<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ___)*
HADSON CORPORATION
---------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 par value
---------------------------------------------------------
(Title of Class of Securities)
40501V101
----------------------------
(CUSIP Number)
John R. McCall, Executive Vice President, General Counsel and
Corporate Secretary,
LG&E Energy Corp., 220 W. Main Street, P.O. Box 32030, Louisville, KY
40232, (502) 627-2000
---------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
February 10, 1995
---------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D,
and is filing this schedule because of Rule 13d-1(b)(3) or (4), check
the following box / /.
Check the following box if a fee is being paid with the statement
/X/. (A fee is not required only if the reporting person: (1) has a
previous statement on file reporting beneficial ownership of more
than five percent of the class of securities described in Item 1; and
(2) has filed no amendment subsequent thereto reporting beneficial
ownership of five percent or less of such class.) (See Rule 13d-7.)
NOTE: This statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing
information which would alter disclosures provided in a prior cover
page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
Page 1
Exhibit Index on Page 13
<PAGE>
SCHEDULE 13D
CUSIP No. 40501V101 Page 2
- -------------------- -------
- ---------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
LG&E ENERGY CORP., IRS-ID: 61-1174555
- -- -------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
- -- -------------------------------------------------------------
3 SEC USE ONLY
- -- -------------------------------------------------------------
4 SOURCE OF FUNDS*
NO FUNDS HAVE BEEN PAID OR ARE REQUIRED TO BE PAID AT THIS
TIME BECAUSE THIS REPORTING PERSON HAS ONLY OBTAINED SHARED
VOTING POWER. IF THE REPORTING PERSON OBTAINS SHARES OF
COMMON STOCK PURSUANT TO THE MERGER AGREEMENT (DISCUSSED IN
ITEM 4), IT INTENDS TO FINANCE SUCH PURCHASES THROUGH SOME OR
ALL OF THE FOLLOWING SOURCES: WC; AF; BK
- -- -------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- -- -------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
KENTUCKY
- -- -------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY -- ------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 16,708,607
REPORTING -- ------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
-- ------------------------------------------
10 SHARED DISPOSITIVE POWER
0
-- ------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,708,607
- -- -------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- -- -------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
65.1% (BASED UPON NUMBER OF OUTSTANDING SHARES OF COMMON STOCK
AS REPORTED BY ISSUER IN ITS QUARTERLY REPORT ON FORM 10-Q FOR
THE QUARTER ENDED SEPTEMBER 30, 1994 AND AS REPRESENTED BY THE
ISSUER IN SECTION 5.4 OF THE MERGER AGREEMENT.)
-------------------------------------------------------------
- --
14 TYPE OF REPORTING PERSON*
HC; CO
- -- -------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 40501V101 Page 3
- -------------------- -------
- ---------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CAROUSEL ACQUISITION CORPORATION
- -- -------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
- -- -------------------------------------------------------------
3 SEC USE ONLY
- -- -------------------------------------------------------------
4 SOURCE OF FUNDS*
NO FUNDS HAVE BEEN PAID OR ARE REQUIRED TO BE PAID AT THIS
TIME BY THIS REPORTING PERSON. IF THE REPORTING PERSON
OBTAINS SHARES OF COMMON STOCK PURSUANT TO THE MERGER
AGREEMENT (DISCUSSED IN ITEM 4), IT INTENDS TO FINANCE SUCH
PURCHASES THROUGH SOME OR ALL OF THE FOLLOWING SOURCES: AF; BK
- -- -------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- -- -------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- -- -------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY -- ------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 16,708,607
REPORTING -- ------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
-- ------------------------------------------
10 SHARED DISPOSITIVE POWER
0
-- ------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,708,607
- -- -------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- -- -------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
65.1% (BASED UPON NUMBER OF OUTSTANDING SHARES OF COMMON STOCK
AS REPORTED BY ISSUER IN ITS QUARTERLY REPORT ON FORM 10-Q FOR
THE QUARTER ENDED SEPTEMBER 30, 1994 AND AS REPRESENTED BY THE
ISSUER IN SECTION 5.4 OF THE MERGER AGREEMENT.)
-------------------------------------------------------------
- --
14 TYPE OF REPORTING PERSON*
CO
- -- -------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 40501V101 Page 4
- -------------------- -------
- ---------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CAROUSEL HOLDING CORPORATION
- -- -------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
- -- -------------------------------------------------------------
3 SEC USE ONLY
- -- -------------------------------------------------------------
4 SOURCE OF FUNDS*
NOT APPLICABLE
- -- -------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- -- -------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- -- -------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY -- ------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 16,708,607
REPORTING -- ------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
-- ------------------------------------------
10 SHARED DISPOSITIVE POWER
0
-- ------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,708,607
- -- -------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- -- -------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
65.1% (BASED UPON NUMBER OF OUTSTANDING SHARES OF COMMON STOCK
AS REPORTED BY ISSUER IN ITS QUARTERLY REPORT ON FORM 10-Q FOR
THE QUARTER ENDED SEPTEMBER 30, 1994 AND AS REPRESENTED BY THE
ISSUER IN SECTION 5.4 OF THE MERGER AGREEMENT.)
-------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
HC; CO
- ----------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
CUSIP No. 40501V101 13D Page 5
INTRODUCTION
This Statement constitutes the initial filing for the following
reporting persons: LG&E Energy Corp. ("LG&E Energy"), Carousel
Holding Corporation ("Parent") and Carousel Acquisition Corporation
("Carousel")(LG&E Energy, Parent and Carousel each a "Reporting
Person" and collectively, the "Reporting Persons"). As required by
General Instruction C, information is given with respect to the
executive officers and directors of each Reporting Person and each
person controlling each Reporting Person (collectively, the "Related
Parties").
ITEM 1. SECURITY AND ISSUER.
The class of equity securities to which this Statement relates is
the Issuer's Common Stock, $.01 par value. The Issuer is Hadson
Corporation and its principal executive offices are located at 2777
Stemmons Freeway, Suite 700, Dallas, Texas 75207.
ITEM 2. IDENTITY AND BACKGROUND
(a) - (c), (f) This Statement is filed on behalf of each
Reporting Person. Set forth below is the name, state of organization,
principal business, address of its principal business and address of
its principal office for each Reporting Person:
<TABLE>
<CAPTION>
State Of Address Of Address Of
Name Organization Principal Business Principal Business Principal Office
- ---- ------------ ------------------ ------------------ -----------------
<S> <C> <C> <C> <C>
LG&E Energy Kentucky Exempt utility 220 W. Main Street 220 W. Main Street
Corp. holding company that P.O. Box 32030 P.O. Box 32030
owns and operates Louisville, KY Louisville, KY 40232
diversified energy 40232
services businesses
220 W. Main Street 220 W. Main Street
Carousel Delaware Parent company of P.O. Box 32030 P.O. Box 32030
Holding acquisition company Louisville, KY Louisville, KY 40232
Corporation 40232
Carousel Delaware Acquisition company 220 W. Main Street 220 W. Main Street
Acquisition P.O. Box 32030 P.O. Box 32030
Corporation Louisville, KY Louisville, KY 40232
40232
</TABLE>
<PAGE>
CUSIP No. 40501V101 13D Page 6
Each Related Party is a citizen of the United States. The name,
business address and principal occupation of each Related Party, each
of whom is a natural person, is set forth below:
<TABLE>
<CAPTION>
Name Business Address Principal Occupation
- ---- ---------------- --------------------
<S> <C> <C>
LG&E ENERGY CORP.
Roger W. Hale 220 W. Main Street President and Chief
Chairman of the Board, P.O. Box 32030 Executive Officer, LG&E
President and Chief Louisville, Kentucky 40232 Energy
Executive Officer
William C. Ballard, Jr. 220 W. Main Street Of Counsel, Greenebaum Doll
Director P.O. Box 32030 & McDonald (Legal Affairs),
Louisville, Kentucky 40232 Louisville, KY
Owsley Brown II 220 W. Main Street President and CEO, Brown-
Director P.O. Box 32030 Forman Corporation (Consumer
Louisville, Kentucky 40232 Products), Louisville, KY
S. Gordon Dabney 220 W. Main Street President, Standard Foods,
Director P.O. Box 32030 Inc. (Food Processing),
Louisville, Kentucky 40232 Louisville, KY
Gene P. Gardner 220 W. Main Street Chairman, Beaver Dam Coal
Director P.O. Box 32030 Company (Coal Properties),
Louisville, Kentucky 40232 Louisville, KY
J. David Grissom 220 W. Main Street Chairman, Mayfair Capital,
Director P.O. Box 32030 Inc. (Investments),
Louisville, Kentucky 40232 Louisville, KY
David B. Lewis 220 W. Main Street Chairman and founding
Director P.O. Box 32030 partner, Lewis, White &
Louisville, Kentucky 40232 Clay, a Professional
Corporation (Legal Affairs),
Detroit, MI
Anne McNamara 220 W. Main Street Senior Vice President,
Director P.O. Box 32030 Administration and General
Louisville, Kentucky 40232 Counsel, AMR Corporation
(Airline Holding Company)
and American Airlines Inc.,
Dallas, TX
T. Ballard Morton, Jr. 220 W. Main Street Executive in Residence,
Director P.O. Box 32030 University of Louisville,
Louisville, Kentucky 40232 College of Business and
Public Administration
(Higher Education),
Louisville, KY
Dr. Donald C. Swain 220 W. Main Street President, University of
Director P.O. Box 32030 Louisville (Higher
Louisville, Kentucky 40232 Education), Louisville, KY
Edward J. Casey, Jr. 220 W. Main Street Group President, LG&E Energy
Executive Officer P.O. Box 32030 Services, LG&E Energy
Louisville, Kentucky 40232
</TABLE>
<PAGE>
CUSIP No. 40501V101 13D Page 7
<TABLE>
<CAPTION>
Name Business Address Principal Occupation
- ---- ---------------- --------------------
<S> <C> <C>
John R. McCall 220 W. Main Street Executive Vice President,
Executive Officer P.O. Box 32030 General Counsel and
Louisville, Kentucky 40232 Corporate Secretary, LG&E
Energy
Stephen R. Wood 220 W. Main Street Executive Vice President and
Executive Officer P.O. Box 32030 Chief Administrative
Louisville, Kentucky 40232 Officer, LG&E Energy
Charles A. Markel 220 W. Main Street Corporate Vice President-
Executive Officer P.O. Box 32030 Finance, LG&E Energy,
Louisville, Kentucky 40232 Louisville Gas & Electric
Company
Paul W. Thompson 220 W. Main Street Vice President-Business
Executive Officer P.O. Box 32030 Development, LG&E Energy
Louisville, Kentucky 40232
Chris Hermann 220 W. Main Street Vice President and General
Executive Officer P.O. Box 32030 Manager-Wholesale Electric
Louisville, Kentucky 40232 Business, LG&E Energy
Services, Louisville Gas &
Electric Company
Victor A. Staffieri 220 W. Main Street President, Louisville Gas
Executive Officer P.O. Box 32030 and Electric Company
Louisville, Kentucky 40232
David R. Carey 220 W. Main Street Senior Vice President-
Executive Officer P.O. Box 32030 Operations, Louisville Gas
Louisville, Kentucky 40232 and Electric Company
M. Lee Fowler 220 W. Main Street Vice President and
Executive Officer P.O. Box 32030 Controller, Louisville Gas
Louisville, Kentucky 40232 and Electric Company
Wendy C. Heck 220 W. Main Street Vice President-Information
Executive Officer P.O. Box 32030 Services, Louisville Gas and
Louisville, Kentucky 40232 Electric Company
Rebecca L. Holt 220 W. Main Street Vice President-Gas Service
Executive Officer P.O. Box 32030 Business, Louisville Gas &
Louisville, Kentucky 40232 Electric Company
CAROUSEL ACQUISITION
CORPORATION 220 W. Main Street Chairman of the Board,
Roger W. Hale, P.O. Box 32030 President and Chief
Chairman of the Board Louisville, Kentucky 40232 Executive Officer, LG&E
Energy
220 W. Main Street
Edward J. Casey, Jr., P.O. Box 32030 Group President, LG&E Energy
Director and President Louisville, Kentucky 40232 Services, LG&E Energy
220 W. Main Street
John R. McCall, P.O. Box 32030 Executive Vice President,
Director and Secretary Louisville, Kentucky 40232 General Counsel and
Corporate Secretary, LG&E
Energy
Paul W. Thompson 220 W. Main Street Vice President-Business
Vice President P.O. Box 32030 Development, LG&E Energy
Treasurer Louisville, Kentucky 40232
</TABLE>
<PAGE>
CUSIP No. 40501V101 13D Page 8
<TABLE>
<CAPTION>
Name Business Address Principal Occupation
- ---- ---------------- --------------------
<S> <C> <C>
CAROUSEL HOLDING CORPORATION
Roger W. Hale, 220 W. Main Street Chairman of the Board,
Director and President P.O. Box 32030 President and Chief
Louisville, Kentucky 40232 Executive Officer, LG&E
Energy
Edward J. Casey, Jr., 220 W. Main Street
Director, Vice President P.O. Box 32030 Group President, LG&E Energy
and Treasurer Louisville, Kentucky 40232 Services, LG&E Energy
John R. McCall, 220 W. Main Street
Director and Secretary P.O. Box 32030 Executive Vice President,
Louisville, Kentucky 40232 General Counsel and Corporate
Secretary, LG&E Energy
</TABLE>
(d) and (e) No Reporting Person or Related Party has, during
the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), or been a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violations with
respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
LG&E Energy has the power to vote 10,395,665 of the shares of
Common Stock reported herein in certain circumstances, pursuant to a
Limited Irrevocable Proxy, dated February 10, 1995 (the "Santa Fe
Proxy") granted by Santa Fe Energy Resources, Inc. ("Santa Fe"). LG&E
Energy has the power to vote the remaining 6,312,942 shares of Common
Stock reported herein in certain circumstances, pursuant to a Limited
Irrevocable Proxy dated February 10, 1995 (the "Prudential Proxy")
granted by The Prudential Insurance Company of America, Pruco Life
Insurance Company and PruSupply, Inc. (collectively, "Prudential").
The Santa Fe Proxy and the Prudential Proxy are discussed further in
Item 4. Copies of the Santa Fe Proxy and the Prudential Proxy are
filed as Exhibits 5 and 6, respectively, and are incorporated herein
by reference.
LG&E Energy and Carousel have not had to pay funds, and are not
currently required to pay funds, in connection with the shares of
Common Stock reported herein. Such funds will become due if and
immediately prior to when the Merger contemplated by the Merger
Agreement becomes effective. The Santa Fe Securities Purchase
Agreement provides for an aggregate purchase price of $55.25 million
for all of the securities being purchased and sold thereunder (which
are listed in Item 4), including without limitation 10,395,665 shares
of Issuer's Common Stock. The Prudential Securities Purchase
Agreement provides for an aggregate purchase price of $63 million
(plus accrued interest, if any, on the 8% Senior Secured Notes) for all of the
securities being purchased and sold thereunder (which are listed in
Item 4), including without
<PAGE>
CUSIP No. 40501V101 13D Page 9
limitation 1,329,762 shares of Issuer's Common Stock and the rights
and benefits in 4,983,180 shares of Issuer's Common Stock under the HP
Trust. Moreover, if and when the Merger becomes effective pursuant to
the Merger Agreement, LG&E Energy and Carousel will be required to pay
$2.75 per share (or approximately $24.7 million in the aggregate) for
the outstanding shares of Common Stock of Issuer, excluding any shares
acquired pursuant to the Santa Fe Securities Purchase Agreement and
the Prudential Securities Purchase Agreement and certain other shares
as described in Item 4. LG&E Energy and Carousel currently anticipate
that they would obtain such funds through one or more of working
capital, affiliates' working capital, an existing bank facility
and/or a new bank facility. Carousel is a wholly-owned subsidiary of
Parent, which in turn is a wholly-owned subsidiary of LG&E Energy .
ITEM 4. PURPOSE OF TRANSACTION
The transactions reported herein have been entered into with the
purpose of obtaining ownership and control of all voting securities of
Issuer, with the effect that Issuer will become an indirect wholly-owned
subsidiary of LG&E Energy pursuant to a merger of Carousel with and
into Issuer, with Issuer as the surviving corporation (the "Merger").
Issuer, LG&E Energy and Carousel have entered into an Agreement and
Plan of Merger, dated as of February 10, 1995 (the "Merger
Agreement"), providing for the Merger, subject to the satisfaction of
certain conditions, including obtaining the consent of the requisite
holders of the Issuer's Common Stock. A copy of the Merger Agreement
is filed as Exhibit 2. Articles I, II, III, IV, VII, VIII, IX and X
of the Merger Agreement are incorporated herein by reference.
If the Merger is approved and becomes effective, Carousel will be
merged with and into Issuer, with Issuer as the surviving corporation,
(i) each share of common stock of Carousel will be converted into and
become one fully-paid and nonassessable share of Common Stock of the
surviving corporation, (ii) each share of Common Stock of Issuer
issued and outstanding immediately prior to the effective time (other
than treasury shares, shares beneficially owned by LG&E Energy or its
subsidiaries, including without limitation shares of the Issuer's
Common Stock held in the HP Trust, and shares held by holders who have
properly exercised, and not withdrawn or lost, appraisal rights under
the Delaware General Corporation Law) shall be converted into and
become a right to receive $2.75 in cash, without any interest thereon,
(iii) each share of Series A Preferred shall remain unchanged and outstanding
and shall represent one share of Series A Preferred of the surviving
corporation, (iv) each share of Series B Preferred shall remain
unchanged and outstanding and shall represent one share of Series B Preferred
of the surviving corporation, (v) the directors of Carousel immediately prior
to the Merger's effectiveness will become the directors of the
surviving corporation and the executive officers of Issuer immediately
prior to the Merger's effectiveness are expected to remain as the
executive officers of the surviving corporation; (vi) the certificate
of incorporation of Issuer in effect immediately prior to the Merger
shall be the certificate of incorporation of the surviving corporation
and the bylaws of Carousel in effect immediately prior to the Merger
shall be the bylaws of the surviving corporation, in either case until
duly amended in accordance with applicable law; (vii) the Common Stock
will be delisted from the New York Stock Exchange, and (viii) the
Common Stock will become eligible for termination of registration
pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934.
<PAGE>
CUSIP No. 40501V101 13D Page 10
As mentioned in Item 3, LG&E Energy has the power to vote the
shares of Common Stock reported herein in certain circumstances,
pursuant to the Santa Fe Proxy and the Prudential Proxy (collectively
the "Proxies"). Specifically, the Proxies entitle LG&E Energy to vote
any shares of Common Stock held by Santa Fe and Prudential,
respectively, in such manner as to cause the Merger to be approved,
only if Santa Fe or Prudential, respectively, fails or refuses to vote
its shares of Common Stock in favor of the Merger. Santa Fe and
Prudential granted the Proxies in accordance with the terms of two
related Securities Purchase Agreements, dated February 10, 1995 with
LG&E Energy and Carousel (the "Santa Fe Securities Purchase Agreement"
and the "Prudential Securities Purchase Agreement," respectively).
The Santa Fe Securities Purchase Agreement provides for the sale
by Santa Fe to LG&E Energy and Carousel of (i) 10,395,665 shares of
Issuer's Common Stock, (ii) 2,335,907 shares of Senior Cumulative
Preferred Stock, Series A of Issuer (the "Series A Preferred"), and
(iii) $2.35 million in aggregate principal amount of 9% Junior Notes
of Issuer. Such purchase and sale is to become effective immediately
prior to the Merger. A copy of the Santa Fe Securities Purchase
Agreement is filed as Exhibit 3. Articles 1, 2, 5, 6, 7 and 8 of the
Santa Fe Securities Purchase Agreement are incorporated herein by
reference.
The Prudential Securities Purchase Agreement provides for the
sale by Prudential to LG&E Energy and Carousel of (i) 1,329,762 shares
of Issuer's Common Stock, (ii) the rights and benefits provided under
the Agreement and Declaration of Trust (the "HP Trust"), dated
December 14, 1993, by and among Issuer, Prudential, and Liberty Bank
and Trust Company of Oklahoma, N.A., in 4,983,180 shares of Issuer's
Common Stock, (iii) 5,010 shares of Junior Exercisable Automatically
Convertible Preferred Stock, Series B of Issuer (the "Series B
Preferred") and (iv) $56.4 million in original aggregate principal
amount of 8% Senior Secured Notes due 2003 of Issuer. Such purchase
and sale is to become effective immediately prior to the Merger. A
copy of the Prudential Securities Purchase Agreement is filed as
Exhibit 4. Articles 1, 2, 5, 6, 7 and 8 of the Prudential Securities
Purchase Agreement are incorporated herein by reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) and (b) Set forth in the table below are the number and
percentage of Common Stock beneficially owned, as well as the nature
of ownership, for each Reporting Person as of the date hereof:
<TABLE>
<CAPTION>
Number Of Shares Number of Shares
Beneficially Owned With Sole Beneficially Owned With Aggregate Number of Percentage of Shares
Name Voting And Dispositive Power Shared Voting Power Shares Beneficially Owned Beneficially Owned
---- ---------------------------- ----------------------- ------------------------- --------------------
<S> <C> <C> <C> <C>
LG&E Energy Corp. Not applicable 16,708,607 16,708,607 65.1%
Carousel Acquisition Not applicable 16,708,607 16,708,607 65.1%
Corporation
<PAGE>
CUSIP No. 40501V101 13D Page 11
Carousel Holding Not applicable 16,708,607 16,708,607 65.1%
Corporation
</TABLE>
(c) None.
(d) To the knowledge of the Reporting Persons, Santa Fe and
Prudential still have the right to receive and the power to direct the
receipt of dividends from, and the proceeds from the sale of, the
shares of Common Stock reported herein.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER
Reference is made to the discussion of the Merger Agreement, the Santa
Fe Securities Purchase Agreement, the Prudential Securities Purchase
Agreement, the Santa Fe Proxy and the Prudential Proxy in Items 3 and
4. Such documents are incorporated herein by reference to the same
extent as incorporated by reference in Items 3 and 4.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit
Number Description
- -------- -----------
1 Agreement, dated February 21, 1995, among Reporting Persons
relating to filing of joint acquisition statement.
2 Agreement and Plan of Merger, dated as of February 10, 1995,
among LG&E Energy, Carousel and Issuer.
3 Securities Purchase Agreement, dated February 10, 1995, among
Santa Fe, LG&E Energy and Carousel.
4 Securities Purchase Agreement, dated February 10, 1995, among
Prudential, LG&E Energy and Carousel
5 Limited Irrevocable Proxy, dated February 10, 1995, between
Santa Fe and LG&E Energy.
6 Limited Irrevocable Proxy, dated February 10, 1995, between
Prudential and LG&E Energy.
<PAGE>
CUSIP No. 40501V101 13D Page 12
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is
true, complete and correct.
Dated: February 21, 1995
LG&E ENERGY CORP.
By: /s/ Edward J. Casey, Jr.
----------------------------------------
Name: Edward J. Casey, Jr.
---------------------------------------
Title:Group President, LG&E Energy Services,
LG&E Energy Corp.
--------------------------------------
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is
true, complete and correct.
Dated: February 21, 1995
CAROUSEL ACQUISITION CORPORATION
By: /s/ Edward J. Casey, Jr.
------------------------------------
Name: Edward J. Casey, Jr.
-----------------------------------
Title:President
----------------------------------
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is
true, complete and correct.
Dated: February 21, 1995
CAROUSEL HOLDING CORPORATION
By: /s/ Edward J. Casey, Jr.
------------------------------------
Name: Edward J. Casey, Jr.
-----------------------------------
Title:Vice President And Treasurer
----------------------------------
<PAGE>
CUSIP No. 40501V101 13D Page 13
EXHIBIT INDEX
Exhibit
Number Description
-------- -----------
1 Agreement, dated February 21, 1995, among Reporting
Persons relating to filing of joint acquisition
statement.
2 Agreement and Plan of Merger, dated as of February 10,
1995, among LG&E Energy, Carousel and Issuer.
3 Securities Purchase Agreement, dated February 10, 1995,
among Santa Fe, LG&E Energy and Carousel.
4 Securities Purchase Agreement, dated February 10, 1995,
among Prudential, LG&E Energy and Carousel
5 Limited Irrevocable Proxy, dated February 10, 1995,
between Santa Fe and LG&E Energy.
6 Limited Irrevocable Proxy, dated February 10, 1995,
between Prudential and LG&E Energy.
<PAGE>
EXHIBIT 1
AGREEMENT
This Agreement is made this 21th day of February, 1995 among
LG&E Energy Corp., Carousel Acquisition Corporation and Carousel
Holding Corporation.
The parties hereto hereby agree as follows:
1. One statement containing the information required by
Schedule 13D under the Securities Exchange Act of 1934 with
respect to beneficial ownership of the Common Stock of Hadson
Corporation, a Delaware corporation, may be filed with the
Securities and Exchange Commission on behalf of each of them.
2. This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
LG&E ENERGY CORP.
By: /s/ Edward J. Casey, Jr.
-----------------------------------------
Name: Edward J. Casey, Jr.
---------------------------------------
Title:Group President, LG&E Energy Services,
LG&E Energy Corp.
--------------------------------------
CAROUSEL ACQUISITION CORPORATION
By: /s/ Edward J. Casey, Jr.
-----------------------------------------
Name: Edward J. Casey, Jr.
---------------------------------------
Title:President
--------------------------------------
CAROUSEL HOLDING CORPORATION
By: /s/ Edward J. Casey, Jr.
-----------------------------------------
Name: Edward J. Casey, Jr.
---------------------------------------
Title:Vice President And Treasurer
--------------------------------------
<PAGE>
EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
AMONG
LG&E ENERGY CORP.,
CAROUSEL ACQUISITION CORPORATION
AND
HADSON CORPORATION
DATED AS OF FEBRUARY 10, 1995
<PAGE>
TABLE OF CONTENTS
PAGE
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ARTICLE I
THE MERGER
1.1 The Merger.......................................................1
1.2 The Closing......................................................2
1.3 Effective Time...................................................2
ARTICLE II
CERTIFICATE OF INCORPORATION AND
BY-LAWS OF THE SURVIVING CORPORATION
2.1 Certificate of Incorporation.....................................2
2.2 By-laws..........................................................2
ARTICLE III
DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION
3.1 Directors........................................................2
3.2 Officers.........................................................2
ARTICLE IV
CONVERSION OF COMPANY STOCK; COMPANY OPTIONS
4.1 Conversion of Company Stock......................................3
4.2 Exchange of Certificates Representing Company Common Stock.......3
4.3 Dissenting Shares................................................5
4.4 Company Options..................................................5
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
5.1 Existence; Good Standing; Corporate Authority....................6
5.2 Compliance with Law..............................................6
5.3 Authorization, Validity and Effect of Agreements.................7
5.4 Capitalization...................................................7
5.5 Subsidiaries.....................................................8
5.6 Related Party Transactions.......................................8
(i)
<PAGE>
5.7 Other Interests..................................................8
5.8 No Violation.....................................................8
5.9 SEC Documents....................................................9
5.10 Litigation......................................................10
5.11 Absence of Certain Changes......................................11
5.12 Certain Employee Plans..........................................11
5.13 Labor Matters...................................................12
5.14 Environmental Matters...........................................12
5.15 Title...........................................................15
5.16 Maintenance of Facilities.......................................16
5.17 Insurance.......................................................16
5.18 Fairness Opinion................................................16
5.19 Public Utility Holding Company Act..............................16
5.20 Taxes...........................................................17
5.21 No Brokers......................................................20
5.22 Material Contracts..............................................21
5.23 Absence of Other Agreements.....................................21
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
6.1 Existence; Good Standing; Corporate Authority...................21
6.2 Authorization, Validity and Effect of Agreements................21
6.3 No Violation....................................................22
6.4 Availability of Funds...........................................22
6.5 No Brokers......................................................22
ARTICLE VII
COVENANTS
7.1 Takeover Proposals..............................................22
7.2 Conduct of Business.............................................23
7.3 Stockholder Action..............................................25
7.4 Filings; Other Action...........................................27
7.5 Inspection of Records; Access...................................27
7.6 Publicity.......................................................28
7.7 Further Action..................................................28
7.8 Expenses........................................................28
7.9 Indemnification.................................................29
7.10 Certain Benefits................................................30
7.11 Settlement of Litigation........................................30
7.12 No Amendment....................................................30
7.13 Payment of Certain Indebtedness.................................30
(ii)
<PAGE>
ARTICLE VIII
CONDITIONS
8.1 Conditions to Each Party's Obligation to Effect the Merger......31
8.2 Condition to Obligation of the Company to Effect the Merger.....31
8.3 Conditions to Obligation of Parent and Merger Sub to Effect the
Merger..........................................................32
ARTICLE IX
TERMINATION
9.1 Termination by Mutual Consent...................................33
9.2 Termination by Either Parent or the Company.....................33
9.3 Termination by the Company......................................33
9.4 Termination by Parent...........................................34
9.5 Automatic Termination...........................................34
9.6 Effect of Termination and Abandonment...........................34
9.7 Extension; Waiver...............................................34
ARTICLE X
GENERAL PROVISIONS
10.1 Survival of Representations and Warranties; Consequences of
Inaccuracy......................................................34
10.2 Notices.........................................................35
10.3 Assignment; Binding Effect; Benefit.............................35
10.4 Entire Agreement................................................36
10.5 Amendment.......................................................36
10.6 Governing Law; Choice of Forum..................................36
10.7 Counterparts....................................................36
10.8 Headings........................................................36
10.9 Interpretation..................................................36
10.10 Waivers.........................................................36
10.11 Severability....................................................37
(iii)
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated as of
February 10, 1995, among LG&E Energy Corp., a Kentucky corporation ("PARENT"),
Carousel Acquisition Corporation, a Delaware corporation and a wholly-owned
subsidiary of Parent ("MERGER SUB"), and Hadson Corporation, a Delaware
corporation (the "COMPANY").
RECITALS
A. The Board of Directors of each of Parent and Merger Sub, believing
it advisable for the respective benefit of Parent and Merger Sub and their
respective stockholders, has approved the merger of Merger Sub with and into the
Company (the "MERGER") upon the terms and subject to the conditions set forth
herein.
B. The Board of Directors of the Company has received a fairness
opinion relating to the transactions contemplated hereby as more fully described
herein.
C. The Board of Directors of the Company and the special committee
thereof (the "COMMITTEE"), believing it advisable for the benefit of the
Company and its stockholders, has agreed to submit to the Company's stockholders
for their approval the Merger upon the terms and subject to the conditions set
forth herein.
D. Concurrently with the execution and delivery of this Agreement,
Parent and Merger Sub are entering into Securities Purchase Agreements with
Santa Fe Energy Resources, Inc., a Delaware corporation ("SANTA FE"), and The
Prudential Insurance Company of America, a New Jersey corporation, Pruco Life
Insurance Company, a New Jersey corporation, and Prusupply, Inc., an Arizona
corporation (collectively, "PRUDENTIAL") (the "SECURITIES PURCHASE
AGREEMENTS").
E. Parent, Merger Sub and the Company desire to make certain
representations, warranties and agreements in connection with the Merger.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.3), Merger Sub shall
be merged with and into the Company in accordance with this Agreement and the
separate corporate existence of Merger Sub shall thereupon cease (the
"MERGER"). The Company shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "SURVIVING CORPORATION"). The
Merger shall have the effects specified in the Delaware General Corporation Law
(the "DGCL").
<PAGE>
1.2 THE CLOSING. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "CLOSING") shall take place at the
offices of Akin, Gump, Strauss, Hauer & Feld, L.L.P., 4100 First City Center,
1700 Pacific Avenue, Dallas, Texas at 9:00 a.m., local time, on the first
business day immediately following the later of (a) the day on which the last to
be fulfilled or waived of the conditions set forth in Article 8 shall be
fulfilled or waived in accordance herewith (or such later date, not more than
ten days thereafter, as the parties may mutually agree upon) or (b) if
applicable, the twentieth calendar day after the mailing of the information
statement described in Section 7.3(b). The date on which the Closing occurs is
hereinafter referred to as the "CLOSING DATE".
1.3 EFFECTIVE TIME. If all the conditions to the Merger set forth
in Article 8 shall have been fulfilled or waived in accordance herewith and this
Agreement shall not have been terminated as provided in Article 9, the parties
hereto shall cause a Certificate of Merger meeting the requirements of Section
251 of the DGCL to be properly executed and filed in accordance with such
Section on the Closing Date. The Merger shall become effective at the time of
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware in accordance with the DGCL or at such later time which the parties
hereto shall have agreed upon and designated in such filing as the effective
time of the Merger (the "EFFECTIVE TIME").
ARTICLE II
CERTIFICATE OF INCORPORATION AND
BY-LAWS OF THE SURVIVING CORPORATION
2.1 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation
of the Company in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation, until duly amended in
accordance with applicable law.
2.2 BY-LAWS. The By-laws of Merger Sub in effect immediately prior
to the Effective Time shall be the By-laws of the Surviving Corporation, until
duly amended in accordance with applicable law.
ARTICLE III
DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION
3.1 DIRECTORS. The directors of Merger Sub immediately prior to the
Effective Time shall be directors of the Surviving Corporation as of the
Effective Time, unless and until thereafter changed in accordance with the DGCL
and the Surviving Corporation's Certificate of Incorporation and By-laws.
3.2 OFFICERS. The officers of the Company immediately prior to the
Effective Time shall be the officers of the Surviving Corporation as of the
Effective Time, unless and until
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thereafter changed in accordance with the DGCL and the Surviving Corporation's
Certificate of Incorporation and By-laws.
ARTICLE IV
CONVERSION OF COMPANY STOCK; COMPANY OPTIONS
4.1 CONVERSION OF COMPANY STOCK. Subject to the terms and
conditions of this Agreement, at the Effective Time, by virtue of the Merger and
without any action on the part of Parent, Merger Sub, the Company or the holder
of any of the following securities:
(a) Each share of the common stock, $1.00 par value, of Merger Sub
issued and outstanding immediately prior to the Effective Time shall be
converted into and become one validly issued, fully paid and nonassessable share
of common stock, $.01 par value, of the Surviving Corporation.
(b) Each share of the common stock, $.01 par value, of the Company
(the "COMPANY COMMON STOCK") issued and outstanding immediately prior to the
Effective Time (other than shares of Company Common Stock to be canceled
pursuant to Section 4.1(c) hereof and shares of Company Common Stock held by any
holder who shall have properly exercised, and not withdrawn or lost, appraisal
rights under the DGCL) shall be converted into and become a right to receive
$2.75 in cash, without any interest thereon (the "PURCHASE PRICE").
(c) Each share of Company Common Stock issued and held in the
Company's treasury (or beneficially owned by Parent or its subsidiaries,
including, without limitation, shares of Company Common Stock held in the "HP
TRUST," as defined in, and as to which a beneficial interest is acquired by
Parent or Merger Sub pursuant to, the Securities Purchase Agreement among
Parent, Merger Sub and Prudential) at the Effective Time shall cease to be
outstanding and shall be cancelled and retired without payment of any
consideration therefor.
(d) Each share of Senior Cumulative Preferred Stock, Series A (the
"SERIES A PREFERRED") and Junior Exercisable Automatically Convertible
Preferred Stock, Series B (the "SERIES B PREFERRED") of the Company issued and
outstanding immediately prior to the Effective Time shall remain unchanged and
outstanding and shall represent one share of Series A Preferred or Series B
Preferred, as the case may be, of the Surviving Corporation.
4.2 EXCHANGE OF CERTIFICATES REPRESENTING COMPANY COMMON STOCK.
(a) Prior to the Effective Time, Parent shall deposit, or shall
cause to be deposited, with an exchange agent selected by Parent, which shall be
Parent's Transfer Agent or such other party reasonably satisfactory to the
Company (the "EXCHANGE AGENT"), for the benefit of the holders of outstanding
shares of Company Common Stock, for payment in accordance with this Article 4, a
sum in cash equal to the product of (i) the
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Purchase Price and (ii) the number of shares of Company Common Stock issued and
outstanding as set forth in Section 5.4 (other than shares of Company Common
Stock to be canceled pursuant to Section 4.1(c) hereof and shares of Company
Common Stock held by any holder who shall have properly exercised, and not
withdrawn or lost, appraisal rights under the DGCL), such sum being hereinafter
referred to as the "EXCHANGE FUND", to be paid pursuant to this Section 4.2 in
exchange for outstanding shares of Company Common Stock.
(b) Promptly after the Effective Time, Parent shall cause the
Exchange Agent to mail to each holder of record of a certificate or certificates
representing outstanding shares of Company Common Stock (other than shares of
Company Common Stock to be canceled pursuant to Section 4.1(c) hereof and shares
of Company Common Stock held by any holder who shall have properly exercised,
and not withdrawn or lost, appraisal rights under the DGCL) (i) a letter of
transmittal which shall specify that delivery of such certificates shall be
effected, and risk of loss and title to the certificates shall pass, only upon
delivery of the certificates to the Exchange Agent and shall be in such form and
have such other provisions as Parent may reasonably specify and (ii)
instructions for use in effecting the surrender of the certificates in exchange
for payment of the Purchase Price per share hereunder. Upon surrender of a
certificate for cancellation to the Exchange Agent together with such letter of
transmittal, duly executed and completed in accordance with the instructions
thereto, the holder of such certificate shall be entitled to receive in exchange
therefor, in cash, without interest, the product of (x) the Purchase Price and
(y) the number of shares of Company Common Stock represented by such
certificates so surrendered by such holder, and the certificate so surrendered
shall forthwith be cancelled. In the event of a transfer of ownership of
Company Common Stock which is not registered in the transfer records of the
Company, the Exchange Agent may condition payment hereunder upon the surrender
of the certificate representing such Company Common Stock to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer and
to evidence that any applicable stock transfer taxes have been paid.
(c) At or after the Effective Time, there shall be no transfers on
the stock transfer books of the Company of the shares of Company Common Stock
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, certificates are presented to the Surviving Corporation, they
shall be exchanged for payment and cancelled in accordance with the procedures
set forth in this Article 4.
(d) Any portion of the Exchange Fund (including the proceeds of
any investments thereof) that remains unclaimed by the former stockholders of
the Company twelve (12) months after the Effective Time shall, at the option of
the Surviving Corporation, be delivered to the Surviving Corporation. Any
former stockholders of the Company who have not theretofore complied with this
Article 4 shall thereafter look only to the Surviving Corporation for payment of
the Purchase Price in respect of each share of Company Common Stock that such
stockholder holds as determined pursuant to this Agreement, in each case,
without any interest thereon.
(e) None of Parent, the Company, the Exchange Agent or any other
person shall be liable to any former holder of shares of Company Common Stock
for any amount
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<PAGE>
properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(f) If any certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such
certificate to be lost, stolen or destroyed and, if required by the Surviving
Corporation, the posting by such person of a bond in such reasonable amount as
the Surviving Corporation may direct as indemnity against any claim that may be
made against it with respect to such certificate, the Exchange Agent will pay in
respect of such lost, stolen or destroyed certificate an amount of cash, without
interest, equal to the product of (x) the Purchase Price and (y) the number of
shares of Company Common Stock previously represented by such lost, stolen or
destroyed certificate.
4.3 DISSENTING SHARES.
(a) Notwithstanding anything in this Agreement to the contrary,
shares of Company Common Stock that are held by any record holder who has not
voted in favor of the Merger or consented thereto in writing and who has
demanded appraisal rights in accordance with Section 262 of the DGCL (the
"DISSENTING SHARES") shall not be converted into the right to receive the
Purchase Price hereunder but shall instead become the right to receive such
consideration as may be determined to be due in respect of such Dissenting
Shares pursuant to the DGCL; PROVIDED, HOWEVER, that any holder of
Dissenting Shares who shall have failed to perfect, or shall have withdrawn or
lost, his rights to appraisal of such Dissenting Shares, in each case under the
DGCL, shall forfeit the right to appraisal of such Dissenting Shares, and each
of such Dissenting Shares shall be deemed to have been converted into the right
to receive, as of the Effective Time, the Purchase Price in accordance with
Article 4, without interest. Notwithstanding anything contained in this Section
4.3, if (i) the Merger is rescinded or abandoned or (ii) if the stockholders of
the Company revoke the authority to effect the Merger, then the right of any
stockholder to receive such consideration as may be determined to be due in
respect of such Dissenting Shares pursuant to the DGCL shall cease. The
Surviving Corporation shall comply with all of its obligations under the DGCL
with respect to holders of Dissenting Shares.
(b) The Company shall give Parent (i) prompt notice of any demands
for appraisal, and any withdrawals of such demands, received by the Company and
any other related instruments served pursuant to the DGCL and received by the
Company and (ii) the opportunity to direct all negotiations and proceedings with
respect to demands for appraisal under the DGCL. The Company shall not, except
with the prior written consent of Parent, make any payment with respect to any
demands for appraisal or offer to settle any such demands.
4.4 COMPANY OPTIONS. The Company shall use all reasonable efforts
to provide that, immediately prior to the Effective Time, each outstanding
option to purchase shares of Company Common Stock, each stock appreciation
right, and each limited stock appreciation right or other similar right
(individually, a "COMPANY OPTION" and collectively, the "COMPANY OPTIONS")
granted under the Hadson Corporation 1992 Equity Incentive Plan, as amended and
restated as of March 9, 1994, the Nonstatutory Stock Option Agreement
-5-
<PAGE>
dated December 13, 1993, and the Nonstatutory Stock Option Agreement dated
December 14, 1993 (collectively, the "COMPANY OPTION PLANS"), whether or not
exercisable, shall be cancelled and surrendered to the Company and each holder
of each such outstanding option, outstanding stock appreciation right and
outstanding limited stock appreciation right or other outstanding similar right
shall be entitled to receive from the Company, upon surrender of the applicable
right, with respect to each such right, an amount in cash equal to the excess,
if any, of the Purchase Price over the exercise price per share of Company
Common Stock of such right. As used herein, the term "OPTION CASH-OUT AMOUNT"
shall mean the sum of (a) all payments made by the Company to effect the
cancellation and surrender of Company Options pursuant to this Section 4.4 and
(b) the amount by which (i) the product of $2.75 multiplied by the number of
shares of Company Common Stock issued upon exercise of Company Options exercised
after the date of this Agreement and prior to the Effective Time exceeds (ii)
the sum of all payments received by the Company upon the exercise of such
Company Options during such period.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure letter delivered by or on behalf of
the Company to Parent at or prior to the execution hereof (the "COMPANY
DISCLOSURE LETTER"), the Company represents and warrants to Parent as follows:
5.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware. The Company is duly licensed or qualified to
do business as a foreign corporation and is in good standing under the laws of
each other state of the United States in which the character of the properties
owned or leased by it therein or in which the transaction of its business makes
such qualification necessary, except where the failure to be so licensed or
qualified or be in good standing would not, individually or in the aggregate, be
reasonably expected to have a material adverse effect on the business, assets,
liabilities, financial condition or prospects (the "CONDITION") of the Company
and its Subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT"). The
Company has all requisite corporate power and authority to own, operate and
lease its properties and carry on its business as now conducted. The copies of
the Company's Restated Certificate of Incorporation, dated December 14, 1993, as
amended by the Certificate of Amendment to Restated Certificate of
Incorporation, dated November 21, 1994, and By-laws, dated December 14, 1993,
previously delivered to Parent are true and correct.
5.2 COMPLIANCE WITH LAW. Neither the Company nor any of its
Subsidiaries is in violation of any order of any court, governmental authority
or arbitration board or tribunal, or any law, ordinance, governmental rule or
regulation to which the Company or any of its Subsidiaries or any of their
respective properties or assets is subject, except where such violation would
not, individually or in the aggregate, have a Material Adverse Effect. The
Company and its Subsidiaries (a) have made all required filings, applications,
notifications and reports, and amendments thereto, with all federal, state,
local or foreign governmental
-6-
<PAGE>
authorities (the "FILINGS") and (b) possess all licenses, permits, ordinances,
franchises, certificates, and other authorizations of any federal, state, local
or foreign governmental authority (the "LICENSES") which are necessary to the
ownership or operation of their business as currently conducted or to collect
the current fees, prices, rates or other charges levied in connection with their
business and all such Filings and Licenses are in full force and effect and no
proceeding is pending or, to the Company's knowledge, threatened seeking the
revocation or limitation of any such Filing or License, except where the failure
to make any Filing or possess any License or the failure of any such Filing or
License to be in such force and effect or the revocation or limitation of such
Filing or License would not, individually or in the aggregate, have a Material
Adverse Effect.
5.3 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS.
(a) The Company has the requisite corporate power and authority to
execute and deliver this Agreement and all agreements and documents contemplated
hereby. Upon receipt of the approval of this Agreement and the transactions
contemplated hereby by the holders of a majority of the outstanding shares of
Company Common Stock, the consummation by the Company of the transactions
contemplated hereby will have been duly authorized by all requisite corporate
action. This Agreement constitutes the valid and legally binding obligation of
the Company, enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights and general principles of equity.
(b) The Board of Directors of the Company has taken all necessary
action to approve the transactions contemplated by this Agreement and the
Securities Purchase Agreements pursuant to Section 203(a) of the DGCL.
5.4 CAPITALIZATION. The authorized capital stock of the Company
consists of 50,000,000 shares of Company Common Stock, and 25,000,000 shares of
preferred stock, par value $.01 per share (the "COMPANY PREFERRED STOCK"),
5,193,250 shares of which have been designated Series A Preferred and 4,983,180
shares of which have been designated Series B Preferred. As of the date hereof,
there are 25,690,890 shares of Company Common Stock issued and outstanding,
2,271,496 shares of Series A Preferred issued and outstanding and 4,981,743
shares of Series B Preferred issued and outstanding. No additional shares of
capital stock of the Company have been issued or will be issued prior to the
Effective Time except such shares of Company Common Stock as may be issued upon
exercise of Company Options or shares of Series B Preferred outstanding as of
the date hereof. All such issued and outstanding shares of Company Common Stock
and Company Preferred Stock are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. Other than as contemplated by this
Agreement, the Company Option Plans or the Series B Preferred, there are not at
the date of this Agreement any existing options, warrants, calls, subscriptions,
convertible securities, or other rights, agreements or commitments which
obligate the Company or any of its Subsidiaries to issue, transfer or sell any
shares of capital stock of the Company or any of its Subsidiaries. As of the
date of this Agreement, there are reserved for issuance, and issuable upon or
otherwise deliverable in connection with the exercise of outstanding Company
Options, the number of shares of Company Common Stock set forth in the Company
Disclosure Letter; since that date, no Company Options
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have been granted under the Company Option Plans and no new option plans have
been authorized or adopted and no options have otherwise been granted. After
the Effective Time, the Surviving Corporation will have no obligation to issue,
transfer or sell any shares of capital stock of the Company or the Surviving
Corporation pursuant to any Company Benefit Plan (as defined in Section 5.12)
except pursuant to such Company Options, if any, as shall not be cancelled and
terminated prior to the Closing. Except for the Company's obligations under the
Trust Agreement dated as of December 14, 1993 among the Company, Prudential and
certain other parties (the "H/P TRUST AGREEMENT"), there are no outstanding
obligations of the Company or any of its Subsidiaries to purchase, redeem or
otherwise acquire any shares of Company Common Stock, any capital voting
securities or securities convertible into or exchangeable for capital stock or
voting securities of the Company. The Exercise Price (as such term is used in
the Company's Restated Certificate of Incorporation, dated December 14, 1993, as
amended through the date of this Agreement) of the Series B Preferred is $3.225
per share of Company Common Stock.
5.5 SUBSIDIARIES. Each of the Company's subsidiaries (each a
"SUBSIDIARY," and collectively the "SUBSIDIARIES") is a corporation or
partnership duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization, has the corporate or
partnership power and authority to own its properties and to carry on its
business as it is now being conducted, is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the ownership of
its property or the conduct of its business requires such qualification, except
for jurisdictions in which failure to be so licensed or qualified or to be in
good standing, individually or in the aggregate, would not have a Material
Adverse Effect. Each of the outstanding shares of capital stock of each of the
Subsidiaries is duly authorized, validly issued, fully paid and nonassessable,
was not issued in violation of any preemptive rights and is owned, directly or
indirectly, by the Company free and clear of all liens, pledges, security
interests, claims or other encumbrances. The following information for each
Subsidiary has been previously provided to Parent, if applicable: (a) its name
and jurisdiction of incorporation or organization; (b)its authorized capital
stock or other ownership interests; and (c) the number of issued and outstanding
shares of capital stock or other ownership interests owned of record or
beneficially by the Company.
5.6 RELATED PARTY TRANSACTIONS. There are no contracts,
arrangements or transactions currently in effect between the Company or any of
its Subsidiaries, on the one hand, and Santa Fe, Prudential, or any officer,
director or 5% stockholder of the Company, or any affiliate of the foregoing
persons, on the other hand, except as set forth in the Company Reports (as
defined in Section 5.9).
5.7 OTHER INTERESTS. Except for interests in the Subsidiaries,
neither the Company nor any Subsidiary owns directly or indirectly any interest
or investment in any corporation, partnership, joint venture, business, trust or
entity.
5.8 NO VIOLATION. Neither the execution and delivery by the Company
of this Agreement nor the consummation by the Company of the transactions
contemplated hereby in accordance with the terms hereof will: (a) result in a
breach of any provisions of the certificate of incorporation or By-laws (or
similar governing documents) of the Company
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or any Subsidiary; (b) result in a breach or violation of, a default under, or
the triggering of any payment or other material obligations pursuant to, or
accelerate vesting under, any of its existing Company Stock Option Plans, or any
grant or award made under any of the foregoing by reason of, in whole or in
part, the consummation of the Merger; (c) violate or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
or in a right of termination or cancellation of, or accelerate the performance
required by, or give rise to any payments or compensation under, or result in
the creation of any lien, security interest, charge or encumbrance upon any of
the properties of the Company or its Subsidiaries under, or result in being
declared void, voidable, or without further binding effect, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust
or any material license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation to which the Company or any of its
Subsidiaries is a party, or by which the Company or any of its Subsidiaries or
any of their properties is bound or affected, except for any of the foregoing
matters which would not, individually or in the aggregate, have a Material
Adverse Effect and will not impose any liability on either Parent or Merger Sub;
or (d) violate any order, writ, injunction, decree, law, statute, rule or
regulation applicable to the Company or any of its Subsidiaries or any of their
respective properties or assets, except for violations which would not,
individually or in the aggregate, have a Material Adverse Effect or prevent or
delay consummation of the transactions contemplated hereby; (e) other than the
filings provided for in Article I and filings required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR ACT") or the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") (collectively
the "REGULATORY FILINGS"), require any consent, approval or authorization of,
or declaration, filing or registration with, any domestic governmental or
regulatory authority, or any other person or entity, the failure to obtain or
make which would, individually or in the aggregate, have a Material Adverse
Effect or prevent or delay consummation of the transactions contemplated hereby.
5.9 SEC DOCUMENTS.
(a) The Company has delivered to Parent each registration
statement, report (including any report on Form 8-K), proxy statement or
information statement prepared by it since December 31, 1993 and filed with the
Securities and Exchange Commission (the "SEC") pursuant to the Exchange Act,
including, without limitation, (i) its Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, (ii) its Quarterly Reports on Form 10-Q for the
periods ended March 31, June 30 and September 30, 1994 and (iii) its Proxy
Statement for the Annual Meeting of Stockholders held May 26, 1994, each in the
form (including exhibits and any amendments thereto) filed with the SEC
(collectively, the "COMPANY REPORTS"). As of their respective dates, the
Company Reports (including, without limitation, any financial statements or
schedules included or incorporated by reference therein) (1) were prepared in
all material respects in accordance with the applicable requirements of the
Securities Act of 1933, as amended (the "SECURITIES ACT"), the Exchange Act,
and the respective rules and regulations promulgated thereunder and (2) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
Each of the consolidated
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balance sheets of the Company included in or incorporated by reference into the
Company Reports (including the related notes and schedules) fairly presents the
consolidated financial position of the Company and its Subsidiaries as of its
date, and each of the consolidated statements of income, retained earnings and
cash flows of the Company included in or incorporated by reference into the
Company Reports (including any related notes and schedules) fairly presents the
results of operations, retained earnings or cash flows, as the case may be, of
the Company and the Subsidiaries for the periods set forth therein (subject, in
the case of unaudited statements, to normal year-end audit adjustments which
would not be material in amount or effect), in each case in accordance with
generally accepted accounting principles ("GAAP") consistently applied during
the periods involved, except as may be noted therein.
(b) In addition, the Company has delivered to Parent an unaudited
consolidated balance sheet of the Company as of December 31, 1994 and an
unaudited consolidated statement of income of the Company for the year then
ended, in each case without notes (collectively, the "UNAUDITED 1994
STATEMENTS"). The Unaudited 1994 Statements have been prepared from the
Company's accounting records using accounting methods consistent with those used
to prepare the financial statements included in the Company Reports and, to the
Company's knowledge, fairly present in all material respects the unaudited
consolidated financial position and unaudited results of operations of the
Company and its Subsidiaries as of and for the year ended December 31, 1994.
(c) Except as and to the extent set forth (i) on the consolidated
balance sheet of the Company and its Subsidiaries at September 30, 1994,
including all notes thereto, (ii) on the consolidated balance sheet included in
the Unaudited 1994 Statements or (iii) in the Company Reports filed with the SEC
prior to the date of this Agreement, neither the Company nor any of its
Subsidiaries has any material liabilities or obligations (whether accrued,
absolute, contingent or otherwise), except liabilities arising in the ordinary
course of business since such date.
5.10 LITIGATION. Except as disclosed in the Company Reports filed
with the SEC prior to the date of this Agreement, there are no actions, suits or
proceedings pending against the Company or any of its Subsidiaries or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries or any of their respective properties or assets, at law or in
equity, or before or by any federal or state commission, board, bureau, agency
or instrumentality, that (a) if determined adversely, would reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect,
(b) if determined adversely, would reasonably be expected to prevent or delay,
in any material respect, the consummation of the transactions contemplated by
this Agreement or (c) is a stockholder's derivative action on behalf of the
Company against any of its directors, officers, employees or agents. Except as
disclosed in the Company Reports filed with the SEC prior to the date of this
Agreement, neither the Company nor any of its Subsidiaries is subject to any
order, writ, injunction or decree which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect or prevent or delay the
consummation of the transactions contemplated hereby.
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5.11 ABSENCE OF CERTAIN CHANGES. Except as disclosed in the Company
Reports filed with the SEC prior to the date of this Agreement, since December
31, 1993, each of the Company and its Subsidiaries has conducted its business
only in the ordinary course and there has not been (a) any event or change with
respect to the Company and its Subsidiaries having or which would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to its capital stock or repurchase or redemption of
shares of its capital stock, (c) any material change in its accounting
principles, practices or methods, (d)any damage, destruction or loss, whether or
not covered by insurance, resulting in a Material Adverse Effect, or any
deterioration in the operating condition of the assets of the Company and its
Subsidiaries resulting in a Material Adverse Effect, (e) any change or any
threat of change in the Company's relations with, or any loss or threat of loss
of, any of the Company's important suppliers or customers which would reasonably
be expected to have a Material Adverse Effect, (f) any termination, cancellation
or waiver, or any material uncured violation, of any contract or other right
material to the operation of the business of the Company and its Subsidiaries,
taken as a whole, or (g) any payment in respect of indebtedness of the Company
held by Prudential or Company Preferred Stock.
5.12 CERTAIN EMPLOYEE PLANS.
(a) Each employee benefit or compensation plan or arrangement,
including each "employee benefit plan," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
maintained by the Company or any of its Subsidiaries (the "COMPANY BENEFIT
PLANS") complies, and has been administered in accordance, with all applicable
requirements of law. All reports, returns and similar documents with respect to
the Company Benefit Plans required to be filed with any governmental entity or
distributed to any Company Benefit Plan participant have been duly and timely
filed or distributed. There are no pending or, to the Company's knowledge,
threatened investigations by any governmental entity, termination proceedings or
other claims (except claims for benefits payable in the normal operation of the
Company Benefit Plans), suits or proceedings against or involving any Company
Benefit Plan or asserting any rights or claims to benefits under any Company
Benefit Plan that would give rise to any liability. The Company Benefit Plans
are listed in the Company Disclosure Letter, and copies and summary plan
descriptions of all such plans have previously been provided to Parent.
(b) With respect to each Company Benefit Plan intended to qualify
under Section 401(a) of the Internal Revenue Code of 1986, as amended (the
"CODE"), (i) a favorable determination letter has been issued by the Internal
Revenue Service (the "IRS") with respect to the qualification of each Company
Benefit Plan and (ii) no "reportable event" or "prohibited transaction" (as such
terms are defined in ERISA) or termination has occurred under circumstances
which present a risk of liability by the Company or any of its Subsidiaries to
any governmental entity or other person, including a Company Benefit Plan. Each
Company Benefit Plan which is subject to Part 3 of Subtitle B of Title I of
ERISA or Section 412 of the Code has been maintained in compliance with the
minimum funding standards of ERISA and the Code and no such Company Benefit Plan
has incurred any
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"accumulated funding deficiency" (as defined in Section 412 of the Code and
Section 302 of ERISA), whether or not waived.
(c) All contributions to, and payments from, the Company Benefit
Plans required to be made in accordance with the Company Benefit Plans have been
timely made.
(d) Except as provided in the Hadson Corporation Severance
Benefits Plan or in individual employment agreements disclosed to Parent and
Merger Sub in the Company Disclosure Letter, neither the Company nor any of its
Subsidiaries maintains or contributes to or has an obligation to contribute to
any welfare plan, within the meaning of Section 3(1) of ERISA, which provides,
or has any liability to provide, life insurance, medical or other employee
welfare benefits to or on behalf of any employee or former employee upon his or
her retirement or termination of employment, except as may be required by
federal statute or such benefits that may be unilaterally terminated by the
Company or one of its Subsidiaries at any time.
(e) Neither the Company nor any of its Subsidiaries or any person
or entity that is treated as a single employer with the Company or any of its
Subsidiaries within the meaning of Section 414 of the Code maintains,
contributes to or has an obligation to contribute to, or any liability arising
under a plan that is subject to Title IV of ERISA, including a multiemployer
plan, within the meaning of Section 4001(a)(3) of ERISA.
5.13 LABOR MATTERS.
(a) None of the Company or any of its Subsidiaries is a party to, or
bound by, any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization. There is no unfair
labor practice or labor arbitration proceeding pending or, to the knowledge of
the Company, threatened against the Company or its Subsidiaries relating to
their business. To the knowledge of the Company, there are no organizational
efforts with respect to the formation of a collective bargaining unit presently
being made or threatened involving employees of the Company or any of its
Subsidiaries.
(b) The Company has delivered to Parent copies of all employment
agreements, consulting agreements, severance agreements, bonus and incentive
plans, profit-sharing plans and other agreements, plans or arrangements with
respect to compensation of the employees of the Company and its Subsidiaries
(the "COMPENSATION ARRANGEMENTS"). The Merger will not accelerate or
otherwise give rise to payments pursuant to the Compensation Arrangements. The
Compensation Arrangements are listed in the Company Disclosure Letter.
5.14 ENVIRONMENTAL MATTERS.
(a) For the purposes of this Agreement:
"ASSETS" means all real or personal property owned or leased by
the Company or as to which an easement exists in favor of the Company.
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"ENVIRONMENTAL MATTERS" means any matter arising out of, relating
to or resulting from pollution, contamination, protection of the environment,
human health or safety, health or safety of employees, sanitation and any
matters relating to emissions, discharges, disseminations, releases or
threatened releases, of Hazardous Materials into the air (indoor and outdoor)
surface water, groundwater, soil, land surface or subsurface, buildings,
facilities, real or personal property or fixtures or otherwise arising out of,
resulting from or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, handling, release or threatened release
of Hazardous Materials.
"ENVIRONMENTAL COSTS" means, without limitation, any actual or
potential cleanup costs, remediation, removal, or other response costs (which
without limitation shall include costs to cause the Company to come into
compliance with Environmental Laws), investigation costs (including without
limitation fees of consultants, counsel and other experts in connection with any
environmental investigation, testing, audits or studies), losses, liabilities or
obligations (including without limitation, liabilities or obligations under any
lease or other contract), payments, damages (including any actual, punitive or
consequential damages under any statutory laws, common law cause of action or
contractual obligations or otherwise, including charges (i) of third parties for
personal injury or property damage or (ii) to natural resources), civil or
criminal fines or penalties, judgments, and amounts paid in settlement arising
out of or relating to or resulting from any Environmental Matters.
"ENVIRONMENTAL LAWS" means, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Sections 9601
ET SEQ., the Emergency Planning and Community Right-to-Know Act of 1986, 42
U.S.C. Sections 1101 ET SEQ., the Resource Conservation and Recovery Act, 42
U.S.C. Sections 6901 ET SEQ., the Toxic Substances Control Act, 15
U.S.C. Sections 2601 ET SEQ., the Federal Insecticide, Fungicide, and
Rodenticide Act, 7 U.S.C. Sections 136 ET SEQ., the Clean Air Act, 42 U.S.C.
Sections 7401 ET SEQ.,the Clean Water Act (Federal Water Pollution Control
Act), 33 U.S.C. Sections 1251 ET SEQ., the Safe Drinking Water Act, 42 U.S.C.
Sections 300f ET SEQ., the Occupational Safety and Health Act, 29 U.S.C.
Sections 641 ET SEQ., the Hazardous Materials Transportation Act, 49 U.S.C.
Sections 1801 ET SEQ., as any of the above statutes have been or may be amended
from time to time, all rules and regulations promulgated pursuant to any of the
above statutes, and any other foreign, federal, state or local law, statute,
ordinance, rule or regulation governing Environmental Matters, as the same have
been or may be amended from time to time, including any common law cause of
action providing any right or remedy with respect to Environmental Matters,
all indemnity agreements and other contractual obligations (including, without
limitation, leases, asset purchase and merger agreements) relating to
environmental matters, and all applicable judicial and administrative decisions,
orders, and decrees relating to Environmental Matters.
"HAZARDOUS MATERIALS" means any pollutants, contaminants or
hazardous or toxic substances, materials, wastes, constituents or chemicals that
are regulated by, or from the basis for liability under, any Environmental Laws.
(b) The Company and each of its Subsidiaries at all times has been
operated, and is, in compliance with all applicable Environmental Laws except
for such
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failures to comply which would not reasonably be expected to result in a
Material Adverse Effect.
(c) The Company has obtained, and is in compliance with, all
permits, licenses, authorizations, registrations and other governmental consents
("ENVIRONMENTAL PERMITS") required to be obtained by it by applicable
Environmental Laws, including, without limitation, those regulating emissions,
discharges, or releases of Hazardous Materials, or the use, storage, treatment,
transportation, release, emission and disposal of raw materials, by-products,
wastes and other substances used or produced by or otherwise relating to its
business except for such failures to comply which would not reasonably be
expected to result in a Material Adverse Effect.
(d) All such Environmental Permits are in full force and effect,
and the Company has made all appropriate filings for issuance or renewal of such
Environmental Permits.
(e) All of the Assets of the Company are free of any Hazardous
Materials (except those authorized pursuant to and in accordance with
Environmental Permits held by the Company) and free of all contamination arising
from, relating to or resulting from any such Hazardous Materials except for such
failures to comply which would not reasonably be expected to result in a
Material Adverse Effect. Furthermore, (i) there are no polychlorinated
byphenyls ("PCBs"), mercury or PCB or mercury containing equipment at, on,
about, under or within any Assets owned, operated or controlled in whole or in
part by the Company or its Subsidiaries and (ii) all of the Company's Assets are
free of any groundwater contamination arising from, relating to or resulting
from any Hazardous Materials.
(f) There are no claims, notices, civil, criminal or
administrative actions, suits, hearings, investigations, inquiries or
proceedings pending or threatened that are based on or related to any
Environmental Matters or the failure to have any required Environmental Permits.
(g) The Company has not used any waste disposal site, or otherwise
disposed of, transported or arranged for the transportation of, any Hazardous
Materials to any place or location (including any place or location owned or
operated by the Company), or in violation of any Environmental Laws.
(h) There are no underground or above ground storage tanks,
incinerators or surface impoundments at, on, about, under or within any of the
Assets, or any portion thereof.
(i) Neither the Company nor any of its Subsidiaries has received
any notice or other communication asserting that it may be a potentially
responsible party, or otherwise liable in connection with, any waste disposal
site or other location used for the disposal of any Hazardous Materials or
notice of any failure of the Company or any of its Subsidiaries to comply in any
material respect with any Environmental Law or the requirements of any
Environmental Permit.
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(j) There are no past or present conditions, events,
circumstances, facts, activities, practices, incidents, actions, omissions or
plans: (i) that may interfere with or prevent continued compliance by the
Company with Environmental Laws and the requirements of Environmental Permits,
(ii) that may give rise to any liability or other obligation under any
Environmental Laws that may require the Company to incur any actual or potential
Environmental Costs or (iii) that may form the basis of any claim, action, suit,
proceeding, hearing, investigation or inquiry against or involving the Company
based on or related to any Environmental Matter or which, in each case, could
require the Company to incur any Environmental Costs which would reasonably be
expected to have a Material Adverse Effect.
(k) No lien exists, and no condition exists which could result in
the filing of a lien, against any property of the Company under any
Environmental Law or relating to any Environmental Matters.
(l) There has been no release or other dissemination at any time
of any Hazardous Materials at, on, or about, under or within any real property
currently or formerly owned or leased by the Company or any predecessor of the
Company or as to which an easement in favor of the Company currently exists or
formerly existed or any real properties operated or controlled by the Company or
any predecessor of the Company (other than pursuant to and in accordance with
permits held by the Company or any such predecessor) which was required to be
reported to any governmental authority pursuant to any Environmental Law and
which would reasonably be expected to have a Material Adverse Effect.
(m) The Company has not been requested or required by any
governmental authority to perform any investigatory or remedial activity or
other action in connection with any Environmental Matter which would reasonably
be expected to have a Material Adverse Effect.
5.15 TITLE. Except as described in the Company Reports, the Company
and its Subsidiaries have good and defensible title to all real and personal
property owned by them and reflected on the Company's consolidated balance sheet
as of September 30, 1994 included in the Company Reports free and clear of any
and all liens, security interests, pledges, claims and other encumbrances (each,
a "LIEN") other than Permitted Encumbrances, as defined below, except for
defects in title and Liens which, individually or in the aggregate, would not
have a Material Adverse Effect. "PERMITTED ENCUMBRANCES" shall mean (a)
inchoate Liens securing payments to mechanics and materialmen for materials,
labor and supplies furnished in the normal course of business of the Company and
its Subsidiaries and Liens securing payments of taxes or assessments, that are,
in the case of each Lien described in this clause (a), not yet delinquent, or,
if delinquent, that are being contested in good faith in the normal course of
business, (b) preferential rights to purchase and required third party consents
to assignments or similar agreements, except for those rights that become
exercisable upon, or consents required to be obtained prior to, consummation of
the Merger or the transactions contemplated hereby and those rights and consents
that remain unsatisfied with respect to any prior transaction, (c) all
applicable laws, rules, regulations and orders of any municipality or
governmental, tribal, statutory or public
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authority, (d) the terms and conditions of all documents and agreements that
create the easements, licenses, permits, rights-of-way, surface leasehold
interests, fee interests, privileges, franchises, servitudes, prescriptions,
surface use rights under oil and gas leases and unitization agreements and
similar property interests reasonably necessary for operating and maintaining,
on the lands where located, the assets of the Company and its Subsidiaries (the
"EASEMENTS"), (e) the terms and conditions of the documents that transfer the
Easements and other similar documents or agreements under which the subject
assets are held to the extent same do not have a material adverse effect on the
ownership, use, maintenance or operation by the Company or its Subsidiaries of
the subject assets to which they pertain, (f) the terms and conditions of all
operating agreements, participation agreements, maintenance agreements and other
agreements to which any of such assets or properties are subject, to the extent
same do not have a material adverse effect on the ownership, use, maintenance or
operation by the Company or its Subsidiaries of the subject assets to which they
pertain; and (g) the fact that certain portions of the assets of the Company or
its Subsidiaries may be located on lands pursuant to rights to use the surface
of such lands under oil and gas leases and/or unitization agreements. To the
Company's knowledge, none of the Permitted Encumbrances materially interferes
with the use of any of the Company's assets in the conduct of the Company's
business in the ordinary course, nor do any of the Permitted Encumbrances
materially detract from the value of such assets as reflected on the Company's
financial statements included in the Company Reports.
5.16 MAINTENANCE OF FACILITIES. All physical facilities of the
Company and its Subsidiaries which are material to the Company have been
maintained in accordance with the Company's customary maintenance practices and
are in a state of repair (normal wear and tear accepted) adequate for the normal
use of such facilities in the ordinary conduct of the business of the Company
and its Subsidiaries.
5.17 INSURANCE. The Company Disclosure Letter lists all policies of
liability and property and casualty insurance in effect covering the Company and
its Subsidiaries (specifying the insurer, type of insurance, policy number and
pending claims thereunder with respect to the Company which are, in the
aggregate, material). There are no notices of any pending or threatened
terminations, or expectations of premium increases (other than increases of
general applicability), with respect to any of such insurance policies. The
Company is in substantial compliance with all conditions contained therein, and
the coverage of none of such policies will be terminated or adversely affected
by the transactions contemplated by this Agreement.
5.18 FAIRNESS OPINION. The Board of Directors of the Company has
received an opinion of Dillon, Read & Co. Inc. to the effect that, as of the
date hereof, the Merger consideration to be received by the holders of Company
Common Stock other than Santa Fe and Prudential is fair to such holders.
5.19 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Company nor any
of its Subsidiaries is a "public utility company," a "holding company" or a
"subsidiary company" of a "holding company," or an "affiliate" of any of the
foregoing, in each case within the meaning of the Public Utility Holding Company
Act of 1935, as amended, or the rules and
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regulations of the SEC promulgated thereunder. Neither the Company nor any of
its Subsidiaries is subject to regulation as a utility under applicable state
law.
5.20 TAXES.
(a) For purposes of this Section 5.20 the following terms shall
have the following meanings:
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"TAX" (and, with correlative meaning, "TAXES" and "TAXABLE")
shall mean:
(i) any federal, state, local or foreign income, gross
receipts, windfall profits, severance, property, production, sales, use,
license, excise, franchise, employment, payroll, withholding, alternative
or add-on minimum, ad valorem, transfer, excise, stamp, or environmental
tax, or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or
penalty, addition to tax or additional amount imposed by any governmental
authority; and
(ii) liability of the Company or any Subsidiary for the
payment of amounts with respect to payments of a type described in clause
(i) as a result of being a member of an affiliated, consolidated, combined
or unitary group, or as a result of any obligation of the Company or any
subsidiary under a Tax Sharing Arrangement or Tax indemnity arrangement or
agreement.
"TAX RETURN" shall mean any return, report or similar statement
required to be filed with respect to any Tax (including any attached
schedules), including, without limitation, any information return, claim
for refund, amended return and declaration of estimated Tax.
"TAX SHARING ARRANGEMENT" shall mean any written or unwritten
agreement or arrangement for the allocation or payment of Tax liabilities
or payment for Tax benefits with respect to a consolidated, combined or
unitary Tax Return which Tax Return includes the Company or any
Subsidiary, and including, but not limited to, any tax indemnity
arrangement or agreement.
(b) All Tax Returns that are required to be filed on or before the
Closing Date by the Company or any of the Subsidiaries (including but not
limited to returns of any affiliated group of corporations filing consolidated
income tax returns of which the Company or Subsidiary was a member) have been or
will be correctly and accurately completed and timely filed with the appropriate
foreign, federal, state and local authorities and disclose all taxes required to
be paid by the Company and each Subsidiary for the period covered by the Tax
Return. All Taxes due from the Company or any Subsidiary or for which the
Company or any Subsidiary is liable with respect to all taxable years or any
portion thereof ending on or before the Closing Date have been fully and timely
paid or adequately reflected as an appropriate liability or reserve on the
Financial Statements even if they are
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being contested in good faith by appropriate proceedings. No payments are or
will be required to be made by the Company or any Subsidiary pursuant to any Tax
Sharing Agreement and all such Tax Sharing Agreements will be terminated with
respect to the Company and each Subsidiary as of the Closing Date to the extent
they would require payments to be made by the Company or any Subsidiary.
(c) None of such Tax Returns are under audit or examination by any
foreign, federal, state or local authority and there are no agreements or
waivers providing for an extension of time with respect to the assessment or
collection of any Tax against the Company or any of the Subsidiaries with
respect to any such Tax Return. For all taxable years or portions thereof
ending on or before the Closing Date, no assessment of Taxes has been made or
proposed by any taxing authority against the Company or any Subsidiary for which
the Company or any Subsidiary is liable. The Company has no knowledge of any
facts that if known to any taxing authority would likely result in the issuance
of a notice of proposed deficiency or similar notice to assess Taxes against the
Company or any Subsidiary. The statute of limitations for the collection of
federal, state, local and foreign income taxes has been extended only with
respect to the jurisdictions and years in the Company Disclosure Letter. The
statute of limitations for the payment or collection of gross receipts, sales
and use taxes has been extended only with respect to the jurisdictions and years
set forth in the Company Disclosure Letter.
(d) All Taxes assessed and due and owing from or against the
Company or any of the Subsidiaries on or before the Closing Date (including, but
not limited to, ad valorem Taxes) have been or will be timely paid in full or
accrued on the Financial Statements on or before the Closing Date.
(e) All withholding Tax and Tax deposit requirements imposed on
the Company or any of the Subsidiaries for any periods ending on or before the
Closing Date have been or will be timely satisfied in full or accrued on the
Financial Statements on or before the Closing Date.
(f) There has been no ownership change, as defined in Section
382(g) of the Code (an "OWNERSHIP CHANGE"), with respect to the Company and
Subsidiaries since December 16, 1992.
(g) The combined Net Operating Loss Carryforward as determined for
federal income tax purposes ("NOL") of the Company and its Subsidiaries as of
December 31, 1994 is approximately $120,000,000 of which approximately
$109,000,000 is subject to limitation under Section 382 of the Code and
approximately $11,000,000 is not currently subject to limitation under Section
382 of the Code. The Company and its subsidiaries currently have some NOL which
is not subject to the SRLY Rules of Regulation Section 1.1502-21.
(h) The combined Net Operating Loss Carryforward as determined for
federal alternative minimum tax purposes ("AMTNOL") of the Company and its
Subsidiaries as of December 31, 1994 is approximately $108,000,000 of which
approximately $98,000,000
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is subject to limitation under Section 382 of the Code and approximately
$10,000,000 is not currently subject to limitation under Section 382 of the
Code.
(i) The annual limitation for use of the NOL by the Company and
its Subsidiaries under Section 382 of the Code is at least $4,451,852. The
limitation under Section 382 of the Code applies to the Affiliated Group of
Corporations (as defined in Section 1504 of the Code) as a whole and no
Subsidiary is subject to a separate limitation under Section 382 of the Code or
the Consolidated Return Regulations issued under Section 1502 of the Code
including any proposed regulations.
(j) The annual limitation for use of the AMTNOL by the Company and
its Subsidiaries under Section 382 of the Code is at least $4,451,852. The
limitation under Section 382 of the Code applies to the Affiliated Group of
Corporations (as defined in Section 1504 of the Code) as a whole and no
Subsidiary is subject to a separate limitation under Section 382 of the Code or
the Consolidated Return Regulations issued under Section 1502 of the Code
including any proposed regulations.
(k) The Company and its Subsidiaries have made a proper election
under Section 382(1)(5)(H) of the Code with respect to the ownership changes on
December 16, 1992 and Section 382(l)(5)(D) of the Code will not apply to the
Company and its Subsidiaries with respect to any ownership change.
(l) The net unrealized built in gain of the Company and the
Subsidiaries for purposes of Section 382(h)(3)(A) of the Code with respect to
the Ownership Change on December 16, 1992 is approximately $50,000,000 as of the
Closing Date.
(m) The Company has not received on or before the Closing Date any
formal or informal communication from the Internal Revenue Service ("IRS")
that it will not issue the rulings requested in the ruling request filed by the
Company dated August 26, 1994.
(n) The NOL and the AMTNOL of the Company are properly allocated
among the Company and the Subsidiaries as set forth in the Company Disclosure
Letter.
(o) The Company is entitled to and will file a consolidated
federal income tax return for the taxable year which ends on or includes the
Closing Date with each Subsidiary. The Company is the Common Parent Corporation
of the Affiliated Group of Corporations (as defined in Section 1504 of the Code)
which includes the Company. Each Subsidiary is an includible corporation (as
defined in Section 1504 of the Code). Each Subsidiary is 100 percent owned by
the Company or another member of the Affiliated Group of Corporations of which
the Company is the Common Parent Corporation. The Company has filed a
consolidated federal income tax return with its Subidiaries each year since the
year ending 1979. No consent pursuant to the collapsible corporation provisions
of Section 341(f) of the Code (or any corresponding provision of state, local or
foreign income tax law) or agreement to have Section 341 (f)(2) of the Code (or
any corresponding provision of state, local or foreign income tax law) apply to
any disposition of any asset owned by the Company or any Subsidiary is in effect
with respect to the Company or any
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Subsidiary. None of the assets of the Company or any Subsidiary directly or
indirectly secures any debt the interest on which is tax exempt under Section
103(a) of the Code. None of the assets of the Company or any Subsidiary is
"tax-exempt use property" within the meaning the Section 168(h) of the Code.
The Company and each Subsidiary have not agreed to make, nor is it required to
make, any adjustment under Section 481(a) of the Code by reason of a change in
accounting method or otherwise. The Company and each Subsidiary are not a party
to any agreement, contract, arrangement or plan that has resulted or would
result, separately or in the aggregate, in the payment or any "excess parachute
payments" within the meaning of Section 28OG of the Code. No income or gain of
the Company has been deferred pursuant to Treasury Regulation Section 1.1502-13
or -14, or Temporary Treasury Regulations Section 1.1502-13T or -14T. No excess
loss account (as described in Treasury Regulation Section 1.1502-14, 1.1502-19
and 1.1502-32) exists with respect to the Company or any Subsidiary except as
set forth in the Company Disclosure Letter. No power of attorney has been
granted with respect to any matter relating to Taxes of the Company or any
Subsidiary which is currently in force except with respect to the Ruling
Request. None of the property of the Company or any Subsidiary is required to
be treated as owned by another person pursuant to Section 168(f)(8) of the Code
(as in effect prior to its amendment by the Tax Reform Act of 1986). The
Company or any Subsidiary has not participated in or cooperated in an
international boycott, within the meaning of Section 999 of the Code, nor has
any such corporation had operations which are or may hereafter become reportable
under Section 999 of the Code. Neither the Company nor any Subsidiary has
disposed of property in a transaction being accounted for under the installment
method pursuant to Section 453 or 453A of the Code. The Company or any
Subsidiary has no corporate acquisition indebtedness, as described in Section
279(b) of the Code. No transaction by this Agreement is subject to withholding
under Section 1445 of the Code and no stock transfer taxes, real estate transfer
taxes, or other similar taxes will be imposed on the transfer of the Shares
pursuant to this Agreement.
(p) Parent or its designee reserves the right to make an election
under Section 338(g) of the Code with respect to the acquisition of the Company
and its Subsidiaries. The consummation of the Merger pursuant to this Agreement
will not affect the status of the 1993 Merger as a qualified tax free
reorganization under 368(a)(1)(A) of the Code.
5.21 NO BROKERS. The Company has not entered into any contract,
arrangement or understanding with any person or firm, including any bonus or
similar arrangement with any officer, director or employee of the Company, which
may result in the obligation of the Company or Parent or Merger Sub to pay any
success fee, finder's fee, brokerage or agent's commission or other like payment
in connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby, except that the Company
has retained S.G. Warburg & Co. Inc. and Dillon, Read & Co. Inc., the
arrangements with which have been disclosed in writing to Parent prior to the
date hereof. Other than the foregoing arrangements, the Company is not aware of
any claim against the Company for payment of any success fee, finder's fee,
brokerage or agent's commission or other like payment in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby. The Company shall not pay any expenses of any stockholder
incurred in connection with the Merger or any other transaction
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contemplated by this Agreement or the transactions contemplated by the
Securities Purchase Agreements.
5.22 MATERIAL CONTRACTS. Neither the Company nor any of its
Subsidiaries is a party to or bound by any lease, agreement or other contract
that would be required to be filed as an exhibit to the Annual Report on Form
10-K filed by the Company if that report were filed as of the date of this
Agreement that has not already been filed as an exhibit to any Company Report
that has been filed by the Company with the SEC after December 31, 1993.
5.23 ABSENCE OF OTHER AGREEMENTS. Neither the Company nor any of its
officers, directors or other authorized representatives has entered into any
agreement, letter of intent or similar agreement (whether oral or written) with
any party other than Parent and Merger Sub whereby all or a substantial part of
the Company, its capital stock or its debt instruments would be sold, merged,
consolidated, transferred or otherwise combined with or into another entity.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub, jointly and severally, represent and warrant to the
Company as follows:
6.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. Each of Parent
and Merger Sub is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation. Each of Parent
and Merger Sub is duly licensed or qualified to do business as a foreign
corporation and is in good standing under the laws of each other state of the
United States in which the character of the properties owned or leased by it
therein or in which the transaction of its business makes such qualification
necessary, except where the failure to be so licensed or qualified or be in good
standing would not have a material adverse effect on the ability of Parent or
Merger Sub to perform its respective obligations hereunder (a "PARENT MATERIAL
ADVERSE EFFECT"). Parent has all requisite corporate power and authority to
own, operate and lease its properties and carry on its business as now
conducted. Merger Sub was incorporated on January 30, 1995, and since its
incorporation Merger Sub has not conducted any business activities except in
connection with the transactions contemplated in this Agreement.
6.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Each of
Parent and Merger Sub has the requisite corporate power and authority to execute
and deliver this Agreement and all agreements and documents contemplated hereby,
and the consummation by Parent and Merger Sub of the transactions contemplated
hereby has been duly authorized by all requisite corporate action. This
Agreement constitutes, and all agreements and documents contemplated hereby
(when executed and delivered pursuant hereto for value received) will
constitute, the valid and legally binding obligations of Parent and Merger Sub,
enforceable against each of them in accordance with their respective terms,
subject to applicable
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bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights and general principles of equity.
6.3 NO VIOLATION. Neither the execution and delivery by Parent and
Merger Sub of this Agreement, nor the consummation by Parent and Merger Sub of
the transactions contemplated hereby in accordance with the terms hereof, will:
(a) result in a breach of any provisions of the Certificate of Incorporation or
By-laws of Parent or Merger Sub; (b)violate or result in a breach of any
provisions of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
or in a right of termination or cancellation of, or accelerate the performance
required by, or give rise to any payments or compensation under, or result in
the creation of any lien, security interest, charge or encumbrance upon any of
the properties of Parent or its Subsidiaries under, or result in being declared
void, voidable, or without further binding effect, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, deed of trust or any
material license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation to which Parent or any of its Subsidiaries
is a party, or by which Parent or any of its Subsidiaries or any of their
properties is bound or affected, except for any of the foregoing matters which
would not, individually or in the aggregate, have a Parent Material Adverse
Effect and will not impose any liability on the Company; (c) violate any order,
writ, injunction, decree, law, statute, rule or regulation applicable to Parent
or any of its Subsidiaries or any of their respective property or assets, except
for violations which would not individually or in the aggregate, have a Parent
Material Adverse Effect; or (d) based upon the representation and warranty of
the Company made in Section 5.19 and compliance by the Company with Section 7.4,
require any consent, approval or authorization of, or declaration, filing or
registration with, any domestic governmental or regulatory authority (other than
the Regulatory Filings), or any other person or entity, the failure to obtain or
make which would have, individually or in the aggregate, a Parent Material
Adverse Effect.
6.4 AVAILABILITY OF FUNDS. Parent will have available at the
Closing sufficient funds to enable it to consummate the transactions
contemplated by this Agreement (upon the terms contained herein) and the
Securities Purchase Agreements (upon the terms contained therein).
6.5 NO BROKERS. Neither Parent nor Merger Sub has entered into any
contract, arrangement or understanding with any person or firm which may result
in the obligation of the Company to pay any finder's fee, brokerage or agent's
commission or other like payment in connection with the negotiations leading to
this Agreement or the consummation of the transactions contemplated hereby.
ARTICLE VII
COVENANTS
7.1 TAKEOVER PROPOSALS. The Company agrees that, from and after its
execution of this Agreement through the Effective Time, it shall not, nor shall
it permit any of its
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Subsidiaries to, and it shall use its best efforts to cause its officers,
directors or employees, and all investment bankers, attorneys or other advisors
or representatives retained by the Company or any of its Subsidiaries not to,
(a) solicit or encourage the submission of, any Takeover Proposal (as
hereinafter defined), (b) enter into any agreement with respect to any Takeover
Proposal or (c) participate in any discussions or negotiations regarding, or
furnish to any person any information with respect to, or take any other action
to facilitate any inquiries or the making of any proposal that constitutes, a
Takeover Proposal; PROVIDED, HOWEVER, that nothing contained in this Section
7.1 shall prohibit the Board of Directors of the Company from (x) furnishing
information to or entering into discussions or negotiations with, any person or
entity that makes an unsolicited Takeover Proposal if, in the judgment of the
Committee after consultation with outside counsel, such action may be required
for the Board of Directors of the Company to comply with its fiduciary duties to
the Company and its stockholders; or (y) from disclosing to the Company's
stockholders a position with respect to a tender offer by a third party pursuant
to Rules 14d-9 and 14e-2 promulgated under the Exchange Act or from making such
disclosure to the Company's stockholders which, in the judgment of the Board of
Directors, may be required under applicable law. For purposes of this
Agreement, "TAKEOVER PROPOSAL" means any proposal or offer for a merger or
other business combination involving the Company or to acquire a material equity
interest in, or a substantial portion of the assets of, the Company, other than
as contemplated by this Agreement.
7.2 CONDUCT OF BUSINESS. Prior to the Effective Time, except as
specifically set forth in the Company Disclosure Letter or as contemplated by
any other provision of this Agreement, unless Parent has consented in writing
thereto, the Company:
(a) shall, and shall cause each of its Subsidiaries to, conduct
its operations according to its usual, regular and ordinary course in
substantially the same manner as heretofore conducted;
(b) shall use its reasonable efforts, and shall cause each of its
respective Subsidiaries to use its reasonable efforts, to preserve intact its
business organization and goodwill, keep available the services of its officers
and employees and maintain satisfactory relationships with those persons having
business relationships with it;
(c) shall confer on a regular basis with one or more
representatives of Parent to report material operational matters;
(d) shall not amend its certificate of incorporation or by-laws;
(e) shall promptly notify Parent of (i) any material emergency or
other material change in the Condition of the Company or the Subsidiaries, (ii)
any material litigation or material governmental complaints, investigations or
hearings (or communications indicating that the same may be contemplated)
involving the Company or any of its Subsidiaries, or (iii) the breach in any
material respect of any representation or warranty or covenant of the Company
contained herein;
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(f) shall promptly deliver to Parent true and correct copies of
any report, statement or schedule filed by the Company with the SEC subsequent
to the date of this Agreement;
(g) shall not (i) except pursuant to the exercise of options,
warrants, conversion rights and other contractual rights existing on the date
hereof and disclosed in the Company Reports, the Company Disclosure Letter or
otherwise pursuant to this Agreement, issue any shares of its capital stock,
effect any stock split or otherwise change its capitalization as it exists on
the date hereof, (ii) grant, confer or award any option, warrant, conversion
right or other right not existing on the date hereof to acquire any shares of
its capital stock from the Company, (iii) increase any compensation or enter
into or amend any employment, severance, termination or similar agreement with
any of its present of future officers or directors, except for normal increases
in compensation to employees consistent with past practice and the payment of
cash bonuses to employees pursuant to and consistent with existing plans or
programs or (iv) adopt any new employee benefit plan (including any stock
option, stock benefit or stock purchase plan) or amend any existing employee
benefit plan in any material respect, except for changes which are less
favorable to participants in such plans or as may be required by applicable law;
(h) shall not (i) declare, set aside or pay any dividend or make
any other distribution or payment with respect to any shares of its capital
stock (other than pay-in-kind dividends on the Series A Preferred in accordance
with its terms); (ii) directly or indirectly redeem, purchase or otherwise
acquire any shares of its capital stock or capital stock of any of its
Subsidiaries, or make any commitment for any such action or (iii) split, combine
or reclassify any of its capital stock;
(i) not set aside or pay any interest or principal or make any
other distribution or payment with respect to any indebtedness of the Company
held by Prudential or Santa Fe (other than regularly scheduled interest payments
on such indebtedness held by Prudential or Santa Fe as of the date of this
Agreement or as required under Section 7.13 hereof);
(j) shall not, and shall not permit any of its Subsidiaries to,
acquire, sell, lease or otherwise dispose of any of its assets (including
capital stock of Subsidiaries) (i)with a fair market value in excess of $250,000
or (ii) which are material, individually or in the aggregate, to the Company's
business except in the ordinary course of business;
(k) shall not (i) incur or assume any long-term or short-term debt
or issue any debt securities except for borrowings under existing lines of
credit or the creation of trade payables in the ordinary course of business;
(ii) except with respect to obligations of wholly-owned Subsidiaries of the
Company; assume, guaranty, endorse or otherwise become liable or responsible
(whether directly, indirectly, contingently or otherwise) for the obligations of
any other person except in the ordinary course of business consistent with past
practices in an amount not material to the Company and its Subsidiaries, taken
as a whole; (iii) other than to wholly-owned Subsidiaries of the Company, make
any loans, advances or capital contributions to, or investments in, any other
person; (iv) pledge or otherwise encumber shares of capital stock of the Company
or its Subsidiaries; or
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(v) mortgage or pledge any of its material assets, tangible or intangible, or
create or suffer to create any material mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect to such asset;
(l) except as may be required as a result of a change in law or in
generally accepted accounting principles shall not change any of the accounting
principles or practices used by the Company;
(m) shall not (i) acquire (by merger, consolidation or acquisition
of stock or assets) any corporation, partnership or other business organization
or division thereof or any equity interest therein; (ii) enter into any contract
or agreement other than in the ordinary course of business consistent with past
practice which would be material to the Company and its Subsidiaries taken as a
whole; (iii) violate any order, writ, injunction, decree, law, statute, rule or
regulation applicable to Parent or any of its Subsidiaries or any of their
respective property or assets, except for violations which would not
individually or in the aggregate, have a Parent Material Adverse Effect; or (iv)
enter into or amend any contract, agreement, commitment or arrangement providing
for the taking of any action which would be prohibited hereunder;
(n) shall not make any tax election or settle or compromise any
income tax liability material to the Company and its Subsidiaries taken as a
whole;
(o) shall not pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business of liabilities reflected, reserved against or disclosed in
the consolidated financial statements (or the notes thereto) of the Company and
its Subsidiaries or incurred in the ordinary course of business consistent with
past practice or in connection with the consummation of transactions
contemplated by this Agreement;
(p) shall not settle or compromise any pending or threatened suit,
action or claim relating to the transactions contemplated hereby; or
(q) shall not take, or agree in writing or otherwise to take any
action that would constitute a breach of the covenants contained in Section
7.2(a) through 7.2(p) or that would make any of the representations and
warranties of the Company contained in this Agreement untrue or incorrect as of
the date when made.
7.3 STOCKHOLDER ACTION. (a) If required by applicable law in order
to consummate the Merger, the Company shall take all action necessary in
accordance with the DGCL and its Restated Certificate of Incorporation and
By-laws to convene a meeting of stockholders of the Company as promptly as
practicable following the execution of this Agreement for the purpose of
approving the Merger and this Agreement. The date of any such stockholders'
meeting shall be set by the Board of Directors of the Company after consultation
with, and on a date approved by, Parent, whose approval shall not be
unreasonably withheld. Unless otherwise required by the fiduciary duty of the
Board of Directors of the Company (as determined by them in good faith after
consultation with
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outside counsel), the Board of Directors of the Company shall (i) recommend that
the Company's stockholders vote to approve the Merger and this Agreement if
proxies are solicited by the Company with respect to such vote, (ii) cause the
Company to use its best efforts to solicit from stockholders of the Company
proxies in favor of the Merger, unless, in accordance with applicable law and
the regulations of the New York Stock Exchange, such solicitation is not
required to achieve approval of the Merger (taking into account proxies granted
by Santa Fe and Prudential pursuant to the Securities Purchase Agreements), and
(iii) take all other action in their judgment necessary and appropriate to
secure the vote of stockholders required by the DGCL to effect the Merger. To
the extent required by the fiduciary obligations of the Board of Directors (as
determined by them in good faith after consultation with outside counsel), the
Board of Directors of the Company may, at any time prior to the Effective Time,
withdraw or modify its approval or recommendation to the Company's stockholders
of the Merger and this Agreement.
(b) In connection with the Merger, the Company shall prepare a
proxy statement pursuant to Regulation 14A under the Exchange Act or, if
applicable law and regulations of the New York Stock Exchange do not so require,
an information statement pursuant to Regulation 14C under the Exchange Act, file
such proxy statement and/or information statement with the SEC under the
Exchange Act as promptly as practicable and use all reasonable efforts to have
such proxy statement and/or information statement cleared by the SEC. If
requested by Parent, the Company will include in such proxy and/or information
statement a proposal (the "SERIES B PROPOSAL") to the effect that the
Surviving Corporation's Certificate of Incorporation be amended, promptly
following the later of (i) consummation of the Merger or (ii) the vote of the
Series B Preferred stockholders upon such proposal (such later date being
hereinafter referred to as the "OUTSIDE DATE"), to provide that the
Scheduled Automatic Conversion Date of the Series B Preferred be changed from
December 14, 1995 to a date specified by Parent within ten business days
following the Outside Date. Parent, Merger Sub and the Company shall cooperate
with each other in the preparation of the proxy statement and/or information
statement, and the Company shall notify Parent of the receipt of any comments of
the SEC with respect to the proxy statement and/or information statement and of
any requests by the SEC for any amendment or supplement thereto or for
additional information and shall provide to Parent promptly copies of all
correspondence between the Company or any representative of the Company and the
SEC. The Company shall give Parent and its counsel the opportunity to review
the proxy statement and/or information statement prior to its being filed with
the SEC and shall give Parent and its counsel the opportunity to review all
amendments and supplements to the proxy statement and/or information statement
and all responses to requests for additional information and replies to comments
prior to their being filed with, or sent to, the SEC. Each of the Company,
Parent and Merger Sub agrees to use its reasonable best efforts, after
consultation with the other parties hereto to respond promptly to all such
comments of and requests by the SEC. As promptly as practicable after the proxy
statement and/or information statement has been cleared by the SEC, the Company
shall mail the proxy statement and/or information statement to the stockholders
of the Company. The Company agrees that the proxy statement and/or information
statement and each amendment or supplement thereto at the time of mailing
thereof and (if applicable) at the time of the meeting of the stockholders of
the Company, will not include any untrue statement of a material fact or omit to
state a material fact required to be stated therein
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or necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading; PROVIDED, HOWEVER, that the foregoing
shall not apply to the extent that any such untrue statement of a material fact
or omission to state a material fact was made by the Company in reliance upon
and in conformity with written information furnished to the Company by Parent or
Merger Sub specifically for use in the proxy statement and/or information
statement. Parent and Merger Sub agree that the written information concerning
Parent and Merger Sub provided by them for inclusion in the proxy statement
and/or information statement and each amendment or supplement thereto, at the
time of mailing thereof and at the time of the meeting of stockholders of the
Company, will not include an untrue statement of a material fact or omit to
state a material fact to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. No amendment or supplement to the proxy statement and/or
information statement will be made by the Company without the approval of the
Parent.
7.4 FILINGS; OTHER ACTION.
(a) Subject to the terms and conditions herein provided, the
Company and Parent shall: (i) promptly make their respective filings and
thereafter make any other required submissions under the HSR Act with respect to
the Merger; (ii) use all reasonable efforts to cooperate with one another in (1)
promptly determining which filings are required to be made prior to the
Effective Time with, and which consents, approvals, permits or authorizations
are required to be obtained prior to the Effective Time from, governmental or
regulatory authorities of the United States, the several states and foreign
jurisdictions in connection with the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby and (2) timely
making all such filings and timely seeking all such consents, approvals, permits
or authorizations; and (iii) use all reasonable efforts to take, or cause to be
taken, all other action and to do, or cause to be done, all other things
necessary, proper or appropriate to promptly consummate and make effective the
transactions contemplated by this Agreement. Each of Parent and the Company
will use all reasonable efforts to resolve such objections, if any, as may be
asserted with respect to the Merger under the HSR Act or other antitrust laws.
If, at any time after the Effective Time, any further action is necessary or
desirable to carry out the purpose of this Agreement, the proper officers and
directors of Parent and the Company shall take all such necessary action.
(b) Prior to the Effective Time, the Company shall sell, assign or
otherwise transfer any interest of the Company or any Subsidiary or affiliate
thereof in the power generation facilities located at Chinese Station,
California to a third party not affiliated with the Company or Buyers on terms
which would not have a Material Adverse Effect.
7.5 INSPECTION OF RECORDS; ACCESS. From the date hereof to the
Effective Time, the Company shall allow all designated officers, attorneys,
accountants and other representatives or agents of Parent ("PARENT'S
REPRESENTATIVES") access at all reasonable times to all employees, offices,
warehouses, and other facilities and to the records and files, correspondence,
audits and properties (whether owned or leased, or as to which an easement in
favor of the Company exists), as well as to all information relating to
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commitments, contracts, titles and financial position, or otherwise pertaining
to the business and affairs, of the Company and its Subsidiaries including,
without limitation, access to all properties of the Company (whether owned or
leased, or as to which an easement in favor of the Company exists) to conduct
such reasonable investigation of the business and properties of the Company and
its Subsidiaries as Parent deems appropriate; PROVIDED, HOWEVER, Parent's
Representatives shall use reasonable efforts to avoid interfering with,
hindering or otherwise disrupting the employees of the Company in the execution
of their employment duties during any visit to, or inspection of, the Company's
facilities. Parent agrees that any written report regarding any such
environmental investigation shall be confidential and shall not be provided to
any third party, including any governmental authority, without the prior written
consent of the Company. Parent agrees to promptly provide the Company with a
copy of any such written environmental report.
7.6 PUBLICITY. Parent, the Company, Santa Fe and Prudential shall,
subject to their respective legal obligations (including requirements of stock
exchanges and other similar regulatory bodies), agree upon the text of any press
release relating to this Agreement or the transactions contemplated hereby
before issuing any such press release or otherwise making public statements with
respect to the transactions contemplated hereby and in making any filings with
any federal or state governmental or regulatory agency or with any national
securities exchange with respect thereto.
7.7 FURTHER ACTION. Each party hereto shall, subject to the
fulfillment at or before the Effective Time of each of the conditions to
performance set forth herein or the waiver thereof, perform such further acts
and execute such documents as may be reasonably required to effect the Merger
and the other transactions contemplated hereby.
7.8 EXPENSES. Except as set forth in Section 9.3(b) (under the
circumstances therein contemplated), whether or not the Merger is consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses; PROVIDED, HOWEVER, that if the Merger is consummated and the
Merger Expenses (as defined below) exceed $3,250,000, then (a) the amount of
such excess shall be reimbursed to the Surviving Corporation by Prudential on or
before ten days after the receipt by Prudential of a written request therefor
from the Surviving Corporation accompanied by documentation in reasonable detail
evidencing the total amount of expenses incurred, including such excess;
PROVIDED, HOWEVER, in no event shall the amount required to be paid by
Prudential pursuant to this sub-clause (a) exceed $250,000; and (b) the amount
by which the Merger Expenses exceed $3,500,000 shall be reimbursed to the
Surviving Corporation by Santa Fe on or before ten days after the receipt by
Santa Fe of a written request therefor from the Surviving Corporation
accompanied by documentation in reasonable detail evidencing the total amount of
Merger Expenses, including such excess; and PROVIDED FURTHER, HOWEVER, that if
the Securities Purchase Agreement among Parent, Merger Sub and Santa Fe is
terminated by Santa Fe pursuant to Section 7.2(d) thereof, the Company shall
reimburse Parent and Merger Sub for Parent's out-of-pocket expenses incurred in
connection with this Agreement and the transaction contemplated hereby, such
reimbursement not to exceed $1,500,000. Upon the reasonable request of
Prudential or Santa Fe, the Surviving Corporation shall provide additional
documentation to verify the accuracy of the information furnished to such party
regarding
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the expenses incurred by the Company or the Surviving Corporation. As used in
this Section 7.8, "Merger Expenses" shall mean the Option Cash-Out Amount, all
amounts due from the Company to Vinson & Elkins L.L.P., Akin, Gump, Strauss,
Hauer & Feld, L.L.P., Morris Nichols Arsht & Tunnel and Morris, James, Hitchens
& Williams for services rendered in connection with the Merger and the Lawsuit,
amounts due from the Company to S.G. Warburg & Co. Inc. for services rendered in
connection with the Merger (not to exceed $1,250,000 plus expenses), amounts due
from the Company to Dillon, Read & Co. Inc. for services rendered in connection
with the Merger (not to exceed $1,150,000), amounts due Elliot Associates L.P.
for services rendered in connection with the Merger (not to exceed $75,000),
amounts due in settlement of the Lawsuit and printing and mailing costs and
expenses incurred in connection with the Merger.
7.9 INDEMNIFICATION.
(a) Parent shall cause the Surviving Corporation to indemnify each
of the present and former officers, directors, employees and agents of the
Company and its Subsidiaries (the "INDEMNIFIED PARTIES") with respect to his
service in any such capacity or service at the request of the Company or any of
its Subsidiaries as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise in regard to
any matter, including the transactions contemplated hereby, occurring at or
prior to the Effective Time to the full extent permitted by the DGCL, the
Company's Certificate of Incorporation or Bylaws or indemnification agreements,
or the certificate of incorporation or bylaws of such Subsidiary, in each case
as in effect as of the date of this Agreement. Neither Parent nor the Surviving
Corporation shall amend such indemnification provisions currently contained in
the certificates of incorporation and bylaws of the Company and its Subsidiaries
(except as required by applicable law) if the amendments effected thereby would
diminish the Indemnified Parties' right of indemnification.
(b) Parent shall cause the Surviving Corporation to use its best
efforts to cause to be maintained in effect for six years from the later of the
Effective Time or the expiration of the current policy (such later date being
herein referred to as the "COMMENCEMENT DATE"), the current policies of
directors' and officers' liability insurance maintained by the Company and its
Subsidiaries with respect to all matters, including the transactions
contemplated hereby, occurring prior to or at the Effective Time; PROVIDED,
HOWEVER, the Surviving Corporation may substitute therefor policies of at
least the same coverage containing terms and conditions which are no less
advantageous to the insured officers and directors so long as no lapse in
coverage occurs as a result of such substitution; and PROVIDED FURTHER,
HOWEVER, that, effective on the third anniversary of the Effective Time (or at
any time thereafter), the Surviving Corporation may substitute for such policies
an indemnity from Parent providing coverage no less advantageous to the insured
officers and directors so long as no lapse in coverage occurs as a result of
such substitution; if such substitution of an indemnity is effected, the
Surviving Corporation will provide to each such insured officer or director so
requesting a contract from Parent evidencing such indemnity.
(c) This Section 7.9 shall survive the closing of the transactions
contemplated hereby, is intended to benefit the Company and each of the
Indemnified
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Parties (each of whom shall be entitled to enforce this Section 7.9 against the
Surviving Corporation and Parent) and shall be binding on all successors and
assigns of the Surviving Corporation and Parent. If the Surviving Corporation
or the Parent or any of their respective successors or assigns (i) consolidates
with or merges into any other person and shall not be the continuing or
surviving corporation or entity of such consolidation or merger, or (ii)
transfers all or substantially all of its properties and assets to any person,
then, and in each such case, proper provisions shall be made so that the
successors and assigns of Surviving Corporation and/or Parent assume the
obligations set forth in this Section 7.9.
7.10 CERTAIN BENEFITS.
(a) From and after the Effective Time, subject to applicable law,
Parent and Subsidiaries will honor in accordance with their terms, all Company
Benefit Plans; PROVIDED, HOWEVER, that nothing herein shall preclude any
change effected on a prospective basis in any Company Benefit Plan.
(b) The Surviving Corporation shall employ at the Effective Time
all employees of the Company and its Subsidiaries who are employed on the
Closing Date on terms consistent with the Company's current employment practices
and at comparable levels of compensation and positions. Such employment shall
be at will and Parent and the Surviving Corporation shall be under no obligation
to continue to employ any individuals.
7.11 SETTLEMENT OF LITIGATION. The parties hereto agree to use all
commercially reasonable efforts (a) to enter into a memorandum of understanding
or other appropriate agreement in a form and on terms reasonably acceptable to
the parties hereto, Prudential and Santa Fe (the "MEMORANDUM OF
UNDERSTANDING") settling the lawsuit styled as ENGEL V. HADSON CORPORATION,
ET AL., Civil Action No. 13934 (the "LAWSUIT"), pending in the Court of
Chancery of the State of Delaware in and for New Castle County (the
"COURT") and providing for, among other things, (i) the approval by the
litigants of the consideration to be paid to holders of Common Stock pursuant to
Section 4.1(b) hereof, (ii) payment of fees and expenses of plaintiff's counsel
and (iii) a release of each of the defendants named therein, Parent, the
Company, Santa Fe and Prudential and their respective officers, directors,
agents, employees and affiliates from any and all claims by stockholders of the
Company with respect to the Merger (the "SETTLEMENT"), (b) as soon as
practicable after the Memorandum of Understanding is entered into, to cause (i)
the stipulation of settlement or other appropriate document having such effect
contemplated by the Memorandum of Understanding (which shall be in a form
reasonably acceptable to the parties hereto, Santa Fe and Prudential) to be
filed in the Court, (ii) the Court to certify the Lawsuit as a class action the
members of which shall be all holders of Common Stock (other than Santa Fe and
Prudential), and in connection with which the members of the class do not have
the right to opt out or otherwise elect not to participate in the Settlement and
(iii) the Settlement to become final and non-appealable.
7.12 NO AMENDMENT. Without the express written consent of the
Company, Parent and Merger Sub agree not to amend or modify either of the
Securities Purchase Agreements in any respect.
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7.13 PAYMENT OF CERTAIN INDEBTEDNESS. Immediately prior to the
Effective Time, the Company shall pay to Prudential, as holder of the Company's
$56,400,000 original aggregate principal amount of 8% Senior Secured Notes due
2003 (the "8% SENIOR SECURED NOTES"), all interest accrued on the 8% Senior
Secured Notes from the last interest payment date on which interest was paid in
full to but not including the day on which the Effective Time shall occur.
ARTICLE VIII
CONDITIONS
8.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated.
(b) Neither of the parties hereto shall be subject to any order or
injunction of a court of competent jurisdiction which prohibits the consummation
of the transactions contemplated by this Agreement.
(c) The Board of Directors of the Company shall have received from
Dillon, Read & Co. Inc. confirmation, as of the date of the proxy or information
statement relating to the Merger, of its opinion described in Section 5.18.
(d) This Agreement and the Merger shall have been approved by the
stockholders of the Company in accordance with the DGCL and the Company's
Restated Certificate of Incorporation and By-laws.
(e) The Lawsuit shall have been certified as a class action as
provided for in Section 7.11 hereof, the members of which shall not have opt out
rights or the right to otherwise elect not to participate therein, and the
Settlement shall have been approved and become final and non-appealable.
8.2 CONDITION TO OBLIGATION OF THE COMPANY TO EFFECT THE MERGER.
The obligation of the Company to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following condition:
(a) Parent and Merger Sub shall have performed in all material
respects their respective agreements contained in this Agreement required to be
performed on or prior to the Closing Date and the representations and warranties
of Parent and Merger Sub contained in this Agreement shall be true and correct
as of the date of this Agreement and (unless made as of a specified date) as of
the Closing Date, with the same force and effect as if made at, and effective as
of, such date; and the Company shall have received a
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certificate of the President or a Vice President of Parent and Merger Sub, dated
the Closing Date, certifying to such effect.
(b) The Company shall have received from Gardner Carton & Douglas,
counsel to Parent and Merger Sub, an opinion covering the matters set forth on
Exhibit A hereto.
8.3 CONDITIONS TO OBLIGATION OF PARENT AND MERGER SUB TO EFFECT THE
MERGER. The obligations of Parent and Merger Sub to effect the Merger shall
be subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) The Company shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or prior to
the Closing Date and the representations and warranties of the Company contained
in this Agreement shall be true and correct as of the date of this Agreement and
(unless made as of a specified date) as of the Closing Date, with the same force
and effect as if made at, and effective as of, such date (provided, however, in
addition, that each representation and warranty in Section 5.12, Section
5.14(d), (e), (f), (g), (h), (i) and (k), Section 5.16, Section 5.17, Section
5.20, Section 5.22 or Section 5.23 shall be deemed to be untrue or incorrect as
of either such date only to the extent that the inaccuracies of such
representation and warranty would reasonably be expected to have a Material
Adverse Effect), and Parent shall have received a certificate of the Company,
dated the Closing Date, certifying to all of the foregoing.
(b) All necessary governmental and third party consents required
in connection with the transactions contemplated by this Agreement shall have
been obtained and there shall be no action, suit or proceeding pending or
threatened against the Company, the Parent or any of their subsidiaries which
would reasonably be expected to prevent or delay the transactions contemplated
by this Agreement or either of the Securities Purchase Agreements or result in
material damages in connection herewith or therewith.
(c) Parent and Merger Sub shall have entered into the Securities
Purchase Agreements and all conditions to the obligations of Parent and Merger
Sub to close the transactions contemplated thereby shall have been satisfied or
waived.
(d) Parent and Merger Sub shall have received from Akin, Gump,
Strauss, Hauer & Feld, L.L.P., counsel to the Company, an opinion covering the
matters set forth on Exhibit B hereto.
(e) On the date of commencement of mailing to the Company's
stockholders of the proxy or information statement with respect to the Merger
and immediately prior to the Effective Time, Parent and Merger Sub shall have
received a letter customary in form and substance in transactions of this type,
dated the date of such mailing and the date of the Effective Time, respectively,
and reasonably satisfactory to them, from Price Waterhouse, independent public
accountants for the Company, in connection with such accountants' review of
certain financial matters regarding the Company and its Subsidiaries contained
in such proxy or information statement.
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(f) All Company Options shall have been cancelled and terminated
by the Compensation Committee of the Board of Directors of the Company.
(g) Except as disclosed in the Company Reports filed with the SEC
prior to the date of this Agreement or in the Company Disclosure Letter, since
December 31, 1993, there shall not have occurred any event or change with
respect to the Company and its Subsidiaries having or which would be reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.
ARTICLE IX
TERMINATION
9.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time by the
mutual written consent of Parent and the Company.
9.2 TERMINATION BY EITHER PARENT OR THE COMPANY. This Agreement may
be terminated and the Merger may be abandoned by Parent or the Company if (a)
all conditions to consummation of the Merger shall not have been satisfied or
waived and the Merger shall not have been consummated by June 30, 1995, or (b) a
United States federal or state court of competent jurisdiction or United States
federal or state governmental, regulatory or administrative agency or commission
shall have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other action
shall have become final and non-appealable; provided, that the party seeking to
terminate this Agreement pursuant to clause (b) of this Section 9.2 shall have
used all reasonable efforts required by this Agreement to remove such
injunction, order or decree.
9.3 TERMINATION BY THE COMPANY.
(a) This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time by the Company, if there has
been a breach by Parent or Merger Sub of any representation or warranty
contained in this Agreement which would have a Parent Material Adverse Effect.
(b) In addition, this Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time by the Company if, in
the judgment of the Committee, such action may be required for the Board of
Directors to comply with its fiduciary duties to the Company and its
stockholders; PROVIDED, HOWEVER, if such action is taken by the Company, the
Company shall pay to Parent $1,500,000 as reimbursement to Parent for Parent's
expenses incurred in connection with the transactions contemplated by this
Agreement (for which Parent shall not be required to account); and PROVIDED
FURTHER, HOWEVER, that if, following such action, the Company shall
consummate any transaction pursuant to a Takeover Proposal (i) within 15 months
following the date of this Agreement or (ii) thereafter pursuant to a definitive
agreement executed by the Company during such
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15-month period, the Company shall also pay to Parent $3,500,000 promptly upon
the occurrence of such transaction.
9.4 TERMINATION BY PARENT. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time by the Parent,
if there is any inaccuracy in any representation or warranty of the Company
contained in this Agreement which would reasonably be expected to have a
Material Adverse Effect.
9.5 AUTOMATIC TERMINATION. This Agreement shall terminate
automatically upon any termination of the Securities Purchase Agreement among
Parent, Merger Sub and Santa Fe pursuant to Section 7.2(d) thereof.
9.6 EFFECT OF TERMINATION AND ABANDONMENT. In the event of
termination of this Agreement and the abandonment of the Merger pursuant to this
Article 9, all obligations of the parties hereto shall terminate, except the
obligations of the parties pursuant to this Section 9.6, Sections 7.8 and
9.3(b), the last two sentences of Section 7.5 and the Confidentiality Agreement
referred to in Section 10.4. Moreover, in the event of termination of this
Agreement, nothing herein shall prejudice the ability of the non-breaching party
from seeking damages from any other party for any breach of this Agreement,
including without limitation, attorneys' fees and the right to pursue any remedy
at law or in equity.
9.7 EXTENSION; WAIVER. At any time prior to the Effective Time, any
party hereto may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (c)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreements on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by or on behalf of the party granting such extension or
waiver.
ARTICLE X
GENERAL PROVISIONS
10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; CONSEQUENCES OF
INACCURACY. Unless this Agreement has previously been terminated pursuant to
Article IX, the representations and warranties and covenants made in this
Agreement shall terminate at the Closing, except that any covenant herein which
by its terms contemplates performance after the Closing Date shall survive the
Closing Date for the period contemplated thereby. Prior to Closing, inaccuracy
of a representation or warranty made in this Agreement shall serve as a basis
for monetary liability of any party to this Agreement to another only if made
with actual knowledge of such inaccuracy and only to the extent that such
inaccuracy would reasonably be expected to have a Material Adverse Effect (in
the case of a representation or warranty of the Company) or Parent Material
Adverse Effect (in the case of a representation or warranty of Parent or Merger
Sub); otherwise, inaccuracy of a representation or warranty
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shall serve only as a basis for termination of the Agreement or refusal to close
in accordance with Sections 9.3(a), 9.4, 8.2(a) or 8.3(a).
10.2 NOTICES. Any notice required to be given hereunder shall be
sufficient if in writing, and sent by facsimile transmission and by courier
service (with proof of service), hand delivery or certified or registered mail
(return receipt requested and first-class postage prepaid), addressed as
follows:
If to the Company: If to Parent or Merger Sub:
Hadson Corporation LG&E Energy Corp.
2777 Stemmons Freeway 220 West Main Street
Suite 700 P.O. Box 32030
Dallas, Texas 75207 Louisville, Kentucky 40202
Attention: President Attention: President
Fax: (214) 640-6932 Fax: (502) 627-2995
With a copy to: With a copy to
Hadson Corporation LG&E Energy Corp.
2777 Stemmons Freeway 220 West Main Street
Suite 700 P.O. Box 32030
Dallas, Texas 75207 Louisville, Kentucky 40202
Attention: General Counsel Attention: General Counsel
Fax: (214) 640-6801 Fax: (502) 627-2585
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
10.3 ASSIGNMENT; BINDING EFFECT; BENEFIT. Neither this Agreement nor
any of the rights interests or obligations hereunder shall be assigned by any of
the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties and any purported assignment without such
prior written consent of the other parties shall be void; PROVIDED, HOWEVER,
that Parent may assign this Agreement to any of its subsidiaries or affiliates
whether or not such subsidiaries or affiliates exist at the date hereof;
PROVIDED, FURTHER, that no such assignment shall relieve Parent of any of
its obligations hereunder. Subject to the preceding sentence, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns. Notwithstanding anything
contained in this Agreement to the contrary, except for the provisions of
Section 7.8 or 7.9, which are expressly intended to be enforceable by the
beneficiaries thereof, nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
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10.4 ENTIRE AGREEMENT. This Agreement, the Company Disclosure
Letter, the Securities Purchase Agreements and the Confidentiality Agreement
dated December 28, 1994, between the Company and Parent constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings (oral and written) among the
parties with respect thereto. No addition to or modification of any provision
of this Agreement shall be binding upon any party hereto unless made in writing
and signed by all parities hereto.
10.5 AMENDMENT. This Agreement may be amended by the parties hereto
only by an instrument in writing signed by or on behalf of each of the parties
hereto.
10.6 GOVERNING LAW; CHOICE OF FORUM.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to its rules of
conflict of laws.
(b) Each of the parties hereto irrevocably (i) agrees that any
legal suit, action or proceeding brought by any of the parties hereto against
another arising out of or based upon this Agreement or the transaction
contemplated hereby may be instituted in any state or federal court located in
the State of Delaware, (ii) waives, to the fullest extent it may effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any such proceeding and (iii) submits to the exclusive jurisdiction of such
courts in any such suit, action or proceeding.
10.7 COUNTERPARTS. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies of
this Agreement, each of which may be signed by less than all of the parties
hereto, but together all such copies are signed by all of the parties hereto.
10.8 HEADINGS. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
10.9 INTERPRETATION. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and vice
versa.
10.10 WAIVERS. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties, covenants
or agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision hereunder shall not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provisions hereunder.
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10.11 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or otherwise affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction. If any
provisions of this Agreement is so broad as to be unenforceable, the provision
shall be interpreted to be only so broad as is enforceable.
IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf as of the day and year first
written above.
LG&E ENERGY CORP.
By: /s/ Edward J. Casey, Jr.
-------------------------------
Name: Edward J. Casey, Jr.
Title: Group President, LG&E Energy Services
CAROUSEL ACQUISITION CORPORATION
By: /s/ Edward J. Casey, Jr.
-------------------------------
Name: Edward J. Casey, Jr.
Title: President
HADSON CORPORATION
By: /s/ Greg G. Jenkins
-------------------------------
Name: Greg G. Jenkins
Title: President and Chief Executive Officer
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EXHIBIT A
The opinion of Gardner, Carton & Douglas, counsel to Parent and Merger Sub
shall be substantially to the following effects:
1. Each of Parent and Merger Sub is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation. Each of Parent and Merger Sub is duly licensed or qualified to
do business as a foreign corporation and is in good standing under the laws of
each other state of the United States in which the character of the properties
owned or leased by it therein or in which the transaction of its business makes
such qualification necessary, except where the failure to be so licensed or
qualified or be in good standing would not have a material adverse effect on the
ability of Parent or Merger Sub to perform its respective obligations under the
Merger Agreement (a "PARENT MATERIAL ADVERSE EFFECT"). Parent has all requisite
corporate power and authority to own, operate and lease its properties and carry
on its business as now conducted. Merger Sub was incorporated on January 30,
1995, and, to such counsel's knowledge, since its incorporation Merger Sub has
not conducted any business activities except in connection with the transactions
contemplated in this Agreement.
2. Each of Parent and Merger Sub has the requisite corporate power and
authority to execute and deliver the Merger Agreement and all agreements and
documents contemplated thereby, and the consummation by Parent and Merger Sub of
the transactions contemplated thereby has been duly authorized by all requisite
corporate action. The Merger Agreement constitutes, and all agreements and
documents contemplated thereby (when executed and delivered pursuant thereto for
value received) will constitute, the valid and legally binding obligations of
Parent and Merger Sub, enforceable against each of them in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights and general principles of
equity.
3. Neither the execution and delivery by Parent and Merger Sub of the
Merger Agreement, nor the consummation by Parent and Merger Sub of the
transactions contemplated thereby in accordance with the terms thereof, will:
(1) result in a breach of any provisions of the Certificate of Incorporation or
By-laws of Parent or Merger Sub; (2) violate or result in a breach of any
provisions of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
or in a right of termination or cancellation of, or accelerate the performance
required by, or give rise to any payments or compensation under, or result in
the creation of any lien, security interest, charge or encumbrance upon any of
the properties of Parent or Merger Sub under, or result in being declared void,
voidable, or without further binding effect, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust or any material
license, franchise, permit, lease, contract, agreement or other instrument,
commitment or obligation to which Parent or Merger Sub is a party, or by which
Parent or Merger Sub or any of their properties is bound or affected, except for
any of the foregoing matters which would not, individually or in the aggregate,
have a Parent Material Adverse Effect and will not impose any liability on the
Company; (3) violate any order, writ, injunction, decree, law, statute, rule or
regulation applicable to Parent or Merger Sub or any of their respective
property or assets of which were are aware
<PAGE>
(after consultation with Parent's General Counsel), except for violations which
would not individually or in the aggregate, have a Parent Material Adverse
Effect; or (4) based upon the representation and warranty of the Company made in
Section 5.19 and compliance by the Company with Section 7.4, require any
consent, approval or authorization of, or declaration, filing or registration
with, any domestic governmental or regulatory authority (other than the
Regulatory Filings), or any other person or entity, the failure to obtain or
make which would have, individually or in the aggregate, a Parent Material
Adverse Effect.
<PAGE>
EXHIBIT B
The opinion of Akin, Gump, Strauss, Hauner & Feld, L.L.P., special counsel
to the Company, shall be substantially to the following effects:
1. The Company is a corporation, duly incorporated, validly existing and
in good standing under the laws of the State of Delaware. The Company is duly
licensed or qualified to do business as a foreign corporation and is in good
standing under the laws of each other state of the United States in which the
character of the properties owned or leased by it therein or in which the
transaction of its business makes such qualification necessary [relying as to
factual matters in support thereof solely upon an Officer's Certificate of the
Company], except where the failure to be so licensed or qualified or be in good
standing would not reasonably be expected to have a Material Adverse Effect. The
Company has all requisite corporate power and authority to own, operate and
lease its properties and carry on its business as now conducted.
2. The Company has the requisite corporate power and authority to execute
and deliver the Merger Agreement and all agreements and documents contemplated
thereby. The Company Board Approval as well as all approvals of the stockholders
of the Company required under the DGCL, the charter and bylaws of the Company
and the Merger Agreement have been duly obtained and remain in full force and
effect and constitute all requisite corporate action on the part of the Company
necessary for the consummation by the Company of the transactions contemplated
by the Merger Agreement. The Merger Agreement constitutes the valid and legally
binding obligation of the Company. The Company Board Approval constitutes all
necessary action to approve the transactions contemplated by the Merger
Agreement and the Securities Purchase Agreements pursuant to Section 203(a) of
the DGCL.
3. The authorized capital stock of the Company is as set forth in Section
5.4 of the Merger Agreement.
4. Each of Hadson Gas Systems, Inc. ("Gas Systems"); Llano, Inc.
("Llano"); Minerals, Inc. ("Minerals"); Western Natural Gas and Transmission
Corporation ("Western"); Hadson Gas Co. ("Gas Co."); Hadson Gas Marketing Co.
("Gas Marketing") and Hadson Gas Gathering & Processing Co. ("Hadson Gas
Processing") is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, has the corporate
power and authority to own its properties and to carry on its business as it is
now being conducted, and is duly licensed or qualified to do business as a
foreign corporation and is in good standing under the laws of each other state
of the United States in which the character of the properties owned or leased by
it therein or in which the transaction of its business makes such qualification
necessary [relying as to factual matters in support thereof solely upon an
Officer's Certificate from each of such companies], except where the failure to
be so licensed or qualified would not reasonably be expected to have a Material
Adverse Effect. To the Opinion Giver's Knowledge, all of the outstanding stock
of Gas Systems, Llano, Minerals, Western Gas Co., Gas Marketing and Hadson Gas
Processing is owned directly or indirectly by the Company free and clear of all
liens, pledges, security interests, claims or other encumbrances.
<PAGE>
5. Neither the execution and delivery by the Company of the Merger
Agreement nor the consummation by the Company of the Merger Agreement in
accordance with its terms:
a. contravenes or results in a breach of any provision of the certificate
of incorporation or by-laws (or similar governing documents) of the
Company;
b. violates, or constitutes a default under, or permits the termination
of, any agreement, contract, lease or other commitment of the Company
filed as an Exhibit to any Company Report filed by the Company with
the SEC after December 31, 1993, other than as set forth in the
Disclosure Letter or as set forth in Schedule 1 [to be attached to
this opinion at the time of delivery].
c. to the Opinion Giver's Knowledge, violates any order, writ,
injunction, decree, law, statute, rule or regulation applicable to the
Company or any of its properties or assets, except for violations
which would not reasonably be expected to have a Material Adverse
Effect or to prevent or delay consummation of the transactions
contemplated by the Merger Agreement.
d. other than the filings provided for in Article I of the Merger
Agreement and filings required under the HSR Act or the Exchange Act
(collectively the "Regulatory Filings"), require any consent, approval
or authorization of, or declaration, filing or registration with, any
domestic, governmental or regulatory authority, or any other person or
entity, which has not been obtained or made except for those the
failure to obtain or make would not reasonably be expected to have a
Material Adverse Effect or prevent or delay consummation of the
transactions contemplated by the Merger Agreement.
6. To the Opinion Giver's Knowledge, there is no litigation, proceeding
or governmental investigation pending or threatened against or relating to the
Company, any of its subsidiaries or any of their respective properties which
questions the validity of, or seeks damages in connection with, the Merger
Agreement or, except as set forth in the Disclosure Letter, which, if determined
adversely to the Company or its subsidiaries, would result in a Material Adverse
Effect on the Company.
7. The Company is not (a) an "investment company" or, to the Opinion
Giver's Knowledge, a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, or (b) a "holding
company" or, to the Opinion Giver's Knowledge, a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
2
<PAGE>
8. The statements in the definitive Proxy Statement or Information
Statement delivered to the stockholders of the Company in connection with the
Merger under the caption "Merger Agreement" [or other caption employed under
which the Merger Agreement and the transactions contemplated thereby are
summarized or described], insofar as such statements purport to summarize the
provisions of the Merger Agreement and the transactions contemplated thereby,
fairly summarize or describe such provisions of the Merger Agreement in all
material respects.
3
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EXHIBIT 3
SECURITIES PURCHASE AGREEMENT
AMONG
SANTA FE ENERGY RESOURCES, INC.
AS SELLER
AND
LG&E ENERGY CORP.
AND
CAROUSEL ACQUISITION CORPORATION
AS BUYERS
DATED FEBRUARY 10, 1995
<PAGE>
TABLE OF CONTENTS
PAGE
----
1. SALE AND PURCHASE.................................................... 1
2. PURCHASE PRICE....................................................... 2
2.1. Purchase Price................................................. 2
3. REPRESENTATIONS AND WARRANTIES OF BUYERS............................. 2
3.1. Existence; Good Standing....................................... 2
3.2. Authorization, Validity and Effect of Agreements............... 2
3.3. No Violation................................................... 2
3.4. Availability of Funds.......................................... 3
3.5. Purchase for Investment........................................ 3
4. REPRESENTATIONS AND WARRANTIES OF SELLER............................. 3
4.1. Existence; Good Standing....................................... 3
4.2. Authorization, Validity and Effect of Agreements............... 3
4.3. No Violation................................................... 4
4.4. Ownership of Securities........................................ 4
4.5. Absence of Certain Agreements.................................. 4
5. COVENANTS............................................................ 5
5.1. No Disposition; No Lien........................................ 5
5.2. Payments; No Solicitation...................................... 5
5.3. Proxy.......................................................... 5
5.4. Purchase from Prudential; Consummation of the Merger........... 5
5.5. No Amendment................................................... 6
5.6. Seller's Agreement Regarding Expenses of the Merger............ 6
5.7. Agreement Not to Waive Section 8.1(e) of the Merger Agreement.. 6
5.8. Seller's Agreement to Assist with the Settlement............... 6
6. CONDITIONS........................................................... 6
6.1. Condition to Obligation of Seller to Sell the Securities....... 6
6.2. Conditions to Obligation of Buyers to Purchase the Securities.. 7
7. TERMINATION.......................................................... 7
7.1. Termination by Mutual Consent.................................. 7
7.2. Termination by Buyers or Seller................................ 7
7.3. Automatic Termination.......................................... 8
7.4. Effect of Termination and Abandonment.......................... 8
7.5. Extension; Waiver.............................................. 8
8. GENERAL PROVISIONS................................................... 8
i
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8.1. Survival of Representations and Warranties..................... 8
8.2. Notices........................................................ 8
8.3. Assignment; Binding Effect; Benefit............................ 9
8.4. Entire Agreement............................................... 9
8.5. Amendment...................................................... 9
8.6. Governing Law; Choice of Forum................................. 9
8.7. Counterparts................................................... 10
8.8. Headings....................................................... 10
8.9. Interpretation................................................. 10
8.10. Waivers........................................................ 10
8.11. Severability................................................... 10
8.12. Enforcement of Agreement....................................... 10
8.13. Publicity...................................................... 11
ii
<PAGE>
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "AGREEMENT"), dated February 10,
1995, is entered into among Santa Fe Energy Resources, Inc., a Delaware
corporation ("SELLER"), LG&E Energy Corp., a Kentucky corporation
("PARENT"), and Carousel Acquisition Corporation, a Delaware corporation
("MERGER SUB") (Parent and Merger Sub hereinafter referred to as "BUYERS").
WITNESSETH
WHEREAS, Seller is the owner of 10,395,665 shares of common stock, par
value $.01 per share (the "COMMON STOCK"), 2,335,907 shares of Senior
Cumulative Preferred Stock, Series A, par value $.01 per share (the "SENIOR
PREFERRED STOCK"), of Hadson Corporation, a Delaware corporation (the
"COMPANY"), and $2.35 million in aggregate principal amount of 9% Junior Notes
(the "9% JUNIOR NOTES") of the Company (the foregoing securities, together
with all dividends, distributions and payments declared, set aside or paid with
respect thereto after the date hereof are collectively referred to herein as the
"SECURITIES"); and
WHEREAS, concurrently with the execution and delivery of this Agreement,
Parent and Merger Sub have advised the Seller that they are entering into an
Agreement and Plan of Merger with the Company in the form of Exhibit A hereto
(the "MERGER AGREEMENT"); and
WHEREAS, concurrently with the execution and delivery of this Agreement,
Parent and Merger Sub have advised Seller that they are entering into a
Securities Purchase Agreement (the "PRUDENTIAL SECURITIES PURCHASE AGREEMENT")
with The Prudential Insurance Company of America, a New Jersey corporation,
Pruco Life Insurance Company, an Arizona corporation, and Prusupply, Inc., a
Delaware corporation (collectively, "PRUDENTIAL"); and
WHEREAS, Buyers desire to purchase from Seller and Seller desires to sell
to Buyers the Securities owned by Seller upon the terms and conditions set forth
in this Agreement.
NOW, THEREFORE, in consideration of the mutual benefits to be derived from
this Agreement and of the representations, warranties, conditions, covenants and
agreements hereinafter contained, Buyers and Seller hereby agree as follows:
1. SALE AND PURCHASE.
(a) Seller hereby agrees to sell, transfer, assign and deliver to
Buyers and Buyers hereby agree to purchase, at the time specified in Section
1(b), from Seller the Securities for the Purchase Price hereinafter specified.
<PAGE>
(b) After all conditions set forth in Article 6 hereof have been
satisfied or waived and immediately prior to the Effective Time (as defined in
of the Merger Agreement) (the "CLOSING TIME") (i) Seller will deliver to
Buyers, free and clear of all liens, restrictions, claims, charges and
encumbrances of any nature, certificate(s) and notes representing the
Securities, such certificate(s) and notes being in negotiable form duly endorsed
by Seller on the reverse side of such certificate(s) or on transfer powers
attached to such certificate(s) or notes as may be necessary for transfer upon
the transfer books and records of the Company into the name of Buyers, either
Buyer or a designee of Parent, and otherwise in form for good delivery, and (ii)
Buyers will wire transfer immediately available funds in the aggregate amount
set forth in Section 2 of this Agreement in payment of the Purchase Price to the
account designated in Schedule I hereto.
2. PURCHASE PRICE.
2.1. PURCHASE PRICE. The consideration to be paid by Buyers to
Seller for the Securities shall be $55,250,000 (the "PURCHASE PRICE").
3. REPRESENTATIONS AND WARRANTIES OF BUYERS.
Buyers hereby represent and warrant to Seller as follows:
3.1. EXISTENCE; GOOD STANDING. Each of Parent and Merger Sub is
a corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation.
3.2. AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Each of
Parent and Merger Sub has the requisite corporate power and authority to execute
and deliver this Agreement and all agreements and documents contemplated hereby,
and such execution and delivery and consummation of the transactions hereby and
thereby contemplated have been duly authorized by all requisite corporate
action. This Agreement constitutes, and all agreements and documents
contemplated hereby (when executed and delivered pursuant hereto for value
received) will constitute, the valid and legally binding obligations of Parent
and Merger Sub, enforceable against the Parent and Merger Sub in accordance with
their respective terms, subject to applicable bankruptcy, insolvency, moratorium
or other similar laws relating to creditors' rights and general principles of
equity.
3.3. NO VIOLATION. Neither the execution and delivery by Parent
and Merger Sub of this Agreement, nor the consummation by Parent and Merger Sub
of the transactions contemplated hereby in accordance with the terms hereof,
will: (i) result in a breach of any provisions of the Certificate of
Incorporation or By-laws of Parent or Merger Sub; (ii) violate or result in a
breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination or cancellation of, or give rise to a right of termination or
cancellation of, or accelerate the performance required by, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
material properties of Parent or its subsidiaries under, or result in being
declared void, voidable, or without further binding effect, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
2
<PAGE>
deed of trust or any license, franchise, permit, lease, contract, agreement or
other instrument, commitment or obligation to which Parent or any of its
subsidiaries is a party, or by which Parent or any of its subsidiaries or any of
their properties is bound or affected, except for any of the foregoing matters
which would not have a material adverse effect on the ability of Parent or
Merger Sub to perform their obligations hereunder (a "Parent MATERIAL ADVERSE
EFFECT") and will not impose any liability on Seller or (iii) based on the
representation and warranty of the Company set forth in Section 5.19 of the
Merger Agreement and compliance by the Company with Section 7.4 of the Merger
Agreement, require any consent, approval or authorization of, or declaration,
filing or registration with, any domestic governmental or regulatory authority
(other than filings and approvals required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR ACT") and filings by Ultimate
Parent with the Securities and Exchange Commission (the "SEC")), the failure
to obtain or make which would have a Parent Material Adverse Effect.
3.4. AVAILABILITY OF FUNDS. Parent will have available at the
Closing Time sufficient funds to enable it to consummate the transactions
contemplated by this Agreement, the Prudential Securities Purchase Agreement,
and the Merger Agreement.
3.5. PURCHASE FOR INVESTMENT. Buyers are purchasing the
Securities for investment and not with a view to distribution.
3.6. NO BROKERS. Buyers have not entered into any contract,
arrangement or understanding with any person or firm which may result in the
obligation of the Company or Seller to pay any finder's fee, brokerage or
agent's commission or other like payment in connection with the negotiations
leading to this Agreement or the consummation of the transactions contemplated
hereby.
4. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents and warrants to Buyers as follows:
4.1. EXISTENCE; GOOD STANDING. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation.
4.2. AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Seller
has the requisite corporate power and authority to execute and deliver this
Agreement and all agreements and documents contemplated hereby and such
execution and delivery and consummation of the transactions hereby and thereby
contemplated have been duly authorized by all requisite corporate action. This
Agreement constitutes, and all agreements and documents contemplated hereby to
which the Seller is or will be a party (when executed and delivered pursuant
hereto for value received), will constitute, the valid and legally binding
obligations of Seller, enforceable against the Seller in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights and general principles of
equity.
3
<PAGE>
4.3. NO VIOLATION. Neither the execution and delivery by Seller
of this Agreement, nor the consummation by Seller of the transactions
contemplated hereby in accordance with the terms hereof, will: (i) result in a
breach of any provisions of the Certificate of Incorporation or By-laws of
Seller, (ii) violate or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination or cancellation of, or
give rise to a right of termination or cancellation of, or accelerate the
performance required by, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the material properties of Seller or
its subsidiaries under, or result in being declared void, voidable, or without
further binding effect, any of the terms, conditions or provisions or any note,
bond, mortgage, indenture, deed of trust or any license, franchise, permit,
lease, contract, agreement or other instrument, commitment or obligation to
which Parent or any of its Subsidiaries is a party, or by which Seller or any of
its subsidiaries or any of their properties is bound or affected, except for any
of the foregoing matters which would not have a material adverse effect on the
ability of Seller to perform its obligations hereunder (a "SELLER MATERIAL
ADVERSE EFFECT") and will not impose any liability on any Buyer; or (iii)
require any consent, approval or authorization of, or declaration, filing or
registration with, any domestic governmental or regulatory authority (other than
filings and approvals required under the HSR Act and filing by Seller of an
amendment to Sellers' Schedule 13D regarding its beneficial ownership of Company
securities), the failure to obtain or make which would have a Seller Material
Adverse Effect.
4.4. OWNERSHIP OF SECURITIES. Seller has good and valid title to
the Securities, free and clear of all liens, restrictions, claims, charges and
encumbrances of any nature whatsoever other than those arising under the Voting
Agreement, dated as of December 14, 1993 among the Seller, Prudential and
certain of its affiliates (the "VOTING AGREEMENT") by virtue of Seller's
agreement contained therein with respect to the voting of its shares of Common
Stock for the election of Company directors. Seller has no interest, of record
or beneficially, in the investment securities of the Company, or any right to
acquire same, except for the Securities. Seller has full power and authority to
sell, assign and transfer the Securities. Buyers will acquire good and valid
title to the Securities, free and clear of all liens, restrictions, claims,
charges and encumbrances of any nature whatsoever arising from or in respect of
Seller, assuming Buyers are bona fide purchasers of such Securities within the
meaning of Section 8-302 of the Uniform Commercial Code of the State of
Delaware. Seller, upon request, will execute any additional documents
reasonably necessary to complete the transfer of the Securities to Buyers.
4.5. ABSENCE OF CERTAIN AGREEMENTS. Neither Seller nor any of
its officers, directors or authorized representatives has entered into any
agreement, letter of intent or similar agreement (whether oral or written) with
any party other than Buyers whereby all or a substantial part of the Company,
its capital stock or its debt instruments would be sold, merged, consolidated,
transferred or otherwise combined with or into another entity.
4.6. NO BROKERS. Seller has not entered into any contract,
arrangement or understanding with any person or firm, including without
limitation any director, officer or employee of the Company, which may result in
the obligation of Buyers or the Company to pay any success fee, finder's fee,
brokerage or agent's commission or other like payment
4
<PAGE>
in connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby. Other than the Company's
arrangements with S.G. Warburg & Co. Inc. and Dillon, Read & Co. Inc. in
connection with the Merger, Seller is not aware of any claim against the Company
for payment of any success fee, finder's fee, brokerage or agent's commission or
other like payment in connection with the negotiations leading to this Agreement
or the consummation of the transactions contemplated hereby.
5. COVENANTS.
5.1. NO DISPOSITION; NO LIEN. Seller will not, between the date
hereof and the earlier of the Closing Time and the termination of this
Agreement, sell, dispose of, allow a lien to be created against or, in any other
manner, encumber any of the Securities or enter into any agreement with any
person (other than Buyers) with respect to any of the foregoing matters,
provided that the continued existence of the Voting Agreement shall not
constitute a breach or violation of this Section 5.1.
5.2. PAYMENTS; NO SOLICITATION. Seller acknowledges that, any
payments to Seller in respect of dividends, interest or principal on any of the
Securities declared, set aside or paid are included as part of the Securities
for purposes of this Agreement, and agrees to assign and deliver to Buyers at
the Closing Time such payments. Seller agrees that, from and after its
execution of this Agreement through the earlier to occur of the Closing Time and
termination of this Agreement, it shall not, nor shall it permit any of its
subsidiaries to, and it shall use its best efforts to cause its officers,
directors or employees, and all investment bankers, attorneys or other advisors
or representatives retained by Seller or any of its subsidiaries not to, except
to the extent permitted by the Board of Directors of the Company pursuant to
Section 7.1 of the Merger Agreement (a) solicit or encourage the submission of,
any Acquisition Proposal (as hereinafter defined), (b) enter into any agreement
with respect to any Acquisition Proposal or (c) participate in any discussions
or negotiations regarding, or furnish to any person any information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes, an Acquisition Proposal. For purposes of this
Agreement, "ACQUISITION PROPOSAL" means any proposal or offer for a merger or
other business combination involving the Company or to acquire a material equity
interest in, or a substantial portion of the assets of, the Company, other than
as contemplated by this Agreement.
5.3. PROXY. Promptly following its execution of this Agreement,
Seller will grant to Parent a proxy in the form attached hereto as Exhibit B
entitling Parent to vote all shares of Common Stock and Senior Preferred Stock
owned by Seller on the proposal to approve the Merger Agreement and the merger
contemplated thereby (the "MERGER") at the meeting of the Company's
stockholders called to vote on such proposal or any adjournment thereof,
provided that such proxy shall be exercisable by the Buyers only if Seller fails
or refuses to vote such shares for such proposal at such stockholders' meeting
or any adjournment thereof. Such proxy shall automatically terminate upon
termination of this Agreement but shall otherwise be irrevocable.
5
<PAGE>
5.4. PURCHASE FROM PRUDENTIAL; CONSUMMATION OF THE MERGER.
Concurrently with the purchase of the Securities at the Closing Time, the Buyers
will purchase the securities to be purchased pursuant to the Prudential
Securities Purchase Agreement subject to the terms and conditions thereof. The
Buyers agree to consummate the Merger immediately after the Closing Time subject
to the terms and conditions of the Merger Agreement.
5.5. NO AMENDMENT. Without the express prior written consent of
the Seller, the Buyers agree not to amend or modify the Merger Agreement or the
Prudential Securities Purchase Agreement in any respect. Seller agrees not to
terminate the letter agreement with the Company dated December 15, 1994 and the
payment deferral referred to therein, prior to Closing (or the earlier
termination of the Merger Agreement).
5.6. SELLER'S AGREEMENT REGARDING EXPENSES OF THE MERGER. To the
extent set forth in Section 7.8 of the Merger Agreement, Seller agrees to pay
the expenses incurred by the Company in connection with consummating the
transactions contemplated by the Merger Agreement.
5.7. AGREEMENT NOT TO WAIVE SECTION 8.1(E) OF THE MERGER
AGREEMENT. Without the prior written consent of Seller, Buyers agree not to
waive the condition to closing of the Merger set forth in Section 8.1(e) of the
Merger Agreement.
5.8. SELLER'S AGREEMENT TO ASSIST WITH THE SETTLEMENT. Seller
agrees to use all commercially reasonable efforts to assist the Company and
Buyers to settle the pending lawsuit referred to in Section 7.11 of the Merger
Agreement; PROVIDED, HOWEVER, that this provision shall not be construed to
require the Seller to agree to economic terms for settlement that it determines
to be unacceptable.
6. CONDITIONS.
6.1. CONDITION TO OBLIGATION OF SELLER TO SELL THE SECURITIES.
The obligation of Seller to sell the Securities shall be subject to the
fulfillment at or prior to the Closing Time of the following conditions:
(a) Buyers shall have performed in all material respects their
agreements contained in this Agreement required to be performed on or prior to
the Closing Time and the representations and warranties of Buyers contained in
this Agreement shall be true and correct in all material respects as of the date
of this Agreement and as of the Closing Time, as though such representations
were made at, and effective as of, such time, and Seller shall have received a
certificate of the President or a Vice President of Parent, dated the date of
the Closing Time, certifying to such effect; and
(b) The waiting period under the HSR Act applicable to the
transactions contemplated hereby shall have expired or been terminated and any
other required regulatory approvals shall have been obtained;
6
<PAGE>
(c) The Board of Directors of the Company shall have received from
Dillon, Read & Co. Inc. confirmation, as of the date of the proxy or information
statement relating to the Merger, of its opinion described in Section 5.18 of
the Merger Agreement;
(d) All conditions to consummation of the Merger prescribed by the
Merger Agreement shall have been satisfied or waived (other than consummation of
the purchases and sales contemplated by this Agreement and the Prudential
Securities Purchase Agreement); and
(e) Seller shall have received from counsel to Buyers an opinion,
in form reasonably satisfactory to Seller, covering the matters that are the
subject of Sections 3.1 and 3.2 or other evidence reasonably satisfactory to
Seller evidencing the accuracy of the representations and warranties set forth
in Sections 3.1 and 3.2.
6.2. CONDITIONS TO OBLIGATION OF BUYERS TO PURCHASE THE
SECURITIES. The obligations of Buyers to purchase the Securities shall be
subject to the fulfillment at or prior to the Closing Time of the following
conditions:
(a) Seller shall have performed in all material respects their
agreements contained in this Agreement required to be performed on or prior to
the Closing Time and the representations and warranties of Seller contained in
this Agreement shall be true and correct in all material respects as of the date
of this Agreement and as of the Closing Time as though such representations were
made at, and effective as of, such time, and Buyers shall have received a
certificate of Seller, dated the date of the Closing Time, certifying to such
effect;
(b) The waiting period under the HSR Act applicable to the
transactions contemplated hereby shall have expired or been terminated and any
other required regulatory approvals shall have been obtained;
(c) All conditions to consummation of the Merger prescribed by the
Merger Agreement shall have been satisfied or waived (other than consummation of
the purchases and sales contemplated by this Agreement and the Prudential
Securities Purchase Agreement); and
(d) Buyers shall have received from counsel to Seller an opinion,
in form reasonably satisfactory to Buyers, covering the matters that are the
subject of Sections 4.1 and 4.2 or other evidence reasonably satisfactory to
Buyer evidencing the accuracy of the representations and warranties set forth in
Sections 4.1 and 4.2.
7. TERMINATION.
7.1. TERMINATION BY MUTUAL CONSENT. This Agreement may be
terminated and the purchase and sale may be abandoned at any time prior to the
Closing Time by the mutual consent of Buyers and Seller.
7
<PAGE>
7.2. TERMINATION BY BUYERS OR SELLER. This Agreement may be
terminated and the purchase and sale may be abandoned by Buyers or Seller if (a)
all conditions to closing shall not have been satisfied or waived and the
Closing Time shall not have occurred by June 30, 1995, (b) a United States
federal or state court of competent jurisdiction or United States federal or
state governmental, regulatory or administrative agency or commission shall have
issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement or the Merger Agreement and such order, decree, ruling or other
actions shall have become final and non-appealable; provided, that the party
seeking to terminate this Agreement or the Merger Agreement pursuant to clause
(b) of this Section 7.2 shall have used all reasonable commercial efforts to
remove such injunction, order or decree, (c)at any time after 5:00 p.m. on March
15, 1995, if the Settlement (as such term in defined in Section 7.11 of the
Merger Agreement) has not been entered into by each of the persons who are
parties thereto and filed with the Court (as such term is defined in Section
7.11 of the Merger Agreement) or (d) if, at any time prior to the entry of the
scheduling order forming part of the Settlement, Seller objects to the economic
terms of the proposed Settlement, unless the terms to which Seller objects are
otherwise adequately provided for to Seller's reasonable satisfaction.
7.3. AUTOMATIC TERMINATION. This Agreement shall terminate
automatically upon termination of the Merger Agreement.
7.4. EFFECT OF TERMINATION AND ABANDONMENT. In the event of
termination of this Agreement pursuant to this Article 7, all obligations of the
parties hereto shall terminate. In the event of termination of this Agreement,
however, nothing herein shall prejudice the ability of the non-breaching party
to seek damages from any other party for any breach of this Agreement, including
without limitation, attorneys' fees and the right to pursue any remedy at law or
in equity.
7.5. EXTENSION; WAIVER. At any time prior to the first to occur
of the Closing Time and the termination of this Agreement, any party hereto may,
to the extent legally allowed, (a) extend the time for the performance of any of
the obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions for the benefit of such party contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by or
on behalf of the party granting such extension or waiver.
8. GENERAL PROVISIONS.
8.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made in this Agreement shall terminate one year
after the Closing Time.
8.2. NOTICES. Any notice required to be given hereunder shall be
sufficient if in writing, and sent by facsimile transmission and by courier
service (with proof of
8
<PAGE>
service), hand delivery or certified or registered mail (return receipt
requested and first-class postage prepaid), addressed as follows:
If to Buyers: If to Seller:
LG&E Energy Corp. Santa Fe Energy Resources, Inc.
220 West Main Street 1616 S. Voss Road
P.O. Box 32030 Houston, Texas 77056
Louisville, Kentucky 40202 Attention: David L. Hicks
Attention: President Telephone: (713) 507-5335
Fax: (502) 627-2995 Fax: (713) 507-5341
With a copy to: With a copy to:
LG&E Energy Corp. G. Michael O'Leary
220 West Main Street Andrews & Kurth L.L.P.
P.O. Box 32030 4200 Texas Commerce Tower
Louisville, Kentucky 40202 Houston, Texas 77002
Attention: General Counsel Telephone: (713) 220-4360
Fax: (502) 627-2585 Fax: (713) 220-4285
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
8.3. ASSIGNMENT; BINDING EFFECT; BENEFIT. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties; PROVIDED, HOWEVER, that Buyers
may assign this Agreement to any of their subsidiaries or affiliates whether or
not such subsidiaries or affiliates exist at the date hereof; PROVIDED
FURTHER, that no such assignment shall relieve Parent of any of its
obligations hereunder. Subject to the preceding sentence, this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
8.4. ENTIRE AGREEMENT. This Agreement, between Buyers and
Seller, constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior agreements and understandings
(oral and written) among the parties with respect thereto. No addition to or
modification of any provision of this Agreement shall be binding upon any party
hereto unless made in writing and signed by all parties hereto.
8.5. AMENDMENT. This Agreement may be amended by the parties
hereto only by an instrument in writing signed by or on behalf of each of the
parties hereto.
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8.6. GOVERNING LAW; CHOICE OF FORUM.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to its rules of
conflict of laws.
(b) Each of the parties hereto irrevocably (i) agrees that any
legal suit, action or proceeding brought by any of the parties hereto against
another arising out of or based upon this Agreement or the transaction
contemplated hereby may be instituted in any state or federal court located in
the State of Delaware, (ii) waives, to the fullest extent it may effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any such proceeding and (iii) submits to the exclusive jurisdiction of such
courts in any such suit, action or proceeding.
8.7. COUNTERPARTS. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies of
this Agreement, each of which may be signed by less than all of the parties
hereto, but together all such copies are signed by all of the parties hereto.
8.8. HEADINGS. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
8.9. INTERPRETATION. In this Agreement, unless the context
otherwise requires, words describing the singular number shall include the
plural and vice versa, and words denoting any gender shall include all genders
and words denoting natural persons shall include corporations and partnerships
and vice versa.
8.10. WAIVERS. Except as provided in this Agreement, no action
taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
any party hereto of a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any other
provision hereunder.
8.11. SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or otherwise affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, the provision
shall be interpreted to be only so broad as is enforceable.
8.12. ENFORCEMENT OF AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not
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performed in accordance with its specific terms or was otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof, this being in addition to any other remedy to
which they may be entitled at law or in equity.
8.13. PUBLICITY. The initial press release relating to this
Agreement shall be a press release issued jointly by Buyers, Seller, Prudential
and the Company and thereafter such parties shall, subject to their respective
legal obligations (including requirements of stock exchanges and other similar
regulatory bodies), agree upon the text of any press release, before issuing any
such press release or otherwise making public statements, with respect to the
transactions contemplated hereby and in making any filings with any federal or
state governmental or regulatory agency or with any national securities exchange
with respect thereto.
IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf as of the day and year first
written above.
LG&E ENERGY CORP.
By: /s/ Edward J. Casey, Jr.
----------------------------------------
Name: Edward J. Casey, Jr.
Title: Group President, LG&E Energy Services
CAROUSEL ACQUISITION CORPORATION
By: /s/ Edward J. Casey, Jr.
----------------------------------------
Name: Edward J. Casey, Jr.
Title: President
SANTA FE ENERGY RESOURCES, INC.
By: /s/ David L. Hicks
----------------------------------------
Name: David L. Hicks
Title: Vice President, Law and
General Counsel
11
<PAGE>
SCHEDULE I
Account Information:
[Omitted]
<PAGE>
LIST OF EXHIBITS AND SCHEDULES
Exhibit A - Form of Agreement and Plan of Merger
Exhibit B - Form of Proxy
Schedule I - Account Information
<PAGE>
EXHIBIT 4
SECURITIES PURCHASE AGREEMENT
AMONG
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
PRUCO LIFE INSURANCE COMPANY
AND
PRUSUPPLY, INC.
AS SELLERS
AND
LG&E ENERGY CORP.
AND
CAROUSEL ACQUISITION CORPORATION
AS BUYERS
DATED FEBRUARY 10, 1995
<PAGE>
TABLE OF CONTENTS
PAGE
----
1. SALE AND PURCHASE.................................................... 2
2. PURCHASE PRICE....................................................... 2
2.1. Purchase Price................................................. 2
3. REPRESENTATIONS AND WARRANTIES OF BUYERS............................. 2
3.1. Existence; Good Standing....................................... 2
3.2. Authorization, Validity and Effect of Agreements............... 2
3.3. No Violation................................................... 3
3.4. Availability of Funds.......................................... 3
3.5. Purchase for Investment........................................ 3
4. REPRESENTATIONS AND WARRANTIES OF SELLER............................. 4
4.1. Existence; Good Standing....................................... 4
4.2. Authorization, Validity and Effect of Agreements............... 4
4.3. No Violation................................................... 4
4.4. Ownership of Securities........................................ 4
4.5. Absence of Certain Agreements.................................. 5
5. COVENANTS............................................................ 5
5.1. No Disposition; No Lien........................................ 5
5.2. Payments; No Solicitation...................................... 5
5.3. Proxy.......................................................... 6
5.4. Amendment of HP Trust.......................................... 6
5.5. Purchase from Santa Fe; Consummation of the Merger............. 6
5.6. No Amendment................................................... 6
5.7. Seller's Agreement Regarding Expenses of the Merger............ 6
5.8. Agreement Not to Waive Section 8.1(e) of the Merger Agreement.. 6
5.9. Sellers' Agreement to Assist with the Settlement............... 6
6. CONDITIONS........................................................... 7
6.1. Condition to Obligation of the Sellers to Sell the Securities.. 7
6.2. Conditions to Obligation of Buyers to Purchase the Securities.. 7
7. TERMINATION.......................................................... 8
7.1. Termination by Mutual Consent.................................. 8
7.2. Termination by Buyers or Sellers............................... 8
7.3. Automatic Termination.......................................... 8
7.4. Effect of Termination and Abandonment.......................... 8
7.5. Extension; Waiver.............................................. 8
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8. GENERAL PROVISIONS................................................... 9
8.1. Survival of Representations and Warranties..................... 9
8.2. Notices........................................................ 9
8.3. Assignment; Binding Effect; Benefit............................ 10
8.4. Entire Agreement............................................... 10
8.5. Amendment...................................................... 10
8.6. Governing Law; Choice of Forum................................. 10
8.7. Counterparts................................................... 10
8.8. Headings....................................................... 11
8.9. Interpretation................................................. 11
8.10. Waivers........................................................ 11
8.11. Severability................................................... 11
8.12. Enforcement of Agreement....................................... 11
8.13. Publicity...................................................... 11
8.14. Consent and Waiver............................................. 11
ii
<PAGE>
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "AGREEMENT"), dated February 10,
1995, is entered into among The Prudential Insurance Company of America, a New
Jersey corporation, Pruco Life Insurance Company, an Arizona corporation, and
PruSupply, Inc., a Delaware corporation (collectively, the "SELLERS" and each
a "SELLER"), LG&E Energy Corp., a Kentucky corporation ("PARENT"), and
Carousel Acquisition Corporation, a Delaware corporation ("MERGER SUB")
(Parent and Merger Sub hereinafter referred to as "BUYERS").
WITNESSETH
WHEREAS, each of the Sellers owns (i) the number of shares of common
stock, par value $.01 per share (the "COMMON STOCK"), of Hadson Corporation, a
Delaware corporation (the "COMPANY"), specified on Schedule I hereto, (ii) the
rights and benefits (the "BENEFICIAL INTEREST") provided under the Agreement
and Declaration of Trust (the "HP TRUST") dated December 14, 1993 by and among
the Company, the Sellers and Liberty Bank and Trust Company of Oklahoma, N.A.,
in the number of shares of Common Stock specified on Schedule I hereto, (iii)
the number of shares of Junior Exercisable Automatically Convertible Preferred
Stock, Series B, par value $.01 per share (the "JUNIOR PREFERRED"), of the
Company specified on Schedule I hereto and (iv) $56,400,000 original aggregate
principal amount of 8% Senior Secured Notes due 2003 (the "8% SENIOR SECURED
NOTES") of the Company specified on Schedule I hereto (the foregoing securities
(including the Beneficial Interest), together with all dividends, distributions
and payments declared, set aside or paid with respect thereto after the date
hereof, other than regularly scheduled interest payments on the 8% Senior
Secured Notes, are collectively referred to herein as the "SECURITIES"); and
WHEREAS, concurrently with the execution and delivery of this Agreement,
Parent and Merger Sub have advised the Sellers that they are entering into an
Agreement and Plan of Merger with the Company in the form of Exhibit A hereto
(the "MERGER AGREEMENT"); and
WHEREAS, concurrently with the execution and delivery of this Agreement,
Parent and Merger Sub have advised the Sellers that they are entering into a
Securities Purchase Agreement (the "SANTA FE SECURITIES PURCHASE AGREEMENT")
with Santa Fe Energy Resources, Inc., a Delaware corporation ("SANTA FE"); and
WHEREAS, Buyers desire to purchase from the Sellers and the Sellers desire
to sell to Buyers the Securities upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual benefits to be derived from
this Agreement and of the representations, warranties, conditions, covenants and
agreements hereinafter contained, the Buyers and the Sellers hereby agree as
follows:
<PAGE>
1. SALE AND PURCHASE.
(a) The Sellers hereby agree to sell, transfer, assign and deliver
to Buyers and Buyers hereby agree to purchase, at the time specified in Section
1(b), from the Sellers the Securities for the Purchase Price hereinafter
specified.
(b) After all conditions set forth in Article 6 hereof have been
satisfied or waived and immediately prior to the Effective Time (as defined in
the Merger Agreement) (the "CLOSING TIME") (i) the Sellers will deliver to
Buyers, free and clear of all liens, restrictions, claims, charges and
encumbrances of any nature, certificate(s) and notes representing the
Securities, such certificate(s) and notes being in negotiable form duly
endorsed, without recourse and without any representation or warranty except as
expressly set forth herein, by each applicable Seller on the reverse side of
such certificate(s) or on transfer powers attached to such certificate(s) or
notes as may be necessary for transfer upon the transfer books and records of
the Company into the name of Buyers, either Buyer or a designee of Parent, and
otherwise in form for good delivery, and (ii) Buyers will wire transfer
immediately available funds in the aggregate amount set forth in Section 2 of
this Agreement in payment of the Purchase Price to the account or accounts
designated in Schedule II hereto.
2. PURCHASE PRICE.
2.1. PURCHASE PRICE. The consideration to be paid by Buyers to
the Sellers for the Securities shall be $63,000,000, plus an amount, if any,
equal to the interest accrued on the 8% Senior Secured Notes from the last
interest payment date on which interest was paid in full to, but not including,
the day on which the Closing Time shall occur (the "PURCHASE PRICE").
3. REPRESENTATIONS AND WARRANTIES OF BUYERS.
Buyers hereby represent and warrant to the Sellers as follows:
3.1. EXISTENCE; GOOD STANDING. Each of Parent and Merger Sub is
a corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation.
3.2. AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Each of
Parent and Merger Sub has the requisite corporate power and authority to execute
and deliver this Agreement and all agreements and documents contemplated hereby
and to perform its obligations hereunder and thereunder, and such execution and
delivery and consummation of the transactions hereby and thereby contemplated
have been duly authorized by all requisite corporate action on the part of each
of Parent and Merger Sub. This Agreement constitutes, and all agreements and
documents contemplated hereby to which each of Parent and Merger Sub is or will
be a party (when executed and delivered pursuant hereto for value received) will
constitute, the valid and legally binding obligations of Parent and Merger Sub,
enforceable against the Parent and Merger Sub in accordance with their
2
<PAGE>
respective terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights and general principles of
equity.
3.3. NO VIOLATION. Neither the execution and delivery by Parent
and Merger Sub of this Agreement, nor the consummation by Parent and Merger Sub
of the transactions contemplated hereby in accordance with the terms hereof,
will: (a) result in a breach of any provisions of the Certificate of
Incorporation or By-laws of Parent or Merger Sub; (b) violate or result in a
breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination or cancellation of, or give rise to a right of termination or
cancellation of, or accelerate the performance required by, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
material properties of Parent or its subsidiaries under, or result in being
declared void, voidable, or without further binding effect, any of the terms,
conditions or provisions of, any note, bond, mortgage, indenture, deed of trust
or any license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation to which Parent or any of its subsidiaries
is a party, or by which Parent or any of its subsidiaries or any of their
properties is bound or affected, except for any of the foregoing matters which
(i) would not have a material adverse effect on the ability of Parent or Merger
Sub to perform their obligations hereunder (a "PARENT MATERIAL ADVERSE
EFFECT") and (ii) will not impose any liability on any of the Sellers; or
(c)based on the representation and warranty of the Company set forth in Section
5.19 of the Merger Agreement and compliance by the Company with Section 7.4 of
the Merger Agreement, require any consent, approval or authorization of, or
declaration, filing or registration with, any domestic governmental or
regulatory authority (other than filings and approvals required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
ACT") and filings by Parent with the Securities and Exchange Commission (the
"SEC")), the failure to obtain or make which would have a Parent Material
Adverse Effect.
3.4. AVAILABILITY OF FUNDS. Parent will have available at the
Closing Time sufficient funds to enable it to consummate the transactions
contemplated by this Agreement, the S-Securities Purchase Agreement and the
Merger Agreement.
3.5. PURCHASE FOR INVESTMENT. Buyers are purchasing the
Securities for investment and not with a view to distribution.
3.6. NO BROKERS. Buyers have not entered into any contract,
arrangement or understanding with any person or firm which may result in the
obligation of the Company or any of the Sellers to pay any finder's fee,
brokerage or agent's commission or other like payment in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby.
3
<PAGE>
4. REPRESENTATIONS AND WARRANTIES OF SELLER.
Each Seller hereby represents and warrants to Buyers as follows:
4.1. EXISTENCE; GOOD STANDING. Each Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation.
4.2. AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Each
Seller has the requisite corporate power and authority to execute and deliver
this Agreement and all agreements and documents contemplated hereby and to
perform its obligations hereunder and thereunder, and such execution and
delivery and consummation of the transactions hereby and thereby contemplated
have been duly authorized by all requisite corporate action on the part of such
Seller. This Agreement constitutes, and all agreements and documents
contemplated hereby to which each Seller is or will be a party (when executed
and delivered pursuant hereto for value received), will constitute, the valid
and legally binding obligations of such Seller, enforceable against each such
Seller in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights and general principles of equity.
4.3. NO VIOLATION. Neither the execution and delivery by each
Seller of this Agreement, nor the consummation by each Seller of the
transactions contemplated hereby in accordance with the terms hereof, will: (a)
result in a breach of any provisions of the Certificate of Incorporation or
By-laws of each such Seller; (b) violate or result in a breach of any provision
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination or
cancellation of, or give rise to a right of termination or cancellation of, or
accelerate the performance required by, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the material properties of
any Seller or its subsidiaries under, or result in being declared void,
voidable, or without further binding effect, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust or any license,
franchise, permit, lease, contract, agreement or other instrument, commitment or
obligation to which any Seller or any subsidiary of any Seller is a party, or by
which any Seller or any subsidiary of any Seller or any of their respective
properties is bound or affected, except for any of the foregoing matters which
(i) would not have a material adverse effect on the ability of any Seller to
perform its obligations hereunder (a "SELLER MATERIAL ADVERSE EFFECT") and
(ii) will not impose any liability on any Buyer; or (c) require any consent,
approval or authorization of, or declaration, filing or registration with, any
domestic governmental or regulatory authority (other than filings and approvals
required under the HSR Act and filing by Sellers of an amendment to Sellers'
Schedule 13D regarding their beneficial ownership of Company securities), the
failure to obtain or make which would have a Seller Material Adverse Effect.
4.4. OWNERSHIP OF SECURITIES. Each Seller has good and valid
title to the Securities to be sold by such Seller, free and clear of all liens,
restrictions, claims, charges and encumbrances of any nature whatsoever other
than those arising (a) under the Voting Agreement, dated as of December 14, 1993
among the Sellers and the Santa Fe (the "VOTING AGREEMENT") by virtue of the
agreement of the Sellers contained therein with respect to the
4
<PAGE>
voting of their shares of Common Stock for the election of Company directors and
(b) under the HP Trust. Each Seller has no interest, of record or beneficially,
in the investment securities of the Company, or any right to acquire same,
except for the Securities. Each Seller has full corporate power and authority
to sell, assign and transfer the Securities. Buyers will acquire good and valid
title to the Securities, free and clear of all liens, restrictions, claims,
charges and encumbrances of any nature whatsoever arising from or in respect of
any Seller, assuming Buyers are bona fide purchasers of such Securities within
the meaning of Section 8-302 of the Uniform Commercial Code of the State of
Delaware. Each Seller, upon request, will execute any additional documents
reasonably necessary to complete the transfer of the Securities to Buyers.
4.5. ABSENCE OF CERTAIN AGREEMENTS. Neither any Seller nor any
of any Seller's officers, directors or authorized representatives has entered
into any agreement, letter of intent or similar agreement (whether oral or
written) with any party other than Buyers whereby the Securities would be
transferred to such party.
4.6. NO BROKERS. No Seller has entered into any contract,
arrangement or understanding with any person or firm, including without
limitation any director, officer or employee of the Company, which may result in
the obligation of Buyers or the Company to pay any success fee, finder's fee,
brokerage or agent's commission or other like payment in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby.
5. COVENANTS.
5.1. NO DISPOSITION; NO LIEN. Each Seller will not, between the
date hereof and the earlier of the Closing Time and the termination of this
Agreement, sell, dispose of, allow a lien to be created against or, in any other
manner, encumber any of the Securities or enter into any agreement with any
person (other than Buyers) with respect to any of the foregoing matters,
provided that the continued existence of the Voting Agreement shall not
constitute a breach or violation of this Section 5.1.
5.2. PAYMENTS; NO SOLICITATION. Each Seller acknowledges that,
any payments to any Seller in respect of dividends, interest or principal on any
of the Securities (other than regularly scheduled interest payments on the 8%
Senior Secured Notes) declared, set aside or paid are included as part of the
Securities for purposes of this Agreement, and agrees to assign and deliver to
Buyers at the Closing Time the right to such payments. Each Seller agrees that,
from and after its execution of this Agreement through the earlier to occur of
the Closing Time or termination of this Agreement, it shall not, nor shall it
permit any of its subsidiaries to, and it shall use its best efforts to cause
its officers, directors or employees, and all investment bankers, attorneys or
other advisors or representatives retained by such Seller or any of its
subsidiaries not to, except to the extent permitted by the Board of Directors of
the Company pursuant to Section 7.1 of the Merger Agreement (a) solicit or
encourage the submission of, any Acquisition Proposal (as hereinafter defined),
(b) enter into any agreement with respect to any Acquisition Proposal or (c)
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
any inquiries or the
5
<PAGE>
making of any proposal that constitutes, an Acquisition Proposal. For purposes
of this Agreement, "ACQUISITION PROPOSAL" means any proposal or offer for a
merger or other business combination involving the Company or to acquire a
material equity interest in or a substantial portion of the assets of the
Company, other than as contemplated by this Agreement.
5.3. PROXY. Promptly following its execution and delivery of
this Agreement, each Seller will grant to Parent a proxy in the form attached
hereto as Exhibit B entitling Parent to vote all shares of Common Stock owned by
such Seller on the proposal to approve the Merger Agreement and the merger
contemplated thereby (the "MERGER") at the meeting of the Company's
stockholders called to vote on such proposal or any adjournment thereof,
provided that any such proxy shall be exercisable by the Buyers only if the
Seller granting such proxy fails or refuses to vote such shares for such
proposal at such stockholders' meeting or any adjournment thereof. Such proxies
shall automatically terminate upon termination of this Agreement but shall
otherwise be irrevocable.
5.4. AMENDMENT OF HP TRUST. Promptly following the execution and
delivery of this Agreement, each Seller will use its best efforts to cause the
amendment of Section 13.01 of the HP Trust to remove the restriction on transfer
of the Beneficial Interest.
5.5. PURCHASE FROM SANTA FE; CONSUMMATION OF THE MERGER.
Concurrently with the purchase of the Securities at the Closing Time, the Buyers
will purchase the securities to be purchased pursuant to the Santa Fe Securities
Purchase Agreement subject to the terms and conditions thereof. The Buyers
agree to consummate the Merger immediately after the Closing Time subject to the
terms and conditions of the Merger Agreement.
5.6. NO AMENDMENT. Without the express prior written consent of
the Sellers, the Buyers agree not to amend or modify the Merger Agreement or the
Santa Fe Securities Purchase Agreement in any respect.
5.7. SELLER'S AGREEMENT REGARDING EXPENSES OF THE MERGER. To the
extent set forth in Section 7.8 of the Merger Agreement, Sellers agree to pay
the expenses incurred by the Company in connection with consummating the
transactions contemplated by the Merger Agreement. In addition, Sellers agree
to pay the fees and expenses of Sellers' counsel relating to the negotiation of
this Agreement and the Merger Agreement and the consummation of the transactions
contemplated hereby and thereby and to forego any right they may have to seek
reimbursement from the Company for such fees and expenses.
5.8. AGREEMENT NOT TO WAIVE SECTION 8.1(E) OF THE MERGER
AGREEMENT. Without the prior written consent of Sellers, Buyers agree not to
waive the condition to closing of the Merger set forth in Section 8.1(e) of the
Merger Agreement.
5.9. SELLERS' AGREEMENT TO ASSIST WITH THE SETTLEMENT. Sellers
agree to use reasonable efforts to assist the Company and Buyers in their
efforts to settle the pending lawsuit referred to in Section 7.11 of the Merger
Agreement, it being understood that
6
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Sellers shall not be required to make any payments in connection therewith
(except to the extent set forth in Section 7.8 of the Merger Agreement).
6. CONDITIONS.
6.1. CONDITION TO OBLIGATION OF THE SELLERS TO SELL THE
SECURITIES. The obligation of the Sellers to sell the Securities shall be
subject to the fulfillment at or prior to the Closing Time of the following
conditions:
(a) The Buyers shall have performed in all material respects their
agreements contained in this Agreement required to be performed on or prior to
the Closing Time and the representations and warranties of the Buyers contained
in this Agreement shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Time, as though such
representations were made at, and effective as of, such time, and the Sellers
shall have received a certificate of the President or a Vice President of
Parent, dated the date of the Closing Time, certifying to such effect; and
(b) The waiting period under the HSR Act applicable to the
transactions contemplated hereby shall have expired or been terminated and any
other required regulatory approvals shall have been obtained;
(c) The Board of Directors of the Company shall have received from
Dillon, Read & Co. Inc. confirmation, as of the date of the proxy or information
statement relating to the Merger, of its opinion described in Section 5.18 of
the Merger Agreement; and
(d) All conditions to consummation of the Merger prescribed by the
Merger Agreement shall have been satisfied or waived (other than consummation of
the purchases and sales contemplated by this Agreement and the Santa Fe
Securities Purchase Agreement).
(e) Sellers shall have received evidence reasonably satisfactory
to Sellers evidencing the accuracy of the representations and warranties set
forth in Sections 3.1 and 3.2.
6.2. CONDITIONS TO OBLIGATION OF BUYERS TO PURCHASE THE
SECURITIES. The obligations of the Buyers to purchase the Securities shall be
subject to the fulfillment at or prior to the Closing Time of the following
conditions:
(a) Each of the Sellers shall have performed in all material
respects their agreements contained in this Agreement required to be performed
on or prior to the Closing Time and the representations and warranties of each
of the Sellers contained in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the Closing Time as
though such representations were made at, and effective as of, such time, and
the Buyers shall have received a certificate of each Seller, dated the date of
the Closing Time, certifying to such effect;
7
<PAGE>
(b) The waiting period under the HSR Act applicable to the
transactions contemplated hereby shall have expired or been terminated and any
other required regulatory approvals shall have been obtained;
(c) All conditions to consummation of the Merger prescribed by the
Merger Agreement shall have been satisfied or waived (other than consummation of
the purchases and sales contemplated by this Agreement and the Santa Fe
Securities Purchase Agreement); and
(d) Buyers shall have received evidence reasonably satisfactory to
Buyers evidencing the accuracy of the representations and warranties set forth
in Sections 4.1 and 4.2.
(e) Section 13.01 of the HP Trust shall have been duly and validly
amended to remove the restriction on transfer of the Beneficial Interest.
7. TERMINATION.
7.1. TERMINATION BY MUTUAL CONSENT. This Agreement may be
terminated and the purchase and sale may be abandoned at any time prior to the
Closing Time by the mutual consent of the Buyers and the Sellers.
7.2. TERMINATION BY BUYERS OR SELLERS. This Agreement may be
terminated and the purchase and sale may be abandoned by the Buyers or the
Sellers if (i) all conditions to closing shall not have been satisfied or waived
and the Closing Time shall not have occurred by June 30, 1995 or (ii) a United
States federal or state court of competent jurisdiction or United States federal
or state governmental, regulatory or administrative agency or commission shall
have issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement or the Merger Agreement and such order, decree, ruling or other
action shall have become final and non-appealable; provided, that the party
seeking to terminate this Agreement or the Merger Agreement pursuant to clause
(ii) of this Section 7.2 shall have used all reasonable commercial efforts to
remove such injunction, order or decree.
7.3. AUTOMATIC TERMINATION. This Agreement shall terminate
automatically upon termination of the Merger Agreement or the Santa Fe
Securities Purchase Agreement.
7.4. EFFECT OF TERMINATION AND ABANDONMENT. In the event of
termination of this Agreement pursuant to this Article 7, all obligations of the
parties hereto shall terminate. In the event of termination of this Agreement,
however, nothing herein shall prejudice the ability of the non-breaching party
to seek damages from any other party for any breach of this Agreement, including
without limitation, attorneys' fees and the right to pursue any remedy at law or
in equity.
7.5. EXTENSION; WAIVER. At any time prior to the first to occur
of the Closing Time and the termination of this Agreement, any party hereto may,
to the extent legally allowed, (a) extend the time for the performance of any of
the obligations or other
8
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acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties made to such party contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions for the benefit of such party contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed by or on behalf of
the party granting such extension or waiver.
8. GENERAL PROVISIONS.
8.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made in this Agreement shall terminate one year
after the Closing Time.
8.2. NOTICES. Any notice required to be given hereunder shall be
sufficient if in writing, and sent by facsimile transmission and by courier
service (with proof of service), hand delivery or certified or registered mail
(return receipt requested and first-class postage prepaid), addressed as
follows:
If to any Buyer: If to any Seller:
LG&E Energy Corp c/o Prudential Financial Restructuring
220 West Main Street Group
P.O. Box 32030 100 Mulberry Street
Louisville, Kentucky 40202 9 Gateway Center Four
Attention: President Newark, New Jersey 07102-4069
Fax: (502) 627-2995 Telephone: (201) 802-3000
Attention: Joseph Y. Alouf
Fax: (201) 802-2333
With a copy to: With a copy to:
LG&E Energy Corp Prudential Capital Group
220 West Main Street 4900 Renaissance Tower
P.O. Box 32030 1201 Elm Street, Suite 4900
Louisville, Kentucky 40202 Dallas, Texas 75270
Attention: General Counsel Telephone: (214) 745-4600
Fax: (502) 627-2585 Attention: Thomas P. Donahue
Fax: (214) 745-1957
and:
Weil, Gotshal & Manges
767 Fifth Avenue
New York, New York 10153
Telephone (212) 310-8000
Fax: (212) 310-8007
Attention: Simeon Gold
9
<PAGE>
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
8.3. ASSIGNMENT; BINDING EFFECT; BENEFIT. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties; PROVIDED, HOWEVER, that the
Buyers may assign this Agreement to any of their subsidiaries or affiliates
whether or not such subsidiaries or affiliates exist at the date hereof;
PROVIDED FURTHER, that no such assignment shall relieve Parent of any of its
obligations hereunder. Subject to the preceding sentence, this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
8.4. ENTIRE AGREEMENT. This Agreement, between the Buyers and
the Sellers, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all prior agreements and understandings
(oral and written) among the parties with respect thereto. No addition to or
modification of any provision of this Agreement shall be binding upon any party
hereto unless made in writing and signed by all parties hereto.
8.5. AMENDMENT. This Agreement may be amended by the parties
hereto only by an instrument in writing signed by or on behalf of each of the
parties hereto.
8.6. GOVERNING LAW; CHOICE OF FORUM.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to its rules of
conflict of laws.
(b) Each of the parties hereto irrevocably (i) agrees that any
legal suit, action or proceeding brought by any of the parties hereto against
another arising out of or based upon this Agreement or the transaction
contemplated hereby may be instituted in any state or federal court located in
the State of Delaware, (ii) waives, to the fullest extent it may effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any such proceeding and (iii) submits to the exclusive jurisdiction of such
courts in any such suit, action or proceeding.
8.7. COUNTERPARTS. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies of
this Agreement, each of which may be signed by less than all of the parties
hereto, but together all such copies are signed by all of the parties hereto.
10
<PAGE>
8.8. HEADINGS. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
8.9. INTERPRETATION. In this Agreement, unless the context
otherwise requires, words describing the singular number shall include the
plural and vice versa, and words denoting any gender shall include all genders
and words denoting natural persons shall include corporations and partnerships
and vice versa.
8.10. WAIVERS. Except as provided in this Agreement, no action
taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
any party hereto of a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any other
provision hereunder.
8.11. SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or otherwise affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, the provision
shall be interpreted to be only so broad as is enforceable.
8.12. ENFORCEMENT OF AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof, this being in addition to
any other remedy to which they may be entitled at law or in equity.
8.13. PUBLICITY. The Buyers, the Sellers, Santa Fe and the
Company shall, subject to their respective legal obligations (including
requirements of stock exchanges and other similar regulatory bodies), agree upon
the text of any press release relating to this Agreement or the transactions
contemplated hereby before issuing any such press release or otherwise making
public statements with respect to the transactions contemplated hereby and in
making any filings with any federal or state governmental or regulatory agency
or with any national securities exchange with respect thereto.
8.14. CONSENT AND WAIVER. The Sellers hereby consent to the
execution and delivery of the Merger Agreement by the Company and waive any
default that such execution and delivery may cause under the Securities Purchase
Agreement dated as of December 14, 1993 entered into among the Sellers and the
Company.
11
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf as of the day and year first
written above.
LG&E ENERGY CORP.
By: /s/ Edward J. Casey, Jr.
----------------------------------------
Name: Edward J. Casey, Jr.
Title: Group President, LG&E Energy Services
CAROUSEL ACQUISITION CORPORATION
By: /s/ Edward J. Casey, Jr.
----------------------------------------
Name: Edward J. Casey, Jr.
Title: President
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ Joseph Alouf
----------------------------------------
Name: Joseph Alouf
Title: Vice President
PRUCO LIFE INSURANCE COMPANY
By: /s/ Gary Trabka
----------------------------------------
Name: Gary Trabka
Title: Vice President
PRUSUPPLY, INC.
By: /s/ Gary Trabka
----------------------------------------
Name: Gary Trabka
Title: Vice President
12
<PAGE>
SCHEDULE I
SECURITIES OWNERSHIP
<TABLE>
<CAPTION>
Beneficial
Interest Original
in Common Principal
Stock Amount of
Common through H/P Junior 8% Senior
Stock Trust Preferred Stock Notes
--------- ----------- --------------- -----------
<S> <C> <C> <C> <C>
The Prudential Insurance Company of America 838,248 3,206.4 $36,096,000
Pruco Life Insurance Company 34,927 133.6 1,504,000
PruSupply, Inc. 436,587 1,670.0 18,800,000
---------- ------- -----------
1,329,762 4,983,180 5,010.0 $56,400,000
---------- --------- ------- -----------
---------- --------- ------- -----------
</TABLE>
<PAGE>
SCHEDULE II
ACCOUNT INFORMATION
[Omitted]
<PAGE>
EXHIBIT 5
LIMITED IRREVOCABLE PROXY
THIS LIMITED IRREVOCABLE PROXY (this "PROXY"), dated February 10, 1995
is entered into among SANTA FE ENERGY RESOURCES, INC., a Delaware corporation
("SANTA FE"), and LG&E ENERGY CORP., INC., a Kentucky corporation ("LG&E").
WHEREAS, LG&E, Carousel Acquisition Corporation, a Delaware corporation
and wholly owned subsidiary of LG&E ("CAROUSEL"), and Hadson Corporation, a
Delaware corporation ("HADSON"), have entered into an Agreement and Plan of
Merger of even date herewith to effect a merger of Carousel with and into Hadson
(the "MERGER");
NOW, THEREFORE, Santa Fe hereby irrevocably designates LG&E, for and on
behalf of Santa Fe and in its name, place and stead, as Santa Fe's true and
lawful proxy and attorney-in-fact to attend any annual or special meeting of the
stockholders (the "STOCKHOLDERS") of Hadson at which the Merger will be voted
on by the Stockholders and to vote, or act by written consent in lieu of a vote
or meeting, any and all shares of common stock, par value $.01 per share, of
Hadson ("COMMON STOCK") that Santa Fe may own, or otherwise have the power to
vote or to direct the vote, during the term of this Proxy in such manner as to
cause the Merger to be approved; provided, however, that the foregoing
designation by Santa Fe of LG&E as Santa Fe's attorney-in-fact and proxy is
solely for the limited purpose of permitting LG&E to vote, or to act by written
consent in lieu of a vote or meeting, such shares of Common Stock in favor of
the Merger and may be exercised or otherwise utilized by LG&E only if Santa Fe
fails or refuses to vote its shares of Common Stock in favor of the Merger at
such meeting, or to act by written consent in favor of the Merger in lieu of a
meeting or vote.
The term of this Proxy shall commence on the date hereof and shall end on
June 30, 1995, or such later date, not beyond December 31, 1995, to which any
vote on the Merger or an Amendment may be extended; provided, however, that this
Proxy shall terminate automatically upon any termination of the Securities
Purchase Agreement among Santa Fe, LG&E and Carousel.
IN WITNESS WHEREOF, the parties have executed this Proxy and caused the
same to be duly delivered on their behalf as of the date first written above.
SANTA FE ENERGY RESOURCES, INC.
By:
----------------------------------------
Name:
Title:
<PAGE>
EXHIBIT 6
LIMITED IRREVOCABLE PROXY
THIS LIMITED IRREVOCABLE PROXY (this "PROXY"), dated February 10, 1995
is entered into among PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey
corporation, PRUCO LIFE INSURANCE COMPANY, an Arizona corporation, and
PRUSUPPLY, INC., a Delaware corporation (collectively, "PRUDENTIAL"), and LG&E
ENERGY CORP., INC., a Kentucky corporation ("LG&E").
WHEREAS, LG&E, Carousel Acquisition Corporation, a Delaware corporation
and wholly owned subsidiary of LG&E ("CAROUSEL"), and Hadson Corporation, a
Delaware corporation ("HADSON"), have entered into an Agreement and Plan of
Merger of even date herewith to effect a merger of Carousel with and into Hadson
(the "MERGER");
NOW, THEREFORE, Prudential hereby irrevocably designates LG&E, for and
on behalf of Prudential and in its name, place and stead, as Prudential's true
and lawful proxy and attorney-in-fact to attend any annual or special meeting of
the stockholders (the "STOCKHOLDERS") of Hadson at which the Merger or an
Amendment (as defined below) will be voted on by the Stockholders and to vote,
or act by written consent in lieu of a vote or meeting, (i) any and all shares
of common stock, par value $.01 per share, of Hadson ("COMMON STOCK") that
Prudential may own, or otherwise have the power to vote or to direct the vote,
during the term of this Proxy in such manner as to cause the Merger to be
approved, and (ii) to vote, or act by written consent in lieu of a vote or
meeting, any and all shares of Junior Exercisable Automatically Convertible
Preferred Stock, Series B of Hadson ("JUNIOR PREFERRED") that Prudential may
own during the term of this Proxy in such manner as to approve any proposed
amendment (an "AMENDMENT") that would increase or decrease the aggregate
number of shares of Junior Preferred, increase or decrease the par value of the
shares of Junior Preferred, or alter or change the powers, preferences, or
special rights of the shares of Junior Preferred so as to affect them adversely;
provided, however, that the foregoing designation by Prudential of LG&E as
Prudential's attorney-in-fact and proxy (the "DESIGNATION") is solely for the
limited purposes of permitting LG&E to vote, or to act by written consent in
lieu of a vote or meeting, (i) such shares of Common Stock in favor of the
Merger and (ii) such shares of Junior Preferred in favor of any proposed
Amendment, and the Designation may be exercised or otherwise utilized by LG&E
only if Prudential fails or refuses to vote its shares of Common Stock and
Junior Preferred in favor of the Merger and an Amendment, if any, respectively,
at such meeting, or to act by written consent in favor of the Merger and an
Amendment, if any, in lieu of a meeting or vote.
The term of this Proxy shall commence on the date hereof and shall end on
June 30, 1995, or such later date, not beyond December 31, 1995, to which any
vote on the Merger or an Amendment may be extended; provided, however, that this
Proxy shall terminate automatically upon any termination of the Securities
Purchase Agreement dated as of February 10, 1995 among Prudential, LG&E and
Carousel.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Proxy and caused the
same to be duly delivered on their behalf as of the date first written above.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By:
----------------------------------------
Name:
Title: Vice President
PRUCO LIFE INSURANCE COMPANY
By:
----------------------------------------
Name:
Title: Vice President
PRUSUPPLY, INC.
By:
----------------------------------------
Name:
Title: Vice President
