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EXHIBIT 4.4
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is made as of the 9th day of December, 1998, by and between
Digital Generation Systems, Inc., a California corporation (the "COMPANY"), and
each of the persons listed on Schedule A hereto (collectively, the "HOLDERS").
RECITALS
WHEREAS, the Holders possess certain registration rights granted pursuant
to that certain Registration Rights Agreement, dated November 25, 1998, between
the Company and the persons listed on the Schedule of Investors attached thereto
(the "Prior Agreement");
WHEREAS, the Company issued 4,589,287 shares of its Common Stock (the
"Private Placement Shares") to certain of the Holders in a private placement
transaction pursuant to those certain Common Stock Subscription Agreements (the
"August Subscription Agreements") entered into in July 1998 and August 1998 and
effective as of August 14, 1998;
WHEREAS, the Company issued 2,920,134 shares of its Common Stock (the
"Xxxxxxxx Common Shares") to an investor in a private placement transaction
pursuant to that certain Common Stock Subscription Agreement dated September 29,
1998 (the "September Subscription Agreement") and effective as of December 9,
1998;
WHEREAS, the Company issued warrants to purchase up to an additional
3,008,527 shares of its Common Stock (the "Xxxxxxxx Warrant Shares") to such
investor pursuant to that certain Warrant No. 1 to Purchase Common Stock and
Warrant No. 2 to Purchase Common Stock, each dated December 9, 1998 (the
"Xxxxxxxx Warrants");
WHEREAS, the Company issued 923,078 shares of its Common Stock (the
"Investor Common Shares" and to together with the Xxxxxxxx Common Shares, the
"Common Shares") and warrants (the "Investor Warrants" and together with the
Xxxxxxxx Warrants, the "Warrants") to purchase up to an additional 461,540
shares of its Common Stock (the "Investor Warrant Shares" and together with the
Xxxxxxxx Warrant Shares, the "Warrant Shares") to certain investors in a private
placement transaction pursuant to that certain Common Stock and Warrant Purchase
Agreement dated December 9, 1998 (the "Purchase Agreement"); and
WHEREAS, in order to induce such investors to invest funds in the Company
and to enter into the September Subscription Agreement, the Warrants and the
Purchase Agreement, the Company and the Holders hereby agree to waive their
rights under the Prior Agreement, and the Holders and the Company hereby agree
that this Agreement shall govern the rights of the Holders to cause the Company
to register certain shares of Common Stock issued or issuable to such persons,
and certain other matters as set forth herein;
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NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Section 1:
(a) The term "ACT" means the Securities Act of 1933, as amended.
(b) The term "1934 ACT" shall mean the Securities Exchange Act
of 1934, as amended.
(c) The terms "REGISTER," "REGISTERED," and "REGISTRATION" refer
to a registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document.
(d) The term "REGISTRABLE SECURITIES" means the Private
Placement Shares and any Common Stock of the Company issued as a dividend or
other distribution with respect to the Private Placement Shares.
(e) The term "RULE 144" shall mean Rule 144 promulgated under
the Act, as amended, or any similar successor rule thereto that may be
promulgated by the SEC.
(f) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2 Registration.
(a) The Company shall use diligent efforts to prepare and file,
on or before December 31, 1998, a registration statement on Form S-3 and any
related qualification or compliance with respect to all of the Registrable
Securities owned by the Holders so as to permit or facilitate the sale and
distribution of the Holder's Registrable Securities.
(b) Notwithstanding the foregoing, the Company shall not be
obligated to effect any such registration, qualification or compliance, pursuant
to this Section 1.2:
(i) if Form S-3 is not available for such offering by the
Holders;
(ii) 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
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period of not more than sixty (60) days after such date, provided that such
right to defer filing shall be exercised by the Company not more than once in
any twelve (12) month period; and
(iii) in any jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance unless the Company is already subject
to service in such jurisdiction and except as may be required by the Act.
(c) 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 (c),
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.
1.3 Obligations of the Company. Whenever required under this Section 1 to
effect the registration of any Registrable Securities, the Company shall:
(a) Prepare and file with the SEC, a registration statement on Form
S-3 with respect to such Registrable Securities and use all commercially
reasonable efforts to cause such registration statement to become effective,
and, subject to the provisions below, use commercially reasonable efforts to,
keep such registration statement effective until the earlier of (i) the date on
which all of the Registrable Securities held by each Holder can be sold without
registration in a single transaction pursuant to Rule 144(k) of the Act or (ii)
the date on which all of the Registrable Securities have been sold to the
public. If at any time after a registration statement becomes effective, the
Company advises the Holders in writing that the registration statement shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, or any prospectus comprising a part of such registration
statement shall contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading or the occurrence or existence of any pending corporate
development that, in the reasonable discretion of the Company, makes it
appropriate to suspend the availability of the registration statement and the
related prospectus, the Company shall give notice to the Holders that the
availability of the registration statement is suspended and the Holders shall
suspend any further sale of Registrable Securities pursuant to the registration
statement until the Holders have been informed in writing that the registration
statement is available. The Company shall be entitled to exercise its right to
suspend the availability of the registration statement for a period of not more
than sixty (60) days in any three (3) month period, not to exceed in the
aggregate ninety (90) days in any twelve (12) month period.
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(b) Subject to subsection 1.3(a), prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be necessary to
comply with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders requesting registration such numbers of
copies of a prospectus, including a preliminary prospectus, in conformity with
the requirements of the Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities owned
by them.
(d) Use commercially reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Act.
1.4 Information from Holders. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 1 with
respect to the Registrable Securities of a Holder that such Holder shall furnish
to the Company the information requested on Appendix 1.4 hereto, which shall
include such information regarding itself, himself or herself, the Registrable
Securities held by it, him or her, and the intended method of disposition of
such securities, and such other information as shall be reasonably requested by
the Company and required to effect the registration of the Registrable
Securities.
1.5 Expenses of Registration. All expenses of the Holders, except
underwriting discounts (if any) or commissions, including (without limitation)
all registration, filing and qualification fees, printers' and accounting fees,
fees and disbursements of counsel for the Company shall be borne by the Company;
provided, however, that the Company shall not be required to pay any
professional fees incurred by any Holders.
1.6 No Assignment of Registration Rights. The registration rights provided
hereunder are not assignable.
1.7 Indemnification. With respect to all Registrable Securities included
in the registration statement referred to in this Section 1:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners or officers, directors and shareholders
of each Holder, and each person, if any, who controls such Holder within the
meaning of the Act or the 1934 Act, against any losses, claims, damages or
liabilities (joint or several) to which they may become subject under the Act,
the 1934 Act or any state securities laws, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively, a "VIOLATION"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration
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statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) 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, or (iii) any violation
or alleged violation by the Company of the Act, the 1934 Act, any state
securities laws or any rule or regulation promulgated under the Act, the 1934
Act or any state securities laws; and the Company will reimburse each such
Holder or controlling person for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity agreement
contained in this subsection l.7(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation that occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder or controlling person; provided
further, however, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Holder, or any
person controlling such Holder, from whom the person asserting any such losses,
claims, damages or liabilities purchased shares in the offering, if a copy of
the prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or on
behalf of such Holder to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the shares to
such person, and if the prospectus (as so amended or supplemented) would have
cured the defect giving rise to such loss, claim, damage or liability.
(b) To the extent permitted by law, each Holder will indemnify and
hold harmless the Company, each of its directors, each of its officers who has
signed the registration statement, each person, if any, who controls the Company
within the meaning of the Act, any other Holder selling securities in such
registration statement and any controlling person of any such other Holder,
against any losses, claims, damages or liabilities (joint or several) to which
any of the foregoing persons may become subject, under the Act, the 1934 Act or
any state securities laws, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by Holder expressly for use in connection with such registration; and
Holder will reimburse any person intended to be indemnified pursuant to this
subsection l.7(b), for any legal or other expenses reasonably incurred by such
person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity agreement
contained in this subsection l.7(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder (which consent shall
not be unreasonably withheld), provided that in no event shall any indemnity
under this subsection l.7(b) exceed the net proceeds from the offering received
by Holder.
(c) Promptly after receipt by an indemnified party under this Section
1.7 of notice of the commencement of any action (including any governmental
action),
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such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 1.7, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party (together with all other indemnified parties
which may be represented without conflict by one counsel) shall have the right
to retain one separate counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding.
(d) If the indemnification provided for in this Section 1.7 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
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or 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 of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a 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) The obligations of each Holder under this Section 1.7 shall
survive the completion of any offering of Registrable Securities in the
registration statement under this Section 1, and otherwise.
1.8 Termination of Registration Rights. The registration rights provided
in this Section 1 shall terminate with respect to a particular Holder if the
Registrable Securities owned by such Holder have been held for the necessary
holding period under Rule 144 and all shares of Registrable Securities held by
such Holder may be sold pursuant to Rule 144 in any three (3) month period. Upon
the termination of registration rights pursuant to this Section 1.8, the Company
shall have the right to withdraw the registration statement, or any portion
thereof, covering the Registrable Securities.
2. Miscellaneous.
2.1 General. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
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2.2 Governing Law. This Agreement shall be governed by and construed under
the laws of the State of California as applied to agreements among California
residents entered into and to be performed entirely within California.
2.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
2.4 Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
2.5 Notices. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified or upon delivery by
confirmed facsimile transmission, nationally recognized overnight courier
service, or upon deposit with the United States Post Office, by registered or
certified mail, postage prepaid and addressed to the party to be notified at the
address indicated for such party on the signature page hereof, or at such other
address as such party may designate by ten (10) days' advance written notice to
the other parties.
2.6 Expenses. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
2.7 Amendments and Waivers. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the Company and the Holders holding a majority of the
Registrable Securities.
2.8 Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
2.9 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof and is intended to supersede in their entirety any and all
registration rights granted to the Holders in connection with the purchase of
the Private Placement Shares pursuant to Paragraph 2 of Annex 1 to the August
Subscription Agreements, including, without limitation, the requirement set
forth in Section 7 the August Subscription Agreements that the Company
undertake, within sixty (60) days of the closing of the round in which the
Private Placement Shares were purchased, to use its diligent efforts to prepare
and file a registration statement with the SEC on Form S-3 registering such
shares under the Act.
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2.10 Shareholder Approval. The Holders hereby consent to the issuance of
the Common Shares, the Warrants and the Warrant Shares pursuant to the terms set
forth in the Warrants, the September Subscription Agreement and the Purchase
Agreement. The Holders further agree to take any and all actions reasonably
necessary to evidence and effect such consent, including, but not limited to,
executing any necessary shareholder consents or proxies and voting all voting
securities of the Company then held by such Holder at any shareholder meeting in
favor of approving the aforementioned issuances.
2.11 Prior Agreement. The Prior Agreement is hereby superseded in its
entirety and shall be of no further force or effect.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
DIGITAL GENERATION SYSTEMS, INC.:
By:
------------------------------------
Xxxxx X. Xxxxxxxxx
Chief Executive Officer
Address:
Digital Generation Systems, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
HOLDERS:
----------------------------------------
Signature
Address:
----------------------------------------
----------------------------------------
SIGNATURE PAGE TO DIGITAL GENERATION SYSTEMS, INC.
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
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SCHEDULE A
Pequot Offshore Private Equity Fund, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Pequot Private Equity Fund, L.P.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Pequot International Fund, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Pequot Partners Fund, L.P.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Xxxxx X. Xxxxxxxx
00000 Xxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Xxxxx Ventures IV
Xxxxx 000, Xxxx. 0
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Integral Capital Partners IV, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Integral Capital Partners IV
MS Side Fund, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Lion Investments Limited
Carlton House
00 Xxxxxx Xxxx Xxxxxx
Xxxxxx X0X 0XX
XXXXXXX
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Westpool Investment Trust plc
Carlton House
00 Xxxxxx Xxxx Xxxxxx
Xxxxxx X0X 0XX
XXXXXXX
Technology Crossover Ventures, L.P.
00 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Technology Crossover Ventures, C.V.
00 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
TCV II, V.O.F
00 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Technology Crossover Ventures II, L.P.
00 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
TCV II (Q), L.P.
00 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
TCV II Strategic Partners, L.P.
00 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Technology Crossover Ventures II, C.V.
00 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
East River Ventures, L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
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APPENDIX 1.4
SHAREHOLDER INFORMATION QUESTIONNAIRE:
All information furnished below by the undersigned for use in the Registration
Statement on Form S-3 is, and on the date such shares registered thereunder,
will be true, correct, and complete in all material respects, and does not, and
on the date on which the undersigned sells such shares, will not, contain any
untrue statement of a material fact or omit to state any material fact necessary
to make such information not misleading. By completing and returning this
information statement, the undersigned hereby consents to the use of his or her
name, address, and share ownership information in the Form S-3 of Digital
Generation Systems, Inc.
A. Date.
Fill in Date: ________________________________________
B. Name. Print:
Print and sign name or names ________________________________________
exactly as name or names appear
on share certificate. If
certificate is held in more than ________________________________________
one name, all must sign.
Sign:
________________________________________
________________________________________
C. Address.
Fill in your address: ________________________________________
________________________________________
________________________________________
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D. Stock Owned.
Fill in number of shares of Common Of Record Beneficially
Stock owned of record and
beneficially. _________________________ ________________________
E. Aggregate Number of Shares of Common Stock Acquired in Private Placement of
Common Stock to be Registered on Form S-3:
_____________ Shares
F. Status.
The signatory hereto is an individual ( ), partnership ( ), corporation
( ), or other, as more fully described below ( ). The signatory is not acting in
a fiduciary capacity or as a nominee in selling shares in the public offering,
except as indicated below.
________________________________________________________________________________
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