivered to the Escrow Agent.
(e) Copies of all the notices described in the above subsections of
this Section 16 shall also be sent to each of the persons listed in Section
16(a) at the address listed therein.
17. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of The Netherlands, provided, however, that if First Union National
Bank of North Carolina shall assume the rights and obligations of the Escrow
Agent hereunder pursuant to Section 13(h) hereof, the Agreement shall then be
governed by and construed in accordance with the laws of the State of Delaware
or the laws of such jurisdiction as shall be required by First Union National
Bank of North Carolina.
18. Submission to Arbitration.
Datastream, each of the SQL Stockholders and the Escrow Agent hereby
agree that all disputes between the parties hereto arising under or in
connection with this Agreement shall be resolved by arbitration in accordance
with the provisions of Section 11.9 of the Share Purchase Agreement.
19. Modification.
No modification or amendment to this Agreement shall be valid unless it
is in writing and signed by all of the parties hereto.
20. Headings.
The headings in this Agreement are in tended to be for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the scope, extent or intent of this Agreement or any provision hereof.
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<PAGE>
21. Severability.
Each provision of this Agreement is intended to be severable. If any
section or provision is illegal or invalid for any reason whatsoever, such
illegality or invalidity shall not affect the validity or enforcement of the
remainder of this Agreement.
22. Sole Agreement.
This Agreement constitutes the entire understanding of the parties
hereto with respect to the subject matter hereof.
23. Counterparts.
This Agreement and any amendment hereto may be executed by the parties
in two or more counterparts, with the same effect as if all parties hereto had
signed the same document. All counterparts shall be construed as and shall
constitute one and the same agreement.
[Signatures appear on the following pages.]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and sealed as of the date first written above.
DATASTREAM: DATASTREAM SYSTEMS, INC.
By: ___________________________
Title: ________________________
[CORPORATE SEAL]
ESCROW AGENT: _______________________________
Robert J.J. Lijdsman, Civil Law Notary
[Signatures continue on following page.]
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<PAGE>
by: Residentie Participaties III CV by: Holland Venture Holdings II
by: P.A.G. Huisman by: Spouse
by: H.P. de Gruyter by: Spouse
by: Parnib BV by: V.W.J. Mom
by: M. Robijns by: Stichting Marconi
by: SQL Group BV
Accepted by:
SQL STOCKHOLDERS'
REPRESENTATIVE:
by: Residentie Participaties III CV
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<PAGE>
EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made as of
this 31st day of December, 1996 by and among Datastream Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware
("Datastream" or the "Company"), the stockholders of SQL Group, B.V. listed on
the signature pages hereto (individually, each an "SQL Stockholder" and
collectively, the "SQL Stockholders") and Residentie Participaties III CV in its
capacity as the "SQL Stockholders' Representative."
W I T N E S S E T H:
WHEREAS, the Company, SQL Group, B.V., a corporation organized and
existing under the laws of The Netherlands ("SQL"), and the SQL Stockholders
have entered into that certain Share Purchase Agreement dated as of December 15,
1996 providing for the acquisition of SQL by Datastream through the purchase of
all of the outstanding capital stock of SQL (such acquisition is hereinafter
referred to as the "Transaction");
WHEREAS, upon consummation of the Transaction, the SQL Stockholders
will own an aggregate of 751,381 shares of the Common Stock, $.01 par value per
share (the "Common Stock"), of Datastream that they received as consideration
for the Transaction; and
WHEREAS, in connection with the Transaction, Datastream has agreed to
grant to the SQL Stockholders certain rights with respect to the registration
under the Securities Act of 1933, as amended (the "Securities Act"), of the
shares of Datastream Common Stock received as consideration for the Transaction
and the execution and delivery of this Agreement by Datastream is a condition
precedent to the obligations of the SQL Stockholders to consummate the
Transaction under the Share Purchase Agreement;
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
1. Definitions.
(a) The term "affiliate" means a person or entity directly or
indirectly, controlled by, controlling or under common control with another
person or entity.
(b) The terms "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement under the Securities Act with the SEC and the automatic effectiveness
or the declaration or order of effectiveness of such registration statement.
<PAGE>
(c) The term "Registrable Securities" means the shares of the
Common Stock of Datastream issued as consideration in the Transaction and
beneficially owned by any SQL Stockholder, but shall not include any shares of
Common Stock which have been sold or distributed to the public pursuant to Rule
144 promulgated under the Securities Act or that are held in escrow pursuant to
that certain Escrow Agreement of even date herewith for so long as such shares
remain in escrow.
(d) The term "SEC" means Securities and Exchange Commission.
2. Piggyback Registration Rights. If the Company proposes or is
required to register any shares of its Common Stock or securities convertible
into shares of its Common Stock under the Securities Act in connection with the
public offering of such securities (other than a registration on Form S-3
relating solely to the sale of securities to participants in a Company dividend
reinvestment plan, or a registration on Form S-8 relating solely to the sale of
securities to participants in a Company stock option or employee benefit plan,
or a registration on Form S-4, or a registration on any form promulgated by the
Securities and Exchange Commission as a successor to any such form), the Company
shall, at each such time, promptly give written notice of such proposed
registration to the SQL Stockholders' Representative. The SQL Stockholder's
Representative shall notify each SQL Stockholder of such proposed registration
within five (5) days of receiving such notice from the Company. Upon the written
request of any SQL Stockholder received by the Company within 15 days after the
date of the notice of the proposed registration by the Company, the Company
shall, subject to the provisions of Section 3, use its best efforts to include
in such registration all of the Registrable Securities that each such SQL
Stockholder has requested to be registered. The Company shall be under no
obligation to complete any offering of its securities it proposes to make under
this Section 2 and shall incur no liability to any SQL Stockholder for its
failure to do so.
3. Limitations on Piggyback Registration Rights. In connection with any
underwritten public offering, the Company shall not be required to include any
SQL Stockholder's Registrable Securities in such underwriting unless such SQL
Stockholder accepts the terms of the underwriting as agreed upon between the
Company and the underwriters selected by the Company, and then only in such
quantity, if any, as will not, in the opinion of the underwriters, jeopardize
the success of such offering (including the amount of proceeds to the Company or
the price per share to the public). With respect to any such offering, if the
managing underwriter for the offering shall advise the Company that the total
amount of securities, including Registrable Securities, requested to be included
in such offering, exceeds the amount of securities that can be successfully
offered, then the Company shall be required to include in the offering only that
number of such securities, including Registrable Securities, which the managing
underwriter determines will not jeopardize the success of the offering. The
securities to be included in such offering shall be apportioned as follows: (i)
the Company shall have priority over all other selling stockholders, (ii) to the
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<PAGE>
extent that the securities to be sold by the Company do not exhaust the number
of shares determined by such underwriter able to be successfully sold, the
number of shares that may be sold by Larry G. Blackwell, John M. Sterling, III,
Reedy River Ventures, other stockholders of Datastream having applicable
registration rights and the SQL Stockholders shall be apportioned pro rata based
on the number of shares requested to be included in the offering; provided,
however, that if the Board of Directors of Datastream or the managing
underwriter of the offering recommends that any one or more of Larry G.
Blackwell, John M. Sterling, III or Reedy River Ventures not participate in the
offering or reduce the number of their shares to be sold in the offering from
the number determined on a pro rata basis, then the number of shares to be sold
by Larry G. Blackwell, John M. Sterling, III or Reedy River Ventures shall be
reduced in accordance with the Board of Directors' or the managing underwriter's
recommendation and the remaining number of shares to be sold in the offering
shall be apportioned among the stockholders of Datastream having applicable
registration rights and SQL Stockholders pro rata based on the number of shares
such persons requested to be included in the offering.
4. Obligations of the Company. Whenever required under this Agreement
to effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible, prepare and file with the SEC a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become effective and shall:
(a) Use its best efforts to keep such registration statement
effective for up to three months unless the distribution of the securities
registered thereunder has been earlier completed.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement, and use its best efforts to cause each such
amendment to become effective, as may be necessary to comply with the provisions
of the Securities Act with respect to the disposition of all securities covered
by such registration statement.
(c) Furnish to each of the SQL Stockholders participating in
such offering a reasonable number of copies of such registration statement, each
amendment and supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus), any documents incorporated by
reference into the registration statement and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each SQL
Stockholder participating in such underwritten public offering shall also enter
into and perform its obligations under such an
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<PAGE>
agreement, including furnishing an opinion of counsel or entering into a lock-up
agreement relating to Registrable Securities not included in such registration,
in each case as reasonably requested by the managing underwriter.
(e) Promptly notify each SQL Stockholder holding Registrable
Securities covered by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included 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 statement therein not misleading in the light of the
circumstances then existing and promptly file such amendments and supplements
which may be required pursuant to paragraph (b) of this Section 4 on account of
such event and use its best efforts to cause each such amendment or supplement
to become effective.
(f) Furnish, at the request of any SQL Stockholder requesting
registration of its Registrable Securities pursuant to this Agreement, on the
date that such Registrable Securities are delivered to the underwriters for sale
if such securities are being sold through underwriters, or, if such securities
are not being sold through underwriters on the date that the registration
statement with respect to the securities becomes effective, an opinion, dated as
of such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given by company counsel
to the underwriters in any underwritten public offering, addressed to the
underwriters, if any, and to the SQL Stockholders requesting registration of
Registrable Securities.
(g) Use its best efforts to cause the Common Stock to continue
to be included in the Nasdaq Stock Market, Inc. National Market System
("NASDAQ/NMS") or, in the alternative, at the option of the Company, to be
listed on a national securities exchange (provided, however, that the Company
shall have no obligation to apply for the listing of its Common Stock on a
national securities exchange in addition to listing on the Nasdaq/NMS).
(h) Provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement.
(i) Make available for inspection by any SQL Stockholder
selling Registrable Securities and any attorney, accountant or other agent
retained by any such SQL Stockholder all pertinent financial and other records
and documents of the Company, and cause the Company's officers, directors,
employees and independent accountants to supply all information reasonably
requested by any such seller, attorney, accountant or agent in connection with
such registration statement (in each case subject to such assurances as to
confidentiality as are reasonably requested by the Company and its counsel).
(j) Otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably
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<PAGE>
practicable, an earnings statement covering the period of at least twelve months
beginning with the first day of the Company's first full calendar quarter after
the effective date of the registration statement which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.
5. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the SQL Stockholders requesting registration of their Registrable Securities
shall furnish to the Company such information regarding themselves or the
Registrable Securities held by them, and the intended method of disposition of
such Registrable Securities, as shall be reasonably requested by the Company in
order to effect the registration of their Registrable Securities.
6. Expenses. All expenses incurred in connection with the registration
and filing of a registration statement pursuant to Section 4 hereof (including
all amendments or supplements thereto), including, without limitation, all
registration, printing and accounting fees, and fees and disbursements of
counsel for the Company, shall be borne by the Company, provided that
underwriting discounts and commissions relating to the Registrable Securities
and the fees and disbursements of counsel for the selling SQL Stockholders shall
be borne and paid on a pro-rata basis by the SQL Stockholders selling such
Registrable Securities.
7. Indemnification.
In the event any Registrable Securities are included in a
registration statement under this Agreement:
(a) To the fullest extent permitted by law, the Company will
and hereby does agree to indemnify and hold harmless each SQL Stockholder, the
officers, directors, employees, shareholders and partners, if any, of each SQL
Stockholder, and each person, if any, who controls such SQL Stockholder within
the meaning of the Securities Act or the Exchange Act of 1934, as amended (the
"Exchange Act"), against any losses, claims, expenses, damages or liabilities to
which such SQL Stockholder may become subject under the Securities Act, the
Exchange Act or other federal or state law or common law, insofar as such
losses, claims, damages, expenses or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations (each a "Violation"):
(i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement (including any
prospectus or preliminary prospectus included therein), or 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, unless such untrue statement or alleged untrue statement or
omission or alleged omission was contained in or omitted from a
preliminary prospectus and
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<PAGE>
corrected in a final or amended prospectus and such SQL Stockholder
failed to deliver a copy of the final or amended prospectus at or prior
to the confirmation of the sale of the Registrable Securities to the
person or persons asserting any such loss, claim, damage or liability
in the case where such delivery is required by the Securities Act, or
(ii) any other violation by the Company of the Securities Act
or any other securities law, or any rule or regulation promulgated
thereunder.
The Company will reimburse each such SQL Stockholder, officer, director,
partner, agent, employee or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, expense, damage, liability, or action. The indemnity agreement
contained in this Section 7(a) shall not apply to amounts paid in settlement of
any loss, claim, damage, liability, or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable to any SQL Stockholder for any loss,
claim, damage, liability, or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished by or on behalf of such SQL Stockholder, officer,
director, partner, agent, employee or controlling person furnished for use in
such registration statement.
(b) To the fullest extent permitted by law, each selling SQL
Stockholder, severally and not jointly, will and hereby does indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the registration statement, each of its employees, each person, if any,
who controls the Company within the meaning of the Securities Act, each agent
and any underwriter for the Company and any stockholder of the Company selling
securities pursuant to such registration statement and any of its directors,
officers or partners or any person who controls such stockholder, against any
losses, claims, damages, expenses or liabilities to which any of them may become
subject, under the Securities Act, the Exchange Act or other federal or state or
common law, insofar as such losses, claims, damages, expenses or liabilities (or
actions in respect thereof) 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 or on
behalf of such SQL Stockholder for use in such registration statement to be
filed by the Company; and each such SQL Stockholder will, severally and not
jointly, reimburse any legal or other expenses reasonably incurred by (x) the
Company or any such director, officer, employee, agent, controlling person of
the Company, or (y) the underwriter or controlling person thereof, or (z) other
stockholder of the Company selling securities pursuant to such registration
statement or any officer, director, partner or controlling person thereof in
connection with investigating or defending any such loss, claim, damage,
expense, liability or action. The indemnity agreement contained in this Section
7(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the SQL Stockholders (which consent shall be
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given by the SQL Stockholder's Representative and shall not be unreasonably
withheld) nor, in the case of a sale directly by the Company of its securities
(including a sale of such securities through any underwriter retained by the
Company to engage in a distribution solely on behalf of the Company), shall the
SQL Stockholder be liable to the Company in any case in which such untrue
statement or alleged untrue statement or omission or alleged omission was
contained in a preliminary prospectus and corrected in a final or amended
prospectus, and the Company or any underwriter retained by the Company failed to
deliver a copy of the final or amended prospectus at or prior to the
confirmation of the sale of the securities to the person or persons asserting
any such loss, claim, damage or liability in any case where such delivery is
required by the Securities Act; provided, however, that in no event shall the
several liability of any SQL Stockholder for indemnification under this Section
7(b) exceed the proceeds received by such SQL Stockholder from the sale of
Registrable Securities under the applicable registration statement.
(c) Each indemnified party or parties shall give reasonably
prompt notice to each indemnifying party or parties of any action or proceeding
commenced against it in respect of which indemnity may be sought hereunder, but
failure so to notify an indemnifying party or parties shall not relieve it or
them from any liability which it or they may have under this indemnity
agreement, except to the extent that the indemnifying party is materially
prejudiced by such failure to give notice. If the indemnifying party or parties
so elects within a reasonable time after receipt of such notice, the
indemnifying party or parties may assume the defense of such action or
proceeding at such indemnifying party's or parties' expense with counsel chosen
by the indemnifying party or parties and approved by the indemnified party
defendant in such action or proceeding, which approval shall not be unreasonably
withheld; provided, however, that, if such indemnified party or parties
determine in good faith that a conflict of interest exists and that therefore it
is advisable for such indemnified party or parties to be represented by separate
counsel or that, upon advice of counsel, there may be legal defenses available
to it or them which are different from or in addition to those available to the
indemnifying party, then the indemnifying party or parties shall not be entitled
to assume such defense and the indemnified party or parties shall be entitled to
separate counsel at the indemnifying party's or parties' expense. If an
indemnifying party or parties is not so entitled to assume the defense of such
action or does not assume such defense, after having received the notice
referred to in the first sentence of this paragraph, the indemnifying party or
parties will pay the reasonable fees and expenses of counsel for the indemnified
party or parties. Notwithstanding the foregoing, the indemnifying party shall
not be obligated to pay the reasonable fees and expenses of more than one
counsel for the indemnified parties with respect to any claim, unless in the
reasonable judgment of counsel to any indemnified party, expressed in a writing
delivered to the indemnifying party, a conflict of interest may exist between
such indemnified party and any other indemnified party with respect to such
claim, in which event the indemnifying party shall be obligated to pay the
reasonable fees and expenses of such additional counsel or counsels (which shall
be limited to one counsel per indemnified party). No indemnifying party or
parties will be liable for any settlement effected without the written consent
of such
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indemnifying party or parties, which consent shall not be unreasonably withheld.
If an indemnifying party is entitled to assume, and assumes, the defense of such
action or proceeding in accordance with this paragraph, such indemnifying party
or parties shall not, except as otherwise provided in this subsection (c), be
liable for any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action or proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable to a party that would have been an indemnified party under this
Section 7 in respect of any claims referred to herein, then each party that
would have been an indemnifying party hereunder shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such claims in such proportion as is
appropriate to reflect the relative fault of the indemnifying party or parties
on the one hand and such indemnified party on the other in connection with the
action, statement or omission which resulted in such claims, as well as any
other relevant equitable considerations. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged omission to
state a material fact relates to information supplied by the indemnifying party
or such indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing provisions of this Section 7(d), an SQL
Stockholder shall not, as an indemnifying party, be required to contribute any
amount in excess of (x) the amount by which the total price at which the
Registrable Securities sold by such SQL Stockholder were offered to the public
exceeds (y) the amount of any damages which such SQL Stockholder has otherwise
been required to pay by reason of such action, untrue or alleged untrue
statement or omission or alleged omission. The Company and each SQL Stockholder
holding Registrable Securities agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7(d). The amount
paid or payable by an indemnified party as a result of the claims referred to
above in this Section 7(d) shall include any legal or other expenses reasonably
incurred by such indemnified party in connection with the investigation or
defending any such action or claim.
(e) Without the prior written consent of the indemnified
party, no indemnifying party shall consent to entry of judgment or enter into
any settlement which does not include, as an unconditional term thereof, the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect of such claim.
(f) 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 who was not guilty of fraudulent misrepresentation
within the meaning of such Section 11(f).
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8. Reports Under the Exchange Act.
With a view to making available to the SQL Stockholders the
benefits of Rule 144 promulgated under the Securities Act and any other rule or
regulation of the SEC that may at any time permit an SQL Stockholder to sell
securities of the Company to the public without registration,and with a view to
making it possible for the SQL Stockholders to register the Registrable
Securities pursuant to a registration by the Company on Form S-3, the Company
agrees to use its best efforts:
(a) to make and keep public information available,as those
terms are defined in Rule 144;
(b) to file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and Exchange
Act; and
(c) to furnish to any SQL Stockholder so long as such SQL
Stockholder owns any Registrable Securities forthwith upon request(i) a written
statement by the Company as to its compliance with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act or as to its qualification as
a registrant whose securities may be resold pursuant to Form S-3,(ii) a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information as may
be reasonably requested in availing any SQL Stockholder of any rule or
regulation of the SEC which permits the selling of any such securities without
registration or pursuant to such form.
9. Lockup Agreement.
Each SQL Stockholder shall be obligated and hereby agrees not
to sell, loan, grant any option for the purchase of, or otherwise dispose of or
encumber (i) any shares of Registrable Securities subject to a lockup agreement
entered into pursuant to Section 4(d) hereof (except as may be permitted
thereunder) or (ii) without the prior written consent of the Company, more than
fifty percent (50%) of such SQL Stockholders' Registrable Securities during any
ninety (90) day period until the first anniversary of the date hereof (other
than in connection with a registration by the Company hereunder subject to
Section 3 hereof).
10. Transfer of Registration Rights.
The registration rights of the SQL Stockholders granted
pursuant to this Agreement may not be transferred other than by will or the laws
of descent and distribution or with the prior written consent of the Company.
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11. Miscellaneous.
11.1. Notices.
All notices, requests, demands and other communications which
are required to be or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when sent if transmitted by confirmed
facsimile with a copy thereof sent by reputable guaranteed delivery service, to
the party to whom the same is so given or made:
If to the Company, to: Datastream Systems, Inc.
50 Datastream Plaza
Greenville, South Carolina 29605
Attention: Larry G. Blackwell, Ph.D., P.E.
Telephone: (864) 422-5215
Facsimile: (864) 422-5000
with a copy to: Hunton & Williams
600 Peachtree Street, N.E.
Suite 4100
Atlanta, Georgia 30308-2216
Attention: J. Stephen Hufford, Esq.
Telephone: (404) 888-4045
Facsimile: (404) 888-4190
or to such other person at such other place as the Company shall designate to
the Shareholders in writing; and
If to an SQL Stockholder, to the SQL Stockholders' Representative at
the address set forth on the signature pages hereto.
With a copy to: SQL Systems B.V.
Marconistraat 16
P.O. Box 11344
3004 E.H. Rotterdam
Holland
Attention: Dr. Peter A.G. Huisman
Telephone: (31 10) 448-1710
Facsimile: (31 10) 448-1701
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with a copy to: Trenite Van Doorne
Churchillplein 5
P.O. Box 17207
2502 CE, The Hague
Holland
Attention: Dr. Bas Steins Bisschop
Telephone: (31 70) 338-3131
Facsimile: (31 70) 358-4798
11.2. Entire Agreement.
This Agreement constitutes the entire agreement between the
parties hereto and supersedes all prior agreements, representations, warranties,
statements, promises, and understandings, whether written or oral, with respect
to the subject matter thereof, and cannot be changed or terminated orally. No
party hereto shall be bound by or charged with any written or oral agreements,
representations, warranties, statements, promises, or understandings not
specifically set forth in this Agreement.
11.3. Headings; Certain Terms.
The section and other headings contained in this Agreement are
for reference purposes only and shall not be deemed to be part of this Agreement
or to affect the meaning or interpretation of this Agreement.
11.4. Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
11.5. Severability.
If any term or provision of this Agreement shall to any extent
be invalid or unenforceable, the remainder of this Agreement shall not be
affected thereby, and each term and provision of this Agreement shall be valid
and enforceable to the fullest extent permitted by law.
11.6. Termination of Agreement.
This Agreement shall terminate on the earliest to occur of (a)
the termination of the Share Purchase Agreement in accordance with its terms
prior to the consummation of the Transaction and (b) the date as of which the
SQL Stockholders shall have sold all of their Registrable Securities (through a
registered public offering or otherwise), (c) the second anniversary of the date
hereof or (d) the date as of which each SQL Stockholder is entitled to
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sell all remaining Registrable Securities held by such SQL Stockholder, without
limitation as to volume, pursuant to Rule 144 under the Securities Act.
11.7. Amendments and Waivers.
Except as otherwise provided herein, the provisions of this
Agreement may be amended or waived only upon the prior written consent of the
Company and the SQL Stockholders' Representative.
11.8. Section References.
All references contained in this Agreement to any section
number are references to sections of this Agreement unless otherwise
specifically stated.
11.9. Counterparts.
This Agreement may be executed in any number of counterparts,
each of which, when executed, shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
11.10. Binding Effect.
This Agreement shall be binding on all successors and assigns
of the Company, whether by merger, reorganization, sale of assets or otherwise.
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement, or have caused this Agreement to be signed on their behalf by an
officer or representative thereunder duly authorized, on the respective dates
stated below.
DATASTREAM SYSTEMS, INC.
By
Name:
Title:
[Signatures continue on following page.]
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by: Residentie Participaties III CV by: Holland Venture Holdings II
by: P.A.G. Huisman by: Spouse
by: H.P. de Gruyter by: Spouse
by: Parnib BV by: V.W.J. Mom
by: M. Robijns by: Stichting Marconi
by: SQL Group BV
Accepted by:
SQL STOCKHOLDERS'
REPRESENTATIVE:
by: Residentie Participaties III CV
Address:
P.O. Box 1345
7301 BN Apeldoorn
Holland
Telephone:
Facsimile:
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