<PAGE>
As filed with the Securities and Exchange Commission on March 9, 1998
Registration No. 333-45073
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)
Gregory Scorziello
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. [ ]
----------------------------
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.
<PAGE>
Subject to Completion Dated March 9, 1998
PROSPECTUS
MEDIA LOGIC, INC.
4,700,000 Shares of Common Stock
(Par Value $.01 Per Share)
----------------------------
The 4,700,000 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 and the fees of legal counsel for
Imprimis SB L.P. ("Imprimis") and Wexford Spectrum Investors LLC ("Wexford")
in connection with the registration of the shares offered by them herein,
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
other than Imprimis and Wexford 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 March 5, 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 _________________, 1998.
<PAGE>
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.
<PAGE>
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.................................................. 10
LEGALITY OF COMMON STOCK.............................................. 10
EXPERTS............................................................... 10
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE..................... 10
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,
September 30, 1997 and December 31, 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.
4
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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 nine months ended December 31, 1997,
the Company incurred a loss of $3,048,747 on revenues of $1,218,375. 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, Gregory Scorziello, 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 8,340,077 shares of
Common Stock are currently freely tradable on the open market. In addition,
there were a total of 596,992 options to purchase Common Stock outstanding
as of March 5, 1998 pursuant to the Company's stock option plans, and
415,024 of such options were vested and can be exercised at any time prior to
their respective expiration dates. Lee H. Elizer, the
5
<PAGE>
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 was convertible at any time into shares of the Company's Common
Stock based on a predetermined formula. As of January 28, 1998, all of the
holders of the March Debentures had converted their Debentures into an
aggregate of 3,039,567 shares of Common Stock, all of which shares may be
sold pursuant to the Prospectus contained in the June 1997 Registration
Statement as amended by the Prospectus Supplements thereto dated December 31,
1997 and February 20, 1998.
In January 1998, the Company registered for resale, on a
registration statement on Form S-3 (the "January 1998 Registration
Statement"), 3,642,538 shares of Common Stock. Up to 891,668 of the shares of
Common Stock included in the January 1998 Registration Statement 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. The principal amount of the
October Debentures is convertible at any time into shares of the Company's
Common Stock based on a predetermined formula. The price at which the
October Debentures will convert 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) 80% of
the average closing bid 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 "October Conversion Date Price"), subject to a $.90
minimum conversion 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 891,668
shares included in the January 1998 Registration Statement 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. As of March 5, 1998, $180,000 aggregate principal
amount of October Debentures and the accrued interest thereon have been
converted into 203,438 shares of Common Stock. If the October Debentures
become convertible into more than 891,668 shares, the Company will be
obligated to register additional shares of Common Stock.
6
<PAGE>
650,870 of the shares of Common Stock included in the January
1998 Registration Statement 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 of Common Stock included in the
January 1998 Registration Statement 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 of Common Stock included in the
January 1998 Registration Statement 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.
1,000,000 of the shares of Common Stock included in the
January 1998 Registration Statement were issued to Raymond W. Leclerc in a
private placement in September 1995.
All of the shares registered for resale by the holders thereof
which are included in the June 1997 Registration Statement and the
January 1998 Registration Statement 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.
1,700,000 of the Shares offered hereby were issued to Imprimis
and Wexford in the December Private Placement and 2,000,000 of the Shares
offered hereby are issuable upon exercise of warrants (the "Wexford
Warrants") to purchase Common Stock which were issued to Imprimis and Wexford
in connection with the December Private Placement. 1,000,000 of the Wexford
Warrants are exercisable at an exercise price of $3.00 per share and
1,000,000 of the Wexford 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.
500,000 of the Shares offered hereby are issuable upon
exercise of warrants (the "Adar October Warrants") to purchase Common Stock
issued 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. 250,000 of the Shares offered hereby are issuable upon exercise of
warrants (the "Adar December Warrants") to purchase Common Stock issued to
Adar in connection with the December Private Placement. The Adar December
Warrants are exercisable 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.
250,000 of the Shares offered hereby are issuable upon
exercise of warrants (the "Boston Group Warrants") to purchase Common Stock
issued to Boston Group, L.P. in connection with the December Private
Placement. The Boston Group Warrants are exercisable 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 issuable upon
exercise of the Wexford Warrants, the Adar October Warrants, the Adar
December Warrants and the Boston Group 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 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
1,700,000 of the Shares offered hereby were issued to Imprimis
and Wexford in the December Private Placement pursuant to a Securities
Purchase Agreement between the Company and each of Imprimis and Wexford (the
Securities Purchase Agreements have been filed as Exhibits 99.1 and 99.2,
respectively, to the registration statement of which this Prospectus is a
part).
2,000,000 of the Shares offered hereby are issuable upon
exercise of the Wexford Warrants, which Warrants are filed as Exhibits 99.3,
99.4, 99.5 and 99.6 to the registration statement of which this Prospectus is
a part. 500,000 of the Shares offered hereby are issuable upon exercise of
the Adar October Warrants which were issued pursuant to a Warrant Agreement
between the Company and Adar, which Warrant Agreement is filed as Exhibit
99.7 to the registration statement of which this Prospectus is a part.
250,000 of the Shares offered hereby are issuable upon exercise of the Adar
December Warrants which were issued pursuant to a Warrant Agreement between
the Company and Adar, which Warrant Agreement is filed as Exhibit 99.8 to the
registration statement of which this Prospectus is a part. 250,000 of the
Shares offered hereby are issuable upon exercise of the Boston Group Warrants
which were issued pursuant to a Warrant Agreement between Boston Group, L.P.
and the Company, which Warrant Agreement is filed as Exhibit 99.9 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 March 5, 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 STOCKHOLDERS NUMBER PERCENT OFFERED NUMBER PERCENT
- -------------------- ---------- ------- ------------ ------ -------
<S> <C> <C> <C> <C> <C>
Imprimis SB L.P.(3)....................... 2,466,668 19.9% 2,466,668 0 --%
Adar Equities LLC(4)...................... 1,650,000 13.0 750,000 0 --
Wexford Spectrum Investors LLC(5)......... 1,233,332 10.5 1,233,332 0 --
Boston Group, L.P. (6).................... 250,000 2.2 250,000 0 --
</TABLE>
- ------------------------
(1) The number of shares of Common Stock issued and outstanding on March 5,
1998 was 11,081,076. The calculation of percentage ownership for each listed
Selling Stockholder is based upon the number of shares of Common Stock
issued and outstanding at March 5, 1998, plus the shares of Common Stock
issuable upon exercise of currently exercisable warrants held by such
Selling Stockholder.
(2) Assuming all shares offered hereby are sold to unaffiliated third parties.
(3) Includes 1,333,334 shares issuable upon exercise of the Wexford Warrants.
(4) Includes 900,000 shares issuable upon exercise of the Adar Warrants, 500,000
shares issuable upon exercise of the Adar October Warrants and 250,000
shares issuable upon exercise of the Adar December Warrants. The 900,000
shares issuable upon exercise of the Adar Warrants are being offered
pursuant to the Prospectus contained in the January 1998 Registration
Statement (the "January 1998 Prospectus") and Adar's ownership after
completion of the offering contemplated hereby assumes that such shares have
been sold pursuant to the January 1998 Prospectus.
(5) Includes 666,666 shares issuable upon exercise of the Wexford Warrants.
(6) Represents shares issuable upon exercise of the Boston Group Warrants.
9
<PAGE>
PLAN OF DISTRIBUTION
The 4,700,000 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 earliest of (i) the fifth anniversary of the effectiveness of the
Registration Statement of which this Prospectus is a part, (ii) such time as
the shares of Common Stock offered hereby by Wexford and Imprimis may be sold
pursuant to Section (k) of Rule 144 of the 1933 Act and (iii) the date that
Wexford and Imprimis no longer own any of the Shares being offered hereby by
them, subject to a minimum period of nine months from the effectiveness of
the Registration Statement of which this Prospectus is a part.
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 in connection with any such sales.
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, September 30, 1997 and December 31,
1997, filed pursuant to Section 13 or 15(d) of the 1934 Act (File No. 1-9605).
(c) The Company's Current Reports on Form 8-K filed with the
Commission on December 31, 1997 and March 2, 1998.
(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.
10
<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 $ 2,576.00
AMEX Fees 17,500.00
Legal Fees and Expenses 15,000.00
Accounting Fees and Expenses 5,000.00
Miscellaneous 4,924.00
----------
TOTAL $45,000.00
----------
----------
The Selling Stockholders other than Imprimis SB L.P. and
Wexford Spectrum Investors LLC 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
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(see Exhibit 5)
24* Power of Attorney (contained on the signature page of this
Registration Statement)
99.1* Securities Purchase Agreement between Media Logic, Inc. and
Imprimis SB L.P. dated December 22, 1997
99.2* Securities Purchase Agreement between Media Logic, Inc. and
Wexford Spectrum Investors LLC dated December 22, 1997
99.3* Warrant to Purchase Shares of Common Stock, par value $.01 per
share, of Media Logic, Inc. (Warrant No. WX-1) dated December 29,
1997
99.4* Warrant to Purchase Shares of Common Stock, par value $.01 per
share, of Media Logic, Inc. (Warrant No. WX-2) dated December 29,
1997
99.5* Warrant to Purchase Shares of Common Stock, par value $.01 per
share, of Media Logic, Inc. (Warrant No. WX-3) dated December 29,
1997
99.6* Warrant to Purchase Shares of Common Stock, par value $.01 per
share, of Media Logic, Inc. (Warrant No. WX-4) dated December 29,
1997
99.7* Warrant Agreement between Media Logic, Inc. and Adar Equities
LLC, dated as of October 29, 1997
99.8 Warrant Agreement between Media Logic, Inc. and Adar Equities
LLC, dated as of February 12, 1998
99.9 Warrant Agreement between Media Logic, Inc. and Boston Group,
L.P. dated as of February 12, 1998
II-2
<PAGE>
* 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 March 9, 1998.
MEDIA LOGIC, INC.
By: /s/ Gregory Scorziello
----------------------------
Gregory Scorziello
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/ Gregory Scorziello Director and Chief March 9, 1998
- -------------------- Executive Officer and President
Gregory Scorziello (principal executive officer)
/s/ Paul M. O'Brien Vice President and Chief Financial March 9, 1998
- ---------------------- Officer (principal financial and
Paul M. O'Brien accounting officer)
* Director March 9, 1998
- ----------------------
Joseph L. Mitchell
Director March 9, 1998
- ----------------------
Francis S. Wyman
* Director March 9, 1998
- ----------------------
Raymond W. Leclerc
* Director March 9, 1998
- ---------------------
Michael Salter
* /s/ Paul M. O'Brien
- ---------------------
By: Paul M. O'Brien
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
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C. (reference is
made to Exhibit 5)
24* Power of Attorney contained on the signature page
of this Registration Statement)
99.1* Securities Purchase Agreement between Media
Logic, Inc. and Imprimis SB L.P. dated
December 22, 1997
99.2* Securities Purchase Agreement between Media
Logic, Inc. and Wexford Spectrum Investors
LLC dated December 22, 1997
99.3* Warrant to Purchase Shares of Common Stock,
par value $.01 per share, of Media Logic,
Inc. (Warrant No. WX-1) dated December 29,
1997
99.4* Warrant to Purchase Shares of Common Stock,
par value $.01 per share, of Media Logic,
Inc. (Warrant No. WX-2) dated December 29,
1997
99.5* Warrant to Purchase Shares of Common Stock,
par value $.01 per share, of Media Logic,
Inc. (Warrant No. WX-3) dated December 29,
1997
99.6* Warrant to Purchase Shares of Common Stock,
par value $.01 per share, of Media Logic,
Inc. (Warrant No. WX-4) dated December 29,
1997
99.7* Warrant Agreement between Media Logic, Inc.
and Adar Equities LLC, dated as of October
29, 1997
99.8 Warrant Agreement between Media Logic, Inc.
and Adar Equities LLC, dated as of February 12,
1998
99.9 Warrant Agreement between Media Logic, Inc.
and Boston Group, L.P. dated as of February 12,
1998
* Previously filed.
<PAGE>
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
701 Pennsylvania Avenue, N.W.
Washington, D.C. 20004 Telephone: 617/542-6000
Telephone: 202/434-7300 Fax: 617/542-2241
Fax: 202/434-7400 www.mintz.com
March 9, 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
4,700,000 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 and Popeo, P.C.
March 9, 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
March 9, 1998
<PAGE>
Exhibit 99.8
MEDIA LOGIC, INC.
AND
ADAR EQUITIES, LLC
WARRANT AGREEMENT
Dated as of February 12, 1998
<PAGE>
WARRANT AGREEMENT (the "Agreement"), dated as of February 12, 1998 by
and between MEDIA LOGIC, INC., a Massachusetts corporation (the "Company"), and
ADAR EQUITIES, LLC (the "Placement Agent").
The Company proposes to issue to the Placement Agent the warrants as
hereinafter described (the "Warrants") to purchase 250,000 shares of common
stock of the Company, $.01 per value per share ("Common Stock") (such number of
shares 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 October 29, 1997, by and between the Company, the Placement Agent
and The Boston Group, L.P.
NOW, THEREFORE, in consideration of the promises and the mutual agreements
set forth herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Issuance of Warrants: Form of Warrant. On February 12, 1998 (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 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 claims 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 Agency 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
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
2
<PAGE>
been 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 10 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 ( the "Exercise Price") and shall be exercisable for sixty (60)
months commencing on March 29, 1998. 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 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 blank 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.
(b) Cashless Exercise. In addition to the method of payment set forth
in Section 4(a) and in lieu of any cash payment required thereunder, the Holder
may at any time and from time to time exercise the Warrant in full or in part by
surrendering the Warrant in the manner specified above in exchange for a number
of shares of Common Stock equal to the product of (x) the number of shares as to
which the Warrant is being exercised multiplied by (y)
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a fraction, the numerator of which is the Fair Market Value (as defined below)
of one share of Common Stock less the Purchase Price and the denominator of
which is such Fair Market Value of one share of Common Stock.
(c) Definition. Fair Market Value of a share of Common Stock as of a
particular date (the "Determination Date") shall mean the Fair Market Value of a
share of the Company's Common Stock. Fair Market Value of a share of Common
Stock as of a Determination Date shall mean:
(i) If the Company's Common Stock is traded on an exchange or is quoted on
the Nasdaq National Market ("Nasdaq"), then the closing or last sale price,
respectively, reported for the last business day (on which a sale in the Common
Stock was made) immediately preceding the Determination Date.
(ii) If the Company's Common Stock is not traded on an exchange or on
Nasdaq but is traded in the over-the-counter market, then the mean of the
closing bid and asked prices reported for the last business day (on which a sale
in the Common Stock was made) immediately preceding the Determination Date.
(d) Upon each surrender of Warrants and 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 three 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 of Common Stock to
which such Holder shall be entitled on such exercise. 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 number of Shares for which such Warrant may still be exercised.
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.
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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 to
pay such other reasonable charges and expenses as the Company may prescribe.
7. Reservation of Shares, etc. 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. 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 8) 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 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
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<PAGE>
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 10(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.
(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 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 other than on Form S-8 or
Form S-4 or their then equivalents, 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 8(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 therefore availed themselves of the right
provided in Section 8(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.
(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 that 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.
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<PAGE>
(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 8(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 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) 60 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 Section
8(a) or 8(b) if independent counsel, 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
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<PAGE>
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,
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 180 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 which
latter case filing may be delayed no longer than 180 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 8, the Company agrees to:
(i) Bear the expenses of any registration or qualification under
paragraphs (a) or (b) of this Section 8, including, but not limited to,
reasonable 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, (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 8, 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; and
(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 process or to taxation as a foreign corporation
doing business in such jurisdiction to which it is not the subject, and to
do any and all other acts and things which may be necessary to enable the
Holders to consummate the proposed sale, transfer or other disposition of
such securities in any jurisdiction.
(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 8, the Company's obligation shall be conditioned as to each
such public offering upon a timely receipt by the Company in writing of:
(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
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<PAGE>
(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 8, (i) the term "Holder" shall
include holders of Shares, and (ii) the term "Registrable Securities" shall mean
the Shares, if issued.
9. 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 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.
10. Notices. Any notice pursuant to this Agreement to be given or made by
this 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 10, to the Holders of
Warrants and/or the holders of Shares:
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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 Shares 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.
11. 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 10.
12. 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]
10
<PAGE>
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
------------------------------
Name: William E. Davis, Jr.
Title: Chief Executive Officer
ADAR EQUITIES, LLC
By: /s/ Ari S. Parnes
------------------------------
Name: Ari S. Parnes
Title: Managing Director
11
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EXHIBIT A
No. A-1
250,000 Warrants
MEDIA LOGIC, INC.
Warrant Certificate
THIS CERTIFIES THAT for value received Adar Equities, LLC, 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 February 12,
1998 (the "Warrant Agreement"), between the Company and Adar Equities, LLC, 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 as such date.
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 officer 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 thereof 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 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
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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: February 12, 1998
MEDIA LOGIC, INC.
By:___________________________________
Name: William E. Davis, Jr.
Title: Chief Executive Officer
Attest:
By:____________________________________
Name:
Title:
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<PAGE>
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 irrevocable 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.
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<PAGE>
FORM OF
ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Warrant Certificate).
TO: MEDIA LOGIC, INC.
The undersigned hereby irrevocable elects to exercise Warrants represented
by this Warrant Certificate to purchase _______________ shares of Common Stock
issuable upon the exercise of such Warrants and requests that certificates for
such shares be issued in the name of:
(Please insert social security, tax identification or other
identifying number)
__________________________________
__________________________________
__________________________________
(Please print name and address)
Date:________________________
________________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Warrant Certificate)
Signature Guaranteed:
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<PAGE>
Exhibit 99.9
MEDIA LOGIC, INC.
AND
THE BOSTON GROUP, L.P.
WARRANT AGREEMENT
Dated as of February 12, 1998
<PAGE>
WARRANT AGREEMENT (the "Agreement"), dated as of February 12, 1998
by and between MEDIA LOGIC, INC., a Massachusetts corporation (the
"Company"), and THE BOSTON GROUP, L.P. (the "Placement Agent").
The Company proposes to issue to the Placement Agent the warrants
as hereinafter described (the "Warrants") to purchase 250,000 shares of
common stock of the Company, $.01 per value per share ("Common Stock") (such
number of shares 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 October 29, 1997, by and between the Company,
the Placement Agent and First Granite Securities, Inc.
NOW, THEREFORE, in consideration of the promises and the mutual
agreements set forth herein and for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Issuance of Warrants: Form of Warrant. On February 12, 1998
(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 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 claims 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 Agency 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 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
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<PAGE>
been 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 10 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 (the "Exercise Price") and shall be exercisable for sixty
(60) months commencing on March 29, 1998. 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
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 blank 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.
(b) Cashless Exercise. In addition to the method of payment set
forth in Section 4(a) and in lieu of any cash payment required thereunder,
the Holder may at any time and from time to time exercise the Warrant in full
or in part by surrendering the Warrant in the manner specified above in
exchange for a number of shares of Common Stock equal to the product of (x)
the number of shares as to which the Warrant is being exercised multiplied by
(y)
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a fraction, the numerator of which is the Fair Market Value (as defined
below) of one share of Common Stock less the Purchase Price and the
denominator of which is such Fair Market Value of one share of Common Stock.
(c) Definition. Fair Market Value of a share of Common Stock as
of a particular date (the "Determination Date") shall mean the Fair Market
Value of a share of the Company's Common Stock. Fair Market Value of a share
of Common Stock as of a Determination Date shall mean:
(i) If the Company's Common Stock is traded on an exchange or is quoted
on the Nasdaq National Market ("Nasdaq"), then the closing or last sale
price, respectively, reported for the last business day (on which a sale in
the Common Stock was made) immediately preceding the Determination Date.
(ii) If the Company's Common Stock is not traded on an exchange or on
Nasdaq but is traded in the over-the-counter market, then the mean of the
closing bid and asked prices reported for the last business day (on which a
sale in the Common Stock was made) immediately preceding the Determination
Date.
(d) Upon each surrender of Warrants and 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 three 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 of
Common Stock to which such Holder shall be entitled on such exercise. 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
number of Shares for which such Warrant may still be exercised.
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.
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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 to pay such other reasonable charges and
expenses as the Company may prescribe.
7. Reservation of Shares, etc. 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. 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 8) 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 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
5
<PAGE>
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 10(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.
(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 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 other than on Form S-8 or Form S-4 or their then
equivalents, 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 8(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 therefore availed themselves of the
right provided in Section 8(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.
(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 that 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.
6
<PAGE>
(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 8(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 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) 60 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
Section 8(a) or 8(b) if independent counsel, 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
7
<PAGE>
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, 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 180 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 which latter case filing may be delayed no longer than 180
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 8, the Company agrees to:
(i) Bear the expenses of any registration or qualification
under paragraphs (a) or (b) of this Section 8, including, but not
limited to, reasonable 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, (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 8, 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; and
(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 process or to
taxation as a foreign corporation doing business in such jurisdiction to
which it is not the subject, and to do any and all other acts and things
which may be necessary to enable the Holders to consummate the proposed
sale, transfer or other disposition of such securities in any
jurisdiction.
(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 8, the Company's obligation shall be conditioned as to
each such public offering upon a timely receipt by the Company in writing of:
(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
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<PAGE>
(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 8, (i) the term "Holder" shall
include holders of Shares, and (ii) the term "Registrable Securities" shall
mean the Shares, if issued.
9. 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 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.
10. Notices. Any notice pursuant to this Agreement to be given or made
by this 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 10, to the
Holders of Warrants and/or the holders of Shares:
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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
Shares 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.
11. 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 10.
12. 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
---------------------------------
Name: William E. Davis, Jr.
Title: Chief Executive Officer
THE BOSTON GROUP, L.P.
By: /s/ Robert A. DiMinico
---------------------------------
Name: Robert A. DiMinico
Title: Chairman
11
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EXHIBIT A
No. A-2
250,000 Warrants
MEDIA LOGIC, INC.
Warrant Certificate
THIS CERTIFIES THAT for value received Boston Group, L.P., 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
February 12, 1998 (the "Warrant Agreement"), between the Company and The
Boston Group, L.P., 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
as such date.
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 officer 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 thereof 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 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
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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.
Dated: February 12, 1998
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 irrevocable 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.
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FORM OF
ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Warrant Certificate).
TO: MEDIA LOGIC, INC.
The undersigned hereby irrevocable elects to exercise Warrants
represented by this Warrant Certificate to purchase _____________ shares of
Common Stock issuable upon the exercise of such Warrants and requests that
certificates for such shares be issued in the name of:
(Please insert social security, tax identification or other
identifying number)
---------------------------------
---------------------------------
---------------------------------
(Please print name and address)
Date:
---------------------------------
---------------------------------
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Warrant Certificate)
Signature Guaranteed:
15
