Exhibit 10.3
REAL VALUE ESTATES, INC.
REGULATION S SUBSCRIPTION AGREEMENT
AND INVESTMENT REPRESENTATION
SECTION 1.
1.1 Subscription.
(a) The undersigned, intending to be legally bound, hereby irrevocably
subscribes for and agrees to purchase ___________ shares (the "Shares") of the
common stock (the "Common Stock") of Real Value Estates, Inc, a Nevada
corporation (the "Company") in a transaction exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act").
The undersigned understands that the Shares are being sold in connection with an
offering by the Company of an aggregate of up to 2,475,000 shares of Common
Stock for total proceeds of up to $99,000.00
1.2 Purchase of Shares.
The undersigned understands and acknowledges that the purchase price to be
remitted to the Company in exchange for the Shares shall be ___________ dollars
($________) or $0.04 per Share. The Company shall deliver the Shares to the
undersigned promptly after the acceptance of this Subscription Agreement by the
Company.
1.3 Acceptance or Rejection.
(a) The undersigned understands and agrees that the Company reserves the
right to reject this subscription for the Shares if, in its reasonable judgment,
it deems such action in the best interest of the Company, at any time prior to
the Closing, notwithstanding prior receipt by the undersigned of notice of
acceptance of the undersigned's subscription.
(b) The undersigned understands and agrees that its subscription for the
Shares is irrevocable.
(c) In the event the sale of the Shares subscribed for by the undersigned
is not consummated by the Company for any reason (in which event this
Subscription Agreement shall be deemed to be rejected), this Subscription
Agreement and any other agreement entered into between the undersigned and the
Company relating to this subscription shall thereafter have no force or effect
and the Company shall promptly return or cause to be returned to the undersigned
the purchase price remitted to the Company by the undersigned, without interest
thereon or deduction there from, in exchange for the Shares.
SECTION 2.
2.1 Closing. The closing (the "Closing") of the purchase and sale of the Shares,
shall occur simultaneously with the acceptance by the Company of the
undersigned's subscription, as evidenced by the Company's execution of this
Subscription Agreement.
SECTION 3.
3.1 Investor Representations and Warranties. The undersigned hereby
acknowledges, represents and warrants to, and agrees with, the Company and its
affiliates as follows:
(a) Investment Purposes. The undersigned is acquiring the Shares for his
own account as principal, not as a nominee or agent, for investment purposes
only, and not with a view to, or for, resale, distribution or fractionalization
thereof in whole or in part and no other person has a direct or indirect
beneficial interest in such Shares or any portion thereof. Further, the
undersigned does not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participations to such person or to
any third person, with respect to the Shares for which the undersigned is
subscribing or any part of the Shares.
(b) Authority. The undersigned has full power and authority to enter into
this Agreement, the execution and delivery of this Agreement has been duly
authorized, if applicable, and this Agreement constitutes a valid and legally
binding obligation of the undersigned.
(c) No General Solicitation. The undersigned is not subscribing for the
Shares as a result of or subsequent to any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or presented at any seminar or meeting, or
any solicitation of a subscription by person previously not known to the
undersigned in connection with investment securities generally.
(d) No Obligation to Register Shares. The undersigned understands that the
Company is under no obligation to register the Shares under the Securities Act,
or to assist the undersigned in complying with the Securities Act or the
securities laws of any state of the United States or of any foreign
jurisdiction.
(e) Investment Experience. The undersigned is (i) experienced in making
investments of the kind described in this Agreement, (ii) able, by reason of the
business and financial experience of its officers (if an entity) and
professional advisors (who are not affiliated with or compensated in any way by
the Company or any of its affiliates or selling agents), to protect its own
interests in connection with the transactions described in this Agreement, and
(iii) able to afford the entire loss of its investment in the Shares.
(f) Exemption from Registration. The undersigned acknowledges his
understanding that the offering and sale of the Shares is intended to be exempt
from registration under the Securities Act. In furtherance thereof, in addition
to the other representations and warranties of the undersigned made herein, the
undersigned further represents and warrants to and agrees with the Company and
its affiliates as follows:
2
(1) The undersigned realizes that the basis for the exemption may not
be present if, notwithstanding such representations, the undersigned has in mind
merely acquiring the Shares for a fixed or determinable period in the future, or
for a market rise, or for sale if the market does not rise. The undersigned does
not have any such intention;
(2) The undersigned has the financial ability to bear the economic
risk of his investment, has adequate means for providing for his current needs
and personal contingencies and has no need for liquidity with respect to his
investment in the Company; and
(3) The undersigned has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of the
prospective investment in the Shares. The undersigned also represents it has not
been organized for the purpose of acquiring the Shares; and
(4) The undersigned has been provided an opportunity for a reasonable
period of time prior to the date hereof to obtain additional information
concerning the offering of the Shares, the Company and all other information to
the extent the Company possesses such information or can acquire it without
unreasonable effort or expense.
(g) Economic Considerations. The undersigned is not relying on the Company,
or its affiliates or agents with respect to economic considerations involved in
this investment. The undersigned has relied solely on its own advisors.
(h) No Other Company Representations. No representations or warranties have
been made to the undersigned by the Company, or any officer, employee, agent,
affiliate or subsidiary of the Company, other than the representations of the
Company contained herein, and in subscribing for Shares the undersigned is not
relying upon any representations other than those contained herein.
(i) Compliance with Laws. Any resale of the Shares during the `distribution
compliance period' as defined in Rule 902(f) to Regulation S shall only be made
in compliance with exemptions from registration afforded by Regulation S.
Further, any such sale of the Shares in any jurisdiction outside of the United
States will be made in compliance with the securities laws of such jurisdiction.
The Investor will not offer to sell or sell the Shares in any jurisdiction
unless the Investor obtains all required consents, if any.
(j) Regulation S Exemption. The undersigned understands that the Shares are
being offered and sold to him in reliance on an exemption from the registration
requirements of United States federal and state securities laws under Regulation
S promulgated under the Securities Act and that the Company is relying upon the
truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the Investor set forth herein in order to
determine the applicability of such exemptions and the suitability of the
Investor to acquire the Shares. In this regard, the undersigned represents,
warrants and agrees that:
3
(1) The undersigned is not a U.S. Person (as defined below) and is not an
affiliate (as defined in Rule 501(b) under the Securities Act) of the Company
and is not acquiring the Shares for the account or benefit of a U.S. Person. A
U.S. Person means any one of the following:
(A) any natural person resident in the United States of America;
(B) any partnership or corporation organized or incorporated under the laws
of the United States of America;
(C) any estate of which any executor or administrator is a U.S. person;
(D) any trust of which any trustee is a U.S. person;
(E) any agency or branch of a foreign entity located in the United States
of America;
(F) any non-discretionary account or similar account (other than an estate
or trust) held by a dealer or other fiduciary for the benefit or account of a
U.S. person;
(G) any discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated or (if an
individual) resident in the United States of America; and
(H) any partnership or corporation if:
(i) organized or incorporated under the laws of any foreign jurisdiction;
and
(ii) formed by a U.S. person principally for the purpose of investing in
securities not registered under the Securities Act, unless it is organized or
incorporated, and owned, by accredited investors (as defined in Rule 501(a)
under the Securities Act) who are not natural persons, estates or trusts.
(2) At the time of the origination of contact concerning this Agreement and
the date of the execution and delivery of this Agreement, the undersigned was
outside of the United States.
(3) The undersigned will not, during the period commencing on the date of
issuance of the Shares and ending on the first anniversary of such date, or such
shorter period as may be permitted by Regulation S or other applicable
securities law (the "Restricted Period"), offer, sell, pledge or otherwise
transfer the Shares in the United States, or to a U.S. Person for the account or
for the benefit of a U.S. Person, or otherwise in a manner that is not in
compliance with Regulation S.
(4) The undersigned will, after expiration of the Restricted Period, offer,
sell, pledge or otherwise transfer the Shares only pursuant to registration
4
under the Securities Act or an available exemption there from and, in accordance
with all applicable state and foreign securities laws.
(5) The undersigned was not in the United States, engaged in, and prior to
the expiration of the Restricted Period will not engage in, any short selling of
or any hedging transaction with respect to the Shares, including without
limitation, any put, call or other option transaction, option writing or equity
swap.
(6) Neither the undersigned nor or any person acting on his behalf has
engaged, nor will engage, in any directed selling efforts to a U.S. Person with
respect to the Shares and the Investor and any person acting on his behalf have
complied and will comply with the "offering restrictions" requirements of
Regulation S under the Securities Act.
(7) The transactions contemplated by this Agreement have not been
pre-arranged with a buyer located in the United States or with a U.S. Person,
and are not part of a plan or scheme to evade the registration requirements of
the Securities Act.
(8) Neither the undersigned nor any person acting on his behalf has
undertaken or carried out any activity for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the market in the
United States, its territories or possessions, for any of the Shares. The
undersigned agrees not to cause any advertisement of the Shares to be published
in any newspaper or periodical or posted in any public place and not to issue
any circular relating to the Shares, except such advertisements that include the
statements required by Regulation S under the Securities Act, and only offshore
and not in the U.S. or its territories, and only in compliance with any local
applicable securities laws.
(9) Each certificate representing the Shares shall be endorsed with the
following legends, in addition to any other legend required to be placed thereon
by applicable federal or state securities laws:
(A) "THE SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS
(AS DEFINED IN REGULATIONS UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("THE
SECURITIES ACT")) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S
PROMULGATED UNDER THE SECURITIES ACT."
(B) "TRANSFER OF THESE SECURITIES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH
THE PROVISIONS OF REGULATIONS, PURSUANT TO REGISTRATION UNDER THE SECURITIES
ACT, OR PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS
MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT."
(10) 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 of the Shares set forth in this Section
3.
5
(k) Accredited Investor. The undersigned is an "accredited investor" as
that term is defined in Rule 501 of the General Rules and Regulations under the
Securities Act by reason of Rule 501(a)(3).
(l) Potential Loss of Investment; Risk Factors. The undersigned understands
that an investment in the Shares is a speculative investment which involves a
high degree of risk and the potential loss of his entire investment. The
undersigned understands that the following factors, among others, could cause
the loss of any or all of his investment.
(1) The Company is a development stage company with no operating history
for the undersigned to evaluate its business. The Company was incorporated in
the State of Nevada in December 2007, and as a result is only in the very early
stages of development. Because the Company has no operating history, it is
difficult to evaluate its business and future prospects. The undersigned has
also considered the uncertainties and difficulties frequently encountered by
companies, such as the Company, in their early stages of development. The
Company's revenue and income potential is unproven and its business model is
still emerging. If its business model does not prove to be profitable, the
undersigned may lose all of his investment.
(2) The Company currently does not have enough working capital to satisfy
its capital needs. The Company is dependent upon its management team to fund its
ongoing operations, and cannot be certain that future financing will be
available to it on acceptable terms when it needs it. The Company can give no
assurances that it will be able to sell any portion of this offering or that
management will continue to fund its ongoing operations. This, along with the
possibility of other factors and circumstances the Company cannot predict, may
require it to seek additional financing faster than anticipated. If the Company
is unable to obtain financing to meet its needs, the undersigned may lose of his
investment.
(3) The Company's officers and directors will only devote a limited amount
of time to the Company. Their divided interests may hinder the Company's ability
to generate revenue. This could result in missed business opportunities and
worse-than-expected operating results. The undersigned may lose his entire
investment.
(4) Management has never operated in the industry in which it intends to
operate. This lack of experience may result in the Company's needing to employ
outside experts that have such experience. The additional cost could result in a
net operating loss and, ultimately, could result in the Company's failure.
Management's inexperience may limit the Company's ability to generate revenues.
The Company may never achieve successful operations, and the undersigned may
lose his entire investment.
(m) Investment Commitment. The undersigned's overall commitment to
investments which are not readily marketable is not disproportionate to the
undersigned's net worth, and an investment in the Shares will not cause such
overall commitment to become excessive.
6
(n) Receipt of Information. The undersigned has received all documents,
records, books and other information pertaining to the undersigned's investment
in the Company that has been requested by the undersigned.
(o) Investor Questionnaire. The undersigned represents and warrants to the
Company that all information that the undersigned has provided to the Company,
including, without limitation, the information in the Investor Questionnaire
attached hereto as Exhibit 1 or previously provided to the Company (the
"Investor Questionnaire"), is correct and complete as of the date hereof.
(p) No Reliance. Other than as set forth herein, the undersigned is not
relying upon any other information, representation or warranty by the Company or
any officer, director, stockholder, agent or representative of the Company in
determining to invest in the Shares. The undersigned has consulted, to the
extent deemed appropriate by the undersigned, with the undersigned's own
advisers as to the financial, tax, legal and related matters concerning an
investment in the Shares and on that basis believes that his or its investment
in the Shares is suitable and appropriate for the undersigned.
(q) No Governmental Review. The undersigned is aware that no federal or
state agency has (i) made any finding or determination as to the fairness of
this investment, (ii) made any recommendation or endorsement of the Shares or
the Company, or (iii) guaranteed or insured any investment in the Shares or any
investment made by the Company.
(r) Price of Shares. The undersigned understands that the price of the
Shares offered hereby bear no relation to the assets, book value or net worth of
the Company and were determined arbitrarily by the Company. The undersigned
further understands that there is a substantial risk of further dilution on his
or its investment in the Company.
SECTION 4.
4.1 Company's Representations and Warranties. The Company represents and
warrants to the undersigned as follows:
(a) Organization of the Company. The Company is a corporation duly
organized and validly existing and in good standing under the laws of the State
of Nevada.
(b) Authority. (a) The Company has the requisite corporate power and
authority to enter into and perform its obligations under this Agreement and to
issue the Shares; (b) the execution and delivery of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action and no
further consent or authorization of the Company or its Board of Directors or
stockholders is required; and (c) this Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency, or
7
similar laws relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general application.
(c) Exemption from Registration; Valid Issuances. The sale and issuance of
the Shares, in accordance with the terms and on the bases of the representations
and warranties of the undersigned set forth herein, may and shall be properly
issued by the Company to the undersigned pursuant to any applicable federal or
state law. When issued and paid for as herein provided, the Shares shall be duly
and validly issued, fully paid, and non assessable. Neither the sales of the
Shares pursuant to, nor the Company's performance of its obligations under, this
Agreement shall (a) result in the creation or imposition of any liens, charges,
claims or other encumbrances upon the Shares or any of the assets of the
Company, or (b) entitle the other holders of the Common Stock of the Company to
preemptive or other rights to subscribe to or acquire the Common Stock or other
securities of the Company. The Shares shall not subject the undersigned to
personal liability by reason of the ownership thereof.
(d) No General Solicitation or Advertising in Regard to this Transaction.
Neither the Company nor any of its affiliates nor any person acting on its or
their behalf (a) has conducted or will conduct any general solicitation (as that
term is used in Rule 502(c) of Regulation D) or general advertising with respect
to any of the Shares, or (b) made any offers or sales of any security or
solicited any offers to buy any security under any circumstances that would
require registration of the Common Stock under the Securities Act.
SECTION 5.
5.1 Indemnity. The undersigned agrees to indemnify and hold harmless the
Company, its officers and directors, employees and its affiliates and their
respective successors and assigns and each other person, if any, who controls
any thereof, against any loss, liability, claim, damage and expense whatsoever
(including, but not limited to, any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any litigation
commenced or threatened or any claim whatsoever) arising out of or based upon
any false representation or warranty or breach or failure by the undersigned to
comply with any covenant or agreement made by the undersigned herein or in any
other document furnished by the undersigned to any of the foregoing in
connection with this transaction.
5.2 Modification. Neither this Agreement nor any provisions hereof shall be
modified, discharged or terminated except by an instrument in writing signed by
the party against whom any waiver, change, discharge or termination is sought.
5.3 Notices. Any notice, demand or other communication which any party
hereto may be required, or may elect, to give to anyone interested hereunder
shall be sufficiently given if (a) deposited, postage prepaid, in a United
States mail letter box, registered or certified mail, return receipt requested,
addressed to such address as may be given herein, or (b) delivered personally at
such address.
5.4 Counterparts. This Agreement may be executed through the use of
separate signature pages or in any number of counterparts and by facsimile, and
each of such counterparts shall, for all purposes, constitute one agreement
8
binding on all parties, notwithstanding that all parties are not signatories to
the same counterpart. Signatures may be facsimiles.
5.5 Binding Effect. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties and their heirs,
executors, administrators, successors, legal representatives and assigns. If the
undersigned is more than one person, the obligation of the undersigned shall be
joint and several and the agreements, representations, warranties and
acknowledgments herein contained shall be deemed to be made by and be binding
upon each such person and his heirs, executors, administrators and successors.
5.6 Entire Agreement. This Agreement and the documents referenced herein
contain the entire agreement of the parties and there are no representations,
covenants or other agreements except as stated or referred to herein and
therein.
5.7 Assignability. This Agreement is not transferable or assignable by the
undersigned.
5.8 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
conflicts of law principles.
5.9 Pronouns. The use herein of the masculine pronouns "him" or "his" or
similar terms shall be deemed to include the feminine and neuter genders as well
and the use herein of the singular pronoun shall be deemed to include the plural
as well.
5.10 Further Assurances. Upon request from time to time, the undersigned
shall execute and deliver all documents, take all rightful oaths and do all
other acts that may be necessary or desirable, in the reasonable opinion of the
Company or its counsel, to effect the subscription for the Shares in accordance
herewith.
IN WITNESS WHEREOF, the undersigned has executed this Agreement on the
______ day of _______, 2008.
Amount of Investment:
$______________________
INDIVIDUAL INVESTOR:
By: _________________________
Address: ____________________
_____________________________
(Signature)
9
INVESTOR QUESTIONNAIRE
A. General Information
1. Print Full Name of Investor: Individual:
---------------------
First, Middle, Last
Partnership, Corporation, Trust,
Custodial Account, Other:
----------------------
Name of Entity
2. Address for Notices:
3. Name of Primary Contact Person: ______________________
Title:
4. Telephone Number: ______________________
5. E-Mail Address: ______________________
6. Facsimile Number: ______________________
7. Permanent Address: ______________________
(if different from Address for Notices above)
8. Authorized Signatory: ______________________
9. U.S. Investors Only:
U.S. Taxpayer Identification or
Social Security Number: ______________________
10
The Investor understands that the foregoing information will be relied upon by
the Company for the purpose of determining the eligibility of the Investor to
purchase the Shares. The Investor agrees to notify the Company immediately if
any representation or warranty contained in this Subscription Agreement,
including this Investor Questionnaire, becomes untrue at any time. The Investor
agrees to provide, if requested, any additional information that may reasonably
be required to substantiate the Investor's status as an accredited investor or
to otherwise determine the eligibility of the Investor to purchase the Shares.
The Investor agrees to indemnify and hold harmless the Company and each officer,
director, shareholder, agent and representative of the Company and their
respective affiliates and successors and assigns from and against any loss,
damage or liability due to or arising out of a breach of any representation,
warranty or agreement of the Investor contained herein.
INDIVIDUAL:
--------------------------
(Signature)
--------------------------
(Print Name)
PARTNERSHIP, CORPORATION, TRUST,
CUSTODIAL ACCOUNT, OTHER:
--------------------------
(Name of Entity)
By: __________________________
(Signature)
--------------------------
(Print Name and Title)
11
ACCEPTANCE
The above mentioned Subscription Agreement in respect of the Shares is hereby
accepted by the Company.
DATED at Zichron Xxxxx, Israel the 31st March 2008
Real Value Estates Inc
------------------------------------
Director
12
