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EXHIBIT 1.2
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 ,X. X. Xxxxxxx & 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. This Warrant may be
transferred, or divided into two or more warrants of smaller denominations
(collectively, the "Warrants"), subject to the following conditions: (i) during
the first year after the date hereof, the Warrant may not be exercised, sold,
transferred, assigned or hypothecated, and (ii) after such period, the Warrant
shall be transferable only to officers and employees of the Initial Holder,
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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. 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. 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 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
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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.
The Company shall not effect any such consolidation, merger or sale unless prior
to the consummation thereof the successor corporation (if other than the
Company) resulting from such consolidation or merger, or the corporation
purchasing such assets, shall assume by written instrument executed and mailed
to the registered holder hereof at the last address of such holder appearing on
the books of the Company, the obligation to deliver to such holder such shares
of stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to purchase.
(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.
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
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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 Section 3(b) 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 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
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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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