-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Knjt259suy/lEfTlHsUJts+S89IPja4vZPVgvHDr2KZA9QCRPgjQ7jAY2QENDocT PgOfU5F14X3IQQRjoCStMQ== 0000935836-98-000054.txt : 19980223 0000935836-98-000054.hdr.sgml : 19980223 ACCESSION NUMBER: 0000935836-98-000054 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19980220 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DIGITAL GENERATION SYSTEMS INC CENTRAL INDEX KEY: 0000934448 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ADVERTISING AGENCIES [7311] IRS NUMBER: 943140772 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-49603 FILM NUMBER: 98546485 BUSINESS ADDRESS: STREET 1: 875 BATTERY ST STREET 2: STE 1850 CITY: SAN FRANCISCO STATE: CA ZIP: 94111 BUSINESS PHONE: 4155466600 MAIL ADDRESS: STREET 1: 875 BATTERY ST CITY: SAN FRANCISCO STATE: CA ZIP: 94111 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LONDON MERCHANT SECURITIES PLC CENTRAL INDEX KEY: 0001038946 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: X0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: CARLTON HOUSE STREET 2: 33 ROBERT ADAM ST CITY: LONDON STATE: X0 ZIP: 00000 MAIL ADDRESS: STREET 1: CARLTON HOUSE STREET 2: 33 ROBERT ADAM ST CITY: LONDON STATE: X0 ZIP: 00000 SC 13D/A 1 OMB APPROVAL OMB Number:3235-0145 Expires:August 31, 1999 Estimated average burden hours per form 14.90 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 2) Digital Generation Systems, Inc. (Name of Issuer) Common Stock - ------------------------------------------------------------------- (Title of Class of Securities) 125708107 (CUSIP Number) Benjamin L. Douglas, Esq. c/o Shartsis, Friese & Ginsburg LLP One Maritime Plaza, 18th Floor San Francisco, California 94111 (415) 421-6500 - ------------------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) February 10, 1998 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. SEC 1746 (10-97) SEC 1746 (10-97) SCHEDULE 13D CUSIP No. 125708107 Page 2 of 15 Pages - ------------------------------------------------------------------ 1 NAME OF REPORTING PERSON SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON London Merchant Securities plc - ------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /*/ (b) / / - ------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------ 4 SOURCE OF FUNDS* WC - ------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / - ------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION United Kingdom - ------------------------------------------------------------------ NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY ----------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH 1,222,500 REPORTING ----------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH -0- ----------------------------------------- 10 SHARED DISPOSITIVE POWER 1,222,500 - ------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,222,500 - ------------------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - ------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 10.1% - ------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON* 00 - ------------------------------------------------------------------ *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D CUSIP No. 125708107 Page 3 of 15 Pages - ---------------------------------------------------------------- 1 NAME OF REPORTING PERSON SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON Lion Investments Limited - ---------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /*/ (b) / / - ---------------------------------------------------------------- 3 SEC USE ONLY - ---------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ---------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / - ---------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United Kingdom - ---------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 430,000 BENEFICIALLY --------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH -0- REPORTING --------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH 430,000 --------------------------------------- 10 SHARED DISPOSITIVE POWER -0- - ---------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 430,000 - ---------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - ---------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.5% - ---------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - ---------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D CUSIP No. 125708107 Page 4 of 15 Pages - ---------------------------------------------------------------- 1 NAME OF REPORTING PERSON SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON Westpool Investment Trust plc - ---------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /*/ (b) / / - ---------------------------------------------------------------- 3 SEC USE ONLY - ---------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ---------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / - ---------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United Kingdom - ---------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 792,500 BENEFICIALLY --------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH -0- REPORTING --------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH 792,500 --------------------------------------- 10 SHARED DISPOSITIVE POWER -0- - ---------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 792,500 - ---------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - ---------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.5% - ---------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* 00 - ---------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D CUSIP No. 125708107 Page 5 of 15 Pages - ---------------------------------------------------------------- 1 NAME OF REPORTING PERSON SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON Robert A. Rayne - ---------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /*/ (b) / / - ---------------------------------------------------------------- 3 SEC USE ONLY - ---------------------------------------------------------------- 4 SOURCE OF FUNDS* PF - ---------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / - ---------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United Kingdom - ---------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 72,500 BENEFICIALLY --------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH -0- REPORTING --------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH 72,500 --------------------------------------- 10 SHARED DISPOSITIVE POWER -0- - ---------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 72,500 - ---------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - ---------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.6% - ---------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - ---------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D CUSIP No. 125708107 Page 6 of 15 Pages - ---------------------------------------------------------------- 1 NAME OF REPORTING PERSON SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON Eugene M. Weber - ---------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/*/ (b)/ / - ---------------------------------------------------------------- 3 SEC USE ONLY - ---------------------------------------------------------------- 4 SOURCE OF FUNDS* PF - ---------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / - ---------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - ---------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 7,600 BENEFICIALLY --------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH -0- REPORTING --------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH 7,600 --------------------------------------- 10 SHARED DISPOSITIVE POWER -0- - ---------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,600 - ---------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - ---------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.1% - ---------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - ---------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D CUSIP No. 125708107 Page 7 of 15 Pages - ---------------------------------------------------------------- 1 NAME OF REPORTING PERSON SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON Morris Cheston III - ---------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /*/ (b) / / - ---------------------------------------------------------------- 3 SEC USE ONLY - ---------------------------------------------------------------- 4 SOURCE OF FUNDS* PF - ---------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / - ---------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - ---------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 1,140 BENEFICIALLY --------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH -0- REPORTING --------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH 1,140 --------------------------------------- 10 SHARED DISPOSITIVE POWER -0- - ---------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,140 - ---------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - ---------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.1% - ---------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - ---------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D CUSIP No. 125708107 Page 8 of 15 Pages - ---------------------------------------------------------------- 1 NAME OF REPORTING PERSON SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON Angela G. Weber - ---------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/*/ (b)/ / - ---------------------------------------------------------------- 3 SEC USE ONLY - ---------------------------------------------------------------- 4 SOURCE OF FUNDS* PF - ---------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / - ---------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - ---------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 1,000 BENEFICIALLY --------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH -0- REPORTING --------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH 1,000 --------------------------------------- 10 SHARED DISPOSITIVE POWER -0- - ---------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,000 - ---------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - ---------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.1% - ---------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - ---------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D CUSIP No. 125708107 Page 9 of 15 Pages ITEM 1. SECURITY AND ISSUER. This statement relates to shares of common stock (the "Securities") of Digital Generation Systems, Inc. ("DGS"). The principal executive office of DGS is located at 875 Battery Street, San Francisco, CA 94111. ITEM 2. IDENTITY AND BACKGROUND. The persons filing this statement and the persons enumerated in Instruction C of Schedule 13D and, where applicable, their respective places of organization, general partners, directors, executive officers and controlling persons, and the information regarding them, are as follows: (a) London Merchant Securities plc ("LMS"); Lion Investments Limited ("Lion"); Westpool Investment Trust plc ("Westpool"); Robert A. Rayne ("Rayne"); Eugene M. Weber ("Mr. Weber"); Morris Cheston III ("Cheston"); and Angela G. Weber ("Ms. Weber"). (b) The business address of LMS, Lion, Westpool and Rayne is 33 Robert Adam Street, London WIM 5AH, United Kingdom. The business address of Mr. Weber, Cheston and Ms. Weber is 50 California Street, Suite 3200, San Francisco, CA 94111. (c) Rayne is a director of LMS, Lion and Westpool. Weber is the president and sole shareholder of Bluewater Capital Management, Inc., a California corporation ("Bluewater Inc."), and the managing member of Bluewater Investments LLC, a California limited liability company ("Bluewater LLC"). Cheston is an employee of Bluewater Inc. Ms. Weber is the wife of Mr. Weber. (d) During the last five years, none of such persons has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the last five years, none of such persons was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) LMS, Lion and Westpool are limited companies organized under the laws of England and Wales. Rayne is a citizen of the United Kingdom. Mr. Weber, Cheston and Ms. Weber are citizens of the United States. SCHEDULE 13D CUSIP No. 125708107 Page 10 of 15 Pages ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The source and amount of funds used in purchasing the Securities were as follows: Purchaser Source of Funds Amount LMS Working Capital(1) $5,385,681.25 Lion Working Capital $1,791,437.00 Westpool Working Capital $3,594,244.25 Rayne Personal Funds $ 285,881.00 Mr. Weber Personal Funds $ 25,206.50 Cheston Personal Funds $ 4,997.50 Ms. Weber Personal Funds $ 2,563.00 (1) Includes funds of Lion and Westpool invested in Securities. ITEM 4. PURPOSE OF TRANSACTION. The principal purpose of the acquisitions of securities is investment. The persons named in Item 2 of this statement have no plans or proposals that relate to or would result in: (a) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving DGS or any of its subsidiaries; (b) A sale or transfer of a material amount of assets of DGS or of any of its subsidiaries; (c) Any change in the present board of directors or management of DGS, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (d) Any material change in the present capitalization or dividend policy of DGS; (e) Any other material change in DGS's business or corporate structure; (f) Changes in DGS's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of DGS by any person; (g) Causing a class of securities of DGS to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (h) A class of equity securities of DGS becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or (i) Any action similar to any of those enumerated above. SCHEDULE 13D CUSIP No. 125708107 Page 11 of 15 Pages ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. The beneficial ownership of the Securities of the persons named in Item 2 of this statement is as follows at the date hereof: Aggregate Beneficially Owned Voting Power Dispositive Power Name Number Percent Sole Shared Sole Shared LMS 1,222,500 10.1% -0- 1,222,500 -0- 1,222,500 Lion 430,000 3.5% 430,000 -0- 430,000 -0- Westpool 792,500 6.5% 792,500 -0- 792,500 -0- Rayne 72,500 0.6% 72,500 -0- 72,500 -0- Mr. Weber 7,600 0.1% 7,600 -0- 7,600 -0- Cheston 1,140 0.1% 1,140 -0- 1,140 -0- Ms. Weber 1,000 0.1% 1,000 -0- 1,000 -0- The persons filing this statement effected the following transactions in the Securities on the dates indicated, and such transactions are the only transactions in the Securities since December 12, 1997, by the persons filing this statement: Purchase Number Price Broker Name or Sale Date of Shares Per Share Used Mr. Weber P 12-30-97 4,000 2.50 AB Ms. Weber P 12-30-97 1,000 2.50 AB Westpool P 2-10-98 200,000 3.13 C&C Lion P 2-10-98 200,000 3.13 C&C H&Q = Hambrecht & Quist C&C = Cowen & Co. AB = Alex. Brown & Sons SCHEDULE 13D CUSIP No. 125708107 Page 12 of 15 Pages ITEM. 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Lion and Westpool are wholly owned subsidiaries of LMS, which is publicly listed in the United Kingdom. Pursuant to its consultancy agreement (the "Agreement") with Westpool, Bluewater LLC provides investment advice to Westpool. Under the Agreement, Bluewater LLC has no authority to invest Westpool's funds or to vote or dispose of securities purchased with such funds. The Agreement may be terminated by either party on notice as provided in the Agreement and provides for Westpool to pay to Bluewater LLC monthly consulting fees and, if certain conditions are met, additional fees based on realized and unrealized gains and losses attributed to Bluewater LLC's investment advice to Westpool. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. A. Agreement Regarding Joint Filing of Statement on Schedule 13D or 13G. SIGNATURES After reasonable inquiry and to the best of my knowledge, I certify that the information set forth in this statement is true, complete and correct. DATED: February 18, 1998 London Merchant Securities plc By: /s/ Robert A. Rayne Robert A. Rayne Director Lion Investments Limited By: /s/ Robert A. Rayne Robert A. Rayne Director Westpool Investment Trust plc By: /s/ Robert A. Rayne Robert A. Rayne Director /s/ Robert A. Rayne Robert A. Rayne (Signatures continued on next page) SCHEDULE 13D CUSIP No. 125708107 Page 13 of 15 Pages (Signatures continued from previous page) /s/Eugene M. Weber Eugene M. Weber /s/ Morris Cheston III Morris Cheston III /s/ Angela G. Weber Angela G. Weber SCHEDULE 13D CUSIP No. 125708107 Page 14 of 15 Pages EXHIBIT A AGREEMENT REGARDING JOINT FILING OF STATEMENT ON SCHEDULE 13D OR 13G The undersigned agree to file jointly with the Securities and Exchange Commission (the "SEC") any and all statements on Schedule 13D or Schedule 13G (and any amendments or supplements thereto) required under section 13(d) of the Securities Exchange Act of 1934, as amended, in connection with purchases by the undersigned of common stock of Digital Generation Systems, Inc. For that purpose, the undersigned hereby constitute and appoint London Merchant Securities plc, a limited company organized under the laws of England and Wales, as their true and lawful agent and attorney- in-fact, with full power and authority for and on behalf of the undersigned to prepare or cause to be prepared, sign, file with the SEC and furnish to any other person all certificates, instruments, agreements and documents necessary to comply with section 13(d) and section 16(a) of the Securities Exchange Act of 1934, as amended, in connection with said purchases, and to do and perform every act necessary and proper to be done incident to the exercise of the foregoing power, as fully as the undersigned might or could do if personally present. DATED: February 18, 1998 London Merchant Securities plc By: /s/ Robert A. Rayne Robert A. Rayne Director Lion Investments Limited By: /s/ Robert A. Rayne Robert A. Rayne Director Westpool Investment Trust plc By: /s/ Robert A. Rayne Robert A. Rayne Director (Signatures continued on next page) SCHEDULE 13D CUSIP No. 125708107 Page 15 of 15 Pages (Signatures continued from previous page) /s/ Robert A. Rayne Robert A. Rayne /s/ Iain MacPhail Iain MacPhail /s/Eugene M. Weber Eugene M. Weber /s/ Morris Cheston III Morris Cheston III /s/ Angela G. Weber Angela G. Weber -----END PRIVACY-ENHANCED MESSAGE-----