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EXHIBIT 2
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AGREEMENT AND PLAN OF MERGER
AMONG
AMERICAN HEALTHWAYS, INC.,
EMPOWER HEALTH, INC.
AND
THE STOCKHOLDERS OF
EMPOWER HEALTH, INC.
DATED AS OF JUNE 5, 2001
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "Agreement"), is executed as of
the 5th day of June, 2001, by and American Healthways, Inc., a Delaware
corporation ("AMHC"), Empower Health, Inc., a Delaware corporation ("EHI"), and
each of the stockholders of EHI as identified on the signature page hereto
(individually, an "EHI Stockholder," and, collectively, the "EHI Stockholders").
RECITALS
The Boards of Directors of AMHC and EHI each have determined that a
business combination between AMHC and EHI is in the best interests of their
respective companies and stockholders and presents an opportunity for their
respective companies to achieve long-term strategic and financial benefits, and
accordingly have agreed to effect the merger provided for herein upon the terms
and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants, and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE I.
THE MERGER
1.1 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.3), EHI shall be
merged with and into AMHC in accordance with this Agreement and the separate
corporate existence of EHI shall thereupon cease (the "Merger"). AMHC shall be
the surviving corporation in the Merger (sometimes hereinafter referred to as
the "Surviving Corporation"). The Merger shall have the effects specified in
Section 259 of the Delaware General Corporation Law ("DGCL").
1.2 The Closing. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") shall take place at the
offices of Bass, Xxxxx & Xxxx PLC, 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx,
upon the execution hereof. The date on which the Closing occurs is hereinafter
referred to as the "Closing Date."
1.3 Effective Time. The parties hereto shall cause a Certificate
of Merger, in the form attached hereto as Exhibit A, and this Agreement to be
properly executed and filed in accordance with the applicable provisions of the
DGCL on the Closing Date. The Merger shall become effective at the time of
filing of the Certificate of Merger with the Delaware Secretary of State or at
such later time that the parties hereto shall have agreed upon and designated in
such filing as the effective time of the Merger (the "Effective Time").
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ARTICLE II.
ARTICLES OF INCORPORATION, BYLAWS,
AND OFFICERS AND DIRECTORS OF THE SURVIVING CORPORATION
2.1 Articles of Incorporation. The Articles of Incorporation of
AMHC in effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation, until duly amended in accordance
with applicable law.
2.2 Bylaws. The Bylaws of AMHC in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation, until duly
amended in accordance with applicable law.
2.3 Directors. The directors of AMHC immediately prior to the
Effective Time shall be the directors of the Surviving Corporation as of the
Effective Time.
2.4 Officers. The officers of AMHC immediately prior to the
Effective Time shall be the officers of the Surviving Corporation as of the
Effective Time, except for such officers as shall be elected at the Effective
Time.
ARTICLE III.
CONVERSION OF EHI STOCK
3.1 Conversion of EHI Shares in the Merger. At the Effective Time,
by virtue of the Merger and without any action on the part of the stockholders
of EHI, each issued and outstanding share of common stock, $.01 par value, of
EHI (the "EHI Common Stock") shall be converted into, and become exchangeable
for, the right to receive the number of shares of validly issued, fully paid,
and nonassessable common stock, par value $.001 per share, of AMHC (the "AMHC
Common Stock"), determined by dividing 115,000 by the number of outstanding
shares of EHI Common Stock. The aggregate number of shares of AMHC Common Stock
issuable in connection with the Merger is sometimes referred to herein as the
"Merger Consideration." AMHC will deliver the Merger Consideration promptly
following the Closing.
3.2 Fractional Shares. In lieu of the issuance of fractional
shares of AMHC Common Stock, each EHI Stockholder, upon surrender of a
certificate which immediately prior to the Effective Time represented EHI Common
Stock, shall be entitled to receive a cash payment (without interest) equal to
the fair market value of any fraction of a share of AMHC Common Stock to which
such holder would be entitled under Section 3.1, but for this provision. For
purposes of calculating such payment, the fair market value of a fraction of a
share of AMHC Common Stock shall be such fraction multiplied by the Average
Market Price. As used herein, "Average Market Price" shall mean the average per
share closing price
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of AMHC Common Stock for the 20 consecutive trading days ending on the third day
prior to the Closing Date.
3.3 Exchange of Certificates. After the Effective Time, each
holder of an outstanding certificate or certificates theretofore representing
EHI Common Stock, upon surrender thereof to AMHC, shall be entitled to receive
in exchange therefor any payment due in lieu of fractional shares and a
certificate or certificates representing the number of whole shares of AMHC
Common Stock into which such holder's EHI Common Stock was converted. Until so
surrendered, each outstanding certificate representing EHI Common Stock shall be
deemed for all purposes to represent the number of whole shares of AMHC Common
Stock into which the EHI Common Stock theretofore represented shall have been
converted. AMHC may, at its option, refuse to pay any dividend or other
distribution, if any, payable to the holders of shares of AMHC Common Stock to
the holders of certificates representing EHI Common Stock until such
certificates are surrendered for exchange; provided, however, that, upon
surrender and exchange of such EHI Common Stock certificates there shall be paid
to the record holders of the AMHC stock certificate or certificates issued in
exchange therefor the amount, without interest, of dividends and other
distributions, if any, which have become payable with respect to the number of
whole shares of AMHC Common Stock into which the EHI Common Stock theretofore
represented thereby shall have been converted and which have not previously been
paid.
3.4 Consent to Merger; Waiver of Dissenters' Rights. By their
execution of this Agreement each EHI Stockholder (a) consents to the terms of
the Merger and to the taking of stockholder action to approve the Merger without
a meeting, (b) acknowledges that he is aware of his rights to dissent to the
Merger and demand payment for his shares of EHI Common Stock in accordance with
the DGCL, and (c) waives such rights to dissent and demand payment.
3.5 Contingent Shares. As additional Merger Consideration, the
EHI Stockholders shall be entitled to receive up to an additional 355,000 shares
of AMHC Common Stock as set forth below:
(a) If at any time from October 1, 2001 to September 30,
2006, the average closing price of AMHC Common Stock on The Nasdaq Stock Market
(or such other market or exchange on which AMHC Common Stock is then traded)
equals or exceeds any of the Average Closing Target Prices set forth below
during the Necessary Consecutive Trading Days (as defined below), and within the
Necessary Consecutive Trading Days the average closing price during the last
fifteen trading days of that period is equal to or greater than the Average
Closing Target Price, then AMHC shall issue to the EHI Stockholders Contingent
Shares as follows:
Average Closing Target Price Contingent Shares
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$15 71,000
$20 71,000 (1)
$25 71,000 (2)
$30 71,000 (3)
$35 71,000 (4)
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(1) plus the 71,000 shares issuable based on the Average Closing Target
Price of $15 if not previously issued to EHI Stockholders.
(2) plus the 142,000 shares issuable based on the Average Closing Target
Price of $20 if not previously issued to the EHI Stockholders.
(3) plus the 213,000 shares issuable based on the Average Closing Target
Price of $25 if not previously issued to the EHI Stockholders.
(4) plus the 284,000 shares issuable based on the Average Closing Target
Price of $30 if not previously issued to the EHI Stockholders.
(b) As used herein, the "Necessary Consecutive Trading
Days" will be 45 days during the period from October 1, 2001 to April 1, 2002,
and during the period from April 2, 2002 to September 30, 2006, the Necessary
Consecutive Trading Days will be 30 days.
(c) Contingent Shares will be issuable upon the first
attainment of the Average Closing Target Price and shall not be issued a second
time upon a subsequent achievement of an Average Closing Target Price.
Contingent Shares issuable upon the attainment of a lower Average Closing Target
Price shall be issued and delivered in addition to Contingent Shares issuable
with respect to attainment of a higher Average Closing Target Price.
(d) In the event of a Change of Control (as defined
herein) of AMHC, all the unearned Contingent Shares will vest upon the closing
of the Change in Control transaction and be issued at the closing of the Change
in Control transaction or promptly thereafter if the price paid for AMHC Common
Stock in such transaction (the "Change in Control Price") exceeds $20.00 per
share. If the Change in Control Price equals or exceeds $15.00 per share and is
equal to or less than $20.00 per share, 50% of the unearned Contingent Shares
shall vest and be issued at the closing of the Change in Control transaction or
promptly thereafter. If the Change in Control Price is less than $15.00 per
share all, unearned Contingent Shares will be forfeited. As used herein, "Change
in Control" of AMHC shall mean any of the following:
(i) any person or entity, including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, other than
AMHC or a wholly-owned subsidiary thereof or any employee benefit plan of AMHC
or any of its subsidiaries, becomes the beneficial owner of AMHC's securities
having a majority of the combined voting power of the then outstanding
securities of AMHC that may be cast for the election of directors of AMHC; or
(ii) as the result of, or in connection with, any
tender or exchange offer, merger or other business combination, sales of assets
or contested election, or any combination of the foregoing transactions, less
than a majority of the combined voting power of the then outstanding securities
of AMHC or any successor corporation or entity entitled to
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vote generally in the election of the directors of AMHC or such other
corporation or entity after such transaction are held in the aggregate by the
holders of AMHC's securities entitled to vote generally in the election of
directors of AMHC immediately prior to such transaction.
(e) In the event and as often as AMHC changes the number
of shares of AMHC Common Stock issued and outstanding following the date of this
Agreement but prior to September 30, 2006, as a result of a stock split, stock
dividend, recapitalization, reorganization, or any other transaction in which
any security of AMHC or any other entity or cash is issued or paid in respect of
the outstanding shares of AMHC Common Stock and the record date therefor is
after the date of this Agreement and prior to September 30, 2006, the number of
Contingent Shares issuable hereunder shall be proportionately adjusted.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF EHI AND THE
EHI STOCKHOLDERS
Except as set forth in the disclosure letter delivered prior to the
execution hereof to AMHC (the "EHI Disclosure Letter"), the EHI Stockholders,
jointly and severally, represent, warrant, and agree as follows:
4.1 Existence; Good Standing; Corporate Power and Authority. EHI
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Delaware. EHI is qualified to do business as a foreign
corporation and is in good standing under the laws of any state of the United
States in which the character of the properties owned or leased by it therein or
in which the transaction of business makes such qualification necessary, except
where the failure to be so qualified would not reasonably be expected to have a
material adverse effect on the business, results of operations, financial
condition or prospects of EHI (an "EHI Material Adverse Effect"). EHI has all
requisite corporate power and authority to own, operate, and lease its
properties and to carry on its business as now conducted. EHI has provided to
AMHC complete and correct copies of its articles of incorporation and bylaws,
each of which is in full force and effect.
4.2 Authorization, Validity, and Effect of Agreements. EHI has
the full corporate power and authority to execute and deliver this Agreement and
all agreements and documents contemplated hereby. This Agreement and the Merger
have been approved by EHI's Board of Directors and the EHI Stockholders and the
consummation by EHI of the transactions contemplated hereby has been duly
authorized by all requisite corporate action. This Agreement constitutes, and
all agreements and documents contemplated hereby (when executed and delivered
pursuant hereto) will constitute, the valid and legally binding obligations of
EHI and the EHI Stockholders, enforceable in accordance with their respective
terms.
4.3 Capitalization. The authorized capital stock of EHI consists
of 1,000 shares of EHI Common Stock, 1,000 shares of which are issued and
outstanding as of the date of this Agreement and owned beneficially and of
record by the EHI Stockholders as set forth in the EHI Disclosure Letter. EHI
has no outstanding capital stock, bonds, debentures, notes, or
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other obligations the holders of which have the right to vote (or which are
convertible into or exercisable for securities having the right to vote) with
the stockholders of EHI on any matter. All issued and outstanding shares of EHI
Common Stock are duly authorized, validly issued, fully paid, nonassessable, and
free of preemptive rights. There are no options, warrants, calls, subscriptions,
convertible securities, or other rights, agreements, or commitments that
obligate EHI to issue, transfer, or sell any shares of its capital stock. None
of the outstanding shares of EHI Common Stock are subject to any voting trust
agreement, lien, encumbrance, security interest, restriction, or claim.
4.4 Other Interests. EHI does not own, directly or indirectly, or
have any obligation to acquire any interest or investment in any corporation,
partnership, joint venture, business, trust, or other entity.
4.5 No Violation. Neither the execution and delivery by EHI and
the EHI Stockholders of this Agreement nor the consummation by EHI and the EHI
Stockholders of the transactions contemplated hereby in accordance with the
terms hereof, will: (i) conflict with or result in a breach of any provisions of
the articles of incorporation or bylaws of EHI; (ii) conflict with, result in a
breach of any provision of or the modification or termination of, constitute a
default under, or result in the creation or imposition of any lien, security
interest, charge, or encumbrance upon any of the assets of EHI or any EHI
Stockholder pursuant to any commitment, lease, contract, or other agreement or
instrument to which EHI or any EHI Stockholder is a party; or (iii) violate or
result in a change in any rights or obligations under any governmental permit or
license or any order, arbitration award, judgment, writ, injunction, decree,
statute, rule, or regulation applicable to EHI or any EHI Stockholder.
4.6 Regulatory Consents. No consent, approval, order, or
authorization of, or registration, declaration, or filing with, any governmental
entity or any third party, is required by or with respect to EHI or any EHI
Stockholder in connection with the execution and delivery of this Agreement by
EHI or any EHI Stockholder, or the consummation by EHI or any EHI Stockholder of
the transactions contemplated hereby.
4.7 No Undisclosed Liability. EHI does not have any liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise
and whether due or to become due (including, without limitation, liabilities for
Taxes and interest, penalties and other charges payable with respect thereto),
except for a liability to Xxxx & Company, LLC ("Xxxx") with respect to the
payment of compensation, benefits, travel expenses and other reasonable expenses
incurred after March 31, 2001 through the Closing Date in the ordinary course of
business related to the employment of Messrs. Xxxxxxxx, X'Xxxxxx, Xxxx and
Xxxxxxxxx and Xx. X'Xxxx, which expenses shall not exceed $120,000 per month
(the "Employee Expenses"). Notwithstanding any liabilities or obligations listed
on the EHI Disclosure Letter, except for the Employee Expenses, AMHC shall not
assume any liabilities or obligations of EHI whatsoever. AMHC shall reimburse
Xxxx for the Employee Expenses within seven (7) days after receipt from Xxxx of
an invoice for such expenses.
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4.8 Tax Matters.
(a) For purposes of this Agreement, (i) "Tax" means any
federal, state, local, or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Section 59A of the Internal Revenue Code of
1986, as amended (the "Code")), customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not, and (ii) "Tax Return" means any return, report, information
return, or other document (including any related or supporting information)
filed or required to be filed with any taxing authority in connection with its
determination, assessment, collection, administration, or imposition of any Tax.
(b) EHI has been a validly electing S Corporation within
the meaning of Sections 1361 and 1362 of the Code at all times since January 1,
2001. EHI has duly and timely filed all Tax Returns and has duly and timely paid
all Taxes and other charges (whether or not shown on any Tax Return) due or
claimed to be due from it by federal, foreign, state, or local taxing
authorities. True and correct copies of all Tax Returns relating to federal
taxes and state income and sales taxes and other charges for the period from
organization through December 31, 2000 have been heretofore delivered to AMHC.
Since December 31, 2000, EHI has not incurred any material Tax liabilities.
There are no Tax liens upon any properties or assets of EHI (whether real,
personal, or mixed, tangible or intangible), and, there are no pending or, to
EHI's knowledge, threatened audits or examinations relating to, or claims
asserted for, Taxes or assessments against EHI, and EHI is aware of no basis for
any such claims. EHI has not granted or been requested to grant any extension of
the limitation period applicable to any claim for Taxes or assessments with
respect to Taxes. EHI is not a party to any Tax allocation or sharing agreement.
EHI has no liability for the Taxes of any Affiliated Group under Treasury
Regulation 1.1502-6 (or any similar provision of state, local, or foreign law).
EHI has withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, or stockholder.
(c) The EHI Disclosure Letter lists each jurisdiction in
which EHI files Tax Returns for each period or portion thereof ending on or
before the Closing Date. There is no claim outstanding against EHI by any taxing
authority in a jurisdiction where EHI does not file Tax Returns that it is or
may be subject to taxation by that jurisdiction.
(d) All material elections with respect to Taxes
affecting EHI as of the date hereof are set forth in the EHI Disclosure Letter.
(e) All joint ventures, partnerships, or other
arrangements or contracts to which EHI is a party and that could be treated as a
partnership for federal income tax purposes are set forth in the EHI Disclosure
Letter.
(f) EHI (i) has not filed a consent pursuant to Section
341(f) of the Code nor agreed to have Section 341(f)(2) apply to any disposition
of a subsection (f) asset (as such
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term is defined in Section 341(f) of the Code) owned by EHI; (ii) has not
agreed, and is not required, to make any adjustment under Section 481(a) of the
Code by reason of a change in accounting method or otherwise that will affect
the liability of EHI for Taxes; (iii) has not made an election, and is not
required, to treat any asset of EHI as owned by another person pursuant to the
provisions of former Section 168(f)(8) of the Code or as tax-exempt bond
financed property or tax-exempt use property within the meaning of Section 168
of the Code; and (iv) has not made any of the foregoing elections and is not
required to apply any of the foregoing rules under any comparable state or local
tax provision.
4.9 Employees and Fringe Benefit Plans.
(a) The EHI Disclosure Letter sets forth the names, ages,
and titles of all employees of EHI, and the annual rate of compensation
(including bonuses) being paid to each such employee as of the most recent
practicable date.
(b) EHI has never sponsored, maintained, or contributed
to, and has no liability under, any employment, bonus, deferred compensation,
pension, stock option, stock appreciation right, profit-sharing or retirement
plan, arrangement, or practice, medical, vacation, retiree medical, severance
pay plan, or any other agreement or fringe benefit plan, arrangement, or
practice, that affects one or more of EHI's employees, including any "employee
benefit plan" as defined by Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") (collectively, the "Plans").
(c) EHI has no commitment, whether formal or informal, to
create any Plan.
(d) EHI has not engaged in any prohibited transaction as
defined in Section 406 of ERISA or Section 4975 of the Code for which there is
no statutory exemption in Section 408 of ERISA or Section 4975 of the Code.
(e) EHI has complied in all material respects with all
applicable federal, state, and local laws, rules, and regulations relating to
employees' employment and employment relationships, including, without
limitation, wage related laws, anti-discrimination laws, employee safety laws,
and COBRA (defined herein to mean the requirements of Code Section 4980B,
Treasury Regulation Section 54.4980B-1 through -8 and Part 6 of Subtitle B of
Title I of ERISA).
(f) The consummation of the transactions contemplated by
this Agreement will not (i) result in the payment or series of payments by EHI
to any employee or other person of an "excess parachute payment" within the
meaning of Section 280G of the Code; (ii) entitle any employee or former
employee of EHI to severance pay, unemployment compensation, or any other
payment; or (iii) accelerate the time of payment or vesting of any stock option,
stock appreciation right, deferred compensation, or other employee benefits
under any Plan (including vacation and sick pay).
(g) Neither EHI nor any member in a "controlled group"
with EHI (as defined in Section 414(b), 414(c), 414(m) or 414(o) of the Code)
has ever maintained or terminated a pension plan subject to Title IV of ERISA or
the minimum funding standards of
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Section 412 of the Code or has ever contributed to, participated in, or
withdrawn from, or has any liability under, a multiemployer plan as defined by
Section 4001(a)(3) of Title IV of ERISA.
4.10 Lawful Operations. EHI has been and currently is conducting
its business, and each of the premises leased or owned by EHI have been and now
are being used and operated, in compliance in all material respects with all
statutes, regulations, orders, covenants, restrictions, and plans of federal,
state, regional, county, or municipal authorities, agencies, or boards
applicable to the same.
4.11 Litigation. There is no suit, action, or proceeding pending
or, to the knowledge of EHI or any of the EHI Stockholders, threatened against
or affecting EHI. EHI is not subject to any currently existing order, writ,
injunction, or decree relating to its operations.
4.12 Corporate Records; Other Information. The minute books of EHI
and its stock ledger and records, copies of which have been provided to AMHC,
are true, complete and correct and constitute complete and accurate records of
all meetings and actions taken by the board of directors, committees of the
board of directors, and the stockholders thereof.
4.13 Intellectual Property Rights. EHI owns or has the right to use
the following to conduct its business as now conducted: all reports, research,
analyses, studies, models, memoranda, computer programs, specifications, source
code, object code, databases, data compilations, graphics, devices, techniques,
algorithm methods, processes, procedures, formulae, drawings, designs,
improvements, discoveries, concepts, software, development tools, inventions,
know-how and other technology and content with respect to all the foregoing,
developed, produced, used, marketed or sold by EHI and all trademarks, service
marks, trade names, slogans, copyrights in published and unpublished works,
patents, patent applications, inventions and discoveries that may be patentable,
rights in mask works, and all trade secrets including, but not limited to,
customer lists, software, and technical information, and all goodwill associated
therewith, all of which is listed on the EHI Disclosure Letter (collectively,
the "Intellectual Property"). The use of any Intellectual Property does not, to
the best of EHI Stockholders' knowledge, infringe or constitute an appropriation
of any right, title or interest held by any other person or entity, and there
have been no claims made with respect thereto. EHI has not granted to any third
party any rights or permissions to use any of the Intellectual Property. EHI has
not received any notice or claim (whether written, oral or otherwise)
challenging EHI's ownership or rights in the Intellectual Property or alleging
any conflict or infringement of any third party property rights. To EHI's
knowledge, no other person or entity is infringing or misappropriating or
otherwise making any unauthorized use of any of the Intellectual Property.
Attached to the EHI Disclosure Letter are trademark and tradename searches
undertaken by EHI.
4.14 Certain Business Practices and Regulations. Neither EHI nor to
EHI's knowledge any of its executive officers, directors, or employees, has (i)
made or agreed to make any contribution, payment, or gift to any customer,
supplier, landlord, political candidate, governmental official, employee, or
agent where either the contribution, payment, or gift or the purpose thereof was
illegal under any law or regulation; (ii) established or maintained any
unrecorded fund or asset for any purpose or made any false entries on its
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respective books and records for any reason; (iii) made or agreed to make any
contribution, or reimbursed any political gift or contribution made by any other
person, to any candidate for federal, state, or local public office in violation
of any law or regulation; or (iv) submitted any claim for services rendered or
reimbursement for expenses to any person where the services were not actually
rendered or the expenses were not actually incurred.
4.15 No Brokers. Neither EHI nor any EHI Stockholder has entered
into any contract, arrangement, or understanding with any person or firm that
may result in the obligation of EHI or AMHC to pay any finder's fees, brokerage
or agent's commissions, or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby.
4.16 AMHC Stock Ownership; Investment Intent.
(a) The shares of AMHC Common Stock issuable in the
Merger are being acquired by the EHI Stockholders for investment and not with a
view to the distribution thereof, and each of the EHI Stockholders acknowledges
and understands that the certificate(s) representing such shares of AMHC Common
Stock will bear a legend in substantially the following form:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
ANY STATE SECURITIES ACT AND CANNOT BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER SUCH ACTS OR UNLESS EXEMPTIONS FROM
REGISTRATION ARE AVAILABLE.
THE COMPANY WILL FURNISH THE HOLDER HEREOF INFORMATION
REGARDING THE DESIGNATIONS, RELATIVE RIGHTS, PREFERENCES, AND
LIMITATIONS APPLICABLE TO EACH CLASS AND THE VARIATIONS AND RIGHTS,
PREFERENCES, AND LIMITATIONS DETERMINED FOR EACH SERIES OF STOCK ISSUED
BY THE COMPANY (AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO
DETERMINE VARIATIONS FOR FUTURE SERIES) UPON REQUEST IN WRITING AND
WITHOUT CHARGE.
(b) Each EHI Stockholder, severally and not jointly,
represents and warrants as follows:
(i) Each of the EHI Stockholders is an
"accredited investor" as defined under Rule 501 of Regulation D promulgated
under the Securities Act of 1933, as amended (the "Securities Act"). Any EHI
Stockholder who is not an "accredited investor" hereby appoints Xxxxxx X. Xxxxxx
as such stockholder's purchaser representative in connection with evaluating the
merits and risks of such EHI Stockholder's investment in AMHC Common Stock
pursuant to the terms of this Agreement, and Xxxxxx X. Xxxxxx hereby agrees to
act as purchaser representative for such EHI Stockholders.
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(ii) Each of the EHI Stockholders has received
and reviewed copies of AMHC's Annual Report on Form 10-K for the fiscal year
ended August 31, 2000, AMHC's Quarterly Reports on Form 10-Q for the fiscal
quarters ended November 30, 2000 and February 28, 2001 (collectively, the "SEC
Reports"), which contain certain information regarding AMHC and its business.
Each of the EHI Stockholders confirms that AMHC has made available to him or to
his representatives the opportunity to ask questions of AMHC's officers and
directors and to acquire such information about the shares of AMHC Common Stock
and the business and financial condition of AMHC as the EHI Stockholders have
requested, which additional information has been received.
(iii) In deciding to acquire shares of AMHC Common
Stock pursuant to Article 3 hereof, the EHI Stockholders have consulted with
their legal, financial, and tax advisers with respect to the Merger and the
nature of the investment together with additional information concerning AMHC
set forth in the SEC Reports and any additional information provided under
subsection (ii) above.
(iv) The financial condition of each of the EHI
Stockholders is such that he can bear the risk of this investment indefinitely
and can afford to bear the loss of his entire investment. Each EHI Stockholder
has adequate means of providing for his current needs and personal contingencies
and has no need for liquidity in his investment in AMHC. Each of the EHI
Stockholders, either alone or with his representatives, has such knowledge and
experience in financial and business matters that he is capable of evaluating
the merits and risks of an investment in AMHC.
4.17 Limitations on Sales of Shares. Each EHI Stockholder has
discussed with counsel, to the extent such EHI Stockholder felt necessary, the
requirements, limitations, and restrictions on his ability to sell, transfer, or
otherwise dispose of the AMHC Common Stock to be received in the Merger, and
fully understands the requirements, limitations, and restrictions on his ability
to transfer, sell, or otherwise dispose of the AMHC Common Stock.
4.18 Full Disclosure. All of the information provided by EHI and
its representatives herein or in the EHI Disclosure Letter is true, correct, and
complete in all material respects, and no representation, warranty, or statement
made by EHI or the EHI Stockholders in this Agreement or the EHI Disclosure
Letter contains or will contain any untrue statement of a material fact or omits
or will omit to state any material fact necessary to make such representation,
warranty, or statement not misleading.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF AMHC
Except as set forth in the disclosure letter delivered at or prior to
the execution hereof to EHI (the "AMHC Disclosure Letter"), AMHC represents,
warrants and agrees as follows:
5.1 Existence; Good Standing; Corporate Authority. AMHC is duly
incorporated, validly existing, and in good standing under the laws of the State
of Delaware. AMHC is duly
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licensed or qualified to do business as a foreign corporation and is in good
standing under the laws of any other state of the United States in which the
character of the properties owned or leased by it therein or in which the
transaction of its business makes such qualification necessary, except where the
failure to be so qualified would not reasonably be expected to have a material
adverse effect on the business, results of operations, financial condition or
prospects of AMHC (an "AMHC Material Adverse Effect"). AMHC has all requisite
corporate power and authority to own, operate, and lease its properties and
carry on its business as now conducted.
5.2 Authorization, Validity, and Effect of Agreements. AMHC has
the requisite corporate power and authority to execute and deliver this
Agreement and all agreements and documents contemplated hereby. The consummation
by AMHC of the transactions contemplated hereby has been duly authorized by all
requisite corporate action. This Agreement constitutes, and all agreements and
documents contemplated hereby (when executed and delivered pursuant hereto) will
constitute, the valid and legally binding obligations of AMHC, enforceable in
accordance with their respective terms. The issuance and delivery by AMHC of
shares of AMHC Common Stock in connection with the Merger and this Agreement
have been duly and validly authorized by all necessary corporate action on the
part of AMHC. The shares of AMHC Common Stock to be issued in connection with
the Merger and this Agreement, when issued in accordance with the terms of this
Agreement, will be validly issued, fully paid, and nonassessable.
5.3 Capitalization. The authorized capital stock of AMHC consists
of 5,000,000 shares of preferred stock, none of which is issued and outstanding,
and 15,000,000 shares of AMHC Common Stock, of which 8,395,155 shares were
issued and outstanding as of February 28, 2001. AMHC has no outstanding bonds,
debentures, notes, or other obligations the holders of which have the right to
vote (or which are convertible into or exercisable for securities having the
right to vote) with the stockholders of AMHC on any matter. All issued and
outstanding shares of AMHC Common Stock are duly authorized, validly issued,
fully paid, nonassessable, and free of preemptive rights. Other than pursuant to
this Agreement and AMHC's stock option plans, there are no options, warrants,
calls, subscriptions, convertible securities, or other rights, agreements, or
commitments that obligate AMHC to issue, transfer, or sell any shares of capital
stock of AMHC.
5.4 No Violation. Neither the execution and delivery by of this
Agreement, nor the consummation by AMHC of the transactions contemplated hereby
in accordance with the terms hereof, will: (i) conflict with or result in a
breach of any provisions of the articles of incorporation or bylaws of AMHC;
(ii) conflict with, result in a breach of any provision of or the modification
or termination of, constitute a default under, or result in the creation or
imposition of any lien, security interest, charge, or encumbrance upon any of
the assets of AMHC pursuant to any commitment, lease, contract, or other
agreement or instrument to which AMHC is a party; or (iii) violate or result in
a change in any rights or obligations, under any governmental permit or license
or any order, arbitration award, judgment, writ, injunction, decree, statute,
rule, or regulation applicable to AMHC.
5.5 SEC Documents. Prior to the date hereof, AMHC has delivered to
EHI and the EHI Stockholders copies of the SEC Reports. The SEC Reports (i) were
prepared in all
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material respects in accordance with the applicable requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder, and (ii) as of their respective dates,
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading. The consolidated balance sheets included in the SEC Reports
(including the related notes and schedules) fairly present, in all material
respects, the consolidated financial position of AMHC as of their respective
dates and each of the consolidated statements of income, stockholders' equity,
and cash flows included in the SEC Reports (including any related notes and
schedules) fairly present, in all material respects, the results of operations,
stockholders' equity, and cash flows of AMHC for the periods set forth therein,
in each case in accordance with generally accepted accounting principles
consistently applied during the periods involved, except as may be noted
therein.
5.6 AMHC Common Stock. The AMHC Common Stock when issued and
delivered to the EHI Stockholders at Closing in accordance with the provisions
of this Agreement will be duly authorized, validly issued shares of Common Stock
of AMHC, fully paid and non-assessable, and the Contingent Shares have been duly
reserved for issuance.
5.7 Rule 144 Requirements. The Company agrees to:
(a) comply with the requirements of Rule 144(c) under the
Securities Act with respect to current public information about the Company; and
(b) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act of 1933 and the Exchange Act.
ARTICLE VI.
POST-CLOSING COVENANTS
AMHC, EHI and the EHI Stockholders agree as follows with respect to the
period following the Closing:
6.1 General. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other party may
reasonably request. The EHI Stockholders acknowledge and agree that from and
after the Closing AMHC will be entitled to possession of all documents, books,
records (including Tax records), agreements, and financial data of any sort
relating to EHI, which documents, books, records, agreements, and financial data
shall be available to the EHI Stockholders for any bona fide purpose.
6.2 Litigation Support. In the event and for so long as any party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge,
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complaint, claim, or demand in connection with (a) any transaction contemplated
under this Agreement or (b) any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction on or prior to the Closing Date involving EHI,
each of the other parties will cooperate with such party and such party's
counsel in the contest or defense, make available their personnel, and provide
such testimony and access to their books and records as shall be necessary in
connection with the contest or defense, at the sole cost and expense of the
contesting or defending party (unless the contesting or defending party is
entitled to indemnification therefor under Article VIII).
6.3 Tax Periods Ending on or Before the Closing Date. The EHI
Stockholders shall prepare or cause to be prepared, sign and file or cause to be
filed all Tax Returns for EHI for all periods ending on or prior to the Closing
Date which are filed after the Closing Date. The EHI Stockholders shall permit
AMHC to review and comment on each such Tax Return described in the preceding
sentence prior to filing. The EHI Stockholders shall pay all Taxes of EHI with
respect to such periods.
6.4 Cooperation on Tax Matters.
(a) AMHC, EHI and the EHI Stockholders shall cooperate
fully, as and to the extent reasonably requested by the other party, in
connection with the filing of Tax Returns pursuant to this Section and any
audit, litigation or other proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon the other party's request) the provision
of records and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. AMHC, EHI and the EHI Stockholders agree (i) to
retain all books and records with respect to Tax matters pertinent to EHI
relating to any taxable period beginning before the Closing Date until the
expiration of the statute of limitations (and, to the extent notified by AMHC or
the EHI Stockholders, any extensions thereof) of the respective taxable periods,
and to abide by all record retention agreements entered into with any taxing
authority, and (ii) to give the other party reasonable written notice prior to
transferring, destroying or discarding any such books and records and, if the
other party so requests, AMHC or the EHI Stockholders, as the case may be, shall
allow the other party to take possession of such books and records.
(b) (i) AMHC shall keep the EHI Stockholders advised as
to the status of Tax audits and litigation involving any Taxes which could give
rise to a liability of the EHI Stockholders to AMHC under this agreement or
which could give rise to additional Tax liability of any EHI Stockholder with
respect to any Tax period ending on or before the Effective Time (a "Liability
Issue"). AMHC shall promptly furnish to the EHI Stockholders copies of any
inquires or requests for information from any taxing authority concerning any
Liability Issue. AMHC shall notify the EHI Stockholders as to which inquiries or
information requests it desires to monitor and with respect to such matters, the
EHI Stockholders will submit for AMHC approval (which shall not be unreasonably
withheld) the information to be provided to a taxing authority in response to
inquiries or requests. The EHI Stockholders agree to timely notify AMHC
regarding any proposed written communication (i.e., communications not relating
to inquiries or requests for information) by the EHI Stockholders to any such
taxing authority with respect to such Liability Issue and AMHC shall
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subsequently notify the EHI Stockholders as to which Liability Issues AMHC
desires to monitor. Upon request by AMHC, the EHI Stockholders shall provide
copies of such written communications and documents to be submitted therewith
and receive approval from AMHC (which approval shall not be unreasonably
withheld and shall be given on a timely basis) prior to submission to the taxing
authority. AMHC shall have the right to consult with the EHI Stockholders
regarding any response to such requests. AMHC and the EHI Stockholders, as the
case may be, shall each promptly furnish to the other upon receipt a copy of
information document requests, a notice of proposed adjustment, revenue agent's
report or similar report or notice of deficiency together with all relevant
documents and memos related to the foregoing documents, notices or reports,
relating to any Liability Issue.
(ii) Subject to the cooperation provisions of (i)
above, AMHC shall have full responsibility for and discretion in handling any
Tax controversy, including, without limitation, an audit, a protest to the
Appeals Division of the IRS, and litigation in Tax Court or any other court of
competent jurisdiction (a "Proceeding") involving EHI. However, upon request by
the EHI Stockholders, and subject to the cooperation provision of (i) above, the
EHI Stockholders shall have full responsibility and discretion in handling, at
the EHI Stockholders' expense, any Proceeding with respect to any Liability
Issue. In the event that EHI or AMHC is required to pay any Tax, file any bond
or deposit any amount in order to undertake a Proceeding relating to a Liability
Issue, the EHI Stockholders shall pay to AMHC no later than three (3) business
days before such payment is required to be made, without interest and until a
final determination with respect to such Tax has occurred, one hundred percent
of the amount required to be paid by EHI or AMHC. Within three (3) business days
of the receipt received by AMHC of a refund of any amount paid to it by the EHI
Stockholders (including any interest received by AMHC), AMHC shall pay such
refunded amount to the EHI Stockholders net of any Tax cost incurred by EHI as a
result of such refund.
ARTICLE VII.
DELIVERIES AT CLOSING
7.1 AMHC Deliveries. At the Closing, AMHC shall deliver to the
EHI Stockholders (or the EHI Stockholders' agent):
(a) the Merger Consideration as specified in Section 3.1;
(b) a copy of the resolutions of the Board of Directors
of AMHC, certified by its Secretary, authorizing the execution, delivery and
performance of this Agreement and the other documents referred to herein to be
executed by AMHC, and the consummation of the transactions contemplated hereby;
(c) an employment and non-compete agreement for Xxxxxxx
X. Xxxxxxxx, in the form of Exhibit B (the "Employment and Non-Compete
Agreement"), executed by AMHC;
(d) a registration rights agreement, in the form of
Exhibit C, executed by AMHC; and
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(e) the opinion of Bass, Xxxxx & Xxxx PLC, legal counsel
for the Company, the terms of which are set forth in Exhibit E hereto.
7.2 EHI Stockholders Deliveries. At the Closing, the EHI
Stockholders will deliver to AMHC:
(a) stock certificates for the EHI Common Stock, free
and clear of all liens, claims, charges, restrictions, security interests,
proxies, pledges, equities or encumbrances of any kind, which certificates shall
be duly endorsed to AMHC or accompanied by duly executed stock powers in form
reasonably satisfactory to AMHC, and to which all required transfer tax stamps
shall be affixed;
(b) a copy of the resolutions of the Board of Directors
and stockholders of EHI, certified by its Secretary, authorizing the execution,
delivery and performance of this Agreement and the other documents referred to
herein to be executed by EHI and the EHI Stockholders, and the consummation of
the transactions contemplated hereby;
(c) the opinion of Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP,
legal counsel for EHI and the EHI Stockholders, the terms of which are set forth
in Exhibit D hereto; and
(d) a copy of the Employment and Non-Compete Agreement
executed by Xxxxxxx X. Xxxxxxxx.
ARTICLE VIII.
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNIFICATION
8.1 Survival of Representations and Warranties. The
representations and warranties of the parties contained in Articles IV and V of
this Agreement shall survive the Merger, but shall terminate six years from the
Closing.
8.2 Indemnity Obligations of the EHI Stockholders. The EHI
Stockholders, jointly and severally (except for Xxxxx X'Xxxx, Xxxxxxxx X.
Xxxxxx, Xxxxxxx X. Xxxx and Xxxxxxxx X. X'Xxxxxx, whose obligations shall be
several and not joint), hereby agree to defend, indemnify, hold harmless and
shall reimburse AMHC, EHI and each director, officer, employee, agent, affiliate
and successor and assign thereof, for, from and against each claim, loss,
liability, cost and expense (including without limitation, interest, penalties,
reasonable costs of preparation and investigation, and the reasonable fees,
disbursements and expenses of attorneys, accountants and other professional
advisors) (collectively, "Losses"), directly or indirectly, resulting from:
(a) Any untrue representation, misrepresentation, breach
of warranty or nonfulfillment of any covenant, agreement or other obligation by
or of EHI or the EHI
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Stockholders contained herein, any Schedule hereto or in any certificate,
document or instrument delivered to AMHC pursuant to Section 7.2 hereto.
(b) Any liability of EHI or the EHI Stockholders (other
than the Employee Expenses), including any Tax liability of EHI or the EHI
Stockholders not previously paid, which may at any time be asserted or assessed
against it for any event or period ending on or prior to the Closing Date.
(c) Any and all liabilities or obligations of EHI to EHI
Stockholders arising outside of this Agreement.
8.3 Indemnity Obligations of AMHC. AMHC hereby agrees to defend,
indemnify, hold harmless and shall reimburse the EHI Stockholders and their
permitted successors and assigns for, from and against each Loss, directly or
indirectly resulting from any untrue representation, misrepresentation, breach
of warranty or nonfulfillment of any covenant, agreement or other obligation of
AMHC contained herein or in any certificate, document or instrument delivered to
the EHI Stockholders pursuant to Section 7.1 hereto.
8.4 Indemnification Threshold. Neither AMHC nor the EHI
Stockholders shall have any liability with respect to the matters described in
Sections 8.2 and 8.3 until the total of all Losses for AMHC or the EHI
Stockholders, as applicable, with respect to such matters exceeds $10,000 (the
"Threshold") and then only for such amounts in excess of the Threshold. This
Section 8.4 shall not apply to any breach of AMHC's or the EHI Stockholders'
representations and warranties of which AMHC or any EHI Stockholder, as
applicable, had knowledge at any time prior to the date on which such
representation or warranty is made and any intentional breach by AMHC or any EHI
Stockholder of any covenant or obligation.
8.5 Procedure. An indemnified party shall promptly notify the
indemnifying party of any claim, demand, action or proceeding for which
indemnification will be sought under Section 8.2 or Section 8.3 of this
Agreement, and, if such claim, demand, action or proceeding is a third party
claim, demand, action or proceeding, the indemnifying party will have the right
at its expense to assume the defense thereof using counsel reasonably acceptable
to the indemnified party. The indemnified party shall have the right to
participate, at its own expense, with respect to any such third party claim,
demand, action or proceeding. In connection with any such third party claim,
demand, action or proceeding, AMHC and the EHI Stockholders shall cooperate with
each other and provide each other with access to relevant books and records in
their possession. No such third party claim, demand, action or proceeding shall
be settled without the prior written consent of the indemnified party. If a firm
written offer is made to settle any such third party claim, demand, action or
proceeding and the indemnifying party proposes to accept such settlement and the
indemnified party refuses to consent to such settlement, then: (i) the
indemnifying party shall be excused from, and the indemnified party shall be
solely responsible for, all further defense of such third party claim, demand,
action or proceeding; and (ii) the maximum liability of the indemnifying party
relating to such third party claim, demand, action or proceeding shall be the
amount of the proposed settlement if the amount thereafter recovered from
indemnified party on such third party claim, demand, action or proceeding is
greater than the amount of the proposed settlement.
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8.6 Right of Set-Off. AMHC shall have a right of set-off against
the Contingent Shares due and owing to the EHI Stockholders, if any, under this
Agreement to satisfy any indemnification right of AMHC hereunder. For purposes
of this right of set-off, the value of the Contingent Shares shall equal the
average per share closing price for the 20 consecutive trading days ending on
the third day prior to the date of payment of the obligation.
8.7 Limitation on Liability. Notwithstanding anything herein to
the contrary, except in the case of fraud, intentional misrepresentation or
intentional misconduct, AMHC and the EHI Stockholders shall not be liable to the
other for amounts that exceed, in the aggregate, the Merger Consideration
(including the Contingent Shares) actually delivered to the EHI Stockholders.
For purposes of this Section 8.7, the value of the Merger Consideration shall
equal the average per share closing price for AMHC Common Stock for the 20
consecutive trading days ending on the third day prior to the date of payment of
the obligation. In the event that the AMHC Common Stock is not then traded on
The Nasdaq Stock Market (or other market or exchange), the value of the Merger
Consideration shall be determined by the Board of Directors of AMHC. The EHI
Stockholders may deliver shares of AMHC Common Stock to AMHC in satisfaction of
an indemnification obligation.
ARTICLE IX.
GENERAL PROVISIONS
9.1 Notices. Any notice required to be given hereunder shall be
sufficient if in writing, by courier service (with proof of service), hand
delivery or certified or registered mail (return receipt requested and
first-class postage prepaid), addressed as follows:
If to AMHC: If to EHI or the EHI Stockholders:
Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxx
Chairman, President and c/o Kidd & Company, LLC
Chief Executive Officer Three Pickwick Plaza
American Healthways, Inc. Xxxxxxxxx, XX 00000
0000 Xxxxx Xxxxx Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
with a copy to: with a copy to:
Xxxxx X. Xxxxx III Xxxxxx X. Xxxxxxx
Bass, Xxxxx & Xxxx PLC Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP
315 Xxxxxxxxx Street, Suite 0000 Xxx Xxxxxxxx Xxxxxxxx
Xxxxxxxxx, XX 00000-0000 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
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or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
personally delivered or mailed.
9.2 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.
9.3 Entire Agreement. This Agreement, the Exhibits, the EHI
Disclosure Letter, the AMHC Disclosure Letter, and any documents delivered by
the parties as required by this Agreement constitute the entire agreement among
the parties with respect to the subject matter hereof and supersede all prior
and contemporaneous 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.
9.4 Amendment. This Agreement may be amended by the parties
hereto prior to Closing, by action taken by both of their respective Boards of
Directors, if applicable. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
9.5 Governing Law. The validity of this Agreement, the
construction of its terms and the determination of the rights and duties of the
parties hereto shall be governed by and construed in accordance with the laws of
the State of Delaware applicable to contracts made and to be performed wholly
within such state.
9.6 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all of the parties
hereto.
9.7 Waivers. Except as provided in this Agreement, no action
taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants, or agreements contained in this Agreement. The waiver by
any party hereto of a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any other
provision hereunder.
9.8 Incorporation of Exhibits. The EHI Disclosure Letter, the
AMHC Disclosure Letter, and the 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.
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9.9 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
9.10 Expenses. Each party to this Agreement shall bear its own
expenses in connection with the Merger and the transactions contemplated hereby.
Notwithstanding anything to the contrary herein, the EHI Stockholders shall pay
all fees of legal, accounting, financial and other advisors engaged by EHI or
the EHI Stockholders in connection with this Agreement and the documents to be
executed in connection herewith.
9.11 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of competent
jurisdiction, this being in addition to any other remedy to which they are
entitled by contract, at law, or in equity.
9.12 Press Releases and Public Announcements. Neither EHI nor the
EHI Stockholders shall issue any press release or make any public announcement
relating to the subject matter of this Agreement without the prior written
approval of AMHC.
[remainder of page left blank intentionally]
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IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf on the day and year first written
above.
AMERICAN HEALTHWAYS, INC.
By: /s/ Xxxxx X. Xxxx
-----------------------------------------
Title: Executive Vice President
--------------------------------------
EMPOWER HEALTH, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Title: Chairman and President
--------------------------------------
THE EHI STOCKHOLDERS:
/s/ Xxxxxx X. XxXxxxx
--------------------------------------------
Xxxxxx X. XxXxxxx
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxx
--------------------------------------------
Xxxxxxx X. Xxxx
/s/ Xxxxx X. Xxxx
--------------------------------------------
Xxxxx X. Xxxx
/s/ Xxxx X. Xxxxxxxx
--------------------------------------------
Xxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxx Grantor Trust
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
---------------------------------------
Title: Trustee
--------------------------------------
/s/ Xxxxxxx X. Xxxx
--------------------------------------------
Xxxxxxx X. Xxxx
/s/ Xxxxxxx Xxxxxxxx
--------------------------------------------
Xxxxxxx Xxxxxxxx
/s/ Xxxxx X'Xxxx
--------------------------------------------
Xxxxx X'Xxxx
/s/ Xxxxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxxxx X. Xxxxxx
/s/ Xxxxxxxx X. X'Xxxxxx
--------------------------------------------
Xxxxxxxx X. X'Xxxxxx
