EXHIBIT 4.1
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this "Agreement"), dated as of December 28,
2001, is entered into by and between The viaLink Company, a Delaware corporation
(the "Company"), and each of the Purchasers whose names are set forth on Exhibit
A hereto (individually, a "Purchaser" and collectively, the "Purchasers"), for
the purchase and sale of shares of the Company's Series C Convertible Preferred
Stock, par value $.001 per share (the "Preferred Stock"), in the manner, and
upon the terms, provisions and conditions set forth in this Agreement.
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the Purchasers
and Purchasers shall purchase shares of Preferred Stock; and
WHEREAS, such purchase and sale will be registered under the United
States Securities Act of 1933, as amended (the "Securities Act"), pursuant to
the Registration Statement (as defined in Section 3(c) hereof).
NOW, THEREFORE, in consideration of the representations, warranties and
agreements contained herein and other good and valuable consideration, the
receipt and legal adequacy of which is hereby acknowledged by the parties, the
Company and the Purchasers hereby agree as follows:
1. Purchase Price.
1.1. Upon the following terms and subject to the conditions
contained herein, the Purchasers hereby agree to purchase an
aggregate of 600 shares of the Company's Preferred Stock (the
"Preferred Shares"), convertible into shares of the Company's
common stock, par value $.001 per share (the "Common Stock"),
at a per share price of $10,000 and for an aggregate purchase
price of $6,000,000 (the "Purchase Price"). The designation,
rights, preferences and other terms and provisions of the
Series C Convertible Preferred Stock are set forth in the
Certificate of Designation of the Relative Rights and
Preferences of the Series C Convertible Preferred Stock
attached hereto as Exhibit B (the "Certificate of
Designation").
1.2. Upon the following terms and subject to the conditions
contained herein, the Purchasers shall be issued Series A
Warrants, in substantially the form attached hereto as Exhibit
C (the "Series A Warrants"), and SDS Merchant Fund, L.P.
("SDS") shall be issued Series B Warrants, in substantially
the form attached hereto as Exhibit D (the "Series B
Warrants," and together with the Series A Warrants, the
"Warrants"), to purchase the number of shares of Common Stock
set forth opposite such Purchaser's name on Exhibit A hereto.
The Warrants shall have an exercise price equal to the Warrant
Price (as defined in the applicable Warrant) and shall have a
term of five years. The Series A Warrants shall be immediately
exercisable and the
Series B Warrants shall become exercisable upon consummation
of the Second Closing (as defined in Section 1(e) hereof).
1.3. The Company has authorized and has reserved and covenants to
continue to reserve, free of preemptive rights and other
similar contractual rights of stockholders, a sufficient
number of its authorized but unissued shares of Preferred
Stock to effect the issuance of the Preferred Shares.
1.4. The Company has authorized and has reserved and covenants to
continue to reserve, free of preemptive rights and other
similar contractual rights of stockholders, a sufficient
number of its authorized but unissued shares of Common Stock
to effect the conversion of the Preferred Stock and exercise
of the Warrants. Any shares of Common Stock issuable upon
conversion of the Preferred Stock and exercise of the Warrants
(and such shares when issued) are herein referred to as the
"Conversion Shares" and the "Warrant Shares," respectively.
The Preferred Shares, the Conversion Shares and the Warrant
Shares are sometimes collectively referred to as the "Shares."
1.5. The Company agrees to issue and sell to the Purchasers and, in
consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions
of this Agreement, the Purchasers, severally but not jointly,
agree to purchase that number of the Preferred Shares and
Warrants set forth opposite their respective names on Exhibit
A and subject to the terms and conditions hereof, consummate
each of the Closings (as defined below). The Purchase Price of
the Preferred Shares and Warrants being acquired by each
Purchaser is set forth opposite such Purchaser's name on
Exhibit A. The Preferred Shares and Warrants shall be sold and
funded in two separate closings (each, a "Closing"). The
initial closing under this Agreement (the "Initial Closing")
shall take place upon execution of this Agreement by a date no
later than December 31, 2001 (the "Initial Closing Date") and
shall be funded in the amount of $3,000,000. The second
closing under this Agreement (the "Second Closing") shall take
place no later than March 25, 2002 (the "Second Closing Date")
and shall be funded in the amount of $3,000,000; provided,
however, that SDS at its sole option may fund an additional
$1,000,000 at any time after the Initial Closing Date and
prior to March 30, 2002. Upon the mutual agreement of the
parties, the Second Closing may occur prior to the Second
Closing Date. Each Closing under this Agreement shall take
place at the offices of Jenkens & ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP,
The Chrysler Building, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ at 1:00 p.m. (eastern time) upon the satisfaction
of each of the conditions set forth in Section 4 hereof (each,
a "Closing Date").
2. Representations, Warranties and Covenants of the Purchasers. Each of
the Purchasers, severally but not jointly, represents and warrants to
the Company, and covenants for the benefit of the Company, as follows:
2.1. Each of the Purchasers is an entity duly organized, valid
existing and in good standing under the laws of the
jurisdiction identified on Exhibit A.
-2-
2.2. This Agreement has been duly authorized, validly executed and
delivered by each of the Purchasers and is a valid and binding
agreement and obligation of each of the Purchasers enforceable
against each of the Purchasers in accordance with its terms,
subject to limitations on enforcement by general principles of
equity and by bankruptcy or other laws affecting the
enforcement of creditors' rights generally, and each of the
Purchasers has full power and authority to execute and deliver
this Agreement and the other agreements and documents
contemplated hereby and to perform its obligations hereunder
and thereunder.
2.3. Each of the Purchasers has received and carefully reviewed
copies of the Public Documents (as hereinafter defined). Each
of the Purchasers understands that no Federal, state, local or
foreign governmental body or regulatory authority has made any
finding or determination relating to the fairness of an
investment in any of the Shares and that no Federal, state,
local or foreign governmental body or regulatory authority has
recommended or endorsed, or will recommend or endorse, any
investment in any of the Shares. Each of the Purchasers, in
making the decision to purchase the Preferred Shares and the
Warrants, has relied upon independent investigation made by it
and has not relied on any information or representations made
by third parties.
2.4. The Purchasers agree that they will not enter into any Short
Sales (as hereinafter defined) from the period commencing on
the Initial Closing Date and ending on the date which all of
the Preferred Shares have been converted and all of the
Warrants have been exercised and such Conversion Shares and
Warrant Shares are covered by the Registration Statement (as
defined in the Registration Rights Agreement). For purposes of
this Section 2(d), a "Short Sale" by a Purchaser shall mean a
sale of Common Stock by a Purchaser that is marked as a short
sale and that is made at a time when there is no equivalent
offsetting long position in Common Stock held by such
Purchaser. For purposes of determining whether there is an
equivalent offsetting long position in Common Stock held by a
Purchaser, Conversion Shares that have not yet been converted
upon conversion of the Preferred Shares and Warrant Shares
that have not yet been issued upon exercise of the Warrants
shall be deemed to be held long by such Purchaser, and the
amount of shares of Common Stock held in a long position shall
be the number of Conversion Shares issuable upon conversion of
the Preferred Shares assuming such holder converted all the
outstanding principal amount of the Preferred Shares on such
date and with respect to Warrant Shares, the number of Warrant
Shares issuable upon exercise of the Warrants assuming such
holder exercised all of the Warrants on such date.
3. Representations, Warranties and Covenants of the Company.
The Company represents and warrants to the Purchasers, and covenants
for the benefit of the Purchasers, as follows:
3.1. The Company has been duly incorporated and is validly existing
and in good standing under the laws of the state of Delaware,
with full corporate power and authority to own, lease and
operate its properties and to conduct its business as
currently conducted, and is duly registered and qualified to
conduct its business and is in good
-3-
standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such
registration or qualification, except where the failure to
register or qualify would not have a Material Adverse Effect.
For purposes of this agreement, "Material Adverse Effect"
shall mean any effect on the business, prospects, operations,
properties or financial condition of the Company that is
material and adverse to the Company and its subsidiaries,
taken as a whole and/or any condition, circumstance, or
situation that would prohibit the Company from entering into
and performing any of its obligations under this Agreement in
any material respect.
3.2. The Company has furnished the Purchasers with copies of the
Company's most recent Annual Report on Form 10-KSB, as
amended, for fiscal year ended December 31, 2000 (the "Form
10-K") filed with the Securities and Exchange Commission (the
"Commission") and its Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2001 (the "Form 10-Q";
collectively with the Form 10-K, the "Public Documents"). The
Public Documents and the Commission Documents at the time of
their filing did not include any untrue statement of a
material fact or omit to state any material fact necessary in
order to make the statements contained therein, in light of
the circumstances under which they were made, not misleading.
As used herein, "Commission Documents" means all reports,
schedules, forms, statements and other documents filed by the
Company with the Securities and Exchange Commission (the
"Commission") pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the " Exchange
Act"), including material filed pursuant to Section 13(a) or
15(d) of the Exchange Act and the Registration Statement (as
defined below) and the Prospectus Supplement (as defined
below).
3.3. The Shares to be issued by the Company to the Purchasers have
been registered under the Securities Act, pursuant to a
registration statement on Form S-3, Commission File Number
333-64750 (the "Registration Statement") and the Company has
filed a prospectus supplement to the Registration Statement
(the "Prospectus Supplement") in connection with the
transaction contemplated by this Agreement. So long as the
Preferred Shares remain outstanding, the Company will maintain
the effectiveness of the Registration Statement.
3.4. The Company at all times shall remain a reporting company
pursuant to the Exchange Act.
3.5. The Certificate of Designation and the Shares have been duly
authorized by all necessary corporate action and, upon
conversion in accordance with the terms of the Certificate of
Designation, and upon payment of the exercise price in
accordance with the terms of the Warrants, the shares of
Common Stock issuable upon conversion of the Preferred Shares
or exercise of the Warrants shall be validly issued and
outstanding, fully paid and non-assessable.
3.6. This Agreement has been duly authorized, validly executed and
delivered on behalf of the Company and is a valid and binding
agreement and obligation of the Company
-4-
enforceable against the Company in accordance with its terms,
subject to limitations on enforcement by general principles of
equity and by bankruptcy or other laws affecting the
enforcement of creditors' rights generally, and the Company
has full power and authority to execute and deliver this
Agreement and the other agreements and documents contemplated
hereby and to perform its obligations hereunder and
thereunder.
3.7. The execution, delivery and performance of this Agreement and
the Certificate of Designation, the issuance of any of the
Shares and the consummation of the transactions contemplated
by this Agreement and the Certificate of Designation by the
Company, will not (i) conflict with or result in a breach of
or a default under any of the terms or provisions of, (A) the
Company's certificate of incorporation or by-laws, or (B) of
any material provision of any indenture, mortgage, deed of
trust or other material agreement or instrument to which the
Company is a party or by which it or any of its material
properties or assets is bound, (ii) result in a violation of
any material provision of any law, statute, rule, regulation,
or any existing applicable decree, judgment or order by any
court, Federal or state regulatory body, administrative
agency, or other governmental body having jurisdiction over
the Company, or any of its material properties or assets or
(iii) result in the creation or imposition of any material
lien, charge or encumbrance upon any material property or
assets of the Company or any of its subsidiaries pursuant to
the terms of any agreement or instrument to which any of them
is a party or by which any of them may be bound or to which
any of their property or any of them is subject except in the
case of clauses (i)(B) or (iii) for any such conflicts,
breaches, or defaults or any liens, charges, or encumbrances
which would not have a Material Adverse Effect.
3.8. No consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the
part of the Company is required in connection with the valid
execution and delivery of this Agreement or the offer, sale or
issuance of the Shares or the consummation of any other
transaction contemplated by this Agreement (other than any
filings which may be required to be made by the Company with
the Commission, or Nasdaq or pursuant to any state or "blue
sky" securities laws subsequent to the Closing).
3.9. There is no action, suit, claim or proceeding before or by any
court or governmental agency or body, domestic or foreign, now
pending against or affecting the Company, or any of its
properties, which questions the validity of this Agreement or
the transactions contemplated thereby or any action taken or
to be take pursuant thereto. There is no action, suit, claim
or proceeding before or by any court or governmental agency or
body, domestic or foreign, now pending against or affecting
the Company, or any of its properties, which, if adversely
determined, is reasonably likely to result in a Material
Adverse Effect.
3.10. Subsequent to the dates as of which information is given in
the Public Documents, except as contemplated herein, the
Company has not incurred any material liabilities or material
obligations, direct or contingent, or entered into any
material transactions not in the ordinary course of business.
-5-
3.11. The Company has sufficient title and ownership of all
trademarks, service marks, trade names, copyrights, patents,
trade secrets and other proprietary rights ("Intellectual
Property") necessary for its business as now conducted and as
proposed to be conducted as described in the Public Documents
or the Commission Documents except for any of the foregoing,
the absence of which would not reasonably be likely to result
in a Material Adverse Effect and, to its knowledge without any
conflict with or infringement of the rights of others. Except
as set forth in the Public Documents or the Commission
Documents, there are no material outstanding options, licenses
or agreements of any kind relating to the Intellectual
Property, nor is the Company bound by or party to any material
options, licenses or agreements of any kind with respect to
the Intellectual Property of any other person or entity,
except for that certain security interest in and to all of the
Company's patents, copyrights and trademarks granted to
Hewlett-Packard Company on or about June 25, 1999 and renewed
on or about April 9, 2001.
3.12. The Company has complied and will comply with all applicable
federal and state securities laws in connection with the
offer, issuance and sale of the Shares hereunder. The Company
will continue to take all action necessary to continue the
listing or trading of its Common Stock on the Nasdaq National
Market or any relevant market or system, if applicable, and
will comply in all material respects with the Company's
reporting, listing (including, without limitation, the listing
of the Conversion Shares issuable to the Purchasers upon
conversion of the Preferred Shares) or other obligations under
the rules of the Nasdaq National Market or any relevant market
or system. The Company shall comply with all applicable laws,
rules, regulations and orders.
3.13. The Company will promptly notify the Purchasers of (a) its
receipt of notice of the issuance by the Commission of any
stop order or other suspension of the effectiveness of the
Registration Statement and (b) its becoming aware of the
happening of any event as a result of which the prospectus
included in the Registration Statement includes an untrue
statement of a material fact or omits to state a material fact
required to be stated therein, or which makes it necessary to
change the Registration Statement in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
3.14. Neither this Agreement or the Schedules hereto contain any
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made
herein or therein, in the light of the circumstances under
which they were made herein or therein, not misleading.
3.15. The authorized capital stock of the Company and the shares
thereof issued and outstanding as of December 16, 2001 are set
forth on Schedule 3(o) attached hereto. All of the outstanding
shares of the Company's Common Stock have been duly and
validly authorized, and are fully paid and non-assessable.
Except as set forth in this Agreement, the Public Documents,
the Commission Documents or on Schedule 3(o) attached hereto,
as of December 16, 2001, no shares of Common Stock are
entitled to preemptive rights or registration rights and there
are no
-6-
outstanding options, warrants, scrip, rights to subscribe to,
call or commitments of any character whatsoever relating to,
or securities or rights convertible into, any shares of
capital stock of the Company. Furthermore, except as set forth
in this Agreement, in the Public Documents, the Commission
Documents or on Schedule 3(o) as of the date hereof, there are
no contracts, commitments, understandings, or arrangements by
which the Company is or may become bound to issue additional
shares of the capital stock of the Company or options,
securities or rights convertible into shares of capital stock
of the Company. Except as disclosed in the Commission
Documents and except for customary transfer restrictions
contained in agreements entered into by the Company in order
to sell restricted securities, as of the date hereof, the
Company is not a party to any agreement granting registration
rights to any person with respect to any of its equity or debt
securities. The Company is not a party to, and it has no
knowledge of, any agreement restricting the voting or transfer
of any shares of the capital stock of the Company. The offer
and sale of all capital stock, convertible securities, rights,
warrants, or options of the Company issued prior to the
Closing complied with all applicable federal and state
securities laws, and no stockholder has a right of rescission
or damages with respect thereto which is reasonably likely to
have a Material Adverse Effect. The Company has furnished or
made available to the Purchasers true and correct copies of
the Company's Certificate of Incorporation as in effect on the
date hereof (the "Certificate"), and the Company's Bylaws as
in effect on the date hereof (the "Bylaws").
3.16. The Company will comply in all material respects with the
Company's reporting, filing and other obligations under the
bylaws or rules of the Nasdaq National Market or any relevant
market or system.
3.17. The Company shall not issue any press release or otherwise
make any public statement or announcement with respect to this
Agreement or the transactions contemplated hereby or the
existence of this Agreement without the prior written consent
of the Purchasers, which shall not be unreasonably withheld.
Notwithstanding the foregoing, in the event the Company is
required by law or regulation to issue a press release or
otherwise make a public statement or announcement with respect
to this Agreement or the transaction contemplated hereby prior
to or after the Closing, the Company shall consult with the
Purchasers on the form and substance of such press release or
other disclosure.
3.18. The proceeds from the sale of the Preferred Shares and the
Warrant Shares will be used by the Company for working capital
purposes and shall not be used to repay any outstanding
indebtedness or any loans to officer, director, affiliate or
insider of the Company.
3.19. During the period commencing on the Closing Date and ending on
the second (2nd) anniversary thereof, the Company covenants
and agrees to promptly notify (in no event later than five (5)
days after making or receiving an applicable offer) in writing
(a "Rights Notice") the Purchasers of the terms and conditions
of any proposed Subsequent Financing. For the purposes hereof,
"Subsequent Financing" shall mean a subsequent offer or sale
to, or exchange with (or other type of distribution to), any
-7-
third party, of Common Stock or any securities convertible,
exercisable or exchangeable into Common Stock, including debt
securities. The Rights Notice shall describe, in reasonable
detail, the proposed Subsequent Financing, the proposed
closing date of the Subsequent Financing, which shall be
within sixty (60) calendar days from the date of the Rights
Notice, including, without limitation, all of the terms and
conditions thereof. The Rights Notice shall provide each
Purchaser an option (the "Rights Option ") during the thirty
(30) trading days following delivery of the Rights Notice (the
"Option Period") to inform the Company whether the Purchasers
will purchase all or part of the securities being offered up
to such Purchaser's pro rata portion of the Purchase Price in
such Subsequent Financing on the same, absolute terms and
conditions as contemplated by such Subsequent Financing (the
"First Refusal Rights"). Delivery of any Rights Notice
constitutes a representation and warranty by the Company that
there are no other material terms and conditions,
arrangements, agreements or otherwise except for those
disclosed in the Rights Notice, to provide additional
compensation to any party participating in any proposed
Subsequent Financing, including, but not limited to,
additional compensation based on changes in the purchase price
or any type of reset or adjustment of a purchase or conversion
price or to issue additional securities at any time after the
closing date of a Subsequent Financing. If the Company does
not receive notice of exercise of the Rights Option from any
of the Purchasers within the Option Period, the Company shall
have the right to close the Subsequent Financing on the
scheduled closing date with a third party; provided that all
of the terms and conditions of the closing are the same as
those provided to the Purchasers in the Rights Notice. If the
closing of the proposed Subsequent Financing does not occur
within ten (10) business days of the scheduled closing date,
any closing of the contemplated Subsequent Financing or any
other Subsequent Financing shall be subject to all of the
provisions of this Section 3(s), including, without
limitation, the delivery of a new Rights Notice. The
provisions of this Section 3(s) shall not apply to issuances
of financing securities in connection with strategic
partnerships, licensing of the Company's functionality under
strategic license agreements, employee and consultant stock
options, acquisition candidates, fees paid to an investment
banker and public secondary offerings.
3.20. During the period commencing on the Initial Closing Date and
ending on the first (1st) anniversary of the Initial Closing
Date, if the Company enters into any Subsequent Financing on
terms more favorable than the terms governing the Preferred
Shares, then the Purchasers in their sole discretion may
exchange the Preferred Shares for the securities issued or to
be issued in the Subsequent Financing. The Company covenants
and agrees to promptly notify in writing the Purchasers of the
terms and conditions of any such proposed Subsequent
Financing.
3.21. The Company covenants and agrees to undertake a formal process
under the guidance and advice of ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., Inc.
to explore strategic transactions for the Company.
4. Conditions Precedent. The obligations hereunder of both the Company and
the Purchasers to enter into this Agreement and sell and purchase the
Preferred Shares and the Warrants is subject to their satisfaction or
waiver, at or before the Closing, of each of the conditions set forth
below. These conditions are for the Company's and the
-8-
Purchasers' sole benefit respectively, and they may waive their own
rights at any time in their sole discretion.
4.1. The parties shall have executed and delivered this Agreement.
4.2. The Company shall file the Certificate of Designation
designating the Preferred Stock with the Secretary of State of
the State of Delaware and shall have delivered a certified
copy of the Certificate of Designation to the Purchasers.
4.3. The Registration Statement continues to be effective.
4.4. Prior to each Closing, the Company shall have filed a
prospectus supplement to the Registration Statement with
regard to the Shares issued at each Closing.
4.5. The Company shall have delivered certificates evidencing the
Preferred Shares and the Warrants to the Purchasers.
4.6. Upon receipt of the certificates evidencing the Preferred
Shares, the Purchasers shall have delivered to the Company
immediately available funds as payment in full of the Purchase
Price for the Preferred Shares and the Warrants.
4.7. Each of the representations and warranties of the Company and
the Purchasers shall be true and correct in all material
respects as of each Closing Date, except for representations
and warranties that speak as of a particular date, which shall
be true and correct in all material respects as of such date.
4.8. The Company shall have performed, satisfied and complied in
all respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or
complied with by the Company at or prior to each Closing Date.
4.9. Trading in the Company's Common Stock shall not have been
suspended by the Commission (except for any suspension of
trading of limited duration agreed to by the Company, which
suspension shall be terminated prior to the Closing), and, at
any time prior to the Closing Date, trading in securities
generally as reported by Bloomberg Financial Markets
("Bloomberg") shall not have been suspended or limited, or
minimum prices shall not have been established on securities
whose trades are reported by Bloomberg, or on the New York
Stock Exchange, nor shall a banking moratorium have been
declared either by the United States or New York State
authorities, nor shall the Company have suffered a Material
Adverse Effect.
-9-
4.10. At each Closing, the Purchasers shall have received an opinion
of counsel to the Company, dated the date of such Closing, in
the form of Exhibit E hereto and such other certificates and
documents as the Purchasers or its counsel shall reasonably
require incident to such Closing.
4.11. As of the Initial Closing Date, the Company shall have
reserved out of its authorized and unissued Common Stock,
solely for the purpose of effecting the conversion of the
Preferred Shares and exercise of the Warrants, a number of
shares of Common Stock equal to at least 200% of the aggregate
number of Shares issuable upon conversion of the Preferred
Shares and exercise of the Warrants on the Initial Closing
Date.
4.12. As a condition only to the Second Closing, the average of the
five (5) lowest volume weighted average prices of the Common
Stock during the fifteen (15) trading days immediately prior
to the Second Closing Date must equal or exceed $.12.
4.13. The Company shall have delivered to the Purchasers a
secretary's certificate, dated as of each Closing Date, as to
(i) the Resolutions, (ii) the Certificate, (iii) the Bylaws,
each as in effect at the Closing, and (iv) the authority and
incumbency of the officers of the Company executing the
Transaction Documents and any other documents required to be
executed or delivered in connection therewith.
4.14. All fees and expenses required to be paid by the Company shall
have been or authorized to be paid by the Company as of the
Closing Date.
4.15. On the Second Closing Date, the Company shall have delivered
to the Purchasers a certificate of an executive officer of the
Company, dated as of the Second Closing Date, confirming the
accuracy of the Company's representations, warranties and
covenants as of the Initial Closing Date and confirming the
compliance by the Company with the conditions precedent set
forth in this Section 4 as of the Second Closing Date.
5. Fees and Expenses. The Company and each Purchaser shall pay its
respective fees and expenses related to the transactions contemplated
by this Agreement; except that the Company shall pay on the Closing
Date, all reasonable fees and expenses, exclusive of disbursements and
out-of-pocket expenses, incurred by the Purchasers of up to $30,000 in
connection with the preparation, negotiation, execution and delivery of
this Agreement, the Certificate of Designation and the Warrants.
-10-
6. Indemnification.
6.1. The Company will indemnify and hold harmless the Purchasers,
each of their directors, fund managers and officers, and each
person, if any, who controls the Purchasers within the meaning
of Section 15 of the Securities Act, or Section 20(a) of the
Exchange Act, from and against any third party claims against
such Purchasers or persons identified above that result in
losses, claims, damages, liabilities and expenses (including
reasonable costs of defense and investigation and all
reasonable attorneys' fees) to which the Purchasers, each of
their directors, fund managers and officers, and each person,
if any, who controls the Purchasers may become subject, under
the Securities Act or otherwise, insofar as such losses,
claims, damages, liabilities and expenses (or actions in
respect thereof) arise out of or are based upon, (i) any
untrue statement or alleged untrue statement of a material
fact contained, or incorporated by reference, in the
Registration Statement relating to the Common Stock being sold
to the Purchasers (including any Prospectus Supplement filed
in connection with the transactions contemplated hereunder
which are a part of it), or any amendment or supplement to it,
or (ii) the omission or alleged omission to state in that
Registration Statement or any document incorporated by
reference in the Registration Statement, a material fact
required to be stated therein or necessary to make the
statements therein not misleading, provided that the Company
shall not be liable under this Section 6(a) to the extent that
a court of competent jurisdiction shall have determined by a
final judgment (with no appeals available) that such loss,
claim, damage, liability or action resulted directly from any
such acts or failures to act, undertaken or omitted to be
taken by the Purchasers or such person through its bad faith
or willful misconduct; provided, however, that the foregoing
indemnity shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent,
arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information
furnished to the Company by the Purchasers expressly for use
in the Registration Statement, any preliminary prospectus or
the prospectus (or any amendment or supplement thereto); and
provided, further, that with respect to the prospectus, the
foregoing indemnity shall not inure to the benefit of the
Purchasers or any such person from whom the person asserting
any loss, claim, damage, liability or expense purchased Common
Stock, if copies of the prospectus were timely delivered to
the Purchasers pursuant hereto and a copy of the prospectus
(as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent
or given by or on behalf of the Purchasers or any such person
to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the
Common Stock to such person, and if the prospectus (as so
amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense.
6.2. The Company will reimburse the Purchasers and each such
controlling person promptly upon demand for any legal or other
costs or expenses reasonably incurred by the Purchasers or any
controlling person in investigating, defending against, or
preparing to defend against any such claim, action, suit or
proceeding, except that the Company will not be liable to the
extent a claim or action which results in a loss, claim,
damage, liability or expense arises out of, or is based upon,
an untrue statement, alleged untrue statement, omission or
alleged omission, included in any Registration Statement,
prospectus or Prospectus Supplement or any amendment or
supplement to the thereto in reliance upon, and in conformity
with, written information
-11-
furnished by the Purchasers to the Company for inclusion in
the Registration Statement, prospectus or Prospectus
Supplement.
7. Indemnification Procedures. Promptly after a person receives notice of
a claim or the commencement of an action for which the person intends
to seek indemnification under Section 6, the person will notify the
indemnifying party in writing of the claim or commencement of the
action, suit or proceeding, but failure to notify the indemnifying
party will not relieve the indemnifying party from liability under
Section 6, except to the extent such indemnifying party has been
materially prejudiced by the failure to give notice. The indemnifying
party will be entitled to participate in the defense of any claim,
action, suit or proceeding as to which indemnification is being sought,
and if the indemnifying party acknowledges in writing the obligation to
indemnify the party against whom the claim or action is brought, the
indemnifying party may (but will not be required to) assume the defense
against the claim, action, suit or proceeding with counsel satisfactory
to it. After an indemnifying party notifies an indemnified party that
the indemnifying party wishes to assume the defense of a claim, action,
suit or proceeding the indemnifying party will not be liable for any
legal or other expenses incurred by the indemnified party in connection
with the defense against the claim, action, suit or proceeding except
that if, in the opinion of counsel to the indemnifying party, one or
more of the indemnified parties should be separately represented in
connection with a claim, action, suit or proceeding the indemnifying
party will pay the reasonable fees and expenses of one separate counsel
for the indemnified parties. Each indemnified party, as a condition to
receiving indemnification as provided in Section 6, will cooperate in
all reasonable respects with the indemnifying party in the defense of
any action or claim as to which indemnification is sought. No
indemnifying party will be liable for any settlement of any action
effected without its prior written consent. No indemnifying party will,
without the prior written consent of the indemnified party, effect any
settlement of a pending or threatened action with respect to which an
indemnified party is, or is informed that it may be, made a party and
for which it would be entitled to indemnification, unless the
settlement includes an unconditional release of the indemnified party
from all liability and claims which are the subject matter of the
pending or threatened action.
If for any reason the indemnification provided for in this agreement is
not available to, or is not sufficient to hold harmless, an indemnified party in
respect of any loss or liability referred to in Section 6, each indemnifying
party will, in lieu of indemnifying the indemnified party, contribute to the
amount paid or payable by the indemnified party as a result of the loss or
liability, (i) in the proportion which is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand and by the
indemnified party on the other from the sale of stock which is the subject of
the claim, action, suit or proceeding which resulted in the loss or liability or
(ii) if that allocation is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits of the sale of
stock, but also the relative fault of the indemnifying party and the indemnified
party with respect to the statements or omissions which are the subject of the
claim, action, suit or proceeding that resulted in the loss or liability, as
well as any other relevant equitable considerations.
8. Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by and interpreted in accordance with the laws of the State of
New York without giving effect to the rules governing the conflicts of
laws. Each of the parties consents to the exclusive jurisdiction of the
Federal courts whose districts encompass any part of the County of New
York located in the City of New York in connection with any dispute
arising under this
-12-
Agreement and hereby waives, to the maximum extent permitted by law,
any objection, including any objection based on forum non conveniens,
to the bringing of any such proceeding in such jurisdictions. Each
party waives its right to a trial by jury. Each party to this Agreement
irrevocably consents to the service of process in any such proceeding
by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such party at its address set forth herein or its
agent. Nothing herein shall affect the right of any party to serve
process in any other manner permitted by law.
9. Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, express overnight
courier, registered first class mail, or telecopier, initially to the
address set forth below, and thereafter at such other address, notice
of which is given in accordance with the provisions of this Section.
(a) if to the Company:
The viaLink Company
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer and
Chief Financial Officer
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Purchasers:
At the address of such Purchaser set forth
on Exhibit A with a copy to such Purchaser's
counsel as set forth on Exhibit A:
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when receipt is
acknowledged, if telecopied; or when actually received or refused if sent by
other means.
10. Entire Agreement. This Agreement constitutes the entire understanding
and agreement of the parties with respect to the subject matter hereof
and supersedes all prior and/or contemporaneous oral or written
proposals or agreements relating thereto all of which are merged
herein. This Agreement may not be amended or any provision hereof
waived in whole or in part, except by a written amendment signed by
both of the parties.
11. Counterparts. This Agreement may be executed by facsimile signature and
in counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
[end of page]
-13-
IN WITNESS WHEREOF, this Agreement was duly executed on the date first
written above.
THE VIALINK COMPANY
By:
--------------------------------
Name:
Title:
PURCHASER:
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
-14-
EXHIBIT A
PURCHASERS / NUMBER OF PREFERRED SHARES AND WARRANTS
NAMES AND ADDRESSES NUMBER OF PREFERRED SHARES DOLLAR AMOUNT
OF PURCHASERS & WARRANTS PURCHASED OF INVESTMENT
------------------- -------------------------- -------------
SDS Merchant Fund, L.P. Preferred Shares: Initial Closing:
c/o SDS Capital Partners Initial Closing: $2,000,000
One Sound Shore Drive Second Closing: Second Closing:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Series A Warrants: $3,000,000
Attention: ▇▇▇▇▇ ▇▇▇▇▇ Series B Warrants:
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Jurisdiction: Delaware
With a copy to:
Jenkens & ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
The Chrysler Building
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
[Name of Purchaser] Preferred Shares: Initial Closing:
Initial Closing: $
--------------------- Second Closing: Second Closing:
Series A Warrants: $
---------------------
Fax No.: ( ) -
--- --- ----
Attention:
Jurisdiction:
[Name of Purchaser] Preferred Shares: Initial Closing:
Initial Closing: $
--------------------- Second Closing: Second Closing:
Series A Warrants: Third Closing:
--------------------- $
Fax No.: ( ) -
--- --- ----
Attention:
Jurisdiction:
-15-
EXHIBIT B
FORM OF CERTIFICATE OF DESIGNATION
EXHIBIT C
FORM OF SERIES A WARRANT
EXHIBIT D
FORM OF SERIES B WARRANT
-16-
