EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of February 21, 2000, by and among
NORTHSTAR COMPUTER FORMS, INC., a Minnesota corporation ("Northstar"), XXXXX
BUSINESS FORMS, INC., a Texas corporation ("Buyer") and POLARIS ACQUISITION
CORP., a Minnesota corporation and wholly-owned subsidiary of Buyer ("Buyer
Subsidiary"). Northstar and Buyer Subsidiary are sometimes hereinafter
collectively referred to as the "Constituent Corporations."
W I T N E S S E T H
WHEREAS, the authorized capital stock of Northstar consists of 5,000,000 shares
(the "Shares") of Common Stock, $.05 par value (the "Northstar Stock"), and
200,000 shares of non-voting Preferred Stock, without par value (the "Northstar
Preferred Stock"). As of October 31, 1999, 2,744,708 Shares of Northstar Stock
were issued and outstanding and an aggregate of 532,500 Shares of Northstar
Stock were reserved for issuance pursuant to options outstanding under various
Northstar option plans and grants (the "Stock Options") and no shares of
Northstar Preferred Stock were issued and outstanding; and
WHEREAS, the authorized capital stock of Buyer Subsidiary consists of 1,000
shares of Common Stock, $.01 par value (the "Buyer Subsidiary Common Stock"), of
which 1,000 shares are issued and outstanding as of the date hereof, all of
which shares are issued to and owned by Buyer; and
WHEREAS, the respective Boards of Directors of Northstar and Buyer Subsidiary
deem a merger of Northstar and Buyer Subsidiary pursuant to the terms hereof
desirable and in the best interest of the their respective corporations and the
respective Boards of Directors of Northstar and Buyer Subsidiary have, by
resolutions duly adopted, approved and authorized the execution and delivery of
this Agreement providing for the merger of Buyer Subsidiary into Northstar on
the terms and conditions set forth herein (the "Merger"); and
WHEREAS, the respective Boards of Directors of Northstar and Buyer Subsidiary
have directed that this Agreement be submitted to their respective shareholders
for approval as provided for by the Minnesota Business Corporation Act (the
"MBCA") and their respective Bylaws; and
WHEREAS, Buyer, as the sole shareholder of Buyer Subsidiary has, by resolutions
duly adopted, approved and authorized this Agreement and the Merger as provided
for by the Texas Business Corporation Act and its Bylaws.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants,
representations, warranties and agreements herein contained, and for the purpose
of prescribing the terms and conditions of the Merger, the manner and basis of
converting Shares of Northstar
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Stock into cash and such other provisions as are deemed necessary or
desirable, the parties agree that the Merger shall be effected on the terms
and subject to the conditions set forth below and in accordance with the
applicable laws of the State of Minnesota.
ARTICLE I
THE MERGER
1.1 THE MERGER. At the Effective Time, as defined in Section 1.3
herein, and in accordance with the terms of this Agreement and the MBCA, Buyer
Subsidiary shall be merged with and into Northstar, the separate corporate
existence of Buyer Subsidiary shall thereupon cease, and Northstar shall be the
surviving corporation in the Merger (sometimes hereinafter referred to as the
"Surviving Corporation"), the name of which shall continue to be "NORTHSTAR
COMPUTER FORMS, INC."
1.2 SURVIVING CORPORATION. At the Effective Time, the Surviving
Corporation shall thereupon and thereafter possess all the rights, privileges,
immunities, powers and franchises, of a public as well as of a private nature,
of each of the Constituent Corporations, and be subject to all the duties,
liabilities and obligations of each of the Constituent Corporations, and all the
rights, privileges, immunities powers and franchises of each of the Constituent
Corporations, and all property real, personal and mixed, and all debts due to
either of the Constituent Corporations on whatever account, including
subscriptions to shares, and all other choses in action and every other interest
of or belonging to or due to each of the Constituent Corporations shall vest in
the Surviving Corporation; and all property rights, privileges, immunities,
powers and franchises and every other interest shall be thereafter the property
of the Surviving Corporation as they were of the respective Constituent
Corporations; and the title to any real estate or any interest therein, vested
by deed or otherwise in either of the Constituent Corporations shall not revert
to or be in any way impaired by reason of the Merger; but all rights of
creditors and all liens upon any property of either of the Constituent
Corporations shall be preserved unimpaired; and all debts, duties, liabilities
and obligations of either of the Constituent Corporations shall thenceforth
attach to the Surviving Corporation and may be enforced against it to the same
extent as if said debts, duties, liabilities and obligations had been incurred
or contracted by it.
1.3 EFFECTIVE TIME OF THE MERGER. The Merger shall become effective
(the "Effective Time") as of the later to occur of (a) the filing of the
Articles of Merger with the Secretary of State of the State of Minnesota, or (b)
such later time as the parties may designate in such filing.
1.4 ARTICLES OF INCORPORATION AND BYLAWS. The Articles of Incorporation
of Northstar in effect immediately prior to the Effective Time shall be the
Articles of Incorporation of the Surviving Corporation, until further amended in
accordance with the laws of the State of Minnesota. The Bylaws of Northstar in
effect immediately prior to the Effective Time shall be deemed, by virtue of the
Merger and without further action by the shareholders or directors of the
Surviving Corporation, to be the Bylaws of the Surviving Corporation, until
further amended in accordance with the laws of the State of Minnesota.
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1.5 BOARD OF DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The
directors of Buyer Subsidiary immediately prior to the Effective Time shall be
the directors of the Surviving Corporation, each of such directors to hold
office, subject to the applicable provisions of the Bylaws of the Surviving
Corporation until the expiration of the term for which such director was elected
and until his successor is elected and has qualified or as otherwise provided in
the Bylaws of the Surviving Corporation. The officers of Northstar immediately
prior to the Effective Time, specifically, Xxxxxxx Xxxxxxxxxx, Xxxx Xxx Xxxxx,
Xxxx Xxxxxxxxxx and Xxx Xxxxxxxx, shall be the officers of the Surviving
Corporation until their respective successors are chosen and have qualified or
as otherwise provided in the Bylaws of the Surviving Corporation.
1.6 CONVERSION OF SHARES. The manner and basis of converting the shares
of each of the Constituent Corporations shall be as follows:
(a) At the Effective Time, each Share of Northstar Stock which is
issued and outstanding immediately prior to the Effective Time (other
than (i) Shares as to which dissenters' rights are exercised under
Section 302A.471 and 302A.473 of the MBCA and Section 1.7 hereof and
(ii) Shares, if any, held of record by Buyer or Buyer Subsidiary
immediately prior to the Effective Time) shall, by virtue of the Merger
and without any action on the part of the holder thereof, be converted
into the right to receive Fourteen Dollars ($14.00) in cash (the
"Merger Consideration"), prorated for fractional shares (if any).
(b) At the Effective Time, each share of Buyer Subsidiary Common Stock
which is issued and outstanding immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into and exchanged for one (1) share
of Common Stock of the Surviving Corporation.
(c) At the Effective Time, each Share of Northstar Stock, if any, held
of record by Buyer or Buyer Subsidiary immediately prior to the
Effective Time which is issued and outstanding immediately prior to the
Effective Time shall be canceled and shall cease to exist, and no
payment shall be made with respect thereto.
(d) Immediately prior to the Effective Time, each Stock Option, except
for options to purchase an aggregate of 41,000 shares (the "Xxxxxxxxxx
Options") of Northstar Common Stock held by Xxxxxxx Xxxxxxxxxx (which
shall be converted into options to purchase common stock of Buyer),
shall be exercised pursuant to the Stock Option Exercise and Sale
Agreements (as defined in Section 5.5) and the Shares underlying each
such Stock Option shall be immediately resold to Northstar in a manner
which would cause the disposition to be treated as a disqualifying
disposition pursuant to Section 424(a) of the Internal Revenue Code of
1986, as amended (the "Code"), and the payment for such Shares shall be
made as described in Section 1.8.
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1.7 DISSENTERS' RIGHTS.
(a) Notwithstanding Section 1.6, outstanding Shares of Northstar Stock
which are held by a shareholder who has properly preserved and
perfected dissenters' rights with respect to such Shares pursuant to
Section 302A.471 and 302A.473 of the MBCA shall not be converted into
the right to receive the Merger Consideration for the Shares and shall
be treated in accordance with those provisions of Minnesota law unless
and until the right of such shareholder to payment for such Shares
under Section 302A.473 of the MBCA shall cease.
(b) If any holder of Shares shall effectively withdraw or lose (through
failure to perfect or otherwise) such holder's right to payment for any
of such holder's Shares under Section 302A.473 of the MBCA, then as of
the later of the Effective Time or the occurrence of such event, each
such Share shall automatically be converted into the right to receive
the Merger Consideration, without interest thereon.
(c) Each holder of Shares who becomes entitled, pursuant to the
provisions of Section 302A.473 of the MBCA, to payment of the fair
value of any of such holder's Shares shall receive payment therefor
from the Surviving Corporation (or from the Disbursing Agent referred
to below on behalf of the Surviving Corporation) pursuant to such
provisions. Northstar shall give Buyer and Buyer Subsidiary prompt
notice upon receipt by Northstar at any time prior to the Effective
Time of any notice of intent to demand payment of the fair value for
Shares under such Section and any withdrawal of any such notice of
intent to demand payment.
1.8 PAYMENT FOR SHARES.
(a) At or before the Effective Time, Buyer or Buyer Subsidiary shall
deposit in immediately available funds with Bank One, Dallas, Texas
("Bank One"), or any other disbursing agent that is selected by Buyer
and reasonably satisfactory to Northstar (the "Disbursing Agent"), an
amount equal to the sum of the following: (i) the product of the number
of Shares of Northstar Stock issued and outstanding immediately prior
to the Effective Time (other than Shares held of record, if any, by
Buyer or Buyer Subsidiary), prorated for fractional shares, times the
Merger Consideration; (ii) for each Stock Option other than the
Xxxxxxxxxx Options, the product of the number of Shares of Northstar
Stock subject to such Stock Option immediately prior to the Effective
Time times the difference between the Merger Consideration and the per
share exercise price of such Stock Option immediately prior to the
Effective Time (the "Stock Option Exercise Price") (the aggregate of
such amounts being hereafter referred to as the "Fund"); and (iii)
33.33% of the Bonus Fund contemplated by Section 5.9 hereof. Out of the
Fund, the Disbursing Agent shall, pursuant to irrevocable instructions
from the holders of Northstar Stock with respect to payment referred to
in Section 1.6(a), pursuant to irrevocable instructions from the
holders of Stock Options with respect to payment referred to in Section
1.6(d), pursuant to irrevocable instructions from the Surviving
Corporation with respect to payments referred to in Section 1.7 and
pursuant to the provisions of Section 5.9, make
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the payments referred to in Sections 1.6(a), 1.6(d), 1.7 and 5.9
hereof, subject to the requirements of paragraphs (b), (d) and (e)
of this Section 1.8. The Disbursing Agent may invest portions of the
Fund as the Surviving Corporation directs, provided that
substantially all such investments shall be in obligations of or
guaranteed by the United States of America, in commercial paper
obligations receiving the highest rating from either Xxxxx'x
Investors Service, Inc. or Standard & Poor's Corporation, or in
certificates of deposit, bank repurchase agreements or bankers'
acceptances of commercial banks with capital exceeding $100,000,000
(collectively, "Permitted Investments"), or in money market funds
which are invested solely in Permitted Investments. Any net profit
resulting from, or interest or income produced by, such investments
shall be payable to the Surviving Corporation. Any amount remaining
in the Fund one (1) year to the day after the Effective Time may be
refunded to the Surviving Corporation at its option; PROVIDED,
however, that the Surviving Corporation shall be liable for any cash
payments required to be made thereafter pursuant to Sections 1.6(a)
and 1.7 hereof, this paragraph (a) of this Section 1.8 and paragraph
(e) of this Section 1.8.
(b) As soon as practicable after the Effective Time, the Disbursing
Agent shall mail to each holder of record (other than Buyer and Buyer
Subsidiary and those holders who have exercised dissenters' rights
pursuant to Section 302A.473 of the MBCA and have not subsequently
withdrawn or lost such rights) of a certificate or certificates which
immediately prior to the Effective Time represented issued and
outstanding Shares of Northstar Stock, a form letter of transmittal
(the "Letter of Transmittal") for return to the Disbursing Agent, and
instructions for use in effecting the surrender of certificates and to
receive cash for each of such holder's Shares of Northstar Stock
pursuant to Section 1.6(a) hereof. The Letter of Transmittal shall
specify that delivery shall be effected, and risk of loss and title
shall pass, only upon proper delivery of such certificate or
certificates to the Disbursing Agent. The Disbursing Agent, as soon as
practicable following receipt of any such certificate or certificates,
together with the Letter of Transmittal duly executed and any other
items specified by the Letter of Transmittal, shall pay, by check or
draft, to the person entitled thereto, the amount determined by
multiplying (i) the number of Shares of Northstar Stock represented by
the certificate or certificates so surrendered (pro-rated for
fractional shares) by (ii) the Merger Consideration. No interest will
be paid or accrued on the cash payable upon the surrender of the
certificates or certificates.
(c) The Disbursing Agent, as soon as practicable following receipt of
irrevocable instructions from the holders of Stock Options, other than
the Xxxxxxxxxx Options, pursuant to the Stock Option Exercise and Sale
Agreements (as defined in Section 5.5), shall pay, by check or draft to
each holder thereof the amount determined by multiplying the number of
Shares of Northstar Stock subject to such Stock Option immediately
prior to the Effective Time times the difference between the Merger
Consideration and the Stock Option Exercise Price of such Stock Option
immediately prior to the Effective Time.
(d) In the event any such certificate or certificates shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact
by the person claiming such
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certificate or certificates to have been lost, stolen or destroyed,
the amount to which such person would have been entitled under
Section 1.8(b) hereof but for failure to deliver such certificate or
certificates to the Disbursing Agent shall nevertheless be paid to
such person, provided that the Surviving Corporation may, in its
sole discretion and as a condition precedent to such payments
require such person to give the Surviving Corporation a bond in such
sum as it may reasonably direct as indemnity against any claim that
may be had against the Surviving Corporation with respect to the
certificate or certificates alleged to have been lost, stolen or
destroyed.
(e) In addition to the foregoing, if any holder of Shares shall become
entitled to receive payment for such Shares pursuant to Section
302A.473 of the MBCA, the Surviving Corporation shall give written
instructions to the Disbursing Agent to pay either to such holder or to
the Surviving Corporation the amount to which such holder is entitled,
but not to exceed the product of (i) the number of Shares with respect
to which such holder has become entitled to receive payment pursuant to
Section 302A.473 of the MBCA (pro-rated for fractional shares), times
(ii) the Merger Consideration (which instructions shall, if funds are
to be released to the Surviving Corporation, be accompanied, by a
certificate of the Surviving Corporation that any funds released will
be remitted to such holder in accordance with said Section 302A.473),
and any remaining payment to which such holder is entitled shall be
made by the Surviving Corporation.
1.9 NO FURTHER RIGHTS OR TRANSFERS. At and after the Effective Time,
all Shares issued and outstanding immediately prior to the Effective Time
(including without limitation fractional shares) shall be canceled and cease to
exist, and each holder of a certificate or certificates that represented Shares
shall cease to have any rights as a shareholder of Northstar with respect to the
Shares represented by such certificate or certificates, except for the right to
surrender such holder's certificate or certificates in exchange for the Merger
Consideration for each Share represented by the certificate or certificates or
to perfect such holder's right to receive payment for such holder's Shares
pursuant to Section 302A.473 of the MBCA and Section 1.7 hereof if such holder
has validly exercised and not withdrawn or lost such holder's right to receive
payment for such holder's Shares pursuant to Section 302A.473 of the MBCA, and
no transfer of Shares shall be made on the stock transfer books of the Surviving
Corporation.
ARTICLE II
CLOSING
2.1 TIME AND PLACE. Subject to the provisions of Articles VI and VII
hereof, the closing (the "Closing") of the transactions contemplated hereby
shall take place at the offices of Parsinen Xxxxxx Xxxxxxx & Xxxxxxx, P.A. on
the same business day as, and promptly following, the Special Meeting of the
shareholders of Northstar to be called pursuant to Section 5.2 hereof (the
"Shareholder Meeting"), or at such other place or at such other time as
Northstar and Buyer may agree upon for the Closing to take place. The date on
which the Closing occurs is referred to herein as the "Closing Date."
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2.2 DELIVERIES AT CLOSING.
(a) At the Closing there shall be delivered to Northstar, Buyer and
Buyer Subsidiary the opinions, certificates, and other documents and
instruments the delivery of which is contemplated under Article VI
hereof.
(b) At the Closing, Northstar and Buyer Subsidiary shall cause the
Articles of Merger to be filed and recorded in accordance with the
provisions of Section 302A.615 of the MBCA and shall take any and all
other lawful actions and do any and all other lawful things necessary
to cause the Merger to become effective.
(c) Subject to the right of the Surviving Corporation to receive a
refund of amounts remaining in the Fund one year after the Closing Date
as provided in Section 1.8 hereof, Buyer or Buyer Subsidiary shall
irrevocably deposit with the Disbursing Agent the amount designated as
the Fund and 33% of the Bonus Fund as described in Section 1.8(a).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NORTHSTAR
Northstar represents and warrants to Buyer, Buyer Subsidiary and their
respective successors and assigns that, except as otherwise disclosed to Buyer
in a disclosure schedule of Northstar dated the date hereof (the "Disclosure
Schedule") or as set forth in the Financial Statements, as hereafter described:
3.1 ORGANIZATION, STANDING AND QUALIFICATION. Each of Northstar and its
one operating subsidiary, General Financial Supply, Inc. ("GFS"), is a
corporation duly organized, validly existing and in good standing under the laws
of the States of Minnesota and Iowa, respectively and has the requisite
corporate power and authority to own, lease or operate all properties and assets
owned, leased or operated by it and to carry on its business as it is now being
conducted. Each of Northstar and GFS is duly qualified as a foreign corporation
to do business, and is in good standing, in each jurisdiction where the
character of its properties owned, leased or operated, or the nature of its
activities, makes such qualification necessary, except such jurisdictions where
failure to be so qualified would not have a material adverse effect upon the
consolidated business, operations, properties, assets or the condition,
financial or otherwise (a "Material Adverse Effect"), of Northstar. Northstar
has delivered to Buyer a certified copy of its Articles of Incorporation and its
Bylaws and those of GFS. Each copy is complete and correct as of the date
hereof.
3.2 CAPITALIZATION. The authorized capital stock of Northstar consists
of 5,000,000 Shares of Northstar Stock, and 200,000 shares of Northstar
Preferred Stock. As of October 31, 1999, 2,744,708 Shares of Northstar Stock
were issued and outstanding and an aggregate of 532,500 Shares of Northstar
Stock were reserved for issuance pursuant to outstanding Stock Options (all of
which will be fully vested immediately prior to the Effective Time) and no
shares of Northstar Preferred Stock were issued and outstanding. Except for the
Stock Options and the Stock Option Exercise and Sale Agreements, there are no
outstanding subscriptions, options,
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warrants, calls or other agreements or commitments by which Northstar is
bound in respect of the capital stock of Northstar, whether issued or
unissued, and no outstanding securities convertible into or exchangeable for
any such capital stock. Northstar has made available to Buyer copies of the
Stock Options. The identities of all holders of Stock Options and the number
of shares subject to Stock Options are listed in Section 3.2 of the
Disclosure Schedule.
3.3 AUTHORIZATION AND EXECUTION. Northstar has the corporate power to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by Northstar have been duly authorized by the Board of Directors of Northstar
(the "Northstar Board") and, except for the approval of this Agreement by the
shareholders of Northstar required by the MBCA, no further corporate action is
necessary on the part of Northstar to consummate the transactions contemplated
hereby. This Agreement constitutes the legal, valid and binding obligation of
Northstar, enforceable against Northstar in accordance with its terms, except to
the extent that enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a court of law or equity).
3.4 NON-CONTRAVENTION. Except as disclosed in Section 3.4 of the
Disclosure Schedule, neither the execution and delivery of this Agreement by
Northstar, nor the consummation by Northstar of the transactions contemplated
hereby, will (i) conflict with or result in a breach of the Articles of
Incorporation or Bylaws as currently in effect of Northstar, (ii) except for any
applicable requirements under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976 (the "Xxxx-Xxxxx-Xxxxxx Act") and the filing of Articles of Merger with
the Secretary of State of the State of Minnesota, require the consent or
approval of any governmental authority having jurisdiction over any of the
business or assets of Northstar, (iii) violate any statute or regulation
applicable to Northstar or GFS, or (iv) result in a breach of, or constitute a
default or an event which, with the passage of time or the giving of notice, or
both, would constitute a default, give rise to a right of termination,
cancellation or acceleration, create any entitlement to any payment or benefit,
require the consent of any third party or result in the creation of any lien on
the assets of Northstar under, any other instrument, contract or agreement to
which Northstar is a party or by which the properties or assets of Northstar may
be bound (except, in the case of clauses (ii), (iii) and (iv), where such
violation, breach, default, termination, cancellation, acceleration, payment,
benefit or lien, or the failure to make such filing or obtain such consent or
approval, would not impair the ability of Northstar to consummate the
transactions contemplated by this Agreement and would not have, individually or
in the aggregate, a Material Adverse Effect or which will be waived, cured,
terminated or obtained prior to the Effective Time).
3.5 FINANCIAL STATEMENTS. Except as disclosed in Section 3.22 of the
Disclosure Schedule, Northstar's audited consolidated financial statements
included in its annual reports on Form 10-K for the fiscal years ended October
31, 1999 and 1998, respectively, and Form 10-KSB for the fiscal year ended
October 31, 1997 (the "Financial Statements") have been prepared on the basis of
Northstar's books and records and in conformity with generally accepted
accounting principles consistently applied (except as may be indicated in the
notes thereto) and present fairly
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the consolidated financial position of Northstar as of such dates and the
results of its consolidated operations for the periods then ended.
3.6 ABSENCE OF CERTAIN CHANGES/EVENTS. Except as described in Section
3.6 and elsewhere in the Disclosure Schedule or as otherwise contemplated by
this Agreement, since October 31, 1999, neither Northstar nor GFS has (i) split,
combined or reclassified any shares of its capital stock or made any other
changes in its equity capital structure; (ii) purchased, redeemed or otherwise
acquired, directly or indirectly, any shares of its capital stock; (iii)
declared, set aside or paid any dividend or made any other distribution in
respect of shares of its capital stock; (iv) issued any shares of its capital
stock (except pursuant to the exercise of outstanding Stock Options) or any
options, rights or warrants to purchase any such capital stock or any securities
convertible into or exchangeable for any such capital stock, except for and the
acceleration of vesting of the Stock Options; (v) purchased any capital assets
or made any capital expenditures for a price or in an amount which exceeded
$1,000,000 in the aggregate; (vi) sold, leased, encumbered, mortgaged or
otherwise disposed of any material assets or properties, other than in the
ordinary course of business or the issuance of Permitted Liens (as defined in
Section 3.10 below); (vii) incurred, assumed or guaranteed any indebtedness for
money borrowed other than in the ordinary course of business and intercompany
indebtedness; (viii) granted any increases in employee benefits; (ix) granted
any increases in employee compensation other than in the normal course of
business; (x) changed or modified in any material respect any existing
accounting method, principle or practice other than as required by generally
accepted accounting principals: (xi) voluntarily terminated any instrument,
contract or agreement which, but for such termination, would have constituted a
Material Contract (other than terminations of instruments, contracts or
agreements which expired in accordance with their terms); (xii) entered into any
commitment to do any of the foregoing; or (xiii) suffered any business
interruption, damage to or destruction of its properties or other incident,
occurrence or event (other than changes generally applicable to the industry in
which Northstar and GFS are involved or changes in general economic conditions)
which has had or could reasonably be expected to have (after giving effect to
insurance coverage) a Material Adverse Effect.
3.7 [INTENTIONALLY BLANK]
3.8 TAX MATTERS.
(a) Except as set forth in Section 3.8 of the Disclosure Schedule, and
Northstar's 1999 consolidated tax return, for which an extension was
filed, each of Northstar and GFS (as applicable) has timely filed all
tax returns and reports required to be filed by it, and has paid in a
timely manner all taxes owed with respect to such returns. Such tax
returns to Northstar's knowledge were correct and complete in all
material respects. All taxes known by Northstar or GFS to be owed have
been paid. Northstar and GFS have withheld and paid all taxes required
to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder, or
other third party.
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(b) No claim known to Northstar has been made by an authority in a
jurisdiction where Northstar or GFS does not file tax returns that
Northstar or GFS may be subject to taxation by that jurisdiction. There
are no security interests on any of the assets of Northstar or GFS that
arose in connection with any failure (or alleged failure) to pay any
tax.
(c) There are no pending audits or investigations or, to the best
knowledge of Northstar, audits or investigations threatened within the
last three years relating to any taxes for which Northstar or GFS may
become liable. No material deficiencies for any taxes have been
asserted or assessed against Northstar or GFS that have not been
settled. There are no agreements in effect to extend the period of
limitations for the assessment or collection of any taxes for which
Northstar or GFS may become liable, and no requests for any such
agreements are pending.
(d) Neither Northstar nor GFS has (a) waived any statute of limitations
in respect of taxes, (b) filed a consent under Code Section341(f)
concerning collapsible corporations, or (c) been a United States real
property holding corporation within the meaning of Code
Section 897(c)(2) during the applicable period specified in Code
Section 897(c)(1)(A)(ii). Except for the existing Management Agreements
with its senior executive officers, neither Northstar nor GFS has made
any payments, is obligated to make any payments, or is a party to any
agreement that under certain circumstances could obligate it to make
any payments that will not be deductible under Code Section 280G.
(e) For purposes of this Agreement, the term "tax" shall include (i)
all federal, state, local and foreign taxes, assessments, levies,
duties, license fees, registration fees, withholdings, or other similar
governmental charges, and (ii) any interest, penalties or additions to
tax imposed on a tax described herein.
(f) Northstar has no tax sharing agreements or similar agreements.
3.9 REAL PROPERTY AND LEASEHOLD PROPERTY. Northstar's Form 10-K for its
1999 fiscal year contains a description of (i) a parcel of real property owned
by Northstar located in Brooklyn Park, Minnesota (the "Minnesota Fee Property"),
and (ii) a parcel of real property owned by GFS located in Nevada, Iowa (the
"Iowa Fee Property"). The Minnesota Fee Property and the Iowa Fee Property are
hereinafter sometimes collectively referred to as the "Fee Properties" with the
legal descriptions of the Fee Properties included in Section 3.9 of the
Disclosure Schedule. Northstar's Form 10-K for its 1999 fiscal year contains a
description of five (5) properties leased to either Northstar or GFS (the
"Leases") with the parties to the leases and the common address of such premises
more particularly described in Section 3.9 of the Disclosure Schedule
(collectively, the "Leased Properties"). The Fee Properties and the Leased
Properties are hereinafter sometimes collectively referred to as the "Real
Property."
(a) Northstar and/or GFS, as the case may be, owns good and marketable
title to the Fee Properties, and have valid leasehold interests in the
Leased Properties, subject to in both cases liens of mortgages and
other security interests in the Real Property and other
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exceptions as listed in Section 3.9 of the Disclosure Schedule and,
in all cases, subject to standard and customary exceptions which do
not materially and adversely affect Northstar's or GFS's, as the
case may be, ownership, use, possession or rights in and to the Real
Property;
(b) All of the Leases are in full force and effect and are valid,
binding and enforceable in accordance with their respective terms,
except as may be subject to and limited by the effect of (i)
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereinafter in effect relating
to or affecting creditors' rights, and (ii) general principles of
equity including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing. There does not exist under
any of the Leases any event which with notice or lapse of time or both
would constitute a default that would have a Material Adverse Effect;
(c) There are no claims, actions, suits or proceedings against
Northstar or GFS affecting any of the Real Property pending, or to the
knowledge of Northstar, threatened, which would have a Material Adverse
Effect;
(d) None of the Real Property is subject to any liens, claims or
encumbrances except (i) liens, claims, encumbrances disclosed on
Section 3.9 of the Disclosure Schedule, (ii) liens for taxes and
assessments not yet due, or (iii) other recorded use and building
restrictions, and customary and normal easements for utilities and
zoning restrictions, which do not materially adversely affect
Northstar's or GFS's ownership, use, possession or rights in and to the
Real Property; and
(e) All of the Real Property is serviced by all utilities as are
necessary for the current conduct of the business of Northstar and GFS
and, to Northstar's knowledge, there are no threatened curtailment or
reduction of any such utilities.
(f) Neither the execution, delivery or performance of this Agreement
will result in the termination of any of the Leases or create in the
lessors thereunder the right to terminate any of the Leases.
3.10 PERSONAL PROPERTY. Northstar and/or GFS (as applicable) has good
and valid title to all material personal property owned by it, free and clear of
all liens, security interests, charges and encumbrances, except (i) liens for
taxes, assessments and other governmental charges which are not due and payable,
(ii) mechanics', materialmens', carriers', workmens', warehousemens',
repairmens', landlords' or other like liens securing obligations which are not
due and payable, (iii) liens, security interests, charges and encumbrances
evidenced by any lease, contract or agreement which is described in Section 3.10
of the Disclosure Schedule, (iv) imperfections of title and liens, charges and
encumbrances which do not materially detract from the value or materially
interfere with the present use of the property subject thereto or affected
thereby, and (v) other liens, security interests, charges and encumbrances
described in the Disclosure Schedule (collectively, the "Permitted Liens").
11
3.11 MATERIAL CONTRACTS. Except as disclosed in Section 3.11 of the
Disclosure Schedule, or any other representation in this Agreement, neither
Northstar nor GFS is a party to or bound by any:
(a) employment, consulting, independent contractor or similar service
contract (other than those that are terminable by Northstar or GFS
without cost or penalty upon 60 days' or less notice);
(b) material sales representative or distributorship agreement;
(c) operating lease, whether as lessor or lessee, with respect to any
real property or any tangible personal property (except the Leases or
any lease of tangible personal property calling for payments of less
than $25,000 per year);
(d) material contract, whether as licensor or licensee, for the license
of any patent, know-how, trademark, tradename, servicemark, copyright
or other intangible asset (other than non-negotiated licenses for
commercially available computer software);
(e) material loan agreement, indenture or other instrument, contract or
agreement under which any money has been borrowed or loaned or any
note, bond or other evidence of indebtedness has been issued, except as
specified in the Financial Statements;
(f) mortgage, security agreement, conditional sales contract, capital
lease or similar agreement which effectively creates a lien on any
assets of Northstar or any of its Subsidiaries (other than any
conditional sales contract, capital lease or similar agreement which
creates a lien only on tangible personal property and under which there
exists an aggregate unpaid liability of less than $25,000 per contract,
lease or agreement);
(g) contract for the purchase or sale of capital assets or for the
making of capital expenditures under which there exists an aggregate
unpaid liability of $200,000 or more per contract;
(h) purchase or sale order for merchandise or supplies which (i) was
not entered into in the ordinary course of business, involves payments
of $50,000 or more and is not terminable by Northstar or any of its
Subsidiaries without cost or penalty upon 60 days' or less notice, or
(ii) is a material standing or similar order with a remaining term of
more than one year and is not terminable by Northstar or any of its
Subsidiaries without cost or penalty upon 60 days' or less notice;
(i) contract for advertising or promotional services to be rendered for
Northstar or GFS which involves payment of $25,000 or more per year
(other than those that are terminable by Northstar or any of its
Subsidiaries without cost or penalty upon 60 days' or less notice);
12
(j) contract restricting Northstar or GFS in any material respect from
engaging in business or from competing with any other parties; plan of
reorganization; partnership or joint venture agreement; or other
contract not made in the ordinary course of business which involves
payment of $50,000 or more per year and is not terminable by Northstar
of any of its Subsidiaries without cost or penalty upon 60 days' or
less notice; or
(k) customer contract for the provision by Northstar or GFS of goods
and/or services in excess of $500,000 per year.
All of the foregoing are hereinafter collectively called "Material Contracts."
To the extent Material Contracts are evidenced by documents, true and complete
copies thereof have been made available to Buyer. Each Material Contract is in
full force and effect. Neither Northstar nor GFS nor, to the knowledge of
Northstar, any other party, is in breach of or in default under any of the
Material Contracts, except for breaches or defaults which have not had and could
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Except as disclosed in Section 3.11 of the Disclosure Schedule,
no Material Contract will terminate as a result of the Merger.
3.12 INTELLECTUAL PROPERTY. Section 3.12 of the Disclosure Schedule
contains a complete and correct list of all material patents and registered
trademarks, tradenames, servicemarks and copyrights, and all applications for
any of the foregoing (collectively, the "Proprietary Rights"), held by Northstar
or GFS. Neither Northstar nor GFS has received any written notice that any
Proprietary Rights have been declared unenforceable or otherwise invalid by any
court or governmental agency. To the knowledge of Northstar, there is no
material existing infringement, misuse or misappropriation of any Proprietary
Rights by others. Except as disclosed on the Disclosure Schedule, neither
Northstar nor GFS has received any written notice alleging that the operation of
their respective businesses infringes in any material respect upon the
intellectual property rights of others.
3.13 LITIGATION. There are no litigation, arbitration or administrative
proceedings, abatement orders or investigations of any kind pending or, to the
knowledge of Northstar, threatened within the last three years against
Northstar, GFS or any of their respective officers, employees or directors in
connection with the business or affairs of Northstar or GFS (except those in
which Northstar or GFS is a plaintiff directly but not derivatively), which (i)
if decided adversely to Northstar or GFS, or such officer, employee or director,
would have, individually or in the aggregate, a Material Adverse Effect, or (ii)
seek to enjoin or otherwise challenges the consummation of the transactions
contemplated by this Agreement. Neither Northstar nor GFS is identified as a
party subject to any material restrictions or limitations under any judgment,
order or decree of any court, administrative agency or commission or other
governmental authority.
3.14 PERMITS, LICENSES, AUTHORIZATIONS. Except as set forth in Section
3.14 of the Disclosure Schedule, each of Northstar and GFS has all licenses,
franchises, permits and other governmental authorizations necessary to conduct
its business. Neither Northstar nor GFS is in violation of any license,
franchise, permit or other governmental authorization the result of which would
have a Material Adverse Effect.
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3.15 NO BROKERS OR FINDERS. Except for U.S. Bancorp Xxxxx Xxxxxxx, Inc.
("Piper"), Northstar has not engaged any investment banker, broker or finder in
connection with the transactions contemplated hereby. The Surviving Corporation
shall be liable for and shall pay the all unpaid obligations of Northstar under
its engagement letter with Piper.
3.16 RETIREMENT AND BENEFIT PLANS.
(a) Each employee pension benefit plan ("Pension Plan") as such term is
defined in Section 3 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and each deferred compensation, bonus,
incentive, stock incentive, option, stock purchase or other employee
benefit plan, agreement, commitment or arrangement ("Benefit Plan"),
which is currently maintained by Northstar or GFS or to which Northstar
or GFS currently contributes or is under any current obligation to
contribute (collectively, the "Employee Plans" and individually, an
"Employee Plan") is listed in Section 3.16 of the Disclosure Schedule
and, to the extent an Employee Plan is evidenced by documents, true and
complete copies thereof have been made available to Buyer.
(b) Each of Northstar and GFS has made on a timely basis all
contributions or payments required to be made by it pursuant to the
terms of the Employee Plans, ERISA, the Code or other applicable laws,
unless such contributions or payment that have not been made are
immaterial in amount and the failure to make such payments or
contributions will not materially and adversely affect the Employee
Plans. No Pension Plan is a "defined benefit plan" within the meaning
of ERISA.
(c) Each Employee Plan (and any related trust or other funding
instrument) is being administered in all material respects in
compliance with its terms and in both form and operation is in
compliance in all material respects with the applicable provisions of
ERISA, the Code and other applicable laws and regulations, and all
material reports required to be filed with any governmental agency with
respect to any Pension Plan have been timely filed.
(d) There are no material litigation, arbitration or administrative
proceedings pending or, to the knowledge of Northstar, threatened
against Northstar or GFS or any plan fiduciary by the Internal Revenue
Service, the U.S. Department of Labor, the Pension Benefit Guaranty
Corporation or any participant or beneficiary with respect to any
Employee Plan. Neither Northstar nor GFS nor, to the knowledge of
Northstar, any plan fiduciary of any Pension Plan has been engaged in
any transaction in violation of Section 460(a) or (b) of ERISA for
which no exemption exists under Section 408 of ERISA or any "prohibited
transaction" as defined in Section 4975(a)(i) of the Code for which no
exemption exists under Section 4975(e)(ii) or 4975(d) of the Code, or
is subject to any excise tax imposed by the Code or ERISA with respect
to any Employee Plan.
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(e) Neither Northstar nor GFS has have ever been a sponsor of,
contributed to or been under an obligation to contribute to, any
"multi-employer plan," as such term is defined in Section 3(37) of
ERISA.
3.17 ENVIRONMENTAL AND SAFETY LAWS. To the knowledge of Northstar,
except as set forth in Section 3.17 to the Disclosure Schedule, neither
Northstar nor GFS is in violation of any applicable federal, state, local
statute, law, common law, or regulation relating to environmental matters. To
the knowledge of Northstar, except as set forth in Section 3.17 to the
Disclosure Schedule, neither Northstar nor GFS, or any other entity or person
has, at any time, with respect to the Real Property (i) "released,"
"discharged," or actively or passively consented to the "release," "discharge,"
or "threatened release" of any Hazardous Substance (as defined below); (ii)
taken any action in "response" to a "release;" or (iii) failed to give notice of
the "discharge" if required by applicable law; or (iv) otherwise engaged in any
activity or omitted to take any action which could subject it to claims for
intentional or negligent torts, strict or absolute liability, either pursuant to
statute or common law, in connection with Hazardous Substances located in or
about their respective properties, including the generating, transporting,
treating, storage or manufacture of any Hazardous Substance. The terms set
within quotation marks above shall have the meaning given to them in the
Comprehensive Environmental Response and Liability Act, 42 U.S.C. Section 6901,
et. seq., as amended by the Super Fund Amendments and Reauthorization Act of
1986 ("CERCLA"), RECRA (as defined below), or any other federal, state or local
environmental law, including but not limited to the Minnesota Environmental
Response and Liability Act, Minn. Stat. Section 115B ("XXXXX") and the Minnesota
Petroleum Tank Release Cleanup Act, Minn. Stat. Section 115C, (all such laws
being referred to collectively as the "Environmental Laws"). "Hazardous
Substances" means hazardous waste, urea formaldehyde, polychlorinated biphenyls,
asbestos, petroleum, natural gas, radon, synthetic gas used for fuel or mixtures
thereof, any materials related to any of the foregoing, and substances defined
as "hazardous substances," "toxic substances," "hazardous waste," "pollutant,"
"contaminant," "source material," "special nuclear materials" and "by-product
material" in CERCLA, the Resource Conservation Recovery Act as amended 42 U.S.C.
Section 6901, et. seq. ("RECRA"), the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et. seq., the Clean Water Act, 33 U.S.C. Section 1251, et.
seq., XXXXX and all other federal, state, local and governmental environmental
laws or any regulations promulgated pursuant to any of the foregoing statutes.
3.18 AFFILIATE TRANSACTIONS. Except as described in Northstar's Annual
Report on Form 10-K for the fiscal year ended October 31, 1999, no affiliate of
Northstar or GFS (other than the other of Northstar or GFS) (i) furnishes or
sells material services or products that Northstar or GFS furnishes or sells or
currently proposes to furnish or sell, (ii) purchases from or sells or furnishes
to Northstar or GFS any material goods or services, or (iii) owns or leases any
material property, real or personal, that is used by Northstar or GFS.
3.19 LABOR MATTERS. Neither Northstar nor GFS is suffering an existing
labor dispute or disturbance which has had or could reasonably be expected to
have a Material Adverse Effect. The employees of Northstar and GFS are not
represented by any union and there are no pending or, to the knowledge of
Northstar, threatened representation questions concerning the employees of
Northstar or GFS. Neither Northstar nor GFS is subject to any collective
bargaining
15
agreement with any employee union. There are no EEOC claims pending against
Northstar or GFS nor, to the knowledge of Northstar, are any such claims
threatened.
3.20 INSURANCE. Section 3.20 of the Disclosure Schedule contains a list
of all insurance policies maintained by Northstar and GFS, together with a brief
description of the coverages afforded thereby. All of such insurance policies
are in full force and effect.
3.21 PROXY STATEMENT. None of the information supplied by or on behalf
of Northstar for inclusion in the Proxy Statement (as hereinafter defined) will,
at the time that the Proxy Statement is mailed to the shareholders of Northstar,
and at the time of the meeting of the shareholders to which the Proxy Statement
relates (the "Shareholder Meeting") contain any untrue statement of a material
fact, or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading or to correct any statement in any earlier
communication with respect to the solicitation of any proxy or approval for the
Shareholder Meeting (except that no representation is made by Northstar with
respect to statements made in the Proxy Statement based on information furnished
to Northstar by Buyer or Buyer Subsidiary specifically for inclusion in the
Proxy Statement).
3.22 1999 AND 1998 FORMS 10-K. Except as disclosed in Section 3.22 of
the Disclosure Schedule, none of the information supplied by or on behalf of
Northstar for inclusion in its Annual Reports on Form 10-K for the fiscal years
ended October 31, 1999 and 1998, respectively, contained any untrue statement of
a material fact, or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except for information
which was subsequently clarified or corrected in subsequent reports filed
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
BUYER AND BUYER SUBSIDIARY
Buyer and Buyer Subsidiary, jointly and severally, hereby represent and
warrant to Northstar and its successors and assigns that:
4.1 ORGANIZATION, STANDING, EQUITY OWNERSHIP. Each of Buyer and Buyer
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of its state of organization. Buyer owns all of the
issued and outstanding stock of Buyer Subsidiary. Buyer has delivered to
Northstar certified copies of both its and Buyer Subsidiary's Articles or
Certificate of Incorporation and Bylaws. Each copy is complete and correct as of
the date hereof.
4.2 AUTHORIZATION AND EXECUTION. Each of Buyer and Buyer Subsidiary has
the corporate power to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Buyer and Buyer Subsidiary have been duly authorized by their
respective Boards of Directors and by Buyer
16
as the sole shareholder of Buyer Subsidiary, and no further corporate action
is necessary on the part of Buyer or Buyer Subsidiary to consummate the
transactions contemplated hereby. This Agreement constitutes the legal, valid
and binding obligation of each of Buyer and Buyer Subsidiary, enforceable
against Buyer and Buyer Subsidiary in accordance with its terms, except to
the extent that enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a court of law or equity).
4.3 NON-CONTRAVENTION. Neither the execution and delivery of this
Agreement by Buyer or Buyer Subsidiary, nor the consummation by Buyer and Buyer
Subsidiary of the transactions contemplated hereby, will (i) conflict with or
result in a breach of the Articles or Certificate of Incorporation or Bylaws as
currently in effect of Buyer or Buyer Subsidiary, respectively, (ii) except for
any applicable requirements under the Xxxx-Xxxxx-Xxxxxx Act and the filing of
Articles of Merger with the Secretary of State of the State of Minnesota,
require the consent or approval of any governmental authority having
jurisdiction over any of the business or assets of Buyer or Buyer Subsidiary,
(iii) violate any statute or regulation applicable to Buyer or Buyer Subsidiary,
or (iv) result in a breach of, or constitute a default or an event which, with
the passage of time or the giving of notice, or both, would constitute a
default, give rise to a right of termination, cancellation or acceleration,
create any entitlement to any payment or benefit, require the consent of any
third party or result in the creation of any lien on the assets of Buyer or
Buyer Subsidiary under, any other instrument, contract or agreement to which
Buyer or Buyer Subsidiary is a party or by which the properties or assets of
Buyer or Buyer Subsidiary may be bound (except, in the case of clauses (ii),
(iii) and (iv), where such violation, breach, default, termination,
cancellation, acceleration, payment, benefit or lien, or the failure to make
such filing or obtain such consent or approval, would not impair the ability of
Buyer or Buyer Subsidiary to consummate the transactions contemplated by this
Agreement).
4.4 LITIGATION. There is no litigation, arbitration, administrative
proceedings, abatement orders or investigations of any kind pending or, to the
knowledge of Buyer or Buyer Subsidiary, threatened against Buyer or Buyer
Subsidiary which seeks to enjoin or otherwise challenges the consummation of the
transactions contemplated by this Agreement.
4.5 NO BROKERS OR FINDERS. Neither Buyer nor Buyer Subsidiary has
engaged any investment banker, broker or finder in connection with the
transactions contemplated hereby.
4.6 AVAILABILITY OF FUNDS. Buyer shall obtain and deliver to Northstar
upon execution of this Agreement a loan commitment from Bank One sufficient to
enable it to consummate the transactions contemplated by this Agreement, and the
consummation of such transactions will not render Buyer insolvent nor cause
Buyer, Buyer Subsidiary or Northstar to be in violation of any corporate statute
restricting the ability of any of them to make distributions on account of its
capital stock.
4.7 PROXY STATEMENT. None of the information supplied by or on behalf
of Buyer or Buyer Subsidiary for inclusion in the Proxy Statement will, at the
time the Proxy Statement is
17
mailed to the shareholders of Northstar, and at the time of the Shareholder
Meeting, contain any untrue statement of a material fact, or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made,
not misleading or to correct any statement in any earlier communication with
respect to the solicitation of any proxy or approval for the Shareholder
Meeting.
ARTICLE V
CONDUCT AND TRANSACTIONS PRIOR TO THE EFFECTIVE TIME
5.1 OPERATION OF BUSINESS OF NORTHSTAR BETWEEN THE DATE OF THIS
AGREEMENT AND THE EFFECTIVE TIME. During the period from the date hereof to the
Effective Time, except as otherwise consented to in writing by Buyer or as
expressly contemplated by this Agreement:
(a) Northstar will use all reasonable efforts to preserve substantially
intact its business organization, keep available the services of its
present officers and key employees, and preserve its present
relationships with entities and persons having material business
dealings with Northstar.
(b) Northstar shall conduct its business and operations in the ordinary
and usual course in substantially the same manner as heretofore
conducted.
(c) Northstar shall not (i) amend its Articles of Incorporation or
Bylaws, (ii) increase or decrease the number of authorized shares of
its capital stock, as set forth in Section 3.2 hereof, (iii) split,
combine or reclassify any shares of its capital stock or make any other
changes in its equity capital structure, (iv) purchase, redeem or
cancel for value, directly or indirectly, any shares of its capital
stock or any options, rights or warrants to purchase any such capital
stock or any securities convertible into or exchangeable for any such
capital stock, or (v) declare, set aside or pay any dividend or other
distribution or payment in cash, stock or property in respect of shares
of its capital stock.
(d) Except as otherwise contemplated by this Agreement, consented to in
writing by Buyer or pursuant to the ongoing exercise of previously
granted Stock Options, Northstar shall not (i) issue, grant, sell or
pledge, or agree to propose to issue, grant, sell or pledge, any shares
of capital stock of Northstar (other than the issuance of Northstar
Stock upon the exercise of Stock Options heretofore granted by
Northstar), or any options, rights or warrants to purchase any such
capital stock or any securities convertible into or exchangeable for
such capital stock, or any stock appreciation rights or performance
shares based upon the value of any such capital stock, and shall not
permit any shares of Northstar Preferred Stock or any options, rights
or warrants to purchase any Northstar Preferred Stock or any securities
convertible into or exchangeable for Northstar Preferred Stock to be
outstanding, (ii) purchase, lease or otherwise acquire (including
without limitation acquisitions by merger, consolidation or stock or
asset purchase) any assets or properties in excess of $25,000, (iii)
sell, lease, encumber, mortgage or otherwise dispose of any assets or
properties which are material to Northstar, other than dispositions in
the ordinary course of business, (iv) waive, release, grant or transfer
any rights of value or
18
modify or change in any material respect any material existing
license, contract or other document, (v) incur any material
indebtedness for money borrowed, (vi) incur any other liability or
obligation, other than in the ordinary course of business, or
assume, guarantee, endorse (other than endorsements of checks in the
ordinary course of business) or otherwise as an accommodation become
responsible for the obligations of any other individual or entity,
(vii) enter into any new material employee benefit plan, program or
arrangement or amend (except as required by law) any existing
employee benefit plan, program or arrangement or any existing
employment, severance or consulting agreements, or, other than in
the ordinary course of business, grant any increases in compensation
or benefits, (viii) adopt any collective bargaining agreement, (ix)
enter into any other transaction, other than in the ordinary course
of business and substantially consistent with past practices (except
for providing a release to its officers and directors), (x) make any
tax election or settle or compromise any material federal, state,
local or foreign income tax liability, (xi) merge or consolidate
with any other corporation, or (xii) enter into any contract,
agreement, commitment or arrangement with respect to any of the
foregoing. Notwithstanding the foregoing, Northstar shall be
permitted to purchase or make arrangements to purchase an extension
of its existing officers' and directors' liability policy for a
premium amount not to exceed $100,000.
(e) Northstar shall promptly advise Buyer of any change in its
consolidated condition (financial or otherwise), properties, assets,
liabilities, business, operations or prospects which is or may
reasonably be expected to be have a Material Adverse Effect.
(f) Northstar shall not, without the consent of Buyer, settle or
compromise any claim with respect to Northstar shareholders who dissent
from the Merger.
5.2 SHAREHOLDER MEETING; PROXY MATERIALS.
(a) Northstar shall cause a meeting of its shareholders to be duly
called and held on not less than twenty (20) days' written notice as
soon as reasonably practicable after the execution of this Agreement
for the purpose of voting on the adoption of this Agreement
("Shareholder Meeting") unless the Northstar Board, in the exercise of
its fiduciary duties after consultation with counsel, shall determine
that such a meeting should not be held.
(b) Northstar will promptly prepare a proxy statement, together with a
form of proxy, with respect to the Shareholder Meeting satisfying all
applicable requirements of Minnesota law and of the Exchange Act, and
the rules and regulations of the Securities and Exchange Commission
thereunder (such proxy statement, together with any amendments thereof
or supplements thereto in each case in the form mailed to Northstar's
shareholders, being herein called the "Proxy Statement") and shall
file with the Securities and Exchange Commission a preliminary form of
Proxy Statement, together with all other filings, if any, required
under the Exchange Act. As to matters in the Proxy Statement
concerning Buyer and Buyer Subsidiary, Northstar shall rely on
information provided by Buyer and Buyer Subsidiary. Northstar will
mail the Proxy Statement not less than twenty (20) days prior to the
Shareholder Meeting referred to in Section 5.2(a) hereof to all
19
shareholders of record of Northstar entitled to vote on the Merger at
their addresses of record on the transfer record of Northstar unless
the Northstar Board, in the exercise of its fiduciary duties after
consultation with counsel, shall determine to withdraw its approval or
recommendation of the Merger and that therefore such mailing should
not be made. If necessary, in light of developments occurring
subsequent to the mailing of the Proxy Statement, Northstar will send
to its shareholders such supplemental proxy materials as may be
necessary to make the Proxy Statement, as so supplemented, not false
or misleading with respect to any material fact on the date of the
Shareholder Meeting, and omitting no material fact necessary to
prevent the Proxy Statement from being misleading.
5.3 ACCESS TO INFORMATION. From the date hereof until the Effective
Time, Northstar will give Buyer and its counsel, financial advisors, auditors
and other authorized representatives as well as those of Buyer Subsidiary
(collectively, the "Buyer Representatives") reasonable access to the offices,
properties, books and records of Northstar and GFS at all reasonable times and
upon reasonable notice, will have instructed the employees, counsel, financial
advisors and auditors of Northstar and GFS to cooperate with Buyer and each such
representative in all reasonable respects in its investigation of the business
of Northstar and GFS. Buyer and each of the Buyer Representatives will conduct
such investigation in a manner as to not unreasonably interfere with the
operations of Northstar and GFS. Buyer shall, and shall cause each of the Buyer
Representatives to hold confidential all information obtained hereunder or
otherwise with respect to Northstar and all analyses, compilations, data,
studies or other documents based in whole or in part on any such information
prepared by or on behalf of Buyer or the Buyer Representatives, not use any
information obtained hereunder or otherwise from Northstar for any purpose other
than evaluating the transactions contemplated by this Agreement and, at
Northstar's request in the event of termination of this Agreement pursuant to
Section 7.1 hereof, return to Northstar all copies of information obtained
hereunder or otherwise from Northstar.
5.4 XXXX-XXXXX-XXXXXX ACT. Each of Northstar, Buyer and Buyer
Subsidiary will file, as soon as practicable, any Notification and Report Forms
and related material that they may be required to file with the Federal Trade
Commission and the Antitrust Division of the United States Department of Justice
under the Xxxx-Xxxxx-Xxxxxx Act, will exercise all reasonable efforts to obtain
an early termination of the applicable waiting period, and will make any further
filings pursuant thereto that may be necessary or advisable.
5.5 STOCK OPTIONS. Northstar shall obtain from all holders of Stock
Options (except the Xxxxxxxxxx Options) duly executed Stock Option Exercise and
Sale Agreements which will provide that the holders thereof will exercise their
Stock Options immediately prior to the Effective Time of the Merger and sell the
Shares thereunder to Northstar in exchange for payment from Buyer in accordance
with Section 1.8(a) and such shares of Northstar Stock underlying such Stock
Options shall be deemed cancelled (the "Stock Option Exercise and Sale
Agreements"). The Stock Option Exercise and Sale Agreements shall be in a form
reasonably satisfactory to Northstar and Buyer. Payment for each Stock Option
other than the Xxxxxxxxxx Options shall be made in cash and be equal to the
product of the number of Shares subject to such Stock Option immediately prior
to the Effective Time times the difference between the Merger Consideration and
the Stock Option Exercise Price immediately prior to the Effective Time.
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5.6 [INTENTIONALLY BLANK].
5.7 VOTING AGREEMENT. Upon execution of the Merger Agreement, holders
of not less than 39% of the outstanding Northstar Common Stock shall execute a
Voting Agreement with Buyer to vote, subject to the provisions thereof, all of
their respective shares of Northstar Common Stock in favor of the Merger.
5.8 TAX MATTERS. Buyer shall prepare or cause to be prepared and file
or cause to be filed all tax returns for Northstar and GFS for all periods
ending on or prior to the Effective Time which are filed after the Effective
Time (other than income tax returns with respect to periods for which a
consolidated, unitary or combined income tax return of Northstar will include
the operations of Northstar and GFS). Such tax returns will report the
disqualifying disposition of the Stock Options. Buyer shall permit Northstar to
review and comment on each such tax return described in the preceding sentence
prior to filing. Buyer and Northstar further agree, upon request, to use their
best efforts to obtain any certificate or other document from any governmental
authority or any other person as may be necessary to mitigate, reduce or
eliminate any tax that could be imposed (including, but not limited to, with
respect to the transactions contemplated hereby).
5.9 BONUS FUND. Buyer or Buyer Subsidiary shall (a) establish a
transaction completion bonus fund equal to 1% of the Fund (but aggregating not
more than $450,000, the "Bonus Fund") and, as provided in Section 1.8, deposit
33.33% of the Bonus Fund with the Disbursing Agent, (b) pay to Northstar's four
executive officers other than Xxxxx Xxxxxxxx (the "Executive Officers"), at
Closing an aggregate of 33.33% of the Bonus Fund, and (c) pay to the Executive
Officers (on a proportionate basis as described below) 33.33% of the Bonus Fund
on the first anniversary of the Closing Date and the remaining 33.33% of the
Bonus Fund on the second anniversary of the Closing Date, provided in each case
that such Executive Officer either (i) is still employed with the Surviving
Corporation or its successor on such dates, or (ii) is not employed on such
dates as a result of death, total disability, retirement, termination without
cause or a change of control, all as provided in said executives' employment
agreements with Buyer. Each Executive Officer's proportionate share of the Bonus
Fund payable at the Closing and on the anniversary dates of the Closing is
calculated as the percentage by which each person's 1999 base salary bears to
the collective 1999 base salaries of such executives. This Section 5.9 and the
obligations of Buyer hereunder shall survive the closing of the transactions
contemplated hereby, are intended to benefit Executive Officers (each of whom
shall be entitled to enforce this Section against Buyer) and shall be binding on
all successors and assigns of Buyer.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 CONDITIONS TO THE OBLIGATIONS OF BUYER AND BUYER SUBSIDIARY. The
obligations of Buyer and Buyer Subsidiary to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of the following
conditions, any one or more of which (except for the condition set forth in
Section 6.1(b)) may be waived by Buyer.
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(a) The representations and warranties of Northstar contained in
Article III of this Agreement shall be true and correct in all material
respects immediately prior to the Effective Time with the same effect
as if such representations and warranties had been made immediately
prior to the Effective Time; Northstar shall have performed and
complied in all material respects with the agreements and obligations
contained in this Agreement required to be performed and complied with
by it at or prior to the Effective Time; and Buyer shall have received
a certificate signed by an appropriate executive officer of Northstar
to the effects set forth in this Section 6.1(a). Notwithstanding the
above, the failure of Northstar to comply with any particular
representation, warranty, covenant or agreement contained in this
Agreement will not automatically entitle Buyer and Buyer Subsidiary to
terminate this Agreement unless such failure meets the standards
specified in Section 7.1(c)(iii) hereof.
(b) This Agreement and the Merger shall have been approved at the
Shareholder Meeting by the votes required by the MBCA and Northstar's
Articles of Incorporation.
(c) All other corporate action on the part of Northstar necessary to
authorize the execution, delivery and consummation of this Agreement or
any agreement or instrument contemplated hereby to which Northstar is
or is to be a party or the transactions contemplated hereby or thereby
shall have been duly and validly taken.
(d) There shall not be instituted or pending any suit, action,
investigation, inquiry or other proceeding by or before any court or
governmental or other regulatory or administrative agency or commission
requesting or looking toward an order, judgment or decree (except those
in which Buyer is a plaintiff directly or derivatively) which would, if
issued (i) restrain or prohibit the consummation of the transactions
contemplated hereby, or (ii) require rescission of this Agreement or
the transactions contemplated hereby, or (iii) result in a material
claim for indemnification by an officer or director related to the
transactions contemplated hereby, or (iv) result in material damages to
Buyer, Buyer Subsidiary or the Surviving Corporation if the
transactions contemplated hereby are consummated, nor shall there be in
effect any injunction, writ, preliminary restraining order or any order
of any nature issued by a court or governmental agency of competent
jurisdiction directing that the transactions provided for herein, or
any of them, not be consummated as so provided.
(e) Subsequent to the date of this Agreement, there shall not have been
any damage to, or destruction or loss of, any property or assets of
Northstar or any Subsidiary, which, after giving effect to any
insurance coverage, would have a Material Adverse Effect.
(f) Buyer shall have received from Parsinen Xxxxxx Xxxxxxx & Xxxxxxx
P.A., counsel to Northstar, its opinion, dated the Closing Date and
reasonably satisfactory in form and substance to Buyer and its counsel,
as to the matters set forth in Exhibit A hereto.
22
(g) All applicable waiting periods (and any extensions thereof) under
the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been
terminated.
(h) Holders of no more than 5% of the outstanding Common Stock of
Northstar shall have exercised dissenters' rights with respect to the
Merger.
(i) Estoppel letters substantially in the form of Exhibit C annexed
hereto shall have been received from each of the landlords with respect
to the Leases to the effect that the Leases are currently in effect and
not in default (or other evidence to the same effect).
(j) Except as otherwise agreed in writing, waivers or consents with
respect to change in control shall have been received from the parties
to any Material Contracts which grants such parties the right to
terminate in the event of a change in control.
(k) Waivers or consents shall have been received from the issuer of the
Brooklyn Park revenue bonds and the collateralized letter of credit,
for the benefit of Northstar, and appropriate supplemental indentures
shall have been entered into by the parties thereto.
(l) Northstar's Management Agreements with its four executive officers
and any employment agreement (but not deferred compensation
arrangements contained therein) between Northstar and any person shall
have been terminated and Buyer shall have entered into employment
agreements with such four executive officers in form and substance
satisfactory to Buyer.
(m) The resignation of Xxxxx Xxxxxxxx as a Trustee of the Incentive
Compensation Plan of Northstar shall have been received.
(n) The Revolving Credit and Term Loan Agreement dated July 22, 1996
with First Bank National Association (now known as US Bancorp) shall
have been terminated and any mortgages and liens encumbering
Northstar's assets and securing the indebtedness evidenced thereby
shall be released and UCC termination statements encumbering
Northstar's personal property shall have been delivered.
(o) The 1% transaction completion bonus fund created in Northstar's
1997 Board minutes shall have been formally terminated so it is not
deemed duplicative of the bonus payment required by Section 5.9 above.
(p) Buyer shall be satisfied with its due diligence investigations of
the Real Property and Northstar's and /or GFS's personal property (the
"Personal Property") in all material respects. In the event Buyer
elects to enforce this condition, it shall provide Northstar with a
detailed statement (the "Real Property/Personal Property Objection") as
to the circumstances surrounding the problem(s) uncovered with respect
to the Real Property and Personal Property. Northstar shall have the
right, for a period of 30 days, to cure any such problem(s); provided,
however, that if Northstar is undertaking diligent efforts to cure and
the cure cannot be completed within such 30 day period, Northstar shall
be
23
granted an extension of time to complete the cure but not beyond an
additional 30 days. Buyer shall have a period of 30 days from the
execution date of this Agreement to complete its due diligence on the
Real Property and Personal Property and provide the Real
Property/Personal Property Objection (if any), after which time this
provision shall become null and void and shall no longer be deemed a
condition to Buyer's obligations.
(q) Northstar will provide evidence confirming that the indebtedness
under the Industrial Development Revenue Bonds (General Financial
Supply, Inc. Project) Series 1985 issued by the City of Nevada, Story
County, Iowa, has been paid off, and that all mortgages and security
interests securing such obligations and/or encumbering GFS' Real Estate
or Northstar's personal property related thereto have been released or
terminated.
6.2 CONDITIONS TO THE OBLIGATIONS OF NORTHSTAR. The obligations of
Northstar to effect the Merger shall be subject to the fulfillment at or prior
to the Effective Time of the following conditions, any one or more of which
(except for the condition set forth in Section 6.2(b)) may be waived by
Northstar.
(a) The representations and warranties of Buyer and Buyer Subsidiary
contained in Article IV of this Agreement shall be true and correct in
all material respects immediately prior to the Effective Time with the
same effect as if such representations and warranties had been made
immediately prior to the Effective Time; each of Buyer and Buyer
Subsidiary shall have performed and complied in all material respects
with the agreements and obligations contained in this Agreement required
to be performed and complied with by it at or prior to the Effective
Time; and Northstar shall have received a certificate signed by an
appropriate executive officer of each of Buyer and Buyer Subsidiary to
the effects set forth in this Section 6.2(a). Notwithstanding the above,
the failure of Buyer or Buyer Subsidiary to comply with any particular
representation, warranty, covenant or agreement contained in this
Agreement will not automatically entitle Northstar to terminate this
Agreement unless such failure meets the standards specified in Section
7.1(d)(iii) hereof.
(b) This Agreement and the Merger shall have been approved at the
Shareholder Meeting by the votes required by the MBCA and Northstar's
Articles of Incorporation.
(c) All corporate action on the part of Buyer and Buyer Subsidiary
necessary to authorize the execution, delivery and consummation of this
Agreement or any agreement or instrument contemplated hereby to which
Buyer or Buyer Subsidiary is or is to be party or the transactions
contemplated hereby or thereby shall have been duly and validly taken.
(d) There shall not be instituted or pending any suit, action,
investigation, inquiry or other proceeding by or before any court or
governmental or other regulatory or administrative agency or commission
requesting or looking toward an order, judgment or decree (except those
in which Northstar is a plaintiff directly but not derivatively) which,
in the reasonable judgment of Northstar, would, if issued, restrain or
prohibit the consummation of the transactions contemplated hereby or
require rescission of this
24
Agreement or such transactions or result in material damages to
Northstar or the Surviving Corporation if the transactions
contemplated hereby are consummated, nor shall there be in effect
any injunction, writ, preliminary restraining order or any order of
any nature issued by a court or governmental agency of competent
jurisdiction directing that the transactions provided for herein, or
any of them, not be consummated as so provided.
(e) Northstar shall have received from Xxxxx, Xxxxxx & Xxxxxx LLP,
counsel to Buyer and Buyer Subsidiary, its opinion, dated the Closing
Date and reasonably satisfactory in form and substance to Northstar and
its counsel as to the matters set forth in Exhibit B hereto.
(f) On the Closing Date, financing in the full amount designated as the
Fund in Section 1.8 hereof shall have been deposited pursuant to Section
1.8 with the only condition to the disbursement of the proceeds in the
manner provided in Section 1.8 being presentation to the Disbursing Agent
of a copy of the Articles of Merger certified by the Secretary of State
of the State of Minnesota as having been duly filed.
(g) As of the date of the Proxy Statement, Northstar shall have received
the opinion of Piper satisfactory in form and substance to the Northstar
Board, that the Merger Consideration is fair, from a financial point of
view, to the shareholders of Northstar, and on the date of the
Shareholder Meeting and at the Effective Time, such opinion shall not
have been withdrawn or modified in any manner unsatisfactory to the
Northstar Board. Nothing contained herein shall be deemed to obligate the
Northstar Board to obtain a formal or informal update of such opinion as
of either of such dates.
(h) Northstar shall have entered into the Indemnification Agreements with
each of its officers and directors in form and substance satisfactory to
the Northstar Board and its counsel.
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1 TERMINATION. This Agreement may be terminated as follows whether
before or after the approval of the Merger by the shareholders of Northstar:
(a) By mutual consent of the Northstar Board and the Board of Directors
of Buyer at any time prior to the Effective Time;
(b) By the Northstar Board, if Northstar has substantially satisfied all
of the conditions to the obligation of Buyer and Buyer Subsidiary
specified in Section 6.1 hereof, and the Merger has not been consummated
on or before June 30, 2000, and by the Board of Directors of Buyer, if
Buyer and Buyer Subsidiary have substantially satisfied all of the
conditions to the obligations of Northstar specified in Section 6.2
hereof and the Merger has not been consummated on or before June 30,
2000, which date, in both cases, may be extended by mutual agreement of
the Northstar Board and the Board of Directors of Buyer;
25
(c) By the Board of Directors of Buyer, if (i) any of the conditions set
forth in Section 6.1 hereof shall become impossible to fulfill other than
for reasons within the control of Buyer or Buyer Subsidiary, and shall
not have been waived by Buyer pursuant to Section 8.2 hereof, (ii) the
shareholders of Northstar shall fail to adopt this Agreement and the
Merger by the vote required by the MBCA and Northstar's Articles of
Incorporation at the Shareholder Meeting or any adjournment thereof, or
(iii) Northstar has breached any representation, warranty, covenant or
agreement contained in this Agreement, which breach has a Material
Adverse Effect and cannot be or is not cured by July 15, 2000;
(d) By the Northstar Board, if (i) any of the conditions set forth in
Section 6.2 hereof shall become impossible to fulfill other than for
reasons within the control of Northstar, and shall not have been waived
by the Northstar Board pursuant to Section 8.2 hereof, (ii) the
shareholders of Northstar shall fail to adopt this Agreement and the
Merger by the vote required by the MBCA and Northstar's Articles of
Incorporation at the Shareholder Meeting or any adjournment thereof,
(iii) Buyer or Buyer Subsidiary has breached any representation,
warranty, covenant or agreement contained in this Agreement, which breach
has a Material Adverse Effect and cannot be or is not cured by July 15,
2000;
(e) By either the Northstar Board or the Board of Directors of Buyer, if
any court of competent jurisdiction in the United States or other United
States governmental body, including the Federal Trade Commission, shall
have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Merger and such
order, decree, ruling or other action shall have become final and
nonappealable;
(f) By the Northstar Board if it, in the exercise of its fiduciary duties
after consultation with counsel, shall have withdrawn its approval or
recommendation of the Merger; or
(g) By the Northstar Board, in the event a Superior Proposal (as defined
in Section 8.5 below) is received by Northstar or the shareholders of
Northstar and the Northstar Board determines, in the exercise of its
fiduciary duties after consultation with counsel, to accept, approve or
recommend the Superior Proposal.
7.2 PROCEDURE AND EFFECT OF TERMINATION. In the event of termination
and abandonment of the Merger pursuant to Section 7.1, written notice thereof
shall forthwith be given to the other parties hereto and this Agreement shall
terminate and the Merger shall be abandoned without further action by the other
party hereto without any liability on the part of either party hereto (except
the liability of either party for any intentional and material breach of any
representation, warranty or covenant contained in this Agreement).
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1 AMENDMENT AND MODIFICATION. This Agreement may be amended, modified
or supplemented only by action by the Northstar Board and the Board of Directors
of Buyer and
26
Buyer Subsidiary set forth in a written agreement of both Constituent
Corporations at any time prior to the Effective Time with respect to any of
the terms contained herein, except that after the Shareholder Meeting
contemplated by Section 5.2 hereof, the price per Share to be paid pursuant
to this Agreement to the holders of Shares shall in no event be decreased and
the form of consideration to be received by the holders of Shares in the
Merger shall in no event be altered without the approval of such holders.
8.2 WAIVER OF COMPLIANCE; CONSENTS. Any failure of Buyer or Buyer
Subsidiary, on the one hand, or Northstar, on the other hand, to comply with any
obligation, covenant, agreement or condition herein may be waived by Buyer and
Buyer Subsidiary or Northstar, respectively, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall be valid only if set forth in writing by the appropriate
Constituent Corporation and shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of either party hereto, such consent shall be
given in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 8.2.
8.3 EXPENSES. Except as otherwise provided in this Section 8.3 and the
Break-Up Fee specified in Section 8.5, all expenses incurred in connection with
this Agreement and the consummation of the transactions contemplated hereby
shall be paid by the party incurring such expense. Upon the consummation of the
Merger, all expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby shall be paid by the
Surviving Corporation.
8.4 ADDITIONAL AGREEMENTS. Subject to the terms and conditions herein
provided, each party hereto agrees to use all reasonable efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things,
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
In case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each corporation which is a party to this Agreement shall take all
such necessary action. Nothing herein stated shall require Northstar to take any
action or to do anything which the Northstar Board, in the exercise of its
fiduciary duties after consultation with counsel, determines not to take or do.
8.5 NO SOLICITATION; OTHER OFFERS.
(a) From the date hereof until termination of this Agreement or the
Effective Time, whichever occurs first, Northstar will not, and will use
its best efforts to cause its officers, directors, employees,
representatives and agents (including, without limitation, attorneys,
investment bankers and accountants) not to, directly or indirectly,
solicit, initiate or encourage any inquiry, proposal, offer or indication
of interest from any person that constitutes or would reasonably be
expected to lead to any Acquisition Proposal (as hereinafter defined) or
agree to or endorse, approve or recommend any Acquisition Proposal, or
enter into discussions or negotiate with or provide any information to
any person in furtherance of any such inquiries or to obtain or approve
any Acquisition
27
Proposal, and Northstar shall immediately notify Buyer of all relevant
terms of any such inquiries or proposals received by Northstar or by
any such officer, director, employee, representatives or agents,
related to any of such matters, any material change in the details
(including any amendments or proposed amendments) of any such
inquiries or proposals, the identity of each of the persons making
such inquiries or proposals, and, if such inquiry or proposal is in
writing, Northstar shall immediately deliver or cause to be delivered
to Buyer a copy of such inquiry or proposal; PROVIDED, HOWEVER, that
if, prior to the Effective Time, Northstar shall receive an
unsolicited Acquisition Proposal that the Northstar Board, after
consultation with its legal counsel, reasonably believes that it has a
fiduciary duty to consider, then Northstar, without violating this
Agreement, may thereafter furnish information to and enter into
discussions or negotiations with such third party. Nothing contained
in this Section 8.5(a) or any other provision of this Agreement shall
prevent the Northstar Board, after receiving an opinion of outside
counsel to the effect that it is required to do so in order to
discharge properly its fiduciary duties, from considering,
negotiating, approving and recommending to the shareholders of
Northstar an unsolicited, bona fide written Acquisition Proposal which
the Northstar Board determines in good faith (i) would result in a
transaction more favorable to Northstar's shareholders than the
transaction contemplated by this Agreement and (ii) is made by a
person financially capable of consummating such Acquisition Proposal
(any such Acquisition Proposal being referred to herein as a "Superior
Proposal"). If the Northstar Board shall have resolved to accept or
accepted a Superior Proposal then, upon written notice to Buyer,
Northstar may pursuant to Section 7.1(g), terminate this Agreement and
the transactions contemplated hereby. For purposes hereof,
"Acquisition Proposal" means any proposal or offer to acquire all or a
substantial part of the business and properties of Northstar or any
capital stock of Northstar, whether by merger, tender offer, exchange
offer, sale of assets or similar transactions involving Northstar.
(b) Upon any termination by Northstar of this Agreement permitted by (i)
Section 7.1(f) or (ii) Section 7.1(g) and Section 5.2(a), Northstar shall
pay to Buyer the sum of $1,000,000 (the "Break-Up Fee") upon the
occurrence of such event. In such circumstances, the Break-Up Fee shall
be deemed to include all costs and expenses of Buyer.
8.6 INDEMNIFICATION.
(a) Prior to and until the Effective Time, Northstar shall indemnify and
hold harmless, and after the Effective Time the Surviving Corporation
shall indemnify and hold harmless, to the fullest extent permitted by
applicable law, each present and former director and officer of
Northstar and his or her heirs executors, administrators and legal
representatives (individually an "Indemnified Party" and collectively
the "Indemnified Parties") against any amounts incurred by such
Indemnified Parties, including without limitation, losses, claims,
damages, liabilities, costs, expenses (including attorneys' fees),
judgments and amounts paid in settlement, in connection with any
threatened, pending or completed claim, action, suit, proceeding or
investigation, arising out of or relating to any action, alleged action,
omission or alleged omission occurring on or prior to the Effective Time
(including without limitation
28
any claim or action, suit, proceeding or investigation arising out of
or relating to the Merger and the transactions contemplated by this
Agreement and any which arise out of or relate to an Indemnified
Party's having served as a committee member, director, officer,
employee or agent of Northstar or as a trustee or fiduciary of any
Employee Plan or otherwise on behalf of Northstar), whether asserted
or commenced prior to or after the Effective Time and any expenses
incurred by an Indemnified Party in enforcing any of the rights set
forth in this Section (all such amounts and expenses being
collectively referred to as "Losses" and individually referred to as a
"Loss"). To the fullest extent permitted by applicable law, Northstar
or the Surviving Corporation, as the case may be, will advance all
expenses to each Indemnified Party in connection with any such Losses.
Northstar's and, after the Effective Time, the Surviving Corporation's
Articles or Certificate of Incorporation and Bylaws shall not be
amended in a manner which adversely affects the rights of any party to
indemnification thereunder or hereunder.
(b) Each of the parties hereto agrees to vigorously defend against any
actions, suits or proceedings in which such party is named as a
defendant. No such actions, suits or proceedings involving any Loss for
which the Indemnified Party is indemnified hereunder shall be settled
without the consent of Northstar or Surviving Corporation and/or Buyer,
as the case may be, which such consent shall not be unreasonably
withheld.
(c) The Indemnified Parties may retain counsel of their own choice, which
counsel shall be reasonably acceptable to Buyer, to represent them with
respect to any matter provided for under this Section 8.6 which, in
addition to any local counsel, shall be a single counsel for all
Indemnified Parties with respect to any 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.
(d) Buyer agrees that it intends to maintain the Surviving Corporation
as a separate going concern for at least six years from the Effective
Time. The Surviving Corporation will (a) until the six year anniversary
date of the Effective Time, cause its Articles of Incorporation and
Bylaws to continue to provide indemnification provisions for the benefit
of those individuals who have served as directors or officers of
Northstar or GFS at any time prior to the Effective Time which are
comparable to such provisions as are currently contained in Northstar's
Articles of Incorporation and Bylaws and (b) in the event the Surviving
Corporation is unable to meet its indemnification obligations set forth
in clause (a) above, Buyer hereby agrees that it shall assume full
payment and performance of such indemnification obligations. In the
event that, within six years of the Effective Time, the Surviving
Corporation or any of its successors or assigns (i) becomes insolvent,
or fails to meet its obligations under this Section 8.6, (ii)
consolidates with or merges into any other person and the Surviving
Corporation shall not be the continuing or surviving corporation or
entity of such consolidation or merger, or (iii) transfers all or
substantially all of its properties and assets to any person, then, and
in each such case, Buyer hereby agrees it shall assume and fully pay the
obligations set forth in this Section 8.6.
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(e) If it is ultimately determined by a court of competent jurisdiction
in connection with any Loss that the criteria for indemnification under
applicable law has not been satisfied, then any expenses advanced to an
Indemnified Party in connection with such Loss shall be reimbursed by
such Indemnified Party to Northstar, the Surviving Corporation or Buyer,
as the case may be.
(f) This Section 8.6 shall survive the closing of the transactions
contemplated hereby, is intended to benefit Northstar, the Surviving
Corporation and each of the Indemnified Parties (each of whom shall be
entitled to enforce this Section against Northstar, the Surviving
Corporation or Buyer, as the case may be) and shall be binding on all
successors and assigns of Northstar, the Surviving Corporation and
Buyer.
8.7 OFFICERS' AND DIRECTORS' INSURANCE. Buyer hereby consents to the
purchase by Northstar of an extension of its current directors' and officers'
liability insurance policy for a period extending until the sixth anniversary of
the Effective Time at a cost of not more than $100,000 with respect to all
matters, including the transactions contemplated by this Agreement occurring
prior to, and including the Effective Time.
8.8 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No party to this Agreement
shall issue any press release or make any public announcement relating to the
subject matter of this Agreement without prior written approval of the other
party; provided, however, that each of Northstar and Buyer may make any public
disclosure it believes in good faith is required by applicable law (in which
case the disclosing party will advise the other parties to this Agreement prior
to making a disclosure).
8.9 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or mailed by
registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice).
(a) If to Buyer or
Buyer Subsidiary: Xxxxx Business Forms, Inc.
0000 Xxxxx Xxxxxxx
Xxxxx 000
XxXxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Chairman,
CEO and President
with a copy to: Xxxxx, Xxxxxx & Xxxxxx LLP
3100 Bank One Center
0000 Xxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxx
(b) If to Northstar: 0000 Xxxxxxxxx Xxxxxx Xxxxx
00
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, President
with a copy to: Parsinen Xxxxxx Xxxxxxx & Xxxxxxx P.A.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxx
8.10 ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by either
party hereto without the prior written consent of the other party, nor is this
Agreement intended to confer upon any other person, except the parties and any
Indemnified Parties, any rights or remedies hereunder.
8.11 NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in this Agreement or in any schedule or certificate
delivered pursuant hereto shall not survive the effectiveness of the Merger or
the termination of this Agreement.
8.12 INTERPRETATION. As used in this Agreement, unless otherwise
expressly defined herein, (i) the term "including" shall mean "including without
limitation;" (ii) the term "person" shall mean and include an individual,
partnership, limited liability company, a joint venture, corporation, trust, an
unincorporated organization and a government or any department or agency
thereof; (iii) the term "affiliate" shall have the meaning set forth in Rule
12b-2 of the General Rules and Regulations promulgated under the Securities
Exchange Act of 1934, as amended; (iv) all dollar amounts are expressed in
United States funds; and (v) the phrase "to the knowledge of Northstar" or any
similar phrase shall mean the actual knowledge or one or more of the executive
officers of Northstar.
8.13 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.14 HEADINGS. The Article and Section headings contained in this
Agreement are solely for the purpose of reference, and are not part of the
agreement of the parties and shall not affect in any way the meaning or
interpretations of this Agreement.
8.15 ENTIRE AGREEMENT. This Agreement, including the exhibits hereto,
the Disclosure Schedule and the other documents and instruments referred to
herein, embodies the entire agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, representations, warranties, covenants or undertakings other than
those expressly set forth or referred to herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
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8.16 SEVERABILITY. If any term, provision, covenant, agreement or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants, agreements and restrictions of this Agreement will continue in full
force and effect and will not be affected, impaired or invalidated.
8.17 GOVERNING LAW. The Agreement shall be governed by the laws of the
State of Minnesota.
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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be signed by
their respective duly authorized officer on the date first above written.
NORTHSTAR COMPUTER FORMS, INC.,
a Minnesota corporation
/s/ Xxxxx X. Xxxxxxxx
By_______________________________
Chairman
Its_______________________________
XXXXX BUSINESS FORMS, INC.,
a Texas corporation
/s/ Xxxxx X. Xxxxxxx
By_______________________________
Chairman, CEO & President
Its_______________________________
POLARIS ACQUISITION CORP.,
a Minnesota corporation
/s/ Xxxxx X. Xxxxxxx
By_______________________________
Chairman, CEO & President
Its_______________________________
33
EXHIBIT A
LEGAL OPINION FOR PARSINEN XXXXXX XXXXXXX & XXXXXXX, P.A.
__________, 2000
Xxxxx Business Forms, Inc.
Polaris Acquisition Corp.
0000 Xxxxx Xxxxxxx, Xxxxx 000
XxXxxx, XX 00000
Re: Agreement and Plan of Merger by and among Northstar Computer Forms,
Inc., a Minnesota corporation ("Northstar"), Xxxxx Business Forms,
Inc., a Texas corporation ("Buyer") and Polaris Acquisition Corp., a
Minnesota corporation and wholly-owned subsidiary of Buyer ("Buyer
Subsidiary") dated February ____, 2000 (the "Agreement")
Gentlemen:
We have acted as counsel for Northstar in connection with the
negotiation, execution and delivery of the Agreement and all other documents
required to be executed and delivered by Northstar thereunder (such other
documents being referred to collectively as the "Documents"). Unless otherwise
defined herein, all capitalized terms used herein shall have the same meaning
given in the Agreement.
In delivering this opinion, we have assumed the genuineness of all
signatures on original or certified copies, the authenticity of all documents
submitted to us as originals and the conformity to original or certified copies
of all documents submitted to us as conformed or reproduction copies. In
addition, we have examined the Articles of Incorporation and Bylaws of Northstar
and certain resolutions executed by officers of Northstar and such other
documents and official records, and such laws and regulations, as we have deemed
necessary in order to render this opinion. Except as specifically stated herein,
we have not examined any other corporate records or other documents concerning
Northstar and have conducted no further investigation in connection herewith.
As to matters of fact material to the opinions expressed herein, we
have relied on the representations and warranties as to factual matters
contained in and made by Northstar pursuant to the Agreement, or contained in
certificates and statements of government officials or Northstar.
Based upon and subject to the foregoing, and subject further to the
qualifications expressed herein, we are of the opinion that:
1
1. Each of Northstar, and its one operating subsidiary, General
Financial Supply, Inc. ("GFS"), is a corporation duly organized,
validly existing and in good standing under the laws of its state of
organization and has the requisite corporate power and authority to
own, lease or operate all properties and assets owned, leased or
operated by it and to carry on its business as it is now being
conducted.
2. Each of Northstar and GFS is duly qualified as a foreign corporation
to do business, and is in good standing, in each jurisdiction where the
character of its properties owned, leased or operated, or the nature of its
activities, makes such qualification necessary, except such jurisdictions where
failure to be so qualified would not have a material adverse effect upon the
consolidated business, operations, properties, assets or the condition,
financial or otherwise of Northstar.
3. Northstar owns all of the issued and outstanding stock of GFS.
Northstar has delivered to Buyer and Buyer Subsidiary certified copies of both
its and GSF's Articles or Certificate of Incorporation and Bylaws.
Each copy is complete and correct as of the date hereof.
4. The authorized capital stock of Northstar consists of 5,000,000
shares of common stock, $.05 par value per share, and 200,000 shares of
preferred stock, without par value. _____________ shares of Northstar commons
stock are issued and outstanding and no shares of Northstar preferred stock are
issued and outstanding. There is an aggregate of 532,500 shares of Northstar
common stock reserved for issuance pursuant to outstanding stock options, all of
which are fully vested (the "Stock Options").
5. Except for the Stock Options and the Stock Option Exercise and Sale
Agreements, there are no outstanding subscriptions, options, warrants, calls or
other agreements or commitments by which Northstar is bound in respect of the
capital stock of Northstar, whether issued or unissued, and no outstanding
securities convertible into or exchangeable for any such capital stock.
6. Northstar has the corporate power to execute and deliver the
Agreement and the Documents and to consummate the transactions contemplated
thereby. The execution, delivery and performance of the Agreement and the
Documents by Northstar has been duly authorized by the Board of Directors and
the Shareholders of Northstar, and no further corporate action is necessary on
the part of Northstar to consummate the transactions contemplated thereby. The
Agreement and the Documents constitute the legal, valid and binding obligation
of Northstar, enforceable against Northstar in accordance with their respective
terms, except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a court of law or
equity).
7. Neither the execution and delivery of the Agreement or the Documents
by Northstar, nor the consummation by Northstar of the transactions contemplated
thereby, will (i) conflict with or result in a breach of Northstar's Articles of
Incorporation or Bylaws currently in effect, (ii) except for any applicable
requirements under the Xxxx-Xxxxx-Xxxxxx Act and the filing
2
of Articles of Merger with the Secretary of State of the State of Minnesota,
require the consent or approval of any governmental authority having
jurisdiction over any of the business or assets of Northstar, (iii) to our
knowledge, violate any statute or regulation applicable to Northstar, or (iv)
to our knowledge, result in a breach of, or constitute a default or an event
which, with the passage of time or the giving of notice, or both, would
constitute a default, give rise to a right of termination, cancellation or
acceleration, create any entitlement to any payment or benefit, require the
consent of any third party or result in the creation of any lien on the
assets of Northstar under, any other instrument, contract or agreement to
which Northstar is a party or by which the properties or assets of Northstar
except, in the case of clauses (ii), (iii) and (iv), where such violation,
breach, default, termination, cancellation, acceleration, payment, benefit or
lien, or the failure to make such filing or obtain such consent or approval,
would not impair the ability of Northstar to consummate the transactions
contemplated by the Agreement or the Documents.
8. There is no litigation, arbitration, administrative proceedings,
abatement orders or investigations of any kind pending or, to our knowledge,
threatened against Northstar, which seeks to enjoin or otherwise challenges the
consummation of the transactions contemplated by the Agreement.
9. There is, except as disclosed in the Agreement, to our knowledge,
(i) no outstanding consent, order, judgment, injunction, award or decree of any
court, government or regulatory body or arbitration tribunal against or
involving Northstar; (ii) no action, suit, dispute or governmental,
administrative, arbitration or regulatory proceeding pending or, to our
knowledge, threatened against or involving Northstar; and (iii) no investigation
pending, or to our knowledge, threatened against or relating to Northstar, or
any of its respective officers or directors as such.
10. Except as disclosed in the Agreement, to our knowledge, the
operations and activities of Northstar have complied and are in compliance in
all material respects with all applicable federal, state, local and common laws
including without limitation health and safety statutes and regulations and all
environmental laws and regulations.
The opinions contained herein are further qualified in their entirety with
respect to the following matters:
(a) Whenever our opinion is indicated to be to the best of our
knowledge, it is intended to signify that during the course of our
representation of Northstar, no information has come to our
attention which would give us actual knowledge or notice of the
existence or absence of such facts and is limited to the actual
knowledge of the members of this firm working on this matter. We
have not undertaken any independent investigation to determine the
existence or absence of such facts, and no inferences as to the
existence or absence of such facts should be drawn.
(b) Whenever statements in our opinion are qualified by the term
"material" or "materially", those statements involve the judgments
and opinions as to the materiality or lack of materiality of any
matter to Northstar or its business, assets or financial condition
that are
3
entirely those of Northstar and its officers after having been
advised by us as to the legal effect and consequences of such
matters. Such opinions and judgments are not known to us to be
incorrect.
(c) Our opinions are limited to the specific issues addressed and are
limited in all respects to laws and facts existing on the date of
this opinion.
(d) Our opinions are subject to the effect of bankruptcy, fraudulent
transfer, insolvency, reorganization, arrangement, moratorium or
other similar laws affecting or relating to the rights of creditors
generally.
(e) Our opinions are also further subject to the effect of general
principles of equity, including, without limitation, equitable
relief as may be granted by courts, specific performance,
limitations on the availability of equitable remedies and concepts
of materiality, reasonableness, good faith and fair dealing and
other similar doctrines affecting the enforceability of agreements
generally (regardless of whether enforceability is considered a
proceeding in equity or at law).
(f) We express no opinion as to the enforceability of any provisions of
the Agreement or the Documents to the extent that they purport to
exclude conflict of law principles.
(g) We have assumed that Buyer and Buyer Subsidiary each have the legal
right, capacity and power to enter into, enforce and perform all of
their respective obligations under the Agreement and the Documents.
Furthermore, we have assumed the due authorization by each of Buyer
and Buyer Subsidiary of all requisite action and the due execution
and delivery of the Agreement and the Documents by each of Buyer
and Buyer Subsidiary and that the Agreement and the Documents are
valid and binding upon each of Buyer and Buyer Subsidiary and are
enforceable against each of them in accordance with their
respective terms.
(h) We are admitted to practice law in the State of Minnesota, and we
express no opinion as to the laws of any jurisdiction other than
the State of Minnesota and the federal laws of the United States of
America.
This opinion is rendered to you for your benefit in connection with the above
transaction and may not be relied upon by any other person or for any other
purpose without our prior written consent. This opinion is rendered as of the
date hereof and we hereby disclaim any obligation to advise you or any other
party entitled to rely hereon of any change in any matter set forth herein.
Very truly yours,
PARSINEN XXXXXX XXXXXXX & XXXXXXX P.A.
4
XXXXX, XXXXXX & XXXXXX LLP
ATTORNEYS AND COUNSELORS
3100 BANK ONE CENTER
0000 XXXX XXXXXX
XXXXXX XXXXX 00000-0000
(000) 000-0000
FACSIMILE: ( 000) 000-0000
EXHIBIT B
Xxxxxx X. Xxxxxx Direct Dial: (000) 000-0000
e-mail: xxxxxx@xxxxxx.xxx
February ___, 2000
Northstar Computer Forms, Inc.
General Financial Supply, Inc.
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000
Re: Agreement and Plan of Merger by and among Northstar Computer
Forms, Inc., a Minnesota corporation ("Northstar"), Xxxxx
Business Forms, Inc., a Texas corporation ("Buyer") and
Polaris Acquisition Corp., a Minnesota corporation and
wholly-owned subsidiary of Buyer ("Buyer Subsidiary") dated
February ____, 2000 (the "Agreement")
Ladies and Gentlemen:
We have acted as counsel to Xxxxx Business Forms, Inc., a Texas
corporation (the "BUYER"), in connection with the Agreement and Plan of Merger
(the "Agreement"), dated as of February __, 2000, between you Buyer and Polaris
Acquisition Corp., a Minnesota Corp. and a wholly-owned subsidiary of Buyer
("Buyer Subsidiary"), and all other documents required to be executed and
delivered thereunder (such other documents being referred to collectively as the
"Documents"). Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings assigned to such terms in the Agreement.
In so acting, we have examined (i) the Agreement, (ii) the Buyer's
Articles of Incorporation and Bylaws, as in effect on the date hereof, and (iii)
the Buyer Subsidiary's Articles of Incorporation and Bylaws, as in effect on the
date hereof, and we have examined and considered such corporate records,
certificates and matters of law as we have deemed appropriate as a basis for our
opinions set forth below.
We have also made such other legal and factual examinations and
inquiries as we have deemed advisable or necessary for the purpose of rendering
this opinion. As to matters of fact material to the opinions expressed herein,
we have relied upon the representations and warranties as to factual matters
contained in and made by the Buyer pursuant to the Agreement, certificates and
statements of government officials, Buyer and Buyer Subsidiary. In addition, we
have examined originals or copies of documents, corporate records and other
writings that we consider relevant for the purposes of this opinion.
As used in this opinion, the expression "to our knowledge" or "known to
us" means as to matters of fact that we have examined documents in our files and
documents made available to us by the Buyer and have made such inquiries of
officers of the Buyer as we have deemed necessary, but beyond that we have made
no independent factual investigation for the purpose of rendering this opinion.
Further, the expression "to our knowledge" or "known to us" with reference to
matters of fact refers to the current actual knowledge of the attorneys of this
firm who have worked on the transactions referred to in the first paragraph of
this opinion. Where statements in this opinion are qualified by the term
"material" or "materially," those statements involve judgments and opinions as
to the materiality or lack of materiality of any matter to the Buyer or its
business, assets or financial condition that are entirely those of the Buyer and
its officers, after having been advised by us as to the legal effect and
consequences of such matters. Such opinions and judgments are not known to us to
be incorrect. Except to the extent expressly set forth herein or as we otherwise
believe to be necessary to render our opinion, we have not undertaken any
independent investigation to determine the existence or absence of any other
facts, and no inference as to our knowledge of the existence or absence of any
such facts should be drawn from our representation of the Buyer or the rendering
of the opinions set forth below.
Our opinion is limited to such laws, rules or regulations that in our
experience are typically applicable to a transaction of the nature contemplated
by the Agreement.
Based upon the foregoing and subject to the assumptions, limitations,
qualifications and exceptions stated herein, we are of the opinion that as of
the date hereof:
1. Each of Buyer and Buyer Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of its state of
organization and has the requisite corporate power and authority to own, lease
or operate all properties and assets owned, leased or operated by it and to
carry on its business as it is now being conducted. Each of Buyer and Buyer
Subsidiary is duly qualified as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of its properties owned,
leased or operated, or the nature of its activities, makes such qualification
necessary, except such jurisdictions where failure to be so qualified would not
have a material adverse effect upon the consolidated business, operations,
properties, assets or the condition, financial or otherwise of Buyer. Buyer owns
all of the issued and outstanding stock of Buyer Subsidiary. Buyer has delivered
to Northstar certified copies of both its and Buyer Subsidiary's Articles or
Certificate of Incorporation and Bylaws. Each copy is complete and correct as of
the date hereof.
2
2. Each of Buyer and Buyer Subsidiary has the corporate power to
execute and deliver the Agreement and the Documents and to consummate the
transactions contemplated thereby. The execution, delivery and performance of
the Agreement and the Documents by Buyer and Buyer Subsidiary have been duly
authorized by their respective Boards of Directors and by Buyer as the sole
shareholder of Buyer Subsidiary, and no further corporate action is necessary on
the part of Buyer or Buyer Subsidiary to consummate the transactions
contemplated thereby. The Agreement and the Documents constitute the legal,
valid and binding obligation of each of Buyer and Buyer Subsidiary, enforceable
against Buyer and Buyer Subsidiary in accordance with their respective terms,
except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a court of law or
equity).
3. Neither the execution and delivery of the Agreement or the Documents
by Buyer or Buyer Subsidiary, nor the consummation by Buyer and Buyer Subsidiary
of the transactions contemplated thereby, will (i) conflict with or result in a
breach of the Articles or Certificate of Incorporation or Bylaws as currently in
effect of Buyer or Buyer Subsidiary, respectively, (ii) except for any
applicable requirements under the Xxxx-Xxxxx-Xxxxxx Act and the filing of
Articles of Merger with the Secretary of State of the State of Minnesota,
require the consent or approval of any governmental authority having
jurisdiction over any of the business or assets of Buyer or Buyer Subsidiary,
(iii) to our knowledge, violate any statute or regulation applicable to Buyer or
Buyer Subsidiary, or (iv) to our knowledge, result in a breach of, or constitute
a default or an event which, with the passage of time or the giving of notice,
or both, would constitute a default, give rise to a right of termination,
cancellation or acceleration, create any entitlement to any payment or benefit,
require the consent of any third party or result in the creation of any lien on
the assets of Buyer or Buyer Subsidiary under, any other instrument, contract or
agreement to which Buyer or Buyer Subsidiary is a party or by which the
properties or assets of Buyer or Buyer Subsidiary may be bound only, in the case
of clauses (ii), (iii) and (iv), where such violation, breach, default,
termination, cancellation, acceleration, payment, benefit or lien, or the
failure to make such filing or obtain such consent or approval, would not impair
the ability of Buyer or Buyer Subsidiary to consummate the transactions
contemplated by the Agreement or the Documents.
4. There is no litigation, arbitration, administrative proceedings,
abatement orders or investigations of any kind pending or, to our knowledge,
threatened against Buyer or Buyer Subsidiary which seeks to enjoin or otherwise
challenges the consummation of the transactions contemplated by the Agreement.
5. There is, (i) to our knowledge, no outstanding consent, order,
judgment, injunction, award or decree of any court, government or regulatory
body or arbitration tribunal against or involving the Buyer or Buyer
Subsidiary; (ii) no action, suit, dispute or governmental, administrative,
arbitration or regulatory proceeding pending or, to our knowledge, threatened
against or involving the Company; and (iii) no investigation pending, or to
our knowledge,
3
threatened against or relating to Buyer or Buyer Subsidiary, or any of their
respective officers or directors as such.
The opinions expressed herein are subject to the following assumptions,
limitations, qualifications and exceptions:
(1) We have assumed the genuineness of all signatures, the authenticity
of all Documents submitted to us as originals, the conformity with originals of
all Documents submitted to us as copies, the authenticity of certificates of
public officials and the due authorization, execution and delivery of all
Documents (except the due authorization, execution and delivery by the Buyer of
the Documents).
(2) We have assumed that each of the parties to the Documents other
that the Buyer (the "OTHER PARTIES") has the legal right, capacity and power to
enter into, enforce and perform all of its obligations under the Documents.
Furthermore, we have assumed the due authorization by each of the Other Parties
of all requisite action and the due execution and delivery of the Documents by
each of the Other Parties, and that the Transaction Agreements are valid and
binding upon each of the Other Parties and are enforceable against each Other
Party in accordance with their terms.
(3) We express no opinion as to the enforceability of any provisions of
the Documents to the extent that they purport to exclude conflict of law
principles.
(1) Our opinion is limited to such laws, rules or regulations that in
our experience are typically applicable to a transaction of the nature
contemplated by the Agreement.
Our examination of law relevant to the matters covered by this opinion
is limited to the laws of the State of Texas and the federal law of the United
States, and we express no opinion as to the effect on the matters covered by
this opinion of the laws of any other jurisdiction or whether the laws of any
purported jurisdiction will apply. To the extent that the governing law with
respect to any matters covered by this opinion is the law of a jurisdiction
other than the State of Texas or federal law, we have assumed that the law of
such other jurisdiction is identical in all substantive respects to Texas law.
This opinion is given as of the date hereof, and we assume no
obligation, to update or supplement this opinion to reflect any facts or
circumstances which may hereafter come to our attention or any changes in laws
which may hereafter occur. This opinion is limited to the matters expressly
stated herein and is rendered solely for your benefit and may not be quoted or
relied upon for any other purpose or by another person.
Sincerely,
XXXXX, XXXXXX & XXXXXX LLP
4
EXHIBIT C
February __, 2000
Northstar Computer Forms, Inc.
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxxx 00000
Xxxxx Business Forms, Inc.
0000 X. Xxxxxxx, Xxxxx 000
XxXxxx, Xxxxx 00000
Re: Landlord Estoppel Certificate Regarding the Lease (the "Lease")
Dated _____, 199 ___ executed between
______________________________ ("LANDLORD") and Northstar
Computer Forms, Inc. ("TENANT") covering the Premises located at
____________________________, ______________ County, ___________
("LEASE PREMISES")
Gentlemen:
The undersigned Landlord is the landlord under the above-referenced
Lease and hereby certifies to Tenant that the following information concerning
the Lease, the Tenant and the Lease Premises is true and correct:
1. Landlord is the owner in fee simple of the property covered by
the Lease and is the owner of the entire landlord's interest
in and to the Lease.
2. A true, correct and complete copy of the Lease, together with
all amendments, modifications, side letters, guaranties,
letters of credit, and other documents evidencing, governing
or securing the Tenant's obligations under the Lease is
attached hereto as EXHIBIT "A" and made a part hereof. The
Lease constitutes the entire agreement between the Landlord
and the Tenant concerning the Lease Premises and there are no
other agreements, written or oral, between the Landlord and
the Tenant relating thereto except as attached hereto as
EXHIBIT "A". The Lease is in full force and effect.
3. As of the date hereof, to the Landlord's knowledge, no
Landlord or Tenant default exists under the terms of the
Lease, and no event has occurred or condition exists which
with or without notice, the passage of time, or both would
constitute a Landlord or Tenant default thereunder.
4. All monthly rentals (including without limitation, any
applicable Base Rent, Additional Rent, or any other rentals or
charges provided for under the Lease) required to be paid to
Landlord under the Lease have been paid through and including
the month of _____________, 2000.
5. All obligations on the part of Landlord under the terms of the
Lease heretofore accrued and performable have been fully
performed, including without limitation, completion of and
payment for any improvements, alterations, or tenant finishout
work and the receipt by the Tenant of any tenant allowances
provided for under the Lease. Tenant has completed all
finishout work, if any, required under the Lease.
6. Tenant is in possession of the entire Lease Premises, is
presently open and conducting business at the Lease Premises,
and occupies and uses no other space at the property other
than the Lease Premises.
7. Landlord has paid all real estate brokerage commissions and
fees required to be paid to any person under the Lease, and
from and after the date hereof, Tenant has no obligation under
the Lease, or otherwise, to pay any real estate brokerage
commissions or similar fees to any party, including without
limitation no obligation to pay any such commissions or fees
in the event Tenant hereafter exercises any option(s) provided
in the Lease to extend the Lease term.
8. The Lease commencement date is _________________. The Lease
termination date is ____________________.
The Lease provides for the following renewal terms: ________.
The undersigned acknowledges that this Landlord Estoppel Certificate
will be relied upon by Tenant and Xxxxx Business Forms, Inc., and the
undersigned agrees that such parties may rely hereon in connection with the
merger of Tenant and Xxxxx.
EXECUTED AS OF THIS ________ DAY OF ___________________2000.
LANDLORD:
___________________________________
a _________________________________
By: _______________________________
Printed Name: _____________________
Title: ____________________________
2
