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. 4)
COMPLETE WELLNESS CENTERS, INC.
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(Name of Issuer)
Common Stock, par value $.0001665 per share
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(Title of Class and Securities)
20452H4-10-3
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(CUSIP Number of Class of Securities)
Arthur Amron, Esq.
411 West Putnam Avenue, Suite 125
Greenwich, Connecticut 06830
(203) 862-7000
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(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
December 10, 1998 and February 26, 1999
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(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 Statement because of
Rule 13d-1(b)(3) or (4), check the following: ( )
See Rule 13d-1(a) for other parties to whom copies are to be sent.
CUSIP No. 20452H4-10-3 13D
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Imprimis Investors LLC
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) (X)
(b) ( )
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
Not applicable
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
( )
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. SOLE VOTING POWER
-0-
NUMBER OF ----------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 2,286,411
OWNED BY ----------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON ----------------------------------------------
WITH 10. SHARED DISPOSITIVE POWER
2,286,411
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,286,411
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
( )
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
41.0% (based on 2,416,635 shares of Common Stock outstanding on
September 30, 1998 and 3,163,914 shares of Common Stock issuable
to the Reporting Person, the other Reporting Persons filing this
Schedule 13D, and the persons who acquired certain securities of
the Reporting Persons). See Items 5 and 6.
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14. TYPE OF REPORTING PERSON
OO
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CUSIP No. 20452H4-10-3 13D
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Wexford Spectrum Investors LLC
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) (X)
(b) ( )
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
Not applicable
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
( )
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. SOLE VOTING POWER
-0-
NUMBER OF ----------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 594,103
OWNED BY ----------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON ----------------------------------------------
WITH 10. SHARED DISPOSITIVE POWER
594,103
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
594,103
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
( )
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 10.6%(based on
2,416,635 shares of Common Stock outstanding on September 30, 1998
and 3,163,914 shares of Common Stock issuable to the Reporting
Person, the other Reporting Persons filing this Schedule 13D, and
the persons who acquired certain securities of the Reporting
Persons). See Items 5 and 6.
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14. TYPE OF REPORTING PERSON
OO
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CUSIP No. 20452H4-10-3 13D
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Wexford Management LLC
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) (X)
(b) ( )
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
Not applicable
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
( )
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Connecticut
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7. SOLE VOTING POWER
-0-
NUMBER OF ----------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 2,850,514
OWNED BY ----------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON ----------------------------------------------
WITH 10. SHARED DISPOSITIVE POWER
2,850,514
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,850,514
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
( )
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.1% (based on 2,416,635 shares of Common Stock outstanding on
September 30, 1998 and 3,163,914 shares of Common Stock issuable
to the Reporting Person, the other Reporting Persons filing this
Schedule 13D and the persons who acquired certain securities of
the Reporting Persons). See Items 5 and 6.
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14. TYPE OF REPORTING PERSON
IA
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CUSIP No. 20452H4-10-3 13D
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Joseph M. Jacobs
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) (X)
(b) ( )
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
Not applicable
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
( )
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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7. SOLE VOTING POWER
-0-
NUMBER OF ----------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 2,850,514
OWNED BY ----------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON ----------------------------------------------
WITH 10. SHARED DISPOSITIVE POWER
2,850,514
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,850,514
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
( )
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.1% (based on 2,416,635 shares of Common Stock outstanding on
September 30, 1998 and 3,163,914 shares of Common Stock issuable
to the Reporting Person, the other Reporting Persons filing this
Schedule 13D and the persons who acquired certain securities of
the Reporting Persons). See Items 5 and 6.
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14. TYPE OF REPORTING PERSON
IN
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CUSIP No. 20452H4-10-3 13D
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Charles E. Davidson
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) (X)
(b) ( )
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
Not applicable
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
( )
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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7. SOLE VOTING POWER
-0-
NUMBER OF ----------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 2,850,514
OWNED BY ----------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON ----------------------------------------------
WITH 10. SHARED DISPOSITIVE POWER
2,850,514
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,850,514
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
( )
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.1% (based on 2,416,635 shares of Common Stock outstanding on
September 30, 1998 and 3,163,914 shares of Common Stock issuable
to the Reporting Person and the other Reporting Persons filing
this Schedule 13D). See Items 5 and 6.
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14. TYPE OF REPORTING PERSON
IN
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Item 4. Purpose of Transaction.
Imprimis and Wexford, the holders of all of the Preferred Stock,
entered into a stock purchase agreement, dated as of February 26, 1999 (the
"Stock Purchase Agreement"), with RVR Consulting Group, Inc., a Florida
corporation (the "Buyer") and the Company, pursuant to which Wexford and
Imprimis agreed to sell an aggregate of 10,969 shares of the Preferred
Stock to the Buyer for a purchase price of $500,000, of which $250,000 was
payable on February 26, 1999, and the remaining $250,000 is payable in six
equal monthly installments of $41,666.67, commencing on May 1, 1999, with
the final monthly installment due and payable on October 1, 1999.
The Stock Purchase Agreement provides that, if the Company is delisted
from the NASDAQ on or prior to June 30, 1999 because of its failure to meet
the minimum tangible net worth test, the Buyer may, within 10 business days
of notification of such delisting, elect to demand a refund of all prior
installment payments paid to Wexford and Imprimis, and the Buyer's
obligation to make further installment payments will terminate. The Buyer
will reconvey (the "Reconveyance") to Wexford and Imprimis 50% of the
shares of Preferred Stock that it purchased upon receiving the refund
payments. Wexford and Imprimis will not be obligated to refund the initial
$250,000 payment.
Wexford and Imprimis have agreed not to convert into Common Stock or
sell their remaining Preferred Stock without the consent of the Buyer.
However, Wexford and Imprimis may convert into Common Stock or sell (i)
10,969 shares beginning 24 months after the date of the sale to the Buyer;
(ii) an additional 10,969 shares 36 months after the date of the sale to
the Buyer (or 13,711 in the event of a Reconveyance); and (iii) an
additional 10,969 shares 48 months after the date of the sale to the Buyer
(or 13,711 in the event of a Reconveyance).
The Stock Purchase Agreement provides that if the Buyer engages in a
transaction involving the shares of Preferred Stock that it purchased from
Wexford and Imprimis, including a sale of such shares, Wexford and Imprimis
will have the right to participate in the transaction on a pro rata basis
based on their remaining aggregate 98,718 shares of Preferred Stock.
Wexford and Imprimis also assigned to the Buyer all of their non-
economic rights (the "Rights") associated with their ownership of the
Preferred Stock, including the right to designate a majority of the Board
of Directors of the Company. The Buyer has agreed to designate one
individual specified by Wexford and Imprimis to the Company's Board.
Upon the earlier of (i) five years from the date of the sale to the
Buyer or (ii) the on which the closing price for the Company's Common Stock
has equaled or exceeded $10 for twenty consecutive trading days, the Buyer
will reassign to Wexford and Imprimis the Rights and the Preferred Stock
will cease to be subject to restrictions on transfer.
The Stock Purchase Agreement also provides that Wexford and Imprimis
will restructure and extend the payment terms of loans in an aggregate
principal amount of $475,000 to the Company.
Except as described above, the Reporting Persons do not have any plans
or proposals, other than those described in the preceding paragraph, 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
Preferred Stock or to formulate other purposes, plans or proposals
regarding the Company or the Common Stock or the 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.
On February 1999, pursuant to the Stock Purchase Agreement, Wexford
and Imprimis sold 10,969 shares of Preferred Stock, of which 8,775 shares
were sold by Imprimis and 2,194 shares were sold by Wexford.
It currently expected that six of the eight Wexford Management
employees who are currently on the Company's Board will resign, in which
case the unvested options that have been granted to them will lapse.
On December 10, 1999, Frederick Simon's option to purchase 3,750
shares of Common Stock, granted in connection with his prior services as a
director of the Company, expired, following his resignation from the Board
in September.
The Reporting Persons may be deemed to beneficially own the respective
percentages and numbers of outstanding shares of Common Stock set forth
below, including the 30,000 shares of Common Stock currently issuable,
pursuant to the options granted to certain employees of Wexford Management
who are directors of the Company, in all of which the Reporting Persons may
be deemed to have an interest. Such percentages have been calculated using
information obtained from the Company's quarterly report on Form 10-QSB for
the period ended September 30, 1998, on the basis of 2,416,635 shares of
Common Stock issued and outstanding on September 30, 1998 and based on an
assumed 3,133,914 shares of Issuable Common Stock at an assumed conversion
price of $1.75 per share of Common Stock issuable to the Reporting Persons
filing this Schedule 13D and to RVR.
A. Imprimis
(a) Aggregate number of shares of Common Stock beneficially owned:
2,286,411, composed of 2,256,411 shares of Issuable Common Stock
and 30,000 shares of Common Stock issuable upon exercise of all
currently vested options granted to the Wexford Directors.
Percentage: 41.0%
(b) 1. Sole power to vote or to direct to vote: -0-
2. Shared power to vote or to direct to vote: 2,286,411
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 2,286,411
(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:
594,103, composed of 564,103 shares of Issuable Common Stock and
30,000 shares of Common Stock issuable upon exercise of all
currently vested options granted to the Wexford Directors.
Percentage: 10.6%
(b) 1. Sole power to vote or to direct to vote: -0-
2. Shared power to vote or to direct to vote: 594,103
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 594,103
(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:
2,850,514, composed of 2,820,514 shares of Issuable Common Stock
and 30,000 shares of Common Stock issuable upon exercise of all
currently vested options granted to the Wexford Directors.
Percentage: 51.0%
(b) 1. Sole power to vote or to direct to vote: -0-
2. Shared power to vote or to direct to vote: 2,850,514
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 2,850,514
(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:
2,850,914, composed of 2,820,514 shares of Issuable Common Stock
and 30,000 shares of Common Stock issuable upon exercise of all
currently vested options granted to the Wexford Directors.
Percentage: 51.0%
(b) 1. Sole power to vote or to direct to vote: -0-
2. Shared power to vote or to direct to vote: 2,850,914
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 2,850,914
(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:
2,850,914, composed of 2,820,514 shares of Issuable Common Stock
and 30,000 shares of Common Stock issuable upon exercise of all
currently vested options granted to the Wexford Directors.
Percentage: 51.0%
(b) 1. Sole power to vote or to direct to vote: -0-
2. Shared power to vote or to direct to vote: 2,850,514
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 2,850,514
(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.
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 XI Stock Purchase Agreement, dated as of
February 26, 1999, among Imprimis
Investors LLC, Wexford Spectrum
Investors LLC, RVR Consulting Group,
Inc. and Complete Wellness Centers, Inc.
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: March 5, 1999
IMPRIMIS INVESTORS LLC
By: /s/ Arthur H. Amron
Name: Arthur H. Amron
Title: Vice 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 INDEX
Exhibit XI Stock Purchase Agreement, dated as of February 26,
1999, among Imprimis Investors LLC, Wexford Spectrum
Investors LLC, RVR Consulting Group, Inc. and Complete
Wellness Centers, Inc.
Exhibit XI
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and
entered into as of this 26th day of February, 1999, by and among IMPRIMIS
INVESTORS LLC, a Delaware limited liability company, having its principal
place of business at c/o Wexford Management LLC, 411 West Putnam Avenue,
Greenwich, Connecticut 06830 ("Imprimis"); WEXFORD SPECTRUM INVESTORS LLC,
a Delaware limited liability company, having its principal place of
business at c/o Wexford Management LLC, 411 West Putnam Avenue, Greenwich,
Connecticut 06830 (collectively, with Imprimis, the "Seller"); and RVR
CONSULTING GROUP, INC., a Florida corporation having an address at c/o P.O.
Box 2148, Goldenrod, Florida 92733 (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Seller owns 109,687 shares of the Senior Convertible
Preferred Stock of Complete Wellness Centers, Inc., a Delaware corporation
(the "Company"), par value $.01 per share (the "Preferred Stock");
WHEREAS, the Seller desires to sell, assign and convey to the
Purchaser 10,969 shares of the Preferred Stock (the "Shares"), and the
Purchaser desires to purchase and acquire such Shares from the Seller on
and subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the respective
representations and warranties hereinafter set forth and of the mutual
covenants and agreements contained herein and other good and valuable
consideration the receipt and sufficiently of which is hereby acknowledged,
and intending to be legally bound, the parties hereto agree as follows:
1. Sale and Purchase. Subject to the terms and conditions
contained herein, the Seller hereby sells, transfers, assigns, conveys and
delivers to the Purchaser, and the Purchaser hereby purchases and accepts
from the Seller, all of the Seller's right, title and interest in and to
the Shares, free and clear of any liens, pledges, security interests,
claims or encumbrance of any kind.
2. Purchase Price; Guarantee of Payment.
(1) The purchase price for the Shares (the "Purchase
Price") shall be Five Hundred Thousand ($500,000) Dollars. On the date
hereof (the "Closing Date"), the Purchaser shall deliver to Seller via wire
transfer of immediately available funds the amount of Two Hundred Fifty
Thousand ($250,000) Dollars as partial payment of the Purchase Price (the
"Initial Payment"). The balance of the Purchase Price shall be payable by
the Purchaser to Seller in six (6) equal monthly installments of Forty-One
Thousand Six Hundred Sixty-Six and 67/100 ($41,666.67) Dollars each,
commencing on May 1, 1999 with the final monthly installment due and
payable on October 1, 1999 (the "Installment Payments"). The Installment
Payments shall be paid by wire transfer of immediately available funds to
an account (or accounts) designated by Seller.
(2) The full and timely payment of the Installment Payments
is hereby jointly and severally guaranteed by Messrs. Joseph Raymond, Jr.,
Sergio Vallejo and Joseph Raymond, Sr. (the "Guarantors"). The Guarantors
are the shareholders of Purchaser. The foregoing guarantee shall be deemed
to be absolute and unconditional, and shall continue until all of the
guaranteed obligations have been paid in full. Notwithstanding the
foregoing, the Seller may not proceed to enforce the guarantee unless and
until following a default in payment of an Installment Payment by
Purchaser, the Purchaser has failed to cure such default within five (5)
days following its receipt of written notice of default from Seller.
3. Representations and Warranties of Seller. Seller hereby
represents and warrants to, and agreed with, the Purchaser as follows:
3.1 Organization and Good Standing. Each entity
constituting the Seller is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Delaware.
3.2 No Conflict.
(1) To the best of its actual knowledge, it being
understood that Seller has not engaged in any investigation of any kind,
the execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby, will not result in a breach, violation or
default or give rise to an event which with the giving of notice or after
the passage of time, or both, would result in a breach, violation or
default of any of the terms or provisions of the Company's Certificate of
Incorporation, By-Laws or of any statute, indenture, mortgage, deed of
trust, loan agreement or other agreement, instrument or restriction to
which the Company is a party or by which the Company or any of its assets
may be bound or affected, or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company.
(2) The execution and delivery of this Agreement, and the
consummation of the transactions contemplated hereby, will not result in a
breach, violation or default or give rise to an event which with the giving
of notice or after the passage of time, or both, would result in a breach,
violation or default of any of the terms or provisions of the Seller's
respective Certificates of Formation, Operating Agreements or of any
statute, indenture, mortgage, deed of trust, loan agreement or other
agreement, instrument or restriction to which the Seller is a party or by
which the Seller or any of its assets may be bound or affected, or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Seller.
3.3 Ownership of Preferred Stock. The 109,687 shares of
Preferred Stock owned by Seller are owned free and clear of all liens,
pledges, security interests, claims or encumbrances of any kind. The
109,687 shares of Preferred Stock owned by the Seller have been duly
authorized and validly issued and are fully paid and non-assessable. There
are no outstanding preemptive, conversion or other rights, options,
warrants or agreements granted or issued by or binding upon the Seller for
the purchase or acquisition of any shares of the Preferred Stock.
4. Representations and Warranties of Purchaser. Purchaser
hereby represents and warrants to, and agrees with, the Seller as follows:
4.1 Organization and Good Standing. The Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Florida.
4.2 No Conflict. The execution and delivery of this
Agreement, and the consummation of the transaction contemplated hereby,
will not result in a breach, violation or default or give rise to an event
which with the giving of notice or after the passage of time, or both,
would result in a breach, violation or default of any of the terms or
provisions of the Purchaser's Certificate of Incorporation, By-Laws or of
any statute, indenture, mortgage, deed of trust, loan agreement or other
agreement, instrument or restriction to which the Purchaser is a party or
by which the Purchaser or any of its assets may be bound or affected, or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Purchaser.
4.3 Investigation by Purchaser. Purchaser is a
sophisticated investor and has conducted its own independent review and
analysis of the business, operations, assets, liabilities, results of
operations, financial condition and prospects of the Company and
acknowledges that Seller has provided Purchaser with access to the records
of the Company for this purpose. Purchaser has acquired sufficient
knowledge about the Company to make an informed decision to enter into this
Agreement, and in making such decision is relying solely on its due
diligence and the representations and warranties contained herein.
5. Acknowledgments and Agreements of the Parties.
(1) To the maximum effort permissible under applicable law,
Seller hereby assigns to Purchaser all of its non-economic rights
associated with its ownership of the Preferred Stock, including but not
limited to the power to designate a majority of the Board of Directors of
the Company (collectively, the "Rights"). To effect the election of the
Purchaser's designees to the Board of Directors of the Company, the Seller
agrees that on the date hereof it shall appoint each of Purchaser's
designees to the Board of Directors of the Company, and shall cause each of
Seller's designees to the Board of Directors of the Company to resign.
Purchaser agrees to the maximum extent permissible under applicable law to
designate one individual specified by Seller as a member of the Board of
Directors. Except as specifically provided below, Seller agrees that it
will not convert, retire, sell, hypothecate or otherwise transfer any of
the Preferred Stock, other than the Shares (collectively, the "Restrictions
on Transfer") without the prior written consent of the Purchaser. In
addition, on the date hereof Seller agrees to execute an irrevocable proxy
in favor of Purchaser substantially in the form of Exhibit A attached
hereto with respect to the shares of the Company's common stock issuable
upon the conversion of the Preferred Stock owned by Seller converted with
the consent of Purchaser pursuant to the preceding sentence.
(2) In the event Purchaser elects to convert, sell, retire,
hypothecate or transfer, or otherwise engage in any transaction with
respect to, all or any portion of the Shares, then, (i) it shall provide
Seller with ten (10) days prior written notice of such election and of
Seller's right to participate therein, and (ii) notwithstanding the
Restrictions on Transfer, Seller shall have the right to take the same
action as the Purchaser, or engage in the same transaction as the
Purchaser, as the case may be, with respect to the same pro rata portion of
the 98,718 shares of Preferred Stock retained by Seller.
(3) In the event the Company is delisted from NASDAQ on or
prior to June 30, 1999 because of its failure to satisfy the minimum
tangible net worth test (whether or not additional tests are met), then
Purchaser may elect, within ten business days of its receipt of
notification of delisting, to demand a refund of all prior Installment
Payments paid to Seller. Upon its receipt of notice of such election
delivered by Purchaser, Seller shall promptly refund to Purchaser any and
all Installment Payments previously received by Seller, and the obligation
of Purchaser to make future Installment Payments shall immediately
terminate. The Seller shall not be obligated under such circumstances to
refund any portion of the Initial Payment. Upon Purchaser's receipt of
such refunded Installment Payments (or upon delivery of Purchaser's notice
of Selection if no Installment Payments were paid to Seller), Purchaser
shall simultaneously re-convey to Seller fifty (50%) percent of the Shares
(a "Reconveyance").
(4) Seller hereby agrees not to pursue, except in concert
with Purchaser, any suit, action or claim against the Company, or against
any board member, employee, consultant or entity associated or affiliated
with the Company other than claims for contribution or indemnity. At the
request of Purchaser and in exchange for reciprocal releases, Seller shall
release the Company and any affiliate of the Company from any claims based
on disputes arising prior to the Closing Date, other than claims for
contribution or indemnity.
(5) Notwithstanding the Restrictions of Transfer, and in
addition to any rights it may have with respect to the sale, retirement,
hypothecation or other transfer of the Preferred Stock under Section 5(2)
hereof, Purchaser hereby agrees that Seller may convert, sell, retire,
hypothecate or transfer (i) 10,969 shares of Preferred Stock on and after
the date which is twenty-four (24) months after the Closing Date, (ii) an
additional 10,969 shares of Preferred Stock (13,711 shares in the event of
a Reconveyance) on and after the date which is thirty-six (36) months after
the Closing Date, and (iii) an additional 10,969 shares of Preferred Stock
(13,711 in the event of Reconveyance) on and after the date which is forty-
eight (48) months after the Closing Date.
(6) Upon the earlier to occur of either (i) the date which
is five (5) years from the Closing Date or (ii) the date upon which the
closing price for the Company's common stock has equaled or exceeded Ten
($10) Dollars for twenty (20) consecutive trading days, the Purchaser shall
promptly reassign to Seller the Rights, and the Restrictions on Transfer
shall lapse and the Preferred Stock shall cease to be subject to the
Restrictions on Transfer.
(7) Purchaser represents that on or after February 12,
1999, the Purchaser or its designee provided not less than $250,000 in
working capital to the Company. In addition, the Purchaser agrees that it
or its designee shall provide to the Company up to an additional $500,000
over the next twelve (12) months to the extent necessary to meet the
working capital requirements of the Company.
(8) The Seller hereby agrees to restructure and extend the
payment terms of its $475,000 principal amount senior secured loan to the
Company as follows: during the period from the Closing Date to December
31, 1999 interest only will be payable by the Company to Seller with
respect to such loan. During the period January 1, 2000 to December 31,
2001 the Company will make equal quarterly payments to Seller with respect
to such loan to repay the unpaid principal and accrued interest based on a
five year amortization schedule. The Company will make a balloon payment
to Seller equal to the full unpaid principal balance and all accrued
interest on January 31, 2002.
(9) In the event Purchaser defaults in the performance of
any of its material obligations set forth in this Agreement, Purchaser
shall promptly reassign to Seller the Rights, and the Restrictions on
Transfer shall lapse and the Preferred Stock shall cease to be subject to
the Restrictions on Transfer.
6. Survival; Indemnification.
6.1 Survival; Remedy for Breach. The covenants,
agreements, representations, warranties and indemnities of the parties
hereto contained herein or in any certificate, Schedule or other writing
attached hereto, or required by the terms hereof to be delivered by
Purchaser or Seller or their respective affiliates, shall survive the
Closing for a period from the Closing Date until the expiration of the
applicable statutory period of limitations (giving effect to any waiver or
extension thereof). Notwithstanding the preceding sentence, any
representation, warranty, covenant or agreement in respect of which
indemnity may be sought under Section 6 hereof shall survive the time at
which it would otherwise terminate if notice of the inaccuracy or breach
thereof, which shall include with reasonable specificity the elements of
such claim, shall have been given to the party against whom such indemnity
may be sought prior to such time.
6.2 Indemnification by Seller.
(1) Each of the entities comprising the Seller hereby
jointly and severally indemnify the Purchaser, its shareholders, officers,
directors and affiliates (collectively, the "Indemnitees") against and
agree to hold each of them harmless from any and all damage, loss,
liability, expense (including, without limitation, reasonable out-of-pocket
expense of investigation and attorneys' fees and expenses in connection
with any action, suit or proceeding brought against or involving any
indemnitee) and cost (collectively, "Indemnified Amounts") incurred or
suffered by any Indemnitee arising out of any misrepresentation or breach
of warranty, covenant or agreement made or to be performed by Seller
pursuant to this Agreement.
(2) The agreements and indemnities of the Seller contained
herein shall be cumulative, except that an Indemnitee shall not recover
more than once for the same Indemnified Amount.
(3) The Indemnitees agree to give notice to the Seller
promptly after learning of the assertion of any claim, or the commencement
of any suit, action or proceeding, in respect of which indemnity may be
sought hereunder; provided, however, that the failure of any Indemnitee to
give such notice shall not constitute a waiver of its rights hereunder in
respect of the claim, suit, action or proceeding with respect to which such
notice was required to have been given hereunder.
(4) The Seller shall not be liable under this Section 6.2
for any settlement effected without its consent of any claim, litigation or
proceeding in respect of which indemnity may be sought hereunder. No
investigation by Purchaser at or prior to the Closing shall relieve Seller
of any liability hereunder.
(5) The amount required to be paid to an Indemnitee by the
Seller for any Indemnified Amounts shall be paid not later than thirty (30)
days after receipt by the Seller of written notice from an Indemnitee
stating that such Indemnified Amounts have been incurred and the amount
thereof and of the related indemnity payment.
6.3 Indemnification by the Purchaser.
(1) The Purchaser hereby indemnifies the Seller against and
agrees to hold it harmless from any and all damages, loss, liability,
expense (including, without limitation, reasonable out-of-pocket expenses
of investigation and reasonable attorneys fees and expenses in connection
with any action, suit or proceeding brought against or involving the
Seller) and cost incurred or suffered by the Seller (collectively,
"Indemnified Amounts") arising out of (i) any misrepresentation or breach
of warranty, covenant or agreement made or to be performed by the Purchaser
pursuant to this Agreement or (ii) any and all exercise of the Rights by
Purchaser. The agreements and indemnities of the Purchaser contained
herein shall be cumulative, except that the Seller shall not recover more
than once for the same Indemnified Amount.
(2) The Seller agrees to give notice to the Purchaser
promptly after learning of the assertion of any claim, or the commencement
of any suit, action or proceeding, in respect of which indemnity may be
sought hereunder; provided, however, that the failure of the Seller to give
such notice shall not constitute a waiver of its rights hereunder in
respect of the claim, suit, action or proceeding with respect to which such
notice was required to have been given hereunder.
(3) The Purchaser shall not be liable under this Section
6.3 for any settlement effected without its consent of any claim,
litigation or proceeding in respect of which indemnity may be sought.
(4) The amount required to be paid to the Seller by the
Purchaser for any Indemnified Amounts hereunder shall be paid not later
than thirty (30) days after receipt by the Purchaser of written notice from
the Seller, stating that such Indemnified Amounts have been incurred and
the amount thereof and of the related indemnity payment.
7. Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if sent by facsimile
transmission and confirmed by registered or certified mail, postage
prepaid, addressed as follows:
To purchaser:
RVR Consulting Group, Inc.
P.O. Box 2148
Goldenrod, FL 32733
Attention: Joseph Raymond, Jr.
Facsimile No.: (407) 657-1132
To Seller:
Imprimis Investors LLC
Westford Spectrum Investors LLC
c/o Westford Management LLC
411 West Putnam Avenue
Greenwich, Connecticut 06830
Attention: Kenneth Rubin
Facsimile No.: (203) 862-7471
With a Copy To:
Arthur Amron, Esq.
Facsimile: (203) 862-7312
To the Guarantors:
Mr. Joseph Raymond, Jr.
c/o RVR Consulting Group, Inc.
P.O. Box 2148
Goldenrod, FL 32733
Facsimile No.: (407) 657-1132
Sergio Vallejo
c/o RVR Consulting Group, Inc.
P.O. Box 2148
Goldenrod, FL 32733
Facsimile No.: (407) 657-1132
Joseph Raymond, Sr.
c/o RVR Consulting Group, Inc.
P.O. Box 2148
Goldenrod, FL 32733
Facsimile No.: (407) 657-1132
or to such other addresses as shall be furnished by like notice by such
party. Any such notice or communication given by mail shall be effective
upon receipt thereof.
8. Arbitration. Any dispute arising out of or relating to this
Agreement, which cannot be settlement amicably without undue delay by the
parties hereto, shall be resolved by binding arbitration of one arbitrator
selected by the parties hereto under the rules of arbitration of the
American Arbitration Association. The award rendered by the arbitrator
shall be final and binding upon both parties. Such arbitration shall be
conducted in New York City, or such other location as the parties may
agree. The costs of such arbitration shall be borne equally by the parties
unless the arbitrator otherwise determines. All parties hereby submit to
the jurisdiction of the State of New York in connection with the foregoing.
9. Further Assurances. Seller agrees that, at any time after
the date hereof, upon the request of the Purchaser, it will do, execute,
acknowledge and deliver, or will cause to be done, executed, acknowledged
and delivered, all such further acknowledgments, deeds, assignments, bills
of sale, transfers, conveyances, instruments, consents and assurances as
may reasonably be required for the better assuring and confirming to the
Purchaser, its successors and assigns, absolute ownership to the Shares to
be sold to the Purchaser hereunder.
10. Modification. This Agreement and the Schedules annexed
hereto contain the entire agreement between the parties hereto and there
are no agreements, warranties or representations which are not set forth
herein. All prior negotiations, representations, warranties, agreements
and understandings are superseded hereby. This Agreement may not be
modified or amended except by an instrument in writing duly signed by or on
behalf of the parties hereto and dated on or subsequent to the date hereof.
11. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within the
State.
12. Binding Effect; Assignment. This Agreement shall be binding
upon the parties and inure to the benefits of the successors and assigns of
the respective parties hereto.
13. Counterparts. This Agreement may be executed simultaneously
in any number of counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same instrument.
14. Paragraph Headings. The paragraph headings in this
Agreement are for convenience of reference only and shall not be deemed to
alter or affect any provision hereof.
15. Transaction Expenses. Notwithstanding anything else in this
Agreement to the contrary, the parties hereto shall each be responsible for
the payment of (and shall indemnify and hold the other parties hereto
harmless against) any and all of its or his own expenses, including,
without limitation, the fees and expenses of counsel, accountants and other
advisers, arising out of or relating directly or indirectly to the
transactions contemplated by this Agreement, whether or not such
transactions are consummated in whole or in part.
16. Severability. If any provision of this Agreement is
invalid, illegal, or unenforceable, the balance of this Agreement shall
remain in effect, and if any provision is inapplicable to any person or
circumstance, it shall nevertheless remain applicable to all other persons
and circumstances.
17. Waiver. The waiver of one breach or default hereunder shall
not constitute the waiver of any other or subsequent breach or default.
18. No Agency. This Agreement shall not constitute any party
the legal representative or agent of the other, nor shall any party have
the right or authority to assume, create, or incur any liability or any
obligation of any kind, express or implied, against or in the name of or on
behalf of the other party.
IN WITNESS WHEREOF, the parties hereto duly executed this
Agreement the day and date first above written.
IMPRIMIS INVESTORS LLC
By: /s/ Arthur Amron
_______________________________
Title: Vice President
WEXFORD SPECTRUM INVESTORS LLC
By: /s/ Arthur Amron
________________________________
Title: Vice President
____________________________
RVR CONSULTING GROUP, INC.
By: /s/ Joseph Raymond, Jr.
_______________________________
Title: ____________________________
As to Section 2(b) and Sections 7 through 18 inclusive, only:
/s/ Joseph Raymond, Jr.
_____________________________
Joseph Raymond, Jr.
______________________________
Sergio Vallejo
/s/ Joseph Raymond, Sr.
_______________________________
Joseph Raymond, Sr.
IRREVOCABLE PROXY
The undersigned, Imprimis Investors LLC, hereby irrevocable
appoints RVR Consulting Group, Inc., or its nominee ("RVR"), with full
power of substitution as proxy for the undersigned, and hereby authorizes
RVR to vote all shares of Common Stock of COMPLETE WELLNESS CENTERS, INC.
(the "Company") acquired by Seller upon conversion of the Preferred Stock
and registered in the name of the undersigned, at any meeting of the
stockholders of the Company, and to execute a consent with respect to such
shares, as to any and all matters upon which action is to be taken or
consent to be given by the stockholders of the Company, in such manner as
RVR may from time to time determine. This Irrevocable Proxy shall be
deemed to be coupled with an interest in favor of RVR and as such, shall be
irrevocable and shall survive the death, bankruptcy or incompetency of the
undersigned.
The irrevocable proxy is executed by the undersigned pursuant to
the terms of that certain Stock Purchase Agreement dated as of February 26,
1999 by and among the undersigned, RVR and Wexford Spectrum Investors LLC
(the "Agreement"). Capitalized terms utilized herein and not defined
herein shall have the respective meanings accorded to them in the
Agreement.
Notwithstanding anything to the contrary contained herein, this
proxy shall terminate on the earlier to occur of (i) the transfer by the
undersigned, in accordance with the terms of the Agreement, of any shares
of Common Stock of the Company acquired by Seller upon conversion of the
Preferred Stock (but only with respect to such transferred shares of Common
Stock); (ii) the fifth anniversary of the date hereof; or (iii) the date
upon which the closing price for the Company's common stock has equaled or
exceeded Ten ($10.00) Dollars for twenty (20) consecutive trading days.
The validity of this proxy and the rights, obligations and
relations of the parties hereunder shall be construed and determined under
and in accordance with the laws of the State of New York without giving
effect to the conflict of laws rules of such State. ANY CLAIM OR
CONTROVERSY PERTAINING TO OR ARISING UNDER THIS PROXY OR THE RELATIONSHIP
BETWEEN THE PARTIES SHALL BE SETTLED BY A SINGLE ARBITRATOR BEFORE THE
AMERICAN ARBITRATION ASSOCIATION IN NEW YORK, NEW YORK, THE COSTS OF WHICH
SHALL BE BORNE EQUALLY BY THE PARTIES UNLESS THE ARBITRATOR OTHERWISE
DETERMINES. ALL PARTIES HEREBY SUBMIT TO THE JURISDICTION OF THE STATE OF
NEW YORK IN CONNECTION WITH THE FOREGOING.
Date: February 26, 1999
IMPRIMIS INVESTORS LLC
By: /s/ Arthur Amron
__________________________________
Title: Vice President
IRREVOCABLE PROXY
The undersigned, Wexford Spectrum Investors LLC, hereby
irrevocably appoints RVR Consulting Group, Inc., or its nominee ("RVR"),
with full power of substitution as proxy for the undersigned, and hereby
authorizes RVR to vote all shares of Common Stock of COMPLETE WELLNESS
CENTERS, INC. (the "Company") acquired by Seller upon conversion of the
Preferred Stock and registered in the name of the undersigned, at any
meeting of the stockholders of the Company, and to execute a consent with
respect to such shares, as to any and all matters upon which action is to
be taken or consent to be given by the stockholders of the Company, in such
manner as RVR may from time to time determine. This Irrevocable Proxy
shall be deemed to be coupled with an interest in favor of RVR and as such,
shall be irrevocable and shall survive the death, bankruptcy or
incompetency of the undersigned.
This irrevocable proxy is executed by the undersigned pursuant to
the terms of that certain Stock Purchaser Agreement dated as of February
26, 1999 by and among the undersigned, RVR and Imprimis Investors LLC (the
"Agreement"). Capitalized terms utilized herein and not defined herein
shall have the respective meanings accorded to them in the Agreement.
Notwithstanding anything to the contrary contained herein, this
proxy shall terminate on the earlier to occur of: (i) the transfer by the
undersigned, in accordance with the terms of the Agreement, of any shares
of Common Stock of the Company acquired by Seller upon conversion of the
Preferred Stock (but only with respect to such transferred shares of Common
Stock); (ii) the fifth anniversary of the date hereof; or (iii) the date
upon which the closing price for the Company's common stock has equaled or
exceeded Ten ($10.00) Dollars for twenty (20) consecutive trading days.
The validity of this proxy and the rights, obligations and
relations of the parties hereunder shall be construed and determined under
and in accordance with the laws of the State of New York without giving
effect to the conflict of laws rules of such State. ANY CLAIM OR
CONTROVERSY PERTAINING TO OR ARISING UNDER THIS PROXY OR THE RELATIONSHIP
BETWEEN THE PARTIES SHALL BE SETTLED BY A SINGLE ARBITRATOR BEFORE THE
AMERICAN ARBITRATION ASSOCIATION IN NEW YORK, NEW YORK, THE COSTS OF WHICH
SHALL BE BORNE EQUALLY BY THE PARTIES UNLESS THE ARBITRATOR OTHERWISE
DETERMINES. ALL PARTIES HEREBY SUBMIT TO THE JURISDICTION OF THE STATE OF
NEW YORK IN CONNECTION WITH THE FOREGOING.
Dated: February 26, 1999
WEXFORD SPECTRUM INVESTORS, INC.
By: /s/ Arthur Amron
___________________________________
Title: Vice President
