Exhibit 10.2
EXHIBIT A
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. [ ]
Original Issue Date: May [ ], 2008
China Pharma Holdings,
Inc., a Delaware
corporation (the
"Company"),
hereby certifies that,
for value received, [
] or its registered
assigns (the
"Holder"), is
entitled to purchase from the Company up to a total of
[ ](1)
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 [ ],
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.
--------------------------
(1) A number of shares as equals 25% of the Shares issuable to such investor at
such Closing
under the Purchase Agreement.
<PAGE>
"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 $2.80, 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
[ ], 2008, to which the Company and the original Holder 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,
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<PAGE>
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
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<PAGE>
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.
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<PAGE>
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
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<PAGE>
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 fraction, the
numerator of which
shall be the number of
shares of Common Stock
outstanding
immediately prior to
the issuance
