-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ql/0jxoHJ0ircLTSI4NtcJMq7kBNYIVcd/SPn09CDYecG7QonnhAqwhVQWgpM0Rx dV5PtOg2qSRpdGUIWF+riQ== 0000891618-02-001327.txt : 20020415 0000891618-02-001327.hdr.sgml : 20020415 ACCESSION NUMBER: 0000891618-02-001327 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20020321 GROUP MEMBERS: JAY C. HOAG GROUP MEMBERS: RICHARD H. KIMBALL GROUP MEMBERS: TCV II (Q), L.P. GROUP MEMBERS: TCV II STRATEGIC PARTNERS, L.P. GROUP MEMBERS: TCV II, V.O.F. GROUP MEMBERS: TECHNOLOGY CROSSOVER MANAGEMENT, L.L.C. GROUP MEMBERS: TECHNOLOGY CROSSOVER VENTURES II, C.V. GROUP MEMBERS: TECHNOLOGY CROSSOVER VENTURES II, L.P. GROUP MEMBERS: TECHNOLOGY CROSSOVER VENTURES, C.V. GROUP MEMBERS: TECHNOLOGY CROSSOVER VENTURES, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DIGITAL GENERATION SYSTEMS INC CENTRAL INDEX KEY: 0000934448 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ADVERTISING AGENCIES [7311] IRS NUMBER: 943140772 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-49603 FILM NUMBER: 02580994 BUSINESS ADDRESS: STREET 1: 5221 NORTH OCONNOR BLVD CITY: IRVING STATE: TX ZIP: 75039 BUSINESS PHONE: 4155466600 MAIL ADDRESS: STREET 1: 5221 NORTH OCONNOR BLVD CITY: IRVING STATE: TX ZIP: 75039 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TECHNOLOGY CROSSOVER MANAGEMENT II LLC CENTRAL INDEX KEY: 0001040275 IRS NUMBER: 770439710 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 56 MAIN ST STREET 2: STE 210 CITY: MILLBURN STATE: NJ ZIP: 07041 BUSINESS PHONE: 9734675320 MAIL ADDRESS: STREET 1: 56 MAIN ST STREET 2: STE 210 CITY: MILLBURN STATE: NJ ZIP: 07041 SC 13D/A 1 f80017d2sc13da.txt SCHEDULE 13D AMENDMENT #4 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 4) * DIGITAL GENERATION SYSTEMS, INC. (Name of Issuer) COMMON STOCK (Title of Class of Securities) 253921 10 0 ----------- (CUSIP Number) Eleanor Cornish, Esq. C/o Gunderson Dettmer Stough Villeneuve Franklin & Hachigan, LLP 610 Lincoln Street Waltham, MA 02451 781-795-3554 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) November 9, 2001 ---------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Technology Crossover Ventures, L.P. See Item 2 for identification of General Partner I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) AF,00 - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 749,464 Shares of Common Stock (A) ------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 0 Shares of Common Stock (A) OWNED BY ------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER PERSON REPORTING WITH 749,464 Shares of Common Stock (A) ------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 749,464 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.06% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN - -------------------------------------------------------------------------------- (A) Please see item 5. Includes warrants which are immediately exercisable for a total of 35,639 shares of Common Stock. - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Technology Crossover Ventures, C.V. See Item 2 for identification of General Partners I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) AF,00 - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Netherlands Antilles - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 59,353 Shares of Common Stock (A) ------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 0 Shares of Common Stock (A) OWNED BY ------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING REPORTING PERSON WITH 59,353 Shares of Common Stock (A) ------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 59,353 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN - -------------------------------------------------------------------------------- (A) Please see item 5. Includes warrants which are immediately exercisable for a total of 2,823 shares of Common Stock. - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Technology Crossover Management, L.L.C. See Item 2 identification of Managing Members I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) AF,00 - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 808,817 Shares of Common Stock (A) ------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 0 Shares of Common Stock (A) OWNED BY ------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING REPORTING PERSON WITH 808,817 Shares of Common Stock (A) ------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 808,817 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.14% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) OO - -------------------------------------------------------------------------------- (A) Please see item 5. Includes warrants which are immediately exercisable for a total of 38,462 shares of Common Stock. - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Technology Crossover Ventures II, L.P. See Item 2 for identification of General Partners I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) AF,00 - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 682,768 Shares of Common Stock (A) ------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 0 Shares of Common Stock (A) OWNED BY ------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING REPORTING PERSON WITH 682,768 Shares of Common Stock (A) ------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 682,768 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN - -------------------------------------------------------------------------------- (A) Please see item 5. Includes warrants which are immediately exercisable for a total of 36,798 shares of Common Stock. - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON TCV II (Q),L.P. See Item 2 for identification of General Partners I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) AF,00 - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 524,921 Shares of Common Stock (A) ------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 0 Shares of Common Stock (A) OWNED BY ------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING REPORTING PERSON WITH 524,921 Shares of Common Stock (A) ------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 524,921 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN - -------------------------------------------------------------------------------- (A) Please see item 5. Includes warrants which are immediately exercisable for a total of 28,291 shares of Common Stock. - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON TCV II Strategic Partners, L.P. See Item 2 for identification of General Partners I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) AF,00 - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 93,153 Shares of Common Stock (A) ------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 0 Shares of Common Stock (A) OWNED BY ------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING REPORTING PERSON WITH 93,153 Shares of Common Stock (A) ------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 93,153 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN - -------------------------------------------------------------------------------- (A) Please see item 5. Includes warrants which are immediately exercisable for a total of 5,020 shares of Common Stock. - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Technology Crossover Ventures II, C.V. See Item 2 for identification of General Partners I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) AF,00 - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Netherlands Antilles - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 104,246 Shares of Common Stock (A) ------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 0 Shares of Common Stock (A) OWNED BY ------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING REPORTING PERSON WITH 104,246 Shares of Common Stock (A) ------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 104,246 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN - -------------------------------------------------------------------------------- (A) Please see item 5. Includes warrants which are immediately exercisable for a total of 5,618 shares of Common Stock. - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON TCV II, V.O.F. See Item 2 for identification of General Partners I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) AF,00 - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Netherlands Antilles - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 22,179 Shares of Common Stock (A) ------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 0 Shares of Common Stock (A) OWNED BY ------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING REPORTING PERSON WITH 22,179 Shares of Common Stock (A) ------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 22,179 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN - -------------------------------------------------------------------------------- (A) Please see item 5. Includes warrants which are immediately exercisable for a total of 1,196 shares of Common Stock. - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Technology Crossover Management II, L.L.C. See Item 2 for identification of Managing Members I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) AF,00 - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 1,427,267 Shares of Common Stock (A) ------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 0 Shares of Common Stock (A) OWNED BY ------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING REPORTING PERSON WITH 1,427,267 Shares of Common Stock (A) ------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,427,267 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.02% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) OO - -------------------------------------------------------------------------------- (A) Please see item 5. Includes warrants which are immediately exercisable for a total of 76,923 shares of Common Stock. - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Jay C. Hoag I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) AF,00 - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. Citizen - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 Shares of Common Stock (A) ------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 2,236,084 Shares of Common Stock (A) OWNED BY ------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING REPORTING PERSON WITH 2,236,084 Shares of Common Stock (A) ------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,236,084 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.16% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN - -------------------------------------------------------------------------------- (A) Please see item 5. Includes warrants which are immediately exercisable for a total of 115,385 shares of Common Stock. - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Richard H. Kimball I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) AF,00 - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. Citizen - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 Shares of Common Stock (A) ------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 2,236,084 Shares of Common Stock (A) OWNED BY ------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING REPORTING PERSON WITH 2,236,084 Shares of Common Stock (A) ------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,236,084 Shares of Common Stock (A) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.16% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN - -------------------------------------------------------------------------------- (A) Please see item 5. Includes warrants which are immediately exercisable for a total of 115,385 shares of Common Stock. ITEM 1. SECURITY AND ISSUER. This statement relates to shares of common stock, par value $0.01 per share (the "Common Stock"), of Digital Generation Systems, Inc., a Delaware corporation (the "Company"). The Company's principal executive offices are located at 5221 North Oconnor Blvd., Irving, Texas 75039. ITEM 2. IDENTITY AND BACKGROUND. (a)-(c), (f). This statement is being filed by (1) TCV II, V.O.F., a Netherlands Antilles general partnership ("TCV II, V.O.F."), (2) Technology Crossover Ventures II, L.P., a Delaware limited partnership ("TCV II, L.P."), (3) TCV II (Q), L.P., a Delaware limited partnership ("TCV II (Q)"), (4) TCV II Strategic Partners, L.P., a Delaware limited partnership ("TCV II Strategic Partners"), (5) Technology Crossover Ventures II, C.V., a Netherlands Antilles general partnership ("TCV II, C.V."), (6) Technology Crossover Management II, a Delaware limited liability company ("TCM II"), (7) Technology Crossover Ventures, L.P., a Delaware limited partnership ("TCV, L.P."), (8) Technology Crossover Ventures, C.V., a Netherlands Antilles general partnership ("TCV, C.V."), (9) Technology Crossover Management, a Delaware limited liability company ("TCM I"), (10) Jay C. Hoag ("Mr. Hoag") and (11) Richard H. Kimball ("Mr. Kimball"). TCV II, V.O.F., TCV II, L.P., TCV II (Q), TCV II Strategic Partners, TCV II, C.V., TCM II, TCV, L.P., TCV, C.V., TCM I, Mr. Hoag and Mr. Kimball are sometimes collectively referred to herein as the Reporting Persons. The agreement among the Reporting Persons relating to the joint filing of this statement is attached hereto as Exhibit 1 and is incorporated by reference herein. TCV II, V.O.F., TCV II, L.P., TCV II (Q), TCV II Strategic Partners, TCV II, C.V., TCM II, TCV, L.P., TCV, C.V. and TCM I are each principally engaged in the business of investing in securities of the Company and other companies. TCM II is the sole general partner of TCV II, L.P., TCV II (Q) and TCV II Strategic Partners and the sole investment general partner of TCV II, V.O.F. and TCV II, C.V. TCM I is the sole general partner of TCV, L.P. and the sole investment general partner of TCV II, C.V. The address of the principal business and office of each of TCV II, V.O.F., TCV II, L.P., TCV II (Q), TCV II Strategic Partners, TCV II, C.V., TCM II, TCV, L.P., TCV, C.V. and TCM I is 528 Ramona Street, Palo Alto, California 94301. Mr. Hoag and Mr. Kimball are the managing members of TCM II and TCM I. Mr. Hoag and Mr. Kimball are each United States citizens, and the present principal occupation or employment of each is as a managing member of TCM II and TCM I and related entities. The business address of each of Mr. Hoag and Mr. Kimball is 528 Ramona Street, Palo Alto, California 94301. (d), (e). During the last five years, none of TCV II, V.O.F., TCV II, L.P., TCV II (Q), TCV II Strategic Partners, TCV II, C.V., TCM II, TCV, L.P., TCV, C.V., TCM I, Mr. Hoag or Mr. Kimball has (1) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (2) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Pursuant to the terms of a Common Stock Purchase Agreement dated December 9, 1998 (the "Purchase Agreement") by and among the Company, on the one hand, and TCV II, V.O.F., TCV II, L.P., TCV II (Q), TCV II Strategic Partners, TCV II, C.V., TCV, L.P., and TCV, C.V., (the "Investors"), on the other hand, the Company agreed to issue and sell, and the Investors agreed to purchase shares of the Company's Common Stock at a price of $3.25 per share of Common Stock (the "Shares") (see table below). Pursuant to the Purchase Agreement, the Company also agreed to issue to the Investors warrants (the "Warrants"), at a price of $.01 per underlying share to purchase shares of Common Stock at a per share exercise price of $3.25 (the "Warrant Shares") (see table below). In consideration for the Shares and Warrants, the Investors paid the Company $750,753, upon the closing date for the transaction, December 9, 1998 (the "Closing Date").
Name Shares Acquired Warrants Acquired - --------------- --------------- ----------------- TCV II, V.O.F. 2,392 1,196 TCV II, L.P. 73,596 36,798 TCV II (Q) 56,582 28,291 TCV II Strategic Partners 10,040 5,020 TCV II, C.V. 11,236 5,618 TCV, L.P. 71,278 35,639 TCV, C.V. 5,646 2,823
The source of funds for the acquisition of the Shares and Warrants by the Investors was from capital contributions from their respective partners. The Purchase Agreement is attached hereto as Exhibit B and is incorporated by reference herein. Pursuant to the terms of a Common Stock Purchase Agreement dated December 17, 1999 (the "99 Purchase Agreement") by and among the Company, on the one hand, and TCV II, V.O.F., TCV II, L.P., TCV II (Q), TCV II Strategic Partners and TCV II, C.V. (the "99 Investors"), on the other hand, the Company agreed to issue and sell, and the Investors agreed to purchase shares of the Company's Common Stock at a price of $5.171 per share of Common Stock (the "99 Shares") (see table below). In consideration for the 99 Shares, the Investors paid the Company $750,002, upon the closing date for the transaction, December 22, 1999 (the "99 Closing Date").
Name Shares Acquired - --------------------------- --------------- TCV II, V.O.F. 2,254 TCV II, L.P. 69,383 TCV II (Q) 53,343 TCV II Strategic Partners 9,467 TCV II, C.V. 10,593
The source of funds for the acquisition of the 99 Shares by the 99 Investors was from capital contributions from their respective partners. The 99 Purchase Agreement is attached hereto as Exhibit C and is incorporated by reference herein. ITEM 4. PURPOSE OF TRANSACTION. REGISTRATION RIGHTS AGREEMENT Pursuant to the Purchase Agreement, the Company and the Investors agreed to enter into a Registration Rights Agreement dated the Closing Date. Pursuant to the Registration Rights Agreement, the Company has agreed to register the Warrant Shares, subject to certain exceptions. The Company is obligated to pay all expenses incurred in connection with such registrations (other than brokers' fees, underwriting discounts and commissions, investment banking fees applicable to the Investors' securities and Investors' legal fees, which will be borne by the Investors). The Company has agreed to indemnify the Investors and related persons against certain liabilities under the securities laws in connection with the sale of securities under such registrations. A copy of the Registration Rights Agreement is attached hereto as Exhibit D and is incorporated by reference herein. WARRANTS The Warrants represent the right to purchase shares of the Company's Common Stock at an exercise price of $3.25 per share. Payment of the exercise price may be made in cash. A copy of the form of Warrant issued to the Investors is attached hereto as Exhibit E and is incorporated by reference herein. The Reporting Persons acquired the Shares, 99 Shares and Warrants for investment purposes. Depending on the factors discussed herein, the Reporting Persons may, from time to time, exercise all or a portion of the Warrants and may acquire additional shares of Common Stock and/or retain and/or sell all or a portion of the Shares, 99 Shares, Warrants and/or Common Stock issued upon exercise of the Warrants in the open market or in privately negotiated transactions. Any actions the Reporting Persons might undertake will be dependent upon the Reporting Persons' review of numerous factors, including, among other things, the price levels of the Common Stock; general market and economic conditions; ongoing evaluation of the Company's business, financial condition, operations and prospects; the relative attractiveness of alternative business and investment opportunities; and other future developments. Except as set forth above, the Reporting Persons have no present plans or intentions which would result in or relate to any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a), (b). As of the close of business on November 9, 2001, TCV II, V.O.F., TCV II, L.P., TCV II (Q), TCV II Strategic Partners, TCV II, C.V., TCV, L.P., and TCV, C.V. direct ownership of Common Stock is as follows:
Name of Investor Number of Total Shares Percentage of Outstanding Shares (Including Warrants) Outstanding Shares(1) - ------------------ ---------------------- --------------------- TCV II, V.O.F. 22,179 less than 1.00% TCV II, L.P. 682,768 less than 1.00% TCV II (Q) 524,921 less than 1.00% TCV II Strategic Partners 93,153 less than 1.00% TCV II, C.V. 104,246 less than 1.00% TCV, L.P. 749,464 1.06% TCV, C.V. 59,353 less than 1.00%
(1) All percentages in this table are based on the 70,752,501 shares of Common Stock of the Company outstanding, as reported in the Company's Quarterly Report on Amended Form on 10-Q filed with the Securities and Exchange Commission on December 31, 2001. Each of TCV II, V.O.F., TCV II, L.P., TCV II (Q), TCV II Strategic Partners and TCV II, C.V. (together the TCV II Funds) has the sole power to dispose or direct the disposition of the Shares, 99 Shares and Warrants which it holds directly and the Warrant Shares acquirable upon exercise of the Warrants. Each of the TCV II Funds has the sole power to direct the vote of its respective Shares and 99 Shares, and will have the power to vote or direct the vote of the Warrant Shares upon exercise of the Warrants. TCM II as the sole general partner of TCV II, L.P., TCV II (Q) and TCV II Strategic Partners and as the investment general partner of TCV II, V.O.F. and TCV II, C.V. may also be deemed to have the sole power to dispose or direct the disposition of the Shares, 99 Shares and Warrants and the Warrant Shares and direct the vote of the Shares, 99 Shares and Warrant Shares upon exercise of the Warrants. TCM II disclaims beneficial ownership of such securities except to the extent of its pecuniary interest therein. Each of TCV, L.P. and TCV, C.V. (together the TCV Funds) has the sole power to dispose or direct the disposition of the Shares and Warrants which it holds directly and the Warrant Shares acquirable upon exercise of the Warrants. Each of the TCV Funds has the sole power to direct the vote of its respective Shares, and will have the power to vote or direct the vote of the Warrant Shares upon exercise of the Warrants. TCM I as the sole general partner of TCV, L.P. and as the investment general partner of TCV, C.V. may also be deemed to have the sole power to dispose or direct the disposition of the Shares and Warrants and the Warrant Shares upon exercise of the Warrants and direct the vote of the Shares and Warrant Shares upon exercise of the Warrants. TCM I disclaims beneficial ownership of such securities except to the extent of its pecuniary interest therein. Messrs. Hoag and Kimball are the managing members of TCM II and TCM I. Under the operating agreements of TCM II and TCM I, each of Messrs. Hoag and Kimball have the independent power to cause the funds managed by TCM II and TCM I to buy and sell securities of publicly traded portfolio companies; however, in general, they must act by unanimous consent with respect to all other matters, including directing the voting of such securities. As a result, each of Messrs. Hoag and Kimball may be deemed to each have the sole power to dispose or direct the disposition of the Shares, 99 Shares, Warrants which it holds directly and the Warrant Shares acquirable upon exercise of the Warrants held by TCV II Funds and TCV Funds and the shared power to direct the vote of the Shares, 99 Shares and Warrant Shares upon exercise of the Warrants held by TCV II Funds and TCV Funds. Messrs. Hoag and Kimball disclaim beneficial ownership of the securities owned by TCV II Funds and TCV Funds except to the extent of their pecuniary interest therein. The Reporting Persons may be deemed to be acting as a group in relation to their respective holdings in the Company but do not affirm the existence of any such group. Except as set forth in this Item 5(a) - (b), each of the Reporting Persons disclaims beneficial ownership of any Common Stock owned beneficially or of record by any other Reporting Person. (c) The following is a list of all transactions in the Company's securities by the Item 2 Persons effected within 60 days prior to and including November 9, 2001:
Name Date Shares Sold Price Per Share - --------------- ------- ----------- --------------- TCV, L.P. 8/13/01 77,743 $2.4654 TCV, C.V. 8/13/01 6,157 $2.4654
Name Date Shares Sold Price Per Share - --------------- ------- ----------- --------------- TCV II, V.O.F. 8/14/01 2,737 $2.4654 TCV II, L.P. 8/14/01 84,242 $2.4654 TCV II (Q) 8/14/01 64,766 $2.4654 TCV II Strategic Partners 8/14/01 11,494 $2.4654 TCV II, C.V. 8/14/01 12,861 $2.4654
Name Date Shares Sold Price Per Share - --------------- ------- ----------- --------------- TCV II, V.O.F. 10/26/01 4,662 $1.00 TCV II, L.P. 10/26/01 143,512 $1.00 TCV II (Q) 10/26/01 110,334 $1.00 TCV II Strategic Partners 10/26/01 19,580 $1.00 TCV II, C.V. 10/26/01 21,912 $1.00
Name Date Shares Sold Price Per Share - --------------- ------- ----------- --------------- TCV, L.P. 11/9/01 84,322 $1.30 TCV, C.V. 11/9/01 6,678 $1.30 TCV II, V.O.F. 11/9/01 2,471 $1.30 TCV II, L.P. 11/9/01 76,061 $1.30 TCV II (Q) 11/9/01 58,477 $1.30 TCV II Strategic Partners 11/9/01 10,378 $1.30 TCV II, C.V. 11/9/01 11,613 $1.30
(d) Inapplicable. (e) Reporting Person ceased to be the beneficial owner of five percent of the class of securities outstanding on January 18, 2001. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Pursuant to the Purchase Agreement, the Company and the Investors agreed to enter into a Registration Rights Agreement dated the Closing Date. The Company has agreed to register the Warrant Shares, subject to certain exceptions. The Company is obligated to pay all expenses incurred in connection with such registrations (other than brokers' fees, underwriting discounts and commissions, investment banking fees applicable to the Investors' securities and Investors' legal fees, which will be borne by the Investors). The Company has agreed to indemnify the Investors and related persons against certain liabilities under the securities laws in connection with the sale of securities under such registrations. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS: A - Statement Appointing Designated Filer and Authorized Signer dated November 5, 2001. B - Common Stock Purchase Agreement dated December 9, 1998 by and among the Company, on the one hand, and TCV II, V.O.F., TCV II, L.P., TCV II (Q), TCV II Strategic Partners, TCV II, C.V., TCV, L.P., and TCV, C.V. on the other. C - Common Stock Purchase Agreement dated December 17, 1999 by and among the Company, on the one hand, and TCV II, V.O.F., TCV II, L.P., TCV II (Q), TCV II Strategic Partners and TCV II, C.V. on the other. D - Registration Rights Agreement dated December 9, 1998 by and among the Company, on the one hand, and TCV II, V.O.F., TCV II, L.P., TCV II (Q), TCV II Strategic Partners, TCV II, C.V., TCV, L.P., and TCV, C.V. on the other (incorporated by reference to Exhibit 4.5 to the Company's Report on Form S-3 filed with the Securities and Exchange Commission on December 31, 1998). E. -- Warrant to Purchase Common Stock Dated December 9, 1998. F -- Joint Filing Statement. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated March 21, 2002 TECHNOLOGY CROSSOVER VENTURES, L.P., a Delaware Limited Partnership By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory TECHNOLOGY CROSSOVER VENTURES, C.V., a Netherlands Antilles Limited Partnership By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory TECHNOLOGY CROSSOVER MANAGEMENT, L.L.C., a Delaware Limited Liability Company By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory TECHNOLOGY CROSSOVER VENTURES II, L.P., a Delaware Limited Partnership By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory TCV II (Q), L.P., a Delaware Limited Partnership By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory TCV II STRATEGIC PARTNERS, L.P., a Delaware Limited Partnership By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory TECHNOLOGY CROSSOVER VENTURES II, C.V., a Netherlands Antilles Limited Partnership By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory TCV II, V.O.F., a Netherlands Antilles General Partnership By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory TECHNOLOGY CROSSOVER MANAGEMENT II, L.L.C., a Delaware Limited Liability Company By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory JAY C. HOAG By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory RICHARD H. KIMBALL By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory EXHIBIT INDEX A - Statement Appointing Designated Filer and Authorized Signer dated November 5, 2001. B - Common Stock Purchase Agreement dated December 9, 1998 by and among the Company, on the one hand, and TCV II, V.O.F., TCV II, L.P., TCV II (Q), TCV II Strategic Partners, TCV II, C.V., TCV, L.P., and TCV, C.V. on the other. C - Common Stock Purchase Agreement dated December 17, 1999 by and among the Company, on the one hand, and TCV II, V.O.F., TCV II, L.P., TCV II (Q), TCV II Strategic Partners and TCV II, C.V. on the other. D - Registration Rights Agreement dated December 9, 1998 by and among the Company, on the one hand, and TCV II, V.O.F., TCV II, L.P., TCV II (Q), TCV II Strategic Partners, TCV II, C.V., TCV, L.P., and TCV, C.V. on the other (incorporated by reference to Exhibit 4.5 to the Company's Report on Form S-3 filed with the Securities and Exchange Commission on December 31, 1998). E. -- Warrant to Purchase Common Stock Dated December 9, 1998. F -- Joint Filing Statement. EX-99.(A) 3 f80017d2ex99-a.txt EXHIBIT A Exhibit A STATEMENT APPOINTING DESIGNATED FILER AND AUTHORIZED SIGNATORIES, NOVEMBER 5, 2001 Each of the entities listed on Schedule A attached hereto (each a "Reporting Entity") and each party listed on Schedule B attached hereto (each a "Reporting Individual"; together with the Reporting Entities, the "Reporting Persons") hereby authorizes and designates Robert C. Bensky, Carla S. Newell and Stanley J. Meresman (the "Designated Filer"), for so long as each is employed by TCMI, Inc., to prepare and file on behalf of such Reporting Person individually, or jointly together with other Reporting Persons, any and all reports, notices, communications and other documents (including, but not limited to, reports on Schedule 13D, Schedule 13G, Form 3, Form 4 and Form 5) that such Reporting Person may be required to file with the United States Securities and Exchange Commission or with any regulatory body, including United States federal, state and self-regulatory bodies, with respect to the Reporting Person's ownership of, or transactions in, the securities of any entity whose securities are beneficially owned (directly or indirectly) by such Reporting Person (collectively, the "Companies"). Each Reporting Person hereby further authorizes and designates Robert C. Bensky, Carla S. Newell and Stanley J. Meresman (each, an "Authorized Signatory") to execute and file on behalf of such Reporting Person the Reports and to perform any and all other acts, which in the opinion of the Designated Filer or an Authorized Signatory may be necessary or incidental to the performance of the foregoing powers herein granted. The authority of the Designated Filer and each Authorized Signatory under this Document with respect to each Reporting Person shall continue until such Reporting Person is no longer required to file any Reports with respect to the Reporting Person's ownership of, or transactions in, the securities of the Companies, unless earlier revoked in writing. Each Reporting Person acknowledges that the Designated Filer and the Authorized Signatory are not assuming any of the Reporting Person's responsibilities to comply with any United States federal or state law or with any regulations promulgated thereto. EXHIBIT A Technology Crossover Ventures, L.P. Technology Crossover Ventures, C.V. Technology Crossover Management, L.L.C. TCV II, V.O.F. Technology Crossover Ventures II, L.P. TCV II (Q), L.P. TCV II Strategic Partners, L.P. Technology Crossover Ventures II, C.V. Technology Crossover Management II, L.L.C. TCV III (GP) TCV III, L.P. TCV III (Q), L.P. TCV III Strategic Partners, L.P. Technology Crossover Management III, L.L.C. TCV IV, L.P. TCV IV Strategic Partners, L.P. Technology Crossover Management IV, L.L.C. TCV Franchise Fund, L.P. TCVF Management, L.L.C. The Kimball Family Trust Uta dated 2/23/94 The Hoag Family Trust U/A Dtd 8/2/94 EXHIBIT B Jay C. Hoag Richard H. Kimball Jon Q. Reynolds Michael G. Linnert Carla S. Newell Brooke Seawell Will Griffith Stanley J. Meresman Henry Feinberg November 5, 2001 The Kimball Family Trust Uta dated 2/23/94 /s/ RICHARD A. KIMBALL ----------------------------------------------- Richard H. Kimball, Trustee November 5, 2001 The Hoag Family Trust U/A Dtd 8/2/94 /s/ JAY C. HOAG ----------------------------------------------- Jay C. Hoag, Trustee November 5, 2001 Technology Crossover Ventures, L.P., a Delaware Limited Partnership By: Technology Crossover Management, L.L.C., a Delaware Limited Liability Company, Its General Partner By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 Technology Crossover Ventures, C.V., a Netherlands Antilles Limited Partnership By: Technology Crossover Management, L.L.C., a Delaware Limited Liability Company, Its Investment General Partner By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 Technology Crossover Management, L.L.C., a Delaware Limited Liability Company, By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 The Kimball Family Trust Uta dated 2/23/94 /s/ RICHARD H. KIMBALL ----------------------------------------------- Richard H. Kimball, Trustee November 5, 2001 The Hoag Family Trust U/A Dtd 8/2/94 By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Trustee November 5, 2001 Technology Crossover Ventures, L.P., a Delaware Limited Partnership By: Technology Crossover Management, L.L.C., a Delaware Limited Liability Company, Its General Partner By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 Technology Crossover Ventures, C.V., a Netherlands Antilles Limited Partnership By: Technology Crossover Management, L.L.C., a Delaware Limited Liability Company, Its Investment General Partner By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 Technology Crossover Management, L.L.C., a Delaware Limited Liability Company, By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 TCV II, V.O.F., a Netherlands Antilles General Partnership By: Technology Crossover Management II, L.L.C., a Delaware Limited Liability Company, Its Investment General Partner By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 Technology Crossover Ventures II, L.P., a Delaware Limited Partnership By: Technology Crossover Management II, L.L.C., a Delaware Limited Liability Company, Its General Partner By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 TCV II (Q), L.P., a Delaware Limited Partnership By: Technology Crossover Management II, L.L.C., a Delaware Limited Liability Company, Its General Partner By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 TCV II Strategic Partners, L.P., a Delaware Limited Partnership By: Technology Crossover Management II, L.L.C., a Delaware Limited Liability Company, Its General Partner By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 Technology Crossover Ventures II, C.V., a Netherlands Antilles Limited Partnership By: Technology Crossover Management II, L.L.C., a Delaware Limited Liability Company, Its Investment General Partner By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 Technology Crossover Management II, L.L.C., a Delaware Limited Liability Company, By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 TCV III (GP), a Delaware General Partnership . By: Technology Crossover Management III, L.L.C., a Delaware Limited Liability Company, Its Managing General Partner By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 TCV III, L.P., a Delaware Limited Partnership By: Technology Crossover Management III, L.L.C., a Delaware Limited Liability Company, Its General Partner By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 TCV III (Q), L.P., a Delaware Limited Partnership By: Technology Crossover Management III, L.L.C., a Delaware Limited Liability Company, Its General Partner By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 TCV III Strategic Partners, L.P., a Delaware Limited Partnership By: Technology Crossover Management III, L.L.C., a Delaware Limited Liability Company, Its General Partner By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 Technology Crossover Management III, L.L.C., a Delaware Limited Liability Company, By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 TCV IV, L.P., a Delaware Limited Partnership By: Technology Crossover Management IV, L.L.C., a Delaware Limited Liability Company, Its General Partner By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 TCV IV Strategic Partners, L.P., a Delaware Limited Partnership By: Technology Crossover Management IV, L.L.C., a Delaware Limited Liability Company, Its General Partner By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 Technology Crossover Management IV, L.L.C., a Delaware Limited Liability Company, By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 TCV Franchise Fund, L.P., a Delaware Limited Partnership By: TCVF Management, L.L.C., a Delaware Limited Liability Company Its General Partner By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member November 5, 2001 TCVF Management, L.L.C., a Delaware Limited Liability Company By: /s/ JAY C. HOAG -------------------------------------------- Jay C. Hoag, Managing Member IN WITNESS WHEREOF, the undersigned has caused this Statement Appointing Designated Filer and Authorized Signatories to be effective as of November 5, 2001. REPORTING PERSONS: November 5, 2001 /s/ JAY C. HOAG ------------------------------------------------- Jay C. Hoag November 5, 2001 ------------------------------------------------- Richard H. Kimball November 5, 2001 ------------------------------------------------- Jon Q. Reynolds November 5, 2001 ------------------------------------------------- Michael G. Linnert November 5, 2001 /s/ CARLA S.NEWELL ------------------------------------------------- Carla S. Newell IN WITNESS WHEREOF, the undersigned has caused this Statement Appointing Designated Filer and Authorized Signatories to be effective as of November 5, 2001. REPORTING PERSONS: November 5, 2001 --------------------------------------------- Jay C. Hoag November 5, 2001 /s/ RICHARD H. KIMBALL --------------------------------------------- Richard H. Kimball November 5, 2001 --------------------------------------------- Jon Q. Reynolds November 5, 2001 --------------------------------------------- Michael G. Linnert November 5, 2001 /s/ CARLA S. NEWELL --------------------------------------------- Carla S. Newell IN WITNESS WHEREOF, the undersigned has caused this Statement Appointing Designated Filer and Authorized Signatories to be effective as of November 5, 2001. . REPORTING PERSONS: November 5, 2001 ------------------------------------------------- Jay C. Hoag November 5, 2001 ------------------------------------------------- Richard H. Kimball November 5, 2001 /s/ JON Q. REYNOLDS ------------------------------------------------- Jon Q. Reynolds November 5, 2001 ------------------------------------------------- Michael G. Linnert November 5, 2001 /s/ CARLA S. NEWELL ------------------------------------------------- Carla S. Newell IN WITNESS WHEREOF, the undersigned has caused this Statement Appointing Designated Filer and Authorized Signatories to be effective as of November 5, 2001. REPORTING PERSONS November 5, 2001 ------------------------------------------------- Jay C. Hoag November 5, 2001 ------------------------------------------------- Richard H. Kimball November 5, 2001 ------------------------------------------------- Jon Q. Reynolds November 5, 2001 /s/ MICHAEL G. LINNERT ------------------------------------------------- Michael G. Linnert November 5, 2001 /s/ CARLA S. NEWELL ------------------------------------------------- Carla S. Newell IN WITNESS WHEREOF, the undersigned has caused this Statement Appointing Designated Filer and Authorized Signatories to be effective as of November 5, 2001. REPORTING PERSONS: November 5, 2001 ------------------------------------------------- Jay C. Hoag November 5, 2001 ------------------------------------------------- Richard H. Kimball November 5, 2001 ------------------------------------------------- Jon Q. Reynolds November 5, 2001 ------------------------------------------------- Michael G. Linnert November 5, 2001 /s/ CARLA S. NEWELL ------------------------------------------------- Carla S. Newell November 5, 2001 /s/ WILLIAM GRIFFITH ------------------------------------------------- Will Griffith November 5, 2001 ------------------------------------------------- Brooke Seawell November 5, 2001 ------------------------------------------------- Stanley J. Meresman November 5, 2001 ------------------------------------------------- Henry Feinberg November 5, 2001 ------------------------------------------------- Will Griffith November 5, 2001 /s/ BROOKE SEAWELL ------------------------------------------------- Brooke Seawell November 5, 2001 ------------------------------------------------- Stanley J. Meresman November 5, 2001 ------------------------------------------------- Henry Feinberg November 5, 2001 ------------------------------------------------- Will Griffith November 5, 2001 ------------------------------------------------- Brooke Seawell November 5, 2001 /s/ STANLEY J. MERESMAN ------------------------------------------------- Stanley J. Meresman November 5, 2001 ------------------------------------------------- Henry Feinberg EX-99.(B) 4 f80017d2ex99-b.txt EXHIBIT B Exhibit B COMMON STOCK AND WARRANT PURCHASE AGREEMENT December 9. 1998 TABLE OF CONTENTS
Page ---- 1. Purchase and Sale of the Common Shares and the Warrants .....................1 1.1 Sale and Issuance of Common Shares and the Warrants ...............1 1.2 Closing ...........................................................2 2. Representations and Warranties of the Company ...............................2 2.1 Authorization .....................................................2 2.2 Valid Issuance of Common Shares and Warrants ......................2 2.3 Offering ..........................................................2 2.4 Additional Information ............................................2 3. Representations and Warranties of the Investors .............................3 3.1 Authorization .....................................................3 3.2 Purchase Entirely for Own Account. ................................3 3.3 Disclosure of Information .........................................3 3.4 Investment Experience .............................................3 3.5 Accredited Investor ...............................................4 3.6 Restricted Securities .............................................4 3.7 Further Limitations on Disposition ................................4 3.8 Legends ...........................................................4 4. Conditions of Investors' Obligations at Closing .............................5 4.1 Representations and Warranties ....................................5 4.2 Performance .......................................................5 4.3 Qualifications ....................................................5 4.4 Proceedings and Documents .........................................5 4.5 Registration Rights Agreement .....................................5 5. Conditions of the Company's Obligations at Closing ..........................5 5.1 Representations and Warranties ....................................5 5.2 Payment of Purchase Price .........................................6 5.3 Qualifications ....................................................6 6. Miscellaneous ...............................................................6 6.1 Survival of Warranties ............................................6 6.2 Successors and Assigns ............................................6 6.3 Governing Law .....................................................6 6.4 Counterparts ......................................................6 6.5 Titles and Subtitles ..............................................6 6.6 Notices ...........................................................6 6.7 Finder's Fee ......................................................6 6.8 Expenses ..........................................................7 6.9 Amendments and Waivers ............................................7 6.10 Severability .....................................................7
i DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WANT PURCHASE AGREEMENT THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT is made as of the 9th day of December, 1998, by and among Digital Generation Systems, Inc., a California corporation (the "Company"), and the investors, severally and not jointly, listed on Schedule A hereto, each of which is herein referred to as an "Investor." WHEREAS, the Company desires to sell, and the Investors desire to purchase, shares of the Company's Common Stock (the "Common Shares") with an aggregate purchase price of three million three dollars and fifty cents ($3,000,003.50) and at a price per share equal to three dollars and twenty-five cents ($3.25) (the "Purchase Price"); and WHEREAS, the Company desires to sell, and the Investors desire to purchase for an aggregate purchase price of three thousand dollars ($3,000), warrants, in the form attached hereto as Exhibit A (the "Warrants"), to purchase shares of the Company's Common Stock in an amount equal to fifty percent (50%) of the number of Common Shares purchased by each Investor pursuant to this Agreement (the "Warrant Shares") and with an exercise price equal to the Purchase Price of the Common Shares. NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS: 1. Purchase and Sale of the Common Shares and the Warrants. 1.1 Sale and Issuance of the Common Shares and the Warrants. (a) On or prior to the Closing (as defined below), the Company shall have authorized (i) the sale and issuance to the Investors of the Common Shares, (ii) the sale and issuance to the Investors of the Warrants and (iii) the issuance of the Warrant Shares to be issued upon exercise of the Warrants. (b) Subject to the teens and conditions of this Agreement, each Investor agrees, severally and not jointly, to purchase at the Closing, and the Company agrees to sell and issue to each Investor at the Closing, that number of Common Shares set forth opposite such Investor's name on Schedule A hereto for the purchase price set forth opposite such Investor's name on Schedule A hereto. (c) Subject to the terms and conditions of this Agreement, each Investor agrees, severally and not jointly, to purchase at the Closing, and the Company agrees to sell and issue to each Investor at the Closing, a Warrant to purchase that number of shares of the Company's Common Stock equal to fifty percent (50%) of the number of Common Shares purchased by such Investor, for the purchase price set forth opposite such Investor's name on Schedule A hereto. The Company and each Investor agrees, severally and not jointly, that as of the date hereof the purchase price of the Warrants is equal to the fair market value of such warrants. 1 1.2 Closing. The purchase and sale of the Common Shares and the Warrants shall take place at the offices of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, 155 Constitution Drive, Menlo Park, California, at 10:00 A.M., on December 9, 1998, or at such other time and place as the Company and Investors acquiring in the aggregate more than half of the Common Shares and the Common Stock issuable or issued upon exercise of the Warrants mutually agree upon orally or in writing (which time and place are designated as the "Closing"). At the Closing the Company shall deliver to each Investor (a) a certificate representing the Common Shares that such Investor is purchasing and (b) a Warrant to purchase that number of shares of the Company's Common Stock as set forth in Section 11 (c) above, against payment of the purchase price therefor by check or wire transfer. 2. Representations and Warranties of the Company. The Company hereby represents and warrants to each Investor that: 2.1 Authorization. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the Registration Rights Agreement, in the form attached hereto as Exhibit B (the "Registration Rights Agreement"), the performance of all obligations of the Company hereunder and thereunder, and the authorization, issuance (or reservation for issuance), sale and delivery of the Common Shares and the Warrants being sold hereunder and the Warrant Shares Issuable upon conversion of the Warrants has been taken or will be taken prior to the Closing, and this Agreement and the Registration Rights Agreement constitute valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (iii) to the extent the indemnification provisions contained in the Registration Rights Agreement may be limited by applicable federal or state securities laws. 2.2 Valid Issuance of Common Shares and Warrants. The Common Shares and the Warrants that are being purchased by the Investors hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid, and nonassessable, and will be free of restrictions on transfer other than restrictions on transfer under this Agreement and the Registration Rights Agreement and under applicable state and federal securities laws. The Warrant Shares issuable upon conversion of the Warrants purchased under this Agreement have been duly and validly reserved for issuance and, upon issuance in accordance with the terms of the Company's Amended and Restated Articles of Incorporation, will be duly and validly issued, fully paid, and nonassessable and will be free of restrictions on transfer other than restrictions on transfer under this Agreement and the Registration Rights Agreement and under applicable state and federal securities laws. 2.3 Offering . Subject in part to the truth and accuracy of each Investor's representations set forth in Section 3 of this Agreement, the offer, sale and issuance of the Common Shares and the Warrants as contemplated by this Agreement are exempt from the registration requirements of any applicable state and federal securities laws, and neither the 2 Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption. 2.4 Additional Information. The Company has filed in a timely manner all documents that the Company was required to file under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), during the twelve (12) months preceding the date of this Warrant (the "SEC Filings"). The SEC Filings complied in all material respects with the requirements of the Exchange Act or the Securities Act of 1933, as amended (the "Act"), as the case may be, as of their respective filing or effective dates, and the information contained therein was true and correct in all material respects as of the date or effective date of such documents, and each of the SEC Filings, as of such date, did not contain an untrue statement of 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. 3. Representations and Warranties of the Investors. Each Investor hereby represents and warrants that: 3.1 Authorization. Such Investor has full power and authority to enter into this Agreement and the Registration Rights Agreement, and each such Agreement constitutes its valid and legally binding obligation, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (iii) to the extent the indemnification provisions contained in the Registration Rights Agreement may be limited by applicable federal or state securities laws. 3.2 Purchase Entirely for Own Account. This Agreement is made with such Investor in reliance upon such Investor's representation to the Company, which by such Investor's execution of this Agreement such Investor hereby confirms, that the Common Shares and the warrant to be received by such Investor and the warrant Shares issuable upon exercise of the warrant to be received by such Investor (collectively, the "Securities") will be acquired for investment for such Investor's own account, not as a nominee or agent. and not with a view to the resale or distribution of any part thereof. and that such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, such Investor further represents that such Investor does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Securities. 3.3 Disclosure of Information. Such Investor believes it has received all the information it considers necessary or appropriate for deciding whether to purchase the Common Shares and the Warrant. Such Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Common Shares and the Warrant and the business, properties, prospects and financial condition of the Company. 3.4 Investment Experience. Such Investor is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear 3 the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Common Shares and the Warrant. If other than an individual, Investor also represents it has not been organized for the purpose of acquiring the Common Shares and the warrant. 3.5 Accredited Investor. Such Investor is an "accredited investor" within the meaning of Securities and Exchange Commission ("SEC") Rule 501 of Regulation D, as presently in effect. 3.6 Restricted Securities. Such Investor understands that the Securities 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 without registration under the Act only in certain limited circumstances. In this connection, such Investor represents that it is familiar with SEC Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Act. 3.7 Further Limitations on Disposition. Without in any way limiting the representations set forth above, such Investor further agrees not to make any disposition of all or any portion of the Securities unless and until the transferee has agreed in writing for the benefit of the Company to be bound by this Section 3 and the Registration Rights Agreement provided and to the extent this Section 3 and such agreement are then applicable, and: (a) There is then in effect a Registration Statement under the Act, covering such proposed disposition and such disposition is made in accordance with such Registration Statement; or (b) (i) Such Investor shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and (ii) if reasonably requested by the Company, such Investor shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company that such disposition will not require registration of such shares under the Act. It is agreed that the Company will not require opinions of counsel for transactions made pursuant to SEC Rule 144 except in unusual circumstances. (c) Notwithstanding the provisions of Paragraphs (a) and (b) above, no such registration statement or opinion of counsel shall be necessary for a transfer by an Investor that is a partnership to a partner of such partnership or a retired partner of such partnership who retires after the date hereof, or to the estate of any such partner or retired partner or the transfer by gift, will or intestate succession of any partner to his or her spouse or to the siblings, lineal descendants or ancestors of such partner or his or her spouse, if the transferee agrees in waiting to be subject to the terms hereof to the same extent as if he or she were an original Investor hereunder. 3.8 Legends. It is understood that the certificates evidencing the Securities may bear one or all of the following legends: 4 (a) "These securities have not been registered under the Securities Act of 1933, as amended. They may not be sold, offered for sale, pledged or hypothecated in the absence of a registration statement in effect with respect to the securities under such Act or an opinion of counsel satisfactory to the Company that such registration is not required or unless sold pursuant to Rule 144 of such Act." (b) Any legend required by the laws of the State of California, including any legend required by the California Department of Corporations and Sections 417 and 418 of the California Corporations Code. (c) Any legend required by applicable blue sky law. 4. Conditions of Investors' Obligations at Closing. The obligations of each Investor under Section 1 of this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions, the waiver of which shall not be effective against any Investor who does not consent thereto: 4.1 Representation and Warranties. The representations and warranties of the Company contained in Section 2 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the date of such Closing. 4.2 Performance. The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing. 4.3 Qualifications. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be duly obtained and effective as of the Closing. 4.4 Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to Investors' special counsel, and they shall have received all such counterpart original and certified or other copies of such documents as they may reasonably request. 4.5 Registration Rights Agreement. The Company and each Investor shall have entered into the Registration Rights Agreement. 5. Conditions of the Company's Obligations at Closing. The obligations of the Company to each Investor under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions by that Investor: 5.1 Representations and Warranties. The representations and warranties of the Investors contained in Section 3 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the Closing. 5 5.2 Payment of Purchase Price. The Investor shall have delivered the purchase price specified in Section 1.1. 5.3 Qualifications. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be duly obtained and effective as of the Closing. 6. Miscellaneous. 6.1 Survival of Warranties. The warranties, representations and covenants of the Company and Investors contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of the Investors or the Company. 6.2 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any Securities). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 6.3 Governing Law. This Agreement shall be governed by and construed under the laws, of the State of California as applied to agreements among California residents entered into and to be performed entirely within California. 6.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 6.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 6.6 Notices. Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon personal delivery to the party to be notified, deposit with a nationally recognized overnight courier, confirmed facsimile or upon deposit with the United States Post Office, by registered or certified mail, postage prepaid and addressed to the party to be notified at the address or addresses indicated for such party on the signature page hereof, or at such other address as such party may designate by ten (10) days' advance written notice to the other parties. 6.7 Finder's Fee. Each party represents that it neither is nor will be obligated for any finders' fee or commission in connection with this transaction. Each Investor agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finders' fee (and the costs and expenses of defending against such liability or asserted liability) for which such Investor or any of its officers, partners. employees, or representatives is responsible. 6 The Company agrees to indemnify and hold harmless each Investor from any liability for any commission or compensation in the nature of a finders' fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible. 6.8 Expenses. Irrespective of whether the Closing is effected, each party shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the Warrants or the Registration Rights Agreement, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 6.9 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of (a) the Company and (b) the holders of two-thirds (2/3) of the Common Shares and the Common Stock issuable or issued upon exercise of the Warrants. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any securities purchased under this Agreement at the time outstanding (including securities into which such securities are convertible), each future holder of all such securities, and the Company. 6.10 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 6.11 Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT. 6.12 Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein or therein. 7 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: /s/ HENRY W. DONALDSON -------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: ------------------------------------------ By: ------------------------------------- Address: ------------------------------------------ ------------------------------------------ SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: -------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Integral Capital Partners IV, L.P. ------------------------------------------ By Integral Capital Management, IV, LLC its General Partner By: /s/ PAMELA HAGENAH ------------------------------------- Pamela Hagenah, a Manager Address: 2750 Sand Hill Road ------------------------------------------ Menlo Park, CA 94025 ------------------------------------------ SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: -------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Integral Capital Partners IV MS Side Fund, L.P. ------------------------------------------ By ICP MS Management IV, LLC its General Partner By: /s/ PAMELA HAGENAH ------------------------------------- Pamela Hagenah, a Manager Address: 2750 Sand Hill Road ------------------------------------------ Menlo Park, CA 94025 ------------------------------------------ SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: -------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Pequot Private Equity Fund, LP ------------------------------------------ By: /s/[signature illegible], C.O.O. ------------------------------------- Dawson-Samberg Capital Management, Inc. Investment Adviser Address: 354 Pequot Avenue ------------------------------------------ Southport, CT 06490 ------------------------------------------ SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: -------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Pequot Offshore Private Equity Fund ------------------------------------------ By: /s/[signature illegible], C.O.O. ------------------------------------- Dawson-Samberg Capital Management, Inc. Investment Adviser Address: 354 Pequot Avenue ------------------------------------------ Southport, CT 06490 ------------------------------------------ SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: -------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Technology Crossover Ventures, L.P. ------------------------------------------ By: /s/ ROBERT C. BENSKY ------------------------------------- Robert C. Bensky Chief Financial Officer Address: Technology Crossover Ventures ------------------------------------------ 56 Main Street, Suite 210 ------------------------------------------ Millburn, NJ 07041 ------------------------------------------ With a copy to: Technology Crossover Ventures ------------------------------------------ 575 High Street, Suite 400 ------------------------------------------ Palo Alto, CA 94301 ------------------------------------------ SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: -------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Technology Crossover Ventures, C.V. ------------------------------------------ By: /s/ ROBERT C. BENSKY ------------------------------------- Robert C. Bensky Chief Financial Officer Address: Technology Crossover Ventures ------------------------------------------ 56 Main Street, Suite 210 ------------------------------------------ Millburn, NJ 07041 ------------------------------------------ With a copy to: Technology Crossover Ventures ------------------------------------------ 575 High Street, Suite 400 ------------------------------------------ Palo Alto, CA 94301 ------------------------------------------ SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: -------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: TCV II, V.O.F. ------------------------------------------ By: /s/ ROBERT C. BENSKY ------------------------------------- Robert C. Bensky Chief Financial Officer Address: Technology Crossover Ventures ------------------------------------------ 56 Main Street, Suite 210 ------------------------------------------ Millburn, NJ 07041 ------------------------------------------ With a copy to: Technology Crossover Ventures ------------------------------------------ 575 High Street, Suite 400 ------------------------------------------ Palo Alto, CA 94301 ------------------------------------------ SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: -------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Technology Crossover Bentures II, L.P. ------------------------------------------ By: /s/ ROBERT C. BENSKY ------------------------------------- Robert C. Bensky Chief Financial Officer Address: Technology Crossover Ventures ------------------------------------------ 56 Main Street, Suite 210 ------------------------------------------ Millburn, NJ 07041 ------------------------------------------ With a copy to: Technology Crossover Ventures ------------------------------------------ 575 High Street, Suite 400 ------------------------------------------ Palo Alto, CA 94301 ------------------------------------------ SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: -------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: TCV II (Q), L.P. ------------------------------------------ By: /s/ ROBERT C. BENSKY ------------------------------------- Robert C. Bensky Chief Financial Officer Address: Technology Crossover Ventures ------------------------------------------ 56 Main Street, Suite 210 ------------------------------------------ Millburn, NJ 07041 ------------------------------------------ With a copy to: Technology Crossover Ventures ------------------------------------------ 575 High Street, Suite 400 ------------------------------------------ Palo Alto, CA 94301 ------------------------------------------ SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: -------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: TCV II Strategic Partners, L.P. ------------------------------------------ By: /s/ ROBERT C. BENSKY ------------------------------------- Robert C. Bensky Chief Financial Officer Address: Technology Crossover Ventures ------------------------------------------ 56 Main Street, Suite 210 ------------------------------------------ Millburn, NJ 07041 ------------------------------------------ With a copy to: Technology Crossover Ventures ------------------------------------------ 575 High Street, Suite 400 ------------------------------------------ Palo Alto, CA 94301 ------------------------------------------ SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: -------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Technology Crossover Bentures II, C.V. ------------------------------------------ By: /s/ ROBERT C. BENSKY ------------------------------------- Robert C. Bensky Chief Financial Officer Address: Technology Crossover Ventures ------------------------------------------ 56 Main Street, Suite 210 ------------------------------------------ Millburn, NJ 07041 ------------------------------------------ With a copy to: Technology Crossover Ventures ------------------------------------------ 575 High Street, Suite 400 ------------------------------------------ Palo Alto, CA 94301 ------------------------------------------ SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: -------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Lion Investments Limited ------------------------------------------ By: /s/[signature illegible] ------------------------------------- Address: Carlton House ------------------------------------------ 33 Robert Adam Street ------------------------------------------ London W1M 5AH, England ------------------------------------------ SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: -------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Westpool Investment Trust plc ------------------------------------------ By: /s/[signature illegible] ------------------------------------- Address: Carlton House ------------------------------------------ 33 Robert Adam Street ------------------------------------------ London W1M 5AH, England ------------------------------------------ SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT SCHEDULE A ---------- SCHEDULE OF INVESTORS ---------------------
Aggregate --------- Purchase Price of Number of Purchase Price Number of ----------------- --------- -------------- --------- Name and Address Common Shares Common Shares of Warrant Warrant Shares ---------------- ------------- ------------- ---------- -------------- Integral Capital Partners IV, L.P. $447,690.75 137,751 $447.69 68,876 2750 Sand Hill Road Menlo Park, CA 94025 Integral Capital Partners IV MS Side $2,310.75 711 $2.31 356 Fund, L.P. 2750 Sand Hill Road Menlo Park, CA 94025 Pequot Private Equity Fund, LP $1,198,281.50 368,702 $1,198.28 184,351 354 Pequot Avenue Southport, CT 06490 Pequot Offshore Private Equity $151,716.50 46,682 $151.72 23,341 Fund, Inc. 354 Pequot Avenue Southport, CT 06490 Technology Crossover Ventures, $231,653.50 71,278 $231.65 35,639 L.P. 56 Main Street, Suite 210 Millburn, NJ 07041 Technology Crossover Ventures, $18,349.50 5,646 $18.35 2,823 C.V. 56 Main Street, Suite 210 Millburn, NJ 07041 TCV II, V.O.F. $7,774.00 2,392 $7.77 1,196 56 Main Street, Suite 210 Millburn, NJ 07041 Technology Crossover Ventures II, $239,187.00 73,596 $239.19 36,798 L.P. 56 Main Street, Suite 210 Millburn, NJ 07041 TCV II (Q), L.P. $183,891.50 56,582 $183.89 28,291 56 Main Street, Suite 210 Millburn, NJ 07041 TCV Strategic Partners, L.P. $32,630.00 10,040 $32.63 5,020 56 Main Street, Suite 210 Millburn, NJ 07041
Technology Crossover Ventures II, $36,517.00 11,236 $36.52 5,618 C.V. 56 Main Street, Suite 210 Millburn, NJ 07041 Lion Investments Limited $134,998.50 41,538 $135.00 20,769 Carlton House 33 Robert Adam Street London W1M 5AH ENGLAND Westpool Investment Trust plc $315,003.00 96,924 $315.00 48,462 Carlton House 33 Robert Adam Street London W1M 5AH ENGLAND TOTAL $3,000,003.50 923,078 $3000.00 461,540
EXHIBIT A Form of Warrant EXHIBIT B Registration Rights Agreement EX-99.(C) 5 f80017d2ex99-c.txt EXHIBIT C Exhibit C COMMON STOCK PURCHASE AGREEMENT December 17, 1999 DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK PURCHASE AGREEMENT THIS COMMON STOCK PURCHASE AGREEMENT is made as of the 17th day of December, 1999, by and among Digital Generation Systems, Inc., a California corporation (the "Company"), and the investors, severally and not jointly, listed on Schedule A hereto, each of which is herein referred to as an "Investor." WHEREAS, the Company desires to sell, and the Investors desire to purchase, shares of the Company's Common Stock (the "Common Shares") with an aggregate purchase price of three million seven hundred fifty thousand four dollars and two cents ($3,750,004.02) and at a price per share equal to five dollars and seventeen and one-tenth cents ($5.171) (the "Purchase Price"). NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS: 1. Purchase and Sale of the Common Shares. 1.1 Sale and Issuance of the Common Shares. (a) On or prior to the Closing (as defined below), the Company shall have authorized the sale and issuance to the Investors of the Common Shares. (b) Subject to the terms and conditions of this Agreement, each Investor agrees, severally and not jointly, to purchase at the Closing, and the Company agrees to sell and issue to each Investor at the Closing, that number of Common Shares set forth opposite such Investor's name on Schedule A hereto for the purchase price set forth opposite such Investor's name on Schedule A hereto. 1.2 Closing . The purchase and sale of the Common Shares shall take place at the offices of the Company at 10:00 A.M., on December 17,1999, or at such other time and place as the Company and Investors acquiring in the aggregate more than half of the Common Shares mutually agree upon orally or in writing (which time and place are designated as the "Closing"). At the Closing (or as soon thereafter as is practicable) the Company shall deliver to each Investor a certificate representing the Common Shares that such Investor is purchasing, against payment of the purchase price therefor by check or wire transfer. 2. Representations and Warranties of the Company. The Company hereby represents and warrants to each Investor that: 2.1 Authorization. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the Registration Rights Agreement, in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), the performance of all obligations of the Company hereunder and thereunder, and the authorization, issuance, sale and delivery of the Common Shares being sold hereunder has been taken or will be taken prior to the Closing, and this Agreement and the Registration Rights Agreement constitute valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (iii) to the extent the indemnification provisions contained in the Registration Rights Agreement may be limited by applicable federal or state securities laws. 2.2 Valid Issuance of Common Shares. The Common Shares that are being purchased by the Investors hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid, and nonassessable, and will be free of restrictions on transfer other than restrictions on transfer under this Agreement and the Registration Rights Agreement and under applicable state and federal securities laws. 2.3 Offering. Subject in part to the truth and accuracy of each Investor's representations set forth in Section 3 of this Agreement, the offer, sale and issuance of the Common Shares as contemplated by this Agreement are exempt from the registration requirements of any applicable state and federal securities laws, and neither the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption. 2.4 Additional Information. The Company has filed in a timely manner all documents that the Company was required to file under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), during the twelve (12) months preceding the date of this Agreement (the "SEC Filings"). The SEC Filings complied in all material respects with the requirements of the Exchange Act or the Securities Act of 1933, as amended (the "Act"), as the case may be, as of their respective filing or effective dates, and the information contained therein was true and correct in all material respects as of the date or effective date of such documents, and each of the SEC Filings, as of such date, did not contain an untrue statement of 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. 3. Representations and Warranties of the Investors. Each Investor hereby represents and warrants that: 3.1 Authorization. Such Investor has full power and authority to enter into this Agreement and the Registration Rights Agreement, and each such Agreement constitutes its valid and legally binding obligation, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (iii) to the extent the indemnification provisions contained in the Registration Rights Agreement may be limited by applicable federal or state securities laws. 3.2 Purchase Entirely for Own Account. This Agreement is made with such Investor in reliance upon such Investor's representation to the Company, which by such Investor's 2 execution of this Agreement such Investor hereby confirms, that the Common Shares to be received by such Investor will be acquired for investment for such Investor's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, such Investor further represents that such Investor does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to the Common Shares. 3.3 Disclosure of Information. Such Investor believes it has received all the information it considers necessary or appropriate for deciding whether to purchase the Common Shares. Such Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Common Shares and the business, properties, prospects and financial condition of the Company. 3.4 Investment Experience. Such Investor is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Common Shares. If other than an individual, such Investor also represents it has not been organized for the purpose of acquiring the Common Shares. 3.5 Accredited Investor. Such Investor is an "accredited investor" within the meaning of Securities and Exchange Commission ("SEC") Rule 501 of Regulation D, as presently in effect. 3.6 Restricted Securities. Such Investor understands that the Common 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 without registration under the Act only in certain limited circumstances. In this connection, such Investor represents that it is familiar with SEC Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Act. 3.7 Further Limitations on Disposition. Without in any way limiting the representations set forth above, such Investor further agrees not to make any disposition of all or any portion of the Common Shares unless and until the transferee has agreed in writing for the benefit of the Company to be bound by this Section 3 and the Registration Rights Agreement provided and to the extent this Section 3 and such agreement are then applicable, and: (a) There is then in effect a registration statement under the Act, covering such proposed disposition and such disposition is made in accordance with such Registration Statement; or 3 (b) (i) Such Investor shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and (ii) if reasonably requested by the Company, such Investor shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company that such disposition will not require registration of such shares under the Act. It is agreed that the Company will not require opinions of counsel for transactions made pursuant to SEC Rule 144 except in unusual circumstances. (c) Notwithstanding the provisions of Paragraphs (a) and (b) above, no such registration statement or opinion of counsel shall be necessary for a transfer by an Investor that is a partnership to a partner of such partnership or a retired partner of such partnership who retires after the date hereof, or to the estate of any such partner or retired partner or the transfer by gift, will or intestate succession of any partner to his or her spouse or to the siblings, lineal descendants or ancestors of such partner or his or her spouse, if the transferee agrees in writing to be subject to the terms hereof to the same extent as if he or she were an original Investor hereunder. 3.8 Legends. It is understood that the certificates evidencing the Common Shares may bear one or all of the following legends: (a) "These securities have not been registered under the Securities Act of 1933, as amended. They may not be sold, offered for sale, pledged or hypothecated in the absence of a registration statement in effect with respect to the securities under such Act or an opinion of counsel satisfactory to the Company that such registration is not required or unless sold pursuant to Rule 144 of such Act." (b) Any legend required by the laws of the State of California, including any legend required by the California Department of Corporations and Sections 417 and 418 of the California Corporations Code. (c) Any legend required by applicable blue sky law. 4. Conditions of Investors' Obligations at Closing. The obligations of each Investor under Section 1 of this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions, the waiver of which shall not be effective against any Investor who does not consent thereto: 4.1 Representations and Warranties. The representations and warranties of the Company contained in Section 2 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the date of such Closing. 4.2 Performance. The company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing. 4 4.3 Qualifications. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Common Shares pursuant to this Agreement shall be duly obtained and effective as of the Closing. 4.4 Proceeding's and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to Investors' special counsel, and they shall have received all such counterpart original and certified or other copies of such documents as they may reasonably request. 4.5 Registration Rights Agreement. The Company and each Investor shall have entered into the Registration Rights Agreement. 4.6 Minimum Funding. The Investors shall collectively deliver to the Company the aggregate Purchase Price. 4.7 Lock-Up. The Directors of the Company who are not parties hereto shall have executed and delivered to the Company letters to the effect that they shall be bound by restrictions substantially similar to the restrictions set forth in Section 6.1 hereof. 5. Conditions of the Company's Obligations at Closing. The obligations of the Company to each Investor under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions by that Investor: 5.1 Representations and Warranties. The representations and warranties of the Investors contained in Section 3 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the Closing. 5.2 Payment of Purchase Price. The Investor shall have delivered the purchase price specified in Section 1. 1. 5.3 Qualifications. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Common Shares pursuant to this Agreement shall be duly obtained and effective as of the Closing. 6. Miscellaneous. 6.1 Lock-Up. Each Investor agrees, severally and not jointly, that without the prior written consent of the Board of Directors, the Investor will not, directly or indirectly, sell, offer to sell, contract to sell, solicit an offer to buy, grant any option for the purchase or sale of, assign, pledge, distribute or otherwise transfer, dispose of or encumber any shares of the Company's 5 Common Stock, or any options, rights, warrants or other securities convertible into or exercisable or exchangeable for the Company's Common Stock or evidencing any right to purchase or subscribe for shares of the Company's Common Stock, whether or not beneficially owned by the undersigned, for a period of 180 days after the Closing. Each Investor agrees to cause its Affiliates (as defined under the Securities Act of 1933) to comply with the foregoing restrictions. To the extent that any Investor or other person referred to above is subsequently relieved of the foregoing restrictions, all Investors will be relieved from such restriction on a pro rata basis. In furtherance of the foregoing, the Company and ChaseMellon Shareholder Services, L.L.C., as Transfer Agent for the Company's Common Stock, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of the provisions hereof. Each Investor hereby consents to the placing of a stop-transfer order with the Transfer Agent for such 180-day period with respect to any of the shares of the Company's Common Stock registered in the name of such Investor or his Affiliates or beneficially owned by such Investor or his Affiliates. 6.2 Survival of Warranties. The warranties, representations and covenants of the Company and Investors contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of the Investors or the Company. 6.3 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any Common Shares). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 6.4 Governing Law. This Agreement shall be governed by and construed under the laws of the State of California as applied to agreements among California residents entered into and to be performed entirely within California. 6.5 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 6.6 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 6.7 Notices. Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon personal delivery to the party to be notified, deposit with a nationally recognized overnight courier, confirmed facsimile or upon deposit with the United States Post Office, by registered or certified mail, postage prepaid and addressed to the party to be notified at the address or addresses indicated for such party 6 on the signature page hereof, or at such other address as such party may designate by ten (10) days' advance written notice to the other parties. 6.8 Finder's Fee. Each party represents that it neither is nor will be obligated for any finders' fee or commission in connection with this transaction. Each Investor agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finders' fee (and the costs and expenses of defending against such liability or asserted liability) for which such Investor or any of its officers, partners, employees, or representatives is responsible. The Company agrees to indemnify and hold harmless each Investor from any liability for any commission or compensation in the nature of a finders' fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible. 6.9 Expenses. Irrespective of whether the Closing is effected, each party shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement or the Registration Rights Agreement, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 6.10 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of (a) the Company and (b) the holders of two-thirds (2/3) of the Common Shares. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any securities purchased under this Agreement at the time outstanding (including securities into which such securities are convertible), each future holder of all such securities, and the Company. 6.11 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 6.12 Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT. 7 6.13 Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein or therein. 8 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: /s/ Matthew E. Devine ----------------------------------- Matthew E. Devine Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT /s/ Scott K. Ginsburg ----------------------------------------- Scott K. Ginsburg Address: 5221 North O'Connor Boulevard Suite 950 Irving, Texas 75039 SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT INVESTOR PEQUOT PRIVATE EQUITY FUND, L.P. By: Pequot Capital Management, Inc. as Investment Manager /s/ David J. Malat By:_______________________________________ David J. Malat, Chief Financial Officer Address 500 Nyala Farm Road Westport, Connecticut 06880 PEQUOT OFFSHORE PRIVATE EQUITY FUND, INC. By: Pequot Capital Management, Inc., as Investment Advisor /s/ David J. Malat By:_______________________________________ David J. Malat, Chief Financial Officer Address: 500 Nyala Farm Road Westport, Connecticut 06880 SIGNED PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK PURCHASE AGREEMENT TCV II, V.O.F. By: Technology Crossover Management II, L.L.C., Its: Investment General Partner /s/ Robert C. Bensky By: ___________________________________ Robert C. Bensky Chief Financial Officer Address: 56 Main Street, Suite 210 Copy: Technology Crossover Ventures Millburn, New Jersey 07041 575 High Street, Suite 400 Attention: Robert C. Bensky Palo Alto, California 94301 Fax: (973) 467-5323 Attention: Michael G. Linnert Fax: (650) 614-8222 TECHNOLOGY CROSSOVER VENTURES II, L.P. By: Technology Crossover Management II, L.L.C., Its: General Partner /s/ Robert C. Bensky By: ______________________________________ Robert C. Bensky Chief Financial Officer Address: 56 Main Street, Suite 210 Copy: Technology Crossover Ventures Millburn, New Jersey 07041 575 High Street, Suite 400 Attention: Robert C. Bensky Palo Alto, California 94301 Fax: (973) 467-5323 Attention: Michael G. Linnert Fax: (650) 614-8222
SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK PURCHASE AGREEMENT TCV II (Q), L.P. By: Technology Crossover Management II, L.L.C., General Partner /s/ Robert C. Bensky By: ___________________________________ Robert C. Bensky Chief Financial Officer Address: 56 Main Street, Suite 210 Copy: Technology Crossover Ventures Millburn, New Jersey 07041 575 High Street, Suite 400 Attention: Robert C. Bensky Palo Alto, California 94301 Fax: (973) 467-5323 Attention: Michael G. Linnert Fax: (650) 614-8222 TCV II STRATEGIC PARTNERS, L.P. By: Technology Crossover Management II, L.L.C. Its: General Partner /s/ Robert C. Bensky By: ___________________________________ Robert C. Bensky Chief Financial Officer Address: 56 Main Street, Suite 210 Copy: Technology Crossover Ventures Millburn, New Jersey 07041 575 High Street, Suite 400 Attention: Robert C. Bensky Palo Alto, California 94301 Fax: (973) 467-5323 Attention: Michael G. Linnert Fax: (650) 614-8222
SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK PURCHASE AGREEMENT TECHNOLOGY CROSSOVER VENTURES II, C.V. By: Technology Crossover Management II, L.L.C., Its: Investment General Partner /s/ Robert C. Bensky By: ----------------------------------------- Robert C. Bensky Chief Financial Officer Address: 56 Main Street, Suite 210 Copy: Technology Crossover Ventures Millburn, New Jersey 07041 575 High Street, Suite 400 Attention: Robert C. Bensky Palo Alto, California 94301 Fax: (973) 467-5323 Attention: Michael G. Linnert Fax: (650) 614-8222
SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK PURCHASE AGREEMENT /s/ Matthew E. Devine _________________________________ Matthew E. Devine Address 5221 North O'Connor Boulevard Suite 950 Irving, Texas 75039 SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT
SCHEDULE A SCHEDULE OF INVESTORS
AGGREGATE PURCHASE PRICE OF NUMBER OF NAME AND ADDRESS COMMON SHARES COMMON SHARES - ---------------- ------------- ------------- Pequot Private Equity Fund, L.P. $1,109,525.96 214,567 50 Nyala Farm Road Westport, Connecticut 06880 Pequot Offshore Private Equity $ 140,475.39 27,166 Fund, Inc. 500 Nyala Farm Road Westport, Connecticut 06880 TCV II, V.O.F. $ 11,655.43 2,254 56 Main Street, Suite 210 Millburn, NJ 07041 Technology Crossover Ventures II, $ 358,779.49 69,383 L.P. 56 Main Street, Suite 210 Millburn, NJ 07041 TCV II, (A), L.P. $ 275,836.65 53,343 56 Main Street, Suite 210 Millburn, NJ 07041 TCV II Strategic Partners, L.P. $ 48,953.86 9,467 56 Main Street, Suite 210 Millburn, NJ 07041 Technology Crossover Ventures II, $ 54,776.40 10,593 C.V. 56 Main Street, Suite 210 Millburn, NJ 07041 Scott K. Ginsburg $1,250,001.34 241,733 5221 North O'Connor Boulevard Suite 950 Irving, Texas 75039 Matthew E. Devine $ 499,999.50 96,693 5221 North O'Connor Boulevard Suite 950 Irving, Texas 75039 TOTAL $ 3,750,004.02 725,199 ============== =======
EXHIBIT A --------- Registration Rights Agreement. COMMON STOCK AND WARRANT PURCHASE AGREEMENT December 9, 1998 TABLE OF CONTENTS
Page ---- 1. Purchase and Sale of the Common Shares and the Warrants ................ l 1.1 Sale and Issuance of Common Shares and the Warrants ............. 1 1.2 Closing ......................................................... 2 2. Representations and Warranties of the Company .......................... 2 2.1 Authorization ................................................... 2 2.2 Valid Issuance of Common Shares and Warrants .................... 2 2.3 Offering ........................................................ 2 2.4 Additional Information........................................... 2 3. Representations and Warranties of the Investors ........................ 3 3.l Authorization ................................................... 3 3.2 Purchase Entirely for Own Account ............................... 3 3.3 Disclosure of Information ....................................... 3 3.4 Investment Experience ........................................... 3 3.5 Accredited Investor ............................................. 4 3.6 Restricted Securities ........................................... 4 3.7 Further Limitations on Disposition .............................. 4 3.8 Legends ......................................................... 4 4. Conditions of Investors' Obligations at Closing ........................ 5 4.1 Representations and Warranties .................................. 5 4.2 Performance ..................................................... 5 4.3 Qualifications .................................................. 5 4.4 Proceedings and Documents ....................................... 5 4.5 Registration Rights Agreement ................................... 5 5. Conditions of the Company's Obligations at Closing ..................... 5 5.1 Representations and Warranties .................................. 5 5.2 Payment of Purchase Price ....................................... 6 5.3 Qualifications .................................................. 6 6. Miscellaneous .......................................................... 6 6.1 Survival of Warranties .......................................... 6 6.2 Successors and Assigns .......................................... 6 6.3 Governing Law ................................................... 6 6.4 Counterparts .................................................... 6 6.5 Titles and Subtitles ............................................ 6 6.6 Notices ......................................................... 6 6.7 Finder's Fee .................................................... 6 6.8 Expenses ........................................................ 7 6.9 Amendments and Waivers .......................................... 7 6.10 Severability .................................................... 7
i DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT is made as of the 9th day of December, 1998, by and among Digital Generation Systems, Inc., a California corporation (the "Company"), and the investors, severally and not jointly, listed on Schedule A hereto, each of which is herein referred to as an "Investor." WHEREAS, the Company desires to sell, and the Investors desire to purchase, shares of the Company's Common Stock (the "Common Shares") with an aggregate purchase price of three million three dollars and fifty cents ($3,000,003.50) and at a price per share equal to three dollars and twenty-five cents ($3.25) (the "Purchase Price"); and WHEREAS, the Company desires to sell, and the Investors desire to purchase for an aggregate purchase price of three thousand dollars ($3,000), warrants, in the form attached hereto as Exhibit A (the "Warrants"), to purchase shares of the Company's Common Stock in an amount equal to fifty percent (50%) of the number of Common Shares purchased by each Investor pursuant to this Agreement (the "Warrant Shares") and with an exercise price equal to the Purchase Price of the Common Shares. NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS: 1. Purchase and Sale of the Common Shares and the Warrants. 1.1 Sale and Issuance of the Common Shares and the Warrants. (a) On or prior to the Closing (as defined below), the Company shall have authorized (i) the sale and issuance to the Investors of the Common Shares, (ii) the sale and issuance to the Investors of the Warrants and (iii) the issuance of the Warrant Shares to be issued upon exercise of the Warrants. (b) Subject to the terms and conditions of this Agreement, each Investor agrees, severally and not jointly, to purchase at the Closing, and the Company agrees to sell and issue to each Investor at the Closing, that number of Common Shares set forth opposite such Investor's name on Schedule A hereto for the purchase price set forth opposite such Investor's name on Schedule A hereto. (c) Subject to the terms and conditions of this Agreement, each Investor agrees, severally and not jointly, to purchase at the Closing, and the Company agrees to sell and issue to each Investor at the Closing, a Warrant to purchase that number of shares of the Company's Common Stock equal to fifty percent (50%) of the number of Common Shares purchased by such Investor, for the purchase price set forth opposite such Investor's name on Schedule A hereto. The Company and each Investor agrees, severally and not jointly, that as of the date hereof the purchase price of the Warrants is equal to the fair market value of such warrants. 1 1.2 Closing. The purchase and sale of the Common Shares and the Warrants shall take place at the offices of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP,155 Constitution Drive, Menlo Park, California, at 10:00 A.M., on December 9, 1998, or at such other time and place as the Company and Investors acquiring in the aggregate more than half of the Common Shares and the Common Stock issuable or issued upon exercise of the Warrants mutually agree upon orally or in writing (which time and place are designated as the "Closing"). At the Closing the Company shall deliver to each Investor (a) a certificate representing the Common Shares that such Investor is purchasing and (b) a Warrant to purchase that number of shares of the Company's Common Stock as set forth in Section 1.1(c) above, against payment of the purchase price therefor by check or wire transfer. 2. Representations and Warranties of the Company. The Company hereby represents and warrants to each Investor that: 2.1 Authorization. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the Registration Rights Agreement, in the form attached hereto as Exhibit B (the "Registration Rights Agreement"), the performance of all obligations of the Company hereunder and thereunder, and the authorization, issuance (or reservation for issuance), sale and delivery of the Common Shares and the Warrants being sold hereunder and the Warrant Shares issuable upon conversion of the Warrants has been taken or will be taken prior to the Closing, and this Agreement and the Registration Rights Agreement constitute valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (iii) to the extent the indemnification provisions contained in the Registration Rights Agreement may be limited by applicable federal or state securities laws. 2.2 Valid Issuance of Common Shares and Warrants. The Common Shares and the Warrants that are being purchased by the Investors hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid, and nonassessable, and will be free of restrictions on transfer other than restrictions on transfer under this Agreement and the Registration Rights Agreement and under applicable state and federal securities laws. The Warrant Shares issuable upon conversion of the Warrants purchased under this Agreement have been duly and validly reserved for issuance and, upon issuance in accordance with the terms of the Company's Amended and Restated Articles of Incorporation, will be duly and validly issued, fully paid, and nonassessable and will be free of restrictions on transfer other than restrictions on transfer under this Agreement and the Registration Rights Agreement and under applicable state and federal securities laws. 2.3 Offering. Subject in part to the truth and accuracy of each Investor's representations set forth in Section 3 of this Agreement, the offer, sale and issuance of the Common Shares and the Warrants as contemplated by this Agreement are exempt from the registration requirements of any applicable state and federal securities laws, and neither the 2 Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption. 2.4 Additional Information. The Company has filed in a timely manner all documents that the Company was required to file under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), during the twelve (12) months preceding the date of this Warrant (the "SEC Filings"). The SEC Filings complied in all material respects with the requirements of the Exchange Act or the Securities Act of 1933, as amended (the "Act"), as the case may be, as of their respective filing or effective dates, and the information contained therein was true and correct in all material respects as of the date or effective date of such documents, and each of the SEC Filings, as of such date, did not contain an untrue statement of 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. 3. Representations and Warranties of the Investors. Each Investor hereby represents and warrants that: 3.1 Authorization. Such Investor has full power and authority to enter into this Agreement and the Registration Rights Agreement, and each such Agreement constitutes its valid and legally binding obligation, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (iii) to the extent the indemnification provisions contained in the Registration Rights Agreement may be limited by applicable federal or state securities laws. 3.2 Purchase Entirely for Own Account. This Agreement is made with such Investor in reliance upon such Investor's representation to the Company, which by such Investor's execution of this Agreement such Investor hereby confirms, that the Common Shares and the Warrant to be received by such Investor and the Warrant Shares issuable upon exercise of the Warrant to be received by such Investor (collectively, the "Securities") will be acquired for investment for such Investor's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, such Investor further represents that such Investor does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Securities. 3.3 Disclosure of Information. Such Investor believes it has received all the information it considers necessary or appropriate for deciding whether to purchase the Common Shares and the Warrant. Such Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Common Shares and the Warrant and the business, properties, prospects and financial condition of the Company. 3.4 Investment Experience. Such Investor is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear 3 the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Common Shares and the Warrant. If other than an individual, Investor also represents it has not been organized for the purpose of acquiring the Common Shares and the Warrant. 3.5 Accredited Investor. Such Investor is an "accredited investor" within the meaning of Securities and Exchange Commission ("SEC") Rule 501 of Regulation D, as presently in effect. 3.6 Restricted Securities. Such Investor understands that the Securities 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 without registration under the Act only in certain limited circumstances. In this connection, such Investor represents that it is familiar with SEC Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Act. 3.7 Further Limitations on Disposition. Without in any way limiting the representations set forth above, such Investor further agrees not to make any disposition of all or any portion of the Securities unless and until the transferee has agreed in writing for the benefit of the Company to be bound by this Section 3 and the Registration Rights Agreement provided and to the extent this Section 3 and such agreement are then applicable, and: (a) There is then in effect a Registration Statement under the Act, covering such proposed disposition and such disposition is made in accordance with such Registration Statement; or (b) (i) Such Investor shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and (ii) if reasonably requested by the Company, such Investor shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company that such disposition will not require registration of such shares under the Act. It is agreed that the Company will not require opinions of counsel for transactions made pursuant to SEC Rule 144 except in unusual circumstances. (c) Notwithstanding the provisions of Paragraphs (a) and (b) above, no such registration statement or opinion of counsel shall be necessary for a transfer by an Investor that is a partnership to a partner of such partnership or a retired partner of such partnership who retires after the date hereof, or to the estate of any such partner or retired partner or the transfer by gift, will or intestate succession of any partner to his or her spouse or to the siblings, lineal descendants or ancestors of such partner or his or her spouse, if the transferee agrees in writing to be subject to the terms hereof to the same extent as if he or she were an original Investor hereunder. 3.8 Legends. It is understood that the certificates evidencing the Securities may bear one or all of the following legends: 4 (a) "These securities have not been registered under the Securities Act of 1933, as amended. They may not be sold, offered for sale, pledged or hypothecated in the absence of a registration statement in effect with respect to the securities under such Act or an opinion of counsel satisfactory to the Company that such registration is not required or unless sold pursuant to Rule 144 of such Act." (b) Any legend required by the laws of the State of California, including any legend required by the California Department of Corporations and Sections 417 and 418 of the California Corporations Code. (c) Any legend required by applicable blue sky law. 4. Conditions of Investors' Obligations at Closing. The obligations of each Investor under Section 1 of this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions, the waiver of which shall not be effective against any Investor who does not consent thereto: 4.1 Representations and Warranties. The representations and warranties of the Company contained in Section 2 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the date of such Closing. 4.2 Performance. The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing. 4.3 Qualifications. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be duly obtained and effective as of the Closing. 4.4 Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to Investors' special counsel, and they shall have received all such counterpart original and certified or other copies of such documents as they may reasonably request. 4.5 Registration Rights Agreement. The Company and each Investor shall have entered into the Registration Rights Agreement. 5. Conditions of the Company's Obligations at Closing. The obligations of the Company to each Investor under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions by that Investor: 5.1 Representations and Warranties. The representations and warranties of the Investors contained in Section 3 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the Closing. 5 5.2 Payment of Purchase Price. The Investor shall have delivered the purchase price specified in Section 1.1. 5.3 Qualifications. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be duly obtained and effective as of the Closing. 6. Miscellaneous. 6.1 Survival of Warranties. The warranties, representations and covenants of the Company and Investors contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of the Investors or the Company. 6.2 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any Securities). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 6.3 Governing Law. This Agreement shall be governed by and construed under the laws of the State of California as applied to agreements among California residents entered into and to be performed entirely within California. 6.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 6.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 6.6 Notices. Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon personal delivery to the party to be notified, deposit with a nationally recognized overnight courier, confirmed facsimile or upon deposit with the United States Post Office, by registered or certified mail, postage prepaid and addressed to the party to be notified at the address or addresses indicated for such party on the signature page hereof, or at such other address as such party may designate by ten (10) days' advance written notice to the other parties. 6.7 Finder's Fee. Each party represents that it neither is nor will be obligated for any finders' fee or commission in connection with this transaction. Each Investor agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finders' fee (and the costs and expenses of defending against such liability or asserted liability) for which such Investor or any of its officers, partners, employees, or representatives is responsible. 6 The Company agrees to indemnify and hold harmless each Investor from any liability for any commission or compensation in the nature of a finders' fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible. 6.8 Expenses. Irrespective of whether the Closing is effected, each party shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the Warrants or the Registration Rights Agreement, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 6.9 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of (a) the Company and (b) the holders of two-thirds (2/3) of the Common Shares and the Common Stock issuable or issued upon exercise of the Warrants. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any securities purchased under this Agreement at the time outstanding (including securities into which such securities are convertible), each future holder of all such securities, and the Company. 6.10 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 6.11 Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT. 6.12 Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein or therein. 7 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: /s/ HENRY W. DONALDSON --------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: ------------------------------------------ By: --------------------------------------- Address: ------------------------------------------ ------------------------------------------ SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: --------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Integral Capital Partners IV, L.P. ------------------------------------------ By Integral Capital Management IV, LLC its General Partner By: /s/ Pamela Hagenah --------------------------------------- Pamela Hagenah, a Manager Address: 2750 Sand Hill Road Menlo Park, CA 94025 SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: ---------------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Integral Capital Partners IV MS Side Fund, L.P. ------------------------------------------------- By ICP MS Management IV, LLC its General Partner By: /s/ Pamela Hagenah ---------------------------------------------- Pamela Hagenah, a Manager Address: 2750 Sand Hill Road Menlo Park, CA 94025 SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: ---------------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Pequot Private Equity Fund, LP ------------------------------------------------- By: [SIGNATURE ILLEGIBLE] ---------------------------------------------- Address: 354 Pequot Avenue Southport, CT 06490 SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: ---------------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Pequot Offshore Private Equity Fund ------------------------------------------------- By: [SIGNATURE ILLEGIBLE] ---------------------------------------------- Address: 354 Pequot Avenue Southport, CT 06490 SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: ---------------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Technology Crossover Ventures, L.P. ------------------------------------------------- By: /s/ ROBERT C. BENSKY ---------------------------------------------- Robert C. Bensky Chief Financial Officer Address: Technology Crossover Ventures 56 Main Street, Suite 210 Millburn, NJ 07041 With a copy to: Technology Crossover Ventures 575 High Street, Suite 400 Palo Alto, CA 94301 SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: ---------------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Technology Crossover Ventures, C.V. ------------------------------------------------- By: /s/ ROBERT C. BENSKY ---------------------------------------------- Robert C. Bensky Chief Financial Officer Address: Technology Crossover Ventures 56 Main Street, Suite 210 Millburn, NJ 07041 With a copy to: Technology Crossover Ventures 575 High Street, Suite 400 Palo Alto, CA 94301 SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: ---------------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: TCV II, V.O.F. ------------------------------------------------- By: /s/ ROBERT C. BENSKY ---------------------------------------------- Robert C. Bensky Chief Financial Officer Address: Technology Crossover Ventures 56 Main Street, Suite 210 Millburn, NJ 07041 With a copy to: Technology Crossover Ventures 575 High Street, Suite 400 Palo Alto, CA 94301 SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: ---------------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Technology Crossover Ventures II, L.P. ------------------------------------------------- By: /s/ ROBERT C. BENSKY ---------------------------------------------- Robert C. Bensky Chief Financial Officer Address: Technology Crossover Ventures 56 Main Street, Suite 210 Millburn, NJ 07041 With a copy to: Technology Crossover Ventures 575 High Street, Suite 400 Palo Alto, CA 94301 SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: ---------------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: TCV II (Q), L.P. ------------------------------------------------- By: /s/ ROBERT C. BENSKY ---------------------------------------------- Robert C. Bensky Chief Financial Officer Address: Technology Crossover Ventures 56 Main Street, Suite 210 Millburn, NJ 07041 With a copy to: Technology Crossover Ventures 575 High Street, Suite 400 Palo Alto, CA 94301 SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: ---------------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: TCV II Strategic Partners, L.P. ------------------------------------------------- By: /s/ ROBERT C. BENSKY ---------------------------------------------- Robert C. Bensky Chief Financial Officer Address: Technology Crossover Ventures 56 Main Street, Suite 210 Millburn, NJ 07041 With a copy to: Technology Crossover Ventures 575 High Street, Suite 400 Palo Alto, CA 94301 SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: ---------------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Technology Crossover Ventures II, C.V. ------------------------------------------------- By: /s/ ROBERT C. BENSKY ---------------------------------------------- Robert C. Bensky Chief Financial Officer Address: Technology Crossover Ventures 56 Main Street, Suite 210 Millburn, NJ 07041 With a copy to: Technology Crossover Ventures 575 High Street, Suite 400 Palo Alto, CA 94301 SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: ---------------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Lion Investments Limited ------------------------------------------------- By: [SIGNATURE ILLEGIBLE] ---------------------------------------------- Address: Carlton House 33 Robert Adam Street London W1M 5AH England SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DIGITAL GENERATION SYSTEMS, INC. By: ---------------------------------------------- Henry W. Donaldson, President and Chief Executive Officer Address: 875 Battery Street San Francisco, CA 94111 INVESTOR: Westpool Investment Trust plc ------------------------------------------------- By: [SIGNATURE ILLEGIBLE] ---------------------------------------------- Address: Carlton House 33 Robert Adam Street London W1M 5AH England SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC. COMMON STOCK AND WARRANT PURCHASE AGREEMENT SCHEDULE A SCHEDULE OF INVESTORS
AGGREGATE PURCHASE PRICE OF NUMBER OF PURCHASE PRICE NUMBER OF NAME AND ADDRESS COMMON SHARES COMMON SHARES OF WARRANT WARRANT SHARES - ---------------- ----------------- ------------- -------------- -------------- Integral Capital Partners IV, L.P. $ 447,690.75 137,751 $ 447.69 68,876 2750 Sand Hill Road Menlo Park, CA 94025 Integral Capital Partners IV MS Side $ 2,310.75 711 $ 2.31 356 Fund, L.P. 2750 Sand Hill Road Menlo Park, CA 94025 Pequot Private Equity Fund, LP $1,198,281.50 368,702 $1,198.28 184,351 354 Pequot Avenue Southport, CT 06490 Pequot Offshore Private Equity $ 151,716.50 46,682 $ 151.72 23,341 Fund, Inc. 354 Pequot Avenue Southport, CT 06490 Technology Crossover Ventures, $ 231,653.50 71,278 $ 231.65 35,639 L.P 56 Main Street, Suite 210 Millburn, NJ 07041 Technology Crossover Ventures, $ 18,349.50 5,646 $ 18.35 2,823 C.V. 56 Main Street, Suite 210 Millburn, NJ 07041 TCV 11, V.O.F $ 7,774.00 2,392 57.77 1,196 56 Main Street, Suite 210 Millburn, NJ 07041 Technology Crossover Ventures II, $ 239,187.00 73,596 $ 239.19 36,798 L.P 56 Main Street, Suite 210 Millburn, NJ 07041 TCV 11 (Q), L.P. $ 183,891.50 56,582 $ 183.89 28,291 56 Main Street, Suite 210 Millburn, NJ 07041 TCV II Strategic Partners, L.P. $ 32,630.00 10,040 $ 32.63 5,020 56 Main Street, Suite 210 Millburn, NJ 07041
AGGREGATE PURCHASE PRICE OF NUMBER OF PURCHASE PRICE NUMBER OF NAME AND ADDRESS COMMON SHARES COMMON SHARES OF WARRANT WARRANT SHARES - ---------------- ----------------- ------------- -------------- -------------- Technology Crossover Ventures, II, $ 36,517.00 11,236 $ 36.52 5,618 C.V. 56 Main Street, Suite 210 Millburn, NJ 07041 Lion Investments Limited $ 134,998.50 41,538 $ 135.00 20,769 Carlton House 33 Robert Adam Street London WIM 5AH ENGLAND Westpool Investment Trust plc $ 315,003.00 96,924 $ 315.00 48,462 Carlton House 33 Robert Adam Street London W1M 5AH ENGLAND TOTAL $3,000,003.50 923,078 $ 3000.00 461,540
EXHIBIT A Form of Warrant EXHIBIT B Registration Rights Agreement EX-99.(E) 6 f80017d2ex99-e.txt EXHIBIT E EXHIBIT E THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT. WARRANT TO PURCHASE COMMON STOCK OF DIGITAL GENERATION SYSTEMS, INC. VOID AFTER DECEMBER 9, 2001 This Warrant is issued to Technology Crossover Ventures, L.P., or its registered assigns ("Holder") by Digital Generation Systems, Inc., a California corporation (the "Company"), on December 9, 1998 (the "Warrant Issue Date"). This Warrant is issued pursuant to the terms of that certain Common Stock and Warrant Purchase Agreement dated as of the date hereof (the "Purchase Agreement") in connection with the Company's issuance to the Holder of shares of the Company's Common Stock (the "Common Shares"). 1. Purchase Shares. Subject to the terms and conditions hereinafter set forth and set forth in the Purchase Agreement, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the holder hereof in writing), to purchase from the Company up to thirty-five thousand six hundred thirty-nine (35,639) fully paid and nonassessable shares of Common Stock of the Company, as constituted on the Warrant Issue Date (the "Common Stock"). The number of shares of Common Stock issuable pursuant to this Section 1 (the "Shares") shall be subject to adjustment pursuant to Section 5 and Section 8 hereof. 2. Exercise Price. The purchase price for the Shares shall be $3.25, as adjusted from time to time pursuant to Section 8 hereof (the "Exercise Price"). 3. Exercise Period. This Warrant shall not be exercisable prior to December 9,1999. Thereafter, this Warrant shall be exercisable as follows: (a) This Warrant shall be exercisable with respect to 50% of the Shares, in whole or in part with respect to such Shares, during the term commencing on the date that the closing price of the Company's Common Stock on the Nasdaq National Market has exceeded $10.00 per share (as adjusted for any stock splits, stock dividends, recapitalizations or the like) for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending on 5:00 p.m. on December 9, 2001. (b) This Warrant shall become exercisable with respect to the remaining Shares, in whole or in part, during the term commencing on the date that the closing price of the Company's Common Stock on the Nasdaq National Market has exceeded $15.00 per share (as adjusted for any stock splits, stock dividends, recapitalizations or the like) for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending on 5:00 p.m. on December 9, 2001. 4. Method of Exercise. While this Warrant remains outstanding and exercisable in accordance with Section 3 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by: (a) the surrender of the Warrant, together with a duly executed copy of the form of Notice of Exercise attached hereto, to the Secretary of the Company at its principal offices; and (b) the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares being purchased. 5. Assumption of Warrant. If at any time, while this Warrant, or any portion thereof, is outstanding and unexpired there shall be (i) an acquisition of the Company by another entity by means of a merger, consolidation, or other transaction or series of related transactions resulting in the exchange of the outstanding shares of the Company's capital stock such that shareholders of the Company prior to such transaction own, directly or indirectly, less than 50% of the voting power of the surviving entity, or (ii) a sale or transfer of all or substantially all of the Company's assets to any other person, then, as a part of such acquisition, sale or transfer, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares of stock or other securities or property of the successor corporation resulting from such acquisition, sale or transfer which a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such acquisition, sale or transfer if this Warrant had been exercised immediately before such acquisition, sale or transfer, all subject to further adjustment as provided in this Section 5; and, in any such case, appropriate adjustment (as determined by the Company's Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth herein (including provisions with respect to changes in and other adjustments of the number of Shares the Holder is entitled to purchase) shall thereafter be applicable, as nearly as possible, in relation to any shares of common stock or other securities or other property thereafter deliverable upon the exercise of this Warrant. 6. Certificates for Shares. Upon the exercise of the purchase rights evidenced by this Warrant, one or more certificates for the number of Shares so purchased shall be issued as soon as practicable thereafter (with appropriate restrictive legends, if applicable), and in any event within thirty (30) days of the delivery of the Notice of Exercise. 2 7. Issuance of Shares. The Company covenants that the Shares, when issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens, and charges with respect to the issuance thereof. 8. Adjustment of Exercise Price and Number of Shares. The number of and kind of securities purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows: (a) Subdivisions, Combinations and Other Issuances. If the Company shall at any time prior to the expiration of this Warrant subdivide its Common Stock, by split-up or otherwise, or combine its Common Stock, or issue additional shares of its Common Stock or Common Stock as a dividend with respect to any shares of its Common Stock, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the purchase price payable per share, but the aggregate purchase price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 8(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend. (b) Reclassification, Reorganization and Consolidation. In case of any reclassification, capital reorganization, or change in the Common Stock of the Company (other than as a result of a subdivision, combination, or stock dividend provided for in Section 8(a) above), then, as a condition of such reclassification, reorganization, or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable in connection with such reclassification, reorganization, or change by a holder of the same number of shares of Common Stock as were purchasable by the Holder immediately prior to-such reclassification, reorganization, or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof, and appropriate adjustments shall be made to the purchase price per share payable hereunder, provided the aggregate purchase price shall remain the same. (c) Notice of Adjustment. When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the Warrant, or in the Exercise Price, the Company shall promptly notify the Holder of such event and of the number of shares of Common Stock or other securities or property thereafter purchasable upon exercise of this Warrant. 9. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional 3 shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect. 10. No Shareholder Rights. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a shareholder with respect to the Shares, including (without limitation) the right to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of shareholder meetings, and such holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company. However, nothing in this Section 10 shall limit the right of the Holder to be provided the notices required under this Warrant or the Purchase Agreement. 11. Transfers of Warrant. Subject to compliance with applicable federal and state securities laws, this Warrant and all rights hereunder are transferable in whole or in part by the Holder to any person or entity upon written notice to the Company. The transfer shall be recorded on the books of the Company upon the surrender of this Warrant, properly endorsed, to the Company at its principal offices, and the payment to the Company of all transfer taxes and other governmental charges imposed on such transfer. In the event of a partial transfer, the Company shall issue to the Holders one or more appropriate new warrants. 12. Successors and Assigns. The terms and provisions of this Warrant and the Purchase Agreement shall inure to the benefit of, and be binding upon, the Company and the Holders hereof and their respective successors and assigns. 13. Amendments and Waivers. Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder. 14. Notices. All notices required under this Warrant and shall be deemed to have been given or made for all purposes (i) upon personal delivery, (ii) upon confirmation receipt that the communication was successfully sent to the applicable number if sent by facsimile; (iii) one day after being sent, when sent by professional overnight courier service, or (iv) five days after posting when sent by registered or certified mail. Notices to the Company shall be sent to the principal office of the Company (or at such other place as the Company shall notify the Holder hereof in writing). Notices to the Holder shall be sent to the address of the Holder on the books of the Company (or at such other place as the Holder shall notify the Company hereof in writing). 15. Attorneys' Fees. If any action of law or equity is necessary to enforce or interpret the terms of this Warrant, the prevailing party shall be entitled to its reasonable attorneys' fees, costs and disbursements in addition to any other relief to which it may be entitled. 16. Captions. The section and subsection headings of this Warrant are inserted for convenience only and shall not constitute a part of this Warrant in construing or interpreting any provision hereof. 4 17. Governing Law. This Warrant shall be governed by the laws of the State of California as applied to agreements among California residents made and to be performed entirely within the State of California. [remainder of page intentionally left blank] 5 IN WITNESS WHEREOF, Digital Generation Systems, Inc. caused this Warrant to be executed by an officer thereunto duly authorized. DIGITAL GENERATION SYSTEMS, INC. By: /s/ HENRY W. DONALDSON ---------------------------------------------- Henry W. Donaldson, President and Chief Executive Officer SIGNATURE PAGE TO WARRANT TO PURCHASE COMMON STOCK OF DIGITAL GENERATION SYSTEMS, INC. NOTICE OF EXERCISE To: DIGITAL GENERATION SYSTEMS, INC. The undersigned hereby elects to purchase _____________________ shares of Common Stock of Digital Generation Systems, Inc., pursuant to the terms of the attached Warrant and payment of the Exercise Price per share required under such Warrant accompanies this notice. The undersigned hereby represents and warrants that the undersigned is acquiring such shares for its own account for investment purposes only, and not with a view to distribution of such shares or any part thereof. WARRANTHOLDER: ________________________________________ By: _____________________________________ Address: ________________________________________ Date: ________________________________________ _________________ Name in which shares should be registered: __________________________________________ THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT. WARRANT TO PURCHASE COMMON STOCK OF DIGITAL GENERATION SYSTEMS, INC. VOID AFTER DECEMBER 9, 2001 This Warrant is issued to Technology Crossover Ventures, C.V., or its registered assigns ("Holder") by Digital Generation Systems, Inc., a California corporation (the "Company"), on December 9, 1998 (the "Warrant Issue Date"). This Warrant is issued pursuant to the terms of that certain Common Stock and Warrant Purchase Agreement dated as of the date hereof (the "Purchase Agreement") in connection with the Company's issuance to the Holder of shares of the Company's Common Stock (the "Common Shares"). 1. Purchase Shares. Subject to the terms and conditions hereinafter set forth and set forth in the Purchase Agreement, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the holder hereof in writing), to purchase from the Company up to two thousand eight hundred twenty-three (2,823) fully paid and nonassessable shares of Common Stock of the Company, as constituted on the Warrant Issue Date (the "Common Stock"). The number of shares of Common Stock issuable pursuant to this Section 1 (the "Shares") shall be subject to adjustment pursuant to Section 5 and Section 8 hereof. 2. Exercise Price. The purchase price for the Shares shall be $3.25, as adjusted from time to time pursuant to Section 8 hereof (the "Exercise Price"). 3. Exercise Period. This Warrant shall not be exercisable prior to December 9, 1999. Thereafter, this Warrant shall be exercisable as follows: (a) This Warrant shall be exercisable with respect to 50% of the Shares, in whole or in part with respect to such Shares, during the term commencing on the date that the closing price of the Company's Common Stock on the Nasdaq National Market has exceeded $10.00 per share (as adjusted for any stock splits, stock dividends, recapitalizations or the like) for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending on 5:00 p.m. on December 9, 2001. (b) This Warrant shall become exercisable with respect to the remaining Shares, in whole or in part, during the term commencing on the date that the closing price of the Company's Common Stock on the Nasdaq National Market has exceeded $15.00 per share (as adjusted for any stock splits, stock dividends, recapitalizations or the like) for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending on 5:00 p.m. on December 9, 2001. 4. Method of Exercise. While this Warrant remains outstanding and exercisable in accordance with Section 3 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by: (a) the surrender of the Warrant, together with a duly executed copy of the form of Notice of Exercise attached hereto, to the Secretary of the Company at its principal offices; and (b) the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares being purchased. 5. Assumption of Warrant. If at any time, while this Warrant, or any portion thereof, is outstanding and unexpired there shall be (1) an acquisition of the Company by another entity by means of a merger, consolidation, or other transaction or series of related transactions resulting in the exchange of the outstanding shares of the Company's capital stock such that shareholders of the Company prior to such transaction own, directly or indirectly, less than 50% of the voting power of the surviving entity, or (ii) a sale or transfer of all or substantially all of the Company's assets to any other person, then, as a part of such acquisition, sale or transfer, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares of stock or other securities or property of the successor corporation resulting from such acquisition, sale or transfer which a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such acquisition, sale or transfer if this Warrant had been exercised immediately before such acquisition, sale or transfer, all subject to further adjustment as provided in this Section 5; and, in any such case, appropriate adjustment (as determined by the Company's Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth herein (including provisions with respect to changes in and other adjustments of the number of Shares the Holder is entitled to purchase) shall thereafter be applicable, as nearly as possible, in relation to any shares of common stock or other securities or other property thereafter deliverable upon the exercise of this Warrant. . 6. Certificates for Shares. Upon the exercise of the purchase rights evidenced by this Warrant, one or more certificates for the number of Shares so purchased shall be ISSUED AS SOON as practicable thereafter (with appropriate restrictive legends, if applicable), and in any event within thirty (30) days of the delivery of the Notice of Exercise. 2 7. Issuance of Shares. The Company covenants that the Shares, when issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens, and charges with respect to the issuance thereof. 8. Adjustment of Exercise Price and Number of Shares. The number of and kind of securities purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows: (a) Subdivisions, Combinations and Other Issuances. If the Company shall at any time prior to the expiration of this Warrant subdivide its Common Stock, by split-up or otherwise, or combine its Common Stock, or issue additional shares of its Common Stock or Common Stock as a dividend with respect to any shares of its Common Stock, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the purchase price payable per share, but the aggregate purchase price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 8(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend. (b) Reclassification, Reorganization and Consolidation. In case of any reclassification, capital reorganization, or change in the Common Stock of the Company (other than as a result of a subdivision, combination, or stock dividend provided for in Section 8(a) above), then, as a condition of such reclassification, reorganization, or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable in connection with such reclassification, reorganization, or change by a holder of the same number of shares of Common Stock as were purchasable by the Holder immediately prior to such reclassification, reorganization, or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof, and appropriate adjustments shall be made to the purchase price per share payable hereunder, provided the aggregate purchase price shall remain the same. (c) Notice of Adjustment. When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the Warrant, or in the Exercise Price, the Company shall promptly notify the Holder of such event and of the number of shares of Common Stock or other securities or property thereafter purchasable upon exercise of this Warrant. 9. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional 3 shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect. 10. No Shareholder Rights. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a shareholder with respect to the Shares, including (without limitation) the right to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of shareholder meetings, and such holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company. However, nothing in this Section 10 shall limit the right of the Holder to be provided the notices required under this Warrant or the Purchase Agreement. 11. Transfers of Warrant. Subject to compliance with applicable federal and state securities laws, this Warrant and all rights hereunder are transferable in whole or in part by the Holder to any person or entity upon written notice to the Company. The transfer shall be recorded on the books of the Company upon the surrender of this Warrant, properly endorsed, to the Company at its principal offices, and the payment to the Company of all transfer taxes and other governmental charges imposed on such transfer. In the event of a partial transfer, the Company shall issue to the Holders one or more appropriate new warrants. 12. Successors and Assigns. The terms and provisions of this Warrant and the Purchase Agreement shall inure to the benefit of, and be binding upon, the Company and the Holders hereof and their respective successors and assigns. 13. Amendments and Waivers. Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder. 14. Notices. All notices required under this Warrant and shall be deemed to have been given or made for all purposes (i) upon personal delivery, (ii) upon confirmation receipt that the communication was successfully sent to the applicable number if sent by facsimile; (iii) one day after being sent, when sent by professional overnight courier service, or (iv) five days after posting when sent by registered or certified mail. Notices to the Company shall be sent to the principal office of the Company (or at such other place as the Company shall notify the Holder hereof in writing). Notices to the Holder shall be sent to the address of the Holder on the books of the Company (or at such other place as the Holder shall notify the Company hereof in writing). 15. Attorneys' Fees. If any action of law or equity is necessary to enforce or interpret the terms of this Warrant, the prevailing party shall be entitled to its reasonable attorneys' fees, costs and disbursements in addition to any other relief to which it may be entitled. 16. Captions. The section and subsection headings of this Warrant are inserted for convenience only and shall not constitute a part of this Warrant in construing or interpreting any provision hereof. 4 17. Governing Law. This Warrant shall be governed by the laws of the State of California as applied to agreements among California residents made and to be performed entirely within the State of California. [remainder of page intentionally left blank] 5 IN WITNESS WHEREOF, Digital Generation Systems, Inc. caused this Warrant to be executed by an officer thereunto duly authorized. DIGITAL GENERATION SYSTEMS, INC. By: /s/ HENRY W. DONALDSON ----------------------------------------- Henry W. Donaldson, President and Chief Executive Officer SIGNATURE PAGE TO WARRANT TO PURCHASE COMMON STOCK OF DIGITAL GENERATION SYSTEMS, INC. NOTICE OF EXERCISE To: DIGITAL GENERATION SYSTEMS, INC. The undersigned hereby elects to purchase __ shares of Common Stock of Digital Generation Systems, Inc., pursuant to the terms of the attached Warrant and payment of the Exercise Price per share required under such Warrant accompanies this notice. The undersigned hereby represents and warrants that the undersigned is acquiring such shares for its own account for investment purposes only, and not with a view to distribution of such shares or any part thereof. WARRANTHOLDER: ---------------------------------------- By: ------------------------------------- Address: ---------------------------------------- Date: ---------------------------------------- ---------------- Name in which shares should be registered: - ------------------------------------------ THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT. WAFT TO PURCHASE COMMON STOCK OF DIGITAL GENERATION SYSTEMS, INC. VOID AFTER DECEMBER 9, 2001 This Warrant is issued to TCV II, V.O.F., or its registered assigns ("Holder") by Digital Generation Systems, Inc., a California corporation (the "Company"), on December 9, 1998 (the "Warrant Issue Date"). This Warrant is issued pursuant to the terms of that certain Common Stock and Warrant Purchase Agreement dated as of the date hereof (the "Purchase Agreement") in connection with the Company's issuance to the Holder of shares of the Company's Common Stock (the "Common Shares"). 1. Purchase Shares. Subject to the terms and conditions hereinafter set forth and set forth in the Purchase Agreement, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the holder hereof in writing), to purchase from the Company up to one thousand one hundred ninety-six (1,196) fully paid and nonassessable shares of Common Stock of the Company, as constituted on the Warrant Issue Date (the "Common Stock"). The number of shares of Common Stock issuable pursuant to this Section 1 (the "Shares") shall be subject to adjustment pursuant to Section 5 and Section 8 hereof. 2. Exercise Price. The purchase price for the Shares shall be $3.25, as adjusted from time to time pursuant to Section 8 hereof (the "Exercise Price"). 3. Exercise Period. This Warrant shall not be exercisable prior to December 9,1999. Thereafter, this Warrant shall be exercisable as follows: (a) This Warrant shall be exercisable with respect to 50% of the Shares, in whole or in part with respect to such Shares, during the term commencing on the date that the closing price of the Company's Common Stock on the Nasdaq National Market has exceeded $10.00 per share (as adjusted for any stock splits, stock dividends, recapitalizations or the like) for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending on 5:00 p.m. On December 9, 2001. (b) This Warrant shall become exercisable with respect to the remaining Shares, in whole or in part, during the term commencing on the date that the closing price of the Company's Common Stock on the Nasdaq National Market has exceeded $15.00 per share (as adjusted for any stock splits, stock dividends, recapitalizations or the like) for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending on 5:00 p.m. on December 9, 2001. 4. Method of Exercise. While this Warrant remains outstanding and exercisable in accordance with Section 3 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by: (a) the surrender of the Warrant, together with a duly executed copy of the form of Notice of Exercise attached hereto, to the Secretary of the Company at its principal offices; and (b) the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares being purchased. 5. Assumption of Warrant. If at any time, while this Warrant, or any portion thereof, is outstanding and unexpired there shall be (i) an acquisition of the Company by another entity by means of a merger, consolidation, or other transaction or series of related transactions resulting in the exchange of the outstanding shares of the Company's capital stock such that shareholders of the Company prior to such transaction own, directly or indirectly, less than 50% of the voting power of the surviving entity, or (ii) a sale or transfer of all or substantially all of the Company's assets to any other person, then, as a part of such acquisition, sale or transfer, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares of stock or other securities or property of the successor corporation resulting from such acquisition, sale or transfer which a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such acquisition, sale or transfer if this Warrant had been exercised immediately before such acquisition, sale or transfer, all subject to further adjustment as provided in this Section 5; and, in any such case, appropriate adjustment (as determined by the Company's Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth herein (including provisions with respect to changes in and other adjustments of the number of shares the holder is entitled to purchase) shall thereafter be applicable, as nearly as possible, in relation to any shares of common stock or other securities or other property thereafter deliverable upon the exercise of this Warrant. 6. Certificates for Shares. Upon the exercise of the purchase rights evidenced by this Warrant, one or more certificates for the number of Shares so purchased shall be issued as soon as practicable thereafter (with appropriate restrictive legends, if applicable), and in any event within thirty (30) days of the delivery of the Notice of Exercise. 2 7. Issuance of Shares. The Company covenants that the Shares, when issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens, and charges with respect to the issuance thereof. 8. Adjustment of Exercise Price and Number of Shares. The number of and kind of securities purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows: (a) Subdivisions, Combinations and Other Issuances. If the Company shall at any time prior to the expiration of this Warrant subdivide its Common Stock, by split-up or otherwise, or combine its Common Stock, or issue additional shares of its Common Stock or Common Stock as a dividend with respect to any shares of its Common Stock, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the purchase price payable per share, but the aggregate purchase price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 8(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend. (b) Reclassification, Reorganization and Consolidation. In case of any reclassification, capital reorganization, or change in the Common Stock of the Company (other than as a result of a subdivision, combination, or stock dividend provided for in Section 8(a) above), then, as a condition of such reclassification, reorganization, or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable in connection with such reclassification, reorganization, or change by a holder of the same number of shares of Common Stock as were purchasable by the Holder immediately prior to such reclassification, reorganization, or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof, and appropriate adjustments shall be made to the purchase price per share payable hereunder, provided the aggregate purchase price shall remain the same. (c) Notice of Adjustment. When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the Warrant, or in the Exercise Price, the company shall promptly notify the Holder of such event and of the number of shares of Common Stock or other securities or property thereafter purchasable upon exercise of this Warrant. 9. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional 3 shares the Company shall make a cash payment therefor on the basis or the Exercise Price then in effect. 10. No Shareholder Rights. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a shareholder with respect to the Shares, including (without limitation) the right to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of shareholder meetings, and such holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company. However, nothing in this Section 10 shall limit the right of the Holder to be provided the notices required under this Warrant or the Purchase Agreement. 11. Transfers of Warrant. Subject to compliance with applicable federal and state securities laws, this Warrant and all rights hereunder are transferable in whole or in part by the Holder to any person or entity upon written notice to the Company. The transfer shall be recorded on the books of the Company upon the surrender of this Warrant, property endorsed, to the Company at its principal offices, and the payment to the Company of all transfer taxes and other governmental charges imposed on such transfer. In the event of a partial transfer, the Company shall issue to the Holders one or more appropriate new warrants. 12. Successors and Assigns. The terms and provisions of this Warrant and the Purchase Agreement shall inure to the benefit of, and be binding upon, the Company and the Holders hereof and their respective successors and assigns. 13. Amendments and Waivers. Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder. 14. Notices. All notices required under this Warrant and shall be deemed to have been given or made for all purposes (i) upon personal delivery, (ii) upon confirmation receipt that the communication was successfully sent to the applicable number if sent by facsimile; (iii) one day after being sent, when sent by professional overnight courier service, or (iv) five days after posting when sent by registered or certified mail. Notices to the Company shall be sent to the principal office of the Company (or at such other place as the Company shall notify the Holder hereof in writing). Notices to the Holder shall be sent to the address of the Holder on the books of the Company (or at such other place as the Holder shall notify the Company hereof in writing). 15. Attorneys' Fees. If any action of law or equity is necessary to enforce or interpret the terms of this Warrant, the prevailing party shall be entitled to its reasonable attorneys' fees, costs and disbursements in addition to any other relief to which it may be entitled. 16. Captions. The section and subsection headings of this Warrant are inserted for convenience only and shall not constitute a part of this Warrant in construing or interpreting any provision hereof. 4 17. Governing Law. This Warrant shall be governed by the laws of the State of California as applied to agreements among California residents made and to be performed entirely within the State of California. [remainder of page intentionally left blank] 5 IN WITNESS WHEREOF, Digital Generation Systems, Inc. caused this Warrant to be executed by an officer thereunto duly authorized. DIGITAL GENERATION SYSTEMS, INC. By: /s/ HENRY DONALDSON --------------------------------------- Henry Donaldson, President and Chief Executive Officer SIGNATURE PAGE TO WARRANT TO PURCHASE COMMON STOCK OF DIGITAL GENERATION SYSTEMS, INC. NOTICE OF EXERCISE To: DIGITAL GENERATION SYSTEMS, INC. The undersigned hereby elects to purchase _____________________ shares of Common Stock of Digital Generation Systems, Inc., pursuant to the terms of the attached Warrant and payment of the Exercise Price per share required under such Warrant accompanies this notice. The undersigned hereby represents and warrants that the undersigned is acquiring such shares for its own account for investment purposes only, and not with a view to distribution of such shares or any part thereof. WARRANTHOLDER: ---------------------------------------- By: ------------------------------------- Address: ---------------------------------------- ---------------------------------------- Date: ----------------- Name in which shares should be registered: - ------------------------------------------ THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT. WARRANT TO PURCHASE COMMON STOCK OF DIGITAL GENERATION SYSTEMS, INC. VOID AFTER DECEMBER 9, 2001 This Warrant is issued to Technology Crossover Ventures II, L.P., or its registered assigns ("Holder") by Digital Generation Systems, Inc., a California corporation (the "Company"), on December 9, 1998 (the "Warrant Issue Date"). This Warrant is issued pursuant to the terms of that certain Common Stock and Warrant Purchase Agreement dated as of the date hereof (the "Purchase Agreement") in connection with the Company's issuance to the Holder of shares of the Company's Common Stock (the "Common Shares"). 1. Purchase Shares. Subject to the terms and conditions hereinafter set forth and set forth in the Purchase Agreement, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the holder hereof in writing), to purchase from the Company up to thirty-six thousand seven hundred ninety-eight (36,798) fully paid and nonassessable shares of Common Stock of the Company, as constituted on the Warrant Issue Date (the "Common Stock"). The number of shares of Common Stock issuable pursuant to this Section 1 (the "Shares") shall be subject to adjustment pursuant to Section 5 and Section 8 hereof. 2. Exercise Price. The purchase price for the Shares shall be $3.25, as adjusted from time to time pursuant to Section 8 hereof (the "Exercise Price"). 3. Exercise Period. This Warrant shall not be exercisable prior to December 9, 1999. Thereafter, this Warrant shall be exercisable as follows: (a) This Warrant shall be exercisable with respect to 50% of the Shares, in whole or in part with respect to such Shares, during the term commencing on the date that the closing price of the Company's Common Stock on the Nasdaq National Market has exceeded $ 10.00 per share (as adjusted for any stock splits, stock dividends, recapitalizations or the like) for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending on 5:00 p.m. on December 9, 2001. (b) This Warrant shall become exercisable with respect to the remaining Shares, in whole or in part, during the term commencing on the date that the closing price of the Company's Common Stock on the Nasdaq National Market has exceeded $ 15.00 per share (as adjusted for any stock splits, stock dividends, recapitalizations or the like) for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending on 5:00 p.m. on December 9, 2001. 4. Method of Exercise. While this Warrant remains outstanding and exercisable in accordance with Section 3 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by: (a) the surrender of the Warrant, together with a duly executed copy of the form of Notice of Exercise attached hereto, to the Secretary of the Company at its principal offices; and (b) the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares being purchased. 5. Assumption of Warrant. If at any time, while this Warrant, or any portion thereof, is outstanding and unexpired there shall be (i) an acquisition of the Company by another entity by means of a merger, consolidation, or other transaction or series of related transactions resulting in the exchange of the outstanding shares of the Company's capital stock such that shareholders of the Company prior to such transaction own, directly or indirectly, less than 50% of the voting power of the surviving entity, or (ii) a sale or transfer of all or substantially all of the Company's assets to any other person, then, as a part of such acquisition, sale or transfer, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares of stock or other securities or property of the successor corporation resulting from such acquisition, sale or transfer which a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such acquisition, sale or transfer if this Warrant had been exercised immediately before such acquisition, sale or transfer, all subject to further adjustment as provided in this Section 5; and, in any such case, appropriate adjustment (as determined by the Company's Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth herein (including provisions with respect to changes in and other adjustments of the number of Shares the Holder is entitled to purchase) shall thereafter be applicable, as nearly as possible, in relation to any shares of common stock or other securities or other property thereafter deliverable upon the exercise of this Warrant. 6. Certificates for Shares. Upon the exercise of the purchase rights evidenced by this warrant, one or more certificates for the number of shares so purchased shall be issued as soon as practicable thereafter (with appropriate restrictive legends, if applicable), and in any event within thirty (30) days of the delivery of the Notice of Exercise. 2 7. Issuance of Shares. The Company covenants that the Shares, when issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens, and charges with respect to the issuance thereof. 8. Adjustment of Exercise Price and Number of Shares. The number of and kind of securities purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows: (a) Subdivisions, Combinations and Other Issuances. If the Company shall at any time prior to the expiration of this Warrant subdivide its Common Stock, by split-up or otherwise, or combine its Common Stock, or issue additional shares of its Common Stock or Common Stock as a dividend with respect to any shares of its Common Stock, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the purchase price payable per share, but the aggregate purchase price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 8(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed. upon the making of such dividend. (b) Reclassification, Reorganization and Consolidation. In case of any reclassification, capital reorganization, or change in the Common Stock of the Company (other than as a result of a subdivision, combination, or stock dividend provided for in Section 8(a) above), then, as a condition of such reclassification, reorganization, or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable in connection with such reclassification, reorganization, or change by a holder of the same number of shares of Common Stock as were purchasable by the Holder immediately prior to such reclassification, reorganization, or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof, and appropriate adjustments shall be made to the purchase price per share payable hereunder, provided the aggregate purchase price shall remain the same. (c) Notice of Adjustment. When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the warrant, or in the exercise price, the company shall promptly notify the holder of such event and of the number of shares of Common Stock or other securities or property thereafter purchasable upon exercise of this Warrant. 9. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional 3 shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect. 10. No Shareholder Rights. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a shareholder with respect to the Shares, including (without limitation) the right to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of shareholder meetings, and such holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company. However, nothing in this Section 10 shall limit the right of the Holder to be provided the notices required under this Warrant or the Purchase Agreement. 11. Transfers of Warrant. Subject to compliance with applicable federal and state securities laws, this Warrant and all rights hereunder are transferable in whole or in part by the Holder to any person or entity upon written notice to the Company. The transfer shall be recorded on the books of the Company upon the surrender of this Warrant, properly endorsed, to the Company at its principal offices, and the payment to the Company of all transfer taxes and other governmental charges imposed on such transfer. In the event of a partial transfer, the Company shall issue to the Holders one or more appropriate new warrants. 12. Successors and Assigns. The terms and provisions of this Warrant and the Purchase Agreement shall inure to the benefit of, and be binding upon, the Company and the Holders hereof and their respective successors and assigns. 13. Amendments and Waivers. Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder. 14. Notices. All notices required under this Warrant and shall be deemed to have been given or made for all purposes (i) upon personal delivery, (ii) upon confirmation receipt that the communication was successfully sent to the applicable number if sent by facsimile; (iii) one day after being sent, when sent by professional overnight courier service, or (iv) five days' after posting when sent by registered or certified mail. Notices to the Company shall be sent to the principal office of the Company (or at such other place as the Company shall notify the Holder hereof in writing). Notices to the Holder shall be sent to the address of the Holder on the books of the Company (or at such other place as the Holder shall notify the Company hereof in writing). 15. Attorneys' Fees. If any action of law or equity is necessary to enforce or interpret the terms of this Warrant, the prevailing party shall be entitled to its reasonable attorneys' fees, costs and disbursements in addition to any other relief to which it may be entitled. 16. Captions. The section and subsection headings of this Warrant are inserted for convenience only and shall not constitute a part of this Warrant in construing or interpreting any provision hereof. 4 17. Governing Law. This Warrant shall be governed by the laws of the State of California as applied to agreements among California residents made and to be performed entirely within the State of California. [remainder of page intentionally left blank] 5 IN WITNESS WHEREOF, Digital Generation Systems, Inc. caused this Warrant to be executed by an officer thereunto duly authorized. DIGITAL GENERATION SYSTEMS, INC. By: /s/ HENRY W. DONALDSON -------------------------------------- Henry W. Donaldson, President and Chief Executive Officer SIGNATURE PAGE TO WARRANT TO PURCHASE COMMON STOCK OF DIGITAL GENERATION SYSTEMS, INC. NOTICE OF EXERCISE To: DIGITAL GENERATION SYSTEMS INC. The undersigned hereby elects to purchase_____________________ shares of Common Stock of Digital Generation Systems, Inc., pursuant to the terms of the attached Warrant and payment of the Exercise Price per share required under such Warrant accompanies this notice. The undersigned hereby represents and warrants that the undersigned is acquiring such shares for its own account for investment purposes only, and not with a view to distribution of such shares or any part thereof. WARRANTHOLDER: ----------------------------------------- By: -------------------------------------- Address: ------------------------------------------ ------------------------------------------ Date: ----------------- Name in which shares should be registered: - ------------------------------------------ THIS WANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT. WARRANT TO PURCHASE COMMON STOCK OF DIGITAL GENERATION SYSTEMS, INC. VOID AFTER DECEMBER 9, 2001 This Warrant is issued to TCV II (Q), L.P., or its registered assigns ("Holder") by Digital Generation Systems, Inc., a California corporation (the "Company"), on December 9, 1998 (the "Warrant Issue Date"). This Warrant is issued pursuant to the terms of that certain Common Stock and Warrant Purchase Agreement dated as of the date hereof (the "Purchase Agreement") in connection with the Company's issuance to the Holder of shares of the Company's Common Stock (the "Common Shares"). 1. Purchase Shares. Subject to the terms and conditions hereinafter set forth and set forth in the Purchase Agreement, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the holder hereof in writing), to purchase from the Company up to twenty-eight thousand two hundred ninety-one (28,291) fully paid and nonassessable shares of Common Stock of the Company, as constituted on the Warrant Issue Date (the "Common Stock"). The number of shares of Common Stock issuable pursuant to this Section 1 (the "Shares") shall be subject to adjustment pursuant to Section 5 and Section 8 hereof. 2. Exercise Price. The purchase price for the Shares shall be $3.25, as adjusted from time to time pursuant to Section 8 hereof (the "Exercise Price"). 3. Exercise Period. This Warrant shall not be exercisable prior to December 9,1999. Thereafter, this Warrant shall be exercisable as follows: (a) This Warrant shall be exercisable with respect to 50% of the Shares, in whole ox in part with respect to such Shares, during the term commencing on the date that the closing price of the Company's Common Stock on the* Nasdaq National Market has exceeded $10.00 per share (as adjusted for any stock splits, stock dividends, recapitalizations or the like) for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending on 5:00 p.m. on December 9, 2001. (b) This Warrant shall become exercisable with respect to the remaining Shares, in whole or in part, during the term commencing on the date that the closing price of the Company's Common Stock on the Nasdaq National Market has exceeded $15.00 per share (as adjusted for any stock splits, stock dividends, recapitalizations or the like) for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending on 5:00 p.m. on December 9, 2001. 4. Method of Exercise. While this Warrant remains outstanding and exercisable in accordance with Section 3 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by: (a) the surrender of the Warrant, together with a duly executed copy of the form of Notice of Exercise attached hereto, to the Secretary of the Company at its principal offices; and (b) the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares being purchased. 5. Assumption of Warrant. If at any time, while this Warrant, or any portion thereof, is outstanding and unexpired there shall be (i) an acquisition of the Company by another entity by means of a merger, consolidation, or other transaction or series of related transactions resulting in the exchange of the outstanding shares of the Company's capital stock such that shareholders of the Company prior to such transaction own, directly or indirectly, less than 50% of the voting power of the surviving entity, or (ii) a sale or transfer of all or substantially all of the Company's assets to any other person, then, as a part of such acquisition, sale or transfer, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares of stock or other securities or property of the successor corporation resulting from such acquisition, sale or transfer which a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such acquisition, sale or transfer if this Warrant had been exercised immediately before such acquisition, sale or transfer, all subject to further adjustment as provided in this Section 5; and, in any such case, appropriate adjustment (as determined by the Company's Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth herein (including provisions with respect to changes in and other adjustments of the number of Shares the Holder is entitled to purchase) shall thereafter be applicable, as nearly as possible, in relation to any shares of common stock or other securities or other property thereafter deliverable upon the exercise of this Warrant. 6. Certificates for Shares. Upon the exercise of the purchase rights evidenced by this Warrant, one or more certificates for the number of Shares so purchased shall be issued as soon as practicable thereafter (with appropriate restrictive legends, if applicable), and in any event within thirty (30) days of the delivery of the Notice of Exercise. 2 7. Issuance of Shares. The Company covenants that the Shares, when issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens, and charges with respect to the issuance thereof. 8. Adjustment of Exercise Price and Number of Shares. The number of and kind of securities purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows: (a) Subdivisions. Combinations and Other Issuances. If the Company shall at any time prior to the expiration of this Warrant subdivide its Common Stock, by split-up or otherwise, or combine its Common Stock, or issue additional shares of its Common Stock or Common Stock as a dividend with respect to any shares of its Common Stock, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the purchase price payable per share, but the aggregate purchase price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 8(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend. (b) Reclassification, Reorganization and Consolidation. In case of any reclassification, capital reorganization, or change in the Common Stock of the Company (other than as a result of a subdivision, combination, or stock dividend provided for in Section 8(a) above), then, as a condition of such reclassification, reorganization, or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable in connection with such reclassification, reorganization, or change by a holder of the same number of shares of Common Stock as were purchasable by the Holder immediately prior to such reclassification, reorganization, or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof, and appropriate adjustments shall be made to the purchase price per share payable hereunder, provided the aggregate purchase price shall remain the same. (c) Notice of Adjustment. When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the warrant, or in the Exercise Price, the Company shall promptly notify the Holder of such event and of the number of shares of Common Stock or other securities or property thereafter purchasable upon exercise of this Warrant. 9. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional 3 shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect. 10. No Shareholder Rights. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a shareholder with respect to the Shares, including (without limitation) the right to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of shareholder meetings, and such holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company. However, nothing in this Section 10 shall limit the right of the Holder to be provided the notices required under this Warrant or the Purchase Agreement. 11. Transfers of Warrant. Subject to compliance with applicable federal and state securities laws, this Warrant and all rights hereunder are transferable in whole or in part by the Holder to any person or entity upon written notice to the Company. The transfer shall be recorded on the books of the Company upon the surrender of this Warrant, properly endorsed, to the Company at its principal offices, and the payment to the Company of all transfer taxes and other governmental charges imposed on such transfer. In the event of a partial transfer, the Company shall issue to the Holders one or more appropriate new warrants. 12. Successors and Assigns. The terms and provisions of this Warrant and the Purchase Agreement shall inure to the benefit of, and be binding upon, the Company and the Holders hereof and their respective successors and assigns. 13. Amendments and Waivers. Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively, with the written consent of the Company and the Holder. 14. Notices. All notices required under this Warrant and shall be deemed to have been given or made for all purposes (i) upon personal delivery, (ii) upon confirmation receipt that the communication was successfully sent to the applicable number if sent by facsimile; (iii) one day after being sent, when sent by professional overnight courier service, or (iv) five days after posting when sent by registered or certified mail. Notices to the Company shall be sent to the principal office of the Company (or at such other place as the Company shall notify the Holder hereof in writing). Notices to the Holder shall be sent to the address of the Holder on the books of the Company (or at such other place as the Holder shall notify the Company hereof in writing). 15. Attorneys' Fees. If any action of law or equity is necessary to enforce or interpret the terms of this warrant, the prevailing party shall be entitled to its reasonable attorneys' fees, costs and disbursements in addition to any other relief to which it may be entitled. 16. Captions. The section and subsection headings of this Warrant are inserted for convenience only and shall not constitute a part of this Warrant in construing or interpreting any provision hereof. 4 17. Governing Law. This Warrant shall be governed by the laws of the State of California as applied to agreements among California residents made and to be performed entirely within the State of California. [remainder of page intentionally left blank] 5 IN WITNESS WHEREOF, Digital Generation Systems, Inc. caused this Warrant to be executed by an officer thereunto duly authorized. DIGITAL GENERATION SYSTEMS, INC. By: /s/ HENRY W. DONALDSON ----------------------------------------- Henry W. Donaldson, President and Chief Executive Officer SIGNATURE PAGE TO WARRANT TO PURCHASE COMMON STOCK OF DIGITAL GENERATION SYSTEMS, INC. NOTICE OF EXERCISE To: DIGITAL GENERATION SYSTEMS, INC. The undersigned hereby elects to purchase ____________________ shares of Common Stock of Digital Generation Systems, Inc., pursuant to the terms of the attached warrant and payment of the Exercise Price per share required under such warrant accompanies this notice. The undersigned hereby represents and warrants that the undersigned is acquiring such shares for its own account for investment purposes only, and not with a view to distribution of such shares or any part thereof. WARRANTHOLDER ---------------------------------------- By: ------------------------------------- Address: ---------------------------------------- Date: -------------------- ---------------------------------------- Name in which shares should be registered: - ------------------------------------------ THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT. WANT TO PURCHASE COMMON STOCK of DIGITAL GENERATION SYSTEMS, INC. VOID AFTER DECEMBER 9, 2001 This Warrant is issued to TCV II Strategic Partners, L.P., or its registered assigns ("Holder") by Digital Generation Systems, Inc., a California corporation (the "Company"), on December 9, 1998 (the "Warrant Issue Date"). This Warrant is issued pursuant to the terms of that certain Common Stock and Warrant Purchase Agreement dated as of the date hereof (the "Purchase Agreement") in connection with the Company's issuance to the Holder of shares of the Company's Common Stock (the "Common Shares"). 1. Purchase Shares. Subject to the terms and conditions hereinafter set forth and set forth in the Purchase Agreement, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the holder hereof in Writing), to purchase from the Company up to five thousand twenty (5,020) fully paid and nonassessable shares of Common Stock of the Company, as constituted on the Warrant Issue Date (the "Common Stock"). The number of shares of Common Stock issuable pursuant to this Section I (the "Shares") shall be subject to adjustment pursuant to Section 5 and Section 8 hereof. 2. Exercise Price. The purchase price for the Shares shall be $3.25, as adjusted from time to time pursuant to Section 8 hereof (the "Exercise Price"). 3. Exercise Period. This Warrant shall not be exercisable prior to December 9, 1999. Thereafter, this Warrant shall be exercisable as follows: (a) This Warrant shall be exercisable with respect to 50% of the Shares, in whole or in part with respect to such Shares, during the term commencing on the date that the closing price of the Company's Common Stock on the Nasdaq National Market has exceeded $10.00 per share (as adjusted for any stock splits, stock dividends, recapitalizations or the like) for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending on 5:00 p.m. on December 9, 2001. (b) This Warrant shall become exercisable with respect to the remaining Shares, in whole or in part, during the term commencing on the date that the closing price of the Company's Common Stock on the Nasdaq National Market has exceeded $15.00 per share (as adjusted for any stock splits, stock dividends, recapitalizations or the like) for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending on 5:00 p.m. on December 9, 2001. 4. Method of Exercise. While this Warrant remains outstanding and exercisable in accordance with Section 3 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by: (a) the surrender of the Warrant, together with a duly executed copy of the form of Notice of Exercise attached hereto, to the Secretary of the Company at its principal offices; and (b) the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares being purchased. 5. Assumption of Warrant. If at any time, while this Warrant, or any portion thereof, is outstanding and unexpired there shall be (i) an acquisition of the Company by another entity by means of a merger, consolidation, or other transaction or series of related transactions resulting in the exchange of the outstanding shares of the Company's capital stock such that shareholders of the Company prior to such transaction own, directly or indirectly, less than 50% of the voting power of the surviving entity, or (ii) a sale or transfer of all or substantially all of the Company's assets to any other person, then, as a part of such acquisition, sale or transfer, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares of stock or other securities or property of the successor corporation resulting from such acquisition, sale or transfer which a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such acquisition, sale or transfer if this Warrant had been exercised immediately before such acquisition, sale or transfer, all subject to further adjustment as provided in this Section 5; and, in any such case, appropriate adjustment (as determined by the Company's Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth herein (including provisions with respect to changes in and other adjustments of the number of Shares the Holder is entitled to purchase) shall thereafter be applicable, as nearly as possible, in relation to any shares of common stock or other securities or other property thereafter deliverable upon the exercise of this Warrant. 6. Certificates for Shares. Upon the exercise of the purchase rights evidenced by this Warrant, one or more certificates for the number of Shares so purchased shall be issued as soon as practicable thereafter (with appropriate restrictive legends, if applicable), and in any event within thirty (30) days of the delivery of the Notice of Exercise. 2 7. Issuance of Shares. The Company covenants that the Shares, when issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens, and charges with respect to the issuance thereof. 8. Adjustment of Exercise Price and Number of Shares. The number of and kind of securities purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows: (a) Subdivisions, Combinations and Other Issuances. If the Company shall at any time prior to the expiration of this Warrant subdivide its Common Stock, by split-up or otherwise, or combine its Common Stock, or issue additional shares of its Common Stock or Common Stock as a dividend with respect to any shares of its Common Stock, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the purchase price payable per share, but the aggregate purchase price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 8(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend. (b) Reclassification, Reorganization and Consolidation. In case of any reclassification, capital reorganization, or change in the Common Stock of the Company (other than as a result of a subdivision, combination, or stock dividend provided for in Section 8(a) above), then, as a condition of such reclassification, reorganization, or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable in connection with such reclassification, reorganization, or change by a holder of the same number of shares of Common Stock as were purchasable by the Holder immediately prior to such reclassification, reorganization, or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof, and appropriate adjustments shall be made to the purchase price per share payable hereunder, provided the aggregate purchase price shall remain the same. (c) Notice of Adjustment. when any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the Warrant, or in the Exercise Price, the Company shall promptly notify the Holder of such event and of the number of shares of Common Stock or other securities or property thereafter purchasable upon exercise of this Warrant. 9. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional 3 shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect. 10. No Shareholder Rights. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a shareholder with respect to the Shares, including (without limitation) the right to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of shareholder meetings, and such holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company. However, nothing in this Section 10 shall limit the right of the Holder to be provided the notices required under this Warrant or the Purchase Agreement. 11. Transfers of Warrant. Subject to compliance with applicable federal and state securities laws, this Warrant and all rights hereunder are transferable in whole or in part by the Holder to any person or entity upon written notice to the Company. The transfer shall be recorded on the books of the Company upon the surrender of this Warrant, properly endorsed, to the Company at its principal offices, and the payment to the Company of all transfer taxes and other governmental charges imposed on such transfer. In the event of a partial transfer, the Company shall issue to the Holders one or more appropriate new warrants. 12. Successors and Assigns. The terms and provisions of this Warrant and the Purchase Agreement shall inure to the benefit of, and be binding upon, the Company and the Holders hereof and their respective successors and assigns. 13. Amendments and Waivers. Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder. 14. Notices. All notices required under this Warrant and shall be deemed to have been given or made for all purposes (i) upon personal delivery, (ii) upon confirmation receipt that the communication was successfully sent to the applicable number if sent by facsimile; (iii) one day after being sent, when sent by professional overnight courier service, or (iv) five days after posting when sent by registered or certified mail. Notices to the Company shall be sent to the principal office of the Company (or at such other place as the Company shall notify the Holder hereof in writing). Notices to the Holder shall be sent to the address of the Holder on the books of the Company (or at such other place as the Holder shall notify the Company hereof in writing). 15. Attorneys' Fees. If any action of law or equity is necessary to enforce or interpret the terms of this Warrant, the prevailing party shall be entitled to its reasonable attorneys' fees, costs and disbursements in addition to any other relief to which it may be entitled. 16. Captions. The section and subsection headings of this Warrant are inserted for convenience only and shall not constitute a part of this Warrant in construing or interpreting any provisions hereof. 4 17. Governing Law. This Warrant shall be governed by the laws of the State of California as applied to agreements among California residents made and to be performed entirely within the State of California. [remainder of page intentionally left blank 5 IN WITNESS WHEREOF, Digital Generation Systems, Inc. caused this Warrant to be executed by an officer thereunto duly authorized. DIGITAL GENERATION SYSTEMS, INC. By: /s/ HENRY W. DONALDSON ------------------------------------------- Henry W. Donaldson, President and Chief Executive Officer SIGNATURE PAGE TO WARRANT TO PURCHASE COMMON STOCK OF DIGITAL GENERATION SYSTEMS, INC. NOTICE OF EXERCISE To: DIGITAL GENERATION SYSTEMS, INC. The undersigned hereby elects to purchase ____________________ shares of Common Stock of Digital Generation Systems, Inc., pursuant to the terms of the attached Warrant and payment of the Exercise Price per share required under such Warrant accompanies this notice. The undersigned hereby represents and warrants that the undersigned is acquiring such shares for its own account for investment purposes only, and not with a view to distribution of such shares or any part thereof. WARRANTHOLDER: ________________________________________ By: _____________________________________ Address: ________________________________________ ________________________________________ Date: ______________________ Name in which shares should be registered: __________________________________________ THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT. WARRANT TO PURCHASE COMMON STOCK OF DIGITAL GENERATION SYSTEMS, INC. VOID AFTER DECEMBER 9, 2001 This Warrant is issued to Technology Crossover Ventures II, C.V., or its registered assigns ("Holder") by Digital Generation Systems, Inc., a California corporation (the "Company"), on December 9, 1998 (the "Warrant Issue Date"). This Warrant is issued pursuant to the terms of that certain Common Stock and Warrant Purchase Agreement dated as of the date hereof (the "Purchase Agreement") in connection with the Company's issuance to the Holder of shares of the Company's Common Stock (the "Common Shares"). 1. Purchase Shares. Subject to the terms and conditions hereinafter set forth and set forth in the Purchase Agreement, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the holder hereof in writing), to purchase from the Company up to five thousand six hundred eighteen (5,618) fully paid and nonassessable shares of Common Stock of the Company, as constituted on the Warrant Issue Date (the "Common Stock"). The number of shares of Common Stock issuable pursuant to this Section 1 (the "Shares") shall be subject to adjustment pursuant to Section 5 and Section 8 hereof. 2. Exercise Price. The purchase price for the Shares shall be $3.25, as adjusted from time to time pursuant to Section 8 hereof (the "Exercise Price"). 3. Exercise Period. This Warrant shall not be exercisable prior to December 9,1999. Thereafter, this Warrant shall be exercisable as follows: (a) This Warrant shall be exercisable with respect to 50% of the Shares, in whole or in part with respect to such Shares, during the term commencing on the date that the closing price of the Company's Common Stock on the Nasdaq National Market has exceeded $10.00 per share (as adjusted for any stock splits, stock dividends, recapitalizations or the like) for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending on 5:00 p.m. on December 9, 2001. (b) This Warrant shall become exercisable with respect to the remaining Shares, in whole or in part, during the term commencing on the date that the closing price of the Company's Common Stock on the Nasdaq National Market has exceeded $15.00 per share (as adjusted for any stock splits, stock dividends, recapitalizations or the like) for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending on 5:00 p.m. on December 9, 2001. 4. Method of Exercise. While this Warrant remains outstanding and exercisable in accordance with Section 3 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by: (a) the surrender of the Warrant, together with a duly executed copy of the form of Notice of Exercise attached hereto, to the Secretary of the Company at its principal offices; and (b) the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares being purchased. 5. Assumption of Warrant. If at any time, while this Warrant, or any portion thereof, is outstanding and unexpired there shall be (i) an acquisition of the Company by another entity by means of a merger, consolidation, or other transaction or series of related transactions resulting in the exchange of the outstanding shares of the Company's capital stock such that shareholders of the Company prior to such transaction own, directly or indirectly, less than 50% of the voting power of the surviving entity, or (ii) a sale or transfer of all or substantially all of the Company's assets to any other person, then, as a part of such acquisition, sale or transfer, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares of stock or other securities or property of the successor corporation resulting from such acquisition, sale or transfer which a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such acquisition, sale or transfer if this Warrant had been exercised immediately before such acquisition, sale or transfer, all subject to further adjustment as provided in this Section 5; and, in any such case, appropriate adjustment (as determined by the Company's Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth herein (including provisions with respect to changes in and other adjustments of the number of Shares the Holder is entitled to purchase) shall thereafter be applicable, as nearly as possible, in relation to any shares of common stock or other securities or other property thereafter deliverable upon the exercise of this Warrant. 6. Certificates for Shares. Upon the exercise of the purchase rights evidenced by this Warrant, one or more certificates for the number of Shares so purchased shall be issued as soon as practicable thereafter (with appropriate restrictive legends, if applicable), and in any event within thirty (30) days of the delivery of the Notice of Exercise. 2 7. Issuance of Shares. The Company covenants that the Shares, when issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens, and charges with respect to the issuance thereof. 8. Adjustment of Exercise Price and Number of Shares. The number of and kind of securities purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows: (a) Subdivisions, Combinations and Other Issuances. If the Company shall at any time prior to the expiration of this Warrant subdivide its Common Stock, by split-up or otherwise, or combine its Common Stock, or issue additional shares of its Common Stock or Common Stock as a dividend with respect to any shares of its Common Stock, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the purchase price payable per share, but the aggregate purchase price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 8(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend. (b) Reclassification, Reorganization and Consolidation. In case of any reclassification, capital reorganization, or change in the Common Stock of the Company (other than as a result of a subdivision, combination, or stock dividend provided for in Section 8(a) above), then, as a condition of such reclassification, reorganization, or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable in connection with such reclassification, reorganization, or change by a holder of the same number of shares of Common Stock as were purchasable by the Holder immediately prior to such reclassification, reorganization, or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof, and appropriate adjustments shall be made to the purchase price per share payable hereunder, provided the aggregate purchase price shall remain the same. (c) Notice of Adjustment. When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the Warrant, or in the Exercise Price, the Company shall promptly notify the Holder of such event and of the number of shares of Common Stock or other securities or property thereafter purchasable upon exercise of this Warrant. 9. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional 3 shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect. 10. No Shareholder Rights. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a shareholder with respect to the Shares, including (without limitation) the right to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of shareholder meetings, and such holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company. However, nothing in this Section 10 shall limit the right of the Holder to be provided the notices required under this Warrant or the Purchase Agreement. 11. Transfers of Warrant. Subject to compliance with applicable federal and state securities laws, this Warrant and all rights hereunder are transferable in whole or in part by the Holder to any person or entity upon written notice to the Company. The transfer shall be recorded on the books of the Company upon the surrender of this Warrant, properly endorsed, to the Company at its principal offices, and the payment to the Company of all transfer taxes and other governmental charges imposed on such transfer. In the event of a partial transfer, the Company shall issue to the Holders one or more appropriate new warrants. 12. Successors and Assigns. The terms and provisions of this Warrant and the Purchase Agreement shall inure to the benefit of, and be binding upon, the Company and the Holders hereof and their respective successors and assigns. 13. Amendments and Waivers. Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder. 14. Notices. All notices required under this Warrant and shall be deemed to have been given or made for all purposes (i) upon personal delivery, (ii) upon confirmation receipt that the communication was successfully sent to the applicable number if sent by facsimile; (iii) one day after being sent, when sent by professional overnight courier service, or (iv) five days after posting when sent by registered or certified mail. Notices to the Company shall be sent to the principal office of the Company (or at such other place as the Company shall notify the Holder hereof in writing). Notices to the Holder shall be sent to the address of the Holder on the books of the Company (or at such other place as the Holder shall notify the Company hereof in writing). 15. Attorneys' Fees. If any action of law or equity is necessary to enforce or interpret the terms of this Warrant, the prevailing party shall be entitled to its reasonable attorneys' fees, costs and disbursements in addition to any other relief to which it may be entitled. 16. Captions. The section and subsection headings of this Warrant are inserted for convenience only and shall not constitute a part of this Warrant in construing or interpreting any provision hereof. 4 17. Governing Law. This Warrant shall be governed by the laws of the State of California as applied to agreements among California residents made and to be performed entirely within the State of California. [remainder of page intentionally left blank] 5 IN WITNESS WHEREOF, Digital Generation Systems, Inc. caused this Warrant to be executed by an officer thereunto duly authorized. DIGITAL GENERATION SYSTEMS, INC. By: /s/ HENRY W. DONALDSON ----------------------------------------- Henry W. Donaldson, President and Chief Executive Officer SIGNATURE PAGE TO WARRANT TO PURCHASE COMMON STOCK OF DIGITAL GENERATION SYSTEMS, INC. NOTICE OF EXERCISE To: DIGITAL GENERATION SYSTEMS, INC. The undersigned hereby elects to purchase ______________________ shares of Common Stock of Digital Generation Systems, Inc., pursuant to the terms of the attached Warrant and payment of the Exercise Price per share required under such Warrant accompanies this notice. The undersigned hereby represents and warrants that the undersigned is acquiring such shares for its own account for investment purposes only, and not with a view to distribution of such shares or any part thereof. WARRANTHOLDER: ___________________________________ By: ________________________________ Address: ___________________________________ ___________________________________ Date: _____________________ Name in which shares should be registered: __________________________________________ EX-99.(F) 7 f80017d2ex99-f.txt EXHIBIT F EXHIBIT F JOINT FILING AGREEMENT In accordance with Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with all other Reporting Persons (as such term is defined in the Schedule 13D referred to below) on behalf of each of them of a statement on Schedule 13D(including amendments thereto) with respect to the common stock, par value $0.01 per share, of Digital Generation Systems, a Delaware corporation, and that this Agreement may be included as an exhibit to such joint filing. This Joint Filing Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of the 21 day of March, 2002. TECHNOLOGY CROSSOVER VENTURES, L.P., a Delaware Limited Partnership By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory TECHNOLOGY CROSSOVER VENTURES, C.V., a Netherlands Antilles Limited Partnership By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory TECHNOLOGY CROSSOVER MANAGEMENT, L.L.C., a Delaware Limited Liability Company By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory TECHNOLOGY CROSSOVER VENTURES II, L.P., a Delaware Limited Partnership By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory TCV II (Q), L.P., a Delaware Limited Partnership By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory TCV II STRATEGIC PARTNERS, L.P., a Delaware Limited Partnership By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory TECHNOLOGY CROSSOVER VENTURES II, C.V., a Netherlands Antilles Limited Partnership By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory TCV II, V.O.F., a Netherlands Antilles General Partnership By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory TECHNOLOGY CROSSOVER MANAGEMENT II, L.L.C., a Delaware Limited Liability Company By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory JAY C. HOAG By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory RICHARD H. KIMBALL By: /s/ Carla S. Newell ----------------------------------------- Carla S. Newell, Authorized Signatory -----END PRIVACY-ENHANCED MESSAGE-----