Exhibit 10.14
NEITHER THESE SECURITIES NOR THE SECURITIES
ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH
SECURITIES.
CHINA PHARMA HOLDINGS, INC.
WARRANT
Warrant No.
18 Original Issue Date: May 30,
2008
China Pharma Holdings, Inc., a Delaware
corporation (the "Company" ), hereby certifies that, as
partial compensation for placement agent services, Roth Capital
Partners, LLC or its registered assigns (the "Holder" ), is
entitled to purchase from the Company up to a total of 300,000
shares of Common Stock (each such share, a "Warrant Share"
and all such shares, the "Warrant Shares" ), at any time and
from time to time from and after the Original Issue Date and
through and including May 30, 2011 (the "Expiration Date" ),
and subject to the following terms and conditions:
1.
Definitions . As used in this Warrant, the following terms
shall have the respective definitions set forth in this Section 1.
Capitalized terms that are used and not defined in this Warrant
that are defined in the Purchase Agreement (as defined below) shall
have the respective definitions set forth in the Purchase
Agreement.
"Business Day" means any day except Saturday, Sunday and any
day which is a federal legal holiday or a day on which banking
institutions in the State of New York are authorized or required by
law or other governmental action to close.
"Common Stock" means the common stock of the Company, par value
$0.001 per share, and any securities into which such common stock
may hereafter be reclassified.
"Exercise Price" means $2.98, subject to adjustment in accordance
with Section 9.
"Fundamental Transaction"
means any of the following: (1) the
Company effects any merger or consolidation of the Company with or
into another Person, (2) the Company effects any sale of all or
substantially all of its assets in one or a series of related
transactions, (3) any tender offer or exchange offer (whether by
the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (4) the Company
effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or
property.
“Original Issue Date”
means the Original Issue Date first
set forth on the first page of this Warrant.
“New York Courts”
means the state and federal courts
sitting in the City of New York, Borough of Manhattan.
"Purchase Agreement" means the Securities Purchase Agreement, dated
May 27, 2008, to which the Company and 17 investors are
parties.
“Trading Day”
means (i) a day on which the Common
Stock is traded on a Trading Market or (ii) if the Common Stock is
not quoted on any Trading Market, a day on which the Common Stock
is quoted in the over-the-counter market as reported by the Pink
Sheets LLC (or any similar organization or agency succeeding to its
functions of reporting prices); provided , that in the event
that the Common Stock is not listed or quoted as set forth in (i)
or (ii) hereof, then Trading Day shall mean a Business
Day.
“Trading Market”
means whichever of the New York
Stock Exchange, the American Stock Exchange, the NASDAQ Global
Select Market, the NASDAQ Global Market, the NASDAQ Capital Market
or OTC Bulletin Board on which the Common Stock is listed or quoted
for trading on the date in question.
2. Registration
of Warrant . The Company shall register this Warrant upon
records to be maintained by the Company for that purpose (the
"Warrant Register" ), in the name of the record Holder
hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for
the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.
3. Registration
of Transfers . The Company shall register the transfer of any
portion of this Warrant in the Warrant Register, upon surrender of
this Warrant, with the Form of Assignment attached hereto duly
completed and signed, to the Company at its address specified
herein. Upon any such registration or transfer, a new Warrant to
purchase Common Stock, in substantially the form of this Warrant
(any such new Warrant, a "New Warrant" ), evidencing the
portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of
this Warrant not so transferred, if any, shall be issued to the
transferring Holder. The acceptance of the New Warrant by the
transferee thereof shall be deemed the acceptance by such
transferee of all of the rights and obligations of a holder of a
Warrant.
4. Exercise and
Duration of Warrants .
This Warrant shall
be exercisable by the registered Holder at any time and from time
to time on or after the Original Issue Date through and including
the Expiration Date. At 6:30 p.m., New York City time on the
Expiration Date, the portion of this Warrant not exercised prior
thereto shall be and become void and of no value. The Company may
not call or redeem any portion of this Warrant without the prior
written consent of the affected
Holder.
5. Delivery of
Warrant Shares .
(a) To effect
exercises hereunder, subject to the request of the transfer agent
of the Company, the Holder shall not be required to physically
surrender this Warrant unless the aggregate Warrant Shares
represented by this Warrant is being exercised. Upon delivery of
the Exercise Notice (in the form attached hereto) to the Company
(with the attached Warrant Shares Exercise Log) at its address for
notice set forth herein and upon payment of the Exercise Price
multiplied by the number of Warrant Shares that the Holder intends
to purchase hereunder (if the Warrant is being exercised in
accordance with Section 10(a)), the Company shall promptly (but in
no event later than three Trading Days after the Date of Exercise
(as defined herein)) issue and deliver to the Holder, a certificate
for the Warrant Shares issuable upon such exercise, which, unless
otherwise required by the Purchase Agreement, shall be free of
restrictive legends. The Company shall, upon request of the Holder
and subsequent to the date on which a registration statement
covering the resale of the Warrant Shares has been declared
effective by the Securities and Exchange Commission, use its
reasonable best efforts to deliver Warrant Shares hereunder
electronically through the Depository Trust Corporation or another
established clearing corporation performing similar functions, if
available, provided , that, the Company may, but will not be
required to change its transfer agent if its current transfer agent
cannot deliver Warrant Shares electronically through the Depository
Trust Corporation. A " Date of Exercise " means the date on
which the Holder shall have delivered to the Company: (i) the
Exercise Notice (with the Warrant Exercise Log attached to it),
appropriately completed and duly signed and (ii) if such Holder is
not utilizing the cashless exercise provisions set forth in this
Warrant, payment of the Exercise Price for the number of Warrant
Shares so indicated by the Holder to be purchased.
(b) If by the fifth Trading
Day after a Date of Exercise the Company fails to deliver the
required number of Warrant Shares in the manner required pursuant
to Section 5(a), then the Holder will have the right to rescind
such exercise.
(c) If by the third
Trading Day after a Date of Exercise the Company fails to deliver
the required number of Warrant Shares in the manner required
pursuant to Section 5(a), and if after such third Trading Day and
prior to the receipt of such Warrant Shares, the Holder purchases
(in an open market transaction or otherwise) shares of Common Stock
to deliver in satisfaction of a sale by the Holder of the Warrant
Shares which the Holder anticipated receiving upon such exercise (a
" Buy-In "), then the Company shall (1) pay in cash to the
Holder the amount by which (x) the Holder's total purchase price
(including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying
(A) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue by
(B) the closing bid price of the Common Stock on the Date of
Exercise and (2) at the option of the Holder, either reinstate the
portion of the Warrant and equivalent number of Warrant Shares for
which such exercise was not honored or deliver to the Holder the
number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery
obligations hereunder. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of
the Buy-In.
(d) The Company's obligations to
issue and deliver Warrant Shares in accordance with the terms
hereof are absolute and unconditional, irrespective of any action
or inaction by the Holder to enforce the same, any waiver or
consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or
any setoff, counterclaim, recoupment, limitation or termination, or
any breach or alleged breach by the Holder or any other Person of
any obligation to the Company or any violation or alleged violation
of law by the Holder or any other Person, and irrespective of any
other circumstance which might otherwise limit such obligation of
the Company to the Holder in connection with the issuance of
Warrant Shares. Nothing herein shall limit a Holder's right to
pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company's
failure to timely deliver certificates representing Warrant Shares
upon exercise of the Warrant as required pursuant to the terms
hereof.
6. Charges,
Taxes and Expenses . Issuance and delivery of Warrant Shares
upon exercise of this Warrant shall be made without charge to the
Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the
issuance of such certificates, all of which taxes and expenses
shall be paid by the Company; provided, however, that the Company
shall not be required to pay any tax which may be payable in
respect of any transfer involved in the registration of any
certificates for Warrant Shares or Warrants in a name other than
that of the Holder. The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring
this Warrant or receiving Warrant Shares upon exercise
hereof.
7. Replacement of
Warrant . If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in
exchange and substitution for and upon cancellation hereof, or in
lieu of and substitution for this Warrant, a New Warrant, but only
upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction and customary and reasonable
indemnity (which shall not include a surety bond), if requested.
Applicants for a New Warrant under such circumstances shall also
comply with such other reasonable regulations and procedures and
pay such other reasonable third-party costs as the Company may
prescribe. If a New Warrant is requested as a result of a
mutilation of this Warrant, then the Holder shall deliver such
mutilated Warrant to the Company as a condition precedent to the
Company’s obligation to issue the New Warrant.
8. Reservation of
Warrant Shares . The Company covenants that it will at all
times reserve and keep available out of the aggregate of its
authorized but unissued and otherwise unreserved Common Stock,
solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant
Shares which are then issuable and deliverable upon the exercise of
this entire Warrant, free from preemptive rights or any other
contingent purchase rights of Persons other than the Holder (taking
into account the adjustments and restrictions of Section 9). The
Company covenants that all Warrant Shares so issuable and
deliverable shall, upon issuance and the payment of the applicable
Exercise Price in accordance with the terms hereof, be duly and
validly authorized, issued and fully paid and
nonassessable.
9. Certain Adjustments
. The Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 9.
(a) Stock
Dividends and Splits . If the Company, at any time while this
Warrant is outstanding, (i) pays a stock dividend on its Common
Stock or otherwise makes a distribution on any class of capital
stock that is payable in shares of Common Stock, (ii) subdivides
outstanding shares of Common Stock into a larger number of shares,
or (iii) combines outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall
be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding immediately before
such event and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such event.
Any adjustment made pursuant to clause (i) of this paragraph shall
become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or
distribution, and any adjustment pursuant to clause (ii) or (iii)
of this paragraph shall become effective immediately after the
effective date of such subdivision or combination.
(b) Fundamental
Transactions . If, at any time while this Warrant is
outstanding there is a Fundamental Transaction, then the Holder
shall have the right thereafter to receive, upon exercise of this
Warrant, the same amount and kind of securities, cash or property
as it would have been entitled to receive upon the occurrence of
such Fundamental Transaction if it had been, immediately prior to
such Fundamental Transaction, the holder of the number of Warrant
Shares then issuable upon exercise in full of this Warrant (the
"Alternate Consideration" ). For purposes of any such
exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such Fundamental Transaction, and
the Company shall apportion the Exercise Price among the Alternate
Consideration in a reasonable manner reflecting the relative value
of any different components of the Alternate Consideration. If
holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. At the Holder's option and
request, any successor to the Company or surviving entity in such
Fundamental Transaction shall issue to the Holder a new warrant
substantially in the form of this Warrant and consistent with the
foregoing provisions and evidencing the Holder's right to purchase
the Alternate Consideration for the aggregate Exercise Price upon
exercise thereof. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring
any such successor or surviving entity to comply with the
provisions of this paragraph (b) and insuring that the Warrant (or
any such replacement security) will be similarly adjusted upon any
subsequent transaction analogous to a Fundamental
Transaction.
(c) Subsequent Equity Sales
.
(i) If
during the term of this Warrant, the Company shall at any time
issue shares of Common Stock or Common Stock Equivalents entitling
any Person to acquire shares of Common Stock, at a price per share
less than the Exercise Price (if the holder of the Common Stock or
Common Stock Equivalent so issued shall at any time, whether by
operation of purchase price adjustments, reset provisions, floating
conversion, exercise or exchange prices or otherwise, or due to
warrants, options or rights issued in connection with such
issuance, be entitled to receive shares of Common Stock at a price
less than the Exercise Price, such issuance shall be deemed to have
occurred for less than the Exercise Price), then, the Exercise
Price shall be multiplied by a f
