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EXHIBIT 10.35
DIGITAL GENERATION SYSTEMS, INC.
SERIES A PREFERRED STOCK
CONVERSION AGREEMENT
Effective as of August 12, 1998
AGREEMENT, by and between Digital Generation Systems, Inc., a
California corporation (the "Company"), and _____________ ("Holder") of the
Company's Series A Preferred Stock ("Preferred Stock").
WHEREAS, Nasdaq has formally advised the Company, based in part upon
its position that the outstanding convertible voting Series A Preferred Stock is
not included in Nasadaq's calculation of the Company's market capitalization,
that the Company no longer meets certain maintenance criteria for the continued
inclusion of its Common Stock ("Common Stock") on the Nasdaq National Market
System ("Nasdaq National Market"), including the market capitalization
requirement under Maintenance Standard 2 as set forth in NASD Marketplace Rule
4450(b)(1);
WHEREAS, the Company has been formally advised that its request for
continued listing on the Nasdaq National Market will be considered at an oral
hearing on August 7, 1998 (the "Hearing");
WHEREAS, in order to prevent the delisting of its Common Stock, at the
Hearing, the Company's Common Stock must demonstrate its ability to regain
compliance with such maintenance criteria, as well as its ability to sustain
long-term compliance therewith;
WHEREAS, the board of directors of the Company has determined that it
is advisable and in the best interests of the Company and its shareholders that
the Company continue to be listed on the Nasdaq National Market;
WHEREAS, the Company's board of directors has authorized the
appropriate officers of the Company to take all actions they deem necessary or
advisable to regain and maintain compliance with the requirements for continued
listing on the Nasdaq National Market, including, but not limited to, the
issuance to Holder of one additional share of Common Stock for each ten shares
of Preferred Stock it might agree immediately to convert; and
WHEREAS, as part of the Company's plan to regain and sustain long-term
compliance with the Nasdaq National Market maintenance criteria, and, in
particular, the market capitalization requirement mentioned above, the officers
of the Company have urgently requested Holder to convert its Preferred Stock
into Common Stock, and Holder has expressed its willingness so to convert under
certain conditions;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
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1. Conversion of Series A Preferred. Effective immediately and without
further documentation, Holder hereby converts the number of shares of Preferred
Stock listed below its signature into the identical number of fully-paid and
non-assessable shares of Common Stock of the Company.
2. Issuance of Common Stock. In light of the exigencies described in
the Recitals to this agreement and in consideration of Holder's election in
Section 1 to convert, and, thereby, to lose the preferences set forth in the
Company's Certificate of Determination of Rights relating to the Preferred
Stock, the Company hereby agrees to issue one additional fully-paid and
non-assessable share of Common Stock for each ten shares of Preferred Stock
converted hereunder by Holder, in addition to such number of shares of Common
Stock otherwise issuable upon such conversion.
IN WITNESS WHEREOF, the parties hereto have duly executed this
agreement as of the date first above written.
"COMPANY" DIGITAL GENERATION SYSTEMS, INC.
By:
Name:
Title:
"HOLDER" By:
Name:
Title:
Number of Shares of Series A
Preferred Stock Converted Hereby:
