UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _____)*
Digital Generation Systems, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, no par value per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
25392 10 0
- --------------------------------------------------------------------------------
(CUSIP Number)
Gerald A. Poch, GE Capital Information Technology Solutions, Inc.
700 Canal Street, Stamford CT 06902
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
August 26, 1997
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(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 which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a 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).
Potential persons who are to respond to the collection of information contained
in this form are not required to respond unless the form displays a currently
valid OMR control number.
<PAGE>
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
GE Capital Information Technology Solutions, Inc.
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group
(a)
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(b)X
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3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds
OO
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
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6. Citizenship or Place of Organization
State of Delaware
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Number 7. Sole Voting Power 848,656
of Shares Bene- -----------------------------------------------------------
ficially by 8. Shared Voting Power None
Owned by -----------------------------------------------------------
Each Reporting 9. Sole Dispositive Power 848,656
Persons With -----------------------------------------------------------
10. Shared Dispositive Power None
-----------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each
Reporting Person
848,656
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
6.5%
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14. Type of Reporting Person
CO
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Page 2 of 49
<PAGE>
- --------------------------------------------------------------------------------
1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
General Electric Company
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2. Check the Appropriate Box if a Member of a Group
(a)
--------------------------------------------------------------------
(b)X
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3. SEC Use Only
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4. Source of Funds
Not applicable
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
X
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6. Citizenship or Place of Organization
State of New York
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- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power Disclaimed (see 11 below)
Shares Bene- -----------------------------------------------------------
ficially by 8. Shared Voting Power
Owned by -----------------------------------------------------------
Each Reporting 9. Sole Dispositive Power Disclaimed (see 11 below)
Persons With -----------------------------------------------------------
10. Shared Dispositive Power
-----------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each
Reporting Person
Beneficial ownership of all shares disclaimed by General
Electric Company
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
Not applicable (see 11 above)
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14. Type of Reporting Person
CO
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Page 3 of 49
<PAGE>
- --------------------------------------------------------------------------------
1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
General Electric Capital Corporation
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group
(a)
--------------------------------------------------------------------
(b)X
- --------------------------------------------------------------------------------
3. SEC Use Only
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4. Source of Funds
Not applicable
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
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6. Citizenship or Place of Organization
State of New York
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power Disclaimed (see 11 below)
Shares Bene- -----------------------------------------------------------
ficially by 8. Shared Voting Power
Owned by -----------------------------------------------------------
Each Reporting 9. Sole Dispositive Power Disclaimed (see 11 below)
Persons With -----------------------------------------------------------
10. Shared Dispositive Power
-----------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting
Person
Beneficial ownership of all shares disclaimed by General
Electric Capital Corporation
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
Not applicable (see 11 above)
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14. Type of Reporting Person
CO
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Page 4 of 49
<PAGE>
- --------------------------------------------------------------------------------
1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
General Electric Capital Services, Inc. (formerly known as
General Electric Financial Services, Inc.)
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2. Check the Appropriate Box if a Member of a Group
(a)
--------------------------------------------------------------------
(b)X
- --------------------------------------------------------------------------------
3. SEC Use Only
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4. Source of Funds
Not applicable
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
State of Delaware
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power Disclaimed (see 11 below)
Shares Bene- -----------------------------------------------------------
ficially by 8. Shared Voting Power
Owned by -----------------------------------------------------------
Each Reporting 9. Sole Dispositive Power Disclaimed (see 11 below)
Persons With -----------------------------------------------------------
10. Shared Dispositive Power
-----------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each
Reporting Person
Beneficial ownership of all shares disclaimed by General
Electric Capital Services, Inc.
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
Not applicable (see 11 above)
- --------------------------------------------------------------------------------
14. Type of Reporting Person
CO
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Page 5 of 49
<PAGE>
Item I. Security and Issuer.
This statement relates to the common stock, no par value per share
("Common Stock"), of Digital Generation Systems, Inc., a California corporation
(the "Issuer"), beneficially owned by GECITS (as defined below), through its
ownership of Series A Convertible Preferred Stock ("Preferred Stock") of the
Issuer convertible into Common Stock at the option of the holder. The Issuer's
principal executive offices are at 875 Battery Street, San Francisco, California
94111.
The entities identified in the first paragraph of the response to
Item 2 have entered into a Joint Filing Agreement, dated April 30, 1998, a copy
of which is attached hereto as Schedule I.
Item 2. Identity and Background.
This statement is filed by GE Capital Information Technology
Solutions, Inc., a Delaware corporation ("GECITS"), General Electric Capital
Corporation, a New York corporation ("GECC"), General Electric Capital Services,
Inc., a Delaware corporation ("GECS") and General Electric Company, a New York
corporation ("GE"). GECITS, GECC, GECS and GE each expressly disclaims that it
is a member of a "group". GECC, GECS and GE each expressly disclaims beneficial
ownership of all shares that may be deemed beneficially owned by GECITS. GECITS,
GECC, GECS and GE are sometimes referred to herein individually as a "Reporting
Person" and collectively as the "Reporting Persons".
GECITS is a Delaware corporation and a wholly owned subsidiary of
GECC. GECITS is a computer systems integrator with its principal offices located
at 700 Canal Street, Stamford, Connecticut 06902.
GECC is a New York corporation and a wholly owned subsidiary of GECS
and GECS is a wholly owned subsidiary of GE. GECC, together with its affiliates,
operates primarily in the financing industry and, to a lesser degree, in the
life insurance and property/casualty insurance industries and maintains its
principal executive offices at 260 Long Ridge Road, Stamford, Connecticut 06927.
GECS (formerly known as General Electric Financial Services, Inc.)
is a Delaware corporation with its principal executive offices located at 3003
Summer Street, Stamford, Connecticut 06905.
GE is a New York corporation with its principal executive officers
located at 3135 Easton Turnpike, Fairfield, Connecticut 06431. GE engages in
providing a wide variety of industrial, commercial and consumer products and
services. GE is a party to this filing solely because GECITS is an indirect
wholly owned subsidiary of GE.
For information with respect to the identity and principal
occupation of each (i) executive officer and director of GECITS, see Schedule II
attached hereto; (ii) executive officer and director of GECC, see Schedule III
attached hereto; (iii) executive officer and director of GECS, see Schedule IV
attached hereto; and (iv) executive officer and director of GE, see Schedule V
attached hereto.
Except as set forth below, during the last five years, neither any
Reporting Person nor, to the best knowledge of each Reporting Person, any person
identified in Schedules II, III, IV and V has (i) been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such a proceeding was or is subject to a
judgement, 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.
Her Majesty's Inspectorate of Pollution v. IGE Medical Systems
Limited (St. Albans Magistrates Court, St. Albans, Hersfordshire, England, Case
No. 04/00320181).
In April, 1994, General Electric Medical System's U.K. subsidiary,
IGE Medical Systems Limited ("IGEMS") discovered the loss of a radioactive
barium source at the Radlett, England, facility. The lost source, used to
calibrate nuclear camera detectors, emits a very low level of radiation. IGEMS
immediately reported the loss as required by the U.K. Radioactive Substances
Act. An ensuing investigation, conducted in cooperation with government
authorities, failed to locate the source. On July 21, 1994, Her Majesty's
Inspectorate of Pollution ("HMIP") charged IGEMS with violating the Radioactive
Substances Act by failing to comply with a condition of registration. The Act
provides that a registrant like IGEMS, which "does not comply with a limitation
or condition subject to which (it) is so registered...shall be guilty of (a
criminal) offense." Condition 7 of IGEMS' registration states that it "shall so
far as is reasonably practicable prevent...loss of any registered source."
Page 6 of 49
<PAGE>
At the beginning of trial on February 24, 1995, IGEMS entered a
guilty plea and agreed to pay a fine of (pound)5,000 and assessed costs of
(pound)5,754. The prosecutor's presentation focused primarily on the 1991 change
in internal IGEMS procedures and, in particular, the source logging procedure.
The prosecutor complimented IGEMS' investigation and efforts to locate the
source and advised the court that IGEMS had no previous violations of the
Radioactive Substances Act. He also told the court that the Radlett plant had
been highlighted as an exemplary facility to HMIP inspectors as part of their
training. In mitigation, IGEMS emphasized the significant infrastructure and
expense undertaken by IGEMS to provide security for radiation sources and the
significant effort and expense incurred in attempting to locate the missing
source.
All Reporting Persons and, to the best knowledge of each Reporting
Person, all persons identified in Schedules II, III, IV and V are United States
citizens, except N.D.T. Andrews, a Director and an Executive Officer of GECC and
GECS, who is a citizen of the United Kingdom, P. Bhasin, an Executive Officer of
GECC, who is a citizen of India, C.A.A.E. Mackenzie, an Executive Officer of
GECC, who is a citizen of the United Kingdom, K. Ahlmann, a Director and an
Executive Officer of GECS, who is a citizen of Denmark, P. Fresco, a Director of
GE and a Director and an Executive Officer of GECC and GECS, who is a citizen of
Italy, and C.X. Gonzalez, a Director of GE, who is a citizen of Mexico.
Item 3. Source and Amount of Funds or Other Consideration.
The shares of Common Stock of the Issuer are deemed beneficially
owned by GECITS through its holdings of Preferred Stock of the Issuer purchased
pursuant to the Preferred Stock Purchase Agreement dated as of July 14, 1997, as
amended on July 23, 1997, by and among the Issuer, GECITS and certain other
purchasers (as amended, the "Stock Purchase Agreement") incorporated herein by
reference. GECITS used internally generated funds in the amount of $3,000,000 to
finance the purchases of Preferred Stock.
GECITS acquired 344,979 shares of Preferred Stock on July 28, 1997
for a purchase price of $1,219,500.00 and 503,677 shares of Preferred Stock on
August 26, 1997 for a purchase price of $1,780,500.00. In aggregate, GECITS
acquired 848,656 shares of Preferred Stock at $3.535 per share for a total
purchase price of $3,000,000.
Item 4. Purpose of Transaction.
GECITS holds Preferred Stock for the purpose of investment and
intends to reexamine its investment in the Issuer from time to time and,
depending on market considerations and other factors, may convert Preferred
Stock into Common Stock, or may purchase or sell shares of Common Stock, if
appropriate opportunities to do so are available, on such terms and at such time
as it considers advisable.
In connection with the issuance of Preferred Stock, the following
changes resulted:
a). The exact number of the directors of the Issuer was increased
from five (5) to six (6) and one director was added to the Board. The new
director, elected by the majority of the Board, is Mr. Larry Lenihan.
b). The Board of Directors authorized issuance of 5,000,000 shares
of Preferred Stock and reserved such number of shares of Common Stock to be
issued upon conversion of the Preferred Stock as the then outstanding shares of
Preferred Stock are convertible into.
c). The Issuer's bylaws were amended so as to reflect changes in
capitalization and in the structure of the Board of Directors of the Issuer.
Subject to the foregoing, none of the following events has happened
or is contemplated by the Reporting Persons:
1). The acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
2). An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
3). A sale or transfer of a material amount of assets of the Issuer
or any of its subsidiaries;
4). Any other material change in the Issuer's business or corporate
structure;
Page 7 of 49
<PAGE>
5). Changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Issuer by any person;
6). Causing a class of securities of the Issuer to be delisted from
a national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
7). A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or
8). Any action similar to any of those enumerated above.
Item 5. Interest in the Securities of the Issuer.
a). GECITS beneficially owns 848,656 shares of Common Stock of the
Issuer through its holdings of 848,656 shares of Preferred Stock of the Issuer
(preferences and special rights of Preferred Stock are listed in the Certificate
of Determination of Rights of Series A Convertible Preferred Stock of Digital
Generation Systems, Inc. (the "Certificate of Determination") incorporated
herein by reference). Preferred Stock is convertible at the option of GECITS
into Common Stock of the Issuer at a conversion ratio equal to $3.535 (the
"Preferred Amount Per Share") divided by the Conversion Price, initially equal
to $3.535 and subject to anti-dilution adjustments. If GECITS were to convert
all its shares of Preferred Stock into shares of Common Stock at the present
Conversion Ratio, it would own approximately 6.5% of the issued and outstanding
shares of Common Stock, based on the information provided by the Issuer to
GECITS that the Issuer presently has 12,971,340 shares of Common Stock issued
and outstanding. Holders of Preferred Stock are entitled to vote their shares on
an "as converted" basis on all matters calling for a vote of Common Stock
shareholders. Holders of Preferred Stock have a right to vote separately as a
single class to elect one director of the Issuer.
b). To the best knowledge of GECITS, no person other than GECITS has
the power to vote or to direct the vote or to dispose or direct the disposition
of any of the securities which GECITS may be deemed to beneficially own.
c). On July 28, 1997 and on August 26, 1997, GECITS acquired an
aggregate of 848,656 shares of Preferred Stock of the Issuer for a total
purchase price of $3,000,000.
The Reporting Persons have not effected any transactions in the
Preferred or Common Stock of the Issuer during the past sixty days.
d). No other person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
the shares of the Common Stock into which the shares of the Preferred Stock
beneficially owned by GECITS are convertible.
e). Not Applicable.
Item 6. Contracts, Arrangements, Undertakings or Relationships with Respect to
Securities of the Issuer.
GECITS purchased Preferred Stock of the Issuer pursuant to the Stock
Purchase Agreement. Under the terms of the Stock Purchase Agreement, so long as
the purchasers of Preferred Stock own 10% of the total outstanding stock of the
Issuer (as calculated pursuant to Section 16(b) of the Securities Exchange Act
of 1934, as amended), the Issuer agrees to take necessary action to cause a
designee of the holders of Preferred Stock to be nominated, and to use its best
efforts to cause such designee to be elected, to the Board of Directors. In
addition, GECITS has rights to acquire future privately offered equity
securities of the Issuer as described in Section 4.8 of the Stock Purchase
Agreement.
GECITS is a party to the Amendment and Restatement No. 5 to Rights
Agreement dated as of July 14, 1997 among the Issuer, GECITS and certain other
holders of the securities of the Issuer (the "Registration Rights Agreement").
The Registration Rights Agreement is attached hereto as Exhibit C.
Except as described herein, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among the Reporting Persons
and any other person with respect to the securities of the Issuer, including any
contract, arrangement, understanding or relationship concerning transfer or
voting of any securities of the Issuer,
Page 8 of 49
<PAGE>
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving or withholding
of proxies.
Item 7. Material to Be Filed as Exhibits.
Exhibit A. Preferred Stock Purchase Agreement by and among the Issuer, GECITS
and certain other purchasers, dated as of July 14, 1997, as amended on July 23,
1997.*
Exhibit B: Certificate of Determination of Rights of Series A Convertible
Preferred Stock of the Issuer certified by the Secretary of State of the State
of California on July 16, 1997.*
Exhibit C: Amendment and Restatement No. 5 to Rights Agreement dated as of July
14, 1997 among the Issuer, GECITS and certain other holders of the securities of
the Issuer.
* These documents were filed with the Securities and Exchange Commission by the
Issuer as Exhibits 2.2, 2.3 and 2.4 to its Current Report on Form 8-K filed on
August 1, 1997 and are incorporated herein by reference.
Page 9 of 49
<PAGE>
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.
GE CAPITAL INFORMATION TECHNOLOGY
SOLUTIONS, INC.
By: /s/ Stanley Witkow
-----------------------------------
Name: Stanley Witkow
Title: Senior Vice President and
General Counsel
Dated: April 28, 1998
Page 10 of 49
<PAGE>
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.
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Nancy E. Barton
-----------------------------------
Name: Nancy E. Barton
Title: Senior Vice President
Dated: April 30, 1998
Page 11 of 49
<PAGE>
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.
GENERAL ELECTRIC CAPITAL SERVICES, INC.
By: /s/ Nancy E. Barton
------------------------------------
Name: Nancy E. Barton
Title: Senior Vice President
Dated: April 30, 1998
Page 12 of 49
<PAGE>
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.
GENERAL ELECTRIC COMPANY
By: /s/ Nancy E. Barton
-----------------------------------
Name: Nancy E. Barton
Title: Attorney-In-Fact*
Dated: April 30, 1998
* See Power of Attorney attached to Schedule I.
Page 13 of 49
<PAGE>
Schedule I
JOINT FILING AGREEMENT
The undersigned parties hereby agree that the Schedule 13D filed
herewith (and any amendments thereto) relating to Common Stock of Digital
Generation Systems, Inc. is being filed jointly with the Securities and Exchange
Commission pursuant to Section 13-d-1(f) on behalf of each such person.
Dated: April 30, 1998
GE CAPITAL INFORMATION TECHNOLOGY
SOLUTIONS, INC.
By: /s/ Stanley Witkow
-----------------------------------
Name: Stanley Witkow
Title: Senior Vice President and
General Counsel
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Nancy E. Barton
-----------------------------------
Name: Nancy E. Barton
Title: Senior Vice President
GENERAL ELECTRIC CAPITAL SERVICES, INC.
By: /s/ Nancy E. Barton
-----------------------------------
Name: Nancy E. Barton
Title: Senior Vice President
GENERAL ELECTRIC COMPANY
By: /s/ Nancy E. Barton
-----------------------------------
Name: Nancy E. Barton
Title: Attorney-In-Fact*
* See Power of Attorney attached to Schedule I.
Page 14 of 49
<PAGE>
POWER OF ATTORNEY
The undersigned, General Electric Company, a New York corporation
(hereinafter referred to as the "Corporation") does hereby make, constitute and
appoint the persons listed below as the Corporation's true and lawful agent and
attorney-in-fact (hereinafter referred to as the "Attorney") to act either
together or alone in the name and on behalf of the Corporation for and with
respect to the matters hereinafter described.
Name of Attorney: Joan C. Amble
Nancy E. Barton
Jeffrey S. Werner
Michael A. Gaudino
J. Gordon Smith
Michael E. Pralle
Paul J. Licursi
Each Attorney shall have the power and authority to do the
following:
To execute and deliver any Schedule 13D, Schedule 13G or Forms 3, 4
and 5 or any amendments thereto required to be filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 on behalf of the
Corporation with regard to any securities owned by General Electric Capital
Services, Inc., General Electric Capital Corporation or any of their
subsidiaries.
And, in connection with the foregoing, to execute and deliver all
documents, acknowledgments, consents and other agreements and to take such
further action as may be necessary or convenient for the Corporation in order to
more effectively carry out the intent and purpose of the foregoing.
Agreements, commitments, documents, instruments, and other writings
executed by the Attorney in accordance with the terms hereof shall be binding
upon the Corporation without attestation and without affixation of the seal of
the Corporation. The Power of Attorney conferred hereby shall not be delegable
by any Attorney. The Attorney shall serve without compensation for acting in the
capacity of agent and attorney-in-fact hereunder.
Unless sooner revoked by the Corporation, this Power of Attorney
shall be governed under the laws of the State of New York and the authority of
the Attorney hereunder shall terminate on March 31, 2000.
IN WITNESS WHEREOF, the Corporation has caused this Power of
Attorney to be executed, attested and its corporate seal to be affixed pursuant
to authority granted by the Corporation's board of directors, as of the 30th day
of April, 1998.
General Electric Company
(Corporate Seal)
By: /s/ Philip D. Ameen
------------------------------------
Philip D. Ameen, Vice President
Attest:
/s/ Robert E. Healing
- ------------------------------------
Robert E. Healing, Attesting Secretary
Page 15 of 49
<PAGE>
Schedule II
GE CAPITAL INFORMATION TECHNOLOGY SOLUTIONS, INC. EXECUTIVE OFFICERS
The business address of each of the persons listed below is 700
Canal Street, Stamford, Connecticut 06902.
The names and principal occupations of the Officers of GE Capital
Information Technology Solutions, Inc. are as follows:
Officers Position(s)
- -------- -----------
Gerald A. Poch President
Frederick Flynn Senior Vice President, Chief Financial
Officer, Treasurer
Philip Gavey Assistant Treasurer
Stanley Witkow Secretary
Norman Fassler Assistant Secretary
Harri Singh Controller
The sole Director of GE Capital Information Technology Solutions,
Inc. is Gerald A. Poch and his principal occupation is to act as an officer and
director of GE Capital Information Technology Solutions, Inc.
Page 16 of 49
<PAGE>
Schedule III
General Electric Capital Corporation
The business address of each of the persons listed below is 260 Long
Ridge Road,
Stamford, Connecticut 06927.
The names and principal occupations of the Officers of General
Electric Capital Corporation are as follows:
Officers: Positions:
- --------- ----------
G.C. Wendt Chairman of the Board and Chief Executive Officer
D.J. Nayden President and Chief Operating Officer
N.D.T. Andrews Executive Vice President
M.A. Neal Executive Vice President
E.D. Stewart Executive Vice President
N.E. Barton Senior Vice President, General Counsel and Secretary
J.A. Colica Senior Vice President, Global Risk Management
M.D. Fraizer Senior Vice President, Insurance/Investment Products
R.L. Lewis Senior Vice President, Structured Finance Group
J.A. Parke Senior Vice President, Finance
T.S. Thomson Senior Vice President, Strategic Planning and
Business Development
L.J. Toole Senior Vice President, Human Resources
J.S. Werner Senior Vice President, Corporate Treasury and Global
Funding Operation
A.N. Abaya Vice President
R.M. Agans Vice President
D.G. Amble Vice President
J.C. Amble Vice President and Controller
S.F. Ambrose, Jr. Vice President
C.S. Anderson Vice President
K.R. Baldwin Vice President
M.S. Barber Vice President
M.J. Barrett Vice President
S.M. Bennett Vice President
Page 17 of 49
<PAGE>
P. Bhasin Vice President
K.J. Bongarten Vice President
J.M. Campbell, Jr. Vice President
K.A. Cassidy Vice President
R.A. Cole Vice President
B.E. Daniele Vice President
R. D'Alvino Vice President
J.L. Day Vice President
P.P. de Campos Vice President
L.J. DeMonaco Vice President
S.L. Derickson Vice President
T.F. Fanelli Vice President
R.A. Fattori Vice President
M.R. Ferla Vice President
M.S. Ford Vice President
M.A. Gaudino Vice President
V.F. Guaglianone Vice President
D.B. Henry Vice President
H.A. Hubschman Vice President
J.E. Hyman Vice President
T.D. Iker Vice President
S.P. Joyce Vice President
M.M. Keane Vice President
S.F. Kluger Vice President
S.B. Koenigsberg Vice President
M.L. Landis Vice President
G.N. Lanik Vice President
N.C.T. Liu Vice President
J.M. Loree Vice President
C.A.A.E. Mackenzie Vice President
Page 18 of 49
<PAGE>
J.P. Malfettone Vice President
T.H. Mann Vice President
K.V. Marinello Vice President
B.T. McAnaney Vice President
J.A. McKinley, Jr. Vice President
M.A. Meiches Vice President
D.H. Mudd Vice President
D.R. Nissen Vice President
J.V. Ogden Vice President
R.O. O'Reilly Vice President
R.E. Pfeiffer Vice President
D.W. Porter Vice President
M.E. Pralle Vice President
R.R. Pressman Vice President
H.M. Pyles Vice President
C.H. Richmond Vice President
M.S. Sheinbaum Vice President
R.F. Smith Vice President
W.D. Strittmatter, Jr. Vice President
G.R. Tappert Vice President
J. Tremante Vice President
D.E. Tucker Vice President
R.F. Wacker Vice President
J.D. Weeks Vice President
The names of Directors of General Electric Capital Corporation are
as follows:
N.D.T. Andrews
N.E. Barton
J.R. Bunt
D.M. Cote
D.D. Dammerman
P. Fresco
B.W. Heineman, Jr.
J.R. Immelt
W.J. McNerney, Jr.
J.H. Myers
R.L. Nardelli
Page 19 of 49
<PAGE>
D.J. Nayden
M.A. Neal
J.A. Parke
J.M. Samuels
E.D. Stewart
J.F. Welch, Jr.
Gary C. Wendt, Chairman
Citizenship
(other than United States)
N.D.T. Andrews United Kingdom
P. Bhasin India
P. Fresco Italy
C.A.A.E. Mackenzie United Kingdom
Page 20 of 49
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Schedule IV
General Electric Capital Services, Inc.
The business address of each of the persons listed below is 3003
Summer Street, Stamford, Connecticut 06905.
The names and principal occupations of the Officers of General
Electric Capital Services, Inc. are as follows:
Officers: Positions:
- --------- ----------
G.C. Wendt Chairman of the Board, President and Chief Executive
Officer
K. Ahlmann Executive Vice President
N.D.T. Andrews Executive Vice President
D.J. Nayden Executive Vice President
M.A. Neal Executive Vice President
E.D. Stewart Executive Vice President
N.E. Barton Senior Vice President, General Counsel and Secretary
J.A. Parke Senior Vice President, Finance
L.J. Toole Senior Vice President, Human Resources
J.S. Werner Senior Vice President, Corporate Treasury and Global
Funding Operation
J.C. Amble Vice President and Controller
B.E. Daniele Vice President and Senior Litigation Counsel
R. D'Avino Vice President and Senior Counsel, Taxes
S.F. Ambrose, Jr. Assistant Secretary
B.C. Bennett Assistant Secretary
S.P.F. Cameron Assistant Secretary
V.F. Guaglianone Assistant Secretary
J.J. Leibell Assistant Secretary
B.T. McAnaney Assistant Secretary
J.V. Ogden Assistant Secretary
Page 21 of 49
<PAGE>
J.T. Cassidy Assistant Treasurer, Taxes
D. Flammetta Assistant Treasurer, Taxes
J.L. Hyde Assistant Treasurer, Taxes
K.E. Kempson Assistant Treasurer, Taxes
J. Amato Assistant Treasurer, State Taxes
P. Lecouras Assistant Treasurer, State Taxes
G.J. Schulman Assistant Treasurer, State Taxes
J. Van Cleave Assistant Treasurer, State Taxes
D.R. Sweeney Assistant Treasurer
J. Tremante Assistant Treasurer
K.J. Yoh Assistant Treasurer
The names of Directors of General Electric Capital Services, Inc.
are as follows:
K. Ahlmann
N.D.T. Andrews
J.R. Bunt
D.D. Dammerman
P. Fresco
B.W. Heineman, Jr.
J.H. Myers
R.L. Nardelli
D.J. Nayden
M.A. Neal
J.M. Samuels
E.D. Stewart
J.F. Welch, Jr.
Gary C. Wendt, Chairman
Citizenship
(other than United States)
K. Ahlmann Denmark
N.D.T. Andrews United Kingdom
P. Fresco Italy
Page 22 of 49
<PAGE>
Schedule V
GENERAL ELECTRIC COMPANY EXECUTIVE OFFICERS
The business address of each of the persons listed below is 3135
Easton Turnpike, Fairfield, Connecticut 06431.
The names and principal occupations of the Officers of General
Electric Company are as follows:
Officers Position(s)
- -------- -----------
J.F. Welch, Jr. Chairman of the Board and Chief Executive Officer
P. Fresco Vice Chairman of the Board and Executive Officer
P.D. Ameen Vice President and Comptroller
J.R. Bunt Vice President and Treasurer
D.L. Calhoun Senior Vice President - GE Lighting
W.J. Conaty Senior Vice President - Human Resources
D.M. Cote Vice President - GE Appliances
D.D. Dammerman Senior Vice President - Finance
L.S. Edelheit Senior Vice President - Corporate Research and
Development
B.W. Heineman, Jr. Senior Vice President - General Counsel and Secretary
J.R. Immelt Senior Vice President - GE Medical Systems
W.J. Lansing Vice President - Corporate Business Development
G. S. Malm Senior Vice President - Asia
W.J. McNerney, Jr. Senior Vice President - GE Aircraft Engines
E.F. Murphy Vice Chairman of the Board and Executive Officer
R.L. Nardelli Senior Vice President - GE Power Systems
R.W. Nelson Vice President - Corporate Financial Planning and
Analysis
J.D. Opie Vice Chairman of the Board and Executive Officer
G.M. Reiner Senior Vice President - Chief Information Officer
J. G. Rice Vice President - GE Transportation Systems
Page 23 of 49
<PAGE>
G.L. Rogers Senior Vice President - GE Plastics
J.W. Rogers Vice President - GE Motors
L.G. Trotter Vice President - GE Electrical Distribution and Control
The names and principal occupations of Directors of General Electric
Company are as follows:
D.W. Calloway Chairman of the Board, Chief
Executive Officer and Director,
PepsiCo, Inc.
J.I. Cash, Jr. Professor of Business
Administration-Graduate
School of Business Administration,
Harvard University
S.S. Cathcart Retired Chairman, Illinois Tool Works
D.D. Dammerman Senior Vice President-Finance,
General Electric Company
P. Fresco Vice Chairman of the Board and
Executive Officer, General Electric
Company
C.X. Gonzalez Chairman of the Board and Chief
Executive Officer, Kimberly-Clark de
Mexico, S.A. de C.V.
G.G. Michelson Former Director, Federated Department
Stores
E.F. Murphy Vice Chairman of the Board and
Executive Officer
S. Nunn Partner, King & Spalding
J.O. Opie Vice Chairman of the Board and
Executive Officer, General Electric
Company
R.S. Penske Chairman of the Board and President,
Penske Corporation
F.H.T. Rhodes President Emeritus, Cornell University
A.C. Sigler Retired Chairman of the Board and CEO
and former Director, Champion
International Corporation
D.A. Warner III Chairman of the Board, President, and
Chief Executive Officer, J.P. Morgan
& Co. Incorporated and Morgan
Guaranty Trust Company
J.F. Welch, Jr. Chairman of the Board and Chief
Executive Officer, General Electric
Company
Citizenship
(other than United States)
C.X. Gonzalez Mexico
P. Fresco Italy
Page 24 of 49
<PAGE>
EXHIBIT C
DIGITAL GENERATION SYSTEMS, INC.
AMENDMENT AND RESTATEMENT NO. 5
TO
RIGHTS AGREEMENT
This AMENDMENT AND RESTATEMENT NO. 5 TO RIGHTS AGREEMENT (this "Rights
Agreement") is entered into as of July 14, 1997, by and among Digital Generation
Systems, Inc., a California corporation (the "Company"), purchasers of the
Company's Series A Convertible Preferred Stock listed on Exhibit A as New Rights
Holders and IndeNet, Inc., a Delaware corporation ("IndeNet" and, collectively,
with the purchasers of the Company's Series A Convertible Preferred Stock, the
"New Rights Holders") and certain securityholders of the Company listed on
Exhibit A attached hereto signing a counterpart signature page hereto (the
"Existing Rights Holders").
RECITALS
A. On November 9, 1992, in connection with the Series A Preferred Stock
Purchase Agreement, the Company, certain holders of the Company's Series A
Preferred Stock, and John Armstrong, Ron Denman, Dan Carrico and Randy Morser
(the "Founders") entered into an Amendment and Restatement No. I to Rights
Agreement (the "Restatement No. 1"), which conferred upon "Shareholders" (as
that term is defined therein) certain rights including registration rights and
rights of first offer, and conferred upon certain Founders and holders of Series
A Preferred rights to co-sale.
B. On December 4, 1992, in connection with IAI Venture Partner II's
("IAI") (now "Coral Partners II") purchase of the Company's Series A Preferred
Stock pursuant to the Series A Preferred Stock Purchase Agreement dated December
4, 1992, the Company and certain parties to the Restatement and IAI entered into
the First Amendment to the Restatement No. 1 (the "First Amendment"), which
provided that IAI would be considered a "Shareholder" under the Restatement No.
1 to the same extent as if it had been one of the original parties to the
Restatement No. 1.
C. On January 22, 1993, in connection with the issuance to Phoenix Leasing
Incorporated ("Phoenix") of a warrant to purchase Series A Preferred Stock (the
"Series A Warrant") pursuant to an equipment lease agreement, the Company and
certain parties to the Restatement No. 1 and Phoenix entered into the Second
Amendment to the Restatement No. 1 (the "Second Amendment"), which provided that
Phoenix would be considered a "Shareholder" under the Restatement No. 1 to the
same extent as if it had been one of the original parties to the Restatement No.
1.
Page 25 of 49
<PAGE>
D. On March 10, 1994, in connection with the sale of Series B Preferred
Stock pursuant to the Series B Preferred Stock Purchase Agreement dated March
10, 1994, the Company, certain parties to the Restatement No. 1 and the holders
of Series B Preferred Stock (the "Series B Holders"), entered into the Third
Amendment (the "Third Amendment") which provided that the Series B Holders would
be considered "Shareholders" under the Restatement No. 1 to the same extent as
if they had been original parties to the Restatement No. 1.
E. On November 14, 1994, in connection with the sale of additional shares
of Series B Preferred Stock (the "New Series B Shares") to certain existing
Series B Holders, pursuant to the Amendment No. 1 to the Series B Stock Purchase
Agreement, the Company and the Existing Rights Holders entered into an Amendment
and Restatement No. 2 to Rights Agreement (the "Restatement No. 2"), amending
and restating the Restatement No. 1, as amended, to extend certain rights,
including registration rights and rights of first offer, to the New Series B
Shares.
F. On November 18, 1994, in connection with the sale of Series C Preferred
Stock pursuant to the Series C Preferred Stock Purchase Agreement dated November
18, 1994, the Company, certain parties to the Restatement No. 2 and the holders
of Series C Preferred Stock (the "Series C Holders") entered into an Amendment
and Restatement No. 3 to Rights Agreement (the "Restatement No. 3") amending and
restating the Restatement No. 2 to confer upon the Series C Holders certain
rights, including registration rights and rights of first offer.
G. On July 27, 1995, in connection with the sale of Series D Preferred
Stock pursuant to the Series D Preferred Stock Purchase Agreement dated [July
27, 1995], the Company, certain parties to the Restatement No. 3 and the holders
of Series D Preferred Stock (the "Series D Holders") entered into an Amendment
and Restatement No. 4 to Rights Agreement (the "Restatement No. 4") amending and
restating the Restatement No. 3 to confer upon the Series D Holders certain
rights, including registration rights and rights of first offer.
H. On December 6, 1995, in connection with the initial firm commitment
underwritten offering of the Common Stock of the Company, certain parties to the
Restatement No. 4 signed a letter (the "Waiver Letter") transmitting a Waiver,
Consent and Election (the "Waiver") waiving certain registration rights and
certain rights of first offer and co-sale.
I. The Company and the Existing Rights Holders, constituting the holders
of a majority of the Registrable Securities (as that term is defined in the
Restatement No. 4), in order to induce the New Rights Holders to purchase shares
in the Company, desire to enter into a new agreement, which will supersede the
Restatement No. 4, in its entirety, containing substantially similar provisions,
eliminating the provisions of the Restatement No. 4. waived pursuant to the
Waiver Letter and the Waiver, and granting registration rights to the holders of
Series A Convertible Preferred Stock purchased by them pursuant to that certain
Preferred Stock Purchase Agreement dated July [14], 1997 between the Company and
such holders of Series A Convertible Preferred Stock, as well as shares of
Page 26 of 49
<PAGE>
Common Stock issued to IndeNet (the "IndeNet Shares") pursuant to that certain
Stock Purchase Agreement (the "IndeNet Agreement") between the Company and
IndeNet dated July [14], 1997. The holders of the Company's securities listed on
Exhibit A attached hereto are hereinafter referred to as "Shareholders" and
individually as a "Shareholder".
The parties hereto agree as follows:
Section 1. Registration Rights.
1.1 Certain Definitions. As used in this Rights Agreement, the following
definitions shall apply:
"Commission" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Conversion Stock" means the shares of the Common Stock issuable or
issued upon conversion of the Shares, if applicable.
"Founders Securities" means the shares of the Common Stock held by
the Founders.
"Holder" means any holder of outstanding Registrable Securities;
provided, however, that for all purposes under this Section, the holder of any
Shares shall be deemed to be the Holder of the Registrable Securities into which
such Shares are then convertible.
"Initiating Holders" means Holders of not less than 50% of the
Registrable Securities.
"Registrable IndeNet Shares" means (i) from the date of this
Agreement until January 31, 1998, none of the IndeNet Shares, (ii) from February
1, 1998 through May 31, 1998, 100,000 of the IndeNet Shares, (iii) from June 1,
1998 until the date prior to the first anniversary of the date of this
Agreement, an aggregate of 200,000 of the IndeNet Shares, and (iv) from the
first anniversary of this Agreement and thereafter all of the IndeNet Shares.
"Registrable Securities" means (i) the Conversion Stock, (ii) the
Warrant Stock, (iii) the Registrable IndeNet Shares, and (iv) any shares of
Common Stock of the Company issued upon a dividend, recapitalization, or similar
event with respect to the Conversion Stock, the Registrable IndeNet Shares or
the Warrant Stock, provided, however, that Registrable Securities shall not
include any shares of Common Stock which have been registered and sold to the
public, any shares sold pursuant to Rule 144 (or successor rule) promulgated by
the Commission or Registrable Securities sold by a person in a transaction in
which rights under this Rights Agreement are not assigned.
"Registration Expenses" means all expenses incurred by the Company
in complying with Sections 1.2 and 1.3, including, without limitation, all
registration,
Page 27 of 49
<PAGE>
qualification, filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses, and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company which shall
be paid in any event by the Company), all reasonable fees and disbursements of a
single counsel designated by the Holders of a majority of the Registrable
Securities to be registered for any Holder. Registration Expenses shall not
include selling commissions, discounts or other compensation paid to
underwriters or other agents or brokers to effect the sale.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, as shall be in effect at the time.
"Shares" means shares of the Company's Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and
Series A Convertible Preferred Stock issued to the Shareholders and Common Stock
issued to IndeNet pursuant to the IndeNet Agreement.
"Warrant Stock" shall mean shares of Common Stock issuable upon
conversion of Shares of Series A Preferred Stock issuable upon exercise of
warrants issued by the Company to Phoenix.
The terms "register", "registered" and "registration" refer
to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act (and any posteffective
amendments filed or required to be filed), and the declaration or
ordering of the effectiveness of such registration statement.
1.2 Company Registration.
(a) Notice of Registration. If at any time or from time to time, the
Company shall determine to register any of its securities, either for its own
account or the account of a security holder or holders, other than a
registration relating solely to employee benefit plans, or a registration
relating solely to a Rule 145 transaction, the Company shall:
(i) promptly give to each Holder and to each Founder written
notice thereof, and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities and Founders Securities
specified in a written request by each Holder and by each Founder received by
the Company within fifteen (15) days after the Company mails such written
notice, subject to the provisions below.
(b) Underwriting. The right of any Holder and any Founder to
registration pursuant to this Section 1.2 shall be conditioned upon the
participation by such Holder or such Founder in such underwriting, if any, and
the inclusion of the Registrable Securities of such Holder or the Founders
Securities of such Founder in the
Page 28 of 49
<PAGE>
underwriting to the extent provided herein. All Holders and all Founders
proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by the
Company. Notwithstanding any other provision of this Section 1.2, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the managing underwriter may limit the
Registrable Securities and Founders Securities to be included in such
registration. The Company shall so advise all Holders and all Founders
distributing their securities through such underwriting, and there shall be
excluded from such registration and underwriting, to the extent necessary to
satisfy such limitation, first shares held by the Founders, then shares held by
Holders, then shares which the Company wishes to register for its own account.
As among the Holders as a group, the number of shares of Registrable Securities
that may be included in the registration and underwriting shall be allocated
among the Holders, in proportion, as nearly as practicable, to the respective
amounts of securities held by such Holders at the time of filing the
registration statement, provided that in no event shall the number of
Registrable Securities included in any such offering be reduced below 25% of the
total number of securities included in such offering. To facilitate the
allocation of shares in accordance with the above provisions, the Company may
round the number of shares allocated to any Holder or to any Founder to the
nearest 100 shares.
If any Holder or Founder disapproves of the terms of any such
underwriting, such Holder or Founder may elect to withdraw therefrom by written
notice to the Company and the managing underwriter. Any securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration. The
Registrable Securities so withdrawn shall also be withdrawn from registration,
and such Registrable Securities shall not be transferred in a public
distribution prior to sixty (60) days after the effective date of such
registration, or such other shorter period of time as the underwriters may
require. If, by the withdrawal of such Registrable Securities, a greater number
of Registrable Securities held by other Holders may be included in such
registration (up to the maximum of any limitation imposed by the underwriters),
then the Company shall offer to all Holders who have included Registrable
Securities in the registration the right to include additional Registrable
Securities in the same proportion and manner used in determining the underwriter
limitation in this Section 1.2(b).
(c) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 1.2 prior to the effectiveness of such registration whether or not any
Holder or any Founder has elected to include securities in such registration.
(d) Amendment of Founders Rights. Any amendment to this Section 1.2
which adversely affects the rights of the Founders shall be effected only by an
amendment to this Agreement by the written consent of the holders of a majority
of the Common Stock held by the Founders, by a majority in interest of the
Shareholders and by the Company.
Page 29 of 49
<PAGE>
(e) No Limit on Piggyback Registrations. There is no limitation on
the number of times that a Holder or Founder may make a request for registration
pursuant to this Section 1.2.
1.3 Form S-3 Registration. In case the Company shall receive from a Holder
or Holders a written request that the Company effect a registration on Form S-3
and any related qualification or compliance with respect to an amount of the
Registrable Securities owned by such Holder or Holders for which the anticipated
aggregate offering price would be at least $500,000, the Company shall:
(a) promptly give written notice of the proposed registration and
any related qualification or compliance to all other Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within 20
days after receipt of such written notice from the Company; provided, however,
that the Company shall not be obligated to effect any such registration,
qualification, or compliance pursuant to this Section 1.3:
(1) if Form S-3 is not available for such offering by the
Holders;
(2) if the Company shall furnish to the Holders a certificate
signed by the president of the Company stating that in the good faith judgment
of the board of directors of the Company, it would be seriously detrimental to
the Company and its shareholders for such Form S-3 Registration to be effected
at such time, in which event the Company shall have the right to defer the
filing of the Form S-3 registration statement for a period of not more than
sixty (60) days after receipt of the initiating request of the Holder or Holders
under this Section 1.3; provided, however, that the Company shall not utilize
this right more than once in any twelve (12) month period;
(3) if the Company has, within the twelve (12) month period
preceding the date of such request, already effected two (2) registrations on
Form S-3 for the Holders pursuant to this Section 1.3; provided, however, that
in any event, even if two such registrations will have occurred within such
twelve month period, IndeNet may, on one occasion on or after February 1, 1998,
but prior to the first anniversary of this Agreement, make a written request
that the Company effect a registration on Form S-3 and any related qualification
or compliance with respect to the Registrable IndeNet Shares; provided further
that the expected proceeds of such offering shall be at least $500,000, in which
case (i) no other Registrable Securities may participate in such registration
without the approval of IndeNet and the Company, and (ii) the 60 day deferral
permitted pursuant to subsection 1.3 (b)(2) shall not apply;
(4) in any jurisdiction in which the Company would be required
to execute a general consent to service of process in effecting such
registration,
Page 30 of 49
<PAGE>
qualification or compliance unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act.
Subject to the foregoing, the Company shall effect such
registration, qualification, or compliance (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky (except that in no event shall the
Company be required to qualify to do business as a foreign corporation in any
jurisdiction where it would not, but for the requirements of this paragraph (d),
be required to be so qualified, to subject itself to taxation in any such
jurisdiction or to consent to general service of process in any such
jurisdiction) or other state securities laws and appropriate compliance with
applicable regulations issued under the Securities Act and any other
governmental requirements or regulations) covering the Registrable Securities
and other securities so requested to be registered as soon as practicable after
receipt of the request or requests of the Holders. Registrations effected
pursuant to this Section 1.3 shall not be counted as registrations effected
pursuant to Section 1.2.
If the registration to be effected pursuant to this Section 1.3 is
to be an underwritten public offering, it shall be managed by an underwriter or
underwriters acceptable to the Company selected by a majority in interest of the
Holders requesting registration. In such event, the right of any Holder to
registration pursuant to this Section 1.3 shall be conditioned upon the
participation by such Holder in such underwriting and the inclusion of the
Registrable Securities of such Holder in the underwriting to the extent provided
herein. If the managing underwriter so selected determines that marketing
factors require a limitation of the number of shares to be underwritten, the
managing underwriter may limit the Registrable Securities held by such Holders
to be included in such registration, provided that no limitation shall apply to
the Registrable IndeNet Shares. The Company shall so advise such Holders, and
the number of shares of Registrable Securities that may be included in the
registration shall be allocated among such Holders in proportion to the
respective amounts of Registrable Securities which would be held by each of such
Holders at the time of filing of the registration statement; provided however,
that on one occasion, in respect of a registration request pursuant to this
Section 1.3 with expected gross proceeds to the Holders of more than
$15,000,000, at the written request of the holders of the Series A Convertible
Preferred, the number of shares of Registrable Securities that may be included
in such offering shall be allocated (x) first to IndeNet, (y) thereafter to the
holders of the Series A Convertible Preferred Shares for up to 75% of the total
offering among such Series A Preferred Stock Holders in proportion to the
respective amounts of Registrable Securities which would be held by each of such
Series A Preferred Stock Holders at the time of filing of the registration
statement, with the remainder allocated to all other Holders of Registrable
Securities in proportion to the respective amounts of Registrable Securities
which would be held by each of such Holders at the time of filing of the
registration statement. Any Registrable Securities that are so excluded from the
underwriting shall be excluded from the registration. As used throughout this
Section the term "Form S-3" shall be deemed to include any equivalent successor
form for registration pursuant to the Securities Act.
Page 31 of 49
<PAGE>
1.4 Expenses of Registration. All Registration Expenses incurred in
connection with the registration, qualification or compliance pursuant to
Sections 1.2 and 1.3 shall be borne by the Company.
1.5 Registration Procedures. If and whenever the Company is required by
the provisions of this Section 1 to use its best efforts to effect promptly the
registration of Registrable Securities, the Company shall:
(a) Prepare and file with the Commission a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become and remain effective as provided herein
(provided, however, that before filing a registration statement or prospectus or
any amendments or supplements thereto, or comparable statements under securities
or blue sky laws of any jurisdiction, the Company will furnish to one counsel
for the Holders participating in the planned offering (selected by the majority
of the Registrable Securities) and the underwriters, if any, copies of all such
documents proposed to be filed (including all exhibits thereto), which documents
will be subject to the reasonable review and reasonable comment of such counsel,
and, with respect to demand registration rights pursuant to Section 1.3 hereof,
the Company shall not file any registration statement or amendment thereto or
any prospectus or supplement thereto to which the holders of a majority of the
Registrable Securities covered by such registration statement or the
underwriters, if any, shall reasonably object in writing).
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
current and to comply with the provisions of the Securities Act with respect to
the sale or other disposition of all Registrable Securities covered by such
registration statement, including such amendments and supplements as may be
necessary to reflect the intended method of disposition of the prospective
seller or sellers of such Registrable Securities, but for no longer than 180
days subsequent to the effective date of such registration in the case of a
registration statement on Form S-1 (or any similar form of registration
statement required to set forth substantially identical information) and for no
longer than 120 days in the case of a registration statement on Form S-3.
(c) Furnish to each prospective seller of Registrable Securities
such number of copies of a registration statement and the prospectus, including
a preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents, as such seller and the underwriter, if any, may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities of such seller.
(d) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein
Page 32 of 49
<PAGE>
or necessary to make the statements therein not misleading in the light of the
circumstances then existing.
1.6 Indemnification. In the event any of the Registrable Securities or
Founders Securities are included in a registration statement under this Section
1:
(a) The Company will indemnify and hold harmless (to the fullest
extent permitted by law) each Holder, each of its officers and directors and
partners and such Holder's separate legal counsel and independent accountants,
and each person controlling such Holder within the meaning of Section 15 of the
Securities Act, and each Founder, and each underwriter, if any, and each person
who controls any underwriter within the meaning of Section 15 of the Securities
Act, against all expenses, claims, losses, damages or liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, preliminary, final or summary prospectus, offering
circular or other document, or any amendment or supplement thereto, incident to
any such registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, or any violation by the Company of any
rule or regulation promulgated under the Securities Act applicable to the
Company in connection with any such registration, qualification or compliance,
and the Company will reimburse each such Holder, each of its officers and
directors, fiduciaries, employees, general and limited partners and such
Holders' separate legal counsel and independent accountants and each person
controlling such Holder, each Founder, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses as
reasonably incurred in connection with investigating, preparing or defending any
such claim, loss, damage, liability or action, provided that the Company will
not be liable in any such case to the extent that any such claim, 'loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder, such Founder or underwriter and stated to be
specifically for use therein.
(b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration, qualification or
compliance is being effected and each Founder will, if Founders Securities held
by such Founder are included in the securities as to which such registration,
qualification or compliance is being affected, indemnify the Company, each of
its directors and officers and its legal counsel and independent accountants,
each underwriter, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company or such underwriter
within the meaning of Section 15 of the Securities Act, and each other such
Holder, each of its officers and directors and each person controlling such
Holder within the meaning of Section 15 of the Securities Act, and each other
such Founder, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material
Page 33 of 49
<PAGE>
fact contained in any such registration statement, prospectus, offering circular
or other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company, such Holders, such
directors, officers, persons, such Founders, underwriters or control persons for
any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Holder or such Founder, as the
case may be, and stated to be specifically for use therein; provided, however,
that the obligations of each Holder and each Founder hereunder shall be limited
to an amount equal to the net proceeds to each such Holder of Registrable
Securities sold as contemplated herein and the proceeds to each such Founder of
Founders Securities sold as contemplated herein.
(c) Each party entitled to indemnification under this Section (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 1.6(c) except to the extent that the failure
to give such notice is materially prejudicial to an Indemnifying Party's ability
to defend such action and provided further, that the Indemnifying Party shall
not assume the defense for matters as to which there is a conflict of interest
or separate and different defenses but shall continue to be liable for the costs
of such defense. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. No Indemnifying Party shall be liable for indemnification hereunder
with respect to any settlement or consent to judgment, in connection with any
claim or litigation to which these indemnification provisions apply, that has
been entered into without the prior consent of the Indemnifying Party (which
consent will not be unreasonably withheld).
(d) If the indemnification provided for in this Section is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage or expense referred to herein,
then the Indemnifying Party, in lieu of indemnifying the Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party with
respect to such loss, liability, claim, damage or expense in the proportion that
is appropriate to reflect the relative fault of the Indemnifying Party and the
Indemnified Party in connection with the statements or
Page 34 of 49
<PAGE>
omissions that resulted in such loss, liability, claim, damage or expense, as
well as any other relevant equitable considerations. The relative fault of the
Indemnifying Party and the Indemnified Party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of
material fact or the omission to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.
(f) The obligations of the Company, Holders and Founders under this
Section 1.6 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.
1.7 Information by Holder. Each Holder of Registrable Securities and each
Founder holding Founders Securities included in any registration shall furnish
to the Company such information regarding such Holder or such Founder and the
distribution proposed by such Holder or such Founder as the Company may request
in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Section 1.
1.8 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Securities to the public without registration, the
Company shall use its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, beginning ninety
(90) days after (i) the effective date of the first registration statement filed
by the Company for an offering of its securities to the general public, (ii) the
Company registers a class of securities under Section 12 of the Securities
Exchange Act of 1934, as amended, or (iii) the Company issues an offering
circular meeting the requirements of Regulation A under the Securities Act;
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Securities Exchange Act of 1934, as amended (at any time after it has become
subject to such reporting requirements);
(c) Furnish to any Holder promptly upon request a written statement
as to its compliance with the reporting requirements of Rule 144 (at any time
after ninety (90) days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the Securities Exchange Act of 1934 (at
any time after it has become subject to such
Page 35 of 49
<PAGE>
reporting requirements), a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents of the Company and other
information in the possession of or reasonably obtainable by the Company as a
Holder may reasonably request in availing itself of any rule or regulation of
the Commission allowing a Holder to sell any such securities without
registration.
1.9 Assignment of Registration Rights . The rights to cause the Company to
register securities granted under this Section may be assigned to a transferee
or assignee in connection with the transfer or assignment of shares of
Registrable Securities only if such shares represent at least 1% of the
outstanding shares of the Company's Common Stock (assuming conversion of all
Preferred Stock to Common Stock) on the date of such assignment.
1.10 Termination of Registration Rights. No Holder shall be entitled to
exercise any right provided for in this Section 1 after five (5) years following
the consummation of the sale of securities pursuant to a registration statement
filed by the Company under the Act in connection with the initial firm
commitment underwritten offering of its securities to the general public.
Section 2. Miscellaneous.
2.1 Assignment. Except as otherwise expressly provided herein, the terms
and conditions of this Rights Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties hereto.
2.2 Third Parties. Nothing in this Rights Agreement, express or implied,
is intended to confer upon any party, other than the parties hereto, and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Rights Agreement, except as expressly
provided herein.
2.3 Governing Law. This Rights Agreement shall be governed by and
construed under the laws of the State of California in the United States of
America.
2.4 Counterparts. This Rights 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.
2.5 Notices.
(a) All notices, requests, demands and other communications under
this Rights Agreement or in connection herewith shall be given to or made upon
the respective parties as follows:
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<PAGE>
To Digital Generation
Systems, Inc.: Digital Generation Systems, Inc.
150 Spear Street, Suite 1850
San Francisco, CA 94015
Telephone: (415) 546-6600
Telecopy: (415) 546-6601
Attention: Secretary
To the Shareholders: at their respective addresses as set forth in the stock
purchase agreement pursuant to which their Shares were
purchased.
(b) All notices, requests, demands and other communications given or
made in accordance with the provisions of this Rights Agreement shall be in
writing, and shall be sent by airmail, return receipt requested, or by telex or
telecopy (facsimile) with confirmation of receipt, and shall be deemed to be
given or made when receipt is so confirmed.
(c) Any party may, by written notice to the other, alter its address
or respondent, and such notice shall be considered to have been given ten (10)
days after the airmailing, telexing or telecopying thereof.
2.6 Severability. If one or more provisions of this Rights Agreement are
held to be unenforceable under applicable law, portions of such provisions, or
such provisions in their entirety, to the extent necessary, shall be severed
from this Rights Agreement, and the balance of this Rights Agreement shall be
enforceable in accordance with its terms.
2.7 Amendments and Waivers. Except as set forth in Section 1.2(d), any
term of this Rights Agreement may be amended and the observance of any term of
this Rights Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and the holders of a majority of the Registrable
Securities then outstanding. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each holder of any Registrable Securities
then outstanding, each future holder of a such Registrable Securities, each
Founder and the Company.
2.8 Effect of Amendment or Waiver. Each Shareholder and its successors and
assigns acknowledge that by the operation of Section 2.7 hereof the holders of a
majority of the outstanding Registrable Securities, acting in conjunction with
the Company, will have the right and power to diminish or eliminate all rights
pursuant to this Rights Agreement, provided that any consent, waiver,
modification or amendment shall apply equally to all Holders.
2.9 Rights of Holders. Each holder of Registrable Securities shall have
the absolute right to exercise or refrain from exercising any right or rights
that such holder may have by reason of this Rights Agreement, including, without
limitation, the right to consent to the waiver or modification of any obligation
under this Rights Agreement, and
Page 37 of 49
<PAGE>
such holder shall not incur any liability to any other holder of any securities
of the Company as a result of exercising or refraining from exercising any such
right or rights.
2.10 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any party to this Rights Agreement, upon any breach
or default of the other party, shall impair any such right, power or remedy of
such non-breaching party nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this Rights
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Rights Agreement, must be made in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Rights Agreement, or by law or otherwise afforded to
any holder, shall be cumulative and not alternative.
2.11 Coordination of Prior Rights and Effectiveness. The Existing Rights
Holders hereby agree that the execution and delivery of this Rights Agreement is
an amendment and restatement of the Restatement No. 4 and the rights contained
in the Restatement No. 4 shall be null and void as of the execution hereof by
(a) the holders of a majority of the Registrable Securities, (b) the Company,
and (c) each of the New Rights Holders, whereupon Restatement No. 4 shall be
superseded in its entirety by the terms of this Rights Agreement.
Page 38 of 49
<PAGE>
Signature page to Amendment and Restatement No. 5 to Rights Agreement
IN WITNESS WHEREOF, the parties hereto have executed this Rights Agreement
as of the day and year first above written.
COMPANY:
DIGITAL GENERATION SYSTEMS, INC., a
California corporation
By:
-------------------------------------------
Henry Donaldson, Chief Executive Officer
EXISTING RIGHTS HOLDERS:
COWEN INVESTMENT PARTNERSHIP XXII
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
NEEDHAM EMERGING GROWTH PARTNERS, L.P.
By:
-------------------------------------------
Raj Rajaratnam, Managing General Partner
CROWN-GLYNN ASSOCIATES, a
Limited Partnership
By:
-------------------------------------------
John W. Glynn, Jr., General Partner
CROWN ASSOCIATES III,
A Limited Partnership
By:
-------------------------------------------
John W. Glynn, Jr., General Partner
Page 39 of 49
<PAGE>
Signature page to Amendment and Restatement No. 5 to Rights Agreement
THE CROWN TRUST
By:
-------------------------------------------
Lisa Solomon, Trust Administrator
SIERRA VENTURES IV,
a California Limited Partnership
By its General Partner,
WENDELL TOBKIN & DRAZAN ASSOCIATES/SV ASSOCIATES IV
a California Limited Partnership
By:
-------------------------------------------
Jeff Drazan, General Partner
SIERRA VENTURES IV INTERNATIONAL,
a California Limited Partnership
By its General Partner,
WENDELL TOBKIN & DRAZAN ASSOCIATES/SV ASSOCIATES IV
a California Limited Partnership
By:
-------------------------------------------
Jeff Drazan, General Partner
AT&T VENTURE COMPANY, L.P.
By:
-------------------------------------------
Neal Douglas, General Partner
KLEINER, PERKINS, CAUFIELD & BYERS VI, L.P.
By:
-------------------------------------------
Brook Byers, General Partner
Page 40 of 49
<PAGE>
Signature page to Amendment and Restatement No. 5 to Rights Agreement
KPCB VI FOUNDER'S FUND
By:
-------------------------------------------
Brook Byers, General Partner
MAYFIELD ASSOCIATES FUND II
By:
-------------------------------------------
Michael Levinthal, General Partner
MAYFIELD VII
By:
-------------------------------------------
Michael Levinthal, General Partner
AT&T VENTURE COMPANY, L.P.
By:
-------------------------------------------
Neal Douglas, General Partner
KLEINER, PERKINS, CAUFIELD & BYERS VI, L.P.
By:
-------------------------------------------
Brook Byers, General Partner
KPCB VI FOUNDER'S FUND
By:
-------------------------------------------
Brook Byers, General Partner
MAYFIELD ASSOCIATES FUND II
By:
-------------------------------------------
Michael Levinthal, General Partner
Page 41 of 49
<PAGE>
Signature page to Amendment and Restatement No. 5 to Rights Agreement
MAYFIELD VII
By:
-------------------------------------------
Michael Levinthal, General Partner
CORAL PARTNERS II, a limited partnership
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
- ----------------------------------------------
B.J. Cassin
- ----------------------------------------------
Peter A. Howley
- ----------------------------------------------
Roger L. Headrick
- ----------------------------------------------
Linda L. Watchmaker
DAIN BOSWORTH INC.
Custodian FBO Yuval Almog SEP/IRA
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
GLYNN VENTURES III, L.P.
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Page 42 of 49
<PAGE>
Signature page to Amendment and Restatement No. 5 to Rights Agreement
FOUNDERS:
- ----------------------------------------------
John Armstrong
- ----------------------------------------------
Ronald Denman
NEW RIGHTS HOLDERS:
INDENET, INC.
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
PEQUOT PRIVATE EQUITY FUND, L.P.
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
PEQUOT PARTNERS FUND, L.P.
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
PEQUOT OFFSHORE PRIVATE EQUITY FUND, INC.
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Page 43 of 49
<PAGE>
Signature page to Amendment and Restatement No. 5 to Rights Agreement
PEQUOT INTERNATIONAL FUND, INC.
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
GENERAL ELECTRTIC CAPITAL
INFORMATION TECHNOLOGY SOLUTIONS
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
TECHNOLOGY CROSSOVER VENTURES, L.P.
a Delaware Limited Partnership
By: Technology Crossover Management, L.L.C.
Its: General Partner
By:
-------------------------------------------
Name: Robert C. Bensky
Title: Chief Financial Officer
TECHNOLOGY CROSSOVER VENTURES, C.V.
a Netherlands Antilles Limited Partnership
By: Technology Crossover Management, L.L.C.
Its: Investment General Partner
By:
-------------------------------------------
Name: Robert C. Bensky
Title: Chief Financial Officer
TCV II, V.O.F.
a Netherlands Antilles Limited Partnership
By: Technology Crossover Management II, L.L.C.
Its: Investment General Partner
By:
-------------------------------------------
Name: Robert C. Bensky
Title: Chief Financial Officer
Page 44 of 49
<PAGE>
Signature page to Amendment and Restatement No. 5 to Rights Agreement
TECHNOLOGY CROSSOVER VENTURES II, L.P.
a Delaware Limited Partnership
By: Technology Crossover Management II, L.L.C.,
Its: General Partner
By:
-------------------------------------------
Name: Robert C. Bensky
Title: Chief Financial Officer
TCV II (Q), L.P.
a Delaware General Partnership
By: Technology Crossover Management II, L.L.C.,
Its: General Partner
By:
-------------------------------------------
Name: Robert C. Bensky
Title: Chief Financial Officer
TCV II STRATEGIC PARTNERS, L.P.
a Delaware Limited Partnership
By: Technology Crossover Management II, L.L.C.,
Its: General Partner
By:
-------------------------------------------
Name: Robert C. Bensky
Title: Chief Financial Officer
TECHNOLOGY CROSSOVER VENTURES II, C.V.
a Netherlands Antilles Limited Partnership
By: Technology Crossover Management II, L.L.C.,
Its: General Partner
By:
-------------------------------------------
Name: Robert C. Bensky
Title: Chief Financial Officer
Page 45 of 49
<PAGE>
Signature page to Amendment and Restatement No. 5 to Rights Agreement
INTEGRAL CAPITAL PARTNERS III, L.P.
By: Integral Capital Management III, L.P.,
Its: General Partner
By:
-------------------------------------------
Name: Pamela K. Hagenah
Title: General Partner
INTEGRAL CAPITAL PARTNERS
INTERNATIONAL III, L.P.
By: Integral Capital Management III, L.P.,
Its: Investment General Partner
By:
-------------------------------------------
Name: Pamela K. Hagenah
Title: a General Partner
Page 46 of 49
<PAGE>
Signature page to Amendment and Restatement No. 5 to Rights Agreement
EXHIBIT B-1
NEW RIGHTS HOLDERS
IndeNet, Inc.
Pequot Private Equity Fund, L.P.
Pequot Partners Fund, L.P.
Pequot Offshore Private Equity Fund, Inc.
Pequot International Fund, Inc.
General Electric Information Technology Solutions
Technology Crossover Ventures, L.P.
Technology Crossover Ventures, C.V.
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.
Integral Capital Partners III, L.P.
Integral Capital Partners International III, L.P.
EXISTING RIGHTS HOLDERS
Cowen Investment Partnership XXII
Needham Emerging Growth Partners, L.P.
Crown-Glynn Associates, a Limited Partnership
Crown Associates III, A Limited Partnership
The Crown Trust
Sierra Ventures IV
Sierra Ventures IV International
AT&T Venture Company, L.P.
Kleiner, Perkins, Caufield & Byers VI, L.P.
KPCB VI Founder's Fund
Mayfield Associates Fund II
Mayfield VII
Coral Partners II (formerly "IAI Venture Partners II")
B.J. Cassin
Peter A. Howley
Linda L. Watchmaker
Dain Bosworth Inc
Custodian FBO Yuval Almog SEP/IRA
Glynn Ventures III, L.P.
i
<PAGE>
Signature page to Amendment and Restatement No. 5 to Rights Agreement
FOUNDERS
John Armstrong
Daniel Carrico
Ronald Denman
Randall Morser
SHAREHOLDERS
Yuval Almog
John Armstrong
AT&T Venture Company, L.P.
Daniel A. Carrico and Esther Lerner Carrico, JTWROS
B.J. Cassin
Coral Partners II (formerly "IAI Venture Partners II")
Dain Bosworth Inc.
Custodian FBO Yuval Almog SEP/IRA
Ronald J. Denman
Henry Donaldson
Patrick Dugan
Barbara Evans
James C. Fensel
Ted Gettelmen
Glynn Ventures III, L.P.
John B. Goodrich
Linda Graf
H. Irving Grousbeck
Mark C. Headrick
Peter A. Howley
Kleiner Perkins Caufield & Byers VI
David Koehler
KPC&B Founder's Fund
Herb Levitin
Mayfield Associates Fund
Mayfield VII
Edward F. Mclaughlin
Peter H. McNerney
Randall E. Morser
Dennis and Amy Peck
Phoenix Leasing Incorporated
William Shideler
Sierra Ventures IV
Sierra Ventures IV International
Robin Solis
Stanford University
Erick Steinberg
Carrie-Ann Stern
ii
<PAGE>
Signature page to Amendment and Restatement No. 5 to Rights Agreement
Mort Topfer
Dave Wallach
Linda L. Watchmaker
Jeffrey Weinstein
WS Investment Company 92B
Bert Zaccaria
iii
