EXHIBIT: 99.1
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this "Agreement"), dated as of November 6, 2001,
is entered into by and between THE VIALINK COMPANY, a Delaware corporation (the
"Company"), and SDS MERCHANT FUND, L.P., a Delaware limited partnership (the
"Purchaser"), for the purchase and sale of shares of the Company's Series B
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 Purchaser
and Purchaser 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 Purchaser hereby agree as follows:
1. PURCHASE PRICE.
(a) Upon the following terms and subject to the conditions contained
herein, the Purchaser hereby agrees to purchase 150 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 $1,500,000 (the
"Purchase Price"). The designation, rights, preferences and other terms and
provisions of the Series B Convertible Preferred Stock are set forth in the
Certificate of Designation of the Relative Rights and Preferences of the Series
B Convertible Preferred Stock attached hereto as Exhibit A (the "Certificate of
Designation").
(b) Upon the following terms and subject to the conditions contained
herein, the Purchaser shall be issued a warrant, in substantially the form
attached hereto as Exhibit B (the "Warrant"), to purchase 2,500,000 shares of
Common Stock. The Warrant shall be exercisable immediately and shall have an
exercise price equal to the Warrant Price (as defined in the Warrant).
(c) 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.
(d) 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 Warrant. Any shares of Common Stock issuable upon conversion of
the Preferred Stock and exercise of the Warrant (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."
(e) The Company agrees to issue and sell to the Purchaser and, in
consideration of and in express reliance upon the representations, warranties,
covenants, terms and conditions of this Agreement, the Purchaser agrees to
purchase the Preferred Shares and the Warrant. The closing under this Agreement
(the "Closing") shall take place no later than November 6, 2001 at the offices
of Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP, The Chrysler Building, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 1:00 p.m. (eastern time) upon the
satisfaction of each of the conditions set forth in Section 4 hereof (the
"Closing Date").
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER. The
Purchaser represents and warrants to the Company, and covenants for the benefit
of the Company, as follows:
(a) This Agreement has been duly authorized, validly executed and
delivered by the Purchaser and is a valid and binding agreement and obligation
of the Purchaser enforceable against the Purchaser 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 Purchaser 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.
(b) The Purchaser has received and carefully reviewed copies of the
Public Documents (as hereinafter defined). The Purchaser 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. The Purchaser, in making the
decision to purchase the Preferred Shares, has relied upon independent
investigation made by it and has not relied on any information or
representations made by third parties.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The Company
represents and warrants to the Purchaser, and covenants for the benefit of the
Purchaser, as follows:
(a) 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 standing in each
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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.
(b) The Company has furnished the Purchaser 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 June 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).
(c) The Shares to be issued by the Company to the Purchaser 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
(b) 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.
(d) The Company at all times shall remain a reporting company pursuant
to the Exchange Act.
(e) The Certificate of Designation and the Shares have been duly
authorized by all necessary corporate action and, when paid for by the Purchaser
and issued in accordance with the terms hereof, the Shares shall be validly
issued, will be fully paid and non-assessable.
(f) 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 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.
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(g) 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.
(h) 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).
(i) 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.
(j) 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.
(k) 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
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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.
(l) 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
Purchaser 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.
(m) The Company will promptly notify the Purchaser 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.
(n) 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.
(o) The authorized capital stock of the Company and the shares thereof
issued and outstanding as of November 2, 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 November 2, 2001, no shares
of Common Stock are entitled to preemptive rights or registration rights and
there are no 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.
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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 Purchaser 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").
(p) 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.
(q) 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 Purchaser, 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
Purchaser on the form and substance of such press release or other disclosure.
(r) If the Purchaser is unable to exercise its conversion rights or
exercise rights due to the limitations set forth in Section 7(a) of the
Certificate of Designation or Section 7(c) of the Warrant, the Board of
Directors of the Company shall use its best efforts to present and recommend to
the stockholders of the Company within sixty (60) days of such date upon which
the Purchaser is not able to exercise its conversion rights or exercise rights
due to the limitations set forth in Section 7(a) of the Certificate of
Designation or Section 7(c) of the Warrant, a proposal to approve such holder
acquiring in excess of 19.99% of the issued and outstanding shares of Common
Stock upon conversion of the Preferred Shares and/or exercise of the Warrant.
(s) 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 Purchaser 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 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 the Purchaser an option (the "Rights
Option") during the five (5) trading days following delivery of the Rights
Notice (the "Option Period") to inform the Company whether the Purchaser will
purchase all or part of the securities being offered in such Subsequent
Financing on the same, absolute terms and
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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 the Purchaser
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 Purchaser 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.
4. CONDITIONS PRECEDENT. The obligations hereunder of both the Company and
the Purchaser to enter into this Agreement and sell and purchase the Preferred
Shares and the Warrant 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 Purchaser's sole benefit respectively, and they may waive
their own rights at any time in their sole discretion.
(a) The parties shall have executed and delivered this Agreement.
(b) 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
Purchaser.
(c) The Registration Statement continues to be effective.
(d) The Company shall have filed a prospectus supplement describing
the particular terms of the Certificate of Designation.
(e) The Company shall have delivered certificates evidencing the
Preferred Shares to the Purchaser.
(f) Upon receipt of the certificates evidencing the Preferred Shares,
the Purchaser shall have delivered to the Company immediately available funds as
payment in full of the Purchase Price for the Preferred Shares.
(g) Each of the representations and warranties of the Company and the
Purchaser shall be true and correct in all material respects as of the Closing
Date, except for
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representations and warranties that speak as of a particular date, which shall
be true and correct in all material respects as of such date.
(h) 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 the Closing Date.
(i) 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.
(j) At the Closing, the Purchaser shall have received an opinion of
counsel to the Company, dated the date of such Closing, in the form of Exhibit A
hereto and such other certificates and documents as the Purchaser or its counsel
shall reasonably require incident to such Closing.
(k) As of the 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 Warrant, 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 Warrant on
the Closing Date.
(l) The Company shall have delivered to the Purchaser a secretary's
certificate, dated as of the 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.
(m) 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.
5. FEES AND EXPENSES. Each of the Company and the 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 Purchaser of up to $30,000 in connection with the preparation,
negotiation, execution and delivery of this Agreement, the Certificate of
Designation and the Warrant.
6. INDEMNIFICATION.
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(a) The Company will indemnify and hold harmless the Purchaser, each
of its directors, fund managers and officers, and each person, if any, who
controls the Purchaser within the meaning of Section 15 of the Securities Act,
or Section 20(a) of the Exchange Act, from and against any losses, claims,
damages, liabilities and expenses (including reasonable costs of defense and
investigation and all reasonable attorneys' fees) to which the Purchaser, each
of its directors, fund managers and officers, and each person, if any, who
controls the Purchaser 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 Purchaser (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 1(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 Purchaser 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 Purchaser
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 Purchaser 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 Purchaser 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 Purchaser 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.
(b) The Company will reimburse the Purchaser and each such controlling
person promptly upon demand for any legal or other costs or expenses reasonably
incurred by the Purchaser 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 furnished by the Purchaser to
the Company for inclusion in the Registration Statement, prospectus or
Prospectus Supplement.
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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
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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
00000 Xxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Chief Executive Officer and Chief Financial Officer
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
(b) if to the Purchaser:
SDS Merchant Fund, L.P.
c/o SDS Capital Partners
Xxx Xxxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
Fax no.: (000) 000-0000
with a copy to:
Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
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.
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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]
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IN WITNESS WHEREOF, this Agreement was duly executed on the date first
written above.
THE VIALINK COMPANY
By: /s/ XXXXXX X. XXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
SDS MERCHANT FUND, L.P.
By: /s/ XXXXX XXXXX
------------------------------------------
Name: Xxxxx Xxxxx
Title: Managing Member
-13-
EXHIBIT A TO THE
COMMON STOCK PURCHASE AGREEMENT
FORM OF CERTIFICATE OF DESIGNATION
-14-
EXHIBIT B TO THE
COMMON STOCK PURCHASE AGREEMENT
FORM OF WARRANT
-15-
EXHIBIT C TO THE
COMMON STOCK PURCHASE AGREEMENT
OPINION OF COUNSEL
1. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has full power and
authority (corporate and other) to conduct its business as presently conducted
by it and to enter into and perform the Purchase Agreement and to carryout the
transactions contemplated thereby. There are no jurisdictions in which, to our
knowledge, the nature of the Company's properties or the transaction of its
business, makes the Company's qualification to do business as a foreign
corporation necessary, except for those jurisdictions in which the Company is
qualified, to our knowledge, to do business as a foreign corporation or those
jurisdictions in which failure to be so qualified would not have a Material
Adverse Effect.
2. The execution, delivery and performance by the Company of the
Purchase Agreement and the Certificate of Designation has been duly authorized
by all necessary corporate action of the Company, and the Purchase Agreement has
been duly executed and delivered by the Company. The Purchase Agreement
constitutes a valid and binding obligation of the Company enforceable against it
in accordance with its terms.
3. The issuance, sale and delivery of the Shares in accordance with
the Purchase Agreement have been duly authorized by all necessary corporate
action on the part of the Company and, when delivered against payment in full as
provided in the Purchase Agreement, will be validly issued, fully paid and
nonassessable. To our knowledge, the Shares are free and clear of all liens,
charges, restrictions, claims and encumbrances imposed by or through the
Company. Neither the issuance, sale or delivery of the Shares is subject to any
preemptive right of stockholders of the Company arising under law or the
Certificate of Incorporation or By-laws of the Company, each as amended to date.
4. The execution and delivery of the Purchase Agreement and the
performance by the Company of its obligations thereunder, do not (A) violate any
provision of the Certificate of Incorporation or By-laws of the Company, each as
amended to date, (B) violate, conflict with or constitute a default under any
material contract, commitment, trust or agreement of any kind known to us to
which the Company is a party or by which it is bound or (C) violate the Delaware
General Corporation Law or any U.S. federal statute, regulation or rule or, to
our knowledge, any judgment, decree, writ, order or injunction of any
arbitrator, court or governmental authority binding upon the Company.
5. To our knowledge, there is no action, suit, proceeding or
arbitration pending against or threatened against or affecting the Company
before any court or arbitrator or any governmental body, agency or official
which, if adversely determined, is reasonably likely to result in a Material
Adverse Effect, or which in any manner questions the validity of the Purchase
Agreement and the issuance of the Shares pursuant thereto.
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6. To our knowledge, all authorizations, consents, approvals and
clearances of all governmental agencies and authorities and of third parties
required in order to permit the issuance by the Company of the Shares pursuant
to the Purchase Agreement (other than any filings which may be required to be
made by the Company with the Commission or Nasdaq subsequent to the Closing)
have been obtained.
7. The Conversion Shares have been registered under the Registration
Statement. The Registration Statement has become effective under the Securities
Act, and we are not aware of any stop order suspending the effectiveness of the
Registration Statement. To our knowledge, no proceedings therefor have been
initiated or overtly threatened by the Commission.
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