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EXHIBIT 10.12
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement"), is made as of
January 21, 2000, by and between DigitalThink, Inc., a Delaware corporation
(the "Company) and ▇▇▇▇▇ Healthcare Corporation, Inc. ("Purchaser").
WHEREAS, the Purchaser desires to purchase common stock, $.001 par value
per share, of the Company (the "Common Stock"); and
WHEREAS, the Company desires to issue Common Stock to the Purchaser and,
in order to induce the Purchaser to purchase the Shares, desires to grant to
Purchaser the registration rights with respect to the Shares set forth in the
Registration Rights Agreement between the Company and Purchaser dated as of even
date herewith (the "Share Registration Rights Agreement");
NOW, THEREFORE, in consideration of the promises and the representations,
warranties and agreements set forth herein, the parties hereto agree as follows:
1. Purchase of Shares. Subject to the terms and conditions of this
Agreement, the Company shall sell to Purchaser, and Purchaser shall purchase
from the Company, on the Closing Date (as defined in Section 2), the number of
shares of the Company's Common Stock obtained by dividing (a) Four Million
Dollars ($4,000,000) by (b) 93% of the per share price paid by the public for
the Company's Common Stock in the Company's initial public offering of Common
Stock (the "IPO"). Such purchase price per share shall be the "Purchase Price,"
and each share of Common Stock purchased hereunder shall be a "Share" (and,
collectively, the "Shares"). The aggregate Purchase Price for the Shares shall
be payable on the Closing Date by wire transfer of immediately available funds.
On the Closing Date, upon receipt of such cash consideration, the Company shall
deliver to Purchaser a certificate or certificates representing the Shares,
registered in the name of Purchaser or its nominee.
2. The Closing. The closing of the transactions contemplated hereby (the
"Closing") shall take place concurrently with the closing of the IPO at the
offices of counsel to the Company, subject to the conditions precedent set forth
in Section 5 of this Agreement having been satisfied or waived, or at such other
time and/or place and/or on such date as the parties may mutually agree (the
"Closing Date").
3. Representations and Warranties of the Company. The Company hereby
represents and warrants to Purchaser as follows:
(a) Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its organization and has all requisite corporate power and authority to carry on
its business as now conducted. The Company is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure to so
qualify could be reasonably expected to have a material adverse effect on the
condition (financial or other), business, properties, or results of operations
of the Company (a "Material Adverse Effect").
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(b) Authorization; Enforceability. The Company, its officers, directors
and stockholders have taken all action necessary to authorize, execute and
deliver this Agreement and to consummate the transactions contemplated herein.
This Agreement and the Share Registration Rights Agreement each has been duly
executed by the Company and is a valid and binding obligation of the Company,
enforceable against it in accordance with its terms, except insofar as
enforceability may be affected by bankruptcy, insolvency or similar laws
affecting creditor's rights generally and the availability of any particular
equitable remedy.
(c) Valid Issuance of Shares. The Shares (i) are duly authorized by the
Company's articles of incorporation, (ii) are duly authorized to be issued by
the Company's board of directors, (iii) when issued, sold and delivered in
accordance with the terms of this Agreement, will be duly and validly issued,
fully paid and nonassessable and will be free of any preemptive rights, taxes,
security interests, adverse claims or restrictions on transfer, other than
restrictions on transfer under applicable state and federal securities laws.
Assuming the accuracy of the representations and warranties contained in Section
4 hereof, the offer and sale of the Shares as contemplated hereby are exempt
from registration under the Securities Act of 1933, as amended (the "Securities
Act") and under applicable state securities and "blue sky" laws, as currently in
effect.
(d) Compliance with Other Documents. Neither the execution or delivery of
this Agreement or the Share Registration Rights Agreement, the consummation of
the transactions contemplated hereby and thereby, nor the fulfillment of or
compliance with the terms and conditions hereof or thereof conflict with or will
result in a breach or violation of or default under any of the terms, conditions
or provisions of (i) the Company's organizational documents or (ii) any
agreement, order, judgment, decree, arbitration award, statute, regulation or
instrument to which it is a party or by which it or its assets are bound.
(e) No Consents. Other than consents obtained as of the date hereof, no
consent or approval, authorization, order, registration or qualification of or
with any governmental entity or any other person is required for the execution
and delivery of this Agreement and the Share Registration Rights Agreement and
the consummation of the transactions contemplated hereby and thereby.
(f) Registration Statement. The Company's registration statement on Form
S-1, as amended (Registration No. 333- 92429) (the "Registration Statement") and
each amendment or supplement thereto did not or will not, at the time filed with
the Securities and Exchange Commission, and will not, at the time it becomes
effective, include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(g) Title to Property and Assets. The Company owns its property and assets
free and clear of all mortgages, liens, loans and encumbrances, except such
encumbrances and liens that arise in the ordinary course of business and do not
materially impair the Company's ownership or use of such property or assets.
With respect to the property and assets it leases, the Company is in compliance
with such leases and, to the best of its knowledge, holds a valid leasehold
interest free of any liens, claims or encumbrances.
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(h) Capitalization. The Company's capitalization information
contained in the Registration Statement is complete and accurate as of the
dates specified therein.
(i) Litigation. Except as disclosed in the Registration Statement, there
are no actions, proceedings or investigations pending against the Company, that,
either individually or in the aggregate, could be reasonably expected to have a
Material Adverse Effect.
(j) Intellectual Property. Except as disclosed in the Registration
Statement, the Company owns, possesses or can acquire on reasonable terms,
adequate trademarks, trade names and other rights to inventions, know-how,
patents, copyrights, confidential information and other intellectual property
(collectively "Intellectual Property Rights") necessary to conduct the business
now operated by it, or presently employed by it, and has not received any notice
of infringement of or conflict with asserted rights of others with respect to
any Intellectual Property Rights.
(k) Financial Statements. The financial statements included in the
Registration Statement present fairly the financial position of the Company as
of the dates shown and its results of operations and cash flows for the periods
shown, and, except as otherwise disclosed in the Registration Statement, such
financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States, and such principles have
been applied on a consistent basis.
(l) Changes. Except as disclosed in the Registration Statement, since the
date of the latest audited financial statement included in the Registration
Statement, there has been no change, development or event that has had or could
reasonably be expected to have Material Adverse Effect.
(m) Taxes. The Company has filed on a timely basis all tax returns and
reports (including information returns and reports) as required by law. These
returns and reports are true and correct in all material respects. The Company
has paid all taxes and other assessments due, except those contested by it in
good faith and except to the extent that a reserve has been reflected on the
Company's financial statements in accordance with generally accepted accounting
principles. The provision for taxes of the Company as shown in the Company's
financial statements is adequate for taxes due or accrued as of the date
thereof.
4. Representations and Warranties by Purchaser. Purchaser hereby
represents and warrants to the Company as follows:
(a) Authorization. This Agreement constitutes the valid and legally
binding obligation of Purchaser enforceable against it in accordance with its
terms, except insofar as enforceability may be affected by bankruptcy,
insolvency or similar laws affecting creditor's rights generally and the
availability of any particular equitable remedy.
(b) Accredited Investor. Purchaser is an "accredited investor" as such
term is defined in Rule 501(a) of Regulation D promulgated under the Securities
Act.
(c) Investigation. Purchaser has carefully reviewed this Agreement and has
had the opportunity to make detailed inquiry concerning the Company, its
business and its personnel.
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Purchaser acknowledges that it has had the opportunity to ask questions of and
receive answers from the Company that Purchaser considers necessary for purposes
of purchasing the Shares. The foregoing, however, does not limit or modify the
representations and warranties of the Company in Section 3 of this Agreement or
the right of Purchaser to rely thereon.
(d) Restricted Securities. Purchaser understands that the Shares are
characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold only if they are subsequently registered under the
Securities Act or an exemption from such registration is available. Purchaser
represents that it is familiar with SEC Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Act.
(e) Purchase for Own Account. Purchaser is acquiring the Shares for
Purchaser's own account for investment and not with a view to, or for sale in
connection with, any distribution thereof in violation of the Securities Act.
Purchaser has no present agreement, understanding or arrangement to subdivide,
sell, assign or otherwise dispose of all or any part of the Shares.
5. Conditions to the Closing. The obligation of each of the parties hereto
to consummate the transactions contemplated hereby is subject to (i) the
concurrent consummation of the IPO, (ii) there being in effect no law, rule,
regulation, order or injunction which prohibits or makes illegal the
consummation of the transaction contemplated hereby and (iii) (a) in the case of
Purchaser, the accuracy as of the date when made and as of the Closing Date (as
if they had been made on and as of the Closing Date) of the representations and
warranties of the Company set forth herein and (b) in the case of the Company,
the accuracy as of the date when made and as of the Closing Date (as if they had
been made on and as of the Closing Date) of the representations and warranties
of Purchaser set forth herein.
6. Restrictions on Transfer.
(a) Agreement Not to Transfer. The Shares and the rights under this
Agreement may be sold, pledged, hypothecated, assigned, conveyed, transferred or
otherwise disposed of (each, a "Transfer") only (i) pursuant to an effective
registration statement under the Securities Act or pursuant to an exemption from
registration under the Securities Act in accordance with Rule 144 or another
available exemption or (ii) to the Company.
(b) Restrictive Legend. Unless and until otherwise permitted by this
Section 6, each certificate representing the Shares and any certificate issued
at any time upon transfer of, or in exchange for or replacement of, any
certificate bearing the legend set forth below shall be stamped or otherwise
imprinted with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED, ASSIGNED, CONVEYED, TRANSFERRED OR OTHERWISE DISPOSED OF,
EXCEPT IN
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COMPLIANCE WITH SUCH ACT AND LAWS. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF THE STOCK PURCHASE
AGREEMENT, DATED AS OF JANUARY 21, 2000. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF DIGITALTHINK, INC."
(c) Termination of Restrictions. The restrictions imposed by this Section
6 upon the transferability of the Shares shall cease and terminate as to any
particular certificate evidencing the Shares or shares of capital stock when (i)
such certificate or Shares shall have been effectively registered under the
Securities Act and sold by the holder thereof in accordance with such
registration or (ii) in the opinion of counsel for Purchaser (if such opinion is
reasonably satisfactory in form and substance to the Company), such restrictions
are no longer required in order to ensure compliance with the Securities Act.
Whenever the restrictions imposed by this Section 6 shall terminate as to any
certificate of Shares, as hereinabove provided, the holder thereof shall be
entitled to receive from the Company without expense, a new certificate for
Shares not bearing the restrictive legend set forth in Subsection (b) of this
Section.
7. Miscellaneous.
(a) Supplements and Amendments. This Agreement may be supplemented,
amended or waived only by a subsequent writing signed by each of the parties
hereto.
(b) Use of Purchaser's Name. The Company shall not, unless prior written
consent is given by Purchaser (which consent shall not to be unreasonably
withheld), create or disseminate any publicity using the name of Purchaser or
any of its affiliates, or any trade name or ▇▇▇▇ thereof, except, and only to
the extent, as may be required by law or legal process, including, without
limitation, federal and state securities laws and filings with the Securities
and Exchange Commission.
(c) Counterparts. This Agreement may be executed in any number of
counterparts and each such counterpart shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
(d) Successors and Assigns. Except as otherwise provided herein, this
Agreement and all of the terms and provisions hereof shall be binding upon and
inure to the benefit of the parties and their respective heirs, executors,
administrators, successors, trustees, legal representatives and assigns.
(e) Entire Agreement. This Agreement is intended by the parties as the
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein or
therein with respect to the registration rights granted by the Company with
respect to the securities sold pursuant to the Purchase Agreement.
(f) Applicable Law; Venue. This Agreement shall be deemed to be a contract
made under the laws of the State of New York and for all purposes shall be
construed in accordance with the laws of said State applicable to contracts made
and to be performed wholly within said
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State without regard to the conflict of law principles thereof. Venue for any
action to enforce the provisions of this agreement shall be exclusive in the
federal and state courts located in the City of New York in the State of New
York.
(g) Waiver of Trial by Jury. EACH OF THE PARTIES HERETO HEREBY (i) AGREES
NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND (ii)
WAIVES SUCH RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL
NOW OR HEREAFTER EXIST AS TO ANY ISSUE WITH RESPECT TO ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. Such waiver
of right to trial by jury is separately given, knowingly and voluntarily, by
each of the parties hereto, and this waiver is intended to encompass
individually each instance and each issue as to which the right to a jury trial
would otherwise accrue. Each of the parties hereto is hereby authorized and
requested to submit this Agreement to any court having jurisdiction, so as to
serve as conclusive evidence of the other party's waiver of the right to trial
by jury. Further, each of the parties hereto hereby certifies that no
representative or agent of such party has represented, expressly or otherwise,
to each of the parties hereto that the parties will not seek to enforce this
waiver of right to trial by jury.
(h) Severability. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the validity of the
remainder of the Agreement.
(i) Non-Waiver. No provision of this Agreement shall be deemed to have
been waived, unless such waiver is contained in a written notice given to the
party claiming such waiver has occurred, and no such waiver shall be deemed to
be a waiver of any other or further obligation or liability of the party or
parties in whose favor the waiver was given.
(j) Expenses. Each party shall pay its own expenses and costs incurred or
to be incurred in negotiating, closing and carrying out the transactions
contemplated hereby, irrespective of whether such transactions are actually
consummated.
(k) Termination Prior to the Closing.This Agreement shall terminate prior
to the Closing if the Closing does not occur within 40 calendar days from the
date hereof.
[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Stock
Purchase Agreement as of the date first above written.
THE COMPANY:
DIGITALTHINK, INC.
By:
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Name:
Title:
PURCHASER:
▇▇▇▇▇ HEALTHCARE CORPORATION
By:
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Name:
Title:
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