<PAGE>   1
               -------------------------------------------------

                                SUBSCRIPTION AND

                            SHAREHOLDERS' AGREEMENT

                                       OF

                   COMPLETE WELLNESS SMOKING CESSATION, INC.

               -------------------------------------------------


June 29, 1997
<PAGE>   2
                    SUBSCRIPTION AND SHAREHOLDERS' AGREEMENT

                 SUBSCRIPTION AND SHAREHOLDERS' AGREEMENT made as of August 1, 
1997, by and among Robert J. Mrazek the "Manager"), Complete Wellness
Centers, Inc., a Delaware corporation ("CWC"), and Complete Wellness Smoking
Cessation, Inc., a Delaware corporation (the "Company"), having its principal
place of business at 725 Independence Avenue, SE, Washington DC 20003.  The
Manager and CWC are herein sometimes collectively referred to as the
"Shareholders."

                                   WITNESSETH

                 WHEREAS, the Shareholders have caused the Company to be
organized under the laws of the State of Delaware and wish to set forth their
understanding concerning, among other things, the capitalization, organization,
operation and management of the Company and the rights and obligations of the
Shareholders among themselves.

                 NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth the parties hereto hereby agree
as follows:

                                  ARTICLE I

                                CAPITALIZATION

                 1.1      Initial Capitalization.  The Shareholders hereby
subscribe for, and on or before July 31, 1997 shall purchase, the number of
shares of common stock, par value $.01 per share, of the Company set forth
opposite their respective names, at the price of one cent ($0.01) per share:



                                      1
<PAGE>   3
<TABLE>
<CAPTION>
         Shareholder                              Shares                          Percentage
         -----------                              ------                          ----------
         <S>                                       <C>                               <C>
         Robert J. Mrazek                          1,000                              11.77%

         CWC                                       7,500                              88.23%
                                                   -----                              ------
         TOTAL                                     8,500                             100.00%
                                                   =====                             =======
</TABLE>

All amounts paid for shares in excess of the par value thereof, and all
additional capital contributions, shall be allocated to the surplus of the
Company.

                 1.2      Additional Capital Contributions by the Managers.  On
or before July 31, 1997 the Manager shall contribute to the Company $12,000 and
on or before September 30, 1997 the Manager additionally shall contribute to
the Company $5,000 as an additional capital contribution.  Such contributions
shall be in the form of promissory notes bearing interest only at 8% per annum.
The principal shall be payable on July 31, 2000 and September 30, 1997
respectively.

                 1.3      Additional Capital Contributions by CWC.


(a)      On or before July 31, 1997, CWC shall contribute to the Company in
cash $108,000.

(b)      On or before September 30, 1997, CWC shall make a further capital
contribution in cash to the Company of $45,000.


                 1.4       Anticipated Future Issuances.  Upon the full payment
of all of the capital by the Manager and CWC as provided above, 1,000 shares of
the outstanding Common Stock of the





                                       2
<PAGE>   4

Company shall be owned by the Manager, representing 11.77% of the outstanding
shares, and 7,500 shares by CWC, representing 88.23% of the outstanding shares.
Under the terms of the Employment Agreement, the Manager will be granted up to
an additional 2,000 shares, subject to certain time vesting, which upon
issuance will result in the Manager as having 25% of the outstanding shares of
Common Stock and CWC having 75% of the outstanding shares of Common Stock.  All
shares of Common Stock of the Company to be issued pursuant to this Agreement
will be non-public "restricted securities" sold pursuant to an exemption from
the registration requirements of the Securities Act of 1933, as amended (the
"Securities Act") provided by Section 4(2) thereof and SEC Regulation D
promulgated thereunder, and by applicable exemptions under any applicable state
securities laws and regulations.

                 1.5      Capital Calls.  By a vote of four (4) members of the
Board of Directors, the Company may seek additional equity financing
(hereinafter, a "Capital Call"). In the event of a Capital Call, the Company
shall notify the parties hereto, and CWC and the Manager shall preemptively
have the right to participate and provide such capital (proportionate to their
respective interests) within thirty (30) days of receiving notice of such
Capital Call.  In the event any party fails to provide his or its proportionate
share of such Capital Call, the other parties may provide such capital
proportionate to their respective interests.  For purposes of this Section 1.5
only, a party's "interest" shall be the proportion of such party's issued and
outstanding shares, plus all shares issuable under vested and exercisable
options to purchase Company shares to the number of all issued and outstanding
shares plus all shares issuable under vested and exercisable options to
purchase Company shares.  Non-contributing parties shall suffer no penalty for
failure to contribute other than dilution of their respective interests in the
Corporation.  In the event the parties hereto fail to provide such Capital Call
within forty five (45) days, then the Company may seek outside





                                       3
<PAGE>   5
financing with proportionate dilution to all of the parties which shall be
subject to Board of Directors' approval..

                 1.6      Delivery of Shares.  Upon the full execution of this
Agreement and the making of the capital contributions described above, the
Company will promptly deliver to each Shareholder a duly executed share
certificate registered in the name of such Shareholder representing the number
of Shares set forth opposite such Shareholder's name.

                 1.7      Adequacy of Consideration for Shares.  The
Shareholders and the Company acknowledge, agree and waive any claim to the
contrary that the consideration to be paid for the Shares by each of the
Shareholders as provided herein is legally adequate consideration for the
Shares under applicable Delaware law.



                                   ARTICLE II


                          ORGANIZATION AND MANAGEMENT


                 2.1      Directors.

         (a)     The Company shall be governed by a Board of Directors
("Board") composed of five (5) persons, who need not be stockholders.  CWC
shall be entitled to designate and elect two (2) members of the Board of
Directors of the Company and the Manager shall be entitled to designate and
elect one (1) director, but in no event less than twenty percent (20%) of the
entire membership of the Board.  Robert J. Mrazek as the Manager shall serve as
a member of the Board.  The





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<PAGE>   6
remaining two members of the five member Board shall be selected by mutual
consent of (i) CWC, and (ii) the Manager.

                 2.1      Officers.  The Shareholders agree in their capacity
as directors of the Company that the officers of the Company shall be as
follows:

<TABLE>
                 <S>                                        <C>
                 Chairman and CEO                           Robert J. Mrazek
                 Treasurer                                  Michael Brigante
                 Secretary                                  Ryan Knoll
</TABLE>


                 2.2      Amendment of Certificate of Incorporation and
By-Laws.  The Certificate of Incorporation and By-Laws of the Company shall be
amended as and if necessary to conform to the requirements of, and to carry
into effect the provisions of, this Agreement.

                 2.4      Directors' Quorum and Required Vote. (a) The presence
or participation by conference telephone call of four Directors shall be
necessary to constitute a quorum for the transaction of business by the Board,
and except as otherwise provided herein, the affirmative action of three
Directors shall be necessary for the transaction of any business.

         (b)     For the Company to issue additional equity securities or
increase the number of shares reserved in the Company's Stock Option Plan, or
to recommend to the shareholders of the Company a sale of all or substantially
all of the assets of the Company or all or substantially all of





                                       5
<PAGE>   7
the shares of Common Stock, the affirmative vote of four (4) members of the
Board shall be required.

                 2.5      Shareholders' Quorum.  The presence in person or by
proxy of the holders of a majority of the Shares of voting stock of the Company
shall be necessary to constitute a quorum for the transaction of any business
and except as otherwise provided herein or by statute, the affirmative action
of the holders of 51% of the shares of voting stock of the Company shall be
necessary for the transaction of any business.

                 2.6      Voting Agreement.  Each Shareholder hereby
irrevocably agrees to cast his or its votes as a shareholder to elect the
Directors and to effect the agreements set forth in this Article.


                                 ARTICLE III
                                      
                                  OPERATIONS


                 3.1      Fiscal Year.  The fiscal year of the Company shall
commence on the 1st day of January in each year and end on the 31st day of
December in each year.  Within 120 days after the end of each fiscal year the
Board of Directors shall present to the stockholders at a meeting which shall
be held within such 120 day period as shall be fixed annually by the Board a
report of the activities of the Company, a balance sheet and profit and loss
statement and summary of such activities which shall be submitted to the
stockholders not less than thirty (30) days in advance of such meeting.





                                       6
<PAGE>   8
                 3.2      Qualification to do Business.  The officers of the
Company are hereby authorized to qualify the Company to do business in such
states as they deem appropriate after consultation with counsel.

                 3.3      Business Plan.  The Shareholders hereby agree to
pursue the business of the Company substantially as set forth in the business
plan dated August 1, 1997 (the "Business Plan").




                                   ARTICLE IV


                            RESTRICTIONS ON TRANSFER

                 4.1      Certain Restrictions on Transfer.  No transfer in
whole or in part of any Shares by a Shareholder shall be made whether by sale,
pledge, assignment, mortgage, gift, will, the laws of descent and distribution
or by operation of law, and no transfer of any Shares shall be made on the
books of the Company and no unregistered transfer of any equity interest shall
be made or be effective except as provided herein.

                 4.2      Securities Act Restrictions; Legend. (a) The Shares
to be issued by the Company to the Shareholders have not been registered under
the Securities Act of 1933, as amended (the "Act") and are being sold and
issued in reliance upon exemption from registration provided by Section 4(2) of
the Act and applicable exemptions provided under relevant state securities laws
and regulations.  The Company is under no obligation to register such
securities





                                       7
<PAGE>   9
under the Act.  In view of the foregoing (and assuming that the Shares are not
subsequently registered under the Act), the Shareholders will have to bear the
economic risk of their investment for an indefinite period of time, unless such
Shares are sold or otherwise transferred in a transaction permitted by this
Agreement in connection with which an exemption from such registration under
the Act is available.


         (b)     Each certificate evidencing the Shares shall bear the
following legend:

                          "The Shares represented by this Certificate have not
                 been registered under the Securities Act of 1933 or any
                 applicable state securities laws and may not be offered, sold,
                 pledged, transferred or otherwise disposed of except pursuant
                 to an effective registration statement under such Act and
                 compliance with any such applicable state securities laws,
                 unless an the issuer is provided with an opinion of counsel,
                 satisfactory to the issuer, that such disposition may be made
                 without such registration."

                 4.3      Additional Legend.  Each Shareholder hereby agrees
with and for the benefit of the other Shareholders that all certificates
representing Shares of the Company will bear also on the face thereof the
following legend, which refers to the special arrangements concerning, among
other things, the election of Directors of the Company, the restriction on
transfer of shares of the company and special requirements concerning the
dissolution of the Company, all pursuant to this Agreement, as follows:





                                       8
<PAGE>   10
                 "The Shares evidenced by this certificate are subject to the
                 restrictions and options stated in, and are transferable only
                 upon compliance with the provisions of, the Shareholders
                 Agreement dated as of August 1, 1997, by and among Complete
                 Wellness Smoking Cessation, Inc. (the "Company") and certain
                 shareholders thereof, a copy of which is on file at the office
                 of the Company, the provisions of which Agreement are
                 incorporated herein by reference, as the same may be at any
                 time amended.  The Agreement also contains special provisions
                 concerning, among other things, the manner of electing
                 directors of the Company, special requirements concerning the
                 sale of the Company, and the quorum and voting requirements
                 for action by the Shareholders and Directors."

                 4.4      Transfers on Termination of Employment, Death or by
Operation of Law.

         (a)     In the Event of Employment Termination or Desire to Withdraw.
In the event of the resignation or removal for cause of a Shareholder as an
employee of the Company, or in the event a Shareholder desires to sell his
Shares (a "Selling Shareholder"), any Shares owned by such Shareholder shall be
deemed offered to the Company for sale to the Company at a price equal to the
Market Price, as defined below, determined at the time of said offer, as
hereinafter provided, provided however, that said price shall in no event be
less than Book Value per share unless otherwise provided herein.





                                       9
<PAGE>   11
         In the event that a person who is designated above as an officer of
the Company leaves the employment of the Company (herein a "Withdrawing
Shareholder") prior to four years from the date hereof, the Company shall have
the option, but not the obligation, to purchase the Withdrawing Shareholder's
Shares for the following prices, which shall be conclusively deemed the legally
binding purchase price that may be paid by the Company: (i) if the Withdrawing
Shareholder leaves the employment of the Company on or within one year from the
date hereof, the Company shall pay Book Value, as hereafter defined, of the
Shares owned by him, (ii) if the Withdrawing Shareholder leaves the employment
of the Company on or within two years from the date hereof, the Company shall
pay 33% of the Market Price of the Shares owned by him, (iii) if the
Withdrawing Shareholder leaves the employment of the Company on or within three
years from the date hereof, the Company shall pay 66% of the Market Price of
the Shares owned by him, and (iv) if the Withdrawing Shareholder leaves the
employment of the Company after three years from the date hereof, the Company
shall pay 100% of the Market Price of the Shares owned by him.

                 The Selling Shareholder shall immediately give to all of the
Shareholders and to the Company written notice, by registered or certified
mail, of such attempted or impending disposition or transfer.  Such notice
(hereinafter sometimes referred to as the "Selling Notice") shall set a date
for the holding of a special meeting of the Shareholders and Directors of the
Company, which date shall be not less than twenty (20) days nor more than
thirty (30) days from the mailing of the Selling Notice.  The parties hereto
agree to waive any and all notices otherwise required for such special meeting
and do hereby consent to the holding of such special meeting.  In the case of a
Withdrawing Shareholder, the notice of his termination of his employment with
the Company by the Withdrawing Shareholder or the notice of termination by the
Company of his employment for cause, shall be deemed a Selling Notice and an
offer to sell his Shares as provided herein





                                       10
<PAGE>   12
             The Company may, within 20 days after receipt of such offer,
purchase all or any part of the shares by personally delivering or mailing by
registered mail, postage prepaid, its acceptance to that effect to the person
or party making the offer, provided, however, that in the event of the death of
a Shareholder, the Company shall, within 20 days after receipt of such offer,
accept such offer, specifying a closing date in accordance with the next
sentence of this Section 5.4, and confirm the Company's commitment to purchase
at such settlement date all of the Shares owned by him at a price equal to the
greater of (a) the Book Value thereof determined at the time of said offer, as
hereinafter provided, or (b) an amount equal to the Market Price.  If the
Company shall accept such offer in whole or in part, it shall specify a closing
date not more than 30 days after the date of such acceptance for delivery to
it, against payment, of the certificate representing the Shares so purchased.
Such certificate or certificates shall be delivered duly endorsed for transfer
with signature guaranteed by a bank or securities brokerage firm and with all
required tax stamps affixed or with funds for payment for such tax stamps.  If
the Company shall not purchase all of the Shares so offered, the Company shall
on behalf of the registered owner thereof promptly notify its Shareholders
(other than the Selling Shareholder), in writing by registered mail, postage
prepaid, or by personal delivery, that such Shares or the balance of such
Shares, not purchased by the Company, are available for purchase by such
Shareholders at the price specified above.

             The Shareholders may elect to purchase all or any part of such
Shares by a written acceptance to that effect received by the Company within 20
days after the date of mailing or delivery of such notification.  If there
shall be more than one other Shareholder, and the Shareholders elect to
purchase in the aggregate more of the Shares than are available, the available
Shares shall be divided among the accepting Shareholders in proportion to their
registered ownership of the Shares of the Company at the time the Shares are
offered to the Company.  The President of the Company shall set the closing
date for the completion of the purchase of such





                                       11
<PAGE>   13
Shares and shall notify all interested persons of the Closing date by such
means as he shall determine sufficient.  In no event shall the President of the
Company designate a closing date which is more than 90 days after the date on
which the Company first received the offer in respect of the Shares.  Promptly
after such closing, or if no shareholder elects to purchase such Shares, the
President of the Company shall determine whether all of the foregoing
provisions hereof have been complied with, and if they have, shall notify the
registered owner of the shares of such determination.

                 For a period of three months beginning on the first full
business day following the date of the notification of such determination, such
Shares as have not been purchased by the Company or the Shareholders of the
Company (other than the Selling Shareholder) may be sold or otherwise
transferred by the owner thereof to any person, whether or not a Shareholder.
If the Shareholder of the Company owning such shares is unable to sell or
otherwise transfer such shares within such period of three months such
Shareholder shall have the right to notify the Company, within ten days of the
expiration of such three month period, of such Shareholder's election to
require the dissolution of the Company.  In the event of any such election the
Company and all the Shareholders shall promptly take all necessary action to
effect the dissolution of the Company and the liquidation and distribution of
the Company's assets.  In the event any Shares have not been transferred to
such person on the books of the Company within 90 days following the date of
the notification of such determination referred to above or in the event the
Shareholder of the Company holding such shares has not notified the Company of
its election to require the dissolution of the Company, such shares shall again
be subject to all the restrictions imposed by this Agreement.

         (b)     Purchase Upon Death.





                                       12
<PAGE>   14
         (i)     Upon the occurrence of the death of any Shareholder, all of
the stock of the Company owned by such deceased Shareholder (hereinafter
referred to as the "Selling Shareholder") shall be sold to the Company by the
Selling Shareholder's personal representative, and the Company shall purchase
the same at the price and upon the terms of the payment hereinafter set forth.
The closing of such sale shall take place at the main business office of the
Company within ninety (90) days after the occurrence of the date or event
giving rise to the purchase obligation hereunder, or if the Company and the
Selling Shareholder's personal representative cannot agree on a date within
said period, the closing shall take place ninety (90) days after the occurrence
of the date or event giving rise to the purchase obligation hereunder or ninety
days (90) days after the appointment of the personal representative of the
estate of any such deceased Shareholder, whichever date will be the later to
occur.  Upon the sale of Shares pursuant to the terms of this subparagraph, the
Selling Shareholder's personal representative shall transfer and warrant good
and sufficient title to the Shares to the Company.

         (ii)    In the event the Company is prohibited by law from purchasing
all of the Shares of the Selling Shareholder or if the Company and the
remaining Shareholders determine to permit the Shareholders the first option
to purchase such shares, the other or surviving Shareholders shall purchase all
of the stock of the Selling Shareholder at the price and upon the terms
hereinafter set forth.  Each of the other or surviving Shareholders shall
complete this purchase by sending written notice of such purchase to the
Selling Shareholder's personal representative within thirty (30) days after it
is determined that the Company is prevented by law (or has ceded its rights to
the surviving Shareholders) from purchasing all of the stock of the Selling
Shareholder.  Unless they shall agree otherwise, the purchasing Shareholders
shall have the obligation to purchase such portion of the said Shares as the
number of shares of stock owned by said other Shareholders bears to the total
number of issued and outstanding Shares of stock of the Company (exclusive of
the Shares of stock





                                       13
<PAGE>   15
to be sold).  The closing of each such sale shall take place at the main
business office of the Company within sixty (60) days after the sending of such
notice of purchase, or if such purchasing Shareholder and Selling Shareholder's
personal representative cannot agree on a date within that period, then the
closing of each such sale shall take place sixty (60) days after the sending
such notice of purchase.

         (iii)   The retirement or purchase price of the stock purchased under
this Section 5.4 shall be at the Market Price of said Shares owned by him, as
defined herein, immediately preceding the date of the event giving rise to the
obligations to purchase expressed in this Section 5.4 and shall be paid as
follows: The Company or the Shareholder, whosoever shall be the purchasing
party in accordance with the terms hereof, shall on the date of closing pay
over to the Selling Shareholder's personal representative a sum in cash equal
to required purchase price.

                 4.5      Market Price.  The term Market Price for the entire
Company shall mean an amount equal to the earnings of the Company, before
interest and taxes for the preceding fiscal year as determined in accordance
with generally accepted accounting principles, including any overhead expenses
imposed on the Company by CWC in its capacity as parent in an amount equal to
five percent (5%) of the Company's net revenues ("EBIT") as set forth in the
financial statement of the Company issued on behalf of the Company by its
independent certified public accountants, multiplied by the number five (5).
If the Market Price is being calculated more than six months after the end of a
fiscal year end, then the Company shall ask its independent accountants to
determine the EBIT based on the immediately preceding six months, annualized as
if it were for a twelve month prior period applying normal assumptions and
applying generally accepted accounting principles In determining the Market
Price payable to an individual Shareholder, the Company's Market Price shall be
multiplied by a fraction having as its numerator the number of





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Shares owned by the Selling Shareholder and as its denominator, the total
number of Shares outstanding.  By way of example only, if the Company's EBIT
were $1 million, the Company's Market Price would be $5 million, and if a
Selling Shareholder owned 250 Shares out of 1,000 outstanding shares, the
Market Price payable to him would be 25% of $5 million, which is $1,250,000.

         Under no event shall the Market Price be less than Book Value as
defined below.

                 4.6      Book Value.  The Book Value of the shares shall be
determined in accordance with the last financial statement of the Company
issued on behalf of the Company by its independent certified public
accountants, whether or not said financial statements have been certified by
such certified public accountants, provided however, that in the event said
financial statement shall have been issued more than three months prior to the
date on which such shares are first offered, or in the event such financial
statement has not been certified by such independent certified public
accountants, the Selling Shareholder or the Company shall have the right to
have such book value determined as of the date of such offer by the Company's
independent certified public accountants, the cost of such determination to be
paid by the party requesting the same.

                 4.7      Life Insurance.  The Company shall exercise its best
efforts to purchase and maintain life insurance on the life of the Manager to 
fund the buyout provided for herein in the event of the death of the Manager, 
which shall be in the amount of $1 million.  The policy proceeds, if any, 
received by the Company with respect to the deceased Manager's death shall
be payable by the Company in accordance with Section 5.4 above by the Company
on account of the purchase price of the Shares purchased pursuant to such
section.  The Manager shall exercise his best efforts in cooperating with the
Company in obtaining such life insurance.





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<PAGE>   17
                                   ARTICLE V

                              PUT AND CALL OPTIONS

                 5.1      Put Option.  Commencing on July 31, 2000, and for a
period ending on September 30, 2000, the Manager shall have the option ("Put
Option") exercisable upon written notice to CWC to sell to CWC any or all of
his equity in the Company, including all of his Shares and vested stock
options.

                 5.2      Call Option.  Commencing on July 31, 2000, and for a
period ending on September 30, 2000, CWC shall have a call option ("Call
Option") exercisable upon written notice to Manager to purchase from the
Manager any or all of the Manager's equity in the Company, including all of
their Shares and vested stock options.

                 5.3      Option Price.  The price to be paid for a Manager's
equity pursuant to the foregoing Put and Call Options ("Option Price") shall be
an amount equal to (A) five (5) times the earnings before interest and taxes
("EBIT") of the Company, excluding any corporate overhead expenses imposed on
the Company by CWC in its capacity as parent and the Company as subsidiary
except those mutually agreed upon, as determined by generally accepted
accounting principles for the fiscal year which ends December 1999 multiplied
by (B) the number of shares of Common Stock held by such Manager plus the
number of shares issuable the Manager under vested and exercisable options to
purchase Company shares divided by (C) the total number of shares of Common
Stock of the Company then issued and outstanding plus the total number of
shares issuable under all then vested and exercisable options to purchase
Company shares.  Not





                                       16
<PAGE>   18
withstanding the foregoing, in the event that common stock of the Company is
registered in an initial public offering ("IPO") filed with the Securities and
Exchange Commission and becomes publicly traded, then the Option Price to be
paid shall be equal to the price of the Shares and vested stock options owned
by the Manager valued at 75% of the average closing "bid" price of the
Company's publicly traded common stock for the thirty (30) calendar days
immediately preceding the last trading day before the exercise of the Option

                 5.4      Payment.  Payment of any Option Price shall be made
by CWC within ninety (90) days of the exercise of any Option (whether a Put or
a Call Option) and shall consist of the issuance of an amount of CWC's common
stock equal in value to the amount of the Option Price valued at the average
closing "bid" price of CWC's publicly traded common stock for the thirty (30)
calendar days preceding the last trading day before the exercise of the Option
(the "Option Payment").


                                   ARTICLE VI

                            EMPLOYMENT-COMPENSATION

                 6.1      Employment Agreements. (a) The Company shall enter
into a three year employment agreement with the Manager.  The Employment 
Agreement shall provide for base compensation of $75,000 per annum which shall
be reviewed by the Board of Directors semi-annually.

         (b)     In addition the Employment Agreement shall provide for the
Manager and other key executives of the Company to receive an annual
performance bonus ("Bonus") equal to ten percent





                                       17
<PAGE>   19
(10%) of the Company's annual pre-tax income determined in accordance with
generally accepted accounting principles ("GAAP"), including corporate overhead
expenses imposed on the Company by CWC in its capacity as parent which shall be
an amount equal to five percent of the Company's net revenues.  The maximum
aggregate annual Bonus payable to the Manager and key executives as a group
shall be $5 million.  The Bonus shall be allocated 70% to the Manager.

                 6.2      Stock Options Plan. (a) There shall be established
for the Company an employee stock option plan with 3,500 shares reserved for
issuance thereunder, of which 2,500 shares shall be granted pursuant to this
Section 6.2.

         (b)     On July 31, 1997, the Manager shall be granted options
("Options") to purchase 2,500 shares of the Company's Common Stock at an
exercise price of $0.01 per share.  The Options shall vest as follows: 50% on
July 31, 1998, 50% on July 31, 1999 and shall be exercisable for a period of
five (5) years from July 31, 1997.  However, in the event the Employment
Agreement is terminated for cause or the employee resigns from the employment
of the Company, the vested options shall be exercisable for a period of three
(3) months from the date of termination or resignation.

         (c)     The Options shall contain anti-dilution protection, such that
the Company may not issue additional Shares, other than as contemplated herein,
for less than fair market value consideration being paid for such Shares and
shall also be adjusted proportionately for stock dividends, stock splits,
corporate combinations, corporate subdivisions and other similar
recapitalizations.





                                       18
<PAGE>   20
                                  ARTICLE VII


                         REPRESENTATIONS AND WARRANTIES

                 7.1      Representations and Warranties of the Company.  The
Company hereby represents and warrants to the Shareholders as follows:

         (a)     This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.

         (b)     The Company possesses full right, corporate power and legal
authority to execute and deliver this Agreement and to perform each of the
agreements on its part to be performed hereunder.  The execution and delivery
of this Agreement and the consummation by the Company of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of the Company.

         (c)     The execution and delivery by the Company of this Agreement
and the performance of all of the transactions contemplated hereby do not and
shall not (with or without the giving of notice or the passage of time or both)
(A) violate or conflict with any law, rule, ruling, determination, ordinance or
regulation of any government or governmental department, commission, board,
bureau, agency or instrumentality (an "Authority") or the Certificate of
Incorporation, bylaws or other governing document of the Company, or (B)(1)
violate or conflict with any condition or provision of, (2) result in the
creation or imposition of any lien, charge, security interest, encumbrance or
claim, whether legal or equitable ("Encumbrance") upon any of the





                                       19
<PAGE>   21
property or assets of the Company pursuant to, (3) accelerate or create, or
permit the acceleration or creation of, any liability or obligation of the
Company under, or (4) cause a termination under or give rise to a right of
termination under, the terms of any contract, mortgage, lien, lease, agreement,
indenture, trust, instrument, order, judgment or decree to which the Company
is a party or which is binding upon the Company.

         (d)     No action or consent which has not already been taken, whether
corporate or otherwise, including action or consent by any Authority, is
necessary in connection with the execution and delivery by the Company, the
enforceability of this Agreement against the Company or the consummation by the
Company of the transactions contemplated hereby.

                 7.2      Representations and Warranties of CWC.  CWC hereby
represents and warrants to the other Shareholders and to the Company as
follows:

         (a)     This Agreement has been duly executed and delivered by CWC and
constitutes the legal, valid and binding obligation of CWC enforceable against
CWC in accordance with its terms.

         (b)     CWC possesses full right, corporate power and legal authority
to execute and deliver this Agreement and to perform each of the agreements on
its part to be performed hereunder.  The execution and delivery of this
Agreement and the consummation by CWC of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action on the
part of CWC.

         (c)     The execution and delivery by CWC of this Agreement and the
performance of all of the transactions contemplated hereby do not and shall not
(with or without the giving of notice or the passage of time or both) (A)
violate or conflict with any law, rule, ruling, determination,





                                       20
<PAGE>   22

ordinance or regulation of any government or governmental department,
commission, board, bureau, agency or instrumentality (an "Authority") or the
Certificate of Incorporation, bylaws or other governing document of CWC or (B)
(1) violate or conflict with any condition or provision of, (2) result in the
creation or imposition of any lien, charge, security interest, encumbrance or
claim, whether legal or equitable ("Encumbrance") upon any of the property or
assets of CWC pursuant to, (3) accelerate or create, or permit the
acceleration or creation of, any liability or obligation of CWC under, or (4)
cause a termination under or give rise to a right of termination under, the
terms of any contract, mortgage, lien, lease, agreement, indenture, trust,
instrument, order, judgment or decree to which the Company is a party or which
is binding upon CWC.

         (d)     No action or consent which has not already been taken, whether
corporate or otherwise, including action or consent by any Authority, is
necessary in connection with the execution or delivery of this Agreement by CWC
or enforceability against CWC or the consummation by CWC of the transactions
contemplated hereby.

         (e)     CWC is acquiring the Shares for its own account for investment
and not with a view to resale or distribution.


         7.3     Several Representations and Warranties of the Manager.  The
Manager, hereby represents and warrants to the other Shareholders and to the
Company as follows:

                 (a)      This Agreement has been duly executed and delivered
by the Manager and constitutes the legal, valid and binding obligation of the
Manager enforceable against such Manager in accordance with its terms.





                                       21
<PAGE>   23
                 (b)      The execution and delivery by the Manager of this
Agreement and the performance by the Manager of all of the transactions
contemplated hereby do not and shall not (with or without the giving of notice
or the passage of time or both) (A) violate or conflict with any law, rule,
ruling, determination, ordinance or regulation of any Authority applicable to
the Manager or (B) violate or conflict with any condition or provision of, or
result in the creation or imposition of any Encumbrance upon any of the
property or assets of the Manager pursuant to the terms of, any contract,
mortgage, lien, lease, agreement, indenture, trust, instrument, order, judgment
or decree to which the Manager is a party or which is binding upon the Manager.

                 (c)      No other action or consent, including action or
consent by any Authority, is necessary in connection with the execution and
delivery of this Agreement by the Manager, or the validity or enforceability of
this Agreement against the Manager or the consummation by him of the
transactions contemplated hereby.

                 (d)      The Manager is acquiring the Shares for his own
account for investment and not with a view to resale or distribution.

                 7.4      Representation and Warranty of the Manager.  The
Manager, to the best of their knowledge and belief, hereby represents and
warrant to CWC to the Company that the Business Plan attached hereto as Exhibit
B is reasonable in its conclusion and assumptions and is based on accurate and
valid information and fact.


                                  ARTICLE VIII





                                       22
<PAGE>   24
                                 MISCELLANEOUS

                 8.1      Term and Termination . This Agreement shall be
effective from the date hereof and shall terminate on July 30, 2037 or if
sooner, upon the first to occur of any of the following events:

         (i)     the cessation of the Company's businesses;
         (ii)    the dissolution of the Company;
         (iii)   the written agreement of all the parties who are then bound by
                 the terms hereof;
         (iv)    as to each Shareholder, when he or she has transferred all of
                 the Shares of the Company owned by him or her in accordance
                 with the terms of this Agreement; or
         (v)     the effective date of registration of any class of equity
                 security under the Securities Act through an initial public
                 offering of such equity securities (an "IPO"); provided
                 however that in the event of an IPO Articles VI and VII hereof
                 shall survive.




                 8.2      Survival.  Notwithstanding Section 9.1 above, all
obligations and undertakings of the parties hereto, which by their nature are
ongoing, shall survive any termination of this Agreement and shall continue
with full force and effect unless otherwise agreed to in writing by all of the
parties hereto.

                 8.3      Arbitration.  Any dispute involving the
interpretation or performance of this Agreement, shall be resolved by
arbitration in the State of Maryland in accordance with the rules





                                       23
<PAGE>   25

then obtaining of the American Arbitration Association, and judgment upon the
award may be entered in any court having jurisdiction thereof.

                 8.4      Governing Law.  The provisions of this Agreement
shall be construed and governed under the laws of the State of Delaware.

                 8.5      Binding Effect.  The provisions of this Agreement
shall inure to the benefit of and be binding upon the respective executors,
administrators, heirs, distributes, successors and assigns of the parties
hereto and shall apply to any Shares of the Common Stock which may hereafter be
acquired by the parties hereto.

                 8.6      Personal Contract.  This Agreement is a personal
contract intended for the benefit of the Company and the Shareholders among
themselves and is not intended to benefit any other person or party whatsoever
including, without limitation, any creditors of the Company or any liquidator
or trustee in bankruptcy.

                 8.7      Counterparts.  This Agreement may be executed in one
or more counterparts each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

                 8.8      Notices.  All notices and other communications given
hereunder shall be in writing and shall be sent by registered or certified
mail, return receipt requested, addressed to the party for whom or for which
intended, and at the address of such party as the same shall appear on the
signature pages hereof or on the books of the Company, or at such other address
of which any party shall have given notice to the other parties hereto in the
manner provided for herein.





                                       24
<PAGE>   26
                 8.9      Severability.  In the event that any provision of
this Agreement shall be declared invalid or unenforceable, such invalidity or
unenforceability shall not effect the validity or enforceability of the other
provisions of this Agreement, it being hereby agreed that such provisions are
severable.





                                       25
<PAGE>   27
         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                                        COMPLETE WELLNESS SMOKING CESSATION INC.
                                        PHYSICIAN ASSOCIATION, INC
                                        
                                        By:     /s/ ROBERT J. MRAZEK
                                           ------------------------------
                                                Robert J. Mrazek
                                                Chief Executive Officer
                                        
ACCEPTED AND AGREED TO:                 
COMPLETE WELLNESS CENTERS, INC          
By:/s/ C. THOMAS MCMILLEN                   
   ------------------------
   C. Thomas McMillen                   
   Chief Executive Officer              
                                        
The Manager:                            
                                        
/s/ ROBERT J. MRAZEK                    Date:      August 1, 1997
---------------------------                  ----------------------------
Robert J. Mrazek
301 Constitution Ave., NE
Washington, DC 20002





                                       26