SUBSCRIPTION AGREEMENT
Exhibit
4.1
EXHIBIT
A
Tsevni
Real Estate Group, Inc.
a
Nevada corporation
0000
X.
Xxxxx Xxx Xxxxxx Xx. Xxxxx 000-000
Xxxxxxx,
XX 00000
(Tel.
& Fax) 000-000-0000
The
undersigned has received and read the Confidential Private Placement Memorandum
dated April 14, 2006 (“Memorandum”), pursuant to which Tsevni Real Estate Group,
Inc., a Nevada corporation (“Company”), is offering for sale Units (“Offered
Units”) at $0.10 per Offered Unit, each Unit consisting of (i) one (1) share of
the Company’s $.001 par value common stock, and (ii) one warrant to purchase a
share of the Company’s common stock at $0.15 per share. The terms used and not
defined in this Subscription Agreement have the meanings specified for such
terms in the Memorandum.
1.
Subscription.
On the
terms and subject to the conditions of this Subscription Agreement and the
Memorandum, the undersigned hereby subscribes for the number of Offered Units
of
the Company, specified below for a subscription price of $0.10 per Offered
Unit.
The undersigned hereby agrees that this subscription shall be irrevocable
and
shall survive the death or disability of the undersigned. Payment of the
purchase price for the Offered Units is due upon subscription.
2.
Acceptance
of Subscription.
The
undersigned acknowledges that (i) the Company has the right to accept or
reject
this subscription in whole or in part, and (ii) this subscription shall be
deemed to be accepted by the Company only when this Subscription Agreement
is
signed by the Company. The undersigned agrees that subscriptions need not
be
accepted by the Company in the order in which subscriptions are
received.
3.
Representations,
Warranties, and Covenants of the Undersigned.
The
undersigned hereby represents and warrants to and covenants with the Company,
the Company's officers, directors, employees, attorneys, agents and any person
who has solicited this subscription as follows:
|
(a)
|
The
undersigned has adequate means of providing for his or her current
needs
and possible personal contingencies, and he or she has no need
in the
foreseeable future to sell the Offered Units or any of the Company’s
securities underlying the Offered Units. The undersigned is able
to
accommodate the economic risks of the undersigned's purchase of
Offered
Units or any of the Company’s securities underlying the Offered Units, and
the undersigned has a sufficient net worth to sustain a loss of
his or her
investment in the Company, or a portion thereof, in the event such
loss
should occur.
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(b)
|
The
undersigned has such knowledge and experience in financial and
business
matters that he or she is capable of evaluating the merits and
risks of an
investment in the Company.
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(c)
|
The
undersigned confirms that all documents, records and books, pertaining
to
his or her proposed investment in the Company have been made available
to
the undersigned.
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(d)
|
The
undersigned has had an opportunity to ask questions of and receive
satisfactory answers from the Company, or any person or persons
acting on
the Company's behalf, concerning the terms and conditions of his
or her
proposed investment in the Company, and all such questions have
been
answered to the complete satisfaction of the
undersigned.
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(e)
|
The
Offered Units will be acquired by the undersigned for his or her
own
account for investment in a manner which would not require registration
or
qualification pursuant to the provisions of the Securities Act
of 1933, as
amended (“Act”), or any state Blue Sky
law.
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(f)
|
The
undersigned understands that the offer and sale of the Offered
Units or
any of the Company’s securities underlying the Offered Units in the
individual states in transactions which satisfy the requirements
of Rule
506 of Regulation D promulgated pursuant to Section 4(2) of the
Securities
Act of 1933 are not required to be registered or qualified in the
individual states because of adoption of the National Securities
Markets
Improvement Act of 1996 (“NSMIA”). NSMIA preempts state registration and
similar qualification provisions for transactions exempt pursuant
to that
Rule 506.
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1
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(g)
|
The
undersigned represents that it has been called to his or her attention
by
those provisions of the Memorandum and by those persons with whom
the
undersigned has dealt in connection with his or her proposed investment
in
the Company, that the Company has a limited history of operation
and
minimal earnings and that the undersigned's proposed investment
in the
Company involves significant risks which may result in the loss
of that
investment, or a portion thereof.
|
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(h)
|
The
undersigned has received no representations or warranties in making
his or
her investment decision.
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(i)
|
The
undersigned acknowledges and agrees that the Company has made available
to
the undersigned or his or her personal advisors the opportunity
to obtain
appropriate information to evaluate the merits and risks of an
investment
in the Company.
|
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(j)
|
The
undersigned understands that neither the Securities and Exchange
Commission nor any Securities Administrator or similar person of
any state
or province has made any finding or determination relating to the
fairness
of any purchase of the Offered Units or any of the Company’s securities
underlying the Offered Units and that neither the Securities and
Exchange
Commission nor any Securities Administrator or similar person of
any state
or province has or will recommend or endorse a purchase of the
Offered
Units or any of the Company’s securities underlying the Offered
Units.
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(k)
|
The
undersigned is now a bona fide citizen of the United States of
America and
a bona fide resident of the state set forth below and the address
and
Social Security number or federal tax identification number set
forth
below are his true and correct residence and Social Security number
or
federal tax identification number. The undersigned has no current
intention of becoming a resident of any other state or jurisdiction.
If
the undersigned is a corporation, partnership, trust or other form
of
business organization, the undersigned represents and warrants
that the
undersigned was formed pursuant to the laws of
____________________________________, and the undersigned's principal
place of business is within such state, and that the undersigned
was not
organized for the purpose of acquiring Offered Units or any of
the
Company’s securities underlying the Offered
Units.
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(l)
|
The
undersigned hereby represents and warrants that the undersigned's
total
purchase of Offered Units shall not exceed 10% of the undersigned's
net
worth.
|
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(m)
|
By
initialing where indicated and appropriate below, the undersigned
hereby
represents and warrants that the undersigned is an “Accredited Investor”,
as defined by the provisions of Rule 501 of Regulation D promulgated
pursuant to the Act, and falls within one of the following
categories:
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______
(1)
|
The
undersigned is a director or executive officer of the Company,
or any
director, executive officer, or
general partner of a general partner of the Company;
or
|
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initials
|
|
|
______
(2)
initials
|
The
undersigned is a natural person whose individual net worth, or
joint net
worth with the undersigned's
spouse, at the time of his or her purchase exceeds $1,000,000.00;
or
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|
|
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______
(3)
initials
|
The
undersigned is a natural person who had an individual income in
excess of
$200,000.00 in each of the
2 most recent years or joint income with the undersigned's spouse
in
excess of $300,000.00 in each of those years and has a reasonable
expectation of having the same income level in the current year;
or
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______
(4)
initials
|
The
undersigned is a trust, with total assets in excess of $5,000,000.00,
not
formed for the specific purpose
of acquiring the securities offered, whose purchase is directed
by a
sophisticated person as described in Regulation 230.506(b)(2)(ii)
promulgated pursuant to the Act; or
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______
(5)
|
The
undersigned is an entity in which all of the equity owners are
Accredited
Investors.
|
|
initials
|
2
4. Indemnification. The undersigned acknowledges that he or she understands the meaning and legal consequences of the representations, warranties, and covenants specified in Paragraph 3 of this Subscription Agreement and that the Company has relied on such representations, warranties and covenants, and the undersigned hereby agrees to indemnify and hold harmless the Company, and its officers, directors, controlling persons, agents, attorneys, accountants, and employees, from any and all loss, damage or liability due to, or occurring because of, a breach of any such representation, warranty, or covenant.
5.
Subsequent
Registration of Offered Units.
The
undersigned has the right to request that the Offered Units or any of the
Company’s securities underlying the Offered Units be registered pursuant to the
provisions of the Act, or otherwise. In the event that the Company decides
to
register the Offered Units or the shares of its common stock underlying the
Offered Units, the Company shall its best efforts to prepare and file with
the
Securities and Exchange Commission such amendments and supplements to the
registration statement and the prospectus used in connection with such
registration statement necessary to comply with the provisions of the Act and
to
cause such registration statement to become effective. In the event of such
registration filing, the Company shall pay all expenses and fees incurred by
it
in registering the Offered Units and any of the securities underlying the
Offered Units. Notwithstanding the foregoing, such holder of Offered Units
shall
pay all underwriting discounts or commissions with respect to the resale of
any
of the Company’s securities underlying the Offered Units, including the shares
of common stock sold by such holder. In the absence of any registration, the
undersigned further acknowledges and agrees that the Company has no obligation
to assist the undersigned in obtaining any exemption from any registration
requirements imposed by applicable law. The undersigned also acknowledges and
agrees that he or she shall be responsible for compliance with all conditions
on
transfer imposed by a Securities Administrator or similar person of any state,
province or territory.
6.
Limitation
on Transfer of Offered Units.
The
undersigned acknowledges and agrees that he or she is aware that there are
substantial restrictions on the transferability of the Offered Units and any
of
the Company’s securities underlying the Offered Units. Because neither the
Offered Units nor any of the Company’s securities underlying the Offered Units
will be registered pursuant to the provisions of the Act, the undersigned agrees
not to sell, transfer, assign, pledge, hypothecate or otherwise dispose of
any
Offered Units or any of the Company’s securities underlying the Offered Units
unless such sale is exempt from such registration pursuant to the provisions
of
the Act or unless the Offered Units or any of the Company’s securities
underlying the Offered Units are registered pursuant to the Act. The undersigned
further acknowledges and agrees that the Company has no obligation to assist
the
undersigned in obtaining any exemption from any registration requirements
imposed by applicable law. The undersigned also acknowledges and agrees that
he
or she shall be responsible for compliance with all conditions on transfer
imposed by a Securities Administrator of any state, province or territory and
for any expenses incurred by the Company for legal and accounting services
in
connection with reviewing such a proposed transfer and issuing opinions in
connection therewith.
7.
Compliance
with Act.
The
undersigned understands and agrees that the following restrictions and
limitations are applicable to his or her purchase and any sale, transfer,
assignment, pledge, hypothecation or other disposition of Offered Units and
any
of the Company’s securities underlying the Offered Units pursuant to Section
4(2) of the Act and Rule 506 of Regulation D promulgated pursuant
thereto:
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(a)
|
The
undersigned agrees that the Offered Units and any of the Company’s
securities underlying the Offered Units shall not be sold, pledged,
hypothecated or otherwise disposed of unless the Offered Units or
the
Company’s securities underlying the Offered Units are registered pursuant
to the Act and applicable state or other applicable securities laws
or are
exempt therefrom.
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(b)
|
A
legend in substantially the following form has been or will be placed
on
any certificate(s) or other documents evidencing the Offered Units
and the
Company’s securities underlying the Offered
Units:
|
THE
SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED FOR
INVESTMENT ONLY AND HAVE NOT BEEN REGISTERED PURSUANT TO THE PROVISIONS OF
THE
SECURITIES ACT OF 1933 AS AMENDED (“ACT”), AND HAVE BEEN OFFERED AND SOLD IN
RELIANCE UPON THE EXEMPTIONS SPECIFIED IN SECTION 4(2) OF THE ACT AND RULE
506
OF REGULATION D PROMULGATED PURSUANT THERETO. WITHOUT SUCH REGISTRATION, SUCH
SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF, EXCEPT UPON DELIVERY TO THE COMPANY OR ITS TRANSFER
AGENT
OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY OR ITS TRANSFER AGENT
THAT
REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE COMPANY
OR ITS TRANSFER AGENT OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE
COMPANY OR ITS TRANSFER AGENT TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT
BE
IN VIOLATION OF THE ACT, APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR
REGULATION PROMULGATED PURSUANT THERETO.
3
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(c)
|
Stop
transfer instructions to the transfer agent of the Company have been
or
will be placed with respect to the Offered Units and any of the Company’s
applicable securities underlying the Offered Units so as to restrict
the
sale, transfer, pledge, hypothecation or other disposition thereof,
subject to the further terms hereof, including the provisions of
the
legend set forth in subparagraph (b)
above.
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(d)
|
The
legend and stop transfer instructions described in subparagraphs
(b) and
(c) above will be placed on any new certificate(s) or other documents
for
transfer.
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8.
Financial
Information.
The
undersigned has previously been furnished an Offeree Questionnaire which has
been completed and executed by the undersigned and the information contained
therein remains true and correct in material aspects.
REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK
4
OFFEREE
QUESTIONNAIRE
Tsevni
Real Estate Group, Inc.
a
Nevada corporation
0000
X.
Xxxxx Xxx Xxxxxx Xx. Xxxxx 000-000
Xxxxxxx,
XX 00000
(Tel.
& Fax) 000-000-0000
Tsevni
Real Estate Group, Inc., a Nevada corporation (“Company”) will use the responses
to this questionnaire to qualify prospective investors for purposes of federal
and state securities laws.
If
the
answer to any question below is “none” or “not applicable,” please so
indicate.
Your
answers will be kept confidential at all times. However, by signing this
questionnaire, you agree that the Company may present this questionnaire
to any
person, as it deems appropriate to establish the availability of exemptions
from
registration pursuant to state and federal securities laws.
PART
I. INDIVIDUAL INVESTORS
Investors
that are not individuals (that is, are corporations, partnerships, trusts,
etc.)
should start at PART II.
1.
Name
(as it should appear on stock certificate):
__________________________________________________________________________________
2.
Residence address:
_______________________________________________________________________________________________________
3.
Home
telephone:
_________________________________________________________________________________________________________
4.
Date
of birth:
____________________________________________________________________________________________________________
5.
Social
security number:
____________________________________________________________________________________________________
6.
United
States citizen:
q
Yes q
No
If
no,
country of citizenship:
___________________________________________________________________________________________
7.
Occupation:
_____________________________________________________________________________________________________________
8.
Number
of years:
_________________________________________________________________________________________________________
9.
Present employer:
_________________________________________________________________________________________________________
10.
Position/Title:
___________________________________________________________________________________________________________
11.
Business address:
________________________________________________________________________________________________________
12.
Business telephone:
______________________________________________________________________________________________________
13.
Business fax:
____________________________________________________________________________________________________________
14.
Please specify each state and foreign country in which you have maintained
your
principal residence during the past three years, and the dates during which
you
resided in each:
_________________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________________
5
15.
Residency:
A.
Are
you registered to vote in any state or country?
q
Yes q
No
If
yes,
in which state or countries?
_______________________________________________________________________________________
B.
Do you
have a driver’s license issued by any state or country?
q
Yes q
No
If
yes,
in which state or countries?
_______________________________________________________________________________________
C.
Do you
maintain a residence in another state or country, other than as stated in
Question 2 above?
q
Yes q
No
If
yes,
in which state or countries?
_______________________________________________________________________________________
16.
Do
you reasonably expect that either
your own
income from all sources during the current year will exceed $200,000
or
the
joint income of you and your spouse (if married) from all sources during
the
current year will exceed $300,000?
q
Yes q
No
If
no,
please specify the amount:
$________________________________________________________________________________________
17.
Percentage of your income (as shown above) anticipated to be derived from
sources other than salary: ________________________________________
18.
Was
your yearly income from all sources during each of the last two years in
excess
of $200,000 or
was
the
joint income of you and your spouse (if married) from all sources during
each of
those years in excess of $300,000?
q
Yes q
No
If
no,
please specify the amount for last year: $________________________________
and
the year before: $_____________________________
19.
Will
your net worth as of the date you purchase the Offered Units, together with
the
net worth of your spouse, be in excess of $1 million?
q
Yes q
No
If
no,
please specify the amount:
$________________________________________________________________________________________
20.
Please describe your educational background and degrees obtained, if any:
_________________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________________
6
21.
If
you have any existing personal or business relationship with the Company
or any
of its officers, directors or controlling persons, please describe the nature
and duration of each relationship:
_________________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________________
22.
Please describe in reasonable detail the nature and extent of your business,
financial and investment experience that you believe gives you the capacity
to
evaluate the merits and risks of the proposed investment and the capacity
to
protect your interests:
_________________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________________
23.
Are
you purchasing the Offered Units for your own account and for investment
purposes only?
q
Yes q
No
If
no,
please specify for whom you are investing and the reason for investing:
______________________________________________________
24.
In
evaluating this investment, will you use the services of any of the following
advisors? If so, please identify, providing address and telephone
number:
q
Accountant:
______________________________________________________________________________________________________
__________________________________________________________________________________________________________________
q
Attorney:
________________________________________________________________________________________________________
__________________________________________________________________________________________________________________
q
Licensed
investment adviser:
_________________________________________________________________________________________
__________________________________________________________________________________________________________________
________
25.
Anticipated dollar amount of subscription:
______________________________________________________________________________________
26.
Indicate type of ownership in which securities will be held:
q
Individual
q
Tenants
in common
q
Joint
tenancy with rights of survivorship (husband and wife only)
q
Community property
q
Other
(describe):
___________________________________________________________________________________________________
In
signing below, you acknowledge that the information provided in this
questionnaire is true and correct in all material respects and that you
recognize that the Company and its counsel are relying on the truth and accuracy
of that information in reliance on the exemption contained in Section 4(2)
of
the Securities Act of 1933, as amended, and Rule 506 and Regulation D. You
agree
to notify the Company promptly of any changes in the foregoing information
that
occur before the investment.
Executed
at ___________________________________________________, on
_________________________________________________________.
____________________________________________________________
(Signature)
____________________________________________________________
(Print
or
type name)
7
PART
II. NONINDIVIDUAL INVESTORS
Please
complete this PART II only if the proposed purchase is to be made by a
corporation, partnership, trust or other entity. If the investment will be
made
by more than one affiliated entity, please COMPLETE A COPY OF THIS QUESTIONNAIRE
FOR EACH ENTITY.
1.
Name
(as it will appear on stock certificate):
______________________________________________________________________________________
2.
Address of principal place of business:
_________________________________________________________________________________________
3.
Jurisdiction of formation or incorporation:
_______________________________________________________________________________________
4.
Contact person:
__________________________________________________________________________________________________________
5.
Telephone number:
________________________________________________________________________________________________________
6.
Fax
number:
_____________________________________________________________________________________________________________
7.
Type
of entity (corporation, partnership, trust, etc.):
_______________________________________________________________________________
8.
Taxpayer identification number:
______________________________________________________________________________________________
9.
Was
this entity formed for the purpose of this investment?
q
Yes q
No
If
yes, all shareholders, partners or other equity owners must answer PART I
of
this Questionnaire.
10.
Amount of your proposed investment:
$_______________________________________________________________________________________
11.
Entity’s net worth at the time the securities will be purchased:
$______________________________________________________________________
12.
Check
the appropriate box to indicate which of the following accurately describes
the
nature of the business conducted by the investing entity:
q
Private
business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940 (namely, a U.S. venture capital fund that invests primarily
through private placements in nonpublicly traded securities and makes available,
either directly or through coinvestors, to the portfolio companies significant
guidance concerning management, operations or business objectives);
q
A small
business investment company licensed by the U.S. Small Business Administration
pursuant to Section 301(c) or (d) of the Small Business Investment Act of
1958;
q
An
investment company registered pursuant to the Investment Company Act of 1940
or
a business development company as defined in Section 2(a)(48) of that
Act;
q
A bank
as defined in Section 3(a)(2) of the Securities Act of 1933 or a savings
and
loan association or other institution defined in Section 3(a)(5)(A) of that
Act,
acting in either an individual or fiduciary capacity;
q
An
insurance company as defined in Section 2(13) of the Securities Act of
1933;
q
An
employee benefit plan within the meaning of Title I of the Employee Retirement
Income Security Act of 1974 (a) whose investment decision is made by a fiduciary
that is either a bank, a savings and loan association, an insurance company
or a
registered investment advisor or
whose
total assets exceed $5 million or (b) if a self-directed plan, whose investment
decisions are made solely by persons who are accredited investors;
8
q
An
organization described in Internal Revenue Code Section 501(c)(3), a
corporation, a Massachusetts or similar business trust or a partnership,
in each
case not formed for the purpose of this investment, with total assets in
excess
of $5 million;
q
An
entity not located in the United States and whose equity owners are neither
U.S.
citizens nor U.S. residents;
q
A trust
with total assets in excess of $5 million whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) under the Securities
Act
of 1933;
q
Other
(describe):
__________________________________________________________________________________________________
13.
Please provide information detailing the business, financial and investment
experience of the entity and investment manager of the entity:
________________________________________________________________________________________________________________________
________________________________________________________________________________________________________________________
In
signing below, you acknowledge that the information provided in this
questionnaire is true and correct in all material respects and that you
recognize that the Company and its counsel are relying on the truth and accuracy
of that information in reliance on the exemption contained in Section 4(2)
of
the Securities Act of 1933, as amended, and Rule 506 and Regulation D. You
agree
to notify the Company promptly of any changes in the foregoing information
that
occur before the investment.
Executed
at ______________________________________________________, on
______________________________________________________.
_______________________________________________________________
(Print
or
type name)
By:____________________________________________________________
Title:
__________________________________________________________
9
PART
III. SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT
Number
of
Offered Units subscribe for ___________. Subscription Amount $
(number
of Offered Units multiplied by $0.10)
Make
check payable to: “Tsevni
Real Estate Group, Inc.”
EACH
SUBSCRIBER REPRESENTS THAT:
(a)
The
information contained in this Subscription Agreement is complete and accurate
and may be relied upon, and
(b)
The
undersigned will notify the Company immediately of any material change in
any
such information occurring prior to the acceptance of the undersigned’s
subscription.
IN
WITNESS WHEREOF,
the
undersigned has executed this Subscription Agreement and initialed the foregoing
statements and executed the included questionnaire this ________ day of
________, 200__.
FOR
INDIVIDUALS:
________________________________ ________________________________
Print
Name
Print
Name
________________________________
________________________________
Signature
Signature
NAME
AND SIGNATURE OF JOINT TENANT OR TENANT IN COMMON
________________________________
Print
Name
________________________________
Signature
FOR
TRUSTS, CORPORATIONS, PARTNERSHIPS
________________________________
Print
Name of
Entity
By:_____________________________
Print
name (Trustee, President or General Partner) of person(s) making investment
decision
________________________________ ________________________________
Signature
Signature
________________________________
________________________________
Signature
Signature
Agreed
to
and accepted:
Tsevni
Real Estate Group, Inc.
a
Nevada
corporation
By:
____________________________
Xxxxx
Xxxxx
Its:
President
10
WARRANT
AGREEMENT
EXHIBIT
B
Tsevni
Real Estate Group, Inc.
a
Nevada corporation
0000
X.
Xxxxx Xxx Xxxxxx Xx. Xxxxx 000-000
Xxxxxxx,
XX 00000
(Tel.
& Fax) 000-000-0000
___________
(number of warrants) Shares at $0.15 per share
This
Warrant Agreement certifies that ____________ (the “Holder”), is the owner of
___________ (number of warrants) warrants (subject to adjustment as provided
herein), each of which represent the right to subscribe for and purchase
from
Tsevni Real Estate Group, Inc., a Nevada corporation (the “Company”), one share
of the Company’s common stock, $.001 par value, (such common stock, including
any stock into which it may be changed, reclassified or converted, is herein
referred to as the “Common Stock”) ("Warrants") at the purchase price of $0.15
per share (subject to adjustment as provided herein) (the “Exercise
Price”).
THE
SECURITIES REPRESENTED BY THIS AGREEMENT ARE OFFERED FOR INVESTMENT ONLY
AND
HAVE NOT BEEN REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT
OF
1933 FROM REGISTRATION AS AMENDED ("ACT"), AND HAVE BEEN OFFERED AND SOLD
IN
RELIANCE UPON THE EXEMPTION, SPECIFIED IN SECTION 4(2) OF THE ACT AND RULE
506
OF REGULATION D PROMULGATED PURSUANT THERETO. WITHOUT SUCH REGISTRATION,
SUCH
SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED
OR
OTHERWISE DISPOSED OF, EXCEPT UPON DELIVERY TO THE COMPANY AND ITS TRANSFER
AGENT OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS TRANSFER
AGENT THAT SUCH REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER; OR THE
SUBMISSION TO THE COMPANY OR ITS TRANSFER AGENT OF SUCH OTHER EVIDENCE AS
MAY BE
SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT TO THE EFFECT THAT ANY
SUCH
TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT, APPLICABLE STATE SECURITIES
LAWS
OR ANY RULE OR REGULATION PROMULGATED PURSUANT THERETO.
The
Warrants are subject to the following provisions, terms and conditions:
1.
EXERCISE OF WARRANTS
A.
Exercise for Cash.
This
Warrant may be exercised by the Holder in whole at any time or in part from
time
to time on or before the Expiration Date by (i) surrendering this Warrant
to the
Company, (ii) giving a subscription form in the form of Exhibit
1
to this
Warrant (duly executed by the Holder) to the Company, and (iii) making payment,
in cash or by certified or official bank check payable to the order of the
Company, or by wire transfer of funds to the account of the Company, in any
such
case, in the amount obtained by multiplying (a) the number of shares of Common
Stock designated by the Holder in the subscription form by (b) the Purchase
Price then in effect. On any partial exercise the Company will forthwith
issue
and deliver to or upon the order of the Holder a new Warrant or Warrants
of like
kind, in the name of the Holder or as the Holder (upon payment by the Holder
of
any applicable transfer taxes) may request, providing in the aggregate on
the
face or faces thereof for the purchase of the number of shares of Common
Stock
for which such Warrant or Warrants may still be exercised. The Warrants may
be
exercised at any time within the period beginning on the date of this Warrant
Agreement, which is specified immediately above the signature lines of this
Warrant Agreement (“Effective Date”) and ending on that date exactly three (3)
years from the Effective Date (the “Exercise Period”) and by payment to the
Company by certified check or bank draft of the purchase price for such shares
of the Common Stock. The Company agrees that the shares of Common Stock so
purchased shall be deemed to be issued to the Holder as the record owner
of such
shares of Common Stock as of the close of business on the date on which the
Warrant Agreement shall have been surrendered and payment made for such shares
of Common Stock. Certificates representing the shares of Common Stock so
purchased shall be delivered to the Holder promptly and in no event later
than
thirty (30) days after the Warrants shall have been so exercised.
11
B.
Net Exercise. The
Holder may elect to exercise this Warrant, in whole at any time or in part
from
time to time, by receiving shares of Common Stock equal to the net issuance
value (as determined below) of this Warrant, or any part hereof, upon surrender
of the subscription form annexed hereto (duly executed by the Holder) to
the
Company (followed by surrender of this Warrant to the Company within three
Trading Days i.e., a day on whichever of the OTC Bulletin Board, any national
securities exchange, the Nasdaq or the Nasdaq SmallCap, which then constitutes
the principal securities market for the Common Stock, is open for general
trading, after surrender of such subscription form), in which event the Company
shall issue to the Holder a number of shares of Common Stock computed using
the
following formula:
X
=
Y
x (A
- B)
A
where,
|
X
=
|
the
number of shares of Common Stock to be issued to the
Holder
|
|
Y
=
|
the
number of shares of Common Stock as to which this Warrant is to
be
exercised
|
|
A
=
|
the
Current Fair Market Value of one share of Common Stock calculated
as of
the last Trading Day immediately preceding the exercise of this
Warrant
|
|
B
=
|
the
Purchase Price, or $0.15, subject to adjustment as provided in
this
Warrant.
|
For
purposes of this section 1.B., “Current Fair Market Value” means when used with
respect to the Common Stock as of a specified date with respect to each share
of
Common Stock, the average of the closing prices of the Common Stock sold
on all
securities exchanges (including the Nasdaq and the Nasdaq SmallCap) on which the
Common Stock may at the time be listed, or, if there have been no sales on
any
such exchange on such day, the average of the highest bid and lowest asked
prices on all such exchanges at the end of such day, or, if on such day the
Common Stock is not so listed, the average of the representative bid and
asked
prices quoted in the Nasdaq System as of 4:00 p.m., New York City time, or,
if
on such day the Common Stock is not quoted in the Nasdaq System, the average
of
the highest bid and lowest asked price on such day in the domestic
over-the-counter market as reported by the National Quotation Bureau,
Incorporated, or any similar successor organization, in each such case averaged
over a period of ten Trading Days consisting of the day as of which the Current
Fair Market Value of Common Stock is being determined (or if such day is
not a
Trading Day, the Trading Day next preceding such day) and the nine consecutive
Trading Days prior to such day. If on the date for which Current Fair Market
Value is to be determined the Common Stock is not listed on any securities
exchange or quoted in the Nasdaq System or the over-the-counter market, the
Current Fair Market Value of Common Stock shall be the highest price per
share
which the Company could then obtain from a willing buyer (not an employee
or
director of the Company at the time of determination) in an arms’-length
transaction for shares of Common Stock sold by the Company, from authorized
but
unissued shares, as determined in good faith by the Board of
Directors.
2.
ADJUSTMENTS AND NOTICES
A.
Adjustments.
The
Exercise Price and the number of shares of Common Stock issuable upon exercise
of each Warrant shall not be subject to adjustment.
B.
Amendment of Warrant Agreement.
This
Warrant Agreement may not be changed because of any change in the Exercise
Price
or in the number of shares of Common Stock purchasable upon the exercise
of a
Warrant. The Company may at the time in the Company’s sole discretion make any
change in the form of a warrant agreement that the Company may deem appropriate
and that does not affect the substance thereof and any warrant agreement
thereafter issued, whether in exchange or substitution for any outstanding
warrant agreement or otherwise, may be in the form so changed.
12
C.
Notice to Holder of Record Date, Dissolution, Liquidation or Winding
Up.
The
Company shall cause to be mailed (by first class mail, postage prepaid) to
the
Holder notice of the record date for any dividend, distribution or payment,
in
cash or in kind (including, without limitation, evidence of indebtedness
and
assets), with respect to shares of Common Stock at least twenty (20) calendar
days before any such date. In the event that at any time after the date hereof,
there shall be a voluntary or involuntary dissolution, liquidation or winding
up
of the Company, then the Company shall cause to be mailed (by first class
mail,
postage prepaid) to the Holder at the Holder's address as shown on the books
of
the Company, at the earliest practicable time (and, in any event, not less
than
twenty (20) calendar days before any date set for definitive action), notice
of
the date on which such dissolution, liquidation or winding up shall take
place,
as the case may be. The notices referred to above shall also specify the
date as
of which the holders of the shares of Common Stock of record or other securities
underlying the Warrants shall be entitled to receive such dividend, money
or the
property deliverable upon such dissolution, liquidation or winding up, as
the
case may be (the “Entitlement Date”). In the case of a distribution of evidence
of indebtedness or assets (other than in dissolution, liquidation or winding
up), if the Holder elects to exercise the Warrants in accordance with Section
1
of this Warrant Agreement and become a holder of the Common Stock on the
Entitlement Date, the Holder shall thereafter receive the evidence of
indebtedness or assets distributed in respect of shares of Common Stock.
In the
case of any dissolution, liquidation or winding up of the Company, the Holder
shall receive on the Entitlement Date the cash or other property, less the
Exercise Price for the Warrants then in effect, that such Holder would have
been
entitled to receive had the Warrants been exercisable and exercised immediately
prior to such dissolution, liquidation or winding up (or, if appropriate,
record
date therefor) and any right of a Holder to exercise the Warrants shall
terminate.
3. RESERVATION
AND AUTHORIZATION OF COMMON STOCK
The
Company covenants and agrees (a) that all shares of Common Stock which may
be
issued upon the exercise of the Warrants will, upon issuance, be validly
issued,
fully paid and nonassessable and free of all insurance or transfer taxes,
liens
and charges with respect to the issue thereof; (b) that during the Exercise
Period, the Company will at all times have authorized, and reserved for the
purpose of issue or transfer upon exercise of the Warrants, sufficient shares
of
Common Stock to provide for the exercise of the Warrants, and (c) that the
Company will take all such action as may be necessary to ensure that the
shares
of Common Stock issuable upon the exercise of the Warrants may be so issued
without violation of any applicable law or regulation, or any requirements
of
any domestic securities exchange upon which any capital stock of the Company
may
be listed; provided, however, that nothing contained herein shall impose
upon
the Company any obligation to register the Warrants or the Common Stock pursuant
applicable securities laws. In the event that any securities of the Company,
other than the Common Stock, are issuable upon exercise of the Warrants,
the
Company will take or refrain from taking any action referred to in clauses
(a)
through (c) of this Section 3 as though such clauses applied, mutatis mutandis,
to such other securities then issuable upon the exercise the Warrants.
4.
NO VOTING RIGHTS
This
Warrant Agreement shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company.
5.
EXERCISE OR TRANSFER OF WARRANTS OR COMMON STOCK
The
Holder agrees to be obligated by any and all provisions with respect to any
and
all limitations, including limitations imposed by the Securities Act of 1933,
as
amended, regarding the Warrants and the shares of Common Stock or other
securities issuable upon exercise of the Warrants.
6.
MERGERS, CONSOLIDATIONS, ETC.
A.
Mergers.
Except
as may otherwise be provided, if the Company shall merge or consolidate with
another corporation, the Holder shall thereafter have the right, upon exercise
of the rights specified in this Warrant Agreement and payment of the Exercise
Price, to receive solely the kind and amount of shares of stock (including,
if
applicable, Common Stock), other securities, property or cash or any combination
thereof receivable by a holder of the number of shares of Common Stock for
which
this Warrant Agreement might have been exercised immediately prior to such
merger or consolidation (assuming, if applicable, that the holder of such
Common
Stock failed to exercise its rights of election, if any, as to the kind or
amount of shares of stock, other securities, property or cash or combination
thereof receivable upon such merger or consolidation).
13
B.
Other Reclassifications. In
case
of any reclassification or change of the shares of Common Stock issuable
upon
exercise of (other than elimination or par value, a change in par value,
or from
par value to no par value, or as the result of a subdivision or combination
of
shares (which is provided for elsewhere herein), but including any
reclassification of the shares of Common stock into two (2) or more classes
or
series of shares) or in case of any merger or consolidation of another
corporation into the Company in which the Company is the surviving corporation
and in which there is a reclassification or change of the shares of Common
Stock
(other than a change in par value, or from par value to no par value, or
as a
result of a subdivision or combination (which is provided for elsewhere herein),
but including any reclassification of the shares of Common Stock, the Holder
shall thereafter have the right, upon exercise hereof and payment of the
Exercise Price, to receive solely the kind and amount of shares of stock
(including, if applicable, Common Stock), other securities, property or cash
or
any combination thereof receivable upon such reclassification, change, merger
or
consolidation by a holder of the number of shares of Common Stock for which
the
rights specified in this Warrant Agreement might have been exercised immediately
prior to such reclassification, change, merger or consolidation (assuming,
if
applicable, that the holder of such Common Stock failed to exercise its rights
of election, if any, as to the kind or amount of shares of stock, other
securities, property or cash or combination thereof receivable upon such
reclassification, change, merger or consolidation).
7.
RIGHTS
AND OBLIGATIONS SURVIVE EXERCISE OF WARRANTS
The
rights and obligations of the Company, of the Holder, and of the holders
of
shares of Common Stock or other securities issued upon exercise of the Warrants,
specified in this Warrant Agreement shall survive the exercise of the Warrants.
Dated:
_______________, 2006
COMPANY
Tsevni
Real Estate Group, Inc.
a
Nevada
Corporation
By: ______________________________
Xxxxx
Xxxxx
Its:
President
HOLDER
_________________________________
Print
Name
_________________________________
(Signature
of Holder)
14
Exhibit
1
FORM
OF SUBSCRIPTION
TSEVNI
REAL ESTATE GROUP, INC.
0000
X.
Xxxxx Xxx Xxxxxx Xx. Xxxxx 000-000
Xxxxxxx,
XX 00000
(Tel.
& Fax) 000-000-0000
(To
be
signed only on exercise of Warrant)
|
TO:
|
Tsevni
Real Estate Group, Inc.
|
|
X.X.
Xxx 000
|
|
Xxxxxxxxxx,
XX 00000
|
|
Attention:
Chief Executive Officer
|
1.
The
undersigned Holder of the attached original, executed Warrant hereby
elects to
exercise its purchase right under such Warrant with respect to ___shares
(the “Exercise Shares”) of Common Stock, as defined in the Warrant, of Tsevni
Real Estate Group, Inc., a Nevada corporation (the
“Company”).
|
2.
|
The
undersigned Holder (check one):
|
|
q
|
(a) elects
to pay the Aggregate Purchase Price for such shares of Common
Stock (i) in
lawful money of the United States or by the enclosed certified
or official
bank check payable in United States dollars to the order of
the Company in
the amount of $__________, or (ii) by wire transfer of United
States funds
to the account of the Company in the amount of $__________,
which transfer
has been made before or simultaneously with the delivery of
this Form of
Subscription pursuant to the instructions of the
Company;
|
or
|
q
|
(b) elects
to receive shares of Common Stock having a value equal to the
value of the
Warrant calculated in accordance with Section 2(b) of the
Warrant.
|
3.
Please
issue a stock certificate or certificates representing the appropriate
number of
shares of Common Stock in the name of the undersigned or in such other
name(s)as
is specified below:
Name:
_________________________________________________________
Address:
_______________________________________________________
______________________________________________________________
Social
Security or Tax Identification Number (if any):
______________________
Dated:
___________________
(Signature
must conform to name of Holder as specified on the face of the
Warrant)
_______________________________________________________________
_______________________________________________________________
(Address)
15
