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Exhibit 1.2
ANNEX A
TO
UNDERWRITING AGREEMENT
THE SECURITY EVIDENCED HEREBY MAY NOT BE TRANSFERRED EXCEPT (I) IN
ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 1 HEREOF AND (II) WITH EITHER (A) AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER MAY BE
LAWFULLY MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR (B) SUCH
REGISTRATION.
UNIT PURCHASE WARRANT
To Purchase _____ Units Each Consisting of Two Shares of
Common Stock of Dayton General Systems, Inc. and
One Warrant to Purchase One Additional Share of Common Stock
______________, 1997
THIS CERTIFIES THAT, in consideration for its payment of $______ to the
Company, ▇. ▇. ▇▇▇▇▇▇▇ & Associates ("Initial Holder") or its registered assigns
is entitled to subscribe for and purchase from Dayton General Systems, Inc. (the
"Company"), a Pennsylvania corporation, at any time after the first anniversary
of the date hereof (which is the effective date of the registration statement to
which this warrant (herein referred to as the "Warrant") relates) to and
including _________, 2002 (the fifth anniversary of the effective date of the
registration statement for the public offering to which this Warrant relates),
_______ units ("Units") each consisting of (i) two fully paid and nonassessable
shares of the Company's Common Stock without par value ("Common Stock") together
with (ii) a warrant to purchase one additional share of Common Stock at a price
of $6.50 per share, all such warrants ("Offering Warrants") to have terms and
conditions identical to those described in the Company's Registration Statement
on Form SB-2, No. 333-___ (the "Registration Statement") under the Securities
Act of 1933 for the offering of securities to which this Unit Purchase Warrant
relates. The exercise price of this Warrant shall be $12.50 per Unit (which
price is equal to 125% of the price of the Company's Units offered in the public
offering to which this Warrant relates).
This Warrant is subject to the following provisions, terms and conditions:
1. EXERCISE; TRANSFERABILITY. The rights represented by this Warrant
may be exercised by the holder hereof, in whole or in part (but not as to a
fractional Unit), by written notice of exercise delivered to the Company 20 days
prior to the intended date of exercise and by the surrender of this Warrant
(properly endorsed if required) at the principal office of the Company and upon
payment to it by check of the purchase price for such Units. During the first
year after the date hereof, the Warrant may not be exercised, sold, transferred,
assigned or hypothecated by the holder hereof, except (i) the transfer of all or
any portion of this Warrant by operation of law or by reason of reorganization
of the Company shall not be prohibited, and
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(ii) this Warrant shall be transferable in whole or in part to officers or
partners of the Initial Holder to National Association of Securities Dealers,
Inc. member firms which participate in the selling group for the public offering
to which this Warrant relates, and to the officers or partners of such member
firms, provided that if so transferred, the Warrant or part thereof shall remain
subject to the restrictions on transfer specified herein for the remainder of
such one year time period. To the extent permitted under the foregoing
provisions, this Warrant may be transferred, or divided into two or more
warrants of smaller denominations (collectively, the "Warrants"), subject to the
Company's receipt of the opinion of counsel as provided by paragraph 7 herein to
the effect that such transfer is not in violation of federal or state securities
laws.
2. ISSUANCE OF UNITS. The Company agrees that the Units purchasable
hereunder shall be and are deemed to be issued to the registered holder hereof
as of the close of business on the date on which payment shall have been made
for such Units as aforesaid. Subject to the provisions of the next succeeding
paragraph, certificates for the Units so purchased shall be delivered to the
registered holder hereof within a reasonable time, not exceeding ten days after
the rights represented by this Warrant shall have been so exercised, and, unless
this Warrant has expired, a new Warrant representing the number of Units, if
any, with respect to which this Warrant shall not then have been exercised shall
also be delivered to the registered holder hereof within such time.
Notwithstanding the foregoing, however, the Company shall not be required to
deliver any certificate for Units upon exercise of this Warrant, except in
accordance with the provisions, and subject to the limitations, of paragraph 7
hereof.
3. COVENANTS OF COMPANY. The Company covenants and agrees that all
shares of Common Stock which may be included in Units issued upon the exercise
of the rights represented by this Warrant will, upon issuance, be duly
authorized and issued, fully paid, nonassessable and free from all taxes, liens
and charges with respect to the issue thereof, and, without limiting the
generality of the foregoing, the Company covenants and agrees that it will from
time to time take all such action as may be required to assure that the par
value per share of Common Stock is at all times equal to or less than the then
effective purchase price per share of the Common Stock issuable pursuant to this
Warrant. The Company further covenants and agrees that, during the period within
which the rights represented by this Warrant may be exercised, the Company will
at all times have authorized, and reserved for the purpose of issue or transfer
upon exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of its Common Stock and Offering Warrants to provide for the
exercise of the rights represented by this Warrant.
4. ANTI-DILUTION ADJUSTMENTS. The above provisions are, however,
subject to the following:
(a) In case the Company shall at any time hereafter subdivide or
combine the outstanding shares of Common Stock or declare a dividend payable in
Common Stock, the exercise price of this Warrant in effect immediately prior to
the subdivision, combination or record date for such dividend payable in Common
Stock shall forthwith be proportionately increased, in the case of combination,
or decreased, in the case of subdivision or dividend payable in Common Stock,
and each share of Common Stock purchasable upon exercise of this Warrant
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shall be changed to the number determined by dividing the then current exercise
price by the exercise price as adjusted after the subdivision, combination or
dividend payable in Common Stock.
(b) No fractional Units are to be issued upon the exercise of this
Warrant, but the Company shall pay a cash adjustment in respect of any fraction
of a Unit which would otherwise be issuable in an amount equal to the same
fraction of the market price per share of Common Stock on the day of exercise as
determined in good faith by the Company.
(c) If any capital reorganization or reclassification of the capital
stock of the Company, or consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to another
corporation shall be effected in such a way that holders of Common Stock shall
be entitled to receive stock, securities or assets with respect to or in
exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the holder hereof shall thereafter have the right to
purchase and receive, upon the basis and upon the terms and conditions specified
in this Warrant and in lieu of the shares of Common Stock and/or Offering
Warrants of the Company immediately theretofore purchasable and receivable upon
the exercise of the rights represented hereby, such stock, securities or assets
as may be issued or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares of such
stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby (assuming, for this purpose, the exercise of the
Offering Warrants) had such reorganization, reclassification, consolidation,
merger or sale not taken place, and in any such case appropriate provisions
shall be made with respect to the rights and interests of the holder of this
Warrant to the end that the provisions hereof (including without limitation
provisions for adjustments of the Warrant purchase price and of the number of
Units purchasable upon the exercise of this Warrant) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise hereof.
(d) Upon any adjustment of the Warrant purchase price, then, and in
each such case, the Company shall give written notice thereof, by first class
mail, postage prepaid, addressed to the registered holder of this Warrant at the
address of such holder as shown on the books of the Company, which notice shall
state the Warrant purchase price resulting from such adjustment and the increase
or decrease, if any, in the number of Units purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
5. COMMON STOCK. As used herein, the term "Common Stock" shall mean and
include the Company's presently authorized shares of Common Stock and shall also
include any capital stock of any class of the Company hereafter authorized which
shall not be limited to fixed sum or percentage in respect of the rights of the
holders thereof to participate in dividends or in the distribution, dissolution
or winding up of the Company.
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6. NO VOTING RIGHTS. This Warrant shall not entitle the holder hereof
to any voting rights or other rights as a shareholder of the Company.
7. NOTICE OF TRANSFER OF WARRANT OR RESALE OF UNITS. The holder of this
Warrant, by acceptance hereof, agrees to give written notice to the Company
before transferring any Units issued upon the exercise hereof ("Warrant Units"),
of such holder's intention to do so, describing briefly the manner of any
proposed transfer. Promptly upon receiving such written notice, the Company
shall present copies thereof to the Company's counsel and to counsel to the
original purchaser of this Warrant. If in the opinion of each such counsel the
proposed transfer may be effected without registration or qualification (under
applicable federal and state laws), the Company, as promptly as practicable,
shall notify such holder of such opinions, whereupon such holder shall be
entitled to transfer the Warrant Units or to dispose of shares of Common Stock
received upon the previous exercise hereof in accordance with the notice
delivered by such holder to the Company, provided that an appropriate legend may
be endorsed on this Warrant or the certificates for such Warrant Units
respecting restrictions upon transfer thereof necessary or advisable in the
opinion of counsel satisfactory to the Company to prevent further transfers
which would be in violation of Section 5 of the Securities Act of 1933.
If, in the reasonable opinion of either of the counsel referred to in
this paragraph 7, the proposed transfer or disposition described in the written
notice given pursuant to this paragraph 7 may not be effected without
registration or qualification of the Warrant Units, the Company shall promptly
give written notice thereof to the holder hereof, and such holder will limit its
activities in respect to such proposed transfer or disposition as, in the
opinion of both such counsel, are permitted by law.
8. REGISTRATION RIGHTS. (a) If the Company proposes to claim an
exemption under Regulation A promulgated under Section 3(b) of the Securities
Act of 1933 for a public offering of any of its securities, or to register under
the Securities Act of 1933 (except by a registration statement on a form that
does not permit the inclusion of shares by its security holders) any of its
securities, it will give written notice to all registered holders of Warrants,
and all registered holders of Units acquired upon the exercise of Warrants, of
its intention to do so and, on the written request of any registered holders
given within 20 days after receipt of any such notice (which request must be
made on or before ____________, 2004 (the seventh anniversary of the effective
date of the Registration Statement) and which notice shall specify the Warrant
Units intended to be sold or disposed of by such registered holder and describe
the nature of any proposed sale or other disposition thereof), the Company will
use its best efforts to cause all such Warrant Units, the registered holders of
which shall have requested the registration or qualification thereof, to be
included in such notification or registration statement proposed to be filed by
the Company. All expenses of such offering, except the fees of special counsel
and brokers' commissions to such holders, shall be borne by the Company.
(b) Further, on a one-time basis only, upon request by a majority in
interest of Warrants, or by the holders of a majority of the Warrant Units
issued upon exercise thereof, the Company will, at the expense of such holders,
promptly take all necessary steps to register or
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qualify the Warrant Units under Section 3(b) or Section 5 of the Securities Act
of 1933 and such state laws as such holders may reasonably request; provided
that such request must be made within five years from the effective date of the
Registration Statement. The Company shall use its best efforts to keep effective
and maintain any registration, qualification, notification or approval specified
in this paragraph for such period as may be necessary for the holders of the
Warrant Units to dispose of such Units and from time to time shall amend or
supplement, at the holder's expense, the prospectus, or offering circular used
in connection therewith to the extent necessary in order to comply with
applicable law, provided that the Company shall not be obligated to maintain any
registration for a period of more than six months after effectiveness except
that a Form S-3 registration statement or successor thereof shall be maintained
for up to 12 months after effectiveness.
(c) The Company shall indemnify the holder of this Warrant and of any
Warrant Units issued or issuable hereunder, its officers and directors, and any
person who controls such Warrant holder or such holder of Units within the
meaning of Section 15 of the Securities Act of 1933, against all losses, claims,
damages and liabilities caused by any untrue statement of a material fact
contained in any registration statement, prospectus, notification or offering
circular (and as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus relating to the
registration or qualification of the Warrant Units or caused by any omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission contained in
information furnished in writing to the Company by such Warrant holder or such
holder of Warrant Units expressly for use therein, and each such holder by its
acceptance hereof severally agrees that it will indemnify and hold harmless the
Company and each of its officers who signs such registration statement and each
of its directors and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act of 1933 with respect to losses,
claims, damages or liabilities which are caused by any untrue statement or
omission contained in information furnished in writing to the Company by such
holder expressly for use therein.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer and this Warrant to be dated ______________, 1997.
DAYTON GENERAL SYSTEMS, INC.
By_________________________________
Its______________________________
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TO: DAYTON GENERAL SYSTEMS, INC.
ASSIGNMENT FORM -- To be Executed By the Registered Holder in Order to Transfer
the Warrant.
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers _____
of the Warrants represented by the attached Warrant Certificate unto
__________________________________________________ (please print or typewrite
name and address including postal zip code of assignee) having the Social
Security or other identifying number of ________________, and does irrevocably
constitute and appoint ________________________ attorney to transfer the Warrant
Certificate on the records of the Company with full power of substitution in the
premises.
Date:__________________, 19____.
PLEASE NOTE: The signature(s) to the Purchase Form or the Assignment
Form must correspond to the name as written upon the face of the
Warrant Certificate in every particular without alteration or
enlargement or any change whatsoever.
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EXERCISE NOTICE
The undersigned Warrant holder hereby irrevocably elects to exercise
the attached Warrant Certificate. The Warrant is hereby exercised for
_____________________ shares and is accompanied by a check in the amount of
$__________ to cover the exercise price thereof.
Date:____________________ ___________________________________
(Name)
___________________________________
(Address)
___________________________________
(Tax ID No.)
___________________________________
(Signature)
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