**AGREEMENT AND PLAN OF MERGER****THIS AGREEMENT AND PLAN OF MERGER**, dated as of November 13, 2008 (this “**Agreement**”), isamongst ALLIANCE HEALTHCARD, INC., a Georgia corporation (the “**ALHC**”), ACCESS/ALLIANCE ACQUISITIONCORP., an Oklahoma corporation and wholly-owned special purpose subsidiary of ALHC (“**AcquisitionCorp**” and with ALHC, the “**Company**”), and ACCESS PLANS USA, INC., an Oklahoma corporation (“**AUSA**”).Collectively, ALHC, Acquisition Corp and AUSA are referred to as the “**Parties**” or individually the“**Party**.”**RECITALS**1. ALHC is the sole shareholder of Acquisition Corp.2. The Boards of Directors of ALHC, Acquisition Corp and AUSA have each determined that it isadvisable and in the best interests of the shareholders of ALHC and AUSA to cause AUSA to mergewith and into Acquisition Corp upon the terms and subject to the conditions set forth in thisAgreement (the “**Merger**”);3. In furtherance of the Merger, the Boards of Directors of ALHC and AUSA have approved theMerger of Acquisition Corp with and into AUSA in accordance with the applicable provisions of theOklahoma General Corporation Act (the “**OGCA**” or “**Oklahoma Corporation Act**”), and upon the terms andsubject to the conditions set forth in this Agreement;4. ALHC and AUSA intend, by approving resolutions authorizing this Agreement, to adopt thisAgreement and the Certificate of Merger attached to this Agreement as *Exhibit A*, as a plan ofreorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended(the “**Code**”), and the Treasury Regulations promulgated thereunder;5. The Parties intend that the Merger be accounted for as a purchase acquisition of AUSA bythe Company under the purchase method of accounting for financial reporting purposes; and6. Pursuant to the Merger, the outstanding capital stock of AUSA (“**AUSA Shares**”) will beconverted into the right to receive the Merger Consideration (as defined in Section 1.6.1), uponthe terms and subject to the conditions set forth in this Agreement;NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreementsherein contained, and intending to be legally bound hereby, the Parties agree as follows:   AGREEMENT AND PLAN OF MERGER Page 2
 
 

 
ARTICLE ITHE MERGER1.1 The Merger. (a) Effective Time. At the Effective Time (asdefined in Section 1.2), and subject to and upon the terms and conditions of this Agreement and theOklahoma Corporation Act, Acquisition Corp shall be merged with and into AUSA, the separatecorporate existence of Acquisition Corp shall cease, and AUSA shall continue as the survivingcorporation. AUSA as the surviving corporation after completion of the Merger is hereinaftersometimes referred to as the “**Surviving Corporation**.”(b) Closing. Unless this Agreement shall have been terminated and the transactionsherein contemplated shall have been abandoned pursuant to Section 7.1 and subject to thesatisfaction or waiver of the conditions set forth in Article VI, the consummation of the Mergerwill take place as promptly as practicable (and in any event within two business days) aftersatisfaction or waiver of the conditions set forth in Article VI at the offices of AUSA, 4929 RoyalLane, Suite 200, Irving, Texas 75063 (the “**Closing**”), unless another date, time or place is agreedto in writing by ALHC and AUSA (the “**Closing Date**”).1.2 Effective Time. As promptly as practicable after the satisfaction or waiver ofthe conditions set forth in Article VI, the Parties shall cause the Merger to be consummated byfiling the Certificate of Merger attached hereto as *Exhibit A*, as contemplated by the OklahomaCorporation Act (the “**Certificate of Merger**”), together with any required related certificates,with the Secretary of State of the State of Oklahoma, in such form as required by, and executed inaccordance with the relevant provisions of, the Oklahoma Corporation Act (the time of such filingbeing the “**Effective Time**”).1.3 Effect of the Merger. At the Effective Time, the effect of the Merger shall beas provided in this Agreement, the Certificate of Merger and the applicable provisions of theOklahoma Corporation Act. Without limiting the generality of the foregoing, and subject thereto,at the Effective Time all the property, rights, privileges, powers and franchises of AUSA andAcquisition Corp shall vest in the Surviving Corporation, and all debts, liabilities and duties ofAUSA and Acquisition Corp shall become the debts, liabilities and duties of the SurvivingCorporation.1.4 Certificate of Incorporation; By-Laws. (a) Certificate ofIncorporation. In all respects, the Certificate of Incorporation of AUSA, as in effectimmediately prior to the Effective Time, shall be the Certificate of Incorporation of the SurvivingCorporation until thereafter amended as provided by the Oklahoma Corporation Act and suchCertificate of Incorporation.(b) Bylaws. The Bylaws of AUSA, as in effect immediately prior to the EffectiveTime, shall be the Bylaws of the Surviving Corporation until thereafter amended as provided by theOklahoma Corporation Act, the Certificate of Incorporation of the Surviving Corporation and suchBylaws (the “**Governing Documents**”).1.5 Directors and Officers. The directors of Acquisition Corp immediately prior tothe Effective Time shall become the directors of the Surviving Corporation, each to hold office inaccordance with the Governing Documents of the Surviving Corporation, and the officers of AUSAimmediately prior to the Effective Time shall become the officers of the Surviving Corporation, ineach case until their respective successors are duly elected or appointed and qualified.Furthermore, at the Effective Time, (i) the Board of Directors of ALHC shall be comprised of sevenmembers of which AUSA shall have the right to appoint two directors to the Board of Directors inreplacement of two of the currently serving non-independent directors of its choosing, those AUSAappointed directors shall serve for terms ending no earlier than the 2010 annual shareholdersmeeting, (ii) as of the date of this Agreement, AUSA has selected J. French Hill and RussellCleveland to serve on the Board of Directors of ALHC in replacement of Robert Garces and ThomasKiser,and (iii) the resignations of Andrew A. Boemi, Kenneth S. George, Kent H. Webb, M.D. and NicolasJ.Zaffiris as members of the Board of Directors of AUSA shall become effective.   AGREEMENT AND PLAN OF MERGER Page 3
 
 

 
1.6 Effect on Capital Stock. At the Effective Time, by virtue of the Merger andwithout any further action on the part of the Parties:1.6.1 Conversion of Securities. The Certificates (as defined below) evidencingthe AUSA Shares shall be delivered to ALHC in exchange, in the aggregate, for the following numberof shares of ALHC Common Stock described below (collectively, the “**Merger Consideration**”):1.6.1.1 Conversion of Securities. (i) Subject to Section 1.6.1.6, atClosing all outstanding AUSA Shares (which shall exclude any AUSA Shares cancelled pursuantto Section 1.6.1.2) shall be converted into the right to receive in the aggregate 7,250,000shares of ALHC Common Stock. If at Closing there is no change in the number of AUSA sharesoutstanding from the number outstanding at the date of this agreement of 20,269,145, thenthis converts into the right to receive 0.35768652303 of one fully paid and non-assessableshare of ALHC Common Stock for each of the AUSA Shares, subject to the adjustment providedin paragraph (ii) below.(ii) The 7,250,000 shares of ALHC Common Stock (excluding any AUSA Shares cancelledpursuant to Section 1.6.1.2) into which the outstanding AUSA Shares shall be convertedpursuant to paragraph (i) of this Section 1.6.1.1 shall be reduced by any net directdivesture cost attributable to the divesture of the Access HealthSource, Inc., currentlyknown and referenced as the Regional Healthcare Division of AUSA on the basis of one shareof ALHC Common Stock for each two dollars ($2.00) of the Net Divesture Cost (as definedbelow). For purposes of this Agreement, “**Net Divesture Cost**” shall mean(A) the sum of the cash expenditures paid or to be incurred by AUSA and AccessHealthSource, Inc., inclusive of any amounts paid or payable by Access HealthSource, Inc. toTenet Hospitals Limited pursuant to the Compromise Settlement Agreement, Release of AllClaims and Indemnity Agreement related to Statement of Claim filed June 2, 2008, Case No. 70193Y 00353 08 (the “**Tenet Liability**”), directly associated with the sale or disposition ofAccess HealthSource, Inc. that in the aggregate exceed(B) the proceeds received by AUSA in conjunction with the sale or disposition of AccessHealthSource, Inc. (the “**Access HealthSource Divesture**”).(iii) The fraction of one share of ALHC Common Stock into which each of the AUSAShares is converted pursuant to paragraph (i) of this Section 1.6.1 (or Section 1.7.1) isreferred to herein as the “**Exchange Ratio**.” For purposes of this Section 1.6.1 and Section1.7.1, all numbers shall be rounded to the next whole share and those shares of ALHC CommonStock issued pursuant to this paragraph (iii) of this Section 1.6.1.1 shall be in additionto the number of shares of ALHC Common Stock issued pursuant to paragraph (i) of thisSection 1.6.1.1.1.6.1.2 Cancellation. Each of the AUSA Shares held in the treasury of AUSA andeach of the AUSA Shares owned by ALHC, Acquisition Corp, or any direct or indirectwholly-owned subsidiary of AUSA or ALHC immediately prior to the Effective Time shall, byvirtue of the Merger and without any action on the part of the holder thereof, cease to beoutstanding, be canceled and retired without payment of any consideration therefor and ceaseto exist.   AGREEMENT AND PLAN OF MERGER Page 4
 
 

 
1.6.1.3 Assumption of Outstanding Stock Options and Warrants. (i) Each optionoutstanding at the Effective Time to purchase shares of AUSA Common Stock (a “**Stock Option**”)granted under (A) AUSA’s 1999 Stock Option Plan and 2002 Non-Employee Stock Option Plan(the “**Company Stock Option Plans**”), or (B) any other stock plan or agreement of AUSA that byits terms is not extinguished in the Merger, and each warrant (a “**Warrant**”), all as listedin Schedule 2.2 of the AUSA Disclosure Schedule, shall be deemed assumed by ALHC and deemedto constitute an option to acquire, on the same terms and conditions *mutatis mutandis*aswere applicable under such Stock Option or Warrant prior to the Effective Time, the numberof shares of ALHC Common Stock as the holder of such Stock Option or Warrant would have beenentitled to receive pursuant to the Merger had such holder exercised such Stock Option orWarrant in full immediately prior to the Effective Time (not taking into account whether ornot such Stock Option or Warrant was in fact exercisable) at a price per share equal to (x)the aggregate exercise price for AUSA Common Stock otherwise purchasable pursuant to suchStock Option or Warrant divided by (y) the number of shares of ALHC Common Stock deemedpurchasable pursuant to such Stock Option or Warrant; provided, however, that the number of_____ shares of ALHC Common Stock that may be purchased upon exercise of any such Stock Option orWarrant shall be rounded to the next whole share of ALHC Common Stock. As soon aspracticable after the Effective Time, ALHC shall cause to be delivered to each holder of anoutstanding Stock Option or Warrant an appropriate notice in writing setting forth suchholder’s rights pursuant thereto and hereto, and such Stock Option or Warrant shall continuein effect on the same terms and conditions as provided in the applicable Company StockOption Plan or under the terms of the Warrant.(ii) ALHC shall cause to be taken all corporate action necessary to reserve forissuance a sufficient number of shares of ALHC Common Stock for delivery upon exercise ofStock Options and Warrants in accordance with this Section 1.6.1.3. As soon as practicableafter the Effective Time, ALHC shall cause the ALHC Common Stock subject to the StockOptions to be registered under the Securities Act of 1933, as amended and the rules of theSecurities and Exchange Commission (the “**SEC**”) thereunder (the “**Securities Act**”), pursuantto a registration statement on Form S-8 (or any successor or other appropriate form), andshall use its best efforts to cause the effectiveness of such registration statement (andthe current status of the prospectus or prospectuses contained therein) to be maintained forso long as the Stock Options remain outstanding.1.6.1.4 Capital Stock of Acquisition Corporation. Each share of common stock ofAcquisition Sub issued and outstanding immediately prior to the Effective Time shall be convertedinto and exchanged for one validly issued, fully paid and non-assessable share of common stock ofthe Surviving Corporation.1.6.1.5 Adjustments to Exchange Ratio. The Exchange Ratio shall be appropriatelyadjusted to reflect fully the effect of any stock split, reverse split or stock dividend (includingany dividend or distribution of securities convertible into ALHC Common Stock), with respect toALHC Common Stock having a record date after the date of this Agreement and prior to the EffectiveTime.1.6.1.6 Fractional Shares. No fractional shares of ALHC Common Stock shall be issuedunder this Section 1.6.1 in connection with the Merger, and no certificates or scrip for any suchfractional shares shall be issued. Any holder of AUSA Shares who would otherwise be entitled toreceive a fraction of a share of ALHC Common Stock (after aggregating all fractional shares of ALHCCommon Stock issuable to such holder) shall, in lieu of such fraction of a share and upon surrenderof such holder’s certificate or certificates representing AUSA Shares (“**Certificates**”) pursuant toSection 1.7, receive one full share of ALHC Common Stock.   AGREEMENT AND PLAN OF MERGER Page 5
 
 

 
1.7 Exchange of Certificates.1.7.1 Exchange Agent. ALHC shall cause to be supplied, to or for such bank or trustcompany as shall be mutually designated by AUSA and ALHC (the “Exchange Agent”), in trust for thebenefit of the holders of AUSA Common Stock, for exchange in accordance with this Section 1.7,through the Exchange Agent, certificates evidencing the shares of ALHC Common Stock into which theoutstanding AUSA Shares have been converted pursuant to Section 1.6.1 in exchange for outstandingAUSA Shares.1.7.2 Exchange Procedures. As soon as reasonably practicable after the EffectiveTime, ALHC shall instruct the Exchange Agent to mail to each holder of record of Certificates (i) aletter of transmittal (which shall specify that delivery shall be effected, and risk of loss andtitle to the Certificates shall pass, only upon proper delivery of the Certificates to the ExchangeAgent and shall be in such form and have such other provisions as ALHC may reasonably specify), and(ii) instructions to effect the surrender of the Certificates in exchange for the certificatesevidencing shares of ALHC Common Stock. Upon surrender of a Certificate for cancellation to theExchange Agent together with such letter of transmittal, duly executed, and such other customarydocuments as may be required pursuant to such instructions, the holder of such Certificate shallbe entitled to receive in exchange therefor (A) certificates evidencing that number of whole sharesof ALHC Common Stock that such holder has the right to receive in accordance with Section 1.6.1 inrespect of the AUSA Shares formerly evidenced by such Certificate and (B) any dividends or otherdistributions to which such holder is entitled pursuant to Section 1.7.3, in each case without anyinterest thereon (the “**Merger Consideration**”), and the Certificate so surrendered shall forthwithbe cancelled. In the event of a transfer of ownership of AUSA Shares that are not registered inthe transfer records of AUSA as of the Effective Time, shares of ALHC Common Stock and dividendsmay be issued and paid in accordance with this Article I to a transferee if the Certificateevidencing such AUSA Shares is presented to the Exchange Agent, accompanied by all documentsrequired to evidence and effect such transfer pursuant to this Section 1.7.2 and by evidence thatany applicable stock transfer taxes have been paid. Until so surrendered, each outstandingCertificate that, prior to the Effective Time, represented AUSA Shares (other than DissentingShares) will be deemed from and after the Effective Time, for all corporate purposes, other thanthe payment of dividends and subject to Section 1.6.1.6, to evidence the ownership of the number ofwhole shares of ALHC Common Stock into which such AUSA Shares shall have been converted pursuant tothe provisions hereof.1.7.3 Distributions With Respect to Unexchanged AUSA Shares. No dividends or otherdistributions declared or made after the Effective Time with respect to shares of ALHC Common Stockpayable to stockholders of record as of a date after the Effective Time shall be paid to the holderof any unsurrendered Certificate with respect to the shares of ALHC Common Stock they are entitledto receive pursuant to the provisions hereof until the holder of such Certificate shall surrendersuch Certificate pursuant to Section 1.7.2. Subject to applicable law, following surrender of anysuch Certificate, there shall be paid to the record holder of the certificates representing wholeshares of ALHC Common Stock issued in exchange therefor, without interest, at the time of suchsurrender, the amount of dividends or other distributions payable to shareholders of record as of adate after the Effective Time and theretofore paid with respect to such whole shares of ALHC CommonStock.   AGREEMENT AND PLAN OF MERGER Page 6
 
 

 
1.7.4 Transfers of Ownership. If any certificate for shares of ALHC Common Stock isto be issued in a name other than that in which the Certificate surrendered in exchange therefor isregistered, it will be a condition of the issuance thereof that the Certificate so surrendered willbe properly endorsed and otherwise in proper form for transfer and that the Person requesting suchexchange will have paid to ALHC or any agent designated by it any transfer or other taxes requiredby reason of the issuance of a certificate for shares of ALHC Common Stock in any name other thanthat of the registered holder of the certificate surrendered, or established to the satisfaction ofALHC or any agent designated by it that such tax has been paid or is not payable.1.7.5 No Liability. Neither ALHC and Acquisition Corp nor AUSA shall be liable toany holder of AUSA Common Stock for any Merger Consideration delivered to a public officialpursuant to any applicable abandoned property, escheat or similar law.1.7.6 Withholding Rights. ALHC or the Exchange Agent shall be entitled to deduct andwithhold from the Merger Consideration otherwise payable pursuant to this Agreement to any holderof AUSA Common Stock such amounts as ALHC or the Exchange Agent is required to deduct and withholdwith respect to the making of such payment under the Code, or any provision of state, local orforeign tax law. To the extent that amounts are so withheld by ALHC or the Exchange Agent, suchwithheld amounts shall be treated for all purposes of this Agreement as having been paid to theholder of the AUSA Shares in respect of which such deduction and withholding was made by ALHC orthe Exchange Agent.1.8 Dissenting Shares. (a) Notwithstanding any provision of this Agreement to thecontrary, any AUSA Shares issued and outstanding immediately prior to the Effective Time and heldby a holder who has demanded and perfected his demand for appraisal of his Shares in accordancewith Section 1091 of the Oklahoma Corporation Act, and as of the Effective Time has neithereffectively withdrawn nor lost his right to such appraisal (“Dissenting Shares”), shall not beconverted into or represent a right to receive the Merger Consideration pursuant to Section 1.7hereof, but the holder thereof shall be entitled to only such rights as are granted by the OklahomaCorporation Act.(b) Notwithstanding the provisions of Section 1.8(a), if any holder of AUSA Shares whodemands appraisal of his AUSA Shares under the Oklahoma Corporation Act shall effectively withdrawor lose (through failure to perfect or otherwise) his right to appraisal, then as of the EffectiveTime or the occurrence of such event, whichever occurs later, such holder’s AUSA Shares shall nolonger be Dissenting Shares and shall automatically be converted into and represent only the rightto receive the Merger Consideration as provided in Section 1.7, without interest thereon, uponsurrender of the certificate or certificates representing such AUSA Shares.(c) AUSA shall give ALHC (i) prompt notice of any written demands for appraisal or payment ofthe fair value of any AUSA Shares, withdrawals of such demands and any other instruments servedpursuant to the Oklahoma Corporation Act received by AUSA after the date hereof and (ii) theopportunity to direct all negotiations and proceedings with respect to demands for appraisal underthe Oklahoma Corporation Act. AUSA shall not voluntarily make any payment with respect to anydemands for appraisal and shall not, except with the prior written consent of ALHC, settle or offerto settle any such demands.(d) In the event any holders of AUSA Shares demand or demand and perfect their appraisalrights in accordance with Section 1091 of the Oklahoma Corporation Act, ALHC shall issue to theshareholders of ALHC of record as of the day immediately preceding the Closing Date that number ofshares of ALHC obtained by dividing (i) the aggregate sum of the costs and expenses incurred byAUSA and ALHC in conjunction with the exercise of the appraisal rights, including withoutlimitation attorneys’ fees, courts costs and appraisal fees, divided (ii) by the closing sale priceof the ALHC Common Stock on the date immediately preceding the announcement by AUSA and ALHC of theMerger. No fractional shares of ALHC Common Stock shall be issued under this Section 1.8, and nocertificates or scrip for any such fractional shares shall be issued. Any holder of ALHC Shares whowould otherwise be entitled to receive a fraction of a share of ALHC Common Stock shall, in lieuof such fraction of a share shall be issued one full share of ALHC Common Stock.   AGREEMENT AND PLAN OF MERGER Page 7
 
 

 
1.9 Stock Transfer Books. At the Effective Time, the stock transfer books of AUSAshall be closed, and there shall be no further registration of transfers of the AUSA Common Stockthereafter on the records of AUSA.1.10 No Further Ownership Rights in AUSA Common Stock. The Merger Considerationdelivered upon the surrender for exchange of AUSA Shares in accordance with the terms hereof shallbe deemed to have been issued in full satisfaction of all rights pertaining to such AUSA Shares,and there shall be no further registration of transfers on the records of the Surviving Corporationof AUSA Shares that were outstanding immediately prior to the Effective Time. If, after theEffective Time, Certificates are presented to the Surviving Corporation for any reason, they shallbe cancelled and exchanged as provided in this Article I.1.11 Lost, Stolen or Destroyed Certificates. In the event any Certificate shall havebeen lost, stolen or destroyed, the Exchange Agent shall issue in exchange for such lost, stolen ordestroyed Certificate, upon the making of an affidavit of that fact by the holder thereof, suchshares of ALHC Common Stock as may be required pursuant to Section 1.7; provided, however, thatALHC may, in its discretion and as a condition precedent to the issuance thereof, require the ownerof such lost, stolen or destroyed Certificate to deliver a bond in such sum as it may reasonablydirect as indemnity against any claim that may be made against ALHC or the Exchange Agent withrespect to the Certificate alleged to have been lost, stolen or destroyed.1.12 Tax and Accounting Consequences. It is intended by the Parties that the Mergershall (i) constitute a reorganization within the meaning of Section 368 of the Code, and (ii)subject to applicable accounting standards, qualify for accounting treatment as a purchase. TheParties hereby adopt this Agreement as a “plan of reorganization” within the meaning of Sections1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.1.13 Taking of Necessary Action; Further Action. Each ~~of~~Party shall take all suchreasonable and lawful action as may be necessary or appropriate in order to effectuate the Mergerin accordance with this Agreement as promptly as possible. If, at any time after the EffectiveTime, any such further action is necessary or desirable to carry out the purposes of this Agreementand to vest the Surviving Corporation with full right, title and possession to all assets,property, rights, privileges, powers and franchises of AUSA and Acquisition Corp, the officers anddirectors of AUSA and Acquisition Corp immediately prior to the Effective Time are fully authorizedin the name of their respective corporations or otherwise to take, and will take, all such lawfuland necessary action.1.14 Material Adverse Effect. When used in connection with AUSA or any of itssubsidiaries or ALHC or any of its subsidiaries, as the case may be, the term “**Material AdverseEffect**” shall mean any change, effect or circumstance that, individually or when taken togetherwith all other such changes, effects or circumstances that have occurred prior to the date ofdetermination of the occurrence of the Material Adverse Effect, is or is reasonably likely to bematerially adverse to the business, operations, assets (including intangible assets), condition(financial or otherwise), liabilities or results of operations of AUSA and its subsidiaries or ALHCand its subsidiaries, as the case may be, in each case taken as a whole.   AGREEMENT AND PLAN OF MERGER Page 8
 
 

 
1.15 Management Services Agreement. At Closing, ALHC and AUSA as the SurvivingCorporation shall execute the Management Services Agreement attached hereto as *Exhibit B*.1.16 Divesture of Access HealthSource, Inc. Prior to Closing, AUSA shall havedivested or disposed of its ownership in full of Access HealthSource, and all liabilities of AUSAassociated with and attributable to Access HealthSource, Inc., inclusive of the Tenet Liability,shall have been paid, or accrued, or satisfied and extinguished, to the satisfaction of ALHCwithout any further obligation of AUSA.1.17 AUSA Shareholder Approval. Prior to Closing, AUSA shall have obtained theapproval of this Agreement and the transactions contemplated in this Agreement by the holders ofnot less than a majority of the AUSA Shares.1.18 Deliveries and Exchanges. ALHC and AUSA shall, pursuant to this Agreement, makethe deliveries as follows:1.18.1 Deliveries by ALHC. ALHC shall make the following deliveries:1.18.1.1 ALHC Common Stock Delivery. At Closing, ALHC shall deliver to theExchange Agent the shares of ALHC Common Stock required pursuant to Section 1.7.1.18.1.2 Management Services Agreement. At Closing, ALHC shall countersignthe Management Services Agreement attached hereto as *Exhibit B*and deliver it to AUSA forexecution by AUSA.1.18.1.3 Good Standing Certificates. At Closing, ALHC shall deliver to AUSACertificates of Good Standing issued by the Secretary of State of each state in which ALHCand each of its Subsidiaries is organized or qualified or licensed to do business. Eachsuch certificate shall be dated no earlier than the 10th day prior to the Closing Date.1.18.1.4 License Bring-Down Certificates. At Closing, ALHC shall deliver toAUSA bring-down certificates evidencing the status of each of the Governmental Licenses (asdefined in Section 2.6) and other licenses listed on Section 3.21 of the ALHC DisclosureSchedule. Each such certificate shall be dated no earlier than the 10th day prior to theClosing Date.1.18.1.5 Certificate of Merger. At Closing, Acquisition Corp shall countersignthe Certificate of Merger attached hereto as *Exhibit A*.1.19.2 Deliveries by AUSA. At Closing, AUSA shall make the following deliveries:1.19.2.1 Management Services Agreement. At Closing, AUSA shall countersign theManagement Services Agreement attached hereto as *Exhibit B*and deliver a countersigned copyto ALHC.1.19.2.2 Good Standing Certificates. At Closing, AUSA shall deliver to ALHCCertificates of Good Standing issued by the Secretary of State of each state in which AUSAand each of its Subsidiaries is organized or qualified or licensed to do business. Eachsuch certificate shall be dated no earlier than the 10th day prior to the Closing Date.   AGREEMENT AND PLAN OF MERGER Page 9
 
 

 
1.19.2.3 License Bring-Down Certificates. At Closing, AUSA shall deliver toALHC bring-down certificates evidencing the status of each of the Governmental Licenses (asdefined in Section 2.6) and other licenses listed on Section 2.21 of the AUSA DisclosureSchedule. Each such certificate shall be dated no earlier than the 10th day prior to theClosing Date.1.19.2.4 Certificate of Merger. At Closing, AUSA shall countersign theCertificate of Merger attached hereto as *Exhibit A*and deliver the countersigned Certificateof Merger to ALHC.ARTICLE IIREPRESENTATIONS AND WARRANTIES OF AUSAAUSA represents and warrants to ALHC that the representations, warranties, statements made inthis Article II are true and correct as of the date of this Agreement and will be true and correctat Closing, except (i) as specifically set forth in the applicable sections of the disclosureschedules delivered by AUSA to ALHC (the “**AUSA Disclosure Schedule**”), (ii) as set forth in the AUSASEC Reports (as defined in Section 2.8), and (iii) for giving effect to the Access HealthSourceDivesture. Any disclosure made with reference to one or more sections of the AUSA DisclosureSchedule shall be deemed disclosed with respect to each other Section of this Agreement as to whichsuch disclosure is relevant provided that such relevance is reasonably apparent to ALHC.Disclosure of any matter in the AUSA Disclosure Schedule shall not be deemed an admission that suchmatter is material. As conditioned above, AUSA represents and warrants to ALHC the following:2.1 Corporate Organization. AUSA is a corporation duly organized, validly existingand in good standing under the laws of the State of Oklahoma. AUSA has all requisite corporatepower and authority to own, operate and lease its properties and assets as and where the same areowned, operated or leased and to conduct its business as it is now being conducted. AUSA is ingood standing and duly qualified or licensed as a foreign corporation to do business in thosejurisdictions listed in Section 2.1 of the AUSA Disclosure Schedule, such jurisdictions being theonly jurisdictions in which the location of the property and assets owned, operated or leased byAUSA or the nature of the business conducted by AUSA makes such qualification or licensingnecessary, except where the failure to be so qualified or licensed could not reasonably be expectedto have a Material Adverse Effect. AUSA has heretofore delivered to the ALHC complete and correctcopies of the Governing Documents of AUSA, as amended to and as in effect on the date of thisAgreement.2.2 Capitalization; Preemptive Rights.2.2.1 Capitalization. The authorized capital stock of AUSA consists of 100,000,000shares of AUSA Common Stock, par value $0.01 per share, and 2,000,000 shares of AUSA PreferredStock, par value $1.00 per share. As of the date of this Agreement, 20,269,145 shares of AUSACommon Stock and no shares of ALHC preferred stock are outstanding.2.2.2 Preemptive Rights. All outstanding shares of AUSA Shares are validly issued andoutstanding, fully paid and non-assessable, and there are no preemptive or similar rights inrespect of AUSA Shares. All outstanding shares of the AUSA Shares were issued in compliance withall requirements of all applicable federal and state securities laws.   AGREEMENT AND PLAN OF MERGER Page 10
 
 

 
2.3 Subsidiaries; Capitalization.2.3.1 AUSA Subsidiaries. Except for the Subsidiaries listed in Section 2.3.1 of theAUSA Disclosure Schedule (collectively the “**AUSA Subsidiaries**” or individually the “**AUSASubsidiary**”), there are no entities 10% or more of whose outstanding voting securities or otherequity interests are owned, directly or indirectly through one or more intermediaries, by AUSA.Each AUSA Subsidiary is a corporation or other entity duly organized, validly existing and in goodstanding under the laws of the jurisdiction of its organization (which jurisdiction is indicated inSection 2.3.1 of the AUSA Disclosure Schedule) and has all requisite corporate power and authorityto own, operate and lease its properties and assets as and where the same are owned, operated orleased by the AUSA Subsidiary and to conduct its business as it is now being conducted. Each AUSASubsidiary is in good standing and duly qualified or licensed as a foreign corporation or otherentity to do business in each of the jurisdictions in which the location of the property andassets owned, operated or leased by the AUSA Subsidiary or the nature of the business conducted bythe AUSA Subsidiary makes such qualification or licensing necessary, except where the failure to beso qualified or licensed could not reasonably be expected to have a Material Adverse Effect. AUSAhas heretofore delivered to ALHC complete and correct copies of the Governing Documents of the AUSASubsidiaries, in each case as amended to and as in effect on the date of this Agreement.2.3.2 Subsidiary Capitalization. Section 2.3.2 of the AUSA Disclosure Schedule setsforth the authorized capital stock of each AUSA Subsidiary, the number of outstanding shares ofeach class of such capital stock and the AUSA’s (or, in the case of Subsidiaries indirectly ownedby AUSA, a specified Subsidiary’s) ownership of each such class. AUSA or such Subsidiary has goodand valid title to all such shares free and clear of Encumbrances. All of the outstanding sharesof capital stock of each AUSA Subsidiary is validly issued, fully paid and non-assessable, andthere are no preemptive or similar rights in respect of any shares of capital stock of any AUSASubsidiary. All of the outstanding shares of each AUSA Subsidiary were issued in compliance withall requirements of all applicable federal and state securities laws. Except as set forth inSection 2.3.2 of the AUSA Disclosure Schedule, neither AUSA nor any AUSA Subsidiary owns anycapital stock of or other equity interest of any kind or nature in any Person.2.4 No Commitments to Issue Capital Stock. Except as set forth on Section 2.4 of theAUSA Disclosure Schedule, there are no outstanding options, warrants, calls, convertible securitiesor other rights, agreements, commitments or other instruments pursuant to which AUSA or AUSASubsidiary is or may become obligated to authorize, issue or transfer any capital stock of or anyother equity interest in AUSA or AUSA Subsidiary. There are no agreements or understandings ineffect between any Person by which AUSA or AUSA Subsidiary is bound with respect to the voting,transfer, disposition or registration under the Securities Act of any shares of capital stock of orany other equity interest in AUSA or any of the AUSA Subsidiaries.2.5 Authorization; Execution and Delivery. AUSA has all requisite power andauthority to execute, deliver and perform its obligations under this Agreement. The execution,delivery and performance of this Agreement by AUSA, and the consummation by AUSA of thetransactions contemplated by this Agreement have been duly authorized by all requisite action onthe part of AUSA, except approval of this Agreement by the holders of a majority of the AUSA Sharesshall be required. This Agreement has been duly executed and, subject to approval of thisAgreement and the transactions contemplated by this Agreement, by the holders of a majority of AUSAShares, delivered by AUSA and constitutes the legal, valid and binding obligation of AUSA,enforceable against such Parties in accordance with the terms of this Agreement. The Board ofDirectors of AUSA has unanimously recommended that the shareholders of AUSA adopt and approve thisAgreement and the transactions contemplated in this Agreement.   AGREEMENT AND PLAN OF MERGER Page 11
 
 

 
2.6 Governmental Approvals and Filings. No approval, authorization, consent,license, clearance or order of, declaration or notification to, or filing or registration with, anygovernmental or regulatory authority is required in order (a) to permit AUSA to consummate theMerger or perform its obligations under this Agreement or (b) to prevent the termination of, orMaterial Adverse Effect on, any material governmental right, privilege, authority, franchise,license, permit or certificate (collectively “**Governmental Licenses**”) of AUSA or any of the AUSASubsidiaries to enable AUSA or any of the AUSA Subsidiaries to own, operate and lease itsproperties and assets as and where such properties and assets are owned, leased or operated and toprovide service and carry on its business as presently provided and conducted, or to prevent anymaterial loss or disadvantage to AUSA’s and the AUSA Subsidiaries’ businesses, by reason of theMerger, except as set forth in Section 2.6 of the AUSA Disclosure Schedule.2.7 No Conflict. Subject to compliance with the Governmental Licenses described inSection 2.6 of the AUSA Disclosure Schedules and obtaining the other consents and waivers that areset forth and described in Section 2.7 of the AUSA Disclosure Schedule (the “**AUSA Consents**”),neither the execution, deliveryand performance of this Agreement by AUSA, nor the consummation by AUSA of the Merger and othertransactions contemplated in this Agreement, will (i) conflict with, or result in a breach orviolation of, any provision of the Governing Documents of AUSA, any of the AUSA Subsidiaries; (ii)conflict with, result in a breach or violation of, give rise to a default, or result in theacceleration of performance, or permit the acceleration of performance, under (whether or not afterthe giving of notice or lapse of time or both) any encumbrance, note, bond, indenture, guaranty,lease, license, agreement or other instrument, writ, injunction, order, judgment or decree to whichAUSA or any AUSA Subsidiary is a party or any of its properties or assets are subject; (iii) giverise to a declaration or imposition of any encumbrance upon any of the properties or assets of AUSAor any AUSA Subsidiary; or (iv) impair the business of AUSA or any of the AUSA Subsidiaries oradversely affect any Governmental License necessary to enable AUSA or any AUSA Subsidiary to carryon its business as presently conducted, except, in the case of clauses (ii), (iii) or (iv), for anyconflict, breach, violation, default, declaration, imposition or impairment that could notreasonably be expected to have a Material Adverse Effect.2.8 SEC Filings The AUSA Common Stock is the only class of securities of AUSAregistered under the Securities Exchange Act of 1934, as amended, and the rules and regulationspromulgated thereunder (the “Exchange Act”). To the best knowledge of the current management ofAUSA, AUSA has filed all forms, reports or other documents (the “**AUSA SEC Reports**”) required to befiled with the SEC since December 31, 2005. Those AUSA SEC Reports:(i) were prepared in accordance, and complied as of their respective dates in allmaterial respects, with the requirements of the Securities Act or the Exchange Act, as thecase may be, and(ii) did not at the time they were filed (or if amended or superseded by a filing priorto the date of this Agreement, then on the date of such filing) contain any untrue statementof a material fact or omit to state a material fact required to be stated therein ornecessary in order to make the statements therein, in the light of the circumstances underwhich they were made, not misleading.AUSA has filed with the SEC as exhibits to the AUSA SEC Reports all agreements, contracts and otherdocuments or instruments required to be filed, and such exhibits are correct and complete copies ofsuch agreements, contracts and other documents or instruments. AUSA Subsidiaries are not requiredto file any forms, reports or other documents with the SEC under the Exchange Act.   AGREEMENT AND PLAN OF MERGER Page 12
 
 

 
2.9 Financial Statements; Absence of Undisclosed Liabilities; Receivables.2.9.1 Financial Statements. AUSA has previously delivered to ALHC completeand correct copies of (i) the audited consolidated balance sheet of AUSA and the AUSA Subsidiariesat December 31, 2007, 2006 and 2005, and audited consolidated statements of income, cash flows andstockholders’ equity of AUSA and the AUSA Subsidiaries for the years then ended, audited by Hein &Associates LLP, independent certified public accountants, and (ii) unaudited consolidated balancesheet of AUSA and the AUSA Subsidiaries (the “**AUSA Balance Sheet**”) at June 30, 2008 (the “**AUSABalance Sheet Date**”) and unaudited consolidated statements of income, cash flow, and stockholders’equity of AUSA and the AUSA Subsidiaries for the six months then ended (the financial statementsdescribed in sections (i) and (ii) are collectively referred to as the “**AUSA FinancialStatements**”), all of which have been prepared from the books and records of AUSA and the AUSASubsidiaries in accordance with GAAP consistently applied and maintained throughout the periodsindicated (except as may be indicated in the notes to the AUSA Financial Statements) and fairlypresent in all material respects the consolidated financial condition of AUSA and the AUSASubsidiaries at their respective dates and the consolidated results of operations and cash flows ofAUSA and the AUSA Subsidiaries for the periods covered by the AUSA Financial Statements. Except asset forth on Section 2.9.1 of the AUSA Disclosure Schedule, the statements of income representingin part the AUSA Financial Statements do not contain any items of special or nonrecurring revenueor income or anyrevenue or income not earned in the Ordinary Course of Business, except as expressly specified inthe statements of income and related notes.2.9.2 AUSA and the AUSA Subsidiaries Liabilities. Except as and to the extentreflected or reserved against on the AUSA Balance Sheet or related notes, AUSA and the AUSASubsidiaries did not have, as of the AUSA Balance Sheet Date, any liabilities, debts or obligations(whether absolute, accrued, contingent or otherwise) of any nature that would be required as of theAUSA Balance Sheet Date to have been included on a balance sheet prepared in accordance with GAAP.Since the AUSA Balance Sheet Date, AUSA and the AUSA Subsidiaries have not incurred or suffered toexist any liabilities, debts or obligations (whether absolute, accrued, contingent or otherwise),except liabilities, debts and obligations incurred in the Ordinary Course of Business, consistentwith past practice, none of which will have a Material Adverse Effect. Except as set forth onSection 2.9.2 of the AUSA Disclosure Schedule, since the AUSA Balance Sheet Date, there has been nomaterial adverse change or changes in the business, operations, assets (including intangibleassets), condition (financial or otherwise), liabilities or results of operations of AUSA and theAUSA Subsidiaries, taken as a whole, and no event has occurred that is reasonably likely to causeany such change or changes (in the aggregate) to have a Material Adverse Effect.2.9.3 AUSA Receivables. All receivables of AUSA and the AUSA Subsidiaries (includingaccounts receivable, loans receivable and advances) that are reflected in the AUSA Balance Sheetand all receivables that have arisen after the AUSA Balance Sheet Date and prior to the Closing,have arisen or will have arisen only from *bona fide*transactions in the Ordinary Course of Businessand shall be fully collectible at the aggregate recorded amounts thereof (except to the extent ofappropriate reserves therefor established in accordance with prior practice and GAAP) and are notand will not be subject to defense, counterclaim or offset.2.10 Certain Other Financial Representations. Since the AUSA Balance Sheet Date, theaccounts payable of AUSA and the AUSA Subsidiaries have been accrued and paid in a mannerconsistent with the prior practice of AUSA and the AUSA Subsidiaries.   AGREEMENT AND PLAN OF MERGER Page 13
 
 

 
2.11 Absence of Changes. Except as disclosed in the notes to the AUSA FinancialStatements or as set forth in Section 2.11 of the AUSA Disclosure Schedule, since the AUSA BalanceSheet Date, each of AUSA and the AUSA Subsidiaries has conducted its business only in the OrdinaryCourse of Business, and AUSA has not:(i) amended or otherwise modified its Governing Documents;(ii) issued or sold or authorized for issuance or sale, or granted any options orwarrants or amended or made other agreements (other than this Agreement) of the typereferenced in Section 2.4 with respect to, any shares of its capital stock or any other ofits securities, or altered any term of any of its outstanding securities or made any changein its outstanding shares of capital stock or other ownership interests or itscapitalization, whether by reason of a reclassification, recapitalization, stock split orcombination, exchange or readjustment of shares, stock dividend or otherwise or redeemed,purchased or otherwise acquired any of its or ALHC’s capital stock or agreed to do any ofthe foregoing (whether or not legally enforceable);(iii) recorded or accrued any item of revenue, except as a result of the provision ofservices or sale of products in the Ordinary Course of Business and consistent with priorpractice;(iv) incurred any indebtedness, other than in conjunction with the insurance agentcommission advances, in conjunction with a lending transaction or entered into any lendingarrangements, entered into any lease that should be capitalized in accordance with GAAP orsubjected to any encumbrance or other restriction any of its properties, business or assetsexcept encumbrances or other restrictions that could not reasonably be expected to have aMaterial Adverse Effect;(v) discharged or satisfied any Encumbrance, or paid any obligation or liability,absolute, accrued, contingent or otherwise, whether due or to become due, other than currentliabilities shown on the AUSA Balance Sheet as of the AUSA Balance Sheet Date and currentliabilities incurred since that date in the Ordinary Course of Business and consistent withprior practice;(vi) sold, transferred, leased to others or otherwise disposed of any materialproperties or assets or purchased, leased from others or otherwise acquired any materialproperties or assets except in the Ordinary Course of Business;(vii) canceled or compromised any debt or claim or waived or released any right ofsubstantial value;(viii) terminated or received any notice of termination of any contract, lease,license or other agreement or any Governmental License, or suffered any damage, destructionor loss (whether or not covered by insurance) that could reasonably be expected to have aMaterial Adverse Effect;(ix) made any change in the rate of compensation, commission, bonus or otherremuneration payable, or paid, agreed, or promised (in writing or otherwise) to pay, provideor modify, conditionally or otherwise, any bonus, extra compensation, pension, severance orvacation pay or any other benefit or perquisite of any other kind, to any director, officer,employee, salesman or agent of AUSA except in the Ordinary Course of Business consistentwith prior practice and pursuant to or in accordance with plans disclosed in Section 2.14 ofthe AUSA Disclosure Schedule that were in effect as of the AUSA Balance Sheet Date;   AGREEMENT AND PLAN OF MERGER Page 14
 
 

 
(x) made any increase in or commitment (whether or not legally enforceable) toincrease or communicated any intention to increase any employee benefits, adopted or madeany commitment to adopt any additional employee benefit plan or made any contribution, otherthan regularly scheduled contributions, to any AUSA Plan (as defined in Section 2.14);(xi) lost the employment services of a senior manager or other employee of equal orhigher ranking;(xii) made any loan or advance to any Person other than travel and other similarroutine advances in the Ordinary Course of Business consistent with past practice, oracquired any capital stock or other securities of any other corporation or any ownershipinterest in any other business enterprise;(xiii) instituted, settled or agreed to settle any material litigation, action orproceeding before any court or governmental body relating to AUSA or its properties orassets;(xiv) entered into any transaction, contract or commitment other than in the OrdinaryCourse of Business;(xv) changed any accounting practices, policies or procedures utilized in thepreparation of the AUSA Financial Statements (including procedures with respect to revenuerecognition, payment of accounts payable or collection of accounts receivable); or(xvi) entered into any agreement or made any commitment to take any of the types ofaction described in subparagraphs (i) through (xv) of this Section 2.11.2.12 Tax Matters.2.12.1 Tax Related Definitions. For purposes of this Agreement, “**Tax**” or “**Taxes**”shall mean taxes, fees, levies, duties, tariffs, imposts and governmental impositions or charges ofany kind in the nature of (or similar to) taxes, payable to any federal, state, local or foreigntaxing authority, including (without limitation) (i) income, franchise, profits, gross receipts, *advalorem*, net worth, value added, sales, use, service, real or personal property, specialassessments, capital stock, license, payroll, withholding, employment, social security, workers’compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation,premiums, windfall profits, transfer and gains taxes, and (ii) interest, penalties, additionaltaxes and additions to tax imposed with respect thereto; and “**Tax Returns**” shall mean returns,reports, and information statements with respect to Taxes required to be filed with the InternalRevenue Service (the “**IRS**”) or any other taxing authority, domestic or foreign, including, withoutlimitation, consolidated, combined and unitary tax returns, including returns required inconnection with any AUSA Plan (as defined in Section 2.14~~.1~~).2.12.2 Tax Returns; Tax Payments. AUSA and the AUSA Subsidiaries have timely filedall United States federal income Tax Returns and all other material Tax Returns required to befiled by them. All such Tax Returns are complete and correct in all material respects (except tothe extent a reserve has been established as reflected in the AUSA Balance Sheet). Each of AUSAand the AUSA Subsidiaries have timely paid and discharged all Taxes due in connection with or withrespect to the periods or transactions covered by such Tax Returns and has paid all other Taxeswhen due, except those Taxes that are being contested in good faith by appropriate proceedings (tothe extent that any such proceedings are required), and there are no other Taxes that would be dueif asserted by a taxing authority, except with respect to which AUSA or the AUSA Subsidiary ismaintaining reserves, unless the failure to do so could not have a Material Adverse Effect. Exceptas does not involve or would not result in liability to AUSA or any of the AUSA Subsidiaries thatcould have a Material Adverse Effect, (i) there are no tax liens on any assets of AUSA or any AUSASubsidiary; (ii) neither AUSA nor any AUSA Subsidiary has granted any waiver of any statute oflimitations with respect to, or any extension of a period for the assessment of, any Tax; (iii) nounpaid (or unreserved) deficiencies for Taxes have been claimed, proposed or assessed by any taxingor other governmental authority with respect to AUSA or any AUSA Subsidiary; (iv) there are nopending or, to the knowledge of AUSA, threatened audits, investigations or claims for orrelating to any liability in respect of Taxes of AUSA or any AUSA Subsidiary; and (v) neither AUSAnor any AUSA Subsidiary has requested any extension of time within which to file any currentlyunfiled Tax Returns. The accruals and reserves for Taxes (including deferred taxes) reflected inthe AUSA Balance Sheet are in all material respects adequate to cover all Taxes accruable throughthe date thereof (including Taxes being contested) in accordance with GAAP.   AGREEMENT AND PLAN OF MERGER Page 15
 
 

 
2.12.3 Other Tax Related Matters. Other than as disclosed in Section 2.12.3 of theAUSA Disclosure Schedule and other than with respect to items the inaccuracy of which could nothave a Material Adverse Effect, each of AUSA and the AUSA Subsidiaries:(i) has not filed or been included in a combined, consolidated or unitary return (orsubstantial equivalent thereof) of any Person other than AUSA;(ii) is not liable for Taxes of any Person other than AUSA or the AUSA Subsidiaries, orcurrently under any contractual obligation to indemnify any Person with respect to Taxes, ora party to any tax sharing agreement or any other agreement providing for payments by AUSAor any of the AUSA Subsidiaries with respect to Taxes;(iii) is not a party to any joint venture, partnership or other arrangement or contractthat could be treated as a partnership for United States federal income tax purposes;(iv) is not a party to any agreement, contract, arrangement or plan that would result(taking into account the transactions contemplated by this Agreement), separately or in theaggregate, in the payment of any “excess parachute payments” within the meaning of Section280G of the Code;(v) is not a “consenting corporation” under Section 341(f) of the Code or anycorresponding provision of state, local or foreign law; and(vi) has neither made an election nor is it required to treat any of its assets asowned by another Person for federal income tax purposes or as tax-exempt bond financedproperty or tax-exempt use property within the meaning of Section 168 of the Code (or anycorresponding provision of state, local or foreign law).2.13 Employment Related Matters.2.13.1 Employees; Employment Practices. Except as set forth in Section 2.13.1 of theAUSA Disclosure Schedule:(i) Each of AUSA and the AUSA Subsidiaries has satisfactory relationships with itsemployees in all material respects.(ii) Each of AUSA and the AUSA Subsidiaries is and has been in compliance with allapplicable laws respecting employment and employment practices, terms and conditions ofemployment, and wages and hours, including any law, rule or regulation relating todiscrimination, fair labor standards and occupational health and safety, wrongful dischargeor violation of the personal rights of employees, former employees or prospective employees,and each of AUSA and the AUSA Subsidiaries is not or has not engaged in any unfair laborpractices, except to the extent a failure to so comply could not, alone or together with anyother failure, have a Material Adverse Effect.   AGREEMENT AND PLAN OF MERGER Page 16
 
 

 
(iii) No collective bargaining agreement with respect to the business of AUSA or anyof the AUSA Subsidiaries is currently in effect or being negotiated. Each of AUSA and theAUSA Subsidiaries does not have any obligation to negotiate any such collective bargainingagreement. There are no labor unions representing, purporting to represent or attempting torepresent any employee of AUSA or any of the AUSA Subsidiaries.(iv) There are no strikes, slowdowns or work stoppages pending or, to the best of theknowledge of AUSA, threatened with respect to the employees of AUSA or any of the AUSASubsidiaries, no strike, slowdown or work stoppage has occurred or, to the best of theknowledge of AUSA, has been threatened. There is no representation claim or petition orcomplaint pending before the National Labor Relations Board or any state or local laboragency and, to the best of the knowledge of AUSA, no question concerning representation hasbeen raised or threatened respecting the employees of AUSA or any of the AUSA Subsidiaries.(v) To the best of the knowledge of AUSA, no charges with respect to or relating tothe business of AUSA are pending before the Equal Employment Opportunity Commission, or anystate or local agency responsible for the prevention of unlawful employment practices, whichcould reasonably be expected to have a Material Adverse Effect.2.13.2 Governmental Contracts. Except as set forth in Section 2.13.2 of AUSADisclosure Schedule, AUSA is not a contractor or subcontractor with obligations under any federal,state or local government contract.2.13.3 No Benefit Plan Liabilities. Except as set forth in Section 2.13.3 of AUSADisclosure Schedule, neither AUSA nor any of the AUSA Subsidiaries has or could have any materialliability, whether absolute or contingent, including any obligations under any of AUSA Plansdescribed in Section 2.14, with respect to any misclassification of a Person as an independentcontractor rather than as an employee.2.13.4 Employment Contracts. Section 2.13.4 of AUSA Disclosure Schedule contains acomplete and correct list of all employment, management or other consulting agreements with anyPersons employed or retained by AUSA or any of the AUSA Subsidiaries (including independentconsultants), complete and correct copies of which have been delivered to ALHC.   AGREEMENT AND PLAN OF MERGER Page 17
 
 

 
2.14 Benefit Plans. Section 2.14 of AUSA Disclosure Schedule contains a complete andcorrect list of all employee benefit plans of which AUSA, the AUSA Subsidiaries and any of theiraffiliates are the plan sponsor and under which any one of them has a contribution obligation(“**AUSA Plans**”) under and subject to the provisions of the Employee Retirement Income Security Actof 1975, as amended and the regulations promulgated thereunder (“**ERISA”**)) and that are subject tothe ERISA. AUSA and the AUSA Subsidiaries are in substantial compliance with ERISA and theapplicable provisions of the Code and the failure to comply would not reasonably be expected tohave a Material Adverse Effect. AUSA has delivered to ALHC:(i) all documents that set forth the terms of each AUSA Plan, including (A) all plandescriptions and summary plan descriptions of AUSA Plans for which AUSA is required toprepare, file, and distribute plan descriptions and summary plan descriptions, and (B) allsummaries and descriptions furnished to participants and beneficiaries regarding AUSA Plansfor which a plan description or summary plan description is not required;(ii) all insurance policies purchased by or to provide benefits under any AUSA Plan;(iii) all contracts with third party administrators, actuaries, investment managers,consultants, and other independent contractors that relate to any AUSA Plan;(iv) all reports submitted within the four years preceding the date of this Agreementby third-party administrators, actuaries, investment managers, consultants, or otherindependent contractors with respect to any AUSA Plan;(v) all notifications to employees of their rights under ERISA Section 601 et seq. andCode Section 4980B;(vi) the Form 5500 filed in each of the most recent three plan years with respect toeach AUSA Plan, including all schedules thereto and the opinions of independent accountants;(vii~~x~~) all notices that were given by AUSA or any AUSA Plan to the IRS, the PensionBenefit Guaranty Corporation (“**PBGC**”), or any participant or beneficiary, pursuant tostatute, within the four years preceding the date of this Agreement, including notices thatare expressly mentioned elsewhere in this Section 2.14.2.15 Title to Properties. Except as set forth in Section 2.15 of AUSA DisclosureSchedule, each of AUSA and the AUSA Subsidiaries has good and indefeasible title to all of itsproperties and assets, free andclear of all Encumbrances, except liens for taxes not yet due and payable and such Encumbrances orother imperfections of title, if any, as do not materially detract from the value of or interferewith the present use of the property affected thereby or which could not reasonably be expected tohave a Material Adverse Effect, and except for any Encumbrance that secures indebtedness reflectedin AUSA Balance Sheet.2.16 Compliance with Laws; Legal Proceedings.2.16.1 Legal Compliance. Each of AUSA and the AUSA Subsidiaries is not in violationof, or in default with respect to, any applicable law, statute, regulation, ordinance, writ,injunction, order, judgment, decree or any Governmental License, including any federal state orlocal law regarding or relating to trespass or violations of privacy rights, which violation ordefault could reasonably be expected to have a Material Adverse Effect.2.16.2 Legal Proceedings. Except as set forth in Section 2.16.2 of AUSA DisclosureSchedule, there is no order, writ, injunction, judgment or decree outstanding and no legal,administrative, arbitration or other governmental proceeding or investigation pending or, to thebest of the knowledge of AUSA, threatened, and there are no claims (including unasserted claims ofwhich AUSA is aware) against or relating to AUSA or any of the AUSA Subsidiaries and theirproperties, assets or businesses. There is no legal, administrative or other governmentalproceeding or investigation pending or, to the best of the knowledge of AUSA, threatened againstAUSA, any of the AUSA Subsidiaries or any of their members, directors or officers, as such, thatrelates to the Merger or any of the transactions contemplated by this Agreement. Neither AUSA norany of the AUSA Subsidiaries has been a defendant (either originally, by counter-claim orinterpleader) in any legal proceedings that have either been filed in the past three fiscal yearsor are currently pending (except as set forth in Section 2.16.2 of AUSA Disclosure Schedule).Except as set forth in Section 2.16.2 of AUSA Disclosure Schedule, none of the legal proceedingsset forth in Section 2.16.2 of AUSA Disclosure Schedule has had or, to the best of the knowledge ofAUSA, will have a Material Adverse Effect.   AGREEMENT AND PLAN OF MERGER Page 18
 
 

 
2.17 Brokers. No broker, finder or investment advisor acted, directly orindirectly, as such for AUSA or AUSA in connection with the Merger or this Agreement, and nobroker, finder, investment advisor or other Person is entitled to any fee or other commission, orother remuneration, in respect thereof based in any way on any action, agreement, arrangement orunderstanding taken or made by or on behalf of AUSA.2.18 Intellectual Property.2.18.1 Ownership and Right to Use. Each of AUSA and the AUSA Subsidiaries owns, or islicensed or otherwise possesses legally enforceable rights to use, all patents, trademarks, tradenames, service marks, copyrights, and any applications therefor, technology, know-how, computersoftware programs or applications, and tangible or intangible proprietary information or materialthat are used in the business of AUSA and the AUSA Subsidiaries as currently conducted, except aswould not reasonably be expected to have a Material Adverse Effect.2.18.2 Transferability. Except as disclosed in Section 2.18.2 of AUSA DisclosureSchedule or as could not reasonably be expected to have a Material Adverse Effect:(i) AUSA is not and will not be, as a result of the execution and delivery of thisAgreement or the performance of its obligations hereunder, in violation of any licenses,sublicenses and other agreements as to which AUSA is a party and pursuant to which AUSA isauthorized to use any patents, trademarks, service marks or copyrights owned by others(“**AUSA Third-Party Intellectual Property Rights**”);(ii) No claims with respect to the patents, registered and material unregisteredtrademarks and service marks, registered copyrights, trade names and any applicationstherefor owned by AUSA or any of the AUSA Subsidiaries (the “**AUSA Intellectual PropertyRights**”), any trade secret material to AUSA or any of the AUSA Subsidiaries, or AUSA ThirdParty Intellectual Property Rights to the extent arising out of any use, reproduction ordistribution of AUSA Third Party Intellectual Property Rights by or through AUSA or any ofthe AUSA Subsidiaries, are currently pending or, to the best of the knowledge of AUSA, havebeen threatened by any Person; or(iii) AUSA does not know of any valid grounds for any *bona fide*claims (1) to theeffect that the sale, licensing or use of any product or service as now sold, licensed orused, or proposed for sale, license or use by AUSA or any of the AUSA Subsidiaries infringeson any copyright, patent, trademark, service mark or trade secret; (2) against the use byAUSA or any of the AUSA Subsidiaries of any trademarks, trade names, trade secrets,copyrights, patents, technology, know-how or computer software programs and applicationsused in the business of AUSA or any of the AUSA Subsidiaries as currently conducted or asproposed to be conducted; (3) challenging the ownership, validity or effectiveness of any ofAUSA Intellectual Property Rights or other trade secret material to AUSA or any of the AUSASubsidiaries; or (4) challenging the license or legally enforceable right to use of AUSAThird Party Intellectual Rights by AUSA or any of the AUSA Subsidiaries.   AGREEMENT AND PLAN OF MERGER Page 19
 
 

 
2.18.3 No Infringement. To the best of the knowledge of AUSA, there is no materialunauthorized use, infringement or misappropriation of any of AUSA Intellectual Property Rights byany Person, including any employee or former employee of AUSA or any of the AUSA Subsidiaries.2.19 Insurance. Except as set forth in Section 2.19 of AUSA Disclosure Schedule, allmaterial fire and casualty, general liability, business interruption, product liability and otherinsurance policies maintained by AUSA or any AUSA Subsidiary are with reputable insurers, provideadequate coverage for all normal risks incident to the assets, properties and business operationsof AUSA and any AUSA Subsidiary and are in character and amount at least equivalent to that carriedby Persons engaged in a business subject to the same or similar perils or hazards.2.20 Contracts; etc. Set forth on Section 2.20 of AUSA Disclosure Schedule is acomplete and correct list of each of the following agreements, leases and other instruments, bothoral and written, to which AUSA or any of its Subsidiaries is a party or by which AUSA or any ofthe AUSA Subsidiaries or its properties or assets are bound:(i) Each service or other similar type of agreement under which services are providedby any other Person to AUSA or any of the AUSA Subsidiaries that is material to the businessof AUSA and the AUSA Subsidiaries taken as a whole;(ii) Each agreement that restricts the operation of the business of AUSA or any of itsSubsidiaries or the ability of AUSA or any of the AUSA Subsidiaries to solicit customers oremployees;(iii) Each operating lease (as lessor, lessee, sublessor or sublessee) that ismaterial to AUSA or any of the AUSA Subsidiaries of any real or tangible personal propertyor assets;(iv) Each agreement under which services are provided by AUSA or any of the AUSASubsidiaries to any material customer;(v) Each agreement (including capital leases) under which any money has been or may beborrowed or loaned or any note, bond, indenture or other evidence of indebtedness has beenissued or assumed (other than those under which there remain no ongoing obligations of AUSAor any of the AUSA Subsidiaries ), and each guaranty of any evidence of indebtedness orother obligation, or of the net worth, of any Person (other than endorsements for thepurpose of collection in the Ordinary Course of Business);(vi) Each partnership, joint venture or similar agreement;(vii) Each agreement containing restrictions with respect to the payment of dividendsor other distributions in respect of AUSA Shares;(viii) Each agreement to make unpaid capital expenditures in excess of $25,000;(ix) Each agreement providing for accelerated or special payments as a result of theMerger, including any shareholder rights plan or other instrument commonly referred as a“poison pill.”   AGREEMENT AND PLAN OF MERGER Page 20
 
 

 
A complete and correct copy of each written agreement, lease or other type of document, and a true,complete and correct summary of each oral agreement, lease or other type of document, required tobe disclosed pursuant to subparagraphs (i) through (ix) of this Section 2.20 has been previouslydelivered to ALHC. Furthermore, each agreement, lease or other type of document required to bedisclosed pursuant to Sections 2.13 or 2.14 or this Section 2.20 to which AUSA or any of the AUSASubsidiaries is a party or by which AUSA or any of the AUSA Subsidiaries or its properties orassets are bound (collectively, the “**AUSA Contracts**”), except those AUSA Contracts the loss ofwhich could reasonably be expected to not have a Material Adverse Effect, is valid, binding and infull force and effect and is enforceable by AUSA or AUSA Subsidiary in accordance with its terms.Each of AUSA and the AUSA Subsidiaries is not (with or without the lapse of time or the giving ofnotice, or both) in breach of or in default under any of AUSA Contracts, and, to the best of theknowledge of AUSA, no other party to any of AUSA Contracts is (with or without the lapse of time orthe giving of notice, or both) in breach of or in default under any of AUSA Contracts, where suchbreach or default could reasonably be expected to have a Material Adverse Effect. To the knowledgeof AUSA, neither AUSA nor any of the AUSA Subsidiaries has received notice, written or oral, of orany threatened termination by any third party to any of AUSA Contracts or become aware of anyintend of a third party to any AUSA Contracts not to renew or, if currently being rebid, re-awardany of AUSA Contracts. No existing or completed agreement to which AUSA or any of the AUSASubsidiaries is a party is subject to renegotiation with any governmental body.2.21 Permits, Authorizations, etc. Section 2.21 of AUSA Disclosure Schedule setsforth all Governmental Licenses and each other material approval, authorization, consent, license,certificate, order or other permit of any governmental agencies, whether federal, state, local orforeign, necessary to enable AUSA or any of the AUSA Subsidiaries to own, operate and lease itsproperties and assets as and where such properties and assets are owned, leased or operated and toprovide service and carry on its business as presently provided and conducted (collectively, the“**AUSA Permits**”) or required to permit the continued conduct of such business following the Mergerin the manner conducted on the date of this Agreement (indicating in each case whether or not theconsent of any Person is required for the consummation of the transactions contemplated hereby).AUSA and the AUSA Subsidiaries have all necessary AUSA Permits of all governmental agencies,whether federal, state, local or foreign, all of which are valid and in good standing with theissuing agencies and not subject to any proceedings for suspension, modification or revocation,except for such AUSA Permits that could not reasonably be expected to have a Material AdverseEffect.2.22 Environmental Matters. Each of AUSA and the AUSA Subsidiaries does not engagein any activities that give rise to any kind of release of hazardous substances into theenvironment and that couldreasonably be expected to have a Material Adverse Effect. To the knowledge of AUSA, AUSA and theAUSA Subsidiaries are in compliance with all federal, state or local law (including common law),statute, ordinance, rule, regulation, code, or other requirement relating to the environment,natural resources, or public or employee health and safety except for such failure to be incompliance that could not reasonably be expected to have Material Adverse Effect.2.23 AUSA Acquisitions. Section 2.23 of AUSA Disclosure Schedule contains a completeand correct list of all agreements (“**AUSA Acquisition Agreements**”) executed by AUSA or any of theAUSA Subsidiaries pursuant to which AUSA or any of the AUSA Subsidiaries has acquired or agreed toacquire all or any part of the stock or assets (including any customer list) of any Person sinceJanuary 1, 2008. A complete and correct copy of each of AUSA Acquisition Agreements has beendelivered by AUSA to ALHC. Neither AUSA nor any of the AUSA Subsidiaries has any furtherobligation or liability under any of AUSA Acquisition Agreements or as a result of the Merger andother transactions contemplated in this Agreement, except as described in reasonable detail inSection 2.23 of AUSA Disclosure Schedule.2.24 Books and Records. All accounts, books, ledgers and official and other recordsprepared and kept by AUSA and the AUSA Subsidiaries have been kept and completed properly in allmaterial respects, and there are no material inaccuracies or discrepancies contained or reflectedtherein. Such records of AUSA and the AUSA Subsidiaries are located at their offices in Irvine,Texas.   AGREEMENT AND PLAN OF MERGER Page 21
 
 

 
2.25 Bank Accounts and Powers of Attorney. Section 2.25 of AUSA Disclosure Schedulesets forth the name of each bank in which AUSA or any of the AUSA Subsidiaries has an account, lockbox or safe deposit box, the number of each such account, lock box or safe deposit box and thenames of the Persons authorized to draw thereon or have access thereto. Except as set forth onSection 2.25 of AUSA Disclosure Schedule, no Person holds any power of attorney from AUSA.2.26 Certain Payments. Neither AUSA and any of the AUSA Subsidiaries nor any oftheir directors, officers, agents, or employees and, to the knowledge of AUSA, any other Personassociated with or acting for or on any of their behaves, has directly or indirectly(i) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback orother payment to any Person, private or public, regardless of form, whether in money,property, or services (a) to obtain favorable treatment in securing business,(b) to pay for favorable treatment for business secured,(c) to obtain special concessions or for special concessions already obtained, for orin respect of AUSA or any of the AUSA Subsidiaries or any of their affiliates, or(d) in violation of any legal requirement, or (ii) established or maintained any fundor asset that has not been recorded in the books and records of AUSA or any of the AUSASubsidiaries.2.27 Customers; Customer Relationships. Section 2.27 of AUSA Disclosure Schedulesets forth a complete list of the five largest clients and customers of AUSA or the AUSASubsidiaries on a combined basis for the six months ended on AUSA Balance Sheet Date and the yearended December 31, 2007. To the knowledge of AUSA, there are no facts or circumstances that arelikely to result in the loss of any such client or customer of AUSA or any of the AUSA Subsidiariesor a material change in the relationship of AUSA or any of the AUSA Subsidiaries with any suchclient or customer, other than in the Ordinary Course of Business~~or as a result of the ForesightDivesture~~.2.28 Accuracy of Representations, Warranties and Covenants. No representation,covenant or warranty by AUSA in this Agreement and, to the actual acknowledge of AUSA, no writteninformation, agreements or documents furnished to ALHC by AUSA in connection with the Merger andthe other transactions contemplated in this Agreement, contain or will contain any untrue statementof a material fact or omits or will omit to contain a material fact necessary in order to make thestatement or information contained in this Agreement or in any such information, agreements ordocuments, in light of the circumstances under which statement or omission was made, notmisleading.2.29 ALHC Registration Statement. The information supplied by AUSA with respect toAUSA and the AUSA Subsidiaries and their respective officers, directors, AUSA and other Affiliates(collectively, the “**AUSA Information**”) supplied by AUSA for inclusion in the Registration Statementon Form S-4 (or on such other form as shall be appropriate) (the “Registration Statement”) and theinformation statement/prospectus (such information statement/prospectus as amended or supplementedis referred to herein as the “**Information Statement/Prospectus**”) to be sent to the shareholders ofAUSA in connection with consent of the holders of a majority of the AUSA Shares approving theMerger (the “**AUSA Stockholder Consent**”) will not, on the date the Information Statement/Prospectus(or any amendment thereof or supplement thereto) is first mailed to the shareholders of AUSA or atthe time of the AUSA Stockholder Consent, contain any statement which, at such time and in light ofthe circumstances under which it shall be made, is false or misleading with respect to any materialfact, or shall omit to state any material fact necessary in order to make the statements madetherein, in light of the circumstances under which it shall be omitted, not false or misleading; oromit to state any material fact necessary to correct any statement in any earlier communicationwith respect to the solicitation of proxies for the AUSA Stockholder Consent that has become falseor misleading. If at any time prior to the Effective Time any event relating to AUSA, any of theAUSA Subsidiaries or any of their officers, directors, AUSA or other Affiliates should bediscovered by AUSA that should be set forth in an amendment to the InformationStatement/Prospectus, AUSA shall promptly inform ALHC. The Information Statement/Prospectus shallcomply in all material respects with the requirements of the Exchange Act and Securities Act.Notwithstanding the foregoing, AUSA makes no representation or warranty with respect to anyinformation supplied by ALHC that is contained or incorporated by reference in, or furnished inconnection with the preparation of, the Information Statement/Prospectus.   AGREEMENT AND PLAN OF MERGER Page 22
 
 

 
2.30 Intercompany Transactions. Schedule 2.30 of AUSA Disclosure Schedule setsforth, (i) an accurate description of all transactions or series of related transactions betweeneach of AUSA and any of its officers, directors or other Affiliates, on the one hand, and each ofAUSA and the AUSA Subsidiaries, on the other hand, since January 1, 2008, (ii) a complete andaccurate list of all payments and advances made to officers, directors, members and managers ofeach of AUSA, and the AUSA Subsidiaries, since January 1, 2008, and (iii) a complete and accuratelist of any direct or indirect liabilities owed to AUSA or any of the AUSA Subsidiaries or eachofficer, director, manager, member of AUSA and any of the AUSA Subsidiaries.ARTICLE IIIREPRESENTATIONS AND WARRANTIES OF ALHCALHC represents and warrants to AUSA that the representations, warranties, statements made inthis Article III are true and correct as of the date of this Agreement and will be true and correctat Closing, except (i) as specifically set forth in the applicable sections of the disclosureschedules delivered by ALHC to AUSA (the “**ALHC Disclosure Schedule**”) and (ii) as set forth in theALHC SEC Reports (as defined in Section 3.8). Any disclosure made with reference to one or moresections of the ALHC Disclosure Schedule shall be deemed disclosed with respect to each otherSection of this Agreement as to which such disclosure is relevant provided that such relevance isreasonably apparent to AUSA. Disclosure of any matter in the ALHC Disclosure Schedule shall not bedeemed an admission that such matter is material. As conditioned, ALHC represents and warrants toAUSA the following:3.1 Corporate Organization. ALHC and each of its Subsidiaries listed on Section 3.3of the ALHC Disclosure Schedule (the “**ALHC Subsidiaries**”) is a corporation or other entity dulyorganized, validly existing and in good standing under the laws of the state of its organizationand has all requisite power and authority to own, operate and lease its properties and assets asand where the same are owned, operated or leased and to conduct its business as it is now beingconducted. ALHC and each of the ALHC Subsidiaries is in good standing and duly qualified orlicensed as a foreign corporation or other entity to do business in those jurisdictions in whichthe location of the property and assets owned, operated or leased by ALHC and each of the ALHCSubsidiaries or the nature of the business conducted by ALHC and each of the ALHC Subsidiariesmakes such qualification or licensing necessary, except where the failure to be so qualified orlicensed could not reasonably be expected to have a Material Adverse Effect. ALHC has heretoforedelivered to AUSA complete and correct copies of the Governing Documents of ALHC, as amended to andas in effect on the date hereof.   AGREEMENT AND PLAN OF MERGER Page 23
 
 

 
3.2 Capitalization; Preemptive Rights.3.2.1 ALHC Capitalization. The authorized capital stock of ALHC consists of100,000,000 shares of ALHC Common Stock, par value $0.001 per share. As of the date of thisAgreement, ~~[~~14,833,127~~]~~ shares of ALHC Common Stock were outstanding.3.2.2 No Assessment, Preemptive Rights. All outstanding shares of ALHC Common Stockare validly issued and outstanding, fully paid and non-assessable and there are no preemptive orsimilar rights in respect of ALHC Common Stock. All outstanding shares of ALHC Common Stock wereissued in compliance with all requirements of all applicable federal and state securities laws.3.2.3 Obligations to Issued Common Stock. Section 3.2 of the ALHC Disclosure Schedulesets forth a complete and correct list of (a) all stock options, including stock options grantedunder any ALHC stock option plan, (b) all warrants to purchase ALHC Common Stock, and (c) and otherrights to receive ALHC Common Stock indicating as to each holder thereof, the number of shares ofALHC Common Stock subject thereto and the exercisability, exercise price and expiration andtermination date therefor, if applicable.3.3 Subsidiaries of ALHC.3.3.1 ALHC Subsidiaries. Except as listed on Section 3.3 of the ALHC DisclosureSchedule, ALHC does not have any subsidiaries.3.3.2 Subsidiary Ownership. Except as set forth in Section 3.3.2 of the ALHCDisclosure Schedule, ALHC and each of the ALHC Subsidiaries has good and valid title to all sharesof its subsidiaries free and clear of all Encumbrances. All of the outstanding shares of capitalstock of the ALHC Subsidiaries are validly issued, fully paid and non-assessable, and there are nopreemptive or similar rights in respect of any shares of capital stock of the ALHC Subsidiaries.3.4 No Commitments to Issue Capital Stock. Except for the stock options, thewarrants and contract rights set forth in Section 3.4 of the ALHC Disclosure Schedule, there are nooutstanding options, warrants, calls, convertible securities or other rights, agreements,commitments or other instruments pursuant to which the ALHC or any of the ALHC Subsidiaries is ormay become obligated to authorize, issue or transfer any shares of its capital stock or any otherequity interest. Except as set forth in Section 3.4 of the ALHC Disclosure Schedule, there are noagreements or understandings in effect among any of the stockholders of ALHC or any of the ALHCSubsidiaries or with any other Person and by which ALHC or any of the ALHC Subsidiaries is boundwith respect to the voting, transfer, disposition or registration under the Securities Act of anyshares of capital stock of the ALHC or any of its Subsidiaries.3.5 Authorization; Execution and Delivery. ALHC has all requisite corporate powerand authority to execute, deliver and perform its obligations under this Agreement. The execution,delivery and performance of this Agreement by ALHC and the consummation by ALHC of the transactionscontemplated hereby have been duly authorized by all requisite corporate action on the part ofALHC. This Agreement has been duly executed and delivered by ALHC and constitutes the legal, validand binding obligation of ALHC, enforceable against ALHC in accordance with this Agreement. Theshares of ALHC Common Stock to be issued as part of the Merger Consideration have been dulyreserved and authorized for issuance upon consummation of the Merger and, when issued pursuant toand in accordance with this Agreement, will be duly authorized, validly issued, fully paid andnon-assessable shares of ALHC Common Stock.   AGREEMENT AND PLAN OF MERGER Page 24
 
 

 
3.6 Governmental Approvals and Filings. No approval, authorization, consent,license, clearance or order of, declaration or notification to, or filing or registration with, anygovernmental or regulatory authority is required in order (i) to permit ALHC to consummate theMerger or perform its obligations under this Agreement or (ii) to prevent the termination of, orMaterial Adverse Effect on, any Governmental License of ALHC or any of the ALHC Subsidiaries toenable ALHC and the ALHC Subsidiaries to own, operate and lease their properties and assets as andwhere such properties and assets are owned, leased or operated and to provide its services or carryon its business, or to prevent any material loss or disadvantage to ALHC’s business, by reason ofthe Merger, except as set forth in Section 3.6 of the ALHC Disclosure Schedule.3.7 No Conflict. Subject to compliance with any Governmental Licenses described inSection 3.7 of the ALHC Disclosure Schedule and obtaining the Private Consents, neither theexecution, delivery and performance of this Agreement by ALHC, nor the consummation by ALHC of theMerger and other transactions contemplated by this Agreement, will (i) conflict with, or result ina breach or violation of, any provision of the Governing Documents of ALHC; (ii) conflict with,result in a breach or violation of, give rise to a default, or result in the acceleration ofperformance, or permit the acceleration or performance, under (whether or not after the giving ofnotice or lapse of time or both) any encumbrance, note, bond, indenture, guaranty, lease, license,agreement or other instrument, writ, injunction, order, judgment or decree to which ALHC or any ofits properties or assets is subject; (iii) give rise to a declaration or imposition of anyencumbrance upon any of the properties or assets of ALHC; or (iv) impair business of ALHC oradversely affect any Governmental License necessary to enable ALHC to carry on its business aspresently conducted, except, in the cases of clauses (ii), (iii) or (iv), for any conflict, breach,violation, default, declaration, imposition or impairment that could not reasonably be expected tohave a Material Adverse Effect.3.8 SEC Filings. The ALHC Common Stock is the only class or securities of ALHCregistered under the Exchange Act. To the best knowledge of the current management of ALHC, ALHChas filed all forms, reports or other documents (the “**ALHC SEC Reports**”) required to be filed withthe SEC since September 30, 2005. The ALHC SEC Reports(i) were prepared in accordance, and complied as of their respective dates in allmaterial respects, with the requirements of the Securities Act or the Exchange Act, as thecase may be, and(ii) did not at the time they were filed (or if amended or superseded by a filing priorto the date of this Agreement, then on the date of such filing) contain any untrue statementof a material fact or omit to state a material fact required to be stated therein ornecessary in order to make the statements therein, in the light of the circumstances underwhich they were made, not misleading.ALHC has filed with the SEC as exhibits to the ALHC SEC Reports all agreements, contracts and otherdocuments or instruments required to be filed, and such exhibits are correct and complete copies ofsuch agreements, contracts and other documents or instruments. ALHC Subsidiaries are not requiredto file any forms, reports or other documents with the SEC under the Exchange Act.   AGREEMENT AND PLAN OF MERGER Page 25
 
 

 
3.9 Financial Statements; Absence of Undisclosed Liabilities.3.9.1 ALHC Financial Statements. ALHC has previously delivered to AUSA complete andcorrect copies of (i) the audited consolidated balance sheet of ALHC at September 30, 2007 andaudited consolidated statements of income, cash flows and stockholders’ equity of ALHC for the yearthen ended, audited by Murrell, Hall, McIntosh & Co. PLLP of Oklahoma City, Oklahoma, and (ii)unaudited consolidated balance sheet of ALHC (the “**ALHC Balance Sheet**”) at June 30, 2008 (the “**ALHCBalance Sheet Date**”) and unaudited consolidated statements of income, cash flow, and stockholders’equity of AUSA for the nine months then ended (the financial statements described in sections (i)and (ii) are collectively referred to as the “**ALHC Financial Statements**”), all of which have beenprepared from the books and records of ALHC in accordance with GAAP consistently applied andmaintained throughout the periods indicated (except as may be indicated in the notes thereto) andfairly present in all material respects the financial condition of ALHC at their respective datesand the results of the ~~ALHC’~~ALHC’s operations and cash flows for the periods covered thereby. Suchstatements of income do not contain any items of special or nonrecurring revenue or income or anyrevenue or income not earned in the Ordinary Course of Business, except as expressly specifiedtherein.3.9.2 No Undisclosed Liabilities. Except as and to the extent reflected or reservedagainst on the ALHC Balance Sheet, and except for liabilities that will not have a Material AdverseEffect, ALHC did not have, as of the ALHC Balance Sheet Date, any liabilities, debts or obligations(whether absolute, accrued, contingent or otherwise) of any nature that would be required as ofsuch date to have been included on a balance sheet prepared in accordance with GAAP. Since theALHC Balance Sheet Date, ALHC has not incurred or suffered to exist any liability, debt orobligation (whether absolute, accrued, contingent or otherwise), except liabilities, debts andobligations incurred in the Ordinary Course of Business, consistent with past practice, none ofwhich will have a Material Adverse Effect or incurred in connection with this Agreement and thetransactions contemplated herein. Other than the transactions contemplated by this Agreement, andas disclosed in Section 3.26 of the ALHC Disclosure Schedule, since the ALHC Balance Sheet Date,there has been no material adverse change in the business, operations, assets (including intangibleassets), condition (financial or otherwise), liabilities or results of operations of ALHC and itsSubsidiaries, taken as a whole, and no event has occurred which is reasonably likely to cause anysuch material adverse change.3.9.3 ALHC Receivables. All receivables of ALHC and the ALHC Subsidiaries (includingaccounts receivable, loans receivable and advances) that are reflected in the ALHC Balance Sheetand all receivables that have arisen after the ALHC Balance Sheet Date and prior to the Closing,have arisen or will have arisen only from *bona fide*transactions in the Ordinary Course of Businessand shall be fully collectible at the aggregate recorded amounts thereof (except to the extent ofappropriate reserves therefor established in accordance with prior practice and GAAP) and are notand will not be subject to defense, counterclaim or offset.3.10 Certain Other Financial Representations. Since the ALHC Balance Sheet Date,ALHC’s accounts payable have been accrued and paid in a manner consistent with the prior practicesof ALHC.3.11 Absence of Changes. Except as disclosed in the ALHC Financial Statements or asset forth in Section 3.11 of the ALHC Disclosure Schedule, since the ALHC Balance Sheet Date, ALHCand ALHC Subsidiaries have conducted their business only in the Ordinary Course of Business andALHC has not:(i) amended or otherwise modified its Governing Documents;(ii) issued or sold or authorized for issuance or sale, or granted any options orwarrants or amended or modified in any respect any previously granted option or warrant ormade other agreements (other than this Agreement) of the type referred to in Section 3.4with respect to, any shares of its capital stock or any other of its securities, or alteredany term of any of its outstanding securities or made any change in its outstanding sharesof capital stock or other ownership interests or its capitalization, whether by reason of areclassification, recapitalization, stock split or combination, exchange or readjustment ofshares, stock dividend or otherwise or redeemed, purchased or otherwise acquired any of itsor AUSA’s capital stock or agreed to do any of the foregoing (whether or not legallyenforceable);   AGREEMENT AND PLAN OF MERGER Page 26
 
 

 
(iii) recorded or accrued any item of revenue, except as a result of the provision ofservices in the Ordinary Course of Business and consistent with prior practice;(iv) incurred any indebtedness for borrowed money, entered into any lease that shouldbe capitalized in accordance with GAAP or subjected to any encumbrance or other restrictionany of its properties, business or assets except encumbrances or other restrictions thatcould not reasonably be expected to have a Material Adverse Effect;(v) discharged or satisfied any encumbrance, or paid any obligation or liability,absolute, accrued, contingent or otherwise, whether due or to become due, other than currentliabilities shown on ALHC Balance Sheet as of the ALHC Balance Sheet Date and currentliabilities incurred since that date in the Ordinary Course of Business and consistent withprior practice;(vi) sold, transferred, leased to others or otherwise disposed of any materialproperties or assets or purchased, leased from others or otherwise acquired any materialproperties or assets except in the Ordinary Course of Business;(vii) canceled or compromised any debt or claim or waived or released any right ofsubstantial value;(viii) terminated or received any notice of termination of any contract, lease,license or other agreement or any Governmental License, or suffered any damage, destructionor loss (whether or not covered by insurance) that could reasonably be expected to have aMaterial Adverse Effect;(ix) made any change in the rate of compensation, commission, bonus or otherremuneration payable, or paid, agreed, or promised (in writing or otherwise) to pay, provideor modify, conditionally or otherwise, any bonus, extra compensation, pension, severance orvacation pay or any other benefit or perquisite of any other kind, to any director, officer,employee, salesman or agent of ALHC or any of the ALHC Subsidiaries, except in the OrdinaryCourse of Business consistent with prior practice and pursuant to or in accordance withplans disclosed in Section 3.11(a) of the ALHC Disclosure Schedule that were in effect as ofthe ALHC Balance Sheet Date;(x) made any increase in or commitment (whether or not legally enforceable) toincrease or communicated any intention to increase any employee benefits, adopted or madeany commitment to adopt any additional employee benefit plan or made any contribution, otherthan regularly scheduled contributions, to any ALHC Plan (as defined in Section 3.14~~.1~~);(xi) lost the employment services of a senior manager or other employee of equal orhigher ranking;(xii) made any loan or advance to any Person other than travel and other similarroutine advances in the Ordinary Course of Business consistent with past practice, oracquired any capital stock or other securities of any other corporation or any ownershipinterest in any other business enterprise;   AGREEMENT AND PLAN OF MERGER Page 27
 
 

 
(xiii) instituted, settled or agreed to settle any material litigation, action orproceeding before any court or governmental body relating to ALHC or its properties orassets;(xiv) entered into any transaction, contract or commitment other than in the OrdinaryCourse of Business;(xv) changed any accounting practices, policies or procedures utilized in thepreparation of ALHC Financial Statements (including procedures with respect to revenuerecognition, payment of accounts payable or collection of accounts receivable); or(xvi) entered into any agreement or made any commitment to take any of the types ofaction described in subparagraphs (i) through (xv) of this Section 3.11.3.12 Tax Matters.3.12.1 Tax Returns; Tax Payments. ALHC represents that, other than as disclosed inSection 3.12.1 of the ALHC Disclosure Schedule, ALHC has timely filed all United States federalincome Tax Returns and all other material Tax Returns required to be filed by it. All such TaxReturns are complete and correct in all material respects (except to the extent a reserve has beenestablished as reflected in the ALHC Balance Sheet). ALHC has timely paid and discharged all Taxesdue in connection with or with respect to the periods or transactions covered by such Tax Returnsand has paid all other Taxes as are due, except such as are being contested in good faith byappropriate proceedings (to the extent that any such proceedings are required), and there are noother Taxes that would be due if asserted by a taxing authority, except with respect to which ALHCis maintaining reserves unless the failure to do so could not have a Material Adverse Effect.Except as does not involve or would not result in liability to ALHC that could have a MaterialAdverse Effect,(i) there are no tax liens on any assets of ALHC or the ALHC Subsidiaries;(ii) ALHC has not granted any waiver of any statute of limitations with respect to, orany extension of a period for the assessment of, any Tax;(iii) no unpaid (or unreserved) deficiencies for Taxes have been claimed, proposed orassessed by any taxing or other governmental authority with respect to ALHC and the ALHCSubsidiaries;(iv) there are no pending or, to the knowledge of ALHC, threatened audits,investigations or claims for or relating to any liability in respect of Taxes of ALHC andthe ALHC Subsidiaries; and(v) ALHC has not requested any extension of time within which to file any currentlyunfiled Tax Returns.The accruals and reserves for Taxes (including deferred taxes) reflected in the ALHC BalanceSheet are in all material respects adequate to cover all Taxes accruable through the date thereof(including Taxes being contested) in accordance with GAAP.   AGREEMENT AND PLAN OF MERGER Page 28
 
 

 
3.12.2 Other Related Tax Matters. ALHC represents that, other than as disclosed inSection 3.12.2 of the ALHC Disclosure Schedule and other than with respect to items the inaccuracyof which could not have a Material Adverse Effect:(i) ALHC has not filed or been included in a combined, consolidated or unitary return(or substantial equivalent thereof) of any Person other than ALHC;(ii) ALHC is not liable for Taxes of any Person other than ALHC, or currently under anycontractual obligation to indemnify any Person with respect to Taxes, or a party to any taxsharing agreement or any other agreement providing for payments by ALHC with respect toTaxes;(iii) ALHC is not a party to any joint venture, partnership or other arrangement orcontract which could be treated as a partnership for United States federal income taxpurposes;(iv) ALHC is not a party to any agreement, contract, arrangement or plan that wouldresult (taking into account the transactions contemplated by this Agreement), separately orin the aggregate, in the payment of any “excess parachute payments” within the meaning ofSection 280G of the Code;(v) Each of ALHC and the ALHC Subsidiaries is not a “consenting corporation” underSection 341(f) of the Code or any corresponding provision of state, local or foreign law;and(vi) Each of ALHC and the ALHC Subsidiaries has not made an election nor is it requiredto treat any of its assets as owned by another Person for federal income tax purposes or astax-exempt bond financed property or tax-exempt use property within the meaning of Section168 of the Code (or any corresponding provision of state, local or foreign law).3.13 Employee Related Matters.3.13.1 Employees; Employment Practices. Except as set forth in Section 3.13.1 of theALHC Disclosure Schedule:(i) ALHC and the ALHC Subsidiaries have satisfactory relationships in all materialrespects with their employees.(ii) Each of ALHC and the ALHC Subsidiaries is and has been in compliance with allapplicable laws respecting employment and employment practices, terms and conditions ofemployment, and wages and hours, including any law, rule or regulation relating todiscrimination, fair labor standards and occupational health and safety, wrongful dischargeor violation of the personal rights of employees, former employees or prospective employees,and each of ALHC and ALHC Subsidiaries is not or has not engaged in any unfair laborpractices, except to the extent a failure to so comply could not, alone or together with anyother failure, have a Material Adverse Effect.(iii) No collective bargaining agreement with respect to the business of ALHC and theALHC Subsidiaries are currently in effect or being negotiated. ALHC and the ALHCSubsidiaries do not have any obligation to negotiate any such collective bargainingagreement. There are no labor unions representing, purporting to represent or attempting torepresent any employee of ALHC or any of ALHC Subsidiaries.   AGREEMENT AND PLAN OF MERGER Page 29
 
 

 
(iv) There are no strikes, slowdowns or work stoppages pending or, to the best ofALHC’s knowledge, threatened with respect to the employees of ALHC or any of the ALHCSubsidiaries, nor has any such strike, slowdown or work stoppage occurred or, to the best ofALHC’s knowledge, been threatened. There is no representation claim or petition orcomplaint pending before the National Labor Relations Board or any state or local laboragency and, to the best of ALHC’s knowledge, no question concerning representation has beenraised or threatened respecting the employees of ALHC or any of the ALHC Subsidiaries.(v) To the best of ALHC’s knowledge, no charges with respect to or relating to thebusiness of ALHC and any of the ALHC Subsidiaries are pending before the Equal EmploymentOpportunity Commission, or any state or local agency responsible for the prevention ofunlawful employment practices, which could reasonably be expected to have a Material AdverseEffect.3.13.2 Governmental Contracts. Except as set forth in Section 3.13.2 of ALHCDisclosure Schedule, ALHC and the ALHC Subsidiaries is not a contractor or subcontractor withobligations under any federal, state or local government contract.3.13.3 No Benefit Plan Liabilities. Except as set forth in Section 3.13.3 of ALHCDisclosure Schedule, each of ALHC and the ALHC Subsidiaries has not or could not have any materialliability, whether absolute or contingent, including any obligations under any of the ALHC Plansdescribed in Section 3.14 of the ALHC Disclosure Schedule, with respect to any misclassification ofa Person as an independent contractor rather than as an employee.3.13.4 List of Employment Agreements. Section 3.13.4 of ALHC Disclosure Schedulecontains a complete and correct list of all executive employment agreements with any Personsemployed or retained by ALHC or any of the ALHC Subsidiaries in an executive officer capacity,complete and correct copies of which have been publicly disclosed and otherwise made available toAUSA.3.14 Benefit Plans. Section 3.14 of ALHC Disclosure Schedule contains a complete andcorrect list of all employee benefit plans of which ALHC, the ALHC Subsidiaries and any of theiraffiliates are the plan sponsor and under which any one of them has a contribution obligation(“**ALHC Plans**”) under and subject to the provisions of **ERISA**) and that are subject to the ERISA.ALHC and the ALHC Subsidiaries are in substantial compliance with ERISA and the applicableprovisions of the Code and the failure to comply would not reasonably be expected to have aMaterial Adverse Effect. AUSA has delivered to ALHC:(i) all documents that set forth the terms of each ALHC Plan, including (A) all plandescriptions and summary plan descriptions of ALHC Plans for which AUSA is required toprepare, file, and distribute plan descriptions and summary plan descriptions, and (B) allsummaries and descriptions furnished to participants and beneficiaries regarding ALHC Plansfor which a plan description or summary plan description is not required;(ii) all insurance policies purchased by or to provide benefits under any ALHC Plan;(iii) all contracts with third party administrators, actuaries, investment managers,consultants, and other independent contractors that relate to any ALHC Plan;(iv) all reports submitted within the four years preceding the date of this Agreementby third-party administrators, actuaries, investment managers, consultants, or otherindependent contractors with respect to any ALHC Plan;   AGREEMENT AND PLAN OF MERGER Page 30
 
 

 
(v) all notifications to employees of their rights under ERISA Section 601 et seq. andCode Section 4980B;(vi) the Form 5500 filed in each of the most recent three plan years with respect toeach ALHC Plan, including all schedules thereto and the opinions of independent accountants;(vii) all notices that were given by ALHC or any ALHC Plan to the IRS, the PBGC, orany participant or beneficiary, pursuant to statute, within the four years preceding thedate of this Agreement, including notices that are expressly mentioned elsewhere in thisSection 3.14.3.15 Title to Properties. Except as set forth in Section 3.15 of the ALHC DisclosureSchedule, each of ALHC and the ALHC Subsidiaries has good and indefeasible title to all of theirproperties and assets, free and clear of all encumbrances, except liens for taxes not yet due andpayable and such encumbrances or other imperfections of title, if any, as do not materially detractfrom the value of or interfere with the present use of the property affected thereby or which couldnot reasonably be expected to have a Material Adverse Effect, and except for encumbrances whichsecure indebtedness reflected in ALHC Balance Sheet.3.16 Compliance with Laws; Legal Proceedings.3.16.1 Legal Compliance. ALHC and the ALHC Subsidiaries are not in violation of, orin default with respect to, any applicable statute, regulation, ordinance, writ, injunction, order,judgment, decree or any Governmental License, including any federal state or local law regarding orrelating to trespass or violations of privacy rights, which violation or default could reasonablybe expected to have a Material Adverse Effect.3.16.2 Legal Proceedings. Except as set forth in Section 3.16.2 of the ALHCDisclosure Schedule, there is no order, writ, injunction, judgment or decree outstanding and nolegal, administrative, arbitration or other governmental proceeding or investigation pending or, tothe best of the knowledge of ALHC, threatened, and there are no claims (including unasserted claimsof which ALHC is aware) against ALHC or the ALHC Subsidiaries or any of their respectiveproperties, assets or businesses. There is no legal, administrative or other governmentalproceeding or investigation pending or, to the best of the knowledge of ALHC, threatened againstthe ALHC or the ALHC Subsidiaries or any of their directors or officers, as such, that relate tothis Agreement, the Merger or the other transactions contemplated by this Agreement.3.17 Brokers. Except as set forth in Section 3.17 of the ALHC Disclosure Schedule,n~~N~~o broker, finder or investment advisor acted directly or indirectly as such for ALHC or anyshareholder of ALHC in connection with this Agreement or the Merger, and no broker, finder,investment advisor or other Person is entitled to any fee or other commission, or otherremuneration, in respect thereof based in any way on any action, agreement, arrangement orunderstanding taken or made by or on behalf of ALHC or any shareholder of ALHC.3.18 Intellectual Property.3.18.1 Ownership and Right to Use. ALHC and the ALHC Subsidiaries own, or are licensedor otherwise possesses legally enforceable rights to use, all patents, trade names, service marks,copyrights, and any applications therefor, technology, know-how, computer software programs orapplications, and tangible or intangible proprietary information or material that are used in thebusiness of ALHC and the ALHCSubsidiaries as currently conducted, except as could not reasonably be expected to have a MaterialAdverse Effect.   AGREEMENT AND PLAN OF MERGER Page 31
 
 

 
3.18.2 Transferability. Except as disclosed in Section 3.18.2 of the ALHC DisclosureSchedule or as could not reasonably be expected to have a Material Adverse Effect:(i) ALHC and the ALHC Subsidiaries are not and will not be as a result of the executionand delivery of this Agreement or the performance of their obligations under this Agreement,in violation of any licenses, sublicenses and other agreements that ALHC or any of the ALHCSubsidiaries is a party and pursuant to which ALHC or any of its Subsidiaries is authorizedto use any patents, trademarks, service marks or copyrights owned by others (“**ALHCThird-Party Intellectual Property Rights**”);(ii) No claims with respect to the patents, registered and material unregisteredtrademarks and service marks, registered copyrights, trade names and any applicationstherefor owned by ALHC or any of the ALHC Subsidiaries (the “**ALHC Intellectual PropertyRights**”), any trade secret material to ALHC or any of the ALHC Subsidiaries, or ALHCThird-Party Intellectual Property Rights to the extent arising out of any use, reproductionor distribution of ALHC Third-Party Intellectual Property Rights by or through ALHC or anyof the ALHC Subsidiaries, are currently pending or, to the best of the knowledge of ALHC,have been threatened by any Person; or(iii) ALHC does not know of any valid grounds for any *bona fide*claims (1) to theeffect that the sale, licensing or use of any product or service as now sold, licensed orused, or proposed for sale, license or use by ALHC or any of the ALHC Subsidiaries infringeson any copyright, patent, trademark, service mark or trade secret; (2) against the use byALHC or any of the ALHC Subsidiaries of any trademarks, trade names, trade secrets,copyrights, patents, technology, know-how or computer software programs and applicationsused in the business of ALHC or any of the ALHC Subsidiaries as currently conducted or asproposed to be conducted; (3) challenging the ownership, validity or effectiveness of any ofALHC Intellectual Property Rights or other trade secret material to ALHC or any of the ALHCSubsidiaries; or (4) challenging the license or legally enforceable right to use of ALHCThird-Party Intellectual Rights by ALHC or any of the ALHC Subsidiaries.3.18.3 No Infringement. To the best of the knowledge of ALHC, there is no materialunauthorized use, infringement or misappropriation of any of ALHC Intellectual Property Rights byany third party, including any employee or former employee of ALHC or any of the ALHC Subsidiaries.3.19 Insurance. Except as set forth in Section 3.19 of the ALHC Disclosure Schedule,all material fire and casualty, general liability, business interruption, product liability andother insurance policies maintained by ALHC and the ALHC Subsidiaries are with reputable insurers,provide adequate coverage for all normal risks incident to assets, properties and businessoperations of ALHC and the ALHC Subsidiaries, and are in character and amount at least equivalentto that carried by Persons engaged in a business subject to the same or similar perils or hazards.   AGREEMENT AND PLAN OF MERGER Page 32
 
 

 
3.20 Contracts, Etc. Set forth on Section 3.20 of the ALHC Disclosure Schedule is acomplete and correct list of each of the following agreements, leases and other instruments, bothoral and written, to which ALHC or any one of the ALHC Subsidiaries is a party or by which ALHC,any one of the ALHC Subsidiaries or its properties or assets are bound:(i) each service or other similar type of agreement under which services are providedby any other Person to ALHC or any of the ALHC Subsidiaries that is material to the businessof ALHC or any of the ALHC Subsidiaries taken as a whole;(ii) each agreement that restricts the operation of the business of ALHC or any of theALHC Subsidiaries or the ability of ALHC or any one of the ALHC Subsidiaries to solicitcustomers or employees;(iii) each operating lease (as lessor, lessee, sublessor or sublessee) that ismaterial to ALHC or any of the ALHC Subsidiaries taken as a whole of any real or tangiblepersonal property or assets;(iv) each agreement under which services are provided by ALHC or any of the ALHCSubsidiaries to any material customer;(v) each agreement (including capital leases) under which any money has been or may beborrowed or loaned or any note, bond, indenture or other evidence of indebtedness has beenissued or assumed (other than those under which there remain no ongoing obligations of ALHCor any one of the ALHC Subsidiaries), and each guaranty of any evidence of indebtedness orother obligation, or of the net worth, of any Person (other than endorsements for thepurpose of collection in the Ordinary Course of Business);(vi) each partnership, joint venture or similar agreement;(vii) each agreement containing restrictions with respect to the payment of dividendsor other distributions in respect of the capital stock of ALHC or any one of the ALHCSubsidiaries;(viii) each agreement to make unpaid capital expenditures in excess of $25,000;(ix) each agreement providing for accelerated or special payments as a result of theMerger, including any shareholder rights plan or other instrument commonly referred as a“poison pill.”A complete and correct copy of each written agreement, lease or other type of document, and a true,complete and correct summary of each oral agreement, lease or other type of document, required tobe disclosed pursuant to this Section 3.20 has been made available to AUSA. Furthermore, eachagreement, lease or other type of document required to be disclosed pursuant to Sections 3.13, 3.14or 3.20 to which ALHC or any one of the ALHC Subsidiaries is a party or by which ALHC or any one ofthe ALHC Subsidiaries or its properties or assets are bound (collectively, the “**ALHC Contracts**”),except those ALHC Contracts the loss of which could reasonably be expected to not have a MaterialAdverse Effect, is valid, binding and in full force and effect and is enforceable by ALHC or anyone of the ALHC Subsidiaries in accordance with its terms. ALHC and the ALHC Subsidiaries are not(with or without the lapse of time or the giving of notice, or both) in breach of or in defaultunder any of the ALHC Contracts, and, to the best of the knowledge of ALHC, no other party to anyof the ALHC Contracts is (with or without the lapse of time or the giving of notice, or both) inbreach of or in default under any of the ALHC Contracts, where such breach or default couldreasonably be expected to have a Material Adverse Effect. To the knowledge of ALHC, neither ALHCnor any of the ALHC Subsidiaries has received notice, written or oral, of or any threatenedtermination by any third party to any of ALHC Contracts or become aware of any intend of a thirdparty to any ALHC Contracts not to renew or, if currently being rebid, re-award any of ALHCContracts. No existing or completed agreement to which ALHC or any one of the ALHC Subsidiaries isa party is subject to renegotiation with any governmental body.   AGREEMENT AND PLAN OF MERGER Page 33
 
 

 
3.21 Permits, Authorizations, Etc. Section 3.21 of the ALHC Disclosure Schedulesets forth all Governmental Licenses and each other material approval, authorization, consent,license, certificate, order or other permit of any governmental agencies, whether federal, state,local or foreign, necessary to enable ALHC and each of the ALHC Subsidiaries to own, operate andlease its properties and assets as and where such properties and assets are owned, leased oroperated and to provide service and carry on its business as presently provided and conducted(collectively, the “**ALHC Permits**”) or required to permit the continued conduct of such businessfollowing the Merger in the manner conducted on the date of this Agreement (indicating in each casewhether or not the consent of any Person is required for the consummation of the transactionscontemplated by this Agreement). ALHC and the ALHC Subsidiaries have all necessary ALHC Permits ofall governmental agencies, whether federal, state, local or foreign, all of which are valid and ingood standing with the issuing agencies and not subject to any proceedings for suspension,modification or revocation, except for such ALHC Permits which could not reasonably be expected tohave a Material Adverse Effect.3.22 Environmental Matters. Each of ALHC and the ALHC Subsidiaries does not engagein any activities that give rise to any kind of release of hazardous substances into theenvironment and that could reasonably be expected to have a Material Adverse Effect. To theknowledge of ALHC, ALHC and the ALHC Subsidiaries are in compliance with all federal, state orlocal law (including common law), statute, ordinance, rule, regulation, code, or other requirementrelating to the environment, natural resources, or public or employee health and safety except forsuch failure to be in compliance that could not reasonably be expected to have Material AdverseEffect.3.23 ALHC Acquisitions. Section 3.23 of the ALHC Disclosure Schedule contains acomplete and correct list of all agreements (“**ALHC Acquisition Agreements**”) executed by ALHC andthe ALHC Subsidiaries pursuant to which ALHC acquired or agreed to acquire all or any part of thestock or assets (including any customer list) of any Person since September 30, 2007. ALHC and theALHC Subsidiaries do not have any further obligation or liability under any of the ALHC AcquisitionAgreements or as a result of the transactions provided for in the ALHC Acquisition Agreement,except as described in reasonable detail in Section 3.23 of the ALHC Disclosure Schedule.3.24 Books and Records. All accounts, books, ledgers and official and other recordsprepared and kept by ALHC and the ALHC Subsidiaries have been properly kept and completed in allmaterial respects, and there are no material inaccuracies or discrepancies contained or reflectedtherein. Such records of ALHC and the ALHC Subsidiaries are located at ~~ALHC’~~ALHC’S offices inAtlanta, Georgia and Norman, Oklahoma.3.25 Certain Payments. Neither ALHC and any of the ALHC Subsidiaries nor any oftheir directors, officers, agents, or employees and, to the knowledge of ALHC, any other Personassociated with or acting for or on any of their behalf, has directly or indirectly(i) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback orother payment to any Person, private or public, regardless of form, whether in money,property, or services (a) to obtain favorable treatment in securing business, (b) to pay forfavorable treatment for business secured, (c) to obtain special concessions or for specialconcessions already obtained, for or in respect of ALHC or any affiliate of ALHC, or (d) inviolation of any legal requirement, or   AGREEMENT AND PLAN OF MERGER Page 34
 
 

 
(ii) established or maintained any fund or asset that has not been recorded in thebooks and records of ALHC or one of the ALHC Subsidiaries.3.26 Customers; Customer Relationships. Except as disclosed on Section 3.26 of theALHC Disclosure Schedule, to the knowledge of ALHC, there are no facts or circumstances that arelikely to resultin the loss of any client or customer of ALHC and ALHC Subsidiaries that, in each case, couldresult in a Material Adverse Effect or a material change in the relationship of ALHC and the ALHCSubsidiaries with any client or customer.3.27 Accuracy of Representations, Warranties and Covenants. No representation,covenant or warranty by ALHC in this Agreement and, to the actual acknowledge of ALHC, no writteninformation, agreements or documents furnished to AUSA by ALHC in connection with the Merger andthe other transactions contemplated in this Agreement, contain or will contain any untrue statementof a material fact or omits or will omit to contain a material fact necessary in order to make thestatement or information contained in this Agreement or in any such information, agreements ordocuments, in light of the circumstances under which statement or omission was made, notmisleading.3.28 ALHC Registration Statement. Subject to the accuracy of the representations ofAUSA in Section 2.28, the information contained in the Registration Statement and the InformationStatement/Prospectus other than AUSA Information supplied by AUSA (collectively, the “**ALHCInformation**”) will not, on the date effective date of the Registration Statement (or any amendmentthereof or supplement thereto), contain any statement that, at such time and in light of thecircumstances under which it shall be made, is false or misleading with respect to any materialfact, or shall omit to state any material fact necessary in order to make the statements madetherein, in light of the circumstances under which it shall be omitted, not false or misleading; oromit to state any material fact necessary to correct any statement in any earlier communicationwith respect to the Registration Statement that shall have become false or misleading. If at anytime prior to the Effective Time any event relating to ALHC or any of its respective Affiliates,officers or directors should be discovered by ALHC which should be set forth in a supplement to theRegistration Statement or Information Statement, ALHC shall promptly inform AUSA. The RegistrationStatement and Information Statement/Prospectus shall comply in all material respects with therequirements of the Securities Act and the Exchange Act. Notwithstanding the foregoing, ALHC makesno representation or warranty with respect to any of AUSA Information which is contained orincorporated by reference in, or furnished in connection with the preparation of, the RegistrationStatement and Information Statement/Prospectus.   AGREEMENT AND PLAN OF MERGER Page 35
 
 

 
ARTICLE IVCONDUCT OF BUSINESS PENDING THE CLOSING4.1 Conduct of Business by AUSA Pending the Closing. During the period from the dateof this Agreement and continuing until the earlier of the termination of this Agreement or theClosing (should there be any time between the effective date of this Agreement and the Closing),AUSA covenants and agrees to cause AUSA to conduct its business, and cause the businesses of theAUSA Subsidiaries to be conducted, in the Ordinary Course of Business and consistent with pastpractice, other than actions taken by AUSA or the AUSA Subsidiaries in contemplation of the Mergerin accordance with this Agreement or otherwise described in the Registration Statement, and AUSAshall not directly or indirectly do, or cause or allow any of AUSA or any of the AUSA Subsidiariesto do or propose to do, or propose to do, any of the following without the prior written consent ofALHC:(i) To conduct its business only in, and shall not take any action except in, theOrdinary Course of Business and in a manner consistent with past practice;(ii) To use reasonable commercial efforts to preserve substantially intact the businessorganization of AUSA and the AUSA Subsidiaries;(iii) To keep available the services of the present officers, employees, agents andconsultants of AUSA and the AUSA Subsidiaries; and(iv) To preserve the present relationships of AUSA and the AUSA Subsidiaries withcustomers, suppliers and other Persons with whom AUSA and the AUSA Subsidiaries has materialbusiness relations.By way of amplification and not limitation, except as contemplated by this Agreement, AUSA shallnot permit and prevent AUSA and the AUSA Subsidiaries, during the period from the date of thisAgreement and continuing until the earlier of the termination of this Agreement or the Closing,directly or indirectly do, or propose to do, any of the following without the prior written consentof ALHC:(a) To amend or otherwise change the Governing Documents of AUSA and the AUSASubsidiaries;(b) To issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale,pledge, disposition or encumbrance of, any shares of capital stock of any class, or anyoptions, warrants, convertible securities or other rights of any kind to acquire any sharesof capital stock, or any other ownership interest (including, without limitation, anyphantom interest) in AUSA or any of its Affiliates, other than pursuant to and in accordancewith the terms of the options, warrants and other rights to acquire AUSA common stock sharesas listed and identified in Section 2.4 of the AUSA Disclosure Schedule;(c) Except in connection with the sale of surplus office equipment and furniture, tosell, transfer, lease to others or otherwise dispose of or subject to any encumbrance anymaterial assets or properties of AUSA, or purchase, lease from others or otherwise acquireany material assets or properties (except for (I) purchases or sales of assets in theOrdinary Course of Business and in a manner consistent with past practice, (II) dispositionsof obsolete or worthless assets, and (III) purchases or sales of immaterial assets not inexcess of $25,000);(d) To (I) declare, set aside, make or pay any dividend or other distribution (whetherin cash, stock or property or any combination thereof) in respect of any of its capitalstock, (II) split, combine or reclassify any of its capital stock or issue or authorize orpropose the issuance of any other securities in respect of, in lieu of or in substitutionfor shares of its capital stock, or (III) amend the terms or change the period ofexercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any Personto purchase, repurchase, redeem or otherwise acquire, any of its securities, including AUSAShares or other equity interests or any option, warrant or right, directly or indirectly, toacquire AUSA Shares or other equity interests.(e) To (I) acquire (by merger, consolidation, or acquisition of stock or assets) anycorporation, partnership or other business organization or division thereof; (II) except asset forth on Section 2.9.2 of the AUSA Disclosure Schedule, incur any indebtedness forborrowed money, except for borrowings and reborrowing under AUSA’s existing creditfacilities or issue any debt securities or assume, guarantee or endorse or otherwise as anaccommodation become responsible for, the obligations of any Person, or make any loans oradvances, except in the Ordinary Course of Business consistent with past practice; (III)authorize any capital expenditures or purchases of fixed assets which are, in the aggregate,in excess of the amount set forth in Section 4.1 of AUSA Disclosure Schedule for AUSA; or(IV) enter into or amend any contract, agreement, commitment or arrangement to effect any ofthe matters prohibited by this subparagraph (e);   AGREEMENT AND PLAN OF MERGER Page 36
 
 

 
(f) To make any change in the rate of compensation, commission, bonus or otherremuneration payable, or pay or agree or promise to pay, conditionally or otherwise, anybonus, extra compensation, pension or severance or vacation pay, to any director, officer,employee, salesman or agent of AUSA except in the Ordinary Course of Business consistentwith prior practice and pursuant to or in accordance with plans disclosed in Section 2.14 ofAUSA Disclosure Schedule that were in effect as of the date of this Agreement, or make anyincrease in or commitment to increase any employee benefits, adopt or make any commitment toadopt any additional employee benefit plan or make any contribution, other than regularlyscheduled contributions, to any AUSA Plan;(g) To take any action to change accounting practices, policies or procedures(including procedures with respect to revenue recognition, payments of accounts payable orcollection of accounts receivable);(h) To make any material tax election inconsistent with past practice or settle orcompromise any material federal, state, local or foreign Tax liability or agree to anextension of a statute of limitations, except to the extent the amount of any suchsettlement has been reserved for in AUSA Financial Statements;(i) To pay, discharge or satisfy any claims, liabilities or obligations (absolute,accrued, contingent or otherwise), other than the payment, discharge or satisfaction whendue, in the Ordinary Course of Business and consistent with past practice of liabilitiesreflected or reserved against in AUSA Financial Statements or incurred after AUSA BalanceSheet Date in the Ordinary Course of Business and consistent with past practice;(j) To enter into any transaction, contract or commitment other than in the OrdinaryCourse of Business; or(k) To take, or agree in writing or otherwise to take, any of the actions describedin subsections (a) through (j) of this Section 4.1, or any action that would make any of therepresentations or warranties of AUSA contained in this Agreement untrue or incorrect orprevent AUSA from performing (or causing AUSA to perform) the covenants and agreements ofAUSA in this Agreement.   AGREEMENT AND PLAN OF MERGER Page 37
 
 

 
4.2 Conduct of Business by ALHC Pending the Closing. During the period from the dateof this Agreement and continuing until the earlier of the termination of this Agreement or theClosing, ALHC covenants and agrees that, except as set forth in Section 4.2 of the ALHC DisclosureSchedule or unless AUSA shall otherwise agree in writing, ALHC shall conduct its business, andcause the businesses of the ALHC Subsidiaries to be conducted, in the Ordinary Course of Businessand consistent with past practice, other than actions taken by ALHC or the ALHC Subsidiaries incontemplation of the Merger in accordance with this Agreement or otherwise described in theRegistration Statement, and shall not directly or indirectly do, or cause or allow any of the ALHCSubsidiaries to do or propose to do, or propose to do, any of the following without the priorwritten consent of AUSA:(i) To amend or otherwise change the Governing Documents of ALHC;(ii) To issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale,pledge, disposition or encumbrance of, any shares of capital stock of any class, or anyoptions, warrants, convertible securities or other rights of any kind to acquire any sharesof capital stock, or any other ownership interest (including, without limitation, anyphantom interest) in ALHC or any of its Affiliates, except for the issuance of shares ofALHC Common Stock issuable upon the exercise of the stock options and other commitmentslisted in Section 3.2 of the ALHC Disclosure Schedule;(iii) To sell, transfer, lease to others or otherwise dispose of or subject to anyencumbrance any material assets or properties owned by it or purchase, lease from others orotherwise acquire any material assets or properties (except for (a) purchases or sales ofassets in the Ordinary Course of Business and in a manner consistent with past practice, (b)dispositions of obsolete or worthless assets, and (c) purchases or sales of immaterialassets not in excess of $25,000);(iv) To (a) declare, set aside, make or pay any dividend or other distribution(whether in cash, stock or property or any combination thereof) in respect of any of itscapital stock, (b) split, combine or reclassify any of its capital stock or issue orauthorize or propose the issuance of any other securities in respect of, in lieu of or insubstitution for shares of its capital stock, or (c) amend the terms or change the period ofexercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any Personto purchase, repurchase, redeem or otherwise acquire, any of its securities, includingshares of ALHC Common Stock or any option, warrant or right, directly or indirectly, toacquire shares of ALHC Common Stock;(v) To (a) acquire (by merger, consolidation, or acquisition of stock or assets) anycorporation, partnership or other business organization or division thereof; (b) incur anyindebtedness for borrowed money, except for borrowings and reborrowing under its existingcredit facilities or issue any debt securities or assume, guarantee or endorse or otherwiseas an accommodation become responsible for, the obligations of any Person, or make any loansor advances, except in the Ordinary Course of Business consistent with past practice; (c)authorize any capital expenditures or purchases of fixed assets which are, in the aggregate,in excess of the amount set forth in Section 4.2 of the ALHC Disclosure Schedule for ALHCand its Subsidiaries taken as a whole; or (d) enter into or amend any contract, agreement,commitment or arrangement to effect any of the matters prohibited by subparagraph (v) ofthis Section 4.2;(vi) To make any change in the rate of compensation, commission, bonus or otherremuneration payable, or pay or agree or promise to pay, conditionally or otherwise, anybonus, extra compensation, pension or severance or vacation pay, to any director, officer,employee, salesman or agent of ALHC or its Subsidiaries except in the Ordinary Course ofBusiness consistent with prior practice and pursuant to or in accordance with plansdisclosed in Section 3.14~~.2~~ of the ALHC Disclosure Schedule that were in effect as of thedate of this Agreement or make any increase in or commitment to increase any employeebenefits, adopt or make any commitment to adopt any additional employee benefit plan or makeany contribution, other than regularly scheduled contributions, to any ALHC Plan;(vii) To take any action to change accounting practices, policies or procedures(including procedures with respect to revenue recognition, payments of accounts payable orcollection of accounts receivable);   AGREEMENT AND PLAN OF MERGER Page 38
 
 

 
(viii) To make any material tax election inconsistent with past practice or settle orcompromise any material federal, state, local or foreign Tax liability or agree to anextension of a statute of limitations, except to the extent the amount of any suchsettlement has been reserved for in ALHC Financial Statements;(ix) To pay, discharge or satisfy any claims, liabilities or obligations (absolute,accrued, contingent or otherwise), other than the payment, discharge or satisfaction whendue, in the Ordinary Course of Business and consistent with past practice of liabilitiesreflected or reserved against in ALHC Financial Statements or incurred after the ALHCBalance Sheet Date, in the Ordinary Course of Business and consistent with past practice;(x) To enter into any transaction, contract or commitment other than in the OrdinaryCourse of Business; or(xi) To take, or agree in writing or otherwise to take, any of the actions describedin subparagraphs (i) through (x) of this Section 4.2, or any action which would make any ofthe representations or warranties of ALHC contained in this Agreement untrue or incorrect orprevent ALHC from performing or cause ALHC not to perform its covenants and agreement inthis Agreement.ARTICLE VADDITIONAL AGREEMENTS5.1 Information Statement/Prospectus; Registration Statement; Blue Sky Laws. Aspromptly as practicable after the execution of this Agreement, and after the furnishing by AUSA andALHC of all information required to be contained therein (which each agrees to do as promptly aspracticable after the date of this Agreement), ALHC and AUSA shall jointly prepare and ALHC shallfile with the SEC a Registration Statement on Form S-4 (or on such other form as shall beappropriate), which shall include the Information Statement/Prospectus relating to the adoption ofthis Agreement and approval of the transactions contemplated in this Agreement by the shareholdersof AUSA pursuant to this Agreement, and shall use all reasonable efforts to cause the RegistrationStatement to become effective as soon thereafter as practicable. The InformationStatement/Prospectus shall include the recommendation of the Board of Directors of AUSA in favor ofthe Merger and such recommendation shall not be withdrawn modified or changed in a manner adverseto ALHC or Acquisition Corp., except as otherwise permitted or contemplated in this Agreement. Aspromptly as practicable after filing of the Registration Statement with the SEC, ALHC shall prepareand make such filings as are required under applicable state securities acts, regulations and laws(“Blue Sky Laws”) relating to the transactions contemplated by this Agreement. AUSA shall usereasonable and good faith efforts to assist ALHC as may be necessary to better enable ALHC tocomply with all applicable Blue Sky Laws and other securities laws.5.2 Access to Information; Confidentiality. Upon reasonable notice and subject torestrictions contained in confidentiality agreements to which such Party is subject (from whichsuch Party shall use reasonable efforts to be released), each of AUSA and ALHC shall (and shallcause each of its Subsidiaries to) afford to the officers, employees, accountants, counsel andother representatives of the other reasonable access, during the period prior to the Closing, toall its properties, books, contracts, commitments and records and, during such period, AUSA andALHC each shall (and shall cause each of its Subsidiaries to) furnish promptly to the other allinformation concerning its business, properties and personnel as such other party may reasonablyrequest, and each shall make available to the other the appropriate individuals (includingattorneys, accountants and other professionals) for discussion of the other’s business, propertiesand personnel as either ALHC or AUSA may reasonably request. Each Party shall keep suchinformation confidential.   AGREEMENT AND PLAN OF MERGER Page 39
 
 

 
5.3 Consents; Approvals. AUSA and ALHC shall and AUSA shall cause the AUSASubsidiaries to use their reasonable best efforts to obtain all consents, waivers, approvals,authorizations or orders (including, without limitation, all United States and foreign governmentaland regulatory rulings and approvals), and AUSA and ALHC shall and AUSA shall cause the AUSASubsidiaries to make all filings (including, without limitation, all filings with United States andforeign governmental or regulatory agencies) required in connection with the authorization,execution and delivery of this Agreement by AUSA andALHC and the consummation by them of the Merger and the other transactions contemplated by thisAgreement.5.4 Agreements with Respect to Affiliates. Upon execution of this Agreement, AUSAshall deliver to ALHC a letter (the “**Affiliate Letter**”) identifying all Persons who are, on theClosing Date anticipated to be “Affiliates” of AUSA for purposes of Rule 145 as promulgated underthe Securities Act (“**Rule 145**”). AUSA shall use its reasonable best efforts to cause each Personwho is identified as an “affiliate” in the Affiliate Letter to deliver to ALHC, on or before theClosing a written agreement (an “**Affiliate Agreement**”) in connection with restrictions onAffiliates under Rule 145 in form mutually agreeable to AUSA and ALHC.5.5 Indemnification and Insurance.5.5.1 Bylaws and Certificate of Incorporation Indemnification Provisions. The By-Lawsand Certificate of Incorporation of the Surviving Corporation shall contain the provisions withrespect to indemnification set forth in the By-Laws and Certificate of Incorporation of AUSA, whichprovisions shall not be amended, repealed or otherwise modified for a period of three years fromthe Effective Time in any manner that would adversely affect the rights thereunder as of theEffective Time of individuals who at the Effective Time were directors or officers of AUSA or itsSubsidiaries, unless such modification is required after the Effective Time by law.5.5.2 Indemnification of Officers and Directors. The Surviving Corporation shall, tothe fullest extent permitted under applicable law or under the Surviving Corporation’s Certificateof Incorporation or By-Laws, indemnify and hold harmless each present and former director orofficer of AUSA or any of its Subsidiaries (collectively, the “**Indemnified Parties**”) against anycosts or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims,damages, liabilities and amounts paid in settlement in connection with any claim, action, suit,proceeding or investigation, whether civil, criminal, administrative or investigative(collectively, “**Actions**”), (x) arising out of or pertaining to the transactions contemplated bythis Agreement, or (y) otherwise with respect to any acts or omissions occurring at or prior to theEffective Time, to the same extent as provided in Certificate of Incorporation or By-Laws of AUSAor any applicable contract or agreement as in effect on the date hereof, in each case for a periodof three years after the Effective Time; provided, however, that, in the event that any claim orclaims for indemnification are asserted or made within such three-year period, all rights toindemnification in respect of any such claim or claims shall continue until the disposition of anyand all such claims. In the event of any such Action (whether arising before or after theEffective Time), the Indemnified Parties shall promptly notify the Surviving Corporation inwriting, and the Surviving Corporation shall have the right to assume the defense thereof,including the employment of counsel reasonably satisfactory to such Indemnified Parties. TheIndemnified Parties shall have the right to employ separate counsel in any such Action and toparticipate in (but not control) the defense thereof, but the fees and expenses of such counselshall be at the expense of such Indemnified Parties unless (a) the Surviving Corporation has agreedto pay such fees and expenses, (b) the Surviving Corporation shall have failed to assume thedefense of such Action or (c) the named parties to any such Action (including any impleadedparties) include both the Surviving Corporation and the Indemnified Parties and such IndemnifiedParties shall have been reasonably advised in writing by counsel that there may be one or morelegal defenses available to the Indemnified Parties which are in conflict with those available tothe Surviving Corporation. In the event such Indemnified Parties employ separate counsel at theexpense of the Surviving Corporation pursuant to clauses (b) or (c) of the previous sentence, (i)any counsel retained by the Indemnified Parties for any period after the Effective Time shall bereasonably satisfactory to the Surviving Corporation; (ii) the Indemnified Parties as a group mayretain only one law firm to represent them in each applicable jurisdiction with respect to anysingle Action unless there is, under applicable standards of professional conduct, a conflict onany significant issue between the positions of any two or more Indemnified Parties, in which caseeach Indemnified Person   AGREEMENT AND PLAN OF MERGER Page 40
 
 

 
with respect to whom such a conflict exists (or group of such Indemnified Persons why among them have no such conflict)may retain one separate law firm in each applicable jurisdiction; (iii) after the Effective Time,the Surviving Corporation shall pay the reasonable fees and expenses of such counsel, promptlyafter statements therefor are received; and (iv) the Surviving Corporation will cooperate in thedefense of any such Action. The Surviving Corporation shall not be liable for any settlement ofany such Action effected without its written consent.5.5.3 Survival of Provisions. The provisions of this Section 5.5 shall survive theconsummation of the Merger at the Effective Time, is intended to benefit AUSA, the SurvivingCorporation and the Indemnified Parties, shall be binding on all successors and assigns of theSurviving Corporation and shall be enforceable by the Indemnified Parties.5.5.4 Officers’ and Directors’ Liability Insurance. AUSA and ALHC shall, until atleast the sixth anniversary of the Effective Time, cause to be maintained in effect, to the extentavailable, the policies of directors’ and officers’ liability insurance having the same coveragecurrently in force, but with maximum coverage amounts of no less than $5,000,000, containing termsthat are not less advantageous to the insured parties with respect to claims arising from factsthat occurred on or prior to the Effective Time, including without limitation all claims basedupon, arising out of, directly or indirectly resulting from, in consequence of, or in any wayinvolving the Merger and any and all related events. In lieu of the purchase of such insurance,AUSA may purchase a six (6) year non-cancellable extended reporting period endorsement (**“ReportingTail Coverage”**) under AUSA’s existing directors’ and officers’ liability insurance coverage,providing that such Reporting Tail Coverage shall extend the directors’ and officers’ liabilitycoverage in force as of the date hereof for a period of at least three years from the EffectiveTime for any claim based upon, arising out of, directly or indirectly resulting from, inconsequence of, or any way involving acts or omissions occurring or prior to the Effective Time,including without limitation all claims based upon, arising out of, directly or indirectlyresulting from, in consequence of, or any way involving this Agreement, all agreements contemplatedhereby, the Merger or any and all related events. ALHC shall cooperate with AUSA in obtaining suchinsurance coverage.5.6 Notification of Certain Matters. AUSA shall give prompt notice to ALHC, and ALHCshall give prompt notice to AUSA, of the following:(i) the occurrence or nonoccurrence of any event the occurrence or nonoccurrence ofwhich would be likely to cause any representation or warranty contained in this Agreementto be materially untrue or inaccurate; or(ii) any failure of AUSA or ALHC, as the case may be, materially to comply with orsatisfy any covenant, condition or agreement to be complied with or satisfied by it underthis Agreement.   AGREEMENT AND PLAN OF MERGER Page 41
 
 

 
Provided, however, the delivery of any notice pursuant to this Section 5.6 shall not limit orotherwise affect the remedies available to the Party receiving such notice; and provided further,that failure to give such notice shall not be treated as a breach of covenant for the purposes ofSection 6.2.2 or 6.3.2 unless the failure to give such notice results in material prejudice to theParty entitled to receive the notice.5.7 Further Action. Upon the terms and subject to the conditions of this Agreement,each of the Parties shall use all commercially reasonable efforts to take, or cause to be taken,all actions and to do, or cause to be done, all other things reasonably necessary, proper oradvisable to consummate and make effective as promptly as practicable the Merger and othertransactions contemplated by this Agreement, to obtain in a timely manner all necessary waivers,consents and approvals and to effect all necessary registrations and filings, and otherwise tosatisfy or cause to be satisfied all conditions precedent to its obligations under this Agreement.The foregoing covenant shall not include any obligation by ALHC to agree to divest, abandon,license or take similar action with respect to any assets (tangible or intangible) ofALHC or AUSA. The foregoing covenant shall not include any obligation by ALHC to agree to divest,abandon, license or take similar action with respect to any assets (tangible or intangible) of ALHCor AUSA other than in contemplation of the Merger in accordance with this Agreement or as describedin the Registration Statement. Each of ALHC, Acquisition Corp, and AUSA shall use its commerciallyreasonable efforts to cause the Merger to qualify, and will not (both before and after consummationof the Merger) take any actions which to its knowledge could reasonably be expected to prevent theMerger from qualifying, as a reorganization under the provisions of Section 368 of the Code and theapplicable Treasury Regulations.5.8 Public Announcements. ALHC and AUSA shall consult with each other before issuingany press release with respect to the Merger or this Agreement and shall not issue any such pressrelease or make any such public statement without the prior consent of the other Party, which shallnot be unreasonably withheld; provided, however, that a Party may, without the prior consent of theother Party, issue such press release or make such public statement as may upon the advice ofcounsel be required by law if it has used all reasonable efforts to consult with the other Party.5.9 Conveyance Taxes. ALHC and AUSA shall cooperate in the preparation, executionand filing of all returns, questionnaires, applications or other documents regarding any realproperty transfer or gains, sales, use, transfer, value added, stock transfer and stamp taxes, anytransfer, recording, registration and other fees, and any similar taxes (other than income taxes)that become payable in connection with the Merger and other transactions contemplated by thisAgreement that are required or permitted to be filed on or before the Closing and each of ALHC andAUSA shall be responsible for the payment of its taxes and fees.5.10 No Solicitation. (a) Upon execution of this Agreement, ALHC and AUSA do nothave, or shall immediately terminate, any discussions with any Person concerning an AlternativeAcquisition (as defined below). From and after the date of this Agreement until the earlier of theClosing or the termination of this Agreement in accordance with its terms, ALHC and AUSA shall not,and shall not permit any of their officers, directors, employees, Affiliates, investment bankers orother agent or other representative to, directly or indirectly, other than in connection with theperformance and consummation of the Merger Agreement and the other transactions contemplated inthis Agreement,(i) solicit, engage in discussions or negotiate with any Person (whether suchdiscussions or negotiations are initiated by ALHC or AUSA, such other Person or otherwise)or take any other action intended or designed to facilitate the efforts of any Personrelating to the possible acquisition of AUSA or ALHC (whether by way of merger, purchase ofcapital stock, purchase of assets or otherwise) or any material portion of its capital stockor assets (with any such efforts by any such Person, including a firm proposal to make suchan acquisition, being referred to as an “**Alternative Acquisition**”),   AGREEMENT AND PLAN OF MERGER Page 42
 
 

 
(ii) provide information with respect to ALHC or AUSA to any Person relating to apossible Alternative Acquisition by any Person,(iii) enter into an agreement with any Person providing for a possible AlternativeAcquisition, or(iv) make or authorize any statement, recommendation or solicitation in support of anypossible Alternative Acquisition by any Person.(b) Notwithstanding the foregoing, the restrictions set forth in Section 5.10(a) shall notprevent AUSA or its Board of Directors, to the extent such Board of Directors determines, in goodfaith (after consultation with independent legal advisors), that such Board of Directors’ fiduciaryduties under applicable law require it to do so, from (A) furnishing non-public information to, orentering into discussions ornegotiations with, any person or entity in connection with an unsolicited, bona fide, writtenAlternative Acquisition by such person or entity or recommending an unsolicited, bona fide, writtenAlternative Acquisition by such person or entity to the shareholders of AUSA, if and only to theextent that(1) the Board of Directors of AUSA determines in good faith (after consultation withindependent financial and legal advisors) that such Alternative Acquisition is reasonablycapable of being completed on the terms proposed and, after taking into account thestrategic benefits anticipated to be derived from the Merger and the long-term prospects ofALHC and AUSA as a combined company, would, if consummated, result in a transaction morefavorable to AUSA’s shareholders from a financial point of view than the transactioncontemplated by this Agreement (any such more favorable Alternative Acquisition beingreferred to in this Agreement as a “Superior Proposal”) and the Board of Directors of ALHCdetermines in good faith (after consultation with independent legal advisors) that suchaction is necessary for such Board of Directors to comply with its fiduciary duties toshareholders under applicable law and(2) prior to furnishing such non-public information to, or entering into discussions ornegotiations with, such person or entity,(x) such Board of Directors receives from such person or entity an executedconfidentiality agreement with terms no less favorable to AUSA and no more favorableto such person or entity than those terms contained in the Confidentiality andNon-Disclosure Agreement dated April 11, 2008 between ALHC and AUSA (the“Nondisclosure Agreement”),(y) such non-public information has been previously delivered to ALHC, and(z) AUSA advises ALHC in writing of such disclosure or discussions ornegotiations, including the person or entity to whom disclosed or with whomdiscussions or negotiations will occur; or (B) complying with Rules 14d-9 and 14e-2promulgated under the Exchange Act with regard to an Alternative Acquisition. AUSAshall ensure that the officers, directors and Affiliates of AUSA and AUSASubsidiaries and any investment banker or other financial advisor or representativeretained by AUSA or any of the AUSA Subsidiaries are aware of the restrictionsdescribed in this Section 5.10. Without limiting the foregoing, it is understoodthat any violations of the restrictions set forth in this Section 5.10 by anyofficer, director, employee, financial advisor, attorney, representative, subsidiaryor agent of AUSA, when acting on behalf of AUSA or any of the AUSA Subsidiaries,shall be deemed to be a breach of this Section 5.10 by AUSA.   AGREEMENT AND PLAN OF MERGER Page 43
 
 

 
(c) AUSA shall notify ALHC immediately after receipt by AUSA (or its advisors) of anyAlternative Acquisition or any request for non-public information in connection with an AlternativeAcquisition or for access to the properties, books or records of AUSA or any of its subsidiaries byany person or entity that informs such party that it is considering making, or has made, anAlternative Acquisition. Such notice shall be made orally and in writing and shall indicate inreasonable detail the identity of the person or entity and the terms and conditions of suchproposal, inquiry or contact. AUSA shall continue to keep ALHC informed, on a current basis, of thestatus of any such discussions or negotiations and the terms being discussed or negotiated.(d) In addition to the foregoing, AUSA shall not accept or enter into any agreement, letter ofintent or similar document concerning an Alternative Acquisition for a period of not less thanseventy two (72) hours after ALHC’s receipt of a notice of the material terms of such AlternativeAcquisition and the identity of the person or entity making such Alternative Acquisition, andduring such seventy two (72) hour periodAUSA shall negotiate with ALHC in good faith any proposal submitted to AUSA by ALHC which addressessuch Alternative Acquisition.5.11 Registration of Certain Affiliate Owned Shares. As soon as practicable afterthe Effective Time, ALHC shall cause the ALHC Common Stock shares issued to The Peter W. NauertRevocable Trust (the “Nauert Shares”) and Ian R. Stuart (the “Stuart Shares”) in accordance withand pursuant to this Agreement to be registered under the Securities Act pursuant to a registrationstatement on Form S-3 (or any successor or other appropriate form). ALHC shall use its bestefforts to cause the effectiveness of such registration statement (and the current status of theprospectus or prospectuses contained therein) to be maintained for so long as any of the NauertShares or any of the Stuart Shares do not qualify for resale pursuant to Rule 144 or 145promulgated under the Securities Act. The benefits of this Section 5.11 shall attach to the NauertShares and Stuart Shares and shall be for the benefit of The Peter W. Nauert Revocable Trust or IanR. Stuart and any subsequent holder or holders of the Nauert Sharesor Stuart Shares. Thecosts and expenses of the registration of the Nauert Shares and Stuart Shares shall be paid by ThePeter W. Nauert Revocable Trust and Stuart Shares proportionately based under the number of NauertShares and Stuart Shares included in the registration statement and initially filed with theSECARTICLE VICONDITIONS TO THE CLOSING6.1 Conditions to Obligation of Each Party to Effect the Merger. The respectiveobligations of each Party to consummate the Merger and the other transactions contemplated in thisAgreement shall be subject to the satisfaction at or prior to the Effective Time of the followingconditions:6.1.1 Governmental Actions. There shall not have been instituted, pending orthreatened any action or proceeding (or any investigation or other inquiry that might result insuch an action or proceeding) by any governmental authority or administrative agency before anygovernmental authority, administrative agency or court of competent jurisdiction, domestic orforeign, nor shall there be in effect any judgment, decree or order of any governmental authority,administrative agency or court of competent jurisdiction, or any other legal restraint(i) preventing or seeking to prevent consummation of the Merger and the othertransactions contemplated in this Agreement,   AGREEMENT AND PLAN OF MERGER Page 44
 
 

 
(ii) prohibiting or seeking to prohibit or limiting or seeking to limit ALHC fromexercising all material rights and privileges pertaining to its ownership of AUSA or theownership or operation by ALHC or any of the ALHC Subsidiaries or all or a material portionof the business or assets of ALHC or any of the ALHC Subsidiaries, or(iii) compelling or seeking to compel ALHC or any of the ALHC Subsidiaries to disposeof or hold separate all or any material portion of the business or assets of ALHC or any ofthe ALHC Subsidiaries, as a result of the Merger or the transactions contemplated by thisAgreement.6.1.2 Illegality. No statute, rule, regulation or order shall be enacted, entered,enforced or deemed applicable to the Merger and the other transactions contemplated in thisAgreement that makes the consummation of the Merger or other such transactions illegal.6.1.3 Opinion of Counsel. ALHC and AUSA shall have received the written opinion ofDunn Swan & Cunningham, in form reasonably satisfactory to ALHC and AUSA, as to customary corporateand legalmatters relating to ALHC, Acquisition Corp and AUSA, this Agreement and the transactioncontemplated in this Agreement.6.1.4 Tax Opinion. ALHC and AUSA shall have received a written opinion of Dunn Swan& Cunningham, in form and substance reasonably satisfactory to each of them to the effect that theMerger will constitute a reorganization within the meaning of Section 368 of the Code. Each Partyagrees to make all representations and covenants reasonably requested by Dunn Swan & Cunningham inconnection with the rendering of such opinion.6.1.5 Effectiveness of the Registration Statement. The RegistrationStatement shall have been declared effective by the SEC under the Securities Act. No stop ordersuspending the effectiveness of the Registration Statement shall have been issued by the SEC and noproceedings for that purpose and no similar proceeding in respect of the InformationStatement/Prospectus shall have been initiated or threatened by the SEC.6.1.6 AUSA Shareholder Approval. AUSA shall have obtained the approval of thisAgreement and the transactions contemplated in this Agreement by the holders of not less than amajority of the AUSA Shares.6.2 Additional Conditions to Obligations of ALHC. The obligations of ALHC toconsummate the Merger and the other transactions contemplated in this Agreement are also subject tothe following conditions:6.2.1 Representations and Warranties. The representations and warranties ofAUSA contained in this Agreement and in AUSA Disclosure Schedule shall be true and correctin all respects on and as of the Closing with the same force and effect as if made on and asof the Closing, except for(i) changes contemplated by this Agreement, including the Access HealthSourceDivesture,   AGREEMENT AND PLAN OF MERGER Page 45
 
 

 
(ii) those representations and warranties that address matters only as of aparticular date (that shall have been true and correct as of such date, subject toclause (iii)), or(iii) where the failure to be true and correct would not reasonably be expectedto have a Material Adverse Effect, and ALHC shall have received a certificate dated asof the Closing to such effect signed by the Chief Executive Officer of AUSA.6.2.2 Agreements and Covenants. AUSA shall have performed or complied in allmaterial respects with all agreements and covenants required by this Agreement to beperformed or complied with by AUSA on or prior to the Closing, and ALHC shall have receiveda certificate dated as of the Closing to such effect signed by the Chief Executive Officerof AUSA.6.2.3 Consents Obtained. All material consents, waivers, approvals,authorizations or orders required to be obtained, and all filings required to be made, byAUSA for the authorization, execution and delivery of this Agreement, the consummation by itof the Merger and other transactions contemplated by this Agreement and the continuation infull force and effect of any and all material rights, documents, agreements or instrumentsof AUSA shall have been obtained and made by AUSA, except where the failure to receive suchconsents, waivers, approvals, authorizations or orders would not reasonably be expected tohave a Material Adverse Effect on AUSA and any of the AUSA Subsidiaries.6.2.4 Access HealthSource Divesture. AUSA shall have completed the AccessHealthSource Divesture and all of the related liabilities shall have been paid andsatisfied.6.2.5 Deliveries at Closing. All deliveries required to be made by AUSA toALHC at Closing shall have been made at Closing.6.3 Additional Conditions to Obligations of AUSA. The obligations of AUSA toconsummate the Merger and the other transactions contemplated in this Agreement are also subject tothe following conditions:6.3.1 Representations and Warranties. The representations and warranties ofALHC contained in this Agreement and the ALHC Disclosure Schedule shall be true and correctin all respects on and as of the Closing with the same force and effect as if made on and asof the Closing, except for(i) changes contemplated by this Agreement,(ii) those representations and warranties that address matters only as of aparticular date (that shall have been true and correct as of such date, subject toclause (iii)), or(iii) where the failure to be true and correct could not reasonably be expectedto have a Material Adverse Effect, and AUSA shall have received a certificate dated asof the Closing to such effect signed by the Chief Executive Officer of ALHC.6.3.2 Agreements and Covenants. ALHC shall have performed or complied in allmaterial respects with all agreements and covenants required by this Agreement to beperformed or complied with by them on or prior to the Closing, and AUSA shall have receiveda certificate dated as of the Closing to such effect signed by the Chief Executive Officerof ALHC.   AGREEMENT AND PLAN OF MERGER Page 46
 
 

 
6.3.3 Consents Obtained. All material consents, waivers, approvals,authorizations or orders required to be obtained, and all filings required to be made, byALHC for the authorization, execution and delivery of this Agreement, the consummation by itof the Merger and other transactions contemplated by this Agreement and the continuation infull force and effect of any and all material rights, documents, agreements or instrumentsof ALHC shall have been obtained and made by ALHC, except where the failure to receive suchconsents, waivers, approvals, authorizations or orders could not reasonably be expected tohave a Material Adverse Effect on ALHC and any of the ALHC Subsidiaries.6.3.4 Deliveries at Closing. All deliveries required to be made by ALHC to AUSA atClosing shall have been made at Closing.ARTICLE VIITERMINATION7.1 Termination. This Agreement may be terminated at any time prior to the Closingas follows:(i) by mutual written consent duly authorized by the Boards of Directors of ALHC andAUSA; or(ii) by either ALHC, on the one hand, or AUSA, on the other hand, if the Merger shallnot have been consummated by February 28, 2009 (provided that the right to terminate thisAgreementunder this subparagraph (ii) of this Section 7.1 shall not be available to any Party whosefailure to fulfill any obligation under this Agreement has been the cause of or resulted inthe failure of the Merger to be consummated on or before such date), notwithstanding anyother provision of this Section 7.1; or(iii) by either ALHC, on the one hand, or AUSA, on the other hand, if a court ofcompetent jurisdiction or governmental, regulatory or administrative agency or commissionshall have issued a non-appealable final order, decree or ruling or taken any other actionhaving the effect of permanently restraining, enjoining or otherwise prohibitingconsummation of the Merger (provided that the right to terminate this Agreement under thissubparagraph (iii) of this Section 7.1 shall not be available to any Party who has notcomplied with its obligations under Section 5.3 and such noncompliance materiallycontributed to the issuance of any such order, decree or ruling or the taking of suchaction), notwithstanding any other provision of this Section 7.1; or(iv) by ALHC, on the one hand, or AUSA, on the other hand, if any representation orwarranty of AUSA, on the one hand, or ALHC and Acquisition Corp, on the other hand, asappropriate, set forth in this Agreement shall be untrue when made, such that the conditionsset forth in Sections 6.2.1 or 6.3.1, as the case may be, would not be satisfied (a“**Terminating Misrepresentation**”); provided, however, that, if suchTerminating Misrepresentation is curable by AUSA or ALHC, as the case may be, through theexercise of its commercially reasonable efforts and for so long as AUSA or ALHC, as the casemay be, continues to exercise such reasonable efforts, neither ALHC nor AUSA, respectively,may terminate this Agreement under this subparagraph (iv) of this Section 7.1; or   AGREEMENT AND PLAN OF MERGER Page 47
 
 

 
(v) by ALHC if any representation or warranty of AUSA shall have become untrue suchthat the condition set forth in Section 6.2.1 would not be satisfied (an “**AUSA TerminatingChange**”), or by AUSA if any representation or warranty of ALHC shall have become untrue suchthat the condition set forth in Section 6.3.1 would not be satisfied (a “**ALHC TerminatingChange**” and together with an AUSA Terminating Change, a “**Terminating Change**”), in eithercase other than by reason of a Terminating Breach (as hereinafter defined); provided,however, that if any such Terminating Change is curable by AUSA or ALHC, as the case may be,through the exercise of its commercially reasonable efforts, and for so long as AUSA orALHC, as the case may be, continues to exercise such commercially reasonable efforts,neither ALHC nor AUSA, respectively, may terminate this Agreement under this subparagraph(v) of this Section 7.1;(vi) by ALHC, on the one hand, or AUSA, on the other hand, upon a breach of anycovenant or agreement on the part of AUSA, on the one hand, or ALHC, on the other hand, setforth in this Agreement, such that the conditions set forth in Sections 6.2.2 or 6.3.2, asthe case may be, would not be satisfied (a “**Terminating Breach**”); provided, however, that,if such Terminating Breach is curable by AUSA or ALHC, as the case may be, through theexercise of commercially reasonable efforts and for so long as AUSA or ALHC, as the case maybe, continues to exercise such commercially reasonable efforts, neither ALHC nor AUSA,respectively, may terminate this Agreement under this subparagraph (vi) of this Section 7.1;or(vii) by AUSA if it proposes to accept a Superior Proposal.7.2 Effect of Termination. In the event of the termination of this Agreementpursuant to Section 7.1, this Agreement shall forthwith become void and there shall be no liabilityon the part of any Party or of any of its Affiliates, directors, officers or stockholders, exceptas set forth in Section 7.3 and Section 8.1. Except as provided in Section 7.3, nothing in thisAgreement shall relieve any Party from liability for any breach of this Agreement.7.3 Fees and Expenses.7.3.1 Each Party to Bear Own Expenses. Except as otherwise provided in this Section7.3, all fees and expenses incurred by ALHC, on the one hand, or AUSA, on the other hand, inconnection with this Agreement and the transactions contemplated by this Agreement through theearlier of the Closing or termination of this Agreement shall be paid by ALHC if incurred by ALHCor by AUSA if incurred by AUSA, as the case may be, whether or not the Merger is consummated;provided, however, that the costs and expenses of Dunn Swan & Cunningham incurred in connectionwith the Merger shall be borne and paid equally by each of ALHC and AUSA.7.3.2 Litigation Expenses. Upon termination of this Agreement by either ALHC, on theone hand, or AUSA, on the other hand, the respective Parties may seek any and all remediesavailable to them under applicable law. In the event any Party shall be required to employ anattorney or attorneys to institute a legal proceeding against the other Party or Parties for thepurpose of enforcing any of the provisions of this Agreement or protecting its interest in anymatter arising under this Agreement, the non-prevailing party in any such action pursued in courtsof competent jurisdiction (the finality of which is not legally contestable) shall pay to the“prevailing party” all reasonable costs, damages and expenses, including attorneys’ fees, expendedor incurred in connection with such proceeding. The standard to be applied in determining a Partyis a prevailing party for purposes of this Section 7.3.2 shall be the same standard as applied bythe courts in determining who is a prevailing party for purposes of Rule 54(d) of the Federal Rulesof Civil Procedure.   AGREEMENT AND PLAN OF MERGER Page 48
 
 

 
7.3.3 Breakup Fee. AUSA shall pay to AHLC a fee equal of $362,500 upon termination ofthis Agreement by AUSA pursuant to Section 7.1(vii).ARTICLE VIIIGENERAL PROVISIONS8.1 Effectiveness of Representations, Warranties and Agreements. Eachrepresentation, warranty, covenant or agreement given or made by AUSA or ALHC under this Agreement(including AUSA Disclosure Schedule and the ALHC Disclosure Schedule) shall not survive the Closingor termination of this Agreement pursuant to Section 7.1, regardless of any investigation made byor on behalf of any other Party, any Person controlling any such Party or any of its officers,directors or representatives, whether prior to or after the execution of this Agreement, except asprovided in Section 5.5. Provided, however, the rights of the Parties to initiate any legalproceeding for breach of any representation, warranty, covenant, agreement or other provision ofthis Agreement shall survive only until the close of business on December 31, 2009.8.2 Notices. All notices and other communications given or made pursuant heretoshall be in writing and shall be deemed to have been duly given or made if and when deliveredpersonally or by overnight courier to the parties at the following addresses or sent by electronictransmission, with confirmation received, to the facsimile numbers specified below (or at suchother address, facsimile or telephone number or other Person’s attention for a party as shall bespecified by like notice):If to ALHC:Alliance HealthCard, Inc.900 36th Avenue NWNorman, Oklahoma 73072Facsimile No.: (405) 928-2766Telephone No.: (405) 579-8525Attention: Brett Wimberley, Chief Operating Officer,       With a copy to: Bradley Denison, General Counsel900 36th Avenue NWNorman, Oklahoma 73072Facsimile No.: (405) 928-2766Telephone No.: (405) 579-8525If to AUSA:Access Plans USA, Inc.4929 West Royal Lane, Suite 200Irving, Texas 75063Facsimile No.: (972) 913-3286Telephone No.: (972) 915-3204Attention: Ian Stuart, Chief Executive Officer       With a copy to: Eliseo Ruiz III, General CounselAccess Plans USA, Inc.4929 West Royal Lane, Suite 200Irving, Texas 75063Facsimile No.: (972) 913-3286Telephone No.: (972) 915-3204   AGREEMENT AND PLAN OF MERGER Page 49
 
 

 
8.3 Certain Definitions. For purposes of this Agreement, other than Sections 2.14and 3.14, the term:(i) “**Affiliates**” means a Person that directly or indirectly, through one or moreintermediaries, controls, is controlled by, or is under common control with, the firstmentioned Person.(ii) “**Business Day**” means any day other than a day on which banks in Oklahoma arerequired or authorized to be closed.(iii) “**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 todirect or cause the direction of the management or policies of a Person, whether through theownership of stock, as trustee or executor, by contract or credit arrangement or otherwise;(iv) “**Encumbrance**” means any interest in an asset securing an obligation owed to, or aclaim by, any Person other than the owner of the asset, whether such interest shall be basedon the common law, statute, or contract, whether such interest shall be recorded orperfected, and whether such interest shall be contingent upon the occurrence of some futureevent or events or the existence of some future circumstance or circumstances, including thelien or security interest arising from a mortgage, deed of trust, encumbrance, pledge,hypothecation, assignment, deposit arrangement, security agreement, conditional sale ortrust receipt, or from a lease, consignment, or bailment for security purposes and alsoincluding reservations, exceptions, encroachments, easements, rights-of-way, covenants,conditions, restrictions, leases, and other title exceptions and encumbrances affecting realor personal, tangible or intangible, property.(v) “**Governing Documents**” means, with respect to ALHC or AUSA or its Subsidiary or anyother Person, the certificate or articles or certificate of incorporation, articles oforganization, by-laws, code of regulations, or other organizational documents of ALHC orAUSA or its Subsidiary or such other Person.(vi) “**Person**” means an individual, corporation, partnership, limited liabilitycompany, association, trust, unincorporated organization other entity or group (as definedin Section 13(d)(3) of the Exchange Act).(vii) “**Subsidiary**” or “**Subsidiaries**” of AUSA, ALHC or any other Person means anycorporation, partnership, limited liability company, or other legal entity of which AUSA,ALHC or such other Person, as the case may be (either alone or through or together with anyother subsidiary), owns, directly or indirectly through one or more intermediaries, morethan 10% of the stock or other equity interests the holders of which are generally entitledto vote for the election of the board of directors or other governing body of suchcorporation or other legal entity.   AGREEMENT AND PLAN OF MERGER Page 50
 
 

 
8.4 Amendment. This Agreement may be amended by the Board of Directors of AUSA andthe Board of Directors of ALHC at any time prior to the Closing. This Agreement may not beamended except by an instrument in writing signed by the Parties.8.5 Waiver. At any time prior to the Closing, any Party may with respect to anyother Party(i) extend the time for the performance of any of the obligations or other acts,(ii) waive any inaccuracies in the representations and warranties contained herein orin any document delivered pursuant hereto, or(iii) waive compliance with any of the agreements or conditions contained in thisAgreement. Any such extension or waiver shall be valid if set forth in an instrument inwriting signed by the Party or Parties to be bound thereby. For purposes of this Agreement,time shall be of the essence.8.6 Regulatory Compliance. Each of the Parties acknowledges and agrees that theother Party assumes no responsibility for the tax, accounting or regulatory treatment by such Partyof the Merger and the other transactions contemplated under this Agreement. Each of the Partiesrepresents and warrants to the other Party than it has made full disclosure of the terms of, andother information relevant to, each transaction entered into as contemplated hereby to allappropriate internal and external advisors to it with respect to the tax, accounting and regulatorytreatment of such transactions.8.7 Headings; Construction. The headings contained in this Agreement are forreference purposes only and shall not affect in any way the meaning or interpretation of thisAgreement. In this Agreement(i) words denoting the singular include the plural and vice versa,(ii) “it” or “its” or words denoting any gender include all genders,(iii) the word “including” shall mean “including without limitation,” whether or notexpressed,(iv) any reference to a statute shall mean the statute and any regulations thereunderin force as of the date of this Agreement or the Closing, as applicable, unless otherwiseexpressly provided,(v) any reference in this Agreement to a subparagraph, a subsection, a Section, anArticle, aSchedule or an Exhibit refers to a subparagraph, a subsection, a Section or an Article of ora Schedule or an Exhibit to this Agreement, unless otherwise specifically stated,(vi) when calculating the period of time within or following which any act is to bedone or steps taken, the date that is the reference day in calculating such period shall beexcluded and if the last day of such period is not a Business Day, then the period shall endon the next day that is a Business Day and(vii) any reference to a Party’s “best efforts” or “reasonable efforts” shall notinclude any obligation of such Party to pay, or guarantee the payment of, money or otherconsideration to any third party or to agree to the imposition on such Party or itsAffiliates of any condition reasonably considered by such Party to be materially burdensometo such Party or its Affiliates.   AGREEMENT AND PLAN OF MERGER Page 51
 
 

 
8.8 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 conditionsand provisions of this Agreement shall nevertheless remain in full force and effect so long as theeconomic or legal substance of the transactions contemplated hereby is not affected in any manneradverse to any party. Except as otherwise specifically provided in this Agreement, upon suchdetermination that any term or other provision is invalid, illegal or incapable of being enforced,the Parties shall negotiate in good faith to modify this Agreement so as to effect the originalintent of the Parties as closely as possible in an acceptable manner to the end that transactionscontemplated hereby are fulfilled to the extent reasonably possible.8.9 Entire Agreement. This Agreement constitutes the entire agreement and supersedesall prior agreements and undertakings, both written and oral, among the parties, or any of them,with respect to the subject matter hereof, except as otherwise expressly provided herein.8.10 Assignment. This Agreement shall not be assigned by operation of law orotherwise, except that all or any of the rights of ALHC under this Agreement may be assigned to anydirect, wholly-owned Subsidiary of ALHC provided that no such assignment shall relieve theassigning party of its obligations under this Agreement.8.11 Parties in Interest. This Agreement shall be binding upon and inure solely tothe benefit of each Party, and nothing in this Agreement, express or implied, is intended to orshall confer upon any other Person any right, benefit or remedy of any nature whatsoever under orby reason of this Agreement, including, by way of subrogation, other than Section 5.5 (that isintended to be for the benefit of the Indemnified Parties and may be enforced by such IndemnifiedParties).8.12 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay onthe part of any Party in the exercise of any right under this Agreement shall impair such right orbe construed to be a waiver of, or acquiescence in, any breach of any representation, warranty,covenant or agreement contained in this Agreement, nor shall any single or partial exercise of anysuch right preclude other or further exercise thereof or of any other right. All rights andremedies existing under this Agreement are cumulative to, and not exclusive of, any rights orremedies otherwise available.8.12 Governing Law. This Agreement shall be governed by, and construed in accordancewith, the internal laws of the State of Oklahoma applicable to contracts executed and fullyperformed within the State of Oklahoma.8.13 Counterparts. This Agreement may be executed in one or more counterparts, andby the different Parties in separate counterparts, each of which when executed shall be deemed tobe an original but all of which taken together shall constitute one and the same agreement.8.14 WAIVER OF JURY TRIAL. AUSA AND ALHC EACH HEREBY IRREVOCABLY WAIVES, TO THEFULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING ORCOUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THISAGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.8.15 Jurisdiction; Service of Process. Any action or proceeding seeking to enforceany provision of, or based on any right arising out of, this Agreement may be brought against anyof the Parties in the courts of the State of Oklahoma, County of Cleveland, and each of the Partiesconsents to the jurisdiction of such courts (and of the appropriate appellate courts) in any suchaction or proceeding and waives any objection to venue laid therein.   AGREEMENT AND PLAN OF MERGER Page 52
 
 

 
IN WITNESS WHEREOF, ALHC and AUSA have caused this Agreement to be executed as of the datefirst written above by their respective officers thereunto duly authorized.       “ALHC” ALLIANCE HEALTHCARD, INC.           By:         Danny Wright,      Chief Executive Officer         “Acquisition Corp” ACCESS/ALLIANCE ACQUISITION CORP.           By:         Danny Wright,      Chief Executive Officer         “AUSA” ACCESS PLANS USA, INC.           By:         Ian Stuart      Chief Executive Officer     AGREEMENT AND PLAN OF MERGER Page 53