Document:

Exhibit
10.1

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON
THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933.  THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

 

WARRANT NO. 1 TO PURCHASE
COMMON STOCK

of

DG FASTCHANNEL, INC.

 

Void after December 31, 2010

 

This Warrant is issued to
Moon Doggie Family Partnership, L.P., or its assigns (“Holder”) by DG
FastChannel, Inc. (the “Company”), on a restatement in its entirety of that
Warrant No. 1 issued on December 9, 1998, and as previously amended.

 

1.                                       Purchase Shares.  Subject to the terms and conditions
hereinafter set forth, the Holder is entitled, upon surrender of this Warrant
at the principal office of the Company (or at such other place as the Company
shall notify the holder hereof in writing), to purchase from the Company up to
one hundred forty six thousand and six (146,006) fully paid and nonassessable
shares of Common Stock of the Company, (the “Common Stock”).  The number of shares of Common Stock issuable
pursuant to this Section 1 (the “Shares”) shall be subject to adjustment
pursuant to Section 10 hereof.

 

2.                                       Exercise Price.  The purchase price for the Shares shall be
$10.00, as adjusted from time to time pursuant to Section 10 hereof (the “Exercise
Price”).  Notwithstanding any provisions
herein to the contrary, if the fair market value of one share of Common Stock
is greater than the Purchase Price for one share of Common Stock (at the date
of calculation, as set forth below), in lieu of exercising this Warrant for
cash, the Holder may elect to receive shares of Common Stock equal to the value
(as determined below) of this Warrant (or the portion thereof being canceled)
by surrender of this Warrant at the principal office of the Company, together with
the properly endorsed Warrant Certificate, substantially in the form as
attached hereto, in which event the Company shall issue to the Holder that
number of shares of Common Stock computed using the following formula:

 

WS = WCS (FMV-PP)

FMV

 

WHERE:

 

WS                            equals the
number of Warrant Shares to be issued to the Holder;

 

 

WCS                    equals the number of shares
of Common Stock purchasable under the Warrant or, if only a portion of the
Warrant is being exercised, the portion of the Warrant being canceled (at the
date of such calculation);

 

FMV                     equals the Fair Market Value
(as defined below) of one share of Common Stock (at the date of such
calculation); and

 

PP                                  equals the per
share Purchase Price (as adjusted to the date of such calculation) of the
Warrant.

 

As
used in this Section, the term “Fair Market Value” of each Share as of any date
shall be the closing bid price of the Company’s common stock as reported on the
Nasdaq Global Market (or other recognized trading market if the common stock is
not listed on Nasdaq) on the trading day immediately preceding the date of
exercise.

 

3.                                       Exercise Period.  This Warrant shall not be exercisable prior
to December 9, 1999.

 

4.                                       Representations
and Warranties of the Company.  The Company hereby represents and warrants to
the Holder that:

 

(a)                                  Authorization.  All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Warrant and that certain
Registration Rights Agreement of even date herewith, by and between the Company
and certain investors (the “Registration Rights Agreement”), the performance of
all obligations of the Company hereunder and thereunder, and the authorization,
issuance (or reservation for issuance), and delivery of this Warrant and the
Shares issuable upon conversion of this Warrant has been taken or will be taken
prior to the date hereof, and this Warrant and the Registration Rights
Agreement constitute valid and legally binding obligations of the Company,
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies, and (iii) to the extent the
indemnification provisions contained in the Registration Rights Agreement may
be limited by applicable federal or state securities laws.

 

(b)                                 Valid Issuance.  This Warrant, when issued, sold and delivered
in accordance with the terms set forth herein and in consideration for the
Service provided by the Holder, will be duly and validly issued, fully paid,
and nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer under this Warrant and the Registration Rights
Agreement and under applicable state and federal securities laws.  The Shares issuable upon conversion of this
Warrant have been duly and validly reserved for issuance and, upon issuance in
accordance with the terms of the Company’s Amended Certificate of
Incorporation, will be duly and validly issued, fully paid, and nonassessable
and will be free of restrictions on transfer other than restrictions on
transfer under this Warrant and the Registration Rights Agreement and under
applicable state and federal securities laws, The Company agrees that, prior to
the expiration of this Warrant, the Company will at all time have authorized
and

 

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reserved, and will keep available, solely for issuance or
delivery upon the exercise of this Warrant, the number of shares of Common
Stock as from time to time shall be issuable upon the exercise of this Warrant.

 

(c)                                  Offering.  Subject in part to the truth and accuracy of
the Holder’s representations set forth in Section 5 of this Warrant, the offer,
sale and issuance of this Warrant is exempt from the registration requirements
of any applicable state and federal securities laws, and neither the Company
nor any authorized agent acting on its behalf will take any action hereafter
that would cause the loss of such exemption.

 

(d)                                 Non-Contravention.  To the best of the Company’s knowledge, the
execution and delivery of this Warrant, the issuance of the Shares to be issued
by the Company upon conversion of this Warrant, and the consummation of the
transactions contemplated hereby will not conflict with or constitute a
violation of, or default (with the passage of time or otherwise) under, any
material agreement or instrument to which the Company is a party or by which it
is bound or the Certificate of Incorporation (the “Charter”) or the Bylaws of
the Company nor result in the creation or imposition of any lien, encumbrance,
claim, security interest or restriction whatsoever upon any of the material
properties or assets of the Company or an acceleration of indebtedness pursuant
to any obligation, agreement or condition contained in any material bond,
debenture, note or any other evidence of indebtedness or any material
indenture, mortgage, deed of trust or any either agreement or instrument to
which the Company is a party or by which the Company is bound or to which any
of the property or assets of the Company is subject, nor conflict with, or
result in a violation of, any law, administrative regulation, ordinance or
order of any court or governmental agency, arbitration panel or authority
applicable to the Company.  No consent,
approval, authorization or other order of, or registration, qualification or
filing with, any regulatory body, administrative agency, or other governmental
body in the United States, other than with respect to “blue sky” laws, is
required for the valid issuance of this Warrant or the Shares to be issued upon
conversion of this Warrant (other than such as have been made or obtained).

 

(e)                                  Capitalization.  All documents that the Company was required
to file under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), during the twelve (12) months preceding the date of this Warrant (the “SEC
Filings”) accurately reflected the capitalization of the Company as of their
respective filing or effective dates, as the case may be.  The Shares and the shares of Common Stock
issuable upon conversion of that certain Warrant No. 2 to Purchase Common Stock
of even date herewith issued to the Holder (together, the “Combined Shares”)
represent greater than fifty percent (50%) of the sum of (a) the Combined
Shares and (b) the number of shares of Common Stock of the Company issuable
upon exercise of those warrants issued pursuant to that certain Common Stock
and Warrant Purchase Agreement of even date herewith, by and among the Company
and certain investors.

 

(f)                                    Legal Proceedings.  Except as disclosed in the SEC Filings, there
is no material legal or governmental proceeding pending or, to the knowledge of
the Company, threatened or contemplated to which the Company is or may be a
party or of which the business or property of the Company is or may be subject.

 

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(g)                                 No Violations.  Except as disclosed in the SEC Filings, the
Company is not in violation of its Charter or Bylaws, in violation of any law,
administrative regulation, ordinance or order of any court or governmental agency,
arbitration panel or authority applicable to the Company, which violation,
individually or in the aggregate, would have a material adverse effect on the
business or financial condition of the Company, or in default in any material
respect in the performance of any obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of indebtedness in any
indenture, mortgage, deed of trust or any other agreement or instrument to
which the Company is a party or by which the Company is bound or by which the
properties of the Company are bound or affected, which default, individually or
in the aggregate, would have a material adverse effect on the business or
financial condition of the Company or which would have otherwise have a
material adverse effect on the Holder, and there exists no condition which,
with the passage of time or the giving of notice or both, would constitute a
material default under any such document or instrument or result in the
imposition of any material penalty or the acceleration of any indebtedness.

 

(h)                                 Governmental Permits, Etc.  Except as disclosed in the SEC Filings, the
Company has all necessary franchises, licenses, certificates and other
authorizations from any foreign, federal, state or local government or
governmental agency, department, or body that are currently necessary for the
operation of the business of the Company as currently conducted, the absence of
which would have a material adverse effect on the business or operations of the
Company.

 

(i)                                     Financial Statements.  Except as disclosed in the SEC Filings, the
financial statements of the Company and the related notes contained in the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
1997 and its Quarterly Report on Form 10-Q for the quarter ended September 30,
1998, present fairly the financial position of the Company as of the dates
indicated therein and its results of operations and cash flows for the periods
therein specified.  Such financial
statements (including the related notes) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods therein specified.

 

(j)                                     No Material Adverse Charge.  Except as disclosed in the SEC Filings, since
September 30, 1998, there has not been any material adverse change in its
business, financial condition or results of operations.

 

(k)                                  Additional Information.  The Company has filed in a timely manner all
SEC Filings.  The SEC Filings complied in
all material respects with the requirements of the Exchange Act or the
Securities Act of 1933, as amended (the “Securities Act”), as the case may be,
as of their respective filing or effective dates, and the information contained
therein was true and correct in all material respects as of the date or
effective date of such documents, and each of the SEC Filings, as of such date,
did not contain an untrue statement of material fact or omit to state a
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.

 

(l)                                     Intellectual Property.  Except to the extent that the failure to
comply with any of the following statements would not have a material adverse
effect on the

 

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business or operations of the Company, the Company hereby
represents and warrants that as of the date hereof:

 

(1)                                  the Company has the right to use all intellectual property
(the “Intellectual Property”) now used by it in its business;

 

(2)                                  the Company owns all right, title and interest in and to, all
of the intellectual property it owns, free and clear of any liens or
encumbrances;

 

(3)                                  in any case in which the Company does not own Intellectual
Property, it has good and valid licenses for the same which are in full force
and effect; and

 

(4)                                  no claims have been asserted with respect to the use of any
such Intellectual Property or challenging or questioning the validity or
effectiveness of any such license or agreement

 

(m)                               The Company shall use its best efforts to comply with all
requirements of the National Association of Securities Dealers, Inc. with
respect to the issuance of the Shares and the listing of the Shares on the
Nasdaq National Market.

 

5.                                       Representations
and Warranties of the Holder.  The Holder hereby represents and warrants
that:

 

(a)                                  Authorization.  Such Holder has full power and authority to
acknowledge and enter into this Warrant and the Registration Rights Agreement,
and this Warrant and the Registration Rights Agreement constitute valid and
legally binding obligation, enforceable in accordance with its terms except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium,
and other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies, and (iii)
to the extent the indemnification provisions contained in the Registration
Rights Agreement may be limited by applicable federal or state securities laws.

 

(b)                                 Purchase Entirely for Own Account.  This Warrant is
issued to such Holder in reliance upon such Holder’s representation to the
Company, which by such Holder’s acknowledgement of this Warrant such Holder
hereby confirms, that this Warrant and the Shares issuable upon exercise of
this Warrant to be received by such Holder (collectively, the “Securities”)
will be acquired for investment for such Holder’s own account, not as a nominee
or agent, and not with a view to the resale or distribution of any part
thereof, and that such Holder has no present intention of selling, granting any
participation in, or otherwise distributing the same.  By acknowledging this Warrant, such Holder
further represents that such Holder does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of
the Securities.

 

(c)                                  Investment Experience.  Such Holder is an investor in securities of
companies in the development stage and acknowledges that it is able to fend for
itself, can bear

 

5

 

the economic risk of its investment, and has such knowledge
and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in this Warrant.  If other than an individual, Holder also
represents it has not been organized for the purpose of acquiring this Warrant.

 

(d)                                 Accredited Investor.  Such Holder is an “accredited investor”
within the meaning of Securities and Exchange Commission (“SEC”) Rule 501 of
Regulation D, as presently in effect.

 

(e)                                  Restricted Securities.  Such Holder understands that the Securities
it is being issued are characterized as “restricted securities” under the
federal securities laws inasmuch as they are being acquired from the Company in
a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Act, only in certain limited circumstances. 
In this connection, such Holder represents that it is familiar with SEC Rule
144, as presently in effect, and understands the resale limitations imposed
thereby and by the Act.

 

(f)                                    Further Limitations on Disposition.  Without in any way
limiting the representations set forth above, such Holder further agrees not to
make any disposition of all or any portion of the Securities unless and until the
transferee has agreed in writing for the benefit of the Company to be bound by
this Section 5 and the Registration Rights Agreement provided and to the extent
this Section 5 and such agreement are then applicable, and:

 

(1)                                  There is then in effect a Registration Statement under the
Securities Act of 1933, as amended, covering such proposed disposition and such
disposition is made in accordance with such Registration Statement; or

 

(2)                                  (i) Such Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
reasonably requested by the Company, such Holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company that
such disposition will not require registration of such shares under the
Act.  It is agreed that the Company will
not require opinions of counsel for transactions made pursuant to SEC Rule 144
except in unusual circumstances.

 

(3)                                  Notwithstanding the provisions of Paragraphs (a) and (b) above,
no such registration statement or opinion of counsel shall be necessary for a
transfer by the Holder that is a partnership to a partner of such partnership
or a retired partner of such partnership who retires after the date hereof, or
to the estate of any such partner or retired partner or the transfer by gift,
will or intestate succession of any partner to his or her spouse or to the
siblings, lineal descendants or ancestors of such partner or his or her spouse,
if the transferee agrees in writing to be subject to the terms hereof to the
same extent as if he or she were an original Holder hereunder.

 

(g)                                 Legends.  It is understood that the certificates
evidencing the Securities may bear one or all of the following legends:

 

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(1)                                  “These securities have not been registered under the
Securities Act of 1933, as amended.  They
may not be sold, offered for sale, pledged or hypothecated in the absence of a
registration statement in effect with respect to the securities under such Act
or an opinion of counsel satisfactory to the Company that such registration is
not required or unless sold pursuant to Rule 144 of such Act.”

 

(2)                                  Any legend required by the laws of the State of California,
including any legend required by the California Department of Corporations and
Sections 417 and 418 of the California Corporations Code.

 

(3)                                  Any legend required by applicable blue sky law.

 

6.                                       Method of Exercise.  While this Warrant remains outstanding and
exercisable in accordance with Section 3 above, the Holder may exercise, in
whole or in part, the purchase rights evidenced hereby.  Such exercise shall be effected by.

 

(a)                                  the surrender of the Warrant, together with a duly executed
copy of the form of Notice of Election attached hereto, to the Secretary of the
Company at its principal offices; and

 

(b)                                 the payment to the Company of an amount equal to the
aggregate Exercise Price for the number of Shares being purchased.

 

7.                                       Assumption of
Warrant.  If at any time, while this
Warrant, or any portion thereof, is outstanding and unexpired there shall be (i)
an acquisition of the Company by another entity by means of a merger,
consolidation, or other transaction or series of related transactions resulting
in the exchange of the outstanding shares of the Company’s Capital Stock such
that shareholders of the Company prior to such transaction own, directly or
indirectly, less than 50% of the voting power of the surviving entity, or (ii) a
sale or transfer of all or substantially all of the Company’s assets to any
other person, then, as a part of such acquisition, sale or transfer, lawful provision
shall be made so that the Holder shall thereafter be entitled to receive upon
exercise of this Warrant, during the period specified herein and upon payment
of the Exercise Price then in effect, the number of shares of stock or other
securities or property of the successor corporation resulting from such
acquisition, sale or transfer which a holder of the shares deliverable upon
exercise of this Warrant would have been entitled to receive in such
acquisition, sale or transfer if this Warrant had been exercised immediately
before such acquisition, sale or transfer, all subject to further adjustment as
provided in this Section 7; and, in any such case, appropriate adjustment (as
determined by the Company’s Board of Directors) shall be made in the
application of the provisions herein set forth with respect to the rights and
interests thereafter of the Holder to the end that the provisions set forth
herein (including provisions with respect to changes in and other adjustments
of the number of Warrant Shares of the Holder is entitled to purchase) shall
thereafter by applicable, as nearly as possible, in relation to any shares of
Common Stock or other securities or other property thereafter deliverable upon
the exercise of this Warrant.

 

8.                                       Certificates
for Shares.  Upon the
exercise of the purchase rights evidenced by this Warrant, one or more
certificates for the number of Shares so purchased shall

 

7

 

be issued as soon as practicable thereafter (with appropriate
restrictive legends, if applicable), and in any event within thirty (30) days
of the delivery of the subscription notice.

 

9.                                       Issuance of
Shares.  The Company covenants that the
Shares, when issued pursuant to the exercise of this Warrant, will be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens,
and charges with respect to the issuance thereof.

 

10.                                 Adjustment of
Exercise Price and Number of Shares.  The number of and kind of securities
purchasable upon exercise of this Warrant and the Exercise Price shall be
subject to adjustment from time to time as follows:

 

(a)                                  Subdivisions, Combinations and Other Issuances.  If the Company shall
at any time prior to the expiration of this Warrant subdivide its Common Stock,
by split-up or otherwise, or combine its Common Stock, or issue additional
shares of its Common Stock or Common Stock as a dividend with respect to any
shares of its Common Stock, the number of Shares issuable on the exercise of
this Warrant shall forthwith be proportionately increased in the case of a
subdivision or stock dividend, or proportionately decreased in the case of a
combination.  Appropriate adjustments
shall also be made to the purchase price payable per share, but the aggregate
purchase price payable for the total number of Shares purchasable under this
Warrant (as adjusted) shall remain the same. 
Any adjustment under this Section 10(a) shall become effective at the
close of business on the date the subdivision or combination becomes effective,
or as of the record date of such dividend, or in the event that no record date
is fixed, upon the making of such dividend.

 

(b)                                 Reclassification, Reorganization and Consolidation.  In case of any
reclassification, capital reorganization, or change in the Common Stock of the
Company (other than as a result of a subdivision, combination, or stock
dividend provided for in Section 10(a) above), then, as a condition of such
reclassification, reorganization, or change, lawful provision shall be made,
and duly executed documents evidencing the same from the Company or its
successor shall be delivered to the Holder, so that the Holder shall have the
right at any time prior to the expiration of this Warrant to purchase, at a
total price equal to that payable upon the exercise of this Warrant, the kind
and amount of shares of stock and other securities and property receivable in
connection with such reclassification, reorganization, or change by a holder of
the same number of shares of Common Stock as were purchasable by the Holder
immediately prior to such reclassification, reorganization, or change.  In any such case appropriate provisions shall
be made with respect to the rights and interest of the Holder so that the
provisions hereof shall thereafter be applicable with respect to any shares of
stock or other securities and property deliverable upon exercise hereof, and
appropriate adjustments shall be made to the purchase price per share payable
hereunder, provided the aggregate purchase price shall remain the same.

 

(c)                                  Notice of Adjustment.  When any adjustment is required to be made in
the number or kind of shares purchasable upon exercise of the Warrant, or in
the Exercise Price, the Company shall promptly notify the holder of such event
and of the number of shares of Common Stock or other securities or property
thereafter purchasable upon exercise of this Warrant.

 

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11.                                 Withholding
Taxes.  In the event that the Company
determines that it is required to withhold any tax as a result of the exercise
of this Warrant, the Holder, as a condition to the exercise of this Warrant,
shall make arrangements satisfactory to the Company to enable it to satisfy all
withholding requirements.  The Holder
shall also make arrangements satisfactory to the Company to enable it to
satisfy any withholding requirements that may arise in connection with the
vesting or disposition of Shares purchased by exercising this Warrant.

 

12.                                 No Fractional
Shares or Scrip.  No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant, but in lieu of such fractional shares the Company
shall make a cash payment therefor on the basis of the Exercise Price then in
effect.

 

13.                                 No Shareholder
Rights.  Prior to exercise of this
Warrant, the Holder shall not be entitled to any rights of a shareholder with
respect to the Shares, including (without limitation) the right to vote such
Shares, receive dividends or other distributions thereon, exercise preemptive
rights or be notified of shareholder meetings, and such holder shall not be
entitled to any notice or other communication concerning the business or
affairs of the Company.  However, nothing
in this Section 13 shall limit the right of the Holder to be provided the
Notices required under this Warrant.

 

14.                                 Transfers of
Warrant.  Subject to compliance with
applicable federal and state securities laws, this Warrant and all rights
hereunder are transferable in whole or in part by the Holder to any person or
entity upon written notice to the Company. 
The transfer shall be recorded on the books of the Company upon the
surrender of this Warrant, properly endorsed, to the Company at its principal
offices, and the payment to the Company of all transfer taxes and other
governmental charges imposed on such transfer. 
In the event of a partial transfer, the Company shall issue to the holders
one or more appropriate new warrants.

 

15.                                 Successors and
Assigns.  The terms and provisions of
this Warrant shall inure to the benefit of, and be binding upon, the Company
and the Holders hereof and their respective successors and assigns.

 

16.                                 Amendments and
Waivers.  Any term of this Warrant may
be amended and the observance of any term of this Warrant may be waived (either
generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the Holder.

 

17.                                 Notices.  All notices required under this Warrant and
shall be deemed to have been given or made for all purposes (i) upon personal
delivery, (ii) upon confirmation receipt that the communication was
successfully sent to the applicable number if sent by facsimile; (iii) one day
after being sent, when sent by professional overnight courier service, or (iv) five
days after posting when sent by registered or certified mail.  Notices to the Company shall be sent to the
principal office of the Company (or at such other place as the Company shall
notify the Holder, hereof in writing). 
Notices to the Holder shall be sent to the address of the Holder on the
books of the Company (or at such other place as the Holder shall notify the
Company hereof in writing).

 

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18.                                 Attorneys’ Fees.  If any action of law or equity is necessary
to enforce or interpret the terms of this Warrant, the prevailing party shall
be entitled to its reasonable attorneys’ fees, costs and disbursements in
addition to any other relief to which it may be entitled.

 

19.                                 Captions.  The section and subsection headings of this
Warrant are inserted for convenience only and shall not constitute a part of
this Warrant in construing or interpreting any provision hereof.

 

20.                                 Governing Law.  This Warrant shall be governed by the laws of
the State of California as applied to agreements among California residents
made and to be performed entirely within the State of California.

 

21.                                 Definitions.

 

(a)                                  “Board of Directors” shall mean the Board of Directors of the
Company, as constituted from time to time or, if a Committee has been
appointed, such Committee.

 

(b)                                 “Change in Control” shall mean:

 

(1)                                  The consummation of a merger or consolidation of the Company
with or into another entity or any other corporate reorganization, if persons
who were not shareholders of the Company immediately prior to such merger,
consolidation or other reorganization own immediately after such merger,
consolidation or other reorganization 50% or more of the voting power of the
outstanding securities of each of (A) the continuing or surviving entity and (B)
any direct or indirect parent corporation of such continuing or surviving
entity; or

 

(2)                                  The sale, transfer or other disposition of all or
substantially all of the Company’s assets.

 

A transaction shall not
constitute a Change in Control if its sole purpose is to change the state of
the Company’s incorporation or to create a holding company that will be owned
in substantially the same proportions by the persons who held the Company’s
securities immediately before such transaction.

 

(c)                                  “Code” shall mean the Internal Revenue Code of 1986, as
amended.

 

(d)                                 “Company” shall mean Digital Generation Systems, Inc., a
California corporation.

 

(e)                                  “Consultant” shall mean an individual who performs bona fide
services for the Company, a Parent or a Subsidiary as a consultant or advisor,
excluding Employees and Outside Directors.

 

(f)                                    “Employee” shall mean any individual who is a common-law
employee of the Company, a Parent or a Subsidiary.

 

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(g)                                 “Fair Market Value” shall mean the fair market value of a
Share, as determined by the Board of Directors in good faith.  Such determination shall be conclusive and
binding on all persons.

 

(h)                                 “Outside Director” shall mean a member of the Board of
Directors who is not an Employee.

 

(i)                                     “Outside Director” shall mean a member of the Board of
Directors who is not an Employee.

 

(j)                                     “Parent” shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

 

(k)                                  “Securities Act” shall mean the Securities Act of 1933, as
amended

 

(l)                                     “Service” shall mean service as an Employee, Outside Director
or Consultant.

 

(m)                               “Subsidiary” shall mean any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company, if
each of the corporations other than the last corporation in the unbroken chain
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

 

(n)                                 “Warrant” shall mean this Warrant.

 

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IN WITNESS WHEREOF, DG
FastChannel, Inc. caused this Warrant to be executed by an officer thereunto
duly authorized.

 

	
   

  	
   

  	
  DG
  FastChannel, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED
  AND AGREED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Moon
  Doggie Family Partnership, L.P.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Scott
  K. Ginsburg, Partner

  	
   

  	
   

  

 

SIGNATURE
PAGE TO WARRANT NO. 1 TO PURCHASE COMMON STOCK

OF DG FASTCHANNEL, INC.

 

 

NOTICE OF EXERCISE

 

To:  DG FASTCHANNEL, INC.

 

The undersigned hereby
elects to purchase                                                shares of Common Stock of DG FastChannel, Inc.,
pursuant to the terms of the attached Warrant and payment of the Exercise Price
per share required under such Warrant accompanies this notice.

 

The undersigned hereby
represents and warrants that the undersigned is acquiring such shares for its
own account for investment purposes only, and not for resale or with a view to
distribution of such shares or any part thereof.

 

 

	
   

  	
   

  	
  WARRANTHOLDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name
  in which shares should be registered:Exhibit
10.2

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON
THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933.  THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

 

WARRANT NO. 2 TO PURCHASE
COMMON STOCK

of

DG FASTCHANNEL, INC.

 

Void after December 31,
2010

 

This Warrant is issued to
Moon Doggie Family Partnership, L.P., or its assigns (“Holder”) by DG
FastChannel, Inc. (the “Company”), on a restatement in its entirety of
that Warrant No. 2 issued on December 9, 1998, and as previously
amended.

 

1.                                       Purchase Shares.  Subject to the terms and conditions
hereinafter set forth, the Holder is entitled, upon surrender of this Warrant
at the principal office of the Company (or at such other place as the Company
shall notify the holder hereof in writing), to purchase from the Company up to
one hundred fifty four thousand, eight hundred forty six (154,846) fully paid
and nonassessable shares of Common Stock of the Company, (the “Common Stock”).  The number of shares of Common Stock issuable
pursuant to this Section 1 (the “Shares”) shall be subject to adjustment
pursuant to Section 10 hereof.

 

2.                                       Exercise Price.  The purchase price for the Shares shall be
$10.00, as adjusted from time to time pursuant to Section 10 hereof (the “Exercise
Price”).  Notwithstanding any provisions
herein to the contrary, if the fair market value of one share of Common Stock
is greater than the Purchase Price for one share of Common Stock (at the date
of calculation, as set forth below), in lieu of exercising this Warrant for
cash, the Holder may elect to receive shares of Common Stock equal to the value
(as determined below) of this Warrant (or the portion thereof being canceled)
by surrender of this Warrant at the principal office of the Company, together
with the properly endorsed Warrant Certificate, substantially in the form as
attached hereto, in which event the Company shall issue to the Holder that
number of shares of Common Stock computed using the following formula:

 

WS = WCS (FMV-PP)

FMV

 

WHERE:

 

WS                            equals the
number of Warrant Shares to be issued to the Holder;

 

 

WCS                    equals the number of shares
of Common Stock purchasable under the Warrant or, if only a portion of the
Warrant is being exercised, the portion of the Warrant being canceled (at the
date of such calculation);

 

FMV                     equals the Fair Market Value
(as defined below) of one share of Common Stock (at the date of such
calculation); and

 

PP                                  equals the per
share Purchase Price (as adjusted to the date of such calculation) of the Warrant.

 

As
used in this Section, the term “Fair Market Value” of each Share as of any date
shall be the closing bid price of the Company’s common stock as reported on the
Nasdaq Global Market (or other recognized trading market if the common stock is
not listed on Nasdaq) on the trading day immediately preceding the date of
exercise.

 

3.                                       Exercise Period.  This Warrant shall not be exercisable prior
to December 9, 1999.

 

4.                                       Representations
and Warranties of the Company.  The Company hereby represents and warrants to
the Holder that:

 

(a)                                  Authorization.  All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Warrant and that certain
Registration Rights Agreement of even date herewith, by and between the Company
and certain investors (the “Registration Rights Agreement”), the performance of
all obligations of the Company hereunder and thereunder, and the authorization,
issuance (or reservation for issuance), and delivery of this Warrant and the
Shares issuable upon conversion of this Warrant has been taken or will be taken
prior to the date hereof, and this Warrant and the Registration Rights
Agreement constitute valid and legally binding obligations of the Company,
enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws
of general application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies, and (iii) to the extent
the indemnification provisions contained in the Registration Rights Agreement
may be limited by applicable federal or state securities laws.

 

(b)                                 Valid Issuance.  This Warrant, when issued, sold and delivered
in accordance with the terms set forth herein and in consideration for the
Service provided by the Holder, will be duly and validly issued, fully paid,
and nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer under this Warrant and the Registration Rights
Agreement and under applicable state and federal securities laws.  The Shares issuable upon conversion of this
Warrant have been duly and validly reserved for issuance and, upon issuance in
accordance with the terms of the Company’s Amended Certificate of
Incorporation, will be duly and validly issued, fully paid, and nonassessable
and will be free of restrictions on transfer other than restrictions on
transfer under this Warrant and the Registration Rights Agreement and under
applicable state and federal securities laws, The Company agrees that, prior to
the expiration of this Warrant, the Company will at all time have authorized
and 

 

2

 

reserved, and will keep available, solely for issuance or
delivery upon the exercise of this Warrant, the number of shares of Common
Stock as from time to time shall be issuable upon the exercise of this Warrant.

 

(c)                                  Offering.  Subject in part to the truth and accuracy of
the Holder’s representations set forth in Section 5 of this Warrant, the
offer, sale and issuance of this Warrant is exempt from the registration
requirements of any applicable state and federal securities laws, and neither
the Company nor any authorized agent acting on its behalf will take any action
hereafter that would cause the loss of such exemption.

 

(d)                                 Non-Contravention.  To the best of the Company’s knowledge, the
execution and delivery of this Warrant, the issuance of the Shares to be issued
by the Company upon conversion of this Warrant, and the consummation of the
transactions contemplated hereby will not conflict with or constitute a
violation of, or default (with the passage of time or otherwise) under, any
material agreement or instrument to which the Company is a party or by which it
is bound or the Certificate of Incorporation (the “Charter”) or the Bylaws of
the Company nor result in the creation or imposition of any lien, encumbrance,
claim, security interest or restriction whatsoever upon any of the material
properties or assets of the Company or an acceleration of indebtedness pursuant
to any obligation, agreement or condition contained in any material bond,
debenture, note or any other evidence of indebtedness or any material
indenture, mortgage, deed of trust or any either agreement or instrument to
which the Company is a party or by which the Company is bound or to which any
of the property or assets of the Company is subject, nor conflict with, or
result in a violation of, any law, administrative regulation, ordinance or
order of any court or governmental agency, arbitration panel or authority
applicable to the Company.  No consent,
approval, authorization or other order of, or registration, qualification or
filing with, any regulatory body, administrative agency, or other governmental
body in the United States, other than with respect to “blue sky” laws, is
required for the valid issuance of this Warrant or the Shares to be issued upon
conversion of this Warrant (other than such as have been made or obtained).

 

(e)                                  Capitalization.  All documents that the Company was required
to file under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), during the twelve (12) months preceding the date of this Warrant (the “SEC
Filings”) accurately reflected the capitalization of the Company as of their
respective filing or effective dates, as the case may be.  The Shares and the shares of Common Stock
issuable upon conversion of that certain Warrant No. 1 to Purchase Common
Stock of even date herewith issued to the Holder (together, the “Combined
Shares”) represent greater than fifty percent (50%) of the sum of (a) the
Combined Shares and (b) the number of shares of Common Stock of the
Company issuable upon exercise of those warrants issued pursuant to that
certain Common Stock and Warrant Purchase Agreement of even date herewith, by
and among the Company and certain investors.

 

(f)                                    Legal Proceedings.  Except as disclosed in the SEC Filings, there
is no material legal or governmental proceeding pending or, to the knowledge of
the Company, threatened or contemplated to which the Company is or may be a
party or of which the business or property of the Company is or may be subject.

 

3

 

(g)                                 No Violations.  Except as disclosed in the SEC Filings, the
Company is not in violation of its Charter or Bylaws, in violation of any law,
administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority applicable to the Company, which
violation, individually or in the aggregate, would have a material adverse
effect on the business or financial condition of the Company, or in default in
any material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness in any indenture, mortgage, deed of trust or any other agreement
or instrument to which the Company is a party or by which the Company is bound
or by which the properties of the Company are bound or affected, which default,
individually or in the aggregate, would have a material adverse effect on the
business or financial condition of the Company or which would have otherwise
have a material adverse effect on the Holder, and there exists no condition
which, with the passage of time or the giving of notice or both, would
constitute a material default under any such document or instrument or result
in the imposition of any material penalty or the acceleration of any
indebtedness.

 

(h)                                 Governmental Permits, Etc.  Except as disclosed in the SEC Filings, the
Company has all necessary franchises, licenses, certificates and other
authorizations from any foreign, federal, state or local government or
governmental agency, department, or body that are currently necessary for the
operation of the business of the Company as currently conducted, the absence of
which would have a material adverse effect on the business or operations of the
Company.

 

(i)                                     Financial Statements.  Except as disclosed in the SEC Filings, the
financial statements of the Company and the related notes contained in the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
1997 and its Quarterly Report on Form 10-Q for the quarter ended September 30,
1998, present fairly the financial position of the Company as of the dates
indicated therein and its results of operations and cash flows for the periods
therein specified.  Such financial statements
(including the related notes) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods therein specified.

 

(j)                                     No Material Adverse Charge.  Except as disclosed in the SEC Filings, since
September 30, 1998, there has not been any material adverse change in its
business, financial condition or results of operations.

 

(k)                                  Additional Information.  The Company has filed in a timely manner all
SEC Filings.  The SEC Filings complied in
all material respects with the requirements of the Exchange Act or the
Securities Act of 1933, as amended (the “Securities Act”), as the case may be,
as of their respective filing or effective dates, and the information contained
therein was true and correct in all material respects as of the date or
effective date of such documents, and each of the SEC Filings, as of such date,
did not contain an untrue statement of material fact or omit to state a
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.

 

(l)                                     Intellectual Property.  Except to the extent that the failure to
comply with any of the following statements would not have a material adverse
effect on the 

 

4

 

business or operations of the Company, the Company hereby
represents and warrants that as of the date hereof:

 

(1)                                  the Company has the right to use all intellectual property
(the “Intellectual Property”) now used by it in its business;

 

(2)                                  the Company owns all right, title and interest in and to, all
of the intellectual property it owns, free and clear of any liens or
encumbrances;

 

(3)                                  in any case in which the Company does not own Intellectual
Property, it has good and valid licenses for the same which are in full force
and effect; and

 

(4)                                  no claims have been asserted with respect to the use of any
such Intellectual Property or challenging or questioning the validity or
effectiveness of any such license or agreement

 

(m)                               The Company shall use its best efforts to comply with all
requirements of the National Association of Securities Dealers, Inc. with
respect to the issuance of the Shares and the listing of the Shares on the
Nasdaq National Market.

 

5.                                       Representations
and Warranties of the Holder.  The Holder hereby represents and warrants
that:

 

(a)                                  Authorization.  Such Holder has full power and authority to
acknowledge and enter into this Warrant and the Registration Rights Agreement,
and this Warrant and the Registration Rights Agreement constitute valid and
legally binding obligation, enforceable in accordance with its terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies, and (iii) to
the extent the indemnification provisions contained in the Registration Rights
Agreement may be limited by applicable federal or state securities laws.

 

(b)                                 Purchase Entirely for Own Account.  This Warrant is
issued to such Holder in reliance upon such Holder’s representation to the
Company, which by such Holder’s acknowledgement of this Warrant such Holder
hereby confirms, that this Warrant and the Shares issuable upon exercise of
this Warrant to be received by such Holder (collectively, the “Securities”)
will be acquired for investment for such Holder’s own account, not as a nominee
or agent, and not with a view to the resale or distribution of any part
thereof, and that such Holder has no present intention of selling, granting any
participation in, or otherwise distributing the same.  By acknowledging this Warrant, such Holder
further represents that such Holder does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of
the Securities.

 

(c)                                  Investment Experience.  Such Holder is an investor in securities of
companies in the development stage and acknowledges that it is able to fend for
itself, can bear 

 

5

 

the economic risk of its investment, and has such knowledge
and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in this Warrant.  If other than an individual, Holder also represents
it has not been organized for the purpose of acquiring this Warrant.

 

(d)                                 Accredited Investor.  Such Holder is an “accredited investor”
within the meaning of Securities and Exchange Commission (“SEC”) Rule 501
of Regulation D, as presently in effect.

 

(e)                                  Restricted Securities.  Such Holder understands that the Securities
it is being issued are characterized as “restricted securities” under the
federal securities laws inasmuch as they are being acquired from the Company in
a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Act, only in certain limited circumstances. 
In this connection, such Holder represents that it is familiar with SEC Rule 144,
as presently in effect, and understands the resale limitations imposed thereby
and by the Act.

 

(f)                                    Further Limitations on Disposition.  Without in any way
limiting the representations set forth above, such Holder further agrees not to
make any disposition of all or any portion of the Securities unless and until
the transferee has agreed in writing for the benefit of the Company to be bound
by this Section 5 and the Registration Rights Agreement provided and to
the extent this Section 5 and such agreement are then applicable, and:

 

(1)                                  There is then in effect a Registration Statement under the
Securities Act of 1933, as amended, covering such proposed disposition and such
disposition is made in accordance with such Registration Statement; or

 

(2)                                  (i) Such Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
reasonably requested by the Company, such Holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company that
such disposition will not require registration of such shares under the
Act.  It is agreed that the Company will
not require opinions of counsel for transactions made pursuant to SEC Rule 144
except in unusual circumstances.

 

(3)                                  Notwithstanding the provisions of Paragraphs (a) and (b) above,
no such registration statement or opinion of counsel shall be necessary for a
transfer by the Holder that is a partnership to a partner of such partnership
or a retired partner of such partnership who retires after the date hereof, or
to the estate of any such partner or retired partner or the transfer by gift,
will or intestate succession of any partner to his or her spouse or to the
siblings, lineal descendants or ancestors of such partner or his or her spouse,
if the transferee agrees in writing to be subject to the terms hereof to the
same extent as if he or she were an original Holder hereunder.

 

(g)                                 Legends.  It is understood that the certificates
evidencing the Securities may bear one or all of the following legends:

 

6

 

(1)                                  “These securities have not been registered under the
Securities Act of 1933, as amended.  They
may not be sold, offered for sale, pledged or hypothecated in the absence of a
registration statement in effect with respect to the securities under such Act
or an opinion of counsel satisfactory to the Company that such registration is
not required or unless sold pursuant to Rule 144 of such Act.”

 

(2)                                  Any legend required by the laws of the State of California,
including any legend required by the California Department of Corporations and
Sections 417 and 418 of the California Corporations Code.

 

(3)                                  Any legend required by applicable blue sky law.

 

6.                                       Method of
Exercise.  While this
Warrant remains outstanding and exercisable in accordance with Section 3
above, the Holder may exercise, in whole or in part, the purchase rights
evidenced hereby.  Such exercise shall be
effected by.

 

(a)                                  the surrender of the Warrant, together with a duly executed
copy of the form of Notice of Election attached hereto, to the Secretary of the
Company at its principal offices; and

 

(b)                                 the payment to the Company of an amount equal to the
aggregate Exercise Price for the number of Shares being purchased.

 

7.                                       Assumption of
Warrant.  If at any time, while this
Warrant, or any portion thereof, is outstanding and unexpired there shall be (i) an
acquisition of the Company by another entity by means of a merger,
consolidation, or other transaction or series of related transactions resulting
in the exchange of the outstanding shares of the Company’s Capital Stock such
that shareholders of the Company prior to such transaction own, directly or
indirectly, less than 50% of the voting power of the surviving entity, or (ii) a
sale or transfer of all or substantially all of the Company’s assets to any
other person, then, as a part of such acquisition, sale or transfer, lawful provision
shall be made so that the Holder shall thereafter be entitled to receive upon
exercise of this Warrant, during the period specified herein and upon payment
of the Exercise Price then in effect, the number of shares of stock or other
securities or property of the successor corporation resulting from such acquisition,
sale or transfer which a holder of the shares deliverable upon exercise of this
Warrant would have been entitled to receive in such acquisition, sale or
transfer if this Warrant had been exercised immediately before such
acquisition, sale or transfer, all subject to further adjustment as provided in
this Section 7; and, in any such case, appropriate adjustment (as
determined by the Company’s Board of Directors) shall be made in the
application of the provisions herein set forth with respect to the rights and
interests thereafter of the Holder to the end that the provisions set forth
herein (including provisions with respect to changes in and other adjustments
of the number of Warrant Shares of the Holder is entitled to purchase) shall
thereafter by applicable, as nearly as possible, in relation to any shares of
Common Stock or other securities or other property thereafter deliverable upon
the exercise of this Warrant.

 

8.                                       Certificates
for Shares.  Upon the
exercise of the purchase rights evidenced by this Warrant, one or more
certificates for the number of Shares so purchased shall 

 

7

 

be issued as soon as practicable thereafter (with appropriate
restrictive legends, if applicable), and in any event within thirty (30) days
of the delivery of the subscription notice.

 

9.                                       Issuance of
Shares.  The Company covenants that the
Shares, when issued pursuant to the exercise of this Warrant, will be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens,
and charges with respect to the issuance thereof.

 

10.                                 Adjustment of
Exercise Price and Number of Shares.  The number of and kind of securities
purchasable upon exercise of this Warrant and the Exercise Price shall be
subject to adjustment from time to time as follows:

 

(a)                                  Subdivisions, Combinations and Other Issuances.  If the Company shall
at any time prior to the expiration of this Warrant subdivide its Common Stock,
by split-up or otherwise, or combine its Common Stock, or issue additional
shares of its Common Stock or Common Stock as a dividend with respect to any
shares of its Common Stock, the number of Shares issuable on the exercise of
this Warrant shall forthwith be proportionately increased in the case of a
subdivision or stock dividend, or proportionately decreased in the case of a
combination.  Appropriate adjustments
shall also be made to the purchase price payable per share, but the aggregate
purchase price payable for the total number of Shares purchasable under this
Warrant (as adjusted) shall remain the same. 
Any adjustment under this Section 10(a) shall become effective
at the close of business on the date the subdivision or combination becomes
effective, or as of the record date of such dividend, or in the event that no
record date is fixed, upon the making of such dividend.

 

(b)                                 Reclassification, Reorganization and Consolidation.  In case of any reclassification,
capital reorganization, or change in the Common Stock of the Company (other
than as a result of a subdivision, combination, or stock dividend provided for
in Section 10(a) above), then, as a condition of such
reclassification, reorganization, or change, lawful provision shall be made,
and duly executed documents evidencing the same from the Company or its
successor shall be delivered to the Holder, so that the Holder shall have the
right at any time prior to the expiration of this Warrant to purchase, at a
total price equal to that payable upon the exercise of this Warrant, the kind
and amount of shares of stock and other securities and property receivable in
connection with such reclassification, reorganization, or change by a holder of
the same number of shares of Common Stock as were purchasable by the Holder
immediately prior to such reclassification, reorganization, or change.  In any such case appropriate provisions shall
be made with respect to the rights and interest of the Holder so that the
provisions hereof shall thereafter be applicable with respect to any shares of
stock or other securities and property deliverable upon exercise hereof, and
appropriate adjustments shall be made to the purchase price per share payable
hereunder, provided the aggregate purchase price shall remain the same.

 

(c)                                  Notice of Adjustment.  When any adjustment is required to be made in
the number or kind of shares purchasable upon exercise of the Warrant, or in
the Exercise Price, the Company shall promptly notify the holder of such event
and of the number of shares of Common Stock or other securities or property
thereafter purchasable upon exercise of this Warrant.

 

8

 

11.                                 Withholding
Taxes.  In the event that the Company
determines that it is required to withhold any tax as a result of the exercise
of this Warrant, the Holder, as a condition to the exercise of this Warrant,
shall make arrangements satisfactory to the Company to enable it to satisfy all
withholding requirements.  The Holder
shall also make arrangements satisfactory to the Company to enable it to
satisfy any withholding requirements that may arise in connection with the
vesting or disposition of Shares purchased by exercising this Warrant.

 

12.                                 No Fractional
Shares or Scrip.  No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant, but in lieu of such fractional shares the Company
shall make a cash payment therefor on the basis of the Exercise Price then in
effect.

 

13.                                 No Shareholder
Rights.  Prior to exercise of this
Warrant, the Holder shall not be entitled to any rights of a shareholder with
respect to the Shares, including (without limitation) the right to vote such
Shares, receive dividends or other distributions thereon, exercise preemptive
rights or be notified of shareholder meetings, and such holder shall not be
entitled to any notice or other communication concerning the business or
affairs of the Company.  However, nothing
in this Section 13 shall limit the right of the Holder to be provided the
Notices required under this Warrant.

 

14.                                 Transfers of
Warrant.  Subject to compliance with
applicable federal and state securities laws, this Warrant and all rights
hereunder are transferable in whole or in part by the Holder to any person or
entity upon written notice to the Company. 
The transfer shall be recorded on the books of the Company upon the
surrender of this Warrant, properly endorsed, to the Company at its principal
offices, and the payment to the Company of all transfer taxes and other
governmental charges imposed on such transfer. 
In the event of a partial transfer, the Company shall issue to the
holders one or more appropriate new warrants.

 

15.                                 Successors and
Assigns.  The terms and provisions of
this Warrant shall inure to the benefit of, and be binding upon, the Company
and the Holders hereof and their respective successors and assigns.

 

16.                                 Amendments and
Waivers.  Any term of this Warrant may
be amended and the observance of any term of this Warrant may be waived (either
generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the Holder.

 

17.                                 Notices.  All notices required under this Warrant and
shall be deemed to have been given or made for all purposes (i) upon
personal delivery, (ii) upon confirmation receipt that the communication
was successfully sent to the applicable number if sent by facsimile; (iii) one
day after being sent, when sent by professional overnight courier service, or (iv) five
days after posting when sent by registered or certified mail.  Notices to the Company shall be sent to the
principal office of the Company (or at such other place as the Company shall
notify the Holder, hereof in writing). 
Notices to the Holder shall be sent to the address of the Holder on the
books of the Company (or at such other place as the Holder shall notify the
Company hereof in writing).

 

9

 

18.                                 Attorneys’ Fees.  If any action of law or equity is necessary
to enforce or interpret the terms of this Warrant, the prevailing party shall
be entitled to its reasonable attorneys’ fees, costs and disbursements in
addition to any other relief to which it may be entitled.

 

19.                                 Captions.  The section and subsection headings of this
Warrant are inserted for convenience only and shall not constitute a part of
this Warrant in construing or interpreting any provision hereof.

 

20.                                 Governing Law.  This Warrant shall be governed by the laws of
the State of California as applied to agreements among California residents
made and to be performed entirely within the State of California.

 

21.                                 Definitions.

 

(a)                                  “Board of Directors” shall mean the Board of Directors of the
Company, as constituted from time to time or, if a Committee has been
appointed, such Committee.

 

(b)                                 “Change in Control” shall mean:

 

(1)                                  The consummation of a merger or consolidation of the Company
with or into another entity or any other corporate reorganization, if persons
who were not shareholders of the Company immediately prior to such merger,
consolidation or other reorganization own immediately after such merger,
consolidation or other reorganization 50% or more of the voting power of the
outstanding securities of each of (A) the continuing or surviving entity
and (B) any direct or indirect parent corporation of such continuing or
surviving entity; or

 

(2)                                  The sale, transfer or other disposition of all or
substantially all of the Company’s assets.

 

A transaction shall not
constitute a Change in Control if its sole purpose is to change the state of
the Company’s incorporation or to create a holding company that will be owned
in substantially the same proportions by the persons who held the Company’s
securities immediately before such transaction.

 

(c)                                  “Code” shall mean the Internal Revenue Code of 1986, as
amended.

 

(d)                                 “Company” shall mean Digital Generation Systems, Inc., a
California corporation.

 

(e)                                  “Consultant” shall mean an individual who performs bona fide services
for the Company, a Parent or a Subsidiary as a consultant or advisor, excluding
Employees and Outside Directors.

 

(f)                                    “Employee” shall mean any individual who is a common-law
employee of the Company, a Parent or a Subsidiary.

 

10

 

(g)                                 “Fair Market Value” shall mean the fair market value of a
Share, as determined by the Board of Directors in good faith.  Such determination shall be conclusive and
binding on all persons.

 

(h)                                 “Outside Director” shall mean a member of the Board of
Directors who is not an Employee.

 

(i)                                     “Outside Director” shall mean a member of the Board of
Directors who is not an Employee.

 

(j)                                     “Parent” shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

 

(k)                                  “Securities Act” shall mean the Securities Act of 1933, as
amended

 

(l)                                     “Service” shall mean service as an Employee, Outside Director
or Consultant.

 

(m)                               “Subsidiary” shall mean any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company, if each
of the corporations other than the last corporation in the unbroken chain owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.

 

(n)                                 “Warrant” shall mean this Warrant.

 

11

 

IN WITNESS WHEREOF, DG
FastChannel, Inc. caused this Warrant to be executed by an officer
thereunto duly authorized.

 

	
   

  	
   

  	
  DG
  FastChannel, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED
  AND AGREED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Moon
  Doggie Family Partnership, L.P.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Scott
  K. Ginsburg, Partner

  	
   

  	
   

  

 

SIGNATURE PAGE
TO WARRANT NO. 2 TO PURCHASE COMMON STOCK

OF DG FASTCHANNEL, INC.

 

 

NOTICE OF EXERCISE

 

To:  DG FASTCHANNEL, INC.

 

The undersigned hereby
elects to purchase
                                              
shares of Common Stock of DG FastChannel, Inc., pursuant to the terms of
the attached Warrant and payment of the Exercise Price per share required under
such Warrant accompanies this notice.

 

The undersigned hereby
represents and warrants that the undersigned is acquiring such shares for its
own account for investment purposes only, and not for resale or with a view to
distribution of such shares or any part thereof.

 

 

	
   

  	
   

  	
  WARRANTHOLDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name
  in which shares should be registered:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}]]