Exhibit 99.1
EXCHANGE AGREEMENT
This EXCHANGE AGREEMENT (this "Agreement") is made and entered into as
of May 9, 2002, by and among DT Industries, Inc., a Delaware corporation (the
"Company"), DT Capital Trust, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), Xxxxxxx X. Xxxxxxx, Xxxx X. Xxxxxx and
Xxxxxxx X. Xxxxxx, as the regular trustees of the Trust (the "Regular
Trustees"), The Bank of New York, a New York banking corporation, as Debenture
Trustee (as hereinafter defined), as Guarantee Trustee (as hereinafter defined),
and as property trustee of the Trust pursuant to the Amended and Restated
Declaration of Trust (as hereinafter defined) (the "Property Trustee"), The Bank
of New York (Delaware), a Delaware banking corporation, as Delaware trustee of
the Trust (the "Delaware Trustee", together with the Property Trustee, Debenture
Trustee, Guarantee Trustee and Regular Trustees, the "Trustees"), and each of
the investors listed on attached Schedule A (including any transferees of the
Preferred Securities (as hereinafter defined) in accordance with Section 21
hereof, the "Investors"). All defined terms may be located by reference to the
Glossary attached as Schedule B.
WHEREAS, the Trust and the Company, as sponsor of the Trust, issued and
sold to the Investors, an aggregate of 1,400,000 of its 7.16% Convertible
Preferred Securities (liquidation preference $50 per Convertible Preferred
Security) (the "Preferred Securities") pursuant to that certain Preferred
Securities Purchase Agreement, dated June 12, 1997 (the "Original Preferred
Securities Purchase Agreement") and issued and sold to the Company, an aggregate
of 43,300 of its 7.16% Convertible Common Securities (liquidation preference $50
per Convertible Common Security) (the "Common Securities") pursuant to that
certain Common Securities Purchase Agreement, dated June 12, 1997 (the "Common
Securities Purchase Agreement"), each representing undivided beneficial
ownership interests in the assets of the Trust, and guaranteed by the Company as
to the payment of distributions, and as to payments on liquidation or
redemption, to the extent set forth in a preferred securities guarantee
agreement and a common securities guarantee agreement (collectively, the
"Guarantee Agreements") between the Company and The Bank of New York, as trustee
(the "Guarantee Trustee");
WHEREAS, the proceeds of the sale by the Trust of the Preferred
Securities to the Investors and the proceeds of the sale by the Trust of the
Common Securities to the Company were invested in 7.16% Convertible Junior
Subordinated Deferrable Interest Debentures Due 2012 (the "Convertible
Debentures") of the Company issued pursuant to an Indenture dated June 1, 1997
(as supplemented to date, the "Indenture") between the Company and The Bank of
New York, as trustee (the "Debenture Trustee") which Convertible Debentures are
the sole asset of the Trust;
WHEREAS, the Preferred Securities are effectively convertible into
shares of the Company's common stock, par value $0.01 per share (the "Common
Stock");
WHEREAS, the Company and its bank group have agreed to amend the
Company's senior credit facility that currently expires on July 2, 2002 (as
amended to date, the "Credit Facility") to, among other things, extend the
Credit Facility's maturity date to July 2, 2004,
reduce the Company's total commitment under the Credit Facility, modify the
applicable interest rate and modify various financial covenants in the Credit
Facility;
WHEREAS, in connection with the Company's refinancing of the Credit
Facility, the Company and certain purchasers have agreed to the sale and
purchase of an aggregate of 7,000,000 shares of Common Stock at a price of $3.20
per share for an aggregate cash investment of $22,400,000, pursuant to the Share
Purchase Agreement (as hereinafter defined) between the Company and such
purchasers; and
WHEREAS, a condition to the consummation of the Company's refinancing
of the Credit Facility and the sale and purchase of Common Stock pursuant to the
Share Purchase Agreement is that the Company and the holders of the Preferred
Securities agree to restructure the Preferred Securities (and the related
Convertible Debentures held by the Property Trustee) so that, among other
things, 700,000 of the outstanding Preferred Securities are converted into or
otherwise exchanged for 4,375,000 shares of Common Stock and the $15,085,254 in
accrued but unpaid Distributions (as such term is defined in the Amended and
Restated Declaration of Trust, dated as of June 1, 1997, between the Company and
the trustees named therein (as amended to date, the "Amended and Restated
Declaration of Trust")) on the Preferred Securities as of March 31, 2002 are
converted into or otherwise exchanged for 1,885,658 shares of Common Stock (such
6,260,658 shares of Common Stock to be received by the Investors pursuant to the
foregoing exchanges shall be collectively referred to herein as the "TIDES
Equity"), the implied conversion price of the 700,000 of outstanding Preferred
Securities that will remain outstanding and be held by the Investors upon the
consummation of the transactions contemplated hereby (the "Remaining Preferred
Securities") and $43,300 of Common Securities that will continue to be held by
the Company (the "Remaining Common Securities") (and the related Convertible
Debentures held by the Property Trustee) is lowered to $14.00 per share,
Distributions on the Remaining Preferred Securities and the Remaining Common
Securities do not accrue after March 31, 2002 until July 2, 2004, and the
maturity date of the Remaining Preferred Securities and the Remaining Common
Securities is accelerated to May 31, 2008, all pursuant to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual premises and agreements
contained herein and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. EXCHANGE OF PREFERRED SECURITIES FOR COMMON STOCK. Subject to the
terms and conditions set forth in this Agreement, the following transactions
shall occur in the order set forth below but with simultaneous effect, effective
at Closing:
(a) Each Investor shall transfer, convey and deliver to the
Property Trustee, and the Property Trustee shall accept, all of such
Investor's right, title and interest in its pro rata portion of the
700,000 of the Preferred Securities being converted into or otherwise
exchanged for shares of Common Stock pursuant to the terms hereof (the
"Exchanged Preferred"), as set forth opposite each such Investor's name
on attached Schedule A, free and clear of all liens, pledges,
encumbrances, security interests, claims and equities of every kind.
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(b) In exchange for the Exchanged Preferred transferred to the
Property Trustee pursuant to Section 1(a) hereof, effective at Closing,
the Property Trustee shall be deemed to have transferred to each
Investor its corresponding pro rata portion of $35,000,000 in aggregate
principal amount of Convertible Debentures held by the Property Trustee
(the "Exchanged Debentures") and immediately thereafter, exchange such
pro rata portion of the Exchanged Debentures, on behalf of such
Investor, for shares of Common Stock to be issued by the Company at an
exchange rate of 6.25 shares of Common Stock for each $50.00 in
principal amount of Exchanged Debentures (equivalent to an effective
exchange price of $8.00 per share of Common Stock) as further described
in Section 5 below.
(c) The transactions described in Sections 1(a) and (b) are
collectively referred to as the "Preferred Securities Exchange". Upon
consummation of the Preferred Securities Exchange, the Company will
have issued to each Investor a number of shares of Common Stock equal
to the quotient obtained when the aggregate stated principal amount of
the Exchanged Debentures being converted into or otherwise exchanged
for Common Stock by each such Investor is divided by $8.00, as set
forth opposite each such Investor's name on attached Schedule A.
2. EXCHANGE OF ACCRUED DISTRIBUTIONS FOR COMMON STOCK. Subject to the
terms and conditions set forth in this Agreement, the following transactions
shall occur in the order set forth below but with simultaneous effect, effective
at Closing:
(a) Each Investor shall transfer, convey and assign to the
Property Trustee all of its right, title and interest in and to its pro
rata share of the accrued and unpaid Distributions on the total amount
of outstanding Preferred Securities through and including March 31,
2002 held by such Investor (the "PIK Distributions"), and the Property
Trustee shall cancel such accrued and unpaid PIK Distributions, the
amount of which for each Investor is set forth opposite each such
Investor's name on attached Schedule A; and immediately upon
cancellation of the PIK Distributions, the Property Trustee, on behalf
of the Investors and the Trust, shall transfer, convey and assign to
the Company all of their and its respective rights, title and interest
in and to the accrued and unpaid interest on $70,000,000 in aggregate
principal amount of the Convertible Debentures through and including
March 31, 2002 held by the Property Trustee (the "PIK Interest"), free
and clear of all liens, pledges, encumbrances, security interests,
claims and equities of every kind, and the Company shall cancel such
accrued and unpaid PIK Interest.
(b) In exchange for the assignment by each Investor of its
right, title and interest in its pro rata share of the PIK
Distributions to the Property Trustee and the cancellation of such PIK
Distributions by the Property Trustee and the assignment by the
Property Trustee, on behalf of each Investor and the Trust, of the PIK
Interest to the Company, and the cancellation of such PIK Interest,
effective at Closing, the Company shall issue to such Investor shares
of Common Stock at an exchange price of $8.00 per share of Common Stock
(the "PIK Exchange", together with the Preferred Securities Exchange,
the "Exchange"). Upon the effectiveness of the Exchange, each of the
Investors shall be deemed to have waived all of its right, title and
interest in and to its pro
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rata share of the accrued and unpaid Distributions with respect to the
Exchanged Preferred and each of the Property Trustee, the Investors and
the Trust shall be deemed to have waived all of their right, title and
interest in and to the interest with respect to the Exchanged
Debentures, in each case, on or after April 1, 2002 through and
including the Closing Date. Upon consummation of the PIK Exchange, each
Investor will be issued such number of shares of Common Stock set forth
opposite such Investor's name on attached Schedule A.
(c) Subject to the terms and conditions set forth in this
Agreement, effective at Closing, the Company shall transfer, convey and
assign to the Property Trustee the Company's and Trust's right, title
and interest in and to all accrued and unpaid Distributions on the
total amount of outstanding Common Securities through and including
March 31, 2002 held by the Company, and the Property Trustee shall
cancel such accrued and unpaid Distributions, and immediately upon
cancellation of such Distributions, the Property Trustee, on behalf of
the Company and the Trust, shall transfer, convey and assign to the
Company all of their right, title and interest in and to all accrued
and unpaid interest on $2,165,000 in aggregate principal amount of the
Convertible Debentures through and including March 31, 2002 held by the
Property Trustee, and the Company shall cancel such accrued and unpaid
interest.
3. AMENDING TERMS OF PREFERRED AND COMMON SECURITIES.
(a) Immediately following the consummation of the Exchange,
(i) the terms of the Remaining Preferred Securities and the Remaining
Common Securities shall be amended pursuant to the Amendment to the
Amended and Restated Declaration of Trust substantially in the form
attached hereto as Exhibit A; (ii) in connection therewith, the terms
of the $37,165,000 in principal amount of Convertible Debentures that
will remain outstanding and held by the Property Trustee shall be
amended pursuant to the First Supplemental Indenture to the Indenture
substantially in the form attached hereto as Exhibit B; and (iii) the
Guarantee Agreements shall be amended and re-confirmed by the Company
pursuant to the Amendment and Confirmation to the Guarantee Agreements,
each substantially in the form attached hereto as Exhibit C
(collectively with the documents referenced in clauses (i) and (ii) of
this Section 3(a), the "Amendments"). Upon the execution and
effectiveness of the Amendments, each of the Investors and the Company
shall be deemed to have waived its right, title and interest in and to
its pro rata share of the accrued and unpaid Distributions with respect
to the Remaining Preferred Securities and the Remaining Common
Securities, as the case may be, and each of the Property Trustee, the
Investors, the Company and the Trust shall be deemed to have waived
their respective right, title and interest in and to the interest
accruing upon the Convertible Debentures on and after April 1, 2002
through and including the Closing Date.
(b) Concurrent with the effectiveness of the Amendments, (i) a
revised certificate representing the Remaining Preferred Securities
with the amended terms will be issued by the Trust and deposited, on
behalf of the Investors, with the Property Trustee, as custodian for
DTC (as hereinafter defined) and registered in the name of DTC or its
nominee; (ii) a revised certificate representing the Remaining Common
Securities
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with the amended terms will be issued by the Trust and delivered to the
Company; and (iii) a revised certificate representing $37,165,000 in
outstanding principal amount of Convertible Debentures with the amended
terms will be issued by the Company to the Property Trustee
(collectively, the "Revised Certificates").
4. WAIVER AND CONSENT. Each of the Company, in its capacity as sponsor
of the Trust and in its capacity as holder of all outstanding Common Securities
of the Trust, the Regular Trustees, the Property Trustee, the Delaware Trustee
and the Investors, which constitute all of the parties to the Amended and
Restated Declaration of Trust, agrees that, to the extent any provisions of this
Agreement are inconsistent with any provisions of the Amended and Restated
Declaration of Trust, the provisions of the Amended and Restated Declaration of
Trust are deemed amended on the Closing Date to conform to the provisions of
this Agreement. Each of the Company, the Debenture Trustee, the Property
Trustee, as the record owner of the Convertible Debentures, the Trust and the
Investors, agrees that, to the extent any provisions of this Agreement are
inconsistent with any provisions of the Indenture, the provisions of the
Indenture are deemed amended on the Closing Date to conform to the provisions of
this Agreement. In connection with the execution of this Agreement and the
Amendments, each of the parties hereto, to the extent applicable, hereby
approves, consents to and authorizes each of the amendments to the Amended and
Restated Declaration of Trust, the Indenture and the Guarantee Agreements
contemplated or effected by the Transaction Documents (including this Agreement)
and hereby approves, consents to and authorizes all actions necessary for the
execution of this Agreement, the Amendments and all other Transaction Documents,
including, without limitation, authorizing and directing the Debenture Trustee
to accept and rely upon the opinion of tax counsel and the opinion of counsel
being delivered pursuant to this Agreement for its execution of the First
Supplemental Indenture to the Indenture delivered in connection herewith, and
authorizing and directing each of the other applicable Trustees to execute the
other Amendments on its behalf. Without limiting the generality of the
foregoing, each of the parties hereto agrees and acknowledges that it will be
deemed to have waived at Closing (a) any of its approval, consent and/or notice
rights and/or rights to additional satisfaction (if any), and (b) any
inconsistency with or default under the provisions of the Amended and Restated
Declaration of Trust arising under, or triggered by, this Agreement or any other
Transaction Document or the transactions contemplated or effected hereby or
thereby or consummated pursuant hereto or thereto. Each such party further
agrees that the Trust is to execute this Agreement for the purpose of becoming a
party hereto and agreeing to perform its obligations and duties hereunder.
5. THE CLOSING.
(a) The consummation of the transactions contemplated hereby
(the "Closing") shall occur at the offices of Xxxxxx Xxxxxx Xxxxx
Xxxxxxxx, counsel to the Company, at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx at 9:00 a.m. local time on the date the conditions to
the Closing set forth in Sections 5(c), (d) and (e) are satisfied or
waived or such other time and date as may be agreed by the parties (the
"Closing Date").
(b) At the Closing, each of the Investors shall direct in
writing the Property Trustee, as its agent, to (i) instruct The
Depository Trust Company ("DTC") to reduce the amount of outstanding
Preferred Securities electronically registered with DTC by the
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amount of the Exchanged Preferred (the "DTC Reduction"), and to modify
the terms of the Remaining Preferred Securities registered
electronically with DTC to reflect the terms of the Revised Certificate
representing the Remaining Preferred Securities issued pursuant to
Section 3(b) hereof; and (ii) surrender to the Trust the certificates
representing the Exchanged Preferred, on behalf of each such Investor,
duly endorsed or assigned in blank; and each Investor shall deliver to
the Property Trustee an assignment of its PIK Distribution; and
immediately thereafter, the Property Trustee will (and will be directed
by the Investors to) surrender the Exchanged Debentures and assign the
PIK Interest, on behalf of the Trust and each Investor, to the Company;
and upon receipt by the Company of such Exchanged Debentures and the
PIK Interest, the Company shall authorize its transfer agent to issue
to each Investor one or more stock certificates (the "Stock
Certificates") registered in the name of such Investor or its custodial
designee representing the number of shares of Common Stock to be issued
to such Investor upon consummation of the Preferred Securities Exchange
and the PIK Exchange with fractional shares from each of the Preferred
Securities Exchange and the PIK Exchange combined and rounded to the
nearest whole share (as set forth opposite such Investor's name on
Schedule A). Immediately following the consummation of the Preferred
Securities Exchange and the PIK Exchange, the Trust and the Company, as
the case may be, will issue the Revised Certificate as contemplated by
Section 3(b) hereof.
(c) The respective obligations of the Company, the Trust and
the Investors to complete the transaction contemplated hereby at the
Closing shall be subject to the satisfaction of the following
conditions:
(i) the consummation of the Exchange and the
execution of the Amendments shall be approved and duly
authorized by the Company's Board of Directors (the "Board");
(ii) the concurrent consummation of the amendment of
the Credit Facility in accordance with the Twelfth Amendment
to the Fourth Amended and Restated Credit Facilities Agreement
substantially in the form attached hereto as Exhibit D (the
"Amended Loan Agreement");
(iii) the concurrent consummation of the sale and
purchase of shares of Common Stock pursuant to the Share
Purchase Agreement substantially in the form attached hereto
as Exhibit E (the "Share Purchase Agreement"); and
(iv) the issuance of the TIDES Equity shall have been
approved by the requisite vote of the Company's stockholders
entitled to vote thereon.
(d) The Company's and the Trust's obligation to complete the
Exchange and to execute the Amendments at the Closing shall be subject
to the satisfaction of the following conditions, any one or more of
which may be waived in writing by the Company and the Trust:
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(i) receipt by the Trust of the certificate(s)
representing the Exchanged Preferred and evidence of the DTC
Reduction and the receipt by the Company of the Exchanged
Debentures;
(ii) receipt by the Trust of any instrument of
assignment that may be necessary to assign and transfer the
PIK Distribution to the Trust and the PIK Interest to the
Company;
(iii) the accuracy in all material respects of the
representations and warranties made by the Investors herein as
of the date of this Agreement and as of the Closing Date as
though made on and as of such date (except for representations
and warranties that speak as of a specific date) and the
fulfillment in all material respects of those undertakings of
the Investors herein to be fulfilled on or before the Closing;
(iv) As contemplated by Section 5(b), the Investors
shall have delivered to the Property Trustee the letter or
other written instrument instructing DTC to take the requisite
actions to effect the transactions contemplated hereby,
substantially in the form attached hereto as Exhibit F;
(v) the Investors shall have taken all actions
reasonably necessary to effect the execution of the
Amendments; and
(vi) Completion and delivery by the Investors to the
Company of the questionnaires referred to in Section 7(e)
below.
(e) The Investors' obligations to complete the Exchange and to
direct the Trustees to execute the Amendments shall be subject to the
satisfaction of the following conditions, any one or more of which may
be waived in writing by an Investor with respect to such Investor's
obligation:
(i) the representations and warranties made by the
Company and the Trust in this Agreement shall be accurate in
all material respects as of the date of this Agreement and as
of the Closing Date as though made on and as of such date
(except for representations and warranties that speak as of a
specific date) and the undertakings of the Company and the
Trustees hereby shall have been fulfilled in all material
respects on or before the Closing;
(ii) the Company shall have delivered to the
Investors a certificate executed by the President and the
Chief Financial or Accounting Officer of the Company, dated
the Closing Date, in form and substance reasonably
satisfactory to the Investors, to the effect that the
representations and warranties of the Company and the Trust
set forth in Section 6 hereof are true and correct in all
material respects as of the date of this Agreement and as of
the Closing Date as though made on and as of such date (except
for representations and warranties that speak as of a specific
date) and that the Company and the Trust have each complied in
all material respects with all the agreements and satisfied
all the
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conditions in this Agreement on its part to be performed or
satisfied on or before the Closing Date;
(iii) the Debenture Trustee shall have obtained an
opinion of tax counsel to the effect that for United States
federal income tax purposes the Trust will not be classified
as other than a grantor trust on account of the execution of
the First Supplemental Indenture to the Indenture in
substantially the form attached hereto as Exhibit G;
(iv) the Company shall have delivered to the
Investors (A) a legal opinion of its General Counsel in
substantially the form attached hereto as Exhibit H; (B) a
legal opinion of Xxxxxx Xxxxxx Xxxxx Xxxxxxxx in substantially
the form attached hereto as Exhibit I; and (C) a legal opinion
of Morris, Nichols, Arsht and Xxxxxxx, as special Delaware
counsel to the Trust, in substantially the form attached
hereto as Exhibit J;
(v) the Company shall have, prior to the Closing,
filed with the Nasdaq National Market a Nasdaq Notification
for the Listing of Additional Shares covering the shares of
TIDES Equity;
(vi) the Company shall have tendered delivery of the
shares of TIDES Equity being issued to the Investors pursuant
to this Agreement, including without limitation, by having
delivered an irrevocable letter (in form and substance
satisfactory to the Investors and their counsel) to its
transfer agent directing the transfer agent to deliver such
shares of TIDES Equity to the Investors at Closing; and
(vii) the Company shall have paid the reasonable fees
and disbursements of special counsel for the Investors
referred to in Section 8(f) to the extent reflected in a
statement of such counsel rendered to the Company at the
Closing, a good faith estimate of which statement shall be
rendered to the Company at least two business days before the
Closing Date.
6. REPRESENTATIONS AND WARRANTIES OF THE TRUST AND THE COMPANY. Except
as set forth on the Schedule of Exceptions attached hereto as Exhibit K, each of
the Trust and the Company jointly and severally represents and warrants to, and
agrees with, the Investors that as of the date hereof and as of Closing:
(a) 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 with the power and authority to own
property and conduct its business as described in the Amended and
Restated Declaration of Trust and has conducted and will conduct no
business other than the transactions contemplated by the Original
Preferred Securities Purchase Agreement, the Common Securities Purchase
Agreement, the Debenture Purchase Agreement, dated June 12, 1997,
between the Company and the Trust (the "Debenture Purchase Agreement"),
the Registration Rights Agreement, dated June 12, 1997, among the
Company, the Trust and the several purchasers named therein (the
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"Registration Rights Agreement"), the Placement Agreement, dated June
12, 1997, among the Trust, the Company and Credit Suisse First Boston
(the "Placement Agreement"), this Agreement and the Amended and
Restated Declaration of Trust; the Trust is not a party to or bound by
any agreement or instrument other than the Original Preferred
Securities Purchase Agreement, the Common Securities Purchase
Agreement, the Debenture Purchase Agreement, the Registration Rights
Agreement, the Placement Agreement, this Agreement and the agreements
and instruments contemplated by the Amended and Restated Declaration of
Trust; the Trust has no liabilities or obligations other than those
arising out of the transactions contemplated by the Original Preferred
Securities Purchase Agreement, the Common Securities Purchase
Agreement, the Debenture Purchase Agreement, the Registration Rights
Agreement, the Placement Agreement, this Agreement and the Amended and
Restated Declaration of Trust; and the Trust is not a party to or
subject to any action, suit or proceeding of any nature.
(b) Each of the Company and its Subsidiaries (as hereinafter
defined) (i) has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of the
jurisdiction of its incorporation; (ii) has the corporate power and
authority to own, lease and operate its properties and to conduct its
business as currently conducted and, with respect to the Company, to
enter into and perform its obligations under this Agreement and each of
the other Transaction Documents (the term "Transaction Documents" shall
mean this Agreement, the Amendments, the Amended Loan Agreement, the
Share Purchase Agreement and any other agreement, document, certificate
or filing delivered or executed in connection with any of the
aforementioned agreements or the transactions contemplated hereby or
thereby); and (iii) is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not, singly or in the aggregate, have a
material adverse effect on the financial condition, business or results
of operations of the Company and its Subsidiaries, taken as a whole.
For purposes of this Agreement, "Subsidiaries" shall mean the
controlled subsidiaries of the Company, excluding the Trust.
(c) The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock and 1,500,000 shares of preferred
stock, par value $0.01 per share. As of the date of this Agreement, the
issued and outstanding capital stock of the Company consists of
10,387,274 shares of Common Stock, each of which includes the right to
purchase Series A Preferred Stock, par value $0.01 per share, of the
Company (the "Series A Preferred") upon the terms and conditions set
forth in the Rights Agreement, dated as of August 18, 1997, by and
between the Company and ChaseMellon Shareholder Services, L.L.C., as
amended (the "Rights Agreement"). The shares of issued and outstanding
capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable and have not been issued in
violation of, or are not otherwise subject to, any preemptive or other
similar rights. The Company has reserved an aggregate of 1,600,000
shares of Common Stock for issuance upon the exercise of stock options
granted or available for future grant, and for the issuance of
restricted shares and performance stock awards, under the Company's
1994 Employee Stock Option Plan, as amended, 1994 Directors
Non-Qualified Stock Option Plan and
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1996 Long Term Incentive Plan, as amended. The Company has reserved
350,000 shares of Series A Preferred for issuance upon exercise of the
preferred stock purchase rights pursuant to the Rights Agreement. The
Company has reserved 2,500,000 shares of Common Stock for issuance upon
conversion of the Remaining Preferred Securities (and the related
$35,000,000 in aggregate principal amount of Convertible Debentures
that will remain outstanding and held by the Property Trustee) after
the consummation of the Exchange. Immediately after the consummation of
the transactions contemplated by the Transaction Documents, (i) the
issued and outstanding capital stock of the Company will consist of
23,647,932 shares of Common Stock, and (ii) other than as contemplated
by clause (i) of this sentence, all of the other representations set
forth in this Section 6(c) will remain true, complete and not
materially misleading in any respect. Except for the adjustments made
to the Preferred Securities and the Convertible Debentures pursuant to
this Agreement, no adjustment has previously been made (or should have
been made) nor will any adjustment be required to be made as a result
of the Company's issuance of the shares of TIDES Equity pursuant to the
terms of this Agreement or the issuance of any other equity securities
of the Company being issued pursuant to or in connection with the
consummation of the transactions contemplated by the Transaction
Documents to the rate of conversion or exchange of any Derivative
Securities of the Company (by reason of any "anti-dilution" provisions
or agreements or otherwise). For purposes of this Agreement,
"Derivative Securities" means (i) all shares of stock and other
securities that are convertible into or exchange for shares of Common
Stock, and (ii) all options, warrants, and other rights to acquire
shares of Common Stock or any class of stock or other security or
securities convertible into or exchangeable for shares of Common Stock
or any class of stock or other security. As of the date of this
Agreement, the issued and outstanding capital stock of the Trust
consists of 1,400,000 Preferred Securities and 43,300 Common
Securities. The Investors, collectively, own all of the issued and
outstanding Preferred Securities of the Trust and the Company owns all
of the issued and outstanding Common Securities of the Trust. Other
than for the Preferred Securities held by the Investors and the Common
Securities held by the Company, the Trust has not issued, nor are there
outstanding, nor is the Trust obligated to grant, enter into or issue,
any (i) Preferred Securities or Common Securities, (ii) subscriptions,
options, warrants, calls commitments, or agreements of any character
calling for it to issue, deliver or sell, or cause to be issued,
delivered or sold, any Preferred Securities, Common Securities or any
other equity securities or interests, or (iii) other securities
convertible into, exchangeable for, or representing the right to
subscribe for, purchase or otherwise acquire any Preferred Securities,
Common Securities or any of its other equity securities or interests.
(d) Other than as set forth in Section 6(c), there are no, nor
upon consummation of the transactions contemplated by the Transaction
Documents, will there be, nor is or will the Company be bound by, nor
is or will the Company be obligated to grant or enter into, any
outstanding subscriptions, options, warrants, calls, commitments, or
agreements of any character calling for it to issue, deliver or sell,
or cause to be issued, delivered or sold, any shares of Common Stock,
Derivative Securities or other shares of its capital stock or any other
equity security.
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(e) The shares of TIDES Equity have been duly authorized for
issuance to the Investors pursuant to this Agreement and, when issued
and delivered by the Company pursuant to this Agreement against the
surrender to the Trust of the Exchanged Preferred and the PIK
Distributions and the corresponding DTC Reduction, and the surrender to
the Company of the Exchanged Debentures and the PIK Interest, will be
validly issued, fully paid and nonassessable and free and clear of all
preemptive and other purchase rights, pledges, liens and encumbrances,
other than any that have been granted by an Investor. The Stock
Certificates evidencing the shares of Common Stock are in due and
proper form under Delaware law. The issuance of the shares of Common
Stock is not subject to preemptive or other similar rights.
(f) Each of the Transaction Documents has been duly authorized
by all necessary corporate action on the part of the Company, subject
to the approval by the stockholders of the Company (which approval will
in any event have been obtained prior to the Closing) of the issuance
and sale of shares of Common Stock by the Company pursuant to the Share
Purchase Agreement and the issuance of shares of TIDES Equity by the
Company pursuant to this Agreement; and, assuming proper authorization
by the Investors and the other signatories to each of the Transaction
Documents, each of the Transaction Documents is validly executed and
delivered by the Company and/or the Trustees party thereto, and
constitute valid and legally binding obligations of the Company and the
respective Trustee party thereto, 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 Debentures are entitled to the
benefits of the Indenture and upon execution of the First Supplemental
Indenture to the Indenture will be entitled to the benefits of such
First Supplemental Indenture; and the Amendments will conform in all
material respects to the form of each such document attached hereto as
an exhibit.
(g) The Remaining Preferred Securities will be exchangeable
for Convertible Debentures in accordance with the Amended and Restated
Declaration of Trust, which Convertible Debentures will be convertible
into the shares of Common Stock; when issued upon such conversion, such
shares of Common Stock will be validly issued, fully paid and
nonassessable and no other class of Common Stock will be outstanding or
authorized as of such date; and the stockholders of the Company have no
preemptive rights with respect to the Remaining Preferred Securities,
the Convertible Debentures or the shares of Common Stock issuable upon
such conversion.
(h) Assuming the accuracy of the representations and
warranties of the Investors set forth in Section 6 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 and the
shares of TIDES Equity will have been issued in compliance with all
applicable provisions of the Securities Act of 1933, as amended (the
"Securities Act"), and any applicable state securities laws, and the
rules and regulations under any thereof.
11
(i) The consummation of the transactions contemplated hereby
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 (including,
without limitation, after giving effect to the amendments, waivers and
consents provided in Section 4 hereof, the Amended and Restated
Declaration of Trust, the Indenture, the Convertible Debentures, the
Guarantee Agreements, and all other agreements and obligations of the
Company filed, referenced as having been filed, or required to be filed
with the Commission in and/or as an exhibit to any of the Company
Documents) or instrument to which the Trust and/or the Property Trustee
is a party or by which the Trust and/or the Property Trustee is bound
or to which any of the property or assets of the Trust and/or the
Property Trustee is subject, nor will such action result in any
violation of the provisions of, after giving effect to the amendments,
waivers and consents provided in Section 4 hereof, the Amended and
Restated Declaration of Trust or any statute or any material order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Trust and/or the Property Trustee or any of their
respective properties, except for such conflicts, breaches, defaults or
violations that would not have a material adverse effect on the
business, financial conditions or results of operations of the Trust
taken as a whole (a "Trust Material Adverse Effect").
(j) The compliance by the Company, the Trust and the Trustees
as may be parties thereto with all of the provisions of this Agreement
and the other Transaction Documents to which any of them is a party,
the issuance of the shares of TIDES Equity pursuant to the terms hereof
and of shares of Common Stock upon conversion of the Convertible
Debentures pursuant to the terms of the Indenture, the execution,
delivery and performance by the Company, the Trust and the Trustees as
may be parties thereto of the Amendments and the other Transaction
Documents to which any of them is a party and the consummation of the
transactions contemplated hereby and thereby will not (i) conflict
with, result in the creation or imposition of any lien, charge or
encumbrance upon any assets of the Company, the Trust or any of the
Company's Subsidiaries or any Trustees as may be parties thereto
pursuant to the terms of, or constitute a default under, any material
agreement (including, without limitation, after giving effect to the
amendments, waivers and consents provided in Section 4 hereof, the
Amended and Restated Declaration of Trust, the Indenture, the
Convertible Debentures, the Guarantee Agreements, and all other
agreements and obligations of the Company filed, referenced as having
been filed, or required to be filed with the Commission in and/or as an
exhibit to any of the Company Documents), indenture or instrument, or
(ii) result in a violation of the organizational documents of the
Company, the Trust or any of the Company's Subsidiaries or any Trustees
as may be parties thereto or any material order, rule or regulation of
any court or governmental agency having jurisdiction over the Company,
any of the Trustees as may be parties thereto, 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 on the business, financial conditions or
results of operations of the Company and its Subsidiaries taken as a
whole (a "Company Material Adverse Effect"), or (iii) in and of itself,
cause an Investor to become an Acquiring Person as such term is defined
in the Rights Agreement.
12
(k) Neither the Trust, the Company nor any of the Company'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 Company Material
Adverse Effect or a Trust Material Adverse Effect.
(l) The Trust and each of the Trustees a party thereto has
full power and authority to execute, deliver and perform this Agreement
and the Amendments to which it is a party.
(m) The Property Trustee has good and valid title to all the
Convertible Debentures and the PIK Interest for the benefit of the
holders of the Preferred Securities and Common Securities, 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.
(n) There is no material litigation or governmental proceeding
pending or, to the knowledge of the Company, threatened against the
Trust, the Trustees (solely in their capacity as trustee of the Trust),
the Company or any of the Company's Subsidiaries which may reasonably
be expected to result in any Company Material Adverse Effect.
(o) The consolidated financial statements included (as
exhibits or otherwise) in the Company Documents (as defined below)
present fairly the consolidated financial position of the Company and
its Subsidiaries as of the dates indicated and the results of their
operations for the periods specified, subject, in the case of unaudited
interim financial statements, to normal year-end adjustments. Except as
otherwise stated in such Company Documents, such consolidated financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, and any supporting
schedules included with the consolidated financial statements present
fairly the information stated in the financial statements. Except as
otherwise indicated in such Company Documents, the financial data
regarding the Company and its Subsidiaries set forth in the Company
Documents were prepared on an accounting basis consistent with such
consolidated financial statements.
(p) Since June 24, 2001, except as described in the Company
Documents, no Company Material Adverse Effect has occurred.
(q) Both the Trust and the Company at all times have
consistently treated the holders of Preferred Securities as the owners
of the Convertible Debentures and the PIK Interest for federal income
tax purposes pursuant to Sections 671 through 679 of the Internal
Revenue Code of 1986, as amended (the "Code"), and to the best of the
knowledge of each of the Trust and the Company, such treatment is
correct.
(r) The Company, the Trust and the Company's Subsidiaries have
filed all tax returns required to be filed, which returns are true and
correct in all material respects, and neither the Company, the Trust
nor any of the Company's Subsidiaries is in default in the payment of
any taxes, including penalties and interest, assessments, fees and
other charges, shown thereon due or otherwise assessed, other than
those being contested in
13
good faith and for which adequate reserves have been provided or those
currently payable without interest which were payable pursuant to said
returns or any assessments with respect thereto. Neither the Company
nor any of its Subsidiaries has waived any statute of limitations in
respect of taxes or agreed to any extension of time with respect to a
tax assessment or deficiency. Neither the Company nor any of its
Subsidiaries has any liability for taxes of any individual or entity
(other than the Company or a Subsidiary) under Treasury Regulations
Section 1.1502-6 or any similar provision of law, as a transferee or
successor, by contract, or otherwise. Neither the Company nor any
Subsidiary has been a United States real property holding corporation
within the meaning of Section 897 of the Code at any time during the
past five years.
(s) Neither the Trust nor the Company 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, as amended from time to time, or any
successor legislation (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 Company is not
and, after giving effect to the transactions contemplated hereby, will
not be an "investment company" as defined in the Investment Company
Act.
(t) Assuming the accuracy of Investors' representations and
warranties in Section 6, the exchange and issuance of TIDES Equity in
the manner contemplated by this Agreement will be exempt from the
registration requirements of the Securities Act.
(u) All offers and sales of capital stock of the Company and
the Trust during the past five years were at all relevant times
registered under, or exempt from the registration requirements of, the
Securities Act and were registered under, or subject to an available
exemption from the registration requirements of, the applicable state
securities or Blue Sky laws.
(v) The Company is subject to Section 13 or 15 (d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(w) The Company 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 Company 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 Company or any
of its Subsidiaries, would individually or in the aggregate have a
Company Material Adverse Effect.
(x) Except as disclosed in the Company Documents and except
for statutory liens for sums not yet due or which are being contested
in good faith in appropriate proceedings, the Company and its
Subsidiaries have good and valid title to all properties owned by them,
which are material in the business of the Company, in each case free
from liens, encumbrances and defects that would, individually or in the
aggregate, have a
14
Company Material Adverse Effect; and except as disclosed in the Company
Documents or as will not have a Company Material Adverse Effect, the
Company and its Subsidiaries hold any leased real or personal property
under valid and, to the best of the Company's knowledge, enforceable
leases with no exceptions that would materially interfere with the use
made or to be made thereof by them.
(y) The Company or its Subsidiaries, to the best of the
Company's knowledge, owns or is licensed to use all patents, patent
applications, inventions, trademarks, trade names, applications for
registration of trademarks, service marks, service xxxx applications,
copyrights, know-how, manufacturing processes, formulae, trade secrets,
licenses and rights in any thereof and any other intangible property
that are material to the business of the Company as now conducted and
as proposed to be conducted (referred to herein as the "Proprietary
Rights"), or is seeking, or will seek, to obtain rights to use such
Proprietary Rights that are material to the business of the Company as
proposed to be conducted. The Company does not have any knowledge of,
and neither the Company nor any of its Subsidiaries has given or
received any notice of, any pending conflicts with or infringement of
the rights of others with respect to any Proprietary Rights, or with
respect to any license of Proprietary Rights, which are material to the
business of the Company.
(z) No union labor dispute with the employees of the Company
or any of its Subsidiaries exists or, to the knowledge of the Company,
is imminent that may be reasonably expected to have a Company Material
Adverse Effect.
(aa) Except as would not have a Company Material Adverse
Effect: (i) each of the Company and its Subsidiaries is in compliance
with all applicable Environmental Laws (as defined below); (ii) each of
the Company and its Subsidiaries has all permits, authorizations and
approvals required under any applicable Environmental Laws and is in
compliance with the requirements of such permits authorizations and
approvals; (iii) there are no pending or, to the best of the Company's
knowledge, threatened Environmental Claims (as defined below) against
the Company or any of its Subsidiaries; and (iv) under applicable law,
there are no circumstances with respect to any property or operations
of the Company or any of its Subsidiaries that are reasonably likely to
form the basis of an Environmental Claim against the Company or any of
its Subsidiaries. For purposes of this Agreement, the following terms
shall have the following meanings: "Environmental Law" means any United
States (or other applicable jurisdiction's) federal, state, local or
municipal statute, law, rule, regulation, ordinance, code, policy or
rule of common law and any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent decree
or judgment, relating to the environment, health, safety or any
chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority. "Environmental
Claims" means any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law.
15
(bb) The Company represents and warrants that the information
contained in the following documents (the "Company Documents") is or
will be true and correct in all material respects as of their
respective dates:
(i) the Company's Annual Report on Form 10-K for the
fiscal year ended June 24, 2001;
(ii) the Company's Quarterly Reports on Form 10-Q for
the fiscal quarters ended September 23, 2001 and December 24,
2001;
(iii) the Company's Proxy Statement for its 2001
Annual Meeting of Stockholders; and
(iv) all other documents, if any, filed by the
Company with the Securities and Exchange Commission (the
"Commission") since June 24, 2001 pursuant to Section 13, 14
or 15 of the Exchange Act.
(cc) As of their respective filing dates, the Company
Documents (i) complied or will comply, as the case may be, in all
material respects with the requirements of the Exchange Act, and (ii)
did not or will not, as the case may be, contain any untrue statement
of material fact or omit a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. In addition,
as of its filing date, the definitive proxy statement that the Company
will prepare and file with the Commission and distribute to its
stockholders in connection with obtaining a stockholder approval of the
issuance and sale of shares of Common Stock pursuant to the Share
Purchase Agreement and this Agreement at the Special Meeting (as
hereinafter defined) (y) will comply in all material respects with the
requirements of the Exchange Act and (z) will not contain any untrue
statement of material fact or omit a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(dd) Since November 1, 2000, the Company has timely filed with
the Commission all documents required to be filed by the Company under
the Exchange Act. As of the date hereof, the Company is eligible to use
Form S-3 to register the resale of the Registered Shares (as
hereinafter defined) under the Securities Act in accordance with
Section 10 below.
(ee) Except as set forth in the Company Documents, none of the
officers or directors of the Company or any of its Subsidiaries, or, to
the best of the Company's knowledge, any entity in which any such
officer or director has a substantial economic interest or is an
officer, director, trustee or partner, is party to a transaction with
the Company or any of its Subsidiaries (other than for services as an
officer and/or director of the Company or one of its Subsidiaries),
including any contract, agreement or other arrangement providing for
the furnishing of goods, property or services to or by, or otherwise
requiring payments to or from, any such officer, director or entity.
16
7. REPRESENTATIONS AND COVENANTS BY INVESTORS; RESALE BY INVESTORS.
Each of the Investors hereby severally (and not jointly and severally)
acknowledges, represents, warrants to and agrees with the Trust, and the Company
as follows:
(a) This Agreement has been duly authorized, executed and
delivered by each of the Investors and is enforceable against each of
them in accordance with its terms.
(b) Each Investor understands that no United States federal or
state agency or any other government or governmental agency has passed
on or made any recommendation or endorsement of the shares of Common
Stock or the Amendments or the fairness or suitability of the
investment in the shares of Common Stock or the Amendments nor have
such authorities passed upon or endorsed the merits of the offering of
the shares of Common Stock or the Amendments.
(c) Each Investor is an "accredited investor" (as defined in
Rule 501 under the Securities Act).
(d) Each of the Investors acknowledges that all documents,
records and books pertaining to the investment in the shares of Common
Stock and the Amendments (including, without limitation, the Company
Documents) which it has requested have been made available for
inspection by it, its attorneys, accountants, purchaser representatives
or tax advisors (collectively, the "Advisors").
(e) Each of the Investors will have, or has, at or prior to
the occurrence of Closing, completed or caused to be completed and
delivered to the Company the Stock Certificate Questionnaire and the
Registration Statement Questionnaire, attached to this Agreement as
Appendices I and II, for use by the Company in preparation of the Stock
Certificates, any necessary filings required by applicable state
securities laws and the Registration Statement (as defined in Section
10(a) hereof), and the answers to the Questionnaires are true and
correct in all material respects as of the date of this Agreement and
will be true and correct in all material respects as of the effective
date of the Registration Statement; provided that each Investor shall
be entitled to, and be given reasonable prior written notice of and
opportunity to, update such information by providing notice thereof to
the Company before the effective date of such Registration Statement.
(f) The Company shall notify the Investors if it determines,
in good faith following consultation with its Board or a committee
thereof, that an event has happened as a result of which the
Registration Statement or the Prospectus (as defined in Section 10(a)
hereof) includes an untrue statement of material fact or omits to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing. Upon receipt of such notice, the Investors will suspend their
use of the Prospectus until such time as an amendment or supplement to
the Registration Statement or the Prospectus has been filed by the
Company and any such amendment to the Registration Statement is
declared effective by the Commission, or until such time as the Company
has filed an appropriate report with the Commission pursuant to the
Exchange Act, in each case to correct such misstatement or omission.
17
The Company shall use its best efforts to prepare and file with the
Commission any such amendment, supplement or report, as the case may
be, as soon as practicable after delivering such notice to the
Investors.
(g) In addition to the foregoing provisions of this Section 7,
the Company may, upon written notice to the Investors, suspend the use
of the Prospectus for up to forty-five (45) days in any 365-day period
(less the number of days in such 365-day period that the Investors must
suspend their use of the Prospectus pursuant to Section 7(f) hereof),
based on the reasonable determination of the Company's Board or a
committee thereof that there is a significant business purpose for such
determination, such as pending corporate developments, public filings
with the Commission or similar events. Notwithstanding anything else to
the contrary in Section 7(f) hereof, the Company shall in no event be
required to disclose the business purpose for which it has suspended
the use of the Prospectus pursuant to this Section 7(g) if the Company
determines in its good faith judgment that the business purpose should
remain confidential.
(h) The Company shall notify each of the Investors (i) of any
request by the Commission for an amendment or any supplement to such
Registration Statement or any related Prospectus, or any other
information request by any other governmental agency directly relating
to the offering of the shares of Common Stock issued or issuable
pursuant to this Agreement, and (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of such Registration
Statement or of any order preventing or suspending the use of any
related Prospectus or the initiation or threat of any proceeding for
that purpose.
(i) Each of the Investors further covenants to notify the
Company promptly of the sale of any of its shares of Common Stock
issued pursuant to this Agreement or issuable upon the conversion of
the Remaining Preferred Securities.
(j) Each of the Investors 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 Company
concerning the Amendments and the shares of TIDES Equity issued to each
Investor and all such questions have been answered to the full
satisfaction of each of the Investors and their Advisors.
(k) In evaluating the suitability of the Amendments and its
investment in the shares of TIDES Equity, each of the Investors has not
relied upon any representation or other information (oral or written)
other than as stated in the Company Documents or as contained in
documents or answers to questions so furnished to each of the Investors
or its Advisors by the Trust or the Company.
(l) Each of the Investors has such knowledge and experience in
financial, tax, and business matters so as to enable it to evaluate the
merits and risks of an investment in the shares of TIDES Equity issued
to such Investor and the execution of the Amendments and to make an
informed investment decision with respect thereto.
18
(m) Each of the Investors is not relying on the Trust or the
Company respecting the tax considerations of an investment in the
shares of TIDES Equity issued to such Investor and the execution of the
Amendments, and each of the Investors has relied on the advice of, or
has consulted with, only its own Advisors regarding any such tax
considerations.
(n) Each of the Investors is acquiring the shares of TIDES
Equity issued to such Investor solely for its own account for
investment and not with a view to resale or distribution other than as
contemplated by this Agreement (including, without limitation, Section
9 hereof) and provided that each Investor shall have control over
disposition of its assets to the fullest extent required by applicable
law.
(o) Each of the Investors is the lawful beneficial owner of
the Exchanged Preferred and the entitlement to the PIK Distribution
being transferred by such Investor to the Property Trustee hereunder
and upon delivery of such Exchanged Preferred and such amount of the
PIK Distribution as provided herein, such Investor will convey to the
Property Trustee good and marketable title to such Exchanged Preferred
and its rights, title and interest in and to its pro-rata share of the
PIK Distribution, free and clear of all liens, pledges, encumbrances,
security interests, claims and equities of every kind. Each Investor,
for itself and not for the others, agrees to indemnify the Property
Trustee with respect to any losses, damages or claims arising out of
any breach or inaccuracy of the representations and warranty of such
Investor in this Section 7(n).
(p) Each of the Investors will be required to bear the
economic risk of the investment in the shares of TIDES Equity issued to
such Investor until such shares are registered under the Securities Act
in accordance with the terms hereof and in any event for 180 days
pursuant to the lock-up period in Section 9 hereof, and legends shall
be placed on the shares of Common Stock to the effect that they have
not been registered under the Securities Act or applicable state
securities laws in substantially the following form (and a
stop-transfer order may be placed against transfer of such Stock
Certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED, ASSIGNED OR
OTHERWISE DISPOSED OF (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS
OR (B) AN OPINION OF COUNSEL INCLUDING, WITHOUT LIMITATION,
IN-HOUSE COUNSEL, IN A GENERALLY ACCEPTED FORM, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE
STATE SECURITIES LAWS OR (II) UNLESS DONE SO PURSUANT TO, AND
IN COMPLIANCE WITH, RULE 144 UNDER SAID ACT.
19
Each Investor also understands that pursuant to the Rights
Agreement the Stock Certificates and any stock certificates
representing shares of common stock issued upon conversion of the
Remaining Preferred Securities shall also contain a legend in
substantially the following form:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF
TO CERTAIN RIGHTS AS SET FORTH IN THE RIGHTS AGREEMENT BETWEEN
DT INDUSTRIES, INC. (THE "COMPANY") AND XXXXX XXXXXX
SHAREHOLDER SERVICES, L.L.C. (THE "RIGHTS AGENT") DATED AS OF
AUGUST 18, 1997 (AS AMENDED FROM TIME TO TIME, THE "RIGHTS
AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN
BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
OFFICE OF THE RIGHTS AGENT. UNDER CERTAIN CIRCUMSTANCES, AS
SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE
EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE
EVIDENCED BY THIS CERTIFICATE. THE COMPANY WILL MAIL TO THE
HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT, AS
IN EFFECT ON THE DATE OF MAILING, WITHOUT CHARGE PROMPTLY
AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN
CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED
TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING
PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD
BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER,
MAY BECOME NULL AND VOID.
(q) Each of the Investors: (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 shares of TIDES Equity, 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; and (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, xxxx, partnership, trust, estate,
corporation, or other entity for whom the Investor is executing
20
this Agreement, and such individual, xxxx, partnership, trust, estate,
corporation, or other entity has full right and power to perform
pursuant to this Agreement and make an investment in the Company, and
that this Agreement constitutes a legal, valid and binding obligation
of such entity.
(r) Each of the Investors acknowledges that the Company
intends to pay to Xxxxxxx Xxxxx & Company LLC, the Company's financial
advisor, a fee in respect of the transactions contemplated by this
Agreement. Each of the Investors hereby represents that, on the basis
of any actions and agreements by it, there are no other brokers or
finders entitled to compensation in connection with the transactions
contemplated by this Agreement.
8. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with the
Investors that:
(a) Upon the Closing, the Investors shall receive the right to
appoint one representative for all of the Investors to observe the
activities of the Board; such right shall expire upon the exchange and
conversion of all of the Remaining Preferred Securities into shares of
Common Stock.
(b) As promptly as practicable after the execution of this
Agreement, and in any event not more than ten (10) days following the
execution of this Agreement by all parties hereto, the Company shall
prepare, and file with the Commission, a preliminary proxy statement
with respect to obtaining stockholder approval of the issuance and sale
of shares of Common Stock pursuant to the Share Purchase Agreement and
the issuance of shares of TIDES Equity pursuant to this Agreement.
(c) Promptly after the date hereof, the Company shall take
such action as is necessary to convene a meeting of its stockholders
(the "Special Meeting"), which Special Meeting shall be held as
promptly as practicable for the purpose of voting on the issuance and
sale of the shares of Common Stock pursuant to the Share Purchase
Agreement and the issuance of shares of TIDES Equity pursuant to this
Agreement.
(d) At any time when the Company is not subject to Section 13
or 15(d) of the Exchange Act, the Company will promptly furnish or
cause to be furnished to the Investors, a reasonable number of copies
of the information required to be delivered to holders and prospective
purchasers of shares of Common Stock pursuant to Rule 144 under the
Securities Act (or any successor provision thereto) in order to permit
compliance with Rule 144 in connection with resales by the Investors of
the shares of Common Stock.
(e) The Company represents and warrants that, on the basis of
any actions and agreements by it, there are no brokers or finders
entitled to compensation in connection with the transactions
contemplated by this Agreement other than Xxxxxxx Xxxxx & Company LLC.
The Company shall indemnify and hold harmless the Investors from and
against all fees, commissions or other payments owing by the Company to
21
Xxxxxxx Xxxxx & Company LLC or any other person or firm acting on
behalf of the Company or the Trust hereunder.
(f) The Company will pay all expenses incidental to the
performance of its obligations under this Agreement and the Amendments,
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 shares of Common Stock and the preparation of
this Agreement and the Amendments, and any other document relating to
the Exchange; (iii) the reasonable fees and disbursements, up to but
not to exceed $100,000, of Xxxxxxx Xxxx LLP, which is acting as special
counsel for the Investors in connection with the transactions
contemplated by this Agreement; and (vi) the registration of the
Registered Shares pursuant to the Registration Statement, the
procedures in Section 10(a)(i)-(vii) hereof and the listing of the
Registered Shares on the Nasdaq National Market, but excluding fees and
expenses of counsel for the Investors in excess of the $100,000 fee
limitation described in clause (iii) above and any commissions or other
amounts payable to brokers and any transfer taxes relating to
Registered Shares sold by the Investors.
(g) The Company is not obligated to issue any shares of Common
Stock or any Derivative Securities pursuant to or in connection with
which the price payable for any such shares of Common Stock (including,
without limitation, on conversion or exercise of any such Derivative
Securities) is or is to be, in whole or in part, based on or derived
from or by reference to any future trading price or other measure of
value of such shares of Common Stock. The Company shall, within thirty
(30) days after the Closing Date, adopt an amendment to the Company's
Bylaws to provide (i) that, unless approved by a majority vote of the
shares of Common Stock of the Company issued and outstanding, the
Company shall not sell or issue any security of the Company convertible
into, or exercisable or exchangeable for, shares of Common Stock
("Common Stock Equivalent"), having a conversion, exercise or exchange
price per share ("Equivalent Price") which is subject to downward
adjustment based on the market price of the Common Stock at the time of
conversion, exercise or exchange of such security into Common Stock
(except for appropriate adjustments made to give effect to any stock
splits or stock dividends), and (ii) that such amendment to its Bylaws
may not be further amended or repealed without an affirmative vote of
the holders of a majority of the shares of Common Stock present and
entitled to vote at a duly convened meeting of stockholders.
9. INVESTORS AGREEMENT TO LOCK-UP PERIOD. Each Investor agrees that it
will not offer, sell, contract to sell, distribute, pledge, encumber, or
otherwise dispose of or transfer any shares of Common Stock held of record or
beneficially owned by such Investor, or agree to do any of the foregoing, or
enter into a transaction which would have the same effect, or publicly disclose
the intention to make any such offer, sale, pledge or disposal, on or prior to
the date one hundred and eighty (180) days following the Closing Date. In
furtherance of the foregoing, the Company and its transfer agent and registrar
are hereby authorized to decline to make any transfer of such shares of Common
Stock if such transfer would constitute a violation or breach of this Agreement.
Notwithstanding the foregoing, each Investor will retain all benefits of
22
ownership of the shares of Common Stock held of record or beneficially owned,
including rights to vote such shares of Common Stock and rights to receive
dividends, if any, thereon.
10. REGISTRATION RIGHTS.
(a) The Company shall:
(i) as soon as practicable after the Closing Date,
but in no event later than the 120th day following the Closing
Date, prepare and file with the Commission a Registration
Statement on Form S-3 (or, if the Company is ineligible to use
Form S-3, then on such other form as is available for such
registration) registering under the Securities Act the sale of
the shares of TIDES Equity and the shares of Common Stock
issuable to the Investors upon conversion of the Remaining
Preferred Securities (the "Registered Shares") from time to
time on the Nasdaq National Market (or the facilities of any
national securities exchange on which the Common Stock is then
traded) or in privately negotiated transactions (the
"Registration Statement").
(ii) use its reasonable best efforts to cause the
Commission to declare the Registration Statement effective on
or before 180 days after the Closing Date;
(iii) notify Investors promptly upon the Registration
Statement, and any post-effective amendment thereto, being
declared effective by the Commission;
(iv) prepare and file with the Commission such
amendments and supplements to the Registration Statement and
the Prospectus (as defined in Section 11 below) and take such
other action, if any, as may be necessary to keep the
Registration Statement effective until the earlier of (A) the
date on which the Registered Shares may be resold by the
Investors without registration and without regard to any
volume limitations by reason of Rule 144(k) under the
Securities Act or any other rule of similar effect or (B) all
of the Registered Shares have been sold pursuant to the
Registration Statement or Rule 144 under the Securities Act or
any other rule of similar effect;
(v) promptly furnish to the Investors with respect to
the Registered Shares such reasonable number of copies of the
Prospectus, including any supplements to or amendments of the
Prospectus, in order to facilitate the public sale or other
disposition of all or any of the Registered Shares by the
Investors;
(vi) as long as the Company is subject to the
Exchange Act, file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the Exchange
Act within the time periods required by the Exchange Act and
the rules and regulations promulgated thereunder; and
(vii) file documents required of the Company for
customary Blue Sky clearance in all states requiring Blue Sky
clearance; provided, however, that the Company shall not be
required to qualify to do business or consent to service of
23
process in any jurisdiction in which it is not now so
qualified or has not so consented.
(b) Each Investor agrees that it will (i) not effect any
disposition of the Registered Shares or its right to purchase the
Registered Shares that would constitute a sale within the meaning of
the Securities Act, except as contemplated by the Registration
Statement referred to in Section 10(a) or as otherwise permitted by
law, (ii) comply with the requirement of delivering a current
prospectus in connection with any such sale, and (iii) promptly notify
the Company of any changes in the information set forth in the
Registration Statement regarding the Investor or its plan of
distribution.
11. INDEMNIFICATION. For the purpose of this Section 11, the term
"Registration Statement" shall include any preliminary or final prospectus,
exhibit, supplement or amendment included in or relating to the Registration
Statement referred to in Section 10.
(a) Subject to Section 11(e), the Company agrees to indemnify
and hold harmless each of the Investors, the Trust and each person, if
any, who controls any Investor within the meaning of the Securities
Act, and each of their respective officers, directors and Affiliates
(as hereinafter defined) (each, an "Investor Indemnitee") against any
losses, claims, damages, liabilities, proceedings or expenses, joint or
several, to which such Investors or such controlling person or other
Investor Indemnitee may become subject, under the Securities Act, the
Exchange Act, or any other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of
any litigation, if such settlement is effected with the written consent
of the Company), insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof as contemplated below) arise
out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement,
including the financial statements and schedules, and all other
documents filed as a part thereof, as amended at the time of
effectiveness of the Registration Statement, including any information
deemed to be a part thereof as of the time of effectiveness pursuant to
paragraph (b) of Rule 430A, or pursuant to Rule 434, under the
Securities Act, or in the prospectus related thereto, in the form first
filed with the Commission pursuant to Rule 424(b) under the Securities
Act or filed as part of the Registration Statement at the time of
effectiveness if no Rule 424(b) filing is required (the "Prospectus"),
or any amendment or supplement to the Registration Statement or
Prospectus, or arise out of or are based upon the omission or alleged
omission to state in any of them a material fact required to be stated
therein or necessary to make the statements in any of them, in light of
the circumstances under which they were made, not misleading, or (ii)
in whole or in part on any inaccuracy in the representations and
warranties of the Company contained in this Agreement, or (iii) any
failure of the Company to perform its obligations under this Agreement
or under applicable law, and will reimburse each Investor and each such
controlling person or Investor Indemnitee for reasonable legal and
other expenses as such expenses are reasonably incurred by such
Investor or such controlling person or Investor Indemnitee in
connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action;
provided, however, that the Company will not be liable in any such case
to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon (x) an untrue statement or alleged
untrue statement or omission or
24
alleged omission made in the Registration Statement, the Prospectus or
any amendment or supplement thereto in reliance upon and in conformity
with written information furnished to the Company by or on behalf of
the Investor expressly for use in the Registration Statement, the
Prospectus or any amendment or supplement thereto, or (y) the failure
of such Investor to comply with the covenants and agreements contained
in Section 7(f), 7(j), 9 or 10(b) of this Agreement regarding the
resale of the Registered Shares, or (z) the inaccuracy of any
representations and warranties made by such Investor in this Agreement
or any untrue statement or omission of a material fact required to make
such statement not misleading in any Prospectus that is corrected in
any subsequent Prospectus or supplement thereto that was delivered to
the Investor a reasonable period of time before the pertinent sale or
sales by the Investor. For purposes of this Agreement, "Affiliate"
shall have the meaning set forth in Rule 12b-2 promulgated under the
Exchange Act.
(b) Subject to Section 11(e), each Investor will severally and
not jointly indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement
and each person, if any, who controls the Company within the meaning of
the Securities Act, against any losses, claims, damages, liabilities or
expenses to which the Company, each of its directors, each of its
officers who signed the Registration Statement or controlling person
may become subject, under the Securities Act, the Exchange Act, or any
other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Investor),
insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are
based upon (i) any failure on the part of such Investor to comply with
the covenants and agreements contained in Section 7(f), 7(j), 9 or
10(b) of this Agreement regarding the resale of the Registered Shares
or (ii) the inaccuracy of any representations and warranties made by
such Investor in this Agreement or (iii) any untrue or alleged untrue
statement of any material fact contained in the Registration Statement,
the Prospectus, or any amendment 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, 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 the Registration Statement,
the Prospectus, or any amendment or supplement thereto, in reliance
upon and in conformity with written information furnished to the
Company by or on behalf of such Investor expressly for use therein;
provided, however, that the Investor shall not be liable for any such
untrue or alleged untrue statement or omission or alleged omission of
which the Investor has delivered to the Company in writing a correction
of such untrue statement or omission of a material fact a reasonable
amount of time before the occurrence of the transaction from or upon
which such loss, claim, damage, liability or expense arose or was
based, and the Investor will reimburse the Company, each of its
directors, each of its officers who signed the Registration Statement
or controlling person for reasonable legal and other expenses as such
expenses are reasonably incurred by the Company, each of its directors,
each of its officers who signed the Registration Statement or
controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage,
liability, expense or action.
25
(c) Promptly after receipt by an indemnified party under this
Section 11 of notice of the threat or commencement of any action, the
following shall occur:
(i) Such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party
under this Section 11, promptly notify the indemnifying party
in writing of the claim; but the omission so to notify the
indemnifying party will not relieve it from any liability
which it may have to any indemnified party for contribution or
otherwise under the indemnity agreement contained in this
Section 11 to the extent it is not prejudiced as a result of
such failure.
(ii) In case any such action is brought against any
indemnified party and such indemnified party seeks or intends
to seek indemnity from an indemnifying party, the indemnifying
party will be entitled to participate in, and, to the extent
that it may wish, jointly with all other indemnifying parties
similarly notified, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there
may be a conflict between the positions of the indemnifying
party and the indemnified party in conducting the defense of
any such action or that there may be legal defenses available
to it or other indemnified parties that are different from or
additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select
separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf
of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval
by the indemnified party of counsel, which approval shall not
be unreasonably withheld, the indemnifying party will not be
liable to such indemnified party under this Section 11 for any
legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof
unless:
(A) the indemnified party shall have employed such
counsel in connection with the assumption of legal
defenses in accordance with the proviso to the
preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for
the expenses of more than one separate counsel,
reasonably approved by such indemnifying party
representing all of the indemnified parties who are
parties to such action) or
(B) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a
reasonable time after notice of commencement of
action, in each of which cases the reasonable fees
and expenses of counsel shall be at the expense of
the indemnifying party.
26
(d) If the indemnification provided for in this Section 11 is
required by Section 11(a)(i) or 11(b)(iii) but is for any reason held
to be unavailable to or otherwise insufficient to hold harmless an
indemnified party under this Section 11 in respect to any losses,
claims, damages, liabilities or expenses referred to in this Agreement,
then each applicable indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of any losses,
claims, damages, liabilities or expenses referred to in this Agreement
in such proportion as is appropriate to reflect the relative fault of
the Company and each such Investor in connection with the statements or
omissions in this Agreement that resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant
equitable considerations.
The relative fault of the Company and each Investor shall be
determined by reference to, among other things, whether the untrue or
alleged statement of a material fact or the omission or alleged
omission to state a material fact that relates to information supplied
by the Company or by such Investor and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the
limitations set forth in Section 11(c), any legal or other fees or
expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set
forth in Section 11(c) with respect to the notice of the threat or
commencement of any threat or action shall apply if a claim for
contribution is to be made under this Section 11; provided, however,
that no additional notice shall be required with respect to any threat
or action for which notice has been given under Section 11 for purposes
of indemnification. The Company and each Investor agree that it would
not be just and equitable if contribution pursuant to this Section 11
were determined solely by pro rata allocation (even if the Investors
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to in this paragraph. Notwithstanding the provisions of this
Section 11, no Investor shall be required to contribute any amount in
excess of the amount by which the total proceeds received by it from
the sale of the Registered Shares exceeds the amount of any damages
that such Investor has 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. The Investors' obligations to contribute pursuant to
this Section 11 are several and not joint.
(e) In no event shall the aggregate liability hereunder (i) of
the Company exceed $75,000,000 with respect to the matters described in
clauses (ii) and (iii) of Section 11(a) or (ii) of an Investor exceed
(x) the market value of the Registered Shares issued to such Investor
with respect to the matters described in clauses (i) and (ii) of
Section 11(b) and (y) the gross proceeds to such Investor as a result
of the sale of the Registered Shares pursuant to a Registration
Statement, Prospectus or any amendment or supplement thereto with
respect to the matters described in clause (iii) of Section 11(b).
27
12. INFORMATION AVAILABLE. From the date of this Agreement through the
date the Registration Statement covering the resale of Registered Shares owned
by any Investor is no longer required to be effective, the Company will furnish
to such Investor:
(a) as soon as practicable after available (but in the case of
the Company's Annual Report to Shareholders, within 90 days after the
end of each fiscal year of the Company), one copy of:
(i) its Annual Report to Shareholders (which Annual
Report shall contain consolidated financial statements audited
in accordance with generally accepted accounting principles by
a national firm of certified public accountants);
(ii) if not included in substance in the Annual
Report to Shareholders, its Annual Report on Form 10-K;
(iii) if not included in substance in any Quarterly
Reports to Shareholders, its Quarterly Reports on Form 10-Q;
and
(iv) a full copy of the particular Registration
Statement covering the Registered Shares (the foregoing, in
each case, excluding exhibits); and
(b) promptly upon the request of the Investor, a reasonable
number of copies of the Prospectus to supply to any other party
requiring the Prospectus.
13. RULE 144 INFORMATION. Until the earlier of (a) the date on which
the Registered Shares may be resold by the Investors without registration and
without regard to any volume limitations by reason of Rule 144(k) under the
Securities Act or any other rule of similar effect or (b) all of the Registered
Shares have been sold pursuant to the Registration Statement or Rule 144 under
the Securities Act or any other rule of similar effect, the Company shall timely
file all reports required to be filed by it under the Securities Act, the rules
and regulations promulgated thereunder and the Exchange Act so long as it is
subject to such requirements and shall take such further reasonable action to
the extent required to enable the Investors to sell the Registered Shares
pursuant to Rule 144 under the Securities Act (as such rule may be amended from
time to time).
14. FURTHER ASSURANCES. From and after the date hereof, the parties
agree (a) to furnish upon request to each other such further information as may
be requested from time to time, (b) to execute and deliver to each other all
documents to be delivered at the Closing as set forth in Section 5 hereof and
such other documents as may be requested from time to time, and (c) to do such
other acts and things, all as the other party may reasonably request for the
purpose of carrying out the intent of the transactions contemplated hereby.
28
15. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
agreements, representations, warranties and other statements of the Trust and
the Company or their officers and of the Investors set forth in or made pursuant
to this Agreement will remain in full force and effect for a period of eighteen
(18) months following the Closing Date, regardless of any investigation, or
statement as to the results thereof, made by or on behalf of the Investors, the
Trust or the Company or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the shares of Common Stock. If for any reason the transactions contemplated
by this Agreement are not consummated, the Trust and the Company shall remain
responsible for the expenses to be paid or reimbursed by them pursuant to
Section 8 and if any shares of Common Stock have been issued and delivered to
the Investors hereunder the representations and warranties in Section 6 and all
obligations under Section 8 shall also remain in effect for a period of eighteen
(18) months following the Closing Date.
16. NOTICES. All communications hereunder will be in writing and, if
sent to the Investors will be mailed by first-class registered or certified
airmail, confirmed facsimile or nationally recognized overnight express courier
postage prepaid, and shall be delivered as addressed as follows: to each
Investor at the addresses listed on attached Schedule A; or, if sent to the
Property Trustee, the Guarantee Trustee or the Debenture Trustee, to The Bank of
New York, 000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust Trustee Administration; or, if sent to the Delaware
Trustee, to The Bank of New York (Delaware), Xxxxx Xxxx Xxxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Department; or, if sent to
the Trust, the Regular Trustees or the Company, to DT Industries, Inc., 000 Xxxx
0xx Xxxxxx, Xxxxxx, Xxxx 00000, Attention: President and General Counsel,
Facsimile: (000) 000-0000. Such notice shall be deemed effectively given one
business day after deposit with an overnight courier or three days after deposit
of such registered or certified airmail with the U.S. Postal Service, as
applicable.
17. MODIFICATION; AMENDMENT; TERMINATION.
(a) This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by all of the parties
hereto; provided, however, that only the Company and the Investors (or
their successors in interest, as the case may be) shall be required to
sign any amendment or modification with respect to the representations
or covenants contained in Xxxxxxxx 0, 0, 00 xxx 00 xxxxxx.
(x) At any time after July 2, 2002 if the Closing has not
occurred on or before such date, this Agreement may be terminated by
any one or more Investors, beneficially owning (in the aggregate) more
than 33 1/3% of the Preferred Securities, at the option of such
Investor or Investors upon written notice to the Company.
18. ENTIRE AGREEMENT. This Agreement, including the Schedules and
Exhibits hereto, supersedes all other prior oral or written agreements between
the parties with respect to the matters discussed herein and contains the entire
understanding with respect to the matters covered herein. Notwithstanding the
foregoing, except as modified or amended by the transactions contemplated by
this Agreement, the representations, warranties and covenants
29
contained in the Original Preferred Securities Purchase Agreement shall survive
and be enforceable against the parties thereto.
19. HEADINGS. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.
20. SEVERABILITY. If any provision contained in this Agreement should
be held to be invalid, illegal or this Agreement shall not in any way be
affected or impaired thereby.
21. TRANSFERS OF PREFERRED AND COMMON SECURITIES; SUCCESSORS.
(a) In addition to complying with all requirements relating to
transfers of Preferred Securities and Common Securities under this
Agreement and the Amended and Restated Declaration of Trust, no
Preferred Securities or Common Securities shall be transferred prior to
the Closing unless and until the transferee thereof has executed and
delivered to the Company a counterpart of this Agreement or another
instrument in form and substance satisfactory to the Company, thereby
evidencing such transferee's agreement to be bound by and to comply
with the terms and provisions hereof as if such transferee were an
original signatory to this Agreement. Each transferee of Preferred
Securities or Common Securities following the Closing shall be deemed
to have expressly assented and agreed to, and shall be entitled to the
benefits of and be bound by, the terms of this Exchange Agreement.
(b) This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted
assigns, and no other person will have any right or obligation
hereunder.
22. 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.
23. 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; provided, however, that any and all provisions
of this Agreement that amend the Amended and Restated Declaration of Trust or
the terms of the Common Securities or Preferred Securities shall be governed by,
and construed in accordance with, the laws of the State of Delaware. Each of the
Trust and the Company 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.
24. TRUSTEE EXCULPATION. Notwithstanding any provision of this
Agreement, the parties hereto acknowledge and agree that any Trustee who is a
signatory to this Agreement is not acting in his, her or its individual capacity
when signing on behalf of the Trust, but is acting solely as trustee of the
Trust and any reference herein to Trustees shall be deemed to reference that
Trustee solely in its capacity as trustee of the Trust and such Trustee shall
not be liable personally to any other party for an actual or alleged breach of
any provision contained this
30
Agreement. Each party agrees to look solely to the estate of the respective
trust, and not to the Trustee in such Trustee's individual capacity, for any
damages or other remedy for such trust's breach of any provision contained in
this Agreement.
[SIGNATURE PAGE(S) FOLLOW]
31
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
XXXXXXX X. XXXXXXX, as Regular Trustee
/s/ Xxxx X. Xxxxxx
--------------------------------------------
XXXX X. XXXXXX, as Regular Trustee
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
XXXXXXX X. XXXXXX, as Regular Trustee
DT INDUSTRIES, INC.
By: /s/ Authorized Signature
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
THE BANK OF NEW YORK, as Property Trustee,
Debenture Trustee and Guarantee Trustee
By: /s/ Authorized Signature
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
THE BANK OF NEW YORK (DELAWARE), as Delaware
Trustee
By: /s/ Authorized Signature
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
32
THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY
By: /s/ Authorized Signature
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
THE TRAVELERS INSURANCE COMPANY
By: /s/ Authorized Signature
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
THE TRAVELERS INDEMNITY COMPANY
By: /s/ Authorized Signature
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: Xxxxx X. Xxxxxx & Company Inc., as
Investment Adviser
By: /s/ Authorized Signature
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MASSMUTUAL CORPORATE INVESTORS
By: /s/ Authorized Signature
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
The foregoing is executed on behalf of
MassMutual Corporate Investors, 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.
33
MASSMUTUAL PARTICIPATION INVESTORS
By: /s/ Authorized Signature
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
The foregoing is executed on behalf of
MassMutual Participation Investors,
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 CORPORATE VALUE PARTNERS LIMITED
By: Xxxxx X. Xxxxxx & Company Inc. under
delegated authority from Massachusetts
Mutual Life Insurance Company as
Investment Manager
By: /s/ Authorized Signature
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MASSMUTUAL HIGH YIELD PARTNERS II LLC
By: HYP Management, Inc., as Managing Member
By: /s/ Authorized Signature
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Pursuant to Section 4 of this Agreement, DT
Capital Trust is executing this Agreement
for the purpose of becoming a party hereto
and agreeing to perform its obligations and
duties hereunder.
34
DT CAPITAL TRUST
By: Xxxxxxx X. Xxxxxxx, solely in
his capacity as trustee and not in
his individual capacity
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
By: Xxxx X. Xxxxxx, solely in his
capacity as trustee and not in his
individual capacity
/s/ Xxxx X. Xxxxxx
-----------------------------------
By: Xxxxxxx X. Xxxxxx, solely in
his capacity as trustee and not in
his individual capacity
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------
35
SCHEDULES AND EXHIBITS
SCHEDULES
Schedule A - List of Investors and Description of Exchange
Schedule B - Glossary of Defined Terms
APPENDICES
Appendix I - Stock Certificate Questionnaire
Appendix II - Registration Statement Questionnaire
EXHIBITS
Exhibit A - Form of Amendment to the Amended and Restated Declaration of
Trust
Exhibit B - Form of First Supplemental Indenture to the Indenture
Exhibit C - Form of Amendment and Confirmation to the Guarantee Agreements
Exhibit D - Form of Amended Loan Agreement
Exhibit E - Form of Share Purchase Agreement
Exhibit F - Form of Letter to DTC
Exhibit G - Form of Tax Opinion
Exhibit H - Form of Legal Opinion of General Counsel
Exhibit I - Form of Legal Opinion of KMZR
Exhibit J - Form of Legal Opinion of Delaware Counsel
Exhibit K - Schedule of Exceptions
36
SCHEDULE A
Shares of
Common Stock Total Shares
Amount of Amount of PIK Issuable Upon Shares of of Common
Name and Preferred Distribution Preferred Common Stock Stock
Address of Securities to be to be Securities Issuable Upon Issuable Upon
Investor Exchanged Exchanged Exchange PIK Exchange Exchange
---------- ---------------- ------------- ------------- ------------- -------------
THE NORTHWESTERN
MUTUAL LIFE INSURANCE
COMPANY $15,000,000 $6,465,108.86 1,875,000 808,139 2,683,139
000 Xxxx Xxxxxxxxx
Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Securities
Dept.
Fax: 000-000-0000
THE TRAVELERS
INSURANCE COMPANY
(I/N/O TRAL & CO.) $ 4,200,000 $1,810,230.48 525,000 226,279 751,279
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX
00000-0000
Attn: Xxxxxxx
Xxxxxxxxxx, 0xx Xxxxx
Telecopy:
(000)000-0000
37
THE TRAVELERS INDEMNITY COMPANY $5,800,000 $2,499,842.09 725,000 312,480 1,037,480
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxxxxxx, 0xx
Xxxxx
Telecopy: (000) 000-0000
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY $4,000,000 $1,724,029.03 500,000 215,504 715,504
Massachusetts Mutual Life
Insurance Company
0000 Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Securities Investment
Division
Xxxx X. Xxxxx, Managing Director
MASSMUTUAL PARTICIPATION
INVESTORS $ 500,000 $ 215,503.63 62,500 26,938 89,438
MassMutual Participation
Investors
c/o Massachusetts Mutual Life
Insurance Company
0000 Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Securities Investment Div.
Xxxx X. Xxxxx, Managing Director
38
MASSMUTUAL CORPORATE INVESTORS $1,000,000 $431,007.26 125,000 53,876 178,876
MassMutual Corporate Investors
c/o Massachusetts Mutual Life
Insurance Company
0000 Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Securities Investment Div.
Xxxx X. Xxxxx, Managing Director
MASSMUTUAL CORPORATE VALUE $2,000,000 $862,014.50 250,000 107,752 357,752
PARTNERS LIMITED
(I/N/0 XXXXXXX & CO.)
MassMutual Corporate Value
Partners Limited
c/o Bank of America Trust and
Banking
Corporation (Cayman) Limited
X.X. Xxx 0000
Xxxxxx Xxxx
Xxxxx Xxxxxx
Xxxxxx Xxxxxxx, B.W.I.
Attn: Xxxxxxx Xxxxxx
with a copy to
Massachusetts Mutual Life
Insurance Company
0000 Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000-XXX0XXX
Attn: Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxx
39
MASSMUTUAL HIGH YIELD
PARTNERS II LLC $ 2,500,000 $1,077,518.14 312,500 134,690 447,190
(I/N/0 XXXXXXX & CO.)
MassMutual High Yield
Partners II LLC
c/o MYP Management, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxx
TOTAL: $35,000,000 $ 15,085,254 4,375,000 1,885,658 6,260,658
40
SCHEDULE B
GLOSSARY
"Advisors".....................................................................................................Section 6(d)
"Affiliate"...................................................................................................Section 10(a)
"Agreement"....................................................................................................Introduction
"Amended and Restated Declaration of Trust"........................................................................Recitals
"Amended Loan Agreement"...................................................................................Section 5(c)(ii)
"Amendments".......................................................................................................Recitals
"Board".....................................................................................................Section 5(c)(i)
"Closing"......................................................................................................Section 5(a)
"Closing Date".................................................................................................Section 5(a)
"Code".........................................................................................................Section 6(q)
"Commission"...............................................................................................Section 6(z)(iv)
"Common Securities"................................................................................................Recitals
"Common Securities Purchase Agreement".............................................................................Recitals
"Common Stock".....................................................................................................Recitals
"Company"......................................................................................................Introduction
"Company Documents"............................................................................................Section 6(z)
"Company Material Adverse Effect"..............................................................................Section 6(j)
"Convertible Debentures"...........................................................................................Recitals
"Credit Facility"..................................................................................................Recitals
"Debenture Trustee"................................................................................................Recitals
"Derivative Securities"........................................................................................Section 6(c)
41
"DTC"..........................................................................................................Section 5(b)
"DTC Reduction"................................................................................................Section 5(b)
"Environmental Claims".........................................................................................Section 6(y)
"Environmental Law"............................................................................................Section 6(y)
"Exchange".....................................................................................................Section 3(a)
"Exchange Act".................................................................................................Section 6(t)
"Exchanged Debentures".........................................................................................Section 1(a)
"Exchanged Preferred"..........................................................................................Section 1(b)
"Guarantee Agreements".............................................................................................Recitals
"Guarantee Trustee"................................................................................................Recitals
"Indenture"........................................................................................................Recitals
"Investment Company Act".......................................................................................Section 6(s)
"Investors"....................................................................................................Introduction
"Investor Indemnitee".........................................................................................Section 10(a)
"Original Preferred Securities Purchase Agreement".................................................................Recitals
"PIK Distribution".............................................................................................Section 2(a)
"PIK Exchange".................................................................................................Section 2(b)
"PIK Interest".................................................................................................Section 2(a)
"Preferred Securities".............................................................................................Recitals
"Preferred Securities Exchange"................................................................................Section 1(b)
"Property Trustee".............................................................................................Introduction
"Proprietary Rights"...........................................................................................Section 6(w)
"Prospectus"..................................................................................................Section 10(a)
42
"Registered Shares"........................................................................................Section 9(a)(ii)
"Registration Statement"....................................................................................Section 9(a)(i)
"Remaining Common Securities"..................................................................................Section 3(a)
"Remaining Preferred Securities"...............................................................................Section 3(a)
"Revised Certificates".........................................................................................Section 3(b)
"Rights Agreement".............................................................................................Section 6(c)
"Securities Act"...............................................................................................Section 6(h)
"Series A Preferred"...........................................................................................Section 6(c)
"Share Purchase Agreement".....................................................................................Section 5(c)
"Special Meeting"..............................................................................................Section 7(c)
"Stock Certificates"...........................................................................................Section 5(b)
"Subsidiaries".................................................................................................Section 6(b)
"TIDES Equity".....................................................................................................Recitals
"Transaction Documents"........................................................................................Section 6(b)
"Trust"........................................................................................................Introduction
"Trustees".........................................................................................................Recitals
"Trust Material Adverse Effect"................................................................................Section 6(i)
43
