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AGREEMENT AND PLAN OF MERGER
DATED AS OF OCTOBER 27, 1998
BY AND AMONG
LUMONICS INC.,
GRIZZLY ACQUISITION CORP.
AND
GENERAL SCANNING INC.
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TABLE OF CONTENTS
THIS TABLE OF CONTENTS IS NOT PART OF THE AGREEMENT TO
WHICH IT IS ATTACHED BUT IS INSERTED FOR CONVENIENCE ONLY.
PAGE
NO.
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ARTICLE I THE MERGER................................................. A-1
1.01 The Merger................................................. A-1
1.02 Closing.................................................... A-1
1.03 Effective Time............................................. A-2
1.04 Articles of Incorporation and Bylaws of the Surviving
Corporation............................................... A-2
1.05 Directors and Officers of the Surviving Corporation........ A-2
1.06 Effects of the Merger...................................... A-2
1.07 Further Assurances......................................... A-2
ARTICLE II CONVERSION OF SHARES....................................... A-2
2.01 Conversion of Capital Stock................................ A-2
2.02 Exchange of Certificates................................... A-4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF GRIZZLY.................. A-5
3.01 Organization and Qualification............................. A-5
3.02 Capital Stock.............................................. A-6
3.03 Authority Relative to This Agreement....................... A-7
3.04 Non-Contravention; Approvals and Consents.................. A-7
3.05 Reports and Financial Statements........................... A-8
3.06 Absence of Certain Changes or Events....................... A-8
3.07 Absence of Undisclosed Liabilities......................... A-8
3.08 Legal Proceedings.......................................... A-9
3.09 Information Supplied....................................... A-9
3.10 Compliance with Laws and Orders............................ A-9
3.11 Compliance with Agreements; Certain Agreements............. A-9
3.12 Taxes...................................................... A-10
3.13 Employee Benefit Plans; ERISA.............................. A-10
3.14 Labor Matters.............................................. A-11
3.15 Environmental Matters...................................... A-11
3.16 Intellectual Property Rights............................... A-12
3.17 Vote Required.............................................. A-14
3.18 Opinion of Financial Advisor............................... A-14
3.19 Grizzly Rights Agreement................................... A-14
3.20 Ownership of Lynx Common Stock............................. A-14
3.21 Chapter 110D of Mass. Xxx. Laws Not Applicable............. A-14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF LYNX AND SUB............. A-14
4.01 Organization and Qualification............................. A-14
4.02 Capital Stock.............................................. A-15
4.03 Authority Relative to This Agreement....................... A-15
4.04 Non-Contravention; Approvals and Consents.................. A-16
4.05 Reports and Financial Statements........................... A-16
4.06 Absence of Certain Changes or Events....................... A-17
4.07 Absence of Undisclosed Liabilities......................... A-17
4.08 Legal Proceedings.......................................... A-17
4.09 Information Supplied....................................... A-18
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NO.
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4.10 Compliance with Laws and Orders........................... A-18
4.11 Compliance with Agreements; Certain Agreements............ A-18
4.12 Taxes..................................................... A-19
4.13 Employee Benefit Plans; ERISA............................. A-19
4.14 Labor Matters............................................. A-20
4.15 Environmental Matters..................................... A-20
4.16 Intellectual Property Rights.............................. A-20
4.17 Vote Required............................................. A-21
4.18 Opinion of Financial Advisor.............................. A-22
4.19 Ownership of Grizzly Common Stock......................... A-22
4.20 Control Share Statute Not Applicable...................... A-22
ARTICLE V COVENANTS................................................. A-22
5.01 Covenants of Grizzly and Lynx............................. A-22
5.02 No Solicitations.......................................... A-24
5.03 Grizzly Rights Agreement.................................. A-25
5.04 Conduct of Business of Sub................................ A-25
5.05 Third Party Standstill Agreements......................... A-25
5.06 Purchases of Common Stock of the Other Party.............. A-25
5.07 Adoption of Lynx Rights Agreement......................... A-25
ARTICLE VI ADDITIONAL AGREEMENTS..................................... A-26
6.01 Access to Information; Confidentiality.................... A-26
6.02 Preparation of Registration Statement and Proxy
Statement................................................ A-26
6.03 Approval of Shareholders.................................. A-26
6.04 Grizzly Affiliates........................................ A-27
6.05 Stock Exchange Listing.................................... A-27
6.06 Certain Tax Matters....................................... A-27
6.07 Regulatory and Other Approvals............................ A-28
6.08 [Omitted]................................................. A-28
6.09 Grizzly Stock Plan........................................ A-28
6.10 Directors' and Officers' Indemnification and Insurance.... A-29
6.11 Lynx Governance........................................... A-30
6.12 Continuation; Name Change................................. A-30
6.13 Stock Option Agreements................................... A-30
6.14 Expenses.................................................. A-30
6.15 Brokers or Finders........................................ A-30
6.16 Takeover Statutes......................................... A-30
6.17 Conveyance Taxes.......................................... A-31
ARTICLE VII CONDITIONS................................................ A-31
7.01 Conditions to Each Party's Obligation to Effect the
Merger................................................... A-31
7.02 Conditions to Obligation of Lynx and Sub to Effect the
Merger................................................... A-32
7.03 Conditions to Obligation of Grizzly to Effect the Merger.. A-32
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER......................... A-33
8.01 Termination............................................... A-33
8.02 Effect of Termination..................................... A-34
8.03 Amendment................................................. A-35
8.04 Waiver.................................................... A-35
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NO.
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ARTICLE IX GENERAL PROVISIONS.......................................... A-35
9.01 Non-Survival of Representations, Warranties, Covenants and
Agreements................................................. A-35
9.02 Notices..................................................... A-35
9.03 Entire Agreement; Incorporation of Exhibits................. A-36
9.04 Public Announcements........................................ A-36
9.05 No Third Party Beneficiaries................................ A-36
9.06 No Assignment; Binding Effect............................... A-36
9.07 Headings.................................................... A-37
9.08 Invalid Provisions.......................................... A-37
9.09 Governing Law............................................... A-37
9.10 Enforcement of Agreement.................................... A-37
9.11 Certain Definitions......................................... A-37
9.12 Counterparts................................................ A-38
EXHIBITS
EXHIBIT A Form of Affiliate Agreement
EXHIBIT B Form of Incorporation and Bylaws of Lynx Post-Merger
iii
GLOSSARY OF DEFINED TERMS
The following terms, when used in this Agreement, have the meanings ascribed
to them in the corresponding Sections of this Agreement listed below:
"affiliate".............................................. Section 9.11(a)
"Affiliate Agreement".................................... Section 6.04
"this Agreement"......................................... Preamble
"Alternative Proposal"................................... Section 5.02
"Antitrust Division"..................................... Section 6.07
"Articles of Merger"..................................... Section 1.03
"beneficially"........................................... Section 9.11(b)
"business day"........................................... Section 9.11(c)
"CERCLA"................................................. Section 3.15(b)
"Certificates"........................................... Section 2.02(b)
"Closing"................................................ Section 1.02
"Closing Date"........................................... Section 1.02
"Code"................................................... Section 3.13
"Common Stock Trust"..................................... Section 2.02(e)(iii)
"Confidentiality Agreement".............................. Section 6.01(a
"Confidential Information"............................... Section 6.01(a)
"Constituent Corporations"............................... Section 1.01
"Contracts".............................................. Section 3.04(a)
"control," "controlling," "controlled by" and "under
common control with".................................... Section 9.11(a)
"Conversion Number"...................................... Section 2.01(c)
"Current Grizzly Directors".............................. Section 6.11
"MBCL"................................................... Section 1.01
"Dissenting Share"....................................... Section 2.01(d)(i)
"Effective Time"......................................... Section 1.03
"Environmental Law"...................................... Section 3.15(e)(i)
"Environmental Permits".................................. Section 3.15(a)
"ERISA".................................................. Section 3.13(b)(i)
"Excess Shares".......................................... Section 2.02(e)(ii)
"Exchange Act"........................................... Section 3.04(b)
"Exchange Agent"......................................... Section 2.02(a)
"Exchange Fund".......................................... Section 2.02(a)
"FTC".................................................... Section 6.07
"Grizzly"................................................ Preamble
"Grizzly Affiliates"..................................... Section 6.04
"Grizzly Common Stock"................................... Section 2.01(b)
"Grizzly Disclosure Letter".............................. Section 3.01
"Grizzly Employee Benefit Plan".......................... Section 3.13(b)(i)
"Grizzly Financial Statements"........................... Section 3.05
"Grizzly Option Plans"................................... Section 2.01(e)
"Grizzly Permits"........................................ Section 3.10
"Grizzly Preferred Stock"................................ Section 3.02
"Grizzly Reports"........................................ Section 3.05
"Grizzly Rights"......................................... Section 3.02(a)
"Grizzly Rights Agreement"............................... Section 3.02(a)
"Grizzly Series A Preferred Stock"....................... Section 3.02(a)
"Grizzly Stock Option"................................... Section 6.09
"Grizzly Shareholders' Approval"......................... Section 6.03(b)
iv
"Governmental or Regulatory Authority".................... Section 3.04(a)
"group"................................................... Section 9.11(f)
"Hazardous Material"...................................... Section 3.15(e)(ii)
"HSR Act"................................................. Section 3.04(b)
"Indemnified Liabilities"................................. Section 6.10(a)
"Indemnified Parties"..................................... Section 6.10(a)
"Indemnifying Party"...................................... Section 6.10(a)
"Intellectual Property Rights"............................ Section 3.16(a)
"knowledge"............................................... Section 9.11(d)
"laws".................................................... Section 3.04(a)
"Lien".................................................... Section 3.02(b)
"Lynx".................................................... Preamble
"Lynx Common Stock"....................................... Section 2.01(c)
"Lynx Directors".......................................... Section 6.11
"Lynx Disclosure Letter".................................. Section 4.01
"Lynx Employee Benefit Plan".............................. Section 4.13(b)
"Lynx Financial Statements"............................... Section 4.05
"Lynx Option Plan"........................................ Section 5.01(b)
"Lynx Permits"............................................ Section 4.10
"Lynx Reports"............................................ Section 4.05
"Lynx Shareholders' Approval"............................. Section 6.03(a)
"Lynx Shareholders' Meeting".............................. Section 6.03(a)
"Lynx Shareholders' Proposals"............................ Section 6.03(a)
"material", "material adverse effect" and "materially
adverse"................................................. Section 9.11(e)
"Merger".................................................. Preamble
"Options"................................................. Section 3.02(a)
"orders".................................................. Section 3.04(a)
"person".................................................. Section 9.11(f)
"Plan".................................................... Section 3.13(b)(ii)
"Principal Party"......................................... Section 5.01
"Proxy Statement"......................................... Section 3.09
"qualified stock options"................................. Section 6.09(a)
"Registration Statement".................................. Section 4.09
"Representatives"......................................... Section 9.11(g)
"SEC"..................................................... Section 3.04(b)
"Secretary of State"...................................... Section 1.03
"Securities Act".......................................... Section 3.04(b)
"Shareholders' Meetings".................................. Section 6.03(b)
"Stock Option Agreements"................................. Preamble
"Sub"..................................................... Preamble
"Sub Common Stock"........................................ Section 2.01(a)
"Subsidiaries"............................................ Section 9.11(h)
"Subsidiary".............................................. Section 9.11(h)
"Surviving Corporation"................................... Section 1.01
"Surviving Corporation Common Stock"...................... Section 2.01(a)
"taxes"................................................... Section 3.12(c)
v
This AGREEMENT AND PLAN OF MERGER dated as of October 27, 1998 ("this
Agreement") is made and entered into by and among LUMONICS INC., an Ontario
corporation ("Lynx"), GRIZZLY ACQUISITION CORP., a Massachusetts corporation
wholly owned by Lynx ("Sub"), and GENERAL SCANNING INC., a Massachusetts
corporation ("Grizzly").
WHEREAS, the Boards of Directors of Lynx, Sub and Grizzly have each
determined that it is advisable and in the best interests of their respective
shareholders to consummate, and have approved, the merger of equals business
combination transaction provided for herein in which Sub would merge with and
into Grizzly and Grizzly would become a wholly-owned subsidiary of Lynx (the
"Merger");
WHEREAS, the respective Boards of Directors of Lynx and Grizzly have
determined that the Merger is in furtherance of and consistent with their
respective long-term business strategies and is fair to and in the best
interests of their respective shareholders, and Lynx has approved this
Agreement and the Merger as the sole shareholder of Sub;
WHEREAS, concurrently with the execution and delivery of this Agreement and
as condition and inducement to the parties' willingness to enter into this
Agreement, Grizzly, Lynx and Sub have entered into Stock Option Agreements of
even date herewith (the "Stock Option Agreements") providing for the granting
by (i) Grizzly to Sub or Lynx of an option to purchase from Grizzly up to
2,517,673 shares of Grizzly Common Stock (as defined in Section 2.01(b)) at
U.S. $4.57 per share, and (ii) Lynx to Grizzly of an option to purchase from
Lynx up to 3,391,656 shares of Lynx Common Stock (as defined in Section
2.01(c) at Can. $8.09 per share, in each case subject to the terms and
conditions set forth therein; and
WHEREAS, Lynx, Sub and Grizzly desire to make certain representations,
warranties and agreements in connection with the Merger and also to prescribe
various conditions to the Merger;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. ARTICLE I
THE MERGER
1.01 The Merger. Upon the terms and subject to the conditions of this
Agreement, at the Effective Time (as defined in Section 1.03), Sub shall be
merged with and into Grizzly in accordance with the Business Corporation Law
of the Commonwealth of Massachusetts (the "MBCL"). At the Effective Time, the
separate existence of Sub shall cease and Grizzly shall continue as the
surviving corporation in the Merger (the "Surviving Corporation"). Sub and
Grizzly are sometimes referred to herein as the "Constituent Corporations". As
a result of the Merger, the outstanding shares of capital stock of the
Constituent Corporations shall be converted or cancelled in the manner
provided in Article II.
1.02 Closing. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
8.01, and subject to the satisfaction or waiver (where applicable) of the
conditions set forth in Article VII, the closing of the Merger (the "Closing")
will take place at the offices of XxXxxxx Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, 00xx
xxxxx, Xxxxxx, Xxxxxxx, at 10:00 a.m., local time, on the fifth business day
following satisfaction of the condition set forth in Section 7.01(a) unless
another date, time or place is agreed to in writing by the parties hereto (the
"Closing Date"). At the Closing there shall be delivered to Lynx, Sub and
Grizzly the certificates and other documents and instruments required to be
delivered under Article VII.
A-1
1.03 Effective Time. At the Closing, articles of merger (the "Articles of
Merger") shall be duly prepared and executed by the Surviving Corporation and
thereafter delivered to the Secretary of State of the Commonwealth of
Massachusetts (the "Secretary of State") for filing, as provided in Section 78
of the MBCL, as soon as practicable on the Closing Date. The Merger shall
become effective at the time of the filing of the Articles of Merger with the
Secretary of State (the date and time of such filing being referred to herein
as the "Effective Time").
1.04 Articles of Incorporation and Bylaws of the Surviving Corporation. At
the Effective Time, (i) the Articles of Incorporation of the Surviving
Corporation shall be amended to read in their entirety (except for the
corporate name) as set forth in the Articles of Incorporation of Sub as in
effect immediately prior to the Effective Time until thereafter amended as
provided by law and such Articles of Incorporation, and (ii) the Bylaws of Sub
as in effect immediately prior to the Effective Time shall be the Bylaws of
the Surviving Corporation until thereafter amended as provided by law, the
Articles of Incorporation of the Surviving Corporation and such Bylaws.
1.05 Directors and Officers of the Surviving Corporation. The directors of
Sub and the officers of Sub immediately prior to the Effective Time shall,
from and after the Effective Time, be the directors and officers,
respectively, of the Surviving Corporation until their successors shall have
been duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Surviving Corporation's Articles
of Incorporation and Bylaws.
1.06 Effects of the Merger. Subject to the foregoing, the effects of the
Merger shall be as provided in the applicable provisions of the MBCL.
1.07 Further Assurances. Each party hereto will, either prior to or after
the Effective Time, execute such further documents, instruments, deeds, bills
of sale, assignments and assurances and take such further actions as may
reasonably be requested by one or more of the others to consummate the Merger,
to vest the Surviving Corporation with full title to all assets, properties,
privileges, rights, approvals, immunities and franchises of either of the
Constituent Corporations or to effect the other purposes of this Agreement.
2. ARTICLE II
CONVERSION OF SHARES
2.01 Conversion of Capital Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder thereof:
(a) Capital Stock of Sub. Each issued and outstanding share of the common
stock, par value U.S. $.01 per share, of Sub ("Sub Common Stock") shall be
converted into and become one fully paid and nonassessable share of common
stock, par value U.S.$.01 per share, of the Surviving Corporation
("Surviving Corporation Common Stock"). Each certificate representing
outstanding shares of Sub Common Stock shall at the Effective Time
represent an equal number of shares of Surviving Corporation Common Stock.
(b) Cancellation of Treasury Stock and Stock Owned by Lynx and
Subsidiaries. All shares of common stock, par value U.S. $.01 per share, of
Grizzly ("Grizzly Common Stock") that are owned by Grizzly as treasury
stock and any shares of Grizzly Common Stock owned by Lynx, Sub or any
other wholly-owned Subsidiary (as defined in Section 9.11) of Lynx shall be
canceled and retired and shall cease to exist and no stock of Lynx or other
consideration shall be delivered in exchange therefor.
(c) Exchange Ratio for Grizzly Common Stock. (i) Each issued and
outstanding share of Grizzly Common Stock (other than shares to be canceled
in accordance with Section 2.01(b) and other than
A-2
Dissenting Shares (as defined in Section 2.01(d))) shall be converted into
the right to receive 1.347 (the "Conversion Number") fully paid and
nonassessable shares of common stock of Lynx ("Lynx Common Stock").
(ii) If, prior to the Effective Time, Lynx shall pay a dividend in,
subdivide, combine into a smaller number of shares or issue by
reclassification of its shares any shares of Lynx Common Stock, the
Conversion Number shall be multiplied by a fraction, the numerator of
which shall be the number of shares of Lynx Common Stock outstanding
immediately after, and the denominator of which shall be the number of
such shares outstanding immediately before, the occurrence of such
event, and the resulting product shall from and after the date of such
event be the Conversion Number, subject to further adjustment in
accordance with this paragraph. If, prior to the Effective Time,
Grizzly shall pay a dividend in, subdivide, combine into a smaller
number of shares or issue by reclassification of its shares any shares
of Grizzly Common Stock, the Conversion Number shall be multiplied by a
fraction, the numerator of which shall be the number of shares of
Grizzly Common Stock outstanding immediately before, and the
denominator of which shall be the number of such shares outstanding
immediately after, the occurrence of such event, and the resulting
product shall from and after the date of such event be the Conversion
Number, subject to further adjustment in accordance with this
paragraph.
(iii) All shares of Grizzly Common Stock converted in accordance with
paragraph (i) of this Section 2.01(c) shall no longer be outstanding
and shall automatically be canceled and retired and shall cease to
exist, and each holder of a certificate representing any such shares
shall cease to have any rights with respect thereto, except the right
to receive the shares of Lynx Common Stock and any cash in lieu of
fractional shares of Lynx Common Stock to be issued or paid in
consideration therefor (determined in accordance with Section 2.02(e)),
upon the surrender of such certificate in accordance with Section 2.02,
without interest.
(d) Dissenting Shares. (i) Notwithstanding any provision of this
Agreement to the contrary, each outstanding share of Grizzly Common Stock
the holder of which has not voted in favor of the Merger, has perfected
such holder's right to an appraisal of such holder's shares in accordance
with the applicable provisions of the MBCL and has not effectively
withdrawn or lost such right to appraisal (a "Dissenting Share") shall not
be converted into or represent a right to receive shares of Lynx Common
Stock pursuant to Section 2.01(c), but the holder thereof shall be entitled
only to such rights as are granted by the applicable provisions of the
MBCL; provided, however, that any Dissenting Share held by a person at the
Effective Time who shall, after the Effective Time, withdraw the demand for
appraisal or lose the right of appraisal, in either case pursuant to the
MBCL, shall be deemed to be converted into, as of the Effective Time, the
right to receive shares of Lynx Common Stock pursuant to Section 2.01(c).
(ii) Grizzly shall give Lynx (x) prompt notice of any written demands
for appraisal, withdrawals of demands for appraisal and any other
instruments served pursuant to the applicable provisions of the MBCL
relating to the appraisal process received by Grizzly and (y) the
opportunity to participate in all negotiations and proceedings with
respect to demands for appraisal under the MBCL. Grizzly will not
voluntarily make any payment with respect to any demands for appraisal
and will not, except with the prior written consent of Lynx, settle or
offer to settle any such demands.
(e) Stock Option Plans. Subject to Canadian securities law and The
Toronto Stock Exchange rules and subject to the terms and conditions of
Grizzly's Director Warrant Plan, 1981 Stock Option Plan and 1992 Stock
Option Plan (the "Grizzly Option Plans") and the stock option agreements
executed pursuant thereto the Grizzly Option Plans and each warrant or
option to purchase Grizzly Common Stock granted thereunder that is
outstanding at the Effective Time shall be assumed by Lynx and continued in
accordance with their respective terms and each such warrant or option
shall become a right to purchase a number of shares of Lynx Common Stock
equal to the Conversion Number multiplied by the number of shares of
Grizzly Common Stock subject to such warrant or option immediately prior to
the Effective Time, as more fully described in Section 6.09.
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2.02 Exchange of Certificates.
(a) Exchange Agent. Promptly following the Effective Time, Lynx shall
make available to the Surviving Corporation for deposit with a bank, trust
company or transfer agent designated before the Closing Date by Lynx and
reasonably acceptable to Grizzly (the "Exchange Agent") certificates
representing the number of duly authorized whole shares of Lynx Common
Stock issuable in connection with the Merger plus an amount of cash equal
to the aggregate amount payable in lieu of fractional shares in accordance
with Section 2.02(e), to be held for the benefit of and distributed to such
holders in accordance with this Section. The Exchange Agent shall agree to
hold such shares of Lynx Common Stock and funds (such shares of Lynx Common
Stock and funds, together with earnings thereon, being referred to herein
as the "Exchange Fund") for delivery as contemplated by this Section and
upon such additional terms as may be agreed upon by the Exchange Agent,
Grizzly and Lynx.
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Surviving Corporation shall cause the Exchange Agent to
mail to each holder of record of a certificate or certificates which
immediately prior to the Effective Time represented outstanding shares of
Grizzly Common Stock (the "Certificates") whose shares are converted
pursuant to Section 2.01(c) into the right to receive shares of Lynx Common
Stock (i) a letter of transmittal (which shall specify that delivery shall
be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent and shall be
in such form and have such other provisions as the Surviving Corporation
may reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for certificates representing
shares of Lynx Common Stock and cash in lieu of fractional shares. Upon
surrender of a Certificate for cancellation to the Exchange Agent, together
with such letter of transmittal duly executed and completed in accordance
with its terms, the holder of such Certificate shall be entitled to receive
in exchange therefor a certificate representing that number of whole shares
of Lynx Common Stock, plus the cash amount payable in lieu of fractional
shares in accordance with Section 2.02(e), which such holder has the right
to receive pursuant to the provisions of this Article II, and the
Certificate so surrendered shall forthwith be canceled. In no event shall
the holder of any Certificate be entitled to receive interest on any funds
to be received in the Merger. In the event of a transfer of ownership of
Grizzly Common Stock which is not registered in the transfer records of
Grizzly, a certificate representing that number of whole shares of Lynx
Common Stock, plus the cash amount payable in lieu of fractional shares in
accordance with Section 2.02(e), may be issued to a transferee if the
Certificate representing such Grizzly Common Stock is presented to the
Exchange Agent accompanied by all documents required to evidence and effect
such transfer and by evidence that any applicable stock transfer taxes have
been paid. Until surrendered as contemplated by this Section 2.02(b), each
Certificate shall be deemed at any time after the Effective Time for all
corporate purposes of Lynx, except as limited by paragraph (c) below, to
represent ownership of the number of shares of Lynx Common Stock into which
the number of shares of Grizzly Common Stock shown thereon have been
converted as contemplated by this Article II. Notwithstanding the
foregoing, Certificates representing Grizzly Common Stock surrendered for
exchange by any person constituting an "affiliate" of Grizzly for purposes
of Section 6.04 shall not be exchanged until Lynx has received an Affiliate
Agreement (as defined in Section 6.04) executed by such person as provided
in Section 6.04.
(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions declared or made after the Effective Time with respect
to Lynx Common Stock with a record date on or after the Effective Time
shall be paid to the holder of any unsurrendered Certificate with respect
to the shares of Lynx Common Stock represented thereby and no cash payment
in lieu of fractional shares shall be paid to any such holder pursuant to
Section 2.02(e) until the holder of record of such Certificate shall
surrender such Certificate in accordance with this Section (or affidavits
of loss with respect to lost, stolen or destroyed certificates). Subject to
the effect of applicable laws, following surrender of any such Certificate
or affidavit, there shall be paid to the record holder of the certificates
representing whole shares of Lynx Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of
dividends or other distributions, if any, with a record date on or after
the Effective Time which theretofore became payable, but which were not
paid by reason of the immediately preceding sentence, with respect to such
whole shares of Lynx Common Stock, and (ii) at the appropriate payment
date, the amount of dividends or
A-4
other distributions with a record date on or after the Effective Time but
prior to surrender and a payment date subsequent to surrender payable with
respect to such whole shares of Lynx Common Stock.
(d) No Further Ownership Rights in Grizzly Common Stock. All shares of
Lynx Common Stock issued upon the surrender for exchange of Certificates in
accordance with the terms hereof (including any cash paid pursuant to
Section 2.02(e)) shall be deemed to have been issued at the Effective Time
in full satisfaction of all rights pertaining to the shares of Grizzly
Common Stock represented thereby. From and after the Effective Time, the
stock transfer books of Grizzly shall be closed and there shall be no
further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Grizzly Common Stock which were
outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for
any reason, they shall be canceled and exchanged as provided in this
Section.
(e) No Fractional Shares. (i) No certificate or scrip representing
fractional shares of Lynx Common Stock will be issued in the Merger upon
the surrender for exchange of Certificates, and such fractional share
interests will not entitle the owner thereof to vote or to any rights of a
shareholder of Lynx. In lieu of any such fractional shares, each holder of
Certificates who would otherwise have been entitled to a fraction of a
share of Lynx Common Stock in exchange for such Certificates pursuant to
this Section shall receive from the Exchange Agent a cash payment in U.S.
dollars without interest in lieu of such fractional share determined by
multiplying such fraction by the average of the last sale prices of Lynx
Common Stock, as reported by The Toronto Stock Exchange, for the five
Toronto Stock Exchange trading days immediately preceding the Effective
Date. As promptly as practicable after the determination of the amount of
cash, if any, to be paid to holders of fractional interests, the Exchange
Agent shall so notify Lynx, and Lynx shall cause the Surviving Corporation
to deposit such amount with the Exchange Agent and shall cause the Exchange
Agent to forward payments to such holders of fractional interests subject
to and in accordance with the terms hereof.
(f) Termination of Exchange Fund and Common Stock Trust. Any portion of
the Exchange Fund and Common Stock Trust which remains undistributed to the
shareholders of Grizzly for six months after the Effective Time shall be
delivered to the Surviving Corporation, upon demand, and any shareholders
of Grizzly who have not theretofore complied with this Article II shall
thereafter look only to the Surviving Corporation (subject to abandoned
property, escheat and other similar laws) as general creditors for payment
of their claim for Lynx Common Stock, any cash in lieu of fractional shares
of Lynx Common Stock and any dividends or distributions with respect to
Lynx Common Stock. Neither Lynx nor the Surviving Corporation shall be
liable to any holder of shares of Grizzly Common Stock for shares of Lynx
Common Stock (or dividends or distributions with respect thereto) or cash
payable in respect of fractional share interests delivered to a public
official pursuant to any applicable abandoned property, escheat or similar
law.
3. ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GRIZZLY
Grizzly represents and warrants to Lynx and Sub as follows:
3.01 Organization and Qualification. Each of Grizzly and its Subsidiaries
(as defined in Section 9.11) is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has full corporate power and authority to conduct its
business as and to the extent now conducted and to own, use and lease its
assets and properties, except for such failures to be so incorporated,
existing and in good standing or to have such power and authority which,
individually or in the aggregate, are not having and could not be reasonably
expected to have a material adverse effect (as defined in Section 9.11) on
Grizzly and its Subsidiaries taken as a whole. Each of Grizzly and its
Subsidiaries is duly qualified, licensed or admitted to do business and is in
good standing in each jurisdiction in which the ownership, use or leasing of
its assets and properties, or the conduct or nature of its business, makes
such qualification, licensing or admission necessary, except for such failures
to be so qualified, licensed or admitted and in good standing which,
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individually or in the aggregate, are not having and could not be reasonably
expected to have a material adverse effect on Grizzly and its Subsidiaries
taken as a whole. Section 3.01 of the letter dated the date hereof and
delivered to Lynx and Sub by Grizzly concurrently with the execution and
delivery of this Agreement (the "Grizzly Disclosure Letter") sets forth (i)
the name and jurisdiction of incorporation of each Subsidiary of Grizzly, (ii)
its authorized capital stock, (iii) the number of issued and outstanding
shares of its capital stock and (iv) the record owners of such shares. Except
for interests in the Subsidiaries of Grizzly and as disclosed in Section 3.01
of the Grizzly Disclosure Letter, Grizzly does not directly or indirectly own
any equity or similar interest in, or any interest convertible into or
exchangeable or exercisable for, any equity or similar interest in, any
corporation, partnership, limited liability company, joint venture or other
business association or entity (other than (i) non-controlling investments in
the ordinary course of business and corporate partnering, development,
cooperative marketing and similar undertakings and arrangements entered into
in the ordinary course of business and (ii) other investments of less than
U.S. $100,000). Grizzly has previously made available to Lynx correct and
complete copies of the certificate or articles of incorporation and bylaws (or
other comparable charter documents) of Grizzly.
3.02 Capital Stock. (a) The authorized capital stock of Grizzly consists
solely of 30,000,000 shares of Grizzly Common Stock and 1,000,000 shares of
preferred stock, par value $.01 per share ("Grizzly Preferred Stock"). As of
the close of business on October 26, 1998, 12,651,626 shares of Grizzly Common
Stock were issued and outstanding, 366,073 shares were held in the treasury of
Grizzly and 2,100,000 shares we re reserved for issuance upon the exercise of
Options under the Grizzly Option Plans of which 1,440,315 were granted and are
outstanding. Since such date, there has been no change in the number of issued
and outstanding shares of Grizzly Common Stock or shares of Grizzly Common
Stock held in treasury or reserved for issuance other than the reservation of
2,517,673 shares pursuant to the relevant Stock Option Agreement. As of the
date hereof, no shares of Grizzly Preferred Stock are issued and outstanding
and 3,000 shares are designated Series A Junior Participating Preferred Stock
("Grizzly Series A Preferred Stock") and are reserved for issuance in
accordance with the Rights Agreement dated as of May 1, 1997, as amended, by
and between Grizzly and American Stock Transfer & Trust Company, as Rights
Agent (the "Grizzly Rights Agreement"), pursuant to which Grizzly has issued
rights (the "Grizzly Rights") to purchase shares of Grizzly Series A Junior
Participating Preferred Stock. All of the issued and outstanding shares of
Grizzly Common Stock are, and all shares reserved for issuance will be, upon
issuance in accordance with the terms specified in the instruments or
agreements pursuant to which they are issuable, duly authorized, validly
issued, fully paid and nonassessable. Except pursuant to this Agreement, the
Grizzly Rights Agreement and the Stock Option Agreements and except as set
forth in Section 3.02 of the Grizzly Disclosure Letter, there are no
outstanding subscriptions, options, warrants, rights (including "phantom"
stock rights), preemptive rights or other contracts, commitments,
understandings or arrangements, including any right of conversion or exchange
under any outstanding security, instrument or agreement (together, "Options"),
obligating Grizzly or any of its Subsidiaries to issue or sell any shares of
capital stock of Grizzly or to grant, extend or enter into any Option with
respect thereto.
(b) Except as disclosed in Section 3.02 of the Grizzly Disclosure Letter,
all of the outstanding shares of capital stock of each Subsidiary of Grizzly
are duly authorized, validly issued, fully paid and nonassessable and are
owned, beneficially and of record, by Grizzly or a Subsidiary wholly owned,
directly or indirectly, by Grizzly, free and clear of any liens, claims,
mortgages, encumbrances, pledges, security interests, equities and charges of
any kind (each a "Lien"). Except as disclosed in Section 3.02 of the Grizzly
Disclosure Letter, there are no (i) outstanding Options obligating Grizzly or
any of its Subsidiaries to issue or sell any shares of capital stock of any
Subsidiary of Grizzly or to grant, extend or enter into any such Option or
(ii) voting trusts, proxies or other commitments, understandings, restrictions
or arrangements in favor of any person other than Grizzly or a Subsidiary
wholly owned, directly or indirectly, by Grizzly with respect to the voting of
or the right to participate in dividends or other earnings on any capital
stock of any Subsidiary of Grizzly.
(c) Except as disclosed in Section 3.02 of the Grizzly Disclosure Letter,
there are no outstanding contractual obligations of Grizzly or any Subsidiary
of Grizzly to repurchase, redeem or otherwise acquire any shares of Grizzly
Common Stock or any capital stock of any Subsidiary of Grizzly or to provide
funds to, or make any
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investment (in the form of a loan, capital contribution or otherwise) in, any
Subsidiary of Grizzly or any other person.
3.03 Authority Relative to This Agreement. Grizzly has full corporate power
and authority to enter into this Agreement and, subject to obtaining the
Grizzly Shareholders' Approval (as defined in Section 6.03(b)), to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by Grizzly and the
consummation by Grizzly of the transactions contemplated hereby have been duly
and validly approved by the Board of Directors of Grizzly, the Board of
Directors of Grizzly has recommended adoption of this Agreement by the
shareholders of Grizzly and directed that this Agreement be submitted to the
shareholders of Grizzly for their consideration, and no other corporate
proceedings on the part of Grizzly or its shareholders are necessary to
authorize the execution, delivery and performance of this Agreement by Grizzly
and the consummation by Grizzly of the transactions contemplated hereby, other
than obtaining the Grizzly Shareholders' Approval. This Agreement has been
duly and validly executed and delivered by Grizzly and constitutes a legal,
valid and binding obligation of Grizzly enforceable against Grizzly in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
3.04 Non-Contravention; Approvals and Consents. (a) The execution and
delivery of this Agreement by Grizzly do not, and the performance by Grizzly
of its obligations hereunder and the consummation of the transactions
contemplated hereby will not, conflict with, result in a violation or breach
of, constitute (with or without notice or lapse of time or both) a default
under, result in or give to any person any right of payment or reimbursement,
termination, cancellation, modification or acceleration of, or result in the
creation or imposition of any Lien upon any of the assets or properties of
Grizzly or any of its Subsidiaries under, any of the terms, conditions or
provisions of (i) the certificates or articles of incorporation or bylaws (or
other comparable charter documents) of Grizzly or any of its Subsidiaries, or
(ii) subject to the obtaining of Grizzly Shareholders' Approval and the taking
of the actions described in paragraph (b) of this Section, (x) any statute,
law, rule, regulation or ordinance (together, "laws"), or any judgment,
decree, order, writ, permit or license (together, "orders"), of any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic or
foreign state, province, county, city or other political subdivision (a
"Governmental or Regulatory Authority") applicable to Grizzly or any of its
Subsidiaries or any of their respective assets or properties, or (y) any note,
bond, mortgage, security agreement, indenture, license, franchise, permit,
concession, contract, lease or other instrument, obligation or agreement of
any kind (together, "Contracts") to which Grizzly or any of its Subsidiaries
is a party or by which Grizzly or any of its Subsidiaries or any of their
respective assets or properties is bound, excluding from the foregoing clauses
(x) and (y) conflicts, violations, breaches, defaults, terminations,
modifications, accelerations and creations and impositions of Liens which,
individually or in the aggregate, could not be reasonably expected to have a
material adverse effect on Grizzly and its Subsidiaries taken as a whole or on
the ability of Grizzly to consummate the transactions contemplated by this
Agreement.
(b) Except (i) for the filing of a premerger notification report by Grizzly
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended,
and the rules and regulations thereunder (the "HSR Act"), (ii) for the filing
of the Proxy Statement (as defined in Section 3.09) and the Registration
Statement (as defined in Section 4.09) with the Securities and Exchange
Commission (the "SEC") pursuant to the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (the "Exchange Act"), and
the Securities Act of 1933, as amended, and the rules and regulations
thereunder (the "Securities Act"), the declaration of the effectiveness of the
Registration Statement by the SEC and filings with various state securities
authorities that are required in connection with the transactions contemplated
by this Agreement, (iii) for the filing of the Certificate of Merger and other
appropriate merger documents required by the MBCL with the Secretary of State
and appropriate documents with the relevant authorities of other states in
which the Constituent Corporations are qualified to do business, (iv) the
filing(s) as may be required by the Investment Canada Act and/or the
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Competition Act (Canada) and (v) as disclosed in Section 3.04 of the Grizzly
Disclosure Letter, no consent, approval or action of, filing with or notice to
any Governmental or Regulatory Authority or other public or private third
party is necessary or required under any of the terms, conditions or
provisions of any law or order of any Governmental or Regulatory Authority or
any Contract to which Grizzly or any of its Subsidiaries is a party or by
which Grizzly or any of its Subsidiaries or any of their respective assets or
properties is bound for the execution and delivery of this Agreement by
Grizzly, the performance by Grizzly of its obligations hereunder or the
consummation by Grizzly of the transactions contemplated hereby, other than
such consents, approvals, actions, filings and notices which the failure to
make or obtain, as the case may be, individually or in the aggregate, could
not be reasonably expected to have a material adverse effect on Grizzly and
its Subsidiaries taken as a whole or on the ability of Grizzly to consummate
the transactions contemplated by this Agreement.
3.05 Reports and Financial Statements. Grizzly has made available to Lynx
prior to the execution of this Agreement a true and complete copy of each
form, report, schedule, registration statement, definitive proxy statement and
other document (together with all amendments thereof and supplements thereto)
filed by Grizzly or any of its Subsidiaries with the SEC since January 1, 1993
(as such documents have since the time of their filing been amended or
supplemented, the "Grizzly Reports"), which are all the documents (other than
preliminary material) that Grizzly and its Subsidiaries were required to file
with the SEC since such date. As of their respective dates, the Grizzly
Reports (i) complied as to form in all material respects with the requirements
of the Securities Act or the Exchange Act, as the case may be, and (ii) did
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The audited consolidated financial statements and unaudited
interim consolidated financial statements (including, in each case, the notes,
if any, thereto) included in the Grizzly Reports (the "Grizzly Financial
Statements") complied as to form in all material respects with the published
rules and regulations of the SEC with respect thereto, were prepared in
accordance with generally accepted accounting principles in the United States
applied on a consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto and except with respect to unaudited
statements as permitted by Form 10-Q of the SEC) and fairly present (subject,
in the case of the unaudited interim financial statements, to normal,
recurring year-end audit adjustments (which are not expected to be,
individually or in the aggregate, materially adverse to Grizzly and its
Subsidiaries taken as a whole)) the consolidated financial position of Grizzly
and its consolidated subsidiaries as at the respective dates thereof and the
consolidated results of their operations and cash flows for the respective
periods then ended. Except as set forth in Section 3.05 of the Grizzly
Disclosure Letter, each Subsidiary of Grizzly is treated as a consolidated
subsidiary of Grizzly in the Grizzly Financial Statements for all periods
covered thereby.
3.06 Absence of Certain Changes or Events. Except as disclosed in Grizzly
Reports filed prior to the date of this Agreement or in Section 3.06 of the
Grizzly Disclosure Letter, (a) since June 30, 1998 there has not been any
change, event or development (excluding stock market fluctuations, changes in
general economic conditions, or any change, event, or development having, or
that could reasonably be expected to have, individually or in the aggregate, a
material adverse effect on companies in the industries in which Grizzly
operates generally) having, or that could be reasonably expected to have,
individually or in the aggregate, a material adverse effect on Grizzly and its
Subsidiaries taken as a whole, and (b) between such date and the date hereof
(i) Grizzly and its Subsidiaries have conducted their respective businesses
only in the ordinary course consistent with past practice and (ii) neither
Grizzly nor any of its Subsidiaries has taken any action which, if taken after
the date hereof, would constitute a breach of any provision of clause (ii) of
Section 5.01(b).
3.07 Absence of Undisclosed Liabilities. Except for matters reflected or
reserved against in the consolidated balance sheet of Grizzly and its
consolidated subsidiaries dated June 30, 1998 included in the Grizzly
Financial Statements or as disclosed in Section 3.07 of the Grizzly Disclosure
Letter, neither Grizzly nor any of its Subsidiaries had at such date, or has
incurred since that date, any liabilities or obligations (whether absolute,
accrued, contingent, fixed or otherwise, or whether due or to become due) of
any nature that would be required by generally accepted accounting principles
to be reflected on a consolidated balance sheet of Grizzly and its
consolidated subsidiaries (including the notes thereto), except liabilities or
obligations (i) which were
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incurred in the ordinary course of business consistent with past practice or
(ii) which have not been, and could not be reasonably expected to be,
individually or in the aggregate, materially adverse to Grizzly and its
Subsidiaries taken as a whole.
3.08 Legal Proceedings. Except as disclosed in the Grizzly Reports filed
prior to the date of this Agreement or in Section 3.08 of the Grizzly
Disclosure Letter, (i) there are no actions, suits, arbitrations or
proceedings pending or, to the knowledge of Grizzly, threatened against,
relating to or affecting, nor to the knowledge of Grizzly are there any
Governmental or Regulatory Authority investigations or audits pending or
threatened against, relating to or affecting, Grizzly or any of its
Subsidiaries or any of their respective assets and properties which,
individually or in the aggregate, could be reasonably expected to have a
material adverse effect on Grizzly and its Subsidiaries taken as a whole or on
the ability of Grizzly to consummate the transactions contemplated by this
Agreement, and (ii) neither Grizzly nor any of its Subsidiaries is subject to
any order of any Governmental or Regulatory Authority which, individually or
in the aggregate, is having or could be reasonably expected to have a material
adverse effect on Grizzly and its Subsidiaries taken as a whole or on the
ability of Grizzly to consummate the transactions contemplated by this
Agreement.
3.09 Information Supplied. The joint proxy statement relating to the
Shareholders' Meetings (as defined in Section 6.03(b)), as amended or
supplemented from time to time (as so amended and supplemented, the "Proxy
Statement"), and any other documents to be filed by Grizzly with the SEC, The
Toronto Stock Exchange or any other Governmental or Regulatory Authority in
connection with the Merger and the other transactions contemplated hereby will
(in the case of the Proxy Statement and any such other documents filed with
the SEC under the Exchange Act or the Securities Act) comply as to form in all
material respects with the requirements of the Exchange Act and the Securities
Act, respectively, and will not, on the date of its filing or, in the case of
the Proxy Statement, at the date it is mailed to shareholders of Grizzly and
of Lynx and at the times of the Shareholders' Meetings, 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, except that no
representation is made by Grizzly with respect to information supplied in
writing by or on behalf of Lynx or Sub expressly for inclusion therein and
information incorporated by reference therein from documents filed by Lynx or
any of its Subsidiaries with the SEC.
3.10 Compliance with Laws and Orders. Grizzly and its Subsidiaries hold all
permits, licenses, variances, exemptions, orders and approvals of all
Governmental and Regulatory Authorities necessary for the lawful conduct of
their respective businesses as presently conducted (the "Grizzly Permits"),
except for failures to hold such permits, licenses, variances, exemptions,
orders and approvals which, individually or in the aggregate, are not having
and could not be reasonably expected to have a material adverse effect on
Grizzly and its Subsidiaries taken as a whole. Grizzly and its Subsidiaries
are in compliance with the terms of the Grizzly Permits, except failures so to
comply which, individually or in the aggregate, are not having and could not
be reasonably expected to have a material adverse effect on Grizzly and its
Subsidiaries taken as a whole. Except as disclosed in the Grizzly Reports
filed prior to the date of this Agreement, Grizzly and its Subsidiaries are
not in violation of or default under any law or order of any Governmental or
Regulatory Authority, except for such violations or defaults which,
individually or in the aggregate, are not having and could not be reasonably
expected to have a material adverse effect on Grizzly and its Subsidiaries
taken as a whole.
3.11 Compliance with Agreements; Certain Agreements. (a) Except as disclosed
in the Grizzly Reports filed prior to the date of this Agreement, neither
Grizzly nor any of its Subsidiaries nor, to the knowledge of Grizzly, any
other party thereto is in breach or violation of, or in default in the
performance or observance of any term or provision of, and no event has
occurred which, with notice or lapse of time or both, could be reasonably
expected to result in a default under, (i) the certificates or articles of
incorporation or bylaws (or other comparable charter documents) of Grizzly or
any of its Subsidiaries or (ii) any Contract to which Grizzly or any of its
Subsidiaries is a party or by which Grizzly or any of its Subsidiaries or any
of their respective assets or properties is bound, except in the case of
clause (ii) for breaches, violations and defaults which, individually or in
the aggregate, are not having and could not be reasonably expected to have a
material adverse effect on Grizzly and its Subsidiaries taken as a whole.
Except for this Agreement and those agreements and other documents filed
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as exhibits to the Grizzly Reports or set forth in Section 3.11 of the Grizzly
Disclosure Letter, as of the date of this Agreement, neither Grizzly nor any
of its Subsidiaries is a party to or bound by (i) any "material contract"
within the meaning of item 601(b)(10) of the SEC's Regulation S-K or (ii) any
non-competition agreement or other agreement or arrangement that materially
restricts it or any of its Subsidiaries from competing in any line of
business.
(b) Except as disclosed in Section 3.11 of the Grizzly Disclosure Letter or
in the Grizzly Reports filed prior to the date of this Agreement or as
provided for in this Agreement, as of the date hereof, neither Grizzly nor any
of its Subsidiaries is a party to any oral or written (i) consulting agreement
not terminable on 30 days' or less notice involving the payment of more than
U.S. $100,000 per annum in the aggregate for all such agreements, (ii) union
or collective bargaining agreement which covers any employees, (iii) agreement
with any executive officer or other employee of Grizzly or any of its
Subsidiaries the benefits of which are contingent or vest, or the terms of
which are materially altered, upon the occurrence of a transaction involving
Grizzly or any of its Subsidiaries of the nature contemplated by this
Agreement, (iv) agreement with respect to any executive officer or other
employee of Grizzly or any of its Subsidiaries providing any term of
employment or compensation guarantee or (v) agreement or plan, including any
stock option, stock appreciation right, restricted stock or stock purchase
plan, any of the benefits of which will be increased, or the vesting of the
benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement.
3.12 Taxes. (a) Each of Grizzly and its Subsidiaries has filed all material
tax returns and reports required to be filed by it, or requests for extensions
to file such returns or reports have been timely filed or granted and have not
expired, and all tax returns and reports are complete and accurate in all
respects, except to the extent that such failures to file, have extensions
granted that remain in effect or be complete and accurate in all respects, as
applicable, individually or in the aggregate, would not have a material
adverse effect on Grizzly and its Subsidiaries taken as a whole. Grizzly and
each of its Subsidiaries has paid (or Grizzly has paid on its behalf) all
taxes shown as due on such tax returns and reports. The most recent financial
statements contained in the Grizzly Reports reflect an adequate reserve for
all taxes payable by Grizzly and its Subsidiaries for all taxable periods and
portions thereof accrued through the date of such financial statements, and no
deficiencies for any taxes have been proposed, asserted or assessed against
Grizzly or any of its Subsidiaries that are not adequately reserved for,
except for inadequately reserved taxes and inadequately reserved deficiencies
that would not, individually or in the aggregate, have a material adverse
effect on Grizzly and its Subsidiaries taken as a whole. No requests for
waivers of the time to assess any taxes against Grizzly or any of its
Subsidiaries have been granted or are pending, except for requests with
respect to such taxes that have been adequately reserved for in the most
recent financial statements contained in the Grizzly Reports, or, to the
extent not adequately reserved, the assessment of which would not,
individually or in the aggregate, have a material adverse effect on Grizzly
and its Subsidiaries taken as a whole.
(b) To the best knowledge of Grizzly, there are no liens for material
amounts of taxes on the assets of Grizzly or any of its Subsidiaries except
for statutory liens for current taxes not yet due and payable.
(c) As used in this Section 3.12 and in Section 4.12, "taxes" shall include
all federal, provincial, state, local and foreign income, capital, franchise,
property, sales, use, goods and services, excise, land transfer, workers
compensation, employment insurance, workers health and other taxes, including
obligations for taxes and other amounts required to be withheld from payments
due or made to any other person (including employees and non-resident persons)
and any interest, penalties or additions to tax.
3.13 Employee Benefit Plans; ERISA. (a) Except as described in the Grizzly
Reports filed prior to the date of this Agreement or as would not have a
material adverse effect on Grizzly and its Subsidiaries taken as a whole, (i)
all Grizzly Employee Benefit Plans (as defined below) are in compliance with
all applicable requirements of law, including ERISA and the Internal Revenue
Code of 1986, as amended (the "Code"), and (ii) neither Grizzly nor any of its
Subsidiaries has any liabilities or obligations with respect to any such
Grizzly Employee Benefit
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Plans, whether accrued, contingent or otherwise, nor to the knowledge of
Grizzly are any such liabilities or obligations expected to be incurred. The
execution of, and performance of the transactions contemplated in, this
Agreement will not (either alone or upon the occurrence of any additional or
subsequent events) constitute an event under any Grizzly Employee Benefit Plan
that will or may result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting, distribution,
increase in benefits or obligation to fund benefits with respect to any
employee. The only severance agreements or severance policies applicable to
Grizzly or any of its Subsidiaries are the agreements and policies
specifically referred to in Section 3.13 of the Grizzly Disclosure Letter. The
last date on which stock options were granted to any officer or director of
Grizzly was May 15, 1998. Except as set forth in Section 3.13 of the Grizzly
Disclosure Letter, Grizzly has caused the executive party to all existing
executive retention agreements to waive application of such agreement to the
Merger, and copies of such waivers have been furnished to Lynx. The Board of
Directors of Grizzly has amended all Grizzly's deferred compensation
agreements so that the Merger will not result in the maturity thereof.
(b) As used herein:
(i) "Grizzly Employee Benefit Plan" means any Plan entered into,
established, maintained, sponsored, contributed to or required to be
contributed to by Grizzly or any of its Subsidiaries for the benefit of the
current or former employees or directors of Grizzly or any of its
Subsidiaries and existing on the date of this Agreement or at any time
subsequent thereto and on or prior to the Effective Time and, in the case
of a Plan which is subject to Part 3 of Title I of the Employee Retirement
Income Security Act of 1974, as amended, and the rules and regulations
thereunder ("ERISA"), Section 412 of the Code or Title IV of ERISA, at any
time during the five-year period preceding the date of this Agreement; and
(ii) "Plan" means any employment, bonus, incentive compensation, deferred
compensation, pension, profit sharing, retirement, stock purchase, stock
option, stock ownership, stock appreciation rights, phantom stock, leave of
absence, layoff, vacation, day or dependent care, legal services,
cafeteria, life, health, medical, accident, disability, workmen's
compensation or other insurance, severance, separation, termination, change
of control or other benefit plan, agreement, practice, policy, program or
arrangement of any kind, whether written or oral, including, but not
limited to any "employee benefit plan" within the meaning of Section 3(3)
of ERISA.
3.14 Labor Matters. Except as disclosed in the Grizzly Reports filed prior
to the date of this Agreement or in Section 3.14 of the Grizzly Disclosure
Letter, there are no material controversies pending or, to the knowledge of
Grizzly, threatened between Grizzly or any of its Subsidiaries and any
representatives of its employees, except as would not, individually or in the
aggregate, have a material adverse effect on Grizzly and its Subsidiaries
taken as a whole, and, to the knowledge of Grizzly, there are no material
organizational efforts presently being made involving any of the now
unorganized employees of Grizzly or any of its Subsidiaries. Since January 1,
1993, there has been no work stoppage, strike or other concerted action by
employees of Grizzly or any of its Subsidiaries except as would not,
individually or in the aggregate, have a material adverse effect on Grizzly
and its Subsidiaries taken as a whole.
3.15 Environmental Matters. (a) Each of Grizzly and its Subsidiaries has
obtained all licenses, permits, authorizations, approvals and consents from
Governmental or Regulatory Authorities which are required under any applicable
Environmental Law (as defined below) in respect of its business or operations
("Environmental Permits"), except for such failures to have Environmental
Permits which, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on Grizzly and its Subsidiaries
taken as a whole. Each of such Environmental Permits is in full force and
effect and each of Grizzly and its Subsidiaries is in compliance with the
terms and conditions of all such Environmental Permits and with any applicable
Environmental Law, except for such failures to be in compliance which,
individually or in the aggregate, could not reasonably be expected to have a
material adverse effect on Grizzly and its Subsidiaries taken as a whole.
(b) To the knowledge of Grizzly, no site or facility now or previously
owned, operated or leased by Grizzly or any of its Subsidiaries is listed or
proposed for listing on the National Priorities List promulgated pursuant to
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the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, and the rules and regulations thereunder ("CERCLA"), or on
any similar state or local list of sites requiring investigation or clean-up.
(c) No Liens have arisen under or pursuant to any Environmental Law on any
site or facility owned, operated or leased by Grizzly or any of its
Subsidiaries, other than any such real property not individually or in the
aggregate material to Grizzly and its Subsidiaries taken as a whole, and no
action of any Governmental or Regulatory Authority has been taken or, to the
knowledge of Grizzly, is in process which could subject any of such properties
to such Liens, and neither Grizzly nor any of its Subsidiaries would be
required to place any notice or restriction relating to the presence of
Hazardous Materials at any such site or facility owned by it in any deed to
the real property on which such site or facility is located.
(d) There have been no environmental investigations, studies, audits, tests,
reviews or other analyses conducted by, or which are in the possession of,
Grizzly or any of its Subsidiaries in relation to any site or facility now or
previously owned, operated or leased by Grizzly or any of its Subsidiaries
which have not been delivered to Lynx prior to the execution of this
Agreement.
(e) As used herein in this Section 3.15 and in Section 4.15:
(i) "Environmental Law" means any law or order of any Governmental or
Regulatory Authority relating to the regulation or protection of human
health, safety or the environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes into the environment (including,
without limitation, ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes; and
(ii) "Hazardous Material" means (A) any petroleum or petroleum products,
flammable explosives, radioactive materials, asbestos in any form that is
or could become friable, urea formaldehyde foam insulation and transformers
or other equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls (PCBs); (B) any chemicals or other materials or
substances which are now or hereafter become defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous wastes,"
"toxic substances," "toxic pollutants" or words of similar import under any
Environmental Law; and (C) any other chemical or other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated by any Governmental or Regulatory Authority under any
Environmental Law.
3.16 Intellectual Property Rights. Except as set forth in Section 3.16 of
the Grizzly Disclosure Letter, (a) Grizzly and its Subsidiaries have all
right, title and interest in, or a valid and binding license to use, all
Intellectual Property Rights (as defined below) individually or in the
aggregate material to the conduct of the businesses of Grizzly and its
Subsidiaries taken as a whole. Neither Grizzly nor any Subsidiary of Grizzly
is in default (or with the giving of notice or lapse of time or both, would be
in default) under any license to use such Intellectual Property, such
Intellectual Property Rights are not being infringed by any third party, and
neither Grizzly nor any Subsidiary of Grizzly is infringing any Intellectual
Property Rights of any third party, except for such defaults and infringements
which, individually or in the aggregate, are not having and could not be
reasonably expected to have a material adverse effect on Grizzly and its
Subsidiaries taken as a whole. For purposes of this Agreement, "Intellectual
Property Rights" means patents and patent rights, trademarks and trademark
rights, trade names and trade name rights, service marks and service xxxx
rights, service names and service name rights, copyrights and copyright rights
and other proprietary intellectual property rights and all pending
applications for and registrations of any of the foregoing.
(b) Section 3.16 of the Grizzly Disclosure Letter contains (or will be
supplemented to prior to Closing to contain) an accurate and complete list as
of the date of this Agreement of all licenses and agreements under
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which Grizzly and its Subsidiaries are licensed to use third party
Intellectual Property Rights which are material to the business of Grizzly as
currently conducted (the "Grizzly Intellectual Property Rights").
(c) Except as set forth in Section 3.16 of the Grizzly Disclosure Letter
(including as it may be supplemented prior to Closing), to the knowledge of
Grizzly's chief executive and chief financial officers (acting in their
corporate and not personal capacities), Grizzly and its Subsidiaries are not
required to pay any royalties, fees or other amounts to any Person in
connection with the use or exploitation of the Grizzly Intellectual Property
Rights or the development, manufacture or commercial exploitation of any
products of Grizzly or its Subsidiaries in each such case in excess of
$250,000 per annum.
(d) Section 3.16 of the Grizzly Disclosure Letter contains an accurate and
complete list as of the date of this Agreement of all registered patents,
registered trademarks, trade names, registered service marks and registered
copyrights (in each case that are currently in use), as well as all
applications for any and all of the foregoing, included in the Grizzly
Intellectual Property Rights (excluding third party Intellectual Property
Rights), including the jurisdiction in which each such Grizzly Intellectual
Property Rights has been issued or registered or in which any such application
for such issuance, approval or registration has been filed. All registered
patents, registered trademarks, trade names, registered service marks and
registered copyrights owned by Grizzly or any of its Subsidiaries and which
are material to the conduct of their business as currently conducted are valid
and enforceable.
(e) Section 3.16 of Grizzly Disclosure Letter contains an accurate and
complete list as of the date of this Agreement of all licenses and sublicenses
under which Grizzly or any of its Subsidiaries has granted the right to
manufacture, reproduce, market or exploit any material products of Grizzly or
any Subsidiaries or any material adaptation, derivative or reformulation based
on any such product or any portion thereof.
(f) Neither Grizzly nor any of its Subsidiaries is or will be as a result of
the execution and delivery of this Agreement or the performance of its
obligations under this Agreement, in breach of any license, sublicense,
assignment or other agreement to which it is a party giving it a license to
material third party Intellectual Property Rights (the "IP Licenses"). Neither
the execution or delivery of this Agreement nor the consummation of the
transactions contemplated hereby will cause or will result in a material
change to the terms of any material license, sublicense or other similar
agreement.
(g) Except as set forth in Section 3.16 of the Grizzly Disclosure Letter,
neither Grizzly nor its Subsidiaries (A) has been sued in any suit, action or
proceeding which involves a claim of infringement or violation of any
Intellectual Property Right of any third party or (B) has received any written
claim or allegation that the manufacturing, importation, marketing, licensing,
sale, offer for sale, or use of any of its products infringes Intellectual
Property Rights of any third party.
(h) Grizzly and its Subsidiaries have taken all reasonable steps to protect
and preserve the confidential information, trade secrets and know-how of
Grizzly and its Subsidiaries, including appropriate non-disclosure agreements
with all employees and third persons having access to any confidential
information, trade secrets or know-how of Grizzly and its Subsidiaries.
(i) Neither Grizzly nor any of its Subsidiaries has made any written claim
or allegation that any third person is or has infringed, misappropriated,
breached or violated the rights of Grizzly or its Subsidiaries in any of the
Grizzly Intellectual Property Rights which are material to the business of
Grizzly as currently conducted.
(j) Except as set forth in Section 3.16 of the Grizzly Disclosure Letter,
all internal computer systems that are material to the business, finances or
operations of Grizzly ("Material Grizzly Systems") are (i) able to receive,
record, store, process, calculate, manipulate and output dates from and after
January 1, 2000, time periods that include January 1, 2000 and information
that is dependent on or relates to such dates or time periods,
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in the same manner and with the same accuracy, functionality, data integrity
and performance as when dates or time periods prior to January 1, 2000 are
involved and (ii) able to store and output date information in a manner that
is unambiguous as to century (collectively with clause (i) above, "Year 2000
Compliant") or can be freely modified to be made Year 2000 Compliant without
breaching any third party license agreements or otherwise infringing any
intellectual property rights of any third party. All Material Systems that are
not Year 2000 Compliant as of the date of this Agreement are set forth in
Section 3.16 of the Grizzly Disclosure Letter.
3.17 Vote Required. Assuming the accuracy of the representation and warranty
contained in Section 4.19, the affirmative vote of the holders of record of at
least a majority of the outstanding shares of Grizzly Common Stock with
respect to the adoption of this Agreement is the only vote of the holders of
any class or series of the capital stock of Grizzly required to adopt this
Agreement and to approve the Merger and the other transactions contemplated
hereby and by the Stock Option Agreements.
3.18 Opinion of Financial Advisor. Grizzly has received the opinion of
Xxxxxxx & Company, Inc., dated the date hereof, to the effect that, as of the
date hereof, the consideration to be received in the Merger by the
shareholders of Grizzly is fair from a financial point of view to the
shareholders of Grizzly, and a true and complete copy of such opinion has been
delivered to Lynx prior to the execution of this Agreement.
3.19 Grizzly Rights Agreement. As of the date hereof and after giving effect
to the execution and delivery of this Agreement and the Stock Option
Agreements, each Grizzly Right is represented by the certificate representing
the associated share of Grizzly Common Stock and is not exercisable or
transferable apart from the associated share of Grizzly Common Stock, and
Grizzly has (i) taken all necessary actions so that the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
and by the Stock Option Agreements will not result in a "Distribution Date", a
"Triggering Event" or a "Business Combination" (as defined in the Grizzly
Rights Agreement) and (ii) amended the Grizzly Rights Agreement to (x) render
it inapplicable to this Agreement, the Merger and the other transactions
contemplated hereby and (y) ensure that the Grizzly Rights Agreement may not
be further amended by Grizzly without the prior written consent of Lynx in its
sole discretion.
3.20 Ownership of Lynx Common Stock. Neither Grizzly nor any of its
Subsidiaries or other affiliates beneficially owns any shares of Lynx Common
Stock.
3.21 Chapter 110D of Mass. Xxx. Laws Not Applicable. Grizzly has taken all
necessary actions so that the provisions of Chapter 110D of Mass. Xxx. Laws
will not, before the termination of this Agreement, apply to this Agreement,
the Stock Option Agreements, the Merger or the other transactions contemplated
hereby or thereby.
4. ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF LYNX AND SUB
Lynx and Sub represent and warrant to Grizzly as follows:
4.01 Organization and Qualification. Each of Lynx and its Subsidiaries
(including Sub) is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has full
corporate power and authority to conduct its business as and to the extent now
conducted and to own, use and lease its assets and properties, except for such
failures to be so incorporated, existing and in good standing or to have such
power and authority which, individually or in the aggregate, are not having
and could not be reasonably expected to have a material adverse effect on Lynx
and its Subsidiaries taken as a whole. Sub was formed solely for the purpose
of engaging in the transactions contemplated by this Agreement, has engaged in
no other business activities and has conducted its operations only as
contemplated hereby. Each of Lynx and its Subsidiaries is duly qualified,
licensed or admitted to do business and is in good standing in each
jurisdiction in which the ownership, use or leasing of its assets and
properties, or the conduct or nature of its business, makes
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such qualification, licensing or admission necessary, except for such failures
to be so qualified, licensed or admitted and in good standing which,
individually or in the aggregate, are not having and could not be reasonably
expected to have a material adverse effect on Lynx and its Subsidiaries taken
as a whole. Section 4.01 of the letter dated the date hereof and delivered by
Lynx and Sub to Grizzly concurrently with the execution and delivery of this
Agreement (the "Lynx Disclosure Letter") sets forth (i) the name and
jurisdiction of incorporation of each Subsidiary of Lynx, (ii) its authorized
capital stock, (iii) the number of issued and outstanding shares of its
capital stock and (iv) the record owners of such shares. Except for interests
in the Subsidiaries of Lynx and as disclosed in Section 4.01 of the Lynx
Disclosure Letter, Lynx does not directly or indirectly own any equity or
similar interest in, or any interest convertible into or exchangeable or
exercisable for, any equity or similar interest in, any corporation,
partnership, limited liability company, joint venture or other business
association or entity (other than (i) non-controlling investments in the
ordinary course of business and corporate partnering, development, cooperative
marketing and similar undertakings and arrangements entered into in the
ordinary course of business and (ii) other investments of less than U.S.
$100,000). Lynx has previously made available to Grizzly correct and complete
copies of the certificate or articles of incorporation and bylaws (or other
comparable charter documents) of Lynx.
4.02 Capital Stock. (a) The authorized capital stock of Lynx consists solely
of an unlimited number of shares of Lynx Common Stock. As of the close of
business on October 26, 1998, 17,043,501 shares of Lynx Common Stock were
issued and outstanding, and 2,121,650 shares were reserved for issuance
pursuant to Options of which 1,586,865 were granted and are outstanding. Since
such date, there has been no change in the number of issued and outstanding
shares of Lynx Common Stock or shares of Lynx Common Stock held in treasury or
(other than pursuant to the Stock Option Agreements) reserved for issuance
since such date. All of the issued and outstanding shares of Lynx Common Stock
are, and all shares reserved for issuance will be, upon issuance in accordance
with the terms specified in the instruments or agreements pursuant to which
they are issuable, duly authorized, validly issued, fully paid and
nonassessable. Except pursuant to this Agreement and except as set forth in
Section 4.02 of the Lynx Disclosure Letter, there are no outstanding Options
obligating Lynx or any of its Subsidiaries to issue or sell any shares of
capital stock of Lynx or to grant, extend or enter into any Option with
respect thereto.
(b) Except as disclosed in Section 4.02 of the Lynx Disclosure Letter, all
of the outstanding shares of capital stock of each Subsidiary of Lynx are duly
authorized, validly issued, fully paid and nonassessable and are owned,
beneficially and of record, by Lynx or a Subsidiary wholly owned, directly or
indirectly, by Lynx, free and clear of any Liens. Except as disclosed in
Section 4.02 of the Lynx Disclosure Letter, there are no (i) outstanding
Options obligating Lynx or any of its Subsidiaries to issue or sell any shares
of capital stock of any Subsidiary of Lynx or to grant, extend or enter into
any such Option or (ii) voting trusts, proxies or other commitments,
understandings, restrictions or arrangements in favor of any person other than
Lynx or a Subsidiary wholly owned, directly or indirectly, by Lynx with
respect to the voting of or the right to participate in dividends or other
earnings on any capital stock of any Subsidiary of Lynx.
(c) Except as disclosed in Section 4.02 of the Lynx Disclosure Letter, there
are no outstanding contractual obligations of Lynx or any Subsidiary of Lynx
to repurchase, redeem or otherwise acquire any shares of Lynx Common Stock or
any capital stock of any Subsidiary of Lynx or to provide funds to, or make
any investment (in the form of a loan, capital contribution or otherwise) in,
any Subsidiary of Lynx or any other person.
4.03 Authority Relative to This Agreement. Each of Lynx and Sub has full
corporate power and authority to enter into this Agreement and, subject (in
the case of this Agreement) to obtaining the Lynx Shareholders' Approval (as
defined in Section 6.03(a)), to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by each of Lynx and Sub and the consummation by
each of Lynx and Sub of the transactions contemplated hereby have been duly
and validly approved by its Board of Directors and by Lynx in its capacity as
the sole shareholder of Sub, the Board of Directors of Lynx has adopted a
resolution declaring the advisability of the Lynx Shareholders' Proposals (as
defined in Section 6.03(a)) and directed that the Lynx Shareholders' Proposals
be submitted for consideration by the shareholders of Lynx in accordance with
applicable laws, and no other corporate proceedings on the part of
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either of Lynx or Sub or their shareholders are necessary to authorize the
execution, delivery and performance of this Agreement by Lynx and Sub and the
consummation by Lynx and Sub of the transactions contemplated hereby, other
than obtaining the Lynx Shareholders' Approval. This Agreement has been duly
and validly executed and delivered by each of Lynx and Sub and constitutes a
legal, valid and binding obligation of each of Lynx and Sub enforceable
against each of Lynx and Sub in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
4.04 Non-Contravention; Approvals and Consents. (a) The execution and
delivery of this Agreement by each of Lynx and Sub do not, and the performance
by each of Lynx and Sub of its obligations hereunder and the consummation of
the transactions contemplated hereby will not, conflict with, result in a
violation or breach of, constitute (with or without notice or lapse of time or
both) a default under, result in or give to any person any right of payment or
reimbursement, termination, cancellation, modification or acceleration of, or
result in the creation or imposition of any Lien upon any of the assets or
properties of Lynx or any of its Subsidiaries under, any of the terms,
conditions or provisions of (i) the certificates or articles of incorporation
or bylaws (or other comparable charter documents) of Lynx or any of its
Subsidiaries, or (ii) subject to the obtaining of the Lynx Shareholders'
Approval and the taking of the actions described in paragraph (b) of this
Section, (x) any laws or orders of any Governmental or Regulatory Authority
applicable to Lynx or any of its Subsidiaries or any of their respective
assets or properties, or (y) any Contracts to which Lynx or any of its
Subsidiaries is a party or by which Lynx or any of its Subsidiaries or any of
their respective assets or properties is bound, excluding from the foregoing
clauses (x) and (y) conflicts, violations, breaches, defaults, terminations,
modifications, accelerations and creations and impositions of Liens which,
individually or in the aggregate, could not be reasonably expected to have a
material adverse effect on Lynx and its Subsidiaries taken as a whole or on
the ability of Lynx and Sub to consummate the transactions contemplated by
this Agreement.
(b) Except (i) for the filing of a premerger notification report by Lynx
under the HSR Act, (ii) for the filing of the Registration Statement with the
SEC pursuant to the Exchange Act and the Securities Act, the declaration of
the effectiveness of the Registration Statement by the SEC and filings with
various state securities authorities that are required in connection with the
transactions contemplated by this Agreement, (iii) for the filing of the
Articles of Merger and other appropriate merger documents required by the MBCL
with the Secretary of State and appropriate documents with the relevant
authorities of other states in which the Constituent Corporations are
qualified to do business, (iv) as may be required under applicable
requirements of the Competition Act (Canada) and the Investment Canada Act,
(v) as may be required by the by-laws, rules, regulations or policies of The
Toronto Stock Exchange in respect of the Lynx Common Stock to be issued in the
Merger and upon the exercise of the Grizzly Options to be assumed by Lynx by
reason of the Merger and the listing of such Lynx Common Stock on such stock
exchanges, (vi) such filings as are required to be made and exemption rulings
or orders as are required to be obtained under the Ontario Business
Corporations Act or Business Corporations Act, c.B-9.1, Statutes of New
Brunswick, 1981, or under Canadian securities laws, and (vii) as disclosed in
Section 4.04 of the Lynx Disclosure Letter, no consent, approval or action of,
filing with or notice to any Governmental or Regulatory Authority or other
public or private third party is necessary or required under any of the terms,
conditions or provisions of any law or order of any Governmental or Regulatory
Authority or any Contract to which Lynx or any of its Subsidiaries is a party
or by which Lynx or any of its Subsidiaries or any of their respective assets
or properties is bound for the execution and delivery of this Agreement by
each of Lynx and Sub, the performance by each of Lynx and Sub of its
obligations hereunder or the consummation by Lynx of the transactions
contemplated hereby, other than such consents, approvals, actions, filings and
notices which the failure to make or obtain, as the case may be, individually
or in the aggregate, could not be reasonably expected to have a material
adverse effect on Lynx and its Subsidiaries taken as a whole or on the ability
of Lynx and Sub to consummate the transactions contemplated by this Agreement.
4.05 Reports and Financial Statements. Lynx has made available to Grizzly
prior to the execution of this Agreement a true and complete copy of each
form, report, schedule, registration statement, definitive proxy
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statement and other document (together with all amendments thereof and
supplements thereto) filed by Lynx or any of its Subsidiaries with Canadian
securities regulatory authorities and The Toronto Stock Exchange since January
1, 1993 (as such documents have since the time of their filing been amended or
supplemented, the "Lynx Reports"), which are all the documents (other than
preliminary material) that Lynx and its Subsidiaries were required to file
with Canadian securities regulatory authorities and The Toronto Stock Exchange
since such date. As of their respective dates, the Lynx Reports (i) complied
as to form in all material respects with the requirements of Canadian
securities laws and The Toronto Stock Exchange, and (ii) did not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
audited consolidated financial statements and unaudited interim consolidated
financial statements (including, in each case, the notes, if any, thereto)
included in the Lynx Reports (the "Lynx Financial Statements") complied as to
form in all material respects with the published rules and regulations of the
Canadian securities regulatory authorities with respect thereto, were prepared
in accordance with generally accepted accounting principles in Canada applied
on a consistent basis during the periods involved (except as may be indicated
therein or in the notes thereto and except with respect to unaudited
statements as permitted by Canadian securities laws) and fairly present
(subject, in the case of the unaudited interim financial statements, to
normal, recurring year-end audit adjustments (which are not expected to be,
individually or in the aggregate, materially adverse to Lynx and its
Subsidiaries taken as a whole)) the consolidated financial position of Lynx
and its consolidated subsidiaries as at the respective dates thereof and the
consolidated results of their operations and cash flows for the respective
periods then ended. Except as set forth in Section 4.05 of the Lynx Disclosure
Letter, each Subsidiary of Lynx is treated as a consolidated subsidiary of
Lynx in the Lynx Financial Statements for all periods covered thereby.
4.06 Absence of Certain Changes or Events. Except as disclosed in the Lynx
Reports filed prior to the date of this Agreement or in Section 4.06 of the
Lynx Disclosure Letter, (a) since June 30, 1998 there has not been any change,
event or development (excluding stock market fluctuations, changes in general
economic conditions, or any change, event or development having, or that could
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on companies in the industries in which Lynx operates
generally) having, or that could be reasonably expected to have, individually
or in the aggregate, a material adverse effect on Lynx and its Subsidiaries
taken as a whole, and (b) between such date and the date hereof (i) Lynx and
its Subsidiaries have conducted their respective businesses only in the
ordinary course consistent with past practice and (ii) neither Lynx nor any of
its Subsidiaries has taken any action which, if taken after the date hereof,
would constitute a breach of any provision of clause (ii) of Section 5.01(b).
4.07 Absence of Undisclosed Liabilities. Except for matters reflected or
reserved against in the consolidated balance sheet of Lynx and its
consolidated subsidiaries dated June 30, 1998 included in the Lynx Financial
Statements or as disclosed in Section 4.07 of the Lynx Disclosure Letter,
neither Lynx nor any of its Subsidiaries had at such date, or has incurred
since that date, any liabilities or obligations (whether absolute, accrued,
contingent, fixed or otherwise, or whether due or to become due) of any nature
that would be required by generally accepted accounting principles to be
reflected on a consolidated balance sheet of Lynx and its consolidated
subsidiaries (including the notes thereto), except liabilities or obligations
(i) which were incurred in the ordinary course of business consistent with
past practice or (ii) which have not been, and could not be reasonably
expected to be, individually or in the aggregate, materially adverse to Lynx
and its Subsidiaries taken as a whole.
4.08 Legal Proceedings. Except as disclosed in the Lynx Reports filed prior
to the date of this Agreement or in Section 4.08 of the Lynx Disclosure
Letter, (i) there are no actions, suits, arbitrations or proceedings pending
or, to the knowledge of Lynx, threatened against, relating to or affecting,
nor to the knowledge of Lynx are there any Governmental or Regulatory
Authority investigations or audits pending or threatened against, relating to
or affecting, Lynx or any of its Subsidiaries or any of their respective
assets and properties which, individually or in the aggregate, could be
reasonably expected to have a material adverse effect on Lynx and its
Subsidiaries taken as a whole or on the ability of Lynx and Sub to consummate
the transactions contemplated by this Agreement, and (ii) neither Lynx nor any
of its Subsidiaries is subject to any order of any Governmental or
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Regulatory Authority which, individually or in the aggregate, is having or
could be reasonably expected to have a material adverse effect on Lynx and its
Subsidiaries taken as a whole or on the ability of Lynx and Sub to consummate
the transactions contemplated by this Agreement.
4.09 Information Supplied. The registration statement on Form S-4 to be
filed with the SEC by Lynx in connection with the issuance of shares of Lynx
Common Stock in the Merger, as amended or supplemented from time to time (as
so amended and supplemented, the "Registration Statement"), and any other
documents to be filed by Lynx with the SEC, Canadian securities regulatory
authorities, The Toronto Stock Exchange or any other Governmental or
Regulatory Authority in connection with the Merger and the other transactions
contemplated hereby will (in the case of the Registration Statement and any
such other documents filed with the SEC under the Securities Act or the
Exchange Act, with Canadian securities regulatory authorities under Canadian
securities laws or with The Toronto Stock Exchange) comply as to form in all
material respects with the requirements of the Exchange Act, the Securities
Act or comparable Canadian laws, respectively, and will not, on the date of
its filing or, in the case of the Registration Statement, at the time it
becomes effective under the Securities Act, at the date the Proxy Statement is
mailed to shareholders of Grizzly and of Lynx and at the times of the
Shareholders' Meetings, 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, except that no representation is made by
Lynx or Sub with respect to information supplied in writing by or on behalf of
Grizzly expressly for inclusion therein and information incorporated by
reference therein from documents filed by Grizzly or any of its Subsidiaries
with the SEC, Canadian securities regulatory authorities or The Toronto
Securities Exchange.
4.10 Compliance with Laws and Orders. Lynx and its Subsidiaries hold all
permits, licenses, variances, exemptions, orders and approvals of all
Governmental and Regulatory Authorities necessary for the lawful conduct of
their respective businesses as presently conducted (the "Lynx Permits"),
except for failures to hold such permits, licenses, variances, exemptions,
orders and approvals which, individually or in the aggregate, are not having
and could not be reasonably expected to have a material adverse effect on Lynx
and its Subsidiaries taken as a whole. Lynx and its Subsidiaries are in
compliance with the terms of the Lynx Permits, except failures so to comply
which, individually or in the aggregate, are not having and could not be
reasonably expected to have a material adverse effect on Lynx and its
Subsidiaries taken as a whole. Except as disclosed in the Lynx Reports filed
prior to the date of this Agreement, Lynx and its Subsidiaries are not in
violation of or default under any law or order of any Governmental or
Regulatory Authority, except for such violations or defaults which,
individually or in the aggregate, are not having and could not be reasonably
expected to have a material adverse effect on Lynx and its Subsidiaries taken
as a whole.
4.11 Compliance with Agreements; Certain Agreements. (a) Except as disclosed
in the Lynx Reports filed prior to the date of this Agreement, neither Lynx
nor any of its Subsidiaries nor, to the knowledge of Lynx, any other party
thereto is in breach or violation of, or in default in the performance or
observance of any term or provision of, and no event has occurred which, with
notice or lapse of time or both, could be reasonably expected to result in a
default under, (i) the certificates or articles of incorporation or bylaws (or
other comparable charter documents) of Lynx or any of its Subsidiaries or (ii)
any Contract to which Lynx or any of its Subsidiaries is a party or by which
Lynx or any of its Subsidiaries or any of their respective assets or
properties is bound, except in the case of clause (ii) for breaches,
violations and defaults which, individually or in the aggregate, are not
having and could not be reasonably expected to have a material adverse effect
on Lynx and its Subsidiaries taken as a whole. Except for this Agreement and
those agreements and other documents filed as exhibits to the Lynx Reports or
set forth in Section 4.11 of the Lynx Disclosure Letter, as of the date of
this Agreement, neither Lynx nor any of its Subsidiaries is a party to or
bound by (i) any material contract or (ii) any non-competition agreement or
other agreement or arrangement that materially restricts it or any of its
Subsidiaries from competing in any line of business.
(b) Except as disclosed in Section 4.11 of the Lynx Disclosure Letter or
in the Lynx Reports filed prior to the date of this Agreement or as
provided for in this Agreement, as of the date hereof, neither Lynx nor any
of its Subsidiaries is a party to any oral or written (i) consulting
agreement not terminable on
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30 days' or less notice involving the payment of more than U.S. $100,000
per annum in the aggregate for all such agreements, (ii) union or
collective bargaining agreement which covers any employees, (iii) agreement
with any executive officer or other employee of Lynx or any of its
Subsidiaries the benefits of which are contingent or vest, or the terms of
which are materially altered, upon the occurrence of a transaction
involving Lynx or any of its Subsidiaries of the nature contemplated by
this Agreement, (iv) agreement with respect to any executive officer or
other employee of Lynx or any of its Subsidiaries providing any term of
employment or compensation guarantee or (v) agreement or plan, including
any stock option, stock appreciation right, restricted stock or stock
purchase plan, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of
any of the transactions contemplated by this Agreement or the value of any
of the benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement.
4.12 Taxes. (a) Each of Lynx and its Subsidiaries has filed all material tax
returns and reports required to be filed by it, or requests for extensions to
file such returns or reports have been timely filed or granted and have not
expired, except that Lynx and its Subsidiaries have not filed federal or state
income taxes in the United States for calendar year 1997, and all tax returns
and reports are complete and accurate in all respects, except to the extent
that such failures to file, have extensions granted that remain in effect or
be complete and accurate in all respects, as applicable, individually or in
the aggregate, would not have a material adverse effect on Lynx and its
Subsidiaries taken as a whole. Lynx and each of its Subsidiaries has paid (or
Lynx has paid on its behalf) all taxes shown as due on such tax returns and
reports. The most recent financial statements contained in the Lynx Reports
reflect an adequate reserve for all taxes payable by Lynx and its Subsidiaries
for all taxable periods and portions thereof accrued through the date of such
financial statements, and no deficiencies for any taxes have been proposed,
asserted or assessed against Lynx or any of its Subsidiaries that are not
adequately reserved for, except for inadequately reserved taxes and
inadequately reserved deficiencies that would not, individually or in the
aggregate, have a material adverse effect on Lynx and its Subsidiaries taken
as a whole. No waivers of the time to assess any taxes against Lynx or any of
its Subsidiaries have been given or filed or are pending, except for waivers
with respect to such taxes that have been adequately reserved for in the most
recent financial statements contained in the Lynx Reports, or, to the extent
not adequately reserved, the assessment of which would not, individually or in
the aggregate, have a material adverse effect on Lynx and its Subsidiaries
taken as a whole.
(b) To the best knowledge of Lynx, there are no liens for material amounts
of taxes on the assets of Lynx or any of its Subsidiaries except for statutory
liens for current taxes not yet due and payable.
4.13 Employee Benefit Plans; ERISA. (a) Except as described in the Lynx
Reports filed prior to the date of this Agreement or as would not have a
material adverse effect on Lynx and its Subsidiaries taken as a whole, (i) all
Lynx Employee Benefit Plans (as defined below) are in compliance with all
applicable requirements of law, including ERISA and the Code, and (ii) neither
Lynx nor any of its Subsidiaries has any liabilities or obligations with
respect to any such Lynx Employee Benefit Plans, whether accrued, contingent
or otherwise, nor to the knowledge of Lynx are any such liabilities or
obligations expected to be incurred. The execution of, and performance of the
transactions contemplated in, this Agreement will not (either alone or upon
the occurrence of any additional or subsequent events) constitute an event
under any Lynx Employee Benefit Plan that will or may result in any payment
(whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to
fund benefits with respect to any employee. The only severance agreements or
severance policies applicable to Lynx or any of its Subsidiaries are the
agreements and policies specifically referred to in Section 4.13 of the Lynx
Disclosure Letter. The last date on which stock options were granted to any
officer or director of Lynx was May 12, 1998.
(b) As used herein "Lynx Employee Benefit Plan" means any Plan entered into,
established, maintained, sponsored, contributed to or required to be
contributed to by Lynx or any of its Subsidiaries for the benefit of the
current or former employees or directors of Lynx or any of its Subsidiaries
and existing on the date of this Agreement or at any time subsequent thereto
and on or prior to the Effective Time and, in the case of a Plan which is
subject to Part 3 of Title I of ERISA, Section 412 of the Code or Title IV of
ERISA, at any time during the five-year period preceding the date of this
Agreement.
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4.14 Labor Matters. Except as disclosed in the Lynx Reports filed prior to
the date of this Agreement or in Section 4.14 of the Lynx Disclosure Letter,
there are no material controversies pending or, to the knowledge of Lynx,
threatened between Lynx or any of its Subsidiaries and any representatives of
its employees, except as would not, individually or in the aggregate, have a
material adverse effect on Lynx and its Subsidiaries taken as a whole, and, to
the knowledge of Lynx, there are no material organizational efforts presently
being made involving any of the now unorganized employees of Lynx or any of
its Subsidiaries. Since January 1, 1993, there has been no work stoppage,
strike or other concerted action by employees of Lynx or any of its
Subsidiaries except as would not, individually or in the aggregate, have a
material adverse effect on Lynx and its Subsidiaries taken as a whole.
4.15 Environmental Matters. (a) Each of Lynx and its Subsidiaries has
obtained all Environmental Permits which are required under any applicable
Environmental Law in respect of its business or operations, except for such
failures to have Environmental Permits which, individually or in the
aggregate, could not reasonably be expected to have a material adverse effect
on Lynx and its Subsidiaries taken as a whole. Each of such Environmental
Permits is in full force and effect and each of Lynx and its Subsidiaries is
in compliance with the terms and conditions of all such Environmental Permits
and with any applicable Environmental Law, except for such failures to be in
compliance which, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on Lynx and its Subsidiaries taken
as a whole.
(b) To the knowledge of Lynx, no site or facility now or previously owned,
operated or leased by Lynx or any of its Subsidiaries is listed or proposed
for listing on the National Priorities List promulgated pursuant to CERCLA or
on any similar state, Canadian federal, provincial or local list of sites
requiring investigation or clean-up.
(c) No Liens have arisen under or pursuant to any Environmental Law on any
site or facility owned, operated or leased by Lynx or any of its Subsidiaries,
other than any such real property not individually or in the aggregate
material to Lynx and its Subsidiaries taken as a whole, and no action of any
Governmental or Regulatory Authority has been taken or, to the knowledge of
Lynx, is in process which could subject any of such properties to such Liens,
and neither Lynx nor any of its Subsidiaries would be required to place any
notice or restriction relating to the presence of Hazardous Materials at any
such site or facility owned by it in any deed to the real property on which
such site or facility is located.
(d) There have been no environmental investigations, studies, audits, tests,
reviews or other analyses conducted by, or which are in the possession of,
Lynx or any of its Subsidiaries in relation to any site or facility now or
previously owned, operated or leased by Lynx or any of its Subsidiaries which
have not been delivered to Grizzly prior to the execution of this Agreement.
4.16 Intellectual Property Rights. Except as set forth in Section 4.16 of
the Lynx Disclosure Letter, (a) Lynx and its Subsidiaries have all right,
title and interest in, or a valid and binding license to use, all Intellectual
Property Rights individually or in the aggregate material to the conduct of
the businesses of Lynx and its Subsidiaries taken as a whole. Neither Lynx nor
any Subsidiary of Lynx is in default (or with the giving of notice or lapse of
time or both, would be in default) under any license to use such Intellectual
Property Rights, such Intellectual Property Rights are not being infringed by
any third party, and neither Lynx nor any Subsidiary of Lynx is infringing any
Intellectual Property Rights of any third party, except for such defaults and
infringements which, individually or in the aggregate, are not having and
could not be reasonably expected to have a material adverse effect on Lynx and
its Subsidiaries taken as a whole.
(b) Section 4.16 of the Lynx Disclosure Letter contains (or will be
supplemented prior to Closing to contain) an accurate and complete list as of
the date of this Agreement of all licenses and agreements under which Lynx and
its Subsidiaries are licensed to use third party Intellectual Property Rights
which are material to the business of Lynx as currently conducted (the "Lynx
Intellectual Property Rights").
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(c) Except as set forth in Section 4.16 of the Lynx Disclosure Letter
(including as it may be supplemented prior to Closing), Lynx and its
Subsidiaries are not required to pay any material royalties, fees or other
amounts to any Person in connection with the use or exploitation of the Lynx
Intellectual Property Rights or the development, manufacture or commercial
exploitation of any products of Lynx or its Subsidiaries.
(d) Section 4.16 of the Lynx Disclosure Letter contains an accurate and
complete list as of the date of this Agreement of all registered patents,
registered trademarks, trade names, registered service marks and registered
copyrights (in each case that are currently in use), as well as all
applications for any and all of the foregoing, included in the Lynx
Intellectual Property Rights (excluding third party Intellectual Property
Rights), including the jurisdiction in which each such Lynx Intellectual
Property Rights has been issued or registered or in which any such application
for such issuance, approval or registration has been filed. All registered
patents, registered trademarks, trade names, registered service marks and
registered copyrights owned by Lynx or any of its Subsidiaries and which are
material to the conduct of their business as currently conducted are valid and
enforceable.
(e) Section 4.16 of the Lynx Disclosure Letter contains an accurate and
complete list as of the date of this Agreement of all licenses and sublicenses
under which Lynx or any of its Subsidiaries has granted the right to
manufacture, reproduce, market or exploit any material products of Lynx or its
Subsidiaries or any material adaptation, derivative or reformulation based on
any such product or any portion thereof.
(f) Neither Lynx nor any of its Subsidiaries is or will be as a result of
the execution and delivery of this Agreement or the performance of its
obligations under this Agreement, in breach of any IP Licenses. Neither the
execution or delivery of this Agreement nor the consummation of the
transactions contemplated hereby will cause or will result in a material
change to the terms of any material license, sublicense or other similar
agreement.
(g) Except as set forth in Section 4.08 of the Lynx Disclosure Letter,
neither Lynx nor its Subsidiaries (A) has been sued in any suit, action or
proceeding which involves a claim of infringement or violation of any
Intellectual Property Right of any third party or (B) has received any written
claim or allegation that the manufacturing, importation, marketing, licensing,
sale, offer for sale, or use of any of its products infringes Intellectual
Property Rights of any third party.
(h) Lynx and its Subsidiaries have taken all reasonable steps to protect and
preserve the confidential information, trade secrets and know-how of Lynx and
its Subsidiaries, including appropriate non-disclosure agreements with all
employees and third persons having access to any confidential information,
trade secrets or know-how of Lynx and its Subsidiaries.
(i) Neither Lynx nor any of its Subsidiaries has made any written claim or
allegation that any third person is or has infringed, misappropriated,
breached or violated the rights of Lynx or its Subsidiaries in any of the Lynx
Intellectual Property Rights which are material to the business of Lynx as
currently conducted.
(j) Except as set forth in Section 4.16 of the Lynx Disclosure Letter, all
internal computer systems that are material to the business, finances or
operations of Lynx ("Material Lynx Systems") are Year 2000 Compliant or can be
freely modified to be made Year 2000 Compliant without breaching any third
party license agreements or otherwise infringing any intellectual property
rights of any third party. All Material Lynx Systems that are not Year 2000
Compliant as of the date of this Agreement are set forth in Section 4.16(j) of
the Lynx Disclosure Schedule.
4.17 Vote Required. The affirmative votes of the holders of record of at
least the portion of the outstanding shares of Lynx Common Stock represented
at the meeting and specified in Section 4.17 of the Lynx Disclosure Schedule
with respect to the approval of each of the Lynx Shareholders' Proposals are
the only votes of the holders of any class or series of the capital stock of
Lynx required to approve the Merger and the other transactions contemplated
hereby.
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4.18 Opinion of Financial Advisor. Lynx has received the opinion of CIBC
Wood Gundy Securities Inc., dated the date hereof, to the effect that, as of
the date hereof, the consideration to be paid in the Merger by Lynx is fair
from a financial point of view to the shareholders of Lynx, and a true and
complete copy of such opinion has been delivered to Grizzly prior to the
execution of this Agreement.
4.19 Ownership of Grizzly Common Stock. Neither Lynx nor any of its
Subsidiaries or other affiliates beneficially owns any shares of Grizzly
Common Stock.
4.20 Control Share Statute Not Applicable. Neither Lynx nor any of its
subsidiaries is subject to a statute or regulation of the type specified in
Section 6.16 that would affect this Agreement, the Stock Option Agreements,
the Merger or the other transactions contemplated hereby or thereby.
5. ARTICLE V
COVENANTS
5.01 Covenants of Grizzly and Lynx. At all times from and after the date
hereof until the Effective Time, each of Grizzly and Lynx (each, a "Principal
Party") covenants and agrees as to itself and its Subsidiaries that (except as
expressly contemplated or permitted by this Agreement or the Stock Option
Agreements, or to the extent that the other Principal Party shall otherwise
previously consent in writing):
(a) Ordinary Course. Each Principal Party and each of its Subsidiaries
shall conduct their respective businesses only in, and each Principal Party
and each of its Subsidiaries shall refrain from taking any action except
in, the ordinary course consistent with past practice.
(b) Without limiting the generality of paragraph (a) of this Section, (i)
each Principal Party and its Subsidiaries shall use all commercially
reasonable efforts to preserve intact in all material respects their
present business organization and reputation, to keep available the
services of its key officers and employees, to maintain its assets and
properties in good working order and condition, ordinary wear and tear
excepted, to maintain insurance on its tangible assets and businesses in
such amounts and against such risks and losses as are currently in effect,
to preserve its relationships with customers and suppliers and others
having significant business dealings with it and to comply in all material
respects with all laws and orders of all Governmental or Regulatory
Authorities applicable to it, and (ii) neither Principal Party shall, nor
shall it permit any of its Subsidiaries to, except as otherwise expressly
provided for in this Agreement:
(A) amend or propose to amend its certificate or articles of
incorporation or bylaws (or other comparable corporate charter
documents), except that Lynx may amend its Certificate of Incorporation
as contemplated by Section 6.03(a);
(B) (w) declare, set aside or pay any dividends on or make other
distributions in respect of any of its capital stock, except for the
declaration and payment of dividends by a wholly-owned Subsidiary
solely to its parent corporation, (x) split, combine, reclassify or
take similar action with respect to any of its capital stock or issue
or authorize or propose the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock, (y)
adopt a plan of complete or partial liquidation or resolutions
providing for or authorizing such liquidation or a dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization
or (z) directly or indirectly redeem, repurchase or otherwise acquire
any shares of its capital stock or any Option with respect thereto;
(C) issue, deliver or sell, or authorize or propose the issuance,
delivery or sale of, any shares of its capital stock or any Option with
respect thereto (other than (I) the issuance of Grizzly Common Stock or
Lynx Common Stock pursuant to options granted under the Grizzly Option
Plans, the 1995 Stock Option Plan for Employees and Directors (the
"Lynx Option Plan"), in each case outstanding on the date of this
Agreement and in accordance with their present terms, (II) the issuance
of options pursuant to the Grizzly Option Plan and the Lynx Option
Plan, in each case in accordance with their present terms and only
after consent with the other Principal Party (provided that no such
consent shall
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be required in connection with the issuance of options to purchase up
to 500,000 shares of Lynx Common Stock under the Lynx Option Plan and
up to 230,000 shares of Grizzly Common Stock under the Grizzly Option
Plans, in each case at fair value and as otherwise provided in the
respective Plans), and the issuance of shares of Grizzly Common Stock
and Lynx Common Stock, as the case may be, upon exercise of such
options, (III) the issuance by a wholly-owned Subsidiary of its capital
stock to its parent corporation, (IV) the issuance of Grizzly Common
Stock or Lynx Common Stock, as the case may be, in accordance with the
terms of the applicable Stock Option Agreement and (V) the issuance of
Grizzly Rights and reservation and issuance of Grizzly Series A
Preferred Stock pursuant to the Grizzly Rights Agreement in accordance
with the terms thereof) or modify or amend any right of any holder of
outstanding shares of capital stock or Options with respect thereto;
(D) acquire (by merging or consolidating with, or by purchasing a
substantial equity interest in or a substantial portion of the assets
of, or by any other manner) any business or any corporation,
partnership, association or other business organization or division
thereof or otherwise acquire or agree to acquire any assets other than
in the ordinary course of its business consistent with past practice;
(E) other than in the ordinary course of its business consistent with
past practice, sell, lease, grant any security interest in or otherwise
dispose of or encumber any of its assets or properties;
(F) except to the extent required by applicable law, (x) permit any
material change in (A) any pricing, marketing, purchasing, investment,
accounting, financial reporting, inventory, credit, allowance or tax
practice or policy or (B) any method of calculating any bad debt,
contingency or other reserve for accounting, financial reporting or tax
purposes or (y) make any material tax election or settle or compromise
any material income tax liability with any Governmental or Regulatory
Authority;
(G) (x) incur (which shall not be deemed to include entering into
credit agreements, lines of credit or similar arrangements until
borrowings are made under such arrangements) any indebtedness for
borrowed money or guarantee any such indebtedness other than in the
ordinary course of its business consistent with past practice or (y)
voluntarily purchase, cancel, prepay or otherwise provide for a
complete or partial discharge in advance of a scheduled repayment date
with respect to, or waive any right under, any indebtedness for
borrowed money other than in the ordinary course of its business
consistent with past practice;
(H) enter into, adopt, amend in any material respect (except as may
be required by applicable law) or terminate any Grizzly Employee
Benefit Plan or Lynx Employee Benefit Plan, as the case may be, or
other agreement, arrangement, plan or policy between such Principal
Party or one of its Subsidiaries and one or more of its directors,
officers or employees, or, except for normal increases in the ordinary
course of business consistent with past practice that, in the
aggregate, do not result in a material increase in benefits or
compensation expense to such Principal Party and its Subsidiaries taken
as a whole, increase in any manner the compensation or fringe benefits
of any director, officer or employee or pay any benefit not required by
any plan or arrangement in effect as of the date hereof;
(I) enter into any Contract or amend or modify any existing Contract,
or engage in any new transaction outside the ordinary course of
business consistent with past practice or not on an arm's length basis,
with any affiliate of such Principal Party or any of its Subsidiaries;
(J) make any capital expenditures or commitments for additions to
plant, property or equipment constituting capital assets except in the
ordinary course of business consistent with past practice;
(K) make any change in the lines of business in which it participates
or is engaged; or
(L) enter into any Contract, commitment or arrangement to do or
engage in any of the foregoing.
Grizzly acknowledges that (x) Lynx has had ongoing negotiations with
Sumitomo Heavy Industries, Ltd. concerning, and may enter into a joint
venture with respect to the manufacture, assembly and/or marketing of Lynx
products in Japan, and (y) Lynx's activities in connection with this joint
venture will not contravene this Section 5.01 (provided that nothing in
this sentence shall supersede the requirements of paragraph (b)(ii)(C) of
this Section 5.01).
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(c) Advice of Changes. Each Principal Party shall confer on a regular and
frequent basis with the other with respect to its business and operations
and other matters relevant to the Merger, and shall promptly advise the
other, orally and in writing, of any change or event, including, without
limitation, any complaint, investigation or hearing by any Governmental or
Regulatory Authority (or communication indicating the same may be
contemplated) or the institution or threat of litigation, having, or which,
insofar as can be reasonably foreseen, could have, a material adverse
effect on such Principal Party and its Subsidiaries taken as a whole or on
the ability of such Principal Party, to consummate the transactions
contemplated hereby; provided that no party shall be required to make any
disclosure to the extent such disclosure would constitute a violation of
any applicable law. In addition, Grizzly shall promptly disclose any change
or event with respect to the litigation listed in Section 5.01(c) of the
Grizzly Disclosure Letter.
(d) Notice and Cure. Each Principal Party will notify the other of, and
will use all commercially reasonable efforts to cure before the Closing,
any event, transaction or circumstance, as soon as practical after it
becomes known to such Principal Party, that causes or will cause any
covenant or agreement of such Principal Party under this Agreement to be
breached or that renders or will render untrue any representation or
warranty of such Principal Party contained in this Agreement. Each
Principal Party also will notify the other in writing of, and will use all
commercially reasonable efforts to cure, before the Closing, any violation
or breach, as soon as practical after it becomes known to such party, of
any representation, warranty, covenant or agreement made by such Principal
Party. No notice given pursuant to this paragraph shall have any effect on
the representations, warranties, covenants or agreements contained in this
Agreement for purposes of determining satisfaction of any condition
contained herein.
(e) Fulfillment of Conditions. Subject to the terms and conditions of
this Agreement, each Principal Party will take or cause to be taken all
commercially reasonable steps necessary or desirable and proceed diligently
and in good faith to satisfy each condition to the other's obligations
contained in this Agreement and to consummate and make effective the
transactions contemplated by this Agreement, and neither Principal Party
will, nor will it permit any of its Subsidiaries to, take or fail to take
any action that could be reasonably expected to result in the
nonfulfillment of any such condition.
5.02 No Solicitations. At all times from and after the date hereof until the
Effective Time, each Principal Party covenants and agrees as to itself and its
Subsidiaries (a) that neither it nor any of its Subsidiaries or other
affiliates shall, and it shall use its best efforts to cause its
Representatives (as defined in Section 9.11) not to, initiate, solicit or
encourage, directly or indirectly, any inquiries or the making or
implementation of any proposal or offer (including, without limitation, any
proposal or offer to its shareholders) with respect to a merger, consolidation
or other business combination including such Principal Party or any of its
Subsidiaries or any acquisition or similar transaction (including, without
limitation, a tender or exchange offer) involving the purchase of (i) all or
any significant portion of the assets of such Principal Party and its
Subsidiaries taken as a whole, (ii) 20% or more of the outstanding shares of
such Principal Party's common stock or (iii) 20% of the outstanding shares of
the capital stock of any Subsidiary of such Principal Party (any such proposal
or offer being hereinafter referred to as an "Alternative Proposal"), or
engage in any negotiations concerning, or provide any confidential information
or data to, or have any discussions with, any person or group relating to an
Alternative Proposal (excluding the transactions contemplated by this
Agreement), or otherwise facilitate any effort or attempt to make or implement
an Alternative Proposal; (b) that it will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any
parties with respect to any of the foregoing, and it will take the necessary
steps to inform such parties of its obligations under this Section; and (c)
that it will notify the other Principal Party immediately if any such
inquiries, proposals or offers are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated or continued with, it or any of such persons; provided, however,
that nothing contained in this Section 5.02 shall prohibit the Board of
Directors of either Principal Party from (i) furnishing information to (but
only pursuant to a confidentiality agreement in customary form and having
terms and conditions no less favorable to such Principal Party than the
Confidentiality Agreement) or entering into discussions or negotiations with
any person or group that makes an unsolicited bona fide Alternative Proposal,
if, and only to the extent that, prior to receipt of the Grizzly Shareholders'
Approval (if such Principal Party is Grizzly) or the Lynx Shareholders'
Approval
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(if such Principal Party is Lynx), (A) the Board of Directors of such
Principal Party, based upon the written opinion of outside counsel (a copy of
which shall be provided promptly to the other Principal Party), determines in
good faith that such action is required for the Board of Directors to comply
with its fiduciary duties to shareholders imposed by law, (B) such Alternative
Proposal is not conditioned on the receipt of financing and the Board of
Directors has reasonably concluded in good faith that the person or group
making such Alternative Proposal will have adequate sources of financing to
consummate such Alternative Proposal and that such Acquisition Proposal is
more favorable to such Principal Party's shareholders than the Merger, (C)
prior to furnishing such information to, or entering into discussions or
negotiations with, such person or group, such Principal Party provides written
notice to the other Principal Party to the effect that it is furnishing
information to, or entering into discussions or negotiations with, such person
or group, which notice shall identify such person or group in reasonable
detail, and (D) such Principal Party keeps the other Principal Party informed
of the status and all material information with respect to any such
discussions or negotiations; and (ii) to the extent required, complying with
Rule 14e-2 promulgated under the Exchange Act with regard to an Alternative
Proposal. Nothing in this Section 5.02 shall (x) permit any party to terminate
this Agreement (except as specifically provided in Article VIII), (y) permit
any party to enter into any agreement with respect to an Alternative Proposal
for so long as this Agreement remains in effect (it being agreed that for so
long as this Agreement remains in effect, no party shall enter into any
agreement with any person or group that provides for, or in any way
facilitates, an Alternative Proposal (other than a confidentiality agreement
under the circumstances described above)), or (z) affect any other obligation
of any party under this Agreement.
5.03 Grizzly Rights Agreement. Prior to the Effective Time, without the
prior written consent of Lynx, Grizzly will not take any action with respect
to, or make any determination under, or amend the Grizzly Rights Agreement,
including a redemption of the Grizzly Rights.
5.04 Conduct of Business of Sub. Prior to the Effective Time, except as may
be required by applicable law and subject to the other provisions of this
Agreement, Lynx shall cause Sub to (a) perform its obligations under this
Agreement in accordance with its terms, (b) not incur directly or indirectly
any liabilities or obligations other than those incurred in connection with
the Merger, (c) not engage directly or indirectly in any business or
activities of any type or kind and not enter into any agreements or
arrangements with any person, or be subject to or bound by any obligation or
undertaking, which is not contemplated by this Agreement and (d) not create,
grant or suffer to exist any Lien upon its properties or assets which would
attach to any properties or assets of the Surviving Corporation after the
Effective Time.
5.05 Third Party Standstill Agreements. Each Principal Party agrees that,
during the period from the date of this Agreement through the Effective Time,
neither it nor any of its Subsidiaries shall terminate, amend, modify or waive
any provision of any confidentiality or standstill agreement to which it is a
party. During such period, each Principal Party shall enforce, to the fullest
extent permitted under applicable law, the provisions of any such agreement,
including, but not limited to, by obtaining injunctions to prevent any
breaches of such agreements and to enforce specifically the terms and
provisions thereof in any court having jurisdiction.
5.06 Purchases of Common Stock of the Other Party. Each Principal Party
agrees that, during the period from the date hereof through the Effective
Time, neither it nor any of its Subsidiaries or other affiliates will purchase
any shares of capital stock of the other Principal Party (except pursuant to
the Stock Option Agreements).
5.07 Adoption of Lynx Rights Agreement. As soon as possible following the
Effective Time, Lynx shall establish a shareholder rights plan and have it
approved by the Lynx Board of Directors and submit it to the Lynx shareholders
at the next annual shareholders general meeting.
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6. ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Access to Information; Confidentiality. Each Principal Party shall, and
shall cause each of its Subsidiaries to, throughout the period from the date
hereof to the Effective Time, (i) provide the other Principal Party and its
Representatives with full access, upon reasonable prior notice and during
normal business hours, to all officers, employees, agents and accountants of
such Principal Party and its Subsidiaries and their respective assets,
properties, books and records, but only to the extent that such access does
not unreasonably interfere with the business and operations of such Principal
Party and its Subsidiaries, and (ii) furnish promptly to such persons (x) a
copy of each report, statement, schedule and other document filed or received
by such Principal Party or any of its Subsidiaries pursuant to the
requirements of federal or state securities laws and each material report,
statement, schedule and other document filed with any other Governmental or
Regulatory Authority, and (y) all other information and data (including,
without limitation, copies of Contracts, Grizzly Employee Benefit Plans or
Lynx Employee Benefit Plans, as the case may be, and other books and records)
concerning the business and operations of such Principal Party and its
Subsidiaries as the other party or any of such other persons reasonably may
request. No investigation pursuant to this paragraph or otherwise shall affect
any representation or warranty contained in this Agreement or any condition to
the obligations of the parties hereto. Any such information or material
obtained pursuant to this Section 6.01 that constitutes "Confidential
Information" (as such term is defined in the letter agreement dated as of
September 10, 1998 between Grizzly and Lynx, as amended and as attached to
Section 6.01 of the Grizzly Disclosure Letter (the "Confidentiality
Agreement")) shall be governed by the terms of the Confidentiality Agreement.
6.02 Preparation of Registration Statement and Proxy Statement. Grizzly and
Lynx shall prepare and file with the SEC, applicable Canadian securities
regulatory authorities and The Toronto Stock Exchange as soon as reasonably
practicable after the date hereof the Proxy Statement. Lynx shall prepare and
file with the SEC as soon as reasonably practicable after the date hereof the
Registration Statement, in which the Proxy Statement will be included as the
prospectus. Lynx and Grizzly shall use their best efforts to have the
Registration Statement declared effective by the SEC as promptly as
practicable after such filing. Lynx shall also take any action (other than
qualifying as a foreign corporation or taking any action which would subject
it to service of process in any jurisdiction where Lynx is not now so
qualified or subject) required to be taken under applicable state blue sky or
securities laws in connection with the issuance of Lynx Common Stock in
connection with the Merger. If at any time prior to the Effective Time any
event shall occur that should be set forth in an amendment of or a supplement
to the Registration Statement, Lynx shall prepare and file with the SEC such
amendment or supplement as soon thereafter as is reasonably practicable. Lynx,
Sub and Grizzly shall cooperate with each other in the preparation of the
Registration Statement and the Proxy Statement and any amendment or supplement
thereto, and each shall notify the other of the receipt of any comments of the
SEC with respect to the Registration Statement or the Proxy Statement and of
any requests by the SEC for any amendment or supplement thereto or for
additional information, and shall provide to the other promptly copies of all
correspondence between Lynx or Grizzly, as the case may be, or any of its
Representatives and the SEC with respect to the Registration Statement or the
Proxy Statement. Lynx shall give Grizzly and its counsel the opportunity to
review the Registration Statement and all responses to requests for additional
information by and replies to comments of the SEC before their being filed
with, or sent to, the SEC. Each of Grizzly, Lynx and Sub agrees to use its
best efforts, after consultation with the other parties hereto, to respond
promptly to all such comments of and requests by the SEC and to cause (x) the
Registration Statement to be declared effective by the SEC at the earliest
practicable time and to be kept effective as long as is necessary to
consummate the Merger, and (y) the Proxy Statement to be mailed to the holders
of Grizzly Common Stock and Lynx Common Stock entitled to vote at the meetings
of the shareholders of Grizzly and Lynx at the earliest practicable time.
6.03 Approval of Shareholders. (a) Lynx shall, through its Board of
Directors, duly call, give notice of, convene and hold a meeting of its
shareholders (the "Lynx Shareholders' Meeting") for the purpose of voting on
(i) the adoption of a proposal that Lynx continue its existence under the laws
of the Province of New Brunswick, (ii) the adoption of this Agreement and
(iii) the adoption of a proposal to amend Lynx's Certificate
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of Incorporation to change Lynx's name to GSI Lumonics Inc. (the "Lynx
Shareholders' Proposals"). Unless it determines based upon the written opinion
of outside counsel (a copy of which shall be provided promptly to Grizzly)
that doing so would violate the Board of Directors' fiduciary duties to
shareholders imposed by law, Lynx shall, through its Board of Directors,
include in the Proxy Statement the recommendation of the Board of Directors of
Lynx that the shareholders of Lynx approve the Lynx Shareholders' Proposals by
the requisite majorities (the "Lynx Shareholders' Approval"), and shall use
its best efforts to obtain the Lynx Shareholders' Approval. At such meeting,
Grizzly shall, and shall cause its Subsidiaries to, cause all shares of Lynx
Common Stock then owned by Grizzly or any such Subsidiary to be voted in favor
of the Lynx Shareholders' Proposals. In the event that the Lynx Shareholders'
Approval will likely not be obtained on the date on which the Lynx
Shareholders' Meeting is initially convened, the Board of Directors of Lynx
agrees to adjourn such Lynx Shareholders' Meeting at least twice for the
purpose of obtaining the Lynx Shareholders' Approval and to use its best
efforts during any such adjournments to obtain the Lynx Shareholders'
Approval.
(b) Grizzly shall, through its Board of Directors, duly call, give notice
of, convene and hold a meeting of its shareholders (the "Grizzly Shareholders'
Meeting" and, together with the Lynx Shareholders' Meeting, the "Shareholders'
Meetings") for the purpose of voting on the adoption of this Agreement (the
"Grizzly Shareholders' Approval") as soon as reasonably practicable after the
date hereof. Unless it determines, based upon the written opinion of outside
counsel (a copy of which shall be provided promptly to Lynx) that doing so
would violate the Board of Directors' fiduciary duties to shareholders imposed
by law, Grizzly shall, through its Board of Directors include in the Proxy
Statement the recommendation of the Board of Directors of Grizzly that the
shareholders of Grizzly adopt this Agreement, and shall use its best efforts
to obtain such adoption. At such meeting, Lynx shall, and shall cause its
Subsidiaries to, cause all shares of Grizzly Common Stock then owned by Lynx
or any such Subsidiary to be voted in favor of the adoption of this Agreement.
In the event that the Grizzly Shareholders' Approval will likely not be
obtained on the date on which the Grizzly Shareholders' Meeting is initially
convened, the Board of Directors of Grizzly agrees to adjourn such Lynx
Shareholders' Meeting at least twice for the purpose of obtaining the Grizzly
Shareholders' Approval, and to use its best efforts during any such
adjournments to obtain the Grizzly Shareholders' Approval.
(c) Lynx and Grizzly shall coordinate and cooperate with respect to the
timing of the Shareholders' Meetings and shall use their best efforts to cause
both of the Shareholders' Meetings to be held on the same day and as soon as
practicable after the date hereof.
6.04 Grizzly Affiliates. At least 30 days prior to the Closing Date Grizzly
shall deliver a letter to Lynx identifying all persons who, at the time of the
Grizzly Shareholders' Meeting, may, in Grizzly's reasonable judgment, be
deemed to be "affiliates" (as such term is used in Rule 145 under the
Securities Act) of Grizzly ("Grizzly Affiliates"). Grizzly shall use its best
efforts to cause each Grizzly Affiliate to deliver to Lynx on or prior to the
Closing Date a written agreement substantially in the form and to the effect
of Exhibit A hereto (an "Affiliate Agreement"). Lynx shall be entitled to
place legends as specified in such Affiliate Agreements on the certificates
evidencing any Lynx Common Stock to be received by such Grizzly Affiliates
pursuant to the terms of this Agreement, and to issue appropriate stop
transfer instructions to the transfer agent for the Lynx Common Stock,
consistent with the terms of such Affiliate Agreements.
6.05 Stock Exchange Listing. Lynx shall use its reasonable efforts to cause
the shares of Lynx Common Stock to be issued in the Merger and under the
Grizzly Stock Plans after the Merger in accordance with this Agreement to be
approved for listing on the Toronto Stock Exchange and on Nasdaq, subject to
official notice of issuance, prior to the Closing Date.
6.06 Certain Tax Matters. Lynx and Grizzly shall not take or fail to take
any action which action or failure would cause Lynx, Grizzly or their
respective shareholders (except to the extent that any shareholder of Grizzly
may receive cash in lieu of fractional shares or is the owner of Dissenting
Shares) to recognize gain or loss for United States or Canadian federal income
tax purposes as a result of the consummation of the Merger.
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6.07 Regulatory and Other Approvals. Subject to the terms and conditions of
this Agreement and without limiting the provisions of Sections 6.02 and 6.03,
each Principal Party will proceed diligently and in good faith to, as promptly
as practicable, (a) obtain all consents, approvals or actions of, make all
filings with and give all notices to Governmental or Regulatory Authorities or
any other public or private third parties required of Principal Party or any
of their Subsidiaries to consummate the Merger and the other matters
contemplated hereby, and (b) provide such other information and communications
to such Governmental or Regulatory Authorities or other public or private
third parties as the other Principal Party or such Governmental or Regulatory
Authorities or other public or private third parties may reasonably request in
connection therewith. In addition to and not in limitation of the foregoing,
each Principal Party will (x) take promptly all actions necessary to make the
filings required of either of the Principal Party or their affiliates under
the HSR Act, (y) comply at the earliest practicable date with any request for
additional information received by such party or its affiliates from the
Federal Trade Commission (the "FTC") or the Antitrust Division of the
Department of Justice (the "Antitrust Division") pursuant to the HSR Act, and
(z) cooperate with the other Principal Party in connection with such Principal
Party's filings under the HSR Act and in connection with resolving any
investigation or other inquiry concerning the Merger or the other matters
contemplated by this Agreement commenced by either the FTC or the Antitrust
Division or state attorneys general.
6.08 [Omitted]
6.09 Grizzly Stock Plan. (a) Subject to approval of The Toronto Stock
Exchange, at the Effective Time, each outstanding option to purchase shares of
Grizzly Common Stock (a "Grizzly Stock Option") under the Grizzly Option
Plans, whether vested or unvested, shall be deemed to constitute an option to
acquire, on the same terms and conditions as were applicable under such
Grizzly Stock Option, a number of shares of Lynx Common Stock equal to the
product (rounded down to the nearest whole share) of (i) the number of shares
of Grizzly Common Stock issuable upon exercise of the option immediately prior
to the Effective Time and (ii) the Conversion Number; and the option exercise
price per share of Lynx Common Stock at which such option is exercisable shall
be the amount (rounded up to the nearest whole cent) obtained by dividing
(iii) the option exercise price per share of Grizzly Common Stock at which
such option is exercisable immediately prior to the Effective Time by (iv) the
Conversion Number; provided, however, that, in the case of any Grizzly Stock
Option to which Section 421 of the Code applies by reason of its qualification
under any of Sections 422-424 of the Code ("qualified stock options"), the
option exercise price, the number of shares purchasable pursuant to such
option and the terms and conditions of exercise of such option shall be
determined in order to comply with Section 425(a) of the Code. The adjustments
provided herein with respect to any Stock Options that are "incentive stock
options" (as defined in Section 422 of the Code) shall be effected in a manner
consistent with Section 424(a) of the Code.
(b) As soon as practicable after the Effective Time, Lynx shall deliver to
the participants in the Grizzly Option Plans appropriate notices setting forth
such participants' rights pursuant thereto and the grants pursuant to the
Grizzly Option Plans shall continue in effect on the same terms and conditions
(subject to the adjustments required by this Section after giving effect to
the Merger). Subject to compliance with Canadian securities laws and the rules
of The Toronto Stock Exchange, Lynx shall comply with the terms of the Grizzly
Option Plans and ensure subject to the provisions of the Grizzly Option Plans
that Grizzly Stock Options which qualified as qualified stock options prior to
the Effective Time will continue to qualify as qualified stock options after
the Effective Time.
(c) Lynx shall take all corporate action necessary to reserve for issuance a
sufficient number of shares of Lynx Common Stock for delivery under the
Grizzly Option Plans as adjusted in accordance with this Section. As soon as
practicable after the Effective Time, Lynx shall file a registration statement
on Form S-8 promulgated by the SEC under the Securities Act (or any successor
or other appropriate form) with respect to the Lynx Common Stock subject to
such options and shall use its best 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 options 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,
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where applicable, Lynx shall administer the Grizzly Option Plans in a manner
that complies with Rule 16b-3 promulgated under the Exchange Act.
6.10 Directors' and Officers' Indemnification and Insurance. (a) From and
after the Effective Time and until the sixth anniversary of the Effective Time
and for so long thereafter as any claim for indemnification asserted on or
prior to such date has not been fully adjudicated, Lynx and the Surviving
Corporation (each, an "Indemnifying Party") shall indemnify, defend and hold
harmless each person who is now, or has been at any time prior to the date
hereof or who becomes prior to the Effective Time, a director or officer of
Grizzly or any of its Subsidiaries (the "Indemnified Parties") against (i) all
losses, claims, damages, costs and expenses (including reasonable attorneys'
fees), liabilities, judgments and settlement amounts that are paid or incurred
in connection with any claim, action, suit, proceeding or investigation
(whether civil, criminal, administrative or investigative and whether asserted
or claimed prior to, at or after the Effective Time) that is based in whole or
in part on, or arises in whole or in part out of, the fact that such
Indemnified Party is or was a director or officer of Grizzly or any of its
Subsidiaries and relates to or arises out of any action or omission occurring
at or prior to the Effective Time ("Indemnified Liabilities"), and (ii) all
Indemnified Liabilities based in whole or in part on, or arising in whole or
in part out of, or pertaining to this Agreement or the transactions
contemplated hereby, in each case to the full extent a corporation is
permitted under applicable law to indemnify its own directors or officers, as
the case may be; provided that no Indemnifying Party shall be liable for any
settlement of any claim effected without its written consent, which consent
shall not be unreasonably withheld; and provided, further, that no
Indemnifying Party shall be liable for any Indemnified Liabilities which occur
as a result of the willful misconduct of any Indemnified Party. Except as
disclosed in Section 6.10 of the Grizzly Disclosure Letter, Grizzly is not
aware of any Indemnified Liabilities or of any basis for the assertion
thereof. Without limiting the foregoing, in the event that any such claim,
action, suit, proceeding or investigation is brought against any Indemnified
Party (whether arising prior to or after the Effective Time), (w) the
Indemnifying Parties will pay expenses in advance of the final disposition of
any such claim, action, suit, proceeding or investigation to each Indemnified
Party to the full extent permitted by applicable law; provided that the person
to whom expenses are advanced provides any undertaking required by applicable
law to repay such advance if it is ultimately determined that such person is
not entitled to indemnification; (x) the Indemnified Parties shall retain
counsel reasonably satisfactory to the Indemnifying Parties; (y) the
Indemnifying Parties shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties (subject to the final sentence of this
paragraph) promptly as statements therefor are received; and (z) the
Indemnifying Parties shall use all commercially reasonable efforts to assist
in the defense of any such matter. Any Indemnified Party wishing to claim
indemnification under this Section, upon learning of any such claim, action,
suit, proceeding or investigation, shall notify the Indemnifying Parties, but
the failure so to notify an Indemnifying Party shall not relieve such
Indemnifying Party from any liability which it may have under this paragraph
except to the extent such failure materially prejudices such Indemnifying
Party. The Indemnified Parties as a group may retain only one law firm to
represent them with respect to each such matter unless there is, under
applicable standards of professional conduct, a conflict on any significant
issue between the positions of any two or more Indemnified Parties, in which
case the Indemnified Parties may to the extent necessary to avoid such
conflict retain more than one or more additional law firm, in which event the
Indemnifying Parties shall be required to pay the reasonable fees and expenses
of only one law firm representing the Indemnified Parties.
(b) Except to the extent required by law, until the sixth anniversary of the
Effective Time, Lynx will not take any action so as to amend, modify or repeal
the provisions for indemnification and limitation of liability of directors or
officers contained in the certificates or articles of incorporation or bylaws
(or other comparable charter documents) of the Surviving Corporation and its
Subsidiaries (which immediately before the Effective Time shall be no less
favorable to such individuals than those maintained by Grizzly and its
Subsidiaries on the date hereof) in such a manner as would adversely affect
the rights of any individual who shall have served as a director or officer of
Grizzly or any of its Subsidiaries prior to the Effective Time to be
indemnified by such corporations or limited in their liability in respect of
their serving in such capacities prior to the Effective Time.
(c) The Surviving Corporation shall, until the sixth anniversary of the
Effective Time and for so long thereafter as any claim for insurance coverage
asserted on or prior to such date has not been fully adjudicated,
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cause to be maintained in effect, to the extent available, the policies of
directors' and officers' liability insurance maintained by Grizzly and its
Subsidiaries as of the date hereof (or policies of at least the same coverage
and amounts containing terms that are no less advantageous to the insured
parties) with respect to claims arising from facts or events that occurred on
or prior to the Effective Time; provided that in no event shall the Surviving
Corporation be obligated to expend in order to maintain or procure insurance
coverage pursuant to this paragraph any amount per annum in excess of 150% of
the aggregate premiums payable by Grizzly and its Subsidiaries in 1997 (on an
annualized basis) for such purpose.
(d) The provisions of this Section are intended to be for the benefit of,
and shall be enforceable by, each Indemnified Party and each party entitled to
insurance coverage under paragraph (c) above, respectively, and his or her
heirs and legal representatives, and shall be in addition to any other rights
an Indemnified Party may have under the certificate or articles of
incorporation or bylaws of the Surviving Corporation or any of its
Subsidiaries, under the MBCL or otherwise.
6.11 Lynx Governance. Lynx's Board of Directors shall take action to (i)
cause the full Board of Directors of Lynx at the Effective Time to include
persons who are directors of Grizzly ("Current Grizzly Directors"), and (if
necessary) shall obtain the resignations of persons who are directors of Lynx
("Lynx Directors"). At the Effective Time, the Board of Directors of Lynx
shall be comprised of eight or ten directors, of whom an equal number will be
Current Grizzly Directors and Lynx Directors and (ii) cause the following
persons, so long as they are willing and able to serve, to be duly appointed
to the following offices: Xxx Xxxxxxxx, Chairman of the Board of Directors;
Xxxxxxx Xxxxxxx, chief executive officer; Xxxxx Xxx, chief operating officer.
Following the Effective Time, Lynx's operational headquarters shall be in the
United States.
6.12 Continuation; Name Change. At or prior to the Effective Time, (a) Lynx
shall continue its existence as a corporation in the Province of New
Brunswick, with articles of incorporation and by laws substantially in the
form set forth in Exhibit B hereto and (b) Lynx shall change its corporate
name to GSI Lumonics Inc., provided, however, that the Lynx Shareholder
Approval shall have been obtained therefor.
6.13 Stock Option Agreements. Grizzly, Lynx and Sub shall perform fully
their respective obligations under the Stock Option Agreements.
6.14 Expenses. Except as set forth in Section 8.02, whether or not the
Merger is consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such cost or expense, except that the filing fee in connection with
the filings required under the HSR Act and the expenses incurred in connection
with printing and mailing the Registration Statement, as well as any filing
fees relating thereto, shall be shared equally by Lynx and Grizzly.
6.15 Brokers or Finders. Each of Lynx and Grizzly represents, as to itself
and its affiliates, that no agent, broker, investment banker, financial
advisor or other firm or person is or will be entitled to any broker's or
finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement except Xxxxxxx & Company,
Inc., whose fees and expenses will be paid by Grizzly in accordance with
Grizzly's agreement with such firm, and CIBC Wood Gundy Securities Inc. and
Ernst & Young Corporate Finance Inc., whose fees and expenses will be paid by
Lynx in accordance with Lynx's agreements with such firms, and each of Lynx
and Grizzly shall indemnify and hold the other harmless from and against any
and all claims, liabilities or obligations with respect to any other such fee
or commission or expenses related thereto asserted by any person on the basis
of any act or statement alleged to have been made by such party or its
affiliate.
6.16 Takeover Statutes. If any "fair price", "moratorium", "control share
acquisition" or other form of antitakeover statute or regulation shall become
applicable to the transactions contemplated hereby, each Principal Party and
the members of the Board of Directors of such Principal Party shall grant such
approvals and
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take such actions as are reasonably necessary so that the transactions
contemplated hereby may be consummated as promptly as practicable on the terms
contemplated hereby and thereby and otherwise act to eliminate or minimize the
effects of such statute or regulation on the transactions contemplated hereby
and thereby.
6.17 Conveyance Taxes. Grizzly and Lynx shall cooperate in the preparation,
execution and filing of all returns, questionnaires, applications or other
documents regarding any real property transfer or gains, sales, use, transfer,
value added, stock transfer and stamp taxes, any transfer, recording,
registration and other fees, and any similar taxes which become payable in
connection with the transactions contemplated by this Agreement that are
required or permitted to be filed on or before the Effective Time.
7. ARTICLE VII
CONDITIONS
7.01 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger is subject to the
fulfillment, at or prior to the Closing, of each of the following conditions:
(a) Shareholder Approval. This Agreement shall have been adopted by the
requisite vote of the shareholders of Grizzly under the MBCL and Grizzly's
Articles of Incorporation. The shareholders of Lynx shall have approved the
Lynx Shareholders' Proposals by the requisite majority under applicable law
and governing documents.
(b) Registration Statement; State Securities Laws. The Registration
Statement shall have become effective in accordance with the provisions of
the Securities Act, and no stop order suspending such effectiveness shall
have been issued and remain in effect and no proceeding seeking such an
order shall be pending or threatened. Lynx shall have received all state
securities or "Blue Sky" permits and other authorizations, and all
approvals, rulings and exceptions from applicable Canadian securities
regulatory authorities, necessary to issue the Lynx Common Stock pursuant
to this Agreement and under Grizzly Stock Plans after the Merger.
(c) Exchange Listing. The shares of Lynx Common Stock issuable to
Grizzly's Shareholders in the Merger and under Grizzly Stock Plans after
the Merger in accordance with this Agreement shall have been authorized for
listing on The Toronto Stock Exchange and Nasdaq subject to official notice
of issuance.
(d) HSR Act. Any waiting period (and any extension thereof) applicable to
the consummation of the Merger under the HSR Act shall have expired or been
terminated.
(e) No Injunctions or Restraints. No court of competent jurisdiction or
other competent Governmental or Regulatory Authority shall have enacted,
issued, promulgated, enforced or entered any law or order (whether
temporary, preliminary or permanent) which is then in effect and has the
effect of making illegal or otherwise restricting, preventing or
prohibiting consummation of the Merger or the other transactions
contemplated by this Agreement.
(f) Governmental and Regulatory and Other Consents and Approvals. Other
than the filing provided for by Section 1.03, all consents, approvals and
actions of, filings with and notices to any Governmental or Regulatory
Authority or any other public or private third parties required of Lynx,
Grizzly or any of their Subsidiaries to consummate the Merger and the other
matters contemplated hereby, the failure of which to be obtained or taken
could be reasonably expected to have a material adverse effect on Lynx and
its Subsidiaries or the Surviving Corporation and its Subsidiaries, in each
case taken as a whole, or on the ability of any of the parties hereto to
consummate the transactions contemplated hereby shall have been obtained,
all in form and substance reasonably satisfactory to Lynx and Grizzly.
(g) Continuation; Name Change. At the Effective Time, Lynx shall have (a)
continued its existence as a corporation in New Brunswick and (b) changed
its corporate name to GSI Lumonics Inc.
(h) Dissenting Shares.
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The sum (i) the product of the Conversion Number and the number of
Dissenting Shares plus (ii) shares of Lynx Common Stock the holders of which
have not voted in favor of the matters referred to in Section 7.01(g), have
perfected their rights to dissent with respect to their shares in accordance
with applicable law and have not effectively withdrawn or lost such right to
dissent ("Lynx Dissenting Shares") shall not exceed 6% of the sum (iii) the
number of shares of Lynx Common Stock and (iv) the product of the Conversion
Number and the number of shares of Grizzly Common Stock, in each case
outstanding on the Closing Date.
7.02 Conditions to Obligation of Lynx and Sub to Effect the Merger. The
obligation of Lynx and Sub to effect the Merger is further subject to the
fulfillment, at or prior to the Closing, of each of the following additional
conditions (all or any of which may be waived in whole or in part by Lynx and
Sub in their sole discretion):
(a) Representations and Warranties. The representations and warranties
made by Grizzly in this Agreement shall be true and correct as of the
Closing Date as though made on and as of the Closing Date or, in the case
of representations and warranties made as of a specified date earlier than
the Closing Date, on and as of such earlier date, except as affected by the
transactions contemplated by this Agreement, and Grizzly shall have
delivered to Lynx a certificate, dated the Closing Date and executed in the
name and on behalf of Grizzly by its Chairman of the Board, President or
any Executive Vice President, to such effect.
(b) Performance of Obligations. Grizzly shall have performed and complied
with, in all material respects, each agreement, covenant and obligation
required by this Agreement to be so performed or complied with by Grizzly
at or prior to the Closing, and Grizzly shall have delivered to Lynx a
certificate, dated the Closing Date and executed in the name and on behalf
of Grizzly by its Chairman of the Board, President or any Executive Vice
President, to such effect.
(c) Grizzly Rights Agreement. On or prior to the Closing Date, Grizzly
Rights shall not have become exercisable or transferable apart from the
associated shares of Grizzly Common Stock, no "Shares Acquisition Date" or
"Distribution Date" (each as defined in the Grizzly Rights Agreement) shall
have occurred and the Grizzly Rights shall not have become nonredeemable,
in each case other than as a result of actions by Lynx or any of its
affiliates.
(d) Absence of Certain Change or Events. Except as disclosed in Grizzly
Reports filed prior to the date of this Agreement, (a) since June 30, 1998
there shall not have been any change, event or development (excluding stock
market fluctuations, changes in general economic conditions, or any change,
event, or development having, or that could reasonably be expected to have,
individually or in the aggregate, a material adverse effect on companies in
the industries in which Grizzly operates generally) having, or that could
be reasonably expected to have, individually or in the aggregate, a
material adverse effect on Grizzly and its Subsidiaries taken as a whole.
(e) Acceptance of Officer and Director Positions. The Grizzly officer
listed in Section 6.11 shall have accepted his officer position set forth
therein.
(f) Proceedings. All proceedings to be taken on the part of Grizzly in
connection the transactions contemplated by this Agreement and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Lynx, and Lynx shall have received copies of all such
documents and other evidences as Lynx may reasonably request in order to
establish the consummation of such transactions and the taking of all
proceedings in connection therewith.
7.03 Conditions to Obligation of Grizzly to Effect the Merger. The
obligation of Grizzly to effect the Merger is further subject to the
fulfillment, at or prior to the Closing, of each of the following additional
conditions (all or any of which may be waived in whole or in part by Grizzly
in its sole discretion):
(a) Representations and Warranties. The representations and warranties
made by Lynx and Sub in this Agreement shall be true and correct as of the
Closing Date as though made on and as of the Closing Date or, in the case
of representations and warranties made as of a specified date earlier than
the Closing Date, on and as of such earlier date, except as affected by the
transactions contemplated by this Agreement, and Lynx and Sub shall each
have delivered to Grizzly a certificate, dated the Closing Date and
executed in the name and on behalf of Lynx by its Chairman of the Board,
President or any Executive Vice President
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and in the name and on behalf of Sub by its Chairman of the Board,
President or any Vice President, to such effect.
(b) Performance of Obligations. Lynx and Sub shall have performed and
complied with, in all material respects, each agreement, covenant and
obligation required by this Agreement to be so performed or complied with
by Lynx or Sub at or prior to the Closing, and Lynx and Sub shall each have
delivered to Grizzly a certificate, dated the Closing Date and executed in
the name and on behalf of Lynx by its Chairman of the Board, President, any
Executive Vice President or its Chief Financial Officer and in the name and
on behalf of Sub by its Chairman of the Board, President or any Vice
President, to such effect.
(c) Absence of Certain Changes or Events. Except as disclosed in the Lynx
Reports filed prior to the date of this Agreement, (a) since June 30, 1998
there shall not have been any change, event or development (excluding stock
market fluctuations, changes in general economic conditions, or any change,
event or development having, or that could reasonably in general economic
conditions, or any change, event or development having, or that could
reasonably be expected to have, individually or in the aggregate, a
material adverse effect on companies in the industries in which Lynx
operates generally) having, or that could be reasonably expected to have,
individually or in the aggregate, a material adverse effect on Lynx and its
Subsidiaries taken as a whole.
(d) Appointment of Directors and Officers. Lynx shall have duly appointed
the Grizzly directors and officer listed in Section 6.11 to the positions
set forth therein, subject to consummation of the Merger and acceptance of
such appointment.
(e) Proceedings. All proceedings to be taken on the part of Lynx and Sub
in connection with the transactions contemplated by this Agreement and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Grizzly, and Grizzly shall have received copies of all such
documents and other evidences as Grizzly may reasonably request in order to
establish the consummation of such transactions and the taking of all
proceedings in connection therewith.
(8) ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.01 Termination. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned, at any time prior to the Effective Time,
whether prior to or after Grizzly Shareholders' Approval or the Lynx
Shareholders' Approval:
(a) By mutual written agreement of the parties hereto duly authorized by
action taken by or on behalf of their respective Boards of Directors;
(b) By either Principal Party upon notification to the non-terminating
Principal Party by the terminating Principal Party:
(i) at any time after March 31, 1999 if the Merger shall not have
been consummated on or prior to such date and such failure to
consummate the Merger is not caused by a breach of this Agreement by
the terminating Principal Party;
(ii) if the Grizzly Shareholders' Approval or the Lynx Shareholders'
Approval shall not be obtained by reason of the failure to obtain the
requisite vote upon a vote held at a meeting of such shareholders, or
any adjournment thereof, called therefor;
(iii) if there has been a material breach of any representation,
warranty, covenant or agreement on the part of the non-terminating
Principal Party set forth in this Agreement, which breach is not
curable or, if curable, has not been cured within 30 days following
receipt by the non-terminating Principal Party of notice of such breach
from the terminating Principal Party; or
(iv) if any court of competent jurisdiction or other competent
Governmental or Regulatory Authority shall have issued an order making
illegal or otherwise restricting, preventing or prohibiting the Merger
and such order shall have become final and nonappealable; or
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(c) By either Principal Party if (i) the Board of Directors of such
Principal Party determines in good faith, based upon the written opinion of
outside counsel (a copy of which shall be provided promptly to the other
Principal Party), that termination of the Agreement is required for the Board
of Directors to comply with its fiduciary duties to shareholders imposed by
law by reason of an unsolicited bona fide Alternative Proposal meeting the
requirements of clauses (A) and (B) of Section 5.02 having been made; provided
that the terminating Principal Party shall have complied with the provisions
of clauses (C) and (D) of Section 5.02 and shall notify the other Principal
Party promptly of its intention to terminate this Agreement or enter into a
definitive agreement with respect to such Alternative Proposal, but in no
event shall such notice be given less than 48 hours prior to the public
announcement of the terminating Principal Party's termination of this
Agreement; or (ii) the Board of Directors of the other Principal Party shall
have withdrawn or modified in a manner materially adverse to the terminating
Principal Party its approval or recommendation of this Agreement or the Merger
(it being understood that an announcement by such other Principal Party that
states that an Alternative Proposal is under consideration by such Board of
Directors shall be deemed such a withdrawal or modification, unless the Board
of Directors publicly reaffirms its original recommendation within ten
business days after such announcement); and provided further that the
terminating Principal Party's ability to terminate this Agreement pursuant to
clause (i) of this paragraph (c) is conditioned upon the prior payment by the
terminating Principal Party of any amounts owed by it pursuant to Section
8.02(b).
8.02 Effect of Termination. (a) If this Agreement is validly terminated by
either Grizzly or Lynx pursuant to Section 8.01, this Agreement will forthwith
become null and void and there will be no liability or obligation on the part
of either Grizzly or Lynx (or any of their respective Representatives or
affiliates), except (i) that the provisions of Sections 6.13, 6.14 and 6.15
and this Section 8.02 will continue to apply following any such termination,
(ii) that nothing contained herein shall relieve any party hereto from
liability for willful breach of its representations, warranties, covenants or
agreements contained in this Agreement and (iii) as provided in paragraph (b)
below.
(b) In the event that any person or group shall have made an Alternative
Proposal with respect to a Principal Party and thereafter this Agreement is
terminated (x) by such Principal Party pursuant to Section 8.01(c)(i), then
such Principal Party shall pay the Specified Amounts (as defined below) to the
other Principal Party, or (y) by the other Principal Party pursuant to Section
8.01(b)(iii) as a result of a breach of covenant or agreement or pursuant to
Section 8.01(c)(ii), then the non-terminating Principal Party shall pay the
Specified Amounts to the terminating Principal Party. In addition, if any
person or group shall have made an Alternative Proposal with respect to a
Principal Party and thereafter this Agreement is terminated for any other
reason (other than by reason of the breach of this Agreement by the Non-
Executing Party (as defined below) or as a result of the Shareholders'
Approval of the Non-Executing Party not being obtained) and, in the case of
this sentence only, a definitive agreement with respect to an Alternative
Proposal is executed by such Principal Party within one year after such
termination, then the Principal Party executing such agreement (the "Executing
Party") shall pay the Specified Amounts to the other Principal Party (the
"Non-Executing Party"). The Specified Amounts shall be paid by wire transfer
of same day funds, either on the date contemplated in Section 8.01(c) if
applicable, or otherwise within two business days after such amount becomes
due. "Specified Amounts" means (x) a termination fee of U.S. $4,000,000 and
(y) an amount equal to all documented out-of-pocket expenses and fees incurred
by the Principal Party who is entitled to receive such fee, or by any of its
Subsidiaries, in connection with this Agreement and the transactions
contemplated hereby (including, without limitation, fees and expenses payable
to all banks, investment banking firms and other financial institutions and
persons and their respective agents and counsel for acting as such Principal
Party's financial advisor with respect to, or arranging or committing to
provide or providing any financing for, the Merger), provided that in no event
shall the amount of such reimbursable fees and expenses exceed U.S. $500,000
in the aggregate.
(c) Each Principal Party acknowledges that the agreements contained in the
preceding paragraph are an integral part of the transactions contemplated by
this Agreement and that, without these agreements, the other Principal Party
would not enter into this Agreement; accordingly, if such Principal Party
fails promptly to pay the amount due pursuant to such paragraph, and in order
to obtain such payment, the other Principal Party
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commences a suit which results in a judgment against such Principal Party for
such amount, such Principal Party shall pay to the other Principal Party, as
the case may be, all costs and expenses (including attorneys' fees and
expenses) incurred by such other Principal Party or any of its Subsidiaries in
connection with such suit, together with interest on the amount of the fee at
a rate equal to the prime rate publicly announced from time to time by The
Chase Manhattan Bank and in effect on the date such payment was required to be
made.
8.03 Amendment. This Agreement may be amended, supplemented or modified by
action taken by or on behalf of the respective Boards of Directors of the
parties hereto at any time prior to the Effective Time, whether prior to or
after the Grizzly Shareholders' Approval or the Lynx Shareholders' Approval
shall have been obtained, but after such adoption and approval only to the
extent permitted by applicable law. No such amendment, supplement or
modification shall be effective unless set forth in a written instrument duly
executed by or on behalf of each party hereto.
8.04 Waiver. At any time prior to the Effective Time any party hereto, by
action taken by or on behalf of its Board of Directors, may to the extent
permitted by applicable law (i) extend the time for the performance of any of
the obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties of the other parties hereto
contained herein or in any document delivered pursuant hereto or (iii) waive
compliance with any of the covenants, agreements or conditions of the other
parties hereto contained herein. No such extension or waiver shall be
effective unless set forth in a written instrument duly executed by or on
behalf of the party extending the time of performance or waiving any such
inaccuracy or non-compliance. No waiver by any party of any term or condition
of this Agreement, in any one or more instances, shall be deemed to be or
construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion.
(9) ARTICLE IX
GENERAL PROVISIONS
9.01 Non-Survival of Representations, Warranties, Covenants and
Agreements. The representations, warranties, covenants and agreements
contained in this Agreement or in any instrument delivered pursuant to this
Agreement shall not survive the Merger but shall terminate at the Effective
Time, except for the agreements contained in Article I and Article II, in
Sections 6.09, 6.10 and 6.11, this Article IX and the agreements of the
"affiliates" of Grizzly delivered pursuant to Section 6.04, which shall
survive the Effective Time.
9.02 Notices. All notices, requests and other communications hereunder must
be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
If to Lynx or Sub, to:
Lumonics Inc.
Oxnard Operation
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile No.: 805/485-3335
Attn: W. Xxxxx Xxx
with copies to:
000 Xxxxxxxxx Xxxx
Xxxxxx, Xxxxxxx XXX 0X0
Facsimile No.: 603/592-7549
Attn: Xxxxxxx X. Xxxxxxx
Xxxxxxxx Xxxxxxx
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, X0X 0X0
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Facsimile No.: 613/237-1920
Attn: Xxxxxxx Xxxxxxx, Esq.
If to Grizzly, to:
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile No.: 617/924-7327
Attn: Xxxxxxx X. Xxxxxxx
with a copy to:
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Facsimile No.: 617/523-1231
Attn: Xxxxxx X. Cable, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number
as provided in this Section, be deemed given upon receipt, and (iii) if
delivered by mail in the manner described above to the address as provided in
this Section, be deemed given upon receipt (in each case regardless of whether
such notice, request or other communication is received by any other person to
whom a copy of such notice, request or other communication is to be delivered
pursuant to this Section). Any party from time to time may change its address,
facsimile number or other information for the purpose of notices to that party
by giving notice specifying such change to the other parties hereto.
9.03 Entire Agreement; Incorporation of Exhibits. (a) This Agreement
supersedes all prior discussions and agreements among the parties hereto with
respect to the subject matter hereof, other than the Confidentiality
Agreement, which shall survive the execution and delivery of this Agreement in
accordance with its terms, and contains, together with the Confidentiality
Agreement and the Stock Option Agreements, the sole and entire agreement among
the parties hereto with respect to the subject matter hereof.
(b) The Grizzly Disclosure Letter, the Lynx Disclosure Letter and any
Schedule or Exhibit attached to this Agreement and referred to herein are
hereby incorporated herein and made a part hereof for all purposes as if fully
set forth herein.
9.04 Public Announcements. Except as otherwise required by law or the rules
of any applicable securities exchange or national market system, so long as
this Agreement is in effect, Lynx and Grizzly will not, and will not permit
any of their respective Subsidiaries or Representatives to, issue or cause the
publication of any press release or make any other public announcement with
respect to the transactions contemplated by this Agreement without the consent
of the other party, which consent shall not be unreasonably withheld. Lynx and
Grizzly will cooperate with each other in the development and distribution of
all press releases and other public announcements with respect to this
Agreement and the transactions contemplated hereby, and will furnish the other
with drafts of any such releases and announcements as far in advance as
practicable.
9.05 No Third Party Beneficiaries. Except as provided in Section 6.09 and
Section 6.10, the terms and provisions of this Agreement are intended solely
for the benefit of each party hereto and their respective successors or
permitted assigns, and except as otherwise expressly provided for herein, it
is not the intention of the parties to confer third-party beneficiary rights
upon any other person.
9.06 No Assignment; Binding Effect. Neither this Agreement nor any right,
interest or obligation hereunder may be assigned by any party hereto without
the prior written consent of the other parties hereto and any attempt to do so
will be void, except that Sub may assign any or all of its rights, interests
and obligations hereunder to another direct or indirect wholly-owned
Subsidiary of Lynx, provided that any such Subsidiary agrees in writing to be
bound by all of the terms, conditions and provisions contained herein that
would otherwise
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be applicable to Sub. Subject to the preceding sentence, this Agreement is
binding upon, inures to the benefit of and is enforceable by the parties
hereto and their respective successors and assigns.
9.07 Headings. The headings used in this Agreement have been inserted for
convenience of reference only and do not define, modify or limit the
provisions hereof.
9.08 Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law or order,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (i) such provision will be
fully severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
and (iii) the remaining provisions of this Agreement will remain in full force
and effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom.
9.09 Governing Law. Except to the extent that the MBCL is mandatorily
applicable to the Merger and the rights of the shareholders of the Constituent
Corporations, this Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to a contract executed and
performed in such State, without giving effect to the conflicts of laws
principles thereof.
9.10 Enforcement of Agreement. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
was not performed in accordance with its specified terms or was otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of competent
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
9.11 Certain Definitions. As used in this Agreement:
(a) except as provided in Section 6.04, the term "affiliate," as applied
to any person, shall mean any other person directly or indirectly
controlling, controlled by, or under common control with, that person; for
purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling," "controlled by" and "under common
control with"), as applied to any person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of that person, whether through the ownership of voting
securities, by contract or otherwise;
(b) a person will be deemed to "beneficially" own securities if such
person would be the beneficial owner of such securities under Rule 13d-3
under the Exchange Act, including securities which such person has the
right to acquire (whether such right is exercisable immediately or only
after the passage of time);
(c) the term "business day" means a day other than Saturday, Sunday or
any day on which banks located in the Province of Ontario or the
Commonwealth of Massachusetts are authorized or obligated to close;
(d) the term "knowledge" or any similar formulation of "knowledge" shall
mean, with respect to Grizzly, the knowledge of Grizzly's executive
officers, and with respect to Lynx, the knowledge of Lynx's executive
officers;
(e) any reference to any event, change or effect being "material" or
"materially adverse" or having a "material adverse effect" on or with
respect to an entity (or group of entities taken as a whole) means such
event, change or effect is material or materially adverse, as the case may
be, to the business, financial condition or results of operations of such
entity (or of such group of entities taken as a whole);
(f) the term "person" shall include individuals, corporations,
partnerships, trusts, other entities and groups (which term shall include a
"group" as such term is defined in Section 13(d)(3) of the Exchange Act);
(g) the "Representatives" of any entity means such entity's directors,
officers, employees, legal, investment banking and financial advisors,
accountants and any other agents and representatives;
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(h) the term "Subsidiary" means, with respect to any party, any
corporation or other organization, whether incorporated or unincorporated,
of which more than 50% of either the equity interests in, or the voting
control of, such corporation or other organization is, directly or
indirectly through Subsidiaries or otherwise, beneficially owned by such
party.
9.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be signed
by its officers thereunto duly authorized and its corporate seal to be affixed
as of the date first above written.
Attest: Lumonics Inc.
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxxx
_____________________________________ By: _________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
/s/ W. Xxxxx Xxx
By: _________________________________
Name: W. Xxxxx Xxx
Title: President and Chief
Executive Officer
Attest: Grizzly Acquisition Corp.
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxxx
_____________________________________ By: _________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:President
/s/ Xxxxxxx X. Xxxxxxx
By: _________________________________
Name: Xxxxxxx X. Xxxxxxx
Title:Treasurer
Attest: General Scanning Inc.
/s/ Xxxxxxxxx XxXxxxx /s/ Xxxxxxx X. Xxxxxxx
_____________________________________ By: _________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
/s/ Xxxxxx X. Xxxxxxx
By: _________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
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EXHIBIT A
[FORM OF AFFILIATE'S AGREEMENT]
[DATE]
Lumonics Inc.
000 Xxxxxxxxx Xxxx
Xxxxxx, Xxxxxxx X0X 0X0
Ladies and Gentlemen:
I have been advised that as of the date hereof I may be deemed to be an
"affiliate" of General Scanning Inc., a Massachusetts corporation ("Grizzly"),
as that term is defined for purposes of paragraphs (c) and (d) of Rule 145 of
the rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"). Neither my entering into this agreement, nor anything
contained herein, shall be deemed an admission on my part that I am such an
"affiliate".
Pursuant to the terms of the Agreement and Plan of Merger dated as of
October 27, 1998 (the "Merger Agreement"), among Lumonics Inc., an Ontario
corporation ("Lynx"), Grizzly Acquisition Corp., a Massachusetts corporation
wholly owned by Lynx ("Sub"), and Grizzly providing for the merger of Sub with
and into Grizzly (the "Merger"), and as a result of the Merger, I may receive
shares of Lynx's common stock (the "Lynx Securities"), in exchange for the
shares of common stock, par value $.01 per share, of Grizzly owned by me at
the Effective Time (as defined in the Merger Agreement) of the Merger.
I represent, warrant and covenant to Lynx that in such event:
A. I shall not make any sale, transfer or other disposition of the Lynx
Securities in violation of the Act or the Rules and Regulations.
B. I have carefully read this letter and the Merger Agreement and
discussed its requirements and other applicable limitations upon my ability
to sell, transfer or otherwise dispose of Lynx Securities, to the extent I
felt necessary, with my counsel or counsel for Grizzly.
C. I have been advised that the issuance of Lynx Securities to me
pursuant to the Merger has been registered with the Commission under the
Act on a Registration Statement on Form S-4. However, I have also been
advised that, since at the time the Merger was submitted for a vote of the
Shareholders of Grizzly I may have been deemed to have been an affiliate of
Grizzly and a distribution by me of Lynx Securities has not been registered
under the Act, the Lynx Securities must be held by me indefinitely unless
(i) a distribution of Lynx Securities by me has been registered under the
Act, (ii) a sale of Lynx Securities by me is made in conformity with the
volume and other limitations of Rule 145 promulgated by the Commission
under the Act or (iii) in the opinion of counsel reasonably acceptable to
Lynx, some other exemption from registration is available with respect to a
proposed sale, transfer or other disposition of the Lynx Securities by me.
D. I understand that Lynx is under no obligation to register the sale,
transfer or other disposition of Lynx Securities by me or on my behalf or
to take any other action necessary in order to make compliance with an
exemption from registration available.
E. I also understand that stop transfer instructions will be given to
Lynx's transfer agents with respect to the Lynx Securities and that there
will be placed on the certificates for the Lynx Securities, or any
substitutions therefor, a legend stating in substance:
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"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities Act of
1933, as amended, applies. The shares represented by this certificate
may only be transferred in accordance with the terms of an agreement
dated , , between the registered holder hereof and Lumonics Inc.
(the "Corporation"), a copy of which agreement is on file at the
principal offices of the Corporation."
F. I also understand that unless the transfer by me of my Lynx Securities
has been registered under the Act or is a sale made in conformity with the
provisions of Rule 145, Lynx reserves the right to put the following legend
on the certificates issued to my transferee:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired from a
person who received such shares in a transaction to which Rule 145
promulgated under such Act applies. The shares have been acquired by
the holder not with a view to, or for resale in connection with, any
distribution thereof within the meaning of such Act and may not be
sold, pledged or otherwise transferred except in accordance with an
exemption from the registration requirements of such Act."
It is understood and agreed that the legends set forth in paragraph E and F
above shall be removed by delivery of substitute certificates without such
legend if the undersigned shall have delivered to Lynx a copy of a letter from
the staff of the Commission, or an opinion of counsel reasonably acceptable to
Lynx to the effect that such legend is not required for purposes of the Act.
By its acceptance hereof, Lynx agrees, for a period of two years after the
Effective Time, that it will file on a timely basis all reports required to be
filed by it pursuant to Section 13 of the Securities Exchange Act of 1934, as
amended, so that the public information provisions of Rule 144(c) under the
Act are satisfied and the resale provisions of Rules 145(d)(1) and (2) under
the Act are therefore available to me in the event I desire to transfer any
Lynx Securities issued to me in the Merger.
Very truly yours,
___________________________________
Name:
Accepted this day of
, , by:
LUMONICS INC.
By __________________________________
Name:
Title
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