<PAGE> 1
Filed Pursuant to
Rule 424(b)(3) and (c)
Commission File No. 333-83315
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED AUGUST 5, 1999)
THE VIALINK COMPANY
1,440,000 SHARES OF
COMMON STOCK
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THE DATE OF THIS PROSPECTUS SUPPLEMENT IS JUNE 5, 2000
<PAGE> 2
This prospectus supplement supplements the prospectus dated August 5, 1999
of The viaLink Company relating to the public offering, which is not being
underwritten, and sale by several stockholders of viaLink, or by pledgees,
donees, transferees or other successors in interest to these selling
stockholders, of up to 1,440,000 shares of our common stock. These selling
stockholders received these shares upon the exercise of options to purchase
shares of our common stock. This supplement should be read in conjunction with
the prospectus, and is qualified by reference to the prospectus except to the
extent that information contained in this supplement supersedes the information
contained in the prospectus.
The viaLink Company's prospectus dated August 5, 1999 is hereby
supplemented by including viaLink's Current Report on Form 8-K dated May 31,
2000, as filed with the Securities and Exchange Commission on June 5, 2000. A
copy of the Form 8-K is attached to this prospectus supplement.
2
<PAGE> 3
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 31, 2000
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THE VIALINK COMPANY
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State of Other Jurisdiction of Incorporation)
000-21729 73-1247666
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(Commission File Number) (IRS Employer
Identification No.)
13800 Benson Road, Suite 100, Edmond, Oklahoma 73013
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(Address of Principal Executive Offices) (Zip Code)
(405) 936-2500
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 4
ITEM 5. OTHER EVENTS.
On May 31, 2000, we entered into a Securities Purchase Agreement pursuant
to which RGC International Investors, LDC paid us an aggregate of $10.0 million
in consideration for (1) 960,315 shares of our common stock and (2) a warrant to
purchase 768,492 shares of our common stock at initial exercise price of $12.06
per share. The exercise price may be subject to certain adjustments beginning
one year from issuance, based on the market price of our common stock. The
warrants can be exercised at any time on or before March 24, 2003.
In connection with the Securities Purchase Agreement, we also granted RGC
certain automatic and piggyback registration rights pursuant to a Registration
Rights Agreement. Pursuant to the Registration Rights Agreement, we are required
to file a registration statement to register the shares of common stock
purchased by RGC and the shares issuable upon exercise of the warrants issued to
them within 30 days of the closing of the transaction.
Upon closing of the transaction with RGC, we issued to AGE Investments,
Inc., a warrant to purchase 45,608 shares of our common stock at an exercise
price of $13.15, as compensation for services rendered to us by A.G. Edwards &
Sons, Inc. as our financial advisor in connection with that transaction. In
addition, we amended our Registration Rights Agreement with AGE dated March 24,
2000 to provide certain piggyback registration rights with respect to the shares
of common stock issuable upon exercise of these warrants.
The foregoing description does not purport to be complete and is qualified
in its entirety by reference to the Securities Purchase Agreement, the Stock
Purchase Warrant issued to RGC, the Registration Rights Agreement with RGC, the
Common Stock Purchase Warrant issued to AGE and Amendment No. 1 to the
Registration Rights Agreement with AGE, copies of which are attached hereto as
Exhibits 4.1, 4.2, 4.3. 4.4, and 4.5, respectively, and are incorporated herein
by reference. The Registration Rights Agreement with AGE is incorporated herein
by reference to our Quarterly Report on Form 10-QSB for the fiscal quarter
ending March 31, 2000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
4.1 Securities Purchase Agreement dated as of May 31, 2000, by
and between The viaLink Company and RGC International
Investors, LDC.
4.2 Stock Purchase Warrant dated May 31, 2000 by The viaLink
Company in favor of RGC International Investors, LDC.
4.3 Registration Rights Agreement dated as of May 31, 2000 by
and between The viaLink Company and RGC International
Investors, LDC.
4.4 Common Stock Purchase Warrant dated May 31, 2000 by The
viaLink Company in favor of Age Investments, Inc.
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4.5 Amendment No. 1 to Registration Rights Agreement dated as
of May 31, 2000 by and between The viaLink Company and AGE
Investments, Inc.
4.6(1) Registration Rights Agreement dated March 24, 2000 by and
between The viaLink Company and AGE Investments, Inc.
99.1 Press release announcing completion of private placement
with RGC International Investors, LDC.
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(1) Incorporated herein by reference to our Quarterly Report on Form 10-QSB
for the fiscal quarter ending March 31, 2000.
SIGNATURE
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: June 5, 2000 By: /s/ J. ANDREW KERNER
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J. Andrew Kerner
Chief Financial Officer
2
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EXHIBIT INDEX
<TABLE>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
<S> <C>
4.1 Securities Purchase Agreement dated as of May 31, 2000, by
and between The viaLink Company and RGC International
Investors, LDC.
4.2 Stock Purchase Warrant dated May 31, 2000 by The viaLink
Company in favor of RGC International Investors, LDC.
4.3 Registration Rights Agreement dated as of May 31, 2000 by
and between The viaLink Company and RGC International
Investors, LDC.
4.4 Common Stock Purchase Warrant dated May 31, 2000 by The
viaLink Company in favor of Age Investments, Inc.
4.5 Amendment No. 1 to Registration Rights Agreement dated as
of May 31, 2000 by and between The viaLink Company and AGE
Investments, Inc.
4.6(1) Registration Rights Agreement dated March 24, 2000 by and
between The viaLink Company and AGE Investments, Inc.
99.1 Press release announcing completion of private placement
with RGC International Investors, LDC.
</TABLE>
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(1) Incorporated herein by reference to our Quarterly Report on Form 10-QSB
for the fiscal quarter ending March 31, 2000.
<PAGE> 7
EXHIBIT 4.1
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of May 31,
2000, by and among The viaLink Company, a Delaware corporation, with its
principal executive office located at 13800 Benson Road, Edmond, Oklahoma
73013-6417 ("COMPANY"), and each of the purchasers set forth on the signature
pages hereto (the "BUYERS").
WHEREAS:
a. The Company and the Buyers are executing and
delivering this Agreement in reliance upon the exemption from securities
registration afforded by Rule 506 under Regulation D ("REGULATION D") as
promulgated by the United States Securities and Exchange Commission (the "SEC")
under the Securities Act of 1933, as amended (the "1933 ACT");
b. The Company has authorized the issuance to the
Buyers of 960,615 units (the "UNITS"), each Unit consisting of (i) one share of
the Company's common stock, par value $.001 per share (the "COMMON STOCK"), and
(ii) a detachable warrant in the form attached hereto as EXHIBIT "A" (each a
"WARRANT" and, collectively, the "WARRANTS") to purchase 0.8 shares of Common
Stock (subject to adjustment as provided in the Warrants), for a per Unit
purchase price of $10.41 (the "UNIT PRICE"). The shares of Common Stock which
are included in the Units, together with any shares of Common Stock issued in
replacement thereof or as a dividend thereon or otherwise with respect thereto
are hereinafter referred to as the "COMMON SHARES." The shares of Common Stock
issuable upon exercise of or otherwise pursuant to the Warrants are hereinafter
collectively referred to as the "WARRANT SHARES." The Common Shares, the
Warrants and the Warrant Shares are sometimes hereinafter collectively referred
to as the "SECURITIES."
c. The Buyers desire to purchase and the Company
desires to issue and sell, upon the terms and conditions set forth in this
Agreement, an aggregate of 960,615 Units for an aggregate purchase price of Ten
Million Dollars ($10,000,000).
d. Each Buyer wishes to purchase, upon the terms and
conditions stated in this Agreement, the number of Units as is set forth
immediately below its name on the signature pages hereto; and
e. Contemporaneous with the execution and delivery of
this Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement, in the form attached hereto as EXHIBIT "B" (the "REGISTRATION
RIGHTS AGREEMENT"), pursuant to
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which the Company has agreed to provide certain registration rights under the
1933 Act and the rules and regulations promulgated thereunder, and applicable
state securities laws.
NOW, THEREFORE, the Company and each of the Buyers severally (and not
jointly) hereby agree as follows:
1. PURCHASE AND SALE OF UNITS.
(a) PURCHASE OF UNITS. The Company shall issue and
sell to each Buyer and each Buyer severally agrees to purchase from the Company
such number of Units as is set forth immediately below such Buyer's name on the
signature pages hereto. The aggregate number of Units to be issued at the
Closing is 960,615 for an aggregate purchase price of Ten Million Dollars
($10,000,000).
(b) FORM OF PAYMENT. On the Closing Date (as defined
below), (i) each Buyer shall pay the purchase price for the Units to be issued
and sold to it at the Closing (the "PURCHASE PRICE") by wire transfer of
immediately available funds to the Company, in accordance with the Company's
written wiring instructions, against delivery (by facsimile to be followed by
overnight delivery to the Buyer's counsel) of duly executed certificates and
Warrants representing such number of Units which such Buyer is purchasing and
(ii) the Company shall deliver (by facsimile to be followed by overnight
delivery to the Buyer's counsel) such certificates and Warrants representing
such Units duly executed on behalf of the Company, to such Buyer, against
delivery of such Purchase Price.
(c) CLOSING DATE. Subject to the satisfaction (or
waiver) of the conditions thereto set forth in Section 6 and Section 7 below,
the date and time of the issuance and sale of the Units pursuant to this
Agreement (the "CLOSING DATE") shall be 12:00 noon, New York City time, on May
31, 2000 or such other mutually agreed upon time. The Closing shall occur on the
Closing Date at the offices of Ballard Spahr Andrews & Ingersoll, LLP, 1735
Market Street, Philadelphia, Pennsylvania 19103 or at such other location as may
be agreed to by the parties.
2. BUYERS' REPRESENTATIONS AND WARRANTIES. Each Buyer
severally (and not jointly) represents and warrants to the Company solely as to
such Buyer that:
(a) INVESTMENT PURPOSE. The Buyer is purchasing the
Securities for its own account and not with a present view towards the public
sale or distribution thereof except pursuant to sales registered or exempted
from registration under the 1933 Act; provided, however, that by making the
representations herein, the Buyer does not agree to hold any of the Securities
for any minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act. As of the date hereof, the Buyer
does not have any contract, undertaking, agreement or arrangement with any
person to sell or transfer to such person or to any third person any of the
Securities.
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(b) INVESTMENT EXPERIENCE. Such Buyer is an investor
in securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment, and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Common
Shares.
(c) ACCREDITED INVESTOR STATUS. The Buyer is an
"accredited investor" as that term is defined in Rule 501(a) of Regulation D (an
"ACCREDITED INVESTOR").
(d) RELIANCE ON EXEMPTIONS. The Buyer understands
that the Securities are being offered and sold to it in reliance upon specific
exemptions from the registration requirements of United States federal and state
securities laws and that the Company is relying upon the truth and accuracy of,
and the Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Securities.
(e) INFORMATION. The Buyer and its advisors, if any,
have been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Securities which the Buyer deems relevant to its decision to purchase the
Securities and have been reasonably requested by the Buyer or its advisors. The
Buyer and its advisors, if any, have been afforded the opportunity to ask
questions of the Company. Neither such inquiries nor any other due diligence
investigation conducted by Buyer or any of its advisors or representatives shall
modify, amend or affect Buyer's right to rely on the Company's representations
and warranties contained in Section 3 below.
(f) GOVERNMENTAL REVIEW. The Buyer understands that
no United States federal or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement of the
Securities.
(g) TRANSFER OR RESALE. The Buyer understands that
(i) except as provided in the Registration Rights Agreement, the sale or re-sale
of the Securities has not been and is not being registered under the 1933 Act or
any applicable state securities laws, and the Securities may not be transferred
unless (a) the Securities are sold pursuant to an effective registration
statement under the 1933 Act, (b) the Buyer shall have delivered to the Company
an opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions and reasonably
satisfactory to the Company's counsel) to the effect that the Securities to be
sold or transferred may be sold or transferred pursuant to an exemption from
such registration, (c) the Securities are sold or transferred to an "affiliate"
(as defined in Rule 144 promulgated under the 1933 Act (or a successor rule)
("RULE 144")) of the Buyer who agrees to sell or otherwise transfer the
Securities only in accordance with this Section 2(g) and who is an Accredited
Investor or (d) the Securities are sold pursuant to Rule 144; (ii) any sale of
such Securities made in reliance on Rule 144 may be made only in accordance with
the terms of said Rule and further, if said Rule is not applicable, any re-sale
of such Securities under
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circumstances in which the seller (or the person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the 1933 Act) may
require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register such Securities under the 1933 Act or
any state securities laws or to comply with the terms and conditions of any
exemption thereunder (in each case, other than pursuant to the Registration
Rights Agreement). Notwithstanding the foregoing or anything else contained
herein to the contrary, the Securities may be pledged as collateral in
connection with a bona fide margin account or other lending arrangement.
(h) LEGENDS. The Buyer understands that the Warrants
and, until such time as the Common Shares and Warrant Shares have been
registered under the 1933 Act as contemplated by the Registration Rights
Agreement or otherwise may be sold pursuant to Rule 144 without any restriction
as to the number of securities as of a particular date that can then be
immediately sold, the Common Shares and Warrant Shares, may bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of the certificates for such Securities):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
any state securities laws. The securities may not be sold,
transferred or assigned in the absence of an effective
registration statement for the securities under said Act, or
an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions and
reasonably acceptable to the Company that registration is not
required under said Act or unless sold pursuant to Rule 144
under said Act."
The legend set forth above shall be removed and the Company
shall issue a certificate without such legend to the holder of any Security upon
which it is stamped, if, unless otherwise required by applicable state
securities laws, (a) such Security is registered for sale under an effective
registration statement filed under the 1933 Act or otherwise may be sold
pursuant to Rule 144 without any restriction as to the number of securities as
of a particular date that can then be immediately sold, or (b) such holder
provides the Company with an opinion of counsel, in form, substance and scope
customary for opinions of counsel in comparable transactions and reasonably
acceptable to the Company, to the effect that a public sale or transfer of such
Security may be made without registration under the 1933 Act and such sale or
transfer is effected or (c) such holder provides the Company with reasonable
assurances that such Security can be sold pursuant to Rule 144 (which shall
consist of such documentation customarily executed by the seller and its broker,
if any, in connection with a proposed sale under Rule 144). The Buyer agrees to
sell all Securities, including those represented by a certificate(s) from which
the legend has been removed, in compliance with applicable prospectus delivery
requirements, if any.
(i) AUTHORIZATION; ENFORCEMENT. This Agreement and
the Registration Rights Agreement have been duly and validly authorized. This
Agreement has been
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<PAGE> 11
duly executed and delivered on behalf of the Buyer, and this Agreement
constitutes, and upon execution and delivery by the Buyer of the Registration
Rights Agreement, such agreement will constitute, valid and binding agreements
of the Buyer enforceable in accordance with their terms, except (i) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors' rights generally,
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies, and (iii) to the extent the
indemnification provisions contained in the Registration Rights Agreement may be
limited by applicable federal or state securities laws.
(j) RESIDENCY. The Buyer is a resident of the
jurisdiction set forth immediately below such Buyer's name on the signature
pages hereto (the "Jurisdiction").
(k) NO BROKERS. The Buyer has taken no action which
would give rise to any claim by any person for brokerage commissions, finder's
fees or similar payments relating to this Agreement or the transactions
contemplated hereby, except for dealings with A.G. Edwards and Sons, Inc. and
Stephens Inc., whose commissions and fees will be paid for by the Company.
(l) COMPLIANCE WITH LAWS. The Buyer hereby represents
that, to its knowledge, it has satisfied itself as to the full observance of the
laws of the Jurisdiction in connection with any invitation to subscribe for the
Securities or any use of this Agreement, including (i) the legal requirements
within the Jurisdiction for the purchase of the Securities, (ii) any foreign
exchange restrictions applicable to such purchase, (iii) any governmental or
other consents that may need to be obtained, and (iv) the income tax and other
tax consequences, if any, that may be relevant to the purchase, holding,
redemption, sale, or transfer of the Securities. To its knowledge, the Buyer's
subscription and payment for, and its beneficial ownership of the Securities,
will not violate any applicable securities or other laws of the Jurisdiction.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Buyer that:
(a) ORGANIZATION AND QUALIFICATION. The Company and
each of its Subsidiaries (as defined below), if any, is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, with full power and authority
(corporate and other) to own, lease, use and operate its properties and to carry
on its business as and where now owned, leased, used, operated and conducted.
SCHEDULE 3(a) sets forth a list of all of the Subsidiaries of the Company and
the jurisdiction in which each is incorporated. The Company and each of its
Subsidiaries is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which its ownership or use of property or
the nature of the business conducted by it makes such qualification necessary
except where the failure to be so qualified or in good standing would not have a
Material Adverse Effect. "MATERIAL ADVERSE EFFECT" means any material adverse
effect on (i) the Securities, (ii) the business, operations, assets, financial
condition or prospects of the Company and its Subsidiaries, if any, taken as a
whole, (iii) the transactions contemplated hereby or by the agreements or
instruments to be entered into in connection herewith or (iv) the authority or
the ability of the
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<PAGE> 12
Company to perform its obligation under this Agreement or the Registration
Rights Agreement. "SUBSIDIARIES" means any corporation or other organization,
whether incorporated or unincorporated, in which the Company owns, directly or
indirectly, a majority of the equity or other ownership interest. None of the
Subsidiaries is a "significant subsidiary" as defined in Rule 1-02(w) of
Regulation S-X promulgated under the 1933 Act.
(b) AUTHORIZATION; ENFORCEMENT. (i) The Company has
all requisite corporate power and authority to enter into and perform this
Agreement, the Registration Rights Agreement and the Warrants and to consummate
the transactions contemplated hereby and thereby and to issue the Securities, in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
this Agreement, the Registration Rights Agreement and the Warrants by the
Company and the consummation by it of the transactions contemplated hereby and
thereby (including without limitation, the issuance of the Common Shares and the
Warrants and the issuance and reservation for issuance of the Warrant Shares
issuable upon exercise thereof) have been duly authorized by the Company's Board
of Directors and no further consent or authorization of the Company, its Board
of Directors, or its stockholders is required, (iii) this Agreement has been
duly executed and delivered by the Company, and (iv) this Agreement constitutes,
and upon execution and delivery by the Company of the Registration Rights
Agreement and the Warrants, each of such agreements and instruments will
constitute, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies, and (iii) to the extent the
indemnification provisions contained in the Registration Rights Agreement may be
limited by applicable federal or state securities laws.
(c) CAPITALIZATION. As of May 25, 2000, the
authorized capital stock of the Company consists of (i) 50,000,000 shares of
Common Stock of which 20,095,303 shares are issued and outstanding, 14,628,876
shares are reserved for issuance pursuant to the Company's stock option plans,
800,000 shares are reserved for issuance pursuant to the Company's stock
purchase plan, 4,842,003 shares are reserved for issuance pursuant to securities
(other than the Warrants) exercisable for, or convertible into or exchangeable
for shares of Common Stock (or such greater number as may be required with
respect to the accrual of dividends thereunder or the anti-dilution provisions
thereof) and 1,700,000 shares are reserved for issuance upon exercise of the
Warrants (subject to adjustment pursuant to the Company's covenant set forth in
Section 4(h) below); and (ii) 10,000,000 shares of preferred stock, none of
which is issued or outstanding. All of such outstanding shares of capital stock
are, or upon issuance will be, duly authorized, validly issued, fully paid and
nonassessable. Except as disclosed in SCHEDULE 3(c), no shares of capital stock
of the Company are subject to preemptive rights or any other similar rights of
the stockholders of the Company or any liens or encumbrances imposed through the
actions or failure to act of the Company. Except as disclosed in SCHEDULE 3(c),
as of the effective date of this Agreement, (i) there are no outstanding
options, warrants, scrip, rights to subscribe for, puts, calls, rights of first
refusal, agreements, understandings, claims or other commitments or rights of
any character whatsoever relating to, or securities or rights convertible into
or exchangeable for any shares of capital stock of the Company or any of its
Subsidiaries, or
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<PAGE> 13
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries, (ii) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
its or their securities under the 1933 Act (except the Registration Rights
Agreement) and (iii) there are no anti-dilution or price adjustment provisions
contained in any security issued by the Company (or in any agreement providing
rights to security holders) that will be triggered by the issuance of the Common
Shares, the Warrants, or the Warrant Shares. The Company has furnished to the
Buyer true and correct copies of the Company's Certificate of Incorporation as
in effect on the date hereof ("CERTIFICATE OF INCORPORATION"), the Company's
By-laws, as in effect on the date hereof (the "BY-LAWS"), and the terms of all
securities convertible into or exercisable for Common Stock of the Company and
the material rights of the holders thereof in respect thereto. The Company shall
provide the Buyer with a written update of this representation signed by the
Company's Chief Executive Officer or Chief Financial Officer on behalf of the
Company as of the Closing Date.
(d) ISSUANCE OF SHARES. The Common Shares are duly
authorized and, upon issuance, sale and delivery in accordance with the terms of
this Agreement for the consideration expressed herein, will be validly issued,
fully paid and non-assessable, and free from all taxes, liens, claims,
encumbrances and charges with respect to the issue thereof and shall not be
subject to preemptive rights or other similar rights of stockholders of the
Company and will not impose personal liability upon the holder hereof. The
Warrant Shares are duly authorized and reserved for issuance, and, upon and
exercise of the Warrants in accordance with the terms thereof for the
consideration expressed therein, will be validly issued, fully paid and
non-assessable, and free from all taxes, liens, claims and encumbrances (other
than (i) restrictions on transferability as may be applicable under federal and
state securities laws, (ii) restrictive stock legends contemplated hereby or in
the agreements executed in connection herewith or (iii) those created by the
Buyer) and will not be subject to preemptive rights or other similar rights of
stockholders of the Company and will not impose personal liability upon the
holder hereof.
(e) ACKNOWLEDGMENT OF DILUTION. The Company
understands and acknowledges the potentially dilutive effect to the Common Stock
upon the issuance of the Common Shares and the Warrant Shares issuable upon
exercise of or otherwise pursuant to the Warrants. The Company's directors and
executive officers have studied and fully understand the nature of the
Securities being sold hereunder. The Company further acknowledges that its
obligation to issue Warrant Shares upon exercise of or otherwise pursuant to the
Warrants in accordance with this Agreement and the Warrants is absolute and
unconditional regardless of the dilutive effect that such issuance may have on
the ownership interests of other stockholders of the Company. Taking the
foregoing into account, the Company's Board of Directors has determined, in its
good faith business judgment, that the issuance of the Securities hereunder and
the Warrants and the consummation of the transactions contemplated hereby and
thereby are in the best interest of the Company and its stockholders.
(f) [INTENTIONALLY OMITTED]
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<PAGE> 14
(g) NO CONFLICTS. The execution, delivery and
performance of this Agreement, the Registration Rights Agreement and the
Warrants by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance and
reservation for issuance of the Common Shares and Warrant Shares) will not (i)
conflict with or result in a violation of any provision of the Certificate of
Incorporation or By-laws or (ii) violate or conflict with, or result in a breach
of any provision of, or constitute a default (or an event which with notice or
lapse of time or both could become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture, patent, patent license or instrument to which the Company
or any of its Subsidiaries is a party, or (iii) result in a violation of any
law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and regulations of any self-regulatory
organizations to which the Company or its securities are subject) applicable to
the Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation
of its Certificate of Incorporation, By-laws or other organizational documents
and neither the Company nor any of its Subsidiaries is in default (and no event
has occurred which with notice or lapse of time or both could put the Company or
any of its Subsidiaries in default) under, and neither the Company nor any of
its Subsidiaries has taken any action or failed to take any action that would
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party or by which any property or assets of the
Company or any of its Subsidiaries is bound or affected, except for possible
defaults as would not, individually or in the aggregate, have a Material Adverse
Effect. The businesses of the Company and its Subsidiaries, if any, are not
being conducted, and shall not be conducted so long as a Buyer owns any of the
Securities, in violation of any law, ordinance or regulation of any governmental
entity (except for violations which would not, individually or in the aggregate,
have a Material Adverse Effect). Except as specifically contemplated by this
Agreement, as set forth on SCHEDULE 3(g) and as required under the 1933 Act and
any applicable state securities laws and the rules and regulations of the Nasdaq
National Market ("NASDAQ"), the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court,
governmental agency, regulatory agency or self regulatory organization in order
for it to execute, deliver or perform any of its obligations under this
Agreement, the Registration Rights Agreement or the Warrants in accordance with
the terms hereof or thereof. Except as disclosed in SCHEDULE 3(g), all consents,
authorizations, orders, filings and registrations which the Company is required
to obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the date hereof. The Company is not in violation of the listing
requirements of Nasdaq and does not reasonably anticipate that the Common Stock
will be delisted by Nasdaq in the foreseeable future. The Company is unaware of
any facts or circumstances which might reasonably be expected to give rise to
any of the foregoing.
(h) SEC DOCUMENTS; FINANCIAL STATEMENTS. Except as
disclosed in SCHEDULE 3(h), since December 31, 1997, the Company has timely
filed all reports, schedules, forms, statements and other documents required to
be filed by it with the SEC pursuant to the
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reporting requirements of the Exchange Act of 1934, as amended (the "1934 ACT")
(all of the foregoing filed prior to the date hereof and all exhibits included
therein and financial statements and schedules thereto and documents (other than
exhibits to such documents) incorporated by reference therein, being hereinafter
referred to herein as the "SEC DOCUMENTS"). The Company has made available
(which may include access to the SEC's website) to each Buyer true and complete
copies of the SEC Documents, except for such exhibits and incorporated
documents. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except to the extent corrected by a subsequently filed SEC Document
filed prior to the date hereof. None of the statements made in any such SEC
Documents is, or has been, required to be amended or updated under applicable
law (except for such statements as have been amended or updated in subsequent
filings prior to the date hereof). All material contracts and agreements to
which the Company is currently a party have been filed with, or are incorporated
by reference to, the Company's Form 10- KSB for the year ended December 31, 1999
and the Company's Form 10-QSB for the quarter ended March 31, 2000. As of their
respective dates, the financial statements of the Company included in the SEC
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with
United States generally accepted accounting principles, consistently applied,
during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they may not include footnotes or may be
condensed or summary statements) and fairly present in all material respects the
consolidated financial position of the Company and its consolidated Subsidiaries
as of the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except as set forth in the
financial statements of the Company included in the SEC Documents, the Company
has no liabilities, contingent or otherwise, other than (i) liabilities incurred
in the ordinary course of business subsequent to December 31, 1999 and (ii)
obligations under contracts and commitments incurred in the ordinary course of
business and not required under generally accepted accounting principles to be
reflected in such financial statements, which, individually or in the aggregate,
are not material to the financial condition or operating results of the Company.
(i) ABSENCE OF CERTAIN CHANGES. Except as set forth
on SCHEDULE 3(I) hereof, since December 31, 1999, there has been no material
adverse change and no material adverse development in the assets, liabilities,
business, properties, operations, financial condition, results of operations or
prospects of the Company or any of its Subsidiaries.
(j) ABSENCE OF LITIGATION. There is no action, suit,
claim, proceeding, known inquiry or known investigation before or by any court,
public board, government agency, self- regulatory organization or body pending
or, to the knowledge of the Company or any of its Subsidiaries, threatened
against or affecting the Company or any of its Subsidiaries, or their
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officers or directors in their capacity as such, that could have a Material
Adverse Effect. SCHEDULE 3(j) contains a complete list and summary description
of any pending or, to the Company's knowledge, threatened proceeding against or
affecting the Company or any of its Subsidiaries, without regard to whether it
would have a Material Adverse Effect. The Company and its Subsidiaries are
unaware of any facts or circumstances which might give rise to any of the
foregoing.
(k) PATENTS, COPYRIGHTS, ETC. The Company and each of
its Subsidiaries owns or possesses the requisite licenses or rights to use all
patents, patent rights, inventions, know-how, trade secrets, trademarks, service
marks, service names, trade names and copyrights ("INTELLECTUAL PROPERTY")
necessary to enable it to conduct its business as now operated (and, except as
set forth in SCHEDULE 3(k) hereof, to the Company's knowledge, as presently
contemplated to be operated in the future); there is no claim or action by any
person pertaining to, or proceeding pending, or to the Company's knowledge
threatened, which challenges the right of the Company or of a Subsidiary with
respect to any Intellectual Property necessary to enable it to conduct its
business as now operated (and, except as set forth in SCHEDULE 3(k) hereof, to
the Company's knowledge, as presently contemplated to be operated in the
future); to the best of the Company's knowledge, the Company's or its
Subsidiaries' current and intended products, services and processes do not
infringe on any Intellectual Property or other rights held by any person; and
the Company is unaware of any facts or circumstances which might reasonably give
rise to any of the foregoing. The Company and each of its Subsidiaries have
taken commercially reasonable security measures to protect the secrecy,
confidentiality and value of their Intellectual Property.
(l) CERTAIN TRANSACTIONS. Except as set forth on
SCHEDULE 3(l) and except for arm's length transactions pursuant to which the
Company or any of its Subsidiaries makes payments in the ordinary course of
business upon terms no less favorable than the Company or any of its
Subsidiaries could obtain from third parties and other than the grant of stock
options disclosed on SCHEDULE 3(c), none of the officers, directors, or
employees of the Company is presently a party to any transaction with the
Company or any of its Subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.
(m) DISCLOSURE. All information relating to or
concerning the Company or any of its Subsidiaries set forth in this Agreement
and provided to the Buyers pursuant to Section 2(d) hereof and otherwise in
connection with the transactions contemplated hereby is true and correct in all
material respects and the Company has not omitted to state any material fact
necessary in order to make the statements made herein or therein, in light of
the circumstances under which they were made, not misleading. No event or
circumstance has occurred or exists with respect to the Company or any of its
Subsidiaries or its or their business, properties, prospects, operations or
financial conditions, which has not been publicly announced or disclosed but,
under applicable law, rule or regulation, requires public disclosure or
announcement by the
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Company (assuming for this purpose that the Company's reports filed under the
1934 Act are being incorporated into an effective registration statement filed
by the Company under the 1933 Act).
(n) ACKNOWLEDGMENT REGARDING BUYERS' PURCHASE OF
SECURITIES. The Company acknowledges and agrees that the Buyers are acting
solely in the capacity of arm's length purchasers with respect to this Agreement
and the transactions contemplated hereby. The Company further acknowledges that
no Buyer is acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to this Agreement and the transactions
contemplated hereby and any statement made by any Buyer or any of their
respective representatives or agents in connection with this Agreement and the
transactions contemplated hereby is not advice or a recommendation and is merely
incidental to the Buyers' purchase of the Securities and has not been relied
upon by the Company, its officers or directors in any way. The Company further
represents to each Buyer that the Company's decision to enter into this
Agreement has been based solely on the independent evaluation of the Company and
its representatives.
(o) NO INTEGRATED OFFERING. Assuming the truth and
accuracy of the representations and warranties of the Buyer contained in this
Agreement, neither the Company, nor any of its affiliates, nor any person acting
on its or their behalf, has directly or indirectly made any offers or sales of
any security or solicited any offers to buy any security under circumstances
that would require registration under the 1933 Act of the issuance of the
Securities to the Buyers. The issuance of the Securities to the Buyers will not
be integrated with any other issuance of the Company's securities (past, current
or future) for purposes of any stockholder approval provisions applicable to the
Company or its securities.
(p) NO BROKERS. The Company has taken no action which
would give rise to any claim by any person for brokerage commissions, finder's
fees or similar payments relating to this Agreement or the transactions
contemplated hereby, except for dealings with A.G. Edwards and Sons, Inc. and
Stephens Inc., whose commissions and fees will be paid for by the Company.
(q) INSURANCE. The Company and each of its
Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company
believes to be prudent and customary in the businesses in which the Company and
its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect.
(r) INTERNAL ACCOUNTING CONTROLS. The Company and
each of its Subsidiaries maintain a system of internal accounting controls
sufficient, in the judgment of the Company's board of directors, to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted
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<PAGE> 18
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(s) FOREIGN CORRUPT PRACTICES. Neither the Company
nor, to the Company's knowledge, any of its Subsidiaries, nor any director,
officer, agent, employee or other person acting on behalf of the Company or any
Subsidiary has, in the course of his actions for, or on behalf of, the Company,
used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expenses relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provision of
the U.S. Foreign Corrupt Practices Act of 1977; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.
(t) NO INVESTMENT COMPANY. The Company is not, and
upon the issuance and sale of the Securities as contemplated by this Agreement
and the Warrants will not be, an "investment company" required to be registered
under the Investment Company Act of 1940 (an "INVESTMENT COMPANY"). The Company
is not controlled by an Investment Company.
4. COVENANTS.
(a) BEST EFFORTS. The parties shall use their best
efforts to satisfy timely each of the conditions described in Section 6 and 7 of
this Agreement.
(b) FORM D; BLUE SKY LAWS. The Company agrees to file
a Form D with respect to the Securities as required under Regulation D and to
provide a copy thereof to each Buyer promptly after such filing. The Company
shall, on or before the Closing Date, take such action as the Company shall
reasonably determine is necessary to qualify the Securities for sale to the
Buyers at the Closing pursuant to this Agreement under applicable securities or
"blue sky" laws of the states of the United States (or to obtain an exemption
from such qualification), and shall provide evidence of any such action so taken
to each Buyer on or prior to the Closing Date. The Buyer shall, on or before the
Closing Date, take such action to assist the Company in determining the
applicable filing requirements, if any, in foreign jurisdictions.
(c) REPORTING STATUS; ELIGIBILITY TO USE FORM S-3.
The Company's Common Stock is registered under Section 12(g) of the 1934 Act. So
long as any Buyer beneficially owns any of the Securities, the Company shall
timely file all reports required to be filed with the SEC pursuant to the 1934
Act, and the Company shall not terminate its status as an issuer required to
file reports under the 1934 Act even if the 1934 Act or the rules and
regulations thereunder would permit such termination. The Company currently
meets, and will take all necessary action to continue to meet, the "registrant
eligibility" requirements set forth in the general instructions to Form S-3. The
Company shall issue a press release describing the materials terms of the
transaction contemplated hereby as soon as practicable following the Closing
Date but in no event more than two (2) business days of the Closing Date, and
shall file
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<PAGE> 19
with the SEC a Current Report on Form 8-K describing the material terms of the
transaction contemplated hereby within five (5) business days of the Closing
Date, which press release and Form 8-K shall be subject to prior review by the
Buyers.
(d) USE OF PROCEEDS. The Company shall use the
proceeds from the sale of the Common Shares and the Warrants and from the
exercise of the Warrants in the manner set forth in SCHEDULE 4(D) attached
hereto and made a part hereof; provided, that the Company shall not, directly or
indirectly, use such proceeds for (i) any loan (other than loans made in the
normal course of the Company's business or loans made in connection with the
relocation of the Company's executive offices) to, (ii) satisfaction of
obligations for, or (iii) redemption of securities of, any stockholder,
employee, officer or director of the Company or any of its Subsidiaries; and
provided, further, that the Company shall not, directly or indirectly, use more
than $3,000,000 of such proceeds for investments in any other corporation,
partnership, enterprise or other purpose without the consent of Buyer, which
consent shall not be unreasonably withheld.
(e) ADDITIONAL EQUITY CAPITAL. Subject to the
exceptions described below, the Company will not, without the prior written
consent of Rose Glen Capital Management, L.P. ("ROSE GLEN"), negotiate or
contract with any party to obtain additional equity financing (including debt
financing with an equity component) that involves (A) the issuance of Common
Stock (whether upon conversion or exercise of a security convertible into or
exercisable for Common Stock ("CONVERTIBLE SECURITIES") or otherwise) at a
discount to the market price of the Common Stock on the date of issuance thereof
or, in the case of Convertible Securities, the date of issuance of such
Convertible Securities (taking into account the value of any warrants or options
to acquire Common Stock issued in connection therewith) or (B) the issuance of
Convertible Securities that are convertible into an indeterminate number of
shares of Common Stock or where the issuance price of the Common Stock upon
conversion or exercise of such Convertible Securities (including, based upon any
conversion, exchange or reset formula) changes at any time after the date of
issuance of such Convertible Securities, during the period (the "LOCK-UP
PERIOD") beginning on the Closing Date and ending ninety (90) days from the date
the Registration Statement (as defined in the Registration Rights Agreement) is
first declared effective (plus any days in which sales cannot be made
thereunder) (the limitations referred to in this sentence are collectively
referred to as the "CAPITAL RAISING LIMITATIONS"). The Capital Raising
Limitations shall not apply to any transaction involving (i) issuances of
securities in a firm commitment underwritten public offering (excluding a
continuous offering pursuant to Rule 415 under the 1933 Act) or (ii) issuances
of securities as consideration for a merger, consolidation or purchase of
assets, or in connection with any strategic partnership or joint venture (the
primary purpose of which is not to raise equity capital), or in connection with
the disposition or acquisition of a business, product or license by the Company.
The Capital Raising Limitations also shall not apply to the issuance of
securities upon exercise or conversion of the Company's options, warrants or
other convertible securities outstanding as of the date hereof or to the grant
of additional options or warrants, the issuance of additional securities, under
any Company stock option or restricted stock plan approved by the stockholders
of the Company, issuances of securities to independent contractors or
consultants pursuant to written agreements existing on the date hereof, or the
issuance of up to 500,000 shares of Common Stock (or securities
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convertible into or exercisable for Common Stock) to independent contractors or
consultants at a price per share of not less eighty-five percent (85%) of the
market price of the Common Stock on the date of issuance.
(f) EXPENSES. The Company shall pay to Rose Glen at
the Closing a non- accountable expense allowance equal to Twenty-Five Thousand
Dollars ($25,000), (of which Five Thousand Dollars ($5,000) was advanced
previously) for all expenses incurred by it in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and the other
agreements to be executed in connection herewith, including, without limitation,
attorneys' and consultants' fees and expenses.
(g) FINANCIAL INFORMATION. The Company agrees to send
the following reports to each Buyer until such Buyer transfers, assigns, or
sells all of the Securities: (i) within ten (10) days after the filing with the
SEC, a copy of its Annual Report on Form 10-KSB, its Quarterly Reports on Form
10-QSB and any Current Reports on Form 8-K; (ii) within one (1) day after
release, copies of all press releases issued by the Company or any of its
Subsidiaries; and (iii) contemporaneously with the making available or giving to
the stockholders of the Company, copies of any notices or other information the
Company makes available or gives to such stockholders.
(h) RESERVATION OF SHARES. The Company shall at all
times have authorized, and reserved for the purpose of issuance, a sufficient
number of shares of Common Stock to provide for the full exercise of the
Warrants and issuance of the Warrant Shares in connection therewith (based on
the Exercise Price of the Warrants in effect from time to time). The Company
shall not reduce the number of shares of Common Stock reserved for issuance upon
exercise of the Warrants without the consent of each Buyer. The Company shall
use its best efforts at all times to maintain the number of shares of Common
Stock so reserved for issuance at no less than two (2) times the number that is
then actually issuable upon full exercise of the Warrants (based on the Exercise
Price of the Warrants in effect from time to time). If at any time the number of
shares of Common Stock authorized and reserved for issuance is below the number
of Warrant Shares issued and issuable upon exercise of the Warrants (based on
the Exercise Price of the Warrants then in effect), the Company will promptly
take all corporate action necessary to authorize and reserve a sufficient number
of shares, including, without limitation, calling a special meeting of
stockholders to authorize additional shares to meet the Company's obligations
under this Section 4(h), in the case of an insufficient number of authorized
shares, and using its best efforts to obtain stockholder approval of an increase
in such authorized number of shares.
(i) LISTING. The Company has secured the listing of
the Common Shares and the Warrant Shares upon each national securities exchange
or automated quotation system, if any, upon which shares of Common Stock are
listed and, so long as any Buyer owns any of the Securities, shall maintain, so
long as any other shares of Common Stock shall be so listed, such listing of all
Common Shares and Warrant Shares from time to time issuable upon exercise of the
Warrants. The Company will obtain and, so long as any Buyer owns any of the
Securities, maintain the listing and trading of its Common Stock on Nasdaq, the
Nasdaq SmallCap Market (the "NASDAQ SMALLCAP") the New York Stock Exchange
("NYSE"), or the
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American Stock Exchange ("AMEX") and will comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules of
the National Association of Securities Dealers ("NASD") and such exchanges, as
applicable. The Company shall promptly provide to each Buyer copies of any
notices it receives from Nasdaq and any other exchanges or quotation systems on
which the Common Stock is then listed regarding the continued eligibility of the
Common Stock for listing on such exchanges and quotation systems.
(j) CORPORATE EXISTENCE. So long as a Buyer
beneficially owns any Common Shares or Warrants, the Company shall maintain its
corporate existence and shall not merge, consolidate sell all or substantially
all of the Company's assets, except in the event of a merger or consolidation or
sale of all or substantially all of the Company's assets, where (i) the
successor or acquiring entity and, if an entity different from the successor or
acquiring entity, the entity whose securities into which the Warrants shall
become exercisable, pursuant to Section 4(e) of the Warrants, in such
transaction assumes the Company's obligations hereunder and under the agreements
and instruments entered into in connection herewith (including the Warrants) and
(ii) the entity whose securities into which the Warrants shall become
exercisable, pursuant to Section 4(e) of the Warrants, is a publicly traded
corporation whose Common Stock is listed for trading on Nasdaq, the Nasdaq
SmallCap, the NYSE or the AMEX.
(k) NO INTEGRATION. The Company shall not make any
offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold
hereunder under the 1933 Act or cause the offering of Securities to be
integrated with any other offering of securities by the Company for the purpose
of any stockholder approval provision applicable to the Company or its
securities.
(l) TRADING LIMITATIONS.
(i) Each Buyer represents that it has not
(nor others acting on behalf of, and pursuant to instructions from, such Buyer)
engaged in any trading activity involving the Company's Common Stock (through
direct or indirect purchases or sales) prior to the Closing Date and agrees
that, so long as it owns any Securities, it will conduct any sales of Common
Stock in compliance with all relevant securities laws and regulations.
(ii) During the fifteen (15) consecutive
trading days immediately preceding any Reset Date (as defined in the Warrants)
on which a reset pursuant to the Warrants is being calculated (a "TRADING
LIMITATION PERIOD"), the Buyer will not (x) create any daily low trading prices
in the Common Stock, (y) have a Net Short Position (as defined below) in the
Common Stock or (z) unless otherwise authorized by the Company in writing, sell
a number of Common Shares and/or Warrant Shares in excess of 15% of the
aggregate trading volume of the Common Stock on Nasdaq (or the principal trading
market on which the Common Stock is then traded) as reported by Bloomberg
Financial Markets ("BLOOMBERG") during the applicable Trading Limitation Period;
provided that on any such day, the Buyer will not sell a number of shares of
Common Stock in excess of 20% of the trading volume of the Common Stock on
Nasdaq (or the principal trading market on which the Common Stock is then
traded) as reported by Bloomberg for such day; and provided, further, that the
prohibition on sales contained
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in this Section 4(l)(ii)(z) shall not apply to (A) block trades of at least
20,000 shares of Common Stock and (B) sales at or above 110% of the then
applicable Exercise Price (as defined in the Warrants). "NET SHORT POSITION"
means that the aggregate short position of the Buyer at any given time exceeds
the number of shares of Common Stock owned by the Buyer (including any Common
Shares and any Warrant Shares issuable upon exercise of the Warrants).
5. TRANSFER AGENT INSTRUCTIONS. The Company shall issue
irrevocable instructions to its transfer agent to issue certificates, registered
in the name of each Buyer or its nominee, for the Common Shares and Warrant
Shares in such amounts as specified from time to time by each Buyer to the
Company (the "IRREVOCABLE TRANSFER AGENT INSTRUCTIONS"). Prior to registration
of the Common Shares and Warrant Shares under the 1933 Act or the date on which
the Common Shares and Warrant Shares, as applicable, may be sold pursuant to
Rule 144 without any restriction as to the number of securities as of a
particular date that can then be immediately sold, all such certificates shall
bear the restrictive legend specified in Section 2(h) of this Agreement. The
Company warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5, and stop transfer instructions to
give effect to Section 2(g) hereof (in the case of the Common Shares and Warrant
Shares, prior to effectiveness of the registration statement relating to the
Common Shares and Warrant Shares under the 1933 Act or the date on which the
Common Shares and Warrant Shares, as applicable, may be sold pursuant to Rule
144 without any restriction as to the number of securities as of a particular
date that can then be immediately sold), will be given by the Company to its
transfer agent and that the Securities shall otherwise be freely transferable on
the books and records of the Company as and to the extent provided in this
Agreement and the Registration Rights Agreement. Nothing in this Section 5 shall
affect in any way the Buyer's obligations and agreement set forth in Section
2(h) hereof to comply with all applicable prospectus delivery requirements, if
any, upon resale of the Securities. If a Buyer provides the Company with (i) an
opinion of counsel, in form, substance and scope customary for opinions in
comparable transactions and reasonably acceptable to the Company, to the effect
that a public sale or transfer of such Securities may be without registration
under the 1933 Act or (ii) the Buyer provides reasonable assurances that the
Securities can be sold pursuant to Rule 144 (which shall consist of such
documentation customarily executed by the seller and its broker, if any, in
connection with a proposed sale under Rule 144), the Company shall permit the
transfer, and, in the case of the Common Shares and Warrant Shares, promptly
instruct its transfer agent to issue one or more certificates, free from any
restrictive legend, in such name and in such denominations as specified by such
Buyer.
Provided that the Securities are required to be issued without
legend (or such legend is required to be removed) in accordance with Section
2(h) above, in lieu of delivering physical certificates representing the Common
Shares or the Warrant Shares, provided the Company's Transfer Agent is
participating in the Depository Trust Company ("DTC") Fast Automated Securities
Transfer ("FAST") program, the Company shall use its best efforts to cause its
Transfer Agent to electronically transmit the Common Shares and/or Warrant
Shares by crediting the account of the Company's Prime Broker with DTC through
its Deposit Withdrawal Agent Commission ("DWAC") system.
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<PAGE> 23
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. The
obligation of the Company hereunder to issue and sell the Units to a Buyer at
the Closing is subject to the satisfaction, at or before the Closing Date, of
each of the following conditions thereto, provided that these conditions are for
the Company's sole benefit and may be waived by the Company at any time in its
sole discretion:
(a) The applicable Buyer shall have executed this
Agreement and the Registration Rights Agreement, and delivered the same to the
Company.
(b) The applicable Buyer shall have delivered the
Purchase Price for the Units which it is purchasing in accordance with Section
1(b) above.
(c) The representations and warranties of the
applicable Buyer shall be true and correct in all material respects as of the
date when made and as of the Closing Date as though made at that time (except
for representations and warranties that speak as of a specific date, which
representations and warranties shall be true and correct as of such date), and
the applicable Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the applicable Buyer at
or prior to the Closing Date.
(d) No litigation, statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.
7. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE. The
obligation of each Buyer hereunder to purchase the Units at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for such Buyer's sole
benefit and may be waived by such Buyer at any time in its sole discretion:
(a) The Company shall have executed this Agreement
and the Registration Rights Agreement, and delivered the same to the Buyer.
(b) The Company shall have delivered to such Buyer
duly executed certificates (in such denominations as the Buyer shall request)
representing the Common Shares and duly executed Warrants in accordance with
Section 1(b) above.
(c) The Irrevocable Transfer Agent Instructions, in
form and substance satisfactory to a majority-in-interest of the Buyers, shall
have been delivered to and acknowledged in writing by the Company's Transfer
Agent.
(d) The representations and warranties of the Company
shall be true and correct in all material respects as of the date when made and
as of the Closing Date as though
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<PAGE> 24
made at such time (except for representations and warranties that speak as of a
specific date) and the Company shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by the Company at or
prior to the Closing Date. The Buyer shall have received a certificate or
certificates, executed by the chief executive officer or chief financial officer
of the Company, dated as of the Closing Date, to the foregoing effect and as to
such other matters as may be reasonably requested by such Buyer including, but
not limited to certificates with respect to the Company's Certificate of
Incorporation, By-laws and Board of Directors' resolutions relating to the
transactions contemplated hereby.
(e) No litigation, statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.
(f) Trading in the Common Stock on Nasdaq shall not
have been suspended by the SEC or Nasdaq.
(g) The Buyer shall have received an opinion of the
Company's counsel, dated as of the Closing Date, in form, scope and substance
reasonably satisfactory to the Buyer and in substantially the same form as
EXHIBIT "C" attached hereto.
8. GOVERNING LAW; MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware applicable
to agreements made and to be performed in the State of Delaware (without regard
to the principles of conflict of laws). The parties hereto hereby submit to the
exclusive jurisdiction of the United States federal courts and state courts
located in Delaware with respect to any suite or proceeding based on or arising
under this Agreement, the agreements entered into in connection herewith or the
transactions contemplated hereby or thereby and irrevocably agree that all
claims in respect of such suit or proceeding may be determined in such courts.
Both parties irrevocably waive the defense of an inconvenient forum to the
maintenance of such suit or proceeding. Both parties further agree that service
of process upon a party mailed by first class mail shall be deemed in every
respect effective service of process upon the party in any such suit or
proceeding. Nothing herein shall affect either party's right to serve process in
any other manner permitted by law. Both parties agree that a final
non-appealable judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner.
(b) COUNTERPARTS; SIGNATURES BY FACSIMILE. This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party.
This Agreement, once executed by a party, may be delivered to the
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<PAGE> 25
other party hereto by facsimile transmission of a copy of this Agreement bearing
the signature of the party so delivering this Agreement.
(c) HEADINGS. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
(d) SEVERABILITY. If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.
(e) ENTIRE AGREEMENT; AMENDMENTS. This Agreement and
the instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Buyer
makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived or amended other than by
an instrument in writing signed by the party to be charged with enforcement.
(f) NOTICES. Any notices required or permitted to be
given under the terms of this Agreement shall be sent by certified or registered
mail (return receipt requested) or delivered personally or by courier (including
a recognized overnight delivery service) or by facsimile and shall be effective
five days after being placed in the mail, if mailed by regular United States
mail, or upon receipt, if delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile, in each case addressed
to a party. The addresses for such communications shall be:
If to the Company:
The viaLink Company
13155 Noel Road, Ste. 800
Dallas, TX 75240
Attention: Chief Financial Officer
Facsimile: 972-934-5555
With copy to:
Richard M. Klinge & Associates, P.C.
510 E. Memorial Road, Ste. C-1
Oklahoma City, OK 73114
Attention: Richard M. Klinge, Esq.
Facsimile: 405-775-9003
Brobeck, Phleger & Harrison LLP
301 Congress Ave., Ste. 1200
Austin, TX 78701
Attention: J. Matthew Lyons, Esq.
Facsimile: 512-477-5813
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<PAGE> 26
If to a Buyer: To the address set forth immediately below such Buyer's
name on the signature pages hereto.
With copy to:
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street
Philadelphia, PA 19103
Attention: Gerald J. Guarcini, Esq.
Facsimile: 215-864-8999
Each party shall provide notice to the other party of any change in
address.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
assigns. Neither the Company nor any Buyer shall assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other.
Notwithstanding the foregoing, subject to Section 2(f), any Buyer may assign its
rights hereunder to any person that purchases securities in a private
transaction from a Buyer or to any of its "affiliates," as that term is defined
under the 1934 Act, without the consent of the Company.
(h) THIRD PARTY BENEFICIARIES. This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.
(i) SURVIVAL. The representations and warranties of
the Company and the Buyer and the agreements and covenants set forth in Sections
2, 3, 4 and 5 shall survive the closing hereunder notwithstanding any due
diligence investigation conducted by or on behalf of the Buyers; provided that
the representations and warranties set forth in Sections 2 (other than Section
2(g) and 2(h)) and 3 shall terminate three (3) years from the Closing Date.
(j) PUBLICITY. The Company and each of the Buyers
shall have the right to review a reasonable period of time before issuance of
any press releases, filings with the SEC, NASD or any stock exchange or
interdealer quotation system or any other public statements with respect to the
transactions contemplated hereby; provided, however, that the Company shall be
entitled, without the prior approval of each of the Buyers, to make any press
release or public filings with respect to such transactions as is required by
applicable law and regulations or by obligations pursuant to any listing
agreement with any national securities exchange or with the NASD (although each
of the Buyers shall be consulted by the Company in connection with any such
press release prior to its release and shall be provided with a copy thereof and
be given an opportunity to comment thereon).
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<PAGE> 27
(k) FURTHER ASSURANCES. Each party shall do and
perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
(l) NO STRICT CONSTRUCTION. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.
(m) REMEDIES. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to each Buyer, by
vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Agreement will be inadequate and agrees, in the event of
a breach or threatened breach by the Company of the provisions of this
Agreement, that each Buyer shall be entitled, in addition to all other available
remedies at law or in equity, to an injunction or injunctions to prevent or cure
any breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions of this Agreement, without the necessity of showing
economic loss and without any bond or other security being required.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 28
IN WITNESS WHEREOF, the undersigned Buyers and the Company
have caused this Agreement to be duly executed as of the date first above
written.
THE VIALINK COMPANY
By: /s/ J. ANDREW KERNER
------------------------------------------------
J. Andrew Kerner
Senior Vice President of Finance and
Chief Financial Officer
RGC INTERNATIONAL INVESTORS, LDC
By: Rose Glen Capital Management, L.P., Investment Manager
By: RGC General Partner Corp., as General Partner
By: /s/ WAYNE D. BLOCH
------------------------------------------------
Wayne D. Bloch
Managing Director
RESIDENCE: Cayman Islands
ADDRESS:
c/o Rose Glen Capital Management, L.P.
3 Bala Plaza East, Suite 200
251 St. Asaphs Road
Bala Cynwyd, PA 19004
Attention: Legal Department
Facsimile: (610) 617-0570
Telephone: (610) 617-5900
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Units: 960,615
Number of Common Shares: 960,615
Number of Warrants: 768,492
Aggregate Purchase Price: $ 10,000,000
<PAGE> 29
EXHIBIT 4.2
THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS. EXCEPT AS OTHERWISE SET FORTH HEREIN OR
IN A SECURITIES PURCHASE AGREEMENT DATED AS OF MAY 31, 2000, NEITHER THIS
WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER
SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE CUSTOMARY
FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS AND REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT
OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
Right to
Purchase
768,492
Shares of
Common
Stock, par
value $0.001
per share
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, RGC International Investors, LDC
or its registered assigns, is entitled to purchase from The viaLink Company, a
Delaware corporation (the "Company"), at any time or from time to time during
the period specified in Paragraph 2 hereof, Seven Hundred Sixty Eight Thousand,
Four Hundred Ninety Two (768,492) fully paid and nonassessable shares of the
Company's Common Stock, par value $0.001 per share (the "Common Stock"), at an
exercise price of $12.06 per share (the "Exercise Price"), provided, however, on
each of May 31, 2001, November 30, 2001, May 31, 2002 and November 30, 2002
(each, a "Reset Date"), the Exercise Price then in effect shall be reset, if
lower, to the average of the Closing Bid Prices (as defined below) of the Common
Stock for the ten (10) Trading Days (as defined herein) ending on the
<PAGE> 30
Trading Day immediately preceding such Reset Date, but in no event shall the
Exercise Price be less than $6.25 (subject to adjustment for stock splits,
combinations and similar events) (the "Floor Price"). If the Exercise Price is
reduced as a result of the resets in the foregoing sentence, the number of
shares into which this Warrant is exercisable shall be proportionately increased
in accordance with the provisions of Section 4(d).
Notwithstanding the foregoing, so long as at all times during the period
beginning thirty (30) days prior to the beginning of the twenty (20) Trading Day
period referred to below and ending on the last day of such twenty (20) Trading
Day period (A) the Registration Statement (as defined in the Registration Rights
Agreement (as defined below)) required to be filed and to be effective pursuant
to the Registration Rights Agreement is effective and remains in effect and
sales of all of the Registrable Securities (as defined in the Registration
Rights Agreement) can be made thereunder, (B) the Company has a sufficient
number of shares of Common Stock reserved for issuance upon full exercise of
this Warrant and (C) the shares of Common Stock issuable upon exercise of this
Warrant are traded on the Nasdaq National Market ("Nasdaq"), the Nasdaq Small
Cap Market (the "Nasdaq SmallCap"), the New York Stock Exchange ("NYSE") or the
American Stock Exchange ("AMEX"), if the average of the Closing Bid Prices (as
defined below) of the Common Stock for any twenty (20) consecutive Trading Days
exceeds $21.11 (subject to adjustment for stock splits, combinations and similar
events), the Exercise Price then in effect shall not be subject to further
resets pursuant to the proviso in the first sentence of the preceding paragraph.
The term "Warrant Shares," as used herein, refers to the shares of Common Stock
purchasable hereunder. "Closing Bid Price" means, for any security as of any
date, the closing bid price on Nasdaq as reported by Bloomberg Financial Markets
("Bloomberg") or, if Nasdaq is not the principal trading market for such
security, the closing bid price of such security on the principal securities
exchange or trading market where such security is listed or traded as reported
by Bloomberg, or if the foregoing do not apply, the closing bid price of such
security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price of such
security is available in the over-the-counter market on the electronic bulletin
board for such security or in any of the foregoing manners, the average of the
bid prices of any market makers for such security that are listed in the "pink
sheets" by the National Quotation Bureau, Inc. If the Closing Bid Price cannot
be calculated for such security on such date in the manner provided above, the
Closing Bid Price shall be the fair market value as mutually determined by the
Company and the holders. "Trading Day" shall mean any day on which the Common
Stock is traded for any period on Nasdaq, or on the principal securities
exchange or other securities market on which the Common Stock is then being
traded.
The Warrant Shares and the Exercise Price are subject to further adjustment
as provided in Paragraph 4 hereof. The term Warrants means this Warrant and the
other warrants issued pursuant to that certain Securities Purchase Agreement,
dated May 31, 2000, by and among the Company and the Buyers listed on the
execution page thereof (the "Securities Purchase Agreement").
This Warrant is subject to the following terms, provisions, and conditions:
2
<PAGE> 31
1. MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
Subject to the provisions hereof, this Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the "Exercise
Agreement"), to the Company during normal business hours on any Trading Day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the holder hereof), and upon (i)
payment to the Company in cash, by certified or official bank check or by wire
transfer for the account of the Company of the Exercise Price for the Warrant
Shares specified in the Exercise Agreement, (ii) if the resale of the Warrant
Shares by the holder is not then registered pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), delivery to the Company of a written notice of an election to
effect a "Cashless Exercise" (as defined in Section 11(c) below) for the Warrant
Shares specified in the Exercise Agreement, or (iii) surrender to the Company of
shares of Common Stock having an Aggregate Exchange Value (as defined below)
equal to the aggregate Exercise Price for the Warrant Shares specified in the
Exercise Agreement. For purposes hereof, the "Aggregate Exchange Value" of any
shares of Common Stock delivered in payment of the Exercise Price pursuant to
clause (iii) of the preceding sentence shall equal the product of (x) $10.41 per
share (subject to adjustment for stock splits, stock dividends and similar
transactions), multiplied by (y) the number of shares of Common Stock delivered
pursuant hereto. The Warrant Shares so purchased shall be deemed to be issued to
the holder hereof or such holder's designee, as the record owner of such shares,
as of the close of business on the date on which this Warrant shall have been
surrendered, the completed Exercise Agreement shall have been delivered, and
payment shall have been made for such shares (or an election to effect a
Cashless Exercise has been made) as set forth above. The Company will cause
certificates for the Warrant Shares so purchased, representing the aggregate
number of shares specified in the Exercise Agreement, to be delivered to the
holder hereof within a reasonable time, not exceeding three (3) Trading Days,
after this Warrant shall have been so exercised. The certificates so delivered
shall be in such denominations as may be requested by the holder hereof and
shall be registered in the name of such holder or such other name as shall be
designated by such holder. If this Warrant shall have been exercised only in
part, then, unless this Warrant has expired, the Company shall, at its expense,
at the time of delivery of such certificates, deliver to the holder a new
Warrant representing the number of shares with respect to which this Warrant
shall not then have been exercised.
Notwithstanding anything in this Warrant to the contrary, in no event shall
the Holder of this Warrant be entitled to exercise a number of Warrants (or
portions thereof) in excess of the number of Warrants (or portions thereof) upon
exercise of which the sum of (i) the number of shares of Common Stock
beneficially owned by the Holder and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the
unexercised Warrants and the unexercised or unconverted portion of any other
securities of the Company subject to a limitation on conversion or exercise
analogous to the limitation contained herein) and (ii) the number of shares of
Common Stock issuable upon exercise of the Warrants (or portions thereof) with
respect to which the determination described herein is being made, would result
in beneficial ownership by the Holder and its affiliates of more than 4.9% of
the outstanding shares of Common Stock. For purposes of the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13D-G thereunder, except as otherwise provided in clause (i) hereof.
Notwithstanding anything to
3
<PAGE> 32
the contrary contained herein, the limitation on exercise of this Warrant set
forth in this paragraph may not be amended without (i) the written consent of
the holder hereof and the Company and (ii) the approval of the holders of a
majority of the Company's Common Stock present, or represented by proxy and
voting at any meeting called to vote on the amendment of such restriction.
2. PERIOD OF EXERCISE. This Warrant is exercisable at any time or from time
to time on or after the date on which this Warrant is issued and delivered
pursuant to the terms of the Securities Purchase Agreement (the "Issue Date")
and before 5:00 p.m., New York City time, on the third (3rd) anniversary of the
Issue Date (the "Exercise Period").
3. CERTAIN AGREEMENTS OF THE COMPANY. The Company hereby covenants and
agrees as follows:
(a) SHARES TO BE FULLY PAID. All Warrant Shares will, upon issuance in
accordance with the terms of this Warrant, be validly issued, fully paid, and
nonassessable and free from all taxes, liens, and charges with respect to the
issue thereof (other than (i) restrictions on transferability as may be
applicable under federal and state securities laws, (ii) restrictive stock
legends contemplated hereby or in the agreements executed in connection
herewith, or (iii) those created by the holder of this Warrant).
(b) RESERVATION OF SHARES. During the Exercise Period, the Company
shall at all times have authorized, and reserved for the purpose of issuance
upon exercise of this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
(c) LISTING. The Company has secured the listing of the shares of
Common Stock issuable upon exercise of the Warrant upon each national securities
exchange or automated quotation system, if any, upon which shares of Common
Stock are listed and shall maintain, so long as any other shares of Common Stock
shall be so listed, such listing of all shares of Common Stock from time to time
issuable upon the exercise of this Warrant; and the Company shall so list on
each national securities exchange or automated quotation system, as the case may
be, and shall maintain such listing of, any other shares of capital stock of the
Company issuable upon the exercise of this Warrant if and so long as any shares
of the same class shall be listed on such national securities exchange or
automated quotation system.
(d) CERTAIN ACTIONS PROHIBITED. The Company will not, by amendment of
its charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, and (ii)
will take all such actions as may be necessary
<PAGE> 33
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable shares of Common Stock upon the exercise of this Warrant.
(e) SUCCESSORS AND ASSIGNS. This Warrant will be binding upon any
entity succeeding to the Company by merger, consolidation, or acquisition of all
or substantially all the Company's assets.
4. ANTIDILUTION PROVISIONS. During the Exercise Period, the Exercise Price
and the number of Warrant Shares shall be subject to adjustment from time to
time as provided in this Paragraph 4.
In the event that any adjustment of the Exercise Price as required herein
results in a fraction of a cent, such Exercise Price shall be rounded up to the
nearest cent.
(a) ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES UPON ISSUANCE OF
COMMON STOCK. Except as otherwise provided in Paragraphs 4(c) and 4(e) hereof,
if and whenever on or after May 31, 2001, the Company issues or sells, or in
accordance with Paragraph 4(b) hereof is deemed to have issued or sold, any
shares of Common Stock for no consideration or for a consideration per share
(before deduction of reasonable expenses or commissions or underwriting
discounts or allowances in connection therewith) less than the Exercise Price in
effect on the date of issuance (or deemed issuance) of such Common Stock (a
"Dilutive Issuance"), then immediately upon the Dilutive Issuance, the Exercise
Price will be reduced to a price determined by multiplying the Exercise Price in
effect immediately prior to the Dilutive Issuance by a fraction, (i) the
numerator of which is an amount equal to the sum of (x) the number of shares of
Common Stock actually outstanding immediately prior to the Dilutive Issuance,
plus (y) the quotient of the aggregate consideration, calculated as set forth in
Paragraph 4(b) hereof, received by the Company upon such Dilutive Issuance
divided by the Exercise Price in effect immediately prior to the Dilutive
Issuance, and (ii) the denominator of which is the total number of shares of
Common Stock Deemed Outstanding (as defined below) immediately after the
Dilutive Issuance.
(b) EFFECT ON EXERCISE PRICE OF CERTAIN EVENTS. For purposes of
determining the adjusted Exercise Price under Paragraph 4(a) hereof, the
following will be applicable:
(i) ISSUANCE OF RIGHTS OR OPTIONS. If the Company in any manner
issues or grants any warrants, rights or options, whether or not immediately
exercisable, to subscribe for or to purchase Common Stock or other securities
convertible into or exchangeable for Common Stock ("Convertible Securities")
(such warrants, rights and options to purchase Common Stock or Convertible
Securities are hereinafter referred to as "Options") and the price per share for
which Common Stock is issuable upon the exercise of such Options is less than
the Exercise Price on the date of issuance or grant of such Options, then the
maximum total number of shares of Common Stock issuable upon the exercise of all
such Options will, as of the date of the issuance or grant of such Options, be
deemed to be outstanding and to have been issued and sold by the Company for
such price per share. For purposes of the preceding sentence, the "price per
share for which Common Stock is issuable upon the exercise of such Options" is
determined by dividing (i) the total amount, if any, received or receivable by
the Company as consideration for the issuance or granting
5
<PAGE> 34
of all such Options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise of all such
Options, plus, in the case of Convertible Securities issuable upon the exercise
of such Options, the minimum aggregate amount of additional consideration
payable upon the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the exercise of all such Options
(assuming full conversion of Convertible Securities, if applicable). No further
adjustment to the Exercise Price will be made upon the actual issuance of such
Common Stock upon the exercise of such Options or upon the conversion or
exchange of Convertible Securities issuable upon exercise of such Options.
(ii) ISSUANCE OF CONVERTIBLE SECURITIES. If the Company in any
manner issues or sells any Convertible Securities, whether or not immediately
convertible (other than where the same are issuable upon the exercise of
Options) and the price per share for which Common Stock is issuable upon such
conversion or exchange is less than the Exercise Price on the date of issuance
of such Convertible Securities, then the maximum total number of shares of
Common Stock issuable upon the conversion or exchange of all such Convertible
Securities will, as of the date of the issuance of such Convertible Securities,
be deemed to be outstanding and to have been issued and sold by the Company for
such price per share. For the purposes of the preceding sentence, the "price per
share for which Common Stock is issuable upon such conversion or exchange" is
determined by dividing (i) the total amount, if any, received or receivable by
the Company as consideration for the issuance or sale of all such Convertible
Securities, plus the minimum aggregate amount of additional consideration, if
any, payable to the Company upon the conversion or exchange thereof at the time
such Convertible Securities first become convertible or exchangeable, by (ii)
the maximum total number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities. No further adjustment to the
Exercise Price will be made upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities.
(iii) CHANGE IN OPTION PRICE OR CONVERSION RATE. If there is a
change at any time in (i) the amount of additional consideration payable to the
Company upon the exercise of any Options; (ii) the amount of additional
consideration, if any, payable to the Company upon the conversion or exchange of
any Convertible Securities; or (iii) the rate at which any Convertible
Securities are convertible into or exchangeable for Common Stock (other than
under or by reason of provisions designed to protect against dilution), the
Exercise Price in effect at the time of such change will be readjusted to the
Exercise Price which would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed additional
consideration or changed conversion rate, as the case may be, at the time
initially granted, issued or sold.
(iv) TREATMENT OF EXPIRED OPTIONS AND UNEXERCISED CONVERTIBLE
SECURITIES. If, in any case, the total number of shares of Common Stock issuable
upon exercise of any Option or upon conversion or exchange of any Convertible
Securities is not, in fact, issued and the rights to exercise such Option or to
convert or exchange such Convertible Securities shall have expired or
terminated, the Exercise Price then in effect will be readjusted to the Exercise
Price which would have been in effect at the time of such expiration or
termination had such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or
<PAGE> 35
termination (other than in respect of the actual number of shares of Common
Stock issued upon exercise or conversion thereof), never been issued.
(v) CALCULATION OF CONSIDERATION RECEIVED. If any Common Stock,
Options or Convertible Securities are issued, granted or sold for cash, the
consideration received therefor for purposes of this Warrant will be the amount
received by the Company therefor, before deduction of reasonable commissions,
underwriting discounts or allowances or other reasonable expenses paid or
incurred by the Company in connection with such issuance, grant or sale. In case
any Common Stock, Options or Convertible Securities are issued or sold for a
consideration part or all of which shall be other than cash, the amount of the
consideration other than cash received by the Company will be the fair value of
such consideration, except where such consideration consists of securities, in
which case the amount of consideration received by the Company will be the
Market Price thereof as of the date of receipt. In case any Common Stock,
Options or Convertible Securities are issued in connection with any acquisition,
merger or consolidation in which the Company is the surviving corporation, the
amount of consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving corporation as is
attributable to such Common Stock, Options or Convertible Securities, as the
case may be. The fair value of any consideration other than cash or securities
will be determined in good faith by the Board of Directors of the Company.
(vi) EXCEPTIONS TO ADJUSTMENT OF EXERCISE PRICE. No adjustment to
the Exercise Price will be made (i) upon the exercise of any warrants, options
or convertible securities granted, issued and outstanding on the date of
issuance of this Warrant; (ii) upon the grant, purchase or exercise of any stock
or options which may hereafter be granted, purchased or exercised under any
employee benefit plan of the Company now existing or to be implemented in the
future, so long as the issuance of such stock or options is approved by a
majority of the independent members of the Board of Directors of the Company or
a majority of the members of a committee of independent directors established
for such purpose; (iii) upon the exercise of the Warrants; (iv) upon the
issuance of common stock pursuant to a bona fide, underwritten public offering
registered under the Securities Act pursuant to a registration statement; (v)
upon the issuance of common stock to independent contractors or consultants
pursuant to written agreements existing on the date hereof; (vi) upon the
issuance of up to 500,000 shares of Common Stock (or securities convertible into
or exercisable for Common Stock) to independent contractors or consultants at a
price per share of not less than eighty-five percent (85%) of the Market Price
(as defined herein) of the Common Stock on the date of issuance; and (vii) upon
the issuance of common stock pursuant to or in connection with a strategic
alliance, partnering relationship, or a bona fide business acquisition of or by
the Company, whether by merger, joint venture, consolidation, sale of assets,
sale or exchange of stock or otherwise.
(c) SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Company at any
time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise)
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<PAGE> 36
the shares of Common Stock acquirable hereunder into a smaller number of shares,
then, after the date of record for effecting such combination, the Exercise
Price in effect immediately prior to such combination will be proportionately
increased.
(d) ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Paragraph 4, the number of
shares of Common Stock issuable upon exercise of this Warrant shall be adjusted
by multiplying a number equal to the Exercise Price in effect immediately prior
to such adjustment by the number of shares of Common Stock issuable upon
exercise of this Warrant immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.
(e) CONSOLIDATION, MERGER OR SALE. In case of any consolidation of the
Company with, or merger of the Company into any other corporation, or in case of
any sale or conveyance of all or substantially all of the assets of the Company
other than in connection with a plan of complete liquidation of the Company,
then as a condition of such consolidation, merger or sale or conveyance,
adequate provision will be made whereby the holder of this Warrant will have the
right to acquire and receive upon exercise of this Warrant in lieu of the shares
of Common Stock immediately theretofore acquirable upon the exercise of this
Warrant, such shares of stock, securities or assets as may be issued or payable
with respect to or in exchange for the number of shares of Common Stock
immediately theretofore acquirable and receivable upon exercise of this Warrant
had such consolidation, merger or sale or conveyance not taken place. In any
such case, the Company will make appropriate provision to insure that the
provisions of this Paragraph 4 hereof will thereafter be applicable as nearly as
may be in relation to any shares of stock or securities thereafter deliverable
upon the exercise of this Warrant. The Company will not effect any
consolidation, merger or sale or conveyance unless prior to the consummation
thereof, the successor or acquiring entity (if other than the Company) and, if
an entity different from the successor or acquiring entity, the entity whose
capital stock or assets the holders of the Common Stock of the Company are
entitled to receive as a result of such consolidation, merger or sale or
conveyance assumes by written instrument the obligations under this Warrant
(including under this Paragraph 4) and the obligations to deliver to the holder
of this Warrant such shares of stock, securities or assets as, in accordance
with the foregoing provisions, the holder may be entitled to acquire.
(f) DISTRIBUTION OF ASSETS. In case the Company shall declare or make
any distribution of its assets (including cash) to holders of Common Stock as a
partial liquidating dividend, by way of return of capital or otherwise, then,
after the date of record for determining stockholders entitled to such
distribution, but prior to the date of distribution, the holder of this Warrant
shall be entitled upon exercise of this Warrant for the purchase of any or all
of the shares of Common Stock subject hereto, to receive the amount of such
assets which would have been payable to the holder had such holder been the
holder of such shares of Common Stock on the record date for the determination
of stockholders entitled to such distribution.
(g) NOTICE OF ADJUSTMENT. Upon the occurrence of any event which
requires any adjustment of the Exercise Price, then, and in each such case, the
Company shall give notice thereof to the holder of this Warrant, which notice
shall state the Exercise Price resulting from such adjustment and the increase
or decrease in the number of Warrant Shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of calculation and the
facts upon
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<PAGE> 37
which such calculation is based. Such calculation shall be certified by the
chief financial officer of the Company.
(h) MINIMUM ADJUSTMENT OF EXERCISE PRICE. No adjustment of the Exercise
Price shall be made in an amount of less than 1% of the Exercise Price in effect
at the time such adjustment is otherwise required to be made, but any such
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.
(i) NO FRACTIONAL SHARES. No fractional shares of Common Stock are to
be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Market Price of a share of Common
Stock on the date of such exercise.
(j) OTHER NOTICES. In case at any time:
(i) the Company shall declare any dividend upon the Common Stock
payable in shares of stock of any class or make any other distribution
(including dividends or distributions payable in cash out of retained earnings)
to the holders of the Common Stock;
(ii) the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;
(iii) there shall be any capital reorganization of the Company, or
reclassification of the Common Stock, or consolidation or merger of the Company
with or into, or sale of all or substantially all its assets to, another
corporation or entity; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive
any such dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also specify the date
on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock
or other securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least ten (10)
Trading Days prior to the record date or the date on which the Company's books
are closed in respect thereto. Failure to give any such
9
<PAGE> 38
notice or any defect therein shall not affect the validity of the proceedings
referred to in clauses (i), (ii), (iii) and (iv) above.
(k) CERTAIN EVENTS. If any event occurs of the type contemplated by
the adjustment provisions of this Paragraph 4 but not expressly provided for by
such provisions, the Company will give notice of such event as provided in
Paragraph 4(g) hereof, and the Company's Board of Directors will make an
appropriate adjustment in the Exercise Price and the number of shares of Common
Stock acquirable upon exercise of this Warrant so that the rights of the Holder
shall be neither enhanced nor diminished by such event.
(l) CERTAIN DEFINITIONS.
(i) "COMMON STOCK DEEMED OUTSTANDING" shall mean the number of
shares of Common Stock actually outstanding (not including shares of Common
Stock held in the treasury of the Company), plus (x) pursuant to Paragraph
4(b)(i) hereof, the maximum total number of shares of Common Stock issuable upon
the exercise of Options, as of the date of such issuance or grant of such
Options, if any, and (y) pursuant to Paragraph 4(b)(ii) hereof, the maximum
total number of shares of Common Stock issuable upon conversion or exchange of
Convertible Securities, as of the date of issuance of such Convertible
Securities, if any.
(ii) "MARKET PRICE," as of any date, (i) means the average of the
last reported sale prices for the shares of Common Stock on Nasdaq for the five
(5) Trading Days immediately preceding such date as reported by Bloomberg or an
equivalent reliable reporting service mutually acceptable to and hereafter
designated by the holder of this Warrant and the Company, or (ii) if Nasdaq is
not the principal trading market for the shares of Common Stock, the average of
the last reported sale prices on the principal trading market for the Common
Stock during the same period as reported by Bloomberg, or (iii) if market value
cannot be calculated as of such date on any of the foregoing bases, the Market
Price shall be the fair market value as reasonably determined in good faith by
(a) the Board of Directors of the Corporation or (b) at the option of a
majority-in-interest of the holders of the outstanding Warrants, by an
independent investment bank of nationally recognized standing in the valuation
of businesses similar to the business of the corporation. The manner of
determining the Market Price of the Common Stock set forth in the foregoing
definition shall apply with respect to any other security in respect of which a
determination as to market value must be made hereunder.
(iii) "COMMON STOCK," for purposes of this Paragraph 4, includes
the Common Stock, par value $0.001 per share, and any additional class of stock
of the Company having no preference as to dividends or distributions on
liquidation, provided that the shares purchasable pursuant to this Warrant shall
include only shares of Common Stock, par value $0.001 per share, in respect of
which this Warrant is exercisable, or shares resulting from any subdivision or
combination of such Common Stock, or in the case of any reorganization,
reclassification, consolidation, merger, or sale of the character referred to in
Paragraph 4(e) hereof, the stock or other securities or property provided for in
such Paragraph.
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<PAGE> 39
5. ISSUE TAX. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.
6. NO RIGHTS OR LIABILITIES AS A STOCKHOLDER. This Warrant shall not
entitle the holder hereof to any voting rights, rights to receive dividends or
other rights as a stockholder of the Company until the holder shall have
exercised this Warrant. No provision of this Warrant, in the absence of
affirmative action by the holder hereof to purchase Warrant Shares, and no mere
enumeration herein of the rights or privileges of the holder hereof, shall give
rise to any liability of such holder for the Exercise Price or as a shareholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.
7. TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT.
(a) RESTRICTION ON TRANSFER. This Warrant and the rights granted to the
holder hereof are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the form attached
hereto, at the office or agency of the Company referred to in Paragraph 7(e)
below, provided, however, that any transfer or assignment shall be subject to
the conditions set forth in Paragraph 7(f) hereof and to the applicable
provisions of the Securities Purchase Agreement. Until due presentment for
registration of transfer on the books of the Company, the Company may treat the
registered holder hereof as the owner and holder hereof for all purposes, and
the Company shall not be affected by any notice to the contrary. Notwithstanding
anything to the contrary contained herein, the registration rights described in
Paragraph 8 are assignable only in accordance with the provisions of that
certain Registration Rights Agreement, dated as of May 31, 2000, by and among
the Company and the other signatories thereto (the "Registration Rights
Agreement").
(b) WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This Warrant is
exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Company referred to in Paragraph 7(e) below, for new Warrants of
like tenor representing in the aggregate the right to purchase the number of
shares of Common Stock which may be purchased hereunder, each of such new
Warrants to represent the right to purchase such number of shares as shall be
designated by the holder hereof at the time of such surrender.
(c) REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
(d) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of this
Warrant in connection with any transfer, exchange, or replacement as provided in
this Paragraph 7,
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<PAGE> 40
this Warrant shall be promptly canceled by the Company. The Company shall pay
all taxes (other than securities transfer taxes) and all other expenses (other
than legal expenses, if any, incurred by the Holder or transferees) and charges
payable in connection with the preparation, execution, and delivery of Warrants
pursuant to this Paragraph 7.
(e) REGISTER. The Company shall maintain, at its principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof), a register for this Warrant, in which the Company
shall record the name and address of the person in whose name this Warrant has
been issued, as well as the name and address of each transferee and each prior
owner of this Warrant.
(f) EXERCISE OR TRANSFER WITHOUT REGISTRATION. If, at the time of the
surrender of this Warrant in connection with any exercise, transfer, or exchange
of this Warrant, this Warrant (or, in the case of any exercise, the Warrant
Shares issuable hereunder), shall not be registered under the Securities Act and
under applicable state securities or blue sky laws, the Company may require, as
a condition of allowing such exercise, transfer, or exchange, (i) that the
holder or transferee of this Warrant, as the case may be, furnish to the Company
a written opinion of counsel, which opinion and counsel are acceptable to the
Company, to the effect that such exercise, transfer, or exchange may be made
without registration under said Act and under applicable state securities or
blue sky laws or (ii)(A) that the holder or transferee execute and deliver to
the Company an investment letter in form and substance acceptable to the Company
and consistent with the representations and warranties contained in Sections
2(a)-(d) of the Securities Purchase Agreement and (B) that the transferee be an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act; provided that no such opinion, letter or status as an "accredited investor"
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act. The first holder of this Warrant, by taking and holding the
same, represents to the Company that such holder is acquiring this Warrant for
investment and not with a view to the distribution thereof.
8. REGISTRATION RIGHTS. The initial holder of this Warrant (and certain
assignees thereof) is entitled to the benefit of such registration rights in
respect of the Warrant Shares as are set forth in Section 2 of the Registration
Rights Agreement.
9. NOTICES. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 13155 Noel Road, Suite
800, Dallas, Texas 75240, Attention: Chief Financial Officer, or at such other
address as shall have been furnished to the holder of this Warrant by notice
from the Company. Any such notice, request, or other communication may be sent
by facsimile, but shall in such case be subsequently confirmed by a
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<PAGE> 41
writing personally delivered or sent by certified or registered mail or by
recognized overnight mail courier as provided above. All notices, requests, and
other communications shall be deemed to have been given either at the time of
the receipt thereof by the person entitled to receive such notice at the address
of such person for purposes of this Paragraph 9, or, if mailed by registered or
certified mail or with a recognized overnight mail courier upon deposit with the
United States Post Office or such overnight mail courier, if postage is prepaid
and the mailing is properly addressed, as the case may be.
10. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN THE STATE OF DELAWARE (WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS). BOTH PARTIES IRREVOCABLY CONSENT TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS AND THE STATE COURTS LOCATED IN
DELAWARE WITH RESPECT TO ANY SUIT OR PROCEEDING BASED ON OR ARISING UNDER THIS
AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY AND IRREVOCABLY AGREE THAT ALL
CLAIMS IN RESPECT OF SUCH SUIT OR PROCEEDING MAY BE DETERMINED IN SUCH COURTS.
BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER.
11. MISCELLANEOUS.
(a) AMENDMENTS. This Warrant and any provision hereof may only be
amended by an instrument in writing signed by the Company and the holder hereof.
(b) DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.
(c) CASHLESS EXERCISE. Notwithstanding anything to the contrary
contained in this Warrant, if the resale of the Warrant Shares by the holder is
not then registered pursuant to an effective registration statement under the
Securities Act, this Warrant may be exercised by presentation and surrender of
this Warrant to the Company at its principal executive offices with a written
notice of the holder's intention to effect a cashless exercise, including a
calculation of the number of shares of Common Stock to be issued upon such
exercise in accordance with the terms hereof (a "Cashless Exercise"). In the
event of a Cashless Exercise, in lieu of paying the Exercise
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<PAGE> 42
Price in cash, the holder shall surrender this Warrant for that number of shares
of Common Stock determined by multiplying the number of Warrant Shares to which
it would otherwise be entitled by a fraction, the numerator of which shall be
the difference between the then current Market Price per share of the Common
Stock and the Exercise Price, and the denominator of which shall be the then
current Market Price per share of Common Stock.
(d) REMEDIES. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Warrant will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Warrant, that the
holder shall be entitled, in addition to all other available remedies at law or
in equity, to an injunction or injunctions restraining, preventing or curing any
breach of this Warrant and to enforce specifically the terms and provisions
thereof, without the necessity of showing economic loss and without any bond or
other security being required.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 43
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
THE VIALINK COMPANY
By: /s/ J. ANDREW KERNER
-------------------------------------
J. Andrew Kerner
Senior Vice President of Finance and
Chief Financial Officer
Dated as of May 31, 2000
15
<PAGE> 44
FORM OF EXERCISE AGREEMENT
Dated: ________ __, 200_
To: The viaLink Company
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant:
(a) in cash or by certified or official bank check in the amount of
$________;
(b) by surrender to the Company of ________shares of Common Stock
having an Aggregate Exchange Value (as defined in the Warrant) equal to
$________; or
(c) if the resale of such Common Stock by the undersigned is not
currently registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended, by effecting a Cashless Exercise by
surrender of a portion of the Warrant calculated in accordance with Section
11(c) of the Warrant.
The Company shall electronically transmit the Common Stock issuable
pursuant to this Exercise Agreement to the account of the undersigned or its
nominee with DTC through its Deposit Withdrawal Agent Commission system ("DWAC
Transfer").
Name of DTC Prime Broker:___________________________________________
Account Number:____________________________________________________
In lieu of receiving shares of Common Stock issuable pursuant to this
Exercise Agreement by way of a DWAC Transfer, the undersigned hereby
requests that the Company issue a certificate or certificates for the
number of shares of Common Stock set forth below in the name(s)
specified immediately below or, if additional space is necessary, on
an attachment hereto:
Name:_______________________________________________________________
Address:____________________________________________________________
If said number of shares of Common Stock shall not be all the shares purchasable
under the within Warrant, a new Warrant is to be issued in the name of said
undersigned covering the balance of the shares purchasable thereunder less any
fraction of a share paid in cash.
Signature:________________________________________
Note: The above signature should correspond exactly
with the name on the face of the within
Warrant.
16
<PAGE> 45
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all the rights of the undersigned under the within Warrant, with
respect to the number of shares of Common Stock covered thereby set forth
hereinbelow, to:
Name of Assignee Address No of Shares
---------------- ------- ------------
, and hereby irrevocably constitutes and appoints ______________
________________________ as agent and attorney-in-fact to transfer said Warrant
on the books of the within-named corporation, with full power of substitution in
the premises.
Dated: ________ __, 200_
In the presence of:
-------------------------
Name: __________________________________
Signature: __________________________________
Title of Signing Officer or Agent (if any):
Address: __________________________________
__________________________________
Note: The above signature should
correspond exactly with the name on
the face of the within Warrant.
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<PAGE> 46
Exhibit 4.3
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of May 31,
2000, by and among The viaLink Company, a Delaware corporation, with its
principal executive offices located at 13800 Benson Road, Edmond, Oklahoma
73013-6417 (the "COMPANY"), and each of the undersigned (together with their
respective affiliates and any assignee or transferee of all of their respective
rights hereunder, the "INITIAL INVESTORS").
WHEREAS:
A. In connection with the Securities Purchase Agreement by and among
the parties hereto of even date herewith (the "SECURITIES PURCHASE AGREEMENT"),
the Company has agreed, upon the terms and subject to the conditions contained
therein, to issue and sell to the Initial Investors units (the "UNITS"), each
Unit consisting of (i) one share of the Company's common stock, par value $0.001
per share (the "COMMON STOCK"); and (ii) a warrant to purchase eight-tenths (.8)
of a share of Common Stock upon the terms and conditions set forth in the
Warrants dated May 31, 2000 (the "WARRANTS"); and
B. To induce the Initial Investors to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"1933 ACT"), and applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Initial Investors hereby agree as follows:
<PAGE> 47
1. DEFINITIONS.
a. As used in this Agreement, the following terms shall have
the following meanings:
(i) "INVESTORS" means the Initial Investors and any
transferee or assignee who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 hereof.
(ii) "REGISTER," "REGISTERED," and "REGISTRATION" refer to
a registration effected by preparing and filing a Registration Statement or
Statements in compliance with the 1933 Act and pursuant to Rule 415 under the
1933 Act or any successor rule providing for offering securities on a continuous
basis ("RULE 415"), and the declaration or ordering of effectiveness of such
Registration Statement by the United States Securities and Exchange Commission
(the "SEC").
(iii) "REGISTRABLE SECURITIES" means: (A) the Common Shares
issued pursuant to the Securities Purchase Agreement; (B) the Warrant Shares
issued or issuable upon exercise of or otherwise pursuant to the Warrants; and
(C) any shares of capital stock issued or issuable as a dividend on or in
exchange for or otherwise with respect to any of the foregoing.
(iv) "REGISTRATION STATEMENT(S)" means a registration
statement(s) of the Company under the 1933 Act.
b.Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Securities Purchase
Agreement.
2. REGISTRATION.
a. MANDATORY REGISTRATION. The Company shall prepare and, on
or prior to the date (the "FILING DATE") which is thirty (30) days after the
date of the closing under the Securities Purchase Agreement (the "CLOSING
DATE"), file with the SEC a Registration Statement on Form S-3 covering the
resale of the Registrable Securities, which Registration Statement, to the
extent allowable under the 1933 Act and the rules and regulations promulgated
thereunder (including Rule 416), shall state that such Registration Statement
also covers such indeterminate number of additional shares of Common Stock as
may become issuable upon exercise of or otherwise pursuant to the Warrants to
prevent dilution resulting from stock splits, stock dividends or similar
transactions. The number of shares of Common Stock initially included in such
Registration Statement shall be no less than the sum of (i) the aggregate number
of Common Shares issued pursuant to the Securities Purchase Agreement and (ii)
1,700,000 Warrant Shares issuable upon exercise of or otherwise pursuant to the
Warrants (based on the Exercise Price (as defined in the Warrants) then in
effect), without regard to any limitation on the Investor's ability to exercise
the Warrants. The Company acknowledges that the number of shares initially
included in the Registration Statement represents a good faith estimate of the
maximum number of shares issuable upon exercise of or otherwise pursuant to the
Warrants.
-2-
<PAGE> 48
b. UNDERWRITTEN OFFERING. If any offering pursuant to a
Registration Statement pursuant to Section 2(a) hereof involves an underwritten
offering, the Investors who hold a majority in interest of the Registrable
Securities subject to such underwritten offering, with the consent of a
majority-in-interest of the Initial Investors, shall have the right to select
one legal counsel and an investment banker or bankers and manager or managers to
administer the offering, which investment banker or bankers or manager or
managers shall be reasonably satisfactory to the Company. In the event that any
Investors elect not to participate in such underwritten offering, the
Registration Statement covering all of the Registrable Securities shall contain
appropriate plans of distribution reasonably satisfactory to the Investors
participating in such underwritten offering and the Investors electing not to
participate in such underwritten offering (including, without limitation, the
ability of non-participating Investors to sell from time to time at any time
during the effectiveness of such Registration Statement).
c. PAYMENTS BY THE COMPANY. The Company shall use its best
efforts to obtain effectiveness of the Registration Statement as soon as
practicable, but in any event not later than the one hundred twentieth (120th)
day after the Closing Date (the "REGISTRATION DEADLINE"). If (i) the
Registration Statement covering the Registrable Securities required to be filed
by the Company pursuant to Section 2(a) hereof is not declared effective by the
SEC by the Registration Deadline, or (ii) after the Registration Statement has
been declared effective by the SEC, sales of all of the Registrable Securities
cannot be made pursuant to the Registration Statement, or (iii) the Common Stock
is not listed or included for quotation on the Nasdaq National Market (the
"NNM"), the Nasdaq SmallCap Market (the "NASDAQ SMALLCAP"), the New York Stock
Exchange (the "NYSE") or the American Stock Exchange (the "AMEX") after being so
listed or included for quotation, then the Company will make payments to the
Investors in such amounts and at such times as shall be determined pursuant to
this Section 2(c) as partial relief for the damages to the Investors by reason
of any such delay in or reduction of their ability to sell the Registrable
Securities (which remedy shall not be exclusive of any other remedies available
at law or in equity). The Company shall pay to each holder of Registrable
Securities an amount equal to the aggregate purchase price paid for the Units by
such holder pursuant to the Securities Purchase Agreement ("AGGREGATE PURCHASE
PRICE"), multiplied by 0.0125, multiplied by the sum of: (i) the number of
months (prorated for partial months) after the Registration Deadline and prior
to the date the Registration Statement is declared effective by the SEC;
provided, however, that there shall be excluded from such period any delays
which are solely attributable to changes required by the Investors in the
Registration Statement with respect to information relating to the Investors,
including, without limitation, changes to the plan of distribution, or to the
failure of the Investors to conduct their review of the Registration Statement
pursuant to Section 3(h) below in a reasonably prompt manner; (ii) the number of
months (prorated for partial months) during the Registration Period (as defined
below) that sales of all of the Registrable Securities cannot be made pursuant
to the Registration Statement after the Registration Statement has been declared
effective (including, without limitation, when sales cannot be made by reason of
the Company's failure to properly supplement or amend the prospectus included
therein in accordance with the terms of this Agreement (including Section 3(b)
hereof or otherwise), but excluding any days during an Allowed Delay (as defined
in Section 3(f))); and (iii) the number of months (prorated for partial months)
that the Common Stock is not listed or included for quotation on the NNM, Nasdaq
SmallCap, NYSE or AMEX or that trading thereon is halted after the Registration
Statement has been declared effective. (For example, if the Registration
Statement becomes effective one (1)
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month after the Registration Deadline, the Company would pay $12,500 for each
$1,000,000 of Aggregate Purchase Price. If thereafter, sales could not be made
pursuant to the Registration Statement for an additional period of one (1)
month, the Company would pay an additional $12,500 for each $1,000,000 of
Aggregate Purchase Price.) Such amounts shall be paid in cash within ten (10)
days after the end of each period that gives rise to such obligation, provided
that, if any such period extends for more than thirty (30) days, interim
payments shall be made for each such thirty (30) day period.
d. PIGGY-BACK REGISTRATIONS. Subject to the last sentence of
this Section 2(d), if at any time prior to the expiration of the Registration
Period (as hereinafter defined) the Company shall determine to file with the SEC
a Registration Statement relating to an offering for its own account or the
account of others under the 1933 Act of any of its equity securities (other than
on Form S-4 or Form S-8 or their then equivalents relating to equity securities
to be issued solely in connection with any acquisition of any entity or business
or equity securities issuable in connection with stock option or other employee
benefit plans), the Company shall send to each Investor who is entitled to
registration rights under this Section 2(d) written notice of such determination
and, if within fifteen (15) days after the effective date of such notice, such
Investor shall so request in writing, the Company shall include in such
Registration Statement all or any part of the Registrable Securities such
Investor requests to be registered, except that if, in connection with any
underwritten public offering for the account of the Company the managing
underwriter(s) thereof shall impose a limitation on the number of shares of
Common Stock which may be included in the Registration Statement because, in
such underwriter(s)' judgment, marketing or other factors dictate such
limitation is necessary to facilitate public distribution, then the Company
shall be obligated to include in such Registration Statement only such limited
portion of the Registrable Securities with respect to which such Investor has
requested inclusion hereunder as the underwriter shall permit. Any exclusion of
Registrable Securities shall be made pro rata among the Investors seeking to
include Registrable Securities in proportion to the number of Registrable
Securities sought to be included by such Investors; provided, however, that the
Company shall not exclude any Registrable Securities unless the Company has
first excluded all outstanding securities, the holders of which are not entitled
by contract to inclusion of such securities in such Registration Statement or
are not entitled to pro rata inclusion with the Registrable Securities; and
provided, further, however, that, after giving effect to the immediately
preceding proviso, any exclusion of Registrable Securities shall be made pro
rata with holders of other securities having the contractual right to include
such securities in the Registration Statement other than holders of securities
entitled to inclusion of their securities in such Registration Statement by
reason of demand registration rights. No right to registration of Registrable
Securities under this Section 2(d) shall be construed to limit any registration
required under Section 2(a) hereof. If an offering in connection with which an
Investor is entitled to registration under this Section 2(d) is an underwritten
offering, then each Investor whose Registrable Securities are included in such
Registration Statement shall, unless otherwise agreed by the Company, offer and
sell such Registrable Securities in an underwritten offering using the same
underwriter or underwriters and, subject to the provisions of this Agreement, on
the same terms and conditions as other shares of Common Stock included in such
underwritten offering. Notwithstanding anything to the contrary set forth
herein, the registration rights of the Investors pursuant to this Section 2(d)
shall only be available in the event the Company fails to timely file, obtain
effectiveness or maintain
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effectiveness of any Registration Statement to be filed pursuant to Section 2(a)
in accordance with the terms of this Agreement.
e. ELIGIBILITY FOR FORM S-3. The Company represents and
warrants that it meets the registrant eligibility and transaction requirements
for the use of Form S-3 for registration of the sale by the Initial Investors
and any other Investors of the Registrable Securities and the Company shall file
all reports required to be filed by the Company with the SEC in a timely manner
so as to maintain such eligibility for the use of Form S-3.
3. OBLIGATIONS OF THE COMPANY.
In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:
a. The Company shall prepare promptly, and file with the SEC
as soon as practicable after the Closing Date (but in no event later than the
Filing Date), a Registration Statement with respect to the number of Registrable
Securities provided in Section 2(a), and thereafter use its best efforts to
cause such Registration Statement relating to Registrable Securities to become
effective as soon as possible after such filing (but in no event later than the
Registration Deadline), and keep the Registration Statement effective pursuant
to Rule 415 at all times until such date as is the earlier of (i) the date on
which all of the Registrable Securities have been sold and (ii) the date on
which the Registrable Securities (in the reasonable opinion of counsel to the
Initial Investors) may be immediately sold to the public without registration or
restriction (including without limitation as to volume by each holder thereof)
under the 1933 Act (the "REGISTRATION PERIOD"), which Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein) shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances under which such statements
were made, not misleading.
b. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statements and the prospectus used in connection with the
Registration Statements as may be necessary to keep the Registration Statements
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company covered by the Registration Statements
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statements. In the event that on any
trading day (the "REGISTRATION TRIGGER DATE") the number of shares available
under the Registration Statement filed pursuant to this Agreement is
insufficient to cover all of the Registrable Securities issued or issuable
pursuant to the Securities Purchase Agreement and upon exercise of or otherwise
pursuant to the Warrants, the Company shall amend the Registration Statement, or
file a new Registration Statement (on the short form available therefore, if
applicable), or both, so as to cover all of the Registrable Securities so issued
or issuable pursuant to the Securities Purchase Agreement as of the Registration
Trigger Date, in each case, as soon as practicable, but in any event within
twenty (20) business days
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after the necessity therefor arises (based on the market price of the Common
Stock and other relevant factors on which the Company reasonably elects to
rely). The Company shall use its best efforts to cause such amendment and/or new
Registration Statement to become effective as soon as practicable following the
filing thereof, but in any event within sixty (60) days of the Registration
Trigger Date. The provisions of Section 2(c) above shall be applicable with
respect to the Company's obligations under this Section 3(b).
c. The Company shall furnish to each Investor whose
Registrable Securities are included in a Registration Statement and its legal
counsel (i) promptly after the same is prepared and publicly distributed, filed
with the SEC, or received by the Company, one copy of each Registration
Statement and any amendment thereto, each preliminary prospectus and prospectus
and each amendment or supplement thereto, and, in the case of the Registration
Statement referred to in Section 2(a), each letter written by or on behalf of
the Company to the SEC or the staff of the SEC, and each item of correspondence
from the SEC or the staff of the SEC, in each case relating to such Registration
Statement (other than any portion of any thereof which contains information for
which the Company has sought confidential treatment), and (ii) such number of
copies of a prospectus, including a preliminary prospectus, and all amendments
and supplements thereto and such other documents as such Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Investor. The Company will immediately notify each Investor by
facsimile of the effectiveness of each Registration Statement or any
post-effective amendment. The Company will promptly respond to any and all
comments received from the SEC, with a view towards causing each Registration
Statement or any amendment thereto to be declared effective by the SEC as soon
as practicable and shall file an acceleration request as soon as practicable
following the resolution or clearance of all SEC comments or, if applicable,
following notification by the SEC that any such Registration Statement or any
amendment thereto will not be subject to review.
d. The Company shall use reasonable efforts to (i) register
and qualify the Registrable Securities covered by the Registration Statements
under such other securities or "blue sky" laws of such jurisdictions in the
United States as the Investors who hold a majority in interest of the
Registrable Securities being offered reasonably request, (ii) prepare and file
in those jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (a) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (b) subject itself
to general taxation in any such jurisdiction, (c) file a general consent to
service of process in any such jurisdiction, (d) provide any undertakings that
cause the Company undue expense or burden, or (e) make any change in its charter
or bylaws, which in each case the Board of Directors of the Company determines
to be contrary to the best interests of the Company and its stockholders.
e. In the event Investors who hold a majority-in-interest of
the Registrable Securities being offered in the offering (with the approval of a
majority-in-interest of the Initial Investors) select underwriters for the
offering, the Company shall enter into and perform its
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obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the underwriters of such offering.
f. As promptly as practicable after becoming aware of such
event, the Company shall notify each Investor of the happening of any event, of
which the Company has knowledge, as a result of which the prospectus included in
any Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which such statements were made, not misleading, and use its best efforts
promptly to prepare a supplement or amendment to any Registration Statement to
correct such untrue statement or omission, and deliver such number of copies of
such supplement or amendment to each Investor as such Investor may reasonably
request; provided that, for not more than ten (10) consecutive calendar days (or
a total of not more than thirty (30) calendar days in any twelve (12) month
period), the Company may delay the disclosure of material non-public information
concerning the Company (as well as prospectus or Registration Statement
updating) the disclosure of which at the time is not, in the good faith opinion
of the Company, in the best interests of the Company (an "ALLOWED DELAY");
provided, further, that the Company shall promptly (i) notify the Investors in
writing of the existence of (but in no event, without the prior written consent
of an Investor, shall the Company disclose to such Investor any of the facts or
circumstances regarding) material non-public information giving rise to an
Allowed Delay and (ii) advise the Investors in writing to cease all sales under
such Registration Statement until the end of the Allowed Delay. Upon expiration
of the Allowed Delay, the Company shall again be bound by the first sentence of
this Section 3(f) with respect to the information giving rise thereto.
g. The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of any
Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest possible moment and to notify each
Investor who holds Registrable Securities being sold (or, in the event of an
underwritten offering, the managing underwriters) of the issuance of such order
and the resolution thereof.
h. The Company shall permit a single firm of counsel
designated by the Initial Investors to review such Registration Statement and
all amendments and supplements thereto (as well as all requests for acceleration
or effectiveness thereof) a reasonable period of time (but not more than three
(3) business days) prior to their filing with the SEC, and not file any document
in a form to which such counsel reasonably objects and will not request
acceleration of such Registration Statement without prior notice to such
counsel. The sections of such Registration Statement (or any amendment or
supplement thereto) covering information with respect to the Investors, the
Investor's beneficial ownership of securities of the Company or the Investors
intended method of disposition of Registrable Securities shall conform to the
information provided to the Company by each of the Investors.
i. The Company shall make generally available (including
through the SEC's website) to its security holders as soon as practicable, but
not later than ninety (90) days after the close of the period covered thereby,
an earnings statement (in form complying with the provisions
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of Rule 158 under the 1933 Act) covering a twelve-month period beginning not
later than the first day of the Company's fiscal quarter next following the
effective date of the Registration Statement.
j. In the event of an underwritten offering, at the request of
any Investor, the Company shall furnish, on the date that Registrable Securities
are delivered to an underwriter for sale in connection with any Registration
Statement, a signed counterpart of (i) an opinion, dated as of such date, from
counsel representing the Company acceptable to such underwriter for purposes of
such Registration Statement, in form, scope and substance as is customarily
given in an underwritten public offering and (ii) a letter, dated such date,
from the Company's independent certified public accountants in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering.
k. The Company shall make available for inspection by (i) any
Investor, (ii) any underwriter participating in any disposition pursuant to a
Registration Statement, (iii) one firm of attorneys and one firm of accountants
or other agents retained by the Initial Investors, (iv) one firm of attorneys
and one firm of accountants or other agents retained by all other Investors, and
(v) one firm of attorneys retained by all such underwriters (collectively, the
"INSPECTORS") all pertinent financial and other records, and pertinent corporate
documents and properties of the Company (collectively, the "RECORDS"), as shall
be reasonably deemed necessary by each Inspector to enable each Inspector to
exercise its due diligence responsibility, and cause the Company's officers,
directors and employees to supply all information which any Inspector may
reasonably request for purposes of such due diligence; provided, however, that
each Inspector shall hold in confidence and shall not make any disclosure
(except to an Investor) of any Record or other information which the Company
determines in good faith to be confidential, and of which determination the
Inspectors are so notified, unless (a) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any Registration
Statement, (b) the release of such Records is ordered pursuant to a subpoena or
other order from a court or government body of competent jurisdiction, or (c)
the information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement. The
Company shall not be required to disclose any confidential information in such
Records to any Inspector until and unless such Inspector shall have entered into
confidentiality agreements (in form and substance satisfactory to the Company)
with the Company with respect thereto, substantially in the form of this Section
3(k). Each Investor agrees that it shall, upon learning that disclosure of such
Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. Nothing herein (or in any other confidentiality agreement between
the Company and any Investor) shall be deemed to limit the Investor's ability to
sell Registrable Securities in a manner which is otherwise consistent with
applicable laws and regulations.
l. The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally
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available to the public other than by disclosure in violation of this or any
other agreement. The Company agrees that it shall, upon learning that disclosure
of such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to such Investor prior to making such disclosure, and allow the Investor,
at its expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, such information.
m. The Company shall (i) cause all the Registrable Securities
covered by the Registration Statement to be listed on each national securities
exchange on which securities of the same class or series issued by the Company
are then listed, if any, if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (ii) to the extent the securities
of the same class or series are not then listed on a national securities
exchange, secure the designation and quotation of all the Registrable Securities
covered by the Registration Statement on the NNM or, if not eligible for the
NNM, on the Nasdaq SmallCap and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register with the
National Association of Securities Dealers, Inc. ("NASD") as such with respect
to such Registrable Securities.
n. The Company shall provide a transfer agent and registrar,
which may be a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement.
o. The Company shall cooperate with the Investors who hold
Registrable Securities being offered and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to such Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
managing underwriter or underwriters, if any, or the Investors may reasonably
request and registered in such names as the managing underwriter or
underwriters, if any, or the Investors may request, and, within three (3)
business days after a Registration Statement which includes Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and shall
cause legal counsel selected by the Company to deliver, to the transfer agent
for the Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such Registration Statement) an instruction in the
form attached hereto as EXHIBIT 1 and an opinion of such counsel in the form
attached hereto as EXHIBIT 2.
p. At the request of the holders of a majority-in-interest of
the Registrable Securities, the Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to a
Registration Statement and any prospectus used in connection with the
Registration Statement as may be necessary in order to change the plan of
distribution set forth in such Registration Statement.
q. Except for the holders listed in SCHEDULE 3(q), the Company
shall not, and shall not agree to, allow the holders of any securities of the
Company to include any of their securities in any Registration Statement under
Section 2(a) hereof or any amendment or supplement thereto under Section 3(b)
hereof without the consent of the holders of a majority-in-interest of the
Registrable Securities. In addition, the Company shall not offer any securities
for its own account
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or the account of others in any Registration Statement under Section 2(a) hereof
or any amendment or supplement thereto under Section 3(b) hereof without the
consent of the holders of a majority-in-interest of the Registrable Securities.
r. The Company shall take all other reasonable actions
necessary to expedite and facilitate disposition by the Investors of Registrable
Securities pursuant to a Registration Statement.
s. The Company shall comply with all applicable laws related
to a Registration Statement and offering and sale of securities and all
applicable rules and regulations of governmental authorities in connection
therewith (including without limitation the 1933 Act and the 1934 Act and the
rules and regulations promulgated by the SEC).
4. OBLIGATIONS OF THE INVESTORS.
In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:
a. It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect to
the Registrable Securities of a particular Investor that such Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration
of such Registrable Securities and shall execute such documents in connection
with such registration as the Company may reasonably request. At least five (5)
business days prior to the first anticipated filing date of the Registration
Statement, the Company shall notify each Investor of the information the Company
requires from each such Investor.
b. Each Investor, by such Investor's acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statements hereunder, unless such Investor has notified the Company
in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from the Registration Statements.
c. In the event Investors holding a majority-in-interest of
the Registrable Securities being registered (with the approval of the Initial
Investors) determine to engage the services of an underwriter, each Investor
agrees to enter into and perform such Investor's obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
managing underwriter of such offering and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of the
Registrable Securities, unless such Investor has notified the Company in writing
of such Investor's election to exclude all of such Investor's Registrable
Securities from such Registration Statement.
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d. Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 3(f)
or 3(g), such Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(f) or 3(g) and, if so directed by
the Company, such Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in such Investor's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.
e. No Investor may participate in any underwritten
registration hereunder unless such Investor (i) agrees to sell such Investor's
Registrable Securities on the basis provided in any underwriting arrangements in
usual and customary form entered into by the Company, (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements, and (iii) agrees to pay its pro rata share of all
underwriting discounts and commissions and any expenses in excess of those
payable by the Company pursuant to Section 5 below.
5. EXPENSES OF REGISTRATION.
All expenses, other than underwriting discounts and commissions,
incurred in connection with registrations, filings or qualifications pursuant to
Sections 2 and 3, including, without limitation, all registration, listing and
qualification fees, printers and accounting fees and the fees and disbursements
of counsel for the Company, shall be borne by the Company.
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
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a. To the extent permitted by law, the Company will indemnify,
hold harmless and defend (i) each Investor who holds such Registrable
Securities, (ii) the directors, officers, partners, employees, agents and each
person who controls any Investor within the meaning of the 1933 Act or the
Securities Exchange Act of 1934, as amended (the "1934 ACT"), if any, (iii) any
underwriter (as defined in the 1933 Act) for the Investors, and (iv) the
directors, officers, partners, employees and each person who controls any such
underwriter within the meaning of the 1933 Act or the 1934 Act, if any (each, an
"INDEMNIFIED PERSON"), against any joint or several losses, claims, damages,
liabilities or expenses (collectively, together with actions, proceedings or
inquiries by any regulatory or self-regulatory organization, whether commenced
or threatened, in respect thereof, "CLAIMS") to which any of them may become
subject insofar as such Claims arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of a material fact in a Registration
Statement or the omission or alleged omission to state therein a material fact
required to be stated or necessary to make the statements therein not
misleading; (ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the effective date
of such Registration Statement, or contained in the final prospectus (as amended
or supplemented, if the Company files any amendment thereof or supplement
thereto with the SEC) or the omission or alleged omission to state therein any
material fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading; or
(iii) any violation or alleged violation by the Company of the 1933 Act, the
1934 Act, any other law, including, without limitation, any state securities
law, or any rule or regulation thereunder relating to the offer or sale of the
Registrable Securities (the matters in the foregoing clauses (i) through (iii)
being, collectively, "VIOLATIONS"). Subject to the restrictions set forth in
Section 6(c) with respect to the number of legal counsel, the Company shall
reimburse the Indemnified Person, promptly as such expenses are incurred and are
due and payable, for any reasonable legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by any Indemnified Person
or underwriter for such Indemnified Person expressly for use in connection with
the preparation of such Registration Statement or any such amendment thereof or
supplement thereto; (ii) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of the
Company, which consent shall not be unreasonably withheld; and (iii) with
respect to any preliminary prospectus, shall not inure to the benefit of any
Indemnified Person if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented, such corrected prospectus was
timely made available by the Company pursuant to Section 3(c) hereof, and the
Indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a Violation and such Indemnified
Person, notwithstanding such advice, used it. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9.
b. In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees severally and not jointly
to indemnify, hold harmless and defend, to the same extent and in the same
manner set forth in Section 6(a), the Company, each of
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its directors, each of its officers who signs the Registration Statement, each
person, if any, who controls the Company within the meaning of the 1933 Act or
the 1934 Act, any underwriter and any other stockholder selling securities
pursuant to the Registration Statement or any of its directors or officers or
any person who controls such stockholder or underwriter within the meaning of
the 1933 Act or the 1934 Act (collectively and together with an Indemnified
Person, an "INDEMNIFIED PARTY"), against any Claim to which any of them may
become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such
Claim arises out of or is based upon any Violation by such Investor, in each
case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished to the
Company by such Investor expressly for use in connection with such Registration
Statement; and subject to Section 6(c) such Investor will reimburse any legal or
other expenses (promptly as such expenses are incurred and are due and payable)
reasonably incurred by them in connection with investigating or defending any
such Claim; provided, however, that the indemnity agreement contained in this
Section 6(b) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of such Investor, which
consent shall not be unreasonably withheld; provided, further, however, that the
Investor shall be liable under this Agreement (including this Section 6(b) and
Section 7) for only that amount as does not exceed the net proceeds to such
Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented.
c. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action (including any governmental action), such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be (which, in the case of the Company, shall be deemed to include
Brobeck, Phleger & Harrison, LLP); provided, however, that an Indemnified Person
or Indemnified Party shall have the right to retain its own counsel with the
fees and expenses to be paid by the indemnifying party, if, in the reasonable
opinion of counsel retained by the indemnifying party, the representation by
such counsel of the Indemnified Person or Indemnified Party and the indemnifying
party would be inappropriate due to actual or potential differing interests
between such Indemnified Person or Indemnified Party and any other party
represented by such counsel in such proceeding. The indemnifying party shall pay
for only one separate legal counsel for the Indemnified Persons or the
Indemnified Parties, as applicable, and such legal counsel shall be selected by
Investors holding a majority-in-interest of the Registrable Securities included
in the Registration Statement to which the Claim relates (with the approval of a
majority-in-interest of the Initial Investors), if the Investors are entitled to
indemnification hereunder, or the Company, if the Company is entitled to
indemnification hereunder, as applicable. The failure to
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<PAGE> 59
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is actually prejudiced in its
ability to defend such action. The indemnification required by this Section 6
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable.
7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any seller of Registrable Securities who was not
guilty of such fraudulent misrepresentation, and (iii) contribution (together
with any indemnification or other obligations under this Agreement) by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities.
8. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Investors the benefits of Rule
144 promulgated under the 1933 Act or any other similar rule or regulation of
the SEC that may at any time permit the investors to sell securities of the
Company to the public without registration ("RULE 144"), the Company agrees to:
a. make and keep public information available, as those terms
are understood and defined in Rule 144;
b. file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such requirements (it being understood that
nothing herein shall limit the Company's obligations under Section 4(c) of the
Securities Purchase Agreement) and the filing of such reports and other
documents is required for the applicable provisions of Rule 144; and
c. furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon written request, (i) a written statement
by the Company that it has complied with the reporting requirements of Rule 144,
the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without
registration.
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9. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights under this Agreement shall be automatically assignable by
the Investors to any transferee of not less than 50,000 shares of Registrable
Securities (subject to subsequent adjustments for stock splits, stock dividends,
reverse stock splits and the like) if: (i) the Investor agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment, (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned, (iii) following such transfer or assignment,
the further disposition of such securities by the transferee or assignee is
restricted under the 1933 Act and applicable state securities laws, (iv) at or
before the time the Company receives the written notice contemplated by clause
(ii) of this sentence, the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions contained herein, (v) such transfer
shall have been made in accordance with the applicable requirements of the
Securities Purchase Agreement, and (vi) such transferee shall be an "ACCREDITED
INVESTOR" as that term defined in Rule 501 of Regulation D promulgated under the
1933 Act.
10 AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with written consent of the Company, each
of the Initial Investors (to the extent such Initial Investor still owns
Registrable Securities) and Investors who hold a majority interest of the
Registrable Securities. Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each Investor and the Company.
11 MISCELLANEOUS.
a. A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
b. Any notices required or permitted to be given under the
terms hereof shall be sent by certified or registered mail (return receipt
requested) or delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile and shall be effective five days
after being placed in the mail, if mailed by regular United States mail, or upon
receipt, if delivered personally or by courier (including a recognized overnight
delivery service) or by facsimile, in each case addressed to a party. The
addresses for such communications shall be:
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If to the Company:
The ViaLink Company
13155 Noel Road, Ste. 800
Dallas, TX 75240
Attention: Chief Financial Officer
Facsimile: 972-934-5555
With copy to:
Richard M. Klinge & Associates, P.C.
510 E. Memorial Road, Ste. C-1
Oklahoma City, OK 73114
Attention: Richard M. Klinge, Esq.
Facsimile: 405-775-9003
Brobeck, Phleger & Harrison LLP
301 Congress Ave., Ste. 1200
Austin, TX 78701
Attention: J. Matthew Lyons, Esq.
Facsimile: 512-477-5813
If to an Investor: to the address set forth immediately below such Investor's
name on the signature pages to the Securities Purchase Agreement.
With copy to:
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street
Philadelphia, PA 19103
Attention: Gerald J. Guarcini, Esq.
Facsimile: 215-864-8999
c. Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
d. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed in the State of Delaware (without regard to principles of
conflict of laws). Both parties irrevocably consent to the exclusive
jurisdiction of the United States federal courts and the state courts located in
Delaware with respect to any suit or proceeding based on or arising under this
Agreement, the agreements entered into in connection herewith or the
transactions contemplated hereby or thereby and irrevocably agree that all
claims in respect of such suit or proceeding may be determined in such courts.
Both parties irrevocably waive the defense of an inconvenient forum to the
maintenance of such suit or proceeding.
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Both parties further agree that service of process upon a party mailed by first
class mail shall be deemed in every respect effective service of process upon
the party in any such suit or proceeding. Nothing herein shall affect either
party's right to serve process in any other manner permitted by law. Both
parties agree that a final non-appealable judgment in any such suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.
e. This Agreement, the Securities Purchase Agreement and the
Warrants (including all schedules and exhibits thereto) constitute the entire
agreement among the parties hereto with respect to the subject matter hereof and
thereof. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein and therein. This Agreement, the
Securities Purchase Agreement and the Warrants supersede all prior agreements
and understandings among the parties hereto with respect to the subject matter
hereof and thereof.
f. Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto.
g. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
h. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.
i. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
j. Except as otherwise provided herein, all consents and other
determinations to be made by the Investors pursuant to this Agreement shall be
made by Investors holding a majority of the Registrable Securities, determined
as if the all of the Warrants then outstanding have been exercised for
Registrable Securities.
k. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to each Investor by vitiating
the intent and purpose of the transactions contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for breach of its obligations
hereunder will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of any of the provisions hereunder, that each Investor
shall be entitled, in addition to all other available remedies in law or in
equity, to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement and to enforce specifically the terms and
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<PAGE> 63
provisions hereof, without the necessity of showing economic loss and without
any bond or other security being required.
l. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent, and no rules
of strict construction will be applied against any party.
m. In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.
n. The initial number of Registrable Securities included in
any Registration Statement and each increase to the number of Registrable
Securities included therein shall be allocated pro rata among the Investors
based on the number of Registrable Securities held by each Investor at the time
of such establishment or increase, as the case may be. In the event an Investor
shall sell or otherwise transfer any of such holder's Registrable Securities,
each permitted transferee shall be allocated a pro rata portion of the number of
Registrable Securities included in a Registration Statement for such transferor.
Any shares of Common Stock included on a Registration Statement and which remain
allocated to any person or entity which does not hold any Registrable Securities
shall be allocated to the remaining Investors, pro rata based on the number of
shares of Registrable Securities then held by such Investors. For the avoidance
of doubt, the number of Registrable Securities held by an Investor shall be
determined as if all Warrants then outstanding and held by an Investor were
exercised for Registrable Securities.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Company and the undersigned Initial Investors
have caused this Agreement to be duly executed as of the date first above
written.
THE VIALINK COMPANY
By: /s/ J. ANDREW KERNER
------------------------------------------
J. Andrew Kerner
Senior Vice President of Finance and
Chief Financial Officer
RGC INTERNATIONAL INVESTORS, LDC
By: Rose Glen Capital Management, L.P.,
Investment Manager
By: RGC General Partner Corp.,
as General Partner
By: /s/ WAYNE D. BLOCH
-----------------------------------------
Wayne D. Bloch
Managing Director
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<PAGE> 65
EXHIBIT 4.4
NEITHER THIS WARRANT NOR ANY SECURITIES ISSUABLE UPON THE EXERCISE OF THIS
WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR
DISPOSED OF WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS
OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
THEREFROM.
No. AGE 2 Right to Purchase
Shares of Common Stock
of The viaLink Company
THE VIALINK COMPANY
COMMON STOCK PURCHASE WARRANT
May 31, 2000
The viaLink Company, a Delaware corporation (the "Company"), hereby
certifies that, for value received, AGE Investments, Inc., a Delaware
corporation ("AGE"), or its permitted assigns, is entitled, subject to the terms
set forth below, to purchase from the Company at any time or from time to time
before 5:00 p.m. (Dallas, Texas time), on May 31, 2005, up to that number of
fully paid and nonassessable shares (the "Warrant Shares") of the Company's
Common Stock, $0.001 par value that shall equal 45,608. The purchase price per
share of the Warrant Shares shall be equal to $13.15 (such purchase price per
share as adjusted from time to time as herein provided is referred to herein as
the "Purchase Price"). The number and character of such shares of Common Stock
and the Purchase Price are subject to adjustment as provided herein.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Business Day" means any day except a Saturday or
a Sunday or other day on which the National Market (as hereinafter
defined), or any national securities exchange on which the Common Stock
(as hereinafter defined) is traded or admitted for unlisted trading
privileges, is closed for trading.
(b) The term "Company" shall include The viaLink Company, and
any corporation which shall succeed to, or assume the obligations of,
The viaLink Company hereunder.
(c) The term "Common Stock" includes the Company's common
stock, $0.001 par value, as authorized on May 31, 2000, and/or any
Other Securities (as hereinafter defined) into which or for which the
Warrant Shares may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.
(d) The term "Fair Market Value" per share of Common Stock
means:
(1) If the Common Stock is traded on a national securities
exchange or admitted to unlisted trading privileges on
such an exchange, or is listed on the National Market
(the "National Market") of the National Association of
Securities Dealers Automated Quotations System (the
"NASDAQ"), the
<PAGE> 66
Fair Market Value shall be the average of the last
reported sale prices of the Common Stock on such
exchange or on the National Market over the five
consecutive Business Days immediately preceding the
date of determination or, if the last reported sale
price information is not available for such days, the
average of the mean of the closing bid and asked
prices for such days on such exchange or on the
National Market;
(2) If the Common Stock is not so listed or admitted to
unlisted trading privileges, the Fair Market Value
shall be the average of the mean of the last bid and
asked prices reported over the five consecutive
Business Days immediately preceding the date of
determination (A) by the NASDAQ or (B) if reports are
unavailable under clause (A) above, by the National
Quotation Bureau Incorporated; and
(3) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and ask prices are
not reported, the Fair Market Value shall be the price
per share which the Company could obtain from a willing
buyer for shares of Common Stock, as such price shall
be determined by mutual agreement of the Company and
the holders of rights to purchase a majority of the
shares of Common Stock purchasable under all warrants
then outstanding and issued (directly or indirectly)
from that certain Stock Purchase Warrant, dated May 31,
2000, issued by the Company to RGC International
Investors, LDC ("RGC") which originally granted to RGC
the right to purchase 768,492 shares of Common Stock.
If such holders and the Company are unable to agree on
such Fair Market Value, the Company shall select a pool
of three independent and nationally-recognized
investment banking firms from which such holders (by a
majority vote) shall select one such firm to appraise
the fair market value of the Warrant and to perform the
computations involved. The determination of such
investment banking firm shall be binding upon the
Company and such holders in connection with any
transaction occurring at the time of such
determination. All expenses of such investment banking
firm shall be borne by the Company. In all cases, the
determination of fair market value shall be made
without consideration of the lack of a liquid public
market for the Common Stock and without consideration
of any "control premium" or any discount for holding
less than a majority or controlling interest of the
outstanding Common Stock.
(e) The term "Other Securities" refers to any stock (other than Common
Stock) or other securities of the Company or any other person (corporate or
otherwise) (i) which the holder of this Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of this Warrant, in lieu of or
in addition to shares of the Company's common stock, $.001 par value per share,
as authorized on May 31, 2000, or (ii) which at any time shall be issuable or
shall have been issued in exchange for or in replacement of shares of the
Company's common stock, $.001 par value per share, as authorized on May 31,
2000, or Other Securities pursuant to Section 4 or otherwise.
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<PAGE> 67
1. Exercise of Warrant.
1.1 Full Exercise. This Warrant may be exercised at any time after the
date hereof during normal business hours before its expiration in full by the
holder hereof by surrender of this Warrant, with the form of subscription at the
end hereof duly executed by such holder, to the Company at its principal office,
accompanied by payment, in cash, by bank cashier's check payable to the order of
the Company or by wire transfer, in the amount obtained by multiplying the
number of shares of Common Stock and/or Other Securities for which this Warrant
is then exercisable by the Purchase Price then in effect.
1.2 Partial Exercise. This Warrant may be exercised at any time during
normal business hours after the date hereof before its expiration in part by
surrender of this Warrant and payment of the Purchase Price then in effect in
the manner and at the place provided in subsection 1.1, except that the amount
payable by the holder on such partial exercise shall be the amount obtained by
multiplying (a) the number of shares of Common Stock and/or Other Securities
designated by the holder in the subscription at the end hereof by (b) the
Purchase Price then in effect. On any such partial exercise, the Company at its
expense will forthwith issue and deliver to or upon the order of the holder
hereof a new Warrant or Warrants of like tenor, in the name of the holder hereof
or as such holder (upon payment by such holder of any applicable transfer taxes)
may request, filling in the aggregate on the face or faces thereof the number of
shares of Common Stock and/or Other Securities for which such Warrant or
Warrants may still be exercised.
1.3 Company Acknowledgment. The Company will, at the time of any
exercise of this Warrant, upon the written request of the holder hereof,
acknowledge in writing its continuing obligation to afford to such holder any
rights to which such holder shall continue to be entitled after such exercise in
accordance with the provisions of this Warrant. If the holder shall fail to make
any such written request, such failure shall not affect the continuing
obligation of the Company to afford to such holder any such rights.
1.4 Trustee for Warrant Holders. In the event that a bank or trust
company shall have been appointed as trustee for the holder of this Warrant
pursuant to subsection 4.2, such bank or trust company shall have all the powers
and duties of a warrant agent appointed pursuant hereto and shall accept, in its
own name for the account of the Company or such successor person as may be
entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.
1.5 Net Issue.
(a) Election. The holder hereof may elect to receive, without
the payment by the holder of any additional consideration, Warrant
Shares equal to the value of this Warrant or any portion hereof by the
surrender of this Warrant or such portion to the Company, with the net
issue election notice attached hereto, duly executed, at the office of
the Company. Thereupon, the Company shall issue to the holder hereof
such number of fully paid and nonassessable shares of Common Stock as
is computed using the following formula:
X=Y(A-B)
A
where X= the number of shares to be issued to the holder hereof
pursuant to this Section 1.5.
Y= the number of shares covered by this Warrant in respect of which the
net issue election is made pursuant to this Section 1.5.
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A= the Fair Market Value of one share of Common Stock as of the time
the net issue election is made pursuant to this Section 1.5.
B= the Purchase Price in effect under this Warrant at the time the net
issue election is made pursuant to this Section 1.5.
2. Delivery of Stock Certificates, Etc. on Exercise. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within ten Business Days thereafter, the Company at its expense (including
the payment by it of any applicable issue taxes) will cause to be issued in the
name of and delivered to the holder hereof, or as such holder (upon payment by
such holder of any applicable transfer taxes) may direct, a certificate or
certificates for the number of fully paid and nonassessable shares of Common
Stock (or, to the extent not constituting Common Stock, Other Securities) to
which such holder shall be entitled on such exercise, plus, in lieu of any
fractional share to which such holder would otherwise be entitled, cash equal to
such fraction multiplied by the then current Fair Market Value of one full
share, together with any other property (including cash, where applicable) to
which such holder is entitled upon such exercise pursuant to Section 1 or
otherwise.
3. Adjustment for Dividends in Other Stock, Property, etc.;
Reclassification, etc. In case at any time or from time to time, the holders of
Common Stock (or, to the extent not constituting Common Stock, Other Securities)
in their capacity as such shall have received, or (on or after the record date
fixed for the determination of shareholders eligible to receive) shall have
become entitled to receive, without payment therefor,
(a) other or additional stock or other securities or property
(other than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of
earnings or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate
rearrangement,
other than additional shares of capital stock issued as a stock dividend or in a
stock split (adjustments in respect of which are provided for in Section 5),
then and in each such case the holder of this Warrant, on the exercise hereof as
provided in Section 1, shall be entitled to receive the amount of stock and
other securities and property (including cash in the cases referred to in
subdivisions (b) and (c) of this Section 3) determined by multiplying (i) the
amount of stock and other securities and property (including cash in the cases
referred to in subdivisions (b) and (c) of this Section) which such holder would
hold on the date of such exercise, if on the record date with respect to or the
date of the issuance of the stock, securities, property and cash referred to in
subdivisions (a), (b) or (c) of this Section 3, as applicable, it had been the
holder of record of the number of shares of Common Stock called for on the face
of this Warrant and had thereafter, during the period from the date hereof to
and including the date of such exercise, retained such shares and all such other
or additional stock and other securities and property (including cash in the
cases referred to in subdivisions (b) and (c) of this Section 3) receivable by
it as aforesaid during such period, giving effect to all adjustments called for
during such period by Section 4 and Section 5 by (ii) the percentage of this
Warrant then being exercised.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
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<PAGE> 69
4.1 Reorganization, Consolidation, Merger, etc. In case at any time or
from time to time, the Company shall (a) effect a reorganization,
reclassification or recapitalization (b) consolidate with or merge into any
other person, or (c) transfer all or substantially all of its properties or
assets to any other person under any plan or arrangement contemplating the
dissolution of the Company, then, in each such case, the holder of this Warrant,
on the exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, reclassification, recapitalization,
consolidation or merger or the effective date of such dissolution, as the case
may be, shall receive, in lieu of the Common Stock (or, to the extent not
constituting Common Stock, Other Securities) issuable on such exercise prior to
such consummation or such effective date, the amount of stock and other
securities and property (including cash) determined by multiplying (i) the
amount of the stock and other securities and property (including cash) to which
such holder would have been entitled upon such consummation or in connection
with such event, as the case may be, if such holder had so exercised this
Warrant, immediately prior thereto, all subject to further adjustment thereafter
as provided in Sections 3 by (ii) the percentage of this Warrant then being
exercised.
4.2 Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be delivered the Other Securities and property (including cash, where
applicable) receivable by the holders of this Warrant after the effective date
of such dissolution pursuant to this Section 4 to a bank or trust company having
its principal office in Dallas, Texas, as trustee for the holder of this
Warrant.
4.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 4, this Warrant shall continue in full force and effect, subject to
expiration in accordance with Section 17 hereof, and the terms hereof shall be
applicable to the Other Securities and property receivable on the exercise of
this Warrant after the consummation of such reorganization, consolidation or
merger or the effective date of dissolution following any such transfer, as the
case may be, and shall be binding upon the issuer of any such Other Securities,
including, in the case of any such transfer, the person acquiring all or
substantially all of the properties or assets of the Company, whether or not
such person shall have expressly assumed the terms of this Warrant as provided
in Section 6.
5. Anti-Dilution Adjustments.
5.1 General. The Purchase Price shall be subject to adjustment from
time to time as hereinafter provided. Upon each adjustment of the Purchase
Price, the holder of this Warrant shall thereafter be entitled to purchase, at
the Purchase Price resulting from such adjustment, the number of shares obtained
by multiplying the Purchase Price in effect immediately prior to such adjustment
by the number of shares purchasable pursuant hereto immediately prior to such
adjustment and dividing the product thereof by the Purchase Price resulting from
such adjustment.
5.2 Exceptions. The following issuance of the Company's securities
shall not result in an adjustment in the Purchase Price: (i) stock issued
pursuant to a bona fide, public offering of shares of Common Stock, registered
under the Securities Act, pursuant to a registration statement; (ii) stock
issued pursuant to the conversion or exercise of convertible or exercisable
securities outstanding as of the date hereof; (iii) stock issued pursuant to or
in connection with a bona fide business acquisition of or by the Company,
whether by merger, consolidation, sale of assets, sale or exchange of stock or
otherwise; (iv) stock issued upon the exercise of any warrants issued as of the
date hereof (which do not have as their purpose an equity financing element)
approved by the Board; (v) stock issued upon the exercise of one or
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<PAGE> 70
more of the Warrants; (vi) stock issued pursuant to options, warrants, rights or
similar commitments obligating the Company to issue shares of its capital stock
which are in existence as of the date hereof; (vii) stock issued pursuant to
options granted after the date hereof under the Company's stock option or stock
issuance plan or any other employee benefit of the Company now existing or
implemented in the future; or (viii) stock issued after the date hereof directly
under the Company's employee stock purchase plan or any other employee benefit
plan of the Company now existing or implemented in the future.
5.3 Dilution in Case of Other Securities. In case any Other Securities
shall be issued or sold by the Company, or shall become subject to issue upon
the conversion or exchange of any stock (or Other Securities) of the Company (or
any other issuer of Other Securities or any other person referred to in Section
4) or to subscription, purchase or other acquisition pursuant to any rights or
options granted by the Company (or such other issuer or person), for a
consideration per share such as to dilute the purchase rights evidenced by this
Warrant, the computations, adjustments and readjustments provided for in this
Section 5 with respect to the Purchase Price and the number of shares of Common
Stock issuable upon exercise of this Warrant shall be made as nearly as possible
in the manner so provided and applied to determine the amount of Other
Securities from time to time receivable on the exercise of this Warrant, so as
to protect the holders of this Warrant against the effect of such dilution.
5.4 Stock Splits and Reverse Splits. In the event that the Company
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares, the Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of Warrant Shares
purchasable pursuant to this Warrant immediately prior to such subdivision shall
be proportionately increased, and conversely, in the event that the outstanding
shares of Common Stock shall at any time be combined into a smaller number of
shares, the Purchase Price in effect immediately prior to such combination shall
be proportionately increased and the number of Warrant Shares purchasable upon
the exercise of this Warrant immediately prior to such combination shall be
proportionately reduced. Except as provided in this subsection 5.4, no
adjustment in the Purchase Price and no change in the number of Warrant Shares
purchasable shall be made under this Section 5 as a result of or by reason of
any such subdivision or combination.
5.5 Record Date as Date of Issue or Sale. In the event that at any time
the Company shall take a record of the holders of its Common Stock for the
purpose of entitling them (i) to receive a dividend or other distribution
payable in capital stock, Options or Convertible Securities, or (ii) to
subscribe for or purchase capital stock, Options or Convertible Securities, then
such record date shall be deemed to be the date of the issue or sale of the
shares of capital stock, Options or Convertible Securities deemed to have been
issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be; provided, nothing contained herein will be deemed
to require the Company to issue or deliver such capital stock, Options or
Convertible Securities until the capital stock, Options or Convertible
Securities which are the subject of any such dividend, distribution or
subscription right are issued or delivered to the holders of Common Stock.
5.6 Treasury Stock. The number of shares of capital stock outstanding
at any given time shall not include shares owned or held by or for the account
of the Company, and the disposition of any such shares (other than their
cancellation without reissuance) shall be considered an issue or sale of capital
stock for the purposes of this Section 5.
5.7 Certain Issues of Capital Stock Excepted. Anything herein to the
contrary notwithstanding, the Company shall not be required to make any
adjustment to the Purchase Price in the
6
<PAGE> 71
case of the issuance from time to time after the date hereof of shares of
capital stock reserved by the Company for the grant and exercise of (a) options
to purchase capital stock or (b) rights under the Company's current employee
stock purchase plan, in each case, granted to directors, officers, employees, or
consultants of the Company pursuant to arrangements, plans or contracts approved
by the Board of Directors of the Company.
6. No Dilution or Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holders of this
Warrant against dilution or other impairment. Without limiting the generality of
the foregoing, the Company (a) will not increase the par value or stated value
of any shares of stock receivable on the exercise of this Warrant above the
amount payable therefor on such exercise, (b) will take all such action as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of stock on the exercise of this
Warrant, and (c) will not transfer all or substantially all of its properties
and assets to any other person (corporate or otherwise), or consolidate with or
merge into any other person or permit any such person to consolidate with or
merge into the Company (if the Company is not the surviving person), unless such
other person shall expressly assume in writing and become bound by all the terms
of this Warrant.
7. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of this Warrant, the Company at its expense will promptly cause its
chief financial officer to compute such adjustment or readjustment in accordance
with the terms of this Warrant and prepare a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
capital stock (or, to the extent not constituting Common Stock, Other
Securities) issued or sold or deemed to have been issued or sold, (b) the number
of shares of each class or series of capital stock outstanding or deemed to be
outstanding, and (c) the Purchase Price and the number of shares of Common Stock
(and, to the extent not constituting Common Stock, Other Securities) to be
received upon exercise of this Warrant, in effect immediately prior to such
issue or sale and as adjusted and readjusted as provided in this Warrant. The
Company will forthwith mail a copy of each such certificate to the holder of
this Warrant, and will, on the written request at any time of the holder of this
Warrant, furnish to such holder a like certificate setting forth the Purchase
Price at the time in effect and showing how it was calculated.
8. Registration Rights. The holder(s) of this Warrant and any other
Warrants issued pursuant to the terms hereof from time to time shall be entitled
to the registration rights in respect thereof as provided in the Registration
Rights Agreement between the Company and AGE, dated March 24, 2000 (as amended),
in accordance with the terms thereof.
9. Notices of Record Date, etc. In the event of:
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend or other distribution,
or any right to subscribe for, purchase or otherwise acquire any shares
of stock of any class or any other securities or property, or to
receive any other right, or
7
<PAGE> 72
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of the
Company to or consolidation or merger of the Company with or into any
other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed to each
holder of a Warrant a notice specifying (i) the date on which any such record is
to be taken for the purpose of such dividend, distribution or right, and stating
the amount and character of such dividend, distribution or right, (ii) the date
on which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock (or, to the extent not constituting Common Stock, Other Securities) shall
be entitled to exchange their shares of Common Stock (or, to the extent not
constituting Common Stock, Other Securities) for securities or other property
deliverable on such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up, and
(iii) the amount and character of any stock or other securities, or rights or
options with respect thereto, proposed to be issued or granted, the date of such
proposed issue or grant and the persons or class of persons to whom such
proposed issue or grant is to be offered or made. Such notice shall be mailed at
least ten Business Days prior to the date specified in such notice on which any
such action is to be taken.
10. Reservation of Stock, etc. Issuable on Exercise of Warrants. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of this Warrant, all shares of Common Stock (or, to the
extent not constituting Common Stock, Other Securities) from time to time
issuable upon the exercise of this Warrant.
11. Exchange of Warrants. On surrender for exchange of this Warrant,
properly endorsed, to the Company, the Company at its expense will issue and
deliver to or on the order of the holder thereof a new Warrant or Warrants of
like tenor, in the name of such holder or as such holder (on payment by such
holder of any applicable transfer taxes) may direct, filling in the aggregate on
the face or faces thereof the number of shares of Common Stock called for on the
face or faces of the Warrant so surrendered; provided, however, that in no event
will the Company be obligated to recognize or permit any transfer of this
Warrant that would result in the assignor or any assignee receiving a Warrant
exercisable with respect to 50,000 or fewer shares of Common Stock.
12. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction of any Warrant,
on delivery of an indemnity agreement or security reasonably satisfactory in
form and amount to the Company or, in the case of any such mutilation, on
surrender and cancellation of such Warrant, the Company at its expense will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
13. Remedies. [Deleted.]
14. Negotiability, etc. This Warrant is issued upon the following
terms, to all of which each holder or owner hereof by the taking hereof consents
and agrees, subject to the limitation on transfer set forth in Section 11:
8
<PAGE> 73
(a) title to this Warrant may be transferred by endorsement
(by the holder hereof executing the form of assignment at the end
hereof) and delivery in the same manner as in the case of a negotiable
instrument transferable by endorsement and delivery; and
(b) any person in possession of this Warrant properly endorsed
for transfer to such person (including endorsed in blank) is authorized
to represent himself as absolute owner hereof and is empowered to
transfer absolute title hereto by endorsement and delivery hereof to a
bona fide purchaser hereof for value; each prior taker or owner waives
and renounces all of his equities or rights in this Warrant in favor of
each such bona fide purchaser, and each such bona fide purchaser shall
acquire absolute title hereto and to all rights represented hereby.
Nothing in this paragraph (b) shall create any liability on the part of
the Company beyond any liability or responsibility it has under law.
15. Notices, etc. All notices and other communications from the Company
to the holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid at such address as may have been furnished to
the Company in writing by such holder or, until any such holder furnishes to the
Company an address, then to, and at the address of, the last holder of this
Warrant who has so furnished an address to the Company.
16. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the internal substantive laws of the State of Texas, without regard
to the conflicts of law principles thereof and, to the maximum extent
practicable, will be deemed to call for performance in Dallas County, Texas. The
headings in this Warrant are for purposes of reference only, and shall not limit
or otherwise affect any of the terms hereof. The invalidity or unenforceability
of any provision hereof shall in no way affect the validity or enforceability of
any other provision.
17. Expiration. The right to exercise this Warrant shall expire at 5:00
p.m. (Dallas, Texas time), May 31, 2005.
18. Warrant Holders Not Deemed Shareholders. No holder of this Warrant
shall, as such, be entitled to vote or to receive dividends or be deemed the
holder of Common Stock or, to the extent not constituting Common Stock, Other
Securities that may at any time be issuable upon exercise of this Warrant for
any purpose whatsoever, nor shall anything contained herein be construed to
confer upon the holder of this Warrant, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issue or reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger or conveyance or
otherwise), or to receive notice of meetings, or to receive dividends or
subscription rights, until such holder shall have exercised this Warrant and
been issued Common Stock or, to the extent not constituting Common Stock, Other
Securities in accordance with the provisions hereof.
9
<PAGE> 74
IN WITNESS WHEREOF, the Company has executed this Warrant as of the
date first written above.
THE VIALINK COMPANY
By: /s/ J. Andrew Kerner
------------------------------------
Name: J. Andrew Kerner
Title: Senior Vice President of
Finance and Chief Financial
Officer
[SIGNATURE PAGE TO WARRANT]
<PAGE> 75
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
THE VIALINK COMPANY
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder, _____________
shares (the "Shares") of Common Stock of The viaLink Company and herewith makes
payment of $________ therefor, and requests that the certificate for such Shares
be issued in the name of, and delivered to ______________________________,
federal taxpayer identification number ______________________, whose address is
____________________ _________________________________________.
In connection with the exercise of this Warrant, the undersigned
represents and warrants as follows:
(a) The undersigned is purchasing the Shares for the account
of the undersigned and not as a nominee or agent, and the undersigned
has no present intention of granting any participation in the same, and
does not have any contract, undertaking, agreement or arrangement with
any person to grant participation to such person or to any third
person, with respect to any of such Shares;.
(b) The undersigned has received or has had full access to all
the information it considers necessary or appropriate to make an
informed investment decision with respect to the Shares. The
undersigned has had an opportunity to ask questions of and receive
answers from the Company and to obtain additional information (to the
extent the Company possessed such information or could acquire it
without unreasonable effort or expense) necessary to verify any
information furnished to undersigned or to which the Company has
access.
(c) The undersigned understands that the Shares are
characterized as "restricted securities" under the federal securities
laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws
and applicable regulations such securities may be resold without
registration under the Securities Act of 1933, as amended (the
"Securities Act") only in certain limited circumstances. In this
connection, the undersigned represents that it is familiar with
Securities and Exchange Commission ("SEC") Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by
the Securities Act.
(d) The undersigned is an "accredited investor" within the
meaning of SEC Rule 501 of Regulation D, as presently in effect.
(e) The undersigned agrees not to offer, sell, exchange,
transfer, pledge or otherwise dispose of any of the Shares unless at
that time either:
(1) such transaction is permitted pursuant to the
provisions of Rule 144 under the Securities Act or
another exemption from registration under the
Securities Act and all applicable state securities
laws;
(2) a registration statement under the Securities Act and
all applicable state securities laws covering such
securities proposed to be sold, transferred or
otherwise disposed of, describing the manner and terms
of the proposed
<PAGE> 76
sale, transfer or other disposition, and containing
a current prospectus, is filed with the SEC and all
applicable state securities law agencies and made
effective under the Securities Act and all applicable
state securities laws; or
(3) an authorized representative of the SEC and all
applicable state securities agencies shall have
rendered written advice to undersigned (with a copy
thereof and of all other related communications
delivered to the Company) to the effect that the SEC
and/or such state securities agencies will take no
action, or that the staff of the SEC and/or such state
securities agencies will recommend that the SEC and
such state securities agencies, as applicable, take no
action, with respect to the proposed offer, sale,
exchange, transfer, pledge or other disposition if
consummated.
(f) All certificates representing the Shares and any
certificates subsequently issued with respect thereto or in
substitution therefor shall bear a legend that such securities may only
be sold or disposed of in accordance with (i) the provisions of the
Securities Act, the rules and regulations thereunder and any applicable
state securities laws, (ii) pursuant to an effective registration
statement or (iii) pursuant to an exemption from the
registration/qualification requirements of the Securities Act and any
applicable state securities laws. The Company, at its reasonable
discretion, may cause stop transfer orders to be placed with its
transfer agent with respect to the certificates for the Shares but not
as to the certificates for any part of such Shares as to which said
legend is no longer required.
Dated:
----------------- -----------------------------------------
(Signature must conform to name of holder
as specified on the face of the Warrant)
-----------------------------------------
(Address)
Signed in the presence of:
---------------------
---------------------------
2
<PAGE> 77
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto _____________ _________________________, federal taxpayer
identification number ___________, whose address is
___________________________________________________, the right represented by
the within Warrant to purchase ___________ shares of Common Stock of The viaLink
Company to which the within Warrant relates, and appoints
___________________________ Attorney to transfer such right on the books of The
viaLink Company with full power of substitution in the premises.
Dated:
----------------- -----------------------------------------
(Signature must conform to name of holder
as specified on the face of the Warrant)
-----------------------------------------
(Address)
Signed in the presence of:
---------------------
<PAGE> 78
NET ISSUE ELECTION NOTICE
TO: THE VIALINK COMPANY Date:
----------------------------
The undersigned hereby elects under Section 1.5 of the Warrant to
surrender the right to purchase _______ shares of Common Stock pursuant to this
Warrant. The certificate(s) for the shares issuable upon such net issue election
shall be issued in the name of:
---------------------------
---------------------------
(Please Print Name, Address and Taxpayer Identification No.)
---------------------------
Name of holder of this Warrant or Assignee:
------------------------------------
(Please Print)
Address:
---------------------
Signature:
Note: The above signature must correspond with the name as written upon the face
of this Warrant Certificate in every particular without alteration or
enlargement or any change whatever unless this Warrant has been assigned.
<PAGE> 79
EXHIBIT 4.5
AMENDMENT NO. 1
TO
REGISTRATION RIGHTS AGREEMENT
THIS AMENDMENT No. 1 TO REGISTRATION RIGHTS AGREEMENT (the "Amendment")
dated as of May 31, 2000, is entered into by and among The viaLink Company, a
Delaware corporation (the "Company"), and AGE Investments, Inc., a Delaware
corporation ("AGE"). Capitalized terms used but not defined herein shall have
the respective meanings assigned to them in that certain Registration Rights
Agreement dated as of March 24, 2000 by and between the Company and AGE (the
"Registration Rights Agreement").
I N T R O D U C T I O N
WHEREAS, the Company and AGE are parties to the Registration Rights
Agreement and desire to amend such agreement to provide that certain shares of
the capital stock of the Company acquired by AGE subsequent to the execution
date of the Registration Rights Agreement shall become subject to the
Registration Rights Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing premises and for
certain other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Amendment to Registration Rights Agreement. The Registration Rights
Agreement shall be amended by replacing in their entirety Recitals A, B and C
with the following:
A. The Company and certain of its investors, are parties to a
Securities Purchase Agreement, dated March 22, 2000 (the "March Purchase
Agreement"), and a Securities Purchase Agreement dated as of May 31, 2000
(the "May Purchase Agreement") providing, among other things, for such
investors' acquisition of shares of Common Stock, par value $0.001 per
share, of the Company and warrants to purchase shares of Common Stock of the
Company.
B. The Company and A.G. Edwards & Sons, Inc. ("AG Edwards") are parties
to an Engagement Letter, dated February 25, 2000 (the "February Letter") and
a Engagement Letter dated April 27, 2000 (the "April Letter"), providing,
among other things, for the issuance to AG Edwards of Warrants (each, a
"Warrant" and collectively, the "Warrants") to purchase shares of the
Company's Common Stock (the "Shares"). Any reference herein to an individual
Warrant shall encompass all Warrants.
C. AG Edwards, pursuant to the February Letter, has located, on behalf
of the Company, Millennium Partners, L.P., who is one of the investors party
to the March Purchase Agreement and, pursuant to the April Letter, has
located, on behalf of the Company, RGC International Investors, LDC, who is
the investor party to the May Purchase Agreement (collectively, the
"Services").
<PAGE> 80
2. Counterparts. This Amendment may be executed in multiple
counterparts, each of which when so executed and delivered shall be an
original, but all of such counterparts together shall constitute one and the
same instrument.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
<PAGE> 81
IN WITNESS WHEREOF, the Company and the Holder have executed this
Amendment No. 1 to Registration Rights Agreement as of the date first written
above.
COMPANY:
THE VIALINK COMPANY
By: /s/ J. Andrew Kerner
---------------------------------------
J. Andrew Kerner
Senior Vice President of Finance and
Chief Financial Officer
HOLDER:
AGE INVESTMENTS, INC.
By: /s/ Robert L. Proost
---------------------------------------
Name: Robert L. Proost
Title: Sole Director
Executed in St. Clair County, IL
<PAGE> 82
EXHIBIT 99.1
[VIALINK LOGO]
FOR IMMEDIATE RELEASE
INVESTOR RELATIONS CONTACTS
J. Andrew Kerner Julie Crandall/E. E. Wang
Chief Financial Officer Pondel/Wilkinson Group
The viaLink Company Tel 310-207-9300
Tel 972-934-5504 [email protected]
[email protected]
VIALINK COMPLETES $10 MILLION PRIVATE PLACEMENT
EDMOND, OKLAHOMA--JUNE 1, 2000-- The viaLink Company (NasdaqNM:VLNK) today
announced the completion of a $10 million private placement of shares of common
stock and warrants to purchase shares of common stock to a fund managed by Rose
Glen Capital Management, L.P. The company issued 960,615 shares of common stock
priced at $10.41 per share, and warrants to purchase 768,492 shares of common
stock at an exercise price of $12.06 per share. The warrant exercise price may
be subject to certain adjustments beginning one year from issuance, based on the
market price of the company's common stock.
"The $10 million investment gives us additional flexibility to execute
our business plan and finance critical technology and marketing initiatives,"
said Lewis B. "Bucky" Kilbourne, viaLink's chairman and chief executive officer.
"In light of current market conditions, we continue to work with our financial
advisors to carefully evaluate the timing and size of the follow-on offering we
registered for in March."
About viaLink
The viaLink Company (NasdaqNM: VLNK) is a leading provider of
subscription-based, business-to-business electronic commerce services that
enable consumer packaged goods (CPG) and grocery industry participants to
efficiently manage their highly complex supply chain information. viaLink's
services allow manufacturers, wholesalers, distributors and retailers to
communicate and synchronize item, price and promotion information in a more
cost-effective and accessible way than has been possible using traditional
electronic and paper-based methods. For more information, visit viaLink's Web
site at http://www.vialink.com.
This release contains forward-looking statements that involve risks and
uncertainties. The viaLink Company now resembles a development stage company,
which has commenced its planned operations but has not yet generated significant
revenues. Among the important factors that could cause actual results to differ
materially from those in the forward-looking statements are the failure of
viaLink's services to achieve market acceptance; the extent of viaLink's
anticipated operating losses and negative cash flow; viaLink's dependence on its
strategic alliance partners; intense marketplace competition; rapid
technological change and the possible obsolescence of viaLink's service;
dependence on certain key personnel and need to hire additional personnel;
viaLink's inability to protect its proprietary technology; as well as other
factors detailed in viaLink's filings with the Securities and Exchange
Commission, including its recent filings on Forms SB-2, 10-KSB and 10-QSB.
###
