EXHIBIT 10.57
WARRANT
THIS WARRANT AND THE SHARES DELIVERABLE UPON EXERCISE THEREOF HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT") OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (i) TO THE COMPANY, (ii) OUTSIDE THE
UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE 1933 ACT, IF
AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, (iii) IN
COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT PROVIDED BY
RULE 144 THEREUNDER, IF APPLICABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS, (iv) IN COMPLIANCE WITH ANOTHER EXEMPTION FROM REGISTRATION AND
ANY APPLICABLE STATE SECURITIES LAWS, IN EACH CASE AFTER PROVIDING EVIDENCE
SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE 1933 ACT.
THIS WARRANT MAY NOT BE EXERCISED WITHIN THE UNITED STATES OR BY OR ON BEHALF OF
A U.S. PERSON OR PERSON IN THE UNITED STATES UNLESS THE SHARES DELIVERABLE UPON
EXERCISE HEREOF ARE REGISTERED UNDER THE 1933 ACT AND THE SECURITIES LAWS OF ALL
APPLICABLE STATES OF THE UNITED STATES OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS IS AVAILABLE. "UNITED STATES" AND "U.S. PERSON" ARE AS DEFINED BY
REGULATION S UNDER THE 1933 ACT.
WARRANT TO PURCHASE 666,667 SHARES OF COMMON STOCK
THE NEPTUNE SOCIETY, INC.
(a Florida Corporation)
Not Transferable or Exercisable Except
Upon Conditions Herein Specified
Void after 5:00 O'clock P.M.,
Pacific Daylight Time, on the Expiry Date (as herein defined)
THE NEPTUNE SOCIETY INC., a Florida corporation (the "Company"), hereby
certifies that X.X. Xxxxx Investment Banking Corp., a New York corporation, its
registered successors and permitted assigns registered on the books of the
Company maintained for such purposes as the registered holder hereof (the
"Holder"), for value received, is entitled to purchase from the Company the
number of fully paid and non-assessable shares of Common Stock of the Company
("Shares") stated above at a purchase price of Three and No/100 Dollars ($3.00)
per Share (the "Exercise Price") (the number of Shares and Exercise Price being
subject to adjustment as hereinafter provided) upon the terms and conditions
herein provided.
1. Exercise of Warrants.
(a) Subject to Section 1(b), upon presentation and surrender of this
Warrant, with the attached Exercise Form duly executed, at the principal office
of the Company at 0000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx
00000, or at such other place as the Company may designate by notice to the
Holder hereof, with and upon payment (which may be in the form of a certified or
bank cashier's check payable to the order of the Company or in the form of
electronic funds transfer to the Company's account, the wiring instructions for
which shall be provided upon request by the Holder) in the amount of the
aggregate Exercise Price for the Shares being purchased, the Company shall
deliver to the Holder hereof, as promptly as practicable, certificates
representing the Shares being purchased. This Warrant may be exercised in whole
or in part; and, in case of exercise hereof in part only, the Company, upon
surrender hereof, will deliver to the Holder a new Warrant Certificate or
Warrant Certificates of like tenor entitling the Holder to purchase the number
of Shares as to which this Warrant has not been exercised.
(b) This Warrant may be exercised in whole or in part at any time prior to
5:00 o'clock P.M., Pacific Daylight Time, on July 31, 2007 (the "Expiry Date").
2. Net or "Cashless" Exercise.
In lieu of exercising this Warrant in the manner provided above, the Holder
may elect to receive shares equal to the value of this Warrant (or the portion
thereof being canceled) by surrender of this Warrant at the address set forth
above, together with notice of such election, in which event the Company shall
issue to the Holder that number of Shares computed using the following formula:
X = Y(A-B)
------
A
Where: X = The number of shares of Common Stock to be issued to the
Holder
Y = The number of Shares purchasable under this Warrant
(at the date of such calculation) with respect to
which this Warrant is exercised
A = The current market price of one share of Common
Stock (at the date of exercise of this Warrant)
B = The Exercise Price (as adjusted to the date of such
calculation)
For purposes hereof, the current market price per Share at any date shall be:
(i) if the Shares are listed on any national securities exchange, the closing
price for the trading day immediately before the day in question; and (ii) if
the Shares are not listed on any national securities exchange but are quoted on
the National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ"), the average of the high and low bids as reported by NASDAQ for the
trading day immediately before the day in question.
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3. Exchange of Warrant.
This Warrant at any time prior to the exercise hereof, upon presentation
and surrender to the Company, may be exchanged, alone or with other Warrants of
like tenor registered in the name of the Holder, for another Warrant or other
Warrants of like tenor in the name of such Holder exercisable for the same
aggregate number of Shares as the Warrant or Warrants surrendered.
4. Rights and Obligations of Warrant Holder.
(a) The Holder of this Warrant Certificate shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or in
equity; provided, however, in the event that any certificate representing the
Shares is issued to the Holder hereof upon exercise of this Warrant, such Holder
shall, for all purposes, be deemed to have become the holder of record of such
Shares on the date on which this Warrant Certificate, together with a duly
executed Exercise Form, was surrendered and payment of the Exercise Price was
made, irrespective of the date of delivery of such Share certificate. The rights
of the Holder of this Warrant are limited to those expressed herein and the
Holder of this Warrant, by its acceptance hereof, consents to and agrees to be
bound by and to comply with all the provisions of this Warrant Certificate,
including, without limitation, all the obligations imposed upon the Holder
hereof by Section 5 hereof. In addition, the Holder of this Warrant Certificate,
by accepting the same, agrees that the Company may deem and treat the person in
whose name this Warrant Certificate is registered on the books of the Company
maintained for such purpose as the absolute, true and lawful owner for all
purposes whatsoever, notwithstanding any notation of ownership or other writing
thereon, and the Company shall not be affected by any notice to the contrary.
(b) No Holder of this Warrant Certificate, as such, shall be entitled to
vote or receive distributions or to be deemed the holder of Shares for any
purpose, nor shall anything contained in this Warrant Certificate be construed
to confer upon any Holder of this Warrant Certificate, as such, any of the
rights of a stockholder of the Company or any right to vote, give or withhold
consent to any action by the Company, whether upon any recapitalization, issue
of stock, reclassification of stock, merger, conveyance or otherwise, receive
notice of meetings or other action affecting stockholders (except for notices
provided for herein), receive distributions, subscription rights, or otherwise,
until this Warrant shall have been exercised and the Shares purchasable upon the
exercise thereof shall have become deliverable as provided herein; provided,
however, that any such exercise on any date when the stock transfer books of the
Company shall be closed shall constitute the person or persons in whose name or
names the certificate or certificates for those Shares are to be issued as the
record holder or holders thereof for all purposes at the opening of business on
the next succeeding day on which such stock transfer books are open, and the
Warrant surrendered shall not be deemed to have been exercised, in whole or in
part as the case may be, until the next succeeding day on which stock transfer
books are open for the purpose of determining entitlement to distributions on
the Company's common stock.
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5. Shares Underlying Warrants.
The Company covenants and agrees that all Shares delivered upon exercise of
this Warrant shall, upon delivery and payment therefor, be duly and validly
authorized and issued, fully-paid and non-assessable, and free from all stamp
taxes, liens, and charges with respect to the purchase thereof. In addition, the
Company agrees at all times to reserve and keep available an authorized number
of Shares sufficient to permit the exercise in full of this Warrant.
6. Disposition of Warrants or Shares.
(a) The holder of this Warrant Certificate and any transferee hereof or of
the Shares issuable upon the exercise of the Warrant Certificate, by their
acceptance hereof, hereby understand and agree that this Warrant, and the Shares
issuable upon the exercise hereof, have not been registered under either the Act
or the State Acts and shall not be sold, pledged, hypothecated, donated, or
otherwise transferred (whether or not for consideration) except upon the
issuance to the Company of a favorable opinion of counsel or submission to the
Company of such evidence as may be satisfactory to counsel to the Company, in
each such case, to the effect that any such transfer shall not be in violation
of the Act and the State Acts. It shall be a condition to the transfer of this
Warrant that any transferee thereof deliver to the Company its written agreement
to accept and be bound by all of the terms and conditions of this Warrant.
(b) The stock certificates of the Company that will evidence the shares of
Common Stock with respect to which this Warrant may be exercisable will be
imprinted with conspicuous legend in substantially the following form:
"The securities represented by this certificate have not been
registered under either the Securities Act of 1933 (the "Act") or
applicable state securities laws (the "State Acts") and shall not be
sold, pledged, hypothecated, donated or otherwise transferred (whether
or not for consideration) by the holder except upon the issuance to
the Company of a favorable opinion of its counsel or submission to the
company of such other evidence as may be satisfactory to counsel of
the Company, in each such case, to the effect that any such transfer
shall not be in violation of the Act and the State Acts."
Except as provided in the Debenture Purchase and Amendment Agreement by and
among the Company, CapEx, L.P., and X.X. Xxxxx Investment Banking Corp. dated
July 31, 2003 (in which the Company has agreed to file and to cause to become
effective a registration statement covering the shares for which this Warrant
may be exercisable), the Company has not agreed to register any of the holder's
shares of Common Stock of the Company with respect to which this Warrant may be
exercisable for distribution in accordance with the provisions of the Act or the
State Acts and, the Company has not agreed to comply with any exemption from
registration under the Act or the State Acts for the resale of the holder's
shares of Common Stock of the Company with respect to which this Warrant may be
exercised. Hence, it is the understanding of the holders of this Warrant that by
virtue of the provisions of certain rules respecting "restricted securities"
promulgated by the Securities and Exchange Commission, the shares of Common
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Stock of the Company with respect to which this Warrant may be exercisable may
be required to be held indefinitely, unless and until registered under the Act
and the State Acts, unless an exemption from such registration is available, in
which case the Holder may still be limited as to the number of shares of Common
Stock of the Company with respect to which this Warrant may be exercised that
may be sold.
7. Adjustments.
The number of Shares purchasable upon the exercise of each Warrant is
subject to adjustment from time to time upon the occurrence of any of the events
enumerated below.
(a) In case the Company shall: (i) pay a dividend in Shares; (ii) subdivide
its outstanding Shares into a greater number of Shares; (iii) combine its
outstanding Shares into a smaller number of Shares; the amount of Shares
purchasable upon the exercise of each Warrant and the Exercise Price in effect
immediately prior immediately prior thereto shall be proportionately adjusted to
reflect the reduction or increase in the value of each such Shares so that the
Holder shall be entitled to receive upon exercise of the Warrant that number of
Shares which such Holder would have owned or would have been entitled to receive
after the happening of such event had such Holder exercised the Warrant
immediately prior to the record date, in the case of such dividend, or the
effective date, in the case of any such subdivision or combination; provided
however, in no event shall the Exercise Price exceed $3.00 per share (the
"Maximum Exercise Price"). For greater certainty and by way of example, if the
Company's issued and outstanding Shares shall be combined into a smaller number
of shares of Common Stock on a four (old share) for one (new share) basis, the
Warrant will be exercisable to acquire 166,667 Shares at an Exercise Price of
$3.00 per share, notwithstanding the fact that the Exercise Price would have
been $12.00 per Share, but for the Maximum Exercise Price. An adjustment made
pursuant to this Section 7(a) shall be made whenever any of such events shall
occur, but shall become effective retroactively after such record date or such
effective date, as the case may be, as to Warrants exercised between such record
date or effective date and the date of happening of any such event.
(b) In case of any capital reorganization, any reclassification of the
stock of the Company (other than as a result of a stock dividend or subdivision,
split up or combination of shares), or the merger of the Company with or into
another person or entity (other than a merger in which the Company is the
continuing Company and which does not result in any change in the Common Stock)
or of the sale, exchange, lease, transfer or other disposition of all or
substantially all of the properties and assets of the Company as an entirety or
the participation by the Company in share exchange as the Company the stock of
which is to be acquired, the amount of Shares purchasable upon the exercise of
each Warrant immediately prior thereto shall be adjusted (effective on the
opening of business on the date after the effective date of such reorganization,
reclassification, merger, sale or exchange, lease, transfer or other disposition
or share exchange) so that the Holder shall be entitled to receive upon exercise
of the Warrant the kind and number of shares of stock or other securities or
property of the Company or of the corporation resulting from surviving such
merger or to which such properties and assets shall have been sold, exchanged,
leased, transferred or otherwise disposed or which was the corporation whose
securities were exchanged for those of the Company to which the holder of the
number of Shares deliverable (at the close of business on the date immediately
preceding the
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effective date of such reorganization, reclassification, merger, sale, exchange,
lease, transfer or other disposition or share exchange) would have been entitled
upon such reorganization, reclassification, merger, sale, exchange, lease,
transfer or other disposition or share exchange. The provisions of this Section
7(b) shall similarly apply to successive reorganizations, reclassifications,
mergers, sales, exchanges, leases, transfers or other dispositions or other
share exchanges.
(c) If and whenever any Additional Shares (as hereinafter defined) shall be
issued by the Company (i) for a cash consideration less than the amount per
share determined by dividing (1) $3.00 by (2) the ratio (the "Initial Exchange
Ratio") of (A) the number of Shares with respect to which this Warrant was
exercisable into (taking into account all adjustments thereto required to be
made hereunder) at the close of business on the business day immediately
preceding the day of such issue (the "Initial Number of Shares"), to (B)
666,667, or (ii) without consideration, then in each such case, the number of
Shares purchasable upon the exercise of this Warrant Certificate shall be
increased effective as of the opening of business on the date of such issue (the
"Issue Date") by multiplying the Initial Number of Shares by that ratio
obtained: (1) by multiplying (A) $3.00 times (B) the aggregate number of Shares
issued and outstanding at the close of business on the Issue Date (the "Issue
Date Shares") and (2) by dividing the product thus determined by the sum of the
following clauses (3) and (4): (3) $3.00 divided by (x) the Initial Exchange
Ratio and the quotient thus determined multiplied by (y) the number of Shares
issued and outstanding at the close of business on the business day immediately
preceding the Issue Date; plus (4) the amount of the consideration (if any)
received by the Company for the Additional Shares issued on the Issue Date. For
greater certainty and by way of example, the adjustments made pursuant to this
Section 7(c) shall be calculated in accordance with the example set forth on
Schedule 7(c) attached hereto.
(d) In case of the issuance of any Additional Shares for a consideration
part or all of which shall be cash, the amount of the cash consideration
therefor shall be deemed to be the amount of the cash received by the Company
for such shares, or, if such Additional Shares are offered by the Company for
subscription, the subscription price, or, if such Additional Shares shall be
sold to underwriters or dealers pursuant to a public offering other than by
subscription, the initial public offering price, less any compensation or
discount in the sale, underwriting or purchase thereof by underwriters or
dealers or others performing similar services or for any expenses incurred in
connection therewith.
(e) In case of the issuance of any Additional Shares for a consideration
part or all of which shall be other than cash, the amount of the consideration
therefor other than cash shall be deemed to be the Fair Market Value for such
consideration as determined in accordance with Section 7(j) hereof. In case of
the reclassification of securities into Shares, the Shares issued in such
reclassification shall be deemed to have been issued for a consideration other
than cash immediately prior to the close of business on the date fixed for the
determination of the stockholders entitled to receive such Shares.
(f) Additional Shares issued by way of dividend or other distribution on
any class of stock of the Company shall be deemed to have been issued without
consideration and shall be deemed to have been issued as of the opening of
business on the business day immediately
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following the date fixed for the determination of the stockholders entitled to
receive such dividend or other distribution.
(g) The term "Additional Shares" as used herein shall mean all Shares (or
shares of any other class of securities of the Company entitling the holder
thereof to participate in any distribution of the Company's remaining assets
after payment to the holders of securities entitled to a preferential
distribution upon any dissolution, liquidation or winding-up of the Company)
issued by the Company on or after July 31, 2003, whether or not subsequently
reacquired or retired by the Company other than:
(i) Shares issued upon the exercise of this Warrant;
(ii) shares issued by way of dividend or other distribution on Shares
referred to in Section 7(g)(i) or on Shares resulting from any subdivision or
combination of Shares referred to in Section 7(g)(i); or
(iii) shares ("Acquisition Shares") issued by the Company in
connection with and as consideration for the acquisition by the Company or any
Subsidiary of the assets or stock of another corporation pursuant to a bona fide
purchase and sale transaction with one or more persons acting at arm's length
from the Company, the Subsidiaries and their respective directors, officers and
significant shareholders, provided such transaction is in good faith approved by
the Board of Directors of the Company.
(h) In case of the issuance of
(i) options to purchase or rights to subscribe for Shares,
(ii) securities by their terms convertible into, or exchangeable for,
Shares, or
(iii) options to purchase or rights to subscribe for such convertible
or exchangeable securities,
then in each such case, for all purposes of this Section 7 (including without
limitation for the purpose of determining the Issue Date Shares referred to in
Section 7(c) and the number of Shares issued and outstanding immediately prior
to the Issue Date referred to in Section 7(c)):
(iv) The aggregate maximum number of Shares deliverable upon exercise
of such options to purchase or rights to subscribe for Shares shall be deemed to
be Additional Shares at the time such options or rights were issued and for a
consideration equal to the consideration (determined in the manner provided in
Sections 7(c) and 7(d)) if any, received by the Company upon the issuance of
such options or rights plus the minimum purchase price provided in such options
or rights for the Shares covered thereby.
(v) The aggregate number of Shares deliverable upon conversion of, or
in exchange for, any such convertible or exchangeable securities or upon the
exercise of options to purchase or rights to subscribe for such convertible or
exchangeable securities and subsequent conversion or exchange thereof shall be
deemed to be Additional Shares at the time such securities were issued or such
options or rights were issued and for a consideration equal to the
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consideration received by the Company for any such securities or related options
or rights (excluding any cash received on account of accrued interest or accrued
distributions), plus the additional consideration, if any, to be received by the
Company upon the conversion or exchange of such securities or the exercise of
any related options or rights (the consideration in each case to be determined
in the manner provided in Sections 7(c) and 7(d)).
(vi) In the event of any change in the number of Shares deliverable
upon exercise of any such options or rights or securities other than a change
resulting from the antidilution provisions thereof, the number of Shares
purchasable upon the exercise of this Warrant shall be readjusted effective as
of the date of such change to the number which would have been obtained had the
adjustment made upon the issuance of such options or rights or securities not
converted prior to such change or options or rights or securities related to
such securities not converted prior to such change been made on the basis of
such change.
(vii) On the expiration of any such options or rights, the termination
of any such rights to convert or exchange or the expiration of any options or
rights related to such convertible or exchangeable securities, the number of
Shares purchasable upon the exercise of this Warrant shall forthwith be
readjusted to such number as would have obtained had the adjustment made upon
the issuance of such options, rights, securities or options or rights related to
such securities been made upon the basis of the issuance of only the number of
Shares actually issued upon the exercise of such options or rights, upon the
conversion or exchange of such securities, or upon the exercise of the options
or rights related to such securities and subsequent conversion or exchange
thereof.
(i) No adjustment shall be required unless such adjustment would require an
increase or decrease of at least 1% in the number of Shares purchasable
hereunder; provided, however, that any adjustments which by reason of this
subsection (i) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section 7
shall be made to the nearest one-hundredth of a Share.
(j) The term Fair Market Value as used in this Warrant Certificate with
respect to assets or property received by the Company or any other person shall
be the fair market value, regardless of any prior accounting treatment, of such
assets or property, determined in good faith by agreement of the Holder and the
Board of Directors of the Company. If the Holder and the Board of Directors
shall be unable to agree as to such fair market value, the fair market value
shall be determined by the independent certified public accountant at that time
retained by the Company to audit its books and records, and a determination by
such independent certified public accountant shall be final, conclusive and
binding or, if there be none, or if such accountant shall refuse or be unable to
make such a determination then the sole issue of fair market value shall be
submitted to and settled by binding arbitration under and pursuant to the
Colorado Uniform Arbitration Act and the rules and regulations of the American
Arbitration Association, and the decision or award of the arbitrator or
arbitrators in such arbitration shall be final, conclusive and binding and a
final judgment may be entered thereon by any court of competent jurisdiction.
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8. Notice to Warrant Holders of Adjustment.
Whenever the number of Shares purchasable hereunder is adjusted as herein
provided, the Company shall cause to be mailed to the Holder in accordance with
the provisions of this Section 8 a notice (i) stating that the number of Shares
purchasable upon exercise of this Warrant have been adjusted, (ii) setting forth
the adjusted number of Shares purchasable upon the exercise of a Warrant, and
(iii) showing in reasonable detail the computations and the facts, including the
amount of consideration received or deemed to have been received by the Company,
upon which such adjustments are based.
9. Fractional Shares.
The Company shall not be required to issue any fraction of a Share upon the
exercise of Warrants. If more than one Warrant shall be surrendered for exercise
at one time by the same Holder, the number of full Shares which shall be
issuable upon exercise thereof shall be computed on the basis of the aggregate
number of Shares with respect to which this Warrant is exercised. If any
fractional interest in a Share shall be deliverable upon the exercise of this
Warrant, the Company shall make an adjustment therefor in cash equal to such
fraction multiplied by the current market price of the Shares on the business
day next preceding the day of exercise.
10. Loss or Destruction.
Upon receipt of evidence satisfactory to the Company of the loss, theft,
destruction, or mutilation of this Warrant Certificate and, in the case of any
such loss, theft or destruction, upon delivery of an indemnity agreement or bond
satisfactory in form, substance and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of this Warrant Certificate,
the Company at its expense will execute and deliver, in lieu thereof, a new
Warrant Certificate of like tenor.
11. Survival.
The various rights and obligations of the Holder hereof as set forth herein
shall survive the exercise of the Warrants represented hereby and the surrender
of this Warrant Certificate.
12. Notices.
Whenever any notice, payment of any purchase price, or other communication
is required to be given or delivered under the terms of this Warrant, it shall
be in writing and delivered by hand delivery or United States registered or
certified mail, return receipt requested, postage prepaid, and will be deemed to
have been given or delivered on the date such notice, purchase price or other
communication is so delivered or posted, as the case may be; and, if to the
Company, it will be addressed to the address specified in Section 1 hereof, and
if to the Holder, it will be addressed to the registered Holder at its, his or
her address as it appears on the books of the Company.
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THE NEPTUNE SOCIETY, INC.
ATTEST: By:
-----------------------------------
Name:
-----------------------------------
-------------------------------- Title:
Secretary -----------------------------------
Date:
-----------------------------------
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EXERCISE FORM
TO: THE NEPTUNE SOCIETY, INC.
The undersigned hereby exercises the right to acquire _________ shares of Common
Stock in the capital stock of THE NEPTUNE SOCIETY, INC. (the "Company")
according to the terms of the Warrant Certificate.
The undersigned hereby represents and warrants to the Company as follows
(circle one):
(a) the undersigned has executed and delivered to the Company Schedule A
attached hereto; or
(b) the undersigned has delivered to the Company a written opinion of
counsel to the effect that the exercise of the Warrant by the undersigned is not
subject to registration under the United States Securities Act of 1933, as
amended (the "1933 Act"), or the securities laws of any state of the United
States.
"United States" and "U.S. person" are as defined by Regulation S under the 1933
Act.
Number of Common Stock: _______________________
DATED at ______________________, this ______ day of _______________,
_______.
------------------------------ -----------------------------------------
Witness Signature Signature of Warrant Holder, to be the same
as appears on the face of this Warrant
Certificate
Print Name of Warrant Holder
Address
City, State, and Zip Code
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SCHEDULE A
In connection with the exercise of the Warrant to which this Schedule A is
attached, the undersigned (the "Subscriber") covenants, represents and warrants
to The Neptune Society, Inc. (the "Company") that:
(a) the Subscriber has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an
investment in the Shares and it is able to bear the economic risk of loss
of its entire investment;
(b) the Company has provided to it the opportunity to ask questions and receive
answers concerning the terms and conditions of the offering and it has had
access to such information concerning the Company as it has considered
necessary or appropriate in connection with its investment decision to
acquire the Shares;
(c) the Subscriber is acquiring the Shares for its own account, for investment
purposes only and not with a view to any resale, distribution or other
disposition of the Shares in violation of the United States securities
laws;
(d) the Subscriber understands that, except as otherwise agreed by the Company,
the Shares have not been and will not be registered under the United States
Securities Act of 1933, as amended (the "1933 Act") or the securities laws
of any state of the United States and that the sale contemplated hereby is
being made in reliance on an exemption from such registration requirements;
(e) the Subscriber satisfies one or more of the categories indicated below
(please place an "X" on the appropriate lines):
_____ Category 1. An organization described in Section 501(c)(3) of
the United States Internal Revenue Code, a
corporation, a Massachusetts or similar business
trust or partnership, not formed for the specific
purpose of acquiring the Shares, with total assets
in excess of US$5,000,000;
_____ Category 2. A natural person whose individual net worth, or
joint net worth with that person's spouse, at the
date hereof exceeds US$1,000,000;
_____ Category 3. A natural person who had an individual income in
excess of US$200,000 in each of the two most recent
years or joint income with that person's spouse in
excess of US$300,000 in each of those years and has
a reasonable expectation of reaching the same
income level in the current year;
_____ Category 4. A trust that (a) has total assets in excess of
US$5,000,000, (b) was not formed for the specific
purpose of acquiring the Shares and (c) is directed
in its purchases of securities by a
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person who has such knowledge and experience in
financial and business matters that he/she is
capable of evaluating the merits and risks of an
investment in the Shares;
_____ Category 5. An investment company registered under the
Investment Company Act of 1940 or a business
development company as defined in Section 2(a)(48)
of that ct;
_____ Category 6. A Small Business Investment Company licensed by the
U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act
of 1958;
_____ Category 7. A private business development company as defined in
Section 202(a)(22) of the Investment Advisors Acts
of 1940; or
_____ Category 8. An entity in which all of the equity owners satisfy
the requirements of one or more of the foregoing
categories.
(f) the Subscriber has not purchased the Shares as a result of any form of
general solicitation or general advertising, including advertisements,
articles, notices or other communications published in any newspaper,
magazine or similar media or broadcast over radio, or television, or any
seminar or meeting whose attendees have been invited by general
solicitation or general advertising;
(g) if the Subscriber decides to offer, sell or otherwise transfer any of the
Shares, it will not offer, sell or otherwise transfer any of such Shares
directly or indirectly, unless:
(i) the sale is to the Company;
(ii) the sale is made outside the United States in a transaction meeting
the requirements of Rule 904 of Regulation S under the 1933 Act and in
compliance with applicable local laws and regulations;
(iii) the Shares have been registered under the 1933 Act;
(iv) the sale is made pursuant to the exemption from the registration
requirements under the 1933 Act provided by Rule 144 thereunder and in
accordance with any applicable state securities or "Blue Sky" laws; or
(v) the Shares are sold in a transaction that does not require
registration under the 1933 Act or any applicable state laws and
regulations governing the offer and sale of securities, and it has
prior to such sale furnished to the Company an opinion of counsel
reasonably satisfactory to the Company;
(h) the certificates representing the Shares will bear a legend stating that
such shares have not been registered under the 1933 Act or the securities
laws of any state of the United States
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and may not be offered for sale or sold unless registered under the 1933
Act and the securities laws of all applicable states of the United States
or an exemption from such registration requirements is available; and
(i) the Subscriber consents to the Company making a notation on its records or
giving instructions to any transfer agent of the Company in order to
implement the restrictions on transfer set forth and described herein.
Dated this ______ day of __________________, ____.
-----------------------------------------
(Name of Subscriber - please print)
By:
------------------------------------
(Authorized Signature)
------------------------------------
(Official Capacity or Title)
------------------------------------
(Please print name of individual
whose signature appears above if
different than the name of the
Subscribed printed above)
------------------------------------
Date
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