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As filed with the Securities and Exchange Commission on January 14, 1998
Registration No. 333-41041
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
To
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MEDIA LOGIC, INC.
----------------------------
(Exact name of registrant as specified in its charter)
Massachusetts
----------------------------
State or other jurisdiction of
incorporation or organization)
04-2772354
----------------------------
(I.R.S. Employer
Identification No.)
310 South Street, Plainville, Massachusetts 02762
(508) 695-2006
----------------------------
(Address, including zip code,
and telephone, including area code,
of registrant's principal executive offices)
William E. Davis, Jr.
Chief Executive Officer
Media Logic, Inc.
310 South Street
Plainville, Massachusetts 02762
(508) 695-2006
----------------------------
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
Copy to:
Richard R. Kelly, Esquire
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
(617) 542-6000
----------------------------
Approximate date of commencement of proposed sale to public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
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If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [x].
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the
same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
----------------------------
Calculation of Registration Fee
Proposed Proposed
maximum maximum
Title of each class offering aggregate Amount of
of securities to be Amount to be price per offering registration
registered registered unit (1) price (1) fee (2)
_______________________________________________________________________________
Common Stock, par 3,642,538 $2.16 $7,881,732 $2,387
value $.01 per share
_______________________________________________________________________________
(1) Estimated solely for the purpose of calculating the registration fee and
in accordance therewith (i) pursuant to Rule 457(c) includes 1,757,575
shares based upon the average of the high and low sales prices of the
Registrant's Common Stock on the American Stock Exchange on November 20,
1997 which amount was $1.50 and 134,093 shares based upon the average of
the high and low sales prices of the Registrant's Common Stock on the
American Stock Exchange on January 8, 1998 which amount was $1.4375 and
(ii) pursuant to Rule 457(g) includes 1,750,870 shares subject to
warrants based upon the price at which such warrants may be exercised.
(2) A registration fee of $2,330 was paid in connection with the initial
filing on November 25, 1997 and an additional fee of $57 relating to the
additional 134,093 shares being registered pursuant to this Amendment No.
1 is being paid herewith.
----------------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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Subject to Completion Dated January 14, 1998
PROSPECTUS
MEDIA LOGIC, INC.
3,642,538 Shares of Common Stock
(Par Value $.01 Per Share)
----------------------------
The 3,642,538 shares of Common Stock of Media Logic, Inc., a
Massachusetts corporation (the "Company"), offered hereby are being sold by
the selling stockholders identified herein (the "Selling Stockholders").
Such offers and sales may be made on the American Stock Exchange, or
otherwise, at prices and on terms then prevailing, or at prices related to
the then-current market price, or in negotiated transactions, or by
underwriters pursuant to an underwriting agreement in customary form, or in a
combination of any such methods of sale. The Selling Stockholders may also
sell such shares in accordance with Rule 144 under the Securities Act of
1933, as amended (the "1933 Act"). The Selling Stockholders are identified
and certain information with respect to the Selling Stockholders is provided
under the caption "Selling Stockholders" herein, to which reference is made.
The expenses of the registration of the securities offered hereby, including
fees of counsel for the Company, will be paid by the Company. The following
expenses will be borne by the Selling Stockholders: underwriting discounts
and selling commissions, if any, and the fees of legal counsel, if any, for
the Selling Stockholders in connection with the registration of the shares
offered herein. The filing by the Company of this Prospectus in accordance
with the requirements of Form S-3 is not an admission that the person whose
shares are included herein is an "affiliate" of the Company.
The Selling Stockholders have advised the Company that they have not
engaged any person as an underwriter or selling agent for any of such shares,
but they may in the future elect to do so, and they will be responsible for
paying such a person or persons customary compensation for so acting. The
Selling Stockholders and any broker executing selling orders on behalf of any
Selling Stockholder may be deemed to be "underwriters" within the meaning of
the 1933 Act, in which event commissions received by any such broker may be
deemed to be underwriting commissions under the 1933 Act. The Company will
not receive any of the proceeds from the sale of the securities offered
hereby. The Common Stock is listed on the American Stock Exchange under the
symbol TST. On January 8, 1998, the closing sale price of the Common
Stock, as reported by the American Stock Exchange, was $1.4375 per share.
----------------------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" ON PAGE 4 OF THIS PROSPECTUS.
----------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------------------
No person is authorized in connection with any offering made hereby to
give any information or to make any representations other than as contained
in this Prospectus, and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company. This Prospectus is not an offer to sell, or a solicitation of an
offer to buy, by any person in any jurisdiction in which it is unlawful for
such person to make such an offer or solicitation. Neither the delivery of
this Prospectus nor any sales made hereunder shall under any circumstances
create any implication that the information contained herein is correct as of
any time subsequent to the date hereof.
----------------------------
The date of this Prospectus is January , 1998.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY STATE.
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AVAILABLE INFORMATION
The Company is subject to certain informational reporting
requirements of the Securities Exchange Act of 1934, as amended (the "1934
Act"), and in accordance therewith files reports and other information with
the Securities and Exchange Commission (the "Commission"). These reports,
proxy statements and other information can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024 of the
Commission's office at 450 Fifth Street, N.W., Judiciary Plaza, Washington,
DC 20549, and at its regional offices located at 7 World Trade Center, Suite
1300, New York, NY 10048 and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, IL 60661. Copies of such reports, proxy statements and other
information can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, DC 20549
at prescribed rates. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The address of the
Commission's Web site is http://www.sec.gov. The Company's Common Stock is
traded on the American Stock Exchange. Reports and other information
concerning the Company may be inspected at the offices of the American Stock
Exchange, 86 Trinity Place, New York, New York 10006-1181. Additional
updating information with respect to the securities covered herein may be
provided in the future to purchasers by means of appendices to this
Prospectus.
The Company has filed with the Commission in Washington, DC a
registration statement (herein, together with all amendments and exhibits,
referred to as the "Registration Statement") under the 1933 Act with respect
to the securities offered or to be offered hereby. This Prospectus does not
contain all of the information included in the Registration Statement,
certain items of which are omitted in accordance with the rules and
regulations of the Commission. For further information about the Company and
the securities offered hereby, reference is made to the Registration
Statement and the exhibits thereto.
The Company will provide without charge to each person to whom
this Prospectus is delivered, on the written or oral request of such person,
a copy of any document incorporated herein by reference, excluding exhibits.
Requests should be made to Media Logic, Inc., 310 South Street, Plainville,
MA 02762, telephone (508) 695-2006 and directed to the attention of Paul M.
O'Brien, Vice President and Chief Financial Officer.
2
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TABLE OF CONTENTS
PAGE
RISK FACTORS.......................................................... 4
THE COMPANY........................................................... 8
SELLING STOCKHOLDERS.................................................. 9
PLAN OF DISTRIBUTION.................................................. 11
LEGALITY OF COMMON STOCK.............................................. 11
EXPERTS............................................................... 11
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE..................... 11
3
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RISK FACTORS
An investment in the shares being offered by this Prospectus
involves a high degree of risk. In addition to the other information
contained in this Prospectus or incorporated herein by reference, prospective
investors should carefully consider the following risk factors before
purchasing the shares offered hereby. This Prospectus contains and
incorporates by reference forward-looking statements within the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995 which are
based on management's current expectations. To the extent that any of the
statements contained herein relating to the Company's products and its
operations are forward looking, such statements are based on management's
current expectations and involve a number of uncertainties and risks.
Reference is also made in particular to the discussion set
forth under "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Company's Annual Report on Form 10-K and
Amendment No. 1 to the Form 10-K on Form 10K/A (collectively, the "Form
10-K") for the fiscal year ended March 31, 1997 and in the Company's
Quarterly Reports on Form 10-Q for the quarters ended June 30, 1997 and
September 30, 1997 and under "Description of Business" in the Form 10-K,
incorporated into this Prospectus by reference. Both the forward-looking
statements contained in this Prospectus and those incorporated herein by
reference are based on current expectations that involve a number of
uncertainties including those set forth in the risk factors below. Actual
results could differ materially from those projected in the forward-looking
statements.
Shift in Business Focus. While in fiscal years 1996 and 1997,
the Company still derived most of its revenue from sales of its certifiers,
evaluators and duplicators for floppy disks and tape, the Company has shifted
its focus to its automated tape libraries for the data storage market. In
fiscal year 1996, the Company sold only pre-production units of its automated
data library ("ADL") products. The Company first commenced sales of its
production units of ADL products, other than evaluation units, in the second
quarter of fiscal year 1997 and therefore has limited experience in selling
its ADL products. The Company expects to derive a substantial majority of
its total revenue and net income from sales of its ADL products in the
future. Continued growth of the Company's ADL business will depend upon
several factors, including demand for these libraries, the Company's ability
to develop new products to meet the changing requirements of its customers,
technological change and competitive pressures. There can be no assurance
that the Company's ADL business will take hold and grow.
Competition. Competition in the data storage market,
including the automated tape library market, is intense, with a large number
of companies in these markets. Many of the Company's current and potential
competitors have longer operating histories, greater name recognition, larger
installed customer bases and significantly greater financial, technical and
marketing resources than the Company. As a result, such competitors may be
able to adapt more quickly to new or emerging technologies and changes in
customer requirements, or to devote greater resources to the promotion and
sale of their products than the Company. An increase in competition could
result in price reductions and loss of market share. Such competition and
any resulting reduction in gross margins could have a material adverse effect
on the Company's business, financial condition and results of operations.
Rapid Technological Change; Dependence on New Product
Development. The computer industry in general, and the markets for the
Company's automated tape library products in particular, are characterized by
rapidly changing technology, frequent new product introductions, and
significant competition. In order to keep pace with this rapidly changing
market environment, the Company must continually develop and incorporate into
its products new technological advances and features desired by the
marketplace at acceptable prices. The successful development and
commercialization of new products involves many risks, including the
identification of new product opportunities, timely completion of the
development process, the control and recoupment of development and production
costs and acceptance by customers of the Company's products. There can be no
assurance that the Company will be successful in identifying, developing,
manufacturing and marketing new products in a timely and cost effective
manner, that products or technologies developed by others will not render the
Company's products or technologies uncompetitive, or that the Company's
products will be accepted in the marketplace.
Protection of Proprietary Technology. The Company's ability
to compete effectively with other companies will depend, in part, on the
ability of the Company to maintain the proprietary nature of its technology.
There can be no assurance that competitors in both the United States and
foreign countries, many of which have substantially greater resources and
have made substantial investments in competing technologies, do not have or
will not obtain patents that will prevent, limit or interfere with the
Company's ability to make and sell its products or intentionally infringe the
Company's patents. While the Company possesses or licenses certain patent
rights, it relies in large part on unpatented proprietary technology, and
there can be no assurance that others may not independently develop the same
or similar technology, whether or not patented, or otherwise obtain access to
the Company's proprietary technology.
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Cyclical Nature of the Computer Industry. The computer
industry is highly cyclical and has historically experienced periodic
downturns. The cyclical nature of the computer industry is beyond the
control of the Company. As an example, the Company experienced a substantial
reduction in demand for its original product line (floppy disk certification,
testing and duplication equipment). A similar decrease in demand for the
Company's new automated tape library products could have a material adverse
effect on its business and products.
Uncertainties Related to Company's Ability to Raise Additional
Necessary Capital. The Company has spent and expects to continue to spend
substantial funds for continuation of the research and development of product
candidates and will also require additional funds in order to manufacture,
market and sell its products. In March 1997, the Company completed a private
placement of convertible subordinated debentures (the "March Private
Placement") which resulted in approximately $3,530,000 in gross proceeds to
the Company and in October 1997 the Company completed a private placement of
convertible debentures (the "October Private Placement") which resulted in
$750,000 in gross proceeds to the Company. In addition, in December 1997,
the Company completed a private placement of the Common Stock (the "December
Private Placement") which resulted in $1,530,000 in gross proceeds to the
Company. However, because of its continuing losses from operations, the
Company anticipates that unless revenues increase significantly, it will
require additional capital in order to continue its operations. See
"--Recent Losses." The Company has no assurance that it will be able to
raise such additional capital, if needed, in a timely manner or on favorable
terms, if at all. If the Company is unable to increase revenues
significantly and/or secure additional financing, the Company could be forced
to curtail or discontinue its operations.
Recent Losses. For the six months ended September 30, 1997,
the Company incurred a loss of $2,098,630 on revenues of $767,626. For the
fiscal year ended March 31, 1997, the Company incurred a loss of $4,122,288
on revenues of $3,644,478, and for the fiscal year ended March 31, 1996, the
Company incurred a loss of $7,818,819 on revenues of $3,578,236. These recent
losses are primarily the result of a decline in the revenues generated in the
Company's traditional markets during a period when the Company was making a
large investment in its ADL technology. The Company believes that the trends
that resulted in its losses could continue for the foreseeable future.
Dependence on Key Personnel. The Company's success depends to
a significant extent on the performance of its senior management, including
its Chief Executive Officer and President, William E. Davis, Jr., its Vice
President of Sales, B. Edward Fitzgibbons, its Director of Engineering, James
Hackathorn, and its Vice President and Chief Financial Officer, Paul M.
O'Brien. Competition for highly skilled employees with technical, management
and other specialized training is intense in the computer industry. The
Company's failure to attract additional qualified employees or to retain the
services of key personnel could have a material adverse effect on the
Company's business.
Volatility of Share Price. Market prices for securities of
technology companies have been volatile. The market price for the Company's
Common Stock has fluctuated significantly since public trading commenced in
1987, and it is likely that the market price will continue to fluctuate in
the future. Quarterly fluctuations in operating results, announcements by
the Company or the Company's present or potential competitors, technological
innovations or new commercial products or services, developments or disputes
concerning patent or proprietary rights and other events or factors may have
a significant impact on the Company's business and on the market price of the
Common Stock.
Control by Existing Management and Stockholders. The
directors, officers and principal stockholders of the Company and certain of
their affiliates and/or family members beneficially own in the aggregate
approximately 38.7% of the Company's Common Stock (including shares issuable
upon exercise of options held by such persons, which options are currently
exercisable and shares issuable upon exercise of warrants held by such
persons, which warrants are currently exercisable). As a result of such
ownership, these stockholders will exert influence over all matters requiring
approval by the stockholders of the Company, including the election of
directors. One stockholder, Raymond Leclerc, has a contractual right to
Board representation and the purchasers in the December Private Placement
have the contractual right to board representation in certain circumstances.
Certain Charter and By-Law Provisions and Massachusetts Laws
May Affect Stock Price. The Company's Restated Articles of Organization and
By-laws contain provisions that may make it more difficult for a third party
to acquire control of, or discourage acquisition bids for, the Company. In
addition, certain Massachusetts laws contain provisions that may have the
effect of making it more difficult for a third party to acquire control of,
or discourage acquisition bids for, the Company. These provisions could
limit the price that certain investors might be willing to pay in the future
for shares of Common Stock.
Shares Eligible for Future Sale. Sales of substantial amounts
of Common Stock in the public market could have an adverse effect on the
price of the Company's Common Stock. Approximately 7,317,936 shares of
Common Stock are currently freely tradable on the open market. In addition,
approximately 1,245,300 shares are eligible for sale pursuant to Rule 701 or
Rule 144 of the 1933 Act. Also, there were a total of 575,138 options to
purchase Common Stock outstanding as of January 8, 1998 pursuant to the
Company's stock option plans, and 399,672 of such options were vested and can
be exercised at any time prior to their respective expiration dates. Lee H.
Elizer, the
5
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former Chief Executive Officer and President of MediaLogic ADL, is entitled
to receive 8,000 shares of Common Stock in October 1998, which, under the
terms of his separation agreement with the Company, are expected to be
registered under the 1933 Act following their issuance.
In June 1997, the Company registered for resale, on a
registration statement on Form S-3 (the "June 1997 Registration Statement"),
up to 3,565,656 shares of Common Stock issuable upon conversion of $3,530,000
aggregate principal amount of 7% convertible subordinated debentures due 2000
(the "March Debentures"), and interest thereon, issued by the Company to the
selling stockholders named therein. The principal amount of the March
Debentures is convertible at any time into shares of the Company's Common
Stock based on a predetermined formula. As of the date hereof, all of the
remaining holders of the March Debentures and the Company have agreed to set
a fixed conversion price for the March Debentures of $.90 per share of Common
Stock until January 28, 1998 and thereafter the price at which the March
Debentures will convert will be the lower of (i) $2.805, which amount is 120%
of the average closing bid price of the Common Stock as calculated over the
five trading-day period ending on March 21, 1997 (the "March Closing Date
Price") and (ii) $.90 (the "March Conversion Date Price"). Each individual
$10,000 principal amount March Debenture may be converted only in its
entirety. The March Debentures bear interest at the rate of 7% per year.
Interest is payable only upon conversion of the March Debentures and, at the
Company's option, is payable either in cash or in shares of the Company's
Common Stock based on the average closing sale price of the Common Stock as
calculated over the five trading-day period ending on the trading day
immediately preceding the date of conversion.
The Company registered 3,565,656 shares of Common Stock (the
"Registered Shares") pursuant to the June 1997 Registration Statement to
insure that there would be a sufficient number of registered shares in the
event that the market price for the Company's Common Stock declined
substantially. The Registered Shares represented the approximate number of
shares which would be issuable upon conversion of the March Debentures
(excluding shares issuable upon conversion of accrued interest) if the March
Conversion Date Price were $0.99 per share. An aggregate of 3,063,222 shares
have been offered pursuant to the Prospectus contained in the June 1997
Registration Statement as amended by Prospectus Supplement No. 1 dated
December 31, 1997, which number includes (i) 2,231,000 shares issued to
date for March Debentures already converted, (ii) 777,778 shares issuable
upon conversion of the remainder of the March Debentures outstanding and
(iii) 54,444 shares issuable upon conversion of approximately one year's
accrued interest, based on an assumed March Conversion Date Price of $.90 per
share for the principal amount and interest thereon of the March Debentures
outstanding as of December 31, 1997. If the March Debentures become
convertible into more than 3,565,656 shares, the Company would be obligated
to register additional shares of Common Stock. Through January 8, 1998,
approximately $2,830,000 aggregate principal amount of the March Debentures
have been converted into 2,177,463 shares of Common Stock, and approximately
$90,000 aggregate interest amount has been converted into 54,264 shares of
Common Stock.
891,668 of the Shares offered hereby are issuable upon
conversion of $750,000 aggregate principal amount of 7% convertible
debentures due 2000 (the "October Debentures"), and interest thereon, issued
by the Company in the October Private Placement. At any time beginning on
January 12, 1998, the principal amount of the October Debentures is
convertible into shares of the Company's Common Stock based on a
predetermined formula. The price at which the October Debentures will
convert will be $.90 until January 28, 1998 and thereafter will be the lower
of (i) $1.95, which amount is 120% of the average closing bid price of the
Common Stock as calculated over the five trading-day period ending on October
29, 1997 (the "October Closing Date Price") and (ii) $.90 (the "October
Conversion Date Price"). The October Debentures bear interest at the rate of
7% per year. Interest is payable only upon conversion of the October
Debentures and, at the Company's option, is payable either in cash or in
shares of the Company's Common Stock based on the average closing sale price
of the Common Stock as calculated over the five trading-day period ending on
the trading day immediately preceding the date of conversion.
The Company has agreed to register for resale from time to
time by the purchasers thereof the shares of Common Stock underlying the
October Debentures. All of the shares registered for resale by the holders
thereof may be reoffered and resold in the public trading market from time to
time during the period the Company has agreed to maintain the effectiveness
of the registration statement registering those shares. Pursuant to the
registration statement of which this Prospectus is a part, the Company has
registered 891,668 shares of Common Stock for issuance upon conversion of the
October Debentures. The shares registered represents the approximate number
of shares which would be issuable upon conversion of the October Debentures
(including shares issuable upon conversion of one year of accrued interest)
if the October Conversion Date Price were $0.90 per share. If the October
Debentures become convertible into more than 891,668 shares, the Company will
be obligated to register additional shares of Common Stock.
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650,870 of the Shares offered hereby are issuable upon
exercise of warrants to purchase Common Stock (the "Advent Warrants") issued
to ACFS Limited Partnership ("ACFS") and to Digital Media & Communications
L.P. ("Digital Media") in connection with the March Private Placement. The
Advent Warrants are exercisable at any time prior to September 22, 2001 at an
exercise price of $3.00 per share of Common Stock.
900,000 of the Shares offered hereby are issuable upon
exercise of warrants to purchase Common Stock (the "Adar Warrants") issued to
Adar Equities LLC, ("Adar") in connection with the March Private Placement.
The Adar Warrants are exercisable at any time prior to March 24, 2002 at an
exercise price of $3.00 per share of Common Stock.
200,000 of the Shares offered hereby are issuable upon
exercise of warrants to purchase Common Stock (the "Rochon Warrants") issued
to Rochon Capital Group, Ltd. in connection with the March Private Placement.
The Rochon Warrants are exercisable at an exercise price of $2.00 per share
of Common Stock.
The Company has agreed to register for resale from time to
time by the purchasers thereof the shares of Common Stock underlying the
Advent Warrants, the Adar Warrants and the Rochon Warrants (collectively, the
"Warrants"). All of the shares registered for resale by the holders thereof,
including the shares offered hereby, may be reoffered and resold in the
public trading market from time to time during the period the Company has
agreed to maintain the effectiveness of the registration statement
registering those shares.
1,000,000 of the Shares offered hereby were issued to Raymond
W. Leclerc in a private placement in September 1995. The Company has agreed
to include such shares held by Mr. Leclerc in certain registrations filed by
the Company under the 1933 Act and accordingly, such shares are included in
the registration statement of which this Prospectus is a part.
The Company issued warrants (the "Adar October Warrants") to
purchase 500,000 shares of Common Stock to Adar in connection with the
October Private Placement. The Adar October Warrants are exercisable at any
time during the period commencing January 26, 1998 and ending January 26,
2003 at an exercise price of $2.00 per share.
The Company issued warrants (the "Wexford Warrants") to
purchase an aggregate of 2,000,000 shares of Common Stock to Imprimis SB L.P.
and Wexford Spectrum Investors LLC in connection with the December Private
Placement. 1,000,000 of such warrants are exercisable at an exercise price of
$3.00 per share and 1,000,000 of such warrants are exercisable at an exercise
price of $1.50 per share. The Wexford Warrants may be exercised at any time
prior to December 29, 2002. The Company has also agreed to issue warrants
(the "Placement Agent Warrants") to purchase 250,000 shares of Common Stock
to each of Adar and Boston Group, L.P. in connection with the December
Private Placement. The Placement Agent Warrants will be exerciseable at any
time during the period commencing March 29, 1998 and ending on March 29, 2003
at an exercise price of $2.00 per share.
The Company has agreed to register for resale from time to
time by the purchasers thereof the shares of Common Stock issued in the
December Private Placement and the shares of Common Stock underlying the Adar
October Warrants, the Wexford Warrants and the Placement Agent Warrants. All
of such shares registered for resale by the holders thereof may be reoffered
and resold in the public trading market from time to time during the period
the Company has agreed to maintain the effectiveness of the registration
statement registering those shares.
Absence of Dividends. The Company has not paid dividends
since its inception and does not anticipate paying any dividends in the
foreseeable future.
Dilution. Dilution is likely to occur upon exercise of
outstanding warrants and existing stock options and upon the conversion of
the March Debentures and the October Debentures. See "--Shares Eligible For
Future Sale."
American Stock Exchange Listing. The Company does not fully
satisfy the American Stock Exchange guidelines for continued listing and
there is no assurance that the listing of the Common Stock on the American
Stock Exchange will be continued.
7
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THE COMPANY
Media Logic, Inc. was incorporated in 1982 to develop and
manufacture certification equipment to be used by manufacturers of flexible
storage media such as floppy disks. The Company's principal product line is
automated tape library systems for data storage and retrieval, which was
introduced in fiscal year 1996.
The Company's data storage libraries have been developed by
MediaLogic ADL, Inc. ("MediaLogic ADL"), a subsidiary of the Company which
was established in 1994 to develop, market and sell automated data storage
libraries. In fiscal year 1996, MediaLogic ADL introduced automated tape
libraries in 4mm and 8mm tape technologies and expects to introduce in fiscal
year 1998, automated tape libraries with digital linear tape ("DLT")
technology. Tape drives from a number of manufacturers are supported by the
libraries as are system management and software configurations from a variety
of vendors. In fiscal 1996, the Company sold only pre-production units, and
began delivering production units in the second quarter of fiscal 1997.
Potential customers for the ADL line of automated tape libraries are data
dependent companies in all types of businesses.
The certification, test and duplication product line,
representing the Company's historical products, but which is not expected to
be the basis for the bulk of the Company's future business, includes: (1)
certifiers which are used by computer disk manufacturers to test each disk as
it is manufactured and to sort disks into three industry established quality
categories, (2) tape certification and evaluation equipment used by
manufacturers and suppliers of magnetic tapes, to evaluate and qualify the
quality of the tapes, and (3) floppy disk duplication equipment utilizing
industrial disk drives which have been developed by the Company for use by
software publishers and duplicators.
The principal executive offices of the Company are located at
310 South Street, Plainville, Massachusetts 02762, and the Company's
telephone number is (508) 695-2006.
8
<PAGE>
SELLING STOCKHOLDERS
891,668 of the Shares offered hereby are issuable upon
conversion of the October Debentures which were issued to F.T.S. Worldwide
Corp. in the October Private Placement pursuant to a Securities Purchase
Agreement between the Company and F.T.S. Worldwide Corp. (the Debenture, the
form of Amendment No. 1 thereto and the Securities Purchase Agreement have
been filed as Exhibits 99.9, 99.11 and 99.8, respectively, to the
registration statement of which this Prospectus is a part). 891,668 shares
represents the number of shares issuable upon conversion of the October
Debentures as of the date of this Prospectus, assuming that one year's
interest of approximately $52,500 has accrued under the October Debentures.
The number of shares issuable upon conversion of accrued interest under the
October Debentures will change if the October Debentures are held for more or
less than one year.
650,870 of the Shares offered hereby are issuable upon
exercise of the Advent Warrants, the form of which Warrants are filed as
Exhibits 99.2, 99.3, 99.4 and 99.5 to the registration statement of which
this Prospectus is a part. 900,000 of the Shares offered hereby are issuable
upon exercise of the Adar Warrants, the form of which Warrant is filed as
Exhibit 99.7 to the registration statement of which this Prospectus is a
part. 200,000 of the Shares offered hereby are issuable upon exercise of the
Rochon Warrants, the form of which Warrant is filed as Exhibit 99.6 to the
registration statement of which this Prospectus is a part.
1,000,000 of the Shares offered hereby were issued to Raymond
Leclerc in a private placement in October 1995 pursuant to a Stock Purchase
Agreement, dated September 25, 1995, between the Company and Mr. Leclerc, a
copy of which is filed as Exhibit 99.1 to the registration statement of which
this prospectus is a part.
The following table sets forth information with respect to the
beneficial ownership of the Company's Common Stock by the Selling
Stockholders as of January 8, 1998, as adjusted to reflect the sale of the
Common Stock offered hereby by each Selling Stockholder.
<TABLE>
<CAPTION>
Shares Owned Prior Shares Owned
to Offering (1) Number of After Offering (2)
------------------ Shares Being ------------------
Selling Stockholder Number Percent Offered Number Percent
- -------------------- --------- ------- ------------ ------- -------
<S> <C> <C> <C> <C> <C>
Adar Equities LLC(3) 1,400,000 12.0% 900,000 500,000 4.3%
Digital Media &
Communications Limited
Partnership(4) 1,262,368 11.8 410,870 851,498 8.0
Raymond Leclerc(5) 1,168,300 11.4 1,000,000 168,300 1.6
F.T.S. Worldwide Corp.(6) 1,225,001 10.7 891,668 333,333 2.9
ACFS Limited Partnership(7) 240,000 2.3 240,000 0 --
Rochon Capital Group, Ltd.(8) 200,000 1.9 200,000 0 --
</TABLE>
_____________
(1) The number of shares of Common Stock issued and outstanding on January
8, 1998 was 10,263,660. The calculation of percentage ownership for
each listed Selling Stockholder is based upon the number of shares of
Common Stock issued and outstanding at January 8, 1998, plus the shares
of Common Stock issuable upon exercise of the Warrants or conversion of
the October Debentures, as the case may be, which are offered hereby by
such Selling Stockholder.
(2) Assuming all shares offered hereby are sold to unaffiliated third
parties.
(3) Includes 900,000 shares issuable upon exercise of the Adar Warrants and
500,000 shares issuable upon exercise of the Adar October Warrants.
(4) Includes 410,870 shares issuable upon exercise of the Advent Warrants.
(5) Mr. Leclerc is a director of the Company.
9
<PAGE>
(6) Includes 891,668 shares issuable to F.T.S. Worldwide Corp. upon
conversion of October Debentures and interest thereon at an assumed
conversion price of $.90. The price at which the October Debentures will
convert into shares of Common Stock will be $.90 until January 28, 1998 and
thereafter will be will be the lower of (i) $1.95, which amount is 120% of
the average closing bid price of the Common Stock as calculated over the five
trading-day period ending on October 29, 1997 and (ii) $.90. Also includes
333,333 Shares issuable to F.T.S. Worldwide Corp. upon conversion of March
Debentures at an assumed conversion price of $.90. The general conversion
price or prices for the March Debentures and the October Debentures will vary
accordingly, and the number and percentage of shares of Common Stock
beneficially owned by F.T.S. Worldwide Corp. will be adjusted at the time of
conversion to reflect changes in the average closing bid price of the Common
Stock, the amount of accrued interest at the time of conversion, and stock
splits, stock dividends and other similar events.
(7) Represents shares issuable upon exercise of the Advent Warrants.
(8) Represents shares issuable upon exercise of the Rochon Warrants.
10
<PAGE>
PLAN OF DISTRIBUTION
The 3,642,538 shares of Common Stock of the Company offered
hereby may be offered and sold from time to time by the Selling Stockholders,
or by pledgees, donees, transferees or other successors in interest. The
Selling Stockholders will act independently of the Company in making
decisions with respect to the timing, manner and size of each sale. Such
sales may be made on the American Stock Exchange or otherwise, at prices
related to the then current market price or in negotiated transactions,
including pursuant to an underwritten offering or one or more of the
following methods: (a) purchases by a broker-dealer as principal and resale
by such broker or dealer for its account pursuant to this Prospectus; (b)
ordinary brokerage transactions and transactions in which a broker solicits
purchasers; and (c) block trades in which a broker-dealer so engaged will
attempt to sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction. In effecting sales,
brokers or dealers engaged by the Selling Stockholders may arrange for other
brokers or dealers to participate. Brokers or dealers may receive commissions
or discounts from the Selling Stockholders or from the purchasers in amounts
to be negotiated immediately prior to the sale. The Selling Stockholders may
also sell such shares in accordance with Rule 144 under the 1933 Act.
The Company has agreed to use its best efforts to maintain the
effectiveness of the registration of the shares being offered hereunder until
the earlier of (i) September 21, 2001 and (ii) such time as all shares of
Common Stock issued or issuable upon exercise of the Warrants or upon
conversion of the October Debentures have been registered under the 1933 Act
and disposed of in accordance with an effective registration statement under
the 1933 Act.
The Selling Stockholders and any brokers participating in such
sales may be deemed to be underwriters within the meaning of the 1933 Act.
There can be no assurance that the Selling Stockholders will sell any or all
of the shares of Common Stock offered hereunder.
All proceeds from any such sales will be the property of the
Selling Stockholders who will bear the expense of underwriting discounts and
selling commissions, if any, and the Selling Stockholders' own legal fees, if
any.
LEGALITY OF COMMON STOCK
The validity of the issuance of the shares of Common Stock
offered hereby is being passed upon for the Company by Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., Boston, Massachusetts. Richard R. Kelly,
Esq., a member of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., is the
Clerk of the Company.
EXPERTS
The consolidated balance sheets of the Company as of March 31,
1997 and 1996 and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended March 31, 1997, incorporated by reference in this Prospectus and
elsewhere in the registration statement, have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with
respect thereto, and are incorporated herein in reliance upon the authority
of said firm as experts in accounting and auditing in giving said reports.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the
Commission are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K and Amendment
No. 1 to the Form 10-K on Form 10-K/A for the fiscal year ended March 31,
1997, filed pursuant to Section 13 or 15(d) of the 1934 Act (File No. 1-9605).
(b) The Company's Quarterly Reports on Form 10-Q for the
fiscal quarters ended June 30, 1997 and September 30, 1997, filed pursuant to
Section 13 or 15(d) of the 1934 Act (File No. 1-9605).
(c) The Company's Current Report on Form 8-K filed with the
Commission on December 31, 1997.
(d) The description of the Company's capital stock contained
in the Company's registration statement on Form 8-A under the 1934 Act (File
No. 1-9605), including amendments or reports filed for the purpose of
updating such description.
All reports and other documents subsequently filed by the
Company with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d)
of the 1934 Act, prior to the filing of a post-effective amendment which
indicates that all securities covered by this Prospectus have been sold or
which deregisters all such securities then remaining unsold, shall be deemed
to be incorporated by reference herein and to be a part hereof from the date
of the filing of such reports and documents.
11
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following expenses incurred in connection with the sale of
the securities being registered will be borne by the Registrant. Other than
the registration fee, the amounts stated are estimates.
SEC Registration Fee $ 2,387.00
AMEX Fees 17,500.00
Legal Fees and Expenses 15,000.00
Accounting Fees and Expenses 5,000.00
Miscellaneous 5,113.00
----------
TOTAL $45,000.00
----------
----------
The Selling Stockholders will bear the expense of their own
legal counsel, if any.
Item 15. Indemnification of Officers and Directors
Article VI.A of the Company's Restated Articles of
Organization provides that no Director of the Company shall be personally
liable to the corporation or to any of its stockholders for monetary damages
for any breach of fiduciary duty by such Director as a Director
notwithstanding any provision of law imposing such liability; provided,
however, that, to the extent required from time to time by applicable law,
Article VI.A shall not eliminate the liability of a Director, to the extent
such liability is provided by applicable law, (a) for any breach of a
Director's duty of loyalty to the corporation or its stockholders, (b) for
acts or omissions not in good faith which involve intentional misconduct or a
knowing violation of law, (c) under Section 61 or Section 62 of the Business
Corporation Law of the Commonwealth of Massachusetts, or (d) for any
transaction from which the Director derived an improper personal benefit. No
amendment to or repeal of Article VI.A shall apply to or have any effect on
the liability or alleged liability of any Director for or with respect to any
acts or omissions of such Director occurring prior to the effective date of
such amendment or repeal.
In addition, the Company's By-Laws provide as follows:
Article First, Section 12. Indemnity. (a) The Corporation
shall indemnify and reimburse out of the corporate funds any
person (or the personal representative of any person) who at any
time serves or shall have served as a Director, officer or
employee of the Corporation, or as a Director, officer or
employee of another Corporation the majority of the stock of
which is owned by the Corporation, whether or not in office at
the time, against and for any and all claims and liabilities to
which he may be or become subject by reason of such service, and
against and for any and all expenses necessarily incurred in
connection with the defense or reasonable settlement of any legal
or administrative proceedings to which he is made a party by
reason of such service, except in relation to matters as to which
he shall be finally adjudged not to have acted in good faith in
the reasonable belief that his action was in the best interest of
the Corporation or to the extent that such matter relates to
service with respect to an employee benefit plan, in the best
interests of the participants or beneficiaries of such employee
benefit plan. In effecting such indemnity and reimbursement, the
stockholders may enter into such agreements and direct the
officers of the Corporation to make such payment or payments and
take such other action (including employment of counsel to defend
against such claims and liabilities) as may in their judgment be
reasonably necessary or desirable. Such indemnification or
reimbursement shall not be deemed to exclude any other rights or
privileges to which such person may be entitled.
(b) The Board of Directors may by vote act to indemnify any
or all officers of the Corporation from liability for acts done
by them in good faith on behalf of the Corporation.
(c) The Directors may vote to defray the expense of
defending any claims brought against one or more Directors or
other Officers on account of any action purported to have been
done in any official capacity, and may vote to reimburse any such
Director or other Officer for any sum paid by him to settle any
such claim; provided that if it shall be finally determined by
judgment or decree of any court that any such Director or other
Officer is personally liable on account of any such claim, he
shall reimburse the Company for his pro rata share of any expense
so defrayed or reimbursement so made by the Company.
(d) To the extent legally permissible, the Corporation
shall indemnify each of its Directors and Officers against all
liabilities including expenses imposed upon or reasonably
incurred by him in connection with any action, suit or other
proceeding in which he may be involved or with which he may be
threatened, while in office or thereafter, by reason of his acts
II-1
<PAGE>
or omissions as such Director or Officer, unless in such
proceeding he shall be finally adjudged liable by reason of
dereliction in the performance of his duty as such Director or
Officer; provided, however, that such indemnification shall not
cover liabilities in connection with any matter which shall be
disposed of through a compromise payment by such Director or
Officer, pursuant to a consent decree or otherwise, unless such
compromise shall be approved as in the best interests of the
Corporation, after notice that it involves such indemnification,
by a vote of the Board of Directors in which no interested
Director participates, or by a vote or the written approval of
the holders of a majority of the outstanding stock at the time
having the right to vote for Directors, not counting as
outstanding any stock owned by any interested Director or
Officer. The rights of indemnification hereby provided shall not
be exclusive of or affect any other rights to which any Director
or Officer may be entitled. As used in this paragraph, the terms
"Director" and "Officer" include their respective heirs,
executors and administrators, and an "interested" Director or
Officer is one against whom as such the proceedings in question
or another proceeding on the same or similar grounds is then
pending.
Item 16. Exhibits.
Exhibit
Number Description
- ------- -----------
4.1 Article 4 of Restated Articles of Organization of the Registrant
(incorporated by reference to Exhibit 3.1 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended March 31,
1993)
4.2 By-Laws of the Registrant (incorporated by reference to Exhibit
3.2 to the Registrant's Registration Statement on Form S-18,
No. 33-14722-B, effective July 23, 1987)
4.3 Form of Common Stock Certificate (incorporated by reference to
Exhibit 10.7 to the Registrant's Registration Statement on Form
S-18, No. 33-14722-B, effective July 23, 1987)
5 Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.,
with respect to the legality of the securities being registered
(filed herewith)
23.1 Consent of Arthur Andersen LLP (filed herewith)
23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(see Exhibit 5)
24* Power of Attorney (filed in Part II of this Registration
Statement)
99.1* Stock Purchase Agreement between Media Logic, Inc. and Raymond
Leclerc, dated September 25, 1995
99.2* Warrant Agreement between Media Logic, Inc. and Digital
Media & Communications L.P., dated March 24, 1997
("Digital Media Warrant")
99.3* Amendment to Digital Media Warrant, dated September 30,
1997
99.4* Warrant Agreement between Media Logic, Inc. and ACFS Limited
Partnership, dated March 24, 1997 ("ACFS Warrant")
99.5* Amendment to ACFS Warrant, dated September 30, 1997
99.6 Warrant Agreement between Media Logic, Inc. and Rochon Capital
Group, Ltd., dated October 29, 1997 (filed herewith)
99.7* Warrant Agreement between Media Logic, Inc. and Adar
Equities LLC, dated March 25, 1997
99.8* Securities Purchase Agreement between Media Logic, Inc. and
F.T.S. Worldwide Corp., dated October 29, 1997
99.9* Media Logic, Inc. 7% Convertible Debenture due October 29, 2000,
dated October 29, 1997
II-2
<PAGE>
99.10* Registration Rights Agreement between Media Logic, Inc. and
F.T.S. Worldwide Corp., dated October 29, 1997
99.11 Form of Amendment No. 1 to 7% Convertible Debentures Due October
29, 2000 dated as of December 29, 1997 between Media Logic,
Inc. and F.T.S. Worldwide Corp. (incorporated by reference to
Exhibit 99.3 to the Registrant's Current Report on Form 8-K
filed with the Commission on December 31, 1997)
* Previously filed.
Item 17. Undertakings.
A. Rule 415 Offering
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the 1933 Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) (Section 230.424(b)
of this chapter) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do
not apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant with or
furnished to the Commission pursuant to Section 13 or Section 15(d) of the
1934 Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the 1933 Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. Filings Incorporating Subsequent Exchange Act Documents by
Reference
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the 1934 Act) that is incorporated
by reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
C. Request for Acceleration of Effective Date or Filing of
Registration Statement on Form S-8
Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act
and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Plainville,
Massachusetts on January 14,1998.
MEDIA LOGIC, INC.
By: /s/ William E.Davis
----------------------------
William E. Davis, Jr.
Chief Executive Officer and
President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment to the Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
Signatures Title Date
- ------------ ------- -----
/s/ William E. Davis Director and Chief January 14, 1998
- --------------------
William E. Davis, Jr. Executive Officer and President
(principal executive officer)
/s/ Paul M. O'Brien Vice President and Chief Financial January 14, 19987
- --------------------
Paul M. O'Brien Officer (principal financial and
accounting officer)
- -------------------- Director January 14, 1998
Joseph L. Mitchell
* Director January 14, 1998
- --------------------
Francis S. Wyman
- -------------------- Director January 14, 1998
Raymond W. Leclerc
* Director January 14, 1998
- --------------------
Michael Salter
*By: /s/ William E. Davis
---------------------
William E. Davis, Jr.
attorney-in-fact
<PAGE>
MEDIA LOGIC, INC.
INDEX TO EXHIBITS FILED WITH
FORM S-3 REGISTRATION STATEMENT
Exhibit Sequential
Number Description Page No.
- ------- ----------- ----------
4.1 Article 4 of Restated Articles of Organization
of the Registrant (incorporated by reference
to Exhibit 3.1 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
March 31, 1993)
4.2 By-Laws of the Registrant (incorporated by
reference to Exhibit 3.2 to the Registrant's
Registration Statement on Form S-18,
No. 33-14722-B, effective July 23, 1987).
4.3 Form of Common Stock Certificate
(incorporated by reference to Exhibit 10.7
to the Registrant's Registration Statement
on Form S-18, No. 33-14722-B, effective
July 23, 1987)
5 Opinion of Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C., with respect to
the legality of the securities being registered (filed
herewith)
23.1 Consent of Arthur Andersen LLP (filed herewith)
23.2 Consent of Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C. (reference is
made to Exhibit 5)
24* Power of Attorney (filed in Part II of
this Registration Statement)
99.1* Stock Purchase Agreement between Media Logic, Inc.
and Raymond Leclerc, dated September 25, 1995
99.2* Warrant Agreement between Media Logic, Inc.
and Digital Media & Communications L.P.,
dated March 24, 1997 ("Digital Media Warrant")
99.3* Amendment to Digital Media Warrant, dated
September 30, 1997
99.4* Warrant Agreement between Media Logic, Inc.
and ACFS Limited Partnership, dated
March 24, 1997 ("ACFS Warrant")
99.5* Amendment to ACFS Warrant, dated
September 30, 1997
<PAGE>
99.6 Warrant Agreement between Media Logic, Inc.
and Rochon Capital Group, Ltd., dated
October 29, 1997 (filed herewith)
99.7* Warrant Agreement between Media Logic, Inc.
and Adar Equities LLC, dated March 25, 1997
99.8* Securities Purchase Agreement
between Media Logic, Inc. and F.T.S
Worldwide Corp., dated October 29, 1997
99.9* Media Logic, Inc. 7% Convertible
Debenture due October 29, 2000,
dated October 29, 1997
99.10* Registration Rights Agreement between
Media Logic, Inc. and F.T.S. Worldwide
Corp., dated October 29, 1997
99.11 Form of Amendment No. 1 to 7% Convertible Debentures Due October
29, 2000 dated as of December 29, 1997 between Media Logic,
Inc. and F.T.S. Worldwide Corp. (incorporated by reference to
Exhibit 99.3 to the Registrant's Current Report on Form 8-K
filed with the Commission on December 31, 1997)
* Previously filed.
<PAGE>
Exhibit 5
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
701 Pennsylvania Avenue, N.W. Telephone: 617/542-6000
Washington, D.C. 20004 Fax: 617/542-2241
Telephone: 202/434-7300 www.mintz.com
Fax: 202/434-7400
January 14, 1998
Media Logic, Inc.
310 South Street
Plainville, Massachusetts 02762
Ladies and Gentlemen:
We have acted as counsel to Media Logic, Inc., a Massachusetts
corporation (the "Company"), in connection with the preparation and filing
with the Securities and Exchange Commission of a Registration Statement on
Form S-3 (the "Registration Statement"), pursuant to which the Company is
registering under the Securities Act of 1933, as amended, a total of
3,642,538 shares (the "Shares") of its common stock, $.01 par value per share
(the "Common Stock"), for resale to the public. The Shares are to be sold by
the selling stockholders identified in the Registration Statement. This
opinion is being rendered in connection with the filing of the Registration
Statement. All capitalized terms used herein and not otherwise defined shall
have the respective meanings given to them in the Registration Statement.
In connection with this opinion, we have examined the Company's Restated
Articles of Organization and By-Laws, both as currently in effect; such other
records of the corporate proceedings of the Company and certificates of the
Company's officers as we have deemed relevant; and the Registration Statement
and the exhibits thereto.
Richard R. Kelly, Clerk of the Company, is a member of our firm.
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, photostatic or facsimile copies and
the authenticity of the originals of such copies.
Based upon the foregoing, we are of the opinion that (i) the Shares have
been duly and validly authorized by the Company and (ii) the Shares, when
sold, will be duly and validly issued, fully paid and non-assessable shares
of the Common Stock.
<PAGE>
Mintz, Levin, Cohn, Ferris, Glovsky, Popeo, P.C.
January 14, 1998
Page 2
Our opinion is limited to the General Corporation Laws of The
Commonwealth of Massachusetts, and we express no opinion with respect to the
laws of any other jurisdiction. No opinion is expressed herein with respect
to the qualification of the Shares under the securities or blue sky laws of
any state or any foreign jurisdiction.
We understand that you wish to file this opinion as an exhibit to the
Registration Statement, and we hereby consent thereto. We hereby further
consent to the reference to us under the caption "Legality of Common Stock"
in the prospectus included in the Registration Statement.
Very truly yours,
/s/ Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C.
-----------------------------------
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
cc: Richard R. Kelly, Esq.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated May 19, 1997
included in Media Logic Inc.'s Form 10-K for the year ended March 31, 1997
and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
------------------------
ARTHUR ANDERSEN LLP
Boston, Massachusetts
January 14, 1998
<PAGE>
MEDIA LOGIC, INC.
AND
ROCHON CAPITAL GROUP, LTD.
WARRANT AGREEMENT
Dated as of October 29, 1997
<PAGE>
WARRANT AGREEMENT (the "Agreement"), dated as of October 29, 1997 by and
between MEDIA LOGIC, INC., a Massachusetts corporation (the "Company"), and
ROCHON CAPITAL GROUP, LTD., a California corporation (the "Placement Agent").
The Company proposes to issue to the Placement Agent the warrants as
hereinafter described (the "Warrants") to purchase 200,000 shares of common
stock of the Company, $.01 par value per share ("Common Stock"), subject to
adjustment as provided in Section 8 hereof (such number of shares, as
adjusted, being hereinafter referred to as the "Shares"), each Warrant
entitling the holder ("Holder") thereof to purchase one share of Common
Stock. All capitalized terms used herein and not otherwise defined herein
shall have the same meanings as assigned thereto in that certain Placement
Agency Agreement, dated as of March 17, 1997, by and between the Company and
the Placement Agent.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
1. Issuance of Warrants; Form of Warrant. On November 20, 1997 (the
"Issue Date") the Company shall issue, sell and deliver the Warrants to the
Placement Agent or its bona fide officers or principals. The form of the
Warrant and of the form of Election to Purchase to be attached thereto shall
be substantially as set forth on Exhibit A attached hereto. The Warrants
shall be executed on behalf of the Company by the manual or facsimile
signature of the present or any future Chairman or Co-Chairman, President or
any Vice President of the Company, under its corporate seal, affixed or in
facsimile, and attested by the manual or facsimile signature of the present
or any future Secretary or Assistant Secretary of the Company.
2. Registration. The Warrants shall be numbered and shall be registered
in a Warrant register (the "Warrant Register"). The Company shall be entitled
to treat the registered holder of any Warrant on the Warrant Register as the
owner in fact thereof for all purposes and shall not be bound to recognize
any equitable or other claim to or interest in such Warrant on the part of
any other person, and shall not be liable for any registration or transfer of
Warrants which are registered or are to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with the actual knowledge
that a fiduciary or nominee is committing a breach of trust in requesting
such registration or transfer, or with such knowledge of such facts that its
participation therein amounts to bad faith. The Warrants shall be registered
initially in the name of the Placement Agent in such denominations as the
Placement Agent may request in writing to the Company; provided, however,
that the Placement Agent may designate that all or a portion of the Warrants
be issued in varying amounts directly to its bona fide officers or principals
and not to itself. Such designation will only be made by the Placement Agent
if it determines that such issuances would not violate the interpretation of
the Board of Governors of the National Association of Securities Dealers,
Inc. (the "NASD"), relating to the review of corporate financing arrangements.
3. Transfer of Warrants. The Holder of a Warrant Certificate, by its
acceptance thereof, acknowledges that the Warrants are "restricted
securities" which have not been
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registered under the Securities Act of 1933, as amended (the "Securities
Act"), and represents that the Warrants are being acquired as an investment
and not with a view to the distribution thereof and will not transfer such
Warrants, except to bona fide officers, directors, shareholders, principals,
employees or registered representatives of the Holder upon written request to
the Company delivered in accordance with Section 12 hereof and upon delivery
of the Warrant Certificate duly endorsed by the Holder or by his duly
authorized attorney or representative, or accompanied by proper evidence of
succession, assignment or authority to transfer. In all cases of transfer by
an attorney, the original power of attorney, duly approved, or an official
copy thereof, duly certified, shall be deposited with the Company. In case of
transfer by executors, administrators, guardians or other legal
representatives, duly authenticated evidence of their authority shall be
produced, and may be required to be deposited with the Company in its
discretion. Upon any registration of transfer, the Company shall deliver a
new Warrant or Warrants to the persons entitled thereto. The Warrants may be
exchanged at the option of the Holder thereof for other Warrants of different
denominations, of like tenor and representing in the aggregate the right to
purchase a like number of shares of Common Stock upon surrender to the
Company or its duly authorized agent. The Company may require payment of a
sum sufficient to cover all taxes and other governmental charges that may be
imposed in connection with any voluntary transfer, exchange or other
disposition of the Warrants. Notwithstanding the foregoing, the Company shall
have no obligation to cause Warrants to be transferred on its books to any
person, if such transfer would violate the Securities Act or applicable state
securities laws.
4. Exercise of Warrants.
(a) Term of Warrants; Exercise of Warrants. Each Warrant entitles the
registered owner thereof to purchase one Share at a purchase price equal to
$2.00 per Share (as adjusted from time to time pursuant to the provisions
hereof, the "Exercise Price"). The Exercise Price and the Shares issuable
upon exercise of Warrants are subject to adjustment upon the occurrence of
certain events, pursuant to the provisions of Section 8 of this Agreement.
Subject to the provisions of this Agreement, each Holder shall have the
right, which may be exercised as set forth in such Warrants, to purchase from
the Company (and the Company shall issue and sell to such Holder) the number
of fully paid and nonassessable shares (rounded up to the nearest full share)
specified in such Warrants, upon surrender to the Company, or its duly
authorized agent, of such Warrants, with the form of Election to Purchase
attached thereto duly completed and signed, with signatures guaranteed by a
member firm of a national securities exchange, a commercial bank (not a
savings bank or savings and loan association) or trust company located in the
United States or a member of the NASD and upon payment to the Company of the
Exercise Price, as adjusted in accordance with the provisions of Section 8 of
this Agreement, for the number of Shares in respect of which such Warrants
are then exercised. Payment of such Exercise Price may be made in cash or by
certified check or official bank check payable to the order of the Company.
No adjustment shall be made for any dividends on any Shares issuable upon
exercise of a Warrant. Upon each surrender of Warrants and
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payment of the Exercise Price as aforesaid, the Company shall issue and cause
to be delivered with all reasonable dispatch (and in no event more than five
business days from the date of each such surrender and payment) to or upon
the written order of the Holder of such Warrants and in such name or names as
such Holder may designate, a certificate or certificates for the number of
full Shares so purchased upon the exercise of such Warrants. Such certificate
or certificates shall be deemed to have been issued and any person so
designated to be named therein shall be deemed to have become a holder of
record of such Shares as of the date of the surrender of Warrants and payment
of the Exercise Price as aforesaid; provided, however, that if, at the date
of surrender of such Warrants and payment of such Exercise Price, the
transfer books for the Common Stock or other class of securities issuable
upon the exercise of such Warrants shall be closed, the certificates for the
Shares shall be issuable as of the date on which such books shall next be
opened and until such date the Company shall be under no duty to deliver any
certificate for such Shares; provided, further, however, that the transfer
books of record, unless otherwise required by law, shall not be closed at any
one time for a period longer than twenty (20) days. The rights of purchase
represented by the Warrants shall be exercisable, at the election of the
Holder(s) thereof, either in full or from time to time in part and, in the
event that any Warrant is exercised in respect of less than all of the Shares
issuable upon such exercise, a new Warrant or Warrants will be issued for the
remaining number of Shares specified in the Warrant so surrendered.
(b) Exercise by Surrender of Warrant. In addition to the method of
payment set forth in subsection (a) above and in lieu of any cash payment
required thereunder, the Holder of the Warrants shall have the right at any
time and from time to time to exercise the Warrants in full or in part by
surrendering the Warrant in the manner specified in the Warrant in exchange
for the number of Shares equal to the product of (x) the number of shares as
to which the Warrants are being exercised multiplied by (y) a fraction, the
numerator of which is the Market Price (as defined below) of the Shares less
the Exercise Price and the denominator of which is such Market Price. Solely
for the purposes of this paragraph, Market Price shall be the highest closing
price of the Common Stock as determined over the five (5) trading-day period
preceding the date on which the Election to Purchase is sent to the Company.
Upon each surrender of Warrants, the Company shall issue and cause to be
delivered with all reasonable dispatch (and in no event more than three
business days from the date of each such surrender) to or upon the written
order of the Holder of such Warrants and in such name or names as such Holder
may designate, a certificate or certificates for the number of full Shares
due such Holder as calculated pursuant to the foregoing formula. The rights
of purchase represented by the Warrants shall be exercisable, at the election
of the Holder(s) thereof, either in full or from time to time in part
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and, in the event that any Warrant is exercised in respect of less than all
of the Shares issuable upon such exercise, a new Warrant or Warrants will be
issued for the remaining number of Shares specified in the Warrant so
surrendered.
5. Payment of Taxes. The Company will pay all documentary stamp taxes, if
any, attributable to the issuance of Shares upon the exercise of Warrants;
provided, however, that the Company shall not be required to pay any tax or
taxes which may be payable in respect of any transfer involved in the issue
or delivery of any certificates for Shares in a name other than that of the
Holder of Warrants in respect of which such Shares are issued.
6. Mutilated or Missing Warrants. In case any of the Warrants shall be
mutilated, lost, stolen or destroyed, the Company shall issue and deliver in
exchange and substitution for and upon cancellation of the mutilated Warrant,
or in lieu of and substitution for the Warrant lost, stolen or destroyed, a
new Warrant of like tenor and representing an equivalent right or interest,
but only upon receipt of evidence reasonably satisfactory to the Company of
such mutilation, loss, theft or destruction of such Warrant and indemnity, if
requested, reasonably satisfactory to the Company. An applicant for such
substitute Warrants shall also comply with such other reasonable regulations
and pay such other reasonable charges and expenses as the Company may
prescribe.
7. Reservation of Shares, etc. There have been reserved, and the Company
shall at all times keep reserved, out of the authorized and unissued Common
Stock of the Company, a number of shares of Common Stock sufficient to
provide for the exercise of the rights of purchase represented by the
outstanding Warrants. American Stock Transfer & Trust Co., transfer agent for
the Common Stock (the "Transfer Agent"), and every subsequent transfer agent,
if any, for the Company's securities issuable upon the exercise of the
Warrants will be irrevocably authorized and directed at all times to reserve
such number of authorized and unissued shares as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's securities issuable upon the exercise of the Warrants. The Company
will supply the Transfer Agent or any subsequent transfer agent with duly
executed certificates for such purpose. All Warrants surrendered in the
exercise of the rights thereby evidenced shall be canceled, and such canceled
Warrants shall constitute sufficient evidence of the number of Shares that
have been issued upon the exercise of such Warrants.
8. Adjustments of Exercise Price and Number of Shares. The Exercise Price
and the number and kind of securities issuable upon exercise of each Warrant
shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
(a) In case the Company shall (i) declare a dividend on its Common Stock
in shares of Common Stock or make a distribution in shares of Common Stock,
(ii) subdivide its outstanding shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock or (iv) issue
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by reclassification of its shares of Common Stock other securities of the
Company (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation),
the number of Shares purchasable upon exercise of each Warrant immediately
prior thereto shall be adjusted so that the Holder of each Warrant shall be
entitled to receive the kind and number of Shares or other securities of the
Company which he would have owned or have been entitled to receive after the
happening of any of the events described above, had such Warrant been
exercised immediately prior to the happening of such event or any record date
with respect thereto. An adjustment made pursuant to this paragraph (a) shall
become effective immediately after the effective date of such event
retroactive to immediately after the record date, if any, for such event.
(b) In case the Company shall issue rights, options or warrants to all
holders of its shares of Common Stock, without any charge to such holders,
entitling them (for a period expiring within 45 days after the record date
mentioned below in this paragraph (b)) to subscribe for or to purchase shares
of Common Stock at a price per share that is lower at the record date
mentioned below than the then current market price per share of Common Stock
(as defined in paragraph (d) below), the number of Shares thereafter
purchasable upon exercise of each Warrant shall be determined by multiplying
the number of Shares theretofore purchasable upon exercise of each Warrant by
a fraction, of which the numerator shall be the number of shares of Common
Stock outstanding on such record date plus the number of additional shares of
Common Stock offered for subscription or purchase, and of which the
denominator shall be the number of shares of Common Stock outstanding on such
record date plus the number of shares which the aggregate offering price of
the total number of shares of Common Stock so offered would purchase at the
then current market price per share of Common Stock. Such adjustment shall be
made whenever such rights, options or warrants are issued, and shall become
effective retroactively to immediately after the record date for the
determination of shareholders entitled to receive such rights, options or
warrants.
(c) In case the Company shall distribute to all holders of its shares of
Common Stock shares of stock other than Common Stock or evidences of its
indebtedness or assets (excluding cash dividends payable out of consolidated
earnings or retained earnings and dividends or distributions referred to in
paragraph (a) above) or rights, options or warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase
shares of Common Stock (excluding those referred to in paragraph (b) above),
then in each case the number of Shares thereafter issuable upon the exercise
of each Warrant shall be determined by multiplying the number of Shares
theretofore issuable upon the exercise of each Warrant, by a fraction, of
which the numerator shall be the current market price per share of Common
Stock (as defined in paragraph (d) below) on the record date mentioned below
in this paragraph (c), and of which the denominator shall be the current
market price per share of Common Stock on such record date, less the then
fair value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be conclusive) of the portion of the
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shares of stock other than Common Stock or assets or evidences of
indebtedness so distributed or of such subscription rights, options or
warrants, or of such convertible or exchangeable securities applicable to one
share of Common Stock. Such adjustment shall be made whenever any such
distribution is made, and shall become effective on the date of distribution
retroactive to immediately after the record date for the determination of
shareholders entitled to receive such distribution.
(d) For the purpose of any computation under paragraphs (b) and (c) of
this Section 8, the current market price per share of Common Stock at any
date (the "Current Market Price") shall be the average of the daily closing
bid prices for the five (5) consecutive trading days before the date of such
computation. The closing price for each day shall be the last reported sale
price or, in case no such reported sale takes place on such day, the average
of the closing bid and asked prices for such day, in either case on the
principal national securities exchange on which the shares are listed or
admitted to trading, or if they are not listed or admitted to trading on any
national securities exchange, but are traded in the over-the-counter market,
the closing sale price of the Common Stock or, in case no sale is publicly
reported, the average of the representative closing bid and asked quotations
for the Common Stock on the Nasdaq system or any comparable system, or if the
Common Stock is not listed on the Nasdaq system or a comparable system, the
closing sale price of the Common Stock or, in case no sale is publicly
reported, the average of the closing bid and asked prices as furnished by two
members of the NASD selected from time to time by the Company for that
purpose.
(e) No adjustment in the number of Shares purchasable hereunder shall be
required unless such adjustment would require an increase or decrease of at
least one percent (1%) in the number of Shares purchasable upon the exercise
of each Warrant; provided, however, that any adjustments which by reason of
this paragraph (e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment but not later than three
years after the happening of the specified event or events. All calculations
shall be made to the nearest one thousandth of a share.
(f) Whenever the number of Shares purchasable upon the exercise of each
Warrant is adjusted, as herein provided, the Exercise Price shall be adjusted
by multiplying the Exercise Price in effect immediately prior to such
adjustment by a fraction, of which the numerator shall be the number of
Shares purchasable upon the exercise of each Warrant immediately prior to
such adjustment, and of which the denominator shall be the number of Shares
so purchasable immediately thereafter.
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(g) For the purpose of this Section 8, the term "shares of Common Stock"
shall mean (i) the class of stock designated as the Common Stock of the
Company at the date of this Agreement or (ii) any other class of stock
resulting from successive changes or reclassifications of such shares
consisting solely of changes in par value, or from no par value to par value,
or from par value to no par value. In the event that at any time, as a result
of an adjustment made pursuant to paragraph (a) above, the Holders shall
become entitled to purchase any shares of capital stock of the Company other
than shares of Common Stock, thereafter the number of such other shares so
purchasable upon exercise of each Warrant and the Exercise Price of such
shares 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 Shares contained in paragraphs (a) through (f) inclusive, and paragraphs
(h) through (m), inclusive, of this Section 8, and the provisions of Sections
4, 5, 7 and 10, with respect to the Shares, shall apply on like terms to any
such other shares.
(h) Upon the expiration of any rights, options, warrants or conversion
rights or exchange privileges, if any thereof shall not have been exercised,
the Exercise Price and the number of shares of Common Stock purchasable upon
the exercise of each Warrant shall, upon such expiration, be readjusted and
shall thereafter be such as it would have been had it originally been
adjusted (or had the original adjustment not been required, as the case may
be) as if (i) the only shares of Common Stock so issued were the shares of
Common Stock, if any, actually issued or sold upon the exercise of such
rights, options, warrants or conversion rights or exchange privileges and
(ii) such shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such exercise plus the
aggregate consideration, if any, actually received by the Company for the
issuance, sale or grant of all of such rights, options, warrants or
conversion rights or exchange privileges whether or not exercised; provided,
however, that no such readjustment shall have the effect of decreasing the
number of shares issuable upon the exercise of each Warrant or increasing the
Exercise Price by an amount in excess of the amount of the adjustment
initially made in respect of the issuance, sale or grant of such rights,
options, warrants or conversion rights or exchange privileges.
(i) The Company may, at its option at any time during the term of the
Warrants, reduce the then current Exercise Price to any amount deemed
appropriate by the Board of Directors of the Company.
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(j) Whenever the number of Shares issuable upon the exercise of each
Warrant or the Exercise Price of such Shares is adjusted, as herein provided,
the Company shall promptly mail by first class mail, postage prepaid, to each
Holder, notice of such adjustment or adjustments. The Company shall retain a
firm of independent public accountants (who may be the regular accountants
employed by the Company) to make any computation required by this Section 8
and shall cause such accountants to prepare a certificate setting forth the
number of Shares issuable upon the exercise of each Warrant and the Exercise
Price of such Shares after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made. Such certificate shall be conclusive as to
the correctness of such adjustment and each Holder shall have the right to
inspect such certificate during reasonable business hours.
(k) Except as provided in this Section 8, no adjustment in respect of any
dividends shall be made during the term of a Warrant or upon the exercise of
a Warrant.
(l) In case of any consolidation of the Company with or merger of the
Company with or into another corporation or in case of any sale or conveyance
to another corporation of the property of the Company as an entirety or
substantially as an entirety, the Company or such successor or purchasing
corporation (or an affiliate of such successor or purchasing corporation), as
the case may be, agrees that each Holder shall have the right thereafter upon
payment of the Exercise Price in effect immediately prior to such action to
purchase upon exercise of each Warrant the kind and amount of shares and
other securities and property (including cash) which he would have owned or
have been entitled to receive after the happening of such consolidation,
merger, sale or conveyance had such Warrant been exercised immediately prior
to such action except as may be necessary to account for such a transaction
as a "pooling of interests," in which case the Warrant may be exchanged for
or converted into a warrant to purchase common stock of the surviving
corporation on economically equivalent terms. The provisions of this
paragraph (l) shall similarly apply to successive consolidations, mergers,
sales or conveyances.
(m) Notwithstanding any adjustment in the Exercise Price or the number or
kind of shares purchasable upon the exercise of the Warrants pursuant to this
Agreement, certificates for Warrants issued prior or subsequent to such
adjustment may continue to express the same price and number and kind of
Shares as are initially issuable pursuant to this Agreement.
9. Reserved.
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10. Registration Rights.
(a) Demand Registration Rights. The Company covenants and agrees with the
Placement Agent and any other or subsequent Holders of the Registrable
Securities (as defined in paragraph (f) of this Section 10) that, subject to
the availability of audited financial statements which would comply with
Regulation S-X under the Securities Act, upon written request of the then
Holder(s) of at least a majority of the Warrants or the Registrable
Securities, or both, which were originally issued to the Placement Agent or
its designees, made at any time within the period commencing on the Issue
Date and ending five years after the Issue Date, the Company will file as
promptly as practicable and, in any event, within 60 days after receipt of
such written request, at its expense (other than the fees of counsel and
sales commissions for such Holders), no more than once, a post-effective
amendment (the "Amendment") to a registration statement, or a new
registration statement which shall be on Form S-3 if the Company is then
eligible to use Form S-3, or a Regulation A Offering Statement (an "Offering
Statement") under the Securities Act, registering or qualifying the
Registrable Securities for sale. Within fifteen (15) days after receiving any
such notice, the Company shall give notice to the other Holders of the
Registrable Securities advising that the Company is proceeding with such
Amendment, registration statement or Offering Statement and offering to
include therein the Registrable Securities of such Holders. The Company shall
not be obligated to any such other Holder unless such other Holder shall
accept such offer by notice in writing to the Company within ten (10) days
thereafter. The Company will use its best efforts, through its officers,
directors, auditors and counsel in all matters necessary or advisable, to
file and cause to become effective such Amendment, registration statement or
Offering Statement as promptly as practicable and for a period of nine months
thereafter to reflect in the Amendment, registration statement or Offering
Statement financial statements which are prepared in accordance with Section
1 0(a)(3) of the Securities Act and any facts or events arising that,
individually, or in the aggregate, represent a fundamental and/or material
change in the information set forth in the Amendment, registration statement
or Offering Statement to enable any Holders of the Warrants to either sell
such Warrants or to exercise such Warrants and sell Shares, or to enable any
holders of Shares to sell such Shares, during said nine-month period. If any
registration pursuant to this paragraph (a) is an underwritten offering, the
Holders of a majority of the Registrable Securities to be included in such
registration shall be entitled to select the underwriter or managing
underwriter (in the case of a syndicated offering) of such offering, subject
to the Company's approval which shall not be unreasonably withheld.
(b) Piggyback Registration Rights. The Company covenants and agrees with
the Placement Agent and any other Holders or subsequent Holders of the
Registrable Securities that if, at any time within the period commencing on
the Issue Date and ending five years after the Issue Date, it proposes to
file a registration statement or Offering Statement with respect to any class
of equity or equity-related security under the
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Securities Act in a primary registration on behalf of the Company and/or
in a secondary registration on behalf of holders of such securities and the
registration form or Offering Statement to be used may be used for
registration of the Registrable Securities, the Company will give prompt
written notice (which, in the case of a registration statement or
notification pursuant to the exercise of demand registration rights other
than those provided in Section 10(a) of this Agreement, shall be within ten
(10) business days after the Company's receipt of notice of such exercise
and, in any event, shall be at least 30 days prior to such filing) to the
Holders of Registrable Securities (regardless of whether some of the Holders
shall have theretofore availed themselves of the right provided in Section
10(a) of this Agreement) at the addresses appearing on the records of the
Company of its intention to file a registration statement or Offering
Statement and will offer to include in such registration statement or
Offering Statement all but not less than 20% of the Registrable Securities
and limited, in the case of a Regulation A offering, to the amount of the
available exemption, subject to paragraphs (i) and (ii) of this paragraph
(b), such number of Registrable Securities with respect to which the Company
has received written requests for inclusion therein within ten (10) days
after the giving of notice by the Company. All registrations requested
pursuant to this paragraph (b) are referred to herein as "Piggyback
Registrations". All Piggyback Registrations pursuant to this paragraph (b)
will be made solely at the Company's expense. This paragraph is not
applicable to a registration statement filed by the Company with the
Commission on Form S-4 or S-8 or any successor forms.
(i) Priority on Primary Registrations. If a Piggyback Registration
includes an underwritten primary registration on behalf of such Company
and the underwriter(s) for such offering determines in good faith and
advises the Company in writing that in its/their opinion the number of
Registrable Securities requested to be included in such registration
exceeds the number that can be sold in such offering without materially
adversely affecting the distribution of such securities by the Company,
the Company will include in such registration (A) first, the securities
that the Company proposes to sell and (B) second, the Registrable
Securities requested to be included in such registration, apportioned pro
rata among the Holders of Registrable Securities, provided, however, the
Company will use its best efforts to include not less than 20% of the
Registrable Securities, and (C) third, securities of the holders of other
securities requesting registration.
(ii) Priority on Secondary Registrations. If a Piggyback
Registration consists only of an underwritten secondary registration on
behalf of holders of securities of the Company (other than pursuant to
Section 10(a)), and the underwriter(s) for such offering advises the
Company in writing that in its/their opinion the number of Registrable
Securities requested to be included in such registration exceeds the
number which can be sold in such offering without materially adversely
affecting the distribution of such securities by the Company, the Company
will include in such registration (A) first, the securities requested to
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be included therein by the holders requesting such registration and the
Registrable Securities requested to be included in such registration, pro
rata among all such holders on the basis of the number of shares
requested to be included by each such holder, provided, however, the
Company will use its best efforts to include not less than 20% of the
Registrable Securities, and (B) second, other securities requested to be
included in such registration.
Notwithstanding the foregoing, if any such underwriter shall
determine in good faith and advise the Company in writing that the
distribution of the Registrable Securities requested to be included in
the registration concurrently with the securities being registered by the
Company would materially adversely affect the distribution of such
securities by the Company, then the Holders of such Registrable
Securities shall delay their offering and sale for such period ending on
the earliest of (1) 90 days following the effective date of the Company's
registration statement, (2) the day upon which the underwriting
syndicate, if any, for such offering shall have been disbanded or, (3)
such date as the Company, managing underwriter and Holders of Registrable
Securities shall otherwise agree. In the event of such delay, the Company
shall file such supplements, post-effective amendments and take any such
other steps as may be necessary to permit such Holders to make their
proposed offering and sale for a period of 120 days immediately following
the end of such period of delay. If any party disapproves of the terms of
any such underwriting, it may elect to withdraw therefrom by written
notice to the Company, the underwriter, and the Placement Agent.
Notwithstanding the foregoing, the Company shall not be required to file
a registration statement to include Shares pursuant to Sections 10(a) or
10(b) if independent counsel, reasonably satisfactory to counsel for the
Company and counsel for the Placement Agent, renders an opinion to the
Company that the Shares proposed to be disposed of may be transferred
pursuant to the provisions of Rule 144 under the Securities Act or
otherwise without registration under the Securities Act.
(c) Other Registration Rights. In addition to the rights above provided,
the Company will cooperate with the then Holders of the Registrable
Securities in preparing and signing any registration statement or Offering
Statement, in addition to the registration statements and Offering Statements
discussed above, required in order to sell or transfer the Registrable
Securities and will supply all information required therefor, but such
additional registration statement or Offering Statement, shall be at the then
Holders' cost and expense; provided, however, that if the Company elects to
register or qualify additional shares of Common Stock, the cost and expense
of such registration statement or Offering Statement will be pro rated
between the Company and the Holders of the Registrable Securities according
to the aggregate sales price of the securities being issued. Notwithstanding
the foregoing, the Company will not be required to file a registration
statement or Offering Statement pursuant to this paragraph (c), (i) at a time
when the audited financial statements required to be included therein are not
available,
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which time shall be limited to the period commencing 45 days after the end of
the Company's last fiscal year and ending 90 days after the end of such
fiscal year, (ii) within 90 days after completion of a public offering by the
Company of any of its Common Stock or equity-related securities or (iii) if
it would adversely impact the Company in its capital raising plans or
otherwise (in either of which case filing may be delayed no longer than 90
days).
(d) Action to be Taken by the Company. In connection with the
registration of Registrable Securities in accordance with paragraphs (a), (b)
or (c) of this Section 10, the Company agrees to:
(i) Bear the expenses of any registration or qualification under
paragraphs (a) or (b) of this Section 10, including, but not limited to,
legal, accounting and printing fees; provided, however, that in no event
shall the Company be obligated to pay (A) any fees and disbursements of
special counsel for Holders of Registrable Securities, or (B) any
underwriters' discount or commission in respect of such Registrable
Securities, (C) any stock transfer taxes attributable to the sale of the
Registrable Securities, or (D) upon the exercise of any demand
registration right provided for in paragraph (a) of this Section 10, the
cost of any liability or similar insurance required by an underwriter, to
the extent that such costs are attributable solely to the offering of
such Registrable Securities, payment of which shall, in each case, be the
sole responsibility of the Holders of the Registrable Securities.
(ii) Use its best efforts to register or qualify the Registrable
Securities for offer or sale under state securities or Blue Sky laws of
such jurisdictions in which the Placement Agent or such Holders shall
reasonably request, provided, however, that no qualification shall be
required in any jurisdiction where, as a result thereof, the Company
would be subject to service of general process or to taxation as a
foreign corporation doing business in such jurisdiction to which it is
not then subject, and to do any and all other acts and things which may
be necessary or advisable to enable the holders to consummate the
proposed sale, transfer or other disposition of such securities in any
jurisdiction; and
(iii) Enter into a cross-indemnity agreement, in customary form,
with each underwriter, if any, and each holder of securities included in
such Amendment, registration statement or Offering Statement.
(e) Action to be Taken by the Holders. In connection with the
registration of Registrable Securities in accordance with paragraphs (a), (b)
or (c) of this Section 10, the Company's obligation shall be conditioned as
to each such public offering upon a timely receipt by the Company in writing
of:
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(i) Information as to the terms of such public offering furnished by
or on behalf of each Holder intending to make a public offering of his,
her or its Registrable Securities; and
(ii) Such other information as the Company may reasonably require
from such Holders, or any underwriter for any of them, for inclusion in
such registration statement or Notification on Form 1-A.
(f) For purposes of this Section 10, (i) the term "Holder" shall include
holders of Shares, and (ii) the term "Registrable Securities" shall mean the
Shares, if issued.
(g) The Company hereby agrees to file a registration statement
registering for resale all of the Shares as soon as practicable after the
Issue Date, and further agrees that such registration will occur without
further notice on the part of the Company and without further action on the
part of the original Holder of the Warrants.
11. Notices to Holders.
(a) Nothing contained in this Agreement or in any of the Warrants shall
be construed as conferring upon the Holders thereof the right to vote or to
receive dividends or to consent or to receive notice as shareholders in
respect of the meetings of shareholders or the election of directors of the
Company or any other matter, or any rights whatsoever as shareholders of the
Company; provided, however, that in the event that a meeting of shareholders
shall be called to consider and take action on a proposal for the voluntary
dissolution of the Company, other than in connection with a consolidation,
merger or sale of all, or substantially all, of its property, assets,
business and good will as an entirety, then and in that event the Company
shall cause a notice thereof to be sent by first-class mail, postage prepaid,
at least twenty (20) days prior to the date fixed as a record date or the
date of closing the transfer books in relation to such meeting, to each
registered Holder of Warrants at such Holder's address appearing on the
Warrant Register; but failure to mail or to receive such notice or any defect
therein or in the mailing thereof shall not affect the validity of any action
taken in connection with such voluntary dissolution.
(b) In the event the Company intends to make any distribution on its
Common Stock (or other securities which may be issuable in lieu thereof upon
the exercise of Warrants), including, without limitation, any such
distribution to be made in connection with a consolidation or merger in which
the Company is the continuing corporation, or to issue subscription rights or
warrants to holders of its Common Stock, the Company shall cause a notice of
its intention to make such distribution to be sent by first-class mail,
postage prepaid, at least twenty (20) days prior to the date fixed as a
record date or the date of closing the transfer books in relation to such
distribution, to each registered Holder of Warrants at such Holder's address
appearing on the Warrant
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Register, but failure to mail or to receive such notice or any defect therein
or in the mailing thereof shall not affect the validity of any action taken
in connection with such distribution.
12. Notices. Any notice pursuant to this Agreement to be given or made by
the Holder of any Warrant and/or the holder of any Share to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed as follows or to such other address as the Company may
designate by notice given in accordance with this Section 12, to the Holders
of Warrants and/or the holders of Shares:
MEDIA LOGIC, INC.
310 South Street
Plainville, MA 02762
Attention: Chief Financial Officer
Notices or demands authorized by this Agreement to be given or made by
the Company to or on the Holder of any Warrant and/or the holder of any Share
shall be sufficiently given or made (except as otherwise provided in this
Agreement) if sent by first-class mail, postage prepaid, addressed to such
Holder or such holder of Shares at the address of such Holder or such holder
of Shares as shown on the Warrant Register or the books of the Company, as
the case may be.
13. Governing Law. This Agreement and each Warrant issued hereunder shall
be governed by and construed in accordance with the substantive laws of the
State of New York. The Company hereby agrees to accept service of process by
notice given to it pursuant to the provisions of Section 12.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original;
but such counterparts together shall constitute but one and the same
instrument.
[Signatures appear on the following page]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day, month and year first above written.
MEDIA LOGIC, INC.
By: /s/ William E. Davis, Jr.
-------------------------------
Name: William E. Davis, Jr.
Title: Chief Executive Officer
ROCHON CAPITAL GROUP, LTD.
By: /s/ Phillip L. Neiman
-------------------------------
Name: Phillip L. Neiman
Title: President
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EXHIBIT A
No. 1
200,000 Warrants
MEDIA LOGIC, INC.
Warrant Certificate
THIS CERTIFIES THAT for value received Rochon Capital Group, Ltd., or
registered assigns, is the owner of the number of Warrants set forth above,
each of which entitles the owner thereof to purchase one fully paid and
nonassessable share of common stock, $.01 par value (the "Common Stock"), of
MEDIA LOGIC, INC., a Massachusetts corporation (the "Company"), at the
purchase price equal to the Exercise Price, as defined in the Warrant
Agreement, dated as of October 29, 1997 (the "Warrant Agreement"), between
the Company and Rochon Capital Group, Ltd., upon presentation and surrender
of this Warrant Certificate with the Form of Election to Purchase duly
executed. The number of Warrants evidenced by this Warrant Certificate (and
the number of shares which may be purchased upon exercise thereof, rounded up
to the nearest full share) set forth above, and the Exercise Price per share
set forth above, are the number and Exercise Price as of the date of original
issuance of the Warrants, based on the shares of Common Stock of the Company
as constituted at such date. As provided in the Warrant Agreement, the
Exercise Price and the number or kind of shares which may be purchased upon
the exercise of the Warrants evidenced by this Warrant Certificate are, upon
the happening of certain events, subject to modification and adjustment.
This Warrant Certificate is subject to, and entitled to the benefits of,
all of the terms, provisions and conditions of the Warrant Agreement, which
Warrant Agreement is hereby incorporated herein by reference and made a part
hereof and to which Warrant Agreement reference is hereby made for a full
description of the rights, limitations of rights, duties and immunities
hereunder of the Company and the holders of the Warrant Certificates. Copies
of the Warrant Agreement are on file at the principal office of the Company.
This Warrant Certificate, with or without other Warrant Certificates,
upon surrender at the principal office of the Company, may be exchanged for
another Warrant Certificate or Warrant Certificates of like tenor and date
evidencing Warrants entitling the holder to purchase a like aggregate number
of shares of Common Stock as the Warrants evidenced by the Warrant
Certificate or Warrant Certificates surrendered entitled such holder to
purchase. If this Warrant Certificate shall be exercised in part, the holder
hereof shall be entitled to receive upon surrender hereof another Warrant
Certificate or Warrant Certificates for the number of whole Warrants not
exercised.
No holder of this Warrant Certificate shall be entitled to vote, receive
dividends, subscription rights or be deemed the holder of Common Stock or any
other securities of the Company which may at any time be issuable on the
exercise hereof for any purpose, nor shall
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anything contained in the Warrant Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization, issue of
stock, reclassification of stock, change of par value or change of stock to
no par value, consolidation, merger, conveyance, or otherwise) or, except as
provided in the Warrant Agreement, to receive notice of meetings, until the
Warrant or Warrants evidenced by this Warrant Certificate shall have been
exercised and the Shares shall have become deliverable as provided in the
Warrant Agreement.
If this Warrant shall be surrendered for exercise within any period
during which the transfer books for the Company's Common Stock or other class
of stock purchasable upon the exercise of this Warrant are closed for any
purpose, the Company shall not be required to make delivery of certificates
for shares purchasable upon such exercise until the date of the reopening of
said transfer books, provided, however, that such books shall not be closed
for longer than a 20-day period.
IN WITNESS WHEREOF, THE COMPANY has caused the signature (or facsimile
signature) of its President and its Secretary or Assistant Secretary to be
printed hereon and its corporate seal (or facsimile) to be printed hereon.
Dated: October 29, 1997
MEDIA LOGIC, INC.
By:
-------------------------------
Name: William E. Davis, Jr.
Title: Chief Executive Officer
Attest:
By:
---------------------
Name:
Title:
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FORM OF
ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
the Warrant Certificates.)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto this
Warrant Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint , to transfer the within
Warrant Certificate on the books of the within-named Company, with full power
of substitution.
Dated: ,
------------------
_______________________________
Signature
Signature Guaranteed:
NOTICE
The signature of the foregoing Assignment must correspond to the name as
written upon the face of this Warrant Certificate in every particular,
without alteration or enlargement or any change whatsoever.
3
