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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
AMENDED
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
__________________________
R-B RUBBER PRODUCTS, INC.
(NAME OF SUBJECT COMPANY)
__________________________
R-B RUBBER PRODUCTS, INC.
(NAME OF PERSON(S) FILING STATEMENT)
__________________________
Common Stock, no par value
(Title of Class of Securities)
74920-10-9
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(CUSIP Number of Class of Securities)
__________________________
Ronald L. Bogh
President, Chief Executive Officer and Chairman of the Board
R-B Rubber Products, Inc.
904 East 10th Avenue
McMinnville, Oregon 97128
(503) 472-4691
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person(s) Filing Statement)
With a copy to:
David C. Baca, Esq.
Michael McArthur-Phillips, Esq.
Marcus J. Williams, Esq.
Davis Wright Tremaine LLP
2300 Wells Fargo Tower
1300 S.W. Fifth Avenue
Portland, Oregon 97201
(503) 241-2300
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is R-B Rubber Products, Inc., an Oregon
corporation (the "Company"). The Company's principal executive offices
are located at 904 East 10th Avenue, McMinnville, Oregon 97128. This
statement relates to the Company's common stock, no par value (the
"Common Stock" or the "Shares").
ITEM 2. TENDER OFFER OF THE BIDDER.
This statement relates to the tender offer made by Dash Multi-Corp,
Inc., a Missouri corporation ("Dash") disclosed in a Tender Offer
Statement on Schedule 14D-1 (the "Schedule 14D-1") dated April 9, 1999,
to purchase approximately seventy percent (70%) of the issued and
outstanding Shares at $3.00 per share, net to the seller in cash,
without interest (the "Offer"). The Offer will be subject to the terms
and conditions set forth in the Offer to Purchase dated April 9, 1999,
filed as Exhibit A to this Schedule 14D-9 and incorporated by this
reference (the "Offer to Purchase") and the related Letter of
Transmittal filed as Exhibit B (together with the Offer to Purchase, as
it may be amended or supplemented, the "Offer Documents").
The Offer is being made pursuant to a Stock Purchase Agreement dated
April 8, 1999 between the Company and Dash (the "Stock Purchase
Agreement") and the Annexes thereto (collectively, the "Purchase
Documents"), all of which are filed together as Exhibit C and
incorporated by this reference. The Stock Purchase Agreement provides
for the commencement of the Offer by Dash subject to the terms and
conditions stated therein.
The Schedule 14D-1 states that Dash's principal executive offices are
located at 2500 Adie Road, Maryland Heights, Missouri 63043.
ITEM 3. IDENTITY AND BACKGROUND.
(a) This statement is being filed by the Company. Its name and
business address are as set forth in Item 1, above.
(b) Except as set forth in this Item 3(b), to the knowledge of the
Company, as of the date of this Schedule 14D-9, there are no
material contracts, agreements, arrangements or understandings
regarding or relating to the Offer, and no actual or potential
conflicts of interest between the Company or its affiliates and
(1) the Company, its executive officers, directors or affiliates;
or (2) Dash or its executive officers, directors or affiliates.
Certain contracts, agreements, arrangements and understandings
between the Company and certain of its executive officers,
directors and affiliates are described in the Purchase Documents.
The Purchase Documents are incorporated into this Schedule 14D-9
by reference to Exhibit C for the purpose of describing those
relationships, and each of the Purchase Documents is summarized
below. The descriptions contained in this Item 3 and elsewhere in
this Schedule 14D-9 are summaries and do not purport to be
complete. Each summary is qualified in its entirety by reference
to the complete text of the Purchase Documents, and security
holders are urged to read the text of each document before
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making an investment decision. Capitalized terms not defined in
this Schedule 14D-9 shall have the respective meanings ascribed in
the Stock Purchase Agreement.
(i) Stock Purchase Agreement. Dash and the Company entered into
the Stock Purchase Agreement on April 8, 1999. The Stock
Purchase Agreement sets forth the terms and conditions on
which Dash will commence and consummate the Offer, as
summarized below.
The Offer. Within five (5) business days after the filing of
this Schedule 14D-9, Dash will commence a tender offer for
one million five hundred sixty-seven thousand four hundred
seventeen (1,567,417) shares of the Common Stock at a price
of $3.00 per Share, net to the seller in cash (the "Offer
Price"). The Offer is subject to certain conditions to
closing, which are summarized in Conditions to the Offer,
below, and which are fully set forth in the Purchase
Documents, unless the conditions are waived by Dash in its
sole discretion. The Offer may be amended by Dash in
accordance with the terms of the Stock Purchase Agreement,
but without the written consent of the Company an amendment
may not (A) decrease the Offer Price; (B) modify the type of
consideration (other than to add consideration); or (C)
impose additional conditions on the Offer that are
materially adverse to the holders of the Shares (the
"Security Holders").
The Offer will commence on the "Commencement Date," which
will be the day the Purchase Documents, this Schedule 14D-9
and the Schedule 14D-1 are filed with the Securities and
Exchange Commission (the "SEC"), and will terminate on the
twentieth (20th) day thereafter. Dash shall have the right
to extend the Offer from time to time; provided, however,
that Dash shall extend the Offer at any time up to June 15,
1999 for one or more periods of not more than ten (10)
business days if any condition to the Offer (other than the
Minimum Condition) has not previously been satisfied or
waived. In addition, the Offer Price may be increased and
the Offer may be extended without the Company's consent to
the extent required by law in connection with such increase.
If less than seventy percent (70%) of the Shares are
tendered in response to the Offer, the Company will, upon
request by Dash, issue to Dash up to an additional amount of
Shares sufficient to make the aggregate number of Shares
acquired by Dash pursuant to the Offer equal to seventy
percent (70%) of the then outstanding Shares. Such Shares
will be issued, if at all, at a price equal to the greater
of (A) $3.00 per Share; or (B) the most recent price offered
by Dash per Share.
Availability of Financing. In order to fund the growth of
the Company's business after the Closing, Dash has agreed to
make available to the Company up to three million dollars
($3,000,000) of subordinated debt financing or to facilitate
the refinancing and possible increase of the Company's
existing credit facilities on more favorable terms, as
determined by the Board (as constituted following the
Closing) to be in the best interests of the Company.
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Interim Operations. The Company has agreed, on its own
behalf and on behalf of RB Recycling, Inc. (the
"Subsidiary") to certain covenants with respect to its
business, operations and finances until the Closing. Those
covenants include agreements by the Company:
(A) to conduct its business only in the ordinary and usual
course and, to the extent consistent with that
obligation, to use commercially reasonable efforts to
preserve its business organization intact and to
maintain its existing relations with customers,
suppliers, employees and business associates;
(B) not to (I) sell or pledge, or to agree to sell or
pledge, any stock owned by the Company in the
Subsidiary; (II) amend the Company's or the
Subsidiary's articles of incorporation or bylaws;
(III) split, combine or reclassify the outstanding
Shares; or (IV) declare, set aside or pay any dividend
in cash, stock or property;
(C) not to (I) issue, transfer or encumber any Shares or
any security convertible into Shares, other than
pursuant to stock options outstanding on the date of
the Stock Purchase Agreement; (II) transfer, lease or
otherwise encumber the Company's assets other than in
the ordinary course of business; (III) redeem or
otherwise acquire any of the Company's stock; (IV)
authorize capital expenditures in excess of $5,000; or
(V) acquire or invest in the assets or stock of
another entity;
(D) not to grant severance or termination pay to, or enter
into an employment agreement with, any officer,
director or employee (other than the Employment
Agreements and the Non-Competition Agreement); or
establish, adopt or make awards under any new
collective bargaining agreement, stock or stock option
plan, or employee benefit plan;
(E) not to compromise or settle any material claim or
litigation, or modify, amend or terminate any joint
venture or partnership agreement or other material
contract or claim, each without Dash's consent;
(F) not to make any tax election or permit the
cancellation of any insurance policy of which the
Company is a beneficiary or loss payee;
(G) not to change any accounting practice or principle
other than as required by a change in law or in
generally accepted accounting principles;
(H) not to adopt a plan of complete or partial
liquidation, dissolution or merger, or otherwise to
reorganize, consolidate or recapitalize; and
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(I) not to enter into any agreement that would do any of
the foregoing or would be contrary to any
representation or warranty of the Company contained in
the Stock Purchase Agreement.
Representations by the Company. The Company represents and
warrants to Dash that, subject to certain information
provided in the Disclosure Schedule:
(A) Organization. The Company and the Subsidiary are duly
organized and validly existing under the laws of their
respective jurisdictions of incorporation, and are
qualified to do business in jurisdictions in which a
failure to do so would have a material adverse effect
on their respective businesses. The Company has
provided Dash with true and correct copies of its
Articles of Incorporation and Bylaws, and it has no
subsidiaries other than the Subsidiary.
(B) Capitalization. As of April 8, 1999 the Company's
authorized capital consisted of 20,000,000 Shares, of
which 2,239,167 were issued and outstanding. The
Company has no shares reserved for issuance other than
162,500 shares reserved for issuance under outstanding
stock options pursuant to the 1995 Stock Option Plan,
and an aggregate of 95,000 shares reserved for
issuance pursuant to a warrant to Paulson Investment
Company, Inc.
(C) Corporate Records. The Company's corporate records,
including its stock transfer records, have been made
available to Dash and are complete, accurate and up to
date in all material respects.
(D) Authorization. The Company has the requisite corporate
power and authority and has taken all corporate action
necessary in order to execute and deliver the Stock
Purchase Agreement and to consummate the transactions
contemplated thereby. The Stock Purchase Agreement is a
valid and binding agreement of the Company enforceable
against the Company in accordance with its terms,
assuming the due authorization, execution and delivery
thereof by Dash.
(E) Absence of Violations or Conflicts. (i) Other than as
required under the Exchange Act (the "Regulatory
Filings"), no notices, reports or other filings are
required to be made by the Company with, nor are any
consents, registrations, approvals, permits or
authorizations required to be obtained by the Company
from, any governmental or regulatory authority,
agency, commission, court or other entity, domestic or
foreign ("Governmental Entity"), in connection with
the execution and delivery of the Stock Purchase
Agreement by the Company and the consummation by the
Company of the transactions contemplated thereby, the
failure to make or obtain any or all of which is
reasonably likely to have a material
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adverse effect on the financial condition, properties,
business or results of operations of the Company and
the Subsidiary taken as a whole, or could prevent or
materially delay the transactions contemplated by the
Stock Purchase Agreement.
(ii) The execution and delivery of the Stock
Purchase Agreement by the Company do not, and the
consummation by the Company of the transactions
contemplated by the Stock Purchase Agreement will not,
constitute or result in (I) a breach or violation of,
or a default under, the Company Articles or Company
By-Laws or the comparable governing instruments of the
Subsidiary or (II) a breach or violation of, a default
under, the acceleration of or the creation of a lien,
pledge, security interest or other encumbrance on
assets (with or without the giving of notice or the
lapse of time) pursuant to, any provision of any law,
ordinance, rule or regulation or judgment, decree,
order, award or governmental or non-governmental
permit or license to which the Company or the
Subsidiary are subject, except, in the case of clause
(II) above, for such breaches, violations, defaults or
accelerations or changes that, alone or in the
aggregate, could not prevent or materially delay the
transactions contemplated by the Stock Purchase
Agreement.
(F) Company Reports; Financial Statements. The Company
has delivered to Dash each registration statement,
schedule, report, proxy statement or information
statement required to be filed or otherwise filed with
the SEC (the "Company Reports") prepared by it since
December 31, 1998 (the "Audit Date"), including,
without limitation, (i) the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1998 and
(ii) the Company's Form 8-K dated January 29, 1999,
each in the form (including exhibits and any
amendments thereto) filed with the SEC. As of their
respective dates, the Company Reports complied in all
material respects with the applicable requirements
under the Exchange Act and did not, and any Company
Reports filed with the SEC subsequent to the date
hereof and prior to the Closing Date will not, contain
any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements made therein, in
light of the circumstances in which they were made,
not misleading. Each of the consolidated balance
sheets and statements of financial position included
in or incorporated by reference into the Company
Reports (including the related notes and schedules)
fairly presents the consolidated financial position of
the Company and its subsidiaries as of its date and
each of the consolidated statements of earnings,
stockholders' equity and cash flows included in or
incorporated by reference into the Company Reports
(including any related notes and schedules) fairly
presents the results of operations, stockholders'
equity and cash flows, as the case may be, of the
Company and its subsidiaries for the periods set forth
therein (subject, in
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the case of unaudited statements, to normal year-end
audit adjustments which will not be material in amount
or effect), in each case in accordance with generally
accepted accounting principles consistently applied
during the periods involved, except as may be noted
therein. Other than the Company Reports specifically
recited above, the Company has not filed any other
definitive reports or statements with the SEC since
the Audit Date.
(G) Absence of Certain Changes. Except as disclosed in the
Company Reports filed with the SEC prior to the date
of the Stock Purchase Agreement or otherwise disclosed
in the Disclosure Schedule or as to which Dash has
consented in writing, since the Audit Date, the
Company and the Subsidiary have conducted their
respective businesses only in, and have not engaged in
any material transaction other than according to, the
ordinary and usual course of such businesses and there
has not been:
(i) any material adverse change in the
financial condition, properties, business or results
of operations of the Company and the Subsidiary taken
as a whole or any development or combination of
developments of which management of the Company has
knowledge that is reasonably likely to result in any
such change;
(ii) any change by the Company in accounting
principles, practices or methods;
(iii) any damage, destruction or casualty loss
to the assets of the Company or the Subsidiary or
other equipment used by the Company or the Subsidiary
in performing its obligations under its Contracts or
Leases (whether or not owned by the Company or the
Subsidiary or covered by insurance);
(iv) any increase in the compensation payable
by the Company or the Subsidiary to any director,
officer, employee or agent of the Company or the
Subsidiary (other than routine increases made in the
ordinary course of business consistent with past
practice) or any bonus, incentive compensation,
service award or other like benefit, granted, made or
accrued, contingent or otherwise, to or to the credit
of any of such director, officer, employee or agent or
any employee welfare, pension, retirement or similar
payment or arrangement made or agreed to by the
Company or the Subsidiary with respect to any such
director, officer, employee or agent;
(v) any sale, assignment or transfer
(including without limitation any collateral
assignment or the granting or permitting of any lien,
encumbrance or other claim) of any asset, property or
right of the
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Company or the Subsidiary other than the sale of
inventory in the ordinary course of business;
(vi) any amendment, modification, waiver or
cancellation of any debt owed to, or claim of, the
Company or the Subsidiary, or settlement by the
Company or the Subsidiary of any dispute involving any
payment or other obligation due to or owed by the
Company or the Subsidiary, in an amount greater than
$5,000, to be made or performed after the Closing
Date;
(vii) any borrowing of money by the Company or
the Subsidiary, or the incurrence of any obligation or
liability (whether absolute or contingent), in an
amount greater than $5,000, other than current
liabilities incurred in the ordinary course of the
Company's and the Subsidiary's business;
(viii) any payment by the Company or the
Subsidiary of any obligation or liability (whether
absolute or contingent) in an amount greater than
$5,000, other than current liabilities incurred in the
ordinary course of business;
(ix) any capital expenditure or commitment to
make a capital expenditure by the Company or the
Subsidiary (exclusive of expenditures for repair or
maintenance of equipment in the ordinary course of
business) in an amount greater than $5,000;
(x) any incurrence of any extraordinary loss
or knowing waiver of any rights of substantial value
by the Company or the Subsidiary in connection with an
aspect of its business in an amount greater than
$5,000, whether or not in the ordinary course of
business;
(xi) any cancellation, termination or amendment
by the Company or the Subsidiary of any Contract,
Lease or Intellectual Property License to which the
Company or the Subsidiary is a party or by which the
Company or the Subsidiary is bound that would change
the amount owed to or by the Company or the Subsidiary
by more than $5,000;
(xii) any merger or consolidation of the Company
or the Subsidiary into or with any other corporation
or enterprise, or any corporate action by the Company
or the Subsidiary toward or effecting such a merger or
consolidation or a complete or partial liquidation or
dissolution of the Company or the Subsidiary or any
material portion of its assets;
(xiii) any failure on the part of the Company
or the Subsidiary to operate its business in the
ordinary course so as to preserve its business
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organization reasonably intact, including the services
of its present officers and the goodwill of its
suppliers, customers and others having business
relations with the Company or the Subsidiary;
(xiv) any redemption or repurchase, directly or
indirectly, of any Shares or other equity securities
of the Company or the Subsidiary, or, any setting
aside or payment of dividends or other distributions
(whether in cash or in kind), with respect to the
Shares or other equity securities of the Company or
the Subsidiary; or
(xv) any agreement by or commitment of the
Company or the Subsidiary to do or permit (through any
authorized representative or agent of the Company or
the Subsidiary) any of the foregoing.
(H) Taxes.
(i) Definitions. For purposes of the Stock
Purchase Agreement:
(A) the term "Code" means the Internal Revenue
Code of 1986, as amended. All citations to the Code
or to the regulations promulgated thereunder shall
include any amendments or any substitute or successor
provisions thereto;
(B) the term "Returns" means, collectively,
(1) all reports, declarations, estimates, returns,
information statements, and similar documents relating
to, or required to be filed in respect of, any Taxes;
and (2) any statements, returns, reports, or similar
documents required to be filed pursuant to Part III of
Subchapter A of Chapter 61 of the Code or pursuant to
any similar income, excise, or other tax provision of
federal, territorial, state, local, or foreign law;
and the term "Return" means any one of the foregoing
Returns;
(C) the term "Tax Asset" means any net
operating loss, net capital loss, investment Tax
credit, foreign Tax credit, charitable deduction or
any other credit or Tax attribute (determined without
regard to the Tax period in which such loss, credit or
other attribute arose) which could reduce Taxes; and
(D) the term "Taxes" means (1) all income, net
income, gross income, gross receipts, sales, use, ad
valorem, franchise, profits, license, lease, service,
service use, withholding, employment, payroll, excise,
severance, transfer, documentary, mortgage,
registration, stamp, occupation, environmental,
premium, property, windfall profits, customs, duties,
and other taxes, fees, assessments or charges of any
kind whatever, together with any interest, penalties
and other additions with respect
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thereto, imposed by any federal, territorial, state,
local or foreign government; and (2) any penalties,
interest, or other additions to tax for the failure to
collect, withhold, or pay over any of the foregoing,
or to accurately file any Return; and the term "Tax"
shall mean any one of the foregoing Taxes. When used
with reference to specified persons (for example and
without limitation, "Taxes of the Company"), the terms
"Taxes" and "Tax" shall include only amounts of, or in
respect of, Taxes for which such person is, or could
become, liable in whole or part (including, without
limitation, any obligation in connection with a duty
to collect, withhold, or pay over any Tax, any
obligation to contribute to the payment of any Taxes
determined on a consolidated, combined, or unitary
basis, any liability as a transferee, or any liability
as a result of any express or implied obligation to
indemnify or pay the Tax obligations of another
person).
(ii) Returns Filed and Taxes Paid. (A) the
Company has duly filed or caused to be filed, on or
before the due date thereof (as appropriately
extended) with the appropriate taxing authorities, all
Returns that it is required to file (other than those
sales and use Tax Returns the failure of which to file
would not have a material adverse effect on the
Company); (B) each such Return (including any
amendment thereto) is true, correct, and complete; (C)
all Taxes of the Company due with respect to, or shown
to be due on, each such Return (or amendment) have
been timely paid; (D) to the best of the Company's
knowledge, there is no valid basis for the assessment
of any deficiency with regard to any such Return; and
(E) there are no extensions of time to file which are
pending. There are no liens, attachments, or similar
encumbrances on any of the assets of the Company with
respect to any Taxes, other than liens for Taxes that
are not yet due and payable.
(iii) Miscellaneous. The Company has collected
or withheld all Taxes that it is required to collect
or withhold, and the Company is not a party to or
bound by any tax indemnity, tax sharing or tax
allocation agreement, or any other contractual
obligation to pay the Tax obligations of another
person or to pay Tax obligations relating to
transactions of another person. None of the Company's
assets (A) is property which is required to be treated
as being owned by any other person pursuant to the so-
called "safe harbor lease" provisions of former
section 168(f)(8) of the Code; (B) directly or
indirectly secures any debt the interest on which is
tax exempt under section 103(a) of the Code; (C) is
"tax-exempt use property" within the meaning of
section 168(h) of the Code, or (D) is stock of a
domestic or foreign corporation (including any entity
that properly may be treated as a corporation for
Federal income tax purposes) meeting the requirements
of Code section 1504(a)(2). The transactions
contemplated by the Stock Purchase Agreement are not
subject to the tax
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withholding provisions of Code section 3406, or of
subchapter A of Chapter 3 of the Code, or of any other
comparable provision of law.
(iv) Audit History and Other Proceedings. (A)
there are no pending or, to the best of the Company's
knowledge, threatened audits, investigations, claims,
suits or other proceedings for or relating to any
liability in respect of Taxes of the Company; (B)
since December 31, 1993, no deficiencies for Taxes of
the Company have been claimed, proposed or assessed by
any taxing or other Governmental Entity; (C) there are
no matters under discussion by the Company with any
Governmental Entity with respect to Taxes that could
result in any additional amount of Taxes of the
Company; (D) no extension of a statute of limitations
(whether arising by reason of a waiver, claim for
refund, or otherwise) relating to Taxes of the Company
is in effect; and (E) there are no requests for
rulings or determinations in respect of Taxes of the
Company pending with any governmental authority.
Since December 31, 1993, there have been no audits of
any of the Company's Federal, state or local Returns.
(I) Real and Personal Property. For purposes of the Stock
Purchase Agreement, "Property" or "Properties" means
those real and personal properties owned or used by
the Company, the Subsidiary or any partnership, joint
venture or similar entity in which the Company has an
ownership interest. The Disclosure Schedule lists all
of the real property to which the Company or the
Subsidiary holds legal or equitable title (whether or
not of record). (A) each of the Company and the
Subsidiary has good and marketable title to all of the
Properties owned by it; and (B) none of the Properties
is subject to any lien, claim or other encumbrance
whatsoever, except (1) liens for Taxes not yet due and
payable, (2) liens shown and described in the Company
Balance Sheet, and (3) liens imposed by law and
incurred in the ordinary course of business for
obligations not yet due and payable to landlords,
carriers, warehousemen, laborers, materialmen and the
like (collectively, the "Permitted Liens"). No part
of the Properties is "tax-exempt use property" under
Section 168(h) of the Code.
(J) Leases; Subleases. For purposes of the Stock Purchase
Agreement, "Lease" means any written or oral lease,
sublease or rental agreement (and any related contract
and agreement), and all amendments, modifications and
supplements thereof and waivers and consents
thereunder pursuant to which the Company or the
Subsidiary leases, subleases or rents any real or
personal property, either as lessor, lessee, landlord
or tenant. The Disclosure Schedule lists all Leases,
except those which (A) can be canceled by the Company
or the Subsidiary upon 30 or fewer days' notice
without penalty or the acceleration of rentals, (B) do
not grant an option to
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purchase the leased property, and (C) involve an
annual rental of $5,000 or less. The Disclosure
Schedule describes all oral Leases required to be
disclosed therein, and true and complete copies of all
written Leases required to be disclosed have been
heretofore delivered to Dash. With respect to each
of the Leases: (1) neither the Company nor the
Subsidiary nor, to the best of the Company's
knowledge, any other party is in default in connection
with such Lease; (2) no act or event has occurred
which, with notice or lapse of time or both, would
constitute a default under such Lease with respect to
the Company or the Subsidiary or, to the best of the
Company's knowledge, any other party; (3) there is no
basis for any claim of default under such Lease with
respect to the Company or the Subsidiary or, to the
best of the Company's knowledge, any other party; (4)
neither the Company nor the Subsidiary has given or
received any notice of cancellation or termination in
connection with such Lease; (5) such Lease is the
valid and binding agreement of the Company or the
Subsidiary, and, to the best of the Company's
knowledge, the other party thereto, which is in full
force and effect and is enforceable in accordance with
its terms, except, with respect to such other party,
to the extent that such enforceability may be limited
by, or subject to: (A) the effect of any applicable
bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws affecting
the enforcement of creditors' rights generally; (B)
the availability of the remedies of specific
performance or injunctive relief, which may be subject
to the discretion of the court before which any
proceeding for such remedies may be brought; and (C)
the exercise by any court of equitable judicial
discretion before which any proceeding may be brought;
(6) such Lease will not be affected by, or require the
consent of or payment to any other party to avoid an
event of default, an event of termination or other
adverse effect with respect to such by reason of the
transactions contemplated by the Stock Purchase
Agreement; and (7) such Lease is a "true" lease for
federal income tax purposes.
(K) Adequacy; Condition. (i) The Properties and the
properties subject to a Lease are fit for use in the
business of the Company and the Subsidiary as
presently conducted in all material respects; (ii)
the Properties and all of the properties subject to a
Lease are each in good repair and operating condition,
normal wear and tear excepted, and structurally and
mechanically sound, as applicable; (iii) the Company
and the Subsidiary are in compliance with all
applicable building, zoning, land use or other similar
statutes, laws, ordinances, regulations, permits,
health and safety codes or other requirements in
respect of any of the Properties or any of the
properties subject to a Lease (and the Company's and
the Subsidiary's current use of such properties does
not constitute a nonconforming use), except where the
failure to comply would not have a material adverse
effect on the Company and the Subsidiary taken as a
whole, and neither
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the Company nor the Subsidiary has received any notice
alleging such a violation; (iv) to the best of the
Company's knowledge, none of the properties subject to
a Lease has ever been used as a landfill or otherwise
been used for the disposal of any waste, trash,
garbage, industrial by-product or chemical or the
storage or treatment of hazardous substance of any
nature; and (v) to the best of the Company's
knowledge, there are no outstanding requirements or
recommendations by fire underwriters or rating boards,
any insurance companies or holders of mortgages or
other security interests requiring or recommending any
repairs or work to be done with reference to any of
the properties subject to a Lease.
(L) All Necessary Properties. The Properties and the
Leases (together with the intangible properties
disclosed, or not required to be disclosed, pursuant
to Sections 4.1(n), 4.1(p) and 4.1(q) of the Stock
Purchase Agreement) constitute all of the properties
which the Company and the Subsidiary use in connection
with the operation of their respective businesses as
presently conducted and the consummation of the
transactions contemplated by the Stock Purchase
Agreement (provided that all required consents
relating to the Properties and the Leases have been
obtained) will not materially alter the rights or
impair the ability of the Company or the Subsidiary to
use such properties in the conduct of its business as
it is now being conducted.
(M) Accounts Receivable; Inventory; Customers; Suppliers.
(i) The accounts receivable of the Company and
the Subsidiary as reflected on the Company Balance
Sheet or the books of the Company: (A) are valid,
existing and, to the extent uncollected, will be
collected in full within 90 days after the day on
which it first becomes due and payable without resort
to legal proceedings or the use of collection
agencies, except to the extent of the allowance for
doubtful accounts contained in the Company Balance
Sheet; (B) represents monies due for services
rendered; and (C) are subject to no material refunds
or other material adjustments or to any defenses,
rights of set-off, assignments, restrictions, security
interests, encumbrances or conditions enforceable by
third parties on or affecting any thereof.
(ii) Except as set forth in the 1998 Financial
Statements, all of the Company's and the Subsidiary's
inventory (including raw materials and work in
process) is usable in the ordinary course of its
business and is free from material defects, and all
finished goods are salable in the ordinary course of
its business.
(iii) A complete and accurate list of the ten
largest customers (by dollar volume) of the Company
and the Subsidiary, taken as a whole,
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during the twelve months ended December 31, 1998 is
set forth in the Disclosure Schedule.
(iv) A complete and accurate list of the ten
largest suppliers (by dollar volume) of the Company
and the Subsidiary, taken as a whole, during the
twelve months ended December 31, 1998 is set forth in
the Disclosure Schedule.
(N) Intellectual Property; Patents; Trademarks, Trade
Names. All patents, trademarks, service marks, trade
names or copyrights owned by or used or proposed to be
used by the Company or the Subsidiary and all
applications or registrations therefor ("Intellectual
Property") and all contracts, agreements, commitments,
arrangements, undertakings and understandings relating
to the use or license of technology, know-how or
processes by the Company or the Subsidiary (the
"Intellectual Property Licenses") are listed in the
Disclosure Schedule. (i) The Company or the
Subsidiary owns, or has the sole and exclusive right
to use, all Intellectual Property, whether under
Intellectual Property Licenses or otherwise, used in
or necessary for the ordinary conduct of its business;
(ii) the consummation of the transactions contemplated
by the Stock Purchase Agreement will not alter or
impair any such rights; and (iii) no Intellectual
Property owned, licensed or used by the Company or the
Subsidiary, or Intellectual Property License of the
Company or the Subsidiary is the subject of a lawsuit
or any other proceeding, nor has any party challenged
or, to the best of the Company's knowledge, threatened
to challenge the Company's or the Subsidiary's
respective right to use such Intellectual Property or
Intellectual Property License or application for any
of the foregoing; and, to the best of the Company's
knowledge, there is no basis for any such challenge.
(O) Indebtedness. The Disclosure Schedule sets forth (i)
a complete and accurate list or description of all
instruments or other documents ("Debt Instruments")
relating to any direct or indirect indebtedness for
borrowed money of the Company or the Subsidiary, as
well as indebtedness by way of capital leases, lease-
purchase arrangements, guarantees, undertakings on
which others rely in extending credit and all
conditional sales contracts, chattel mortgages and
other security arrangements with respect to personal
property used or owned by the Company or the
Subsidiary and (ii) a list of all loans of money to
the respective officers, employees or shareholders of
the Company or the Subsidiary (specifically excluding
travel and similar advances in the ordinary course of
business).
(P) Other Contracts. The Disclosure Schedule lists each
contract, agreement, commitment, arrangement,
undertaking or understanding of the type listed below
(except where the same does not call for the payment
or receipt by
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the Company or the Subsidiary of cash or other
property or services having a value in excess of
$5,000) to which the Company or the Subsidiary is a
party or bound or to which the Company or the
Subsidiary or any of their respective properties are
subject, whether written or oral ("Contract," but such
list and the term "Contract" shall not include Leases,
Intellectual Property Licenses, Debt Instruments,
Insurance Policies and employee-related matters
disclosed elsewhere in the Stock Purchase Agreement):
(i) for the purchase or rental of materials,
inventory and supplies by the Company or the
Subsidiary entered into in the ordinary course of
business which are not reasonably expected to be fully
performed within 45 days of their respective dates;
(ii) for the purchase of services by the
Company or the Subsidiary entered into in the ordinary
course of business which are not reasonably expected
to be fully performed within 45 days of their
respective dates;
(iii) that were entered into in the ordinary
course of business and which are not reasonably
expected to be fully performed within 45 days of their
respective dates;
(iv) for matters not in the ordinary course of
the Company's or the Subsidiary's business;
(v) making the Company or the Subsidiary
liable, by guaranty, suretyship agreement,
indemnification agreement, contribution agreement or
otherwise, upon or with respect to, or obligating the
Company or the Subsidiary in any way to provide funds
in respect of, or obligating the Company or the
Subsidiary to guarantee, serve as surety for or
assume, any debt, dividend or other liability or
obligation of any person, corporation, association,
partnership or other entity (except endorsements made
in the ordinary course of business in connection with
the deposit of items for collection and except for
immaterial obligations or liabilities incurred in the
ordinary course of business);
(vi) granting a power of attorney;
(vii) relating to participation in a cooperative,
partnership or joint venture;
(viii) imposing confidentiality requirements (other
than agreements relating to confidentiality requirements
between Dash and/or the Company or the Subsidiary); and
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(ix) restricting or limiting the freedom of the
Company or the Subsidiary to compete in any line of
business.
The Disclosure Schedule describes all oral Contracts
required to be disclosed therein, and true and
complete copies of all written Contracts (as amended)
required to be disclosed in the Disclosure Schedule
have been delivered to Dash.
(Q) Insurance. All insurance policies of the Company or
the Subsidiary now in force (including comprehensive
general liability, personal and professional
liability, comprehensive general casualty and extended
coverage, automobile, boiler and machinery, fire and
lightning, marine, endowment, life, and worker's
compensation) ("Insurance Policies") are listed in the
Disclosure Schedule, together with a listing of the
type of policy, the policy number, the limits of
coverage, the carrier, the annual premium and the
expiration date), and true and complete copies of such
policies have been provided or made available to Dash.
The Company has provided to Dash a true and complete
summary of the loss experience under each such
insurance policy during the preceding five policy
years. Neither the Company nor the Subsidiary has
received any notice that any insurance carrier has
cancelled, intends to cancel or intends not to renew
any of such policies.
(R) Status. (i) Neither the Company nor the Subsidiary
has assigned any of its rights or obligations under
(and, to the best of the Company's knowledge, is not
otherwise restricted for any reason from enjoying the
full benefits under) any Intellectual Property
License, Debt Instrument, Contract or Insurance
Policy; (ii) neither the Company nor the Subsidiary
nor, to the best of the Company's knowledge, any other
party is in default in connection with any
Intellectual Property License, Debt Instrument,
Contract or Insurance Policy; (iii) to the best of the
Company's knowledge, no act or event has occurred
which, with notice or lapse of time or both, would
constitute a default under any Intellectual Property
License, Debt Instrument, Contract or Insurance
Policy; (iv) to the best of the Company's knowledge,
there is no basis for any claim of default under any
Intellectual Property License, Debt Instrument,
Contract or Insurance Policy; (v) there is no
outstanding notice of cancellation or termination
received by the Company or the Subsidiary in
connection with any Intellectual Property License,
Debt Instrument, Contract or Insurance Policy; (vi)
each Intellectual Property License, Debt Instrument,
Contract and Insurance Policy is the valid and binding
agreement of the Company or the Subsidiary, as the
case may be, and, to the best of the Company's
knowledge, the other parties thereto, which is in full
force and effect and is enforceable in accordance with
its terms, except, with respect to such other party,
to the extent that such enforceability may be limited
by, or
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subject to: (A) the effect of any applicable
bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws affecting
the enforceability of creditors' rights generally, (B)
the availability of specific performance or injunctive
relief, which may be subject to the discretion of the
court before which any proceeding for such remedies
may be brought, and (C) the exercise by any court of
equitable judicial discretion before which any
proceeding may be brought; (vii) no Intellectual
Property License, Debt Instrument, Contract or
Insurance Policy will require the consent of or
payment to any other party to avoid an event of
default or an event of termination with respect to
such Intellectual Property License, Debt Instrument,
Contract or Insurance Policy (assuming that any
required notice of default or termination has been
given and any periods for cure have expired) by reason
of the transactions contemplated by the Stock Purchase
Agreement; and (viii) neither the Company nor the
Subsidiary has received any communication proposing
any termination, amendment or change to any
Intellectual Property License, Debt Instrument,
Contract or Insurance Policy.
(S) Employee Benefits.
(i) All bonus, deferred compensation, pension,
retirement, profit-sharing, thrift savings, employee
stock ownership, stock bonus, stock purchase,
restricted stock and stock option, employment,
termination, severance, compensation, medical, health
or other plan, contract, policy or arrangement which
covers current or former employees of the Company or
the Subsidiary (the "Employees") and current or former
directors of the Company or the Subsidiary (the
"Compensation and Benefit Plans") including, but not
limited to, "employee benefit plans" within the
meaning of section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") are
listed in the Disclosure Schedule and any "change of
control" or similar provisions therein are
specifically identified in the Disclosure Schedule.
True and complete copies of all Compensation and
Benefit Plans and such other benefit plans, contracts
or arrangements, including, but not limited to, any
trust instruments and insurance contracts, if any,
forming a part of any such plans and agreements, and
all amendments thereto have been made available to
Dash. The Company has filed all Form 5500's required
to be filed with respect to the Compensation and
Benefit Plans and each such form is complete and
accurate in all material respects and complies in all
material respects with all applicable law.
(ii) All Compensation and Benefit Plans are in
substantial compliance with applicable law and all
Compensation and Benefit Plans which are employee
benefit plans, other than "multiemployer plans" within
the meaning of sections 3(37) of ERISA, covering
employees (the
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<PAGE>
"Plans") to the extent subject to ERISA, are in
substantial compliance with ERISA. Each Plan which is
an "employee pension benefit plan" within the meaning
of section 3(2) of ERISA ("Pension Plan") and which is
intended to be qualified under section 401(a) of the
Code, has received a favorable determination letter
from the Internal Revenue Service with respect to
"TRA" (as defined in Section 1 of Internal Revenue
Service Revenue Procedure 93-39), and the Company is
not aware of any circumstances likely to result in
revocation of any such favorable determination letter.
There is no material pending or, to the knowledge of
the Company, threatened litigation relating to the
Compensation and Benefit Plans. Neither the Company
nor the Subsidiary has engaged in a transaction with
respect to any Plan that, assuming the taxable period
of such transaction expired as of the date hereof,
could subject the Company or the Subsidiary to a
material tax or penalty imposed by either section 4975
of the Code or section 502(i) of ERISA.
(iii) No liability under Subtitle C or D of
Title IV of ERISA has been or is expected to be
incurred by the Company or the Subsidiary with respect
to any ongoing, frozen or terminated "single-employer
plan", within the meaning of section 4001(a)(15) of
ERISA, currently or formerly maintained by any of
them, or the single-employer plan of any entity which
is considered one employer with the Company under
section 4001 of ERISA or section 414 of the Code (an
"ERISA Affiliate"). The Company and the Subsidiary
have not incurred and do not expect to incur any
withdrawal liability with respect to a multiemployer
plan under Subtitle E of Title IV of ERISA. No notice
of a "reportable event", within the meaning of section
4043 of ERISA for which the 30-day reporting
requirement has not been waived, has been required to
be filed for any Pension Plan or by any ERISA
Affiliate within the 12-month period ending on the
date hereof.
(iv) All contributions required to be made
under the terms of any Plan have been timely made.
Neither any Pension Plan nor any single-employer plan
of an ERISA Affiliate has an "accumulated funding
deficiency" (whether or not waived) within the meaning
of section 412 of the Code or section 302 of ERISA.
Neither the Company nor the Subsidiary has provided,
or is required to provide, security to any Pension
Plan or to any single-employer plan of an ERISA
Affiliate pursuant to section 401(a)(29) of the Code.
(v) Under each Pension Plan which is a single-
employer plan, as of the last day of the most recent
plan year ended prior to the date hereof, the
actuarially determined present value of all "benefit
liabilities", within the meaning of section
4001(a)(16) of ERISA (as determined on the basis of
the actuarial assumptions contained in the Plan's most
recent
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actuarial valuation), did not exceed the then current
value of the assets of such Plan, and there has been
no material change in the financial condition of such
Plan since the last day of the most recent Plan Year.
The withdrawal liability of the Company and the
Subsidiary under each Benefit Plan which is a
multiemployer plan to which the Company, the
Subsidiary or an ERISA Affiliate has contributed
during the preceding 12 months, determined as if a
"complete withdrawal", within the meaning of section
4203 of ERISA, had occurred as of the date hereof,
does not exceed $10,000.
(vi) Neither the Company nor the Subsidiary has
any obligations for retiree health and life benefits
under any Plan, except as set forth in the Disclosure
Schedule. The Company or the Subsidiary may amend or
terminate any such Plan pursuant to the terms thereof.
(vii) The consummation of the transactions
contemplated by the Stock Purchase Agreement will not
(x) entitle any employees of the Company or the
Subsidiary to severance pay, (y) accelerate the time
of payment or vesting or trigger any payment of
compensation or benefits under, increase the amount
payable or trigger any other material obligation
pursuant to, any of the Compensation and Benefit Plans
or (z) result in any breach or violation of, or a
default under any of the Compensation and Benefit
Plans.
(viii) All Compensation and Benefit Plans
covering non-U.S. Employees comply in all material
respects with applicable local law. The Company and
the Subsidiary have no material unfunded liabilities
with respect to any Pension Plan which covers non-U.S.
Employees.
(T) Takeover Statutes. No "fair price", "moratorium",
"control share acquisition," "business combination" or
other similar antitakeover statute or regulation (each
a "Takeover Statute") is applicable to the Company,
the Subsidiary, the Shares, the Offer or the
transactions contemplated hereby.
(U) Environmental Matters. Except to the extent that the
Company's noncompliance with the following would not
reasonably be likely to have a material adverse effect
on the financial condition, properties, business or
results of operations of the Company and the
Subsidiary taken as a whole: (i) the Company and the
Subsidiary have complied at all times with all
applicable Environmental Laws; (ii) to the best of the
Company's knowledge after reasonable inquiry, all
properties currently owned or operated by the Company
or the Subsidiary (including soils, groundwater,
surface water, buildings or other structures) have not
been contaminated with any Hazardous Substances; (iii)
to the best of the Company's
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knowledge after reasonable inquiry, any properties
formerly owned or operated by the Company or the
Subsidiary were not contaminated with Hazardous
Substances on or prior to such period of ownership or
operation; (iv) neither the Company nor the Subsidiary
is subject to liability for any Hazardous Substance
disposal or contamination on any third party property;
(v) to the best of the Company's knowledge after
reasonable inquiry, neither the Company nor the
Subsidiary is subject to liability for any release or
threat of release of any Hazardous Substance; (vi)
neither the Company nor the Subsidiary has received
any notice, demand, letter, claim or request for
information indicating that it may be in violation of
or liable under any Environmental Law; (vii) neither
the Company nor the Subsidiary is subject to any
order, decree, injunction or other arrangement with
any governmental entity or any indemnity or other
agreement with any third party relating to liability
under any Environmental Law; (viii) none of the
properties of the Company or the Subsidiary contain
any underground storage tanks, asbestos-containing
material, lead products, or polychlorinated biphenyls;
(ix) there are no other circumstances or conditions
involving the Company or the Subsidiary known to the
Company after reasonable inquiry that could reasonably
be expected to result in any claims, liability,
investigations, costs or restrictions on the
ownership, use, or transfer of any property pursuant
to any Environmental Law; and (x) the Company has
delivered or made available to Dash copies of all
environmental reports, studies, assessments, sampling
data and all other information in its possession
relating to asbestos and silica liability and claims
including without limitation product and sales
information, filing rates, settlements, projected
claims, legal advice, reserves, insurance and the use
and disposal of asbestos containing material.
As used herein, the term "Environmental Law" means any
federal, state or local law, regulation, order,
decree, permit, authorization, opinion, common law or
agency requirement relating to: (A) the protection,
investigation or restoration of the environment,
health, safety, or natural resources, (B) the
handling, use, presence, disposal, release or
threatened release of any Hazardous Substance, (C)
noise, odor, wetlands, pollution, contamination or any
injury or threat of injury to persons or property or
(D) standards of conduct concerning protection of
human health (including, without limitation, employee
health and safety), in each case as amended and as now
or hereafter in effect, and the term "Hazardous
Substance" means any substance that is: (A) listed,
classified or regulated pursuant to any Environmental
Law; (B) any petroleum product or by-product,
asbestos-containing material, silica, lead-containing
paint or plumbing, polychlorinated biphenyls,
radioactive materials or radon; or (C) any other
substance which may be the subject of regulatory
action by any governmental authority pursuant to any
Environmental Law.
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(V) Labor Relations. (i) The Company and the Subsidiary
are (and, since January 1, 1994, have been) in
material compliance with all federal, state, local and
other applicable law respecting employment and
employment practices, terms and conditions of
employment and wages and hours; (ii) there is (and,
since January 1, 1994, has been) no unfair labor
practice, complaint, charge or other matter against or
involving the Company or the Subsidiary pending or
threatened before any Governmental Entity; (iii) there
is no (and, since January 1, 1994 has not been) labor
strike, dispute, organizing effort, slow down,
stoppage or other labor difficulty pending, involving
or, to the best of the Company's knowledge,
threatened, against or affecting the Company or the
Subsidiary; (iv) no representation question exists, or
has existed since January 1, 1994, with respect to the
respective employees of the Company or the Subsidiary;
(v) no grievance which might have an adverse effect on
the Company or the Subsidiary or on the conduct of its
business nor any arbitration proceeding arising out of
or under collective bargaining agreements is pending,
and no claim therefor exists; and (vi) there is (and,
since January 1, 1994, has been) no collective
bargaining agreement which is binding on the Company
or the Subsidiary.
(W) Litigation. There are no (i) civil, criminal or
administrative actions, suits, claims, hearings,
investigations or proceedings (collectively,
"Actions") pending or, to the knowledge of the
management of the Company, threatened against the
Company or the Subsidiary or (ii) obligations or
liabilities, whether or not accrued, contingent or
otherwise, including, without limitation, those
relating to matters involving any Environmental Law
(as defined in Section 4.1(u)).
(X) Compliance with Laws.
(i) Generally. The Company and the Subsidiary
are (and during the preceding five years have been) in
material compliance with all applicable law (including
those involving antitrust, unfair competition, trade
regulation, antipollution, environmental, employment,
safety, health and food and drug matters). Without
limiting the foregoing, neither the Company nor the
Subsidiary has at any time made any illegal payment
for political contributions, any bribe or illegal
kickback payment, or any practice or procedure which
results or will result in the illegal payment by or on
behalf of the Company or the Subsidiary to a person in
connection with a referral to the Company or the
Subsidiary by such person.
(ii) Charges or Violations. The Company and
the Subsidiary are not (and, during the preceding five
years, have not been) either charged with, in receipt
of any notice or warning of, or under investigation
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with respect to, any failure or alleged failure to
materially comply with any provision of any applicable
law.
(iii) Permits. Without limiting the foregoing:
(A) a list of all occupancy certificates and other
licenses, permits and certificates ("Permits")
required of the Company or the Subsidiary in
connection with its ownership, possession, use,
occupancy or operation of any of the Properties owned,
leased or used by it are set forth in the Disclosure
Schedule; (B) all of the Permits are in full force and
effect in all material respects; (C) the Company and
the Subsidiary are (and have been) in material
compliance with the Permits; and (D) none of the
Permits will be affected by, or require the consent of
any party by reason of, the transactions contemplated
by the Stock Purchase Agreement where such effect or
failure to obtain such consent would restrict or
hamper the operation of any operating facility owned,
leased or used by the Company or the Subsidiary.
(Y) Bank Accounts. The Disclosure Schedule lists all
bank, money market, savings and similar accounts and
safe deposit boxes of the Company and the Subsidiary,
specifying the account numbers and the authorized
signatories or persons having access to them.
(Z) Transactions with Affiliates. No holder of 10% or
more of the outstanding common stock of the Company
nor any person controlled by some combination of them,
no officer or director of the Company or the
Subsidiary, nor any "affiliate" or "associate" (as
such terms are defined in the rules and regulations of
the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "1933 Act"))
of any of the foregoing:
(i) is a party to any lease, sublease,
contract, agreement, commitment, understanding or
other arrangement of any kind whatsoever, involving
any such person and the Company or the Subsidiary;
(ii) owns directly or indirectly, in whole or
in part, any property that the Company or the
Subsidiary uses or otherwise has rights in respect of;
or
(iii) has any cause of action or other claim
whatsoever against, or owes any amount to, the Company
or the Subsidiary other than (i) for compensation
(including fringe benefits) to officers and employees
disclosed pursuant to Section 4.1(s) of the Stock
Purchase Agreement and for reimbursement of ordinary
and necessary expenses incurred in connection with
employment by the Company or the Subsidiary and (ii)
as otherwise disclosed pursuant to the Stock Purchase
Agreement.
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(AA) Commissions. No person, firm or corporation is
entitled to any commission or broker's or finder's fee
in connection with the transactions contemplated by
the Stock Purchase Agreement by reason of any act or
omission of the Company or the Subsidiary, other than
payment to Pacific Crest Securities with respect to
the issuing of its fairness opinion in accordance with
its engagement agreement with the Company, a true and
complete copy of which has been provided to Dash.
(BB) Generally. No representation or warranty by the
Company in the Stock Purchase Agreement or in the
Disclosure Schedule, any Exhibit or closing
certificate furnished or to be furnished to Dash
pursuant to the Stock Purchase Agreement or in
connection with the transactions contemplated by the
Stock Purchase Agreement contains or will contain any
untrue statement of a material fact, or omits or will
omit to state a material fact, necessary to make the
statements herein or therein, in light of the
circumstances in which they were made, not misleading.
Access by Dash; Notification of Certain Matters. The Stock
Purchase Agreement requires that the Company provide Dash's
Representatives reasonable access to Company Representatives and
to the Company's books, records, properties, and contracts, and to
comply with reasonable requests for additional information or
documents from Dash. Information provided to or requested by Dash
does not limit or qualify the Company's representations and
warranties contained in the Stock Purchase Agreement.
The Company also is required to notify Dash if the following
events occur: (A) certain environmental matters; (B) events of
default under the Company's contracts, leases, debt agreements,
intellectual property licenses and insurance; (C) changes or
developments in any legal or regulatory action involving the
Company, including without limitation new filed or threatened
actions; and (D) material adverse changes in the Company's
financial condition, properties or business.
Takeover Statutes. In contemplation of the Oregon Business
Combination Act, which is applicable to the transaction
contemplated by the Stock Purchase Agreement, the Company and the
Board are required to grant such approvals and take such actions
as are necessary so that the transactions contemplated by the
Stock Purchase Agreement may be consummated as promptly as
practicable on the terms contemplated thereby, and otherwise to
eliminate or minimize the effects of that statute and other
statutes and regulations applicable to the Offer.
Board. Following the Closing the Company must use its best efforts
to cause the Board to include Ronald L. Bogh, Paul M. Gilson and,
at Dash's option, up to four persons designated by Dash
(collectively the "Dash Designees"), including Marvin S. Wool and
Gregory J. Divis. The Company's obligation to appoint Dash
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Designees is subject to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder. Certain information, as required in
Rule 14f-1, is disclosed in the Information Statement attached as
Exhibit E, which is incorporated by this reference. A similar
information statement will be provided to Security Holders of
record within ten (10) days prior to the date any other Dash
designee takes office as a Director of the Company following the
transactions contemplated by the Offering.
Conditions to the Offer. Subject to limitations imposed by
applicable law, including Rule 14e-1(c) the Exchange Act, Dash
will not be required to accept the tender of, or to make payment
for, the Shares if any of the following events occur and as a
result, in the opinion of Dash, it is inadvisable to proceed with
the Offer or the consummation of the transactions contemplated
thereby. Dash may, but is not required to, waive any of the
conditions in whole or in part.
(A) Either (I) more than thirty percent (30%) of the Shares (on a
fully diluted basis) are not tendered prior to the expiration of
the Offer; or (II) any consent, registration, approval, permit or
authorization of any Governmental Entity applicable to the Offer
is not obtained on terms satisfactory to Dash in its reasonable
judgment.
(B) Any of the following events occurs or exists: (I) a general
suspension or limitation of trading or prices on the Nasdaq
SmallCap Market; (II) a declaration of a banking moratorium or
suspension of payments in respect of banks of the United States;
(III) a commencement or escalation of a war, armed hostilities or
other international or national calamity directly or indirectly
involving the United States other than the current hostilities in
Serbia and Kosovo; (IV) any limitation on the extension of credit
by banks or other lending institutions; (V) any material change in
United States or other currency exchange rates or a suspension of,
or limitation on, the markets therefor; or (VI) any extraordinary
or material adverse change in the market price of the Shares or in
the United States securities or financial markets generally,
including, without limitation, a decline of at least twenty
percent (20%) in either the Dow Jones Average of Industrial Stocks
or in the Standard & Poor's 500 Index occurring after the date of
the Stock Purchase Agreement. Dash also is under no obligation to
consummate the transaction contemplated by the Offer if any event
or condition listed in clauses (I) through (V) of this paragraph
(B) and existing on the date of the Stock Purchase Agreement shall
materially accelerate or worsen.
(C) Any of the following actions is threatened or instituted by or
before any governmental or regulatory authority, agency,
commission, court or other entity: (I) a challenge to the
acquisition by Dash of the Shares, or an action seeking to
restrain or prohibit the consummation of the transaction
contemplated by the Offer, seeking to obtain any material damages
or otherwise directly or indirectly relating to the transactions
contemplated by the Offer; (II) an action seeking to
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prohibit or materially limit Dash's ownership or operation of all
or any portion of its or the Company's business or assets, or to
compel Dash to dispose of or separately hold all or any portion of
Dash's or the Company's business or assets as a result of the
transactions contemplated by the Offer; (III) an action seeking to
enjoin, make illegal or delay the acceptance for payment, purchase
of, or payment for, some or all of the Shares or to delay or
restrict Dash's ability to accept or pay for the Shares; (IV) an
action seeking to limit Dash's ability effectively to acquire,
own, or exercise full rights of ownership of the Shares, including
without limitation the right to vote any Shares purchased by it on
an equal basis with all other Shares on matters properly presented
to the Security Holders; or (V) an action that, in Dash's
judgment, is reasonably likely to materially affect Dash's or the
Company's financial condition, properties, business or operations,
or the value of the Shares or the benefits Dash expects to derive
as a result of consummating the transactions contemplated by the
Offer.
(D) Any statute, rule or regulation is enacted or promulgated, or
any order or injunction is sought or entered, that prohibits
consummation of the Offer or the transactions contemplated by the
Stock Purchase Agreement, or any other action is taken, proposed
or threatened by any court, government agency or instrumentality
that, in Dash's opinion, would result in any of the effects
contemplated by paragraph (C), above.
(E) A tender or exchange offer for some portion or all of the
Shares is commenced or publicly proposed, or Dash learns that (I)
any person has become the beneficial owner of more than twenty
percent (20%) of any class or series of capital stock of the
Company (including the Shares) other than for bona fide arbitrage
purposes, or (II) any person enters into an agreement or proposes
a tender offer or exchange offer respecting some or all of the
Shares, (III) or any person proposes or enters into an agreement
contemplating a merger, consolidation or other business
combination involving the Company.
(F) Any change occurs or becomes likely to occur that is
reasonably likely to have a material adverse effect on the
Company's financial condition, properties, business or results of
operations as a whole.
(G) The Company's Board (I) amends, modifies or withdraws its
approval or recommendation of the Offer or the Stock Purchase
Agreement, (II) fails publicly to reconfirm its approval or
recommendation on request by Dash, (III) approves, endorses or
recommends any competing Acquisition Proposal, or (IV) enacts
resolutions to take any of the actions listed in clauses (I)
through (III) of this paragraph (G).
(H) The Stock Purchase Agreement is terminated or suspended by the
Company or Dash in accordance with its terms, or on the mutual
agreement of the parties.
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(i) The following conditions are not satisfied at or before
Closing: (I) the Company must have entered into employment
agreements (the "Employment Agreements") with Ronald L. Bogh
substantially similar to Exhibit F, and Paul M. Gilson
substantially similar to Exhibit G, and must have entered into a
non-competition agreement with Douglas C. Nelson substantially
similar to Exhibit H; (II) the Company must have received the
Fairness Opinion and it must not have been withdrawn; (III) the
Shares must continue to be listed on the Nasdaq SmallCap Market
following the Closing, without conditions Dash reasonably deems to
be materially adverse; and (III) Ronald L. Bogh, Douglas C. Nelson
and James V. Reimann must have agreed to tender certain
percentages of their Shares in accordance with the Shareholder
Agreements attached as Exhibits I, J, and K, respectively.
Acquisition Proposals. The Stock Purchase Agreement generally
requires that the Company and its affiliates terminate discussions
with other parties pertaining to any other business combination or
any merger, consolidation or similar transaction (including an
exchange of stock or assets) (each an "Acquisition Transaction").
The Stock Purchase Agreement also prohibits the Company from
encouraging, soliciting, participating in or initiating
discussions with any other entity relating to a proposed
Acquisition Transaction (such a proposal, an "Acquisition
Proposal"), with one exception. Specifically, the Company may
consider Acquisition Proposals if the Board determines in good
faith that a more favorable proposal (a "Superior Proposal")
requires Board deliberation in order to permit the Directors to
comply with their fiduciary duties.
In the event the Board determines a Superior Proposal is in the
best interest of the Security Holders and the Company, the Company
must notify Dash, after which Dash will have two business days in
which to make a competing proposal that is at least as favorable,
from a financial perspective, as the Superior Proposal. If Dash
makes no such proposal, the Board may terminate the Stock Purchase
Agreement and the Offer will be withdrawn; provided, if the
Company terminates the Stock Purchase Agreement under those
circumstances, it will be required to reimburse Dash within two
business days thereafter for its attorneys' fees and other fees
and expenses reasonably incurred in connection with the Stock
Purchase Agreement and the transactions contemplated thereby.
Termination; Effect of Termination. The Stock Purchase Agreement
may be terminated and the transactions contemplated thereby
abandoned:
(A) by mutual agreement of Dash and the Company;
(B) by either party if (I) Dash terminates the Offer without
purchasing any Shares; (II) any court or governmental
authority intervenes with a final order, decree or ruling to
terminate the Stock Purchase Agreement or the Offer; or
(III) the Closing has not occurred by June 30, 1999;
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(C) by Dash if (I) the Company breaches or fails to perform its
obligations under the Stock Purchase Agreement, unless the
breach or failure is cured within specified periods; (II)
the Board fails to reaffirm its prior approval or
recommendations, or the Board approves or recommends another
Acquisition Proposal; or (III) the Board undertakes to
consider a Superior Proposal based on its fiduciary
obligations and the advice of counsel;
(D) by the Company if (I) Dash fails to commence the Offer prior
to the fifth business day after the filing of this Schedule
14D-9, or if Dash fails to perform its obligations under the
Stock Purchase Agreement, unless the breach or failure is
cured within specified periods; or (II) the Board authorizes
the Company to enter into an agreement relating to a
Superior Proposal, unless, within two days after notice of
the Superior Proposal, Dash makes an offer that is at least
as favorable from a financial perspective as the Superior
Proposal, in which case the Company is required to reimburse
Dash for its expenses incurred in connection with the Offer.
(ii) Employment Agreements. In connection with the Stock Purchase
Agreement, Mr. Bogh and Mr. Gilson will execute the Employment
Agreements, giving these individuals an employment relationship
with the Company following the Offer and the transactions
contemplated by the Offer. The Employment Agreements represent a
potential conflict of interest for Messrs. Bogh and Gilson, who
will receive certain benefits under the Employment Agreements not
generally available to other Directors, affiliates or Security
Holders. Dash and the Company believe that the Employment
Agreements are necessary to provide certain experience to the
Company following the Offer and the transactions contemplated
thereby, including managerial and operational expertise essential
to the Company's continued operation as a separate entity.
Employment Agreement of Mr. Bogh. The Stock Purchase Agreement is
contingent on Mr. Bogh's execution of an employment agreement in
form and substance similar to Exhibit F that will provide for a
continuation of certain of his duties as President of the Company.
Dash has required that Mr. Bogh continue his employment with the
Company for a period of not less than three (3) years to ensure
continued quality management of the Company's operations and
administration and to afford the Company Mr. Bogh's expertise
during the transition of control. Mr. Bogh's employment agreement
provides for annual compensation during the first year of
$160,800, which represents a $13,800 (9.4%) increase in his
compensation over 1998. Compensation increases during the second
and third years by approximately $10,000 per year. Mr. Bogh also
will continue to receive the use of a company-owned vehicle,
health and life insurance benefits, and club dues. Mr. Bogh is
entitled to participate in the Company's "Base Return Plan," which
entitles Mr. Bogh to bonuses contingent on the Company's financial
performance. Mr. Bogh's employment agreement terminates
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at the end of its three (3) year term, unless terminated for cause
or renewed in accordance with its terms. After termination for any
reason other than cause, Mr. Bogh is entitled to certain
compensation under a non-competition agreement that commences upon
termination. See Exhibit F.
As a result of his employment agreement, Mr. Bogh may have a
conflict of interest arising out of the Offer. The Offer was
approved by all of the disinterested directors, as required under
Oregon law.
Employment Agreement of Mr. Gilson. The Stock Purchase Agreement
is contingent on Mr. Gilson's execution of an employment agreement
in form and substance similar to Exhibit G that will provide for a
continuation of certain of his duties as Senior Vice President and
Chief Operating Officer of the Company. Dash has required that Mr.
Gilson continue his employment with the Company for a period of
not less than four (4) years to ensure continued quality
management of the Company's operations and administration and to
afford the Company Mr. Gilson's expertise during the transition of
control. Mr. Gilson's employment agreement provides for annual
compensation during the first year of $114,000, which represents a
$12,000 (10.5%) increase in his compensation over 1998. Compensation
increases during the second, third and fourth years by $6,000 per year.
Mr. Gilson also will continue to receive the use of a company-owned
vehicle, health and life insurance benefits, and club dues. Mr. Gilson
is entitled to participate in the Company's "Base Return Plan," which
entitles Mr. Gilson to bonuses contingent on the Company's financial
performance. Mr. Gilson's employment agreement terminates at the end
of its four (4) year term, unless terminated earlier for cause or
renewed in accordance with its terms
Confidentiality and Non-Compete Agreement. (A) The Confidentiality
and Non-Compete Agreement (the "Non-Compete") provides that for
the maximum term allowed under law, Mr. Nelson shall hold in
strictest confidence and, without the prior written authorization
of the Chairman and Chief Executive Officer of the Company, shall
not disclose to any person or entity, any confidential or
proprietary information relating to the Company's or Dash's, or
either of their subsidiaries (each, a "Protected Entity" and
collectively, the "Protected Entities") business or trade secrets
that is not a matter of public knowledge. Information protected
under the Non-Compete includes, without limitation, information
relating to (1) any designs, plans, computer hardware and
software, data and know-how; (2) financial information of any
kind; (3) customer lists and related information; (4) advertising
and marketing information; (5) pending or completed acquisitions;
(6) business practices or procedures, including personnel matters,
notes and memoranda (and including notes and memoranda prepared by
Mr. Nelson in his relationship with the Protected Entities); and
(7) any other information designated by the Protected Entities as
confidential or proprietary.
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(B) For a period of four years beginning April 8, 1999, Mr.
Nelson also shall promptly and fully disclose to the Protected
Entities in writing any works and property, including intellectual
property and confidential, proprietary and trade secret
information, inventions, discoveries and improvements that are
conceived, made or developed by Mr. Nelson in any manner. Mr.
Nelson also shall make and maintain written records of all such
developments and to give prior notice to the Protected Entities in
writing of any disclosure or performance of any such work or
property. Mr. Nelson acknowledges that such works are "works made
for hire" within the meaning of Sections 101 and 201 of the
Copyright Act, and that such works belong to the Protected
Entities in perpetuity.
(C) For a period of five years beginning April 8, 1999, Mr.
Nelson shall not directly or indirectly engage in any activity or
business competitive with the Protected Entities, other than
ownership of stock in a publicly traded company that does not
exceed two percent (2%) of the outstanding stock of that company.
Mr. Nelson also shall notify the Protected Entities of any attempt
by any person or organization to involve him in a competing
business, and shall not induce or assist others to induce an
employee of the Protected Entities to terminate their employment
for the purpose of competing. Mr. Nelson shall refrain from
diverting or attempting to divert current, former or prospective
customers, or inducing any such customer to modify or not renew
their business relationship with the Company.
(D) In exchange for Mr. Nelson's obligations under the Non-
Compete, the Protected Entities have entered into a Letter of
Agreement with Mr. Nelson under which the Company shall continue,
for a maximum of four years beginning on April 8, 1999, to
reimburse Mr. Nelson for the cost of COBRA medical insurance, and
for the cost of a personal medical insurance plan (not to exceed
$1,350 per month), for the continuation of four life insurance
policies. Payments pursuant to the Letter of Agreement shall be
subject to applicable federal, state and local withholding taxes.
(iii) Shareholder Agreements. The Shareholder Agreements provide that
each of Messrs. Bogh, Nelson and Reimann will tender to Dash a
specified portion of the Shares controlled by each of them, as
follows: (A) Mr. Bogh, 481,040 Shares amounting to approximately
80% of the Shares controlled by him or, at the request of Dash in
the event fewer than 1,567,417 Shares are tendered, up to 601,300
Shares, constituting all of the shares controlled by him; (B) Mr.
Nelson, 407,000 Shares amounting to 100% of the Shares controlled
by him; and (C) Mr. Reimann, 47,500 Shares amounting to 100% of
the Shares controlled by him. The price to be paid by Dash would
be equal to the Offering Price. In connection with the Shareholder
Agreement, each individual must represent and warrant to Dash that
he is the beneficial owner of the Shares being tendered; that he
has the capacity to enter into the agreement; that the agreement
is validly executed and delivered; that his execution of the
Shareholder Agreement does not violate any
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other agreement that binds the individual; and that there are no
liens or encumbrances against the Shares being tendered. Each of
the shareholders who will deliver a Shareholder Agreement is
required to notify Dash if the Company receives any Acquisition
Proposal (as defined in the Stock Purchase Agreement) and, if so,
of the status of such an Acquisition Proposal.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) Recommendation of the Company's Board.
At a meeting duly called and held on April 8, 1999, the Board
unanimously determined that the Stock Purchase Agreement and the
transactions contemplated thereby, including the Offer, are fair
to, and in the best interest of, the Security Holders and the
Company. The Board then voted to approve the Stock Purchase
Agreement and the Offer, the Employment Agreements, the Non-
Competition Agreement and the Shareholder Agreements, and to
recommend to the Security Holders the approval of those agreements
and the transactions contemplated thereby.
SUBJECT TO THE FOREGOING, THE BOARD UNANIMOUSLY RECOMMENDS THAT
THE SECURITY HOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES TO
DASH UNDER THE OFFER. See "Reasons for the Recommendation --
Background" under Item 4(b) for a discussion of the factors
considered by the Board in making its recommendations.
As set forth in the Offer, upon the terms and subject to the
conditions of the Offer (including satisfaction of the Minimum
Condition), Dash will accept for payment and will pay the Offer
Price for all Shares validly tendered on or prior to the initial
expiration date of the Offer and not properly withdrawn. Security
Holders considering not tendering their Shares should note that
Dash is not obligated to purchase any Shares, and can terminate
the Offer, if the Minimum Condition is not satisfied or if any
other condition to the Offer is not met. If more than 1,567,417 Shares
are tendered, Dash will purchase a pro rata amount from each
tendering shareholder.
(b) Reasons for the Recommendation.
Background. Dash became familiar with the Company over
approximately the past two years as a result of an existing sales
relationship. Dash supplies adhesive, a principal raw material
used as a bonding agent for the Company's rubber products. In
1996, 1997 and 1998, Dash had sales to the Company of $0,
approximately $120,000 and approximately $800,000, respectively.
During the summer of 1998, an employee of the Company contacted
the general manager of MarChem Pacific, Inc., a Dash subsidiary,
who asked whether Dash would be interested in participating in a
buyout of the Company. MarChem Pacific, Inc. reported the inquiry
to Dash's executive management, who indicated an interest in
discussing such a transaction with the Company's Board of
Directors and principal stockholders. Subsequently, the Company
informed Dash that the individual who had initiated the contact on
behalf of the Company had not been authorized to do so.
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These communications, however, led to an introduction of Ron Bogh,
the Company's Chief Executive Officer, and Marvin S. Wool, Dash's
Chief Executive Officer.
Initial contacts did not directly result in negotiations regarding
a strategic alliance between the Company and Dash. However, Dash
began to follow the Company's business as described in its
periodic SEC filings and news releases and, after considering that
information, Mr. Wool contacted Mr. Bogh in mid-November 1998 and
suggested that they meet to discuss whether the parties had a
mutual interest in a strategic transaction. On November 20, 1998,
after entering into a confidentiality agreement, Mr. Wool and
other members of Dash's senior management, including Michael
Deering, Paul Simons and Greg Divis met in McMinnville, Oregon
with Mr. Bogh, counsel for the Company, and an accountant from a
local office of a large accounting firm. At that meeting, the
parties discussed their respective businesses and Dash reviewed
its historical approach to acquisitions. Mr. Wool also advised Mr.
Bogh that Dash's preliminary valuation of the Common Stock for a
transaction of this type was $2.00 to $2.25 per Share.
At a regular meeting of the Board on November 23, 1998, Mr. Bogh
reported on the preliminary discussions. At that point, the Board
determined that it would not support a transaction at the
suggested valuation range. The Board did not believe the price
would be adequate under the circumstances because the two largest
shareholders, Messrs. Bogh and Nelson, would not be willing to
sell at that price. The Board advised Mr. Bogh and Mr. Nelson that
the Board would entertain a revised offer only if it were
acceptable to Messrs. Bogh and Nelson. Mr. Bogh communicated the
Board's discussion to Mr. Wool by telephone the next day.
Following the Board's decision, in a subsequent telephone
conversation on December 1, 1998, Mr. Wool and Mr. Bogh discussed
a proposal in which Dash would pay between $2.75 and $3.00 per
share in a tender offer for 80% of the Shares, while purchasing
all Shares owned by Security Holders owning 1,000 or fewer Shares.
From time to time during the remainder of December 1998 and
January 1999, Messrs. Wool and Bogh discussed various terms of a
possible transaction, including arrangements for employment
agreements with Messrs. Bogh, Nelson and Gilson.
On February 7 and 8, 1999, at Mr. Wool's request, Mr. Bogh met in
St. Louis with Mr. Wool and other Dash representatives and
discussed a proposed purchase price of $3.00 per share and more
detailed terms of possible employment agreements with the
Company's executives which would be applicable if Dash effected
the transaction, including the term, salary, bonus, equity
participation and insurance and other benefits. Following that
meeting, Mr. Bogh communicated with Mr. Wool and Michael Deering,
Dash's Director of Human Resources, to resolve issues connected
with the employment agreements. At this point, Mr. Bogh decided to
present the revised proposal to the Board.
At the regularly scheduled Board meeting on February 16, 1999, the
directors considered Dash's revised proposal and price structure.
The Board generally favored a transaction on
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that valuation, subject to agreement on specific details of the
transaction, and authorized Mr. Bogh to communicate this fact to
Dash. During a break in the meeting, Mr. Bogh and the Company's
counsel telephoned Mr. Wool and advised him of the Board's
reaction and suggested that if Dash wished to pursue a transaction
he should submit a written proposal.
On February 22, 1999, Dash submitted a written proposal to the
Board for a tender offer to purchase seventy percent (70%) of the
Shares at $3.00 per Share, with Dash designees to comprise a
majority of the Company's Board of Directors following the
closing. The proposal also included terms of employment agreements
for Messrs. Bogh, Nelson and Gilson. Dash's proposal was
conditioned on certain events, including a requirement that the
Board would obtain an opinion from an qualified independent
financial advisor that the transaction is fair to the Security
Holders from a financial perspective, and a requirement that the
Shares would continue to be listed on the Nasdaq SmallCap Market
after closing.
The next day, Mr. Bogh and the Company's counsel conveyed to Dash
and its counsel the Company's comments on the proposal, based on
the review of Mr. Bogh and the Company's counsel, and discussed
Messrs. Bogh, Gilson and Nelson's comments on the proposed
employment agreement terms. Negotiations over Dash's proposed
employment terms for the Company's executives were conducted over
the next several days in telephonic discussions among Mr. Wool,
Mr. Bogh, Mr. Gilson, counsel to the Company and counsel to Dash.
Following a resolution of those terms, Mr. Bogh telephoned Mr.
Wool and indicated a willingness to proceed.
On March 3, 1999, representatives of Dash, including its attorneys
and accountants, met with the Board in McMinnville. At that
meeting the parties reviewed Dash's proposed letter of intent and
discussed certain changes to that proposal. A revised draft of
Dash's letter of intent was circulated to the Board on March 9,
1999 to reflect the agreed changes and, after a telephonic meeting
of the Board, at which the Board approved the revised letter of
intent and authorized Mr. Bogh to execute it on behalf of the
Company. Thereupon, Mr. Bogh executed the letter of intent on
behalf of the Company. Representatives of Dash's management
performed on-site due diligence at the Company's facilities on
March 12, 13 and 14, 1999.
A draft of the definitive Stock Purchase Agreement was submitted
to the Company on March 10, 1999. The draft implemented the terms
set forth in the letter of intent, as well as certain
representations, warranties, covenants and closing conditions. In
the draft, Dash also proposed that, if fewer than seventy percent
(70%) of the outstanding Shares were tendered pursuant to the
Offer, the Company would agree to issue to Dash, at a price of
$2.00 per share, that number of Shares that would result in Dash
owning seventy percent (70%) of the outstanding Shares. After
considering that provision, the Board declined to proceed unless
the price for all Shares to be purchased in the Offering was
$3.00. Dash discussed, but did not offer, an alternative in the
form of a cash merger offer in which Dash would purchase all of
the Shares for $3.00 per Share. During subsequent
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negotiations, however, the parties agreed that if fewer than
seventy percent (70%) of the Shares were tendered, Dash could
elect (i) to terminate the Offer, or (ii) to cause the Company to
issue to Dash, at a price of $3.00 per share, a number of
additional Shares that would result in Dash owning seventy percent
(70%) of the outstanding shares.
At a special meeting of the Company's Board of Directors held on
April 8, 1999, Pacific Crest rendered its opinion that the Stock
Purchase Agreement was fair to the Security Holders from a
financial perspective. After reviewing the form and terms of the
Stock Purchase Agreement and the related agreements and
transactions, the Board unanimously approved the Stock Purchase
Agreement, the Offer, and transactions contemplated thereby.
Promptly thereafter, the parties executed and delivered the
Agreement. Thereupon, the Company issued a press release to
announce the transaction publicly.
Factors Considered by the Board. In approving the Offer and
recommending that the Security Holders tender their Shares
pursuant to the Offer, the Board considered a number of factors,
including:
(i) the financial condition, results of operations, business and
prospects of the Company, including the competitive position
of the Company, the need to expand operations and the
attendant capital requirements, the values placed by the
market on comparable companies, uncertainty, due in part to
the Company's recent performance and fluctuations in its
share price, and the prospects of the Company if it were to
remain independent, and the technical, marketing and
financial assistance available from Dash;
(ii) the fact that the Stock Purchase Agreement provides for up
to $3,000,000 of additional subordinated debt financing to
fund growth of the Company's business following the Closing,
and may afford the Company with opportunities to refinance
its existing debt on more favorable terms that do not appear
to be available to the Company from other sources;
(iii) the relationship between the Offer Price and the current and
historical market prices for the Shares, including the fact
that the consideration to be received by the Security
Holders who tender their Shares in response to the Offer
represents a premium, based on closing prices for the Shares
on March 9, April 1 and April 8, 1999 (approximately one
month, one week and one day, respectively, prior to the
public announcement by the Company that it was engaged in
discussions relating to the Offer) of approximately 41.2%,
20.0% and 41.2%, respectively;
(iv) the Board's belief that the process undertaken by the
Company in obtaining proposals for acquisition of part or
all of the Shares was comprehensive and that, after
consulting with Pacific Crest Securities, the Company had
received the best and final offer from interested parties.
The Board took note of the fact that the Stock Purchase
Agreement requires that the Company and its affiliates
terminate discussions with other parties pertaining to
Acquisition Transactions, and
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prohibits the Company from encouraging, soliciting,
participating in or initiating discussions with any other
entity relating to an Acquisition Proposal. The Board
further noted, however, that the Stock Purchase Agreement
permits the Company to consider Superior Proposals within
the criteria described in Stock Purchase Agreement:
Competing Proposals, above;
(v) the Board's recognition that, under the terms of the Stock
Purchase Agreement, Messrs. Bogh and Gilson would receive
employment agreements with the Company and that Mr. Bogh
would remain as a Director following the series of
transactions contemplated by the Offer, and that Mr. Bogh
thus had a potential conflict of interest in voting to
approve and recommend those transactions;
(vi) the structure of the transaction, including the belief of a
majority of the Board that the Offer represents an
attractive opportunity for the Security Holders promptly to
receive fair value in cash for their investment in the
Company;
(vii) the terms and conditions of the Offer, the Stock Purchase
Agreement and the remaining Purchase Documents;
(viii) the fact that the Offer is not subject to a financing
condition; and
(ix) the written opinion of Pacific Crest Securities dated April
8, 1999 to the effect that as of that date, and based upon
and subject to certain matters stated in the Fairness
Opinion, the cash consideration to be received by the
Security Holders in the Offer, taken together, was fair to
those Security Holders from a financial point of view. The
full text of the Fairness Opinion, which sets forth the
assumptions made, matters considered and limitations on the
review undertaken by Pacific Crest, is attached hereto as
Exhibit D and is incorporated by reference. Pacific Crest's
opinion is directed only to the fairness of the Offer from a
financial perspective, and does not constitute a
recommendation as to whether any Security Holder should
tender Shares pursuant to the Offer. SECURITY HOLDERS ARE
URGED TO READ THE FAIRNESS OPINION IN ITS ENTIRETY.
The foregoing is not an exhaustive discussion of the background of the
proposed transactions and the information and factors the Board
considered in recommending that the Security Holders tender their Shares
in the Offering. In view of the wide variety of factors the Board
considered in connection with its evaluation of the Offer, the Board did
not find it practicable to quantify or otherwise attempt to assign
relative weights to the specific factors considered in reaching its
determinations. In addition, individual Directors may have given
different weights to different factors.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The Company has retained Pacific Crest as the Financial Advisor.
Pursuant to the terms of Pacific Crest's engagement, the Company has
agreed to pay Pacific Crest fifty thousand dollars ($50,000) for its
services, to be paid as follows: (i) fifteen thousand dollars ($15,000)
to be paid
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at execution of the engagement letter; (ii) fifteen thousand dollars
($15,000) to be paid upon delivery of the Fairness Opinion; and (iii)
twenty thousand dollars ($20,000) to be paid at, and contingent upon,
Closing. In the ordinary course of its business, Pacific Crest may
purchase, hold or trade Shares for its own account and for the accounts
of one or more of its customers and, accordingly, may at any time or
from time to time hold a long or short position in such securities.
Neither the Company nor any person acting on its behalf intends to
employ, retain or compensate any person to make solicitations or
recommendations to the Security Holders or the Company in connection
with the Offer.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) Within the past sixty (60) days, the Company has not, and to the
Company's knowledge no executive officer, director or affiliate of
the Company has, engaged in any transactions involving the Shares,
except that Mr. Nelson sold 4,000 shares on March 9, 1999 at a
price of $2.00 per share in a transaction effected pursuant to
Rule 144 promulgated uder the Securities Act of 1933 (the
"Securities Act").
(b) Messrs. Bogh, Nelson and Reimann have agreed to tender, in the
aggregate, 935,540 of their Shares in accordance with the terms of
the Shareholder Agreements attached as Exhibits I, J, and K as
described more fully in Item 3(iv). The Shareholder Agreements and
the information contained therein represent the extent of the
Company's knowledge regarding the acquisition or disposition of
Shares by the Company's executive officers, directors and
affiliates.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY SUBJECT COMPANY.
(a) Except as described in this Schedule 14D-9, no negotiation is
being taken or is underway by the Company in response to the Offer
that relates to or would result in (1) any extraordinary
transaction such as a merger or reorganization; (2) a purchase,
sale or transfer of a material amount of assets by the Company or
the Subsidiary; (3) any tender offer for, or other acquisition of,
securities by or of the Company; or (4) any material change in the
present capitalization or dividend policy of the Company.
(b) Except as described in Item 3(b) of this Schedule 14D-9, there are
no transactions, Board resolutions, agreements in principle, or
signed agreements in response to the Offer that relate to or would
result in any one or more of the events described in Item 7(a).
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
(a) The information statement attached as Exhibit E is being furnished
in connection with the possible designation by Dash of certain
persons to serve on the Board following the transactions
contemplated by the Stock Purchase Agreement and the Offer. If
appointed, these individuals may be appointed other than at a
meeting of the Security Holders.
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ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit Item
A Form of Offer to Purchase dated April 14, 1999 (filed as
Exhibit (a)(1) to the Schedule 14D-1 of Dash Multi-Corp.,
Inc. on April 14, 1999 and incorporated herein by
reference).
B Letter of Transmittal dated April 14, 1999 (filed as Exhibit
(a)(2) to the Schedule 14D-1 of Dash Multi-Corp., Inc. on
April 14, 1999 and incorporated herein by reference).
C Stock Purchase Agreement dated April 8, 1999 between the
Company and Dash.
D Opinion of Pacific Crest Securities, Inc., dated April 8,
1999.
E Information Statement of the Company dated April 19, 1999,
issued pursuant to Section 14(f) of the Securities Act and
Rule 14f-1 promulgated thereunder.
F Form of Employment Agreement between the Company and Mr. Bogh
dated April 8, 1999.
G Form of Employment Agreement between the Company and Mr. Gilson
dated April 8, 1999.
H Non-Competition Agreement between the Company and Mr. Nelson
dated April 8, 1999.
I Shareholder Agreement between Dash and Mr. Bogh dated April
8, 1999.
J Shareholder Agreement between Dash and Mr. Nelson dated
April 8, 1999.
K Shareholder Agreement between Dash and Mr. Reimann dated
April 8, 1999.
L Joint Press Release by Dash and the Company dated April 9,
1999 (filed as Exhibit 1.1 to the Form 8-K of the Company on
April 14, 1999 and incorporated herein by reference).
M Form of Summary Advertisement placed in the Portland
Oregonian, April 14, 1999 (filed as Exhibit (a)(7) to the
Schedule 14D-1 of Dash Multi-Corp., Inc. on April 14, 1999
and incorporated herein by reference).
[SIGNATURE PAGE FOLLOWS]
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true,
complete and correct.
R-B RUBBER PRODUCTS, INC.
/s/ Ronald L. Bogh
-------------------------------------
Ronald L. Bogh
President, Chief Executive Officer
and Chairman of the Board
Dated: April 13, 1999
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EXHIBIT C
STOCK PURCHASE AGREEMENT
(ATTACHED)
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is entered into
as of April 8, 1999, between Dash Multi-Corp, Inc., a Missouri
corporation ("Purchaser"), and R-B Rubber Products, Inc., an Oregon
corporation (the "Company").
RECITALS
WHEREAS, the respective Boards of Directors of Purchaser and the
Company have approved the acquisition of majority ownership of the
Company by Purchaser on the terms and conditions set forth herein;
WHEREAS, it is intended that such acquisition be accomplished by
Purchaser's effecting a cash tender offer (the "Offer") to purchase 70%
of the issued and outstanding shares of common stock, no par value, of
the Company (the "Shares"); and
WHEREAS, the Company and Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with
this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements
contained herein, the parties hereto hereby agree as follows:
ARTICLE I
THE TENDER OFFER
1.1 Tender Offer. (a) Provided that this Agreement shall not
have been terminated in accordance with Article VII hereof and none of
the events set forth in Annex A hereto shall have occurred or be
existing, as promptly as practicable (but in no event later than five
business days following the public announcement of the execution
hereof), Purchaser shall commence a tender offer (within the meaning of
Rule 14d-2 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (the "Offer") for the Shares at a price of $3.00 per
Share, net to the seller in cash (as such Offer may be amended in
accordance with the terms of this Agreement) (the "Offer Price"),
subject to the terms and conditions set forth in Annex A hereto (the
"Offer Conditions"). The initial expiration date of the Offer shall be
the date 20 business days from and including the date (the "Commencement
Date") the Offer Documents (as hereinafter defined) are first filed with
the Securities and Exchange Commission (the "SEC"). Purchaser expressly
reserves the right, in its sole discretion, to waive any condition and
to set forth or change any other term and condition of the Offer,
provided that, unless previously approved by the Company in writing, no
provision may be set forth or changed which decreases the price per
Share payable in the Offer, changes the form of consideration payable in
the Offer (other than by adding consideration), or imposes conditions to
the Offer in addition to those set forth herein that are materially
adverse to holders of the Shares. Purchaser covenants and agrees that,
subject to the terms and conditions of the Offer, including but not
limited to the Offer Conditions, it will accept for payment and pay for
Shares as soon as it is permitted to do so under applicable law,
provided that Purchaser shall have the right, in its sole discretion, to
extend the Offer from time to time notwithstanding the prior
satisfaction of the Offer Conditions. Notwithstanding the foregoing,
Purchaser shall extend the Offer at any time up to June 15, 1999 for one
or more periods of not more than 10 business days, or, if longer, for
any period required by any rule, regulation, interpretation or position
of the Securities and Exchange Commission (the "SEC") or the staff
thereof applicable to the Offer, if at the initial expiration date of
the Offer, or any extension thereof, any condition to the Offer (other
than the Minimum Condition) is not satisfied or waived. In addition,
the Offer Price may be increased and the Offer may be extended to the
extent required by law in connection with such increase in each case
without the consent of the Company. It is agreed that the terms and
conditions set forth in the Offer, including but not limited to the
Offer Conditions, are for the benefit of Purchaser and may be asserted
by Purchaser regardless of the circumstances giving rise to any such
condition.
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(b) The Company hereby approves of and consents to the Offer and
represents and warrants that: (i) its Board of Directors, at a meeting
duly called and held on April 8, 1999, has unanimously (A) determined
that this Agreement and the transactions contemplated hereby, including
the Offer, are fair to and in the best interests of the holders of
Shares, (B) approved this Agreement and the transactions contemplated
hereby, including the Offer, and (C) resolved to recommend that the
stockholders of the Company accept the Offer, tender their Shares to
Purchaser thereunder and approve this Agreement and the transactions
contemplated hereby; and (ii) Pacific Crest Securities (the "Financial
Advisor") has delivered to the Board of Directors of the Company its
opinion that the consideration to be received by holders of Shares,
other than Purchaser, pursuant to the Offer is fair to such holders and
the Company from a financial point of view. The Company has been
authorized by the Financial Advisor to permit, subject to prior review
and consent by such Financial Advisor (such consent not to be
unreasonably withheld), the inclusion of such fairness opinion (or a
reference thereto) in a Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9") to be filed with the SEC upon
commencement of the Offer. The Company hereby consents to the inclusion
in the Offer Documents (as defined in Section 1.1(c)) of the
recommendations of the Board of Directors of the Company described
herein.
(c) As soon as reasonably practicable on the date the Offer is
commenced, Purchaser shall file with the SEC a Tender Offer Statement on
Schedule 14D-1 with respect to the Offer (together with all amendments
and supplements thereto and including the exhibits thereto, the
"Schedule 14D-1"). The Schedule 14D-1 will include, as exhibits, the
Offer to Purchase and a form of letter of transmittal and summary
advertisement (collectively, together with any amendments and
supplements thereto, the "Offer Documents"). The Offer Documents will
comply in all material respects with the provisions of applicable
federal securities laws and, on the date filed with the SEC and on the
date first published, sent or given to the Company's stockholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. Notwithstanding the foregoing, no
representation is made by Purchaser with respect to information supplied
by the Company for inclusion in the Offer Documents. Purchaser further
agrees to use commercially reasonable efforts to cause the Offer
Documents to be filed with the SEC and to be disseminated to holders of
Shares, in each case as and to the extent required by applicable federal
securities laws. Purchaser, on the one hand, and the Company, on the
other hand, agrees promptly to correct any information provided by it
for use in the Offer Documents if and to the extent that it shall have
become false and misleading in any material respect and Purchaser
further agrees to use commercially reasonable efforts to cause the Offer
Documents as so corrected to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. The Company and its
counsel shall be given the opportunity to review the initial Schedule
14D-1 before it is filed with the SEC. In addition, Purchaser agrees to
provide the Company and its counsel copies of any written comments or
other communications that Purchaser or its counsel may receive from time
to time from the SEC or its staff with respect to the Offer Documents
promptly after the receipt of such comments or other communications.
(d) Concurrently with the commencement of the Offer, the Company
shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments and supplements thereto and
including the exhibits thereto, the "Schedule 14D-9") which shall
contain the recommendation referred to in clause (i)(C) of Section
1.1(b) hereof; provided, however, that in the event of a Superior
Proposal (as defined in Section 5.2) prior to such filing, the Company
shall not be required to make such filing with such recommendations if a
majority of the Company's Board of Directors determines in good faith,
after receiving written advice from its Financial Advisor and outside
counsel, that making such filing would constitute a breach of the
fiduciary duties of the Company's Board of Directors under applicable
law. The Schedule 14D-9 will comply in all material respects with the
provisions of applicable federal securities laws and, on the date filed
with the SEC and on the date first published, sent or given to the
Company's stockholders, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, no representation is made by the Company
with respect to information supplied by Purchaser in writing for
inclusion in the Schedule 14D-9. The Company further agrees to use
commercially reasonable efforts to cause the Schedule 14D-9 to be filed
with the SEC and to be disseminated to holders of Shares, in each case
as and to the extent required by applicable federal securities laws.
The Company, on the one hand, and Purchaser, on the other hand,
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agrees promptly to correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that it shall have become false and
misleading in any material respect and the Company further agrees to use
commercially reasonable efforts to cause the Schedule 14D-9 as so
corrected to be filed with the SEC and to be disseminated to holders of
the Shares, in each case as and to the extent required by applicable
federal securities laws. Purchaser and its counsel shall be given the
opportunity to review the initial Schedule 14D-9 before it is filed with
the SEC. In addition, the Company agrees to provide Purchaser and its
counsel copies of any written comments or other communications that the
Company or its counsel may receive from time to time from the SEC or its
staff with respect to the Schedule 14D-9 promptly after the receipt of
such comments or other communications.
(e) In connection with the Offer, the Company will promptly
furnish or cause to be furnished to Purchaser mailing labels, security
position listings and any available listing or computer file containing
the names and addresses of the record holders of the Shares as of the
most recent practicable date, and shall furnish Purchaser with such
information and assistance as Purchaser or its agents may reasonably
request in communicating the Offer to the stockholders of the Company.
Except for such steps as are necessary to disseminate the Offer
Documents, Purchaser shall hold in confidence the information contained
in any of such labels and lists and the additional information referred
to in the preceding sentence, will use such information only in
connection with the Offer, and, if this Agreement is terminated, will
upon request of the Company, deliver or cause to be delivered to the
Company all copies of such information then in its possession or the
possession of its agents or representatives.
(f) If immediately prior to the expiration of the Offer, as
extended pursuant to Section 1.1(a) above, less than 70% of the
outstanding Shares have been tendered pursuant to the Offer, at
Purchaser's sole option, the Company shall, concurrently with such
expiration, issue to Purchaser at a purchase price equal to the greater
of $3.00 or the most recent price offered by Purchaser per Share in cash
an amount of Shares designated by Purchaser in its sole discretion up to
a maximum of that number of Shares necessary to make the aggregate
number of Shares purchased by Purchaser pursuant to the Offer plus the
number of Shares issued pursuant to this Section 1.1(f) equal to 70% of
the outstanding Shares, after taking into account such newly issued
Shares.
ARTICLE II
CLOSING; CLOSING DATE
The closing of the purchase of Shares pursuant to the Offer (the
"Closing") shall take place at the offices of Thompson Coburn, One
Mercantile Center, St. Louis, Missouri 63101 at 10:00 a.m. (i) on the
first business day on which the last to be fulfilled or waived of the
conditions set forth in Article VI hereof shall be fulfilled or waived
in accordance with this Agreement or (ii) on such other date as the
Company and Purchaser may agree (the "Closing Date").
ARTICLE III
DIRECTORS
OF THE COMPANY
At the Closing and subject to compliance with applicable law, the
Company will use its best efforts to cause the Company's Board of
Directors to consist of Ronald L. Bogh, Paul M. Gilson and, at
Purchaser's option, up to four additional persons designated by
Purchaser, two of whom shall be Marvin S. Wool and Gregory J. Divis. In
furtherance thereof, the Company will increase the size of the Board of
Directors of the Company, or use its reasonable efforts to secure the
resignation of directors, or both, as is necessary to permit Purchaser's
designees to be elected to the Board of Directors of the Company. At
such time, the Company, if so requested, will use its reasonable efforts
to cause persons designated by Purchaser to constitute the same
proportionate representation of each committee of the Board of Directors
of the Company, each board of directors of each subsidiary of the
Company and each committee of each such board (in each case to the
extent of the Company's ability to elect such
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persons). The Company's obligations to appoint designees to the Board
of Directors of the Company shall be subject to Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder. The Company shall
promptly take all actions required pursuant to such Section and Rule in
order to fulfill its obligations under this Article III and shall
include in the Schedule 14D-9, or in a separate Rule 14f-1 information
statement provided to stockholders, such information with respect to the
Company and its officers and directors as is required under Section
14(f) and Rule 14f-1 to fulfill its obligations under this Article III.
Purchaser will supply to the Company and will be solely responsible for
any information with respect to Purchaser and its nominees, officers,
directors and affiliates required by Section 14(f) and Rule 14f-1.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Company. Subject to
the information set forth in Schedule IV (the "Disclosure Schedule")
and/or the Company Reports (as defined below in Section 4.1(f)), the
Company hereby represents and warrants to Purchaser that:
(a) Corporate Organization and Qualification. Each of the
Company and the Subsidiary (as hereinafter defined) is a corporation
duly organized and validly existing under the laws of its respective
jurisdiction of incorporation and is in good standing as a foreign
corporation in each jurisdiction where the properties owned, leased or
operated, or the business conducted, by it require such qualification,
except for such failure to so qualify or be in such good standing,
which, when taken together with all other such failures, is not
reasonably likely to have a material adverse effect on the financial
condition, properties, business or results of operations of the Company
and its subsidiaries taken as a whole. Each of the Company and the
Subsidiary has the requisite corporate power and authority to carry on
its respective businesses as they are now being conducted. The Company
has made available to Purchaser a complete and correct copy of the
Company's Articles of Incorporation (the "Company Articles") and the
Company's By-Laws (the "Company By-Laws"), each as amended to date. The
Company Articles and Company By-Laws so delivered are in full force and
effect. Except for RB Recycling, Inc., an Oregon corporation (the
"Subsidiary"), the Company has no subsidiaries (as defined in Rule
1.02(v) of Regulation S-X promulgated pursuant to the Exchange Act) and
owns no equity security of, investment in or loan or advance to any
business enterprise or person or any agreement or commitment for such
(other than trade terms extended to customers in the ordinary course of
business or employee salary or business expense advances made in the
ordinary course of business). Neither the Company nor the Subsidiary is
subject to any arrangement that could be treated as a partnership for
federal income tax purposes.
(b) Authorized Capital. The authorized capital stock of the
Company consists of 20,000,000 Shares, of which 2,239,167 Shares were
outstanding on April 8, 1999. All of the outstanding Shares have been
duly authorized and are validly issued, fully paid and nonassessable.
The Company has no shares reserved for issuance, except that, as of
April 8, 1999, there were an aggregate of 162,500 shares reserved for
issuance under outstanding stock options pursuant to the 1995 Stock
Option Plan (the "Stock Plan"), and an aggregate of 95,000 shares
reserved for issuance pursuant to a warrant issued to Paulson Investment
Company, Inc. The Disclosure Schedule contains a true and complete list
of each holder of an option granted under the Stock Plan, the date of
grant of such option, the number of shares subject to the option, the
exercise price of a share subject to such option, the vesting schedule
applicable to such option and the expiration date of such option. Each
of the outstanding shares of capital stock of the Subsidiary is duly
authorized, validly issued, fully paid and nonassessable and owned,
either directly or indirectly, by the Company free and clear of all
liens, pledges, security interests, claims or other encumbrances.
Except as set forth above, there are no shares of capital stock of the
Company authorized, issued or outstanding and, except as set forth
above, there are no pre-emptive rights nor any outstanding
subscriptions, options, warrants, rights, convertible securities or
other agreements or commitments of any character relating to the issued
or unissued capital stock or other securities of the Company or the
Subsidiary. Immediately prior to the Closing, the Company will have no
obligation to issue, transfer or sell any Shares or common stock of the
Company pursuant to any Benefit Plan (as defined in Section 5.1(d)).
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(c) Corporate Records. The corporate record books (including
the stock records) of the Company have been made available to Purchaser
and are complete, accurate and up to date in all material respects with
all necessary signatures and set forth all meetings and actions taken by
the shareholders and directors of the Company as required by law or the
Company By-Laws and all transactions involving the Shares.
(d) Authorization. The Company has the requisite corporate power
and authority and has taken all corporate action necessary in order to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. This Agreement is a valid and binding agreement of
the Company enforceable against the Company in accordance with its
terms, assuming the due authorization, execution and delivery hereof by
Purchaser.
(e) Absence of Violations or Conflicts. (i) Other than as
required under the Exchange Act (the "Regulatory Filings"), no notices,
reports or other filings are required to be made by the Company with,
nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by the Company from, any
governmental or regulatory authority, agency, commission, court or other
entity, domestic or foreign ("Governmental Entity"), in connection with
the execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby, the
failure to make or obtain any or all of which is reasonably likely to
have a material adverse effect on the financial condition, properties,
business or results of operations of the Company and the Subsidiary
taken as a whole, or could prevent or materially delay the transactions
contemplated by this Agreement.
(ii) The execution and delivery of this Agreement by the Company
do not, and the consummation by the Company of the transactions
contemplated by this Agreement will not, constitute or result in (i) a
breach or violation of, or a default under, the Company Articles or
Company By-Laws or the comparable governing instruments of the
Subsidiary or (ii) a breach or violation of, a default under, the
acceleration of or the creation of a lien, pledge, security interest or
other encumbrance on assets (with or without the giving of notice or the
lapse of time) pursuant to, any provision of any law, ordinance, rule or
regulation or judgment, decree, order, award or governmental or non-
governmental permit or license to which the Company or the Subsidiary
are subject, except, in the case of clause (ii) above, for such
breaches, violations, defaults or accelerations or changes that, alone
or in the aggregate, could not prevent or materially delay the
transactions contemplated by this Agreement.
(f) Company Reports; Financial Statements. The Company has
delivered to Purchaser each registration statement, schedule, report,
proxy statement or information statement required to be filed or
otherwise filed with the SEC (the "Company Reports") prepared by it
since December 31, 1998 (the "Audit Date"), including, without
limitation, (i) the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1998 (the "1998 10-K") and (ii) the Company's Form 8-K
dated January 29, 1999, each in the form (including exhibits and any
amendments thereto) filed with the SEC. As of their respective dates,
the Company Reports complied in all material respects with the
applicable requirements under the Exchange Act and did not, and any
Company Reports filed with the SEC subsequent to the date hereof and
prior to the Closing Date will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of
the circumstances in which they were made, not misleading. Each of the
consolidated balance sheets and statements of financial position
included in or incorporated by reference into the Company Reports
(including the related notes and schedules) fairly presents the
consolidated financial position of the Company and its subsidiaries as
of its date and each of the consolidated statements of earnings,
stockholders' equity and cash flows included in or incorporated by
reference into the Company Reports (including any related notes and
schedules) fairly presents the results of operations, stockholders'
equity and cash flows, as the case may be, of the Company and its
subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to normal year-end audit adjustments which will
not be material in amount or effect), in each case in accordance with
generally accepted accounting principles consistently applied during the
periods involved, except as may be noted therein. Other than the
Company Reports specifically recited above, the Company has not filed
any other definitive reports or statements with the SEC since the Audit
Date. The Company's audited consolidated financial statements for the
fiscal year ended December 31, 1998 appearing in the 1998 10-K are
hereinafter referred to as the "1998 Financial Statements," and the
consolidated balance sheet of the Company as of December 31, 1998
included in the 1998 Financial Statements is hereinafter referred to as
the "Company Balance Sheet."
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(g) Absence of Certain Changes. Except as disclosed in the
Company Reports filed with the SEC prior to the date hereof or otherwise
disclosed in the Disclosure Schedule or as to which Purchaser has
consented in writing, since the Audit Date, the Company and the
Subsidiary have conducted their respective businesses only in, and have
not engaged in any material transaction other than according to, the
ordinary and usual course of such businesses and there has not been:
(i) any material adverse change in the financial
condition, properties, business or results of operations of
the Company and the Subsidiary taken as a whole or any
development or combination of developments of which
management of the Company has knowledge that is reasonably
likely to result in any such change;
(ii) any change by the Company in accounting
principles, practices or methods;
(iii) any damage, destruction or casualty loss
to the assets of the Company or the Subsidiary or other
equipment used by the Company or the Subsidiary in
performing its obligations under its Contracts or Leases (as
defined below) (whether or not owned by the Company or the
Subsidiary or covered by insurance);
(iv) any increase in the compensation payable
by the Company or the Subsidiary to any director, officer,
employee or agent of the Company or the Subsidiary (other
than routine increases made in the ordinary course of
business consistent with past practice) or any bonus,
incentive compensation, service award or other like benefit,
granted, made or accrued, contingently or otherwise, to or
to the credit of any of such director, officer, employee or
agent or any employee welfare, pension, retirement or
similar payment or arrangement made or agreed to by the
Company or the Subsidiary with respect to any such director,
officer, employee or agent;
(v) any sale, assignment or transfer
(including without limitation any collateral assignment or
the granting or permitting of any lien, encumbrance or other
claim) of any asset, property or right of the Company or the
Subsidiary other than the sale of inventory in the ordinary
course of business;
(vi) any amendment, modification, waiver or
cancellation of any debt owed to, or claim of, the Company
or the Subsidiary, or settlement by the Company or the
Subsidiary of any dispute involving any payment or other
obligation due to or owed by the Company or the Subsidiary,
in an amount greater than $5,000, to be made or performed
after the Closing Date;
(vii) any borrowing of money by the Company or
the Subsidiary, or the incurrence of any obligation or
liability (whether absolute or contingent), in an amount
greater than $5,000, other than current liabilities incurred
in the ordinary course of the Company's and the Subsidiary's
business;
(viii) any payment by the Company or the
Subsidiary of any obligation or liability (whether absolute
or contingent) in an amount greater than $5,000, other than
current liabilities incurred in the ordinary course of
business;
(ix) any capital expenditure or commitment to
make a capital expenditure by the Company or the Subsidiary
(exclusive of expenditures for repair or maintenance of
equipment in the ordinary course of business) in an amount
greater than $5,000;
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(x) any incurrence of any extraordinary loss
or knowing waiver of any rights of substantial value by the
Company or the Subsidiary in connection with an aspect of
its business in an amount greater than $5,000, whether or
not in the ordinary course of business;
(xi) any cancellation, termination or amendment
by the Company or the Subsidiary of any Contract, Lease or
Intellectual Property License to which the Company or the
Subsidiary is a party or by which the Company or the
Subsidiary is bound that would change the amount owed to or
by the Company or the Subsidiary by more than $5,000;
(xii) any merger or consolidation of the Company
or the Subsidiary into or with any other corporation or
enterprise, or any corporate action by the Company or the
Subsidiary toward or effecting such a merger or
consolidation or a complete or partial liquidation or
dissolution of the Company or the Subsidiary or any material
portion of its assets;
(xiii) any failure on the part of the
Company or the Subsidiary to operate its business in the
ordinary course so as to preserve its business organization
reasonably intact, including the services of its present
officers and the goodwill of its suppliers, customers and
others having business relations with the Company or the
Subsidiary;
(xiv) any redemption or repurchase, directly or
indirectly, of any Shares or other equity securities of the
Company or the Subsidiary, or, any setting aside or payment
of dividends or other distributions (whether in cash or in
kind), with respect to the Shares or other equity securities
of the Company or the Subsidiary; or
(xv) any agreement by or commitment of the
Company or the Subsidiary to do or permit (through any
authorized representative or agent of the Company or the
Subsidiary) any of the foregoing.
(h) Taxes.
(i) Definitions. For purposes of this Agreement:
(A) the term "Code" shall mean the Internal
Revenue Code of 1986, as amended. All citations to the Code
or to the regulations promulgated thereunder shall include
any amendments or any substitute or successor provisions
thereto;
(B) the term "Returns" shall mean,
collectively, (1) all reports, declarations, estimates,
returns, information statements, and similar documents
relating to, or required to be filed in respect of, any
Taxes; and (2) any statements, returns, reports, or similar
documents required to be filed pursuant to Part III of
Subchapter A of Chapter 61 of the Code or pursuant to any
similar income, excise, or other tax provision of federal,
territorial, state, local, or foreign law; and the term
"Return" means any one of the foregoing Returns;
(C) the term "Tax Asset" shall mean any net
operating loss, net capital loss, investment Tax credit,
foreign Tax credit, charitable deduction or any other credit
or Tax attribute (determined without regard to the Tax
period in which such loss, credit or other attribute arose)
which could reduce Taxes; and
(D) the term "Taxes" shall mean (1) all
income, net income, gross income, gross receipts, sales,
use, ad valorem, franchise, profits, license, lease,
service, service use, withholding, employment, payroll,
excise, severance, transfer, documentary, mortgage,
registration, stamp, occupation, environmental, premium,
property, windfall profits, customs, duties, and other
taxes, fees, assessments or charges of any kind whatever,
together with any
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interest, penalties and other additions with respect
thereto, imposed by any federal, territorial, state, local
or foreign government; and (2) any penalties, interest, or
other additions to tax for the failure to collect, withhold,
or pay over any of the foregoing, or to accurately file any
Return; and the term "Tax" shall mean any one of the
foregoing Taxes. When used with reference to specified
persons (for example and without limitation, "Taxes of the
Company"), the terms "Taxes" and "Tax" shall include only
amounts of, or in respect of, Taxes for which such person
is, or could become, liable in whole or part (including,
without limitation, any obligation in connection with a duty
to collect, withhold, or pay over any Tax, any obligation to
contribute to the payment of any Taxes determined on a
consolidated, combined, or unitary basis, any liability as a
transferee, or any liability as a result of any express or
implied obligation to indemnify or pay the Tax obligations
of another person).
(ii) Returns Filed and Taxes Paid. (A) the Company has
duly filed or caused to be filed, on or before the due date thereof (as
appropriately extended) with the appropriate taxing authorities, all
Returns that it is required to file (other than those sales and use Tax
Returns the failure of which to file would not have a material adverse
effect on the Company); (B) each such Return (including any amendment
thereto) is true, correct, and complete; (C) all Taxes of the Company
due with respect to, or shown to be due on, each such Return (or
amendment) have been timely paid; (D) to the best of the Company's
knowledge, there is no valid basis for the assessment of any deficiency
with regard to any such Return; and (E) there are no extensions of time
to file which are pending. There are no liens, attachments, or similar
encumbrances on any of the assets of the Company with respect to any
Taxes, other than liens for Taxes that are not yet due and payable.
(iii) Miscellaneous. The Company has collected or withheld
all Taxes that it is required to collect or withhold, and the Company is
not a party to or bound by any tax indemnity, tax sharing or tax
allocation agreement, or any other contractual obligation to pay the Tax
obligations of another person or to pay Tax obligations relating to
transactions of another person. None of the Company's assets (A) is
property which is required to be treated as being owned by any other
person pursuant to the so-called "safe harbor lease" provisions of
former section 168(f)(8) of the Code; (B) directly or indirectly secures
any debt the interest on which is tax exempt under section 103(a) of the
Code; (C) is "tax-exempt use property" within the meaning of section
168(h) of the Code, or (D) is stock of a domestic or foreign corporation
(including any entity that properly may be treated as a corporation for
Federal income tax purposes) meeting the requirements of Code section
1504(a)(2). The transactions contemplated by this Agreement are not
subject to the tax withholding provisions of Code section 3406, or of
subchapter A of Chapter 3 of the Code, or of any other comparable
provision of law.
(iv) Audit History and Other Proceedings. (A) there are no
pending or, to the best of the Company's knowledge, threatened audits,
investigations, claims, suits or other proceedings for or relating to
any liability in respect of Taxes of the Company; (B) since December 31,
1993, no deficiencies for Taxes of the Company have been claimed,
proposed or assessed by any taxing or other Governmental Entity;
(C) there are no matters under discussion by the Company with any
Governmental Entity with respect to Taxes that could result in any
additional amount of Taxes of the Company; (D) no extension of a statute
of limitations (whether arising by reason of a waiver, claim for refund,
or otherwise) relating to Taxes of the Company is in effect; and
(E) there are no requests for rulings or determinations in respect of
Taxes of the Company pending with any governmental authority. Since
December 31, 1993, there have been no audits of any of the Company's
Federal, state or local Returns.
(i) Real and Personal Property. For purposes of this Agreement,
"Property" or "Properties" means those real and personal properties
owned or used by the Company, the Subsidiary or any partnership, joint
venture or similar entity in which the Company has an ownership
interest. The Disclosure Schedule lists all of the real property to
which the Company or the Subsidiary holds legal or equitable title
(whether or not of record). (A) each of the Company and the Subsidiary
has good and marketable title to all of the Properties owned by it; and
(B) none of the Properties is subject to any lien, claim or other
encumbrance whatsoever, except (1) liens for Taxes not yet due and
payable, (2) liens shown and described in the Company Balance Sheet, and
(3) liens imposed by law and incurred in the ordinary course of business
for obligations not yet due and payable to landlords, carriers,
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warehousemen, laborers, materialmen and the like (collectively, the
"Permitted Liens"). No part of the Properties is "tax-exempt use
property" under Section 168(h) of the Code.
(j) Leases; Subleases. For purposes of this Agreement, "Lease"
means any written or oral lease, sublease or rental agreement (and any
related contract and agreement), and all amendments, modifications and
supplements thereof and waivers and consents thereunder pursuant to
which the Company or the Subsidiary leases, subleases or rents any real
or personal property, either as lessor, lessee, landlord or tenant. The
Disclosure Schedule lists all Leases, except those which (A) can be
canceled by the Company or the Subsidiary upon 30 or fewer days' notice
without penalty or the acceleration of rentals, (B) do not grant an
option to purchase the leased property, and (C) involve an annual rental
of $5,000 or less. The Disclosure Schedule describes all oral Leases
required to be disclosed therein, and true and complete copies of all
written Leases required to be disclosed have been heretofore delivered
to Purchaser. With respect to each of the Leases: (1) neither the
Company nor the Subsidiary nor, to the best of the Company's knowledge,
any other party is in default in connection with such Lease; (2) no act
or event has occurred which, with notice or lapse of time or both, would
constitute a default under such Lease with respect to the Company or the
Subsidiary or, to the best of the Company's knowledge, any other party;
(3) there is no basis for any claim of default under such Lease with
respect to the Company or the Subsidiary or, to the best of the
Company's knowledge, any other party; (4) neither the Company nor the
Subsidiary has given or received any notice of cancellation or
termination in connection with such Lease; (5) such Lease is the valid
and binding agreement of the Company or the Subsidiary, and, to the best
of the Company's knowledge, the other party thereto, which is in full
force and effect and is enforceable in accordance with its terms,
except, with respect to such other party, to the extent that such
enforceability may be limited by, or subject to: (A) the effect of any
applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws affecting the enforcement
of creditors' rights generally; (B) the availability of the remedies of
specific performance or injunctive relief, which may be subject to the
discretion of the court before which any proceeding for such remedies
may be brought; and (C) the exercise by any court of equitable judicial
discretion before which any proceeding may be brought; (6) such Lease
will not be affected by, or require the consent of or payment to any
other party to avoid an event of default, an event of termination or
other adverse effect with respect to such by reason of the transactions
contemplated by this Agreement; and (7) such Lease is a "true" lease for
federal income tax purposes.
(k) Adequacy; Condition. (i) The Properties and the properties
subject to a Lease are fit for use in the business of the Company and
the Subsidiary as presently conducted in all material respects; (ii) the
Properties and all of the properties subject to a Lease are each in good
repair and operating condition, normal wear and tear excepted, and
structurally and mechanically sound, as applicable; (iii) the Company
and the Subsidiary are in compliance with all applicable building,
zoning, land use or other similar statutes, laws, ordinances,
regulations, permits, health and safety codes or other requirements in
respect of any of the Properties or any of the properties subject to a
Lease (and the Company's and the Subsidiary's current use of such
properties does not constitute a nonconforming use), except where the
failure to comply would not have a material adverse effect on the
Company and the Subsidiary taken as a whole, and neither the Company nor
the Subsidiary has received any notice alleging such a violation;
(iv) to the best of the Company's knowledge, none of the properties
subject to a Lease has ever been used as a landfill or otherwise been
used for the disposal of any waste, trash, garbage, industrial by-
product or chemical or the storage or treatment of hazardous substance
of any nature; and (v) to the best of the Company's knowledge, there are
no outstanding requirements or recommendations by fire underwriters or
rating boards, any insurance companies or holders of mortgages or other
security interests requiring or recommending any repairs or work to be
done with reference to any of the properties subject to a Lease.
(l) All Necessary Properties. The Properties and the Leases
(together with the intangible properties disclosed, or not required to
be disclosed, pursuant to Sections 4.1(n), 4.1(p) and 4.1(q) of this
Agreement) constitute all of the properties which the Company and the
Subsidiary use in connection with the operation of their respective
businesses as presently conducted and the consummation of the
transactions contemplated by this Agreement (provided that all required
consents relating to the Properties and the Leases have been obtained)
will not materially alter the rights or impair the ability of the
Company or the Subsidiary to use such properties in the conduct of its
business as it is now being conducted.
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(m) Accounts Receivable; Inventory; Customers; Suppliers.
(i) The accounts receivable of the Company and the Subsidiary as
reflected on the Company Balance Sheet or the books of the Company:
(A) are valid, existing and, to the extent uncollected, will be
collected in full within 90 days after the day on which it first becomes
due and payable without resort to legal proceedings or the use of
collection agencies, except to the extent of the allowance for doubtful
accounts contained in the Company Balance Sheet; (B) represents monies
due for services rendered; and (C) are subject to no material refunds or
other material adjustments or to any defenses, rights of set-off,
assignments, restrictions, security interests, encumbrances or
conditions enforceable by third parties on or affecting any thereof.
(ii) Except as set forth in the 1998 Financial Statements,
all of the Company's and the Subsidiary's inventory (including raw
materials and work in process) is usable in the ordinary course of its
business and is free from material defects, and all finished goods are
salable in the ordinary course of its business.
(iii) A complete and accurate list of the ten largest
customers (by dollar volume) of the Company and the Subsidiary, taken as
a whole, during the twelve months ended December 31, 1998 is set forth in
the Disclosure Letter.
(iv) A complete and accurate list of the ten largest
suppliers (by dollar volume) of the Company and the Subsidiary, taken as a
whole, during the twelve months ended December 31, 1998 is set forth in
the Disclosure Letter.
(n) Intellectual Property; Patents; Trademarks, Trade Names.
All patents, trademarks, service marks, trade names or copyrights owned
by or used or proposed to be used by the Company or the Subsidiary and
all applications or registrations therefor ("Intellectual Property") and
all contracts, agreements, commitments, arrangements, undertakings and
understandings relating to the use or license of technology, know-how or
processes by the Company or the Subsidiary (the "Intellectual Property
Licenses") are listed in the Disclosure Schedule. (i) The Company or
the Subsidiary owns, or has the sole and exclusive right to use, all
Intellectual Property, whether under Intellectual Property Licenses or
otherwise, used in or necessary for the ordinary conduct of its
business; (ii) the consummation of the transactions contemplated by this
Agreement will not alter or impair any such rights; and (iii) no
Intellectual Property owned, licensed or used by the Company or the
Subsidiary, or Intellectual Property License of the Company or the
Subsidiary is the subject of a lawsuit or any other proceeding, nor has
any party challenged or, to the best of the Company's knowledge,
threatened to challenge the Company's or the Subsidiary's respective
right to use such Intellectual Property or Intellectual Property License
or application for any of the foregoing; and, to the best of the
Company's knowledge, there is no basis for any such challenge.
(o) Indebtedness. The Disclosure Schedule sets forth (i) a
complete and accurate list or description of all instruments or other
documents ("Debt Instruments") relating to any direct or indirect
indebtedness for borrowed money of the Company or the Subsidiary, as
well as indebtedness by way of capital leases, lease-purchase
arrangements, guarantees, undertakings on which others rely in extending
credit and all conditional sales contracts, chattel mortgages and other
security arrangements with respect to personal property used or owned by
the Company or the Subsidiary and (ii) a list of all loans of money to
the respective officers, employees or shareholders of the Company or the
Subsidiary (specifically excluding travel and similar advances in the
ordinary course of business).
(p) Other Contracts. The Disclosure Schedule lists each
contract, agreement, commitment, arrangement, undertaking or
understanding of the type listed below (except where the same does not
call for the payment or receipt by the Company or the Subsidiary of cash
or other property or services having a value in excess of $5,000) to
which the Company or the Subsidiary is a party or bound or to which the
Company or the Subsidiary or any of their respective properties are
subject, whether written or oral ("Contract," but such list and the term
"Contract" shall not include Leases, Intellectual Property Licenses,
Debt Instruments, Insurance Policies and employee-related matters
disclosed elsewhere in this Agreement):
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(i) for the purchase or rental of materials,
inventory and supplies by the Company or the Subsidiary
entered into in the ordinary course of business which are
not reasonably expected to be fully performed within 45 days
of their respective dates;
(ii) for the purchase of services by the
Company or the Subsidiary entered into in the ordinary
course of business which are not reasonably expected to be
fully performed within 45 days of their respective dates;
(iii) that were entered into in the ordinary
course of business and which are not reasonably expected to
be fully performed within 45 days of their respective dates;
(iv) for matters not in the ordinary course of
the Company's or the Subsidiary's business;
(v) making the Company or the Subsidiary
liable, by guaranty, suretyship agreement, indemnification
agreement, contribution agreement or otherwise, upon or with
respect to, or obligating the Company or the Subsidiary in
any way to provide funds in respect of, or obligating the
Company or the Subsidiary to guarantee, serve as surety for
or assume, any debt, dividend or other liability or
obligation of any person, corporation, association,
partnership or other entity (except endorsements made in the
ordinary course of business in connection with the deposit
of items for collection and except for immaterial
obligations or liabilities incurred in the ordinary course
of business);
(vi) granting a power of attorney;
(vii) relating to participation in a cooperative,
partnership or joint venture;
(viii) imposing confidentiality requirements
(other than agreements relating to confidentiality requirements
between Purchaser and/or the Company or the Subsidiary); and
(ix) restricting or limiting the freedom of the
Company or the Subsidiary to compete in any line of
business.
The Disclosure Schedule describes all oral Contracts required to be
disclosed therein, and true and complete copies of all written Contracts
(as amended) required to be disclosed in the Disclosure Schedule have
been delivered to Purchaser.
(q) Insurance. All insurance policies of the Company or the
Subsidiary now in force (including comprehensive general liability,
personal and professional liability, comprehensive general casualty and
extended coverage, automobile, boiler and machinery, fire and lightning,
marine, endowment, life, and worker's compensation) ("Insurance
Policies") are listed in the Disclosure Schedule, together with a
listing of the type of policy, the policy number, the limits of
coverage, the carrier, the annual premium and the expiration date), and
true and complete copies of such policies have been provided or made
available to Purchaser. The Company has provided to Purchaser a true
and complete summary of the loss experience under each such insurance
policy during the preceding five policy years. Neither the Company nor
the Subsidiary has received any notice that any insurance carrier has
cancelled, intends to cancel or intends not to renew any of such
policies.
(r) Status. (i) Neither the Company nor the Subsidiary has
assigned any of its rights or obligations under (and, to the best of the
Company's knowledge, is not otherwise restricted for any reason from
enjoying the full benefits under) any Intellectual Property License,
Debt Instrument, Contract or Insurance Policy; (ii) neither the Company
nor the Subsidiary nor, to the best of the Company's knowledge, any
other party is in default in connection with any Intellectual Property
License, Debt Instrument, Contract or Insurance Policy; (iii) to the
best of the Company's knowledge, no act or event has occurred which,
with notice or lapse of time or both, would
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constitute a default under any Intellectual Property License, Debt
Instrument, Contract or Insurance Policy; (iv) to the best of the
Company's knowledge, there is no basis for any claim of default under
any Intellectual Property License, Debt Instrument, Contract or
Insurance Policy; (v) there is no outstanding notice of cancellation or
termination received by the Company or the Subsidiary in connection with
any Intellectual Property License, Debt Instrument, Contract or
Insurance Policy; (vi) each Intellectual Property License, Debt
Instrument, Contract and Insurance Policy is the valid and binding
agreement of the Company or the Subsidiary, as the case may be, and, to
the best of the Company's knowledge, the other parties thereto, which is
in full force and effect and is enforceable in accordance with its
terms, except, with respect to such other party, to the extent that such
enforceability may be limited by, or subject to: (A) the effect of any
applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws affecting the
enforceability of creditors' rights generally, (B) the availability of
specific performance or injunctive relief, which may be subject to the
discretion of the court before which any proceeding for such remedies
may be brought, and (C) the exercise by any court of equitable judicial
discretion before which any proceeding may be brought; (vii) no
Intellectual Property License, Debt Instrument, Contract or Insurance
Policy will require the consent of or payment to any other party to
avoid an event of default or an event of termination with respect to
such Intellectual Property License, Debt Instrument, Contract or
Insurance Policy (assuming that any required notice of default or
termination has been given and any periods for cure have expired) by
reason of the transactions contemplated by this Agreement; and
(viii) neither the Company nor the Subsidiary has received any
communication proposing any termination, amendment or change to any
Intellectual Property License, Debt Instrument, Contract or Insurance
Policy.
(s) Employee Benefits.
(i) All bonus, deferred compensation, pension, retirement,
profit-sharing, thrift savings, employee stock ownership, stock bonus,
stock purchase, restricted stock and stock option, employment,
termination, severance, compensation, medical, health or other plan,
contract, policy or arrangement which covers current or former employees
of the Company or the Subsidiary (the "Employees") and current or former
directors of the Company or the Subsidiary (the "Compensation and
Benefit Plans") including, but not limited to, "employee benefit plans"
within the meaning of section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") are listed in the Disclosure
Schedule and any "change of control" or similar provisions therein are
specifically identified in the Disclosure Schedule. True and complete
copies of all Compensation and Benefit Plans and such other benefit
plans, contracts or arrangements, including, but not limited to, any
trust instruments and insurance contracts, if any, forming a part of any
such plans and agreements, and all amendments thereto have been made
available to Purchaser. The Company has filed all Form 5500's required
to be filed with respect to the Compensation and Benefit Plans and each
such form is complete and accurate in all material respects and complies
in all material respects with all applicable law.
(ii) All Compensation and Benefit Plans are in substantial
compliance with applicable law and all Compensation and Benefit Plans
which are employee benefit plans, other than "multiemployer plans"
within the meaning of sections 3(37) of ERISA, covering employees (the
"Plans") to the extent subject to ERISA, are in substantial compliance
with ERISA. Each Plan which is an "employee pension benefit plan"
within the meaning of section 3(2) of ERISA ("Pension Plan") and which
is intended to be qualified under section 401(a) of the Code, has
received a favorable determination letter from the Internal Revenue
Service with respect to "TRA" (as defined in Section 1 of Internal
Revenue Service Revenue Procedure 93-39), and the Company is not aware
of any circumstances likely to result in revocation of any such
favorable determination letter. There is no material pending or, to the
knowledge of the Company, threatened litigation relating to the
Compensation and Benefit Plans. Neither the Company nor the Subsidiary
has engaged in a transaction with respect to any Plan that, assuming the
taxable period of such transaction expired as of the date hereof, could
subject the Company or the Subsidiary to a material tax or penalty
imposed by either section 4975 of the Code or section 502(i) of ERISA.
(iii) No liability under Subtitle C or D of Title IV of ERISA has
been or is expected to be incurred by the Company or the Subsidiary with
respect to any ongoing, frozen or terminated "single-employer plan",
within the meaning of section 4001(a)(15) of ERISA, currently or
formerly maintained by any of them, or the single-employer plan of any
entity which is considered one employer with the Company under section
4001 of ERISA or section 414
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of the Code (an "ERISA Affiliate"). The Company and the Subsidiary have
not incurred and do not expect to incur any withdrawal liability with
respect to a multiemployer plan under Subtitle E of Title IV of ERISA.
No notice of a "reportable event", within the meaning of section 4043 of
ERISA for which the 30-day reporting requirement has not been waived,
has been required to be filed for any Pension Plan or by any ERISA
Affiliate within the 12-month period ending on the date hereof.
(iv) All contributions required to be made under the terms of any
Plan have been timely made. Neither any Pension Plan nor any single-
employer plan of an ERISA Affiliate has an "accumulated funding
deficiency" (whether or not waived) within the meaning of section 412 of
the Code or section 302 of ERISA. Neither the Company nor the
Subsidiary has provided, or is required to provide, security to any
Pension Plan or to any single-employer plan of an ERISA Affiliate
pursuant to section 401(a)(29) of the Code.
(v) Under each Pension Plan which is a single-employer plan, as
of the last day of the most recent plan year ended prior to the date
hereof, the actuarially determined present value of all "benefit
liabilities", within the meaning of section 4001(a)(16) of ERISA (as
determined on the basis of the actuarial assumptions contained in the
Plan's most recent actuarial valuation), did not exceed the then current
value of the assets of such Plan, and there has been no material change
in the financial condition of such Plan since the last day of the most
recent Plan Year. The withdrawal liability of the Company and the
Subsidiary under each Benefit Plan which is a multiemployer plan to
which the Company, the Subsidiary or an ERISA Affiliate has contributed
during the preceding 12 months, determined as if a "complete
withdrawal", within the meaning of section 4203 of ERISA, had occurred
as of the date hereof, does not exceed $10,000.
(vi) Neither the Company nor the Subsidiary has any obligations
for retiree health and life benefits under any Plan, except as set forth
in the Disclosure Schedule. The Company or the Subsidiary may amend or
terminate any such Plan pursuant to the terms thereof.
(vii) The consummation of the transactions contemplated by this
Agreement will not (x) entitle any employees of the Company or the
Subsidiary to severance pay, (y) accelerate the time of payment or
vesting or trigger any payment of compensation or benefits under,
increase the amount payable or trigger any other material obligation
pursuant to, any of the Compensation and Benefit Plans or (z) result in
any breach or violation of, or a default under any of the Compensation
and Benefit Plans.
(viii) All Compensation and Benefit Plans covering non-U.S.
Employees comply in all material respects with applicable local law.
The Company and the Subsidiary have no material unfunded liabilities
with respect to any Pension Plan which covers non-U.S. Employees.
(t) Takeover Statutes. No "fair price", "moratorium", "control
share acquisition," "business combination" or other similar antitakeover
statute or regulation (each a "Takeover Statute") is applicable to the
Company, the Subsidiary, the Shares, the Offer or the transactions
contemplated hereby.
(u) Environmental Matters. Except to the extent that the
Company's noncompliance with the following would not reasonably be
likely to have a material adverse effect on the financial condition,
properties, business or results of operations of the Company and the
Subsidiary taken as a whole: (i) the Company and the Subsidiary have
complied at all times with all applicable Environmental Laws; (ii) to
the best of the Company's knowledge after reasonable inquiry, all
properties currently owned or operated by the Company or the Subsidiary
(including soils, groundwater, surface water, buildings or other
structures) have not been contaminated with any Hazardous Substances;
(iii) to the best of the Company's knowledge after reasonable inquiry,
any properties formerly owned or operated by the Company or the
Subsidiary were not contaminated with Hazardous Substances on or prior
to such period of ownership or operation; (iv) neither the Company nor
the Subsidiary is subject to liability for any Hazardous Substance
disposal or contamination on any third party property; (v) to the best
of the Company's knowledge after reasonable inquiry, neither the Company
nor the Subsidiary is subject to liability for any release or threat of
release of any Hazardous Substance; (vi) neither the Company nor the
Subsidiary has received any notice, demand, letter, claim or request for
information indicating that it may be in violation of or liable
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under any Environmental Law; (vii) neither the Company nor the
Subsidiary is subject to any order, decree, injunction or other
arrangement with any governmental entity or any indemnity or other
agreement with any third party relating to liability under any
Environmental Law; (viii) none of the properties of the Company or the
Subsidiary contain any underground storage tanks, asbestos-containing
material, lead products, or polychlorinated biphenyls; (ix) there are no
other circumstances or conditions involving the Company or the
Subsidiary known to the Company after reasonable inquiry that could
reasonably be expected to result in any claims, liability,
investigations, costs or restrictions on the ownership, use, or transfer
of any property pursuant to any Environmental Law; and (x) the Company
has delivered or made available to Purchaser copies of all environmental
reports, studies, assessments, sampling data and all other information
in its possession relating to asbestos and silica liability and claims
including without limitation product and sales information, filing
rates, settlements, projected claims, legal advice, reserves, insurance
and the use and disposal of asbestos containing material.
As used herein, the term "Environmental Law" means any federal,
state or local law, regulation, order, decree, permit, authorization,
opinion, common law or agency requirement relating to: (A) the
protection, investigation or restoration of the environment, health,
safety, or natural resources, (B) the handling, use, presence, disposal,
release or threatened release of any Hazardous Substance, (C) noise,
odor, wetlands, pollution, contamination or any injury or threat of
injury to persons or property or (D) standards of conduct concerning
protection of human health (including, without limitation, employee
health and safety), in each case as amended and as now or hereafter in
effect, and the term "Hazardous Substance" means any substance that is:
(A) listed, classified or regulated pursuant to any Environmental Law;
(B) any petroleum product or by-product, asbestos-containing material,
silica, lead-containing paint or plumbing, polychlorinated biphenyls,
radioactive materials or radon; or (C) any other substance which may be
the subject of regulatory action by any governmental authority pursuant
to any Environmental Law.
(v) Labor Relations. (i) The Company and the Subsidiary are
(and, since January 1, 1994, have been) in material compliance with all
federal, state, local and other applicable law respecting employment and
employment practices, terms and conditions of employment and wages and
hours; (ii) there is (and, since January 1, 1994, has been) no unfair
labor practice, complaint, charge or other matter against or involving
the Company or the Subsidiary pending or threatened before any
Governmental Entity; (iii) there is no (and, since January 1, 1994 has
not been) labor strike, dispute, organizing effort, slow down, stoppage
or other labor difficulty pending, involving or, to the best of the
Company's knowledge, threatened, against or affecting the Company or the
Subsidiary; (iv) no representation question exists, or has existed since
January 1, 1994, with respect to the respective employees of the Company
or the Subsidiary; (v) no grievance which might have an adverse effect
on the Company or the Subsidiary or on the conduct of its business nor
any arbitration proceeding arising out of or under collective bargaining
agreements is pending, and no claim therefor exists; and (vi) there is
(and, since January 1, 1994, has been) no collective bargaining
agreement which is binding on the Company or the Subsidiary.
(w) Litigation. There are no (i) civil, criminal or
administrative actions, suits, claims, hearings, investigations or
proceedings (collectively, "Actions") pending or, to the knowledge of
the management of the Company, threatened against the Company or the
Subsidiary or (ii) obligations or liabilities, whether or not accrued,
contingent or otherwise, including, without limitation, those relating
to matters involving any Environmental Law (as defined in
Section 4.1(u)).
(x) Compliance with Laws.
(i) Generally. The Company and the Subsidiary are
(and during the preceding five years have been) in material compliance
with all applicable law (including those involving antitrust, unfair
competition, trade regulation, antipollution, environmental, employment,
safety, health and food and drug matters). Without limiting the
foregoing, neither the Company nor the Subsidiary has at any time made
any illegal payment for political contributions, any bribe or illegal
kickback payment, or any practice or procedure which results or will
result in the illegal payment by or on behalf of the Company or the
Subsidiary to a person in connection with a referral to the Company or
the Subsidiary by such person.
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(ii) Charges or Violations. The Company and the
Subsidiary are not (and, during the preceding five years, have not been)
either charged with, in receipt of any notice or warning of, or under
investigation with respect to, any failure or alleged failure to
materially comply with any provision of any applicable law.
(iii) Permits. Without limiting the foregoing: (A) a
list of all occupancy certificates and other licenses, permits and
certificates ("Permits") required of the Company or the Subsidiary in
connection with its ownership, possession, use, occupancy or operation
of any of the Properties owned, leased or used by it are set forth in
the Disclosure Schedule; (B) all of the Permits are in full force and
effect in all material respects; (C) the Company and the Subsidiary are
(and have been) in material compliance with the Permits; and (D) none of
the Permits will be affected by, or require the consent of any party by
reason of, the transactions contemplated by this Agreement where such
effect or failure to obtain such consent would restrict or hamper the
operation of any operating facility owned, leased or used by the Company
or the Subsidiary.
(y) Bank Accounts. The Disclosure Schedule lists all bank,
money market, savings and similar accounts and safe deposit boxes of the
Company and the Subsidiary, specifying the account numbers and the
authorized signatories or persons having access to them.
(z) Transactions with Affiliates. No holder of 10% or more of
the outstanding common stock of the Company nor any person controlled by
some combination of them, no officer or director of the Company or the
Subsidiary, nor any "affiliate" or "associate" (as such terms are
defined in the rules and regulations of the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "1933
Act")) of any of the foregoing:
(i) is a party to any lease, sublease, contract,
agreement, commitment, understanding or other arrangement of any kind
whatsoever, involving any such person and the Company or the Subsidiary;
(ii) owns directly or indirectly, in whole or in
part, any property that the Company or the Subsidiary uses or otherwise
has rights in respect of; or
(iii) has any cause of action or other claim
whatsoever against, or owes any amount to, the Company or the Subsidiary
other than (i) for compensation (including fringe benefits) to officers
and employees disclosed pursuant to Section 4.1(s) and for reimbursement
of ordinary and necessary expenses incurred in connection with
employment by the Company or the Subsidiary and (ii) as otherwise
disclosed pursuant to this Agreement.
(aa) Commissions. No person, firm or corporation is entitled to
any commission or broker's or finder's fee in connection with the
transactions contemplated by this Agreement by reason of any act or
omission of the Company or the Subsidiary, other than payment to Pacific
Crest Securities with respect to the issuing of its fairness opinion in
accordance with its engagement agreement with the Company, a true and
complete copy of which has been provided to Purchaser.
(bb) Generally. No representation or warranty by the Company in
this Agreement or in the Disclosure Schedule, any Exhibit or closing
certificate furnished or to be furnished to Purchaser pursuant to this
Agreement or in connection with the transactions contemplated by this
Agreement contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact, necessary to make
the statements herein or therein, in light of the circumstances in which
they were made, not misleading.
4.2 Representations and Warranties of Purchaser. Purchaser
represents and warrants to the Company that:
(a) Corporate Organization and Qualification. Each of Purchaser
and its subsidiaries is a corporation duly organized and validly
existing under the laws of its jurisdiction of incorporation and is in
good standing as a
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foreign corporation in each jurisdiction where the properties owned,
leased or operated, or the business conducted, by it require such
qualification except for such failure to so qualify or to be in such
good standing, which, when taken together with all other such failures,
is not reasonably likely to have a material adverse effect on the
financial condition, properties, business or results of operations of
Purchaser and its subsidiaries, taken as a whole. Each of Purchaser and
its subsidiaries has the requisite corporate power and authority to
carry on its respective businesses as they are now being conducted.
(b) Corporate Authority. Purchaser has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and
performance by Purchaser of this Agreement, and the consummation of the
transactions contemplated hereby, have been duly authorized by
Purchaser's Board of Directors and no corporate action on the part of
Purchaser is necessary to authorize the execution and delivery by
Purchaser of this Agreement and the consummation by Purchaser of the
transactions contemplated hereby. This Agreement has been duly executed
and delivered by Purchaser and, assuming due and valid authorization,
execution and delivery hereof by the Company, is a valid and binding
obligation of Purchaser enforceable against Purchaser in accordance with
its terms, except that (i) such enforcement may be subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (ii) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) Governmental Filings; No Violations.
(i) Other than the Regulatory Filings (including the Offer
Documents), no notices, reports or other filings are required to be made
by Purchaser with, nor are any consents, registrations, approvals,
permits or authorizations required to be obtained by Purchaser from, any
Governmental Entity in connection with the execution and delivery of
this Agreement by Purchaser and the consummation by Purchaser of the
transactions contemplated hereby, the failure to make or obtain any or
all of which could prevent, delay or materially burden the transactions
contemplated by this Agreement.
(ii) The execution and delivery of this Agreement by Purchaser do
not, and the consummation by Purchaser of the transactions contemplated
by this Agreement will not, constitute or result in (i) a breach or
violation of, or a default under, the Articles of Incorporation or By-
Laws of Purchaser or the comparable governing instruments of any of its
subsidiaries or (ii) a breach or violation of, a default under, the
acceleration of or the creation of a lien, pledge, security interest or
other encumbrance on assets (with or without the giving of notice or the
lapse of time) pursuant to, any provision of any contract of Purchaser
or any of its subsidiaries or any law, ordinance, rule or regulation or
judgment, decree, order, award or governmental or non-governmental
permit or license to which Purchaser or any of its subsidiaries are
subject, except, in the case of clause (ii) above, for such breaches,
violations, defaults or accelerations or changes that, alone or in the
aggregate, could not prevent or delay or materially burden the
transactions contemplated by this Agreement. None of the information
supplied by Purchaser for inclusion in the Schedule 14D-9 will, at the
time first sent or given to the Company's stockholders contains any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are
made, not misleading.
(d) Funds. Purchaser has and will have the funds necessary to
consummate the transactions contemplated by this Agreement.
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ARTICLE V
COVENANTS
5.1 Interim Operations of the Company. The Company covenants
and agrees, as to itself and the Subsidiary, that, except as set forth
in the Disclosure Letter, after the date hereof and prior to the Closing
Date (unless Purchaser shall otherwise agree in writing and except as
otherwise permitted or required by this Agreement):
(a) the business of the Company and the Subsidiary shall be
conducted only in the ordinary and usual course and, to the extent
consistent therewith, the Company and the Subsidiary shall use
commercially reasonable efforts to preserve its business organization
intact and maintain its existing relations with customers, suppliers,
employees and business associates;
(b) the Company shall not (i) sell or pledge or agree to sell or
pledge any stock owned by it in the Subsidiary; (ii) amend the Company
Articles or Company By-Laws; (iii) split, combine or reclassify the
outstanding Shares; or (iv) declare, set aside or pay any dividend
payable in cash, stock or property with respect to the Shares;
(c) neither the Company nor the Subsidiary shall (i) other than
pursuant to the exercise of options outstanding on the date hereof,
issue, sell, pledge, dispose of or encumber any additional shares of, or
securities convertible or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire, any shares of its capital
stock of any class of the Company or the Subsidiary or any other
property or assets other than, in the case of the Company, Shares
issuable pursuant to options outstanding on the date hereof under the
Stock Plan; (ii) transfer, lease, license, guarantee, sell, mortgage,
pledge, dispose of or encumber any assets or incur or modify any
indebtedness or other liability other than in the ordinary and usual
course of business; (iii) acquire directly or indirectly by redemption
or otherwise any shares of the capital stock of the Company; (iv)
authorize capital expenditures for items in excess of $5,000; or (v)
make any acquisition of another person or entity (by merger,
consolidation or acquisition of stock or assets) or any investment in,
assets or stock of any other person or entity;
(d) except for the employment agreements and non-competition
agreement contemplated by Section 6.1(b), neither the Company nor the
Subsidiary shall grant any severance or termination pay to, or enter
into any employment or severance agreement with any director, officer or
other employee of the Company or the Subsidiary; and neither the Company
nor the Subsidiary shall establish, adopt, enter into, make any new
grants or awards under or amend, any collective bargaining, bonus,
profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, employee stock ownership, deferred compensation,
employment, termination, severance or other plan, agreement, trust,
fund, policy or arrangement for the benefit of any directors, officers
or employees (the "Benefit Plans");
(e) except with the consent of Purchaser, neither the Company
nor the Subsidiary shall settle or compromise any material claims or
litigation or, modify, amend or terminate any of its joint venture
agreements, partnership agreements or material contracts or waive,
release or assign any material rights or claims;
(f) neither the Company nor the Subsidiary shall make any tax
election or permit any insurance policy naming it as a beneficiary or a
loss payable payee to be canceled or terminated without notice to
Purchaser;
(g) except as may be required as a result of a change in law or
in generally accepted accounting principles, neither the Company nor the
Subsidiary shall change any of their respective accounting practices or
principles;
(h) neither the Company nor the Subsidiary shall adopt a plan of
complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization, or other reorganization of the Company
or the Subsidiary; and
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(i) neither the Company nor the Subsidiary will authorize or
enter into an agreement to do any of the foregoing or take any action
that would make any of the representations or warranties of the Company
contained in this Agreement untrue or incorrect as of the date when made
if such action had then been taken, or would result in any of the Offer
Conditions set forth in Annex A not being satisfied.
5.2 Acquisition Proposals. The Company, its affiliates and its
and their respective officers, directors, employees, representatives and
agents (including, without limitation, any investment banker, attorney
or accountant retained by the Company or the Subsidiary) shall
immediately cease all existing discussions or negotiations, if any, with
any parties conducted heretofore with respect to any acquisition or
exchange of all or any material portion of the assets of, or any of the
equity interest in, the Company or the Subsidiary (by direct purchase
from the Company or the Subsidiary, tender or exchange offer or
otherwise) or any business combination, merger, consolidation or similar
transaction (including an exchange of stock or assets) with or involving
the Company or the Subsidiary or any division of the Company or the
Subsidiary (an "Acquisition Transaction"). Neither the Company nor any
of its affiliates, nor any of its or their respective officers,
directors, employees, representatives or agents (including, without
limitation, any investment banker, attorney or accountant retained by
the Company or the Subsidiary) shall, directly or indirectly, encourage,
solicit, participate in or initiate discussions or negotiations with, or
provide any information to, any corporation, partnership, person or
other entity or group (other than Purchaser, any affiliate or associate
of Purchaser or any designees of Purchaser) with respect to any
inquiries or the making of any offer or proposal (including, without
limitation, any offer or proposal to the stockholders of the Company)
concerning an Acquisition Transaction (an "Acquisition Proposal"),
unless the Board of Directors of the Company determines in good faith
after consultation with outside legal counsel that such action is
necessary in order for its directors to comply with their respective
fiduciary duties under applicable law (any such more favorable
Acquisition Proposal being referred to in this Agreement as a "Superior
Proposal"). The Company will take the necessary steps to inform the
individuals or entities referred to in the first sentence hereof of the
obligations undertaken in this Section 5.2. The Company will notify
Purchaser immediately if any such inquiries or proposals are received
by, any such information is requested from, or any such negotiations or
discussions are sought to be initiated or continued with the Company,
the name of the person making such proposals, the material terms and
conditions of such proposals and thereafter shall keep Purchaser
informed, on a current basis, of the status and terms of such proposals
and the status of such negotiations or discussions. The Company agrees
not to release any third party from, or waive any provisions of, any
confidentiality or standstill agreement to which the Company is a party,
unless the Board of Directors of the Company shall have determined in
good faith, based upon the advice of outside counsel to the Company,
that failing to release such third party or waive such provisions would
constitute a breach of the fiduciary duties of the Board of Directors of
the Company under applicable law.
5.3 Filings; Other Action. (a) Subject to the terms and
conditions herein provided, the Company and Purchaser shall: (i)
promptly make their respective Regulatory Filings with respect to the
Offer; and (ii) use all reasonable efforts to promptly take, or cause to
be taken, all other action and do, or cause to be done, all other things
necessary, proper or appropriate under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement, including but not limited to cooperating in the preparation
and filing of the Offer Documents, the Schedule 14D-9 and any amendments
to any thereof. The Company shall use all reasonable efforts to obtain
all licenses, permits, consents, approvals, authorizations,
qualifications and orders of governmental authorities and parties to
contracts with the Company and the Subsidiary as are necessary for the
consummation of the transactions contemplated by this Agreement and to
fulfill the conditions to the Offer. Notwithstanding anything contained
herein to the contrary, Purchaser shall be under no obligation
whatsoever to make or accept or engage in negotiations for any
settlement with any governmental entity or any other arrangement
involving the sale, disposition, or separate holding, through the
establishment of a trust, or otherwise, of the business or any of the
assets of the Company or the Subsidiary acquired pursuant to this
Agreement, or any portion thereof, or particular assets of Purchaser or
its subsidiaries or any of Purchaser Companies in order to complete the
transactions contemplated herein.
(b) The Company and Purchaser each shall keep the other apprised
of the status of matters relating to completion of the transactions
contemplated hereby, including promptly furnishing the other with copies
of notices or other communications received by Purchaser or the Company,
as the case may be, or any of their subsidiaries,
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from any Governmental Entity with respect to the Offer or any of the
other transactions contemplated by this Agreement.
5.4 Access. The Company shall (and shall cause the Subsidiary
to) afford Purchaser's officers, employees, counsel, lenders,
accountants and other authorized representatives ("Representatives")
reasonable access, during normal business hours throughout the period
prior to the Closing Date, to the Representatives of the Company (and
the Subsidiary) and its properties, books, contracts and records and,
during such period, the Company shall (and shall cause the Subsidiary
to) furnish promptly to Purchaser all information concerning its
business, properties and personnel as Purchaser or its Representatives
may reasonably request, provided that no investigation pursuant to this
Section 5.4 shall affect or be deemed to modify any representation or
warranty made by the Company. All requests for information made
pursuant to this Section shall be directed to an executive officer of
the Company or such person as may be designated by any such officer.
5.5 Notification of Certain Matters. Except as otherwise
disclosed herein, the Company shall give prompt notice to Purchaser of:
(a) any notice of, or other communication relating to, any environmental
matter, a default or event that, with notice or lapse of time or both,
would become a default, received by the Company or the Subsidiary
subsequent to the date of this Agreement and prior to the Closing Date,
under any Contract, Lease, Debt Instrument, Intellectual Property
License or Insurance Policy to which the Company or the Subsidiary is a
party or is subject; (b) any changes or developments relating to any
Action pending or, to the knowledge of management of the Company,
threatened against the Company or the Subsidiary existing as of the date
hereof; (c) any new Actions pending or, to the knowledge of management
of the Company, threatened against the Company or the Subsidiary since
the date hereof; (d) any material adverse change in the financial
condition or results of operations of the Company and the Subsidiary
taken as a whole as compared to the financial condition and results of
operations of the Company and the Subsidiary disclosed in the
consolidated financial statements of the Company as of and for the
fiscal year ended December 31, 1998 or the occurrence of any event
which, so far as reasonably can be foreseen at the time of its
occurrence, is reasonably likely to result in any such change; and
(e) any material adverse change in the properties or business of the
Company and the Subsidiary taken as a whole or the occurrence of any
event which, so far as reasonably can be foreseen at the time of its
occurrence, is reasonably likely to result in any such change. Each of
the Company and Purchaser shall give prompt notice to the other party of
any notice or other communication from any third party alleging that the
consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement.
5.6 Publicity. The initial press release relating to the
execution of this Agreement shall be a joint press release and
thereafter the Company and Purchaser, unless they have previously agreed
in writing to the contrary, will not issue any press release or
otherwise make a public statement with respect to the transactions
contemplated hereby or make any filings with any Governmental Entity or
with any national securities exchange with respect thereto, unless in
the written opinion of counsel to the party desiring to make such
disclosure, a copy of which opinion shall be delivered to the other
party as promptly as practicable under the circumstances, such
disclosure is required by law or stock exchange rule or regulation.
5.7 Environmental Filings. The Company shall promptly make all
filings, notifications, applications, permit transfers and other
submissions relating to the Offer that may be required pursuant to any
Environmental Laws including without limitation those relating to the
ownership, operation or transfer of real property, underground storage
tanks, waste disposal locations or landfills and closure and post
closure financial assurances ("Environmental Submissions"). The Company
shall provide Purchaser with copies of all Environmental Submissions at
the time of filing and Purchaser shall cooperate with the Company in the
preparation and execution of all Environmental Submissions.
5.8 Takeover Statutes. If any Takeover Statute shall become
applicable to the transactions contemplated hereby, the Company and the
members of the Board of Directors of the Company shall grant such
approvals and take such actions as are necessary so that the
transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated hereby and otherwise act to
eliminate or minimize the effects of such statute or regulation on the
transactions contemplated hereby.
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5.9 Availability of Financing. To fund the growth of the
Company's business after the Closing, Purchaser shall make available to
the Company up to $3,000,000 of subordinated debt financing and/or
facilitate the refinancing and possible increase of the Company's
existing credit facilities on more favorable terms, all as then
determined by the Company's Board of Directors to be in the best
interest of the Company.
ARTICLE VI
CONDITIONS
6.1 Conditions to Obligations of Purchaser. The obligation of
Purchaser to consummate the purchase of Shares pursuant to the Offer and
the other transactions contemplated by this Agreement is subject to the
fulfillment of each of the following conditions, any or all of which may
be waived in whole or in part by Purchaser:
(a) each of the Offer Conditions shall have been fulfilled;
(b) the Company shall have entered into employment agreements
with Ronald L. Bogh and Paul M. Gilson, and a non-competition agreement
with Douglas C. Nelson, each substantially in the form of Annexes B, C
and D hereto, respectively;
(c) The Company shall have received the written opinion of the
Financial Advisor that the terms of the Offer are fair, from a financial
point of view, to the stockholders of the Company and such opinion shall
not have been withdrawn;
(d) Purchaser shall have received confirmation that the
Company's common stock shall continue to be listed on the Nasdaq
SmallCap Market following the Closing without any conditions which
Purchaser in its reasonable judgment shall deem to be materially
adverse;
(e) Douglas C. Nelson shall have entered into an agreement with
the Company, in form and substance satisfactory to Purchaser in
Purchaser's sole discretion, waiving the Company's existing obligations
to guarantee a price per share on shares of the Common Stock which may
be sold by Douglas C. Nelson and providing for the surrender by Douglas
C. Nelson of all of his options to purchase shares of Common Stock;
(f) The Company's Board of Directors shall consist of Ronald L.
Bogh, Paul M. Gilson and, at Purchaser's option, up to four additional
persons designated by Purchaser, two of whom shall be Marvin S. Wool and
Gregory J. Divis;
(g) Purchaser shall have received the legal opinion of Davis
Wright Tremaine LLP, counsel to the Company, in the form attached hereto
as Annex E;
(h) Purchaser shall have entered into agreements in
substantially the form of Annex F hereto with each of Ronald L. Bogh,
Douglas C. Nelson and James V. Reimann providing for the tender of such
amounts of their shares of Common Stock pursuant to the Offer, as
Purchaser and such stockholders shall agree in order to facilitate the
transactions contemplated hereby;
(i) No United States or state court or other Governmental Entity
of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, judgment, decree,
injunction or other order (whether temporary, preliminary or permanent)
which is in effect and prohibits consummation of the
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transactions contemplated by this Agreement or imposes material
restrictions on Purchaser in connection with consummation of the
purchase of the Shares pursuant to the Offer or with respect to
Purchaser's or the Company's business operations, either prior to or
subsequent to the purchase of the Shares pursuant to the Offer
(collectively, an "Order");
(j) Purchaser shall have entered into an agreement with each of
Edward DeRaeve and Jerry K. Brown, directors of the Company, providing
that he shall not exercise on or prior to the Closing any stock option
issued to him pursuant to the Stock Plan; and
(k) The Company shall have taken all actions required by Section
7.1.3 of the Stock Plan to prevent the acceleration of the vesting of
stock options issued pursuant to the Stock Plan by reason of the
transactions contemplated by this Agreement.
6.2 Conditions to Obligations of the Company. The obligation of
the Company to consummate the transactions contemplated by this
Agreement is subject to the fulfillment of each of the following
conditions, any or all of which may be waived in whole or in part by the
Company:
(a) Purchaser shall not have breached or failed to perform in
any material respect any of its obligations, covenants or agreements
contained in this Agreement and no representation or warranty of
Purchaser set forth in this Agreement shall have been inaccurate or
incomplete in any material respect when made or thereafter shall have
become inaccurate or incomplete in any material respect;
(b) The Company shall have received the written opinion of the
Financial Advisor that the terms of the Offer are fair, from a financial
point of view, to the stockholders of the Company and such opinion shall
not have been withdrawn;
(c) The Company shall have received confirmation that the
Company's common stock shall continue to be listed on the Nasdaq
SmallCap Market following the Closing without any conditions which the
Company in its reasonable judgment shall deem to be materially adverse;
and
(d) There shall be in effect no Order.
ARTICLE VII
TERMINATION
7.1 Termination by Mutual Consent. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned at
any time prior to the Closing Date, by the mutual consent of Purchaser
and the Company, by action of their respective Boards of Directors.
7.2 Termination by Either Purchaser or the Company. This
Agreement may be terminated and the transactions contemplated hereby may
be abandoned at any time prior to the Closing Date, by action of the
Board of Directors of either Purchaser or the Company if (i) Purchaser
shall have terminated the Offer without purchasing any Shares pursuant
thereto; (ii) any court of competent jurisdiction or other Governmental
Entity located or having jurisdiction within the United States or any
country in which either the Company or Purchaser, directly or
indirectly, has material assets or operations, shall have issued a final
order, decree or ruling or taken any other final action restraining,
enjoining or otherwise prohibiting the Offer and such order, decree,
ruling or other action is or shall have become final and nonappealable;
or (iii) the Closing shall not have occurred on or before June 30, 1999.
7.3 Termination by Purchaser. This Agreement may be terminated
and the transactions contemplated hereby may be abandoned at any time
prior to the Closing Date, by action of the Board of Directors of
Purchaser, if (i) the Company shall have breached or failed to perform
in any material respect any of the covenants or agreements
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contained in this Agreement to be complied with or performed by the
Company prior to such date of termination which breach or failure shall
not have been cured prior to the earlier of (A) five business days
following the giving of written notice to the Company of such breach or
failure and (B) two business days prior to the date on which the Offer
is then scheduled to expire, or any representation or warranty of the
Company set forth in this Agreement shall have been inaccurate or
incomplete when made except for such failures to be complete or accurate
that, individually or in the aggregate, could not reasonably be expected
to have a material adverse effect on the financial condition,
properties, business or results of operations of the Company and its
subsidiaries taken as a whole or could prevent or materially delay the
transactions contemplated by this Agreement or impair the ability of
Purchaser, the Company or any of their respective affiliates, following
consummation of the Offer, to conduct any material business or
operations in any jurisdiction where they are now being conducted, (ii)
the Board of Directors of the Company (or a special committee thereof)
shall have amended, modified or withdrawn in a manner adverse to
Purchaser its approval or recommendation of the Offer or this Agreement
or the Board of Directors of the Company (or a special committee
thereof), upon request by Purchaser, shall fail to reaffirm such
approval or recommendation, or shall have endorsed, approved or
recommended any other Acquisition Proposal, or shall have resolved to do
any of the foregoing, or (iii) the Company or any of the other persons
or entities described in Section 5.2 shall take any actions that would
be proscribed by Section 5.2 but for the exception therein allowing
certain actions to be taken if required by fiduciary obligations under
applicable law as advised in writing by counsel.
7.4 Termination by the Company. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned at
any time prior to the Closing Date, by action of the Board of Directors
of the Company, (i) if Purchaser (x) shall have breached or failed to
perform in any material respect any of the covenants or agreements
contained in this Agreement to be complied with or performed by
Purchaser prior to such date of termination which shall not have been
cured prior to the earlier of (A) five business days following the
giving of written notice to Purchaser of such breach or failure and (B)
two business days prior to the date on which the Offer is then scheduled
to expire, or (y) shall have failed to commence the Offer within the
time required in Section 1.1, or (ii) if (w) the Company is not in
material breach of any of the terms of this Agreement, (x) the Board of
Directors of the Company authorizes the Company, subject to complying
with the terms of this Agreement, to enter into a binding written
agreement concerning a transaction that constitutes a Superior Proposal
and the Company notifies Purchaser in writing that it intends to enter
into such an agreement, attaching the most current version of such
agreement (which shall include all of the material terms, including the
price proposed to be paid for Shares pursuant thereto) to such notice,
(y) Purchaser does not make, within two business days of receipt of the
Company's written notification of its intention to enter into a binding
agreement for a Superior Proposal, an offer that the Board of Directors
of the Company determines, in good faith after consultation with its
financial advisors, is at least as favorable, from a financial point of
view, to the stockholders of the Company as the Superior Proposal and
(z) the Company, prior to such termination, pays to Purchaser in
immediately available funds the fees required to be paid pursuant to
Section 7.5(b).
7.5 Effect of Termination and Abandonment. (a) In the event of
the termination of this Agreement pursuant to this Article VII, no party
hereto (or any of its directors or officers) shall have any liability or
further obligation to any other party to this Agreement, except as
provided in Section 7.5(b) or (c) below and Section 8.2 and except that
nothing herein will relieve any party from liability for any willful
breach of this Agreement; provided, however, that if this Agreement is
terminated by Purchaser pursuant to Section 7.3(i) or the Company
pursuant to Section 7.4(i), the terminating party's rights to pursue all
legal remedies will survive such termination unimpaired; provided
further, however, that in no event shall the liability of the non-
terminating party exceed the sum of $75,000.
(b) If (i) (x) the Offer shall have remained open for a minimum
of at least 20 business days, (y) after the date hereof any corporation,
partnership, person, other entity or group (as defined in Section
13(d)(3) of the Exchange Act) other than Purchaser or any of its
subsidiaries or affiliates (collectively, a "Person") shall have become
the beneficial owner of 20% or more of the outstanding Shares after the
date of this Agreement or shall have publicly announced a proposal or
intention to make an Acquisition Proposal or any Person shall have
commenced, or shall have publicly announced an intention to commence, a
tender offer or exchange offer for 20% or more of the outstanding
Shares, and (z) the Minimum Condition (as defined in Annex A) shall not
have been satisfied and the
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<PAGE>
Offer is terminated without the purchase of any Shares thereunder, or
(ii) Purchaser shall have terminated this Agreement pursuant to Section
7.3(ii) or Section 7.3(iii) or (iii) the Company shall have terminated
this Agreement pursuant to Section 7.4(ii), then the Company shall
promptly, but in no event later than two days after the date of such
termination, reimburse Purchaser (not later than one business day after
request by Purchaser) for all of the attorneys' fees and other out-of-
pocket fees and expenses reasonably incurred by Purchaser in connection
with this Agreement and the transactions contemplated by this Agreement,
in each case payable by wire transfer in same day funds. The Company
acknowledges that the agreements contained in this Section 7.5(b) are an
integral part of the transactions contemplated in this Agreement, and
that, without these agreements, Purchaser would not enter into this
Agreement; accordingly, if the Company fails to promptly pay the amount
due pursuant to this Section 7.5(b), and, in order to obtain such
payment, Purchaser commences a suit which results in a judgment against
the Company for the fee set forth in this paragraph (b), the Company
shall pay to Purchaser its costs and expenses (including attorneys'
fees) in connection with such suit.
(c) If the Offer shall have been terminated prior to Closing by
Purchaser because the Minimum Condition shall not have been satisfied or
waived on or before the expiration date of the Offer (as such expiration
date may be required to be extended pursuant to Section 1.1(a)), then
Purchaser shall reimburse the Company for one-half of the amount paid by
the Company to the Financial Advisor within five business days after the
Company has made written demand to Purchaser therefor and delivered to
Purchaser documentation reasonably evidencing the amount of such
payment; provided, however, that Purchaser's reimbursement obligation
hereunder shall not exceed $15,000 in the aggregate. Purchaser
acknowledges that the agreements contained in this Section 7.5(c) are an
integral part of the transactions contemplated in this Agreement, and
that, without these agreements, the Company would not enter into this
Agreement; accordingly, if Purchaser fails to promptly pay the amount
due pursuant to this Section 7.5(c), and in order to obtain such
payment, the Company commences a suit which results in a judgment
against Purchaser for the fees set forth in this Section 7.5(c),
Purchaser shall pay to the Company its costs and expenses (including
reasonable attorneys' fees) in connection with such suit.
ARTICLE VIII
MISCELLANEOUS AND GENERAL
8.1 Payment of Expenses. Whether or not the purchase of Shares
pursuant to the Offer shall be consummated, each party hereto shall,
subject to Section 7.5(b), pay its own expenses incident to preparing
for, entering into and carrying out this Agreement and the consummation
of the purchase of Shares pursuant to the Offer.
8.2 Survival. The agreements of the Company and Purchaser
contained in Section 8.1 (Payment of Expenses) shall survive the
consummation of the purchase of Shares pursuant to the Offer. The
agreements of the Company and Purchaser contained in Sections 5.5
(Access), 5.9 (Availability of Financing), 7.5 (Effect of Termination
and Abandonment), 8.1 (Payment of Expenses), 8.6 (Governing Law), 8.7
(Notices), 8.8 (Severability), 8.9 (Entire Agreement, etc.), 8.10
(Parties in Interest), 8.11 (Definition of "Subsidiary") and 8.13
(Captions) shall survive the termination of this Agreement. All other
representations, warranties, agreements and covenants in this Agreement
shall not survive the consummation of the purchase of Shares pursuant to
the Offer or the termination of this Agreement.
8.3 Modification or Amendment. At any time prior to the Closing
Date, the parties hereto may modify or amend this Agreement, by written
agreement executed and delivered by duly authorized officers of the
respective parties.
8.4 Waiver of Conditions. The conditions to each of the
parties' obligations to consummate the purchase of Shares pursuant to
the Offer are for the sole benefit of such party and may be waived by
such party in whole or in part to the extent permitted by applicable
law.
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<PAGE>
<PAGE>
8.5 Counterparts. For the convenience of the parties hereto,
this Agreement may be executed in any number of counterparts, each such
counterpart being deemed to be an original instrument, and all such
counterparts shall together constitute the same agreement.
8.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri.
8.7 Notices. Any notice, request, instruction or other document
to be given hereunder by any party to the others shall be in writing and
delivered personally or sent by registered or certified mail, postage
prepaid, if to Purchaser, addressed to Purchaser at Dash Multi-Corp,
Inc., 2500 Adie Road, Maryland Heights, Missouri 63043, Attention:
Marvin S. Wool, Chief Executive Officer (with a copy to Thomas A. Litz,
Esq., Thompson Coburn LLP, One Mercantile Center, St. Louis, Missouri
63101); and if to the Company, addressed to the Company at R-B Rubber
Products, Inc., 904 E. 10th Avenue, McMinnville, Oregon 97128,
Attention: Ronald L. Bogh, Chief Executive Officer (with a copy to David
C. Baca, Esq., Davis Wright Tremaine LLP, 1300 SW Fifth Avenue, Suite
2300, Portland, Oregon, 97201-5682), or to such other persons or
addresses as may be designated in writing by the party to receive such
notice.
8.8 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule
of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated hereby
is not affected in any manner adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest
extent possible.
8.9 Entire Agreement, etc. This Agreement (including the
Disclosure Schedule and any exhibits or Annexes hereto) (a) constitutes
the entire agreement, and supersedes all other prior agreements,
understandings, representations and warranties both written and oral,
among the parties, with respect to the subject matter hereof, and (b)
shall not be assignable by operation of law or otherwise and is not
intended to create any obligations to, or rights in respect of, any
persons other than the parties hereto.
8.10 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in
this Agreement, express or implied, is intended to or shall confer upon
any other person any rights, benefits or remedies of any nature
whatsoever under or by reason of this Agreement.
8.11 Definition of "Subsidiary". When a reference is made in
this Agreement to a subsidiary of a party, the word "subsidiary" means
any corporation or other organization whether incorporated or
unincorporated of which at least a majority of the securities or
interests having by the terms thereof ordinary voting power to elect at
least a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such party or by any one
or more of its subsidiaries, or by such party and one or more of its
subsidiaries.
8.12 Captions. The Article, Section and paragraph captions
herein are for convenience of reference only, do not constitute part of
this Agreement and shall not be deemed to limit or otherwise affect any
of the provisions hereof.
[The remainder of this page is intentionally left blank.]
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto on the
date first hereinabove written.
R-B RUBBER PRODUCTS, INC.
By
Name: /s/ Ronald L. Bogh
---------------------------------
Title: President
--------------------------------
DASH MULTI-CORP, INC.
By
Name: /s/ Marvin S. Wool
---------------------------------
Title: Chief Executive Officer
--------------------------------
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<PAGE>
<PAGE>
ANNEX A
CERTAIN CONDITIONS OF THE OFFER. The capitalized terms used in
this Annex A have the meanings set forth in the attached Agreement.
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to Purchaser's obligation to pay for or return tendered Shares
promptly after termination or withdrawal of the Offer), pay for, or may
delay the acceptance for payment of or payment for, any tendered Shares,
or may, in its sole discretion, terminate or amend the offer as to any
Shares not then paid for if, (i) prior to the expiration of the Offer,
(x) a number of Shares which constitutes more than 30% of the voting
power (determined on a fully-diluted basis) of all the securities of the
Company entitled to vote generally in the election of directors or in
connection with a merger shall not have been validly tendered and not
withdrawn prior to the expiration of the Offer (the "Minimum Condition")
or (y) any consent, registration, approval, permit or authorization of
any Governmental Entity applicable to the Offer shall not have been
obtained on terms satisfactory to Purchaser in its reasonable judgment,
or (ii) on or after April 8, 1999, and at or before the time of payment
for any of such Shares (whether or not any Shares have theretofore been
accepted for payment), any of the following events shall occur:
(a) there shall have occurred (i) any general suspension
of, or limitation on prices for, trading in securities on the
Nasdaq SmallCap Market, (ii) a declaration of a banking moratorium
or any suspension of payments in respect of banks in the United
States, (iii) a commencement or escalation of a war, armed
hostilities or other international or national calamity directly
or indirectly involving the United States, other than the current
hostilities in Serbia and Kosovo, (iv) any limitation (whether or
not mandatory) by any Governmental Entity on, or any other event
which might affect, the extension of credit by banks or other
lending institutions, (v) a material change in United States or
any other currency exchange rates or a suspension of, or
limitation on, the markets therefor, (vi) or in the case of any of
the foregoing existing at the time of the commencement of the
Offer, a material acceleration or worsening thereof, or (vii) any
extraordinary or material adverse change in the market price of
the Shares or in the United States securities or financial markets
generally, including, without limitation, a decline of at least
20% in either the Dow Jones Average of Industrial Stocks or the
Standard & Poor's 500 index from the date of the Agreement;
(b) the Company shall have breached or failed to perform
in any material respect any of its obligations, covenants or
agreements contained in the Agreement or any representation or
warranty of the Company set forth in the Agreement shall have been
inaccurate or incomplete in any material respect when made or
thereafter shall become inaccurate or incomplete in any material
respect;
(c) there shall be threatened, instituted or pending any
Action before any court or other Governmental Entity by any
Governmental Entity or instituted or pending any Action by any
other person, domestic or foreign: (i) challenging the
acquisition by Purchaser of Shares, seeking to restrain or
prohibit the consummation of the transactions contemplated by the
Offer, seeking to obtain any material damages or otherwise
directly or indirectly relating to the transactions contemplated
by the Offer; (ii) seeking to prohibit, or impose any material
limitations on, Purchaser's ownership or operation of all or any
portion of its or the Company's business or assets (including the
business or assets of their respective affiliates and
subsidiaries), or to compel Purchaser to dispose of or hold
separate all or any portion of Purchaser's or the Company's
business or assets (including the business or assets of their
respective affiliates and subsidiaries) as a result of the
transactions contemplated by the Offer; (iii) seeking to make the
acceptance for payment, purchase of, or payment for, some or all
of the Shares illegal or render Purchaser unable to, or result in
a delay in, or restrict, the ability of Purchaser to, accept for
payment, purchase or pay for some or all of the Shares; (iv)
seeking to impose material limitations on the ability of Purchaser
effectively to acquire or hold or to exercise full rights of
ownership of the Shares including, without limitation, the right
to vote the Shares purchased by it on an equal basis with all
other Shares on all matters properly presented to the
stockholders; or (v) that, in any event, in the judgment of
Purchaser, is reasonably likely to have a material adverse effect
on the financial condition, properties, business or operations of
the Company or Purchaser (or any of their respective affiliates or
subsidiaries) or the value of the Shares to Purchaser or the
benefits expected to be derived by Purchaser as a result of
consummation of the transactions contemplated by the Offer;
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<PAGE>
(d) any statute, rule, regulation, order or injunction
shall be sought, proposed, enacted, promulgated, entered, enforced
or deemed or become applicable to the Offer or the Agreement, or
any other action shall have been taken, proposed or threatened, by
any court or other Governmental Entity that, in the judgment of
Purchaser, could be expected to, directly or indirectly, result in
any of the effects of, or have any of the consequences sought to
be obtained or achieved in, any Action referred to in clauses (i)
through (v) of paragraph (c) above;
(e) a tender or exchange offer for some portion or all of
the Shares shall have been commenced or publicly proposed to be
made by another person (including the Company or its
subsidiaries), or it shall have been publicly disclosed or
Purchaser shall have learned that (i) any person (including the
Company or its subsidiaries), entity or "group" (as defined in
Section 13(d) of the Exchange Act and the rules promulgated
thereunder) shall have become the beneficial owner (as defined in
Section 13(d) of the Exchange Act and the rules promulgated
thereunder) of more than 20% of any class or series of capital
stock of the Company (including the Shares) other than for bona
fide arbitrage purposes or (ii) any person, entity or group shall
have entered into a definitive agreement or an agreement in
principle or made a proposal with respect to a tender offer or
exchange offer for some portion or all of the Shares or a merger,
consolidation or other business combination with or involving the
Company;
(f) any change shall have occurred (or any development
shall have occurred involving a prospective change) or Purchaser
shall have become aware of any fact (including, but not limited
to, any such change) that has had, or is reasonably likely to
have, a material adverse effect on the financial condition,
properties, business or results of operations of the Company and
its subsidiaries taken as a whole;
(g) the Board of Directors of the Company (or a special
committee thereof) shall have amended, modified or withdrawn its
approval or recommendation of the Offer, or the Agreement, or
shall have failed to publicly reconfirm such approval or
recommendation upon request by Purchaser, or shall have endorsed,
approved or recommended any other Acquisition Proposal, or shall
have resolved to do any of the foregoing; or
(h) the Agreement shall have been terminated by the
Company or Purchaser in accordance with its terms or Purchaser
shall have reached an agreement or understanding in writing with
the Company providing for termination or amendment of the Offer or
delay in payment for the Shares;
which, in the sole judgment of Purchaser, in any such case, and
regardless of the circumstances (including any action or inaction by
Purchaser) giving rise to any such conditions, makes it inadvisable to
proceed with the Offer and/or with such acceptance for payment of or
payment for Shares.
The foregoing conditions are for the sole benefit of Purchaser and
may be asserted by Purchaser regardless of the circumstances (including
any action or inaction by Purchaser) giving rise to such condition or
may be waived by Purchaser, by express and specific action to that
effect, in whole or in part at any time and from time to time in its
sole discretion. Any determination by Purchaser concerning any event
described in this Annex A shall be final and binding upon all parties.
The failure by Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right, the waiver of any
such right with respect to particular facts and other circumstances
shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that
may be asserted at any time and from time to time.
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<PAGE>
EXHIBIT D
OPINION OF PACIFIC CREST SECURITIES
DATED
APRIL 8, 1999
(ATTACHED)
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<PAGE>
April 8, 1999
Board of Directors
R-B Rubber Products, Inc.
c/o David C. Baca, Esq.
Davis Wright Tremaine LLP
Suite 2300
1300 Southwest Fifth Avenue
Portland, Oregon 97201-5682
Ladies and Gentlemen:
You have asked us to advise you with respect to the fairness to the
common shareholders of R-B Rubber Products, Inc. ("RBBR" or the
"Company"), from a financial point of view, of the acquisition
("Acquisition") of 70% of the common stock of RBBR for $3.00 net cash
per share ("Consideration") by Dash Multi-Corp, Inc. ("Dash") as
provided in its Letter of Intent dated March 11, 1999.
Pacific Crest Securities is an investment banking firm that performs
financial advisory services. We have acted as financial advisor to the
Board of Directors in connection with the Acquisition and will receive a
fee for our services
In arriving at our opinion, we have reviewed certain publicly available
business and financial information relating to the Company. We have
reviewed certain other information, including financial forecasts,
provided to us by the Company, and have met with the Company's
management to discuss the business and prospects of the Company.
We have considered certain financial data of the Company, and compared
the data with similar data for publicly held companies with similar
operations. Additionally, we have considered the financial terms of
certain other business combinations in the rubber and plastic
manufacturing industries that have recently been effected. We have
considered certain pro forma financial information of the Company. We
also considered such other information, financial studies, analyses and
investigations and financial, economic and market criteria that we
deemed relevant.
In connection with our review, we have not independently verified any of
the foregoing information and have relied on its being complete and
accurate in all material respects. With respect to the financial
forecasts, we have assumed that they have been reasonably prepared on
bases reflecting the best currently available estimates and judgments of
the Company's management as to the future financial performance of the
Company. In addition, we have not made an independent evaluation or
appraisal of any of the assets of the Company or the operating
performance, financial condition and management capabilities of Dash.
We were retained by the Board of Directors of the Company and our
opinion as expressed herein is limited to the fairness, from a financial
point of view to the common stockholders of the Company, of the
Acquisition and does not address the Company's underlying business
decision to proceed with the Acquisition. Our opinion is necessarily
based on conditions as they exist and can be evaluated on the date
hereof and the information made available to us through the date hereof.
This letter does not constitute a recommendation to the Board of
Directors or to any common stockholder of the Company with respect to
any approval of the Acquisition.
We agree to the inclusion of this opinion letter in the
Solicitation/Recommendation Statement relating to the Acquisition. The
opinion may not, however, be summarized, excerpted from or otherwise
publicly referred to without our prior written consent.
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<PAGE>
Based upon and subject to the foregoing, it is our opinion that, as of
the date hereof, the Consideration is fair to the common stockholders of
the Company from a financial point of view.
Very truly yours,
PACIFIC CREST SECURITIES INC.
By: /s/ Terrence J. Schallich
-------------------------
Terrence J. Schallich
Vice President
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<PAGE>
EXHIBIT E
INFORMATION STATEMENT
<PAGE>
<PAGE>
R-B RUBBER PRODUCTS, INC.
904 EAST 10TH AVENUE
MCMINNVILLE, OREGON 97128
(503) 472-4691
---------------------------
INFORMATION STATEMENT PURSUANT TO
SECTION 14(f) OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14f-1 PROMULGATED THEREUNDER
---------------------------
NO VOTE OR OTHER ACTION OF THE SECURITY HOLDERS IS REQUIRED IN
CONNECTION WITH THIS INFORMATION STATEMENT. NO PROXIES ARE BEING
SOLICITED AND YOU ARE REQUESTED NOT TO SEND THE COMPANY A PROXY.
This Information Statement is being mailed on or about April 19,
1999 as part of the Solicitation/Recommendation Statement on Schedule
14D-9 of R-B Rubber Products, Inc. to holders of record of the Company's
common stock, no par value (the "Shares"). Unless otherwise defined
herein, capitalized terms used in this Information Statement shall have
the meanings ascribed in the Schedule 14D-9. You are receiving this
Information Statement in connection with the possible appointment of
persons designated by Dash Multi-Corp., Inc. ("Dash") to seats on the
Company's Board (the "Board"). This Information Statement is required by
Section 14(f) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and Rule 14f-1 promulgated thereunder. You are urged to
read this Information Statement carefully. YOU ARE NOT, HOWEVER,
REQUIRED TO TAKE ANY ACTION. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in the accompanying
Schedule 14D-9.
Pursuant to the Stock Purchase Agreement, Dash commenced the Offer
on April 14, 1999. The Offer is scheduled to expire at 12:00 midnight,
Central Daylight Time, on May 12, 1999, unless Dash extends the Offer in
accordance with the Stock Purchase Agreement. The Offer is conditioned
on a minimum number of the outstanding Shares being tendered for cash
pursuant to the Offer such that, upon completion of the Offer, Dash will
own at least 70% of the outstanding Shares. The Offer is also subject to
certain other conditions summarized in the Schedule 14D-9, and described
fully in the Stock Purchase Agreement attached as Exhibit C thereto.
Upon the expiration of the Offer, if all conditions of the Offer have
been satisfied or waived, Dash has agreed to purchase all Shares validly
tendered pursuant to the Offer and not withdrawn, up to a maximum of
1,567,417 Shares. In the event fewer than the minimum number of Shares
are tendered, the Company shall, upon request by Dash, issue additional
Shares to Dash at a price of $3.00 per Share. If stockholders tender
more than the maximum number of Shares, Dash will purchase the maximum
number of Shares from tendering stockholders on a pro rata basis.
The information contained in this Information Statement concerning
Dash and its nominees to serve as directors has been furnished to the
Company by Dash. The Company assumes no responsibility for the accuracy
or completeness of such information.
<PAGE>
<PAGE>
The Stock Purchase Agreement provides that immediately following
the Closing, the Company will be required to make reasonable efforts to
permit Dash to designate up to four persons to serve on the Company's
Board of Directors (the "Dash Designees"). The Dash Designees will
abstain from any action proposed to be taken by the Company to amend or
terminate the Stock Purchase Agreement or to waive any action by Dash.
Such actions will be effective only with the approval of a majority of
the remaining directors. The Company's obligations to appoint the Dash
Designees is subject to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder.
INFORMATION WITH RESPECT TO THE COMPANY
The outstanding voting securities of the Company as of April 8,
1999 consisted of 2,239,167 Shares. Each Share is entitled to one vote.
The Company also has reserved 162,500 shares for issuance under
outstanding stock options pursuant to its 1995 Stock Option Plan (the
"Stock Option Plan"), and an aggregate of 95,000 shares reserved for
issuance pursuant to a warrant to Paulson Investment Company, Inc.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 8, 1999, certain
information furnished to the Company with respect to the ownership of
Shares by (i) each director; (ii) the Chief Executive Officer; (iii) the
"Named Executive Officer" (as defined below under "Executive
Compensation") other than the Chief Executive Officers; (iv) all persons
known by the Company to be beneficial owners of more than 5% of the
Shares; and (v) all executive officers and directors as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED<F1>
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES PERCENT
<S> <C> <C>
Ronald L. Bogh<F2>, <F3> 601,300 26.9%
Douglas C. Nelson<F2>, <F4> 416,000 18.8%
James V. Reimann<F2>, <F5> 55,000 2.5%
Edward DeRaeve<F2>, <F6> 37,500 1.7%
Kerry K. Brown<F2>, <F6> 14,500 <F*>
All directors and executive officers as a group (6 persons)<F7> 1,167,766 51.1%
<FN>
<F*> Less than 1%.
<F1> Applicable ownership percentage is based on 2,239,167 Shares
outstanding as of April 8,
<PAGE>
<PAGE>
1999, together with applicable options for such shareholders.
Beneficial ownership is determined in accordance with the rules of
the Commission and includes voting and investment power with
respect to the Shares.
<F2> The address for this person is 904 East 10th Avenue, McMinnville,
Oregon 97128.
<F3> Includes 47,520 Shares held by Mr. Bogh's children for which Mr.
Bogh has sole voting power pursuant to a voting agreement dated
April 15, 1995.
<F4> Includes 9,000 Shares held by Mr. Nelson's wife for which Mr.
Nelson is deemed to be the beneficial owner, but over which Mr.
Nelson disclaims voting and disposition power.
<F5> Includes 2,500 Shares held by Mr. Reimann's wife, 5,000 Shares
held by the JVR, Inc., Pension & Profit Sharing Plan and 7,500
Shares subject to options granted pursuant to the Stock Option
Plan and exercisable within sixty days of April 8, 1999.
<F6> Includes 7,500 Shares subject to options granted pursuant to the
Stock Option Plan and exercisable within sixty days of April 8,
1999.
<F7> Includes 54,166 Shares subject to options granted pursuant to the
Stock Option Plan and exercisable within sixty days of April 8,
1999.
</TABLE>
CHANGES IN CONTROL
No change in control of the registrant has occurred as of the date
of this filing.
The Offer is described in the Current Report on Form 8-K filed by
the Company with the Commission on April 13, 1999, in the Schedule 14D-1
filed by Dash with the Commission as of April 13, 1999 and the exhibits
incorporated therein, and in the Amended Schedule 14D-9 filed by the
registrant with the Commission as of April 19, 1999 and the exhibits
incorporated therein. The Schedule 14D-9 and the Schedule 14D-1 are
collectively referred to herein as the "Regulatory Filings." The
Regulatory Filings are being made available to the stockholders of
the registrant by mail and are otherwise available on request from
the offices of the registrant or Dash.
If the Tender Offer is consummated as described in the Stock
Purchase Agreement and the Regulatory Filings, a change in control of
the registrant will occur as described therein. The persons acquiring
control; the amount of consideration used by those persons; the basis of
control; the percentage of voting securities of the registrant to be
acquired by the persons acquiring control; and the identity of the
persons from whom control would be assumed, are described in the
Regulatory Filings. The source of funds used for the acquisition of
control is the cash reserves of Dash.
DIRECTORS AND EXECUTIVE OFFICERS
DASH DESIGNEES
The Stock Purchase Agreement provides that the following persons
have been selected as Dash Designees. The following sets forth certain
information with respect to the Dash Designees
<PAGE>
<PAGE>
based on information in the Offer to Purchase and otherwise based on
information supplied to the Company by Dash, including their names,
ages, principal occupations for the past five years, and their
directorships with other corporations.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME AGE AND FIVE-YEAR EMPLOYMENT HISTORY
<C> <C> <S>
Marvin S. Wool 70 Director, Chief Executive Officer and Chairman of the Board of
Dash since 1973. Mr. Wool is also a director of Allegiant
Bancorp, Inc. Mr. Wool's principal place of business is
located at 2500 Adie Road, Maryland Heights, Missouri 63043.
Gregory J. Divis 58 Director of Dash since 1988. Senior Vice President --
Subsidiaries of Dash since 1995. Vice President --
Subsidiaries of Dash from 1990 to 1995. Mr. Divis' principal
place of business is located at 2500 Adie Road, Maryland
Heights, Missouri 63043.
Paul Gilson 51 Senior Vice President, Chief Operating Officer and Secretary
of the Company since 1996. Secretary and Treasurer of the
Company 1995-1996. Vice President of Operations of the Company
1990-1995. Mr. Gilson's principal place of business is located
at 904 East 10th Avenue, McMinnville, Oregon 97128.
Sandon Wool 45 Director of Dash since 1980. Vice President and Secretary of
Dash, since 1994. President of Dash's MarChem Corp. subsidiary
since 1997. Vice President of Dash's MarChem Corp. subsidiary
from 1994 to 1997.
Lawrence J. Young 54 Retired Chairman and Chief Executive Officer of Angelica
Corporation (textile and uniform rental, laundry and sales).
Served as Chairman and Chief Executive Officer of Angelica
Corporation (1990 to July 1997) and as Executive Vice President
of Angelica Corporation from August 1997 to June 1998.
</TABLE>
CURRENT DIRECTORS
The following table sets forth, as of April 8, 1999, the ages and
certain other information with respect to the current directors of the
Company.
<TABLE>
<CAPTION>
NAME AGE DIRECTOR
SINCE
<S> <C> <C>
Ronald L. Bogh 55 1985
Jerry K. Brown 50 1994
Edward DeRaeve 46 1995
Douglas C. Nelson 60 1988
James V. Reimann 58 1994
</TABLE>
RONALD L. BOGH founded the Company in 1985 and was named President
of the Company at that time. He became Chairman of the Board in 1995 and
Chief Executive Officer in 1996.
<PAGE>
<PAGE>
JERRY K. BROWN is an attorney and the sole shareholder in the law
firm of Jerry K. Brown, P.C., in McMinnville, Oregon. Mr. Brown is a
member of the Compensation Committee.
EDWARD DERAEVE is the owner of D-N-D Electrical in McMinnville,
Oregon, which he founded in 1984. Mr. DeRaeve is a member of the
Compensation Committee.
DOUGLAS C. NELSON joined the Company in 1988 as Director,
Executive Vice President -- Finance, and Chief Financial Officer. In May
1996 he was named Vice Chairman of the Board. In January 1998 he was
named Vice Chairman of the Board and ceased to be an employee of the
Company.
JAMES V. REIMANN is President of JVR, Inc., a real estate
brokerage and development company. He is also Vice President and a real
estate broker at Pacific Management, Inc., an Oregon corporation
specializing in property management. Mr. Reimann is a member of the
Compensation Committee.
Mr. Sandon Wool is the son of Mr. Marvin S. Wool. Otherwise, there
are no family relationships among any of the Company's officers or directors.
MEETINGS OF THE BOARD; COMMITTEES
The Board of Directors held 5 regular and 4 special meetings
during the calendar year ended April 8, 1999. The Board has a
Compensation Committee consisting of Messrs. Brown, DeRaeve and
Reimann; the Compensation Committee holds regular meetings annually.
EXECUTIVE OFFICERS
The following table identifies the current executive officers of
the Company, the positions in which they serve, and the year in which
they began serving in their respective capacities. Officers of the
Company are elected by the Board at the meeting of the Board of
Directors immediately following the annual meeting of the stockholders
to hold office until their successors are elected and qualified.
<TABLE>
- --------------------------------------------------------------------------------------------------
<CAPTION>
NAME AGE CURRENT POSITION POSITION HELD SINCE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ronald L. Bogh 55 Chairman of the Board, President 1996
and Chief Executive Officer
- --------------------------------------------------------------------------------------------------
Paul M. Gilson 51 Senior Vice President, 1998
Chief Operating Officer and Secretary
- --------------------------------------------------------------------------------------------------
</TABLE>
For biographical information of Mr. Bogh, see "Directors," above.
For biographical information of Mr. Gilson, see "Dash Nominees," above.
<PAGE>
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
During 1998 the Company paid a total of $206,947 to a contracting
firm owned by Mr. DeRaeve, a Director of the Company, for capital
improvements to its plant. The Company also paid $2,255 to Mr. Brown, a
Director and an attorney, for legal services he provided to the Company.
To the best knowledge and belief of the Company all related party
transactions were conducted at arms' length rates and conditions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that the Company's
executive officers and directors, and persons owning more than ten
percent of any class of the Company's registered securities file reports
of ownership and changes in ownership with the Commission ("SEC") and
the National Association of Securities Dealers, Inc. Executive officers,
Directors and greater than ten percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms
they file. Based solely on its review of the copies of such forms
received by it, or written representations from certain reporting
persons, the Company believes that, for the fiscal year ended December
31, 1998, all executive officers, Directors and greater than 10%
shareholders complied with all applicable filing requirements except for
the following: Mr. Doug Nelson, a Director of the Company, failed to
timely file two reports on Form 4, Statement of Changes in Beneficial
Ownership, relating to the sale of shares, and Mr. Bogh, an officer and
Director of the Company and Mr. Reimann, a Director of the Company each
failed to timely file one report on Form 4, Statement of Changes in
Beneficial Ownership, relating to the sale of shares.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information
concerning compensation awarded to, earned by or paid to the Company's
Chief Executive Officer and other executive officers of the Company
whose total annual salary and bonus exceeded $100,000 (collectively, the
"Named Executive Officers") for fiscal years 1998, 1997 and 1996.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL COMPENSATION
STOCK
OTHER ANNUAL OPTIONS ALL OTHER
NAME YEAR SALARY BONUS COMPENSATION GRANTED COMPENSATION
<S> <C> <C> <C> <C> <C> <C>
Ronald L. Bogh<F1> 1998 $140,184 2,008
1997 140,184 6,378
1996 140,184 6,961
<PAGE>
<PAGE>
<FN>
<F1> Amounts include Company-paid premiums on a life insurance
policy benefiting Mr. Bogh.
<F2> No other individuals earned more than $100,000 in 1998, 1997
or 1996.
</TABLE>
STOCK OPTIONS
There were no stock options granted under the Company's 1995 Stock
Option Plan during 1998 to the Named Executive Officer. The Named
Executive Officer did not exercise any stock options during 1998, nor
does he hold any stock options at December 31, 1998.
EMPLOYMENT AND CHANGE IN CONTROL AGREEMENTS
TERMINATION AGREEMENT
In January 1998, the Company signed a Non-Competition, Price
Guaranty and Release Agreement (the "Guaranty and Release Agreement")
with Mr. Doug Nelson, the Company's former Chief Financial Officer. Mr.
Nelson remains on the Board of Directors. Pursuant to the Guaranty and
Release Agreement, the Company is required to pay Mr. Nelson an amount
equal to the difference between the gross selling price per share of the
Company's Common Stock for up to 2,000 shares per month and $4.00 per
share for each share sold at less than $4.00 per share. The maximum
amount that the Company is obligated to pay Mr. Nelson is $59,000 in any
given calendar year. As of December 31, 1998, Mr. Nelson held 420,000
shares of the Company's Common Stock. During 1998, Mr. Nelson sold
21,000 shares of the Company's common Stock and the Company paid Mr.
Nelson a total of $10,875 during 1998 under the Guaranty and Release
Agreement. The Guaranty and Release Agreement was amended to allow Mr.
Nelson to sell an additional 3,000 shares thereunder during 1999. The
maximum amount to be paid to Mr. Nelson under the Guaranty and Release
Agreement in 1999 remains at $59,000.
The Company has no other employment contracts or termination
agreements with any of its executive officers.
In the event of a change in control of the Company, unless
otherwise determined by the Board of Directors prior to the occurrence
of such change in control, any options or portions of such options
outstanding as of the date such change in control is determined to have
occurred, that are not yet fully vested on such date, shall become
immediately exercisable in full. The Board has determined not to
accelerate the vesting of stock options that otherwise would result from
this change in control.
<PAGE>
DIRECTOR COMPENSATION
Non-employee, non-salaried directors receive $250 per meeting they
attend where official Board action is taken, including special meetings,
annual meetings and telephonic meetings, plus out-of-pocket expenses
associated with attending such meetings. In addition, Mr. Nelson
received $3,613 for health insurance premiums and $2,701 for life
insurance premiums paid by the Company for Mr. Nelson's benefit.
Employee, salaried directors receive no additional compensation beyond
their salaries for attending any Board meetings.
SUBMITTED BY THE BOARD OF DIRECTORS
Ronald L. Bogh
Jerry K. Brown
Edward DeRaeve
Douglas C. Nelson
James V. Reimann
<PAGE>
<PAGE>
EXHIBIT F
FORM OF EMPLOYMENT AGREEMENT OF MR. BOGH
<PAGE>
<PAGE>
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of the _____ day of __________
1999, by and between RB RUBBER PRODUCTS, INC. (hereinafter referred to
as "Employer" and which, together with its parent company, Dash Multi-
Corp, Inc., and any other subsidiaries of Dash Multi-Corp, Inc., are
called the "Company" herein) and RONALD BOGH (hereinafter referred to as
"Employee").
WHEREAS, The Company is desirous of having Employee employed by
Employer in an executive capacity and Employee wishes to be employed by
Employer in such capacity;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties hereto mutually agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee in an
executive capacity, and Employee hereby accepts such
employment and agrees to perform for Employer the duties
described herein, faithfully, diligently and to the best of
his ability. Employee will be employed to act as the
President of Employer.
2. TERM OF EMPLOYMENT. Employee's employment hereunder shall
become effective on the _____ day of _______________ 1999
and shall have a term of three (3) years. Upon mutual
agreement between Employee, Employer and Company, said
Agreement may be extended beyond the term of employment in
Paragraph 2. All employment under this Agreement shall be
subject to the Termination provisions of Paragraph 9
hereunder.
3. DUTIES. Employee agrees to devote his time and attention to
the business and affairs of Employer and to use his best
efforts to promote the interests of Employer as directed by
the Employer, with direction from or as assigned by the
Company. Employee agrees to carry out such duties as
required to perform his job, assigned or directed by
Employer or Company, or mutually agreed on between Employee,
Employer and Company.
4. COMPENSATION.
(a) Employer will pay Employee for services rendered
hereunder as President with a compensation at the rate
of: (i) Year One, one hundred sixty thousand eight
hundred dollars and no cents ($160,800.00) per annum;
(ii) Year Two, one hundred seventy thousand four
hundred dollars and no cents ($170,400.00) per annum;
Year Three, one hundred eighty thousand dollars and no
cents ($180,000.00) per annum; payable in equal
monthly installments, at the end of each month.
(b) The compensation rate described in Section 4(a) may be
increased at the sole discretion of the Employer, as
directed by the Company.
(c) In addition to the compensation in Section 4(a) of
this Agreement, Employee, while employed by Employer
pursuant to this Agreement, shall be provided with the
use of a company owned vehicle and reimbursement of
all expenses in connection with the use of the
aforementioned vehicle. In return, Employee agrees to
comply with all policies and procedures of the
Employer for use of said vehicle and expenses. Upon
termination of this Agreement, Employee has the right
to purchase the company owned vehicle at the then
prevailing book value.
<PAGE>
<PAGE>
(d) Payments to Employee pursuant to this Agreement shall
be subject to any applicable Federal, State and Local
withholdings.
5. BENEFITS. During the term of this Agreement, Employer shall
furnish to Employee:
(a) Medical and Health Care Coverage as provided to the
employees of the Employer under the terms and
conditions of those Plans as they currently exist, or
may exist from time to time during the term of this
Agreement.
(b) Life Insurance as provided to the employees of the
Employer under the terms and conditions of those Plans
as they currently exist or may exist from time to time
during the term of this Agreement.
(c) Current Life Insurance Policies with The Guardian Life
Insurance Company under policy numbers 3326661,
3340193, 3363011, and 3388094, will continue in force
under their current terms and conditions. Employer
guarantees that upon attaining age sixty-five (65),
Employee will have a cash value for these policies of
one hundred fifty thousand dollars ($150,000.00),
including the value of any Employee loans.
(d) Employer, as directed by the Company, has the right to
terminate life insurance policies 3908036 and 3913470
issued by The Guardian Life Insurance Company, upon
thirty (30) days written notice to Employee. Prior to
the expiration of this thirty (30) day notice period,
Employee has the option of assuming the ownership and
premium payments for the aforementioned life insurance
policies.
(e) Employer to pay Michelbook Country Club monthly dues
for a period of three (3) years commencing on _____
day of ________________ 1999 with a current cost of
one hundred seventy-seven dollars ($177.00) per month.
(f) Terms and Conditions of any and all benefits now
provided or may be provided are at the sole discretion
of the Employer as directed by the Company. The
Employer, with the consent and direction of the
Company, maintains the right to modify, add to, or
terminate these programs at any time. Provided that
changes to (a) and (b) are done judiciously, and (c)
and (e) with comparable benefits.
6. BONUS. Company to provide a "Base Return Plan" patterned
after the other Company subsidiaries (attached Addendum A).
In the event Employee is terminated under the conditions set
forth in Section 9 of this Agreement, Employee shall
participate in the "Base Return Plan" for the year of
termination. In such circumstances, Employee would receive
a pro rated share based on the total number of months
employed during the Base Return Year of termination. Should
Employee be deceased during a Base Return Year, Employer
will assume Employee worked the full Base Return Year. Base
Return Year is defined as the Employer's fiscal year.
7. EXPENSES. Employer will reimburse Employee for all
reasonable expenses properly incurred by Employee in
furtherance of or in connection with the business of
Employer, upon submission of such vouchers, received or
other evidence as may reasonably be required by Employer or
Company.
8. CONFIDENTIALITY AGREEMENT.
On or before ______ day of _____________ 1999, Employee will
duly execute a mutually agreed upon Confidentiality
Agreement between the Employee and Employer (attached
Addendum B). Both Employee and Employer agree that said
Confidentiality Agreement when executed shall stand alone,
and shall be performed in accordance with its own terms and
provisions, and that the obligations of
<PAGE>
<PAGE>
Employee under said Confidentiality Agreement shall not be
affected in any way by the termination of this Agreement.
9. TERMINATION. Upon furnishing of notice to the Employee, the
Employer at the direction of the Company may terminate the
employment of the Employee for cause, as determined by the
Employer or Company at their discretion, at any time during
the Employment period by reason of the Employee's (i)
neglect of his duties hereunder, (ii) breach of or
negligence with respect to his obligations under this
Agreement, (iii) engaging in misconduct deemed inconsistent
with the Employer's best interest, (iv) the Employee's
commission of an act constituting common law fraud or a
felony, or (v) the entering a plea of nolo contendere to a
charge of a felony or a misdemeanor involving moral
turpitude.
10. MODIFICATION AND CONSTRUCTION. This Agreement embodies the
entire Agreement between the parties and there have not been
and are no agreements, representations or warranties between
the parties other than those set forth or provided for
herein. The paragraph headings in this Agreement are
inserted for convenience only. This Agreement shall not be
changed or modified in whole or in part except by a
supplemental written agreement signed by both parties. The
failure by any party to insist upon strict compliance by the
other party with respect to any of the terms or conditions
hereof shall not be deemed a waiver of any such term or
condition, nor shall any waiver or relinquishment of any
right or power hereunder, at one or more times, be deemed a
waiver or relinquishment of such right or power at any other
time or times. This Agreement shall be governed and
construed by the laws of the State of Oregon, without
reference to choice of law principles.
11. TERMINATION OF AGREEMENT. Upon termination of this
Agreement for any reason by either party, whether before the
expiration date or by death, the Employment Agreement for
position of business technician (attached Addendum C) shall
immediately become in full force and effect without delay.
12. POLICIES. Employee agrees to comply with all current
policies and procedures of the Employer that exist for the
employees of the Employer or may exist for the employees of
the Employer during the term of this Agreement. Employee
further agrees to comply with all policies and procedures as
directed or assigned by Company during the term of this
Agreement.
13. SEVERABILITY. The invalidity or un-enforceability of a
particular provision of this Agreement shall not affect the
other provisions hereof, and this Agreement shall be
enforced in all respects to the fullest extent permitted by
applicable law.
14. ASSIGNMENT, BENEFIT AND BINDING EFFECT. This Agreement
shall not be assignable by RB Rubber Products except that
Dash may assign this Agreement to any of its subsidiaries,
whether current or hereafter acquired or formed; provided,
however, no such assignment shall require Employee to
relocate as long as RB Rubber Products is a functioning
operation in McMinnville, Oregon. Upon proper assignment
all of the rights and obligations of RB Rubber Products
shall inure to the benefit of and be binding upon such
subsidiary in place of RB Rubber Products, which shall
thereupon be released therefrom. This Agreement shall inure
to the benefit of and be binding upon RB Rubber Products,
its successors and assigns, and Employee, his heirs, legal
representatives and assigns.
* * * * * * * * * * *
<PAGE>
<PAGE>
RB RUBBER PRODUCTS, INC.
ATTEST:
BY:_______________________________
_______________________________
Secretary
EMPLOYEE
[SEAL]
__________________________________
Ronald Bogh
Employment Agreement for Ronald Bogh signature page
page 4 of 4
<PAGE>
<PAGE>
ADDENDUM A
RB RUBBER PRODUCTS, INC.
BASE RETURN PLAN
25%, 30%, 35%
I. 25%
PTP = Pre Tax Profit
BRL = Base Return Level (Assigned By Company)
B = Bonus
BE = Employee Performance Bonus
Be = All employees (including Employee)
B = 0.25[(PTP - BRL) - B]
B = 0.25(PTP - BRL) - 0.25B
1.25B = 0.25(PTP - BRL)
B = 0.20(PTP - BRL)
B = BE + Be
BE = 0.05(PTP - BRL)
Be = 0.15(PTP - BRL)
II. 30%
Maximum amount of Bonus for Employee under formula "Be" in
aforementioned I.
III. 35%
Maximum percentage that Base Return Level can increase for the next
year.
<PAGE>
<PAGE>
ADDENDUM B
RB RUBBER PRODUCTS, INC.
CONFIDENTIALITY AGREEMENT
In consideration of my employment or continued employment in any
capacity by RB Rubber Products, Inc. (which together with any
subsidiaries of Dash Multi-Corp are called the "Company" herein) and in
consideration of the salary, wages or other compensation paid for my
services in the course of such employment, I agree:
(A) To communicate promptly to the Company all inventions,
discoveries and improvements (whether or not they are patentable)
conceived or reduced to practice by me, solely or in collaboration with
others, from the time of entering the Company's employ until I leave,
(1) which are useful in the business, work or investigations of the
Company, or (2) which result from or are suggested by any work which I
may do for or on behalf of the Company. If an application for patent
for any such invention, discovery or improvement be made by me within
six (6) months after I leave the Company's employ, such invention,
discovery or improvement shall be presumed to have been conceived during
the period of my employment.
(B) To assist the Company during and subsequent to such
employment in every proper way (without charge to the Company but at its
expense) to obtain patents or otherwise protect such inventions,
discoveries and improvements in any and all countries against
appropriation by others; all such inventions, discoveries and
improvements (whether patented or not) and any patents that may issue
thereon to be the sole and exclusive property of the Company and being
hereby assigned thereto; and for the purpose of this clause to execute
and do all such documents, acts and things as the Company may deem
necessary or desirable.
(C) To make and maintain adequate and current written records of
all such inventions, discoveries and improvements, in the form of notes,
sketches, drawings, or reports relating thereto, which records shall be
and remain the property of and available to the Company at all times.
(D) Except as the Company may otherwise consent in writing not
to disclose or to discuss with others outside the Company at any time
(except as my company duties may require) during my employment, any
information, knowledge or data of a confidential nature I may receive
during the course of my employment relating to the Company's and/or the
Company's customers' business procedures, formulae, methods, machines,
manufactures, compositions, inventions, discoveries, improvements or
other matters of a confidential nature. (The aforesaid term
"confidential" is used in its ordinary sense and does not refer to any
governmental security classification.)
<PAGE>
<PAGE>
(E) To notify the Company in writing before I make any
disclosure or perform or cause to be performed any work for or on behalf
of the Company which appears to threaten conflict with:
(1) rights I claim in any invention, discovery, or improvement -
(a) made by me or others prior to my employment, or
(b) otherwise outside the scope of this agreement
(2) rights of others arising out of obligations incurred by me -
(a) prior to this agreement, or
(b) otherwise outside the scope of this agreement
In the event of my failure to give notice under the circumstances
specified in (1) of the foregoing, the Company may assume that no such
conflicting invention, discovery or improvement exists, and I agree that
I will make no claim with respect thereto.
(F) During and after termination (for any reason) of my
employment with the Company, for a period of one (1) year from the time
my employment with the Company ceases, I will maintain the
confidentiality of trade secrets, customer lists, technical data and
other information not in the public domain obtained from or made
available to me by the Company and/or customers and/or suppliers of the
Company in the course of my employment by the Company; and I will not
utilize such information for my individual gain or benefit.
Furthermore, I agree to indemnify and hold harmless the Company against
any legal liability or damages suffered by it as a result of my breach
of this clause or clause (D) above.
(G) During and after termination (for any reason) of my
employment with the Company, I will not, whether through any individual,
firm or corporation, or otherwise, become engaged in the development,
sales, marketing or management for any individual, firm, or corporation
engaged in the development, manufacture or sales of products similar to
those developed, manufactured, or sold by the Company for a period of
three (3) years from the time my employment with the Company ceases.
(H) I acknowledge that (a) the separate and distinct promises in
this Agreement are reasonable and necessary in order to protect the
Company's legitimate business interest; (b) any violation would result
in irreparable injury to the Company; and (c) the enforcement of a
remedy by way of injunction would not prevent me from earning a living.
In the event the Company incurs expenses to retain attorneys to enforce
this Agreement, I promise to pay all costs, court costs, fees and
expenses of enforcement, including actual attorneys fees, whether or not
litigation be commenced.
<PAGE>
<PAGE>
(I) It is the intention of the parties to restrict my activities
only to the extent necessary for the protection of the Company's
legitimate business interest. If any one or more of the promises
contained in this Agreement shall for any reason be held to be
excessively broad as to time, activity or subject, it shall be construed
by limiting and reducing it so as to be enforceable to the extent
compatible with the applicable law.
(J) The Company's failure to exercise any of its rights in the
event I breach any of the separate and distinct promises in this
Agreement shall not be construed as a waiver of such breach or prevent
the Company from later enforcing strict compliance with any and all
promises in this Agreement.
(K) In the event any one or more provisions contained in this
Agreement or any application shall be invalid, illegal, or unenforceable
in any respect, the validity, legality or enforceability of the
remaining provisions of this Agreement and any other application shall
not in any way be affected or impaired.
(L) This Agreement is binding upon and shall benefit the
Company, its successors and assigns, and my heirs, executors,
administrators and legal representatives.
(M) The Agreement contains the parties' complete understanding,
and there are no other agreements, oral or written, pertaining to the
subject matter of this Agreement. Any amendments to this Agreement must
be in writing and signed by the parties.
(N) In order to preserve the Company's rights under this
Agreement, the Company may advise any third party with whom I may
consider, establish, or contract a relationship, the existence of this
Agreement and its terms, and the Company shall have no liability for
doing so.
(O) By providing me with this Agreement, the company does not
guarantee or otherwise alter my at-will employment status. I am
otherwise free to voluntarily resign from employment and the Company
continues to maintain the complete right to terminate this employment
relationship, without notice and without recourse; however, the terms of
this Agreement will apply after such termination, as applicable.
(P) In the event the Employer terminates Employee for cause, the
laws of the State of Missouri shall apply as to the application and
interpretation of this document. In the event the Employee rescinds or
otherwise voluntarily terminates his employment the laws of the State of
Oregon shall apply as to the application interpretation of this
document. The Company and I submit exclusively to the jurisdiction of
the courts of St. Louis County, State of Missouri for the purpose of
deciding any questions, disputes, causes, whether for injunctive relief
or otherwise, arising under this Agreement, and the Secretary of State
of the State of Missouri is hereby designated as my agent for service of
process for any actions commenced under or to enforce this Agreement in
the courts of St. Louis County, State of
<PAGE>
<PAGE>
Missouri, provided that a copy of such notice shall be mailed to me at
my last known address.
(Q) ACKNOWLEDGEMENT. BY SIGNING THIS AGREEMENT, I ACKNOWLEDGE
THAT I HAVE READ IT, THAT I UNDERSTAND AND INTEND TO FULFILL EACH AND
EVERY ONE OF THE PROMISES IN THIS AGREEMENT, THAT I UNDERSTAND THIS IS A
LEGALLY BINDING AGREEMENT, AND THAT I HAVE RECEIVED A COPY OF THIS
AGREEMENT.
The parties have executed this Agreement as of ,
----------------
1999.
-----------------------------
(Employee's Signature)
By:
- ------------------------------ --------------------------
WITNESS "The Company"
/ /
- ----- ----- -----
DATE
<PAGE>
<PAGE>
ADDENDUM C
CONTINUANCE OF EMPLOYMENT AGREEMENT
THIS CONTINUANCE OF EMPLOYMENT AGREEMENT, dated as of the _____
day of ______________________ 1999, by and between RB RUBBER PRODUCTS,
INC. (hereinafter referred to as "Employer" and which, together with its
parent company, Dash Multi-Corp, Inc., and any other subsidiaries of
Dash Multi-Corp, Inc., are called the "Company" herein) and RONALD BOGH,
his successors and assigns (hereinafter jointly referred to as
"Employee").
WHEREAS, The Company is desirous of having Employee employed by
Employer in the capacity of a business technician and Employee wishes to
be employed by Employer in such capacity;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties hereto mutually agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee in the
capacity of business technician, and Employee hereby accepts
such employment and agrees to perform for Employer the
duties described herein, faithfully, diligently and to the
best of his ability.
2. TERM OF EMPLOYMENT. Employee's employment hereunder shall
become effective upon the termination of the Employment
Agreement attached hereto as Addendum A and shall continue
until the 31st day of December 2008. All employment under
this Agreement shall be subject to the Termination
provisions of Paragraph 9 hereunder.
3. DUTIES. Employee agrees to devote his time and attention to
the business as a technical advisor to operational and
management functions of the Employer as directed by the
Employer, with direction from or as assigned by the Company.
Employee agrees to carry out such duties as required to
perform his job, assigned or directed by Employer or
Company, or mutually agreed on between Employee Employer
and Company. Employer shall not require of Employee a
minimum number of hours to perform the duties of this
Agreement.
4. COMPENSATION.
(a) Employer will pay Employee for services rendered
hereunder as a business technician with a compensation
at the rate of sixty thousand dollars and no cents
($60,00.00) per annum during the term of this
Agreement payable in equal monthly installments, at
the end of each month.
(b) Payments to Employee pursuant to this Agreement shall
be subject to any applicable Federal, State and Local
withholdings.
5. BENEFITS. During the term of this Agreement, Employer shall
furnish to Employee:
(a) Medical and Health Care Coverage as provided to the
employees of the Employer under the terms and
conditions of those Plans as they currently exist, or
may exist during the term of this Agreement.
(b) Employee waives any and all benefits not stipulated to
in this Agreement.
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(c) Current Life Insurance Policies with The Guardian Life
Insurance Company under policy numbers 3326661,
3340193, 3363011, and 3388094, will continue in force
under their current terms and conditions.
(d) Employer, as directed by the Company, has right to
terminate life insurance policies 3908036 and 3913470
issued by The Guardian Life Insurance Company, upon
thirty (30) days written notice to Employee. Prior to
the expiration of this thirty (30) day notice period,
Employee has the option of assuming the ownership and
premium payment for the aforementioned life insurance
policy.
(e) Upon the conclusion of this Agreement, Employer will
reimburse Employee for the cost of Supplemental
Medicare Insurance, not to exceed three hundred
dollars ($300.00) per month, provided Employee pays
for Medicare Part B.
(f) Terms and Conditions of any and all benefits now
provided or may be provided are at the sole discretion
of the Employer as directed by the Company. The
Employer, with the consent and direction of the
Company, maintains the right to modify, add to, or
terminate these programs at any time. Provided that
changes to (a) are done judiciously, and (c) and (e)
with comparable benefits.
6. CONFIDENTIALITY AGREEMENT.
On or before ______ day of __________________ 1999, Employee
will duly execute a mutually agreed upon Confidentiality
Agreement between the Employee and Employer (attached
Addendum B). Both Employee and Employer agree that said
Confidentiality Agreement when executed shall stand alone,
and shall be performed in accordance with its own terms and
provisions, and that the obligations of Employee under said
Confidentiality Agreement shall not be affected in any way
by the termination of this Agreement.
7. TERMINATION. Upon furnishing of notice to the Employee, the
Employer, at the direction of the Company, may terminate the
employment of the Employee for cause, as determined by the
Employer or Company at their discretion, at any time during
the employment period by reason of the Employee's (i)
commission of an act constituting common law fraud or a
felony, or (ii) entering a plea of nolo contendere to a
charge of a felony or a misdemeanor involving moral
turpitude.
8. MODIFICATION AND CONSTRUCTION. This Agreement embodies the
entire Agreement between the parties and there have not been
and are no agreements, representations or warranties between
the parties other than those set forth or provided for
herein. The paragraph headings in this Agreement are
inserted for convenience only. This Agreement shall not be
changed or modified in whole or in part except by a
supplemental written agreement signed by both parties. The
failure by any party to insist upon strict compliance by
the other party with respect to any of the terms or
conditions hereof shall not be deemed a waiver of any such
term or condition, nor shall any waiver or relinquishment of
any right or power hereunder, at one or more times, be
deemed a waiver or relinquishment of such right or power at
any other time or times. This Agreement shall be governed
and construed by the laws of the State of Oregon, without
reference to choice of law principles.
9. SUCCESSION OF AGREEMENT. In the event Employee is unable to
fulfill the terms of this Agreement due to death, or total
disability as determined by the Social Security
Administration, the surviving spouse, if any, will
immediately assume the position of business technician for
the remaining term of the Agreement provided she duly
executes Employer's Confidentiality Agreement.
Aforementioned spouse may, at any time during the term of
this Agreement, decline
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by written notification to Employer and Company the
Succession and all terms of this Agreement.
10. POLICIES. Employee agrees to comply with all current
policies and procedures of the Employer that exist for the
employees of the Employer or may exist for the employees of
the Employer during the term of this Agreement. Employee
further agrees to comply with all policy and procedures as
directed or assigned by Company during the term of this
Agreement.
11. SEVERABILITY. The invalidity or un-enforceability of a
particular provision of this Agreement shall not affect the
other provisions hereof, and this Agreement shall be
enforced in all respects to the fullest extent permitted by
applicable law.
12. ASSIGNMENT, BENEFIT AND BINDING EFFECT. This Agreement
shall not be assignable by RB Rubber Products except that
Dash may assign this Agreement to any of its subsidiaries,
whether current or hereafter acquired or formed; provided,
however, no such assignment shall require Employee to
relocate. Upon proper assignment all of the rights and
obligations of RB Rubber Products shall inure to the benefit
of and be binding upon such subsidiary in place of RB Rubber
Products, which shall thereupon be released therefrom. This
Agreement shall inure to the benefit of and be binding upon
RB Rubber Products, its successors and assigns, and
Employee, his heirs, legal representatives and assigns.
* * * * * * * * * * * * * * * * * * *
RB RUBBER PRODUCTS, INC.
ATTEST:
BY:_______________________________
_______________________________
Secretary
EMPLOYEE
[SEAL]
__________________________________
Ronald Bogh
Employment Agreement for Ronald Bogh signature page
page 3 of 3
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<PAGE>
EXHIBIT G
FORM OF EMPLOYMENT AGREEMENT OF MR. GILSON
<PAGE>
<PAGE>
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of the _______ day of ________
1999, by and between RB RUBBER PRODUCTS, INC. (hereinafter referred to
as "Employer" and which, together with its parent company, Dash Multi-
Corp, Inc., and any other subsidiaries of Dash Multi-Corp, Inc., are
called the "Company" herein) and PAUL GILSON (hereinafter referred to as
"Employee").
WHEREAS, The Company is desirous of having Employee employed by
Employer in an executive capacity and Employee wishes to be employed by
Employer in such capacity;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties hereto mutually agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee in an
executive capacity, and Employee hereby accepts such
employment and agrees to perform for Employer the duties
described herein, faithfully, diligently and to the best of
his ability. Employee will be employed to act as the Chief
Operating Officer and Senior Vice President for Employer.
2. TERM OF EMPLOYMENT. Employee's employment hereunder shall
become effective on the _____ day of _______________ 1999
and shall have a term of four (4) years. All employment
under this Agreement shall be subject to the Termination
provisions of Paragraph 9 hereunder.
3. DUTIES. Employee agrees to devote his time and attention to
the business and affairs of Employer and to use his best
efforts to promote the interests of Employer as directed by
the Employer, with direction from or as assigned by the
Company. Employee agrees to carry out such duties as
required to perform his job, assigned or directed by
Employer or Company, or mutually agreed on between Employee,
Employer or Company.
4. COMPENSATION.
(a) Employer will pay Employee for services rendered hereunder
as Chief Operating Officer and Senior Vice President with a
compensation at the rate of: (i) Year One, one hundred
fourteen thousand dollars and no cents ($114,00.00) per
annum; (ii) Year Two, one hundred twenty thousand dollars
and no cents ($120,000.00) per annum; Year Three, one
hundred twenty-six thousand dollars and no cents
($126,000.00) per annum; Year Four, one hundred thirty-two
thousand dollars and no cents ($132,000.00) payable in equal
monthly installments, at the end of each month.
(b) The compensation rate described in Section 4(a) may be
increased at the sole discretion of the Employer, as
directed by Company.
(c) In addition to the compensation in Section 4(a) of this
Agreement, Employer will continue with lease payments on
1998 Lincoln Navigator for Employee use, and reimbursement
of all expenses in connection with the use of the
aforementioned vehicle. In return, Employee agrees to
comply with all policies and procedures of the Employer for
use of said vehicle and expenses. Upon the lease expiration
Employee will be furnished a company vehicle comparable to
and under the same policies and procedures as the Company.
Employer reserves the right to purchase the aforementioned
vehicle and provide same to Employee as an Employer owned
vehicle.
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(d) Payments to Employee pursuant to this Agreement shall be
subject to any applicable Federal, State and Local
withholdings.
5. BENEFITS. During the term of this Agreement, Employer shall
furnish to Employee:
(a) Medical and Health Care Coverage as provided to the
employees of the Employer under the terms and conditions of
those Plans as they currently exist, or may exist during the
term of this Agreement.
(b) Life Insurance as provided to the employees of the Employer
under the terms and conditions of those Plans as they
currently exist or may exist during the term of this
Agreement.
(c) Current Life Insurance Policy with The Guardian Life
Insurance Company under policy number 3909092, will continue
in force under their current terms and conditions of that
Plan as it currently exist.
(d) Employer as directed by the Company has the right to
terminate life insurance policy 3909094 issued by The
Guardian Life Insurance Company, upon thirty (30) day
written Notice to Employee. Prior to the expiration of this
thirty (30) day notice period, Employee has option of
assuming the ownership and premium payment for the
aforementioned life insurance policy.
(e) Terms and Conditions of any and all benefits now provided or
may be provided are at the sole discretion of the Employer
as directed by the Company. The Employer, with the consent
and direction of the Company, maintains the right to modify,
add to, or terminate these programs at any time.
6. BONUS. Company to provide a "Base Return Plan" patterned after
that of the other Company subsidiaries.
7. EXPENSES. Employer will reimburse Employee for all reasonable
expenses properly incurred by Employee in furtherance of or in
connection with the business of Employer upon submission of such
vouchers, received or other evidence as mayreasonably be required
by Employer or Company.
8. CONFIDENTIALITY AGREEMENT.
On or before _____ day of ________________ 1999, Employee will
duly execute a mutually agreed upon Confidentiality Agreement
between the Employee and Employer (attached Addendum A). Both
Employee and Employer agree that said Confidentiality Agreement
when executed shall stand alone, and shall be performed in
accordance with its own terms and provisions, and that the
obligations of Employee under said Confidentiality Agreement shall
not be affected in any way by the termination of this Agreement.
9. TERMINATION. Upon furnishing of notice to the Employee, the
Employer at the direction of the Company may terminate the
employment of the Employee for cause, as determined by the
Employer or Company at their discretion, at any time during the
Employment period by reason of the Employee's (i) neglect of his
duties hereunder, (ii) breach of or negligence with respect to his
obligations under this Agreement, (iii) engaging in misconduct
deemed inconsistent with the Employer's best interest, (iv) the
Employee's commission of an act constituting common law fraud or a
felony, or (v) the entering a plea of nolo contendere to a charge
of a felony or a misdemeanor involving moral turpitude.
To the extent Employee challenges the determination of cause, the
Employee's exclusive remedy shall be submission of the challenge
to arbitration. In the event of arbitration a list of five (5)
arbitrators would be requested from the American Arbitration
Association. A name shall be
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struck from the list, with the Employee striking first, until one
name remains, who then shall be the arbitrator. If the Employee
prevails in the challenge, Employer shall pay the arbitrator's fee
and expenses. Otherwise, the arbitrator's fee and expenses shall
be shared equally.
10. MODIFICATION AND CONSTRUCTION. This Agreement embodies the entire
Agreement between the parties and there have not been and are no
agreements, representations or warranties between the parties
other than those set forth or provided for herein. The paragraph
headings in this Agreement are inserted for convenience only.
This Agreement shall not be changed or modified in whole or in
part except by a supplemental written agreement signed by both
parties. The failure by any party to insist upon strict
compliance by the other party with respect to any of the terms or
conditions hereof shall not be deemed a waiver of any such term or
condition, nor shall any waiver or relinquishment of any right or
power hereunder, at one or more times, be deemed a waiver or
relinquishment of such right or power at any other time or times.
This Agreement shall be governed and construed by the laws of the
State of Missouri, without reference to choice of law principles.
11 POLICIES. Employee agrees to comply with all current policies and
procedures of the Employer that exist for the employees of the
Employer or may exist for the employees of the Employer during the
term of this Agreement. Employee further agrees to comply with
all policies and procedures as directed or assigned by Company
during the term of this Agreement.
12. SEVERABILITY. The invalidity or un-enforceability of a particular
provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be enforced in all respects to
the fullest extent permitted by applicable law.
13. ASSIGNMENT, BENEFIT AND BINDING EFFECT. This Agreement shall not
be assignable by RB Rubber Products except that Dash may assign
this Agreement to any of its subsidiaries, whether current or
hereafter acquired or formed, and upon such assignment all of the
rights and obligations of RB Rubber Products shall inure to the
benefit of and be binding upon such subsidiary in place of RB
Rubber Products, which shall thereupon be released therefrom.
This Agreement shall inure to the benefit of and be binding upon
RB Rubber Products, its successors and assigns, and Employee, his
heirs, legal representatives and assigns.
* * * * * * * * * * * * * * *
RB RUBBER PRODUCTS, INC.
ATTEST:
BY:_______________________________
_______________________________
Secretary
EMPLOYEE
[SEAL]
________________________________
Paul Gilson
Employment Agreement for Paul Gilson signature page
page 3of 3
<PAGE>
<PAGE>
ADDENDUM A
RB RUBBER PRODUCTS, INC.
CONFIDENTIALITY AGREEMENT
In consideration of my employment or continued employment in any
capacity by RB Rubber Products, Inc. (which together with any
subsidiaries of Dash Multi-Corp are called the "Company" herein) and in
consideration of the salary, wages or other compensation paid for my
services in the course of such employment, I agree:
(A) To communicate promptly to the Company all inventions,
discoveries and improvements (whether or not they are patentable)
conceived or reduced to practice by me, solely or in collaboration with
others, from the time of entering the Company's employ until I leave,
(1) which are useful in the business, work or investigations of the
Company, or (2) which result from or are suggested by any work which I
may do for or on behalf of the Company. If an application for patent
for any such invention, discovery or improvement be made by me within
six (6) months after I leave the Company's employ, such invention,
discovery or improvement shall be presumed to have been conceived during
the period of my employment.
(B) To assist the Company during and subsequent to such
employment in every proper way (without charge to the Company but at its
expense) to obtain patents or otherwise protect such inventions,
discoveries and improvements in any and all countries against
appropriation by others; all such inventions, discoveries and
improvements (whether patented or not) and any patents that may issue
thereon to be the sole and exclusive property of the Company and being
hereby assigned thereto; and for the purpose of this clause to execute
and do all such documents, acts and things as the Company may deem
necessary or desirable.
(C) To make and maintain adequate and current written records of
all such inventions, discoveries and improvements, in the form of notes,
sketches, drawings, or reports relating thereto, which records shall be
and remain the property of and available to the Company at all times.
(D) Except as the Company may otherwise consent in writing not
to disclose or to discuss with others outside the Company at any time
(except as my company duties may require) during my employment, any
information, knowledge or data of a confidential nature I may receive
during the course of my employment relating to the Company's and/or the
Company's customers' business procedures, formulae, methods, machines,
manufactures, compositions, inventions, discoveries, improvements or
other matters of a confidential nature. (The aforesaid term
"confidential" is used in its ordinary sense and does not refer to any
governmental security classification.)
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(E) To notify the Company in writing before I make any
disclosure or perform or cause to be performed any work for or on behalf
of the Company which appears to threaten conflict with:
(1) rights I claim in any invention, discovery, or improvement -
(a) made by me or others prior to my employment, or
(b) otherwise outside the scope of this agreement
(2) rights of others arising out of obligations incurred by me -
(a) prior to this agreement, or
(b) otherwise outside the scope of this agreement
In the event of my failure to give notice under the circumstances
specified in (1) of the foregoing, the Company may assume that no such
conflicting invention, discovery or improvement exists, and I agree that
I will make no claim with respect thereto.
(F) During and after termination (for any reason) of my
employment with the Company, for a period of one (1) year from the time
my employment with the Company ceases, I will maintain the
confidentiality of trade secrets, customer lists, technical data and
other information not in the public domain obtained from or made
available to me by the Company and/or customers and/or suppliers of the
Company in the course of my employment by the Company; and I will not
utilize such information for my individual gain or benefit.
Furthermore, I agree to indemnify and hold harmless the Company against
any legal liability or damages suffered by it as a result of my breach
of this clause or clause (D) above.
(G) During and after termination (for any reason) of my
employment with the Company, I will not, whether through any individual,
firm or corporation, or otherwise, become engaged in the development,
sales, marketing or management for any individual, firm, or corporation
engaged in the development, manufacture or sales of products similar to
those developed, manufactured, or sold by the Company for a period of
one (1) year from the time my employment with the Company ceases.
(H) I acknowledge that (a) the separate and distinct promises in
this Agreement are reasonable and necessary in order to protect the
Company's legitimate business interest; (b) any violation would result
in irreparable injury to the Company; and (c) the enforcement of a
remedy by way of injunction would not prevent me from earning a living.
In the event the Company incurs expenses to retain attorneys to enforce
this Agreement, I promise to pay all costs, court costs, fees and
expenses of enforcement, including actual attorneys fees, whether or not
litigation be commenced.
(I) It is the intention of the parties to restrict my activities
only to the extent necessary for the protection of the Company's
legitimate business interest. If any one or more of the promises
contained in this Agreement shall for any reason be held to be
excessively broad as to time,
<PAGE>
<PAGE>
activity or subject, it shall be construed by limiting and reducing it
so as to be enforceable to the extent compatible with the applicable
law.
(J) The Company's failure to exercise any of its rights in the
event I breach any of the separate and distinct promises in this
Agreement shall not be construed as a waiver of such breach or prevent
the Company from later enforcing strict compliance with any and all
promises in this Agreement.
(K) In the event any one or more provisions contained in this
Agreement or any application shall be invalid, illegal, or unenforceable
in any respect, the validity, legality or enforceability of the
remaining provisions of this Agreement and any other application shall
not in any way be affected or impaired.
(L) This Agreement is binding upon and shall benefit the
Company, its successors and assigns, and my heirs, executors,
administrators and legal representatives.
(M) The Agreement contains the parties' complete understanding,
and there are no other agreements, oral or written, pertaining to the
subject matter of this Agreement. Any amendments to this Agreement must
be in writing and signed by the parties.
(N) In order to preserve the Company's rights under this
Agreement, the Company may advise any third party with whom I may
consider, establish, or contract a relationship, the existence of this
Agreement and its terms, and the Company shall have no liability for
doing so.
(O) By providing me with this Agreement, the company does not
guarantee or otherwise alter my at-will employment status. I am
otherwise free to voluntarily resign from employment and the Company
continues to maintain the complete right to terminate this employment
relationship, without notice and without recourse; however, the terms of
this Agreement will apply after such termination, as applicable.
(P) The laws of the State of Missouri shall apply as to the
application and interpretation of this document. The Company and I
submit exclusively to the jurisdiction of the courts of St. Louis
County, State of Missouri for the purpose of deciding any questions,
disputes, causes, whether for injunctive relief or otherwise, arising
under this Agreement, and the Secretary of State of the State of
Missouri is hereby designated as my agent for service of process for any
actions commenced under or to enforce this Agreement in the courts of
St. Louis County, State of Missouri, provided that a copy of such notice
shall be mailed to me at my last known address.
(Q) ACKNOWLEDGEMENT. BY SIGNING THIS AGREEMENT, I ACKNOWLEDGE
THAT I HAVE READ IT, THAT I UNDERSTAND AND INTEND TO FULFILL EACH AND
EVERY ONE OF THE PROMISES IN THIS AGREEMENT, THAT I UNDERSTAND THIS IS A
LEGALLY BINDING AGREEMENT, AND THAT I HAVE RECEIVED A COPY OF THIS
AGREEMENT.
<PAGE>
<PAGE>
The parties have executed this Agreement as of _______________,
1999.
_______________________________
(Employee's Signature)
__________________________________ By:___________________________
WITNESS "The Company"
______/______/______
DATE
<PAGE>
<PAGE>
EXHIBIT H
FORM OF NON-COMPETITION AGREEMENT OF MR. NELSON
<PAGE>
<PAGE>
LETTER OF AGREEMENT
THIS LETTER OF AGREEMENT, dated as of the ______ day of
____________ 1999, by and between RB RUBBER PRODUCTS, INC. (hereinafter
referred to as "RB" and which, together with its parent company, Dash
Multi-Corp, Inc., and any other subsidiaries of Dash Multi-Corp, Inc.,
are called the "Company" herein) and DOUGLAS NELSON (hereinafter
referred to as "NELSON").
WHEREAS, The Company is desirous of having Nelson enter into a
Letter of Agreement with RB and Nelson wishes to enter into said
Agreement with RB;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties hereto mutually agree as follows:
1. CONFIDENTIALITY AGREEMENT.
On or before _____day of ___________________ 1999, Nelson will
duly execute the Confidentiality Agreement between himself
and RB (attached Addendum A). Both Nelson and RB agree that
said Confidentiality Agreement when executed shall stand
alone, and shall be performed in accordance with its own
terms and provisions, and that the obligations of Nelson
under said Confidentiality Agreement shall not be affected in
any way by the termination of this Agreement.
2. CONSIDERATION. In consideration of Nelson's execution of the
Confidentiality Agreement, RB agrees to provide, for a
maximum term of four (4) years effective from the _____ day
of _______________ 1999, the following:
(a) RB will reimburse Nelson for the cost of COBRA
medical coverage for such time he is so eligible.
(b) Upon the conclusion of COBRA eligibility, RB will
reimburse Nelson for the cost of a personal Medical Insurance
Plan, not to exceed thirteen hundred fifty dollars ($1350.00)
per month.
(c) Current Life Insurance Policies under policy numbers
3326663, 3340175, 3363012, and 3388093, will continue in
force under their current terms and conditions.
(d) Payments by RB pursuant to this Agreement shall be
subject to any applicable Federal, State and Local
withholdings.
3. MODIFICATION AND CONSTRUCTION. This Agreement embodies the
entire Agreement between the parties and there have not been and
are no agreements, representations or warranties between the
parties other than those set forth or provided for herein.
The paragraph headings in this Agreement are inserted for
convenience only. This Agreement shall not be changed or
modified in whole or in part except by a supplemental written
agreement signed by both parties. The failure by any party
to insist upon strict compliance by the other party with
respect to any of the terms or conditions hereof shall not be
deemed a waiver of any such term or condition, nor shall any
waiver or relinquishment of any right or power hereunder, at
one or more times, be deemed a waiver or relinquishment of
such right or power at any other time or times. This
<PAGE>
<PAGE>
Agreement shall be governed and construed by the laws of the
State of Missouri, without reference to choice of law
principles.
4. SEVERABILITY. The invalidity or un-enforceability of a
particular provision of this Agreement shall not affect the
other provisions hereof, and this Agreement shall be enforced
in all respects to the fullest extent permitted by applicable
law.
5. ASSIGNMENT, BENEFIT AND BINDING EFFECT. This Agreement shall
not be assignable by RB Rubber Products except that Dash may
assign this Agreement to any of its subsidiaries, whether
current or hereafter acquired or formed, and upon such
assignment all of the rights and obligations of RB Rubber
Products shall inure to the benefit of and be binding upon
such subsidiary in place of RB Rubber Products, which shall
thereupon be released therefrom.
* * * * * * * * * * * * * * * * * * * * * * * *
RB RUBBER PRODUCTS, INC.
ATTEST:
BY:____________________________
_______________________________
Secretary
NELSON
[SEAL]
_______________________________
Douglas Nelson
Letter of Agreement for Douglas Nelson signature page
page 2 of 2
<PAGE>
<PAGE>
ADDENDUM A
RB RUBBER PRODUCTS, INC.
CONFIDENTIALITY AND NON-COMPETE AGREEMENT
THIS CONFIDENTIALITY AND NON-COMPETE AGREEMENT (hereinafter
"Agreement"), is made and entered into this __ day of ________, 1999, by
and between RB RUBBER PRODUCTS, INC., together with its affiliates,
subsidiaries, and predecessors and successors in interest, including
Dash Multi-Corp and its subsidiaries (hereinafter collectively referred
to as the "Company"), and ______________________________ (hereinafter
"Nelson").
WHEREAS, the Company desires to keep confidential and secret all
confidential, proprietary and trade secret information regarding its
operations, and insofar as Nelson understands the business necessity of
keeping such information confidential and secret and recognizes the
proprietary nature of such information;
NOW, THEREFORE, in consideration of the Company's act of a Letter
of Agreement and/or other good and valuable consideration, the receipt
and sufficiency of which is specifically acknowledged by Nelson, and the
mutual covenants and promises herein set forth, the parties agree as
follows:
1. CONFIDENTIALITY AGREEMENT.
(A) Effective immediately and for the maximum term allowed under
the law, Nelson shall hold in strictest confidence and shall not ever
directly or indirectly disclose, communicate or otherwise reveal to any
person, firm, corporation, partnership, agency, commission, institution
or other entity, without the express prior written authorization of the
Chairman and Chief Executive Officer of the Company, any confidential or
proprietary information relating to any business of the Company, or any
trade secret held by the Company, that is not a matter of public
knowledge. Nelson further agrees to indemnify and hold harmless the
Company against any legal liability or damages suffered by it as a
result of Nelson's breach of this provision.
(B) Confidential or proprietary information includes, but is not
limited to: (1) former, existing or future products, procedures,
discoveries, developments, drawings, blueprints, tracings, sketches,
designs, plans, layouts, specifications, models, strategies, inventions,
improvements, techniques, processes, formulas, know-how, computer
hardware, software and data, and any other trade secrets or methods of
operation; (2) all financial information of any kind including budgets,
projections, licenses, purchasing agreements; prices, fees, costs,
forecasts or unpublished financial statements; (3) customer information
of any kind including names, contacts, sales, contracts, schedules or
agreements; (4) advertising and marketing information of any kind
including plans, strategies, and customer, supplier, or competitor
lists; (5) pending or completed acquisitions of any company, division,
product line or other business
<PAGE>
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unit; (6) business procedures, practices or information of any kind
including pay, benefits, compensation, personnel policies, manuals,
formulae, methods, machines, manufactures, compositions, inventions,
discoveries, improvements, writings, guides notes and any all other
memoranda, including without limitation any and all written information
which may be or has been furnished to Nelson or which may be prepared or
designed by Nelson in connection with his relationship with the Company;
and (7) any other information designated by the Company as confidential
or proprietary in nature.
(C) The term "trade secret" means information including a
formula, pattern, compilation, program, device, method or technique or
process that: (1) derives independent economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic
value from its disclosure or use and (2) is the subject of efforts that
are reasonable under the circumstances to maintain its secrecy. Such
confidential or proprietary information has been created, discovered, or
developed by or has been otherwise become known to the Company, or is
information in which property rights have been assigned or otherwise
conveyed to the Company.
(D) The Company and Nelson specifically agree and acknowledge
that any and all confidential information or trade secrets provided by
the Company or otherwise obtained by Nelson is unique and commercially
sensitive in nature, represents, in many instances, advanced and state
of the art technology, and has been developed over time and reflects a
substantial investment by the Company. Nelson further acknowledges that
confidential or proprietary information and trade secrets provided by
the Company is not a matter of public or general knowledge in the
industry and that the Company derives economic value (whether actual or
potential) from such information. Nelson acknowledges the Company has
maintained substantial secrecy concerning the confidential or
proprietary information and trade secrets and that, absent disclosure by
the Company to Nelson, who could not otherwise have readily ascertained
by proper means, and/or have acquired knowledge of such confidential or
proprietary information and trade secrets.
2. DISCLOSURE AND PROPERTY RIGHTS AGREEMENT
(A) Effective immediately and for and during the term of
Nelson's Letter of Agreement with the Company, Nelson agrees to promptly
and fully disclose in writing to the Company all works and property,
including but not limited to all intellectual properties and all
confidential, proprietary, or trade secret information (as defined in
Paragraph 1 above), including inventions, discoveries and improvements
(whether or not they are patentable) which are conceived, made,
developed, written, reduced to practice, contributed to or prepared by
Nelson during or related to in any manner whatsoever, Nelson's Letter of
Agreement period with the Company or which result from or are suggested
by any work Nelson may do in connection with his Letter of Agreement
with the Company, without exception, all of such works and property
hereinafter referred to as "Works and Property". If an application for
patent for any such invention, discovery or improvement be made by
Nelson within six (6) months after Nelson left the Company's employ,
such invention, discovery or improvement shall be presumed to have been
conceived during the period of Nelson's employment with the Company.
<PAGE>
<PAGE>
(B) Nelson specifically acknowledges and agrees that pursuant to
Sections 101 and 201 of the United States Copyright law, all Works and
Property shall be "works made for hire" and all rights in such Works and
Property shall belong entirely and exclusively to the Company forever,
and the Company may make any use or nonuse of such Works and Property
throughout the world without any further obligation to Nelson.
(C) Nelson further agrees that all Works and Property shall
unconditionally be, become and remain the sole and exclusive property of
the Corporation forever, and Nelson hereby grants and assigns forever to
the Corporation all rights whatsoever that Nelson might have therein,
and the Company may make any use or non use of such Works and Property
throughout the world without any further obligation to Nelson.
Accordingly, Nelson will promptly execute, acknowledge and deliver all
applications, oaths, declaration, and further documents and will provide
such additional assistance as the Company may deem necessary or
desirable to evidence the Company's title to such Works and Property.
(D) Nelson agrees to assist the Company during and subsequent to
the term of the Letter of Agreement in every proper way (without charge
to the Company but at its expense) to obtain patents or otherwise
protect such Works and Property in any and all countries against
appropriation by others; all such Works and Property (whether patented
or not) and any patents that may issue thereon to be the sole and
exclusive property of the Company and being hereby assigned thereto; and
for the purpose of this provision to execute and do all such documents,
acts and things as the Company may deem necessary or desirable.
(E) Nelson agrees to make and maintain adequate and current
written records of all such Works and Property, in the form of notes,
sketches, drawings, or reports relating thereto, which records shall be
and remain the property of and available to the Company at all times.
(F) Nelson agrees to notify the Company in writing before making
any disclosures or performing or causing to be performed any work for or
on behalf of the Company which appears to threaten conflict with: (1)
rights Nelson claims in any Works and Property made by Nelson or others
prior to Nelson's employment or otherwise outside the scope of this
Agreement; or (2) rights of others arising out of obligations incurred
by Nelson prior to execution of this Agreement or otherwise outside the
scope of this Agreement. In the event of Nelson's failure to give
notice under Paragraph 2.(F)(1), the Company may assume that no such
conflicting Works and Property exists, and Nelson agrees he shall make
no claim with respect thereto.
(G) In performing duties or services for the Company regarding
Works and Property, Nelson will not knowingly infringe upon the rights,
including but not limited to patent, copyright, trade secret or other
proprietary rights, of any third party whatsoever.
(H) Only the Chairman and Chief Executive Officer of the Company
shall have the power and authority to change or modify the terms and
provisions of this Paragraph, and such
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<PAGE>
change or modification must be reduced to writing and signed both by
Nelson and the Chairman and Chief Executive Officer of the Company in
order to be enforceable.
3. NONCOMPETITION AGREEMENT.
(A) Effective immediately and for and during the term of
Nelson's Letter of Agreement with the Company and for one (1) year
thereafter, Nelson shall not, directly or indirectly, whether as a
partner, investor, employee, consultant, creditor, shareholder or
otherwise, assist, provide services to, promote, participate or engage
in any activity with any other business competitive with the Company,
which includes any individual, firm or entity engaged in the
development, manufacture or sales of products similar to those
developed, manufactured or sold by the Company. Ownership of stock in a
publicly traded company not exceeding two percent (2%) shall not
constitute a violation of this Paragraph.
(B) Nelson agrees immediately to inform and disclose to the
Company any attempt by any person from any organization to involve
Nelson in a competing business. Nelson shall also refrain from
recruiting, hiring, or by any other attempts, directly or by assisting
others, inducing any employee of the Company to leave the employment of
the Company for purposes of competing with the Company. Nelson further
acknowledges that such employees of the Company may be similarly bound
by other agreements and that Nelson shall not induce or attempt to
induce, either directly or indirectly, a breach of the duties owed by
such employees to the Company.
(C) Nelson will not directly or indirectly, unfairly compete
with the Company by diverting or attempting to divert current, former or
potential customers of the Company, or by seeking to induce or
encouraging such customers to modify or not renew their business
relationship with the Company.
(D) Nelson acknowledges and agrees that (a) the separate and
distinct promises in this Agreement are reasonable and necessary in
order to protect the Company's legitimate business interest; (b) any
violation would result in irreparable injury to the Company and that the
damages which will be suffered by the Company by a breach of any term or
provision of this Paragraph may be continuing, irreparable and difficult
or impossible to ascertain in money or money's worth; and (c) the
enforcement of a remedy by way of injunction would not prevent Nelson
from earning a living. Consequently, in addition to any action at law
for damages, Nelson agrees the Company may have equitable relief
including, but not limited to, specific performance, temporary
restraining order, preliminary, permanent or mandatory injunction
against any breach. In the event the Company incurs expenses to retain
attorneys to enforce this Agreement, Nelson further agrees to pay all
attorney's fees, costs and expenses incurred by the Company, whether or
not litigation be commenced.
(E) Nelson also acknowledges and agrees that any violation of
the terms of this Paragraph shall automatically toll, suspend and extend
the period of his pledged obligation set forth herein for the period of
time that the violation continues. Nelson hereby acknowledges that the
limitations in this Paragraph as to time and geographical scope are fair
and reasonable.
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<PAGE>
4. NON-WAIVER. The failure in one or more instances of the Company
to insist upon performance of any of the terms or conditions of this
Agreement, to exercise any right or privilege herein conferred, or the
waiver by the Company of any breach of any of the terms or conditions of
this Agreement, shall not be construed as a subsequent waiver by the
Company of any breach of any of the terms, conditions, rights or
privileges, but the same shall continue and remain in full force and
effect as if no such forbearance or waiver had occurred. No waiver
shall be valid unless in writing and signed by the party against whom it
is sought to be enforced.
5. RIGHT OF CONTACT. In order to preserve the Company's rights under
this Agreement, the Company may advise any third party which Nelson may
consider, establish or contract a relationship, the existence of this
Agreement and its terms, and the Company shall have no liability for
doing so.
6. ENTIRE AGREEMENT. This Agreement reflects the entire Agreement
between Nelson and the Company regarding all matters covered herein. No
change or modification of this Agreement shall be valid unless the same
is in writing and signed by both parties hereto. Nelson understands
that no manager, agent, or other representative of the Company, other
than the Chairman and Chief Executive Officer, has any authority
whatsoever to modify the terms of this Agreement on behalf of the
Company.
7. SUCCESSION. This Agreement is binding upon and shall benefit the
Company, its successors and assigns, and Nelson's heirs, executors,
administrators, legal representative, successors and assigns.
8. CONSTRUCTION. This Agreement shall be governed by and construed
and interpreted according to the laws of the state of Missouri, without
reference to choice of law principles. The parties submit to the
exclusive jurisdiction of the courts of St. Louis County, Missouri for
the purpose of deciding any questions, disputes, causes, whether for
injunctive relief or otherwise, arising under this Agreement.
9. SAVINGS CLAUSE. Nothing contained in this Agreement shall be
construed to require the commission of any act contrary to law or to be
contrary to law, and wherever there is any conflict between any
provision of this Agreement and any present or future statute, law,
government regulation or ordinance contrary to which the parties have no
legal right to contract, the latter shall prevail, but in such event,
the provisions of this Agreement affected shall be curtailed and
restricted only to the extent necessary to bring them within legal
requirements. Further, if any one or more of the promises contained in
this Agreement shall for any reason be held to be excessively broad as
to time, activity or subject, it shall be construed by limiting and
reducing it so as to be enforceable to the extent compatible with
applicable law.
10. NOTICES. All notices, requests and demands, hereinafter called
"Notice" shall be in writing, shall be given by registered or certified
mail, return receipt requested, and shall be
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<PAGE>
effective only upon receipt. Unless either party furnishes a Notice of
address other than that referenced herein, all Notices shall be
addressed as follows:
If to the Company:
If to Nelson:
11. ACKNOWLEDGMENT AND CERTIFICATION. Nelson acknowledges and
certifies by signature below that Nelson has read this Agreement
consisting of eleven (11) numbered paragraphs and five (5) pages; Nelson
fully understands the meaning and intent of this document and consents
to the terms of the Agreement; Nelson has received a copy of this
Agreement and that Nelson is voluntarily executing this Agreement of
Nelson's own free will.
Dated this __th day of ___________, 1999.
_______________________________ __________________________________
Nelson's Signature For RB Rubber Products, Inc.
_______________________________ __________________________________
Nelson's Printed Name Title
_______________________________
Witness
<PAGE>
<PAGE>
EXHIBIT I
SHAREHOLDER AGREEMENT OF MR. BOGH
<PAGE>
<PAGE>
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "Agreement"), dated as of April
8, 1999, by and between Dash Multi-Corp., Inc. a Missouri corporation
("Purchaser"), and Ronald L. Bogh (the "Shareholder").
WHEREAS, the Shareholder is, as of the date hereof, the record and
beneficial owner of the shares of common stock, no par value (the
"Common Stock"), of R-B Rubber Products, Inc., an Oregon corporation
(the "Company"), set forth on Annex I hereto;
WHEREAS, Purchaser and the Company concurrently herewith are
entering into a Stock Purchase Agreement dated as of the date hereof
(the "Stock Purchase Agreement"), which provides, among other things,
for the acquisition by means of a cash tender offer (the "Offer") of 70%
of the outstanding shares of Common Stock upon the terms and subject to
the conditions set forth in the Stock Purchase Agreement; and
WHEREAS, in order to induce Purchaser to enter into the Stock
Purchase Agreement, the Shareholder has agreed to enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
execution and delivery by Purchaser of the Stock Purchase Agreement and
the mutual representations, warranties, covenants and agreements set
forth herein and therein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Representations and Warranties of the Shareholder. The
Shareholder hereby represents and warrants to Purchaser as follows:
(a) Such Shareholder is the record and beneficial owner of the
shares of Common Stock (as may be adjusted from time to time pursuant to
Section 5 hereof, the "Shares") set forth opposite his name on Annex I
to this Agreement.
(b) Such Shareholder has the legal capacity to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby.
(c) This Agreement has been validly executed and delivered by
such Shareholder and constitutes the legal, valid and binding obligation
of such Shareholder, enforceable against such Shareholder in accordance
with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally, and
(ii) the availability of the remedy of specific performance or
injunctive or other forms of equitable relief may be subject to
equitable defenses and would be subject to the discretion of the court
before which any proceeding therefor may be brought.
<PAGE>
<PAGE>
(d) Neither the execution and delivery of this Agreement nor the
consummation by such Shareholder of the transactions contemplated hereby
will violate any other agreement to which such Shareholder is a party.
(e) The Shares and the certificates representing the Shares
owned by such Shareholder are now and at all times during the term
hereof will be held by such Shareholder, or by a nominee or custodian
for the benefit of such Shareholder, free and clear of all liens,
claims, security interests, proxies, voting trusts or agreements,
understandings or arrangements or any other encumbrances whatsoever,
except for any such encumbrances or proxies arising hereunder.
2. Representations and Warranties of Purchaser. Purchaser
hereby represents and warrants to the Shareholder as follows:
(a) Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Missouri, and
Purchaser has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by Purchaser and constitutes the legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance
with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally and
(ii) the availability of the remedy of specific performance or
injunctive or other forms of equitable relief may be subject to
equitable defenses and would be subject to the discretion of the court
before which any proceeding therefor may be brought.
(c) Neither the execution and delivery of this Agreement nor the
consummation by Purchaser of the transactions contemplated hereby will
result in a violation of, or a default under, or conflict with, any
contract, trust, commitment, agreement, understanding, arrangement or
restriction of any kind to which Purchaser is a party or bound. The
consummation by Purchaser of the transactions contemplated hereby will
not violate, or require any consent, approval, or notice under, any
provision of any judgment, order, decree, statute, law, rule or
regulation applicable to Purchaser, except for any necessary filing
under state takeover laws.
3. Purchase and Sale of the Shares. (a) The Shareholder
hereby agrees that he shall tender the number of Shares set forth on
Annex I into the Offer promptly, and in any event no later than the
tenth business day following the commencement of the Offer pursuant to
Section 1.1 of the Stock Purchase Agreement, and that such Shareholder
shall not withdraw any Shares so tendered unless the Offer is terminated
or has expired. Purchaser shall agree to purchase all the Shares so
tendered at a price per Share equal to $3.00 per Share or any higher
price that may be paid in the Offer; provided, however, that Purchaser's
obligation to accept for payment and pay for the Shares in the Offer is
subject to all the terms and conditions of the Offer set forth in the
Stock Purchase Agreement and Annex A thereto.
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<PAGE>
(b) In the event that within five business days prior to the
expiration of the Offer, fewer than 70% of the Company's outstanding
shares shall have been validly tendered pursuant to the Offer and not
withdrawn, upon the request of Purchaser, the Shareholder shall tender
such number of Shares in addition to those to be tendered pursuant to
Section 3(a) as set forth in Annex I as Shareholder is directed by
Purchaser, but in no event shall Shareholder be obligated to tender more
than the total number of shares then owned by the Shareholder.
4. Transfer of the Shares. Prior to the termination of this
Agreement, except as otherwise provided herein, the Shareholder shall
not: (i) transfer (which term shall include, without limitation, for
the purposes of this Agreement, any sale, gift, pledge or other
disposition), or consent to any transfer of, any or all of the Shares;
(ii) enter into any contract, option or other agreement or understanding
with respect to any transfer of any or all of the Shares or any interest
therein; (iii) grant any proxy, power-of-attorney or other authorization
or consent in or with respect to the Shares; (iv) deposit the Shares
into a voting trust or enter into a voting agreement or arrangement with
respect to the Shares, or (v) take any other action that would in any
way restrict, limit or interfere with the performance of such
Shareholder's obligations hereunder or the transactions contemplated
hereby.
5. Certain Events. In the event of any stock split, stock
dividend, merger, reorganization, recapitalization or other change in
the capital structure of the Company affecting the Common Stock or the
acquisition of additional shares of Common Stock or other securities or
rights of the Company by the Shareholder, the number of Shares shall be
adjusted appropriately, and this Agreement and the obligations hereunder
shall attach to any additional shares of Common Stock or other
securities or rights of the Company issued to or acquired by the
Shareholder.
6. Certain Other Agreements. (a) The Shareholder will notify
Purchaser immediately if any proposals are received by, any information
is requested from, or any negotiations or discussions are sought to be
initiated or continued with such Shareholder or its representatives or
agents, if any, in each case in connection with any Acquisition Proposal
(as such term is defined in the Stock Purchase Agreement) indicating, in
connection with such notice, the name of the person making such
Acquisition Proposal and the terms and conditions of any proposals or
offers. The Shareholder agrees that it will immediately cease and cause
to be terminated any existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any Acquisition
Proposal. Such Shareholder agrees that it shall keep Purchaser
informed, on a current basis, of the status and terms of any Acquisition
Proposal. Such Shareholder agrees that it will not, directly or
indirectly: (i) initiate, solicit or encourage, or take any action to
facilitate the making of, any offer or proposal which constitutes or is
reasonably likely to lead to any Acquisition Proposal, or (ii) in the
event of an unsolicited written Acquisition Proposal, engage in
negotiations or discussions with, or provide any information or data to,
any person (other than Purchaser, any of its affiliates or
representatives and except for information which has been previously
publicly disseminated by the Company) relating to any Acquisition
Proposal. The foregoing shall not apply to the extent that it is
inconsistent with any of Shareholder's duties as a director and/or
officer of the Company.
<PAGE>
<PAGE>
(b) Shareholder agrees that he shall not exercise on or prior to
the Closing (as defined in the Stock Purchase Agreement) any option to
purchase shares of Common Stock.
7. Further Assurances. The Shareholder shall, upon request
of Purchaser, execute and deliver any additional documents and take such
further actions as may reasonably be deemed by Purchaser to be necessary
or desirable to carry out the provisions hereof.
8. Termination. This Agreement, and all rights and
obligations of the parties hereunder, shall terminate immediately upon
the termination of the Stock Purchase Agreement in accordance with its
terms; provided, however, that Sections 8 and 9 shall survive any
termination of this Agreement.
9. Expenses. All fees and expenses incurred by any one party
hereto shall be borne by the party incurring such fees and expenses;
provided, that if any legal action is instituted to enforce or interpret
the terms of this Agreement, the prevailing party in such action shall
be entitled, in addition to any other relief to which the party is
entitled, to reimbursement of its actual attorneys fees.
10. Public Announcements. The Shareholder and Purchaser each
agree that it will not issue any press release or otherwise make any
public statement with respect to this Agreement or the transactions
contemplated hereby without the prior consent of the other party, which
consent shall not be unreasonably withheld or delayed; provided,
however, that such disclosure can be made without obtaining such prior
consent if (i) the disclosure is required by law, and (ii) the party
making such disclosure has first used its best efforts to consult with
the other party about the form and substance of such disclosure.
11. Miscellaneous.
(a) Capitalized terms used and not otherwise defined in this
Agreement shall have the respective meanings assigned to such terms in
the Stock Purchase Agreement.
(b) All notices and other communications hereunder shall be in
writing and shall be deemed given upon (i) transmitter's confirmation of
a receipt of a facsimile transmission, (ii) confirmed delivery by a
standard overnight carrier or when delivered by hand or (iii) the
expiration of five business days after the day when mailed in the United
States by certified or registered mail, postage prepaid, addressed at
the following addresses (or at such other address for a party as shall
be specified by like notice):
(A) if to the Shareholder, to:
Ronald L. Bogh
904 East 10th Ave.
McMinnville, Or. 97128
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<PAGE>
(B) if to Purchaser, to:
Dash Multi-Corp., Inc.
2500 Adie Road
Maryland Heights, Missouri 63043
Telephone: (314) 432-3200
Facsimile: (314) 432-3210
Attention: Marvin S. Wool
Chief Executive Officer
with a copy to:
Thompson Coburn LLP
One Mercantile Center
St. Louis, Missouri 63101
Telephone: (314) 552-6000
Facsimile: (314) 552-7000
Attention: Thomas A. Litz, Esq.
(c) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall be
considered one and the same agreement.
(e) This Agreement (including the Stock Purchase Agreement and
any other documents and instruments referred to herein or therein)
constitutes the entire agreement, and supersedes all prior agreements
and understandings, whether written and oral, among the parties hereto
with respect to the subject matter hereof.
(f) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Missouri without giving effect
to the principles of conflicts of laws thereof.
(g) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto
(whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be
enforceable by, the parties and their respective heirs, legatees,
successors and permitted assigns, and the provisions of this Agreement
are not intended to confer upon any person other than the parties hereto
any rights or remedies hereunder.
(h) If any term, provision, covenant or restriction herein is
held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable or against its regulatory policy, the
remainder of the terms, provisions, covenants and restrictions of this
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<PAGE>
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
(i) Each of the parties hereto acknowledges and agrees that in
the event of any breach of this Agreement, each non-breaching party
would be irreparably and immediately harmed and could not be made whole
by monetary damages. It is accordingly agreed that the parties hereto
(i) will waive, in any action for specific performance, the defense of
adequacy of a remedy at law, and (ii) shall be entitled, in addition to
any other remedy to which they may be entitled at law or in equity, to
compel specific performance of this Agreement.
(j) No amendment, modification or waiver in respect of this
Agreement shall be effective against any party unless it shall be in
writing and signed by such party.
IN WITNESS WHEREOF, Purchaser and the Shareholder have caused this
Agreement to be duly executed and delivered as of the date first written
above.
DASH MULTI-CORP., INC.
By /s/ Marvin S. Wool
-----------------------------------------
Marvin S. Wool, Chief Executive Officer
/s/ Ronald L. Bogh
-----------------------------------------
Ronald L. Bogh
<PAGE>
<PAGE>
Annex I
-------
(1) Number of Shares Owned
Beneficially and of Record: 601,300
(2) Number of Shares Which
Shareholder Will Tender
Pursuant to Section 3(a): 481,040
<PAGE>
<PAGE>
EXHIBIT J
SHAREHOLDER AGREEMENT OF MR. NELSON
<PAGE>
<PAGE>
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "Agreement"), dated as of April
8, 1999, by and between Dash Multi-Corp., Inc. a Missouri corporation
("Purchaser"), and Douglas C. Nelson (the "Shareholder").
WHEREAS, the Shareholder is, as of the date hereof, the record and
beneficial owner of the shares of common stock, no par value (the
"Common Stock"), of R-B Rubber Products, Inc., an Oregon corporation
(the "Company"), set forth on Annex I hereto;
WHEREAS, Purchaser and the Company concurrently herewith are
entering into a Stock Purchase Agreement dated as of the date hereof
(the "Stock Purchase Agreement"), which provides, among other things,
for the acquisition by means of a cash tender offer (the "Offer") of 70%
of the outstanding shares of Common Stock upon the terms and subject to
the conditions set forth in the Stock Purchase Agreement; and
WHEREAS, in order to induce Purchaser to enter into the Stock
Purchase Agreement, the Shareholder has agreed to enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
execution and delivery by Purchaser of the Stock Purchase Agreement and
the mutual representations, warranties, covenants and agreements set
forth herein and therein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Representations and Warranties of the Shareholder. The
Shareholder hereby represents and warrants to Purchaser as follows:
(a) Such Shareholder is the record and beneficial owner of the
shares of Common Stock (as may be adjusted from time to time pursuant to
Section 5 hereof, the "Shares") set forth opposite his name on Annex I
to this Agreement.
(b) Such Shareholder has the legal capacity to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby.
(c) This Agreement has been validly executed and delivered by
such Shareholder and constitutes the legal, valid and binding obligation
of such Shareholder, enforceable against such Shareholder in accordance
with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally, and
(ii) the availability of the remedy of specific performance or
injunctive or other forms of equitable relief may be subject to
equitable defenses and would be subject to the discretion of the court
before which any proceeding therefor may be brought.
<PAGE>
<PAGE>
(d) Neither the execution and delivery of this Agreement nor the
consummation by such Shareholder of the transactions contemplated hereby
will violate any other agreement to which such Shareholder is a party.
(e) The Shares and the certificates representing the Shares
owned by such Shareholder are now and at all times during the term
hereof will be held by such Shareholder, or by a nominee or custodian
for the benefit of such Shareholder, free and clear of all liens,
claims, security interests, proxies, voting trusts or agreements,
understandings or arrangements or any other encumbrances whatsoever,
except for any such encumbrances or proxies arising hereunder.
2. Representations and Warranties of Purchaser. Purchaser
hereby represents and warrants to the Shareholder as follows:
(a) Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Missouri, and
Purchaser has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by Purchaser and constitutes the legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance
with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally and
(ii) the availability of the remedy of specific performance or
injunctive or other forms of equitable relief may be subject to
equitable defenses and would be subject to the discretion of the court
before which any proceeding therefor may be brought.
(c) Neither the execution and delivery of this Agreement nor the
consummation by Purchaser of the transactions contemplated hereby will
result in a violation of, or a default under, or conflict with, any
contract, trust, commitment, agreement, understanding, arrangement or
restriction of any kind to which Purchaser is a party or bound. The
consummation by Purchaser of the transactions contemplated hereby will
not violate, or require any consent, approval, or notice under, any
provision of any judgment, order, decree, statute, law, rule or
regulation applicable to Purchaser, except for any necessary filing
under state takeover laws.
3. Purchase and Sale of the Shares. (a) The Shareholder
hereby agrees that he shall tender the number of Shares set forth on
Annex I into the Offer promptly, and in any event no later than the
tenth business day following the commencement of the Offer pursuant to
Section 1.1 of the Stock Purchase Agreement, and that such Shareholder
shall not withdraw any Shares so tendered unless the Offer is terminated
or has expired. Purchaser shall agree to purchase all the Shares so
tendered at a price per Share equal to $3.00 per Share or any higher
price that may be paid in the Offer; provided, however, that Purchaser's
obligation to accept for payment and pay for the Shares in the Offer is
subject to all the terms and conditions of the Offer set forth in the
Stock Purchase Agreement and Annex A thereto.
<PAGE>
<PAGE>
(b) In the event that within five business days prior to the
expiration of the Offer, fewer than 70% of the Company's outstanding
shares shall have been validly tendered pursuant to the Offer and not
withdrawn, upon the request of Purchaser, the Shareholder shall tender
such number of Shares in addition to those to be tendered pursuant to
Section 3(a) as set forth in Annex I as Shareholder is directed by
Purchaser, but in no event shall Shareholder be obligated to tender more
than the total number of shares then owned by the Shareholder.
4. Transfer of the Shares. Prior to the termination of this
Agreement, except as otherwise provided herein, the Shareholder shall
not: (i) transfer (which term shall include, without limitation, for
the purposes of this Agreement, any sale, gift, pledge or other
disposition), or consent to any transfer of, any or all of the Shares;
(ii) enter into any contract, option or other agreement or understanding
with respect to any transfer of any or all of the Shares or any interest
therein; (iii) grant any proxy, power-of-attorney or other authorization
or consent in or with respect to the Shares; (iv) deposit the Shares
into a voting trust or enter into a voting agreement or arrangement with
respect to the Shares, or (v) take any other action that would in any
way restrict, limit or interfere with the performance of such
Shareholder's obligations hereunder or the transactions contemplated
hereby.
5. Certain Events. In the event of any stock split, stock
dividend, merger, reorganization, recapitalization or other change in
the capital structure of the Company affecting the Common Stock or the
acquisition of additional shares of Common Stock or other securities or
rights of the Company by the Shareholder, the number of Shares shall be
adjusted appropriately, and this Agreement and the obligations hereunder
shall attach to any additional shares of Common Stock or other
securities or rights of the Company issued to or acquired by the
Shareholder.
6. Certain Other Agreements. (a) The Shareholder will notify
Purchaser immediately if any proposals are received by, any information
is requested from, or any negotiations or discussions are sought to be
initiated or continued with such Shareholder or its representatives or
agents, if any, in each case in connection with any Acquisition Proposal
(as such term is defined in the Stock Purchase Agreement) indicating, in
connection with such notice, the name of the person making such
Acquisition Proposal and the terms and conditions of any proposals or
offers. The Shareholder agrees that it will immediately cease and cause
to be terminated any existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any Acquisition
Proposal. Such Shareholder agrees that it shall keep Purchaser
informed, on a current basis, of the status and terms of any Acquisition
Proposal. Such Shareholder agrees that it will not, directly or
indirectly: (i) initiate, solicit or encourage, or take any action to
facilitate the making of, any offer or proposal which constitutes or is
reasonably likely to lead to any Acquisition Proposal, or (ii) in the
event of an unsolicited written Acquisition Proposal, engage in
negotiations or discussions with, or provide any information or data to,
any person (other than Purchaser, any of its affiliates or
representatives and except for information which has been previously
publicly disseminated by the Company) relating to any Acquisition
Proposal. The foregoing shall not apply to the extent that it is
inconsistent with any of Shareholder's duties as a director and/or
officer of the Company.
<PAGE>
<PAGE>
(b) Shareholder agrees that he shall not exercise on or prior to
the Closing (as defined in the Stock Purchase Agreement) any option to
purchase shares of Common Stock.
(c) Shareholder hereby irrevocably waives, effective from and
after the Closing, his right to require the Company to guarantee a price
per share on shares of the Common Stock which he may sell, as more
particularly described in Section 5 of that certain Non-Competition,
Price Guaranty and Release Agreement dated as of January 31, 1998.
(d) Shareholder hereby represents and warrants to Purchaser that
Shareholder does not own or possess any option, right or warrant to
acquire any Common Stock.
7. Further Assurances. The Shareholder shall, upon request
of Purchaser, execute and deliver any additional documents and take such
further actions as may reasonably be deemed by Purchaser to be necessary
or desirable to carry out the provisions hereof.
8. Termination. This Agreement, and all rights and
obligations of the parties hereunder, shall terminate immediately upon
the termination of the Stock Purchase Agreement in accordance with its
terms; provided, however, that Sections 8 and 9 shall survive any
termination of this Agreement.
9. Expenses. All fees and expenses incurred by any one party
hereto shall be borne by the party incurring such fees and expenses;
provided, that if any legal action is instituted to enforce or interpret
the terms of this Agreement, the prevailing party in such action shall
be entitled, in addition to any other relief to which the party is
entitled, to reimbursement of its actual attorneys fees.
10. Public Announcements. The Shareholder and Purchaser each
agree that it will not issue any press release or otherwise make any
public statement with respect to this Agreement or the transactions
contemplated hereby without the prior consent of the other party, which
consent shall not be unreasonably withheld or delayed; provided,
however, that such disclosure can be made without obtaining such prior
consent if (i) the disclosure is required by law, and (ii) the party
making such disclosure has first used its best efforts to consult with
the other party about the form and substance of such disclosure.
11. Miscellaneous.
(a) Capitalized terms used and not otherwise defined in this
Agreement shall have the respective meanings assigned to such terms in
the Stock Purchase Agreement.
(b) All notices and other communications hereunder shall be in
writing and shall be deemed given upon (i) transmitter's confirmation of
a receipt of a facsimile transmission, (ii) confirmed delivery by a
standard overnight carrier or when delivered by hand or (iii) the
expiration of five business days after the day when mailed in the United
States by certified or
<PAGE>
<PAGE>
registered mail, postage prepaid, addressed at the following addresses
(or at such other address for a party as shall be specified by like
notice):
(A) if to the Shareholder, to:
Douglas C. Nelson
1002 Bel Aire Circle
Las Vegas, NV 89109
(B) if to Purchaser, to:
Dash Multi-Corp., Inc.
2500 Adie Road
Maryland Heights, Missouri 63043
Telephone: (314) 432-3200
Facsimile: (314) 432-3210
Attention: Marvin S. Wool
Chief Executive Officer
with a copy to:
Thompson Coburn LLP
One Mercantile Center
St. Louis, Missouri 63101
Telephone: (314) 552-6000
Facsimile: (314) 552-7000
Attention: Thomas A. Litz, Esq.
(c) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall be
considered one and the same agreement.
(e) This Agreement (including the Stock Purchase Agreement and
any other documents and instruments referred to herein or therein)
constitutes the entire agreement, and supersedes all prior agreements
and understandings, whether written and oral, among the parties hereto
with respect to the subject matter hereof.
(f) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Missouri without giving effect
to the principles of conflicts of laws thereof.
(g) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto
(whether by operation of law or otherwise) without
<PAGE>
<PAGE>
the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by, the parties and their respective
heirs, legatees, successors and permitted assigns, and the provisions of
this Agreement are not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.
(h) If any term, provision, covenant or restriction herein is
held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable or against its regulatory policy, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
(i) Each of the parties hereto acknowledges and agrees that in
the event of any breach of this Agreement, each non-breaching party
would be irreparably and immediately harmed and could not be made whole
by monetary damages. It is accordingly agreed that the parties hereto
(i) will waive, in any action for specific performance, the defense of
adequacy of a remedy at law, and (ii) shall be entitled, in addition to
any other remedy to which they may be entitled at law or in equity, to
compel specific performance of this Agreement.
(j) No amendment, modification or waiver in respect of this
Agreement shall be effective against any party unless it shall be in
writing and signed by such party.
IN WITNESS WHEREOF, Purchaser and the Shareholder have caused this
Agreement to be duly executed and delivered as of the date first written
above.
DASH MULTI-CORP., INC.
By /s/ Marvin S. Wool
---------------------------------------
Marvin S. Wool, Chief Executive Officer
/s/ Douglas C. Nelson
---------------------------------------
Douglas C. Nelson
<PAGE>
<PAGE>
Annex I
-------
(1) Number of Shares Owned
Beneficially and of Record: 407,000
(2) Number of Shares Which
Shareholder Will Tender
Pursuant to Section 3(a): 407,000
<PAGE>
<PAGE>
EXHIBIT K
SHAREHOLDER AGREEMENT OF MR. REIMANN
<PAGE>
<PAGE>
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "Agreement"), dated as of April
8, 1999, by and between Dash Multi-Corp., Inc. a Missouri corporation
("Purchaser"), and James V. Reimann (the "Shareholder").
WHEREAS, the Shareholder is, as of the date hereof, the record and
beneficial owner of the shares of common stock, no par value (the
"Common Stock"), of R-B Rubber Products, Inc., an Oregon corporation
(the "Company"), set forth on Annex I hereto;
WHEREAS, Purchaser and the Company concurrently herewith are
entering into a Stock Purchase Agreement dated as of the date hereof
(the "Stock Purchase Agreement"), which provides, among other things,
for the acquisition by means of a cash tender offer (the "Offer") of 70%
of the outstanding shares of Common Stock upon the terms and subject to
the conditions set forth in the Stock Purchase Agreement; and
WHEREAS, in order to induce Purchaser to enter into the Stock
Purchase Agreement, the Shareholder has agreed to enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
execution and delivery by Purchaser of the Stock Purchase Agreement and
the mutual representations, warranties, covenants and agreements set
forth herein and therein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Representations and Warranties of the Shareholder. The
Shareholder hereby represents and warrants to Purchaser as follows:
(a) Such Shareholder is the record and beneficial owner of the
shares of Common Stock (as may be adjusted from time to time pursuant to
Section 5 hereof, the "Shares") set forth opposite his name on Annex I
to this Agreement.
(b) Such Shareholder has the legal capacity to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby.
(c) This Agreement has been validly executed and delivered by
such Shareholder and constitutes the legal, valid and binding obligation
of such Shareholder, enforceable against such Shareholder in accordance
with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally, and
(ii) the availability of the remedy of specific performance or
injunctive or other forms of equitable relief may be subject to
equitable defenses and would be subject to the discretion of the court
before which any proceeding therefor may be brought.
<PAGE>
<PAGE>
(d) Neither the execution and delivery of this Agreement nor the
consummation by such Shareholder of the transactions contemplated hereby
will violate any other agreement to which such Shareholder is a party.
(e) The Shares and the certificates representing the Shares
owned by such Shareholder are now and at all times during the term
hereof will be held by such Shareholder, or by a nominee or custodian
for the benefit of such Shareholder, free and clear of all liens,
claims, security interests, proxies, voting trusts or agreements,
understandings or arrangements or any other encumbrances whatsoever,
except for any such encumbrances or proxies arising hereunder.
2. Representations and Warranties of Purchaser. Purchaser
hereby represents and warrants to the Shareholder as follows:
(a) Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Missouri, and
Purchaser has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by Purchaser and constitutes the legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance
with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally and
(ii) the availability of the remedy of specific performance or
injunctive or other forms of equitable relief may be subject to
equitable defenses and would be subject to the discretion of the court
before which any proceeding therefor may be brought.
(c) Neither the execution and delivery of this Agreement nor the
consummation by Purchaser of the transactions contemplated hereby will
result in a violation of, or a default under, or conflict with, any
contract, trust, commitment, agreement, understanding, arrangement or
restriction of any kind to which Purchaser is a party or bound. The
consummation by Purchaser of the transactions contemplated hereby will
not violate, or require any consent, approval, or notice under, any
provision of any judgment, order, decree, statute, law, rule or
regulation applicable to Purchaser, except for any necessary filing
under state takeover laws.
3. Purchase and Sale of the Shares. (a) The Shareholder
hereby agrees that he shall tender the number of Shares set forth on
Annex I into the Offer promptly, and in any event no later than the
tenth business day following the commencement of the Offer pursuant to
Section 1.1 of the Stock Purchase Agreement, and that such Shareholder
shall not withdraw any Shares so tendered unless the Offer is terminated
or has expired. Purchaser shall agree to purchase all the Shares so
tendered at a price per Share equal to $3.00 per Share or any higher
price that may be paid in the Offer; provided, however, that Purchaser's
obligation to accept for payment and pay for the Shares in the Offer is
subject to all the terms and conditions of the Offer set forth in the
Stock Purchase Agreement and Annex A thereto.
<PAGE>
<PAGE>
(b) In the event that within five business days prior to the
expiration of the Offer, fewer than 70% of the Company's outstanding
shares shall have been validly tendered pursuant to the Offer and not
withdrawn, upon the request of Purchaser, the Shareholder shall tender
such number of Shares in addition to those to be tendered pursuant to
Section 3(a) as set forth in Annex I as Shareholder is directed by
Purchaser, but in no event shall Shareholder be obligated to tender more
than the total number of shares then owned by the Shareholder.
4. Transfer of the Shares. Prior to the termination of this
Agreement, except as otherwise provided herein, the Shareholder shall
not: (i) transfer (which term shall include, without limitation, for
the purposes of this Agreement, any sale, gift, pledge or other
disposition), or consent to any transfer of, any or all of the Shares;
(ii) enter into any contract, option or other agreement or understanding
with respect to any transfer of any or all of the Shares or any interest
therein; (iii) grant any proxy, power-of-attorney or other authorization
or consent in or with respect to the Shares; (iv) deposit the Shares
into a voting trust or enter into a voting agreement or arrangement with
respect to the Shares, or (v) take any other action that would in any
way restrict, limit or interfere with the performance of such
Shareholder's obligations hereunder or the transactions contemplated
hereby.
5. Certain Events. In the event of any stock split, stock
dividend, merger, reorganization, recapitalization or other change in
the capital structure of the Company affecting the Common Stock or the
acquisition of additional shares of Common Stock or other securities or
rights of the Company by the Shareholder, the number of Shares shall be
adjusted appropriately, and this Agreement and the obligations hereunder
shall attach to any additional shares of Common Stock or other
securities or rights of the Company issued to or acquired by the
Shareholder.
6. Certain Other Agreements. (a) The Shareholder will notify
Purchaser immediately if any proposals are received by, any information
is requested from, or any negotiations or discussions are sought to be
initiated or continued with such Shareholder or its representatives or
agents, if any, in each case in connection with any Acquisition Proposal
(as such term is defined in the Stock Purchase Agreement) indicating, in
connection with such notice, the name of the person making such
Acquisition Proposal and the terms and conditions of any proposals or
offers. The Shareholder agrees that it will immediately cease and cause
to be terminated any existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any Acquisition
Proposal. Such Shareholder agrees that it shall keep Purchaser
informed, on a current basis, of the status and terms of any Acquisition
Proposal. Such Shareholder agrees that it will not, directly or
indirectly: (i) initiate, solicit or encourage, or take any action to
facilitate the making of, any offer or proposal which constitutes or is
reasonably likely to lead to any Acquisition Proposal, or (ii) in the
event of an unsolicited written Acquisition Proposal, engage in
negotiations or discussions with, or provide any information or data to,
any person (other than Purchaser, any of its affiliates or
representatives and except for information which has been previously
publicly disseminated by the Company) relating to any Acquisition
Proposal. The foregoing shall not apply to the extent that it is
inconsistent with any of Shareholder's duties as a director and/or
officer of the Company.
<PAGE>
<PAGE>
(b) Shareholder agrees that he shall not exercise on or prior to
the Closing (as defined in the Stock Purchase Agreement) any option to
purchase shares of Common Stock.
7. Further Assurances. The Shareholder shall, upon request
of Purchaser, execute and deliver any additional documents and take such
further actions as may reasonably be deemed by Purchaser to be necessary
or desirable to carry out the provisions hereof.
8. Termination. This Agreement, and all rights and
obligations of the parties hereunder, shall terminate immediately upon
the termination of the Stock Purchase Agreement in accordance with its
terms; provided, however, that Sections 8 and 9 shall survive any
termination of this Agreement.
9. Expenses. All fees and expenses incurred by any one party
hereto shall be borne by the party incurring such fees and expenses;
provided, that if any legal action is instituted to enforce or interpret
the terms of this Agreement, the prevailing party in such action shall
be entitled, in addition to any other relief to which the party is
entitled, to reimbursement of its actual attorneys fees.
10. Public Announcements. The Shareholder and Purchaser each
agree that it will not issue any press release or otherwise make any
public statement with respect to this Agreement or the transactions
contemplated hereby without the prior consent of the other party, which
consent shall not be unreasonably withheld or delayed; provided,
however, that such disclosure can be made without obtaining such prior
consent if (i) the disclosure is required by law, and (ii) the party
making such disclosure has first used its best efforts to consult with
the other party about the form and substance of such disclosure.
11. Miscellaneous.
(a) Capitalized terms used and not otherwise defined in this
Agreement shall have the respective meanings assigned to such terms in
the Stock Purchase Agreement.
(b) All notices and other communications hereunder shall be in
writing and shall be deemed given upon (i) transmitter's confirmation of
a receipt of a facsimile transmission, (ii) confirmed delivery by a
standard overnight carrier or when delivered by hand or (iii) the
expiration of five business days after the day when mailed in the United
States by certified or registered mail, postage prepaid, addressed at
the following addresses (or at such other address for a party as shall
be specified by like notice):
<PAGE>
<PAGE>
(A) if to the Shareholder, to:
James V. Reimann
5605 Inland Shores Way N.
Suite 202
Keizer, OR 97303
(B) if to Purchaser, to:
Dash Multi-Corp., Inc.
2500 Adie Road
Maryland Heights, Missouri 63043
Telephone: (314) 432-3200
Facsimile: (314) 432-3210
Attention: Marvin S. Wool
Chief Executive Officer
with a copy to:
Thompson Coburn LLP
One Mercantile Center
St. Louis, Missouri 63101
Telephone: (314) 552-6000
Facsimile: (314) 552-7000
Attention: Thomas A. Litz, Esq.
(c) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall be
considered one and the same agreement.
(e) This Agreement (including the Stock Purchase Agreement and
any other documents and instruments referred to herein or therein)
constitutes the entire agreement, and supersedes all prior agreements
and understandings, whether written and oral, among the parties hereto
with respect to the subject matter hereof.
(f) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Missouri without giving effect
to the principles of conflicts of laws thereof.
(g) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto
(whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be
enforceable by, the parties and their
<PAGE>
<PAGE>
respective heirs, legatees, successors and permitted assigns, and the
provisions of this Agreement are not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder.
(h) If any term, provision, covenant or restriction herein is
held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable or against its regulatory policy, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
(i) Each of the parties hereto acknowledges and agrees that in
the event of any breach of this Agreement, each non-breaching party
would be irreparably and immediately harmed and could not be made whole
by monetary damages. It is accordingly agreed that the parties hereto
(i) will waive, in any action for specific performance, the defense of
adequacy of a remedy at law, and (ii) shall be entitled, in addition to
any other remedy to which they may be entitled at law or in equity, to
compel specific performance of this Agreement.
(j) No amendment, modification or waiver in respect of this
Agreement shall be effective against any party unless it shall be in
writing and signed by such party.
IN WITNESS WHEREOF, Purchaser and the Shareholder have caused this
Agreement to be duly executed and delivered as of the date first written
above.
DASH MULTI-CORP., INC.
By /s/ Marvin S. Wool
---------------------------------------
Marvin S. Wool, Chief Executive Officer
/s/ James V. Reimann
---------------------------------------
James V. Reimann
<PAGE>
<PAGE>
Annex I
-------
(1) Number of Shares Owned
Beneficially and of Record: 47,500
(2) Number of Shares Which
Shareholder Will Tender
Pursuant to Section 3(a): 47,500
