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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D)
of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report: June 17, 2003
True Health, INC.
(Exact name of registrant as specified in its charter)
UTAH
(State or other jurisdiction of incorporation or organization)
000-30351 75-2263732
(Commission File Number) (IRS Employer Identification Number)
5 Tansey Circle
Mesquite, Texas 75149
(Address of principal executive offices)
Richard M. Stokley, Chairman & CEO
True Health, Inc.
5 Tansey Circle
Mesquite, Texas 75149
(Name and address of agent for service)
(972) 644-1200
(Telephone number, including area code of agent for service)
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Item 2. Acquisition or Disposition of Assets.
As of June 17, 2003, True Health, Inc., a Utah corporation (the
"Company") entered into an Agreement and Plan of Reorganization (the
"Agreement") with Westmeria Health Care Limited, private limited company
incorporated in England and Wales ("Westmeria") and David Francis, the majority
securityholder of Westmeria ("Shareholder").
Upon the terms and subject to the conditions of the Agreement, all
securityholders of Westmeria will exchange all of the
shares of Westmeria's common stock for a specified number of shares of the
Company's common stock to be issued and the Company will acquire all of the
issued and outstanding securities of Westmeria, making Westmeria a wholly-owned
subsidiary of the Company.
Item 7. Financial Statements and Exhibits.
Financial Statements
None
Exhibits
Exhibit A - Agreement and Plan of Reorganization
(without schedules and exhibits)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
True Health, INC.
By: /s/ Richard M. Stokely
-----------------------------
Richard M. Stokley, President and CEO
Date: June 17, 2003
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of June 17, 2003 (this
"Agreement") among TRUE HEALTH, INC., a Utah corporation ("True Health"),
WESTMERIA HEALTH CARE LIMITED, a private limited company incorporated in England
and Wales (the "Company") and David Francis, the majority securityholder of the
Company ("Shareholder").
W I T N E S S E T H
WHEREAS, upon the terms and subject to the conditions of this
Agreement, all securityholders of the Company will exchange all of the shares of
the Company's common stock for a specified number of shares of True Health's
common stock to be issued and True Health will acquire all of the issued and
outstanding securities of the Company, making the Company a wholly-owned
subsidiary of True Health;
WHEREAS, the Exchange shall qualify as a transaction in securities
exempt from registration or qualification under the Securities Act of 1933, as
amended, and under the applicable securities laws of each state or jurisdiction
where securityholders of the Company reside;
WHEREAS, for federal income tax purposes, the Exchange is intended to
qualify as a reorganization under the provisions of section 368(a)(1)(B) of the
United States Internal Revenue Code of 1986, as amended (the "Code"); and
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, True Health, the Company and Shareholder hereby agree as follows:
ARTICLE I THE Exchange
SECTION 1.01. The Exchange. Upon the terms and subject to the
conditions set forth in Article VII, at the Effective Time (as defined below in
Section 1.02), as a result of the Exchange, the Company will become a wholly
owned subsidiary of True Health.
SECTION 1.02. Effective Time; Closing. As promptly as practicable and
in no event later than the fifth business day following the satisfaction or, if
permissible, waiver of the conditions set forth in Article VII (or such other
date as may be agreed in writing by each of the parties hereto), the parties
hereto shall cause the Exchange to be consummated by Shareholder delivering to
True Health, or its representatives, the certificates representing all of the
outstanding Company Securities (as defined below in Section 2.01 (c)), duly
endorsed (or with duly executed stock powers) so as to make True Health the sole
owner thereof free and clear of all claims and encumbrances except as
specifically assumed by True Health. The term "Effective Time" means the date
and time of the Closing (or such later time as may be agreed in writing by each
of the parties hereto) to be held at the offices of Sonfield & Sonfield,
Houston, Texas (or such other place as the parties may agree).
SECTION 1.03. Effect of the Exchange. At the Effective Time, the effect
of the Exchange shall be the Company becoming a wholly owned subsidiary of True
Health.
SECTION 1.04. Directors and Officers. The initial officers and
directors of True Health shall be the persons designated by the Company
immediately prior to the Effective Time, in each case until their respective
successors are duly elected or appointed and qualified. In connection with such
election, True Health shall have provided its securityholders with an
Information Statement pursuant to Section 14f of the Exchange Act and Securities
Exchange Commission ("SEC") Rule 14f-1.
ARTICLE II DELIVERY OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Delivery of Securities. At the Effective Time, by
virtue of the Exchange:
(a) 40,485,000 shares of common stock, par value $.01 per
share, of the True Health (the "True Health Common Stock") shall be
issued in exchange for all outstanding shares of capital stock of the
Company (the "Company Securities") issued and outstanding immediately
prior to the Effective Time. Each share of Company Securities shall be
converted, subject to Section 2.02(e), into the right to receive a
ratable portion of 40,485,000 shares (the "Exchange Ratio") of True
Health Common Stock; provided, however, that, if between the date of
this Agreement and the Effective Time the outstanding shares of True
Health Common Stock shall have been changed from into a different
number of shares or a different class, by reason of any stock dividend,
subdivision, reclassification, recapitalization, split, combination or
exchange of shares, the Exchange Ratio shall be correspondingly
adjusted to the extent appropriate to reflect such stock dividend,
subdivision, reclassification, recapitalization, split, combination or
exchange of shares (all such shares of True Health Common Stock being
herein referred to as the "True Health Securities" or the "Exchange
Consideration"); and
(b) each Share held in the treasury of the Company and each
Share owned by True Health or any direct or indirect wholly owned
subsidiary of True Health or of the Company immediately prior to the
Effective Time shall be cancelled and extinguished without any
conversion thereof and no payment or distribution shall be made with
respect thereto.
SECTION 2.02. Exchange of Certificates.
(a) At the Closing, Shareholder shall deliver to True Health
all certificates representing Company Securities (the "Certificates")
delivered to it (together with any stock transfer tax stamps required
by reason of the payment of the Exchange Consideration to a person
other than the registered holder of the Certificate surrendered),
together with such other customary documents as may reasonably be
required by True Health, in exchange for the Exchange Consideration.
Certificates representing the Exchange Consideration shall be issued to
the persons and in the amounts described in Exhibit A. Any shareholder
of the Company whose Certificates are not delivered at the Closing
shall receive the Exchange Consideration with respect to such
Certificates upon delivery to True Health after the Closing of such
Certificates and the other items required pursuant to the first
sentence of this Section 2.02(a).
(b) No dividends or other distributions declared or made after
the Effective Time with respect to the True Health Common Stock with a
record date after the Effective Time shall be paid to the holder of any
unsurrendered Certificate with respect to the shares of True Health
Common Stock represented thereby, and no cash payment in lieu of any
fractional shares shall be paid to any such holder pursuant to Section
2.02(d), until the holder of such Certificate shall surrender such
Certificate.
(c) All shares of True Health Common Stock issued upon
conversion of the Company Securities in accordance with the terms
hereof (including any cash paid pursuant to Section 2.02(b) or (d))
shall be deemed to have been issued in full satisfaction of all rights
pertaining to such Company Securities.
(d) No certificate or scrip representing fractional shares of
True Health Common Stock shall be issued upon the surrender for
exchange of Certificates, and such fractional share interests will not
entitle the owner thereof to vote or to any other rights of a
shareholder of True Health. Each holder of a fractional share interest
shall be paid an amount in cash (without interest) equal to the product
obtained by multiplying (i) such fractional share interest to which
such holder (after taking into account all fractional share interests
then held by such holder) would otherwise be entitled by (ii) the
average of the per share closing prices on the OTC Bulletin Board (the
"OTC ") of shares of True Health Common Stock during the 20 consecutive
trading days ending on (and including) the trading day immediately
preceding the date of the Effective Time. As promptly as practicable
after the determination of the amount of cash, if any, to be paid to
holders of fractional share interests, the True Health shall forward
payments to such holders of fractional share interests subject to and
in accordance with the terms of Sections 2.02(b).
(e) Neither True Health nor the Company shall be liable to any
holder of Shares for any such Shares (or dividends or distributions
with respect thereto), or cash delivered to a public official pursuant
to any abandoned property, escheat or similar Law.
(f) Each of the Company and True Health shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant
to this Agreement to any holder of Shares such amounts as it is
required to deduct and withhold with respect to the making of such
payment under the Code, or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld by the Surviving
Corporation or True Health, as the case may be, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid
to the holder of Shares in respect of which such deduction and
withholding was made by the Surviving Corporation or True Health, as
the case may be.
(g) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if
required by True Health, the posting by such person of a bond, in such
reasonable amount as True Health may direct, as indemnity against any
claim that may be made against it with respect to such Certificate, the
True Health will issue in exchange for such lost, stolen or destroyed
Certificate the Exchange Consideration, any cash in lieu of fractional
shares of True Health Common Stock to which the holders thereof are
entitled pursuant to Section 2.02(d) and any dividends or other
distributions to which the holders thereof are entitled pursuant to
Section 2.02(f).
SECTION 2.03. Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of Shares thereafter on the records of the Company.
From and after the Effective Time, the holders of Certificates representing
Shares outstanding immediately prior to the Effective Time shall cease to have
any rights with respect to such Shares, except as otherwise provided in this
Agreement or by Law.
SECTION 2.04. Company Stock Options. (a) All options and warrants (the
"Company Stock Options and Warrants") outstanding, whether or not exercisable
and whether or not vested and described in Exhibit A, at the Effective Time,
shall remain outstanding following the Effective Time. At the Effective Time,
the Company Stock Options and Warrants shall, by virtue of the Exchange and
without any further action on the part of the Company or the holder thereof, be
assumed by True Health in such manner that True Health (i) is a corporation
"assuming a stock option in a transaction to which Section 424(a) applies"
within the meaning of Section 424 of the Code and the regulations thereunder or
(ii) to the extent that Section 424 of the Code does not apply to any such
Company Stock Options and Warrants, would be such a corporation were Section 424
of the Code applicable to such Company Stock Options and Warrants. Each Company
Stock Option assumed by True Health (each, a "Substitute Option") shall be
exercisable upon the same terms and conditions as under the applicable option
agreement issued thereunder, except that (A) each such Substitute Option shall
be exercisable for, and represent the right to acquire, that whole number of
shares of True Health Common Stock (rounded up or down to the nearest whole
share) equal to the number of shares of Company Securities subject to such
Company Stock Option multiplied by the Exchange Ratio; and (B) the option price
per share of True Health Common Stock shall be an amount equal to the option
price per share of Company Securities subject to such Company Stock Option in
effect immediately prior to the Effective Time divided by the Exchange Ratio
(the option price per share, as so determined, being rounded upward to the
nearest full cent).
(b) As soon as practicable after the Effective Time, True
Health shall deliver to each holder of an outstanding Company Stock
Option an appropriate notice setting forth such holder's rights
pursuant thereto and such Company Stock Option shall continue in effect
on the same terms and conditions (including any anti-dilution
provisions, and subject to the adjustments required by this Section
2.04 after giving effect to the Exchange). True Health shall comply
with the terms of all such Company Stock Options and Warrants and
ensure that Company Stock Options and Warrants which qualified as
incentive stock options under Section 422 of the Code prior to the
Effective Time continue to qualify as incentive stock options after the
Effective Time. True Health shall take all corporate action necessary
to reserve for issuance a sufficient number of shares of True Health
Common Stock for delivery upon exercise of Substitute Options pursuant
to the terms set forth in this Section 2.04.
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in this Agreement, the Company hereby represents
and warrants to True Health that:
SECTION 3.01. Organization and Qualification; Subsidiaries. Each of the
Company and each subsidiary of the Company (the "Company Subsidiaries") is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and to own, lease and operate its properties and to carry on its business
as it is now being conducted, except where the failure to be so organized,
existing or in good standing or to have such corporate power, have not had, and
could not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect (as defined below). Each of the Company and the
Company Subsidiaries is duly qualified or licensed as a foreign corporation to
do business, and is in good standing, in each jurisdiction where the character
of the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that have not had, and could not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. The term "Company Material Adverse Effect" means any
change in or effect on the business of the Company and the Company Subsidiaries
that is materially adverse to the financial condition or results of operations
of the Company and the Company Subsidiaries taken as a whole, except for any
such changes or effects resulting from or arising in connection with (i) this
Agreement or the transactions contemplated by this Agreement or the announcement
hereof, (ii) any changes in economic, regulatory or political conditions or
(iii) any issue or condition otherwise known to True Health prior to the date of
this Agreement.
SECTION 3.02. Certificate of Incorporation and By-Laws. The Company has
heretofore made available to True Health a complete and correct copy of the
Certificate of Incorporation and the By-Laws of the Company. Such Certificate of
Incorporation and By-Laws are in full force and effect. The Company is not in
violation of any of the provisions of its Certificate of Incorporation or
By-Laws.
SECTION 3.03. Capitalization. Except as indicated on Exhibit A, all
Company Securities will be issued and outstanding and will be validly issued,
fully paid and non-assessable and (ii) no shares are reserved for future
issuance pursuant to the Company Stock Options and Warrants. All shares of
Company Securities subject to issuance as aforesaid, upon issuance on the terms
and conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and non-assessable. There
are no outstanding contractual obligations of the Company or any Company
Subsidiary to repurchase, redeem or otherwise acquire any shares of Company
Securities or any capital stock of any Company Subsidiary. Each outstanding
share of capital stock of each Company Subsidiary is duly authorized, validly
issued, fully paid and non-assessable and each such share owned by the Company
or another Company Subsidiary is free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal, agreements,
limitations on the Company's or such other Company Subsidiary's voting rights,
charges and other encumbrances of any nature whatsoever, except where failure to
own such shares free and clear would not, individually or in the aggregate, have
a Company Material Adverse Effect. There are no material outstanding contractual
obligations of the Company or any Company Subsidiary to provide funds to, or
make any investment (in the form of a loan, capital contribution or otherwise)
in, any Company Subsidiary or any other person.
SECTION 3.04. Authority Relative to This Agreement. The Company has all
necessary corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder and to consummate the Exchange and the
other transactions contemplated by this Agreement. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
Exchange and the other transactions contemplated by this Agreement have been
duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the Exchange and the other transactions contemplated
by this Agreement. This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery by True Health, constitutes a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms.
SECTION 3.05. No Conflict; Required Filings and Consents. (a) Except as
described on Exhibit H, the execution and delivery of this Agreement by the
Company does not, and the performance of this Agreement by the Company will not,
(i) conflict with or violate the Certificate of Incorporation or By-laws of the
Company or any equivalent organizational documents of any Company Subsidiary,
(ii) assuming that all consents, approvals, authorizations and other actions
described in Section 3.05(b) have been obtained and all filings and obligations
described in Section 3.05(b) have been made, to the best knowledge of the
Company after inquiry, conflict with or violate any foreign or domestic law,
statute, ordinance, rule, regulation, order, judgment or decree ("Law")
applicable to the Company or any Company Subsidiary or by which any property or
asset of the Company or any Company Subsidiary is bound or affected, or (iii)
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or other encumbrance on any property or asset of the
Company or any Company Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation, except, with respect to clause (iii), for any such
conflicts, violations, breaches, defaults or other occurrences that have not
had, and could not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, and that could not reasonably be
expected to prevent or materially delay the consummation of the transactions
contemplated by this Agreement.
(b) Except as described on Exhibit H, the execution and
delivery of this Agreement by the Company does not, and the performance
of this Agreement by the Company will not, require any consent,
approval, authorization or permit of, or filing with or notification
to, any domestic or foreign governmental or regulatory authority
("Governmental Entity"), except (i) for applicable requirements, if
any, of state securities or "blue sky" laws ("Blue Sky Laws"), state
takeover laws, the filing and recordation of appropriate Exchange
documents as required by The Companies Acts and (ii) where failure to
obtain such consents, approvals, authorizations or permits, or to make
such filings or notifications, has not had, and could not reasonably be
expected to have, individually or in the aggregate, a Company Material
Adverse Effect, and could not reasonably be expected to prevent or
materially delay the consummation of the transactions contemplated by
this Agreement.
SECTION 3.06. Permits; Compliance. (a) Each of the Company and the
Company Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for the Company or any
Company Subsidiary to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Company Permits"), except where the
failure to have, or the suspension or cancellation of, any of the Company
Permits has not had, and could not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect, and, as of the date of
this Agreement, no suspension or cancellation of any of the Company Permits is
pending or, to the knowledge of the Company, threatened, except where the
failure to have, or the suspension or cancellation of, any of the Company
Permits has not had, and could not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
(b) To the best knowledge of the Company after inquiry,
neither the Company nor any Company Subsidiary is in conflict with, or
in default or violation of, (i) any Law applicable to the Company or
any Company Subsidiary or by which any property or asset of the Company
or any Company Subsidiary is bound or affected, (ii) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any
Company Subsidiary is a party or by which the Company or any Company
Subsidiary or any property or asset of the Company or any Company
Subsidiary is bound or affected or (iii) any Company Permits, except,
in the case of each of (i), (ii) and (iii), for any such conflicts,
defaults or violations that have not had, and could not reasonably be
expected to have, individually or in the aggregate, a Company Material
Adverse Effect.
SECTION 3.07. Absence of Certain Changes or Events. Since the date of
its organization, except as contemplated by or as disclosed in this Agreement,
the Company has conducted its businesses only in the ordinary course and in a
manner consistent with past practice and, since such date, there has not been
(a) any material change by the Company in its accounting methods, principles or
practices, (b) any declaration, setting aside or payment of any dividend or
distribution in respect of the Commons Stock or any redemption, purchase or
other acquisition of any of the Company's securities or (c) any increase in or
establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards), stock purchase or other employee
benefit plan, or any other increase in the compensation payable or to become
payable to any executive officers of the Company, except in the ordinary course
of business.
SECTION 3.08. Absence of Litigation. Except as set forth on Section
3.08 of the Company Disclosure Schedule, as of the date of this Agreement, there
is no litigation, suit, claim, action, proceeding or investigation pending or,
to the knowledge of the Company, threatened against the Company, or any property
or asset of the Company, before any court, arbitrator or governmental entity,
domestic or foreign, which (i) has had, or could reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the Company or
(ii) seeks to delay or prevent the consummation of any other material
transaction contemplated by this Agreement. As of the date of this Agreement,
neither the Company nor any property or asset of the Company is subject to any
continuing order of, consent decree, settlement agreement or other similar
written agreement with, or, to the knowledge of the Company, continuing
investigation by, any governmental entity, or any order, writ, judgment,
injunction, decree, determination or award of any governmental entity or
arbitrator having, individually or in the aggregate, a material adverse effect
on the Company.
SECTION 3.09. Employee Benefit Plans; Labor Matters. With respect to
each employee benefit plan, program, arrangement and contract (including,
without limitation, any "employee benefit plan", as defined in section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
maintained or contributed to by the Company or any Company Subsidiary, or with
respect to which the Company or any Company Subsidiary could incur liability
under section 4069, 4212(c) or 4204 of ERISA (the "Company Benefit Plans"), the
Company has made available to the True Health a true and correct copy of (i) the
most recent annual report (Form 5500) filed with the Internal Revenue Service
(the "IRS"), (ii) a complete copy of such Company Benefit Plan, (iii) each trust
agreement relating to such Company Benefit Plan, (iv) the most recent summary
plan description for each Company Benefit Plan for which a summary plan
description is required, (v) the most recent actuarial report or valuation
relating to a Company Benefit Plan subject to Title IV of ERISA and (vi) the
most recent determination letter, if any, issued by the IRS with respect to any
Company Benefit Plan qualified under section 401(a) of the Code.
SECTION 3.10. Contracts. (a) Exhibit B lists each of the following
written contracts and agreements of the Company (such contracts and agreements
being "Material Contracts"):
(i) each contract and agreement for the purchase or
lease of personal property with any supplier or for the
furnishing of services to the Company that in each case
involves annual payment in excess of US$50,000, or British
sterling equivalent;
(ii) all broker, exclusive dealing or exclusivity,
distributor, dealer, manufacturer's representative, franchise,
agency, sales promotion and market research agreements
involving annual payments in excess of US$100,000,or British
sterling equivalent, to which the Company is a party or any
other material contract that compensates any person other than
employees based on any sales by the Company;
(iii) all leases and subleases of real property;
(iv) all contracts and agreements relating to
indebtedness for borrowed money other than trade indebtedness
of the Company;
(v) all contracts and agreements involving annual
payments in excess of $100,000 with any Governmental Entity to
which the Company is a party; and
(vi) any other material agreement of the Company
which is terminable upon or prohibits a change of ownership or
control of the Company.
(b) Each Material Contract: (i) is valid and binding on the
Company and, to the knowledge of the Company, on the other parties
thereto, and is in full force and effect, and (ii) upon consummation of
the transactions contemplated by this Agreement, shall continue in full
force and effect without material penalty or other material adverse
consequence. The Company is not in material breach of, or material
default under, any Material Contract and, to the knowledge of the
Company, no other party to any Material Contract is in material breach
thereof or material default thereunder.
SECTION 3.11. Environmental Matters. Except as would not,
individually or in the aggregate, have a Company Material Adverse Effect:
(a) The Company and the Company Subsidiaries (i) are in
compliance with all applicable Environmental Laws (as defined below),
(ii) hold all Environmental Permits (as defined below) and (iii) are in
compliance with their respective Environmental Permits.
(b) None of the Company or any Company Subsidiary has received
any written request for information, or been notified that it is a
potentially responsible party, under CERCLA (defined below) or any
similar Law of any state, locality or any other jurisdiction.
(c) None of the Company or any Company Subsidiary has entered
into or agreed to any consent decree or order or is subject to any
judgment, decree or judicial order relating to compliance with
Environmental Laws, Environmental Permits or the investigation,
sampling, monitoring, treatment, remediation, removal or cleanup of
Hazardous Materials (defined below) and, to the knowledge of Company,
no investigation, litigation or other proceeding is pending or
threatened in writing with respect thereto.
(d) None of the real property owned or leased by the Company
or any Company Subsidiary is listed or, to the knowledge of Company,
proposed for listing on the "National Priorities List" under CERCLA, as
updated through the date of this Agreement, or any similar list of
sites in the United States or any other jurisdiction requiring
investigation or cleanup.
For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended
as of the date hereof.
"Environmental Laws" means any federal, state or
local statute, law, ordinance, regulation, rule, code or order
of the United States, or any other jurisdiction and any
enforceable judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree
or judgment, relating to pollution or protection of the
environment or natural resources, including, without
limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or
discharge of Hazardous Materials, as in effect as of the date
of this Agreement.
"Environmental Permits" means any permit, approval,
identification number, license and other authorization
required under any applicable Environmental Law.
"Hazardous Materials" means (a) any petroleum,
petroleum products, by-products or breakdown products,
radioactive materials, asbestos-containing materials or
polychlorinated biphenyls or (b) any chemical, material or
substance defined or regulated as toxic or hazardous or as a
pollutant or contaminant or waste under any applicable
Environmental Law.
SECTION 3.12. Trademarks, Patents and Copyrights. Except as would not,
individually or in the aggregate, have a Company Material Adverse Effect, the
Company and the Company Subsidiaries own or possess adequate licenses or other
valid rights to use all patents, patent rights, trademarks, trademark rights,
trade names, trade dress, trade name rights, copyrights, service marks, trade
secrets, applications for trademarks and for service marks, know-how and other
proprietary rights and information used or held for use in connection with the
business of the Company and the Company Subsidiaries as currently conducted, and
the Company has no knowledge of any assertion or claim challenging the validity
of any of the foregoing. To the knowledge of the Company, the conduct of the
business of the Company and the Company Subsidiaries as currently conducted does
not and will not conflict in any way with any patent, patent right, license,
trademark, trademark right, trade dress, trade name, trade name right, service
mark or copyright of any third party that has had, or could reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect. To the knowledge of the Company, there are no infringements of any
proprietary rights owned by or licensed by or to the Company or any Company
Subsidiary that have had, or could reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
SECTION 3.13. Taxes. Except as for such matters that could not
reasonably be expected to have a Company Material Adverse Effect, (a) the
Company and each of the Company Subsidiaries have timely filed or will timely
file all returns and reports required to be filed by them with any taxing
authority with respect to Taxes for any period ending on or before the Effective
Time, taking into account any extension of time to file granted to or obtained
on behalf of the Company and the Company Subsidiaries, (b) all Taxes shown to be
payable on such returns or reports that are due prior to the Effective Time have
been paid or will be paid, (c) as of the date of this Agreement, no deficiency
for any material amount of Tax has been asserted or assessed by a taxing
authority against the Company or any of the Company Subsidiaries and (d) the
Company and each of the Company Subsidiaries have provided adequate reserves in
their financial statements for any Taxes that have not been paid in accordance
with generally accepted accounting principles, whether or not shown as being due
on any returns. As used in this Agreement, "Taxes" shall mean any and all taxes,
fees, levies, duties, tariffs, imposts and other charges of any kind (together
with any and all interest, penalties, additions to tax and additional amounts
imposed with respect thereto) imposed by any government or taxing authority,
including, without limitation: taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property, sales,
use, capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added or gains taxes;
license, registration and documentation fees; and customers' duties, tariffs and
similar charges.
SECTION 3.14. State Takeover Statutes. The Board of Directors of the
Company has taken all action necessary to ensure that the restrictions on
business combinations contained in Section 203 of The Companies Acts will not
apply to the Exchange and the other transactions contemplated by this Agreement.
To the knowledge of the Company, no other state takeover statute is applicable
to the Exchange or the other transactions contemplated by this Agreement.
SECTION 3.15. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the Exchange or the other transactions contemplated by this Agreement based
upon arrangements made by or on behalf of the Company.
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF TRUE HEALTH
True Health hereby represents and warrants to the Company that:
SECTION 4.01. Organization and Qualification; Subsidiaries. Each of
True Health and each subsidiary of True Health (the "True Health Subsidiaries")
is a corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has all corporate
requisite power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as it is now being
conducted, except where the failure to be so organized, existing or in good
standing or to have such corporate power, authority and governmental approvals
have not had, and could not reasonably be expected to have, individually or in
the aggregate, a True Health Material Adverse Effect (as defined below). Each of
True Health and the True Health Subsidiaries is duly qualified or licensed as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified or licensed and in good
standing that have not had, and could not reasonably be expected to have,
individually or in the aggregate, a True Health Material Adverse Effect. The
term "True Health Material Adverse Effect" means any change in or effect on the
business of True Health and the True Health Subsidiaries that is materially
adverse to the financial condition or results of operations of True Health and
the True Health Subsidiaries taken as a whole, except for any such changes or
effects resulting from or in connection with (i) this Agreement or the
transactions contemplated by this Agreement or the announcement hereof, (ii) any
changes in economic, regulatory or political conditions or (iii) any issue or
condition otherwise known to the Company prior to the date of this Agreement.
SECTION 4.02. Certificate of Incorporation and By-Laws. True Health has
heretofore made available to the Company a complete and correct copy of the
Certificate of Incorporation and the By-Laws of True Health. Such Certificates
of Incorporation and By-Laws are in full force and effect. True Health is not
violation of any of the provisions of its Certificate of Incorporation or
By-Laws.
SECTION 4.03. Capitalization. The authorized capital stock of True
Health consists of (a) 100,000,000 shares of True Health Common Stock, $.01 par
value, and (b) no shares of preferred stock. As of the date of this Agreement,
(i) 258,393 shares of the True Health Common Stock are issued and outstanding,
all of which are validly issued, fully paid and non-assessable, (ii) except as
set out in the Plan referred to and defined in Section 4.07, no shares of True
Health Common Stock are held in the treasury of True Health or by True Health
Subsidiaries and (iii) no shares are reserved for future issuance pursuant to
stock options. There are no options, warrants or other rights, agreements,
arrangements or commitments of any character relating to the issued or unissued
capital stock of True Health or any True Health Subsidiary or obligating True
Health or any True Health Subsidiary to issue or sell any shares of capital
stock of, or other equity interests in, True Health or any True Health
Subsidiary. All shares of True Health Common Stock subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and non-assessable. There are no outstanding
contractual obligations of True Health or any True Health Subsidiary to
repurchase, redeem or otherwise acquire any shares of True Health Common Stock
or any capital stock of any True Health Subsidiary. Each outstanding share of
capital stock of each True Health Subsidiary is duly authorized, validly issued,
fully paid and non-assessable and each such share owned by True Health or
another True Health Subsidiary is free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal, agreements,
limitations on True Health's or such other True Health Subsidiary's voting
rights, charges and other encumbrances of any nature whatsoever, except where
failure to own such shares free and clear would not, individually or in the
aggregate, have a True Health Material Adverse Effect. There are no material
outstanding contractual obligations of True Health or any True Health Subsidiary
to provide funds to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, any True Health Subsidiary or any other person.
The shares of True Health Common Stock to be issued pursuant to the Exchange in
accordance with Section 2.01 (i) will be duly authorized, validly issued, fully
paid and non-assessable and not subject to preemptive rights created by statute,
the True Health's Certificate of Incorporation or By-Laws or any agreement to
which the True Health is a party or is bound and (ii) will, when issued, be
exempt from registration under the Securities Act of 1933, as amended (together
with the rules and regulations promulgated thereunder, the "Securities Act") and
the Securities Exchange Act of 1934, as amended (together with the rules and
regulations promulgated thereunder, the "Exchange Act") and exempt from
registration under applicable Blue Sky Laws. The shares of True Health Common
Stock to be issued pursuant to the Exchange in accordance with Section 2.01 will
bear a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of the certificates for such
True Health Securities):
"The Securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The Securities
may not be sold, transferred or assigned in the absence of an effective
registration statement for the Securities under said Act, or an opinion
of counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions, that registration is not required
under said Act."
SECTION 4.04. Authority Relative to This Agreement. True Health has all
necessary corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder and to consummate the Exchange and the
other transactions contemplated by this Agreement. The execution and delivery of
this Agreement by True Health and the consummation by True Health of the
Exchange and the other transactions contemplated by this Agreement have been
duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of True Health are necessary to authorize this
Agreement or to consummate the Exchange and the other transactions contemplated
by this Agreement. This Agreement has been duly and validly executed and
delivered by True Health and, assuming the due authorization, execution and
delivery by the Company, constitutes a legal, valid and binding obligation of
True Health, enforceable against True Health in accordance with its terms.
SECTION 4.05. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Health does not, and the performance
of this Agreement by True Health will not, (i) conflict with or violate the
Certificate of Incorporation or By-laws of True Health, (ii) assuming that all
consents, approvals, authorizations and other actions described in Section
4.05(b) have been obtained and all filings and obligations described in Section
4.05(b) have been made, conflict with or violate any Law applicable to True
Health or any True Health Subsidiary or by which any property or asset of True
Health or any True Health Subsidiary is bound or affected, or (iii) result in
any breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of True Health
or any True Health Subsidiary pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation, except, with respect to clause (iii), for any such conflicts,
violations, breaches, defaults, or other occurrences that have not had, and
could not reasonably be expected to have, individually or in the aggregate, a
True Health Material Adverse Effect, and that could not reasonably be expected
to prevent or materially delay the consummation of the transactions contemplated
by this Agreement.
(b) The execution and delivery of this Agreement by True
Health does not, and the performance of this Agreement by True Health
will not, require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Entity, except (i) for
applicable requirements, if any, of the Exchange Act, Blue Sky Laws,
the Securities Act, the OTC, state takeover laws, the filing and
recordation of appropriate Exchange documents as required by The
Companies Acts and (ii) where failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or
notifications, has not had, and could not reasonably be expected to
have, individually or in the aggregate, a True Health Material Adverse
Effect, and could not reasonably be expected to prevent or materially
delay the consummation of the transactions contemplated by this
Agreement.
SECTION 4.06. Permits; Compliance. (a) Each of True Health and the True
Health Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for True Health or any
True Health Subsidiary to own, lease and operate its properties or to carry on
its business as it is now being conducted (the "True Health Permits"), except
where the failure to have, or the suspension or cancellation of, any of True
Health Permits has not had, and could not reasonably be expected to have,
individually or in the aggregate, a True Health Material Adverse Effect, and, as
of the date of this Agreement, no suspension or cancellation of any of True
Health Permits is pending or, to the knowledge of True Health, threatened,
except where the failure to have, or the suspension or cancellation of, any of
True Health Permits has not had, and could not reasonably be expected to have,
individually or in the aggregate, a True Health Material Adverse Effect.
(b) Neither True Health nor any True Health Subsidiary is in
conflict with, or in default or violation of, (i) any Law applicable to
True Health or any True Health Subsidiary or by which any property or
asset of True Health or any True Health Subsidiary is bound or
affected, (ii) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which True Health or any True Health Subsidiary is a
party or by which True Health or any True Health Subsidiary or any
property or asset of True Health or any True Health Subsidiary is bound
or affected or (iii) any True Health Permits, except, in the case of
each of (i), (ii) and (iii), for any such conflicts, defaults or
violations that have not had, and could not reasonably be expected to
have, individually or in the aggregate, a True Health Material Adverse
Effect.
SECTION 4.07. Stock Option Plan As soon as practicable, but in no event
less than 5 business days prior to the Effective Time, True Health will cause to
be adopted a stock option and stock award plan (the "Plan") substantially in the
form of Exhibit D attached hereto.
SECTION 4.08. Absence of Certain Changes or Events. Since the date of
the filing of the Annual Report on Form 10-KSB (the "Annual Report"), except as
contemplated by or as disclosed in this Agreement, or as disclosed in any
amendment to the Annual Report, True Health and True Health Subsidiaries have
conducted their businesses only in the ordinary course and in a manner
consistent with past practice and, since such date, there has not been (a) any
True Health Material Adverse Effect, (b) any material change by True Health in
its accounting methods, principles or practices, (c) any declaration, setting
aside or payment of any dividend or distribution in respect of the Shares or any
redemption, purchase or other acquisition of any of True Health's securities or
(d) any increase in or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards), stock
purchase or other employee benefit plan, or any other increase in the
compensation payable or to become payable to any executive officers of True
Health or any True Health Subsidiary, except in the ordinary course of business
consistent with past practice.
SECTION 4.09. Absence of Litigation. As of the date of this Agreement,
there is no litigation, suit, claim, action, proceeding or investigation pending
or, to the knowledge of True Health, threatened against True Health or any True
Health Subsidiary, or any property or asset of True Health or any True Health
Subsidiary, before any court, arbitrator or Governmental Entity, domestic or
foreign, which (i) has had, or could reasonably be expected to have,
individually or in the aggregate, a True Health Material Adverse Effect or (ii)
seeks to delay or prevent the consummation of the Exchange or any other material
transaction contemplated by this Agreement. As of the date of this Agreement,
neither True Health nor any True Health Subsidiary nor any property or asset of
True Health or any True Health Subsidiary is subject to any continuing order of,
consent decree, settlement agreement or other similar written agreement with,
or, to the knowledge of True Health, continuing investigation by, any
Governmental Entity, or any order, writ, judgment, injunction, decree,
determination or award of any Governmental Entity or arbitrator having,
individually or in the aggregate, a True Health Material Adverse Effect.
SECTION 4.10. Employee Benefit Plans. True Health and True Health
Subsidiary presently do not have any employees. True Health and True Health
Subsidiary presently do not, and have never in the past, maintained or
contributed to any employee benefit plan, program, arrangement and contract
(including, without limitation, any "employee benefit plan", as defined in
section 3(3) of ERISA).
SECTION 4.11. Contracts. (a) Exhibit C lists each of the following
written contracts and agreements of True Health (such contracts and agreements
being "Material Contracts"):
(i) each contract and agreement for the purchase or
lease of personal property with any supplier or for the
furnishing of services to True Health;
(ii) all broker, exclusive dealing or exclusivity,
distributor, dealer, manufacturer's representative, franchise,
agency, sales promotion and market research agreements, to
which True Health is a party or any other material contract
that compensates any person other than employees based on any
sales by True Health;
(iii) all leases and subleases of real property;
(iv) all contracts and agreements relating to
indebtedness for borrowed money other than trade indebtedness
of True Health;
(v) all contracts and agreements involving annual
payments in excess of $100,000 with any Governmental Entity to
which True Health is a party; and
(iv) any other material agreement of True Health
which is terminable upon or prohibits a change of ownership or
control of True Health..
(b) Each Material Contract: (i) is valid and binding on True
Health and, to the knowledge of True Health, on the other parties
thereto, and is in full force and effect, and (ii) upon consummation of
the transactions contemplated by this Agreement, shall continue in full
force and effect without material penalty or other material adverse
consequence. True Health is not in material breach of, or material
default under, any Material Contract and, to the knowledge of True
Health, no other party to any Material Contract is in material breach
thereof or material default thereunder.
SECTION 4.12. Environmental Matters. Except as disclosed in the
Annual Report or as would not, individually or in the aggregate, have a True
Health Material Adverse Effect:
(a) True Health and the True Health Subsidiaries (i) are in
compliance with all applicable Environmental Laws, (ii) hold all
Environmental Permits and (iii) are in compliance with their respective
Environmental Permits.
(b) None of True Health or any True Health Subsidiary has
received any written request for information, or been notified that it
is a potentially responsible party, under CERCLA or any similar Law of
any state, locality or any other jurisdiction.
(c) None of True Health or any True Health Subsidiary has
entered into or agreed to any consent decree or order or is subject to
any judgment, decree or judicial order relating to compliance with
Environmental Laws, Environmental Permits or the investigation,
sampling, monitoring, treatment, remediation, removal or cleanup of
Hazardous Materials and, to the knowledge of True Health, no
investigation, litigation or other proceeding is pending or threatened
in writing with respect thereto.
(d) None of the real property owned or leased by True Health
or any True Health Subsidiary is listed or, to the knowledge of True
Health, proposed for listing on the "National Priorities List" under
CERCLA, as updated through the date of this Agreement, or any similar
list of sites in the United States or any other jurisdiction requiring
investigation or cleanup.
SECTION 4.13. Trademarks, Patents and Copyrights. Except as would not,
individually or in the aggregate, have a True Health Material Adverse Effect,
True Health and the True Health Subsidiaries own or possess adequate licenses or
other valid rights to use all patents, patent rights, trademarks, trademark
rights, trade names, trade dress, trade name rights, copyrights, service marks,
trade secrets, applications for trademarks and for service marks, know-how and
other proprietary rights and information used or held for use in connection with
the business of True Health and the True Health Subsidiaries as currently
conducted, and True Health has no knowledge of any assertion or claim
challenging the validity of any of the foregoing. To the knowledge of True
Health, the conduct of the business of True Health and the True Health
Subsidiaries as currently conducted does not and will not conflict in any way
with any patent, patent right, license, trademark, trademark right, trade dress,
trade name, trade name right, service mark or copyright of any third party that
has had, or could reasonably be expected to have, individually or in the
aggregate, a True Health Material Adverse Effect. To the knowledge of True
Health, there are no infringements of any proprietary rights owned by or
licensed by or to True Health or any True Health Subsidiary that have had, or
could reasonably be expected to have, individually or in the aggregate, a True
Health Material Adverse Effect.
SECTION 4.14. Taxes. Except for such matters that would not have a True
Health Material Adverse Effect, (a) True Health and each of the True Health
Subsidiaries have timely filed or will timely file all returns and reports
required to be filed by them with any taxing authority with respect to Taxes for
any period ending on or before the Effective Time, taking into account any
extension of time to file granted to or obtained on behalf of True Health and
the True Health Subsidiaries, (b) all Taxes shown to be payable on such returns
or reports that are due prior to the Effective Time have been paid or will be
paid, (c) as of the date of this Agreement, no deficiency for any material
amount of Tax has been asserted or assessed by a taxing authority against True
Health or any of the True Health Subsidiaries and (d) True Health and each of
the True Health Subsidiaries have provided adequate reserves in their financial
statements for any Taxes that have not been paid in accordance with generally
accepted accounting principles, whether or not shown as being due on any
returns.
SECTION 4.15. Accounting and Tax Matters. To the knowledge of True
Health, neither True Health nor any of its affiliates has taken or agreed to
take any action that would prevent the Exchange from constituting a transaction
qualifying under Section 368(a) of the Code. True Health is not aware of any
agreement, plan or other circumstance that would prevent the Exchange from
qualifying under Section 368(a) of the Code.
SECTION 4.16. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the Exchange or the other transactions contemplated by this Agreement based
upon arrangements made by or on behalf of True Health.
ARTICLE V CONDUCT OF BUSINESSES PENDING THE REORGANIZATION
SECTION 5.01. Conduct of Business by the Company Pending the Exchange.
The Company agrees that, between the date of this Agreement and the Effective
Time, except as contemplated by any other provision of this Agreement, unless
True Health shall otherwise consent in writing:
(a) the businesses of the Company and the Company Subsidiaries
shall be conducted only in, and the Company and the Company
Subsidiaries shall not take any action except in, the ordinary course
of business and in a manner consistent with past practice; and
(b) the Company shall use its reasonable best efforts to
preserve substantially intact its business organization, to keep
available the services of the current officers, employees and
consultants of the Company and the Company Subsidiaries and to preserve
the current relationships of the Company and the Company Subsidiaries
with customers, suppliers and other persons with which the Company or
any Company Subsidiary has significant business relations.
By way of amplification and not limitation, except as contemplated by
this Agreement, neither the Company nor any Company Subsidiary shall, between
the date of this Agreement and the Effective Time, directly or indirectly, do,
or propose to do, any of the following without the prior written consent of True
Health:
(a) amend or otherwise change its Certificate of Incorporation
or By-Laws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or
authorize the issuance, sale, pledge, disposition, grant or
encumbrance of, (i) any shares of its capital stock of any
class, or any options, warrants, convertible securities or
other rights of any kind to acquire any shares of such capital
stock, or any other ownership interest (including, without
limitation, any phantom interest), of the Company or any
Company Subsidiary or (ii) any material assets of the Company
or any Company Subsidiary, except in the ordinary course of
business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise,
with respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its
capital stock;
(e) (i) acquire (including, without limitation, by Exchange,
consolidation, or acquisition of stock or assets) any interest
in any corporation, partnership, other business organization
or any division thereof or any assets, other than acquisitions
of assets in the ordinary course of business consistent with
past practice;
(ii) incur any indebtedness for borrowed money or
issue any debt securities or assume, guarantee or endorse, or
otherwise as an accommodation become responsible for, the
obligations of any person, or make any loans or advances,
except for indebtedness incurred in the ordinary course of
business and consistent with past practice;
(iii) enter into any contract or agreement material
to the business, results of operations or financial condition
of the Company and the Company Subsidiaries taken as a whole
other than in the ordinary course of business, consistent with
past practice; or
(iv) enter into or amend any contract, agreement,
commitment or arrangement that, if fully performed, would not
be permitted under this Section 5.01(e);
(f) increase the compensation payable or to become payable to
its employees, except for increases in accordance with past practices,
or grant any severance or termination pay to, or enter into any
employment or severance agreement with, any director or employee of the
Company or any Company Subsidiary, except for employment or severance
agreements in accordance with past practice, or establish, adopt, enter
into or amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of
any director or employee; or
(g) take any action, other than reasonable and usual actions
in the ordinary course of business and consistent with past practice,
with respect to accounting policies or procedures.
SECTION 5.02. Conduct of Business by True Health Pending the Exchange.
True Health agrees that, between the date of this Agreement and the Effective
Time, except as contemplated by any other provision of this Agreement, unless
the Company shall otherwise consent in writing (such consent not to be
unreasonably withheld or delayed):
(a) the business of the True Health and the True Health
Subsidiaries shall be conducted only in, and True Health and the True
Health Subsidiaries shall not take any action except in the ordinary
course of business and in a manner consistent with past practice; and
(b) True Health shall use its reasonable best efforts to
preserve substantially intact its business organization, to keep
available the services of the current officers, employees and
consultants of True Health and the True Health Subsidiaries and to
preserve the current relationships of True Health and the True Health
Subsidiaries with customers, suppliers and other persons with which
True Health or any True Health Subsidiary has significant business
relations.
By way of amplification and not limitation, except as contemplated by
this Agreement, neither True Health nor any True Health Subsidiary shall,
between the date of this Agreement and the Effective Time, directly or
indirectly, do, or propose to do, any of the following without the prior written
consent of the Company (such consent not to be unreasonably withheld):
(a) amend or otherwise change its Certificate of Incorporation
or By-Laws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or
authorize the issuance, sale, pledge, disposition, grant or
encumbrance of, (i) any shares of its capital stock of any
class, or any options, warrants, convertible securities or
other rights of any kind to acquire any shares of such capital
stock, or any other ownership interest (including, without
limitation, any phantom interest), of True Health or any True
Health Subsidiary (except for the issuance of shares of True
Health Common Stock issuable pursuant to the True Health Stock
Options outstanding on the date of this Agreement or the
issuance in the ordinary course of business and consistent
with past practice, or (ii) any material assets of True Health
or any True Health Subsidiary, except in the ordinary course
of business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise,
with respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its
capital stock;
(e) (i) acquire (including, without limitation, by Exchange,
consolidation, or acquisition of stock or assets) any interest
in any corporation, partnership, other business organization
or any division thereof or any assets, other than acquisitions
of assets in the ordinary course of business consistent with
past practice;
(ii) incur any indebtedness for borrowed money or
issue any debt securities or assume, guarantee or endorse, or
otherwise as an accommodation become responsible for, the
obligations of any person, or make any loans or advances,
except for indebtedness incurred in the ordinary course of
business and consistent with past practice;
(iii) enter into any contract or agreement material
to the business, results of operations or financial condition
of True Health and the True Health Subsidiaries taken as a
whole other than in the ordinary course of business,
consistent with past practice; or
(iv) enter into or amend any contract, agreement,
commitment or arrangement that, if fully performed, would not
be permitted under this Section 5.02(e);
(f) increase the compensation payable or to become payable to
its officers or employees, except for increases in accordance with past
practices in salaries or wages of employees of True Health or any True
Health Subsidiary who are not officers of True Health, or grant any
severance or termination pay to, or enter into any employment or
severance agreement with, any director, officer or other employee of
True Health or any True Health Subsidiary, or establish, adopt, enter
into or amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of
any director, officer or employee; or
(g) take any action, other than reasonable and usual actions
in the ordinary course of business and consistent with past practice,
with respect to accounting policies or procedures.
ARTICLE VI ADDITIONAL AGREEMENTS
SECTION 6.01. Filing of Form 8-K. Immediately after the Effective Time,
new management of the Company will procure the prompt preparation and file with
the Securities and Exchange Commission appropriate notice describing this
transaction on Form 8-K or other applicable form, and otherwise comply with the
provisions of the Securities Exchange Act of 1934.
SECTION 6.02. Preparation of Disclosure Statement. Immediately after
the Effective Time, new management of the Company will procure the preparation
of a disclosure statement containing the necessary information to comply with
Rule 15(c)2(11) promulgated by the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934 and file such forms with one or more
firms who are members of the National Association of Securities Dealers, Inc.
("NASD") and with NASD as are necessary to effect the quotation of True Health's
securities in the NASD Electronic Bulletin Board System.
SECTION 6.03. Access to Information; Confidentiality. Except as
required pursuant to any confidentiality agreement or similar agreement or
arrangement to which True Health or the Company or any of their respective
subsidiaries is a party or pursuant to applicable Law, from the date of this
Agreement to the Effective Time, True Health and the Company shall (and shall
cause their respective subsidiaries to): (i) provide to the other (and its
officers, directors, employees, accountants, consultants, legal counsel, agents
and other representatives, collectively, "Representatives") access at reasonable
times upon prior notice to the officers, employees, agents, properties, offices
and other facilities of the other and its subsidiaries and to the books and
records thereof and (ii) furnish promptly such information concerning the
business, properties, contracts, assets, liabilities, personnel and other
aspects of the other party and its subsidiaries as the other party or its
Representatives may reasonably request.
SECTION 6.04. Obligations of True Health. True Health shall take all
action necessary to cause True Health to perform its obligations under this
Agreement and to consummate the Exchange on the terms and subject to the
conditions set forth in this Agreement.
SECTION 6.05. Application to Standard & Poor's. New management of the
Company shall promptly make application to the Standard & Poor's editorial board
to approve your corporation for a full description in Standard & Poor's Standard
Corporation Manual, Standard & Poor's Daily News Section, coverage of True
Health as part of the S&P Market Access Program and coverage on Standard &
Poor's Internet Site, www.advisorinsight.com, as well as S&P Marketscope and the
S&P Stock Guide database.
SECTION 6.06. Filing of Amended Form 8-K. Within 60 days after the
original report on Form 8-K must be filed, new management of the Company will
prepare and file with the SEC an amendment to the Form 8-K described in Section
6.02 above that includes the financial statements and pro forma financial
information prepared pursuant to Regulation S-X for the periods specified in
Rule 3.05(b).
SECTION 6.07. Further Action; Consents; Filings. Upon the terms and
subject to the conditions hereof, each of the parties hereto shall use its
reasonable best efforts to (i) take, or cause to be taken, all appropriate
action and do, or cause to be done, all things necessary, proper or advisable
under applicable law or otherwise to consummate and make effective the Exchange
and the other transactions contemplated by this Agreement, (ii) obtain from
Governmental Entities any consents, licenses, permits, waivers, approvals,
authorizations or orders required to be obtained or made by True Health or the
Company or any of their subsidiaries in connection with the authorization,
execution and delivery of this Agreement and the consummation of the Exchange
and the other transactions contemplated by this Agreement and (iii) make all
necessary filings, and thereafter make any other required submissions, with
respect to this Agreement, the Exchange and the other transactions contemplated
by this Agreement required under (A) the Exchange Act and the Securities Act and
the rules and regulations thereunder and any other applicable federal or state
securities laws and (B) any other applicable Law. The parties hereto shall
cooperate with each other in connection with the making of all such filings,
including by providing copies of all such documents to the non-filing party and
its advisors prior to filing and, if requested, by accepting all reasonable
additions, deletions or changes suggested in connection therewith.
SECTION 6.08. Registration Statement.. As soon as practicable, but in
no event more than 5 business days, after the Effective Time, new management of
the Company will cause a Registration Statement on Form S-8, or other
appropriate form ("Registration Statement"), to be prepared and filed with the
Securities and Exchange Commission (the "Commission") in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Act"). The
Registration Statement shall cover not less than 3,000,000 warrants and
10,000,000 shares of common stock of the True Health, including the shares of
common stock issuable upon exercise of the warrants, all issuable pursuant to
the Plan referred to in Section 4.07.
SECTION 6.09. Agreement to Deliver Shares. As the owner of a majority
of the shares of Company Securities, Shareholder agrees to vote his shares of
Company Securities in favor of approving this Agreement and the transactions
contemplated hereby and not to approve or support any competing transaction,
SECTION 6.10. Plan of Exchange. This Agreement is intended to
constitute a "plan of reorganization" within the meaning of section 1.368-2(g)
of the income tax regulations promulgated under the Code. From and after the
date of this Agreement and until the Effective Time, each party hereto shall use
its reasonable best efforts to cause the Exchange to qualify, and will not
knowingly take any action, cause any action to be taken, fail to take any action
or cause any action to fail to be taken which action or failure to act could
prevent the Exchange from qualifying, as a reorganization under the provisions
of section 368(a) of the Code. Following the Effective Time, neither True Health
nor any of its affiliates shall knowingly take any action, cause any action to
be taken, fail to take any action or cause any action to fail to be taken, which
action or failure to act could cause the Exchange to fail to qualify as a
reorganization under section 368(a) of the Code.
SECTION 6.11. Board of Directors of True Health. Immediately after the
Effective Date, the present Directors of True Health shall have caused the
appointment of David Francis, and any other persons designated by him, to the
Board of Directors of True Health followed by the resignation of all other
officers and directors. In connection with such election, True Health shall have
provided its securityholders with an Information Statement pursuant to Section
14f of the Exchange Act and SEC Rule 14f-1.
SECTION 6.12. Public Announcements. The initial press release relating
to this Agreement shall be a joint press release the text of which has been
agreed to by each of True Health and the Company.
SECTION 6.13. Conveyance Taxes. True Health shall be liable for and
shall hold the Company and the holders of the Company Securities who are holders
of the Company Securities immediately prior to the Effective Time harmless
against any real property transfer or gains, sales, use, transfer, value added,
stock transfer or stamp taxes, any transfer, recording registration, and other
fees, and any similar Taxes which become payable in connection with the
transactions contemplated by this Agreement. The parties acknowledge that this
Section 6.14 is specifically intended to benefit the holders of the Company
Securities who are holders of the Company Securities immediately prior to the
Effective Time.
ARTICLE VII CONDITIONS TO THE REORGANIZATION
SECTION 7.01. Conditions to the Obligations of Each Party. The
obligations of the Company, True Health and Shareholder to consummate the
Exchange are subject to the satisfaction or waiver (where permissible) of the
following conditions:
(a) this Agreement and the issuance of the Exchange
Consideration pursuant to the terms of the Exchange, as the case may
be, contemplated hereby shall have been approved and adopted by the
requisite affirmative vote of (i) the shareholders of the Company in
accordance with The Companies Acts and the Company's Certificate of
Incorporation and (ii) the board of directors of True Health in
accordance with the rules of the OTC, The Companies Acts and True
Health's Certificate of Incorporation;
(b) no Governmental Entity or court of competent jurisdiction
located or having jurisdiction in the United States shall have enacted,
issued, promulgated, enforced or entered any law, rule, regulation,
judgment, decree, executive order or award (an "Order") which is then
in effect and has the effect of making the Exchange illegal or
otherwise prohibiting consummation of the Exchange; and
(c) all consents, approvals and authorizations legally
required to be obtained to consummate the Exchange shall have been
obtained from and made with all Governmental Entities.
SECTION 7.02. Conditions to the Obligations of True Health . The
obligations of True Health to consummate the Exchange are subject to the
satisfaction or waiver (where permissible) of the following additional
conditions:
(a) to the best of the Company's knowledge and belief, each of
the representations and warranties of the Company contained in this
Agreement shall be true and correct as of the Effective Time as though
made on and as of the Effective Time, except where failure to be so
true and correct would not have a Company Material Adverse Effect, and
except that those representations and warranties which address matters
only as of a particular date shall remain true and correct as of such
date, except where failure to be so true and correct would not have a
Company Material Adverse Effect, and True Health shall have received a
certificate of the Managing Director of the Company substantially in
the form of Exhibit F to such effect;
(b) the Company shall have performed or complied with all
agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Effective Time, except where the
failure to so comply would not have a Company Material Adverse Effect,
and True Health shall have received a certificate of the Managing
Director of the Company substantially in the form of Exhibit F;
(c) True Health shall have received an investment
representation from each Company Shareholder substantially in the form
of Exhibit G.
(d) The consummation of the transactions contemplated by this
Agreement shall have been approved at or before the Closing by the
affirmative vote of the holders of not less than a majority of the
Company's common stock, and shall have received any other shareholder
approval necessary to the consummation of the transactions contemplated
by this Agreement.
(e) True Health shall have received on the Closing Date an
opinion, dated the Closing Date, of counsel for the Company in form and
substance satisfactory to counsel for the True Health, to the effect
that:
(i) The Company is a private limited company validly
existing and in good standing under the laws of its
jurisdiction of organization with all requisite power and
authority to own, lease, license, and use their respective
properties and assets and to carry on the business in which
each is now engaged.
(ii) All necessary proceedings of the Company have
been duly taken to authorize the execution, delivery, and
performance of this Agreement by the Company.
(iii) The Company has all requisite corporate power
and authority to execute, deliver, and perform this Agreement,
and this Agreement has been duly authorized, executed, and
delivered by the Company, constitutes the legal, valid, and
binding obligation of Company, and (subject to applicable
bankruptcy, insolvency, and other laws affecting the
enforceability of creditors' rights generally) is enforceable
as to the Company in accordance with its terms.
(iv) The execution, delivery, and performance of this
Agreement by Company will not violate or result in a breach of
any term of the Company's charter document or by-laws; and the
execution, delivery, and performance of this Agreement by
Company will not violate, result in a breach of, conflict
with, or (with or without the giving of notice or the passage
of time or both) entitle any party to terminate or call a
default under any terms of any agreement to which the Company
are a party.
(v) After reasonable investigation, such counsel has
no actual knowledge of any consent, authorization, approval,
order, license, certificate, or permit of or from, or
declaration or filing with, any federal, state, local, or
other governmental authority or any court or other tribunal
which is required of the Company for the execution, delivery,
or performance of this Agreement by the Company.
(vi) After reasonable investigation, such counsel has
no actual knowledge of any litigation, arbitration,
governmental or other proceeding (formal or informal), or
investigation pending or threatened with respect to the
Company, or any of its business, properties, or assets that
(i) can reasonably be expected to result in any materially
adverse change in the financial condition, results of
operations, business, properties, liabilities, or future
prospects of the Company taken as a whole or (ii) seeks to
prohibit or otherwise challenge the consummation of the
transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto, except as disclosed
in this Agreement.
(vii) The consummation of the transactions
contemplated by this Agreement has been approved at or before
the Closing by the affirmative vote of the holders of not less
than a majority of the Company's common stock, and has
received any other shareholder approval necessary to the
consummation of the transactions contemplated by this
Agreement.
In giving such opinions counsel may state that their opinion
and belief are based upon their participation in the preparation of the
Agreement and any amendments or supplements thereto and documents
incorporated therein by reference and review and discussion of the
contents thereof, but is without independent check or verification
except as specified.
SECTION 7.03. Conditions to the Obligations of the Company. The
obligations of the Company to consummate the Exchange are subject to the
satisfaction or waiver (where permissible) of the following additional
conditions:
(a) each of the representations and warranties of True Health
contained in this Agreement shall be true and correct as of the
Effective Time, as though made on and as of the Effective Time, except
where the failure to be so true and correct would not have a True
Health Material Adverse Effect, and except that those representations
and warranties which address matters only as of a particular date shall
remain true and correct as of such date, except where the failure to be
so true and correct would not have a True Health Material Adverse
Effect, and the Company shall have received a certificate of the Chief
Executive Officer or Chief Financial Officer of True Health
substantially in the form of Exhibit E to such effect;
(b) True Health shall have performed or complied with all
agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Effective Time, except where the
failure to comply would not have a True Health Material Adverse Effect,
and the Company shall have received a certificate of the Chief
Executive Officer or Chief Financial Officer of True Health
substantially in the form of Exhibit E to that effect;
(c) The Company shall have received on the Closing Date an
opinion, dated the Closing Date, of Sonfield & Sonfield, counsel for
the True Health in form and substance satisfactory to counsel for the
Company, to the effect that:
(i) True Health is a corporations validly existing
and in good standing under the laws of the States of Utah with
all requisite power and authority to own, lease, license, and
use their respective properties and assets and to carry on the
business in which each is now engaged.
(ii) All necessary proceedings of True Health have
been duly taken to authorize the execution, delivery, and
performance of this Agreement by True Health.
(iii) True Health have all requisite corporate power
and authority to execute, deliver, and perform this Agreement,
and this Agreement has been duly authorized, executed, and
delivered by True Health, constitutes the legal, valid, and
binding obligation of True Health, and (subject to applicable
bankruptcy, insolvency, and other laws affecting the
enforceability of creditors' rights generally) is enforceable
as to True Health in accordance with its terms.
(iv) The execution, delivery, and performance of this
Agreement by True Health will not violate or result in a
breach of any term of True Health's certificate of
incorporation or by-laws; and the execution, delivery, and
performance of this Agreement by True Health will not violate,
result in a breach of, conflict with, or (with or without the
giving of notice or the passage of time or both) entitle any
party to terminate or call a default under any terms of any
agreement to which True Health is a party.
(v) After reasonable investigation, such counsel has
no actual knowledge of any consent, authorization, approval,
order, license, certificate, or permit of or from, or
declaration or filing with, any federal, state, local, or
other governmental authority or any court or other tribunal
which is required of True Health for the execution, delivery,
or performance of this Agreement by True Health.
(vi) After reasonable investigation, such counsel has
no actual knowledge of any litigation, arbitration,
governmental or other proceeding (formal or informal), or
investigation pending or threatened with respect to True
Health, or any of their respective business, properties, or
assets that (i) can reasonably be expected to result in any
materially adverse change in the financial condition, results
of operations, business, properties, liabilities, or future
prospects of True Health taken as a whole or (ii) seeks to
prohibit or otherwise challenge the consummation of the
transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto, except as disclosed
in this Agreement.
(vii) the Shares to be issued by the True Health
hereunder have been duly authorized and, when issued and when
delivered to the Company Shareholders as provided by this
Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights;
In giving such opinions Sonfield & Sonfield may state that
their opinion and belief are based upon their participation in the
preparation of the Agreement and any amendments or supplements thereto
and documents incorporated therein by reference and review and
discussion of the contents thereof, but is without independent check or
verification except as specified.
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated and the
Exchange and the other transactions contemplated by this Agreement may be
abandoned at any time prior to the Effective Time, notwithstanding any requisite
approval and adoption of this Agreement and the transactions contemplated by
this Agreement, as follows:
(a) by mutual written consent duly authorized by the Boards of
Directors of each of True Health and the Company;
(b) by either True Health or the Company if the Effective Time
shall not have occurred on or before August 15, 2003; provided,
however, that the right to terminate this Agreement under this Section
8.01(b) shall not be available to any party whose failure to fulfill
any obligation under this Agreement has been the cause of, or resulted
in, the failure of the Effective Time to occur on or before such date;
(c) there shall be any Order which is final and non-appealable
preventing the consummation of the Exchange;
(d) by True Health upon a breach of any material
representation, warranty, covenant or agreement on the part of the
Company set forth in this Agreement, or if any representation or
warranty of the Company shall have become untrue, in either case such
that the conditions set forth in Section 7.02(a) and Section 7.02(b)
would not be satisfied ("Terminating Company Breach"); provided,
however, that, if such Terminating Company Breach is curable by the
Company through the exercise of its best efforts and for so long as the
Company continues to exercise such best efforts, True Health may not
terminate this Agreement under this Section 8.01(d).
(e) by the Company upon a breach of any material
representation, warranty, covenant or agreement on the part of True
Health set forth in this Agreement, or if any representation or
warranty of True Health shall have become untrue, in either case such
that the conditions set forth in Section 7.03(a) and Section 7.03(b)
would not be satisfied ("Terminating True Health Breach"); provided,
however, that, if such Terminating Company Breach is curable by True
Health through the exercise of its best efforts and for so long as True
Health continues to exercise such best efforts, the Company may not
terminate this Agreement under this Section 8.01(e).
SECTION 8.02. Effect of Termination. Except as provided in Section
9.01, in the event of termination of this Agreement pursuant to Section 8.01,
this Agreement shall forthwith become void, there shall be no liability under
this Agreement on the part of True Health or the Company or any of their
respective officers or directors, and all rights and obligations of each party
hereto shall cease, provided, however, that nothing herein shall relieve any
party from liability for the willful breach of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
SECTION 8.03. Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, after the
approval of this Agreement by the shareholders of the Company, no amendment may
be made which would reduce the amount or change the type of consideration into
which each Share shall be converted upon consummation of the Exchange. This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.
SECTION 8.04. Waiver. At any time prior to the Effective Time, any
party hereto may (a) extend the time for the performance of any obligation or
other act of any other party hereto, (b) waive any inaccuracy in the
representations and warranties contained herein or in any document delivered
pursuant hereto, and (c) waive compliance with any agreement or condition
contained herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby.
SECTION 8.05. Expenses. All Expenses (as defined below) incurred in
connection with this Agreement and the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses, whether or not the
Exchange or any other transaction is consummated. "Expenses" as used in this
Agreement shall include all reasonable out-of-pocket expenses (including,
without limitation, all fees and expenses of counsel, accountants, investment
bankers, experts and consultants to a party hereto and its affiliates) incurred
by a party or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement and all
other matters related to the closing of the Exchange and the other transactions
contemplated by this Agreement.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement and
in any certificate delivered pursuant hereto shall terminate at the Effective
Time or upon the termination of this Agreement pursuant to Section 8.01, as the
case may be, except that the agreements set forth in Articles I and II and
Sections 6.01, 6.02, 6.05 and this Article IX shall survive the Effective Time
and those set forth in Sections 8.02 and 8.05 and this Article IX shall survive
termination.
SECTION 9.02. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, facsimile, telegram or telex or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 9.02):
if to True Health:
True Health, Inc.
5 Tansey Circle
Mesquite, Texas 75149
Attn: Richard M. Stokely, President
Facsimile: (713) 658-0739
with a copy to (which shall not constitute notice to such party):
Robert L. Sonfield, Jr., Esq.
Sonfield & Sonfield
770 South Post Oak Lane, Suite 435
Houston, Texas 77056-1937
Facsimile: (713) 877-1547
if to the Company:
Westmeria Health Care Limited
Kelsey House
77 High Street
Beckenham
Kent
BR3 1AN
Attn: David Francis, Managing Director
Facsimile: (44) 208 658 9870
with a copy to (which shall not constitute notice to the Company):
Loughran & Co.
38 Hertford Street
London W1Y 7TG
Attn: James A. Loughran, Esq.
Facsimile: (44) 207 355 4975
SECTION 9.03. Certain Definitions. For purposes of this Agreement,
the term:
(a) "affiliate" of a specified person means a person who
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with such specified person;
(b) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or
as trustee or executor, of the power to direct or cause the direction
of the management and policies of a person, whether through the
ownership of voting securities, as trustee or executor, by contract or
credit arrangement or otherwise;
(c) "knowledge" means, with respect to any matter in question,
that the executive officers of the Company or True Health, as the case
may be, have actual knowledge of such matter;
(d) "person" means an individual, corporation, partnership,
limited partnership, syndicate, person (including, without limitation,
a "person" as defined in section 13(d)(3) of the Exchange Act), trust,
association or entity or government, political subdivision, agency or
instrumentality of a government; and
(e) "subsidiary" or "subsidiaries" of any person means any
corporation, partnership, joint venture or other legal entity of which
such person (either alone or through or together with any other
subsidiary) owns, directly or indirectly, more than 50% of the stock or
other equity interests, the holders of which are generally entitled to
vote for the election of the board of directors or other governing body
of such corporation or other legal entity.
SECTION 9.04. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this Agreement
be consummated as originally contemplated to the fullest extent possible.
SECTION 9.05. Assignment; Binding Effect; Benefit. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.
SECTION 9.06. Incorporation of Exhibits. The Company Disclosure
Schedule, the True Health Disclosure Schedule and all Exhibits attached hereto
and referred to herein are hereby incorporated herein and made a part hereof for
all purposes as if fully set forth herein.
SECTION 9.07. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
SECTION 9.08. Governing Law; Forum. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.
SECTION 9.09. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 9.10. Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 9.11. Entire Agreement. This Agreement (including the Exhibits)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings among the
parties with respect thereto. No addition to or modification of any provision of
this Agreement shall be binding upon any party hereto unless made in writing and
signed by all parties hereto.
IN WITNESS WHEREOF, True Health, Shareholder and the Company have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
TRUE HEALTH, INC.
Attest by: By: _____________________________
Earl D. Milton, Secretary Richard M. Stokely, President
WESTMERIA HEALTH CARE LIMITED
Attest by: By: ______________________
Name: David Francis, Managing Director
Title:
--------------------------------
David Francis, Shareholder