1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
FORM 8-K
CURRENT REPORT
Pursuant to
Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of February 4, 1999
earliest event reported):
THE VIALINK COMPANY
(Exact Name of Registrant as Specified
in Its Charter)
Oklahoma
(State of Other
Jurisdiction of
Incorporation)
333-69319 73-1247666
(Commission File (IRS Employer
Number) Identification No.)
13800 Benson Road, Suite 100, Edmond, 73013
Oklahoma
(Address of Principal Executive Offices) (Zip Code)
(405) 936-2500
(Registrant's Telephone Number,
Including Area Code)
N/A
(Former Name or Former Address, if
Changed Since Last Report)
Item 5.Other Events.
On February 4, 1999, Registrant entered into a Note
Purchase Agreement (the "Note Purchase Agreement") with Hewlett-
Packard Company ("HP") pursuant to which HP purchased from
Registrant a $6.0 million Secured Subordinated Promissory Note
(the "Note") bearing an 11.5% interest rate. Subject to
shareholder approval, which approval will be solicited at the
next annual meeting of shareholders of the Registrant, the Note
will be exchanged for a Subordinated Secured Convertible
Promissory Note ( the "Convertible Note") convertible into common
stock of the Registrant at a conversion price of $7.00 per share.
In connection with the execution of the Note,
Registrant granted to HP certain demand and piggyback
registration rights pursuant to a Shareholder Agreement, dated as
of February 4, 1998 (the "Shareholder Agreement"), by and between
Registrant and HP. In addition, pursuant to the terms of the
Shareholder Agreement, HP has agreed to be subject to certain
transfer restrictions on the shares that it may acquire upon
conversion of the Convertible Note and certain purchase
restrictions limiting its ability to acquire additional shares of
common stock of the Registrant.
Copies of the Shareholder Agreement, the Note Purchase
Agreement, the Note and the Security Agreement, dated as of
February 4, 1999, by and between Registrant and HP, are attached
hereto as exhibits 4.1, 10.1, 10.2 and 10.3, respectively.
Item 7.Financial Statements and Exhibits.
(c) Exhibits.
4.1 Shareholder Agreement, dated as of February
4, 1999, by and between Registrant and
Hewlett-Packard Company
10. Note Purchase Agreement, dated as of
1 February 4, 1999, by and between Registrant
and Hewlett-Packard Company
10. Secured Subordinated Promissory Note, dated
2 February 4, 1999, in favor of Hewlett-
Packard Company
10. Security Agreement, dated as of February 4,
3 1999, by and between Registrant and Hewlett-
Packard Company
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
THE VIALINK COMPANY
Dated: March 2, 1999 By: /s/ Lewis B. Kilbourne
Lewis B. Kilbourne
Chief Executive Officer
EXHIBIT INDEX
Exhibit No. Description of Exhibit
4.1 Shareholder Agreement, dated as of
February 4, 1999, by and between
Registrant and Hewlett-Packard Company
10.1 Note Purchase Agreement, dated as of
February 4, 1999, by and between
Registrant and Hewlett-Packard Company
10.2 Secured Subordinated Promissory Note,
dated February 4, 1999, in favor of
Hewlett-Packard Company
10.3 Security Agreement, dated as of February
4, 1999, by and between Registrant and
Hewlett-Packard Company
4
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "Agreement") is made
and entered into as of February 4, 1999, by and between The
viaLink Company, an Oklahoma corporation (the "Company"), and
Hewlett-Packard Company, a Delaware corporation (the "Holder").
Capitalized terms used but not defined herein shall have the
meanings set forth in the Note Purchase Agreement (as defined
below).
RECITALS:
WHEREAS, the parties to this Agreement are parties to a
Note Purchase Agreement of even date herewith (the ``Note
Purchase Agreement''), pursuant to which the Company shall issue
to Holder a Secured Subordinated Promissory Note in the principal
amount of $6,000,000, which note may be exchanged, subject to and
in accordance with the terms of the Note Purchase Agreement, for
a Convertible Secured Subordinated Note of like principal amount
convertible into shares of the Company's Common Stock (the
"Convertible Note");
WHEREAS, as a condition to the obligations of the
parties to consummate the transactions contemplated by the Note
Purchase Agreement, the Company has agreed to provide certain
rights to Holder and Holder has agreed to certain restrictions,
each as set forth in this Agreement.
AGREEMENT:
NOW, THEREFORE, the parties hereto agree as follows:
I. REGISTRATION RIGHTS
1. Demand Registration.
(a) Right to Demand Registration. On or after the date
that is eighteen (18) months after the date hereof, the Holder
may, at any time, request registration under the Securities Act
of 1933, as amended (the "Securities Act") of the sale of 50% or
greater of the number of its Registrable Securities (as defined
in paragraph 9 below of this Article I) held as Common Stock (as
defined in paragraph 9 below of this Article I) pursuant to a
registration statement on Form S-1, Form SB-2 or any similar or
successor "long-form" registration statement available to the
Company (each such registration being a "Long-Form Registration")
or, if available, on Form S-2, Form S-3, or on any similar or
successor short-form registration statement ("Short-Form
Registration"); provided that the total gross estimated proceeds
of any such offering are at least $3,000,000. The Holder shall
be entitled to request one (1) Long-Form Registration and three
(3) Short-Form Registrations. All registrations requested
pursuant to this paragraph 1(a) are referred to as "Demand
Registrations". A Demand Registration will be pursuant to a
Short-Form Registration whenever the Company is permitted to use
any applicable short form.
(b) Cutback. If a Demand Registration is an underwritten
public offering and the managing underwriters advise the Company
in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number
which can successfully be sold in such offering, the Company will
include in such registration, prior to the inclusion of any
securities which are not Registrable Securities, the number of
Registrable Securities requested to be included which in the
opinion of such underwriters can be successfully sold, such
Registrable Securities to be taken from the holders of such
securities pro rata on the basis of the number of shares of such
securities for which the Company has been given requests for
inclusion therein by each such holder thereof.
(c) Timing. The Company shall not be obligated to effect
any Demand Registration within 180 days of a previous Demand
Registration or within 180 days of a previous registration in
which the Holder was given piggyback rights pursuant to paragraph
2 below. The Company may postpone for up to 180 days the filing
or effectiveness of a registration statement for a Demand
Registration if the Company reasonably believes such Demand
Registration would be detrimental to the Company and its
shareholders for such registration statement to be filed and it
is therefore essential to defer the filing of such registration
statement, or to permit the Company to avoid a special audit.
(d) Bankers. The Company shall have the right to select
the investment banker(s) and manager(s), if any, to administer
the offering.
2. Piggyback Registrations.
(a) Right to Piggyback. If, at any time during which any
Registrable Securities remain outstanding, but without obligation
to do so, the Company proposes to register any of its Common
Stock under the Securities Act in an underwritten public offering
(other than pursuant to a registration on Form S-8 or Form S-4,
or any similar forms then in effect) (each such registration
being a "Piggyback Registration"), the Company will give prompt
written notice (the "Registration Notice") to the Holder of its
intention to effect such a registration and will, subject to
paragraphs 2(b) and 2(c) below, include in such registration all
Registrable Securities of the Holder with respect to which the
Company has received written requests for inclusion therein
within 15 days after the receipt of the Company's notice, not to
exceed a maximum number of shares for the Holder equal to the
product obtained when the Holder's pre-registration holdings of
Registrable Securities are multiplied by a fraction, the
numerator of which is the total number of shares proposed to be
sold in the Piggyback Registration by all other selling
shareholders and the denominator of which is the total pre-
transaction shareholdings of all other selling shareholders ("Pro
Rata Fraction").
(b) Priority on Primary Registrations. If a Piggyback
Registration includes shares to be sold on behalf of the Company
("Primary Shares"), and the managing underwriter or underwriters
advise the Company that in their opinion the number of securities
requested to be included in such registration exceeds the number
which can be sold in such offering without materially adversely
affecting the marketability of the offering, the Company will
include in such registration, (i) first, the securities the
Company proposes to sell, and (ii) second, the Registrable
Securities requested to be included in such registration by the
Holders and all other Common Stock requested to be included in
such registration (the "Other Common Stock"), to be included pro
rata on the basis of the number of shares of such securities for
which the Company has been given written requests for inclusion
therein by each such holder thereof.
(c) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf
of holders of the Company's securities (not including Primary
Shares), and the managing underwriters advise the Company in
writing that in their opinion (the number of securities requested
to be included in such registration exceeds the number which can
be sold in such offering without adversely affecting the
marketability of the offering, the Company will include in such
registration (i) first, the securities requested to be included
therein by the holders requesting such registration, if any, and
(ii) second, the Registrable Securities requested to be included
in such registration by the Holder and all Other Common Stock
requested to be included in such registration, to be included pro
rata on the basis of the number of shares of such securities for
which the Company has been given written requests for inclusion
therein by each such holder thereof.
3. Market Stand-Off Agreements.
Each holder of Registrable Securities agrees not to
effect any public sale or distribution (including sales pursuant
to Rule 144) of equity securities of the Company, or any
securities convertible into or exchangeable or exercisable for
such securities, during the seven days prior to and the earlier
of (a) the 180 day period beginning on the effective date of any
Demand Registration or Piggyback Registration in which
Registrable Securities are included (except as part of such
underwritten registration), and (b) the time period for which all
executive officers and directors of the Company agree to be bound
pursuant to similar agreements, unless the underwriters managing
the registered public offering otherwise agree.
4. Registration Procedure.
The Company will use all commercially reasonable
efforts to effect the registration and the sale of such
Registrable Securities in accordance with the provisions of this
Agreement, and pursuant thereto the Company will, as
expeditiously as possible but subject to the terms hereof:
(i) Prepare and file with the Securities and Exchange Commission
a registration statement with respect to such Registrable
Securities on such appropriate and legally available form as the
Company in its discretion shall elect (the "Registration
Statement") and use all commercially reasonable efforts to cause
such Registration Statement to become effective (provided that
before filing a Registration Statement or prospectus or any
amendments or supplements thereto, the Company will furnish to
the counsel selected and paid for by Holder copies of all such
documents proposed to be filed);
(ii) Prepare and file with the Securities and Exchange Commission
such amendments and supplements to such Registration Statement
and the prospectus used in connection therewith (the
"Prospectus") as may be necessary to keep such Registration
Statement effective for a period of not less than 180 days from
the effective date of the Registration Statement and comply with
the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration
Statement during such period;
(iii) Furnish each seller of Registrable Securities such
number of copies of such Registration Statement, each amendment
and supplement thereto, 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 Securities
owned by such seller;
(iv) Use all commercially reasonable efforts to register or
qualify such Registrable Securities under the securities or blue
sky laws of such states and the District of Columbia as any
seller of Registrable Securities reasonably requests and do any
and all other acts and things which may be reasonably or
advisable to enable such seller to consummate the disposition in
such states and the District of Columbia of the Registrable
Securities owned by Holder (provided that the Company will not be
required to (a) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify
but for this subparagraph (d), (b) subject itself to taxation in
any such jurisdiction or (c) consent to general service of
process in any such jurisdiction);
(v) Notify each seller of such Registrable Securities of the
happening of any event of which the Company becomes aware, 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 the Company will prepare a supplement or
amendment to the Prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such Prospectus
will not contain an untrue statement of a material fact or omit
to state any fact necessary to make the statements therein not
misleading.
(vi) Cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the
Company are then listed;
(vii) Otherwise use all commercially reasonable efforts to
comply with all applicable rules and regulations of the
Securities and Exchange Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months beginning
with the first day of the Company's first full calendar quarter
after the effective date of the Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder; and
(viii) 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 common stock
included in such Registration Statement for sale in any
jurisdiction, the Company will use all commercially reasonable
efforts promptly to obtain the withdrawal of such order.
5. Holder Procedures.
In connection with any Registration Statement, the
Company may require Holder to furnish to the Company such
information regarding the Holder and its proposed distribution of
Registrable Securities, to the extent necessary to comply with
the Securities Act, as the Company may from time to time
reasonably request in writing. As a condition precedent to the
Company's obligations hereunder, Holder agrees to cooperate with
the Company in all reasonable respects in connection with the
preparation and filing of each Registration Statement and any
amendment thereof, any Prospectus relating thereto and any
Prospectus supplement relating thereto with respect to the offer
and sale of Registrable Securities of such Holder.
6. Registration Expenses.
(a) Company Expenses. All expenses incident to the
Company's performance of or compliance with its registration
obligations under this Agreement, including all NASD registration
and filing fees, fees and expenses of compliance with securities
or blue sky laws, listing fees, printing expenses, messenger and
delivery expenses, and fees and disbursements of counsel for the
Company and all independent certified public accountants, and
other Persons retained by the Company, including all consultants,
advisors, and experts fees and expenses of thc Company of the
type ordinarily incurred in connection with the registration of
securities (all such expenses being herein called "Registration
Expenses"), will be borne by the Company; provided that
Registration Expenses shall not include, and Holder shall pay its
respective Pro Rata Fraction of all underwriting discounts and
commissions applicable to Registrable Securities sold by it
pursuant to this Agreement and all legal fees and expenses of
counsel retained by the Holder.
(b) Holder Expenses. To the extent Registration Expenses
are not required to be paid by the Company pursuant to paragraph
5(a), Holder will, vis a vis the other selling shareholders, pay
its respective Pro Rata Fraction of those Registration Expenses
directly allocable to the registration of Holder's securities so
included, and any Registration Expenses not so allocable will be
borne by all sellers of securities included in such registration
in proportion to the aggregate selling price of the securities to
be so registered.
7. Indemnification and Contribution.
(a) Indemnification by Company. The Company shall
indemnify and hold harmless, to the fullest extent permitted by
law, Holder, against all losses, claims, damages, liabilities and
expenses (including reasonable fees and legal expenses) resulting
from any untrue statement of a material fact contained in the
Registration Statement, any Prospectus, or any amendment or
supplement thereto, or any omission of a material fact required
to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading, except in each case insofar as the same arises out of
or is based upon an untrue statement of a material fact or an
omission to state a material fact in such Registration Statement,
Prospectus, amendment or supplement, as the case may be, made or
omitted, as the case may be, in reliance upon and in conformity
with written information furnished to the Company by Holder for
use therein or by Holder's failure to deliver a copy of the
Registration Statement or Prospectus or any amendments or
supplements thereto after the Company has furnished Holder with a
sufficient number of copies of the same.
(b) Indemnification by Holder. Holder shall indemnify and
hold harmless to the fullest extent permitted by law, the
Company, its officers, directors, employees, representatives and
agents, the underwriters (if any) in such offering, any other
Person selling securities under such registration statement, any
controlling person of any such underwriter or other Person, and
each Person who controls (within the meaning of the Securities
Act) the Company, against all losses, claims, damages,
liabilities and expenses (including reasonable costs of
investigation and legal expenses) resulting from any untrue
statement of a material fact contained in any Registration
Statement, any Prospectus, or any amendment or supplement
thereto, and any omission of a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, to the extent the same arises out of or is based upon
any untrue statement of a material fact or any omission to state
a material fact in such Registration Statement, Prospectus,
amendment or supplement, as the case may be, made or omitted, as
the case may be in reliance upon and in conformity with written
information furnished to the Company by Holder for use therein.
(c) Notice. Each party entitled to indemnification under
this paragraph 7 (the "Indemnified Party") shall give notice to
the party required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided, that
counsel for the Indemnifying Party, who will conduct the defense
of such claim or litigation, is approved by the Indemnified Party
(whose approval will not be unreasonably withheld or delayed);
and provided further, that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations except to the extent that
its defense of the claim or litigation involved is prejudiced by
such failure; provided, however, that the Indemnified Party shall
have the right to retain one separate counsel, with the fees and
expenses to be paid by the Indemnifying Party, if representation
of such Indemnified Party by the counsel retained by the
Indemnifying Party would be inappropriate due to the conflicted
interests between such Indemnified Party and the Indemnifying
Party. The Indemnified Party may participate in such defense at
such Indemnified Party's expense. No Indemnifying Party, in the
defense of any such claim or litigation, except with the prior
consent of each Indemnified Party, shall consent to entry of any
judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant of
plaintiff to such Indemnified Party of a release from all
liability in respect to any claim or litigation, and no
Indemnified Party will consent to entry of any judgment or settle
any claim or litigation without the prior written consent of the
Indemnifying Party. Each Indemnified Party shall furnish such
information regarding himself, herself, or itself and the claim
in question as the Indemnifying Party may reasonably request and
as shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.
(d) Contribution. If for any reason the indemnification
provided for in this Section 7 from an Indemnifying Party,
although otherwise applicable by its terms, is determined by a
court of competent jurisdiction to be unavailable to an
Indemnified Party hereunder, then the Indemnifying Party, in lieu
of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by the Indemnified Parties as a result of
such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of
such Indemnifying Party and the Indemnified Parties in connection
with the actions that resulted in such losses, claims, damages,
liabilities, or expenses, as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party
and the Indemnified Parties shall be determined by reference to,
among other things, whether any action in question, including any
untrue statement of a material fact, has been made by, or relates
to information supplied by, such Indemnifying Party or the
Indemnified Parties, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set
forth in paragraph 7(c) above, any legal or other fees or
expenses reasonably incurred by such party in connection with any
investigation or proceeding.
8. Participation in Underwritten Registrations.
No Person may participate in any registration hereunder
which is underwritten unless such Person (a) agrees to sell such
Person's securities on the basis provided in any underwriting
arrangements approved by the Company and other Person or Persons
entitled hereunder to approve such arrangements and (b) completes
and executes all questionnaires, powers of attorney, share
custody agreements, indemnities, underwriting agreements and
other documents required under the terms of such underwriting
arrangements.
9. Definitions.
(i) "Common Stock" means the Company's Common Stock, par value
$0.001 per share.
(ii) "Person" means any natural person and any corporation,
partnership, limited liability company or other business entity.
(iii) "Registrable Securities" means, with respect to Holder,
(i) the Company's Common Stock issued to Holder upon conversion
of the Convertible Note, and (ii) any Common Stock or other
equity securities issued or issuable with respect to the
securities referred to in clause (i) by way of a stock dividend
or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization.
As to any particular Registrable Securities, such securities will
cease to be Registrable Securities (A) when they have been
distributed to the public pursuant to an offering registered
under the Securities Act or (B) after the Registrable Securities
held by Holder may be sold in 90-day period pursuant to Rule 144
under the Securities Act (or any similar rule then in effect).
II. AGREEMENTS OF THE COMPANY
1. Financial Statements.
Until such date as HP no longer holds the Notes or any
shares of the Underlying Common Stock, and subject to paragraph
1(c) below, the Company will furnish the following reports to HP:
(a) Annual. As soon as practicable after the end of each
fiscal year of the Company, and in any event within ninety (90)
days thereafter, (i) a consolidated balance sheet of the Company
and its subsidiaries, if any as at the end of such fiscal year,
and consolidated statements of income and cash flows of the
Company and its subsidiaries, if any, for such year, prepared in
accordance with GAAP consistently applied and setting forth in
each case in comparative form the figures for the previous fiscal
year, all in reasonable detail and certified by independent
public accountants or recognized national standing selected by
the Company; and (ii) a statement setting forth any plan by the
company to open any additional offices or materially increase its
activities or move any material collateral to an office in the
subsequent quarter ("Expansion Plans"). The Company shall
deliver to HP such audited financial statements as at and for the
fiscal year ended December 31, 1998 by April 15, 1999.
(b) Quarterly. As soon as practicable after the end of the
first, second and third quarterly accounting periods in each
fiscal year of the Company, and in any event within forty-five
(45) days thereafter, (i) a consolidated balance sheet of the
Company and its subsidiaries, if any, as of the end of each
quarterly period, and consolidated statements of income and cash
flows of the company and its subsidiaries, if any, for such
period and for the current fiscal year to date, prepared in
accordance with GAAP (except that such financial statements need
not contain footnotes required by GAAP or normal year-end closing
adjustments), all in reasonable detail and certified by the chief
financial officer of the Company and (ii) a statement of its
expansion plans for the subsequent quarter.
(c) Exchange Act Compliance. For so long as the Company
remains subject to the reporting requirements of Section 12 or
Section 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"), the Company shall not be required to comply with
the requirements of paragraphs 1(a) and 1(b) above if the Company
delivers to Holder the reports required by the Exchange Act.
2. Board Observer Rights.
(i) Following a conversion of the Convertible Note,
such date as Holder owns less than five percent (5%) of the
Company's outstanding Common Stock on an as-converted basis, and
(ii) prior to conversion of the Convertible Note, the date of
repayment in full of the principal and all unpaid accrued
interest on the Notes, the Company shall invite Holder to send,
at Holder's expense, one representative who is reasonably
acceptable to the Company to attend (in person or by
teleconference), in a non-voting observer capacity, all meetings
of its Board of Directors and any committees thereof. The Holder
representative shall initially be Craig White. The Company shall
give the Holder representative copies of all notices, agendas,
minutes and consents that it provides to directors in connection
with regular or special meetings of the Board of Directors of the
Company; provided, however, that the Company reserves the right
to exclude such representative from access to any of such
materials or meetings or portions thereof if (a) the Company
reasonably considers any such material or portion thereof to be a
trade secret or similar confidential information, (b) the Company
believes upon advice of counsel that such exclusion is reasonably
necessary to preserve the attorney-client privilege, or (c) in
the judgment of a majority of the directors of the Company, such
access would materially impair the due consideration by the Board
of Directors of any matter. Holder agrees, on behalf of itself
and any representative, to hold in confidence and trust and not
to use or disclose any confidential information provided to or
learned by it in connection with its rights under this provision.
III. AGREEMENTS OF HOLDER
1. Transfer Restrictions.
Holder shall not transfer the beneficial ownership of
the Notes or the Underlying Common Stock except (i) pursuant to
registered public offering of Common Stock; (ii) to any person or
"group" (for purposes of Section 13(d) of the Exchange Act) that,
after giving effect to such transfer (and any series of related
transfers), will beneficially own less than 9.9% of the shares of
Common Stock then outstanding; (iii) upon the approval of the
Board of Directors of the Company, including a majority of the
independent directors; (iv) in connection with any business
combination, transaction or tender or exchange offer approved or
supported by the Board of Directors of the Company, including a
majority of independent directors; (v) pursuant to a bona fide
pledge of or the granting of a security interest or other lien in
the Notes or Underlying Common Stock in a transaction which
otherwise would not require consent hereunder; (vi) transfers to
affiliated entities, provided that such transferee agrees to
become similarly bound by this Agreement; and (vii) upon a
liquidation or dissolution of the Company or a transfer which is
effected by operation of law.
2. Purchase Restrictions.
Holder shall not, without the approval of the
Company's Board of Directors, including a majority of the
independent directors, acquire any additional beneficial
ownership in the Company's Common Stock or any other equity
security convertible into or exercisable for Common Stock;
provided, however, that approval of the Company's Board of
Directors shall not be required if acquisition does not cause
Holder's total beneficial ownership in the Company's Common Stock
to exceed the percentage of the Company's Common Stock held by
Holder at the time of full conversion of the Note.
3. Exchange Act Compliance.
Holder acknowledges and agrees that it shall bear
sole responsibility for compliance with the reporting
requirements of and obligations imposed Sections 13(d) and 13(g)
and Section 16 of the Exchange Act, and that Holder shall be
solely responsible for all expenses incurred in connection with
such compliance.
IV. HART-SCOTT-RODINO FILING
1. Best Efforts to Comply.
If applicable, at the time of conversion of all or
any portion of the Convertible Note into shares of the Company's
Common Stock, Holder and the Company shall use their best efforts
to comply with any applicable requirements under the Hart-Scott-
Rodino Act relating to filing and furnishing information to the
Department of Justice and the Federal Trade Commission,
including, but not limited to, the following:
(1) assisting in the preparation and filing of the
"Antitrust Improvements Act Notification and Report Form for
Certain Mergers and Acquisitions" and taking all other action
required by 16 C.F.R. Parts 801-803 (or any successor form or
Regulation);
(2) complying with any additional request for documents or
information made by the Department of Justice or the Federal
Trade Commission or by a court; and
(3) causing all affiliated persons of the "ultimate parent
entity" of the party within the meaning of the Hart-Scott-Rodino
Act to cooperate and assist in the filing and compliance.
2. Exchange of Information.
Holder and the Company shall exchange information as
may reasonably be requested by the other in connection with the
matters referred to in this Article IV.
3. Expenses.
Each party shall bear and pay its own legal fees,
expenses and filing fees in connection with an Hart-Scott-Rodino
Act filing made pursuant to this Article IV.
V. MISCELLANEOUS
1. Amendments and Waivers
. The provisions of this Agreement may be amended or
waived only upon the prior written consent of the Company and
Holder.
2. Successors and Assigns
. All covenants and agreements in this Agreement by or
on behalf of any of the parties hereto will bind and inure to the
benefit of the respective successors and permitted assigns.
3. Severability
. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is
held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of
this Agreement.
4. Counterparts
. This Agreement may be executed simultaneously in two
or more counterparts, any one of which need not contain the
signatures of more than one party, but all such counterparts
taken together will constitute one and the same agreement.
5. Descriptive Headings
. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of
this Agreement
6. Governing Law
. This Agreement shall be governed by and construed in
accordance with the internal law, and not the law of conflicts,
of the State of California.
7. Notices
. Any notice, request, or other communication required
or permitted hereunder shall be in writing and shall be deemed to
have been duly given on the date of delivery if personally
delivered, or the date of being faxed if sent by confirmed fax,
on the first business day after being sent if sent by recognized
overnight courier, and on the third business day after being
mailed if sent by registered or certified mail, postage prepaid,
addressed as follows:
if to Holder, to:
Hewlett-Packard Company
Financing & Complements Group
333 Logue Avenue
Mountain View, California 94043
Attention: General Manager
Fax: (650) 919-8013
with a copy to:
Hewlett-Packard Company
3000 Hanover Street
MS: 2OBQ
Palo Alto, California 94304
Attention: Legal Department
Fax: (650) 857-4392
if to the Company to:
The viaLink Company
13800 Benson Road, Suite 100
Edmond Oklahoma 73013-6417
Attention: Chief Executive Officer
Fax: (405) 236-2599
with a copy to:
Brobeck, Phleger & Harrison LLP
301 Congress Avenue, Suite 1200
Austin, Texas 78701
Attention: Matthew Lyons
Fax: (512) 477-5813
8. Entire Agreement.
This Agreement, together with the other Transaction
Documents, constitutes the full and entire understanding and
agreement between the parties with regard to the subject matter
hereof and thereof and supersedes any and all prior agreements
relating to the subject matter.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have executed this
Shareholder Agreement as of the date first written above.
COMPANY:
THE VIALINK COMPANY
By: _/s/ Lewis B. Kilbourne
Name: Lewis B. Kilbourne
Title: CEO
HOLDER:
HEWLETT-PACKARD COMPANY
By: /s/ Craig A. White
Name: Craig A. White
Title: VP & General Manager, FCG
4
NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT (the "Agreement") is
entered into and is effective as of February 4, 1999 by and
between The viaLink Company, an Oklahoma corporation (the
"Company"), and Hewlett-Packard Company, a Delaware corporation
("HP").
RECITALS:
WHEREAS, on the terms and subject to the conditions set
forth herein, HP is willing to advance $6,000,000 to the Company,
and the Company is willing to execute in favor of HP a
subordinated secured promissory note in the principal amount of
$6,000,000 (the "Initial Note") which note may be exchanged for a
similar note with certain conversion features on the terms set
forth herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the
representations, warranties, covenants and conditions set forth
below, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Purchase and Sale of Promissory Note; Issuance of
Convertible Note; Use of Proceeds.
(a) Issuance and Delivery of the Initial Note. Subject to the
terms and conditions of this Agreement, HP agrees to purchase at
the Closing (as defined below), and the Company agrees to sell
and issue to HP at the Closing, a Subordinated Secured Promissory
Note in the principal amount of $6,000,000, the form of which
note is attached hereto as Exhibit A (the "Initial Note"). The
issuance of the Initial Note shall take place at a closing (the
"Closing") to be held at such place and time and on such date
(the "Closing Date"), not later than February 4, 1999, as the
Company and HP may determine. At the Closing, the Company will
deliver to HP the Initial Note, against receipt by the Company of
an amount in immediately available funds equal to the face value
of the Initial Note (the "Purchase Price"). The Initial Note
shall be registered in HP's name in the Company's records.
(b) Issuance of Convertible Promissory Note.
(i) In connection with the proxy materials to be
prepared and distributed in connection with the Company's 1999
annual meeting of shareholders, in addition to any other matters
which may be submitted for shareholder approval, the Company
agrees to include a proposal to approve the issuance of additional
shares of its Common Stock, par value $0.001 per share (the "Common
Stock"), pursuant to the form of Subordinated Secured Convertible
Promissory Note attached as Exhibit B hereto (the "Convertible
Note" and, together with the Initial Note, sometimes hereinafter,
the "Notes") for the purpose of complying with Rule
4310(c)(25)(H)(i)(d) of the National Association of Securities
Dealers, Inc. Manual. Conditioned upon receipt of such
shareholder approval, within five (5) business days following its
1999 annual meeting of shareholders, upon HP's tender of the
original Initial Note for cancellation, the Company shall
exchange the Initial Note for the Convertible Note.
(ii) In the event that, for any reason the Company determines
that shareholder approval is not required in connection with the
issuance of the shares of Common Stock pursuant to the
Convertible Note (including, but not limited to, in the event
that (i) the number of shares to be issued falls below 20% of the
outstanding shares of Common Stock or (ii) the five (5) day
average closing price of the Company's Common Stock on the Nasdaq
Small Cap Market falls below $7.00, the conversion price set
forth in the Convertible Note), then the Company and HP shall
promptly exchange the Initial Note for the Convertible Note.
(iii) The conversion price set forth in the Convertible Note
shall not be subject to any adjustment for any change in the
market value of the Company's Common Stock between the date
hereof and the exchange of the Notes.
(c) Use of Proceeds. The parties intend that approximately
fifty percent (50%) of the Purchase Price of the Notes are to be
used by the Company for the purchase, directly or indirectly, of
HP products and/or services, and that the remaining amount may be
used for general corporate and working capital purposes, which
may include, subject to the restrictions imposed on the Company
pursuant to the Transaction Documents (as defined below),
potential acquisitions of companies and technologies which are
complementary to the Company's viaLink services.
2. Representation and Warranties of the Company
. The Company represents and warrants to HP that, as
of the date hereof, except as disclosed in the Disclosure
Schedule in the form of Schedule 1 attached hereto:
(a) Due Incorporation, Qualification, etc. The Company (i) is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation; and (ii) is
duly qualified, licensed to do business and in good standing as a
foreign corporation in each jurisdiction where the failure to be
so qualified or licensed could reasonably be expected to have a
material adverse effect on the Company and its subsidiaries taken
as a whole.
(b) Capitalization. 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. As of December 31, 1998, (i) 2,826,612 shares
of Common Stock were issued and outstanding; (ii) 360,000 shares
of Common Stock were reserved for issuance pursuant to certain
Stock Option Agreements dated October 15, 1996 initially issued
to Larry Howell and John Simonelli (the "Simonelli and Howell
Options"); (iii) up to 920,000 shares of Common Stock were
reserved for issuance upon the exercise of certain Redeemable
Common Stock Purchase Warrants with an exercise price of $5.00
per share (the "Warrants"); (iv) 100,000 shares of Common Stock
were reserved for issuance pursuant to the exercise of certain
Common Stock Underwriter Warrants with an exercise price of $6.00
per share (the "Common Stock Underwriter Warrants") issued to the
underwriters in connection with the Company's initial public
offering; (v) 80,000 shares of Common Stock were reserved for
issuance pursuant to the exercise of certain Warrant Underwriter
Warrants entitling the holder to purchase a warrant to purchase
Common Stock for $0.15 per warrant, which warrant entitles the
holder thereof to purchase a share of Common Stock at $6.00 share
(the "Warrant Underwriter Warrants"); and (vi) 50,000 shares of
Common Stock pursuant to the exercise of options to purchase up
to 38,000 shares of Common Stock at an exercise price of $3.50
per share issued to David Mitchell and options to purchase up to
12,000 shares of Common Stock at an exercise price of $3.50 per
share issued to Ron Beasley, both pursuant to that certain Asset
Purchase Agreement dated June 12, 1997 by and among the Company
(f/k/a Applied Intelligence Group, Inc.), HT Technologies, Inc.,
and Messrs. Mitchell and Beasley (the "Ijob Options"). The
outstanding shares of the Company's Common Stock have been duly
authorized and validly issued and are fully paid and
nonassessable. Other than pursuant to conversion of the Notes,
the exercise of the Simonelli and Howell Options, the exercise of
the Warrants, the Common Stock Underwriter Warrants and the
Warrant Underwriters Warrants, the exercise of the Ijob Options,
and the exercise of the stock options granted or which may be
granted under the Company's stock option plans, the Company has
not authorized or issued any other shares of its capital stock or
any securities convertible into or exercisable for shares of its
capital stock. As of December 31, 1998, the Company had reserved
1,510,946 shares of Common Stock for issuance under the Company's
option plan. As of December 31, 1998, there were outstanding
options to purchase up to 1,212,622 shares of Common Stock under
the Company's stock option plans. All outstanding securities of
the Company were issued in compliance with applicable federal and
state securities laws.
(c) Authority; Enforceability. The execution, delivery and
performance by the Company of each Transaction Document (as
defined below) and the consummation by the Company of the
transaction contemplated thereby (i) are within the power of the
Company, and (ii) have been duly authorized by all necessary
actions on the part of the Company. Each Transaction Document
executed, or to be executed, by the Company has been, or will be,
duly executed and delivered by the Company and constitutes, or
will constitute, a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms, excepts as limited by bankruptcy, insolvency or other laws
of general application relating to or affecting the enforcement
of creditors' rights generally and general principles of equity.
(d) Issuance of Common Stock. The shares of the Company's
Common Stock issuable upon conversion of the Convertible Note
(the "Underlying Common Stock"), when issued in compliance with
this Agreement and the Convertible Note, will be validly issued,
fully paid and nonassessable and will be free of any liens or
encumbrances, other than any liens or encumbrances created by or
imposed upon HP through no action of the Company; provided,
however, that the Underlying Common Stock will be subject to
restrictions on transfer under federal and/or state securities
laws and under the Shareholder Agreement (as defined below). The
Underlying Common Stock is not subject to any preemptive rights
or rights of first refusal.
(e) Non-Contravention. The execution and delivery by the
Company of the Transaction Documents and the performance and
consummation of the transactions contemplated thereby do not and
will not (i) violate the Certificate of Incorporation, as
amended, or Bylaws, as amended, of the Company, or any judgment,
order, writ, decree, statute, rule or regulation applicable to
the Company; (ii) violate any provision of, or result in the
breach or the acceleration of, or entitle any other person to
accelerate (whether after the giving of notice or lapse of time
or both), any mortgage, indenture, agreement, instrument or
contract to which the Company is a party or by which it is bound;
or (iii) result in the creation or imposition of any lien upon
any property, asset or revenue of the Company (other than any
Lien (as defined in the Security Agreement, dated as of the date
hereof, by and between the parties hereto) or the suspension,
revocation, impairment, forfeiture, or nonrenewal of any material
permit, license, authorization or approval applicable to the
Company, its business or operations or any of its assets or
properties.
(f) Approvals. Except for (i) the shareholder approvals
contemplated by Section 1(b) above, (ii) the filing of an
application to list the Underlying Common Stock on the Nasdaq
Small Cap Market, and (iii) any federal or state securities
filings required subsequent to the Closing, no consent, approval,
order or authorization of, or registration, declaration or filing
with, any governmental authority or other Person (as defined in
the Security Agreement) (including without limitation the
shareholders of any Person) is required in connection with the
execution and delivery of the Transaction Documents executed by
the Company and the performance and consummation of the
transactions contemplated thereby.
(g) Title. The Company owns and has good and marketable title
in fee simple absolute to, or a valid leasehold interest in, all
of its real properties and good title to all personal property
included in its other assets and properties as reflected in the
unaudited balance sheet as at, and income statement for nine
months ended September 20, 1998, as set forth in the Company's
Quarterly Report on Form 10-QSB for the quarterly period ended
September 30, 1998 (collectively, the "Unaudited Financial
Statements"), (except those assets and properties disposed of in
the ordinary course of business since the date of such Unaudited
Financial Statements and the sale of the Company's ijob.com, Inc.
subsidiary in exchange for an $800,000 promissory note) and all
respective assets and properties acquired by the Company and the
Company's subsidiaries since such date (except those disposed of
in the ordinary course of business). Such assets and properties
are subject to no Lien, except for Permitted Liens (as defined in
the Security Agreement).
(h) Financial Statements. The Unaudited Financial Statements
(i) are in accordance with the books and records of the Company,
which have been maintained in accordance with good business
practices; and (ii) fairly present the consolidated financial
position of the Company as of the dates presented therein and the
income for the periods presented therein. The Unaudited
Financial Statements set forth in reasonable detail the
Company's accounting policies, principles and methods, and there
has been no change thereof since the date of such Unaudited
Financial Statements, except as may be required by generally
accepted accounting principles ("GAAP"). Except as set forth in
the Unaudited Financial Statements, the Company does not have any
contingent obligations, liability for taxes or other outstanding
obligations which should have been reflected in such financial
statements, which are material in the aggregate and of which the
Company is aware, except as incurred in the ordinary course of
business after the date of such Unaudited Financial Statements.
The Company has capitalized certain software development costs,
and such costs are reflected in the Unaudited Financial
Statements.
(i) Key Employees. The Company does not know of the impending
resignation or termination of employment of any key officer,
consultant or employee of the Company that, if consummated, would
have a materially adverse affect on its business.
(j) Material Liabilities. The Company has no material
liabilities or obligation, absolute or contingent (individually
or in the aggregate), except (i) the liabilities and obligations
set forth in the Unaudited Financial Statements, (ii) liabilities
and obligations which have been incurred in the ordinary course
of business, and (iii) liabilities and obligations under sales,
procurement, licenses and other contracts and arrangements
entered into in the ordinary course of business.
(k) Patents and Other Intangible Assets.
(i) The Company owns or has the right to use, all patents,
trademarks, service marks, trade names, copyrights (and licenses
with respect to the foregoing) used in the conduct of its
business. There are no pending or, to the Company's knowledge,
threatened claims against the Company alleging that the conduct
of the Company's business infringes upon otherwise conflicts with
the right or claimed right of any person under or with respect to
any of the foregoing. The Company is not obligated or under any
liability whatsoever to make any payments by way of royalties,
fees or otherwise to any owner of, licensor of or other claimant
to any patent, trademark, trade name, copyright or other
intangible asset, with respect to the use thereof in connection
with the conduct of its business or otherwise, except with
respect to licenses entered into by the Company in the ordinary
course of business. Except in the ordinary course of business,
including as part of the standard subscription agreement for its
viaLink service, the Company has not granted any licenses or
manufacturing rights with respect to its business as now
conducted or as now proposed to conducted.
(ii) The Company owns or has the right to use all trade secrets,
including know-how, inventions, designs, processes and technical
data required for the development, operation and sale of all
products and services sold and now proposed to be sold by the
Company, free and clear of any rights of others.
(iii) The Company has not received any communication alleging
that the Company has violated or, by conducting its business as
now proposed, would violate or infringe in any way any of the
patents, trademarks, service marks, trade names, copyrights,
trade secrets or other proprietary rights or processes of any
other person or entity.
(l) Securities Law Compliance. Subject to the accuracy of HP's
representations and warranties in Section 3 below, the offer,
sale and issuance of the Note to be issued in conformity with
this Agreement and the issuance of the Underlying Common Stock
upon conversion of the Note constitute transactions exempt from
the registration requirements of Section 5 of the Securities Act
of 1933, as amended (the "Securities Act"), and all applicable
state securities laws.
(m) No Brokers or Finders. The Company has not incurred, and
will not incur, directly or indirectly, as a result of any action
taken or permitted to be taken by the Company, any liability for
brokerage or finders' fees or agents' commissions or similar
charges in connection with the execution and performance of the
transactions contemplated by this Agreement.
(n) Disclosure. This Agreement, together with the Disclosure
Schedule, the Notes, the Shareholder Agreement (as defined
below), and the Security Agreement (as defined below)
(collectively, the "Transaction Documents"), when taken as a
whole, does not contain any untrue statement by the Company of a
material fact or omit to state a material fact required to be
stated therein by the Company in order to make the statements
contained herein or therein not misleading in light of the
circumstances under which they were made. Without limiting the
generality of the foregoing, the Company shall in no event be
deemed to have made to HP any representations or warranties with
respect to any projections, estimates or budgets of future
revenues, expenses or expenditures or future results of
operations which the Company may have supplied to HP in good
faith prior to the date hereof.
3. Representations and Warranties of HP
. HP represents and warrants to the Company that:
(a) Authority. The execution, delivery and performance by HP of
each Transaction Document and the consummation by HP of the
transactions contemplated thereby are within the power of HP and
have been duly authorized by all necessary actions on the part of
HP. Each Transaction Document executed, or to be executed, by
HP has been or will be, duly executed and delivered by HP and
constitutes, or will constitute, a legal, valid and binding
obligation of HP, enforceable against HP in accordance with its
terms, except as limited by bankruptcy, insolvency or other laws
of general application relating to or affecting the enforcement
of creditors' rights generally and general principles of equity.
(b) Securities Law Investment Representations.
(i) Restricted Securities. HP acknowledges that the Notes and
the Underlying Common Stock (collectively, the "Securities") have
not been and will not be registered under the Securities Act, or
the securities laws of any state of the United States or any
other jurisdiction, and except, with respect to the Underlying
Common Stock, as provided in the Shareholder Agreement to be
entered into in connection with the Closing, the form of which is
attached as Exhibit C hereto (the "Shareholder Agreement"), HP
has no right to require such registration.
(ii) Investment Intent. HP is purchasing the Securities for HP's
own account for investment and not for the interest of any other
person and not for resale to others or with a view to or for sale
in connection with any distribution thereof.
(iii) Experience; Access. HP has such knowledge and
experience in financial and business matters so as to be capable
of evaluating the merits and risks of its investment and to bear
the economic risk of such investment for an indefinite period of
time. HP believes it has received all the information it
considers necessary or appropriate for deciding whether to
purchase the Securities. HP further represents that it has had
an opportunity to ask questions and receive answers from the
Company regarding the terms and conditions of the offering of the
Securities and the business, properties, prospects and financial
condition of the Company.
(iv) Accredited Investor. HP is an "accredited investor" (as
that term is defined in Rule 501 of Regulation D promulgated
under the Securities Act).
(v) Resale Restrictions. HP will not resell or otherwise
dispose of the Securities or any interest therein at any time
unless it has complied with the Shareholder Agreement and (i)
such securities are subsequently registered under the Securities
Act and appropriate state securities laws, or (ii) an exemption
from registration is available and, if the Company requests, the
Company receives an opinion of counsel reasonably satisfactory to
it that such exemption is available, and the written approval of
the Company to any transfer has first been obtained.
(c) Legend. It is understood that the certificates evidencing
the Securities shall bear one or all of the following legends:
(i) "These securities have not been registered under the
Securities Act of 1933 as amended. They may not be sold, offered
for sale, pledged or hypothecated in the absence of a
registration statement in effect with respect to the securities
under the Securities Act or an opinion of counsel satisfactory to
the Company that such registration is not required or unless sold
pursuant to Rule 144 of the Securities Act."
(ii) Any legend required by the laws of the State of Oklahoma, or
any other applicable jurisdiction.
(iii) Any legend required by the Transaction Documents to
which HP is a party.
(d) No Brokers or Finders. HP has not incurred, will not incur,
directly or indirectly, as a result of any action taken or
permitted to be taken by HP, any liability for brokerage or
finders' fees or agents' commissions or similar charges in
connection with the execution and performance of the transactions
contemplated by this Agreement.
(e) Tax Advisors. With respect to the federal, state and local
tax consequences of this investment, HP is relying solely on HP's
own tax advisors and not on any statements or representations of
the Company or any of its agents and understands that HP shall be
responsible for HP's own tax liability that may arise as a result
of this investment or the transactions contemplated by this
Agreement.
4. California Commissioner of Corporations Legend.
THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS
AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS
UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM
QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED,
UNLESS THE SALE IS SO EXEMPT.
5. Conditions to Closing.
(a) Conditions of HP to Closing. HP's obligation hereunder to
advance the Purchase Price to the Company is subject to the
satisfaction, on or prior to the Closing Date, of all the
following conditions, any of which may be waived in whole or in
part by HP:
(i) Representations and Warranties; Covenants; Officer's
Certificate.
(1) The representations and warranties made by the Company
in Section 2 hereof shall be true and correct in all material
respects as of the Closing Date.
(2) The Company shall have performed all covenants set forth in
the Transaction Documents required to be performed prior to the
Closing.
(3) A duly authorized officer of the Company shall have
delivered to HP a certificate, dated the Closing Date, with
respect to the satisfaction of the conditions set forth herein.
(ii) Transaction Documents. The Company shall have duly executed
and delivered to HP the following Transaction Documents:
(1) This Agreement;
(2) The Initial Note;
(3) The Security Agreement in the form attached as Exhibit D
hereto (the "Security Agreement"); and
(4) The Shareholder Agreement.
(iii) Financing Statements. The Company shall have delivered
to HP the UCC-1 financing statements and other documents and
instruments which HP may reasonably request to perfect its
security interest in the Collateral (as defined in the Security
Agreement).
(iv) Corporate Documents. The Company shall have delivered to HP
each of the following:
(1) The Certificate of Incorporation, as amended, of the
Company, certified as of a recent date prior to the Closing Date
by the Secretary of the State of Oklahoma;
(2) A Certificate of Good Standing with respect to the Company,
certified as of a recent date prior to the Closing Date by the
Secretary of the State of Oklahoma;
(3) A certificate of the Secretary of the Company, dated the
Closing Date, certifying that: (A) the Certificate of
Incorporation, as amended, of the Company, delivered to HP
pursuant to Section 5(a)(iv)(1) hereof, is in full force and
effect and has not been amended, supplemented, revoked or
repealed since the date of such certification; (B) attached
thereto is a true and correct copy of the Bylaws, as amended, of
the Company as in effect on the Closing Date; (C) attached
thereto is a true and correct copy of resolutions duly adopted by
the Board of Directors of the Company approving this Agreement
and the other Transaction Documents and the consummation of the
transactions contemplated hereby and thereby; (D) there are no
proceedings for the dissolution or liquidation of the Company
that have commenced or, to the knowledge of the Company, been
threatened; and (E) the incumbency, signatures and authority of
the officers of the Company authorized to execute and deliver the
Transaction Documents on behalf of the Company and perform the
Company's obligations thereunder on behalf of the Company.
(b) Company Conditions to Closing. The Company's obligation
hereunder to accept the Purchase Price from HP is subject to
satisfaction, on or prior to the Closing Date, of all of the
following conditions, any of which may be waived in whole or part
by the Company:
(i) Representations and Warranties; Covenants; Officer's
Certificate.
(1) The representations and warranties made by HP in
Section 3 hereof shall be true and correct in all material respects as of
the Closing Date.
(2) HP shall have performed all covenants set forth in this
Agreement required to be performed prior to the Closing.
(3) A duly authorized officer of HP shall have delivered to the
company a certificate, dated the Closing Date, with respect to
the satisfaction of the conditions set forth in Section
4(b)(i)(1)-(2).
(ii) Note Transaction Documents. HP shall have duly executed and
delivered to the Company the following Transaction Documents:
(1) This Agreement;
(2) The Initial Note;
(3) The Security Agreement; and
(4) The Shareholder Agreement.
6. Additional Agreements.
(a) Non-Solicitation. HP agrees that it will not, for a period
of one year, directly or indirectly, solicit for employment any
employee of the Company who serves in an executive capacity or
who is identified by HP as a result of its evaluation of the
Company or otherwise in connection with the transactions
contemplated by this Agreement.
(b) Company Display of HP Trademarks and Logos. The Company
will prominently display HP trademarks and logos to be agreed
upon between the Company and HP and which may include the logo
"Powered by HP" in the user interface to the viaLink service in
connection with any HP products or services purchased by the
Company pursuant to Section 1(c) hereof.
(c) Hosting, Co-Marketing and Services Agreement. After the
date hereof the parties may, but are under no obligation to
negotiate and enter into an agreement to extend the relationship
between the parties, which may take the form of a Hosting, Co-
Marketing and Services Agreement providing, among other things,
that
(i) HP would serve as the host for the Company's viaLink service
and would charge the Company at a discounted rate for such host
services;
(ii) HP would jointly promote and market HP hardware and services
and the viaLink service to potential customers and industry
analysts and decision-makers; and
(iii) the Company would jointly advertise and market HP
hardware and services to be provided under any definitive
agreement, which promotion may include the prominent display of
HP trademarks and logos to be agreed upon between the Company and
HP and which may include the logo "Powered by HP" in the user
interface to the viaLink service.
(d) Publicity. Except for disclosures to be made by the Company
or HP pursuant to their respective reporting obligations under
the Securities Exchange Act of 1934 and any requirements imposed
on any exchange on which its securities may be listed, HP and the
Company will mutually agree on any public release of information
regarding this Agreement, the Transaction Documents or the
transactions contemplated hereby or thereby.
(e) Confidentiality. From and after the date hereof, each of HP
and the Company shall receive confidential information of the
other party. For purposes hereof, the party, disclosing
confidential information shall be designated "Discloser" and the
party receiving such information shall be designated "Recipient".
Except with Discloser's prior written approval, Recipient shall
keep all of Discloser's confidential information confidential and
shall use such information only for the furtherance of business
relationships between the parties. Recipient shall protect
Discloser's confidential information by using the same degree of
care, but no less than a reasonable degree of care, to prevent
the unauthorized use, dissemination, or publication of
Discloser's confidential information as Recipient uses to protect
its own confidential information of a like nature. Information
shall not be deemed confidential if it (i) is or becomes a matter
of public knowledge through no fault of Recipient; (ii) is
rightfully received by Recipient from a third party without a
duty of confidentiality; (iii) is disclosed under operation of
law; or (iv) is independently developed by Recipient. Recipient
agrees that Discloser is entitled, in addition to any other
remedies available to it either at law or in equity, to
injunctive relief restraining Recipient from violation of the
foregoing restrictions.
7. Miscellaneous.
(a) Waivers and Amendments. No provision of this Agreement may
be amended or modified without the written consent of the Company
and HP. No provision of this Agreement may be waived unless such
waiver is in writing and then only to the extent specifically set
forth in such writing. A waiver with reference to one event
shall not be construed as continuing or as a bar to or waiver of
any right or remedy as to a subsequent event.
(b) Governing Law. This Agreement and all actions arising out
of or in connection with this Agreement shall be governed by and
construed in accordance with the laws of the State of
California, without regard to the conflicts of law provisions of
the State of California or of any other state.
(c) Survival. The representations and warranties made herein
shall survive the execution and delivery of this Agreement for a
period of twelve months.
(d) Successors and Assigns. Subject to the restrictions on
transfer contained herein and in the Shareholder Agreement, the
rights and obligations of the Company and HP shall be binding
upon and benefit the successors, assigns, heirs, administrators,
and transferees of the parties.
(e) Assignment by HP and the Company. Neither the Notes nor any
of the rights, interests or obligations thereunder or hereunder
or under any other Transaction Document may be assigned, in whole
or in part, by either HP or the Company without the prior written
consent of the other, which consent shall not be unreasonably
withheld.
(f) Entire Agreement. This Agreement together with the other
Transaction Documents constitute the full and entire
understanding and agreement between the parties with regard to
the subjects hereof and thereof, and supersedes all prior
agreements, including that certain Memorandum of Understanding
dated December 21, 1998 between the parties with respect to such
matters.
(g) Notices. Any notice, request, or other communication
required or permitted hereunder shall be in writing and shall be
deemed to have been duly given on the date of delivery if
personally delivered, on the date of being faxed if sent by
confirmed fax, on the first business day after being sent if sent
by recognized overnight courier, and on the third business day
after being mailed if sent by registered or certified mail,
postage prepaid, addressed as follows:
if to Holder, to:
Hewlett-Packard Company
Financing & Complements Group
333 Logue Avenue
Mountain View, California 94043
Attention: General Manager
Fax: (650) 919-8013
with a copy to:
Hewlett-Packard Company
3000 Hanover Street
MS: 2OBQ
Palo Alto, California 94304
Attention: Legal Department
Fax: (650) 857-4392
if to the Company to:
The viaLink Company
13800 Benson Road, Suite 100
Edmond Oklahoma 73013-6417
Attention: Chief Executive Officer
Fax: (405) 936-2599
with a copy to:
Brobeck, Phleger & Harrison LLP
301 Congress Avenue, Suite 1200
Austin, Texas 78701
Attention: Matthew Lyons
Fax: (512) 477-5813
(h) Expenses. Each party shall bear and pay its own legal fees
in connection with the negotiation and execution of this
Agreement and the other Transaction Documents.
(i) Severability. If any provision of this Agreement shall be
judicially determined to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
(j) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of
which together shall be deemed to constitute one instrument.
[Signature page follows]
IN WITNESS WHEREOF, each of the parties has caused this
Note Purchase Agreement to be duly executed and delivered by its
duly authorized representative as of the date first written
above.
THE VIALINK COMPANY
By: /s/ Lewis B. Kilbourne
Name: Lewis B. Kilbourne
Title: Chief Executive Officer
HEWLETT-PACKARD COMPANY
By: /s/ Craig A. White
Name: Craig A. White
Title: VP & General Manager
EXHIBIT A
FORM OF SUBORDINATED SECURED PROMISSORY NOTE
[See Exhibit 10.2 to 8-K]
EXHIBIT B
FORM OF SUBORDINATED
SECURED CONVERTIBLE PROMISSORY NOTE
EXHIBIT C
FORM OF SHAREHOLDER AGREEMENT
[See Exhibit 4.1 to 8-K]
EXHIBIT D
FORM OF SECURITY AGREEMENT
[See Exhibit 10.3 to 8-K]
SCHEDULE 1
DISCLOSURE SCHEDULE TO NOTE PURCHASE AGREEMENT
BY AND BETWEEN
THE VIALINK COMPANY
AND
HEWLETT-PACKARD COMPANY
DATED: February 4, 1999
The schedules and information contained in this
Disclosure Schedule are being delivered by The viaLink Company
(the "Company") to Hewlett-Packard Company as the Disclosure
Schedule to the Note Purchase Agreement dated as of February __,
1999 (the "Agreement") between such parties and such Disclosure
Schedule modifies the representations and warranties contained in
the Agreement.
Schedule, section and subsection references and
headings are inserted for convenience of reference only. To the
extent that an item disclosed in one section or subsection of the
Disclosure Schedule and the applicability of such item to another
section or subsection of the Agreement is reasonably apparent by
reference to the Agreement and the Disclosure Schedule, such item
is hereby incorporated by reference in all other sections and
subsections of the Disclosure Schedule and modify all
representations and warranties contained in the Agreement,
although the Company has endeavored in good faith to provide
specific appropriate cross references.
Nothing contained herein is intended to broaden the
scope of any representation or warranty contained in the
Agreement or to create any covenant on the part of the Company.
Inclusion of an item herein (1) does not represent a
determination by the Company that such item (a) is material (nor
shall it be deemed to establish a standard of materiality) or
(b) did not arise in the ordinary course of business and
(2) shall not constitute, or be deemed to be, an admission to any
third party concerning such item by the Company.
Unless otherwise specified, all capitalized terms used
but not defined herein have the meaning ascribed to them in the
Agreement.
SCHEDULE 1 (CONTINUED)
Section 2(k): Patents and Other Intangible Assets. The
Company has registered the "viaLink" and "Chainlink" trademarks
with the US Patent and Trademark Office.
6
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THIS NOTE MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN
OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 UNDER THE
SECURITIES ACT.
SECURED SUBORDINATED PROMISSORY NOTE
February 4, 1999 $6,000,000 Mountain View,
California
FOR VALUE RECEIVED, The viaLink Company, an Oklahoma
corporation (the "Company"), promises to pay to Hewlett-Packard
Company, a Delaware corporation (the "Holder"), or its assign,
the principal sum of Six Million United States Dollars
(U.S.$6,000,000), or a lesser amount equal to the outstanding
principal amount, together with interest from the date of this
Note on the unpaid principal balance at a rate per annum equal to
eleven and one half percent (11.5%) computed on the basis of the
actual number of days elapsed and a year of 365 days. Subject to
the provisions of Section 3 below, all outstanding principal and
interest shall be due and payable on the Maturity Date (as
defined below). THIS NOTE IS SECURED AND IS ENTITLED TO THE
BENEFIT OF THE SECURITY AGREEMENT (AS DEFINED BELOW). The Note
has been issued pursuant to the terms of a Note Purchase
Agreement (as defined below).
The following is a statement of the rights of the
Holder and the conditions to which this Note is subject, and to
which the Holder agrees:
1. Definitions
. As used in this Note, the following capitalized
terms have the following meanings:
"Effective Date" shall mean February 5, 1999.
"Holder" shall mean the person specified in the
introductory paragraph together with its permitted successors and
assignees.
"Maturity Date" shall mean February 28, 2004.
"Note" shall mean this Secured Subordinated U.S.
$6,000,000 Promissory Note.
"Note Purchase Agreement" shall mean that Note Purchase
Agreement, dated as of this date, between the Company and the
Holder.
"Other Transaction Documents" shall mean the Note
Purchase Agreement, the Registration Rights Agreement, and the
Security Agreement.
"Registration Rights Agreement" shall mean the
Registration Agreement, dated as of this date, by the Company and
the Holder.
"Security Agreement" shall mean the Security Agreement,
dated as of this date by the Company and the Holder.
"Transaction Documents" shall mean the Note Purchase
Agreement, this Note, the Security Agreement, and the
Registration rights Agreement.
2. Payments: Prepayment; and Status of Obligations.
(a) Principal and Interest Payments. All principal, interest
and other amounts due shall be payable on the Maturity Date.
(b) Payments. The Company will make all cash payments due under
this Note in immediately available funds by 11:00 a.m. Palo Alto,
California time on the date such payment is due in a manner that
the Holder or other registered holder of this Note may from time
to time direct.
(c) Prepayment. Beginning on September 1, 2000, the Company may
prepay this Note, in whole or in part in increments of at least
$500,000 upon sixty (60) days prior written notice to the Holder.
Prepayments in part shall be applied first to outstanding
interest and second to principal.
(d) [Intentionally omitted.]
(e) Prepayment at the Option of the Holder. In the event that:
(i) The Company (A) sells all or substantially all of its assets
or intellectual property; or (B) is acquired by another entity or
entities in which fifty (50%) or more of the Company's voting
shares are no longer controlled after such acquisition by the
shareholders of record entitled to vote.
(ii) Lewis B. Kilbourne ceases for any reason to be either (i) a
regular, full-time employee of the Company, or (ii) a voting
member of the Board of Directors of the Company.
then the Company shall give the Holder written notice of such
event within two (2) business days and all amounts due and owing
under this Note shall become immediately due and payable upon
written notice of demand for prepayment given by the Holder to
the Company within ninety (90) days after the date of notice.
3. Events of Default
. The occurrence of any of the following shall
constitute an "Event of Default" under this Note as well as under
the Security Agreement:
(a) Failure to Pay. The Company fails to pay any principal,
interest or any fees when due under this Note or the Other
Transaction Documents, and such failure shall continue for a
period of five (5) business days after written notice to the
Company by the Holder; or
(b) Covenant Default. The Company shall default in the
performance of any of its material obligations hereunder or under
any of the Other Transactions Documents and such default shall
continue unremedied for a period of fifteen (15) business days
after written notice to the Company by the Holder; or
(c) Representations and Warranties. Any representation,
warranty or certification made herein or in the Other Transaction
Documents shall prove to have been false or misleading in any
material respect; or
(d) Voluntary Bankruptcy or Insolvency Proceedings. The Company
shall (i) apply for or consent to the appointment of a receiver,
trustee, liquidator or custodian of itself or of a substantial
part of its property, (ii) be unable, or admit in writing its
inability, to pay its debts generally as they mature, (iii) make
a general assignment for the benefit of its or any of its
creditors, (iv) be dissolved or liquidated in full or in part,
(v) commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or consent to any relief
or to the appointment of or taking possession of its property by
any official in an involuntary case or other proceeding commenced
against it, or (vi) take any action for the purpose of effecting
any of the foregoing; or
(e) Involuntary Bankruptcy or Insolvency Proceedings.
Proceedings for the appointment of a receiver, trustee,
liquidator or custodian of the Company or of all or a substantial
part of its property, or an involuntary case or other proceedings
seeking liquidation, reorganization or other relief with respect
to the Company or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced
and an order for relief entered or such proceeding shall not be
dismissed or discharged within sixty (60) days of commencement;
or
(f) Cross-Default. The Company shall default under any other
material agreement, note, indenture, instrument or other contract
pursuant to which the Company has borrowed money and such default
shall result in the holder having accelerated the maturity of the
outstanding indebtedness under such other agreements, or the
Company shall default under any material equipment lease
agreement, which shall result in the lessor having terminated the
lease arrangement.
4. Notice to Holder; Rights of Holder upon Default.
(a) The Company shall notify the Holder within one (1) business
day of the occurrence of any Event of Default.
(b) Upon the occurrence and during the continuance of any Event
of Default under Sections 3(a), (b), (c) or (f) above, the
Holder, by written notice to the Company, may declare all
principal and accrued and unpaid interest outstanding to be
immediately due and payable without presentment, demand, protest
or any other of any kind, all of which are waived by Company.
Upon the occurrence and during the continuance of any Event of
Default described in Sections 3(d) or (e), immediately and
without notice, all outstanding amounts payable by the Company
shall automatically become immediately due and payable, without
presentment, demand, protest or any other notice of any kind, all
of which are waived by Company.
5. [This Section Intentionally Deleted.]
6. [This Section Intentionally Deleted.]
7. Subordination.
(a) The liens and security interest in the Company's assets that
secure payment and performance of the Company's obligations to
the Holder as of the Effective Date will be junior and
subordinate to the liens and security interests of all Senior
Creditors (as defined below) which are perfected as of the
Effective Date or hereafter in the Company's assets,
notwithstanding any other priority under applicable law.
(b) As used herein, "Senior Creditors" shall mean all banks,
commercial finance lenders, insurance companies and other
financial institutions regularly engaged in the business of
lending money; any equipment lessors or financiers; and the
successors and assigns of the foregoing, including without
limitation.
8. Negative Covenants
. For so long as any amounts are outstanding under
this Note the Company shall not:
(i) Create or incur any debt in excess of (i) 80% of the
Company's then outstanding accounts receivable plus (ii) amounts
used by the Company to finance the purchase of any equipment
acquired by the Company (including without limitation through
capitalized leases); and shall not create or incur any security
interest or lien on any asset now owned or acquired except
Permitted Liens (as defined in the Security Agreement);
(ii) Without prior notice to Holder, consolidate or merge with
any other entity or person, provided that such consolidation or
merger could not reasonably be expected to have a material
adverse effect upon Holder's rights under this Note;
(iii) Without the prior consent of Holder, acquire all or
substantially all of the capital stock or assets of, or make any
investment in or loan to, any other entity or person for an
aggregate amount in excess of 15% of the Company's assets at the
end of the quarter immediately prior to such consolidation,
merger, acquisition, investment or loan (excluding from such
calculation expense advances to employees in the ordinary course
of business); or
(iv) Declare or pay any dividends on any class or classes of
stock (other than stock dividends to effectuate a "stock split").
9. Successors and Assigns
. The rights and obligations of the Company and the
Holder shall be binding upon and benefit the successors, assigns,
heirs, administrators and transferees of the parties. Neither the
Company nor the Holder shall be entitled to assign, transfer or
delegate any of its rights, obligations or liabilities hereunder
without the prior written consent of the other party.
10. Notices
. Any notice, request, or other communication required
or permitted hereunder shall be in writing and shall be deemed to
have been duly given on the date of delivery if personally
delivered, on the date of being faxed if sent by confirmed fax,
on the first business day after being sent if sent by recognized
overnight courier, and on the third business day after being
mailed if sent by registered or certified mail, postage prepaid,
addressed (i) if to the Holder to: Hewlett-Packard Company, 333
Logue Avenue, MS32, Mountain View, CA 94043, Attention: General
Manager, fax number, (650)919-8013; with a copy to Hewlett-
Packard Company, 3000 Hanover Street, MS20BQ, Palo Alto, CA
94304, Attention General Counsel, fax number (650)857-4392; or
(ii) if to the Company to: The viaLink Company, 13800 Benson
Road, Suite 100, Edmond, OK 73013-6417, Fax (405)236-2599; with
a copy to Brobeck, Phleger & Harrison LLP, 301 Congress Avenue,
Suite 1200, Austin, TX 78701, Attention: Matthew Lyons, Fax:
(512) 477-5813.
11. Wire Transfers
. Payments made under this Note shall be made by wire
transfer to Holder to an account specified by Holder in advance.
12. Usury
. In the event any interest is paid on this Note which
is deemed to be in excess of the then legal maximum rate, then
that portion of the interest payment representing an amount in
excess of the then legal maximum rate shall be deemed a payment
of principal and applied against the principal of this Note.
13. Governing Law
. This Note and all actions arising out of or in
connection with this Note shall be governed by and construed in
accordance with the laws of the State of California, with regard
to the conflicts of law provisions of the State of California or
of any other state.
14. Waivers
. The Company hereby waives presentment, demand,
protest, notice of dishonor, diligence and all other notices, any
release or discharge arising from any extension of time,
discharge of a prior party, release of any or all of any security
given from time to time for this Note, or other cause of release
or discharge other than actual payment in full hereof.
15. Waivers and Amendments
. No provision of this Note may be amended or modified
without the written consent of the Company and the Holder. The
Holder shall not be deemed, by any act or omission, to have
waived any of its rights or remedies unless it is in writing and
signed by the Holder and then only to the extent specifically set
forth in such writing. A waiver with reference to one event shall
not be construed as continuing or as a bar to or waiver of any
right or remedy as to a subsequent event. No delay or omission of
the Holder to exercise any right, whether before or after a
default, shall impair any such right or shall be construed to be
a waiver of any right or default, and the acceptance at any time
by Holder of any past-due amount shall not be deemed to be a
waiver of the right to require prompt payment of any other
amounts due and payable.
16. Remedies Cumulative
. The remedies of the Holder as provided herein, or
any one or more of the, or in law or equity, shall be cumulative
and concurrent, and may be pursued singularly, successively or
together in the Holder's sole discretion, and may be exercised as
often as occasion therefor shall occur.
17. Attorney's Fees
. It is expressly agreed that, if this Note is
referred to an attorney or if suit is brought to collect this
Note or any part hereof or to enforce or protect any rights
conferred upon the Holder by this Note or any other document
evidencing or securing this Note (including without limitation
the Security Agreement), then the Company promises and agrees to
pay all costs, including without limitation reasonable attorney's
fees, incurred by the Holder.
[Signature page follows]
ACCEPTED AND AGREED as of February 4, 1999:
THE VIALINK COMPANY
By: /s/ Lewis B. Kilbourne
Name: Lewis B. Kilbourne
Title: C.E.O.
HEWLETT-PACKARD COMPANY
By: /s/ Craig A. White
Name: Craig A. White
Title: VP & General Manager
6
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is dated as of February 4,
1999, and is entered into by and between The viaLink Company, an
Oklahoma corporation ("Debtor"), in favor of Hewlett-Packard
Company, a Delaware corporation ("Secured Party").
INTRODUCTION:
A. Debtor and Secured Party have entered into, inter alia, a
Note Purchase Agreement, dated as of the date hereof (the "Note
Purchase Agreement"), and, pursuant thereto, Debtor has issued in
favor of Secured Party a Secured Subordinated Promissory Note,
dated the date hereof, in the principal amount of US$6,000,000
(the "Initial Note"), which note may be exchanged, subject to and
in accordance with the terms of the Note Purchase Agreement, for
a Convertible Secured Subordinated Note of like principal amount
convertible into shares of the Company's Common Stock (the
"Convertible Note"); and
B. In order to induce Secured Party to enter into the Note
Purchase Agreement and, pursuant thereto, to extend the credit
evidenced by the Notes, Debtor has agreed to enter into this
Security Agreement and to grant the security interest in the
Collateral described below.
AGREEMENT:
NOW, THEREFORE, in consideration of the promises
contained herein and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Debtor
hereby agrees with Secured Party as follows:
1. Definitions and Interpretation
. When used in this Security Agreement, the following
terms shall have the following respective meanings:
"Collateral" shall have the meaning given to that term
in Section 2 hereof.
"Copyright Office" shall mean the United States
Copyright Office or any successor office or agency thereto.
"Copyrights" shall have the meaning given to that term
in Attachment 1 hereto.
"Event of Default" shall have the meaning given to that
term in the Note.
"Intellectual Property Collateral" shall mean the
Copyrights, Patents, and Trademarks.
"Note" shall mean with the Initial Note or the
Convertible Note, whichever is then in effect; and "Notes" shall
mean the Initial Note and the Convertible Note, collectively.
"Note Purchase Agreement" shall have the meaning given
to that term in the Recitals to this Security Agreement.
"Obligations" shall mean and include all loans,
advances, debts, liabilities and obligations, howsoever arising,
owed by Debtor to Secured Party of every kind and description
(whether or not evidenced by any note or instrument and whether
or not for the payment of money), now existing or hereafter
arising under or pursuant to the Transaction Documents,
including, all interest, fees, charges, expenses, attorneys' fees
and costs chargeable to and payable by Debtor hereunder and
thereunder, in each case, whether direct or indirect, absolute or
contingent, due or to become due, and whether or not arising
after the commencement of a proceeding under Title 11 of the
United States Code (11 U.S.C., Section 101 et seq.), as amended
from time to time (including post-petition interest) and whether
or not allowed or allowable as a claim in any such proceeding.
"Patent and Trademark Office" shall mean the United
States Patent and Trademark Office or any successor office or
agency thereto.
"Patent Applications" means and refers to all
applications made by, or on behalf of, Debtor to the Patent and
Trademark Office or to any similar office or agency of any
foreign country or political subdivision thereof for the
registration of Patents.
"Patent Registrations" means and refers to all Patents
registered with the Patent and Trademark Office or with any
similar office or agency of any foreign country or political
subdivision thereof for the registration of Patents.
"Patents" shall have meaning given to that term in
Attachment 1 hereto.
"Permitted Liens" means the following:
(i) any liens for taxes, fees, assessments, or other
governmental charges or levies, either not delinquent or being
contested in good faith by appropriate proceedings;
(ii) liens (A) upon or in any equipment acquired or held by
Debtor to secure the purchase price of such equipment or
indebtedness incurred solely or the purpose of financing the
acquisition of such equipment, or (B) existing on such equipment
at the time of its acquisition, provided that the lien is
confined solely to the property so acquired and improvements
thereon, accessions thereto and the proceeds thereof;
(iii) liens on equipment leased by Debtor pursuant to a
capital lease in the ordinary course of business (including
proceeds thereof and accessions thereto) incurred solely for the
purpose of financing the lease of such equipment;
(iv) liens in favor of customs and revenue authorities arising as
a matter of law to secure payments of customs duties in
connections with the importation of goods;
(v) workman's, mechanics or similar liens arising in the
ordinary course of Debtor's business; and
(vi) liens granted to secure any Senior Indebtedness (as defined
in the Note).
(vii) liens existing as of the date hereof disclosed in
writing to, and approved by, Secured Party.
"Shareholder Agreement" shall mean the Shareholder
Agreement, dated as of the date hereof, by and between Debtor and
Secured Party.
"Secured Party" shall have the meaning given to that
term in the introductory paragraph of this Security Agreement.
"Software" shall have the meaning given to that term in
Attachment 2 hereto.
"Trademarks" shall have the meaning given to that term
in Attachment 1 hereto.
"Transaction Documents" shall mean the Note Purchase
Agreement, the Notes, the Security Agreement, and the Shareholder
Agreement.
"UCC" shall mean the Uniform Commercial Code as in
effect in the State of California, as amended from time to time.
Unless otherwise defined herein, all terms defined in the UCC
shall have the respective meanings given to those terms in the
UCC.
2. Grant of Security Interest
. To secure payment and performance of the
Obligations, Debtor hereby pledges and assigns to Secured Party
and grants to Secured Party a security interest in all right,
title, and interests of Debtor in and to the property described
in Attachment 1 hereto (collectively and severally, the
"Collateral"), which Attachment 1 is incorporated herein by this
reference.
3. Representations and Warranties
. Debtor represents and warrants to Secured Party
that:
(a) Debtor is the owner of or has a valid interest in the
Collateral (or, in the case of after-acquired Collateral, at the
time Debtor acquires rights in the Collateral, will be the owner
thereof) and that no other person has (or, in the case of after-
acquired Collateral, at the time Debtor acquires rights therein,
will have) any right, title claim or interest (by way of Lien or
otherwise) in, against or to the Collateral other than Permitted
Liens;
(b) Secured Party has (or in the case of after-acquired
Collateral, at the time Debtor acquires rights therein, will
have) a perfected security interest in the Collateral, provided
that the Secured Party performs all acts necessary to perfect
such security interest;
(c) Debtor does not own any Patents, Trademarks, Copyrights
related to the Software defined in Attachment 2 registered in, or
the subject of pending applications in, the Patent and Trademark
Office or the Copyright Office or any similar offices or agencies
in any other country or any political subdivision thereof, other
than those described in Attachment 2 hereto;
(d) As of the date hereof, the Debtor's principal place of
business and chief executive office is located at: 13800 Benson
Road, Suite 100, Edmond, OK 73013-6417.
4. Covenants Relating to Collateral
. Debtor hereby agrees:
to perform all acts that may be reasonably necessary to
maintain, preserve, protect and perfect the Collateral, the Lien
granted to Secured Party therein and the junior priority of such
Lien, other than Permitted Liens;
(i) not to change Debtor's name or place of business or chief
executive office or the location of any of its other Collateral
without giving Secured Party thirty (30) days prior written
notice;
(ii) to appear in and defend any action or proceeding which may
affect its title to or Secured Party's interest in the Collateral
other than with respect to Permitted Liens;
(iii) to comply with all material requirements of law
relating to the production, possession, operation, maintenance
and control of the Collateral, except to the extent that the
failure to do so could not reasonably be expected to have a
material adverse effect upon the financial or business condition
of Debtor;
(iv) perform all acts and execute all documents, including
notices of security interest for each relevant type of
intellectual property in forms suitable for filing with the
Patent and Trademark Office or the Copyright Office, as
applicable, substantially in the form of Attachment 3
(appropriately revised) annexed hereto, that may be reasonably
necessary to record, maintain, preserve, protect and perfect
Secured Party's interest in the Collateral, the Lien granted to
Secured Party in the Collateral, to the extent required by
Secured Party;
(v) Debtor shall at all times keep at least one complete set of
records concerning Collateral at its chief executive office and
shall make such records available for inspection by Secured Party
at such times as Secured Party may reasonably request. Debtor
shall not be authorized to sell, transfer, grant nonexclusive
licenses of or otherwise dispose of any item of Collateral other
than in the ordinary course of business; and
(vi) If requested by Secured Party, Debtor shall deposit into an
escrow account current and future version of the Software listed
in Attachment 2.
5. Notice of Patent, Trademark, or Copyrights
Debtor will promptly notify Secured Party upon the
filing by Debtor by (i) an application for the registration of
any Patent, Trademark, or Copyright with the Patent and Trademark
Office or the Copyright Office or any similar agency in any other
country or any political subdivision thereof; or (ii) any
assignment of any Patent, Trademark or Copyright, which Debtor
may acquire from a third party, filed with the Patent and
Trademark Office or the Copyright Office or any similar agency in
any other country or any political subdivision thereof.
6. Default and Remedies.
(A) Debtor shall be deemed in "Default" under this Security
Agreement upon the occurrence of an Event of Default as defined
in the Note which is not cured within the cure period set forth
in the Note. Upon the recurrence of any Default, Secured Party
shall have the rights of a secured creditor under the UCC and
applicable federal law. Without limiting the generality of the
foregoing, Secured Party may sell, resell, lease, use, assign,
license, sublicense, transfer or otherwise dispose of any or all
of the Collateral in its then condition or following any
commercially reasonable preparation or processing at public or
private sale, by one or more contracts, in one or more parcels,
at the same or different times, or for cash or credit, all as
Secured Party deems reasonably advisable; provided, however, that
Debtor shall be credited with the net proceeds of sale only when
such proceeds are collected by Secured Party. Secured Party
shall have the right upon any such public sale, and, to the
extent permitted by law, upon any such private sale, to purchase
the whole or any part of the Collateral so sold. Debtor hereby
agrees that the sending of notice by ordinary mail, postage
prepaid, to the address of Debtor set forth herein, of the place
and time of any public sale or of the time after which any
private sale or other intended disposition is to be made, shall
be deemed reasonable notice thereof if such notice is sent ten
days prior to the date of such sale or other disposition or the
date on or after which such sale or other disposition may occur.
(b) License. For the purpose of enabling Secured Party to
exercise its rights and remedies under this Section 6 or
otherwise in connection with this Agreement, Debtor hereby grants
to Secured Party an irrevocable, non-exclusive and assignable
license (exercisable without payment or royalty or other
compensation to Debtor) to use, license or sublicense any
intellectual property Collateral. In the event of any public or
private sale of any kind, the Secured Party shall have a right of
refusal (on terms mutually agreeable to the parties at the time)
to purchase the intellectual property Collateral from the Debtor.
7. Miscellaneous.
(a) Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications
to or upon Debtor or Secured Party under this Security Agreement
shall be provided in accordance with the terms of the Note
Purchase Agreement.
(b) Nonwaiver. No failure or delay on Secured Party's part in
exercising any right hereunder shall operate as a waiver thereof
or of any other right nor shall any single or partial exercise of
any such right preclude any other further exercise thereof or of
any other right.
(c) Amendments and Waivers. This Security Agreement may not be
amended or modified, nor may any of its terms be waived, except
by written instruments signed by Debtor and Secured Party. Each
waiver or consent under any provision hereof shall be effective
only in the specific instances for the purposes for which given.
(d) Expenses.
(i) Debtor shall pay on demand all fees and expenses, including
reasonable attorneys' fees and expenses, incurred by Secured
Party in connection with custody, preservation or sale of, or
other realization on, any of the Collateral or the enforcement or
attempt to enforce any of the Obligations which are not performed
as and when required by this Security Agreement.
(ii) Secured Party shall pay on demand all fees and expenses,
including reasonable attorneys' fees and expenses, incurred by
Debtor in connection with the enforcement or attempt to enforce
any of the obligations of Secured Party under this Security
Agreement which is not performed as and when required by this
Security Agreement.
(e) Governing Law. This Security Agreement shall be governed by
and construed in accordance with the laws of the State of
California without reference to conflicts of law rules (except to
the extent governed by the UCC).
(f) Termination. This Security Agreement shall terminate and be
of no further force and effect upon payment in full by Debtor of
all principal, interest, and other amounts owed under the Note,
or upon the conversion of the Notes in accordance with the terms
thereof so that no principal, interest, or other amounts are owed
under the Note.
[Signature Page Follows]
IN WITNESS WHEREOF, each party hereto has caused this
Security Agreement to be executed by its duly authorized officer
as of the date first above written.
THE VIALINK COMPANY
By:/s/ Lewis B. Kilbourne
Name:Lewis B. Kilbourne
Title: CEO
HEWLETT-PACKARD COMPANY
By:/s/ Craig A. White
Name:Craig A. White
Title: VP & General Manager
ATTACHMENT 1
TO SECURITY AGREEMENT
All right, title and interest of Debtor now owned or
hereafter acquired in and to the following:
a) All patentable inventions, patent rights, shop rights,
letters of patent of the United States or any other country, all
right, title and interest therein and thereto, and all
registrations and recordings thereof, including all patent
registrations and recordings in the Patent and Trademark Office
or in any similar office or agency of the United States, any
state thereof or any foreign country or political subdivision
thereof, relating to the Software defined in Attachment 2 whether
now owned or hereafter acquired by Debtor, (collectively, the
"Patents");
b) The copyrights including all original works of authorship
fixed in any tangible medium of expression, all right, title, and
interest therein and thereto, and all registrations and
recordings thereof, including all applications, registrations and
recordings in the Copyright Office or in any similar office or
agency of the United States, any state thereof, or any foreign
country or political subdivision thereof, relating to the
Software defined in Attachment 2 whether now owned or hereafter
acquired by Debtor; (collectively, the "Copyrights").
c) All trademarks, trade names, trade styles and service marks,
and all prints and labels on which said trademarks, trade names,
trade styles and service marks have appeared or appear, and all
designs and general intangibles of like nature, now existing or
hereafter adopted or acquired, all right, title, and interest
therein and thereto, all registrations and recordings thereof,
including all applications, registrations, and recordings in the
Patent and Trademark Office or in any similar office or agency of
the United States, any state thereof or any foreign country or
political subdivision thereof, relating to the Software defined
in Attachment 2, whether now owned or hereafter acquired by
Debtor, (collectively, the "Trademarks").
ATTACHMENT 2
TO SECURITY AGREEMENT
SOFTWARE:
The software consists of the viaLink Services which are
a set of Internet-based software applications that provide
management of information flow between retailers, manufacturers
and suppliers of consumer packaged goods, and includes the Item
Catalog, ItemXpress, and Exchange Manager.
TRADEMARKS (including Trademark Applications)
TRADEMARK JURISDICTION REGISTRATION REGISTRATION
DATE NUMBER
viaLink US Patent & September 9, 2,094,145
Trademark 1997
Office
Chainlink US Patent & July 2, 1996 1,984,648
Trademark
Office
