EXHIBIT 10.39
AMENDMENT NUMBER TWO
TO SECURITIES PURCHASE AGREEMENT
This Amendment Number Two to Securities Purchase Agreement (this
"Amendment") dated as of November 14, 2002, is entered into between VIEWLOCITY,
INC., a Delaware corporation (the "Company"), and each of the entities
identified on SCHEDULE I attached hereto (each a "Purchaser," collectively, the
"Purchasers"), with reference to the following:
RECITALS
A. The Company and the Purchasers are parties to that certain
Securities Purchase Agreement, dated as of December 7, 2000, as amended by that
certain Amendment Number One to Securities Purchase Agreement, dated as of
February 23, 2001 (as amended, the "Securities Purchase Agreement").
B. The Company has entered into that certain Agreement and Plan of
Merger, by and between the Company and SynQuest, Inc., a Georgia corporation
("SynQuest"), dated as of August 30, 2002 (the "Merger Agreement"), pursuant to
which the Company will merger with and into SynQuest (the "SynQuest Merger"),
with SynQuest as the surviving corporation (the "Surviving Corporation").
C. SynQuest has entered into a Stock Purchase Agreement, dated as of
August 30, 2002, as amended September 20, 2002, with the investors listed on
Schedule I thereto (the "SynQuest Stock Purchase Agreement"), pursuant to which
such investors will invest an aggregate amount of up to $33,000,000 in the
Surviving Corporation (the "Additional Investment").
D. In connection with the Merger and the Additional Investment,
the Company and the Purchasers desire to amend certain of the provisions of the
Securities Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Purchasers hereby
agree as follows:
1. DEFINED TERMS. Capitalized terms not otherwise defined herein shall
have the meaning ascribed thereto in the Securities Purchase Agreement.
2. AMENDMENTS TO THE SECURITIES PURCHASE AGREEMENT. The parties hereby
agree that, effective upon the Closing (as that term is defined in the Merger
Agreement) of the Merger, the Securities Purchase Agreement is amended as
follows:
a. ARTICLE I of the Securities Purchase Agreement is hereby amended by
adding a new SECTION 1.8 as follows:
1.8 MODIFICATION OF NOTES IN CONNECTION WITH SYNQUEST MERGER.
(a) TOTAL LIABILITY FIXED. Notwithstanding anything herein to
the contrary, as of the Closing of the Merger, the Notes shall cease
to bear interest on the unpaid balances thereof, and the aggregate
principal of and accrued interest on the Notes shall be fixed at
$11,500,000.
(b) PARTIAL PREPAYMENT. Within one business day following the
closing of the Additional Investment, and with a portion of the
proceeds therefrom, the Surviving Corporation shall make a partial
prepayment of the Notes in the aggregate amount of $5,000,000 in
accordance with Section 1.7(b) herein (the "Prepayment").
(c) CONTINUING OBLIGATION OF SURVIVING CORPORATION. Promptly
following the Prepayment, the Notes shall be canceled in exchange for
new senior subordinated notes of the Surviving Corporation (the "New
Notes"), in an aggregate principal amount of $6,500,000, to bear
interest on the unpaid balances thereof until the principal thereof
shall be paid in full at the rate of 8.0% per annum, based upon a 365
day year for actual days elapsed, and to otherwise be substantially
identical in form and substance to the Notes, as set forth in EXHIBIT
A attached hereto. The Prepayment and the New Notes collectively shall
represent satisfaction in full of the Notes.
b. ARTICLE IV of the Securities Purchase Agreement is hereby deleted and
replaced in its entirety with the following:
4.1 AFFIRMATIVE COVENANTS OF THE COMPANY OTHER THAN REPORTING
REQUIREMENTS. Without limiting any other covenants and provisions hereof,
the Company covenants and agrees that until the outstanding principal
amount of the Notes (together with all interest thereon) shall have been
repaid in full, it will perform and observe the following covenants and
provisions, and will cause each Subsidiary, if and when such Subsidiary
exists, to perform and observe such of the following covenants and
provisions as are applicable to such Subsidiary:
(a) PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION. Duly and
timely file all tax returns and reports required to be filed in
compliance with all applicable laws, regulations, rules, and
procedures and pay all taxes, assessments, and other governmental
charges imposed upon the Company or any of its Subsidiaries or any of
the assets of the Company or any of its Subsidiaries or in respect of
any franchises, business, income, or assets of the Company or any of
its Subsidiaries before any penalty or interest accrues thereon, and
all claims (including claims for labor, services, materials, and
supplies) that have become due and payable and that by law have or may
become a Lien (other than Permitted Liens) upon any of such assets,
prior to the time when any material penalty or fine shall be incurred
with respect thereto except where the failure to so file or pay such
taxes, assessments, or other governmental charges could nor reasonably
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expected to have a Material Adverse Effect; PROVIDED, HOWEVER, that no
such charge, claim, or Lien need be paid if it is being contested in
good faith by appropriate proceedings promptly instituted and
diligently conducted and if such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall
have been made therefor.
(b) MAINTENANCE OF INSURANCE. At its expense and for so long as
the Notes, the Warrants, or the Warrant Shares remain outstanding, the
Company shall maintain with a reputable insurance company or
association insurance in such amounts and covering its properties and
assets and such risks as ordinarily are insured against by other
persons engaged in the same or similar businesses and owning similar
properties in the same general areas in which the Company or any
Subsidiary operates for the type and scope of its properties and
businesses.
(c) COMPLIANCE WITH LAWS. Comply, and cause all Subsidiaries to
comply, with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority, where
noncompliance could reasonably be expected to have a Material Adverse
Effect.
4.2 NEGATIVE COVENANTS OF THE COMPANY. Without limiting any other
covenants and provisions hereof, the Company covenants and agrees that
until the outstanding principal amount of the Notes (together with all
interest thereon) shall have been repaid in full, it will comply with and
observe the following covenants and provisions, and will cause each
Subsidiary, if and when such Subsidiary exists, to comply with and observe
such of the following covenants and provisions as are applicable to such
Subsidiary, and will not:
(a) LIMITATION ON INDEBTEDNESS. At any time permit the aggregate
amount of Senior Indebtedness to exceed $7,500,000 at any one time
outstanding. "Senior Indebtedness" shall mean any indebtedness that is
senior in priority to the Senior Subordinated Notes.
(b) DISTRIBUTIONS. Except for Distributions declared and paid
solely in Common Stock of the Company, or for cash dividends paid with
the Purchasers' prior written consent (which consent shall not be
unreasonably withheld), declare or pay any dividends, purchase,
repurchase, redeem, retire, or otherwise acquire for value any of its
capital stock (or rights, options or warrants to purchase such shares)
now or hereafter outstanding, return any capital to its stockholders
as such, or make any distribution of assets to its stockholders as
such, and will not make any payment in cash, securities or other
property or purchase on or in respect of, or repurchase, redeem,
retire or otherwise acquire for value, any indebtedness of the Company
that is subordinated by its express terms in right of payment to the
Notes, or permit any Subsidiary to do any of the foregoing (such
transactions being hereinafter referred to as "DISTRIBUTIONS"), except
that any such Subsidiary may declare and make payment of cash and
stock dividends, return capital and make distributions of assets to
the Company, and EXCEPT as specifically provided for in the Company's
Certificate of Incorporation or if such
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dividend, purchase, repurchase, redemption, retirement or other
acquisition for value is solely in the form of capital stock (or
rights, options or warrants to purchase such shares) of the Company;
provided, HOWEVER, that nothing herein contained shall prevent the
Company from:
(i) effecting a stock split or declaring or paying any
dividend consisting of shares of any class of capital stock to
the holders of shares of such class of capital stock, or
(ii) redeeming any stock of a deceased stockholder out of
insurance held by the Company on that stockholder's life, or
(iii) repurchasing the shares of Common Stock at the
original cost thereof held by officers, employees, directors or
consultants of the Company which are subject to restrictive stock
purchase agreements under which the Company has the option, to
repurchase such shares upon the occurrence of certain events,
including the termination of employment,
if in the case of any such transaction the payment can be made in
compliance with the other terms of this Agreement.
(c) DEALINGS WITH AFFILIATES AND OTHERS. Other than as
contemplated by this Agreement, and other than transactions in the
ordinary course of business involving less than $50,000, enter into
any transaction, including, without limitation, any loans or
extensions of credit or royalty agreements, with any officer or
director of the Company or any Subsidiary or holder of any class of
capital stock of the Company, or any member of their respective
immediate families or any corporation or other entity directly or
indirectly affiliated with one or more of such officers, directors or
stockholders or members of their immediate families unless such
transaction is approved in advance by a majority of disinterested
members of the Board of Directors, or absent such Board of Directors
approval, by the Majority Holders.
(d) CONDUCT OF BUSINESS. Engage in any business other than the
business currently conducted by them as of the Closing and other lines
of business reasonably incidental or related thereto.
(e) UPSTREAM LIMITATIONS. Enter into any agreement, contract, or
arrangement restricting the ability of any Subsidiary of Company to
pay or make dividends or distributions in cash or kind, to make loans,
advances, or other payments of whatsoever nature or to make transfers
or distributions of all or any part of its properties or assets to
Company or to any Subsidiary of the Company.
4.3 REPORTING REQUIREMENTS. The Company will furnish the following to
each Purchaser who holds Notes with at least $1,000,000 in principal amount
outstanding in the aggregate; provided, however, that following the
consummation of a Qualifying Public Offering, none of the following
statements, reports, or documents shall be delivered to any such Purchaser
unless and until such Purchaser has delivered to the
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Company a non-disclosure agreement and an agreement not to trade on the
disclosed information, in each case, in form and substance reasonably
acceptable to the Company: as soon as practicable after the end of the
reporting date required by the Securities Exchange Commission ("SEC"),
Company will provide a copy of the applicable SEC report ("SEC Reports") to
the applicable Purchasers. Public availability of such reports on XXXXX
shall constitute delivery to the applicable Purchasers hereunder. If the
Company ceases to be a publicly traded entity during the term hereof, then
the Company will provide reports to the applicable Purchasers that are
materially similar to the SEC Reports and on the same time schedule as
required by the SEC of publicly traded entities and reporting materials
that are regularly distributed to the Company's Board of Directors ("Board
Materials"); provided that the Company may redact portions of such Board
Materials that it deems to be confidential and reasonably believes should
not be produced.
c. SECTION 6.1 of the Securities Purchase Agreement is hereby amended by
deleting and replacing in its entirety the definition of "Event of Default" with
the following:
An "EVENT OF DEFAULT" shall exist if any of the following conditions
or events shall occur and be continuing:
(a) the Company defaults in the payment of any amounts due under
any one or more of the Notes when due;
(b) the Company or any of its Subsidiaries defaults in
observance of any covenants contained in Sections 4.1 or 4.3 which
continues unremedied 20 days after written notice thereof is sent to
the Company or the Company or any of its Subsidiaries defaults in
observance of any covenants contained elsewhere in this Agreement or
any of the other Financing Documents (other than a covenant that is
dealt with elsewhere in this definition);
(c) the Company or any of its Subsidiaries defaults (after
applicable notice and any applicable grace period, and as determined
by a court of competent jurisdiction) in the payment of any principal
or interest or any other amount in respect of or in any covenant,
term, or provision governing Indebtedness for Borrowed Money (other
than the Notes) of the Company or such Subsidiary with an aggregate
amount outstanding in excess of $250,000, the effect of which default
is (i) to cause or permit the holder or holders of such indebtedness,
irrespective of whether exercised, to accelerate the maturity of the
obligations thereunder, or (ii) to cause the termination of the
agreement or instrument evidencing such Indebtedness for Borrowed
Money;
(d) excluding any creditors or accounts reserved for in the
Company's financial statement dated June 30, 2002, a final judgment or
final order of a court of competent jurisdiction for the payment of
money aggregating in excess of $200,000 (in excess of the amount
covered by insurance) is rendered against the
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Company or any of its Subsidiaries which judgment or order remains
uncontested, unappealed, unpaid, unstayed for a period of 45 days;
(e) any representation or warranty in this Agreement or in any
certificate, financial statement or other document delivered pursuant
to this Agreement shall prove to have been incorrect in any material
respect when made where such failure to be correct has a Material
Adverse Effect;
(f) the Company or any of its Subsidiaries shall commence a
voluntary case or other proceeding seeking liquidation, reorganization
or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing; or
(g) an involuntary case or other proceeding shall be commenced
against the Company or any of its Subsidiaries seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Company or any of its
Subsidiaries under the federal bankruptcy laws as now or hereafter in
effect.
c. ARTICLE VIII of the Securities Purchase Agreement is hereby deleted in
its entirety.
3. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and
warrants to the Purchasers that (a) the execution, delivery, and performance of
this Amendment is within the Company's corporate powers, have been duly
authorized by all necessary corporate action, and are not in contravention of
any law, rule, or regulation, or any order, judgment, decree, writ, injunction,
or award of any arbitrator, court, or governmental authority, or of the terms of
its charter or bylaws, or of any contract or undertaking to which it is a party
or by which any of its properties may be bound or affected, and (b) this
Amendment and the Securities Purchase Agreement, constitute the Company's legal,
valid, and binding obligation, enforceable against the Company in accordance
with its terms, (c) this Amendment has been duly executed and delivered by the
Company.
4. EXPENSES. The Company agrees, whether the transactions hereby
contemplated shall be consummated, to pay the reasonable legal fees of Xxxxxxx,
Xxxxxxx & Xxxxxxxx LLP, special counsel to the Purchasers, incurred in
connection with the negotiation and preparation of
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this Amendment, and in connection with the transactions contemplated hereby and
agrees to reimburse the Purchasers for their reasonable out-of-pocket costs and
expenses (exclusive of any salaries or other overhead items) incurred in
connection with the transactions contemplated hereby (collectively, the
"Expenses"); provided, however, that the Company shall not pay aggregate legal
fees and Expenses in excess of $15,000.
5. CONSTRUCTION. This Amendment shall be governed by and construed in
accordance with the laws of the State of California.
6. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Amendment by signing
any such counterpart. Delivery of an executed counterpart of this Amendment by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile also shall deliver an original executed
counterpart of this Amendment, but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Amendment.
7. AMENDMENTS. This Amendment cannot be altered, amended, changed or
modified in any respect or particular unless each such alteration, amendment,
change or modification shall have been agreed to by each of the parties and
reduced to writing in its entirety and signed and delivered by each party.
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IN WITNESS WHEREOF, the parties have entered into this Amendment as of
the date first above written.
VIEWLOCITY, INC.,
By: /s/ Xxxxx Xxxxx
-----------------------------------------
Name: Xxxxx Xxxxx
Title: Senior Vice President and Chief Financial
Officer
WESTBRIDGE VENTURES, L.P.
By: Westbridge Ventures, L.L.C., its
General Partner
By: TCW Asset Management Company, as
Managing Member
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Managing Director
By: TCW Asset Management Company, as
Managing Member
By: /s/ Xxxxxx X. Sun
-----------------------------
Name: Xxxxxx X. Sun
Title: Vice President
[Signature page continues]
TCW LEVERAGED INCOME TRUST IV, L.P.
By: TCW Asset Management Company, as its
Investment Adviser
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
By: TCW (XXXX XX), L.L.C., as General Partner
By: TCW Asset Management Company, as
its Managing Member
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Managing Director
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
[Signature page continues]
TCW SHARED OPPORTUNITY FUND III, L.P.
By: TCW Asset Management Company, its
investment adviser
By: /s/ Xxxxxx X. Xxxxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Managing Director
By: /s/ X. Xxxxx Xxxxxxxx
---------------------------------
Name: X. Xxxxx Xxxxxxxx
Title: Vice President
SHARED OPPORTUNITY FUND IIB, L.L.C.
By: TCW Asset Management Company, as its
Investment Adviser
By: /s/ Xxxxxx X. Xxxxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Managing Director
By: /s/ X. Xxxxx Xxxxxxxx
---------------------------------
Name: X. Xxxxx Xxxxxxxx
Title: Vice President
SCHEDULE I
(PURCHASERS)
WestBridge Ventures, L.P.
TCW Leveraged Income Trust IV, L.P.
TCW Shared Opportunity Fund III, L.P.
Shared Opportunity Fund IIB, L.L.C.