-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LE+Bh3LFxF7awxnIGf3QSieHUAwP3gPZVKuhA/Bx6qt5HUXxIOKNrLujRO15C29u Z97lo179bCg8Oon9IBrRIQ== 0001047469-98-001058.txt : 19980115 0001047469-98-001058.hdr.sgml : 19980115 ACCESSION NUMBER: 0001047469-98-001058 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19980114 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDIA LOGIC INC CENTRAL INDEX KEY: 0000815185 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 042772354 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-41041 FILM NUMBER: 98506487 BUSINESS ADDRESS: STREET 1: 310 SOUTH ST STREET 2: P O BOX 2258 CITY: PLAINVILLE STATE: MA ZIP: 02762 BUSINESS PHONE: 5086952006 MAIL ADDRESS: STREET 1: 310 SOUTH ST STREET 2: P O BOX 2258 CITY: PLAINVILLE STATE: MA ZIP: 02762 S-3/A 1 S-3/A As filed with the Securities and Exchange Commission on January 14, 1998 Registration No. 333-41041 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Amendment No. 1 To FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 MEDIA LOGIC, INC. ---------------------------- (Exact name of registrant as specified in its charter) Massachusetts ---------------------------- State or other jurisdiction of incorporation or organization) 04-2772354 ---------------------------- (I.R.S. Employer Identification No.) 310 South Street, Plainville, Massachusetts 02762 (508) 695-2006 ---------------------------- (Address, including zip code, and telephone, including area code, of registrant's principal executive offices) William E. Davis, Jr. Chief Executive Officer Media Logic, Inc. 310 South Street Plainville, Massachusetts 02762 (508) 695-2006 ---------------------------- (Name, address, including zip code, and telephone number, including area code, of agent for service) Copy to: Richard R. Kelly, Esquire Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. One Financial Center Boston, MA 02111 (617) 542-6000 ---------------------------- Approximate date of commencement of proposed sale to public: As soon as practicable after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [x]. If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] ---------------------------- Calculation of Registration Fee Proposed Proposed maximum maximum Title of each class offering aggregate Amount of of securities to be Amount to be price per offering registration registered registered unit (1) price (1) fee (2) _______________________________________________________________________________ Common Stock, par 3,642,538 $2.16 $7,881,732 $2,387 value $.01 per share _______________________________________________________________________________ (1) Estimated solely for the purpose of calculating the registration fee and in accordance therewith (i) pursuant to Rule 457(c) includes 1,757,575 shares based upon the average of the high and low sales prices of the Registrant's Common Stock on the American Stock Exchange on November 20, 1997 which amount was $1.50 and 134,093 shares based upon the average of the high and low sales prices of the Registrant's Common Stock on the American Stock Exchange on January 8, 1998 which amount was $1.4375 and (ii) pursuant to Rule 457(g) includes 1,750,870 shares subject to warrants based upon the price at which such warrants may be exercised. (2) A registration fee of $2,330 was paid in connection with the initial filing on November 25, 1997 and an additional fee of $57 relating to the additional 134,093 shares being registered pursuant to this Amendment No. 1 is being paid herewith. ---------------------------- The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Subject to Completion Dated January 14, 1998 PROSPECTUS MEDIA LOGIC, INC. 3,642,538 Shares of Common Stock (Par Value $.01 Per Share) ---------------------------- The 3,642,538 shares of Common Stock of Media Logic, Inc., a Massachusetts corporation (the "Company"), offered hereby are being sold by the selling stockholders identified herein (the "Selling Stockholders"). Such offers and sales may be made on the American Stock Exchange, or otherwise, at prices and on terms then prevailing, or at prices related to the then-current market price, or in negotiated transactions, or by underwriters pursuant to an underwriting agreement in customary form, or in a combination of any such methods of sale. The Selling Stockholders may also sell such shares in accordance with Rule 144 under the Securities Act of 1933, as amended (the "1933 Act"). The Selling Stockholders are identified and certain information with respect to the Selling Stockholders is provided under the caption "Selling Stockholders" herein, to which reference is made. The expenses of the registration of the securities offered hereby, including fees of counsel for the Company, will be paid by the Company. The following expenses will be borne by the Selling Stockholders: underwriting discounts and selling commissions, if any, and the fees of legal counsel, if any, for the Selling Stockholders in connection with the registration of the shares offered herein. The filing by the Company of this Prospectus in accordance with the requirements of Form S-3 is not an admission that the person whose shares are included herein is an "affiliate" of the Company. The Selling Stockholders have advised the Company that they have not engaged any person as an underwriter or selling agent for any of such shares, but they may in the future elect to do so, and they will be responsible for paying such a person or persons customary compensation for so acting. The Selling Stockholders and any broker executing selling orders on behalf of any Selling Stockholder may be deemed to be "underwriters" within the meaning of the 1933 Act, in which event commissions received by any such broker may be deemed to be underwriting commissions under the 1933 Act. The Company will not receive any of the proceeds from the sale of the securities offered hereby. The Common Stock is listed on the American Stock Exchange under the symbol TST. On January 8, 1998, the closing sale price of the Common Stock, as reported by the American Stock Exchange, was $1.4375 per share. ---------------------------- THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE 4 OF THIS PROSPECTUS. ---------------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ---------------------------- No person is authorized in connection with any offering made hereby to give any information or to make any representations other than as contained in this Prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized by the Company. This Prospectus is not an offer to sell, or a solicitation of an offer to buy, by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation. Neither the delivery of this Prospectus nor any sales made hereunder shall under any circumstances create any implication that the information contained herein is correct as of any time subsequent to the date hereof. ---------------------------- The date of this Prospectus is January , 1998. 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. 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 TABLE OF CONTENTS PAGE RISK FACTORS.......................................................... 4 THE COMPANY........................................................... 8 SELLING STOCKHOLDERS.................................................. 9 PLAN OF DISTRIBUTION.................................................. 11 LEGALITY OF COMMON STOCK.............................................. 11 EXPERTS............................................................... 11 INCORPORATION OF CERTAIN INFORMATION BY REFERENCE..................... 11 3 RISK FACTORS An investment in the shares being offered by this Prospectus involves a high degree of risk. In addition to the other information contained in this Prospectus or incorporated herein by reference, prospective investors should carefully consider the following risk factors before purchasing the shares offered hereby. This Prospectus contains and incorporates by reference forward-looking statements within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 which are based on management's current expectations. To the extent that any of the statements contained herein relating to the Company's products and its operations are forward looking, such statements are based on management's current expectations and involve a number of uncertainties and risks. Reference is also made in particular to the discussion set forth under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K and Amendment No. 1 to the Form 10-K on Form 10K/A (collectively, the "Form 10-K") for the fiscal year ended March 31, 1997 and in the Company's Quarterly Reports on Form 10-Q for the quarters ended June 30, 1997 and September 30, 1997 and under "Description of Business" in the Form 10-K, incorporated into this Prospectus by reference. Both the forward-looking statements contained in this Prospectus and those incorporated herein by reference are based on current expectations that involve a number of uncertainties including those set forth in the risk factors below. Actual results could differ materially from those projected in the forward-looking statements. Shift in Business Focus. While in fiscal years 1996 and 1997, the Company still derived most of its revenue from sales of its certifiers, evaluators and duplicators for floppy disks and tape, the Company has shifted its focus to its automated tape libraries for the data storage market. In fiscal year 1996, the Company sold only pre-production units of its automated data library ("ADL") products. The Company first commenced sales of its production units of ADL products, other than evaluation units, in the second quarter of fiscal year 1997 and therefore has limited experience in selling its ADL products. The Company expects to derive a substantial majority of its total revenue and net income from sales of its ADL products in the future. Continued growth of the Company's ADL business will depend upon several factors, including demand for these libraries, the Company's ability to develop new products to meet the changing requirements of its customers, technological change and competitive pressures. There can be no assurance that the Company's ADL business will take hold and grow. Competition. Competition in the data storage market, including the automated tape library market, is intense, with a large number of companies in these markets. Many of the Company's current and potential competitors have longer operating histories, greater name recognition, larger installed customer bases and significantly greater financial, technical and marketing resources than the Company. As a result, such competitors may be able to adapt more quickly to new or emerging technologies and changes in customer requirements, or to devote greater resources to the promotion and sale of their products than the Company. An increase in competition could result in price reductions and loss of market share. Such competition and any resulting reduction in gross margins could have a material adverse effect on the Company's business, financial condition and results of operations. Rapid Technological Change; Dependence on New Product Development. The computer industry in general, and the markets for the Company's automated tape library products in particular, are characterized by rapidly changing technology, frequent new product introductions, and significant competition. In order to keep pace with this rapidly changing market environment, the Company must continually develop and incorporate into its products new technological advances and features desired by the marketplace at acceptable prices. The successful development and commercialization of new products involves many risks, including the identification of new product opportunities, timely completion of the development process, the control and recoupment of development and production costs and acceptance by customers of the Company's products. There can be no assurance that the Company will be successful in identifying, developing, manufacturing and marketing new products in a timely and cost effective manner, that products or technologies developed by others will not render the Company's products or technologies uncompetitive, or that the Company's products will be accepted in the marketplace. Protection of Proprietary Technology. The Company's ability to compete effectively with other companies will depend, in part, on the ability of the Company to maintain the proprietary nature of its technology. There can be no assurance that competitors in both the United States and foreign countries, many of which have substantially greater resources and have made substantial investments in competing technologies, do not have or will not obtain patents that will prevent, limit or interfere with the Company's ability to make and sell its products or intentionally infringe the Company's patents. While the Company possesses or licenses certain patent rights, it relies in large part on unpatented proprietary technology, and there can be no assurance that others may not independently develop the same or similar technology, whether or not patented, or otherwise obtain access to the Company's proprietary technology. 4 Cyclical Nature of the Computer Industry. The computer industry is highly cyclical and has historically experienced periodic downturns. The cyclical nature of the computer industry is beyond the control of the Company. As an example, the Company experienced a substantial reduction in demand for its original product line (floppy disk certification, testing and duplication equipment). A similar decrease in demand for the Company's new automated tape library products could have a material adverse effect on its business and products. Uncertainties Related to Company's Ability to Raise Additional Necessary Capital. The Company has spent and expects to continue to spend substantial funds for continuation of the research and development of product candidates and will also require additional funds in order to manufacture, market and sell its products. In March 1997, the Company completed a private placement of convertible subordinated debentures (the "March Private Placement") which resulted in approximately $3,530,000 in gross proceeds to the Company and in October 1997 the Company completed a private placement of convertible debentures (the "October Private Placement") which resulted in $750,000 in gross proceeds to the Company. In addition, in December 1997, the Company completed a private placement of the Common Stock (the "December Private Placement") which resulted in $1,530,000 in gross proceeds to the Company. However, because of its continuing losses from operations, the Company anticipates that unless revenues increase significantly, it will require additional capital in order to continue its operations. See "--Recent Losses." The Company has no assurance that it will be able to raise such additional capital, if needed, in a timely manner or on favorable terms, if at all. If the Company is unable to increase revenues significantly and/or secure additional financing, the Company could be forced to curtail or discontinue its operations. Recent Losses. For the six months ended September 30, 1997, the Company incurred a loss of $2,098,630 on revenues of $767,626. For the fiscal year ended March 31, 1997, the Company incurred a loss of $4,122,288 on revenues of $3,644,478, and for the fiscal year ended March 31, 1996, the Company incurred a loss of $7,818,819 on revenues of $3,578,236. These recent losses are primarily the result of a decline in the revenues generated in the Company's traditional markets during a period when the Company was making a large investment in its ADL technology. The Company believes that the trends that resulted in its losses could continue for the foreseeable future. Dependence on Key Personnel. The Company's success depends to a significant extent on the performance of its senior management, including its Chief Executive Officer and President, William E. Davis, Jr., its Vice President of Sales, B. Edward Fitzgibbons, its Director of Engineering, James Hackathorn, and its Vice President and Chief Financial Officer, Paul M. O'Brien. Competition for highly skilled employees with technical, management and other specialized training is intense in the computer industry. The Company's failure to attract additional qualified employees or to retain the services of key personnel could have a material adverse effect on the Company's business. Volatility of Share Price. Market prices for securities of technology companies have been volatile. The market price for the Company's Common Stock has fluctuated significantly since public trading commenced in 1987, and it is likely that the market price will continue to fluctuate in the future. Quarterly fluctuations in operating results, announcements by the Company or the Company's present or potential competitors, technological innovations or new commercial products or services, developments or disputes concerning patent or proprietary rights and other events or factors may have a significant impact on the Company's business and on the market price of the Common Stock. Control by Existing Management and Stockholders. The directors, officers and principal stockholders of the Company and certain of their affiliates and/or family members beneficially own in the aggregate approximately 38.7% of the Company's Common Stock (including shares issuable upon exercise of options held by such persons, which options are currently exercisable and shares issuable upon exercise of warrants held by such persons, which warrants are currently exercisable). As a result of such ownership, these stockholders will exert influence over all matters requiring approval by the stockholders of the Company, including the election of directors. One stockholder, Raymond Leclerc, has a contractual right to Board representation and the purchasers in the December Private Placement have the contractual right to board representation in certain circumstances. Certain Charter and By-Law Provisions and Massachusetts Laws May Affect Stock Price. The Company's Restated Articles of Organization and By-laws contain provisions that may make it more difficult for a third party to acquire control of, or discourage acquisition bids for, the Company. In addition, certain Massachusetts laws contain provisions that may have the effect of making it more difficult for a third party to acquire control of, or discourage acquisition bids for, the Company. These provisions could limit the price that certain investors might be willing to pay in the future for shares of Common Stock. Shares Eligible for Future Sale. Sales of substantial amounts of Common Stock in the public market could have an adverse effect on the price of the Company's Common Stock. Approximately 7,317,936 shares of Common Stock are currently freely tradable on the open market. In addition, approximately 1,245,300 shares are eligible for sale pursuant to Rule 701 or Rule 144 of the 1933 Act. Also, there were a total of 575,138 options to purchase Common Stock outstanding as of January 8, 1998 pursuant to the Company's stock option plans, and 399,672 of such options were vested and can be exercised at any time prior to their respective expiration dates. Lee H. Elizer, the 5 former Chief Executive Officer and President of MediaLogic ADL, is entitled to receive 8,000 shares of Common Stock in October 1998, which, under the terms of his separation agreement with the Company, are expected to be registered under the 1933 Act following their issuance. In June 1997, the Company registered for resale, on a registration statement on Form S-3 (the "June 1997 Registration Statement"), up to 3,565,656 shares of Common Stock issuable upon conversion of $3,530,000 aggregate principal amount of 7% convertible subordinated debentures due 2000 (the "March Debentures"), and interest thereon, issued by the Company to the selling stockholders named therein. The principal amount of the March Debentures is convertible at any time into shares of the Company's Common Stock based on a predetermined formula. As of the date hereof, all of the remaining holders of the March Debentures and the Company have agreed to set a fixed conversion price for the March Debentures of $.90 per share of Common Stock until January 28, 1998 and thereafter the price at which the March Debentures will convert will be the lower of (i) $2.805, which amount is 120% of the average closing bid price of the Common Stock as calculated over the five trading-day period ending on March 21, 1997 (the "March Closing Date Price") and (ii) $.90 (the "March Conversion Date Price"). Each individual $10,000 principal amount March Debenture may be converted only in its entirety. The March Debentures bear interest at the rate of 7% per year. Interest is payable only upon conversion of the March Debentures and, at the Company's option, is payable either in cash or in shares of the Company's Common Stock based on the average closing sale price of the Common Stock as calculated over the five trading-day period ending on the trading day immediately preceding the date of conversion. The Company registered 3,565,656 shares of Common Stock (the "Registered Shares") pursuant to the June 1997 Registration Statement to insure that there would be a sufficient number of registered shares in the event that the market price for the Company's Common Stock declined substantially. The Registered Shares represented the approximate number of shares which would be issuable upon conversion of the March Debentures (excluding shares issuable upon conversion of accrued interest) if the March Conversion Date Price were $0.99 per share. An aggregate of 3,063,222 shares have been offered pursuant to the Prospectus contained in the June 1997 Registration Statement as amended by Prospectus Supplement No. 1 dated December 31, 1997, which number includes (i) 2,231,000 shares issued to date for March Debentures already converted, (ii) 777,778 shares issuable upon conversion of the remainder of the March Debentures outstanding and (iii) 54,444 shares issuable upon conversion of approximately one year's accrued interest, based on an assumed March Conversion Date Price of $.90 per share for the principal amount and interest thereon of the March Debentures outstanding as of December 31, 1997. If the March Debentures become convertible into more than 3,565,656 shares, the Company would be obligated to register additional shares of Common Stock. Through January 8, 1998, approximately $2,830,000 aggregate principal amount of the March Debentures have been converted into 2,177,463 shares of Common Stock, and approximately $90,000 aggregate interest amount has been converted into 54,264 shares of Common Stock. 891,668 of the Shares offered hereby are issuable upon conversion of $750,000 aggregate principal amount of 7% convertible debentures due 2000 (the "October Debentures"), and interest thereon, issued by the Company in the October Private Placement. At any time beginning on January 12, 1998, the principal amount of the October Debentures is convertible into shares of the Company's Common Stock based on a predetermined formula. The price at which the October Debentures will convert will be $.90 until January 28, 1998 and thereafter will be the lower of (i) $1.95, which amount is 120% of the average closing bid price of the Common Stock as calculated over the five trading-day period ending on October 29, 1997 (the "October Closing Date Price") and (ii) $.90 (the "October Conversion Date Price"). The October Debentures bear interest at the rate of 7% per year. Interest is payable only upon conversion of the October Debentures and, at the Company's option, is payable either in cash or in shares of the Company's Common Stock based on the average closing sale price of the Common Stock as calculated over the five trading-day period ending on the trading day immediately preceding the date of conversion. The Company has agreed to register for resale from time to time by the purchasers thereof the shares of Common Stock underlying the October Debentures. All of the shares registered for resale by the holders thereof may be reoffered and resold in the public trading market from time to time during the period the Company has agreed to maintain the effectiveness of the registration statement registering those shares. Pursuant to the registration statement of which this Prospectus is a part, the Company has registered 891,668 shares of Common Stock for issuance upon conversion of the October Debentures. The shares registered represents the approximate number of shares which would be issuable upon conversion of the October Debentures (including shares issuable upon conversion of one year of accrued interest) if the October Conversion Date Price were $0.90 per share. If the October Debentures become convertible into more than 891,668 shares, the Company will be obligated to register additional shares of Common Stock. 6 650,870 of the Shares offered hereby are issuable upon exercise of warrants to purchase Common Stock (the "Advent Warrants") issued to ACFS Limited Partnership ("ACFS") and to Digital Media & Communications L.P. ("Digital Media") in connection with the March Private Placement. The Advent Warrants are exercisable at any time prior to September 22, 2001 at an exercise price of $3.00 per share of Common Stock. 900,000 of the Shares offered hereby are issuable upon exercise of warrants to purchase Common Stock (the "Adar Warrants") issued to Adar Equities LLC, ("Adar") in connection with the March Private Placement. The Adar Warrants are exercisable at any time prior to March 24, 2002 at an exercise price of $3.00 per share of Common Stock. 200,000 of the Shares offered hereby are issuable upon exercise of warrants to purchase Common Stock (the "Rochon Warrants") issued to Rochon Capital Group, Ltd. in connection with the March Private Placement. The Rochon Warrants are exercisable at an exercise price of $2.00 per share of Common Stock. The Company has agreed to register for resale from time to time by the purchasers thereof the shares of Common Stock underlying the Advent Warrants, the Adar Warrants and the Rochon Warrants (collectively, the "Warrants"). All of the shares registered for resale by the holders thereof, including the shares offered hereby, may be reoffered and resold in the public trading market from time to time during the period the Company has agreed to maintain the effectiveness of the registration statement registering those shares. 1,000,000 of the Shares offered hereby were issued to Raymond W. Leclerc in a private placement in September 1995. The Company has agreed to include such shares held by Mr. Leclerc in certain registrations filed by the Company under the 1933 Act and accordingly, such shares are included in the registration statement of which this Prospectus is a part. The Company issued warrants (the "Adar October Warrants") to purchase 500,000 shares of Common Stock to Adar in connection with the October Private Placement. The Adar October Warrants are exercisable at any time during the period commencing January 26, 1998 and ending January 26, 2003 at an exercise price of $2.00 per share. The Company issued warrants (the "Wexford Warrants") to purchase an aggregate of 2,000,000 shares of Common Stock to Imprimis SB L.P. and Wexford Spectrum Investors LLC in connection with the December Private Placement. 1,000,000 of such warrants are exercisable at an exercise price of $3.00 per share and 1,000,000 of such warrants are exercisable at an exercise price of $1.50 per share. The Wexford Warrants may be exercised at any time prior to December 29, 2002. The Company has also agreed to issue warrants (the "Placement Agent Warrants") to purchase 250,000 shares of Common Stock to each of Adar and Boston Group, L.P. in connection with the December Private Placement. The Placement Agent Warrants will be exerciseable at any time during the period commencing March 29, 1998 and ending on March 29, 2003 at an exercise price of $2.00 per share. The Company has agreed to register for resale from time to time by the purchasers thereof the shares of Common Stock issued in the December Private Placement and the shares of Common Stock underlying the Adar October Warrants, the Wexford Warrants and the Placement Agent Warrants. All of such shares registered for resale by the holders thereof may be reoffered and resold in the public trading market from time to time during the period the Company has agreed to maintain the effectiveness of the registration statement registering those shares. Absence of Dividends. The Company has not paid dividends since its inception and does not anticipate paying any dividends in the foreseeable future. Dilution. Dilution is likely to occur upon exercise of outstanding warrants and existing stock options and upon the conversion of the March Debentures and the October Debentures. See "--Shares Eligible For Future Sale." American Stock Exchange Listing. The Company does not fully satisfy the American Stock Exchange guidelines for continued listing and there is no assurance that the listing of the Common Stock on the American Stock Exchange will be continued. 7 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 SELLING STOCKHOLDERS 891,668 of the Shares offered hereby are issuable upon conversion of the October Debentures which were issued to F.T.S. Worldwide Corp. in the October Private Placement pursuant to a Securities Purchase Agreement between the Company and F.T.S. Worldwide Corp. (the Debenture, the form of Amendment No. 1 thereto and the Securities Purchase Agreement have been filed as Exhibits 99.9, 99.11 and 99.8, respectively, to the registration statement of which this Prospectus is a part). 891,668 shares represents the number of shares issuable upon conversion of the October Debentures as of the date of this Prospectus, assuming that one year's interest of approximately $52,500 has accrued under the October Debentures. The number of shares issuable upon conversion of accrued interest under the October Debentures will change if the October Debentures are held for more or less than one year. 650,870 of the Shares offered hereby are issuable upon exercise of the Advent Warrants, the form of which Warrants are filed as Exhibits 99.2, 99.3, 99.4 and 99.5 to the registration statement of which this Prospectus is a part. 900,000 of the Shares offered hereby are issuable upon exercise of the Adar Warrants, the form of which Warrant is filed as Exhibit 99.7 to the registration statement of which this Prospectus is a part. 200,000 of the Shares offered hereby are issuable upon exercise of the Rochon Warrants, the form of which Warrant is filed as Exhibit 99.6 to the registration statement of which this Prospectus is a part. 1,000,000 of the Shares offered hereby were issued to Raymond Leclerc in a private placement in October 1995 pursuant to a Stock Purchase Agreement, dated September 25, 1995, between the Company and Mr. Leclerc, a copy of which is filed as Exhibit 99.1 to the registration statement of which this prospectus is a part. The following table sets forth information with respect to the beneficial ownership of the Company's Common Stock by the Selling Stockholders as of January 8, 1998, as adjusted to reflect the sale of the Common Stock offered hereby by each Selling Stockholder.
Shares Owned Prior Shares Owned to Offering (1) Number of After Offering (2) ------------------ Shares Being ------------------ Selling Stockholder Number Percent Offered Number Percent - -------------------- --------- ------- ------------ ------- ------- Adar Equities LLC(3) 1,400,000 12.0% 900,000 500,000 4.3% Digital Media & Communications Limited Partnership(4) 1,262,368 11.8 410,870 851,498 8.0 Raymond Leclerc(5) 1,168,300 11.4 1,000,000 168,300 1.6 F.T.S. Worldwide Corp.(6) 1,225,001 10.7 891,668 333,333 2.9 ACFS Limited Partnership(7) 240,000 2.3 240,000 0 -- Rochon Capital Group, Ltd.(8) 200,000 1.9 200,000 0 --
_____________ (1) The number of shares of Common Stock issued and outstanding on January 8, 1998 was 10,263,660. The calculation of percentage ownership for each listed Selling Stockholder is based upon the number of shares of Common Stock issued and outstanding at January 8, 1998, plus the shares of Common Stock issuable upon exercise of the Warrants or conversion of the October Debentures, as the case may be, which are offered hereby by such Selling Stockholder. (2) Assuming all shares offered hereby are sold to unaffiliated third parties. (3) Includes 900,000 shares issuable upon exercise of the Adar Warrants and 500,000 shares issuable upon exercise of the Adar October Warrants. (4) Includes 410,870 shares issuable upon exercise of the Advent Warrants. (5) Mr. Leclerc is a director of the Company. 9 (6) Includes 891,668 shares issuable to F.T.S. Worldwide Corp. upon conversion of October Debentures and interest thereon at an assumed conversion price of $.90. The price at which the October Debentures will convert into shares of Common Stock will be $.90 until January 28, 1998 and thereafter will be will be the lower of (i) $1.95, which amount is 120% of the average closing bid price of the Common Stock as calculated over the five trading-day period ending on October 29, 1997 and (ii) $.90. Also includes 333,333 Shares issuable to F.T.S. Worldwide Corp. upon conversion of March Debentures at an assumed conversion price of $.90. The general conversion price or prices for the March Debentures and the October Debentures will vary accordingly, and the number and percentage of shares of Common Stock beneficially owned by F.T.S. Worldwide Corp. will be adjusted at the time of conversion to reflect changes in the average closing bid price of the Common Stock, the amount of accrued interest at the time of conversion, and stock splits, stock dividends and other similar events. (7) Represents shares issuable upon exercise of the Advent Warrants. (8) Represents shares issuable upon exercise of the Rochon Warrants. 10 PLAN OF DISTRIBUTION The 3,642,538 shares of Common Stock of the Company offered hereby may be offered and sold from time to time by the Selling Stockholders, or by pledgees, donees, transferees or other successors in interest. The Selling Stockholders will act independently of the Company in making decisions with respect to the timing, manner and size of each sale. Such sales may be made on the American Stock Exchange or otherwise, at prices related to the then current market price or in negotiated transactions, including pursuant to an underwritten offering or one or more of the following methods: (a) purchases by a broker-dealer as principal and resale by such broker or dealer for its account pursuant to this Prospectus; (b) ordinary brokerage transactions and transactions in which a broker solicits purchasers; and (c) block trades in which a broker-dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction. In effecting sales, brokers or dealers engaged by the Selling Stockholders may arrange for other brokers or dealers to participate. Brokers or dealers may receive commissions or discounts from the Selling Stockholders or from the purchasers in amounts to be negotiated immediately prior to the sale. The Selling Stockholders may also sell such shares in accordance with Rule 144 under the 1933 Act. The Company has agreed to use its best efforts to maintain the effectiveness of the registration of the shares being offered hereunder until the earlier of (i) September 21, 2001 and (ii) such time as all shares of Common Stock issued or issuable upon exercise of the Warrants or upon conversion of the October Debentures have been registered under the 1933 Act and disposed of in accordance with an effective registration statement under the 1933 Act. The Selling Stockholders and any brokers participating in such sales may be deemed to be underwriters within the meaning of the 1933 Act. There can be no assurance that the Selling Stockholders will sell any or all of the shares of Common Stock offered hereunder. All proceeds from any such sales will be the property of the Selling Stockholders who will bear the expense of underwriting discounts and selling commissions, if any, and the Selling Stockholders' own legal fees, if any. LEGALITY OF COMMON STOCK The validity of the issuance of the shares of Common Stock offered hereby is being passed upon for the Company by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Boston, Massachusetts. Richard R. Kelly, Esq., a member of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., is the Clerk of the Company. EXPERTS The consolidated balance sheets of the Company as of March 31, 1997 and 1996 and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended March 31, 1997, incorporated by reference in this Prospectus and elsewhere in the registration statement, have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, and are incorporated herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said reports. INCORPORATION OF CERTAIN INFORMATION BY REFERENCE The following documents filed by the Company with the Commission are incorporated herein by reference: (a) The Company's Annual Report on Form 10-K and Amendment No. 1 to the Form 10-K on Form 10-K/A for the fiscal year ended March 31, 1997, filed pursuant to Section 13 or 15(d) of the 1934 Act (File No. 1-9605). (b) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended June 30, 1997 and September 30, 1997, filed pursuant to Section 13 or 15(d) of the 1934 Act (File No. 1-9605). (c) The Company's Current Report on Form 8-K filed with the Commission on December 31, 1997. (d) The description of the Company's capital stock contained in the Company's registration statement on Form 8-A under the 1934 Act (File No. 1-9605), including amendments or reports filed for the purpose of updating such description. All reports and other documents subsequently filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act, prior to the filing of a post-effective amendment which indicates that all securities covered by this Prospectus have been sold or which deregisters all such securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of the filing of such reports and documents. 11 PART II. INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution The following expenses incurred in connection with the sale of the securities being registered will be borne by the Registrant. Other than the registration fee, the amounts stated are estimates. SEC Registration Fee $ 2,387.00 AMEX Fees 17,500.00 Legal Fees and Expenses 15,000.00 Accounting Fees and Expenses 5,000.00 Miscellaneous 5,113.00 ---------- TOTAL $45,000.00 ---------- ---------- The Selling Stockholders will bear the expense of their own legal counsel, if any. Item 15. Indemnification of Officers and Directors Article VI.A of the Company's Restated Articles of Organization provides that no Director of the Company shall be personally liable to the corporation or to any of its stockholders for monetary damages for any breach of fiduciary duty by such Director as a Director notwithstanding any provision of law imposing such liability; provided, however, that, to the extent required from time to time by applicable law, Article VI.A shall not eliminate the liability of a Director, to the extent such liability is provided by applicable law, (a) for any breach of a Director's duty of loyalty to the corporation or its stockholders, (b) for acts or omissions not in good faith which involve intentional misconduct or a knowing violation of law, (c) under Section 61 or Section 62 of the Business Corporation Law of the Commonwealth of Massachusetts, or (d) for any transaction from which the Director derived an improper personal benefit. No amendment to or repeal of Article VI.A shall apply to or have any effect on the liability or alleged liability of any Director for or with respect to any acts or omissions of such Director occurring prior to the effective date of such amendment or repeal. In addition, the Company's By-Laws provide as follows: Article First, Section 12. Indemnity. (a) The Corporation shall indemnify and reimburse out of the corporate funds any person (or the personal representative of any person) who at any time serves or shall have served as a Director, officer or employee of the Corporation, or as a Director, officer or employee of another Corporation the majority of the stock of which is owned by the Corporation, whether or not in office at the time, against and for any and all claims and liabilities to which he may be or become subject by reason of such service, and against and for any and all expenses necessarily incurred in connection with the defense or reasonable settlement of any legal or administrative proceedings to which he is made a party by reason of such service, except in relation to matters as to which he shall be finally adjudged not to have acted in good faith in the reasonable belief that his action was in the best interest of the Corporation or to the extent that such matter relates to service with respect to an employee benefit plan, in the best interests of the participants or beneficiaries of such employee benefit plan. In effecting such indemnity and reimbursement, the stockholders may enter into such agreements and direct the officers of the Corporation to make such payment or payments and take such other action (including employment of counsel to defend against such claims and liabilities) as may in their judgment be reasonably necessary or desirable. Such indemnification or reimbursement shall not be deemed to exclude any other rights or privileges to which such person may be entitled. (b) The Board of Directors may by vote act to indemnify any or all officers of the Corporation from liability for acts done by them in good faith on behalf of the Corporation. (c) The Directors may vote to defray the expense of defending any claims brought against one or more Directors or other Officers on account of any action purported to have been done in any official capacity, and may vote to reimburse any such Director or other Officer for any sum paid by him to settle any such claim; provided that if it shall be finally determined by judgment or decree of any court that any such Director or other Officer is personally liable on account of any such claim, he shall reimburse the Company for his pro rata share of any expense so defrayed or reimbursement so made by the Company. (d) To the extent legally permissible, the Corporation shall indemnify each of its Directors and Officers against all liabilities including expenses imposed upon or reasonably incurred by him in connection with any action, suit or other proceeding in which he may be involved or with which he may be threatened, while in office or thereafter, by reason of his acts II-1 or omissions as such Director or Officer, unless in such proceeding he shall be finally adjudged liable by reason of dereliction in the performance of his duty as such Director or Officer; provided, however, that such indemnification shall not cover liabilities in connection with any matter which shall be disposed of through a compromise payment by such Director or Officer, pursuant to a consent decree or otherwise, unless such compromise shall be approved as in the best interests of the Corporation, after notice that it involves such indemnification, by a vote of the Board of Directors in which no interested Director participates, or by a vote or the written approval of the holders of a majority of the outstanding stock at the time having the right to vote for Directors, not counting as outstanding any stock owned by any interested Director or Officer. The rights of indemnification hereby provided shall not be exclusive of or affect any other rights to which any Director or Officer may be entitled. As used in this paragraph, the terms "Director" and "Officer" include their respective heirs, executors and administrators, and an "interested" Director or Officer is one against whom as such the proceedings in question or another proceeding on the same or similar grounds is then pending. Item 16. Exhibits. Exhibit Number Description - ------- ----------- 4.1 Article 4 of Restated Articles of Organization of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1993) 4.2 By-Laws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant's Registration Statement on Form S-18, No. 33-14722-B, effective July 23, 1987) 4.3 Form of Common Stock Certificate (incorporated by reference to Exhibit 10.7 to the Registrant's Registration Statement on Form S-18, No. 33-14722-B, effective July 23, 1987) 5 Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., with respect to the legality of the securities being registered (filed herewith) 23.1 Consent of Arthur Andersen LLP (filed herewith) 23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (see Exhibit 5) 24* Power of Attorney (filed in Part II of this Registration Statement) 99.1* Stock Purchase Agreement between Media Logic, Inc. and Raymond Leclerc, dated September 25, 1995 99.2* Warrant Agreement between Media Logic, Inc. and Digital Media & Communications L.P., dated March 24, 1997 ("Digital Media Warrant") 99.3* Amendment to Digital Media Warrant, dated September 30, 1997 99.4* Warrant Agreement between Media Logic, Inc. and ACFS Limited Partnership, dated March 24, 1997 ("ACFS Warrant") 99.5* Amendment to ACFS Warrant, dated September 30, 1997 99.6 Warrant Agreement between Media Logic, Inc. and Rochon Capital Group, Ltd., dated October 29, 1997 (filed herewith) 99.7* Warrant Agreement between Media Logic, Inc. and Adar Equities LLC, dated March 25, 1997 99.8* Securities Purchase Agreement between Media Logic, Inc. and F.T.S. Worldwide Corp., dated October 29, 1997 99.9* Media Logic, Inc. 7% Convertible Debenture due October 29, 2000, dated October 29, 1997 II-2 99.10* Registration Rights Agreement between Media Logic, Inc. and F.T.S. Worldwide Corp., dated October 29, 1997 99.11 Form of Amendment No. 1 to 7% Convertible Debentures Due October 29, 2000 dated as of December 29, 1997 between Media Logic, Inc. and F.T.S. Worldwide Corp. (incorporated by reference to Exhibit 99.3 to the Registrant's Current Report on Form 8-K filed with the Commission on December 31, 1997) * Previously filed. Item 17. Undertakings. A. Rule 415 Offering The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the 1933 Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (Section 230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant with or furnished to the Commission pursuant to Section 13 or Section 15(d) of the 1934 Act that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the 1933 Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. B. Filings Incorporating Subsequent Exchange Act Documents by Reference The undersigned registrant hereby undertakes that, for purposes of determining any liability under the 1933 Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the 1934 Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. C. Request for Acceleration of Effective Date or Filing of Registration Statement on Form S-8 Insofar as indemnification for liabilities arising under the 1933 Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Plainville, Massachusetts on January 14,1998. MEDIA LOGIC, INC. By: /s/ William E.Davis ---------------------------- William E. Davis, Jr. Chief Executive Officer and President Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Signatures Title Date - ------------ ------- ----- /s/ William E. Davis Director and Chief January 14, 1998 - -------------------- William E. Davis, Jr. Executive Officer and President (principal executive officer) /s/ Paul M. O'Brien Vice President and Chief Financial January 14, 19987 - -------------------- Paul M. O'Brien Officer (principal financial and accounting officer) - -------------------- Director January 14, 1998 Joseph L. Mitchell * Director January 14, 1998 - -------------------- Francis S. Wyman - -------------------- Director January 14, 1998 Raymond W. Leclerc * Director January 14, 1998 - -------------------- Michael Salter *By: /s/ William E. Davis --------------------- William E. Davis, Jr. attorney-in-fact MEDIA LOGIC, INC. INDEX TO EXHIBITS FILED WITH FORM S-3 REGISTRATION STATEMENT Exhibit Sequential Number Description Page No. - ------- ----------- ---------- 4.1 Article 4 of Restated Articles of Organization of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1993) 4.2 By-Laws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant's Registration Statement on Form S-18, No. 33-14722-B, effective July 23, 1987). 4.3 Form of Common Stock Certificate (incorporated by reference to Exhibit 10.7 to the Registrant's Registration Statement on Form S-18, No. 33-14722-B, effective July 23, 1987) 5 Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., with respect to the legality of the securities being registered (filed herewith) 23.1 Consent of Arthur Andersen LLP (filed herewith) 23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (reference is made to Exhibit 5) 24* Power of Attorney (filed in Part II of this Registration Statement) 99.1* Stock Purchase Agreement between Media Logic, Inc. and Raymond Leclerc, dated September 25, 1995 99.2* Warrant Agreement between Media Logic, Inc. and Digital Media & Communications L.P., dated March 24, 1997 ("Digital Media Warrant") 99.3* Amendment to Digital Media Warrant, dated September 30, 1997 99.4* Warrant Agreement between Media Logic, Inc. and ACFS Limited Partnership, dated March 24, 1997 ("ACFS Warrant") 99.5* Amendment to ACFS Warrant, dated September 30, 1997 99.6 Warrant Agreement between Media Logic, Inc. and Rochon Capital Group, Ltd., dated October 29, 1997 (filed herewith) 99.7* Warrant Agreement between Media Logic, Inc. and Adar Equities LLC, dated March 25, 1997 99.8* Securities Purchase Agreement between Media Logic, Inc. and F.T.S Worldwide Corp., dated October 29, 1997 99.9* Media Logic, Inc. 7% Convertible Debenture due October 29, 2000, dated October 29, 1997 99.10* Registration Rights Agreement between Media Logic, Inc. and F.T.S. Worldwide Corp., dated October 29, 1997 99.11 Form of Amendment No. 1 to 7% Convertible Debentures Due October 29, 2000 dated as of December 29, 1997 between Media Logic, Inc. and F.T.S. Worldwide Corp. (incorporated by reference to Exhibit 99.3 to the Registrant's Current Report on Form 8-K filed with the Commission on December 31, 1997) * Previously filed. EX-5 2 EXHIBIT 5 Exhibit 5 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. One Financial Center Boston, Massachusetts 02111 701 Pennsylvania Avenue, N.W. Telephone: 617/542-6000 Washington, D.C. 20004 Fax: 617/542-2241 Telephone: 202/434-7300 www.mintz.com Fax: 202/434-7400 January 14, 1998 Media Logic, Inc. 310 South Street Plainville, Massachusetts 02762 Ladies and Gentlemen: We have acted as counsel to Media Logic, Inc., a Massachusetts corporation (the "Company"), in connection with the preparation and filing with the Securities and Exchange Commission of a Registration Statement on Form S-3 (the "Registration Statement"), pursuant to which the Company is registering under the Securities Act of 1933, as amended, a total of 3,642,538 shares (the "Shares") of its common stock, $.01 par value per share (the "Common Stock"), for resale to the public. The Shares are to be sold by the selling stockholders identified in the Registration Statement. This opinion is being rendered in connection with the filing of the Registration Statement. All capitalized terms used herein and not otherwise defined shall have the respective meanings given to them in the Registration Statement. In connection with this opinion, we have examined the Company's Restated Articles of Organization and By-Laws, both as currently in effect; such other records of the corporate proceedings of the Company and certificates of the Company's officers as we have deemed relevant; and the Registration Statement and the exhibits thereto. Richard R. Kelly, Clerk of the Company, is a member of our firm. In our examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, photostatic or facsimile copies and the authenticity of the originals of such copies. Based upon the foregoing, we are of the opinion that (i) the Shares have been duly and validly authorized by the Company and (ii) the Shares, when sold, will be duly and validly issued, fully paid and non-assessable shares of the Common Stock. Mintz, Levin, Cohn, Ferris, Glovsky, Popeo, P.C. January 14, 1998 Page 2 Our opinion is limited to the General Corporation Laws of The Commonwealth of Massachusetts, and we express no opinion with respect to the laws of any other jurisdiction. No opinion is expressed herein with respect to the qualification of the Shares under the securities or blue sky laws of any state or any foreign jurisdiction. We understand that you wish to file this opinion as an exhibit to the Registration Statement, and we hereby consent thereto. We hereby further consent to the reference to us under the caption "Legality of Common Stock" in the prospectus included in the Registration Statement. Very truly yours, /s/ Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. ----------------------------------- Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. cc: Richard R. Kelly, Esq. EX-23.1 3 EX-23.1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our reports dated May 19, 1997 included in Media Logic Inc.'s Form 10-K for the year ended March 31, 1997 and to all references to our Firm included in this registration statement. /s/ Arthur Andersen LLP ------------------------ ARTHUR ANDERSEN LLP Boston, Massachusetts January 14, 1998 EX-99.6 4 EX-99.6 MEDIA LOGIC, INC. AND ROCHON CAPITAL GROUP, LTD. WARRANT AGREEMENT Dated as of October 29, 1997 WARRANT AGREEMENT (the "Agreement"), dated as of October 29, 1997 by and between MEDIA LOGIC, INC., a Massachusetts corporation (the "Company"), and ROCHON CAPITAL GROUP, LTD., a California corporation (the "Placement Agent"). The Company proposes to issue to the Placement Agent the warrants as hereinafter described (the "Warrants") to purchase 200,000 shares of common stock of the Company, $.01 par value per share ("Common Stock"), subject to adjustment as provided in Section 8 hereof (such number of shares, as adjusted, being hereinafter referred to as the "Shares"), each Warrant entitling the holder ("Holder") thereof to purchase one share of Common Stock. All capitalized terms used herein and not otherwise defined herein shall have the same meanings as assigned thereto in that certain Placement Agency Agreement, dated as of March 17, 1997, by and between the Company and the Placement Agent. NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Issuance of Warrants; Form of Warrant. On November 20, 1997 (the "Issue Date") the Company shall issue, sell and deliver the Warrants to the Placement Agent or its bona fide officers or principals. The form of the Warrant and of the form of Election to Purchase to be attached thereto shall be substantially as set forth on Exhibit A attached hereto. The Warrants shall be executed on behalf of the Company by the manual or facsimile signature of the present or any future Chairman or Co-Chairman, President or any Vice President of the Company, under its corporate seal, affixed or in facsimile, and attested by the manual or facsimile signature of the present or any future Secretary or Assistant Secretary of the Company. 2. Registration. The Warrants shall be numbered and shall be registered in a Warrant register (the "Warrant Register"). The Company shall be entitled to treat the registered holder of any Warrant on the Warrant Register as the owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in such Warrant on the part of any other person, and shall not be liable for any registration or transfer of Warrants which are registered or are to be registered in the name of a fiduciary or the nominee of a fiduciary unless made with the actual knowledge that a fiduciary or nominee is committing a breach of trust in requesting such registration or transfer, or with such knowledge of such facts that its participation therein amounts to bad faith. The Warrants shall be registered initially in the name of the Placement Agent in such denominations as the Placement Agent may request in writing to the Company; provided, however, that the Placement Agent may designate that all or a portion of the Warrants be issued in varying amounts directly to its bona fide officers or principals and not to itself. Such designation will only be made by the Placement Agent if it determines that such issuances would not violate the interpretation of the Board of Governors of the National Association of Securities Dealers, Inc. (the "NASD"), relating to the review of corporate financing arrangements. 3. Transfer of Warrants. The Holder of a Warrant Certificate, by its acceptance thereof, acknowledges that the Warrants are "restricted securities" which have not been 1 registered under the Securities Act of 1933, as amended (the "Securities Act"), and represents that the Warrants are being acquired as an investment and not with a view to the distribution thereof and will not transfer such Warrants, except to bona fide officers, directors, shareholders, principals, employees or registered representatives of the Holder upon written request to the Company delivered in accordance with Section 12 hereof and upon delivery of the Warrant Certificate duly endorsed by the Holder or by his duly authorized attorney or representative, or accompanied by proper evidence of succession, assignment or authority to transfer. In all cases of transfer by an attorney, the original power of attorney, duly approved, or an official copy thereof, duly certified, shall be deposited with the Company. In case of transfer by executors, administrators, guardians or other legal representatives, duly authenticated evidence of their authority shall be produced, and may be required to be deposited with the Company in its discretion. Upon any registration of transfer, the Company shall deliver a new Warrant or Warrants to the persons entitled thereto. The Warrants may be exchanged at the option of the Holder thereof for other Warrants of different denominations, of like tenor and representing in the aggregate the right to purchase a like number of shares of Common Stock upon surrender to the Company or its duly authorized agent. The Company may require payment of a sum sufficient to cover all taxes and other governmental charges that may be imposed in connection with any voluntary transfer, exchange or other disposition of the Warrants. Notwithstanding the foregoing, the Company shall have no obligation to cause Warrants to be transferred on its books to any person, if such transfer would violate the Securities Act or applicable state securities laws. 4. Exercise of Warrants. (a) Term of Warrants; Exercise of Warrants. Each Warrant entitles the registered owner thereof to purchase one Share at a purchase price equal to $2.00 per Share (as adjusted from time to time pursuant to the provisions hereof, the "Exercise Price"). The Exercise Price and the Shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 8 of this Agreement. Subject to the provisions of this Agreement, each Holder shall have the right, which may be exercised as set forth in such Warrants, to purchase from the Company (and the Company shall issue and sell to such Holder) the number of fully paid and nonassessable shares (rounded up to the nearest full share) specified in such Warrants, upon surrender to the Company, or its duly authorized agent, of such Warrants, with the form of Election to Purchase attached thereto duly completed and signed, with signatures guaranteed by a member firm of a national securities exchange, a commercial bank (not a savings bank or savings and loan association) or trust company located in the United States or a member of the NASD and upon payment to the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 8 of this Agreement, for the number of Shares in respect of which such Warrants are then exercised. Payment of such Exercise Price may be made in cash or by certified check or official bank check payable to the order of the Company. No adjustment shall be made for any dividends on any Shares issuable upon exercise of a Warrant. Upon each surrender of Warrants and 2 payment of the Exercise Price as aforesaid, the Company shall issue and cause to be delivered with all reasonable dispatch (and in no event more than five business days from the date of each such surrender and payment) to or upon the written order of the Holder of such Warrants and in such name or names as such Holder may designate, a certificate or certificates for the number of full Shares so purchased upon the exercise of such Warrants. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Shares as of the date of the surrender of Warrants and payment of the Exercise Price as aforesaid; provided, however, that if, at the date of surrender of such Warrants and payment of such Exercise Price, the transfer books for the Common Stock or other class of securities issuable upon the exercise of such Warrants shall be closed, the certificates for the Shares shall be issuable as of the date on which such books shall next be opened and until such date the Company shall be under no duty to deliver any certificate for such Shares; provided, further, however, that the transfer books of record, unless otherwise required by law, shall not be closed at any one time for a period longer than twenty (20) days. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Holder(s) thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the Shares issuable upon such exercise, a new Warrant or Warrants will be issued for the remaining number of Shares specified in the Warrant so surrendered. (b) Exercise by Surrender of Warrant. In addition to the method of payment set forth in subsection (a) above and in lieu of any cash payment required thereunder, the Holder of the Warrants shall have the right at any time and from time to time to exercise the Warrants in full or in part by surrendering the Warrant in the manner specified in the Warrant in exchange for the number of Shares equal to the product of (x) the number of shares as to which the Warrants are being exercised multiplied by (y) a fraction, the numerator of which is the Market Price (as defined below) of the Shares less the Exercise Price and the denominator of which is such Market Price. Solely for the purposes of this paragraph, Market Price shall be the highest closing price of the Common Stock as determined over the five (5) trading-day period preceding the date on which the Election to Purchase is sent to the Company. Upon each surrender of Warrants, the Company shall issue and cause to be delivered with all reasonable dispatch (and in no event more than three business days from the date of each such surrender) to or upon the written order of the Holder of such Warrants and in such name or names as such Holder may designate, a certificate or certificates for the number of full Shares due such Holder as calculated pursuant to the foregoing formula. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Holder(s) thereof, either in full or from time to time in part 3 and, in the event that any Warrant is exercised in respect of less than all of the Shares issuable upon such exercise, a new Warrant or Warrants will be issued for the remaining number of Shares specified in the Warrant so surrendered. 5. Payment of Taxes. The Company will pay all documentary stamp taxes, if any, attributable to the issuance of Shares upon the exercise of Warrants; provided, however, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issue or delivery of any certificates for Shares in a name other than that of the Holder of Warrants in respect of which such Shares are issued. 6. Mutilated or Missing Warrants. In case any of the Warrants shall be mutilated, lost, stolen or destroyed, the Company shall issue and deliver in exchange and substitution for and upon cancellation of the mutilated Warrant, or in lieu of and substitution for the Warrant lost, stolen or destroyed, a new Warrant of like tenor and representing an equivalent right or interest, but only upon receipt of evidence reasonably satisfactory to the Company of such mutilation, loss, theft or destruction of such Warrant and indemnity, if requested, reasonably satisfactory to the Company. An applicant for such substitute Warrants shall also comply with such other reasonable regulations and pay such other reasonable charges and expenses as the Company may prescribe. 7. Reservation of Shares, etc. There have been reserved, and the Company shall at all times keep reserved, out of the authorized and unissued Common Stock of the Company, a number of shares of Common Stock sufficient to provide for the exercise of the rights of purchase represented by the outstanding Warrants. American Stock Transfer & Trust Co., transfer agent for the Common Stock (the "Transfer Agent"), and every subsequent transfer agent, if any, for the Company's securities issuable upon the exercise of the Warrants will be irrevocably authorized and directed at all times to reserve such number of authorized and unissued shares as shall be required for such purpose. The Company will keep a copy of this Agreement on file with the Transfer Agent and with every subsequent transfer agent for any shares of the Company's securities issuable upon the exercise of the Warrants. The Company will supply the Transfer Agent or any subsequent transfer agent with duly executed certificates for such purpose. All Warrants surrendered in the exercise of the rights thereby evidenced shall be canceled, and such canceled Warrants shall constitute sufficient evidence of the number of Shares that have been issued upon the exercise of such Warrants. 8. Adjustments of Exercise Price and Number of Shares. The Exercise Price and the number and kind of securities issuable upon exercise of each Warrant shall be subject to adjustment from time to time upon the happening of certain events, as follows: (a) In case the Company shall (i) declare a dividend on its Common Stock in shares of Common Stock or make a distribution in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock, (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock or (iv) issue 4 by reclassification of its shares of Common Stock other securities of the Company (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), the number of Shares purchasable upon exercise of each Warrant immediately prior thereto shall be adjusted so that the Holder of each Warrant shall be entitled to receive the kind and number of Shares or other securities of the Company which he would have owned or have been entitled to receive after the happening of any of the events described above, had such Warrant been exercised immediately prior to the happening of such event or any record date with respect thereto. An adjustment made pursuant to this paragraph (a) shall become effective immediately after the effective date of such event retroactive to immediately after the record date, if any, for such event. (b) In case the Company shall issue rights, options or warrants to all holders of its shares of Common Stock, without any charge to such holders, entitling them (for a period expiring within 45 days after the record date mentioned below in this paragraph (b)) to subscribe for or to purchase shares of Common Stock at a price per share that is lower at the record date mentioned below than the then current market price per share of Common Stock (as defined in paragraph (d) below), the number of Shares thereafter purchasable upon exercise of each Warrant shall be determined by multiplying the number of Shares theretofore purchasable upon exercise of each Warrant by a fraction, of which the numerator shall be the number of shares of Common Stock outstanding on such record date plus the number of additional shares of Common Stock offered for subscription or purchase, and of which the denominator shall be the number of shares of Common Stock outstanding on such record date plus the number of shares which the aggregate offering price of the total number of shares of Common Stock so offered would purchase at the then current market price per share of Common Stock. Such adjustment shall be made whenever such rights, options or warrants are issued, and shall become effective retroactively to immediately after the record date for the determination of shareholders entitled to receive such rights, options or warrants. (c) In case the Company shall distribute to all holders of its shares of Common Stock shares of stock other than Common Stock or evidences of its indebtedness or assets (excluding cash dividends payable out of consolidated earnings or retained earnings and dividends or distributions referred to in paragraph (a) above) or rights, options or warrants or convertible or exchangeable securities containing the right to subscribe for or purchase shares of Common Stock (excluding those referred to in paragraph (b) above), then in each case the number of Shares thereafter issuable upon the exercise of each Warrant shall be determined by multiplying the number of Shares theretofore issuable upon the exercise of each Warrant, by a fraction, of which the numerator shall be the current market price per share of Common Stock (as defined in paragraph (d) below) on the record date mentioned below in this paragraph (c), and of which the denominator shall be the current market price per share of Common Stock on such record date, less the then fair value (as determined in good faith by the Board of Directors of the Company, whose determination shall be conclusive) of the portion of the 5 shares of stock other than Common Stock or assets or evidences of indebtedness so distributed or of such subscription rights, options or warrants, or of such convertible or exchangeable securities applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made, and shall become effective on the date of distribution retroactive to immediately after the record date for the determination of shareholders entitled to receive such distribution. (d) For the purpose of any computation under paragraphs (b) and (c) of this Section 8, the current market price per share of Common Stock at any date (the "Current Market Price") shall be the average of the daily closing bid prices for the five (5) consecutive trading days before the date of such computation. The closing price for each day shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the closing bid and asked prices for such day, in either case on the principal national securities exchange on which the shares are listed or admitted to trading, or if they are not listed or admitted to trading on any national securities exchange, but are traded in the over-the-counter market, the closing sale price of the Common Stock or, in case no sale is publicly reported, the average of the representative closing bid and asked quotations for the Common Stock on the Nasdaq system or any comparable system, or if the Common Stock is not listed on the Nasdaq system or a comparable system, the closing sale price of the Common Stock or, in case no sale is publicly reported, the average of the closing bid and asked prices as furnished by two members of the NASD selected from time to time by the Company for that purpose. (e) No adjustment in the number of Shares purchasable hereunder shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in the number of Shares purchasable upon the exercise of each Warrant; provided, however, that any adjustments which by reason of this paragraph (e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment but not later than three years after the happening of the specified event or events. All calculations shall be made to the nearest one thousandth of a share. (f) Whenever the number of Shares purchasable upon the exercise of each Warrant is adjusted, as herein provided, the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to such adjustment by a fraction, of which the numerator shall be the number of Shares purchasable upon the exercise of each Warrant immediately prior to such adjustment, and of which the denominator shall be the number of Shares so purchasable immediately thereafter. 6 (g) For the purpose of this Section 8, the term "shares of Common Stock" shall mean (i) the class of stock designated as the Common Stock of the Company at the date of this Agreement or (ii) any other class of stock resulting from successive changes or reclassifications of such shares consisting solely of changes in par value, or from no par value to par value, or from par value to no par value. In the event that at any time, as a result of an adjustment made pursuant to paragraph (a) above, the Holders shall become entitled to purchase any shares of capital stock of the Company other than shares of Common Stock, thereafter the number of such other shares so purchasable upon exercise of each Warrant and the Exercise Price of such shares shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Shares contained in paragraphs (a) through (f) inclusive, and paragraphs (h) through (m), inclusive, of this Section 8, and the provisions of Sections 4, 5, 7 and 10, with respect to the Shares, shall apply on like terms to any such other shares. (h) Upon the expiration of any rights, options, warrants or conversion rights or exchange privileges, if any thereof shall not have been exercised, the Exercise Price and the number of shares of Common Stock purchasable upon the exercise of each Warrant shall, upon such expiration, be readjusted and shall thereafter be such as it would have been had it originally been adjusted (or had the original adjustment not been required, as the case may be) as if (i) the only shares of Common Stock so issued were the shares of Common Stock, if any, actually issued or sold upon the exercise of such rights, options, warrants or conversion rights or exchange privileges and (ii) such shares of Common Stock, if any, were issued or sold for the consideration actually received by the Company upon such exercise plus the aggregate consideration, if any, actually received by the Company for the issuance, sale or grant of all of such rights, options, warrants or conversion rights or exchange privileges whether or not exercised; provided, however, that no such readjustment shall have the effect of decreasing the number of shares issuable upon the exercise of each Warrant or increasing the Exercise Price by an amount in excess of the amount of the adjustment initially made in respect of the issuance, sale or grant of such rights, options, warrants or conversion rights or exchange privileges. (i) The Company may, at its option at any time during the term of the Warrants, reduce the then current Exercise Price to any amount deemed appropriate by the Board of Directors of the Company. 7 (j) Whenever the number of Shares issuable upon the exercise of each Warrant or the Exercise Price of such Shares is adjusted, as herein provided, the Company shall promptly mail by first class mail, postage prepaid, to each Holder, notice of such adjustment or adjustments. The Company shall retain a firm of independent public accountants (who may be the regular accountants employed by the Company) to make any computation required by this Section 8 and shall cause such accountants to prepare a certificate setting forth the number of Shares issuable upon the exercise of each Warrant and the Exercise Price of such Shares after such adjustment, setting forth a brief statement of the facts requiring such adjustment and setting forth the computation by which such adjustment was made. Such certificate shall be conclusive as to the correctness of such adjustment and each Holder shall have the right to inspect such certificate during reasonable business hours. (k) Except as provided in this Section 8, no adjustment in respect of any dividends shall be made during the term of a Warrant or upon the exercise of a Warrant. (l) In case of any consolidation of the Company with or merger of the Company with or into another corporation or in case of any sale or conveyance to another corporation of the property of the Company as an entirety or substantially as an entirety, the Company or such successor or purchasing corporation (or an affiliate of such successor or purchasing corporation), as the case may be, agrees that each Holder shall have the right thereafter upon payment of the Exercise Price in effect immediately prior to such action to purchase upon exercise of each Warrant the kind and amount of shares and other securities and property (including cash) which he would have owned or have been entitled to receive after the happening of such consolidation, merger, sale or conveyance had such Warrant been exercised immediately prior to such action except as may be necessary to account for such a transaction as a "pooling of interests," in which case the Warrant may be exchanged for or converted into a warrant to purchase common stock of the surviving corporation on economically equivalent terms. The provisions of this paragraph (l) shall similarly apply to successive consolidations, mergers, sales or conveyances. (m) Notwithstanding any adjustment in the Exercise Price or the number or kind of shares purchasable upon the exercise of the Warrants pursuant to this Agreement, certificates for Warrants issued prior or subsequent to such adjustment may continue to express the same price and number and kind of Shares as are initially issuable pursuant to this Agreement. 9. Reserved. 8 10. Registration Rights. (a) Demand Registration Rights. The Company covenants and agrees with the Placement Agent and any other or subsequent Holders of the Registrable Securities (as defined in paragraph (f) of this Section 10) that, subject to the availability of audited financial statements which would comply with Regulation S-X under the Securities Act, upon written request of the then Holder(s) of at least a majority of the Warrants or the Registrable Securities, or both, which were originally issued to the Placement Agent or its designees, made at any time within the period commencing on the Issue Date and ending five years after the Issue Date, the Company will file as promptly as practicable and, in any event, within 60 days after receipt of such written request, at its expense (other than the fees of counsel and sales commissions for such Holders), no more than once, a post-effective amendment (the "Amendment") to a registration statement, or a new registration statement which shall be on Form S-3 if the Company is then eligible to use Form S-3, or a Regulation A Offering Statement (an "Offering Statement") under the Securities Act, registering or qualifying the Registrable Securities for sale. Within fifteen (15) days after receiving any such notice, the Company shall give notice to the other Holders of the Registrable Securities advising that the Company is proceeding with such Amendment, registration statement or Offering Statement and offering to include therein the Registrable Securities of such Holders. The Company shall not be obligated to any such other Holder unless such other Holder shall accept such offer by notice in writing to the Company within ten (10) days thereafter. The Company will use its best efforts, through its officers, directors, auditors and counsel in all matters necessary or advisable, to file and cause to become effective such Amendment, registration statement or Offering Statement as promptly as practicable and for a period of nine months thereafter to reflect in the Amendment, registration statement or Offering Statement financial statements which are prepared in accordance with Section 1 0(a)(3) of the Securities Act and any facts or events arising that, individually, or in the aggregate, represent a fundamental and/or material change in the information set forth in the Amendment, registration statement or Offering Statement to enable any Holders of the Warrants to either sell such Warrants or to exercise such Warrants and sell Shares, or to enable any holders of Shares to sell such Shares, during said nine-month period. If any registration pursuant to this paragraph (a) is an underwritten offering, the Holders of a majority of the Registrable Securities to be included in such registration shall be entitled to select the underwriter or managing underwriter (in the case of a syndicated offering) of such offering, subject to the Company's approval which shall not be unreasonably withheld. (b) Piggyback Registration Rights. The Company covenants and agrees with the Placement Agent and any other Holders or subsequent Holders of the Registrable Securities that if, at any time within the period commencing on the Issue Date and ending five years after the Issue Date, it proposes to file a registration statement or Offering Statement with respect to any class of equity or equity-related security under the 9 Securities Act in a primary registration on behalf of the Company and/or in a secondary registration on behalf of holders of such securities and the registration form or Offering Statement to be used may be used for registration of the Registrable Securities, the Company will give prompt written notice (which, in the case of a registration statement or notification pursuant to the exercise of demand registration rights other than those provided in Section 10(a) of this Agreement, shall be within ten (10) business days after the Company's receipt of notice of such exercise and, in any event, shall be at least 30 days prior to such filing) to the Holders of Registrable Securities (regardless of whether some of the Holders shall have theretofore availed themselves of the right provided in Section 10(a) of this Agreement) at the addresses appearing on the records of the Company of its intention to file a registration statement or Offering Statement and will offer to include in such registration statement or Offering Statement all but not less than 20% of the Registrable Securities and limited, in the case of a Regulation A offering, to the amount of the available exemption, subject to paragraphs (i) and (ii) of this paragraph (b), such number of Registrable Securities with respect to which the Company has received written requests for inclusion therein within ten (10) days after the giving of notice by the Company. All registrations requested pursuant to this paragraph (b) are referred to herein as "Piggyback Registrations". All Piggyback Registrations pursuant to this paragraph (b) will be made solely at the Company's expense. This paragraph is not applicable to a registration statement filed by the Company with the Commission on Form S-4 or S-8 or any successor forms. (i) Priority on Primary Registrations. If a Piggyback Registration includes an underwritten primary registration on behalf of such Company and the underwriter(s) for such offering determines in good faith and advises the Company in writing that in its/their opinion the number of Registrable Securities requested to be included in such registration exceeds the number that can be sold in such offering without materially adversely affecting the distribution of such securities by the Company, the Company will include in such registration (A) first, the securities that the Company proposes to sell and (B) second, the Registrable Securities requested to be included in such registration, apportioned pro rata among the Holders of Registrable Securities, provided, however, the Company will use its best efforts to include not less than 20% of the Registrable Securities, and (C) third, securities of the holders of other securities requesting registration. (ii) Priority on Secondary Registrations. If a Piggyback Registration consists only of an underwritten secondary registration on behalf of holders of securities of the Company (other than pursuant to Section 10(a)), and the underwriter(s) for such offering advises the Company in writing that in its/their opinion the number of Registrable Securities requested to be included in such registration exceeds the number which can be sold in such offering without materially adversely affecting the distribution of such securities by the Company, the Company will include in such registration (A) first, the securities requested to 10 be included therein by the holders requesting such registration and the Registrable Securities requested to be included in such registration, pro rata among all such holders on the basis of the number of shares requested to be included by each such holder, provided, however, the Company will use its best efforts to include not less than 20% of the Registrable Securities, and (B) second, other securities requested to be included in such registration. Notwithstanding the foregoing, if any such underwriter shall determine in good faith and advise the Company in writing that the distribution of the Registrable Securities requested to be included in the registration concurrently with the securities being registered by the Company would materially adversely affect the distribution of such securities by the Company, then the Holders of such Registrable Securities shall delay their offering and sale for such period ending on the earliest of (1) 90 days following the effective date of the Company's registration statement, (2) the day upon which the underwriting syndicate, if any, for such offering shall have been disbanded or, (3) such date as the Company, managing underwriter and Holders of Registrable Securities shall otherwise agree. In the event of such delay, the Company shall file such supplements, post-effective amendments and take any such other steps as may be necessary to permit such Holders to make their proposed offering and sale for a period of 120 days immediately following the end of such period of delay. If any party disapproves of the terms of any such underwriting, it may elect to withdraw therefrom by written notice to the Company, the underwriter, and the Placement Agent. Notwithstanding the foregoing, the Company shall not be required to file a registration statement to include Shares pursuant to Sections 10(a) or 10(b) if independent counsel, reasonably satisfactory to counsel for the Company and counsel for the Placement Agent, renders an opinion to the Company that the Shares proposed to be disposed of may be transferred pursuant to the provisions of Rule 144 under the Securities Act or otherwise without registration under the Securities Act. (c) Other Registration Rights. In addition to the rights above provided, the Company will cooperate with the then Holders of the Registrable Securities in preparing and signing any registration statement or Offering Statement, in addition to the registration statements and Offering Statements discussed above, required in order to sell or transfer the Registrable Securities and will supply all information required therefor, but such additional registration statement or Offering Statement, shall be at the then Holders' cost and expense; provided, however, that if the Company elects to register or qualify additional shares of Common Stock, the cost and expense of such registration statement or Offering Statement will be pro rated between the Company and the Holders of the Registrable Securities according to the aggregate sales price of the securities being issued. Notwithstanding the foregoing, the Company will not be required to file a registration statement or Offering Statement pursuant to this paragraph (c), (i) at a time when the audited financial statements required to be included therein are not available, 11 which time shall be limited to the period commencing 45 days after the end of the Company's last fiscal year and ending 90 days after the end of such fiscal year, (ii) within 90 days after completion of a public offering by the Company of any of its Common Stock or equity-related securities or (iii) if it would adversely impact the Company in its capital raising plans or otherwise (in either of which case filing may be delayed no longer than 90 days). (d) Action to be Taken by the Company. In connection with the registration of Registrable Securities in accordance with paragraphs (a), (b) or (c) of this Section 10, the Company agrees to: (i) Bear the expenses of any registration or qualification under paragraphs (a) or (b) of this Section 10, including, but not limited to, legal, accounting and printing fees; provided, however, that in no event shall the Company be obligated to pay (A) any fees and disbursements of special counsel for Holders of Registrable Securities, or (B) any underwriters' discount or commission in respect of such Registrable Securities, (C) any stock transfer taxes attributable to the sale of the Registrable Securities, or (D) upon the exercise of any demand registration right provided for in paragraph (a) of this Section 10, the cost of any liability or similar insurance required by an underwriter, to the extent that such costs are attributable solely to the offering of such Registrable Securities, payment of which shall, in each case, be the sole responsibility of the Holders of the Registrable Securities. (ii) Use its best efforts to register or qualify the Registrable Securities for offer or sale under state securities or Blue Sky laws of such jurisdictions in which the Placement Agent or such Holders shall reasonably request, provided, however, that no qualification shall be required in any jurisdiction where, as a result thereof, the Company would be subject to service of general process or to taxation as a foreign corporation doing business in such jurisdiction to which it is not then subject, and to do any and all other acts and things which may be necessary or advisable to enable the holders to consummate the proposed sale, transfer or other disposition of such securities in any jurisdiction; and (iii) Enter into a cross-indemnity agreement, in customary form, with each underwriter, if any, and each holder of securities included in such Amendment, registration statement or Offering Statement. (e) Action to be Taken by the Holders. In connection with the registration of Registrable Securities in accordance with paragraphs (a), (b) or (c) of this Section 10, the Company's obligation shall be conditioned as to each such public offering upon a timely receipt by the Company in writing of: 12 (i) Information as to the terms of such public offering furnished by or on behalf of each Holder intending to make a public offering of his, her or its Registrable Securities; and (ii) Such other information as the Company may reasonably require from such Holders, or any underwriter for any of them, for inclusion in such registration statement or Notification on Form 1-A. (f) For purposes of this Section 10, (i) the term "Holder" shall include holders of Shares, and (ii) the term "Registrable Securities" shall mean the Shares, if issued. (g) The Company hereby agrees to file a registration statement registering for resale all of the Shares as soon as practicable after the Issue Date, and further agrees that such registration will occur without further notice on the part of the Company and without further action on the part of the original Holder of the Warrants. 11. Notices to Holders. (a) Nothing contained in this Agreement or in any of the Warrants shall be construed as conferring upon the Holders thereof the right to vote or to receive dividends or to consent or to receive notice as shareholders in respect of the meetings of shareholders or the election of directors of the Company or any other matter, or any rights whatsoever as shareholders of the Company; provided, however, that in the event that a meeting of shareholders shall be called to consider and take action on a proposal for the voluntary dissolution of the Company, other than in connection with a consolidation, merger or sale of all, or substantially all, of its property, assets, business and good will as an entirety, then and in that event the Company shall cause a notice thereof to be sent by first-class mail, postage prepaid, at least twenty (20) days prior to the date fixed as a record date or the date of closing the transfer books in relation to such meeting, to each registered Holder of Warrants at such Holder's address appearing on the Warrant Register; but failure to mail or to receive such notice or any defect therein or in the mailing thereof shall not affect the validity of any action taken in connection with such voluntary dissolution. (b) In the event the Company intends to make any distribution on its Common Stock (or other securities which may be issuable in lieu thereof upon the exercise of Warrants), including, without limitation, any such distribution to be made in connection with a consolidation or merger in which the Company is the continuing corporation, or to issue subscription rights or warrants to holders of its Common Stock, the Company shall cause a notice of its intention to make such distribution to be sent by first-class mail, postage prepaid, at least twenty (20) days prior to the date fixed as a record date or the date of closing the transfer books in relation to such distribution, to each registered Holder of Warrants at such Holder's address appearing on the Warrant 13 Register, but failure to mail or to receive such notice or any defect therein or in the mailing thereof shall not affect the validity of any action taken in connection with such distribution. 12. Notices. Any notice pursuant to this Agreement to be given or made by the Holder of any Warrant and/or the holder of any Share to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed as follows or to such other address as the Company may designate by notice given in accordance with this Section 12, to the Holders of Warrants and/or the holders of Shares: MEDIA LOGIC, INC. 310 South Street Plainville, MA 02762 Attention: Chief Financial Officer Notices or demands authorized by this Agreement to be given or made by the Company to or on the Holder of any Warrant and/or the holder of any Share shall be sufficiently given or made (except as otherwise provided in this Agreement) if sent by first-class mail, postage prepaid, addressed to such Holder or such holder of Shares at the address of such Holder or such holder of Shares as shown on the Warrant Register or the books of the Company, as the case may be. 13. Governing Law. This Agreement and each Warrant issued hereunder shall be governed by and construed in accordance with the substantive laws of the State of New York. The Company hereby agrees to accept service of process by notice given to it pursuant to the provisions of Section 12. 14. Counterparts. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original; but such counterparts together shall constitute but one and the same instrument. [Signatures appear on the following page] 14 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day, month and year first above written. MEDIA LOGIC, INC. By: /s/ William E. Davis, Jr. ------------------------------- Name: William E. Davis, Jr. Title: Chief Executive Officer ROCHON CAPITAL GROUP, LTD. By: /s/ Phillip L. Neiman ------------------------------- Name: Phillip L. Neiman Title: President 15 EXHIBIT A No. 1 200,000 Warrants MEDIA LOGIC, INC. Warrant Certificate THIS CERTIFIES THAT for value received Rochon Capital Group, Ltd., or registered assigns, is the owner of the number of Warrants set forth above, each of which entitles the owner thereof to purchase one fully paid and nonassessable share of common stock, $.01 par value (the "Common Stock"), of MEDIA LOGIC, INC., a Massachusetts corporation (the "Company"), at the purchase price equal to the Exercise Price, as defined in the Warrant Agreement, dated as of October 29, 1997 (the "Warrant Agreement"), between the Company and Rochon Capital Group, Ltd., upon presentation and surrender of this Warrant Certificate with the Form of Election to Purchase duly executed. The number of Warrants evidenced by this Warrant Certificate (and the number of shares which may be purchased upon exercise thereof, rounded up to the nearest full share) set forth above, and the Exercise Price per share set forth above, are the number and Exercise Price as of the date of original issuance of the Warrants, based on the shares of Common Stock of the Company as constituted at such date. As provided in the Warrant Agreement, the Exercise Price and the number or kind of shares which may be purchased upon the exercise of the Warrants evidenced by this Warrant Certificate are, upon the happening of certain events, subject to modification and adjustment. This Warrant Certificate is subject to, and entitled to the benefits of, all of the terms, provisions and conditions of the Warrant Agreement, which Warrant Agreement is hereby incorporated herein by reference and made a part hereof and to which Warrant Agreement reference is hereby made for a full description of the rights, limitations of rights, duties and immunities hereunder of the Company and the holders of the Warrant Certificates. Copies of the Warrant Agreement are on file at the principal office of the Company. This Warrant Certificate, with or without other Warrant Certificates, upon surrender at the principal office of the Company, may be exchanged for another Warrant Certificate or Warrant Certificates of like tenor and date evidencing Warrants entitling the holder to purchase a like aggregate number of shares of Common Stock as the Warrants evidenced by the Warrant Certificate or Warrant Certificates surrendered entitled such holder to purchase. If this Warrant Certificate shall be exercised in part, the holder hereof shall be entitled to receive upon surrender hereof another Warrant Certificate or Warrant Certificates for the number of whole Warrants not exercised. No holder of this Warrant Certificate shall be entitled to vote, receive dividends, subscription rights or be deemed the holder of Common Stock or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose, nor shall 1 anything contained in the Warrant Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issue of stock, reclassification of stock, change of par value or change of stock to no par value, consolidation, merger, conveyance, or otherwise) or, except as provided in the Warrant Agreement, to receive notice of meetings, until the Warrant or Warrants evidenced by this Warrant Certificate shall have been exercised and the Shares shall have become deliverable as provided in the Warrant Agreement. If this Warrant shall be surrendered for exercise within any period during which the transfer books for the Company's Common Stock or other class of stock purchasable upon the exercise of this Warrant are closed for any purpose, the Company shall not be required to make delivery of certificates for shares purchasable upon such exercise until the date of the reopening of said transfer books, provided, however, that such books shall not be closed for longer than a 20-day period. IN WITNESS WHEREOF, THE COMPANY has caused the signature (or facsimile signature) of its President and its Secretary or Assistant Secretary to be printed hereon and its corporate seal (or facsimile) to be printed hereon. Dated: October 29, 1997 MEDIA LOGIC, INC. By: ------------------------------- Name: William E. Davis, Jr. Title: Chief Executive Officer Attest: By: --------------------- Name: Title: 2 FORM OF ASSIGNMENT (To be executed by the registered holder if such holder desires to transfer the Warrant Certificates.) FOR VALUE RECEIVED hereby sells, assigns and transfers unto this Warrant Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint , to transfer the within Warrant Certificate on the books of the within-named Company, with full power of substitution. Dated: , ------------------ _______________________________ Signature Signature Guaranteed: NOTICE The signature of the foregoing Assignment must correspond to the name as written upon the face of this Warrant Certificate in every particular, without alteration or enlargement or any change whatsoever. 3 -----END PRIVACY-ENHANCED MESSAGE-----