EXHIBIT V
SUPPLEMENT TO INVESTMENT AGREEMENT
SUPPLEMENT TO INVESTMENT AGREEMENT, dated as of January
12, 1998, by and among Complete Wellness Centers, Inc., a Delaware
corporation (the "Company"), Imprimis Investors LLC ("Imprimis") and
Wexford Spectrum Investors LLC ("Wexford" and, together with Imprimis,
the "Investors").
Reference is made to the Investment Agreement, dated as of
December 19, 1997 (the "Investment Agreement"), by and among the Company
and the Investors. Capitalized terms used in this Supplement to
Investment Agreement without definition shall have the meanings ascribed
to them in the Investment Agreement.
In order to implement the provisions of Section II.D of
the Investment Agreement, the Company and the Investors hereby agree as
follows:
1. The Preferred Stock shall be issued pursuant to a
Certificate of Designations, Preferences and Rights in the form of
Exhibit A hereto as filed with the Secretary of State of the State of
Delaware on the date hereof. Two stock certificates representing all of
the Preferred Stock initially outstanding shall be issued by the Company
at the Closing (as defined below) as follows: (a) to Imprimis, 80,000
shares; and (b) to Wexford, 20,000 shares.
2. The Warrants shall be issued in the form of Exhibit B
hereto. Two Warrants representing all of the Warrants shall be issued by
the Company at the Closing as follows: (a) to Imprimis, initially
exercisable for 2,280,000 shares of Common Stock; and (b) to Wexford,
initially exercisable for 570,000 shares of Common Stock.
3. The registration rights contemplated by Section
II(D)(5) of the Investment Agreement shall be provided for in the
Registration Rights Agreement in the form of Exhibit C hereto and dated
as of the date hereof.
4. Matters relating to the issuance and sale of the
Preferred Stock and the Warrants and the execution and delivery by the
Company of this Supplement to the Investment Agreement and the
Registration Rights Agreement shall be addressed in an opinion from
Xxxxxxx Xxxxxx & Green, P.C., special counsel to the Company, in the form
of Exhibit D hereto and dated as of the date hereof.
5. The net proceeds from the issuance and sale of the
Preferred Stock and the Warrants shall be used by the Company first to
repay in full the principal of and accrued interest on the Notes through
the date hereof, the Investors' transaction fees of $125,000 payable in
connection with the Notes, the Preferred Stock and the Warrants and any
portion of the Investors' $75,000 expense reimbursement allowance not
otherwise paid to the Investors, such payment to be made by means of a
deduction from the $4,000,000 otherwise payable on January 27, 1998
(after giving effect to such deductions, the "Deferred Payment"). The
remaining net proceeds from the issuance and sale of the Preferred Stock
and the Warrants, including the balance of the Deferred Payment, shall be
used by the Company for the general corporate purposes.
6. The closing of the issuance and sale of the Preferred
Stock and the Warrants (the "Closing") shall take place at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, as soon as practicable after
execution of this Supplement to Investment Agreement, subject to (a) the
execution and delivery by the Company to the Investors of the documents
referenced in Sections 1, 2 and 3 above, (b) the delivery to the
Investors of the opinion referenced in Section 4 above, (c) the payment
by the Investors by wire transfer to the Company of $500,000, (d) the use
by the Company of the net proceeds thereof as referenced in the first
sentence of Section 5 above and (e) confirmation by the Company, which it
hereby makes, that the Company's representations and warranties contained
in the Investment Agreement remain true and complete in all material
respects as of the date hereof and that Exhibit C to the Warrant
Agreement sets forth complete and accurate information as to all
warrants, options or other securities or other instruments exercisable
for or convertible into shares of Common Stock and the effect, if any, of
the issuance and sale of the Warrants and the underlying Common Stock on
any antidilition provisions of such securities or other instruments.
Assuming that the Closing occurs, the Investors agree to pay to the
Company by wire transfer on January 27, 1998 the Deferred Paymenmt in
payment of the balance of the purchase price for the Preferred Stock and
the Warrants.
7. From and after the Closing and for so long as any
Preferred Stock or Warrants remain outstanding, (a) the "Affirmative
Covenants" provided for in Sections VII(A) through VII(H) of the
Investment Agreement and the "Negative Covenants" provided for in
Sections VIII(A), VIII(C), VIII(E), VIII(F), VIII(H), VIII(I) and VIII(J)
shall remain in full force and effect, with all other "Affirmative
Covenants" and "Negative Covenants" contained in the Investment Agreement
to be terminated, (b) the Investors shall have the right to approve the
Company's proposed annual budget, which shall be provided to the
Investors no later than 30 days before the beginning of the fiscal year
for which the budget shall be in effect, and the Investors shall have the
right to approve any action or expenditure which, alone or in the
aggregate, would result in a deviation of more than five percent from the
annual budget previously approved by the Investors, and (c) the Company
shall have in full force and effect a "key man" insurance policy in the
face amount of not less than $5 million, naming C. Xxxxxx XxXxxxxx as the
insured and the Company as the sole beneficiary.
8. Except as modified pursuant to this Supplement to
Investment Agreement, all terms and provision of the Investment Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first written above.
COMPLETE WELLNESS CENTERS, INC.
BY /s/ C. Xxxxxx XxXxxxxx
Name:
Title:
IMPRIMIS INVESTORS LLC
BY /s/ Xxxxx Xxxxxxxx
Name:
Title:
WEXFORD SPECTRUM
INVESTORS LLC
BY /s/ Xxxxx Xxxxxxxx
Name:
Title:
