As filed with the Securities and Exchange Commission on July 8, 1997
Registration No. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
------------------
DT INDUSTRIES, INC. Delaware 44-0537828
DT CAPITAL TRUST Delaware 43-1785544
(Exact name of Registrant as (State or other (I.R.S. Employer
specified in its charter) jurisdiction of Identification No.)
incorporation or organization)
Suite 2-300
1949 E. Sunshine
Springfield, MO 65804
(417) 890-0102
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
------------------
Stephen J. Gore
President and Chief Executive Officer
DT Industries, Inc.
Suite 2-300
1949 E. Sunshine
Springfield, MO 65804
(417) 890-0102
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------
Copy to:
MATTHEW G. MALONEY, ESQ.
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, D.C. 20037
(202) 785-9700
------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |x|
-
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |x|
-
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Per Aggregate Offering Amount of
Securities to be Registered Registered Share(1)(2) Price(1)(2) Registration Fee(1)
- --------------------------- ------------ ------------------ ------------------ -------------------
<S> <C> <C> <C> <C>
Convertible Preferred
Securities of DT
Capital Trust 1,400,000 $50.00 $70,000,000 $21,212.12
7.16% Convertible Junior
Subordinated
Deferrable Interest
Debentures Due 2012
of DT Industries, Inc. (3) -- -- --
Common Stock of
DT Industries, Inc. (4) -- -- --
Preferred Securities
Guarantee(5) (6) -- -- --
--------- ----------- ----------
Total 1,400,000 100% $70,000,000 $21,212.12
========= =========== ==========
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) Exclusive of accrued interest and distributions, if any.
(3) $72,165,000 in aggregate principal amount of 7.16% Convertible Junior
Subordinated Deferrable Interest Debentures Due 2012 (the "Convertible Junior
Subordinated Debentures") of DT Industries, Inc. (the "Company") were issued and
sold to DT Capital Trust (the "Trust") in connection with the issuance by the
Trust of 1,400,000 of its 7.16% Convertible Preferred Securities (the
"Convertible Preferred Securities") and 43,300 of its 7.16% Convertible Common
Securities (the "Common Securities"). The Convertible Junior Subordinated
Debentures may be distributed, under certain circumstances, to holders of
Convertible Preferred Securities and Common Securities for no additional
consideration.
(4) Such indeterminable number of shares of the Company's Common Stock as may
be issuable upon conversion of the Convertible Preferred Securities registered
hereunder, including such shares as may be issuable pursuant to anti-dilution
adjustments.
(5) Includes the rights of holders of the Convertible Preferred Securities
under the Preferred Securities Guarantee and certain back-up undertakings as
described in the Registration Statement, including the obligations of the
Company under the Preferred Securities Guarantee, the Declaration of Trust of
the Trust and the Indenture pursuant to which the Convertible Junior
Subordinated Debentures were issued. The Guarantee is a guaranty by DT of
payments and distributions on the Convertible Preferred Securities, to the
extent the Trust has funds available therefor. However, together with the
Convertible Junior Subordinated Debentures, the Indenture pursuant to which such
debentures were issued and the Declaration of Trust of the Trust, the Company
has fully, irrevocably and unconditionally guaranteed all of the Trust's
obligations under the Convertible Preferred Securities.
(6) No separate consideration will be received for the Preferred Securities
Guarantee and the back-up undertakings.
---------------
The Registrant hereby amends this Registration Statement on such dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration Statement shall
become effective on such date as the Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.
================================================================================
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
<PAGE>
PROSPECTUS (Subject to Completion)
Dated July 8, 1997
1,400,000 (TIDES) SM*
DT CAPITAL TRUST
7.16% Convertible Preferred Securities
Term Income Deferrable Equity Securities (TIDES) SM*
(liquidation preference $50 per Convertible Preferred Security)
fully and unconditionally guaranteed by, and convertible into Common Stock of,
DT INDUSTRIES, INC.
Distributions payable March 31, June 30, September 30 and December 31
This Prospectus relates to the 7.16% Convertible Preferred Securities, Term
Income Deferrable Equity Securities (TIDES)SM* or (TIDES)SM* (the "Convertible
Preferred Securities"), liquidation preference $50 per Convertible Preferred
Security, which represent undivided beneficial ownership interests in the assets
of DT Capital Trust, a statutory business trust formed under the laws of the
State of Delaware (the "Trust" or the "Issuer"), and the shares of the common
stock, par value $0.01 per share ("DT Common Stock") of DT Industries, Inc., a
Delaware corporation ("DT" or the "Company"), issuable upon conversion of the
Convertible Preferred Securities. The Convertible Preferred Securities were
issued and sold (the "Original Offering") on June 12, 1997 (the "Original
Offering Date") to the initial purchasers (see "Selling Holders") in
transactions exempt from the registration requirements of the Securities Act of
1933, as amended (the "Securities Act"), in the United States to persons
reasonably believed by the Issuer to be "qualified institutional buyers" (as
defined in Rule 144A under the Securities Act), to a limited number of
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act) or to certain persons in offshore transactions in
reliance on Regulation S. DT directly or indirectly owns all the common
securities issued by the Trust (the "Common Securities" and, together with the
Convertible Preferred Securities, the "Trust Securities"). The Issuer exists for
the sole purpose of issuing the Trust Securities and using the proceeds thereof
to purchase from DT its 7.16% Convertible Junior Subordinated Deferrable
Interest Debentures Due 2012 (the "Convertible Junior Subordinated Debentures")
having the terms described herein. The holders of the Convertible Preferred
Securities will have a preference with respect to cash distributions and amounts
payable upon liquidation, redemption or otherwise over the holders of the Common
Securities of the Issuer.
"Term Income Deferrable Equity Securities" and "TIDES" are service marks of
Credit Suisse First Boston Corporation.
For a discussion of certain factors that should be considered in connection with
an investment in the Convertible Preferred Securities, see "Risk Factors"
beginning on page 5.
(Continued on following page)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1997.
<PAGE>
(continued from front cover)
The Convertible Preferred Securities and the DT Common Stock issuable upon
conversion thereof (the "Offered Securities") may be offered and sold from time
to time by the holders named herein or by their transferees, pledgees, donees or
their successors (collectively, the "Selling Holders") pursuant to this
Prospectus. The Offered Securities may be sold by the Selling Holders from time
to time directly to purchasers or through agents, underwriters or dealers. See
"Plan of Distribution" and "Selling Holders." If required, the names of any such
agents or underwriters involved in the sale of the Offered Securities and the
applicable agent's commission, dealer's purchase price or underwriter's
discount, if any, will be set forth in an accompanying supplement to this
Prospectus (the "Prospectus Supplement"). The Selling Holders will receive all
of the net proceeds from the sale of the Offered Securities and will pay all
underwriting discounts and selling commissions, if any, applicable to any such
sale. The Company is responsible for payment of all other expenses incident to
the offer and sale of the Offered Securities. The Selling Holders and any
broker/dealers, agents or underwriters which participate in the distribution of
the Offered Securities may be deemed to be "underwriters" within the meaning of
the Securities Act, and any commission received by them and any profit on the
resale of the Offered Securities purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. See "Plan of
Distribution" for a description of indemnification arrangements.
Holders of the Convertible Preferred Securities are entitled to receive
cumulative cash distributions at an annual rate of 7.16% of the liquidation
preference of $50 per Convertible Preferred Security, accruing from the Original
Offering Date and payable quarterly in arrears on each March 31, June 30,
September 30 and December 31, commencing June 30, 1997. See "Description of the
Convertible Preferred Securities--Distributions". Pursuant to a guarantee (the
"Guarantee") by DT, the payment of distributions and payments on liquidation of
the Issuer or the redemption of Convertible Preferred Securities, as described
below, but only to the extent of funds of the Trust available therefor, are
guaranteed by DT to the extent described herein. DT's obligations under the
Guarantee are subordinate and junior to all other liabilities of DT except any
liabilities that may be made pari passu expressly by their terms, but are pari
passu with the most senior preferred stock issued from time to time, if any, by
DT and certain other related guarantees. See "Description of the Guarantee". If
DT fails to make interest payments on the Convertible Junior Subordinated
Debentures, the Issuer will have insufficient funds to pay distributions on the
Convertible Preferred Securities. The Guarantee does not cover payment of
distributions when the Issuer does not have sufficient funds to pay such
distributions. In such event, the remedy of a holder of Convertible Preferred
Securities is to enforce the rights of the Issuer under the Convertible Junior
Subordinated Debentures held by the Issuer. DT has, however, through the
Guarantee, the Convertible Junior Subordinated Debentures, the Indenture and the
Declaration (each as defined herein), taken together, fully, irrevocably and
unconditionally guaranteed all of the Issuer's obligations under the Convertible
Preferred Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that provides a
full, irrevocable and unconditional guarantee of the Issuer's obligations under
the Convertible Preferred Securities. See "Effect of Obligations Under the
Convertible Junior Subordinated Debentures and the Guarantee." The obligations
of DT under the Convertible Junior Subordinated Debentures are subordinate and
junior in right of payment to Senior Indebtedness (as defined herein) of DT. At
March 30, 1997, Senior Indebtedness of DT aggregated approximately $130.5
million (or $63.0 million of Senior Indebtedness after giving pro forma effect
to the Original Offering). See "Capitalization" and "Pro Forma Selected
Consolidated Financial Data". The terms of the Convertible Junior Subordinated
Debentures place no limitation on the amount of Senior Indebtedness that may be
incurred by DT.
DT has the right under the Indenture (as defined herein) for the Convertible
Junior Subordinated Debentures to defer the interest payments due from time to
time on the Convertible Junior Subordinated Debentures for successive periods
not exceeding 20 consecutive quarters for each such period, and, as a
consequence, quarterly distributions on the Convertible Preferred Securities
would be deferred by the Issuer (but would continue to accumulate quarterly and
accrue interest) until the end of any such interest deferral period. See "Risk
Factors--Option to Extend Interest Payment Period; Tax Consequences",
"Description of the Convertible Preferred Securities--Distributions" and
"Description of the Convertible Junior Subordinated Debentures--Option to Extend
Interest Payment Period".
Each Convertible Preferred Security is convertible in the manner described
herein at the option of the holder into shares of DT common stock, par value
$0.01 per share ("DT Common Stock"), at the rate of 1.2903
2
<PAGE>
shares of DT Common Stock for each Convertible Preferred Security (equivalent to
a conversion price of $38.75 per share of DT Common Stock), subject to
adjustment in certain circumstances. See "Description of the Convertible
Preferred Securities--Conversion Rights". The last reported sale price of DT
Common Stock, which is quoted under the symbol "DTII" on The Nasdaq Stock
Market's National Market ("NNM"), on July 7, 1997, was $35.625 per share.
The Convertible Preferred Securities are effectively redeemable at the option of
the Company, in whole or in part, from time to time, after June 1, 2000, at the
prices set forth herein, plus accrued and unpaid distributions thereon to the
date fixed for redemption (the "Redemption Price"). See "Description of the
Convertible Preferred Securities--Optional Redemption". Upon the repayment of
the Convertible Junior Subordinated Debentures at maturity or upon any
acceleration, earlier redemption or otherwise, the proceeds from such repayment
will be applied to redeem the Convertible Preferred Securities and Common
Securities on a pro rata basis. In addition, upon the occurrence of certain
events arising from a change in law or a change in legal interpretation, DT will
liquidate the Trust and cause to be distributed to the holders of the
Convertible Preferred Securities, on a pro rata basis, Convertible Junior
Subordinated Debentures or, in certain limited circumstances, will cause the
redemption of the Convertible Preferred Securities in whole at the liquidation
preference of $50 per security plus accrued and unpaid distributions. See
"Description of the Convertible Preferred Securities--Tax Event or Investment
Company Event Redemption or Distribution". See "Description of the Convertible
Junior Subordinated Debentures".
In the event of the liquidation of the Trust, the holders of the Convertible
Preferred Securities, after satisfaction of liabilities to creditors of the
Trust, will be entitled to receive for each Convertible Preferred Security a
liquidation preference of $50 plus accrued and unpaid distributions thereon to
the date of payment, unless, in connection with such liquidation, Convertible
Junior Subordinated Debentures are distributed to the holders of the Convertible
Preferred Securities. See "Description of the Convertible Preferred
Securities--Liquidation Distribution Upon Dissolution".
End of Cover Page
---------------
AVAILABLE INFORMATION
DT is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"SEC" or the "Commission"). Such reports, proxy statements, and other
information filed by DT can be inspected and copied at the public reference
facilities of the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, DC 20549, and at the following Regional Offices of the Commission:
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and Seven
World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material may also be obtained from the Public Reference Section of the SEC at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549, at prescribed
rates. The Commission maintains a website (http://www.sec.gov) that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. Copies of such
information may also be inspected at the reading room of the library of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W., 2nd
Floor, Washington, D.C. 20006.
DT has filed with the Commission a Registration Statement on Form S-3
(herein together with all amendments and exhibits thereto, called the
"Registration Statement") under the Securities Act with respect to the
securities offered by this Prospectus. This Prospectus does not contain all of
the information set forth or incorporated by reference in the Registration
Statement and the exhibits and schedules relating thereto, certain portions of
which have been omitted as permitted by the rules and regulations of the
Commission. For further information with respect to DT and the securities
offered by this Prospectus, reference is made to the Registration Statement and
the exhibits filed or incorporated as a part thereof, which are on file at the
offices of the Commission and may be obtained upon payment of the fee prescribed
by the Commission, or may be examined without charge at the offices of the
Commission. Statements contained in this Prospectus as to the contents of any
documents referred to are necessarily summaries thereof, and, in each such
instance, are qualified in all respects by reference to the applicable documents
filed with the Commission.
3
<PAGE>
No separate financial statements of the Issuer have been included herein.
DT does not consider that such financial statements would be material to holders
of the Convertible Preferred Securities because (i) all of the voting securities
of the Issuer will be owned, directly or indirectly, by DT, a reporting company
under the Exchange Act, (ii) the Issuer has no independent operations but exists
for the sole purpose of issuing securities representing undivided beneficial
interests in the assets of the Issuer and investing the proceeds thereof in
Convertible Junior Subordinated Debentures issued by DT and (iii) the
obligations of the Issuer under the Trust Securities are fully and
unconditionally guaranteed by DT as described herein. See "Description of the
Convertible Junior Subordinated Debentures" and "Description of the Guarantee".
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions of documents filed by DT (File No.
0-23400) with the SEC are incorporated in this Prospectus by reference: (a)
Annual Report on Form 10-K for the year ended June 30, 1996, filed with the
Commission on September 30, 1996, as amended by Amendment No. 1 to Annual Report
on Form 10-K/A, filed with the Commission on October 10, 1996; (b) Current
Report on Form 8-K, filed with the Commission on August 5, 1996, as amended by
Amendment No. 1 to Current Report on Form 8-K/A, filed with the Commission on
September 23, 1996; (c) Quarterly Reports on Form 10-Q for the quarters ended
September 29, 1996, December 29, 1996 and March 30, 1997; (d) Current Report on
Form 8-K, filed with the Commission on November 21, 1996; (e) the description of
DT's Common Stock which is contained in the Company's Registration Statement on
Form 8-A; (f) Current Report on Form 8-K, filed with the Commission on May 23,
1997; and (g) Current Report on Form 8-K, filed with the Commission on June 18,
1997 (relating to the Original Offering).
All documents filed by DT with the SEC pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of this offering shall be deemed to be incorporated by
reference in this Prospectus and to be a part of this Prospectus from the date
of filing of such documents.
Any statement contained in a document, all or a portion of which is
incorporated or deemed to be incorporated by reference herein, or contained in
this Prospectus, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
DT will provide without charge to each person to whom a copy of this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the documents referred to above which have been or may be
incorporated by reference in this Prospectus and any other information requested
thereby as described above under "Available Information". Such written or oral
request should be directed to the attention of Bruce P. Erdel, Vice
President--Finance, DT Industries, Inc., Corporate Centre, Suite 2-300, 1949 E.
Sunshine, Springfield, Missouri 65804, telephone: (417) 890-0102.
4
<PAGE>
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this Prospectus, and in the documents incorporated
by reference herein, that are not historical facts are forward-looking
statements that are subject to the safe harbor created by the Private Securities
Litigation Reform Act of 1995. When used in this Prospectus the words
"anticipate," "believe," "estimate," "expect" and similar expressions are
intended to identify such forward-looking statements. A number of important
factors could cause the Company's actual results for fiscal 1997 and beyond to
differ materially from those expressed in, or implied by, such forward-looking
statements. These factors include, without limitation, those listed below in
"Risk Factors."
RISK FACTORS
Prospective purchasers of the Convertible Preferred Securities should
carefully review the information contained elsewhere in this Prospectus and
should particularly consider the following matters:
Factors Relating to the Company and the Business
Rapid Growth; Integration of Recently-Acquired Operations. The Company has
made 14 acquisitions since its formation in 1992, including four acquisitions in
fiscal 1996 and two acquisitions, Mid-West Automation Enterprises, Inc.
("Mid-West") and Hansford Manufacturing Corporation ("Hansford"), subsequent to
June 30, 1996. Primarily as a result of these acquisitions, the Company's
historical consolidated net sales have increased from $50.6 million for fiscal
1993 to $235.9 million for fiscal 1996, and $286.7 million for the nine months
ended March 30, 1997. There can be no assurance that the Company will continue
to experience such rapid growth, that the Company will be successful in
integrating these operations or that such rapid growth and integration will not
divert management resources, cause temporary disruptions in the management of
the business or otherwise have a material adverse effect on the Company's
business, financial condition or results of operations. See "The Company."
Acquisition Strategy. The Company expects to continue a strategy of
identifying and acquiring companies with complementary products and services
which could be expected to enhance the Company's operations and profitability.
There can be no assurance that the Company will continue to identify suitable
new acquisition candidates, obtain financing necessary to complete such
acquisitions or acquire businesses on satisfactory terms or that any business
acquired by the Company will be integrated successfully into the Company's
operations or prove to be profitable.
Dependence on Significant Customers. The Company's sales are concentrated.
After giving effect to the acquisition of Mid-West, on a pro forma basis, sales
to a significant customer in the electronics industry accounted for 22.7% of pro
forma consolidated net sales for fiscal 1996 and the Company's top five
customers in fiscal 1996 accounted for 44.3% of the Company's pro forma
consolidated net sales. For the nine months ended March 30, 1997, sales to a
significant customer in the electronics industry accounted for 24.1% of
consolidated net sales and the Company's top five customers for the nine months
ended March 30, 1997 accounted for 45.7% of the Company's consolidated net
sales. The loss of, or reduced orders for products from, one or more of the
Company's significant customers could have a material adverse effect on the
Company's business, financial condition or results of operations. See "The
Company --Customers".
Fluctuations in Quarterly Results; Profitability of Fixed Price Contracts.
Because orders for certain of the Company's products can be several million
dollars, a relatively limited number of orders can constitute a meaningful
percentage of the Company's revenue in any one quarterly period. As a result, a
relatively small reduction or delay in the number of orders can have a material
impact on the timing of recognition of the Company's revenues. Certain of the
Company's revenues are derived from fixed price contracts. To the extent that
original cost estimates prove to be inaccurate, profitability from a particular
contract may be adversely affected. Gross margins in the Special Machines
segment may also vary between comparable periods as a result of the variations
in product mix between the various types of custom and proprietary equipment
manufactured by the Company. Accordingly, results of operations of the Company
for any particular quarter are not necessarily indicative of results that may be
expected for any subsequent quarter or related fiscal year.
5
<PAGE>
Susceptibility to General Economic Conditions. The Company's revenues and
results of operations will be subject to fluctuations based upon general
economic conditions. If there were to be a general economic downturn or a
recession in the United States or certain other markets, the Company believes
that certain of its customers may reduce or delay orders for the Company's
products, leading to a reduction in the Company's revenues and/or backlog. Most
of the factors that might influence customers and prospective customers to
reduce their capital budgets under these circumstances are beyond the Company's
control. In the event of such an economic downturn, the Company's business,
financial condition and operating results could be materially and adversely
affected. There can be no assurance that growth in the markets for the Company's
products will occur or that such growth will result in increased demand for the
Company's products. See "The Company".
Anti-Takeover Provisions. The existence of authorized but unissued capital
stock may have the effect of making more difficult or discouraging an
acquisition of the Company deemed undesirable by its Board of Directors. In
addition, the issuance of authorized but unissued preferred stock, which can be
effected by the Company's Board of Directors without stockholder approval, may
adversely affect the market price of, and voting and other rights attributable
to, the Common Stock. Provisions in the Company's Restated Certificate of
Incorporation permitting the Board to amend the Bylaws without stockholder vote
and provisions in the Bylaws permitting the Board to increase or decrease the
size of the Board could, alone or in combination with the authorized but
unissued capital stock, also deter or discourage acquisitions deemed undesirable
by the Board. Furthermore, the Company's Restated Certificate of Incorporation,
as amended, divides the Company's Board of Directors into three classes with
staggered terms, which could have the effect of making more difficult or
discouraging an acquisition of the Company deemed undesirable by the Board. In
addition, certain provisions of Delaware law applicable to the Company,
including Section 203 of the Delaware General Corporation Law, could have the
effect of delaying, deferring or preventing a change of control of the Company.
Stock Price Volatility. The market price of the DT Common Stock could
continue to fluctuate substantially due to a variety of factors, including
quarterly fluctuations in results of operations, the impact of acquisitions,
adverse circumstances affecting the introduction or market acceptance of new
products and services offered by the Company or its customers, changes in the
general economic environment, changes in earnings estimates by analysts, changes
in accounting principles, sales of DT Common Stock by existing holders, loss of
key personnel and other factors. The market price for the DT Common Stock may
also be affected by the Company's ability to meet analysts' expectations, and
any failure to meet such expectations, even if minor, could have a material
adverse effect on the market price of the DT Common Stock. In addition, the
stock market is subject to extreme price and volume fluctuations. This
volatility has had a significant effect on the market prices of securities
issued by many companies for reasons unrelated to the operating performance of
these companies. In the past, following periods of volatility in the market
price of a company's securities, securities class action litigation has often
been instituted against such a company. Any such litigation instigated against
the Company could result in substantial costs and a diversion of management's
attention and resources, which could have a material adverse effect on the
Company's business, operating results and financial condition.
Recent Surrender of Voting Control. Prior to November 25, 1996, certain
entities ("Harbour Group Affiliates"), all of whom are under the common control
of Sam Fox, collectively owned approximately 32.2% of the outstanding Common
Stock of the Company and, as a result, were able, as a practical matter, to
elect all of the directors of the Company and to exercise control over the
management and policies of the Company. In addition, Harbour Group Affiliates
have entered into certain agreements with the Company whereby such entities
provide the Company with operations consulting and corporate development
services as requested from time to time by the Company. Such affiliates have had
a significant role in assisting the Company in its pursuit of its acquisition
strategy. As a result of the equity offering completed on November 25, 1996 (the
"Equity Offering"), these entities reduced their collective ownership of Common
Stock to less than 4.1% of the shares outstanding. Subsequent to the Equity
Offering, three of the four directors of the Company who were executives or
employees of Harbour Group Affiliates have resigned from the Board of Directors
of the Company. Although Harbour Group Affiliates continue to provide the
Company with operations consulting and corporate development services, the
Company anticipates that such services are likely to diminish over time. There
can be no assurance that the surrender of practical control or the diminution in
involvement in the Company's affairs by Harbour Group Affiliates will not have a
material adverse effect on the Company.
6
<PAGE>
Factors Relating to the Convertible Preferred Securities
Subordination of Guarantee and Convertible Junior Subordinated Debentures.
DT's obligations under the Guarantee are unsecured, subordinate and junior in
right of payment to all other liabilities of DT, with certain limited
exceptions. The obligations of DT under the Convertible Junior Subordinated
Debentures are subordinate and junior in right of payment to Senior Indebtedness
(as defined herein) of DT. As of March 30, 1997, DT had approximately $130.5
million principal amount of Senior Indebtedness (or $63.0 million of Senior
Indebtedness after giving pro forma effect to the Original Offering). See
"Capitalization" and "Pro Forma Selected Consolidated Financial Data". There are
no terms of the Convertible Preferred Securities, the Convertible Junior
Subordinated Debentures or the Guarantee that limit DT's ability to incur
additional unsecured or secured indebtedness or liabilities, including
indebtedness or liabilities that would rank senior to the Convertible Junior
Subordinated Debentures and the Guarantee. See "Description of the
Guarantee--Status of the Guarantee; Subordination" and "Description of the
Convertible Junior Subordinated Debentures--Subordination".
The ability of the Issuer to pay amounts due on the Convertible Preferred
Securities is wholly dependent upon DT's making payments on the Convertible
Junior Subordinated Debentures as and when required.
Option to Extend Interest Payment Period; Tax Consequences. DT has the
right under the Indenture to defer interest payments from time to time on the
Convertible Junior Subordinated Debentures for successive periods (a "Deferral
Period") not exceeding 20 consecutive quarters for each such period. Upon the
termination of any Deferral Period and the payment of all amounts then due, DT
may select a new Deferral Period, subject to the requirements described herein.
As a consequence, during any such Deferral Period, quarterly distributions on
the Convertible Preferred Securities would be deferred (but would continue to
accrue with interest thereon) by the Issuer. In the event that DT exercises this
right, during such period DT (i) shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than stock
dividends paid by DT which consist of stock of the same class as that on which
the dividend is being paid and other than any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future or the redemption or
repurchase of any such rights pursuant thereto), (ii) shall not make any payment
of interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by DT that rank pari passu with or junior to the
Convertible Junior Subordinated Debentures, and (iii) shall not make any
guarantee payments with respect to the foregoing (other than pursuant to the
Guarantee). Prior to the termination of any such Deferral Period, DT may further
extend the Deferral Period; provided that such Deferral Period, together with
all previous and further extensions thereof, may not exceed 20 consecutive
quarters and that such Deferral Period may not extend beyond the maturity date
of the Convertible Junior Subordinated Debentures. See "Description of the
Convertible Preferred Securities--Distributions" and "Description of the
Convertible Junior Subordinated Debentures--Option to Extend Interest Payment
Period".
As a result of the existence of DT's option to defer interest payments, a
holder will be required to include interest in gross income for United States
Federal income tax purposes in advance of the receipt of cash. In addition, a
holder will not receive the cash from the Issuer related to accrued income
attributable to unpaid distributions on the Convertible Preferred Securities if
such holder disposes of or converts its Convertible Preferred Securities prior
to the record date for payment of distributions. Should a Deferral Period occur,
a holder of a Convertible Preferred Security will continue to accrue interest
income for United States Federal income tax purposes. See "United States
Taxation--Potential Extension of Interest Payment Period and Original Issue
Discount".
DT has no current intention of exercising its right to defer payments of
interest. However, should DT elect to exercise such right in the future, the
market price of the Convertible Preferred Securities is likely to be adversely
affected. A holder that disposes of its Convertible Preferred Securities during
a Deferral Period, therefore, might not receive the same return on its
investment as a holder that continues to hold its Convertible Preferred
Securities. In addition, as a result of the existence of DT's right to defer
interest payments, the market price of the Convertible Preferred Securities
(which represent a preferred undivided beneficial interest in the Convertible
Junior Subordinated Debentures) may be more volatile than other securities on
which original issue discount accrues that do not have such rights.
7
<PAGE>
Rights Under the Guarantee. The Guarantee Trustee (as defined herein) holds
the Guarantee for the benefit of the holders of the Convertible Preferred
Securities. The Guarantee guarantees to the holders of the Convertible Preferred
Securities the payment of (i) any accrued and unpaid distributions on the
Convertible Preferred Securities to the extent of funds of the Trust available
therefor, (ii) the amount payable upon redemption, including all accrued and
unpaid distributions, of the Convertible Preferred Securities called for
redemption by the Issuer, to the extent of funds of the Trust available therefor
and (iii) upon a voluntary or involuntary dissolution, winding up or termination
of the Issuer (other than in connection with a redemption of all of the
Convertible Preferred Securities), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on the Convertible
Preferred Securities to the date of payment to the extent of funds of the Trust
available therefor and (b) the amount of assets of the Issuer remaining
available for distribution to holders of the Convertible Preferred Securities
upon the liquidation of the Issuer. The holders of a majority in liquidation
amount of the Convertible Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee or to direct the exercise of any trust or power conferred
upon the Guarantee Trustee under the Guarantee. In the event of a payment
default on the Convertible Preferred Securities, any holder of the Convertible
Preferred Securities may institute a legal proceeding directly against DT to
enforce its rights under the Guarantee without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee or any other person or
entity. If DT were to default on its obligations under the Convertible Junior
Subordinated Debentures, the Issuer would lack available funds for the payment
of distributions or amounts payable on redemption of the Convertible Preferred
Securities or otherwise, and, in each such event, holders of the Convertible
Preferred Securities would not be able to rely upon the Guarantee for payment of
such amounts. Instead, the remedy of holders of the Convertible Preferred
Securities is to enforce the rights of the Issuer under the Convertible Junior
Subordinated Debentures held by the Issuer against DT pursuant to the terms of
the Convertible Junior Subordinated Debentures. Such holders may also vote to
appoint a Special Trustee who shall have the same rights, powers and privileges
of the DT Trustees (each as defined herein). See "Description of the
Guarantee--Status of the Guarantee; Subordination" and "Description of the
Convertible Junior Subordinated Debentures--Subordination" herein. The
Declaration provides that each holder of Convertible Preferred Securities by
acceptance thereof agrees to the provisions of the Guarantee (including the
subordination provisions thereof) and the Indenture (as defined herein).
Tax Event or Investment Company Event Redemption or Distribution. Upon the
occurrence of a Tax Event or Investment Company Event (as defined herein) DT
will, except in certain limited circumstances, cause the DT Trustees to
liquidate the Issuer and, after satisfaction of liabilities to creditors of the
Trust, cause Convertible Junior Subordinated Debentures to be distributed pro
rata to the holders of the Convertible Preferred Securities. In certain
circumstances, DT will have the right to redeem the Convertible Junior
Subordinated Debentures, in whole (but not in part), at par plus accrued and
unpaid interest, in lieu of a distribution of the Convertible Junior
Subordinated Debentures, in which event, after satisfaction of liabilities to
creditors of the Trust, the Convertible Preferred Securities will be redeemed in
whole at the liquidation preference of $50 per Convertible Preferred Security
plus accrued and unpaid distributions. In the case of a Tax Event, DT may also
elect to cause the Convertible Preferred Securities to remain outstanding and
pay Additional Interest (as defined herein) on the Convertible Junior
Subordinated Debentures. See "Description of the Convertible Preferred
Securities--Tax Event or Investment Company Event Redemption or Distribution"
and "Description of the Convertible Junior Subordinated Debentures--General".
Under current United States Federal income tax law, a distribution of the
Convertible Junior Subordinated Debentures would not be a taxable event to
holders of the Convertible Preferred Securities. However, if the relevant
Special Event (as defined herein) is a Tax Event which results in the Issuer
being treated as an association taxable as a corporation, the distribution would
likely constitute a taxable event to holders of the Convertible Preferred
Securities. See "United States Taxation--Receipt of Convertible Junior
Subordinated Debentures or Cash Upon Liquidation of the Issuer".
On February 6, 1997, President Clinton, as part of his Fiscal 1998 Budget
Proposal, proposed certain tax law changes that would, among other things, deny
interest deductions to corporate issuers of debt instruments under certain
circumstances. These proposals, were they to become effective, would not deny DT
a deduction otherwise available for interest paid in cash on the Convertible
Junior Subordinated Debentures, and thus would not give rise to a Tax Event.
However, there can be no assurance that subsequent proposals or final
legislation will not deny DT a deduction otherwise available for such interest
payments, which in turn could give rise to a Tax Event permitting DT to cause a
redemption of the Convertible
8
<PAGE>
Junior Subordinated Debentures or a distribution of the Convertible Junior
Subordinated Debentures in liquidation of the Trust, as described more fully
under the caption "Description of the Convertible Preferred Securities--Tax
Event or Investment Company Event Redemption or Distribution".
There can be no assurance as to the market prices for Convertible Preferred
Securities or Convertible Junior Subordinated Debentures that may be distributed
in exchange for Convertible Preferred Securities if a dissolution or liquidation
of the Issuer were to occur. Accordingly, the Convertible Preferred Securities
that an investor may purchase or the Convertible Junior Subordinated Debentures
that a holder of the Convertible Preferred Securities may receive on dissolution
and liquidation of the Issuer, may trade at a discount to the price that the
investor paid to purchase the Convertible Preferred Securities offered hereby.
Because holders of Convertible Preferred Securities may receive Convertible
Junior Subordinated Debentures upon the occurrence of a Tax Event or an
Investment Company Event, prospective purchasers of Convertible Preferred
Securities are also making an investment decision with regard to the Convertible
Junior Subordinated Debentures and should carefully review all the information
regarding the Convertible Junior Subordinated Debentures contained herein. See
"Description of Convertible Preferred Securities--Tax Event or Investment
Company Event Redemption or Distribution" and "Description of the Convertible
Junior Subordinated Debentures--General".
Limited Voting Rights. Holders of Convertible Preferred Securities will
generally have limited voting rights and, except upon the occurrence of certain
events described herein, will not be entitled to vote to appoint, remove or
replace the Issuer Trustees (as defined herein), the right to which is vested
exclusively in the holder of the Common Securities.
Trading Characteristics of Convertible Preferred Securities. The
Convertible Preferred Securities may trade at a price that does not fully
reflect the value of accrued but unpaid distributions. A holder who disposes of
its Convertible Preferred Securities between record dates for payments of
distributions thereon will be required to include accrued but unpaid interest on
the Convertible Junior Subordinated Debentures through the date of disposition
in income as ordinary income (i.e., original issue discount), and to add such
amount to its adjusted tax basis in its pro rata share of the underlying
Convertible Junior Subordinated Debentures deemed disposed of. To the extent the
selling price is less than the holder's adjusted tax basis (which will include,
in the form of original issue discount, all accrued but unpaid interest), a
holder will recognize a capital loss. Subject to certain limited exceptions,
capital losses cannot be applied to offset ordinary income for United States
Federal income tax purposes. See "United States Taxation".
Lack of Public Market for the Convertible Preferred Securities. There is no
existing trading market for the Convertible Preferred Securities, and there can
be no assurance regarding the future development of a market for the Convertible
Preferred Securities, or the ability of holders of the Convertible Preferred
Securities to sell their Convertible Preferred Securities or the price at which
such holders may be able to sell their Convertible Preferred Securities. If such
a market were to develop, the Convertible Preferred Securities could trade at
prices that may be higher or lower than the initial offering price depending on
many factors, including prevailing interest rates, the price of the DT Common
Stock, the Company's operating results and the market for similar securities.
Credit Suisse First Boston Corporation, the placement agent in the Original
Offering (the "Placement Agent"), currently makes a market in the Convertible
Preferred Securities. The Placement Agent is not obligated to do so, however,
and any market making with respect to the Convertible Preferred Securities may
be discontinued at any time without notice. Therefore, there can be no assurance
as to the liquidity of any trading market for the Convertible Preferred
Securities or that an active public market for the Convertible Preferred
Securities will develop. The Company does not intend to apply for listing or
quotation of the Convertible Preferred Securities on any securities exchange or
stock market; however, the Convertible Preferred Securities are eligible for
trading in the Private Offerings, Resale and Trading through Automated Linkages
(PORTAL) Market of the Nasdaq Stock Market, Inc.
9
<PAGE>
RECENT DEVELOPMENTS
The Company has entered into a non-binding letter of intent with Lucas
Varity plc regarding the potential acquisition of its Lucas Assembly and Test
Systems business ("LATS"). LATS is a designer and manufacturer of assembly line
and test equipment for the automotive industry with four locations: two in
Michigan, one in England and one in Germany. Negotiations regarding the
potential acquisition of LATS are at an early stage and any such acquisition is
subject to negotiation of definitive purchase documentation, completion of due
diligence investigations, approval of the board of directors of the Company,
satisfaction of regulatory requirements of the jurisdictions involved and other
matters. There can be no assurance that any acquisition of LATS will occur, that
the terms of any such acquisition will be favorable to the Company or that any
such acquisition will have a favorable effect on the Company's business,
financial condition or results of operation. The Company anticipates that any
such acquisition would be funded through utilization of borrowing availability
under its Amended Facility. Proceeds from the Offering are not required and are
not expected to be used for the acquisition of LATS.
DT CAPITAL TRUST
DT Capital Trust is a statutory business trust that was formed under the
Delaware Business Trust Act on May 21, 1997. The Trust's original declaration of
trust was amended and restated in its entirety as of June 1, 1997 by DT, as
sponsor of the Trust, and the trustees of the Issuer (the "Issuer Trustees") (as
so amended and restated, the "Declaration"). DT directly or indirectly owns
Common Securities in an aggregate liquidation amount equal to 3% of the total
capital of the Issuer. The Common Securities rank pari passu, and payment will
be made thereon pro rata, with the Convertible Preferred Securities, except
that, upon the occurrence and during the continuance of an event of default
under the Declaration, the rights of the holders of the Common Securities to
payment in respect of distributions and payments upon liquidation, redemption
and otherwise will be subordinated to the rights of the holders of the
Convertible Preferred Securities. The assets of the Trust consist of the
Convertible Junior Subordinated Debentures, and payments under the Convertible
Junior Subordinated Debentures will be the sole revenue of the Issuer. The
Issuer exists for the exclusive purposes of (i) issuing the Trust Securities
representing undivided beneficial interests in the assets of the Trust, (ii)
investing the gross proceeds of the Trust Securities in the Convertible Junior
Subordinated Debentures and (iii) engaging in only those other activities
necessary or incidental thereto.
Pursuant to the Declaration, the number of Issuer Trustees initially is
five. Three of the Issuer Trustees (the "DT Trustees") are individuals who are
employees or officers of or who are affiliated with DT. The fourth trustee is a
financial institution that is unaffiliated with DT (the "Trustee"). The fifth
trustee is an entity which maintains its principal place of business in the
State of Delaware (the "Delaware Trustee"). Initially, The Bank of New York, a
New York banking corporation, acts as Trustee for purposes of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act") and its affiliate,
The Bank of New York (Delaware), a Delaware banking corporation, acts as
Delaware Trustee until, in each case, removed or replaced by the holder of the
Common Securities. The Bank of New York also acts as indenture trustee under the
Guarantee (the "Guarantee Trustee") and under the Indenture (the "Indenture
Trustee") for purposes of the Trust Indenture Act. See "Description of the
Guarantee" and "Description of the Convertible Preferred Securities". In certain
circumstances, the holders of a majority of the Convertible Preferred Securities
will be entitled to appoint one additional trustee (a "Special Trustee"), who
need not be an officer or employee of or otherwise affiliated with DT, who will
have the same rights, powers and privileges as the DT Trustees. See "Description
of the Convertible Preferred Securities--Voting Rights".
The Trustee holds title to the Convertible Junior Subordinated Debentures
for the benefit of the holders of the Trust Securities and the Trustee has the
power to exercise all rights, powers and privileges under the Indenture (as
defined herein) as the holder of the Convertible Junior Subordinated Debentures.
In addition, the Trustee maintains exclusive control of a segregated
non-interest bearing bank account (the "Property Account") to hold all payments
made in respect of the Convertible Junior Subordinated Debentures for the
benefit of the holders of the Trust Securities. The Guarantee Trustee holds the
Guarantee for the benefit of the holders of the Convertible Preferred
Securities. Subject to the right of the holders of the Convertible Preferred
Securities to appoint a Special Trustee, DT, as the direct or indirect holder of
all the Common Securities, has the right to appoint, remove or replace any of
the Issuer Trustees and to increase or decrease the number of trustees, provided
that the number of trustees shall be at least three, a majority
10
<PAGE>
of which shall be DT Trustees. DT will pay all fees and expenses related to the
Trust and the offering of the Convertible Preferred Securities. See "Description
of the Convertible Junior Subordinated Debentures".
The rights of the holders of the Convertible Preferred Securities,
including economic rights, rights to information and voting rights, are as set
forth in the Declaration and the Delaware Business Trust Act, as amended (the
"Trust Act"). See "Description of the Convertible Preferred Securities". The
Declaration, the Indenture and the Guarantee also incorporate by reference the
terms of the Trust Indenture Act, and each will be qualified thereunder.
The place of business and the telephone number of the Trust are the
principal executive offices and telephone number of DT. See "Incorporation of
Certain Documents by Reference."
11
<PAGE>
THE COMPANY
General
DT is an engineering-driven designer, manufacturer and integrator of
automated production equipment and systems used to manufacture, test or package
a variety of industrial and consumer products. The Company believes it is the
largest manufacturer of integrated assembly and test systems in North America.
Substantial growth opportunities are believed to be provided by certain trends
among its customers, including increased emphasis on productivity, quality,
flexibility, globalization, outsourcing, downsizing and vendor rationalization.
To capitalize on these trends, DT has implemented a business strategy to
provide, develop and acquire complementary technologies and capabilities to
supply customers with integrated processing, assembly, testing and packaging
systems for their products. As part of this strategy, the Company seeks to cross
sell the products produced by acquired companies through its larger company-wide
sales force providing for greater geographic and customer coverage. The Company
operates in two business segments: Special Machines and Components. Through
acquisitions and product development, the Company's Special Machines business
has grown from historical consolidated net sales of $28.5 million in the fiscal
year ended June 30, 1993 to fiscal 1996 historical consolidated net sales of
$193.9 million, and net sales of $252.7 million for the nine months ended March
30, 1997. In addition, the Company's Components business, which produces
precision metal components and wear parts for a broad range of industrial
applications, has grown from historical consolidated net sales of $22.1 million
in fiscal 1993 to historical consolidated net sales of $42.0 million in fiscal
1996, and net sales of $34.0 million for the nine months ended March 30, 1997,
primarily as a result of internal growth.
Special Machines Segment. The Special Machines segment's products are used
principally in the electronics, automotive, pharmaceutical, nutritional and food
processing, consumer products, appliance and tire industries. Sales of these
products also produce a stream of recurring revenues from replacement parts and
service as the Company's substantial installed base of equipment is maintained
and upgraded over time. The Special Machines segment, which accounted for
approximately 87% of the Company's pro forma consolidated fiscal 1996 net sales,
after giving effect to the acquisition of Mid-West, and approximately 88% of the
Company's consolidated net sales for the nine months ended March 30, 1997,
consists of two groups: DT Automation and DT Packaging. Each group offers a
class of products and services that complement one another in terms of markets,
engineering requirements, product needs and systems capabilities.
DT Automation. DT Automation designs and builds a complete line of
integrated automated assembly and testing systems. Integrated systems combine a
variety of manufacturing technologies into a complete automated manufacturing
system. Core capabilities of DT Automation include the design and manufacture of
small to large automated assembly systems, high-speed precision assembly
systems, flexible assembly systems, automated resistance and arc welding systems
and large thermoforming systems. The Company believes DT is the largest
manufacturer of integrated assembly and test systems in North America.
DT Packaging. DT Packaging designs and builds proprietary machines and
integrated systems used to perform processing and packaging tasks. Core
capabilities of DT Packaging include the design and manufacture of
thermoforming, blister packaging and foam extrusion systems, and a complete line
of tablet processing and packaging systems. The Company believes it is the
largest manufacturer of tablet packaging equipment in North America.
Components Segment. The Components segment, which accounted for
approximately 13% of pro forma consolidated fiscal 1996 net sales and
approximately 12% of the Company's consolidated net sales for the nine months
ended March 30, 1997, stamps and fabricates a range of standard and custom metal
components for the transportation, appliance, heavy equipment, agricultural
equipment and electrical industries as well as wear parts for the textile
industry.
The Company is a Delaware corporation organized in January 1993 and the
successor to Peer Corporation, Detroit Tool Group, Inc. ("DTG") and Detroit Tool
and Engineering Company ("DTE"). Peer Corporation was organized in June 1992 to
acquire the Peer Division of Teledyne, Inc. ("Peer") and the stock of DTG, the
sole stockholder of DTE and Detroit Tool Metal Products Co. ("DTMP"). Through
acquisitions and product development, the Company has grown from historical
consolidated net sales of $50.6 million in fiscal 1993 to $235.9 million in
fiscal 1996.
12
<PAGE>
During fiscal 1994, the Company completed the acquisitions of Sencorp
Systems, Inc. ("Sencorp") in August 1993 and the business and assets of
Stokes-Merrill, Inc. ("Stokes-Merrill") in December 1993. During fiscal 1995,
the Company completed the acquisitions of Advanced Assembly Automation, Inc.
("AAA") in August 1994, the Lakso division of Packaging Machinery Company
("Lakso") and Armac Industries, Ltd. ("Armac") in February 1995. During fiscal
1996, the Company completed the acquisitions of H.G. Kalish, Inc. ("Kalish") in
August 1995, Arrow Precision Elements, Inc. ("Arrow") in September 1995,
Swiftpack Automation Limited ("Swiftpack") in November 1995 and Assembly
Machines, Inc. ("AMI") in January 1996.
On July 19, 1996, following the end of the Company's fiscal year, the
Company acquired the issued and outstanding stock of Mid-West, a designer and
manufacturer of integrated precision assembly systems. Mid-West's revenues for
its fiscal year ended May 26, 1996 were approximately $88.2 million and its
operating income, before certain nonrecurring charges, was approximately $18.4
million. On September 30, 1996, the Company acquired the issued and outstanding
stock of Hansford, also a designer and manufacturer of integrated precision
assembly systems.
Business Strategy
The business strategy of DT is to provide, develop and acquire
complementary technologies and capabilities to supply customers with integrated
assembly, testing and packaging systems for their products. Key elements of the
Company's strategy include the following:
Acquisitions. The assembly, testing and packaging equipment markets are
highly fragmented. Special machines, for example, are characterized by a number
of industry niches in which few manufacturers compete. The Special Machines
segment has established its presence in particular niches through acquisitions,
and the Company intends to pursue additional acquisitions, or strategic
alliances, with companies which are established technical and market leaders.
The Company can provide its customers more complete integrated automation
systems by continuing to expand the breadth of its products and engineering
expertise, a capability the Company believes will enable it to benefit from its
customers' increasing demand for complete systems. Additionally, the Company
will continue to pursue acquisitions, or strategic alliances, with companies
which provide significant potential for cross-selling among the various product
lines, margin improvement through greater use of in-house manufacturing and cost
savings through more efficient utilization of manufacturing and engineering
capacity.
Product Line Expansion. Through acquisitions, product license arrangements
and strategic alliances, the Company has increased, and plans to continue to
increase, its engineering capabilities and product offerings. DT Packaging now
has the capability to provide customers with fully integrated tablet processing
and packaging systems. DT Automation has increased its assembly systems
capabilities as more fully described in "Markets and Products" below. The
Company's objective is to provide customers with integrated automation solutions
rather than single use equipment. The Company also uses its engineering
expertise and manufacturing capability to develop new products and technology
for markets the Company currently serves and to provide entree into new markets.
Cross-Selling. The Company believes substantial cross-selling opportunities
exist across the product lines of the Special Machines segment. As the Company
implements its acquisition strategy and integrates acquired operations, it is
able to expand its product offerings and customer base. For example, the
combined marketing efforts and engineering capabilities of AAA and AMI were
successful in obtaining from a significant customer an $8 million project that
otherwise would have been awarded to a competitor. While AAA had established a
strong customer relationship, the project required certain technologies provided
by AMI.
Engineering Expertise. The Company's engineering strategy is to satisfy the
growing demand for small, medium and large complex, integrated automation
solutions by utilizing the versatile engineering expertise of its Special
Machines businesses. Additionally, the custom tool and die engineering expertise
of the Company's Special Machines segment provides the Components segment with
the ability to offer customers complex precision stamping solutions. The Company
expects to continue to acquire engineering and design expertise through
acquisitions and licensing arrangements.
Manufacturing Synergies. The Company intends to utilize its manufacturing
capacity and engineering capabilities fully by directing work to facilities with
specific capabilities and manufacturing strengths.
13
<PAGE>
International. The Company seeks to increase its international sales
through strategic alliances, international agents, foreign offices and
acquisitions. The Company acquired Kalish, and the U.K.-based Swiftpack during
fiscal 1996, significantly enhancing its international packaging presence. Also,
continued international sales growth by DT Packaging has resulted from the
strategic alliance with Davis Standard Corporation for the sales of foam
extrusion systems. DT Automation continued to expand its international presence
by forming an alliance with a subsidiary of Claas KGaA to open a sales and
service office in Beelen, Germany. This alliance also allows the Company to
market Claas KGaA's highly regarded automation systems to the Company's existing
customer base. International sales accounted for less than 25% of the Company's
historical consolidated net sales for fiscal 1996 and approximately 33% of
consolidated net sales for the nine months ended March 30, 1997.
Markets and Products
Special Machines. The Special Machines segment designs and builds a
complete line of automated production systems used to manufacture, test and/or
package products for a range of industries, including electronics, automotive,
pharmaceutical, nutritional and food processing, consumer products, appliances
and tires. The Company also manufactures custom production equipment for
specific customer applications, proprietary machines for specific industrial
applications and integrated systems which may combine features of custom and
proprietary equipment. The Special Machines segment consists of two core
business groups: DT Automation and DT Packaging.
DT Automation. DT Automation designs and builds a complete line of
automated assembly and test systems, special machines and large complex dies. DT
Automation is ideally suited for time-sensitive, concurrent engineering projects
where changes in tooling and processes can occur in an advanced stage of system
design. Sales from DT Automation accounted for approximately 63% of historical
consolidated net sales for the nine months ended March 30, 1997, and 45%, 45%
and 47% of historical consolidated net sales for fiscal 1996, 1995 and 1994,
respectively.
Integrated Systems. Integrated systems combine a wide variety of
manufacturing technologies into a complete automated manufacturing system.
Utilizing advanced computers, robotics, vision systems and other technologies,
the Company provides small to large automated assembly systems, high-speed
precision assembly systems, flexible assembly systems and automated resistance
and arc welding systems for the electronics, automotive, appliance, electrical
and hardware industries. The Company's expansion in providing a full range of
integrated, automated systems has been enhanced by the acquisition of AMI during
fiscal 1996 and has been further accelerated with the recent acquisitions of
Mid-West and Hansford. These acquisitions offer a variety of precision assembly
equipment to industry, utilizing proprietary modular building blocks which
facilitate time-sensitive, concurrent engineering projects where changes in
tooling and processes can occur in an advanced stage of system design and
standardized components in carousel, in-line and rotary assembly systems.
Custom Machines. The Company's custom machine building capabilities
include: engineering, project management, machining and fabrication of
components, installation of electrical controls, final assembly and testing. A
customer will usually approach the Company with a manufacturing objective, and
DT will work with the customer to design, engineer, assemble, test and install a
machine to meet the objective. The customer often retains rights to the design
after delivery of the machine since the purchase contract typically includes the
design of the machine; however, the engineering and manufacturing expertise
gained in designing and building the machine is often reapplied by the Company
in projects for other customers.
RIGO Thermoformers. Under a license agreement with RIGO Group, S.r.l., COMI
S.r.l. and PMM S.r.l., the Company has the rights to use certain deep-draw
thermoforming ("RIGO") technology. The Company is utilizing the RIGO technology
in a line of machines designed to produce the inner liners for refrigerators.
The Company believes the RIGO technology provides significant advantages over
competing technology, such as quicker changeover of tooling, lower material
costs, higher productivity and greater end product efficiency. The license
agreement continues until terminated in accordance with its provisions and may
be terminated by either party upon 90 days' notice to the other.
Automated Resistance and Arc Welding Systems. The Company manufactures and
sells a line of standard resistance welding equipment as well as special
automated welding systems designed and built for
14
<PAGE>
specific applications. Marketed under the brand name PeerTM, the Company's
products are used in the automotive, appliance and electrical industries to
fabricate and assemble components and subassemblies. The Company's resistance
welding equipment is also used in the manufacture of file cabinets, school and
athletic lockers, store display shelves, metal furniture and material storage
products.
Tooling and Dies. The Company possesses considerable expertise in the
design, engineering and production of precision tools and dies. In addition,
personnel trained as tool and die makers often apply their skills to the
manufacture of the Company's special machines.
DT Packaging. The DT Packaging group designs and builds proprietary
machines and integrated systems which are marketed under individual brand names
and manufactured for specific industrial applications using designs owned or
licensed by the Company. Although these machines are generally cataloged as
specific models, they are usually modified for specific customer requirements
and often combined with other machines into integrated systems. Many customers
also request additional accessories and features which typically generate higher
revenues and enhanced profit opportunities. DT Packaging products include
thermoformers, blister packaging systems, extrusion systems, rotary presses and
complete packaging systems. Packaging systems include: bottle unscrambling,
tablet counting, filling, cottoning, capping, labeling, collating, cartoning and
liquid filling, electronic filling and tube filling, many of which have been
added during fiscal 1996. The Company believes this equipment maintains a strong
reputation among its customers for quality, reliability and ease of operation
and maintenance. The Company also sells replacement parts and accessories for
its substantial installed base of machines. Sales from DT Packaging accounted
for approximately 25% of historical consolidated net sales for the nine months
ended March 30, 1997, and 37%, 31% and 24% of historical consolidated net sales
for fiscal 1996, 1995 and 1994, respectively.
Thermoformers. A thermoformer heats plastic material and uses pressure
and/or a vacuum to mold it into a product. Marketed under the brand names
Sencorp(R) and ArmacTM, the Company's thermoformers are used by customers in
North America, Europe and Asia to form a variety of products including:
specialized cups, plates and food containers, trays for food and medical
products and other plastics applications.
The Company's thermoformers are sold primarily to custom formers who use
the machines to create thermoformed items which are sold to a variety of end
users. The Company also sells thermoformers directly to end users, including
large producers of electrical and healthcare products, cosmetics, hardware and
other consumer products.
The Company produces a line of thermoformers of different sizes, heating
ovens, maximum draw depths and press capacities. Certain thermoformers produced
by the Company feature a fully integrated process control system to regulate the
thermoformer's functions. Depending upon the customer's requirements, the
control system is capable of networking with, or downloading to, the customer's
computers or other equipment and the Company's service center. This on-line
diagnostic capability allows the Company to provide real-time service and
support to its customers.
Blister Packaging Systems. Blister packaging is an increasingly common
method of displaying consumer products for sale in hardware stores, convenience
stores, warehouse stores, drug stores and similar retail outlets. Batteries,
cosmetics, hardware items, electrical components, razor blades and toys are
among the large variety of products sold in a clear plastic blister or two-sided
package. The Company designs and manufactures machinery marketed under the brand
names Sencorp(R) and ArmacTM, which performs blister packaging by heat-sealing a
clear plastic bubble, or blister, onto coated paperboard, or by sealing
two-sided packages using heat or microwave technology.
The Company's blister packaging systems are primarily sold to manufacturers
of the end products. These customers, with higher volume production
requirements, may use a thermoformer in-line with a blister sealer to form
blisters, insert their product and seal the package in one continuous process,
referred to as a form/fill/seal configuration. Customers having relatively low
volume production often use a stand-alone blister sealing machine to seal
products in a package using blisters purchased from a custom former.
Extruders. An extrusion process is used to convert plastic resin and
additives into a continuous melt and to force such melt through a die to produce
a desired shape that is then cooled. Marketed under the brand name Sencorp(R),
the Company's foam extruders are used to produce products such as building
insulation,
15
<PAGE>
display board, meat trays, bottle wrap protection labels and egg cartons. The
Company's foam extruders are primarily sold to large plastics companies that use
the machines to create end products and sheet products. The Company also
manufactures reclaim extruders which process a variety of plastic materials from
ground form to finished pellet form.
Rotary Presses. The Company believes it is the largest U.S. designer and
manufacturer of rotary tablet presses. The Company designs and manufactures
rotary presses used by customers in the airbag, candy, food supplement, ceramic,
ordnance, specialty chemical and pharmaceutical industries to produce tablets.
Marketed under the brand name StokesTM, the Company's line of rotary presses
includes machines capable of producing 17,000 tablets per minute and other
machines capable of applying up to 40 tons of pressure. Products produced on the
Company's rotary presses include Lifesavers(R) and Breathsavers(R) brand mints,
Centrum(R) brand vitamins and inflation pellets for automotive airbags.
During fiscal 1996, the Company entered into an agreement with Horn & Noack
Pharmatechnik GmbH for the purpose of licensing German rotary press technology
designed primarily for the pharmaceutical and nutritional markets. The agreement
gives the Company the exclusive right to manufacture and market this press
technology under the StokesTM brand in North and Central America and
non-exclusively in the rest of the world, excluding Europe. The Company plans to
market the pharmaceutical press through DT Packaging, a leader in pharmaceutical
filling and packaging systems.
Packaging Systems. The Company designs, manufactures or distributes a
complete line of products utilized for packaging, liquid filling or tube filling
applications. The Company's expansion in providing integrated packaging lines
was accelerated by the acquisition of Kalish in August 1995 and Swiftpack in
November 1995. The equipment manufactured by the Company, which includes bottle
unscramblers, slat tablet counters, electronic counters, liquid fillers,
cottoners, cappers and labelers, collators and cartoners, can be sold as an
integrated system or individual units. These machines are marketed under the
brand names of KalishTM, Lakso(R), Merrill(R) and Swiftpack and are primarily
delivered to customers in the pharmaceutical, nutritional, food, cosmetic, toy
and chemical industries.
The Company benefits from a substantial installed base of Lakso(R) and
Merrill(R) slat counters in the aftermarket sale of slats. Slat counting
machines use a set of slats to meter the number of tablets or capsules to be
inserted into bottles. Each size or shape of tablet or capsule requires a
different set of slats. In addition, the practice in the pharmaceutical industry
is to use a different set of slats for each product, even if the tablets are the
same size.
Laboratory Machines, Tooling, Parts and Accessories. The Company produces a
line of small scale blister sealers and a line of tablet pressing equipment used
to test new materials and techniques, for quality control, laboratory or other
small run uses. The Company also sells parts and accessories for its proprietary
machines. In addition, the Company designs and builds special tools and dies
used in custom applications of its thermoforming systems, rotary presses and
slat counters.
Components. The Company's Components segment produces custom and precision
components for the transportation, agricultural equipment, appliance, heavy
equipment and electrical industries, as well as wear parts for the textile
industry. Sales from Components accounted for approximately 12% of historical
consolidated net sales for the nine months ended March 30, 1997, and 18%, 24%
and 29% of historical consolidated net sales for fiscal 1996, 1995 and 1994,
respectively.
Custom Stamping and Fabrication. The Company produces precision-stamped
steel and aluminum components through its stamping and fabrication operations.
The Company's stamping presses range in size from 32 tons to 1,500 tons, giving
the Company the flexibility to stamp flat rolled metal ranging in thickness from
.015 inches to .750 inches. Certain of the Company's presses can accommodate
dies up to 190 inches in length to perform several stamping functions in a
single press.
Through its Special Machines segment, the Company possesses considerable
expertise in the design, engineering and production of precision tools and dies.
The Company produces tools and dies for use in its own blanking and stamping
operations as well as for sale to other industrial customers. The Company
16
<PAGE>
believes its tool and die design and engineering capabilities give it an
important competitive advantage in its Components segment.
Wear Parts. The Company is the only full-line U.S. manufacturer of
precision wear parts for industrial knitting machines. Marketed under the brand
names PotterTM, Arrow(R), S&WTM and DURA-TECHTM, these products are components
of circular knitting machines which produce tee shirts, socks, pantyhose and
other knit fabrics. The Company's branded products, which are included as
original equipment in certain circular industrial knitting machines sold in the
United States, are consumed in use and must be regularly replaced. The Company
believes that its PotterTM, Arrow(R), S&WTM and DURA-TECHTM products have a
reputation for high quality.
Marketing and Distribution
Special Machines. The Company's special machines and systems are sold
primarily through the Company's approximately 60 person direct sales force and
to a lesser extent through manufacturers' representatives and agents. Sales of
special machines and integrated systems require the Company's sales personnel to
have a high degree of technical expertise and extensive knowledge of the
industry served. The Company's sales force consists of specialists in each
primary market in which the Company's special machines are sold. Each of DTE,
Peer, Sencorp, Stokes-Merrill, AAA, Lakso, Armac, Kalish, AMI, Swiftpack,
Mid-West and Hansford has a sales force experienced in the marketing of the
equipment historically produced by each respective business. The Company
believes that cross-selling among the members of the Special Machines segment
and integration of proprietary technology and custom equipment into total
production automation systems for selected industries provide the Company with
expanded sales opportunities.
The Company's special machines are sold throughout the world by more than
60 manufacturers' representatives and sales agents to customers in nearly 50
countries. The Company has sales and service offices in China and in fiscal 1996
added offices in Canada, England and Germany. International sales continue to
grow as the business grows and more resources are focused in the international
arena. International sales were approximately 22% of historical consolidated net
sales for fiscal 1996 compared to 10% and 8% of historical consolidated net
sales in fiscal 1995 and fiscal 1994, respectively. International sales were
approximately 33% of consolidated net sales for the nine months ended March 30,
1997 compared to approximately 22% of consolidated net sales for the nine months
ended March 24, 1996.
Components. The Company's custom stamping products are sold by the
Company's direct sales force. The Company's wear parts are sold to original
equipment manufacturers directly and to the textile industry directly and
through independent domestic distributors.
17
<PAGE>
Facilities
The Company's administrative headquarters are located in Springfield,
Missouri. Set forth below is certain information with respect to the Company's
significant manufacturing facilities as of March 30, 1997:
<TABLE>
<CAPTION>
Square
Footage
Location (approximate) Owned/Leased Lease Expiration Products
-------- ------------- ------------ ------------------ --------
<S> <C> <C> <C> <C> <C>
Special Machines Segment
DTI Automation:
Lebanon, Missouri 300,000 Owned Special machines,
integrated systems,
tools and dies
Dayton, Ohio 160,000 Leased July 1, 2016 (3) Integrated systems,
special machines
Benton Harbor, Michigan 43,000 Owned Resistance arc
welding equipment
and systems
Erie, Pennsylvania 56,000 Owned High-speed
assembly systems
Buffalo Grove, Illinois 323,000(1) Leased July 31, 2003(4) Integrated precision
assembly systems
Rochester, New York 139,000 Leased Sept. 30, 2006(3) Integrated precision
assembly systems
DTI Packaging:
Montreal, Quebec 66,000(2) Leased Oct. 31, 1997 Tablet packaging,
liquid filling and
tube filling
equipment and
systems
Leominster, Massachusetts 60,000 Owned Tablet packaging,
equipment
Niles, Illinois 30,000 Leased July 15, 1998 Tablet counters
Bristol, Pennsylvania 43,000 Leased April 30, 2000(4) Rotary presses
Hyannis, Massachusetts 98,000 Leased Dec. 31, 1997(4) Plastics processing
and packaging
equipment
Fall River, Massachusetts 37,000 Leased Jan. 31, 2000(4) Plastics processing
and packaging
equipment
Alcester, United Kingdom 22,000 Owned Electronic counters
Components Segment
Lebanon, Missouri 171,000 Owned Metal products
Winsted, Connecticut 28,000 Leased Dec. 31, 1997(4) Wear parts
Asheboro, North Carolina 15,000 Leased Sept. 26, 2000(5) Wear parts
</TABLE>
- ------------------
(1) Two adjacent buildings of approximately 260,000 square feet and 63,000
square feet, respectively.
(2) Two adjacent buildings of approximately 40,000 square feet and 26,000
square feet, respectively.
(3) The Company has an option to renew such lease for two additional terms of
five years.
(4) The Company has an option to renew such lease for one additional five-year
term.
(5) The Company has an option to renew such lease for three additional five-
year terms.
The Company also leases other office, warehouse and service facilities in
Missouri, New Jersey, Canada, the United Kingdom and China. The Company
anticipates no significant difficulty in leasing alternate space at reasonable
rates in the event of the expiration, cancellation or termination of a lease
relating to any of the Company's leased properties.
18
<PAGE>
To accommodate growth occurring at two of the Special Machines facilities,
the Company has entered into a new operating lease for a facility to be
constructed in Montreal and is reviewing its alternatives to expand the facility
in Hyannis. Upon adding additional capacity with leased facilities, the Company
believes that its principal owned and leased manufacturing facilities will have
sufficient capacity to accommodate future internal growth without major
additional capital improvements.
Manufacturing and Raw Materials
Special Machines Segment. The principal raw materials and components used
in the manufacturing of the Company's special machines include carbon steel,
stainless steel, aluminum, electronic components, pumps and compressors,
programmable logic controls, hydraulic components, conveyor systems, visual and
mechanical sensors, precision bearings and lasers. The Company is not dependent
upon any one supplier for raw materials or components used in the manufacture of
special machines. Certain customers specify sole source suppliers for components
of custom machines or systems. The Company believes there are adequate
alternative sources of raw materials and components of sufficient quantity and
quality.
DT Automation. Integrated systems to assemble and test various products are
designed and manufactured at the Company's facilities in Illinois, New York,
Ohio and Pennsylvania where manufacturing activity primarily consists of
fabrication and assembly and, to a lesser extent, machining. The facilities in
Missouri house the machining, assembly and test operations primarily used in the
manufacture of tools and dies, custom special machines, RIGO systems and certain
other integrated systems. The facility in Michigan houses the machining,
assembly and test operations used in the manufacture of resistance welding
equipment and systems. A number of manufacturing technologies are employed at
these facilities including: fabrication of stainless steel, direct numerically
controlled machinery, computer generated surface modeling of contoured
components and fully networked CAD/CAM capabilities.
DT Packaging. Special machines, integrated systems and related parts for
the Company's tablet packaging and liquid-filling equipment are designed and
assembled at the Company's facilities in Canada, Massachusetts, Illinois and the
United Kingdom from components made to the Company's specifications by
unaffiliated vendors. Rotary presses are assembled at the Company's leased
facility in Pennsylvania. Special machines and integrated systems for the
plastics packaging industry are primarily manufactured at the two Company
manufacturing facilities in Massachusetts which include machining, fabrication
and assembly.
Components Segment. The principal raw materials used in the Company's
components manufacturing processes include carbon steel, aluminum, stainless
steel, copper and other metals in coil or sheet form. The Company is not
dependent upon any one supplier for raw materials used in the manufacture of its
metal products. The Company believes there are adequate alternative sources of
raw materials of sufficient quantity and quality.
The Company's components manufacturing operations are primarily located at
the Company's recently expanded facilities in Missouri. Operations conducted at
that facility include blanking, heavy and precision stamping using precision
single stage, progressive and transfer dies, cutting, punching, forming,
welding, cleaning, bonderizing and painting. With the addition in fiscal 1996 of
a Metalsoft(R) FabriVision optical scanning system, the Company's quality focus
and prototyping capabilities were greatly enhanced. At the Company's Connecticut
and North Carolina facilities, manufacturing processes include precision
stamping of wear parts, heat treating, drawing, tumbling, casting, straightening
and grinding.
Financial Information Relating to Business Segments, Foreign and Domestic
Operations and Export Sales
The Company operates predominantly in the business segments classified as
Special Machines and Components. The Company's principal foreign operations
consist of manufacturing, sales and service operations in Canada and the United
Kingdom. For certain other financial information concerning the Company's
business segments, foreign and domestic operations and export sales, see Note 15
of the Notes to Consolidated Financial Statements of the Company for its fiscal
year ended June 30, 1996.
19
<PAGE>
Customers
The majority of the Company's sales is attributable to repeat customers,
some of which have been customers of the Company or its acquired businesses for
over twenty years. The Company believes such repeat business is indicative of
the Company's engineering capabilities, the quality of its products and overall
customer satisfaction.
The Goodyear Tire & Rubber Company, a customer of the Company's Special
Machines segment, accounted for over 10% of the Company's consolidated net sales
in fiscal 1996 and 1994. PACCAR, Inc., a customer of the Company's Components
segment, accounted for over 10% of the Company's consolidated net sales in
fiscal 1995 and 1994. The Company's five largest customers during fiscal 1996
accounted for 32% of the Company's consolidated net sales and 45.7% of the
Company's consolidated net sales for the nine months ended March 30, 1997. For
additional information regarding dependence on a significant customer in the
electronics industry on a pro forma basis, after giving effect to the
acquisition of Mid-West, see "Risk Factors -- Dependence on Significant
Customers."
Certain purchasers of the Company's special machines make advance and
progress payments to the Company in connection with the manufacture of the
equipment. Sales of the Company's components are typically made without advance
or progress payments.
Competition
The market for the Company's special machines is highly competitive, with a
large number of companies advertising the sale of production machines. However,
the market for special machines is fragmented and characterized by a number of
industry niches in which few manufacturers compete. The market for products
produced by the Components segment is also highly regionally competitive and
fragmented. The Company's competitors vary in size and resources; most are
smaller privately held companies or subsidiaries of larger companies, some of
which are larger than the Company; and none competes with the Company in all
product lines. In addition, the Company may encounter competition from new
market entrants. The Company believes that the principal competitive factors in
the sale of the Company's special machines are quality, technology, on-time
delivery, price and service. The Company believes that the principal competitive
factors in the sale of the Company's components are price, technical capability,
quality and on-time delivery. The Company believes that it competes favorably
with respect to each of these factors.
Engineering, Research and Development
The Company maintains research and engineering departments at all of its
manufacturing locations. The Company employs more than 350 people with
experience in the design of production equipment. In addition to design work
relating to specific customer projects, the Company's engineers develop new
products and product improvements designed to address the needs of the Company's
target market niches and to enhance the reliability, efficiency, ease of
operation and safety of its proprietary machines.
Trademarks and Patents
The Company owns and maintains the registered trademarks Sencorp(R),
Merrill(R), Lakso(R) and Mid-West(R). The Company's use of the registered
trademark Arrow(R) is under a license and the licensor has agreed to assign
ownership of the mark for such use to the Company. Registrations for Company
trademarks are also owned and maintained in countries where such products are
sold and such registrations are considered necessary to preserve the Company's
proprietary rights therein.
The Company also has the rights to use the unregistered trademarks
SwiftpackTM, KalishTM, ArmacTM, StokesTM, PotterTM and PeerTM. The trademarks
KalishTM, ArmacTM, Sencorp(R), Merrill(R), PeerTM, Lakso(R) and
20
<PAGE>
StokesTM are used in connection with the machines and systems marketed by the
Special Machines segment. The trademarks Arrow(R) and PotterTM are used in
connection with the products of the Components segment.
The Company applies for and maintains patents where the Company believes
such patents are necessary to maintain the Company's interest in its inventions.
The Company does not believe that any single patent or group of patents is
material to either its Special Machines business or its Components business, nor
does it believe that the expiration of any one or a group of its patents would
have a material adverse effect upon its business or ability to compete in either
line of business. The Company believes that its existing patent and trademark
protection, however, provides it with a modest competitive advantage in the
marketing and sale of its proprietary products.
Environmental and Safety Regulation
The Company is subject to environmental laws and regulations that impose
limitations on the discharge of pollutants into the environment and establish
standards for the treatment, storage and disposal of toxic and hazardous wastes.
The Company is also subject to the federal Occupational Safety and Health Act
and other state statutes. Except for costs incurred in connection with the
environmental cleanup of its property in Lebanon, Missouri, which was completed
in October 1995, costs of compliance with environmental, health and safety
requirements have not been material to the Company.
The Company believes it is in material compliance with all applicable
environmental and safety laws and regulations.
Employees
At March 30, 1997, the Company had approximately 2,600 employees. None of
the Company's employees are covered under collective bargaining agreements. The
Company has not experienced any work stoppages in the last five years and
considers its relations with employees to be good.
Legal Proceedings
Product liability claims are asserted against the Company from time to time
for various injuries alleged to have resulted from defects in the manufacture
and/or design of the Company's products. At March 30, 1997, there were 26 such
claims pending. The Company does not believe that the resolution of such suits,
either individually or in the aggregate, will have a material adverse effect on
the Company's results of operations or financial condition. Product liability
claims are covered by the Company's comprehensive general liability policies,
subject to certain deductible amounts. The Company has established reserves for
such deductible amounts, which it believes to be adequate based on its previous
claims experience. However, there can be no assurance that resolution of product
liability claims in the future will not have a material adverse effect on the
Company.
In addition to product liability claims, from time to time, the Company is
the subject of legal proceedings, including claims involving employee matters,
commercial matters and similar claims. There are no material claims currently
pending. The Company maintains comprehensive general liability insurance which
it believes to be adequate for the continued operation of its business.
21
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
The following table sets forth DT's ratio of earnings to fixed charges on a
historical basis for each of the five years in the period ended June 30, 1996
and the nine months ended March 30, 1997 and on a pro forma basis after giving
effect to the Pro Forma Transactions (as herein defined) for the year ended June
30, 1996 and the nine months ended March 30, 1997.
<TABLE>
<CAPTION>
Pro Forma Historical Pro Forma Historical
--------- ---------- --------- -------------------------------------------------------------------
Fiscal Year Ended
--------- ---------- --------- -------------------------------------------------- -----------
Predecessor
Nine Months Nine Months Fiscal Year Fiscal Year
Ended Ended Ended Ended
March 30, March 30, June 30, June 30, June 25, June 26, June 30, July 30,
1997 1997 1996 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C>
5.14 3.94 5.69 4.97 6.66 3.68 1.66 1.30
</TABLE>
For purposes of computing the historical ratio of earnings to fixed
charges, earnings include pre-tax earnings before an extraordinary charge,
interest expense and the interest portion of rent expense, which the Company
estimates is equivalent to one-third of total rent expense. Fixed charges
include interest expense and the interest portion of rent expense. For purposes
of computing the pro forma ratio of earnings to fixed charges, earnings include
pre-tax earnings, interest expense, dividends on the Convertible Preferred
Securities and the interest portion of rent expense, which the Company estimates
is equivalent to one-third of total rent expense. Fixed charges include interest
expense, dividends on the Convertible Preferred Securities and the interest
portion of rent expense. See "Pro Forma Selected Consolidated Financial Data".
22
<PAGE>
CAPITALIZATION
(Unaudited)
The following table sets forth the capitalization of DT and its
consolidated subsidiaries as of March 30, 1997, on an historical basis and as
adjusted to give effect to the Original Offering and the application of the
estimated gross proceeds therefrom to repay indebtedness of the Company. See
"Pro Forma Selected Consolidated Financial Data". The table should be read in
conjunction with the consolidated financial statements and notes thereto and
other financial data of DT incorporated herein by reference.
<TABLE>
<CAPTION>
March 30, 1997
-------------------------------
(dollars in thousands)
Actual As Adjusted 1
---------- -------------
<S> <C> <C>
Indebtedness:
Short-term debt $ 8,915 $ 1,533
Long-term debt (net of current portion) 121,611 61,493
---------- ----------
Total debt 130,526 63,026
Company-obligated mandatorily redeemable convertible preferred
securities of subsidiary DT Capital Trust holding solely Convertible
Junior Subordinated Debentures of the Company 2 -- 70,000
Stockholders' Equity:
Preferred stock; $0.01 par value; 1,500,000 shares authorized; issued
and outstanding: none -- --
Common stock; $0.01 par value; 100,000,000 shares authorized; issued
and outstanding: 11,272,125 shares 113 113
Additional paid-in capital 135,014 132,514
Retained earnings 43,756 43,756
---------- ----------
Total stockholders' equity 178,883 176,383
---------- ----------
Total capitalization $ 309,409 $ 309,409
========== ==========
Total debt to capitalization 3 42.0% 20.37%
</TABLE>
- ------------------
1 Assumes the sale of the Convertible Preferred Securities and the
application of the estimated net proceeds therefrom to repay indebtedness.
2 As described herein, the sole assets of the Trust are the 7.16% Convertible
Junior Subordinated Debentures due May 31, 2012 with a principal amount of
$72,165,000, and upon redemption of such debt, the Convertible Preferred
Securities will be mandatorily redeemable.
3 Debt to capitalization ratio equals total indebtedness divided by total
capitalization.
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as a subsidiary
of DT and, accordingly, the accounts of the Trust will be included in the
consolidated financial statements of DT. The Convertible Preferred Securities
will be presented as a separate line item in the consolidated balance sheet of
DT entitled "Company-obligated mandatorily redeemable convertible preferred
securities of subsidiary DT Capital Trust holding solely Convertible Junior
Subordinated Debentures of the Company", and appropriate disclosures about the
Convertible Preferred Securities, the subsidiary Guarantee and the Convertible
Junior Subordinated Debentures will be included in the notes to the Company's
consolidated financial statements. For financial
23
<PAGE>
reporting purposes, DT will record distributions payable on the Convertible
Preferred Securities as a financing charge to earnings in DT's consolidated
statement of operations.
USE OF PROCEEDS
The Selling Holders will receive all of the proceeds from the sale of the
Offered Securities. Neither DT nor the Trust will receive any proceeds from the
sale of the Offered Securities.
PRO FORMA SELECTED CONSOLIDATED FINANCIAL DATA
The following pro forma unaudited consolidated statements of operations of
the Company for the fiscal year ended June 30, 1996 and for the nine months
ended March 30, 1997, respectively, were prepared to illustrate (i) the
acquisition of Mid-West in July 1996 and the financing thereof, (ii) the Equity
Offering in November 1996 and the application of the net proceeds to the Company
therefrom to prepay outstanding indebtedness and (iii) the estimated effects of
the Original Offering and the application of the estimated net proceeds to the
Company therefrom to prepay outstanding indebtedness (collectively, the "Pro
Forma Transactions"), as if the Pro Forma Transactions had occurred at the
beginning of the respective period. The following pro forma unaudited
consolidated balance sheet of the Company at March 30, 1997, was prepared to
illustrate the estimated effects of the Original Offering and the application of
the estimated net proceeds therefrom to prepay outstanding indebtedness as if it
had occurred on March 30, 1997. The Pro Forma effects of the acquisition of
Hansford on the Company's results of operations and financial position are not
material.
The Pro Forma Statements do not purport to represent (i) the actual results
of operations or financial position of the Company had the Pro Forma
Transactions occurred on the dates assumed or (ii) the results or financial
position to be expected in the future.
The pro forma unaudited consolidated statements of operations and pro forma
unaudited consolidated balance sheet (collectively, the "Pro Forma Statements")
and accompanying notes should be read in conjunction with the historical
financial statements of the Company, including the notes thereto, and the other
financial information pertaining to the Company, including the information set
forth under "Capitalization" and "Selected Consolidated Financial Data",
included elsewhere or incorporated by reference in this Offering Memorandum.
24
<PAGE>
Pro Forma Unaudited Consolidated Statement of Operations
For the Year Ended June 30, 1996
<TABLE>
<CAPTION>
Mid-West
Consolidated
Balances for
the Fiscal
Year Pro Forma Equity
Ended Purchase Equity Offering
DT May 26, 1996 Accounting Mid-West Offering Pro Forma
as Reported as Reported Adjustments Pro Forma Adjustments As Adjusted
----------- ------------ ----------- --------- ----------- -----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Net Sales $ 235,946 $ 88,152 $ 324,098 $ 324,098
Cost of Sales 172,568 58,053 $ 1,055(1) 231,676 231,676
--------- --------- --------- --------- --------- ---------
Gross Profit 63,378 30,099 (1,055) 92,422 92,422
Selling, general and
administrative
expenses 35,445 15,214 (2,102)(2) 48,557 48,557
--------- --------- --------- --------- --------- ---------
Operating income 27,933 14,885 1,047 43,865 43,865
Interest expense
(income) net 4,799 (65) 6,605(3) 11,339 (6,057)(5) 5,282
Dividends on
Company-obligated
mandatorily
redeemable
convertible
preferred
securities of
subsidiary DT
Capital Trust
holding solely
Convertible Junior
Subordinated
Debentures of
the Company
--------- --------- --------- --------- --------- ---------
Income before
provision for
income taxes 23,134 14,950 (5,558) 32,526 6,057 38,583
Provision for
income taxes 9,643 5,994 (1,643)(4) 13,994 2,423(4) 16,417
--------- --------- --------- --------- --------- ---------
Income from
continuing
operations $ 13,491 $ 8,956 $ (3,915) $ 18,532 $ 3,634 $ 22,166
--------- --------- --------- --------- --------- ---------
Primary earnings
per common share
from continuing
operations $ 1.50 $ 2.06 $ 1.97
--------- --------- ---------
Fully diluted earnings
per common share
from continuing
operations
Weighted average
number of common
shares - primary 9,000,257 9,000,257 2,250,000 11,250,257
Weighted average
number of common
shares - fully diluted
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Original
Original Offering
Offering Pro Forma
Adjustments As Adjusted
----------- -----------
(Dollars in thousands, except per share data)
<S> <C> <C>
Net Sales $ 324,098
Cost of Sales 231,676
--------- ---------
Gross Profit 92,422
Selling, general and
administrative
expenses 48,557
--------- ---------
Operating income 43,865
Interest expense
(income) net (3,434)(6) 1,848
Dividends on
Company-obligated
mandatorily
redeemable
convertible
preferred
securities of
subsidiary DT
Capital Trust
holding solely
Convertible Junior
Subordinated
Debentures of
the Company 5,012(7) 5,012
--------- ---------
Income before
provision for
income taxes (1,578) 37,005
Provision for
income taxes (631)(4) 15,786
--------- ---------
Income from
continuing
operations $ (947) $ 21,219
--------- ---------
Primary earnings
per common share
from continuing
operations $ 1.89
---------
Fully diluted earnings
per common share
from continuing
operations $ 1.86(8)
---------
Weighted average
number of common
shares - primary 11,250,257
Weighted average
number of common
shares - fully diluted 13,056,709(8)
</TABLE>
25
<PAGE>
Footnotes to the Pro Forma Unaudited Consolidated Statement of Operations
For the Year Ended June 30, 1996
(1) Cost of sales has been increased (reduced) for
the following:
Elimination of capitalized building lease
depreciation $ (303)
Increase in operating lease expense related to
the building 1,358
----------
$ 1,055
==========
Prior to its acquisition by the Company, Mid-West
leased its primary manufacturing facility under
a lease treated as a capital lease for financial
reporting purposes. The Company has entered into
a new lease for the facility, oncurrent with the
acquisition, that will be treated as an operating
lease for financial reporting purposes.
(2) Selling, general and administrative expenses have
been increased (reduced) for the following:
Elimination of sales commissions paid to a company
related to Mid-West via common ownership $ (3,522)
Elimination of capitalized building lease depreciation $ (32)
Increase in goodwill amortization (based on a 40-year life) 1,452
----------
$ (2,102)
==========
(3) Interest expense has been increased for the following:
Financing of purchase, including acquisition
costs and deferred financing costs, net of cash
acquired $ 80,800
Weighted average DT interest rate for 1996 7.50%
----------
6,060
Additional amortization related to deferred financing
fees (five-year amortization period) 480
Elimination of historical Mid-West interest income, net 65
----------
$ 6,605
==========
The adjustment does not reflect the effect of the
write-off of deferred financing fees related to the
Company's existing credit facility, which was replaced
with the Amended Facility. Such write-off, net of
related tax benefits, of approximately $324 is presented
as an extraordinary item in the historical unaudited
consolidated statement of operations for the nine
months ended March 30, 1997.
(4) Amount reflects the estimated income tax effect
of pro forma adjustments (excluding non-deductible
goodwill amortization).
(5) The reduction in interest expense reflects the
application of the net proceeds from the Equity
Offering to repay approximately $73,500 of the
outstanding indebtedness of the Company. Further,
the reduction reflects the terms of the Company's
Second Amended and Restated Credit Facilities Agreement
(the "Amended Facility") which resulted in a reduction
in interest rates of 0.75% per annum on borrowings
outstanding under the Amended Facility upon prepayment
of indebtedness with net proceeds from the Equity Offering.
26
<PAGE>
(6) Amount represents the interest savings relative to
the repayment of certain outstanding indebtedness with
the Original Offering net proceeds. Given the
Company's level of outstanding debt in 1996 and the
fact that certain immaterial acquisitions have not been
reflected in the pro forma statement of operations for
the fiscal year ended June 30, 1996, the pro forma effects
of the application of net proceeds from the Original
Offering, in conjunction with the pro forma effects of
the Equity Offering, results in an excess cash position
for the Company throughout the fiscal year ended June 30,
1996 on a pro forma basis. The pro forma effects of any
interest income earned on such excess cash balances (and
any related increase in primary and fully diluted earnings
per share) have not been included herein.
(7) Amount represents the dividends on the Company-obligated
mandatorily redeemable convertible preferred securities
of subsidiary DT Capital Trust at a rate per annum of 7.16%.
(8) Fully diluted earnings per share is calculated on an
"as converted" basis for Company-obligated mandatorily
redeemable convertible preferred securities of subsidiary
DT Capital Trust.
27
<PAGE>
Pro Forma Unaudited Consolidated Statement of Operations
For the Nine Months Ended March 30, 1997
<TABLE>
<CAPTION>
Mid-West
Consolidated
Balances for
the Period
from Pro Forma Equity
DT July 1, 1996 to Purchase Equity Offering
March 30, 1997 July 18, 1996 Accounting Mid-West Offering Pro Forma
as Reported as Reported Adjustments Pro Forma Adjustments As Adjusted
-------------- --------------- ----------- --------- ----------- -----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Net Sales $ 286,687 $ 7,172 $ 293,859 $ 293,859
Cost of Sales 206,545 5,183 $ 88(1) 211,816 211,816
--------- --------- --------- --------- --------- ---------
Gross Profit 80,142 1,989 (88) 82,043 $ 0 82,043
Selling, general and
administrative
expenses 40,105 739 118(2) 40,962 40,962
--------- --------- --------- --------- --------- ---------
Operating income 40,037 1,250 (206) 41,081 0 41,081
Interest expense
(income) net 8,825 19 545(3) 9,389 (2,598)(5) 6,791
Dividends on
Company-obligated
mandatorily
redeemable
convertible
preferred
securities of
subsidiary DT
Capital Trust
holding solely
Convertible Junior
Subordinated
Debentures of
the Company
--------- --------- --------- --------- --------- ---------
Income before
provision for income
taxes 31,212 1,231 (751) 31,692 2,598 34,290
Provision for income
taxes 13,085 492 (252)(4) 13,325 1,039(4) 14,364
--------- --------- --------- --------- --------- ---------
Income from
continuing
operations $ 18,127 $ 739 $ (499) $ 18,367 $ 1,559 $ 19,926
--------- --------- --------- --------- --------- ---------
Primary earnings
per common share
from continuing
operations $ 1.70 $ 1.73 $ 1.68
--------- --------- ---------
Fully diluted earnings
per common share
from continuing
operations
Weighted average
number of common
shares - primary 10,633,899 10,633,899 1,228,022 11,861,921
Weighted average
number of common
shares - fully diluted
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Original
Original Offering
Offering Pro Forma
Adjustments As Adjusted
----------- -----------
(Dollars in thousands, except per share data)
<S> <C> <C>
Net Sales $ 293,859
Cost of Sales 211,816
----------- ---------
Gross Profit 82,043
Selling, general and
administrative
expenses 40,962
----------- ---------
Operating income 41,081
Interest expense
(income) net (3,797)(6) 2,994
Dividends on
Company-obligated
mandatorily
redeemable
convertible
preferred
securities of
subsidiary DT
Capital Trust
holding solely
Convertible Junior
Subordinated
Debentures of
the Company 3,759(7) 3,759
----------- ---------
Income before
provision for income
taxes 38 34,328
Provision for income
taxes 15(4) 14,379
----------- ---------
Income from
continuing
operations $ 23 $ 19,949
----------- ---------
Primary earnings
per common share
from continuing
operations $ 1.68
---------
Fully diluted earnings
per common share
from continuing
operations $ 1.62(8)
---------
Weighted average
number of common
shares - primary 11,861,921
Weighted average
number of common
shares - fully diluted 13,668,373(8)
</TABLE>
28
<PAGE>
Footnotes to Pro Forma Unaudited Consolidated Statement of Operations
For the Nine Months Ended March 30, 1997
(1) Cost of sales has been increased (reduced) for
the following:
Elimination of capitalized building lease
depreciation $ (25)
Increase in operating lease expense related to
the building 113
----------
$ 88
==========
Prior to its acquisition by the Company, Mid-West
leased its primary manufacturing facility under
a lease treated as a capital lease for financial
reporting purposes. The Company has entered into
a new lease for the facility, oncurrent with the
acquisition, that will be treated as an operating
lease for financial reporting purposes.
(2) Selling, general and administrative expenses have
been increased (reduced) for the following:
Elimination of capitalized building lease depreciation $ (3)
Increase in goodwill amortization (based on a 40-year life) 121
----------
$ 118
==========
(3) Interest expense has been increased for the following:
Financing of purchase, including acquisition costs and
deferred financing costs, net of cash acquired $ 505
Additional amortization related to deferred financing
fees (five-year amortization life) 40
----------
545
==========
The adjustment does not reflect the effect of the
write-off of deferred financing fees related to the
Company's existing credit facility, which was replaced
with the Amended Facility. Such write-off, net of
related tax benefits, of approximately $324 is presented
as an extraordinary item in the historical unaudited
consolidated statement of operations for the nine
months ended March 30, 1997.
(4) Amount reflects the estimated income tax effect
of pro forma adjustments (excluding non-deductible
goodwill amortization).
(5) The reduction in interest expense reflects the
application of the net proceeds from the Equity
Offering to repay approximately $73,500 of the
outstanding indebtedness of the Company. Further,
the reduction reflects the terms of the Amended
Facility which resulted in a reduction in interest
rates of 0.75% per annum on borrowings outstanding
under the Amended Facility upon prepayment of
indebtedness with net proceeds from the Equity Offering.
(6) Amount represents the interest savings relative to
the repayment of certain outstanding indebtedness
with the Original Offering net proceeds.
(7) Amount represents the dividends on the Company-
obligated mandatorily redeemable convertible
preferred securities of subsidiary DT Capital
Trust at a rate per annum of 7.16%.
(8) Fully diluted earnings per share is calculated
on an "as converted" basis for the Company-
obligated mandatorily redeemable convertible
preferred securities of subsidiary DT Capital Trust.
29
<PAGE>
Pro Forma Unaudited Consolidated Balance Sheet
March 30, 1997
<TABLE>
<CAPTION>
DT
Consolidated Original
Balances at Original Offering
March 30, 1997 Offering Pro Forma
as Reported Adjustments As Adjusted
-------------- ----------- -----------
(Dollars in Thousands)
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 730 $ 730
Accounts receivable, net 47,490 47,490
Costs and estimated earnings in excess
of amounts billed 72,143 72,143
Inventories, net 44,204 44,204
Prepaid expenses and other 6,852 6,852
--------- ---------
Total current assets 171,419 171,419
Property, plant & equipment, net 49,020 49,020
Goodwill, net 168,783 168,783
Other assets, net 3,690 3,690
--------- ---------
$ 392,912 $ 392,912
========= =========
Liabilities and stockholders' equity
Current liabilities:
Current portion of long term debt $ 8,915 ($7,382)(a) $ 1,533
Accounts payable 24,772 24,772
Customer advances 19,191 19,191
Accrued liabilities 30,017 30,017
--------- --------- ---------
Total current liabilities 82,895 (7,382) 75,513
Long-term debt 121,611 (60,118)(a) 61,493
Deferred income taxes 5,282 5,282
Other long-term liabilities 4,241 4,241
Company-obligated mandatorily redeemable
convertible preferred securities of
subsidiary DT Capital Trust holding
solely Convertible Junior Subordinated
Debentures of the Company 70,000 (a) 70,000
Stockholders' equity 178,883 (2,500)(a) 176,383
--------- --------- ---------
$ 392,912 $ 0 $ 392,912
========= ========= =========
</TABLE>
(a) Amount reflects the proceeds of the Original Offering, net of expenses, and
the related repayment of debt.
DESCRIPTION OF THE CONVERTIBLE PREFERRED SECURITIES
The following summary of certain material terms and provisions of the
Convertible Preferred Securities does not purport to be complete and is subject
to, and qualified in its entirety by reference to, the Declaration. The
Convertible Preferred Securities were issued pursuant to the terms of the
Declaration. The Declaration incorporates by reference terms of the Trust
Indenture Act and will be qualified thereunder. The Bank of New York, as
Trustee, acts as indenture trustee for the Declaration for purposes of
compliance with the Trust
30
<PAGE>
Indenture Act. Capitalized terms not otherwise defined herein have the meanings
assigned to them in the Declaration.
General
The Convertible Preferred Securities were issued in fully registered form
without interest coupons.
The Convertible Preferred Securities represent undivided beneficial
ownership interests in the assets of the Issuer and entitle the holders thereof
to a preference in certain circumstances with respect to distributions and
amounts payable on redemption or liquidation over the Common Securities, as well
as other benefits as described in the Declaration.
All of the Common Securities are owned, directly or indirectly, by DT. The
Common Securities rank pari passu, and payments are made thereon pro rata, with
the Convertible Preferred Securities except as described under "--Subordination
of Common Securities". The Convertible Junior Subordinated Debentures are owned
by the Trustee and held for the benefit of the holders of the Trust Securities.
The Guarantee is a full and unconditional guarantee with respect to the
Convertible Preferred Securities, but does not guarantee payment of
distributions or amounts payable on redemption or liquidation of the Convertible
Preferred Securities when the Issuer does not have funds available to make such
payments.
DT has, through the Guarantee, the Convertible Junior Subordinated
Debentures, the Indenture and the Declaration, taken together, fully,
irrevocably and unconditionally guaranteed all of the Issuer's obligations under
the Convertible Preferred Securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents constitutes
such guarantee. It is only the combined operation of these documents that
provides a full, irrevocable and unconditional guarantee of the Issuer's
obligations under the Convertible Preferred Securities. See "Effect of
Obligations Under the Convertible Junior Subordinated Debentures and the
Guarantee".
Distributions
The distributions payable on each Convertible Preferred Security are fixed
at a rate per annum of 7.16% of the stated liquidation preference of $50 per
Convertible Preferred Security. Deferred distributions (and interest thereon)
will accrue interest (compounded quarterly) at the same rate. The term
"distributions" as used herein includes any such distributions payable unless
otherwise stated. The amount of distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months.
Distributions on the Convertible Preferred Securities are cumulative,
accruing from the Original Offering Date and are payable quarterly in arrears on
each March 31, June 30, September 30 and December 31, commencing June 30, 1997,
when, as and if available. DT has the right under the Indenture to defer
interest payments from time to time on the Convertible Junior Subordinated
Debentures for successive periods not exceeding 20 consecutive quarters for each
such period, and, as a consequence, quarterly distributions on the Convertible
Preferred Securities would be deferred by the Issuer (but would continue to
accrue with interest) during any such Deferral Period. In the event that DT
exercises this right, during such period DT (i) shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
(other than stock dividends paid by DT which consist of stock of the same class
as that on which the dividend is being paid and other than any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future or the redemption or
repurchase of any such rights pursuant thereto), (ii) shall not make any payment
of interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by DT that rank pari passu with or junior to the
Convertible Junior Subordinated Debentures, and (iii) shall not make any
guarantee payments with respect to the foregoing (other than pursuant to the
Guarantee). Prior to the termination of any Deferral Period, DT may further
extend such Deferral Period; provided that such Deferral Period together with
all previous and further deferrals thereof may not exceed 20 consecutive
quarters. Upon the termination of any Deferral Period, DT is required to pay all
amounts then due and, upon such payment, DT may select a new Deferral Period,
31
<PAGE>
Period extend beyond the maturity of the Convertible Junior Subordinated
Debentures. See "Description of the Convertible Junior Subordinated
Debentures--Interest" and "--Option to Extend Interest Payment Period".
Distributions on the Convertible Preferred Securities must be paid
quarterly on the dates payable to the extent of funds of the Trust available for
the payment of such distributions. Amounts available to the Trust for
distribution to the holders of the Convertible Preferred Securities will be
limited to payments under the Convertible Junior Subordinated Debentures. See
"Description of the Convertible Junior Subordinated Debentures". The payment of
distributions, to the extent of funds of the Trust available therefor, is
guaranteed by DT on a limited basis, as set forth under "Description of the
Guarantee".
Distributions on the Convertible Preferred Securities are payable to the
holders thereof as they appear on the books and records of the Issuer on the
relevant record dates, which will be one day prior to the relevant payment
dates. Subject to any applicable laws and regulations and the provisions of the
Declaration, each such payment will be made as described under
"--Book-Entry-Only Issuance--The Depository Trust Company" below. In the event
that any date on which distributions are payable on the Convertible Preferred
Securities is not a Business Day, payment of the distribution payable on such
date will be made on the next succeeding day which is a Business Day (without
any distribution or other payment in respect of any such delay) except that, if
such Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date. A "Business Day" shall mean any day other
than a day on which banking institutions in The City of New York are authorized
or required by law to close.
Conversion Rights
General. Convertible Preferred Securities are convertible at any time
(except in the case of Convertible Preferred Securities called for redemption
which shall be convertible at any time prior to the close of business on the
Business Day prior to the Redemption Date), at the option of the holder thereof
and in the manner described below, into shares of DT Common Stock at an initial
conversion rate of 1.2903 shares of DT Common Stock for each Convertible
Preferred Security (equivalent to a conversion price of $38.75 per share of DT
Common Stock), subject to adjustment as described under "--Conversion Price
Adjustments" below. The Issuer has agreed in the Declaration not to convert
Convertible Junior Subordinated Debentures held by it except pursuant to a
notice of conversion delivered to the Conversion Agent by a holder of
Convertible Preferred Securities. A holder of a Convertible Preferred Security
wishing to exercise its conversion right shall deliver an irrevocable conversion
notice, together, if the Convertible Preferred Security is a Certificated
Security (as defined herein), with such Certificated Security, to the Conversion
Agent which shall, on behalf of such holder, exchange such Convertible Preferred
Security for a portion of the Convertible Junior Subordinated Debentures and
immediately convert such Convertible Junior Subordinated Debentures into DT
Common Stock. Holders may obtain copies of the required form of the conversion
notice from the Conversion Agent.
Holders of Convertible Preferred Securities at the close of business on a
distribution record date will be entitled to receive the distribution payable on
such Convertible Preferred Securities on the corresponding distribution payment
date notwithstanding the conversion of such Convertible Preferred Securities
following such distribution record date but prior to such distribution payment
date. Except as provided in the immediately preceding sentence, neither the
Issuer nor DT will make, or be required to make, any payment, allowance or
adjustment for accumulated and unpaid distributions, whether or not in arrears,
on converted Convertible Preferred Securities. DT will make no payment or
allowance for distributions on the shares of DT Common Stock issued upon such
conversion, except to the extent that such shares of DT Common Stock are held of
record on the record date for any such distributions. Each conversion will be
deemed to have been effected immediately prior to the close of business on the
day on which the related conversion notice was received by the Issuer.
No fractional shares of DT Common Stock will be issued as a result of
conversion, but in lieu thereof such fractional interest will be paid by DT in
cash.
Conversion Price Adjustments--General. The conversion price will be subject
to adjustment in certain events including, without duplication: (i) the payment
of dividends (and other distributions) payable in DT Common Stock on any class
of capital stock of DT; (ii) the issuance to all holders of DT Common Stock of
rights
32
<PAGE>
or warrants entitling holders of such rights or warrants to subscribe for or
purchase DT Common Stock at less than the then current market price; (iii)
subdivisions and combinations of DT Common Stock; (iv) the payment of dividends
(and other distributions) to all holders of DT Common Stock consisting of
evidences of indebtedness of DT, securities or capital stock, cash or assets
(including securities, but excluding those rights, warrants, dividends and
distributions referred to in clauses (i) and (ii) and dividends and
distributions paid exclusively in cash); (v) the payment of dividends (and other
distributions) on DT Common Stock paid exclusively in cash, excluding (A) cash
dividends that do not exceed the per share amount of the immediately preceding
regular cash dividend (as adjusted to reflect any of the events referred to in
clauses (i) through (vi) of this sentence) and (B) cash dividends if the
annualized per share amount thereof does not exceed 15% of the current market
price of DT Common Stock as of the trading day immediately preceding the date of
declaration of such dividend; and (vi) payment to holders of DT Common Stock in
respect of a tender or exchange offer (other than an odd-lot offer) by DT or any
subsidiary of DT for DT Common Stock at a price in excess of 110% of the current
market price of DT Common Stock as of the trading day next succeeding the last
date tenders or exchanges may be made pursuant to such tender or exchange offer.
DT may, at its option, make such reductions in the conversion price as the
DT Board of Directors deems advisable to avoid or diminish any income tax to
holders of DT Common Stock resulting from any dividend or distribution of stock
(or rights to acquire stock) or from any event treated as such for income tax
purposes. See "United States Taxation--Adjustment of Conversion Price".
No adjustment of the conversion price will be made upon the issuance of any
shares of DT Common Stock pursuant to any present or future plan providing for
the reinvestment of dividends or interest payable on securities of DT and the
investment of additional optional amounts in shares of DT Common Stock under any
such plan or the issuance of any shares of DT Common Stock or options or rights
to purchase such shares pursuant to any present or future employee, director or
consultant benefit plan or program of DT or pursuant to any option, warrant,
right, or exercisable, exchangeable or convertible security outstanding as of
the date the Convertible Preferred Securities were first issued. There shall
also be no adjustment of the conversion price in case of the issuance of any DT
Common Stock (or securities convertible into or exchangeable for DT Common
Stock), except as specifically described above. If any action would require
adjustment of the conversion price pursuant to more than one of the
anti-dilution provisions, only one adjustment shall be made and such adjustment
shall be the amount of adjustment that has the highest absolute value to holders
of the Convertible Preferred Securities. No adjustment in the conversion price
will be required unless such adjustment would require an increase or decrease of
at least 1% of the conversion price, but any adjustment that would otherwise be
required to be made shall be carried forward and taken into account in any
subsequent adjustment.
Conversion Price Adjustments--Merger, Consolidation or Sale of Assets of
DT. In the event that DT is a party to any transaction (including, without
limitation, a merger, consolidation, sale of all or substantially all of the
assets of DT, recapitalization or reclassification of DT Common Stock or any
compulsory share exchange (each of the foregoing being referred to as a "DT
Transaction")), in each case, as a result of which shares of DT Common Stock
shall be converted into the right (i) in the case of any DT Transaction other
than a DT Transaction involving a Common Stock Fundamental Change (as defined
herein), to receive securities, cash or other property, each Convertible
Preferred Security shall thereafter be convertible into the kind and amount of
securities, cash and other property receivable upon the consummation of such DT
Transaction by a holder of that number of shares of DT Common Stock into which a
Convertible Preferred Security was convertible immediately prior to such DT
Transaction, with such adjustments as provided below, or (ii) in the case of a
DT Transaction involving a Common Stock Fundamental Change, to receive common
stock of the kind received by holders of DT Common Stock (but in each case after
giving effect to any adjustment discussed below relating to a Fundamental Change
if such DT Transaction constitutes a Fundamental Change). The holders of
Convertible Preferred Securities will have no voting rights with respect to any
DT Transaction described in this section.
If any Fundamental Change (as defined herein) occurs, the conversion price
in effect will be adjusted immediately after such Fundamental Change as
described below. In addition, in the event of a Common Stock Fundamental Change,
each Convertible Preferred Security shall be convertible solely into common
stock of the kind received by holders of DT Common Stock as a result of such
Common Stock Fundamental Change.
33
<PAGE>
The conversion price in the case of any DT Transaction involving a
Fundamental Change will be adjusted immediately after such Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change (as defined herein),
the conversion price of the Convertible Preferred Securities will thereupon
become the lower of (A) the conversion price in effect immediately prior to
such Non-Stock Fundamental Change, but after giving effect to any other
prior adjustments, and (B) the result obtained by multiplying the greater
of the Applicable Price (as defined herein) or the then applicable
Reference Market Price (as defined herein) by a fraction of which the
numerator will be $50 and the denominator will be the then current
Redemption Price or, prior to June 1, 2000, an amount per Convertible
Preferred Security determined by DT in its sole discretion, after
consultation with an investment banking firm, to be the equivalent of the
hypothetical redemption price that would have been applicable if the
Convertible Preferred Securities had been redeemable during such period;
and
(ii) in the case of a Common Stock Fundamental Change, the conversion
price of the Convertible Preferred Securities in effect immediately prior
to such Common Stock Fundamental Change, but after giving effect to any
other prior adjustments, will thereupon be adjusted by multiplying such
conversion price by a fraction of which the numerator will be the Purchaser
Stock Price (as defined herein) and the denominator will be the Applicable
Price; provided, however, that in the event of a Common Stock Fundamental
Change in which (A) 100% of the value of the consideration received by a
holder of DT Common Stock is common stock of the successor, acquiror or
other third party (and cash, if any, is paid only with respect to any
fractional interests in such common stock resulting from such Common Stock
Fundamental Change) and (B) all of the DT Common Stock will have been
exchanged for, converted into, or acquired for common stock (and cash with
respect to fractional interests) of the successor, acquiror or other third
party, the conversion price of the Convertible Preferred Securities in
effect immediately prior to such Common Stock Fundamental Change will
thereupon be adjusted by multiplying such conversion price by a fraction of
which the numerator will be one and the denominator will be the number of
shares of common stock of the successor, acquiror, or other third party
received by a holder of one share of DT Common Stock as a result of such
Common Stock Fundamental Change.
In the absence of the Fundamental Change provisions, in the case of a DT
Transaction each Convertible Preferred Security would become convertible into
the securities, cash, or property receivable by a holder of the number of shares
of DT Common Stock into which such Convertible Preferred Security was
convertible immediately prior to such DT Transaction. Thus, in the absence of
the Fundamental Change provisions, a DT Transaction could substantially lessen
or eliminate the value of the conversion privilege associated with the
Convertible Preferred Securities. For example, if DT were acquired in a cash
merger, each Convertible Preferred Security would become convertible solely into
cash and would no longer be convertible into securities whose value would vary
depending on the future prospects of DT and other factors.
The foregoing conversion price adjustments are designed, in "Fundamental
Change" transactions where all or substantially all the DT Common Stock is
converted into securities, cash, or property and not more than 50% of the value
received by the holders of DT Common Stock consists of stock listed or admitted
for listing subject to notice of issuance on a national securities exchange or
quoted on the NNM (a "Non-Stock Fundamental Change", as defined herein), to
increase the securities, cash, or property into which each Convertible Preferred
Security is convertible.
In a Non-Stock Fundamental Change transaction in which the initial value
received per share of DT Common Stock (measured as described in the definition
of Applicable Price below) is lower than the then applicable conversion price of
a Convertible Preferred Security but greater than or equal to the "Reference
Market Price" (initially $21.00 but subject to adjustment in certain events as
described below), the conversion price will be adjusted as described above with
the effect that each Convertible Preferred Security will be convertible into
securities, cash or property of the same type received by the holders of DT
Common Stock in such transaction with the conversion price adjusted as though
such initial value had been the Applicable Price.
34
<PAGE>
In a Non-Stock Fundamental Change transaction in which the initial value
received per share of DT Common Stock (measured as described in the definition
of Applicable Price below) is lower than both the Applicable Conversion Price of
a Convertible Preferred Security and the Reference Market Price, the conversion
price will be adjusted as described above but calculated as though such initial
value had been the Reference Market Price.
In a Fundamental Change transaction in which all or substantially all of
the DT Common Stock is converted into securities, cash, or property and more
than 50% of the value received by the holders of DT Common Stock consists of
listed or NNM traded common stock (a "Common Stock Fundamental Change", as
defined herein), the foregoing adjustments are designed to provide in effect
that (a) where DT Common Stock is converted partly into such common stock and
partly into other securities, cash or property, each Convertible Preferred
Security will be convertible solely into a number of shares of such common stock
determined so that the initial value of such shares (measured as described in
the definition of "Purchaser Stock Price" below) equals the value of the shares
of DT Common Stock into which such Convertible Preferred Security was
convertible immediately before the transaction (measured as aforesaid) and (b)
where DT Common Stock is converted solely into such common stock, each
Convertible Preferred Security will be convertible into the same number of
shares of such common stock receivable by a holder of the number of shares of DT
Common Stock into which such Convertible Preferred Security was convertible
immediately before such transaction.
The term "Applicable Price" means (i) in the case of a Non-Stock
Fundamental Change in which the holder of the DT Common Stock receives only
cash, the amount of cash received by the holder of one share of DT Common Stock
and (ii) in the event of any other Non-Stock Fundamental Change or any Common
Stock Fundamental Change, the average of the Closing Prices (as defined herein)
for the DT Common Stock during the ten trading days prior to and including the
record date for the determination of the holders of DT Common Stock entitled to
receive such securities, cash, or other property in connection with such
Non-Stock Fundamental Change or Common Stock Fundamental Change or, if there is
no such record date, the date upon which the holders of the DT Common Stock
shall have the right to receive such securities, cash, or other property (such
record date or distribution date being hereinafter referred as the "Entitlement
Date"), in each case as adjusted in good faith by DT to appropriately reflect
any of the events referred to in clauses (i) through (vi) of the first paragraph
under "--Conversion Price Adjustments--General".
The term "Closing Price" means on any day the last reported sale price on
such day or in case no sale takes place on such day, the average of the reported
closing bid and asked prices in each case on the NNM or, if the stock is not
quoted on such system, on the principal national securities exchange on which
such stock is listed or admitted to trading or if not listed or admitted to
trading on any national securities exchange, the average of the closing bid and
asked prices as furnished by any independent registered broker-dealer firm,
selected by DT for that purpose.
The term "Common Stock Fundamental Change" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors of DT) of the consideration received by holders of DT Common Stock
consists of common stock that for each of the ten consecutive trading days prior
to the Entitlement Date has been admitted for listing or admitted for listing
subject to notice of issuance on a national securities exchange or quoted on the
NNM; provided, however, that a Fundamental Change shall not be a Common Stock
Fundamental Change unless DT continues to exist after the occurrence of such
Fundamental Change and the outstanding Convertible Preferred Securities continue
to exist as outstanding Convertible Preferred Securities.
The term "Fundamental Change" means the occurrence of any transaction or
event in connection with a plan pursuant to which all or substantially all of
the DT Common Stock shall be exchanged for, converted into, acquired for or
constitute solely the right to receive securities, cash or other property
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise); provided that, in the case of a plan involving more than one such
transaction or event, for purposes of adjustment of the conversion price, such
Fundamental Change shall be deemed to have occurred when substantially all of
the DT Common Stock shall be exchanged for, converted into, or acquired for or
constitute solely the right to receive securities, cash, or other property, but
the adjustment shall be based upon the highest weighted average per share
consideration that a holder of DT Common Stock could have received in such
35
<PAGE>
transaction or event as a result of which more than 50% of the DT Common Stock
shall have been exchanged for, converted into, or acquired for or constitute
solely the right to receive securities, cash or other property.
The term "Non-Stock Fundamental Change" means any Fundamental Change other
than a Common Stock Fundamental Change.
The term "Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the Closing Prices for the common stock
received in such Common Stock Fundamental Change for the ten consecutive trading
days prior to and including the Entitlement Date, as adjusted in good faith by
DT to appropriately reflect any of the events referred to in clauses (i) through
(vi) of the first paragraph under "--Conversion Price Adjustments--General".
The term "Reference Market Price" initially means $21.00 (which is an
amount equal to 662/3% of the last reported sale price for the DT Common Stock
on the NNM on June 2, 1997) and, in the event of any adjustment to the
conversion price other than as a result of a Non-Stock Fundamental Change, the
Reference Market Price shall also be adjusted so that the ratio of the Reference
Market Price to the conversion price after giving effect to any such adjustment
shall always be the same as the ratio of $21.00 to the initial conversion price
of the Convertible Preferred Securities.
Optional Redemption
DT is permitted to redeem the Convertible Junior Subordinated Debentures as
described herein under "Description of the Convertible Junior Subordinated
Debentures--Optional Redemption", in whole or in part, from time to time, after
June 1, 2000, upon not less than 30 nor more than 60 days' notice. See
"Description of the Convertible Junior Subordinated Debentures--Optional
Redemption". Upon any redemption in whole or in part of the Convertible Junior
Subordinated Debentures at the option of DT, the Issuer will, to the extent of
the proceeds of such redemption, redeem Convertible Preferred Securities and
Common Securities at the Redemption Price. In the event that fewer than all the
outstanding Convertible Preferred Securities are to be so redeemed, the
Convertible Preferred Securities to be redeemed will be selected as described
under "--Book-Entry-Only Issuance--The Depository Trust Company" below.
In the event of any redemption in part, the Trust shall not be required to
(i) issue, register the transfer of or exchange any Convertible Preferred
Security during a period beginning at the opening of business 15 days before any
selection for redemption of Convertible Preferred Securities and ending at the
close of business on the earliest date in which the relevant notice of
redemption is deemed to have been given to all holders of Convertible Preferred
Securities to be so redeemed and (ii) register the transfer of or exchange any
Convertible Preferred Securities so selected for redemption, in whole or in
part, except for the unredeemed portion of any Convertible Preferred Securities
being redeemed in part.
Tax Event or Investment Company Event Redemption or Distribution
If a Tax Event (as defined herein) shall occur and be continuing, DT shall
cause the DT Trustees to liquidate the Issuer and, after satisfaction of
liabilities to creditors of the Trust, cause Convertible Junior Subordinated
Debentures to be distributed to the holders of the Convertible Preferred
Securities in liquidation of the Issuer within 90 days following the occurrence
of such Tax Event; provided, however, that such liquidation and distribution
shall be conditioned on (i) the DT Trustees' receipt of an opinion of nationally
recognized independent tax counsel (reasonably acceptable to the DT Trustees)
experienced in such matters, which opinion may rely on published revenue rulings
of the Internal Revenue Service (the "Service"), to the effect that the holders
of the Convertible Preferred Securities will not recognize any income, gain or
loss for United States Federal income tax purposes as a result of such
liquidation and distribution of Convertible Junior Subordinated Debentures (a
"No Recognition Opinion"), and (ii) DT being unable to avoid such Tax Event
within such 90-day period by taking some ministerial action or pursuing some
other reasonable measure that, in the sole judgment of DT, will have no adverse
effect on the Issuer, DT or the holders of the Convertible Preferred Securities
and will involve no material cost. Furthermore, if (i) DT has received an
opinion of nationally recognized independent tax counsel (reasonably acceptable
to the DT Trustees) experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that DT would be precluded from
deducting the interest on the
36
<PAGE>
Convertible Junior Subordinated Debentures for United States Federal income tax
purposes, even after the Convertible Junior Subordinated Debentures were
distributed to the holders of the Convertible Preferred Securities upon
liquidation of the Issuer as described above (a "Redemption Tax Opinion"), or
(ii) the DT Trustees shall have been informed by such tax counsel that it cannot
deliver a No Recognition Opinion, DT shall have the right, upon not less than 30
nor more than 60 days' notice and within 90 days following the occurrence of the
Tax Event, to redeem the Convertible Junior Subordinated Debentures, in whole
(but not in part) for cash, at par plus accrued and unpaid interest and,
following such redemption, after satisfaction of liabilities to creditors of the
Trust, all the Convertible Preferred Securities will be redeemed by the Issuer
at the liquidation preference of $50 per Convertible Preferred Security plus
accrued and unpaid distributions; provided, however, that, if at the time there
is available to DT or the Issuer the opportunity to eliminate, within such
90-day period, the Tax Event by taking some ministerial action or pursuing some
other reasonable measure that, in the sole judgment of DT, will have no adverse
effect on the Issuer, DT or the holders of the Convertible Preferred Securities
and will involve no material cost, the Issuer or DT will pursue such measure in
lieu of redemption. See "--Mandatory Redemption". In lieu of the foregoing
options, DT will also have the option of causing the Convertible Preferred
Securities to remain outstanding and pay Additional Interest (as defined herein)
on the Convertible Junior Subordinated Debentures. See "Description of the
Convertible Junior Subordinated Debentures--Additional Interest".
"Tax Event" means that DT shall have obtained an opinion of nationally
recognized independent tax counsel (reasonably acceptable to the DT Trustees)
experienced in such matters to the effect that, as a result of (a) any amendment
to or change (including any announced prospective change (which shall not
include a proposed change), provided that a Tax Event shall not occur more than
90 days before the effective date of any such prospective change) in the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to or
change in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after the Original Offering Date), which
amendment or change is effective or which interpretation or pronouncement is
announced on or after the Original Offering Date, there is more than an
insubstantial risk that (i) the Issuer is or will be subject to United States
Federal income tax with respect to interest received on the Convertible Junior
Subordinated Debentures, (ii) interest paid in cash to the Issuer on the
Convertible Junior Subordinated Debentures is not or will not be deductible for
United States Federal income tax purposes or (iii) the Issuer is or will be
subject to more than a de minimis amount of other taxes, duties, assessments or
other governmental charges.
If an Investment Company Event (as hereinafter defined) shall occur and be
continuing, DT shall cause the DT Trustees to liquidate the Issuer and, after
satisfaction of liabilities to creditors of the Trust, cause the Convertible
Junior Subordinated Debentures to be distributed to the holders of the
Convertible Preferred Securities in liquidation of the Issuer within 90 days
following the occurrence of such Investment Company Event.
The distribution by DT of the Convertible Junior Subordinated Debentures
will effectively result in the cancellation of the Convertible Preferred
Securities.
"Investment Company Event" means the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law") to the effect that the Issuer is or will
be considered an "investment company" which is required to be registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), which Change in
1940 Act Law becomes effective on or after the Original Offering Date.
A "Special Event" means either an Investment Company Event or a Tax Event.
After the date fixed for any distribution of Convertible Junior
Subordinated Debentures (i) the Convertible Preferred Securities will no longer
be deemed to be outstanding, (ii) The Depository Trust Company ("DTC") or its
nominee, as the record holder of the Global Certificates, will receive a
registered global certificate or certificates representing the Convertible
Junior Subordinated Debentures to be delivered upon such distribution
37
<PAGE>
and (iii) any certificates representing Convertible Preferred Securities not
held by DTC or its nominee will be deemed to represent Convertible Junior
Subordinated Debentures having a principal amount equal to the aggregate of the
stated liquidation preference of such Convertible Preferred Securities, with
accrued and unpaid interest equal to the amount of accrued and unpaid
distributions on such Convertible Preferred Securities, until such certificates
are presented to DT or its agent for transfer or reissuance.
There can be no assurance as to the market prices for the Convertible
Preferred Securities or the Convertible Junior Subordinated Debentures that may
be distributed in exchange for Convertible Preferred Securities if a dissolution
and liquidation of an Issuer were to occur. Accordingly, the Convertible
Preferred Securities that an investor may purchase, or the Convertible Junior
Subordinated Debentures that the investor may receive on dissolution and
liquidation of an Issuer, may trade at a discount to the price that the investor
paid to purchase the Convertible Preferred Securities offered hereby.
Mandatory Redemption
The Convertible Junior Subordinated Debentures will mature on May 31, 2012,
and may be redeemed, in whole or in part, at any time after June 1, 2000 or at
any time in certain circumstances upon the occurrence of a Special Event. Upon
the repayment or payment of the Convertible Junior Subordinated Debentures,
whether at maturity or upon redemption or otherwise, the proceeds from such
repayment or redemption shall simultaneously be applied to redeem Trust
Securities having an aggregate liquidation amount equal to the Convertible
Junior Subordinated Debentures so repaid or redeemed at the applicable
redemption price together with accrued and unpaid distributions through the date
of redemption; provided that holders of the Trust Securities shall be given not
less than 30 nor more than 60 days' notice of such redemption. See "--Tax Event
or Investment Company Event Redemption or Distribution" and "Description of the
Convertible Junior Subordinated Debentures--General" and "Optional Redemption".
Redemption Procedures
The Convertible Preferred Securities will not be redeemed unless all
accrued and unpaid distributions have been paid on all Convertible Preferred
Securities for all quarterly distribution periods terminating on or prior to the
date of redemption.
If the Issuer gives a notice of redemption in respect of Convertible
Preferred Securities (which notice will be irrevocable), then, by 12:00 noon,
New York time, on the redemption date, the Issuer will irrevocably deposit with
DTC funds sufficient to pay the amount payable on redemption and will give DTC
irrevocable instructions and authority to pay such amount in respect of
Convertible Preferred Securities represented by the Global Certificates and will
irrevocably deposit with the paying agent for the Convertible Preferred
Securities funds sufficient to pay such amount in respect of any Certificated
Securities and will give such paying agent irrevocable instructions and
authority to pay such amount to the holders of Certificated Securities upon
surrender of their certificates. Notwithstanding the foregoing, distributions
payable on or prior to the redemption date for any Convertible Preferred
Securities called for redemption shall be payable to the holders of such
Convertible Preferred Securities on the relevant record dates for the related
distribution dates. If notice of redemption shall have been given and funds are
deposited as required, then upon the date of such deposit, all rights of holders
of such Convertible Preferred Securities so called for redemption will cease,
except the right of the holders of such Convertible Preferred Securities to
receive the redemption price, but without interest on such redemption price. In
the event that any date fixed for redemption of Convertible Preferred Securities
is not a Business Day, then payment of the amount payable on such date will be
made on the next succeeding day which is a Business Day (without any interest or
other payment in respect of any such delay), except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the redemption price in
respect of Convertible Preferred Securities is improperly withheld or refused
and not paid either by the Issuer or by DT pursuant to the Guarantee described
under "Description of the Guarantee", distributions on such Convertible
Preferred Securities will continue to accrue at the then applicable rate, from
the original redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the amount payable upon redemption (other than for purposes of
calculating any premium).
38
<PAGE>
Subject to the foregoing and applicable law (including, without limitation,
United States Federal securities laws), DT or its subsidiaries may at any time
and from time to time purchase outstanding Convertible Preferred Securities by
tender, in the open market or by private agreement.
Subordination of Common Securities
Payment of distributions on, and the amount payable upon redemption of, the
Trust Securities, as applicable, shall be made pro rata based on the liquidation
preference of the Trust Securities; provided, however, that, if on any
distribution date or redemption date a Declaration Event of Default (as defined
herein under "--Declaration Events of Default") under the Declaration shall have
occurred and be continuing, no payment of any distribution on, or amount payable
upon redemption of, any Common Security, and no other payment on account of the
redemption, liquidation or other acquisition of Common Securities, shall be made
unless payment in full in cash of all accumulated and unpaid distributions on
all outstanding Convertible Preferred Securities for all distribution periods
terminating on or prior thereto, or in the case of payment of the amount payable
upon redemption of the Convertible Preferred Securities, the full amount of such
amount in respect of all outstanding Convertible Preferred Securities shall have
been made or provided for, and all funds available to the Trustee shall first be
applied to the payment in full in cash of all distributions on, or the amount
payable upon redemption of, Convertible Preferred Securities then due and
payable.
In the case of any Declaration Event of Default, the holder of Common
Securities will be deemed to have waived any such Declaration Event of Default
until the effect of all such Declaration Events of Default with respect to the
Convertible Preferred Securities have been cured, waived or otherwise
eliminated. Until any such Declaration Events of Default with respect to the
Convertible Preferred Securities have been so cured, waived or otherwise
eliminated, the Trustee shall act solely on behalf of the holders of the
Convertible Preferred Securities and not the holder of the Common Securities,
and only the holders of the Convertible Preferred Securities will have the right
to direct the Trustee to act on their behalf.
Liquidation Distribution Upon Dissolution
Pursuant to the Declaration, the Issuer shall be dissolved and its affairs
shall be wound up upon the earliest to occur of the following: (i) May 31, 2022,
the expiration of the term of the Issuer, (ii) the bankruptcy of DT or the
holder of the Common Securities, (iii) the filing of a certificate of
dissolution or its equivalent with respect to DT or such holder, or the
revocation of DT's or such holder's charter and the expiration of 90 days after
the date of notice to DT or such holder of revocation without a reinstatement of
its charter, (iv) upon the occurrence of a Tax Event, except in the limited
circumstance described under "-- Tax Event or Investment Company Event
Redemption or Distribution" above, (v) the entry of a decree of a judicial
dissolution of DT, the Trust or such holder, or (vi) the redemption of all the
Trust Securities.
In the event of any voluntary or involuntary liquidation or dissolution of
the Issuer, the holders of the Convertible Preferred Securities at the time will
be entitled to receive out of the assets of the Issuer available for
distribution to holders of Trust Securities, after satisfaction of liabilities
to creditors of the Trust, before any distribution of assets is made to the
holders of the Common Securities, an amount equal to the aggregate of the stated
liquidation preference of $50 per Convertible Preferred Security and accrued and
unpaid distributions thereon to the date of payment (the "Liquidation
Distribution"), unless, in connection with such liquidation or dissolution,
Convertible Junior Subordinated Debentures in an aggregate principal amount
equal to the Liquidation Distribution have been distributed on a pro rata basis
to the holders of the Trust Securities.
Merger, Consolidation or Amalgamation of the Issuer
The Issuer may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other entity or person,
except as described below. The Issuer may, without the consent of the holders of
the Convertible Preferred Securities, consolidate, amalgamate, merge with or
into, or be replaced by, a trust organized as such under the laws of any state
of the United States of America or of the District of Columbia; provided that
(i) if the Issuer is not the survivor, such successor entity either (x)
expressly assumes all of the obligations of the Issuer under the
39
<PAGE>
Convertible Preferred Securities or (y) substitutes for the Convertible
Preferred Securities other securities having substantially the same terms as the
Convertible Preferred Securities (the "Successor Securities") as long as the
Successor Securities rank, with respect to participation in the profits and
distributions or in the assets of the successor entity, at least as high as the
Convertible Preferred Securities rank with respect to participation in the
profits and dividends or in the assets of the Issuer, (ii) DT expressly
acknowledges such successor entity as the holder of the Convertible Junior
Subordinated Debentures, (iii) the Convertible Preferred Securities or any
Successor Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Convertible Preferred Securities are then listed, (iv)
such merger, consolidation, amalgamation or replacement does not cause the
Convertible Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (v)
such merger, consolidation, amalgamation or replacement does not adversely
affect the powers, preferences and other special rights of the holders of the
Convertible Preferred Securities (including any Successor Securities) in any
material respect, (vi) such successor entity has a purpose substantially
identical to that of the Issuer, (vii) DT has provided a guarantee to the
holders of the Successor Securities with respect to such successor entity having
substantially the same terms as the Guarantee and (viii) prior to such merger,
consolidation, amalgamation or replacement, DT has received an opinion of
nationally recognized independent counsel (reasonably acceptable to the Trustee)
to the Issuer experienced in such matters to the effect that (x) such successor
entity will be treated as a grantor trust for United States Federal income tax
purposes, (y) following such merger, consolidation, amalgamation or replacement,
neither DT nor such successor entity will be required to register as an
investment company under the 1940 Act and (z) such merger, consolidation,
amalgamation or replacement will not adversely affect the limited liability of
the holders of the Convertible Preferred Securities. Notwithstanding the
foregoing, the Issuer shall not, except with the consent of holders of 100% in
liquidation amount of the Common Securities, consolidate, amalgamate, merge with
or into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it, if such
consolidation, amalgamation, merger or replacement would cause the Issuer or the
Successor Entity to be classified as other than a grantor trust for United
States Federal income tax purposes.
Declaration Events of Default
An event of default under the Indenture (an "Event of Default") or a
default by DT under the Guarantee constitutes an event of default under the
Declaration with respect to the Trust Securities (a "Declaration Event of
Default"); provided that, pursuant to the Declaration, the holder of the Common
Securities will be deemed to have waived any Declaration Event of Default with
respect to the Common Securities until all Declaration Events of Default with
respect to the Convertible Preferred Securities have been cured, waived or
otherwise eliminated. Until such Declaration Events of Default with respect to
the Convertible Preferred Securities have been so cured, waived or otherwise
eliminated, the Trustee will be deemed to be acting solely on behalf of the
holders of the Convertible Preferred Securities and only the holders of the
Convertible Preferred Securities will have the right to direct the Trustee with
respect to certain matters under the Declaration and, therefore, the Indenture.
As long as the Convertible Preferred Securities are outstanding, upon the
occurrence of a Declaration Event of Default, the Trustee as the sole holder of
the Convertible Junior Subordinated Debentures will have the right under the
Indenture to declare the principal of and interest on the Convertible Junior
Subordinated Debentures to be immediately due and payable. DT and the Issuer are
each required to file annually with the Trustee an officer's certificate as to
its compliance with all conditions and covenants under the Declaration.
Voting Rights; Amendment of Declaration
Except as described herein, under the Trust Act and under "Description of
the Guarantee--Amendments and Assignment", and as otherwise required by law and
the Declaration, the holders of the Convertible Preferred Securities have no
voting rights.
In the event of a payment default on the Convertible Preferred Securities,
any holder of the Convertible Preferred Securities may institute a legal
proceeding directly against DT to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Issuer, the Guarantee Trustee
or any other person or entity. In addition to the rights of the holders of the
Convertible Preferred Securities with respect to the enforcement of payment by
DT to the Issuer of principal of or interest on the Convertible Junior
Subordinated Debentures as provided
40
<PAGE>
under "Description of the Guarantee--General" and "Description of Convertible
Junior Subordinated Debentures--Events of Default", if (i) the Issuer fails to
pay distributions in full on the Convertible Preferred Securities for six
consecutive quarterly distribution periods (whether or not a Deferral Period is
in effect) or (ii) a Declaration Event of Default occurs and is continuing (each
an "Appointment Event"), then the holders of the Convertible Preferred
Securities, acting as a single class, will be entitled by the vote of holders of
a majority in aggregate liquidation amount of the Convertible Preferred
Securities to appoint a Special Trustee. For purposes of determining whether the
Issuer has failed to pay distributions in full for six consecutive quarterly
distribution periods, distributions shall be deemed to remain in arrears,
notwithstanding any payments in respect thereof, until full cumulative
distributions have been or contemporaneously are paid with respect to all
quarterly distribution periods terminating on or prior to the date of payment of
such cumulative distributions. Any holder of Convertible Preferred Securities
(other than DT or any of its affiliates) shall be entitled to nominate any
person to be appointed as Special Trustee. Not later than 30 days after such
right to appoint a Special Trustee arises, the DT Trustees shall convene a
meeting of the holders of Convertible Preferred Securities for the purpose of
appointing a Special Trustee. If the DT Trustees fail to convene such meeting
within such 30-day period, the holders of not less than 10% of the aggregate
stated liquidation amount of the outstanding Convertible Preferred Securities
will be entitled to convene such meeting. The provisions of the Declaration
relating to the convening and conduct of the meetings of the holders will apply
with respect to any such meeting. Any Special Trustee so appointed shall cease
to be a Special Trustee if the Appointment Event pursuant to which the Special
Trustee was appointed and all other Appointment Events cease to be continuing.
Notwithstanding the appointment of any such Special Trustee, DT shall retain all
rights under the Indenture, including the right to defer payments of interest by
extending the interest payment period as provided under "Description of the
Convertible Junior Subordinated Debentures--Option to Extend Interest Payment
Period". If such an extension occurs, there will be no Event of Default under
the Indenture and, consequently, no Declaration Event of Default for failure to
make any scheduled interest payment during the Deferral Period on the date
originally scheduled.
Subject to the requirement of the Trustee obtaining a tax opinion in
certain circumstances set forth in the last sentence of this paragraph, the
holders of a majority in aggregate liquidation amount of the Convertible
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or direct the
exercise of any trust or power conferred upon the Trustee under the Declaration
including the right to direct the Trustee, as holder of the Convertible Junior
Subordinated Debentures, to (i) exercise the remedies available under the
Indenture with respect to the Convertible Junior Subordinated Debentures, (ii)
waive any past Event of Default that is waiveable under the Indenture, (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Convertible Junior Subordinated Debentures shall be due and payable; or (iv)
consent to any amendment, modification or termination of the Indenture or such
Convertible Junior Subordinated Debentures, where such consent shall be
required; provided, however, that, where a consent or action under the Indenture
would require the consent or act of the holders of more than a majority of the
aggregate principal amount of Convertible Junior Subordinated Debentures
affected thereby, only the holders of the percentage of the aggregate stated
liquidation preference of the Convertible Preferred Securities which is at least
equal to the percentage required under the Indenture may direct the Trustee to
give such consent or take such action. The Issuer Trustees shall not revoke any
action previously authorized or approved by a vote of the Convertible Preferred
Securities except by subsequent vote of the holders of the Convertible Preferred
Securities. A holder of Convertible Preferred Securities may also directly
institute a proceeding on behalf of the Issuer for enforcement of payment to the
Issuer of the principal of or interest on the Convertible Junior Subordinated
Debentures on or after the respective due dates specified in the Convertible
Junior Subordinated Debentures. The holders of the Convertible Preferred
Securities would not be able to exercise directly any other remedies available
to the holder of the Convertible Junior Subordinated Debentures unless the
Trustee or the Indenture Trustee, acting for the benefit of the Trustee, fails
to do so. In such event, the holders of at least 25% in aggregate liquidation
preference of outstanding Convertible Preferred Securities would have a right to
institute such proceedings. The Trustee shall notify all holders of the
Convertible Preferred Securities of any notice of default received from the
Indenture Trustee with respect to the Convertible Junior Subordinated
Debentures. Such notice shall state that such Event of Default also constitutes
a Declaration Event of Default. Except with respect to directing the time,
method and place of conducting a proceeding for a remedy, the Trustee shall not
take any of the actions described in clause (i), (ii), (iii) or (iv) above
unless the Trustee has obtained an opinion of nationally recognized independent
tax counsel to the effect that, as a result of such action, the Issuer will not
fail to be classified as a grantor trust for United States Federal income tax
purposes.
41
<PAGE>
In the event the consent of the Trustee, as the holder of the Convertible
Junior Subordinated Debentures, is required under the Indenture with respect to
any amendment, modification or termination of the Indenture, the Trustee shall
request the direction of the holders of the Trust Securities with respect to
such amendment, modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a majority in liquidation
amount of the Trust Securities voting together as a single class; provided,
however, that, where a consent under the Indenture would require the consent of
the holders of more than a majority of the aggregate principal amount of the
Convertible Junior Subordinated Debentures, the Trustee may only give such
consent at the direction of the holders of at least the same proportion in
aggregate stated liquidation preference of the Trust Securities. The Trustee
shall not take any such action in accordance with the directions of the holders
of the Trust Securities unless the Trustee has obtained an opinion of nationally
recognized independent tax counsel to the effect that for the purposes of United
States Federal income tax the Issuer will not be classified as other than a
grantor trust.
A waiver of an Event of Default under the Indenture will constitute a
waiver of the corresponding Declaration Event of Default.
The Declaration may be amended from time to time by the Issuer Trustees,
without the consent of the holders of the Convertible Preferred Securities (i)
to cure any ambiguity, correct or supplement any provisions in the Declaration
that may be defective or inconsistent with any other provision, (ii) to add to
the covenants, restrictions or obligations of DT, (iii) to conform to any change
in Rule 3a-5 of the 1940 Act or written change in interpretation or application
of Rule 3a-5 of the 1940 Act by any legislative body, court, government agency
or regulatory authority, (iv) to modify, eliminate or add to any provisions of
the Declaration to such extent as shall be necessary to ensure that the Issuer
will be classified for United States Federal income tax purposes as a grantor
trust at all times that any Convertible Preferred Securities and Common
Securities are outstanding; provided, however, that in the case of (iii) and
(iv), such amendment shall not adversely affect in any material respect the
interests of any holder of Convertible Preferred Securities or Common
Securities. In addition, if any proposed amendment to the Declaration provides
for (i) any action that would adversely affect the powers, preferences or
special rights of the holders of the Convertible Preferred Securities or the
Common Securities, whether by way of amendment to the Declaration or otherwise,
or (ii) the dissolution, winding-up or termination of the Trust, other than as
described in the Declaration, then the holders of outstanding Convertible
Preferred Securities or Common Securities as a class, will be entitled to vote
on such amendment or proposal (but not on any other amendment or proposal) and
such amendment or proposal shall not be effective except with the approval of
the holders of at least 662/3% in liquidation amount of the Convertible
Preferred Securities or Common Securities, voting together as a single class
provided, however, that, the rights of holders of Convertible Preferred
Securities to appoint, remove or replace a Special Trustee shall not be amended
without the consent of each holder of Convertible Preferred Securities;
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Convertible Preferred Securities or only the
Common Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of 662/3% in liquidation amount of such class.
Any required approval or direction of holders of Convertible Preferred
Securities may be given at a separate meeting of holders of Convertible
Preferred Securities convened for such purpose, at a meeting of all of the
holders of Trust Securities or pursuant to written consent. The DT Trustees will
cause a notice of any meeting at which holders of Convertible Preferred
Securities are entitled to vote, or of any matter upon which action by written
consent of such holders is to be taken, to be mailed to each holder of record of
Convertible Preferred Securities. Each such notice will include a statement
setting forth the following information: (i) the date of such meeting or the
date by which such action is to be taken; (ii) a description of any resolution
proposed for adoption at such meeting on which such holders are entitled to vote
or of such matter upon which written consent is sought; and (iii) instructions
for the delivery of proxies or consents. No vote or consent of the holders of
Convertible Preferred Securities will be required for the Issuer to redeem and
cancel Convertible Preferred Securities or distribute Convertible Junior
Subordinated Debentures in accordance with the Declaration.
Notwithstanding that holders of Convertible Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Convertible Preferred Securities that are owned at such time by DT or any
entity directly or indirectly controlling or controlled by, or under direct or
indirect common
42
<PAGE>
control with, DT, shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if such Convertible Preferred
Securities were not outstanding.
The procedures by which holders of Convertible Preferred Securities may
exercise their voting rights are described below. See "--Book-Entry-Only
Issuance--The Depository Trust Company" below.
Except in the limited circumstances described above, in connection with the
appointment of a Special Trustee, holders of the Convertible Preferred
Securities have no rights to appoint or remove the Issuer Trustees, who may be
appointed, removed or replaced solely by DT as the indirect or direct holder of
all of the Common Securities.
Registration Rights
In connection with the Original Offering, the Company entered into a
registration rights agreement dated June 12, 1997 (the "Registration Rights
Agreement") with the initial purchasers, for the benefit of the holders of the
Convertible Preferred Securities, pursuant to which the Company agreed that it
would, at its cost, (a) file a Registration Statement on Form S-3 (a "Shelf
Registration Statement") covering resales of the Convertible Preferred
Securities (together with the Convertible Junior Subordinated Debentures, the
Guarantee and the related DT Common Stock) pursuant to Rule 415 under the
Securities Act, (b) use its best efforts to cause the Shelf Registration
Statement to be declared effective under the Securities Act and (c) keep the
Shelf Registration Statement effective after its effective date for as long as
shall be required under Rule 144(k) under the Securities Act or any successor
rule or regulation thereto. In addition, the Company agreed that it would, in
the event a Shelf Registration Statement is filed, among other things, provide
to each holder for whom such Shelf Registration Statement was filed copies of
the prospectus which is a part of the Shelf Registration Statement, notify each
such holder when the Shelf Registration Statement has become effective and take
certain other actions as are required to permit unrestricted resales of such
Securities. A holder selling such Securities pursuant to the Shelf Registration
Statement generally will be required to be named as a selling security holder in
the prospectus and to deliver such prospectus to purchasers, would be subject to
certain of the civil liability provisions under the Securities Act in connection
with such sales and would be bound by the provisions of the Registration Rights
Agreement which are applicable to such holder (including certain indemnification
obligations).
If (i) by August 15, 1997, the Shelf Registration Statement had not been
filed with the SEC; (ii) by December 15, 1997, the Shelf Registration Statement
had not been declared effective by the SEC; or (iii) after the Shelf
Registration Statement had been declared effective, such Registration Statement
ceases to be effective or usable (subject to certain exceptions) in connection
with resales of Convertible Preferred Securities in accordance with and during
the periods specified in the Registration Rights Agreement (each such event
referred to in clauses (i) through (iii) a "Registration Default"), the
Convertible Junior Subordinated Debentures will bear interest at the rate per
annum of 7.66% and, therefore, distributions would accrue on the Convertible
Preferred Securities at the rate of 7.66% per annum, from and including the date
on which any such Registration Default shall have occurred to but excluding the
date on which all Registration Defaults have been cured. At all other times,
interest will accrue on the Convertible Junior Subordinated Debentures and
distributions will accrue on the Convertible Preferred Securities at a rate of
7.16% per annum.
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all the provisions of the Registration Rights
Agreement, a copy of which has been filed with the Commission as an exhibit to
the Registration Statement and is incorporated by reference herein.
Book-Entry-Only Issuance--The Depository Trust Company
The description of book-entry procedures in this Prospectus includes
summaries of certain rules and operating procedures of DTC that affect transfers
of interests in the global certificate or certificates issued in connection with
sales of Convertible Preferred Securities made pursuant to this Prospectus. One
or more fully registered global Convertible Preferred Security certificates
(without restrictive legends) (the "Global Certificates") will be issued in the
name of Cede & Co. (as nominee for DTC), representing, in the aggregate,
43
<PAGE>
Convertible Preferred Securities sold in the Original Offering and/or pursuant
to this Prospectus, and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Participants in DTC
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of its
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers and banks and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Commission.
Purchases of Convertible Preferred Securities within the DTC system must be
made by or through Participants, which will receive a credit for the Convertible
Preferred Securities on DTC's records. The ownership interest of each actual
purchaser of Convertible Preferred Securities ("Beneficial Owner") is in turn to
be recorded on the Participants' and Indirect Participants' records. Beneficial
Owners will not receive written confirmation from DTC of their purchases, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the Participants or Indirect Participants through which the Beneficial
Owners purchased Convertible Preferred Securities. Transfers of ownership
interests in the Convertible Preferred Securities are to be accomplished by
entries made on the books of Participants and Indirect Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Convertible Preferred Securities,
except in the event that use of the book-entry system for the Convertible
Preferred Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Convertible
Preferred Securities; DTC's records reflect only the identity of the
Participants to whose accounts such Convertible Preferred Securities are
credited, which may or may not be the Beneficial Owners. The Participants and
Indirect Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants, and by Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Redemption notices in respect of the Convertible Preferred Securities held
in book-entry form shall be sent to Cede & Co. If less than all of the
Convertible Preferred Securities are being redeemed, DTC will determine the
amount of the interest of each Participant to be redeemed in accordance with its
procedures.
Although voting with respect to the Convertible Preferred Securities is
limited, in those cases where a vote is required, neither DTC nor Cede & Co.
will itself consent or vote with respect to Convertible Preferred Securities.
Under its usual procedures, DTC would mail an Omnibus Proxy to the Issuer as
soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Participants to whose accounts the
Convertible Preferred Securities are credited on the record date (identified in
a listing attached to the Omnibus Proxy).
Distributions on the Convertible Preferred Securities held in book-entry
form will be made to DTC in immediately available funds. DTC's practice is to
credit Direct Participants' accounts on the relevant payment date in accordance
with their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payments on such payment date. Payments by
Participants and Indirect Participants to Beneficial Owners will be governed by
standing instructions and customary practices and will be the
44
<PAGE>
responsibility of such Participants and Indirect Participants and not of DTC,
the Issuer or DT, subject to any statutory or regulatory requirements as may be
in effect from time to time. Payment of distributions to DTC is the
responsibility of the Issuer, disbursement of such payments to Participants is
the responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Participants and Indirect Participants.
Except as provided herein, a Beneficial Owner of an interest in a global
Convertible Preferred Security will not be entitled to receive physical delivery
of Convertible Preferred Securities. Accordingly, each Beneficial Owner must
rely on the procedures of DTC to exercise any rights under the Convertible
Preferred Securities.
DTC may discontinue providing its services as securities depository with
respect to the Convertible Preferred Securities at any time by giving notice to
the Issuer. Under such circumstances, in the event that a successor securities
depository is not obtained, Convertible Preferred Security certificates are
required to be printed and delivered. Additionally, the Issuer (with the consent
of DT) may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor depository). In that event, certificates for the
Convertible Preferred Securities will be printed and delivered. In each of the
above circumstances, DT will appoint a paying agent with respect to the
Convertible Preferred Securities.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that DT and the Issuer believe to be reliable,
but none of DT, the Issuer or the Issuer Trustees takes responsibility for the
accuracy thereof.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the global
Convertible Preferred Securities as represented by a Global Certificate.
Payment and Paying Agency
Payments in respect of the Convertible Preferred Securities shall be made
to DTC, which shall credit the relevant accounts at DTC on the applicable
distribution dates or, in the case of Certificated Securities, such payments
shall be made by check mailed to the address of the holder entitled thereto as
such address shall appear on the Register. The Paying Agent shall initially be
The Bank of New York. The Paying Agent shall be permitted to resign as Paying
Agent upon 30 days' written notice to the Issuer Trustees. In the event that The
Bank of New York shall no longer be the Paying Agent, the Trustee shall appoint
a successor to act as Paying Agent (which shall be a bank or trust company).
Registrar, Transfer Agent, Paying Agent and Conversion Agent
The Bank of New York acts as Registrar, Transfer Agent, Paying Agent and
Conversion Agent for the Convertible Preferred Securities.
Registration of transfers of Convertible Preferred Securities will be
effected without charge by or on behalf of the Issuer, but upon payment (with
the giving of such indemnity as the Issuer or DT may require) in respect of any
tax or other government charges which may be imposed in relation to it.
The Issuer will not be required to register or cause to be registered the
transfer of Convertible Preferred Securities after such Convertible Preferred
Securities have been called for redemption.
Information Concerning the Trustee
The Trustee, prior to the occurrence of a default with respect to the Trust
Securities, undertakes to perform only such duties as are specifically set forth
in the Declaration and, after default, shall exercise the same degree of care as
a prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provisions, the Trustee is under no obligation to exercise any
of the powers vested in it by the Declaration at the request of any holder of
Convertible Preferred Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The holders of Convertible Preferred
45
<PAGE>
Securities will not be required to offer such indemnity in the event such
holders, by exercising their voting rights, direct the Trustee to take any
action following a Declaration Event of Default.
Governing Law
The Declaration and the Convertible Preferred Securities are governed by,
and construed in accordance with, the internal laws of the State of Delaware.
Miscellaneous
The Issuer Trustees are authorized and directed to conduct the affairs of
and to operate the Issuer in such a way that the Issuer will not be deemed to be
an "investment company" required to be registered under the 1940 Act or
characterized as other than a grantor trust for Federal income tax purposes and
so that the Convertible Junior Subordinated Debentures will be treated as
indebtedness of DT for United States Federal income tax purposes. In this
connection, the Issuer Trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust or the Declaration
that the Issuer Trustees determine in their discretion to be necessary or
desirable for such purposes as long as such action does not adversely affect the
interests of the holders of the Convertible Preferred Securities.
Holders of the Convertible Preferred Securities have no preemptive rights.
The Issuer may not borrow money or issue debt or mortgage or pledge any of
its assets.
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the Guarantee which
was executed and delivered by DT for the benefit of the holders from time to
time of Convertible Preferred Securities. The summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the Guarantee. The Guarantee incorporates by
reference the terms of the Trust Indenture Act and will be qualified thereunder.
The Bank of New York acts as trustee under the Guarantee for purposes of the
Trust Indenture Act. The Bank of New York, as the Guarantee Trustee, holds the
Guarantee for the benefit of the holders of the Convertible Preferred
Securities.
General
Pursuant to the Guarantee, DT has irrevocably agreed, to the extent set
forth herein, to pay in full on a subordinated basis, to the holders of the
Convertible Preferred Securities, the Guarantee Payments (as defined herein), as
and when due, regardless of any defense, right of set off or counterclaim that
the Issuer may have or assert. The following payments with respect to the
Convertible Preferred Securities, to the extent not paid by or on behalf of the
Issuer (the "Guarantee Payments"), are subject to the Guarantee (without
duplication): (i) any accrued and unpaid distributions which are required to be
paid on the Convertible Preferred Securities to the extent of funds of the Trust
available therefor, (ii) the amount payable upon redemption of the Convertible
Preferred Securities, to the extent of funds of the Trust available therefor,
with respect to any Convertible Preferred Securities called for redemption by
the Issuer and (iii) upon a voluntary or involuntary dissolution, winding up or
termination of the Issuer (other than in connection with the distribution of
Convertible Junior Subordinated Debentures to the holders of the Convertible
Preferred Securities in exchange for Convertible Preferred Securities as
provided in the Declaration), the lesser of (a) the aggregate of the liquidation
preference and all accrued and unpaid dividends on the Convertible Preferred
Securities to the date of payment, to the extent of funds of the Trust available
therefor, and (b) the amount of assets of the Issuer remaining available for
distribution to holders of Convertible Preferred Securities upon the liquidation
of the Issuer. DT's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by DT to the holders of Convertible
Preferred Securities or by causing the Issuer to pay such amounts to such
holders.
46
<PAGE>
Because the Guarantee is a guarantee of payment and not of collection,
holders of the Convertible Preferred Securities may proceed directly against DT
as guarantor, rather than having to proceed against the Issuer before attempting
to collect from DT, and DT waives any right or remedy to require that any action
be brought against the Issuer or any other person or entity before proceeding
against DT. Such obligations will not be discharged except by payment of the
Guarantee Payments in full.
If DT fails to make interest payments on the Convertible Junior
Subordinated Debentures or pay amounts payable upon the redemption, acceleration
or maturity of the Convertible Junior Subordinated Debentures, the Issuer will
have insufficient funds to pay distributions on or to pay amounts payable upon
the redemption or repayment of the Convertible Preferred Securities. The
Guarantee does not cover payment of distributions or the amount payable upon
redemption or repayment in respect of the Convertible Preferred Securities when
the Issuer does not have sufficient funds to pay such distributions or such
amount. However, the Guarantee, when taken together with DT's obligations under
the Convertible Junior Subordinated Debentures, the Indenture and the
Declaration, provides a full, irrevocable and unconditional guarantee of all of
the Issuer's obligations under the Convertible Preferred Securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation of
these documents that provides a full, irrevocable and unconditional guarantee of
the Issuer's obligations under the Convertible Preferred Securities. See "Effect
of Obligations Under the Convertible Junior Subordinated Debentures and the
Guarantee".
Certain Covenants of DT
In the Guarantee, DT has covenanted that, so long as any Convertible
Preferred Securities remain outstanding, if at such time (i) DT has exercised
its option to defer interest payments on the Convertible Junior Subordinated
Debentures and such deferral is continuing, (ii) DT shall be in default with
respect to its payment or other obligations under the Guarantee or (iii) there
shall have occurred any event that, with the giving of notice or the lapse of
time or both, would constitute an Event of Default under the Indenture, then DT
(a) shall not declare or pay dividends on, make distributions with respect to,
or redeem, purchase or acquire, or make a liquidation payment with respect to,
any of its capital stock (other than stock dividends paid by DT which consist of
the stock of the same class as that on which the dividend is being paid and
other than any declaration of a dividend in connection with the implementation
of a stockholders' rights plan, or the issuance of stock under any such plan in
the future or the redemption or repurchase of any such rights pursuant thereto),
(b) shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by DT that rank pari
passu with or junior to the Convertible Junior Subordinated Debentures, and (c)
shall not make any guarantee payments with respect to the foregoing (other than
pursuant to the Guarantee).
As part of the Guarantee, DT has agreed that it will honor all obligations
described therein relating to the conversion of the Convertible Preferred
Securities into DT Common Stock as described in "Description of the Convertible
Preferred Securities--Conversion Rights".
Amendments and Assignment
Except with respect to any changes which do not adversely affect the rights
of holders of Convertible Preferred Securities (in which case no consent of the
holders of the Convertible Preferred Securities will be required), the Guarantee
may be changed only with the prior approval of the holders of not less than
662/3% in aggregate stated liquidation preference of the outstanding Convertible
Preferred Securities. The manner of obtaining any such approval of holders of
the Convertible Preferred Securities is as set forth under "Description of the
Convertible Preferred Securities--Voting Rights; Amendment of Declaration". All
guarantees and agreements contained in the Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of DT and shall inure to the
benefit of the holders of the Convertible Preferred Securities then outstanding.
Except in connection with any permitted merger or consolidation of DT with or
into another entity or any permitted sale, transfer or lease of DT's assets to
another entity as described below under "Description of the Convertible Junior
Subordinated Debentures--Restrictions", DT may not assign its rights or delegate
its obligations under the Guarantee without the prior approval of the holders of
at least 662/3% of the aggregate stated liquidation preference of the
Convertible Preferred Securities then outstanding.
47
<PAGE>
Termination of the Guarantee
The Guarantee will terminate as to each holder of Convertible Preferred
Securities and be of no further force and effect upon (a) full payment of the
applicable redemption price of such holder's Convertible Preferred Securities or
(b) the distribution of DT Common Stock to such holder in respect of the
conversion of such holder's Convertible Preferred Securities into DT Common
Stock or (c) the distribution of the Convertible Junior Subordinated Debentures
to all holders of the Convertible Preferred Securities, and will terminate
completely upon full payment of the amounts payable upon liquidation of the
Issuer. The Guarantee will continue to be effective or will be reinstated, as
the case may be, if at any time any holder of Convertible Preferred Securities
must restore payment of any sums paid under such Convertible Preferred
Securities or the Guarantee.
Status of the Guarantee; Subordination
The Guarantee constitutes an unsecured obligation of DT and ranks (i)
subordinate and junior in right of payment to all liabilities of DT, except any
liabilities that may be made pari passu expressly by their terms, (ii) pari
passu with the most senior preferred or preference stock now or hereafter issued
by DT and with any guarantee now or hereafter entered into by DT in respect of
any preferred or preference stock or preferred securities of any affiliate of DT
and (iii) senior to DT Common Stock. Upon the bankruptcy, liquidation or winding
up of DT, its obligations under the Guarantee will rank junior to all its other
liabilities (except as aforesaid) and, therefore, funds may not be available for
payment under the Guarantee.
The Declaration provides that each holder of Convertible Preferred
Securities by acceptance thereof agrees to the subordination provisions and
other terms of the Guarantee.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, prior to the occurrence of a default, has undertaken
to perform only such duties as are specifically set forth in the Guarantee and,
after default with respect to the Guarantee, shall exercise the same degree of
care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provision, the Guarantee Trustee is under no obligation
to exercise any of the powers vested in it by the Guarantee at the request of
any holder of Convertible Preferred Securities unless it is offered reasonable
indemnity against the costs, expenses and liabilities that might be incurred
thereby.
Governing Law
The Guarantee is governed by and construed in accordance with the laws of
the State of New York, without regard to conflicts of laws principles thereof.
DESCRIPTION OF THE CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
Set forth below is a description of the specific terms of the Convertible
Junior Subordinated Debentures in which the Issuer invested the proceeds of the
issuance and sale of (i) the Convertible Preferred Securities and (ii) the
Common Securities. The following description does not purport to be complete and
is qualified in its entirety by reference to the Indenture dated as of June 1,
1997 (the "Indenture"), between DT and The Bank of New York, as Indenture
Trustee. The Indenture will be qualified under the Trust Indenture Act. The Bank
of New York acts as trustee under the Indenture for purposes of the Trust
Indenture Act. Whenever particular provisions or defined terms in the Indenture
are referred to herein, such provisions or defined terms are incorporated by
reference herein.
Under certain circumstances involving the dissolution of the Issuer
following the occurrence of a Tax Event or Investment Company Event, Convertible
Junior Subordinated Debentures may be distributed to the holders of the
Convertible Preferred Securities in liquidation of the Issuer. See "Description
of the Convertible Preferred Securities--Tax Event or Investment Company Event
Redemption or Distribution".
48
<PAGE>
General
The Convertible Junior Subordinated Debentures were issued as a series of
Convertible Junior Subordinated Debentures under the Indenture. The Trustee is
the initial holder of the Convertible Junior Subordinated Debentures. The
Convertible Junior Subordinated Debentures are limited in aggregate principal
amount to approximately 103.092857% of the aggregate stated liquidation
preference of the Convertible Preferred Securities, such amount being the sum of
the aggregate stated liquidation preference of the Convertible Preferred
Securities and the Common Securities. The Indenture does not limit the aggregate
principal amount of Convertible Junior Subordinated Debentures which may be
issued thereunder and provides that the Convertible Junior Subordinated
Debentures may be issued thereunder from time to time in one or more series.
The entire principal amount of the Convertible Junior Subordinated
Debentures will become due and payable, together with any accrued and unpaid
interest thereon, including Additional Interest (as defined herein), if any, on
May 31, 2012.
The Convertible Junior Subordinated Debentures are unsecured and rank
junior and are subordinate in right of payment to all Senior Indebtedness of DT.
See "--Subordination".
The Convertible Junior Subordinated Debentures, if distributed to holders
of Convertible Preferred Securities in a dissolution of the Issuer, will
initially be issued as a global security to the extent of any Global
Certificates at the time representing any Convertible Preferred Securities and
otherwise in fully registered, certificated form. In the event that Convertible
Junior Subordinated Debentures are issued in certificated form, such Convertible
Junior Subordinated Debentures will be in denominations of $50 and integral
multiples thereof and may be transferred or exchanged at the offices described
below.
Payments on Convertible Junior Subordinated Debentures issued as a global
security will be made to DTC, as the depository for the Convertible Junior
Subordinated Debentures. In the event Convertible Junior Subordinated Debentures
are issued in certificated form, principal and interest will be payable, the
transfer of the Convertible Junior Subordinated Debentures will be registrable
and Convertible Junior Subordinated Debentures will be exchangeable for
Convertible Junior Subordinated Debentures of other denominations of a like
aggregate principal amount at the corporate trust office of the Indenture
Trustee in The City of New York; provided that, unless the Convertible Junior
Subordinated Debentures are held by the Issuer or any successor permissible
under "Description of the Convertible Preferred Securities--Merger,
Consolidation or Amalgamation of the Issuer", payment of interest may be made at
the option of DT by check mailed to the address of the persons entitled thereto.
The Indenture does not contain any provisions that afford holders of
Convertible Junior Subordinated Debentures protection in the event of a highly
leveraged transaction involving DT. The Convertible Junior Subordinated
Debentures are not entitled to the benefit of any sinking fund.
Interest
Each Convertible Junior Subordinated Debenture bears interest at the rate
of 7.16% per annum from the Original Offering Date, payable quarterly in arrears
on March 31, June 30, September 30 and December 31 (each, an "Interest Payment
Date"), commencing June 30, 1997, to the person in whose name such Convertible
Junior Subordinated Debenture is registered at the close of business on the day
immediately preceding such Interest Payment Date. Interest compounds quarterly
and accrues at the annual rate of 7.16% on any interest installment not paid
when due.
The amount of interest payable for any period is computed on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Convertible Junior Subordinated Debentures is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day which is a Business Day (without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
49
<PAGE>
Option to Extend Interest Payment Period
DT shall have the right at any time during the term of the Convertible
Junior Subordinated Debentures to defer interest payments from time to time for
successive periods not exceeding 20 consecutive quarters for each such period.
At the end of each Deferral Period, DT shall pay all interest then accrued and
unpaid (together with interest thereon at the rate specified for the Convertible
Junior Subordinated Debentures to the extent permitted by applicable law). In no
event shall any Deferral Period extend beyond the maturity of the Convertible
Junior Subordinated Debentures. During any Deferral Period, DT (i) shall not
declare or pay dividends on, make distributions with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect to, any of its
capital stock (other than stock dividends paid by DT which consist of stock of
the same class as that on which the dividend is being paid and other than any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future or the redemption or repurchase of any such rights pursuant thereto),
(ii) shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by DT that rank pari
passu with or junior to the Convertible Junior Subordinated Debentures, and
(iii) shall not make any guarantee payments with respect to the foregoing (other
than pursuant to the Guarantee). Prior to the termination of any such Deferral
Period, DT may further extend such Deferral Period; provided that such Deferral
Period together with all previous and further extensions thereof may not exceed
20 consecutive quarters. Upon the termination of any Deferral Period and the
payment of all amounts then due, DT may select a new Deferral Period, subject to
the above requirements. No interest during a Deferral Period, except at the end
thereof, shall be due and payable. If the Issuer shall be the sole holder of the
Convertible Junior Subordinated Debentures, DT shall give the Issuer notice of
its selection of such Deferral Period at least one Business Day prior to the
earlier of (i) the date the distributions on the Convertible Preferred
Securities are payable or (ii) the date the Issuer is required to give notice to
any applicable self-regulatory organization or to holders of the Convertible
Preferred Securities on the record date or the date such distribution is
payable, but in any event not less than ten Business Days prior to such record
date. DT shall cause the Issuer to give notice of DT's selection of such
Deferral Period to the holders of the Convertible Preferred Securities. If the
Issuer shall not be the sole holder of the Convertible Junior Subordinated
Debentures, DT shall give the holders of the Convertible Junior Subordinated
Debentures notice of its selection of such Deferral Period at least ten Business
Days prior to the earlier of (i) the Interest Payment Date or (ii) the date DT
is required to give notice to any applicable self-regulatory organization or to
holders of the Convertible Junior Subordinated Debentures on the record or
payment date of such related interest payment, but in any event not less than
two Business Days prior to such record date.
Additional Interest
If the Issuer would be required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes) imposed
by the United States, or any other taxing authority, then, in any such case, DT
will pay as additional interest ("Additional Interest") such amounts as shall be
required so that the net amounts received and retained by the Issuer after
paying any such taxes, duties, assessments or governmental charges will be not
less than the amounts the Issuer would have received had no such taxes, duties,
assessments or governmental charges been imposed.
Conversion of the Convertible Junior Subordinated Debentures
The Convertible Junior Subordinated Debentures are convertible into DT
Common Stock at the option of the holders of the Convertible Junior Subordinated
Debentures at any time at the initial conversion price of $38.75 subject to the
conversion price adjustments described under "Description of the Convertible
Preferred Securities--Conversion Rights". The Issuer has agreed not to convert
Convertible Junior Subordinated Debentures held by it except pursuant to a
notice of conversion delivered to the Conversion Agent by a holder of
Convertible Preferred Securities. Upon surrender of a Convertible Preferred
Security to the Conversion Agent for conversion, the Issuer will distribute $50
principal amount of the Convertible Junior Subordinated Debentures to the
Conversion Agent on behalf of the holder of the Convertible Preferred Securities
so converted, whereupon the Conversion Agent will convert such Convertible
Junior Subordinated Debentures into DT Common Stock on behalf of such holder.
DT's delivery to the holders of the Convertible Junior Subordinated Debentures
(through the Conversion Agent) of the fixed number of shares of DT Common Stock
into which the Convertible Junior Subordinated Debentures are convertible
(together with the cash payment, if any, in lieu of fractional shares)
50
<PAGE>
will be deemed to satisfy DT's obligation to pay the principal amount of the
Convertible Junior Subordinated Debentures so converted, and the accrued and
unpaid interest thereon attributable to the period from the last date to which
interest has been paid or duly provided for; provided, however, that if any
Convertible Junior Subordinated Debenture is converted after a record date for
payment of interest, the interest payable on the related interest payment date
with respect to such Convertible Junior Subordinated Debenture shall be paid to
the Issuer (which will distribute such interest to the converting holder) or
other holder of Convertible Junior Subordinated Debentures, as the case may be,
despite such conversion.
Optional Redemption
DT shall have the right to redeem the Convertible Junior Subordinated
Debentures, in whole or in part, at any time or from time to time after June 1,
2000, upon not less than 30 nor more than 60 days' notice, at the following
prices per $50 principal amount of the Convertible Junior Subordinated
Debentures to be redeemed plus any accrued and unpaid interest, including
Additional Interest, if any, to the redemption date, if redeemed during the
12-month period ending June 1:
Price per $50
Principal
Year Amount
---- -------------
2001 $ 52.51
2002 52.15
2003 51.79
2004 51.43
2005 51.07
2006 50.72
2007 50.36
and thereafter at $50 per $50 principal amount of Convertible Junior
Subordinated Debentures plus, in each case, accrued and unpaid interest,
including Additional Interest, if any, to the redemption date.
In the event of any redemption in part, DT shall not be required to (i)
issue, register the transfer of or exchange any Convertible Junior Subordinated
Debenture during a period beginning at the opening of business 15 days before
any selection for redemption of Convertible Junior Subordinated Debentures and
ending at the close of business on the earliest date on which the relevant
notice of redemption is deemed to have been given to all holders of Convertible
Junior Subordinated Debentures to be so redeemed and (ii) register the transfer
of or exchange any Convertible Junior Subordinated Debentures so selected for
redemption, in whole or in part, except the unredeemed portion of any
Convertible Junior Subordinated Debenture being redeemed in part.
Tax Event or Investment Company Event Redemption or Distribution
Under certain circumstances, DT shall have the right, upon not less than 30
nor more than 60 days' notice and within 90 days following the occurrence of a
Tax Event to redeem the Convertible Junior Subordinated Debentures, in whole
(but not in part) for cash, at par plus accrued and unpaid interest. See
"Description of the Convertible Preferred Securities-Tax Event or Investment
Company Event Redemption or Distribution".
Subordination
The Indenture provides that the Convertible Junior Subordinated Debentures
are subordinate and junior in right of payment to all Senior Indebtedness of DT
as provided in the Indenture. No payment of principal of (including redemption
payments), or interest on, the Convertible Junior Subordinated Debentures may be
made (i) if any Senior Indebtedness is not paid when due, any applicable grace
period with respect to such default has ended and such default has not been
cured or waived, or (ii) if the maturity of any Senior Indebtedness has been
accelerated because of a default. Upon any distribution of assets of DT to
creditors upon any dissolution, winding up, liquidation or reorganization,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all principal of, and premium, if any, and interest due or to
become due on, all Senior
51
<PAGE>
Indebtedness must be paid in full before the holders of the Convertible Junior
Subordinated Debentures are entitled to receive or retain any payment. In the
event that, notwithstanding the foregoing, any payment or distribution of cash,
property or securities shall be received or collected by a holder of the
Convertible Junior Subordinated Debentures in contravention of the foregoing
provisions, such payment or distribution shall be held for the benefit of and
shall be paid over to the holders of Senior Indebtedness or their representative
or representatives or to the trustee or trustees under any indenture under which
any instrument evidencing Senior Indebtedness may have been issued, as their
respective interests may appear, to the extent necessary to pay in full all
Senior Indebtedness then due, after giving effect to any concurrent payment to
the holders of Senior Indebtedness. Subject to the payment in full of all Senior
Indebtedness, the rights of the holders of the Convertible Junior Subordinated
Debentures will be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions applicable to Senior
Indebtedness until all amounts owing on the Convertible Junior Subordinated
Debentures are paid in full.
The term "Senior Indebtedness" shall mean in respect of DT (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of such
obligor for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by such obligor, (ii) all
capital lease obligations of such obligor, (iii) all obligations of such obligor
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of such obligor and all obligations of such obligor under any
title retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such obligor for the
reimbursement of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction, (v) all obligations of the type referred
to in clauses (i) through (iv) above of other persons for the payment of which
such obligor is responsible or liable as obligor, guarantor or otherwise, and
(vi) all obligations of the type referred to in clauses (i) through (v) above of
other persons secured by any lien on any property or asset of such obligor
(whether or not such obligation is assumed by such obligor), except for (1) any
such indebtedness that is by its terms subordinated to or pari passu with the
Convertible Junior Subor dinated Debentures and (2) any indebtedness (including
all other debt securities and guarantees in respect of those debt securities)
initially issued to any other trust, or a trustee of such trust, partnership or
other entity affiliated with DT that is, directly or indirectly, a financing
vehicle of DT (a "Financing Entity") in connection with the issuance by such
Financing Entity of preferred securities or other similar securities. Senior
Indebtedness will also include interest accruing subsequent to events of
bankruptcy of DT and its subsidiaries at the rate provided for in the
documentation governing such Senior Indebtedness, whether or not such interest
is an allowed claim enforceable against the debtor in a bankruptcy case under
relevant bankruptcy law. Such Senior Indebtedness shall continue to be Senior
Indebtedness and entitled to the benefits of the subordination provisions
irrespective of any amendment, modification or waiver of any term of such Senior
Indebtedness.
The Indenture does not limit the aggregate amount of Senior Indebtedness DT
may issue. At March 30, 1997, Senior Indebtedness of DT aggregated approximately
$130.5 million (or $63.0 million of Senior Indebtedness after giving pro forma
effect to the Original Offering). See "Capitalization" and "Pro Forma Selected
Consolidated Financial Data" .
Certain Covenants
If (i) there shall have occurred any event that would constitute an Event
of Default, (ii) DT shall be in default with respect to its payment of any
obligations under the Guarantee, or (iii) DT shall have given notice of its
election to defer payments of interest on the Convertible Junior Subordinated
Debentures by extending the interest payment period as provided in the Indenture
and such period, or any extension thereof, shall be continuing, then DT (a)
shall not declare or pay dividends on, make distributions with respect to, or
redeem, purchase or acquire, or make a liquidation payment with respect to, any
of its capital stock (other than stock dividends paid by DT which consist of
stock of the same class as that on which the dividend is being paid and other
than any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future or the redemption or repurchase of any such rights pursuant thereto), (b)
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by DT that rank pari
passu with or junior to the Convertible Junior Subordinated Debentures, and (c)
shall not make any guarantee payments with respect to the foregoing (other than
pursuant to the Guarantee).
52
<PAGE>
DT has agreed (i) to directly or indirectly maintain 100% ownership of the
Common Securities of the Trust; provided, however, that any permitted successor
of DT under the Indenture may succeed to DT's ownership of such Common
Securities and (ii) to use its reasonable efforts to cause the Trust (x) to
remain a statutory business trust, except in connection with the distribution of
Convertible Junior Subordinated Debentures to the holders of Trust Securities in
liquidation of the Trust, the redemption of all of the Trust Securities of the
Trust, or certain mergers, consolidations or amalgamations, each as permitted by
the Declaration, and (y) to otherwise continue to be classified as a grantor
trust for United States Federal income tax purposes.
Restrictions
The Indenture provides that DT shall not consolidate with or merge with or
into any other corporation, or, directly or indirectly, convey, transfer or
lease all or substantially all of the properties and assets of DT on a
consolidated basis to any Person, unless either DT is the continuing corporation
or such corporation or Person assumes by supplemental indenture all the
obligations of DT under the Indenture and the Convertible Junior Subordinated
Debentures, no default or Event of Default shall exist immediately after the
transaction, and the surviving corporation or such Person is a corporation,
partnership or trust organized and validly existing under the laws of the United
States of America, any state thereof or the District of Columbia.
Events of Default
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Event of Default"
with respect to the Convertible Junior Subordinated Debentures: (i) failure for
30 days to pay interest on the Convertible Junior Subordinated Debentures,
including any Additional Interest in respect thereof, when due; or (ii) failure
to pay principal of or premium, if any, on the Convertible Junior Subordinated
Debentures when due whether at maturity, upon redemption, by declaration or
otherwise; or (iii) failure by DT to issue and deliver shares of DT Common Stock
upon an election by a holder of Convertible Preferred Securities to convert such
Convertible Preferred Securities; or (iv) failure to observe or perform any
other covenant contained in the Indenture for 90 days after notice; or (v) the
dissolution, winding up or termination of the Issuer, except in connection with
the distribution of Convertible Junior Subordinated Debentures to the holders of
Convertible Preferred Securities in liquidation of the Issuer, the redemption of
all of the outstanding Convertible Preferred Securities of the Issuer or in
connection with certain mergers, consolidations or amalgamations permitted by
the Declaration; or (vi) certain events in bankruptcy, insolvency or
reorganization of DT. A default under any other indebtedness of DT or the Issuer
would not constitute an Event of Default under the Convertible Junior
Subordinated Debentures.
The Indenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Convertible Junior Subordinated Debentures
may declare the principal of and interest (including any Additional Interest) on
the Convertible Junior Subordinated Debentures due and payable immediately on
the occurrence of an Event of Default and, should the Indenture Trustee or such
holders of Convertible Junior Subordinated Debentures fail to make such
declaration, the holders of at least 25% in aggregate liquidation preference of
outstanding Convertible Preferred Securities shall have such right. After such
acceleration, but before a judgment or decree based on acceleration, the holders
of a majority in aggregate principal amount of outstanding Convertible Junior
Subordinated Debentures may, under certain circumstances, rescind and annul such
acceleration if all Events of Default, other than the nonpayment of accelerated
principal, have been cured or waived as provided in the Indenture and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Indenture Trustee.
No holder of any Convertible Junior Subordinated Debenture will have any
right to institute any proceeding with respect to the Indenture or for any
remedy thereunder, unless such holder shall have previously given to the
Indenture Trustee written notice of a continuing Event of Default and, if the
Issuer is not the sole holder of Convertible Junior Subordinated Debentures,
unless the holders of at least 25% in aggregate principal amount of the
Convertible Junior Subordinated Debentures then outstanding shall also have made
written request, and offered reasonable indemnity, to the Indenture Trustee to
institute such proceeding as Indenture Trustee, and the Indenture Trustee shall
not have received from the holders of a majority in aggregate principal amount
of the outstanding Convertible Junior Subordinated Debentures a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days. However, such limitations do not apply
53
<PAGE>
to a suit instituted by a holder of a Convertible Junior Subordinated Debenture
or a holder of a Convertible Preferred Security for enforcement of payment of
the principal of or interest on such Convertible Junior Subordinated Debenture
on or after the respective due dates specified in such Convertible Junior
Subordinated Debenture or for the conversion of a Convertible Preferred Security
or a Convertible Junior Subordinated Debenture.
Notwithstanding the foregoing, a holder of Convertible Preferred Securities
may directly institute a proceeding on behalf of the Issuer for enforcement of
payment to such holder of such holder's ratable portion of the principal of or
interest on the Convertible Junior Subordinated Debentures on or after the
respective due dates specified in the Convertible Junior Subordinated Debentures
or for the conversion of a Convertible Preferred Security or Convertible Junior
Subordinated Debenture. The holders of the Convertible Preferred Securities
would not be able to exercise directly any other remedies available to the
holder of the Convertible Junior Subordinated Debentures unless the Trustee or
the Indenture Trustee, acting for the benefit of the Trustee, fails to do so. In
such event, the holders of at least 25% in aggregate liquidation preference of
outstanding Convertible Preferred Securities would have such right to institute
proceedings.
Subject to the provisions of the Indenture relating to the duties of the
Indenture Trustee in case an Event of Default shall occur and be continuing, the
Indenture Trustee will be under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any holders of
Convertible Junior Subordinated Debentures, unless such holders shall have
offered to the Indenture Trustee reasonable indemnity. Subject to such
provisions for the indemnification of the Indenture Trustee, the holders of a
majority in aggregate principal amount of the Convertible Junior Subordinated
Debentures then outstanding will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercising any trust or power conferred on the Indenture Trustee
with respect to such series.
The holders of a majority in aggregate outstanding principal amount of all
series of the Convertible Junior Subordinated Debentures affected thereby may,
on behalf of the holders of all the Convertible Junior Subordinated Debentures
of such series, waive any past default, except a default in the payment of
principal, premium, if any, or interest (unless such default has been cured and
a sum sufficient to pay all matured installments of principal, premium, if any,
and interest due otherwise than by acceleration has been deposited with the
Indenture Trustee) or a default in respect of a covenant or provision which
under the Indenture cannot be modified or amended without the consent of the
holder of each Convertible Junior Subordinated Debenture. DT is required to file
annually with the Indenture Trustee and the Trustee a certificate as to whether
or not DT is in compliance with all the conditions and covenants under the
Indenture.
Modification of the Indenture
From time to time, DT and the Trustee may, without the consent of the
holders of the Convertible Junior Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies (provided that any such action
does not adversely affect the interests of the holders of the Convertible Junior
Subordinated Debentures). The Indenture contains provisions permitting DT and
the Indenture Trustee, with the consent of the holders of not less than a
majority in principal amount of the Convertible Junior Subordinated Debentures
of each series which are affected by the modification, to modify the Indenture
or any supplemental indenture affecting that series or the rights of the holders
of that series of Convertible Junior Subordinated Debentures; provided that no
such modification may, without the consent of the holder of each outstanding
Convertible Junior Subordinated Debenture affected thereby, (i) extend the fixed
maturity of any Convertible Junior Subordinated Debentures of any series, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the redemption
thereof, or adversely affect the right to convert Convertible Junior
Subordinated Debentures, without the consent of the holder of each Convertible
Junior Subordinated Debenture so affected, or (ii) reduce the percentage of
Convertible Junior Subordinated Debentures, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of each Convertible Junior Subordinated Debenture then outstanding and affected
thereby, provided that, so long as any of the Convertible Preferred Securities
remains outstanding, no such modification may be made that adversely affects the
holders of such Convertible Preferred Securities, and no termination of the
Indenture may occur, and no waiver of any Event of Default or compliance with
any covenant under the Indenture shall be effective, without
54
<PAGE>
the prior consent of the holders of the percentage of the aggregate stated
liquidation preference of the outstanding Convertible Preferred Securities which
is at least equal to the percentage of aggregate stated liquidation preference
of the outstanding Convertible Junior Subordinated Debentures required to make
such modification.
In addition, DT and the Indenture Trustee may execute, without the consent
of any holder of Convertible Junior Subordinated Debentures, any supplemental
indenture for certain other usual purposes including the creation of any new
series of Convertible Junior Subordinated Debentures.
Set off
Notwithstanding anything contained to the contrary in the Indenture, DT
shall have the right to set off any payment with respect to the Convertible
Junior Subordinated Debentures it is otherwise required to make thereunder with
and to the extent DT has theretofore made, or is concurrently on the date of
such payment making, a payment under the Guarantee.
Information Concerning the Indenture Trustee
The Indenture Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Indenture and, after default, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision, the Indenture
Trustee is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Convertible Junior Subordinated
Debentures, unless offered reasonable indemnity by such holder against the
costs, expenses and liabilities which might be incurred thereby. The Indenture
Trustee is not required to expend or risk its own funds or otherwise incur
personal financial liability in the performance of its duties if the Indenture
Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
Governing Law
The Indenture and the Convertible Junior Subordinated Debentures are
governed by, and construed in accordance with, the laws of the State of New
York, without regard to conflicts of laws principles thereof.
EFFECT OF OBLIGATIONS UNDER THE
CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of the Issuer is to issue
the Trust Securities and use the proceeds thereof to purchase from DT the
Convertible Junior Subordinated Debentures.
As long as payments of interest and other payments are made when due on the
Convertible Junior Subordinated Debentures, such payments will be sufficient to
cover distributions and payments due on the Convertible Preferred Securities
primarily because (i) the aggregate principal amount of Convertible Junior
Subordinated Debentures will be equal to the sum of the aggregate stated
liquidation preference of the Convertible Preferred Securities and the Common
Securities; (ii) the interest rate and interest and other payment dates on the
Convertible Junior Subordinated Debentures will match the distribution rate and
distribution and other payment dates for the Convertible Preferred Securities;
(iii) the Declaration provides that DT, as originator, shall pay for all, and
the Issuer shall not be obligated to pay, directly or indirectly, for any, costs
and expenses of the Issuer; and (iv) the Declaration further provides that the
holders of Common Securities and the Issuer Trustees shall not cause or permit
the Issuer to, among other things, engage in any activity that is not consistent
with the purposes of the Issuer. In addition, DT has also guaranteed payment of
the costs and expenses of the Issuer.
A holder of Convertible Preferred Securities may directly institute a
proceeding on behalf of the Issuer for enforcement of payment to such holder of
such holder's ratable portion of the principal of or interest on the Convertible
Junior Subordinated Debentures on or after the respective due dates specified in
the Convertible Junior Subordinated Debentures. The holders of the Convertible
Preferred Securities would not be able to
55
<PAGE>
exercise directly any other remedies available to the holder of the Convertible
Junior Subordinated Debentures unless the Trustee or the Indenture Trustee,
acting for the benefit of the Trustee, fails to do so. In such event, the
holders of at least 25% in aggregate liquidation preference of outstanding
Convertible Preferred Securities would have such right to institute proceedings.
In addition, if DT fails to make interest or other payments on the Convertible
Junior Subordinated Debentures when due, the Declaration provides a mechanism
whereby the holders of the Convertible Preferred Securities may (i) appoint a
Special Trustee and (ii) direct the Trustee to enforce its rights under the
Convertible Junior Subordinated Debentures. If the Trustee fails to enforce its
rights under the Convertible Junior Subordinated Debentures, the Indenture
provides that a holder of Convertible Preferred Securities may, after a holder
makes written request to the Trustee to enforce such rights, institute a legal
proceeding directly against DT to enforce the Trustee's right under the
Convertible Junior Subordinated Debentures without first instituting any legal
proceeding against the Trustee or any other person or entity.
Payments of distributions and other payments due on the Convertible
Preferred Securities out of moneys held by the Issuer are irrevocably guaranteed
by DT to the extent set forth under "Description of the Guarantee", although the
Guarantee does not cover payment of distributions or the amount payable upon
redemption or repayment in respect of the Convertible Preferred Securities when
the Issuer does not have sufficient funds to pay such distributions or such
amount. If and to the extent that DT does not make payments on the Convertible
Junior Subordinated Debentures, it is expected that the Issuer will not have
sufficient funds to pay distributions or other payments due on the Convertible
Preferred Securities. However, the Guarantee, when taken together with DT's
obligations under the Convertible Junior Subordinated Debentures, the Indenture
and the Declaration, provides a full, irrevocable and unconditional guarantee of
payments of distributions and other amounts due on the Convertible Preferred
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Issuer's obligations under the
Convertible Preferred Securities.
If DT fails to make payments under the Guarantee, any holder of a
Convertible Preferred Security may institute a legal proceeding directly against
DT to enforce its rights under the Guarantee without first instituting a legal
proceeding against the Issuer or any other person or entity. Such payment would
be made directly to the holders of the Convertible Preferred Securities. If DT
fails to make payments in respect of the Issuer's costs and expenses as required
by the Declaration, a creditor of the Issuer may institute a legal proceeding
directly against DT to enforce such payments.
56
<PAGE>
DESCRIPTION OF DT CAPITAL STOCK
General
The Amended and Restated Certificate of Incorporation of the Company (the
"Certificate") authorizes 1,500,000 shares of Preferred Stock, $.01 par value
("DT Preferred Stock") and 100,000,000 shares of DT Common Stock. At June 27,
1997, there were outstanding (a) no shares of DT Preferred Stock, (b) 11,300,875
shares of DT Common Stock and (c) stock options to purchase an aggregate of
approximately 952,150 shares of DT Common Stock.
DT Common Stock
Subject to the rights, if any, of holders of DT Preferred Stock, holders of
DT Common Stock are entitled to receive dividends out of funds legally available
therefor when, as and if declared by the Board of Directors of the Company and
to receive pro rata the net assets of the Company legally available for
distribution upon liquidation or dissolution.
Holders of DT Common Stock are entitled to one vote for each share of DT
Common Stock held on each matter submitted to a vote of stockholders including
the election of directors. Holders of DT Common Stock are not entitled to
cumulative voting, which means that the holders of more than 50% of the
outstanding DT Common Stock can elect all of the directors if they choose to do
so. All shares of outstanding DT Common Stock of the Company are, and the shares
to be issued by the Company upon conversion of the Convertible Junior
Subordinated Debentures will be, fully paid and nonassessable. Holders of DT
Common Stock do not have preemptive or other subscription rights.
The DT Common Stock is quoted on the NNM. ChaseMellon Shareholder Services,
L.L.C. is the Registrar and Transfer Agent for the DT Common Stock.
DT Preferred Stock
The Board of Directors of the Company is authorized to fix the number of
shares and determine the designation of any series of the authorized shares of
the DT Preferred Stock and to determine or alter the rights, preferences,
privileges and restrictions granted to or imposed upon any unissued series of DT
Preferred Stock.
Certain Certificate of Incorporation and By-law Provisions
The Certificate provides that the Company's directors are not liable to the
Company or its stockholders for monetary damages for breach of their fiduciary
duties, except under certain circumstances, including breach of the director's
duty of loyalty, acts or omissions not in good faith or involving intentional
misconduct or a knowing violation of law or any transaction from which the
director derived improper personal benefit. The inclusion of this provision in
the Certificate may have the effect of reducing the likelihood of derivative
litigation against directors and may discourage or deter stockholders or
management from bringing a lawsuit against directors for breach of their duty of
care.
The Certificate grants to the Board of Directors of the Company the power
to amend, adopt or repeal the Company's By-Laws without stockholder vote. The
Company's By-Laws provide that the number of directors shall be as from time to
time fixed by resolution of the Board of Directors of the Company, not less than
3 nor more than 11. The Certificate divides the Company's Board of Directors
into three classes with staggered terms. These provisions, in addition to the
existence of authorized but unissued capital stock, may have the effect, either
alone or in combination with each other, of discouraging an acquisition of the
Company even if such an acquisition is desired by certain stockholders of the
Company.
57
<PAGE>
Certain Effects of Authorized but Unissued Stock
At June 27, 1997, there were 88,699,125 shares of DT Common Stock and
1,500,000 shares of DT Preferred Stock available for future issuance without
stockholder approval. These additional shares may be utilized for a variety of
corporate purposes, including future public offerings to raise additional
capital or to facilitate corporate acquisitions. The Company does not currently
have any plans to issue additional shares of capital stock, other than shares of
DT Common Stock which may be issued (i) upon conversion of the Convertible
Junior Subordinated Debentures, (ii) pursuant to the purchase agreement relating
to the acquisition of Kalish, (iii) upon the exercise of options or (iv)
pursuant to management incentive compensation plans.
One of the effects of the existence of unissued and unreserved DT Common
Stock and undesignated DT Preferred Stock may be to enable the Board of
Directors of the Company to issue shares to persons friendly to current
management which could render more difficult or discourage an attempt to obtain
control of the Company by means of a merger, tender offer, proxy contest or
otherwise, and thereby protect the continuity of the Company's management. The
Board of Directors of the Company can issue DT Preferred Stock with voting and
conversion rights which could adversely affect the voting power of holders of DT
Common Stock.
Delaware Takeover Statute
Section 203 of the Delaware General Corporation Law, as amended ("Section
203"), provides that, subject to certain exceptions specified therein, an
"interested stockholder" of a Delaware corporation shall not engage in any
business combination, including mergers or consolidations or acquisitions of
additional shares of the corporation with the corporation for a three-year
period following the date that such stockholder becomes an "interested
stockholder" unless (i) prior to such date, the board of directors of the
corporation approved either the business combination or the transaction which
resulted in the stockholder becoming an "interested stockholder", (ii) upon
consummation of the transaction which resulted in the stockholder becoming an
"interested stockholder", the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced (excluding certain shares) or (iii) on or subsequent to such dates,
the business combination is approved by the board of directors of the
corporation and authorized at an annual or special meeting of stockholders by
the affirmative vote of at least 662/3% of the outstanding voting stock which is
not owned by the "interested stockholder". Except as otherwise specified in
Section 203, an "interested stockholder" is defined to include (x) any person
that is the owner of 15% or more of the outstanding voting stock of the
corporation, or is an affiliate or associate of the corporation and was the
owner of 15% or more of the outstanding voting stock of the corporation at any
time within three years immediately prior to the relevant date and (y) the
affiliates and associates of any such person.
These provisions could have the effect of delaying, deferring or preventing
a change of control of the Company. The Company's stockholders, by adopting an
amendment to its Certificate or By-Laws, may elect not to be governed by Section
203, effective twelve months after adoption. Neither the Certificate nor the
By-Laws presently exclude the Company from the restrictions imposed by Section
203.
UNITED STATES TAXATION
General
The following is a summary of certain of the material United States Federal
income tax consequences of the purchase, ownership and disposition of
Convertible Preferred Securities. Unless otherwise stated, this summary deals
only with Convertible Preferred Securities held as capital assets. It does not
deal with special classes of holders such as banks, thrifts, real estate
investment trusts, regulated investment companies, insurance companies, dealers
in securities or currencies, tax-exempt investors, or persons that will hold the
Convertible Preferred Securities as other than a capital asset. This summary
also does not address the tax consequences to persons that have a functional
currency other than the U.S. Dollar or the tax consequences to shareholders,
partners or beneficiaries of a holder of Convertible Preferred Securities.
Further, it does not include any description of any alternative minimum tax
consequences or the tax laws of any state or local government or of any foreign
government that may be applicable to the Convertible Preferred Securities. This
58
<PAGE>
summary is based on the Internal Revenue Code of 1986, as amended (the "Code"),
Treasury regulations thereunder (the "Treasury Regulations") and administrative
and judicial interpretations thereof, as of the date hereof, all of which are
subject to change, possibly on a retroactive basis.
Classification of the Convertible Junior Subordinated Debentures
In connection with the issuance of the Convertible Junior Subordinated
Debentures, Dickstein Shapiro Morin & Oshinsky LLP, special counsel to DT and
the Trust, rendered its opinion generally to the effect that, under then current
law and assuming full compliance with the terms of the Convertible Junior
Subordinated Debenture Indenture (and certain other documents), and based on
certain facts and assumptions contained in such opinion, the Convertible Junior
Subordinated Debentures to be held by the Trust will be classified for United
States Federal income tax purposes as indebtedness of DT.
Classification of the Trust
In connection with the issuance of the Convertible Preferred Securities,
Dickstein Shapiro Morin & Oshinsky LLP, special counsel to DT and the Trust,
rendered its opinion generally to the effect that, under then current law and
assuming full compliance with the terms of the Declaration and the Convertible
Junior Subordinated Debenture Indenture (and certain other documents), and based
on certain facts and assumptions contained in such opinion, the Trust will be
classified for United States Federal income tax purposes as a grantor trust and
not as a partnership, an association taxable as a corporation, or a publicly
traded partnership taxable as a corporation. Accordingly, for United States
Federal income tax purposes, each holder of Convertible Preferred Securities
generally will be considered the owner of an undivided interest in the
Convertible Junior Subordinated Debentures, and each holder will be required to
include in its gross income any original issue discount ("OID") accrued with
respect to its allocable share of those Convertible Junior Subordinated
Debentures.
Potential Extension of Interest Payment Period and Original Issue Discount
Because DT has the option, under the terms of the Convertible Junior
Subordinated Debentures, to defer payments of interest by extending interest
payment periods for up to 20 quarters, all of the stated interest payments on
the Convertible Junior Subordinated Debentures will be treated as "original
issue discount". Holders of debt instruments issued with OID must include that
discount in income on an economic accrual basis before the receipt of cash
attributable to the interest, regardless of their method of tax accounting.
Generally, all of a holder's taxable interest income with respect to the
Convertible Junior Subordinated Debentures will be accounted for as OID. Actual
payments and distributions of stated interest will not, however, be separately
reported as taxable income. The amount of OID that accrues in any quarter will
approximately equal the amount of the interest that accrues on the Convertible
Junior Subordinated Debentures in that quarter at the stated interest rate. In
the event that the interest payment period is extended, holders will continue to
accrue OID approximately equal to the amount of the interest payment due at the
end of the extended interest payment period on an economic accrual basis over
the length of the extended interest payment period.
Because income on the Convertible Preferred Securities will constitute OID,
corporate holders of Convertible Preferred Securities will not be entitled to a
dividends-received deduction with respect to any interest earned with respect to
the Convertible Preferred Securities.
Market Discount and Bond Premium
To the extent a holder acquires Convertible Preferred Securities subsequent
to original issuance at a price that is greater or less than the adjusted issue
price of such holder's share of the Convertible Junior Subordinated Debentures
(which generally should approximate par plus accrued but unpaid interest), the
holder will be deemed to have acquired its interest in the Convertible Preferred
Securities with acquisition premium or with market discount, as the case may be.
Such holders are advised to consult their tax advisors as to the income tax
consequences of the acquisition, ownership and disposition of the Convertible
Preferred Securities.
59
<PAGE>
A holder acquiring Convertible Preferred Securities at a premium will be
permitted to reduce the amount of OID required to be included in income to
reflect the acquisition premium. A holder acquiring Convertible Preferred
Securities at a market discount generally will be required to recognize ordinary
income to the extent of accrued market discount upon the retirement of the
underlying Convertible Junior Subordinated Debentures or, to the extent of any
gain, upon the disposition of the Convertible Preferred Securities. Such market
discount would accrue ratably, or, at the election of the holder, under a
constant yield method over the remaining term of the Convertible Junior
Subordinated Debentures. A holder will also be required to defer the deduction
of a portion of the interest paid or accrued on indebtedness incurred to
purchase or carry Convertible Preferred Securities acquired with market
discount. In lieu of the foregoing, a holder may elect to include market
discount in income currently as it accrues on all market discount instruments
acquired by such holder in the taxable year of the election or thereafter, in
which case the interest deferral rule will not apply. A holder may elect, in
lieu of applying the market discount or premium rules described above, to
account for all income under the Convertible Preferred Securities as if it were
OID.
Receipt of Convertible Junior Subordinated Debentures or Cash Upon Liquidation
of the Trust
Under certain circumstances, as described under the caption "Description of
the Convertible Preferred Securities--Tax Event or Investment Company Event
Redemption or Distribution", Convertible Junior Subordinated Debentures may be
distributed to holders in exchange for the Convertible Preferred Securities and
in liquidation of the Trust. Under current law, such a distribution to holders,
for United States Federal income tax purposes, would be treated as a nontaxable
event to each holder, and each holder would receive an aggregate tax basis in
the Convertible Junior Subordinated Debentures equal to such holder's aggregate
tax basis in its Convertible Preferred Securities. A holder's holding period in
the Convertible Junior Subordinated Debentures so received in liquidation of the
Trust would include the period during which the Convertible Preferred Securities
were held by such holder. If, however, the exchange is caused by a Tax Event
which results in the Trust being treated as an association taxable as a
corporation, the distribution would likely constitute a taxable event to holders
of the Convertible Preferred Securities.
Under certain circumstances described herein (see "Description of the
Convertible Preferred Securities"), the Convertible Junior Subordinated
Debentures may be redeemed for cash and the proceeds of such redemption
distributed to holders in redemption of their Convertible Preferred Securities.
Under current law, such a redemption would, for United States Federal income tax
purposes, constitute a taxable disposition of the redeemed Convertible Preferred
Securities, and a holder would recognize gain or loss as if it sold such
redeemed Convertible Preferred Securities for cash. See "--Sale of Convertible
Preferred Securities".
Sale of Convertible Preferred Securities
A holder that sells Convertible Preferred Securities will recognize gain or
loss equal to the difference between the amount realized on the sale of the
Convertible Preferred Securities and the holder's adjusted tax basis in such
Convertible Preferred Securities. A holder's adjusted tax basis in the
Convertible Preferred Securities generally will be its initial purchase price
increased by OID (and accrued market discount, if any) previously includible in
such holder's gross income to the date of disposition and decreased by payments
received on the Convertible Preferred Securities to the date of disposition.
Subject to the market discount rules described above, any such gain or loss will
be a capital gain or loss and will be a long-term capital gain or loss if the
Convertible Preferred Securities have been held for more than one year at the
time of sale.
The Convertible Preferred Securities may trade at a price that does not
accurately reflect the value of accrued but unpaid interest with respect to the
underlying Convertible Junior Subordinated Debentures. A holder who disposes of
his Convertible Preferred Securities between record dates for payments of
distributions thereon will be required to include accrued but unpaid interest on
the Convertible Junior Subordinated Debentures through the date of disposition
in income as ordinary income, and to add such amount to his adjusted tax basis
in his pro rata share of the underlying Convertible Junior Subordinated
Debentures deemed disposed of. To the extent the selling price is less than the
holder's adjusted tax basis (which basis will include, in the form of OID, all
accrued but unpaid interest), a holder will recognize a capital loss. Subject to
certain limited exceptions, capital losses cannot be applied to offset ordinary
income for United States Federal income tax purposes.
60
<PAGE>
Conversion of Convertible Preferred Securities Into DT Common Stock
A holder of Convertible Preferred Securities will not recognize income,
gain or loss upon the conversion, through the Conversion Agent, of Convertible
Junior Subordinated Debentures into DT Common Stock (although the holder will be
required to continue to accrue OID through the date of conversion). The holder
will recognize gain upon the receipt of cash in lieu of a fractional share of DT
Common Stock equal to the amount of cash received less the holder's tax basis in
such fractional share. A holder's tax basis in the DT Common Stock received upon
conversion would generally be equal to the holder's tax basis in the Convertible
Preferred Securities delivered to the Conversion Agent for exchange less the
basis allocated to any fractional share for which cash is received, and a
holder's holding period in the DT Common Stock received upon conversion would
generally begin on the date following the date the holder acquired the
Convertible Preferred Securities delivered to the Conversion Agent for exchange.
If a holder of Convertible Preferred Securities as to which there is
accrued market discount converts the Convertible Preferred Securities into DT
Common Stock, such accrued market discount will carry over to the DT Common
Stock (to the extent such accrued market discount has not been included in
income), and any gain realized upon the subsequent disposition of such DT Common
Stock will, to the extent of such accrued market discount, be taxable as
ordinary interest income.
Adjustment of Conversion Price
Treasury Regulations promulgated under Section 305 of the Code would treat
holders of Convertible Preferred Securities as having received a constructive
distribution from DT in the event the conversion ratio of the Convertible Junior
Subordinated Debentures were adjusted if (i) as a result of such adjustment, the
proportionate interest (measured by the quantum of DT Common Stock into which
the Convertible Junior Subordinated Debentures are convertible) of the holders
of the Convertible Preferred Securities in the assets or earnings and profits of
DT were increased, and (ii) the adjustment was not made pursuant to a bona fide,
reasonable antidilution formula. An adjustment in the conversion ratio would not
be considered made pursuant to such a formula if the adjustment was made to
compensate for certain taxable distributions with respect to the DT Common
Stock. Thus, under certain circumstances, a reduction in the conversion price
for the holders may result in deemed dividend income to holders to the extent of
the current or accumulated earnings and profits of DT. Holders of the
Convertible Preferred Securities would be required to include their allocable
share of such deemed dividend income in gross income but will not receive any
cash related thereto.
United States Alien Holders
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is, as to the United
States, a foreign corporation, a non-resident alien individual, a foreign
partnership, or a foreign estate or trust. Proposed Treasury Regulations were
issued on April 15, 1996 (the "Proposed Regulations") which, if adopted, could
affect the United States Federal income tax consequences to United States Alien
Holders of the Convertible Preferred Securities. The Proposed Regulations are
generally proposed to be effective after December 31, 1997, subject to certain
transition rules. Prospective investors are urged to consult their tax advisors
with respect to the effect the Proposed Regulations may have if adopted.
Under present United States Federal income tax law, (i) payments by the
Trust or any of its paying agents to any holder of a Convertible Preferred
Security who or which is a United States Alien Holder will not be subject to
withholding of United States Federal income tax; provided that (a) the
beneficial owner of the Convertible Preferred Security does not actually or
constructively (including by virtue of its interest in the underlying
Convertible Junior Subordinated Debentures) own 10% or more of the total
combined voting power of all classes of stock of DT entitled to vote, (b) the
beneficial owner of the Convertible Preferred Security is not a controlled
foreign corporation that is related to DT through stock ownership, and (c)
either (A) the beneficial owner of the Convertible Preferred Security certifies
to the Trust or its agent, under penalties of perjury, that it is not a United
States holder and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution"), and holds the Convertible Preferred Security in such capacity,
certifies to the Trust or its agent, under penalties of perjury, that such
statement has been received from the beneficial owner by it or by
61
<PAGE>
a Financial Institution between it and the beneficial owner and furnishes the
Trust or its agent with a copy thereof; and (ii) a United States Alien Holder of
a Convertible Preferred Security will generally not be subject to withholding of
United States Federal income tax on any gain realized upon the sale or other
disposition of a Convertible Preferred Security.
However, a United States Alien Holder of a Convertible Preferred Security
would be subject to United States Federal income tax (including, in the case of
a corporate United States Alien Holder, possibly the branch profits tax) on gain
realized on the sale, exchange or other disposition of the security if (i) the
United States Alien Holder is an individual who is present in the United States
for 183 days or more in the taxable year of disposition, and certain other
conditions apply, (ii) the gain is effectively connected with the conduct by the
United States Alien Holder of a trade or business in the United States, or (iii)
DT is, or during the preceding five years has been, a "United States real
property holding corporation" within the meaning of Section 897(c)(2) of the
Code and either (a) if the Convertible Preferred Securities are considered to be
"regularly traded interests," the United States Alien Holder beneficially owns
(actually or constructively), or during the preceding five years has
beneficially owned (actually or constructively), more than five percent of the
Convertible Preferred Securities or (b) if the Convertible Preferred Securities
are not considered to be regularly traded interests, the United States Alien
Holder beneficially owned (actually or constructively), on the date it acquired
any Convertible Preferred Security, Convertible Preferred Securities having a
fair market value greater than the fair market value of five percent of DT
Common Stock.
DT believes that it is not, has not been, and does not presently expect to
become a United States real property holding corporation. However, there can be
no assurance that DT will not be a United States real property holding
corporation in the future. It is also unclear whether the Convertible Preferred
Securities are now or will become regularly traded interests. Accordingly,
United States Alien Holders should consult their tax advisors regarding the
disposition of the Convertible Preferred Securities.
If a United States Alien Holder is treated as receiving a deemed dividend
as a result of an adjustment of the conversion price of the Convertible Junior
Subordinated Debentures, as described above under "Adjustment of Conversion
Price", such deemed dividend generally will be subject to United States Federal
withholding tax at a 30% (or lower treaty) rate.
Information Reporting and Backup Withholding
Annual information reporting generally will apply to interest accrued and
sale or redemption proceeds received on the Convertible Preferred Securities,
and such amounts may be subject to a "backup" withholding tax of 31% unless the
holder complies with certain identification requirements. Any withheld amounts
will be allowed as a credit against the holder's United States Federal income
tax, provided the required information is provided to the Service.
Possible Tax Law Changes
On February 6, 1997, President Clinton, as part of his Fiscal 1998 Budget
Proposal, proposed certain tax law changes that would, among other things, deny
interest deductions to corporate issuers of debt instruments under certain
circumstances. These proposals, were they to become effective, would not deny DT
a deduction otherwise available for interest paid in cash on the Convertible
Junior Subordinated Debentures, and thus would not give rise to a Tax Event.
However, there can be no assurance that subsequent proposals or final
legislation will not deny DT a deduction otherwise available for such interest
payments, which in turn could give rise to a Tax Event permitting DT to cause a
redemption of the Convertible Junior Subordinated Debentures or a distribution
of the Convertible Junior Subordinated Debentures in liquidation of the Trust,
as described more fully under the caption "Description of the Convertible
Preferred Securities--Tax Event or Investment Company Event Redemption or
Distribution."
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
62
<PAGE>
CONVERTIBLE PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE,
LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED
STATES FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and the Code impose certain requirements on employee benefit plans and certain
other retirement plans and arrangements, including individual retirement
accounts and annuities, that are subject to ERISA and the Code (all of which are
hereinafter referred to as "Plans") and on persons who are fiduciaries with
respect to such Plans. In accordance with ERISA's general fiduciary standards,
before investing in Convertible Preferred Securities, a Plan fiduciary should
determine whether such an investment is permitted under the governing Plan
instruments and is appropriate for the Plan in view of its overall investment
policy and the composition and diversification of its portfolio. Other
provisions of ERISA and the Code prohibit certain transactions involving the
assets of a Plan and persons who have certain specified relationships to the
Plan ("parties in interest" within the meaning of ERISA or "disqualified
persons" within the meaning of the Code). Accordingly, any Plan with respect to
which DT or any of its affiliates would be considered a party in interest or a
disqualified person should not purchase Convertible Preferred Securities.
In addition, under United States Department of Labor Regulation Section
2510.3-101 (the "Regulation"), if immediately after any acquisition of
Convertible Preferred Securities, 25 percent or more of the value of the
Convertible Preferred Securities is held by Plans, employee benefit plans not
subject to ERISA (for example, governmental plans) and entities whose underlying
assets include plan assets by reason of a plan's investment in the entity, then
the assets of the Issuer would be treated as assets of Plans holding Convertible
Preferred Securities, unless another exemption applied.
Any Plan proposing to purchase Convertible Preferred Securities should
consult with its counsel regarding the application of ERISA, the Code and the
Regulation with respect to investment in Convertible Preferred Securities.
63
<PAGE>
SELLING HOLDERS
The Convertible Preferred Securities were originally issued and sold by the
Trust in a transaction exempt from the registration requirements of the
Securities Act, to persons reasonably believed by the Trust to be "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act), to a
limited number of institutional "accredited investors" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) or outside the United
States to non-U.S. persons in offshore transactions in reliance on Regulation S
under the Securities Act. The Selling Holders may from time to time offer and
sell pursuant to this Prospectus any or all of the Convertible Preferred
Securities, any Convertible Junior Subordinated Debentures and DT Common Stock
issued upon conversion of the Convertible Preferred Securities.
The following table sets forth information with respect to the holders of
the Convertible Preferred Securities as of June 27, 1997. Such information has
been obtained from DTC, the Selling Holders and the Property Trustee. The term
Selling Holder includes the beneficial owners of the Convertible Preferred
Securities and their transferees, pledgees, donees or other successors.
NUMBER OF CONVERTIBLE
SELLING HOLDER PREFERRED SECURITIES
-------------- ---------------------
1. The Northwestern Mutual Life Insurance Company 600,000
2. The Travelers Insurance Company 168,000
3. The Travelers Indemnity Company 232,000
4. Massachusetts Mutual Life Insurance Company 160,000
5. MassMutual Participation Investors 20,000
6. MassMutual Corporate Investors 40,000
7. MassMutual Corporate Value Partners Limited 80,000
8. MassMutual High Yield Partners LLC 100,000
---------
Total 1,400,000
No Selling Holder has, or within the past three years has had, any
position, office or other material relationship with the Trust or the Company or
any of their predecessors or affiliates. Because the Selling Holders may,
pursuant to this Prospectus, offer all or some portion of the Convertible
Preferred Securities, the Convertible Junior Subordinated Debentures or the DT
Common Stock issuable upon conversion of the Convertible Preferred Securities,
no estimate can be given as to the amount of the Convertible Preferred
Securities, the Convertible Junior Subordinated Debentures or the DT Common
Stock issuable upon conversion of the Convertible Preferred Securities that will
be held by the Selling Holders upon termination of any such sales. In addition,
the Selling Holders identified above may have sold, transferred or otherwise
disposed of all or a portion of their Convertible Preferred Securities since the
date on which they provided the information regarding their Convertible
Preferred Securities, in transactions exempt from the registration requirements
of the Securities Act.
PLAN OF DISTRIBUTION
The Offered Securities may be sold from time to time to purchasers directly
by the Selling Holders. Alternatively, the Selling Holders may from time to time
offer the Offered Securities to or through underwriters, broker/dealers or
agents, who may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Holders or the purchasers of such
securities for whom they may act as agents.
64
<PAGE>
The Selling Holders and any underwriters, broker/dealers or agents that
participate in the distribution of Offered Securities may be deemed to be
"underwriters" within the meaning of the Securities Act and any profit on the
sale of such securities and any discounts, commissions, concessions or other
compensation received by any such underwriter, broker/dealer or agent may be
deemed to be underwriting discounts and commissions under the Securities Act.
The Offered Securities may be sold from time to time in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices. The
sale of the Offered Securities may be effected in transactions (which may
involve crosses or block transactions) (i) on any national securities exchange
or quotation service on which the Offered Securities may be listed or quoted at
the time of sale, (ii) in the over-the-counter market or (iii) in transactions
otherwise than on such exchanges or in the over-the-counter market. At the time
a particular offering of the Offered Securities is made, a Prospectus
Supplement, if required, will be distributed which will set forth the aggregate
amount and type of Offered Securities being offered and the terms of the
offering, including the name or names of any underwriters, broker/dealers or
agents, any discounts, commissions and other terms constituting compensation
from the Selling Holders and any discounts, commissions or concessions allowed
or reallowed or paid to broker/dealers.
To comply with the securities laws of certain jurisdictions, if applicable,
the Offered Securities will be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the Offered Securities may not be offered or sold unless they have
been registered or qualified for sale in such jurisdictions or any exemption
from registration or qualification is available and is complied with.
The Selling Holders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of any of the Offered Securities by the
Selling Holders. The foregoing may affect the marketability of such securities.
Pursuant to the Registration Rights Agreement, all expenses of the
registration of the Offered Securities will be paid by the Company, including,
without limitation, Commission filing fees and expenses of compliance with state
securities or "blue sky" laws; provided, however, that the Selling Holders will
pay all underwriting discounts and selling commissions, if any. The Selling
Holders will be indemnified by the Company and the Trust, jointly and severally
against certain civil liabilities, including certain liabilities under the
Securities Act, or will be entitled to contribution in connection therewith. The
Company and the Trust will be indemnified by the Selling Holders severally
against certain civil liabilities, including certain liabilities under the
Securities Act, or will be entitled to contribution in connection therewith.
LEGAL MATTERS
The validity of the Convertible Preferred Securities was passed upon for
the Issuer by Morris, Nichols, Arsht & Tunnell, special Delaware counsel to the
Issuer. The validity of the Convertible Junior Subordinated Debentures, the
Guarantee, DT Common Stock issuable upon conversion of such Convertible Junior
Subordinated Debentures and certain United States federal income taxation
matters were passed upon for DT and the Issuer by Dickstein Shapiro Morin &
Oshinsky LLP.
EXPERTS
The consolidated financial statements of the Company incorporated in this
Prospectus by reference to the Annual Report on Form 10-K for the year ended
June 30, 1996 have been so incorporated in reliance on the reports of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
The consolidated financial statements of Mid-West incorporated in this
Prospectus by reference to the Amendment No. 1 to the Current Report on Form
8-K/A, filed with the Commission on September 23, 1996 have been so incorporated
in reliance on the reports of Altschuler, Melvoin and Glasser LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
65
<PAGE>
INDEX OF DEFINED TERMS
Page
1940 Act............................. 37
AAA.................................. 13
Additional Interest.................. 50
Amended Facility..................... 26
AMI.................................. 13
Applicable Price..................... 35
Appointment Event.................... 41
Armac................................ 13
Arrow................................ 13
Beneficial Owner..................... 44
Business Day......................... 32
Certificate.......................... 57
Change in 1940 Act Law............... 37
Closing Price........................ 35
Code................................. 59
Commission........................... 3
Common Securities.................... 1
Common Stock Fundamental Change...... 35
Company.............................. 1
Convertible Junior Subordinated
Debentures......................... 1
Convertible Preferred Securities..... 1
DT................................... 1
DT Common Stock...................... 2
DT Preferred Stock................... 57
DT Transaction....................... 33
DT Trustees.......................... 10
DTC.................................. 37
DTE.................................. 12
DTG.................................. 12
DTMP................................. 12
Declaration.......................... 10
Declaration Event of Default......... 40
Deferral Period...................... 7
Delaware Trustee..................... 10
Entitlement Date..................... 35
Equity Offering...................... 6
ERISA................................ 63
Event of Default..................... 40
Exchange Act......................... 3
Financial Institution................ 61
Financing Entity..................... 52
Fundamental Change................... 35
Global Certificates.................. 43
Guarantee............................ 2
Guarantee Payments................... 46
Guarantee Trustee.................... 10
Hansford............................. 5
Indenture............................ 48
Indenture Trustee.................... 10
Indirect Participants................ 44
Interest Payment Date................ 49
interested stockholder............... 58
Investment Company Event............. 37
<PAGE>
Issuer............................... 1
Issuer Trustees...................... 10
Kalish............................... 13
Lakso................................ 13
LATS................................. 10
Liquidation Distribution............. 39
Mid-West............................. 5
NNM.................................. 3
No Recognition Opinion............... 36
Non-Stock Fundamental Change......... 36
Offered Securities................... 2
Original Offering.................... 1
Original Offering Date............... 1
OID.................................. 59
Participants......................... 44
Peer................................. 12
Placement Agent...................... 9
Plans................................ 63
PORTAL............................... 9
Pro Forma Statements................. 24
Pro Forma Transactions............... 24
Property Account..................... 10
Proposed Regulations................. 61
Prospectus Supplement................ 2
Purchaser Stock Price................ 36
qualified institutional buyer........ 64
Redemption Price..................... 3
Redemption Tax Opinion............... 37
Reference Market Price............... 36
Registration Default................. 43
Registration Rights Agreement........ 43
Registration Statement............... 3
Regulation........................... 63
RIGO................................. 14
SEC.................................. 3
Section 203.......................... 58
Securities Act....................... 1
Selling Holders...................... 2
Sencorp.............................. 13
Senior Indebtedness.................. 52
Service.............................. 36
Shelf Registration Statement......... 43
Special Event........................ 37
Special Trustee...................... 10
Stokes-Merrill....................... 13
Successor Securities................. 40
Swiftpack............................ 13
Tax Event............................ 37
Treasury Regulations................. 59
Trust................................ 1
Trust Act............................ 11
Trust Indenture Act.................. 10
Trustee.............................. 10
United States Alien Holder........... 61
66
<PAGE>
==================================== ====================================
No dealer, salesperson or other
person has been authorized to give
any information or to make any DT Capital Trust
representation not contained in this
Prospectus and, if given or made,
such information or representation
must not be relied upon as having
been authorized by the Company, the
Issuer or any of their agents. This 1,400,000 TIDES (SM)
This Prospectus does not constitute
an offer to sell or a solicitation 7.16% Convertible Preferred
of an offer to buy any of the Securities
securities offered hereby in any
jurisdiction to any person to Term Income Deferrable
whom it is unlawful to make such Equity Securities (TIDES)(SM)
offer in such jurisdiction. Neither
the delivery of this Prospectus nor fully and unconditionally guaranteed
any sale made hereunder shall, under by, and convertible into Common
any circumstances, create any impli- Stock of,
cation that the information herein
is correct as of any time subsequent
to the date hereof or that there has
been no change in the affairs of the
Company since such date.
---------------
TABLE OF CONTENTS
Page
Available Information 3
Incorporation of Certain DT Industries, Inc.
Documents by Reference 4
Prospectus Summary 3
Cautionary Statement
Regarding Forward-Looking
Statements 5
Risk Factors 5
Recent Developments 10
DT Capital Trust 10
The Company 12 PROSPECTUS
Ratio of Earnings to
Fixed Charges 22
Capitalization 23
Accounting Treatment 23
Use of Proceeds 24
Pro Forma Selected
Consolidated Financial
Data 24
Description of the
Convertible Preferred
Securities 30
Description of the Guarantee 46
Description of the
Convertible Junior
Subordinated Debentures 48 Dated ________, 1997
Effects of Obligations
Under the Convertible
Junior Subordinated
Debentures and the
Guarantee 55
Description of DT Capital
Stock 57
United States Taxation 58
ERISA Considerations 63
Selling Holders 64
Plan of Distribution 64
Legal Matters 65
Experts 65
Index of Defined Terms 66
==================================== ====================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses in connection with the distribution of the Offered
Securities being registered hereunder (other than underwriting discounts) are
set forth in the following table (all amounts except the SEC registration fee
are estimated):
<TABLE>
<CAPTION>
Payable by
Company
----------
<S> <C>
Securities and Exchange Commission registration fee ................. $ 21,212
Accounting fees and expenses......................................... 25,000
Legal fees and expenses.............................................. 10,000
Miscellaneous........................................................ 28,788
--------
Total........................................................... $ 85,000
========
</TABLE>
Item 15. Indemnification of Directors and Officers.
Indemnification of Directors and Officers of the Company
Section 145 of the General Corporation Law of the State of Delaware permits
the Company, subject to the standards set forth therein, to indemnify any person
in connection with any action, suit or proceeding brought or threatened by
reason of the fact that such person is or was a director, officer, employee or
agent of the Company or is or was serving as such with respect to another
corporation or entity at the request of the Company. Article VII, Section 8 of
the Company's By-laws provides for full indemnification of its officers,
directors and employees to the extent permitted by Section 145. The officers and
directors of DT are also covered by insurance policies indemnifying them against
certain liabilities, including liabilities arising under the Securities Act,
which might be incurred by them in such capacities.
Indemnification of Trustees of the Trust
The Amended and Restated Declaration of Trust (the "Declaration") provides
for full indemnification of any Trustee, affiliate of any Regular Trustee, or
any officers, directors, shareholders, members, partners, employees,
representatives or agents of the Trust or its affiliates (each an "Indemnified
Person") in connection with any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by the Declaration or by law, except that
an Indemnified Person shall be liable for any loss, damage or claim incurred by
reason of such Indemnified Person's gross negligence (or, in the case of the
Trustee, negligence) or willful misconduct with respect to such acts or
omissions. The Declaration also provides that to the fullest extent permitted by
applicable law, DT shall indemnify each Indemnified Person under the same
standard. The Declaration further provides that, to the fullest extent permitted
by applicable law, expenses (including legal fees) incurred by an Indemnified
Person in defending any claim, demand, action, suit or proceeding shall, from
time to time, be advanced by DT prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by or an undertaking by or on
behalf of the Indemnified Person to repay such amount if it shall be determined
that the Indemnified Person is not entitled to be indemnified for the underlying
cause of action as authorized by the Declaration. In addition, the Regular
Trustees are covered by insurance policies indemnifying them against certain
liabilities, including certain liabilities arising under the Securities Act,
which might be incurred by them in such capacities. The Selling Holders will be
indemnified by DT and the Trust, jointly and severally, against certain civil
liabilities, including certain liabilities under the Securities Act, or will be
entitled to contribution in connection therewith. DT and the Trust will be
indemnified by the Selling Holders severally against certain civil liabilities,
including certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith.
<PAGE>
Item 16. Exhibits.
4.1 Certificate of Trust of DT Capital Trust
4.2 Amended and Restated Declaration of Trust of DT Capital Trust dated as
of June 1, 1997 among DT Industries, Inc., as Sponsor, The Bank of New
York, as Property Trustee, The Bank of New York (Delaware), as
Delaware Trustee, and Stephen J. Gore, Bruce P. Erdel and Gregory D.
Wilson, as Trustees
4.3 Indenture for the 7.16% Convertible Junior Subordinated Deferrable
Interest Debentures Due 2012 dated as of June 1, 1997 among DT
Industries, Inc. and The Bank of New York, as Trustee
4.4 Form of 7.16% Convertible Preferred Securities (included in Exhibit
4.2 above)
4.5 Form of 7.16% Convertible Junior Subordinated Deferrable Interest
Debentures Due 2012 (included in Exhibit 4.3 above)
4.6 Preferred Securities Guarantee Agreement dated June 12, 1997 between
DT Industries, Inc., as Guarantor, and the Bank of New York, as
Preferred Guarantee Trustee
5.1 Opinion of Dickstein Shapiro Morin & Oshinsky LLP as to the legality
of the DT Industries, Inc. Common Stock, 7.16% Convertible Junior
Subordinated Deferrable Interest Debentures Due 2012 and Preferred
Securities Guarantee being registered hereby
5.2 Opinion of Morris, Nichols, Arsht & Tunnell as to the legality of the
7.16% Convertible Preferred Securities being registered hereby
8.1 Opinion of Dickstein Shapiro Morin & Oshinksy LLP as to certain tax
matters
10.1 Registration Rights Agreement dated June 12, 1997 among DT Capital
Trust, DT Industries, Inc. and the Purchasers listed on Schedule A
thereto
10.2 Placement Agreement dated June 12, 1997 among DT Capital Trust, DT
Industries, Inc. and Credit Suisse First Boston Corporation
10.3 Purchase Agreement dated June 12, 1997 among DT Capital Trust, DT
Industries, Inc. and the Purchasers listed on Schedule A thereto
12.1 Statement regarding Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Altschuler, Melvoin and Glasser LLP
II-2
<PAGE>
23.3 Consent of Dickstein Shapiro Morin & Oshinsky LLP (contained in the
Opinions of Counsel filed as Exhibits 5.1 and 8.1 hereto)
23.4 Consent of Morris, Nichols, Arsht & Tunnell (contained in the Opinion
of Counsel filed as Exhibit 5.2 hereto)
24.1 Powers of Attorney
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee under the 7.16%
Convertible Junior Subordinated Debentures Indenture
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Property Trustee under
the Amended and Restated Declaration of Trust
25.3 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Preferred Guarantee
Trustee under the Preferred Securities Guarantee Agreement
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Springfield, State of Missouri on July 8, 1997.
DT INDUSTRIES, INC.
(Registrant)
By: /s/ Bruce P. Erdel
------------------------------------
Bruce P. Erdel
Vice President-Finance
Pursuant to the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities indicated on July 8,
1997.
* Director and Chairman of the Board
- -------------------------------
James J. Kerley
* President, Chief Executive Officer
- ------------------------------- and Director
Stephen J. Gore (Principal executive officer)
/s/ Bruce P. Erdel Vice President-Finance
- ------------------------------- (Principal financial and accounting officer)
Bruce P. Erdel
* Director
- -------------------------------
Lee M. Liberman
* Director
- -------------------------------
Charles F. Pollnow
* Director
- -------------------------------
William H. T. Bush
II-5
<PAGE>
* Director
- -------------------------------
Donald E. Nickelson
* Group President, Packaging Pharmaceutical
- ------------------------------- Group and Director
Graham L. Lewis
* Group President, Assembly Automation
- ------------------------------- Group and Director
John F. Logan
*By: /s/ Bruce P. Erdel
------------------------
Bruce P. Erdel
Attorney-in-Fact
- ------------------
* Such signature has been affixed pursuant to the following Power of Attorney:
II-6
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stephen J. Gore and Bruce P. Erdel, and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign the Registration Statement on Form S-3 of DT Capital Trust
(the "Trust") and DT Industries, Inc., relating to the proposed public offering
of the Convertible Preferred Securities of the Trust, and to sign any and all
amendments (including post-effective amendments) and supplements thereto, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by undersigned, thereunto duly authorized,
in the City of Springfield, State of Missouri on July 8, 1997.
DT CAPITAL TRUST
(Registrant)
By: /s/ Stephen J. Gore
------------------------------------
Stephen J. Gore
Trustee
By: /s/ Bruce P. Erdel
------------------------------------
Bruce P. Erdel
Trustee
By: /s/ Gregory D. Wilson
------------------------------------
Gregory D. Wilson
Trustee
II-8
<PAGE>
INDEX TO EXHIBITS
Sequentially
Exhibit No. Description Numbered Page
- ----------- ----------- -------------
4.1 Certificate of Trust of DT Capital Trust
4.2 Amended and Restated Declaration of Trust
of DT Capital Trust dated as of June 1, 1997
among DT Industries, Inc., as Sponsor, The
Bank of New York, as Property Trustee, The
Bank of New York Delaware), as Delaware
Trustee, and Stephen J. Gore, Bruce P. Erdel
and Gregory D. Wilson, as Trustees
4.3 Indenture for the 7.16% Convertible Junior
Subordinated Deferrable Interest Debentures
Due 2012 dated as of June 1, 1997 among DT
Industries, Inc. and The Bank of New York,
as Trustee
4.4 Form of 7.16% Convertible Preferred
Securities (included in Exhibit 4.2 above)
4.5 Form of 7.16% Convertible Junior Subordinated
Deferrable Interest Debentures Due 2012
(included in Exhibit 4.3 above)
4.6 Preferred Securities Guarantee Agreement
dated June 12, 1997 between DT Industries,
Inc., as Guarantor, and the Bank of New York,
as Preferred Guarantee Trustee
5.1 Opinion of Dickstein Shapiro Morin &
Oshinsky LLP as to the legality of the DT
Industries, Inc. Common Stock, 7.16%
Convertible Junior Subordinated Deferrable
Interest Debentures Due 2012 and Preferred
Securities Guarantee being registered hereby
5.2 Opinion of Morris, Nichols, Arsht & Tunnell
as to the legality of the 7.16% Convertible
Preferred Securities being registered hereby
8.1 Opinion of Dickstein Shapiro Morin &
Oshinsky, LLP as to certain tax matters
10.1 Registration Rights Agreement dated June 12,
1997 among DT Capital Trust, DT Industries,
Inc. and the purchasers listed on Schedule A
thereto
10.2 Placement Agreement dated June 12, 1997 among
DT Capital Trust, DT Industries, Inc. and
Credit Suisse First Boston Corporation
<PAGE>
10.3 Purchase Agreement dated June 12, 1997 among
DT Capital Trust, DT Industries, Inc. and the
Purchasers listed on Schedule A thereto
12.1 Statement regarding Computation of Ratio of
Earnings to Fixed Charges
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Altschuler, Melvoin and Glasser LLP
23.3 Consent of Dickstein Shapiro Morin & Oshinsky
LLP (contained in the Opinions of Counsel
filed as Exhibits 5.1 and 8.1 hereto)
23.4 Consent of Morris, Nichols, Arsht & Tunnell
(contained in the Opinion of Counsel filed as
Exhibit 5.2 hereto)
24.1 Powers of Attorney
25.1 Form T-1 Statement of Eligibility under the
Trust Indenture Act of 1939, as amended, of
The Bank of New York, as Trustee under the
7.16% Convertible Junior Subordinated
Debentures Indenture
25.2 Form T-1 Statement of Eligibility under the
Trust Indenture Act of 1939, as amended, of
The Bank of New York, as Property Trustee
under the Amended and Restated Declaration of
Trust
25.3 Form T-1 Statement of Eligibility under the
Trust Indenture Act of 1939, as amended, of
The Bank of New York, as Preferred Guarantee
Trustee under the Preferred Securities
Guarantee Agreement
CERTIFICATE OF TRUST
The undersigned, the trustees of DT Capital Trust, desiring to form a
business trust, hereby certify pursuant to section 3810 of the Delaware Business
Trust Act, 12 Del. Code Section 3810, as follows:
(a) The name of the business trust being formed hereby (the
"Trust") is DT Capital Trust.
(b) The name and business address of the trustee of the Trust
which has its principal place of business in the State of
Delaware is as follows: The Bank of New York (Delaware),
White Clay Center, Route 273, Wilmington, Delaware 19711.
IN WITNESS WHEREOF, the undersigned, being all of the trustees of the
Trust, have duly executed this Certificate of Trust as of the day and year first
above written.
Dated: May 21, 1997
/s/Stephen J. Gore
-----------------------------
Stephen J. Gore, as Trustee
/s/Bruce P. Erdel
-----------------------------
Bruce P. Erdel, as Trustee
/s/Gregory D. Wilson
-----------------------------
Gregory D. Wilson, as Trustee
<PAGE>
THE BANK OF NEW YORK,
as Property Trustee
By: /s/Marie E. Trimboli
-------------------------------
Name: Marie E. Trimboli
Title: Assistant Treasurer
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/Mary Jane Morrissey
-------------------------------
Name: Mary Jane Morrissey
Title: Authorized Signatory
================================================================================
AMENDED AND RESTATED
DECLARATION OF TRUST
Of
DT CAPITAL TRUST
Dated as of June 1, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Interpretation and Definitions
SECTION 1.01. Definitions........................................ 2
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application................... 12
SECTION 2.02. Lists of Holders of Securities..................... 12
SECTION 2.03. Reports by the Property Trustee.................... 13
SECTION 2.04. Periodic Reports to Property Trustee............... 13
SECTION 2.05 Evidence of Compliance with Conditions Precedent... 13
SECTION 2.06. Events of Default; Waiver.......................... 14
SECTION 2.07. Event of Default; Notice........................... 15
ARTICLE III
Organization
SECTION 3.01. Name............................................... 16
SECTION 3.02. Office............................................. 16
SECTION 3.03. Purpose............................................ 16
SECTION 3.04. Authority.......................................... 16
SECTION 3.05. Title to Property of the Trust..................... 17
SECTION 3.06 Powers and Duties of the Regular Trustees.......... 17
SECTION 3.07. Prohibition of Actions by the Trust and
the Trustees on behalf of the Trust............. 22
SECTION 3.08. Powers and Duties of the Property Trustee.......... 23
<PAGE>
SECTION 3.09. Certain Duties and Responsibilities of
the Property Trustee............................ 26
SECTION 3.10. Certain Rights of Property Trustee................. 29
SECTION 3.11. Delaware Trustee................................... 32
SECTION 3.12. Execution of Documents............................. 32
SECTION 3.13. Not Responsible for Recitals
or Issuance of Securities........................ 32
SECTION 3.14. Duration of Trust................................... 33
SECTION 3.15. Mergers............................................. 33
ARTICLE IV
Sponsor
SECTION 4.01. Sponsor's Purchase of Common Securities............ 35
SECTION 4.02. Responsibilities of the Sponsor.................... 35
SECTION 4.03. Guarantee of Payment of Trust of Obligations....... 36
ARTICLE V
Trustees
SECTION 5.01. Number of Trustees................................. 37
SECTION 5.02. Delaware Trustee................................... 38
SECTION 5.03. Property Trustee; Eligibility...................... 38
SECTION 5.04. Qualifications of Regular Trustees and
Delaware Trustee Generally...................... 39
SECTION 5.05. Initial Trustees.................................... 39
SECTION 5.06. Appointment, Removal and Resignation of Trustees.... 40
SECTION 5.07. Vacancies among Trustees............................ 43
SECTION 5.08. Effect of Vacancies................................. 43
SECTION 5.09. Meetings............................................ 43
SECTION 5.10. Delegation of Power................................. 44
SECTION 5.11. Merger, Conversion, Consolidation or
Succession to Business........................... 44
<PAGE>
ARTICLE VI
Distributions
SECTION 6.01. Distributions...................................... 45
ARTICLE VII
Issuance of Securities
SECTION 7.01. General Provisions Regarding Securities............ 45
SECTION 7.02. Execution and Authentication....................... 46
SECTION 7.03. Form and Dating.................................... 47
SECTION 7.04. Registrar, Paying Agent and Conversion Agent....... 50
SECTION 7.05. Paying Agent to Hold Money in Trust................ 51
SECTION 7.06. Replacement Securities............................. 51
SECTION 7.07. Outstanding Preferred Securities................... 52
SECTION 7.08. Preferred Securities in Treasury................... 52
SECTION 7.09. Temporary Securities............................... 52
SECTION 7.10. Cancellation....................................... 54
ARTICLE VIII
Dissolution and Termination of Trust
SECTION 8.01. Dissolution and Termination of Trust............... 54
ARTICLE IX
Transfer and Exchange
SECTION 9.01. General............................................ 56
SECTION 9.02. Transfer Procedures and Restrictions............... 57
SECTION 9.03. Deemed Security Holders............................ 68
SECTION 9.04. Book Entry Interests............................... 69
SECTION 9.05. Notices to Clearing Agency......................... 70
<PAGE>
SECTION 9.06. Appointment of Successor Clearing Agency........... 70
ARTICLE X
Limitation of Liability of
Holders of Securities, Trustees or Others
SECTION 10.01. Liability.......................................... 70
SECTION 10.02. Exculpation........................................ 71
SECTION 10.03. Fiduciary Duty..................................... 71
SECTION 10.04. Indemnification.................................... 73
SECTION 10.05. Outside Businesses................................. 74
ARTICLE XI
Accounting
SECTION 11.01. Fiscal Year........................................ 74
SECTION 11.02. Certain Accounting Matters......................... 74
SECTION 11.03. Banking............................................ 75
SECTION 11.04. Withholding........................................ 76
ARTICLE XII
Amendments and Meetings
SECTION 12.01. Amendments......................................... 76
SECTION 12.02. Meetings of the Holders of Securities;
Action by Written Consent................ 79
<PAGE>
ARTICLE XIII
Representations of Property Trustee
and Delaware Trustee
SECTION 13.01. Representations and Warranties of
Property Trustee................................ 81
SECTION 13.02. Representations and Warranties of
Delaware Trustee................................ 82
ARTICLE XIV
Registration Rights
SECTION 14.01. Registration Rights................................ 84
ARTICLE XV
Miscellaneous
SECTION 15.01. Notices............................................ 85
SECTION 15.02. Governing Law...................................... 86
SECTION 15.03. Intention of the Parties........................... 87
SECTION 15.04. Headings........................................... 87
SECTION 15.05. Successors and Assigns............................. 87
SECTION 15.06. Partial Enforceability............................. 87
SECTION 15.07. Counterparts....................................... 87
ANNEX I Terms of 7.16% Convertible
Preferred Securities and 7.16%
Convertible Common Securities
Exhibit A-1 Form of Preferred Security
Exhibit A-2 Form of Exchanged Preferred Security
Exhibit A-3 Form of Common Security
<PAGE>
DECLARATION OF TRUST
OF
DT CAPITAL TRUST
June 1, 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of June 1, 1997, by the undersigned trustees (together with all
other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), DT
Industries, Inc., a Delaware corporation, as trust sponsor (the "Sponsor"), and
by the holders, from time to time, of undivided beneficial interests in the
Trust issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established a trust (the "Trust")
under the Delaware Business Trust Act (as hereinafter defined) pursuant to a
Declaration of Trust dated as of May 21, 1997 (the "Original Declaration"), and
a Certificate of Trust filed with the Secretary of State of the State of
Delaware on May 21, 1997, for the sole purpose of issuing and selling certain
securities representing undivided beneficial interests in the assets of the
Trust and investing the proceeds thereof in certain Debentures of the Debenture
Issuer (as hereinafter defined); and
WHEREAS, as of the date hereof, no interests in the Trust have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust,
<PAGE>
2
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
Interpretation and Definitions
SECTION 1.01. Definitions. Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.01;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Exhibits are to Articles and Sections of and Exhibits to this Declaration unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
<PAGE>
3
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Appointment Event" means an event defined in the terms of the Preferred
Securities, as set forth in Annex I, which entitles the Holders of a Majority in
liquidation amount of the Preferred Securities to appoint a Special Regular
Trustee.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Beneficiaries" has the meaning set forth in Section 4.03(a).
"Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Depositary as described in Section 9.04.
"Business Day" means any day other than a day on which banking institutions
in New York, New York are authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code section 3801 et seq., as it may be amended from time to time.
"Certificate" means a certificate in global or definitive form representing
a Common Security or a Preferred Security.
"Closing Date" means the Closing Date as defined in the Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
<PAGE>
4
"Common Securities" has the meaning specified in Section 7.01(a).
"Common Securities Guarantee" means the guarantee agreement to be dated as
of June 12, 1997, of the Sponsor in respect of the Common Securities.
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means the Sponsor in its capacity as issuer of the
Debentures.
"Debenture Trustee" means The Bank of New York, a New York banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the Debenture
Issuer under the Indenture to be held by the Property Trustee, a specimen
certificate for such series of Debentures being Exhibit B.
"Delaware Trustee" has the meaning set forth in Section 5.02.
"Definitive Preferred Securities" means the Regulation S Definitive
Preferred Security, the Restricted Definitive Preferred Security and any other
Preferred Securities in definitive form issued by the Trust.
"Depositary" means The Depository Trust Company, the initial Clearing
Agency.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.01.
"Event of Default" in respect of the Securities means an Event of Default
(as defined in the Indenture) has occurred and is continuing in respect of the
Debentures.
<PAGE>
5
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Exchanged Preferred Securities" means any Preferred Security issued in
connection with a sale pursuant to an effective Shelf Registration Statement and
not bearing any Restricted Securities Legend.
"Holder" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means (a) any Trustee; (b) any Affiliate of any
Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.
"Indenture" means the Indenture dated as of June 1, 1997, between the
Debenture Issuer and The Bank of New York, as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.06(g).
"List of Holders" has the meaning set forth in Section 2.02(a).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities and by the Trust Indenture
Act, Holder(s) of
<PAGE>
6
outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Preferred Securities or Holders of outstanding
Common Securities voting separately as a class, who are the record owners of
more than 50% of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Obligations" means any costs, expenses or liabilities of the Trust, other
than obligations of the Trust to pay to Holders of any Securities or other
similar interests in the Trust the amounts due such Holders pursuant to the
terms of the Securities or such other similar interests, as the case may be.
"Offering Memorandum" means the confidential offering memorandum, dated as
of June 12, 1997, relating to the issuance by the Trust of Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read
the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the
Certificate;
<PAGE>
7
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Participants" has the meaning set forth in Section 7.03(b).
"Paying Agent" has the meaning specified in Section 7.04.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning specified in Section 7.01(a).
"Preferred Securities Guarantee" means the guarantee agreement to be dated
as of June 12, 1997, of the Sponsor in respect of the Preferred Securities.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Depositary, or on the books of a Person
maintaining an account with such Depositary (directly as a Participant or as an
indirect participant, in each case in accordance with the rules of such
Depositary).
<PAGE>
8
"Property Trustee" means the Trustee meeting the eligibility requirements
set forth in Section 5.03.
"Property Trustee Account" has the meaning set forth in Section 3.08(c).
"Purchase Agreement" has the meaning set forth in Section 7.03(a).
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both of them.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated June 12, 1997, among the Sponsor, the Trust, and the Purchasers named in
the Purchase Agreement.
"Regular Trustee" means any Trustee other than the Property Trustee and the
Delaware Trustee.
"Regulation S Definitive Preferred Security" has the meaning set forth in
Section 7.03(c).
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
vice-president, any assistant vice-president, any assistant treasurer, any trust
officer or assistant trust officer or any other officer in the corporate trust
department of the Property Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
<PAGE>
9
"Restricted Definitive Preferred Security" has the meaning set forth in
Section 7.03(c).
"Restricted Period" means the one-year period following the last issue date
for the Preferred Securities (including Preferred Securities issued to cover
overallotments and Common Securities issued in connection with related capital
contributions). The Sponsor shall inform the Trustee as to the termination of
the restricted period and the Trustee may rely conclusively thereon.
"Restricted Preferred Securities" shall include the Regulation S Definitive
Preferred Securities, the Restricted Definitive Preferred Securities and the
Rule 144A Global Preferred Securities.
"Restricted Securities Legend" has the meaning specified in Section
9.02(j).
"Rule 144A Global Preferred Security" has the meaning specified in Section
7.03(a).
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the Rule 144A
Global Preferred Security and any other Preferred Security in global form.
"Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"Shelf Registration Statement" has the meaning specified in Section 14.01.
"66-2/3% in liquidation amount of the Securities" means, except as provided
in the terms of the Preferred Securities and by the Trust Indenture Act, Holders
of outstanding Securities voting together as a single class or,
<PAGE>
10
as the context may require, Holders of Preferred Securities or Holder(s) of
outstanding Common Securities voting separately as a class, representing at
least 66-2/3% of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions, to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Special Regular Trustee" means a Regular Trustee appointed by the Holders
of a Majority in liquidation amount of the Preferred Securities in accordance
with Section 5.06(a)(ii)(B).
"Sponsor" means DT Industries, Inc., a Delaware corporation, or any
successor entity in a merger, consolidation or amalgamation, in its capacity as
sponsor of the Trust.
"Super Majority" has the meaning set forth in Section 2.06(a)(ii).
"Tax Event" means the Regular Trustees shall have received an opinion of
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (a) any amendment to, or change (including any
announced prospective change (which shall not include a proposed change),
provided that a Tax Event shall not occur more than 90 days before the effective
date of any such prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein or (b) any amendment to or change in an
interpretation or application of such laws or regulations, there is more than an
insubstantial risk that (i) the Trust would be subject to United States federal
income tax with respect to income accrued or received on the Debentures, (ii)
interest paid in cash to the Trust on the Subordinated Debt Securities is not or
will not be deductible by the Debenture Issuer for United States federal income
tax purposes or (iii) the Trust would be subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
<PAGE>
11
"10% in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holders of
outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Preferred Securities or Holders of outstanding
Common Securities, voting separately as a class, representing 10% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time.
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
"Unrestricted Definitive Preferred Security" has the meaning set forth in
Section 9.02(c).
<PAGE>
12
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This Declaration is
subject to the provisions of the Trust Indenture Act that are required to be
part of this Declaration, which are incorporated by reference in and made part
of this Declaration and shall, to the extent applicable, be governed by such
provisions.
(b) The Property Trustee shall be the only Trustee which is a Trustee for
the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.02. Lists of Holders of Securities. (a) Each of the Sponsor and
the Regular Trustees on behalf of the Trust shall provide the Property Trustee
(i) within 14 days after each record date for payment of Distributions, a list,
in such form as the Property Trustee may reasonably require, of the names and
addresses of the Holders of the Securities ("List of Holders") as of such record
date, provided that neither the Sponsor nor the Regular Trustees on behalf of
the Trust shall be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Property Trustee by the Sponsor and the Regular Trustees on behalf of the
Trust, and (ii) at any other time, within 30 days of receipt by the Trust of a
written request for a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Property Trustee. The Property Trustee
shall preserve, in as current a form as is
<PAGE>
13
reasonably practicable, all information contained in Lists of Holders given to
it or which it receives in its capacity as Paying Agent (if acting in such
capacity) provided that the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under sections
311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Property Trustee. Within 60 days after May 15
of each year, commencing in 1998, the Property Trustee shall provide to the
Holders of the Preferred Securities such reports as are required by section 313
of the Trust Indenture Act, if any, in the form and in the manner provided by
section 313 of the Trust Indenture Act. The Property Trustee shall also comply
with the requirements of section 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Property Trustee. Each of the Sponsor and
the Regular Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by section 314 of
the Trust Indenture Act (if any) and the compliance certificate required by
section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by section 314 of the Trust Indenture Act.
SECTION 2.05. Evidence of Compliance with Conditions Precedent. Each of the
Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Property Trustee such evidence of compliance with any conditions precedent, if
any, provided for in this Declaration that relate to any of the matters set
forth in section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to section 314(c)(1) may be given in
the form of an Officers' Certificate.
<PAGE>
14
SECTION 2.06. Events of Default; Waiver. (a) The Holders of a Majority in
liquidation amount of Preferred Securities may, by vote, on behalf of the
Holders of all of the Preferred Securities, waive any past Event of Default in
respect of the Preferred Securities and its consequences, provided that, if the
underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to
be waived under the Indenture, the Event of Default under the Declaration
may only be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.
Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured, for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or an Event of Default
with respect to the Preferred Securities or impair any right consequent thereon.
Any waiver by the Holders of the Preferred Securities of an Event of Default
with respect to the Preferred Securities shall also be deemed to constitute a
waiver by the Holders of the Common Securities of any such Event of Default with
respect to the Common Securities for all purposes of this Declaration without
any further act, vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities
<PAGE>
15
and its consequences, provided that, if the underlying Event of Default under
the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as provided below in this Section 2.06(b), the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2(b), the Event of Default under the Declaration may only be waived
by the vote of the Holders of at least the proportion in liquidation amount
of the Preferred Securities that the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until the effects of all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. Subject to the foregoing provisions
of this Section 2.06(b), upon such waiver, any such default shall cease to exist
and any Event of Default with respect to the Common Securities arising therefrom
shall be deemed to have been cured for every purpose of this Declaration, but no
such waiver shall extend to any subsequent or other default or Event of Default
with respect to the Common Securities or impair any right consequent thereon.
<PAGE>
16
(c) A waiver of an Event of Default under the Indenture by the Property
Trustee at the direction of the Holders of the Preferred Securities, constitutes
a waiver of the corresponding Event of Default under this Declaration. The
foregoing provisions of this Section 2.06(c) shall be in lieu of section
316(a)(1)(B) of the Trust Indenture Act and such section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.07. Event of Default; Notice. (a) The Property Trustee shall,
within 90 days after the occurrence of an Event of Default, transmit by mail,
first class postage prepaid, to the Holders of the Securities, notices of all
defaults with respect to the Securities actually known to the Property Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.07(a) being hereby defined to be
an Event of Default as defined in the Indenture, not including any periods of
grace provided for therein and irrespective of the giving of any notice provided
therein); provided that, except for a default in the payment of principal of (or
premium, if any) or interest on any of the Debentures or in the payment of any
sinking fund installment established for the Debentures, the Property Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers of the Property Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.01(1) and 5.01(2) of the Indenture; or
(ii) any default as to which the Property Trustee shall have received
written notice.
<PAGE>
17
ARTICLE III
Organization
SECTION 3.01. Name. The Trust is named "DT Capital Trust," as such name may
be modified from time to time by the Regular Trustees following written notice
to the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.02. Office. The address of the principal office of the Trust is
c/o DT Industries, Inc., Corporate Centre, Suite 2-300, 1949 E. Sunshine,
Springfield, MO 65804, Attention: Vice President-Finance. On ten Business Days
written notice to the Holders of Securities, the Regular Trustees may designate
another principal office.
SECTION 3.03. Purpose. The exclusive purposes and functions of the Trust
are (a) to issue and sell Securities and use the proceeds from such sale to
acquire the Debentures, and (b) except as otherwise limited herein, to engage in
only those other activities necessary, or incidental thereto. The Trust shall
not borrow money, issue debt or reinvest proceeds derived from investments,
pledge any of its assets, or otherwise undertake (or permit to be undertaken)
any activity that would cause the Trust not to be classified for United States
Federal income tax purposes as a grantor trust.
SECTION 3.04. Authority. Subject to the limitations provided in this
Declaration and to the specific duties of the Property Trustee, the Regular
Trustees shall have exclusive and complete authority to carry out the purposes
of the Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust and an action
taken by the Property Trustee in accordance with its powers shall constitute the
act of and serve to bind the Trust. In dealing with the Trustees acting on
behalf of the Trust,
<PAGE>
18
no person shall be required to inquire into the authority of the Trustees to
bind the Trust. Persons dealing with the Trust are entitled to rely conclusively
on the power and authority of the Trustees as set forth in this Declaration.
SECTION 3.05. Title to Property of the Trust. Except as provided in Section
3.08 with respect to the Debentures and the Property Trustee Account or as
otherwise provided in this Declaration, legal title to all assets of the Trust
shall be vested in the Trust. The Holders shall not have legal title to any part
of the assets of the Trust, but shall have an undivided beneficial interest in
the assets of the Trust.
SECTION 3.06. Powers and Duties of the Regular Trustees. The Regular
Trustees shall have the exclusive power, duty and authority to cause the Trust
to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common Securities
in accordance with this Declaration; provided, however, that the Trust may issue
no more than one series of Preferred Securities and no more than one series of
Common Securities, and, provided further, that there shall be no interests in
the Trust other than the Securities, and the issuance of Securities shall be
limited to simultaneous issuances of both Preferred Securities and Common
Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred Securities, at
the direction of the Sponsor, to:
(i) assist in the preparation of an offering memorandum (the
"Offering Memorandum") prepared by the Sponsor, in relation to the offering
and sale of Preferred Securities to qualified institutional buyers in
reliance on Rule 144A under the Securities Act to a limited number of
institutional "accredited investors" (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act) and outside the United States to non-
U.S. persons in offshore transactions in reliance on Regulation S under the
Securities Act and to execute
<PAGE>
19
and file with the Commission, at such time as determined by the Sponsor, a
registration statement filed on Form S-3 prepared by the Sponsor, including
any amendments thereto in relation to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the Preferred Securities in any State or foreign
jurisdiction in which the Sponsor has determined to qualify or register
such Preferred Securities for sale;
(iii) execute and file an application, prepared by the Sponsor, to the
Private Offerings, Resale and Trading through Automated Linkages ("PORTAL")
Market and, at such time as determined by the Sponsor to the New York Stock
Exchange or any other national stock exchange or the Nasdaq National Market
for listing or quotation of the Preferred Securities;
(iv) to execute and deliver letters, documents, or instruments with
The Depository Trust Company relating to the Preferred Securities;
(v) execute and file with the Commission, at such time as determined
by the Sponsor, a registration statement on Form 8-A, including any
amendments thereto, prepared by the Sponsor relating to the registration of
the Preferred Securities under Section 12 of the Exchange Act; and
(vi) execute and enter into the Purchase Agreement, Registration
Rights Agreement and other related agreements providing for the sale of the
Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to the Debentures to be held of
<PAGE>
20
record in the name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written notice of
the occurrence of a Tax Event; provided that the Regular Trustees shall consult
with the Sponsor and the Property Trustee before taking or refraining from
taking any Ministerial Action in relation to a Tax Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.08(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Regular Trustee;
<PAGE>
21
(k) to incur expenses that are necessary or incidental to carry out any of
the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and transfer
agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of any
notice received from the Debenture Issuer of its election to defer payments of
interest on the Debentures by extending the interest payment period under the
Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.06, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
<PAGE>
22
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes,
provided that such action does not adversely affect the interests of Holders;
and
(q) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Regular Trustees, on behalf of the Trust.
The Regular Trustees must exercise the powers set forth in this Section
3.06 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.03, and the Regular Trustees shall not take any action that
is inconsistent with the purposes and functions of the Trust set forth in
Section 3.03.
Subject to this Section 3.06, the Regular Trustees shall have none of the
powers or the authority of the Property Trustee set forth in Section 3.08.
SECTION 3.07. Prohibition of Actions by the Trust and the Trustees on
behalf of the Trust. (a) The Trust shall not, and the Trustees on behalf of the
Trust (including the Property Trustee) shall not, engage in any activity other
than as required or authorized by this Declaration. In particular, the Trust
shall not and the Trustees (including the Property Trustee) shall cause the
Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
<PAGE>
23
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in the Declaration or Annex I hereto, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under Section 5.13 of the
Indenture, (C) exercise any right to rescind or annul any declaration that
the principal of all the Debentures shall be due and payable, or (D)
consent to any amendment, modification or termination of the Indenture or
the Debentures where such consent shall be required unless the Trust shall
have received an opinion of nationally recognized independent tax counsel
to the effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes the
Trust will not be classified as a grantor trust.
SECTION 3.08. Powers and Duties of the Property Trustee. (a) The legal
title to the Debentures shall be owned by and held of record in the name of the
Property Trustee in trust for the benefit of the Holders of the Securities. The
right, title and interest of the Property Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as Property Trustee
in accordance with Section 5.06. Such vesting and cessation of title shall be
effective whether or not conveyancing documents with regard to the Debentures
have been executed and delivered.
<PAGE>
24
(b) The Property Trustee shall not transfer its right, title and interest
in the Debentures except as otherwise contemplated herein or in the Indenture or
to the Regular Trustees or to the Delaware Trustee (if the Property Trustee does
not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of
the Debentures held by the Property Trustee, deposit such funds into the
Property Trustee Account and make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from the Property Trustee
Account in accordance with Section 6.01. Funds in the Property Trustee
Account shall be held uninvested until disbursed in accordance with this
Declaration.
(ii) engage in such ministerial activities as so directed and as
shall be necessary or appropriate to effect the redemption of the Preferred
Securities and the Common Securities to the extent the Debentures are
redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as so directed as shall be necessary or appropriate
to effect the distribution of the Debentures to Holders of Securities upon
the occurrence of certain special events (as may be defined in the terms of
the Securities) arising from a change in law or a change in legal
interpretation or other specified circumstances pursuant to the terms of
the Securities.
(d) The Property Trustee shall take all actions and perform such duties as
may be specifically required of
<PAGE>
25
the Property Trustee pursuant to the terms of the Securities.
(e) The Property Trustee shall take any Legal Action which arises out of
or in connection with an Event of Default or the Property Trustee's duties and
obligations under this Declaration or the Trust Indenture Act.
(f) The Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Property Trustee has been appointed and has accepted
that appointment in accordance with Section 5.06.
(g) The Property Trustee shall have the legal power to exercise all of the
rights, powers and privileges of a holder of Debentures under the Indenture and,
if an Event of Default occurs and is continuing, the Property Trustee shall, for
the benefit of Holders of the Securities, enforce its rights as holder of the
Debentures subject to the rights of the Holders pursuant to the terms of such
Securities.
(h) The Property Trustee will act as Paying Agent and Registrar in New
York to pay Distributions, redemption payments or liquidation payments on behalf
of the Trust with respect to all securities and any such Paying Agent shall
comply with section 317(b) of the Trust Indenture Act. Any Paying Agent may be
removed by the Property Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Property Trustee.
(i) Subject to this Section 3.08, the Property Trustee shall have none of
the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.06.
<PAGE>
26
The Property Trustee must exercise the powers set forth in this Section
3.08 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.03, and the Property Trustee shall not take any action that
is inconsistent with the purposes and functions of the Trust set out in Section
3.03.
SECTION 3.09. Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration and no implied covenants shall be read into this Declaration against
the Property Trustee. In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.06), the Property Trustee shall
exercise such of the rights and powers vested in it by this Declaration, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Declaration and
the Property Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations shall be read
into this Declaration against the Property Trustee; and
<PAGE>
27
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this Declaration; but in
the case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Property
Trustee, the Property Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of
this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation
amount of the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Declaration;
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or adequate
indemnity against such risk or liability is not reasonably assured to it;
<PAGE>
28
(v) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Debentures and the Property
Trustee Account shall be to deal with such property in a similar manner as
the Property Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to the
Property Trustee under this Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or with
respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree in writing with the
Sponsor. Money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section 3.08(c)(i) and
except to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Regular Trustees or the Sponsor with their respective
duties under this Declaration, nor shall the Property Trustee be liable for
the default or misconduct of the Regular Trustees or the Sponsor.
<PAGE>
29
SECTION 3.10. Certain Rights of Property Trustee. (a) Subject to the
provisions of Section 3.09:
(i) the Property Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly
delivered by the Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of its choice or
other experts and the advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts' area
of expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion,
<PAGE>
30
such counsel may be counsel to the Sponsor or any of its Affiliates, and
may include any of its employees. The Property Trustee shall have the right
at any time to seek instructions concerning the administration of this
Declaration from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Declaration at the request
or direction of any Holder, unless such Holder shall have provided to the
Property Trustee adequate security and indemnity, which would satisfy a
reasonable person in the position of the Property Trustee, against the
costs, expenses (including its attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested in
writing by the Property Trustee provided, that, nothing contained in this
Section 3.10(a)(vi) shall be taken to relieve the Property Trustee, upon
the occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, security, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Property Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Property Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder;
<PAGE>
31
(ix) any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders of the Securities, and the signature
of the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action and no third party shall be required
to inquire as to the authority of the Property Trustee to so act or as to
its compliance with any of the terms and provisions of this Declaration,
both of which shall be conclusively evidenced by the Property Trustee's or
its agent's taking such action;
(x) whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder the
Property Trustee (i) may request instructions from the Holders of the
Securities which instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would be entitled to
direct the Property Trustee under the terms of the Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such remedy
or right or taking such other action until such instructions are received,
and (iii) shall be protected in acting in accordance with such
instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Declaration; and
(xii) the Property Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right,
<PAGE>
32
power, duty or obligation conferred or imposed on it, in any jurisdiction in
which it shall be illegal, or in which the Property Trustee shall be unqualified
or incompetent in accordance with applicable law, to perform any such act or
acts, or to exercise any such right, power, duty or obligation. No permissive
power or authority available to the Property Trustee shall be construed to be a
duty.
SECTION 3.11. Delaware Trustee. Notwithstanding any other provision of this
Declaration other than Section 5.02, the Delaware Trustee shall not be entitled
to exercise any powers, nor shall the Delaware Trustee have any of the duties
and responsibilities of the Regular Trustees or the Property Trustee described
in this Declaration. Except as set forth in Section 5.02, the Delaware Trustee
shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of section 3807 of the Business Trust Act.
SECTION 3.12. Execution of Documents. Unless otherwise determined by the
Regular Trustees, and except as otherwise required by the Business Trust Act,
any Regular Trustee is authorized to execute on behalf of the Trust any
documents that the Regular Trustees have the power and authority to execute
pursuant to Section 3.06; provided that, the registration statement referred to
in Section 3.06(b)(i), including any amendments thereto, shall be signed by all
of the Regular Trustees.
SECTION 3.13. Not Responsible for Recitals or Issuance of SecuritiesNot
Responsible for Recitals or Issuance of Securities. The recitals contained in
this Declaration and the Securities shall be taken as the statements of the
Sponsor, and the Trustees do not assume any responsibility for their
correctness. The Trustees make no representations as to the value or condition
of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration or the
Securities.
<PAGE>
33
SECTION 3.14. Duration of Trust. The Trust, unless terminated pursuant to
the provisions of Article VIII hereof, shall exist until May 31, 2022.
SECTION 3.15. Mergers. (a) The Trust may not consolidate, amalgamate, merge
with or into, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to any corporation or other entity or
person, except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of a majority of the Regular Trustees
and without the consent of the Holders of the Securities, the Delaware Trustee
or the Property Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State or the
District of Columbia; provided that:
(i) if the Trust is not the surviving entity, the successor entity
(the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under
the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities (the
"Successor Securities") as long as the Successor Securities rank, with
respect to participation in the profits and distributions or in the
assets of the Successor Entity at least as high as the Preferred
Securities rank with respect to participation in the profits and
dividends or in the assets of the Trust;
(ii) the Debenture Issuer expressly acknowledges such Successor
Entity as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will
<PAGE>
34
be listed upon notification of issuance, on any national securities
exchange or with any other organization on which the Preferred Securities
are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does not
cause the Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the powers, preferences and other special rights of the
Holders of the Preferred Securities (including any Successor Securities) in
any material respect;
(vi) such Successor Entity has a purpose substantially identical to
that of the Trust, and substantially all of the assets and liabilities of
the Successor Entity consist of the assets and liabilities of the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally recognized
independent counsel (reasonably acceptable to the Property Trustee) to the
Trust experienced in such matters to the effect that:
(A) the Successor Entity will be treated as a grantor trust for
United States federal income tax purposes;
(B) following such merger, consolidation, amalgamation or
replacement, neither the Sponsor nor the Successor Entity will be
required to register as an Investment Company; and
(C) such merger, consolidation, amalgamation or replacement will
not adversely affect the limited
<PAGE>
35
liability of the Holders of the Securities (including any Successor
Securities); and
(viii) the Sponsor provides a guarantee to the Holders of the
Successor Securities with respect to the Successor Entity having
substantially the same terms as the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Common Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
ARTICLE IV
Sponsor
SECTION 4.01. Sponsor's Purchase of Common Securities. On the Closing Date,
the Sponsor will purchase an amount of Common Securities issued by the Trust
such that the aggregate liquidation amount of such Common Securities purchased
by the Sponsor shall at such date equal 3% of the total capital of the Trust.
SECTION 4.02. Responsibilities of the Sponsor. In connection with the issue
and sale of the Preferred Securities, the Sponsor shall have the exclusive right
and responsibility to engage in the following activities:
(a) to prepare the Offering Memorandum and to prepare for filing by the
Trust with the Commission the Registration Statement, including any amendments
thereto;
(b) to determine the States and foreign jurisdictions in which to take
appropriate action to qualify
<PAGE>
36
or register for sale all or part of the Preferred Securities and to do any and
all such acts, other than actions which must be taken by the Trust, and advise
the Trust of actions it must take, and prepare for execution and filing any
documents to be executed and filed by the Trust, as the Sponsor deems necessary
or advisable in order to comply with the applicable laws of any such States and
foreign jurisdictions;
(c) to prepare for filing by the Trust an application to PORTAL and to the
New York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing or quotation of the Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a registration
statement on Form 8-A relating to the registration of the Preferred Securities
under Section 12 of the Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of the Purchase Agreement, Registration Rights
Agreement and other related agreements providing for the sale of the Preferred
Securities.
SECTION 4.03. Guarantee of Payment of Trust Obligations. (a) Subject to the
terms and conditions of this Section 4.03, the Sponsor hereby irrevocably and
unconditionally guarantees to each Person to whom the Trust is now or hereafter
becomes indebted or liable (the "Beneficiaries") the full payment, when and as
due, of any and all Obligations to such Beneficiaries.
(b) The agreement of the Sponsor in Section 4.03(a) is intended to be for
the benefit of, and to be enforceable by, all such Beneficiaries, whether or not
such Beneficiaries have received notice hereof.
(c) The agreement of the Sponsor set forth in Section 4.03(a) shall
terminate and be of no further force and effect upon the later of (a) the date
on which full payment has been made of all amounts payable to all Holders
<PAGE>
37
of all the Preferred Securities (whether upon redemption, liquidation, exchange
or otherwise) and (b) the date on which there are no Beneficiaries remaining;
provided, however, that such agreement shall continue to be effective or shall
be reinstated, as the case may be, if at any time any Holder of Preferred
Securities or any Beneficiary must restore payment of any sums paid under the
Preferred Securities, under any Obligation, under the Preferred Securities
Guarantee or under this Agreement for any reason whatsoever. Such agreement is
continuing, irrevocable, unconditional and absolute.
ARTICLE V
Trustees
SECTION 5.01. Number of Trustees. The number of Trustees shall initially be
five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor may, by
written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities:
(i) and except as provided in Sections 5.01(b)(ii) and 5.06(a)(ii)(B)
with respect to the Special Regular Trustee, the number of Trustees may be
increased or decreased by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the
Holders of the Common Securities; and
(ii) the number of Trustees shall be increased automatically by one
(1) if an Appointment Event has occurred and is continuing and the Holders
of a Majority in liquidation amount of the Preferred Securities appoint a
Special Regular Trustee in accordance with Section 5.06(a)(ii),
<PAGE>
38
provided that, if the Property Trustee does not also act as Delaware Trustee,
the number of Trustees shall be at least five (5).
SECTION 5.02. Delaware Trustee. If required by the Business Trust Act, one
Trustee (the "Delaware Trustee") shall be an entity which has its principal
place of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided that, if the Property Trustee has its principal
place of business in the State of Delaware and otherwise meets the requirements
of applicable law, then the Property Trustee shall also be the Delaware Trustee
and Section 3.11 shall have no application.
SECTION 5.03. Property Trustee; Eligibility. (a) There shall at all times
be one Trustee which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 100 million U.S. dollars
($100,000,000), and subject to supervision or examination by federal,
state, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.03(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Property Trustee shall cease to be eligible to so
act under Section 5.03(a), the
<PAGE>
39
Property Trustee shall immediately resign in the manner and with the effect set
forth in Section 5.06(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of section 310(b) of the Trust Indenture
Act.
(d) The Preferred Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.04. Qualifications of Regular Trustees and Delaware Trustee
Generally. Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.05. Initial Trustees. The initial Regular Trustees shall be:
Stephen J. Gore
c/o DT Industries, Inc.
Corporate Centre
Suite 2-300
1949 E. Sunshine
Springfield, MO 65804
Bruce P. Erdel
c/o DT Industries, Inc.
Corporate Centre
Suite 2-300
1949 E. Sunshine
Springfield, MO 65804
<PAGE>
40
Gregory D. Wilson
c/o DT Industries, Inc.
Corporate Centre
Suite 2-300
1949 E. Sunshine
Springfield, MO 65804
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Attention: Corporate Trust Department
The initial Property Trustee shall be:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
SECTION 5.06. Appointment, Removal and Resignation of Trustees. (a) Subject
to Section 5.06(b), Trustees may be appointed or removed without cause at any
time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities:
(A) other than in respect to a Special Regular Trustee, by vote
of the Holders of a Majority in liquidation amount of the Common
Securities voting as a class at a meeting of the Holders of the Common
Securities; and
(B) if an Appointment Event has occurred and is continuing, one
(1) additional Regular Trustee (the "Special Regular Trustee") may be
appointed by vote of the Holders of a Majority in
<PAGE>
41
liquidation amount of the Preferred Securities, voting as a class at a
meeting of the Holders of the Preferred Securities, and such Special
Regular Trustee may only be removed (otherwise than by the operation
of Section 5.06(d)), by vote of the Holders of a Majority in
liquidation amount of the Preferred Securities voting as a class at a
meeting of the Holders of the Preferred Securities.
(b) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 5.06(a) until a Successor Property Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Property Trustee and delivered to the Regular Trustees and the
Sponsor.
(c) The Trustee that acts as Delaware Trustee shall not be removed in
accordance with this Section 5.06(c) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.02 and 5.04 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Regular Trustees and the Sponsor.
(d) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation, provided
that a Special Regular Trustee shall only hold office while an Appointment Event
is continuing and shall cease to hold office immediately after the Appointment
Event pursuant to which the Special Regular Trustee was appointed and all other
Appointment Events cease to be continuing. Any Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
<PAGE>
42
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and has
accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust, the Sponsor and the
resigning Property Trustee; or
(B) until the assets of the Trust have been completely liquidated
and the proceeds thereof distributed to the holders of the Securities;
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee; and
(iii) no such resignation of a Special Regular Trustee shall be
effective until the 60th day following delivery of the instrument of
resignation of the Special Regular Trustee to the Sponsor and the Trust or
such later date specified in such instrument during which period the
Holders of the Preferred Securities shall have the right to appoint a
successor Special Regular Trustee as provided in this Section 5.06.
(e) The Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Property Trustee or Successor Delaware Trustee, as
the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 5.06.
(f) If no Successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this Section 5.06
within 60 days after delivery to the Sponsor and the Trust of an instrument of
resignation or removal, the resigning Property Trustee or
<PAGE>
43
Delaware Trustee, resigning or being removed as applicable, may petition any
court of competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper and prescribe, appoint a Successor
Property Trustee or Successor Delaware Trustee, as the case may be.
(g) No Property Trustee or Delaware Trustee shall be liable for the acts
or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
SECTION 5.07. Vacancies among Trustees. If a Trustee ceases to hold office
for any reason and the number of Trustees is not reduced pursuant to Section
5.01, or if the number of Trustees is increased pursuant to Section 5.01, a
vacancy shall occur. A resolution certifying the existence of such vacancy by a
majority of the Regular Trustees shall be conclusive evidence of the existence
of such vacancy. The vacancy shall be filled with a Trustee appointed in
accordance with Section 5.06.
SECTION 5.08. Effect of Vacancies. The death, resignation, retirement,
removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of a Trustee shall not operate to annul the Trust. Whenever a
vacancy in the number of Regular Trustees shall occur, until such vacancy is
filled by the appointment of a Regular Trustee in accordance with Section 5.06,
the Regular Trustees in office, regardless of their number, shall have all the
powers granted to the Regular Trustees and shall discharge all the duties
imposed upon the Regular Trustees by this Declaration.
SECTION 5.09. Meetings. Meetings of the Regular Trustees shall be held from
time to time upon the call of any Regular Trustee. Regular meetings of the
Regular Trustees may be held at a time and place fixed by resolution of the
Regular Trustees. Notice of any in-person meetings of the Regular Trustees shall
be hand delivered or otherwise delivered in writing (including by facsimile,
with a hard
<PAGE>
44
copy by overnight courier) not less than 48 hours before such meeting. Notice of
any telephonic meetings of the Regular Trustees or any committee thereof shall
be hand delivered or otherwise delivered in writing (including by facsimile,
with a hard copy by overnight courier) not less than 24 hours before a meeting.
Notices shall contain a brief statement of the time, place and anticipated
purposes of the meeting. The presence (whether in person or by telephone) of a
Regular Trustee at a meeting shall constitute a waiver of notice of such meeting
except where a Regular Trustee attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the meeting has
not been lawfully called or convened. Unless provided otherwise in this
Declaration, any action of the Regular Trustees may be taken at a meeting by
vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of the
Regular Trustees.
SECTION 5.10. Delegation of Power. (a) Any Regular Trustee may, by power of
attorney consistent with applicable law, delegate to any other natural person
over the age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.06, including any registration statement or amendment
thereto filed with the Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
SECTION 5.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Property Trustee or the Delaware Trustee, as the
case may be, may be merged or converted or with which either may be
<PAGE>
45
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Property Trustee or
the Delaware Trustee, as the case may be, hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
ARTICLE VI
Distributions
SECTION 6.01. Distributions. Holders shall receive Distributions (as
defined herein) in accordance with the applicable terms of the relevant Holder's
Securities. Distributions shall be made on the Preferred Securities and the
Common Securities in accordance with the preferences set forth in their
respective terms. If and to the extent that the Debenture Issuer makes a payment
of interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)) premium and principal on the
Debentures held by the Property Trustee (the amount of any such payment being a
"Payment Amount"), the Property Trustee shall and is directed, to the extent
funds are available for that purpose, to make a distribution (a "Distribution")
of the Payment Amount to Holders.
ARTICLE VII
Issuance of Securities
SECTION 7.01. General Provisions Regarding SecuritiesGeneral Provisions
Regarding Securities. (a) The Regular Trustees shall on behalf of the Trust
issue one class of convertible preferred securities, representing undivided
beneficial interests in the assets of the Trust (the "Preferred Securities"),
having
<PAGE>
46
such terms (the "Terms") as are set forth in Annex I and one class of
convertible common securities, representing undivided beneficial interests in
the assets of the Trust (the "Common Securities"), having such terms as are set
forth in Annex I. The Trust shall have no securities or other interests in the
assets of the Trust other than the Preferred Securities and the Common
Securities. The Trust shall issue no Securities in bearer form.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable, subject to Section 10.01 with respect to the Common Securities.
(d) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
SECTION 7.02. Execution and Authentication. (a) The Securities shall be
signed on behalf of the Trust by one Regular Trustee. In case any Regular
Trustee of the Trust who shall have signed any of the Securities shall cease to
be such Regular Trustee before the Securities so signed shall be delivered by
the Trust, such Securities nevertheless may be delivered as though the person
who signed such Securities had not ceased to be such Regular Trustee; and any
Securities may be signed on behalf of the Trust by such persons who, at the
actual date of execution of such Security, shall be the Regular Trustees of the
Trust, although at the date of the execution and delivery of the Declaration any
such person was not such a Regular Trustee.
<PAGE>
47
(b) One Regular Trustee shall sign the Preferred Securities for the Trust
by manual or facsimile signature. Unless otherwise determined by the Trust, such
signature shall, in the case of Common Securities, be a manual signature.
A Preferred Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Property Trustee. The signature
shall be conclusive evidence that the Preferred Security has been authenticated
under this Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Property Trustee shall authenticate the Preferred Securities for original issue
as described in paragraph 5 of the Securities. The aggregate number of Preferred
Securities outstanding at any time shall not exceed the number set forth in the
Terms in Annex I hereto except as provided in Section 7.06.
The Property Trustee may appoint an authenticating agent acceptable to the
Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as the
Property Trustee to deal with the Company or an Affiliate.
SECTION 7.03. Form and Dating. The Preferred Securities and the Property
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A-1 and A-2 and the Common Securities shall be substantially in the form
of Exhibit A-3, each of which is hereby incorporated in and expressly made a
part of this Declaration. Certificates may be printed, lithographed or engraved
or may be produced in any other manner as is reasonably acceptable to the
Regular Trustees, as evidenced by their execution thereof. The Securities may
have letters, numbers, notations or other marks of identification or designation
and such legends or endorsements required by law, stock exchange rule,
agreements to which the Trust is
<PAGE>
48
subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Trust). The Trust at the direction of
the Sponsor shall furnish any such legend not contained in Exhibit A-1 or
Exhibit A-2 to the Property Trustee in writing. Each Preferred Security shall be
dated the date of its authentication. The terms and provisions of the Securities
set forth in Annex I and the forms of Securities set forth in Exhibits A-1, A-2
and A-3 are part of the terms of this Declaration and to the extent applicable,
the Property Trustee and the Sponsor, by their execution and delivery of this
Declaration, expressly agree to such terms and provisions and to be bound
thereby.
(a) Global Securities. The Preferred Securities are being offered and sold
by the Trust pursuant to a Purchase Agreement relating to the Preferred
Securities, dated June 12, 1997, among the Trust, the Sponsor and the Purchasers
named therein (the "Purchase Agreement").
Securities offered and sold to Qualified Institutional Buyers ("QIBs") in
reliance on Rule 144A under the Securities Act ("Rule 144A") as provided in the
Purchase Agreement, shall be issued in the form of one or more, permanent global
Securities in definitive, fully registered form without distribution coupons
with the appropriate global legends and Restricted Securities Legend set forth
in Exhibit A-1 hereto (each, a "Rule 144A Global Preferred Security"), which
shall be deposited on behalf of the purchasers of the Preferred Securities
represented thereby with the Property Trustee, at its New York office, as
custodian for the Depositary, and registered in the name of the Depositary or a
nominee of the Depositary, duly executed by the Trust and authenticated by the
Property Trustee as hereinafter provided. The number of Preferred Securities
represented by the Rule 144A Global Preferred Security may from time to time be
increased or decreased by adjustments made on the records of the Property
Trustee and the Depositary or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 7.03(b) shall apply only to the
Rule 144A Global Preferred Securities and such other Preferred Securities in
global
<PAGE>
49
form as may be authorized by the Trust to be deposited with or on behalf of the
Depositary.
The Trust shall execute and the Property Trustee shall, in accordance with
this Section 7.03, authenticate and deliver initially one or more Rule 144A
Global Preferred Securities that (a) shall be registered in the name of Cede &
Co. or other nominee of such Depositary and (b) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's written instructions
or held by the Trustee as custodian for the Depositary.
Members of, or participants in, the Depositary ("Participants") shall have
no rights under this Declaration with respect to any Rule 144A Global Preferred
Security held on their behalf by the Depositary or by the Property Trustee as
the custodian of the Depositary or under such Rule 144A Global Preferred
Security, and the Depositary may be treated by the Trust, the Property Trustee
and any agent of the Trust or the Property Trustee as the absolute owner of such
Rule 144A Global Preferred Security for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Trust, the Property Trustee or
any agent of the Trust or the Property Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and its Participants, the operation of
customary practices of such Depositary governing the exercise of the rights of a
holder of a beneficial interest in any Rule 144A Global Preferred Security.
(c) Certificated Securities. Except as provided in Section 7.09, owners of
beneficial interests in the Rule 144A Global Preferred Security will not be
entitled to receive physical delivery of certificated Preferred Securities.
Preferred Securities offered and sold in reliance on Regulation S under the
Securities Act ("Regulation S"), as provided in the Purchase Agreement, shall be
issued initially in the form of individual certificates in definitive, fully
registered form without distribution coupons and shall bear the Restricted
Securities Legend set forth in Exhibit A-1 hereto (the
<PAGE>
50
"Regulation S Definitive Preferred Securities"). Purchasers of Securities who
are institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act) and did not purchase Preferred Securities in
reliance on Regulation S under the Securities Act will receive Preferred
Securities in the form of individual certificates in definitive, fully
registered form without distribution coupons and with the Restricted Securities
Legend set forth in Exhibit A-1 hereto ("Restricted Definitive Preferred
Securities"); provided, however, that upon transfer of such Restricted
Definitive Preferred Securities to a QIB, such Restricted Definitive Preferred
Securities will, unless the Rule 144A Global Preferred Security has previously
been exchanged, be exchanged for an interest in a Rule 144A Global Security
pursuant to the provisions at Section 9.02. Restricted Definitive Preferred
Securities will bear the Restricted Securities Legend set forth on Exhibit A-1
unless removed in accordance with this Section 7.03 or Section 9.02.
SECTION 7.04. Registrar, Paying Agent and Conversion Agent. The Trust shall
maintain in the Borough of Manhattan, City of New York, State of New York (i) an
office or agency where Preferred Securities may be presented for registration of
transfer or for exchange ("Registrar"), (ii) an office or agency where Preferred
Securities may be presented for payment ("Paying Agent") and an office or agency
where Securities may be presented for conversion ("Conversion Agent"). The
Registrar shall keep a register of the Preferred Securities and of their
transfer and exchange. The Trust may appoint the Registrar, the Paying Agent and
the Conversion Agent and may appoint one or more co-registrars, one or more
additional paying agents and one or more additional conversion agents in such
other locations as it shall determine. The term "Paying Agent" includes any
additional paying agent and the term "Conversion Agent" includes any additional
conversion agent. The Trust may change any Paying Agent, Registrar, co-registrar
or Conversion Agent without prior notice to any Holder. The Trust shall notify
the Property Trustee of the name and address of any Agent not a party to this
Declaration. If the Trust fails to appoint or maintain another entity as
<PAGE>
51
Registrar, Paying Agent or Conversion Agent, the Property Trustee shall act as
such. The Trust or any of its Affiliates may act as Paying Agent, Registrar, or
Conversion Agent. The Trust shall act as Paying Agent, Registrar, co-registrar,
and Conversion Agent for the Common Securities.
The Trust initially appoints the Property Trustee as Registrar, Paying
Agent, and Conversion Agent for the Preferred Securities.
SECTION 7.05. Paying Agent to Hold Money in Trust. The Trust shall require
each Paying Agent other than the Property Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Holders or the Property
Trustee all money held by the Paying Agent for the payment of principal or
distribution on the Securities, and will notify the Property Trustee if there
are insufficient funds. While any such insufficiency continues, the Property
Trustee may require a Paying Agent to pay all money held by it to the Property
Trustee. The Trust at any time may require a Paying Agent to pay all money held
by it to the Property Trustee and to account for any money disbursed by it. Upon
payment over to the Property Trustee, the Paying Agent (if other than the Trust
or an Affiliate of the Trust) shall have no further liability for the money. If
the Trust or the Sponsor or an Affiliate of the Trust or the Sponsor acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent.
SECTION 7.06. Replacement Securities. If the holder of a Security claims
that the Security has been lost, destroyed or wrongfully taken or if such
Security is mutilated and is surrendered to the Trust or in the case of the
Preferred Securities to the Property Trustee, the Trust shall issue and the
Property Trustee shall authenticate a replacement Security if the Property
Trustee's and the Trust's requirements, as the case may be, are met. An
indemnity bond must be provided which is sufficient in the judgment of the
Property Trustee and the Trust to protect the Trustees, the Property Trustee,
the Sponsor or any authenticating agent from any loss which any of them may
<PAGE>
52
suffer if a Security is replaced. The Trustee may charge for its expenses in
replacing a Security.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be purchased by the
Sponsor pursuant to Article III hereof, the Sponsor in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.
Every replacement Security is an additional obligation of the Trust.
SECTION 7.07. Outstanding Preferred Securities. The Preferred Securities
outstanding at any time are all the Preferred Securities authenticated by the
Property Trustee except for those canceled by it, those delivered to it for
cancellation, and those described in this Section as not outstanding.
If a Preferred Security is replaced, paid or purchased pursuant to Section
7.06 hereof, it ceases to be outstanding unless the Property Trustee receives
proof satisfactory to it that the replaced, paid or purchased Preferred Security
is held by a bona fide purchaser.
If Preferred Securities are considered paid in accordance with the terms of
this Declaration, they cease to be outstanding and interest on them ceases to
accrue.
A Preferred Security does not cease to be outstanding because one of the
Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.
SECTION 7.08. Preferred Securities in Treasury. In determining whether the
Holders of the required amount of Securities have concurred in any direction,
waiver or consent, Preferred Securities owned by the Trust, the Sponsor or an
Affiliate of the Sponsor, as the case may be, shall be disregarded and deemed
not to be outstanding, except that for the purposes of determining whether the
Property Trustee shall be fully protected in relying on any
<PAGE>
53
such direction, waiver or consent, only Securities which a Responsible Officer
of the Property Trustee actually knows are so owned shall be so disregarded.
SECTION 7.09. Temporary Securities. (a) Until definitive Securities are
ready for delivery, the Trust may prepare and, in the case of the Preferred
Securities, the Property Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Trust considers appropriate for temporary
Securities. Without unreasonable delay, the Trust shall prepare and, in the case
of the Preferred Securities, the Property Trustee shall authenticate definitive
Securities in exchange for temporary Securities.
(b) A Global Preferred Security deposited with the Depositary or with the
Property Trustee as custodian for the Depositary pursuant to Section 7.03 shall
be transferred to the beneficial owners thereof in the form of certificated
Preferred Securities only if such transfer complies with Section 9.02 and (i)
the Depositary notifies the Trust that it is unwilling or unable to continue as
Depositary for such Global Preferred Security or if at any time such Depositary
ceases to be a "clearing agency" registered under the Exchange Act and a
successor depositary is not appointed by the Sponsor within 90 days of such
notice, or (ii) an Event of Default has occurred and is continuing.
(c) Any Global Preferred Security that is transferable to the beneficial
owners thereof in the form of certificated Preferred Securities pursuant to this
Section 7.09 shall be surrendered by the Depositary to the Property Trustee
located in the Borough of Manhattan, City of New York, to be so transferred, in
whole or from time to time in part, without charge, and the Property Trustee
shall authenticate and deliver, upon such transfer of each portion of such
Global Preferred Security, an equal aggregate liquidation amount of Securities
of authorized denominations in the form of certificated Securities. Any portion
of a Global Preferred Security transferred pursuant to this Section shall be
registered in such names as the Depositary
<PAGE>
54
shall direct. Any Preferred Security in the form of certificated Preferred
Securities delivered in exchange for an interest in the Restricted Global
Preferred Security shall, except as otherwise provided by Sections 7.03 and
9.01, bear the Restricted Securities Legend set forth in Exhibit A-1 hereto.
(d) Subject to the provisions of Section 7.09(c), the registered holder of
a Global Preferred Security may grant proxies and otherwise authorize any
person, including Participants and persons that may hold interests through
Participants, to take any action which a holder is entitled to take under this
Declaration or the Securities.
(e) In the event of the occurrence of either of the events specified in
Section 7.09(b), the Trust will promptly make available to the Property Trustee
a reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.
SECTION 7.10. Cancellation. The Trust at any time may deliver Preferred
Securities to the Property Trustee for cancellation. The Registrar, Paying Agent
and Conversion Agent shall forward to the Property Trustee any Preferred
Securities surrendered to them for registration of transfer, redemption,
conversion, exchange or payment. The Property Trustee shall promptly cancel all
Preferred Securities, surrendered for registration of transfer, redemption,
conversion, exchange, payment, replacement or cancellation and shall dispose of
cancelled Preferred Securities as the Trust directs, provided, however, that the
Property Trustee shall not be directed to destroy such cancelled Preferred
Securities. The Trust may not issue new Preferred Securities to replace
Preferred Securities that it has paid or that have been delivered to the
Property Trustee for cancellation or that any holder has converted.
<PAGE>
55
ARTICLE VIII
Dissolution and Termination of Trust
SECTION 8.01. Dissolution and Termination of TrustTermination of Trust.
(a) The Trust shall dissolve upon the earliest to occur of the following:
(i) the bankruptcy of the Holder of the Common Securities or the
Sponsor;
(ii) the filing of a certificate of dissolution or its equivalent
with respect to the Holder of the Common Securities or the Sponsor; or the
revocation of the charter of the Holder of the Common Securities or the
Sponsor and the expiration of 90 days after the date of revocation without
a reinstatement thereof;
(iii) the entry of a decree of judicial dissolution of the Holder of
the Common Securities, the Sponsor or the Trust;
(iv) all of the Securities shall have been called for redemption and
the amounts necessary for redemption thereof shall have been paid to the
Holders in accordance with the terms of the Securities;
(v) the occurrence and continuation of a Tax Event pursuant to which
the Trust shall be dissolved in accordance with the terms of the Securities
and the Debentures endorsed thereon shall, subject to the terms of the
Securities, have been distributed to the Holders of Securities in exchange
for the Securities; or
(vi) the expiration of the term of the Trust on May 31, 2022.
(b) As soon as is practicable after the occurrence of an event referred to
in Section 8.01(a), and upon the completion of the winding up of the Trust, one
of the
<PAGE>
56
Trustees shall terminate the Trust by filing a certificate of cancellation with
the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.09 and Article X shall survive the
termination of the Trust.
ARTICLE IX
Transfer and Exchange
SECTION 9.01. General. (a) Where Preferred Securities are presented to the
Registrar or a co-registrar with a request to register a transfer or to exchange
them for an equal number of Preferred Securities represented by different
certificates, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfers and exchanges, the Trust shall issue and the Property Trustee shall
authenticate Preferred Securities at the Registrar's request.
(b) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. Any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void.
Subject to this Article IX, the Sponsor and any Related Party may only
transfer Common Securities to the Sponsor or a Related Party of the Sponsor;
provided that, any such transfer is subject to the condition precedent that the
transferor obtain the written opinion of nationally recognized independent
counsel experienced in such matters that such transfer would not cause more than
an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
<PAGE>
57
(ii) the Trust would be an Investment Company or the transferee would
become an Investment Company.
(c) The Regular Trustees shall provide for the registration of Securities
and of transfers of Securities, which will be effected without charge but only
upon payment (with such indemnity as the Regular Trustees may require) in
respect of any tax or other governmental charges that may be imposed in relation
to it. Upon surrender for registration of transfer of any Securities, the
Regular Trustees shall cause one or more new Securities to be issued in the name
of the designated transferee or transferees. Every Security surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Security
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Security shall be entitled to the rights and subject
to the obligations of a Holder hereunder upon the receipt by such transferee of
a Security. By acceptance of a Security, each transferee shall be deemed to have
agreed to be bound by this Declaration.
(d) The Trust shall not be required (i) to issue, register the transfer
of, or exchange, Preferred Securities for a period beginning 15 Business Days
before the mailing of a notice of an offer to repurchase or redeem Preferred
Securities, or (ii) to register the transfer or exchange of any Preferred
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Preferred Security being redeemed in part.
SECTION 9.02. Transfer Procedures and Restrictions. (a) General. Except in
connection with a Shelf Registration Statement contemplated by and in accordance
with the terms of the Registration Rights Agreement, if Preferred Securities are
issued upon the transfer, exchange or replacement of Preferred Securities
bearing the Restricted Securities Legend set forth in Exhibit A-1 hereto, or if
a request is made to remove such
<PAGE>
58
Restricted Securities Legend on Preferred Securities, the Preferred Securities
so issued shall bear the Restricted Securities Legend, or the Restricted
Securities Legend shall not be removed, as the case may be, unless there is
delivered to the Trust and the Property Trustee such satisfactory evidence,
which may include an opinion of counsel licensed to practice law in the State of
New York, as may be reasonably required by the Company, that neither the legend
nor the restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of Rule 144A, Rule 144 or
Regulation S under the Securities Act or, with respect to Restricted Securities,
that such Securities are not "restricted" within the meaning of Rule 144 under
the Securities Act. Upon provision of such satisfactory evidence, the Property
Trustee, at the written direction of the Trust, shall authenticate and deliver
Preferred Securities that do not bear the legend.
(b) Transfers After Effectiveness of Shelf Registration Statement. After
the effectiveness of a Shelf Registration Statement for any Preferred
Securities, all requirements pertaining to legends on such Preferred Security
will cease to apply, and beneficial interests in a Preferred Security in global
form without legends will be available to transferees of such Preferred
Securities upon exchange of the transferring holder's Restricted Definitive
Preferred Security or directions to transfer such Holder's beneficial interest
in the Rule 144A Global Preferred Security, as the case may be. After the
effectiveness of the Shelf Registration Statement, the Trust shall issue and the
Property Trustee shall authenticate a Preferred Security in global form without
the Restricted Securities Legend (the "Exchanged Global Preferred Security") to
deposit with the Depositary to evidence transfers of (i) beneficial interests
from the Rule 144A Global Preferred Security, (ii) Restricted Definitive
Preferred Securities and (iii) Unrestricted Definitive Preferred Securities.
(c) Regulation S Definitive Preferred Security to Unrestricted Definitive
Preferred Security; Termination of Restricted Period. Following the termination
of the
<PAGE>
59
"restricted period" with respect to the issuance of the Preferred Securities,
Regulation S Definitive Preferred Securities may be exchanged for an interest in
a Preferred Security in definitive, fully registered form without distribution
coupons, but without the Restricted Securities Legend (an "Unrestricted
Definitive Preferred Security"), that is free from any restriction on transfer
(other than such as are solely attributable to any holder's status).
Unrestricted Definitive Preferred Securities will bear a CUSIP number different
from that of the Exchanged Global Preferred Securities and transfers or
exchanges from an Unrestricted Definitive Preferred Security or Regulation S
Definitive Preferred Security to an Exchanged Preferred Security must be
effected pursuant to Section 9.02(b).
(d) Transfer and Exchange of Definitive Preferred Securities. When
Definitive Preferred Securities are presented to the Registrar or co-Registrar
(x) to register the transfer of such Definitive Preferred Securities;
or
(y) to exchange such Definitive Preferred Securities for an equal
number of Definitive Preferred Securities of another number,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Preferred Securities surrendered for
transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Trust and the Registrar or
co-registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(ii) in the case of Definitive Preferred Securities that are
Restricted Definitive Preferred Securities, are being transferred or
exchanged pursuant to an effective registration statement under the
Securities
<PAGE>
60
Act or pursuant to clause (A) or (B) below, and are accompanied by the
following additional information and documents, as applicable:
(A) if such Restricted Preferred Securities are being delivered
to the Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that
effect (in the form set forth on the reverse of the Preferred
Security); or
(B) if such Restricted Preferred Securities are being transferred
pursuant to an exemption from registration in accordance with Rule 144
or Regulation S under the Securities Act: (i) a certification to that
effect (in the form set forth on the reverse of the Preferred
Security) and (ii) if the Trust or Registrar so requests, evidence
reasonably satisfactory to them as to the compliance with the
restrictions set forth in the Restricted Securities Legend.
Definitive Preferred Securities that are transferred to QIBs in accordance
with Rule 144A under the Securities Act must take delivery of their interests in
the Preferred Securities in the form of a beneficial interest in the Rule 144A
Global Preferred Security in accordance with Section 9.02(e).
(e) Restrictions on Transfer of a Definitive Preferred Security for a
Beneficial Interest in a Global Preferred Security. A Definitive Preferred
Security may not be exchanged for a beneficial interest in a Global Preferred
Security except upon satisfaction of the requirements set forth below. Upon
receipt by the Property Trustee of a Definitive Preferred Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Property Trustee, together with:
(i) if such Definitive Preferred Security is a Restricted Preferred
Security, certification, in the form set forth on the reverse of the
Preferred
<PAGE>
61
Security, that such Definitive Preferred Security is being transferred to a
QIB in accordance with Rule 144A under the Securities Act; and
(ii) whether or not such Definitive Preferred Security is a
Restricted Preferred Security, written instructions directing the Property
Trustee to make, or to direct the Depositary to make, an adjustment on its
books and records with respect to such Global Preferred Security to reflect
an increase in the number of the Preferred Securities represented by the
Global Preferred Security,
then the Property Trustee shall cancel such Definitive Preferred Security and
cause, or direct the Depositary to cause, the aggregate number of Preferred
Securities represented by the Global Preferred Security to be increased
accordingly. If no Global Preferred Securities are then outstanding, the Trust
shall issue and the Property Trustee shall authenticate, upon written order of
any Regular Trustee, an appropriate number of Preferred Securities in global
form.
(f) Transfer and Exchange of Global Preferred Securities. The transfer and
exchange of Global Preferred Securities or beneficial interests therein shall be
effected through the Depositary, in accordance with this Declaration (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depositary therefor.
(g) Transfer of a Beneficial Interest in a Global Preferred Security for a
Definitive Preferred Security.
(i) Any person having a beneficial interest in a Global Preferred
Security that is being transferred or exchanged pursuant to an effective
registration statement under the Securities Act or pursuant to clause (A)
or (B) below may upon request, and if accompanied by the information
specified below, exchange such beneficial interest for a Definitive
Preferred Security representing the same number of
<PAGE>
62
Preferred Securities. Upon receipt by the Property Trustee from the
Depositary or its nominee on behalf of any Person having a beneficial
interest in a Global Preferred Security of written instructions or such
other form of instructions as is customary for the Depositary or the person
designated by the Depositary as having such a beneficial interest in a
Restricted Preferred Security and the following additional information and
documents (all of which may submitted by facsimile):
(A) if such beneficial interest is being transferred to the
person designated by the Depositary as being the owner of a beneficial
interest in a Global Preferred Security, a certification from such
Person to that effect (in the form set forth on the reverse of the
Preferred Security); or
(B) if such beneficial interest is being transferred pursuant to
an exemption from registration in accordance with Rule 144 or
Regulation S under the Securities Act: (i) a certification to that
effect from the transferee or transferor (in the form set forth on the
reverse of the Preferred Security) and (ii) if the Property Trustee or
Registrar so requests, evidence reasonably satisfactory to them as to
the compliance with the restrictions set forth in the legend set forth
in Section 9.02(j),
then the Property Trustee or the Securities Custodian, at the direction of
the Property Trustee, will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Securities Custodian, the aggregate principal amount of the Global
Preferred Security to be reduced on its books and records and, following
such reduction, the Trust will execute and the Property Trustee will
authenticate and make available for delivery to the transferee a Definitive
Preferred Security.
<PAGE>
63
(ii) Definitive Preferred Securities issued in exchange for a
beneficial interest in a Global Preferred Security pursuant to this Section
9.02(g) shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its
Participants or indirect participants or otherwise, shall instruct the
Property Trustee. The Property Trustee shall make available for delivery
such Preferred Securities to the persons in whose names such Preferred
Securities are so registered in accordance with the instructions of the
Depositary.
Beneficial interests in the Rule 144A Global Security may not be exchanged
for a Definitive Preferred Security except a Regulation S Definitive Preferred
Security and except as provided in Section 9.02(i).
(h) Restrictions on Transfer and Exchange of Global Preferred Securities.
Notwithstanding any other provisions of this Declaration (other than the
provisions set forth in subsection (i) of this Section 9.02), a Global Preferred
Security may not be transferred as a whole except by the Depositary to a nominee
of the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary.
Definitive Preferred Securities that are transferred to QIBs in accordance
with Rule 144A under the Securities Act must take delivery of their interests in
the Preferred Securities in the form of a beneficial interest in the Rule 144A
Global Preferred Security in accordance with Section 9.02(e).
(i) Authentication of Definitive Preferred Securities. If at any time:
(i) the Depositary notifies the Trust that the Depositary is
unwilling or unable to continue as Depositary for the Global Preferred
Securities and a successor Depositary for the Global Preferred Securities
is not appointed by the Trust at the
<PAGE>
64
direction of the Sponsor within 90 days after delivery of such notice; or
(ii) the Trust, in its sole discretion, notifies the Property Trustee
in writing that it elects to cause the issuance of Definitive Preferred
Securities under this Declaration,
then the Trust will execute, and the Property Trustee, upon receipt of a written
order of the Trust signed by one Regular Trustee requesting the authentication
and delivery of Definitive Preferred Securities to the Persons designated by the
Trust, will authenticate and make available for delivery Definitive Preferred
Securities, in an aggregate principal amount equal to the principal amount of
Global Preferred Securities, in exchange for such Global Preferred Securities.
(j) Legend.
(i) Except as permitted by the following paragraph (ii), each
Preferred Security certificate evidencing the Global Preferred Securities
and the Definitive Preferred Securities (and all Preferred Securities
issued in exchange therefor or substitution thereof) shall bear a legend
(the "Restricted Securities Legend") in substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR), ANY CONVERTIBLE JUNIOR
SUBORDINATED DEBENTURE ISSUED IN EXCHANGE FOR THIS SECURITY AND ANY
COMMON STOCK ISSUED ON CONVERSION THEREOF HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER
OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE
<PAGE>
65
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER
THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1) INSIDE THE UNITED STATES TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR
(4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, AND IN EACH OF CASES (1) THROUGH (4) IN ACCORDANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
(ii) Upon any sale or transfer of a Restricted Preferred Security
(including any Restricted Preferred Security represented by a Global
Preferred Security) pursuant to Rule 144 under the Securities Act or an
effective registration statement under the Securities Act:
(A) in the case of any Restricted Preferred Security that is a
Definitive Preferred Security, the Registrar shall permit the Holder
thereof to exchange such Restricted Preferred Security for a
Definitive Preferred Security that does not bear the Restricted
Securities Legend and rescind any restriction on the transfer of such
Restricted Preferred Security; and
<PAGE>
66
(B) in the case of any Restricted Preferred Security that is
represented by a Global Preferred Security, the Registrar shall permit
the Holder thereof to exchange such Restricted Preferred Security (in
connection with the sale of a Preferred Security pursuant to the
Registration Rights Agreement) for another Global Preferred Security
that does not bear the Restricted Securities Legend.
(k) Cancellation or Adjustment of Global Preferred Security. At such time
as all beneficial interests in a Global Preferred Security have either been
exchanged for Definitive Preferred Securities to the extent permitted by the
Declaration or redeemed, repurchased or canceled in accordance with the terms of
this Declaration, such Global Preferred Security shall be returned to the
Depositary for cancellation or retained and canceled by the Property Trustee. At
any time prior to such cancellation, if any beneficial interest in a Global
Preferred Security is exchanged for Definitive Preferred Securities, Preferred
Securities represented by such Global Preferred Security shall be reduced and an
adjustment shall be made on the books and records of the Property Trustee (if it
is then the Securities Custodian for such Global Preferred Security) with
respect to such Global Preferred Security, by the Property Trustee or the
Securities Custodian, to reflect such reduction.
(l) Obligations with Respect to Transfers and Exchanges of Preferred
Securities.
(i) To permit registrations of transfers and exchanges, the Trust
shall execute and the Property Trustee shall authenticate Definitive
Preferred Securities and Global Preferred Securities at the Registrar's or
co-Registrar's request.
(ii) Registrations of transfers or exchanges will be effected without
charge, but only upon payment (with such indemnity as the Trust or the
Sponsor may require)
<PAGE>
67
in respect of any tax or other governmental charge that may be imposed in
relation to it.
(iii) The Registrar or co-registrar shall not be required to register
the transfer of or exchange of (a) any Definitive Preferred Security
selected for redemption in whole or in part pursuant to Article III, except
the unredeemed portion of any Definitive Preferred Security being redeemed
in part, or (b) any Preferred Security for a period beginning 15 Business
Days before the mailing of a notice of an offer to repurchase or redeem
Preferred Securities or 15 Business Days before a quarterly distribution
date.
(iv) Prior to the due presentation for registrations of transfer of
any Preferred Security, the Trust, the Property Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the person in whose
name a Preferred Security is registered as the absolute owner of such
Preferred Security for the purpose of receiving Distributions on such
Preferred Security and for all other purposes whatsoever, and none of the
Trust, the Property Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(v) All Preferred Securities issued upon any transfer or exchange
pursuant to the terms of this Declaration shall evidence the same security
and shall be entitled to the same benefits under this Declaration as the
Preferred Securities surrendered upon such transfer or exchange.
(m) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no responsibility or obligation
to any beneficial owner of a Global Preferred Security, a Participant in
the Depositary or other Person with respect to the accuracy of the records
of the Depositary or its nominee or of any Participant thereof, with
respect to any ownership interest in the Preferred Securities or with
respect to
<PAGE>
68
the delivery to any Participant, beneficial owner or other Person (other
than the Depositary) of any notice (including any notice of redemption) or
the payment of any amount, under or with respect to such Preferred
Securities. All notices and communications to be given to the Holders and
all payments to be made to Holders under the Preferred Securities shall be
given or made only to or upon the order of the registered Holders (which
shall be the Depositary or its nominee in the case of a Global Preferred
Security). The rights of beneficial owners in any Global Preferred Security
shall be exercised only through the Depositary subject to the applicable
rules and procedures of the Depositary. The Property Trustee may
conclusively rely and shall be fully protected in relying upon information
furnished by the Depositary or agent thereof with respect to its
Participants and any beneficial owners.
(ii) The Property Trustee and Registrar shall have no obligation or
duty to monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Declaration or under applicable
law with respect to any transfer of any interest in any Preferred Security
(including any transfers between or among Depositary Participants or
beneficial owners in any Global Preferred Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the
terms of this Declaration, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
SECTION 9.03. Deemed Security Holders. The Trustees may treat the Person in
whose name any Certificate shall be registered on the books and records of the
Trust as the sole holder of such Certificate and of the Securities represented
by such Certificate for purposes of receiving Distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such Certificate or in the
<PAGE>
69
Securities represented by such Certificate on the part of any Person, whether or
not the Trust, the Property Trustee, the Registrar or a co-registrar shall have
actual or other notice thereof.
SECTION 9.04. Book Entry Interests. Global Preferred Securities shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of the Depositary, and no Preferred Security Beneficial
Owner will receive a definitive Preferred Security Certificate representing such
Preferred Security Beneficial Owner's interests in such Global Preferred
Securities, except as provided herein. Unless and until definitive, fully
registered Preferred Securities Certificates have been issued to the Preferred
Security Beneficial Owners pursuant to Section 7.09:
(a) the provisions of this Section 9.04 shall be in full force and effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Depositary for all purposes of this Declaration (including the payment of
Distributions on the relevant Global Preferred Securities and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Preferred Securities and shall have
no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.04 conflict with
any other provisions of this Declaration, the provisions of this Section 9.04
shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Depositary and shall be limited to those established
by law and agreements between such Preferred Security Beneficial Owners and the
Depositary and/or the Participants and the Depositary shall receive and transmit
payments of Distributions on the Global Certificates to such
<PAGE>
70
Participants. The Depositary will make book entry transfers among the
Participants.
SECTION 9.05. Notices to Clearing Agency. Whenever a notice or other
communication to the Preferred Security Holders is required under this
Declaration, the Regular Trustees shall, in the case of any Global Preferred
Security, give all such notices and communications specified herein to be given
to the Preferred Security Holders to the Depositary, and shall have no notice
obligations to the Preferred Security Beneficial Owners.
SECTION 9.06. Appointment of Successor Clearing Agency. If the Depositary
elects to discontinue its services as securities depositary with respect to the
Preferred Securities, the Regular Trustees may, in their sole discretion,
appoint a successor Clearing Agency with respect to such Preferred Securities.
ARTICLE X
Limitation of Liability of
Holders of Securities, Trustees or Others
SECTION 10.01. Liability. (a) Except as expressly set forth in this
Declaration, the Securities Guarantees and the terms of the Securities the
Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust
<PAGE>
71
(other than with respect to the Securities) to the extent not satisfied out of
the Trust's assets.
(c) Pursuant to section 3803(a) of the Business Trust Act, the Holders of
the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.02. Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Trust or any Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.03. Fiduciary Duty. (a) To the extent that, at law or in equity,
an Indemnified Person has duties (including fiduciary duties) and liabilities
relating
<PAGE>
72
thereto to the Trust or to any other Covered Person, an Indemnified Person
acting under this Declaration shall not be liable to the Trust or to any other
Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity (other than the duties imposed on the Property Trustee under
the Trust Indenture Act), are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and any Covered Person; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Trust or
any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision
<PAGE>
73
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.04. Indemnification. (a) To the fullest extent permitted by
applicable law, the Sponsor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage, liability, tax, penalty, expense or
claim of any kind or nature whatsoever incurred by such Indemnified Person by
reason of the creation, operation or termination of the Trust or any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by this
Declaration, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of gross negligence (or, in the case of the Property Trustee,
negligence) or willful misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses (including
legal fees and expenses) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be advanced
by the Sponsor prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the Sponsor of an undertaking by or on behalf
of the Indemnified Person to repay such amount if it shall be determined that
the Indemnified Person is not entitled to be indemnified as authorized in
Section 10.4(a). The
<PAGE>
74
indemnification shall survive the termination of this Declaration.
SECTION 10.05. Outside Businesses. Any Covered Person, the Sponsor, the
Delaware Trustee and the Property Trustee may engage in or possess an interest
in other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Securities shall have no rights by virtue of this Declaration in
and to such independent ventures or the income or profits derived therefrom and
the pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor,
the Delaware Trustee, or the Property Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Covered Person, the Delaware Trustee and the Property
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
Accounting
SECTION 11.01. Fiscal Year. The fiscal year ("Fiscal Year") of the Trust
shall be a 52-53 week period that ends on the last Sunday in June, or such other
year as is required by the Code.
<PAGE>
75
SECTION 11.02. Certain Accounting Matters. (a) At all times during the
existence of the Trust, the Regular Trustees shall keep, or cause to be kept,
full books of account, records and supporting documents, which shall reflect in
reasonable detail, each transaction of the Trust. The books of account shall be
maintained on the accrual method of accounting, in accordance with generally
accepted accounting principles, consistently applied. The Trust shall use the
accrual method of accounting for United States federal income tax purposes. The
books of account and the records of the Trust shall be examined by and reported
upon as of the end of each Fiscal Year by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to each
of the Holders of Securities, within 90 days after the end of each Fiscal Year
of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations.
(d) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority, an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.03. Banking. The trust shall maintain one or more bank
accounts in the name and for the sole benefit of the Trust; provided,
however, that all payments of funds in respect of the Debentures held by the
Property Trustee shall be made directly to the Property Trustee
<PAGE>
76
Account and no other funds of the Trust shall be deposited in the Property
Trustee Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; provided, however, that the Property Trustee shall
designate the signatories for the Property Trustee Account.
SECTION 11.04. Withholding. The Trust and the Regular Trustees shall comply
with all withholding requirements under United States federal, state and local
law. The Trust shall request, and the Holders shall provide to the Trust, such
forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms as
shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Regular Trustees
shall file required forms with applicable jurisdictions and, unless an exemption
from withholding is properly established by a Holder, shall remit amounts
withheld with respect to the Holder to applicable jurisdictions. To the extent
that the Trust is required to withhold and pay over any amounts to any authority
with respect to distributions or allocations to any Holder, the amount withheld
shall be deemed to be a distribution in the amount of the withholding to the
Holder. In the event of any claimed over withholding, Holders shall be limited
to an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE XII
Amendments and Meetings
SECTION 12.01. Amendments. (a) Except as otherwise provided in this
Declaration or by any applicable terms of the Securities, this Declaration may
only be amended by a written instrument approved and executed by:
<PAGE>
77
(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Property Trustee, the Property Trustee; and
(iii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Property Trustee,
the Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
<PAGE>
78
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(d) Section 9.01(c) and this Section 12.01 shall not be amended without
the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders of
a Majority in liquidation amount of the Common Securities;
(f) the rights of the holders of the Common Securities under Article V to
increase or decrease the number of, and appoint and remove Trustees shall not be
amended without the consent of the Holders of a Majority in liquidation amount
of the Common Securities; and
(g) notwithstanding Section 12.01(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration;
<PAGE>
79
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders; and
(v) to modify, eliminate or add to any provisions to such extent as
shall be necessary to ensure that the Trust will be classified for Federal
income tax purposes as a grantor trust at all times that any Securities are
outstanding which amendment does not have an adverse effect on the rights,
preferences or privileges of the Holders.
SECTION 12.02. Meetings of the Holders of Securities; Action by Written
Consent. (a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the Preferred Securities
are listed or admitted for trading. The Regular Trustees shall call a meeting of
the Holders of such class if directed to do so by the Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall be given by
delivering to the Regular Trustees one or more requests in a writing stating
that the signing Holders of Securities wish to call a meeting and indicating the
general or specific purpose for which the meeting is to be called. Any Holders
of Securities calling a meeting shall specify in writing the Certificates held
by the Holders of Securities exercising the right to call a meeting and only
those Securities represented by the Certificates so specified shall be counted
for purposes of determining whether the required percentage set forth in the
second sentence of this paragraph has been met.
<PAGE>
80
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more than
60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any action
that may be taken at a meeting of the Holders of Securities may be taken
without a meeting if a consent in writing setting forth the action so taken
is signed by the Holders of Securities owning not less than the minimum
aggregate liquidation amount of Securities that would be necessary to
authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holders for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for it
by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of
11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
<PAGE>
81
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be conducted
by the Regular Trustees or by such other Person that the Regular Trustees
may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
provide otherwise, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
Representations of Property Trustee and Delaware Trustee
SECTION 13.01. Representations and Warranties of Property Trustee. The
Trustee that acts as initial Property Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration and at the Closing
Date, and each Successor Property Trustee represents and warrants to the Trust
and the Sponsor at the time of the Successor Property Trustee's acceptance of
its appointment as Property Trustee that:
(a) The Property Trustee is a banking orporation with trust powers, duly
organized, validly existing and in
<PAGE>
82
good standing under the laws of the jurisdiction of its organization, with
corporate power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, the Declaration.
(b) The execution, delivery and performance by the Property Trustee of the
Declaration has been duly authorized by all necessary corporate action on the
part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law).
(c) The execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the
certificate of incorporation or By-laws of the Property Trustee.
(d) No consent, approval or authorization of, or registration with or
notice to, any Delaware or Federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of the Declaration.
SECTION 13.02. Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration and at the
Closing Date, and each Successor Delaware Trustee represents and warrants to the
Trust and the Sponsor at the time of the Successor Property Trustee's acceptance
of its appointment as Delaware Trustee that:
(a) The Delaware Trustee is a banking corporation with trust powers, duly
organized, validly existing and in
<PAGE>
83
good standing under the laws of the jurisdiction of its organization, with
corporate power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, the Declaration.
(b) The execution, delivery and performance by the Delaware Trustee of the
Declaration has been duly authorized by all necessary corporate action on the
part of the Delaware Trustee. The Declaration has been duly executed and
delivered by the Delaware Trustee, and constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law).
(c) The execution, delivery and performance of the Declaration by the
Delaware Trustee does not conflict with or constitute a breach of the
certificate of incorporation or By-laws of the Delaware Trustee.
(d) No consent, approval or authorization of, or registration with or
notice to, any Delaware or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the Declaration.
(e) The Delaware Trustee is an entity which has its principal place of
business in the State of Delaware.
(f) The Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and the Declaration. The Declaration under
Delaware law constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
<PAGE>
84
whether the enforcement of such remedies is considered in a proceeding in equity
or at law).
ARTICLE XIV
Registration Rights
SECTION 14.01. Registration Rights. The Holders of the Preferred
Securities, the Debentures and the Preferred Securities Guarantee are entitled
to the benefits of a Registration Rights Agreement. Pursuant to the Registration
Rights Agreement the Sponsor has agreed for the benefit of the Holders of the
Preferred Securities, the Debentures and the Preferred Securities Guarantee that
(i) it will, at its cost, prior to August 15, 1997 file a shelf registration
statement (the "Shelf Registration Statement") with the Commission with respect
to resales of the Preferred Securities, together with the Debentures, the
Preferred Securities Guarantee and the related Common Stock issuable upon
conversion thereof, (ii) prior to December 15, 1997, such Shelf Registration
Statement shall be declared effective by the Commission and (iii) the Sponsor
will maintain such Shelf Registration Statement continuously effective under the
Securities Act for so long as shall be required under Rule 144(k) of the
Securities Act or any successor rule or regulation thereto or such earlier date
as is provided in the Registration Rights Agreement. If the Sponsor fails to
comply with any of clauses (i) through (iii) above (a "Registration Default")
then, at such time, the per annum interest rate on the Securities will increase
by 50 basis points (.50%), provided, however, that if the Registration Default
consists of the occurrence of any event contemplated by paragraph 3(c)(2)(iii)
of the Registration Rights Agreement, such Registration Default shall not be
deemed to have occurred until the expiration of 30 days after the date of the
occurrence of such event if such event is an action taken by the Guarantor in
good faith and for valid business reasons and the Trust and the Guarantor
thereafter promptly comply with the requirements of paragraph 3(i) of the
Registration Rights Agreement. Such increase will remain in effect from and
including the date
<PAGE>
85
on which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured on which date the interest rate
on the Securities will revert to the interest rate originally borne by the
Securities.
ARTICLE XV
Miscellaneous
SECTION 15.01. Notices. All notices provided for in this Declaration shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of to the Holders of the Securities):
c/o DT Industries, Inc.
Corporate Centre
Suite 2-300
1949 E. Sunshine
Springfield, MO 65804
Attention: Vice President-Finance
(b) if given to the Property Trustee, at the mailing address set forth
below (or such other address as the Property Trustee may give notice of to the
Holders of the Securities):
The Bank of New York
101 Barclay Street
Floor 21 West
New York, NY 10286
Attention: Corporate Trust Trustee
Administration
(c) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth
<PAGE>
86
below (or such other address as the Holder of the Common Securities may give
notice to the Trust):
c/o DT Industries, Inc.
Corporate Centre
Suite 2-300
1949 E. Sunshine
Springfield, MO 65804
Attention: Vice President-Finance
(d) if given to any other Holder, at the address set forth on the books
and records of the Trust or the Registrar, as applicable.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 15.02. Governing Law. THIS DECLARATION AND THE RIGHTS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY
SUCH LAWS WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS OF THE STATE OF
DELAWARE OR ANY OTHER JURISDICTION THAT WOULD CALL FOR THE APPLICATION OF THE
LAW OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE; PROVIDED, HOWEVER,
THAT THERE SHALL NOT BE APPLICABLE TO THE PARTIES HEREUNDER OR THIS DECLARATION
ANY PROVISION OF THE LAWS (STATUTORY OR COMMON) OF THE STATE OF DELAWARE
PERTAINING TO TRUSTS THAT RELATE TO OR REGULATE, IN A MANNER INCONSISTENT WITH
THE TERMS HEREOF (A) THE FILING WITH ANY COURT OR GOVERNMENTAL BODY OR AGENCY OF
TRUSTEE ACCOUNTS OR SCHEDULES OF TRUSTEE FEES AND CHARGES, (B) AFFIRMATIVE
REQUIREMENTS TO POST BONDS FOR TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A
TRUST, (C) THE NECESSITY FOR OBTAINING COURT OR OTHER GOVERNMENTAL APPROVAL
CONCERNING THE ACQUISITION, HOLDING OR DISPOSITION OF REAL OR PERSONAL PROPERTY,
(D) FEES OR OTHER
<PAGE>
87
SUMS PAYABLE TO TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (E) THE
ALLOCATION OF RECEIPTS AND EXPENDITURES TO INCOME OR PRINCIPAL, (F) RESTRICTIONS
OR LIMITATIONS ON THE PERMISSIBLE NATURE, AMOUNT OR CONCENTRATION OF TRUST
INVESTMENTS OR REQUIREMENTS RELATING TO THE TITLING, STORAGE OR OTHER MANNER OF
HOLDING OR INVESTING TRUST ASSETS OR (G) THE ESTABLISHMENT OF FIDUCIARY OR OTHER
STANDARDS OF RESPONSIBILITY OR LIMITATIONS ON THE ACTS OR POWERS OF TRUSTEES
THAT ARE INCONSISTENT WITH THE LIMITATIONS OR LIABILITIES OR AUTHORITIES AND
POWERS OF THE TRUSTEE HEREUNDER AS SET FORTH OR REFERENCED IN THIS DECLARATION.
SECTION 3540 OF TITLE 12 OF THE DELAWARE CODE SHALL NOT APPLY TO THE TRUST.
SECTION 15.03. Intention of the Parties. It is the intention of the parties
hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.
SECTION 15.04. Headings. Headings contained in this Declaration are
inserted for convenience of reference only and do not affect the interpretation
of this Declaration or any provision hereof.
SECTION 15.05. Successors and Assigns. Whenever in this Declaration any of
the parties hereto is named or referred to, the successors and assigns of such
party shall be deemed to be included, and all covenants and agreements in this
Declaration by the Sponsor and the Trustees shall bind and inure to the benefit
of their respective successors and assigns, whether so expressed.
SECTION 15.06. Partial Enforceability. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
<PAGE>
88
SECTION 15.07. Counterparts. This Declaration may contain more than one
counterpart of the signature page and this Declaration may be executed by the
affixing of the signature of each of the Trustees to one of such counterpart
signature pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the signers
had signed a single signature page.
<PAGE>
89
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
Stephen J. Gore, as Regular Trustee
/s/ Stephen J. Gore
----------------------------------------
Bruce P. Erdel, as Regular Trustee
/s/ Bruce P. Erdel
----------------------------------------
Gregory D. Wilson, as Regular Trustee
/s/ Gregory D. Wilson
----------------------------------------
THE BANK OF NEW YORK
(DELAWARE), as Delaware Trustee
By: /s/ Mary Jane Morrissey
----------------------------
Name: Mary Jane Morrissey
Title: Vice President
<PAGE>
90
THE BANK OF NEW YORK, as
Property Trustee
By: /s/ Timothy J. Shea
----------------------------
Name: Timothy J. Shea
Title: Assistant Treasurer
DT Industries, Inc., as
Sponsor
By: /s/ Bruce P. Erdel
----------------------------
Name: Bruce P. Erdel
Title: Vice President-Finance
<PAGE>
ANNEX I
TERMS OF
7.16% CONVERTIBLE PREFERRED SECURITIES
7.16% CONVERTIBLE COMMON SECURITIES
Pursuant to Section 7.01 of the Amended and Restated Declaration of Trust,
dated as of June 1, 1997 (as amended from time to time, the "Declaration"), the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration or, if not defined in such Declaration, as defined in
the Offering Circular (as defined in the Declaration)):
1. Designation and Number.
(a) "Preferred Securities." 1,400,000 Preferred Securities of the Trust
with an aggregate liquidation preference with respect to the assets of
the Trust of seventy million dollars ($70,000,000), and a liquidation
preference with respect to the assets of the Trust of $50 per
Preferred Security, are hereby designated for the purposes of
identification only as "7.16% Convertible Preferred Securities
(liquidation preference $50 per Convertible Preferred Security)" (the
"Preferred Securities"). The Preferred Security Certificates
evidencing the Preferred Securities shall be substantially in the form
attached hereto as Exhibit A-1 and Exhibit A-2, with such changes and
additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of any
stock exchange or
<PAGE>
other organization on which the Preferred Securities are listed.
(b) "Common Securities." 43,300 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust
of two million one hundred sixty-five thousand dollars ($2,165,000),
and a liquidation amount with respect to the assets of the Trust of
$50 per Common Security, are hereby designated for the purposes of
identification only as "7.16% Convertible Common Securities
(liquidation amount $50 per Convertible Common Security)" (the "Common
Securities"). The Common Security Certificates evidencing the Common
Securities shall be substantially in the form attached hereto as
Exhibit A-3, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate per
annum of 7.16% (the "Coupon Rate") of the stated liquidation amount of
$50 per Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in
arrears for more than one quarter will bear interest thereon
compounded quarterly at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such
cash distributions and any such interest payable unless otherwise
stated. A Distribution is payable only to the extent that payments are
made in respect of the Debentures held by the Property Trustee and to
the extent the Property Trustee has funds available therefor. The
amount of Distributions payable for any period will be computed for
any full quarterly Distribution period on the basis of a 360-day year
of twelve 30-day months, and for any period shorter than a full
quarterly Distribu-
2
<PAGE>
ion period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day
month.
(b) Distributions on the Securities will be cumulative, will accrue from
the date of original issuance and will be payable quarterly in
arrears, on the following dates, which dates correspond to the
interest payment dates on the Debentures: March 31, June 30, September
30 and December 31 of each year, commencing on June 30, 1997, except
as otherwise described below. The Sponsor has the right under the
Indenture to defer payments of interest by extending the interest
payment period from time to time on the Debentures for a period not
exceeding 20 consecutive quarters (each an "Extension Period") and, as
a consequence of such deferral, Distributions will also be deferred.
Despite such deferral, quarterly Distributions will continue to accrue
with interest thereon (to the extent permitted by applicable law) at
the Coupon Rate compounded quarterly during any such Extension Period.
Prior to the termination of any such Extension Period, the Sponsor may
further extend such Extension Period; provided that such Extension
Period together with all such previous and further extensions thereof
may not exceed 20 consecutive quarters or extend beyond the maturity
(whether at the stated maturity or by declaration of acceleration,
call for redemption or otherwise) of the Debentures under the
Indenture. Payments of accrued Distributions will be payable to
Holders as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period. Upon the
termination of any Extension Period and the payment of all amounts
then due, the Sponsor may commence a new Extension Period, subject to
the above requirements.
(c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books
3
<PAGE>
and records of the Trust on the relevant record dates. The relevant
record dates shall be one day prior to the relevant payment dates,
except as otherwise described in this Annex I to the Declaration.
Subject to any applicable laws and regulations and the provisions of
the Declaration, each such payment in respect of Preferred Securities
being held in book-entry form through The Depository Trust Company
(the "Depositary") will be made as described under the heading
"Description of the Convertible Preferred Securities -- Book-Entry
Only Issuance -- The Depository Trust Company" in the Offering
Memorandum. The relevant record dates for the Common Securities shall
be the same record dates as for the Preferred Securities.
Distributions payable on any Securities that are not punctually paid
on any Distribution payment date, as a result of the Sponsor having
failed to make a payment under the Debentures, will cease to be
payable to the Person in whose name such Securities are registered on
the relevant record date, and such defaulted Distribution will instead
be payable to the Person in whose name such Securities are registered
on the special record date or other specified date determined in
accordance with the Indenture. If any date on which Distributions are
payable on the Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force
and effect as if made on such date.
(d) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into DT Common Stock pursuant to the
terms of the Securities as forth in this Annex I to the Declaration,
no payment, allowance or adjustment
4
<PAGE>
shall be made with respect to accumulated and unpaid Distributions on
such Securities, or be required to be made; provided that Holders of
Securities at the close of business on any record date for the payment
of Distributions will be entitled to receive the Distributions payable
on such Securities on the corresponding payment date notwithstanding
the conversion of such Securities into DT Common Stock following such
record date.
(e) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the
Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution of the Trust, the
Holders of the Securities on the date of the dissolution will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act, an amount equal to the aggregate of the stated liquidation amount of
$50 per Security plus accrued and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"), unless, in
connection with such dissolution, after paying or making reasonable provision to
pay all claims and obligations of the Trust in accordance with Section 3808(e)
of the Business Trust Act, Debentures in an aggregate principal amount equal to
the aggregate stated liquidation amount of such Securities, with an interest
rate equal to the Coupon Rate of, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Securities, shall
be distributed on a Pro Rata basis to the Holders of the Securities in exchange
for such Securities.
5
<PAGE>
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis in accordance with
paragraph 9.
4. Redemption and Distribution.
(a) Upon the repayment or payment of the Debentures in whole or in part,
whether at maturity or upon redemption or otherwise, the proceeds from
such repayment or redemption shall be simultaneously applied to redeem
Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so repaid or redeemed at
a redemption price of $50 per Security together with accrued and
unpaid Distributions thereon through the date of the redemption,
payable in cash (the "Redemption Price"). Holders will be given not
less than 30 nor more than 60 days' notice of such redemption. Upon
the repayment of the Debentures at maturity or upon any acceleration,
earlier redemption or otherwise, the proceeds from such repayment will
be applied to redeem the Securities, in whole, upon not less than 30
nor more than 60 days' notice.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as
described in Paragraph 4(e)(ii) below.
(c) If, at any time, a Tax Event shall occur and be continuing the Sponsor
shall cause the Regular Trustees to liquidate the Trust and, after
paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the
Business Trust Act, cause Debentures to be distributed to the Holders
of the Securities in liquidation of the Trust within
6
<PAGE>
90 days following the occurrence of such Tax Event (the "90 Day
Period"); provided, however, that such liquidation and distribution
shall be conditioned on (i) the Regular Trustees' receipt of an
opinion of a nationally recognized independent tax counsel experienced
in such matters (a "No Recognition Opinion"), which opinion may rely
on published revenue rulings of the Internal Revenue Service, to the
effect that the Holders of the Securities will not recognize any
income, gain or loss for United States federal income tax purposes as
a result of such liquidation and distribution of Debentures, and (ii)
the Sponsor being unable to avoid such Tax Event within such 90-day
period by taking some ministerial action or pursuing some other
reasonable measure that, in the sole judgment of the Sponsor, will
have no adverse effect on the Trust, the Sponsor or the Holders of the
Securities and will involve no material cost ("Ministerial Action").
If (i) the Sponsor has received an opinion (a "Redemption Tax
Opinion") of a nationally recognized independent tax counsel
(reasonably acceptable to the Regular Trustees) experienced in such
matters that, as a result of a Tax Event, there is more than an
insubstantial risk that the Sponsor would be precluded from deducting
the interest on the Debentures for United States federal income tax
purposes, even after the Debentures were distributed to the Holders of
Securities upon liquidation of the Trust as described in this
paragraph 4(c), or (ii) the Regular Trustees shall have been informed
by such tax counsel that it cannot deliver a No Recognition Opinion,
the Sponsor shall have the right, upon not less than 30 nor more than
60 days' notice, and within 90 days following the occurrence of such
Tax Event, to redeem the Debentures in whole (but not in part) for
cash, at par plus accrued and unpaid interest and, following such
redemption, all the Securities will be redeemed by the Trust at the
7
<PAGE>
liquidation preference of $50 per Security plus accrued and unpaid
distributions; provided, however, that, if at the time there is
available to the Sponsor or the Trust the opportunity to eliminate,
within such 90 day period, the Tax Event by taking some Ministerial
Action, the Trust or the Sponsor will pursue such Ministerial Action
in lieu of redemption.
"Tax Event" means that the Sponsor shall have received an opinion
of a nationally recognized independent tax counsel (reasonably
acceptable to the Regular Trustees) experienced in such matters (a
"Dissolution Tax Opinion") to the effect that as a result of (a) any
amendment to, or change (including any announced prospective change
(which shall not include a proposed change), provided that a Tax Event
shall not occur more than 90 days before the effective date of any
such prospective change) in, the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing authority
therefor or therein, or (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any
judicial decision or regulatory determination on or after the date of
the Offering Memorandum), which amendment or change is effective or
which interpretation or pronouncement is announced on or after the
date of the Offering Memorandum, there is more than an insubstantial
risk that (i) the Trust is or will be subject to United States federal
income tax with respect to interest received on the Debentures, (ii)
the Trust is, or will be within 90 days of the date thereof, subject
to more than a de minimis amount of taxes, duties or other
governmental charges, or (iii) interest paid in cash by the Sponsor to
the Trust on the Debentures
8
<PAGE>
is not or will not be deductible by the Sponsor for United States
federal income tax purposes.
If an Investment Company Event (as hereinafter defined) shall
occur and be continuing, the Sponsor shall cause the Regular Trustees
to liquidate the Trust and, after paying or making reasonable
provision to pay all claims and obligations of the Trust in accordance
with Section 3808(e) of the Business Trust Act, cause the Debentures
to be distributed to the Holders of the Securities in liquidation of
the Trust within 90 days following the occurrence of such Investment
Company Event.
"Investment Company Event" means the occurrence of a change in
law or regulation or a written change in interpretation or application
of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law"), to the
effect that the Trust is or will be considered an Investment Company
which is required to be registered under the Investment Company Act,
which Change in 1940 Act Law becomes effective on or after the date of
the Offering Memorandum.
After the date fixed for any distribution of Debentures: (i) the
Securities will no longer be deemed to be outstanding, (ii) the
Depositary or its nominee (or any successor Clearing Agency or its
nominee), as record Holder of Preferred Securities represented by
global certificates, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such
distribution and (iii) any certificates representing Securities,
except for certificates representing Preferred Securities held by the
Depositary or its nominee (or any successor Clearing Agency or its
nominee), will be deemed to represent Debentures having an aggregate
principal amount equal to the
9
<PAGE>
aggregate stated liquidation amount of such Securities, with accrued
and unpaid interest equal to accrued and unpaid Distributions on such
Securities until such certificates are presented to the Sponsor or its
agent for transfer or reissuance.
(d) The Securities will not be redeemed unless all accrued and unpaid
Distributions have been paid on all Securities for all quarterly
Distribution periods terminating on or before the date of redemption.
(e) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Securities (a "Redemption/
Distribution Notice") will be given by the Trust by mail to
each Holder of Securities to be redeemed or exchanged not
fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the
Debentures. For purposes of the calculation of the date of
redemption or exchange and the dates on which notices are
given pursuant to this paragraph 4(e)(i), a Redemption/
Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid,
to Holders of Securities. Each Redemption/Distribution Notice
shall be addressed to the Holders of Securities at the address
of each such Holder appearing in the books and records of the
Trust. No defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any Holder shall
affect the validity of the redemption or exchange proceedings
with respect to any other Holder.
10
<PAGE>
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be
redeemed Pro Rata from each Holder of Common Securities and
Preferred Securities, it being understood that, in respect of
Preferred Securities registered in the name of and held of
record by the Depositary (or any successor Clearing Agency)
or any nominee, the distribution of the proceeds of such
redemption will be made to each Clearing Agency Participant
(or Person on whose behalf such nominee holds such securities)
in accordance with the procedures applied by such agency or
nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be
issued if the Debentures are redeemed as set out in this
paragraph 4 (which notice will be irrevocable), then (A) with
respect to Preferred Securities held in book-entry form, by
12:00 noon, New York City time, on the redemption date,
provided that the Sponsor has paid the Property Trustee a
sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Property
Trustee will deposit irrevocably with the Depositary (or
successor Clearing Agency) funds sufficient to pay the amount
payable on redemption with respect to such Preferred Securities
and will give the Depositary irrevocable instructions and
authority to pay the amount payable on redemption to the
Holders of such Preferred Securities, and (B) with respect to
Preferred Securities issued in certificated form and Common
Securities, provided that the Sponsor has paid the Property
Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, the Property
11
<PAGE>
Trustee will irrevocably deposit with the Paying Agent funds
sufficient to pay the amount payable on redemption to the
Holders of such Securities upon surrender of their
certificates. If a Redemption/Distribution Notice shall have
been given and funds deposited as required, then on the date of
such deposit, all rights of Holders of such Securities so
called for redemption will cease, except the right of the
Holders of such Securities to receive the redemption price, but
without interest on such redemption price. Neither the Regular
Trustees nor the Trust shall be required to register or cause
to be registered the transfer of any Securities that have
been so called for redemption. If any date fixed for redemption
of Securities is not a Business Day, then payment of the amount
payable on such date will be made on the next succeeding day
that is a Business Day (without any interest or other payment
in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on
the immediately preceding Business Day, in each case with the
same force and effect as if made on such date fixed for
redemption. If payment of the redemption price in respect of
any Securities is improperly withheld or refused and not paid
either by the Trust or by the Sponsor as guarantor pursuant to
the relevant Securities Guarantee, Distributions on such
Securities will continue to accrue at the then applicable
rate, from the original redemption date to the date of payment,
in which case the actual payment date will be considered the
date fixed for redemption for purposes of calculating the
amount payable upon redemption (other than for purposes of
calculating any premium).
12
<PAGE>
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in the case of
Preferred Securities held in book-entry form, the Depositary
and, in the case of Securities held in certificated form,
the Holders of such certificates and (B) in respect of the
Common Securities, the Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), the
Sponsor or any of its subsidiaries may at any time and from
time to time purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
5. Conversion Rights.
The Holders of Securities shall have the right at any time, at their
option, to cause the Conversion Agent to convert Securities, on behalf of
the converting Holders, into shares of DT Common Stock in the manner
described herein on and subject to the following terms and conditions:
(a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of DT Common Stock
pursuant to the Holder's direction to the Conversion Agent to exchange
such Securities for a portion of the Debentures theretofore held by
the Trust on the basis of one Security per $50 principal amount of
Debentures, and immediately convert such amount of Debentures into
fully paid and nonassessable shares of DT Common Stock at an initial
rate of 1.2903 shares of DT Common Stock per $50 principal amount of
Debentures (which is equivalent to a conversion price of $38.75 per
share of DT Common Stock, subject to certain adjustments set forth in
the terms of the Debentures (as so adjusted, "Conversion Price")).
13
<PAGE>
(b) In order to convert Securities into DT Common Stock the Holder shall
submit to the Conversion Agent at the office referred to above an
irrevocable request to convert Securities on behalf of such Holder
(the "Conversion Request"), together, if the Securities are in
certificated form, with such certificates. The Conversion Request
shall (i) set forth the number of Securities to be converted and the
name or names, if other than the Holder, in which the shares of DT
Common Stock should be issued and (ii) direct the Conversion Agent (a)
to exchange such Securities for a portion of the Debentures held by
the Trust (at the rate of exchange specified in the preceding
paragraph) and (b) to immediately convert such Debentures on behalf of
such Holder, into DT Common Stock (at the conversion rate specified in
the preceding paragraph). The Conversion Agent shall notify the Trust
of the Holder's election to exchange Securities for a portion of the
Debentures held by the Trust and the Trust shall, upon receipt of such
notice, deliver to the Conversion Agent the appropriate principal
amount of Debentures for exchange in accordance with this Section. The
Conversion Agent shall thereupon notify the Sponsor of the Holder's
election to convert such Debentures into shares of DT Common Stock.
Holders of Securities at the close of business on a Distribution
record date will be entitled to receive the Distribution payable on
such securities on the corresponding Distribution payment date
notwithstanding the conversion of such Securities following such
record date but prior to such distribution payment date. Except as
provided above, neither the Trust nor the Sponsor will make, or be
required to make, any payment, allowance or adjustment upon any
conversion on account of any accumulated and unpaid Distributions
accrued on the Securities (including any Additional Amounts accrued
thereon) surrendered for conversion, or on account of any accumulated
and
14
<PAGE>
unpaid dividends on the shares of DT Common Stock issued upon such
conversion. Securities shall be deemed to have been converted
immediately prior to the close of business on the day on which a
Notice of Conversion relating to such Securities is received by the
Trust in accordance with the foregoing provision (the "Conversion
Date"). The Person or Persons entitled to receive the DT Common Stock
issuable upon conversion of the Debentures shall be treated for all
purposes as the record holder or holders of such DT Common Stock at
such time. As promptly as practicable on or after the Conversion Date,
the Sponsor shall issue and deliver at the office of the Conversion
Agent a certificate or certificates for the number of full shares of
DT Common Stock issuable upon such conversion, together with the cash
payment, if any, in lieu of any fraction of any share to the Person or
Persons entitled to receive the same, unless otherwise directed by the
Holder in the notice of conversion and the Conversion Agent shall
distribute such certificate or certificates to such Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints The Bank
of New York "Conversion Agent" for the purpose of effecting the
conversion of Securities in accordance with this Section. In effecting
the conversion and transactions described in this Section, the
Conversion Agent shall be acting as agent of the Holders of Securities
directing it to effect such conversion transactions. The Conversion
Agent is hereby authorized (i) to exchange Securities from time to
time for Debentures held by the Trust in connection with the
conversion of such Securities in accordance with this Section and (ii)
to convert all or a portion of the Debentures into DT Common Stock and
thereupon to deliver such shares of DT Common Stock in accordance with
the provisions of this Section and to deliver to the Trust a new
15
<PAGE>
Debenture or Debentures for any resulting unconverted principal
amount.
(d) No fractional shares of DT Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid
in cash by the Sponsor to the Trust, which in turn will make such
payment to the Holder or Holders of Securities so converted.
(e) The Sponsor shall at all times reserve and keep available out of its
authorized and unissued DT Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other
similar rights, such number of shares of DT Common Stock as shall from
time to time be issuable upon the conversion of all the Debentures
then outstanding. Notwithstanding the foregoing, the Sponsor shall be
entitled to deliver upon conversion of Debentures, shares of DT Common
Stock reacquired and held in the treasury of the Sponsor (in lieu of
the issuance of authorized and unissued shares of DT Common Stock), so
long as any such treasury shares are free and clear of all liens,
charges, security interests or encumbrances. Any shares of DT Common
Stock issued or delivered upon conversion of the Debentures shall be
duly authorized, validly issued and fully paid and nonassessable. The
Trust shall deliver the shares of DT Common Stock received upon
conversion of the Debentures to the converting Holder free and clear
of all liens, charges, security interests and encumbrances, except for
United States withholding taxes. Each of the Sponsor and the Trust
shall prepare and shall use its best efforts to obtain and keep in
force such governmental or regulatory permits or other authorizations
as may be required by law, and shall comply with all applicable
requirements as to registration or qualification of the DT Common
Stock (and all requirements to list the DT Common Stock issuable
upon conversion of Debentures that are at the time
16
<PAGE>
applicable), in order to enable the Sponsor to lawfully issue DT
Common Stock to the Trust upon conversion of the Debentures and the
Trust to lawfully deliver the DT Common Stock to each Holder upon
conversion of the Securities.
(f) The Sponsor will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of DT Common Stock on conversion of
Debentures and the delivery of the shares of DT Common Stock by the
Trust upon conversion of the Securities. The Sponsor shall not,
however, be required to pay any tax which may be payable in respect of
any transfer involved in the issue and delivery of shares of DT Common
Stock in a name other than that in which the Securities so converted
were registered, and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to the Trust the
amount of any such tax, or has established to the satisfaction of the
Trust that such tax has been paid.
(g) Nothing in the preceding Paragraph (f) shall limit the requirement of
the Trust to withhold taxes pursuant to the terms of the Securities or
set forth in this Annex I to the Declaration or to the Declaration
itself or otherwise require the Property Trustee or the Trust to pay
any amounts on account of such withholdings.
6. Voting Rights - Preferred Securities.
(a) Except as provided under paragraphs 6(b) and 8, in the Business Trust
Act and as otherwise required by law, the Declaration and the
Indenture, the Holders of the Preferred Securities will have no voting
rights.
(b) In addition to the rights of the Holders of the Preferred Securities
with respect to the enforcement of payment of principal and interest
17
<PAGE>
on the Debentures set forth herein, in the Declaration or in the
Indenture, if (i) the Trust fails to make Distributions in full on the
Preferred Securities for six (6) consecutive quarterly Distribution
periods (whether or not an Extended Interest Payment Period is in
effect), or (ii) an Event of Default occurs and is continuing (each of
(i) and (ii) being an "Appointment Event"), then the Holders of the
Preferred Securities, acting as a single class, will be entitled by
the vote of a Majority in liquidation preference of the Preferred
Securities to appoint a Special Regular Trustee in accordance with
Section 5.06(a)(ii)(B) of the Declaration. Any Holder of Preferred
Securities (other than the Sponsor, or any entity directly or
indirectly controlling or controlled by or under direct or indirect
common control with the Sponsor) will be entitled to nominate any
person to be appointed as Special Regular Trustee. For purposes of
determining whether the Trust has failed to make Distributions in full
for 6 consecutive quarterly Distribution periods, Distributions shall
be deemed to remain in arrears, notwithstanding any payments in
respect thereof, until full cumulative Distributions have been or
contemporaneously are paid with respect to all quarterly Distribution
periods terminating on or prior to the date of payment of such
cumulative Distributions. Not later than 30 days after such right to
appoint a Special Regular Trustee arises, the Regular Trustees will
convene a meeting for the purpose of appointing a Special Regular
Trustee. If the Regular Trustees fail to convene such meeting within
such 30-day period, the Holders of not less than 10% in aggregate
liquidation preference of the Preferred Securities will be entitled to
convene such meeting in accordance with Section 12.02 of the
Declaration. The record date for such meeting will be the close of
business on the Business Day that is one Business Day before
the day on which notice of the meeting is sent to the
18
<PAGE>
Holders. The provisions of the Declaration relating to the convening
and conduct of the meetings of the Holders will apply with respect to
any such meeting.
Any Special Regular Trustee so appointed shall cease to be a Special
Regular Trustee if the Appointment Event pursuant to which the Special
Regular Trustee was appointed and all other Appointment Events cease
to be continuing. A Special Regular Trustee may be removed without
cause at any time by vote of the Holders of a Majority in liquidation
preference of the Preferred Securities at a meeting of the Holders of
the Preferred Securities in accordance with Section 5.06(a)(ii)(B) of
the Declaration. The Holders of 10% in liquidation preference of the
Preferred Securities will be entitled to convene such a meeting in
accordance with Section 12.02 of the Declaration. The record date for
such meeting will be the close of business on the Business Day which
is one Business Day before the day on which the notice of meeting is
sent to Holders. Notwithstanding the appointment of a Special Regular
Trustee, the Sponsor shall retain all rights under the Indenture,
including the right to extend the interest payment period on the
Debentures.
Subject to the requirements set forth in this paragraph, the Holders
of a majority in liquidation preference of the Preferred Securities,
voting separately as a class may direct the time, method, and place of
conducting any proceeding for any remedy available to the Property
Trustee, or direct the exercise of any trust or power conferred upon
the Property Trustee under the Declaration, including the right to
direct the Property Trustee, as holder of the Debentures, to (i)
exercise the remedies available under the Indenture with respect to
the Debentures, (ii) waive any past default and its consequences that
19
<PAGE>
is waiveable under Section 5.13 of the Indenture or otherwise, (iii)
exercise any right to rescind or annul a declaration that the
principal of all the Debentures shall be due and payable or (iv)
consent to any amendment, modification or termination of the Indenture
or the Debentures, where such consent shall be required, provided,
however, that, where a consent under the Indenture would require the
consent or act of the Holders of greater than a majority of the
Holders in principal amount of Debentures affected thereby (a "Super
Majority"), the Property Trustee may only give such consent or take
such action at the direction of the Holders of at least the proportion
in liquidation preference of the Preferred Securities which the
relevant Super Majority represents of the aggregate principal amount
of the Debentures outstanding. The Property Trustee shall not, and
none of the other Trustees shall in any event, revoke any action
previously authorized or approved by a vote of the Holders of the
Preferred Securities, except by a subsequent vote of the Holders of
the Preferred Securities. Other than with respect to directing the
time, method and place of conducting any remedy available to the
Property Trustee or the Debenture Trustee as set forth above, the
Property Trustee shall not take any action in accordance with the
directions of the Holders of the Preferred Securities under this
paragraph unless the Property Trustee has obtained an opinion of tax
counsel to the effect that, as a result of such action, the Trust will
not fail to be classified as a grantor trust for United States federal
income tax purposes.
If the Property Trustee is the sole holder of the Debentures, any
Holder of the Preferred Securities shall have the right to institute
suit on behalf of the Trust for the enforcement of the right to
receive payment of the principal of and interest on the Debentures on
or after the Stated Maturity (as defined in the Indenture) of such
Debentures
20
<PAGE>
or, in the case of redemption, on the Redemption Date (as defined in
the Indenture), and the right to convert the Debentures in accordance
with the Indenture. In addition, the Holders of at least 25% in
aggregate liquidation preference of Preferred Securities outstanding
shall be entitled to institute any other proceeding in the event the
Debenture Trustee or the Property Trustee fails to do so in accordance
with the terms of the Indenture.
In addition to any other rights of the Holders provided herein or in
the Declaration, if the Property Trustee fails to enforce its rights,
as holder of the Debentures, under the Indenture, any Holder of
Preferred Securities may, after a period of 30 days has elapsed from
such Holder's written request to the Property Trustee to enforce such
rights, institute a legal proceeding directly against the Sponsor, to
enforce the rights of the Property Trustee, as holder of the
Debentures, under the Indenture, without first instituting any legal
proceeding against the Property Trustee or any other Person.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities
convened for such purpose, at a meeting of all of the Holders of
Securities in the Trust or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which Holders of
Preferred Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed
to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth the following information (i)
the date of such meeting or the date by which such action is to be
taken, (ii) a description of any resolution proposed for adoption at
such meeting on which such Holders are entitled to vote or of such
matter
21
<PAGE>
upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the
terms of the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of
the Preferred Securities that are owned by the Sponsor or any
Affiliate of the Sponsor shall not be entitled to vote or consent and
shall, for purposes of such vote or consent, be treated as if they
were not outstanding.
7. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 7(b), (c) and 8, in the Business
Trust Act and as otherwise required by law and the Declaration, the
Holders of the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace
any Trustee, subject to the exclusive right of the Holders of the
Preferred Securities to appoint, remove or replace a Special Regular
Trustee.
(c) Subject to Section 2.06 of the Declaration and only after the Event of
Default with respect to the Preferred Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the
second to last sentence of this paragraph, the Holders of a Majority
in liquidation amount of the Common Securities, voting separately as a
class, may direct the time,
22
<PAGE>
method, and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under the Declaration, including
(i) directing the time, method, place of conducting any proceeding for
any remedy available to the Debenture Trustee, or exercising any trust
or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waive any past default and its consequences that is
waiveable under Section 6.06 of the Indenture, or (iii) exercise any
right to rescind or annul a declaration that the principal of all the
Debentures shall be due and payable, provided that, where a consent or
action under the Indenture -------- ---- would require the consent or
act of the Holders of greater than a majority in principal amount of
Debentures affected thereby (a "Super Majority"), the Property Trustee
may only give such consent or take such action at the direction of the
Holders of at least the proportion in liquidation amount of the Common
Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. Pursuant to
this paragraph 7(c), the Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the
Preferred Securities, except by a subsequent vote of the Holders of
the Preferred Securities. Other than with respect to directing the
time, method and place of conducting any remedy available to the
Property Trustee or the Debenture Trustee as set forth above, the
Property Trustee shall not take any action in accordance with the
directions of the Holders of the Common Securities under this
paragraph unless the Property Trustee has obtained an opinion of tax
counsel to the effect that, as a result of such action the Trust will
not fail to be classified as a grantor trust for United States federal
income tax purposes. If the Property Trustee fails to enforce its
rights, as holder of the Debentures, under the Indenture, any Holder
of
23
<PAGE>
Common Securities may, after a period of 30 days has elapsed from such
Holder's written request to the Property Trustee to enforce such
rights, institute a legal proceeding directly against the Sponsor, to
enforce the Property Trustee's rights, as holder of the Debentures,
under the Indenture, without first instituting any legal proceeding
against the Property Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the
Trust or pursuant to written consent. The Regular Trustees will cause
a notice of any meeting at which Holders of Common Securities are
entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be mailed to each Holder of
record of Common Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to
vote or of such matter upon which written consent is sought and (iii)
instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the
terms of the Securities.
8. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.01 of the
Declaration, if any proposed amendment to the Declaration provides
for, or the Regular Trustees otherwise propose to effect, (i)
any action that would adversely affect the powers,
24
<PAGE>
preferences or special rights of the Securities, whether by way of
amendment to the Declaration or otherwise, or (ii) the dissolution,
winding-up or termination of the Trust, other than as described in
Section 8.01 of the Declaration, then the Holders of outstanding
Securities as a class, will be entitled to vote on such amendment or
proposal (but not on any other amendment or proposal) and such
amendment or proposal shall not be effective except with the approval
of the Holders of at least 66-2/3% in liquidation amount of the
Securities, voting together as a single class provided, however, that,
the rights of Holders of Preferred Securities under Article V of the
Declaration to appoint, remove or replace a Special Regular Trustee
shall not be amended without the consent of each Holder of Preferred
Securities; provided, however, if any amendment or proposal referred
to in clause (i) above would adversely affect only the Preferred
Securities or only the Common Securities, then only the affected class
will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval
of 66-2/3% in liquidation amount of such class of Securities.
(b) In the event the consent of the Property Trustee as the holder of the
Debentures is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the
Debentures, the Property Trustee shall request the direction of the
Holders of the Securities with respect to such amendment, modification
or termination and shall vote with respect to such amendment,
modification or termination as directed by at least the same
proportion in aggregate stated liquidation preference of the
Securities; provided, however, that the Property Trustee shall not
take any action in accordance with the directions of the Holders of
the Securities under this paragraph 8(b) unless the Property
Trustee has obtained an opinion of tax counsel to the
25
<PAGE>
effect that for the purposes of United States federal income tax the
Trust will not be classified as other than a grantor trust on account
of such action.
9. Pro Rata.
A reference in these terms of the Securities to any payment, distribution
or treatment as being "Pro Rata" shall mean pro rata to each Holder of
Securities according to the aggregate liquidation amount of the Securities held
by the relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, on any distribution date or redemption date an
Event of Default under the Declaration has occurred and is continuing, in which
case no payment of any distribution on, or amount payable upon redemption of,
any Common Security, and no other payment on account of the redemption,
liquidation or other acquisition of Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid distributions on all
outstanding Preferred Securities for all distribution periods terminating on or
prior thereto, or in the case of payment of the amount payable upon redemption
of the Preferred Securities, the full amount of such amount in respect of all
outstanding Preferred Securities shall have been made or provided for, and all
funds available to the Property Trustee shall first be applied to the payment in
full in cash of all distributions on, or the amount payable upon redemption of
Preferred Securities then due and payable.
10. Ranking.
The Preferred Securities rank pari passu and payment thereon shall be made
Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing under the Indenture in respect of the Debentures held
by the Property Trustee, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Preferred Securities.
26
<PAGE>
11. Acceptance of Securities Guarantees and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture which is
incorporated by reference herein and which includes, among other things,
provisions relating to certain rights of the Holders of the Preferred Securities
all as set forth therein.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to subscribe
for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
27
<PAGE>
EXHIBIT A-1
FORM OF
PREFERRED SECURITY
[FORM OF FACE OF SECURITY]
[Include the following Restricted Securities Legend on all Preferred
Securities, including Rule 144A Global Preferred Securities, Regulation S
Definitive Preferred Securities and Restricted Definitive Preferred Securities
unless otherwise determined by the Sponsor in accordance with applicable law --
THIS SECURITY (OR ITS PREDECESSOR), ANY CONVERTIBLE JUNIOR SUBORDINATED
DEBENTURE ISSUED IN EXCHANGE FOR THIS SECURITY AND ANY COMMON STOCK ISSUED ON
CONVERSION THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A)
THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)
INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (4) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN EACH OF
CASES (1) THROUGH (4) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
<PAGE>
2
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.
[Include if Preferred Security is a Regulation S Definitive Preferred
Security or any other Security issued in respect of a Preferred Security
initially issued in reliance on Regulation S under the Securities Act --
SUBSEQUENT TRANSFERS OF THIS SECURITY (OR ANY OTHER SECURITY REFERRED TO ABOVE)
AND REGISTRATION OF SUCH TRANSFERS ARE SUBJECT TO THE PRIOR SATISFACTION OF THE
CERTIFICATION REQUIREMENTS AS THE REGISTRAR OR TRANSFER AGENT MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.]
[Include if Preferred Security is Restricted Definitive Preferred Security
- -- IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.]
[Include if Preferred Security is in global form and The Depository Trust
Company is the U. S. Depository -- UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[Include if Preferred Security is in global form -- TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
<PAGE>
3
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
DECLARATION REFERRED TO BELOW.]
Certificate Number Number of Preferred Securities
[CUSIP NO. [ ]]
[ISIN NO. [ ]]
Preferred Securities
of
DT Capital Trust
7.16% Convertible Preferred Securities
(liquidation preference $50 per Convertible Preferred Security)
DT Capital Trust, a statutory business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that
- --------------------------------------------------------------------------------
(the "Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 7.16% Convertible Preferred Securities (liquidation preference
$50 per Convertible Preferred Security) (the "Preferred Securities"). The
Preferred Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities represented hereby are issued and shall in all respects be subject to
<PAGE>
4
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of June 1, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
Reference is hereby made to select provisions of the Preferred Securities
set forth on the reverse hereof, which select provisions shall for all purposes
have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debentures as indebtedness and the Preferred Securities as
evidence of indirect beneficial ownership in the Debentures.
<PAGE>
5
Unless the Property Trustee's Certificate of Authentication hereon has been
properly executed, these Preferred Securities shall not be entitled to any
benefit under the Declaration or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Trust has executed this certificate this day of
, 199 .
- ------------ --
DT Capital Trust
By:
------------------------------------
Name:
Title:
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the within-mentioned
Declaration.
Dated:
--------------, -----
THE BANK OF NEW YORK,
as Property Trustee
By:
------------------------------------
Authorized Signatory
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate
per annum of 7.16% (the "Coupon Rate") of the stated liquidation preference of
$50 per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). The term "Distributions" as
used herein includes such cash distributions and any such interest payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Property Trustee and
to the extent the Property Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on March 31, June 30, September 30 and
December 31 of each year, commencing on June 30, 1997, to Holders of record one
(1) day prior to such payment dates, which payment dates shall correspond to the
interest payment dates on the Debentures. The Debenture Issuer has the right
under the Indenture to defer payments of interest by extending the interest
payment period from time to time on the Debentures for a period not exceeding 20
consecutive quarters (each an "Extension Period") and, as a consequence of such
deferral, Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debenture Issuer may further extend such Extension Period; provided that
such Extension Period together with all such previous and further
<PAGE>
2
extensions thereof may not exceed 20 consecutive quarters or extend beyond the
maturity (whether at the stated maturity or by declaration of acceleration, call
for redemption or otherwise) of the Debentures under the Indenture. Payments of
accrued Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
The Preferred Securities shall be convertible into shares of DT Common
Stock, through (i) the exchange of Preferred Securities for a portion of the
Debentures and (ii) the immediate conversion of such Debentures into DT Common
Stock, in the manner and according to the terms set forth in the Declaration.
<PAGE>
CONVERSION REQUEST
To: The Bank of New York,
as Property Trustee of
DT Capital Trust
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock of DT INDUSTRIES, INC. (the "DT Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust (the
"Declaration"), dated as of June 1, 1997, by Stephen J. Gore, Bruce P. Erdel and
Gregory D. Wilson, as Regular Trustees, The Bank of New York (Delaware), as
Delaware Trustee, The Bank of New York, as Property Trustee, DT Industries,
Inc., as Sponsor, and by the Holders, from time to time, of individual
beneficial interests in the Trust to be issued pursuant to the Declaration.
Pursuant to the aforementioned exercise of the option to convert these Preferred
Securities, the undersigned hereby directs the Conversion Agent (as that term is
defined in the Declaration) to (i) exchange such Preferred Securities for a
portion of the Debentures (as that term is defined in the Declaration) held by
the Trust (at the rate of exchange specified in the terms of the Preferred
Securities set forth as Annex I to the Declaration) and (ii) immediately convert
such Debentures on behalf of the undersigned, into DT Common Stock (at the
conversion rate specified in the terms of the Preferred Securities set forth as
Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
<PAGE>
2
Any holder, upon the exercise of its conversion rights in accordance with
the terms of the Declaration and the Preferred Securities, agrees to be bound by
the terms of the Registration Rights Agreement relating to the DT Common Stock
issuable upon conversion of the Preferred Securities.
Date: ,
------------ ----
in whole in part
--- ---
Number of Preferred Securities
to be converted:
---------------------
If a name or names other than the undersigned, please indicate in the
spaces below the name or names in which the shares of DT Common Stock are
to be issued, along with the address or addresses of such person or persons
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
----------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and Social
Security or Other Identifying Number
----------------------------------------
----------------------------------------
----------------------------------------
Signature Guarantee:*
------------------
- -----------------------------
* (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
<PAGE>
----------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Preferred Security on the books of the Trust. The agent
may substitute another to act for him or her.
Date:
------------------------------
Signature:
-------------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee:**
---------------------------------------------------------
- -----------------------------
** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
<PAGE>
2
----------------------
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF RESTRICTED
PREFERRED SECURITIES
This certificate relates to Preferred Securities held in (check
-------------
applicable space) book-entry or definitive form by the undersigned.
---- ----
(A) The undersigned (check one box below):
|_| has requested the Property Trustee by written order to deliver in exchange
for its beneficial interest in the Rule 144A Global Preferred Security held
by the Depositary a Preferred Security or Preferred Securities in
definitive, registered form in such number equal to its beneficial interest
in such Rule 144A Global Preferred Security (or the number thereof
indicated above); or
|_| has requested the Property Trustee by written order to exchange its
Preferred Security in definitive registered form for an interest in the
Rule 144A Global Preferred Security held by the Depositary in such number
equal to number of Preferred Securities in definitive registered form so
held; or
|_| has requested the Property Trustee by written order to exchange or register
the transfer of a Preferred Security or Preferred Securities.
(B) The undersigned confirms that such Securities are being (check one box
below):
(1) |_| acquired for the undersigned's own account, without transfer (in
satisfaction of Section 9.02(d)(ii)(A)); or
(2) |_| pursuant to and in compliance with Rule 144A under the Securities
Act of 1933; or
(3) |_| pursuant to and in compliance with Regulation S under the
Securities Act of 1933; or
<PAGE>
3
(4) |_| pursuant to Rule 144 of the Securities Act of 1933.
Unless one of the boxes in (B) above is checked, the Property Trustee will
refuse to register any of the Preferred Securities evidenced by this certificate
in the name of any person other than the registered Holder thereof; provided,
however, that if box (3) or (4) is checked, the Property Trustee may require,
prior to registering any such transfer of the Preferred Securities such legal
opinions, certifications and other information as the Trust has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, such as the exemption provided by Rule 144 under such
Act.
----------------------------------------
Signature
Signature Guarantee:***
- --------------------------------- ----------------------------------------
Signature must be guaranteed Signature
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing these
Preferred Securities for its own account or
- -----------------------------
*** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
<PAGE>
4
an account with respect to which it exercises sole investment discretion and
that it and any such account is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act of 1933, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Trust as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated:
-------------------- -----------------------------------
NOTICE: To be executed by an
executive officer
<PAGE>
EXHIBIT A-2
FORM OF
EXCHANGED PREFERRED SECURITY
[FORM OF FACE OF SECURITY]
[Include if Preferred Security is in global form and The Depository Trust
Company is the U. S. Depositary -- UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[Include if Preferred Security is in global form -- TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO
BELOW.]
<PAGE>
Certificate Number Number of Preferred Securities
[CUSIP NO. [ ]]
[ISIN NO. [ ]]
Preferred Securities
of
DT Capital Trust
7.16% Convertible Preferred Securities
(liquidation preference $50 per Convertible Preferred Security)
DT Capital Trust, a statutory business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that
- --------------------------------------------------------------------------------
(the "Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 7.16% Convertible Preferred Securities (liquidation preference
$50 per Convertible Preferred Security) (the "Preferred Securities"). The
Preferred Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of June 1, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
Reference is hereby made to select provisions of the Preferred Securities
set forth on the reverse hereof, which select provisions shall for all purposes
have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debentures as indebtedness and the Preferred Securities as
evidence of indirect beneficial ownership in the Debentures.
Unless the Property Trustee's Certificate of Authentication hereon has been
properly executed, these Preferred Securities shall not be entitled to any
benefit under the Declaration or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Trust has executed this certificate this day of
, 199 .
- ------------ --
DT Capital Trust
By:
------------------------------------
Name:
Title:
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the within-mentioned
Declaration.
Dated:
--------------, -----
THE BANK OF NEW YORK,
as Property Trustee
By:
------------------------------------
Authorized Signatory
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate
per annum of 7.16% (the "Coupon Rate") of the stated liquidation preference of
$50 per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). The term "Distributions" as
used herein includes such cash distributions and any such interest payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Property Trustee and
to the extent the Property Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on March 31, June 30, September 30 and
December 31 of each year, commencing on June 30, 1997, to Holders of record one
(1) day prior to such payment dates, which payment dates shall correspond to the
interest payment dates on the Debentures. The Debenture Issuer has the right
under the Indenture to defer payments of interest by extending the interest
payment period from time to time on the Debentures for a period not exceeding 20
consecutive quarters (each an "Extension Period") and, as a consequence of such
deferral, Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debenture Issuer may further extend such Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters or extend beyond the maturity
<PAGE>
2
(whether at the stated maturity or by declaration of acceleration, call for
redemption or otherwise) of the Debentures under the Indenture. Payments of
accrued Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
The Preferred Securities shall be convertible into shares of DT Common
Stock, through (i) the exchange of Preferred Securities for a portion of the
Debentures and (ii) the immediate conversion of such Debentures into DT Common
Stock, in the manner and according to the terms set forth in the Declaration.
<PAGE>
CONVERSION REQUEST
To: The Bank of New York,
as Property Trustee of
DT Capital Trust
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock of DT INDUSTRIES, INC. (the "DT Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust (the
"Declaration"), dated as of June 1, 1997, by Stephen J. Gore, Bruce P. Erdel and
Gregory D. Wilson, as Regular Trustees, The Bank of New York (Delaware), as
Delaware Trustee, The Bank of New York, as Property Trustee, DT Industries,
Inc., as Sponsor, and by the Holders, from time to time, of individual
beneficial interests in the Trust to be issued pursuant to the Declaration.
Pursuant to the aforementioned exercise of the option to convert these Preferred
Securities, the undersigned hereby directs the Conversion Agent (as that term is
defined in the Declaration) to (i) exchange such Preferred Securities for a
portion of the Debentures (as that term is defined in the Declaration) held by
the Trust (at the rate of exchange specified in the terms of the Preferred
Securities set forth as Annex I to the Declaration) and (ii) immediately convert
such Debentures on behalf of the undersigned, into DT Common Stock (at the
conversion rate specified in the terms of the Preferred Securities set forth as
Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance with
the terms of the Declaration and the Preferred Securities, agrees to be bound by
the terms of the Registration
<PAGE>
2
Rights Agreement relating to the DT Common Stock issuable upon conversion of the
Preferred Securities.
Date: ,
------------ ----
in whole in part
--- ---
Number of Preferred Securities
to be converted:
---------------------
If a name or names other than the undersigned, please indicate in the
spaces below the name or names in which the shares of DT Common Stock are
to be issued, along with the address or addresses of such person or persons
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
----------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and Social
Security or Other Identifying Number
----------------------------------------
----------------------------------------
----------------------------------------
Signature Guarantee:*
------------------
- -----------------------------
* (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
<PAGE>
----------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
------------------------------
Signature:
-------------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee:**
---------------------------------------------------------
- -----------------------------
** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
<PAGE>
EXHIBIT A-3
FORM OF
COMMON SECURITY
[FORM OF FACE OF SECURITY]
[THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN EFFECTIVE REGISTRATION
STATEMENT.]
[OTHER THAN AS PROVIDED IN THE DECLARATION (AS DEFINED HEREIN), THIS
SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A
RELATED PARTY (AS DEFINED IN THE DECLARATION) OF DT INDUSTRIES, INC.]
Certificate Number Number of Common Securities
Common Securities
of
DT Capital Trust
7.16% Convertible Common Securities
(liquidation amount $50 per Convertible Common Security)
DT Capital Trust, a statutory business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that
- --------------------------------------------------------------------------------
(the "Holder") is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 7.16% Convertible
<PAGE>
2
Common Securities (liquidation amount $50 per Convertible Common Security) (the
"Common Securities"). The Common Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon surrender
of this certificate duly endorsed and in proper form for transfer. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities represented hereby are issued and shall in
all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of June 1, 1997, as the same may be
amended from time to time (the "Declaration"), including the designation of the
terms of the Common Securities as set forth in Annex I to the Declaration.
Capitalized terms used herein but not defined shall have the meaning given them
in the Declaration. The Holder is entitled to the benefits of the Common
Securities Guarantee to the extent provided therein. The Sponsor will provide a
copy of the Declaration, the Common Securities Guarantee and the Indenture to a
Holder without charge upon written request to the Sponsor at its principal place
of business.
Reference is hereby made to select provisions of the Common Securities set
forth on the reverse hereof, which select provisions shall for all purposes have
the same effect as if set forth at this place.
Upon receipt of this certificate, the Sponsor is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States federal income
tax purposes the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
<PAGE>
3
IN WITNESS WHEREOF, the Trust has executed this certificate this day of
, 199 .
- ------------ --
DT Capital Trust
By:
------------------------------------
Name:
Title:
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of 7.16% (the "Coupon Rate") of the stated liquidation amount of $50 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used herein
includes such cash distributions and any such interest payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 30-day month.
Except as otherwise described below, distributions on the Common Securities
will be cumulative, will accrue from the date of original issuance and will be
payable quarterly in arrears, on March 31, June 30, September 30 and December 31
of each year, commencing on June 30, 1997, to Holders of record one (1) day
prior to such payment dates, which payment dates shall correspond to the
interest payment dates on the Debentures. The Debenture Issuer has the right
under the Indenture to defer payments of interest by extending the interest
payment period from time to time on the Debentures for a period not exceeding 20
consecutive quarters (each an "Extension Period") and, as a consequence of such
deferral, Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debenture Issuer may further extend such Extension Period; provided that
such Extension Period together with all such previous and further
<PAGE>
2
extensions thereof may not exceed 20 consecutive quarters or extend beyond the
maturity (whether at the stated maturity or by declaration of acceleration, call
for redemption or otherwise) of the Debentures under the Indenture. Payments of
accrued Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
The Common Securities shall be redeemable as provided in the Declaration.
The Common Securities shall be convertible into shares of DT Common Stock,
through (i) the exchange of Common Securities for a portion of the Debentures
and (ii) the immediate conversion of such Debentures into DT Common Stock, in
the manner and according to the terms set forth in the Declaration.
<PAGE>
CONVERSION REQUEST
To: The Bank of New York,
as Property Trustee of
DT Capital Trust
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of DT INDUSTRIES, INC. (the "DT Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust (the
"Declaration"), dated as of June 1, 1997, by Stephen J. Gore, Bruce P. Erdel and
Gregory D. Wilson, as Regular Trustees, The Bank of New York (Delaware), as
Delaware Trustee, The Bank of New York, as Property Trustee, DT Industries,
Inc., as Sponsor, and by the Holders, from time to time, of individual
beneficial interests in the Trust to be issued pursuant to the Declaration.
Pursuant to the aforementioned exercise of the option to convert these Common
Securities, the undersigned hereby directs the Conversion Agent (as that term is
defined in the Declaration) to (i) exchange such Common Securities for a portion
of the Debentures (as that term is defined in the Declaration) held by the Trust
(at the rate of exchange specified in the terms of the Common Securities set
forth as Annex I to the Declaration) and (ii) immediately convert such
Debentures on behalf of the undersigned, into DT Common Stock (at the conversion
rate specified in the terms of the Common Securities set forth as Annex I to the
Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
<PAGE>
2
Any holder, upon the exercise of its conversion rights in accordance with
the terms of the Declaration and the Common Securities, agrees to be bound by
the terms of the Registration Rights Agreement relating to the DT Common Stock
issuable upon conversion of the Common Securities.
Date: ,
------------ ----
in whole in part
--- ---
Number of Common Securities
to be converted:
---------------------
If a name or names other than the undersigned, please indicate in the
spaces below the name or names in which the shares of DT Common Stock are
to be issued, along with the address or addresses of such person or persons
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
----------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and Social
Security or Other Identifying Number
----------------------------------------
----------------------------------------
----------------------------------------
Signature Guarantee:*
------------------
- -----------------------------
* (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
<PAGE>
----------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
------------------------------
Signature: -------------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee:**
---------------------------------------------------------
- -----------------------------
** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
================================================================================
DT INDUSTRIES, INC.
TO
THE BANK OF NEW YORK
Trustee
----------------
Indenture
Dated as of June 1, 1997
----------------
$72,165,000
7.16% Convertible Junior Subordinated
Deferrable Interest Debentures Due 2012
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Other Provisions of
General Application
SECTION 1.01. Definitions....................................... 3
SECTION 1.02. Compliance Certificates and Opinions.............. 12
SECTION 1.03. Form of Documents Delivered to Trustee............ 13
SECTION 1.04. Acts of Holders; Record Dates..................... 14
SECTION 1.05. Notices, Etc., to Trustee and the Company......... 16
SECTION 1.06. Notice to Holders; Waiver......................... 17
SECTION 1.07. Conflict with Trust Indenture Act................. 17
SECTION 1.08. Effect of Headings and Table of Contents.......... 17
SECTION 1.09. Successors and Assigns............................ 18
SECTION 1.10. Separability Clause............................... 18
SECTION 1.11. Benefits of Indenture............................. 18
SECTION 1.12. Governing Law..................................... 18
i
<PAGE>
Page
SECTION 1.13. Legal Holidays.................................... 18
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally................................... 19
SECTION 2.02. Initial Issuance to Property Trustee.............. 19
ARTICLE III
The Securities
SECTION 3.01. Title and Terms................................... 20
SECTION 3.02. Denominations..................................... 22
SECTION 3.03. Execution, Authentication, Delivery and Dating.... 22
SECTION 3.04. Temporary Securities.............................. 23
SECTION 3.05. Registration, Registration of Transfer
and Exchange.................................... 24
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities.. 25
SECTION 3.07. Payment of Interest; Interest Rights Preserved.... 26
SECTION 3.08. Persons Deemed Owners............................. 28
SECTION 3.09. Cancellation...................................... 29
SECTION 3.10. Right of Set Off.................................. 29
SECTION 3.11. CUSIP Numbers..................................... 29
SECTION 3.12. Extension of Interest Payment Period; Notice
of Extension.................................... 30
SECTION 3.13. Paying Agent, Security Registrar and
Conversion Agent................................ 31
ii
<PAGE>
Page
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture........... 31
SECTION 4.02. Application of Trust Money........................ 33
ARTICLE V
Remedies
SECTION 5.01. Events of Default................................. 33
SECTION 5.02. Acceleration of Maturity; Rescission and
Annulment....................................... 35
SECTION 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee.......................... 37
SECTION 5.04. Trustee May File Proofs of Claim.................. 37
SECTION 5.05. Trustee May Enforce Claims Without Possession
of Securities................................... 38
SECTION 5.06. Application of Money Collected.................... 38
SECTION 5.07. Limitation on Suits............................... 39
SECTION 5.08. Unconditional Right of Holders to Receive
Principal and Interest and Convert.............. 39
SECTION 5.09. Restoration of Rights and Remedies................ 40
SECTION 5.10. Rights and Remedies Cumulative.................... 40
SECTION 5.11. Delay or Omission Not Waiver...................... 40
SECTION 5.12. Control by Holders................................ 41
SECTION 5.13. Waiver of Past Defaults........................... 41
SECTION 5.14. Undertaking for Costs............................. 42
SECTION 5.15. Waiver of Stay or Extension Laws.................. 42
iii
<PAGE>
Page
SECTION 5.16. Enforcement by Holders of Preferred Securities.... 42
ARTICLE VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities............... 43
SECTION 6.02. Notice of Defaults................................ 43
SECTION 6.03. Certain Rights of Trustee......................... 44
SECTION 6.04. Not Responsible for Recitals or Issuance
of Securities................................... 45
SECTION 6.05. May Hold Securities............................... 45
SECTION 6.06. Money Held in Trust............................... 46
SECTION 6.07. Compensation and Reimbursement.................... 46
SECTION 6.08. Disqualification; Conflicting Interests........... 47
SECTION 6.09. Corporate Trustee Required; Eligibility........... 47
SECTION 6.10. Resignation and Removal; Appointment of
Successor....................................... 47
SECTION 6.11. Acceptance of Appointment by Successor............ 49
SECTION 6.12. Merger, Conversion, Consolidation or Succession
to Business..................................... 50
SECTION 6.13. Preferential Collection of Claims
Against Company................................. 50
ARTICLE VII
Holders' Lists and Reports by Trustee and Company
SECTION 7.01. Company to Furnish Trustee Names and Addresses
of Holders...................................... 50
iv
<PAGE>
Page
SECTION 7.02. Preservation of Information; Communications
to Holders...................................... 51
SECTION 7.03. Reports by Trustee................................ 51
SECTION 7.04. Reports by Company................................ 52
SECTION 7.05. Tax Reporting .................................... 52
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.01. Company May Consolidate, Etc., Only on
Certain Terms................................... 52
SECTION 8.02. Successor Substituted............................. 54
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent
of Holders...................................... 54
SECTION 9.02. Supplemental Indentures with Consent of Holders... 55
SECTION 9.03. Execution of Supplemental Indentures.............. 57
SECTION 9.04. Effect of Supplemental Indentures................. 57
SECTION 9.05. Conformity with Trust Indenture Act............... 57
SECTION 9.06. Reference in Securities to Supplemental
Indentures...................................... 58
v
<PAGE>
Page
ARTICLE X
Covenants; Representations and Warranties
SECTION 10.01. Payment of Principal and Interest................. 58
SECTION 10.02. Maintenance of Office or Agency................... 58
SECTION 10.03. Money for Security Payments to Be Held in Trust... 59
SECTION 10.04. Statement by Officers as to Default............... 60
SECTION 10.05. Limitation on Dividends; Transactions with
Affiliates; Covenants as to the Trust........... 60
SECTION 10.06. Payment of Expenses of the Trust.................. 61
SECTION 10.07. Registration Rights............................... 62
ARTICLE XI
Redemption of Securities
SECTION 11.01. Right of Redemption............................... 63
SECTION 11.02. Applicability of Article.......................... 64
SECTION 11.03. Election to Redeem; Notice to Trustee............. 64
SECTION 11.04. Selection by Trustee of Securities to Be
Redeemed........................................ 64
SECTION 11.05. Notice of Redemption.............................. 65
SECTION 11.06. Deposit of Redemption Price....................... 65
SECTION 11.07. Securities Payable on Redemption Date............. 66
SECTION 11.08. Securities Redeemed in Part....................... 66
SECTION 11.09. Optional Redemption............................... 67
vi
<PAGE>
Page
SECTION 11.10. Tax Event Redemption.............................. 68
ARTICLE XII
Subordination of Securities
SECTION 12.01. Agreement to Subordinate.......................... 69
SECTION 12.02. Default on Senior Indebtedness.................... 69
SECTION 12.03. Liquidation; Dissolution; Bankruptcy.............. 70
SECTION 12.04. Subrogation....................................... 72
SECTION 12.05. Trustee to Effectuate Subordination............... 73
SECTION 12.06. Notice by the Company............................. 73
SECTION 12.07. Rights of the Trustee: Holders of Senior
Indebtedness.................................... 74
SECTION 12.08. Subordination May Not Be Impaired................. 75
ARTICLE XIII
Conversion of Securities
SECTION 13.01. Conversion Rights................................. 76
SECTION 13.02. Conversion Procedures............................. 76
SECTION 13.03. Conversion Price Adjustments...................... 79
SECTION 13.04. Reclassification, Consolidation, Merger or
Sale of Assets.................................. 86
SECTION 13.05. Notice of Adjustments of Conversion Price......... 87
SECTION 13.06. Prior Notice of Certain Events.................... 87
SECTION 13.07. Adjustments in Case of Fundamental Changes........ 88
vii
<PAGE>
Page
SECTION 13.08. Dividend or Interest Reinvestment Plans........... 92
SECTION 13.09. Certain Additional Rights......................... 93
SECTION 13.10. Restrictions on Common Stock Issuable
Upon Conversion................................. 94
SECTION 13.11. Trustee Not Responsible for Determining
Conversion Price or Adjustments................. 94
EXHIBIT A-1 FORM OF SECURITY
EXHIBIT A-2 FORM OF EXCHANGE SECURITY
viii
<PAGE>
INDENTURE, dated as of June 1, 1997, between
DT INDUSTRIES, INC., a corporation duly organized and
existing under the laws of the State of Delaware
(herein called the "Company"), and THE BANK OF NEW
YORK, a New York banking corporation, as Trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
WHEREAS DT Capital Trust, a Delaware business trust (the "Trust"), formed
under the Amended and Restated Declaration of Trust among the Company, as
Sponsor, The Bank of New York, as property trustee (the "Property Trustee"), and
The Bank of New York (Delaware), as Delaware trustee (the "Delaware Trustee"),
and Stephen J. Gore, Bruce P. Erdel and Gregory D. Wilson, as trustees, dated as
of June 1, 1997 (the "Declaration"), pursuant to the Purchase Agreement (the
"Purchase Agreement") dated June 12, 1997, among the Company, the Trust and the
Purchasers named therein, will issue and sell up to 1,400,000 of its 7.16%
Convertible Preferred Securities (the "Preferred Securities") with a liquidation
preference of $50 per Preferred Security, having an aggregate liquidation amount
with respect to the assets of the Trust of up to $70,000,000;
WHEREAS the trustees of the Trust, on behalf of the Trust, will execute and
deliver to the Company Common Securities evidencing an ownership interest in the
Trust, registered in the name of the Company, in an aggregate amount equal to
three percent of the capitalization of the Trust, equivalent to up to 43,300
Common Securities, with a liquidation preference of $50 per Common Security,
having an aggregate liquidation amount with respect to the assets of the Trust
of up to $2,165,000 (the "Common Securities");
WHEREAS the Trust will use the proceeds from the sale of the Preferred
Securities and the Common Securities to purchase from the Company Securities (as
defined below) in an aggregate principal amount of up to $72,165,000;
WHEREAS the Company is guaranteeing the payment of distributions on the
Preferred Securities, and payment of the Redemption Price (as defined herein)
and payments on liquidation with respect to the Preferred Securities, to the
<PAGE>
extent provided in the Preferred Securities Guarantee Agreement (the
"Guarantee") between the Company and The Bank of New York, as preferred
securities guarantee trustee, for the benefit of the holders of the Preferred
Securities from time to time;
WHEREAS the Company has duly authorized the creation of an issue of its
7.16% Convertible Junior Subordinated Deferrable Interest Debentures Due 2012
(the "Securities"), of substantially the tenor and amount hereinafter set forth
and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture;
WHEREAS, so long as the Trust is a Holder of Securities, and any Preferred
Securities are outstanding, the Declaration provides that the holders of
Preferred Securities may cause the Conversion Agent (as defined herein) to (a)
exchange such Preferred Securities for Securities held by the Trust and (b)
immediately convert such Securities into Common Stock (as defined herein); and
WHEREAS all things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders (as defined herein) thereof, it is mutually agreed, for the equal
and proportionate benefit of all Holders of the Securities, as follows:
2
<PAGE>
ARTICLE I
Definitions and Other
Provisions of General Application
SECTION 1.01. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified in
Section 1.04.
"Additional Interest" has the meaning specified in Section 3.01.
"Additional Payments" means Compounded Interest and Additional Interest, if
any.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
3
<PAGE>
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Applicable Price" has the meaning specified in Section 13.07(b).
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than a Saturday or a Sunday or a day on
which banking institutions in The City of New York are authorized or required by
law or executive order to remain closed.
"Closing Price" has the meaning specified in Section 13.07(b).
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Common Securities" has the meaning specified in the Recitals to this
instrument.
"Common Stock" includes any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. However, subject to the
provisions of Article XIII, shares issuable on conversion of Securities shall
include only shares of the class designated as Common Stock of the Company at
the date of this instrument or shares of any class or classes resulting from any
reclassification or
4
<PAGE>
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to redemption
by the Company; provided, that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable on conversion
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"Common Stock Fundamental Change" has the meaning specified in Section
13.07(b).
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Compounded Interest" has the meaning specified in Section 3.12.
"Conversion Agent" means the Person appointed to act on behalf of the
holders of Preferred Securities in effecting the conversion of Preferred
Securities as and in the manner set forth in the Declaration and Section 13.02
hereof.
"Conversion Date" has the meaning specified in Section 13.02.
"Corporate Trust Office" means the principal office of the Trustee in New
York, New York, at which at any particular time its corporate trust business
shall be administered and which at the date of this Indenture is 101 Barclay
Street, Floor 21 West, New York, New York 10286.
5
<PAGE>
"Declaration" has the meaning specified in the Recitals of this instrument.
"Defaulted Interest" has the meaning specified in Section 3.07.
"Delaware Trustee" has the meaning given it in the Recitals of this
instrument.
"Entitlement Date" has the meaning specified in Section 13.07.
"Event of Default" has the meaning specified in Section 5.01.
"Exchanged Securities" means the 7.16% Convertible Junior Subordinated
Deferrable Interest Debentures Due 2012 to be issued in connection with sales of
such Securities pursuant to an effective Shelf Registration Statement.
"Expiration Date" has the meaning specified in Section 1.04(d).
"Expiration Time" has the meaning specified in Section 13.03(vi).
"Extended Interest Payment Period" has the meaning specified in Section
3.12.
"Fundamental Change" has the meaning specified in Section 13.07(b).
"Guarantee" has the meaning specified in the Recitals to this instrument.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this
6
<PAGE>
instrument and any such supplemental indenture, respectively.
"Interest Payment Date" has the meaning specified in Section 3.01.
"Investment Company Event" has the meaning specified in the Declaration.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"90 Day Period" has the meaning specified in Section 11.10.
"NNM" has the meaning specified in Section 13.03(vii).
"No Recognition Opinion" has the meaning specified in the Declaration.
"Non-Stock Fundamental Change" has the meaning specified in Section
13.07(b).
"Notice of Conversion" means the notice to be given by a holder of
Preferred Securities to the Conversion Agent directing the Conversion Agent to
exchange such Preferred Securities for Securities and to convert such Securities
into Common Stock on behalf of such holder.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 10.04 shall be the principal
executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, and who shall be reasonably acceptable to the Trustee.
7
<PAGE>
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except: (i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancelation; (ii) Securities for whose payment or
redemption money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own Paying
Agent) for the Holders of such Securities; provided, that if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 3.06, converted into
Common Stock pursuant to Section 13.01, or in exchange for or in lieu of which
other Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such Securities are
held by a bona fide purchaser in whose hands such Securities are valid
obligations of the Company.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.06 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
8
<PAGE>
"Preferred Securities" has the meaning specified in the Recitals to this
instrument.
"Property Trustee" has the meaning specified in the Recitals of this
instrument.
"Purchase Agreement" has the meaning specified in the Recitals to this
instrument.
"Purchased Shares" has the meaning specified in Section 13.03(vi).
"Purchaser Stock Price" has the meaning specified in Section 13.07(b).
"Purchasers," with respect to the Preferred Securities, means the
purchasers named in the Purchase Agreement.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Redemption Tax Opinion" has the meaning set forth in the Declaration.
"Reference Date" has the meaning specified in Section 13.03(iv).
"Reference Market Price" has the meaning specified in Section 13.07(b).
"Registration Default" has the meaning specified in Section 10.07.
"Registration Rights Agreement" has the meaning specified in Section 10.07.
"Regular Record Date" has the meaning specified in Section 3.01.
9
<PAGE>
"Responsible Officer", when used with respect to the Trustee, means any
vice president, any assistant vice president, any assistant treasurer, any trust
officer or assistant trust officer, or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Securities Legend" has the meaning specified in Section 2.02.
"Securities" has the meaning specified in the Recitals to this instrument.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.05.
"Senior Indebtedness" means in respect of the Company (i) the principal,
premium, if any, and interest in respect of (A) indebtedness of such obligor for
money borrowed and (B) indebtedness evidenced by securities, debentures, bonds
or other similar instruments issued by such obligor, (ii) all capital lease
obligations of such obligor, (iii) all obligations of such obligor issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of such obligor and all obligations of such obligor under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such obligor for the
reimbursement of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction, (v) all obligations of the type referred
to in clauses (i) through (iv) above of other persons for the payment of which
such obligor is responsible or liable as obligor, guarantor or otherwise, (vi)
all obligations of the type referred to in clauses (i) through (v) above of
other persons secured by any lien on any property or asset of such obligor
(whether or not such obligation is assumed by such obligor), except for (1) any
such indebtedness that is by its terms subordinated to or pari passu with the
Securities and (2) any indebtedness (including all other debt securities and
guarantees in respect of those debt securities) initially issued to any other
trust, or a trustee of such trust, partnership, or other entity
10
<PAGE>
affiliated with the Company that is, directly or indirectly, a financing vehicle
of the Company (a "Financing Entity") in connection with the issuance by such
Financing Entity of preferred securities or other similar securities and (vii)
interest accruing subsequent to events of bankruptcy of the Company and its
subsidiaries at the rate provided for in the documentation governing such Senior
Indebtedness, whether or not such interest is an allowed claim enforceable
against the debtor in a bankruptcy case under relevant bankruptcy law.
"Shelf Registration Statement" has the meaning specified in Section 10.07.
"Special Event" has the meaning specified in the Declaration.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal, together with any
accrued and unpaid interest (including Compounded Interest), of such Security or
such installment of interest is due and payable.
"Subsidiary" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the policies,
management and affairs thereof.
"Tax Event" has the meaning specified in the Declaration.
"Trading Day" has the meaning specified in Section 13.07(b).
11
<PAGE>
"Trust" has the meaning specified in the Recitals to this instrument.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Securities" means Common Securities and Preferred Securities.
"Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"Voting Stock" of any Person means capital stock of such Person which
ordinarily has voting power for the election of directors (or Persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
SECTION 1.02. Compliance Certificates and Opinions. Upon any application or
request by the Company to the Trustee to take any action under any provision of
this Indenture, the Company shall furnish to the Trustee such certificates and
opinions as may be required under the Trust Indenture Act or reasonably
requested by the Trustee in connection with such application or request. Each
such certificate or opinion shall be given in the form of an Officers'
Certificate, if to be given by an officer of the Company, or an Opinion of
Counsel, if to be given by counsel, and shall comply with the applicable
requirements of the Trust Indenture Act and any other applicable requirement set
forth in this Indenture.
12
<PAGE>
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made or caused to be made such examination or investigation as is necessary
to enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to
13
<PAGE>
such factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. Acts of Holders; Record Dates. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given to or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by an agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments is or are delivered to the Trustee and, where it
is hereby expressly required, to the Company. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject to
Section 6.01) conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instru-
ment or writing may be proved by the affidavit of a witness of such execution or
by a certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee or the Company, as the case may be, deems
sufficient.
14
<PAGE>
(c) The Company may, in the circumstances permitted by the Trust Indenture
Act, fix any day as the record date for the purpose of determining the Holders
of Outstanding Securities entitled to give, make or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted to be given or taken by Holders. If not set
by the Company prior to the first solicitation of a Holder made by any Person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 7.01) prior to such first solicitation or vote, as the case
may be. With regard to any record date, only the Holders on such date (or their
duly designated proxies) shall be entitled to give or take, or vote on, the
relevant action.
(d) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any notice of default, (ii) any declaration of acceleration
referred to in Section 5.02, (iii) any request to institute proceedings referred
to in Section 5.07(2) or (iv) any direction referred to in Section 5.12. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the date set by the Trustee by
which any such determination shall be made (the "Expiration Date") by Holders of
the requisite principal amount of Outstanding Securities on such record date.
Nothing in this paragraph shall be construed to prevent the Trustee from setting
a new record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the date such action is taken. Promptly after any record date is
set pursuant to this paragraph, the Trustee, at the Company's expense, shall
cause notice of such record date, the
15
<PAGE>
proposed action by Holders and the applicable Expiration Date to be given to the
Company in writing and to each Holder of Securities in the manner set forth in
Section 1.06.
(e) The ownership of Securities shall be proved by the Security Register.
(f) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
(g) Without limiting the foregoing, a Holder entitled hereunder to give or
take any such action with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which who may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
SECTION 1.05. Notices, Etc., to Trustee and the Company. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Trustee Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
16
<PAGE>
SECTION 1.06. Notice to Holders; Waiver. Where this Indenture provides for
notice to Holders of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at such Holder's address
as it appears in the Security Register, not later than the latest date (if any),
and not earlier than the earliest date (if any), prescribed for the giving of
such notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Any notice when mailed to a Holder in the aforesaid manner shall
be conclusively deemed to have been received by such Holder whether or not
actually received by such Holder. Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
SECTION 1.07. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with a provision of the Trust Indenture Act that
is required under such Act to be a part of and govern this Indenture, the latter
provision shall control. If any provision of this Indenture modifies or excludes
any provision of the Trust Indenture Act that may be so modified or excluded,
the latter provision shall be deemed to apply to this Indenture as so modified
or to be excluded, as the case may be.
SECTION 1.08. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
17
<PAGE>
SECTION 1.09. Successors and Assigns. All covenants and agreements in this
Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.10. Separability Clause. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 1.11. Benefits of Indenture. Nothing in this Indenture or in the
Securities, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, the holders of Senior Indebtedness, the
holders of Preferred Securities (to the extent provided herein) and the Holders
of Securities, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 1.12. Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 1.13. Legal Holidays. In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security or the last date on which a
Holder has the right to convert his Securities shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal or conversion of the Securities need not be
made on such date, but may be made on the next succeeding Business Day (except
that, if such Business Day is in the next succeeding calendar year, such
Interest Payment Date, Redemption Date or Stated Maturity, as the case may be,
shall be the immediately preceding Business Day) with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity or on such last day for conversion, provided that no interest shall
accrue for the period from and after such Interest Payment Date, Redemption Date
or Stated Maturity, as the case may be.
18
<PAGE>
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally. The Securities and the Trustee's
certificates of authentication shall be substantially in the form of Exhibit A-1
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchanged Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A-2, which is hereby incorporated by
reference and expressly made a part of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company).
The Company shall furnish any such legend not contained in Exhibit A-1 to the
Trustee in writing. Each Security shall be dated the date of its authentication.
The terms and provisions of the Securities set forth in Exhibits A-1 and A-2 are
part of the terms of this Indenture and to the extent applicable, the Company
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby.
The definitive Securities shall be typewritten or printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 2.02. Initial Issuance to Property Trustee. The Securities
initially issued to the Property Trustee of the Trust shall be in the form of
one or more individual certificates in definitive, fully registered form without
distribution coupons and shall bear the following legend (the "Restricted
Securities Legend") unless the Company determines otherwise in accordance with
applicable law:
THIS SECURITY (OR ITS PREDECESSOR) AND ANY COMMON STOCK ISSUED ON
CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND
MAY
19
<PAGE>
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)
INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (4) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN EACH OF
CASES (1) THROUGH (4) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.
ARTICLE III
The Securities
SECTION 3.01. Title and Terms. The aggregate principal amount of Securities
that may be authenticated and delivered under this Indenture is limited to
$72,165,000, except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities pursuant to
Section 3.04, 3.05, 3.06, 9.06, 11.08 or 13.01.
The Securities shall be known and designated as the "7.16% Convertible
Junior Subordinated Deferrable Interest Debentures Due 2012" of the Company.
Their Stated Maturity shall be May 31, 2012, and they shall bear interest at the
rate of 7.16% per annum, from June 12, 1997 or from the most recent Interest
Payment Date (as defined below) to
20
<PAGE>
which interest has been paid or duly provided for, as the case may be, payable
quarterly (subject to deferral as set forth herein), in arrears, on March 31,
June 30, September 30 and December 31 (each an "Interest Payment Date") of each
year, commencing June 30, 1997 until the principal thereof is paid or made
available for payment, and they shall be paid to the Person in whose name the
Security is registered at the close of business on the regular record date for
such interest installment, which shall be the close of business on the date
which is one day prior to each Interest Payment Date (the "Regular Record
Date"). Interest will compound quarterly and will accrue at the rate of 7.16%
per annum on any interest installment in arrears for more than one quarter or
during an extension of an interest payment period as set forth in Section 3.12
hereof.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. Except as provided in the following
sentence, the amount of interest payable for any period shorter than a full
quarterly period for which interest is computed, will be computed on the basis
of the actual number of days elapsed in such a 30-day month. In the event that
any date on which interest is payable on the Securities is not a Business Day,
then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
If at any time while the Property Trustee is the Holder of any Securities,
the Trust or the Property Trustee is required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in any
case, the Company will pay as additional interest ("Additional Interest") on the
Securities held by the Property Trustee, such additional amounts as shall be
required so that the net amounts received and retained by the Trust and the
Property Trustee after paying such taxes, duties, assessments or other
governmental charges will be equal to the amounts the Trust and the Property
Trustee would have received had no such taxes,
21
<PAGE>
duties, assessments or other governmental charges been imposed.
The principal of and interest on the Securities shall be payable at the
office or agency of the Company in the United States maintained for such purpose
and at any other office or agency maintained by the Company for such purpose in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however, that
at the option of the Company payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register.
The Securities shall be redeemable as provided in Article XI hereof.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article XII hereof.
The Securities shall be convertible as provided in Article XIII hereof.
SECTION 3.02. Denominations. The Securities shall be issuable only in
registered form without coupons and only in denominations of $50 and integral
multiples thereof.
SECTION 3.03. Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers and the corporate seal on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
22
<PAGE>
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities; and the Trustee in accordance with such Company
Order shall authenticate and make available for delivery such Securities as in
this Indenture provided and not otherwise.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
SECTION 3.04. Temporary Securities. Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and make available for delivery, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 10.02, without charge to
the Holder. Upon surrender for cancelation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
23
<PAGE>
SECTION 3.05. Registration, Registration of Transfer and Exchange. (a)
General. The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 10.02 being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at an office or
agency of the Company designated pursuant to Section 10.02 for such purpose, the
Company shall execute, and the Trustee shall authenticate and make available for
delivery, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, the Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.
24
<PAGE>
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.04, 9.06, 11.08 or 13.01 not involving any
transfer.
Neither the Company nor the Trustee shall be required (i) in the case of a
partial redemption of the Securities, to issue, register the transfer of or
exchange any Security during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Securities
selected for redemption under Section 11.04 and ending at the close of business
on the day of such mailing or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
(b) Transfer Procedures and Restrictions. The Securities may not be
transferred except in compliance with the Restricted Securities Legend unless
otherwise determined by the Company in accordance with applicable law. Upon any
distribution of the Securities to the holders of the Preferred Securities in
accordance with the Declaration, the Company and the Trustee shall enter into a
supplemental indenture pursuant to Section 9.01(6) to provide for transfer
procedures and restrictions with respect to the Securities substantially similar
to those contained in the Declaration to the extent applicable in the
circumstances existing at the time of such distribution.
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and make available for delivery in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the
25
<PAGE>
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and the Trustee
shall authenticate and make available for delivery, in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.07. Payment of Interest; Interest Rights Preserved. Interest on
any Security which is payable, and is punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date.
26
<PAGE>
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on
the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his address as it appears in
the Security Register, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of business
on such Special Record Date
27
<PAGE>
and shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and, if so
listed, upon such notice as may be required by such exchange (or by the
Trustee if the Securities are not listed), if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue (including in each such case Compounded Interest),
which were carried by such other Security.
In the case of any Security which is converted after any Regular Record
Date and on or prior to the next succeeding Interest Payment Date (other than
any Security whose Maturity is prior to such Interest Payment Date), interest
whose Stated Maturity is on such Interest Payment Date shall be payable on such
Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security that is converted, interest whose Stated Maturity is after the
date of conversion of such Security shall not be payable, and the Company shall
not make nor be required to make any other payment, adjustment or allowance with
respect to accrued but unpaid interest (including Compounded Interest) on the
Securities being converted, which shall be deemed to be paid in full.
SECTION 3.08. Persons Deemed Owners. Prior to due presentment of a Security
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such Security is
28
<PAGE>
registered as the owner of such Security for the purpose of receiving payment of
principal of and (subject to Section 3.07) interest (including Compounded
Interest) on such Security and for all other purposes whatsoever, whether or not
such Security be overdue, and neither the Company, the Trustee nor any agent of
the Company or the Trustee shall be affected by notice to the contrary.
SECTION 3.09. Cancelation. All Securities surrendered for payment,
redemption, registration of transfer or exchange or conversion shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancelation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly canceled by the Trustee. No Securities
shall be authenticated in lieu of or in exchange for any Securities canceled as
provided in this Section, except as expressly permitted by this Indenture. All
canceled Securities held by the Trustee shall be disposed of as directed by a
Company Order; provided, however, that the Trustee shall not be required to
destroy the certificates representing such canceled Securities.
SECTION 3.10. Right of Set Off. Notwithstanding anything to the contrary in
this Indenture, the Company shall have the right to set off any payment it is
otherwise required to make hereunder to the extent the Company has theretofore
made, or is concurrently on the date of such payment making, a payment under the
Guarantee.
SECTION 3.11. CUSIP Numbers. The Company in issuing the Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided,
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in the "CUSIP" numbers.
SECTION 3.12. Extension of Interest Payment Period; Notice of Extension.
(a) The Company shall have the right, at any time during the term of this
Security, from time to time to defer payments of interest by extending for
successive periods not exceeding 20 consecutive quarters for each such period
(an "Extended Interest Payment Period"). To the extent permitted by applicable
law, interest, the payment of which has been deferred because of the extension
of the interest payment period pursuant to this Section 3.12, will bear interest
thereon at 7.16% compounded quarterly for each quarter of the Extended Interest
Payment Period ("Compounded Interest"). At the end of the Extended Interest
Payment Period, the Company shall pay all interest then accrued and unpaid on
the Securities, including any Compounded Interest that shall be payable to the
Holders of the Securities in whose names the Securities are registered in the
Security Register on the first Regular Record Date after the end of the Extended
Interest Payment Period. Before the termination of any Extended Interest Payment
Period, the Company may further extend such period, provided that such period
together with all such further extensions thereof shall not exceed 20
consecutive quarters or extend beyond the Maturity of the Securities. Upon the
termination of any Extended Interest Payment Period and upon the payment of all
interest then accrued and unpaid on the Securities, including any Additional
Payments then due, the Company may commence a new Extended Interest Payment
Period, subject to the foregoing requirements. No interest shall be due and
payable during an Extended Interest Payment Period except at the end thereof.
(b) If the Property Trustee is the sole Holder of the Securities, the
Company shall give the Holder of the Security and the Trustee notice of its
selection of an Extended Interest Payment Period at least one Business Day prior
to the earlier of (i) the Interest Payment Date or (ii) if the Preferred
Securities are listed on the New York Stock Exchange or other stock exchange or
quotation system, the date the Trust is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization or to holders of
the Preferred Securities of the record date or the date such distributions are
payable, but in any event not less than ten Business Days prior to such record
date.
30
<PAGE>
(c) If the Property Trustee is not the sole holder of the Securities, the
Company shall give the Holders of the Securities and the Trustee notice of its
selection of an Extended Interest Payment Period at least ten Business Days
prior to the earlier of (i) the Interest Payment Date or (ii) if the Preferred
Securities are listed on the New York Stock Exchange or other stock exchange or
quotation system, the date the Trust is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization or to holders of
the Securities of the record date or the date such distributions are payable,
but in any event not less than two Business Days prior to such record date.
(d) The quarter in which any notice is given pursuant to paragraphs (b) and
(c) hereof shall be counted as one of the 20 quarters permitted in the maximum
Extended Interest Payment Period permitted under paragraph (a) hereof.
SECTION 3.13. Paying Agent, Security Registrar and Conversion Agent. The
Trustee will initially act as Paying Agent, Security Registrar and Conversion
Agent. The Company may change any Paying Agent, Security Registrar, co-registrar
or Conversion Agent without prior notice. The Company or any of its Affiliates
may act in any such capacity.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture shall
cease to be of further effect (except as to any surviving rights of conversion,
registration of transfer or exchange of Securities herein expressly provided
for), and the Trustee, on demand of and at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when
31
<PAGE>
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 3.06 and (ii)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 10.03) have been delivered to the Trustee for cancelation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancelation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for such purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to
the Trustee for cancelation, for principal and interest (including
Compounded Interest) to the date of such deposit (in the case of
Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided
32
<PAGE>
for relating to the satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive.
SECTION 4.02. Application of Trust Money. Subject to the provisions of the
last paragraph of Section 10.03, all money deposited with the Trustee pursuant
to Section 4.01 shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly
or through any Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Persons entitled thereto, of the
principal and interest for whose payment such money has been deposited with the
Trustee. All moneys deposited with the Trustee pursuant to Section 4.01 (and
held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon Company Request.
ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default," wherever used herein,
means any one of the following events that has occurred and is continuing
(whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article XII or be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) default in the payment of the principal of (or premium, if any,
on) any Security when due whether at Maturity, upon redemption, by
declaration or otherwise; or
33
<PAGE>
(2) default in the payment of any interest upon any Security,
including any Compounded Interest in respect thereof, when it becomes due
and payable, and continuance of such default for a period of 30 days;
provided, that a valid extension of the interest payment period by the
Company pursuant to this Indenture shall not constitute a default in the
payment of interest for this purpose; or
(3) failure by the Company to issue and deliver Common Stock upon an
election to convert the Securities into Common Stock; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a default in whose
performance or whose breach is elsewhere in this Section specifically dealt
with), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least
25% in principal amount of the Outstanding Securities a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(5) entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of substantially
all of the property of the Company, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a
period of 60 consecutive days; or
34
<PAGE>
(6) the commencement by the Company of a voluntary case or proceeding
under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by the Company or to
the entry of a decree or order for relief in respect of itself in an
involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against the
Company, or the filing by the Company of a petition or answer or consent
seeking reorganization or relief under any applicable federal or state law,
or the consent by the Company to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or
of substantially all of the property of the Company, or the making by the
Company of an assignment for the benefit of creditors, or the admission by
the Company in writing of its inability to pay its debts generally as they
become due, or the taking of corporate action by the Company in furtherance
of any such action; or
(7) the voluntary or involuntary dissolution, winding up or
termination of the Trust, except in connection with (i) the distribution of
Securities to holders of Preferred Securities in liquidation or redemption
of their interests in the Trust, (ii) the redemption of all of the
outstanding Preferred Securities of the Trust or (iii) certain mergers,
consolidations or amalgamations, each as permitted by the Declaration.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities may declare the principal of all the Securities and any
other amounts payable hereunder (including any Additional Payments) to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders); provided that, if the Property Trustee is the sole
Holder of the Securities and if upon an Event of Default, the Trustee or the
Holders of not
35
<PAGE>
less than 25% in principal amount of the Outstanding Securities
fail to declare the principal of all the Securities to be immediately due and
payable, the holders of at least 25% in aggregate liquidation amount of
Preferred Securities then outstanding shall have such right by a notice in
writing to the Company and the Trustee; and upon any such declaration such
principal and all accrued interest shall become immediately due and payable;
provided that the payment of principal and interest on such Securities shall
remain subordinated to the extent provided in Article XII.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as provided in this Article hereinafter, the Holders of a majority
in aggregate principal amount of the Outstanding Securities, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest (including any Compounded Interest) on
all Securities,
(B) the principal of any Securities which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Securities, and
(C) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such declaration
of acceleration, have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
36
<PAGE>
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if
(1) default is made in the payment of any interest (including any
Compounded Interest) on any Security when such interest becomes due and
payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of any Security
at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest (including any Additional Payments) and,
to the extent that payment thereof shall be legally enforceable, interest on any
overdue principal and on any overdue interest (including any Additional
Interest), at the rate borne by the Securities, and, in addition thereto, all
amounts owing to the Trustee under Section 6.07.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.04. Trustee May File Proofs of Claim. In case of any judicial
proceeding relative to the Company (or any other obligor upon the Securities),
its property or its creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have claims of the Holders
and the Trustee allowed in any such proceeding. In particular, the Trustee shall
be authorized to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such
37
<PAGE>
payments directly to the Holders, to pay to the Trustee any amount due it, and
any predecessor Trustee under Section 6.07.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 5.05. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of all the amounts owing to the Trustee and any predecessor
Trustee under Section 6.07 the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, be for the ratable benefit
of the Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 5.06. Application of Money Collected. Subject to Article XII, any
money collected by the Trustee pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or interest (including any
Additional Payments), upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.07;
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest (including any Additional Payments) on the
Securities in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on
38
<PAGE>
such Securities for principal and interest (including any Compounded
Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 5.07. Limitation on Suits. Subject to Section 5.08, no Holder of
any Security shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(2) the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 5.08. Unconditional Right of Holders to Receive Principal and
Interest and Convert. Notwithstanding
39
<PAGE>
any other provision in this Indenture, the Holder of any Security shall have the
right, which is absolute and unconditional, to receive payment of the principal
of and (subject to Section 3.07) interest (including any Additional Payments) on
such Security on the respective Stated Maturities expressed in such Security
(or, in the case of redemption, on the Redemption Date) and to convert such
Security in accordance with Article XIII and to institute suit for the
enforcement of any such payment and right to convert, and such rights shall not
be impaired without the consent of such Holder. If the Property Trustee is the
sole Holder of the Securities, any holder of the Preferred Securities shall have
the right to institute suit on behalf of the Trust for the enforcement of any
such payment and right to convert.
SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 5.10. Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities in the last paragraph of Section 3.06, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
40
<PAGE>
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12. Control by Holders. The Holders of a majority in principal
amount of the Outstanding Securities shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee; provided,
that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.13. Waiver of Past Defaults. Subject to Section 9.02 hereof, the
Holders of not less than a majority in principal amount of the Outstanding
Securities may on behalf of the Holders of all the Securities waive any past
default hereunder and its consequences, except a default
(1) in the payment of the principal of, premium, if any, or interest
(including any Additional Payments) on any Security (unless such default
has been cured and a sum sufficient to pay all matured installments of
interest and principal due otherwise than by acceleration has been
deposited with the Trustee); or
(2) in respect of a covenant or provision hereof which under Article
IX cannot be modified or amended without the consent of the Holder of each
Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
41
<PAGE>
SECTION 5.14. Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, a court may require any
party litigant in such suit to file an undertaking to pay the costs of such suit
(including attorneys fees and expenses), and may assess costs against any such
party litigant, in the manner and to the extent provided in the Trust Indenture
Act; provided, that neither this Section nor the Trust Indenture Act shall be
deemed to authorize any court to require such an undertaking or to make such an
assessment in any suit instituted by the Company or the Trustee or in any suit
for the enforcement of the right to receive the principal of and interest
(including any Additional Payments) on any Security or to convert any Security
in accordance with Article XIII.
SECTION 5.15. Waiver of Stay or Extension Laws. The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 5.16. Enforcement by Holders of Preferred Securities.
Notwithstanding anything to the contrary contained herein and in addition to any
other rights of the holders of the Preferred Securities provided herein or in
the Declaration, if the Property Trustee fails to enforce its rights under the
Securities for a period of 30 days after any holder of Preferred Securities
shall have made a written request to the Property Trustee to enforce such
rights, such holder may institute a legal proceeding directly against the
Company to enforce the Property Trustee's rights, as Holder of the Securities,
without first instituting any legal proceeding against the Property Trustee or
any other Person.
42
<PAGE>
ARTICLE VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities. (a) Except during the
continuance of an Event of Default, the Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture against
the Trustee.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(c) Notwithstanding the foregoing, (i) the duties and responsibilities of
the Trustee shall be as provided by the Trust Indenture Act and (ii) no
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 6.02. Notice of Defaults. The Trustee shall give the Holders notice
of any default hereunder as and to the extent provided by the Trust Indenture
Act; provided, however, that in the case of any default of the character
specified in Section 5.01(4), no such notice to Holders shall be given until at
least 30 days after the occurrence thereof. For the purpose of this Section, the
term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default.
43
<PAGE>
SECTION 6.03. Certain Rights of Trustee. Subject to the provisions of
Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its choice and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
44
<PAGE>
order, bond, debenture, note, other evidence of indebtedness or other paper
or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to reasonable examination of the books,
records and premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(h) the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith, without negligence or willful
misconduct, and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture; and
(i) the Trustee shall not be deemed to have notice of any default or
Event of Default unless an officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Securities and this Indenture.
SECTION 6.04. Not Responsible for Recitals or Issuance of Securities. The
recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities. The Trustee shall not be accountable for the use or
application by the Company of the Securities or the proceeds thereof.
SECTION 6.05. May Hold Securities. The Trustee, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may
45
<PAGE>
become the owner or pledgee of Securities and, subject to Sections 6.08 and
6.13, may otherwise deal with the Company with the same rights it would have if
it were not Trustee, Paying Agent, Security Registrar, or such other agent.
SECTION 6.06. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
SECTION 6.07. Compensation and Reimbursement. The Company agrees:
(1) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, fees, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith;
(3) to indemnify the Trustee and any predecessor Trustee for, and to
hold it harmless against, any and all loss, damage, claim, liability or
expense incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder; and
(4) the Trustee shall have a lien prior to the Securities as to all
property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section 6.07, except with
46
<PAGE>
respect to funds held in trust for the benefit of the Holders of particular
Securities.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 5.01(5) or Section 5.01(6), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 6.08. Disqualification; Conflicting Interests. If the Trustee has
or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Indenture.
SECTION 6.09. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder which shall be a Person that is eligible pursuant
to the Trust Indenture Act to act as such and has a combined capital and surplus
of at least $100,000,000 and has its Corporate Trust Office in New York, New
York. If such Person publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Person shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
SECTION 6.10. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 6.11.
47
<PAGE>
(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of removal, the Trustee being removed may petition, at the
expense of the Company, any court of competent jurisdiction for the appointment
of a successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.08 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company may remove the Trustee, or (ii) subject
to Section 5.14, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
48
<PAGE>
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
and supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee.
(f) The Company shall give written notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 1.06. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; provided, that on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments required to more fully and
certainly vest in and confirm to such successor Trustee all such rights, powers
and trusts.
49
<PAGE>
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 6.13. Preferential Collection of Claims Against Company. If and
when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Securities), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Company
(or any such other obligor).
ARTICLE VII
Holders' Lists and Reports by Trustee and Company
SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not later than February 15 and August 15 in each
year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of a date not more than 15 days prior
to the delivery thereof, and
50
<PAGE>
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 7.02. Preservation of Information; Communications to Holders. (a)
The Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of Holders contained in the most recent list furnished
to the Trustee as provided in Section 7.01 and the names and addresses of
Holders received by the Trustee in its capacity as Security Registrar. The
Trustee may destroy any list furnished to it as provided in Section 7.01 upon
receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 7.03. Reports by Trustee. (a) Within 60 days after May 15 of each
year, commencing in 1998, the Trustee shall transmit by first-class mail to
Holders such reports concerning the Trustee and its actions under this Indenture
as may be required pursuant to the Trust Indenture Act in the manner provided
pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which the
Securities are listed, with the Commission and with the Company. The Company
will promptly notify the Trustee when the Securities are listed on any stock
exchange.
51
<PAGE>
SECTION 7.04. Reports by Company. The Company shall file with the Trustee
and the Commission, and transmit to Holders, such information, documents and
other reports, and such summaries thereof, as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant to such
Act; provided, that any such information, documents or reports required to be
filed with the Commission pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 shall be filed with the Trustee within 15 days after the
same is so required to be filed with the Commission.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 7.05. Tax Reporting. The Company shall provide to the Trustee on a
timely basis such information as the Trustee requires to enable the Trustee to
prepare and file any form required to be submitted to the Internal Revenue
Service and the Holders relating to original issue discount, including, without
limitation, Form 1099-0ID or any successor form.
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.01. Company May Consolidate, Etc., Only on Certain Terms. The
Company shall not consolidate with or merge with or into any other Person or,
directly or indirectly, convey, transfer or lease all or substantially all of
its properties and assets on a consolidated basis to any Person, unless:
52
<PAGE>
(1) in case the Company shall consolidate with or merge with or into
another Person or convey, transfer or lease all or substantially all of its
properties and assets on a consolidated basis to any Person, the Person
formed by such consolidation or into which the Company is merged or the
Person which acquires by conveyance, transfer or lease, all or
substantially all of the properties and assets of the Company on a
consolidated basis shall be a corporation, partnership or trust, shall be
organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, the due and
punctual payment of the principal of and interest (including any Additional
Payments) on all the Securities and the performance or observance of every
covenant of this Indenture on the part of the Company to be performed or
observed and shall have provided for conversion rights in accordance with
Article XIII;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or a Subsidiary
as a result of such transaction as having been incurred by the Company or
such Subsidiary at the time of such transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing;
(3) such consolidation or merger or conveyance, transfer or lease of
assets of the Company is permitted under, and does not give rise to any
breach or violation of, the Declaration or the Guarantee; and
(4) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture, comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
53
<PAGE>
SECTION 8.02. Successor Substituted. Upon any consolidation of the Company
with, or merger of the Company into, any other Person or any conveyance,
transfer or lease of all or substantially all the properties and assets of the
Company on a consolidated basis in accordance with Section 8.01, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Holders. Without
the consent of any Holders, the Company, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article XIII; or
(4) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or
54
<PAGE>
questions arising under this Indenture which shall not be inconsistent with
the provisions of this Indenture; provided, that such action pursuant to
this clause (4) shall not adversely affect the interests of the Holders of
the Securities or, so long as any of the Preferred Securities shall remain
outstanding, the holders of the Preferred Securities;
(5) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act; or
(6) to make provision for transfer procedures, certification,
book-entry provisions, the form of restricted securities legends, if any,
to be placed on Securities, and all other matters required pursuant to
Section 3.05(b) or otherwise necessary, desirable or appropriate in
connection with the issuance of Securities to holders of Preferred
Securities in the event of a distribution of Securities by the Trust if a
Special Event occurs and is continuing.
SECTION 9.02. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(1) extend the Stated Maturity of the principal of, or any install-
ment of interest (including any Additional Payments) on, any Security, or
reduce the principal amount thereof, or reduce the rate or extend the time
for payment of interest thereon, or reduce any premium payable upon the
redemption thereof, or change the place of payment where, or the coin or
currency in which, any Security or interest thereon is payable, or impair
the right to institute suit for the enforcement
55
<PAGE>
of any such payment on or after the Stated Maturity thereof (or, in the
case of redemption, on or after the Redemption Date), or adversely affect
the right to convert any Security as provided in Article XIII (except as
permitted by Section 9.01(3)), or modify the provisions of this Indenture
with respect to the subordination of the Securities in a manner adverse to
the Holders,
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture,
or
(3) modify any of the provisions of this Section or Section 5.13,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby.
Notwithstanding anything to the contrary in this Indenture or the
Declaration, if the Property Trustee is the sole Holder of the Securities, so
long as any of the Preferred Securities remains outstanding, no amendment shall
be made that adversely affects the holders of such Preferred Securities, and no
termination of this Indenture shall occur, and no waiver of any Event of Default
or compliance with any covenant under this Indenture shall be effective, without
the prior consent of the holders of the percentage of the aggregate liquidation
preference of such Preferred Securities then outstanding which is at least equal
to the percentage of aggregate stated liquidation preference of the Outstanding
Securities as shall be required under this Indenture to effect any such
amendment, termination or waiver.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
56
<PAGE>
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
canceled and of no further effect.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby. No such
supplemental indenture shall directly or indirectly modify the provisions of
Article XII in any manner which might terminate or impair the rights of the
Senior Indebtedness pursuant to such subordination provisions.
SECTION 9.05. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act.
57
<PAGE>
SECTION 9.06. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Securities
so modified as to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.
ARTICLE X
Covenants; Representations and Warranties
SECTION 10.01. Payment of Principal and Interest. The Company will duly
and punctually pay the principal of and interest on the Securities in accordance
with the terms of the Securities and this Indenture.
SECTION 10.02. Maintenance of Office or Agency. The Company will maintain
in the United States an office or agency where Securities may be presented or
surrendered for payment, where Securities may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies (in the United States) where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its
58
<PAGE>
obligation to maintain an office or agency in the United States for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 10.03. Money for Security Payments to Be Held in Trust. If the
Company shall at any time act as its own Paying Agent, it will, on or before
each due date of the principal of or interest on any of the Securities,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, prior
to each due date of the principal of or interest on any Securities, deposit with
a Paying Agent a sum sufficient to pay the principal or interest so becoming
due, such sum to be held as provided by the Trust Indenture Act, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will (i) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent and (ii) during the continuance of any default by the
Company (or any other obligor upon the Securities) in the making of any payment
in respect of the Securities, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent as such.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
59
<PAGE>
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or interest on any
Security and remaining unclaimed for two years after such principal or interest
has become due and payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of any such Security shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease.
SECTION 10.04. Statement by Officers as to Default. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company ending after the date hereof, an Officers' Certificate, stating whether
or not to the best knowledge of the signers thereof the Company is in default in
the performance and observance of any of the material terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
they may have knowledge. The Company shall deliver to the Trustee, as soon as
possible and in any event within five days after the Company becomes aware of
the occurrence of any Event of Default or an event which, with notice or the
lapse of time or both, would constitute an Event or Default, an Officers'
Certificate setting forth the details of such Event of Default or default and
the action which the Company proposes to take with respect thereto.
SECTION 10.05. Limitation on Dividends; Transactions with Affiliates;
Covenants as to the Trust. (a) The Company covenants that the Company (i) shall
not declare or pay dividends on, make distributions with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect to, any of its
capital stock (other than stock dividends paid by the Company which consist of
stock of the same class as that on which the dividend is being paid and other
than any declaration of a dividend in connection with the implementation of a
stockholders' rights
60
<PAGE>
plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto), (ii) shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Company that rank pari
passu with or junior to the Securities, and (iii) shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Guarantee),
in each case if at such time (i) there shall have occurred any event that with
the giving of notice or the lapse of time or both, would constitute an Event of
Default hereunder, (ii) the Company shall be in default with respect to its
payment of any obligations under the Guarantee or (iii) the Company shall have
given notice of its selection of an Extended Interest Payment Period as provided
herein and such period, or any extension thereof, shall be continuing.
(b) The Company also covenants and agrees (i) that it shall directly or
indirectly maintain 100% ownership of the Common Securities of the Trust;
provided, however, that any permitted successor of the Company hereunder shall
succeed to the Company's ownership of such Common Securities and (ii) that it
shall use its reasonable efforts, consistent with the terms and provisions of
the Declaration, to cause the Trust (x) to remain a statutory business trust,
except in connection with the distribution of the Securities to the holders of
Trust Securities in liquidation of the Trust, the redemption of all of the Trust
Securities of the Trust, or certain mergers, consolidations or amalgamations,
each as permitted by the Declaration, and (y) to otherwise continue to be
classified as a grantor trust for United States Federal income tax purposes.
SECTION 10.06. Payment of Expenses of the Trust. In connection with the
offering, sale and issuance of the Securities to the Property Trustee in
connection with the sale of the Trust Securities by the Trust, the Company
shall:
(a) pay for all costs, fees and expenses relating to the offering,
sale and issuance of the Securities, including placement fees to the
Placement Agent payable pursuant to the Placement Agreement and
compensation of the Trustee under the Indenture in accordance with the
provisions of Section 6.07 of this Indenture;
61
<PAGE>
(b) be responsible for and pay for all debts and obligations (other
than with respect to the Trust Securities) of the Trust, pay for all costs
and expenses of the Trust (including, but not limited to, costs and
expenses relating to the organization of the Trust, the offering, sale and
issuance of the Trust Securities (including placement fees to the Placement
Agent in connection therewith), the fees and expenses of the Property
Trustee and the Delaware Trustee, the costs and expenses relating to the
operation of the Trust, including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying
agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and expenses
incurred in connection with the acquisition, financing, and disposition of
Trust assets); and
(c) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
SECTION 10.07. Registration Rights. The holders of the Preferred
Securities, the Securities and the Guarantee are entitled to the
benefits of a Registration Rights Agreement, dated as of June 12, 1997, among
the Company, the Trust and the Purchasers (the "Registration Rights Agreement").
Pursuant to the Registration Rights Agreement the Company has agreed for the
benefit of the holders of the Preferred Securities, the Securities and the
Guarantee that (i) it will, at its cost, prior to August 15, 1997 file a shelf
registration statement (the "Shelf Registration Statement") with the Commission
with respect to resales of the Preferred Securities, together with the
Securities, the Guarantee and the related Common Stock issuable upon conversion
thereof, (ii) prior to December 15, 1997, such Shelf Registration Statement
shall be declared effective by the Commission and (iii) the Company will
maintain such Shelf Registration Statement continuously effective under the
Securities Act of 1933, as amended, for so long as shall be required under Rule
144(k) thereunder or any successor rule or regulation thereto or such earlier
date as is provided in the Registration Rights Agreement.
62
<PAGE>
If the Company fails to comply with any of clauses (i) through (iii) above (a
"Registration Default") then, at such time, the per annum interest rate on the
Securities will increase by 50 basis points (.50%); provided, however, that if
the Registration Default consists of the occurrence of any event contemplated by
paragraph 3(c)(2)(iii) of the Registration Rights Agreement, such Registration
Default shall not be deemed to have occurred until the expiration of 30 days
after the date of the occurrence of such event if such event is an action taken
by the Company in good faith and for valid business reasons and the Trust and
the Company thereafter promptly comply with the requirements of paragraph 3(i)
of the Registration Rights Agreement. Such increase will remain in effect from
and including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured, on which
date the interest rate on the Securities will revert to the interest rate
originally borne by the Securities.
ARTICLE XI
Redemption of Securities
SECTION 11.01. Right of Redemption. (a) The Securities may be redeemed at
the election of the Company, as a whole or in part, at any time or from time to
time after June 1, 2000, at the Redemption Prices set forth in Section 11.09
below.
(b) The Securities may be redeemed as a whole but not in part at the
election of the Company at any time within 90 days following the occurrence of a
Tax Event in accordance with Section 11.10; provided, however, that if, at the
time there is available to the Company or the Trust the opportunity to
eliminate, within such 90-day period, the Tax Event by taking some ministerial
action, including but not limited to filing a form or making an election, or
pursuing some other similar reasonable measure, which, in the sole judgment of
the Company, has or will cause no adverse effect on the Trust or the Company or
involves or will involve no material cost, then the Company or the Trust shall
pursue such measure in lieu of redemption.
63
<PAGE>
SECTION 11.02. Applicability of Article. Redemption of Securities at the
election of the Company, as permitted by Section 11.01, shall be made in
accordance with such provision and this Article.
SECTION 11.03. Election to Redeem; Notice to Trustee. The election of the
Company to redeem Securities pursuant to Section 11.01 shall be evidenced by a
Board Resolution. In case of any redemption at the election of the Company, the
Company shall, at least 60 days and no more than 90 days prior to the Redemption
Date fixed by the Company, notify the Trustee in writing of such Redemption Date
and of the principal amount of Securities to be redeemed and provide a copy of
the notice of redemption given to Holders of Securities to be redeemed pursuant
to Section 11.04.
SECTION 11.04. Selection by Trustee of Securities to Be Redeemed. If less
than all the Securities are to be redeemed (unless such redemption affects only
a single Security), the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities not previously called for redemption, pro rata from each
Holder in accordance with the aggregate principal amounts of Securities held, by
such method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions (equal to $50 or any integral
multiple thereof) of the principal amount of the Securities.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption as aforesaid and, in case of any Securities selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with respect
to any redemption affecting only a single Security, whether such Security is to
be redeemed in whole or in part. In the case of any such redemption in part, the
unredeemed portion of the principal amount of the Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security.
64
<PAGE>
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 11.05. Notice of Redemption. Notice of redemption shall be given
by first-class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date, to each Holder of Securities to be redeemed,
at such Holder's address appearing in the Security Register.
All notices of redemption shall identify the Securities to be redeemed
(including, if relevant, CUSIP or ISIN number) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after said date, and
(4) the place or places where such Securities are to be surrendered
for payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 11.06. Deposit of Redemption Price. Prior to any Redemption Date,
the Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.03) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date.
65
<PAGE>
If any Security called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or so segregated and held in trust for
the redemption of such Security shall (subject to any right of the Holder of
such Security or any Predecessor Security to receive interest as provided in the
last paragraph of Section 3.07) be paid to the Company upon Company Request or,
if then held by the Company, shall be discharged from such trust.
SECTION 11.07. Securities Payable on Redemption Date. Notice of redemption
having been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) such Securities shall
cease to bear interest. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest (including Additional Payments,
if any) to the Redemption Date; provided, however, that installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to the terms and the provisions of Section 3.07.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid, bear interest from the
Redemption Date at the rate borne by the Security.
SECTION 11.08. Securities Redeemed in Part. In the event of any redemption
in part, the Company shall not be required to (i) issue, register the transfer
of or exchange any Security during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of Securities
and ending at the close of business on the earliest date in which the relevant
notice of redemption is deemed to have been given to all holders of Securities
to be so redeemed and (ii) register the transfer of or exchange any Securities
so selected for redemption, in whole or in part, except for the unredeemed
portion of any Securities being redeemed in part.
66
<PAGE>
Any Security which is to be redeemed only in part shall be surrendered at a
place of payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered.
SECTION 11.09. Optional Redemption. (a) The Company shall have the right
to redeem the Securities, in whole or in part, at any time or from time to time
on or after June 1, 2000, upon not less than 30 nor more than 60 days' notice,
at the following Redemption Prices per $50 principal amount of the Securities to
be redeemed plus any accrued and unpaid interest, including Additional Payments,
if any, to the Redemption Date, if redeemed during the 12-month period ending
June 1:
Year Price Per $50
Principal
Amount
2001 ....................................... $52.51
2002 ....................................... $52.15
2003........................................ $51.79
2004........................................ $51.43
2005........................................ $51.07
2006........................................ $50.72
2007........................................ $50.36
and thereafter at $50 per $50 principal amount of the Securities plus, in each
case, accrued and unpaid interest, including Additional Payments, if any, to the
Redemption Date. Any redemption pursuant to this Section 11.09 shall be made
pursuant to the provisions of Sections 11.01 through 11.08 hereof.
(b) If a partial redemption of the Securities would result in the
delisting of the Preferred Securities issued by the Trust from any national
securities exchange or
67
<PAGE>
other organization on which the Preferred Securities are listed, the Company
shall not be permitted to effect such partial redemption and may only redeem the
Securities in whole.
SECTION 11.10. Tax Event Redemption. If a Tax Event has occurred and is
continuing and:
(a) the Company has received a Redemption Tax Opinion; or
(b) the Trustee shall have been informed by tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, then, notwithstanding
Section 11.09(a) but subject to Section 11.09(b), the Company shall have
the right upon not less than 30 days nor more than 60 days notice to the
Holders of the Securities to redeem the Securities in whole or in part for
cash at $50 per $50 principal amount of the Securities plus accrued and
unpaid interest, including Additional Payments, if any, within 90 days
following the occurrence of such Tax Event (the "90 Day Period"); provided,
however, that if, at the time there is available to the Company or the
Trust the opportunity to eliminate within the 90 Day Period, the Tax Event
by taking some ministerial action, including, but not limited to, filing a
form or making an election, or pursuing some other similar reasonable
measure which, in the sole judgment of the Company, will have no adverse
effect on the Company, the Trust or the Holders of the Trust Securities
issued by the Trust and will involve no material cost, then the Company or
the Trust shall pursue such ministerial action or other measure in lieu of
redemption, and provided, further, that the Company shall have no right to
redeem the Securities while the Trust is pursuing any ministerial action or
other similar measure pursuant to its obligations under the Declaration.
The redemption payment of $50 per $50 principal amount of the Securities
plus accrued and unpaid interest, including Additional Payments, if any,
shall be made prior to 12:00 noon, New York time, on the date of such
redemption or such earlier time as the Company determines provided that the
Company shall deposit with the Trustee an amount sufficient to make such
redemption payment by 10:00 a.m. on the date such redemption payment is to
be made.
68
<PAGE>
ARTICLE XII
Subordination of Securities
SECTION 12.01. Agreement to Subordinate. The Company covenants and agrees,
and each Holder of Securities by such Holder's acceptance thereof likewise
covenants and agrees, that all Securities shall be issued subject to the
provisions of this Article XII; and each Holder of a Security, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions. The payment by the Company of the principal of,
premium, if any, and interest (including Additional Payments) on all Securities
issued hereunder shall, to the extent and in the manner hereinafter set forth,
be subordinated and junior in right of payment to the prior payment in full of
all Senior Indebtedness, whether outstanding at the date of this Indenture or
thereafter incurred; provided, however, that no provision of this Article XII
shall prevent the occurrence of any default or Event of Default hereunder.
SECTION 12.02. Default on Senior Indebtedness. In the event and during the
continuation of any default by the Company in the payment of principal, premium,
interest or any other payment due on any Senior Indebtedness continuing beyond
the period of grace, if any, specified in the instrument evidencing such Senior
Indebtedness, unless and until such default shall have been cured or waived or
shall have ceased to exist, and in the event that the maturity of any Senior
Indebtedness has been accelerated because of a default, then no payment shall be
made by the Company with respect to the principal of (including redemption
payments), premium, if any, or interest on the Securities.
In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee when such payment is prohibited by the
preceding paragraph of this Section 12.02, such payment shall be held
in trust for the benefit of, and shall be paid over or delivered to,
the holders of Senior Indebtedness or their respective representatives,
or to the trustee or trustees under any indenture pursuant to which any of such
Senior Indebtedness may have been issued, as their respective interests may
appear, but only to the extent that the holders of the Senior Indebted-
69
<PAGE>
ness (or their representative or representatives or a trustee) notify the
Trustee in writing within 90 days of such payment of the amounts then due and
owing on the Senior Indebtedness and only the amounts specified in such notice
to the Trustee shall be paid to the holders of Senior Indebtedness.
SECTION 12.03. Liquidation; Dissolution; Bankruptcy. Upon any payment by
the Company or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution or
winding up or liquidation or reorganization of the Company, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings,
all amounts (including principal, premium, if any, and interest) due or to
become due upon all Senior Indebtedness shall first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any payment
is made on account of the principal (and premium, if any) or interest on the
Securities; and upon any such dissolution or winding up or liquidation or
reorganization, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Holders of the Securities or the Trustee would be entitled, except for
the provisions of this Article XII, shall be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders of the Securities or by
the Trustee under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, as calculated by
the Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay such Senior Indebtedness in full, in
money or money's worth, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders of Securities or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities,
70
<PAGE>
prohibited by the foregoing, shall be received by the Trustee or the Holders of
the Securities before all Senior Indebtedness is paid in full, or provision is
made for such payment in money in accordance with its terms, such payment or
distribution shall be held in trust for the benefit of and shall be paid over or
delivered to the holders of Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
and their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay such Senior Indebtedness in full in money in accordance
with its terms, after giving effect to any concurrent payment or distribution to
or for the holders of such Senior Indebtedness.
For purposes of this Article XII, the words, "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article XII with respect to
the Securities to the payment of all Senior Indebtedness which may at the time
be outstanding; provided, that (i) such Senior Indebtedness is assumed by the
new corporation, if any, resulting from any such reorganization or readjustment,
and (ii) the rights of the holders of such Senior Indebtedness are not, without
the consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company with or into,
another Person or the liquidation or dissolution of the Company following the
conveyance, transfer or lease of all or substantially all its properties and
assets on a consolidated basis to another Person upon the terms and conditions
provided for in Article VIII hereof shall not be deemed a dissolution, winding
up, liquidation or reorganization for the purposes of this Section 12.03 if such
other Person shall, as a part of such consolidation, merger, conveyance,
transfer or lease, comply with the conditions stated in Article VIII hereof.
Nothing in Section 12.02 or in this Section 12.03 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.07 hereof.
71
71
<PAGE>
SECTION 12.04. Subrogation. Subject to the payment in full of all Senior
Indebtedness, the rights of the Holders of the Securities shall be subrogated to
the rights of the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company, as the case may
be, applicable to such Senior Indebtedness until the principal of (and premium,
if any,) and interest on the Securities shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the holders of
such Senior Indebtedness of any cash, property or securities to which the
Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article XII, and no payment over pursuant to the provisions
of this Article XII, to or for the benefit of the holders of such Senior
Indebtedness by Holders of the Securities or the Trustee, shall, as between the
Company, its creditors other than holders of Senior Indebtedness, and the
Holders of the Securities, be deemed to be a payment by the Company to or on
account of such Senior Indebtedness. It is understood that the provisions of
this Article XII are and are intended solely for the purposes of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of such Senior Indebtedness on the other hand.
Nothing contained in this Article XII or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of (and premium, if any)
and interest on the Securities as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the Company, as the
case may be, other than the holders of Senior Indebtedness, nor shall anything
herein or therein prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article XII of the
holders of such Senior Indebtedness in respect of cash, property or securities
of the Company, as the case may be, received upon the exercise of any such
remedy.
72
2
<PAGE>
Upon any payment or distribution of assets of the Company referred to in
this Article XII, the Trustee, subject to the provisions of Section 6.03, and
the Holders of the Securities, shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the Holders of the Securities, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article XII.
SECTION 12.05. Trustee to Effectuate Subordination. Each Holder of
Securities by such Holder's acceptance thereof authorizes and directs the
Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article XII and
appoints the Trustee as such Holder's attorney-in-fact for any and all such
purposes.
SECTION 12.06. Notice by the Company. The Company shall give prompt
written notice to a Responsible Officer of the Trustee of any fact known to the
Company which would prohibit the making of any payment of monies to or by the
Trustee in respect of the Securities pursuant to the provisions of this Article
XII. Notwithstanding the provisions of this Article XII or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment of monies
to or by the Trustee in respect of the Securities pursuant to the provisions of
this Article XII, unless and until a Responsible Officer of the Trustee shall
have received written notice thereof at the Corporate Trust Office of the
Trustee from the Company or a holder or holders of Senior Indebtedness or from
any trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 6.03 hereof, shall be entitled in
all respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this
73
<PAGE>
Section 12.06 at least two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (and premium, if any) or interest on
any Security), then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purposes for which they were received, and shall not be
affected by any notice to the contrary which may be received by it within two
Business Days prior to such date.
The Trustee, subject to the provisions of Section 6.03, shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a holder of Senior Indebtedness (or a trustee on behalf of such
holder) to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article XII, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the right of such
Person under this Article XII, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 12.07. Rights of the Trustee: Holders of Senior Indebtedness. The
Trustee in its individual capacity shall be entitled to all the rights set forth
in this Article XII in respect of any Senior Indebtedness at any time held by
it, to the same extent as any other holder of Senior Indebtedness, and nothing
in this Indenture shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are set forth in this Article XII, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into this Indenture against the
74
<PAGE>
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of such Senior Indebtedness and, subject to the provisions of Section
6.03, the Trustee shall not be liable to any holder of such Senior Indebtedness
if it shall pay over or deliver to Holders of Securities, the Company or any
other Person money or assets to which any holder of such Senior Indebtedness
shall be entitled by virtue of this Article XII or otherwise.
SECTION 12.08. Subordination May Not Be Impaired. No right of any present
or future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the holders of the Securities and without
impairing or releasing the subordination provided in this Article XII or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
75
<PAGE>
ARTICLE XIII
Conversion of Securities
SECTION 13.01. Conversion Rights. Subject to and upon compliance with the
provisions of this Article, the Securities are convertible, at the option of the
Holder, at any time on or before redemption as provided below or the close of
business at their Stated Maturity, into fully paid and nonassessable shares of
Common Stock of the Company at an initial conversion rate of 1.2903 shares of
Common Stock for each $50 in aggregate principal amount of Securities (equal to
a conversion price of $38.75 per share of Common Stock), subject to adjustment
as described in this Article XIII. A Holder of Securities may convert any
portion of the principal amount of the Securities into that number of fully paid
and nonassessable shares of Common Stock (calculated as to each conversion to
the nearest 1/100th of a share) obtained by dividing the principal amount of the
Securities to be converted by such conversion price. In case a Security or
portion thereof is called for redemption, such conversion right in respect of
the Security or portion so called shall expire at the close of business on the
corresponding Redemption Date, unless the Company defaults in making the payment
due upon redemption.
SECTION 13.02. Conversion Procedures. (a) In order to convert all or a
portion of the Securities, the Holder thereof shall deliver to the Conversion
Agent an irrevocable Notice of Conversion setting forth the principal amount of
Securities to be converted, together with the name or names, if other than the
Holder, in which the shares of Common Stock should be issued upon conversion
and, if such Securities are definitive Securities, surrender to the Conversion
Agent the Securities to be converted, duly endorsed or assigned to the Company
or in blank. In addition, a holder of Preferred Securities may exercise its
right under the Declaration to convert such Preferred Securities into Common
Stock by delivering to the Conversion Agent an irrevocable Notice of Conversion
setting forth the information called for by the preceding sentence and directing
the Conversion Agent (i) to exchange such Preferred Security for a portion of
the Securities held by the Trust (at an exchange rate of $50 principal amount of
Securities for each Preferred Security) and (ii) to immediately convert such
Securities, on behalf of such holder, into Common Stock
76
<PAGE>
of the Company pursuant to this Article XIII and, if such Preferred Securities
are in definitive form, surrendering such Preferred Securities, duly endorsed or
assigned to the Company or in blank. So long as any Preferred Securities are
outstanding, the Trust shall not convert any Securities except pursuant to a
Notice of Conversion duly executed and delivered to the Conversion Agent by a
holder of Preferred Securities.
If a Notice of Conversion is delivered on or after the Regular Record Date
and prior to the subsequent Interest Payment Date, the Holder will be entitled
to receive the interest payable on the subsequent Interest Payment Date on the
portion of Securities to be converted notwithstanding the conversion thereof
prior to such Interest Payment Date. Except as otherwise provided in the
immediately preceding sentence, in the case of any Security which is converted,
interest whose Stated Maturity is after the date of conversion of such Security
shall not be payable, and the Company shall not make nor be required to make any
other payment, adjustment or allowance with respect to accrued but unpaid
interest on the Securities being converted, which shall be deemed to be paid in
full. Each conversion shall be deemed to have been effected immediately prior to
the close of business on the day on which the Notice of Conversion was received
(the "Conversion Date") by the Conversion Agent from the Holder or from a holder
of the Preferred Securities effecting a conversion thereof pursuant to its
conversion rights under the Declaration, as the case may be. The Person or
Persons entitled to receive the Common Stock issuable upon such conversion shall
be treated for all purposes as the record holder or holders of such Common Stock
as of the Conversion Date. As promptly as practicable on or after the Conversion
Date, the Company shall issue and deliver at the office of the Conversion Agent,
unless otherwise directed by the Holder in the Notice of Conversion, a
certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion, together with the cash payment, if any, in lieu
of any fraction of any share to the Person or Persons entitled to receive the
same. The Conversion Agent shall deliver such certificate or certificates to
such Person or Persons.
(b) The Company's delivery upon conversion of the fixed number of shares
of Common Stock into which the Securities are convertible (together with the
cash payment, if
77
<PAGE>
any, in lieu of fractional shares) shall be deemed to satisfy the Company's
obligation to pay the principal amount at Maturity of the portion of Securities
so converted and any unpaid interest (including Compounded Interest and
Additional Interest) accrued on such Securities at the time of such conversion.
(c) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, the Company shall pay to the Conversion Agent a
cash adjustment in an amount equal to the same fraction of the current market
price of such fractional interest on the date on which the Securities or
Preferred Securities, as the case may be, were duly surrendered to the
Conversion Agent for conversion, or, if such day is not a Trading Day, on the
next Trading Day, and the Conversion Agent in turn will make such payment, if
any, to the Holder of the Securities or the holder of the Preferred Securities
so converted.
(d) In the event of the conversion of any Security in part only, a new
Security or Securities for the unconverted portion thereof will be issued in the
name of the Holder thereof upon the cancelation thereof in accordance with
Section 3.05.
(e) In effecting the conversion transactions described in this Section,
the Conversion Agent is acting as agent of the holders of Preferred Securities
(in the exchange of Preferred Securities for Securities) and as agent of the
Holders of Securities (in the conversion of Securities into Common Stock), as
the case may be, directing it to effect such conversion transactions. The
Conversion Agent is hereby authorized (i) to exchange Securities held by the
Trust from time to time for Preferred Securities in connection with the
conversion of such Preferred Securities in accordance with this Article XIII and
(ii) to convert all or a portion of the Securities into Common Stock and
thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Article XIII and to deliver to the Trust a new Security or
Securities for any resulting unconverted principal amount.
(f) All shares of Common Stock delivered upon any conversion of Restricted
Securities shall bear a restrictive legend substantially in the form of the
legend required to be set forth on such Securities and shall be subject to the
78
<PAGE>
restrictions on transfer provided in such legend and in Section 3.05(b) hereof.
Neither the Trustee nor the Conversion Agent shall have any responsibility for
the inclusion or content of any such restrictive legend on such Common Stock;
provided, however, that the Trustee or the Conversion Agent shall have provided
to the Company or to the Company's transfer agent for such Common Stock, prior
to or concurrently with a request to the Company to deliver to such Conversion
Agent certificates for such Common Stock, written notice that the Securities
delivered for conversion are Restricted Securities.
SECTION 13.03. Conversion Price Adjustments. The conversion price shall be
subject to adjustment (without duplication) from time to time as follows:
(i) In case the Company shall pay or make a dividend or other
distribution on any class or series of capital stock of the Company
exclusively in Common Stock, the conversion price in effect at the opening
of business on the day following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution shall
be reduced by multiplying such conversion price by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number
of shares constituting such dividend or other distribution, such reduction
to become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
subparagraph (i), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company.
The Company shall not pay any dividend or make any distribution exclusively
in Common Stock on shares of any class or series of capital stock of the
Company held in the treasury of the Company. In the event that such
dividend or distribution is not so paid or made, the conversion price shall
again be adjusted to be the conversion price which would then be in effect
if such dividend or distribution had not occurred.
(ii) In case the Company shall pay or make a dividend or other
distribution on its Common Stock
79
<PAGE>
consisting exclusively of, or shall otherwise issue to all holders of its
Common Stock, rights or warrants, in each case entitling the holders
thereof to subscribe for or purchase shares of Common Stock at a price per
share less than the current market price per share (determined as provided
in subparagraph (vii)) of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights or warrants,
the conversion price in effect at the opening of business on the day
following the date fixed for such determination shall be reduced by
multiplying such conversion price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares
of Common Stock which the aggregate of the offering price of the total
number of shares of Common Stock so offered for subscription or purchase
would purchase at such current market price and the denominator shall be
the number of shares of Common Stock outstanding at the close of business
on the date fixed for such determination plus the number of shares of
Common Stock so offered for subscription or purchase, such reduction to
become effective immediately after the opening of business on the day
following the date fixed for such determination. To the extent that shares
of Common Stock are not so delivered after the expiration of such rights or
warrants, the conversion price shall be readjusted to the conversion price
which would then be in effect if such date fixed for the determination of
stockholders entitled to receive such rights or warrants had not been
fixed. For the purposes of this subparagraph (ii), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company. The Company shall not issue any rights or warrants
in respect of shares of Common Stock held in the treasury of the Company.
In case any rights or warrants referred to in this subparagraph (ii) in
respect of which an adjustment shall have been made shall expire
unexercised within 45 days after the same shall have been distributed or
issued by the Company, the conversion price shall be readjusted at the time
of such expiration to the conversion price that would have been in effect
if no adjustment had been made on account of the distribution or issuance
of such expired rights or warrants.
80
<PAGE>
(iii) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the conversion price in
effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced and,
conversely, in case outstanding shares of Common Stock shall each be
combined into a smaller number of shares of Common Stock, the conversion
price in effect at the opening of business on the day following the day
upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become
effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(iv) Subject to the last sentence of this subparagraph (iv), in case
the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock evidences of its indebtedness, shares of any class or
series of capital stock, cash or assets (including securities, but
excluding any rights or warrants referred to in subparagraph (ii), any
dividend or distribution paid exclusively in cash and any dividend or
distribution referred to in subparagraph (i) of this Section 13.03), the
conversion price shall be reduced so that the same shall equal the price
determined by multiplying the conversion price in effect immediately prior
to the effectiveness of the conversion price reduction contemplated by this
subparagraph (iv) by a fraction of which the numerator shall be the current
market price per share (determined as provided in subparagraph (vii)) of
the Common Stock on the date fixed for the payment of such distribution
(the "Reference Date") less the fair market value (as determined in good
faith by the Board of Directors, whose determination shall be conclusive
and described in a resolution of the Board of Directors), on the Reference
Date, of the portion of the evidences of indebtedness, shares of capital
stock, cash and assets so distributed applicable to one share of Common
Stock and the denominator shall be such current market price per share of
the Common Stock, such reduction to become effective immediately prior to
the opening of business on the day following the Reference Date. In the
event that such
81
<PAGE>
dividend or distribution is not so paid or made, the conversion price shall
again be adjusted to be the conversion price which would then be in effect
if such dividend or distribution had not occurred. If the Board of
Directors determines the fair market value of any distribution for purposes
of this subparagraph (iv) by reference to the actual or when issued trading
market for any securities comprising such distribution, it must in doing so
consider the prices in such market over the same period used in computing
the current market price per share of Common Stock (determined as provided
in subparagraph (vii)). For purposes of this subparagraph (iv), any
dividend or distribution that includes shares of Common Stock or rights or
warrants to subscribe for or purchase shares of Common Stock shall be
deemed instead to be (1) a dividend or distribution of the evidences of
indebtedness, shares of capital stock, cash or assets other than such
shares of Common Stock or such rights or warrants (making any conversion
price reduction required by this subparagraph (iv)) immediately followed by
(2) a dividend or distribution of such shares of Common Stock or such
rights or warrants (making any further conversion price reduction required
by subparagraph (i) or (ii)), except (A) the Reference Date of such
dividend or distribution as defined in this subparagraph (iv) shall be
substituted as (a) "the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution," (b) "the date
fixed for the determination of stockholders entitled to receive such rights
or warrants" and (c) "the date fixed for such determination" within the
meaning of subparagraphs (i) and (ii) and (B) any shares of Common Stock
included in such dividend or distribution shall not be deemed "outstanding
at the close of business on the date fixed for such determination" within
the meaning of subparagraph (i).
(v) In case the Company shall pay or make a dividend or other
distribution on its Common Stock exclusively in cash (excluding, in the
case of any regular cash dividend on the Common Stock, the portion thereof
that does not exceed the per share amount of the next preceding regular
cash dividend on the Common Stock (as adjusted to appropriately reflect any
of the events referred to in subparagraphs (i), (ii), (iii), (iv), (v) and
(vi)), or all of such regular cash divi-
82
<PAGE>
dend if the annualized amount thereof per share of Common Stock does not
exceed 15% of the current market price per share (determined as provided in
subparagraph (vii)) of the Common Stock on the Trading Day next preceding
the date of declaration of such dividend, the conversion price shall be
reduced so that the same shall equal the price determined by multiplying
the conversion price in effect immediately prior to the effectiveness of
the conversion price reduction contemplated by this subparagraph (v) by a
fraction of which the numerator shall be the current market price per share
(determined as provided in subparagraph (vii)) of the Common Stock on the
date fixed for the payment of such distribution less the amount of cash so
distributed and not excluded as provided applicable to one share of Common
Stock and the denominator shall be such current market price per share of
the Common Stock, such reduction to become effective immediately prior to
the opening of business on the day following the date fixed for the payment
of such distribution; provided, however, that in the event the portion of
the cash so distributed applicable to one share of Common Stock is equal to
or greater than the current market price per share (as defined in
subparagraph (vii)) of the Common Stock on the record date mentioned above,
in lieu of the foregoing adjustment, adequate provision shall be made so
that each Holder of Securities shall have the right to receive upon
conversion the amount of cash such Holder would have received had such
Holder converted each Security immediately prior to the record date for the
distribution of the cash. In the event that such dividend or distribution
is not so paid or made, the conversion price shall again be adjusted to be
the conversion price which would then be in effect if such record date had
not been fixed.
(vi) In case a tender or exchange offer (other than an odd-lot offer)
made by the Company or any Subsidiary of the Company for all or any portion
of the Company's Common Stock shall expire and such tender or exchange
offer shall involve the payment by the Company or such Subsidiary of
consideration per share of Common Stock having a fair market value (as
determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of
Directors) at the last time (the
83
<PAGE>
"Expiration Time") tenders or exchanges may be made pursuant to such tender
or exchange offer (as it shall have been amended) that exceeds 110% of the
current market price per share (determined as provided in subparagraph
(vii)) of the Common Stock on the Trading Day next succeeding the
Expiration Time, the conversion price shall be reduced so that the same
shall equal the price determined by multiplying the conversion price in
effect immediately prior to the effectiveness of the conversion price
reduction contemplated by this subparagraph (vi) by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) at the Expiration Time
multiplied by the current market price per share (determined as provided in
subparagraph (vii)) of the Common Stock on the Trading Day next succeeding
the Expiration Time and the denominator shall be the sum of (x) the fair
market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration Time
(the shares deemed so accepted, up to any such maximum, being referred to
as the "Purchased Shares") and (y) the product of the number of shares of
Common Stock outstanding (less any Purchased Shares) at the Expiration Time
and the current market price per share (determined as provided in
subparagraph (vii)) of the Common Stock on the Trading Day next succeeding
the Expiration Time, such reduction to become effective immediately prior
to the opening of business on the day following the Expiration Time.
(vii) For the purpose of any computation under subparagraphs (ii),
(iv), (v) and (vi), the current market price per share of Common Stock on
any date in question shall be deemed to be the average of the daily Closing
Prices for the five consecutive Trading Days selected by the Company
commencing not more than twenty (20) Trading Days before, and ending not
later than, the earlier of the day in question and, if applicable, the day
before the "ex" date with respect to the issuance or distribution requiring
such computation; provided, however, that if another event occurs that
would require an adjustment pursuant to subparagraph
84
<PAGE>
(i) through (vi), inclusive, the Board of Directors may make such
adjustments to the Closing Prices during such five Trading Day period as it
deems appropriate to effectuate the intent of the adjustments in this
Section 13.03, in which case any such determination by the Board of
Directors shall be set forth in a Board Resolution and shall be conclusive.
For purposes of this paragraph, the term "ex" date, (1) when used with
respect to any issuance or distribution, means the first date on which the
Common Stock is quoted regular way on the National Market System of the
National Association of Securities Dealers, Inc. (the "NNM") or on such
successor securities exchange as the Common Stock may be quoted or listed
or in the relevant market from which the Closing Prices were obtained
without the right to receive such issuance or distribution, and (2) when
used with respect to any tender or exchange offer means the first date on
which the Common Stock is quoted regular way on such securities exchange or
in such market after the Expiration Time of such offer.
(viii) The Company may make such reductions in the conversion price,
in addition to those required by subparagraphs (i), (ii), (iii), (iv), (v)
and (vi), as it considers to be advisable to avoid or diminish any income
tax to holders of Common Stock or rights to purchase Common Stock resulting
from any dividend or distribution of stock (or rights to acquire stock) or
from any event treated as such for income tax purposes.
(ix) No adjustment in the conversion price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
conversion price; provided, however, that any adjustments which by reason
of this subparagraph (ix) are not required to be made shall be carried
forward and taken into account in determining whether any subsequent
adjustment shall be required.
(x) If any action would require adjustment of the conversion price
pursuant to more than one of the provisions described above, only one
adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value to the Holder of the
Securities.
85
<PAGE>
SECTION 13.04. Reclassification, Consolidation, Merger or Sale of Assets.
In the event that the Company shall be a party to any transaction (including
without limitation (a) any recapitalization or reclassification of the Common
Stock (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or combination
of the Common Stock), (b) any consolidation of the Company with, or merger of
the Company into, any other Person, any merger of another Person into the
Company (other than a merger which does not result in a reclassification,
conversion, exchange or cancelation of outstanding shares of Common Stock of the
Company), (c) any sale or transfer of all or substantially all of the assets of
the Company or (d) any compulsory share exchange) pursuant to which the Common
Stock is converted into the right to receive other securities, cash or other
property, then lawful provision shall be made as part of the terms of such
transaction whereby the Holder of each Security then outstanding shall have the
right thereafter to convert such Security only into (i) in the case of any such
transaction other than a Common Stock Fundamental Change, the kind and amount of
securities, cash and other property receivable upon consummation of such
transaction by a holder of the number of shares of Common Stock of the Company
into which such Security could have been converted immediately prior to such
transaction, after giving effect, in the case of any Non-Stock Fundamental
Change, to any adjustment in the conversion price required by the provision of
Section 13.07(a)(i), and (ii) in the case of a Common Stock Fundamental Change,
common stock of the kind received by holders of Common Stock as a result of such
Common Stock Fundamental Change in an amount determined pursuant to the
provisions of Section 13.07(a)(ii).
The Company or the Person formed by such consolidation or resulting from
such merger or which acquired such assets or which acquires the Company's
shares, as the case may be, shall make provision in its certificate or articles
of incorporation or other constituent document to establish such right. Such
certificate or articles of incorporation or other constituent document shall
provide for adjustments which, for events subsequent to the effective date of
such certificate or articles of incorporation or other constituent document,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this
86
<PAGE>
Article XIII. The above provisions shall similarly apply to successive
transactions of the foregoing type.
SECTION 13.05. Notice of Adjustments of Conversion Price. Whenever the
conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price and shall
prepare a certificate signed by the Chief Financial Officer or the Treasurer of
the Company setting forth the adjusted conversion price and showing in
reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed with the Trustee, the Conversion Agent and
the transfer agent for the Preferred Securities and the Securities; and
(b) a notice stating the conversion price has been adjusted and setting
forth the adjusted conversion price shall as soon as practicable be mailed by
the Company to all record holders of Preferred Securities and the Securities at
their last addresses as they appear upon the stock transfer books of the Company
and the books and records of the Trust, respectively.
SECTION 13.06. Prior Notice of Certain Events. In case:
(i) the Company shall (1) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in
shares of Common Stock or (B) a dividend payable in cash that would not
require an adjustment pursuant to Section 13.03(iv) or (v) or (2) authorize
a tender or exchange offer that would require an adjustment pursuant to
Section 13.03(vi);
(ii) the Company shall authorize the granting to all holders of
Common Stock of rights or warrants to subscribe for or purchase any shares
of stock of any class or series or of any other rights or warrants;
(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change in
par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Company is a party
and for which approval of any
87
<PAGE>
stockholders of the Company shall be required, or of the sale or transfer
of all or substantially all of the assets of the Company or of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or other property; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall (a) if any Preferred Securities are outstanding, cause to
be filed with the transfer agent for the Preferred Securities, and shall cause
to be mailed to the holders of record of the Preferred Securities, at their last
addresses as they shall appear upon the books and records of the Trust or (b)
shall cause to be mailed to all Holders at their last addresses as they shall
appear in the Security Register, at least fifteen days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record (if any) is to be taken for the purpose of such dividend,
distribution, rights or warrants or, if a record is not to be taken, the date as
of which the holders of Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation or winding up (but no failure
to mail such notice or any defect therein or in the mailing thereof shall affect
the validity of the corporate action required to be specified in such notice).
SECTION 13.07. Adjustments in Case of Fundamental Changes. (a)
Notwithstanding any other provision in this Article XIII to the contrary, if any
Fundamental Change occurs, then the conversion price in effect will be adjusted
immediately after such Fundamental Change as described below. In addition, in
the event of a Common Stock Fundamental Change, each Security shall be
convertible solely into common stock of the kind and amount received
by holders of Common Stock as the result of such Common Stock Fundamen-
88
<PAGE>
tal Change as more specifically provided in the following clauses (i) and (ii).
For purposes of calculating any adjustment to be made pursuant to this
Section 13.07 in the event of a Fundamental Change, immediately after such
Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change, the conversion
price of the Securities shall thereupon become the lower of (A) the
conversion price in effect immediately prior to such Non-Stock Fundamental
Change, but after giving effect to any other prior adjustments effected
pursuant to this Article XIII, and (B) the result obtained by multiplying
the greater of the Applicable Price or the then applicable Reference Market
Price by a fraction of which the numerator shall be $50 and the denominator
shall be the current Redemption Price as set forth in Section 11.09 or,
prior to June 1, 2000, an amount per Security determined by the Company in
its sole discretion, after consultation with an investment banking firm, to
be the equivalent of the hypothetical Redemption Price that would have been
applicable if the Securities had been redeemable during such period; and
(ii) in the case of a Common Stock Fundamental Change, the conversion
price of the Securities in effect immediately prior to such Common Stock
Fundamental Change, but after giving effect to any other prior adjustments
effected pursuant to this Article XIII, shall thereupon be adjusted by
multiplying such conversion price by a fraction of which the numerator
shall be the Purchaser Stock Price and the denominator shall be the
Applicable Price; provided, however, that in the event of a Common Stock
Fundamental Change in which (A) 100% of the value of the consideration
received by a holder of Common Stock is common stock of the successor,
acquiror or other third party (and cash, if any, is paid only with respect
to any fractional interests in such common stock resulting from such Common
Stock Fundamental Change) and (B) all of the Common Stock shall have been
exchanged for, converted into or acquired for common stock (and cash with
respect to fractional interests) of the successor, acquiror or other third
party, the conversion price of the Securities in effect immediately prior
to such Common Stock Fundamental Change shall thereupon be adjusted by
multiplying such conversion price
89
<PAGE>
by a fraction of which the numerator shall be one and the denominator shall
be the number of shares of common stock of the successor, acquiror, or
other third party received by a stockholder for one share of Common Stock
as a result of such Common Stock Fundamental Change.
(b) Definitions. The following definitions shall apply to terms used in
this Article XIII:
(1) "Applicable Price" shall mean (i) in the event of a Non-Stock
Fundamental Change in which the holders of the Common Stock receive only
cash, the amount of cash received by a stockholder for one share of Common
Stock and (ii) in the event of any other Non-Stock Fundamental Change or
any Common Stock Fundamental Change, the average of the daily Closing
Prices of the Common Stock for the ten (10) consecutive Trading Days prior
to and including the record date for the determination of the holders of
Common Stock entitled to receive securities, cash or other property in
connection with such Non-Stock Fundamental Change or Common Stock
Fundamental Change, or, if there is no such record date, the date upon
which the holders of the Common Stock shall have the right to receive such
securities, cash or other property (such record date or distribution date
being hereinafter referred to as the "Entitlement Date"), in each case, as
adjusted in good faith by the Company to appropriately reflect any of the
events referred to in subparagraphs (i), (ii), (iii), (iv), (v) and (vi) of
Section 13.03.
(2) "Closing Price" of any common stock on any day shall mean the
last reported sale price regular way on such day or, in case no such sale
takes place on such day, the average of the reported closing bid and asked
prices regular way of such common stock, in each case on the NNM or, if the
common stock is not listed or admitted to trading on such market, on the
principal national securities exchange on which such common stock is listed
or admitted to trading, or, if not listed or admitted to trading on any
national securities exchange, the average of the closing bid and asked
prices as furnished by any independent registered broker-dealer firm
selected from time to time by the Board of Directors of the Company for
that purpose or,
90
<PAGE>
if not so available in such manner, as otherwise determined in good faith
by the Board of Directors.
(3) "Common Stock Fundamental Change" shall mean any Fundamental
Change in which more than 50% of the value (as determined in good faith by
the Board of Directors) of the consideration received by holders of Common
Stock consists of common stock that for each of the ten consecutive Trading
Days prior to the Entitlement Date has been admitted for listing or
admitted for listing subject to notice of issuance on a national securities
exchange or quoted on the NNM; provided, however, that a Fundamental Change
shall not be a Common Stock Fundamental Change unless the Company continues
to exist after the occurrence of such Fundamental Change and the
outstanding Preferred Securities continue to exist as outstanding Preferred
Securities.
(4) "Fundamental Change" shall mean the occurrence of any trans-
action or event in connection with a plan pursuant to which all or
substantially all of the Common Stock shall be exchanged for, converted
into, acquired for or constitute solely the right to receive securities,
cash or other property (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise); provided, however, in the case of a plan
involving more than one such transaction or event, for purposes of
adjustment of the conversion price, such Fundamental Change shall be deemed
to have occurred when substantially all of the Common Stock of the Company
shall be exchanged for, converted into, or acquired for or constitute
solely the right to receive securities, cash or other property, but the
adjustment shall be based upon the highest weighted average of
consideration per share that a holder of Common Stock could have received
in such transactions or events as a result of which more than 50% of the
Common Stock of the Company shall have been exchanged for, converted into,
or acquired for or constitute solely the right to receive securities, cash
or other property.
91
<PAGE>
(5) "Non-Stock Fundamental Change" shall mean any Fundamental Change
other than a Common Stock Fundamental Change.
(6) "Purchaser Stock Price" shall mean, with respect to any Common
Stock Fundamental Change, the average of the daily Closing Prices of the
common stock received in such Common Stock Fundamental Change for the ten
consecutive Trading Days prior to and including the Entitlement Date, as
adjusted in good faith by the Board of Directors to appropriately reflect
any of the events referred to in subparagraphs (i), (ii), (iii), (iv), (v)
and (vi) of Section 13.03.
(7) "Reference Market Price" shall initially mean $21.00 (which is an
amount equal to 66-2/3% of the reported last sales price for the Common
Stock on the NNM on June 2, 1997 and in the event of any adjustment to the
conversion price other than as a result of a Non-Stock Fundamental Change,
the Reference Market Price shall also be adjusted so that the ratio of the
Reference Market Price to the conversion price after giving effect to any
such adjustment shall always be the same as the ratio of $21.00 to the
initial conversion price of the Preferred Securities.
(8) "Trading Day" shall mean a day on which securities are traded on
the national securities exchange or quotation system used to determine the
Closing Price.
SECTION 13.08. Dividend or Interest Reinvestment Plans. Notwithstanding the
foregoing provisions, the issuance of any shares of Common Stock pursuant to any
plan providing for the reinvestment of dividends or interest payable on
securities of the Company and the investment of additional optional amounts in
shares of Common Stock under any such plan, and the issuance of any shares of
Common Stock or options or rights to purchase such shares pursuant to any
employee benefit plan or program of the Company or pursuant to any option,
warrant, right or exercisable, exchangeable or convertible security outstanding
as of the date the Securities were first issued, shall not be deemed to
constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Company to which any of the adjustment provisions
described above
92
<PAGE>
applies. There shall also be no adjustment of the conversion price in case of
the issuance of any stock (or securities convertible into or exchangeable for
stock) of the Company except as specifically described in this Article XIII.
SECTION 13.09. Certain Additional Rights. In case the Company shall, by
dividend or otherwise, declare or make a distribution on its Common Stock
referred to in Section 13.03 (iv) or 13.03(v) (including, without limitation,
dividends or distributions referred to in the last sentence of Section
13.03(iv)), the Holder of the Securities, upon the conversion thereof subsequent
to the close of business on the date fixed for the determination of stockholders
entitled to receive such distribution and prior to the effectiveness of the
conversion price adjustment in respect of such distribution, shall also be
entitled to receive for each share of Common Stock into which the Securities are
converted, the portion of the shares of Common Stock, rights, warrants,
evidences of indebtedness, shares of capital stock, cash and assets so
distributed applicable to one share of Common Stock; provided, however, that, at
the election of the Company (whose election shall be evidenced by a resolution
of the Board of Directors) with respect to all Holders so converting, the
Company may, in lieu of distributing to such Holder any portion of such
distribution not consisting of cash or securities of the Company, pay such
Holder an amount in cash equal to the fair market value thereof (as determined
in good faith by the Board of Directors, whose determination shall be conclusive
and described in a resolution of the Board of Directors). If any conversion of
Securities described in the immediately preceding sentence occurs prior to the
payment date for a distribution to holders of Common Stock which the Holder of
Securities so converted is entitled to receive in accordance with the
immediately preceding sentence, the Company may elect (such election to be
evidenced by a resolution of the Board of Directors) to distribute to such
Holder a due bill for the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash or assets to which such Holder is so
entitled; provided, that such due bill (i) meets any applicable requirements of
the principal national securities exchange or other market on which the Common
Stock is then traded and (ii) requires payment or delivery of such shares of
Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash or assets
93
<PAGE>
no later than the date of payment or delivery thereof to holders of shares of
Common Stock receiving such distribution.
SECTION 13.10. Restrictions on Common Stock Issuable Upon Conversion. (a)
Shares of Common Stock to be issued upon conversion of a Security in respect of
Restricted Preferred Securities (as defined in the Declaration) shall bear such
restrictive legends as the Company may provide in accordance with applicable
law.
(b) If shares of Common Stock to be issued upon conversion of a Security
in respect of Restricted Preferred Securities are to be registered in a name
other than that of the Holder of such Preferred Security, then the Person in
whose name such shares of Common Stock are to be registered must deliver to the
Conversion Agent a certificate satisfactory to the Company and signed by such
Person, as to compliance with the restrictions on transfer applicable to such
Preferred Security. Neither the Trustee nor any Conversion Agent or Registrar
shall be required to register in a name other than that of the Holder shares of
Common Stock or such Preferred Securities issued upon conversion of any such
Security in respect of such Preferred Securities not so accompanied by a
properly completed certificate.
SECTION 13.11. Trustee Not Responsible for Determining Conversion Price or
Adjustments. Neither the Trustee nor any Conversion Agent shall at any time be
under any duty or responsibility to any Holder of any Security to determine
whether any facts exist which may require any adjustment of the conversion
price, or with respect to the nature or extent of any such adjustment when made,
or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. The Trustee has no duty
to determine whether a supplemental indenture under this Article need be entered
into or whether any provisions of any supplemental indenture are correct.
Neither the Trustee nor any Conversion Agent shall be accountable with respect
to the validity or value (or the kind or amount) of any shares of Common Stock
or of any securities or property, which may at any time be issued or delivered
upon the conversion of any Security; and neither the Trustee nor any
Conversion Agent makes any representation with respect thereto. Neither
the Trustee nor any Conversion Agent shall be responsible for any fail-
94
<PAGE>
ure of the Company to make any cash payment or to issue, transfer or deliver any
shares of Common Stock or stock certificates or other securities or property
upon the surrender of any Security for the purpose of conversion, or, except as
expressly herein provided, to comply with any of the covenants of the Company
contained in Article X or this Article XIII.
--------------------------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
95
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
DT INDUSTRIES, INC.,
By: /s/ Bruce P. Erdel
------------------------------------
Name: Bruce P. Erdel
Title: Secretary
THE BANK OF NEW YORK, as Trustee
By: /s/ Timothy J. Shea
------------------------------------
Name: Timothy J. Shea
Title: Assistant Treasurer
96
<PAGE>
EXHIBIT A-1
FORM OF SECURITY
[FORM OF FACE OF SECURITY]
[Include Restricted Securities Legend: THIS SECURITY (OR ITS PREDECESSOR), ANY
CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE ISSUED IN EXCHANGE FOR THIS SECURITY
AND ANY COMMON STOCK ISSUED ON CONVERSION THEREOF HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAW AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF
THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER THAT
(A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(1) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (4) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN EACH OF
CASES (1) THROUGH (4) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.]
<PAGE>
2
DT INDUSTRIES, INC.
7.16% Convertible Junior Subordinated
Deferrable Interest Debenture Due 2012
No. $
[CUSIP No. ]
DT INDUSTRIES, INC., a corporation duly organized and existing under the
laws of the State of Delaware (herein called "the Company", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to The Bank of New York, as Property
Trustee for DT Capital Trust, or registered assigns, the principal sum
[indicated on Schedule A hereof] 1/ [of Dollars] 2/ ($ )
on May 31, 2012.
Interest Payment Dates: March 31, June 30, September 30 and December 31,
commencing June 30, 1997
Regular Record Dates: the close of business on the day immediately
preceding each Interest Payment Date, commencing
June 29, 1997
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be
- -------------------
1/ Applicable to Global Securities only.
2/ Applicable to certificated Securites only.
<PAGE>
3
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
Dated: ,
DT INDUSTRIES, INC.
By:
------------------------------------
Name:
Title:
[Seal]
Attest:
- ----------------------------
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: , THE BANK OF NEW YORK,
as Trustee
By:
------------------------------------
Authorized Signatory
<PAGE>
4
[FORM OF REVERSE OF SECURITY]
DT INDUSTRIES, INC.
7.16% Convertible Junior Subordinated
Deferrable Interest Debenture Due 2012 3/
1. Interest. DT Industries, Inc., a Delaware corporation (the "Company"),
is the issuer of this 7.16% Convertible Junior Subordinated Deferrable Interest
Debenture Due 2012 (the "Security") limited in aggregate principal amount to
$72,165,000 issued under the Indenture hereinafter referred to. The Company
promises to pay interest on the Securities in cash from June __, 1997 or from
the most recent interest payment date to which interest has been paid or duly
provided for, quarterly (subject to deferral for up to 20 consecutive quarters
as described in Section 3 hereof) in arrears on March 31, June 30, September 30
and December 31 of each year (each such date, an "Interest Payment Date"),
commencing June 30, 1997, at the rate of 7.16% per annum (subject to increase as
provided in Section 13 hereto) plus Additional Interest, if any, until the
principal hereof shall have become due and payable.
The amount of interest payable for any period will be computed on the basis
of twelve 30-day months and a 360-day year. To the extent lawful, the Company
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at
<PAGE>
5
the rate borne by the Securities, compounded quarterly. Any interest paid on
this Security shall be increased to the extent necessary to pay Additional
Interest as set forth in this Security.
2. Additional Interest. The Company shall pay to DT Capital Trust (and
its permitted successors or assigns under the Declaration) (the "Trust") such
additional amounts as may be necessary in order that the amount of dividends or
other distributions then due and payable by the Trust on the Preferred
Securities that at any time remain outstanding in accordance with the terms
thereof shall not be reduced as a result of any additional taxes, duties and
other governmental charges of whatever nature (other than withholding taxes)
imposed by the United States or any other taxing authority.
3. Extension of Interest Payment Period. The Company shall have the
right, at any time during the term of this Security, from time to time to defer
payments of interest by extending the interest payment period of such Security
for up to 20 consecutive quarters (an "Extended Interest Payment Period"). To
the extent permitted by applicable law, interest, the payment of which has been
deferred because of the extension of the interest payment period pursuant to
Section 3.12 of the Indenture, will bear interest thereon at 7.16% compounded
quarterly for each quarter of the Extended Interest Payment Period ("Compounded
Interest"). At the end of the Extended Interest Payment Period, the Company
shall pay all interest then accrued and unpaid on the Securities, including any
Compounded Interest that shall be payable to the Holders of the Securities in
whose names the Securities are registered in the Security Register on the first
Regular Record Date after the end of the Extended Interest Payment Period.
Before the termination of any Extended Interest Payment Period, the Company may
further extend such period, provided that such period together with all such
further extensions thereof shall not exceed 20 consecutive quarters or extend
beyond the Maturity of the Security. Upon the termination of any
<PAGE>
6
Extended Interest Payment Period and upon the payment of all Compounded Interest
and Additional Interest, if any, then due, the Company may commence a new
Extended Interest Payment Period, subject to the foregoing requirements. No
interest shall be due and payable during an Extended Interest Payment Period
except at the end thereof.
If the Property Trustee is the sole holder of the Security, the Company
shall give the Holder of the Security and the Trustee notice of its selection of
an Extended Interest Payment Period at least one Business Day prior to the
earlier of (i) the Interest Payment Date or (ii) if the Preferred Securities are
listed on the New York Stock Exchange or other stock exchange or quotation
system, the date the Trust is required to give notice to the New York Stock
Exchange or other applicable self-regulatory organization or to holders of the
Preferred Securities on the record date or the date such distributions are
payable, but in any event not less than ten Business Days prior to such record
date.
If the Property Trustee is not the sole holder of the Securities, the
Company shall give the Holders of these Securities and the Trustee notice of its
selection of an Extended Interest Payment Period at least ten Business Days
prior to the earlier of (i) the Interest Payment Date or (ii) if the Preferred
Securities are listed on the New York Stock Exchange or other stock exchange or
quotation system, the date the Trust is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization or to holders of
the Securities on the record date or the date such distributions are payable,
but in any event not less than two Business Days prior to such record date.
The quarter in which any notice is given pursuant to the second and third
paragraphs of this Section 3 shall be counted as one of the 20 quarters
permitted in the maximum Extended Interest Payment Period permitted under the
first paragraph of this Section 3.
<PAGE>
7
4. Method of Payment. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the regular
record date for such interest installment, which shall be the close of business
on the day immediately preceding each Interest Payment Date (the "Regular Record
Date"), commencing June 29, 1997. Any such interest not so punctually paid or
duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
not less than ten days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in said
Indenture.
Payment of the principal of and interest on this Security will be made at
the office or agency of the Company maintained for that purpose in New York, New
York, in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided,
however, that, at the option of the Company, payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
5. Paying Agent and Security Registrar. The Trustee will act as Paying
Agent, Security Registrar and Conversion Agent. The Company may change any
Paying Agent, Security Registrar, co-registrar or Conversion Agent without prior
notice. The Company or any of its Affiliates may act in any such capacity.
<PAGE>
8
6. Indenture. The Company issued the Securities under an indenture, dated
as of June 1, 1997 (the "Indenture"), between the Company and The Bank of New
York, as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Trustee, the
Company and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by the Trust Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb)
("TIA") as in effect on the date of the Indenture. The Securities are subject
to, and qualified by, all such terms, certain of which are summarized hereon,
and holders are referred to the Indenture and the TIA for a statement of such
terms. The Securities are unsecured general obligations of the Company limited
to $72,165,000 in aggregate principal amount and subordinated in right of
payment to all existing and future Senior Indebtedness of the Company. No
reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and interest on this Security at the
times, place and rate, and in the coin or currency, herein prescribed or to
convert this Security as provided in the Indenture.
7. Optional Redemption. The Securities are redeemable at the Company's
option at any time and from time to time after June 1, 2000, upon not less than
30 or more than 60 days' notice, at the following prices per $50 principal
amount of the Securities plus any accrued and unpaid interest, including
Additional Interest, if any, to the Redemption Date, if redeemed during the
12-month period ending June 1:
<PAGE>
9
Year Price Per $50
Principal
Amount
2001 .................................. $52.51
2002 .................................. 52.15
2003 .................................. 51.79
2004 .................................. 51.43
2005 .................................. 51.07
2006 .................................. 50.72
2007 .................................. 50.36
and thereafter at $50 per $50 principal amount of the Securities plus, in each
case, accrued and unpaid interest, including Additional Interest, if any, to the
Redemption Date (subject to the right of holders of record on the relevant
record date to receive interest due on the Interest Payment Date). On or after
the Redemption Date, interest will cease to accrue on the Securities, or portion
thereof, called for redemption.
8. Optional Redemption Upon Tax Event. The Securities are subject to
redemption in whole, but not in part, at any time within 90 days, if a Tax Event
(as defined in the Declaration) shall occur and be continuing, at a redemption
price equal to $50 per $50 principal amount thereof plus accrued but unpaid
interest, including Additional Interest, if any, to the Redemption Date. Any
redemption pursuant to this Section 8 will be made upon not less than 30 nor
more than 60 days' notice.
9. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder of the
Securities to be redeemed at his address of record. The Securities in
<PAGE>
10
denominations larger than $50 may be redeemed in part but only in integral
multiples of $50. In the event of a redemption of less than all of the
Securities, the Securities will be chosen for redemption by the Trustee in
accordance with the Indenture. On and after the Redemption Date, interest ceases
to accrue on the Securities or portions of them called for redemption.
If this Security is redeemed subsequent to a Regular Record Date with
respect to any Interest Payment Date specified above and on or prior to such
Interest Payment Date, then any accrued interest will be paid to the person in
whose name this Security is registered at the close of business on such record
date.
10. Mandatory Redemption. The Securities will mature on May 31, 2012 and
may be redeemed, in whole or in part, at any time after June 1, 2000, or at any
time in certain circumstances upon the occurrence of a Tax Event. Upon the
repayment of the Securities, whether at maturity or upon redemption, the
proceeds from such repayment or payment shall simultaneously be applied to
redeem Trust Securities (provided Trust Securities remain outstanding)having an
aggregate liquidation amount of the Securities so repaid or redeemed at the
applicable redemption price together with accrued and unpaid distributions
through the date of redemption; provided, that holders of the Trust Securities
shall be given not less than 30 nor more than 60 days notice of such redemption.
Upon the repayment of the Securities at maturity or upon any acceleration,
earlier redemption or otherwise, the proceeds from such repayment will be
applied to redeem the Preferred Securities, in whole, upon not less than 30 nor
more than 60 days' notice. There are no sinking fund payments with respect to
the Securities.
11. Subordination. The payment of the principal of, interest on or any
other amounts due on the Securities is subordinated in right of payment to all
existing and future Senior Indebtedness (as defined below) of the Company, as
described in the Indenture. Each holder, by
<PAGE>
11
accepting a Security, agrees to such subordination and authorizes and directs
the Trustee on its behalf to take such action as may be necessary or appropriate
to effectuate the subordination so provided and appoints the Trustee as its
attorney-in-fact for such purpose.
Senior Indebtedness shall mean in respect of the Company (i) the principal,
premium, if any, and interest in respect of (A) indebtedness of such obligor for
money borrowed and (B) indebtedness evidenced by securities, debentures, bonds
or other similar instruments issued by such obligor, (ii) all capital lease
obligations of such obligor, (iii) all obligations of such obligor issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of such obligor and all obligations of such obligor under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such obligor for the
reimbursement of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction, (v) all obligations of the type referred
to in clauses (i) through (iv) above of other persons for the payment of which
such obligor is responsible or liable as obligor, guarantor or otherwise, (vi)
all obligations of the type referred to in clauses (i) through (v) above of
other persons secured by any lien on any property or asset of such obligor
(whether or not such obligation is assumed by such obligor), except for (1) any
such indebtedness that is by its terms subordinated to or pari passu with the
Securities and (2) any indebtedness (including all other debt securities and
guarantees in respect of those debt securities) initially issued to any other
trust, or a trustee of such trust, partnership, or other entity affiliated with
the Company that is, directly or indirectly, a financing vehicle of the Company
(a "Financing Entity") in connection with the issuance by such Financing Entity
of preferred securities or other similar securities and (vii) interest accruing
subsequent to events of bankruptcy of the Company and its subsidiaries at the
rate provided for in the documentation governing such Senior Indebtedness,
whether or
<PAGE>
12
not such interest is an allowed claim enforceable against the debtor in a
bankruptcy case under relevant bankruptcy law.
12. Conversion. The Holder of any Security has the right, exercisable at
any time prior to the close of business (New York time) on the date of the
Security's maturity, to convert the principal amount thereof (or any portion
thereof that is an integral multiple of $50) into shares of Common Stock at the
initial conversion rate of 1.2903 shares of Common Stock for each Security
(equivalent to a conversion price of $38.75 per share of Common Stock of the
Company), subject to adjustment under certain circumstances, except that if a
Security is called for redemption, the conversion right will terminate at the
close of business on the Redemption Date.
To convert a Security, a Holder must (1) complete and sign a conversion
notice substantially in the form attached hereto, (2) surrender the Security to
a Conversion Agent, (3) furnish appropriate endorsements or transfer documents
if required by the Security Registrar or Conversion Agent and (4) pay any
transfer or similar tax, if required. Upon conversion, no adjustment or payment
will be made for interest or dividends, but if any Holder surrenders a Security
for conversion after the close of business on the Regular Record Date for the
payment of an installment of interest and prior to the opening of business on
the next Interest Payment Date, then, notwithstanding such conversion, the
interest payable on such Interest Payment Date will be paid to the registered
Holder of such Security on such Regular Record Date. In such event, such
Security, when surrendered for conversion, need not be accompanied by payment of
an amount equal to the interest payable on such Interest Payment Date on the
portion so converted. The number of shares issuable upon conversion of a
Security is determined by dividing the principal amount of the Security
converted by the conversion price in effect on the Conversion Date. No
fractional shares will be issued upon conversion but a cash adjustment will be
made for any
<PAGE>
13
fractional interest. The outstanding principal amount of any Security shall be
reduced by the portion of the principal amount thereof converted into shares of
Common Stock.
13. Registration Rights. The holders of the Preferred Securities, the
Securities and the Guarantee are entitled to the benefits of a Registration
Rights Agreement, dated as of June __, 1997, among the Company and the
Purchasers (the "Registration Rights Agreement"). Pursuant to the Registration
Rights Agreement the Company has agreed for the benefit of the holders of the
Preferred Securities, the Securities and the Guarantee that (i) it will, at its
cost, prior to August 15, 1997, file a shelf registration statement (the "Shelf
Registration Statement") with the Commission with respect to resales of the
Preferred Securities, together with the Securities, the Guarantee and the
related Common Stock issuable upon conversion thereof, (b) prior to December 15,
1997, such Shelf Registration Statement shall be declared effective by the
Commission and (iii) the Company will maintain such Shelf Registration Statement
continuously effective under the Securities Act of 1933, as amended, for so long
as shall be required under Rule 144(k) thereunder or any successor rule or
regulation thereto or such earlier date as is provided in the Registration
Rights Agreement. If the Company fails to comply with any of clauses (i) through
(iii) above (a "Registration Default") then, at such time, the per annum
interest rate on the Securities will increase by 50 basis points (.50%);
provided, however, that if the Registration Default consists of the occurrence
of any event contemplated by paragraph 3(c)(2)(iii) of the Registration Rights
Agreement, such Registration Default shall not be deemed to have occurred until
the expiration of 30 days after the date of the occurrence of such event if such
event is an action taken by the Company in good faith and for valid business
reasons and the Trust and the Company thereafter promptly comply with the
requirements of paragraph 3(i) of the Registration Rights Agreement. Such
increase will remain in effect from and including the date on which any such
Registration Default
<PAGE>
14
shall occur to but excluding the date on which all Registration Defaults have
been cured, on which date the interest rate on the Securities will revert to the
interest rate originally borne by the Securities.
14. Registration, Transfer, Exchange and Denominations. As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
this Security is registrable in the Security Register, upon surrender of this
Security for registration of transfer at the office or agency of the Company in
New York, New York, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities are issuable only in registered form without coupons in
denominations of $50 and integral multiples thereof. No service charge shall be
made for any such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. Prior to due presentment of this
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary. In the event of redemption or conversion of
this Security in part only, a new Security or Securities for the unredeemed or
unconverted portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
15. Persons Deemed Owners. Except as provided in Section 3 hereof, the
registered Holder of a Security may be treated as its owner for all purposes.
<PAGE>
15
16. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent shall pay the
money back to the Company at its written request. After that, holders of
Securities entitled to the money must look to the Company for payment unless an
abandoned property law designates another Person and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
17. Defaults and Remedies. The Securities shall have the Events of Default
as set forth in Section 5.01 of the Indenture. Subject to certain limitations in
the Indenture, if an Event of Default occurs and is continuing, the Trustee by
notice to the Company or the holders of at least 25% in aggregate principal
amount of the then outstanding Securities by notice to the Company and the
Trustee may declare all the Securities to be due and payable immediately;
provided that, if the Property Trustee is the sole Holder of the Security and if
upon an Event of Default, the Trustee or the holder or holders of not less than
25% in aggregate principal amount of the then outstanding Securities fail to
declare the principal of all the Securities to be immediately due and payable,
the holders of at least 25% in aggregate liquidation amount of Preferred
Securities then outstanding shall have such right by a notice in writing to the
Company and the Trustee; and upon any such declaration such principal and all
accrued interest shall become immediately due and payable; provided that the
payment of principal and interest on such Securities shall remain subordinated
to the extent provided in the Indenture.
The holders of a majority in principal amount of the Securities then
outstanding by written notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration. Holders may not enforce the Indenture or the Securities except as
<PAGE>
16
provided in the Indenture. Subject to certain limitations, holders of a majority
in principal amount of the then outstanding Securities issued under the
Indenture may direct the Trustee in its exercise of any trust or power. The
Company must furnish annually compliance certificates to the Trustee. The above
description of Events of Default and remedies is qualified by reference to, and
subject in its entirety by, the more complete description thereof contained in
the Indenture.
18. Amendments, Supplements and Waivers. The Indenture permits, subject to
the rights of the holders of Preferred Securities set forth therein and in the
Declaration and with certain other exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
the rights of the Holders of the Securities under the Indenture at any time by
the Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, subject to the
right of the holders of the Preferred Securities set forth therein and in the
Declaration, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
therefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security. The above description of amendments, supplements and
waivers is qualified by reference to, and subject in its entirety by the more
complete description thereof contained in the Indenture.
19. Trustee Dealings with the Company. The Trustee, in its individual or
any other capacity may become
<PAGE>
17
the owner or pledgee of the Securities and may otherwise deal with the Company
or an Affiliate with the same rights it would have, as if it were not Trustee,
subject to certain limitations provided for in the Indenture and in the TIA. Any
Agent may do the same with like rights.
20. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of the Securities by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
21. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN
THE INDENTURE AND THE SECURITIES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
22. Authentication. The Securities shall not be valid until authenticated
by the manual signature of an authorized signatory of the Trustee or an
authenticating agent.
23. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
<PAGE>
18
The Company will furnish to any Holder of the Securities upon written
request and without charge a copy of the Indenture. Request may be made to:
DT Industries, Inc.
Corporate Centre
Suite 2-300
1949 E. Sunshine
Springfield, MO 65804
Attention of: Vice President-Finance
<PAGE>
19
ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Your Signature:
---------------------------------------------------------
(Sign exactly as your name appears on the other side of
this Security)
Date:
----------------------------------
Signature Guarantee: 4/ ---------------------------------------------------
- -------------------
4/ (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
<PAGE>
20
[Include the following if the Security bears a Restricted Securities Legend --
In connection with any transfer of any of the Securities evidenced by this
certificate, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW
(1) |_| exchanged for the undersigned's own account without transfer;
or
(2) |_| transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
(3) |_| transferred pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
(4) |_| transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if box (3) or (4) is
checked, the Trustee may require, prior to registering any such transfer of the
Securities such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in
<PAGE>
21
a transaction not subject to, the registration requirements of the Securities
Act of 1933, such as the exemption provided by Rule 144 under such Act.
---------------------------------------
Signature
Signature Guarantee: 5/
- -------------------------------- ---------------------------------------]
Signature must be guaranteed Signature
- --------------------------------------------------------------------------------
[TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's
- -------------------
5/ (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
<PAGE>
22
foregoing representations in order to claim the exemption from registration
provided by Rule 144A.
Dated:
----------------------- ---------------------------------------
NOTICE: To be executed by an executive
officer]
<PAGE>
23
(TO BE ATTACHED TO GLOBAL SECURITIES)
SCHEDULE A
The initial principal amount of this Global Security shall be $ .
The following increases or decreases in the principal amount of this Global
Security have been made:
<TABLE>
<CAPTION>
Date Made Amount of increase Amount of decrease in Principal Amount of Signature of
in Principal Amount Principal Amount of this Global Security authorized signatory
of this Global this Global Security following such of Trustee or
Security decrease or increase Securities Custodian
<S> <C> <C> <C> <C>
</TABLE>
<PAGE>
24
ELECTION TO CONVERT
To: DT Industries, Inc.
The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or the portion below designated, into Common
Stock of DT INDUSTRIES, INC. in accordance with the terms of the Indenture
referred to in this Security, and directs that the shares issuable and
deliverable upon conversion, together with any check in payment for fractional
shares, be issued in the name of and delivered to the undersigned, unless a
different name has been indicated in the assignment below. If shares are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance with
the terms of the Indenture and the Security, agrees to be bound by the terms of
the Registration Rights Agreement relating to the Common Stock issuable upon
conversion of the Securities.
Date: ,
in whole __
Portions of Security to be converted ($50
or integral multiples thereof):
$
----------------------
-----------------------------------------
Signature (for conversion only)
<PAGE>
25
Please Print or Typewrite Name and
Address, Including Zip Code, and Social
Security or Other Identifying Number
-----------------------------------------
-----------------------------------------
-----------------------------------------
Signature Guarantee: 6/
-----------------
- -------------------
6/ (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
<PAGE>
EXHIBIT A-2
FORM OF EXCHANGE SECURITY
[FORM OF FACE OF SECURITY]
DT INDUSTRIES, INC.
7.16% Convertible Junior Subordinated
Deferrable Interest Debenture Due 2012
No. $
[CUSIP No. ]
DT INDUSTRIES, INC., a corporation duly organized and existing under the
laws of the State of Delaware (herein called "the Company", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to The Bank of New York, as Property
Trustee for DT Capital Trust, or registered assigns, the principal sum
[indicated on Schedule A hereof] 1/ [of Dollars] 2/ ($ )
on May 31, 2012.
Interest Payment Dates: March 31, June 30, September 30 and December 31,
commencing June 30, 1997
Regular Record Dates: the close of business on the day immediately
preceding each Interest Payment Date, commencing
June 29, 1997
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
- -------------------
1/ Applicable to Global Securities only.
2/ Applicable to certificated Securites only.
<PAGE>
2
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
Dated: ,
DT INDUSTRIES, INC.
By:
------------------------------------
Name:
Title:
[Seal]
Attest:
- ----------------------------
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: , THE BANK OF NEW YORK,
as Trustee
By:
------------------------------------
Authorized Signatory
<PAGE>
3
[FORM OF REVERSE OF SECURITY]
DT INDUSTRIES, INC.
7.16% Convertible Junior Subordinated
Deferrable Interest Debenture Due 2012 3/
1. Interest. DT Industries, Inc., a Delaware corporation (the "Company"),
is the issuer of this 7.16% Convertible Junior Subordinated Deferrable Interest
Debenture Due 2012 (the "Security") limited in aggregate principal amount to
$72,165,000 issued under the Indenture hereinafter referred to. The Company
promises to pay interest on the Securities in cash from June __, 1997 or from
the most recent interest payment date to which interest has been paid or duly
provided for, quarterly (subject to deferral for up to 20 consecutive quarters
as described in Section 3 hereof) in arrears on March 31, June 30, September 30
and December 31 of each year (each such date, an "Interest Payment Date"),
commencing June 30, 1997, at the rate of 7.16% per annum (subject to increase as
provided in Section 13 hereto) plus Additional Interest, if any, until the
principal hereof shall have become due and payable.
The amount of interest payable for any period will be computed on the basis
of twelve 30-day months and a 360-day year. To the extent lawful, the Company
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the rate borne by the Securities, compounded
quarterly. Any interest paid on this Security shall be increased to the extent
necessary to pay Additional Interest as set forth in this Security.
- -------------------
3/ All terms used in this Security which are defined in the Indenture or
in the Declaration referred to therein shall have the meanings assigned to them
in the Indenture or the Declaration, as the case may be.
<PAGE>
4
2. Additional Interest. The Company shall pay to DT Capital Trust (and
its permitted successors or assigns under the Declaration) (the "Trust") such
additional amounts as may be necessary in order that the amount of dividends or
other distributions then due and payable by the Trust on the Preferred
Securities that at any time remain outstanding in accordance with the terms
thereof shall not be reduced as a result of any additional taxes, duties and
other governmental charges of whatever nature (other than withholding taxes)
imposed by the United States or any other taxing authority.
3. Extension of Interest Payment Period. The Company shall have the
right, at any time during the term of this Security, from time to time to defer
payments of interest by extending the interest payment period of such Security
for up to 20 consecutive quarters (an "Extended Interest Payment Period"). To
the extent permitted by applicable law, interest, the payment of which has been
deferred because of the extension of the interest payment period pursuant to
Section 3.12 of the Indenture, will bear interest thereon at 7.16% compounded
quarterly for each quarter of the Extended Interest Payment Period ("Compounded
Interest"). At the end of the Extended Interest Payment Period, the Company
shall pay all interest then accrued and unpaid on the Securities, including any
Compounded Interest that shall be payable to the Holders of the Securities in
whose names the Securities are registered in the Security Register on the first
Regular Record Date after the end of the Extended Interest Payment Period.
Before the termination of any Extended Interest Payment Period, the Company may
further extend such period, provided that such period together with all such
further extensions thereof shall not exceed 20 consecutive quarters or extend
beyond the Maturity of the Security. Upon the termination of any Extended
Interest Payment Period and upon the payment of all Compounded Interest and
Additional Interest, if any, then due, the Company may commence a new Extended
Interest Payment Period, subject to the foregoing requirements. No interest
shall be due and payable during an Extended Interest Payment Period except at
the end thereof.
If the Property Trustee is the sole holder of the Security, the Company
shall give the Holder of the Security
<PAGE>
5
and the Trustee notice of its selection of an Extended Interest Payment Period
at least one Business Day prior to the earlier of (i) the Interest Payment Date
or (ii) if the Preferred Securities are listed on the New York Stock Exchange or
other stock exchange or quotation system, the date the Trust is required to give
notice to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Preferred Securities on the record date or the
date such distributions are payable, but in any event not less than ten Business
Days prior to such record date.
If the Property Trustee is not the sole holder of the Securities, the
Company shall give the Holders of these Securities and the Trustee notice of its
selection of an Extended Interest Payment Period at least ten Business Days
prior to the earlier of (i) the Interest Payment Date or (ii) if the Preferred
Securities are listed on the New York Stock Exchange or other stock exchange or
quotation system, the date the Trust is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization or to holders of
the Securities on the record date or the date such distributions are payable,
but in any event not less than two Business Days prior to such record date.
The quarter in which any notice is given pursuant to the second and third
paragraphs of this Section 3 shall be counted as one of the 20 quarters
permitted in the maximum Extended Interest Payment Period permitted under the
first paragraph of this Section 3.
4. Method of Payment. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the regular
record date for such interest installment, which shall be the close of business
on the day immediately preceding each Interest Payment Date (the "Regular Record
Date"), commencing June 29, 1997. Any such interest not so punctually paid or
duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities)
<PAGE>
6
is registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities not less than ten days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture.
Payment of the principal of and interest on this Security will be made at
the office or agency of the Company maintained for that purpose in New York, New
York, in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided,
however, that, at the option of the Company, payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
5. Paying Agent and Security Registrar. The Trustee will act as Paying
Agent, Security Registrar and Conversion Agent. The Company may change any
Paying Agent, Security Registrar, co-registrar or Conversion Agent without prior
notice. The Company or any of its Affiliates may act in any such capacity.
6. Indenture. The Company issued the Securities under an indenture, dated
as of June 1, 1997 (the "Indenture"), between the Company and The Bank of New
York, as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Trustee, the
Company and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by the Trust Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb)
("TIA") as in effect on the date of the Indenture. The Securities are subject
to, and qualified by, all such terms, certain of which are summarized hereon,
and holders are referred to the Indenture and the TIA for a statement of such
terms. The Securities
<PAGE>
7
are unsecured general obligations of the Company limited to $72,165,000 in
aggregate principal amount and subordinated in right of payment to all existing
and future Senior Indebtedness of the Company. No reference herein to the
Indenture and no provision of this Security or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed or to convert this Security as
provided in the Indenture.
7. Optional Redemption. The Securities are redeemable at the Company's
option at any time and from time to time after June 1, 2000, upon not less than
30 or more than 60 days' notice, at the following prices per $50 principal
amount of the Securities plus any accrued and unpaid interest, including
Additional Interest, if any, to the Redemption Date, if redeemed during the
12-month period ending June 1:
Year Price Per $50
Principal
Amount
2001 .................................. $52.51
2002 .................................. 52.15
2003 .................................. 51.79
2004 .................................. 51.43
2005 .................................. 51.07
2006 .................................. 50.72
2007 .................................. 50.36
and thereafter at $50 per $50 principal amount of the Securities plus, in each
case, accrued and unpaid interest, including Additional Interest, if any, to the
Redemption Date (subject to the right of holders of record on the relevant
record date to receive interest due on the Interest Payment Date). On or after
the Redemption Date, interest
<PAGE>
8
will cease to accrue on the Securities, or portion thereof, called for
redemption.
8. Optional Redemption Upon Tax Event. The Securities are subject to
redemption in whole, but not in part, at any time within 90 days, if a Tax Event
(as defined in the Declaration) shall occur and be continuing, at a redemption
price equal to $50 per $50 principal amount thereof plus accrued but unpaid
interest, including Additional Interest, if any, to the Redemption Date. Any
redemption pursuant to this Section 8 will be made upon not less than 30 nor
more than 60 days' notice.
9. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder of the
Securities to be redeemed at his address of record. The Securities in
denominations larger than $50 may be redeemed in part but only in integral
multiples of $50. In the event of a redemption of less than all of the
Securities, the Securities will be chosen for redemption by the Trustee in
accordance with the Indenture. On and after the Redemption Date, interest ceases
to accrue on the Securities or portions of them called for redemption.
If this Security is redeemed subsequent to a Regular Record Date with
respect to any Interest Payment Date specified above and on or prior to such
Interest Payment Date, then any accrued interest will be paid to the person in
whose name this Security is registered at the close of business on such record
date.
10. Mandatory Redemption. The Securities will mature on May 31, 2012 and
may be redeemed, in whole or in part, at any time after June 1, 2000, or at any
time in certain circumstances upon the occurrence of a Tax Event. Upon the
repayment of the Securities, whether at maturity or upon redemption, the
proceeds from such repayment or payment shall simultaneously be applied to
redeem Trust Securities (provided that Trust Securities remain outstanding)
having an aggregate liquidation amount of the Securities so repaid or redeemed
at the applicable redemption price together with accrued and unpaid
distributions through the date of redemption; provided, that holders of the
Trust Securities shall be given not less than 30 nor more than 60 days notice
<PAGE>
9
of such redemption. Upon the repayment of the Securities at maturity or upon any
acceleration, earlier redemption or otherwise, the proceeds from such repayment
will be applied to redeem the Preferred Securities, in whole, upon not less than
30 nor more than 60 days' notice. There are no sinking fund payments with
respect to the Securities.
11. Subordination. The payment of the principal of, interest on or any
other amounts due on the Securities is subordinated in right of payment to all
existing and future Senior Indebtedness (as defined below) of the Company, as
described in the Indenture. Each holder, by accepting a Security, agrees to such
subordination and authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and appoints the Trustee as its attorney-in-fact for such purpose.
Senior Indebtedness shall mean in respect of the Company (i) the principal,
premium, if any, and interest in respect of (A) indebtedness of such obligor for
money borrowed and (B) indebtedness evidenced by securities, debentures, bonds
or other similar instruments issued by such obligor, (ii) all capital lease
obligations of such obligor, (iii) all obligations of such obligor issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of such obligor and all obligations of such obligor under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such obligor for the
reimbursement of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction, (v) all obligations of the type referred
to in clauses (i) through (iv) above of other persons for the payment of which
such obligor is responsible or liable as obligor, guarantor or otherwise, (vi)
all obligations of the type referred to in clauses (i) through (v) above of
other persons secured by any lien on any property or asset of such obligor
(whether or not such obligation is assumed by such obligor), except for (1) any
such indebtedness that is by its terms subordinated to or pari passu with the
Securities and (2) any indebtedness (including all other debt securities and
guarantees in respect of those debt securities) initially issued to any other
trust, or a trustee of such trust, partnership, or other entity
<PAGE>
10
affiliated with the Company that is, directly or indirectly, a financing vehicle
of the Company (a "Financing Entity") in connection with the issuance by such
Financing Entity of preferred securities or other similar securities and (vii)
interest accruing subsequent to events of bankruptcy of the Company and its
subsidiaries at the rate provided for in the documentation governing such Senior
Indebtedness, whether or not such interest is an allowed claim enforceable
against the debtor in a bankruptcy case under relevant bankruptcy law.
12. Conversion. The Holder of any Security has the right, exercisable at
any time prior to the close of business (New York time) on the date of the
Security's maturity, to convert the principal amount thereof (or any portion
thereof that is an integral multiple of $50) into shares of Common Stock at the
initial conversion rate of 1.2903 shares of Common Stock for each Security
(equivalent to a conversion price of $38.75 per share of Common Stock of the
Company), subject to adjustment under certain circumstances, except that if a
Security is called for redemption, the conversion right will terminate at the
close of business on the Redemption Date.
To convert a Security, a Holder must (1) complete and sign a conversion
notice substantially in the form attached hereto, (2) surrender the Security to
a Conversion Agent, (3) furnish appropriate endorsements or transfer documents
if required by the Security Registrar or Conversion Agent and (4) pay any
transfer or similar tax, if required. Upon conversion, no adjustment or payment
will be made for interest or dividends, but if any Holder surrenders a Security
for conversion after the close of business on the Regular Record Date for the
payment of an installment of interest and prior to the opening of business on
the next Interest Payment Date, then, notwithstanding such conversion, the
interest payable on such Interest Payment Date will be paid to the registered
Holder of such Security on such Regular Record Date. In such event, such
Security, when surrendered for conversion, need not be accompanied by payment of
an amount equal to the interest payable on such Interest Payment Date on the
portion so converted. The number of shares issuable upon conversion of a
Security is determined by dividing the principal amount of the Security
converted by the conversion price in effect on the
<PAGE>
11
Conversion Date. No fractional shares will be issued upon conversion but a cash
adjustment will be made for any fractional interest. The outstanding principal
amount of any Security shall be reduced by the portion of the principal amount
thereof converted into shares of Common Stock.
13. Registration Rights. The holders of the Preferred Securities, the
Securities and the Guarantee are entitled to the benefits of a Registration
Rights Agreement, dated as of June 1, 1997, among the Company and the Purchasers
(the "Registration Rights Agreement"). Pursuant to the Registration Rights
Agreement the Company has agreed for the benefit of the holders of the Preferred
Securities, the Securities and the Guarantee that (i) it will, at its cost,
prior to August 15, 1997, file a shelf registration statement (the "Shelf
Registration Statement") with the Commission with respect to resales of the
Preferred Securities, together with the Securities, the Guarantee and the
related Common Stock issuable upon conversion thereof, (b) prior to December 15,
1997, such Shelf Registration Statement shall be declared effective by the
Commission and (iii) the Company will maintain such Shelf Registration Statement
continuously effective under the Securities Act of 1933, as amended, for so long
as shall be required under Rule 144(k) thereunder or any successor rule or
regulation thereto or such earlier date as is provided in the Registration
Rights Agreement. If the Company fails to comply with any of clauses (i) through
(iii) above (a "Registration Default") then, at such time, the per annum
interest rate on the Securities will increase by 50 basis points (.50%);
provided, however, that if the Registration Default consists of the occurrence
of any event contemplated by paragraph 3(c)(2)(iii) of the Registration Rights
Agreement, such Registration Default shall not be deemed to have occurred until
the expiration of 30 days after the date of the occurrence of such event if such
event is an action taken by the Company in good faith and for valid business
reasons and the Trust and the Company thereafter promptly comply with the
requirements of paragraph 3(i) of the Registration Rights Agreement. Such
increase will remain in effect from and including the date on which any such
Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured, on which date the interest
<PAGE>
12
rate on the Securities will revert to the interest rate originally borne by the
Securities.
14. Registration, Transfer, Exchange and Denominations. As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
this Security is registrable in the Security Register, upon surrender of this
Security for registration of transfer at the office or agency of the Company in
New York, New York, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities are issuable only in registered form without coupons in
denominations of $50 and integral multiples thereof. No service charge shall be
made for any such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. Prior to due presentment of this
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary. In the event of redemption or conversion of
this Security in part only, a new Security or Securities for the unredeemed or
unconverted portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
15. Persons Deemed Owners. Except as provided in Section 3 hereof, the
registered Holder of a Security may be treated as its owner for all purposes.
16. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent shall pay the
money back to the Company at its written request. After that, holders of
Securities entitled to the money must look to the Company for payment unless an
abandoned property law designates
<PAGE>
13
another Person and all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
17. Defaults and Remedies. The Securities shall have the Events of Default
as set forth in Section 5.01 of the Indenture. Subject to certain limitations in
the Indenture, if an Event of Default occurs and is continuing, the Trustee by
notice to the Company or the holders of at least 25% in aggregate principal
amount of the then outstanding Securities by notice to the Company and the
Trustee may declare all the Securities to be due and payable immediately;
provided that, if the Property Trustee is the sole Holder of the Security and if
upon an Event of Default, the Trustee or the holder or holders of not less than
25% in aggregate principal amount of the then outstanding Securities fail to
declare the principal of all the Securities to be immediately due and payable,
the holders of at least 25% in aggregate liquidation amount of Preferred
Securities then outstanding shall have such right by a notice in writing to the
Company and the Trustee; and upon any such declaration such principal and all
accrued interest shall become immediately due and payable; provided that the
payment of principal and interest on such Securities shall remain subordinated
to the extent provided in the Indenture.
The holders of a majority in principal amount of the Securities then
outstanding by written notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration. Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. Subject to certain limitations, holders of a majority
in principal amount of the then outstanding Securities issued under the
Indenture may direct the Trustee in its exercise of any trust or power. The
Company must furnish annually compliance certificates to the Trustee. The above
description of Events of Default and remedies is qualified by reference to, and
subject in its entirety by, the more complete description thereof contained in
the Indenture.
18. Amendments, Supplements and Waivers. The Indenture permits, subject to
the rights of the holders of
<PAGE>
14
Preferred Securities set forth therein and in the Declaration and with certain
other exceptions as therein provided, the amendment thereof and the modification
of the rights and obligations of the Company and the rights of the Holders of
the Securities under the Indenture at any time by the Company and the Trustee
with the consent of the Holders of a majority in aggregate principal amount of
the Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities, subject to the right of the holders of the Preferred Securities set
forth therein and in the Declaration, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security. The above
description of amendments, supplements and waivers is qualified by reference to,
and subject in its entirety by the more complete description thereof contained
in the Indenture.
19. Trustee Dealings with the Company. The Trustee, in its individual or
any other capacity may become the owner or pledgee of the Securities and may
otherwise deal with the Company or an Affiliate with the same rights it would
have, as if it were not Trustee, subject to certain limitations provided for in
the Indenture and in the TIA. Any Agent may do the same with like rights.
20. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of the Securities by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
<PAGE>
15
21. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN
THE INDENTURE AND THE SECURITIES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
22. Authentication. The Securities shall not be valid until authenticated
by the manual signature of an authorized signatory of the Trustee or an
authenticating agent.
23. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
The Company will furnish to any Holder of the Securities upon written
request and without charge a copy of the Indenture. Request may be made to:
DT Industries, Inc.
Corporate Centre
Suite 2-300
1949 E. Sunshine
Springfield, MO 65804
Attention of: Vice President--Finance
<PAGE>
16
ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Your Signature:
---------------------------------------------------------
(Sign exactly as your name appears on the other side of
this Security)
Date:
----------------------------------
Signature Guarantee: 4/ ---------------------------------------------------
- -------------------
4/ (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
<PAGE>
17
(TO BE ATTACHED TO GLOBAL SECURITIES)
SCHEDULE A
The initial principal amount of this Global Security shall be $ .
The following increases or decreases in the principal amount of this Global
Security have been made:
<TABLE>
<CAPTION>
Date Made Amount of increase Amount of decrease in Principal Amount of Signature of
in Principal Amount Principal Amount of this Global Security authorized signatory
of this Global this Global Security following such of Trustee or
Security decrease or increase Securities Custodian
<S> <C> <C> <C> <C>
</TABLE>
<PAGE>
18
ELECTION TO CONVERT
To: DT Industries, Inc.
The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or the portion below designated, into Common
Stock of DT INDUSTRIES, INC. in accordance with the terms of the Indenture
referred to in this Security, and directs that the shares issuable and
deliverable upon conversion, together with any check in payment for fractional
shares, be issued in the name of and delivered to the undersigned, unless a
different name has been indicated in the assignment below. If shares are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance with
the terms of the Indenture and the Security, agrees to be bound by the terms of
the Registration Rights Agreement relating to the Common Stock issuable upon
conversion of the Securities.
Date: ,
in whole __
Portions of Security to be converted ($50
or integral multiples thereof):
$
----------------------
-----------------------------------------
Signature (for conversion only)
<PAGE>
19
Please Print or Typewrite Name and
Address, Including Zip Code, and Social
Security or Other Identifying Number
-----------------------------------------
-----------------------------------------
-----------------------------------------
Signature Guarantee: 5/
-----------------
- -------------------
5/ (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
================================================================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
Among
DT INDUSTRIES, INC.
and
THE BANK OF NEW YORK
Dated as of June 12, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Interpretation
SECTION 1.01. Definitions and Interpretation......................... 2
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application....................... 6
SECTION 2.02. Lists of Holders of Securities......................... 6
SECTION 2.03. Reports by the Preferred Guarantee Trustee............. 7
SECTION 2.04. Periodic Reports to Preferred Guarantee Trustee........ 7
SECTION 2.05. Evidence of Compliance with Conditions Precedent....... 7
SECTION 2.06. Events of Default; Waiver.............................. 8
SECTION 2.07. Event of Default; Notice............................... 8
SECTION 2.08. Conflicting Interests.................................. 8
ARTICLE III
Powers, Duties and Rights of
Preferred Guarantee Trustee
SECTION 3.01. Powers and Duties of the Preferred Guarantee Trustee... 9
i
<PAGE>
SECTION 3.02. Certain Rights of Preferred Guarantee Trustee.......... 11
SECTION 3.03. Not Responsible for Recitals or Issuance of Guarantee.. 14
ARTICLE IV
Preferred Guarantee Trustee
SECTION 4.01. Preferred Guarantee Trustee; Eligibility............... 15
SECTION 4.02. Appointment, Removal and Resignation of Preferred
Guarantee Trustee.................................... 16
ARTICLE V
Guarantee
SECTION 5.01. Guarantee.............................................. 17
SECTION 5.02. Subordination.......................................... 17
SECTION 5.03. Waiver of Notice and Demand............................ 17
SECTION 5.04. Obligations Not Affected............................... 18
SECTION 5.05. Rights of Holders...................................... 19
SECTION 5.06. Guarantee of Payment................................... 20
SECTION 5.07. Subrogation............................................ 20
SECTION 5.08. Independent Obligations................................ 20
SECTION 5.09. Conversion............................................. 20
ii
<PAGE>
ARTICLE VI
Limitation of Transactions; Subordination
SECTION 6.01. Limitation of Transactions............................. 21
SECTION 6.02. Ranking................................................ 21
ARTICLE VII
Termination
SECTION 7.01. Termination............................................ 22
ARTICLE VIII
Indemnification
SECTION 8.01. Exculpation............................................ 22
SECTION 8.02. Indemnification........................................ 23
ARTICLE IX
Miscellaneous
SECTION 9.01. Successors and Assigns................................. 24
SECTION 9.02. Amendments............................................. 24
SECTION 9.03. Notices................................................ 24
SECTION 9.04. Benefit................................................ 25
SECTION 9.05. Governing Law.......................................... 26
iii
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE AGREEMENT
("Preferred Securities Guarantee"), dated as of June 12,
1997, is executed and delivered by DT INDUSTRIES, INC.,
a Delaware corporation (the "Guarantor"), and THE BANK
OF NEW YORK, a New York banking corporation, as trustee
(the "Preferred Guarantee Trustee"), for the benefit of
the HOLDERS (as defined herein) from time to time
of the Preferred Securities (as defined herein) of DT
CAPITAL TRUST, a Delaware statutory business trust
(the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of June 1, 1997, among the trustees of the Issuer named
therein, the Guarantor, as Sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof 1,400,000 Preferred Securities, having an aggregate
stated liquidation preference of $70,000,000, designated the 7.16% Convertible
Preferred Securities (the "Preferred Securities");
WHEREAS as incentive for the Holders to purchase the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein) except that if an Event of Default (as
defined in the Indenture (as defined herein)), has occurred and is continuing,
the rights
<PAGE>
of holders of the Common Securities to receive Guarantee Payments under the
Common Securities Guarantee are subordinated to the rights of Holders of
Preferred Securities to receive Guarantee Payments under this Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
Definitions and Interpretation
SECTION 1.01. Definitions and Interpretation. In this Preferred Securities
Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings assigned to
them in this Section 1.01;
(b) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Guarantee" are to this Preferred Securities Guarantee as modified,
supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred Securities
Guarantee unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee unless otherwise defined
in this Preferred
2
<PAGE>
Securities Guarantee or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Act of 1933, as amended, or any successor rule thereunder.
"Common Securities" means the convertible common securities
representing common undivided beneficial interests in the assets of the Issuer.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of convertible junior debt securities of
the Guarantor designated the 7.16% Convertible Junior Subordinated Deferrable
Interest Debentures Due 2012 held by the Property Trustee of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Preferred Securities to the extent the Issuer shall have funds available
therefor, (ii) the amount payable upon redemption to the extent the Issuer has
funds available therefor, with respect to any Preferred Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Preferred Securities
as provided in the Declaration), the lesser of (a) the aggregate of the
3
<PAGE>
liquidation preference and all accrued and unpaid Distributions on the Preferred
Securities to the date of payment, to the extent the Issuer shall have funds
available therefor, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders upon liquidation of the Issuer (in either
case, the "Liquidation Distribution"). If an event of default under the
Indenture has occurred and is continuing, the rights of holders of the Common
Securities to receive payments under the Common Securities Guarantee are
subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments.
"Holder" means any holder, as registered on the books and records of
the Issuer of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives or agents of the Preferred
Guarantee Trustee.
"Indenture" means the Indenture dated as of June 1, 1997, among the
Guarantor (the "Debenture Issuer") and The Bank of New York, as trustee, and any
indenture supplemental thereto pursuant to which the Debentures are to be issued
to the Property Trustee of the Issuer.
"Majority in liquidation preference of the Preferred means, except as
provided by the Trust Indenture Act, Holder(s) of Preferred Securities, voting
separately as a class, representing more than 50% of the stated liquidation
preference (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all Preferred Securities then
outstanding.
4
<PAGE>
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman of the Board, President or a Vice President,
and by the Treasurer, an Assistant Treasurer, the Controller, the Secretary or
an Assistant Secretary of such Person, and delivered to the Preferred Guarantee
Trustee. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Preferred Securities Guarantee shall
include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee Trustee" means The Bank of New York until a
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.
5
<PAGE>
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any vice-president, any assistant vice-president, any assistant
secretary, any assistant treasurer, any trust officer or assistant trust officer
or any other officer of the Preferred Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This Preferred
Securities Guarantee is subject to the provisions of the Trust Indenture Act
that are required to be part of this Preferred Securities Guarantee, which are
incorporated by reference hereto, and shall, to the extent applicable, be
governed by such provisions; and
(b) If and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.02. Lists of Holders of Securities. (a) The Guarantor shall
provide the Preferred Guarantee Trustee (i) within 14 days after January 31 and
July 31 of
6
<PAGE>
each year, a list, in such form as the Preferred Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the Preferred
Securities ("List of Holders") as of such date; provided that the Guarantor
shall not be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the
Preferred Guarantee Trustee by the Guarantor, and (ii) at any other time, within
30 days of receipt by the Guarantor of a written request for a List of Holders
as of a date no more than 14 days before such List of Holders is given to the
Preferred Guarantee Trustee. The Preferred Guarantee Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Preferred Guarantee Trustee. Within 60 days
after May 15 of each year, commencing in 1998, the Preferred Guarantee Trustee
shall provide to the Holders of the Preferred Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Preferred Guarantee Trustee. The
Guarantor shall provide to the Preferred Guarantee Trustee, the Securities and
Exchange Commission and the Holders such documents, reports and information as
required by Section 314 (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Preferred Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Preferred
Securities Guarantee which relate to any of the mat-
7
<PAGE>
ters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may be
given in the form of an Officers' Certificate.
SECTION 2.06. Events of Default; Waiver. The Holders of a Majority in
liquidation preference of the Preferred Securities may, by vote, on behalf of
the Holders of all of the Preferred Securities, waive any past Event of Default
and its consequences. Upon such waiver, any such Event of Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Preferred Securities Guarantee, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.
SECTION 2.07. Event of Default; Notice. (a) The Preferred Guarantee
Trustee shall, within 90 days after the occurrence of an Event of Default,
transmit by mail, first class postage prepaid, to the Holders of the Preferred
Securities, notices of all Events of Default known to the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such notice;
provided that, except in the case of a default in the payment of a Guarantee
Payment, the Preferred Guarantee Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors and/or Responsible Officers of the Preferred
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default except any Event of Default as to which the Preferred
Guarantee Trustee shall have received written notice or a Responsible Officer
charged with the administration of the Declaration shall have obtained written
notice.
SECTION 2.08. Conflicting Interests. The Declaration shall be deemed to be
specifically described in
8
<PAGE>
this Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
Powers, Duties and Rights of Preferred Guarantee Trustee
SECTION 3.01. Powers and Duties of the Preferred Guarantee Trustee. (a)
This Preferred Securities Guarantee shall be held by the Preferred Guarantee
Trustee for the benefit of the Holders of the Preferred Securities, and the
Preferred Guarantee Trustee shall not transfer this Preferred Securities
Guarantee to any Person except a Holder of Preferred Securities exercising his
or her rights pursuant to Section 5.05(d) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Preferred Guarantee
Trustee.
(b) If an Event of Default has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.06), the Preferred Guarantee Trustee shall exercise such
of the
9
<PAGE>
rights and powers vested in it by this Preferred Securities Guarantee, and use
the same degree of care and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Preferred Securities Guarantee shall be construed
to relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee Trustee
shall be determined solely by the express provisions of this Preferred
Securities Guarantee, and the Preferred Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Preferred Securities Guarantee, and
no implied covenants or obligations shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not
10
<PAGE>
they conform to the requirements of this Preferred Securities
Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation preference of the Preferred Securities, relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee, or exercising any trust or power conferred
upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 3.02. Certain Rights of Preferred Guarantee Trustee. (a) Subject
to the provisions of Section 3.01:
(i) the Preferred Guarantee Trustee may rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
11
<PAGE>
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Guarantor;
(iv) the Preferred Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or registration thereof);
(v) the Preferred Guarantee Trustee may consult with legal counsel
of its selection, and the advice or opinion of such legal counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken
by it hereunder in good faith and in accordance with such advice or
opinion. Such legal counsel may be legal counsel to the Guarantor or any of
its Affiliates and may include any of the Guarantor's employees. The
Preferred Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Preferred Securities
Guarantee from any court of competent jurisdiction.
(vi) the Preferred Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this
Preferred Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Preferred Guar-
12
<PAGE>
antee Trustee such adequate security and indemnity as would satisfy a
reasonable person in the position of the Preferred Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Preferred Guarantee Trustee; provided that nothing contained in this
Section 3.02(a)(vi) shall be taken to relieve the Preferred Guarantee
Trustee, upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Preferred Securities
Guarantee;
(vii) the Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit;
(viii) the Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys, and the Preferred Guarantee Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities, and
the signature of the Preferred Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action; it being understood
that no third party shall be required to inquire as to the authority of the
Preferred Guarantee Trustee to so act or as to its com-
13
<PAGE>
pliance with any of the terms and provisions of this Preferred Securities
Guarantee, both of which shall be conclusively evidenced by the Preferred
Guarantee Trustee's or its agent's taking such action; and
(x) whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request written instructions from the Holders of the Preferred Securities
or, other than with respect to enforcing any remedy or right or taking any
action related thereto, the Guarantor, (ii) may refrain from enforcing such
remedy or right or taking such other action until such written instructions
are received, and (iii) shall be protected in acting in accordance with
such written instructions.
(b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it, in any jurisdiction in which it shall be illegal, or in which the
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.03. Not Responsible for Recitals or Issuance of Guarantee. The
recitals contained in this Preferred Securities Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not assume
any responsibility for their correctness. The Preferred Guarantee Trustee makes
no representations as to the validity or sufficiency of this Preferred
Securities Guarantee.
ARTICLE IV
Preferred Guarantee Trustee
SECTION 4.01. Preferred Guarantee Trustee; ligibility. (a) There shall at
all times be a Preferred Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least Fifty
million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.01(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 3.10(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 3.10(b) of the Trust Indenture
Act.
15
<PAGE>
SECTION 4.02. Appointment, Removal and Resignation of Preferred Guarantee
Trustee. (a) Subject to Section 4.02(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.02(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been appointed or until
its removal or resignation. The Preferred Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of an instrument of removal or resignation, the
Preferred Guarantee Trustee resigning or being removed may petition, at the
expense of the Guarantor, any court of competent jurisdiction for appointment of
a Successor Preferred Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
16
<PAGE>
(f) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.02,
the Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued
to the date of such termination, removal or resignation.
ARTICLE V
Guarantee
SECTION 5.01. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by or on behalf of the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim that the Issuer may
have or assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders.
SECTION 5.02. Subordination. If an Event of Default (as defined in the
Indenture), has occurred and is continuing, the rights of Holders of the Common
Securities to receive Guarantee Payments under the Common Securities Guarantee
are subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments under this Preferred Securities Guarantee.
SECTION 5.03. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of this Preferred Securities Guarantee and of any liability
to which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
17
<PAGE>
SECTION 5.04. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Preferred Securities Guarantee
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities
to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, the amount payable upon redemption,
Liquidation Distribution or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the
Preferred Securities (other than an extension of time for payment of
Distributions, the amount payable upon redemption, Liquidation Distribution
or other sum payable that results from the extension of any interest
payment period on the Debentures or any extension of the maturity date of
the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
18
<PAGE>
(e) any invalidity of, or defect or deficiency in the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.04 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders or any other Person to give
notice to, or obtain consent of, the Guarantor with respect to the happening of
any of the foregoing.
SECTION 5.05. Rights of Holders. The Guarantor expressly acknowledges
that:
(a) This Preferred Securities Guarantee will be deposited with the
Preferred Guarantee Trustee to be held for the benefit of the Holders.
(b) The Preferred Guarantee Trustee has the right to enforce this
Preferred Securities Guarantee on behalf of the Holders.
(c) The Holders of a Majority in liquidation preference of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Preferred Securities Guarantee or
exercising any trust or power conferred upon the Preferred Guarantee
Trustee under this Preferred Securities Guarantee.
(d) Any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Preferred Securities Guarantee, without first instituting a legal
proceeding
19
<PAGE>
against the Issuer, the Preferred Guarantee Trustee or any other Person.
SECTION 5.06. Guarantee of Payment. This Preferred Securities Guarantee
creates a guarantee of payment and not of collection. This Preferred Securities
Guarantee will not be discharged except by payment of the Guarantee Payments in
full (without duplication of amounts theretofore paid by the Issuer) or upon
distribution of Debentures to Holders as provided in the Declaration.
SECTION 5.07. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders of Preferred Securities against the Issuer in respect
of any amounts paid to such Holders by the Guarantor under this Preferred
Securities Guarantee and shall have the right to waive payment by the Issuer
pursuant to Section 5.01; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be entitled to
enforce or exercise any right that it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of payment
under this Preferred Securities Guarantee, if, at the time of any such payment,
any amounts are due and unpaid under this Preferred Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.08. Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities, and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Preferred Securities Guarantee notwithstanding the occurrence of
any event referred to in subsections (a) through (g), inclusive, of Section 5.04
hereof.
SECTION 5.09. Conversion. The Guarantor acknowledges its obligation to
issue and deliver common stock upon the conversion of the Preferred Securities.
20
<PAGE>
ARTICLE VI
Limitation of Transactions; Subordination
SECTION 6.01. Limitation of Transactions. So long as any Preferred
Securities remain outstanding, if there shall have occurred an Event of Default,
an event that, with the giving of notice or the lapse of time or both, would
constitute an Event of Default under the Indenture or a selection by the
Guarantor of an Extended Interest Payment Period as provided in the Indenture
and such period, or any extension thereof, shall be continuing, then (a) the
Guarantor shall not declare or pay any dividend on, or make any distribution
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock (other than stock dividends paid by the
Guarantor which stock dividends consist of the stock of the same class as that
on which the dividend is being paid and other than any declaration of a dividend
in connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto), (b) the Guarantor shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Guarantor which rank pari
passu with or junior to the Debentures and (c) shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Preferred
Securities Guarantee).
SECTION 6.02. Ranking. This Preferred Securities Guarantee will constitute
an unsecured obligation of the Guarantor and will rank (i) subordinate and
junior in right of payment to all other liabilities of the Guarantor, except any
liabilities that may be made pari passu expressly by their terms, (ii) pari
passu with the most senior preferred or preference stock now or hereafter issued
by the Guarantor and with any guarantee now or hereafter entered into by the
Guarantor in respect of any preferred or preference stock or
21
<PAGE>
Preferred Security of any Affiliate of the Guarantor, and (iii) senior to the
Guarantor's common stock.
ARTICLE VII
Termination
SECTION 7.01. Termination. This Preferred Securities Guarantee shall
terminate upon (i) full payment of the amount payable upon redemption of all
Preferred Securities, (ii) the distribution of the Guarantor's common stock to
the Holders in respect of the conversion of the Preferred Securities into the
Guarantor's common stock or the distribution of the Debentures to the Holders of
all of the Preferred Securities or (iii) full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Preferred Securities Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any Holder of
Preferred Securities must restore payment of any sums paid under the Preferred
Securities or under this Preferred Securities Guarantee.
ARTICLE VIII
Indemnification
SECTION 8.01. Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Preferred Securities Guarantee or
by law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence
22
<PAGE>
or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Preferred Securities might properly be paid.
SECTION 8.02. Indemnification. (a) The Guarantor agrees to indemnify each
Indemnified Person for, and to hold each Indemnified Person harmless against,
any and all loss, liability or expense including taxes (other than taxes based
on the income of such Indemnified Person) incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration or the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.02 shall survive the termination of
this Preferred Securities Guarantee.
(b) To the fullest extent permitted by applicable law, expenses (including
legal fees and expenses) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be advanced
by the Guarantor prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the Guarantor of an undertaking by or on
behalf of the Indemnified Person to repay such amount if it shall be
23
<PAGE>
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 8.02(a).
(c) No Indemnified Person shall claim or exact any lien or charge on any
Guarantee Payments as a result of any amount due to it under this Preferred
Securities Guarantee.
ARTICLE IX
Miscellaneous
SECTION 9.01. Successors and Assigns. All guarantees and agreements
contained in this Preferred Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. Except in connection with any permitted merger or consolidation of
the Guarantor with or into another entity or any permitted sale, transfer or
lease of the Guarantor's assets to another entity, the Guarantor may not assign
its rights or delegate its obligations under the Preferred Securities Guarantee
without the prior approval of the Holders of at least 66-2/3% of the aggregate
stated liquidation preference of the Preferred Securities then outstanding.
SECTION 9.02. Amendments. Except with respect to any changes that do not
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of at least 66-2/3% in liquidation preference of
all the outstanding Preferred Securities. The provisions of Section 12.02 of the
Declaration with respect to meetings of Holders of the Securities apply to the
giving of such approval.
SECTION 9.03. Notices. All notices provided for in this Preferred
Securities Guarantee shall be in writing, duly signed by the party giving such
notice, and shall be
24
<PAGE>
delivered, telecopied or mailed by first-class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address
as the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attn: Corporate Trust
Trustee Administration
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of
to the Holders of the Preferred Securities):
DT Industries, Inc.
Corporate Centre
1949 E. Sunshine
Suite 2-300
Springfield, MO 65804
(c) If given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.04. Benefit. This Preferred Securities Guarantee is solely for
the benefit of the Holders of the
25
<PAGE>
Preferred Securities and, subject to Section 3.01(a), is not separately
transferable from the Preferred Securities.
SECTION 9.05. Governing Law. THIS PREFERRED SECURITIES GUARANTEE SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
26
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
DT INDUSTRIES, INC., as Guarantor,
By: /s/ Bruce P. Erdel
------------------------------------
Name: Bruce P. Erdel
Title: Vice President-Finance
THE BANK OF NEW YORK, as
Preferred Guarantee Trustee,
By: /s/ Timothy J. Shea
------------------------------------
Name: Timothy J. Shea
Title: Assistant Treasurer
27
DICKSTEIN SHAPIRO MORIN & OSHINSKY LLP
2101 L Street, N.W.
Washington, DC 20037-1526
(202) 785-9700
July 8, 1997
DT Capital Trust
DT Industries, Inc.
Suite 2-300
1949 E. Sunshine
Springfield, MO 65804
Re: Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as counsel to DT Industries, Inc., a Delaware corporation
(the "Company"), and DT Capital Trust, a Delaware business trust (the "Trust"),
in connection with the preparation of a Registration Statement on Form S-3 (the
"Registration Statement") filed by the Company and the Trust with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, pertaining
to the registration under the Act of (i) 1,400,000 7.16% Convertible Preferred
Securities (liquidation preference $50 per Convertible Preferred Security) (the
"Preferred Securities") of the Trust representing undivided beneficial interests
in the assets of the Trust; (ii) 7.16% Convertible Junior Subordinated
Deferrable Interest Debentures Due 2012 (the "Convertible Junior Subordinated
Debentures") of the Company which may be distributed under certain circumstances
to the holders of the Preferred Securities; (iii) the shares of common stock,
par value $0.01 per share (the "Common Stock"), of the Company issuable upon
conversion of the Preferred Securities and the Convertible Junior Subordinated
Debentures; and (iv) the Preferred Securities Guarantee of the Company (as
defined below).
The Preferred Securities were issued pursuant to the Amended and Restated
Declaration of Trust of the Trust, dated as of June 1, 1997 (the "Declaration"),
among the Company, as sponsor, Stephen J. Gore, Bruce P. Erdel and Gregory D.
Wilson,
<PAGE>
DT Capital Trust
DT Industries, Inc.
July 8 , 1997
Page 2
as Regular Trustees, The Bank of New York (Delaware), as Delaware trustee, and
The Bank of New York, as Property Trustee, and guaranteed (the "Preferred
Securities Guarantee") by the Company as to the payment of distributions and as
to payments on liquidation, redemption and otherwise pursuant to the Preferred
Securities Guarantee Agreement, dated June 12, 1997 (the "Preferred Securities
Guarantee Agreement"), between the Company and The Bank of New York, as Trustee.
The proceeds from the sale by the Trust of the Preferred Securities were
invested in the Convertible Junior Subordinated Debentures, which were issued
pursuant to an Indenture, dated as of June 1, 1997 between the Company and The
Bank of New York.
Capitalized terms used in this opinion and not otherwise defined herein
shall have the meanings ascribed to them in the Registration Statement.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Company, we have
assumed that such parties had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and that such documents constitute valid and binding
obligations of such parties.
For the purposes of giving this opinion, we have examined and are familiar
with originals or copies, certified or otherwise identified to our satisfaction,
of such documents, corporate records and other instruments as we have deemed
necessary or appropriate for purposes of this opinion.
Based upon and subject to the foregoing, we are of the opinion that:
<PAGE>
DT Capital Trust
DT Industries, Inc.
July 8 , 1997
Page 3
(i) The shares of Common Stock initially issuable upon conversion
of the Preferred Securities and the Convertible Junior Subordinated
Debentures have been duly authorized and reserved for issuance upon
conversion, and, when certificates representing the Common Stock in
the form of the specimen certificate examined by us have been manually
signed by an authorized officer of the transfer agent and registrar
for the Common Stock and, if and when issued upon conversion of the
Preferred Securities and the Convertible Junior Subordinated
Debentures, such Common Stock will be validly issued, fully paid and
nonassessable;
(ii) The Preferred Securities Guarantee is a valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium, or other similar laws now or hereafter in effect relating
to creditor's rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at
law or in equity);
(iii) The Convertible Junior Subordinated Debentures are valid
and binding obligations of the Company, entitled to the benefits of
the Indenture and enforceable against the Company in accordance with
their terms, except to the extent that enforcement thereof may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights generally and (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in
equity).
We are licensed to practice law in the District of Columbia and the State
of New York, and do not hold ourselves out
<PAGE>
DT Capital Trust
DT Industries, Inc.
July 8 , 1997
Page 4
as being conversant with the law of any jurisdiction other than the federal laws
of the United States of America, the District of Columbia, the State of New York
and, to the extent required by the foregoing opinion, the Delaware General
Corporation Law. No other opinion is expressed herein as to the laws of any
other jurisdiction.
This opinion is delivered to you in connection with the Registration
Statement, and may not be relied upon by any other person or for any other
purpose.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the reference to this firm under the
caption "Legal Matters" in the Prospectus contained in the Registration
Statement.
Very truly yours,
/s/ Dickstein Shapiro Morin & Oshinsky LLP
Morris, Nichols, Arsht & Tunnell
1201 North Market Street
P. O. Box 1347
Wilmington, Delaware 19899-1347
July 8, 1997
DT Capital Trust
c/o DT Industries, Inc.
Suite 2-300
1949 E. Sunshine
Springfield, Missouri 65804
Re: DT Capital Trust
Ladies and Gentlemen:
We have acted as special Delaware counsel to DT Capital Trust, a Delaware
statutory business trust (the "Trust"), in connection with certain matters
relating to the preparation of a Registration Statement (and the Prospectus
forming a part thereof) on Form S-3 to be filed with the Securities and Exchange
Commission (the "Commission") by the Trust and DT Industries, Inc. (the
"Company") on or about the date hereof (the "Registration Statement"), relating
to the registration with the Commission of the Preferred Securities of the
Trust.
The Preferred Securities have been issued pursuant to (i) a Purchase
Agreement dated June 12, 1997 (the "Purchase Agreement") among the several
purchasers named on Schedule A (the "Purchasers") thereto, the Trust and the
Company and (ii) the Amended and Restated Declaration of Trust of the Trust
dated as of June 1, 1997 (the "Governing Instrument"). Capitalized terms used
herein and not otherwise herein defined are used as defined in the Governing
Instrument.
In rendering this opinion, we have examined and relied upon copies of the
following documents in the forms provided to us: the Certificate of Trust of the
Trust as filed in the Office of the Secretary of State of the State of Delaware
(the "State Office") on May 21, 1997 (the "Certificate"); a Declaration of Trust
of the Trust dated as of May 21, 1997 (the "Original Governing Instrument"); the
Governing Instrument; the Forms and Specimens of Preferred Security and Common
Security; the Terms of Preferred Securities and Common Securities; the form of
Indenture dated as of June 1, 1997 between the Company and The Bank of New York,
as
<PAGE>
DT Capital Trust
July 8, 1997
Page 2
Trustee; the Preferred Securities Guarantee Agreement by the Company and The
Bank of New York, as Trustee, dated June 12, 1997; the Common Securities
Guarantee Agreement by the Company dated June 12, 1997; the Purchase Agreement;
the Trust's Confidential Offering Memorandum dated June 12, 1997 relating to the
Preferred Securities (the "Offering Memorandum"); the Registration Rights
Agreement dated June 12, 1997 among the Trust, the Company and the Purchasers;
the Registration Statement; and a certification of good standing of the Trust
obtained as of a recent date from the State Office. In such examinations, we
have assumed the genuineness of all signatures, the conformity to original
documents of all documents submitted to us as drafts or copies or forms of
documents to be executed and the legal capacity of natural persons to complete
the execution of documents. We have further assumed for purposes of this
opinion: (i) the due formation or organization, valid existence and good
standing of each entity (other than the Trust) that is a party to any of the
documents reviewed by us under the laws of the jurisdiction of its respective
formation or organization; (ii) the due authorization, execution and delivery
by, or on behalf of, each of the parties thereto of the above-referenced
documents (including, without limitation, the due authorization, execution and
delivery of the Governing Instrument and the Purchase Agreement prior to the
first issuance of Preferred Securities); (iii) that no event has occurred
subsequent to the filing of the Certificate that would cause a dissolution or
liquidation of the Trust under the Original Governing Instrument or the
Governing Instrument, as applicable; (iv) that the activities of the Trust have
been and will be conducted in accordance with the Original Governing Instrument
or the Governing Instrument, as applicable, and the Delaware Business Trust Act,
12 Del.C. Sections 3801 et seq. (the "Delaware Act"); (v) that each Holder of
Preferred Securities has made payment of the required consideration therefor and
received a Preferred Securities Certificate in consideration thereof in
accordance with the terms and conditions of the Governing Instrument, the
Offering Memorandum and the Purchase Agreement; (vi) that the Preferred
Securities have been issued and sold to, and held or transferred by, the
Preferred Securities Holders (and any subsequent transferee), and all transfers
have been made, in accordance with the terms, conditions, requirements and
procedures set forth in the Governing Instrument, the Offering Memorandum and
the Purchase Agreement; (vii) none of the Preferred Securities have been called
for redemption, redeemed, converted or canceled (except in connection with a
permitted transfer) and all of the Preferred Securities remain outstanding; and
(viii) that the documents examined by us are in full force and effect, express
the entire understanding of the parties thereto with respect to the subject
matter thereof and have not been modified, supplemented or otherwise amended,
except as herein referenced. No opinion is expressed with respect to the
requirements of, or compliance with, federal or state securities or blue sky
laws. We have not
<PAGE>
DT Capital Trust
July 8, 1997
Page 3
participated in the preparation of the Registration Statement or any other
offering materials relating to the Preferred Securities, and we assume no
responsibility for their contents. As to any fact material to our opinion, other
than those assumed, we have relied without independent investigation on the
above-referenced documents and certificates and on the accuracy, as of the date
hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that:
1. The Trust is a duly created and validly existing statutory business
trust in good standing under the laws of the State of Delaware.
2. The Preferred Securities constitute validly issued and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
beneficial interests in the assets of the Trust.
3. Under the Delaware Act and the terms of the Governing Instrument, each
Preferred Security Holder of the Trust, in such capacity, will be entitled to
the same limitation of personal liability as that extended to stockholders of
private corporations for profit organized under the General Corporation Law of
the State of Delaware; provided, however, we express no opinion with respect to
the liability of any Preferred Security Holder who is, was or may become a named
Trustee of the Trust. We note that pursuant to Section 11.04 of the Governing
Instrument, the Trust may withhold amounts otherwise distributable to a Holder
and pay over such amounts to the applicable jurisdictions in accordance with
federal, state and local law and any amount withheld will be deemed to have been
distributed to such Holder and that, pursuant to the Governing Instrument,
Preferred Security Holders may be obligated to make payments or provide
indemnity or security under the circumstances set forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the Prospectus. In giving this consent, we do not thereby admit that
we come within the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regula- tions of the
Commission thereunder. This opinion speaks only as of the date hereof and is
based on our understandings and assumptions as to present facts, and on our
review of the above-referenced documents and the application of Delaware law as
the same exist as of the date hereof, and we undertake no obligation to update
or supplement this opinion after the date hereof for the benefit of any person
or entity with respect to any facts or circumstances
<PAGE>
DT Capital Trust
July 8, 1997
Page 4
that may hereafter come to our attention or any changes in facts or law that may
hereafter occur or take effect. This opinion is intended solely for the benefit
of the addressee hereof in connection with the matters contemplated hereby and
may not be relied on by any other person or entity or for any other purpose
without our prior written consent.
Very truly yours,
/s/ MORRIS, NICHOLS, ARSHT & TUNNELL
DICKSTEIN SHAPIRO MORIN & OSHINSKY LLP
2101 L Street, N.W.
Washington, DC 20037-1526
202-785-9700
July 8, 1997
DT Capital Trust
DT Industries, Inc.
Corporate Centre
Suite 2-300
1949 E. Sunshine
Springfield, Missouri 65804
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as special counsel for DT Industries, Inc., a Delaware
corporation (the "Company"), and DT Capital Trust, a Delaware business trust
(the "Trust"), in connection with the preparation of a registration statement on
Form S-3 (the "Registration Statement") filed by the Company and the Trust with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "1933 Act"), pertaining to the registration of (i)
1,400,000 7.16% Convertible Preferred Securities (liquidation preference $50 per
preferred security) (the "Preferred Securities") of the Trust representing
undivided beneficial interests in the assets of the Trust; (ii) 7.16%
Convertible Junior Subordinated Deferrable Interest Debentures Due 2012 (the
"Convertible Junior Subordinated Debentures") issued by the Company to the Trust
in connection with the sale of the Preferred Securities; (iii) the shares of
common stock, par value $0.01 per share (the "Common Stock"), of the Company
issuable upon conversion of the Convertible Junior Subordinated Debentures; and
(iv) the preferred securities guarantee of the Company which guarantees
distributions and payments upon liquidation, redemption and otherwise on the
Preferred Securities pursuant to the Preferred Securities Guarantee Agreement,
dated June 12, 1997, between the Company and the Bank of New York, a New York
banking corporation, as trustee.
We hereby confirm that, although the discussion set forth in the
Registration Statement under the heading "UNITED STATES TAXATION" does not
purport to discuss all possible United States federal income tax consequences of
the purchase, ownership
<PAGE>
DT Capital Trust
DT Industries, Inc.
July 8, 1997
Page 2
and disposition of Preferred Securities, in our opinion such discussion
constitutes, in all material respects, a fair and accurate summary of the United
States federal income tax consequences of the purchase, ownership and
disposition of Preferred Securities, based upon current law. It is possible that
contrary positions may be taken by the Internal Revenue Service and that a court
may agree with such contrary positions.
This opinion is furnished to you solely for your benefit in connection with
the filing of the Registration Statement and is not to be used, circulated,
quoted or otherwise referred to for any other purpose or relied upon by any
other person for any purpose without our prior written consent. We hereby
consent to the filing of this opinion as an exhibit to the Registration
Statement. We also consent to the reference to this firm under the headings
"LEGAL MATTERS" and "UNITED STATES TAXATION" in the Prospectus contained in the
Registration Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the 1933 Act or the rules and regulations of the Commission promulgated
thereunder. This opinion is expressed as of the date hereof and we disclaim any
undertaking to advise you of any subsequent changes of the facts stated or
assumed herein or any subsequent changes in applicable law.
Very truly yours,
/s/ Dickstein Shapiro Morin & Oshinsky LLP
DT CAPITAL TRUST
7.16% Convertible Preferred Securities
(Liquidation Preference $50 per
Convertible Preferred Security)
Guaranteed by, and Convertible into
Common Stock of, DT Industries, Inc.
REGISTRATION RIGHTS AGREEMENT
June 12, 1997
To the Purchasers Whose Names
Appear in the Acceptance Form
at the End Hereof
Dear Sirs:
DT Capital Trust, a statutory business trust formed under the laws of the
State of Delaware (the "Trust") by DT Industries, Inc., a Delaware corporation
(the "Guarantor"), proposes to issue and sell to each of you, (each a
"Purchaser", and collectively, the "Purchasers"), upon the terms set forth in a
purchase agreement dated June 12, 1997 (the "Purchase Agreement"), among the
Purchasers, the Guarantor and the Trust up to 1,400,000 of its 7.16% Convertible
Preferred Securities (liquidation preference $50 per Convertible Preferred
Security) (the "Preferred Securities"). As an inducement to you to enter into
the Purchase Agreement and in satisfaction of a condition to your obligations
thereunder, the Trust and the Guarantor agree with you, (i) for your benefit and
(ii) for the benefit of the holders from time to time of the Preferred
Securities, the 7.16% Convertible Junior Subordinated Deferrable Interest
Debentures Due 2012 (the "Debentures") and the Common Stock, par value $.01 per
share (the "Common Stock"), of the Guarantor issuable upon conversion of the
Preferred Securities or the Debentures (collectively, together with the
Guarantee of the Guarantor of the Preferred Securities, the "Securities"),
including the
<PAGE>
Purchasers (each of the foregoing a "Holder" and together the
"Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition shall
have their respective meanings set forth in or pursuant to the Purchase
Agreement or, if not defined therein, in the Confidential Offering Memorandum
dated June 12, 1997, in respect of the Preferred Securities or, if not defined
therein, in the Amended and Restated Declaration of Trust dated as of June 1,
1997 (the "Declaration") relating to the Trust. As used in this Agreement, the
following capitalized defined terms shall have the following meanings:
"Act" or "Securities Act" means the Securities Act of 1933, as amended.
"Affiliate" of any specified person means any other person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such specified person. For purposes of this definition, control of a
person means the power, direct or indirect, to direct or cause the direction of
the management and policies of such person whether by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Managing Underwriters" means the investment banker or investment bankers
and manager or managers that shall administer an underwritten offering, if any,
as set forth in Section 6 hereof.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
2
<PAGE>
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Securities.
"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Period" has the meaning set forth in Section 2(b)
hereof.
"Shelf Registration Statement" means a "shelf" registration statement of
the Trust and the Guarantor pursuant to the provisions of Section 2 hereof filed
with the Commission which covers some or all of the Securities, as applicable,
on an appropriate form under Rule 415 under the Act, or any similar rule that
may be adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Underwriter" means any underwriter of Securities in connection with an
offering thereof under a Shelf Registration Statement.
2. Shelf Registration. (a) The Trust and the Guarantor shall as promptly
as practicable prepare and, not later than August 15, 1997, shall file with the
Commission and thereafter shall each use its best efforts to cause to be
declared effective under the Act as soon as practicable, but in no event later
than December 15, 1997, a Shelf Registration Statement relating to the offer and
sale of the Securities by the Holders from time to time in accordance with the
methods of distribution elected by such Holders and set forth in such Shelf
Registration Statement; provided, however, that no Holder shall be entitled to
have the Securities held by it covered by such Shelf Registration unless such
Holder is in compliance with Section 3(m) hereof.
(b) The Trust and the Guarantor shall each use its best efforts (i) to
keep the Shelf Registration Statement continuously effective in order to permit
the Prospectus forming part thereof to be usable by Holders for so long as shall
be required by Rule 144(k) under the Securities Act or any successor
3
<PAGE>
rule or regulation thereto after the date the Shelf Registration Statement is
declared effective or such shorter period that will terminate upon the earlier
of the following: (A) when all the Preferred Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement, (B) when all Debentures issued to Holders in respect of Preferred
Securities that had not been sold pursuant to the Shelf Registration Statement
have been sold pursuant to the Shelf Registration Statement, (C) when all shares
of Common Stock issued upon conversion of any such Preferred Securities or any
such Debentures that had not been sold pursuant to the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement and (D)
when, in the written opinion of counsel to the Trust and the Guarantor, all
outstanding Securities may be sold without registration under the Act (in any
such case, such period being called the "Shelf Registration Period") and (ii)
after the effectiveness of the Shelf Registration Statement, promptly upon the
request of any Holder to take any action reasonably necessary to register the
sale of any Securities of such Holder and to identify such Holder as a selling
securityholder. The Trust and the Guarantor shall be deemed not to have used
their best efforts to keep the Shelf Registration Statement effective during the
requisite period if either the Trust or the Guarantor voluntarily takes any
action that would result in Holders of Securities covered thereby not being able
to offer and sell any such Securities during that period, unless (i) such action
is required by applicable law or (ii) upon the occurrence of any event
contemplated by paragraph 3(c)(2)(iii) below, such action is taken by the Trust
or the Guarantor in good faith and for valid business reasons and the Trust and
the Guarantor thereafter promptly comply with the requirements of paragraph 3(i)
below.
3. Registration Procedures. In connection with any Shelf Registration
Statement, the following provisions shall apply:
(a) The Trust and the Guarantor shall furnish to the Holders, prior to the
filing thereof with the Commission, a copy of any Shelf Registration Statement,
and each amendment thereof and each amendment or supplement, if any, to the
Prospectus included therein.
4
<PAGE>
(b) The Trust and the Guarantor shall take such action as may be necessary
so that (i) any Shelf Registration Statement and any amendment thereto and any
Prospectus forming part thereof and any amendment or supplement thereto (and
each report or other document incorporated therein by reference in each case)
complies in all material respects with the Securities Act and the Exchange Act
and the respective rules and regulations thereunder, (ii) any Shelf Registration
Statement and any amendment thereto does not, when it becomes effective, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
and (iii) any Prospectus forming part of any Shelf Registration Statement, and
any amendment or supplement to such Prospectus, does not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements, in the light of the circumstances under which they were
made, not misleading.
(c) (1) The Guarantor shall advise the Purchasers and, in the case of
clause (i), the Holders and, if requested by the Purchasers or any such Holder,
confirm such advice in writing:
(i) when a Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto
has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the
Prospectus included therein or for additional information.
(2) The Guarantor shall advise the Purchasers and the Holders and,
if requested by the Purchasers or any such Holder, confirm such advice in
writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement
or the
5
<PAGE>
initiation of any proceedings for that purpose;
(ii) of the receipt by the Trust or the Guarantor of any
notification with respect to the suspension of the
qualification of the securities included therein for sale in
any jurisdiction or the initiation of any proceeding for such
purpose; and
(iii) of the happening of any event that requires the
making of any changes in the Shelf Registration Statement or the
Prospectus so that, as of such date, the Registration Statement
and the Prospectus do not contain an untrue statement of a
material fact and do not omit to state a material fact required
to be stated therein or necessary to make the statements therein
(in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading (which advice shall
be accompanied by an instruction to suspend the use of the
Prospectus until the requisite changes have been made).
(d) The Guarantor shall use its best efforts to prevent the issuance, and
if issued to obtain the withdrawal, of any order suspending the effectiveness of
any Shelf Registration Statement at the earliest possible time.
(e) The Trust and the Guarantor shall, upon written request of a Holder,
furnish to each Holder of Securities included within the coverage of any Shelf
Registration Statement, without charge, at least one copy of such Shelf
Registration Statement and any post-effective amendment thereto (including any
reports or other documents incorporated therein by reference), including
financial statements and schedules, and, if the Holder so requests in writing,
all exhibits (including those incorporated by reference).
(f) The Trust and the Guarantor shall, during the Shelf Registration
Period, deliver to each Holder of Securities
6
<PAGE>
included within the coverage of any Shelf Registration Statement, without
charge, as many copies of the Prospectus (including each preliminary Prospectus)
included in such Shelf Registration Statement and any amendment or supplement
thereto as such Holder may reasonably request; and each of the Trust and the
Guarantor consents to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of Securities in connection with the
offering and sale of the Securities covered by the Prospectus or any amendment
or supplement thereto during the Shelf Registration Period.
(g) Prior to any offering of Securities pursuant to any Shelf Registration
Statement, the Trust and the Guarantor shall register or qualify or cooperate
with the Holders of Securities included therein and their respective counsel in
connection with the registration or qualification of such Securities for offer
and sale under the securities or blue sky laws of such jurisdictions as any such
Holders reasonably request in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such jurisdictions of the
Securities covered by such Shelf Registration Statement; provided, however, that
neither the Trust nor the Guarantor will be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process or to taxation in
any such jurisdiction where it is not then so subject.
(h) Unless any Securities shall be in book-entry only form, the Trust and
the Guarantor shall cooperate with the Holders of Securities to facilitate the
timely preparation and delivery of certificates representing Securities to be
sold pursuant to any Shelf Registration Statement free of any restrictive
legends and in such permitted denominations and registered in such names as
Holders may request in connection with the sale of Securities pursuant to such
Shelf Registration Statement.
(i) Upon the occurrence of any event contemplated by paragraph
3(c)(2)(iii) above, the Trust and the Guarantor shall promptly prepare a
post-effective amendment to any Shelf Registration Statement or an amendment or
supplement to the related Prospectus or file any other required document so
that,
7
<PAGE>
as thereafter delivered to Purchasers of the Securities included therein, the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading. If the Trust or
the Guarantor notifies the Holders of the occurrence of any event contemplated
by paragraph 3(c)(2)(iii) above, the Holders shall suspend the use of the
Prospectus until the requisite changes to the Prospectus have been made.
(j) Not later than the effective date of any Shelf Registration Statement
hereunder, the Trust and the Guarantor shall provide a CUSIP number for the
Preferred Securities and the Debentures in the event of and at the time of any
distribution thereof to Holders, registered under such Shelf Registration
Statement, and provide the applicable trustee with certificates for such
Securities, in a form eligible for deposit with The Depository Trust Company.
(k) The Trust and the Guarantor shall use their best efforts to comply
with all applicable rules and regulations of the Commission and shall make
generally available to their security holders or otherwise in accordance with
Section 11(a) of the Securities Act as soon as practicable after the effective
date of the applicable Shelf Registration Statement an earning statement
satisfying the provisions of Section 11(a) of the Securities Act.
(l) The Trust and the Guarantor shall cause the Indenture, the Declaration
and the Guarantee to be qualified under the Trust Indenture Act in a timely
manner.
(m) The Trust and the Guarantor may require each Holder of Securities to
be sold pursuant to any Shelf Registration Statement to furnish to the Trust and
the Guarantor such information regarding the Holder and the distribution of such
Securities as the Trust and the Guarantor may from time to time reasonably
require for inclusion in such Shelf Registration Statement and the Guarantor and
the Trust may exclude from such registration the Securities of any Holder that
fails to furnish such information within a reasonable time after receiving such
request.
8
<PAGE>
(n) The Trust and the Guarantor shall, if requested, promptly incorporate
in a Prospectus supplement or post-effective amendment to a Shelf Registration
Statement, such information as the Managing Underwriters reasonably agree should
be included therein and to which the Trust and the Guarantor do not reasonably
object and shall make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after they are notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment.
(o) The Trust and the Guarantor shall enter into such customary agreements
(including underwriting agreements in customary form) to take all other
appropriate actions in order to expedite or facilitate the registration or the
disposition of the Securities, and in connection therewith, if an underwriting
agreement is entered into, cause the same to contain indemnification provisions
and procedures substantially identical to those set forth in Section 5 (or such
other provisions and procedures acceptable to the Managing Underwriters, if any)
with respect to all parties to be indemnified pursuant to Section 5.
(p) The Trust and the Guarantor shall (i) make reasonably available for
inspection by the Holders of Securities to be registered thereunder, any
underwriter participating in any disposition pursuant to such Shelf Registration
Statement, and any attorney, accountant or other agent retained by such Holders
or any such underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Trust and the Guarantor and its
subsidiaries; (ii) cause the Guarantor's officers, directors and employees and
the Issuer Trustees to supply all relevant information reasonably requested by
such Holders or any such underwriter, attorney, accountant or agent in
connection with any such Shelf Registration Statement as is customary for
similar due diligence examinations; provided, however, that any information that
is designated in writing by the Trust and the Guarantor, in good faith, as
confidential at the time of delivery of such information shall be kept
confidential by such Holders or any such underwriter, attorney, accountant or
agent, unless such disclosure is made in connection with a court proceeding or
required by law, or such information becomes available to the public generally
or through a third party without an accompanying obligation of confidentiality;
and
9
<PAGE>
provided further that the foregoing inspection and information gathering shall,
to the greatest extent possible, be coordinated on behalf of the Holders and the
other parties entitled thereto by one counsel designated by and on behalf of
such Holders and other parties; (iii) make such representations and warranties
to the Holders of Securities registered thereunder and the underwriters, if any,
in form, substance and scope as are customarily made by the Guarantor to
underwriters in primary underwritten offerings and covering matters including,
but not limited to, those set forth in the Purchase Agreement; (iv) obtain
opinions of counsel to the Trust and the Guarantor and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Managing Underwriters, if any) addressed to each selling
Holder and the underwriters, if any, covering such matters as are customarily
covered in opinions requested in underwritten offerings and such other matters
as may be reasonably requested by such Holders and underwriters (it being agreed
that the matters to be covered by such opinion shall include, without
limitation, as of the date of the opinion and as of the effective date of the
Shelf Registration Statement or most recent post-effective amendment thereto, as
the case may be, the absence from such Shelf Registration Statement and the
prospectus included therein, as then amended or supplemented, including the
documents incorporated by reference therein, of an untrue statement of a
material fact or the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; (v)
obtain "cold comfort" letters and updates thereof from the independent certified
public accountants of the Guarantor (and, if necessary, any other independent
certified public accountants of any subsidiary of the Guarantor or of any
business acquired by the Company for which financial statements and financial
data are, or are required to be, included in the Shelf Registration Statement),
addressed to each such Holder of Securities registered thereunder and the
underwriters, if any, in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with primary
underwritten offerings; and (vi) deliver such documents and certificates as may
be reasonably requested by any such Holders and the Managing Underwriters,
if any, including those to evidence compliance with Section 3(i) and
with any customary conditions contained in the underwriting agreement or
other agreement into by the Trust and the Guarantor. The
10
<PAGE>
foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of this Section
3(p) shall be performed at each closing under any underwritten offering to the
extent required thereunder.
(q) The Trust and the Guarantor will use its best efforts to cause the
Common Stock relating to such Shelf Registration Statement to be listed on each
securities exchange, if any, on which any shares of Common Stock are then
listed.
(r) The Trust and the Guarantor shall, in the event that any broker-dealer
registered under the Exchange Act shall underwrite any Securities or participate
as a member of an underwriting syndicate or selling group or "assist in the
distribution" (within the meaning of Rule 2720 of the Conduct Rules ("Rule
2720") of the National Association of Securities Dealers, Inc. ("NASD")),
whether as a Holder of such Securities or as an underwriter, a placement or
sales agent or a broker or dealer in respect thereof, or otherwise, assist such
broker or dealer in complying with the requirements of Rule 2720, including,
without limitation, by (A) if Rule 2720 shall so require, engaging a "qualified
independent underwriter" (as defined in Rule 2720) to participate in the
preparation of the Shelf Registration Statement relating to such Securities, to
exercise usual standards of due diligence in respect thereto, (B) indemnifying
any such qualified independent underwriter to the extent of the indemnification
of underwriters provided in Section 5 hereof and (C) providing such information
to such broker-dealer as may be required in order for such broker-dealer to
comply with the requirements of the Conduct Rules of the NASD.
(s) The Trust and the Guarantor shall use their best efforts to take all
other steps necessary to effect the registration, offering and sale of the
Securities covered by the Shelf Registration Statement contemplated hereby.
4. Registration Expenses. Except as otherwise provided in Section 6, the
Guarantor shall bear all fees and expenses incurred in connection with
the performance of its obligations under Sections 2 and 3 hereof and
shall bear or reimburse the Holders for the reasonable fees and
disbursements of one firm of counsel designated by the Guarantor and reasonably
acceptable to the Holders of a majority of the Securities covered
11
<PAGE>
by the Shelf Registration Statement to act as counsel therefor in connection
therewith.
5. Indemnification and Contribution. (a) In connection with any Shelf
Registration Statement, the Trust and the Guarantor, jointly and severally,
agree to indemnify and hold harmless the Purchasers, the officers and directors
of the Purchasers, each Holder of Preferred Securities covered thereby
(including the Purchasers) and each person who controls the Purchasers or any
such Holder within the meaning of either the Securities Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Shelf
Registration Statement as originally filed or in any amendment thereof, or in
any preliminary prospectus or Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that (i) the
Guarantor and the Trust will not be liable in any case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Guarantor by or on behalf of the Purchasers or any such Holder
specifically for inclusion therein and (ii) the foregoing indemnity with respect
to any untrue statement or alleged untrue statement or omission or alleged
omission made in any preliminary prospectus relating to a Shelf Registration
Statement shall not inure to the benefit of any Holder (or any person
controlling such Holder) from whom the person asserting any such loss, claim,
damage or liability purchases any of the Securities that are the subject thereof
if such person did not receive a copy of the final prospectus (or the final
prospectus as supplemented) at or prior
12
<PAGE>
to the written confirmation of the sale of such Securities to such person and
the untrue statement or alleged untrue statement or omission or alleged omission
contained in the preliminary prospectus was corrected in the final prospectus
(or the final prospectus as supplemented). This indemnity agreement will be in
addition to any liability which the Guarantor or the Trust may otherwise have.
The Trust and the Guarantor, jointly and severally, also agree to indemnify
or contribute to Losses (as defined below) of, as provided in Section 5(d), any
underwriters of Securities registered under the Shelf Registration Statement,
their officers, directors, employees and agents and each person who controls
such underwriters on substantially the same basis as that of the indemnification
of the Purchasers and the selling Holders provided in this Section 5(a) and
shall, if requested by any Holder, enter into an underwriting agreement
reflecting such agreement, as provided in Section 3(o) and Section 6 hereof.
(b) Each Holder of Securities covered by a Shelf Registration Statement
(including the Purchasers) severally agrees to indemnify and hold harmless (i)
the Trust and the Guarantor, (ii) each of the directors of the Guarantor, (iii)
each of its officers who signs such Shelf Registration Statement and (iv) each
person who controls the Trust or the Guarantor within the meaning of either the
Securities Act or the Exchange Act to the same extent as the foregoing indemnity
from the Trust and the Guarantor, but only with reference to written information
relating to such Holder furnished to the Guarantor by or on behalf of such
Holder specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any such Holder may otherwise have. Notwithstanding the foregoing, the liability
of each Holder under this subsection (b) shall be limited to the proportion of
any such loss, claim, damage, liability or expense which is equal to the
proportion that the gross proceeds received by such Holder from the sale of
Securities covered by the Shelf Registration Statement bears to the total gross
proceeds received by all Holders from the sale of Securities covered by the
Shelf Registration Statement, but in no event to exceed the amount of such gross
proceeds received by such Holder from the sale of Securities covered by such
Shelf Registration Statement; provided, however, that the limitation
13
<PAGE>
stated in this sentence will not apply to the extent the liability of a Holder
is specifically determined by the applicable adjudicating body not to be
predicated on such party's status as a selling securityholder and to be
predicated instead on (x) such Holder being a director, officer or control
person of the Guarantor or the Trust or (y) the willful misconduct of such
party. A Holder will not be required to enter into any agreement or undertaking
in connection with any registration under this Section 5 providing for any
indemnification or contribution to the Guarantor or the Trust on the part of
such Holder greater than the Holder's obligations under this Section 5(b).
(c) Promptly after receipt by an indemnified party under this Section 5 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 5, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve the indemnifying
party from any liability it may have to any indemnified party otherwise than
under paragraph (a) or (b) above. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of such indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section 5 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on any claims that are the subject
matter of such action.
14
<PAGE>
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 5 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall have a joint and several obligation
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which such
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the sale of Securities covered
by the Shelf Registration Statement which resulted in such Losses; provided,
however, that in no case shall the Purchasers or any subsequent Holder of any
Security be responsible, in the aggregate, for any amount in excess of the
amount by which the net proceeds received by such Holders from the sale of the
Securities pursuant to the Registration Statement exceeds the amount of damages
which such Holders have otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the indemnifying party and the indemnified party shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of such indemnifying party, on the one hand, and such
indemnified party, on the other hand, sale of Securities covered by
the Shelf Registration Statement which resulted in such Losses as well
as any other relevant equitable considerations. Relative fault shall be
determined by reference to whether any alleged untrue statement or
omission relates to information provided by the indemnifying party, on
the one hand, or by the indemnified party, on the other hand. The
parties agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of allocation
which does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 5, each person who controls a Holder within the meaning of either
the Securities Act or the Exchange Act shall have the same rights
15
<PAGE>
to contribution as such Holder, and each person who controls the Guarantor or
the Trust within the meaning of either the Securities Act or the Exchange Act,
each officer of the Guarantor who shall have signed the Shelf Registration
Statement and each director of the Guarantor shall have the same rights to
contribution as the Guarantor, subject in each case to the applicable terms and
conditions of this paragraph (d).
(e) The provisions of this Section 5 will remain in full force and effect,
regardless of any investigation made by or on behalf of any Holder or the
Guarantor or the Trust or any of the officers, directors, employees, agents or
controlling persons referred to in Section 5 hereof, and will survive the sale
by a Holder of Securities covered by the Shelf Registration Statement.
6. Underwritten Offering. The Holders of Securities covered by the Shelf
Registration Statement who desire to do so may sell such Securities in an
underwritten offering. In any such underwritten offering, the investment banker
or bankers and manager or managers that will administer the offering will be
selected by, and the underwriting arrangements with respect thereto will be
approved by, the Holders of a majority of the Securities to be included in such
offering; provided, however, that (i) such investment bankers and managers and
underwriting arrangements must be reasonably satisfactory to the Guarantor and
the Trust and (ii) the Guarantor shall not be obligated to arrange for more than
one underwritten offering during the Shelf Registration Period. No Holder may
participate in any underwritten offering contemplated hereby unless such Holder
(a) agrees to sell such Holder's Securities in accordance with any approved
underwriting arrangements, (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such approved
underwriting arrangements and (c) at least 20% of the outstanding Securities are
included in such underwritten offering. The Holders participating in any
underwritten offering shall be responsible for any expenses customarily borne by
selling securityholders, including underwriting discounts and commissions and
fees and expenses of counsel to the selling securityholders and shall reimburse
the Trust and the Guarantor for the fees and disbursements of their counsel,
their independent public accountants and any printing expenses incurred in
connection with
16
<PAGE>
such underwritten offering. Notwithstanding the foregoing or the provisions of
Section 3(n) hereof, upon receipt of a request from the Managing Underwriter or
a representative of Holders of a majority of the Securities outstanding to
prepare and file an amendment or supplement to the Shelf Registration Statement
and Prospectus in connection with an underwritten offering, the Guarantor may
delay the filing of any such amendment or supplement for up to 90 days if the
Guarantor in good faith has a valid business reason for such delay.
7. Miscellaneous.
(a) No Inconsistent Agreements. The Trust and the Guarantor have not, as
of the date hereof, entered into, nor shall they on or after the date hereof,
enter into, any agreement with respect to their securities or otherwise that is
inconsistent with the rights granted to the Holders herein or otherwise
conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, qualified, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Trust and the Guarantor have obtained the written
consent of the Purchasers.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by
such Holder to the Guarantor in accordance with the provisions
of this Section 7(c);
(2) if to the Purchasers, initially at the applicable
address for each Purchaser set forth in the Purchase Agreement;
and
(3) if to the Trust or the Guarantor, initially at its
address set forth in the Purchase Agreement.
17
<PAGE>
All such notices and communications shall be deemed to have been duly given when
received.
The Purchasers or the Trust and the Guarantor by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(d) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties and the
Holders, including, without the need for an express assignment or any consent by
the Trust or the Guarantor thereto, subsequent Holders of Securities. The Trust
and the Guarantor hereby agree to extend the benefits of this Agreement to any
Holder of Securities and any such Holder may specifically enforce the provisions
of this Agreement as if an original party hereto.
(e) Counterparts. This agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in said State.
(h) Severability. In the event that any one of more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.
18
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Guarantor and you.
Very truly yours,
DT CAPITAL TRUST, by
Stephen J. Gore, solely in his
capacity as trustee and not in his
individual capacity,
By: /s/ Stephen J. Gore
----------------------------------
Name: Stephen J. Gore
Title: Regular Trustee
DT INDUSTRIES, INC.,
By: /s/ Bruce P. Erdel
----------------------------------
Name: Bruce P. Erdel
Title: Vice President-Finance
19
<PAGE>
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
The Northwestern Mutual Life Insurance Company
By: /s/ Richard A. Strait
----------------------------------
Name: Richard A. Strait
Title: Vice President
The Travelers Insurance Company
(I/N/O/ TRAL & Co.)
By: /s/ John W. Petchler
----------------------------------
Name: John W. Petchler
Title: Second Vice President
The Travelers Indemnity Company
(I/N/O/ TRAL & Co.)
By: /s/ John W. Petchler
----------------------------------
Name: John W. Petchler
Title: Second Vice President
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: /s/ Michael P. Hermsen
----------------------------------
Name: Michael P. Hermsen
Title: Managing Director
The foregoing is executed on behalf of the Trust, organized under a Declaration
of Trust, dated April 7, 1988, as amended from time to time. The obligations of
such Trust are not personally binding upon, nor shall resort be had to the
property of, any of the Trustees, shareholders, officers, employees or agents of
such Trust, but the Trust's property only shall be bound.
20
<PAGE>
MASSMUTUAL PARTICIPATION INVESTORS
By: /s/ Michael P. Hermsen
----------------------------------
Name: Michael P. Hermsen
Title: Investment Officer
The foregoing is executed on behalf of the Trust, organized under a Declaration
of Trust, dated September 13, 1985, as amended from time to time. The
obligations of such Trust are not personally binding upon, nor shall resort be
had to the property of, any of the Trustees, shareholders, officers, employees
or agents of such Trust, but the Trust's property only shall be bound.
MASSMUTUAL CORPORATE INVESTORS
By: /s/ Michael P. Hermsen
----------------------------------
Name: Michael P. Hermsen
Title: Investment Officer
MASSMUTUAL CORPORATE VALUE PARTNERS LIMITED,
By Massachusetts Mutual Life Insurance Company, its
Investment Manager
By: /s/ Michael P. Hermsen
----------------------------------
Name: Michael P. Hermsen
Title: Managing Director
MASSMUTUAL HIGH YIELD PARTNERS LLC,
By HYP Management, Inc., as Managing Member
By: /s/ Michael P. Hermsen
----------------------------------
Name: Michael P. Hermsen
Title: Vice President
21
<PAGE>
NOTE
The following page contains a list of Exhibits and Schedules which have
been intentionally omitted by the Registrant.
A copy of any omitted Exhibit or Schedule will be provided to the
Securities and Exchange Commission upon request.
<PAGE>
SCHEDULE A List of names and addresses of Purchasers and liquidation
preference of convertible securities to be purchased
DT Capital Trust
7.16% Convertible Preferred Securities
(liquidation preference $50 per
Convertible Preferred Security)
guaranteed to a limited extent by, and
convertible into Common Stock of,
DT Industries, Inc.
PLACEMENT AGREEMENT
June 12, 1997
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, NY 10010-3629
Dear Sirs:
1. Introductory. DT Capital Trust, a statutory business trust formed under
the laws of the State of Delaware (the "Trust") and DT Industries, Inc., a
Delaware corporation, as depositor of the Trust and as guarantor (the
"Guarantor"), propose, subject to the terms and conditions stated herein, that
the Trust issue and sell 1,400,000 of its 7.16% Convertible Preferred Securities
(liquidation preference $50 per Convertible Preferred Security) (the "Preferred
Securities") representing undivided beneficial ownership interests in the assets
of the Trust, guaranteed by the Guarantor as to the payment of distributions,
and as to payments on liquidation or redemption, to the extent set forth in a
guarantee agreement (the "Guarantee") between the Guarantor and The Bank of New
York, as trustee (the "Guarantee Trustee"). The Preferred Securities will be
sold on a private placement basis pursuant to an exemption under Section 4(2) of
the United States Securities Act of 1933 (the "Securities Act"). The proceeds of
the sale by the Trust of the Preferred Securities and its Common Securities
(liquidation preference $50 per common security) (the "Common Securities") are
to be invested in 7.16% Convertible Junior Subordinated Deferrable Interest
Debentures Due 2012 (the "Convertible Junior Subordinated Debentures") of the
Guarantor, to be issued pursuant to an Indenture (the "Indenture") between the
Guarantor and The Bank of New York, as trustee (the "Debenture Trustee"). The
Preferred Securities are effectively convertible into shares of Common Stock,
par value $.01 per share (the "Common Stock"), of the Guarantor. Holders
(including subsequent transferees) of the Preferred Securities will have the
registration rights set forth in the Registration Rights Agreement (the
"Registration Rights Agreement") to be entered into among
<PAGE>
2
the Trust, the Guarantor and the Purchasers (as defined below). Pursuant to the
Registration Rights Agreement, the Guarantor and the Trust have agreed to file
with the Securities and Exchange Commission (the "Commission") a shelf
registration statement (the "Shelf Registration Statement") pursuant to Rule 415
under the Securities Act of 1933, as amended (the "Securities Act"), to register
sales of the Preferred Securities, the Guarantee, the Convertible Junior
Subordinated Debentures and the shares of Common Stock issuable upon conversion
thereof (collectively, the "Securities") following the sale of the Preferred
Securities contemplated hereby. The Preferred Securities are proposed to be sold
to such purchasers, which may include you (the "Purchasers"), and at such time
(the "Closing Time") as you and the Guarantor mutually agree. Subject to the
terms and conditions stated herein, the Guarantor proposes to appoint you as its
sole or exclusive placement agent in connection with the issuance, offering and
sale of the securities.
Each of the Trust and the Guarantor hereby agrees with you as follows:
2. Representations and Warranties of the Trust and the Guarantor. Each of
the Trust and the Guarantor jointly and severally represents and warrants to
you, and agrees with you, that:
(a) An offering memorandum relating to the Preferred Securities
has been prepared by the Trust and the Guarantor. Such offering
memorandum, as supplemented as of the date of this Agreement, together
with any other document approved by the Guarantor for use in
connection with the contemplated sale of the Preferred Securities or
incorporated by reference thereto are hereinafter collectively
referred to as the "Offering Document". On the date of this Agreement,
the Offering Document does not include any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding sentence does not
apply to statements in or omissions from the Offering Document based
upon written information furnished to the Guarantor by you
specifically for use therein. Except as disclosed in the Offering
Document, on the date of this Agreement, the Guarantor's Annual Report
on Form 10-K most recently filed with the Commission and all reports,
including all amendments thereto (collectively, the "Exchange Act
Reports") which have been filed by the Guarantor with the Commission
or sent to stockholders pursuant to the
<PAGE>
3
Securities Exchange Act of 1934 (the "Exchange Act") since July 1,
1996, taken together, do not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. Such documents, when filed with the
Commission, conformed in all material respects to the requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder.
(b) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Business Trust Act
of the State of Delaware (the "Delaware Business Trust Act") with the
power and authority to own property and conduct its business as
described in the Offering Document, and has conducted and will conduct
no business other than the transactions contemplated by this Agreement
and as described in the Offering Document; the Trust is not a party to
or bound by any agreement or instrument other than this Agreement, the
Amended and Restated Declaration of Trust (the "Trust Agreement")
between the Guarantor and the trustees named therein (the "Trustees")
and the agreements and instruments contemplated by the Trust Agreement
and the Offering Document; the Trust has no liabilities or obligations
other than those arising out of the transactions contemplated by this
Agreement and the Trust Agreement and described in the Offering
Document; and the Trust is not a party to or subject to any action,
suit or proceeding of any nature.
(c) The Guarantor has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Offering Document; and
the Guarantor is duly qualified to do business and in good standing as
a foreign corporation in each jurisdiction in which its ownership of
property or the conduct of its business requires such qualification
except where the failure to be so qualified or in good standing, as
the case may be, will not, individually, or in the aggregate, have a
material adverse effect on the assets, operations or condition
(financial or otherwise) of the Guarantor and its subsidiaries taken
as a whole (a "Material Adverse Effect").
(d) Each subsidiary of the Guarantor that is a "significant
subsidiary" (as defined in Rule 1-02 of
<PAGE>
4
Regulation S-X of the Commission) or that is listed on Exhibit I
hereto (each of the foregoing being referred to as a "Significant
Subsidiary") has been duly incorporated and is an existing corporation
in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Offering
Document; and each significant subsidiary of the Guarantor is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification, except with
respect to such subsidiaries and jurisdictions where the failure to be
so qualified or in good standing, as the case may be, will not,
individually or in the aggregate, have a Material Adverse Effect; all
of the issued and outstanding capital stock of each Significant
Subsidiary has been duly authorized and validly issued and is fully
paid and nonassessable; and the capital stock of each Significant
Subsidiary owned by the Guarantor, directly or through subsidiaries,
is owned free from liens, encumbrances and defects, except insofar as
such stock has been pledged, pursuant to credit agreements filed with
the Commission, to secure obligations of the Guarantor and its
subsidiaries to their respective senior lenders.
(e) The Preferred Securities have been duly and validly
authorized by the Trust, and, when issued and delivered against
payment therefor as provided herein, will be duly and validly issued
and fully paid and nonassessable undivided beneficial interests in the
assets of the Trust and will conform to the description thereof
contained in the Offering Document; the issuance of the Preferred
Securities is not subject to preemptive or other similar rights; the
Preferred Securities will have the rights set forth in the Trust
Agreement, and the Preferred Securities when issued and delivered
against payment therefor as provided herein will be, and the Trust
Agreement, when duly executed and delivered, will be, valid and
binding obligations of the Trust; the holders of the Preferred
Securities will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
(f) The Common Securities have been duly and validly authorized
by the Trust and upon delivery by the Trust to the Guarantor against
payment therefor as
<PAGE>
5
described in the Offering Document, will be duly and validly issued
and fully paid and nonassessable undivided beneficial interests in the
assets of the Trust and will conform to the description thereof
contained in the Offering Document; the issuance of the Common
Securities is not subject to preemptive or other similar rights; and
all of the issued and outstanding Common Securities of the Trust will
be directly owned by the Guarantor free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(g) The Registration Rights Agreement has been duly authorized by
the Trust and the Guarantor and, when executed and delivered, will
conform in all material respects to the description thereof contained
in the Offering Document. The Registration Rights Agreement when
validly executed and delivered by the Trust and the Guarantor will
constitute a valid and legally binding obligation of the Trust and the
Guarantor and will be enforceable in accordance with its terms,
subject, as to enforcement, to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity
or at law).
(h) The Guarantee, the Convertible Junior Subordinated
Debentures, the Trust Agreement and the Indenture (the Guarantee, the
Convertible Junior Subordinated Debentures, the Trust Agreement and
the Indenture being collectively referred to as the "Guarantor
Agreements") have each been duly authorized and when validly executed
and delivered by the Guarantor and, in the case of the Guarantee, by
the Guarantee Trustee, in the case of the Trust Agreement, by the
Trustees and, in the case of the Indenture, by the Debenture Trustee,
and, in the case of the Convertible Junior Subordinated Debentures,
when validly issued by the Guarantor and validly authenticated and
delivered by the Debenture Trustee and paid for by the Trust, will
constitute valid and legally binding obligations of the Guarantor,
enforceable in accordance with their respective terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws affecting
creditors' rights generally and to general principles of equity and
the discretion of the court (regardless of whether
<PAGE>
6
the enforcement of such remedies is considered in a proceeding in
equity or at law); the Convertible Junior Subordinated Debentures are
entitled to the benefits of the Indenture; and the Guarantor
Agreements will conform in all material respects to the descriptions
thereof in the Offering Document.
(i) When the Preferred Securities are delivered and paid for
pursuant to this Agreement at the Closing Time, such Preferred
Securities will be exchangeable for Convertible Junior Subordinated
Debentures which will be convertible into the shares of Common Stock
("Underlying Shares") of the Guarantor in accordance with the Trust
Agreement; the Underlying Shares initially issuable upon conversion of
such Preferred Securities have been duly authorized and reserved for
issuance upon such conversion and, when issued upon such conversion,
will be validly issued, fully paid and nonassessable; the outstanding
shares of Common Stock of the Guarantor conform in all material
respects to the description thereof contained in the Offering
Document; and the stockholders of the Guarantor have no preemptive
rights with respect to the Preferred Securities, the Convertible
Junior Subordinated Debentures or the Underlying Shares.
(j) Except for this Agreement, there are no contracts, agreements
or understandings between the Guarantor and any person that would give
rise to a valid claim against the Guarantor or any Purchaser for a
brokerage commission, finder's fee or other like payment in connection
with the sale of the Preferred Securities.
(k) Assuming the accuracy of the representations and warranties
of the Purchasers set forth in Section 4 of the Purchase Agreement
dated of even date herewith among the Trust, the Guarantor and each of
the Purchasers (the "Purchase Agreement") no consent, approval,
authorization, or order of, or filing with, any governmental agency or
body or any court is required for the consummation of the transactions
contemplated by this Agreement, the Registration Rights Agreement and
the Guarantor Agreements in connection with the issuance and sale of
the Preferred Securities by the Trust, the exchange of the Convertible
Junior Subordinated Debentures for Preferred Securities or the
purchase of the Convertible Junior Subordinated Debentures by the
Trust, except in connection with the registration of the Securities
pursuant to the Registration Rights Agreement, and except as to state
<PAGE>
7
or foreign securities laws or by the regulations of the National
Association of Securities Dealers, Inc. ("NASD").
(l) The issue and sale of Preferred Securities, the exchange of
the Convertible Junior Subordinated Debentures for Preferred
Securities, the execution, delivery and performance of this Agreement
and the Registration Rights Agreement, the compliance by the Trust and
the Guarantor with all of the provisions of this Agreement, the
purchase of the Convertible Junior Subordinated Debentures by the
Trust and the consummation of the transactions contemplated herein
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any material indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Trust is a party or by which the Trust is
bound or to which any of the property or assets of the Trust is
subject, nor will such action result in any violation of the
provisions of the Trust Agreement or any statute or any material
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Trust or any of its properties, except
for such conflicts, breaches, defaults or violations that would not
have a material adverse effect on the assets, operations, condition
(financial and otherwise) or the prospects of the Trust taken as a
whole (a "Trust Material Adverse Effect").
(m) The issuance by the Guarantor of the Guarantee, the
compliance by the Guarantor with all of the provisions of this
Agreement, the issuance upon exchange and conversion of the Underlying
Shares, the execution, delivery and performance by the Guarantor of
the Registration Rights Agreement and the Guarantor Agreements and the
consummation of the transactions herein and therein contemplated will
not conflict with, result in the creation or imposition of any lien,
charge or encumbrance upon any assets of the Guarantor or any of its
subsidiaries pursuant to the terms of, or constitute a default under,
any material agreement, indenture or instrument, or result in a
violation of the corporate charter or by-laws of the Guarantor or any
of its subsidiaries or any material order, rule or regulation of any
court or governmental agency having jurisdiction over the Guarantor,
any of its subsidiaries or their respective properties, except for
such conflicts, liens, charges, encumbrances, defaults or violations
that would not have a Material Adverse Effect; and assuming the
accuracy of the
<PAGE>
8
representations and warranties of the Purchasers set forth in Section
4 of the Purchase Agreement, no consent, authorization or order of, or
filing or registration with, any court or governmental agency is
required therefor, except in connection with the registration of the
Securities pursuant to the Registration Rights Agreement and except as
to state or foreign securities laws or by the regulations of the NASD.
(n) Neither the Trust, the Guarantor nor any of the Guarantor's
subsidiaries is in violation of its organizational documents or in
default under any agreement, indenture, mortgage, lease, note or
instrument, which violation or default would have a Material Adverse
Effect or a Trust Material Adverse Effect.
(o) The Trust has full power and authority to authorize, issue
and sell the Preferred Securities as contemplated by this Agreement
and to execute, deliver and perform this Agreement and the
Registration Rights Agreement.
(p) This Agreement has been duly authorized, executed and
delivered by the Trust and the Guarantor.
(q) Except as disclosed in the Offering Document, the Trustee (as
defined in the Offering Document) will on the Closing Date have good
and valid title to all the Convertible Junior Subordinated Debentures,
free from liens, encumbrances and defects that would materially affect
the value thereof or materially interfere with the use made or to be
made thereof by the Trust.
(r) There is no material litigation or governmental proceeding
pending or, to the knowledge of the Guarantor, threatened against the
Guarantor or any of its subsidiaries which may reasonably be expected
to result in any Material Adverse Effect.
(s) The financial statements of the Guarantor and its
consolidated subsidiaries included or incorporated by reference in the
Offering Document present fairly, in all material respects, the
financial position of the Guarantor and its consolidated subsidiaries
as of the dates shown and their results of operations and cash flows
for the periods shown, and, except as otherwise disclosed in the
Offering Document, such financial statements have been prepared in
conformity with the
<PAGE>
9
generally accepted accounting principles in the United States applied
on a consistent basis and the assumptions used in preparing the pro
forma financial statements included in or incorporated by reference in
the Offering Document provide a reasonable basis for presenting the
significant effects directly attributable to the transactions or
events described therein, the related pro forma adjustments give
appropriate effect to those assumptions and the pro forma columns
therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.
(t) Since the dates as of which information is given in the
Offering Document, no Material Adverse Effect has occurred.
(u) Neither the Trust nor the Guarantor is an open-end investment
company, unit investment trust or face-amount certificate company that
is or is required to be registered under Section 8 of the Investment
Company Act of 1940 (together with the rules and regulations
thereunder, the "Investment Company Act"), nor is it a closed-end
investment company required to be registered, but not registered,
thereunder; and each of the Trust and the Guarantor is not and, after
giving effect to the offer and sale of the Preferred Securities and
the application of the proceeds thereof as described in the Offering
Document, will not be an "investment company" as defined in the
Investment Company Act.
(v) No securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as the Preferred Securities are
listed on any national securities exchange registered under Section 6
of the Exchange Act or quoted in a U.S. automated interdealer
quotation system.
(w) The offer and sale of the Preferred Securities in the manner
contemplated by this Agreement will be exempt from the registration
requirements of the Securities Act by reason of Section 4(2) thereof,
and Regulation S ("Regulation S") thereunder; and it is not necessary
to qualify an indenture in respect of any of the Securities under the
United States Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), except as contemplated by the Registration Rights
Agreement.
<PAGE>
10
(x) Neither the Guarantor, nor the Trust, nor any of their
respective affiliates, nor any person acting on behalf of any of the
foregoing (i) has, within the six-month period prior to the date
hereof, offered or sold in the United States or to any U.S. person (as
such terms are defined in Regulation S under the Securities Act) the
Preferred Securities or any security of the same class or series as
the Preferred Securities or (ii) has offered or will offer or sell the
Preferred Securities (A) in the United States by means of any form of
general solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act or (B) with respect to any such
securities sold in reliance on Rule 903 of Regulation S under the
Securities Act, by means of any directed selling efforts within the
meaning of Rule 902(b) of Regulation S. The Guarantor and the Trust,
their respective affiliates and any person acting on behalf of any of
the foregoing have complied and will comply with the offering
restrictions requirement of Regulation S. The Guarantor and the Trust
have not entered and will not enter into any contractual arrangement
with respect to the distribution of the Preferred Securities except
for this Agreement, the Purchase Agreement and the Registration Rights
Agreement.
(y) The Guarantor is subject to Section 13 or 15(d) of the
Exchange Act.
(z) The Guarantor and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business now
operated by them, except where the failure to possess such
certificates or permits will not individually or in the aggregate have
a Material Adverse Effect; and have not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the
Guarantor or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect.
(aa) Except as disclosed in the Offering Document and except for
statutory liens for sums not yet due or which are being contested in
good faith in appropriate proceedings, the Guarantor and its
subsidiaries have good and marketable title to all real properties and
other properties and assets owned by them, in each case free from
liens, encumbrances and defects that would, individually or in the
aggregate, have a Material
<PAGE>
11
Adverse Effect; and except as disclosed in the Offering Document or as
will not have a Material Adverse Effect, the Guarantor and its
subsidiaries hold any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere
with the use made or to be made thereof by them.
(bb) The Guarantor and its subsidiaries own or possess, or can
acquire on reasonable terms, adequate trademarks, trade names and
other rights to inventions, know-how, patents, copyrights,
confidential information and other intellectual property
(collectively, "intellectual property rights") necessary to conduct
the business now operated by them, or presently employed by them, the
loss of which may reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; and have not received
any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that, if
determined adversely to the Guarantor or any of its subsidiaries,
would individually or in the aggregate, have a Material Adverse
Effect.
(cc) No labor dispute with the employees of the Guarantor or any
of its subsidiaries exists or, to the knowledge of the Guarantor, is
imminent that may be reasonably expected to have a Material Adverse
Effect.
(dd) Except as disclosed in the Offering Document, neither the
Guarantor nor any of its subsidiaries is in violation of any statute,
any rule, regulation, decision or order of any governmental agency or
body or any court, domestic or foreign, relating to the use, disposal
or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "environmental laws"),
owns or operates any real property contaminated with any substance
requiring remediation or removal under any environmental laws, is
liable for any off-site disposal or contamination pursuant to any
environmental laws, or is subject to any claim relating to any
environmental laws, which violation, contamination, liability or claim
individually or in the aggregate may reasonably be expected to have a
Material Adverse Effect; and the Guarantor is not aware of any pending
investigation which might lead to such a claim.
<PAGE>
12
3. Placement of Securities.
(a) The Guarantor and the Trust hereby appoint you as sole and
exclusive placement agent in connection with the issuance and initial
offering and sale of the Preferred Securities. With respect to such
placement of the Preferred Securities, the Guarantor and the Trust and
you each represent and agree as follows (except that the Guarantor and
the Trust make no representations and warranties as to you, any of
your affiliates or any person acting on your behalf):
(i) Until the later of the completion of the distribution of
the Preferred Securities (as notified in writing by you to
the Guarantor) and the Closing Time, none of the Guarantor,
the Trust, any of their affiliates or any other person
acting on their behalf will, directly or indirectly, sell or
offer, or attempt to offer or dispose of, or solicit any
offer to buy, or otherwise approach or negotiate in respect
of, any of the Preferred Securities; neither you nor the
Guarantor nor the Trust will, directly or indirectly, offer
or sell Preferred Securities by means of any form of general
solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act, including, but not
limited to any advertisement, article, notice or other
communication published in any newspaper, magazine, or
similar media or broadcast over television or radio or at
any seminar or meeting the attendees at which were invited
through any general solicitation or general advertising; and
none of you, the Guarantor or the Trust or any such person
has heretofore done any of the foregoing. As used in this
Agreement, the terms "offer" and "sale" have the meanings
specified in Section 2(3) of the Securities Act;
(ii) Except as previously disclosed to you, neither the
Guarantor nor the Trust nor any other person acting on their
behalf has offered or sold within the 12 month period ending
with the date of this Agreement any security of the same or
similar class as the Preferred Securities;
(iii) Both the Guarantor and you shall have the right to
approve (1) every form of letter, circular, notice or other
written communication in
<PAGE>
13
connection with the offer and sale of the Preferred
Securities and (2) the persons to whom any such
communication is to be directed;
(iv) Both you and the Guarantor (and any other person acting
on behalf of you or the Guarantor) will reasonably believe
at the Closing Time that the Purchasers are qualified
institutional buyers within the meaning of Rule 144A of the
Securities Act or institutional "accredited Investors"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under
the Securities Act; and
(v) The Guarantor and the Trust understand that you are
acting solely as their agent in the placing of the Preferred
Securities and that your responsibility is limited to a
"best efforts" basis in placing the Preferred Securities,
with no understanding, express or implied, on your part of a
commitment by you to purchase or place the Preferred
Securities; the Guarantor and the Trust understand, however,
that you reserve the right to purchase a portion of the
Preferred Securities on mutually agreeable terms and that,
subject to the transfer restrictions in the Preferred
Securities as described in the Offering Document, you may
resell the Preferred Securities so purchased to other
Purchasers and those investors to whom the Securities have
been offered.
(b) You shall communicate to the Guarantor, orally or in writing, each
offer to purchase Preferred Securities, other than those rejected by
you. You shall have the right, in your discretion reasonably
exercised, to reject any offer received by you to purchase Preferred
Securities, as a whole or in part, and any such rejection by you shall
not be deemed a breach of your agreements contained herein.
4. Certain Agreements of the Trust and the Guarantor. Each of the Trust and
the Guarantor, jointly and severally, agrees with you that:
(a) The Trust and the Guarantor will advise you promptly of any
proposal to amend or supplement the Offering Document and will not
effect such amendment or supplementation without your consent (which
consent shall not be unreasonably withheld). If, at any time during
the period commencing on the date of this Agreement and ending on the
later of (i) the Closing
<PAGE>
14
Time or (ii) if you or any of your affiliates purchase Securities at
the Closing Time, as notified to the Guarantor prior to the Closing
Time, the first date on which neither you nor any of your affiliates
are an Existing Holder of such Securities (provided that such period
shall not in any event exceed 30 days after the Closing Time), any
event occurs as a result of which the Offering Document as then
amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, the Trust and the Guarantor
promptly will notify you of such event and promptly will prepare, at
their own expense, an amendment or supplement which will correct such
statement or omission. Neither your consent to, nor your delivery to
offerees or investors of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(b) The Trust and the Guarantor will furnish to you copies of the
Offering Document and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as
you reasonably request, and the Trust and the Guarantor will furnish
to you on the date hereof a copy of the Offering Document which will
include the independent accountants' reports therein manually signed
by such independent accountants. At any time when the Guarantor is not
subject to Section 13 or 15(d) of the Exchange Act, the Guarantor will
promptly furnish or cause to be furnished to you and, upon request of
holders and prospective purchasers of the Preferred Securities, to
such holders and purchasers, a reasonable number of copies of the
information required to be delivered to holders and prospective
purchasers of the Preferred Securities pursuant to Rule 144A(d)(4)
under the Securities Act (or any successor provision thereto) in order
to permit compliance with Rule 144A in connection with resales by such
holders of the Preferred Securities. The Guarantor will pay the
expenses of printing and distributing all such documents.
(c) The Trust and the Guarantor will arrange, in cooperation with you
and your counsel, for the qualification of the Preferred Securities
for sale and the determination of their eligibility for investment
under the laws of such jurisdictions in the United States and Canada
as you designate and will continue such qualifications in effect so
long as required for
<PAGE>
15
the sale of the Preferred Securities by you; provided, however, that
the Trust and the Guarantor will not be required to qualify as a
foreign corporation or to file a general consent to service of process
in any such jurisdiction.
(d) During the period of five years hereafter, the Guarantor will
furnish to you, as soon as practicable after the end of each fiscal
year, a copy of its annual report to stockholders for such year; and
the Guarantor will furnish to the Purchasers (i) as soon as available,
a copy of each report and any definitive proxy statement of the
Guarantor filed with the Commission under the Exchange Act or mailed
to stockholders and (ii) from time to time, such other information
concerning the Guarantor as the Purchasers may reasonably request.
(e) During the period of two years after the Closing Time (or, after
the Shelf Registration Statement shall have been declared effective,
such shorter period as may be specified in Section 2(b) of the
Registration Rights Agreement), the Guarantor will, upon request,
furnish to you and any holder of Preferred Securities a copy of the
restrictions on transfer set forth under "Transfer Restrictions" in
the Offering Document applicable to the Preferred Securities.
(f) During the period of two years after the Closing Time (or, after
the Shelf Registration Statement shall have been declared effective,
such shorter period as may be specified in Section 2(b) of the
Registration Rights Agreement), the Guarantor will not, and will not
permit any of its affiliates (as defined in Rule 144 under the
Securities Act) to, resell any of the Preferred Securities that have
been reacquired by any of them, except for Preferred Securities
purchased by the Guarantor or any of its affiliates and resold in a
transaction registered under the Securities Act.
(g) During the period of two years after the Closing Time (or, after
the Shelf Registration Statement shall have been declared effective,
such shorter period as may be specified in Section 2(b) of the
Registration Rights Agreement), the Guarantor and the Trust will not
be or become an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be
registered under Section 8 of the Investment Company
<PAGE>
16
Act and is not, and will not be or become, a closed-end investment
company required to be registered, but not registered, under the
Investment Company Act.
(h) The Guarantor will pay all expenses incidental to the performance
of its obligations under this Agreement, the Registration Rights
Agreement and the Guarantor Agreements, including (i) the fees and
expenses of the Trustees and their professional advisers; (ii) all
expenses in connection with the execution, issue, authentication,
packaging and initial delivery of the Preferred Securities, the
preparation and printing of this Agreement, the Registration Rights
Agreement, the Preferred Securities and the Guarantor Agreements, the
Offering Document and amendments and supplements thereto, and any
other document relating to the issuance, offer, sale and delivery of
the Preferred Securities; (iii) qualifying the Preferred Securities
for trading in The Private Offerings, Resale and Trading through
Automated Linkages (PORTAL) Market and any expenses incidental
thereto; (iv) for any expenses (including fees and disbursements of
counsel) incurred in connection with qualification of the Preferred
Securities for sale under the laws of such jurisdictions in the United
States and Canada as you designate and the printing of memoranda
relating thereto; (v) for any fees charged by investment rating
agencies for the rating of the Securities; (vi) for all travel
expenses of the Guarantor's officers and employees and any other
expenses of the Guarantor in connection with attending or hosting
meetings with prospective purchasers of the Preferred Securities; and
(vii) for expenses incurred in distributing the Offering Document
(including any amendments and supplements thereto). Except as
otherwise provided in this paragraph or in Section 8 of this
Agreement, you will pay all of your costs and expenses, including fees
and expenses of your counsel and any advertising and travel expenses
incurred by you.
(i) If you are a Purchaser of Preferred Securities in connection with
the offering, until you shall have notified the Trust and the
Guarantor and the other Purchasers of the completion of the resale of
the Preferred Securities held by you, neither the Guarantor nor the
Trust nor any of their affiliates has or will, either alone or with
one or more other persons, bid for or purchase for any account in
which it or any of its affiliates has a beneficial interest any
Preferred Securities or attempt to induce any person to purchase any
Preferred Securities; and neither it nor any of its
<PAGE>
17
affiliates will make bids or purchases for the purpose of creating
actual, or apparent, active trading in, or of raising the price of,
the Preferred Securities.
(j) For a period of 90 days after the date hereof, the Trust and the
Guarantor will not offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly or file with the Commission a
registration statement under the Securities Act relating to, (a) any
trust certificates or other secu rities of the Trust (other than the
Trust Securities), (b) any preferred stock or any other securities of
the Guarantor which are substantially similar to any of the Preferred
Securities, (c) any shares of Common Stock of the Guarantor or any
other capital stock of the Guarantor, or (d) any other securities
which are con vertible into, or exercisable or exchangeable for, trust
certificates or other securities of the Trust, or preferred stock or
such substantially similar secu rities of the Guarantor, or Common
Stock of the Guarantor or other capital stock of the Guarantor,
without your prior written consent, except the offer, sale, contract
to sell, or other disposition of (i) the Preferred Securities, (ii)
Common Stock of the Guarantor issued or delivered upon conversion of
the Preferred Securities or the Convertible Junior Subordinated
Debentures, (iii) securities issued or delivered upon conversion,
exchange or exercise of any other securities of the Guarantor
outstanding on the date of the Offering Document, (iv) capital stock
of the Guarantor issued pursuant to benefit or incentive plans
maintained for its officers, directors or employees, or pursuant to a
Guarantor's dividend reinvestment plan, or (v) securities issued in
connec tion with mergers, acquisitions or similar transac tions. The
Guarantor will not at any time offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, any securities under
circum stances where such offer, sale, pledge, contract or disposition
would cause the exemption afforded by Section 4(2) of the Securities
Act or the safe harbor of Regulation S thereunder to cease to be
applicable to the offer and sale of the Preferred Securities.
(k) The Trust and the Guarantor will apply the proceeds of the offer
and sale of the Preferred Securities in the manner set forth in the
Offering Document under the caption "Use of Proceeds".
(l) The Guarantor will extend to the Purchasers and all prospective
investors the opportunity to ask
<PAGE>
18
questions of, and receive answers from, the Guarantor concerning the
Preferred Securities and the terms and conditions of the offering
thereof and to obtain such information as such prospective investors
may consider necessary in making an informed investment decision or to
verify the accuracy of the information set forth in the Offering
Document, to the extent the Guarantor possesses the same or can
acquire it without unreasonable effort or expense, provided, however,
that the Guarantor shall be under no obligation to divulge information
that is proprietary or confidential.
5. Closing and Placement Fee. The sale of the Preferred Securities to the
Purchasers shall be held at the location, time and date mutually agreed by the
Guarantor and you and communicated to the Purchasers by telex or otherwise. At
the Closing Time, the Trust shall accept payment for the Preferred Securities
from you on behalf of the Purchasers by official bank check or checks or wire
transfer of federal (same day) funds and you shall accept delivery of Preferred
Securities by book entry to your account with the Depository Trust Company
("DTC") and you shall deliver by book entry through DTC to the account of each
Purchaser's DTC participant the Preferred Securities purchased by such
Purchaser, against payment to your account of an amount equal to the purchase
price from the account of such Purchaser's DTC participant.
In consideration of your acting as placement agent with respect to the
Preferred Securities, the Guarantor agrees to pay to you a placement fee, in
Federal (same day) funds simultaneously with the issuance of the Preferred
Securities at the Closing Time, in the amount of 2.5% of the gross principal
amount of the Preferred Securities. A portion of the placement fee will be
returned to the Guarantor at the Closing Time to reimburse the Guarantor for the
fees and disbursements of Willkie, Farr & Gallagher which the Guarantor has
agreed to pay under the Purchase Agreement.
6. Solicitation and Closing Conditions. Your obligation, as agent of the
Trust and the Guarantor, to solicit offers to purchase the Preferred Securities,
the obligation of any Purchaser of Preferred Securities sold through you, or
your obligation, if any, to purchase any of the Preferred Securities, shall in
each case be subject, in your discretion, to the accuracy of the representations
and warranties on the part of the Trust and the Guarantor herein, to the
accuracy of the statements of officers of the Trust and Guarantor made pursuant
to the provisions hereof, to the performance by the Trust and the Guarantor of
its
<PAGE>
19
obligations hereunder and to the following additional conditions on or prior to
the Closing Time:
(a) You shall have received a letter, dated the date of this Agreement, of
Price Waterhouse LLP confirming that they are independent public
accountants within the meaning of the Securities Act and the applicable
published rules and regulations thereunder ("Rules and Regulations") and to
the effect that:
(i) in their opinion the consolidated financial statements examined by
them and incorporated by reference in the Offering Document and in the
Exchange Act Reports comply as to form in all material respects with
the applicable accounting requirements of the Securities Act and the
related published Rules and Regulations;
(ii) on the basis of a reading of the latest available interim
financial statements of the Guarantor, inquiries of officials of the
Guarantor who have responsibility for financial and accounting matters
and other specified procedures, nothing came to their attention that
caused them to believe that:
(A) at the date of the latest available balance sheet read by
such accountants, or at a subsequent specified date not more than
five days prior to the date of this Agreement, there was any
change in the capital stock or any increase in short-term
indebtedness or long-term debt of the Guarantor and its
consolidated subsidiaries or, at the date of the latest available
balance sheet read by such accountants, there was any decrease in
consolidated net current assets or net assets, as compared with
amounts shown on the latest balance sheet included in the
Exchange Act Reports; or
(B) for the period from the closing date of the latest income
statement included in the Exchange Act Reports to the closing
date of the latest available income statement read by such
accountants there were any decreases as compared with the
corresponding period of the previous year and with the period of
corresponding length ended the date of the latest income
statement included in the Exchange Act Reports in consolidated
net
<PAGE>
20
sales, net income or in the total or per share amounts of
consolidated income before extraordinary items or net income.
except in all cases set forth in clauses (A) and (B) above for changes,
increases or decreases which the Exchange Act Reports disclose have occurred or
may occur or which are described in such letter;
(iii) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Offering Document and the Exchange Act Reports (in
each case to the extent that such dollar amounts, percentages and
other financial information are derived from the general accounting
records of the Guarantor and its subsidiaries subject to the internal
controls of the Guarantor's accounting system or are derived directly
from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting records
and other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in such
letter; and
(iv) after reading the unaudited pro forma computation of earnings per
share, ratio of earnings to fixed charges, capitalization and
financial statements included or incorporated in the Offering Document
and the Exchange Act Reports (the "pro forma financial statements");
carrying out certain specified procedures; making inquiries of certain
officials of the Guarantor who have responsibility for financial and
accounting matters; and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in
the pro forma financial statements, nothing came to their attention
which caused them to believe that the pro forma financial statements
do not comply in form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X or that the
pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
(b) Subsequent to the execution and delivery of this Agreement, there shall
not have occurred (i) any change, or any development or event involving a
prospective change, in or affecting particularly the
<PAGE>
21
condition (financial or other), business, properties or results of
operations of the Trust or the Guarantor and its subsidiaries which, in
your reasonable judgment, is material and adverse and makes it impractical
or inadvisable to proceed with completion of the offering or the sale of
and payment for the Preferred Securities; (ii) any downgrading in the
rating of any debt securities of the Guarantor by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Securities Act) or any public announcement that any
such organization has under surveillance or review its rating of any debt
securities of the Guarantor (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any suspension or limitation of trading
in securities generally on either of the New York Stock Exchange or The
Nasdaq Stock Market's National Market, or any setting of minimum prices for
trading on any such exchange, or any suspension of trading of any
securities of the Guarantor on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by U.S. Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in your reasonable judgment, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the offering or sale of and payment for the
Preferred Securities.
(c) You and the Purchasers shall have received opinions, dated such Closing
Date of (i) Dickstein, Shapiro & Morin, L.L.P., counsel for the Trust and
the Guarantor in the forms attached hereto as Exhibits A-1 and A-2; (ii)
Morris, Nichols, Arsht & Tunnell, special Delaware counsel to the Trust and
the Guarantor, substantially in the form attached hereto as Exhibit B;
(iii) Emmet, Marvin & Martin, counsel to the Guarantee Trustee, Indenture
Trustee and Property Trustee, in the form attached hereto as Exhibit C and
(iv) Morris, Nichols, Arsht & Tunnell, counsel for the Delaware Trustee, in
the form attached hereto as Exhibit D.
(d) You and the Purchasers shall have received a certificate, dated such
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Guarantor in which such officers, to
the best of their knowledge after
<PAGE>
22
reasonable investigation, shall state that the representations and
warranties of the Trust and the Guarantor in this Agreement are true and
correct, that the Trust and the Guarantor have complied with all agreements
and satisfied all conditions on their part to be performed or satisfied
hereunder at or prior to such Closing Date and that, subsequent to the
dates of the most recent financial statements in the Offering Document
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Guarantor and its subsidiaries taken as a whole except as set forth in or
contemplated by the Offering Document or as described in such certificate.
(e) You shall have received a letter, dated the Closing Time, of Price
Waterhouse LLP which meets the requirements of subsection (a) of this
Section, except that the specified date referred to in such subsection will
be a date not more than five days prior to the Closing Time for the
purposes of this subsection.
(f) The Registration Rights Agreement shall have been duly executed and
delivered by the Guarantor and the Trust.
The Guarantor will furnish you with such conformed copies of such opinions,
certificates, letters and documents as you reasonably request. You may in your
sole discretion waive compliance with any conditions to your obligations
hereunder.
7. Indemnification and Contribution. (a) The Trust and the Guarantor will
jointly and severally indemnify you and hold you harmless against any losses,
claims, damages or liabilities, joint or several, to which you may become
subject, under the Securities Act or the Exchange Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Offering Document, or any amendment or
supplement thereto, or the Exchange Act Reports, or arise out of or are based
upon the omission or alleged omission to state therein a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading and will reimburse you for any legal or
other expenses reasonably incurred by you in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided,
<PAGE>
23
however, that the Trust and the Guarantor will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity
with written information furnished to the Trust and the Guarantor by you
specifically for use therein, it being understood and agreed that the only such
information consists of the information described as such in subsection (b)
below.
(b) You will indemnify and hold harmless the Trust and the Guarantor
against any losses, claims, damages or liabilities to which the Trust and the
Guarantor may become subject, under the Securities Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Offering Document, or any
amendment or supplement thereto, or any related preliminary offering circular,
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Trust and the
Guarantor by you specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Trust and the Guarantor in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not,
<PAGE>
24
except with the consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such settlement
includes an unconditional release of such indemnified party from all liability
on any claims that are the subject matter of such action.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Trust and the
Guarantor on the one hand and you on the other from the offering of the
Preferred Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Trust and the Guarantor on the one hand and you on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Trust and the Guarantor on
the one hand and you on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Trust bear to the total discounts and commissions received by you from
the Guarantor under this Agreement. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Trust and the Guarantor or you and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first
<PAGE>
25
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), you shall
not be required to contribute any amount in excess of the amount by which (x)
the total price received by the Trust for the sale of the Preferred Securities
less the placement fee payable to you exceeds (y) the amount of any damages
which you have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(e) The obligations of the Trust and the Guarantor under this Section shall
be in addition to any liability which the Trust and the Guarantor may otherwise
have and shall extend, upon the same terms and conditions, to each person, if
any, who controls you within the meaning of the Securities Act or the Exchange
Act; and your obligations under this Section shall be in addition to any
liability which you may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls the Trust and the Guarantor
within the meaning of the Securities Act or the Exchange Act.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Trust and the Guarantor or their officers and of you set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of you, the Trust or the Guarantor or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Preferred Securities. If for any reason the purchase of the
Preferred Securities by the Purchasers is not consummated, the Trust and the
Guarantor shall remain responsible for the expenses to be paid or reimbursed by
them pursuant to Section 4 and the respective obligations of the Trust and the
Guarantor and you pursuant to Section 7 shall remain in effect and if any
Preferred Securities have been purchased hereunder the representations and
warranties in Section 2 and all obligations under Section 4 shall also remain in
effect. If the purchase of the Preferred Securities by the Purchasers is not
consummated for any reason other than solely because of the occurrence of any
event specified in
<PAGE>
26
clause (iii), (iv) or (v) of Section 6(b), the Trust and the Guarantor will
reimburse you for all out-of-pocket expenses (including fees and disbursements
of counsel) reasonably incurred by you in connection with the offering of the
Preferred Securities.
9. Notices. All communications hereunder will be in writing and, if sent to
you will be mailed, delivered or telegraphed and confirmed to Credit Suisse
First Boston Corporation, Eleven Madison Avenue, New York, NY 10010-3629,
Attention: Investment Banking Department - Transactions Advisory Group, or, if
sent to the Trust or the Guarantor, will be mailed, delivered or telegraphed and
confirmed to it at DT Industries, Inc., Corporate Centre, Suite 2-300, 1949 E.
Sunshine, Springfield, MO 65804, Attention: President and Chief Executive
Officer.
10. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the controlling
persons referred to in Section 7, and no other person will have any right or
obligation hereunder.
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
12. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflicts of laws.
Each of the Trust and the Guarantor hereby submits to the nonexclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
<PAGE>
27
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us one of the counterparts hereof, whereupon it will
become a binding agreement between the Trust and the Guarantor and you in
accordance with its terms.
Very truly yours,
DT CAPITAL TRUST,
by Stephen J. Gore, solely in
his capacity as trustee
and not in his individual
capacity,
/s/ Stephen J. Gore
--------------------------------------
by Gregory D. Wilson, solely in
his capacity as trustee
and not in his individual
capacity,
/s/ Gregory D. Wilson
--------------------------------------
DT INDUSTRIES, INC.,
by /s/ Bruce P. Erdel
-----------------------------------
Name: Bruce P. Erdel
Title: Secretary
The foregoing Placement
Agreement is hereby confirmed
and accepted as of the date
first above written.
CREDIT SUISSE FIRST BOSTON
CORPORATION,
by /s/ Sean Twomey
-------------------------
Name: Sean Twomey
Title: Director
1,400,000
DT Capital Trust
7.16% Convertible Preferred Securities
(liquidation preference $50 per
Convertible Preferred Security)
guaranteed to a limited extent by, and
convertible into Common Stock of,
DT Industries, Inc.
PURCHASE AGREEMENT
June 12, 1997
TO THE PURCHASERS WHOSE NAMES APPEAR IN
THE ACCEPTANCE FORM AT THE END HEREOF:
Dear Sirs:
1. Introductory. DT Capital Trust, a statutory business trust formed under
the laws of the State of Delaware (the "Trust") and DT Industries, Inc., a
Delaware corporation, as depositor of the Trust and as guarantor (the
"Guarantor"), propose, subject to the terms and conditions stated herein, that
the Trust issue and sell to the several purchasers named in Schedule A hereto
(the "Purchasers"), an aggregate of 1,400,000 of its 7.16% Convertible Preferred
Securities (liquidation preference $50 per Convertible Preferred Security) (the
"Preferred Securities") representing undivided beneficial ownership interests in
the assets of the Trust, guaranteed by the Guarantor as to the payment of
distributions, and as to payments on liquidation or redemption, to the extent
set forth in a guarantee agreement (the "Guarantee") between the Guarantor and
The Bank of New York, as trustee (the "Guarantee Trustee"). The proceeds of the
sale by the Trust of the Preferred Securities and its Common Securities
(liquidation preference $50 per common security) (the "Common Securities") are
to be invested in 7.16% Convertible Junior Subordinated Deferrable Interest
Debentures Due 2012 (the "Convertible Junior Subordinated Debentures") of the
Guarantor, to be issued pursuant to an Indenture (the "Indenture") between the
Guarantor and The Bank of New York, as trustee (the "Debenture Trustee"). The
Preferred Securities are effectively convertible into shares of Common Stock,
par value $.01 per share (the "Common Stock"), of the Guarantor. Holders
(including subsequent transferees) of the Preferred Securities will have the
registration rights set forth in
<PAGE>
2
the Registration Rights Agreement (the "Registration Rights Agreement") to
be entered into among the Trust, the Guarantor and the Purchasers. Pursuant to
the Registration Rights Agreement, the Guarantor and the Trust have agreed to
file with the Securities and Exchange Commission (the "Commission") a shelf
registration statement (the "Shelf Registration Statement") pursuant to Rule 415
under the Securities Act of 1933, as amended (the "Securities Act"), to register
sales of the Preferred Securities, the Guarantee, the Convertible Junior
Subordinated Debentures and the shares of Common Stock issuable upon conversion
thereof (collectively, the "Securities") following the sale of the Preferred
Securities contemplated hereby.
Each of the Trust and the Guarantor hereby agrees with the Purchasers as
follows:
2. Representations and Warranties of the Trust and the Guarantor. Each of
the Trust and the Guarantor jointly and severally represents and warrants to,
and agrees with, the Purchasers that:
(a) An offering memorandum relating to the Preferred Securities
has been prepared by the Trust and the Guarantor and furnished to each
Purchaser. Such offering memorandum, as supplemented as of the date of
this Agreement, together with any other document approved by the
Guarantor for use in connection with the contemplated sale of the
Preferred Securities or incorporated by reference thereto are
hereinafter collectively referred to as the "Offering Document". On
the date of this Agreement, the Offering Document does not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Except as
disclosed in the Offering Document, on the date of this Agreement, the
Guarantor's Annual Report on Form 10-K most recently filed with the
Commission and all reports (collectively, the "Exchange Act Reports"
including all amendments thereto) which have been filed by the
Guarantor with the Commission or sent to stockholders pursuant to the
Securities Exchange Act of 1934 (the "Exchange Act") since July 1,
1996, copies of which have been made available to the Purchasers,
taken together do not include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. Such documents, when filed with the
<PAGE>
3
Commission, conformed in all material respects to the requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder.
(b) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Business Trust Act
of the State of Delaware (the "Delaware Business Trust Act") with the
power and authority to own property and conduct its business as
described in the Offering Document, and has conducted and will conduct
no business other than the transactions contemplated by this Agreement
and as described in the Offering Document; the Trust is not a party to
or bound by any agreement or instrument other than this Agreement, the
Amended and Restated Declaration of Trust (the "Trust Agreement")
between the Guarantor and the trustees named therein (the "Trustees")
and the agreements and instruments contemplated by the Trust Agreement
and the Offering Document; the Trust has no liabilities or obligations
other than those arising out of the transactions contemplated by this
Agreement and the Trust Agreement and described in the Offering
Document; and the Trust is not a party to or subject to any action,
suit or proceeding of any nature.
(c) The Guarantor has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Offering Document; and
the Guarantor is duly qualified to do business and in good standing as
a foreign corporation in each jurisdiction in which its ownership of
property or the conduct of its business requires such qualification
except where the failure to be so qualified or in good standing, as
the case may be, will not, individually, or in the aggregate, have a
material adverse effect on the assets, operations or condition
(financial or otherwise) of the Guarantor and its subsidiaries taken
as a whole (a "Material Adverse Effect").
(d) Each subsidiary of the Guarantor that is a "significant
subsidiary" (as defined in Rule 1-02 of Regulation S-X of the
Comission) or that is listed on Exhibit I hereto (each of the
foregoing being referred to as a "Significant Subsidiary") has been
duly incorporated and is an existing corporation in good standing
under the laws of the jurisdiction of its incorporation, with power
and authority (corporate and
<PAGE>
4
other) to own its properties and conduct its business as described in
the Offering Document; and each significant subsidiary of the
Guarantor is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification, except with respect to such subsidiaries and
jurisdictions where the failure to be so qualified or in good
standing, as the case may be, will not, individually or in the
aggregate, have a Material Adverse Effect; all of the issued and
outstanding capital stock of each Significant Subsidiary has been duly
authorized and validly issued and is fully paid and nonassessable; and
the capital stock of each Significant Subsidiary owned by the
Guarantor, directly or through subsidiaries, is owned free from liens,
encumbrances and defects, except insofar as such stock has been
pledged, pursuant to credit agreements filed with the Commission, to
secure obligations of the Guarantor and its subsidiaries to their
respective senior lenders.
(e)The Preferred Securities have been duly and validly authorized
by the Trust, and, when issued and delivered against payment therefor
as provided herein, will be duly and validly issued and fully paid and
nonassessable undivided beneficial interests in the assets of the
Trust and will conform to the description thereof contained in the
Offering Document; the issuance of the Preferred Securities is not
subject to preemptive or other similar rights; the Preferred
Securities will have the rights set forth in the Trust Agreement, and
the Preferred Securities when issued and delivered against payment
therefor as provided herein, will be, valid and binding obligations of
the Trust; the holders of the Preferred Securities will be entitled to
the same limitation of personal liability extended to stockholders of
private corporations for profit organized under the General
Corporation Law of the State of Delaware.
(f) The Common Securities have been duly and validly authorized
by the Trust and upon delivery by the Trust to the Guarantor against
payment therefor as described in the Offering Document, will be duly
and validly issued and fully paid and nonassessable undivided
beneficial interests in the assets of the Trust and will conform to
the description thereof contained in the Offering Document; the
issuance of the Common Securities is not subject to preemptive or
other similar rights; and all of the issued and outstanding
<PAGE>
5
Common Securities of the Trust will be directly owned by the Guarantor
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(g) The Registration Rights Agreement has been duly authorized by
the Trust and the Guarantor and, when executed and delivered, will
conform in all material respects to the description thereof contained
in the Offering Document. The Registration Rights Agreement when
validly executed and delivered by the Trust and the Guarantor will
constitute a valid and legally binding obligation of the Trust and the
Guarantor and will be enforceable in accordance with its terms,
subject, as to enforcement, to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity
or at law).
(h) The Guarantee, the Convertible Junior Subordinated
Debentures, the Trust Agreement and the Indenture (the Guarantee, the
Convertible Junior Subordinated Debentures, the Trust Agreement and
the Indenture being collectively referred to as the "Guarantor
Agreements") have each been duly authorized and when validly executed
and delivered by the Guarantor and, in the case of the Guarantee, by
the Guarantee Trustee, in the case of the Trust Agreement, by the
Trustees and, in the case of the Indenture, by the Debenture Trustee,
and, in the case of the Convertible Junior Subordinated Debentures,
when validly issued by the Guarantor and validly authenticated and
delivered by the Debenture Trustee and paid for by the Trust, will
constitute valid and legally binding obligations of the Guarantor,
enforceable in accordance with their respective terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws affecting
creditors' rights generally and to general principles of equity and
the discretion of the court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law); the
Convertible Junior Subordinated Debentures are entitled to the
benefits of the Indenture; and the Guarantor Agreements will conform
in all material respects to the descriptions thereof in the Offering
Document.
<PAGE>
6
(i) When the Preferred Securities are delivered and paid for
pursuant to this Agreement on the Closing Date, such Preferred
Securities will be exchangeable for Convertible Junior Subordinated
Debentures which will be convertible into the shares of Common Stock
("Underlying Shares") of the Guarantor in accordance with the Trust
Agreement; the Underlying Shares initially issuable upon conversion of
such Preferred Securities have been duly authorized and reserved for
issuance upon such conversion and, when issued upon such conversion,
will be validly issued, fully paid and nonassessable; the outstanding
shares of Common Stock of the Guarantor conform in all material
respects to the description thereof contained in the Offering
Document; and the stockholders of the Guarantor have no preemptive
rights with respect to the Preferred Securities, the Convertible
Junior Subordinated Debentures or the Underlying Shares.
(j) There are no contracts, agreements or understandings between
the Guarantor and any person that would give rise to a valid claim
against any for a brokerage commission, finder's fee or other like
payment in connection with the sale of the Preferred Securities.
(k) Assuming the accuracy of the representations and warranties
of the Purchasers set forth in Section 4 of this Agreement, no
consent, approval, authorization, or order of, or filing with, any
governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement, the
Registration Rights Agreement and the Guarantor Agreements in
connection with the issuance and sale of the Preferred Securities by
the Trust, the exchange of the Convertible Junior Subordinated
Debentures for Preferred Securities or the purchase of the Convertible
Junior Subordinated Debentures by the Trust, except in connection with
the registration of the Securities pursuant to the Registration Rights
Agreement, and except as to state or foreign securities laws or by the
regulations of the National Association of Securities Dealers, Inc.
("NASD").
(l) The issue and sale of Preferred Securities, the exchange of
the Convertible Junior Subordinated Debentures for Preferred
Securities, the execution, delivery and performance of this Agreement,
and the Registration Rights Agreement, the compliance by the Trust and
the Guarantor with all of the provisions of this Agreement, the
purchase of the Convertible Junior
<PAGE>
7
Subordinated Debentures by the Trust and the consummation of the
transactions contemplated herein will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default
under, any material indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Trust is a party or by
which the Trust is bound or to which any of the property or assets of
the Trust is subject, nor will such action result in any violation of
the provisions of the Trust Agreement or any statute or any material
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Trust or any of its properties, except
for such conflicts, breaches, defaults or violations that would not
have a material adverse effect on the assets, operations, condition
(financial and otherwise) or the prospects of the Trust taken as a
whole (a "Trust Material Adverse Effect").
(m) The issuance by the Guarantor of the Guarantee, the
compliance by the Guarantor with all of the provisions of this
Agreement, the issuance upon exchange and conversion of the Underlying
Shares, the execution, delivery and performance by the Guarantor of
the Registration Rights Agreement and the Guarantor Agreements and the
consummation of the transactions herein and therein contemplated will
not conflict with, result in the creation or imposition of any lien,
charge or encumbrance upon any assets of the Guarantor or any of its
subsidiaries pursuant to the terms of, or constitute a default under,
any material agreement, indenture or instrument, or result in a
violation of the corporate charter or by-laws of the Guarantor or any
of its subsidiaries or any material order, rule or regulation of any
court or governmental agency having jurisdiction over the Guarantor,
any of its subsidiaries or their respective properties, except for
such conflicts, liens, charges, encumbrances, defaults or violations
that would not have a Material Adverse Effect; and assuming the
accuracy of the representations and warranties of the Purchasers set
forth in Section 4 of this Agreement, no consent, authorization or
order of, or filing or registration with, any court or governmental
agency is required therefor, except in connection with the
registration of the Securities pursuant to the Registration Rights
Agreement and except as to state or foreign securities laws or by the
regulations of the NASD.
(n) Neither the Trust, the Guarantor nor any of the Guarantor's
subsidiaries is in violation of its
<PAGE>
8
organizational documents or in default under any agreement, indenture,
mortgage, lease, note or instrument, which violation or default would
have a Material Adverse Effect or a Trust Material Adverse Effect.
(o) The Trust has full power and authority to authorize, issue
and sell the Preferred Securities as contemplated by this Agreement
and to execute, deliver and perform this Agreement and the
Registration Rights Agreement.
(p) This Agreement has been duly authorized, executed and
delivered by the Trust and the Guarantor.
(q) Except as disclosed in the Offering Document, the Trustee (as
defined in the Offering Document) will on the Closing Date have good
and valid title to all the Convertible Junior Subordinated Debentures,
free from liens, encumbrances and defects that would materially affect
the value thereof or materially interfere with the use made or to be
made thereof by the Trust.
(r) There is no material litigation or governmental proceeding
pending or, to the knowledge of the Guarantor, threatened against the
Guarantor or any of its subsidiaries which may reasonably be expected
to result in any Material Adverse Effect.
(s) The financial statements of the Guarantor and its
consolidated subsidiaries included or incorporated by reference in the
Offering Document present fairly, in all material respects, the
financial position of the Guarantor and its consolidated subsidiaries
as of the dates shown and their results of operations and cash flows
for the periods shown, and, except as otherwise disclosed in the
Offering Document, such financial statements have been prepared in
conformity with the generally accepted accounting principles in the
United States applied on a consistent basis and the assumptions used
in preparing the pro forma financial statements included in or
incorporated by reference in the Offering Document provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein, the
related pro forma adjustments give appropriate effect to those
assumptions and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical
financial statement amounts.
<PAGE>
9
(t) Since the dates as of which information is given in the
Offering Document, no Material Adverse Effect has occurred.
(u) Neither the Trust nor the Guarantor is an open-end investment
company, unit investment trust or face-amount certificate company that
is or is required to be registered under Section 8 of the Investment
Company Act of 1940 (together with the rules and regulations
thereunder, the "Investment Company Act"), nor is it a closed-end
investment company required to be registered, but not registered,
thereunder; and each of the Trust and the Guarantor is not and, after
giving effect to the offer and sale of the Preferred Securities and
the application of the proceeds thereof as described in the Offering
Document, will not be an "investment company" as defined in the
Investment Company Act.
(v) No securities of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as the Preferred Securities
are listed on any national securities exchange registered under
Section 6 of the Exchange Act or quoted in a U.S. automated
interdealer quotation system.
(w) The offer and sale of the Preferred Securities in the manner
contemplated by this Agreement will be exempt from the registration
requirements of the Securities Act by reason of Section 4(2) thereof,
and Regulation S ("Regulation S") thereunder; and it is not necessary
to qualify an indenture in respect of any of the Securities under the
United States Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), except as contemplated by the Registration Rights
Agreement.
(x) Neither the Guarantor, nor the Trust, nor any of their
respective affiliates, nor any person acting on behalf of any of the
foregoing (i) has, within the six-month period prior to the date
hereof, offered or sold in the United States or to any U.S. person (as
such terms are defined in Regulation S under the Securities Act) the
Preferred Securities or any security of the same class or series as
the Preferred Securities or (ii) has offered or will offer or sell the
Preferred Securities (A) in the United States by means of any form of
general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act or (B) with respect to any such
securities sold in reliance on Rule 903 of Regulation S
<PAGE>
10
under the Securities Act, by means of any directed selling efforts
within the meaning of Rule 902(b) of Regulation S. The Guarantor and
the Trust, their respective affiliates and any person acting on behalf
of any of the foregoing have complied and will comply with the
offering restrictions requirement of Regulation S. The Guarantor and
the Trust have not entered and will not enter into any contractual
arrangement with respect to the distribution of the Preferred
Securities except for the Placement Agreement, dated June 12, 1997
between the Guarantor and Credit Suisse First Boston Corporation, this
Agreement and the Registration Rights Agreement.
(y) The Guarantor is subject to Section 13 or 15(d) of the
Exchange Act.
(z) The Guarantor and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business now
operated by them, except where the failure to possess such
certificates or permits will not individually or in the aggregate have
a Material Adverse Effect; and have not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the
Guarantor or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect.
(aa) Except as disclosed in the Offering Document and except for
statutory liens for sums not yet due or which are being contested in
good faith in appropriate proceedings, the Guarantor and its
subsidiaries have good and marketable title to all real properties and
other properties and assets owned by them, in each case free from
liens, encumbrances and defects that would, individually or in the
aggregate, have a Material Adverse Effect; and except as disclosed in
the Offering Document or as will not have a Material Adverse Effect,
the Guarantor and its subsidiaries hold any leased real or personal
property under valid and enforceable leases with no exceptions that
would materially interfere with the use made or to be made thereof by
them.
(bb) The Guarantor and its subsidiaries own or possess, or can
acquire on reasonable terms, adequate trademarks, trade names and
other rights to inventions, know-how, patents, copyrights,
confidential information and other intellectual property
(collectively, "intellectual property rights") necessary to conduct
<PAGE>
11
the business now operated by them, or presently employed by them, the
loss of which may reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; and have not received
any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that, if
determined adversely to the Guarantor or any of its subsidiaries,
would individually or in the aggregate, have a Material Adverse
Effect.
(cc) No labor dispute with the employees of the Guarantor or any
of its subsidiaries exists or, to the knowledge of the Guarantor, is
imminent that may be reasonably expected to have a Material Adverse
Effect.
(dd) Except as disclosed in the Offering Document, neither the
Guarantor nor any of its subsidiaries is in violation of any statute,
any rule, regulation, decision or order of any governmental agency or
body or any court, domestic or foreign, relating to the use, disposal
or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "environmental laws"),
owns or operates any real property contaminated with any substance
requiring remediation or removal under any environmental laws, is
liable for any off-site disposal or contamination pursuant to any
environmental laws, or is subject to any claim relating to any
environmental laws, which violation, contamination, liability or claim
individually or in the aggregate may reasonably be expected to have a
Material Adverse Effect; and the Guarantor is not aware of any pending
investigation which might lead to such a claim.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Trust and the Guarantor agree that
the Trust shall issue and sell to the Purchasers, and the Purchasers agree to
purchase from the Trust, at a purchase price of $50 per Preferred Security, plus
accrued and unpaid distributions if any, from the closing date, the number of
Preferred Securities set forth opposite the name of each Purchaser in Schedule A
hereto.
The Trust will deliver against payment of the purchase price the Preferred
Securities in the form of one or more permanent global Securities in definitive
form (the
<PAGE>
12
"Global Securities") deposited with the Trustee as custodian for The
Depository Trust Company ("DTC") and registered in the name of Cede & Co., as
nominee for DTC. The Global Securities shall include the legend regarding
restrictions on transfer set forth under "Transfer Restrictions" in the Offering
Document. Interests in any permanent global Preferred Securities will be held
only in book-entry form through DTC, except in the limited circumstances
described in the Offering Document. Payment for the Global Securities shall be
made by the Purchasers in Federal (same day) funds to the account specified in
Schedule A to this Agreement by wire transfer payable to the order of the Trust
at the office of Cravath, Swaine & Moore at 10:00 a.m. (New York time), on June
12, 1997 or at such other time not later than seven full business days
thereafter as the Purchasers and the Trust and the Guarantor determine such time
being herein referred to as the "Closing Date", against delivery to the Trustee
as custodian for DTC of the Global Securities representing all of the Global
Securities.
4. Representations by Purchasers; Resale by Purchaser. Each of undersigned
Purchasers hereby severally acknowledges, represents, warrants to and agrees
with the Trust and the Guarantor as follows:
(a) None of the Preferred Securities are registered under the
Securities Act of 1933, as amended (the "Securities Act") or any state
securities laws. Each of the undersigned understands that the offering
and sale of the Preferred Securities is intended to be exempt from
registration under the Securities Act by virtue of Section 4(2)
thereof, based, in part, upon the representations, warranties and
agreements contained in this Agreement;
(b) Each of the undersigned has received the Offering Document,
has carefully reviewed it and understands the information contained
therein;
(c) Neither the Securities and Exchange Commission nor any state
securities commission has approved the Preferred Securities or passed
upon or endorsed the merits of the offering or confirmed the accuracy
or determined the adequacy of the Offering Document. The Offering
Document has not been reviewed by any Federal, state or other
regulatory authority;
(d) Each of the undersigned acknowledges that all documents,
records and books pertaining to the investment in the Preferred
Securities (including, without limitation, the Offering Document)
which it has
<PAGE>
13
requested have been made available for inspection by it, its
attorneys, accountants, purchaser representatives or tax advisors
(collectively, the "Advisors");
(e) Each of the undersigned and its Advisors have had a
reasonable opportunity to ask questions of and receive answers from a
person or persons acting on behalf of the Trust and the Guarantor
concerning the offering of the Preferred Securities and all such
questions have been answered to the full satisfaction of each of the
undersigned and its Advisors;
(f) In evaluating the suitability of an investment in the Trust,
each of the undersigned has not relied upon any representation or
other information (oral or written) other than as stated in the
Offering Document or as contained in documents or answers to questions
so furnished to each of the undersigned or its Advisors by the Trust
or the Guarantor;
(g) Each of the undersigned is unaware of, and in no way relying
on, any form of general solicitation or general advertising in
connection with the offer and sale of the Preferred Securities;
(h) Each of the undersigned has such knowledge and experience in
financial, tax, and business matters so as to enable it to utilize the
information made available to it in connection with the offering of
the Preferred Securities to evaluate the merits and risks of an
investment in the Preferred Securities and to make an informed
investment decision with respect thereto;
(i) Each of the undersigned is not relying on the Trust or the
Guarantor respecting the tax and other economic considerations of an
investment in the Preferred Securities, and each of the undersigned
has relied on the advice of, or has consulted with, only its own
Advisors;
(j) Each of the undersigned is acquiring the Preferred Securities
solely for its own account for investment and not with a view to
resale or distribution;
(k) Each of the undersigned must bear the economic risk of the
investment indefinitely because none of the Preferred Securities may
be sold hypothecated or otherwise disposed of unless or until
<PAGE>
14
subsequently registered under the Securities Act and applicable
state securities laws or an exemption from registration is available
with respect thereto. Legends shall be placed on the Preferred
Securities to the effect that they have not been registered under the
Securities Act or applicable state securities laws and appropriate
notations thereof will be made in the Trusts's Preferred Securities
register;
(l) Each of the undersigned is aware that an investment in the
Preferred Securities involves a number of very significant risks and
has carefully read and considered the matters set forth under the
caption "Risk Factors" in the Offering Document;
(m) Each of the undersigned: (i) if a corporation, partnership,
association, joint stock company, trust, unincorporated organization
or other entity represents that such entity was not formed for the
specific purpose of acquiring the Preferred Securities, such entity is
validly existing under the laws of the state of its organization, the
consummation of the transactions contemplated hereby is authorized by,
and will not result in a violation of state law or its charter or
other organizational documents, such entity has full power and
authority to execute and deliver this Agreement and all other related
agreements or certificates and to carry out the provisions hereof and
thereof, this Agreement has been duly authorized by all necessary
action, this Agreement has been duly executed and delivered on behalf
of such entity and is a legal, valid and binding obligation of such
entity; (ii) if executing this Agreement in a representative or
fiduciary capacity, represents that it has full power and authority to
execute and deliver this Agreement in such capacity and on behalf of
the subscribing individual, ward, partnership, trust, estate,
corporation, or other entity for whom the undersigned is executing
this Agreement, and such individual, ward, partnership, trust, estate,
corporation, or other entity has full right and power to perform
pursuant to this Agreement and make an investment in the Trust, and
that this Agreement constitutes a legal, valid and binding obligation
of such entity.
<PAGE>
15
5. Certain Agreements of the Trust and the Guarantor. Each of the
Trust and the Guarantor, jointly and severally, agrees with the
Purchasers that:
(a) At any time when the Guarantor is not subject to Section 13
or 15(d) of the Exchange Act, the Guarantor will promptly furnish or
cause to be furnished to the Purchasers and, upon request of holders
and prospective purchasers of the Preferred Securities, to such
holders and purchasers, a reasonable number of copies of the
information required to be delivered to holders and prospective
purchasers of the Preferred Securities pursuant to Rule 144A (d)(4)
under the Securities Act (or any successor provision thereto) in order
to permit compliance with Rule 144A in connection with resales by such
holders of the Preferred Securities.
(b) During the period of five years hereafter, the Guarantor will
furnish to each Purchaser, as soon as practicable after the end of
each fiscal year, a copy of its annual report to stockholders for such
year; and the Guarantor will furnish to each Purchaser (i) as soon as
available, a copy of each report and any definitive proxy statement of
the Guarantor filed with the Commission under the Exchange Act or
mailed to stockholders and (ii) from time to time, such other
information concerning the Guarantor as each Purchaser may reasonably
request.
(c) During the period of two years after the Closing Date (or,
after the Shelf Registration Statement shall have been declared
effective, such shorter period as may be specified in Section 2(b) of
the Registration Rights Agreement), the Guarantor will, upon request,
furnish to each Purchaser a copy of the restrictions on transfer set
forth under "Transfer Restrictions" in the Offering Document
applicable to the Preferred Securities.
(d) During the period of two years after the Closing Date (or,
after the Shelf Registration Statement shall have been declared
effective, such shorter period as may be specified in Section 2(b) of
the Registration Rights Agreement), the Guarantor will not, and will
not permit any of its affiliates (as defined in Rule 144 under the
Securities Act) to, resell any of the Preferred Securities that have
been reacquired by any of them, except for Preferred Securities
purchased by the Guarantor or any of its
<PAGE>
16
affiliates and resold in a transaction registered under the Securities
Act.
(e) During the period of two years after the Closing Date (or,
after the Shelf Registration Statement shall have been declared
effective, such shorter period as may be specified in Section 2(b) of
the Registration Rights Agreement), the Guarantor and the Trust will
not be or become an open-end investment company, unit investment trust
or face-amount certificate company that is or is required to be
registered under Section 8 of the Investment Company Act and is not,
and will not be or become, a closed-end investment company required to
be registered, but not registered, under the Investment Company Act.
(f) The Guarantor will pay all expenses incidental to the
performance of its obligations under this Agreement, the Registration
Rights Agreement and the Guarantor Agreements, including but not
limited to (i) the fees and expenses of the Trustees and their
professional advisers; (ii) all expenses in connection with the
execution, issue, authentication, packaging and initial delivery of
the Preferred Securities, the preparation and printing of this
Agreement, the Registration Rights Agreement, the Preferred Securities
and the Guarantor Agreements, the Offering Document and amendments and
supplements thereto, and any other document relating to the issuance,
offer, sale and delivery of the Preferred Securities; (iii) the fees
and disbursements of Willkie Farr & Gallagher, who are acting as
special counsel for the Purchasers in connection with the transactions
contemplated by this Agreement; and (iv) qualifying the Offered
Securities for trading in The Private Offerings, Resale and Trading
through Automated Linkages (PORTAL)Market of the Nasdaq Stock Market
Inc. and any expenses incidental thereto.
(g) The Trust and the Guarantor will apply the proceeds of the
offer and sale of the Preferred Securities in the manner set forth in
the Offering Document under the caption "Use of Proceeds".
(h) So long as a Purchaser or any of its affiliates is the holder
of a Preferred Security, or a Book Entry Interest (as defined in the
Trust Agreement), the Guarantor will deliver or cause the Debenture
Trustee or the Trust, as appropriate, to deliver to such Purchaser or
affiliate:
<PAGE>
17
(i) concurrently with the giving of notice thereof to the
Trustee or the holder or holders of the Convertible Junior
Subordinated Debentures, written notice of the selection of an
Extended Interest Payment Period and each extension thereof, in each
case pursuant to Section 3.12 of the Indenture,
(ii) concurrently with the delivery thereof to the holder or
holders of the Convertible Junior Subordinated Debentures pursuant to
Section 6.02 of the Indenture, a copy of each notice of a default or
Event of Default under the Indenture,
(iii) promptly after filing thereof with the Trustee, copies
of all information, documents and other reports filed pursuant to
Section 7.04 of the Indenture,
(iv) concurrently with the mailing of notice thereof to the
record holders of Preferred Securities pursuant to Section 13.05 of
the Indenture, a copy of each certificate filed with the Debenture
Trustee in connection with an adjustment of the conversion price of
the Underlying Shares, and
(v) concurrently with the delivery thereof to the
Depositary, copies of all notices or other writings under the
Indenture or the Trust Agreement that are required to be provided to
record holders of Preferred Securities.
6. Conditions of the Obligations of the Purchasers. The obligations of each
Purchaser to purchase and pay for the Preferred Securities on the Closing Date
will be subject to the accuracy of the representations and warranties on the
part of the Trust and the Guarantor herein, to the accuracy of the statements of
officers of the Trust and the Guarantor made pursuant to the provisions hereof,
to the performance by the Trust and the Guarantor of their obligations hereunder
and to the following additional conditions precedent:
(a) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in or affecting particularly the condition
(financial or other), business, properties or results of operations of the
Trust or the Guarantor and its subsidiaries which, in the reasonable
judgment of a
<PAGE>
Purchaser, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the offering or the sale of and
payment for the Offered Securities; (ii) any downgrading in the rating of
any debt securities of the Guarantor by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Securities Act) or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities of the Guarantor (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any suspension or limitation of trading
in securities generally on either of the New York Stock Exchange or The
Nasdaq Stock Market's National Market, or any setting of minimum prices for
trading on any such exchange, or any suspension of trading of any
securities of the Guarantor on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by U.S. Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the reasonable judgment of a Purchaser, the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the offering or sale of and
payment for the Offered Securities.
(b) The Purchasers shall have received opinions, dated such Closing
Date of (i) Dickstein Shapiro Morin & Oshinsky LLP, counsel for the Trust
and the Guarantor in the forms attached hereto as Exhibits A-1 and A-2;
(ii) Morris, Nichols, Arsht & Tunnell, special Delaware counsel to the
Trust and the Guarantor, substantially in the form attached hereto as
Exhibit B; (iii) Emmet, Marvin & Martin, counsel to the Guarantee Trustee,
Indenture Trustee and Property Trustee, in the form attached hereto as
Exhibit C and (iv) Morris, Nichols, Arsht & Tunnell, counsel for the
Delaware Trustee, in the form attached hereto as Exhibit D.
(c) The Purchasers shall have received a certificate, dated such
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Guarantor in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Trust and the
<PAGE>
Guarantor in this Agreement are true and correct, that the Trust and the
Guarantor have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied hereunder at or prior to such
Closing Date and that, subsequent to the dates of the most recent financial
statements in the Offering Document there has been no material adverse
change, nor any development or event involving a prospective material
adverse change, in the condition (financial or other), business, properties
or results of operations of the Guarantor and its subsidiaries taken as a
whole except as set forth in or contemplated by the Offering Document or as
described in such certificate.
(d) The Registration Rights Agreement shall have been duly executed
and delivered by the Guarantor and the Trust.
(e) The Preferred Securities and the Convertible Junior Subordinated
Debentures shall have been assigned Private Placement Numbers by Standard &
Poor's CUSIP Service Bureau (in cooperation with the Securities Valuation
Office of the National Association of Securities Commissioners).
(f) The Guarantor shall have paid the fees and disbursements of
special counsel for the Purchasers referred to in Section 5(f) to the
extent reflected in a statement of such counsel rendered to the Guarantor
at least one business day before the Closing Date.
The Guarantor will furnish the Purchasers with such conformed copies of
such opinions, certificates, letters and documents as the Purchasers reasonably
request. The Purchasers may in their sole discretion waive compliance with any
conditions to the obligations of the Purchasers hereunder.
7. Survival of Certain Representations and Obligations. The respective
agreements, representations, warranties and other statements of the Trust and
the Guarantor or their officers and of the Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of the Purchasers, the Trust or the Guarantor or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Preferred Securities. If for any reason
the purchase of the Preferred Securities by the Purchasers are not consummated,
the Trust and the Guarantor shall remain
<PAGE>
20
responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 and if any Preferred Securities have been purchased hereunder the
representations and warranties in Section 2 and all obligations under Section 5
shall also remain in effect.
8. Notices. All communications hereunder will be in writing and, if sent to
the Purchasers will be mailed, delivered or telegraphed and confirmed to each
Purchaser at the addresses listed in Schedule A hereto, or, if sent to the Trust
or the Guarantor, will be mailed, delivered or telegraphed and confirmed to it
at DT Industries, Inc., 1949 E. Sunshine, Springfield, MO 65804, Attention:
President and Chief Executive Officer.
9. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns, and no
other person will have any right or obligation hereunder, except that the
holders, from time to time, of the Preferred Securities, shall be entitled to
enforce the agreements for their benefit contained in Section 5(a) hereof
against the Trust or the Guarantor as if such holders were parties hereto.
10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
11. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflicts of laws.
Each of the Trust and the Guarantor hereby submits to the nonexclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
<PAGE>
21
If the foregoing is in accordance with the Purchasers' understanding of our
agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Trust and the Guarantor
and the Purchasers in accordance with its terms.
Very truly yours,
DT CAPITAL TRUST,
by Stephen J. Gore, solely in
his capacity as trustee
and not in his individual
capacity,
/s/ Stephen J. Gore
-----------------------------------
by Gregory D. Wilson, solely in
his capacity as trustee
and not in his individual
capacity,
/s/ Gregory D. Wilson
-----------------------------------
DT INDUSTRIES, INC.,
by /s/ Bruce P. Erdel
--------------------------------
Name: Bruce P. Erdel
Title: Secretary
<PAGE>
22
The foregoing Purchase
Agreement is hereby confirmed
and accepted as of the date
first above written.
The Northwestern Mutual Life
Insurance Company,
by /s/ A. Kipp Koester
-----------------------------
Name: A. Kipp Koester
Title: Vice President
The Travelers
Insurance Company
(I/N/O TRAL & Co.)
by /s/ John W. Petchler
----------------------------
Name: John W. Petchler
Title: Second Vice President
The Travelers Indemnity Company
(I/N/O TRAL & Co.)
by /s/ John W. Petchler
-----------------------------
Name: John W. Petchler
Title: Second Vice President
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: /s/ John B. Joyce
----------------------------
Name: John B. Joyce
Title: Managing Director
The foregoing is executed on behalf of the Trust, organized under a Declaration
of Trust, dated April 7, 1988, as amended from time to time. The obligations of
such Trust are not personally binding upon, nor shall resort be had to the
property of, any of the Trustees, shareholders, officers, employees or agents of
such Trust, but the Trust's property only shall be bound.
MASSMUTUAL PARTICIPATION INVESTORS
By: /s/ John B. Joyce
----------------------------
Name: John B. Joyce
Title: Vice President
The foregoing is executed on behalf of the Trust, organized under a Declaration
of Trust, dated September 13, 1985, as amended from time to time. The
obligations of such Trust are not personally binding upon, nor shall resort be
had to the property of, any of the Trustees, shareholders, officers, employees
or agents of such Trust, but the Trust's property only shall be bound.
MASSMUTUAL CORPORATE INVESTORS
By: /s/ John B. Joyce
----------------------------
Name: John B. Joyce
Title: Vice President
<PAGE>
24
MASSMUTUAL CORPORATE VALUE PARTNERS LIMITED,
By Massachusetts Mutual Life Insurance Company, its
Investment Manager
By: /s/ John B. Joyce
----------------------------
Name: John B. Joyce
Title: Managing Director
MASSMUTUAL HIGH YIELD PARTNERS LLC,
By HYP Management, Inc. as Managing Member
By: /s/ John B. Joyce
----------------------------
Name: John B. Joyce
Title: Vice President
<PAGE>
NOTE
The following page contains a list of Exhibits and Schedules which have
been intentionally omitted by the Registrant.
A copy of any omitted Exhibit or Schedule will be provided to the
Securities and Exchange Commission upon request.
<PAGE>
SCHEDULE A List of names and addresses of Purchasers, dollar amounts of
amounts of securities to be purchased and funding instructions
DT INDUSTRIES, INC.
RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
(dollars in thousands)
<TABLE>
<CAPTION>
Historical
----------
Predecessor Nine Months
Fiscal year Fiscal Year Ended Ended
Ended June 30, June 26, June 25, June 30, March 24, March 30,
July 30, 1992 1993 1994 1995 1996 1996 1997
------------- -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Pre-tax earnings 1,059 1,832 10,563 14,414 23,134 15,005 31,212
Interest expense 3,295 2,583 3,506 1,849 4,799 2,922 8,825
Rent(1) 195 211 429 699 1,034 776 1,792
Adjusted
earnings(A) - - - - - - -
----- ----- ------ ------ ------ ------ ------
4,549 4,626 14,498 16,962 28,967 18,703 41,829
===== ===== ====== ====== ====== ====== ======
Fixed Charges:
Interest 3,295 2,583 3,506 1,849 4,799 2,922 8,825
Rent(1) 195 211 429 699 1,304 776 1,792
Preferred stock
dividends - - - - - - -
----- ----- ------ ------ ------ ------ ------
Adjusted fixed
charges(B) 3,490 2,794 3,935 2,548 5,833 3,698 10,617
===== ===== ====== ====== ====== ====== ======
Ratio of earnings 1.30 1.66 3.68 6.66 4.97 5.06 3.94
to fixed charges
(A/B)
</TABLE>
<TABLE>
<CAPTION>
Pro Forma
---------
Nine
Year Months
Ended Ended
June 30, March 30,
1996 1997
-------- ---------
<S> <C> <C>
Earnings:
Pre-tax earnings 37,005 34,328
Interest expense 1,848 2,994
Rent(1) 1,034 1,792
Adjusted
earnings(A) 5,012 3,759
------ ------
44,899 42,873
====== ======
Fixed Charges:
Interest 1,848 2,994
Rent(1) 1,034 1,792
Preferred stock
dividends 5,012 3,759
----- -----
Adjusted fixed
charges(B) 7,894 8,545
====== ======
Ratio of earnings 5.69 5.02
to fixed charges
(A/B)
</TABLE>
(1) - The Company estimates that the interest portion of rent expense is
equivalent to one-third of total rent expense.
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the DT Industries, Inc.
Registration Statement on Form S-3 for 1,400,000 (TIDES(SM)) DT Capital Trust
7.16% Convertible Preferred Securities Term Income Deferrable Equity Securities
(TIDES(SM)) ("Form S-3") of our report on the consolidated financial statements
of DT Industries, Inc. dated August 9, 1996, which appears on page 24 of the
1996 Annual Report to Stockholders of DT Industries, Inc., which is
incorporated by reference in DT Industries, Inc.'s Annual Report on Form 10-K
for the year ended June 30, 1996. Such Annual Report on Form 10-K is
incorporated by reference in the Form S-3. We also consent to the incorporation
by reference of our report on the Financial Statement Schedule, which appears on
page S-1 of such Annual Report on Form 10-K. We also consent to the reference to
us under the heading "Experts" in such Form S-3.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
St. Louis, Missouri
July 7, 1997
Altschuler, Melvoin and Glasser LLP
Certified Public Accountants and Consultants
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the DT Industries, Inc.
Form S-3 for 1,400,000 DT Capital Trust 7.16% Convertible Preferred Securities
Term Income Deferrable Equity Securities (Tides) ("Form S-3") of our report on
the consolidated financial statements of Mid-West Automation Enterprises, Inc.
dated August 20, 1996 which appears on page 3 of the Current Report on Form
8-K/A of DT Industries, Inc. filed on September 23, 1996. Such Current Report on
Form 8-K/A is incorporated by reference in the Form S-3. We also consent to the
reference to us under the heading "Experts" in such Form S-3.
/s/ Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
July 7, 1997
30 South Wacker Drive, Suite 2600, Chicago, Illinois 60606-7494
312.207.2800 Fax 312.207.2954 http://www.amgnet.com
Associated Worldwide With Summit International Associates, Inc.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stephen J. Gore and Bruce P. Erdel, and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign the Registration Statement on Form S-3 of DT Capital Trust
(the "Trust") and DT Industries, Inc., relating to the proposed public offering
of the Convertible Preferred Securities of the Trust, and to sign any and all
amendments (including post-effective amendments) and supplements thereto, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Dated: July 7, 1997
/s/ James J. Kerley
James J. Kerley
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stephen J. Gore and Bruce P. Erdel, and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign the Registration Statement on Form S-3 of DT Capital Trust
(the "Trust") and DT Industries, Inc., relating to the proposed public offering
of the Convertible Preferred Securities of the Trust, and to sign any and all
amendments (including post-effective amendments) and supplements thereto, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Dated: July 7, 1997
/s/ Stephen J. Gore
Stephen J. Gore
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stephen J. Gore and Bruce P. Erdel, and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign the Registration Statement on Form S-3 of DT Capital Trust
(the "Trust") and DT Industries, Inc., relating to the proposed public offering
of the Convertible Preferred Securities of the Trust, and to sign any and all
amendments (including post-effective amendments) and supplements thereto, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Dated: July 7, 1997
/s/ William H.T. Bush
William H.T. Bush
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stephen J. Gore and Bruce P. Erdel, and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign the Registration Statement on Form S-3 of DT Capital Trust
(the "Trust") and DT Industries, Inc., relating to the proposed public offering
of the Convertible Preferred Securities of the Trust, and to sign any and all
amendments (including post-effective amendments) and supplements thereto, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Dated: July 7, 1997
/s/ Lee M. Liberman
Lee M. Liberman
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stephen J. Gore and Bruce P. Erdel, and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign the Registration Statement on Form S-3 of DT Capital Trust
(the "Trust") and DT Industries, Inc., relating to the proposed public offering
of the Convertible Preferred Securities of the Trust, and to sign any and all
amendments (including post-effective amendments) and supplements thereto, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Dated: July 7, 1997
/s/ Donald E. Nickelson
Donald E. Nickelson
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stephen J. Gore and Bruce P. Erdel, and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign the Registration Statement on Form S-3 of DT Capital Trust
(the "Trust") and DT Industries, Inc., relating to the proposed public offering
of the Convertible Preferred Securities of the Trust, and to sign any and all
amendments (including post-effective amendments) and supplements thereto, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Dated: July 7, 1997
/s/ Charles F. Pollnow
Charles F. Pollnow
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stephen J. Gore and Bruce P. Erdel, and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign the Registration Statement on Form S-3 of DT Capital Trust
(the "Trust") and DT Industries, Inc., relating to the proposed public offering
of the Convertible Preferred Securities of the Trust, and to sign any and all
amendments (including post-effective amendments) and supplements thereto, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Dated: July 7, 1997
/s/ Graham Lewis
Graham Lewis
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stephen J. Gore and Bruce P. Erdel, and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign the Registration Statement on Form S-3 of DT Capital Trust
(the "Trust") and DT Industries, Inc., relating to the proposed public offering
of the Convertible Preferred Securities of the Trust, and to sign any and all
amendments (including post-effective amendments) and supplements thereto, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Dated: July 7, 1997
/s/ John F. Logan
John F. Logan
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
------------------------
DT INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
Delaware 44-0537828
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Suite 2-300
1949 E. Sunshine
Springfield, MO 65804
(Address of principal executive offices) (Zip code)
------------------------
7.16% Convertible Junior Subordinated
Deferrable Interest Debentures Due 2012
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 2nd day of July, 1997.
THE BANK OF NEW YORK
By: /s/ Mary LaGumina
------------------------------------
Name: Mary LaGumina
Title: Assistant Vice President
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ................... $ 6,024,605
Interest-bearing balances ........... 808,821
Securities:
Held-to-maturity securities ......... 1,071,747
Available-for-sale securities ....... 3,105,207
Federal funds sold in domestic offices
of the bank: .......................... 4,250,941
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ............................ 31,962,915
LESS: Allowance for loan and
lease losses ...................... 635,084
LESS: Allocated transfer risk
reserve............................ 429
Loans and leases, net of unearned
income, allowance, and reserve 31,327,402
Assets held in trading accounts ....... 1,539,612
Premises and fixed assets (including
capitalized leases) ................. 692,317
Other real estate owned ............... 22,123
Investments in unconsolidated
subsidiaries and associated
companies ........................... 213,512
Customers' liability to this bank on
acceptances outstanding ............. 985,297
Intangible assets ..................... 590,973
Other assets .......................... 1,487,903
-----------
Total assets .......................... $52,120,460
===========
<PAGE>
LIABILITIES
Deposits:
In domestic offices ................. $25,929,642
Noninterest-bearing ................. 11,245,050
Interest-bearing .................... 14,684,592
In foreign offices, Edge and
Agreement subsidiaries, and IBFs .... 12,852,809
Noninterest-bearing ................. 552,203
Interest-bearing .................... 12,300,606
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
Federal funds purchased ............. 1,360,877
Securities sold under agreements
to repurchase........................ 226,158
Demand notes issued to the U.S.
Treasury ............................ 204,987
Trading liabilities ................... 1,437,445
Other borrowed money:
With original maturity of one year
or less ........................... 2,312,556
With original maturity of more than
one year .......................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding ............... 1,014,717
Subordinated notes and debentures ..... 1,014,400
Other liabilities ..................... 1,721,291
-----------
Total liabilities ..................... 48,095,648
-----------
EQUITY CAPITAL
Common stock .......................... 942,284
Surplus ............................... 731,319
Undivided profits and capital
reserves ............................ 2,354,095
Net unrealized holding gains
(losses) on available-for-sale
securities .......................... 7,030
Cumulative foreign currency transla-
tion adjustments .................... ( 9,916)
-----------
Total equity capital .................. 4,024,812
-----------
Total liabilities and equity
capital ............................. $52,120,460
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
__
J. Carter Bacot |
Thomas A. Renyi |- Directors
Alan R. Griffith __|
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
--------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
--------------------------
DT CAPITAL TRUST
(Exact name of obligor as specified in its charter)
Delaware 43-1785544
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Suite 2-300
1949 E. Sunshine
Springfield, MO 65804
(Address of principal executive offices) (Zip code)
--------------------------
Preferred Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 2nd day of July, 1997.
THE BANK OF NEW YORK
By: /s/ Mary LaGumina
------------------------------------
Name: Mary LaGumina
Title: Assistant Vice President
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ................... $ 6,024,605
Interest-bearing balances ........... 808,821
Securities:
Held-to-maturity securities ......... 1,071,747
Available-for-sale securities ....... 3,105,207
Federal funds sold in domestic offices
of the bank: .......................... 4,250,941
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ............................ 31,962,915
LESS: Allowance for loan and
lease losses ...................... 635,084
LESS: Allocated transfer risk
reserve............................ 429
Loans and leases, net of unearned
income, allowance, and reserve 31,327,402
Assets held in trading accounts ....... 1,539,612
Premises and fixed assets (including
capitalized leases) ................. 692,317
Other real estate owned ............... 22,123
Investments in unconsolidated
subsidiaries and associated
companies ........................... 213,512
Customers' liability to this bank on
acceptances outstanding ............. 985,297
Intangible assets ..................... 590,973
Other assets .......................... 1,487,903
-----------
Total assets .......................... $52,120,460
===========
<PAGE>
LIABILITIES
Deposits:
In domestic offices ................. $25,929,642
Noninterest-bearing ................. 11,245,050
Interest-bearing .................... 14,684,592
In foreign offices, Edge and
Agreement subsidiaries, and IBFs .... 12,852,809
Noninterest-bearing ................. 552,203
Interest-bearing .................... 12,300,606
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
Federal funds purchased ............. 1,360,877
Securities sold under agreements
to repurchase........................ 226,158
Demand notes issued to the U.S.
Treasury ............................ 204,987
Trading liabilities ................... 1,437,445
Other borrowed money:
With original maturity of one year
or less ........................... 2,312,556
With original maturity of more than
one year .......................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding ............... 1,014,717
Subordinated notes and debentures ..... 1,014,400
Other liabilities ..................... 1,721,291
-----------
Total liabilities ..................... 48,095,648
-----------
EQUITY CAPITAL
Common stock .......................... 942,284
Surplus ............................... 731,319
Undivided profits and capital
reserves ............................ 2,354,095
Net unrealized holding gains
(losses) on available-for-sale
securities .......................... 7,030
Cumulative foreign currency transla-
tion adjustments .................... ( 9,916)
-----------
Total equity capital .................. 4,024,812
-----------
Total liabilities and equity
capital ............................. $52,120,460
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
__
J. Carter Bacot |
Thomas A. Renyi |- Directors
Alan R. Griffith __|
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
------------------------
DT INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
Delaware 44-0537828
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Suite 2-300
1949 E. Sunshine
Springfield, MO 65804
(Address of principal executive offices) (Zip code)
------------------------
Guarantee of Convertible Preferred Securities of
DT Capital Trust
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 2nd day of July, 1997.
THE BANK OF NEW YORK
By: /s/ Mary LaGumina
------------------------------------
Name: Mary LaGumina
Title: Assistant Vice President
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ................... $ 6,024,605
Interest-bearing balances ........... 808,821
Securities:
Held-to-maturity securities ......... 1,071,747
Available-for-sale securities ....... 3,105,207
Federal funds sold in domestic offices
of the bank: .......................... 4,250,941
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ............................ 31,962,915
LESS: Allowance for loan and
lease losses ...................... 635,084
LESS: Allocated transfer risk
reserve............................ 429
Loans and leases, net of unearned
income, allowance, and reserve 31,327,402
Assets held in trading accounts ....... 1,539,612
Premises and fixed assets (including
capitalized leases) ................. 692,317
Other real estate owned ............... 22,123
Investments in unconsolidated
subsidiaries and associated
companies ........................... 213,512
Customers' liability to this bank on
acceptances outstanding ............. 985,297
Intangible assets ..................... 590,973
Other assets .......................... 1,487,903
-----------
Total assets .......................... $52,120,460
===========
<PAGE>
LIABILITIES
Deposits:
In domestic offices ................. $25,929,642
Noninterest-bearing ................. 11,245,050
Interest-bearing .................... 14,684,592
In foreign offices, Edge and
Agreement subsidiaries, and IBFs .... 12,852,809
Noninterest-bearing ................. 552,203
Interest-bearing .................... 12,300,606
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
Federal funds purchased ............. 1,360,877
Securities sold under agreements
to repurchase........................ 226,158
Demand notes issued to the U.S.
Treasury ............................ 204,987
Trading liabilities ................... 1,437,445
Other borrowed money:
With original maturity of one year
or less ........................... 2,312,556
With original maturity of more than
one year .......................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding ............... 1,014,717
Subordinated notes and debentures ..... 1,014,400
Other liabilities ..................... 1,721,291
-----------
Total liabilities ..................... 48,095,648
-----------
EQUITY CAPITAL
Common stock .......................... 942,284
Surplus ............................... 731,319
Undivided profits and capital
reserves ............................ 2,354,095
Net unrealized holding gains
(losses) on available-for-sale
securities .......................... 7,030
Cumulative foreign currency transla-
tion adjustments .................... ( 9,916)
-----------
Total equity capital .................. 4,024,812
-----------
Total liabilities and equity
capital ............................. $52,120,460
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
__
J. Carter Bacot |
Thomas A. Renyi |- Directors
Alan R. Griffith __|
