<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
The viaLink Company
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
92552Q 10 1
- --------------------------------------------------------------------------------
(CUSIP Number)
Robert C. Donohoo
i2 Technologies, Inc.
909 East Las Colinas Boulevard
16th Floor
Irving, Texas 75039
(214) 860-6000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 12, 1999
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
[ ]
(Continued on following pages)
<PAGE> 2
- ------------------------ ------------------------------
CUSIP NO. 92552Q 10 1 13D
- ------------------------ ------------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
i2 TECHNOLOGIES, INC.
75-2294945
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ] (b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [X]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER 428,849
OF -----------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY NONE
OWNED BY -----------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 428,849
WITH -----------------------------------------------
10 SHARED DISPOSITIVE POWER
NONE
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
428,849
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
11.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE> 3
ITEM 1. SECURITY AND ISSUER.
This statement on Schedule 13D relates to the common stock, par value
$0.001 per share (the "Common Stock"), of The viaLink Company, an Oklahoma
corporation (the "Issuer"). The principal executive offices of the Issuer are
located at 13800 Benson Road, Suite 100, Edmond, Oklahoma 73013.
ITEM 2. IDENTITY AND BACKGROUND.
(a) The name of the person filing this statement is i2 Technologies, Inc.,
a Delaware corporation ("i2").
(b) The address of the principal office and principal business of i2 is 909
East Las Colinas Boulevard, 16th Floor, Irving, Texas 75039. The business
address of each of i2's directors and executive officers, as of the date hereof,
is c/o i2 Technologies, Inc., 909 East Las Colinas Boulevard, 16th Floor,
Irving, Texas 75039.
(c) i2 is a leading provider of electronic business process optimization
software solutions, licensed as part of the RHYTHM family of products. Set forth
in Schedule A is the name and present principal occupation or employment and the
name, principal business and address of any corporation or other organization in
which such employment is conducted, of each of i2's directors and executive
officers, as of the date hereof.
(d) During the past five years, neither i2 nor, to i2's knowledge, any
person named in Schedule A, has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) During the past five years, neither i2 nor, to i2's knowledge, any
person named in Schedule A, was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which such person
was or is subject to a judgment, decree or final order enjoining future
violations of or prohibiting or mandating activity subject to Federal or State
securities laws or finding any violation with respect to such laws.
(f) The citizenship of each person named in Schedule A is set forth
thereon.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On October 12, 1999, pursuant to a Securities Purchase Agreement entered
into on that date with the Issuer (the "Securities Purchase Agreement"), i2
purchased from the Issuer (a) 233,918 shares of Common Stock and (b) a Common
Stock Purchase Warrant to purchase an additional 194,931 shares of Common Stock
(the "Warrant"). The Warrant expires on October 12, 2001 and is exercisable at a
price of $25.65 per share. The aggregate consideration for the foregoing
purchases was $5,000,000 in cash, which i2 financed from its working capital.
None of the purchase price was represented by funds or other consideration
borrowed or otherwise obtained for the purpose of acquiring, holding, trading or
voting the securities. On the same date, i2 and the Issuer also entered into a
Registration Rights Agreement, which provides i2 with certain registration
rights relating to the Common Stock.
1
<PAGE> 4
ITEM 4. PURPOSE OF TRANSACTION.
The purpose of the transaction was for i2 to acquire an equity interest
in the Issuer, in conjunction with entering into an Alliance Agreement and a
Software License with the Issuer.
(a) i2 has no plans or proposals which relate to or would result in the
acquisition by any person of additional securities of the Issuer, or the
disposition of securities of the Issuer, except for the possible acquisition of
shares of Common Stock upon exercise of, and pursuant to the terms of, the
Warrant.
(b) - (c) Not applicable.
(d) Pursuant to the Securities Purchase Agreement, i2 and the Issuer agreed
that, for so long as (i) i2 shall beneficially own (as such term is defined for
purposes of the Securities Act and the rules and regulations thereunder) not
less than 4.0% of the then issued and outstanding Common Stock and the Alliance
Agreement between i2 and the Issuer has not been terminated or (ii) i2 shall
beneficially own not less than 10.0% of the then issued and outstanding Common
Stock, i2 shall have the right to designate one nominee to the Board of
Directors of the Issuer. The Issuer has agreed to include such nomination in all
proxy and annual meeting materials provided to its shareholders, and to refrain
from making any competing nomination or recommending against election of such
nominee.
(e) - (j) Not applicable.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) i2 may be deemed to be the beneficial owner of all 428,849 shares of
Common Stock disclosed on this Statement, including 194,931 shares that i2 has
the right to acquire pursuant to the Warrant. To the knowledge of i2, such
Common Stock constitutes approximately 11.5% of the issued and outstanding
shares of Common Stock as of September 30, 1999.
(b) i2 has the sole power to vote and to dispose of all of the
above-described shares of Common Stock. To the knowledge of i2, no shares of
Common Stock are beneficially owned by any of the persons named in Schedule A.
(c) Except as disclosed in Item 3 above, neither i2 nor, to the knowledge
of i2, any person named in Schedule A, has effected any transaction in the
Common Stock during the past 60 days.
(d) - (e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
The Securities Purchase Agreement provides for (a) a right of first
refusal on behalf of i2 in the event of certain issuances of capital stock by
viaLink, (b) a restriction on
2
<PAGE> 5
disposition of the Common Stock and Warrants by i2 and (c) a standstill
agreement that restricts i2 from purchasing additional securities of, or taking
certain actions with respect to, the Issuer, subject to certain exceptions
contained in the Securities Purchase Agreement. Other than the Securities
Purchase Agreement, Registration Rights Agreement and Warrant, to the knowledge
of i2, there are no contracts, arrangements, understandings or relationships
(legal or otherwise) among the persons named in Item 2 and between such persons
and any person with respect to any securities of the Issuer, including but not
limited to transfer or voting of any of the securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or loss, or the giving or withholding of proxies.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
The following documents are filed as exhibits:
1. Securities Purchase Agreement, dated October 12, 1999, by and
between i2 and the Issuer.
2. Registration Rights Agreement, dated October 12, 1999, by and
between i2 and the Issuer.
3. The viaLink Company Common Stock Purchase Warrant No. i2-001, dated
October 12, 1999.
3
<PAGE> 6
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: October 19, 1999
i2 Technologies, Inc.
By: /s/ Robert C. Donohoo
--------------------------------
Robert C. Donohoo
Corporate Counsel
<PAGE> 7
SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS OF
i2 TECHNOLOGIES, INC.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT, INCLUDING NAME AND
NAME TITLE ADDRESS OF EMPLOYER CITIZENSHIP
- ---------------------------- -------------------------------- -------------------------------- -----------
<S> <C> <C> <C>
Sanjiv S. Sidhu Chairman of the Board and Chief * U.S.A.
Executive Officer
Sandeep R. Tungare Director and President, Demand * U.S.A.
Management
Gregory A. Brady President * U.S.A.
William M. Beecher Executive Vice President, * U.S.A.
Operations and Chief Financial
Officer
Hiten D. Varia Executive Vice President, * U.S.A.
Worldwide Development
Harvey B. Cash Director General Partner U.S.A.
InterWest Partners
Two Galleria Tower
13455 Noel Road
Suite 1670
Dallas, Texas 75240
Thomas J. Meredith Director Senior Vice President and Chief U.S.A.
Financial Officer
Dell Computer Corporation
One Dell Way
Round Rock, Texas 78682
</TABLE>
* Such individual's principal occupation and employment is as set forth
in the "Title" column, and such individual's employer is i2
Technologies, Inc., at 909 East Las Colinas Boulevard, 16th Floor,
Irving, Texas 75039.
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
1. Securities Purchase Agreement, dated October 12, 1999, by and
between i2 and the Issuer.
2. Registration Rights Agreement, dated October 12, 1999, by and
between i2 and the Issuer.
3. The viaLink Company Common Stock Purchase Warrant No. i2-001,
dated October 12, 1999.
</TABLE>
<PAGE> 1
EXHIBIT 1
SECURITIES PURCHASE AGREEMENT
BY AND BETWEEN
THE viaLINK COMPANY
AND
i2 TECHNOLOGIES, INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I PURCHASE AND SALE OF SECURITIES.........................................................................1
1.1 Purchase and Sale of Securities......................................................................1
ARTICLE II CLOSING................................................................................................2
2.1 The Closing..........................................................................................2
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................................................2
3.1 Organization, Standing and Power.....................................................................2
3.2 Capital Structure....................................................................................2
3.3 Authority............................................................................................3
3.4 SEC Documents; Financial Statements..................................................................4
3.5 Absence of Undisclosed Liabilities...................................................................4
3.6 Broker's and Finders' Fees...........................................................................4
3.7 Board Approval.......................................................................................5
3.8 No Material Adverse Change...........................................................................5
3.9 Litigation...........................................................................................5
3.10 Representations Complete.............................................................................5
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER............................................................5
4.1 Corporate Organization...............................................................................5
4.2 Authorization........................................................................................5
4.3 No Violation.........................................................................................6
4.4 Brokers and Finders..................................................................................6
4.5 Corporate Approval...................................................................................6
4.6 Investment Intent....................................................................................6
4.7 Access to Information................................................................................6
4.8 Accredited Investor..................................................................................6
4.9 Restricted Securities................................................................................6
4.10 Further Limitations on Disposition...................................................................7
ARTICLE V COVENANTS...............................................................................................7
5.1 Further Assurances...................................................................................7
5.2 Board Representation.................................................................................8
5.3 Right of First Refusal...............................................................................8
5.4 Market Stand-Off.....................................................................................9
5.5 Listing of Common Stock..............................................................................9
5.6 Standstill Agreement.................................................................................9
ARTICLE VI DELIVERIES AT CLOSING.................................................................................10
6.1 Warrant to Purchase Common Stock....................................................................10
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
6.2 Registration Rights Agreement.......................................................................10
6.3 Stock Certificate...................................................................................10
6.4 Legal Opinion.......................................................................................10
6.5 Payment of Consideration............................................................................12
ARTICLE VII SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION..........................................12
7.1 Survival of Representations.........................................................................12
7.2 Statements as Representations.......................................................................12
7.3 Indemnification by the Company......................................................................12
7.4 Indemnification by Purchaser........................................................................13
7.5 Limitation of Liability.............................................................................13
ARTICLE VIII MISCELLANEOUS PROVISIONS............................................................................13
8.1 Amendment and Modifications.........................................................................13
8.2 Waiver of Compliance................................................................................13
8.3 Expenses............................................................................................13
8.4 Remedies Waiver.....................................................................................13
8.5 Notices.............................................................................................14
8.6 Assignment..........................................................................................15
8.7 Publicity...........................................................................................15
8.8 Severability........................................................................................15
8.9 Arbitration of Disputes.............................................................................15
8.10 Governing Law.......................................................................................16
8.11 Counterparts........................................................................................16
8.12 Headings............................................................................................16
8.13 Third Parties.......................................................................................16
8.14 Further Assurances..................................................................................16
8.15 Schedules...........................................................................................16
8.16 Entire Agreement....................................................................................16
</TABLE>
LIST OF SCHEDULES
Company Disclosure Schedule
Purchaser Disclosure Schedule
ii
<PAGE> 4
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement ("AGREEMENT") is made and entered
into as of October 12, 1999, by and between THE viaLINK COMPANY, an Oklahoma
corporation (the "COMPANY"), and i2 TECHNOLOGIES, INC., a Delaware corporation
("PURCHASER").
RECITALS
WHEREAS, the Company is authorized to issue shares of the Company's
$0.001 par value common stock ("COMMON STOCK") and the warrant to purchase
shares of Common Stock described herein;
WHEREAS, in connection with and in consideration for the payment by
Purchaser to the Company of $5,000,000 at Closing (as hereinafter defined), the
Company shall issue to Purchaser (i) 223,884 shares (the "SHARES") of Common
Stock and (ii) a warrant to purchase an additional 186,567 shares of the
Company's Common Stock (the "WARRANT SHARES") at an exercise price of $26.80 per
share (the "WARRANT"), exercisable at any time on or before the date which is
two years following the Closing, all as more fully described herein and the
attachments hereto; and
WHEREAS, Purchaser and the Company have on this date executed and
entered into certain other agreements to set forth their mutual agreements
regarding (i) the marketing and sale of products and services and certain other
matters, in the form of an Alliance Agreement and a Software License, and (ii)
the registration of the Shares and the Common Stock issuable upon exercise of
the Warrant, in the form of a Registration Rights Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties hereinafter set forth, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF SECURITIES
1.1 Purchase and Sale of Securities. Subject to the terms and
conditions of this Agreement, and in reliance upon the representations,
warranties and agreements herein contained, on the Closing Date, the Company
shall issue to Purchaser, and Purchaser shall acquire from the Company, the
Shares and the Warrant free and clear of all liens, security interests, options,
rights, mortgages, pledges, restrictions on transferability of any type (other
than (i) restrictions on transferability as may be applicable under federal and
state securities laws, (ii) as set forth herein or therein and/or (iii) those
created by Purchaser) and Purchaser shall pay on the Closing Date to the Company
$5,000,000 (the "CASH CONSIDERATION") by wire transfer to such account as is
designated by the Company to Purchaser in writing.
<PAGE> 5
ARTICLE II
CLOSING
2.1 The Closing. The consummation of the sale and purchase of the
Shares and the Warrant referred to in Section 1.1 (the "CLOSING") shall take
place on October 12, 1999 at the offices of Winstead Sechrest & Minick P.C.,
5400 Renaissance Tower, 1201 Elm Street, Dallas, Texas 75270, or at such other
date, time or place as the parties hereto mutually agree, either verbally or in
writing. Such date is referred to herein as the "CLOSING DATE," and the Closing
shall be deemed to be effective as of 9:00 a.m., Central Time, on the Closing
Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in a document of even date herewith and delivered
by the Company to Purchaser prior to the execution and delivery of this
Agreement (the "COMPANY DISCLOSURE SCHEDULE"), the Company represents and
warrants to Purchaser as follows:
3.1 Organization, Standing and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization. The Company has the corporate power to own, lease
and operate its properties and to carry on its business as now being conducted
and as proposed to be conducted and is duly qualified to do business and is in
good standing in each jurisdiction in which the failure to be so qualified and
in good standing would have a material adverse effect on the Company. The
Company is not in violation of any of the provisions of its Certificate of
Incorporation or Bylaws.
3.2 Capital Structure. The authorized capital stock of the Company
consists of 30,000,000 shares of Common Stock, par value $0.001 per share and
10,000,000 shares of preferred stock, par value $0.001 per share, of which there
were issued and outstanding as of the close of business on September 30, 1999,
3,307,318 shares of Common Stock and no shares of preferred stock. All
outstanding shares of Common Stock have been duly authorized, validly issued,
fully paid and are nonassessable and free of any liens or encumbrances other
than any liens or encumbrances created by or imposed upon the holders thereof
and have been issued in compliance with all federal and state securities laws.
The Company has no subsidiaries. Except as set forth in Section 3.2 of the
Company Disclosure Schedule, there are no (a) options, warrants, stock
appreciation rights or other similar rights, agreements, arrangements or
commitments of any character obligating the Company to issue or sell shares of
its capital stock, (b) notes, bonds, debentures or other indebtedness of the
Company having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which the shareholders of
the Company may vote or (c) outstanding contractual obligations of the Company
to repurchase, redeem or otherwise acquire any shares of Common Stock or any
other capital stock of, or any equity interest in, the Company. The Shares, the
Warrant and the Warrant Shares (collectively, the "SECURITIES") have been duly
authorized for issuance and sale to the Purchaser pursuant to this Agreement and
are validly issued. The Shares are, and, when issued pursuant to the terms and
conditions set forth in the Warrant, the Warrant Shares will be, fully paid and
non-assessable, and no holder of Securities is or will be subject to personal
2
<PAGE> 6
liability with respect to the obligations of the Company by reason of being such
a holder. The Shares and the Warrant are, and the Warrant Shares, when issued,
shall be, free of preemptive rights or rights of first refusal created by
statute, the Company's Certificate of Incorporation or Bylaws or any agreement
to which the Company is a party or by which it is bound and, based on the
representations of Purchaser contained in Sections 4.6, 4.7 and 4.8 of this
Agreement, are and shall be issued in compliance with all federal and state
securities laws. Except for Form D filings required to perfect exemptions under
applicable federal and/or state securities laws and the filing of an application
to list additional shares of Common Stock with the Nasdaq SmallCap Market, no
filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign is necessary or required in connection with the due
authorization, execution and delivery of the Operative Agreements (as
hereinafter defined) or for the offering, issuance or sale of the Securities.
The form of certificate that will be used to evidence the Shares will comply in
all material respects with all applicable statutory requirements, with any
applicable requirements of the Certificate of Incorporation and Bylaws of the
Company and with the requirements of the Nasdaq SmallCap Market.
3.3 Authority. The Company has corporate power and authority to
enter into and perform its obligations under this Agreement, the Registration
Rights Agreement, the Alliance Agreement, the Software License and the Warrant
(collectively, the "OPERATIVE AGREEMENTS") and to consummate the transactions
contemplated by the Operative Agreements. The Company has taken all action
required by law, its Certificate of Incorporation and Bylaws or otherwise to
authorize the execution and delivery of this Agreement and the other Operative
Agreements and the consummation of the transactions contemplated hereby and
thereby. The Operative Agreements have been duly executed and delivered by the
Company. This Agreement and the other Operative Agreements are valid and binding
agreements of the Company enforceable in accordance with their terms, except
that: (a) the enforceability of this Agreement and the other Operative
Agreements may be subject to general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law; (b) the
enforceability of this Agreement and the other Operative Agreements is subject
to and may be limited by bankruptcy, insolvency, reorganization, arrangement,
moratorium, and other similar laws relating to or affecting the rights of
creditors generally; and (c) any rights to indemnification and contribution may
be limited by federal or state securities laws and public policy considerations.
The execution and delivery of this Agreement and the other Operative Agreements
does not, and the consummation of the transactions contemplated hereby and
thereby (including the issuance and sale of the Securities) and compliance by
the Company with its obligations under the Operative Agreements (a) shall not,
with or without notice or lapse of time, or both, conflict with or constitute a
breach of, or default or acceleration event under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company pursuant to (i) any provision of the Certificate of Incorporation or
Bylaws of the Company or (ii) any material mortgage, indenture, lease, contract
or other agreement or instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to the Company or its properties or assets. Assuming the accuracy of the
representations and warranties of Purchaser in Sections 4.6, 4.7 and 4.8 of this
Agreement and except as expressly contemplated by this Agreement or the
agreements, instruments and documents contemplated hereby, no consent, approval
order or authorization of, or registration, declaration or filing with, any
court, administrative agency or commission or
3
<PAGE> 7
other governmental authority (each a "GOVERNMENTAL ENTITY"), is required by or
with respect to the Company or in connection with the execution and delivery of
this Agreement or the other Operative Agreements or the consummation by the
Company of the transactions contemplated hereby or thereby, and (b) will not
result in any violation of any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of its
properties, assets or operations.
3.4 SEC Documents; Financial Statements. The Company has made
available to Purchaser each statement, report, registration statement (with each
prospectus in the form filed pursuant to Rule 424(b) of the Securities Act of
1933, as amended (the "SECURITIES ACT")), definitive proxy statement, and other
filing filed with the Securities and Exchange Commission ("SEC") by the Company
since December 31, 1998 (collectively, the "COMPANY SEC DOCUMENTS"). In
addition, the Company has made available to Purchaser all exhibits to the
Company SEC Documents filed prior to the date hereof. As of their respective
filing dates, the Company SEC Documents were filed on a timely basis and
complied in all material respects with the requirements of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT") and the Securities Act,
and none of the Company SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
in which they were made, not misleading except to the extent corrected by a
subsequently filed Company SEC Document. The financial statements of the
Company, including the notes thereto, included in the Company SEC Documents (the
"COMPANY FINANCIAL STATEMENTS") (i) have been prepared in accordance with the
published regulations of the SEC and in accordance with generally accepted
accounting principles ("GAAP") (except to the extent as may be indicated in the
notes thereto and with respect to interim Company Financial Statements included
in Quarterly Reports on Form 10-QSB (promulgated under the Exchange Act), as
required by Form 10-QSB) and (ii) fairly present the financial position of the
Company as of the respective dates thereof and the results of its operations and
cash flows for the periods indicated (including, in the case of any unaudited
interim financial statements, reasonable estimates of normal and recurring
year-end adjustments).
3.5 Absence of Undisclosed Liabilities. The Company has no
material obligations or liabilities of any nature (matured or unmatured, fixed
or contingent) other than (i) those set forth or adequately provided for in the
Balance Sheet included in the Company's Quarterly Report on Form 10-QSB for the
quarterly period ended June 30, 1999 (the "COMPANY BALANCE SHEET"), (ii) those
incurred in the ordinary course of business and not required to be set forth in
the Company Balance Sheet under generally accepted accounting principles, and
(iii) those incurred in the ordinary course of business since the Company
Balance Sheet Date and consistent with past practice.
3.6 Broker's and Finders' Fees. The Company has not incurred, nor
shall it incur, directly or indirectly, any liability for brokerage or finders'
fees or agents' commissions or investment bankers' fees or any similar charges
in connection with this Agreement or any transaction contemplated hereby.
4
<PAGE> 8
3.7 Board Approval. The Board of Directors of the Company has
approved this Agreement and the transactions contemplated hereby. No vote or
consent of the Company's stockholders is required for the consummation of the
transactions contemplated hereby.
3.8 No Material Adverse Change. Since the date of the Company
Balance Sheet, the Company has conducted its business in the ordinary course and
there has not occurred: (a) any material adverse change in the financial
condition, liabilities, assets or business of the Company other than continuing
operating losses and declining stock price; (b) any amendment or change in the
Certificate of Incorporation or Bylaws of the Company; or (c) any damage to,
destruction or loss of any assets of the Company, (whether or not covered by
insurance) that materially and adversely affects the financial condition or
business of the Company.
3.9 Litigation. There is no action, suit, proceeding, claim,
arbitration or investigation pending, or as to which the Company has received
any notice of assertion against the Company which in any manner challenges or
seeks to prevent, enjoin, alter or materially delay any of the transactions
contemplated by this Agreement.
3.10 Representations Complete. None of the representations or
warranties made by the Company herein or in any Schedule hereto, including the
Company Disclosure Schedule, or certificate furnished by the Company pursuant to
this Agreement, or the Company SEC Documents, when all such documents are read
together in their entirety, contains or shall contain at the Closing any untrue
statement of a material fact, or omits or shall omit at the Closing to state any
material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as disclosed in a document of even date herewith and delivered
by Purchaser to the Company prior to the execution and delivery of this
Agreement (the "PURCHASER DISCLOSURE SCHEDULE"), Purchaser represents and
warrants to Company as follows:
4.1 Corporate Organization. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Purchaser has full corporate power and authority to carry on its
business as it is now being conducted.
4.2 Authorization. Purchaser has full corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. Purchaser has taken all action required by law, its
Certificate of Incorporation and Bylaws or otherwise to authorize the execution
and delivery of this Agreement and the other Operative Agreements and the
consummation of the transactions contemplated hereby and thereby. This Agreement
and the other Operative Agreements are valid and binding agreements of Purchaser
enforceable in accordance with their terms, except that: (a) the enforceability
of this Agreement and the other Operative Agreements may be subject to general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law; and (b) the enforceability of this Agreement
and the other Operative Agreements may be subject to or limited by bankruptcy,
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<PAGE> 9
insolvency, reorganization, arrangement, moratorium, or other similar laws
relating to or affecting the rights of creditors generally.
4.3 No Violation. The execution and delivery of this Agreement and
the other Operative Agreements do not, and the consummation of the transactions
contemplated hereby and thereby shall not, conflict with, or result in any
violation of, or default under (with or without notice or lapse of time, or
both), or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of a benefit under (i) any provision of the Certificate
of Incorporation or Bylaws of Purchaser or (ii) any material mortgage,
indenture, lease, contract or other agreement or instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Purchaser or its properties or assets. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity is required by or with respect to Purchaser or in
connection with the execution and delivery of this Agreement or the other
Operative Agreements or the consummation by Purchaser of the transactions
contemplated hereby or thereby.
4.4 Brokers and Finders. Purchaser has not incurred, nor shall it
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or investment bankers' fees or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
4.5 Corporate Approval. All necessary corporate actions have been
taken by Purchaser for the approval of Purchaser to enter this Agreement and the
transactions contemplated hereby. No vote or consent of the stockholders of
Purchaser is required for the consummation of the transactions contemplated
hereby.
4.6 Investment Intent. Purchaser is purchasing the Shares and the
Warrant for its own account and not as a nominee or agent, and not with a view
to the resale or distribution of any part thereof, and Purchaser has no present
intention of selling, granting any participation in, or otherwise distributing
the same, and does not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participation to such person or to
any third person, with respect to any of such securities.
4.7 Access to Information. Purchaser has received or has had full
access to all the information it considers necessary or appropriate to make an
informed investment decision with respect to the Securities. Purchaser has had
an opportunity to ask questions of and receive answers from the Company and to
obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to Purchaser or to which the
Company has access.
4.8 Accredited Investor. Purchaser is an "accredited investor"
within the meaning of SEC Rule 501 of Regulation D, as presently in effect. The
principal place of business and the principal offices of the Purchaser are
located in Irving, Texas.
4.9 Restricted Securities. Purchaser understands that the
Securities are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in
transactions not involving a public offering and that under
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such laws and applicable regulations such securities may be resold without
registration under the Securities Act only in certain limited circumstances. In
this connection, Purchaser represents that it is familiar with SEC Rule 144, as
presently in effect, and understands the resale limitations imposed thereby and
by the Securities Act.
4.10 Further Limitations on Disposition. Purchaser agrees not to
offer, sell, exchange, transfer, pledge or otherwise dispose of any of the
Securities unless at that time either:
(a) such transaction is permitted pursuant to the provisions of
Rule 144 under the Securities Act or another exemption from
registration under the Securities Act and all applicable state
securities laws;
(b) a registration statement under the Securities Act (a
"REGISTRATION STATEMENT") covering such securities proposed to be sold,
transferred or otherwise disposed of, describing the manner and terms
of the proposed sale, transfer or other disposition, and containing a
current prospectus, is filed with the SEC and all applicable state
securities law agencies and made effective under the Securities Act and
all applicable state securities laws; or
(c) an authorized representative of the SEC and all applicable
state securities law agencies shall have rendered written advice to
Purchaser (with a copy thereof and of all other related communications
delivered to the Company) to the effect that the SEC and/or such state
securities law agencies will take no action, or that the staff of the
SEC and/or such state securities law agencies will recommend that the
SEC and/or such state securities law agencies, as applicable, take no
action, with respect to the proposed offer, sale, exchange, transfer,
pledge or other disposition if consummated.
All certificates representing the Securities deliverable to Purchaser
and any certificates subsequently issued with respect thereto or in substitution
therefor shall bear a legend that such securities may only be sold or disposed
of in accordance with (i) the provisions of the Securities Act, the rules and
regulations thereunder and any applicable state securities laws, (ii) pursuant
to an effective registration statement or (iii) pursuant to an exemption from
the registration/qualification requirements of the Securities Act and any
applicable state securities laws. The Company, at its reasonable discretion, may
cause stop transfer orders to be placed with its transfer agent with respect to
the certificates for such securities but not as to the certificates for any part
of such securities as to which said legend is no longer required.
ARTICLE V
COVENANTS
5.1 Further Assurances. Upon the terms and subject to the
conditions hereof, each of the parties hereto agrees to use commercially
reasonable efforts to take or cause to be taken all actions and to do or cause
to be done all things necessary, proper or advisable to consummate the
transactions contemplated by this Agreement and shall use commercially
reasonable efforts to obtain all necessary waivers, consents and approvals and
to effect all
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necessary registrations and filings to be obtained in connection with the
transactions contemplated by this Agreement.
5.2 Board Representation. For so long as (i) Purchaser shall
beneficially own (as such term is defined for purposes of the Securities Act and
the rules and regulations thereunder) not less than 4.0% of the then issued and
outstanding Common Stock and the Alliance Agreement has not been terminated or
(ii) Purchaser shall beneficially own not less than 10.0% of the then issued and
outstanding Common Stock, the Purchaser shall have the right to designate one
nominee to the Board of Directors of the Company. The Company shall include such
nomination in all proxy and annual meeting materials provided to its
shareholders, and shall not make any competing nomination or recommend against
election of such nominee.
5.3 Right of First Refusal. Subject to the terms and conditions
specified in this Section 5.3, the Company hereby grants to the Purchaser a
right of first refusal with respect to future sales by the Company of any shares
of, or securities convertible into or exercisable for any shares of, any class
of its capital stock (collectively, "Stock"). Each time the Company proposes to
offer any Stock, the Company shall first make an offering to the Purchaser in
accordance with the following provisions:
(a) the Company shall deliver a notice by certified mail
("Notice") to the Purchaser stating (i) its bona fide intention to
offer such Stock, (ii) the quantity of such Stock to be offered, and
(iii) the price (or reasonable price range) and terms, if any, upon
which it proposes to offer such Stock;
(b) by written notification received by the Company, within 20
calendar days after giving of the Notice, the Purchaser may irrevocably
elect to purchase or obtain, at the price and on the terms specified in
the Notice, up to that portion of such Stock which equals the
proportion that the number of shares of Common Stock issued and held
(including any shares issuable upon conversion of any Warrant then
held) by Purchaser bears to the total number of shares of common stock
of the Company then outstanding (assuming full conversion and exercise
of all convertible or exercisable securities);
(c) if all Stock which Purchaser is entitled to obtain pursuant to
Section 5.3(b) are not elected to be obtained as provided in Section
5.3(b), the Company may, during the 120-day period following the
expiration of the period provided in Section 5.3(b), offer the
remaining unsubscribed portion of such Stock to any person or persons
at a price not substantially less than, and upon terms not
substantially more favorable to the offeree than, those specified in
the Notice. If the Company does not enter into an agreement for the
sale of the Stock within such period, or if such agreement is not
consummated within 120 days of the execution thereof, the right
provided hereunder shall be deemed to be revived and such Stock shall
not be offered unless first reoffered to the Purchaser in accordance
herewith;
(d) the right of first refusal in this Section 5.3 shall not be
applicable (i) to the issuance or sale of shares of common stock (or
options therefor) to employees, officers, directors, advisors or
consultants of the Company for the primary purpose of soliciting or
retaining their employment, (ii) the issuance of securities pursuant to
the conversion or
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exercise of convertible or exercisable securities, (iii) the issuance
of securities in connection with a bona fide business acquisition of or
by the Company, whether by merger, consolidation, sale of assets, sale
or exchange of stock or otherwise, or (iv) the issuance and sale of
securities in an underwritten public offering if the managing
underwriter(s) of such offering shall notify Purchaser in writing that
the exercise of Purchaser's right of first refusal pursuant to this
Section 5.3 would be reasonably likely to materially adversely effect
the success of such offering; and
(e) the right of first refusal will terminate immediately prior to
the closing of any merger or consolidation of the Company (i) whereby
the Company's equity changes by more than 50% or (ii) in which the
Company is not the surviving entity if the shareholders of the Company
immediately prior to such merger or consolidation do not own at least
50% of the equity of the surviving entity after the closing of such
merger or consolidation.
5.4 Market Stand-Off. Notwithstanding anything to the contrary in
this Agreement, without the prior written consent of the Company, (a) Purchaser
shall not sell or otherwise dispose of Securities prior to the 90th day after
the Closing, and (b) if requested by the managing underwriter of any
underwritten public offering of Common Stock by the Company for its own account,
Purchaser shall agree not to sell or otherwise dispose of Securities held by
Purchaser in any transaction other than pursuant to such underwriting for such
period (not to exceed 180 days) as determined in the discretion of the Company
or such underwriter (such agreement to be in writing in a form satisfactory to
the Company and such managing underwriter), provided that Purchaser shall not be
required to enter into such an agreement unless each person or entity
participating in such offering, and each director and executive officer of the
Company, enters into a substantially identical agreement relating to such
underwriting. The Company may impose stop-transfer instructions to its transfer
agent with respect to the securities subject to the restriction described in
this Section 5.4 until the end of the applicable "lock-up" periods.
5.5 Listing of Common Stock. As soon as reasonably practicable
following the Closing Date, the Company will use its best efforts to cause the
Shares and Warrant Shares to be listed for trading on the Nasdaq SmallCap
Market.
5.6 Standstill Agreement. As of the date of this Agreement, except
as previously disclosed by Purchaser to the Company in writing, Purchaser
confirms that neither it nor its affiliates beneficially own any debt or equity
securities of the Company, or any direct or indirect options or other rights to
acquire any such securities (hereinafter collectively referred to as "COMPANY
SECURITIES"). Purchaser agrees that neither Purchaser nor any of its affiliates
will:
(a) except in accordance with the terms of a specific request from
the Company, propose or publicly announce or otherwise disclose an
intent to propose, or enter into or agree to enter into, singly or with
any other person (directly or indirectly), (i) any form of business
combination, acquisition (whether of securities or assets), or other
transaction relating to the Company or any majority-owned affiliate
thereof or (ii) any form of restructuring, recapitalization or similar
transaction with respect to the Company or any majority-owned affiliate
thereof,
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(b) make, initiate or participate in any demand, request or
proposal (other than a proposal made privately to the Board of
Directors of the Company or any officer of the Company) to amend, waive
or terminate any provision of this Agreement, or
(c) (i) except as expressly authorized by the last sentence of
this Section 5.6, acquire, or offer, propose or agree to acquire, by
purchase or otherwise, any Company Securities (now existing or
hereafter created), (ii) except in accordance with the terms of a
specific request from the Company, make, initiate, or in any way
participate in, any solicitation of proxies with respect to any Company
Securities (now existing or hereafter created) (including by the
execution of action by written consent), (iii) except in accordance
with the terms of a specific request from the Company, become a
participant in any election contest with respect to the Company, (iv)
except in accordance with the terms of a specific request from the
Company, participate in or encourage the formation of any partnership,
syndicate, or other group (A) which owns or seeks or offers to acquire
beneficial ownership of any Company Securities other than a
partnership, syndicate or other group which in the aggregate owns less
than 19.9% of the voting power of all then outstanding Company
Securities, (B) which seeks to effect control of the Company or (C) for
the purpose of circumventing any provision of this Agreement, or (v)
otherwise act, alone or in concert with others (including by providing
financing for another person), to seek or to offer to control or
influence, in any manner, the management, board of directors, or
policies of the Company and or its affiliates except pursuant to the
board nominee provided pursuant to Section 5.2.
Notwithstanding the foregoing, nothing contained herein will be deemed
to restrict Purchaser from taking any action under subsection (c)(i) above if,
upon consummation of such action, all Company Securities held by Purchaser,
directly or indirectly, would represent nineteen and nine tenths percent (19.9%)
or less of the voting power of all then outstanding Company Securities.
ARTICLE VI
DELIVERIES AT CLOSING
6.1 Warrant to Purchase Common Stock. The Company shall execute
and deliver to Purchaser the Warrant.
6.2 Registration Rights Agreement. The Company and Purchaser shall
execute and enter into the Registration Rights Agreement.
6.3 Stock Certificate. The Company shall issue and deliver to
Purchaser a stock certificate for the Shares in accordance with the provisions
of this Agreement.
6.4 Legal Opinion. Counsel for the Company shall deliver, in form
and substance satisfactory to counsel for the Purchaser, a legal opinion to the
effect set forth below:
(a) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Oklahoma. The Company has corporate power and authority to own, lease
and operate its properties and to conduct its
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<PAGE> 14
business as described in the Company SEC Documents and to enter into
and perform its obligations under each of the Operative Agreements.
(b) The Securities have been duly authorized for issuance and sale
to the Purchaser pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement against payment of
the consideration set forth herein or in the Warrant, as the case may
be, will be validly issued and fully paid and non-assessable, and no
holder of Securities is or will be subject to personal liability with
respect to the obligations of the Company by reason of being such a
holder. The issuance of the Securities is not subject to preemptive or
other similar rights of any securityholder of the Company created by
statute, under the Certificate of Incorporation or Bylaws of the
Company or under any documents or agreements filed or incorporated by
reference by the Company with the SEC as exhibits to its registration
statement on Form SB-2 (Reg. No. 333-83315), including all amendments
thereto (the "SEC EXHIBITS").
(c) The Operative Agreements have been duly authorized, executed
and delivered by the Company. This Agreement, the Registration Rights
Agreement and the Warrant constitute the valid and binding obligations
of the Company, enforceable against the Company in accordance with
their respective terms, except as may be subject to or limited by (i)
bankruptcy, insolvency, reorganization, arrangement, moratorium,
fraudulent transfer and other similar laws affecting the rights of
creditors generally and (ii) general equitable principles (whether
relief is sought at law or in equity), including concepts of
materiality, reasonableness, good faith and fair dealing; and except as
any rights to indemnification and contribution may be limited by
federal or state securities laws and public policy considerations.
(d) The form of certificate used to evidence the Shares complies
in all material respects with all applicable statutory requirements,
with any applicable requirements of the Certificate of Incorporation
and Bylaws of the Company and the requirements of the Nasdaq SmallCap
Market.
(e) Except for Form D filings required to perfect exemptions under
applicable federal and/or state securities laws and the filing of an
application to list additional shares of Common Stock with the Nasdaq
SmallCap Market, no filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign is necessary or
required in connection with the due authorization, execution and
delivery of the Operative Agreements or for the offering, issuance or
sale of the Securities.
(f) The execution, delivery and performance of the Operative
Agreements and the consummation of the transactions contemplated in the
Operative Agreements (including the issuance and sale of the
Securities) and compliance by the Company with its obligations under
the Operative Agreements do not and will not, whether with or without
the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or acceleration event under or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company pursuant to any SEC Exhibit
to which the Company is a party or by which it may be bound, or to
which
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any of the property or assets of the Company are subject (except for
such conflicts, breaches or defaults or liens, charges or encumbrances
that would not have a material adverse effect on the Company), nor will
such action result in any violation of the provisions of the
Certificate of Incorporation or Bylaws of the Company, or any
applicable law, statute, rule, regulation, judgment, order, writ or
decree, known to such counsel, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any of its properties, assets or operations.
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
6.5 Payment of Consideration. Purchaser shall deliver the Cash
Consideration specified in Section 1.1.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNIFICATION
7.1 Survival of Representations. All representations and
warranties of the parties as contained in this Agreement (including the
Disclosure Schedules) shall survive the Closing and shall terminate on the date
that is one year after the Closing; provided that there shall be no limitation
period for matters involving fraud or intentional misrepresentation nor for
covenants and agreements of the parties.
7.2 Statements as Representations. All statements contained in the
Company Disclosure Schedule and any certificate delivered pursuant to this
Agreement shall be deemed representations and warranties within the meaning of
Section 7.1 hereof.
7.3 Indemnification by the Company . Subject to the limitations
set forth in this Article VII, the Company hereby agrees to indemnify, defend
and hold harmless Purchaser, any subsidiary, director, officer, employee, agent
or representative of Purchaser (individually, a "PURCHASER INDEMNITEE" and
collectively, "PURCHASER INDEMNITEES") from and against all demands, claims,
actions or causes of action, assessments, losses, damages, liabilities, costs
and expenses, including, without limitation, interest, penalties, attorneys'
fees and expenses (collectively, "DAMAGES") asserted against, resulting from,
imposed upon or incurred by the Purchaser Indemnitees or any Purchaser
Indemnitee, resulting from, or arising out of any breach of any representation,
warranty or agreement of the Company, contained in or made pursuant to this
Agreement. Exercise of the foregoing indemnification rights shall be the sole
remedy of any Purchaser Indemnitee with respect to any breach by the Company of
its representations or warranties contained in this Agreement. The maximum
aggregate liability of the Company pursuant to this Section 7.3 with respect to
any breach by the Company of such representations or warranties will be limited
to Five Million and 00/100 Dollars ($5,000,000.00), plus any
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<PAGE> 16
amounts paid by Purchaser to exercise the Warrant, whether such liability is
asserted in an action brought in contract, in tort or pursuant to some other
theory and whether the possibility of such liability was made known to or was
foreseeable by the Company. Accordingly, the Purchaser agrees to assume the
responsibility for insuring against or otherwise bearing the risk of greater
damages.
7.4 Indemnification by Purchaser. Subject to the limitations set
forth in this Article VII, Purchaser hereby agrees to indemnify, defend and hold
harmless the Company, any subsidiary, director, officer, employee, agent or
representative of the Company (individually, an "COMPANY INDEMNITEE" and
collectively, "COMPANY INDEMNITEES") from and against all Damages asserted
against, resulting from, imposed upon or incurred by the Company Indemnitees or
any Company Indemnitee, resulting from, or arising out of any breach of any
representation, warranty or agreement of Purchaser, contained in or made
pursuant to this Agreement. Exercise of the foregoing indemnification rights
shall be the sole remedy of any Company Indemnitee with respect to any breach by
Purchaser of its representations or warranties contained in this Agreement.
7.5 Limitation of Liability. NEITHER PARTY SHALL HAVE ANY
LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT OR OTHERWISE FOR
CONSEQUENTIAL, EXEMPLARY, INCIDENTAL OR PUNITIVE DAMAGES EVEN IF IT HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
THE FOREGOING LIMITATION OF LIABILITY IS AN EXPRESSLY BARGAINED FOR
PORTION OF THE CONSIDERATION FOR THE PARTIES TO ENTER INTO THIS AGREEMENT.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1 Amendment and Modifications. This Agreement may be amended,
modified and supplemented only by written agreement between the parties hereto
which states that it is intended to be a modification of this Agreement.
8.2 Waiver of Compliance. Any failure of the Company or Purchaser
to comply with any obligation, covenant, agreement or condition herein may be
expressly waived in writing by the other party, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
8.3 Expenses. The parties agree that all fees and expenses
incurred by them in connection with this Agreement and the transactions
contemplated hereby shall be borne by the party incurring such fees and
expenses, including, without limitation, all fees of counsel, actuaries and
accountants.
8.4 Remedies Waiver. All rights and remedies existing under this
Agreement are cumulative to and not exclusive of, any rights or remedies
otherwise available under
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<PAGE> 17
applicable law. No failure on the part of any party to exercise or delay in
exercising any right hereunder shall be deemed a waiver thereof, nor shall any
single or partial exercise preclude any further or other exercise of such or any
other right. No right or remedy of a party shall be deemed waived unless
expressly made a term, covenant or condition in this Agreement.
8.5 Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally or by commercial delivery
service, sent by facsimile transmission with confirmation of receipt, or mailed
by certified or registered mail (return receipt requested) with postage prepaid,
to the parties at the following address (or such other address for a party as
shall be specified by like notice):
if to the Company, to:
The viaLink Company
13800 Benson Rd.
Edmond, Oklahoma 73103
Attn: J. Andrew Kerner
Fax: (405) 936-2599
with a copy (which shall not constitute notice) to:
Richard M. Klinge & Associates, P.C.
510 E. Memorial Road, Suite C-1
Oklahoma City, Oklahoma 73114
Attention: Richard M. Klinge, Esq.
Fax: (405) 775-9003
and a copy (which shall not constitute notice) to:
Winstead Sechrest & Minick P.C.
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Attn: Robert E. Crawford, Jr., Esq.
Fax: (214) 745-5390
if to Purchaser, to:
i2 Technologies, Inc.
909 E. Las Colinas Blvd., 16th Floor
Irving, Texas 75039
Attn: Robert C. Donohoo
Fax: (214) 860-6893
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<PAGE> 18
with a copy (which shall not constitute notice) to:
Brobeck, Phleger & Harrison LLP
301 Congress Avenue, Suite 1200
Austin, Texas 78701
Attn: Ronald G. Skloss
fax: (512) 477-5813
8.6 Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned or delegated
by any of the parties hereto without the prior written consent of the other
party.
8.7 Publicity. Neither the Company nor Purchaser shall make or
issue, or cause to be made or issued, any announcement or written statement
concerning this Agreement or the transactions contemplated hereby for
dissemination to the general public without the prior consent of the other
party. This provision shall not apply, however, to any announcement or written
statement required to be made by law or the regulations of any federal or state
governmental agency or by obligations pursuant to any listing agreement with any
national securities exchange or with the National Association of Securities
Dealers, Inc., except that the party required to make such announcement shall,
whenever practicable, consult with the other party concerning the timing and
content of such announcement before such announcement is made.
8.8 Severability. If any portion of this Agreement shall be deemed
illegal, void or unenforceable by a court of competent jurisdiction, the
remaining portions will continue in full force and effect and the application of
such provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto.
8.9 Arbitration of Disputes. The parties agree that any
controversy or claim (whether such controversy or claim is based upon or sounds
in statute, contract, tort or otherwise) arising out of or relating to this
Agreement, any performance or dealings between the parties with respect to this
Agreement, or any dispute arising out of the interpretation or application of
this Agreement, which the parties are not able to resolve, shall be settled
exclusively by arbitration in Dallas, Texas by a single arbitrator pursuant to
the American Arbitration Association's Commercial Arbitration Rules then in
effect and judgment upon the award rendered by the arbitrator shall be entered
in any court having jurisdiction thereof and such arbitrator shall have the
authority to grant injunctive relief in a form similar to that which a court of
law would otherwise grant. The arbitrator shall be chosen from a panel of
licensed attorneys having at least fifteen (15) years of professional experience
who are familiar with the subject matter of this Agreement. The arbitrator shall
be appointed within thirty (30) days of the date the demand for arbitration was
sent to the other party. Discovery shall be permitted in accordance with the
Federal Rules of Civil Procedure. If an arbitration proceeding is brought
pursuant to this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and necessary disbursements incurred in
addition to any other relief to which such party may be entitled.
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8.10 Governing Law. This Agreement and the legal relations among
the parties hereto shall be governed by and construed in accordance with the
laws of the State of Texas (excluding its choice of laws rules).
8.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.12 Headings. The headings of the Sections and Articles of this
Agreement are inserted for convenience only and shall not constitute a part
hereof or affect in any way the meaning or interpretation of this Agreement.
8.13 Third Parties. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any person or
corporation other than the parties hereto and their successors or assigns, any
rights or remedies under or by reason of this Agreement.
8.14 Further Assurances. Each of the parties hereto agrees that
from time to time, at the request of any of the other parties hereto and without
further consideration, it will execute and deliver such other documents and take
such other action as such other party may reasonably request in order to
consummate more effectively the transactions contemplated hereby.
8.15 Schedules. The Schedules to this Agreement are deemed
incorporated in this Agreement and may contain information that is not expressly
required to be disclosed by this Agreement.
8.16 Entire Agreement. This Agreement, including the Schedules
hereto, the other documents and the certificates delivered pursuant to the terms
hereof, sets forth the entire agreement and understanding of the parties hereto
in respect of the subject matter contained herein, and supersedes all prior
agreements, promises, covenants, arrangements, communications, representations
or warranties, whether oral or written, by any officer, employee or
representative of any party hereto. This Agreement has been negotiated by the
parties and their respective counsel and will be interpreted fairly and in
accordance with its terms and without strict construction in favor of or against
either party.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereto duly
authorized, all as of the day and year first above written.
i2 TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ Robert C. Donohoo
----------------------------------
Name: Robert C. Donohoo
Title: Corporate Counsel
THE viaLINK COMPANY,
an Oklahoma corporation
By: /s/ J. Andrew Kerner
----------------------------------
Name: J. Andrew Kerner
Title: Chief Financial Officer
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
<PAGE> 1
EXHIBIT 2
REGISTRATION RIGHTS AGREEMENT
BY AND BETWEEN
THE viaLINK COMPANY
AND
i2 TECHNOLOGIES, INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE 1 DEFINITIONS.............................................................................................1
ARTICLE 2 REGISTRATION RIGHTS.....................................................................................3
2.1 Demand Registration.............................................................................3
2.2 Piggyback Registrations.........................................................................3
2.3 Registration Procedures.........................................................................4
2.4 Payment of Expenses.............................................................................7
2.5 Participation in Underwritten Registrations.....................................................7
2.6 Information of the Holder.......................................................................8
2.7 Rule 144 Information............................................................................8
2.8 Delay in Demand Registration....................................................................8
ARTICLE 3 INDEMNIFICATION.........................................................................................8
3.1 Indemnification by the Company..................................................................8
3.2 Indemnification by Holder.......................................................................8
3.3 Notice: Defense of Claims.......................................................................9
3.4 Contribution....................................................................................9
3.5 Survival.......................................................................................10
ARTICLE 4 MISCELLANEOUS..........................................................................................10
4.1 Notices........................................................................................10
4.2 Interpretation.................................................................................11
4.3 Counterparts...................................................................................11
4.4 Entire Agreement...............................................................................12
4.5 Amendments and Waivers.........................................................................12
4.6 Successors and Assigns.........................................................................12
4.7 Severability...................................................................................12
4.8 Remedies Cumulative............................................................................12
4.9 Governing Law..................................................................................12
4.10 Rules of Construction..........................................................................12
4.11 Currency.......................................................................................12
</TABLE>
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<PAGE> 3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of October 12, 1999, by and between The viaLink Company, an
Oklahoma corporation (together with any successor entity, the "Company"), and i2
Technologies, Inc. (the "Holder").
R E C I T A L S:
A. The Company and the Holder are parties to a Securities Purchase
Agreement, dated October 12, 1999 (the "Purchase Agreement"), providing, among
other things, for the Holder's acquisition of shares of Common Stock, par value
$0.001 per share, of the Company ("Shares") and a warrant to purchase shares of
Common Stock of the Company (the "Warrant").
B. The execution and delivery of this Agreement by the Company and the
Holder is required in connection with the transactions contemplated by the
Purchase Agreement.
A G R E E M E N T:
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings indicated:
"Closing" means the closing of the transactions contemplated by the
Securities Purchase Agreement.
"Commission" means the United States Securities and Exchange
Commission.
"Common Stock" means the Company's common stock, par value $0.001 per
share.
"Demand Registration" means the registration provided for in Section
2.1 hereof.
"1933 Act" means the United States Securities Act of 1933, as amended.
"Other Securities" means any stock (other than Common Stock) or other
securities of the Company or any other person (corporate or otherwise) (i) which
the holder of this Warrant at any time shall be entitled to receive, or shall
have received, on the exercise of the Warrant, in lieu of or in addition to
shares of Common Stock, or (ii) which at any time shall be
<PAGE> 4
issuable or shall have been issued in exchange for or in replacement of shares
of Common Stock.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
"Piggyback Registration" means the registration provided for in Section
2.2 hereof.
"Potential Material Event" means any of the following: (a) the
possession by the Company of material non-public information required to be
disclosed in a Company registration statement and the determination in good
faith by the Board of Directors of the Company that disclosure of such
information in the registration statement at that time would be detrimental to
the business and affairs of the Company; or (b) any material engagement or
activity by the Company which would, in the good faith determination of the
Board of Directors of the Company, if disclosed in the registration statement at
such time, be materially and adversely affected, which determination shall be
accompanied by a good faith determination by the Board of Directors of the
Company that the registration statement would be materially misleading absent
the inclusion of such information.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with Article 2 hereof, including all registration,
Commission filing fees, fees of the National Association of Securities Dealers
or the Nasdaq SmallCap Market, all fees and expenses of complying with
securities or blue sky laws, printing expenses, the fees and disbursements of
counsel for the Company and of its independent public accountants, including the
expenses of "cold comfort" letters required by or incident to such performance
and compliance, and, in the case of a Piggyback Registration pursuant to Section
2.2 hereof that is a firm commitment underwritten public offering, the
reasonable fees and expenses (not to exceed $15,000) of one counsel to all
selling Holders; provided, however, that Registration Expenses shall exclude,
and the sellers of the Registrable Stock being registered shall pay, any
underwriting discounts, commissions and transfer taxes in respect of the
Registrable Stock being registered.
"Registrable Stock" means (a) all Shares; (b) all shares of Common
Stock or Other Securities issued or issuable upon exercise of the Warrant; and
(c) any securities issued or issuable with respect to such shares of Common
Stock or Other Securities described in (a) or (b) above by way of a stock
dividend or stock split or in connection with a combination or reclassification
of shares, recapitalization, merger, consolidation or other reorganization or
otherwise; provided, however, that any particular Registrable Stock shall cease
to be Registrable Stock when (x) a registration statement with respect to the
sale of such stock shall become effective under the 1933 Act and such stock
shall have been disposed of in accordance with such registration statement, or
(y) such stock shall have been sold pursuant to Rule 144; and provided further,
only securities issued by the Company will be deemed to be Registrable Stock.
"Rule 144" means Rule 144 (or any successor provision) under the 1933
Act.
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<PAGE> 5
ARTICLE 2
REGISTRATION RIGHTS
2.1 Demand Registration. As soon as practicable after receipt of a
written request from the Holder, which request may be made on or after the 90th
day after the Closing and prior to the third anniversary of the Closing, the
Company shall use its best efforts to file with the Commission a shelf
registration statement on Form S-1 or such other form of registration statement
which the Company is eligible to use and which is appropriate for the
contemplated transaction providing for the registration and resale on a
continuous or delayed basis by the Holder, pursuant to Rule 415 under the 1933
Act, covering such shares of Registrable Stock as the Holder(s) of not less than
50% of the Registrable Stock may designate, and the Company shall use its best
efforts to cause such Demand Registration to become or be declared effective as
soon as practicable. The Company shall use its best efforts to keep such Demand
Registration continuously effective, supplemented and amended pursuant to the
provisions of Section 2.3 hereof until the earlier of (i) the sale by the
Holders of all shares of Registrable Stock registered in such registration or
(ii) the date that is 180 days subsequent to the effective date of such
registration. The Holder(s) of Registrable Stock shall be entitled to one Demand
Registration under this Section 2.1. The Company may decline (for a period not
to exceed 60 days) to effect a Demand Registration if a Potential Material Event
exists at the time a Demand Registration is requested; provided, that all time
periods set forth in this Section 2.1 shall be tolled during such period.
2.2 Piggyback Registrations.
(a) Right to Piggyback. If subsequent to the 90th day after
the Closing and prior to the third anniversary of the Closing the
Company proposes to register any offering of its securities under the
Securities Act, whether or not for sale for its own account (other than
on Form S-4, Form S-8 or any successor form), and the registration form
to be used permits the registration of an offering of Registrable Stock
by a Holder (a "Piggyback Registration"), then the Company will give
prompt notice to the Holder(s) of Registrable Stock of its intention to
effect such a registration (each a "Piggyback Notice"). Subject to
Section 2.2(b) below, the Company will include in such registration all
shares of Registrable Stock that the Holder(s) thereof have requested
the Company to include in such registration by notice to the Company
within 20 days after the date of receipt of the Company's notice.
Notwithstanding any other provisions of this Agreement (including
Section 2.3), the process (including timing) of causing a Piggyback
Registration to become effective and any decision to terminate a
Piggyback Registration will be within the sole discretion of the
Company.
(b) Priority on Registrations. If any Piggyback Registration
shall be an underwritten offering, the right of any Holder's
Registrable Stock to be included in such Piggyback Registration shall
be conditioned upon such Holder's participation in such underwriting
and the inclusion of such Holder's Registrable Stock in the
underwriting to the extent provided herein Notwithstanding any other
provision of
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<PAGE> 6
this Agreement, if the managing underwriter determines in good faith
that marketing factors require a limitation of the number of shares to
be underwritten, then the managing underwriter may exclude shares
(including Registrable Stock) from the registration and the
underwriting, and the number of shares that may be included in the
registration and the underwriting will be allocated: (i) in the case of
a registration initiated by the Company for the purpose of registering
securities to be sold by the Company, first, to the Company, second, to
any party which as of the date hereof has a contractual right to
participate in such registration to the extent such party's currently
existing contractual arrangements prohibit the Company from allowing
the Holders of Registrable Stock to participate pro rata with such
party in such registration, third to the Holders of Registrable Stock,
and fourth, to all other persons requesting that securities be included
in such registration; and (ii) in the case of a registration initiated
by the Company for the purpose of registering securities to be sold by
security holders of the Company, first, to any party which has
exercised its contractual right to require that the Company initiate
such registration, second, to any party which as of the date hereof has
a contractual right to participate in such registration to the extent
such party's currently existing contractual arrangements prohibit the
Company from allowing the Holders of Registrable Stock to participate
pro rata with such party in such registration, third to the Holders of
Registrable Stock, and fourth, to all other persons requesting that
securities be included in such registration. Within the category for
the allocation of securities to be included in the
registration/underwriting to which Holders of Registrable Stock are
assigned, such Holders will participate pro rata on the basis of the
number of shares that such Holders have requested (consistent with
their contractual rights) to be included in the registration. If a
Holder disapproves of the terms of any such underwriting, such Holder
may elect to withdraw therefrom by written notice to the Company and
the managing underwriter. Any Registrable Stock excluded or withdrawn
from such underwriting shall be excluded and withdrawn from the
registration.
2.3 Registration Procedures. In connection with any registration
hereunder, the Company will use its best efforts to, as soon as practicable,
effect the registration and the sale of such Registrable Stock in accordance
with the intended method of distribution thereof and will:
(a) prepare and file with the Commission a registration
statement with respect to such Registrable Stock and use its best
efforts to cause such registration statement to become effective;
provided, however, that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will
furnish to the counsel, if any, selected by the Holder copies of all
such documents proposed to be filed, which documents will be subject to
the reasonable comments of such counsel;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection
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<PAGE> 7
therewith as may be necessary to keep such registration statement
effective for such period as shall be required for the disposition
pursuant to the terms of such registration of all Registrable Stock
covered thereby (but not to exceed, in the case of the Demand
Registration, the date which is 180 days subsequent to the effective
date of such registration), and in each such case comply with the
provisions of the 1933 Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of distribution by the sellers
thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Stock such
reasonable number of copies of such registration statement, each
amendment and supplement thereto, in each case including all exhibits,
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may
reasonably request in order to facilitate the disposition of the
Registrable Stock then held, owned and being registered by such seller;
(d) use its best efforts to register or qualify such
Registrable Stock under such other securities or blue sky laws of such
jurisdictions within the United States as any seller reasonably
requests to keep such registration or qualification in effect for as
long as the relevant registration statement is in effect and do any and
all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Stock then held, owned and being
registered by such seller; provided, however, that the Company will not
be required (i) to qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
subsection (d), (ii) to subject itself to taxation in any such
jurisdiction or (iii) to consent to general service of process in any
such jurisdiction;
(e) notify each seller of such Registrable Stock, at any time
when a prospectus relating thereto is required to be delivered under
the 1933 Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make the
statements therein not misleading and, at the request of any such
seller, the Company will promptly prepare a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of
such Registrable Stock, such prospectus will not contain an untrue
statement of a material fact or omit to state any fact necessary to
make the statements therein, in light of the circumstances under which
such statements are made, not misleading;
(f) cause all such Registrable Stock to be listed on each
securities exchange on which similar securities issued by the Company
are then listed and to be qualified for trading on each system on which
similar securities issued by the Company are from time to time
qualified;
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<PAGE> 8
(g) provide a transfer agent and registrar for all such
Registrable Stock not later than the effective date of such
registration statement and thereafter maintain such a transfer agent
and registrar;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other
actions as the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable Stock;
(i) make available for inspection, subject to execution and
delivery of customary non-disclosure and non-use agreements, by any
underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent
retained by any such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors, employees and independent
accountants to supply, subject to execution and delivery of customary
non-disclosure and non-use agreements, all information reasonably
requested by any such underwriter, attorney, accountant or agent in
connection with such registration statement;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least 12 months beginning with the
first day of the Company's first full calendar quarter after the
effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule
158 thereunder;
(k) if such registration relates to an underwritten offering,
furnish to each seller of Registrable Stock a signed counterpart of
(x) an opinion of counsel for the Company, which may
be the head in-house counsel for the Company, and
(y) a "comfort" letter signed by the independent
public accountants who have certified the Company's financial
statements included or incorporated by reference in such
registration statement,
in each case covering substantially the same matters with respect to
such registration statement (and the prospectus included therein) and,
in the case of the accountants' comfort letter, with respect to events
subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in accountants' comfort
letters to be delivered to the underwriters in underwritten public
offerings of securities (and dated the dates such opinions and comfort
letters are customarily dated) and, in the case of the accountants'
comfort letter, such other financial matters;
6
<PAGE> 9
(l) permit any Holder of Registrable Stock which might be
deemed, in the reasonable judgment of such Holder, to be an underwriter
or a controlling person of the Company, to participate in the
preparation of such registration or comparable statement and to require
the insertion therein of material, furnished to the Company in writing,
which in the reasonable judgment of such Holder and its counsel, if
any, should be included;
(m) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or
suspending the qualification of any Registrable Stock included in such
registration statement for sale in any jurisdiction, the Company will
promptly notify each seller of Registrable Stock thereof and will use
its best efforts promptly to obtain the withdrawal of such order; and
(n) in connection with any underwritten offering, the Company
shall have the right to designate the underwriter(s) to manage such
offering, subject (in the case of a Demand Registration) to the
approval of the Holder(s) of a majority of the Registrable Stock to be
included therein, which approval will not be unreasonably withheld,
conditioned or delayed.
Each Holder agrees that if the Company has delivered preliminary or final
prospectuses to such Holder and after having done so the Company shall give
notice to such Holder that (A) the prospectus needs to be amended or
supplemented to comply with the requirements of the 1933 Act, (B) a stop order
suspending the effectiveness of the registration statement is issued by the
Commission or (C) a Potential Material Event shall exist, then such Holder shall
immediately cease making offers and sales of Registrable Stock and return all
remaining prospectuses to the Company if requested by the Company in such
notice; provided such cessation of making offers and sales of Registrable Stock
shall not exceed an aggregate of sixty (60) days in the case of the Demand
Registration. Following such amendment or supplement, the lifting of any stop
order or such time as the Potential Material Event shall no longer exist, the
Company shall promptly provide to such Holder notice that offers and sales may
be resumed and, to the extent appropriate, revised prospectuses, and such Holder
shall then be free to resume making offers of the Registrable Stock, or any
portion thereof, and the Company's obligation to maintain the effectiveness of
the registration statement, if any, shall be extended by an equal amount of
time.
2.4 Payment of Expenses. The Company shall pay all Registration
Expenses in connection with the Demand Registration and any Piggyback
Registration. All fees and disbursements of counsel (except to the extent
comprising "Registration Expenses" pursuant to Article 1 hereof), accountants
and other experts retained by the Holder shall be borne by the Holder.
2.5 Participation in Underwritten Registrations. The Holder may not
participate in any registration hereunder which is underwritten unless the
Holder (a) agrees to sell the Holder's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements; and (b) completes and executes all questionnaires,
powers of attorney, indemnities, standstill or holdback agreements,
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<PAGE> 10
underwriting agreements and other documents required under the terms of such
underwriting arrangements, provided that if the Holder's Registrable Stock is
included in any underwritten registration, the Holder shall not be required to
make any representations or warranties to the Company or the underwriters other
than representations and warranties regarding the Holder and the Holder's
intended method of distribution.
2.6 Information of the Holder. As a condition to participation in any
registration hereunder, the Holder shall furnish to the Company such information
regarding the Holder and the distribution proposed by the Holder as the Company
may reasonably request and as shall be required in connection with any
registration, qualification or compliance contemplated by this Agreement.
2.7 Rule 144 Information. From and after the date hereof and for so
long as necessary in order to permit the Holders to sell the Registrable Stock
pursuant to Rule 144 under the 1933 Act, the Company will file on a timely basis
all reports required to be filed by it pursuant to Section 13 or 15(d) of the
United States Securities Exchange Act of 1934 and referred to in paragraph
(c)(1) of Rule 144 (or, if applicable, the Company will make publicly available
the information regarding itself referred to in paragraph (c)(2) of Rule 144),
in order to permit the Holders to sell the Registrable Stock, pursuant to the
terms and conditions of the applicable provisions of Rule 144.
2.8 Delay in Demand Registration. The Company shall not be obligated to
effect any Demand Registration within 90 days of a previous registration in
which Holders of Registrable Stock were afforded piggyback registration rights
pursuant to this Agreement.
ARTICLE 3
INDEMNIFICATION
3.1 Indemnification by the Company. The Company agrees to indemnify, to
the extent permitted by law, the Holder, its officers and directors and each
Person who controls a Holder (within the meaning of the 1933 Act) against all
losses, claims, damages, liabilities and expenses which arise out of or are
based upon any untrue or alleged untrue statement of material fact contained in
any registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same are caused by or contained in
any information furnished in writing to the Company by such Holder, its officers
and directors or any Person who controls such Holder expressly for use therein.
In connection with an underwritten offering, the Company will indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the 1933 Act) to the same extent as provided
above with respect to the indemnification of a Holder.
3.2 Indemnification by Holder. In connection with any registration
statement in which a Holder is participating, each such Holder, severally and
not jointly, will, to the extent permitted by law, indemnify the Company, its
directors and officers and each Person who controls the Company (within the
meaning of the 1933 Act) against any losses, claims, damages,
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<PAGE> 11
liabilities and expenses which arise out of or are based upon any untrue or
alleged untrue statement of material fact contained in the registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading (but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by such Holder
expressly for use therein) and any failure by each such Holder to deliver a copy
of the registration statement or prospectus or any amendments or supplements
thereto; provided, however, that the obligation to indemnify will be individual
to each Holder and will be limited to the net amount of proceeds received by
such Holder from the sale of Registrable Stock pursuant to such registration
statement.
3.3 Notice: Defense of Claims. Any Person entitled to indemnification
hereunder will (a) give prompt written notice to the indemnifying party of any
claim with respect to which it seeks indemnification and (b) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party; provided, that the failure of
any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Agreement except to the extent
the indemnifying party is materially prejudiced by such failure. If such defense
is assumed, the indemnified party may participate in such defense at its own
expense and the indemnifying party will not be subject to any liability for any
settlement made by the indemnified party without its consent (but such consent
will not be unreasonably withheld, conditioned or delayed). An indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim
will not be obligated to pay the fees and expenses of more than one counsel (in
addition to local counsel) for all parties indemnified by such indemnifying
party with respect to such claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such claim. No
indemnified party shall consent to entry of any judgment or settle any claim or
litigation without the prior written consent of the indemnifying party, which
consent shall not be unreasonably withheld, conditioned or delayed. Each
indemnified party, as a condition to its right to indemnification, will
reasonably cooperate with the indemnifying party (at the expense of the
indemnifying party) in the defense of such claim.
3.4 Contribution. If the indemnification provided for in this Article 3
is unavailable or insufficient to hold harmless an indemnified party under
Section 3.1 or 3.2, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages or liabilities referred to above (a) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
on the one hand and the indemnified party on the other from the offering of the
securities or (b) if the allocation provided by clause (a) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (a) above but also the relative
fault of the indemnifying party on the one hand and the indemnified party on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other equitable
considerations. The relative benefits received by the indemnifying party on the
one hand and the indemnified party on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering received by
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<PAGE> 12
the indemnifying party bear to the total net proceeds received by the
indemnified party. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact related to
information supplied by the indemnifying party or information supplied by the
indemnified party, and the parties' relevant intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this Section
3.4 shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending against
any action or claim that is the subject of this section. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Any obligation of a Holder to provide
contribution will be individual to such Holder and will be limited to the net
amount of proceeds received by such Holder from the sale of Registrable Stock
that is the subject of any claim. No party shall be liable for contribution with
respect to any action, suit, proceeding or claim settled without its written
consent, which consent shall not be unreasonably withheld, conditioned or
delayed.
3.5 Survival. The indemnification and contribution provided for under
this Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of any indemnified party or any officer,
director or controlling Person of such indemnified party and will survive the
transfer of securities.
ARTICLE 4
MISCELLANEOUS
4.1 Notices. All notices and other communications hereunder shall be in
writing and shall be delivered personally or by commercial delivery service, or
mailed by registered or certified mail (return receipt requested) or sent via
facsimile (with confirmation of receipt) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
if to the Company, to:
The viaLink Company
13800 Benson Road
Edmond, Oklahoma 73103-6417
Attention: J. Andrew Kerner
Fax: : (405) 936-2599
with a copy (which shall not constitute notice) to:
Richard M. Klinge & Associates, P.C.
510 E. Memorial Road, Suite C-1
Oklahoma City, Oklahoma 73114
Attention: Richard M. Klinge, Esq.
Fax: (405) 775-9003
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and a copy (which shall not constitute notice) to:
Winstead Sechrest & Minick P.C.
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Attn: Robert E. Crawford, Jr., Esq.
Fax: (214) 745-5390
if to the Holder, to:
i2 Technologies, Inc.
909 E. Las Colinas Blvd., 16th Floor
Irving, Texas 75039
Attention: Robert C. Donohoo
Fax: (214) 860-6893
with a copy (which shall not constitute notice) to:
Brobeck, Phleger & Harrison LLP
301 Congress Avenue, Suite 1200
Austin, Texas 78701
Attention: Ronald G. Skloss
Fax: (512) 477-5813
Notice given by personal delivery or commercial delivery service shall be
effective upon actual receipt. Notice given by mail shall be effective three
business days after deposit in the mails or upon actual receipt if sooner.
Notice given by facsimile shall be confirmed by appropriate answer back and
shall be effective upon actual receipt if received during the recipient's normal
business hours, or at the beginning of the recipient's next business day after
receipt if not received during the recipient's normal business hours.
4.2 Interpretation. The words "include," "includes" and "including"
when used herein shall be deemed in each case to be followed by the words
without limitation. 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.
4.3 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.
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4.4 Entire Agreement. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.
4.5 Amendments and Waivers. Except as otherwise provided herein, no
amendment, modification, termination or cancellation of this Agreement shall be
effective as to (a) the Company, unless made in writing signed by the Company or
(b) the Holder, unless made in writing signed by the Holder.
4.6 Successors and Assigns. This Agreement, and the rights and
obligations of a Holder hereunder, may be assigned by such Holder to any Person
to which Registrable Stock is transferred by such Holder and who agrees to be
bound by the terms of this Agreement. Any such transferee shall be deemed a
"Holder" for purposes of this Agreement; provided, that no transferee will be
deemed to be a Holder unless such transferee is the holder of not less than
50,000 shares of Registrable Stock.
4.7 Severability. In the event that any provision of this Agreement, or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
4.8 Remedies Cumulative. Except as otherwise provided herein, any and
all remedies herein expressly conferred upon a party will be deemed cumulative
with and not exclusive of any other remedy conferred hereby, or by law or equity
upon such party, and the exercise by a party of any one remedy will not preclude
the exercise of any other remedy.
4.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas (other than the conflicts of law
principles thereof) and shall, to the maximum extent practicable, be deemed to
call for performance in Dallas County, Texas.
4.10 Rules of Construction. The parties hereto agree that they have
been represented by counsel during the negotiation, preparation and execution of
this Agreement and, therefore, waive the application of any law, regulation,
holding or rule of construction providing that ambiguities in an agreement or
other document will be construed against the party drafting such agreement or
document.
4.11 Currency. All references to "$" or "dollars" herein shall be to
the lawful currency of United States dollars.
[Signature page follows.]
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<PAGE> 15
IN WITNESS WHEREOF, the Company and the Holder have executed
this Registration Rights Agreement as of the date first written above.
COMPANY:
THE viaLINK COMPANY
By: /s/ J. Andrew Kerner
--------------------------------------
Name: J. Andrew Kerner
Title: Chief Financial Officer
HOLDER:
i2 TECHNOLOGIES, INC.
By: /s/ Robert C. Donohoo
--------------------------------------
Name: Robert C. Donohoo
Title: Corporate Counsel
<PAGE> 1
EXHIBIT 3
NEITHER THIS WARRANT NOR ANY SECURITIES ISSUABLE UPON THE EXERCISE OF THIS
WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR
DISPOSED OF WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS
OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
THEREFROM.
No. i2-001 Right to Purchase
Shares of Common Stock
of The viaLink Company
THE VIALINK COMPANY
COMMON STOCK PURCHASE WARRANT
October 12, 1999
The viaLink Company, an Oklahoma corporation (the "Company"), hereby
certifies that, for value received, i2 Technologies, Inc., a Delaware
corporation ("i2"), or its permitted assigns, is entitled, subject to the terms
set forth below, to purchase from the Company at any time or from time to time
before 5:00 p.m. (Dallas, Texas time), on October 12, 2001, up to 186,567 fully
paid and nonassessable shares (the "Warrant Shares") of the Company's Common
Stock, $0.001 par value, at a purchase price per share of $26.80 (such purchase
price per share as adjusted from time to time as herein provided is referred to
herein as the "Purchase Price"). The number and character of such shares of
Common Stock and the Purchase Price are subject to adjustment as provided
herein.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Business Day" means any day except a Saturday or
a Sunday or other day on which the National Market (as hereinafter
defined), or any national securities exchange on which the Common Stock
(as hereinafter defined) is traded or admitted for unlisted trading
privileges, is closed for trading.
(b) The term "Company" shall include The viaLink Company, and
any corporation which shall succeed to, or assume the obligations of,
The viaLink Company hereunder.
(c) The term "Common Stock" includes the Company's common
stock, $0.001 par value, as authorized on October 12, 1999, and/or any
Other Securities into which or for which the Warrant Shares may be
converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
(d) The term "Fair Market Value" per share of Common Stock
means:
(1) If the Common Stock is traded on a national
securities exchange or admitted to unlisted trading
privileges on such an exchange, or is listed on the
National Market (the "National Market") of the
National Association of Securities Dealers Automated
Quotations System (the "NASDAQ"), the Fair Market
Value shall be the average of the last
<PAGE> 2
reported sale prices of the Common Stock on such
exchange or on the National Market over the five
consecutive Business Days immediately preceding the
date of determination or, if the last reported sale
price information is not available for such days, the
average of the mean of the closing bid and asked
prices for such days on such exchange or on the
National Market;
(2) If the Common Stock is not so listed or admitted to
unlisted trading privileges, the Fair Market Value
shall be the average of the mean of the last bid and
asked prices reported over the five consecutive
Business Days immediately preceding the date of
determination (A) by the NASDAQ or (B) if reports are
unavailable under clause (A) above, by the National
Quotation Bureau Incorporated; and
(3) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and ask prices
are not reported, the Fair Market Value shall be the
price per share which the Company could obtain from a
willing buyer for shares of Common Stock, as such
price shall be determined by mutual agreement of the
Company and the holders of rights to purchase a
majority of the shares of Common Stock purchasable
under all warrants then outstanding and issued
(directly or indirectly) from that certain Common
Stock Purchase Warrant, dated October 12, 1999,
issued by the Company to i2 Technologies, Inc. which
originally granted to i2 Technologies, Inc. the right
to purchase 186,567 shares of Common Stock (Warrant
No. i2-001). If such holders and the Company are
unable to agree on such Fair Market Value, the
Company shall select a pool of three independent and
nationally-recognized investment banking firms from
which such holders shall select one such firm to
appraise the fair market value of the Warrant and to
perform the computations involved. The determination
of such investment banking firm shall be binding upon
the Company and such holders in connection with any
transaction occurring at the time of such
determination. All expenses of such investment
banking firm shall be borne by the Company. In all
cases, the determination of fair market value shall
be made without consideration of the lack of a liquid
public market for the Common Stock and without
consideration of any "control premium" or any
discount for holding less than a majority or
controlling interest of the outstanding Common Stock.
(e) The term "Other Securities" refers to any stock (other
than Common Stock) or other securities of the Company or any other
person (corporate or otherwise) (i) which the holder of this Warrant at
any time shall be entitled to receive, or shall have received, on the
exercise of this Warrant, in lieu of or in addition to shares of the
Company's common stock, $.001 par value per share, as authorized on
October 12, 1999, or (ii) which at any time shall be issuable or shall
have been issued in exchange for or in replacement of shares of the
Company's common stock, $.001 par value per share, as authorized on
October 12, 1999, or Other Securities pursuant to Section 4 or
otherwise.
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<PAGE> 3
1. Exercise of Warrant.
1.1 Full Exercise. This Warrant may be exercised at
any time after the date hereof during normal business hours before its
expiration in full by the holder hereof by surrender of this Warrant, with the
form of subscription at the end hereof duly executed by such holder, to the
Company at its principal office, accompanied by payment, in cash, by bank
cashier's check payable to the order of the Company or by wire transfer, in the
amount obtained by multiplying the number of shares of Common Stock and/or Other
Securities for which this Warrant is then exercisable by the Purchase Price then
in effect.
1.2 Partial Exercise. This Warrant may be exercised
at any time during normal business hours after the date hereof before its
expiration in part by surrender of this Warrant and payment of the Purchase
Price then in effect in the manner and at the place provided in subsection 1.1,
except that the amount payable by the holder on such partial exercise shall be
the amount obtained by multiplying (a) the number of shares of Common Stock
and/or Other Securities designated by the holder in the subscription at the end
hereof by (b) the Purchase Price then in effect. On any such partial exercise,
the Company at its expense will forthwith issue and deliver to or upon the order
of the holder hereof a new Warrant or Warrants of like tenor, in the name of the
holder hereof or as such holder (upon payment by such holder of any applicable
transfer taxes) may request, filling in the aggregate on the face or faces
thereof the number of shares of Common Stock and/or Other Securities for which
such Warrant or Warrants may still be exercised.
1.3 Company Acknowledgment. The Company will, at the
time of any exercise of this Warrant, upon the written request of the holder
hereof, acknowledge in writing its continuing obligation to afford to such
holder any rights to which such holder shall continue to be entitled after such
exercise in accordance with the provisions of this Warrant. If the holder shall
fail to make any such written request, such failure shall not affect the
continuing obligation of the Company to afford to such holder any such rights.
1.4 Trustee for Warrant Holders. In the event that a
bank or trust company shall have been appointed as trustee for the holder of
this Warrant pursuant to subsection 4.2, such bank or trust company shall have
all the powers and duties of a warrant agent appointed pursuant hereto and shall
accept, in its own name for the account of the Company or such successor person
as may be entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.
2. Delivery of Stock Certificates, Etc. on Exercise. As soon
as practicable after the exercise of this Warrant in full or in part, and in any
event within ten Business Days thereafter, the Company at its expense (including
the payment by it of any applicable issue taxes) will cause to be issued in the
name of and delivered to the holder hereof, or as such holder (upon payment by
such holder of any applicable transfer taxes) may direct, a certificate or
certificates for the number of fully paid and nonassessable shares of Common
Stock (or, to the extent not constituting Common Stock, Other Securities) to
which such holder shall be entitled on such exercise, plus, in lieu of any
fractional share to which such holder would otherwise be entitled, cash equal to
such fraction multiplied by the then current Fair Market Value of one full
share, together with any other property (including cash, where applicable) to
which such holder is entitled upon such exercise pursuant to Section 1 or
otherwise.
3. Adjustment for Dividends in Other Stock, Property, etc.;
Reclassification, etc. In case at any time or from time to time, the holders of
Common Stock (or, to the extent not constituting Common Stock, Other Securities)
in their capacity as such shall have received, or (on or after the record
3
<PAGE> 4
date fixed for the determination of shareholders eligible to receive) shall have
become entitled to receive, without payment therefor,
(a) other or additional stock or other securities or property
(other than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of
earnings or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate
rearrangement,
other than additional shares of capital stock issued as a stock dividend or in a
stock split (adjustments in respect of which are provided for in Section 5),
then and in each such case the holder of this Warrant, on the exercise hereof as
provided in Section 1, shall be entitled to receive the amount of stock and
other securities and property (including cash in the cases referred to in
subdivisions (b) and (c) of this Section 3) determined by multiplying (i) the
amount of stock and other securities and property (including cash in the cases
referred to in subdivisions (b) and (c) of this Section) which such holder would
hold on the date of such exercise, if on the record date with respect to or the
date of the issuance of the stock, securities, property and cash referred to in
subdivisions (a), (b) or (c) of this Section 3, as applicable, it had been the
holder of record of the number of shares of Common Stock called for on the face
of this Warrant and had thereafter, during the period from the date hereof to
and including the date of such exercise, retained such shares and all such other
or additional stock and other securities and property (including cash in the
cases referred to in subdivisions (b) and (c) of this Section 3) receivable by
it as aforesaid during such period, giving effect to all adjustments called for
during such period by Sections 4 and 5 by (ii) the percentage of this Warrant
then being exercised.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1 Reorganization, Consolidation, Merger, etc. In
case at any time or from time to time, the Company shall (a) effect a
reorganization, reclassification or recapitalization (b) consolidate with or
merge into any other person, or (c) transfer all or substantially all of its
properties or assets to any other person under any plan or arrangement
contemplating the dissolution of the Company, then, in each such case, the
holder of this Warrant, on the exercise hereof as provided in Section 1 at any
time after the consummation of such reorganization, reclassification,
recapitalization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Common Stock (or,
to the extent not constituting Common Stock, Other Securities) issuable on such
exercise prior to such consummation or such effective date, the amount of stock
and other securities and property (including cash) determined by multiplying (i)
the amount of the stock and other securities and property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such event, as the case may be, if such holder had so exercised
this Warrant, immediately prior thereto, all subject to further adjustment
thereafter as provided in Sections 3 and 5 by (ii) the percentage of this
Warrant then being exercised.
4.2 Dissolution. In the event of any dissolution of
the Company following the transfer of all or substantially all of its properties
or assets, the Company, prior to such dissolution, shall at its expense deliver
or cause to be delivered the Other Securities and property (including cash,
where applicable) receivable by the holders of this Warrant after the effective
date of such dissolution
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<PAGE> 5
pursuant to this Section 4 to a bank or trust company having its principal
office in Dallas, Texas, as trustee for the holder of this Warrant.
4.3 Continuation of Terms. Upon any reorganization,
consolidation, merger or transfer (and any dissolution following any transfer)
referred to in this Section 4, this Warrant shall continue in full force and
effect, subject to expiration in accordance with Section 17 hereof, and the
terms hereof shall be applicable to the Other Securities and property receivable
on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any such
Other Securities, including, in the case of any such transfer, the person
acquiring all or substantially all of the properties or assets of the Company,
whether or not such person shall have expressly assumed the terms of this
Warrant as provided in Section 6.
5. Anti-Dilution Adjustments.
5.1 General. The Purchase Price shall be subject to
adjustment from time to time as hereinafter provided. Upon each adjustment of
the Purchase Price, the holder of this Warrant shall thereafter be entitled to
purchase, at the Purchase Price resulting from such adjustment, the number of
shares obtained by multiplying the Purchase Price in effect immediately prior to
such adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment and dividing the product thereof by the Purchase Price
resulting from such adjustment.
5.2 Purchase Price Adjustments. If and whenever after
the date hereof the Company shall issue or sell any shares of its capital stock
(except (a) upon exercise of one or more of the Warrants or (b) pursuant to
options, warrants, rights or similar commitments obligating the Company to issue
shares of its capital stock which are in existence as of October 12, 1999) for a
consideration per share less than the Purchase Price in effect immediately prior
to the time of such issue or sale, the Purchase Price shall be reduced to the
price (calculated to the nearest $0.01) obtained by dividing (i) an amount equal
to the sum of (A) the number of shares of capital stock outstanding, or deemed
to be outstanding, immediately prior to such issue or sale multiplied by the
Purchase Price prevailing immediately prior to such issue or sale plus (B) the
consideration, if any, received by the Company upon such issue or sale, by (ii)
the total number of shares of capital stock outstanding, or deemed to be
outstanding, immediately after such issue or sale. Notwithstanding the
foregoing, no adjustment of the Purchase Price shall be made in an amount less
than $0.01 per share, but any such lesser adjustment shall be carried forward
and shall be made at the time of and together with the next subsequent
adjustment which together with any adjustments so carried forward shall amount
to $0.01 per share or more.
5.3 Option Grants. In the event that at any time
after October 12, 1999 the Company shall in any manner grant (directly, by
assumption in a merger or otherwise) any rights to subscribe for or to purchase,
or any options for the purchase of, capital stock or any securities convertible
into or exchangeable for its capital stock (such rights or options being herein
called "Options" and such convertible or exchangeable stock or securities being
herein called "Convertible Securities"), whether or not such Options or the
right to convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which capital stock is issuable upon
the exercise of such Options or upon conversion or exchange of such Convertible
Securities (determined by dividing (i) the total amount, if any, received or
receivable by the Company as consideration for the granting of such Options,
plus the minimum aggregate amount of additional consideration payable to the
Company upon the exercise of all such Options, plus, in the case of any such
Options which relate to Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable upon the issue or sale of such
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<PAGE> 6
Convertible Securities and upon the conversion or exchange thereof, by (ii) the
total number of shares of capital stock issuable upon the exercise of such
Options or upon the conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Options) shall be less than the Purchase
Price in effect immediately prior to the time of the granting of such Options,
then the total number of shares of capital stock issuable upon the exercise of
such Options or upon conversion or exchange of the total amount of such
Convertible Securities issuable upon the exercise of such Options shall (as of
the date of granting such Options) be deemed to be outstanding and to have been
issued for such price per share. Except as otherwise provided in subsection 5.5,
no further adjustment of the Purchase Price shall be made upon the actual issue
of such capital stock or of such Convertible Securities upon exercise of such
Options or upon the actual issue of such capital stock upon conversion or
exchange of such Convertible Securities.
5.4 Convertible Security Grants. In the event that
the Company shall in any manner issue (directly, by assumption in a merger or
otherwise) or sell any Convertible Securities (other than pursuant to the
exercise of Options to purchase such Convertible Securities covered by
subsection 5.3), whether or not the rights to exchange or convert thereunder are
immediately exercisable, and the price per share for which capital stock is
issuable upon such conversion or exchange (determined by dividing (i) the total
amount received or receivable by the Company as consideration for the issue or
sale of such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the conversion or
exchange thereof, by (ii) the total maximum number of shares of capital stock
issuable upon the conversion or exchange of all such Convertible Securities)
shall be less than the Purchase Price in effect immediately prior to the time of
such issue or sale, then the total maximum number of shares of capital stock
issuable upon conversion or exchange of all such Convertible Securities shall
(as of the date of the issue or sale of such Convertible Securities) be deemed
to be outstanding and to have been issued for such price per share, provided
that, except as otherwise provided in Section 5.5, no further adjustment of the
Purchase Price shall be made upon the actual issue of such capital stock upon
conversion or exchange of such Convertible Securities.
5.5 Effect of Alteration to Option or Convertible
Security Terms. In connection with any change in, or the expiration or
termination of, the purchase rights under any Option or the conversion or
exchange rights under any Convertible Securities, the following provisions shall
apply:
(a) If the purchase price provided for in any Option referred
to in subsection 5.3, the additional consideration, if any, payable
upon the conversion or exchange of any Convertible Securities referred
to in subsection 5.3 or 5.4, or the rate at which any Convertible
Securities referred to in subsection 5.3 or 5.4 are convertible into or
exchangeable for capital stock shall change at any time (including, but
not limited to, changes under or by reason of provisions designed to
protect against dilution), then the Purchase Price in effect at the
time of such change shall forthwith be increased or decreased to the
Purchase Price which would be in effect immediately after such change
had such Options or Convertible Securities still outstanding provided
for such changed purchase price, additional consideration or conversion
rate, as the case may be, at the time initially granted, issued or
sold.
(b) On the partial or complete expiration of any Options or
termination of any right to convert or exchange Convertible Securities,
the Purchase Price then in effect hereunder shall forthwith be
increased or decreased to the Purchase Price which would be in effect
at the time of such expiration or termination had such Options or
Convertible Securities, to the extent outstanding immediately prior to
such expiration or termination, never been issued.
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<PAGE> 7
5.6 Dividends of Capital Stock, Options or
Convertible Securities. In the event that the Company shall declare a dividend
or make any other distribution upon any stock of the Company payable in capital
stock, Options or Convertible Securities, then any capital stock, Options or
Convertible Securities, as the case may be, issuable in payment of such dividend
or distribution shall be deemed to have been issued or sold without
consideration unless such dividend or distribution is subject to Section 3
hereof.
5.7 Dilution in Case of Other Securities. In case any
Other Securities shall be issued or sold by the Company, or shall become subject
to issue upon the conversion or exchange of any stock (or Other Securities) of
the Company (or any other issuer of Other Securities or any other person
referred to in Section 4) or to subscription, purchase or other acquisition
pursuant to any rights or options granted by the Company (or such other issuer
or person), for a consideration per share such as to dilute the purchase rights
evidenced by this Warrant, the computations, adjustments and readjustments
provided for in this Section 5 with respect to the Purchase Price and the number
of shares of Common Stock issuable upon exercise of this Warrant shall be made
as nearly as possible in the manner so provided and applied to determine the
amount of Other Securities from time to time receivable on the exercise of this
Warrant, so as to protect the holders of this Warrant against the effect of such
dilution.
5.8 Stock Splits and Reverse Splits. In the event
that the Company shall at any time subdivide its outstanding shares of Common
Stock into a greater number of shares, the Purchase Price in effect immediately
prior to such subdivision shall be proportionately reduced and the number of
Warrant Shares purchasable pursuant to this Warrant immediately prior to such
subdivision shall be proportionately increased, and conversely, in the event
that the outstanding shares of Common Stock shall at any time be combined into a
smaller number of shares, the Purchase Price in effect immediately prior to such
combination shall be proportionately increased and the number of Warrant Shares
purchasable upon the exercise of this Warrant immediately prior to such
combination shall be proportionately reduced. Except as provided in this
subsection 5.8, no adjustment in the Purchase Price and no change in the number
of Warrant Shares purchasable shall be made under this Section 5 as a result of
or by reason of any such subdivision or combination.
5.9 Determination of Consideration Received. For
purposes of this Section 5, the amount of consideration received by the Company
in connection with the issuance or sale of capital stock, Options or Convertible
Securities shall be determined in accordance with the following:
(a) In the event that shares of capital stock, Options or
Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the amount
payable to the Company therefor, without deduction of any expenses
incurred or any underwriting commissions or concessions paid or allowed
by the Company in connection therewith.
(b) In the event that any shares of capital stock, Options or
Convertible Securities shall be issued or sold for a consideration
other than cash, the amount of the consideration other than cash
payable to the Company shall be deemed to be the fair value of such
consideration as reasonably determined by the Board of Directors of the
Company, without deduction of any expenses incurred or any underwriting
commissions or concessions paid or allowed by the Company in connection
therewith.
(c) In the event that any shares of capital stock, Options or
Convertible Securities shall be issued in connection with any merger in
which the Company is the surviving
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<PAGE> 8
corporation, the amount of consideration therefor shall be deemed to be
the fair value as reasonably determined by the Board of Directors of
the Company of such portion of the assets and business of the
non-surviving corporation as such Board shall determine to be
attributable to such capital stock, Options or Convertible Securities,
as the case may be.
(d) In the event that any capital stock, Options and/or
Convertible Securities shall be issued in connection with the issue and
sale of other securities or property of the Company, together
comprising one integral transaction in which no specific consideration
is allocated to such capital stock, Options or Convertible Securities
by the parties thereto, such capital stock, Options and/or Convertible
Securities shall be deemed to have been issued for such consideration
as determined in good faith by the Board of Directors of the Company.
5.10 Record Date as Date of Issue or Sale. In the
event that at any time the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them (i) to receive a dividend or
other distribution payable in capital stock, Options or Convertible Securities,
or (ii) to subscribe for or purchase capital stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of capital stock, Options or Convertible Securities deemed to
have been issued or sold upon the declaration of such dividend or the making of
such other distribution or the date of the granting of such right of
subscription or purchase, as the case may be; provided, nothing contained herein
will be deemed to require the Company to issue or deliver such capital stock,
Options or Convertible Securities until the capital stock, Options or
Convertible Securities which are the subject of any such dividend, distribution
or subscription right are issued or delivered to the holders of Common Stock.
5.11 Treasury Stock. The number of shares of capital
stock outstanding at any given time shall not include shares owned or held by or
for the account of the Company, and the disposition of any such shares (other
than their cancellation without reissuance) shall be considered an issue or sale
of capital stock for the purposes of this Section 5.
5.12 Certain Issues of Capital Stock Excepted.
Anything herein to the contrary notwithstanding, the Company shall not be
required to make any adjustment to the Purchase Price in the case of the
issuance from time to time after the date hereof of shares of capital stock
reserved by the Company for the grant and exercise of (a) options to purchase
capital stock or (b) rights under the Company's current employee stock purchase
plan, in each case, granted to directors, officers, employees, or consultants of
the Company pursuant to arrangements, plans or contracts approved by the Board
of Directors of the Company.
6. No Dilution or Impairment. The Company will not, by
amendment of its Certificate of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the holders of this Warrant against dilution or other impairment. Without
limiting the generality of the foregoing, the Company (a) will not increase the
par value or stated value of any shares of stock receivable on the exercise of
this Warrant above the amount payable therefor on such exercise, (b) will take
all such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of stock on the
exercise of this Warrant, and (c) will not transfer all or substantially all of
its properties and assets to any other person (corporate or otherwise), or
consolidate with or merge into any other person or permit any such person to
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<PAGE> 9
consolidate with or merge into the Company (if the Company is not the surviving
person), unless such other person shall expressly assume in writing and become
bound by all the terms of this Warrant.
7. Certificate as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock (or Other Securities)
issuable on the exercise of this Warrant, the Company at its expense will
promptly cause its chief financial officer to compute such adjustment or
readjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of capital stock (or, to the extent not constituting Common
Stock, Other Securities) issued or sold or deemed to have been issued or sold,
(b) the number of shares of each class or series of capital stock outstanding or
deemed to be outstanding, and (c) the Purchase Price and the number of shares of
Common Stock (and, to the extent not constituting Common Stock, Other
Securities) to be received upon exercise of this Warrant, in effect immediately
prior to such issue or sale and as adjusted and readjusted as provided in this
Warrant. The Company will forthwith mail a copy of each such certificate to the
holder of this Warrant, and will, on the written request at any time of the
holder of this Warrant, furnish to such holder a like certificate setting forth
the Purchase Price at the time in effect and showing how it was calculated.
8. Registration Rights. The holder(s) of this Warrant and any
other Warrants issued pursuant to the terms hereof from time to time shall be
entitled to the registration rights in respect thereof as provided in the
Registration Rights Agreement between the Company and i2, dated October 12,
1999, in accordance with the terms thereof.
9. Notices of Record Date, etc. In the event of:
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend or other distribution,
or any right to subscribe for, purchase or otherwise acquire any shares
of stock of any class or any other securities or property, or to
receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of the
Company to or consolidation or merger of the Company with or into any
other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed to each
holder of a Warrant a notice specifying (i) the date on which any such record is
to be taken for the purpose of such dividend, distribution or right, and stating
the amount and character of such dividend, distribution or right, (ii) the date
on which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock (or, to the extent not constituting Common Stock, Other Securities) shall
be entitled to exchange their shares of Common Stock (or, to the extent not
constituting Common Stock, Other Securities) for securities or other property
deliverable on such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up, and
(iii) the amount and character of any stock or other securities, or rights or
options with respect
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<PAGE> 10
thereto, proposed to be issued or granted, the date of such proposed issue or
grant and the persons or class of persons to whom such proposed issue or grant
is to be offered or made. Such notice shall be mailed at least ten Business Days
prior to the date specified in such notice on which any such action is to be
taken.
10. Reservation of Stock, etc. Issuable on Exercise of
Warrants. The Company will at all times reserve and keep available, solely for
issuance and delivery on the exercise of this Warrant, all shares of Common
Stock (or, to the extent not constituting Common Stock, Other Securities) from
time to time issuable upon the exercise of this Warrant.
11. Exchange of Warrants. On surrender for exchange of this
Warrant, properly endorsed, to the Company, the Company at its expense will
issue and deliver to or on the order of the holder thereof a new Warrant or
Warrants of like tenor, in the name of such holder or as such holder (on payment
by such holder of any applicable transfer taxes) may direct, filling in the
aggregate on the face or faces thereof the number of shares of Common Stock
called for on the face or faces of the Warrant so surrendered; provided,
however, that in no event will the Company be obligated to recognize or permit
any transfer of this Warrant that would result in the assignor or any assignee
receiving a Warrant exercisable with respect to 25,000 or fewer shares of Common
Stock.
12. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction of any Warrant,
on delivery of an indemnity agreement or security reasonably satisfactory in
form and amount to the Company or, in the case of any such mutilation, on
surrender and cancellation of such Warrant, the Company at its expense will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
13. Remedies. [Deleted.]
14. Negotiability, etc. This Warrant is issued upon the
following terms, to all of which each holder or owner hereof by the taking
hereof consents and agrees, subject to the limitation on transfer set forth in
Section 11:
(a) title to this Warrant may be transferred by endorsement
(by the holder hereof executing the form of assignment at the end
hereof) and delivery in the same manner as in the case of a negotiable
instrument transferable by endorsement and delivery; and
(b) any person in possession of this Warrant properly endorsed
for transfer to such person (including endorsed in blank) is authorized
to represent himself as absolute owner hereof and is empowered to
transfer absolute title hereto by endorsement and delivery hereof to a
bona fide purchaser hereof for value; each prior taker or owner waives
and renounces all of his equities or rights in this Warrant in favor of
each such bona fide purchaser, and each such bona fide purchaser shall
acquire absolute title hereto and to all rights represented hereby.
Nothing in this paragraph (b) shall create any liability on the part of
the Company beyond any liability or responsibility it has under law.
15. Notices, etc. All notices and other communications from
the Company to the holder of this Warrant shall be mailed by first class
registered or certified mail, postage prepaid at such address as may have been
furnished to the Company in writing by such holder or, until any such holder
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<PAGE> 11
furnishes to the Company an address, then to, and at the address of, the last
holder of this Warrant who has so furnished an address to the Company.
16. Miscellaneous. This Warrant and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought. This Warrant shall be construed and enforced in
accordance with and governed by the internal substantive laws of the State of
Texas, without regard to the conflicts of law principles thereof and, to the
maximum extent practicable, will be deemed to call for performance in Dallas
County, Texas. The headings in this Warrant are for purposes of reference only,
and shall not limit or otherwise affect any of the terms hereof. The invalidity
or unenforceability of any provision hereof shall in no way affect the validity
or enforceability of any other provision.
17. Expiration. The right to exercise this Warrant shall
expire at 5:00 p.m. (Dallas, Texas time), October 12, 2001.
18. Warrant Holders Not Deemed Shareholders. No holder of this
Warrant shall, as such, be entitled to vote or to receive dividends or be deemed
the holder of Common Stock or, to the extent not constituting Common Stock,
Other Securities that may at any time be issuable upon exercise of this Warrant
for any purpose whatsoever, nor shall anything contained herein be construed to
confer upon the holder of this Warrant, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issue or reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger or conveyance or
otherwise), or to receive notice of meetings, or to receive dividends or
subscription rights, until such holder shall have exercised this Warrant and
been issued Common Stock or, to the extent not constituting Common Stock, Other
Securities in accordance with the provisions hereof.
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<PAGE> 12
IN WITNESS WHEREOF, the Company has executed this Warrant as of the
date first written above.
THE VIALINK COMPANY
By: /s/ J. Andrew Kerner
--------------------
Name: J. Andrew Kerner
Title: Chief Financial Officer
[SIGNATURE PAGE TO WARRANT]
<PAGE> 13
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
THE VIALINK COMPANY
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder, _____________
shares (the "Shares") of Common Stock of The viaLink Company and herewith makes
payment of $________ therefor, and requests that the certificate for such Shares
be issued in the name of, and delivered to ______________________________,
federal taxpayer identification number ______________________, whose address is
____________________ _________________________________________.
In connection with the exercise of this Warrant, the undersigned
represents and warrants as follows:
(a) The undersigned is purchasing the Shares for the account
of the undersigned and not as a nominee or agent, and the undersigned
has no present intention of granting any participation in the same, and
does not have any contract, undertaking, agreement or arrangement with
any person to grant participation to such person or to any third
person, with respect to any of such Shares;.
(b) The undersigned has received or has had full access to all
the information it considers necessary or appropriate to make an
informed investment decision with respect to the Shares. The
undersigned has had an opportunity to ask questions of and receive
answers from the Company and to obtain additional information (to the
extent the Company possessed such information or could acquire it
without unreasonable effort or expense) necessary to verify any
information furnished to undersigned or to which the Company has
access.
(c) The undersigned understands that the Shares are
characterized as "restricted securities" under the federal securities
laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws
and applicable regulations such securities may be resold without
registration under the Securities Act of 1933, as amended (the
"Securities Act") only in certain limited circumstances. In this
connection, the undersigned represents that it is familiar with
Securities and Exchange Commission ("SEC") Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by
the Securities Act.
(d) The undersigned is an "accredited investor" within the
meaning of SEC Rule 501 of Regulation D, as presently in effect.
(e) The undersigned agrees not to offer, sell, exchange,
transfer, pledge or otherwise dispose of any of the Shares unless at
that time either:
(1) such transaction is permitted pursuant to the
provisions of Rule 144 under the Securities Act or
another exemption from registration under the
Securities Act and all applicable state securities
laws;
(2) a registration statement under the Securities Act and
all applicable state securities laws covering such
securities proposed to be sold, transferred or
otherwise disposed of, describing the manner and
terms of the
<PAGE> 14
proposed sale, transfer or other disposition, and
containing a current prospectus, is filed with the
SEC and all applicable state securities law agencies
and made effective under the Securities Act and all
applicable state securities laws; or
(3) an authorized representative of the SEC and all
applicable state securities agencies shall have
rendered written advice to undersigned (with a copy
thereof and of all other related communications
delivered to the Company) to the effect that the SEC
and/or such state securities agencies will take no
action, or that the staff of the SEC and/or such
state securities agencies will recommend that the SEC
and such state securities agencies, as applicable,
take no action, with respect to the proposed offer,
sale, exchange, transfer, pledge or other disposition
if consummated.
(f) All certificates representing the Shares and any
certificates subsequently issued with respect thereto or in
substitution therefor shall bear a legend that such securities may only
be sold or disposed of in accordance with (i) the provisions of the
Securities Act, the rules and regulations thereunder and any applicable
state securities laws, (ii) pursuant to an effective registration
statement or (iii) pursuant to an exemption from the
registration/qualification requirements of the Securities Act and any
applicable state securities laws. The Company, at its reasonable
discretion, may cause stop transfer orders to be placed with its
transfer agent with respect to the certificates for the Shares but not
as to the certificates for any part of such Shares as to which said
legend is no longer required.
Dated: -----------------------------------------
----------------- (Signature must conform to name of holder
as specified on the face of the Warrant)
-----------------------------------------
(Address)
Signed in the presence of:
- ----------------------------
2
<PAGE> 15
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto ______________________________________, federal taxpayer
identification number ___________, whose address is
___________________________________________________, the right represented by
the within Warrant to purchase ___________ shares of Common Stock of The viaLink
Company to which the within Warrant relates, and appoints
___________________________ Attorney to transfer such right on the books of The
viaLink Company with full power of substitution in the premises.
Dated: -----------------------------------------
----------------- (Signature must conform to name of holder
as specified on the face of the Warrant)
-----------------------------------------
(Address)
Signed in the presence of:
- ----------------------------
3
