SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
13D-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13D-2(a)
(AMENDMENT NO. 1)
COMPLETE WELLNESS CENTERS, INC.
- ---------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.0001665 per share
- ---------------------------------------------------------------------------
(Title of Class and Securities)
20452H4-10-3
- ---------------------------------------------------------------------------
(CUSIP Number of Class of Securities)
Arthur Amron, Esq.
411 West Putnam Avenue, Suite 125
Greenwich, Connecticut 06830
(203) 862-7400
- ---------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
Copy to:
Randall H. Doud, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
(212) 735-3000
July 2, 1998
- ----------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box: |_|
NOTE: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See Rule
13d-7(b) for other parties to whom copies are to be sent.
(Continued on following pages)
CUSIP No. 20452H4-10-3 13D
- ----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Imprimis Investors LLC
- ----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
- ----------------------------------------------------------------------------
3. SEC USE ONLY
- ----------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC
- ----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[ ]
- ----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ----------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF -0-
SHARES --------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 2,473,814 (See Items 4, 5 and 6.)
EACH --------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON -0-
WITH --------------------------------------------------
10. SHARED DISPOSITIVE POWER
2,473,814 (See Items 4, 5 and 6.)
- ----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,473,814 (See Items 4, 5 and 6.)
- ----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
[ ]
- ----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
46.52% (based on 2,327,057 shares of Common Stock outstanding on
July 2, 1998 and an assumed 2,990,385 shares of Common Stock
issuable to the Reporting Person and the other Reporting Persons
filing this Schedule 13D). See Items 4, 5 and 6.
- ----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
- ----------------------------------------------------------------------------
CUSIP No. 20452H4-10-3 13D
- ----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Wexford Spectrum Investors LLC
- ----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
- ----------------------------------------------------------------------------
3. SEC USE ONLY
- ----------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC
- ----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[ ]
- ----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ----------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF -0-
SHARES -------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 624,071 (See Items 4, 5 and 6.)
EACH -------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON -0-
WITH -------------------------------------------------
10. SHARED DISPOSITIVE POWER
624,071 (See Items 4, 5 and 6.)
- ----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
624,071 (See Items 4, 5 and 6.)
- ----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
[ ]
- ----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.74% (based on 2,327,057 shares of Common Stock outstanding on
July 2, 1998 and an assumed 2,990,385 shares of Common Stock
issuable to the Reporting Person and the other Reporting Persons
filing this Schedule 13D). See Items 4, 5 and 6.
- ----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
- ----------------------------------------------------------------------------
CUSIP No. 20452H4-10-3 13D
- ----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Wexford Management LLC
- ----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
- ----------------------------------------------------------------------------
3. SEC USE ONLY
- ----------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
- ----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[ ]
- ----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Connecticut
- ----------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF -0-
SHARES --------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 3,090,385 (See Items 4, 5 and 6.)
EACH --------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON -0-
WITH 10. SHARED DISPOSITIVE POWER
3,090,385 (See Items 4, 5 and 6.)
- ----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,090,385 (See Items 4, 5 and 6.)
- ----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
[ ]
- ----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
58.12% (based on 2,327,057 shares of Common Stock outstanding on
July 2, 1998 and an assumed 2,990,385 shares of Common Stock
issuable to the Reporting Person and the other Reporting Persons
filing this Schedule 13D). See Items 4, 5 and 6.
- ----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IA
- ----------------------------------------------------------------------------
CUSIP No. 20452H4-10-3 13D
- ----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Joseph M. Jacobs
- ----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
- ----------------------------------------------------------------------------
3. SEC USE ONLY
- ----------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
- ----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[ ]
- ----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- ----------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF -0-
SHARES --------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 3,090,385 (See Items 4, 5 and 6.)
EACH --------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON -0-
WITH --------------------------------------------------
10. SHARED DISPOSITIVE POWER
3,090,385 (See Items 4, 5 and 6.)
- ----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,090,385 (See Items 4, 5 and 6.)
- ----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
[ ]
- ----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
58.12% (based on 2,327,057 shares of Common Stock outstanding on
July 2, 1998 and an assumed 2,990,385 shares of Common Stock
issuable to the Reporting Person and the other Reporting Persons
filing this Schedule 13D). See Items 4, 5 and 6.
- ----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- ----------------------------------------------------------------------------
CUSIP No. 20452H4-10-3 13D
- ----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Charles E. Davidson
- ----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
- ----------------------------------------------------------------------------
3. SEC USE ONLY
- ----------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
- ----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[ ]
- ----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- ----------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF -0-
SHARES --------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 3,090,385 (See Items 4, 5 and 6.)
EACH --------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON -0-
WITH --------------------------------------------------
10. SHARED DISPOSITIVE POWER
3,090,385 (See Items 4, 5 and 6.)
- ----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,090,385 (See Items 4, 5 and 6.)
- ----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
[ ]
- ----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
58.12% (based on 2,327,057 shares of Common Stock outstanding on
July 2, 1998 and an assumed 2,990,385 shares of Common Stock
issuable to the Reporting Person and the other Reporting Persons
filing this Schedule 13D). See Items 4, 5 and 6.
- ----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- ----------------------------------------------------------------------------
Item 3. Source and Amount of Funds or Other Consideration.
On July 2, 1998, Imprimis acquired from the Company 83,521 shares of
Senior Convertible Preferred Stock (the "Senior Convertible Preferred
Stock"), par value $.01 per share, of the Company and 80,000 shares of
Common Stock (the "Issued Common Stock"). On the same date, Wexford
acquired from the Company 20,880 shares of Senior Convertible Preferred
Stock and 20,000 shares of Issued Common Stock. See Item 4 for a
description of certain provisions of the Senior Convertible Preferred Stock
and see Item 6 for additional information concerning the terms of the
Senior Convertible Preferred Stock and certain agreements entered into by
the Company in connection therewith.
Imprimis acquired its Senior Convertible Preferred Stock and the
Issued Common Stock in exchange for 80,000 shares of the Preferred Stock
originally issued pursuant to the Investment Agreement (the "Original
Preferred Stock")and Warrants to acquire 2,280,000 shares of Common Stock
that were issued to it by the Company pursuant to the Investment Agreement
and 3,521 shares of the Original Preferred Stock that had been issued to it
by the Company pursuant to the terms of the Original Preferred Stock in
lieu of the payment of cash dividends. Wexford acquired its Senior
Convertible Preferred Stock and the Issued Common Stock in exchange for
20,000 shares of the Original Preferred Stock and Warrants to acquire
570,000 shares of Common Stock that were issued to it by the Company
pursuant to the Investment Agreement and 880 shares of the Original
Preferred Stock that had been issued to it by the Company pursuant to the
terms of the Original Preferred Stock in lieu of the payment of cash
dividends.
Item 4. Purpose of Transaction.
The Reporting Persons have acquired the Senior Convertible Preferred
Stock and the Issued Common Stock for investment purposes pursuant to an
Second Supplement to the Investment Agreement, dated as of July 2, 1998
(the "Second Supplement") and have obtained certain registration rights
with respect to the Issued Common Stock and the shares of Common Stock
issuable upon exercise of the Senior Convertible Preferred Stock (the
"Issuable Common Stock") pursuant to the Registration Rights Agreement.
In connection with the transactions described above, the Company has
agreed that, for so long as any shares of Senior Convertible Preferred
Stock remain outstanding, the Company shall take such action as shall be
necessary to ensure that at least one designee of the holders of Senior
Convertible Preferred Stock shall be duly elected to serve as a director of
the Company. Frederick B. Simon, an officer of Wexford Management, was
elected on March 30, 1998 to the Board of Directors of the Company as the
designee of the holders of the Original Preferred Stock pursuant to a
similar undertaking for the benefit of the holders of the Original
Preferred Stock and since July 2, 1998 has been the designee of the holders
of the Senior Convertible Preferred Stock.
The Company has also agreed that, in the event that the Company shall
fail either to (a) receive the Shareholder Approval (as defined below) on
or prior to August 31, 1998, or (b) redeem all of the Senior Convertible
Preferred Stock on or prior to January 3, 1999, the Company shall, if and
when requested by the holders of a majority of the outstanding shares of
the Senior Convertible Preferred Stock to do so, take any action necessary,
including calling a special meeting, to elect designees of the holders of a
majority of the outstanding shares of the Senior Convertible Preferred
Stock to the Board of Directors such that such designees shall constitute a
majority of such Board of Directors. Thereafter, for so long as any shares
of Senior Convertible Preferred Stock remain outstanding, the Company shall
take such action as shall be necessary to ensure that such designees or
successor designees shall be duly elected to serve as directors of the
Company. "Shareholder Approval" means any and all requisite approval of the
shareholders of the Company of the increase in its authorized shares of
Common Stock to 50,000,000 and the issuance of the Issued Common Stock or
shares of Common Stock upon conversion of the Senior Convertible Preferred
Stock.
See Item 6 for additional information concerning the terms of the
Senior Convertible Preferred Stock, the Second Supplement and the
Registration Rights Agreement as amended.
The Reporting Persons do not have any plans or proposals, other than
those described in the preceding paragraphs, which relate to or would
result in any of the actions or transactions specified in clauses (a)
through (j) of Item 4 of Schedule 13D. The Reporting Persons reserve the
right to acquire or dispose of Common Stock or the Senior Convertible
Preferred Stock or to formulate other purposes, plans or proposals
regarding the Company or the Common Stock or the Senior Convertible
Preferred Stock held by the Reporting Persons to the extent deemed
advisable in light of general investment policies, market conditions and
other factors.
Item 5. Interest in Securities of the Issuer.
The Reporting Persons may be deemed to beneficially own the
respective percentages and numbers of outstanding shares of Common Stock
set forth below, including 7,500 shares of Common Stock issuable pursuant
to an option granted to Mr. Simon on May 26, 1998 at an exercise price of
$2.81 per share in connection with his services as a director of the
Company, in which the Reporting Persons may be deemed to have an interest.
Such percentages have been calculated using information obtained from the
Company on the basis of 2,327,057 shares of Common Stock issued and
outstanding on July 2, 1998 and based on an assumed 2,982,885 shares of
Issuable Common Stock at an assumed conversion price of $1.75 per share of
Common Stock. See Item 6 for a description of the conversion feature of the
Senior Convertible Preferred Stock. Such calculations exclude the 4,631,001
shares of Common Stock that according to information obtained from the
Company were issuable pursuant to other warrants (including the warrants
that Imprimis and Wexford exchanged on July 2nd) and options as of
June 30, 1998.
A. Imprimis
(a) Aggregate number of shares of Common Stock beneficially owned:
2,473,814, composed of 80,000 shares of outstanding Common
Stock, 2,386,314 shares of Issuable Common Stock and 7,500
shares of Common Stock issuable upon exercise of Mr. Simon's
option
Percentage: 46.52%
(b) 1. Sole power to vote or to direct to vote: -0-
2. Shared power to vote or to direct to vote: 2,473,814
3. Sole power to dispose or to direct the disposition: -0-
4. Shared power to dispose or to direct the
disposition: 2,473,814
(c) Other than the transactions described in Item 4 of this
Schedule 13D, there were no transactions by Imprimis during the
past 60 days.
(d) Not applicable.
(e) Not applicable.
B. Wexford Spectrum Investors LLC
(a) Aggregate number of shares of Common Stock beneficially owned:
624,071, composed of 20,000 shares of outstanding Common Stock,
596,571 shares of Issuable Common Stock and 7,500 shares of
Common Stock issuable upon exercise of Mr. Simon's option
Percentage: 11.74%
(b) 1. Sole power to vote or to direct to vote: -0-
2. Shared power to vote or to direct to vote: 624,071
3. Sole power to dispose or to direct the disposition: -0-
4. Shared power to dispose or to direct the
disposition: 624,071
(c) Other than the transactions described in Item 4 of this
Schedule 13D, there were no transactions by Wexford during the
past 60 days.
(d) Not applicable.
(e) Not applicable.
C. Wexford Management
(a) Aggregate number of shares of Common Stock beneficially owned:
3,090,385, composed of 100,000 shares of outstanding Common
Stock, 2,982,885 shares of Issuable Common Stock and 7,500
shares of Common Stock issuable upon exercise of Mr. Simon's
option
Percentage: 58.12%
(b) 1. Sole power to vote or to direct to vote: -0-
2. Shared power to vote or to direct to vote: 3,090,385
3. Sole power to dispose or to direct the disposition: -0-
4. Shared power to dispose or to direct the
disposition: 3,090,385
(c) Other than the transactions described in Item 4 of this
Schedule 13D, there were no transactions by Wexford Management
during the past 60 days.
(d) Not applicable.
(e) Not applicable.
C. Joseph M. Jacobs
(a) Aggregate number of shares of Common Stock beneficially owned:
3,090,385, composed of 100,000 shares of outstanding Common
Stock, 2,982,885 shares of Issuable Common Stock and 7,500
shares of Common Stock issuable upon exercise of Mr. Simon's
option
Percentage: 58.12%
(b) 1. Sole power to vote or to direct to vote: -0-
2. Shared power to vote or to direct to vote: 3,090,385
3. Sole power to dispose or to direct the disposition: -0-
4. Shared power to dispose or to direct the
disposition: 3,090,385
(c) Other than the transactions described in Item 4 of this
Schedule 13D, there were no transactions by Mr. Jacobs
during the past 60 days.
(d) Not applicable.
(e) Not applicable.
D. Charles E. Davidson
(a) Aggregate number of shares of Common Stock beneficially owned:
3,090,385, composed of 100,000 shares of outstanding Common
Stock, 2,982,885 shares of Issuable Common Stock and 7,500
shares of Common Stock issuable upon exercise of Mr. Simon's
option
Percentage: 58.12%
(b) 1. Sole power to vote or to direct to vote: -0-
2. Shared power to vote or to direct to vote: 3,090,385
3. Sole power to dispose or to direct the disposition: -0-
4. Shared power to dispose or to direct the
disposition: 3,090,385
(c) Other than the transactions described in Item 4 of this
Schedule 13D, there were no transactions by Mr. Davidson
during the past 60 days.
(d) Not applicable.
(e) Not applicable.
Wexford Management may, by reason of its status as manager of
Imprimis and Wexford, be deemed to own beneficially the Common Stock of
which Imprimis and Wexford possess beneficial ownership.
Each of Charles E. Davidson and Joseph M. Jacobs may, by reason of
his status as a controlling person of Wexford Management, be deemed to own
beneficially the Common Stock of which Imprimis and Wexford possesses
beneficial ownership.
Each of Charles E. Davidson, Joseph M. Jacobs and Wexford Management
shares the power to vote and to dispose of the shares of Common Stock
Imprimis and Wexford beneficially own.
Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer.
See Items 2, 3, 4, and 5 above.
The Second Supplement reinstates, for so long as any of the Senior
Convertible Preferred Stock remain outstanding, certain negative covenants
restricting actions that may be taken by the Company that were contained in
the Investment Agreement. The Company has agreed in the Second Supplement
to seek the Shareholder Approval as soon as possible. Receipt of the
Shareholder Approval is not a condition to the transactions contemplated by
the Second Supplement and, other than as specifically contemplated by the
Second Supplement or by the Certificate of Designations, Preferences and
Rights for the Senior Convertible Preferred Stock (the "New Certificate of
Designation"), a failure to obtain the Shareholder Approval shall have no
effect on the transactions contemplated by the Second Supplement or the
obligations of the Company under the Second Supplement.
Imprimis and Wexford have agreed in the Second Supplement that,
during the period prior to January 3, 1999, they shall take no action with
respect to the Company or its affiliates, directors or employees based upon
their allegations of breach of the Investment Agreement or
misrepresentations by the Company prior to the date of the Second
Supplement. They have also agreed to waive any claims based on such alleged
breaches and misrepresentations in the event that all of the Senior
Convertible Preferred Stock is redeemed by the Company within the time
frame contemplated by the New Certificate of Designation. The Company
acknowledged that, by entering into the Second Supplement, Imprimis and
Wexford have not waived any rights or claims that they may have relating to
any such alleged breaches or misrepresentations other than under the
circumstances contemplated by the immediately preceding sentence.
In the Second Supplement, Imprimis and Wexford have represented that
they have acquired and shall hold the Senior Convertible Preferred Stock
for their own account for investment only and not with a view to, or for
resale in connection with, the public sale or distribution thereof except
pursuant to sales registered under the Securities Act of 1933, as amended,
or pursuant to an exemption from registration provided thereunder, have
agreed not to short sell or to write any type of put options against shares
of the Common Stock and the Investors and their affiliates, and have
represented and warranted that they will not use, directly or indirectly,
any use shares of Issuable Common Stock to cover any short sale position or
put position in the Common Stock that existed prior to or from the date of
the Second Supplement.
The Second Supplement further provides that all shares of Issued
Common Stock and Issuable Common Stock will constitute "Registrable
Securities"under the Registration Rights Agreement and that the
Registration Rights Agreement shall be modified to increase the number of
"Demand Registrations" for which the Company pays the expenses of the
holders of Registrable Securities from two to five.
The rights of holders of the Senior Convertible Preferred Stock are
set forth in the New Certificate of Designation. The Senior Convertible
Preferred Stock ranks prior to the Common Stock or any other class of stock
of the Company, has an initial aggregate Liquidation Preference (as defined
below) of $50 per share and provides for the payment of quarterly
dividends. Dividends accruing through December 31, 2000 will be payable at
a per annum rate of 8% of the Liquidation Preference if payable in cash or
a per annum rate of 10% of the Liquidation Preference if payable in
additional shares of Senior Convertible Preferred Stock. Dividends accruing
after December 31, 2000 will be payable at a per annum rate of 12% of the
Liquidation Preference. "Liquidation Preference" is $50 per share (or
proportionate amount thereof in the case of any fractional shares of Senior
Convertible Preferred Stock) plus an amount equal to all dividends (whether
or not earned or declared) accumulated and unpaid on the shares of Senior
Convertible Preferred Stock to the date of final distribution, such
determination to be made, in the event that dividends remain unpaid as to
one or more dividend payment dates, by deeming the amount of any dividend
not paid on the relevant dividend payment date as having been added to the
stated amount of the underlying share as of such dividend payment date.
At the option of the holder thereof and upon surrender thereof for
conversion to the Company at its corporate headquarters at any time on or
after January 3, 1999 or, should the Company fail to receive the
Shareholder Approval on or prior to August 31, 1998, on or after August 31,
1998, each share of Senior Convertible Preferred Stock will be convertible
into such number of fully paid and nonassessable shares of Common Stock as
is determined by dividing the (x) the Liquidation Preference of such share
determined as of the date of conversion by (y) the lower of $1.75 and 75%
of the Current Market Price Per Share (as defined below) determined as of
the trading day immediately prior to the date of conversion. The "Current
Market Price Per Share" of Common Stock at any date shall be deemed to be
the average of the closing sale prices for the 20 consecutive trading days
before the day in question. The closing sale price for each day shall be
reported by the NASDAQ Stock Market or as reported by any successor central
market system. The conversion rate is subject to adjustment as per the New
Certificate of Designation.
The shares of Senior Convertible Preferred Stock are optionally
redeemable in whole but not in part on or before January 3, 1999. The price
for the redemption is the Liquidation Preference for the shares being
redeemed determined as if the date of final distribution were the date on
which the payment of the redemption price is made and as if the dividends
thereon shall have accrued thereon at a rate of 12% per annum since the
last dividend payment date on which dividends were paid.
The Second Supplement and the New Certificate of Designation have
been filed as exhibits to this Schedule 13D and are hereby incorporated by
reference.
Except as described above, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons
named in Item 2 or between such persons and any other person with respect
to any securities of the Company, including but not limited to, transfer or
voting of any such securities, finder's fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit VIII -- Second Supplement to Investment Agreement,
dated as of July 2, 1998, without Exhibits
Exhibit IX -- Certificate of Designation, Preferences and
Rights of the Senior Convertible Preferred
Stock ($.01 Par Value) of Complete Wellness
Centers, Inc., filed with the Secretary of
State of Delaware on July 2, 1998
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true,
complete and correct.
Date: July 16, 1998
IMPRIMIS INVESTORS LLC
By: /s/ Arthur H. Amron
------------------------------
Name: Arthur H. Amron
Title: Vive President
WEXFORD SPECTRUM INVESTORS LLC
By: /s/ Arthur H. Amron
------------------------------
Name: Arthur H. Amron
Title: Vice President
WEXFORD MANAGEMENT LLC
By: /s/ Arthur H. Amron
------------------------------
Name: Arthur H. Amron
Title: Senior Vice President
/s/ Charles E. Davidson
---------------------------------
/s/ Joseph M. Jacobs
---------------------------------
Exhibit VIII
SECOND SUPPLEMENT TO INVESTMENT AGREEMENT
SECOND SUPPLEMENT TO INVESTMENT AGREEMENT, dated as of July 2,
1998 (this "Second Supplement"), among Complete Wellness Centers, Inc., a
Delaware corporation (the "Company"), Imprimis Investors LLC ("Imprimis")
and Wexford Spectrum Investors LLC (together with Imprimis, the
"Investors").
WHEREAS, the Company and the Investors are parties to the
Investment Agreement, dated as of December 19, 1997, as previously
supplemented by the Supplement to Investment Agreement, dated as of January
12, 1998 (such Supplement, the "First Supplement" and such Investment
Agreement, as supplemented by the First Supplement, the "Investment
Agreement"). Capitalized terms used in this Second Supplement without
definition shall have the meanings ascribed to them in the Investment
Agreement; and
WHEREAS, in order to permit the Company to meet certain
requirements for the continued listing of the Common Stock on the NASDAQ
SmallCap Market, the Company and the Investors desire to restructure the
Investors' investment in the Company in the manner provided in this Second
Supplement.
1. The Certificate of Designations, Preferences and Rights
providing for the terms of a new series of Senior Convertible Preferred
Stock (the "New Preferred Stock") in the form of Exhibit A hereto shall be
filed with the Secretary of State of the State of Delaware on the date
hereof (the "New Certificate"), the New Certificate having been approved by
the Board of Directors of the Company and by the Investors as the holders
of all outstanding shares of the Senior Preferred Stock of the Company (the
"Old Preferred Stock"). New certificates representing validly issued,
fully paid and nonassessable shares of New Preferred Stock with accrued
dividends as provided in the New Certificate are being issued to the
Investors, with a certificate representing 80,000 shares of the New
Preferred Stock being issued to Imprimis and a certificate representing
20,000 shares of New Preferred Stock being issued to Wexford. The
Investors shall return to the Company the certificates representing the Old
Preferred Stock as originally issued and the Company shall file with the
Secretary of State of the State of Delaware a Certificate of Decrease to
evidence the decrease to zero the number of authorized shares of the Old
Preferred Stock.
2. The Warrants shall be cancelled and returned to the Company
by the Investors.
3. In consideration of the Investors' agreement to exchange the
Old Preferred Stock for the New Preferred Stock as provided for in Section
1 and to cancel the Warrants as provided for in Section 2, an aggregate of
100,000 validly issued, fully paid and nonassessable shares of Common Stock
(the "Issued Common Stock") are being issued to the Investors, with a
certificate representing 80,000 shares of the Issued Common Stock being
issued to Imprimis and a certificate representing 20,000 shares of Issued
Common Stock being issued to Wexford.
4. The Issued Common Stock and the Common Stock issuable upon
conversion of the New Preferred Stock as amended by Section 1 (the
"Issuable Common Stock"), together with any securities that may be issued
in respect thereof, shall constitute "Registrable Securities" for purposes
of the Registration Rights Agreement and the Registration Rights Agreement
shall be modified to increase the number of "Demand Registrations" for
which the Company pays the expenses of the holders of Registrable
Securities from two to five.
5. Matters relating to the issuance and sale of the Issued
Common Stock, the exchange of the Old Preferred Stock for the New Preferred
Stock and the issuance of the Issuable Common Stock upon conversion thereof
and the execution and delivery by the Company of this Second Supplement
shall be addressed in an opinion from Epstein Becker & Green, P.C., special
counsel to the Company, dated the date hereof and substantially in the form
of the opinion of such firm previously provided under the Investment
Agreement and otherwise acceptable to the Investors.
6. The issuance and sale of the Issued Common Stock, the
exchange of the Old Preferred Stock for the New Preferred Stock and
cancellation of the Warrants shall take place as soon as practicable after
execution of this Second Supplement, subject to (a) the delivery by the
Company to the Investors of a copy of the New Certificate certified by the
Secretary of State of the State of Delaware, (b) the execution and delivery
by the Company to the Investors of the certificates representing the Issued
Common Stock and the New Preferred Stock, (c) the payment by the Company to
the Investors of $25,000 in partial satisfaction of its obligation to
reimburse the Investors for the reasonable fees and expenses of their legal
counsel under Section 9, (d) the delivery to the Investors of the opinion
referenced in Section 5, (e) the delivery by the Investors to the Company
of the certificates representing the Old Preferred Stock and the Warrants,
and (f) confirmation by the Company, which it hereby makes, that the
Company's representations and warranties contained in the Investment
Agreement were true and complete in all material respects when given and
that, apart from information contained in SEC Reports filed prior to the
date hereof or other written information that has been provided by the
Company to the Investors prior to the date hereof, there are no matters
that would require any material changes to such representations and
warranties were they being deemed to be given as of the date hereof, with
such representations and warranties deemed to cover as Capital Stock the
New Preferred Stock, the Issued Common Stock and the Issuable Common Stock
and all information provided by the Company to the Investors since January
12, 1998, including without limitation all SEC Reports, all historical or
projected financial information and all information relating to any
governmental investigation of or affecting the Company, its practices or
its employees. Although the transactions contemplated by this Second
Supplement shall be deemed to have occurred as of the date hereof, the
delivery by the Company of the certificates pursuant to clause (b), the
payment pursuant to clause (c) and the opinion pursuant to clause (d) shall
occur not later than July 6, 1998 and the delivery by the Investors of the
certificates pursuant to clause (e) shall occur promptly following such
delivery by the Company.
7. Notwithstanding the provision in Section 7 of the First
Supplement to the contrary, from and after the date hereof and for so long
as any New Preferred Stock remains outstanding, all of the "Negative
Covenants" provided for in Section VIII of the Investment Agreement shall
be reinstated and remain in full force and effect, except that the exercise
of the Company's optional redemption right under the New Preferred Stock
shall not be prohibited under Section VIII(E).
8. The Company shall, as soon as possible, but no later than 30
days after the date hereof and in accordance with its certificate of
incorporation and by-laws and any applicable laws or rules, seek to obtain
any and all requisite shareholder approval (the "Shareholder Approval") of
the increase in its authorized shares of Common Stock to 50,000,000 and the
issuance of the Issued Common Stock and the Issuable Common Stock and
provide evidence reasonably satisfactory to the Investors that the
Shareholder Approval shall have been obtained. The Company shall submit to
the Investors for their prior approval copies of the resolutions or written
consents pursuant to which the shareholders will evidence the Shareholder
Approval and any and all other documents to be sent to shareholders in
connection with seeking the Shareholder Approval. Receipt of the
Shareholder Approval is not a condition to the transactions contemplated
by this Second Supplement and, other than as specifically contemplated by
this Second Supplement or by the Amended Certificate, a failure to obtain
the Shareholder Approval shall have no effect on the transactions
contemplated hereby or the obligations of the Company hereunder.
9. The Company confirms that it will promptly reimburse the
Investors for the reasonable fees and expenses of their legal counsel in
connection with this Second Supplement, the transactions contemplated
hereby and the discussions between the Company and the Investors through
the date hereof arising out of the Investment Agreement.
10. The Investors agree that, during the period prior to January
3, 1999, the Investors shall take no action with respect to the Company or
its affiliates, directors or employees based upon the Investors'
allegations of breach of the Investment Agreement or misrepresentations by
the Company prior to the date hereof. The Investors hereby agree to waive
any claims based on such alleged breaches and misrepresentations in the
event that all of the New Preferred Stock is redeemed by the Company within
the time frame contemplated by the New Certificate. The Company
acknowledges that, by entering into this Second Supplement, the Investors
have not waived any rights or claims that they may have relating to any
such alleged breaches or misrepresentations other than under the
circumstances contemplated by the immediately preceding sentence.
11. The Investors have acquired and shall hold the New Preferred
Stock for their own account for investment only and not with a view to, or
for resale in connection with, the public sale or distribution thereof
except pursuant to sales registered under the Securities Act of 1933, as
amended, or pursuant to an exemption from registration provided thereunder.
The Investors and their affiliates agree not to short sell or to write any
type of put options against shares of the Common Stock and the Investors
and their affiliates represent and warrant that they will not use, directly
or indirectly, any use shares of Issuable Common Stock to cover any short
sale position or put position in the Common Stock that existed prior to or
from the date hereof.
12. Except as modified pursuant to this Second Supplement, all
terms and provision of the Investment Agreement shall remain in full force
and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplement to be duly executed as of the date first written above.
COMPLETE WELLNESS
CENTERS, INC.
BY /s/ C. Thomas McMillen
-------------------------------
Name:
Title:
IMPRIMIS INVESTORS LLC
BY /s/ Frederick Simon
------------------------------
Name: Frederick Simon
Title: SVP
WEXFORD SPECTRUM
INVESTORS LLC
BY /s/ Frederick Simon
------------------------------
Name: Frederick Simon
Title: SVP
Exhibit IX
CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS
OF THE
SENIOR CONVERTIBLE PREFERRED STOCK
($.01 Par Value)
OF
COMPLETE WELLNESS CENTERS, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
The undersigned DOES HEREBY CERTIFY that the following resolution
was duly adopted on July 2, 1998 by the Board of Directors (the "Board") of
Complete Wellness Centers, Inc., a Delaware corporation (hereinafter called
the "Corporation"), in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware:
RESOLVED that pursuant to authority expressly granted to and
vested in the Board by provisions of the Certificate of Incorporation
of the Corporation (the "Certificate of Incorporation"), the issuance
of a series of Preferred Stock, par value $.01 per share (the
"Preferred Stock"), which shall consist of up to 134,500 of the
2,000,000 shares of Preferred Stock which the Corporation now has
authority to issue, be, and the same hereby is, authorized, and the
powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations
or restrictions thereof, of the shares of such series (in addition to
the powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations
or restrictions thereof, set forth in the Certificate of Incorporation
which may be applicable to the Preferred Stock) are fixed as follows:
(i) The designation of such series of the Preferred Stock
authorized by this resolution shall be the Senior Convertible Preferred
Stock (the "Senior Convertible Preferred Stock"). The total number of
shares of the Senior Convertible Preferred Stock shall be 134,500.
(ii) Holders of shares of Senior Convertible Preferred Stock
will be entitled to receive, when and as declared by the Board out of
assets of the Corporation legally available for payment, an annual cash
dividend per share equal to (A) in the case of dividends accruing on or
prior to December 31, 2000, 8% of the Liquidation Preference (as defined
below) thereof on the relevant dividend payment date payable in cash or, if
such payment in cash is not then made, 10% of the Liquidation Preference
thereof on the relevant dividend payment date payable in additional shares
of Senior Convertible Preferred Stock (which may include fractional shares)
and (B) in the case of dividends accruing after December 31, 2000, 12% of
the Liquidation Preference thereof on the relevant payment date payable in
cash, in each case accruing, with respect to 20,000 shares of Senior
Convertible Preferred Stock outstanding, from January 12, 1998, and with
respect to 80,000 of Senior Convertible Preferred Stock outstanding, from
January 27, 1998, and payable in quarterly installments on March 31, June
30, September 30 and December 31, commencing March 31, 1998 (each a
"dividend payment date"). Unless full dividends on the Senior Convertible
Preferred Stock have been paid, no dividends (other than in Common Stock of
the Corporation) may be paid or declared and set aside for payment or other
distribution made upon the Common Stock or on any other stock of the
Corporation, nor may any Common Stock or any other stock of the Corporation
be redeemed, purchased or otherwise acquired for any consideration (or any
payment made to or available for a sinking fund for the redemption of any
shares of such stock). Dividends payable on the Senior Convertible
Preferred Stock for any period less than the full dividend period will be
computed on the basis of a 360-day year consisting of twelve 30-day months.
For purposes of this paragraph (ii), "Liquidation Preference" shall have
the meaning set forth in paragraph (iii) below with the relevant dividend
payment date being deemed to be the date of final distribution.
(iii) The shares of Senior Convertible Preferred Stock shall
rank prior to the shares of Common Stock and of any other class of stock of
the Corporation, so that in the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the
holders of the Senior Convertible Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for distribution to
its stockholders, whether from capital, surplus or earnings, before any
distribution is made to holders of shares of Common Stock or any other such
stock, an amount equal to the stated amount thereof of $50 per share (or
proportionate amount thereof in the case of any fractional shares of Senior
Convertible Preferred Stock) plus an amount equal to all dividends (whether
or not earned or declared) accumulated and unpaid on the shares of Senior
Convertible Preferred Stock to the date of final distribution, such
determination to be made, in the event that dividends remain unpaid as to
one or more dividend payment dates, by deeming the amount of any dividend
not paid on the relevant dividend payment date as having been added to the
stated amount of the underlying share as of such dividend payment date (the
amount as so determined, the "Liquidation Preference" of a share of Senior
Convertible Preferred Stock). After payment of the full amount of the
Liquidation Preference, the holders of shares of Senior Convertible
Preferred Stock will not be entitled to any further participation in any
distribution of assets by the Corporation. If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of shares
of Senior Convertible Preferred Stock shall be insufficient to pay in full
the preferential amount aforesaid, then such assets, or the proceeds
thereof, shall be distributable among such holders ratably in accordance
with the respective amounts which would be payable on such shares if all
amounts payable thereon were payable in full. For the purposes hereof,
neither a consolidation or merger of the Corporation with or into any other
corporation, nor a merger of any other corporation with or into the
Corporation, nor a sale or transfer of all or any part of the Corporation's
assets for cash or securities shall be considered a liquidation,
dissolution or winding up of the Corporation.
(iv) The shares of Senior Convertible Preferred Stock will be
optionally redeemable by the Corporation as provided in this paragraph
(iv):
(A) The shares of Senior Convertible Preferred Stock shall
be optionally redeemable in whole but not in part during the
period from July 2, 1998 through January 3, 1999.
(B) The redemption price for shares of Senior Convertible
Preferred Stock being redeemed shall be the Liquidation
Preference for the shares being redeemed determined as if the
date of final distribution were the date on which the payment of
the redemption price is made and as if the dividends thereon
shall have accrued thereon at a rate of 12% per annum, with
respect to 20,000 shares of Senior Convertible Preferred Stock
outstanding, from January 12, 1998, and with respect to 80,000 of
Senior Convertible Preferred Stock outstanding, from January 27,
1998.
(v) At the option of the holder thereof and upon surrender
thereof for conversion to the Corporation at its corporate headquarters at
any time on or after January 3, 1999 or, should the Corporation fail to
receive the Shareholder Approval (as defined below) on or prior to August
31, 1998, on or after August 31, 1998, each share of Senior Convertible
Preferred Stock will be convertible into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing the (x)
the Liquidation Preference of such share determined as of the date of
conversion by (y) the lower of $1.75 and 75% of the Current Market Price
Per Share determined as of the trading day immediately prior to the date of
conversion, the Conversion Rate being subject to adjustment as hereinafter
provided:
(A) In case the Corporation shall on or after January 12,
1998(1) pay a dividend in shares of its capital stock, (2)
subdivide its outstanding shares of Common Stock into a greater
number of shares, (3) combine its outstanding shares of Common
Stock into a smaller number of shares, or (4) issue by
reclassification of its shares of Common Stock any shares of its
capital stock, the Conversion Rate in effect immediately prior
thereto shall be adjusted so that the holder of a share of Senior
Convertible Preferred Stock surrendered for conversion after the
record date fixing stockholders to be affected by such event,
shall be entitled to receive upon conversion the number of such
shares of Common Stock which such holder would have been
entitled to receive after the happening of such event had such
share of Senior Convertible Preferred Stock been converted
immediately prior to such record date. Such adjustment shall be
made whenever any of such events shall happen, but shall also be
effective retroactively as to shares of Senior Convertible
Preferred Stock converted between such record date and the date
of the happening of any such event.
(B) In case the Corporation shall on or after January 12,
1998 issue rights or warrants to all holders of its Common Stock
entitling them to subscribe for or purchase shares of Common
Stock at a price per share less than the Current Market Price Per
Share of Common Stock at the record date mentioned below, the
number of shares of Common Stock into which each share of Senior
Convertible Preferred Stock shall thereafter be convertible shall
be determined by multiplying the number of shares of Common Stock
into which such share of Senior Convertible Preferred Stock was
theretofore convertible by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding on the
date of issuance of such rights or warrants plus the number of
additional shares of Common Stock offered for subscription or
purchase, and the denominator of which shall be the number of the
shares of Common Stock outstanding on the date of issuance of
such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered
would purchase at such Current Market Price Per Share. Such
adjustment shall be made whenever such rights or warrants are
issued, but shall also be effected retroactively as to shares of
Senior Convertible Preferred Stock converted between the record
date for the determination of stockholders entitled to receive
such rights or warrants and the date such rights or warrants are
issued.
(C) In case the Corporation shall on or after January 12,
1998 distribute to all holders of its Common Stock evidences of
its indebtedness or assets (excluding any cash dividend or
distribution made out of current or retained earnings) or rights
to subscribe other than as set forth in subparagraph (B) above,
then in each such case the number of shares of Common Stock into
which each share of Senior Convertible Preferred Stock shall
thereafter be convertible shall be determined by multiplying the
number of shares of Common Stock into which such share was
theretofore convertible by a fraction, the numerator of which
shall be the Current Market Price Per Share of the Common Stock
on the record date fixed by the Board for such distribution, and
the denominator of which shall be such Current Market Price Per
Share of the Common Stock less the then fair market value (as
determined by the Board, whose determination shall be conclusive)
of the portion of the assets, evidences of indebtedness or
subscription rights so distributed applicable to one share of the
Common Stock. Such adjustment shall be made whenever any such
distribution is made, but shall also be effective retroactively
as to shares of Senior Convertible Preferred Stock converted
between the record date for the determination of stockholders
entitled to receive such distribution and the date such
distribution is made.
(D) For the purpose of any computation under this paragraph
(v), the "Current Market Price Per Share" of Common Stock at any
date shall be deemed to be the average of the closing sale prices
for the 20 consecutive trading days before the day in question.
The closing sale price for each day shall be reported by the
NASDAQ Stock Market or as reported by any successor central
market system.
(E) No adjustment in the conversion rate shall be required
unless such adjustment would require an increase or decrease of
at least 1% in such rate; provided, however, that any adjustments
which by reason of this subparagraph (E) are not required to be
made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this paragraph (v)
shall be made to the nearest one-hundredth of a share.
(F) No fractional shares or scrip representing fractional
shares of Common Stock shall be issued upon the conversion of any
share of Senior Convertible Preferred Stock. If the conversion
thereof results in a fraction, an amount equal to such fraction
multiplied by the Current Market Price Per Share of Common Stock
as of the conversion date shall he paid to such holder in cash by
the Corporation.
(G) In case the Corporation shall on or after January 12,
1998 enter into any consolidation, merger or other transaction in
which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property,
then in each such case each share of Senior Convertible Preferred
Stock remaining outstanding at the time of consummation of such
transaction shall thereafter be convertible into the kind and
amount of such stock or securities, cash and/or other property
receivable upon consummation of such transaction by a holder of
the number of shares of Common Stock into which such shares of
Senior Convertible Preferred Stock might have been converted
immediately prior to consummation of such transaction, assuming
in each case that such holder of Common Stock failed to exercise
rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon consummation
of such transaction (provided that if the kind or amount of
securities, cash or other property receivable upon consummation
of such transaction is not the same for each non-electing share,
then the kind and amount of securities, cash or other property
receivable upon consummation of such transaction for each non-
electing share shall be deemed to be the kind and amount as
receivable per share by a plurality of the non-electing shares).
(H) As used in this Certificate, "Shareholder Approval"
means any and all requisite approval of the shareholders of the
Corporation of the increase in its authorized shares of Common
Stock to 50,000,000 and the issuance of the Common Stock upon
conversion of the Senior Convertible Preferred Stock or as
contemplated by the Second Supplement to Investment Agreement,
dated as of July 2, 1998, among the Corporation, Imprimis
Investors LLC and Wexford Spectrum Investors LLC.
(vi) For so long as any shares of Senior Convertible Preferred
Stock remain outstanding, the Corporation will not, either directly or
indirectly or through merger or consolidation with any other corporation,
without the affirmative vote at a meeting or the written consent with or
without a meeting of the holders of at least 66-2/3 percent in number of
shares of the Senior Convertible Preferred Stock then outstanding, amend,
alter or repeal any of the provisions of the Certificate of Incorporation
(including this resolution) so as to affect adversely the preferences,
special rights or powers of the Senior Convertible Preferred Stock or of
the holders thereof.
(vii) To convert any Senior Convertible Preferred Stock into
Common Stock, the holder shall give written notice to the Company (which
notice may be given by facsimile transmission) that the holder elects to
convert the same. Promptly thereafter such holder shall surrender the
Senior Convertible Preferred Stock at the office of the Company or of any
transfer agent for such stock. The Company shall, as soon as practicable
after receipt of such notice, issue and deliver to or upon the order of
such holder a certificate or certificates for the number of shares of
Common Stock to which the holder shall be entitled, and a new stock
certificate representing the remaining shares of Senior Convertible
Preferred Stock (if any) not converted. The Company shall use its
reasonable best efforts to effectuate any such issuance within 72 hours and
to transmit the shares of Common Stock by messenger or overnight delivery
service to the address designated by such holder. Such conversion shall be
deemed to have been made immediately prior to the close of business on the
date such notice of conversion is received by the Company. The person or
persons entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or
holders of such shares at the close of business on such date.
(viii) The holders of shares of Senior Convertible Preferred
Stock will be entitled to representation on the Corporation's Board of
Directors as provided in this paragraph (viii):
(A) For so long as any shares of Senior Convertible
Preferred Stock remain outstanding, the Corporation shall take
such action as shall be necessary to ensure that at least one
designee of the holders of Senior Convertible Preferred Stock
shall be duly elected to serve as a director of the Corporation.
Thereafter, such holders shall no longer be entitled for a
designee to serve as a director of the Corporation.
(B) In the event that the Corporation shall fail either to
(a) receive the Shareholder Approval on or prior to August 31,
1998, or (b) redeem all of the Senior Convertible Preferred Stock
pursuant to paragraph (iv) hereof on or prior to January 3, 1999,
the Corporation shall, if and when requested by the holders of a
majority of the outstanding shares of the Senior Convertible
Preferred Stock to do so, take any action necessary, including
calling a special meeting, to elect designees of the holders of a
majority of the outstanding shares of the Senior Convertible
Preferred Stock to the Board of Directors such that such
designees shall constitute a majority of such Board of Directors.
Thereafter, for so long as any shares of Senior Convertible
Preferred Stock remain outstanding, the Corporation shall take
such action as shall be necessary to ensure that such designees
or successor designees shall be duly elected to serve as
directors of the Corporation.
IN WITNESS WHEREOF, Complete Wellness Centers, Inc. has caused
this Certificate to be made under the seal of the Corporation and signed by
C. Thomas McMillen, Chairman, and attested by E. Eugene Sharer, President,
this 2nd day of July, 1998.
COMPLETE WELLNESS CENTERS,
INC.
Attest: By: /s/ C. Thomas McMillen
________________________
/s/ E. Eugene Sharer
_____________________
