Contract
THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON
STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS
TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR
AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO SOGUA (BVI) LIMITED, THAT SUCH
REGISTRATION IS NOT REQUIRED.
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May
__,
2008
|
Warrant
No.: 1
|
COMMON
STOCK PURCHASE WARRANT
Right
to
Purchase 208,333 Shares of Common Stock of
SOGUA
(BVI) LIMITED
SOGUA
(BVI) LIMITED, a corporation organized under the laws of the British Virgin
Islands (the “Corporation”) hereby certifies that, for value received, Private
Capital Group (BVI) Limited,
or its
successors or assigns (the “Holder”) is entitled to purchase from the
Corporation upon the due exercise hereof, and subject to the terms and
conditions herein, from the date of issue of this warrant (the “Warrant”) until
the third anniversary of the issuance hereof (the "Expiration Date"), all or
any
part of 208,333 fully paid and non-assessable shares of common stock, no par
value per share (the "Common Stock") of the Corporation, upon surrender hereof,
with the exercise form annexed hereto duly completed and executed, at the office
of the Corporation and upon simultaneous payment therefore in cash or by
certified or official bank check, payable to the order of the Corporation,
at a
price per share of $1.44US (the "Exercise Price"), subject to adjustment as
provided herein.
1. Restriction
on Transfer. No
resale
of the Warrant or of any of the shares of Common Stock underlying the exercise
of the Warrant (the “Underlying Stock”) will be made unless such resale is
registered pursuant to a registration statement filed by the Corporation with
the Securities and Exchange Commission (the "Commission") or an exemption from
registration under the Securities Act of 1933, as amended (the "Securities
Act"). By acceptance of this agreement, the Holder agrees, for itself and all
subsequent holders, that prior to making any disposition of the Warrant or
of
any Underlying Stock, the Holder shall give written notice to the Corporation
describing briefly the proposed disposition; and no such disposition shall
be
made unless and until (i) the Corporation has notified the Holder that, in
the
opinion of counsel satisfactory to it, no registration or other action under
the
Securities Act is required with respect to such disposition (which opinion
may
be conditioned upon the transferee's assuming the Holder's obligation
hereunder); or (ii) a registration statement under the Act has been filed by
the
Corporation and declared effective by the Commission or other such similar
action has been taken.
2. Expiration
of Warrant.
Unless
this Warrant and the Exercise Price are tendered as herein provided before
the
close of business on the Expiration Date, this Warrant will become wholly void
and all rights and obligations set forth herein shall expire and
terminate.
3. Partial
Exercise.
If this
Warrant is exercised for less than all the shares purchasable upon the exercise
hereof, the Warrant shall be surrendered by the Holder and replaced with a
new
warrant of like tender in the name of the Holder providing for the right to
purchase the number of shares of Underlying Stock as to which this Warrant
has
not yet been exercised.
4. Cashless
Exercise.
The
Holder may elect to exercise the warrants on a cashless basis by surrendering
the Warrants for that number of shares of Common stock equal to the quotient
obtained by dividing (x) the product of the number of shares of Common Stock
underlying the Warrants (y) by the difference between the exercise price of
the
Warrants and $0.22 US (i.e., 170,765 shares). Any fractional share issuable
as a
result of a cashless exercise will be rounded up to the nearest whole
share.
5. Adjustments.
The
Exercise Price and the number of shares of Underlying Stock of the Corporation
issuable pursuant to such exercise is subject to adjustment as
follows:
(a) In
case
of any issuance of shares of Common Stock by the Corporation so that the
underlying stock does not equal four percent (4%) of member of issued and
outstanding shares of Common Stock it then the Exercise Price and number of
shares of Underlying Stock shall be proportionately adjusted so that the holder
of any Warrant exercised after such time shall be entitled to receive the
aggregate number and kind of shares which if such Warrant had been exercised
immediately prior to such time, he or she would have owned upon such exercise
and been entitled to receive by virtue of such dividend.
(b) In
case
the Corporation shall at any time declare a stock dividend or stock split on
the
outstanding shares of Common Stock in shares of its Common Stock, then the
Exercise Price and number of shares of Underlying Stock shall be proportionately
adjusted so that the holder of any Warrant exercised after such time shall
be
entitled to receive the aggregate number and kind of shares which if such
Warrant had been exercised immediately prior to such time, he or she would
have
owned upon such exercise and been entitled to receive by virtue of such
dividend.
(c) In
case
the Corporation shall at any time subdivide or combine the outstanding shares
of
the Common Stock, the Exercise Price, initial or adjusted, in effect immediately
prior to such subdivision or combination shall forthwith be proportionately
decreased in the case of subdivision or increased in the case of
combination.
(c) In
case
of any capital reorganization, sale of substantially all the assets of the
Corporation, or any reclassification of the shares of Common Stock of the
Corporation, or in case of any consolidation with or merger of the Corporation
into or with another corporation, then as a part of such reorganization sale
reclassification, consolidation or merger, as the case may be, provision shall
be made so that the registered owner of the Warrant evidenced hereby shall
have
the right thereafter to receive upon the exercise thereof the kind and amount
of
shares of stock or other securities or property which he would have been
entitled to receive if immediately prior to such reorganization,
reclassification, consolidation or merger, he had held the number of shares
of
Underlying Stock which were then issuable upon the exercise of the Warrant
evidenced hereby, to the end that the provisions set forth (including provisions
with respect to adjustments of the Exercise Price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of stock
or other property thereafter deliverable upon the exercise of such Warrants.
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(e) If
the
Corporation at any time makes any spin-off, split-off, or distribution of assets
upon or with respect to its Common Stock, as a liquidating or partial
liquidating dividend, spin-off, or by way of return of capital, or other than
as
dividend payable out of earnings or any surplus legally available for dividends,
the Holder then outstanding shall, upon the exercise of the Warrant, receive,
in
addition to the shares of Common Stock then issuable on exercise of the Warrant,
the amount of such assets (or, at the option of the Corporation, a sum equal
to
the value thereof at the time of the distributions) which would have been
payable to such holder had he or she exercised the Warrant immediately prior
to
the record date for such distribution.
(f) When
any
adjustment is required to be made to the Exercise Price, the number of shares
of
Common Stock issuable shall be determined as provided for in paragraph (f)
hereof. No fractional shares of Common Stock shall be issued upon the exercise
of the Warrant. The Corporation shall round all fractional shares to the next
whole share.
(g) Whenever
the Exercise Price is adjusted as provided above, the number of shares of
Underlying Stock immediately prior to such adjustment shall be increased,
effective simultaneously with such adjustment, by a number of shares of Common
Stock computed by multiplying such number of shares of Common Stock by a
fraction, the numerator of which is the Exercise Price in effect immediately
prior to such adjustment and the denominator of which is the Exercise Price
in
effect upon such adjustment, and the number of shares of Underlying Stock
arrived at by making said computation shall be added to the number of shares
of
Underlying Stock immediately prior to such adjustment. The total number of
shares arrived at by making the computation provided for in the immediately
preceding sentence shall thereupon be the number of shares of Common Stock
issuable upon exercise or the Warrant and the Corporation shall forthwith
determine the new Exercise Price.
6. Delivery
of Underlying Stock.
As soon
as practicable after the exercise hereof, the Corporation shall deliver a
certificate or certificates for the number of full shares of Underlying Stock,
all of which shall be fully paid and nonassessable, to the person or persons
entitled to receive the same provided no sale, offer to sell or transfer of
the
Underlying Stock or of this Warrant, or of any shares or other securities issued
in exchange for or in respect of such shares, shall be made unless a
registration statement under the Act, with respect to such shares, is in effect
or an exemption from the registration requirements of such Act is applicable
to
such shares.
7. Condition
of Exercise of Warrant.
(a) Unless
exercised pursuant to an effective registration statement under the Securities
Act which includes the Underlying Stock, it shall be a condition to any exercise
of this Warrant that the Corporation shall have received, at the time of such
exercise, a representation in writing from the recipient in the form attached
hereto as Exhibit A-1, that the Shares being issued upon exercise, are being
acquired for investment and not with a view to any sale or distribution
thereof.
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| (i) |
Each
certificate evidencing the Underlying Stock issued upon exercise of
this
Warrant, shall be stamped or imprinted with a legend substantially
in the
following form:
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THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT
WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF,
AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”) OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT.
Subject
to this Section 6, the Corporation may instruct its transfer agent not to
register the transfer of all or a part of this Warrant, or any of the Shares,
unless one of the conditions specified in the above legend is
satisfied.
8. Representations
and Warranties of the Corporation.
The
Corporation represents and warrants to the Holder as follows:
(a) This
Warrant has been duly authorized and executed by the Corporation and is a valid
and binding obligation of the Corporation enforceable in accordance with its
terms;
(b) The
Underlying Stock has been duly authorized and reserved for issuance by the
Corporation and, when issued in accordance with the terms hereof, will be
validly issued, fully paid and nonassessable;
I The
execution and delivery of this Warrant are not, and the issuance of the
Underlying Stock upon exercise of this Warrant in accordance with the terms
hereof will not be, inconsistent with the Corporation’s Articles of
Incorporation or By-laws, as amended.
9. Representations
and Warranties by the Holder.
The
Holder represents and warrants to the Corporation as follows:
(a) This
Warrant is being acquired for its own account, for investment and not with
a
view to, or for resale in connection with, any distribution or public offering
thereof within the meaning of the Securities Act. Upon exercise of this Warrant,
the Holder shall, if so requested by the Corporation, confirm in writing, in
a
form reasonably satisfactory to the Corporation, that the Underlying Stock
issuable upon exercise of this Warrant is being acquired for investment and
not
with a view toward distribution or resale.
(b) The
Holder understands that the Warrant and the Underlying Stock have not been
registered under the Securities Act by reason of their issuance in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act pursuant to Section 4(2) thereof, and that they must be held
by
the Holder indefinitely, and that the Holder must therefore bear the economic
risk of such investment indefinitely, unless a subsequent disposition thereof
is
registered under the Securities Act or is exempted from such registration.
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(c) The
Holder has such knowledge and experience in financial and business matters
that
it is capable of evaluating the merits and risks of the purchase of this Warrant
and the Underlying Stock and of protecting its interests in connection
therewith.
(d) The
Holder is able to bear the economic risk of the purchase of the Underlying
Stock
pursuant to the terms of this Warrant.
10. Rights
of Stockholders.
No
holder of this Warrant shall be entitled, as a warrant- holder, to vote or
receive dividends or be deemed the holder of Common Stock or any other
securities of the Corporation which may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the holder of this Warrant, as such, any of the rights of a
stockholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value, consolidation, merger, conveyance, or otherwise) or to receive notice
of
meetings, or to receive dividends or subscription rights or otherwise until
the
Warrant shall have been exercised and the Shares purchasable upon the exercise
hereof shall have become deliverable, as provided herein.
11. Assignment.
This
Warrant is freely assignable by the Holder without notice to or consent from
the
Corporation.
12. Miscellaneous.
(a) This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument only if in writing, signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.
(b) This
Warrant shall be governed by and construed in accordance with the laws of
British Virgin Islands without regard to principles of conflicts of laws. Any
action brought concerning the transactions contemplated by this Warrant shall
be
brought only in the state courts of New York or in the federal courts located
in
the state of New York; provided, however, that the Corporation may choose to
waive this provision and bring an action outside the state of New
York.
(c) The
invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.
(d) The
headings in this Warrant are for purposes of reference only, and shall not
limit
or otherwise affect any of the terms hereof.
(e) The
terms
of this Warrant shall be binding upon and shall inure to the benefit of any
successors or assigns of the Corporation and of the holder or holders hereof
and
of the Underlying Stock.
(f) This
Warrant and the other documents delivered pursuant hereto constitute the full
and entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
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(g) Upon
receipt of evidence reasonably satisfactory to the Corporation of the loss,
theft, destruction or mutilation of this Warrant and, in the case of any such
loss, theft or destruction, upon delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Corporation or, in the case of any such
mutilation, upon surrender and cancellation of such Warrant, the Corporation
at
its expense will execute and deliver to the holder of record, in lieu thereof,
a
new Warrant of like date and tenor.
(h) Receipt
of this Warrant by the Holder hereof shall constitute acceptance of and
agreement to the foregoing terms and conditions.
(The
rest of this page left intentionally blank.)
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IN
WITNESS WHEREOF,
the
Corporation has caused this Warrant to be signed by its duly authorized
officer.
Dated:
May ,
2008
SOGUA
(BVI) LIMITED
By:
__________________________
Name:
Xxx
Xx
Title:
Chief Executive Officer
Warrant
Holder: Private
Capital Group (BVI) Limited
Address:
0000
Xxxxxxxx, Xxxxx 0000
City:
New
York
State:
New
York
Zip
Code: 10036
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EXHIBIT
A
NOTICE
OF EXERCISE
TO: SOGUA
(BVI) LIMITED
1. The
undersigned hereby elects to purchase ________ shares of Common Stock of SOGUA
(BVI) LIMITED pursuant to the terms of this Warrant, and tenders herewith
payment of the purchase price of such shares in full.
2. Please
issue a certificate or certificates representing said shares of Common Stock
in
the name of the undersigned or in such other name as is specified
below:
_________________________________
(Name)
_________________________________
_________________________________
(Address)
3. The
undersigned hereby represents and warrants that the aforesaid shares of Common
Stock are being acquired for the account of the undersigned for investment
and
not with a view to, or for resale, in connection with the distribution thereof,
and that the undersigned has no present intention of distributing or reselling
such shares and all representations and warranties of the undersigned set forth
in Section 8 of the attached Warrant are true and correct as of the date hereof.
In support thereof, the undersigned agrees to execute an Investment
Representation Statement in a form substantially similar to the form attached
to
the Warrant as EXHIBIT A-1.
_______________________________
(Signature)
By:____________________________
Title:___________________________
Date:_________________,
200__
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EXHIBIT
A-1
INVESTMENT
REPRESENTATION STATEMENT
PURCHASER: ______________________
SELLER: PRIVATE
CAPITAL GROUP (BVI) LIMITED
COMPANY: SOGUA
(BVI) LIMITED
SECURITIES: COMMON
STOCK ISSUED UPON EXERCISE OF THE WARRANTS ISSUED ON APRIL ,
2008
AMOUNT: __________
SHARES
DATE:
_________, 200_
In
connection with the purchase of the above-listed Securities, I, the Purchaser,
represent to the Seller and to the Company the following:
(a) I
am
aware of the Company’s business affairs and financial condition, and have
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Securities. I am purchasing these
Securities for my own account for investment purposes only and not with a view
to, or for the resale in connection with, any "distribution" thereof for
purposes of the Securities Act of 1933, as amended (the "Securities
Act").
(b) I
understand that the Securities have not been registered under the Securities
Act
in reliance upon a specific exemption therefrom, which exemption depends upon,
among other things, the bona fide nature of my investment intent as expressed
herein. In this connection, I understand that, in the view of the Securities
and
Exchange Commission (the "Commission"), the statutory basis for such exemption
may be unavailable if my representation was predicated solely upon a present
intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase
or
decrease in the market price of the Securities, or for a period of one year
or
any other fixed period in the future.
(c) I
further
understand that the Securities must be held indefinitely unless subsequently
registered under the Securities Act or unless an exemption from registration
is
otherwise available. Moreover, I understand that the Company is under no
obligation to register the Securities. In addition, I understand that the
certificate evidencing the Securities will be imprinted with a legend which
prohibits the transfer of the Securities unless they are registered or such
registration is not required in the opinion of counsel for the
Company.
(d) I
am
familiar with the provisions of Rule 144, promulgated under the Securities
Act,
which, in substance, permits limited public resale of "restricted securities"
acquired, directly or indirectly, from the issuer thereof, in a non-public
offering subject to the satisfaction of certain conditions.
9
The
Securities may be resold in certain limited circumstances subject to the
provisions of Rule 144, which requires among other things: (1) the availability
of certain public information about the Company, (2) the resale occurring not
less than one year after the party has purchased, and made full payment for,
within the meaning of Rule 144, the securities to be sold; and, in the case
of
an affiliate, or of a non-affiliate who has held the securities less than two
years, (3) the sale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term
is
defined under the Securities Exchange Act of 1934) and the amount of securities
being sold during any three month period not exceeding the specified limitations
stated therein, if applicable.
(e) I
further
understand that in the event all of the applicable requirements of Rule 144
are
not satisfied, registration under the Securities Act, compliance with Regulation
A, or some other registration exemption will be required; and that,
notwithstanding the fact that Rule 144 is not exclusive, the Commission has
expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant
to
Rule 144 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that
such
persons and their respective brokers who participate in such transactions do
so
at their own risk.
_______________________________
(Signature)
By:____________________________
Title:___________________________
Date:________________,200__
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