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EXHIBIT 10.33
DIGITAL GENERATION SYSTEMS, INC.
COMMON STOCK SUBSCRIPTION AGREEMENT
The undersigned ("Subscriber") hereby offers to purchase
________________________ shares of the Common Stock (the "Shares") of Digital
Generation Systems, Inc., a California corporation (the "Company") at a price of
$2.80 per share, and is herewith delivering payment for such Shares by check or
wire transfer payable to the Company.
1. Subscriber, by offering to purchase the Shares, (a) hereby represents
and warrants to the Company that all information provided by Subscriber
herewith is true and correct and (b) hereby represents and warrants to
the Company as follows:
a. Investment. Subscriber is acquiring the Shares for
investment for Subscriber's own account, not as a nominee or
agent, and not with the view to, or for resale in connection
with, any distribution thereof in violation of applicable
securities laws. Subscriber understands that such Shares have not
been, and will not be, registered under the Securities Act of
1933, as amended, (the "Securities Act") by reason of a specific
exemption from the registration provisions of the Securities Act
which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of such Subscriber's
representations as expressed herein.
b. Rule 144. Subscriber acknowledges that the Shares must be
held indefinitely unless subsequently registered under the
Securities Act or an exemption from such registration is
available. Subscriber is aware of the provisions of Rule 144
promulgated under the Securities Act which permit limited resale
of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other
things, except as otherwise permitted under Rule 144(k), if
applicable, (i) the availability of certain current public
information about the Company, (ii) the resale occurring not less
than one year after a party has purchased and fully paid for the
shares to be sold, (iii) the sale being effected through a
"broker's transaction" or in transactions directly with a "market
maker" (as provided by Rule 144(f)) and (iv) the number of shares
being sold during any three-month period not exceeding specified
limitations.
c. Legends. Subscriber agrees that each certificate or other
document evidencing any of the Shares shall be endorsed with the
legend set forth below. Subscriber agrees not to transfer the
Shares represented by any such certificate without complying with
the restrictions on transfer described in the legend endorsed on
such certificate.
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
MAY NOT BE SOLD, TRANSFERRED, OR ASSIGNED IN THE ABSENCE OF SUCH
REGISTRATION OR QUALIFICATION, WITHOUT AN OPINION OF COUNSEL FOR
THE HOLDER, CONCURRED IN BY COUNSEL FOR THE COMPANY, STATING
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THAT SUCH SALE, TRANSFER, OR ASSIGNMENT IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF SAID ACT. THIS CERTIFICATE MUST BE
SURRENDERED TO THE CORPORATION OR ITS TRANSFER AGENT AS A
CONDITION PRECEDENT TO THE TRANSFER OF ANY INTEREST IN THE
SECURITIES REPRESENTED BY THIS CERTIFICATE.
d. Access to Data. Subscriber has requested and received from
the Company all the information Subscriber considers necessary or
appropriate for deciding whether to purchase the Shares.
Subscriber has had an opportunity to ask questions of and receive
answers from management of the Company concerning the Company,
the Company's business and financial affairs and the Subscriber's
purchase of Shares hereunder. Subscriber has had such questions
answered to Subscriber's satisfaction. Subscriber understands
that any information contained in any written documentation or
made by management during discussions with the Company were
intended to describe the aspects of the Company's business and
prospects which the Company believes to be material, but such
information does not necessarily provide a thorough exhaustive
description. Subscriber acknowledges that any estimates or
projections as to events that may occur in the future were based
upon the best judgment of the Company's management at the time
such estimates or projections were made and that whether or not
such estimates or projections will depend upon the Company's
achieving its overall business objectives, including the
availability of funds resulting from the sale of the Shares.
Subscriber acknowledges there is no assurance that any
projections will be attained.
e. Preexisting Personal or Business Relationship. Subscriber
either has a preexisting personal or business relationship with
the Company or any of its officers, directors or controlling
persons or, by reason of Subscriber's business or financial
experience, could be reasonably assumed to have the capacity to
protect Subscriber's own interests in connection with the
purchase of the Shares.
f. Authorization. This agreement, upon acceptance by the
Company, will constitute a valid and legally binding obligation
of Subscriber, enforceable in accordance with its terms.
g. Brokers or Finders. There are no arrangements or claims
for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this agreement or any
transaction contemplated hereby based on any arrangement or
agreement known to Subscriber.
h. No Reliance on Third Parties. In purchasing the Shares,
Subscriber is not relying upon any representation or assurance
from any person.
i. Risk of Investment. Subscriber understands the risks
inherent in new ventures and the risks associated with unproven
technologies such as those of the Company, and Subscriber has
experience in investing in such ventures. Subscriber can bear the
entire loss of his investment in the Company.
j. No Legal Tax or Investment Advice. Subscriber understands
that nothing in this Agreement or any other materials presented
to Subscriber or information provided by the Company's management
in connection with the purchase and sale of the Shares
constitutes
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legal, tax, or investment advice. Subscriber has consulted such
legal, tax, and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection
with its purchase of the Shares.
2. Address. Subscriber's address listed below is true and correct.
3. Subscriber understands that the final number of Shares which may be
purchased by Subscriber will be determined by the Company and that this
offer to purchase Shares is subject to acceptance, in whole or in part,
by the Company. Funds not accepted for the purchase of Shares will be
refunded.
4. Subject to acceptance by the Company of Subscriber's offer to purchase
Shares hereunder and upon receipt of Subscriber's payments, the Company
will cause a stock certificate representing the Shares purchased by
Subscriber to be prepared, and the Company will cause such stock
certificate to be transmitted to the Subscriber at the address shown
below.
5. By accepting below, the Company undertakes, within 60 days of the
closing of the round in which the Shares are purchased, to use its
diligent efforts to prepare and file a registration statement with the
Securities and Exchange Commission on Form S-3 registering the shares
under the Securities Act of 1933, as amended, and hereby represents,
warrants, covenants and agrees as to the matters set forth on Annex I
attached hereto.
IN WITNESS WHEREOF, Subscriber hereby executes this Agreement as of
_____________, 1998.
_________________________________________
Signature
_________________________________________
Print Name
Address:_________________________________
_________________________________________
_________________________________________
(Do not write below this line.)
Accepted as to ________ Shares as of ____________, 1998.
Digital Generation Systems, Inc.
By: ____________________________________
Xxxxx Xxxxxxxxx, President
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ANNEX I TO SUBSCRIPTION AGREEMENT
1. By executing the attached Subscription Agreement (the "Agreement"),
the Company hereby represents and warrants to Subscriber that: (a) the Shares
have been duly authorized and, when issued, will be duly and validly issued,
fully paid and non-assessable; (b) the Company has registered its Common Stock
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the Common Stock is listed and traded on the NASDAQ
National Market and the Company has timely filed all material required to be
filed pursuant to all reporting obligations under either Section 13(a) or 15(d)
of the Exchange Act for a period of at least twelve (12) months immediately
preceding the offer or sale of the Shares; (c) the Company has legally available
sufficient authorized and unissued Common Stock as may be reasonably necessary
to effect the sale and issuance of the Shares; (d) the Agreement has been duly
and validly authorized by the Company and, when executed and delivered by the
Company, will be the valid and binding agreement of the Company enforceable in
accordance with its terms; (e) the execution and delivery of the Agreement by
the Company, the issuance of the Shares, and the consummation by the Company of
the other transactions contemplated by the Agreement, do not and will not
conflict with or result in a breach by the Company of any of the terms or
provisions of, or constitute a default under, the articles of incorporation or
by-laws of the Company, or any material agreement or instrument to which the
Company is a party or by which it or any of its properties or assets are bound,
or any material existing applicable law, rule, or regulation or any applicable
decree, judgment, or order of any court or other governmental body having
jurisdiction over the Company or any of its properties or assets, except such
conflict, breach or default which would not have a material adverse effect on
the transactions contemplated herein; and (f) no authorization, approval or
consent of any court, governmental body, regulatory agency, self-regulatory
organization, or stock exchange or market or the stockholders of the Company is
required to be obtained by the Company for the issuance and sale of the Shares
to Subscriber as contemplated by the Agreement, except such authorizations,
approvals and consents that have been obtained.
2. By accepting Subscriber's offer to purchase the Shares, the Company hereby
agrees to enter into a separate registration rights agreement with Subscriber
(and any other purchasers of common stock of the Company in the same round in
which the Shares are purchased) granting Subscriber the demand registration
rights contained in Section 1.3 of the Amendment and Restatement No. 5 to Rights
Agreement entered into as of July 14, 1997 by and among the Company and certain
of its securityholders, which rights shall apply to the registration statement
on Form S-3 referred to in Section 5 of the Agreement. The demand registration
rights so granted will be exercisable no earlier than sixty (60) days following
the closing of the round in which the Shares are purchased. Nothing in this
Section 2 is intended to limit the Company's obligations under section 5 of the
Agreement to file the Form S-3. Notwithstanding anything herein to the contrary,
the Form S-3 shall be maintained effective by the Company until the earlier of
(i) the date as to which Subscriber may sell all of the Shares without
registration in a single transaction pursuant to Rule 144(k) or (ii) the date on
which Subscriber has sold all of the Shares to the public.
