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) September 2, 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 September 2, 1998, Datastream Systems, Inc., a Delaware corporation (the
"Registrant") acquired all the capital stock of Computec Sistemas S.A., an
Argentinean corporation headquartered in Buenos Aires ("Computec") and its
affiliate Computec Sistemas Mexicana S.A. de C.V., a Mexican corporation
headquartered in Mexico City ("Computec-Mexico"). Computec, founded in
1985, is a provider of computerized maintenance management software in
Latin America. Computec's primary product, Mantec-Win TM, uses client
server technology applicable in all major databases including Sybase,
Informix, Oracle and SQL Server. In consideration of the acquisition and
pursuant to the Share Purchase Agreement, dated August 28, 1998, the
Registrant delivered to the stockholders of Computec and Computec-Mexico
approximately $2,600,000, comprised of 44,304 shares of the Registrant's
Common Stock, $.01 par value per share (the "Common Stock"), and $1,766,138
in cash. The Company used proceeds from its initial public offering in
April 1995 and its secondary offering in October 1995 to fund the
acquisition. All of the shares of Common Stock are being held in escrow to
cover indemnification obligations of the selling shareholders.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
Not applicable.
(b) Pro Forma 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
2.1 Share Purchase Agreement, dated as of August 28, 1998, by and
among Datastream Systems, Inc., Computec Sistemas
S.A., Computec Sistemas Mexicana S.A. de C.V. and the
stockholders of Computec Sistemas S.A. and Computec
Sistemas Mexicana S.A. de C.V. listed on the
signature pages thereto.
4.1 Escrow Agreement, dated as of August 28, 1998, by and among
Datastream Systems, Inc., the stockholders of Computec
Sistemas S.A. listed on the signature pages thereto
and Alston & Bird LLP, 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 Computec and Computec-Mexico, on September 2,
1998, the Company issued 44,308 shares of its Common Stock to the Computec
and Computec-Mexico 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 Computec and Computec-Mexico stockholders are
subject to the restriction that they may not be traded after the date of
issuance until the expiration of the one year 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: September 16, 1998 By: /s/ Daniel H. Christie
- --------------------------------------------------------------
Daniel H. Christie
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
2.1 Share Purchase Agreement, dated as of August 28, 1998, by and
among Datastream Systems, Inc., Computec Sistemas
S.A., Computec Sistemas Mexicana S.A. de C.V. and the
stockholders of Computec Sistemas S.A. and Computec
Sistemas Mexicana S.A. de C.V. listed on the
signature pages thereto.
4.1 Escrow Agreement, dated as of August 28, 1998, by and among
Datastream Systems, Inc., the stockholders of Computec
Sistemas S.A. listed on the signature pages thereto
and Alston & Bird LLP, as Escrow Agent.
<PAGE>
DATED AS OF August 28, 1998
EXHIBIT 2.1
SHARE PURCHASE AGREEMENT
by and among
DATASTREAM SYSTEMS, INC.
("Datastream"),
COMPUTEC SISTEMAS S.A. ("Sistemas"),
COMPUTEC SISTEMAS MEXICANA S.A. DE C.V.("Mexico")
and
THE STOCKHOLDERS OF SISTEMAS AND MEXICO
LISTED ON THE SIGNATURE PAGES HERETO
(the "Stockholders")
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS......................................1
ARTICLE IISHARE PURCHASE....................................7
2.1 Performance of Agreement.............................7
2.2 Sale and Purchase of Capital Stock...................8
2.3 Board Resignations...................................8
ARTICLE IIITHE CLOSING......................................8
3.1 Location, Time, Etc..................................8
3.2 Transactions at the Closing..........................8
ARTICLE IVREPRESENTATIONS AND WARRANTIES OF THE
STOCKHOLDERS.....................................9
4.1 Authorization, Etc..................................10
4.2 No Consent Required.................................10
4.3 Litigation Relating to the Agreement................10
4.4 U.S. Status.........................................10
4.5 Other Claims........................................10
4.6 Capitalization......................................10
4.7 Corporate Organization..............................11
4.8 Authority...........................................11
4.9 Noncontravention....................................12
4.10 Litigation..........................................12
4.11 Bankruptcy or Liquidation Proceedings...............12
4.12 Certain Contracts...................................12
4.13 Financial Statements................................14
4.14 No Other Charges....................................14
4.15 Property............................................15
4.16 Permits.............................................15
4.17 No Illegal Acts.....................................15
4.18 Prior Issuances.....................................15
4.19 Taxes...............................................15
4.20 Intellectual Property...............................16
4.21 Product Warranty and Liability......................17
4.22 Pension Matters.....................................18
4.23 Accounting Practices................................18
4.24 Labor and Employment Matters........................19
4.25 Fees and Expenses...................................21
4.26 Certain Payments....................................21
ARTICLE V REPRESENTATIONS AND WARRANTIES OF DATASTREAM.....22
<PAGE>
5.1 Organization; Good Standing; Qualification and
Power...............................................22
5.2 Authority...........................................23
5.3 Noncontravention....................................23
5.4 SEC Documents.......................................23
5.5 Capitalization......................................24
5.6 No Calamities.......................................24
5.7 No Changes..........................................24
5.8 Stock Issuance......................................24
5.9 Financial Statements................................24
5.10 Internal Controls...................................24
ARTICLE VIADDITIONAL COVENANTS AND AGREEMENTS..............25
6.1 Expenses............................................25
6.2 Agreement to Cooperate..............................25
6.3 Public Statements...................................25
6.4 Release.............................................25
6.5 Amounts Payable By Stockholders.....................25
6.7 Resale Restrictions.................................26
6.8 Removal of Regulation S Legend......................26
6.9 Guarantee of Performance............................26
ARTICLE VIICONDITIONS PRECEDENT OF DATASTREAM..............29
7.1 Representations and Warranties......................29
7.2 Authorization of Spouse.............................29
7.3 No actions .........................................29
7.4 Consents............................................29
7.5 Material Adverse Effect.............................29
7.6 Resignation.........................................29
7.7 Share Certificates..................................29
7.8 Escrow Agreement....................................29
7.9 Services Agreement; NonCompetition and
Confidentiality Agreement...........................29
7.10 Capital Stock of Mexico.............................29
7.11 Capital Stock of Sistemas...........................29
7.12 Completion of Due Diligence Review..................29
7.13 Transfers of Software...............................29
ARTICLE VIII.........CONDITIONS PRECEDENT OF THE STOCKHOLDERS
29
8.1 Representations and Warranties......................29
8.2 Consents............................................30
8.3 Payment of Purchase Price...........................30
8.4 No Action...........................................30
ARTICLE IXSURVIVAL OF REPRESENTATIONS AND WARRANTIES
AND INDEMNIFICATION.............................29
<PAGE>
9.1 Survival of Representations and Warranties..........29
9.2 Obligation of Stockholders to Indemnify.............30
9.3 Obligations of Datastream to Indemnify............30
9.4 Conditions of Indemnification with Respect to
Third Party Claims..................................30
9.5 Reduction for Certain Benefits......................31
9.6 No Release for Fraud, Ownership Representations.....31
9.7 Subrogation Rights..................................31
9.8 Establishment of Escrow; Indemnification Not
Limited.............................................31
9.9 Interest............................................32
ARTICLE X GENERAL PROVISIONS...............................32
10.1 Amendment...........................................32
10.2 Extension; Waiver...................................32
10.3 Entire Agreement....................................32
10.4 Severability........................................32
10.5 Notices.............................................33
10.6 Headings............................................34
10.7 Counterparts........................................34
10.8 Benefits; Assignment................................34
10.9 Governing Law; Arbitration..........................34
10.10Language of Agreement...............................35
10.11Contractual Currency................................35
10.12Agent for Service...................................35
10.13Construction........................................35
<PAGE>
SHARE PURCHASE AGREEMENT
BY AND AMONG
DATASTREAM SYSTEMS, INC.,
COMPUTEC SISTEMAS S.A.,
COMPUTEC SISTEMAS MEXICANA S.A. DE C.V.
AND
THE STOCKHOLDERS OF COMPUTEC SISTEMAS S.A.
LISTED ON THE SIGNATURE PAGES HERETO
THIS SHARE PURCHASE AGREEMENT (the "Agreement") is made and
entered into as of this 28th day of August, 1998, by and among
Datastream Systems, Inc., a Delaware corporation ("Datastream"),
Computec Sistemas S.A., a corporation organized and existing
under the laws of the Republic of Argentina ("Sistemas"),
Computec Sistemas Mexicana S.A. de C.V., a corporation organized
and existing under the laws of the United States of Mexico
("Mexico"), and the stockholders of Sistemas and Mexico listed on
the signature pages hereto (hereinafter referred to individually
as a "Stockholder" and collectively as the "Stockholders").
The parties hereto have agreed that Datastream will purchase
all of the issued and outstanding capital stock of Sistemas from
the Stockholders upon the terms and conditions set forth herein
(the "Transaction"). 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 Incorporation" of a corporation
incorporated in the Republic of Argentina or the United States of
Mexico means the Estatutos of such corporation, as amended
through the date hereof.
1.3 "Business Day" means any day, other than a Saturday,
Sunday or legal holiday on which banks are permitted to close in
either Greenville, South Carolina or Buenos Aires, Argentina.
<PAGE>
1.4 "Capital Stock" means collectively the shares of
common stock of Sistemas and Mexico which together represent all
of the issued and outstanding shares of capital stock of Sistemas
and Mexico. For purposes hereof, the term "Capital Stock"
includes (i) all the issued and outstanding shares in the capital
stock of Sistemas and Mexico, being at present 1000, nominative
ordinary shares with a par value of [_] Mexican pesos each and
with the right to one vote each, with all the economic and other
rights pertaining thereto with respect to Mexico, and with
respect to Sistemas being at present1,000 nominative ordinary
shares with a par value of 10 Argentine pesos with the right to
one vote each, with all the economic and other rights pertaining
thereto; (ii) all the rights of the Stockholders and other
parties to uncapitalized capital contributions made, and issuance
premiums paid, by the Stockholders and such other parties to each
of the companies and existing at the Closing Date; (iii) all the
rights to cash, stock or other dividends declared by Sistemas and
Mexico up to the Closing Date and unpaid as of the Closing Date;
(iv) all the rights to subscribe to shares in the capital of
Sistemas and Mexico corresponding to subscriptions called by
Sistemas and Mexico up to the Closing Date and not subscribed as
of the Closing Date; (v) all the rights to receive shares in
Sistemas and in Mexico subscribed prior to the Closing Date and
issued after the date hereof or not issued by said Closing Date;
(vi) all the rights to stock distributions declared by Sistemas
and Mexico after the date hereof, whether as capitalization of
capital adjustment accounts or reserves or for any other reason,
and distributed after the date hereof or not distributed as of
the Closing Date; (vii) all other distributions declared by each
of Sistemas and Mexico either for capital reductions,
distribution of issuance premium or for other reasons, and not
distributed as of the Closing Date; and (viii) all credits and
claims against Sistemas and Mexico by the Stockholders all former
stockholders and their respective Affiliates, as well as any
credits and claims of current or former directors or officers of
Sistemas and Mexico, existing on the Closing Date.
1.5 "Cash Consideration" means U.S. $1,705,009 the
aggregate amount of cash to be delivered by Datastream to the
Stockholders at the Closing.
1.6 "Claim" or "Claims" shall mean any suit, demand, claim,
action or cause of action, assessment, loss, damage, liability,
proceeding, arbitration, investigation, cost or expense described
in Article IX hereof.
1.7 "Closing" means the closing of the transactions
contemplated by this Agreement.
1.8 "Closing Date" means the date on which the Closing
shall occur.
1.9 "Convertible Securities" means any option, warrant,
convertible note or debenture, right to purchase or other
instrument or agreement representing a right to acquire any
capital stock or other equity interest in Sistemas or Mexico.
1.10 "Datastream" means Datastream Systems, Inc., a Delaware
corporation.
1.11 "Datastream Common Stock" means the shares of common
stock, $.01 par value per share, of Datastream.
<PAGE>
1.12 "Datastream Internationa" means Datastream Systems
International, Inc. a Delaware company and wholly owned
subsidiary of Datastream.
1.13 "DGCL" means the Delaware General Corporation Law.
1.14 "Escrow Agent" means the escrow agent to be named under
the Escrow Agreement.
1.15 "Escrow Agreement" means the Escrow Agreement referred
to in Section 7.9 hereof, in the form attached hereto as Exhibit
A.
1.16 "Escrow Shares" means all of the shares of Datastream
Common Stock comprising the Stock Consideration to be deposited
in escrow pursuant to the Escrow Agreement in the respective
amounts for each Stockholder set forth on Schedule 2.2.
1.17 "Exchange Act" means the Securities Exchange Act of
1934, as amended.
1.18 "Expenses" means:
(a) all fees and expenses paid or incurred by
Sistemas, Mexico and the 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 Sistemas', Mexico's and the
Stockholders' law firm) for persons engaged by Sistemas, Mexico
or the Stockholders (or claiming to be so engaged), filing fees,
copying expenses, travel expenses (if any) and other
out-of-pocket costs related to the Transaction.
(b) all fees and expenses incurred in obtaining all
permits that are required under the applicable laws, rules and
regulations of any Governmental Authority;
(c) all contributions, public and private pension fund
donations and social security premiums that have been accrued
pursuant to any plan, program or pension arrangement for employee
welfare or benefit purposes as of the Closing Date but have not
been contributed to the relevant plan, program or pension
arrangement as of such date; and
(d) any and all fines, fees, penalties or assessments
incurred (at any time) due to Sistemas' or Mexico's
non-compliance with any Law prior to the Closing.
1.19 "Financial Statements" means the unaudited consolidated
balance sheet, statement of operations, statement of
stockholders' equity and statement of cash flows of Sistemas and
Mexico, together with related schedules and notes thereto, as of
and for the periods commencing on July 1, 1992 and ended July 31,
1998 with respect to Sistemas and from the date of inception
through July 31, 1998 with respect to Mexico. The Financial
Statements are attached hereto as Schedule 4.12.
<PAGE>
1.20 "Governmental Authority" means any court,
administrative agency, commission or other governmental authority
or instrumentality, local, state or federal, of any domestic or
foreign government.
1.21 "Indemnified Party" shall have the meaning ascribed to
such term in Section 9.4 hereof.
1.22 "Indemnifying Party" shall have the meaning ascribed to
such term in Section 9.4 hereof.
1.23 "Intellectual Property" means all intellectual property
and the rights thereto, whether owned or used by Sistemas or
Mexico, any Stockholder or former stockholder or one of their
Affiliates or licensed from another party by Sistemas or Mexico
or one of their Affiliates, whether existing under the laws of
the Republic of Argentina, the United States of Mexico, the
United States of America or any other jurisdiction, including,
without limitation:
(a) patents, patent applications, patent rights,
patent disclosures and improvements thereto;
(b) trademarks, trade names, trade designs, trade
dress logos, service marks, corporate names and registrations and
applications for registrations thereof;
(c) copyrights, and registrations and applications for
registration thereof;
(d) computer software (including without limitation
the source code for any such software), data and documentation;
(e) trade secrets and confidential business
information, including without limitation, customer lists, ideas,
formulae, inventions (whether patentable or not and whether or
not reduced to practice), know-how, manufacturing and production
processes and techniques, research and development information,
drawings, specifications, designs, plans, development and other
tools, proposals, technical data, copyrightable works of
authorship, financial, marketing and business data, pricing and
cost information, business and marketing plans, proprietary
processes, techniques and formulae;
(f) other proprietary rights; and
(g) all documentation and tangible embodiments thereof
(in whatever form or medium) constituting, describing or relating
to the above, including, without limitation, manuals, memoranda
and records.
1.24 "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.
1.25 "Liability" means any and all direct or indirect
demands, claims, payments, obligations, recoveries, deficiencies,
fines, penalties, interest, assessments, actions, causes of
<PAGE>
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 to a third
party as a result of the foregoing, whether accrued, absolute,
actual, contingent, known, unknown.
1.26 "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.
1.27 "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, Argentine pesos or Mexican pesos (or any other
currency) shall be dispositive of materiality.
1.28 "Material Adverse Effect" means a Material adverse
effect on the condition (financial or otherwise), business,
properties, net worth, results of operations or prospects of a
company and its Subsidiaries taken as a whole.
1.29 "Mexic" means Computec Sistemas Mexicana, S.A. de
C.V., a corporation organized and existing under the laws of the
United States of Mexico. Unless the context otherwise indicates,
the term "Mexico" as used herein includes Mexico and its
consolidated Subsidiaries, if any, as well as any predecessors of
Mexico and its consolidated Subsidiaries, if any, including
without limitation, former Subsidiaries of Mexico and the
predecessors of such former Subsidiaries.
1.30 "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.
1.31 "Noncompetition and Confidentiality Agreement" means
the Noncompetition and Confidentiality Agreement, dated as of the
Closing Date, among Datastream, Sistemas and Carlos Pallotti.
1.32 "Person" means a natural person, company, corporation,
partnership, government, or political subdivision, agency or
instrumentality of any domestic or foreign government.
1.33 "Products" shall have the meaning set forth in Section
4.20 hereof.
1.34 "Regulation S" means Regulation S and the rules
thereunder promulgated under the Securities Act of 1933, as
amended.
1.35 "Regulation S Legend" means the legend to be placed on
the shares of Datastream Common Stock constituting the Stock
Consideration that reads as follows:
<PAGE>
"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.
1.36 "SEC" means the Securities and Exchange Commission.
1.37 "SEC Documents" means Datastream's Annual Report on
Form 10-K and Annual Report to Stockholders for the fiscal year
ended December 31, 1997, Datastream's Proxy Statement for the
1998 Annual Meeting of Stockholders, and all other reports filed
or required to be filed by Datastream with the SEC subsequent to
December 31, 1997 but prior to the Closing Date.
1.38 "Services Agreement" shall mean the Labor Contract for
Indeterminate Time, dated as of the Closing Date, between
Sistemas and Carlos Pallotti.
1.39 "Securities Act" means the Securities Act of 1933, as
amended.
1.40 "Sistemas" means Computec Sistemas S.A., a corporation
organized and existing under the laws of the Republic of
Argentina. Unless the context otherwise indicates, the term
"Sistemas" as used herein includes Sistemas and its consolidated
Subsidiaries, if any, as well as any predecessors of Sistemas and
its consolidated Subsidiaries, if any, including without
limitation, former Subsidiaries of Sistemas and the predecessors
of such former Subsidiaries.
1.41 "Stock Consideration" means 44,304 shares of Datastream
Common Stock which is the aggregate number of shares of
Datastream Common Stock to be delivered by Datastream at the
Closing. Subject to Section 6.7 hereof, the certificates
evidencing the shares of Datastream Common Stock constituting the
Stock Consideration shall bear the Regulation S Legend and may
also bear a legend referencing this Agreement and the Escrow
Agreement.
1.42 "Subsidiary," with respect to any entity, means another
entity the majority of the outstanding equity interests of which
are owned, directly or indirectly, by the first entity, together
with any predecessor corporation of such majority-owned entity,
if any.
1.43 "Tax or Taxes" means with respect to any entity:
(a) any taxes (including, without limitation, income
(net or gross), gross receipts, profits, alternative or add-on
minimum, assets, turnover, franchise, license, capital, capital
stock, intangible, services, premium, transfer, sales, use,
ad-valorem, value-added, payroll, wage, severance, employment,
social security, retirement, occupation, property (real or
<PAGE>
personal), windfall profits, import, excise, custom, stamp,
withholding, or estimated taxes), fees, duties, assessments,
withholdings or governmental charges of any kind whatsoever
including, without limitation, any and all such taxes which
should have been collected and paid to any governmental body on
behalf of third parties (including, without limitation,
obligations resulting from acting as a retention agent,
perception agent, "responsable sustituto", commission agent or
intermediary, etc.), including with respect to each item any
interest, adjustments, penalties, or additions, etc. imposed by
any taxing authority (domestic or foreign) on such entity,
whether disputed or not; 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.
1.44 "Transaction Consideration" means (x) the Cash
Consideration; (y) the Stock Consideration payable by Datastream
pursuant to Section 2.2 hereof and (2) payment of $ 61,129 in
satisfaction of a debt owed to Carlos Pallotti by Mexico for
start-up costs.. The payment or delivery of the Transaction
Consideration shall be made to the Stockholders in the respective
amounts set forth on Schedule 2.2. In addition, Mr. Carlos
Pallotti has the right to receive an additional maximum amount of
$ 140,735 representing retained earnings from Fiscal 1998,
without interest, out of the available cash of Sistemas, which
availability shall be determined by mutual agreement of Carlos
Pallotti and Michael Pace (or other designated Datastream
representative if Mr. Pace is not available).
1.45 "Transaction Documents" means this Agreement, the
Escrow Agreement, the Noncompetition and Confidentiality
Agreement, and the Services Agreement.
1.46 "U.S. Person" means any natural person resident in the
United States, any partnership or corporation organized or
incorporated under the laws of the United States, any trust of
which any trustee is a U.S. Person or as otherwise defined in
Rule 902(I) of Regulation S promulgated under the U.S. Securities
Act of 1933, as amended ("Regulation S").
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 Articles of
Incorporation 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.
<PAGE>
2.2 Sale and Purchase of Capital Stock. Each of the
Stockholders hereby agrees to sell all of the right, title and
interest in and to the Capital Stock owned by each of them, as
set forth on Schedule 2.2 hereof, to AqSub, hereby agrees to
purchase all of such right, title and interest in such shares of
Capital Stock, as set forth on Schedule 2.2 hereof, subject to
the terms and conditions hereof. Each outstanding share of
Capital Stock sold and purchased shall be transferred to AqSub
free and clear of any Liens, and the Transaction shall be deemed
effective at the Closing by execution of the documents mentioned
in Section 3.2 and satisfaction of the conditions to Closing set
forth in Articles VII and VIII hereof, in consideration for
AqSub's payment and delivery of the Transaction Consideration in
respect of all such Capital Stock.
ARTICLE III
THE CLOSING
3.1 Location, Time, Etc. The Closing shall be held at the
offices of Marval, O'Farrell & Mairal, ;Buenos Aires, Argentina],
on the Closing Date commencing at [10:30] 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.
3.2 Transactions at the Closing.
(a) At the Closing, the Stockholders shall deliver to
Datastream the following:
(i) stock certificates evidencing the Capital Stock of
Sistemas, in form suitable for transfer, and the
appropriate notices as per Section 215 of Argentine
Corporate Act (Ley 19,550) of transfer signed by the
Stockholders and addressed to Sistemas;
(ii) all stock books, minute books and other corporate
books of each of Sistemas and Mexico;
(iii) the books of account and records of each of Sistemas
and Mexico;
(iv) letters of resignation of all directors and statutory
auditors of each of the Companies listed on Schedule 3.2
as per the texts included in said Schedule;
(v) spouse consent as provided in Section 6.11;
(vi) copies of each of the Transaction Documents duly
executed by the Stockholders;
<PAGE>
(vii) a certified copy of the minutes of the meeting of
the Board of Directors of each of Sistemas and Mexico
authorizing the execution and delivery of all
documentation related to the Transaction and to be
delivered by such companies at or prior to the Closing; and
(viii) Evidence satisfactory to Datastream and its legal
counsel that each of the conditions of Closing in Article
VII of this Agreement have been accomplished by the
Stockholders.
(b) At the Closing, Datastream shall deliver to the
Stockholders the following:
(i) the Cash Consideration;
(ii) a copy of the written instruction delivered by Datastream to
the Transfer Agent for the issuance of Datastream stock
certificates representing the Stock Consideration in the name of
the Stockholders, as shown on Schedule 2.2 hereof, and the
delivery of all such stock certificates to the Escrow Agent under
the terms of the Escrow Agreement;
(iii) copies of each of the Transaction Documents duly executed by
Datastream;
(iv) a copy of the resolutions of the Board of Directors of
Datastream authorizing such company to enter into the Transaction
and to execute and deliver all documentation related to the
transaction at or prior to the Closing, which resolutions shall
be accompanied by a certificate of the corporate secretary of
Datastream stating that the resolutions were duly adopted in
accordance with the Articles of Incorporation and bylaws of
Datastream; and
(v) Evidence satisfactory to the Stockholders and their legal
counsel that each of the conditions to Closing in Article VIII of
this Agreement have been accomplished by Datastream.
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
REPRESENTATIONS AND WARRANTIES OF
THE STOCKHOLDERS
Each of the Stockholders, jointly and severally, hereby
represents and warrants to Datastream as follows (such
representations and warranties to be true and correct as of the
<PAGE>
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 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 each
other Transaction Document by the other parties hereto and
thereto, this Agreement and each other Transaction Document
constitutes a valid and binding agreement of such Stockholder,
enforceable against such Stockholder in accordance with its
terms. Such Stockholder has irrevocably waived any preemptive
rights or other rights of first refusal applicable to the
Transaction under applicable law or Sistemas' or Mexico's
Articles of Incorporation..
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 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 Sistemas,
Mexico nor any 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 U.S. Status. Such Stockholder is not a "U.S. person" as
such term is defined in Section 902 of Regulation S. Such
Stockholder acknowledges that he, she or it has received and
reviewed copies of Datastream's SEC Documents.
4.5 Other Claims. Such Stockholder does not have and shall
not have any claim or cause of action whatsoever (including,
without limitation, any claim under any employment, management,
consulting or service agreement) against Sistemas or Mexico
arising out of or in any way connected with any event, occurrence
or state of facts in existence prior to the Closing.
4.6 Capitalization.
(a) All of the authorized, issued and outstanding
shares of Capital Stock are set forth on Schedule 4.6. There are
no other such shares of Capital Stock nor are there any
Convertible Securities issued or outstanding. Each Stockholder
owns beneficially and of record all of the issued and outstanding
shares of Capital Stock of Sistemas (including all rights
attached thereto or associated therewith) as set forth opposite
such Stockholder's name on Schedule 4.6 hereto and has legal and
valid title to such shares of Capital Stock of Sistemas, free and
clear of all Liens. As of the Closing Date, all of the issued
and outstanding shares of the Capital Stock of Mexico will be
owned by Sistemas and Datastream International free and clear of
all Liens and shall represent all of the outstanding capital
stock of Mexico at such time. At the Closing, (i) no dividends or
rights to receive dividends shall have accrued to the holders of
Capital Stock that have not been terminated, and (ii) the shares
of Capital Stock transferred pursuant to Article II hereof will
represent all of the issued and outstanding equity capital of
Sistemas at such time. The register of stockholders of Sistemas
<PAGE>
and Mexico contains complete, true and accurate records of
Sistemas and Mexico and sets forth such information regarding the
stockholders of Sistemas and Mexico as is necessary under
applicable law. Since June 30, 1998, neither Sistemas nor Mexico
has paid, nor made provisions or arrangements to pay, nor have
the Stockholders approved or agreed to distribute, any dividends
or other distributions of the profits or share capital of
Sistemas or Mexico or otherwise made any change or adjustment to
the stockholders' equity of Sistemas or Mexico.
(b) The issued and outstanding shares of capital stock
set forth on Schedule 4.6 hereto have been duly authorized and
validly issued, are fully paid and nonassessable (i.e., there are
no liabilities associated with such shares) and are not entitled
or subject to any preemptive, preferential or similar rights.
Sistemas and Mexico have no Subsidiaries and own 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 or
entity.
4.7 Corporate Organization.
(a) Sistemas has been duly incorporated and is validly
existing and duly registered under the laws of the Republic of
Argentina, 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 Incorporation. Sistemas 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
Sistemas; and no proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing, or seeking to
revoke, limit or curtail, such registration or qualification.
(b) Mexico has been duly incorporated and is validly
existing and duly registered under the laws of the United States
of Mexico, 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 Incorporation. Mexico 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
Mexico; 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. Sistemas and Mexico have all requisite
corporate power and authority to enter into this Agreement and
each other Transaction Document and to perform their 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 Sistemas
and Mexico and the consummation by Sistemas and Mexico of the
transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of
Sistemas and Mexico. This Agreement and each other Transaction
<PAGE>
Document has been duly executed and delivered by Sistemas and
Mexico and, assuming due execution and delivery of this Agreement
and each other Transaction Document by the other parties hereto
and thereto, this Agreement and each other Transaction Document
constitutes a valid and binding agreement of Sistemas and Mexico
enforceable in accordance with their terms.
4.9 Noncontravention. The execution, delivery and
performance by Sistemas, Mexico and each Stockholder of this
Agreement and each other Transaction Document to which Sistemas,
Mexico or any such Stockholder is a party, the consummation of
the transactions contemplated hereby and thereby, and the
compliance by Sistemas, Mexico and each such Stockholder with the
provisions hereof and thereof will not:
(a) conflict with, result in a violation of, result in
a breach of, or cause a default under (with or without notice or
lapse of time, or both), or give rise to a right of termination,
amendment, cancellation or acceleration of any obligation
contained in, or 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 properties or assets of
Sistemas or Mexico 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 Sistemas, Mexico or any Stockholder or
any of their respective properties or assets;
(b) violate any provision of the Articles of
Incorporation or any other organizing document of Sistemas or
Mexico; or
(c) require the consent, approval, order or
authorization of, or registration, declaration or filing with,
any Governmental Authority to be obtained by Sistemas or Mexico
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. There are no legal, governmental or
arbitration proceedings pending or, to the knowledge of the
Stockholders, threatened against Sistemas or Mexico, or to which
Sistemas, Mexico or any property owned or leased by Sistemas or
Mexico is subject.
4.11 Bankruptcy or Liquidation Proceedings. There are no
bankruptcy or liquidation proceedings pending against Sistemas or
Mexico or, to the knowledge of the Stockholders, threatened
against Sistemas or Mexico. Neither Sistemas nor Mexico has
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,
neither Sistemas nor Mexico is a party to any written or oral,
formal or informal, agreement or understanding concerning any:
<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, guarantee or other agreement, arrangement or
commitment for the borrowing of money, a line of credit
or a leasing transaction of a type required to be
capitalized in accordance with generally accepted
Argentina or Mexico accounting principles;
(iii)Indenture, mortgage, promissory note, loan
agreement, guarantee or other agreement, arrangement or
commitment for the borrowing or lending of money or
line of credit from or to Sistemas or Mexico to which
any Stockholder (or any Affiliate of any Stockholder)
is a party;
(iv) Lease or other agreement under which Sistemas
or Mexico is lessor of, lessee of, or holds or operates
any items of tangible personal property or real
property owned by any third party and under which
payments are made to or are received from such third
party, which either calls for performance over a period
of more than one (1) year from the date hereof or
payment to or from Sistemas or Mexico in an amount in
excess of $2,000 per annum;
(v) Agreement, license, franchise, permit,
indenture or authorization, which either calls for
performance over a period of more than one (1) year or
payment to or from Sistemas or Mexico in an amount in
excess of $ 2,000 per annum;
(vi) Agreement that restricts Sistemas or Mexico
from engaging in any aspect of its business or
competing in any line of business in any geographic
area;
(vii)Agreement or commitment made by Sistemas or
Mexico to guaranty or provide suretyship or to
otherwise be contingently liable or responsible for the
obligations of Persons other than Sistemas or Mexico; or
(viii) Arrangement under which the consequence
of a default or termination would reasonably be
expected to have a Material Adverse Effect on Sistemas
or Mexico.
(b) Except as set forth in Schedule 4.12(b) hereto,
there are no distribution contracts (including, without
limitation, all OEM and end-user contracts) to which Sistemas or
Mexico is a party which grant any exclusive right of any kind to
any party.
(c) Attached as Schedule 4.12(c) hereto is a true,
correct and complete list of all software development agreements
to which Sistemas or Mexico is a party or beneficiary. All such
agreements provide for the assignment to Sistemas or Mexico, as
appropriate, of all right, title and interest to any technology,
development work or other products developed by any other party
for Sistemas or Mexico. None of the agreements listed on
Schedule 4.12(c) permit any other party to retain or own, or
<PAGE>
grant to any other party, any right to any technology,
development work or other product developed by such party
thereunder or owned by Sistemas or Mexico or of which Sistemas or
Mexico is a beneficiary.
(d) Except as set forth on Schedule 4.12(d) hereto,
neither Sistemas nor Mexico has granted any source code licenses
or established any source code escrow arrangements. None of such
source code licenses or source code escrow agreements authorize
any party thereto other than Sistemas or Mexico to resell or
otherwise exploit such source code commercially or to further
develop such source code in order to resell or otherwise exploit
it commercially.
(e) Neither Sistemas nor Mexico is, and, to the
knowledge of the Stockholders, no 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
Sistemas or Mexico is a party.
4.13 Financial Statements. The Financial Statements present
fairly the consolidated financial condition, results of
operations and cash flows of Sistemas and Mexico at the
respective dates or for the respective periods covered thereby,
and the Financial Statements have been prepared in accordance
with generally accepted [Argentina] or Mexico accounting
principles (as applicable) consistently applied throughout the
periods involved. Except as set forth in the Financial
Statements, including the notes thereto, or in any schedule
hereto, neither Sistemas nor Mexico has any other Material
Liability. All reserves established by Sistemas and Mexico 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. Since June 30, 1998, Sistemas and Mexico have
conducted their business only in the ordinary course and there
has not occurred any transaction, condition (financial or
otherwise) of any character, event or change (including without
limitation the incurrence of any liabilities, whether accrued,
contingent or otherwise) that would reasonably be expected to
have a Material Adverse Effect on Sistemas or Mexico. Neither
Sistemas nor Mexico is delinquent in any material payment of
principal or interest on any outstanding debt or other obligation.
4.14 No Other Charges. Since June 30, 1998, each of Sistemas
and Mexico 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 Sistemas or Mexico. Neither Sistemas nor
Mexico is delinquent in any material payment of principal or
interest on any outstanding debt or other obligation. In
particular, since June 30, 1998, neither Sistemas nor Mexico has
(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 $ 2,000, (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
<PAGE>
accordance with sound commercial practice, (d) made any
significant change to the employment compensation of any of its
employees, or (e) made any agreement to do any of the foregoing.
4.15 Property. Except as set forth on Schedule 4.15 hereto,
neither Sistemas nor Mexico owns any real property. Sistemas and
Mexico each have full legal title to all properties and assets
reflected as owned by them 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 Sistemas or
Mexico 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 Sistemas or Mexico; all of the property (real and
personal) held or used by Sistemas or Mexico under leases,
franchises, licenses or other agreements is held by them under
valid, subsisting, binding and enforceable leases, franchises,
licenses or other agreements, except those that are not Material
to Sistemas or Mexico and which do not interfere in any Material
respect with the use of the property or the conduct of the
business of Sistemas or Mexico.
4.16 Permits. Sistemas and Mexico have obtained and hold,
and are 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 their business (hereinafter "permit" or
"permits") as are necessary to own their properties and assets,
and to conduct their business in the manner currently being
conducted. Sistemas and Mexico have fulfilled and performed all
of their 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 could reasonably be expected
to result in, violation, revocation or termination of any such
permit or result in any other impairment of the rights of the
holder of any permit.
4.17 No Illegal Acts. Sistemas and Mexico are presently in
compliance with all laws, orders, rules and regulations
applicable to, required of or binding upon them or their
business, and neither Sistemas nor Mexico has received any notice
from any Governmental Authority with respect to any failure or
alleged failure of Sistemas or Mexico to comply with any such
law, order, rule or regulation, nor, to the knowledge of the
Stockholders, are any such notices proposed or threatened.
4.18 Prior Issuances. All offers and sales of the capital
stock or Convertible Securities of Sistemas and Mexico prior to
the date hereof and all cash payments or distributions of the
capital stock of Sistemas and Mexico as dividends were made in
compliance with the corporate and securities laws of Argentina
and Mexico and all other applicable Laws, and were not made in
contravention of any preemptive or other rights of first refusal
under Argentina or Mexico or other applicable law or Sistemas' or
Mexico's Articles of Incorporation or By Laws.
4.19 Taxes.
(a) For purposes of this Agreement: (i) "Pre-Closing
Periods" shall mean all Tax periods ending on or before the
Closing Date and, with respect to any Tax period that includes
but does not end on the Closing Date, the portion of such period
that ends on and includes the Closing Date; and (ii) "Returns"
<PAGE>
shall mean all returns, declarations, reports, estimates,
information returns, refund claims, and statements of any nature
regarding Taxes, including amendments thereto.
(b) (i) All Returns required to be filed by Sistemas or by
Mexico have been timely filed when due in accordance with all
applicable laws and such Returns are true, complete and correct
in all material respects; (ii) all Taxes shown on such Returns
and all other Taxes relating to Sistemas or to Mexico (including
all Tax deficiencies or assessments) have been timely paid; (iii)
all Returns of Sistemas or Mexico with respect to taxable years
ending on or prior to December 31, 1992, are Returns with respect
to which the applicable statute of limitations, after giving
effect to any extensions or waivers, has expired; (iv) the
charges, accruals and reserves for Taxes relating to Sistemas or
to Mexico as reflected on the books of each of such Companies,
respectively are adequate to cover all Taxes that are, or may
become, payable with respect to pre-Closing periods; (v) there
are no agreements or consents currently in effect for, and no
outstanding requests for, the extension or waiver of the time,
(A) to file any Return relating to Sistemas or to Mexico, or (B)
for assessment or collection of any Taxes relating to Sistemas or
to Mexico; (vi) all Taxes which either Sistemas or Mexico is
required by law to withhold or collect have been duly withheld or
collected, and have been timely paid over to the appropriate
governmental authorities to the extent due and payable; (vii)
there is no action, suit, proceeding, investigation, examination,
audit, claim, or deficiency currently pending, or threatened,
regarding any Taxes relating to Sistemas or to Mexico; (viii)
there are no Tax liens on any asset of Sistemas or Mexico; (ix)
there is no power of attorney in effect, and no request for
rulings or determination letters or competent authority relief in
effect with respect to the Sistemas or to Mexico; (x) there are
no Tax sharing agreements or arrangements to which Sistemas or
Mexico is now or ever has been a party; and (xi) during the five
years prior to the date hereof, neither Sistemas nor Mexico has
been the subject of audits by the Argentine Tax Board or the
provincial tax boards resulting in additional payments of Taxes
by the Sistemas or Mexico in excess of $5,000.
4.20 Intellectual Property.
(a) The products listed on Schedule 4.20(a) hereto and
the support and maintenance services provided for those products
pursuant to license or distribution agreements are the only
products (hardware, software, services and others) under
development or marketed, licensed, sold or otherwise distributed
or intended for distribution by Sistemas or Mexico during the
last five years (all such products shall be referred to
hereinafter collectively as the "Products").
(b) Set forth on Schedule 4.20(b) hereto is a true,
correct and complete list of all Intellectual Property of
Sistemas and Mexico. There is no other Intellectual Property
that is useful or necessary to Sistemas or Mexico in the
development, manufacture, license, sale, distribution, purchase
and use of the Products. Such list identifies (A) Sistemas or
Mexico as either the owner or licensee of each item of
Intellectual Property; (B) in the cases where Sistemas or Mexico
is a licensee, the licensor(s) and license agreement(s) for such
item of Intellectual Property; (C) as applicable, the Product to
<PAGE>
which such item of Intellectual Property relates; and (D) as
applicable, the fee, royalty or other amount payable to any other
party with respect to such item of Intellectual Property or
Product. Except as set forth on Schedule 4.20(b), each license
granted to Sistemas or Mexico is perpetual and irrevocable. To
the extent Sistemas or Mexico claims to own such Products or
Intellectual Property, Sistemas or Mexico, as applicable, 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 Sistemas or Mexico with respect to the Products and other
Intellectual Property. To the extent Sistemas or Mexico claims
to be licensed to use such Products or Intellectual Property,
Sistemas or Mexico, as applicable, has a valid and enforceable
license for the purposes for which it uses such Products or
Intellectual Property.
(c) Neither Sistemas nor Mexico has (nor has any
Product developed, manufactured, licensed, sold or distributed by
Sistemas or Mexico) 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) Sistemas and Mexico have taken all necessary
measures to protect their rights in the Products and the
Intellectual Property, and maintain all copyrights and other
intellectual property rights necessary for marketing, licensing,
selling or otherwise distributing the Products in the
jurisdictions in which they have been distributed. Neither
Sistemas nor Mexico has sent or otherwise communicated to any
other person any notice, charge, claim or assertion of, or has
any knowledge of, any present, impending or threatened
infringement by such other person of any right relating to the
Intellectual Property of Sistemas or Mexico.
(e) Sistemas and Mexico have entered into agreements
with each of their present and past employees and each of their
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
Sistemas or Mexico, as applicable, all such copyrights and other
intellectual property rights. Neither Sistemas nor Mexico has
received notice, orally or in writing, that any other Person
claims any interest in any Products or Intellectual Property of
Sistemas or Mexico, nor to the best knowledge of the
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.
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 Sistemas or Mexico in connection with such
Product, except to the extent that the liability of Sistemas or
Mexico for non-conformity or for repair and replacement in the
aggregate does not exceed any warranty reserves maintained in the
Financial Statements.
<PAGE>
(b) Neither Sistemas nor Mexico has incurred any
liability arising out of any injury to any Person or property
(and, to the best knowledge of the Stockholders, there is no
basis for any present or future claim, complaint, action, suit,
proceeding, hearing, investigation, claim or demand against
Sistemas or Mexico arising out of any such injury) as a result of
the use of the Products.
(c) Except as set forth on Schedule 4.21 hereto, 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) Neither Sistemas nor Mexico is a party to, makes,
or is required to make contributions to, any pension, profit
sharing, retirement, deferred compensation, bonus, severance,
medical, life insurance or other employee (or ex-employee)
welfare or benefit plans, agreements or arrangements maintained
for the benefit of any of their employees or will be so required
upon the termination of the employment, retirement, death or
disability of their employees.
(b) Sistemas and Mexico have complied with all
obligations imposed on them by all applicable statutes and
regulations regarding (i) the deduction from their employees'
salaries or wages in respect of the laws of Argentina or Mexico
(as applicable); and (ii) the payment by Sistemas and Mexico to
all applicable governmental authorities of all sums due in
respect of such laws.
4.23 Internal Controls. Sistemas and Mexico each maintain
internal accounting controls which provide reasonable assurance
that (i) transactions are executed in accordance with
management's authorization, (ii) transactions are recorded as
necessary to permit preparation of Sistemas' and Mexico's
consolidated financial statements in accordance with generally
accepted Argentine and Mexican accounting principles and to
maintain accountability for the assets of Sistemas and Mexico,
(iii) access to the assets of Sistemas and Mexico is permitted
only in accordance with management's authorization, and (iv) the
recorded accountability for assets of Sistemas and Mexico is
compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
<PAGE>
4.24 Labor and Employment Matters.
(a) (i) Schedule 4.24(a)(i) sets forth the name, date of
employment, date of inception of benefits, job title, monthly
compensation, and eligibility for prizes of each regular, full
time or part time employee or independent contractor of Sistemas
and Mexico (the "Companies' Employees") and the organizational
charts of Sistemas and Mexico; (ii) Schedule 4.24(a)(ii) sets
forth each and every collective bargaining, union, or other
employee association agreement; employment, managerial, advisory,
and consulting agreements; employee confidentiality or other
agreements protecting proprietary processes, formulae or
information to which Sistemas or Mexico is a party; and any
employee handbook(s) published by Sistemas or Mexico; (iii)
Schedule 4.24(a)(iii) lists each and every pension, retirement,
savings, profit sharing, bonus, deferred compensation, incentive
compensation, excess benefit, supplemental retirement, stock
purchase, stock option, severance, hospitalization, medical, life
insurance, dental, vision, disability, salary continuation,
supplemental unemployment, fringe benefit plan and any other
agreement or plan or funding arrangement sponsored, maintained,
or to which contributions are made or required to be made by
Sistemas or Mexico (such plans are referred to collectively as
the "Plans"); and the amount of any unfunded retirement
liabilities, including medical coverage, arising under any Plan
giving rise thereto; (iv) Schedule 4.24(a)(iv) lists every
Companies' Employee who has left Sistemas or Mexico since July
31, 1996, the date of leaving, the job title, and the reason for
his or her departure; (v) Schedule 4.24(a)(v) lists every
Companies' Employee of Sistemas or Mexico on authorized leaves of
absence who has a right to return to employment; (vi) Schedule
4.24(a)(vi) lists any contract or temporary employees of Sistemas
or Mexico and all terms and conditions of their engagement; (vii)
Schedule 4.24(a)(vii) lists all labor proceedings pending against
Sistemas or Mexico currently or at any time within the last three
years; and (viii) Schedule 4.24(a)(viii) sets forth the name,
date of employment, date of inception of benefits, job title,
monthly compensation, and eligibility for prizes, benefits,
perquisites, accrued bonus, accrued severance pay, accrued
pension benefits, accrued vacation benefits, and any litigation
involving each Companies' Employee.
(b) For each Plan disclosed or required to be disclosed in
Schedule 4.24(a)(iii): (i) each Plan that is required by
applicable law to be funded is so funded, and if a Plan is not
required to be funded, the benefits payable under such Plan are
adequately reserved for in the Financial Statements; (ii) there
are no actions, suits or claims (other than routine claims for
benefits in the ordinary course) pending or threatened with
respect to any Plan, and there are no facts which could give rise
to any such actions, suits or claims (other than routine claims
for benefits in the ordinary course); and (iii) a true and
complete copy of the text of each Plan (including amendments), if
previously reduced to writing, or a detailed description of the
material elements of each Plan if not reduced to writing, is
attached hereto as Schedule 4.24(b)(iii).
(c) With respect to Sistemas and Mexico, each of the
following is true:
(i) Each of Sistemas and Mexico is in compliance with all
applicable laws and collective bargaining agreements respecting
employment and employment practices, terms and conditions of
employment, wages and hours, termination payments, occupational
safety and health, and the Plans, and there is no action, suit or
<PAGE>
legal, or other proceeding or investigation pending or
threatened, against Sistemas or Mexico relating to any thereof,
and no basis exists for any such action, suit, or legal or other
proceeding or investigation;
(ii) there is no labor strike, dispute, slowdown or stoppage
pending or threatened against Sistemas or Mexico;
(iii) no agreement (including any collective bargaining
agreement) or order which is binding on Sistemas or Mexico in any
way limits or restricts Sistemas or Mexico from relocating or
closing any of its operations, or terminating any of its
employees;
(iv) Sistemas and Mexico have not experienced any organized
work stoppage and have a good relationship with the Companies'
Employees;
(v) the execution and delivery of this Agreement by
Datastream , and the consummation of the transactions
contemplated hereby will not result in, accelerate or increase
any obligation or liability (with respect to termination
payments, accrued benefits, or otherwise) to any Plan or to any
employee or former employee of Sistemas or Mexico or cause, or be
deemed to cause, the termination of any Companies' Employee,
except for officers whose resignations will be tendered at the
Closing; and
(vii) except to the extent (if any) to which provisions have
been made in the Financial Statements or otherwise described in
Schedule 4.24(c)(vii): (1) no liability has been incurred by
Sistemas or Mexico for breach of any employment agreement, for
redundancy payments or for compensation for wrongful dismissal or
for failure to comply with any order for the re-engagement of any
employee or for any other liability accruing from the termination
or variation of any contract of employment; (2) no gratuitous
payment has been made or promised by Sistemas or Mexico in
connection with the actual or proposed termination or suspension
of employment or variation of any contract of employment of any
employee or former employee; (3) no liability has been incurred
by Sistemas or Mexico for accident or injury to employees; (4) no
liability has been incurred by Sistemas or Mexico for any tax
contribution and/or retention of salaries and other remuneration
of personnel pertaining to their indirect or alleged employment
relationships with Sistemas or Mexico; and (5) all withholding
taxes, social security contributions and respective employer's
contributions have been made by Sistemas and Mexico as per their
respective due dates for all employees.
(d) All social security Taxes of any of Sistemas' or
Mexico's contractors providing services related to System's or
Mexico's ordinary and specific activity, which are required by
law to be withheld or collected have been duly withheld or
collected, and have been timely paid over to the appropriate
governmental authorities to the extent due and payable; and there
is no action, suit, proceeding, investigation, examination,
audit, claim or deficiency currently pending or threatened,
regarding any such social security Taxes applicable to such
contractors.
(e) Nothing expressed or implied in this Section 4.24
shall create any third party beneficiary or other rights in any
Companies' Employee or former employee or contractor (including
<PAGE>
any beneficiary or dependent thereof) of Sistemas or Mexico in
respect of continued employment (or resumed employment) with
Mexico or Sistemas. Further, no provision of this Section 4.24
shall create any such rights in any such persons in respect to
any benefits that may be provided, directly or indirectly, under
any employee compensation and benefit plans, programs, policies
and arrangements (including fringe benefits) or any plan or
arrangement which may be established by Sistemas or Mexico.
Notwithstanding anything contained herein to the contrary, no
provision of this Agreement shall constitute a limitation on
rights to amend, modify or terminate, after the Closing Date, any
specific plan or arrangement of Sistemas or Mexico.
4.25 Fees and Expenses. Neither Sistemas nor Mexico has
paid, nor are either of them 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 Sistemas, Mexico, nor
Datastream will be obligated to pay any fee, commission or
similar expense in connection with the transactions contemplated
by this Agreement.
4.26 Certain Payments. Neither Sistemas, Mexico nor any
director, executive, employee, consultant or Affiliate of
Sistemas or Mexico, including, without limitation, any
Stockholder, has, directly or indirectly, given or agreed to give
or solicited or received any gift, rebate or similar benefit to
any customer, supplier, governmental employee or other Person
which (i) might subject Sistemas or Mexico to any damage or
penalty in any civil, criminal or governmental litigation or
proceeding, (ii) if not given in the past might have had an
adverse effect on the assets, business or operation of Sistemas
or Mexico, or (iii) if not continued in the future might
adversely affect Sistemas' or Mexico's assets, business,
operations or prospects.
4.27 Ownership of Shares. The Stockholders are the legal
and beneficial owners of the Capital Stock set forth opposite
their name in Schedule 4.6. The Stockholders have good and valid
title to the Capital Stock, free and clear of all Liens. Upon
the delivery of the Capital Stock in the manner contemplated by
Section 3.2, the Stockholders will have conveyed to Datastream
good, valid and indefeasible title to such Capital Stock, free
and clear of all Liens.
4.28 Books and Records.
(a) The books of account of Sistemas and Mexico which have
been made available to Datastream or their employees or
representatives for inspection have been fully, properly and
accurately maintained, and contain in detail true, complete and
accurate records of all matters required by law to be entered
therein.
(b) The minute books of Sistemas and Mexico which have
been made available to Datastream or their employees or
representatives for inspection contain true and complete records
of all meetings and consents in lieu of meetings of the Board of
Directors (and any committee thereof) and shareholders of
Sistemas and Mexico, respectively, and accurately reflect all
transactions referred to in such minutes and consents in lieu of
meeting. The stock books of the of Sistemas and Mexico which
have been made available to Datastream or their employees or
representatives for inspection are true and complete.
<PAGE>
4.29 Account Payables. The account payables that will be
set forth on the Financial Statements as of the Closing will
represent valid obligations owed by Mexico or Sistemas for goods
or services actually received, will be incurred in the ordinary
course of business consistent with past practices of Sistemas or
Mexico, and will represent transactions between Sistemas or
Mexico and third parties entered into on an arm's-length basis.
4.30 Receivables. All accounts receivable of Sistemas or
Mexico as of the Closing Date will have been arisen from bona
fide transactions in the ordinary course of business of Sistemas
or Mexico. Such receivables will be collectible in the ordinary
course of business in the aggregate amounts thereof in accordance
with their terms, subject only to a reserve for bad debts
computed in a manner consistent with past practice of Sistemas or
Mexico and reasonably estimated to reflect the probable results
of collection.
4.31 Customers. During the last two years, no major
customer of Mexico or Sistemas, has canceled or otherwise
terminated, or made any written or unwritten threat to Mexico,
Sistemas or the Stockholders or to any of their respective
Affiliates to cancel or otherwise terminate, for any reason,
including the consummation of the transactions contemplated
hereby, its relationship with Sistemas or Mexico, or has at any
time decreased materially its services or supplies to Sistemas or
Mexico or its usage of the services or products of Sistemas or
Mexico. To Stockholders' best knowledge, no customer of Mexico or
Sistemas intends to cancel or otherwise terminate its
relationship with Mexico or Sistemas.
ARTICLE V REPRESENTATIONS AND WARRANTIES OF DATASTREAM
REPRESENTATIONS AND WARRANTIES
OF DATASTREAM AND AQSUB
Datastream hereby represents and warrants to the
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. Datastream 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.
<PAGE>
5.2 Authority. Datastream has all requisite corporate
power and authority to enter into this Agreement and each other
Transaction Document to which it is a party, to perform its
obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby, and the execution
and delivery of this Agreement and each other Transaction
Document to which it is a party by Datastream and the
consummation by Datastream of the transactions contemplated
hereby and thereby have been duly authorized by all necessary
corporate action on the part of Datastream . This Agreement and
each other Transaction Document to which Datastream is a party
has been duly executed and delivered by Datastream and, assuming
due execution and delivery of this Agreement and each other
Transaction Document by the other parties hereto and thereto,
this Agreement and each other Transaction Document to which
Datastream is a party constitutes the valid and binding
agreement of Datastream enforceable in accordance with its
terms except as enforceability may be limited by equitable
principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar laws from time to time in effect affecting
the enforcement of creditors' rights generally.
5.3 Noncontravention. The execution, delivery and
performance by Datastream of this Agreement and each other
Transaction Document to which Datastream is a party, the
consummation of the transactions contemplated hereby and thereby,
and compliance by Datastream with the provisions hereof and
thereof, will not:
(a) conflict with, result in a violation of, result in
a breach of, or cause a default under (with or without notice, or
lapse of time, or both), or give rise to a right of termination,
amendment, cancellation or acceleration of any obligation
contained in, or 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 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 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;
(c) require the consent, approval, order or
authorization of, or registration, declaration or filing with,
any Governmental Authority to be obtained by Datastream in
connection with the execution and delivery of this Agreement or
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
<PAGE>
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 Datastream 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 for the transfer and delivery of
the certificates representing shares of 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 Stockholders set forth in Section 4.4
hereof, the offer and sale of the shares of Datastream Common
Stock to be issued as Stock Consideration will be issued in
compliance with Regulation S.
5.9 Financial Statements. The consolidated financial
statements (including the related notes) of Datastream and its
consolidated Subsidiaries included in the SEC Documents were
prepared in accordance with generally accepted United States
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 which provide
reasonable assurance that (i) transactions are executed in
<PAGE>
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 United States 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 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 Stockholders
shall be responsible for the Expenses and the Stockholders hereby
jointly and severally agree to hold Sistemas, Mexico and
Datastream harmless therefrom.
6.2 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 best efforts to obtain all
necessary or appropriate governmental and third-party waivers,
consents and approvals.
6.3 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.
6.4 Release. Each of the Stockholders does hereby release
and forever discharge Sistemas and Mexico, their officers and
directors and each of the other 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 Stockholder has had, now has or may hereafter
have against Sistemas or Mexico, any successor to Sistemas or
Mexico or to their respective businesses, any of the officers or
directors of Sistemas or Mexico (in their capacity as such) or
any other Stockholder (in their capacity as such).
<PAGE>
6.5 Amounts Payable By Stockholders On or before the
Closing Date, each Stockholder who shall owe any indebtedness to
Sistemas or Mexico (or any Affiliate of Sistemas or Mexico) or
whose Affiliate shall owe any indebtedness to Sistemas or Mexico
(or any Affiliate of Sistemas or Mexico) shall repay any such
amounts to Sistemas or Mexico, as appropriate, in full.
6.7 Resale Restrictions. Each Stockholder agrees not to
resell or cause the resale of the Datastream Common Stock
received by such 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 (1) year after the Closing.
6.8 Removal of Regulation S Legend. Upon the expiration of
the one (1) year "distribution compliance period" (as such term
is defined in Regulation S) and upon the request of any
Stockholder, Datastream shall cause the Regulation S Legend to be
removed from the certificates representing the shares of
Datastream Common Stock to be issued as Stock Consideration, or
issue replacement certificates.
6.9 Guarantee of Performance. The Stockholders guarantee
the performance by Sistemas and Mexico of each and every
obligation of Sistemas and Mexico hereunder.
6.10 Transaction Documents. At the Closing, Datastream and
the Stockholders shall execute and deliver the Transaction
Documents.
6.11 Authorization of Spouse. At the Closing Datastream
shall have been furnished by each of the Stockholders with
authorization of his spouse substantially in the form attached
hereto as Schedule [6.11] granting her consent as required by
Section 1277 of the Argentine Civil Code.
6.12 Conduct of Business Prior to the Closing Date.
The Stockholders agree that from the date hereof to the
Closing Date:
(a) Except as contemplated by this Agreement or permitted
by written consent of Datastream, the Stockholders shall cause
Sistemas and Mexico to operate their respective business only in
the ordinary course, and in compliance with all applicable laws,
and to preserve the goodwill and relationships of each company
with its customers and others having business relations with
Sistemas or Mexico.
(b) The Stockholders shall preserve the business
organization of Sistemas and Mexico intact, except for changes
contemplated by this Agreement or specifically authorized in
writing by Datastream, and shall use their best efforts to keep
available to Datastream the services of the Companies' Employees.
(c) The Stockholders shall cause Sistemas and Mexico to
maintain accurate books and records in accordance with Argentine
or Mexican GAAP (as applicable) on a basis consistent with the
<PAGE>
Financial Statements. Such books and records shall accurately
reflect the assets and liabilities of the Company. The
Stockholders shall cause the Company to maintain accounting
controls to monitor that: (i) all transactions, including all
payments from Sistemas or Mexico's bank account are executed with
Datastream authorization; and (ii) all transactions are recorded
as necessary to permit preparation of financial statements and to
maintain the accounting of such Companies' assets.
(d) The Stockholders shall not take, and shall not permit
the Company to take, any action that would cause any of the
representations and warranties of the Stockholders in this
Agreement not to be true and correct as of the Closing Date. The
Stockholders shall give Datastream prompt notice of any event,
condition or circumstance that would constitute a breach or
violation of any representation or warranty or covenant or
agreement of the Stockholders in this Agreement.
ARTICLE VII
CONDITIONS PRECEDENT OF DATASTREAM AND AQSUB
The obligation of Datastream to consummate the transactions
contemplated by this Agreement is subject to the fulfillment by
the Stockholders on or prior to the Closing Date of the following
conditions, which may be waived by Datastream:
7.1 Representations and Warranties. The representations
and warranties of the Stockholders contained in this Agreement or
in any certificate or document delivered to Datastream pursuant
hereto shall be deemed to have been made again at and as of the
Closing Date and shall then be true and correct. The
Stockholders shall have performed and complied with all
agreements and conditions required by this Agreement to be
performed or complied with by the Stockholders on or prior to the
Closing Date. The Buyer shall have been furnished with a
certificate of the Stockholders, dated as of the Closing Date,
certifying to the foregoing.
7.2 Authorization of Spouse. Datastream shall have been
furnished by the Stockholders with authorization of his spouse
substantially in the form attached hereto as Schedule 6.11
granting her consent as required by Section 1277 of the Argentine
Civil Code.
7.3 No Actions. No Proceeding or investigation before any
court or governmental or regulatory authority shall be pending or
threatened (a) seeking to restrain, prevent or change the
transactions contemplated hereby, (b) questioning the legality or
validity of any such transactions, (c) seeking damages in
connection with any such transactions, or (d) seeking damages or
remedies that could be expected to result in a Material Adverse
Effect.
7.4 Consents. All consents of, filings with and
notifications to any governmental authorities, regulatory
agencies or other Persons necessary for the execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby and for the continued operation
<PAGE>
after the Closing of the business of Sistemas and Mexico in
substantially the same manner heretofore conducted by the Company
shall have been obtained or effected.
7.5 Material Adverse Effect. No Material Adverse Effect
shall have occurred prior to Closing and no facts or
circumstances shall have occurred that could be expected to
result in a Material Adverse Effect.
7.6 Resignations. All resignations of directors and
officers of Sistemas and Mexico, as requested by Datastream and
shown on Schedule 3.2 hereof shall have been delivered to
Datastream.
7.7 Share Certificates. The Stockholders shall have
delivered to Datastream aggregate share certificates representing
100% of the Capital Stock of Sistemas and Mexico.
7.8 Escrow Agreement. Datastream, Stockholders and the
Escrow Agent shall have executed and delivered the Escrow
Agreement.
7.9 Services Agreement; Noncompetition and Confidentiality
Agreement. Datastream, Sistemas and Carlos Pallotti shall have
executed and delivered the Services Agreement and the
Noncompetiton and Confidentiality Agreement.
7.10 Capital Stock of Mexico. The Stockholders shall have
caused all of the capital stock of Mexico to be assigned and
transferred as follows: 990 shares to Datastream International
and 10 shares to Sistemas;
7.11 Capital Stock of Sistemas. The Stockholders shall have
caused all of the capital stock of Sistemas to be registered on
the public register of shares as ordinary, nominative and
endorsable.
7.12 Completion of Due Diligence Review. Datastream shall
have completed its due diligence review of the books, records,
Financial Statements and operations of Sistemas and Mexico and
shall not have found any Material information that would cause it
to believe that the purchase of the Capital Stock of Sistemas and
Mexico is not in the best interests of Datastream or Datastream's
stockholders.
7.13 Transfers of Software. The Stockholders shall have
transferred to Sistemas and complied with all necessary filings
and registrations with respect to all software registered under
the name of either of the Stockholders.
ARTICLE VIII
CONDITIONS PRECEDENT OF THE STOCKHOLDERS
<PAGE>
The obligation of the Stockholders to consummate the
transactions contemplated hereby is subject to the fulfillment by
Datastream, on or prior to the Closing Date, of the following
conditions, which may be waived by the Stockholders:
8.1 Representations and Warranties. The representations
and warranties of Datastream contained in this Agreement or in
any certificate or document delivered to the Stockholders
pursuant hereto shall be deemed to have been made again at and as
of the Closing Date and shall then be true and correct.
Datastream shall have performed and complied with all agreements
and conditions required by this Agreement to be performed or
complied with by it prior to or on the Closing Date. The
Stockholders shall have been furnished a certificate of
Datastream, dated as of the Closing Date, certifying to the
foregoing.
8.2 Consents. All consents of, filings with and
notifications to any governmental authorities, regulatory
agencies or other Persons necessary for the execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby shall have been obtained or
effected.
8.3 Payment of Purchase Price. Datastream shall have paid
to Stockholders the Cash Consideration and shall have delivered
the Stock Consideration to the Escrow Agent in accordance with
Section 2.2. of the Agreement.
8.4 No Actions. No Proceeding or investigation before any
court or governmental or regulatory authority shall be pending or
threatened seeking (a) to restrain, prevent or change the
transactions contemplated hereby, (b) questioning the legality or
validity of any such transactions, (c) seeking damages in
connection with any such transactions, or (d) seeking damages or
remedies that could be expected to result in a Material Adverse
Effect.
ARTICLE VII SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND
INDEMNIFICATION
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES AND INDEMNIFICATION
9.1 Survival of Representations and Warranties.
(a) All representations, warranties, agreements,
covenants and obligations made or undertaken by Sistemas, Mexico
or any of the Stockholders in this Agreement are Material, have
been relied upon by Datastream and shall survive the Closing
hereunder, and shall not merge in the performance of any
obligation by any party hereto. Each of Sistemas, Mexico and the
Stockholders acknowledge and agree that prior to the Closing,
Datastream intend to perform such investigation of Sistemas and
Mexico as they each deem necessary or appropriate; however, no
investigation by Datastream, either before or after the Closing,
<PAGE>
will diminish or obviate any of the representations, warranties,
covenants or agreements made or to be performed by Sistemas,
Mexico or the Stockholders pursuant to this Agreement, and all
other agreements referred to herein, or the right of Datastream
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 Sistemas,
Mexico and the Stockholders, and shall survive the Closing
hereunder, and shall not merge in the performance of any
obligation by any party hereto. Datastream acknowledge and agree
that prior to the Closing, the Stockholders intend to perform
such investigation of Datastream as they each deem necessary or
appropriate; however, no investigation by the Stockholders,
either before or after the Closing, will diminish or obviate any
of the representations, warranties, covenants or agreements made
or to be performed by Datastream pursuant to this Agreement, and
all other agreements referred to herein, or the Stockholders'
right to rely upon such representations, warranties, covenants
and agreements.
9.2 Obligation of Stockholders to Indemnify. Each of the
Stockholders, jointly and severally, agree to indemnify and hold
Datastream harmless from and against any and all Liabilities
asserted against, imposed upon or incurred by Datastream by
reason of or resulting from a breach of any representation or
warranty or any covenant or agreement of Sistemas, Mexico or any
Stockholder contained in or made pursuant to this Agreement or
the Exhibits or Schedules hereto, from any misrepresentation in
or omission from any certificate or other instrument furnished or
to be furnished by Sistemas, Mexico or the Stockholders hereunder
or thereunder, or arising out of the conduct of the businesses of
Sistemas and Mexico through the Closing Date. The Stockholders
acknowledge that from and after the Closing, Sistemas and Mexico
will be owned by Datastream, and the Stockholders therefore agree
that any recovery against Sistemas or Mexico by Datastream after
the Closing will be against the Stockholders, who will have no
rights of reimbursement or contribution from Sistemas or Mexico.
9.3 Obligations of Datastream to Indemnify. Datastream
agrees to indemnify and hold the Stockholders harmless from and
against any and all Liabilities asserted against, imposed upon or
incurred by the Stockholders by reason of or resulting from a
breach of any representation or warranty or any covenant or
agreement of Datastream contained in or made pursuant to this
Agreement or the Exhibits or Schedules hereto, or from any
misrepresentation in or omission from any certificate or other
instrument furnished or to be furnished by Datastream hereunder
or thereunder.
9.4 Conditions of Indemnification with Respect to Third
Party 7.4imConditions of Indemnification with Respect to Third
Party Claims. Each party entitled to indemnification hereunder
(the "Indemnified Party"), shall give notice promptly after it
becomes aware of any Claim 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, if it shall so
elect, to assume (in conjunction with any other Indemnifying
Party) the defense of such Claim, 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
<PAGE>
Indemnifying Party shall elect not to assume the defense of such
Claim, the Indemnifying Party shall reimburse each Indemnified
Party for the reasonable fees and expenses of any counsel
retained by it. Notwithstanding the foregoing, should any
Indemnified Party reasonably conclude that there may be defenses
available to it that are different from or additional to those
available to the Indemnifying Party, the Indemnifying Party shall
have the right to direct the defense of such action on behalf of
the Indemnified Party but only after consultation with the
Indemnified Party. The Indemnifying Party shall also have the
right to settle or compromise any such Claim but only if it shall
first obtain the written consent of the Indemnified Party, which
consent shall not be unreasonably withheld. The terms
"Indemnified Party" and "Indemnifying Party," as used herein
shall, in appropriate circumstances, be deemed to mean
Datastream, on the one hand, and the Stockholders, on the other
hand.
9.5 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 Liability 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
Liability shall not exceed the amount of such Liability.
9.6 No Release for Fraud, Ownership Representations.
Notwithstanding anything contained herein to the contrary,
nothing contained in this Agreement shall relieve any 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 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.
9.7 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 Liability 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
Liability and provided further that no Stockholder shall have any
subrogation rights against Sistemas or Mexico.
9.8 Establishment of Escrow; Indemnification Not Limited.
(a) At the Closing, Datastream shall cause the
Transfer Agent to deliver certificates representing the Stock
Consideration to the Escrow Agent, which 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
<PAGE>
this Agreement and that such escrow in no way limits the amount
of Claims that may be made pursuant to this Agreement.
9.10 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
_10% per annum.
ARTICLE IX GENERAL PROVISIONS
GENERAL PROVISIONS
10.1 Amendment67. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the
parties hereto.
10.2 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.
10.3 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.
10.4 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
<PAGE>
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.
10.5 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):
(a) If to Datastream, to:
Datastream Systems, Inc.
50 Datastream Plaza
Greenville, South Carolina 29605
Attention:Larry G. Blackwell, Ph.D., P.E.
Telephone:(864) 422-5001
Telecopier: (864) 422-5000
with a copy to:
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Attention:B. Lynn Walsh, Esq.
Telephone: (404) 881-7185
Telecopier: (404) 881-7777
(b) If to Sistemas or Mexico, to:
Computec Sistemas S.A.
Florida 440-3 Piso
1005 Buenos Aires
Argentina
Attention:Michael Pace
or Rick Hewitt
(c) If to the Stockholders, to:
Carlos Pallotti and Beatriz Aizpeitia
with a copy to: Guillermo Ferrari
Tucuman 1452 - 103
(4050) Buenos Aires
Argentina
(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.
10.6 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.
10.7 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.
10.8 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
may assign all or any portion of the rights hereunder to any
Subsidiary of Datastream and Sistemas, Mexico and the
Stockholders shall, upon request, execute any amendment to the
Transaction Documents necessary to provide the benefits of this
Agreement to any such assignee.
10.9 Governing Law; Arbitration. This Agreement shall be
governed by and construed in accordance with the laws of the
United States as applicable to contracts made and to be performed
therein. All disputes between the parties hereto arising under or
in connection with this Agreement or any other Transaction
Document or further agreements resulting from this Agreement
<PAGE>
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
English and 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 to by Datastream on the one hand, and the Stockholders, on
the other hand, the place of arbitration shall be Atlanta,
Georgia. 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
8.9, the term "party," as used herein shall, in appropriate
circumstances, be deemed to mean Datastream on the one hand, and
the Stockholders, on the other hand.
10.10 Language of Agreement. The original, execution copy
or copies of this Agreement, and the Schedules and Exhibits
hereto shall be in the English language and such English version
shall be the only version used to interpret the provisions
thereof. All notices, communications and other documents given
or to be given under this Agreement shall be made in the English
language.
10.11 Contractual Currency. The specification of U.S.
dollars 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.
10.12 Agent for Service. Each of the Stockholders
authorizes and appoints Guillermo Ferrari 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.
10.13 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. Nothing in the Schedules shall be
<PAGE>
deemed adequate to disclose an exception to a representation or
warranty made herein unless the appropriate Schedule identifies
the exception with particularity and describes the relevant facts
in detail and makes specific reference to the Section of this
Agreement from which exception is taken. Without limiting the
generality of the foregoing, the mere listing (or inclusion of a
copy) of a document or other item shall not be deemed adequate to
disclose an exception to a representation or warranty made herein
(unless the representation or warranty has to do with the
existence of the document or other items itself). The parties
intend that each representation, warranty and covenant contained
herein shall have independent significance. If any party has
breached any representation, warranty or covenant contained
herein in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject
matter (regardless of the relative levels of specificity) which
the party has not breached shall not detract from or mitigate the
fact that the party is in breach of the first representation,
warranty or covenant.
[Signatures appear on following page]
<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/ Daniel H. Christie
-------------------------------
Title: Chief Financial
Officer
SISTEMAS: COMPUTEC SISTEMAS S.A.
By: /s/ Carlos Pallotti
-------------------------------
Title:
MEXICO: COMPUTEC SISTEMAS MEXICANA
S.A. DE C.V.
By: /s/ Carlos Pallotti
-------------------------------
Title:
STOCKHOLDERS:
/s/ Carlos Pallotti
-------------------------------
Carlos Pallotti
/s/ Beatriz Aizpeitia
-------------------------------
Beatriz Aizpeitia
<PAGE>
SCHEDULE 2.2
SEE SCHEDULE 4.6
<PAGE>
SCHEDULE 4.6
Authorized, issued and outstanding shares:
a) Computec Sistemas S.A.
Carlos Pallotti 660 shares
Beatriz Azpeitia 340 shares
b) Computec Sistemas Mexicana S.A. de C.V.
Carlos Pallotti 767 shares
Beatriz Azpeitia 233 shares
Detail of shares below:
Share Account Share Amount of Shareholder
Value Number Numbers Subscribed Shares Name
$100 1 0001 - 0010 10 Pallotti, Carlos
$100 2 0011 - 0020 10 Pallotti, Carlos
$100 3 0021 - 0030 10 Azpeitia, Beatriz
$100 4 0031 - 0040 10 Azpeitia, Beatriz
$400 5 0041 - 0080 40 Pallotti, Carlos
$400 6 0081 - 0120 40 Pallotti, Carlos
$400 7 0121 - 0160 40 Pallotti, Carlos
$400 8 0161 - 0200 40 Pallotti, Carlos
$400 9 0201 - 0240 40 Pallotti, Carlos
$400 10 0241 - 0280 40 Pallotti, Carlos
$400 11 0281 - 0320 40 Pallotti, Carlos
$400 12 0321 - 0360 40 Pallotti, Carlos
$400 13 0361 - 0400 40 Pallotti, Carlos
$400 14 0401 - 0440 40 Pallotti, Carlos
$400 15 0441 - 0480 40 Pallotti, Carlos
$400 16 0481 - 0520 40 Pallotti, Carlos
$400 17 0521 - 0560 40 Pallotti, Carlos
$400 18 0561 - 0600 40 Pallotti, Carlos
$400 19 0601 - 0640 40 Pallotti, Carlos
$400 20 0641 - 0680 40 Pallotti, Carlos
$1000 21 0681 - 0780 100 Azpeitia, Beatriz
$1000 22 0781 - 0880 100 Azpeitia, Beatriz
$1000 23 0881 - 0980 100 Azpeitia, Beatriz
$10 24 0981 - 0990 10 Azpeitia, Beatriz
$10 25 0991 - 1000 10 Azpeitia, Beatriz
<PAGE>
EXHIBIT 4.1
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made as of
August 28, 1998, by and among Datastream Systems, Inc., a
corporation organized and existing under the laws of the
State of Delaware ("Datastream"), the stockholders of
Computec Sistemas S.A., a corporation organized and
existing under the laws of the Republic of Argentina
("COMPUTEC"), listed on the signature pages hereto (the
"Stockholders"), and Alston & Bird , LLP, as escrow agent
(the "Escrow Agent").
RECITALS
WHEREAS, Datastream and the Stockholders have entered into
that certain Share Purchase Agreement dated as of August
28, 1998 (the "Share Purchase Agreement"), providing for
the acquisition of COMPUTEC and its affiliated Company,
COMPUTEC Sistemas Mexicana S.A. de C.V. by Datastream and
an affiliate of Datastream through the purchase of all of
the capital stock of COMPUTEC outstanding on the Closing
Date (the "Transaction");
WHEREAS, pursuant to the Share Purchase Agreement, the
Stockholders are entitled to receive, at the Closing of the
Transaction, an aggregate of 44,304 shares of Datastream
Common Stock as a portion of the consideration for such
Transaction;
WHEREAS, the Share Purchase Agreement provides that all of
such shares of Datastream Common Stock (the "Escrow
Shares") shall be delivered to the Escrow Agent as security
for the representations, warranties, covenants and
agreements made by the 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 Stockholders is set forth
on Schedule 2.2 to the Share Purchase Agreement;
WHEREAS, the execution and delivery by the Stockholders of
this Agreement is a condition precedent to the obligations
of Datastream to effect the Transaction under the Share
Purchase Agreement; and
WHEREAS, Alston & Bird , LLP is willing to accept delivery
of the Escrow Shares from the 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 44,304 shares of Datastream Common Stock deposited in
Escrow hereunder, any shares of Datastream Common Stock
<PAGE>
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 price for one (1) 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 Stockholders hereby designate and
appoint Alston & Bird , LLP to serve as Escrow Agent
hereunder, and B. Lynn Walsh 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 Stockholder
shall deliver written instructions to the Transfer Agent
directing the Transfer Agent to deliver to 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
Stockholder's attorney-in-fact for the purpose of executing
and delivering the stock powers and instructions necessary
to effect the distributions contemplated by this Agreement
. The 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 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 Stockholder a power of
attorney giving each 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 Datastream 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 COMPUTEC
after the Closing as a result of any breach of a
representation, warranty, covenant or agreement or other
<PAGE>
breach of the Share Purchase Agreement by the 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 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 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
Stockholders' Representative. If the Stockholders wish to
dispute the Claim against the Escrow contained in the Notice
of Claim, the Stockholders' Representative shall send a
notice to the Escrow Agent that the 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 twenty (20) days after the receipt by the Escrow
Agent of the Notice of Claim. Notwithstanding the foregoing,
<PAGE>
the Stockholders shall have no right to dispute any Claim
related to a real or potential tax, social security and/or
labor liability of any nature whatsoever.
(b) If the Escrow Agent receives a Notice of Dispute
from the Stockholders' within (twenty (20)) 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 Stockholders' Representative within (twenty
(20)) 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 Stockholder's name pro
rata in accordance with the percentages set forth in
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) twelve months after the Closing Date of the
Transaction (the "Termination Date") with respect to
22,152 of the Escrow Shares and eighteen months with
respect to the remaining 22,152 Escrow Shares, unless
the Escrow Agent shall have received:
(i) any Notice of Claim for which the (twenty
(20)) day period for filing a Notice of Dispute shall not
have expired as for which the Notice of Dispute does not
apply (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").
<PAGE>
(b) In the event that on the Termination Date the
Escrow Agent shall be in possession of an Outstanding Notice
of Claim or an Outstanding Notice of Dispute, this Agreement
shall remain in effect and the Escrow Agent shall release,
as soon as practicable, to the 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 Termination Date the
Escrow Agent shall not be in possession of an Outstanding
Notice of Claim or an Outstanding Notice of Dispute, the
Escrow Agent shall release, as soon as practicable, the
number of Escrow Shares then held to the 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 Stockholders representing the balance
of such Stockholder's Escrow Shares and deliver the same to
the Escrow Agent.
11. Manner of Release of the Escrow Shares to the Stockholders.
Whenever the Escrow Agent determines that it is required to
release some or all of the Escrow Shares to the
Stockholders, 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;
<PAGE>
(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 Stockholders representing the number of
Escrow Shares to be released to each 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 Stockholders representing the balance
of such COMPUTEC Stockholder's Escrow Shares; and
(iii)deliver the stock certificates representing
the Escrow Shares to be released to the Stockholders to the
COMPUTEC Stockholder's Representative and deliver the stock
certificates representing the balance of each of the
COMPUTEC 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
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, COMPUTEC and the Stockholders.
(c) The Escrow Agent shall not be responsible or
liable in any manner whatsoever for the performance of or by
Datastream, COMPUTEC and the 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.
<PAGE>
(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 the parties
hereto, 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 and Successor 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 no
compensation. Any successor escrow agent appointed
hereunder has the right to receive compensation in
accordance with his/its normal fee schedule. Datastream,
on the one hand, and the Stockholders (jointly and
severally) on the other hand, shall be equally responsible
for such compensation.
15. Indemnification.
(a) Each of Datastream, on the one hand, and the
Stockholders, on the other hand, agree to indemnify and hold
the Escrow Agent harmless from and against any and all
<PAGE>
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 receives
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 of
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 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
<PAGE>
with a copy to: Alston & Bird, LLP
1201 West Peachtree Street
Atlanta, Georgia 30309
Attn: B. Lynn Walsh, Esq.
Facsimile: (404) 881-7777
If to the Stockholders: Guillermo E. Ferrari
Tucuman 1452 - 1 B
1050 Buenos Aires
Argentina
If to the Escrow Agent: Alston & Bird, LLP
1201 West Peachtree Street
Atlanta, Georgia 30309
Attn: B. Lynn Walsh, Esq.
Facsimile: (404) 881-7777
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 U.S. dollars, 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), and setting forth the aggregate amount of all
Claims for which Datastream is seeking or has sought
indemnification from the Stockholders. Any Notice of Claim
shall be prepared, executed and delivered to the Escrow
Agent by Datastream or its legal counsel.
(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 U.S. dollars, 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 such Escrow Shares are to be released. Each
Notice of Settlement must be signed by both an authorized
officer of Datastream and all of the 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 U.S. dollars, of the
<PAGE>
Claim against the Escrow, and shall also indicate in reasonable
detail the reasons for the dispute of the Notice of Claim. The
Notice of Dispute shall be executed by all of the Stockholders
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 United States of America.
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 intended 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/ Daniel H. Christie__________
Title: __CFO__________________
ALSTON & BIRD, LLP
ESCROW AGENT: By: _/s/ B. Lynn Walsh_____________
[Signatures continue on following page.]
<PAGE>
STOCKHOLDERS:
/s/ Carlos Pallotti
--------------------------
Carlos Pallotti
/s/ Beatriz Aizpeitia
------------------------------------
Beatriz Aizpeitia
Accepted by:
COMPUTEC STOCKHOLDERS'
REPRESENTATIVE:
/s/ Guillermo Ferrari
------------------------------------
Guillermo Ferrari
