Exhibit 4.1
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of September 8,
2003, by and among DigitalThink, Inc., a Delaware corporation, with headquarters
located at 000 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 (the "Company"),
and the investors listed on the Schedule of Buyers attached hereto
(individually, a "Buyer" and collectively, the "Buyers").
WHEREAS:
A. The Company and each Buyer is executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(2) of the Securities Act of 1933, as amended (the "1933 Act"), and Rule 506 of
Regulation D ("Regulation D") as promulgated by the United States Securities and
Exchange Commission (the "SEC") under the 1933 Act;
B. Each Buyer wishes to purchase, and the Company wishes to sell, upon the
terms and conditions stated in this Agreement, (i) that aggregate amount of
shares of the Company's Common Stock, par value $0.001 per share (the "Common
Stock"), set forth opposite such Buyer's name in column (3) on the Schedule of
Buyers (collectively, the "Initial Common Shares") and (ii) warrants, in
substantially the form attached hereto as Exhibit A (the "Initial Warrants"), to
acquire that number of shares of Common Stock set forth opposite such Buyer's
name in column (4) on the Schedule of Buyers (as exercised, collectively, the
"Initial Warrant Shares") (the aggregate purchase price of the Initial Common
Shares and the Initial Warrants shall be $10,000,000);
C. Subject to the terms and conditions set forth in this Agreement, the
Buyers shall have the right to participate in two Additional Closings (as
defined in Section 1(a)(ii) below) in order to purchase, and require the Company
to sell, (i) up to that aggregate amount of Common Stock set forth opposite such
Buyer's name in column (5) on the Schedule of Buyers (collectively, the
"Additional Common Shares" and, collectively with the Initial Common Shares, the
"Common Shares"); and (ii) warrants, in substantially the form attached hereto
as Exhibit A (the "Additional Warrants" and, collectively with the Initial
Warrants, the "Warrants"), to acquire up to that number of shares of Common
Stock set forth opposite such Buyer's name in column (6) on the Schedule of
Buyers, which shall equal the product of (i) 35% and (ii) the number of
Additional Common Shares purchased by the Buyer (as exercised, collectively, the
"Additional Warrant Shares" and, collectively with the Initial Warrant Shares,
the "Warrant Shares") (the aggregate purchase price of the Additional Common
Shares and the Additional Warrant Shares shall be up to $5,000,000);
D. Contemporaneously with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit B (the "Registration Rights
Agreement"), pursuant to which the Company has agreed to provide certain
registration rights with respect to the Common Shares
and the Warrant Shares under the 1933 Act and the rules and regulations
promulgated thereunder, and applicable state securities laws.
E. The Common Shares, the Warrants and the Warrant Shares collectively are
referred to herein as the "Securities".
NOW, THEREFORE, the Company and each Buyer hereby agree as follows:
1. PURCHASE AND SALE OF COMMON SHARES AND WARRANTS.
(a) Purchase of Common Shares and Warrants.
(i) Initial Common Shares and Initial Warrants. Subject to the satisfaction
(or waiver) of the conditions set forth in Sections 6(a) and 7(a) below, the
Company shall issue and sell to each Buyer, and each Buyer severally, but not
jointly, agrees to purchase from the Company on the Initial Closing Date (as
defined below), the number of Initial Common Shares as is set forth opposite
such Buyer's name in column (3) on the Schedule of Buyers, along with Initial
Warrants to acquire that number of Initial Warrant Shares as is set forth
opposite such Buyer's name in column (4) on the Schedule of Buyers (the "Initial
Closing").
(ii) Additional Common Shares and Additional Warrants. Subject to the
satisfaction (or waiver) of the conditions set forth in Sections 1(c), 6(b) and
7(b) below, at the option of each Buyer, the Company shall issue and sell to
each Buyer, at up to two Additional Closings for the Buyers, and each Buyer
severally, but not jointly, may purchase from the Company on such Additional
Closing Dates (as defined below), up to the number of Additional Common Shares
as is set forth opposite such Buyer's name in column (5) on the Schedule of
Buyers, along with Additional Warrants to acquire Additional Warrant Shares
which shall equal the product of (i) 35% and (ii) the number of Additional
Common Shares purchased by the Buyer at the applicable Additional Closing, with
the maximum number of Additional Warrant Shares that such Buyer can acquire
being set forth opposite such Buyer's name in column (6) on the Schedule of
Buyers (each, an "Additional Closing").
(iii) Closings. The Initial Closing and the Additional Closings
collectively are referred to in this Agreement as the "Closings". Each Closing
shall occur on the applicable Closing Date at the offices of Xxxxxxx Xxxx &
Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(iv) Purchase Price. The purchase price for each Buyer (the "Purchase
Price") of the Common Shares and related Warrants to be purchased by each such
Buyer at each Closing shall be equal to $2.40 for each Common Share and
associated Warrant to purchase 0.35 of a Common Share being purchased by such
Buyer at the Closing.
(b) Initial Closing Date. The date and time of the Initial Closing (the
"Initial Closing Date") shall be 10:00 a.m., New York City Time, on the date
hereof after notification of satisfaction (or waiver) of the conditions to the
Closing set forth in Sections 6(a) and 7(a) below (or such later date as is
mutually agreed to by the Company and each Buyer).
(c) Additional Closing Date. The date and time of each Additional Closing
(each, an "Additional Closing Date") shall be 10:00 a.m., New York City Time, on
the date specified in the applicable Additional Closing Notice (as defined
below), subject to satisfaction
(or waiver) of the conditions to each Additional Closing set forth in Sections
6(b) and 7(b) and the conditions contained in this Section 1(c) (or such later
date as is mutually agreed to by the Company and the applicable Buyer). Subject
to the requirements of Sections 6(b) and 7(b) and the conditions contained in
this Section 1(c), each Buyer may purchase, at such Buyer's option, Additional
Common Shares (and related Additional Warrants) by delivering written notice to
the Company (an "Additional Closing Notice") at any time during the period
beginning after the date hereof and ending on and including the date which is
120 days after the Initial Effectiveness Date (as defined in the Registration
Rights Agreement). An Additional Closing Notice shall be delivered at least five
Business Days prior to the applicable Additional Closing Date set forth in such
Additional Closing Notice. An Additional Closing Notice shall set forth (i) the
number of Additional Common Shares and related Additional Warrants to be
purchased by such Buyer at the applicable Additional Closing, which number, when
added to the number of any Additional Common Shares previously purchased by such
Buyer, shall not exceed the number of Additional Common Shares as is set forth
opposite such Buyer's name in column (5) on the Schedule of Buyers, (ii) the
aggregate Purchase Price for the Additional Common Shares and related Additional
Warrants to be purchased and (iii) the proposed Additional Closing Date (which
date shall be the Additional Closing Date subject to the consent of the Company,
not to be unreasonably withheld or delayed). The Company shall promptly deliver
a copy of each Additional Closing Notice to the Buyer that did not issue such
Additional Closing Notice and allow such Buyer to participate in such Additional
Closing. Riverview Group LLC shall have the right to deliver one Additional
Closing Notice and Omicron Master Trust shall have the right to deliver one
Additional Closing Notice provided that the Buyers shall only be allowed to
participate in the aggregate in two Additional Closings. As used herein,
"Business Day" means any day other than Saturday, Sunday or other day on which
commercial banks in The City of New York are authorized or required by law to
remain closed.
(d) Form of Payment. On each Closing Date, (i) each Buyer shall pay its
Purchase Price to the Company for the Common Shares and Warrants to be issued
and sold to such Buyer at such Closing, by wire transfer of immediately
available funds in accordance with the Company's written wire instructions.
Within three (3) Business Days after each Closing Date, the Company shall
deliver to each Buyer the Common Shares (in the amounts as such Buyer shall
request) that such Buyer is then purchasing along with the Warrants (in the
amounts as such Buyer shall request) such Buyer is purchasing, duly executed on
behalf of the Company and registered in the name of such Buyer or its designee.
2. BUYER'S REPRESENTATIONS AND WARRANTIES.
Each Buyer represents and warrants with respect to only itself that:
(a) No Public Sale or Distribution; Prior Sales. Such Buyer is (i)
acquiring the Common Shares and the Warrants and (ii) upon exercise of the
Warrants will acquire the Warrant Shares issuable upon exercise thereof, in the
ordinary course of its business for its own account and not with a view towards,
or for resale in connection with, the public sale or
distribution thereof, except pursuant to sales registered or exempted under the
1933 Act; provided, however, that by making the representations herein, such
Buyer does not agree to hold any of the Securities for any minimum or other
specific term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an exemption under
the 1933 Act.
(b) Accredited Investor Status. Such Buyer is an "accredited investor" as
that term is defined in Rule 501(a) of Regulation D.
(c) Reliance on Exemptions. Such Buyer understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of such Buyer
to acquire the Securities.
(d) Information. Such Buyer and its advisors, if any, have been furnished
with all materials relating to the business, finances, prospects and operations
of the Company and materials relating to the offer and sale of the Securities
which have been requested by such Buyer. Such Buyer and its advisors, if any,
have been afforded the opportunity to ask questions of the Company. Neither such
inquiries nor any other due diligence investigations conducted by such Buyer or
its advisors, if any, or its representatives shall modify, amend or affect such
Buyer's right to rely on the Company's representations and warranties contained
herein. Such Buyer understands that its investment in the Securities involves a
high degree of risk and is able to afford a complete loss of such investment.
Such Buyer has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to its
acquisition of the Securities.
(e) No Governmental Review. Such Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
(f) Transfer or Resale. Such Buyer understands that except as provided in
the Registration Rights Agreement: (i) the Securities have not been and are not
being registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) such Buyer shall have delivered to the Company an
opinion of counsel, in a generally acceptable form, to the effect that such
Securities to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration, or (C) such Buyer
provides the Company with reasonable assurance that such Securities can be sold,
assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the
1933 Act, as amended, (or a successor rule thereto) (collectively, "Rule 144");
(ii) any sale of the Securities made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of the
Securities under circumstances in which the seller (or the Person (as defined in
Section 3(r)) through whom the sale is made) may be deemed to be an underwriter
(as that term is defined in the 0000 Xxx) may require compliance with some other
exemption under the 1933 Act or the rules and regulations of the SEC thereunder;
and (iii) neither the Company nor any other Person is under any obligation to
register the Securities under the 1933 Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder. The Securities
may be pledged in connection with a bona fide margin account or other loan
secured by the Securities and such pledge of Securities shall not be deemed to
be a transfer, sale or assignment of the Securities hereunder, and no Buyer
effecting a pledge of Securities shall be required to provide the Company with
any notice thereof or otherwise make any delivery to the Company pursuant to
this Agreement or any other Transaction Document, including, without limitation,
this Section 2(f); provided, that in order to make any sale, transfer or
assignment of Securities, such Buyer and its pledgee makes such disposition in
accordance with or pursuant to a registration statement or an exemption under
the 1933 Act.
(g) Legends. Such Buyer understands that the certificates or other
instruments representing the Common Shares and the Warrants and, until such time
as the resale of the Common Shares and the Warrant Shares have been registered
under the 1933 Act as contemplated by the Registration Rights Agreement, the
stock certificates representing the Warrant Shares, except as set forth below,
shall bear any legend as required by the "blue sky" laws of any state and a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):
[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE
SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A
UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, if, unless otherwise required by state securities laws, (i) the
certificate submitted to the Company's transfer agent evidencing such Securities
is accompanied by a separate certificate executed by an officer of, or other
person duly authorized by, the Buyer in the form attached hereto as Exhibit G
and (ii) either (A) such
Securities are registered for resale under the 1933 Act, (B) in connection with
a sale, assignment or other transfer, such holder provides the Company with an
opinion of counsel, in a generally acceptable form, to the effect that such
sale, assignment or transfer of the Securities may be made without registration
under the 1933 Act and that such legend is no longer required, or (C) such
holder provides the Company with reasonable assurance that the Securities can be
sold, assigned or transferred pursuant to Rule 144.
(h) Validity; Enforcement. This Agreement and the Registration Rights
Agreement have been duly and validly authorized, executed and delivered on
behalf of such Buyer and shall constitute the legal, valid and binding
obligations of such Buyer enforceable against such Buyer in accordance with
their respective terms, except as such enforceability may be limited by general
principles of equity or to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors' rights and remedies.
(i) Residency. Such Buyer is a resident of that country or state specified
below its address on the Schedule of Buyers.
(j) Affiliate and Associate Status. As of the Initial Closing such Buyer is
not, and as of each Additional Closing such Buyer will not be, an Affiliate or
Associate (as such terms are defined in Rule 12b-2 of the Securities and
Exchange Act of 1934, as amended (the "1934 Act")) of (A) WaldenVC LLC, Xxxxxx
Media and Information Technology Fund, L.P., Xxxxxx Media, LLC, WaldenVC
II-Side, Xxxxxx Xxxxxxxx, Xxxxxx Xxxxx, Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxx or
Xxxxxx Xxxxxxxx, or (B) any other Buyer.
(k) Pre-existing Holdings. As of the Initial Closing such Buyer does not,
and as of each Additional Closing such Buyer will not, together with its
Affiliates and Associates hold or beneficially own (as determined in accordance
with Section 13(d) of the 1934 Act and Rule 13d-3 thereunder) after giving
effect to the Securities being purchased at such Closing more than 14.9% of the
Common Stock.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the Buyers that:
(a) Organization and Qualification. Each of the Company and its
Subsidiaries are corporations duly organized and validly existing in good
standing under the laws of the jurisdiction in which they are incorporated, and
have the requisite corporate power and authorization to own their properties and
to carry on their business as now being conducted; provided, however, that in
the event the Company is not in good standing with the State of Delaware on the
Initial Closing Date solely by reason of having failed to pay franchise taxes in
an amount not in excess of $70,000, this representation and warranty will be
deemed accurate if the Company is in good standing with the State of Delaware
within five Business Days after the Initial Closing Date. Each of the Company
and each Subsidiary is duly qualified as a foreign corporation to do business
and is in good standing in every jurisdiction in which its ownership of property
or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not have a Material
Adverse Effect. As used in this Agreement, "Material Adverse Effect" means any
material adverse effect on the business, properties, assets, operations, results
of operations, condition (financial or otherwise) or prospects of the Company
and its Subsidiaries, taken as a whole, or on the transactions contemplated
hereby or by the agreements and instruments to be entered into in connection
herewith, or on the authority or ability of the Company to perform its
obligations under the Transaction Documents (as defined below). For purposes of
this Agreement, "Subsidiary" any entity in which the Company, directly or
indirectly, owns not less than 25% of the capital stock or holds a corresponding
equity or similar interest. The Company has no Subsidiaries except as set forth
in the SEC Documents (as defined in Section 3(k) of this Agreement).
(b) Authorization; Enforcement; Validity. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Registration Rights Agreement, the Irrevocable Transfer
Agent Instructions (as defined in Section 5(b)) and the Warrants (collectively,
the "Transaction Documents") and to issue the Securities in accordance with the
terms hereof and thereof. The execution and delivery of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby, including, without limitation, the issuance of
the Common Shares and the Warrants and the reservation for issuance and the
issuance of the Warrant Shares issuable upon exercise thereof have been duly
authorized by the Company's Board of Directors and no further consent or
authorization is required by the Company, its Board of Directors or its
stockholders. This Agreement and the other Transaction Documents of even date
herewith have been duly executed and delivered by the Company, and constitute
the legal, valid and binding obligations of the Company enforceable against the
Company in accordance with their respective terms, except as such enforceability
may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally, the enforcement of applicable creditors' rights and
remedies. As of each applicable Closing, the Transaction Documents dated after
the date hereof and required to have been executed and delivered with respect to
the Closing shall have been duly executed and delivered by the Company, and
shall constitute the legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their respective terms,
except as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of applicable
creditor's rights and remedies.
(c) Issuance of Securities. The Common Shares and Warrants are duly
authorized and, upon issuance in accordance with the terms of this Agreement,
shall be free from all taxes, liens and charges with respect to the issue
thereof. As of the applicable Closing Date, the Company shall have duly
authorized and reserved for issuance a number of shares of Common Stock which
equals a number of shares of Common Stock equal to the Exchange Cap (as defined
in the Warrants) less the aggregate number of Common Shares and Warrant Shares
outstanding or to be issued on the applicable Closing Date. Upon exercise in
accordance with the Warrants, the Warrant Shares will be validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof, with the holders being entitled to all rights accorded to
a holder of Common Stock. Assuming the accuracy of each of the
representations and warranties set forth in Section 2 of this Agreement, the
issuance by the Company of the Securities is exempt from registration under the
1933 Act.
(d) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance of the Common Shares and Warrants and reservation for issuance and
issuance of the Warrant Shares) will not (i) result in a violation of the
certificate of incorporation, any certificate of designations, preferences and
rights of any outstanding series of preferred stock or bylaws of the Company or
any Subsidiary or (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any material agreement, indenture or instrument to which the Company or any
Subsidiary is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations and the rules and regulations of the Nasdaq National Market
(the "Principal Market")) applicable to the Company or any Subsidiary or by
which any property or asset of the Company or any Subsidiary is bound or
affected, except in the case of clauses (ii) and (iii), for such breaches or
defaults as would not be reasonably expected to have a Material Adverse Effect.
(e) Consents. The Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court,
governmental agency or any regulatory or self-regulatory agency or any other
Person in order for it to execute, deliver or perform any of its obligations
under or contemplated by the Transaction Documents, in each case in accordance
with the terms hereof or thereof, except for the following consents,
authorizations, orders, filings and registrations (none of which is required to
be obtained on or before the Initial Closing): (i) compliance with the "Blue
Sky" laws in the states in which the Securities are offered or sold, which
compliance will be effected in accordance with such laws; (ii) the filing with
the SEC of the Registration Statement (as defined in the Registration Rights
Agreement) and all related amendments thereto and (iii) the filing of any
applicable notification forms with the Nasdaq National Market. The Company is
unaware of any facts or circumstances that might prevent the Company from
obtaining or effecting any of the foregoing. The Company is not in violation of
the listing requirements of the Principal Market and has no knowledge of any
facts that would reasonably be viewed as causing the delisting or suspension of
the Common Stock in the foreseeable future.
(f) Acknowledgment Regarding Buyer's Purchase of Securities. The Company
acknowledges and agrees that each Buyer is acting solely in the capacity of
arm's length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby. The Company further acknowledges
that no Buyer is acting as a financial advisor or fiduciary of the Company (or
in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated hereby and thereby, and any advice given by a Buyer or
any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely
incidental to such Buyer's purchase of the Securities. The Company further
represents to each Buyer that the Company's decision to enter into the
Transaction Documents has been based solely on the independent evaluation by the
Company and its representatives.
(g) No General Solicitation; Placement Agent's Fees. Neither the Company,
nor any of its affiliates, nor any Person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (as those
terms are defined in Regulation D) in connection with the offer or sale of the
Securities. The Company shall be responsible for the payment of any placement
agent's fees, financial advisory fees, or brokers' commissions (other than for
persons engaged by any Buyer or its investment advisor) relating to or arising
out of the transactions contemplated hereby.
(h) No Integrated Offering. None of the Company, any Subsidiary, any of
their affiliates, and any Person acting on their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of any of
the Securities under the 1933 Act or cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of the 1933 Act or
any applicable stockholder approval provisions, including, without limitation,
under the rules and regulations of any exchange or automated quotation system on
which any of the securities of the Company are listed or designated. None of the
Company, any Subsidiary, their affiliates and any Person acting on their behalf
will take any action or steps referred to in the preceding sentence that would
require registration of any of the Securities under the 1933 Act or cause the
offering of the Securities to be integrated with other offerings.
(i) Dilutive Effect. The Company understands and acknowledges that the
number of Warrant Shares issuable upon exercise of the Warrants will increase in
certain circumstances. The Company further acknowledges that its obligation to
issue the Warrant Shares upon exercise of the Warrants in accordance with and
subject to this Agreement and the Warrants is absolute and unconditional
regardless of the dilutive effect that such issuance may have on the ownership
interests of other stockholders of the Company.
(j) Application of Takeover Protections; Rights Agreement. Assuming the
accuracy of the representations and warranties set forth in Sections 2(j) and
2(k) above, the Company and its board of directors have taken all necessary
action, if any, in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company's
certificate of incorporation or the laws of the state of its incorporation which
is or could become applicable to any Buyer as a result of the transactions
contemplated by this Agreement, including, without limitation, the Company's
issuance of the Securities and any Buyer's ownership of the Securities.
(k) SEC Documents; Financial Statements. Since March 31, 2002, the Company
has timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements
of the 1934 Act (all of the foregoing filed prior to the date hereof or prior to
the date of each applicable Closing, and all exhibits included therein and
financial statements and schedules thereto and documents incorporated by
reference therein being hereinafter referred to as the "SEC Documents"). As of
their respective dates, the SEC Documents complied in all material respects with
the requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed
with the SEC, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. As of their respective dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial statements
have been prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments and to the extent that such unaudited statements do not include
footnotes). After giving effect to the 8-K Filing (as defined below), no other
information provided by or on behalf of the Company to the Buyers which is not
included in the SEC Documents, including, without limitation, information
referred to in Section 2(d) of this Agreement, contains any untrue statement of
a material fact or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstance under which they are or
were made, not misleading.
(l) Absence of Certain Changes. Since March 31, 2003, there has been no
material adverse change and no material adverse development in the business,
properties, operations, condition (financial or otherwise), results of
operations or prospects of the Company or any Subsidiary. The Company has not
taken any steps to seek protection pursuant to any bankruptcy law nor does the
Company have any knowledge or reason to believe that its creditors intend to
initiate involuntary bankruptcy proceedings or any actual knowledge of any fact
which would lead a reasonable creditor to do so. The Company currently is not
and, after giving effect to the transactions contemplated hereby to occur at
each Closing, will not be Insolvent (as defined below). For purposes of this
Section 3(l), "Insolvent" means (i) the present fair saleable value of the
Company's assets is less than the amount required to pay the Company's total
indebtedness for borrowed money, contingent or otherwise, (ii) the Company is
unable to pay its debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured, (iii) the Company
intends to incur or believes that it will incur debts that would be beyond its
ability to pay as such debts mature or (iv) the Company has unreasonably small
capital with which to conduct the business in which it is engaged as such
business is now conducted and is proposed to be conducted.
(m) No Undisclosed Events, Liabilities, Developments or Circumstances. No
event, liability, development or circumstance has occurred or exists, or is
contemplated to occur, with respect to the Company or any Subsidiary or their
respective business, properties, prospects, operations or financial condition,
that would be required to be disclosed by the Company under applicable
securities laws on a registration statement on Form S-1 filed with the SEC
relating to an issuance and sale by the Company of its Common Stock and which
has not been publicly announced.
(n) Conduct of Business; Regulatory Permits. Neither the Company nor any
Subsidiary is in violation of any term of or in default under its Certificate of
Incorporation, any Certificate of Designations, Preferences and Rights of any
outstanding series of preferred stock of the Company or Bylaws or their
organizational charter or bylaws, respectively. Neither the Company nor any
Subsidiary is in violation of any judgment, decree or order or any statute,
ordinance, rule or regulation applicable to the Company or any Subsidiary, and
neither the Company nor any Subsidiary will conduct its business in violation of
any of the foregoing, except for possible violations which would not,
individually or in the aggregate, have a Material Adverse Effect. Without
limiting the generality of the foregoing, the Company is not in violation of any
of the rules, regulations or requirements of the Principal Market and has no
knowledge of any facts or circumstances that would reasonably lead to delisting
or suspension of the Common Stock by the Principal Market in the foreseeable
future. Since December 31, 2002, (i) the Common Stock has been designated for
quotation or listed on the Principal Market, (ii) trading in the Common Stock
has not been suspended by the SEC or the Principal Market and (iii) the Company
has received no communication, written or oral, from the SEC or the Principal
Market regarding the suspension or delisting of the Common Stock from the
Principal Market. The Company and its Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, except
where the failure to possess such certificates, authorizations or permits would
not have, individually or in the aggregate, a Material Adverse Effect, and
neither the Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of its certificate, authorization or
permit.
(o) Foreign Corrupt Practices. Neither the Company, nor any Subsidiary, nor
any director, officer, agent, employee or other Person acting on behalf of the
Company or any Subsidiary has, in the course of its actions for, or on behalf
of, the Company (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expenses relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee.
(p) Transactions With Affiliates. Except as set forth in the Company's
Annual Report on Form 10-K for the year ended March 31, 2003, none of the
officers, directors or employees of the Company is presently a party to any
transaction with the Company or any Subsidiary (other than for ordinary course
services as employees, officers or directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such officer, director or employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which any such officer, director, or employee has a substantial interest or is
an officer, director, trustee or partner.
(q) Equity Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of 250,000,000 shares of Common Stock, of which,
as of the date hereof, 44,487,203 shares are issued and outstanding, 13,244,836
shares are reserved for issuance pursuant to the Company's employee incentive
plan, including options issued and
outstanding thereunder, 640,190 are reserved for issuance pursuant to
outstanding warrants and no shares are reserved for issuance pursuant to other
securities (other than the Warrants) exercisable or exchangeable for, or
convertible into, shares of Common Stock. All of such outstanding shares have
been, or upon issuance will be, validly issued and are fully paid and
nonassessable. No shares of the Company's capital stock are subject to
preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company. Except for registration rights granted to
investors in the Company prior to the initial public offering of the Common
Stock as set forth in the SEC Documents, there are no agreements or arrangements
under which the Company or any Subsidiary is obligated to register the sale of
their securities under the 1933 Act (except the Registration Rights Agreement).
There are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Securities. The Company
has made available to the Buyer true, correct and complete copies of the
Company's Certificate of Incorporation, as amended and as in effect on the date
hereof (the "Certificate of Incorporation"), and the Company's Bylaws, as
amended and as in effect on the date hereof (the "Bylaws"), and the terms of all
securities convertible into, or exercisable or exchangeable for, Common Stock
and the material rights of the holders thereof in respect thereto.
(r) Indebtedness and Other Contracts. Except as set forth in the SEC
Documents, neither the Company nor any Subsidiary (i) has any outstanding
Indebtedness (as defined below), (ii) is a party to any contract, agreement or
instrument as to which the other party(ies) to such contract, agreement or
instrument are in breach or default (or with notice or the passage of time would
be in breach or default) and such breach or default would result in a Material
Adverse Effect, (iii) is in violation of any term of or in default under any
contract, agreement or instrument relating to any Indebtedness, except where
such violations and defaults would not result, individually or in the aggregate,
in a Material Adverse Effect, or (iv) is a party to any contract, agreement or
instrument relating to any Indebtedness, the performance of which, in the
judgment of the Company's officers, has or is expected to have a Material
Adverse Effect. The SEC Documents set forth each of the Company's "material
contracts," as such term is used in Item 601 of Regulation S-K promulgated by
the SEC. For purposes of this Agreement: (x) "Indebtedness" of any Person means,
without duplication (A) all indebtedness for borrowed money, (B) all obligations
issued, undertaken or assumed as the deferred purchase price of property or
services (other than trade payables entered into in the ordinary course of
business), (C) all reimbursement or payment obligations with respect to letters
of credit, surety bonds and other similar instruments, (D) all obligations
evidenced by notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the acquisition of
property, assets or businesses, (E) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (F) all monetary obligations under any
leasing or similar arrangement which, in connection with generally accepted
accounting principles, consistently applied for the periods covered thereby, is
classified as a capital lease, (G) all indebtedness referred to in clauses (A)
through (F) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any mortgage,
lien, pledge, change, security interest or other encumbrance upon or in any
property or assets
(including accounts and contract rights) owned by any Person, even though the
Person which owns such assets or property has not assumed or become liable for
the payment of such indebtedness, and (H) all Contingent Obligations in respect
of indebtedness or obligations of others of the kinds referred to in clauses (A)
through (G) above; (y) "Contingent Obligation" means, as to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with
respect to any indebtedness, lease, dividend or other obligation of another
Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such liability
will be protected (in whole or in part) against loss with respect thereto; and
(z) "Person" means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
(s) Absence of Litigation. Except as disclosed in the SEC Documents, there
is no action, suit, proceeding, inquiry or investigation before or by the
Principal Market, any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the Company, threatened in
writing against or affecting the Company, the Common Stock or any Subsidiary or
any of the Company's or any Subsidiary's officers or directors in their
capacities as such.
(t) Insurance. The Company and its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as management of the Company believes to be prudent and customary in the
businesses in which the Company and its Subsidiaries are engaged. Neither the
Company nor any Subsidiary has been refused any insurance coverage sought or
applied for and neither the Company nor any Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not have a Material
Adverse Effect.
(u) Employee Relations. (i) Neither the Company nor any Subsidiary is a
party to any collective bargaining agreement or employs any member of a union.
The Company and its Subsidiaries believe that their relations with their
employees are good. No executive officer of the Company (as defined in Rule
501(f) of the 0000 Xxx) has notified the Company that such officer intends to
leave the Company or otherwise terminate such officer's employment with the
Company. No executive officer of the Company, to the knowledge of the Company,
is, or is now expected to be, in violation of any material term of any
employment contract, confidentiality, disclosure or proprietary information
agreement, non-competition agreement, or any other contract or agreement or any
restrictive covenant, and the continued employment of each such executive
officer does not subject the Company or any Subsidiary to any liability with
respect to any of the foregoing matters.
(ii) The Company and its Subsidiaries are in compliance with all federal,
state, local and foreign laws and regulations respecting employment and
employment practices, terms and conditions of employment and wages and hours,
except where failure to be
in compliance would not, either individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
(v) Title. The Company and its Subsidiaries have good and marketable title
to all personal property owned by them which is material to the business of the
Company and its Subsidiaries, in each case free and clear of all liens,
encumbrances and defects or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made of such
property by the Company and its Subsidiaries. Neither the Company nor any
Subsidiary owns any real property. Any real property and facilities held under
lease by the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries.
(w) Intellectual Property Rights. Except as set forth in the SEC Documents
and to the knowledge of the Company, the Company and its Subsidiaries own or
possess adequate rights or licenses to use all trademarks, trade names, service
marks, service xxxx registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, governmental authorizations, trade
secrets and other intellectual property rights ("Intellectual Property Rights")
necessary to conduct their respective businesses as now conducted. None of the
Company's issued patents that are assigned to it or any registered Intellectual
Property Rights that are material to the business of the Company have expired or
terminated, or are expected to expire or terminate within three years from the
date of this Agreement. The Company does not have any knowledge of any
infringement by the Company or any Subsidiary of Intellectual Property Rights of
others except where such infringement would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. There is no claim,
action or proceeding being made or brought, or to the knowledge of the Company,
being threatened, against the Company or any Subsidiary regarding its
Intellectual Property Rights which could have a Material Adverse Effect. The
Company is unaware of any facts or circumstances which might give rise to any of
the foregoing infringements or claims, actions or proceedings. The Company and
its Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their Intellectual Property Rights.
(x) Subsidiary Rights. The Company has the unrestricted right to vote, and
(subject to limitations imposed by applicable law) to receive dividends and
distributions on, all capital securities of each Subsidiary as owned by the
Company.
(y) Tax Status. The officers of the Company know of no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company know of no basis for any such claim.
(z) Internal Accounting Controls. The Company and each Subsidiary maintain
a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset and liability
accountability, (iii) access to assets or incurrence of liabilities is permitted
only in accordance
with management's general or specific authorization and (iv) the recorded
accountability for assets and liabilities is compared with the existing assets
and liabilities at reasonable intervals and appropriate action is taken with
respect to any difference. In addition, the Company has established and
maintains disclosure controls and procedures as defined in Rule 13a-14 under the
1934 Act and in compliance with Rule 13a-15 under the 1934 Act.
(aa) Disclosure. The Company confirms that neither it nor, to its
knowledge, any officer, director or agent of the Company has provided any of the
Buyers or their respective agents or counsel with any information that
constitutes material, nonpublic information. The Borrower understands and
confirms that each of the Buyers will rely on the foregoing representations in
effecting transactions in securities of the Company. All disclosure provided to
the Buyers regarding the Company, its business and the transactions contemplated
hereby, including the Schedules to this Agreement, furnished by or on behalf of
the Company are true and correct and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. No event or circumstance has occurred or information
exists with respect to the Company or any Subsidiary or either of its or their
respective business, properties, prospects, operations or financial conditions,
which, under applicable law, rule or regulation, requires public disclosure or
announcement by the Company on or before the date hereof but which has not been
so publicly announced or disclosed (assuming for this purpose that the Company's
reports filed under the Exchange Act of 1934, as amended, are being incorporated
into an effective registration statement filed by the Company under the 1933
Act). The Company acknowledges and agrees that no Buyer makes or has made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 2.
(bb) Xxxxxxxx-Xxxxx Act. The Company is in compliance with any and all
applicable requirements of the Xxxxxxxx-Xxxxx Act of 2002 that are effective as
of the date hereof, and any and all applicable rules and regulations promulgated
by the SEC thereunder that are effective as of the date hereof, except where
such noncompliance would not have a Material Adverse Effect.
(cc) Form S-3 Eligibility. Other than in connection with primary offerings,
the Company is eligible to register shares of Common Stock for resale by the
Buyers under Form S-3 promulgated under the 1933 Act.
4. COVENANTS.
(a) Best Efforts. Each party shall use its best efforts timely to satisfy
each of the conditions to be satisfied by it as provided in Sections 6 and 7 of
this Agreement.
(b) Form D and Blue Sky. The Company agrees to file a Form D with respect
to the Securities as required under Regulation D. The Company shall, on or
before each Closing Date, take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for or to qualify the
Securities for sale to the Buyers at such Closing pursuant to this Agreement
under applicable securities or "Blue Sky" laws of the states of the United
States
(or to obtain an exemption from such qualification). The Company shall make all
filings and reports that it reasonably determines are necessary relating to the
offer and sale of the Securities required under applicable securities or "Blue
Sky" laws of the states of the United States following each Closing Date;
provided, however, that the Company shall not for any such purpose be required
to qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service of
process in any such jurisdiction.
(c) Reporting Status. Until the date on which the Investors (as defined in
the Registration Rights Agreement) shall have sold all the Common Shares and
Warrant Shares and none of the Warrants is outstanding (the "Reporting Period"),
the Company shall timely file all reports required to be filed with the SEC
pursuant to the 1934 Act, and the Company shall not terminate its status as an
issuer required to file reports under the 1934 Act even if the 1934 Act or the
rules and regulations thereunder would otherwise permit such termination, unless
such termination is in connection with an Organic Change (as defined in the
Warrants)
(d) Use of Proceeds. The Company will use the proceeds from the sale of the
Securities for working capital purposes or to finance possible acquisitions and
not for the repayment of any outstanding Indebtedness of the Company or any
Subsidiary.
(e) Listing. The Company shall promptly secure the listing of all of the
Registrable Securities (as defined in the Registration Rights Agreement) upon
each national securities exchange and automated quotation system, if any, upon
which shares of Common Stock are then listed (subject to official notice of
issuance) and shall maintain, so long as any other shares of Common Stock shall
be so listed, such listing of all Registrable Securities from time to time
issuable under the terms of the Transaction Documents. The Company shall use its
best efforts to maintain the Common Stock's authorization for quotation on the
Principal Market. Neither the Company nor any Subsidiary shall take any action
which would be reasonably expected to result in the delisting or suspension of
the Common Stock on the Principal Market; provided, however, that the Company
makes no covenant regarding the trading price of the Common Stock. The Company
shall pay all fees and expenses in connection with satisfying its obligations
under this Section 4(e).
(f) Fees. The Company shall reimburse the Buyers in the aggregate $15,000
(in addition to amounts already advanced) for the Buyers reasonable expenses
incurred in connection with the preparation, execution and performance of this
Agreement and the transactions contemplated hereunder, which amount will be net
funded from the Purchase Price of Riverview Group LLC at the Initial Closing.
The Company shall be responsible for the payment of any fees payable to Xxxxxxxx
Curhan Ford & Co. and any other placement agent or broker retained by the
Company in connection with transactions contemplated hereby. Except as otherwise
set forth in this Agreement or in the Registration Rights Agreement, each party
to this Agreement shall bear its own expenses in connection with the sale of the
Securities to the Buyers.
(g) Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by an Investor (as defined in the Registration Rights
Agreement) in
connection with a bona fide margin agreement or other loan or financing
arrangement that is secured by the Securities. The pledge of Securities shall
not be deemed to be a transfer, sale or assignment of the Securities hereunder,
and no Investor effecting a pledge of Securities shall be required to provide
the Company with any notice thereof or otherwise make any delivery to the
Company pursuant to this Agreement or any other Transaction Document, including,
without limitation, Section 2(f) of this Agreement; provided that an Investor
and its pledgee shall be required to comply with the provisions of Section 2(f)
hereof in order to effect a sale, transfer or assignment of Securities to such
pledgee. The Company hereby agrees to execute and deliver such documentation as
a pledgee of the Securities may reasonably request in connection with a pledge
of the Securities to such pledgee by an Investor.
(h) Disclosure of Transactions and Other Material Information. On or before
8:30 a.m., New York City Time, on the first trading day following the Initial
Closing Date, the Company shall file a Current Report on Form 8-K describing the
terms of the transactions contemplated by the Transaction Documents in the form
required by the 1934 Act, and attaching the material Transaction Documents
(including, without limitation, this Agreement (and all schedules to this
Agreement), the form of Warrant and the Registration Rights Agreement) as
exhibits to such filing (including all attachments, the "8-K Filing"). On or
before 8:30 a.m., New York City Time, on the first trading day following each
Additional Closing Date, the Company shall file a Current Report on Form 8-K
with the SEC describing the transaction consummated or proposed on such date.
From and after the filing of the 8-K Filing with the SEC, no Buyer shall be in
possession of any material, nonpublic information received from the Company, any
Subsidiary or any of its respective officers, directors, employees or agents,
that is not disclosed in the 8-K Filing. The Company shall not, and shall cause
each Subsidiary and each of its respective officers, directors, employees and
agents, not to, provide any Buyer with any material nonpublic information
regarding the Company or any Subsidiary from and after the filing of the 8-K
Filing with the SEC without the express written consent of such Buyer. Subject
to the foregoing, neither the Company nor any Buyer shall issue any press
releases or any other public statements with respect to the transactions
contemplated in this Agreement or the other Transaction Documents; provided,
however, that the Company shall be entitled, without the prior approval of any
Buyer, to make any press release or other public disclosure with respect to such
transactions (i) in substantial conformity with the 8-K Filing and
contemporaneously therewith and (ii) as is required by applicable law and
regulations, including the applicable rules and regulations of the Principal
Market (provided that in the case of clause (i) each Buyer shall be consulted by
the Company in connection with any such press release or other public disclosure
prior to its release).
(i) Additional Securities; Additional Registration Statements. For so long
as any Buyer beneficially owns any Warrants, the Company will not issue any
other securities that would cause a breach or default under the Warrants. Until
such time as the Initial Registration Statement (as defined in the Registration
Rights Agreement) is declared effective by the SEC, the Company will not file a
registration statement under the 1933 Act relating to securities that are not
the Securities, other than a registration statement on Form S-8, in order to
register increases in the shares underlying equity incentive plans in existence
as of the date of this Agreement.
(j) Conduct of Business. The business of the Company and each Subsidiary
shall not be conducted in violation of any law, ordinance or regulation of any
governmental entity, except where such violations would not result, either
individually or in the aggregate, in a Material Adverse Effect.
(k) Corporate Existence. So long as any Buyer beneficially owns any
Warrants, or has the right to purchase any Additional Common Shares, the Company
shall not enter into an Organic Change unless (i) the surviving or successor
entity in such transaction assumes the Company's material obligations hereunder
and under the Transaction Documents and is a publicly traded corporation whose
common stock is quoted on or listed for trading on a Principal Market, or (ii)
the sole consideration received by the Company or its stockholders in the
transaction or transactions comprising the Organic Change is cash.
(l) Reservation of Shares. The Company shall take all action necessary to
at all times have authorized, and reserved for the purpose of issuance, from and
after each Closing Date, a number of shares of Common Stock issuable upon
exercise of the Warrants being issued at such Closing in conformity with Section
3(c).
(m) Right of Participation. (i) For a period of 12 months following the
Initial Closing Date, the Company shall not issue, sell or exchange, agree or
obligate itself to issue, sell or exchange or reserve or set aside for issuance,
sale or exchange (a "Future Issuance"), (A) any shares of Common Stock, (B) any
other equity security of the Company, including without limitation shares of
preferred stock, (C) any debt security of the Company (other than debt with no
equity feature), including without limitation any debt security which by its
terms is convertible into or exchangeable for any equity security of the
Company, (D) any security of the Company that is a combination of debt and
equity, or (E) any option, warrant or other right to subscribe for, purchase or
otherwise acquire any such equity security or any such debt security of the
Company, unless in each case the Company shall have first offered to sell (in
the case of public offerings, to the extent permitted by the SEC and other
applicable laws, as reasonably determined by the Company upon consultation with
counsel) the Offered Securities (as defined) to the Buyers (in all respects upon
identical terms and conditions, including, without limitations, unit price and
interest rates) as follows: The Company shall offer to sell to each Buyer (1)
that portion of the Offered Securities as the number of Initial Common Shares
acquired by such Buyer at the Initial Closing bears to the total number of
Initial Common Shares acquired by all Buyers at the Initial Closing (the "Basic
Amount"), and (2) such additional portion of the Offered Securities as such
Buyer shall indicate it will purchase should the other Buyers subscribe for less
than their Basic Amounts (the "Undersubscription Amount"), at a price and on
such other terms as shall have been specified by the Company in writing
delivered to such Buyer (the "Offer"), which Offer by its terms shall remain
open and irrevocable for a period of twenty (20) days from receipt of the Offer.
"Offered Securities" means one-half of the aggregate amount of the securities
being issued or sold in the Future Issuance; provided, however, that with
respect to Future Issuances that are underwritten public offerings, "Offered
Securities" means the Buyers' pro rata share of the aggregate amount of
securities being issued or sold in such Future Issuance, calculated on a fully
diluted basis.
(ii) Notice of each Buyer's intention to accept, in whole or in part, any
Offer made pursuant to Section 4(m)(i) shall be evidenced by a writing signed by
such Buyer and delivered to the Company prior to the end of the 20-day period of
such Offer, setting forth such of the Buyer's Basic Amount as such Buyer elects
to purchase and, if such Buyer shall elect to purchase all of its Basic Amount,
the Undersubscription Amount as such Buyer shall elect to purchase (the "Notice
of Acceptance"). If the Basic Amounts subscribed for by all Buyers are less than
the total Offered Securities then each Buyer who has set forth Undersubscription
Amounts in its Notice of Acceptance shall be entitled to purchase all
Undersubscription Amounts it has subscribed for; provided, however, that should
the Undersubscription Amounts subscribed for exceed the difference between the
Offered Securities and the Basic Amounts subscribed for (the "Available
Undersubscription Amount"), each Buyer who has subscribed for any
Undersubscription Amount shall be entitled to purchase only that portion of the
Available Undersubscription Amount as the Undersubscription Amount subscribed
for by such Buyer bears to the total Undersubscription Amounts subscribed for by
all Buyers, subject to rounding by the Board of Directors of the Company to the
extent it deems reasonably necessary.
(iii) Permitted Sales of Refused Securities. If Notices of Acceptance are
not given by the Buyers in respect of all the Offered Securities, the Company
shall have ninety (90) days from the expiration of the period set forth in
Section 4(m)(i) to close the sale of all or any part of such Offered Securities
as to which a Notice of Acceptance has not been given by the Buyer (the "Refused
Securities") (as well as the other securities proposed to be issued in a Future
Issuance) to any other Person or Persons, but only for cash and otherwise in all
respects upon terms and conditions, including, without limitation, unit price
and interest rates, which are no more favorable, in the aggregate, to such other
Person or Persons or less favorable to the Company than those set forth in the
Offer.
(iv) Reduction in Amount of Offered Securities. If the Company shall
propose to sell less than all the Refused Securities (any such sale to be in the
manner and on the terms specified in Section 4(m)(iii) above), then each Buyer
may, at its sole option and in its sole discretion, reduce the number or other
units of the Offered Securities specified in its Notice of Acceptance to an
amount which shall be not less than the amount of the Offered Securities which
such Buyer elected to purchase pursuant to Section 4(m)(ii) multiplied by a
fraction, (A) the numerator of which shall be the amount of Offered Securities
which the Company actually proposes to sell, and (B) the denominator of which
shall be the amount of all Offered Securities. In the event that any Buyer so
elects to reduce the number or amount of Offered Securities specified in its
Notice of Acceptance, the Company may not sell or otherwise dispose of more than
the reduced amount of the Offered Securities until such securities have been
offered to the Buyers in accordance with Section 4(m).
(v) Closing. Upon each closing under this Section 4(m), which shall include
full payment to the Company, the Buyer shall purchase from the Company, and the
Company shall sell to the Buyer the number of Offered Securities specified in
the Notices of Acceptance, as reduced pursuant to Section 4(m)(iv) if the Buyers
have so elected, upon the terms and conditions specified in the Offer. The
purchase by the Buyers of any Offered Securities is subject in all cases to the
preparation, execution and delivery by the Company and the Buyers of a purchase
agreement relating to such Offered Securities reasonably satisfactory in form
and substance to the Buyers and their respective counsel.
(vi) Further Sale. In each case, any securities proposed to be issued in a
Future Issuance that are not purchased by the Buyers or other Person or Persons
in accordance with Section 4 may not be sold or otherwise disposed of until they
are again offered to the Buyers to the same extent, and under the procedures
specified in, Section 4(m).
(vii) Exception. The rights of the Buyers under this Section 4(m) shall not
apply to: (A) Common Stock issued as a stock dividend to all holders of Common
Stock or upon any subdivision or combination of shares of Common Stock, (B)
Securities issued to a Buyer at an Additional Closing or upon exercise of the
Warrants or issued upon conversion or exercise of any other currently
outstanding securities of the Company pursuant to the terms of such securities,
(C) compensation, equity incentive or similar arrangements with employees,
officers, directors, consultants, advisors or service providers, (D) securities
issued not primarily for capital raising purposes and in connection with bona
fide, arm's length strategic partnerships or joint ventures in which there is a
significant commercial relationship with the Company, and (E) securities issued
or issuable in connection with one or more bona fide, arm's length acquisitions
by the Company, whether through an acquisition for stock or a merger, of any
business, assets or technologies the primary purpose of which is not to raise
equity capital..
(o) Certain Post-Closing Covenants. Not later than five (5) Business Days
following each Closing Date, to the extent not so delivered at or prior to such
Closing Date, the Company shall deliver to each Buyer at such Closing the
following items:
(i) A certificate evidencing the incorporation and good standing of the
Company in its state of incorporation issued by the Secretary of State of such
state of incorporation as of a date within 10 days of such Closing Date,
(ii) A certificate evidencing the Company's qualification as a foreign
corporation and good standing issued by the Secretary of State of the State of
California as of a date within 10 days of such Closing Date;
(iii) A certified copy of the Certificate of Incorporation as certified by
the Secretary of State of the State of Delaware within 10 days of such Closing
Date;
(iv) A letter from the Company's transfer agent certifying the number of
shares of Common Stock outstanding as of a date within five days of such Closing
Date; and
(v) With respect to the Irrevocable Transfer Agent Instructions in the form
of Exhibit C attached hereto, (A) in the case of the Initial Closing, an
acknowledgement of such instructions in writing by the Company's transfer agent
and (B) in the case of an Additional Closing, a letter from such transfer agent
that such instructions remain in effect as of the applicable Additional Closing
Date.
5. REGISTER; TRANSFER AGENT INSTRUCTIONS.
(a) Register. The Company shall maintain at its principal executive offices
(or such other office or agency of the Company as it may designate by notice to
each holder of Warrants), a register for the Warrants, in which the Company
shall record the name and address
of the Person in whose name the Warrants have been issued (including the name
and address of each transferee), and the number of Warrant Shares issuable upon
exercise of the Warrants held by such Person. The Company shall keep the
register open and available at all times during business hours for inspection of
any Buyer or its legal representatives.
(b) Transfer Agent Instructions. The Company shall issue irrevocable
instructions to its transfer agent, and any subsequent transfer agent, to issue
certificates or credit shares to the applicable balance accounts at DTC,
registered in the name of each Buyer or its respective nominee(s), for the
Warrant Shares in such amounts as specified from time to time by each Buyer to
the Company upon exercise of the Warrants in the form of Exhibit C attached
hereto (the "Irrevocable Transfer Agent Instructions"). The Company warrants
that no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 5(b), and stop transfer instructions to give effect
to Section 2(f) hereof, will be given by the Company to its transfer agent, and
that the Securities shall otherwise be freely transferable on the books and
records of the Company as and to the extent provided in this Agreement and the
other Transaction Documents. If a Buyer effects a sale, assignment or transfer
of the Securities in accordance with Section 2(f), the Company shall permit the
transfer and shall promptly instruct its transfer agent to issue one or more
certificates or credit shares to the applicable balance accounts at DTC in such
name and in such denominations as specified by such Buyer to effect such sale,
transfer or assignment. In the event that such sale, assignment or transfer
involves Securities sold, assigned or transferred pursuant to an effective
registration statement or pursuant to Rule 144, the transfer agent shall issue
or reissue, as the case may be, such Securities to the Buyer, assignee or
transferee, as the case may be, without any restrictive legend. The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to a Buyer. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Section 5(b) will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 5(b), that a Buyer shall be entitled,
in addition to all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and transfer, without
the necessity of showing economic loss and without any bond or other security
being required.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
(a) Initial Closing Date. The obligation of the Company hereunder to issue
and sell the Initial Common Shares and the related Initial Warrants to each
Buyer at the Initial Closing is subject to the satisfaction, at or before the
Initial Closing Date, of each of the following conditions, provided that these
conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion by providing each Buyer with prior written
notice thereof:
(i) Such Buyer shall have executed each of the Transaction Documents to
which it is a party and delivered the same to the Company.
(ii) Such Buyer shall have delivered to the Company the Purchase Price for
the Initial Common Shares and the related Initial Warrants being purchased by
such
Buyer at the Initial Closing by wire transfer of immediately available funds
pursuant to the wire instructions provided by the Company.
(iii) The representations and warranties of such Buyer shall be true and
correct in all material respects as of the date when made and as of the Initial
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and such Buyer shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by such Buyer at or prior to the Initial Closing Date.
(b) Additional Closing Date. The obligation of the Company hereunder to
issue and sell the Additional Common Shares and the related Additional Warrants
to each Buyer at each Additional Closing is subject to the satisfaction, at or
before such Additional Closing Date, of each of the following conditions,
provided that these conditions are for the Company's sole benefit and may be
waived by the Company at any time in its sole discretion by providing each Buyer
with prior written notice thereof:
(i) Such Buyer shall have delivered to the Company the Purchase Price for
the Additional Common Shares and the related Additional Warrants being purchased
by such Buyer at the Additional Closing by wire transfer of immediately
available funds pursuant to the wire instructions provided by the Company.
(ii) The representations and warranties of such Buyer shall be true and
correct in all material respects as of the date when made and as of the
Additional Closing Date as though made at that time (except for representations
and warranties that speak as of a specific date), and such Buyer shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by such Buyer at or prior to the Additional Closing Date.
7. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.
(a) Initial Closing Date. The obligation of each Buyer hereunder to
purchase the Initial Common Shares and the related Initial Warrants at the
Initial Closing is subject to the satisfaction, at or before the Initial Closing
Date, of each of the following conditions, provided that these conditions are
for each Buyer's sole benefit and may be waived by such Buyer at any time in its
sole discretion by providing the Company with prior written notice thereof:
(i) The Company shall have executed and delivered to such Buyer each of the
Transaction Documents and shall have undertaken to deliver, within three (3)
Business Days following the Initial Closing Date (A) certificates for the
Initial Common Shares (in such denominations as such Buyer shall request) being
purchased by such Buyer at the Initial Closing pursuant to this Agreement and
(B) the related Initial Warrants (in such amounts as such Buyer shall request)
being purchased by such Buyer at the Initial Closing pursuant to this Agreement.
(ii) Such Buyer shall have received the opinion of Xxxxxx Godward LLP, the
Company's counsel, dated as of the Initial Closing Date, in form, scope and
substance reasonably satisfactory to such Buyer and in substantially the form of
Exhibit D attached hereto.
(iii) The Company shall have executed and delivered to such Buyer a copy of
the Irrevocable Transfer Agent Instructions, in the form of Exhibit C attached
hereto.
(iv) The Common Stock (I) shall be designated for quotation or listed on
the Principal Market and (II) shall not have been suspended by the SEC or the
Principal Market from trading on the Principal Market nor shall suspension by
the SEC or the Principal Market have been threatened either (A) in writing by
the SEC or the Principal Market or (B) by falling below the minimum listing
maintenance requirements of the Principal Market.
(v) The Company shall have delivered to such Buyer a certificate, executed
by the Secretary of the Company and dated as of the Initial Closing Date, as to
(i) the resolutions consistent with Section 3(b) as adopted by the Company's
Board of Directors in a form reasonably acceptable to such Buyer (the
"Resolutions"), (ii) the Certificate of Incorporation and (iii) the Bylaws, each
as in effect at the Initial Closing, in the form attached hereto as Exhibit E.
(vi) The representations and warranties of the Company shall be true and
correct in all material respects (except for representations and warranties that
are qualified by materiality, which shall be true and correct in all respects)
as of the date when made and as of the Initial Closing Date as though made at
that time (except for representations and warranties that speak as of a specific
date) and the Company shall have performed, satisfied and complied in all
material respects (except for covenants, agreements and conditions that are
qualified by materiality, which shall be complied with in all respects) with the
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the Initial
Closing Date.
(vii) The Company shall have delivered to such Buyer such other documents
relating to the transactions contemplated by this Agreement as such Buyer or its
counsel may reasonably request.
(b) Additional Closing Date. The obligation of each Buyer hereunder to
purchase the Additional Common Shares and the related Additional Warrants at
each of the applicable Additional Closings is subject to the satisfaction, at or
before each of the Additional Closing Dates, of each of the following
conditions, provided that these conditions are for each Buyer's sole benefit and
may be waived by such Buyer at any time in its sole discretion by providing the
Company with prior written notice thereof:
(i) The Company shall have undertaken to deliver, within three (3) Business
Days following the applicable Additional Closing Date (A) certificates for the
Additional Common Shares (in such denominations as such Buyer shall request)
being purchased by such Buyer at the applicable Additional Closing pursuant to
this Agreement and (B) the related Additional Warrants (in such amounts as such
Buyer shall request) being purchased by such Buyer at the applicable Additional
Closing pursuant to this Agreement.
(ii) Such Buyer shall have received the opinion of Xxxxxx Godward LLP, the
Company's counsel, dated as of the applicable Additional Closing Date, in form,
scope and substance reasonably satisfactory to such Buyer and in substantially
the form of Exhibit D attached hereto.
(iii) The Irrevocable Transfer Agent Instructions shall remain in effect as
of the applicable Additional Closing Date.
(iv) The Common Stock (I) shall be designated for quotation or listed on
the Principal Market and (II) shall not have been suspended, as of the
Additional Closing Date, by the SEC or the Principal Market from trading on the
Principal Market nor shall suspension by the SEC or the Principal Market have
been threatened, as of the Additional Closing Date, either (A) in writing by the
SEC or the Principal Market or (B) by falling below the minimum listing
maintenance requirements of the Principal Market.
(v) The Company shall have delivered to such Buyer a certificate, executed
by the Secretary of the Company and dated as of the Additional Closing Date, as
to (i) the Resolutions, (ii) the Certificate of Incorporation and (iii) the
Bylaws, each as in effect at the applicable Additional Closing, in the form
attached hereto as Exhibit E.
(vi) The representations and warranties of the Company shall be true and
correct in all material respects (except for representations and warranties that
are qualified by materiality, which shall be true and correct in all respects)
as of the date when made and as of the applicable Additional Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects (except for covenants, agreements and
conditions that are qualified by materiality, which shall be complied with in
all respects) with the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the applicable Additional Closing Date. Such Buyer shall have
received a certificate, executed by the Chief Executive Officer of the Company,
dated as of the applicable Additional Closing Date, to the foregoing effect and
as to such other matters as may be reasonably requested by such Buyer in the
form attached hereto as Exhibit F.
(vii) The Company shall have delivered to such Buyer such other documents
relating to the transactions contemplated by this Agreement as such Buyer or its
counsel may reasonably request.
8. TERMINATION. In the event that the Closing shall not have occurred with
respect to a Buyer on or before forty-five (45) days from the date hereof due to
the Company's or such Buyer's failure to satisfy the conditions set forth in
Sections 6 and 7 above (and the nonbreaching party's failure to waive such
unsatisfied condition(s)), the nonbreaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party;
provided, however, that if this Agreement is terminated pursuant to this Section
8, the Company shall remain obligated to reimburse the Buyers for the expenses
described in Section 4(f) above.
9. MISCELLANEOUS.
(a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the non-exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
signature.
(c) Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
(d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
(e) Entire Agreement; Amendments. This Agreement supersedes all other prior
oral or written agreements between the Buyers, the Company, their affiliates and
Persons acting on their behalf with respect to the matters discussed herein, and
this Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor any Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
amended other than by an
instrument in writing signed by the Company and the holders of Common Shares
representing at least a majority of the amount of the Common Shares. No
provision hereof may be waived other than by an instrument in writing signed by
the party against whom enforcement is sought. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Common Shares then outstanding. No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of any
of the Transaction Documents unless the same consideration also is offered to
all of the parties to the Transaction Documents, holders of Common Shares or
holders of the Warrants, as the case may be. The Company has not, directly or
indirectly, made any agreements with any Buyers relating to the terms or
conditions of the transactions contemplated by the Transaction Documents except
as set forth in the Transaction Documents.
(f) Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
an overnight courier service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:
If to the Company:
DigitalThink, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Xxxxxx Godward LLP
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xx 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
If to the Transfer Agent:
Mellon Investor Services, LLC
000 Xxxxxxxxxx Xx., 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxx
If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers, with copies to such Buyer's representatives as set forth on the Schedule
of Buyers, or to such other address and/or facsimile number and/or to the
attention of such other Person as the recipient party has specified by written
notice given to each other party five (5) days prior to the effectiveness of
such change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively.
(g) Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Common Shares or the Warrants. The Company shall
not assign this Agreement or any rights or obligations hereunder without the
prior written consent of the holders of Common Shares representing at least a
majority of the number of the Common Shares, including by merger or
consolidation. A Buyer shall not assign its rights hereunder other than (i) to
an affiliate of a Buyer or (ii) with the prior written consent of the Company,
not to be unreasonably withheld or delayed. In the event of a valid assignment
of rights by a Buyer, Buyer's assignee shall be deemed to be a Buyer hereunder
with respect to such assigned rights.
(h) No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
(i) Survival. Unless this Agreement is terminated under Section 8, the
representations and warranties of the Company and the Buyers contained in
Sections 2 and 3, the agreements and covenants set forth in Sections 4, 5 and 9
shall survive the Closing. Each Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.
(j) Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(k) Indemnification. In consideration of each Buyer's execution and
delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company's other obligations under the Transaction
Documents, the Company shall defend, protect, indemnify and hold harmless each
Buyer and each other holder of the Securities and all of their stockholders,
partners, members, officers, directors, employees and direct or indirect
investors and any of the foregoing Persons' agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "Indemnitees")
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the "Indemnified Liabilities"), incurred by
any Indemnitee as a result of, or arising out of, or relating to (a) any
material inaccuracy in any representation or warranty made by the Company in the
Transaction Documents, (b) any breach of any covenant, agreement or obligation
of the Company contained in the Transaction Documents or (c) any cause of
action, suit or claim brought or made against such Indemnitee by a third party
(including for these purposes a derivative action brought on behalf of the
Company) and arising out of or resulting from (i) the execution, delivery,
performance or enforcement of the Transaction Documents or (ii) any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of the issuance of the Securities or (iii) the status of such Buyer or
holder of the Securities as an investor in the Company pursuant to the
Transaction Documents; provided that indemnification pursuant to this clause
(iii) shall not be available to the extent arising from any actions by such
Buyer or holder other than in connection with the execution of the Transaction
Documents or the purchase of the Securities pursuant thereto. Notwithstanding
the foregoing, solely in connection with an Additional Closing, the Indemnitees
shall not be entitled to seek indemnification with respect to any material
inaccuracy or material breach described in (a) or (b) above if the Company
disclosed such inaccuracy or breach prior to the applicable Additional Closing
and the Buyers determined to waive such inaccuracy or breach and proceed with
the applicable Additional Closing. To the extent that the foregoing undertaking
by the Company may be unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. Except as otherwise set
forth herein, the mechanics and procedures with respect to the rights and
obligations under this Section 9(k) shall be the same as those set forth in
Section 6 of the Registration Rights Agreement.
(l) No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.
(m) Remedies. Each Buyer and each holder of the Securities shall have all
rights and remedies set forth in the Transaction Documents and all rights and
remedies which such holders have been granted at any time under any other
agreement or contract and all of the rights which such holders have under any
law. Any Person having any rights under any provision of this Agreement shall be
entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law. Furthermore, the
Company recognizes that in the event that it fails to perform, observe, or
discharge any or all of its obligations under this Agreement, any remedy at law
may prove to be inadequate relief to the Buyers. The Company therefore agrees
that the Buyers shall be entitled to seek temporary and permanent injunctive
relief in any such case without the necessity of proving actual damages and
without posting a bond or other security.
(n) Payment Set Aside. To the extent that the Company makes a payment or
payments to the Buyers hereunder or pursuant to any of the other Transaction
Documents or the Buyers enforce or exercise their rights hereunder or
thereunder, and such payment or payments
or the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
(o) Independent Nature of Buyers' Obligations and Rights. The obligations
of each Buyer under any Transaction Document are several and not joint with the
obligations of any other Buyer, and no Buyer shall be responsible in any way for
the performance of the obligations of any other Buyer under any Transaction
Document. Nothing contained herein or in any other Transaction Document, and no
action taken by any Buyer pursuant hereto or thereto, shall be deemed to
constitute the Buyers as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Buyers are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. Each Buyer confirms that
it has independently participated in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Each Buyer
shall be entitled to independently protect and enforce its rights, including,
without limitations, the rights arising out of this Agreement or out of any
other Transaction Documents, and it shall not be necessary for any other Buyer
to be joined as an additional party in any proceeding for such purpose.
[Signature Page Follows]
IN WITNESS WHEREOF, each Buyer and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first written
above.
COMPANY: BUYERS:
DIGITALTHINK, INC. THE RIVERVIEW GROUP LLC
By:/s/ XXXXXXX X. XXXX By:/s/ XXXXX XXXXXX
-------------------------------- ------------------------------------
Name: Xxxxxxx X. Xxxx Name: Xxxxx Xxxxxx
Title: Chief Executive Officer Title: Chief Operating Officer
OMICRON MASTER TRUST
By:/s/ XXXXX XXXXXXXXX
------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Managing Partner
SCHEDULE OF BUYERS
(1) (2) (3) (4)
Number of
Initial Number of
Common Initial
Buyer Address and Facsimile Number Shares Warrants
The Riverview 000 Xxxxx Xxxxxx, 0xx xxxxx 3,125,000 1,093,750
Group LLC Xxx Xxxx, Xxx Xxxx 00000
Attention: Manager
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Residence: Delaware
Omicron Master c/o Omicron Capital L.P. 1,041,667 364,583
Trust 000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Residence: Bermuda
SCHEDULE OF BUYERS (continued)
(5) (6) (7)
Legal
Maximum Number of Maximum Number of Representative's
Additional Common Additional Address and
Shares Warrants Facsimile Number
1,562,500 546,875 Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
520,834 182,292
EXHIBITS
Exhibit A Form of Warrants
Exhibit B Form of Registration Rights Agreement
Exhibit C Form of Irrevocable Transfer Agent Instructions
Exhibit D Form of Company Counsel Opinion
Exhibit E Form of Secretary's Certificate
Exhibit F Form of Officer's Certificate
Exhibit G Buyer's Certificate of Subsequent Sale
EXHIBIT C
[DIGITALTHINK, INC. LETTERHEAD]
September 5, 2003
Mellon Investor Services, LLC
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxx
Xx. Xxxxx:
Reference is made to that certain Securities Purchase Agreement, dated as
of September 8, 2003 (the "Securities Purchase Agreement"), by and among
DigitalThink, Inc., a Delaware corporation (the "Company"), and the investors
named on the Schedule of Buyers attached thereto (collectively, the "Holders"),
pursuant to which the Company is issuing to the Holders shares (the "Common
Shares") of Common Stock of the Company, par value $0.001 per share (the "Common
Stock") and warrants (the "Warrants"), which are exercisable into shares of
Common Stock.
This letter shall serve as our irrevocable authorization and direction to
you (provided that you are the transfer agent of the Company at such time):
(i) to issue shares of Common Stock upon transfer or resale of the Common
Shares from time to time upon delivery to you of a properly completed and duly
executed Certificate of Subsequent Sale, in the form attached hereto as Exhibit
I; and
(ii) to issue shares of Common Stock upon exercise of the Warrants (the
"Warrant Shares") to or upon the order of a Holder from time to time upon
delivery to you of a properly completed and duly executed Exercise Notice, in
the form attached hereto as Exhibit II, which has been acknowledged by the
Company as indicated by the signature of a duly authorized officer of the
Company thereon.
You acknowledge and agree that so long as you have previously received (a)
written confirmation from the General Counsel of the Company (or its outside
legal counsel) that either (i) a registration statement covering resales of the
Common Shares or the Warrant Shares has been declared effective by the
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "1933 Act") and the Company has not subsequently notified you
that either such registration statement is no longer effective or that there is
a Grace Period (as such term is defined in the Registration Rights Agreement
between the Company and the Holders dated as of the date hereof) then in effect,
or (ii) that sales of the Common Shares or the Warrant Shares may be made in
conformity with Rule 144 under the 1933 Act and (b) if applicable, a copy of
such registration statement, then within two (2) business days of your receipt
of the Common Shares or the Exercise Notice, you shall issue the certificates
representing the Common Shares and/or the Warrant Shares, as applicable, and
such certificates shall not bear any legend restricting transfer of the Common
Shares or the Warrant Shares thereby and should not be subject to any
stop-transfer restriction; provided, however, that if such Common Shares and
Warrant Shares are not registered for resale under the 1933 Act or able to be
sold under Rule 144, then, the certificates for such Common Shares and/or
Warrant Shares shall bear the following legend:
[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN][THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR (B)
AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD
PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING,
THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
A form of written confirmation from the General Counsel of the Company or
the Company's outside legal counsel that a registration statement covering
resales of the Common Shares and the Warrant Shares has been declared effective
by the SEC under the 1933 Act is attached hereto as Exhibit III.
Please be advised that the Holders are relying upon this letter as an
inducement to enter into the Securities Purchase Agreement and, accordingly,
each Holder is a third party beneficiary to these instructions.
Please execute this letter in the space indicated to acknowledge your
agreement to act in accordance with these instructions. Should you have any
questions concerning this matter, please contact me at (000) 000-0000 or Xxxxx
Xxxxxx of Xxxxxx Godward LLP, our outside legal counsel, at (000) 000-0000.
Very truly yours,
DIGITALTHINK, INC.
By: _______________________
Xxx Xxxxxx,
Chief Financial Officer
THE FOREGOING INSTRUCTIONS ARE
ACKNOWLEDGED AND AGREED TO
This ___ day of September, 2003
MELLON INVESTOR SERVICES, LLC
By:
-
Name:
------------------------
Title:
-----------------------
Enclosures
cc: The Riverview Group, LLC
Omicron Master Trust
Xxxxxxx X. Xxxxx, Esq.
EXHIBIT I
BUYER'S CERTIFICATE OF SUBSEQUENT SALE
To: [INSERT TRANSFER AGENT]
Attention: [________________]
The undersigned, the Investor or an officer of, or other person duly
authorized by the Investor, hereby certifies that
_____________________________________ institution was the
[fill in name of institution]
purchaser of the shares evidenced by the attached certificate, and
as such, proposes to transfer such shares on or about _________________ either
[date]
(i) in accordance with the registration statement, file number [_______________]
in which case the Investor certifies that the requirement of delivering a
current prospectus has been complied with or will be complied with in connection
with such sale, or (ii) in accordance with Rule 144 under the Securities Act of
1933 ("Rule 144"), in which case the Purchaser certifies that it has complied
with or will comply with the requirements of Rule 144.
Print or type:
Name of Investor:
Name of Individual representing
Investor (if an Institution):
Title of Individual representing
Investor (if an Institution):
Signature by:
Purchaser or Individual
representing Investor:
EXHIBIT II
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
DIGITALTHINK, INC.
The undersigned holder hereby exercises the right to purchase _________________
of the shares of Common Stock ("Warrant Shares") of DigitalThink, Inc., a
Delaware corporation (the "Company"), evidenced by the attached Warrant to
Purchase Common Stock (the "Warrant"). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.
1. Form of Exercise Price. The Holder intends that payment of the Exercise
Price shall be made as:
_________ a "Cash Exercise" with respect to ______________ Warrant Shares;
and/or
_________ a "Cashless Exercise" with respect to ___________ Warrant Shares.
[Insert this paragraph (2) in the event that the holder has not elected a
Cashless Exercise in accordance with the terms of the Warrant as to all of the
Warrant Shares to be issued pursuant hereto] 2. Payment of Exercise Price. The
holder is hereby delivering to the Company payment in the amount of $_________
representing the Aggregate Exercise Price for such Warrant Shares not subject to
a Cashless Exercise in accordance with the terms of the Warrant.
3. Delivery of Warrant Shares. The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.
Date: _______________ __, ______
------------------------------------
Name of Registered Holder
By:
---------------------------------
Name:
Title:
ACKNOWLEDGMENT
The Company hereby acknowledges this Exercise Notice and hereby directs
[Transfer Agent] to issue the above indicated number of shares of Common Stock
in accordance with the Transfer Agent Instructions dated September __, 2003 from
the Company and acknowledged and agreed to by [Transfer Agent].
DIGITALTHINK, INC.
By:
--------------------------------
Name:
Title:
EXHIBIT III
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
Attn: [____________]
Re: DigitalThink, Inc.
Ladies and Gentlemen:
We are counsel to DigitalThink, Inc., a Delaware corporation (the
"Company"), and have represented the Company in connection with that certain
Securities Purchase Agreement, dated as of September 8, 2003 (the "Purchase
Agreement"), entered into by and among the Company and the buyers named therein
(collectively, the "Holders") pursuant to which the Company issued to the
Holders its shares of the Company's Common Stock, par value $0.001 per share
(the "Common Stock") and warrants exercisable for shares of Company Common Stock
(the "Warrants"). Pursuant to the Securities Purchase Agreement, the Company
also has entered into a Registration Rights Agreement with the Holders (the
"Registration Rights Agreement") pursuant to which the Company agreed, among
other things, to register the resale of the Registrable Securities (as defined
in the Registration Rights Agreement), including the Common Shares and the
shares of Company Common Stock issuable upon exercise of the Warrants under the
Securities Act of 1933, as amended (the "1933 Act"). In connection with the
Company's obligations under the Registration Rights Agreement, on ____________
___, 200_, the Company filed a Registration Statement on Form S-3 (File No.
333-_____________) (the "Registration Statement") with the Securities and
Exchange Commission (the "SEC") relating to the Registrable Securities which
names each of the Holders as a selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
[ISSUER'S COUNSEL]
By:_____________________
CC: [LIST NAMES OF HOLDERS]
EXHIBIT D
DIGITALTHINK, INC.
Form of Opinion
September [___], 2003
To the investors listed on Schedule A hereto (the "Buyers"):
Ladies and Gentlemen:
We have acted as counsel for DigitalThink, Inc., a Delaware corporation (the
"Company"), in connection with the issuance and sale of 4,166,667 shares of the
Company's Common Stock (the "Shares") and warrants (the "Warrants") to purchase
1,458,333 additional shares of the Company's Common Stock (the "Warrant
Shares"), to the Investors under the Securities Purchase Agreement dated as of
September 8, 2003 (the "Agreement"). We are rendering this opinion pursuant to
Section 7(a)(ii) of the Agreement. Except as otherwise defined herein,
capitalized terms used but not defined herein have the respective meanings given
to them in the Agreement.
In connection with this opinion, we have examined and relied upon the
representations and warranties as to factual matters contained in and made
pursuant to the Agreement by the various parties and originals or copies
certified to our satisfaction, of such records, documents, certificates,
opinions, memoranda and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below. Where we render
an opinion "to the best of our knowledge" or concerning an item "known to us" or
our opinion otherwise refers to our knowledge, it is based solely upon (i) an
inquiry of attorneys within this firm who are rendering services to the Company
in connection with the Agreement (Xxxxxxxxxxx Xxxxxxxx, Xxxxx Xxxxxxx, Xxxxx
Xxxxxx and Xxxxx Xxxxxx), (ii) receipt of a certificate executed by an officer
of the Company covering such matters, and (iii) such other investigation, if
any, that we specifically set forth herein.
In rendering this opinion, we have assumed: the genuineness and authenticity of
all signatures on original documents; the authenticity of all documents
submitted to us as originals; the conformity to originals of all documents
submitted to us as copies; the accuracy, completeness and authenticity of
certificates of public officials; and the due authorization,
execution and delivery of all documents (except the due authorization, execution
and delivery by the Company of the Agreement, the Registration Rights Agreement
and the Warrants (the "Agreements")), where authorization, execution and
delivery are prerequisites to the effectiveness of such documents. We have also
assumed: that all individuals executing and delivering documents had the legal
capacity to so execute and deliver; that you have received all documents you
were to receive under the Agreements; that the Agreements are obligations
binding upon you; if you are a corporation or other entity, that you have filed
any required California franchise or income tax returns and have paid any
required California franchise or income taxes; and that there are no extrinsic
agreements or understandings among the parties to the Agreements that would
modify or interpret the terms of the Agreements or the respective rights or
obligations of the parties thereunder.
Our opinion is expressed only with respect to the federal laws of the United
States of America, the General Corporation Law of the State of Delaware and the
laws of the State of California. We note that the parties to the Agreements have
designated the laws of the State of New York as the laws governing the
Agreements. Our opinion below as to the validity, binding effect and
enforceability of the Agreements is premised upon the result that would obtain
if a California court were to apply the internal laws of the State of California
(notwithstanding the designation of the laws of the State of New York) to the
interpretation and enforcement of the Agreements. We express no opinion as to
whether the laws of any particular jurisdiction apply, and no opinion to the
extent that the laws of any jurisdiction other than those identified above are
applicable to the subject matter hereof. We are not rendering any opinion as to
compliance with any antifraud law, rule or regulation.
On the basis of the foregoing, in reliance thereon and with the foregoing
qualifications, we are of the opinion that:
1. The Company has been duly incorporated and is a validly existing
corporation under the laws of the State of Delaware.
2. The Company has the requisite corporate power to own or lease its property
and assets and to conduct its business as, to our knowledge, it is
currently being conducted.
3. The Agreements have been duly and validly authorized, executed and
delivered by the Company and constitute valid and binding agreements of the
Company enforceable against the Company in accordance with their respective
terms, except as rights to indemnity under the Agreement and under the
Registration Rights Agreement may be limited by applicable laws and except
as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting
creditors' rights, and subject to general equity principles and to
limitations on availability of equitable relief, including specific
performance.
4. The Shares have been duly authorized, and upon issuance and delivery
against payment therefor in accordance with the terms of the Agreement, the
Shares will be validly issued, outstanding, fully paid and nonassessable.
The Warrant Shares have been duly authorized and reserved for issuance upon
exercise of the Warrants, and, upon issuance and delivery against payment
therefor in accordance with the terms of the Warrants, will be validly
issued, outstanding, fully paid and nonassessable.
5. The execution and delivery of the Agreements by the Company and the
issuance of the Shares and the Warrants pursuant to the Agreement do not
violate any provision of the Company's Certificate of Incorporation or
Bylaws, and do not contravene any governmental statute, rule or regulation
applicable to the Company.
6. If the Warrants were to be exercised by the Buyers at the Closing, the
issuance of the Warrant Shares to the Buyers would not violate any
provision of the Company's Certificate of Incorporation or Bylaws, and
would not contravene any governmental statute, rule or regulation
applicable to the Company.
7. All consents, approvals, authorizations, or orders of, and
filings, registrations, and qualifications with any regulatory
authority or governmental body in the United States required for
the issuance of the Shares, the Warrants and the Warrant Shares
have been made or obtained, except for the listing of the Common
Shares and the Warrant Shares on the Nasdaq National Market and
the effectiveness of the Registration Statement with the
Securities and Exchange Commission.
8. Subject to the accuracy as to factual matters of the Buyers'
representations in Section 2 of the Securities Purchase
agreement, the offer and sale of the Shares, the Warrants and, if
the Warrants were to be exercised by the Buyers at the Closing,
the Warrant Shares in accordance with the Warrants are exempt
from the registration requirements of the Securities Act of 1933,
as amended. subject to the timely filing of a Form D pursuant to
Securities and Exchange Commission Regulation D.
9. To our knowledge, there is no action, proceeding or investigation
pending against the Company before any court or administrative
agency that questions the validity of the Agreements or, except
as disclosed in the SEC Documents, might result, either
individually or in the aggregate, in any material adverse change
in the assets, financial condition or operations of the Company.
This opinion is intended solely for your benefit and is not to be made available
to or be relied upon by any other person, firm, or entity without our prior
written consent.
Very truly yours,
Schedule A
The Buyers
The Riverview Group, LLC
Omicron Master Trust
EXHIBIT E
DIGITALTHINK, INC.
SECRETARY'S CERTIFICATE
The undersigned hereby certifies that he is the duly elected, qualified
and acting Secretary of DigitalThink, Inc., a Delaware corporation (the
"Company"), and that as such he is authorized to execute and deliver this
certificate in the name and on behalf of the Company and in connection with the
Securities Purchase Agreement, dated as of the date hereof, among the Company,
and of the investors listed on the Schedule of Buyers attached thereto (the
"Purchase Agreement"), represents, warrants and further certifies in his
official capacity, in the name and on behalf of the Company, the items set forth
below. Any term not specifically defined herein shall have the meaning set forth
in the Agreement.
1. Attached hereto as Exhibit A is a true, correct and complete copy of
the Certificate of Incorporation of the Company, together with any and
all amendments thereto, and no action has been taken to further amend,
modify or repeal such Certificate of Incorporation, the same being in
full force and effect in the attached form as of the date hereof.
2. Attached hereto as Exhibit B is a true, correct and complete copy of
the Bylaws of the Company and any and all amendments thereto, and no
action has been taken to further amend, modify or repeal such Bylaws,
the same being in full force and effect in the attached form as of the
date hereof.
3. Attached hereto as Exhibit C is a true, correct and complete copy of
the resolutions duly adopted by the Board of Directors of the Company
at a meeting of the Board of Directors held on September 2, 2003. Such
resolutions have not in any way been amended, modified, revoked or
rescinded, have been in full force and effect since their adoption to
and including the date hereof and are now in full force and effect.
4. Each person listed below has been duly elected or appointed to the
position(s) indicated opposite his name and is duly authorized to sign
the Purchase Agreement and each of the
Transaction Documents (as defined in the Purchase Agreement) on
behalf of the Company, and the signature appearing opposite such
person's name below is such person's genuine signature.
Name Position Signature
Xxxxxxx Xxxx CEO /s/ Xxxxxxx Xxxx
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this 8th day
of September, 2003.
/s/ Xxx Xxxxxx
Name: Xxx Xxxxxx
Title: CFO
I, Xxxxxxx Xxxx, CEO of the Company, hereby certify that Xxx Xxxxxx. is the duly
elected, qualified and acting Secretary of the Company and that the signature
set forth above is his true signature.
/s/ Xxxxxxx Xxxx
Name: Xxxxxxx Xxxx
Title: CEO
EXHIBIT A
Certificate of Incorporation
EXHIBIT B
Amended and Restated Bylaws
EXHIBIT C
Resolutions
EXHIBIT F
DIGITALTHINK, INC.
II. OFFICER'S CERTIFICATE
The undersigned, Chief Executive Officer of DigitalThink, Inc., a Delaware
corporation (the "Company"), pursuant to Section 7(b)(ix) of the Securities
Purchase Agreement, dated as of September 8, 2003, by and among the Company and
the investors identified on the Schedule of Buyers attached thereto (the
"Securities Purchase Agreement"), hereby represents, warrants and certifies to
the Buyers as follows (capitalized terms used but not otherwise defined herein
shall have the meaning set forth in the Securities Purchase Agreement):
1. The representations and warranties made by the Company as set forth in
Section 3 of the Securities Purchase Agreement are true and correct as of
the date hereof (except for representations and warranties that speak as of
a specific date).
2. The Company has, in all respects, performed or complied with all covenants,
agreements and conditions required to be performed or complied with by it
at or prior to the date hereof under the Transaction Documents.
IN WITNESS WHEREOF, the undersigned has executed this certificate this __
day of ______, 200_.
---------------------------
Xxxxxxx Xxxx
Chief Executive Officer
EXHIBIT G
BUYER'S CERTIFICATE OF SUBSEQUENT SALE
To: [INSERT TRANSFER AGENT]
Attention: [________________]
The undersigned, the Investor or an officer of, or other person duly
authorized by the Investor, hereby certifies that
_____________________________________ institution was the
[fill in name of institution]
purchaser of the shares evidenced by the attached certificate, and
as such, proposes to transfer such shares on or about _________________ either
[date]
(i) in accordance with the registration statement, file number [_______________]
in which case the Investor certifies that the requirement of delivering a
current prospectus has been complied with or will be complied with in connection
with such sale, or (ii) in accordance with Rule 144 under the Securities Act of
1933 ("Rule 144"), in which case the Purchaser certifies that it has complied
with or will comply with the requirements of Rule 144.
Print or type:
Name of Investor:
Name of Individual representing
Investor (if an Institution):
Title of Individual representing
Investor (if an Institution):
Signature by:
Purchaser or Individual
representing Investor:
