EX1A-15 ADD EXHB 11 ex3-1.htm

 

Exhibit 3.1

 

THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF WERE QUALIFIED BY THE SECURITIES AND EXCHANGE COMMISSION (“SEC”) ON DECEMBER 26, 2018 PURSUANT TO AN OFFERING OF COMMON STOCK AND WARRANTS PURSUANT TO A REGULATION A+ OFFERING CIRCULAR ON FORM 1-A, AS LATER SUPPLEMENTED ON AUGUST 26, 2019 AND OCTOBER 7, 2019. HOWEVER, SUCH SECURITIES NEED TO BE REQUALIFIED BY THE SEC UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT”). THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT UNLESS SUCH SECURITIES ARE REGISTERED OR AGAIN QUALIFIED UNDER THE SECURITIES ACT, SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY; (B) TO NON-”U.S. PERSONS” (AS DEFINED IN RULE 902 OF REGULATION S PROMULGATED UNDER THE U.S. SECURITIES ACT) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S PROMULGATED UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS; (C) IN ACCORDANCE WITH AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS; OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF CLAUSE (C) OR (D), THE SELLER FURNISHES TO THE COMPANY AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY TO SUCH EFFECT.

 

ELEGANCE BRANDS INC.

(a Delaware corporation)

 

Certificate Number:   **______** Warrants to Purchase

 

FORM OF COMMON SHARE PURCHASE WARRANTS

 

THIS IS TO CERTIFY THAT, for value received, _______________________ or his, her or its lawful assignee (the “Holder”) is entitled to subscribe for and purchase up to ___________________________ (__________) fully paid and non-assessable shares of Class A common stock, par value $0.0001 per share, of the Company (collectively the “Warrant Shares” and, individually, a “Warrant Share”)1 of Elegance Brands Inc. (the “Company”) at any time on or before 5:00 p.m. pacific time on __________________, 202__, (the “Expiration Date”)2, at an exercise price of USD Seventy-Five Cents ($0.75) per Warrant Share (the “Exercise Price”), subject, however, to the provisions and upon the Terms and Conditions attached hereto as Exhibit “A”; all of which terms and conditions are incorporated herein by this reference.

 

The rights represented by this Warrant Certificate may be exercised by the Holder, in whole or in part (but not as to a fraction of a Warrant Share) by surrender of this Warrant Certificate (properly endorsed as required), together with a Warrant Exercise Form in the form attached hereto as Appendix “B”, duly completed and executed, to the Company at 9100 Wilshire Blvd., Suite 362W., Beverley Hills, CA 90212 (Attention: Chief Financial Officer), or such other address as the Company may from time to time in writing direct, together with a certified cheque or bank draft payable to or to the order of the Company in payment of the purchase price of the number of Warrant Shares subscribed for. The Holder is advised to read “Instruction to Holders” attached hereto as Appendix “A” for details on how to complete the Warrant Exercise Form..

 

 

1 One-half of one Warrant Share of the Company.

 

2 Eighteen (18) months from the date of consummation of the Company’s offering of up to 57,000,000 Units of Common Stock and Warrants pursuant to the final Form 1-A Offering Circular that is qualified by the SEC.

 

   

 

 

IN WITNESS WHEREOF the Company has caused this Warrant Certificate to be executed by its duly authorized officer, this ___ day of ________, 20__ (the “Issuance Date”)3

 

ELEGANCE BRANDS INC.

 

By:    
  Amit Raj Beri, Chief Executive Officer  

 

 

3 The date of the Holder’s initial subscription to the Units of Class A Common Stock and Warrants of the Company in the Offering pursuant to a subscription agreement dated the Issuance Date.

 

   

 

 

EXHIBIT A

 

TERMS AND CONDITIONS

ATTACHED TO COMMON SHARE PURCHASE WARRANTS

ISSUED BY ELEGANCE BRANDS INC.

(the “Company”)

 

SECTION 1

 

DEFINITIONS AND INTERPRETATION

 

Definitions

 

1.1 In these Terms and Conditions, except as otherwise expressly provided herein, the following words and phrases will have the following meanings:

 

(a) “Class A Common Stock” means the collective reference to the shares of Company Class A common stock included in the Units previously sold and being sold in the Offering, and (ii) the shares of Company Class A Common Stock issuable upon exercise of the warrants included in the Units of Securities sold in the Offering, inclusive of the Warrant Shares issuable upon exercise of this Warrant.

 

(b) “Company” means Elegance Brands Inc. and includes any successor corporations.

 

(c) “Company’s auditor” means the independent accounting firm duly appointed to audit the financial statements of the Company.

 

(d) “Exercise Price” means US$0.75 per Warrant Share, as the same may be adjusted pursuant to Section 5.

 

(e) “Expiration Date” means the date defined as such on the face page of the Warrant Certificate.

 

(f) “Expiration Time” means 5:00 p.m. Pacific time on the Expiration Date.

 

(g) “Holder” means the registered holder of a Warrant.

 

(h) “Joint Actors” has the meaning ascribed thereto in §7.1.

 

(i) “Offering” means the offering by the Company of Units of Class A Common Stock and warrants identical to this Warrant pursuant to a Regulation A+ Offering of such Units of Securities pursuant to a Form 1-A Offering Circular that has be qualified or requalified by the SEC.

 

(j) “person” means an individual, corporation, partnership, trustee or any unincorporated organization, and words of similar import.

 

(k) “Section” or “§” means the section headings in these Terms and Conditions.

 

(l) “Securities” means collectively the Units, the Class A Common Stock and the warrants sold and being sold in the Offering, including this Warrant.

 

(m) “Units” shall mean the units of Class A Common Stock and warrants previously sold and being sold in the Offering.

 

   

 

 

(n) “Warrant” means the warrant evidenced by the certificate, one Warrant entitles the holder to purchase one-half of one Warrant Share (subject to adjustment) on or before the Expiration Date at the Exercise Price set forth in the Warrant Certificate.

 

(o) “Warrant Certificate” means the certificate evidencing the Warrant.

 

(p) “Warrant Exercise Form” means Appendix “B” hereof.

 

(q) “Warrant Share” or “Warrant Shares” means the individual or collective reference to the shares of Class A Common Stock of the Company issuable upon exercise of this Warrant and any additional Shares resulting from any event referred to in §4.7.

 

(r) “Warrant Transfer Form” means Appendix “C” hereof.

 

Interpretation

 

1.2 In these Terms and Conditions, except as otherwise expressly provided herein:

 

(a) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section, clause, subclause or other subdivision;

 

(b) a reference to a Section means a Section of these Terms and Conditions and the symbol § followed by a number or some combination of numbers and letters refers to the section, paragraph or subparagraph of these Terms and Conditions so designated;

 

(c) the headings are for convenience only, do not form a part of these Terms and Conditions and are not intended to interpret, define or limit the scope, extent or intent of these Terms and Conditions or any of its provisions;

 

(d) all dollar amounts referred to herein are expressed in United States funds; and

 

(e) words importing the singular number include the plural and vice versa, and words importing the masculine gender include feminine and neuter genders.

 

Applicable Law

 

1.3 The Warrants issued hereunder will be construed in accordance with the laws of the state of Delaware and will be treated in all respects as legal contracts under the laws of the state of Delaware.

 

   

 

 

SECTION 2

 

ISSUE OF WARRANTS

 

Lost or Destroyed Warrant Certificate

 

2.1 In case a Warrant Certificate will become mutilated, lost, destroyed or stolen, the Company in its discretion may issue and deliver a new Warrant Certificate of like date and tenor as the one mutilated, lost, destroyed or stolen in exchange for, and in place of, and upon cancellation of such mutilated Warrant Certificate, or in lieu of and in substitution for such lost, destroyed or stolen Warrant Certificate, and the Warrants represented by such substituted Warrant Certificate will be entitled to the benefit hereof and rank equally in accordance with its terms with all other Warrants of the same issue. The Company may charge a reasonable fee for the issuance and delivery of a new Warrant Certificate.

 

2.2 The applicant for the issue of a new Warrant Certificate pursuant hereto will bear the cost of the issue thereof and in the case of loss, destruction or theft furnish to the Company such evidence of ownership, and of loss, destruction or theft of the Warrant Certificate so lost, destroyed or stolen as will be satisfactory to the Company in its discretion; and such applicant may also be required to furnish indemnity in amount and form satisfactory to the Company in its discretion and will pay the reasonable charges of the Company in connection therewith.

 

Holder not a Warrant Shareholder

 

2.3 Until this Warrant is exercised in whole or in part, this Warrant alone does not confer upon the Holder the rights of a stockholder of the Company, nor entitle the Holder to any right or interest in respect thereof, except as expressly provided for in the Warrant Certificate.

 

U.S. Securities Law Matters

 

2.4 This Warrant may not be exercised unless the Warrant Shares issuable upon exercise of this Warrant and other warrants included in the Offering have been registered or qualified under the Securities Act and the applicable state securities legislation or an exemption from such registration requirements is available. Until the Company’s Form 1-A Offering Circular has been qualified or requalified by the SEC, certificates representing the Warrant Shares issued in the United States or to U.S. Persons will bear a legend restricting the transfer and exercise of such securities under applicable United States federal and state securities laws unless such Warrant Shares have been registered or qualified under the U.S. Securities Act and the applicable state securities legislation. “United States” and “U.S. person” are as defined in Regulation S under the U.S. Securities Act.

 

SECTION 3

 

OWNERSHIP AND TRANSFER OF WARRANT

 

Exchange of Warrants

 

3.1 A Warrant Certificate in any authorized denomination, upon compliance with the reasonable requirements of the Company, may be exchanged for a Warrant Certificate(s) in any other authorized denomination of the same issue entitling the Holder to purchase an equal aggregate number of Warrant Shares at the same Exercise Price and on the same terms as the Warrant Certificate so exchanged.

 

   

 

 

3.2 Warrants may be exchanged only with the Company. Any Warrants tendered for exchange will be surrendered to the Company and cancelled.

 

3.3 The Warrants are transferable on the terms and conditions contained herein and by the Holder completing and submitting to the Company a completed and duly executed Warrant Transfer Form.

 

Charges for Exchange

 

3.4 On exchange of Warrants, the Company, except as otherwise herein provided, may charge a reasonable fee for each new Warrant Certificate issued, and payment of any transfer taxes or governmental or other charges required to be paid will be made by the party requesting such exchange.

 

Ownership of Warrants

 

3.5 The Company may deem and treat the Holder of a Warrant as the absolute owner of such Warrant for all purposes and will not be affected by any notice or knowledge to the contrary.

 

Notice to Holder

 

3.6 Unless herein otherwise expressly provided, any notice to be given hereunder to a Holder will be deemed to be validly given, if mailed to the address of the Holder as set out on the Warrant Certificate. Any notice so given will be deemed to have been received five days from the date of mailing to the Holder or any market intermediary then holding the Warrants of the Holder in any trust account.

 

SECTION 4

 

EXERCISE OF WARRANTS

 

Method of Exercise of Warrants

 

4.1 The right to purchase Warrant Shares conferred by this Warrant may be exercised by the Holder surrendering the Warrant Certificate, together with a duly completed and executed Warrant Exercise Form and a certified cheque or bank draft payable to, or to the order of Company at the address as set out on the Warrant Certificate, for the purchase price applicable at the time of surrender in respect of the shares subscribed for in lawful money of the United States to the Company at the address as set out on the Warrant Exercise Form.

 

Effect of Exercise of Warrants

 

4.2 Upon surrender and payment as aforesaid, the Warrant Shares so subscribed for will be deemed to have been issued, and the Holder will be deemed to have become the holder of such Warrant Shares on the date of such surrender and payment, and such Warrant Shares will be issued at the Exercise Price as may be adjusted in the events and in the manner described herein.

 

   

 

 

4.3 Within 10 business days after surrender and payment as aforesaid, the Company will forthwith cause to be delivered to the person in whose name the Warrant Shares are directed to be registered as specified in such Warrant Exercise Form, or if no such direction is given, the Holder, a certificate for the appropriate number of Warrant Shares not exceeding those which the Holder is entitled to purchase pursuant to the Warrant Certificate surrendered.

 

Subscription for Less than all Warrant Shares

 

4.4 A Holder may purchase a number of Warrant Shares that is less than the number which the Holder is entitled to purchase pursuant to the surrendered Warrant Certificate. In the event of any purchase of a number of Warrant Shares less than the number which can be purchased pursuant to a Warrant Certificate, the Holder, upon exercise thereof, will, in addition to certificates representing the Warrant Shares issued on such exercise, be entitled to receive a new Warrant Certificate in respect of the balance of the Warrant Shares which the Holder would otherwise be entitled to purchase pursuant to the surrendered Warrant Certificate but which were not then purchased.

 

Expiration of Warrants

 

4.5 After the Expiration Date, all rights under the Warrants will wholly cease and terminate, and the Warrants will thereupon be void and of no effect.

 

Exercise Price

 

4.6 The price per share which must be paid to exercise a Warrant is the Exercise Price, as may be adjusted in the events and in the manner described herein.

 

Legends on Warrant Shares

 

4.7 U.S. Legends: Unless the Warrant Shares have been registered or qualified under the U.S. Securities Act and the applicable state securities legislation or an exemption from such registration requirements is available, any Warrant Shares issued upon exercise of these Warrants in the United States, or to or for the account or benefit of a U.S. person (as such term is defined in Rule 902(k) of Regulation S under the U.S. Securities Act) or a person in the United States, will be “restricted securities,” as defined in Rule 144(a)(3) under the U.S. Securities Act. The certificates representing such Warrant Shares which are “restricted securities,” as well as all certificates issued in exchange or in substitution therefor, until such time as is no longer required under the applicable requirements of the U.S. Securities Act, or applicable state securities laws, will bear, on the face of such certificate, the following legend:

 

“UNTIL SUCH TIME AS THIS WARRANT AND THE WARRANT SHARES SHALL BE REGISTERED OR QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), THIS WARRANT AND THE WARRANT SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR ASSIGNED (COLLECTIVELY, “TRANSFERRED”) IN THE ABSENCE OF A REGISTRATION STATEMENT OR FORM 1-A OFFERING CIRCULAR THAT IS DECLARED EFFECTIVE OR QUALIFIED BY THE SECURITIES AND EXCHANGE COMMISSION UNDER THE ACT, OR THE SELLER FURNISHES TO THE COMPANY AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS UNDER THE ACT.”

 

   

 

 

4.8. Foreign Sales. If the Warrant or the Warrant Shares are being sold outside the United States in compliance with the requirements of Rule 904 of Regulation S and the Company is a “foreign issuer” (as defined in Rule 902 of Regulation S) at the time of original sale or issuance of such Warrant Shares, the legends set forth above in this Section 4.8 may be removed by providing a declaration to the registrar and transfer agent of the Company in a form as the Company may prescribe from time to time; and provided, further, that, if the Warrant Shares are being sold otherwise than in accordance with Rule 904 of Regulation S and other than to the Company, the legends may be removed by delivery to the registrar and transfer agent and the Company of an opinion of counsel of recognized standing in form and substance satisfactory to the Company that such legends are no longer required under applicable requirements of the U.S. Securities Act or state securities laws.

 

SECTION 5

 

ADJUSTMENTS

 

Adjustments

 

5.1 If and whenever the Warrant Shares are subdivided into a greater, or consolidated into a lesser, number of Warrant Shares, or in the event of any payment by the Company of a stock dividend (other than a dividend paid in the ordinary course), or in the event that the Company conducts a rights offering to its stockholders, the exercise price will be decreased or increased proportionately as the case may be. Upon any such subdivision, consolidation, payment of a stock dividend or rights offering, the number of Warrant Shares deliverable upon the exercise of a Warrant and the exercise price of the Warrant will be increased or decreased proportionately as the case may be.

 

5.2 In case of any reclassification of the capital of the Company, or in the case of the merger, reorganization or amalgamation of the Company with or into any other company or of the sale of substantially all of the property and assets of the Company to any other company, each Warrant will, after such reclassification of capital, merger, amalgamation or sale, confer the right to purchase that number of Warrant Shares or other securities or property of the Company or of the company resulting from such reclassification, merger, amalgamation, or to which such sale will be made, as the case may be, which the Holder would then hold if the Holder had exercised the Holder’s rights under the Warrant before reclassification of capital, merger, amalgamation or sale; and in any such case, if necessary, appropriate adjustments will be made in the application of the provisions set forth in this Section 5 with respect to the rights and interest thereafter of the Holders to the end that the provisions set forth in this Section 5 will thereafter correspondingly be made applicable as nearly as may reasonably be in relation to any Warrant Shares or other securities or property thereafter deliverable on the exercise of a Warrant.

 

5.3 The adjustments provided for in this Section 5 are cumulative.

 

   

 

 

Determination of Adjustments

 

5.4 If any question will at any time arise with respect to any adjustments to be made under §5.1 and §5.2, such question will be conclusively determined by the Company’s auditor or, if the Company’s auditor declines to so act, any other certified public accountant that the Company may designate (acting reasonably) and who will have access to all appropriate records, and such determination will be binding upon the Company and the Holder.

 

SECTION 6

 

COVENANTS BY THE COMPANY

 

Reservation of Warrant Shares

 

6.1 The Company will reserve, and there will remain unissued out of its authorized capital, a sufficient number of Warrant Shares to satisfy the rights of purchase provided for in all Warrants from time to time outstanding.

 

Securities Qualification Requirements

 

6.2 If, in the opinion of counsel for the Company, any prospectus or other filing is required to be filed with or any permission is required to be obtained from any securities regulatory body or any other step is required under any Federal or Provincial law before any Warrant Shares which the Holder is entitled to purchase pursuant to the Holder’s Warrant may properly and legally be issued upon exercise thereof, the Company covenants that it will take such action.

 

SECTION 7

 

RESTRICTION ON EXERCISE

 

Blocking Language

 

7.1 Notwithstanding anything contained herein to the contrary, the rights represented by this Warrant Certificate will not be exercisable by the Holder, in whole or in part, and the Company will not give effect to any such exercise, if, after giving effect to such exercise, the Holder, together with any person or company acting jointly or in concert with the Holder (the “Joint Actors”) would in the aggregate beneficially own, or exercise control or direction over that number of voting securities of the Company which is twenty percent (20%) or greater of the total issued and outstanding voting securities of the Company, immediately after giving effect to such exercise. For greater certainty, the rights represented by this Warrant Certificate will not be exercisable by the Holder, in whole or in part, and the Company will not give effect to any such exercise, if, after giving effect to such exercise, the Holder, together with its Joint Actors, would be deemed to hold a number of voting securities sufficient to materially affect the control of the Company.

 

   

 

 

7.2 Notwithstanding any provision to the contrary contained herein, no Warrant Shares will be issued pursuant to the exercise of any Warrant if the issuance of such securities would constitute a violation of the securities laws of any applicable jurisdiction, and the certificates evidencing the Warrant Shares thereby issued may bear such legend as may, in the opinion of legal counsel to the Company, be necessary in order to avoid a violation of any securities laws of any applicable jurisdiction or to comply with the requirements of any stock exchange on which the Warrant Shares of the Company are listed, provided that, at any time, in the opinion of legal counsel to the Company, such legends are no longer necessary in order to avoid a violation of any such laws, or the holder of any such legended certificate, at that holder’s expense, provides the Company with evidence satisfactory in form and substance to the Company (which may include an opinion of legal counsel satisfactory to the Company) to the effect that such holder is entitled to sell or otherwise transfer such Warrant Shares in a transaction in which such legends are not required, such legended certificate may thereafter be surrendered to the Company in exchange for a certificate which does not bear such legend.

 

SECTION 8

 

MODIFICATION OF TERMS, SUCCESSORS

 

Modification of Terms and Conditions for Certain Purposes

 

8.1 From time to time the Company may, subject to the provisions of the Warrant Certificate, when so directed by the Holders, modify the terms and conditions hereof, for any one or more or all of the following purposes:

 

(a) adding to the provisions hereof such additional covenants and enforcement provisions as, in the opinion of counsel for the Company, are necessary or advisable in the circumstances;

 

(b) making such provisions not inconsistent herewith as may be necessary or desirable with respect to matters or questions arising hereunder or for the purpose of obtaining a listing or quotation of Warrants on any stock exchange or trading platform;

 

(c) adding to or altering the provisions hereof in respect of the registration of Warrants making provision for the exchange of Warrant Certificates of different denominations; and making any modification in the form of Warrant Certificates which does not affect the substance thereof;

 

(d) for any other purpose not inconsistent with the terms hereof, including the correction or rectification of any ambiguities, defective provisions, errors or omissions herein; and

 

(e) to evidence any succession of any corporation and the assumption by any successor of the covenants of the Company contained herein and in the Warrants as provided hereafter in this Section 8.

 

Company may Amalgamate on Certain Terms

 

8.2 Nothing herein contained will prevent any amalgamation or merger of the Company with or into any other company, or the sale of the property or assets of the Company to any company lawfully entitled to acquire the same; provided however that the company formed by such merger or amalgamation or which acquires by conveyance or transfer all or substantially all the properties and assets of the Company will be a company organized and existing under the laws of Canada or of the United States of America or any Province, State, District or Territory thereof, which will, simultaneously with such amalgamation, merger, conveyance or transfer, assume the due and punctual performance and observance of all the covenants and conditions hereof to be performed or observed by the Company and will succeed to and be substituted for the Company, and such changes in phraseology and form (but not in substance) may be made in the Warrant Certificate as may be appropriate in view of such amalgamation, merger or transfer.

 

Additional Financings

 

8.3 Nothing herein contained will prevent the Company from issuing any other securities or rights with respect thereto during the period within which a Warrant is exercisable, upon such terms as the Company may deem appropriate.

 

[End of Exhibit A]

 

   

 

 

APPENDIX “A”

INSTRUCTIONS TO HOLDERS

 

TO EXERCISE:

 

To exercise Warrants, the Holder must complete, sign and deliver the Warrant Exercise Form, attached as Appendix “B” hereto, and deliver the Warrant Certificate(s) to the Company indicating the number of common Warrant Shares to be acquired.

 

TO TRANSFER:

 

To transfer Warrants, the Holder must complete, sign and deliver the Warrant Transfer Form, attached as Appendix “C and deliver the Warrant Certificate(s) to the Company. The Company may require such other certificates or opinions to evidence compliance with applicable securities legislation in the United States.

 

To transfer Warrants, the Warrant Holder’s signature on the Warrant Transfer Form must be guaranteed by an authorized officer of a chartered bank, trust company or an investment dealer who is a member of a recognized stock exchange.

 

GENERAL:

 

If forwarding any documents by mail, registered mail must be employed.

 

If the Warrant Exercise Form is signed by a trustee, executor, administrator, curator, guardian, attorney, officer of a corporation or any person acting in a fiduciary or representative capacity, the Warrant Certificate must also be accompanied by evidence of authority to sign satisfactory to the Company.

 

The address of the Company is:

 

Elegance Brands, Inc.

9100 Wilshire Blvd. Suite 362W

Beverly Hills, CA 90212

(424) 313-7471

 

[End of Appendix “A”]

 

   

 

 

APPENDIX “B”

WARRANT EXERCISE FORM

 

Elegance Brands, Inc.

9100 Wilshire Blvd. Suite 362W

Beverly Hills, CA 90212

(424) 313-7471

 

The undersigned Holder of the within Warrants hereby subscribes for ____________ shares of Class A Common Stock (the “Warrant Shares”) of ELEGANCE BRANDS INC. (the “Company”) pursuant to the within Warrants on the terms and price specified in the Warrants. This subscription is accompanied by a certified cheque or bank draft payable to or to the order of the Company for the whole amount of the purchase price of the Warrant Shares.

The undersigned hereby directs that the Warrant Shares be registered as follows:

 

NAME(S) IN FULL   ADDRESS(ES)   NUMBER OF WARRANT SHARES
         

 

Unless the Warrant Shares have been registered or qualified under the Securities Act and the applicable state securities legislation, as at the time of exercise hereunder, the undersigned Warrantholder represents, warrants and certifies as follows (check one):

 

(A) [  ] the undersigned Warrantholder at the time of exercise of the Warrant is not in the United States, is not a “U.S. person” as defined in Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and is not exercising the Warrant for the account or benefit of a U.S. person or a person in the United States (as defined in Regulation S), and did not execute or deliver this exercise form in the United States; OR

 

(B) [  ] the undersigned Warrantholder is resident in the United States, is a U.S. person, or is exercising the Warrant for the account or benefit of a U.S. person or a person in the United States (a “U.S. Holder”), and is an “accredited investor”, as defined in Rule 501(a) of Regulation D under the U.S. Securities Act (a “U.S. Accredited Investor”), and has completed the U.S. Accredited Investor Status Certificate in the form attached to this exercise form; OR

 

(C) [  ] if the undersigned Warrantholder is a U.S. Holder, the undersigned Warrantholder has delivered to the Company and the Company’s transfer agent an opinion of counsel (which will not be sufficient unless it is in form and substance satisfactory to the Company) or such other evidence satisfactory to the Company to the effect that with respect to the common shares to be delivered upon exercise of the Warrant, the issuance of such securities has been registered under the U.S. Securities Act and applicable state securities laws, or an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws is available.

 

Note: Unless the Warrant Shares have been registered or qualified under the U.S. Securities Act and the applicable state securities legislation certificates representing Warrant Shares will not be registered or delivered to an address in the United States unless box (B) or (C) immediately above is checked.

 

   

 

 

If the undersigned Warrantholder has indicated that the undersigned Warrantholder is a U.S. Accredited Investor by marking box (B) above, the undersigned Warrantholder additionally represents and warrants to the Company that:

 

If the undersigned has indicated that the undersigned is a U.S. Accredited Investor by marking box (B) above, the undersigned also acknowledges and agrees that:

 

1. the undersigned Warrantholder 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 Common Warrant Shares, and the undersigned is able to bear the economic risk of loss of his or her entire investment;

 

2. the undersigned is: (i) purchasing the Warrant Shares for his or her own account or for the account of one or more U.S. Accredited Investors with respect to which the undersigned is exercising sole investment discretion, and not on behalf of any other person; (ii) is purchasing the Warrant Shares for investment purposes only and not with a view to resale, distribution or other disposition in violation of United States federal or state securities laws; and (iii) in the case of the purchase by the undersigned of the Warrant Shares as agent or trustee for any other person or persons (each a “Beneficial Owner”), the undersigned Warrantholder has due and proper authority to act as agent or trustee for and on behalf of each such Beneficial Owner in connection with the transactions contemplated hereby; provided that: (x) if the undersigned Warrantholder, or any Beneficial Owner, is a corporation or a partnership, syndicate, trust or other form of unincorporated organization, the undersigned Warrantholder or each such Beneficial Owner was not incorporated or created solely, nor is it being used primarily to permit purchases without a prospectus or registration statement under applicable law; and (y) each Beneficial Owner, if any, is a U.S. Accredited Investor; and

 

3. the undersigned has not exercised the Warrants as a result of any form of general solicitation or general advertising (as such terms are used in Rule 502 of Regulation D under the U.S. Securities Act), including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media, or broadcast over radio, television, the Internet or other form of telecommunications, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.

 

4. the Company has provided to the undersigned the opportunity to ask questions and receive answers concerning the terms and conditions of the offering, and the undersigned has had access to such information concerning the Company as the undersigned has considered necessary or appropriate in connection with the undersigned’s investment decision to acquire the Warrant Shares;

 

5. until the Warrant and the Warrant shares have been registered or qualified for sale under the Securities Act, the Warrant and the Warrant Shares may be deemed “restricted securities” under applicable federal securities laws and the rules of the United States Securities and Exchange Commission;

 

7. until the Warrant and the Warrant Shares have been duly registered or qualified under the Securities Act, the Warrant and the Warrant Shares (and any certificates issued in exchange or substitution for the Warrant Shares) will bear a legend stating that such securities have not been registered under the Securities Act or the securities laws of any state of the United States, and may not be offered for sale or sold unless registered under the U.S. Securities Act and the securities laws of all applicable states of the United States, or unless an exemption from such registration requirements is available;

 

   

 

 

8. any legend will be removed by delivery to the registrar and transfer agent and the Company of an opinion of counsel, reasonably satisfactory to the Company, that such legend is no longer required under applicable requirements of the Securities Act or state securities laws;

 

9. there may be material tax consequences to the undersigned of an acquisition or disposition of the Warrant Shares;

 

10. the Company gives no opinion and makes no representation with respect to the tax consequences to the undersigned under United States federal, state, local or foreign tax law regarding the undersigned’s acquisition or disposition of any Warrant Shares;

 

11. funds representing the subscription price for the Warrant Shares which will be advanced by the undersigned to the Company upon exercise of the Warrants will not represent proceeds of crime for the purposes of the United States Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (the “PATRIOT Act”), and the undersigned acknowledges that the Company may in the future be required by law to disclose the undersigned’s name and other information relating to this exercise form and the undersigned’s subscription hereunder, on a confidential basis, pursuant to the PATRIOT Act. No portion of the subscription price to be provided by the undersigned (i) has been or will be derived from or related to any activity that is deemed criminal under the laws of the United States of America, or any other jurisdiction, or (ii) is being tendered on behalf of a person or entity who has not been identified to or by the undersigned, and it shall promptly notify the Company if the undersigned discovers that any of such representations ceases to be true and provide the Company with appropriate information in connection therewith; and

 

12. the undersigned 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 in this subscription form.

 

In the absence of instructions to the contrary, the securities or other property will be issued in the name of or to the Warrantholder hereof and will be sent by first class mail to the last address of the Warrantholder appearing on the register maintained for the Warrants.

 

DATED this _________ day of _______________, 20_____.

 

In the presence of:

 

     
Signature of Witness   Signature of Holder
     
     
Witness’s Name   Name and Title of Authorized Signatory for the Holder
     
Please print below your name and address in full.    
     

Legal Name___________________________

 

Address:_______________________________

    

 

INSTRUCTIONS FOR SUBSCRIPTION

 

The signature to the subscription must correspond in every particular with the name written upon the face of the Warrant Certificate without alteration. If the registration in respect of the certificates representing the Warrant Shares to be issued upon exercise of the Warrants differs from the registration of the Warrant Certificates the signature of the registered holder must be guaranteed by an authorized officer of a bank, or of a major trust company, or by a medallion signature guarantee from a member recognized under the Signature Medallion Guarantee Program, or from a similar entity in the United States, or in accordance with industry standards.

 

In the case of persons signing by agent or attorney or by personal representative(s), the authority of such agent, attorney or representative(s) to sign must be proven to the satisfaction of the Company.

 

If the Warrant Certificate and the form of subscription are being forwarded by mail, registered mail must be employed.

 

   

 

 

U.S. ACCREDITED INVESTOR STATUS CERTIFICATE

 

In connection with the exercise of certain outstanding warrants of ELEGANCE BRANDS INC. (the “Company”) by the Warrantholder, the Warrantholder hereby represents and warrants to the Company that the Warrantholder, and each beneficial owner (each a “Beneficial Owner”), if any, on whose behalf the Warrantholder is exercising such warrants, satisfies one or more of the following categories of Accredited Investor (please write “W/H” for the undersigned Warrantholder, and “B/O” for each beneficial owner, if any, on each line that applies):

 

_______ (1) Any bank as defined in Section 3(a)(2) of the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the U.S. Securities Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to Section 15 of the U.S. Securities Exchange Act of 1934; any insurance company as defined in Section 2(a)(13) of the U.S. Securities Act; any investment company registered under the U.S. Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the U.S. Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of US$5,000,000; any employee benefit plan within the meaning of the U.S. Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of US$5,000,000, or, if a self-directed plan, with investment decisions made solely by persons that are “accredited investors” (as such term is defined in Rule 501 of Regulation D of the U.S. Securities Act);

 

_______ (2) Any private business development company as defined in Section 202(a)(22) of the U.S. Investment Advisers Act of 1940;

 

_______ (3) Any organization described in Section 501(c)(3) of the U.S. Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of US$5,000,000;

 

_______ (4) Any trust with total assets in excess of US$5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person (being defined as a person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the prospective investment);

 

_______ (5) A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of purchase, exceeds US$1,000,000 (for the purposes of calculating net worth, (i) the person’s primary residence shall not be included as an asset; (ii) indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of this certification, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of this certification exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and (iii) indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence shall be included as a liability);

 

_______ (6) A natural person who had annual gross income during each of the last two full calendar years in excess of US$200,000 (or together with his or her spouse in excess of US$300,000) and reasonably expects to have annual gross income in excess of US$200,000 (or together with his or her spouse in excess of US$300,000) during the current calendar year, and no reason to believe that his or her annual gross income will not remain in excess of US$200,000 (or that together with his or her spouse will not remain in excess of US$300,000) for the foreseeable future;

 

_______ (7) Any director or executive officer of the Company; or

 

_______ (8) Any entity in which all of the equity owners meet the requirements of at least one of the above categories (if this alternative is selected you must identify each equity owner and provide statements for each demonstrating how they qualify as an accredited investor).

__________

 

[End of Appendix “B”]

 

   

 

APPENDIX “C”

WARRANT TRANSFER FORM

 

Elegance Brands, Inc.

9100 Wilshire Blvd. Suite 362W

Beverly Hills, CA 90212

(424) 313-7471

 

FOR VALUE RECEIVED, the undersigned holder of the within Warrants hereby sells, assigns and transfers to _______________________________, ________________ Warrants of Elegance Brands Inc. (the “Company”) registered in the name of the undersigned on the records of the Company and irrevocably appoints ________________ the attorney of the undersigned to transfer the said securities on the books or register with full power of substitution.

 

The undersigned hereby directs that the Warrants hereby transferred be issued and delivered as follows:

 

NAME IN FULL____________________________________________

 

ADDRESS__________________________________________________

 

NUMBER OF WARRANTS___________________________________

 

 

DATED this _________ day of _______________, 20____.

 

     
Signature of Warrant Holder   Signature Guaranteed

 

INSTRUCTIONS FOR TRANSFER

 

Signature of the Warrant Holder must be the signature of the person appearing on the face of this Warrant Certificate.

 

If the Transfer Form is signed by a trustee, executor, administrator, curator, guardian, attorney, officer of a corporation or any person acting in a fiduciary or representative capacity, the certificate must be accompanied by evidence of authority to sign satisfactory to the Company.

 

The signature on the Transfer Form must be guaranteed by a chartered bank or trust company, or a member firm of an approved signature guarantee medallion program. The guarantor must affix a stamp bearing the actual words: “SIGNATURE GUARANTEED.”

 

The Warrants will only be transferable in accordance with applicable laws. ap

 

[End of Appendix “C”]