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Document Preview Agreement and Plan of Merger |
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Title: |
Agreement and Plan of Merger |
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Entities: |
American Healthways, Inc.; National City Bank; McDermott, Will & Emery |
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Date: |
2003 |
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Size: |
Preview shows 23KB of 169KB total |
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Price: |
$67 |
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ID: |
#368060 |
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
AMERICAN HEALTHWAYS, INC.,
AH MERGERSUB, INC.,
STATUSONE HEALTH SYSTEMS, INC.
AND
CERTAIN STOCKHOLDERS OF
STATUSONE HEALTH SYSTEMS, INC.
DATED AS OF SEPTEMBER 5, 2003
{PAGE}
TABLE OF CONTENTS
{TABLE}
{CAPTION}
PAGE
----
{S} {C} {C}
ARTICLE 1. THE MERGER.....................................................................................1
1.1 The Merger.....................................................................................1
1.2 The Closing....................................................................................1
1.3 Effect of Merger...............................................................................2
ARTICLE 2. EXCHANGE OF STOCK OF STATUSONE.................................................................2
2.1 Exchange of StatusOne Shares in the Merger and Payment of Merger Consideration.................2
2.2 Working Capital Estimate.......................................................................3
2.3 Working Capital Adjustment.....................................................................3
2.4 Payment of Class A/B Merger Consideration and Adjustment Amount................................5
2.5 Escrow Amount..................................................................................6
2.6 Revenue Shortfall..............................................................................6
2.7 Earn-Out Consideration.........................................................................7
2.8 Procedures.....................................................................................8
2.9 StatusOne Options, Warrants, and Convertible Securities........................................8
ARTICLE 3. OBLIGATIONS OF THE PARTIES AT THE CLOSING......................................................9
3.1 American Healthways' Deliverables..............................................................9
3.2 StatusOne's Deliverables.......................................................................9
ARTICLE 4. REPRESENTATIONS AND WARRANTIES BY STATUSONE AND THE PRINCIPAL STOCKHOLDERS....................11
4.1 Authorization; Corporate Authority............................................................11
4.2 Existence; Good Standing......................................................................11
4.3 Execution and Enforceability..................................................................11
4.4 Capitalization................................................................................12
4.5 Subsidiaries..................................................................................12
4.6 Prior Sales of Securities.....................................................................12
4.7 No Violation..................................................................................12
4.8 Regulatory Consents...........................................................................13
4.9 Financial Statements; Controls................................................................13
4.10 No Material Adverse Changes; No Undisclosed Liabilities.......................................13
4.11 Tax Matters...................................................................................14
4.12 Employees and Fringe Benefit Plans............................................................15
4.13 Compliance with Applicable Laws and other Regulations.........................................16
4.14 Litigation....................................................................................17
4.15 Corporate Records; Other Information..........................................................17
4.16 Properties....................................................................................18
{/TABLE}
i
{PAGE}
{TABLE}
{S} {C} {C}
4.17 Material Contracts............................................................................18
4.18 StatusOne Proprietary Assets..................................................................19
4.19 Certain Business Practices and Regulations....................................................21
4.20 Insurance.....................................................................................21
4.21 Accounts Receivable...........................................................................21
4.22 Customers and Suppliers.......................................................................21
4.23 No Brokers....................................................................................22
4.24 Compliance with Applicable Privacy Laws.......................................................22
4.25 Government Investigation......................................................................22
4.26 Full Disclosure...............................................................................23
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF AMERICAN HEALTHWAYS AND AH MERGER SUB.......................23
5.1 Authorization; Corporate Authority............................................................23
5.2 Existence; Good Standing......................................................................23
5.3 Execution and Enforceability..................................................................23
5.4 No Violation..................................................................................24
5.5 Professional Fees.............................................................................24
5.6 Consents and Approvals........................................................................24
5.7 Commission Filings............................................................................24
5.8 AMHC Common Stock.............................................................................24
ARTICLE 6. POST CLOSING COVENANTS AND AGREEMENTS.........................................................24
6.1 Further Assurances............................................................................24
6.2 Taxes.........................................................................................25
6.3 Employment Offers.............................................................................25
6.4 Outstanding Options...........................................................................25
6.5 Employee Benefit Plans........................................................................25
6.6 Confidential Information Memorandum and Termination, Consent and Release......................26
6.7 Consents......................................................................................26
ARTICLE 7. INDEMNIFICATION AND SURVIVAL OF REPRESENTATIONS...............................................26
7.1 Indemnification by the StatusOne Stockholders.................................................26
7.2 Time Limitation; StatusOne Stockholders.......................................................27
7.3 Limitations on Amount; StatusOne Stockholders.................................................28
7.4 Indemnification by American Healthways........................................................28
7.5 Time Limitation; American Healthways..........................................................29
7.6 Limitations on Amount; American Healthways....................................................29
7.7 Procedure.....................................................................................29
7.8 Statements as Representations.................................................................30
{/TABLE}
ii
{PAGE}
{TABLE}
{S} {C} {C}
7.9 American Healthways' Right of Set-Off Against Earn-Out Consideration..........................30
7.10 Indemnification Exclusive Remedy..............................................................30
ARTICLE 8. NON-COMPETE...................................................................................30
8.1 Restrictive Covenants.........................................................................30
ARTICLE 9. CERTAIN TAX MATTERS...........................................................................32
9.1 Tax Periods Ending on or Before the Closing Date..............................................32
9.2 Tax Periods Beginning Before and Ending After the Closing Date................................32
9.3 Cooperation on Tax Matters....................................................................33
9.4 Tax Sharing Agreements........................................................................33
9.5 Taxes.........................................................................................33
ARTICLE 10. STATUSONE STOCKHOLDERS' REPRESENTATIVE........................................................33
ARTICLE 11. MISCELLANEOUS.................................................................................34
11.1 Expenses......................................................................................34
11.2 Assignability; Parties in Interest............................................................35
11.3 Entire Agreement; Amendments..................................................................35
11.4 Headings......................................................................................35
11.5 Severability..................................................................................35
11.6 Notices.......................................................................................35
11.7 Governing Law.................................................................................36
11.8 No Third-Party Beneficiaries..................................................................37
11.9 Pronouns......................................................................................37
11.10 Construction..................................................................................37
11.11 Counterparts..................................................................................37
{/TABLE}
EXHIBITS
Exhibit A Escrow Agreement
Exhibit B Earn Out Agreement
Exhibits C-1
through C-10 Employment Agreements
Exhibit D Form of McDermott, Will & Emery Opinion
Exhibit E Form of Bass, Berry & Sims PLC Opinion
Exhibit F Form of Release and Consent
Exhibit G Customer List
Exhibit H Certificate of Merger
Exhibit I Consent to Form of Earn-Out Consideration
SCHEDULES
Schedule 2.4 Schedule of Beneficial Interests
iii
{PAGE}
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "Agreement"), is dated as of the
5th day of September, 2003, by and among American Healthways, Inc., a Delaware
corporation ("American Healthways"), AH Mergersub, Inc., a Delaware corporation
and wholly owned subsidiary of American Healthways ("AH Merger Sub"), StatusOne
Health Systems, Inc., a Delaware corporation ("StatusOne"), the holders of
capital stock of StatusOne named on the signatures pages hereto (individually a
"Principal Stockholder" and collectively, the "Principal Stockholders") and
Matthew Kelliher as "Stockholder Representative" pursuant to Article 10 hereof.
RECITALS
A. The Boards of Directors of American Healthways, AH Merger Sub, and
StatusOne each have determined that a business combination between American
Healthways and StatusOne is in the best interests of their respective companies
and stockholders and accordingly have agreed to effect the merger provided for
herein upon the terms set forth herein.
B. The Boards of Directors of American Healthways, AH Merger Sub and
StatusOne have approved the merger of AH Merger Sub with and into StatusOne (the
"Merger") on the terms set forth in this Agreement and the DGCL (as defined
below), whereby upon the Closing of the Merger, each issued share of StatusOne
Capital Stock (as defined below) and each Option (as defined below) shall be
converted into the right to receive the Merger Consideration (as defined below)
in accordance with Section 2.1(a) herein.
C. American Healthways, AH Merger Sub, StatusOne and the Principal
Stockholders desire to make certain representations and warranties and to enter
into covenants and agreements in connection with the Merger.
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 1.
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), AH Merger Sub shall be merged
with and into StatusOne in accordance with this Agreement and the separate
corporate existence of AH Merger Sub shall thereupon cease. StatusOne shall be
the surviving corporation in the Merger (sometimes hereinafter referred to as
the "Surviving Corporation") and will be a wholly owned subsidiary of American
Healthways. The Merger shall have the effects specified in Section 251 of the
Delaware General Corporation Law (the "DGCL").
1.2 THE CLOSING. Subject to the terms and conditions of this Agreement,
the closing of the Merger (the "Closing") shall take place either (a) at the
offices of Bass, Berry & Sims PLC, 315 Deaderick Street, Suite 2700, Nashville,
Tennessee, at 3:00 p.m., local time, on September 5, 2003, or (b) at such other
time, date or place as American Healthways and StatusOne may agree. The date on
which the Closing occurs is hereinafter referred to as the "Closing Date".
{PAGE}
1.3 EFFECT OF MERGER.
(a) General. At the Closing, the parties hereto shall cause a
certificate of merger meeting the requirements of the relevant provisions
of the DGCL to be properly executed and filed in accordance with such
provisions, which certificate shall be in substantially the form attached
hereto as Exhibit H (the "Certificate of Merger"). The Merger shall become
effective at the time of filing of the Certificate of Merger or at such
later time which the parties hereto shall have agreed upon and designated
in such Certificate of Merger as the effective time of the Merger (the
"Effective Time"). Notwithstanding any language contained herein to the
contrary, each of the parties hereby agrees that for tax, financial
accounting and reporting purposes, the effective date of the Closing shall
be September 1, 2003, but all representations and warranties are being
made as of the Closing Date.
(b) Certificate of Incorporation. The certificate of incorporation
of the Surviving Corporation shall be amended and restated at and as of
the Effective Time to read as did the certificate of incorporation of AH
Merger Sub (which certificate of incorporation will include restrictions
on transferability of shares of capital stock of the Surviving
Corporation) immediately prior to the Effective Time (except that the name
of the Surviving Corporation shall remain unchanged as of the Effective
Time).
(c) Bylaws. The bylaws of the Surviving Corporation shall be amended
and restated at and as of the Effective Time to read as did the bylaws of
AH Merger Sub immediately prior to the Effective Time (except that the
name of the Surviving Corporation shall remain unchanged as of the
Effective Time).
(d) Directors and Officers. The directors and officers of AH Merger
Sub shall become the directors and officers of the Surviving Corporation
at and as of the Effective Time (retaining their respective positions and
terms of office).
(e) Conversion of StatusOne Capital Stock. At and as of the
Effective Time, each share of StatusOne Capital Stock and each Option
shall be converted into the right to receive the Merger Consideration
pursuant to the terms of Article 2 below.
(f) Conversion of Capital Stock of AH Merger Sub. At and as of the
Effective Time, each share of Common Stock, par value $.001 per share, of
AH Merger Sub shall be converted into one share of Common Stock, par value
$.001 per share, of the Surviving Corporation.
ARTICLE 2.
EXCHANGE OF STOCK OF STATUSONE
2.1 EXCHANGE OF STATUSONE SHARES IN THE MERGER AND PAYMENT OF MERGER
CONSIDERATION.
(a) At the Effective Time, by virtue of the Merger and without any
action on the part of any holder of StatusOne Capital Stock (as defined
below), (i) all of the issued and outstanding shares of the Class A Common
Stock (as defined below) and Class B Common Stock (as defined below) of
StatusOne (collectively, the "Class A/B Stock"), together with any options
or warrants to acquire any shares of Class A/B Stock (the "Options")
shall, subject to subsection (b) hereof, be canceled and converted into,
and become exchangeable for, the right to receive cash in an
2
{PAGE}
aggregate amount equal to Sixty-Five Million Dollars ($65,000,000), less
the amount of the Working Capital Shortfall (as defined below), if any, or
plus the amount of the Working Capital Excess (as defined below), if any
(the "Class A/B Merger Consideration"), plus any Contingent Earn-Out
Amount (as defined below), if any, payable pursuant to Section 2.7 hereof
and (ii) all of the issued and outstanding shares of Class C Common Stock
(as defined below) shall, subject to subsection (b) hereof, be converted
into, and become exchangeable for, the right to receive one hundred
percent (100%) of the Base Earn-Out Amount (as defined below), if any,
payable pursuant to Section 2.7 hereof (the "Class C Merger
Consideration", together with the Class A/B Merger Consideration, the
"Merger Consideration"). At the Closing, Five Million Dollars ($5,000,000)
(the "Escrow Amount") of the Class A/B Merger Consideration shall be
deposited in an escrow account (the "Escrow Account") and shall be treated
as set forth in Section 2.5.
(b) Notwithstanding the foregoing, in the event that there are any
Appraising Stockholders (as defined below), (i) the amount of cash that
would otherwise be payable to each Appraising Stockholder as Class A/B
Merger Consideration or Class C Merger Consideration, as the case may be,
shall not be paid, (ii) the aggregate amount of cash to be paid as Class
A/B Merger Consideration or Class C Merger Consideration, as the case may
be, shall be reduced by such amount of cash set forth in (i) above without
affecting the amount of cash apportioned to any other holder of StatusOne
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