AGREEMENT AND PLAN OF MERGER
dated as of
May 15, 2000
among
CERNER CORPORATION,
CERNER PERFORMANCE LOGISTICS, INC.
and
CITATION COMPUTER SYSTEMS, INC.
ARTICLE I DEFINITIONS....................................................1
ARTICLE II THE MERGER....................................................2
Section 2.1..........................................................2
Section 2.2.Dissenting Shares........................................5
Section 2.3.Surrender of Certificates................................6
Section 2.4.Affiliates...............................................7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF CERNER.....................8
Section 3.1.Corporate Existence and Power............................8
Section 3.2.Corporate Authorization..................................8
Section 3.3.Governmental Authorization...............................8
Section 3.4.Non-Contravention........................................8
Section 3.5.Cerner SEC Documents.....................................9
Section 3.6.Information to be Supplied...............................9
Section 3.7.Absence of Certain Changes..............................10
Section 3.8.Litigation..............................................10
Section 3.9.Finders' Fees...........................................10
Section 3.10.Capitalization.........................................10
Section 0.00.Xxxxxxxxx Statements; No Material Undisclosed
Liabilities....................................................11
Section 3.12.Taxes..................................................11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF CITATION...................12
Section 4.1.Corporate Existence and Power...........................12
Section 4.2.Corporate Authorization.................................12
Section 4.3.Governmental Authorization..............................12
Section 4.4.Non-Contravention.......................................12
Section 4.5.Capitalization..........................................13
Section 4.6.Subsidiaries............................................14
Section 0.0.Xxxxxxxxx Statements; No Material Undisclosed
Liabilities....................................................14
Section 4.8.CITATION SEC Documents..................................14
Section 4.9.Information to be Supplied..............................15
Section 4.10.Absence of Certain Changes.............................15
Section 4.11.Litigation.............................................16
Section 4.12.Taxes..................................................16
Section 4.13.Employee Benefits......................................17
Section 4.14.Compliance with Laws; Licenses, Permits and
Registrations..................................................18
Section 4.15.Title to Properties....................................19
Section 4.16.Intellectual Property..................................19
Section 4.17.Environmental Matters..................................20
Section 4.18.Finders' Fees; Opinions of Financial Advisor...........20
Section 4.19.Required Vote and Waiver; Board Approval...............21
Section 4.20.State Takeover Statutes................................21
Section 0.00.Xxx Treatment..........................................21
Section 4.22.Certain Agreements.....................................21
Section 4.23.Employment Agreements..................................22
Section 4.24.Transactions With Directors, Officers and Affiliates...22
Section 4.25.Material Contracts.....................................22
Section 4.26.Certain Business Practices.............................23
Section 0.00.Xxxxxxxxx..............................................23
ARTICLE V REPRESENTATIONS AND WARRANTIES OF MERGER SUB..................24
Section 5.1.Organization............................................24
Section 5.2.Corporate Authorization.................................24
Section 5.3.Non-Contravention.......................................24
Section 0.0.Xx Business Activities..................................24
Section 5.5.Taxes...................................................24
ARTICLE VI COVENANTS OF CITATION........................................24
Section 6.1.CITATION Interim Operations.............................24
Section 6.2.Acquisition Proposals; Board Recommendation.............27
Section 6.3.Employment Agreements...................................29
Section 6.4.Shareholder Agreement...................................29
ARTICLE VII COVENANTS OF CITATION AND CERNER............................29
Section 7.1.Reasonable Best Efforts.................................29
Section 7.2.Certain Filings; Cooperation in Receipt of Consents;
Listing........................................................29
Section 7.3.Public Announcements....................................31
Section 7.4.Access to Information; Notification of Certain Matters..31
Section 7.5.Further Assurances......................................32
Section 0.0.Xxx Treatment...........................................32
Section 7.7.Affiliates..............................................33
Section 7.8.Benefit Matters.........................................33
Section 7.9.Antitrust Matters.......................................33
Section 7.10.Exemption From Liability Under Section 16(b)...........33
Section 7.11.Indemnification and Insurance..........................34
ARTICLE VIII CONDITIONS TO THE MERGER...................................35
Section 8.1.Conditions to the Obligations of Each Party.............35
Section 8.2.Conditions to the Obligations of Cerner and Merger Sub..36
Section 8.3.Conditions to the Obligations of CITATION...............37
ARTICLE IX TERMINATION..................................................38
Section 9.1.Termination.............................................38
Section 9.2.Effect of Termination...................................3
Section 9.3.Termination Fees; Other Fees............................40
ARTICLE X MISCELLANEOUS.................................................40
Section 10.1.Notices................................................40
Section 10.2.Amendments; No Waivers.................................41
Section 10.3.Assignment.............................................41
Section 10.4.Governing Law..........................................42
Section 10.5.Counterparts; Effectiveness............................42
Section 00.0.Xx Third Party Beneficiaries...........................42
Section 10.7.Interpretation.........................................42
Section 10.8.Enforcement............................................42
Section 10.9.Entire Agreement.......................................42
Section 10.10. Severability.........................................42
APPENDICES
Appendix I - Definitions
EXHIBITS
Exhibit A - Certificate of Merger
Exhibit B - Articles of Merger
Exhibit C - Representation Letter from Cerner
Exhibit D - Representation Letter from CITATION
Exhibit E - Affiliate Agreement
Exhibit F - List of Employees
Exhibit G - Form of Employment Agreement
Exhibit H - Form of Legal Opinion - CITATION
Exhibit I - Form of Legal Opinion - Cerner
Exhibit J - Confidentiality Agreement
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 15, 2000 (the
"Agreement"), by and among Cerner Corporation, a Delaware
corporation ("Cerner"), Cerner Performance Logistics, Inc., a
Delaware corporation and a wholly-owned subsidiary of Cerner
("Merger Sub"), and CITATION Computer Systems, Inc., a Missouri
corporation ("CITATION").
RECITALS:
WHEREAS, the respective Boards of Directors of Cerner,
CITATION and Merger Sub have determined that the merger of
CITATION with and into Merger Sub (the "Merger"), upon the terms
and subject to the conditions set forth in this Agreement, would
be fair and in the best interests of their respective
stockholders, and such Boards of Directors have approved such
Merger, pursuant to which each issued and outstanding share of
common stock, par value $.10 per share ("Common Stock"), of
CITATION (the "Shares") (other than (a) Shares owned, directly or
indirectly, by Cerner or any Subsidiary of Cerner and
(b) dissenting shares) will be converted into the right to
receive cash and shares of Cerner Common Stock as provided
herein; and
WHEREAS, the Merger and this Agreement require the
affirmative vote, in accordance with applicable law and the
Articles of Incorporation and By-laws of CITATION, of holders of
at least two-thirds of the outstanding Shares entitled to vote
thereon for the approval thereof (the "CITATION Shareholder
Approval"); and
WHEREAS, Cerner is unwilling to enter into this Agreement
unless, contemporaneously with the execution and delivery of this
Agreement, certain directors and executive officers of CITATION
who are shareholders of CITATION enter into an agreement (the
"Shareholder Agreement") granting to Cerner irrevocable proxies
to vote all Shares beneficially owned by such shareholders "For"
the merger in connection with the CITATION Shareholder Approval
and an option to purchase all Shares beneficially owned by such
shareholders under certain circumstances; and
WHEREAS, Cerner, CITATION and Merger Sub desire to make
certain representations, warranties, covenants and agreements in
connection with the Merger and also to prescribe various
conditions to the Merger.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement,
the parties agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the capitalized terms used
in this Agreement shall have the meanings specified or referred
to in Appendix I hereto which is incorporated herein by
reference.
ARTICLE II
THE MERGER
Section 2.1.
(a) The Merger.
---------- Upon the terms and subject to the conditions of
this Agreement and in accordance with the General Corporation Law
of the State of Delaware (the "Delaware Law") and The General and
Business Corporation Law of Missouri (the "Missouri Law"), at the
Effective Time CITATION shall be merged with and into Merger Sub.
As a result of the Merger, the separate corporate existence of
CITATION shall cease and Merger Sub shall continue as the
surviving corporation of the Merger (the "Surviving
Corporation").
(b) Effective Time.
-------------- As soon as practicable after the Closing of
the Merger, (i) the Certificate of Merger for the Merger
("Certificate of Merger"), in substantially the form attached
hereto as Exhibit A, prepared and executed in accordance with the
relevant provisions of the Delaware Law, shall be filed with the
Secretary of State of Delaware and (ii) the Articles of Merger
for the Merger ("Articles of Merger") in substantially the form
attached hereto as Exhibit B, prepared and executed in accordance
with the relevant provisions of the Missouri Law shall be filed
with the Secretary of State of Missouri. The parties hereto
agree to take all such further actions as may be required by law
to make the Merger effective. The Merger shall become effective
in accordance with the terms of this Agreement, the Certificate
of Merger and the Articles of Merger at the time and date
contemplated therein (such time and date being referred to herein
as the "Effective Time").
(c) The Closing.
----------- The Closing of the Merger and transactions
contemplated by this Agreement will take place at 10:00 a.m. on a
date mutually agreed upon by the parties hereto, which shall be
no later than the third Business Day following the date on which
all of the conditions to the obligations of the parties hereunder
set forth in Article VIII hereof have been satisfied or waived.
The Closing shall take place at the offices of Xxxxxxx, Mag &
Fizzell, P.C., at 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx,
Xxxxxxxx, or such other place as may be mutually agreed upon by
the parties hereto.
(d) Effects of the Merger.
--------------------- At and after the Effective Time, the
Merger will have the effects set forth in the Delaware Law and
the Missouri Law. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of Merger Sub
and CITATION shall be vested in the Surviving Corporation, and
all debts, liabilities and duties of Merger Sub and CITATION
shall become the debts, liabilities and duties of the Surviving
Corporation. In addition, the Merger shall have the following
effects:
(i) Certificate of Incorporation.
---------------------------- The Certificate of
Incorporation of Merger Sub as in effect immediately prior to the
Effective Time shall be the Certificate of Incorporation of the
Surviving Corporation; provided that Article First thereof shall
be amended, effective as of the Effective Time, to read
2
in its entirety as follows: The name of the corporation is
"Cerner CITATION, Inc."
(ii) Bylaws.
------ The Bylaws of Merger Sub as in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving
Corporation.
(iii) Board of Directors.
------------------ The directors of Merger Sub at the
Effective Time shall be the initial directors of the Surviving
Corporation, until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified,
as the case may be.
(iv) Officers.
-------- The officers of Merger Sub at the Effective Time
shall be the initial officers of the Surviving Corporation, until
the earlier of their resignation or removal or until their
respective successors are duly elected or appointed and
qualified, as the case may be.
(e) Effect on Capital Stock.
----------------------- At the Effective Time, by virtue
of the Merger and without any action on the part of the parties
hereto or their respective stockholders:
(i) Common Stock.
------------ With respect to each holder of record of
Common Stock outstanding immediately prior to the Effective Time
(except for persons who object to the Merger and comply with all
provisions of Section 351.455 of the Missouri Law concerning the
right of such holders to dissent from the Merger and demand fair
value for their shares), (A) 90% of the shares of CITATION Common
Stock held by such holder shall be converted into that number of
shares of Cerner Common Stock determined by multiplying the
number of such shares of CITATION Common Stock times the Exchange
Ratio (together with any cash in lieu of fractional shares of
Cerner Common Stock to be paid pursuant to Section 2.1(e)(iv)),
and (B) 10% of the shares of CITATION Common Stock held by such
holder shall be converted into the right to receive $5.10 in cash
per share of CITATION Common Stock (collectively, the "Merger
Consideration").
(ii) CITATION Stock held by Cerner, Merger Sub and CITATION.
------------------------------------------------------
Each share of Common Stock held by CITATION as treasury stock or
owned by Cerner, Merger Sub or any Cerner or CITATION
Subsidiaries immediately prior to the Effective Time shall be
cancelled without payment of any consideration therefor and shall
cease to exist.
(iii) Merger Sub Common Stock.
----------------------- Each share of common stock of
Merger Sub outstanding and each share held in treasury
immediately prior to the Effective Time shall remain outstanding
and be unaffected by the Merger.
(iv) Fractional Shares.
----------------- No fraction of a share of Cerner Common
Stock shall be issued in connection with the conversion of Common
Stock in the Merger and the distribution of Cerner Common Stock
in respect thereof, but in lieu of such fraction, the Exchange
Agent shall make a cash payment (without interest and subject to
the payment of any applicable withholding Taxes) equal to the
same fraction of the market value of a full share of Cerner
Common Stock,
3
computed on the basis of the Average Cerner Stock
Price determined as of the Closing Date.
(f) Stock Options and Other Stock Compensation.
------------------------------------------
(i) On or prior to the Effective Time, CITATION will take all
action necessary such that each stock option or other stock
related right or other form of stock related incentive or
deferred compensation that was granted pursuant to the CITATION
Employee Plans (other than CITATION's 401(k) Plan, which will
receive the consideration set forth in Section 2.1(e)(i)) (as
defined in Section 4.13(a)) prior to the Effective Time and which
remains outstanding immediately prior to the Effective Time
(collectively, the "Stock Rights") shall cease to represent a
right with respect to shares of Common Stock and shall be
converted, at the Effective Time, into a right, on the same terms
and conditions as were applicable under such Stock Right (but
taking into account any changes thereto (except that there shall
be no acceleration in the vesting or exercisability of such
option, right or incentive compensation by reason of this
Agreement, the Merger or the other matters contemplated by this
Agreement other than existing agreements which by their terms
provide for acceleration, which agreements are set forth on
Schedule 2.1(f) indicating the optionees thereof), provided for
in the CITATION Employee Plans or in the terms of such right by
reason of this Agreement or the transactions contemplated
hereby), with respect to that number of shares of Cerner Common
Stock determined by multiplying the number of shares of Common
Stock subject to such Stock Right, times the Exchange Ratio,
rounded, if necessary, to the nearest whole share of Cerner
Common Stock, at (in the case of a stock option or stock
appreciation right) a price per share (rounded to the nearest one-
hundredth of a cent) determined by dividing the per-share
exercise price specified in such stock option or stock
appreciation right, as applicable, by the Exchange Ratio;
provided, however, that in the case of any stock option to which
Section 421 of the Code applies by reason of its qualification
under Section 422 of the Code, the option price, the number of
shares subject to such option and the terms and conditions of
exercise of such option shall be determined in a manner
consistent with the requirements of Section 424(a) of the Code.
(ii) As soon as practicable after the Effective Time, the
Surviving Corporation shall deliver to the holders of Stock
Rights appropriate notices setting forth such holders' rights
pursuant to the CITATION Employee Plans (except that there shall
be no acceleration in the vesting or exercisability of such
option, right or incentive compensation by reason of this
Agreement, the Merger or the other matters contemplated by this
Agreement, other than pursuant to those agreements set forth on
Schedule 2.1(f)) and the agreements evidencing the grants of such
Stock Rights shall continue in effect on the same terms and
conditions (subject to the adjustments required by this Section
2.1(f)(ii) after giving effect to the Merger and the terms of the
CITATION Employee Plans (except that there shall be no
acceleration in the vesting or exercisability of such option,
right or incentive compensation by reason of this Agreement, the
Merger or the other matters contemplated by this Agreement other
than existing agreements which by their
4
terms provide for acceleration)). To the extent permitted by law,
Cerner and the Surviving Corporation shall comply with the terms of
the CITATION Employee Plans and shall take such reasonable steps as
are necessary or required by, and subject to the provisions of, such
CITATION Employee Plans, to have the stock options which
qualified as incentive stock options prior to the Effective Time
continue to qualify as incentive stock options of Cerner after
the Effective Time.
(iii) Cerner shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Cerner
Common Stock for delivery upon exercise of Stock Rights in
accordance with this Section 2.1(f). Promptly after the
Effective Time, Cerner shall file a registration statement(s) on
Form S-8 with respect to the shares of Cerner Common Stock
subject to such stock options or other stock related rights or
other forms of stock related incentive or deferred compensation,
and shall use commercially reasonable efforts to maintain the
effectiveness of such registration statement or registration
statements (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as such stock options
or other stock related rights or other forms of stock related
incentive or deferred compensation remain outstanding. With
respect to those individuals who subsequent to the Merger will be
subject to the reporting requirements under Section 16(a) of the
Exchange Act, where applicable, Cerner shall administer the
CITATION Employee Plans in a manner consistent with the
exemptions provided by Rule 16b-3 promulgated under the Exchange
Act.
(g) Certain Adjustments.
------------------- If, between the date of this Agreement
and the Effective Time, the outstanding Common Stock or Cerner
Common Stock shall have been changed into a different number of
shares or different class by reason of any reclassification,
recapitalization, stock split, reverse stock split, combination
or exchange of shares, or a stock dividend or dividend payable in
any other securities shall be declared with a record date within
such period, or any similar event shall have occurred, the Merger
Consideration and Exchange Ratio shall each be appropriately
adjusted to provide to the holders of Common Stock or
participants in the CITATION Employee Plans the same economic
effect as contemplated by this Agreement prior to such event.
Section 2.2. Dissenting Shares.
----------------- Notwithstanding Section
2.1(e), shares of Common Stock outstanding immediately prior to
the Effective Time and held by a holder who has not voted in
favor of the Merger or consented thereto in writing and who has
properly demanded appraisal for such shares of Common Stock in
accordance with Section 351.455 of the Missouri Law shall not be
converted into the Merger Consideration and such holder shall be
entitled only to such rights to appraisal and payment under the
Missouri Law, unless such holder fails to perfect or withdraws or
otherwise loses his right to appraisal. If after the Effective
Time such holder fails to perfect or withdraws or loses his right
to appraisal, such shares of Common Stock shall be treated as if
they had been converted as of the Effective Time into the Merger
Consideration. CITATION shall give the Surviving Corporation
prompt notice of any demands received by CITATION for appraisal
of shares of Common Stock, and the Surviving Corporation shall
have the right to participate in all negotiations and proceedings
with respect to such
5
demands. CITATION shall not, except with the prior written consent
of the Surviving Corporation, make any payment with respect to, or settle
or offer to settle, any such demands.
Section 2.3. Surrender of Certificates.
-------------------------
(a) Cerner, CITATION and Merger Sub hereby appoint the Exchange
Agent to act as the exchange agent in connection with the Merger.
Except as otherwise provided in this Article II, from and after
the Effective Time, each holder of a certificate that immediately
prior to the Effective Time represented outstanding shares of
Common Stock (collectively, the "Certificates") shall be entitled
to receive in exchange therefor, upon surrender thereof to the
Exchange Agent, (i) a certificate or certificates representing
the number of whole shares of Cerner Common Stock into which such
holder's shares were converted in the Merger pursuant to Section
2.1(e)(i)(A) and (ii) cash in an amount equal to the cash
consideration to which such holder is entitled to receive
pursuant to Section 2.1(e)(i)(B). Prior to the Effective Time,
the Surviving Corporation will deliver to the Exchange Agent, in
trust for the benefit of the holders of Common Stock and Cerner
Common Stock, (i) certificates representing all of the shares of
Cerner Common Stock to be issued in connection with the Merger
pursuant to Section 2.1(e)(i)(A), (ii) cash in an amount
sufficient for payment in lieu of fractional shares necessary to
make the exchanges contemplated by this Article II on a timely
basis, and (iii) cash in an amount equal to the cash portion of
the Merger Consideration pursuant to Section 2.1(e)(i)(B) (such
shares of Cerner Common Stock and cash together with any
dividends or distributions with respect thereto, being
hereinafter referred to as the "Exchange Fund").
(b) Promptly after the Effective Time, the Exchange Agent shall
mail to each record holder of Common Stock as of the Effective
Time, a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to Certificates
shall pass, only upon proper delivery of the Certificates to the
Exchange Agent) and instructions for use in effecting the
surrender of Certificates in exchange for the Merger
Consideration. Upon surrender to the Exchange Agent of a
Certificate, together with such letter of transmittal duly
executed, and any other required documents, the holder of such
Certificate shall be entitled to receive in exchange therefor,
certificates representing shares of Cerner Common Stock as set
forth in this Article II and the cash portion of the Merger
Consideration, and such Certificate shall forthwith be canceled.
No holder of a Certificate or Certificates shall be entitled to
receive any dividend or other distribution from Cerner until the
surrender of such holder's Certificate for a certificate or
certificates representing shares of Cerner Common Stock. Upon
such surrender, there shall be paid to the holder the amount of
any dividends or other distributions (without interest) that
theretofore became payable with record dates after the Effective
Time, but that were not paid by reason of the foregoing, with
respect to the number of whole shares of Cerner Common Stock
represented by the certificates issued upon surrender, which
amount shall be delivered to the Exchange Agent by Cerner from
time to time as such dividends or other distributions are
declared. If delivery of certificates representing shares of
Cerner Common Stock is to be made to a person other than the
person in whose name the Certificate surrendered is registered or
if any certificate for shares of Cerner Common Stock as the case
may be, is to be issued in a name other than that in which the
Certificate
6
surrendered therefor is registered, it shall be a condition of such
delivery or issuance that the Certificate so surrendered shall be
properly endorsed or otherwise in proper form for transfer and that
the person requesting such delivery or issuance shall pay any transfer
or other Taxes required by reason of such delivery or issuance to a
person other than the registered holder of the Certificate surrendered
or establish to the satisfaction of Cerner that such Tax has been paid
or is not applicable. Until surrendered in accordance with the provisions
of this Section 2.3, each Certificate shall represent for all
purposes only the right to receive shares of Cerner Common Stock
(and cash in lieu of fractional shares) and the cash portion of
the Merger Consideration as provided in this Article II without
any interest thereon.
(c) After the Effective Time, there shall be no transfers on the
stock transfer books of the Surviving Corporation of the shares
of Common Stock that were outstanding prior to the Effective
Time. If, after the Effective Time, Certificates are presented
to the Surviving Corporation for transfer, they shall be canceled
and exchanged for shares of Cerner Common Stock (and cash in lieu
of fractional shares) as provided in this Article II, in
accordance with the procedures set forth in this Section 2.3.
(d) Any portion of the Exchange Fund made available to the
Exchange Agent which remains undistributed to the former
shareholders of CITATION for one year after the Effective Time
shall be delivered to the Surviving Corporation, upon demand, and
any shareholders of CITATION who have not theretofore complied
with this Article II shall thereafter look only to the Surviving
Corporation for payment of their claim for Merger Consideration
and any dividends or distributions with respect to Cerner Common
Stock.
(e) None of CITATION, Cerner, or the Surviving Corporation shall
be liable to any holder of shares of Common Stock for the Merger
Consideration (or dividends or distributions with respect
thereto) delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. Any
amounts remaining unclaimed by holders of any such shares two
years after the Effective Time (or such earlier date immediately
prior to such time as such amounts would otherwise escheat to or
become property of any Governmental Entity) shall, to the extent
permitted by applicable law, become the property of the Surviving
Corporation free and clear of any claims or interest of any such
holders or their successors, assigns or personal representatives
previously entitled thereto.
Section 2.4. Affiliates.
---------- Notwithstanding anything to the
contrary herein, to the full extent permitted by law, no
certificates representing shares of Cerner Common Stock or cash
shall be delivered to a Person who may be deemed an "affiliate"
of CITATION in accordance with Section 7.7 hereof, until such
Person has executed and delivered an Affiliate Agreement pursuant
to Section 7.7.
7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CERNER
Except as disclosed in the Cerner Disclosure Schedule
delivered to CITATION separately prior to, or contemporaneously
with, the date hereof (each section or subsection of which
qualifies the correspondingly numbered representation, warranty
or covenant to the extent specified therein), Cerner represents
and warrants to CITATION that:
Section 3.1. Corporate Existence and Power.
----------------------------- Cerner is a
corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, and has all
corporate powers required to carry on its business as now
conducted. Cerner is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where
the character of the property owned or leased by it or the nature
of its activities makes such qualification necessary, except
where the failure to be so qualified, individually or in the
aggregate, would not be reasonably likely to have a Cerner
Material Adverse Effect.
Section 3.2. Corporate Authorization.
----------------------- The execution, delivery
and performance by Cerner of this Agreement and the consummation
by Cerner of the transactions contemplated hereby are within
Cerner's corporate powers and have been duly authorized by all
necessary corporate action. Assuming that this Agreement
constitutes the valid and binding obligation of CITATION, this
Agreement constitutes a valid and binding agreement of Cerner,
enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws, now or hereafter in
effect, relating to or affecting creditors' rights and remedies
generally and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law).
Section 3.3. Governmental Authorization.
-------------------------- The execution,
delivery and performance by Cerner of this Agreement and the
consummation by Cerner of the transactions contemplated hereby
require no action by or in respect of, or filing with, any
Governmental Entity other than (a) the filing of (i) Articles of
Merger in accordance with the Missouri Law, (ii) a Certificate of
Merger in accordance with the Delaware Law, and (iii) appropriate
documents with the relevant authorities of other states or
jurisdictions in which Cerner or any Cerner Subsidiary is
qualified to do business; (b) compliance with any applicable
requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 0000 (xxx "XXX Xxx") by Cerner and CITATION; (c) compliance
with any applicable requirements of the Securities Act and the
Exchange Act; (d) such as may be required under any applicable
state securities or blue sky laws; and (e) such other consents,
approvals, actions, orders, authorizations, registrations,
declarations and filings that, if not obtained or made, would
not, individually or in the aggregate, (x) be reasonably likely
to have a Cerner Material Adverse Effect or (assuming for this
purpose that the Effective Time had occurred) a Surviving
Corporation Material Adverse Effect, or (y) prevent or materially
impair the ability of Cerner to consummate the transactions
contemplated by this Agreement.
Section 3.4. Non-Contravention.
----------------- The execution, delivery and
performance by Cerner of this Agreement and the consummation by
Cerner of the transactions contemplated hereby do not and will
not (a) contravene or conflict with Cerner's Certificate of
Incorporation or
8
Bylaws, (b) assuming compliance with the matters referred to in Section 3.3,
contravene or conflict with or constitute a violation of any provision of any
law, regulation, judgment, injunction, order or decree binding upon or
applicable to Cerner or any Cerner Subsidiary, (c) constitute a default
under or give rise to a right of termination, cancellation or
acceleration of any right or obligation of Cerner or any Cerner
Subsidiary or to a loss of any benefit or status to which Cerner
or any Cerner Subsidiary is entitled under any provision of any
agreement, contract or other instrument binding upon Cerner or
any Cerner Subsidiary or any license, franchise, permit or other
similar authorization held by Cerner or any Cerner Subsidiary, or
(d) result in the creation or imposition of any Lien on any asset
of Cerner or any Cerner Subsidiary other than, in the case of
each of clauses (b), (c) and (d), any such items that would not,
individually or in the aggregate (x) be reasonably likely to have
a Cerner Material Adverse Effect or (y) prevent or materially
impair the ability of Cerner to consummate the transactions
contemplated by this Agreement.
Section 3.5. Cerner SEC Documents.
--------------------
(a) Cerner has filed all reports, filings, registration
statements and other documents required to be filed by it with
the SEC since January 1, 1995. No Cerner Subsidiary is required
to file any form, report, registration statement or prospectus or
other document with the SEC.
(b) As of its filing date, each Cerner SEC Document complied as
to form in all material respects with the applicable requirements
of the Securities Act and/or the Exchange Act, as the case may
be.
(c) No Cerner SEC Document filed pursuant to the Exchange Act
contained, as of its filing date, any untrue statement of a
material fact or omitted to state any material fact necessary in
order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. No
Cerner SEC Document, as amended or supplemented, if applicable,
filed pursuant to the Securities Act contained, as of the date
such document or amendment became effective, any untrue statement
of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein
not misleading.
(d) Cerner and the Cerner Subsidiaries keep proper accounting
records in which all material assets and liabilities, and all
material transactions, of Cerner and the Cerner Subsidiaries are
recorded in conformity with United States generally accepted
accounting principles ("GAAP") applied on a consistent basis. No
part of Cerner's or any Cerner Subsidiary's accounting system or
records, or access thereto, is under the control of a Person who
is not an employee of Cerner or such Subsidiary.
Section 3.6. Information to be Supplied.
--------------------------
(a) The information to be supplied by Cerner expressly for
inclusion or incorporation by reference in the Joint Proxy
Statement/Prospectus will (i) in the case of the Registration
Statement, at the time it becomes effective, not contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein
9
or necessary in order to make the statements therein not misleading and
(ii) in the case of the remainder of the Joint Proxy Statement/
Prospectus, at the time of the mailing thereof, and at the time of the
Special Meeting, not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The
Joint Proxy Statement/Prospectus will comply (with respect to
information relating to Cerner) as to form in all material
respects with the provisions of the Securities Act and the
Exchange Act.
(b) Notwithstanding the foregoing, Cerner makes no
representation or warranty with respect to any statements made or
incorporated by reference in the Joint Proxy Statement/Prospectus
based on and in accordance with information supplied by CITATION.
Section 3.7. Absence of Certain Changes.
-------------------------- Since January 1,
2000, except as otherwise expressly contemplated by this
Agreement, Cerner and the Cerner Subsidiaries have conducted
their business in the ordinary course consistent with past
practice and there has not been (a) any damage, destruction or
other casualty loss (whether or not covered by insurance)
affecting the business or assets of Cerner or any Cerner
Subsidiary that, individually or in the aggregate, has had or
would be reasonably likely to have a Cerner Material Adverse
Effect, (b) any action, event, occurrence, development or state
of circumstances or facts that, individually or in the aggregate,
has had or would be reasonably likely to have a Cerner Material
Adverse Effect or (c) any incurrence, assumption or guarantee by
Cerner of any material indebtedness for borrowed money other than
in the ordinary course and in amounts and on terms consistent
with past practices.
Section 3.8. Litigation.
---------- Section 3.8 of the Cerner Disclosure
Schedule contains a list and description of each action, suit,
investigation, arbitration or proceeding pending against, or to
the Knowledge of Cerner threatened against, Cerner or any Cerner
Subsidiary or any of their respective assets or properties before
any arbitrator or Governmental Entity. None of such actions,
suits, investigations, arbitrations or proceedings, individually
or in the aggregate, is reasonably likely to have, a Cerner
Material Adverse Effect. There are no outstanding judgments,
decrees, injunctions, awards or orders against Cerner that are
reasonably likely to have, individually or in the aggregate, a
Cerner Material Adverse Effect.
Section 3.9. Finders' Fees.
------------- There is no investment banker,
broker, finder or other intermediary that has been retained by,
or is authorized to act on behalf of, Cerner or any Cerner
Subsidiary who might be entitled to any fee or commission from
CITATION or any of its Affiliates upon consummation of the
transactions contemplated by this Agreement.
Section 3.10. Capitalization.
-------------- The authorized capital stock of
Cerner consists of 150,000,000 shares of Cerner Common Stock and
1,000,000 shares of preferred stock. At the close of business on
April 1, 2000, (i) 33,802,391 shares of Cerner Common Stock were
issued and outstanding, (ii) stock options and warrants to
purchase an aggregate 14,031,988 shares of Cerner Common
Stock were issued and outstanding (of which options and warrants
to purchase an aggregate of 5,421,303 shares of Cerner
Common Stock were exercisable), (iii) no shares of Cerner Common
Stock were held in its treasury, except as disclosed in the
Cerner Financial
10
Statements, (iv) no shares of preferred stock of Cerner were issued and
outstanding, and (v) no stock options and warrants to purchase preferred
stock of Cerner were issued and outstanding, other than the rights issued
in connection with the Amended and Restated Rights Agreement, dated March 12,
1999, by and between Cerner and Exchange Agent. All outstanding shares of
capital stock of Cerner have been duly authorized and validly
issued and are fully paid and nonassessable.
Section 3.11. Financial Statements; No Material Undisclosed
---------------------------------------------
Liabilities.
-----------
(a) The audited consolidated balance sheets of Cerner as of
January 3, 1998, January 2, 1999 and January 1, 2000, together
with the related audited consolidated statements of operations,
stockholders' equity and cash flows for the fiscal years then
ended and the notes thereto (the "Cerner Financial Statements")
fairly present in all material respects, in conformity with GAAP
consistently applied (except as may be indicated in the notes
thereto), the financial position of Cerner as of the dates
thereof and its results of operations, stockholders' equity and
consolidated cash flows for the periods then ended.
(b) There are no liabilities of Cerner of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable
or otherwise, in each case, that are required by GAAP to be set
forth on a balance sheet of Cerner, other than:
(i) liabilities or obligations disclosed or provided for in the
Cerner Balance Sheet or disclosed in the notes thereto;
(ii) liabilities or obligations under this Agreement or incurred
in connection with the transactions contemplated hereby; and
(iii) other liabilities or obligations that individually or
in the aggregate, would not be reasonably likely to have a Cerner
Material Adverse Effect.
Section 3.12. Taxes.
-----
(a) All Tax returns, statements, reports and forms
(collectively, the "Cerner Returns") required to be filed with
any taxing authority by, or with respect to, Cerner and the
Cerner Subsidiaries have been filed in substantial compliance
with all applicable laws.
(b) Cerner has timely paid all Taxes shown as due and payable on
the Cerner Returns that have been so filed, and all other Taxes
not subject to reporting obligations, and as of the time of
filing, the Cerner Returns correctly reflected the facts
regarding the income, business, assets, operations, activities
and the status of Cerner and the Cerner Subsidiaries (other than
Taxes that are being contested in good faith and for which
adequate reserves are reflected on the Cerner Balance Sheet).
(c) Cerner has made provision for all Taxes payable by them for
which no Cerner Return has yet been filed.
11
(d) The charges, accruals and reserves for Taxes with respect to
Cerner reflected on the Cerner Balance Sheet are materially
adequate under GAAP to cover the Tax liabilities accruing through
the date thereof.
(e) There is no action, suit, proceeding, audit or claim now
proposed or pending against or with respect to Cerner in respect
of any Tax that is reasonably likely to have a Cerner Material
Adverse Effect.
(f) Cerner has not been a member of an affiliated, consolidated,
combined or unitary group other than one of which Cerner was the
common parent.
(g) Cerner does not hold any asset subject to a consent under
Section 341(f) of the Code.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CITATION
Except as disclosed in the CITATION Disclosure Schedule
delivered to Cerner separately prior to, or contemporaneously
with, the date hereof (each section or subsection of which
qualifies the correspondingly numbered representation, warranty
or covenant to the extent specified therein), CITATION represents
and warrants to Cerner that:
Section 4.1. Corporate Existence and Power.
----------------------------- CITATION is a
corporation duly incorporated, validly existing and in good
standing under the laws of the State of Missouri, and has all
corporate powers required to carry on its business as now
conducted. CITATION is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction
where the character of the property owned or leased by it or the
nature of its activities makes such qualification necessary,
except where the failure to be so qualified, individually or in
the aggregate, would not be reasonably likely to have a CITATION
Material Adverse Effect. CITATION has heretofore made available
to Cerner true and complete copies of CITATION's Articles of
Incorporation and Bylaws as currently in effect.
Section 4.2. Corporate Authorization.
----------------------- The execution, delivery
and performance by CITATION of this Agreement and the
consummation by CITATION of the transactions contemplated hereby
are within CITATION's corporate powers and, except for the
CITATION Shareholder Approval, have been duly authorized by all
necessary corporate action. Assuming that this Agreement
constitutes the valid and binding obligation of Cerner and Merger
Sub, this Agreement constitutes a valid and binding agreement of
CITATION, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws, now or hereafter in
effect, relating to or affecting creditors' rights and remedies
generally and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law).
Section 4.3. Governmental Authorization.
-------------------------- The execution,
delivery and performance by CITATION of this Agreement and the
consummation by CITATION of the transactions contemplated hereby
require no action by or in respect of, or filing with, any
Governmental Entity other than (a) the filing of (i) the Articles
of Merger in accordance with the
12
Missouri Law, (ii) the Certificate of Merger in accordance with the Delaware
Law, and (iii) appropriate documents with the relevant authorities of
other states or jurisdictions in which CITATION or any CITATION
Subsidiary is qualified to do business; (b) compliance with any
applicable requirements of the HSR Act; (c) compliance with any
applicable requirements of the Securities Act and the Exchange
Act; (d) such as may be required under any applicable state
securities or blue sky laws; and (e) such other consents,
approvals, actions, orders, authorizations, registrations,
declarations and filings that, if not obtained or made, would
not, individually or in the aggregate, (x) be reasonably likely
to have a CITATION Material Adverse Effect or (assuming for this
purpose that the Effective Time had occurred) a Surviving
Corporation Material Adverse Effect, or (y) prevent or materially
impair the ability of CITATION to consummate the transactions
contemplated by this Agreement.
Section 4.4. Non-Contravention.
----------------- The execution, delivery and
performance by CITATION of this Agreement and the consummation by
CITATION of the transactions contemplated hereby do not and will
not (a) contravene or conflict with CITATION's Articles of
Incorporation or Bylaws, (b) assuming compliance with the matters
referred to in Section 4.3 and the CITATION Shareholder Approval,
contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, injunction, order or
decree binding upon or applicable to CITATION, (c) constitute a
breach or default under or give rise to a right of termination,
cancellation or acceleration of any right or obligation of
CITATION or any CITATION Subsidiary or to a loss of any benefit
or status to which CITATION is entitled under any provision of
any agreement, contract or other instrument binding upon CITATION
or any CITATION Subsidiary or any license, franchise, permit or
other similar authorization held by CITATION, or (d) result in
the creation or imposition of any Lien on any asset of CITATION
other than, in the case of each of clauses (b), (c) and (d), any
such items that would not, individually or in the aggregate (x)
be reasonably likely to have a CITATION Material Adverse Effect
or (y) prevent or materially impair the ability of CITATION to
consummate the transactions contemplated by this Agreement.
Section 4.5. Capitalization.
--------------
(a) The authorized capital stock of CITATION consists of
10,000,000 shares of Common Stock and 5,000,000 shares of
CITATION Preferred Stock. At the close of business on May 12,
2000, (i) 3,876,655 shares of Common Stock were issued and
outstanding, (ii) stock options ("CITATION Stock Options") and
warrants ("CITATION Warrants") to purchase an aggregate of
471,500 shares of Common Stock were issued and outstanding (of
which options and warrants to purchase an aggregate of 381,898
shares of Common Stock were exercisable), (iii) no shares of
Common Stock were held in its treasury, (iv) no shares of
CITATION Preferred Stock were issued and outstanding, and (v) no
stock options and warrants to purchase CITATION Preferred Stock
were issued and outstanding. All outstanding shares of capital
stock of CITATION have been duly authorized and validly issued
and are fully paid and nonassessable.
(b) As of the date hereof, except (i) as set forth in this
Section 4.5, and (ii) for changes since March 31, 2000, resulting
from the exercise of stock options outstanding on such date,
there are no outstanding (x) shares of capital stock or other
voting securities of CITATION, (y) securities of CITATION
convertible into or exchangeable for shares
13
of capital stock or voting securities of CITATION, or (z) options or
other rights to acquire from CITATION, and no obligation of CITATION to
issue, any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of
CITATION (the items in clauses (x), (y) and (z) being referred to
collectively as the "CITATION Securities"). There are no
outstanding obligations of CITATION or any CITATION Subsidiary to
repurchase, redeem or otherwise acquire any CITATION Securities.
There are no outstanding contractual obligations of CITATION to
provide funds to, or make any investment (in the form of a loan,
capital contribution or otherwise) in, any other Person. There
are no stockholder agreements, voting trusts or other agreements
or understandings to which CITATION is a party, or of which
CITATION is aware, relating to voting, registration or
disposition of any shares of capital stock of CITATION or
granting to any person or group of persons the right to elect, or
to designate or nominate for election, a director to the board of
directors of CITATION.
Section 4.6. Subsidiaries.
------------ Except as set forth on the CITATION
Disclosure Statement, CITATION does not have any subsidiaries and
does not own or control, directly or indirectly, any stock or
equity interest in any corporation or other Person.
Section 4.7. Financial Statements; No Material Undisclosed
---------------------------------------------
Liabilities.
-----------
(a) The audited consolidated balance sheets of CITATION as of
March 31, 1998 and 1999 and the draft audited consolidated
balance sheet as of March 31, 2000, together with the related
audited consolidated statements of operations, shareholders'
equity and cash flows for the fiscal years then ended in the case
of fiscal 1998 and 1999 and the draft audited financial
statements in the case of fiscal 2000, and the notes thereto (the
"CITATION Financial Statements") fairly present in all material
respects, in conformity with GAAP consistently applied (except as
may be indicated in the notes thereto), the financial position of
CITATION as of the dates thereof and its results of operations,
shareholders' equity and consolidated cash flows for the periods
then ended.
(b) There are no liabilities of CITATION of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable
or otherwise, in each case, that are required by GAAP to be set
forth on a balance sheet of CITATION, other than:
(i) liabilities or obligations disclosed or provided for in the
CITATION Balance Sheet or disclosed in the notes thereto;
(ii) liabilities or obligations under this Agreement or incurred
in connection with the transactions contemplated hereby; and
(iii) other liabilities or obligations that individually or
in the aggregate, would not be reasonably likely to have a
CITATION Material Adverse Effect.
Section 4.8. CITATION SEC Documents.
----------------------
(a) CITATION has filed all reports, filings, registration
statements and other documents required to be filed by it with
the SEC since March 31, 1995. No CITATION
14
Subsidiary is required to file any form, report, registration
statement or prospectus or other document with the SEC.
(b) As of its filing date, each CITATION SEC Document complied
as to form in all material respects with the applicable
requirements of the Securities Act and/or the Exchange Act, as
the case may be.
(c) No CITATION SEC Document filed pursuant to the Exchange Act
contained, as of its filing date, any untrue statement of a
material fact or omitted to state any material fact necessary in
order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. No
CITATION SEC Document, as amended or supplemented, if applicable,
filed pursuant to the Securities Act contained, as of the date
such document or amendment became effective, any untrue statement
of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein
not misleading.
(d) CITATION and the CITATION Subsidiaries keep proper
accounting records in which all material assets and liabilities,
and all material transactions, of CITATION and the CITATION
Subsidiaries are recorded in conformity with GAAP applied on a
consistent basis. No part of CITATION's or any CITATION
Subsidiary's accounting system or records, or access thereto, is
under the control of a Person who is not an employee of CITATION
or such Subsidiary.
Section 4.9. Information to be Supplied.
--------------------------
(a) The information to be supplied by CITATION expressly for
inclusion or incorporation by reference in the Joint Proxy
Statement/Prospectus will (i) in the case of the Registration
Statement, at the time it becomes effective, not contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make
the statements therein not misleading and (ii) in the case of the
remainder of the Joint Proxy Statement/Prospectus, at the time of
the mailing thereof, and at the time of the Special Meeting, not
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The
Joint Proxy Statement/Prospectus will comply (with respect to
information relating to CITATION) as to form in all material
respects with the provisions of the Securities Act and the
Exchange Act.
(b) Notwithstanding the foregoing, CITATION makes no
representation or warranty with respect to any statements made or
incorporated by reference in the Joint Proxy Statement/Prospectus
based on and in accordance with information supplied by Cerner.
Section 4.10. Absence of Certain Changes.
-------------------------- Since March 31, 2000,
except as otherwise expressly contemplated by this Agreement,
CITATION has conducted its business in the ordinary course
consistent with past practice and there has not been (a) any
damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or
15
assets of CITATION that, individually or in the aggregate, has had or would
be reasonably likely to have a CITATION Material Adverse Effect,
(b) any action, event, occurrence, development or state of
circumstances or facts that, individually or in the aggregate,
has had or would be reasonably likely to have a CITATION Material
Adverse Effect or (c) any incurrence, assumption or guarantee by
CITATION of any material indebtedness for borrowed money other
than in the ordinary course and in amounts and on terms
consistent with past practices.
Section 4.11. Litigation.
---------- Section 4.11 of the CITATION
Disclosure Schedule contains a list of each action, suit,
investigation, arbitration or proceeding pending against, or to
the Knowledge of CITATION threatened against, CITATION or any of
its respective assets or properties before any arbitrator or
Governmental Entity. None of such actions, suits,
investigations, arbitrations or proceedings, individually or in
the aggregate, is reasonably likely to have a CITATION Material
Adverse Effect. There are no outstanding judgments, decrees,
injunctions, awards or orders against CITATION that are
reasonably likely to have, individually or in the aggregate, a
CITATION Material Adverse Effect.
Section 4.12. Taxes.
-----
(a) All Tax returns, statements, reports and forms
(collectively, the "CITATION Returns") required to be filed with
any taxing authority by, or with respect to, CITATION and the
CITATION Subsidiaries have been filed in substantial compliance
with all applicable laws.
(b) CITATION has timely paid all Taxes shown as due and payable
on the CITATION Returns that have been so filed, and all other
Taxes not subject to reporting obligations, and as of the time of
filing, the CITATION Returns correctly reflected the facts
regarding the income, business, assets, operations, activities
and the status of CITATION and the CITATION Subsidiaries (other
than Taxes that are being contested in good faith and for which
adequate reserves are reflected on the CITATION Balance Sheet).
(c) CITATION has made provision for all Taxes payable by them
for which no CITATION Return has yet been filed.
(d) The charges, accruals and reserves for Taxes with respect to
CITATION reflected on the CITATION Balance Sheet are materially
adequate under GAAP to cover the Tax liabilities accruing through
the date thereof.
(e) There is no action, suit, proceeding, audit or claim now
proposed or pending against or with respect to CITATION in
respect of any Tax that is reasonably likely to have a CITATION
Material Adverse Effect.
(f) CITATION has not been a member of an affiliated,
consolidated, combined or unitary group other than one of which
CITATION was the common parent.
(g) CITATION does not hold any asset subject to a consent under
Section 341(f) of the Code.
16
Section 4.13. Employee Benefits.
-----------------
(a) Section 4.13(a) of the CITATION Disclosure Schedule contains
a correct and complete list identifying each material "employee
benefit plan,", as defined in Section 3(3) of Employee Retirement
Income Security Act of 1974 ("ERISA"), each employment, severance
or similar contract, plan, arrangement or policy and each other
plan or arrangement (written or oral) providing for compensation,
bonuses, profit-sharing, stock option or other stock related
rights or other forms of incentive or deferred compensation,
vacation benefits, insurance coverage (including any self-insured
arrangements), health or medical benefits, disability benefits,
workers' compensation, supplemental unemployment benefits,
severance benefits and post-employment or retirement benefits
(including compensation, pension, health, medical or life
insurance benefits) that is maintained, administered or
contributed to by CITATION or any of its ERISA Affiliates and
covers any employee or former employee of CITATION or any
CITATION Subsidiary. Copies of such plans (and, if applicable,
related trust agreements) and all amendments thereto and written
interpretations thereof have been furnished, or will be made
available upon request, to Cerner together with the most recent
annual report (Form 5500 including, if applicable, Schedule B
thereto), all summary plan descriptions and material employee
communications prepared in connection with any such plan. Such
plans are referred to collectively herein as the "CITATION
Employee Plans." For purposes of this Section 4.13, "ERISA
Affiliate" of any Person means any other Person which, together
with such Person, would be treated as a single employer under
Section 414 of the Code.
(b) No CITATION Employee Plan is now or at any time has been
subject to Part 3, Subtitle B of Title I of ERISA or Title IV of
ERISA. At no time has CITATION or any of its ERISA Affiliates
contributed to, or been required to contribute to, any
"multiemployer plan," as defined in Section 3(37) of ERISA (a
"Multiemployer Plan"), or any other plan subject to Title IV of
ERISA (a "Retirement Plan"), and neither CITATION nor any of its
ERISA Affiliates has, or ever has had, any liability (contingent
or otherwise) relating to the withdrawal or partial withdrawal
from a Multiemployer Plan. To the Knowledge of CITATION, no
condition exists and no event has occurred that would be
reasonably likely to constitute grounds for termination of any
CITATION Employee Plan that is a Retirement Plan or, with respect
to any CITATION Employee Plan that is a Multiemployer Plan,
presents a material risk of a complete or partial withdrawal
under Title IV of ERISA and neither CITATION nor any of its ERISA
Affiliates has incurred any liability under Title IV of ERISA
arising in connection with the termination of, or complete or
partial withdrawal from, any plan covered or previously covered
by Title IV of ERISA that would be reasonably likely to have a
CITATION Material Adverse Effect. To the Knowledge of CITATION,
nothing has been done or omitted to be done and no transaction or
holding of any asset under or in connection with any CITATION
Employee Plan has occurred that will make CITATION or any
CITATION Subsidiary, or any officer or director of CITATION or
any CITATION Subsidiary, subject to any liability under Title I
of ERISA or liable for any tax pursuant to Section 4975 of the
Code (assuming the taxable period of any such transaction expired
as of the date hereof) that would be reasonably likely to have a
CITATION Material Adverse Effect.
17
(c) Each CITATION Employee Plan that is intended to be qualified
under Section 401(a) of the Code now meets, and at all times
since its inception have met, the requirements for such
qualification other than such requirements for which a remedial
amendment period has not expired, and each trust forming a part
thereof is now, and at all times since its inception has been,
exempt from tax pursuant to Section 501(a) of the Code. Each such
plan has received a determination letter from the Internal
Revenue Service to the effect that such plan is qualified and its
related trust is exempt from federal income taxes. CITATION has
furnished, or will make available upon request, to Cerner copies
of the most recent Internal Revenue Service determination letters
with respect to each such CITATION Employee Plan. Each CITATION
Employee Plan has been maintained and administered in substantial
compliance with its terms (except that in any case in which any
CITATION Employee Plan is currently required to comply with a
provision of ERISA or of the Code, but is not yet to be amended
to reflect such provision, such plan has been maintained and
administered in accordance with the provision) and with the
requirements prescribed by any and all statutes, orders, rules
and regulations, including but not limited to ERISA and the Code,
which are applicable to such CITATION Employee Plan. All
material reports, returns and similar documents with respect to
each CITATION Employee Plan required to be filed with any
governmental agency or distributed to any CITATION Employee Plan
participant have been duly timely filed and distributed.
(d) There is no contract, agreement, plan or arrangement that,
as a result of the Merger, would be reasonably likely to obligate
CITATION to make any payment of any amount that would not be
deductible pursuant to the terms of Section 162(m) or Section
280G of the Code.
(e) Except as disclosed in writing to Cerner prior to the date
hereof, there has been no amendment to, written interpretation or
announcement (whether or not written) relating to, or change in
employee participation or coverage under, any CITATION Employee
Plan that would increase materially the expense of maintaining
such CITATION Employee Plan above the level of the expense
incurred in respect thereof for the fiscal year ended March 31,
2000.
(f) No CITATION Employee Plan promises or provides post-
retirement medical, life insurance or other benefits due now or
in the future to current, former or retired employees of CITATION
or any Subsidiary.
Section 4.14. Compliance with Laws; Licenses, Permits and
-------------------------------------------
Registrations.
-------------
(a) CITATION is not in violation of, nor has CITATION violated,
any applicable provisions of any laws, statutes, ordinances,
regulations, judgments, injunctions, orders or consent decrees,
except for any such violations that, individually or in the
aggregate, would not be reasonably likely to have a CITATION
Material Adverse Effect.
(b) CITATION has all permits, licenses, approvals,
authorizations of and registrations with and under all federal,
state, local and foreign laws, and from all
18
Governmental Entities required by CITATION to carry on its business
as currently conducted, except where the failure to have any such permits,
licenses, approvals, authorizations or registrations,
individually or in the aggregate, would not be reasonably likely
to have a CITATION Material Adverse Effect.
Section 4.15. Title to Properties.
-------------------
(a) CITATION has good and marketable title to, or valid
leasehold interests in, all its properties and assets except for
such as are no longer used or useful in the conduct of its
business or as have been disposed of in the ordinary course of
business and except for defects in title, easements, restrictive
covenants and similar Liens, encumbrances or impediments that do
not materially interfere with the ability of CITATION to conduct
its business as currently conducted. All such assets and
properties, other than assets and properties in which CITATION
has leasehold interests, are free and clear of all Liens, except
for Liens that do not and will not materially interfere with the
ability of CITATION to conduct its business as currently
conducted.
(b) CITATION (i) is in substantial compliance with the terms of
all leases to which it is a party and under which it is in
occupancy, and all such leases are in full force and effect and
(ii) enjoys peaceful and undisturbed possession under all such
leases.
Section 4.16. Intellectual Property.
---------------------
(a) CITATION owns or has a valid license to use: (i) all Marks;
(ii) all Patents; (iii) all Copyrights; and (iv) all Trade
Secrets; necessary to (x) carry on the business of CITATION as
currently conducted or as proposed to be conducted by the
Surviving Corporation, to (y) make, have made, use, distribute
and sell all products currently sold by CITATION and all products
in development, in each case, reasonably necessary to conduct
CITATION's business in the manner conducted on the date hereof.
(b) There are no outstanding and, to CITATION's Knowledge, no
threatened disputes or disagreements with respect to any
agreement to which CITATION is a party, relating to any of
CITATION's Marks, Patents, Copyrights, or Trade Secrets
(collectively, "CITATION Intellectual Property").
(c) CITATION is the owner of all right, title, and interest in
and to the CITATION Intellectual Property, free and clear of all
Liens and other adverse claims.
(d) All former and current employees of CITATION have executed
written contracts with CITATION that assign to CITATION all
rights to any inventions, improvements, discoveries, or
information relating to the business of CITATION. To CITATION's
Knowledge, no employee of CITATION has entered into any contract
that restricts or limits in any way the scope or type of work in
which the employee may be engaged or requires the employee to
transfer, assign, or disclose information concerning his work to
anyone other than CITATION.
(e) All of the Patents are currently in compliance with formal
legal requirements (including payment of filing, examination, and
maintenance fees and proofs
19
of working or use), are valid and enforceable, and are not subject to
any maintenance fees or taxes or actions.
(f) CITATION uses reasonable procedures to keep its Trade
Secrets confidential, and CITATION's Trade Secrets have been
disclosed only under written agreements that require the
recipient to hold such Trade Secrets confidential.
(g) No Patent has been or is now involved in any interference,
reissue, reexamination, or opposition proceeding. To CITATION's
Knowledge, there is no potentially interfering patent or patent
application of any third party.
(h) To CITATION's Knowledge, no CITATION Intellectual Property
is infringed or, to CITATION's Knowledge, has been challenged or
threatened in any way. To CITATION's Knowledge, none of the
products manufactured and sold or proposed to be sold, nor any
process or know-how used, by CITATION infringes or is alleged to
infringe any Patent or other proprietary right of any other
Person.
(i) Other than the software licenses set forth in the CITATION
Disclosure Schedules, CITATION is not required to make any
payments to any third parties in connection with third party
technology embedded in the CITATION Intellectual Property.
(j) All products made, used, or sold under the Patents have been
marked with the proper patent notice.
Section 4.17. Environmental Matters.
---------------------
(a) With such exceptions as, individually or in the aggregate,
would not be reasonably likely to have a CITATION Material
Adverse Effect, (i) no written notice, notification, demand,
request for information, citation, summons, complaint or order
has been received by, and no investigation, action, claim, suit,
proceeding or review is pending or to the Knowledge of CITATION,
threatened by any Person against, CITATION with respect to any
applicable Environmental Law and (ii) to the Knowledge of
CITATION, CITATION is and has been in compliance with all
applicable Environmental Laws.
(b) The term "Environmental Laws" means any federal, state,
local and foreign statutes, laws (including, without limitation,
common law), judicial decisions, regulations, ordinances, rules,
judgments, orders, codes, injunctions, permits or governmental
agreements relating to human health and safety, the environment
or to pollutants, contaminants, wastes, or chemicals, hazardous
substances, hazardous materials or hazardous wastes as any of
those terms is regulated or defined by Environmental Laws.
Section 4.18. Finders' Fees; Opinions of Financial Advisor.
--------------------------------------------
(a) Except for A.G. Xxxxxx & Sons, Inc. and AristaQuest, Inc.,
there is no investment banker, broker, finder or other
intermediary that has been retained by, or is
20
authorized to act on behalf of, CITATION or who might be entitled to any
fee or commission from CITATION or Cerner or any of its Affiliates upon
consummation of the transactions contemplated by this Agreement.
(b) CITATION has received the oral opinion of X.X. Xxxxxxx &
Sons, Inc., dated as of the date hereof, to the effect that, as
of such date, the Merger Consideration is fair, from a financial
point of view, to the holders of shares of Common Stock (other
than Cerner and any Cerner Subsidiary).
Section 4.19. Required Vote and Waiver; Board Approval.
----------------------------------------
(a) The only vote or waiver of rights of the holders of any
class or series of capital stock of CITATION required by law,
rule or regulation to approve and adopt this Agreement and/or any
of the other transactions contemplated hereby, including the
Merger, is the affirmative vote of the holders of more than two-
thirds of the outstanding shares of Common Stock in favor of the
approval and adoption of this Agreement and approval of the
CITATION Merger and the transactions contemplated hereby.
(b) CITATION's Board of Directors has unanimously (i) determined
and declared that this Agreement and the transactions
contemplated hereby, including the Merger, are advisable and in
the best interests of CITATION and its shareholders, (ii)
approved and adopted this Agreement, the Merger and the other
transactions contemplated hereby and (iii) resolved to recommend
to such shareholders that they vote in favor of adopting and
approving this Agreement and the Merger in accordance with the
terms hereof at a special meeting of the shareholders of CITATION
duly held for such purpose (the "CITATION Shareholders Meeting").
Section 4.20. State Takeover Statutes.
----------------------- CITATION has taken all
actions required to be taken by it in order to exempt this
Agreement, the Shareholder Agreement and the transactions
contemplated by each of them, including the exercise of the
options granted in the Shareholder Agreement, from the provisions
of Section 351.459 of the Missouri Law, and accordingly, such
Sections do not apply to the Merger or any of such transactions.
No other "control share acquisition," "business combination,"
"fair price" or other anti-takeover laws or regulations enacted
under state or federal laws in the United States apply to this
Agreement, the Merger or any of the transactions contemplated
hereby.
Section 4.21. Tax Treatment.
------------- Neither CITATION nor any of its
Affiliates has taken or agreed to take, or will take, any action
or is aware of any fact or circumstance that would prevent or
impede the Merger from qualifying as a 368 Reorganization.
Section 4.22. Certain Agreements.
------------------ Neither CITATION nor any of
its Affiliates (i) are parties to or otherwise bound by any
agreement or arrangement that limits or otherwise restricts
CITATION, the Surviving Corporation or any of their respective
Affiliates from engaging or competing in any line of business or
in any locations, which agreement or arrangement is material to
the business of CITATION or would be material to the business of
the Surviving Corporation (assuming the Merger has taken place),
in either case taken as a whole and (ii) except in the ordinary
course of business, have amended, modified or terminated any
21
material contract, agreement or arrangement of CITATION or any
CITATION Subsidiary or otherwise waived, released or assigned any
material rights, claims or benefits of CITATION or any CITATION
Subsidiary thereunder.
Section 4.23. Employment Agreements.
--------------------- There exists (i) no union,
guild or collective bargaining agreement to which CITATION is a
party, (ii) no employment, consulting or severance agreement
between CITATION and any Person (except for consulting agreements
that individually, and in the aggregate, are not material to
CITATION), and (iii) no employment, consulting, severance or
indemnification agreement or other agreement or plan to which
CITATION is a party that would be altered or result in any bonus,
golden parachute, severance or other payment or obligation to any
Person, or result in any acceleration of the time of payment or
in the provision or vesting of any benefits, as a result of the
execution or performance of this Agreement or as a result of the
Merger or the other transactions contemplated hereby.
Section 4.24. Transactions With Directors, Officers and
-----------------------------------------
Affiliates.
----------
Except for any of the following matters which would
not be required to be disclosed pursuant to Item 404 of
Regulation S-K of the Commission (assuming CITATION were subject
to such Item), since March 31, 1999, there have been no
transactions between CITATION or any of its Subsidiaries and any
director, officer, employee, shareholder or "Affiliate" (as
identified pursuant to Section 7.7 hereof) of CITATION,
including, without limitation, loans, guarantees or pledges to,
by or for CITATION, from, to, by or for any of such Persons.
Except for any of the following matters which would not be
required to be disclosed pursuant to Item 404 of Regulation S-K
of the Commission (assuming that CITATION was subject to such
Item), since March 31, 1999, none of the officers or directors of
CITATION, and no spouse or relative of any of such Persons, has
been a director or officer of, or has had any material direct or
indirect interest in, any Person which during such period has
been a supplier, customer or sales agent of CITATION or has
competed with or been engaged in any business of the kind being
conducted by CITATION. Since March 31, 1999, none of the
compensation that would be required to be disclosed pursuant to
Item 402 of Regulation S-K of the Commission (assuming CITATION
were subject to such Item) to all directors, officers, employees,
shareholders or "Affiliates" of CITATION has been increased in a
manner that is inconsistent with the past practices of CITATION.
Section 4.25. Material Contracts.
------------------ Schedule 4.25 of the
CITATION Disclosure Schedule lists all material contracts and
agreements to which, as of the date hereof, CITATION is a party
or by which is bound or under which CITATION has or may acquire
any rights, which involve or relate to (i) obligations of CITATION
for borrowed money or other indebtedness where the amount of such
obligations exceeds $75,000 individually, (ii) the lease by
CITATION, as lessee or lessor, of real property for rent of more
than $75,000 per annum, (iii) the purchase or sale of goods
(other than raw material to be purchased by CITATION on terms
that are customary and consistent with the past practice of
CITATION and in amounts and at prices substantially consistent
with past practices of CITATION) or services with an aggregate
minimum purchase price of more than $75,000 per annum, (iv)
rights to manufacture and/or distribute any product which
accounted for more than $75,000 of the consolidated revenues of
CITATION during the fiscal year ended March 31, 2000 or under
which CITATION received or paid license or other fees in excess
of $75,000 during any year, (v) the purchase or sale of assets or
properties not in the ordinary course of business having a
purchase price in excess of $75,000, (vi) the right (whether or
not currently exercisable) to use, license (including any "in-
license" or
22
"outlicense"), sublicense or otherwise exploit any
intellectual property right or other proprietary asset of
CITATION or any other Person which; (vii) any collaboration or
joint venture or similar arrangement; (viii) the restriction on
the right or ability of CITATION (A) to compete with any other
Person, (B) to acquire any product or other asset or any services
from any other Person, (C) to solicit, hire or retain any Person
as an employee, consultant or independent contractor, (D) to
develop, sell, supply, distribute, offer, support or service any
product or any technology or other asset to or for any other
Person, (E) to perform services for any other Person, or (F) to
transact business or deal in any other manner with any other
Person; (ix) any currency hedging; (x) individual capital
expenditures or commitments in excess of $75,000; or (xi) powers
of attorney. All such contracts and agreements are duly and
validly executed by CITATION and are in full force and effect in
all material respects. CITATION has not materially violated or
breached, or committed any material default under, any contract
or agreement, and, to the Knowledge of CITATION, no other Person
has materially violated or breached, or committed any material
default under, any contract or agreement. No event has occurred
which, after notice or the passage of time or both, would
constitute a default by CITATION under any contract or agreement
or give any Person the right to (A) declare a default or exercise
any remedy under any contract or agreement, (B) receive or
require a rebate, chargeback, penalty or change in delivery
schedule under any contract or agreement, (C) accelerate the
maturity or performance of any contract or agreement, or (D)
cancel, terminate or modify any contract or agreement, in each
case which, together with all other events of the types referred
to in clauses (A), (B), (C) and (D) of this sentence has had or
may reasonably be expected to have a CITATION Material Adverse
Effect. All such contracts and agreements will continue, after
the Effective Time, to be binding in all material respects in
accordance with their respective terms until their respective
expiration dates.
Section 4.26. Certain Business Practices.
-------------------------- Neither CITATION
norto the Knowledge of CITATION any director, officer, agent or
employee of CITATION has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
relating to political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to
foreign or domestic political parties or campaigns or violated
any provision of the Foreign Corrupt Practices Act of 1977, as
amended, (assuming for purposes of this Section 4.26 that
CITATION is subject to Section 30A of the Exchange Act) or (iii)
made any other unlawful payment.
Section 4.27. Insurance.
--------- CITATION has made available to
Cerner a summary of all material insurance policies and all
material self-insurance programs and arrangements relating to the
business, assets and operations of CITATION . Each of such
insurance policies is in full force and effect. Since January 1,
1995, CITATION has not received any notice or other communication
regarding any actual or possible (i) cancellation or invalidation
of any material insurance policy, (ii) refusal of any coverage or
rejection of any material claim under any insurance policy, or
(iii) material adjustment in the amount of the premiums payable
with respect to any insurance policy. There is no pending
workers' compensation or other claim under or based upon any
insurance policy of CITATION other than claims incurred in the
ordinary course of business.
23
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MERGER SUB
Merger Sub represents and warrants to CITATION as follows:
Section 5.1. Organization.
------------ Merger Sub is a corporation duly
incorporated, validly existing and in good standing under the
laws of Delaware. Merger Sub is a direct wholly-owned subsidiary
of Cerner.
Section 5.2. Corporate Authorization.
----------------------- Merger Sub has all
requisite corporate power and authority to enter into this
agreement and to consummate the transactions contemplated by this
Agreement. The execution, delivery and performance by Merger Sub
of this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of Merger Sub. This
Agreement has been duly executed and delivered by Merger Sub and
assuming this Agreement constitutes a valid and binding agreement
of CITATION, constitutes a valid and binding agreement of Merger
Sub, enforceable against it in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors generally or by general equity principles.
Section 5.3. Non-Contravention.
----------------- The execution, delivery and
performance by Merger Sub of this Agreement and the consummation
by Merger Sub of the transactions contemplated by this Agreement
do not and will not contravene or conflict with its certificate
of incorporation or bylaws.
Section 5.4. No Business Activities.
---------------------- Merger Sub has not
conducted any activities other than in connection with the
organization of Merger Sub, the negotiation and execution of this
Agreement and the consummation of the transactions contemplated
by this Agreement. Merger Sub has no subsidiaries.
Section 5.5. Taxes.
----- Merger Sub has not taken or agreed to
take, will not take, and is not aware of any fact or circumstance
that would prevent or impede the Merger from qualifying as a 368
Reorganization.
ARTICLE VI
COVENANTS OF CITATION
CITATION agrees that:
Section 6.1. CITATION Interim Operations.
--------------------------- Except as set forth
in the CITATION Disclosure Schedule or as otherwise expressly
contemplated or permitted hereby, or as required by any
Governmental Entity of competent jurisdiction, without the prior
consent of Cerner, from the date hereof until the Effective Time,
CITATION shall conduct its business in all material respects in
the ordinary course consistent with past practice and shall use
commercially reasonable efforts to (i) preserve intact its
present business organization, (ii) maintain in effect all
material foreign, federal, state and local licenses, approvals
and
24
authorizations, including, without limitation, all material
licenses and permits that are required for CITATION to carry on
its business and (iii) preserve existing relationships with its
material customers, lenders, suppliers and others having material
business relationships with it. Without limiting the generality
of the foregoing, except as otherwise expressly contemplated or
permitted by this Agreement, or as required by a Governmental
Entity of competent jurisdiction, from the date hereof until the
Effective Time, without the prior consent of Cerner, CITATION
shall not:
(a) amend its Articles of Incorporation or By-laws;
(b) split, combine or reclassify any shares of capital stock of
CITATION or declare, set aside or pay any dividend;
(c) (i) issue, deliver or sell, or authorize the issuance,
delivery or sale of, any shares of its capital stock of any class
or any securities convertible into or exercisable for, or any
rights, warrants or options to acquire, any such capital stock or
any such convertible securities, other than (A) a number of
shares of capital stock equal to that number of shares underlying
options forfeited prior to the Closing by former CITATION
employees, pursuant to the CITATION Employee Plans, or (B) Common
Stock upon the exercise of stock options or warrants in
accordance with their present terms or upon exercise of options
issued pursuant to clause (A) of this Section 6.1(c)(i); or (ii)
amend in any respect any term of any outstanding security of
CITATION;
(d) other than in connection with transactions not prohibited by
Section 6.1(e), incur any capital expenditures or any obligations
or liabilities in respect thereof, except for those (i)
contemplated by the capital expenditure budgets for CITATION made
available to Cerner, or (ii) incurred in the ordinary course of
business of CITATION and consistent with past practice;
(e) except in the ordinary course of business, acquire (whether
pursuant to cash merger, stock or asset purchase or otherwise) in
one transaction or series of related transactions (i) any assets
(including any equity interests) having a fair market value in
excess of $75,000, or (ii) all or substantially all of the equity
interests of any Person or any business or division of any Person
having a fair market value in excess of $75,000, but in no event
shall the expenditures, commitments, obligations or liabilities
made, incurred or assumed, as the case may be, by CITATION
pursuant to Sections 6.1(d) and 6.1(e) exceed $250,000 in the
aggregate;
(f) sell, lease, license, perform services, encumber or
otherwise dispose of any assets, other than (i) sales or licenses
of finished goods or the performance of services in the ordinary
course of business consistent with past practice, (ii) equipment
and property no longer used in the operation of CITATION's
business and (iii) assets related to discontinued operations of
CITATION or any CITATION Subsidiary;
(g) (i) incur any indebtedness for borrowed money or guarantee
any such indebtedness, (ii) issue or sell any debt securities or
warrants or rights to acquire any debt securities of CITATION,
(iii) make any loans, advances or capital contributions to or
investments in, any other Person, or (iv) guarantee any debt
securities or indebtedness of
25
others in any case in an amount in excess of $50,000, except, in each
case, in the ordinary course of business consistent with past practice
(which exception shall include, without limitation, borrowings under
CITATION's existing credit agreements and overnight borrowings);
(h) (i) enter into any agreement or arrangement that limits or
otherwise restricts CITATION or any of its Affiliates or any
successor thereto or that would, after the Effective Time, limit
or restrict CITATION or the Surviving Corporation, or any of
their respective Affiliates, from engaging or competing in any
line of business or in any location, or (ii) enter into, amend,
modify or terminate any material contract, agreement or
arrangement of CITATION or otherwise waive, release or assign any
material rights, claims or benefits of CITATION thereunder;
provided, however, that this Section 6.1(h) shall not prevent
CITATION from entering into material contracts with customers,
suppliers or distributors, so long as such contracts are entered
into in the ordinary course and consistent with CITATION's prior
practice;
(i) (i) except as required by law or a written agreement
existing on or prior to the date hereof, or as consistent with
past practice and routine raises on anniversary dates, increase
the amount of compensation of any director or executive officer
or make any increase in or commitment to increase any employee
benefits, (ii) except as required by law, a written agreement
existing on or prior to the date hereof, or a CITATION severance
policy existing as of the date hereof, grant any severance or
termination pay to any director, officer or employee of CITATION
or, (iii) adopt any additional employee benefit plan or, except
in the ordinary course of business consistent with past practice
and containing only normal and customary terms, or make any
contribution to any existing such plan or (iv) except as may be
required by law or a written agreement or employee benefit plan
existing on or prior to the date hereof, or as contemplated by
this Agreement, enter into, amend in any respect, or accelerate
the vesting under any CITATION Employee Plan, employment
agreement, option, license agreement or retirement agreements, or
(v) hire any employee with an annual base salary in excess of
$75,000;
(j) change (x) CITATION's methods of accounting in effect at
March 31, 2000 except as required by changes in GAAP, as
concurred with by its independent public accountants, or (y)
CITATION's fiscal year;
(k) (i) settle, propose to settle or commence, any litigation,
investigation, arbitration, proceeding or other claim that is
material to the business of CITATION, other than the payment,
discharge or satisfaction, in the ordinary course of business
consistent with past practice of liabilities (x) recognized or
disclosed in the CITATION Financial Statements (or the notes
thereto) or (y) incurred since the date of such Financial
Statements in the ordinary course of business consistent with
past practice, or (ii) make any material Tax election or enter
into any settlement or compromise of any Tax liability other than
in the ordinary course of business consistent with past practices
and containing only normal and customary terms;
(l) enter into any new material line of business;
26
(m) except to the extent required to comply with its obligations
hereunder or required by law, CITATION shall not amend or propose
to so amend its Articles of Incorporation, Bylaws or other
governing documents; or
(n) agree, resolve or commit to do any of the foregoing.
Section 6.2. Acquisition Proposals; Board Recommendation.
-------------------------------------------
(a) CITATION agrees that it shall not, nor shall it authorize or
knowingly permit any officer, director, employee, investment
banker, attorney, accountant, agent or other advisor or
representative of CITATION, directly or indirectly, to (i)
solicit, initiate or knowingly facilitate or encourage the
submission of any Acquisition Proposal for CITATION, (ii)
participate in any discussions or negotiations regarding, or
furnish to any Person any information with respect to, or take
any other action knowingly to facilitate any inquiries or the
making of any proposal that constitutes an Acquisition Proposal
for CITATION, (iii) grant any waiver or release under any
standstill or similar agreement with respect to any class of
CITATION equity securities or (iv) enter into any agreement with
respect to any Acquisition Proposal for CITATION; provided,
however, that if, at any time prior to receipt of the CITATION
Shareholder Approval, CITATION's Board of Directors reasonably
determines in good faith, after receipt of written advice from
outside counsel and independent financial advisor of CITATION,
that failing to take such action could reasonably be expected to
be a breach of its fiduciary duties to CITATION's shareholders
under applicable law, CITATION may, in response to an Acquisition
Proposal for CITATION made after the date of this Agreement which
was not solicited by CITATION or its representatives or agents
and which did not otherwise result from a breach of this Section
6.2, and which is reasonably likely to lead to a Superior
Proposal, and subject to compliance with Section 6.2(c)
(x) furnish information with respect to CITATION to any person
pursuant to a customary confidentiality agreement including
customary standstill provisions (as determined by CITATION after
consultation with its outside counsel) and (y) participate in
negotiations regarding such Acquisition Proposal for CITATION.
(b) Neither the Board of Directors of CITATION nor any committee
thereof shall (i) withdraw, or propose publicly to withdraw, in a
manner adverse to Cerner, the approval or recommendation by such
Board of Directors or such committee of the Merger or this
Agreement, (ii) subject to Section 6.2(d), modify, or propose
publicly to modify, in a manner adverse to Cerner, the approval
or recommendation by such Board of Directors or such committee of
the Merger or this Agreement, (iii) approve or recommend, or
propose publicly to approve or recommend, any Acquisition
Proposal for CITATION or (iv) approve or recommend, or propose to
approve or recommend, or execute or enter into, any letter of
intent, agreement in principle, merger agreement, acquisition
agreement, option agreement or other similar agreement or propose
publicly or agree to do any of the foregoing related to any
Acquisition Proposal for CITATION. Notwithstanding the
foregoing, if at any time prior to receipt of CITATION
Shareholder Approval the Board of Directors of CITATION
determines in good faith, after receipt of written opinions from
outside counsel and independent financial advisor of CITATION,
that it has received an Acquisition Proposal for CITATION that
constitutes a Superior
27
Proposal which did not result from a breach of this Section 6.2 and that
failure to do one of the following could reasonably be expected to be a
breach of its fiduciary duties to CITATION's shareholders under
applicable Law, the Board of Directors of CITATION may (subject to this
and the following sentences), after paying to Cerner the Termination Fee,
(x) withdraw or modify its approval or recommendation of the
Merger and this Agreement, (y) approve or recommend the Superior
Proposal (as defined below), or (z) or terminate this Agreement
(and concurrently with or after such termination, if it so
chooses, cause CITATION to enter into any Acquisition Agreement
with respect to the Superior Proposal), but in each of the cases
set forth in clause (x), (y) or (z), only at a time prior to
receipt of the CITATION Shareholder Approval and only at a time
that is after the tenth business day following Cerner's receipt
of written notice advising Cerner that the Board of Directors of
CITATION has received a Superior Proposal, specifying the
material terms and conditions of such Superior Proposal and
identifying the person making such Superior Proposal. Any such
withdrawal or modification of the recommendation of the Merger
and this Agreement and the transactions contemplated hereby shall
not change the approval of the Board of Directors of CITATION for
purposes of causing Section 351.459 of the Missouri Law to be
inapplicable to the Merger and this Agreement, the transactions
contemplated hereby and Cerner's entering into the Shareholder
Agreement and acquiring shares of Common Stock upon exercise of
the options granted therein. For all purposes of this Agreement,
a "Superior Proposal" means any bona fide proposal made by a
third party to acquire, directly or indirectly, for consideration
consisting of cash and/or securities, 100% of the CITATION
Securities then outstanding (whether pursuant to a tender or
exchange offer, merger, consolidation, share exchange, or other
business combination) or all or substantially all the assets of
CITATION and otherwise on terms which the Board of Directors of
CITATION determines in its good faith judgment (based on a
written opinion of CITATION's financial advisor) to be materially
more favorable to CITATION and its shareholders than the Merger
(taking into account any changes to the financial and other
contractual terms of this Agreement proposed by Cerner in
response to such proposal, the Person making the proposal, any
legal or regulatory considerations and all other relevant
financial and strategic considerations, including the timing of
the consummation of such transactions) and for which financing,
to the extent required, is then committed or which, in the good
faith judgment of the Board of Directors of CITATION, is
reasonably capable of being obtained by such third party.
(c) In addition to the obligations of CITATION set forth in
paragraphs (a) and (b) of this Section 6.2, CITATION shall
immediately advise Cerner orally and in writing of any request
for information or of any Acquisition Proposal for CITATION, the
material terms and conditions of such request or Acquisition
Proposal for CITATION and the identity of the person making such
request or Acquisition Proposal for CITATION. CITATION will keep
Cerner fully informed of the status and details (including
amendments or proposed amendments) of any such request or
Acquisition Proposal for CITATION. If, after CITATION receives a
Superior Proposal, Cerner desires to continue negotiations with
CITATION with respect to the Merger, CITATION agrees to
negotiate in good faith with Cerner.
28
(d) Nothing contained in this Section 6.2 shall prohibit
CITATION from taking and disclosing to its shareholders a
position contemplated by Rule 14d-9 and 14e-2(a) promulgated
under the Exchange Act or from making any disclosure to
CITATION's shareholders if, in the good faith judgment of the
Board of Directors of CITATION, after consultation with outside
counsel, failure so to disclose would be inconsistent with its
fiduciary duties to CITATION's shareholders under applicable Law;
provided, however, neither CITATION nor its Board of Directors
nor any committee thereof shall, except as permitted by Section
6.2(b), withdraw or modify, or propose publicly to withdraw or
modify, its position with respect to the Merger or this Agreement
or approve or recommend, or propose publicly to approve or
recommend, an Acquisition Proposal for CITATION.
Section 6.3. Employment Agreements.
--------------------- CITATION agrees to use its
reasonable best efforts to cause each of the employees of
CITATION identified in Exhibit F hereto to execute and deliver to
Cerner employment agreements in the form attached hereto as
Exhibit G. CITATION agrees that it will not terminate the
employment of J. Xxxxxx Copper, Xxxxxxx X. Xxxxx, or any of the
employees of CITATION identified on Exhibit F hereto, without the
prior written consent of Cerner.
Section 6.4. Shareholder Agreement.
--------------------- CITATION agrees to use its
reasonable best efforts to cause each of the shareholders of
CITATION who is a party to the Shareholders Agreement to comply
with the covenants set forth in Article IV of the Shareholders
Agreement.
ARTICLE VII
COVENANTS OF CITATION AND CERNER
The parties hereto agree that:
Section 7.1. Reasonable Best Efforts.
----------------------- Subject to the terms and
conditions hereof, each party will use reasonable 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 the transactions contemplated
by this Agreement as promptly as practicable.
Section 7.2. Certain Filings; Cooperation in Receipt of
------------------------------------------
Consents; Listing.
-----------------
As promptly as reasonably practicable after
the date hereof, CITATION and Cerner shall prepare and Cerner
shall file with the SEC the Registration Statement, in which the
Joint Proxy Statement/Prospectus will be included as Cerner's
prospectus. Each of CITATION and Cerner shall use all reasonable
efforts to have the Registration Statement declared effective
under the Securities Act as promptly as reasonably practicable
after such filing and to keep the Registration Statement
effective as long as is necessary to consummate the Merger and
the transactions contemplated thereby. CITATION shall mail the
Joint Proxy Statement/Prospectus to its shareholders as promptly
as reasonably practicable after the Registration Statement is
declared effective under the Securities Act and, if necessary,
after the Joint Proxy Statement/Prospectus shall have been so
mailed, promptly circulate amended, supplemental or supplemented
proxy material, and, if required in connection therewith,
resolicit proxies. On or before the
29
effectiveness of the Registration Statement, CITATION shall file
the Joint Proxy/Prospectus with the SEC. Cerner and CITATION
shall take any action (other than qualifying to do business in any
jurisdiction in which it is not now so qualified or to file a
general consent to service of process) required to be taken under
any applicable state securities or blue sky laws in connection
with the issuance of shares of Cerner Common Stock in the Merger.
(a) No amendment or supplement to the Joint Proxy
Statement/Prospectus will be made by CITATION or Cerner without
the approval of the other party, which will not be unreasonably
withheld or delayed. Each party will advise the other party,
promptly after it receives notice thereof, of (i) the time when
the Registration Statement has become effective or any supplement
or amendment has been filed, (ii) the issuance of any stop order,
(iii) the suspension of the qualification of the shares of Cerner
Common Stock issuable in connection with the Merger for offering
or sale in any jurisdiction, or (iv) any request by the SEC for
amendment of the Joint Proxy Statement/Prospectus or comments
thereon and responses thereto or requests by the SEC for
additional information, in each case, whether orally or in
writing. If at any time prior to the Effective Time, CITATION or
Cerner discovers any information relating to either party, or any
of their respective Affiliates, officers or directors, that
should be set forth in an amendment or supplement to the Joint
Proxy Statement/Prospectus, so that such document would not
include any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading,
the party that discovers such information shall promptly notify
the other party hereto and an appropriate amendment or supplement
describing such information shall be promptly filed with respect
thereto, and with respect to the Registration Statement, as the
case may be, with the SEC and, to the extent required by law or
regulation, disseminated to the shareholders of CITATION.
(b) CITATION and Cerner shall cooperate with one another in (i)
determining whether any other action by or in respect of, or
filing with, any Governmental Entity is required, or any actions,
consents, approvals or waivers are required to be obtained from
parties to any material contracts, in connection with the
consummation of the transactions contemplated hereby, (ii)
seeking any such other actions, consents, approvals or waivers or
making any such filings, furnishing information required in
connection therewith and seeking promptly to obtain any such
actions, consents, approvals or waivers, (iii) setting a mutually
acceptable date for the CITATION Shareholders Meeting, and
(iv) taking all lawful action to call, give notice of, convene
and hold the CITATION Shareholders Meeting for the purpose of
obtaining the requisite votes to approve and adopt this
Agreement, the Merger and the other matters contemplated by this
Agreement. The Board of Directors of CITATION shall, subject to
its fiduciary duties under applicable law, declare the
advisability of and recommend adoption and approval of this
Agreement, the Merger and the other matters contemplated by this
Agreement by the shareholders of CITATION, and shall not, subject
to its fiduciary duties under applicable law, withdraw, modify or
materially qualify in any manner adverse to Cerner to such
recommendation or take any action or make any statement in
connection with the CITATION Shareholder Meeting materially
inconsistent with such recommendation (any such withdrawal,
modification, qualification or statement (whether or not
required), an "Adverse Change in the CITATION Recommendation").
30
(c) Each party shall afford the other party reasonable
opportunities to review any communication given by it to, and
consult with each other in advance of any meeting or conference
with, any Governmental Entity or, in connection with any
proceeding by a private party, with any other Person, and to the
extent permitted by the applicable Governmental Entity or other
Person, give the other party the opportunity to attend and
participate in such meetings and conferences, in each case in
connection with the transactions contemplated hereby.
(d) Cerner and CITATION agree to use their respective reasonable
best efforts to cause the shares of Cerner Common Stock to be
issued to CITATION Shareholders upon conversion of shares of
Common Stock in accordance with this Agreement, the Articles of
Merger and the Certificate of Merger to be approved for listing
upon issuance on the Nasdaq National Market.
Section 7.3. Public Announcements.
-------------------- Cerner and CITATION shall
use their reasonable best efforts to develop a joint
communications plan and each party shall use its reasonable best
efforts (i) to ensure that all press releases and other public
statements with respect to the transactions contemplated hereby
shall be consistent with such joint communications plan, and
(ii) unless otherwise required by applicable law or by
obligations pursuant to any rules of the Nasdaq National Market,
to consult with each other before issuing any press release or,
to the extent practical, otherwise making any public statement
with respect to this Agreement or the transactions contemplated
hereby.
Section 7.4. Access to Information; Notification of Certain
----------------------------------------------
Matters.
-------
(a) From the date hereof until the Effective Time and subject to
applicable law, CITATION shall (i) give to Cerner, its counsel,
financial advisors, auditors and other authorized representatives
reasonable access during normal business hours to the offices,
properties, books, records, contracts, commitments, officers and
employees and all other information concerning it and its
business, properties, assets, condition (financial or otherwise)
or prospects of such party, (ii) consistent with its legal
obligations, furnish or make available to Cerner, its counsel,
financial advisors, auditors and other authorized representatives
such financial and operating data and other information as such
Persons may reasonably request and (iii) instruct its employees,
counsel, financial advisors, auditors and other authorized
representatives to cooperate with the reasonable requests of
Cerner in its investigation. Any investigation pursuant to this
Section 7.4 shall be conducted in such manner as not to interfere
unreasonably with the conduct of the business of the other party.
Unless otherwise required by law, each of Cerner and CITATION
will hold, and will cause its respective officers, employees,
counsel, financial advisors, auditors and other authorized
representatives to hold, any nonpublic information obtained in
any such investigation in confidence in accordance with the
Confidentiality Agreement. No information or knowledge obtained
in any investigation pursuant to this Section 7.4 shall affect or
be deemed to modify any representation or warranty made by any
party hereunder.
31
(b) Each party hereto shall give prompt notice to each other
party hereto of:
(i) the receipt by such party or any of such party's
Subsidiaries of any notice or other communication from any Person
alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement;
(ii) the receipt by such party or any of such party's
Subsidiaries of any notice or other communication from any
Governmental Entity in connection with any of the transactions
contemplated by this Agreement;
(iii) such party's obtaining Knowledge of any actions, suits,
claims, investigations or proceedings commenced, threatened
against, relating to or involving or otherwise affecting either
CITATION or Cerner, as the case may be, or any Subsidiary of
either of them which relate to the consummation of the
transactions contemplated by this Agreement; or
(iv) such party's obtaining Knowledge of the occurrence, or
failure to occur, of any event which occurrence or failure to
occur will be likely to cause (A) any representation or warranty
contained in this Agreement to be untrue or inaccurate in any
material respect, or (B) any material failure of any party to
comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided,
however, that no such notification shall limit or otherwise
affect the representations, warranties, obligations or remedies
of the parties to the conditions to the obligations of the
parties hereunder.
Section 7.5. Further Assurances.
------------------ At and after the Effective
Time, the officers and directors of the Surviving Corporation
will be authorized to execute and deliver, in the name and on
behalf of CITATION or Merger Sub, any deeds, bills of sale,
assignments or assurances and to take and do, in the name and on
behalf of CITATION or Merger Sub, any other actions and things to
vest, perfect or confirm of record or otherwise in the Surviving
Corporation any and all right, title and interest in, to and
under any of the rights, properties or assets of CITATION or
Merger Sub acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with the Merger.
Section 7.6. Tax Treatment.
-------------
(a) Prior to the Effective Time, each party shall cooperate with
the other party and shall use its reasonable best efforts to
cause the Merger to qualify as a 368 Reorganization, and will not
take any action reasonably likely to cause the Merger not so to
qualify. The Surviving Corporation shall not take any action
after the Effective Time that would cause the Merger not to
qualify a 368 Reorganization.
(b) Each party shall cooperate with the other party and shall
use its reasonable best efforts to obtain the opinions referred
to in Sections 8.2(b) and 8.3(b) and in connection therewith,
each of Cerner and CITATION shall deliver to such counsel
customary representation letters substantially in the forms
attached hereto as Exhibit C
32
and Exhibit D (the "Cerner Representation Letter" and the "CITATION
Representation Letter", respectively) or otherwise in form and substance
reasonably satisfactory to such counsel.
Section 7.7. Affiliates.
---------- Not less than 45 days prior to the
Effective Time, CITATION shall deliver to Cerner a letter
identifying all persons who, in the reasonable judgment of
CITATION, may be deemed at the time this Agreement is submitted
for adoption by the shareholders of CITATION, "affiliates" of
CITATION for purposes of Rule 145 under the Securities Act and
such list shall be updated as necessary to reflect changes from
the date hereof. CITATION shall use reasonable best efforts to
cause each Person identified on such list to deliver to Cerner
not less than 10 days prior to the Effective Time, a written
agreement substantially in the form attached as Exhibit E hereto
(an "Affiliate Agreement"), which Affiliate Agreements shall
require compliance with Rule 145 under the Securities Act.
Section 7.8. Benefit Matters.
--------------- Cerner and CITATION will work
together to transition CITATION employees to Cerner employee
benefit plans, as appropriate.
Section 7.9. Antitrust Matters.
----------------- The parties hereto promptly
will complete all documents required to be filed with the Federal
Trade Commission and the Department of Justice in order to permit
the Merger and the transactions contemplated by this Agreement
and, together with the Persons who are required to join in such
filings, will file the same with the appropriate Governmental
Entities. The parties hereto promptly will furnish all materials
thereafter required by any of the Governmental Entities having
jurisdiction over such filings and will take all reasonable
actions and file and use all reasonable efforts to have declared
effective or approved all documents and notifications with any
such Governmental Entities, as may be required under the HSR Act
for the consummation of the Merger.
Section 7.10. Exemption From Liability Under Section 16(b).
--------------------------------------------
(a) Provided that CITATION delivers to Cerner the Section 16
Information with respect to CITATION prior to the Effective Time,
the Board of Directors of Cerner, or a committee of Non-Employee
Directors thereof (as such term is defined for purposes of Rule
16b-3(d) under the Exchange Act), shall adopt a resolution in
advance of the Effective Time providing that the receipt by the
CITATION Insiders of Cerner Common Stock in exchange for shares
of Common Stock, and of options to purchase Cerner Common Stock
upon assumption and conversion by the Surviving Corporation of
options to purchase Common Stock, in each case pursuant to the
transactions contemplated hereby and to the extent such
securities are listed in the Section 16 Information, are intended
to be exempt from liability pursuant to Rule 16b-3 under the
Exchange Act.
(b) "Section 16 Information" shall mean information accurate in
all respects regarding the CITATION Insiders, the number of
shares of Common Stock, or other CITATION equity securities,
deemed to be beneficially owned by each such CITATION Insider and
expected to be exchanged for Cerner Common Stock in connection
with the Merger.
33
(c) "CITATION Insiders" shall mean those officers and directors
of CITATION who are subject to the reporting requirements of
Section 16(a) of the Exchange Act who are listed in the Section
16 Information.
Section 7.11. Indemnification and Insurance.
-----------------------------
(a) The Certificate of Incorporation and By-Laws of Merger Sub
shall contain provisions with respect to indemnification and
exculpation similar to those set forth in the Articles of
Incorporation and By-Laws of CITATION, which provisions Cerner
shall not and shall cause Merger Sub not to amend, repeal or
otherwise modify for a period of five (5) years from the
Effective Time in any manner that would materially and adversely
affect the rights thereunder of individuals who at the Effective
Time were directors, officers, employees or agents of CITATION,
unless such amendment, repeal or other modification is required
by applicable law.
(b) From and after the Effective Time, Cerner and Merger Sub
agree that they will indemnify and hold harmless each present
director and officer of CITATION (when acting in such capacity)
determined as of the Effective Time (the "Indemnified Parties"),
against any costs or expenses (including reasonable attorneys'
fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any claim,
action, suit, proceeding or investigation whether civil,
criminal, administrative or investigative, arising out of or
pertaining to matters existing or occurring at or prior to the
Effective Time, whether asserted or claimed prior to, at or after
the Effective Time, to the fullest extent that CITATION would
have been permitted under Missouri Law and its Articles of
Incorporation or By-Laws in effect on the date of this Agreement
to indemnify such person (and Cerner and Merger Sub shall also
advance expenses as incurred to the fullest extent permitted
under applicable Missouri Law and the Articles of Incorporation
and the By-Laws of CITATION, provided that the person to whom
expenses are advanced provides an undertaking to repay such
advances if it is ultimately determined that such person is not
entitled to indemnification).
(c) Any Indemnified Party wishing to claim indemnification under
paragraph (b) of this Section 7.11, upon learning of any such
claim, action, suit, proceeding or investigation, shall promptly
notify Cerner thereof in writing, but the failure to so notify
shall not relieve Cerner of any liability it may have to such
Indemnified Party if such failure does not materially prejudice
Cerner. In the event of any such claim, action, suit, proceeding
or investigation (whether arising before or after the Effective
Time), (i) Cerner or Merger Sub shall have the right to assume
the defense thereof, and Cerner shall not be liable to such
Indemnified Parties for any legal expenses of other counsel or
any other expenses subsequently incurred by such Indemnified
Parties in connection with the defense thereof, except that if
Cerner or Merger Sub elects not to assume such defense, or if
there are any issues which raise material conflicts of interest
between Cerner or Merger Sub and the Indemnified Parties, the
Indemnified Parties may retain counsel reasonably satisfactory to
Cerner, and Cerner or Merger Sub shall pay all reasonable fees
and expenses of such counsel for the Indemnified Parties;
provided, however, that Cerner shall be obligated pursuant to
this paragraph (c) to pay for only one firm or counsel for all
Indemnified Parties and, as applicable, for local counsel, and
provided, however, the
34
costs of more than one firm or counsel shall be paid if the Indemnified
Parties cannot be represented by one firm or counsel because of a
conflict of interest, (ii) the Indemnified Parties will cooperate in the
defense of any such matter, and (iii) Cerner shall not be liable for any
settlement effected without its prior written consent (which consent shall
not be unreasonably withheld or delayed).
(d) For a period of five (5) years after the Effective Time and
to the extent available, Cerner or Merger Sub shall maintain in
effect policies of directors' and officers' liability insurance
covering those persons who are currently covered by CITATION's
directors' and officers' liability insurance policy on terms
(including the amounts of coverage and the amounts of
deductibles, if any) that are no less favorable to them in any
material respect than the terms now applicable to them under
CITATION's current insurance policies; provided that Cerner and
Merger Sub shall not be required to pay an annual premium for
such insurance in excess of 150% of the last annual premium paid
prior to the date hereof, but in such case shall purchase as much
coverage as possible for such amount.
(e) If Cerner or Merger Sub or any of their successors or
assigns (i) shall consolidate with or merge into any other
corporation or entity and shall not be the continuing or
surviving corporation or entity in such consolidation or merger
or (ii) shall transfer all or substantially all of its properties
and assets to any individual, corporation or other entity, then
and in each case, proper provisions shall be made so that the
successors and assigns of Cerner or Merger Sub, as the case may
be, shall assume all of the obligations set forth in this Section
7.11; provided, that the failure to make such provisions shall
not affect the validity of any such consolidation, merger or
transfer.
(f) The provisions of this Section 7.11 are intended to be for
the benefit of, and shall be enforceable by, each of the
Indemnified Parties, their heirs and representatives.
(g) Notwithstanding the foregoing, neither Cerner nor Merger Sub
shall have any obligation to indemnify or exculpate any officer
or director or CITATION from liability to Cerner, Merger Sub or
Cerner's stockholders for any acts related to or arising out of
the Merger, this Agreement or the transactions contemplated
hereby if and to the extent such person's conduct was finally
adjudged to have been knowingly fraudulent, deliberately
dishonest or willful misconduct.
ARTICLE VIII
CONDITIONS TO THE MERGER
Section 8.1. Conditions to the Obligations of Each Party.
------------------------------------------- The
respective obligations of CITATION, Cerner and Merger Sub to
consummate the Merger are subject to the satisfaction or waiver
on or prior to the Closing Date of the following conditions:
(a) Shareholder Approval.
-------------------- The CITATION Shareholder Approval
shall have been obtained;
35
(b) Securities Laws.
--------------- (i) The Registration Statement shall have
become effective in accordance with the provisions of the
Securities Act, no stop order suspending the effectiveness of the
Registration Statement shall have been issued by the SEC and no
proceedings for that purpose shall have been initiated or
threatened by the SEC and not concluded or withdrawn, (ii) all
state securities or blue sky authorizations necessary to carry
out the transactions contemplated hereby shall have been obtained
and be in effect, and (iii) the Nasdaq National Market shall
have approved the listing of the Cerner Common Stock portion of
the Merger Consideration, subject to notice of issuance;
(c) Antitrust.
--------- Any applicable waiting period under the HSR Act
contemplated by Section 7.9 hereof shall have expired or been
earlier terminated;
(d) Other Regulatory Approvals.
-------------------------- Other than the filings provided
for by Article II, all authorizations, consents, orders or
approvals of, or declarations or filings with, or expirations of
waiting periods imposed by, any Governmental Entity the failure
of which to obtain would have a CITATION Material Adverse Effect,
a Cerner Material Adverse Effect or a Surviving Corporation
Material Adverse Effect, shall have been filed, occurred or been
obtained; and
(e) No Injunctions or Restraints; Illegality.
---------------------------------------- No Laws shall
have been adopted or promulgated, and no temporary restraining
order, preliminary or permanent injunction or other order issued
by a court or other Governmental Entity of competent jurisdiction
shall be in effect, (i) having the effect of making the Merger
illegal or otherwise prohibiting, enjoining or restraining
consummation of the Merger or (ii) which otherwise would
reasonably be expected to have a Surviving Corporation Material
Adverse Effect after giving effect to the Merger; provided,
however, that the provisions of this Section 8.1(e) shall not be
available to any party whose failure to fulfill its obligations
pursuant to Sections 7.1 and 7.2 shall have been the cause of, or
shall have resulted in, such order or injunction.
Section 8.2. Conditions to the Obligations of Cerner and Merger
--------------------------------------------------
Sub.
---
The obligations of Cerner and Merger Sub to consummate the
Merger are subject to the satisfaction, or waiver by Cerner and
Merger Sub, on or prior to the Closing Date, of the following
further conditions:
(a) Representations and Covenants.
----------------------------- (i) CITATION shall have
performed in all material respects all of its obligations
hereunder required to be performed by it at or prior to the time
of the filing of the Articles of Merger and the Certificate of
Merger; (ii) the representations and warranties of CITATION in
this Agreement that are qualified as to materiality, CITATION
Material Adverse Effect or Surviving Corporation Material Adverse
Effect shall be accurate, and any such representations and
warranties that are not so qualified shall be accurate, in all
material respects, as of the date of this Agreement and as of the
Effective Time (except for representations and warranties that
address matters only as of a specific date, in which case such
representations and warranties qualified as to materiality,
CITATION Material Adverse Effect or Surviving Corporation
Material Adverse Effect shall be true and correct, and those not
so qualified shall be true
36
and correct in all material respects, on and as of such earlier date);
and (iii) Cerner shall have received a certificate signed by the Chief
Executive Officer or Chief Financial Officer of CITATION to the foregoing
effect;
(b) Tax Opinion.
----------- Cerner shall have received an opinion of
Xxxxxxx, Mag & Fizzell, P.C. in form and substance reasonably
satisfactory to Cerner, on the basis of certain facts,
representations and assumptions set forth in such opinion, dated
as of the date of the filing of the Articles of Merger and the
Certificate of Merger, to the effect that the Merger will qualify
for federal income tax purposes as a 368 Reorganization and that
each of Cerner, CITATION and Merger Sub will be a party to the
reorganization within the meaning of Section 368(b) of the Code.
In rendering such opinion, such counsel shall be entitled to rely
upon representations of officers of Cerner, CITATION and Merger
Sub;
(c) Employment Agreements.
--------------------- J. Xxxxxx Copper and Xxxxxxx X. Xxxxx
shall have executed and delivered to Cerner employment agreements
in a form mutually agreeable to such parties;
(d) Affiliate Agreements.
-------------------- Cerner shall have received from each
Person named in the letter referred to in Section 7.7 an executed
copy of an Affiliate Agreement;
(e) Opinion of Counsel.
------------------ Cerner shall have received an opinion
of Xxxxxxxx Xxxxxx LLP in substantially the form attached hereto
as Exhibit H; and
(f) No Material Adverse Change.
-------------------------- There shall have been no
material adverse change in the financial condition, results of
operations or cash flows or assets, liabilities, business or
prospects of CITATION from March 31, 2000 through the Closing
Date.
Section 8.3. Conditions to the Obligations of CITATION.
----------------------------------------- The
obligations of CITATION to consummate the Merger are subject to
the satisfaction, or waiver by CITATION, on or prior to the
Closing Date, of the following further conditions:
(a) Representations and Covenants.
----------------------------- (i) Cerner shall have
performed in all material respects all of its obligations
hereunder required to be performed by it at or prior to the time
of the filing of the Articles of Merger and the Certificate of
Merger; (ii) the representations and warranties of Cerner and
Merger Sub in this Agreement that are qualified as to
materiality, Cerner Material Adverse Effect or Surviving
Corporation Material Adverse Effect shall be accurate, and any
such representations and warranties that are not so qualified
shall be accurate, in all material respects, as of the date of
this Agreement and as of the Effective Time (except for
representations and warranties which address matters only as of a
specific date, in which case such representations and warranties
qualified as to materiality, Cerner Material Adverse Effect or
Surviving Corporation Material Adverse Effect shall be true and
correct, and those not so qualified shall be true and correct in
all material respects, on and as of such earlier date); and
(iii) CITATION shall have received a certificate signed by the
Chief Executive Officer or Chief Financial Officer of Cerner and
Merger Sub to the foregoing effect;
37
(b) Tax Opinion.
----------- CITATION shall have received an opinion of
Xxxxxxxx Xxxxxx LLP in form and substance reasonably satisfactory
to CITATION, on the basis of certain facts, representations and
assumptions set forth in such opinion, dated as of the date of
the filing of the Articles of Merger and the Certificate of
Merger, to the effect that the Merger will qualify for federal
income tax purposes as a 368 Reorganization and that each of
Cerner, Merger Sub and CITATION will be a party to the
reorganization within the meaning of Section 368(b) of the Code.
In rendering such opinion, such counsel shall be entitled to rely
upon representations of officers of Cerner, Merger Sub and
CITATION;
(c) Employment Agreements.
--------------------- Cerner shall have executed and
delivered employment agreements to J. Xxxxxx Copper and Xxxxxxx
X. Xxxxx, in a form mutually agreeable to such parties;
(d) Opinion of Counsel.
------------------ CITATION shall have received an opinion
of Xxxxxxx, Mag & Fizzell and/or the General Counsel of Cerner,
in substantially the form attached hereto as Exhibit I; and
(e) No Material Adverse Change.
-------------------------- There shall have been no
material adverse change in the financial condition, results of
operations or cash flows or assets, liabilities, business or
prospects of Cerner from the date of the Cerner Balance Sheet
through the Closing Date.
ARTICLE IX
TERMINATION
Section 9.1. Termination.
----------- This Agreement may be terminated at
any time prior to the Effective Time by written notice by the
terminating party to the other party (except if such termination
is pursuant to Section 9.1(a)), notwithstanding approval thereof
by the shareholders of CITATION:
(a) by mutual written agreement of Cerner and CITATION;
(b) by either CITATION or Cerner, if
(i) the Merger shall not have been consummated by December 30,
2000 (the "Expiration Date") unless the holders of Common Stock
do not approve this Agreement by the Expiration Date, in which
case this Agreement is terminable under Section 9.1(b)(iii);
provided, however, that the right to terminate this Agreement
under this Section 9.1(b)(i) shall not be available to any party
whose breach of any provision of this Agreement has resulted in
the failure of the Merger to occur on or before the Expiration
Date;
(ii) there shall be any Law that makes consummation of the Merger
illegal or otherwise prohibited or any judgment, injunction,
order or decree of any Governmental Entity having competent
jurisdiction enjoining Cerner, CITATION or the Merger Sub from
consummating the Merger is entered and such judgment,
38
injunction,judgment or order shall have become final and
nonappealable and, prior to such termination, the parties shall
have used reasonable best efforts to resist, resolve or lift, as
applicable, such law, regulation, judgment, injunction, order or
decree; or
(iii) the holders of Common Stock do not approve this
Agreement on or before the Expiration Date.
(c) by Cerner, (i) if there shall have occurred an Adverse
Change in the CITATION Recommendation (or the Board of Directors
of CITATION have resolved to take such action); (ii) if there
shall have occurred a willful and material breach of Section 6.2
by CITATION or any of its officers, directors, employees,
advisors or agents; (iii) if a breach of any representation,
warranty, covenant or agreement on the part of CITATION set forth
in this Agreement shall have occurred that would cause the
condition set forth in Section 8.2(a) not to be satisfied, and
such condition shall be incapable of being satisfied by the
Expiration Date; (iv) CITATION shall have failed to include in
the Joint Proxy Statement/Prospectus the recommendation of the
Board of Directors of CITATION in favor of the adoption and
approval of this Agreement and the approval of the Merger;
(v) the Board of Directors of CITATION shall have approved,
endorsed or recommended any Acquisition Proposal of CITATION;
(vi) a tender or exchange offer relating to securities of
CITATION shall have been commenced and CITATION shall not have
sent to its security holders, within ten business days after the
commencement of such tender or exchange offer, a statement
disclosing that CITATION recommends rejection of such tender or
exchange offer; or (vii) CITATION or CITATION's Board of
Directors or any committee thereof shall have resolved to do or
permit any of the foregoing;
(d) by CITATION, if a breach of any representation, warranty,
covenant or agreement on the part of Cerner set forth in this
Agreement shall have occurred that would cause the condition set
forth in Section 8.3(a) not to be satisfied, and such condition
is incapable of being satisfied by the Expiration Date;
(e) by CITATION, pursuant to the provisions of Section 6.2(b);
or
(f) automatically if the transactions contemplated herein are
enjoined by a court of competent jurisdiction for a period
extending beyond 90 days.
Section 9.2. Effect of Termination.
--------------------- If this Agreement is
terminated pursuant to Section 9.1, this Agreement shall
forthwith become void and there shall be no liability or
obligation on the part of Cerner or CITATION or their respective
officers or directors except with respect to the provisions of
Sections 9.2, 10.1, 10.4, 10.5, and 10.10 of this Agreement which
provisions shall remain in full force and effect and survive any
termination of this Agreement, and except that, notwithstanding
anything to the contrary contained in this Agreement, neither
Cerner nor CITATION shall be relieved or released from any
liabilities or damages arising out of its willful material breach
of this Agreement. The Confidentiality Agreement shall survive
termination of this Agreement.
39
Section 9.3. Termination Fees; Other Fees.
----------------------------
(a) CITATION agrees to pay to Cerner upon demand a termination
fee of Six Hundred Thousand Dollars ($600,000) (the "Termination
Fee") (i) if this Agreement is terminated pursuant to Section
9.1(b)(iii) and the closing sale price per share of Cerner Common
Stock, as reported by Nasdaq, is greater than $24.00 on at least
10 of the last 20 trading days immediately preceding the date for
the CITATION Shareholder Meeting as set forth in the definitive
Joint Proxy Statement/Prospectus, or (ii) pursuant to Section
6.2(b). In the event of a termination of this Agreement pursuant
to Section 6.2(b) or 9.1(b)(iii) of this Agreement, the payments
provided under this Section 9.3(a) shall be the sole and
exclusive remedy available to Cerner.
(b) Except as set forth in this Section 9.3, all
Expenses incurred in connection herewith and the
transactions contemplated hereby shall be paid by the party
incurring such Expenses, whether or not the Merger is
consummated. All CITATION Expenses will be recorded prior
to the Closing Date. As used in this Agreement, "Expenses"
includes all out-of-pocket expenses (including, without
limitation, all fees and expenses of counsel, accountants,
investment bankers, experts and consultants to a party
hereto and its affiliates) incurred by a party or on its
behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this
Agreement and the transactions contemplated hereby,
including the preparation, printing, filing and mailing of
the Joint Proxy Statement/Prospectus and the solicitation of
shareholder approval.
ARTICLE X
MISCELLANEOUS
-------------
Section 10.1. Notices.
------- All notices and other communications
hereunder shall be in writing and shall be deemed duly given
(a) on the date of delivery if delivered personally, or by
telecopy or telefacsimile, upon confirmation of receipt, in each
case, if on a Business Day, and otherwise on the next Business
Day, (b) on the first service, (c) on the fifth Business Day
following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid, or (d)
the second Business Day if delivered by nationally recognized
overnight courier. All notices hereunder shall be delivered as
set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
if to the Surviving Corporation, to the address set
forth below for Cerner and CITATION, including copies;
if to Cerner and/or Merger Sub, to:
Cerner Corporation
0000 Xxxxxxxxx Xxxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: President
40
with copies to:
Cerner Corporation
0000 Xxxxxxxxx Xxxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: General Counsel
Xxxxxxx, Mag & Fizzell, P.C.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
if to CITATION to:
CITATION Computer Systems, Inc.
000 Xxxxx Xxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: President
with a copy to:
Xxxxxxxx Xxxxxx LLP
Xxx Xxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Section 10.2. Amendments; No Waivers.
----------------------
(a) Any provision of this Agreement may be amended or waived
prior to the Effective Time if, and only if, such amendment or
waiver is in writing and signed, in the case of an amendment, by
Cerner and CITATION or in the case of a waiver, by the party
against whom the waiver is to be effective; provided that after
the CITATION Shareholder Approval, no such amendment or waiver
shall, without the further approval of such shareholders, be made
that would require such approval under any applicable law, rule
or regulation.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 10.3. Assignment.
---------- Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by
any of the parties hereto, in whole or in part (whether by
operation of law or otherwise), without the prior written consent
of the other party, and any attempt to make any such assignment
without such consent shall be null and void.
41
Subject to the preceding sentence, this Agreement will be binding upon, inure
to the benefit of and be enforceable by the parties and their respective
successors and assigns.
Section 10.4. Governing Law.
------------- This Agreement shall be construed
in accordance with and governed by the internal laws of the State
of Delaware without regard to any principles of Delaware
conflicts or choice of law.
Section 10.5. Counterparts; Effectiveness.
--------------------------- This Agreement may
be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the
parties and delivered to the other party, it being understood
that both parties need not sign the same counterpart. This
Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other
parties hereto.
Section 10.6. No Third Party Beneficiaries.
---------------------------- This Agreement
shall be binding upon and inure solely to the benefit of each
party hereto, and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other Person any right,
benefit or remedy of any nature whatsoever under or by reason of
this Agreement.
Section 10.7. Interpretation.
-------------- When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference
shall be to a Section of or Exhibit or Schedule to this Agreement
unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation."
Section 10.8. Enforcement.
----------- The parties agree that irreparable
damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their
specific terms. It is accordingly agreed that the parties shall
be entitled to specific performance of the terms hereof, this
being in addition to any other remedy to which they are entitled
at law or in equity.
Section 10.9. Entire Agreement.
---------------- This Agreement (together with
the exhibits and schedules hereto) constitutes the entire
agreement between the parties with respect to the subject matter
hereof and supersedes all prior agreements and understandings,
both oral and written, between the parties with respect to the
subject matter hereof.
Section 10.10. Severability.
------------ If any term, provision, covenant or
restriction set forth in this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions set forth in this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated so long as the economic or legal substance of the
transactions contemplated hereby is not deemed by a party (acting
reasonably and in good faith) to be materially adverse to that
party. Upon such a determination, the parties shall negotiate in
good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in order that the
transactions contemplated hereby may be consummated as originally
contemplated to the fullest extent possible.
42
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
CERNER CORPORATION
By:_/s/Xxxx X. Naughton________________
Xxxx X. Xxxxxxxx, Vice President and
Chief Financial Officer
CITATION COMPUTER SYSTEMS, INC.
By:_/s/J. Xxxxxx Copper_________________
J. Xxxxxx Copper, Chairman and Chief
Executive Officer
CERNER PERFORMANCE LOGISTICS, INC.
By:_/s/Xxxx X. Naughton__________________
Name: Xxxx X. Xxxxxxxx, Vice President and
Chief Financial Officer
43
APPENDIX I
DEFINITIONS
"Acquisition Proposal for CITATION" means any offer or
proposal for a merger, consolidation, share exchange, business
combination, reorganization, recapitalization, issuance of
securities, liquidation, dissolution, tender offer or exchange
offer or other similar transaction or series of transactions
involving, or any purchase of 10% or more of the assets, or
directly or indirectly acquires beneficial ownership of
securities representing, or exchangeable for or convertible into,
more than 10% of the outstanding securities of any class of
voting securities of CITATION or in which CITATION issues
securities representing 10% of the outstanding securities of any
class of voting securities of CITATION, other than the
transactions contemplated by this Agreement.
"Affiliate" means, with respect to any Person, any other
Person, directly or indirectly, controlling, controlled by, or
under common control with, such Person. For purposes of this
definition, the term "control" (including the correlative terms
"controlling", "controlled by" and "under common control with")
means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, or
partnership or other ownership interests, by contract, or
otherwise.
"Average Cerner Stock Price" means the average of the
closing sales price per share of Cerner Common Stock as reported
by NASDAQ on each of the 20 consecutive trading days immediately
preceding the third trading day prior to the date of the
determination.
"Business Day" means any day other than a Saturday, Sunday
or one on which banks are authorized by law to close in the State
of Missouri.
"Cerner Balance Sheet" means Cerner's audited balance sheet
dated January 1, 2000.
"Cerner Common Stock" means the common stock of Cerner, par
value $.01 per share, including the associated rights (the
"Cerner Stock Purchase Rights") to purchase shares of Series A
Preferred Stock of Cerner pursuant to the Amended and Restated
Rights Agreement, dated as of March 12, 1999, between Cerner and
UMB Bank, n.a., as Rights Agent. All references in this
Agreement to Cerner Common Stock shall be deemed to include the
Cerner Stock Purchase Rights.
"Cerner Disclosure Schedule" means the schedule delivered to
CITATION by Cerner pursuant to Article III hereof containing
exceptions to the representations and warranties of Cerner set
forth in such Article III.
"Cerner SEC Documents" means (i) Cerner's annual report on
Form 10-K for its fiscal year ended January 1, 0000 (xxx "Xxxxxx
00-X"), (xx) Cerner's quarterly report on
Form 10-Q (the "Cerner 10-Q") for its fiscal quarter ended April
1, 2000, (iii) Cerner's proxy or information statements relating
to meetings of, or actions taken without a meeting by, Cerner's
stockholders held since May 28, 1999, and (iv) all other reports,
filings, registration statements and other documents filed by it
with the SEC since January 1, 1999.
A-1
"CITATION Balance Sheet" means CITATION's draft audited
balance sheet relating to its fiscal year ended on March 31,
2000.
"CITATION Disclosure Schedule" means the schedule delivered
to Cerner by CITATION pursuant to Article IV hereof containing
exceptions to the representations and warranties of CITATION set
forth in such Article IV.
"CITATION Preferred Stock" means the preferred stock, par
value $.01 per share, of CITATION.
"CITATION SEC Documents" means (i) CITATION's annual report
on Form 10-K for its fiscal year ended Xxxxx 00, 0000 (xxx
"XXXXXXXX 00-X"), (xx) CITATION's proxy or information statements
relating to meetings of, or actions taken without a meeting by,
CITATION's shareholders held since August 19, 1999, and (iv) all
other reports, filings, registration statements and other
documents filed by it with the SEC since March 31, 1999.
"Closing" means the closing of the Merger contemplated in
this Agreement.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the common stock, par value $.01 per
share, of CITATION.
"Confidentiality Agreement" means the Confidentiality
Agreement by and between Cerner and CITATION attached hereto as
Exhibit J.
"Copyrights" mean all copyrightable works in both published
works and unpublished works registered and unregistered,
including, without limitation, any software.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Exchange Agent" means UMB Bank, n.a., or any successor
exchange agent agreed upon by Cerner and CITATION.
"Exchange Ratio" means 0.1695, such number may be adjusted
pursuant to Section 2.1(g).
"Governmental Entity" means any federal, state or local
governmental authority, any transgovernmental authority or any
court, tribunal, administrative or regulatory agency or
commission or other governmental authority or agency, domestic or
foreign.
"Joint Proxy Statement/Prospectus" means the joint proxy
statement/prospectus included in the Registration Statement
relating to the CITATION Shareholder Meeting, together with any
amendments or supplements thereto.
A-2
"Knowledge" means, with respect to the matter in question,
if any of (i) in the case of Cerner or Merger Sub, Xxxx Xxxxx and
Xxxxx Xxxx, and (ii) in the case of CITATION, the executive
officers and directors of CITATION, in each case after good faith
due inquiry.
"Law" means any federal, state, local, municipal, foreign,
international, multinational, or other judicial or administrative
order, judgment, decree, constitution, statute, rule, regulation,
treaty, ordinance or principle of common law.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in
respect of such asset.
"Marks" mean all fictional business names, trading names,
registered and unregistered trademarks, service marks, and
applications therefor as well as the goodwill of the business
associated therewith.
"Material Adverse Effect" means a material adverse effect on
the financial condition, business, results of operations or
prospects of a Person and its Subsidiaries, taken as a whole, but
shall exclude any material adverse effect arising out of any
change or development relating to (i) U.S. or global economic or
industry conditions, (ii) changes in U.S. or global financial
markets or conditions, and/or (iii) any generally applicable
change in Law or GAAP or interpretation of any thereof. "Cerner
Material Adverse Effect" means a Material Adverse Effect in
respect of Cerner, "CITATION Material Adverse Effect" means a
Material Adverse Effect in respect of CITATION and "Surviving
Corporation Material Adverse Effect" means a Material Adverse
Effect in respect of the Surviving Corporation.
"Patents" mean all patents, patent applications, and
inventions and discoveries that may be patentable.
"Person" means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any
other entity or organization, including any Governmental Entity.
"Registration Statement" means the Registration Statement on
Form S-4 registering under the Securities Act the Cerner Common
Stock issuable in connection with the Merger.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Subsidiary" means, with respect to any Person, any
corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a
majority of the board of directors or other Persons performing
similar functions are directly or indirectly owned by such
Person. "Cerner Subsidiary" means a Subsidiary of Cerner.
"Tax" or "Taxes" means any federal, state, county, local or
foreign taxes, charges, levies, imposts, duties, other
assessments or similar charges of any kind whatsoever, including
any interest, penalties and addition imposed thereon or with
respect thereto.
A-3
"Trade Secrets" mean trade secrets (such as customer
information, technical and non-technical data, a formula,
pattern, compilation, program, device, method, technique,
drawing, process) and other confidential and proprietary
information concerning the products, processes, or services of
CITATION, including but not limited to: computer programs;
unpatented or unpatentable inventions; ideas, discoveries or
improvements; know-how, procedures, methodologies, machines,
lectures, manuals, reports, illustrations, plans, designs,
proposals, programming aids, flow charts, algorithms, schematics;
marketing, manufacturing, or organizational research and
development results and plans; business and strategic plans;
sales forecasts and plans; personnel information, including the
identity of employees of CITATION, their responsibilities,
competence, abilities, and compensation; pricing and financial
information; current and prospective customer lists and
information on customers or their employees; information
concerning purchases of major equipment or property; and
information about potential mergers or acquisitions.
"368 Reorganization" means a merger that qualifies as a
reorganization within the meaning of Section 368(a) of the Code
and the regulations promulgated thereunder.
In addition to the definitions set forth above, each of the
following terms is defined in the Section set forth opposite such
term:
TERMS SECTIONS
----- --------
Adverse Change in the CITATION Recommendation 7.2(b)
Affiliate Agreement 7.7
Agreement Preamble
Articles of Merger 2.1(b)
Cerner Preamble
Cerner Financial Statement 3.11
Cerner Representation Letter 7.6(b)
Cerner Return 3.12
Certificate of Merger 2.1(b)
Certificates 2.3(a)
CITATION Preamble
CITATION Employee Plans 4.13(a)
CITATION Financial Statements 4.7(a)
CITATION Insiders 7.10(c)
CITATION Intellectual Property 4.16(b)
CITATION Representation Letter 7.6(b)
CITATION Returns 4.12(a)
CITATION Securities 4.5(b)
CITATION Shareholder Approval Recitals
CITATION Shareholders Meeting 4.19(b)
CITATION Stock Options 4.5(a)
CITATION Warrants 4.5(a)
Common Stock Recitals
Costs 7.11(b)
Delaware Law 2.1(a)
A-4
TERMS SECTIONS
----- --------
Effective Time 2.1(b)
Environmental Laws 4.17(b)
ERISA 4.13(a)
ERISA Affiliate 4.13(a)
Exchange Fund 2.3(a)
Expenses 9.3
Expiration Date 9.1(b)(i)
GAAP 3.5(d)
HSR Act 3.3
Indemnified Parties 7.11(b)
Merger Recitals
Merger Consideration 2.1(e)(i)
Merger Sub Preamble
Missouri Law 2.1(a)
Multiemployer Plan 4.13(b)
Retirement Plan 4.13(b)
Section 16 Information 7.10(b)
Shareholder Agreement Recitals
Shares Recitals
Stock Rights 2.1(f)
Superior Proposal 6.2(b)
Surviving Corporation 2.1(a)
A-5
