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EXHIBIT 2.1
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AGREEMENT AND PLAN OF REORGANIZATION
AMONG
CITATION COMPUTER SYSTEMS, INC.
A MISSOURI, U.S.A. CORPORATION
MEDASYS DIGITAL SYSTEMS
A FRENCH SOCIETE ANONYME
CERTAIN CITATION PRINCIPALS
AND
CERTAIN MEDASYS PRINCIPALS
DATED AS OF SEPTEMBER 15, 1998
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TABLE OF CONTENTS
Agreement and Plan of Reorganization
ARTICLE I
THE REORGANIZATION.......................................................................................1
1.01 General Outline of the Reorganization...........................................................1
1.02 The French IPO..................................................................................4
1.03 Actions by CITATION Principals and by MEDASYS Principals........................................4
1.04 The Exchange Offer..............................................................................5
1.05 CITATION Board of Directors Actions.............................................................5
1.06 Timing of Transactions..........................................................................6
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF MEDASYS
AND OF THE MEDASYS PRINCIPALS............................................................................6
2.01 Organization and Authority......................................................................6
2.02 Corporate Authorization; Records................................................................7
2.03 Subsidiaries of MEDASYS Subsidiaries............................................................8
2.04 Capitalization of MEDASYS.......................................................................8
2.05 Capitalization of the MEDASYS Subsidiaries......................................................9
2.06 Financial Statements............................................................................9
2.07 Reports........................................................................................11
2.08 Title to and Condition of Assets and Subsidiary Assets.........................................11
2.09 MEDASYS and MEDASYS Subsidiaries Real Property.................................................12
2.10 Contracts, Commitments, and Certain Loans......................................................13
2.11 Absence of Defaults............................................................................14
2.12 Absence of Undisclosed Liabilities.............................................................15
2.13 Tax and Labor Law Related Liabilities..........................................................15
2.14 Material Adverse Change........................................................................16
2.15 Legal Proceedings..............................................................................16
2.16 Governmental Compliance........................................................................17
2.17 Labor and Employment...........................................................................18
2.18 Material Interests of Certain Persons..........................................................19
2.19 Employee and Executive Manager Benefit Plans...................................................19
2.20 Conduct of MEDASYS and of MEDASYS Subsidiaries to Date.........................................20
2.21 [Reserved].....................................................................................22
2.22 Brokers, Investment Bankers, and Finders.......................................................22
2.23 Intellectual Property Matters..................................................................22
2.24 Year 2000 Compliant............................................................................23
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2.25 Accuracy of Information........................................................................23
2.26 MEDASYS Principals.............................................................................24
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CITATION
AND OF THE CITATION PRINCIPALS..........................................................................24
3.01 Organization and Authority.....................................................................24
3.02 Corporate Authorization; Records...............................................................25
3.03 Subsidiaries of CITATION Subsidiaries..........................................................27
3.04 Capitalization of CITATION.....................................................................27
3.05 Capitalization of the CITATION Subsidiaries....................................................27
3.06 Financial Statements...........................................................................28
3.07 Reports........................................................................................29
3.08 Title to and Condition of Assets and Subsidiary Assets.........................................29
3.09 CITATION and CITATION Subsidiaries Real Property...............................................30
3.10 Contracts, Commitments, and Certain Loans......................................................31
3.11 Absence of Defaults............................................................................32
3.12 Absence of Undisclosed Liabilities.............................................................33
3.13 Taxes..........................................................................................33
3.14 Material Adverse Change........................................................................34
3.15 Legal Proceedings..............................................................................34
3.16 Governmental Compliance........................................................................35
3.17 Labor and Employment...........................................................................36
3.18 Material Interests of Certain Persons..........................................................36
3.19 Employee Benefit Plans.........................................................................36
3.20 Conduct of CITATION and of CITATION Subsidiaries to Date.......................................37
3.21 [Reserved].....................................................................................39
3.22 Brokers, Investment Bankers, and Finders.......................................................39
3.23 Intellectual Property Matters..................................................................39
3.24 Year 2000 Complaint............................................................................40
3.25 Accuracy of Information........................................................................41
3.26 CITATION Principals............................................................................41
ARTICLE IV
CONDUCT OF BUSINESS PRIOR TO THE COMPLETION OF TRANSACTIONS.............................................41
4.01 Conduct of Businesses Prior to the Completion of the Exchange Offer............................41
4.02 Forbearances...................................................................................41
ARTICLE V
ADDITIONAL AGREEMENTS...................................................................................43
5.01 Access and Information.........................................................................43
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5.02 Proxy Statement/Prospectus; French Prospectus; Regulatory Matters..............................43
5.03 Shareholder Approval...........................................................................46
5.04 Support of Transactions; No Sale of Shares.....................................................46
5.05 Support by MEDASYS Conseil d'Administration....................................................47
5.06 Current Information............................................................................47
5.07 Expenses; Potential Investment by CITATION in MEDASYS..........................................48
5.08 Miscellaneous Agreements and Consents..........................................................49
5.09 Press Releases.................................................................................50
5.10 Employee Plans and Policies Matters............................................................50
5.11 Nonsolicitation and Exclusive Dealing..........................................................50
5.12 Further Assurances.............................................................................51
5.13 Fairness Opinion...............................................................................51
5.14 Additional Shares..............................................................................51
ARTICLE VI
CONDITIONS TO COMPLETION OF TRANSACTION.................................................................51
6.01 CITATION Shareholders Meeting--CITATION Principals.............................................51
6.02 The French IPO--CITATION.......................................................................52
6.03 The Exchange Offer--CITATION...................................................................53
6.04 The Exchange Offer--MEDASYS Principals.........................................................55
6.05 The Exchange Offer--MEDASYS....................................................................56
ARTICLE VII
TERMINATION, AMENDMENT, AND WAIVER......................................................................57
7.01 Termination....................................................................................57
7.02 Effect of Termination..........................................................................59
7.03 Amendment......................................................................................59
7.04 Waiver.........................................................................................60
ARTICLE VIII
GENERAL PROVISIONS......................................................................................60
8.01 Survival of Representations, Warranties, and Agreements........................................60
8.02 [Reserved].....................................................................................60
8.03 No Assignment; Successors and Assigns..........................................................60
8.04 Severability...................................................................................60
8.05 No Implied Waiver..............................................................................60
8.06 Headings.......................................................................................61
8.07 Entire Agreement...............................................................................61
8.08 Counterparts...................................................................................61
8.09 Notices........................................................................................61
8.10 Governing Law; Jurisdiction and Venue..........................................................63
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8.11 No Third Party Beneficiaries...................................................................63
8.12 Specific Performance...........................................................................63
SCHEDULES
Schedule 1.01(e)(1) CITATION Directors following Reorganization
Schedule 1.01(e)(2) CITATION Officers following Reorganization
Schedule 2.01 MEDASYS Subsidiaries
Schedule 2.02 Corporate Authorization; Records
Schedule 2.03 Subsidiaries of MEDASYS
Schedule 2.04 Capitalization of MEDASYS
Schedule 2.05 Capitalization of MEDASYS Subsidiaries
Schedule 2.06 Financial Statements
Schedule 2.08 Title to and Condition of Subsidiary Assets
Schedule 2.09 MEDASYS Real Property
Schedule 2.10 Contracts, Commitments, and Certain Loans
Schedule 2.11 Defaults
Schedule 2.12 Undisclosed Liabilities
Schedule 2.13 Taxes
Schedule 2.15 Legal Proceedings
Schedule 2.16 Governmental Compliance
Schedule 2.18 Material Interest of Certain Persons
Schedule 2.19 Employee Benefit Plans
Schedule 2.20 Conduct of MEDASYS and of MEDASYS Subsidiaries to
Date
Schedule 2.22 Brokers, Investment Bankers, and Finders
Schedule 2.23 Software Matters
Schedule 2.24 Year 2000 Compliant
Schedule 2.26 MEDASYS Principals
Schedule 3.01 CITATION Subsidiaries
Schedule 3.02 Corporate Authorization; Records
Schedule 3.03 Subsidiaries of CITATION Subsidiaries
Schedule 3.04 Capitalization of CITATION
Schedule 3.05 Capitalization of CITATION Subsidiaries
Schedule 3.06 Financial Statements
Schedule 3.08 Title to and Condition of Subsidiary Assets
Schedule 3.09 CITATION Real Property
Schedule 3.10 Contracts, Commitments, and Certain Loans
Schedule 3.11 Defaults
Schedule 3.12 Undisclosed Liabilities
Schedule 3.13 Taxes
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Schedule 3.15 Legal Proceedings
Schedule 3.16 Governmental Compliance
Schedule 3.18 Material Interest of Certain Persons
Schedule 3.19 Employee Benefit Plans
Schedule 3.20 Conduct of CITATION and of CITATION Subsidiaries to Date
Schedule 3.22 Brokers, Investment Bankers, and Finders
Schedule 3.23 Software Matters
Schedule 3.24 Year 2000 Compliant
Schedule 3.26 CITATION Principals
Schedule 4.02 Exceptions to Forebearances
EXHIBITS
A CITATION Principals and MEDASYS Principals
B Underwriting Agreement for French IPO with SPEF Technology and
EuroMidCaps Securities
C Underwriting Agreement for Exchange Offer with SPEF Technology
and EuroMidCaps Securities
D Forms of Employment Agreements with:
D-1 J. Xxxxxx Copper
X-0 Xxxxxxx X. Xxxxx
X-0 Xxxx-Xxxxx Xxxxxx
X-0 Xxxxxx Xxxxxxxxxx
E Forms of Stock Option Agreements
E-1 J. Xxxxxx Copper
E-2 Xxxxxxx X. Xxxxx
E-3 Xxxx-Xxxxx Lucani
E-4 Xxxxxx Xxxxxxxxxx
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AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "AGREEMENT") is made and
entered into as of the date last below written by and among CITATION COMPUTER
SYSTEMS, INC., a Missouri, U.S.A. corporation ("CITATION"), MEDASYS DIGITAL
SYSTEMS, a French private company limited by shares (societe anonyme)
("MEDASYS"), certain shareholders of CITATION set forth on EXHIBIT A hereto
under the heading "CITATION Principals" (the "CITATION PRINCIPALS"), and certain
shareholders of MEDASYS set forth on EXHIBIT A hereto under the heading "MEDASYS
Principals" (the "MEDASYS PRINCIPALS"):
WHEREAS, the respective Board of Directors of CITATION and the Board of
Directors of MEDASYS (Conseil d'Administration) have authorized the execution
and delivery of this Agreement and determined that entering into this Agreement
is in furtherance of the common interests of CITATION and MEDASYS and their
respective shareholders; and
WHEREAS, CITATION, MEDASYS, the CITATION Principals, and the
MEDASYS Principals desire to provide for certain undertakings, conditions,
representations, warranties, and covenants in connection with the transactions
contemplated by this Agreement;
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties, and covenants herein contained, the parties agree
as follows.
ARTICLE I
THE REORGANIZATION
1.01 GENERAL OUTLINE OF THE REORGANIZATION. Subject to the various
terms, provisions, and conditions set forth herein including, but not limited to
the conditions precedent set forth in Article VI hereof, the parties to this
Agreement intend to engage in a Reorganization involving CITATION and MEDASYS to
include, among others, the following events:
(a) At an annual or special meeting, the shareholders of
CITATION will vote upon one or more resolutions approving this
Agreement, the transactions contemplated herein, and such other matters
as CITATION shall determine to be necessary to permit it to complete
the transactions contemplated herein.
(b) CITATION will complete, in accordance with Xxxxxxx Xx.
00-000 dated July 2nd, 1996, the French Finance Department's Decision
dated December 28th,
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1995, Rule No. 95-01 of the French Securities Exchange Commission
(Regl. No. 95-01 de la Commission des Operations de Bourse) and all
applicable directives published by the New Market Company (Instruction
de la Societe du Nouveau Marche) (collectively the "FRENCH IPO
RULES") an initial public offering (admission) of its common shares,
par value $0.10 per share (the "CITATION COMMON SHARES") in France on
the New Market of the Bourse (Nouveau Marche), and thereafter such
shares shall be traded on the New Market of the Bourse. Up to 2,000,000
CITATION Common shares will be sold for a price of no less than U.S.
$5.00 per share. Such CITATION Common shares will also be listed for
trading on the Nasdaq National Market in the United States. This
portion of the Reorganization is referred to as the "FRENCH IPO," and
it shall be conducted in accordance with SECTION 1.02 below, subject to
the other terms and conditions of this Agreement.
(c) Either simultaneously with or upon completion of the
French IPO CITATION will offer to exchange (i) CITATION Common shares
for MEDASYS Common shares (actions ordinaires), par value FFR10 per
action (the "MEDASYS COMMON SHARES") to each of the holders of MEDASYS
Common shares and (ii) CITATION warrants for MEDASYS warrants to each
holder of MEDASYS warrants in accordance with the provisions, in
particular, of Xxxxxxx Xx. 00-000 dated July 2nd, 1996, the General
Rules of the Financial Market Council (Reglement General du
Conseil des Marches Financiers) and the General Rules No. 89-03 of
the French Securities Exchange Commission (Reglement No. 89-03 de la
Commission des Operations de Bourse) (collectively the "FRENCH
EXCHANGE OFFER RULES"), and, to the extent applicable, the United
States Securities Act of 1933, as amended, (the "SECURITIES ACT") and
the United State Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"). The offer will be to (i) exchange one CITATION Common
share for one MEDASYS Common share and (ii) one CITATION warrant for
one MEDASYS warrant. The CITATION Common shares issued pursuant to such
exchange will be listed for trading on the Nasdaq National Market in
the United States and the CITATION Common shares and warrants on the
New Market of the Bourse in France. This part of the Reorganization is
referred to as the "EXCHANGE OFFER" (Offre Publique d'Echange), and it
shall be conducted in accordance with SECTION 1.04 below, subject to
the other terms and conditions of this Agreement.
(d) Upon commencement of the Exchange Offer, the MEDASYS
Principals shall tender all of their MEDASYS Common shares and warrants
for exchange for CITATION Common shares and warrants, on a one share
for one share basis and a one warrant for one warrant basis pursuant to
the Exchange Offer in accordance with SECTION 1.03(B) below, subject to
the other terms and conditions of this Agreement.
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(e) Subsequent to completion of the French IPO and the
Exchange Offer the following actions will be taken:
(i) The Directors of CITATION will act to increase
the number of members of its Board of Directors from five to
nine and to appoint as Directors of CITATION the persons set
forth on SCHEDULE 1.01(e)(1) who are willing and able to serve
or such replacements as designated by the MEDASYS Principals
who are reasonably acceptable to CITATION.
(ii) The newly constituted Board of Directors of
CITATION will act to appoint as Officers of CITATION those
persons set forth on SCHEDULE 1.01(E)(2) who are willing and
able to serve, each of whom will hold the office(s) set forth
opposite his name, and authorize CITATION to offer to enter
into employment agreements with such officers in substantially
the forms set forth in EXHIBITS D-1 through D-4 hereto and
stock option agreements in substantially the forms set forth
in EXHIBIT E-1 through E-4.
(iii) The location of the corporation headquarters of
CITATION shall be confirmed as being in St. Louis, Missouri,
U.S.A.
(iv) The newly constituted Board of Directors of
CITATION will act promptly pursuant to prior approval by
CITATION's shareholders (if such approval is received) to file
an amendment to CITATION's Articles of Incorporation to change
the name of CITATION to "MEDASYS International, Inc."
(v) The newly constituted Board of Directors of
CITATION will act to grant to employees and officers of
MEDASYS who hold options to purchase MEDASYS Common shares
("MEDASYS STOCK OPTIONS"), options to purchase the same number
of CITATION Common shares at a rate equal to the rate for the
Exchange Offer (U.S. dollar equivalent) as the MEDASYS Stock
Options pursuant to CITATION's Incentive Stock Option Plan
("CITATION STOCK OPTIONS"), effective upon surrender of the
corresponding MEDASYS Stock Options.
(vi) The CITATION Common shares will be listed for
trading on the Nasdaq National Market in the United States and
the CITATION Common shares and warrants on the New Market of
the Bourse in France.
(f) If at least 95% of the MEDASYS voting rights are acquired
by CITATION pursuant to the Exchange Offer or otherwise, it is
anticipated that
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CITATION will cause a transaction eliminating the ownership of MEDASYS
Common shares by persons other than CITATION (offre publique de retrait
suivi d'un retrait obligatoire) to occur pursuant to Xxxxxxx Xx. 00-000
dated July 2nd, 1996, and the General Rules of the Financial Market
Council (Reglement General du Conseil des Marches Financiers).
1.02 THE FRENCH IPO. It is intended that the French IPO will be handled
by SPEF Technology and EuroMidCaps Securities (the "UNDERWRITERS") pursuant to
the underwriting agreement substantially in the form attached hereto as EXHIBIT
B; provided, however, that CITATION reserves the right to choose (an) additional
or alternative underwriter(s) with the written consent of MEDASYS, which consent
shall not be unreasonably withheld. The exact number of shares to be sold in the
French IPO and the price per share will be determined by CITATION and the
Underwriters based upon usual practices and procedures applicable to initial
public offerings on the New Market of the Bourse and consistent with applicable
provisions of the underwriting agreements and French securities laws. The goal
of the French IPO is to choose a number of CITATION Common shares and a price
per share that will produce a reasonable amount of proceeds for CITATION, which
shall not be less than FRF 60,000,000, and coordinate favorably with the
Exchange Offer. CITATION will commence and complete the French IPO as soon as
practicable after all applicable conditions set forth herein have been
satisfied.
1.03 ACTIONS BY CITATION PRINCIPALS AND BY MEDASYS PRINCIPALS.
(a) Subject to the applicable conditions set forth herein, and in
consideration of the agreements of MEDASYS and the MEDASYS Principals herein,
each of CITATION Principals agrees to vote or cause to be voted all CITATION
Common shares beneficially owned by such CITATION Principal as of the record
date of the 1998 Annual Meeting of Shareholders of CITATION or such other
meeting called to consider the approval of the transactions contemplated in this
Agreement (the "CITATION SHAREHOLDERS MEETING") in favor of each and every
matter submitted to the vote of the shareholders at such meeting that is in
furtherance of or a condition precedent to the carrying out or completion of the
transactions contemplated in this Agreement. As such, CITATION and MEDASYS are
hereby authorized to communicate to their respective shareholders that each of
the CITATION Principals has agreed to cast such votes.
(b) Subject to the applicable conditions set forth herein, and in
consideration of the agreements of CITATION and the CITATION Principals herein,
each of the MEDASYS Principals agrees that immediately upon the commencement of
the Exchange Offer by CITATION, such MEDASYS Principal will tender (and not
withdraw) all MEDASYS Common shares and all MEDASYS warrants beneficially owned
by such MEDASYS Principal pursuant to the terms of the Exchange Offer, subject
to the provisions of SECTION
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6.04. As such, CITATION is authorized to communicate to shareholders of MEDASYS
and others that each of the MEDASYS Principals will tender his MEDASYS Common
shares and MEDASYS warrants.
1.04 THE EXCHANGE OFFER. Either simultaneously with or as soon as
practicable after the French IPO has been completed and all applicable
conditions set forth in SECTIONS 6.03, 6.04, and 6.05 have been satisfied,
CITATION shall commence the Exchange Offer, which shall be made in accordance
with usual practices and procedures applicable to exchange offers in France
(with respect to shareholders of MEDASYS) and in accordance with the usual
practices and procedures applicable to exchange offers in the United States
(with respect to the U.S. shareholders of MEDASYS). The goal of the Exchange
Offer will be to have as many MEDASYS shareholders as reasonably practical agree
to exchange their MEDASYS Common shares for CITATION Common shares. It is
intended that the Exchange Offer will be handled by SPEF Technology and
EuroMidCaps Securities (the "EXCHANGE OFFER UNDERWRITERS") pursuant to the
underwriting agreement substantially in the form attached hereto as EXHIBIT C;
provided, however, that CITATION reserves the right to choose (an) additional or
alternative underwriter(s) with the written consent of MEDASYS, which consent
shall not be unreasonably withheld.
1.05 CITATION BOARD OF DIRECTORS ACTIONS. As soon as practicable after
the CITATION shareholders have approved an amendment to CITATION's Articles of
Incorporation authorizing such additional number of CITATION Common shares as
are necessary to complete the transactions contemplated herein, the Board of
Directors of CITATION will cause CITATION to file such amendment with the
Missouri Secretary of State. As soon as practicable after the completion of the
Exchange Offer, the Board of Directors of CITATION shall take such actions as
are necessary to appoint the persons listed in SCHEDULE 1.01(e)(1) as Directors
of CITATION, including adopting any resolutions or amendments to CITATION's
By-laws as may be necessary and filing required reports with all applicable
state and federal authorities. As soon as practicable after the completion of
the Exchange Offer, the Board of Directors of CITATION shall take such actions
as are necessary to appoint the persons to the officers set opposite their names
in SCHEDULE 1.01(e)(2), including adopting any resolutions or amendments to
CITATION's By-laws as may be necessary and filing required reports with all
applicable state and federal authorities, and authorize CITATION to offer to
enter into employment agreements with such officers in substantially the forms
set forth in EXHIBIT D-1 through D-4 hereto and stock option agreements
substantially in the forms set forth in EXHIBITS E-1 through E-4 hereto. As soon
as practicable after the closing of the Exchange Offer, the Board of Directors
of CITATION shall take all actions necessary to cause the amendment of
CITATION's Articles of Incorporation to change the name of CITATION to "MEDASYS
International, Inc.," including adopting any resolutions as may be necessary and
filing required instruments and reports with all applicable state and federal
authorities. As soon as practicable after the
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completion of the Exchange Offer, the Board of Directors of CITATION shall take
all actions necessary to substitute CITATION Stock Options for existing MEDASYS
Stock Options (and the MEDASYS Principals agree to surrender their MEDASYS Stock
Options in order to effect same). Notwithstanding the foregoing, the Board of
Directors of CITATION shall not be required to take any action that it is
advised in writing by competent legal counsel would be a breach of its fiduciary
duties in view of known facts and circumstances.
1.06 TIMING OF TRANSACTIONS. It is the intention of the parties hereto
for CITATION to simultaneously conduct both the French IPO and the Exchange
Offer, if possible. If such a simultaneous conducting of the two transactions is
achieved, the parties hereto agree that the last sentence of SECTION 5.07 (a)
and all of SECTION 5.07 (c) shall be deemed null and void and not a part of this
Agreement, but that all other provisions of this Agreement shall remain in
effect; if the French IPO and the Exchange Offer are not conducted
simultaneously, all provisions of this Agreement, including the last sentence of
SECTION 5.07 (a) and all of SECTION 5.07 (c) shall remain in effect.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF MEDASYS
AND OF THE MEDASYS PRINCIPALS
As a material inducement to CITATION and the CITATION Principals to
enter into and perform their obligations under this Agreement, and
notwithstanding any examinations, inspections, audits, and other investigations
heretofore and hereafter made by CITATION or the CITATION Principals, MEDASYS
hereby represents and warrants to CITATION and the CITATION Principals as set
forth in SECTION 2.01 through and including SECTION 2.25 of this Agreement, and
the MEDASYS Principals severally represent and warrant to CITATION and the
CITATION Principals as set forth in SECTION 2.26 of this Agreement, as follows:
2.01 ORGANIZATION AND AUTHORITY.
(a) MEDASYS is a corporation duly organized, validly existing, and in
good standing under the laws of France, and all other jurisdictions where its
ownership or leasing of property or the conduct of its business requires it to
be so qualified, and has corporate power and authority to own its properties and
assets and to carry on its business as it is now being conducted, which
jurisdictions are set forth on SCHEDULE 2.01.
(b) MEDASYS has no subsidiaries except those set forth on SCHEDULE 2.01
(the "MEDASYS SUBSIDIARIES" in this Article II and in such other places herein
as the context shall require). Each of the MEDASYS Subsidiaries is duly
authorized, validly existing, and
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in good standing in its place of incorporation and in all jurisdictions in which
it does business or owns or leases property, which jurisdictions are set forth
in SCHEDULE 2.01. Each of the MEDASYS Subsidiaries possesses all corporate power
and authority and holds all necessary regulatory approvals and licenses to own
and operate its respective properties and to carry out its respective businesses
as and where the same are now being conducted.
2.02 CORPORATE AUTHORIZATION; RECORDS.
(a) MEDASYS has the corporate power and authority to enter into this
Agreement and, subject to the approval, authorization or opinion of the New
Market Company (Societe du Nouveau Marche), the French Securities
Exchange Commission (la Commission des Operations de Bourse), the Financial
Market Council (Conseil des Marches Financiers), the French Department of
Finance and the Anti-trust Authorities (Direction de la Concurrence et de la
Consommation), to carry out its obligations hereunder. There are no votes
required of the holders of MEDASYS Common stock with respect to the transactions
contemplated in this Agreement. The execution, delivery, and performance of this
Agreement by MEDASYS and the consummation of the transactions contemplated
hereby have been duly authorized by the Conseil d'Administration of MEDASYS.
Subject to the approvals as aforesaid, this Agreement is the valid and binding
obligation of MEDASYS, enforceable against MEDASYS in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, and other laws now or hereafter in effect relating
to the enforcement of creditors' rights generally, and except that equitable
principles may limit the right to obtain specific performance or other equitable
remedies.
(b) Neither the execution, delivery, and performance by MEDASYS or the
MEDASYS Principals of this Agreement, nor the consummation of the transactions
contemplated hereby, nor compliance by MEDASYS with any of the provisions
hereof, will (a) except as set forth in SCHEDULE 2.02 attached hereto, violate,
conflict with, or result in a breach of any provisions of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration of,
or result in the creation of any lien, security interest, charge, or encumbrance
upon any of the properties or assets of MEDASYS or any of the MEDASYS
Subsidiaries under any of the terms, conditions, or provisions of (i) Statuts of
each, or (ii) except as set forth in SCHEDULE 2.02 attached hereto, any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement, or other
instrument or obligation to which MEDASYS or any of the MEDASYS Subsidiaries is
a party or by which it may be bound, or to which MEDASYS or any of the MEDASYS
Subsidiaries or any of the properties or assets of MEDASYS or any of the MEDASYS
Subsidiaries may be subject, or (b) subject to compliance with the statutes and
regulations referred to in this Section, violate any judgment, ruling, order,
writ, injunction,
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decree, or to the best of MEDASYS' knowledge, any statute, rule, or regulation
applicable to MEDASYS or any of the MEDASYS Subsidiaries or any of their
respective properties or assets.
(c) There is no proceeding pending, or as to which MEDASYS, the MEDASYS
Subsidiaries, or the MEDASYS Principals have received any notice of assertion
against MEDASYS or the MEDASYS Subsidiaries, that in any manner challenges or
seeks, or reasonably could be expected, to prevent, enjoin, alter, or materially
delay any of the transactions contemplated by this Agreement. None of MEDASYS,
the MEDASYS Subsidiaries, or the MEDASYS Principals are prohibited by any order,
writ, injunction, or decree of any governmental authority from completing the
transactions contemplated by this Agreement and no such proceeding is pending
against MEDASYS, the MEDASYS Subsidiaries, or the MEDASYS Principals that
questions the validity of this Agreement, any of the transactions contemplated
hereby or any action that has been taken by MEDASYS or the MEDASYS Subsidiaries
in connection herewith or in connection with any of the transactions
contemplated hereby.
(d) Other than in connection or in compliance with the applicable
provisions of the French IPO Rules, and the French Exchange Offer Rules
(collectively, the "FRENCH ACTS"), the Securities Act, the Exchange Act, the
securities or blue sky laws of the various states, or filings, consents,
reviews, authorizations, approvals, or notice of French Authorities set forth in
SECTION 2.02 of this Agreement, no notice to, filing with, exemption or review
by, or authorization, consent, or approval of, any public body or authority is
necessary for the consummation by MEDASYS of the transactions contemplated by
this Agreement.
(e) The minute books and stock records of MEDASYS and the MEDASYS
Subsidiaries are complete and correct in all material respects and accurately
reflect in all material respects all meetings, consents and other actions of the
organizers, incorporators, shareholders, conseil d'administration, and
committees of the conseil d'administration occurring since the organization of
each.
2.03 SUBSIDIARIES OF MEDASYS SUBSIDIARIES. Except as set forth in
SCHEDULE 2.03 attached hereto, the MEDASYS Subsidiaries have no subsidiaries and
do not control, or have any interest in any other corporation, partnership,
joint venture, or other business association.
2.04 CAPITALIZATION OF MEDASYS. The capital of MEDASYS amounts to the
sum of FRF46,208,300. It is divided into 4,620,830 MEDASYS Common shares each
with a par value of FRF 10 and fully paid up. The shares of the MEDASYS
Subsidiaries are held by MEDASYS and are free of any pledge, charge, claim,
escrow or any other measure of preventive attachment whatsoever. They are not
subject to any option, agreement, or
Agreement and Plan of Reorganization Page 8
15
restriction of any kind whatsoever, with respect both to their free disposal and
to any rights pertaining thereto. Since June 30, 1998, no MEDASYS Common shares
have been issued. Except as set forth in SCHEDULE 2.04, there are no other
shares of capital stock or other equity securities of MEDASYS outstanding and no
other options, warrants, scrip, rights to subscribe to, calls, or commitments of
any character whatsoever relating to, or securities or rights convertible into,
shares of any capital stock of MEDASYS, or contracts, commitments,
understandings, or arrangements by which MEDASYS is or may become bound to issue
additional shares of its capital stock or options, warrants, or rights to
purchase or acquire any additional shares of its capital stock. SCHEDULE 2.04
summarizes all plans and agreements for all options, warrants, scrip, rights to
subscribe to, calls, and commitments, and the number of shares for which each is
subject.
2.05 CAPITALIZATION OF THE MEDASYS SUBSIDIARIES. The capital stock of
each of the MEDASYS Subsidiaries is described in SCHEDULE 2.05 attached hereto
under the heading "Capitalization of MEDASYS Subsidiaries." MEDASYS has and will
have as of the commencement and completion of each of the French IPO and the
Exchange Offer good and marketable title to all then issued and outstanding
shares of common stock of each Subsidiary, free and clear of any liens, claims,
charges, encumbrances, and assessments of any kind or nature whatsoever, except
as set forth in SCHEDULE 2.05. There are no other shares of capital stock or
other equity securities of any of the MEDASYS Subsidiaries outstanding and no
outstanding options, warrants, script, rights to subscribe to, calls, or
commitments of any character whatsoever relating to, or securities or rights
convertible into, shares of any capital stock of each Subsidiary, or contracts,
commitments, understandings, or arrangements by which any such Subsidiary is or
may become bound to issue additional shares of capital stock or options,
warrants, or rights to purchase or acquire any additional shares of capital
stock. All of the issued and outstanding shares of common stock of each MEDASYS
Subsidiary are validly issued, fully paid, and nonassessable.
2.06 FINANCIAL STATEMENTS.
(a) Not later than 21 days following execution of this Agreement,
MEDASYS shall furnish CITATION with copies of the following financial statements
accurately translated into English:
(i) Consolidated balance sheets (Bilans consolides),
statements of income or loss (Comptes de resultat), together with
the notes thereto, as certified by MEDASYS' independent certified
public accountants (Commissaires aux comptes), for each of the years in
the 3-year period ended December 31, 1997;
Agreement and Plan of Reorganization Page 9
16
(ii) The unaudited balance sheet and the statement of income
or loss for each of the MEDASYS Subsidiaries at and for the period
ending December 31, 1997; and
(iii) The unaudited MEDASYS consolidated balance sheet and
statement of income or loss at and for the quarter ended June 30, 1998,
together with notes thereto.
(b) The financial statements referenced above in subsection (a) of this
Section are referred to collectively as the "MEDASYS FINANCIAL STATEMENTS" and
the June 30, 1998, consolidated balance sheet is referred to as the "MEDASYS
JUNE 30, 1998, BALANCE SHEET." The MEDASYS Financial Statements have been
prepared in accordance with the books and records of MEDASYS and the MEDASYS
Subsidiaries, separately, both (i) in accordance with French generally accepted
accounting principles (principes comptables generalement admis),
consistently applied, and (ii) in accordance with U.S. generally accepted
accounting principles, consistently applied, and present fairly the consolidated
financial position of MEDASYS and the financial position of the MEDASYS
Subsidiaries at the dates thereof and the consolidated results of their
operations and cash flows of MEDASYS and the MEDASYS Subsidiaries, except that
with respect to the unaudited MEDASYS Financial Statements referenced above in
subsection (a) of this Section, financial statement note disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been omitted and such unaudited MEDASYS Financial
Statements are subject to normal year-end adjustment, but nevertheless the
disclosures contained in such statements are adequate to make the information
presented not misleading.
(c) MEDASYS and the MEDASYS Subsidiaries have each prepared, kept, and
maintained through the date hereof true, correct, and complete financial and
other books and records of their affairs which fairly reflect their respective
assets, properties, liabilities, and operations.
(d) All of the assets and liabilities which are reflected in the
MEDASYS Financial Statements were acquired in the ordinary course of business,
except as set forth in SCHEDULE 2.06.
(e) The accounts receivable of MEDASYS and the MEDASYS Subsidiaries
shown on the MEDASYS June 30, 1998, Balance Sheet (including all long-term
accounts receivable) and all accounts receivable which have arisen subsequent to
June 30, 1998, represent sales made in the ordinary course of business, are
current and collectible and the same will be collected in full (net of stated
reserves for bad debts) in the ordinary course of business and are not subject
to any claims, offsets, allowances, or adjustments not reflected thereon. For
the financial statements referred to in SECTION 2.06(A), MEDASYS has
Agreement and Plan of Reorganization Page 10
17
consistently applied its revenue recognition policies and there have been no
changes in such revenue recognition policies or the applications thereof.
2.07 REPORTS. For the period commencing five years prior to the date of
this Agreement, MEDASYS and the MEDASYS Subsidiaries have filed all reports,
registrations, and statements, together with any required amendments thereto, in
a timely manner, that they were required to file with any authority or
administration pursuant to any legal, judicial, statutory, or contractual
obligations that may be applicable. All such reports and statements filed with
any such regulatory body or authority are collectively referred to herein as the
"MEDASYS REPORTS." As of their respective dates, the MEDASYS Reports complied in
all material respects with all rules and regulations promulgated by any
authority or administration pursuant to any legal, judicial, statutory, or
contractual obligations that may be applicable, as the case may be, and did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. MEDASYS and the MEDASYS Subsidiaries keep the records pertaining to
their business at their registered offices. The said records contain any
documents that may be necessary to deal with any complaint from third parties
and cover a period of time that is at least equal to the limitation period
provided by the laws currently in force. True, correct, and complete copies of
all MEDASYS Reports for the three years ended December 31,1997, and for the
period from January 1, 1998 through June 30, 1998, have been supplied by MEDASYS
to CITATION.
2.08 TITLE TO AND CONDITION OF ASSETS AND SUBSIDIARY ASSETS.
(a) Except as may be reflected in the MEDASYS Financial Statements,
MEDASYS and the MEDASYS Subsidiaries have, and at the commencement and
completion of each of the French IPO and the Exchange Offer will have, good and
marketable title to all of their respective properties and assets, including,
without limitation, those reflected on the MEDASYS June 30, 1998, Balance Sheet,
free and clear of any liens, charges, pledges, encumbrances, defects, claims, or
rights of third parties, except:
(i) as set forth in SCHEDULE 2.08 under the heading
"Encumbrances;" or
(ii) for liens for taxes, assessments, or other governmental
charges not yet delinquent; or
(iii) with respect to real property only, for such easements
and other encumbrances as do not individually or in the aggregate
materially and adversely affect the use or value of such real estate.
Agreement and Plan of Reorganization Page 11
18
(b) No material assets reflected on the MEDASYS June 30, 1998, Balance
Sheet, in respect of MEDASYS or the MEDASYS Subsidiaries have been sold, leased,
transferred, assigned, or otherwise disposed of since June 30, 1998, except in
the ordinary course of business or as set forth in SCHEDULE 2.08 under the
heading "Dispositions."
(c) All furniture, fixtures, vehicles, machinery, computer hardware and
shop equipment, equipment, and computer software owned or used by MEDASYS and
the MEDASYS Subsidiaries, including any of such items leased as a lessee and all
facilities and improvements comprising part of any owned or leased real
property, taken as a whole as to each of the foregoing, and with no single such
item being deemed of material importance, is fit for the purposes for which they
are currently used, will remain in the same level of order and repair as
currently exists through the completion of the Exchange Offer, and will remain
free of defects not currently existing and in the same operating condition as is
currently existing, subject only to normal wear and tear, and are not in need of
replacement, maintenance, or repair except for routine replacement, maintenance,
and repair and to the disposition in the ordinary course of business, and the
amounts at which they are valued on the MEDASYS June 30, 1998, Balance Sheet
reflects the normal valuation policy of MEDASYS in accordance with French and
U.S. generally accepted accounting principles. The properties and assets of
MEDASYS and the MEDASYS Subsidiaries constitute all of the properties and assets
necessary for the conduct of the business in substantially the same manner as
the business has heretofore been conducted. The operation by MEDASYS and the
MEDASYS Subsidiaries of such properties is in compliance in all material
respects with all applicable laws, ordinances, and rules and regulations of any
governmental authorities having jurisdiction.
2.09 MEDASYS AND MEDASYS SUBSIDIARIES REAL PROPERTY.
(a) Neither MEDASYS nor the MEDASYS Subsidiaries owns any real
property. The address, square footage, and other relevant details of each parcel
of real property leased by MEDASYS and the MEDASYS Subsidiaries as lessee or as
credit loaner as well as the name of the lessor, the date of the lease and each
amendment thereto is set forth in SCHEDULE 2.09 under the heading "MEDASYS REAL
PROPERTY" (the "MEDASYS REAL PROPERTY") and correct and complete copies of such
leases or credit loans have been delivered to CITATION.
(b) MEDASYS and the MEDASYS Subsidiaries enjoy peaceful possession of
all of the MEDASYS Real Property, free and clear of any liens created by MEDASYS
or a MEDASYS Subsidiary. In particular, all current leases executed by MEDASYS
and the MEDASYS Subsidiaries as lessee are in full force and effect, are valid
and effective in accordance with their respective terms, and there is not, under
any such leases, any existing default or event of default (or event which with
notice or lapse of time, or both, would constitute a default).
Agreement and Plan of Reorganization Page 12
19
(c) [Reserved]
(d) To the knowledge of MEDASYS and the MEDASYS Subsidiaries, there are
not administrative or regulatory measures that may limit their or CITATION's
right to free enjoyment of the real property at their disposal, at the present
time or in the future.
(e) Except as set forth in SCHEDULE 2.09 under the heading of "Property
Especially Mentioned," neither any MEDASYS Real Property nor any real property
now or, to the best of MEDASYS' knowledge, previously held or used by MEDASYS or
any of the MEDASYS Subsidiaries is or was subject to Xxxxxxx Xx. 00-000, dated
July 19, 1976 (Environmental Law concerning protected activity (Installations
classees)), nor is or was in violation of any national, federal, state,
provincial, or municipal environmental laws, regulations, or ordinances and
there are not nor have there been conditions existing on any of the MEDASYS Real
Property or on any real property held by any of the MEDASYS Subsidiaries, which
give rise to, or may give rise to, any such violation, or which require or may
in the future require remedial action under or with respect to such laws,
regulations, and ordinances.
2.10 CONTRACTS, COMMITMENTS, AND CERTAIN LOANS.
(a) Set forth on SCHEDULE 2.10 is a complete and accurate listing of
all agreements (written or oral) and other contracts (including any leases,
whether as lessor or as lessee) to which MEDASYS or any of the MEDASYS
Subsidiaries is a party which involve an annual commitment of funds by either of
more than FFR300,000 or which cannot be terminated by MEDASYS or any Subsidiary
on 30 days notice or less without liability.
(b) Except for the contracts and agreements required to be listed on
SCHEDULE 2.10, neither MEDASYS nor any of the MEDASYS Subsidiaries is a party to
or bound by any written or oral:
(i) agreement, contract, arrangement, understanding, or
commitment with any labor union or similar organization;
(ii) [Reserved]
(iii) franchise or license agreement;
(iv) employment, severance or termination pay, agency,
consulting, or similar agreement, contract, arrangement, understanding
or commitment;
Agreement and Plan of Reorganization Page 13
20
(v) loans or other obligations payable or owing to any
officer, director, or employee, except (A) salaries and wages incurred
and accrued in the ordinary course of business and/or (B) obligations
due in respect of any depository accounts maintained by any of the
foregoing at a bank in the ordinary course of business;
(vi) agreements to acquire any business, business entity, or
any significant line of business; and
(vii) other material agreement, contract, arrangement,
understanding or commitment extending beyond six months from the date
hereof that cannot be canceled without cost or penalty upon notice of
30 days or less.
(c) MEDASYS and each of the MEDASYS Subsidiaries each carry property,
casualty, liability, fidelity, and other insurance coverages as set forth in
SCHEDULE 2.10 under the heading "Insurance."
(d) True, correct, and complete copies of the agreements, contracts,
leases, insurance policies, and other documents referred to in SCHEDULE 2.10
have been made available to CITATION prior to the date hereof.
(e) Each of the agreements, contracts, leases, insurance policies, and
other documents referred to in SCHEDULE 2.10 is a valid, binding, and
enforceable obligation of MEDASYS and, to the knowledge of MEDASYS, the other
parties sought to be bound thereby, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, and other laws
now or hereafter in effect relating to the enforcement of creditors' rights
generally, and except that equitable principles may limit the right to obtain
specific performance or other equitable remedies.
2.11 ABSENCE OF DEFAULTS. Except as set forth in SCHEDULE 2.11 attached
hereto under the heading "Defaults," to its knowledge there are no pending
material disputes between MEDASYS or the MEDASYS Subsidiaries and the other
parties to the agreements, contracts, leases, insurance policies, and other
documents referred to in SCHEDULE 2.10, and all such agreements, contracts,
leases, insurance policies, and other documents are in full force and effect and
not in default in any material respect with respect to MEDASYS or the MEDASYS
Subsidiaries, or, to the best of MEDASYS' knowledge, any other party thereto,
and will, subject to their respective terms, continue in full force and effect
and will not be materially modified after the completion of the Exchange Offer
by reason of the Exchange Offer. The completion of the transactions contemplated
herein (including the change in control aspects thereof) will not give rise to
the right to any party to terminate or materially modify any such agreement or
contract. MEDASYS and the MEDASYS Subsidiaries are not a party to any agreement
or contract which, singly or in the aggregate, materially and
Agreement and Plan of Reorganization Page 14
21
adversely affects the business, operations, properties, assets or condition
(financial or otherwise) of MEDASYS or the MEDASYS Subsidiaries.
2.12 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in
SCHEDULE 2.12 attached hereto:
(a) Neither MEDASYS nor any of the MEDASYS Subsidiaries, as of the date
hereof, has any debts, liabilities, or obligations, whether accrued, absolute,
contingent, or otherwise and whether due or to become due, except:
(i) liabilities reflected in the MEDASYS June 30, 1998,
Balance Sheet; or
(ii) debts, liabilities or obligations incurred since June 30,
1998, in the ordinary and usual course of their respective businesses,
none of which are for breach of contract, breach of warranty, tort,
infringement, or lawsuits, and none of which materially and adversely
affect their respective financial positions or results of operations,
or businesses, assets, or operations.
(b) MEDASYS and each of the MEDASYS Subsidiaries were not, as of
December 31, 1997, and since such date have not become a party to, any contract
or agreement which affected, affects, or may reasonably be expected to affect,
materially and adversely, their respective financial positions, results of
operations, businesses, assets, or operations.
(c) [Reserved]
2.13 TAX AND LABOR LAW RELATED LIABILITIES. MEDASYS and each of the
MEDASYS Subsidiaries have timely filed or will timely file all national,
provincial, and local declarations and returns required to be filed at or prior
to the completion of the Exchange Offer. Concerning their respective activities,
and employees with respect to tax, custom, labor, and social security laws and
regulations, MEDASYS and each of the MEDASYS Subsidiaries have paid, or have set
up adequate reserves on the MEDASYS June 30, 1998, Balance Sheet for the payment
of, all charges, duties, and contributions of any nature whatsoever due under
applicable social security, custom and tax laws and regulations (hereinafter the
"TAXES") required to be paid in respect of the periods covered by such returns
and have set up adequate reserves on the MEDASYS June 30, 1998, Balance Sheet
for the payment of all Taxes anticipated to be payable in respect of the periods
subsequent to the last of said periods for which returns have been filed
(treating for this purpose the completion of the Exchange Offer as the last day
of an applicable period, whether or not it is in fact the last day of a taxable
period). MEDASYS and the MEDASYS Subsidiaries have withheld and paid any taxes
required to have been withheld and paid by MEDASYS or the MEDASYS Subsidiaries
in connection with amounts paid or owing to any employee,
Agreement and Plan of Reorganization Page 15
22
independent contractor, creditor, shareholders, or other party. To its
knowledge, neither MEDASYS nor any of the MEDASYS Subsidiaries will have any
material liability for any such Taxes in excess of the amounts so paid or
reserves so established and no material deficiencies for any tax, assessment, or
governmental charge have been proposed, asserted, or assessed (tentatively or
definitely) against MEDASYS or any of the MEDASYS Subsidiaries which would not
be covered by existing reserves. Neither MEDASYS nor any of the MEDASYS
Subsidiaries is delinquent in the payment of any material Taxes, assessment, or
governmental charge, nor has it requested any extension of time within which to
file any tax returns in respect of any fiscal year which have been audited and
have not since been filed and no requests for waivers of the time to assess any
Taxes are pending. Neither MEDASYS nor any of the MEDASYS Subsidiaries is
currently undergoing an audit by the French tax, customs, or social security
authorities. Except as set forth on SCHEDULE 2.13, there are not open tax
returns and no open tax years with respect to which applicable taxing
authorities have the right of examination and may seek increased assessments. No
extensions have been requested for any tax return for MEDASYS or any of the
MEDASYS Subsidiaries.
2.14 MATERIAL ADVERSE CHANGE. Except as otherwise disclosed in any of
the Schedules referenced in this Article II, since June 30, 1998, there has been
no material adverse change in the business, financial condition, results of
operations, or prospects of MEDASYS and the MEDASYS Subsidiaries taken as a
whole.
2.15 LEGAL PROCEEDINGS.
(a) Except as set forth in SCHEDULE 2.15, which sets forth with respect
to any such pending or threatened proceeding or investigation the forum, the
parties thereto, the subject matter thereof, and the amount of damages claimed
or other remedy requested: (i) there is no claim, action, suit, or proceeding,
or governmental proceeding or investigation, pending or to its knowledge
threatened against MEDASYS or any of the MEDASYS Subsidiaries or any of their
respective officers, directors, or employees in their capacity as such, or the
business, properties, or assets, or any of its managers, directors, officers, or
employees, in their respective capacities as such; and (ii) no such claim,
action, suit, or proceeding, or governmental proceeding or investigation, if
adversely determined, will affect materially and adversely the financial
conditions, results of operations, business, assets, or operations of MEDASYS
and the MEDASYS Subsidiaries, taken as a whole. Neither MEDASYS nor any of the
MEDASYS Subsidiaries is subject to any order, judgment, decree, injunction,
stipulation, or consent order of or with any court or governmental entity which
impedes its ability to conduct its business in the ordinary course in any
material way.
(b) There is no legal action or governmental proceeding or
investigation pending or to its knowledge threatened against MEDASYS or any of
the MEDASYS Subsidiaries that
Agreement and Plan of Reorganization Page 16
23
could prevent or adversely affect or seeks to prohibit the consummation of the
transactions contemplated hereby, nor is MEDASYS or any of the MEDASYS
Subsidiaries subject to any order of court or governmental authority having any
such effect.
(c) There are no material claims, actions, suits, or proceedings
pending or threatened against any director, officer, employee, or agent of
MEDASYS or any of the MEDASYS Subsidiaries which could give rise to a claim of
indemnification.
2.16 GOVERNMENTAL COMPLIANCE.
(a) MEDASYS and the MEDASYS Subsidiaries are in compliance in all
material respects with all laws, ordinances, rules, regulations, and orders, and
material licenses and permits that are applicable to each of MEDASYS and the
MEDASYS Subsidiaries, and except as set forth in SCHEDULE 2.16 under the heading
"Missing Permits," each of MEDASYS and the MEDASYS Subsidiaries holds all
permits, business licenses, certificates, franchises, and other similar items,
which, if not held, would materially adversely affect the financial condition,
operations, prospects, and/or ownership rights as to the assets and properties
of MEDASYS taken as a whole. No governmental authority has since January 1,
1996, challenged or questioned the legal right of MEDASYS or the MEDASYS
Subsidiaries to manufacture, offer, or sell any of its products or services in
the present manner or style thereof.
(b) Except as set forth in SCHEDULE 2.16, under the heading
"Environmental Liabilities," neither MEDASYS nor any of the MEDASYS Subsidiaries
is subject to a material liability as a result of its ownership, operation, or
use of any MEDASYS Real Property (a) that is contaminated by or contains any
hazardous waste, toxic substance, or related materials, including without
limitation, asbestos, PCBs, pesticides, herbicides, or any other substance or
waste that is hazardous to human health or the environment (collectively, a
"TOXIC SUBSTANCE"), or (b) on which any Toxic Substance has been stored,
disposed of, placed, or used in the construction thereof. No claim, action,
suit, proceeding, or investigation is pending or has been initiated against
MEDASYS or any of the MEDASYS Subsidiaries relating to the MEDASYS Real Property
before any court or other governmental authority or arbitration tribunal
relating to hazardous substances, pollution, or the environment, and there is no
outstanding judgment, order, writ, injunction, decree, or award against or
affecting MEDASYS or any of the MEDASYS Subsidiaries with respect to the same.
Except for statutory or regulatory restrictions of general application, no
national, federal, state, municipal or other governmental authority has placed
any restriction on the business of MEDASYS or the MEDASYS Subsidiaries which
reasonably could be expected to have a material adverse effect on the business,
financial condition, results of operations, or prospects of MEDASYS or the
MEDASYS Subsidiaries.
Agreement and Plan of Reorganization Page 17
24
2.17 LABOR AND EMPLOYMENT.
(a) No work stoppage involving MEDASYS or any of the MEDASYS
Subsidiaries is pending or, to the knowledge of MEDASYS, threatened. MEDASYS and
the MEDASYS Subsidiaries are not involved in, threatened with, or affected by,
any labor dispute, arbitration, lawsuit, or administrative proceeding which
could materially and adversely affect the business of MEDASYS and any of the
MEDASYS Subsidiaries.
(b) MEDASYS and the MEDASYS Subsidiaries employ respectively full-time
and part-time employees, on the date hereof, all as set forth on SCHEDULE 2.17.
(c) Except as disclosed in SCHEDULE 2.17, no special agreement has been
signed or otherwise entered into with trade union or personnel representatives
of the employees working for MEDASYS or the MEDASYS Subsidiaries. No employees
or agents working for MEDASYS and the MEDASYS Subsidiaries receive a
compensation proportional to profits or turnover, except as set forth on
SCHEDULE 2.17.
(d) MEDASYS and the MEDASYS Subsidiaries have fulfilled all of their
respective obligations under applicable law and any collective bargaining
agreement towards the employees working for them that a reasonable employer in
the business would be aware of, and in particular the obligations with respect
to the payment of minimum salaries. All employment contracts (contrats de
travail) and all independent worker contracts (contrats d'honoraires) entered
into by MEDASYS or any of the MEDASYS Subsidiaries meet all applicable
requirements of French law, and the independent worker contracts present all of
the characteristics of contrats d'honoraires under French law, and are not, in
particular, susceptible to recharacterization as employment contracts. No strike
or similar labor trouble has interrupted the business of MEDASYS and MEDASYS
Subsidiaries during the five years prior to the date hereof.
(e) No written or oral commitment or undertaking has been made to
employees of MEDASYS and the MEDASYS Subsidiaries with respect to any future
increase of salaries, compensation, or other benefits. No group dismissals or
resignations are currently in progress among their employees.
(f) No stock option plan or special compensation or severance pay
arrangement that would be effective upon the change of control of MEDASYS has
been concluded with or promised to any employees, directors, or the corporate
officials (mandataires sociaux) of MEDASYS
(g) Neither MEDASYS nor any MEDASYS Subsidiaries have contracted any
obligations towards members of their personnel or their corporate officials
(mandataires
Agreement and Plan of Reorganization Page 18
25
sociaux), whether current or former, or the assignees thereof, in particular in
the form of immediate or deferred compensation, including pension, retirement
supplement, or surviving spouse pension nor have they granted any increase in
salary, whether individual or collective since June 30, 1998, except as set
forth on SCHEDULE 2.17.
(h) Neither MEDASYS nor any MEDASYS Subsidiaries has signed or
otherwise entered into any consulting agreements, employment contracts for a
fixed term the duration of which exceeds one year, or entered into any special
commitments in connection with employment contracts, consultancy agreements, or
other work-related arrangements outside the ordinary course of business, except
as set forth on SCHEDULE 2.10 or SCHEDULE 2.17.
(i) MEDASYS and the MEDASYS Subsidiaries have paid or accrued in full
all wages, salaries, commissions, bonuses, and other compensation (including
severance and vacation benefits) for all services performed by their employees,
independent contractors, former employees, and former independent contractors.
(j) MEDASYS and the MEDASYS Subsidiaries have fulfilled all of their
respective material obligations under applicable law with respect to employee
representatives.
2.18 MATERIAL INTERESTS OF CERTAIN PERSONS. Except as set forth on
SCHEDULE 2.18, to the knowledge of MEDASYS, no officer or director of MEDASYS or
any of the MEDASYS Subsidiaries has any material interest in any material
contract or property (real or personal, tangible or intangible), used in or
pertaining to the business of MEDASYS or such Subsidiary.
2.19 EMPLOYEE AND EXECUTIVE MANAGER BENEFIT PLANS. There are set forth
in SCHEDULE 2.19 all pension, retirement, stock option, stock purchase, stock
ownership, restricted stock, savings, stock appreciation right, profit sharing,
deferred compensation, consulting, bonus, group insurance, cafeteria, severance,
and other employee or executive manager benefit, incentive, and welfare
policies, contracts, plans, and arrangements, and all agreements related
thereto, in respect of any of the present or former directors, officers, or
other employees of MEDASYS and the MEDASYS Subsidiaries (collectively, "EMPLOYEE
PLANS OR POLICIES"). Except as set forth in SCHEDULE 2.19, all Employee Plans or
Policies covering or applying to employees of MEDASYS or any MEDASYS Subsidiary
in the United States currently comply and have at all relevant times complied in
all material respects with all applicable laws, requirements, and orders under
the United States Employee Retirement Income Security Act of 1974, as amended
("ERISA"), the United States Internal Revenue Code of 1986, as amended (the
"CODE"), and state or provincial law. With respect to each Employee Plan or
Policy covering or applying to employees in the United States which is a pension
plan (as defined in Section 3(2) of ERISA) (the "PENSION PLANS"), except
Agreement and Plan of Reorganization Page 19
26
as set forth in SCHEDULE 2.19: (a) no Pension Plan is a "multi-employer plan"
within the meaning of Section 3(37) of ERISA; (b) each Pension Plan, to the
extent necessary and applicable, is "qualified" within the meaning of Section
401(a) of the Code, and each related trust, if any, is exempt from taxation
under Section 501(a) of the Code; (c) the present value of all benefits vested
and all benefits accrued under each Pension Plan which is subject to Title IV of
ERISA did not, in each case, as of the last applicable annual valuation date (as
indicated on SCHEDULE 2.19), exceed the value of the assets of the Pension Plans
allocable to such vested or accrued benefits; (d) no Pension Plan or any trust
created thereunder, nor any trustee, fiduciary, or administrator thereof, has
engaged in a "prohibited transaction" within the meaning of Section 4975 of the
Code or Section 406 of ERISA, which could subject such plan or trust, or any
trustee, fiduciary, or administrator thereof, or any party dealing with any such
plan or trust, to the tax or penalty on prohibited transactions imposed by said
Section 4975 or by Section 502(l) of ERISA; (e) no Pension Plan or any trust
created thereunder has been terminated, nor have there been any "reportable
events" with respect to any Pension Plan, as that term is defined in Section
4043 of ERISA; and (f) no Pension Plan or any trust created thereunder has
incurred any "accumulated funding deficiency," as such term is defined in
Section 302 of ERISA (whether or not waived), since the effective date of ERISA.
Except as set forth on SCHEDULE 2.19, MEDASYS is not contemplating amending,
modifying, or terminating any Employee Plans or Policies or any Pension Plans,
or establishing any new plan, of MEDASYS or any MEDASYS Subsidiary.
2.20 CONDUCT OF MEDASYS AND OF MEDASYS SUBSIDIARIES TO DATE. Except as
disclosed in SCHEDULE 2.20, from and after June 30, 1998:
(a) MEDASYS and the MEDASYS Subsidiaries have carried on their
respective businesses in the ordinary and usual course consistent with their
past practices;
(b) Neither MEDASYS nor any of the MEDASYS Subsidiaries has issued or
sold any of its capital stock or any corporate debt securities which should,
under French generally accepted accounting principles (principes comptables
generalement admis), be classified as long-term debt on its balance sheet
(except pursuant to outstanding options, warrants, or other rights to purchase
such capital stock);
(c) MEDASYS has not granted any option for the purchase of its capital
stock, effected any stock split, or otherwise changed its capitalization;
(d) MEDASYS has not declared, set aside, or paid any dividend or other
distribution in respect of its capital stock, or, directly or indirectly,
redeemed or otherwise acquired any of its capital stock;
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(e) Neither MEDASYS nor any of the MEDASYS Subsidiaries has incurred
any material obligation or liability (absolute or contingent), except normal
trade or business obligations or liabilities incurred in the ordinary course of
business, or mortgaged, pledged, or subjected to lien, claim, security interest,
charge, encumbrance, or restriction on any of its assets or properties;
(f) Neither MEDASYS nor any of the MEDASYS Subsidiaries has discharged
or satisfied any material lien, mortgage, pledge, claim, security interest,
charge, encumbrance, or restriction or paid any material obligation or liability
(absolute or contingent), other than in the ordinary course of business;
(g) Neither MEDASYS nor any of the MEDASYS Subsidiaries has sold,
assigned, transferred, leased, exchanged, or otherwise disposed of any of its
properties or assets other than for a fair consideration in the ordinary course
of business;
(h) Neither MEDASYS nor any of the MEDASYS Subsidiaries has, except
for hiring and terminating employees in the ordinary course of business:
increased the rate of compensation of, or paid any bonus to, any of its
directors, officers, or other employees, except merit or promotion increases in
accordance with existing policy or pursuant to any statutory scheme; entered
into any new, or amended or supplemented any existing employment, management,
consulting, deferred compensation, severance, or other similar contract; entered
into, terminated, or substantially modified any Employee Plan or Policy in
respect of any of its present or former directors, officers, or other employees;
or agreed to do any of the foregoing;
(i) Neither MEDASYS nor any of the MEDASYS Subsidiaries has suffered
any material damage, destruction, or loss, whether as the result of fire,
explosion, earthquake, accident, casualty, labor trouble, requisition, or taking
of property by any government or any agency of any government, flood, windstorm,
embargo, riot, act of God or the enemy, or other similar or dissimilar casualty
or event or otherwise, and whether or not covered by insurance; and
(j) Neither MEDASYS nor any of the MEDASYS Subsidiaries has entered
into any material transaction, contract, or commitment outside the ordinary
course of its business.
(k) Neither MEDASYS nor any of the MEDASYS Subsidiaries has made a
change in its accounting policies, principles, or practices.
(l) Neither MEDASYS nor any of the MEDASYS Subsidiaries has made a
reduction in any balance sheet reserves, except for related cash payments.
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2.21 [RESERVED]
2.22 BROKERS, INVESTMENT BANKERS, AND FINDERS. Neither MEDASYS, the
MEDASYS Subsidiaries, nor any of their respective officers, directors, or
employees has employed any broker, investment banker, finder or incurred any
liability for any financial advisory fees, brokerage fees, commissions,
investment banker fees or commissions, or finder's fees, except as described in
SCHEDULE 2.22, and no broker, investment banker, or finder has acted directly or
indirectly for MEDASYS and/or the MEDASYS Subsidiaries in connection with this
Agreement or the transactions contemplated hereby, except as described in
SCHEDULE 2.22.
2.23 INTELLECTUAL PROPERTY MATTERS.
(a) As used herein "MEDASYS SOFTWARE" shall include (i) all proprietary
software and related software system(s), including but not limited to all
algorithms, flow charts, logic diagrams and listings which pertain to MEDASYS'
proprietary system of computer programs, either in source or binary form
(including both software and firmware), specifications and other materials
(including, but not limited to techniques, concepts and know-how implicit
therein) relating to said computer programs, including documentation,
confidential supporting documentation, escrow agreements, and other printed
descriptive documents provided to or for the use of the customers of MEDASYS, or
otherwise used by MEDASYS for commercial purposes, and (ii) all software listed
under the heading "MEDASYS Software" in SCHEDULE 2.23.
(b) MEDASYS is the sole owner of the MEDASYS Software, free and clear
of any liens, encumbrances, licenses, transfer agreements, infringements,
enforceable claims, and domestic or foreign government regulations, except as
set forth in SCHEDULE 2.23, under the heading "Exceptions to Title."
(c) All of the MEDASYS Software was conceived and developed by MEDASYS,
except as set forth in SCHEDULE 2.23 under the heading "Third Party Developed
Software."
(d) Neither the MEDASYS Software nor any significant part thereof is in
the public domain. The MEDASYS Software is in all material respects proprietary
to MEDASYS. MEDASYS has the full right, power, and authority to disclose the
MEDASYS Software to CITATION. The MEDASYS Software disclosed to CITATION
hereunder does not infringe any patent, copyright, trademark, development,
ownership, or any other proprietary right of any other person or entity.
(e) There are no asserted, and MEDASYS is unaware of any unasserted,
claim or demand against MEDASYS regarding the MEDASYS Software, which could or
would in
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any way impede or interfere with the commercial use of the MEDASYS Software upon
completion of the transactions contemplated herein, except as set forth in
SCHEDULE 2.23 under the heading "Claims."
(f) MEDASYS has the full and sole right to disclose the MEDASYS
Software to CITATION and to transfer title of the MEDASYS Software.
(g) MEDASYS and each of the MEDASYS Subsidiaries has met all material
regulatory requirements to sell its software commercially to customers in each
market in which it sells such software, except as set forth in SCHEDULE 2.23
under the heading "Missing Regulatory Requirements."
(h) SCHEDULE 2.23 sets forth a complete and correct list of all
patents, trademarks, trade names and other intellectual property rights of
MEDASYS and the MEDASYS Subsidiaries. MEDASYS and the MEDASYS Subsidiaries own
or have the exclusive right to use pursuant to license, sublicense, agreement or
permission all intellectual property rights necessary for the operation of their
respective businesses as presently conducted. MEDASYS and the MEDASYS
Subsidiaries have not interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any intellectual property rights of third
parties, and MEDASYS has not received any written notice alleging any such
interference, infringement, misappropriation, or violation (including any such
claim that MEDASYS and the MEDASYS Subsidiaries must license or refrain from
using any intellectual property rights of any third party). To the knowledge of
MEDASYS, no third party has interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any intellectual property rights of MEDASYS
and the MEDASYS Subsidiaries in connection with their respective businesses or
operations.
2.24 YEAR 2000 COMPLIANT. Except as set forth on SCHEDULE 2.24, to the
best knowledge of MEDASYS, all computer software and hardware sold by, licensed
by, or utilized by MEDASYS or any MEDASYS Subsidiary is, or is reasonably
expected to be, Year 2000 compliant, which, for purposes of this Agreement,
shall mean that the data outside the range 1900-1999 will be correctly processed
in any level of computer hardware or software including, but not limited to,
microcode, firmware, applications programs, files and data bases. All computer
software is, or MEDASYS is taking steps to ensure that all computer software
will be, designed to be used prior to, during and after the calendar year 2000
A.D., and such software will operate during each such time period without
material error relating to date data, specifically including any error relating
to, or the product of, date data that represents or references different
centuries or more than one century.
2.25 ACCURACY OF INFORMATION. The statements contained in this
Agreement, the Schedules, and in any other written document executed and
delivered by or on behalf of
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MEDASYS and the MEDASYS Subsidiaries pursuant to the terms of this Agreement are
true and correct in all material respects, and such statements and documents do
not omit any material fact necessary to make the statements contained therein
not misleading.
2.26 MEDASYS PRINCIPALS.
(a) Each of the MEDASYS Principals beneficially owns the number of
MEDASYS Common shares and MEDASYS warrants set opposite such Principal's name on
SCHEDULE 2.26. Each MEDASYS Principal holds such shares and warrants free of any
pledge, charge, claim, escrow or any other measure of preventive attachment
whatsoever, except as set forth in SCHEDULE 2.26. Such shares are not subject to
any option, agreement, or restriction of any kind whatsoever, with respect both
to their free disposal and to any rights pertaining thereto.
(b) Each MEDASYS Principal has the capacity and authority to enter into
this Agreement and to carry out the terms hereof. Subject to the approvals set
forth in SECTION 2.02 and SECTION 3.02, this Agreement is the valid and binding
agreement of the MEDASYS Principals, enforceable against the MEDASYS Principals
in accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, and other laws
now or hereafter in effect relating to the enforcement of creditor's rights
generally, and except that equitable principals may limit the right to obtain
specific performance or other equitable remedies.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CITATION
AND OF THE CITATION PRINCIPALS
As a material inducement to MEDASYS and the MEDASYS Principals to enter
into and perform their respective obligations under this Agreement, and
notwithstanding any examinations, inspections, audits, or other investigations
made by MEDASYS or the MEDASYS Principals, CITATION hereby represents and
warrants to MEDASYS and the MEDASYS Principals as set forth in SECTION 3.01
through SECTION 3.25 of this Agreement, and the CITATION Principals severally
represent to MEDASYS and the MEDASYS Principals as set forth in SECTION 3.26, as
follows:
3.01 ORGANIZATION AND AUTHORITY.
(a) CITATION is a corporation duly organized, validly existing, and in
good standing under the laws of Missouri, and all other jurisdictions where its
ownership or leasing of property or the conduct of its business requires it to
be so qualified, and has
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31
corporate power and authority to own its properties and assets and to carry on
its business as it is now being conducted, which jurisdictions are set forth on
SCHEDULE 3.01.
(b) CITATION has no subsidiaries except those set forth on SCHEDULE
3.01 (the "CITATION SUBSIDIARIES" in this Article III and in such other places
herein as the context shall require). Each of the CITATION Subsidiaries is duly
authorized, validly existing, and in good standing in its place of incorporation
and in all jurisdictions in which it does business or owns or leases property,
which jurisdictions are set forth in SCHEDULE 3.01. Each of the CITATION
Subsidiaries possesses all corporate power and authority and holds all necessary
regulatory approvals and licenses to own and operate its respective properties
and to carry out its respective businesses as and where the same are now being
conducted.
3.02 CORPORATE AUTHORIZATION; RECORDS.
(a) CITATION has the corporate power and authority to enter into this
Agreement and, subject to the approval, authorization or opinion of the U.S.
Securities and Exchange Commission, and the New Market Company (Societe du
Nouveau Marche), the French Securities Exchange Commission (la Commission des
Operations de Bourse), the Financial Market Council (Conseil des Marches
Financiers), the French Department of Finance and the Anti-trust Authorities
(Direction de law Concurrence et de la Consommation), to carry out its
obligations hereunder. The only shareholder votes of CITATION required with
respect to the transactions contemplated in this Agreement are approvals of each
of: (i) an amendment for CITATION's Articles of Incorporation to authorize
additional CITATION Common shares for issuance pursuant to (A) the French IPO,
and (B) the Exchange Offer; (ii) an amendment to CITATION's Articles of
Incorporation to authorize the proposed name change to "MEDASYS International,
Inc.," effective upon completion of the Exchange Offer; (iii) either an
amendment to the existing CITATION Incentive Stock Option Plan or adoption of
additional stock option plan(s) to accommodate the anticipated number of
CITATION Common shares underlying options granted pursuant to the transactions
contemplated in this Agreement; and (iv) approval of this Agreement as a whole.
The execution, delivery, and performance of this Agreement by CITATION and the
consummation of the transactions contemplated hereby have been duly authorized
by the Board of Directors of CITATION. Subject to the approvals as aforesaid,
this Agreement is the valid and binding obligation of CITATION, enforceable
against CITATION in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium,
and other laws now or hereafter in effect relating to the enforcement of
creditors' rights generally, and except that equitable principles may limit the
right to obtain specific performance or other equitable remedies.
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(b) Neither the execution, delivery, and performance by CITATION of
this Agreement, nor the consummation of the transactions contemplated hereby,
nor compliance by CITATION with any of the provisions hereof, will (a) except as
set forth in SCHEDULE 3.02 attached hereto, violate, conflict with, or result in
a breach of any provisions of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration of, or result in the creation of any lien,
security interest, charge, or encumbrance upon any of the properties or assets
of CITATION or any of the CITATION Subsidiaries under any of the terms,
conditions, or provisions of (i) the articles of incorporation or by-laws of
each, or (ii) except as set forth in SCHEDULE 3.02 attached hereto, any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement, or other
instrument or obligation to which CITATION or any of the CITATION Subsidiaries
is a party or by which it may be bound, or to which CITATION or any of the
CITATION Subsidiaries or any of the properties or assets of CITATION or any of
the CITATION Subsidiaries may be subject, or (b) subject to compliance with the
statutes and regulations referred to in this Section, violate any judgment,
ruling, order, writ, injunction, decree, or to the best of CITATION's knowledge,
any statute, rule, or regulation applicable to CITATION or any of the CITATION
Subsidiaries or any of their respective properties or assets.
(c) There is no proceeding pending, or as to which CITATION, the
CITATION Subsidiaries, or the CITATION Principals have received any notice of
assertion against CITATION or the CITATION Subsidiaries, that in any manner
challenges or seeks, or reasonably could be expected, to prevent, enjoin, alter,
or materially delay any of the transactions contemplated by this Agreement. None
of CITATION, the CITATION Subsidiaries, or the CITATION Principals are
prohibited by any order, writ, injunction, or decree of any governmental
authority from completing the transactions contemplated by this Agreement and no
such proceeding is pending against CITATION, the CITATION Subsidiaries, or the
CITATION Principals that questions the validity of this Agreement, any of the
transactions contemplated hereby or any action that has been taken by CITATION
or the CITATION Subsidiaries in connection herewith or in connection with any of
the transactions contemplated hereby.
(d) Other than in connection or in compliance with the applicable
provisions of the French Acts, the Securities Act, the Exchange Act, the
securities or blue sky laws of the various states, or filings, consents,
reviews, authorizations, approvals, or notice of French Authorities set forth in
SECTION 3.02 of this Agreement, no notice to, filing with, exemption or review
by, or authorization, consent, or approval of, any public body or authority is
necessary for the consummation by CITATION of the transactions contemplated by
this Agreement.
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(e) The minute books and stock records of CITATION and the CITATION
Subsidiaries are complete and correct in all material respects and accurately
reflect in all material respects all meetings, consents and other actions of the
organizers, incorporators, shareholders, boards of directors, and committees of
the boards of directors occurring since the organization of each.
3.03 SUBSIDIARIES OF CITATION SUBSIDIARIES. Except as set forth in
SCHEDULE 3.03 attached hereto, the CITATION Subsidiaries have no subsidiaries
and do not control, or have any interest in any other corporation, partnership,
joint venture, or other business association.
3.04 CAPITALIZATION OF CITATION. The authorized stock of CITATION
consists of 10,000,000 shares of CITATION Common and 5,000,000 shares of
preferred stock, par value $0.01 per share. Since June 30, 1998, no CITATION
Common shares have been issued. Except as set forth in SCHEDULE 3.04, there are
no other shares of capital stock or other equity securities of CITATION
outstanding and no other options, warrants, scrip, rights to subscribe to,
calls, or commitments of any character whatsoever relating to, or securities or
rights convertible into, shares of any capital stock of CITATION, or contracts,
commitments, understandings, or arrangements by which CITATION is or may become
bound to issue additional shares of its capital stock or options, warrants, or
rights to purchase or acquire any additional shares of its capital stock.
SCHEDULE 3.04 summarizes all plans and agreements for all options, warrants,
scrip, rights to subscribe to, calls, and commitments, and the number of shares
for which each is subject. All of the issued and outstanding CITATION Common
shares are validly issued, fully paid, and nonassessable, and have not been
issued in violation of any preemptive right to any shareholder of CITATION.
3.05 CAPITALIZATION OF THE CITATION SUBSIDIARIES. The authorized
capital stock of each of the CITATION Subsidiaries is described in SCHEDULE 3.05
attached hereto under the heading "Capitalization of CITATION Subsidiaries."
CITATION has and will have as of the commencement and completion of each of the
French IPO and the Exchange Offer good and marketable title to all then issued
and outstanding shares of common stock of each Subsidiary, free and clear of any
liens, claims, charges, encumbrances, and assessments of any kind or nature
whatsoever, except as set forth in SCHEDULE 3.05. There are no other shares of
capital stock or other equity securities of any of the CITATION Subsidiaries
outstanding and no outstanding options, warrants, script, rights to subscribe
to, calls, or commitments of any character whatsoever relating to, or securities
or rights convertible into, shares of any capital stock of each Subsidiary, or
contracts, commitments, understandings, or arrangements by which any such
Subsidiary is or may become bound to issue additional shares of capital stock or
options, warrants, or rights to purchase or acquire any additional
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34
shares of capital stock. All of the issued and outstanding shares of common
stock of each CITATION Subsidiary are validly issued, fully paid, and
nonassessable.
3.06 FINANCIAL STATEMENTS.
(a) Not later than 21 days following execution of this Agreement,
CITATION shall furnish MEDASYS with copies of the following financial
statements:
(i) Consolidated balance sheets, statements of income or loss,
statements of cash flows, and statements of shareholders' equity,
together with the notes thereto, as certified by CITATION's independent
certified public accountants, for each of the years in the 3-year
period ended March 31, 1998;
(ii) The unaudited balance sheet and the statement of income
or loss for each of the CITATION Subsidiaries at and for the period
ending March 31, 1998; and
(iii) The unaudited CITATION consolidated balance sheet and
statement of income or loss at and for the quarter ended June 30, 1998,
together with notes thereto.
(b) The financial statements referenced above in subsection (a) of this
Section are referred to collectively as the "CITATION FINANCIAL STATEMENTS," and
the June 30, 1998, consolidated balance sheet is referred to as the "CITATION
JUNE 30, 1998, BALANCE SHEET." The CITATION Financial Statements have been
prepared in accordance with the books and records of CITATION and the CITATION
Subsidiaries in accordance with U.S. generally accepted accounting principles
consistently applied, and present fairly the consolidated financial position of
CITATION and the financial position of the CITATION Subsidiaries at the dates
thereof and the consolidated results of their operations and cash flows of
CITATION, except that with respect to the unaudited CITATION Financial
Statements referenced above in subsection (a) of this Section, financial
statement note disclosures normally included in financial statements prepared in
accordance with U.S. generally accepted accounting principles have been omitted
and such unaudited CITATION Financial Statements are subject to normal year-end
adjustment, but nevertheless the disclosures contained in such statements are
adequate to make the information presented not misleading.
(c) CITATION and the CITATION Subsidiaries have each prepared, kept,
and maintained through the date hereof true, correct, and complete financial and
other books and records of their affairs which fairly reflect their respective
assets, properties, liabilities, and operations.
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(d) All of the assets and liabilities which are reflected in the
CITATION Financial Statements were acquired in the ordinary course of business,
except as set forth in SCHEDULE 3.06.
(e) The accounts receivable of CITATION and the CITATION Subsidiaries
shown on the CITATION June 30, 1998, Balance Sheet (including all long-term
accounts receivable) and all accounts receivable which have arisen subsequent to
June 30, 1998, represent sales made in the ordinary course of business, are
current and collectible and the same will be collected in full (net of stated
reserves for bad debts) in the ordinary course of business and are not subject
to any claims, offsets, allowances, or adjustments not reflected thereon. For
the financial statements referred to in SECTION 3.06(a), CITATION has
consistently applied its revenue recognition policies and there have been no
changes in such revenue recognition policies or the application thereof.
3.07 REPORTS. For the period commencing five years prior to the date of
this Agreement, CITATION and the CITATION Subsidiaries have filed all reports,
registrations, and statements, together with any required amendments thereto, in
a timely manner, that they were required to file with U.S. Securities and
Exchange Commission ("SEC") under the Securities Act and the Exchange Act. All
such reports and statements filed with any such regulatory body or authority are
collectively referred to herein as the "CITATION REPORTS." As of their
respective dates, the CITATION Reports complied in all material respects with
all rules and regulations promulgated by the SEC, and did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. CITATION and the
CITATION Subsidiaries keep the records pertaining to their business at their
registered offices. The said records contain any documents that may be necessary
to deal with any complaint from third parties and cover a period of time that is
at least equal to the limitation period provided by the laws currently in force.
True, correct, and complete copies of all CITATION Reports for the three years
ended March 31, 1998, and for the period from April 1, 1998 through June 30,
1998, have been supplied by CITATION to MEDASYS.
3.08 TITLE TO AND CONDITION OF ASSETS AND SUBSIDIARY ASSETS.
(a) Except as may be reflected in the CITATION Financial Statements,
CITATION and the CITATION Subsidiaries have, and at the commencement and
completion of each of the French IPO and the Exchange Offer will have, good and
marketable title to all of their respective properties and assets, including,
without limitation, those reflected on the CITATION June 30, 1998, Balance
Sheet, free and clear of any liens, charges, pledges, encumbrances, defects,
claims, or rights of third parties, except:
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(i) as set forth in SCHEDULE 3.08 under the heading
"Encumbrances;" or
(ii) for liens for taxes, assessments, or other governmental
charges not yet delinquent; or
(iii) with respect to real property only, for such easements
and other encumbrances as do not individually or in the aggregate
materially and adversely affect the use or value of such real estate.
(b) No material assets reflected on the CITATION June 30, 1998, Balance
Sheet in respect of CITATION or the CITATION Subsidiaries have been sold,
leased, transferred, assigned, or otherwise disposed of since June 30, 1998,
except in the ordinary course of business or as set forth in SCHEDULE 3.08 under
the heading "Dispositions."
(c) All furniture, fixtures, vehicles, machinery, computer hardware and
shop equipment, equipment, and computer software owned or used by CITATION and
the CITATION Subsidiaries, including any of such items leased as a lessee and
all facilities and improvements comprising part of any owned or leased real
property, taken as a whole as to each of the foregoing, and with no single such
item being deemed of material importance, is fit for the purposes for which they
are currently used, will remain in the same level of order and repair as
currently exists through the completion of the Exchange Offer, and will remain
free of defects not currently existing and in the same operating condition as is
currently existing, subject only to normal wear and tear, and are not in need of
replacement, maintenance, or repair except for routine replacement, maintenance,
and repair and to dispositions in the ordinary course of business, and the
amounts at which they are valued on the CITATION June 30, 1998, Balance Sheet
reflects the normal valuation policy of CITATION in accordance with generally
accepted accounting principals. The properties and assets of CITATION and the
CITATION Subsidiaries constitute all of the properties and assets necessary for
the conduct of the business in substantially the same manner as the business has
heretofore been conducted. The operation by CITATION and the CITATION
Subsidiaries of such properties is in compliance in all material respects with
all applicable laws, ordinances, and rules and regulations of any governmental
authorities having jurisdiction.
3.09 CITATION AND CITATION SUBSIDIARIES REAL PROPERTY.
(a) Neither CITATION nor the CITATION Subsidiaries owns any real
property. The address, square footage, and other relevant details of each parcel
of real property leased by CITATION and the CITATION Subsidiaries as lessee is
set forth in SCHEDULE 3.09 under the heading "CITATION Real Property" (the
"CITATION REAL PROPERTY").
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(b) CITATION and the CITATION Subsidiaries enjoy peaceful possession of
all of the CITATION Real Property, free and clear of any liens created by
CITATION or a CITATION Subsidiary. In particular, all current leases executed by
CITATION and the CITATION Subsidiaries as lessee are in full force and effect,
are valid and effective in accordance with their respective terms, and there is
not, under any such leases, any existing default or event of default (or event
which with notice or lapse of time, or both, would constitute a default).
(c) [Reserved]
(d) To the knowledge of CITATION and the CITATION Subsidiaries, there
are not administrative or regulatory measures that may limit their right to free
enjoyment of the real property at their disposal, at the present time or in the
future.
(e) Except as set forth in SCHEDULE 3.09 under the heading of "Property
Especially Mentioned," neither any CITATION Real Property nor any real property
now or, to the best of CITATION's knowledge, previously held or used by CITATION
or any of the CITATION Subsidiaries is or was in violation of any national,
federal, state, provincial, or municipal environmental laws, regulations, or
ordinances and there are not nor have there been conditions existing on any of
the CITATION Real Property or on any real property held by any of the CITATION
Subsidiaries, which give rise to, or may give rise to, any such violation, or
which require or may in the future require remedial action under or with respect
to such laws, regulations, and ordinances.
3.10 CONTRACTS, COMMITMENTS, AND CERTAIN LOANS.
(a) Set forth on SCHEDULE 3.10 is a complete and accurate listing of
all agreements (written or oral) and other contracts (including any leases,
whether as lessor or as lessee) to which CITATION or any of the CITATION
Subsidiaries is a party which involve an annual commitment of funds by either of
more than U.S. $50,000 or which cannot be terminated by CITATION or any
Subsidiary on 30 days notice or less without liability.
(b) Except for the contracts and agreements required to be listed on
SCHEDULE 3.10, neither CITATION nor any of the CITATION Subsidiaries is a party
to or bound by any written or oral:
(i) agreement, contract, arrangement, understanding, or
commitment with any labor union or similar organization;
(ii) [Reserved]
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(iii) franchise or license agreement;
(iv) employment, severance or termination pay, agency,
consulting, or similar agreement, contract, arrangement, understanding
or commitment;
(v) loans or other obligations payable or owing to any
officer, director, or employee, except (A) salaries and wages incurred
and accrued in the ordinary course of business and/or (B) obligations
due in respect of any depository accounts maintained by any of the
foregoing at a bank in the ordinary course of business;
(vi) agreements to acquire any business, business entity, or
any significant line of business; and
(vii) other material agreement, contract, arrangement,
understanding or commitment extending beyond six months from the date
hereof that cannot be canceled without cost or penalty upon notice of
30 days or less.
(c) CITATION and each of the CITATION Subsidiaries each carry property,
casualty, liability, fidelity, and other insurance coverages as set forth in
SCHEDULE 3.10 under the heading "Insurance."
(d) True, correct, and complete copies of the agreements, contracts,
leases, insurance policies, and other documents referred to in SCHEDULE 3.10
have been made available to CITATION prior to the date hereof.
(e) Each of the agreements, contracts, leases, insurance policies, and
other documents referred to in SCHEDULE 3.10 is a valid, binding, and
enforceable obligation of CITATION and, to the knowledge of CITATION, the other
parties sought to be bound thereby, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, and other laws
now or hereafter in effect relating to the enforcement of creditors' rights
generally, and except that equitable principles may limit the right to obtain
specific performance or other equitable remedies.
3.11 ABSENCE OF DEFAULTS. Except as set forth in SCHEDULE 3.11 attached
hereto under the heading "Defaults," to its knowledge there are no pending
material disputes between CITATION or the CITATION Subsidiaries and the other
parties to the agreements, contracts, leases, insurance policies, and other
documents referred to in SCHEDULE 3.10, and all such agreements, contracts,
leases, insurance policies, and other documents are in full force and effect and
not in default in any material respect with respect to CITATION or the CITATION
Subsidiaries, or, to the best of CITATION's knowledge, any other party thereto,
Agreement and Plan of Reorganization Page 32
39
and will, subject to their respective terms, continue in full force and effect
and will not be materially modified after the completion of the Exchange Offer
by reason of the Exchange Offer. The completion of the transactions contemplated
herein will not give rise to the right to any party to terminate or materially
modify any such agreement or contract. CITATION and the CITATION Subsidiaries
are not a party to any agreement or contract which, singly or in the aggregate,
materially and adversely affects the business, operations, properties, assets or
condition (financial or otherwise) of CITATION or the CITATION Subsidiaries.
3.12 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in
SCHEDULE 3.12 attached hereto:
(a) Neither CITATION nor any of the CITATION Subsidiaries, as of the
date hereof, has any debts, liabilities, or obligations, whether accrued,
absolute, contingent, or otherwise and whether due or to become due, except:
(i) liabilities reflected in the CITATION June 30, 1998,
Balance Sheet; or
(ii) debts, liabilities or obligations incurred since June 30,
1998 in the ordinary and usual course of their respective businesses,
none of which are for breach of contract, breach of warranty, tort,
infringement, or lawsuits, and none of which materially and adversely
affect their respective financial positions or results of operations,
or businesses, assets, or operations.
(b) CITATION and each of the CITATION Subsidiaries were not, as of
March 31, 1998, and since such date have not become a party to, any contract or
agreement which affected, affects, or may reasonably be expected to affect,
materially and adversely, their respective financial positions, results of
operations, businesses, assets, or operations.
(c) Neither CITATION nor the CITATION Subsidiaries are party to any
contract that may neither be terminated on the grounds of a change in control
subsequent to completion of the Exchange Offer or due to any change in the
composition of the Board of Directors of CITATION or the CITATION Subsidiaries.
3.13 TAXES. CITATION and each of the CITATION Subsidiaries have timely
filed or will timely file federal, state, and local tax returns required to be
filed at or prior to the completion of the Exchange Offer. CITATION and each of
the CITATION Subsidiaries have paid, or have set up adequate reserves on the
CITATION June 30, 1998, Balance Sheet for the payment of, all taxes required to
be paid in respect of the periods covered by such returns and have set up
adequate reserves on the CITATION June 30, 1998, Balance Sheet for the payment
of all taxes anticipated to be payable in respect of the periods subsequent to
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the last of said periods for which returns have been filed (treating for this
purpose the completion of the Exchange Offer as the last day of an applicable
period, whether or not it is in fact the last day of a taxable period). Neither
CITATION nor any of the CITATION Subsidiaries will have any material liability
for any such taxes in excess of the amounts so paid or reserves so established
and no material deficiencies for any tax, assessment, or governmental charge
have been proposed, asserted, or assessed (tentatively or definitely) against
CITATION or any of the CITATION Subsidiaries which would not be covered by
existing reserves. CITATION and the CITATION Subsidiaries have withheld and paid
any taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor, creditor, shareholder, or
other party. Neither CITATION nor any of the CITATION Subsidiaries is delinquent
in the payment of any material tax, assessment, or governmental charge, nor has
it requested any extension of time within which to file any tax returns in
respect of any fiscal year which have not since been filed and no requests for
waivers of the time to assess any taxes are pending. Except as set forth in
SCHEDULE 3.13, there are not open tax returns or open tax years with respect to
which applicable taxing authorities have the right of examination and may seek
increased assessments. No tax returns of CITATION or the CITATION Subsidiaries
have been audited by the United States Internal Revenue Service or state taxing
authorities. No extensions have been requested for any tax return for CITATION
or any of the CITATION Subsidiaries.
3.14 MATERIAL ADVERSE CHANGE. Except as otherwise disclosed in any of
the Schedules referenced in this Article III, since June 30, 1998, there has
been no material adverse change in the business, financial condition, results of
operations, or prospects of CITATION and the CITATION Subsidiaries taken as a
whole.
3.15 LEGAL PROCEEDINGS.
(a) Except as set forth in SCHEDULE 3.15, which sets forth with respect
to any such pending or threatened proceeding or investigation the forum, the
parties thereto, the subject matter thereof, and the amount of damages claimed
or other remedy requested: (i) there is no claim, action, suit, or proceeding,
or governmental proceeding or investigation, pending or to its knowledge
threatened against CITATION or any of the CITATION Subsidiaries or any of their
respective officers, directors, or employees in their capacity as such, or the
business, properties, or assets, or any of its managers, directors, officers, or
employees, in their respective capacities as such; and (ii) no such claim,
action, suit, or proceeding, or governmental proceeding or investigation, if
adversely determined, will affect materially and adversely the financial
conditions, results of operations, business, assets, or operations of CITATION
and the CITATION Subsidiaries taken as a whole. Neither CITATION nor any of the
CITATION Subsidiaries is subject to any order, judgment, decree, injunction,
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stipulation, or consent order of or with any court or governmental entity which
would impede its ability to conduct its business in the ordinary course in any
material way.
(b) There is no legal action or governmental proceeding or
investigation pending or to its knowledge threatened against CITATION or any of
the CITATION Subsidiaries that could prevent or adversely affect or seeks to
prohibit the consummation of the transactions contemplated hereby, nor is
CITATION or any of the CITATION Subsidiaries subject to any order of court or
governmental authority having any such effect.
(c) There are no material claims, actions, suits, or proceedings
pending or threatened against any director, officer, employee, or agent of
CITATION or any of the CITATION Subsidiaries which could give rise to a claim of
indemnification.
3.16 GOVERNMENTAL COMPLIANCE.
(a) CITATION and the CITATION Subsidiaries are in compliance in all
material respects with all laws, ordinances, rules, regulations, and orders,
material licenses and permits that are applicable to each of CITATION and the
CITATION Subsidiaries, and except as set forth in SCHEDULE 3.16 under the
heading "Missing Permits," each of CITATION and the CITATION Subsidiaries holds
all permits, business licenses, certificates, franchises, and other similar
items, which, if not held, would materially adversely affect the financial
condition, operations, prospects, and/or ownership rights as to the assets and
properties of CITATION taken as a whole. No governmental authority has since
January 1, 1996, challenged or questioned the legal right of CITATION or the
CITATION Subsidiaries to manufacture, offer, or sell any of its products or
services in the present manner or style thereof.
(b) Except as set forth in SCHEDULE 3.16 under the heading
"Environmental Liabilities," neither CITATION nor any of the CITATION
Subsidiaries is subject to a material liability as a result of its ownership,
operation, or use of any CITATION Real Property (a) that is contaminated by or
contains any hazardous waste, toxic substance, or related materials, including
without limitation, asbestos, PCBs, pesticides, herbicides, or any other
substance or waste that is hazardous to human health or the environment
(collectively, a "TOXIC SUBSTANCE"), or (b) on which any Toxic Substance has
been stored, disposed of, placed, or used in the construction thereof. No claim,
action, suit, proceeding, or investigation is pending or has been initiated
against CITATION or any of the CITATION Subsidiaries relating to the CITATION
Real Property before any court or other governmental authority or arbitration
tribunal relating to hazardous substances, pollution, or the environment, and
there is no outstanding judgment, order, writ, injunction, decree, or award
against or affecting CITATION or any of the CITATION Subsidiaries with respect
to the
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same. Except for statutory or regulatory restrictions of general application, no
national, federal, state, municipal or other governmental authority has placed
any restriction on the business of CITATION or the CITATION Subsidiaries which
reasonably could be expected to have a material adverse effect on the business,
financial condition, results of operations, or prospects of CITATION or the
CITATION Subsidiaries.
(c) There are no material claims, actions, suits, or proceedings
pending or threatened against any director, officer, employee, or agent of
CITATION or any of the CITATION Subsidiaries which could give rise to any claim
of indemnification.
3.17 LABOR AND EMPLOYMENT. No work stoppage involving CITATION or any
of the CITATION Subsidiaries is pending or, to the knowledge of CITATION,
threatened. CITATION and the CITATION Subsidiaries are not involved in,
threatened with, or affected by, any labor dispute, arbitration, lawsuit, or
administrative proceeding which could materially and adversely affect the
business of CITATION and any of the CITATION Subsidiaries. Employees of CITATION
and the CITATION Subsidiaries are not represented by any labor union nor are any
collective bargaining agreements otherwise in effect with respect to such
employees. CITATION and the CITATION Subsidiaries have paid or accrued in full
all wages, salaries, commissions, bonuses, and other compensation (including
severance and vacation benefits) for all service performed by their employees,
independent contractors, former employees, and former independent contractors.
3.18 MATERIAL INTERESTS OF CERTAIN PERSONS. Except as set forth on
SCHEDULE 3.18, to the knowledge of CITATION, no officer or director of CITATION
or any of the CITATION Subsidiaries has any material interest in any material
contract or property (real or personal, tangible or intangible), used in or
pertaining to the business of CITATION or such Subsidiary.
3.19 EMPLOYEE BENEFIT PLANS. There are set forth in SCHEDULE 3.19 all
pension, retirement, stock option, stock purchase, stock ownership, restricted
stock, savings, stock appreciation right, profit sharing, deferred compensation,
consulting, bonus, group insurance, cafeteria, severance, and other employee
benefit, incentive, and welfare policies, contracts, plans, and arrangements,
and all trust agreements related thereto, in respect of any of the present or
former directors, officers, or other employees of CITATION and the CITATION
Subsidiaries (collectively, "EMPLOYEE PLANS OR POLICIES"). Except as set forth
in SCHEDULE 3.19, all Employee Plans or Policies covering or applying to
employees or CITATION or any CITATION Subsidiary in the United States currently
comply and have at all relevant times complied in all material respects with all
applicable laws, requirements, and orders under ERISA, the Code, and state or
provincial law. With respect to each Employee Plan or Policy covering or
applying to employees in the United States which is a pension plan (as defined
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in Section 3(2) of ERISA) (the "PENSION PLANS"), except as set forth in SCHEDULE
3.19: (a) no Pension Plan is a "multi-employer plan" within the meaning of
Section 3(37) of ERISA; (b) each Pension Plan, to the extent necessary and
applicable, is "qualified" within the meaning of Section 401(a) of the Code, and
each related trust, if any, is exempt from taxation under Section 501(a) of the
Code; (c) the present value of all benefits vested and all benefits accrued
under each Pension Plan which is subject to Title IV of ERISA did not, in each
case, as of the last applicable annual valuation date (as indicated on SCHEDULE
3.19), exceed the value of the assets of the Pension Plans allocable to such
vested or accrued benefits; (d) no Pension Plan or any trust created thereunder,
nor any trustee, fiduciary, or administrator thereof, has engaged in a
"prohibited transaction" within the meaning of Section 4975 of the Code or
Section 406 of ERISA, which could subject such plan or trust, or any trustee,
fiduciary, or administrator thereof, or any party dealing with any such plan or
trust, to the tax or penalty on prohibited transactions imposed by said Section
4975 or by Section 502(l) of ERISA; (e) no Pension Plan or any trust created
thereunder has been terminated, nor have there been any "reportable events" with
respect to any Pension Plan, as that term is defined in Section 4043 of ERISA;
and (f) no Pension Plan or any trust created thereunder has incurred any
"accumulated funding deficiency," as such term is defined in Section 302 of
ERISA (whether or not waived), since the effective date of ERISA. Except as set
forth on SCHEDULE 3.19 or as otherwise described in this Agreement CITATION is
not contemplating amending, modifying, or terminating any Employee Plans or
Policies, or establishing any new plans, of CITATION or any CITATION Subsidiary.
3.20 CONDUCT OF CITATION AND OF CITATION SUBSIDIARIES TO DATE. Except
as disclosed in SCHEDULE 3.20, from and after June 30, 1998:
(a) CITATION and the CITATION Subsidiaries have carried on their
respective businesses in the ordinary and usual course consistent with their
past practices;
(b) Neither CITATION nor any of the CITATION Subsidiaries has issued
or sold any of its capital stock or any corporate debt securities which should,
under generally accepted accounting principles, be classified as long-term debt
on its balance sheet (except pursuant to outstanding options, warrants, or other
rights to purchase such capital stock);
(c) CITATION has not granted any option for the purchase of its
capital stock, effected any stock split, or otherwise changed its
capitalization;
(d) CITATION has not declared, set aside, or paid any dividend or
other distribution in respect of its capital stock, or, directly or indirectly,
redeemed or otherwise acquired any of its capital stock;
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(e) Neither CITATION nor any of the CITATION Subsidiaries has incurred
any material obligation or liability (absolute or contingent), except normal
trade or business obligations or liabilities incurred in the ordinary course of
business, or mortgaged, pledged, or subjected to lien, claim, security interest,
charge, encumbrance, or restriction on any of its assets or properties;
(f) Neither CITATION nor any of the CITATION Subsidiaries has
discharged or satisfied any material lien, mortgage, pledge, claim, security
interest, charge, encumbrance, or restriction or paid any material obligation or
liability (absolute or contingent), other than in the ordinary course of
business;
(g) Neither CITATION nor any of the CITATION Subsidiaries has sold,
assigned, transferred, leased, exchanged, or otherwise disposed of any of its
properties or assets other than for a fair consideration in the ordinary course
of business;
(h) Neither CITATION nor any of the CITATION Subsidiaries has, except
for hiring or terminating employees in the ordinary course of business:
increased the rate of compensation of, or paid any bonus to, any of its
directors, officers, or other employees, except merit or promotion increases in
accordance with existing policy or pursuant to any statutory scheme; entered
into any new, or amended or supplemented any existing employment, management,
consulting, deferred compensation, severance, or other similar contract; entered
into, terminated, or substantially modified any Employee Plan or Policy in
respect of any of its present or former directors, officers, or other employees;
or agreed to do any of the foregoing;
(i) Neither CITATION nor any of the CITATION Subsidiaries has suffered
any material damage, destruction, or loss, whether as the result of fire,
explosion, earthquake, accident, casualty, labor trouble, requisition, or taking
of property by any government or any agency of any government, flood, windstorm,
embargo, riot, act of God or the enemy, or other similar or dissimilar casualty
or event or otherwise, and whether or not covered by insurance; and
(j) Neither CITATION nor any of the CITATION Subsidiaries has entered
into any material transaction, contract, or commitment outside the ordinary
course of its business.
(k) Neither CITATION nor any of the CITATION Subsidiaries has made a
change in its accounting policies, principles, or practices.
(l) Neither CITATION nor any of the CITATION Subsidiaries has made a
reduction in any balance sheet reserves, except for related cash payments.
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3.21 [RESERVED]
3.22 BROKERS, INVESTMENT BANKERS, AND FINDERS. Neither CITATION, the
CITATION Subsidiaries, nor any of their respective officers, directors, or
employees has employed any broker, investment banker, finder or incurred any
liability for any financial advisory fees, brokerage fees, commissions,
investment banker fees or commissions, or finder's fees, except as described in
SCHEDULE 3.22, and no broker, investment banker, or finder has acted directly or
indirectly for CITATION and/or the CITATION Subsidiaries in connection with this
Agreement or the transactions contemplated hereby, except as described in
SCHEDULE 3.22.
3.23 INTELLECTUAL PROPERTY MATTERS.
(a) As used herein "CITATION SOFTWARE" shall include (i) all
proprietary software and related software system(s), including but not limited
to all algorithms, flow charts, logic diagrams and listings which pertain to
CITATION's proprietary system of computer programs, either in source or binary
form (including both software and firmware), specifications and other materials
(including, but not limited to techniques, concepts and know-how implicit
therein) relating to said computer programs, including documentation,
confidential supporting documentation, escrow agreements, and other printed
descriptive documents provided to or for the use of the customers of CITATION,
or otherwise used by CITATION for commercial purposes, and (ii) all software
listed under the heading "CITATION Software" in SCHEDULE 3.23.
(b) CITATION is the sole owner of the CITATION Software, free and clear
of any liens, encumbrances, licenses, transfer agreements, infringements,
enforceable claims, and domestic or foreign government regulations, except as
set forth in SCHEDULE 3.23, under the heading "Exceptions to Title."
(c) All of the CITATION Software was conceived and developed by
CITATION, except as set forth in SCHEDULE 3.23 under the heading "Third Party
Developed Software."
(d) Neither the CITATION Software nor any significant part thereof is
in the public domain. The CITATION Software is in all material respects
proprietary to CITATION. CITATION has the full right, power, and authority to
disclose the CITATION Software to MEDASYS. The CITATION Software disclosed to
MEDASYS hereunder does not infringe any patent, copyright, trademark,
development, ownership, or any other proprietary right of any other person or
entity.
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(e) There are no asserted, and CITATION is unaware of any unasserted,
claim or demand against CITATION regarding the CITATION Software, which could or
would in any way impede or interfere with the commercial use of the CITATION
Software upon completion of the transactions contemplated herein, except as set
forth in SCHEDULE 3.23 under the heading "Claims."
(f) CITATION has the full and sole right to disclose the CITATION
Software to MEDASYS and to transfer title of CITATION Software.
(g) CITATION and each of the CITATION Subsidiaries has met all
regulatory requirements to sell its software commercially to customers in each
market where it sells such software, except as set forth in SCHEDULE 3.23 under
the heading "Missing Regulatory Requirements."
(h) SCHEDULE 3.23 sets forth a complete and correct list of all
patents, trademarks, trade names, and other intellectual property rights of
CITATION and the CITATION Subsidiaries. CITATION and the CITATION Subsidiaries
own or have the exclusive right to use pursuant to license, sublicense,
agreement, or permission all intellectual property rights necessary for the
operation of their respective businesses as presently conducted. CITATION and
the CITATION Subsidiaries have not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any intellectual property
rights of third parties, and CITATION has not received any written notice
alleging any such interference, infringement, misappropriation, or violation
(including any such claim that CITATION and the CITATION Subsidiaries must
license or refrain from using any intellectual property rights of any third
party). To the knowledge of CITATION, no third party has interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
intellectual property rights of CITATION and the CITATION Subsidiaries in
connection with their respective businesses or operations.
3.24 YEAR 2000 COMPLAINT. Except as set forth on SCHEDULE 3.24, to the
best knowledge of CITATION, all computer software and hardware sold by, licensed
by, or utilized by CITATION or any CITATION Subsidiary is, or is reasonably
expected to be, Year 2000 compliant, which, for purposes of this Agreement,
shall mean that the data outside the range 1900-1999 will be correctly processed
in any level of computer hardware or software including, but not limited to,
microcode, firmware, applications programs, files and data bases. All computer
software is, or CITATION is taking steps to ensure that all computer software
will be, designed to be used prior to, during and after the calendar year 2000
A.D., and such software will operate during each such time period without
material error relating to date data, specifically including any error relating
to, or the product of, date data that represents or references different
centuries or more than one century.
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3.25 ACCURACY OF INFORMATION. The statements contained in this
Agreement, the Schedules, and in any other written document executed and
delivered by or on behalf of CITATION pursuant to the terms of this Agreement
are true and correct in all material respects, and such statements and documents
do not omit any material fact necessary to make the statements contained therein
not misleading.
3.26 CITATION PRINCIPALS.
(a) Each of the CITATION Principals beneficially owns the number of
CITATION Common shares set opposite such Principal's name on SCHEDULE 3.26. Each
CITATION Principal holds such shares free and clear of all claims, liens, and
encumbrances, except as set forth in SCHEDULE 3.26.
(b) Each CITATION Principal has the capacity and authority to enter
into this Agreement and to carry out the terms hereof, and has not entered into
any agreement pursuant to which another person has the right or subject to any
event would have the right to vote the CITATION Common shares of the CITATION
Principal. Subject to the approvals set forth in SECTION 2.02 and SECTION 3.02,
this Agreement is the valid and binding agreement of the CITATION Principals,
enforceable against the CITATION Principals in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, and other laws now or hereafter in effect relating
to the enforcement of creditor's rights generally, and except that equitable
principals may limit the right to obtain specific performance or other equitable
remedies.
ARTICLE IV
CONDUCT OF BUSINESS PRIOR TO THE COMPLETION OF TRANSACTIONS
4.01 CONDUCT OF BUSINESSES PRIOR TO THE COMPLETION OF THE EXCHANGE
OFFER. During the period from the date of this Agreement to the completion of
the Exchange Offer, MEDASYS and CITATION shall, and shall cause each of their
respective Subsidiaries, to conduct its business according to the ordinary and
usual course consistent with past and current practices, and each shall use its
best efforts to maintain and preserve its business organization, employees, and
advantageous business relationships and retain the services of its officers and
key employees, and not permit any act or omission to act that would cause any of
the representations or warranties by such party contained in this Agreement to
be or become inaccurate in any material way or any of the covenants of such
party to be breached in any material respect.
4.02 FORBEARANCES. During the period from the date of this Agreement to
the completion of the Exchange Offer and except as provided in SCHEDULE 4.02,
each of
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CITATION and MEDASYS shall not, and shall not cause, vote in favor of, or
otherwise authorize, approve, or permit any of their respective Subsidiaries,
without the prior written consent of the other, to:
(a) Declare and/or pay any dividends on its outstanding shares of
capital stock;
(b) Enter into or amend any employment, severance, or similar
agreements or arrangements with any Director, officer, key employee, or
consultant;
(c) Authorize, recommend, propose, or announce an intention to
authorize, recommend, or propose, or enter into an agreement in principle with
respect to, any merger, consolidation, or acquisition of a material amount of
assets or securities, any disposition of a material amount of assets or
securities, or any contract not in the ordinary course of business, or any
release or relinquishment of any material contract rights not in the ordinary
course of business, except for those transactions described in SCHEDULE 2.10
with respect to MEDASYS and SCHEDULE 3.10 with respect to CITATION;
(d) Propose or adopt any amendments to the Articles of Incorporation or
by-laws of CITATION or any CITATION Subsidiary, or propose or adopt any
amendments to Le Statuts of MEDASYS or any MEDASYS Subsidiary, except that
CITATION may propose and adopt an amendments to its Articles of Incorporation
except as provided in SECTION 5.02(a) of this Agreement;
(e) Issue any shares of capital stock or effect any stock split or
otherwise change its capitalization as it existed as of the date hereof, except
for the issuance of CITATION Common shares pursuant to the French IPO, the
Exchange Offer, or the issuance of CITATION Common shares or MEDASYS Common
shares pursuant to a CITATION Stock Option or Warrant or a MEDASYS Stock Option
or Warrant, respectively, in existence on the date of this Agreement and which
is described in a Schedule to this Agreement;
(f) Grant, confer, or award any options, warrants, conversion rights,
or other rights not existing on the date hereof to acquire any shares of its
capital stock;
(g) Purchase or redeem any shares of its capital stock;
(h) Agree in writing or otherwise to take any of the foregoing actions
or engage in any activity, enter into any transaction, or take or omit to take
any other act which would make any of such party's representations and
warranties in this Agreement untrue or incorrect in any material respect if made
anew after engaging in such activity, entering into such transaction, or taking
or omitting such other act; and
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(i) Take any actions, or fail to take any actions which alone, or
together with any other action or inaction, shall create, alter, or eliminate
any rights, benefits, obligations, or liabilities of any person (including, but
not limited to the participants, beneficiaries, CITATION, MEDASYS, or their
respective Subsidiaries) with respect to any Employee Plans or Policies, or to
increase the compensation of any employees or independent contractors, except as
required by law, required by existing agreement, or in the ordinary course of
business.
(j) Make any change in accounting policies, principles, or practices.
ARTICLE V
ADDITIONAL AGREEMENTS
5.01 ACCESS AND INFORMATION. MEDASYS and the MEDASYS Subsidiaries on
the one hand, and CITATION and the CITATION Subsidiaries on the other hand,
shall each afford to the other party and the other party's accountants, counsel,
and other representatives, full access during normal business hours, during the
period prior to the closing of the Exchange Offer, to all their respective
properties, books, contracts, commitments, and records; and, during such period,
each shall furnish promptly to the other party (i) a copy of each report,
schedule, and other document filed or received by it during such period pursuant
to the requirements of national, federal, state, and provincial securities laws
and (ii) all other information concerning its business, properties, and
personnel as such other party may reasonably request. In the event of the
termination of this Agreement each party shall, and shall cause its advisors and
representatives to (x) during a period of two years following at the date of
execution of this Agreement hold confidential all information obtained in
connection with any transaction contemplated hereby with respect to the other
party which is not otherwise public knowledge, (y) return all documents
(including copies thereof) obtained hereunder from the other party, and (z) use
its best efforts to cause all information obtained pursuant to this Agreement or
in connection with the negotiation hereof to be treated as confidential and not
use, or knowingly permit others to use, any such information unless such
information becomes generally available to the public.
5.02 PROXY STATEMENT/PROSPECTUS; FRENCH PROSPECTUS; REGULATORY MATTERS.
(a) CITATION shall prepare and file with the SEC, as soon as is
reasonably practicable, the Proxy Statement/Prospectus with respect to the
CITATION Shareholder Meeting to be held to consider such approvals of the
transactions contemplated in this Agreement as are required by applicable laws,
rules, and regulations, including, but not limited to, amendments to its
Articles of Incorporation to increase the number of authorized CITATION Common
shares to 20,000,000 and to change its name, effective upon
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50
completion of the Exchange Offer, to "MEDASYS International, Inc." and to either
increase the number of available shares underlying options to be granted under
the existing CITATION Incentive Stock Option Plan, or adopt a new plan for the
issuance of options. The Proxy Statement/Prospectus will be part of one or more
Registration Statement(s) as are necessary to complete the transactions
contemplated herein. CITATION shall use all reasonable efforts to have such
Registration Statement(s) declared effective as promptly as practicable.
(b) CITATION shall prepare and file, with the assistance of the
Underwriter(s) and Exchange Offer Underwriter(s), with the Admission Committee
of the New Market Company (Comite d'admission de la Societe du Nouveau
Marche), the Financial Market Council (Conseil des Marches Financiers),
and the French Securities Exchange Commission (Commission des Operations de
Bourse), as soon as reasonably practicable, all necessary French prospectuses
and drafts concerning the French IPO and the Exchange Offer as are required by
applicable laws, rules, and regulations. These various materials shall pertain
to the French IPO and the issuance of CITATION Common shares and warrants
pursuant to the Exchange Offer as it pertains to the holders of MEDASYS Common
shares and warrants who are residents of France.
(c) Each of the parties shall cooperate and use its respective best
efforts to provide all information, to prepare all documentation, to effect all
filings, and to obtain all permits, consents, approvals, and authorizations of
all third parties and governmental bodies necessary to consummate the
transactions contemplated by this Agreement, including, without limitation, any
such approval or authorization required by the SEC, the Nasdaq National Market,
the New Market Company (Societe du Nouveau Marche), the Financial
Market Council (Conseil des Marches Financiers) and the French Securities
Exchange Commission (Commission des Operations de Bourse).
(d) MEDASYS hereby covenants and agrees that none of the information
regarding MEDASYS and/or the MEDASYS Subsidiaries supplied or to be supplied by
MEDASYS for inclusion or included in (i) the Proxy Statement/Prospectus to be
mailed to shareholders of CITATION in connection with the CITATION Shareholders
Meeting (the "PROXY STATEMENT/PROSPECTUS"), and (ii) any other documents to be
filed with the SEC or any other United States or French or other regulatory
authority in connection with the transactions contemplated hereby will, at the
respective times such documents are filed with such applicable regulatory
authority and, with respect to the Proxy Statement/Prospectus, when mailed, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements therein not misleading
or, in the case of the Proxy Statement/Prospectus or any amendment thereof or
supplement thereto, at the time of the meeting of shareholders referred to in
SECTION 5.03, be false or misleading with
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51
respect to any material fact, or omit to state any material fact necessary to
correct any statement in any earlier communication with respect to the
solicitation of any proxy for such meeting. All documents which MEDASYS is
responsible for filing with any regulatory authority in connection with the
Reorganization will comply as to form in all material respects with the
provisions of applicable law.
(e) MEDASYS hereby covenants and agrees that none of the information
regarding MEDASYS and/or the MEDASYS Subsidiaries supplied or to be supplied by
MEDASYS for inclusion or included in any documents to be filed with the New
Market Company (Societe du Nouveau Marche), the French Securities
Exchange Commission (Commission des Operations de Bourse), the Financial
Market Council (Conseil des Marches Financiers) or any other French or other
regulatory authority in connection with the transactions contemplated hereby
will, at the respective times such documents are filed with such applicable
regulatory authority and, with respect to the French Prospectus, when filed, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements therein not misleading.
All documents which MEDASYS is responsible for filing with any regulatory
authority in connection with the Reorganization will comply as to form in all
material respects with the provisions of applicable law.
(f) CITATION hereby covenants and agrees that None of the information
regarding CITATION and/or the CITATION Subsidiaries supplied or to be supplied
by CITATION for inclusion or included in (i) the Proxy Statement/Prospectus, and
(ii) any other documents to be filed with the SEC or any other regulatory
authority in connection with the transactions contemplated hereby will, at the
respective times such documents are filed with such applicable regulatory
authority and, with respect to the Proxy Statement/Prospectus, when mailed, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements therein not misleading
or, in the case of the Proxy Statement/Prospectus or any amendment thereof or
supplement thereto, at the time of the meeting of shareholders referred to in
SECTION 5.03, be false or misleading with respect to any material fact, or omit
to state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for such meeting.
All documents which CITATION is responsible for filing with any regulatory
authority in connection with the Reorganization will comply as to form in all
material respects with the provisions of applicable law.
(g) CITATION hereby covenants and agrees that none of the information
regarding CITATION and/or the CITATION Subsidiaries supplied or to be supplied
by CITATION for inclusion or included in any documents to be filed with the New
Market Company (Societe du Nouveau Marche), the French Securities
Exchange Commission
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52
(Commission des Operations de Bourse), the Financial Market Council (Conseil
des Marches Financiers) or any other French or other regulatory authority in
connection with the transactions contemplated hereby will, at the respective
times such documents are filed with such applicable regulatory authority and,
with respect to the French Prospectus, when filed, be false or misleading with
respect to any material fact, or omit to state any material fact necessary in
order to make the statements therein not misleading. All documents which
CITATION is responsible for filing with any regulatory authority in connection
with the Reorganization will comply as to form in all material respects with the
provisions of applicable law.
5.03 SHAREHOLDER APPROVAL. CITATION shall call the CITATION
Shareholders Meeting to be held as soon as practicable after the Registration
Statement(s) has (have) been declared effective for the purpose of voting upon
the transactions contemplated in this Agreement and as mentioned in SECTION
5.02(a). In connection with such Meeting, CITATION shall mail the Proxy
Statement/Prospectus and related documents to its shareholders. The Board of
Directors of CITATION shall submit for approval of its shareholders the matters
to be voted upon at such meeting. The Board of Directors of CITATION and each
member thereof will recommend the approval of this Agreement and the
transactions contemplated hereby and will use its and their best efforts to
obtain the votes and approvals of its shareholders necessary for the approval
and adoption of this Agreement and the Reorganization contemplated hereby.
Notwithstanding the foregoing, the Board of Directors of CITATION shall not be
required to take any action, including, but not limited to, calling of a meeting
of the shareholders and/or recommending the approval of this Agreement and the
transactions contemplated hereby, if (i) the Board of Directors is advised in
writing by competent legal counsel that such action would be a breach of its
fiduciary duties in view of known facts and circumstances, or (ii) CITATION has
not received as of or just prior to the effectiveness of the Registration
Statements, a written opinion letter from a reputable financial advisor chosen
by CITATION, stating that this Agreement and the transactions contemplated
herein are fair to CITATION and the CITATION shareholders from a financial point
of view.
5.04 SUPPORT OF TRANSACTIONS; NO SALE OF SHARES.
(a) The CITATION Principals who are also officers of CITATION covenant
and agree to take all reasonable steps to support the successful completion of
the French IPO and the Exchange Offer, including but not limited to
participating in "road shows," meetings with regulatory authorities, and
meetings with significant shareholders. The CITATION Principals shall not, prior
to the completion of the Exchange Offer, sell, give, donate, or otherwise
alienate any of the CITATION Common shares that they beneficially own as of
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53
the date hereof or hereafter acquire through the date of the Exchange Offer,
unless consented to in writing by MEDASYS, which consent shall not be
unreasonably withheld.
(b) The MEDASYS Principals who are also officers of MEDASYS covenant
and agree to take all reasonable steps to support the successful completion of
the French IPO and the Exchange Offer, including but not limited to
participating in "road shows," meetings with regulatory authorities, and
meetings with significant shareholders. The MEDASYS Principals shall not, prior
to completion of the Exchange Offer, sell, give, donate, or otherwise alienate
any of the MEDASYS Common shares and warrants that they beneficially hold as of
the date hereof or hereafter acquire through the date of the completion of the
Exchange Offer, unless consented to in writing by CITATION, which consent shall
not be unreasonably withheld.
5.05 SUPPORT BY MEDASYS CONSEIL D'ADMINISTRATION. The Conseil
d'Administration of MEDASYS shall communicate to the holders of MEDASYS Common
shares and warrants its recommendation that the combination of CITATION and
MEDASYS is in the best interests of MEDASYS and its shareholders and that they
tender their MEDASYS Common shares pursuant to the Exchange Offer.
Notwithstanding the foregoing, the Conseil d'Administration of MEDASYS shall not
be required to take any action, including, but not limited to, recommending the
approval of this Agreement and the transactions contemplated hereby, if the
Conseil d'Administration is advised in writing by competent legal counsel that
such action would be a breach of its fiduciary duties in view of known facts and
circumstances.
5.06 CURRENT INFORMATION. During the period from the date of this
Agreement to the completion of the Exchange Offer, CITATION and MEDASYS shall
cause one or more of its designated representatives to confer on a regular and
frequent basis with representatives of the other party. Each shall promptly
notify the other party of any material change in its business, operations, or
prospects and of any governmental complaints, investigations, or hearings (or
communications indicating that the same may be contemplated), or the institution
or the threat of material litigation or administrative or other claim involving
such party, or otherwise affect the ability of such party to consummate the
transactions contemplated in this Agreement, and shall keep each other party
fully informed of such events. Each party shall, to the extent necessary to keep
the Schedules to this Agreement materially correct and accurate, provide amended
and updated Schedules for any information such party has represented or
warranted as true.
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5.07 EXPENSES; POTENTIAL INVESTMENT BY CITATION IN MEDASYS.
(a) All of the following kinds of costs and expenses paid or incurred
by CITATION and MEDASYS (the "SHARED EXPENSES") between the date of this
Agreement and the earlier of (i) the completion of the Exchange Offer or (ii)
the termination of the Agreement by reason of SECTION 7.01 shall be promptly
(within 30 days) totaled, and each of CITATION and MEDASYS shall be responsible
to pay one-half (1/2) of the total. Within 40 days following the earlier of such
completion or termination, whichever of CITATION or MEDASYS has paid or incurred
less of the Shared Expenses than the other shall pay to the other an amount
sufficient to make the amount of Shared Expenses paid or incurred by each
exactly equal. The Shared Expenses shall be deemed to include reasonable amounts
paid or incurred in each of the following categories:
(i) Legal fees, costs, and expenses;
(ii) Accounting fees, costs, and expenses;
(iii) Fees, costs, and expenses paid to consultants in
connection with due diligence;
(iv) Investment banking, financial advisory (including
fairness opinions referenced herein), and
underwriters' fees, costs, and expenses (excluding
fees CITATION paid or owes to Xxxxxxxxx, Agio, Xxxxx
Securities, Inc. ("XXXXXXXXX") as CITATION's
exclusive agent to assist with the search for a
transaction partner, as set forth in an agreement
between CITATION and Xxxxxxxxx dated January 8, 1998,
for services rendered to CITATION through July 7,
1998, and also excluding any fees paid or owed by
MEDASYS or any MEDASYS Subsidiary to XX Xxxxxxxxx,
Towbin);
(v) Printing costs and expenses consented to in advance
by each of CITATION and MEDASYS, which consent shall
not be unreasonably withheld;
(vi) Fees, costs and expenses payable to governmental
agencies and authorities; and
(vii) Fees, costs, and expenses payable to the Nasdaq
National Market and the French SEC, the Financial
Market Council, and the New Market Company.
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55
Notwithstanding the foregoing, no fee, cost, or expense involved in enforcing
this Agreement or pursuing any claim or right under this Agreement (i) by
CITATION against MEDASYS or the MEDASYS Principals or (ii) by MEDASYS or any
MEDASYS Principal against CITATION shall constitute a Shared Expense.
Furthermore, notwithstanding the foregoing, in the event the French IPO is
completed and thereafter less than 51 percent of the outstanding MEDASYS Common
shares are tendered and not withdrawn pursuant to the Exchange Offer and
CITATION does not waive the condition set forth in SECTION 6.03 (H), CITATION
shall reimburse MEDASYS for such of the Shared Expenses as were incurred by
MEDASYS, up to one-half (1/2) of the proceeds of the French IPO (net of all
costs, expenses, professional fees, and underwriting discounts, fees,
commissions, or concessions), and in such circumstances MEDASYS will have no
obligation to reimburse CITATION for any Shared Expenses.
(b) Except as provided in subsection (a) of this Section, each Party
hereto shall bear its own expenses incident to preparing, entering into, and
carrying out this Agreement and consummating the transactions contemplated
herein.
(c) In the event that the French IPO is completed and the conditions
precedent to CITATION proceeding with the Exchange Offer are fulfilled and less
than 67 percent of the outstanding MEDASYS Common shares are tendered and not
withdrawn pursuant to the Exchange Offer, but more than 51 percent of the
MEDASYS Common shares are tendered and not withdrawn pursuant to the Exchange
Offer and CITATION does not waive the condition set forth in SECTION 6.03 (H),
then in addition to any payment to be made pursuant to SECTION 5.07 (A),
CITATION agrees that it will within 20 days after the termination of the
Exchange Offer purchase from MEDASYS, and MEDASYS will sell to CITATION, that
number of MEDASYS Common shares as will equal the quotient of (X) the difference
between (i) one-half (1/2) of the proceeds of the French IPO (net of all
underwriting discounts, fees, commissions, or concessions) less (ii) one-half
(1/2) of the Shared Expenses, divided by (Y) the per share price of the CITATION
Common shares sold in the French IPO. The purchase price for each such MEDASYS
Common share shall be equal to the per share price of the CITATION Common shares
sold in the French IPO. Any amounts due to CITATION from MEDASYS with respect to
MEDASYS' share of the Shared Expenses, if not previously paid, shall be paid by
MEDASYS to CITATION at the same time as CITATION purchases the MEDASYS Common
shares as aforesaid.
5.08 MISCELLANEOUS AGREEMENTS AND CONSENTS. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use its or
their best efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper, or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement as expeditiously as possible,
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56
including, without limitation, using its or their best efforts to lift or
rescind any injunction or restraining order or other order adversely affecting
the ability of the parties to consummate the transactions contemplated hereby.
Each party hereto shall use its or their best efforts to obtain consents of all
third parties and governmental bodies necessary or, in the opinion of any of the
parties, desirable for the consummation of the transactions contemplated by this
Agreement.
5.09 PRESS RELEASES. CITATION and MEDASYS shall consult with each other
and obtain the consent of the other, which consent shall not be unreasonably
withheld, as to the form and substance of any proposed press release or other
proposed public disclosure of matters related to this Agreement or any of the
transactions contemplated hereby prior to any public or other non-private
dissemination of same.
5.10 EMPLOYEE PLANS AND POLICIES MATTERS. MEDASYS and CITATION shall
each take any action reasonably requested by the other party with respect to any
of the Employee Plans or Policies, including, but not limited to, correcting
operational errors or deficiencies, making necessary filings with the United
States Internal Revenue Service, the United States Department of Labor, the
United States Pension Benefit Guaranty Corporation, or amending, freezing,
terminating, or merging one or more Employee Plans or Policies.
5.11 NONSOLICITATION AND EXCLUSIVE DEALING. Recognizing the substantial
expenditure of time, effort, and expense each party hereto has incurred as of
the date hereof, and will incur through the completion of the Exchange Offer in
connection with negotiating, performing its due diligence investigation, and
attempting to complete the transactions contemplated herein, until such time as
either the closing of the Exchange Offer has occurred or this Agreement is
terminated in accordance with the provisions of Article VII hereof, none of
MEDASYS, the MEDASYS Principals, the MEDASYS Subsidiaries, CITATION, the
CITATION Principals, the CITATION Subsidiaries, or the directors, officers,
attorneys, financial advisors, accountants, or other representatives of MEDASYS,
the MEDASYS Subsidiaries, CITATION, or the CITATION Subsidiaries will directly
or indirectly: (i) solicit, encourage (including by way of furnishing any
non-public information concerning, respectively, MEDASYS' or CITATION's
business, property, or assets), consider, or discuss any Acquisition Offer or
Proposal (as defined below); or (ii) provide any information to, or negotiate
with, any other person or entity in connection with any possible sale of all or
any portion of the stock, assets, or business of, respectively, either MEDASYS
or a MEDASYS Subsidiary, or either CITATION or a CITATION Subsidiary, when,
respectively, MEDASYS or CITATION has reason to believe that such information
may be utilized to evaluate or make a possible Acquisition Offer or Proposal. As
used herein, "ACQUISITION OFFER OR PROPOSAL" shall mean any offer or proposal
for an acquisition, merger, consolidation, tender offer, or other business
combination involving, respectively, either
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57
MEDASYS or a MEDASYS Subsidiary, or either CITATION or a CITATION Subsidiary,
or for the acquisition of a substantial equity interest in, or a substantial
portion of the stock, assets, or business of respectively, either of MEDASYS or
a MEDASYS Subsidiary, or either CITATION or a CITATION Subsidiary. Each party
hereto shall immediately give notice to the other party, in the manner provided
for herein, regarding any contact between such party or any of its Subsidiaries,
or the directors, officers, attorneys, financial advisors, accountants, or other
representatives of such party or any of its Subsidiaries, and any other person
in connection with any Acquisition Offer or Proposal or related inquiry.
Notwithstanding the foregoing, neither CITATION nor MEDASYS shall be required to
take any action or omit to take any action if such party is advised in writing
by competent legal counsel that such action or failure to act would constitute a
breach of the fiduciary duties of, respectively, the Board of Directors of
CITATION or the Conseil d'Administration of MEDASYS, in view of the known facts
and circumstances.
5.12 FURTHER ASSURANCES. Upon the completion of the Exchange Offer and
any time thereafter, if any of the CITATION Principals, CITATION, the MEDASYS
Principals, or MEDASYS shall consider or be advised that any further deeds,
assignments, assurances in law, or other instruments or actions ("FURTHER
ASSURANCES") are necessary or desirable to effect the transactions contemplated
in this Agreement, each of said parties hereto agrees promptly to take or
implement such Further Assurances.
5.13 FAIRNESS OPINION. CITATION shall take all reasonable steps to
secure receipt by its Board of Directors of a written opinion from a reputable
financial advisor chosen by CITATION, stating that this Agreement and the
transactions contemplated herein are fair to CITATION and to the CITATION
shareholders from a financial point of view. The CITATION Principals, the
MEDASYS Principals, and MEDASYS shall take all reasonable steps to cooperate in
obtaining such fairness opinion.
5.14 ADDITIONAL SHARES. MEDASYS agrees that it shall require, as a
condition of it issuing such shares, that all persons receiving MEDASYS Common
shares pursuant to the acquisition by MEDASYS of MedSystems, S.A. and Eurodim,
S.A., shall tender and not withdraw all such shares, pursuant to the Exchange
Offer.
ARTICLE VI
CONDITIONS TO COMPLETION OF TRANSACTION
6.01 CITATION SHAREHOLDERS MEETING--CITATION PRINCIPALS. The obligation
of the CITATION Principals to vote CITATION Common shares at the CITATION
Shareholders Meeting as set forth in SECTION 1.03(A) of this Agreement is
subject to the fulfillment or waiver by CITATION of the following conditions:
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58
(a) The representations and warranties of MEDASYS and the MEDASYS
Principals shall be true and correct in all material respects as of the date of
this Agreement and as of the date of such Meeting (as though made on and as of
such date, except (i) to the extent such representations and warranties are by
their express provisions made as of a specified date, and (ii) for the effect of
transactions contemplated by this Agreement); and
(b) CITATION shall have received, as of or just prior to the
effectiveness of the Registration Statements, a written opinion letter from a
reputable financial advisor chosen by CITATION, stating that this Agreement and
the transactions contemplated herein are fair to CITATION and the CITATIONS
shareholders from a financial point of view.
6.02 THE FRENCH IPO--CITATION. CITATION's obligation to commence and
complete the French IPO is subject to the fulfillment or waiver by CITATION of
all the following conditions:
(a) This Agreement and the transactions contemplated herein shall have
received the requisite approval of the shareholders of CITATION Shareholders
Meeting.
(b) [Reserved]
(c) The Board of Directors of CITATION shall not have received written
advice from competent legal counsel that commencement and/or completion of the
French IPO would be a breach of its fiduciary duties in view of known facts and
circumstances.
(d) The CITATION Common shares to be issued in the French IPO shall
have been approved for trading, upon the close of the French IPO, on the New
Market of the French Bourse (Nouveau Marche) and on the Nasdaq National
Market in the United States, and CITATION shall have been advised that all
applicable requirements of French securities law, rules, or regulations have
been fulfilled, including any required appraisal by an independent evaluator.
(e) The representations and warranties of MEDASYS and the MEDASYS
Principals shall be true and correct in all material respects as of the date of
this Agreement and as of the commencement and closing of the French IPO (as
though made on and as of such date, except (i) to the extent such
representations and warranties are by their express provisions made as of a
specified date, and (ii) for the effect of transactions contemplated by this
Agreement), CITATION shall have received a signed certificate from each of
MEDASYS and the MEDASYS Principals to that effect, signed on behalf of MEDASYS
by the Chairman of the Board of MEDASYS, which is to the best of their
knowledge, and
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59
MEDASYS shall have performed all of its agreements and covenants in this
Agreement susceptible to performance as of such time.
(f) The per share price for which CITATION Common shares that are sold
in the French IPO (before underwriting discount) is not less than U.S. $5.00
when converted from French Francs at the exchange rate published by the Banque
de France (cours indicatif Banque de France) on the day of the French IPO.
(g) All conditions precedent in favor of CITATION set forth in any
underwriting agreement entered into or to be entered into with the Underwriters
shall have been fulfilled or waived by CITATION.
(h) The Underwriters are ready, willing, and able to commence and close
the French IPO.
(i) No court, government agency, stock exchange or market, or other
entity of competent jurisdiction shall have entered any order or rule forbidding
or delaying the commencement or closing of the French IPO or requiring a
materially adverse change in the terms or conditions of the French IPO that
CITATION has not approved, and such order or rule shall not have been withdrawn
or expired.
6.03 THE EXCHANGE OFFER--CITATION. CITATION's obligation to commence
and complete the Exchange Offer is subject to the fulfillment or waiver by
CITATION of all of the following conditions:
(a) The French IPO shall have been completed in accordance with the
terms and conditions of this Agreement, or if the French IPO and the Exchange
Offer are conducted simultaneously, that all the conditions precedent set forth
in SECTION 6.02 are fulfilled or waived by CITATION.
(b) [Reserved]
(c) The Board of Directors of CITATION shall not have received written
advice from competent legal counsel that commencement and/or completion of the
Exchange Offer would be a breach of its fiduciary duties in view of known facts
and circumstances.
(d) The representations and warranties of MEDASYS and the MEDASYS
Principals shall be true and correct in all material respects as of the date of
this Agreement and as of the commencement and closing of the Exchange Offer (as
though made on and as of such closing date, except (i) to the extent such
representations and warranties are by their
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60
express provisions made as of a specific date, and (ii) for the effect of
transactions contemplated by this Agreement), and CITATION shall have received a
signed certificate from each of MEDASYS and the MEDASYS Principals to that
effect, signed on behalf of MEDASYS by the President or Chief Executive Officer
and the Secretary of MEDASYS, which is to the best of their knowledge, and
MEDASYS shall have performed all of its agreements and covenants in this
Agreement capable of performance as of such time.
(e) The CITATION Common shares to be issued in the Exchange Offer shall
have been approved for trading, upon the completion of such transaction, on the
New Market of the French Bourse in France and on the Nasdaq National Market in
the United States.
(f) The exchange ratio of CITATION Common shares for MEDASYS Common
shares in the Exchange Offer shall be no greater than one CITATION Common share
for each one MEDASYS Common share, and such exchange ratio and other aspects of
the Exchange Offer shall have been favorably confirmed pursuant to an appraisal
conducted by a reputable independent valuator whose opinion satisfies the
requirements of applicable French law and regulations.
(g) All of the MEDASYS Principals shall have tendered and not withdrawn
all MEDASYS Common shares and MEDASYS warrants they beneficially own pursuant to
the terms and conditions of the Exchange Offer.
(h) At least sixty-seven percent (67%) of the voting rights of all
issued and outstanding MEDASYS Common shares (taking into account the effect of
the transfer of such shares to CITATION) shall have been tendered and not
withdrawn pursuant to the terms and conditions of the Exchange Offer prior to
the end of the period (including any extensions) provided for MEDASYS
shareholders to tender their MEDASYS Common shares and MEDASYS warrants for
exchange.
(i) [Reserved]
(j) All conditions precedent in favor of CITATION and consented to by
MEDASYS, which consent shall not be unreasonably withheld, set forth in the
Exchange Offer documents that are sent to the MEDASYS shareholders shall have
been fulfilled or waived by CITATION.
(k) No court, governmental agency, stock exchange or market, or other
entity of competent jurisdiction shall have entered any order or rule forbidding
or delaying the commencement or completion of the Exchange Offer or requiring a
material adverse change
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61
in the terms or conditions of the Exchange Offer that CITATION has not approved,
and such order or rule shall not have been withdrawn or expired.
6.04 THE EXCHANGE OFFER--MEDASYS PRINCIPALS. The MEDASYS Principals'
obligations to tender (and not withdraw) their MEDASYS Common shares pursuant to
the Exchange Offer as set forth in SECTION 1.03(B) of this Agreement is subject
to the fulfillment or waiver by MEDASYS of all of the following conditions:
(a) The French IPO either shall be conducted simultaneously with the
Exchange offer or shall have closed in accordance with the terms and conditions
of this Agreement, and if more than 2,000,000 CITATION Common shares were sold,
or if the CITATION Common shares were sold for less than US $5.00 per share,
such terms were consented to by MEDASYS prior to completion of the French IPO.
(b) The representations and warranties of CITATION shall be true and
correct in all material respects as of the date of this Agreement and as of the
completion of the Exchange Offer (as though made on and as of such closing date,
except (i) to the extent such representations and warranties are by their
express provisions made as of a specific date, and (ii) for the effect of
transactions contemplated by this Agreement), each such MEDASYS Principal shall
have received a signed certificate from CITATION to that effect, signed on
behalf of CITATION by its Chairman or President and the Secretary of CITATION,
which is to the best of their knowledge, and CITATION shall have performed all
of its agreements and covenants in this Agreement which are capable of
performance as of such time.
(c) The CITATION Common shares to be issued in the Exchange Offer shall
have been approved for trading after their issuance pursuant to the Exchange
Offer, on the New Market of the Bourse in France and on the Nasdaq National
Market in the United States, and shall have been registered under the Securities
Act and, except with respect to "affiliates" (as defined in the Securities Act)
may be offered and sold in the United States without further registration under
the Securities Act and the French IPO Rules.
(d) The exchange ratio of CITATION Common shares for MEDASYS Common
shares in the Exchange Offer shall be no less than one CITATION Common share for
each one MEDASYS Common share, and such exchange ratio and other aspects of the
Exchange Offer shall have been favorably confirmed pursuant to an appraisal
conducted by a reputable independent valuator whose opinion satisfies the
requirements of applicable French law and regulations.
(e) At least sixty-seven percent (67%) of the voting rights of all
issued and outstanding MEDASYS Common shares (taking into account the effect of
the transfer of
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62
such shares to CITATION) shall have been tendered and not withdrawn pursuant to
the terms and conditions of the Exchange Offer prior to the end of the period
(including any extensions) provided for MEDASYS shareholders to tender their
MEDASYS Common shares and MEDASYS warrants for exchange.
(f) [Reserved]
(g) No court, governmental agency, stock exchange or market, or other
entity of competent jurisdiction shall have entered any order or rule forbidding
or delaying the completion of the Exchange Offer or requiring a material adverse
change in the terms or conditions of the Exchange Offer that CITATION has not
approved, and such order or rule shall not have been withdrawn or expired.
6.05 THE EXCHANGE OFFER--MEDASYS. The obligation of MEDASYS to
recommend to its shareholders that they tender their MEDASYS Common shares in
the Exchange Offer is subject to the fulfillment or waiver by MEDASYS of all of
the following conditions:
(a) The French IPO either shall be conducted simultaneously with the
Exchange offer or shall be completed in accordance with the terms and conditions
of this Agreement, and if more than 2,000,000 CITATION Common shares were sold,
or if the CITATION Common shares were sold for less than US $5.00 per share,
such terms were consented to by MEDASYS prior to completion of the French IPO.
(b) The representations and warranties of CITATION shall be true and
correct in all material respects as of the date of this Agreement and as of the
completion of the Exchange Offer (as though made on and as of such completion,
except (i) to the extent such representations and warranties are by their
express provisions made as of a specific date, and (ii) for the effect of
transactions contemplated by this Agreement), each such MEDASYS Principal shall
have received a signed certificate from CITATION to that effect, signed on
behalf of CITATION by its Chairman or President and the Secretary of CITATION,
which is to the best of their knowledge, and CITATION shall have performed all
of its agreements and covenants in this Agreement which are capable of
performance as of such time.
(c) The CITATION Common shares to be issued in the Exchange Offer shall
have been approved for trading after their issuance pursuant to the Exchange
Offer, on the New Market of the French Bourse and on the Nasdaq National Market
in the United States.
(d) The exchange ratio of CITATION Common shares for MEDASYS Common
shares in the Exchange Offer shall be no less than one CITATION Common share for
each
Agreement and Plan of Reorganization Page 56
63
one MEDASYS Common share, and such exchange ratio and other aspects of the
Exchange Offer shall have been favorably confirmed pursuant to an appraisal
conducted by a reputable independent valuator whose opinion satisfies the
requirements of applicable French law and regulations, and which may the same as
the fairness opinion referenced above in SECTION 6.03(B) of this Agreement.
(e) [Reserved]
(f) No court, governmental agency, stock exchange or market, or other
entity of competent jurisdiction shall have entered any order or rule forbidding
or delaying the completion of the Exchange Offer or requiring a material adverse
change in the terms or conditions of the Exchange Offer that MEDASYS has not
approved, and such order or rule shall not have been withdrawn or expired.
ARTICLE VII
TERMINATION, AMENDMENT, AND WAIVER
7.01 TERMINATION. This Agreement may be terminated at any time prior to
the completion of the Exchange Offer, whether before or after approval by the
shareholders of CITATION:
(a) By mutual consent of the Board of Directors of CITATION and the
Conseil d'Administration of MEDASYS;
(b) By the Board of Directors of CITATION or of MEDASYS at any time
after March 31, 1999, if the French IPO and the Exchange Offer shall not both
have been completed;
(c) By the Board of Directors of CITATION or the Conseil
d'Administration of MEDASYS if the New Market Company (Societe du Nouveau
Marche), the Financial Market Council (Conseil des Marches Financiers), or
the French Securities Exchange Commission (Commission des Operations de
Bourse) or any other national, federal, state, and/or provincial regulatory
agency whose approval is required for the consummation of the transactions
contemplated hereby shall have denied approval of such transactions and such
denial has, after exhaustion of any and all available appellate procedures,
become final;
(d) By the Board of Directors of CITATION or the Conseil
d'Administration of MEDASYS in the event of a material misrepresentation or
breach by the other party or the other party's principals who are parties to
this Agreement of any representation, warranty, or agreement contained in this
Agreement, which misrepresentation or breach is not cured
Agreement and Plan of Reorganization Page 57
64
within 15 days (or such longer period not exceeding 40 days in the event such
misrepresentation or breach cannot reasonably be cured within 15 days and a cure
is being pursued with reasonable diligence) after written notice thereof is
given to the party committing such misrepresentation or breach or waived by such
other party(ies), specifying the nature of the misrepresentation or breach and
requesting that it be remedied;
(e) (i) By the Board of Directors of CITATION in the event that the
Conseil d'Administration of MEDASYS is advised in writing by competent legal
counsel that taking the actions specified in SECTION 5.05 would be a breach of
the fiduciary duties of the Conseil d'Administration, in view of known facts and
circumstances, and thereafter the Conseil d'Administration fails to act as
specified in SECTION 5.05;
(ii) By the Conseil d'Adminstration of MEDASYS in the event the Board
of Directors of CITATION is advised in writing by competent legal counsel that
the consummation of the transactions contemplated by this Agreement would be a
breach of the Board of Director's fiduciary duties and thereafter the Board of
Directors acts or omit to act, or causes CITATION to act or to omit to act, in
such manner as to cause one or more of the transactions contemplated hereunder
to not be completed, or the CITATION Principals shall have failed to act in the
manner provided for in SECTION 1.03 (A) of this Agreement and, but for such
failure, CITATION would have been able to complete the transactions contemplated
in this Agreement;
(f) By the Board of Directors of CITATION or the Conseil
d'Administration of MEDASYS, respectively, if the other of MEDASYS or CITATION
shall have, pursuant to the final sentence of SECTION 5.11 of this Agreement,
directly or indirectly (i) solicited, encouraged, considered, or discussed any
Acquisition Offer or Proposal, or (ii) provided any information to, or
negotiated with, any other person or entity in connection with any possible sale
of all or any portion of the stock, assets, or business of, respectively, either
MEDASYS or a MEDASYS Subsidiary, or either CITATION or a CITATION Subsidiary,
when, respectively, MEDASYS or CITATION had reason to believe such information
may be utilized to evaluate or make a possible Acquisition Offer or Proposal,
and subsequently the Exchange Offer is not completed by or on March 31, 1999; or
(g) By the Board of Directors of CITATION: (i) if CITATION is unable to
secure the fairness opinion referred to in SECTION 5.13 of this Agreement by no
later than 30 days after the date hereof; or (ii) within five days following the
completion of CITATION's due diligence investigation of MEDASYS if CITATION
determines in its discretion that the results of such due diligence
investigation are not satisfactory to it. Such due diligence investigation shall
be completed no later than 14 days after the date hereof.
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65
7.02 EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided in SECTION 7.01 above, this Agreement shall forthwith
become void and without further effect and there shall be no liability on the
part of any party hereto or the respective officers and directors of any party,
except as set forth in the second sentence of SECTION 5.01 (respecting
confidentiality and the return of information) and in SECTION 5.07 (respecting
payment of certain expenses with respect to termination by reason of SECTION
7.01), and, except that, in addition to any monies owed pursuant to SECTION 5.07
of this Agreement: (i) termination of this Agreement pursuant to SECTION 7.01
(D) shall not relieve the non-performing or defaulting party of any liability to
any other party hereto arising from the non-performance and/or breach prior to
the date of such termination of any covenant, agreement, term, provision,
representation, warranty required to be observed, performed, complied with
and/or kept by such non-performing or defaulting party for all costs, expenses,
and fees (including legal, accounting, investment banking, and financial
advisory fees) incurred by such other party, provided, however, that in no event
shall the liability of any non-performing or defaulting party to any other party
exceed $500,000, and further provided, however, that there shall be no liability
for breach of a representation or warranty that was, when given, true and
correct to the best knowledge and belief of the party giving same and which
later becomes (other than through an act or omission of the party giving same)
to be incorrect; and (ii) termination of this Agreement pursuant to SECTION
7.01(E) or (F) shall obligate the party receiving notice of termination to pay
US $500,000 to the party giving notice of termination, and any amounts not
timely paid shall accrue interest at the rate of 12 percent per annum from the
termination date, and shall be in lieu of all other remedies, claims, causes of
action, or damages to which the party giving notice of termination or any other
party hereto might otherwise be entitled by law or in equity.
7.03 AMENDMENT. This Agreement and the Exhibits and Schedules hereto
may be amended by the parties hereto by action taken by or on behalf of the
Board of Directors of CITATION and the Conseil d'Administration of MEDASYS and
the holders of a majority of the MEDASYS Common shares owned by the MEDASYS
Principals as described in EXHIBIT A, at any time before or after approval of
this Agreement by the shareholders of CITATION; provided, however, that after
any such approval no such modification shall increase the number of CITATION
Common shares issued pursuant to the Exchange Offer beyond what was authorized
by the shareholders of CITATION, or alter or change any of the terms of this
Agreement if such alteration or change would materially affect the shareholders
of CITATION. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties whose signature is required to
effectuate an amendment hereto.
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66
7.04 WAIVER. Any term, condition or provision of this Agreement may be
waived in writing at any time by the party which is, or whose shareholders are,
entitled to the benefits thereof.
ARTICLE VIII
GENERAL PROVISIONS
8.01 SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND AGREEMENTS. No
investigation by the parties hereto made heretofore or hereafter shall affect
the representations and warranties of the parties which are contained herein and
each such representation and warranty shall survive such investigation. All
representations, warranties, and agreements in this Agreement of CITATION and
MEDASYS or in any instrument delivered by CITATION or MEDASYS pursuant to this
Agreement shall not survive the completion of the Exchange Offer or the
termination of this Agreement in accordance with its terms. In the event of
termination of this Agreement in accordance with its terms, the agreements
contained in SECTIONS 5.01 (second sentence), 5.06, 7.02 AND 8.02 shall survive
such termination.
8.02 [RESERVED]
8.03 NO ASSIGNMENT; SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, but neither this Agreement nor any right or obligation
set forth in any provision hereof may be transferred or assigned by any party
hereto without the prior written consent of all other parties, and any purported
transfer or assignment in violation of this Section shall be void and of no
effect.
8.04 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remaining provisions of this Agreement.
8.05 NO IMPLIED WAIVER. No failure or delay on the part of CITATION or
MEDASYS to exercise any right, power, or privilege hereunder or under any
instrument executed pursuant hereto shall operate as a waiver nor shall any
single or partial exercise of any right, power, or privilege preclude any other
further exercise thereof or the exercise of any other right, power, or
privilege.
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67
8.06 HEADINGS. Article, section, subsection, and paragraph titles,
captions and headings herein are inserted only as a matter of convenience and
for reference, and in no way define, limit, extend, or describe the scope of
this Agreement or the intent of any provision hereof.
8.07 ENTIRE AGREEMENT. This Agreement and the Schedules and Exhibits
hereto constitutes the entire agreement between and among the parties with
respect to the subject matter hereof, supersedes all prior negotiations,
representations, warranties, commitments, offers, letters of interest or intent,
proposal letters, contracts, writings, or other agreements or understandings
with respect thereto. No waiver, and no modification or amendment of any
provision of this Agreement shall be effective unless specifically made in
writing and duly signed by all parties thereto.
8.08 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and any party to this Agreement may execute and deliver this
Agreement by executing and delivering any of such counterparts, each of which
when executed and delivered shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
8.09 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to be duly received (i) on the date given if
delivered personally or by cable, telegram, or facsimile or (ii) on the date
received if mailed by registered or certified mail (return receipt requested)
or, in the case of international delivery, by a recognized international express
delivery courier, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) If to CITATION:
Mr. J. Xxxxxx Copper, Chairman
CITATION Computer Systems, Inc.
000 Xxxxx Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000, X.X.X.
Facsimile: 000-000-0000
Copy to: Xxxxxxx X. Xxxxxxxxx, Esq.
Suelthaus & Xxxxx, P.C.
0000 Xxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000, U.S.A.
Facsimile: 314-727-7166
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68
(b) If to the CITATION Principals:
Xx. Xxxxxxx X. Xxxxx
CITATION Computer Systems, Inc.
000 Xxxxx Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000, X.X.X.
Facsimile: 000-000-0000
Copy to: Xxxxxxx X. Xxxxxxxxx, Esq.
Suelthaus & Xxxxx, P.C.
0000 Xxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000, X.X.X.
Facsimile: 314-727-7166
(c) If to MEDASYS:
Mr. Xxxx-Xxxxx Lucani
Medasys Digital Systems
Espace Xxxxxxxxxxxxx xx Xxxxx Xxxxx-Xx "Xxxxxxx"
00000-Xxx-xxx-Xxxxxx Xxxxx
XXXXXX
Facsimile: (00) 00 00 00 00 00
Copy to: Xxxxx X. Xxxx, Esq.
Xxxxxx Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000, X.X.X.
Facsimile: 000-000-0000
(d) If to MEDASYS Principals:
Xx. Xxxxxx Xxxxxxxxxx
c/o MEDASYS Digital Systems
Espace Technologique de Saint Xxxxx-Le "Mercury"
91193-Gif-sur-Xxxxxx Cedex
France
Facsimile: (00) 00 00 00 00 00
Agreement and Plan of Reorganization Page 62
69
Copy to: Xxxxx X. Xxxx, Esq.
Xxxxxx Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000, X.X.X.
Facsimile: 000-000-0000
provided, however, that the providing of notice to counsel shall not, of itself,
be deemed the providing of notice to a party hereto.
8.10 GOVERNING LAW; JURISDICTION AND VENUE. This Agreement shall be
governed by and controlled as to validity, enforcement, interpretation, effect,
and in all other respects by the internal laws of the State of Missouri, U.S.A.,
applicable to contracts made in that state by residents of that state, without
reference to conflict of laws principles. All disputes arising under or related
to this Agreement shall be submitted to arbitration at either St. Louis City or
St. Louis County, Missouri, USA, pursuant to the Commercial Arbitration Rules of
the American Arbitration Association then in effect; provided, however, that the
parties shall be entitled to utilize and employ all discovery devices available
under the Federal Rules of Civil Procedure then in effect in order to prepare
for and conduct any hearing to be held hereunder. The parties hereto acknowledge
that the French IPO and Exchange Offer shall be subject to applicable French
law.
8.11 NO THIRD PARTY BENEFICIARIES. It is the express intent of the
parties hereunder that no person other than the parties hereto shall be deemed
to have any rights arising under this Agreement, and that there are no third
party beneficiaries hereunder.
8.12 SPECIFIC PERFORMANCE. Except as otherwise provided in SECTION
7.02, respecting liability of a party arising from termination of this Agreement
pursuant to SECTION 7.01(E) or (F), the parties hereto acknowledge that the
failure of any party hereunder to meet its obligations arising out of any
covenant or agreement contained in this Agreement will result in irreparable
harm to the other parties hereto, for which no adequate remedy at law or in
equity exists, and each party hereby consents to the imposition of injunctive or
other equitable relief by any court having jurisdiction and venue over the
parties pursuant to SECTION 8.10 of this Agreement.
IN WITNESS WHEREOF, CITATION and MEDASYS have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
and each of the CITATION Principals and the MEDASYS Principals has executed this
Agreement, as of the 15th day of September, 1998.
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70
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH
MAY BE ENFORCED BY THE PARTIES.
CITATION: CITATION COMPUTER SYSTEMS, INC.
By /s/ J. Xxxxxx Copper
----------------------------------------
J. Xxxxxx Copper
Chairman and Chief Executive Officer
ATTEST: /s/ Xxxxxxx Xxxxxxxxx
---------------------------------
Title: Exec Assistant
-------------------------------
MEDASYS: MEDASYS DIGITAL SYSTEMS
By /s/ Xxxx-Xxxxx Lucani
----------------------------------------
Xxxx-Xxxxx Lucani
President-Directeur General
ATTEST: /s/ Xxxxxxx Xxxxxxxxx
---------------------------------
Title: Exec Assistant
-------------------------------
CITATION PRINCIPALS: /s/ J. Xxxxxx Copper
------------------------------------------
J. Xxxxxx Copper
/s/ Xxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxxx
------------------------------------------
Xxxxx X. Xxxxxxx
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71
/s/ Xxxx X. Xxxxx
------------------------------------------
Xxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxx
------------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxx X. X'Xxxxxxx
------------------------------------------
Xxxxx X. X'Xxxxxxx
CFB VENTURE FUND I, INC.
By /s/ Xxxxx X. X'Xxxxxxx
----------------------------------------
Xxxxx X. X'Xxxxxxx, Chairman
MEDASYS PRINCIPALS: /s/ Xxxx-Xxxxx Lucani
------------------------------------------
Xxxx-Xxxxx Lucani
/s/ Xxxxxx Xxxxxxxxxx
------------------------------------------
Xxxxxx Xxxxxxxxxx
/s/ Xxxxxx Xxxxxxxxxxxx
------------------------------------------
Xxxxxx Xxxxxxxxxxxx
Agreement and Plan of Reorganization Page 65
