UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) March 31, 1998
DATASTREAM SYSTEMS, INC.
(Exact name of Registrant as specified in Its Charter)
DELAWARE 0-25590 57-0813674
(State of (Commission
(IRS Employer
Incorporation) File Number)
Identification No.)
50 DATASTREAM PLAZA, GREENVILLE, SC 29605
(Address of principle executive offices)
(Zip Code)
(Telephone number of registrant) (864) 422-5001
NOT APPLICABLE
(Former Name, Former Address and Former Fiscal Year, if changed since last
report)
<PAGE>
ITEM 5. OTHER EVENTS
On March 31, 1998, Datastream Systems, Inc., a Delaware
corporation (the "Registrant") entered into a Share Purchase Agreement to
acquire all the capital stock of Insta Instandhaltung Technischer Anlagen
GmbH, a German corporation headquartered in Munich, Germany ("Insta").
Insta, founded in 1979, is a leading European provider of computerized
maintenance management software which has developed a state-of-the-art
enterprise system, written in Visual C++, offering cross platform
capabilities that is available in 11 languages. In consideration of the
acquisition and pursuant to the Share Purchase Agreement, the Registrant
will deliver to the stockholders of Insta approximately seven million
dollars ($7,000,000), comprised off 130,435 shares of the Registrant's
Common Stock, $.01 par value per share (the "Common Stock"), and
approximately $4,375,000 in cash. The acquisition consideration to acquire
the business of Insta was determined as a result of arm's length
negotiations between unrelated parties. The Company used proceeds from its
initial public offering in April 1995 and its secondary offering in October
1995 to fund the acquisition.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
Not applicable.
(b) ProForma Financial Information.
Not applicable.
(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
Share Purchase Agreement, dated as of March 31, 1998, by and among
Datastream Systems, Inc., Yvette 97 Vermogensverwaltungs GmbH,
Insta and the stockholders of Insta listed on the signature
pages thereto.
Escrow Agreement, dated as of March 31, 1998, by and among Datastream
Systems, Inc., Yvette 97 Vermogensverwaltungs GmbH, the
stockholders of Insta listed on the signature pages thereto and
Dr. Dieter Mayer, as Escrow Agent.
<PAGE>
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 Insta, on March 31, 1998, the
Company issued 130,435 shares of its Common Stock to the Insta
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 each of whom are not a
"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 by 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 Insta
stockholders are subject to the restriction that they may not be traded
after the date of issuance until the expiration of the Regulation S holding
period 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
DATASTREAM SYSTEMS, INC.
Date: April 14, 1998 By: /s/ Daniel H. Christie
Daniel H. Christie
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
Share Purchase Agreement, dated as of March 31, 1998, by and among
Datastream Systems, Inc., Yvette 97 Vermogensverwaltungs GmbH,
Insta and the stockholders of Insta listed on the signature
pages thereto.
Escrow Agreement, dated as of March 31, 1998, by and among Datastream
Systems, Inc., Yvette 97 Vermogensverwaltungs GmbH, the
stockholders of Insta listed on the signature pages thereto and
Dr. Dieter Mayer, as Escrow Agent.
<PAGE>
SHARE PURCHASE AGREEMENT
by and among
DATASTREAM SYSTEMS, INC.
("Datastream"),
YVETTE 97 VERMOGENSVERWALTUNGS GMBH
("DSTM-GMBH"),
INSTA INSTANDHALTUNG TECHNISCHER ANLAGEN GMBH ("INSTA"),
and
THE STOCKHOLDERS OF INSTA INSTANDHALTUNG
TECHNISCHER ANLAGEN GMBH
LISTED ON THE SIGNATURE PAGES HERETO
(the "INSTA Stockholders")
DATED AS OF MARCH 31, 1998
<PAGE>
SHARE PURCHASE AGREEMENT
BY AND AMONG
DATASTREAM SYSTEMS, INC.,
YVETTE 97 VERMOGENSVERWALTUNGS GMBH,
INSTA INSTANDHALTUNG TECHNISCHER ANLAGEN GMBH
AND
THE STOCKHOLDERS OF INSTA INSTANDHALTUNG
TECHNISCHER ANLAGEN GMBH
LISTED ON THE SIGNATURE PAGES HERETO
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.............................................1
ARTICLE II SHARE PURCHASE...........................................7
2.1 Performance of Agreement......................................7
2.2 Sale and Purchase of INSTA Capital Stock......................7
ARTICLE III THE CLOSING..............................................8
3.1 Location, Time, Etc...........................................8
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE INSTA
STOCKHOLDERS.............................................8
4.1 Authorization, Etc............................................8
4.2 No Consent Required...........................................8
4.3 Litigation Relating to the Agreement..........................8
4.4 Other Claims..................................................8
4.5 U.S. Status..................................................8
4.6 Capitalization................................................9
4.7 Corporate Organization........................................9
4.8 Authority.....................................................9
4.9 Noncontravention..............................................9
4.10 Litigation...................................................10
4.11 Bankruptcy or Liquidation Proceedings........................10
4.12 Certain Contracts............................................10
4.13 Financial Statements.........................................12
4.14 No Other Changes.............................................12
4.15 Property.....................................................12
4.16 Permits......................................................13
4.17 No Illegal Acts..............................................13
4.18 Prior Issuances..............................................13
4.19 Taxes........................................................13
4.20 Intellectual Property........................................14
4.21 Product Warranty and Liability...............................15
4.22 Pension Matters..............................................15
4.23 Accounting Practices.........................................16
4.24 Labor and Employment Matters.................................16
4.25 Environmental Matters........................................17
4.26 Fees and Expenses............................................17
4.27 No Material Assets...........................................17
ARTICLE V REPRESENTATIONS AND WARRANTIES OF DATASTREAM AND SQL....18
5.1 Organization; Good Standing; Qualification and Power.........18
5.2 Authority....................................................18
5.3 Noncontravention.............................................18
5.4 SEC Documents................................................19
5.5 Capitalization...............................................19
5.6 No Calamities................................................19
5.7 No Changes...................................................19
5.8 Stock Issuance...............................................20
5.9 Financial Statements.........................................20
5.10 Internal Controls............................................20
ARTICLE VI ADDITIONAL COVENANTS AND AGREEMENTS.....................20
6.1 Nasdaq/NMS Listing...........................................20
6.2 Expenses.....................................................21
6.3 Agreement to Cooperate.......................................21
6.4 Public Statements............................................21
6.5 Release......................................................21
6.6 Amounts Payable By INSTA Stockholders........................21
6.7 Resale Restrictions..........................................21
6.8 Removal of Regulation S Legend...............................21
6.9 Real Estate..................................................22
6.10 Employees of INSTA...........................................22
6.11 KPMG Audit...................................................22
6.12 Guarantee of Performance.....................................22
6.13 Registration Rights..........................................22
ARTICLE VII SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND
INDEMNIFICATION.........................................23
7.1 Survival of Representations and Warranties...................23
7.2 Obligation of INSTA Stockholders to Indemnify................24
7.3 Obligations of Datastream to Indemnify.......................24
7.4 Conditions of Indemnification with Respect to Third
Party Claims.................................................24
7.5 Limitations on Liability.....................................25
7.6 Reduction for Certain Benefits...............................26
7.7 No Release for Fraud, Ownership Representations..............26
7.8 Subrogation Rights...........................................26
7.9 Establishment of Escrow; Indemnification Not Limited.........26
7.10 Interest.....................................................27
ARTICLE VIII STOCKHOLDERS' REPRESENTATIVE............................27
8.1 Appointment; Acceptance......................................27
8.2 Authority....................................................27
8.3 Actions......................................................28
8.4 Successors...................................................28
8.5 Effectiveness................................................28
8.6 Indemnification..............................................28
ARTICLE IX GENERAL PROVISIONS......................................29
9.1 Amendment....................................................29
9.2 Extension; Waiver............................................29
9.3 Entire Agreement.............................................29
9.4 Severability.................................................29
9.5 Notices......................................................29
9.6 Headings.....................................................31
9.7 Counterparts.................................................31
9.8 Benefits; Assignment.........................................31
9.9 Governing Law; Arbitration...................................31
9.10 Language of Agreement........................................32
9.11 Contractual Currency.........................................32
9.12 Agent for Service............................................32
9.13 Construction.................................................33
<PAGE>
SHARE PURCHASE AGREEMENT
BY AND AMONG
DATASTREAM SYSTEMS, INC.,
YVETTE 97 VERMOGENSVERWALTUNGS GMBH,
INSTA INSTANDHALTUNG TECHNISCHER ANLAGEN GMBH
AND
THE STOCKHOLDERS OF INSTA INSTANDHALTUNG
TECHNISCHER ANLAGEN GMBH
LISTED ON THE SIGNATURE PAGES HERETO
THIS SHARE PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of this 31st day of March, 1998, by and among Datastream Systems,
Inc., a Delaware corporation ("Datastream"), its wholly-owned subsidiary,
Yvette 97 Vermogensverwaltungs GMBH (its name to be changed as soon as
practicable after the Closing to "Datastream Systems GmbH"), a corporation
organized and existing under the laws of The Federal Republic of Germany
("DSTM-GMBH"), INSTA Instandhaltung Technischer Anlagen GmbH, a corporation
organized and existing under the laws of The Federal Republic of Germany
("INSTA"), and the stockholders of INSTA listed on the signature pages hereto
(hereinafter referred to individually as an "INSTA Stockholder" and
collectively as the "INSTA Stockholders").
The parties hereto have agreed that DSTM-GMBH will acquire INSTA by
purchasing all of the capital stock of INSTA from the INSTA Stockholders upon
the terms and conditions set forth herein (the "Transaction"). The Board of
Directors of Datastream and the respective Supervisory Boards of DSTM-GMBH
and INSTA 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, conditions and indemnities in
connection with the Transaction.
THEREFORE, in consideration of the mutual representations, warranties,
covenants, conditions and indemnities contained herein, the parties hereto
agree as follows:
ARTICLE I DEFINITIONS
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
Federal Republic of Germany means the Articles of Association of such
corporation, as amended through the date hereof.
<PAGE>
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 Munich, Germany.
1.4 "Cash Consideration" means DM 7,901,076.53, the aggregate amount
of cash to be delivered by DSTM-GMBH 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 VII 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 "Convertible Securities" means any option, warrant, convertible
note or debenture, right to purchase or other instrument or agreement
representing a right to purchase any capital stock or other equity interest
in INSTA.
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 "DSTM-GMBH" means Yvette 97 Vermogensverwaltungs GMBH, a
wholly-owned subsidiary of Datastream organized and existing under the laws
of The Federal Republic of Germany. As soon as practicable after Closing,
the corporate name of DSTM-GMBH will be changed to "Datastream Systems GmbH."
1.13 "Effective Time" means the date and time at which the Notarial
Deed is executed.
1.14 "Employment Agreements" mean the amended and restated employment
agreements to be executed by each of the INSTA Stockholders at Closing, which
agreements shall supersede all employment agreements between INSTA and any of
the INSTA Stockholders in effect on or before the Closing Date.
1.15 "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 presence,
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of any Hazardous Materials.
1.16 "Environmental Permits" means all permits, licenses, approvals,
consents, and authorizations relating to environmental matters or issued
under Environmental Laws.
<PAGE>
1.17 "Escrow Agent" means the escrow agent to be named under the
Escrow Agreement.
1.18 "Escrow Agreement" means the Escrow Agreement referred to in
Section 7.9 hereof.
1.19 "Escrow Shares" means 34,783 shares of Datastream Common Stock
(otherwise comprising a portion of the Stock Consideration) to be deposited
in escrow pursuant to the Escrow Agreement in the respective amounts for each
INSTA Stockholder set forth on Schedule 2.2.
1.20 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
1.21 "Financial Statements" means the balance sheet, statement of
operations and statement of stockholders' equity presented by INSTA, together
with related schedules and notes, as of and for the twelve-month periods
ended December 31, 1997, 1996 and 1995. The Financial Statements are
attached as Exhibit 1.21 hereto. The Financial Statements for the year ended
December 31, 1997 represent INSTA's preliminary results for such year.
Notwithstanding the preliminary nature of such results, Datastream and
DSTM-GMBH shall be entitled to rely thereon for purposes of this Agreement.
1.22 "Governmental Authority" means any court, administrative agency,
commission or other governmental authority or instrumentality, local, state
or federal, of any domestic or foreign government.
1.23 "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).
1.24 "IBA Agreement" means the agreement of IBA
Instandhaltungsberatung fur Anlagentechnik GMBH ("IBA"), Datastream,
DSTM-GMBH, INSTA and Herr Michael Hartmann, the sole stockholder of IBA, to
be entered into at Closing, which agreement, among other things, obligates
IBA to terminate its business and Herr Hartmann to dissolve the company.
1.25 "Indemnified Party" shall have the meaning ascribed to such term
in Section 7.4 hereof.
1.26 "Indemnifying Party" shall have the meaning ascribed to such term
in Section 7.4 hereof.
1.27 "INSTA" means INSTA Instandhaltung Technischer Anlagen GmbH, a
corporation organized and existing under the laws of The Federal Republic of
Germany. Unless the context otherwise indicates, the term "INSTA" as used
herein includes INSTA and any predecessors of INSTA.
<PAGE>
1.28 "INSTA Capital Stock" means the shares of common stock of INSTA,
which together represent all of the issued and outstanding shares of capital
stock of INSTA.
1.29 "INSTA Expenses" means all fees and expenses paid or incurred by
INSTA or the INSTA Stockholders in connection with the preparation for and
consummation of the transactions contemplated by this Agreement and the other
Transaction Documents, including, without limitation, all attorneys',
investment banking and other professional fees and expenses and brokers' or
finders' fees and expenses (including those of Wessing & Berenberg-Gossler)
for persons engaged by INSTA or the INSTA Stockholders (or claiming to be so
engaged), filing fees, travel expenses (if any) and other costs related to
the Transaction.
1.30 "INSTA Stockholders' Representative" shall have the meaning
ascribed to such term in Section 8.1 hereof.
1.31 "Intellectual Property" means all intellectual property and the
rights thereto, whether owned or used by INSTA or one of its Affiliates or
licensed from another party by INSTA or one of its Affiliates, whether
existing under the laws of The Federal Republic of Germany, 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; and
(e) 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.
1.32 "Law" or "Laws" means any federal, state, local, municipal,
foreign, international, multi-national or other judicial or administrative
order, judgment, injunction, decree, constitution, law, ordinance, common
law, rule, regulation, statute or treaty.
1.33 "Liability" means any and all direct or indirect demands, claims,
payments, obligations, recoveries, deficiencies, fines, penalties, interest,
assessments, actions, causes of action, suits, losses, liabilities, costs,
expenses (including without limitation, interest, penalties and reasonable
attorneys' fees and expenses, including attorneys' fees and expenses
necessary to enforce rights to indemnification hereunder, and consultant's or
arbitrator's fees and other costs of defense or investigation), and interest
on any amount payable as a result of the foregoing, whether accrued,
absolute, actual, contingent, known or unknown.
<PAGE>
1.34 "Lien" means any mortgage, charge, pledge, lien, claim, option,
right to acquire, right of conversion or other form of security or
encumbrance of any kind or nature whatsoever, on, over or affecting the
subject assets, property or securities.
1.35 "Material" or "material" means any event, change or effect
related to the condition (financial or otherwise), properties, assets,
liabilities, businesses, operations, results of operations or prospects of an
entity that a reasonable investor would deem to be important in deciding
whether or not to make or change an investment in such entity. No particular
amount of dollars or deutsche marks shall be dispositive of materiality.
1.36 "Material Adverse Effect" means a Material adverse effect on the
condition (financial or other), business, properties, net worth, results of
operations or prospects of a company and its Subsidiaries taken as a whole.
1.37 "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.
1.38 "Notarial Deed" means the Notarial Deed of Transfer substantially
in the form of Exhibit A hereto, by which the shares of INSTA Capital Stock
will be transferred, free and clear of any Liens, from the INSTA Stockholders
to DSTM-GMBH.
1.39 "Person" means a natural person, company, corporation,
partnership, government, or political subdivision, agency or instrumentality
of any domestic or foreign government.
1.40 "Products" shall have the meaning set forth in Section 4.20
hereof.
1.41 "Regulation S" means Regulation S and the rules thereunder
promulgated under the Securities Act of 1933, as amended.
1.42 "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.
1.43 "SEC" means the Securities and Exchange Commission.
<PAGE>
1.44 "SEC Documents" means Datastream's Annual Report on Form 10-K and
Annual Report to Stockholders for the fiscal year ended December 31, 1997
(draft dated March 30, 1998), Datastream's Proxy Statement for the 1997
Annual Meeting of Stockholders, and all other reports filed or required to be
filed by Datastream with the SEC subsequent to January 1, 1998 but prior to
the Effective Time.
1.45 "Securities Act" means the Securities Act of 1933, as amended.
1.46 "Stock Consideration" means 130,435 shares of Datastream Common
Stock (an amount which includes 34,783 Escrow Shares), the aggregate number
of shares of Datastream Common Stock to be delivered by DSTM-GMBH at the
Effective Time as set forth in Section 2.2 hereof. Subject to Section 6.8
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 Fund may also bear a legend
referencing this Agreement and the Escrow Agreement.
1.47 "Subsidiary," with respect to any entity, means another entity
the majority of the outstanding equity interests of which are owned, directly
or indirectly through one or more other Subsidiaries by the first entity,
together with any predecessor corporation of such majority-owned entity, if
any.
1.48 "Tax" or "Taxes" means with respect to any entity:
(a) all corporate 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), any tax (Steuern
und steurliche Nebenleistungen) within the meaning of Section 3 of the German
Tax Procedure Act (Abgabenordnung), and all sales, use, transfer, franchise,
license, withholding (Haftungssteuern), social security contributions
(Sozialversicherungsbeitrage), or cooperative contributions
(Genossenschaftsbeitrage), wage and payroll, employment, severance,
occupation, pension premium, V.A.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, as well as any
public investment grants (Investitionszulagen), premiums
(Investitionszuschusse) and subsidies (Subventionen); and
(b) any liability for the payment of any amount of the type
described in the immediately preceding paragraph (a) as a result of being a
"transferee" of another entity or a member of an affiliated or combined
group.
1.49 "Transaction Consideration" means the Cash Consideration and the
Stock Consideration payable by Datastream pursuant to Section 2.2 hereof.
The payment of the Transaction Consideration shall be made to the INSTA
Stockholders in the respective amounts set forth on Schedule 2.2.
1.50 "Transaction Documents" means this Agreement, the Employment
Agreements, the Escrow Agreement, the IBA Agreement and the Notarial Deed.
<PAGE>
ARTICLE II SHARE PURCHASE
SHARE PURCHASE
2.1 Performance of Agreement. Prior to the date hereof, the parties
hereto shall take all actions necessary in accordance with applicable 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
(or obtaining the written consent of the stockholders in lieu of a meeting if
permitted under applicable law) to consider and vote upon the approval of the
Transaction if such stockholder approval is required.
2.2 Sale and Purchase of INSTA Capital Stock. Each of the INSTA
Stockholders hereby sells all of the right, title and interest in and to the
INSTA Capital Stock owned by each of them, as set forth on Schedule 2.2
hereof, to DSTM-GMBH, and DSTM-GMBH hereby purchases all of such right, title
and interest in such shares of INSTA Capital Stock, as set forth on Schedule
2.2 hereof, subject to the terms and conditions hereof. Each outstanding
share of INSTA Capital Stock sold and purchased shall be transferred to
DSTM-GMBH, 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 A attached hereto, in consideration for DSTM-GMBH's
payment and delivery of the Transaction Consideration in respect of all such
shares. At Closing, in exchange for the INSTA Common Stock transferred to
DSTM-GMBH by each INSTA Stockholder, DSTM-GMBH shall, with respect to each of
the INSTA Stockholders, in the respective 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 INSTA Stockholders, (ii) deliver three guaranteed bank
checks, in the respective amounts of the Cash Consideration due to each INSTA
Stockholder as set forth on Schedule 2.2 hereof, drawn on the escrow account
of Oppenhoff & Radler and guaranteed by a German bank, and (iii) deliver the
Escrow Shares to the Escrow Agent. The transfer of the shares of Datastream
Common Stock representing the Stock Consideration shall occur upon delivery
of certificates representing such shares at Closing.
The nominal value of the shares of INSTA Capital Stock is as follows:
Ralf Bergerhoff one share of nominal DM 7.500
Thomas Nass one share of nominal DM 10.000
Michael Hartmann one share of nominal DM 1.500
one share of nominal DM 1.000
one share of nominal DM 5.000
one share of nominal DM 25.000
<PAGE>
ARTICLE III THE CLOSING
THE CLOSING
3.1 Location, Time, Etc. The Closing shall be held at the offices of
Oppenhoff & Radler, Prinzregentenplatz 10, 81675 Munich, Germany, on the
Closing Date commencing at 3:00 p.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 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 INSTA STOCKHOLDERS
REPRESENTATIONS AND WARRANTIES OF
THE INSTA STOCKHOLDERS
Each of the INSTA Stockholders hereby represents and warrants to
Datastream and DSTM-GMBH as follows (such representations and warranties to
be true and correct as of the Closing Date or as of any other specific date
set forth below as of which a particular statement is made):
4.1 Authorization, Etc. Such INSTA 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 INSTA Stockholder, enforceable against
such INSTA Stockholder in accordance with its terms. Such INSTA Stockholder
has irrevocably waived any pre-emptive rights or other rights of first
refusal applicable to the Transaction under German law or INSTA'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 INSTA 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. Neither INSTA nor any such
INSTA Stockholder is a party to, or subject to any judgment, 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 INSTA 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
(other than claims for accrued but not yet paid salary and reimbursable
expenses for the period from January 1, 1998 to the Closing Date) against
INSTA arising out of or in any way connected with any event, occurrence or
state of facts in existence prior to the Effective Time.
4.5 U.S. Status. Such INSTA Stockholder is not a "U.S. person" as
such term is defined in Section 902 of Regulation S. Such INSTA Stockholder
acknowledges that he, she or it has received and reviewed copies of
Datastream's SEC Documents. Within the 10 years preceding the Closing Date,
none of the capital stock of INSTA outstanding during such period has been
owned by a non-German person.
4.6 Capitalization.
(a) All of the authorized, issued and outstanding shares of
INSTA Capital Stock are set forth on Schedule 4.6. There are no other such
shares nor are there any Convertible Securities issued or outstanding. Each
INSTA Stockholder owns beneficially and of record all of the issued and
outstanding shares of INSTA Capital Stock (including all rights attached
thereto or associated therewith) as set forth opposite such INSTA
Stockholder's name on Schedule 4.6 and has legal and valid title to such
shares of INSTA 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 INSTA Capital Stock that have not been terminated, and (ii)
the shares of INSTA Capital Stock transferred by Notarial Deed pursuant to
Article II hereof will represent all of the issued and outstanding equity
capital of INSTA at such time. Except for the payment of management bonuses
for the year ended December 31, 1997 based on INSTA's preliminary results for
such year, since December 31, 1997, INSTA has not paid nor made provisions or
arrangements to pay, nor have the INSTA Stockholders approved or agreed to
distribute, any dividends or other distributions of the profits or share
capital of INSTA, or otherwise made any change or adjustment to the
stockholders' equity of INSTA.
(b) INSTA has no Subsidiaries and owns 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. INSTA has been duly incorporated and is
validly existing and duly registered under the laws of The Federal Republic
of Germany, 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. INSTA 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 INSTA; 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. INSTA 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 INSTA and the
consummation by INSTA of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the part of
INSTA. This Agreement and each other Transaction Document has been duly
executed and delivered by INSTA 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 INSTA enforceable in accordance with its
terms.
4.9 Noncontravention. The execution, delivery and performance by
INSTA and each INSTA Stockholder of this Agreement and each other Transaction
Document to which INSTA or any such INSTA Stockholder is a party, the
consummation of the transactions contemplated hereby and thereby, and the
compliance by INSTA and each such INSTA Stockholder with the provisions
hereof and thereof will not:
(a) except as set forth in Schedule 4.9(a), conflict with,
result in a violation of, result in a breach of, or cause a material 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 the loss of any material benefit under, or
require the consent or approval of any party to, or result in the creation of
any material Lien upon any of the properties or assets of INSTA 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 INSTA, any INSTA Stockholder or any of their
respective properties or assets;
(b) violate any provision of the Articles of Association of
INSTA; or
(c) require the consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Authority to be
obtained by INSTA 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.
4.10 Litigation. Except as set forth on Schedule 4.10 hereto, there
are no legal, governmental or arbitration proceedings pending or, to the
knowledge of the INSTA Stockholders, threatened against INSTA or to which
INSTA or any property owned or leased by INSTA is subject, that would
reasonably be expected to have a Material Adverse Effect on INSTA.
4.11 Bankruptcy or Liquidation Proceedings. There are no bankruptcy
or liquidation proceedings pending against INSTA or, to the knowledge of the
INSTA Stockholders, threatened against INSTA. INSTA has not incurred any
Liability as a managing director of any Company subjected to bankruptcy
proceedings or engaged in a suspension of payments.
4.12 Certain Contracts
(a) Except as set forth on Schedule 4.12(a) hereto, INSTA is
not a party to any written or oral, formal or informal agreement or
understanding (without regard to specifying in such schedule which of the
following categories such agreement falls into):
<PAGE>
(i) Joint venture contract, royalty arrangement or other
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
or other agreement, arrangement or commitment for the borrowing
or lending of money;
(iii) Agreement or commitment made by INSTA to guaranty or
provide suretyship or to otherwise be contingently liable or
responsible for the obligations of persons other than INSTA
(exclusive of INSTA's obligations under warranties given with
respect to its Products);
(iv) Lease or other agreement under which INSTA is lessor
of, lessee of, or holds or operates any items of tangible
personal property or real property owned by any third party;
(v) Agreement, license, franchise, permit, indenture or
authorization, which either calls for performance over a period
of more than one (1) year and payment to or from INSTA in an
amount in excess of Fifty Thousand Dollars ($50,000.00) per
annum; or
(vi) Agreement that restricts INSTA 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 Schedule 4.12(b), there are no
distribution contracts (including, without limitation, all OEM and end-user
contracts) to which INSTA or any of its Subsidiaries is a party which grant
any exclusive right of any kind to any party.
(c) Attached hereto as Schedule 4.12(c) is a true, correct and
complete list of all software development agreements to which INSTA is a
party or beneficiary. Except for the agreements set forth on Schedule
4.12(c), INSTA is not a party to any software development agreement that does
not provide for the assignment to INSTA of title to any technology,
development work or other products developed by any other party for INSTA.
Except for the agreements set forth on Schedule 4.12(c), INSTA is not a party
to any software development agreement that 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 INSTA.
(d) Except as set forth on Schedule 4.12 (d), INSTA has not
granted any source code licenses or established any source code escrow
arrangements with respect to any of its Products, other than any such
licenses or arrangements entered into in the ordinary course of business or
any such licenses or arrangements that require INSTA to continually maintain
a current copy of the source code for any such Product in any such escrow
arrangement.
(e) Except as set forth on Schedule 4.12(e), neither INSTA nor,
to the knowledge of the INSTA Stockholders, any other party is in default
under any agreement set forth on any schedule delivered pursuant to this
Section 4.12, nor under any other agreement to which INSTA is a party, if
such default would reasonably be expected to have a Material Adverse Effect
on INSTA.
<PAGE>
4.13 Financial Statements. The Financial Statements present fairly
the consolidated financial condition, results of operations and cash flows of
INSTA at the respective dates or for the respective periods covered thereby,
and the Financial Statements have been prepared in accordance with generally
accepted German accounting principles consistently applied throughout the
periods involved. Except as set forth in the Financial Statements, including
the notes thereto, or in any schedule hereto, neither INSTA nor any of its
Subsidiaries has any other Material Liability. All reserves established by
INSTA in the Financial Statements are adequate for all known Liabilities and
reasonably anticipated Liabilities. The account balances included in the
Financial Statements in respect of receivables, liabilities and stockholders'
equity were, as of the respective dates of such Financial Statements,
accurate and complete in all Material respects; provided, that, the INSTA
Stockholders shall not be liable under this Agreement in respect of any
adjustments to INSTA's balance sheet as of December 31, 1997 unless
stockholders' equity as of that date is determined to have been less than DM
674,000, and, as provided in Section 7.5 (a), there shall be no Minimum
Aggregate Liability Amount with respect to the representations set forth in
this section 4.13 or any balance sheet adjustments related thereto. Except
as set forth on Schedule 4.13, such respective amounts set forth in the
Financial Statements for the year ended December 31, 1997 have not materially
changed since December 31, 1997.
4.14 No Other Changes. Since December 31, 1997, INSTA has conducted
its business only in the ordinary course and there has not occurred any
transaction, condition (financial or otherwise) of any character, event or
change (including the incurrence of any liabilities, whether accrued,
contingent or otherwise) that would reasonably be expected to have, a
Material Adverse Effect on INSTA. INSTA is not delinquent in any material
payment of principal or interest on any outstanding debt or other obligation
(except with respect to obligations arising in the ordinary course of
business). In particular, since December 31, 1997, INSTA has not
(a) incurred any indebtedness (other than trade debt incurred in the ordinary
course of business) or guaranteed any obligations of others or made any loans
or advances to, or investments in, any other person or entity, (b) made any
capital investments in excess of DM 500,000, (c) changed any accounting
policy or procedure or failed to maintain its books, accounts and records
other than in the ordinary manner, consistent with prior years and in
accordance with sound commercial practice, (d) made any significant change to
the employment compensation of any of its key employees or (e) made any
agreement to do any of the foregoing.
4.15 Property. Except as set forth on Schedule 4.15 attached hereto,
INSTA does not own any material real property. INSTA has full legal title to
all properties and assets reflected as owned by it in the Financial
Statements, free and clear of any Lien except those which are described in
the Financial Statements, or that are not Material to INSTA 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 INSTA; all the property (real and
personal) held or used by INSTA 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 INSTA and which do not interfere in any Material respect with the
use of the property or the conduct of the business of INSTA.
<PAGE>
4.16 Permits. INSTA has obtained and holds, and is in compliance
with, all permits, licenses, franchises, approvals, consents and
authorizations of all Governmental Authorities required under all laws, rules
and regulations in connection with its 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; and INSTA 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.
4.17 No Illegal Acts. INSTA is presently in compliance with all laws,
orders, rules and regulations applicable to, required of or binding upon it
or its business, and INSTA has not received any notice from any Governmental
Authority with respect to any failure or alleged failure of INSTA to comply
with any such law, order, rule or regulation, nor, to the knowledge of the
Stockholders of INSTA, are any such notices proposed or threatened.
4.18 Prior Issuances. All offers and sales of the capital stock or
Convertible Securities of INSTA prior to the date hereof and all cash
payments or distributions of the capital stock of INSTA as dividends were
made in compliance with the corporate and securities laws of The Federal
Republic of Germany and all other applicable Laws, and were not made in
contravention of any pre-emptive or other rights of first refusal under
German or other applicable Law or such entity's Articles of Association.
4.19 Taxes.
(a) All applicable Tax returns and reports which have been
required to be filed by or on behalf of INSTA with respect to all periods
ended on or before the Effective Time 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. There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any Tax return or report for any
period. No disputes exist with any Governmental Authority concerning the Tax
position of INSTA, nor is there any reasonable basis for any such dispute.
(b) INSTA has paid all Taxes due, or made sufficient accruals
in its financial accounts for the payment of all Taxes, relating to all
periods up to and including the Closing Date. In particular, with respect to
all periods up to and including the Closing Date, there is no basis for the
assessment of any Taxes due to hidden profit distributions (verdeckte
Gewinnausschuttungen) to stockholders of INSTA or companies or individuals
related to or affiliated with stockholders of INSTA (nahestehende Personen).
(c) No Taxes (in particular, no corporate income taxes) are or
will be due from INSTA resulting from (a breach of) a fiscal unity or similar
tax structure of which INSTA is a part, as a result of this Agreement, the
Transaction or any Transaction Document.
<PAGE>
4.20 Intellectual Property.
(a) Schedule 4.20(a) sets forth a true, complete and correct
list of the products developed, marketed or sold by INSTA which INSTA is
currently maintaining or supporting ("Products").
(b) Schedule 4.20(b) sets forth an accurate statement
summarizing all Intellectual Property that INSTA uses in its business
(exclusive of licenses of Intellectual Property of others if such licenses
represent routine arrangements with respect to the conduct by INSTA of its
business and do not involve license or royalty payments that exceeded DM
50,000 in the year ended December 31, 1997). INSTA has all intellectual
property rights necessary or materially useful to the development,
manufacture, license, sale, distribution, purchase and use of the Products
and the successful conduct of its business. To the extent INSTA claims to
own such Products or Intellectual Property, INSTA owns all right, title and
interest in and to the Products and the Intellectual Property related
thereto, free and clear of any Lien of any kind or nature whatsoever,
including without limitation any exclusive right, however described, granted
to parties other than INSTA with respect to the Products and other
Intellectual Property. To the extent INSTA claims to be licensed to use such
Products or Intellectual Property, INSTA has a valid and enforceable license
for the purposes for which it uses such Products or Intellectual Property.
(c) To the knowledge of each of the INSTA Stockholders, INSTA
has not (nor has any Product developed, manufactured, licensed, sold or
distributed by INSTA) 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 or
intellectual property right of any third party.
(d) INSTA has taken all customary 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. INSTA has not 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 INSTA.
(e) INSTA has entered into agreements with each of its present
and past employees and each of its past and present independent contractor
software developers pursuant to which such employees or contractors have
disclaimed any copyright or other intellectual property rights in the
Products and the Intellectual Property and have duly assigned to INSTA, all
such copyrights and other intellectual property rights. INSTA has not
received notice, orally or in writing, that any other Person claims any
interest in any Products or Intellectual Property of INSTA, nor , to the best
knowledge of the INSTA Stockholders, 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.
<PAGE>
4.21 Product 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 INSTA in
connection with such Product, except to the extent that the liability of
INSTA for non-conformity or for repair and replacement in the aggregate does
not exceed any warranty reserves maintained in the Financial Statements.
(b) INSTA has incurred no liability arising out of any injury
to persons or property (and, to the best knowledge of the INSTA Stockholders,
there is no basis for any present or future claim, complaint, action, suit,
proceeding, hearing, investigation, claim or demand against INSTA arising out
of any such injury) as a result of the use of the Products.
(c) Except as set forth on Schedule 4.21, all Products (i) are
designed (or have been modified) to be used prior to and after January 1,
2000; (ii) will operate without material error arising from the creation,
recognition, acceptance, calculation, display, storage, retrieval, accessing,
comparison, sorting, manipulation, processing or other use of dates or
date-based, date-dependent or date-related data, including but not limited to
century recognition, day-of-the-week recognition, leap year, date values and
interfaces or date functionalities; and (iii) will not be materially
adversely affected by the advent of the year 2000, the advent of the year
2001, the advent of the twenty-first century or the transition from the
twentieth century through the year 2000 and into the twenty-first century.
Except as set forth on Schedule 4.21, all design architectures and
functionalities of all Products are, in all material respects, compatible
with and, when operated in, on or in conjunction with, any other system, will
not cause such Products to fail to satisfy the criteria set forth above.
4.22 Pension Matters.
(a) Except as set forth in Schedule 4.22(a), INSTA is not a
party to or does not make or is not 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 (exclusive of commission arrangements).
(b) As of the Closing Date, there are no actual, accrued or
contingent pension liabilities not adequately reserved for in INSTA's
financial accounts. Except as set forth on Schedule 4.22(b), since the date
of the most recent balance sheet included in the Financial Statements, INSTA
has not made any pension undertaking with respect to employees who have been
employed after that date.
(c) All due contributions and expenses (including premiums,
actuarial, trusteeship, consultancy, legal, audit and administrative
expenses) in respect of any of the pension plans or arrangements maintained
by INSTA 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 Effective Time, and, to the best knowledge of each
of the INSTA Stockholders, 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 INSTA who is also a director or employee of INSTA
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.
<PAGE>
(d) All of the above-described pension plans and arrangements
of INSTA 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
Law. No claims have been made or threatened against INSTA or the
administrators of such pension plans or arrangements or against any person
whom INSTA is 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.
4.23 Accounting Practices. INSTA's corporate operations are conducted
in such a manner to provide reasonable assurances that funds are spent in
accordance with management's authorization, transactions are recorded
properly with regard to German accounting principles, assets of INSTA are
adequately protected, and there is a periodic review of INSTA's monthly
financial statements to ensure they reflect the actual position of INSTA.
4.24 Labor and Employment Matters.
(a) Schedule 4.24(a) sets forth the names, date of commencement
of employment or appointment to office and terms and conditions of employment
of all employees and consultants of INSTA whom INSTA compensates in excess of
DM 25,000 per year. Except as set forth on Schedule 4.24(a), no benefits in
kind or other perquisites are payable to or are provided to any such person.
(b) INSTA has no liability or obligation arising from
agreements or arrangements with consultants which are subject to
requalification or recharacterization as employment agreements as to which
INSTA should have acted as a withholding agent under applicable Law.
(c) Except as set forth in Schedule 4.24(a) or except with
respect to the month in which this Agreement is entered into, there are no
salaries, wages, holiday pay, social security payments or other remuneration
owed, as of the date hereof, to or in respect of any director, executive,
consultant or employee of INSTA.
(d) Except for commissions to be paid in the ordinary course of
INSTA's business consistent with past practice, INSTA is not obligated
contractually or otherwise to make any bonus, incentive or other similar
payments to any of its directors, executives, consultants or employees (other
than routine payments made in a manner consistent with past practice) or to
increase the rate of remuneration of or improve any benefits in kind to any
such Person (other than routine payments made in a manner consistent with
past practice).
<PAGE>
(e) Except as set forth on Schedule 4.24(e), there are no
schemes, agreements or plans in operation by or in relation to INSTA under
which any of its directors, executives, consultants or employees is entitled
to any shares of INSTA Capital Stock (or any other Convertible Security or
other equity interest in INSTA).
(f) INSTA does not have 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 INSTA, nor is INSTA in breach of any legislation in
relation to works councils. INSTA has not experienced any material slowdown,
work interruption, work stoppage or strike by any of their employees, nor (to
the knowledge of INSTA and the INSTA Stockholders) is any such action
presently threatened or contemplated.
(g) No past or present director, executive, employee or
consultant has any claim against INSTA for loss of office, arising out of the
termination of his office or employment (including any severance redundancy
payment) and there is no event that would reasonably be expected to give rise
to any such claim. INSTA has not 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.
(h) Except as set forth on Schedule 4.24(h), INSTA has not 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.
4.25 Environmental Matters. INSTA 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
INSTA or any asset used in such business or any violation or alleged
violation of any applicable Environmental Laws.
4.26 Fees and Expenses. INSTA 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. Following
the Closing Date, none of INSTA, DSTM-GMBH nor Datastream will be obligated
to pay any fee, commission or expense in connection with the transactions
contemplated by this Agreement.
4.27 No Material Assets. The shares of INSTA Capital Stock sold
hereunder do not constitute all or nearly all of the assets of any of the
INSTA Stockholders in the sense of Sec. 419, 1365 German Civil Code.
<PAGE>
ARTICLE V REPRESENTATIONS AND WARRANTIES OF DATASTREAM AND SQL
REPRESENTATIONS AND WARRANTIES
OF DATASTREAM AND DSTM-GMBH
Each of Datastream and DSTM-GMBH hereby represents and warrants to the
INSTA Stockholders as follows (such representations and warranties to be true
and correct as of the Closing Date or as of any other specific date set forth
below as of which a particular statement is made):
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. DSTM-GMBH is a corporation duly organized,
validly existing and in good standing under the laws of the Federal Republic
of Germany 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 (including DSTM-GMBH) 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. Each of Datastream and DSTM-GMBH 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, and the execution and delivery of this Agreement and each
other Transaction Document to which it is a party by Datastream and DSTM-GMBH
and the consummation by Datastream and DSTM-GMBH of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of Datastream and DSTM-GMBH, respectively. This
Agreement and each other Transaction Document to which Datastream and
DSTM-GMBH is a party has been duly executed and delivered by Datastream and
DSTM-GMBH 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 and DSTM-GMBH is a party
constitutes the valid and binding agreement of Datastream and DSTM-GMBH,
respectively, enforceable in accordance with its terms.
5.3 Noncontravention. The execution, delivery and performance by
Datastream and DSTM-GMBH of this Agreement and each other Transaction
Document to which Datastream and DSTM-GMBH is a party, the consummation of
the transactions contemplated hereby and thereby, and compliance by
Datastream and DSTM-GMBH with the provisions hereof and thereof, will not:
<PAGE>
(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 the loss of any Material
benefit under, or require the consent or approval of any party to, or result
in the creation of any Lien upon, any of the Material properties or assets of
Datastream or any of its Subsidiaries (including DSTM-GMBH) 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, judgment, 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, liens, security interests, charges or encumbrances 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 the Articles of Association of DSTM-GMBH; or
(c) require the consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Authority to be
obtained by Datastream or DSTM-GMBH 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 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 pre-emptive, 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 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 past practice) 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 notarial transfer of the shares of INSTA Capital Stock as
provided herein, will be validly issued and 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 INSTA 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. Under
Regulation S, each INSTA Stockholder is required to hold such shares for a
period of at least one year. After such time, such person would (in most
instances anyway, i.e., assuming such person is not engaged in a
"distribution" of such shares prohibited under the Securities Act) be
entitled to removal of the Regulation S legend on the certificate
representing such shares, which will facilitate the trading of such shares on
any stock market or exchange on which the Datastream Common Stock is then
listed.
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 condition, results of
operations and cash flows of Datastream and its Subsidiaries, on a
consolidated basis, at the dates and for the periods presented.
5.10 Internal Controls. Datastream and each of its Subsidiaries
maintains internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
authorization, (ii) transactions are recorded as necessary to permit
preparation of Datastream's consolidated financial statements in accordance
with generally accepted U.S. accounting principles and to maintain
accountability for the assets of Datastream, (iii) access to the assets of
Datastream and each of its Subsidiaries is permitted only in accordance with
management's authorization, and (iv) the recorded accountability for assets
of Datastream and each of its Subsidiaries is compared with existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences.
ARTICLE VI ADDITIONAL COVENANTS AND AGREEMENTS
ADDITIONAL COVENANTS AND AGREEMENTS
6.1 Nasdaq/NMS Listing. Datastream shall use its best efforts to
effect, at or before the Effective Time, authorization for listing on the
Nasdaq/NMS, upon official notice of issuance, of the additional shares of
Datastream Common Stock to be issued pursuant to the Transaction.
<PAGE>
6.2 Expenses. Whether or not the Transaction is consummated, all
costs and expenses incurred in connection with this Agreement and the other
Transaction Documents and the transactions contemplated hereby and thereby
shall be paid by the party incurring such expenses. In particular, the INSTA
Stockholders shall be responsible for the INSTA Expenses, and the INSTA
Stockholders hereby jointly and severally agree to hold INSTA harmless
therefrom without regard to the limitations of liability set forth in
Sections 7.2, 7.5(a) and 7.5(b) hereof. The term "INSTA Expenses" shall not
include the expenses of the Notary with respect to this Transaction, which
shall be borne by Datastream.
6.3 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 Law to consummate and make
effective the transactions contemplated by this Agreement and the other
Transaction Documents, including using its best efforts to obtain all
necessary or appropriate governmental and third-party waivers, consents and
approvals.
6.4 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 applicable Law or Datastream's listing agreement with the
Nasdaq/NMS.
6.5 Release. Except for claims for accrued but not yet paid salary
and reimbursable expenses specifically reserved parenthetically in Section
4.4 hereof, each of the INSTA Stockholders does hereby release and forever
discharge INSTA, its officers and directors and each of the other INSTA
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, in law or in
equity, that such INSTA Stockholder has had, now has or may hereafter have.
6.6 Amounts Payable By INSTA Stockholders. Promptly upon request
from Datastream, and in any event within 20 business days following the
Closing Date, each INSTA Stockholder who shall owe any indebtedness to INSTA
(or any Affiliate of INSTA) or whose Affiliate shall owe any indebtedness to
INSTA (or any Affiliate of INSTA) shall repay any such amounts to INSTA in
full.
6.7 Resale Restrictions. Each INSTA Stockholder agrees not to
resell or cause the resale of the Datastream Common Stock received by such
INSTA 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 one year
after the Closing Date.
6.8 Removal of Regulation S Legend. Upon the expiration of the
one-year restricted period under Regulation S and upon the request of any
INSTA Stockholder, Datastream shall either 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.
<PAGE>
6.9 Real Estate. It is apparent that the lease obligations of INSTA
with respect to its Munich facilities may be somewhat unclear vis-a-vis the
lease obligations of IBA with respect to such facilities. Herr Hartmann, as
the sole stockholder of IBA, hereby agrees to use all possible efforts, as
soon as practicable, to clarify and resolve any and all such leasing issues
with the desired results being that (a) INSTA is the obligor on leases only
with respect to properties actually used by INSTA, (b) IBA, and not INSTA, is
the obligor on leases with respect to properties actually used by IBA,
(c) the purposes for which facilities actively or constructively leased by
INSTA are used are consistent with all zoning regulations for such facilities
and other applicable Law such that INSTA's continued peaceful enjoyment of
such facilities is not jeopardized and (d) there are no subleases outstanding
to which INSTA is a party that allow the subtenant to have a rental period
that expires after the expiration date of the underlying lease. The INSTA
Stockholders shall jointly and severally indemnify and hold INSTA, DSTM-GMBH
and Datastream harmless from and against any losses, claims, damages or
expenses (including reasonable attorney's fees) suffered by any of them as a
result of the failure of INSTA and IBA to maintain these leases in a manner
consistent with the foregoing, and such indemnification shall be outside of
the scope of, and without regard to, the limitations of liability set forth
in Sections 7.2, 7.5(a) and 7.5(b) hereof.
6.10 Employees of INSTA. DSTM-GMBH covenants to the INSTA
Stockholders that DSTM-GMBH will not, on or before the first anniversary of
the Closing Date, effect mass employee terminations, and will otherwise use
its best efforts to maintain good relations with the existing employee base
of INSTA. For a period of six months after the Closing Date, employee
terminations of the employment of any employee other than one of the INSTA
Stockholders shall only be made with the consent of Herr Hartmann, which
shall not be unreasonably withheld, and the employee termination of the
employment of any of the INSTA Stockholders will only be effected in
accordance with the Employment Agreement of each such stockholder.
6.11 KPMG Audit. The balance sheet of INSTA for the year ended
December 31, 1997 and the financial operating results of INSTA for the
three months ended March 31, 1998 shall be audited by Datastream's
independent public accountants, KPMG Peat Marwick, after the Closing. It
is Datastream's intention to complete such audit on or before May 15,
1998. The INSTA Stockholders acknowledge that the results of such audit
may form the basis of a Claim for indemnification hereunder, to the extent
such audit reveals that the representations and warranties of the INSTA
Stockholders made pursuant to this Agreement were inaccurate as of the
Closing Date or any other specific date as of which any particular
representation or warranty was made.
6.12 Guarantee of Performance. Datastream guarantees the performance
by DSTM-GMBH of each and every representation, warrant, covenant or other
agreement of DSTM-GMBH given hereunder.
6.13 Registration Rights. If the shares of Datastream Common Stock
comprising the Stock Consideration (exclusive of the Excrow Shares) are not
tradeable in the United States after a period of 40 days following the
Closing Date (or after 18 months with respect to the Escrow Shares), then
Datastream shall provide to the INSTA Stockholders (i) incidental (or
"piggyback") registration rights to have all of the shares comprising the
Stock Consideration (exclusive of the Escrow Shares) included in any public
registration of shares of Datastream Common Stock with the Securities and
Exchange Commission ("SEC") effected on or before the first anniversary of
the Closing Date, subject to compliance with applicable SEC requirements,
the ability of Datastream to include such shares on the form proposed for
such registration and the agreement of the INSTA Stockholders to be bound
by the terms of any customary underwriting agreement relating to such
registration, or (ii) to the extent such incidental rights set forth in
item (i) above are not exercised or are exercised only with respect to a
portion of the shares comprising the Stock Consideration (exclusive of the
Escrow Shares) or the INSTA Stockholders are not afforded the opportunity
to exercise such rights, one demand registration right with respect to any
such remaining shares (exclusive of the Escrow Shares), exercisable one
time on or before the first anniversary of the Closing Date (or, with
respect to the Escrow Shares, on or before the 18 months anniversary of the
Closing Date), subject to compliance with applicable SEC requirements and
subject to a minimum of 50,000 such shares being included in such
registration. The customary expenses of such registration (other than
underwriting discounts and selling commissions, which shall be paid by the
INSTA Stockholders) shall be paid by Datastream. The INSTA Stockholders
must exercise their demand registration rights collectively, acting through
the INSTA Stockholders' Representative.
ARTICLE VII SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATION
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES AND INDEMNIFICATION
7.1 Survival of Representations and Warranties.
(a) All representations, warranties, agreements, covenants and
obligations made or undertaken by INSTA or any of the INSTA Stockholders in
this Agreement are Material, have been relied upon by DSTM-GMBH and
Datastream and shall survive the Closing hereunder, and shall not merge in
the performance of any obligation by any party hereto. Each of INSTA and the
INSTA Stockholders acknowledge and agree that prior to the Effective Time,
Datastream and DSTM-GMBH intend to perform such investigation of INSTA as
they may deem necessary or appropriate; however, no investigation by
Datastream and DSTM-GMBH, 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 INSTA or the INSTA Stockholders
pursuant to this Agreement, and all other agreements referred to herein, or
the right of Datastream or DSTM-GMBH 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 are Material,
have been relied upon by INSTA and the INSTA Stockholders, and shall survive
the Closing hereunder, and shall not merge in the performance of any
obligation by any party hereto. Datastream and DSTM-GMBH acknowledge and
agree that prior to the Effective Time, INSTA and the INSTA Stockholders
intend to perform such investigation of Datastream and DSTM-GMBH as they each
deem necessary or appropriate; however, no investigation by INSTA or the
INSTA 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 or DSTM-GMBH pursuant to this Agreement
and all other agreements referred to herein, or the INSTA Stockholders' right
to rely upon such representations, warranties, covenants and agreements.
<PAGE>
7.2 Obligation of INSTA Stockholders to Indemnify. Subject to the
limitations of Section 7.5, each of the INSTA Stockholders severally agrees
(in the respective proportions set forth in the fifth column of Schedule 2.2)
to indemnify and hold Datastream and DSTM-GMBH harmless from and against all
Liabilities asserted against, imposed upon or incurred by Datastream or
DSTM-GMBH by reason of or resulting from (a) a breach of any representation
or warranty of any INSTA Stockholder contained in or made pursuant to this
Agreement, or (b) a breach of any covenant or agreement of INSTA or any INSTA
Stockholder contained in or made pursuant to this Agreement. The INSTA
Stockholders acknowledge that from and after the Effective Time, INSTA will
be owned by DSTM-GMBH, and the INSTA Stockholders therefore agree that any
recovery against INSTA by DSTM-GMBH after Closing will be against the INSTA
Stockholders, who will have no rights of reimbursement or contribution
against INSTA.
7.3 Obligations of Datastream to Indemnify. Subject to the
limitations of Section 7.5(b) and Section 7.5(d) hereof, each of Datastream
and DSTM-GMBH severally agrees to indemnify and hold the INSTA Stockholders
harmless from and against all Liabilities asserted against, imposed upon or
incurred by the INSTA Stockholders by reason of or resulting from (a) a
breach of any representation or warranty of Datastream or DSTM-GMBH contained
in or made pursuant to this Agreement, or (b) a breach of any covenant or
agreement of Datastream or DSTM-GMBH contained in or made pursuant to this
Agreement.
7.4 Conditions of Indemnification with Respect to Third Party
Claims. Each party indemnified (the "Indemnified Party") under the
provisions of Sections 7.2 or 7.3 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 Sections 7.2 or 7.3
hereof, shall 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 and DSTM-GMBH, on the one hand, and the INSTA
Stockholders (collectively) and as represented by the INSTA Stockholders'
Representative, on the other hand. Each Indemnified Party shall cooperate
with each Indemnifying Party in making available all documentation reasonably
necessary for the Indemnifying Party to effectively defend any Claim.
<PAGE>
7.5 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 such Claims of such Indemnified Party, shall exceed DM 200,000
(the "Minimum Aggregate Liability Amount"), at which time Claims may be
asserted for the Minimum Aggregate Liability Amount and any amount in excess
thereof; 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; and provided
further, however, that, notwithstanding any other provision of this Agreement
to the contrary, there shall be no Minimum Aggregate Liability Amount with
respect to the representations set forth in Section 4.13 or any balance sheet
adjustments related thereto.
(b) Depending on the basis of a Claim hereunder (as set forth
in column 1 below), Claims arising under this Agreement shall expire
(i) unless proper notice of indemnification shall have been made on or before
the respective dates set forth in column 2 below (the "Claims Made Date") and
(ii) notwithstanding the timely making of a notice of indemnification with
respect to such Claim, unless there is a pending arbitration matter with
respect to such Claim, as of the respective dates set forth in column 3 below
(the "Arbitration Date"):
1 2 3
Claims Made Arbitration
Type of Claim Date Date
------------- ---- ----
A. Any Claim made under this October 15, 1999 April 15, 2000
Agreement other than (x) a
Claim under Section 4.19, (y)
a Claim under Section 4.21(c)
or (z) a Claim arising from
the fraud, willful
concealment or intentional
breach of any provision of
this Agreement.
B. Any Claim made under Section six months after the final assessment of
4.19. the relevant tax authority with respect
to such taxes or the expiration of the
statute of limitations with regard to the
assessment of such taxes, whichever
occurs earlier
C. Any Claim made under Section July 15, 2000 January 15, 2001
4.21(c).
D. Any Claim arising from E. April 15, 2001 October 15, 2001
fraud, willful concealment or
intentional breach of any
provision of this Agreement.
(c) Except as set forth in Section 7.7 hereof, (i) the
aggregate Liability for Claims of indemnification against the INSTA
Stockholders under this Agreement shall not exceed DM 9,625,291.50 and
(ii) the respective indemnification obligations as to such aggregate
Liability obligation of each INSTA Stockholder are as set forth in the last
column of Schedule 2.2.
(d) The aggregate Liability for Claims against INSTA, DSTM-GMBH
and Datastream hereunder shall not exceed DM 12,833,722.00.
<PAGE>
7.6 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 to the Indemnified 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.
7.7 No Release for Fraud, Ownership Representations. Notwithstanding
anything contained herein to the contrary, nothing contained in this
Agreement shall relieve any INSTA 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 INSTA 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 or willful concealment or intentional breach in
connection with the transactions contemplated by this Agreement or in
connection with the delivery of any certificate required to be delivered
under the terms hereof or of any other Transaction Document.
7.8 Subrogation Rights. In the event that an Indemnifying Party
shall be obligated to indemnify an Indemnified Party pursuant to this
Article VII, 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 VII in connection with such Claim and
provided further that no INSTA Stockholder shall have any subrogation rights
against INSTA.
7.9 Establishment of Escrow; Indemnification Not Limited.
<PAGE>
(a) At the Effective Time, DSTM-GMBH 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.
7.10 Interest. 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 judgment as before) at a rate
of 6.0% per annum.
ARTICLE VIII STOCKHOLDERS' REPRESENTATIVE
STOCKHOLDERS' REPRESENTATIVE
8.1 Appointment; Acceptance. By executing this Agreement, each of
the INSTA Stockholders hereby irrevocably constitutes and appoints Herr
Michael Hartmann and his 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 "INSTA
Stockholders' Representative"), and acknowledges that such appointment is
coupled with an interest. By executing and delivering this Agreement in such
capacity, Herr Hartmann hereby (i) accepts his appointment and authorization
to act as the INSTA Stockholders' Representative, as attorney-in-fact and
agent on behalf of the INSTA Stockholders in accordance with the terms of
this Agreement, and (ii) agrees to perform his obligations under, and
otherwise comply with, this Article VIII.
8.2 Authority.
(a) Each of the INSTA Stockholders authorizes the INSTA
Stockholders' Representative:
(i) to dispute or to refrain from disputing any claim
made by Datastream or DSTM-GMBH under this Agreement and the other
agreements, instruments and documents to be delivered by or on behalf of the
INSTA 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 INSTA Stockholders pursuant to this
Agreement and to sign any releases or other documents with respect to such
dispute or remedy;
(iii) to give such instructions and to do such other things
and refrain from doing such other things as the INSTA 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 INSTA Stockholders pursuant
to this Agreement; and
(iv) to enter into amendments of this Agreement and
execute instruments in writing to reflect such amendments pursuant to Section
9.1 hereof.
<PAGE>
(b) Each of the INSTA Stockholders agrees to be irrevocably
bound by all agreements and determinations made by and documents executed and
delivered by the INSTA Stockholders' Representative under this Agreement and
the other agreements, instruments and documents to be delivered by or on
behalf of the INSTA Stockholders pursuant to this Agreement.
8.3 Actions. Each of the INSTA Stockholders hereby expressly
acknowledges and agrees that the INSTA Stockholders' Representative is
authorized to act on his behalf. Notwithstanding any dispute or disagreement
among the INSTA Stockholders, Datastream, DSTM-GMBH and any other Person or
entity shall be entitled to rely on any and all action taken by the INSTA
Stockholders' Representative under this Agreement and the other agreements,
instruments and documents to be delivered by or on behalf of the INSTA
Stockholders pursuant to this Agreement without any liability to, or
obligation to inquire of, any of the INSTA Stockholders. Datastream,
DSTM-GMBH and any other Person or entity are hereby expressly authorized to
rely on the genuineness of the signature of the INSTA Stockholders'
Representative and, upon receipt of any writing which reasonably appears to
have been signed by the INSTA Stockholders' Representative, Datastream,
DSTM-GMBH and any other Person or entity may act upon the same without any
further duty of inquiry as to the genuineness of the writing.
8.4 Successors. If Herr Hartmann ceases to function in his capacity
as the INSTA Stockholders' Representative for any reason whatsoever, then a
majority of the INSTA 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 Datastream shall have the right
but not the obligation to petition a court of competent jurisdiction for
appointment of a successor.
8.5 Effectiveness. The authorizations of the INSTA 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 INSTA Stockholders to Datastream or DSTM-GMBH under this Agreement.
The INSTA Stockholders may not, after the date hereof, terminate the
authority of the INSTA Stockholders' Representative to act on their behalf
hereunder. Any such action shall be void and of no force or effect.
8.6 Indemnification. The INSTA Stockholders hereby jointly and
severally agree to indemnify and hold the INSTA 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 INSTA Stockholders' Representative's gross negligence or willful
misconduct.
<PAGE>
ARTICLE IX GENERAL PROVISIONS
GENERAL PROVISIONS
9.1 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
9.2 Extension; 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.
9.3 Entire 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.
9.4 Severability. 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.
9.5 Notices. 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):
<PAGE>
(a) If to Datastream or to DSTM-GMBH, to:
Datastream Systems, Inc.
50 Datastream Plaza
Greenville, South Carolina 29605
Attention: Larry G. Blackwell, Ph.D., P.E.
Telephone: (001) (864) 422-5001
Telecopier: (001) (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: (001) (404) 888-4244
Telecopier: (001) (404) 888-4190
(b) If to INSTA, to:
INSTA - Instandhaltung Technischer Anlagen GmbH
Scherbaumstrasse 33
81737 Munich
Germany
Attention: Herr Michael Hartmann
Telephone: (049) 089/670048-25
Telecopier: (049) 089/631510
with a copy to:
Wessing & Berenberg-Gossler
Isartoplatz 8
80331 Munich
Germany
Telephone: (049) 089/21038-0
Telecopier: (049) 089/210383-00
<PAGE>
(c) If to the INSTA Stockholders, to the INSTA
Stockholders' Representative:
INSTA - Instandhaltung Technischer Anlagen GmbH
Scherbaumstrasse 33
81737 Munich
Germany
Attention: Herr Michael Hartmann
Telephone: (049) 089/670048-25
Telecopier: (049) 089/631510
with a copy to:
Wessing & Berenberg-Gossler
Isartoplatz 8
80331 Munich
Germany
Telephone: (049) 089/21038-0
Telecopier: (049) 089/210383-00
(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 receipt of the communication,
(iii) in the case of delivery by
internationally-recognized, overnight courier, on the Business Day
following dispatch, and
(iv) in the case of mailing, on the third Business Day
following such mailing.
9.6 Headings. 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.
9.7 Counterparts. 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.
9.8 Benefits; Assignment. This Agreement is not intended to confer
upon any Person other than the parties hereto any rights or remedies
hereunder and shall not be assigned by operation of law or otherwise;
provided, however, that Datastream or DSTM-GMBH may assign all or any portion
of the rights hereunder to any Subsidiary of Datastream or DSTM-GMBH, and
INSTA shall, upon request, execute any amendment to the Transaction Documents
necessary to provide the benefits of this Agreement to any such assignee.
9.9 Governing Law; Arbitration67. This Agreement shall be governed
by and construed in accordance with the laws of The Federal Republic of
Germany as applicable to contracts made and to be performed therein.
Following the Effective Time, all disputes between the parties hereto arising
under or in connection with this Agreement or any other Transaction Document
or further agreements resulting from this Agreement including all disputed
claims for breach by any party of any representation, warranty, undertaking
or covenant on its part under this Agreement or any other Transaction
Document, 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 that such arbitrators
undertake their best efforts to complete any such arbitration within one year
of the date such arbitration is commenced. The arbitrators shall be fluent
in both English and German, but the arbitration shall only be conducted in
the English language. All pleadings and papers (other than original
exhibits) submitted in connection with such arbitration shall only be
submitted in the English language. Unless otherwise agreed by Datastream and
DSTM-GMBH, on the one hand, and the INSTA Stockholders, acting through the
INSTA Stockholders' Representative, on the other hand, the place of
arbitration shall be Munich, Germany. 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 9.9, the term "party," as used
herein shall, in appropriate circumstances, be deemed to mean Datastream and
DSTM-GMBH, on the one hand, and the INSTA Stockholders (collectively and as
represented by the INSTA Stockholders' Representative), on the other hand.
9.10 Language of Agreement. The original, execution copy or copies
of this Agreement , and the Schedules and Exhibits hereto (other than certain
information prepared on the original Exhibits or Schedules in the German
language and other than the Schedules prepared by the INSTA Stockholders,
which may be in the German language), shall be in the English language and
such English version shall be the only version used to interpret the
provisions thereof. The parties shall be allowed to translate this Agreement
into the German language, provided, however, that such German version shall
be for reference purposes only. All notices, communications and other
documents given or to be given under this Agreement may be given or made in
the English language or the German language. Except as set forth above with
respect to Schedules and notices prepared in the German language, the English
version of this Agreement and of all such notices, communications and other
documents shall govern among the parties, provided, however, that when used
in the English version of this Agreement, German language words or terms
shall have their precise German meaning.
9.11 Contractual Currency. The specification of Deutsche Marks is
of the essence, and such currency shall be the currency of account in the
case of all obligations under this Agreement (the "Contractual Currency").
Each payment under this Agreement will be made in the Contractual Currency at
the place specified for payment. To the extent permitted by applicable Law,
any obligations to make payments under this Agreement in the Contractual
Currency will not be discharged or satisfied by any tender in any currency
other than the Contractual Currency or at any place other than as required
therein.
9.12 Agent for Service. Each of the INSTA Stockholders authorizes
and appoints the INSTA Stockholders' Representative as his agent to receive
service of process for any action or proceeding arising out of or relating to
this Agreement or any other Transaction Document.
<PAGE>
9.13 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. The INSTA Stockholders
will exercise all efforts to disclose in the Schedules attached hereto any
exception to a representation or warranty made herein with particularity and
to describe the relevant facts in detail and make specific reference to the
Section of this Agreement from which exception is taken; however,
notwithstanding the foregoing, a disclosure made on one Schedule that is
reasonably related to a disclosure that should have been made on another
Schedule but was inadvertently omitted therefrom shall be adequate to place
the party receiving the Schedules on notice of the inadvertently omitted
matter. 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: /s/ Fiona Muller
----------------
Title: Representative
by power-of-attorney
DSTM-GMBH: YVETTE 97 VERMOGENSVERWALTUNGS GMBH
By: /s/ Thibault de Clisson
-----------------------
Title: Managing Director
INSTA: INSTA INSTANDHALTUNG
TECHNISCHER ANLAGEN GMBH
By: /s/ Michael Hartmann
--------------------
/s/ Thomas Nass
---------------
Title: Managing Directors
[Signatures continued on following pages.]
<PAGE>
INSTA STOCKHOLDERS:
/s/ Michael Hartmann
--------------------
Michael Hartmann
/s/ R. Bergerhoff
-----------------
Rolf Bergerhoff
/s/ Thomas Nass
---------------
Thomas Nass
Accepted by:
INSTA STOCKHOLDERS'
REPRESENTATIVE: /s/ Michael Hartmann
--------------------
Michael Hartmann
<PAGE>
<TABLE>
SCHEDULE 2.2
<CAPTION>
Transaction Respective Maximum
INSTA Consideration(1) Indemnification Escrow Indemnification
Name Shares(1) Cash Stock Obligations(2) Shares Liability
- ---- --------- ---- ----- -------------- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
M. Hartmann 65% DM 5,697,175.18 69,565 65% 22,609 DM 6,256,439.50
T. Nass 20% DM 1,259,372.20 34,783 20% 6,957 DM 1,925,058.30
R. Bergerhoff 15% DM 944,529.15 26,087 15% 5,217 DM 1,443,793.70
<FN>
(1) See Section 2.2 of the Agreement.
(2) See Section 7.5(c) of the Agreement and Section 8(e) of the Escrow Agreement.
(3) As set forth in Section 7.5(c) and subject to Section 7.7 of the Agreement.
</FN>
</TABLE>
<PAGE>
EXHIBIT 4.1
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made as of
March 31, 1998, by and among Datastream Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware
("Datastream"), Yvette 97 Vermogensverwaltungs GmbH (in future
trading under the name "Datastream Systems GmbH"), a corporation
organized and existing under the laws of The Federal Republic of
Germany ("DSTM-GMBH"), the stockholders of INSTA Instandhaltung
Technischer Anlagen GmbH ("Insta") listed on the signature pages
hereto (the "Insta Stockholders"), and Dr. Dieter Mayer, as escrow
agent (the "Escrow Agent").
RECITALS
WHEREAS, Datastream, DSTM-GMBH, Insta and the Insta
Stockholders have entered into that certain Share Purchase Agreement
dated as of March 31, 1998 (the "Share Purchase Agreement"),
providing for the acquisition of Insta by DSTM-GMBH through the
purchase of all of the capital stock of Insta outstanding on the
Closing Date (the "Transaction");
WHEREAS, pursuant to the Share Purchase Agreement, the
Insta Stockholders are entitled to receive, at the Effective Time of
the Transaction, an aggregate of 130,435 shares of Datastream Common
Stock as a portion of the consideration for such Transaction;
WHEREAS, the Share Purchase Agreement provides that
34,783 shares of Datastream Common Stock (the "Escrow Shares") of
such 130,435 shares shall be delivered to the Escrow Agent as
security for the representations, warranties, covenants and
agreements made by the INSTA Stockholders in the Share Purchase
Agreement, and shall be placed and held in escrow (the "Escrow")
pursuant to the terms and conditions specified therein and herein;
WHEREAS, the respective number of Escrow Shares being
placed in Escrow by each of the Insta Stockholders is set forth on
Schedule 2.2 to the Share Purchase Agreement;
WHEREAS, the execution and delivery by the Insta
Stockholders of this Agreement is a condition precedent to the
obligations of Datastream and DSTM-GMBH to effect the Transaction
under the Share Purchase Agreement; and
WHEREAS, Dr. Mayer is and is also willing to accept
delivery of the Escrow Shares from the Insta 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:
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 the
34,783 shares of Datastream Common Stock deposited in escrow hereunder,
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, and any shares of capital stock of Datastream or any
entity acquiring or succeeding to the business of Datastream through a
business combination or otherwise which are issued in exchange for the
Escrow Shares, but shall not include any shares released from the
Escrow pursuant to the provisions hereof.
(c) As used herein, the term "Transfer Agent" shall mean First
Union National Bank, a bank organized in the United States of America
and headquartered in Charlotte, North Carolina.
(d) "Fair Market Value" shall mean the average of the closing
sale prices for one share of Datastream Common Stock as quoted on the
Nasdaq National Market (or such other principal exchange or market upon
which shares of Datastream Common Stock are traded at such time) for
the ten (10) days preceding the date of receipt of a Notice of Claim
(if a Notice of Dispute is not thereafter timely received with respect
to such Notice of Claim), Notice of Settlement or Order by the Escrow
Agent.
2. Appointment of Escrow Agent.
Datastream and the Insta Stockholders hereby designate
and appoint Dr. Mayer to serve as escrow agent hereunder, and Dr.
Mayer hereby accepts such designation and appointment upon the terms,
conditions and provisions of this Agreement.
3. Deposit with Escrow Agent.
At the Closing on even date herewith, each Insta
Stockholder will deliver to and deposit 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 A (the "Power of Attorney"), appointing the Escrow Agent
as such Insta 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 and the
Escrow Agent shall deposit such stock certificates on deposit with
Bayerische Hypotheken-und Wechselbank, Munich. The Insta
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 Insta 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 Insta Stockholder
a power of attorney giving each Insta 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.
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 Claim or Liability
incurred by Datastream or Insta after the Effective Time as a result
of any breach of a representation, warranty, covenant or agreement or
other breach of the Share Purchase Agreement by Insta or the Insta
Stockholders in connection with the Share Purchase Agreement, 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.
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 the Fair Market Value, subject to appropriate
mathematical adjustment for stock splits or reverse stock splits, if
any, declared by Datastream during the term of the Escrow.
(b) The number of Escrow Shares to be retained by the Escrow
Agent after the settlement or compromise of 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 (the
dollar amount being calculated, if necessary, based on an exchange rate
between the U.S. Dollar and the Deutsche Mark within five business (5)
days of the date of payment) by the Fair Market 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) A decision of an arbitration panel directing the release of
some or all of the Escrow Shares in accordance with the provisions of
Section 9.9 of the Share Purchase Agreement (an "Order").
8. Claim Procedure.
(a) In the event that the Escrow Agent receives a Notice of
Claim from Datastream, the Escrow Agent shall notify the Insta
Stockholders' Representative of the receipt of such Notice of Claim
within five (5) Business Days of such receipt by sending a copy of the
Notice of Claim marked to show the date of receipt by the Escrow Agent
to the Insta Stockholders' Representative. If the Insta Stockholders
wish to dispute the Claim against the Escrow contained in the Notice of
Claim, the Insta Stockholders' Representative shall send a notice to
the Escrow Agent that the Insta 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 forty-five (45) 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
Insta Stockholders' Representative within forty-five (45) 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 Insta Stockholders' Representative within forty-five (45) 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 Fair Market Value (as determined pursuant to Section 6 of
this Agreement) in accordance with Section 10 of this Agreement.
(d) Notwithstanding the receipt or existence 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.
(e) The Escrow Agent shall release Escrow Shares from the
Escrow Shares registered in each Insta Stockholder's name pro rata in
accordance with the percentages set forth in the fourth column of
Schedule 2.2 to the Share Purchase Agreement.
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:
(1) on October 15, 1999 (the "Initial Termination Date")
unless the Escrow Agent shall have received:
(i) any Notice of Claim for which the forty-five (45) 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").
(2) if not terminated on the Initial Termination Date, on
April 15, 2000 (the "Subsequent Termination Date"), unless the Escrow
Agent shall have received a notice of pending arbitration ("Notice of
Pending Arbitration") with respect to the Outstanding Notice of Claim
or the Outstanding Notice of Dispute that has been timely filed, and
the Escrow Agent shall not have received a Notice of Settlement or an
Order with respect to the Notice of Pending Arbitration.
(b) In the event that on the Initial Termination Date the
Escrow Agent shall be in possession of an Outstanding Notice of Claim
or an Outstanding Notice of Dispute, or on the Subsequent Termination
Date the Escrow Agent shall be in possession of a Notice of Pending
Arbitration, this Agreement shall remain in effect and the Escrow Agent
shall release, as soon as practicable, to the Insta 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, any Outstanding Notice of Dispute or any Notice of Pending
Arbitration, such number to be determined in accordance with Section 6
hereof. 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) If in the event that on the Initial Termination Date the
Escrow Agent shall not be in possession of an Outstanding Notice of
Claim or an Outstanding Notice of Dispute, or on the Subsequent
Termination Date the Escrow Agent shall not be in possession of a
Notice of Pending Arbitration, the Escrow Agent shall release, as soon
as practicable, the number of Escrow Shares then held to the Insta
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 present to the Transfer Agent for transfer the following:
(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
(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 Insta Stockholders representing the balance of such
Insta Stockholder's Escrow Shares and deliver the same to the Escrow
Agent.
11. Manner of Release of the Escrow Shares to the Insta Stockholders.
Whenever the Escrow Agent determines that it is required
to release some or all of the Escrow Shares to the Insta
Stockholders, the Escrow Agent shall present to the Transfer Agent
for the transfer the following:
(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, 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 Insta Stockholders representing the number of Escrow Shares
to be released to each Insta 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 Insta Stockholders representing the balance of such Insta
Stockholder's Escrow Shares; and
(iii) deliver the stock certificates representing the
Escrow Shares to be released to the Insta Stockholders to the Insta
Stockholder's Representative and deliver the stock certificates
representing the balance of each of the Insta Stockholder's Escrow
Shares to the Escrow Agent.
12. Agreement of Escrow Agent.
The Escrow Agent hereby acknowledges receipt of the
Escrow Shares and the Powers of Attorney, and agrees hold the same in
Escrow in accordance with the terms of this Agreement and not to
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 Insta 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,
Insta and the Insta Stockholders.
(c) The Escrow Agent shall not be responsible or liable in any
manner whatsoever for the performance of or by Datastream, DSTM-GMBH
Insta and the Insta 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.
(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 a successor escrow agent to be appointed
by either the parties hereto or the Munich Chamber of Commerce, Munich,
Germany, together with the Powers of Attorney previously delivered to
the Escrow Agent pursuant to Section 3 hereof, whereupon such successor
escrow agent shall assume all of the rights and obligations of, and be
deemed to be for all purposes, the Escrow Agent hereunder.
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 in
accordance with his normal fee schedule. Datastream, on the one
hand, and the Insta Stockholders (jointly and not severally), on the
other hand, shall be equally responsible for such compensation.
15. Indemnification.
(a) Each of Datastream, on the one hand, and the Insta
Stockholders, on the other hand, 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 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 Insta Stockholders' Representative. Any instructions or orders
given to the Escrow Agent pursuant to this Agreement shall be
irrevocable. 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 sufficiently 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) 888-4244
and to: Oppenhoff & Radler
Prinzregentenplatz 10
81675 Munchen
Germany
Attn: Dr. Tina-Fiona Muller
Facsimile: (089) 41808-100
If to the Insta Stockholders': INSTA-Instandhaltung Technischer
Anlagen GmbH
Scherbaumstrasse 33
81737 Munchen
Germany
Attn: Herr Michael Hartmann
with a copy to: Wessing & Berenberg Gossler
Isartorplatz 8
80331 Munchen
Germany
Attn: Dr. Cornelius Weitbrecht
Facsimile: (089) 21 03 83 00
If to the Escrow Agent: Dr. Dieter Mayer
Pacellistrasse 14
D-80333 Munchen
Germany
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 Deutsche Marks, the number of Escrow
Shares required to pay the Claim determined in accordance with Section
6 of this Agreement (based on the Fair Market Value as of the date of
the Notice of Claim, but subject to variance based on market
fluctuation prior to the payment of the Claim), 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 Insta
Stockholders and demonstrating the amount of such Claim that may be
paid from the Escrow in accordance with the provisions of Section 7.5
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
amount, in Deutsche Marks, 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 of Datastream and the Insta Stockholders'
Representative acting on behalf of the Insta 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
amount, in Deutsche Marks, 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 Insta Stockholders by the Insta 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 respective addresses listed
therein.
(f) As noted in Section 7.9(b) of the Share Purchase Agreement,
the parties to this Agreement understand and agree that the Escrow is
not the exclusive source for indemnification pursuant to the Share
Purchase Agreement and that such Escrow in no way limits the amount of
Claims that may be made pursuant to the Share Purchase Agreement.
17. Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of The Federal Republic of Germany.
Notwithstanding the foregoing, Datastream and each of the Insta
Stockholders agree, and the Escrow Agent acknowledges, that all
disputes between the parties hereto arising under or in connection
with this Agreement, to the extent such disputes relate to a Claim or
Liability arising under the Stock Purchase Agreement, shall be
resolved in accordance with the provisions of Section 9.9 of the
Share Purchase Agreement.
18. Modification.
No modification or amendment to this Agreement shall be
valid unless it is in writing and signed by all of the parties hereto.
19. 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.
20. 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.
21. Sole Agreement.
This Agreement constitutes the entire understanding of
the parties hereto with respect to the subject matter hereof, which
is the escrow arrangements pertaining to the Share Purchase Agreement.
22. 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.]
<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: /s/ Fiona Muller
----------------
Title: Representative by
Power-of-attorney
DSTM-GMBH: YVETTE 97 VERMOGENSVERWALTUNGS GMBH
By: /s/ Thibault de Clisson
-----------------------
Title: Managing Director
ESCROW AGENT: /s/ Dr. Dieter Mayer
--------------------
Dr. Dieter Mayer
[Signatures continue on following page.]
<PAGE>
INSTA STOCKHOLDERS: /s/ Thomas Nass
---------------
Thomas Nass
/s/ R. Bergerhoff
-----------------
Ralf Bergerhoff
/s/ Michael Hartmann
--------------------
Michael Hartmann
Accepted by:
INSTA STOCKHOLDERS'
REPRESENTATIVE: /s/ Michael Hartmann
--------------------
Michael Hartmann
