DIGITAL LAVA INC
DEFA14A, 2000-06-15
COMPUTER PROGRAMMING SERVICES
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<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  SCHEDULE 14A
                                 (RULE 14A-101)

                     INFORMATION REQUIRED IN PROXY STATEMENT

                            SCHEDULE 14A INFORMATION
                PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
                SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )

     Filed by the Registrant /X/
     Filed by a Party other than the Registrant / /

     Check the appropriate box:

     / /  Preliminary Proxy Statement           / /  Confidential, For Use of
     / /  Definitive Proxy Statement                 the Commission Only (as
     /X/  Definitive Additional Materials            permitted by
     / /  Soliciting Material Pursuant to            Rule 14a-6(e)(2))
          Rule 14a-11(c) Rule 14a-12

                                  DIGITAL LAVA INC.
--------------------------------------------------------------------------------
                   (Name of Registrant as Specified In Its Charter)

--------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

     /X/  No fee required.
     / /  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
          0-11.
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     (1)  Title of each class of securities to which transaction applies:

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     (2)  Aggregate number of securities to which transaction applies:

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     (3)  Per unit price or other underlying value of transaction computed
          pursuant to Exchange Act Rule 0-11 (set forth the amount on which
          the filing fee is calculated and state how it was determined):

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     (4)  Proposed maximum aggregate value of transaction:

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     (5)  Total fee paid:

     / /  Fee paid previously with preliminary materials:

     / /  Check box if any part of the fee is offset as provided by Exchange Act
          Rule 0-11(a)(2) and identify the filing for which the offsetting fee
          was paid previously. Identify the previous filing by registration
          statement number, or the form or schedule and the date of its filing.

          (1) Amount previously paid:

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          (2) Form, Schedule or Registration Statement No.:

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          (3) Filing Party:

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          (4) Date Filed:

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<PAGE>

                                DIGITAL LAVA INC.
                          13160 Mindanao Way, Suite 350
                        Marina Del Rey, California 90292

                                  June 15, 2000

To our Stockholders:

     You are cordially invited to the Annual Meeting of Stockholders (the
"Annual Meeting") of Digital Lava Inc. to be held at the Marina del Rey Hotel,
13534 Bali Way, Marina Del Rey, California 90292 on July 24, 2000 at 3:00 p.m.
local time.

     We had originally scheduled the Annual Meeting for May 31, 2000 and
furnished a proxy statement dated April 28, 2000 (the "Proxy Statement")
describing two matters to be acted upon at that meeting. We postponed the Annual
Meeting to July 24, 2000 to permit you to consider one additional proposal.

     The revised Notice of Annual Meeting and a Supplement to the Proxy
Statement describing the matters to be acted upon at the Annual Meeting
(including the new proposal) are contained in the following pages. You should
read the Supplement together with the enclosed Proxy Statement. Stockholders
also are entitled to vote on any other matters which properly come before the
meeting.

     If you were a stockholder at the close of business on June 14, 2000, you
may vote at the Annual Meeting.

     Enclosed is a revised proxy card which will enable you to vote your shares
on the matters to be considered at the Annual Meeting, including the new
proposal. Whether or not you intend to attend the Annual Meeting in person, you
are requested to complete, sign, date and promptly return the enclosed proxy in
the accompanying postage-paid envelope. The prompt return of your proxy will
save expenses involved in further communication.

     WHETHER YOU OWN FEW OR MANY SHARES OF STOCK, PLEASE BE SURE YOU ARE
REPRESENTED AT THE MEETING EITHER BY ATTENDING IN PERSON OR BY RETURNING YOUR
PROXY AS SOON AS POSSIBLE.

                                   Sincerely,


                                   /S/ DANNY GAMPE
                                   ---------------------------------------------
                                   Danny Gampe,
                                   Chief Financial Officer and Secretary


<PAGE>

                                DIGITAL LAVA INC.
                               13160 Mindanao Way
                                    Suite 350
                        Marina del Rey, California 90292

                                 --------------

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

                                 --------------

     Our Annual Meeting of stockholders will be held at 3:00 p.m. on July 24,
2000 at the Marina del Rey Hotel, 13534 Bali Way, Marina Del Rey, California
90292 for the purposes of:

     (1)  electing four directors to hold office until the next annual meeting
          of stockholders and until their successors are duly elected and
          qualified;

     (2)  approving an amendment to the Digital Lava 1996 Incentive and
          Non-Qualified Stock Option Plan, as described in the attached Proxy
          Statement; and

     (3)  approving the potential issuance in a private placement of common
          stock of Digital Lava (and warrants exercisable for common stock)
          representing 20% or more of the number of issued and outstanding
          shares of such common stock, as described in the attached Supplement
          to Proxy Statement.

     We may also transact such other business as may properly come before the
Annual Meeting or any adjournment of the Annual Meeting.

     Our board of directors has fixed the close of business on June 14, 2000 as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the Annual Meeting.

     If you do not expect to be personally present at the meeting, but wish your
stock to be voted for the business to be transacted at the meeting, our board of
directors requests that you fill in, sign and date the enclosed proxy and
promptly return it by mail in the postage paid envelope provided.

                                   By order of the Board of Directors,


                                   /S/ DANNY GAMPE
                                   ---------------------------------------------
                                   Danny Gampe
                                   Secretary

June 15, 2000

PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND PROMPTLY RETURN IT IN THE
ENVELOPE PROVIDED. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.


<PAGE>

                                DIGITAL LAVA INC.
                          13160 Mindanao Way, Suite 350
                        Marina Del Rey, California 90292

                                 --------------

                          SUPPLEMENT TO PROXY STATEMENT
                       FOR ANNUAL MEETING OF STOCKHOLDERS
                            TO BE HELD JULY 24, 2000

     The following information supplements and amends the Notice of Annual
Meeting and Proxy Statement (the "Proxy Statement"), each dated April 28, 2000,
furnished in connection with the solicitation of proxies by the Board of
Directors of Digital Lava Inc. for use at its Annual Meeting of Stockholders.
The Annual Meeting will be held on July 24, 2000, at 3:00 p.m. (local time), at
the Marina del Rey Hotel, 13534 Bali Way, Marina Del Rey, California 90292, and
at any adjournment of such meeting. The purpose of this Supplement is to provide
you with information about an additional proposal (Proposal 3) to be considered
at the Annual Meeting and to supplement and amend information provided to you in
the Proxy Statement. Information in this Supplement that is in addition to or
inconsistent with information contained in the Proxy Statement supercedes the
information contained in the Proxy Statement. YOU SHOULD READ THE INFORMATION
CONTAINED IN THIS SUPPLEMENT IN CONJUNCTION WITH THE PROXY STATEMENT.

SOLICITATION OF PROXIES

     Our Board of Directors is soliciting your proxy to vote on your behalf at
the Annual Meeting. Only stockholders of record as of the close of business on
June 14, 2000 will be entitled to notice of, and to vote at, the Annual Meeting.
Our Board of Directors is first sending this Supplement and the accompanying
form of proxy to our stockholders on or about June 27, 2000.

     We will pay all expenses incurred in this proxy solicitation. We have hired
Beacon Hill Partners to assist us in soliciting proxies for a fee which we
anticipate will not exceed $25,000. We also may make additional solicitations by
telephone, facsimile, e-mail, or other forms of communication. Brokers, banks
and others who hold our stock for beneficial owners will be reimbursed by us for
their expenses related to forwarding our proxy materials to the beneficial
owners.

INFORMATION ABOUT VOTING

     You may be a stockholder "of record" or you may hold your shares in "street
name." Holding shares "of record" means your shares are registered in your name
directly with Digital Lava and that the stock certificates are issued in your
own name and not in street name. Holding shares in "street name" means your
shares are held in an account through your broker, bank, fiduciary, custodian or
other nominee, and you are considered the beneficial owner of such shares.

     If you are a stockholder of record as of June 14, 2000, you may vote your
shares:

      o  By Proxy:  You may vote by completing, signing and dating the enclosed
                    proxy card and returning it to us by mail. The instructions
                    for voting are contained on the enclosed proxy card. The
                    individuals named on the card, your "proxies," will vote
                    your shares as you indicate. If you sign your card without
                    indicating how you wish to vote, all of your shares will be
                    voted FOR the approval of all matters indicated in the
                    meeting notice, and, in the discretion of your proxy, on any
                    other matter that may be properly brought before the
                    meeting.

      o  In Person: You may attend the Annual Meeting and vote in person.

     If you hold your shares in street name, you will provide voting
instructions on cards you will receive from your broker, bank or other nominee.
If you wish to vote in person by ballot at the Annual Meeting, you must request
a written proxy from your broker, bank or other nominee and deliver the proxy to
the inspector of election before or at the Annual Meeting.


                                       1
<PAGE>

     If you have any questions about this Supplement or how to complete and
return your new proxy card, you should call Digital Lava's proxy solicitor,
Beacon Hill Partners, at (212) 843-8500.

REVOCATION OF PROXIES

     You may revoke your proxy at any time before it is voted. Proxies may be
revoked by:

     o    filing with the Secretary of Digital Lava, at or before the taking of
          the vote at the Annual Meeting, a written notice of revocation bearing
          a later date than the proxy;

     o    duly executing a later-dated proxy and delivering it to the Secretary
          of Digital Lava before the taking of the vote at the Annual Meeting;
          or

     o    attending the Annual Meeting and voting in person, although attendance
          at the Annual Meeting will not in and of itself constitute a
          revocation of a proxy.

     Any written notice of revocation or subsequent proxy should be sent to
Digital Lava Inc., 13160 Mindanao Way, Suite 350, Marina del Rey, California
90292, Attention: Secretary, or hand delivered to the Secretary of Digital Lava
at or before the taking of the vote at the Annual Meeting. Stockholders that
have instructed a bank, broker or other nominee to vote their shares must follow
directions received from the bank, broker or nominee in order to change their
vote or to vote at the Annual Meeting.

VOTING RIGHTS AND RECORD DATE

     At the close of business on June 14, 2000, we had 4,680,073 shares of
common stock outstanding. Each stockholder entitled to vote at the Annual
Meeting may cast in person or by proxy one vote for each share of common stock
held by such stockholder. Therefore, the total number of votes entitled to be
cast at the Annual Meeting is 4,680,073. Only stockholders of record at the
close of business on June 14, 2000, will be entitled to vote.

QUORUM AND REQUIRED VOTE

     Holders of a majority of the outstanding shares of our common stock must be
present in person or by proxy in order for a quorum to be present at the Annual
Meeting.

     Shares that abstain from voting on any proposal will be treated as shares
that are present and entitled to vote at the Annual Meeting for purposes of
determining whether a quorum exists, but in all matters (other than the election
of directors) abstentions will have the same effect as votes against approval of
a proposal. Under the rules that govern brokers that have record ownership of
shares held in brokerage accounts for their clients, who are the beneficial
owners of the shares, brokers that do not receive voting instructions from their
clients have the discretion to vote uninstructed shares on routine matters, but
not on non-routine matters. The proposals to be acted upon at the Annual Meeting
include both routine matters such as the election of directors (Proposal 1), and
non-routine matters such as Proposal 2 and Proposal 3. On routine matters, a
broker may return a proxy card on behalf of a beneficial owner from whom the
broker has not received instructions that casts a vote for the routine matters,
but expressly states that the broker is not voting on the non-routine matters.
The broker's inability to vote with respect to the non-routine matters is
referred to as a "broker non-vote." Broker non-votes will be counted for the
purpose of determining the presence or absence of a quorum, but will not be
counted for determining the number of votes cast on non-routine matters, such as
Proposal 2 and Proposal 3.

     The following describes the required vote for each of the proposals to be
acted upon at the Annual Meeting, assuming that a quorum is present:

     o    Proposal 1--Election of Directors. The four (4) nominees receiving the
          highest number of affirmative or "FOR" votes will be elected as
          directors.

     o    Proposal 2--Amendment to the Digital Lava 1996 Incentive and
          Non-Qualified Stock Option Plan. The approval of Proposal 2 will
          require the affirmative vote of a majority of the votes cast on the
          matter.

     o    Proposal 3--Approval of a potential private placement of shares of
          common stock. The approval of Proposal 3 will require the affirmative
          vote of a majority of the votes cast on the matter.


                                       2
<PAGE>

     The approval of any other matter properly brought before the Annual Meeting
will require the affirmative vote of a majority of the votes cast on such
matter.

                                   PROPOSAL 1:
                              ELECTION OF DIRECTORS

     As stated in the Proxy Statement, four (4) persons have been nominated for
election as directors at the Annual Meeting, to hold office until the next
annual meeting of stockholders and until their successors have been duly elected
and qualified. In accordance with our By-Laws, our board of directors has set
the number of directors which will constitute the whole board at four (4)
directors, effective as of the Annual Meeting. We plan to appoint a new director
to our board within the next six months, and will increase the size of the board
accordingly at such time. Please refer to the enclosed Proxy Statement for
information regarding the nominees for election as directors pursuant to
Proposal 1.

                                   PROPOSAL 2:
                  AMENDMENT TO THE DIGITAL LAVA 1996 INCENTIVE
                       AND NON-QUALIFIED STOCK OPTION PLAN

     Please refer to the enclosed Proxy Statement for a discussion of Proposal
2.

                                   PROPOSAL 3:
                     APPROVAL OF PRIVATE PLACEMENT OF SHARES

     We are seeking additional financing to fund our operations. As of
March 31, 2000, we had approximately $2.3 million of working capital and $1.6
million of cash and cash equivalents. Our board of directors has considered
various means of procuring additional financing and has determined that a
private offering of our common stock (the "Private Placement") would be in the
best interests of Digital Lava at the present time. We currently anticipate that
the Private Placement will consist of the sale of up to 2,500,000 shares of our
common stock and may include warrants to purchase shares of common stock. We
intend to use the net proceeds from the Private Placement (1) to increase our
sales force and marketing efforts, (2) for product development, and (3) for
working capital and general corporate purposes. Management has not budgeted
specific amounts for each of the foregoing purposes and will have broad
discretion in applying the net proceeds of the Private Placement. There can be
no assurance that we will be able to consummate the Private Placement and our
board of directors retains the discretion to determine not to proceed with the
Private Placement.

     The purchase price for the shares of common stock sold in the Private
Placement will be determined through negotiations between Digital Lava and the
investors, based upon the demand for our common stock and its trading prices on
the American Stock Exchange prior to the closing of the Private Placement and
other factors. Due to the fact that the shares sold in the Private Placement
will not be immediately freely tradable by the purchasers until a registration
statement registering those shares has been filed and becomes effective under
the Securities Act of 1933, we expect that the shares will be sold at a discount
from the closing price or prices of our common stock on the American Stock
Exchange prior to closing. We do not know the actual amount of such discount as
of the date of this Supplement, but we expect that it will be within a customary
range for offerings of restricted shares by public companies in similar
transactions. Our directors and executive officers will not be eligible to
purchase shares in the Private Placement.

     We expect to enter into a registration rights agreement with each of the
purchasers of shares in the Private Placement under which we will agree to
register those shares not later than 120 days after the closing of the Private
Placement. We will be obligated to issue additional shares to the purchasers if
we fail to register the shares within such 120-day period.

     We have engaged Sutro & Co. Incorporated ("Sutro") as placement agent in
connection with the Private Placement. As a portion of its compensation for
acting in such capacity, we have agreed to issue to Sutro, upon the closing of
the Private Placement, a warrant exercisable for shares of our common stock. We
have agreed that if the gross proceeds raised in the Private Placement are less
than $10 million, Sutro's warrant will be exercisable for 2 1/2% of the number
of shares of common stock issued in the Private Placement, and if the gross
proceeds in the Private Placement exceed $10 million, Sutro's warrant will be
exercisable for 5% of the number of shares of

                                       3

<PAGE>

common stock issued in the Private Placement, in each case at the same price per
share paid by investors in the Private Placement. A maximum of 125,000 shares
could be issued to Sutro under this warrant.

      As of March 31, 2000, we had 2,268,444 outstanding warrants with a
weighted average exercise price of $9.29 and 907,734 outstanding employee and
director stock options with a weighted average exercise price of $5.73. Because
of "anti-dilution" provisions contained in a substantial portion of the
outstanding warrants, the issuance of shares in the Private Placement will
increase the number of shares issuable upon exercise of such warrants and reduce
the exercise price. For example, as an illustration only, if Digital Lava were
to issue 2,500,000 shares in the Private Placement at a hypothetical offering
price of $5.00, the number of shares of common stock issuable upon exercise of
the outstanding warrants would increase by approximately 281,000 shares. The
exact extent of such share increase (and concurrent exercise price decrease)
will depend upon the number of shares actually issued in the Private Placement
and the price at which they are issued.

     Digital Lava's common stock is quoted on the American Stock Exchange.
Pursuant to Section 713 of the American Stock Exchange's listing standards,
policies and requirements ("Section 713"), we are required to obtain stockholder
approval in connection with any transaction, other than a public offering, that
involves the issuance by us of common stock (or securities convertible into
common stock) that equals 20% or more of our common stock outstanding before the
issuance of such securities at a price below market value (the "20%
Limitation"). As of the date of this Supplement, there were approximately
4,680,073 shares of our common stock outstanding. As described above, we expect
that shares will be sold in the Private Placement at a discount to market value.
Based on the recent trading prices of our common stock, we would need to exceed
the 20% Limitation in order to generate net proceeds from the Private Placement
sufficient to meet our expected capital requirements. Subject to stockholder
approval of this Proposal, our board of directors will be authorized to
determine all aspects of the Private Placement, including (i) whether to
consummate a Private Placement, (ii) the number of shares of common stock that
will be issued in connection with the Private Placement, (iii) the purchase
price of such shares of common stock and (iv) the terms and conditions of any
warrants which may be issued in connection with the Private Placement, including
Sutro's warrant.

     Our board of directors is seeking stockholder approval of the Private
Placement in order to comply with Section 713. If we fail to comply with Section
713, our common stock could be delisted from the American Stock Exchange. If we
fail to obtain approval by the stockholders for the Private Placement, our board
of directors will be limited to authorizing the sale of securities not in excess
of the 20% Limitation (presently approximately 936,000 shares). As a result, we
would be required to seek additional means of financing. However, we may not be
able to obtain such financing on a timely basis on commercially reasonable
terms, or at all. If we are unable to obtain such financing, our financial
condition and results of operations will be materially adversely affected.

     In order to maintain the listing of the common stock on the American Stock
Exchange, we must maintain a satisfactory financial condition and operating
results, and meet other standards with respect to stockholders equity, net
losses and the aggregate market value of our shares. While we currently satisfy
the American Stock Exchange listing and maintenance standards, if we are unable
to obtain additional financing either through the Private Placement or
otherwise, we may fail to meet these criteria in the future, which may result in
the common stock no longer being eligible for listing on the American Stock
Exchange. If our common stock is delisted from the American Stock Exchange,
there would be material adverse consequences for us and our stockholders. These
consequences include, but are not limited to:

     o    limited availability of market quotations for our common stock;

     o    limited news coverage of Digital Lava;

     o    an adverse affect on the trading market for and market price of our
          common stock; and

     o    an adverse affect on our ability to issue additional securities or
          secure additional financing in the future.

     THE BOARD OF DIRECTORS OF DIGITAL LAVA RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" PROPOSAL 3.

                                       4
<PAGE>

                         INDEPENDENT PUBLIC ACCOUNTANTS

     The Board of Directors has selected PricewaterhouseCoopers LLP to serve as
the independent public accountants of Digital Lava for fiscal 2000.
PricewaterhouseCoopers LLP also served in such capacity during fiscal 1999.
Representatives of PricewaterhouseCoopers LLP are expected to be present at the
Annual Meeting, will have the opportunity to make a statement if they desire to
do so and will be available to respond to appropriate questions.

                   DEADLINE FOR FUTURE STOCKHOLDERS' PROPOSALS

     Proposals that a stockholder desires to have included in Digital Lava's
proxy materials for the 2001 Annual Meeting of Stockholders must comply with the
applicable rules and regulations of the Securities and Exchange Commission,
including that any such proposal must be received no later than December 31,
2000 by the Secretary of Digital Lava at Digital Lava, Inc., 13160 Mindanao Way,
Suite 350, Marina del Rey, California 90292.

     Unless a contrary advance notice provision is adopted by Digital Lava after
the date of this Supplement, Digital Lava will have discretionary authority to
vote proxies which it obtains in connection with the 2001 Annual Meeting of
Stockholders as to any matter of which it did not have notice by at least March
19, 2001.


                          ANNUAL REPORT ON FORM 10-KSB

     STOCKHOLDERS MAY OBTAIN, FREE OF CHARGE, A COPY OF OUR ANNUAL REPORT ON
FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, AND ANY AMENDMENTS OR
EXHIBITS THERETO, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BY
SENDING A WRITTEN REQUEST TO DIGITAL LAVA INC., 13160 MINDANAO WAY, SUITE 350,
MARINA DEL REY, CALIFORNIA 90292, ATTENTION: SECRETARY.

                                  OTHER MATTERS

     As of the date of this Supplement, management knows of no matters to be
presented at the Annual Meeting other than those described in this Supplement or
in the Proxy Statement. If any other matters properly come before the Annual
Meeting, the persons named in the enclosed form of proxy are expected to vote
the proxy in accordance with their best judgment on such matters.

                                   By order of the Board of Directors,


                                   /S/ DANNY GAMPE
                                   ---------------------------------------------
                                   Danny Gampe
                                   Secretary and Chief Financial Officer

June 15, 2000
Marina Del Rey, California


                                       5
<PAGE>

                             DIGITAL LAVA INC.                             PROXY


           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
           OF DIGITAL LAVA INC. FOR THE ANNUAL MEETING OF STOCKHOLDERS
                           TO BE HELD ON JULY 24, 2000

     The undersigned hereby appoints Robert Greene and Danny Gampe, and each of
them, as proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and vote, as designated on the reverse side, all of
the shares of the common stock of Digital Lava Inc. held of record by the
undersigned on June 14, 2000 at the Annual Meeting of Stockholders to be held on
July 24, 2000, at 3:00 p.m., local time, at the Marina del Rey Hotel, 13534 Bali
Way, Marina Del Rey, California 90292 and any adjournments of the Annual
Meeting.

1.   PROPOSAL 1--ELECTION OF DIRECTORS

<TABLE>
<CAPTION>

<S>                              <C>                          <C>
/ / FOR all nominees listed at   / / WITHHOLD AUTHORITY to    / /  NOMINEES:  Robert Greene
    right except as marked to        vote for all nominees                    Roger Berman
    the contrary                     listed at right                          John Carrington
                                                                              Michael Wheeler
</TABLE>

(INSTRUCTIONS: To withhold authority to vote for any of the individual nominees,
PRINT that person's name on the line below.)

--------------------------------------------------------------------------------

2.   PROPOSAL 2--AMENDMENT TO THE DIGITAL LAVA 1996 INCENTIVE AND NON-QUALIFIED
     STOCK OPTION PLAN

                / / FOR       / / AGAINST      / / ABSTAIN

3.   PROPOSAL 3--To approve the potential issuance in a private placement of
     common stock of Digital Lava (and warrants exercisable for common stock)
     representing 20% or more of the number of issued and outstanding shares of
     such common stock.

                / / FOR       / / AGAINST      / / ABSTAIN

     The shares of stock represented by this proxy will be voted as directed. If
no contrary instruction is given, the shares will be voted FOR the matters
indicated above. If any other business is properly presented at the Annual
Meeting, this proxy will be voted in accordance with the discretion of the
proxies named above. In matters other than the election of directors, an
abstention has the same effect as a vote against a proposal, whereas a broker
non-vote doesn't have any effect for purposes of determining whether a proposal
has been approved, as it is not considered to be a vote that has been cast.

     This proxy is revocable at any time, and the undersigned reserves the right
to attend the Annual Meeting and vote in person. The undersigned hereby revokes
any proxy previously given in respect of the shares of Digital Lava.

     THE BOARD OF DIRECTORS URGES THAT YOU FILL IN, SIGN AND DATE THIS PROXY AND
RETURN IT PROMPTLY BY MAIL IN THE ENCLOSED ENVELOPE. NO POSTAGE IS NECESSARY IF
MAILED IN THE UNITED STATES.

                                   DATED:                        , 2000
                                         ------------------------


                                   ---------------------------------------------
                                   (Signature)


                                   ---------------------------------------------
                                   (Signature if held jointly)

                                   Please date, sign as name appears at the
                                   left, and return promptly. If the shares are
                                   registered in the names of two or more
                                   persons, each should sign. When signing as
                                   Corporate Officer, President, Executor,
                                   Administrator, Trustee or Guardian, please
                                   give full title. Please note any changes in
                                   your address alongside the address as it
                                   appears in the proxy.



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