Exhibit 99.2
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY NOT BE SOLD,
OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THIS SECURITY UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.
Right to Purchase 410,870
Shares of Common Stock
of Media Logic, Inc.
MEDIA LOGIC, INC.
Common Stock Purchase Warrant
MEDIA LOGIC, INC., a Massachusetts corporation (the "Company"), hereby
certifies that, for value received, DIGITAL MEDIA & COMMUNICATIONS L.P., or its
successors or registered assigns, is entitled, subject to the terms set forth
below, to purchase from the Company at any time or from time to time before 5:00
p.m., Boston time, on the Expiration Date (as hereinafter defined), that number
of fully paid and non-assessable shares of Common Stock of the Company as shall
be equal to the Warrant Number (as hereinafter defined), at an initial purchase
price per share of $3.00 (the "Purchase Price"). The Warrant Number and the
Purchase Price are subject to adjustment as provided in this Warrant.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include Media Logic, Inc., and any
corporation that shall succeed to or assume the obligations of Media
Logic, Inc. hereunder.
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(b) The term "Common Stock" means the Company's common stock,
$.01 par value per share and any other securities into which or for
which any of such securities may be converted or exchanged pursuant to
a plan of recapitalization, reorganization, merger, sale of assets or
otherwise.
(c) The term "Other Securities" refers to any stock (other than
Common Stock) and other securities of the Company or any other person
(corporate or otherwise) which the holder of the Warrant at any time
shall be entitled to receive, or shall have received, on the exercise
of the Warrant, in lieu of or in addition to Common Stock, or which at
any time shall be issuable or shall have been issued in exchange for
or in replacement of Common Stock or Other Securities pursuant to
Section 4 or otherwise.
(d) The term "Expiration Date" means September 22, 2001.
(e) The term "Warrant Number" shall mean, subject to adjustment
pursuant to Sections 3, 4 or 5 hereof, four hundred ten thousand eight
hundred seventy (410,870) shares of Common Stock.
(f) The term "Penalty Shares" is defined in Section 6.
(g) The term "Warrant Shares" refers to any shares of Common
Stock issuable upon the exercise of the Warrants.
(h) The term "Registrable Securities" refers to the Warrant
Shares and the Penalty Shares; provided that Warrant Shares and
Penalty Shares cease to be Registrable Securities when they have been
effectively registered under Section 5 of the Securities Act of 1933,
as amended (the "Securities Act") and disposed of in accordance with
any Registration Statement.
(i) The term "Registration Statement" means any registration
statement under the Securities Act of the Company which, in accordance
with Section 6 hereof, covers any of the Registrable Securities
pursuant to the provisions of the Warrant.
(j) The term "Penalty Commencement Date" means the earlier of
(i) the fifth day after the Securities and Exchange Commission (the
"Commission") notifies the Company of the Commission's willingness to
declare the Registration Statement effective, or (ii) the first
business day after the 180th calendar day after the date of the
Warrant.
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1. Exercise of Warrant.
(a) Method of Exercise. This Warrant may be exercised in full or
in part at any time or from time to time until the Expiration Date by
the holder hereof by surrender of this Warrant and the subscription
form annexed hereto (duly executed) by such holder, to the Company at
its principal office, accompanied by payment, in cash or by certified
or official bank check payable to the order of the Company in the
amount obtained by multiplying (a) the number of shares of Common
Stock designated by the holder in the subscription form by (b) the
Purchase Price then in effect. In addition to the method of payment
set forth above and in lieu of any cash payment required thereunder,
the holder may at any time and from time to time until the Expiration
Date exercise the Warrant in full or in part by surrendering the
Warrant in the manner specified above in exchange for a number of
shares of Common Stock equal to the product of (x) the number of
shares as to which the Warrant is being exercised multiplied by (y) a
fraction, the numerator of which is the Fair Market Value (as defined
below) of one share of Common Stock less the Purchase Price and the
denominator of which is such Fair Market Value of one share of Common
Stock.
(b) Partial Exercise. On any partial exercise, the Company at
its expense will forthwith issue and deliver to or upon the order of
the holder hereof a new Warrant or Warrants of like tenor, in the name
of the holder hereof or as such holder (upon payment by such holder of
any applicable transfer taxes) may request, providing in the aggregate
on the face or faces thereof for the number of shares of Common Stock
for which such Warrant or Warrants may still be exercised.
(c) Definition. Fair Market Value of a share of Common Stock
as of a particular date (the "Determination Date") shall mean the Fair
Market Value of a share of the Company's Common Stock. Fair Market
Value of a share of Common Stock as of a Determination Date shall
mean:
(i) If the Company's Common Stock is traded on an exchange or is
quoted on the Nasdaq National Market ("Nasdaq"), then the closing or
last sale price, respectively, reported for the last business day (on
which a sale in the Common Stock was made) immediately preceding the
Determination Date.
(ii) If the Company's Common Stock is not traded on an exchange
or on Nasdaq but is traded in the over-the-counter market, then the
mean of the closing bid and asked prices reported for the last
business day (on which a sale in the Common Stock was made)
immediately preceding the Determination Date.
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2. Delivery of Stock Certificates, etc., on Exercise. As soon as
practicable after the exercise of this Warrant, and in any event within 15
(fifteen) days thereafter, the Company at its expense (including the payment by
it of any applicable issue or stamp taxes) will cause to be issued in the name
of and delivered to the holder hereof, or as such holder (upon payment by such
holder of any applicable transfer taxes) may direct, a certificate or
certificates for the number of fully paid and nonassessable shares of Common
Stock (or Other Securities) to which such holder shall be entitled on such
exercise, in such denominations as may be requested by such holder, plus, in
lieu of any fractional share to which such holder would otherwise be entitled,
cash equal to such fraction multiplied by the then Fair Market Value of one full
share, together with any other stock or other securities and property (including
cash, where applicable) to which such holder is entitled upon such exercise
pursuant to Section 1 or otherwise. The Company agrees that the shares so
purchased shall be deemed to be issued to the holder hereof as the record owner
of the shares as of the close of business on the date on which this Warrant
shall have been delivered to the Company and payment made for such shares as
aforesaid.
3. Adjustment for Dividends in Other Stock, Property, etc.;
Reclassification, etc. In case at any time or from time to time, the holders of
Common Stock (or Other Securities) shall have received, or (on or after the
record date fixed for the determination of shareholders eligible to receive)
shall have become entitled to receive, without payment therefor,
(a) other or additional stock or other securities or property (other
than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of earnings
or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate rearrangement
other than additional shares of Common Stock (or Other Securities) issued
as a stock dividend or in a stock-split (adjustments in respect of which
are provided for in Section 5), then and in each such case the holder of
this Warrant, on the exercise hereof as provided in Section 1, shall be
entitled to receive the amount of stock and other securities and property
(including cash in the cases referred to in subdivisions (b) and (c) of
this Section 3) which such holder would hold on the date of such exercise
if on the date hereof he had been the holder of record of the number of
shares of Common Stock called for on the face of this Warrant and had
thereafter, during the period from the date hereof to and including the
date of such exercise, retained such shares and all such other or
additional stock and other securities and property (including cash in the
cases referred to in subdivisions (b) and (c) of this Section 3) receivable
by him as aforesaid during such period, giving effect to all adjustments
called for during such period by Sections 4 and 5.
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4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1 Reorganization. In case at any time or from time to time, the
Company shall (a) effect a reorganization, (b) consolidate with or merge into
any other person, or (c) transfer all or substantially all of its properties or
assets to any other person under any plan or arrangement contemplating the
dissolution of the Company, then, in each such case, the holder of this Warrant,
on the exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in lieu of the
Common Stock (or Other Securities) issuable on such exercise prior to such
consummation or such effective date, the stock and other securities and property
(including cash) to which such holder would have been entitled upon such
consummation or in connection with such dissolution, as the case may be, if such
holder had so exercised this Warrant, immediately prior thereto, all subject to
further adjustment thereafter as provided in Sections 3 and 5.
4.2 Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be delivered the stock and other securities and property (including cash, where
applicable) receivable by the holder of this Warrant after the effective date of
such dissolution pursuant to this Section 4 to the holder of a bank or trust
company having its principal office in Boston, Massachusetts as trustee for the
holder or holders of the Warrants.
4.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 4, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant.
5. Adjustment for Extraordinary Events. In the event that the Company
shall (i) issue additional shares of the Common Stock as a dividend or other
distribution on outstanding Common Stock, (ii) subdivide or reclassify its
outstanding shares of Common Stock, or (iii) combine its outstanding shares of
Common Stock into a smaller number of shares of Common Stock, then, in each such
event, the Purchase Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then Purchase Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Purchase Price then in effect.
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The Purchase Price, as so adjusted, shall be readjusted in the same manner upon
the happening of any successive event or events described herein in this Section
5. The holder of this Warrant shall thereafter, on the exercise hereof as
provided in Section 1, be entitled to receive that number of shares of Common
Stock determined by multiplying the number of shares of Common Stock which would
be issuable on such exercise as of immediately prior to such issuance by a
fraction of which (i) the numerator is the Purchase Price in effect immediately
prior to such issuance and (ii) the denominator is the Purchase Price in effect
on the date of such exercise.
6. Registration Statement: Timing of Filing, Effectiveness and Period
of Usability
Subject to the provisions of Section 7 hereof, the Company shall
prepare and file with the Commission a Registration Statement on Form S-3 or,
if the Company is not then eligible to use Form S-3, on Form S-1, registering
resales of the Registrable Securities by the holders from time to time
through the automated quotation system of the American Stock Exchange or the
facilities of any national securities exchange or the Nasdaq National Market
if the Common Stock is then listed or quoted thereon and in
privately-negotiated transactions. The Registration Statement shall register
all of the Registrable Securities. The Company will use its best efforts to
cause the Registration Statement to be declared effective by the Commission
by September 22, 1997 (the first business day beginning 180 days following
the date of this Warrant).
If the Registration Statement is not declared effective by the
Commission on or before the Penalty Commencement Date, or if at any time after
the Registration Statement is declared effective, but prior to the Expiration
Date, the Warrant Shares may not be sold pursuant to the Registration Statement
for more than 30 days during any 12-month period (whether because the
Registration Statement is no longer effective, there is a material misstatement
or omission in the Registration Statement, or otherwise) (any such period in
excess of such 30 days is hereinafter referred to as an "Unavailability
Period"), the Company will have the obligation to pay penalty payments (the
"Penalty Payments") at the rate of $200 per 5,000 Warrant Shares per month
following the Penalty Commencement Date or following the commencement of the
Unavailability Period, as the case may be, until the Registration Statement is
declared effective or may be used following an Unavailability Period. The first
Penalty Payment shall be payable on the earlier to occur of the 30th calendar
day following the Penalty Commencement Date or following the commencement of the
Unavailability Period, as the case may be, or the date the Registration
Statement is declared effective or may be used following an Unavailability
Period. Subsequent Penalty Payments shall be payable on each 30-day anniversary
of the Penalty Commencement Date or following the commencement of the
Unavailability Period, as the case may be, except if the Registration Statement
shall be declared effective prior thereto or may be used following an
Unavailability Period, in which case the subsequent Penalty Payment shall be
made concurrently with such effectiveness or date on which the Registration
Statement may be used. Any date on which a Penalty Payment is required to be
paid is referred to herein as a "Penalty Payment Date." Penalty Payments shall
be paid to the holders of record of the Warrants on each Penalty Payment Date.
With respect to Warrants which have been exercised for Shares prior to a Penalty
Payment Date, the Penalty Payment with respect to such exercised Warrants shall
be paid to the holders on
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such Penalty Payment Date of the Warrants Shares. The Company shall have the
option to pay Penalty Payments in respect of the first two Penalty Payment Dates
either in cash or in shares of Common Stock which shall be registered pursuant
to the Registration Statement (the "Penalty Shares") together with the Warrant
Shares, and Penalty Payments with respect to all subsequent Penalty Payment
Dates shall be paid by the Company solely in cash. The Penalty Payment shall
accrue and be prorated for partial months, assuming a 360-day year of twelve
30-day months. The number of Penalty Shares to be issued in payment of any
Penalty Payment shall be determined by dividing the amount of such Penalty
Payment by the average price of the Common Stock over the five (5) trading days
preceding the applicable Penalty Payment Date.
The Company will use its best efforts (i) to keep the Registration
Statement continuously effective and usable for resale of Registrable Securities
until the Expiration Date or such shorter period which will terminate when all
Warrant Shares and Penalty Shares have ceased to be Registrable Securities, and
(ii) to file with the Securities and Exchange Commission on a timely basis all
reports, notices and otherwise as the Company may be required to file under the
Securities Exchange Act of 1934, as amended.
7. Registration Procedures
In connection with the Company's obligation to file a Registration
Statement as provided in Section 6 hereof, the Company will as expeditiously as
possible:
(a) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement, and such supplements to
the Prospectus, as may be required by the rules, regulations or instructions
applicable to the registration form utilized by the Company or by the Securities
Act or rules and regulations thereunder for shelf registration or otherwise
necessary to keep the Registration Statement effective for the applicable period
and cause the Prospectus as so supplemented to be filed pursuant to Rule 424
under the Securities Act; and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the methods of
disposition by the sellers thereof set forth in such Registration Statement or
supplement to the Prospectus;
(b) notify the holders of Registrable Securities promptly, and
confirm such advice in writing,
(1) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the Registration
Statement or any post-effective amendment, when the same has become effective,
(2) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose, and
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(3) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose;
(c) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the Registration Statement at the earliest
possible moment;
(d) furnish, without charge, to each holder of Registrable
Securities, at least one conformed copy of the Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
all documents incorporated therein by reference and all exhibits (including
those incorporated by reference);
(e) deliver to Purchaser and each holder of Registrable Securities
without charge, as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as such Persons may
reasonably request; the Company consents to the use of the Prospectus or any
amendment or supplement thereto by each holder of Registrable Securities in
connection with the offering and sale of the Registrable Securities covered by
the Prospectus or any amendment or supplement thereto;
(f) use its reasonable efforts to cause the Registrable Securities
covered by the Registration Statement to be registered with or approved by such
governmental agencies or authorities as may be necessary to enable the holders
thereof to consummate the disposition of such Registrable Securities in such
jurisdictions as the holders may reasonably specify in response to inquiries to
be made by the Company, provided that the Company will not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process in any such jurisdiction where it is not then so subject;
(g) if any event shall occur as a result of which it is necessary to
amend or supplement the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered by a holder, promptly prepare a supplement or post-effective amendment
to the Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the holders of the Registrable Securities, the
Prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading;
(h) if at any time an event of the kind described in Section 10(g)
shall occur, notify the holders of Registrable Securities that the use of the
Prospectus must be discontinued (the Company will not declare any such
"black-out" periods in excess of twenty business days during any twelve month
period, unless otherwise required by law); and
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(i) on or prior to the date the Registration Statement is declared
effective by the Commission, cause all of the Warrant Shares and Penalty Shares
to be listed for trading on the American Stock Exchange or on any other national
securities exchange on which the Company's Common Stock is then listed.
Each holder of Registrable Securities as to which any registration is being
effected agrees, as a condition to the registration obligations with respect to
such holder provided herein, to furnish to the Company such information
regarding the distribution of such Registrable Securities as the Company may
from time to time reasonably request in writing.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company
described in this paragraph 7(i), such holder will forthwith discontinue
disposition of Registrable Securities until such holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 7(h) hereof,
or until it is advised in writing by the Company (which notice the Company shall
give as promptly as possible), that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings which are
incorporated by reference in the Prospectus, and, if so directed by the Company,
such holder will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies then in such holder's possession, of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice.
8. Indemnification
(a) Indemnification of Holder. At such time as the Company registers any
of the Registrable Securities under the Act, the Company will indemnify and hold
harmless the holder, each of its directors, officers, partners, employees and
each person, if any, who controls the holder within the meaning of Section 15 of
the Act from and against any and all losses, claims, damages, expenses or
liabilities, to which it becomes subject under the Act or under any other
statute or at common law or otherwise, and, except as hereinafter provided, will
reimburse the holder for any legal or other expenses reasonably incurred by it
in connection with investigating or defending any actions whether or not
resulting in any liability, insofar as such losses, claims, damages, expenses,
liabilities or actions arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement, in any preliminary or amended preliminary prospectus or in the
prospectus (or the registration statement or prospectus as from time to time
amended or supplemented by the Company) or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, or any violation by the Company of any rule or regulation
promulgated under the Act applicable to the Company and relating to action or
inaction required of the Company in connection with such registration, unless
such untrue statement or omission was made in such registration statement,
preliminary or amended, preliminary prospectus or prospectus in reliance upon
and in conformity with information furnished in writing to the Company in
connection therewith by the holder expressly for use therein. Promptly after
receipt by the holder of notice of the commencement
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of any action in respect of which indemnity may be sought against the
Company, the holder will notify the Company in writing of the commencement
thereof, and, subject to the provisions hereinafter stated, the Company shall
assume the defense of such action (including the employment of counsel, who
shall be counsel reasonably satisfactory to the holder), and the payment of
expenses insofar as such action shall relate to any alleged liability in
respect of which indemnity may be sought against the Company. The registered
holder shall have the right to employ separate counsel in any such action and
to participate in the defense thereof but the fees and expenses of such
counsel shall not be at the expense of the Company unless (i) the employment
of such counsel has been specifically authorized by the Company, or (ii) the
holder has reasonably determined that there may be a conflict between the
positions of the Company and the holder in conducting the defense of such
action, in which case the counsel for the holder shall be entitled to conduct
the defense at the expense of the Company to the extent reasonably determined
by such counsel to be necessary to protect the interests of the holder. The
Company shall not be liable to indemnify any person for any settlement of any
such action effected without the Company's consent, which shall not be
unreasonably withheld.
(b) Indemnification of Company. At such time as the Company registers
any of the Registrable Securities under the Act, the holder will indemnify
and hold harmless the Company, each of its directors, each of its officers
who have signed the registration statement, each underwriter of the shares so
registered (including any broker or dealer through whom such of the shares
may be sold) and each person, if any, who controls the Company within the
meaning of Section 15 of the Act from and against any and all losses, claims,
damages, expenses or liabilities, joint or several, to which they or any of
them may become subject under the Act or under any other statute or at common
law or otherwise, and, except as hereinafter provided, will reimburse the
Company and each such director, officer, underwriter or controlling person
for any legal or other expenses reasonably incurred by them or any of them in
connection with investigating or defending any actions whether or not
resulting in any liability, insofar as such losses, claims, damages,
expenses, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement, in any preliminary or amended preliminary prospectus
or in the prospectus (or in the registration statement or prospectus as from
time to time amended or supplemented) or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, but only insofar as any such statement or omission was made in
reliance upon and in conformity with information furnished in writing to the
Company in connection therewith by the holder expressly for use therein.
Promptly after receipt of notice of the commencement of any action in respect
of which indemnity may be sought against the holder, the Company will notify
the holder in writing of the commencement thereof, and the holder shall,
subject to the provisions hereinafter stated, assume the defense of such
action (including the employment of counsel, who shall be counsel reasonably
satisfactory to the Company) and the payment of expenses insofar as such
action shall relate to the alleged liability in respect of which indemnity
may be sought against the holder. The Company and
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each such director, officer, underwriter or controlling person shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof but the fees and expenses of such counsel shall not be at the
expense of the holder unless (i) the employment of such counsel has been
specifically authorized by the holder, or (ii) the Company has reasonably
determined that there may be a conflict between the positions of the holder and
the Company in conducting the defense of such action, in which case the counsel
for the Company shall be entitled to conduct the defense at the expense of the
holder to the extent reasonably determined by such counsel to be necessary to
protect the interests of the Company. The holder shall not be liable to
indemnify any person for any settlement of any such action effected without the
holder's consent, which shall not be unreasonably withheld.
9. Registration Expenses
(a) All expenses incident to the Company's performance of or compliance
with this Warrant, including without limitation:
(1) all registration, filing and listing fees;
(2) the Company's printing, messenger, telephone and delivery
expenses;
(3) fees and expenses of counsel for the Company;
(4) fees and expenses of all independent certified public accountants
of the Company (including the expenses of any special audit necessary to satisfy
the requirements of the Securities Act); and
(5) fees and expenses associated with any NASD filing required to be
made in connection with the Registration Statement.
(all such expenses being herein called "Registration Expenses"); shall be borne
by the Company, regardless of whether the Registration Statement becomes
effective.
10. No Impairment. The Company will not, by amendment of its Articles of
Organization or through any reorganization, transfer of assets, consolidation,
merger, dissolution, or any other similar voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder of the Warrant against impairment due to such
event. Without limiting the generality of the foregoing, the Company (a) will
not increase the par value of any shares of stock receivable on the exercise of
the Warrants above the amount payable therefor on such exercise and (b) will
take all action that may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable shares of stock, free
from all taxes, liens and charges
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with respect to the issue thereof, on the exercise of all of the Warrants from
time to time outstanding.
11. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrants, the Company at its expense will promptly cause its
principal financial or accounting officer to compute such adjustment or
readjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment or readjustment, the Purchase Price
resulting therefrom and the increase or decrease, if any, in the number of
shares purchasable at such price upon exercise of the Warrant, and showing in
detail the facts and computation upon which such adjustment or readjustment in
based. The Company will forthwith mail a copy of each such certificate to each
registered holder of this Warrant, and will, on the written request at any time
of the holder of this Warrant, furnish to such holder a like certificate setting
forth the Purchase Price at the time in effect and showing how it was
calculated.
12. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend on, or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of the
Company to or consolidation or merger of the Company with or into any
other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed to the
registered holder of this Warrant a notice specifying (i) the date on which any
such record is to be taken for the purpose of such dividend, distribution or
right, (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or Other Securities) shall be entitled to
exchange their shares of Common Stock (or Other Securities) for securities or
other property deliverable on such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up, and (iii) the amount and character of any stock or other securities,
or rights or options with respect thereto, proposed to be issued or granted, the
date of such proposed issue or grant and the persons or class of persons to whom
such proposed issue or grant is to be offered or made. Such notice shall also
state that the action in question or the record date is subject to the
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effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), or a favorable vote of stockholders if either is
required. Such notice shall be mailed at least 7 days prior to the date
specified in such notice on which any such action is to be taken or the record
date, whichever is earlier.
12. Reservation of Stock, etc., Issuable on Exercise of Warrants. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrant, all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of the Warrant.
13. Transfer of Warrant; Restrictions on Transfer. This Warrant and all
shares of Common Stock (or Other Securities) from time to time issuable on the
exercise of the Warrant (a) shall be subject to any applicable terms and
restrictions of other agreements between the Company and the holder and (b) may
not be sold, offered for sale, transferred, pledged or hypothecated in the
absence of an effective registration statement under the Securities Act and
applicable state securities laws or an opinion of counsel reasonably
satisfactory to the Company that such registration is not required.
14. Register of Warrants; Transfers.
(a) The Company will maintain a register containing the names and
addresses of the registered holders of this Warrant. Any registered holder may
change its, his or her address as shown on the warrant register by written
notice to the Company requesting such change.
(b) Without the prior written consent of the Company, which shall not
be unreasonably withheld, this Warrant shall not be transferable by the
registered holder except to bona fide directors, officers, partners shareholders
or principal employees of the holder, and shall not be assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise). This
Warrant shall be exercisable only by the registered holder and shall not be
subject to execution, attachment or similar process. Any attempted transfer,
assignment, pledge, hypothecation or other disposition of this Warrant or of any
rights granted hereunder contrary to the provisions of this Paragraph, or the
levy of any attachment or similar process upon this Warrant or such rights,
shall be null and void.
(c) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the registered holder of this Warrant as the
absolute owner hereof for all purposes; provided, however, that if and when this
Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.
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15. Exchange of Warrants. This Warrant is exchangeable, upon the
surrender hereof by the holder hereof at the office or agency of the Company
referred to in Section 14, for one or more new Warrants of like tenor
representing in the aggregate the right to subscribe for and purchase the number
of shares of Common Stock which may be subscribed for and purchased hereunder,
each of such new Warrants to represent the right to subscribe for and purchase
such number of shares as shall be designated by said holder hereof at the time
of such surrender.
16. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant or, in the case of any such mutilation, on surrender and
cancellation of such Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
17. Remedies. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
18. Closing of Books. The Company will at no time close its transfer
books against the transfer of any Warrant or of any shares of Common Stock
issued or issuable upon the exercise of any Warrant in any manner which
interferes with the timely exercise of this Warrant, unless so required by law.
19. No Rights or Liabilities as a Stockholder. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a stockholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Common Stock, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Purchase Price or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
20. Notices, etc. All notices and other communications from the Company
to the registered holder of this Warrant shall be mailed in writing by
hand-delivery, first class registered or certified mail, postage prepaid, telex
or telecopies, at such address as may have been furnished to the Company in
writing by such holder or at the address shown on such holder's Warrant.
21. Miscellaneous. This Warrant and any terms hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the Commonwealth of Massachusetts, without reference to
its conflicts of law provisions. The headings in this Warrant are for purpose
of reference only, and shall not limit or otherwise affect any of the terms
hereof. This Warrant is being executed as an instrument under seal. The
invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.
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Dated: March 24, 1997 MEDIA LOGIC, INC.
By: /s/ William E. Davis
____________________________________
William E. Davis, Jr.
Chief Executive Officer and
President
Attest:
By: /s/ Paul M. O'Brien
_________________________________
Title: C.F.O.
______________________________
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FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
MEDIA LOGIC, INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder, ____________
shares of Common Stock of MEDIA LOGIC, INC. and hereby makes payment of
$_____________ therefor in cash, and requests that the certificates for such
shares be issued in the name of, and delivered to _______________________ whose
address is ________________________.
Dated: ________________ ____________________________________
(Signature must conform to name
of holder as specified on the
face of the Warrant)
____________________________________
____________________________________
(Address)
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For values received, the undersigned hereby sells, assigns and transfers
unto ___________________ the right represented by the within Warrant to purchase
___________ shares of Common Stock of MEDIA LOGIC, INC. to which the within
Warrant relates, and appoints _____________________ Attorney to transfer such
right on the books of MEDIA LOGIC, INC. with full power of substitution in the
premises.
Dated: ________________ ____________________________________
(Signature must conform
to name of holder as specified
on the face of the Warrant)
____________________________________
____________________________________
(Address)
Signed in the presence of:
______________________________