<PAGE>
As filed with the Securities and Exchange Commission on July 17, 2000
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
---------------
DIGITAL ISLAND, INC.
(Exact name of registrant as specified in its charter)
---------------
Delaware 68-0322824
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
---------------
45 Fremont Street, 12th Floor
San Francisco, California 94105
(415) 738-4100
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
---------------
T.L. Thompson
Chief Financial Officer
Digital Island, Inc.
45 Fremont Street, 12th Floor
San Francisco, California 94105
(415) 738-4100
(Name and address, including zip code, and telephone number, including area
code, of agent for service)
---------------
Copy to:
Curtis L. Mo, Esq.
Anthony S. Wang, Esq.
Joseph K. Wyatt, Esq.
Brobeck, Phleger & Harrison LLP
Two Embarcadero Place
2200 Geng Road
Palo Alto, California 94303
(650) 424-0160
---------------
Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [_]
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Offering Price Per Aggregate Offering Amount of
Securities to be Registered Amount to Be Registered Share(1) Price(1) Registration Fee
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.001
per share 920,423 $40.00 $36,816,920 $9,719.67
==================================================================================================================================
</TABLE>
(1) The price of $40.00 was the average of the high and low prices of the
Common Stock on the Nasdaq National Market System on July 11, 2000, and is
set forth solely for the purpose of computing the registration fee pursuant to
Rule 457(c).
---------------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment that specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
The information contained in this preliminary prospectus is not complete and may
not be changed. These securities may not be sold until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell nor does it seek an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JULY 17, 2000
PRELIMINARY PROSPECTUS
920,423 Shares
DIGITAL ISLAND, INC.
Common Stock
This prospectus relates to the public offering, which is not being
underwritten, of 920,423 shares of our Common Stock, which are held by
some of our current stockholders.
The prices at which such stockholders may sell the shares will be
determined by the prevailing market price for the shares or in negotiated
transactions. We will not receive any of the proceeds from the sale of the
shares.
Our Common Stock is quoted on the Nasdaq National Market under the symbol
"ISLD." On July 11, 2000, the average of the high and low price for the
Common Stock was $40.00.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE THE SECTIONS ENTITLED
"RISK FACTORS" IN THE DOCUMENTS WE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION THAT ARE INCORPORATED BY REFERENCE IN THIS PROSPECTUS FOR CERTAIN
RISKS AND UNCERTAINTIES THAT YOU SHOULD CONSIDER.
-------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
-------------------------------
================================================================================
The date of this prospectus is July __, 2000
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained in this prospectus in connection with
the offering made hereby, and if given or made, such information or
representations must not be relied upon as having been authorized by Digital
Island, Inc. (referred to in this prospectus as "Digital Island" or the
"Registrant"), any Selling Stockholder (as defined below) or by any other
person. Neither the delivery of this prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that information herein
is correct as of any time subsequent to the date hereof. This prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any
security other than the securities covered by this prospectus, nor does it
constitute an offer to or solicitation of any person in any jurisdiction in
which such offer or solicitation may not lawfully be made.
AVAILABLE INFORMATION
Digital Island is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements, information statements and
other information with the Securities and Exchange Commission (the "SEC"). You
may read and copy any document that we file at the SEC's Public Reference Room
at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-
SEC-0330 for further information on the operation of the Public Reference Room.
Our SEC filings are also available to the public from the SEC's web site at
http://www.sec.gov
Digital Island has filed with the Commission a registration statement
on Form S-3 (herein, together with all amendments and exhibits thereto, referred
to as the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act") with respect to the Common Stock offered hereby. This
prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission.
The SEC allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is
considered to be part of the prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Section
13a, 13(c), 14, or 15(d) of the Exchange Act until our offering is completed.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 1-11921)
pursuant to the Exchange Act are incorporated herein by reference:
1. Digital Island's Annual Report on Form 10-K for the year ended
September 30, 1999, filed on December 28, 1999;
2. Digital Island's Quarterly Report on Form 10-Q for the quarter
ended December 31, 1999, filed on February 11, 2000 (as amended by Form 10-Q/A
as filed on February 22, 2000);
3. Definitive Proxy Statement, dated March 21, 2000, filed on March
21, 2000 in connection with Digital Island's 2000 Annual Meeting of
Stockholders;
4. Digital Island's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2000, filed on May 15, 2000;
5. The description of Digital Island's Common Stock, $0.001 par
value per share, and associated rights, contained in its registration statement
on Form 8-A, filed on June 7, 1999, including any amendment or report filed for
the purpose of updating such description;
6. Digital Island's Current Report on Form 8-K filed October 27,
1999;
7. Digital Island's Current Report on Form 8-K filed on December 9,
1999;
8. Digital Island's Current Report on Form 8-K filed on January 5,
2000;
9. Digital Island's Current Report on Form 8-K filed on July 6,
2000; and
1
<PAGE>
10. All reports and other documents filed by Digital Island pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this prospectus and prior to the termination of the offering.
Any statement contained in a document incorporated by reference herein
shall be deemed to be incorporated by reference in this prospectus and to be
part hereof from the date of filing of such documents. Any statement modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus. You should not assume that the information
in this prospectus or any prospectus supplement is accurate as of any date other
than the date on the front of the document. Digital Island will provide without
charge to each person to whom this prospectus is delivered a copy of any or all
of such documents which are incorporated herein by reference (other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference into the documents that this prospectus incorporates). Written
requests for copies should be directed to Digital Island, Inc., Investor
Relations, 45 Fremont Street, 12th Floor, San Francisco, California 94105.
Digital Island's telephone number is (650) 738-4100.
THE COMPANY
The principal executive offices of Digital Island are located at 45
Fremont Street, 12th Floor, San Francisco, California 94105. Digital Island's
telephone number is (415) 738-4100.
PLAN OF DISTRIBUTION
Digital Island, Inc. is registering 920,423 shares of Common Stock,
par value of $0.001 per share, on behalf of certain selling stockholders.
Digital Island will receive no proceeds from this offering. The Shares (as
defined below) may be offered by certain stockholders of Digital Island or by
pledgees, donees, transferees or other successors in interest that receive such
Shares as a gift, partnership distribution or other non-sale related transfer
(the "Selling Stockholders"). 799,989 of the Shares (the "LOL Shares") were
originally issued by Digital Island in connection with the merger of Live On
Line, Inc. ("LOL"), a New York corporation, with LOL Acquisition, Corp. ("LOL
Acquisition"), a wholly-owned subsidiary of Digital Island, with LOL being the
surviving corporation (the "Merger"). The LOL Shares are being registered by
Digital Island pursuant to the Agreement and Plan of Merger, dated as of January
18, 2000, by and among the Digital Island, LOL Acquisition, LOL and certain of
the stockholders of LOL (the "Agreement and Plan of Merger"). The remaining
120,434 Shares (the "SRI Shares", and together with the LOL Shares, the
"Shares") were originally issued by Digital Island in connection with the
Technology Purchase Agreement and Research Alliance between SRI International, a
California nonprofit public benefit corporation and Digital Island (the
"Technology Purchase Agreement"). The SRI Shares are being registered by Digital
Island pursuant to the Technology Purchase Agreement. The Shares were issued
pursuant to exemptions from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act"), provided by Section 4(2) thereof.
The Selling Stockholders will act independently of Digital Island in
making decisions with respect to the timing, manner and size of each sale. The
sales may be made on one or more exchanges or in the over-the-counter market or
otherwise, at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. The Selling
Stockholders may effect such transactions by selling the Shares to or through
broker-dealers. The Shares may be sold by one or more, or a combination of, the
following: (a) a block trade in which the broker-dealer so engaged will attempt
to sell the Shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction; (b) purchases by a broker-dealer as
principal and resale by such broker-dealer for its account pursuant to this
prospectus; (c) an exchange distribution in accordance with the rules of such
exchange; (d) ordinary brokerage transactions and transactions in which the
broker solicits purchasers and (e) in privately negotiated transactions. To the
extent required, this prospectus may be amended or supplemented from time to
time to describe a specific plan of distribution. In effecting sales, broker-
dealers engaged by the Selling Stockholders may arrange for other broker-dealers
to participate in the resales.
In connection with distributions of the Shares or otherwise, the
Selling Stockholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the Shares in the course of hedging the positions they assume with Selling
Stockholders. The Selling Stockholders may also sell Shares short and redeliver
the Shares to close out such short positions. The Selling Stockholders may also
enter into option or other transactions with broker-dealers which require the
delivery to the broker-dealer of the Shares registered hereunder, which the
broker-dealer may resell or otherwise transfer pursuant to this prospectus. The
Selling Stockholder may also loan or pledge the Shares registered hereunder to a
broker-dealer and the broker-dealer may sell the Shares so loaned or upon a
default the broker-dealer may effect sales of the pledged shares pursuant to
this prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Stockholders and/or the
purchasers of the Shares for whom such broker-dealers may act as agents or to
whom they sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions) in amounts to be
negotiated in connection with the sale. Such broker-dealers or agents and any
other participating broker-dealers or the Selling Stockholders may be deemed to
be "underwriters" within the meaning of Section 2(11) of the Securities Act in
connection with such sales and any such commission, discount or concession may
be deemed to be underwriting discounts or commissions under the Securities Act.
Because the Selling Stockholder may be deemed to be an underwriter within the
meaning of Section 2(11) of the Securities Act, the Selling Stockholders will be
subject to the prospectus delivery requirements of the Securities Act. In
addition, any securities covered by this prospectus which qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this
prospectus. The Selling Stockholders have advised Digital Island that they
2
<PAGE>
have not entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities. There is
no underwriter or coordinating broker acting in connection with the proposed
sale of the Shares by Selling Stockholders.
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the Shares may not simultaneously engage
in market making activities with respect to our common stock for a period of two
business days prior to the commencement of such distribution. In addition and
without limiting the foregoing, each Selling Stockholder will be subject to
applicable provisions of the Exchange Act and the associated rules and
regulations thereunder, including, without limitation, Regulation M, which
provisions may limit the timing of purchases and sales of shares of our common
stock by the Selling Stockholders. Digital Island will make copies of this
prospectus available to the Selling Stockholders and has informed them of the
need for delivery of copies of this prospectus to purchasers at or prior to the
time of any sale of the Shares offered hereby. Digital Island assumes no
obligation to so deliver copies of this prospectus or any related prospectus
supplement.
Digital Island will file a supplement to this prospectus, if required,
pursuant to Rule 424(b) under the Securities Act upon being notified by a
Selling Stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a broker or
dealer. Such supplement will disclose: (a) the name of each such Selling
Stockholder and of the participating broker-dealer(s), (b) the number of shares
involved, (c) the price at which such shares were sold, (d) the commissions paid
or discounts or concessions allowed to such broker-dealer(s), where applicable,
(e) that such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus and (f)
other facts material to the transaction.
The Selling Stockholders will be responsible for any fees,
disbursements and expenses of any counsel for the Selling Stockholders. All
other expenses incurred in connection with the registration of the Shares,
including printer's and accounting fees and the fees, disbursements and expenses
of counsel for Digital Island will be borne by us. Commissions and discounts, if
any, attributable to the sales of the Shares will be borne by the Selling
Stockholders. The Selling Stockholders may agree to indemnify any broker-dealer
or agent that participates in transactions involving sales of the Shares against
certain liabilities, including liabilities arising under the Securities Act.
Digital Island will indemnify the Selling Stockholders against claims arising
out of any untrue statement of a material fact contained in this Registration
Statement or any omission to state therein a material fact necessary in order to
make the statement made therein not misleading.
Digital Island has undertaken to keep a Registration Statement of
which this prospectus constitutes a part effective until the earlier of the
disposition of the securities offered hereby or January 18, 2001. After such
period, if we choose not to maintain the effectiveness of the registration
statement of which this prospectus constitutes a part, the securities issuable
offered hereby may not be sold, pledged, transferred or assigned, except in a
transaction which is exempt under the provisions of the Securities Act or
pursuant to an effective registration statement thereunder.
3
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the number of shares of common stock
owned by each of the Selling Stockholders and the percentage of the total
outstanding shares of Digital Island owned by each Selling Stockholder as of
June 30, 2000. None of the Selling Stockholders has had a material
relationship with Digital Island within the past three years other than as a
result of the ownership of the Shares or other securities of Digital Island or
as a result of their employment with Digital Island as of the date of the
closing of the acquisition. Because the Selling Stockholders may offer all or
some of the Shares which they hold pursuant to the offering contemplated by
this prospectus, and because there are currently no agreements, arrangements
or understandings with respect to the sale of any of the Shares, no estimate
can be given as to the amount of the Shares that will be held by the Selling
Stockholders after completion of this offering. No Selling Stockholder
beneficially owns 1% or more of the outstanding shares of common stock of
Digital Island. The Shares offered by this prospectus may be offered from time
to time by the Selling Stockholders named below.
<TABLE>
<CAPTION>
Number of Shares
Number of Shares Percent of Registered for Sale
Name of Selling Stockholder Beneficially Owned Outstanding Shares Hereby (1)
--------------------------- ------------------ ------------------ --------------------
<S> <C> <C> <C>
Adam Cohen 295,340 * 295,340
Michael Fiorentino 7,731 * 7,731
Debra LaChance 310,030 * 310,030
Alan G. Schatten 42,522 * 42,522
Victor Starsia 77,314 * 77,314
Jennifer Sultan 40,203 * 40,203
SRI International 120,434 * 120,434
Veronis, Suhler & Associates, Inc. 25,053 * 25,053
Beverly Westle 1,796 * 1,796
-------------------------------------------------------------------
TOTAL 920,423 1.3% 920,423
--------------
</TABLE>
* Represents beneficial ownership of less than one percent.
(1) This Registration Statement shall also cover any additional shares of
common stock which become issuable in connection with the shares registered for
sale hereby by reason of any stock dividend, stock split, recapitalization or
other similar transaction effected without the receipt of consideration which
results in an increase in the number of the Digital Island's outstanding shares
of common stock.
4
<PAGE>
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
Digital Island by Brobeck, Phleger & Harrison LLP, Palo Alto, California.
EXPERTS
The consolidated financial statements of Digital Island, Inc. and its
subsidiaries, incorporated in this prospectus by reference to Digital Island,
Inc.'s Annual Report on Form 10-K for the year ended September 30, 1999, have
been incorporated in reliance upon the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
accounting and auditing.
The consolidated financial statements of Sandpiper Networks, Inc. at
December 31, 1998 and 1997, and for each of the two years in the period ended
December 31, 1998, incorporated by reference in this Prospectus and
Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon, and are incorporated by
reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
5
<PAGE>
We have not authorized any person to make a statement that differs
from what is in this prospectus. If any person does make a statement that
differs from what is in this prospectus, you should not rely on it. This
prospectus is not an offer to sell, nor is it seeking an offer to buy, these
securities in any state in which the offer or sale is not permitted. The
information in this prospectus is complete and accurate as of its date, but the
information may change after that date.
-------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information........................................ 1
Incorporation of Certain Documents by Reference.............. 1
The Company.................................................. 2
Plan of Distribution......................................... 2
Selling Stockholders......................................... 4
Legal Matters................................................ 5
Experts...................................................... 5
</TABLE>
DIGITAL ISLAND, INC.
920,423 Shares
of Common Stock
---------------------------------------------------------
Prospectus
---------------------------------------------------------
July , 2000
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by Digital Island in connection
with the sale of Common Stock being registered. All amounts are estimates except
the SEC registration fee.
SEC Registration Fee $ 9,720
Legal Fees and Expenses $10,000*
Accounting Fees and Expenses $ 5,000*
Printing Fees $ 5,000*
Transfer Agent Fees $ 5,000*
Miscellaneous $10,000*
-------
Total $44,720
=======
* Estimated
Item 15. Indemnification of Directors and Officers
Subsection (a) of Section 145 of the Delaware General Corporation Law
(the "DGCL") empowers a corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect to any claim issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director
or officer of a corporation has been successful on the merits or otherwise in
the defense of any such action, suit or proceeding referred to in subsections
(a) and (b) of Section 145 or in the defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith; that the
indemnification provided for by Section 145 shall not be deemed exclusive of any
other rights which the indemnified party may be entitled; that indemnification
provided by Section 145 shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of such person's heirs,
executors and administrators; and empowers the corporation to purchase and
maintain insurance on behalf of a director or officer of the corporation against
any liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would have the
power to indemnify him against such liabilities under Section 145.
1
<PAGE>
Section 102(b)(7) of the DGCL provides that a certificate of
incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such provision
shall not eliminate or limit the liability of the director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL or (iv) for any
transaction from which the director derived an improper personal benefit.
Article VIII of the registrant's Amended and Restated Certificate of
Incorporation, as amended, provides that, to the fullest extent permitted by the
DGCL, as the same exists or as it may hereafter be amended, no director of the
registrant shall be personally liable to the registrant or its stockholders for
monetary damages for breach of fiduciary duty as a director. Article VII of the
registrant's Amended and Restated Bylaws further provides that the registrant
shall, to the maximum extent and in the manner permitted by the DGCL, indemnify
each of its directors and officers against expenses (including attorneys' fees),
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with any proceeding, arising by reason of the fact that such
person is or was an agent of the registrant. The registrant has entered into
indemnification agreements with each of its directors and executive officers.
The registrant maintains officers' and directors' liability insurance.
Item 16. Exhibits
2.1 Agreement and Plan of Merger, dated as of January 18, 2000, by and
among Digital Island, Inc., LOL Acquisition Corp., the Stockholders of
Live On Line, Inc. and Live On Line, Inc.
4.1 Registration Rights Agreement, dated as of January 18, 2000, by and
among Digital Island, Inc. and certain stockholders of Live On Line,
Inc.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of PricewaterhouseCooopers LLP, independent accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1
hereto).
23.3 Consent of Ernst & Young LLP, independent public auditors.
24.1 Power of Attorney (included on page II-4 of this Registration
Statement).
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) to include
any prospectus required by section 10(a)(3) of the Securities Act; (ii) to
reflect in the prospectus any facts or events arising after the effective date
of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement; and (iii) to include
any material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
2
<PAGE>
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3, and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Francisco, State of California on
this 14th day of July 2000.
DIGITAL ISLAND, INC.
By: /s/ Ruann F. Ernst
------------------
Ruann F. Ernst
Chairman of the Board and Chief
Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of Digital Island, Inc., a
Delaware corporation, do hereby constitute and appoint Ruann F. Ernst and T.L.
Thompson, and each one of them, the lawful attorneys-in-fact and agents with
full power and authority to do any and all acts and things and to execute any
and all instruments which said attorneys and agents, and any one of them,
determine may be necessary or advisable or required to enable said corporation
to comply with the Securities Act of 1933, as amended, and any rules or
regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, or any one of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Ruann F. Ernst Chairman of the Board and Chief Executive July 17, 2000
--------------------------
Ruann F. Ernst Officer (Principal Executive Officer)
/s/ T.L. Thompson Chief Financial Officer (Principal July 17, 2000
--------------------------
T.L. Thompson Financial and Accounting Officer)
</TABLE>
4
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Leo S. Spiegel
--------------------------
Leo S. Spiegel President and Director July 17, 2000
/s/ Charlie Bass
--------------------------
Charlie Bass Director July 17, 2000
/s/ Christos Cotsakos
--------------------------
Christos Cotsakos Director July 17, 2000
/s/ Marcelo A. Gumucio
--------------------------
Marcelo A. Gumucio Director July 17, 2000
/s/ G. Bradford Jones
--------------------------
G. Bradford Jones Director July 17, 2000
/s/ Shahan Soghikian
--------------------------
Shahan Soghikian Director July 17, 2000
</TABLE>
5
<PAGE>
Index to Exhibits
-----------------
Exhibit
Number Exhibit Title
-------------
2.1 Agreement and Plan of Merger, dated as of January 18, 2000, by and
among Digital Island, Inc., LOL Acquisition Corp, the stockholders
of Live On Line, Inc. and Live On Line, Inc.
4.1 Registration Rights Agreement, dated as of January 18, 2000, by and
among Digital Island, Inc. and certain stockholders of Live On
Line, Inc.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of PricewaterhouseCoopers LLP, independent accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1
hereto).
23.3 Consent of Ernst & Young LLP, independent public auditors.
24.1 Power of Attorney (included on page II-4 of this Registration
Statement).
