SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.__8__)
News Communications, Inc.
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
652484601
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(CUSIP Number)
Nadine Shaoul, D.H. Blair Investment Banking Corp.
44 Wall Street, New York, NY 10005 (212) 495-4163
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 21, 1996
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(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 [ ].
Check the following box if a fee is being paid with this statement [ ].(A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
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 the
disclosures provided in a prior cover page.
The information required in 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).
Page 1 of 20 pages
Exhibit Index: Page 5
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CUSIP No. 652484601 13D Page 2 of 20 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
J. Morton Davis
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 Source of Funds
See Item #3 herein.
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5 Check Box if Disclosure of Legal Proceedings is required pursuant to
Items 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER OF 7 SOLE VOTING POWER
SHARES 2,179,515
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 2,179,515
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,313,030
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
27.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
CUSIP No. 652484601 13D Page 3 of 20 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
D.H. Blair Investment Banking Corp.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 Source of Funds
See Item #3 herein.
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5 Check Box if Disclosure of Legal Proceedings is required pursuant to
Items 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 2,179,515
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,179,515
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,179,515
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.9%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
BD
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*SEE INSTRUCTIONS BEFORE FILLING OUT
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Page 4 of 20 Pages
J. Morton Davis and D.H. Blair Investment Banking Corp. ("Blair
Investment"), (together, the "Reporting Parties") hereby amend their
statement on Schedule 13D relating to the common stock, $.01 par
value ("shares") of News Communications, Inc. (the "Issuer") as
follows:
Item 3. (a) is hereby amended by adding the following paragraph thereto:
This amendment relates to a Warrant to Purchase Common Stock of News
Communications, Inc. (the "Warrant") issued pursuant to a Loan
Agreement (the "Loan Agreement") described in Item 6. on page 5
herein, whereby Blair Investment loaned $1,000,000 of its general
funds to the Issuer and was concurrently granted the Warrant.
Item 4. is hereby partially amended by deleting the first sentence thereto and
adding the following sentence at the beginning of Item 4.:
This Amendment is filed solely to report the acquisition of a Warrant
to purchase 200,000 shares described in Item 5.(c) herein for
investment purposes only.
Item 5. (a) is hereby amended in its entirety as follows:
As of May 21, 1996, Mr. Davis may be deemed to beneficially own
2,313,030 (4) shares or 27.4% of the Issuer's shares as follows: (i)
1,579,515 shares owned by Blair Investment, (ii) a Warrant to purchase
400,000 shares at a price of $2.50 per share from May 17, 1996 to May
17, 2001 owned by Blair Investment, (iii) a Warrant to purchase
200,000 shares at a price of $2.50 per share from May 21, 1996 to May
21, 2001, (iv) 61,915 shares owned by Rivkalex Corporation (5) and (v)
71,600 shares owned by Rosalind Davidowitz (5).
As of May 21, 1996, Blair Investment may be deemed to beneficially own
2,179,515 shares or 25.9% of the Issuer's shares as indicated in (i) -
(iii) above.
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(4) Not included herein are 379,700 shares owned by Kinder Investments,
L.P. ("Kinder"). Kenton E. Wood, the general partner of Kinder, is the Chairman
and Chief Executive Officer of D.H. Blair & Co., Inc. ("Blair") and a
stockholder and director of Blair. Certain limited partners of Kinder are
stockholders of Blair. The limited partners of Kinder are the children and
grandchildren of Mr. Davis. Blair Investment and Mr. Davis disclaim for
purposes of Section 13 or otherwise beneficial ownership of any News
Communications, Inc. shares owned by Kinder or Blair. Kinder disclaims for
purposes of Section 13 or otherwise ownership of any News Communications, Inc.
shares owned by Blair, Blair Investment, or Mr. Davis.
(5) Rivkalex Corporation is a private corporation owned by Mr. Davis' wife,
Rosalind Davidowitz. Filing of this statement shall not be deemed an admission
that J. Morton Davis, or Blair Investment beneficially own securities attributed
to Rivkalex or Rosalind Davidowitz for any purpose. J. Morton Davis and Blair
Investment expressly disclaim beneficial ownership of all securities held by
Rivkalex and Rosalind Davidowitz for any purpose.
<PAGE>
Page 5 of 20 pages
Item 5. (c) is hereby amended by adding thereto the following new paragraph:
On May 21, 1996, Blair Investment received a Warrant to purchase
200,000 of the Issuer's shares at $2.50 per share exercisable from May
21, 1996 to May 21, 2001 pursuant to a Loan Agreement between Blair
Investment and the Issuer.
Item 6. is hereby amended by adding the following paragraph thereto:
On May 21, 1996, Blair Investment entered into a Loan Agreement
whereby Blair Investment agreed to advance to the Issuer $1,000,000
(the "Loan"), to be evidenced by a Promissory Note in the principal
amount of $1,000,000. In order to induce Blair Investment to execute
this Loan Agreement and make the Loan available to the Issuer, the
Issuer granted concurrently to Blair Investment a Warrant to purchase
200,000 of the Issuer's shares at $2.50 per share, exercisable May 21,
1996 to May 21, 2001. A copy of the Warrant is annexed hereto as
Exhibit F and incorporated herein by reference. On May 21, 1996, Blair
Investment loaned the Issuer the principal amount of $1,000,000 and
received a Promissory Note in the principal amount of $1,000,000.
Item 7 is hereby amended by adding the following thereto:
Exhibit F. - Warrant to purchase 200,000 shares dated May 21, 1996.
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, we certify
that the information set forth in this statement is true, complete and correct.
/s/ J. Morton Davis
Date: May 23, 1996 _____________________________
New York, New York J. Morton Davis
D.H. BLAIR INVESTMENT BANKING CORP.
/s/ David Nachamie
Date: May 23, 1996 by_____________________________
New York, New York David Nachamie
Treasurer
Page 6 of 20 pages
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933 (THE
"ACT") OR APPLICABLE STATE SECURITIES LAWS (THE "STATE ACTS") AND SHALL NOT BE
SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED (WHETHER OR NOT
FOR CONSIDERATION) BY THE HOLDER EXCEPT (i) PURSUANT TO A REGISTRATION STATEMENT
OR (ii) (OTHER THAN A SALE OR TRANSFER IN WHOLE OR IN PART, TO ANY OF HOLDER'S
OFFICERS, DIRECTORS OR AFFILIATES, ANY OFFICER OR DIRECTOR OF ANY SUCH AFFILIATE
OR ANY MEMBER OF THE IMMEDIATE FAMILY OF ANY SUCH OFFICER OR DIRECTOR) UPON THE
ISSUANCE TO THE COMPANY OF A FAVORABLE OPINION OF COUNSEL OR SUBMISSION TO THE
COMPANY OF SUCH EVIDENCE AS MAY BE SATISFACTORY TO COUNSEL TO THE COMPANY, IN
EACH SUCH CASE, TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION
OF THE ACT AND THE STATE ACTS.
Void after 5:00 p.m. New York Time, on May 21, 2001.
Warrant to Purchase 200,000 Shares of Common Stock.
WARRANT TO PURCHASE COMMON STOCK
OF
NEWS COMMUNICATIONS, INC.
This is to Certify That, FOR VALUE RECEIVED, D.H. Blair
Investment Banking Corp. or assigns ("Holder"), is entitled to purchase, subject
to the provisions of this Warrant, from NEWS COMMUNICATIONS, INC., a Nevada
corporation ("Company"), Two Hundred Thousand (200,000) fully paid, validly
issued and nonassessable shares of Common Stock, par value $.01 per share, of
the Company ("Common Stock") at a price of $2.50 per share at any time or from
time to time during the period from May 21, 1996 to May 21, 2001, but not later
than 5:00 p.m. New York City Time, on May 21, 2001. The number of shares of
Common Stock to be received upon the exercise of this Warrant and the price to
be paid for each share of Common Stock may be adjusted from time to time as
hereinafter set forth. The shares of Common Stock deliverable upon such
exercise, and as adjusted from time to time, are hereinafter sometimes referred
to as "Warrant Shares" and the exercise price of a share of Common Stock in
effect at any time and as adjusted from time to time is hereinafter sometimes
referred to as the "Exercise Price".
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Page 7 of 20 pages
(a) EXERCISE OF WARRANT.
(1) This Warrant may be exercised in whole or in part at any time
or from time to time on or after May 21, 1996 and until May 21, 2001 (the
"Exercise Period"), subject to the provisions of Section (j)(2) hereof;
provided, however, that (i) if either such day is a day on which banking
institutions in the State of New York are authorized by law to close, then on
the next succeeding day which shall not be such a day, and (ii) in the event of
any merger, consolidation or sale of substantially all the assets of the Company
as an entirety, resulting in any distribution to the Company's stockholders,
prior to May 21, 2001, the Holder shall have the right to exercise this Warrant
commencing at such time through May 21, 2001 into the kind and amount of shares
of stock and other securities and property (including cash) receivable by a
holder of the number of shares of Common Stock into which this Warrant might
have been exercisable immediately prior thereto. This Warrant may be exercised
by presentation and surrender hereof to the Company at its principal office, or
at the office of its stock transfer agent, if any, with the Purchase Form
annexed hereto duly executed and accompanied by payment of the Exercise Price
for the number of Warrant Shares specified in such form. As soon as practicable
after each such exercise of the Warrants, but not later than seven (7) days from
the date of such exercise, the Company shall issue and deliver to the Holder a
certificate or certificate for the Warrant Shares issuable upon such exercise,
registered in the name of the Holder or its designee. If this Warrant should be
exercised in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the rights of the
Holder thereof to purchase the balance of the Warrant Shares purchasable
thereunder. Upon receipt by the Company of this Warrant at its office, or by the
stock transfer agent of the Company at its office, in proper form for exercise,
the Holder shall be deemed to be the holder of record of the shares of Common
Stock issuable upon such exercise, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates representing such
shares of Common Stock shall not then be physically delivered to the Holder.
(2) At any time during the Exercise Period, the Holder may, at
its option, exchange this Warrant, in whole or in part (a "Warrant Exchange"),
into the number of Warrant Shares determined in accordance with this Section
(a)(2), by surrendering this Warrant at the principal office of the Company or
at the office of its stock transfer agent, accompanied by a notice stating such
Holder's intent to effect such exchange, the number of Warrant Shares to be
exchanged and the date on which the Holder requests that such Warrant Exchange
occur (the "Notice of Exchange"). The Warrant Exchange shall take place on the
date specified in the Notice of Exchange or, if later, the date the Notice of
Exchange is received by the Company (the "Exchange Date"). Certificates for the
shares issuable upon such Warrant Exchange and, if applicable, a new warrant of
like tenor evidencing the balance of the shares remaining subject to this
Warrant, shall be issued as of the Exchange Date and delivered to the Holder
within seven (7) days following the Exchange Date. In connection with any
Warrant Exchange, this Warrant shall represent the right to subscribe for and
acquire the number of Warrant Shares (rounded to the next highest integer) equal
to (i) the number of Warrant Shares specified by the Holder in its Notice of
Exchange (the "Total Number") less
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Page 8 of 20 pages
(ii) the number of Warrant Shares equal to the quotient obtained by dividing (A)
the product of the Total Number and the existing Exercise Price by (B) the
current market value of a share of Common Stock. Current market value shall have
the meaning set forth Section (c) below, except that for purposes hereof, the
date of exercise, as used in such Section (c), shall mean the Exchange Date.
(b) RESERVATION AND LISTING OF SHARES. The Company shall at
all times reserve for issuance and/or delivery upon exercise of this Warrant
such number of shares of its Common Stock as shall be required for issuance and
delivery upon exercise of the Warrants. The Company will at all times use its
best efforts to maintain the listing of the Common Stock on NASDAQ and to list
the Warrant Shares upon the exercise of this Warrant.
(c) FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the exercise of this
Warrant. With respect to any fraction of a share called for upon any exercise
hereof, the Company shall pay to the Holder an amount in cash equal to such
fraction multiplied by the current market value of a share, determined as
follows:
(1) If the Common Stock is listed on a National
Securities Exchange or admitted to unlisted trading privileges
on such exchange or listed for trading on the Nasdaq system,
the current market value shall be the last reported sale price
of the Common Stock on such exchange or system on the last
business day prior to the date of exercise of this Warrant or
if no such sale is made on such day, the average closing bid
and asked prices for such day on such exchange or system; or
(2) If the Common Stock is not so listed or admitted
to unlisted trading privileges, the current market value shall
be the mean of the last reported bid and asked prices reported
by the National Quotation Bureau, Inc. on the last business
day prior to the date of the exercise of this Warrant; or
(3) If the Common Stock is not so listed or admitted
to unlisted trading privileges and bid and asked prices are
not so reported, the current market value shall be an amount,
not less than book value thereof as at the end of the most
recent fiscal year of the Company ending prior to the date of
the exercise of the Warrant, determined in such reasonable
manner as may be prescribed by the Board of Directors of the
Company.
(d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This
Warrant is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company or at the office of its stock
transfer agent, if any, for other warrants of different denominations entitling
the holder thereof to purchase in the aggregate the same number of shares of
Common Stock purchasable
3
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Page 9 of 20 pages
hereunder. Upon surrender of this Warrant to the Company at its principal office
or at the office of its stock transfer agent, if any, with the Assignment Form
annexed hereto duly executed and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant in the name of
the assignee named in such instrument of assignment and this Warrant shall
promptly be cancelled. This Warrant may be divided or combined with other
warrants which carry the same rights upon presentation hereof at the principal
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof. The term
"Warrant" as used herein includes any Warrants into which this Warrant may be
divided or exchanged. Upon receipt by the Company of evidence satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen, destroyed,
or mutilated shall be at any time enforceable by anyone.
(e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue
hereof, be entitled to any rights of a shareholder in the Company, either at law
or equity, and the rights of the Holder are limited to those expressed in the
Warrant and are not enforceable against the Company except to the extent set
forth herein.
(f) ANTI-DILUTION PROVISIONS. The Exercise Price in effect at
any time and the number and kind of securities purchasable upon the exercise of
the Warrants shall be subject to adjustment from time to time upon the happening
of certain events as follows:
(1) In case the Company shall (i) declare a dividend
or make a distribution on its outstanding shares of Common
Stock in shares of Common Stock, (ii) subdivide or reclassify
its outstanding shares of Common Stock into a greater number
of shares, or (iii) combine or reclassify its outstanding
shares of Common Stock into a smaller number of shares, the
Exercise Price in effect at the time of the record date for
such dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be adjusted
so that it shall equal the price determined by multiplying the
Exercise Price by a fraction, the denominator of which shall
be the number of shares of Common Stock outstanding after
giving effect to such action, and the numerator of which shall
be the number of shares of Common Stock outstanding
immediately prior to such action. Such adjustment shall be
made successively whenever any event listed above shall occur.
(2) In case the Company shall fix a record date
for the issuance of rights or warrants to all holders of its
Common Stock entitling them to
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Page 10 of 20 pages
subscribe for or purchase shares of Common Stock (or
securities convertible into Common Stock) at a price (the
"Subscription Price") (or having a conversion price per share)
less than the current market price of the Common Stock (as
defined in Subsection (8) below) on the record date mentioned
below, or less than the Exercise Price on such record date the
Exercise Price shall be adjusted so that the same shall equal
the lower of (i) the price determined by multiplying the
Exercise Price in effect immediately prior to the date of such
issuance by a fraction, the numerator of which shall be the
sum of the number of shares of Common Stock outstanding on the
record date mentioned below and the number of additional
shares of Common Stock which the aggregate offering price of
the total number of shares of Common Stock so offered (or the
aggregate conversion price of the convertible securities so
offered) would purchase at such current market price per share
of the Common Stock, and the denominator of which shall be the
sum of the number of shares of Common Stock outstanding on
such record date and the number of additional shares of Common
Stock offered for subscription or purchase (or into which the
convertible securities so offered are convertible) or (ii) in
the event the Subscription Price is equal to or higher than
the current market price but is less than the Exercise Price,
the price determined by multiplying the Exercise Price in
effect immediately prior to the date of issuance by a
fraction, the numerator of which shall be the sum of the
number of shares outstanding on the record date mentioned
below and the number of additional shares of Common Stock
which the aggregate offering price of the total number of
shares of Common Stock so offered (or the aggregate conversion
price of the convertible securities so offered) would purchase
at the Exercise Price in effect immediately prior to the date
of such issuance, and the denominator of which shall be the
sum of the number of shares of Common Stock outstanding on the
record date mentioned below and the number of additional
shares of Common Stock offered for subscription or purchase
(or into which the convertible securities so offered are
convertible). Such adjustment shall be made successively
whenever such rights or warrants are issued and shall become
effective immediately after the record date for the
determination of shareholders entitled to receive such rights
or warrants; and to the extent that shares of Common Stock are
not delivered (or securities convertible into Common Stock are
not delivered) after the expiration of such rights or warrants
the Exercise Price shall be readjusted to the Exercise Price
which would then be in effect had the adjustments made upon
the issuance of such rights or warrants been made upon the
basis of delivery of only the number of shares of Common Stock
(or securities convertible into Common Stock) actually
delivered.
(3) In case the Company shall hereafter distribute to
the holders of its Common Stock evidences of its indebtedness
or assets (excluding cash dividends or distributions and
dividends or distributions referred to in Subsection (1)
above) or subscription rights or warrants (excluding those
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Page 11 of 20 pages
referred to in Subsection (2) above), then in each such case
the Exercise Price in effect thereafter shall be determined by
multiplying the Exercise Price in effect immediately prior
thereto by a fraction, the numerator of which shall be the
total number of shares of Common Stock outstanding multiplied
by the current market price per share of Common Stock (as
defined in Subsection (8) below), less the fair market value
(as determined by the Company's Board of Directors) of said
assets or evidences of indebtedness so distributed or of such
rights or warrants, and the denominator of which shall be the
total number of shares of Common Stock outstanding multiplied
by such current market price per share of Common Stock. Such
adjustment shall be made successively whenever such a record
date is fixed. Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately
after the record date for the determination of shareholders
entitled to receive such distribution.
(4) In case the Company shall issue shares of its
Common Stock [excluding shares issued (i) in any of the
transactions described in Subsection (1) above, (ii) upon
exercise of options granted to the Company's employees under a
plan or plans adopted by the Company's Board of Directors and
approved by its shareholders, if such shares would otherwise
be included in this Subsection (4), (but only to the extent
that the aggregate number of shares excluded hereby and issued
after the date hereof, shall not exceed 5% of the Company's
Common Stock outstanding at the time of any issuance), (iii)
upon exercise of options and warrants outstanding at May 21,
1996, and this Warrant (iv) to shareholders of any corporation
which merges into the Company in proportion to their stock
holdings of such corporation immediately prior to such merger,
upon such merger, or (v) issued in a bona fide public offering
pursuant to a firm commitment underwriting, but only if no
adjustment is required pursuant to any other specific
subsection of this Section (f) (without regard to Subsection
(9) below) with respect to the transaction giving rise to such
rights] for a consideration per share (the "Offering Price")
less than the current market price per share [as defined in
Subsection (8) below] on the date the Company fixes the
offering price of such additional shares or less than the
Exercise Price, the Exercise Price shall be adjusted
immediately thereafter so that it shall equal the lower of (i)
the price determined by multiplying the Exercise Price in
effect immediately prior thereto by a fraction, the numerator
of which shall be the sum of the number of shares of Common
Stock outstanding immediately prior to the issuance of such
additional shares and the number of shares of Common Stock
which the aggregate consideration received [determined as
provided in Subsection (7) below] for the issuance of such
additional shares would purchase at such current market price
per share of Common Stock, and the denominator of which shall
be the number of shares of Common Stock outstanding
immediately after the issuance of such additional shares or
(ii) in the event the Offering Price is equal to or higher
than the current market price per share but
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less than the Exercise Price, the price determined by
multiplying the Exercise Price in effect immediately prior to
the date of issuance by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding
immediately prior to the issuance of such additional shares
and the number of shares of Common Stock which the aggregate
consideration received [determined as provided in subsection
(7) below] for the issuance of such additional shares would
purchase at the Exercise Price in effect immediately prior to
the date of such issuance, and the denominator of which shall
be the number of shares of Common Stock outstanding
immediately after the issuance of such additional shares. Such
adjustment shall be made successively whenever such an
issuance is made.
(5) In case the Company shall issue any securities
convertible into or exchangeable for its Common Stock
[excluding securities issued in transactions described in
Subsections (2) and (3) above] for a consideration per share
of Common Stock (the "Conversion Price") initially deliverable
upon conversion or exchange of such securities [determined as
provided in Subsection (7) below] less than the current market
price per share [as defined in Subsection (8) below] in effect
immediately prior to the issuance of such securities, or less
than the Exercise Price, the Exercise Price shall be adjusted
immediately thereafter so that it shall equal the lower of (i)
the price determined by multiplying the Exercise Price in
effect immediately prior thereto by a fraction, the numerator
of which shall be the sum of the number of shares of Common
Stock outstanding immediately prior to the issuance of such
securities and the number of shares of Common Stock which the
aggregate consideration received [determined as provided in
Subsection (7) below] for such securities would purchase at
such current market price per share of Common Stock, and the
denominator of which shall be the sum of the number of shares
of Common Stock outstanding immediately prior to such issuance
and the maximum number of shares of Common Stock of the
Company deliverable upon conversion of or in exchange for such
securities at the initial conversion or exchange price or rate
or (ii) in the event the Conversion Price is equal to or
higher than the current market price per share but less than
the Exercise Price, the price determined by multiplying the
Exercise Price in effect immediately prior to the date of
issuance by a fraction, the numerator of which shall be the
sum of the number of shares outstanding immediately prior to
the issuance of such securities and the number of shares of
Common Stock which the aggregate consideration received
[determined as provided in subsection (7) below] for such
securities would purchase at the Exercise Price in effect
immediately prior to the date of such issuance, and the
denominator of which shall be the sum of the number of shares
of Common Stock outstanding immediately prior to the issuance
of such securities and the maximum number of shares of Common
Stock of the Company deliverable upon conversion of or in
exchange for such securities at the initial conversion or
exchange price or
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Page 13 of 20 pages
rate. Such adjustment shall be made successively whenever
such an issuance is made.
(6) Whenever the Exercise Price payable upon exercise
of each Warrant is adjusted pursuant to Subsections (1), (2),
(3), (4) and (5) above or Section (9) below, the number of
Shares purchasable upon exercise of this Warrant shall
simultaneously be adjusted by multiplying the number of Shares
initially issuable upon exercise of this Warrant by the
Exercise Price in effect on the date hereof and dividing the
product so obtained by the Exercise Price, as adjusted.
(7) For purposes of any computation respecting
consideration received pursuant to Subsections (4) and (5)
above, the following shall apply:
(A) in the case of the issuance of shares of
Common Stock for cash, the consideration shall be the
amount of such cash, provided that in no case shall
any deduction be made for any commissions, discounts
or other expenses incurred by the Company for any
underwriting of the issue or otherwise in connection
therewith;
(B) in the case of the issuance of shares of
Common Stock for a consideration in whole or in part
other than cash, the consideration other than cash
shall be deemed to be the fair market value thereof
as determined in good faith by the Board of Directors
of the Company (irrespective of the accounting
treatment thereof), whose determination shall be
conclusive; and
(C) in the case of the issuance of
securities convertible into or exchangeable for
shares of Common Stock, the aggregate consideration
received therefor shall be deemed to be the
consideration received by the Company for the
issuance of such securities plus the additional
minimum consideration, if any, to be received by the
Company upon the conversion or exchange thereof [the
consideration in each case to be determined in the
same manner as provided in clauses (A) and (B) of
this Subsection (7)].
(8) For the purpose of any computation under
Subsections (2), (3), (4) and (5) above, the current market
price per share of Common Stock at any date shall be deemed to
be the lower of (i) the average of the daily closing prices
for 30 consecutive business days before such date or (ii) the
closing price on the business day immediately preceding such
date. The closing price for each day shall be the last sale
price regular way or, in case no such reported sale takes
place on such day, the average of the last reported bid and
asked prices regular way, in either case on the principal
national securities exchange
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on which the Common Stock is admitted to trading or listed, or
if not listed or admitted to trading on such exchange, the
average of the highest reported bid and lowest reported asked
prices as reported by Nasdaq, or other similar organization if
Nasdaq is no longer reporting such information, or if not so
available, the fair market price as determined by the Board of
Directors.
(9) No adjustment in the Exercise Price shall be
required unless such adjustment would require an increase or
decrease of at least five cents ($0.05) in such price;
provided, however, that any adjustments which by reason of
this Subsection (9) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment required to be made hereunder. All calculations
under this Section (f) shall be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may be.
Anything in this Section (f) to the contrary notwithstanding,
the Company shall be entitled, but shall not be required, to
make such changes in the Exercise Price, in addition to those
required by this Section (f), as it shall determine, in its
sole discretion, to be advisable in order that any dividend or
distribution in shares of Common Stock, or any subdivision,
reclassification or combination of Common Stock, hereafter
made by the Company shall not result in any Federal Income tax
liability to the holders of Common Stock or securities
convertible into Common Stock (including Warrants).
(10) Whenever the Exercise Price is adjusted, as
herein provided, the Company shall promptly but no later than
10 days after any request for such an adjustment by the
Holder, cause a notice setting forth the adjusted Exercise
Price and adjusted number of Shares issuable upon exercise of
each Warrant, and, if requested, information describing the
transactions giving rise to such adjustments, to be mailed to
the Holders at their last addresses appearing in the Warrant
Register, and shall cause a certified copy thereof to be
mailed to its transfer agent, if any. In the event the Company
does not provide the Holder with such notice and information
within 10 days of a request by the Holder, then
notwithstanding the provisions of this Section (f), the
Exercise Price shall be immediately adjusted to equal the
lowest Offering Price, Subscription Price or Conversion Price,
as applicable, since the date of this Warrant, and the number
of shares issuable upon exercise of this Warrant shall be
adjusted accordingly. The Company may retain a firm of
independent certified public accountants selected by the Board
of Directors (who may be the regular accountants employed by
the Company) to make any computation required by this Section
(f), and a certificate signed by such firm shall be conclusive
evidence of the correctness of such adjustment.
(11) In the event that at any time, as a result of an
adjustment made pursuant to Subsection (1) above, the Holder
of this Warrant thereafter shall become entitled to receive
any shares of the Company, other than Common
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Stock, thereafter the number of such other shares so
receivable upon exercise of this Warrant shall be subject to
adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in Subsections (1) to
(9), inclusive above.
(12) Irrespective of any adjustments in the Exercise
Price or the number or kind of shares purchasable upon
exercise of this Warrant, Warrants theretofore or thereafter
issued may continue to express the same price and number and
kind of shares as are stated in the similar Warrants initially
issuable pursuant to this Agreement.
(g) OFFICER'S CERTIFICATE. Whenever the Exercise Price shall
be adjusted as required by the provisions of the foregoing Section (f), the
Company shall forthwith file in the custody of its Secretary or an Assistant
Secretary at its principal office and with its stock transfer agent, if any, an
officer's certificate showing the adjusted Exercise Price determined as herein
provided, setting forth in reasonable detail the facts requiring such
adjustment, including a statement of the number of additional shares of Common
Stock, if any, and such other facts as shall be necessary to show the reason for
and the manner of computing such adjustment. Each such officer's certificate
shall be made available at all reasonable times for inspection by the holder or
any holder of a Warrant executed and delivered pursuant to Section (a) and the
Company shall, forthwith after each such adjustment, mail a copy by certified
mail of such certificate to the Holder or any such holder.
(h) NOTICES TO WARRANT HOLDERS. So long as this Warrant shall
be outstanding, (i) if the Company shall pay any dividend or make any
distribution upon the Common Stock or (ii) if the Company shall offer to the
holders of Common Stock for subscription or purchase by them any share of any
class or any other rights or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder, at least fifteen days prior the
date specified in (x) or (y) below, as the case may be, a notice containing a
brief description of the proposed action and stating the date on which (x) a
record is to be taken for the purpose of such dividend, distribution or rights,
or (y) such reclassification, reorganization, consolidation, merger, conveyance,
lease, dissolution, liquidation or winding up is to take place and the date, if
any is to be fixed, as of which the holders of Common Stock or other securities
shall receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation or
winding up.
(i) RECLASSIFICATION, REORGANIZATION OR MERGER. In case
of any Reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company, or in case of any
consolidation or merger of the Company
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with or into another corporation (other than a merger with a subsidiary in which
merger the Company is the continuing corporation and which does not result in
any reclassification, capital reorganization or other change of outstanding
shares of Common Stock of the class issuable upon exercise of this Warrant) or
in case of any sale, lease or conveyance to another corporation of the property
of the Company as an entirety, the Company shall, as a condition precedent to
such transaction, cause effective provisions to be made so that the Holder shall
have the right thereafter by exercising this Warrant at any time prior to the
expiration of the Warrant, to purchase the kind and amount of shares of stock
and other securities and property receivable upon such reclassification, capital
reorganization and other change, consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock which might have been purchased
upon exercise of this Warrant immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance. Any such provision shall
include provision for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Warrant. The foregoing
provisions of this Section (i) shall similarly apply to successive
reclassifications, capital reorganizations and changes of shares of Common Stock
and to successive consolidations, mergers, sales or conveyances. In the event
that in connection with any such capital reorganization or reclassification,
consolidation, merger, sale or conveyance, additional shares of Common Stock
shall be issued in exchange, conversion, substitution or payment, in whole or in
part, for a security of the Company other than Common Stock, any such issue
shall be treated as an issue of Common Stock covered by the provisions of
Subsection (1) of Section (f) hereof.
(j) REGISTRATION UNDER THE SECURITIES ACT OF 1933.
(1) The Company shall advise the Holder of this
Warrant or of the Warrant Shares or any then holder of
Warrants or Warrant Shares (such persons being collectively
referred to herein as "holders") by written notice at least
four weeks prior to the filing of any new registration
statement or post-effective amendment thereto under the
Securities Act of 1933 (the "Act") covering securities of the
Company and will for a period of six years from the date
hereof upon the request of any such holder, include in any
such registration statement such information as may be
required to permit a public offering of the Warrants or the
Warrant Shares. The Company shall supply prospectuses and
other documents as the Holder may request in order to
facilitate the public sale or other disposition of the
Warrants or Warrant Shares, qualify the Warrants and the
Warrant Shares for sale in such states as any such holder
designates and do any and all other acts and things which may
be necessary or desirable to enable such Holders to consummate
the public sale or other disposition of the Warrants or
Warrant Shares, and furnish indemnification in the manner as
set forth in Subsection (3)(C) of this Section (j). Such
holders shall furnish information and indemnification as set
forth in Subsection (3)(C) of this Section (j), except that
the maximum amount which may be recovered from the Holder
shall be limited to the amount of proceeds received by the
Holder from the sale of the Warrants or Warrant Shares.
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(2) If any majority holder (as defined in Subsection
(4) of this Section (j) below) shall give notice to the
Company at any time during the five year period commencing on
the date hereof to the effect that such holder contemplates
(i) the transfer of all or any part of his or its Warrants
and/or Warrant Shares, or (ii) the exercise and/or conversion
of all or any part of his or its Warrants and the transfer of
all or any part of the Warrants and/or Warrant Shares under
such circumstances that a public offering (within the meaning
of the Act) of Warrants and/or Warrant Shares will be
involved, and desires to register under the Act, the Warrants
and/or the Warrant Shares, then the Company shall, within two
weeks after receipt of such notice, file a registration
statement pursuant to the Act, to the end that the Warrants
and/or Warrant Shares may be sold under the Act as promptly as
practicable thereafter and the Company will use its best
efforts to cause such registration to become effective and
continue to be effective (current) (including the taking of
such steps as are necessary to obtain the removal of any stop
order) until the holder has advised that all of the Warrants
and/or Warrant Shares have been sold; provided that such
holder shall furnish the Company with appropriate information
(relating to the intentions of such holders) in connection
therewith as the Company shall reasonably request in writing.
In the event the registration statement is not declared
effective under the Act prior to May 21, 2001, the Company
shall extend the expiration date of the Warrants to a date not
less than 90 days after the effective date of such
registration statement. The holder may, at its option, request
the registration of the Warrants and/or Warrant Shares in a
registration statement made by the Company as contemplated by
Subsection (1) of this Section (j) or in connection with a
request made pursuant to Subsection (2) of this Section (j)
prior to the acquisition of the Warrant Shares upon exercise
of the Warrants and even though the holder has not given
notice of exercise of the Warrants. If the Company determines
to include securities to be sold by it in any registration
statement originally requested pursuant to this Subsection (2)
of this Section (j), such registration shall instead be deemed
to have been a registration under Subsection (1) of this
Section (j) and not under Subsection (2) of this Subsection
(j). The holder may thereafter at its option, exercise the
Warrants at any time or from time to time subsequent to the
effectiveness under the Act of the registration statement in
which the Warrant Shares were included.
(3) The following provision of this Section (j)
shall also be applicable:
(A) Within ten days after receiving any such
notice pursuant to Subsection (2) of this Section
(j), the Company shall give notice to the other
holders of Warrants and Warrant Shares, advising that
the Company is proceeding with such registration
statement and offering to include therein Warrants
and/or Warrant Shares of such other holders,
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provided that they shall furnish the Company with
such appropriate information (relating to the
intentions of such holders) in connection therewith
as the Company shall reasonably request in writing.
Following the effective date of such registration,
the Company shall upon the request of any owner of
Warrants and/or Warrant Shares forthwith supply such
a number of prospectuses meeting the requirements of
the Act, as shall be requested by such owner to
permit such holder to make a public offering of all
Warrants and/or Warrant Shares from time to time
offered or sold to such holder, provided that such
holder shall from time to time furnish the Company
with such appropriate information (relating to the
intentions of such holder) in connection therewith as
the Company shall request in writing. The Company
shall also use its best efforts to qualify the
Warrant Shares for sale in such states as such
majority holder shall designate.
(B) The Company shall bear the entire cost
and expense of any registration of securities
initiated by it under Subsection (1) of this Section
(j) notwithstanding that Warrants and/or Warrant
Shares subject to this Warrant may be included in any
such registration. The Company shall also comply with
one request for registration made by the majority
holder pursuant to Subsection (2) of this Section (j)
at its own expense and without charge to any holder
of any Warrants and/or Warrant Shares; and the
Company shall comply with one additional request made
by the majority holder pursuant to Subsection (2) of
this Section (j) (and not deemed to be pursuant to
Subsection (1) of this Section (j)) at the sole
expense of such majority holder. Any holder whose
Warrants and/ or Warrant Shares are included in any
such registration statement pursuant to this Section
(j) shall, however, bear the fees of his own counsel
and any registration fees, transfer taxes or
underwriting discounts or commissions applicable to
the Warrant Shares sold by him pursuant thereto.
(C) The Company shall indemnify and hold
harmless each such holder and each underwriter,
within the meaning of the Act, who may purchase from
or sell for any such holder any Warrants and/or
Warrant Shares from and against any and all losses,
claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material
fact contained in the Registration Statement or any
post-effective amendment thereto or any registration
statement under the Act or any prospectus included
therein required to be filed or furnished by reason
of this Section (j) or caused by any omission or
alleged omission to state therein a material fact
required to be stated therein or necessary to make
the statements therein not misleading, except insofar
as such losses, claims, damages or liabilities are
caused
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by any such untrue statement or alleged untrue
statement or omission or alleged omission based upon
information furnished or required to be furnished in
writing to the Company by such holder or underwriter
expressly for use therein, which indemnification
shall include each person, if any, who controls any
such underwriter within the meaning of such Act
provided, however, that the Company will not be
liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in
said registration statement, said preliminary
prospectus, said final prospectus or said amendment
or supplement in reliance upon and in conformity with
written information furnished by such Holder or any
other Holder, specifically for use in the preparation
thereof.
(D) Neither the giving of any notice by any
such majority holder nor the making of any request
for prospectuses shall impose any upon such majority
holder or owner making such request any obligation to
sell any Warrants and/or Warrant Shares, or exercise
any Warrants.
(4) The term "majority holder" as used in this
Section (j) shall include any owner or combination of owners
of Warrants or Warrant Shares in any combination if the
holdings of the aggregate amount of:
(i) the Warrants held by him or among
them, plus
(ii) the Warrants which he or they would
be holding if the Warrants for the Warrant Shares
owned by him or among them had not been exercised,
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would constitute a majority of the Warrants originally issued.
The Company's agreements with respect to Warrants or Warrant
Shares in this Section (j) shall continue in effect regardless of the exercise
and surrender of this Warrant.
NEWS COMMUNICATIONS, INC.
/s/ Michael Schenkler
By: ______________________________
Michael Schenkler
President
[SEAL]
Dated: May 21, 1996
Attest:
/s/ Robert Berkowitz
____________________________
Asst Secretary
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