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EXHIBIT 4.38
September 16,1997
COMPLETE WELLNESS CENTERS, INC.
COMMON STOCK PURCHASE WARRANT
In consideration of good and valuable consideration, the receipt of which
is hereby acknowledged by COMPLETE WELLNESS CENTERS, INC. (the "Company"), The
Equity Group (the "Holder") is hereby granted the right to purchase at any time
from the date hereof until 5:00 P.M., New York City time, on September 15, 2002
(the "Expiration Date"), 10,000 fully paid and non-assessable shares of the
Company's Common Stock, par value $.0.0001665 per share (the "Common Stock").
This Warrant is exercisable at the Exercise Price (as hereinafter
defined) per share of Common Stock issuable hereunder, payable in cash or by
certified or official bank check, or at Holder's option by means of tendering
this Warrant Certificate to the Company in a cashless transaction to receive the
number of shares of Common Stock equal in Market Value, as hereinafter defined,
to the difference between the Market Value of the Shares of Common Stock
issuable upon exercise of this Warrant and the total Exercise Price thereof.
Upon surrender of this Warrant with the annexed Subscription Form duly executed,
together with payment of the Exercise Price for the shares of Common Stock
purchased, at the Company's principal executive offices presently located at
Suite 000, 000 Xxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, XX 00000, the registered Holder
of this Warrant shall be entitled to receive a certificate or certificates for
the shares of Common Stock so purchased.
1. Exercise of Warrant. The purchase rights represented by this
Warrant are exercisable at the option of the holder hereof, in whole or in part
(but not as to fractional shares of Common Stock), during the period in which
this Warrant may be exercised as set forth above. In the case of the purchase of
less than all the shares of Common Stock purchasable under this Warrant, the
Company shall cancel this Warrant upon the surrender hereof and shall execute
and deliver a new Warrant of like tenor for the balance of the shares of Common
Stock purchasable hereunder.
2. Issuance of Stock Certificate. The issuance of certificates for
shares of Common Stock upon the exercise of this Warrant shall be made without
charge to the holder hereof including, without limitation, any tax that may be
payable in respect thereof, and such certificates shall (subject to the
provisions of Section 3 hereof) be issued in the name of, or in such names as
may be directed by, the holder hereof; provided, however, that the Company shall
not be required to pay any income tax to which the holder hereof may be subject
in connection with the issuance of this Warrant or of shares of Common Stock
upon the exercise of this Warrant; and provided further, that the Company shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate in a name other
than that of the holder and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
3. Restrictions on Transfer.
3.1 Restrictions on Transfer. The holder of this Warrant, by
acceptance hereof, agrees that, absent an effective registration statement under
the Securities Act of 1933, as amended (the "Act"), covering the disposition of
the Warrant or Common Stock issued or issuable upon exercise hereof (the
"Warrant Shares"), such holder will not sell or transfer any or all of such
Warrant or Warrant Shares, as the case may be, without first providing the
Company with an opinion of counsel (which may be counsel for the
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Company) to the effect that such sale or transfer will be exempt from the
registration and prospectus delivery requirements of the Act. Such holder
consents to the Company making a notation on its records giving instructions to
any transfer agent of the Warrant or Warrant Shares in order to implement such
restrictions on transferability.
3.2 Transfer Restrictions Legend. Each certificate representing
Warrant Shares, unless at the time of exercise such Warrant Shares are
registered under the Act, shall bear a legend in substantially the following
form on the face thereof:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 AND MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION UNDER THE
ACT, UNLESS IN THE OPINION OF COUNSEL TO THE ISSUER AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a distribution under a registration statement covering the securities
represented thereby) shall also bear such legend unless, in the opinion of
counsel to the Company, the securities represented thereby may be transferred as
contemplated by such holder without violation of the registration requirements
of the Act.
3.3 Incidental Registration Rights. Whenever the Company proposes to
file a registration statement with the Securities and Exchange Commission (other
than on Forms S-8 or S-4) at any time and from time to time, it will, prior to
such filing, give written notice to Holder of its intention to do so and, upon
the written request of Holder given within 15 days after the Company provides
such notice (which request shall state the intended disposition of such warrant
shares), the Company shall use its best efforts to cause all Warrant Shares
which the Company has been requested by such Holder to register to be registered
under the Securities Act to the extent necessary to permit their sale or other
disposition in accordance with their intended methods of distribution specified
in the request of such Holder; provided the Company shall have the right to
postpone any registration effected pursuant to this Section without obligation
to any Holder. If, in the opinion of the managing underwriter, the registration
of all or part of the Warrant Shares which the Holder has requested to be
included would materially and adversely affect such public offering, then the
Company shall be required to include in the underwriting only that number of
Warrant Shares, if any, which the managing underwriter believes may be sold
without causing such adverse effect.
4. Exercise Price and Redemption.
4.1 Initial and Adjusted Exercise Price. The initial exercise price
shall be $3.50 per share of Common Stock. The adjusted exercise price shall be
the price that shall result from time to time from any and all adjustments of
the initial exercise price in accordance with the provisions of Section 6
hereof.
4.2 Exercise Price The term "Exercise Price" herein shall mean the
initial exercise price or the adjusted exercise price depending upon the
context.
4.3 Market Value. The term "Market Value" herein shall be an amount
equal to the average closing "bid" price of a share of the Company's publicly
traded Common Stock for the five (5) trading days preceding the Company's
receipt of the Notice of Exercise form duly executed multiplied by the number of
shares of Common Stock to be issued upon surrender of this Warrant Certificate.
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5. Adjustments of Exercise Price and Number of Shares.
5.1 Computation of Adjusted Exercise Price. Except as hereinafter
provided, in case the Company shall at any time after the date hereof issue or
sell any shares of Common Stock (other than the issuance or sales referred to in
Section 5.5 hereof, the issuance or sale of any shares of Common Stock resulting
from the exercise or conversion of any of the Company's securities outstanding
as of the date hereof or any other securities sold on the date hereof),
including shares held in the Company's treasury, for a consideration per share
less than the Exercise Price in effect immediately prior to the issuance or sale
of such shares, or without consideration, then forthwith upon such issuance or
sale the Exercise Price shall (until another such issuance or sale) be reduced
to a price (calculated to the nearest full cent) determined by dividing (A) an
amount equal to the sum of (X) the total number of shares of Common Stock
outstanding (including shares deemed to be outstanding pursuant to subparagraph
(e) below) immediately prior to such issuance or sale, multiplied by the
Exercise Price in effect immediately prior to such issuance or sale, plus (Y)
the aggregate of the amount of all consideration, if any, received by the
Company upon such issuance or sale, by (B) the total number of shares of Common
Stock outstanding (including shares deemed to be outstanding pursuant to
subparagraph (e) below) immediately after such issuance or sale; provided,
however, that in no event shall the Exercise Price be adjusted pursuant to this
computation to an amount in excess of the Exercise Price in effect immediately
prior to such computation, except in the case of a combination of outstanding
shares of Common Stock provided for in Section 5.3 hereof.
For the purposes of any adjustment to be made in accordance with this
Section 5.1, the following provisions shall be applicable:
(a) In case of the issuance or sale of shares of Common Stock (or of
other securities deemed hereunder to involve the issuance or sale of shares of
Common Stock) for a consideration part or all of which shall be cash, the amount
of the cash portion of the consideration therefor deemed to have been received
by the Company shall be (i) the subscription price, if shares of Common Stock
are offered by the Company for subscription, or (ii) the public offering price
(after deducting therefrom any compensation paid or discount allowed in the
sale, underwriting or purchase thereof by underwriters or dealers or others
performing similar services, but before deducting any other expenses incurred in
connection therewith), if such securities are sold to underwriters or dealers
for public offering without a subscription offering, or (iii) the net amount of
cash actually received by the Company for such securities, in any other case.
(b) In case of the issuance or sale (otherwise than as a dividend or
other distribution on any stock of the Company, and otherwise than on the
exercise of options, rights or warrants or the conversion or exchange of
convertible or exchangeable securities) of shares of Common Stock (or of other
securities deemed hereunder to involve the issuance or sale of shares of Common
Stock) for a consideration part or all of which shall be other than cash, the
amount of the consideration therefor other than cash deemed to have been
received by the Company shall be the value of such consideration as determined
in good faith by the Board of Directors of the Company on the basis of a record
of values of similar property or services.
(c) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been issued
immediately after the opening of business on the day following the record date
for the determination of stockholders entitled to receive such dividend or other
distribution.
(d) The reclassification of securities of the Company other than
shares of Common Stock into securities including shares of Common Stock shall be
deemed to involve the issuance of such shares of
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Common Stock for a consideration other than cash immediately prior to the close
of business on the date fixed for the determination of security holders entitled
to receive such shares, and the value of the consideration allocable to such
shares of Common Stock shall be determined as provided in subsection (b) of this
Section 5.1.
(e) The number of shares of Common Stock at any one time outstanding
shall be deemed to include the aggregate maximum number of shares issuable
(subject to readjustment upon the actual issuance thereof) upon the exercise of
options, rights or warrants and upon the conversion or exchange of convertible
or exchangeable securities.
5.2 Subdivision and Combination of Common . In case the Company shall
at any time subdivide (by any stock split, stock dividend or otherwise) or
combine (by any reverse stock split or otherwise) the outstanding shares of
Common Stock, the Exercise Price shall forthwith be proportionately decreased in
the case of subdivision or increased in the case of combination.
5.3 Adjustment in Number of Shares. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 5, the aggregate
number of shares of Common Stock issuable upon the exercise of this Warrant (and
of all the Warrants) shall be obtained by multiplying the Exercise Price in
effect immediately prior to such adjustment by the number of shares of Common
Stock issuable upon exercise of this Warrant (and of all the Warrants)
immediately prior to such adjustment and dividing the product so obtained by the
adjusted Exercise Price.
5.4 Reclassification, Consolidation, Merger, etc. In case of any
reclassification or change of the outstanding shares of Common Stock (other than
a change from no par value to par value or vice versa or a change in par value,
or as a result of a subdivision or combination), or in the case of any
consolidation of the Company with, or merger of the Company with or into,
another corporation (other than a consolidation or merger in which the Company
is the surviving corporation and which does not result in any reclassification
or change of the outstanding shares of Common Stock except a change as a result
of a subdivision or combination of such shares or a change in par value as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company substantially as an entirety, the holder of this Warrant
shall thereafter (but only until the Expiration Date) have the right to purchase
the kind and number of shares of stock and/or other securities or property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance in respect of the number of shares issuable under this Warrant
immediately prior to the time of determination of stockholders of the Company
entitled to receive such shares of stock and/or other securities or property, at
a purchase price equal to the product of (x) the number of shares issuable under
this Warrant immediately prior to such determination, times (y) the Exercise
Price in effect immediately prior to such determination, as if such holder had
exercised this Warrant immediately prior to such determination. The Company
shall be obligated to retain and set aside, or otherwise make fair provision for
exercise of the right of the holder hereof to receive, the shares of stock
and/or other securities or property provided for in this Section 5.4.
5.5 No Adjustment of Exercise Price in Certain Cases. No adjustment of
the Exercise Price shall be made:
(a) Upon the issuance or sale of this Warrant or of any Warrant
Shares;
(b) Upon the issuance or sale of shares of Common Stock upon the
exercise of options, rights or warrants, or upon the conversion or exchange of
convertible or exchangeable securities, in any case (i)
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where the purchase price was adjusted at the time of issuance of such options,
rights or warrants, or convertible or exchangeable securities, as contemplated
by Section 5.2 hereof or (ii) where such options, rights, warrants or
convertible or exchangeable securities were outstanding prior to the date
hereof;
(c) Upon the issuance or sale of shares of Common Stock resulting from
the exercise or conversion of any of the Company's securities outstanding as of
the date hereof or of any agreements or contract rights to purchase shares
outstanding as of the date hereof; or
(d) If the amount of said adjustment shall be less than one cent
($.0l) per share, provided, however, that in such case any adjustment that would
otherwise be required then to be made shall be carried forward and shall be made
at the time of and together with the next subsequent adjustment that, together
with any adjustment so carried forward, shall amount to at least one 1 cent
($.01) per share.
6. Exchange and Replacement of Warrant. This Warrant is exchangeable
without expense, upon the surrender hereof by the registered holder at the
principal executive office of the Company, for a new Warrant or Warrants of like
tenor and date representing in the aggregate the right to purchase the same
number of shares as are purchasable hereunder in such denominations as shall be
designated by the registered holder hereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant, and, in case of
loss, theft or destruction, upon receipt of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of this Warrant, if
mutilated, the Company will make and deliver a new Warrant of like tenor, in
lieu of this Warrant.
7. Elimination of Fractional Interests. The Company shall not be
required upon the exercise of this Warrant to issue stock certificates
representing fractions of shares of Common Stock, but shall instead pay in cash,
in lieu of any fractional share of Common Stock to which such holder would be
entitled if such fractional share were issuable, in an amount equal to the fair
market value of a share of Common Stock as of the date of such exercise.
8. Reservation of Shares. The Company shall at all times reserve and
keep available out of its authorized shares of Common Stock, solely for the
purpose of issuance upon the exercise of this Warrant, such number of shares of
Common Stock as shall be issuable upon the exercise hereof. The Company
covenants and agrees that, upon exercise of this Warrant and payment of the
Exercise Price therefor, all shares of Common Stock issuable upon such exercise
shall be duly and validly issued, fully paid and nonassessable.
9. Notices to Holders. Nothing contained in this warrant shall be
construed as conferring upon the holder hereof the right to vote or to consent
or to receive notice as a stockholder in respect of any meetings of stockholders
for the election of directors or any other matter/ or as having any rights
whatsoever as a stockholder of the Company. If, however, at any time prior to
the expiration of this warrant and prior to its exercise, any of the following
events shall occur:
(a) The Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to receive a
dividend or distribution in cash or otherwise;
(b) The Company shall offer to the holders of its Common Stock
any additional shares of capital
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stock of the Company or securities convertible into or exchangeable for
shares of capital stock of the Company, or any right to subscribe for or
purchase the same;
(c) A dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of
all or substantially all of its property, assets and business as an
entirety shall be proposed to be voted upon by the stockholders of the
Company; or
(d) A merger or consolidation of the Company with or into any
other company shall be proposed to be voted upon by the stockholders of
the Company;
then, in any one or more of said events, the Company shall give written notice
of such event to the holder of this warrant at least fifteen (15) days prior to
the date fixed as a record date or the date of closing the transfer books for
the determination of the stockholders entitled to such dividend, distribution,
additional shares, convertible or exchangeable securities or subscription or
purchase rights, or entitled to vote on such proposed dissolution, liquidation,
winding up, sale, merger or consolidation. Such notice shall specify such record
date or the date of closing the transfer books, as the case may be. Failure to
give such notice or any defect therein shall not affect the validity of any
action taken in connection with the declaration or payment of any such dividend
or distribution, or the issuance of any shares of capital stock or convertible
or exchangeable securities or subscription or purchase rights, or any proposed
dissolution, liquidation, winding up, sale, merger or consolidation.
10. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the registered holder of this Warrant, to the address
of such holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth on the first
page of this Warrant;
or at such other address as the registered holder or the Company may hereafter
have advised the other.
11. Successors. All the covenants, agreements, representations and
warranties contained in this Warrant shall bind the parties hereto and their
respective heirs, executors, administrators, distributees, successors and
assigns.
12. Headings. The Section headings in this Warrant have been inserted
for purposes of convenience only and shall have no substantive effect.
13. Law Governing. This Warrant is delivered in the State of Delaware
and shall be construed and enforced in accordance with, and governed by, the
laws of the State of Delaware regardless of the jurisdiction of creation or
domicile of the Company or its successors or of the holder at any time hereof.
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WITNESS the signature of the duly authorized officer of the Company.
COMPLETE WELLNESS CENTERS, INC.
By: [SIG]
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Title: Vice Chairman
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SUBSCRIPTION FORM
(To Be Executed By The Registered Holder
In Order To Exercise The Warrant)
The undersigned hereby irrevocably elects to exercise the right to
purchase ___________shares of Common Stock of COMPLETE WELLNESS CENTERS, INC.
covered by this Warrant according to the conditions hereof and herewith makes
payment of the Exercise Price of such shares in full.
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Signature
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Address
Dated:__________.
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